The Project On Government Oversight (POGO) Blog

Morning Smoke: A New Voice in the Tanker Debate

New power lobby emerges for KC-X split buy by Stephen Trimble [The DEW Line]

Barofsky, House Republicans raise new questions about TARP oversight by Ryan Holeywell [BailoutSleuth]

Stunning Reversal -- Schwartz Expects a Cost Breach on JSF by Amy Butler [Ares]

Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs by Richard Teitelbaum [Bloomberg]

Judge criticizes, but approves, settlement with Bank of America by Zachary Goldfarb [The Washington Post]

US military services release weapons "wish lists" by Andrea Shalal-Esa [Reuter]

New Podcast: Elaborating on Last Week's Recommendations to Congress

A new POGO podcast is now available for your listening pleasure! Click the link below to listen, or right-click / "Save As" to download:

Tumbling Dice: An Improvised Discussion of POGO's Latest Recommendations to Congress

In this episode, POGO staffers discuss our latest recommendations to Congress. But instead of an orderly rundown, we decided to mix things up and determine the sequence of recommendations by an impromptu roll of the dice.

We're also excited to announce that for all the iTunes enthusiasts out there, it is now possible to subscribe to our podcasts (free of charge of course) at the iTunes Store. If you would like to subscribe to our podcasts via good old-fashioned RSS, you may do so here.

-- Bryan Rahija

Morning Smoke: Will the Treasury Secretary's Political Woes Diminish His Authority?

Bailout Anger Undermines Geithner by Deborah Solomon [The Wall Street Journal]

Plan to Coordinate Civil and Military Affairs Gets Chilly Welcome by Spencer Ackerman [The Washington Independent]

Why Treasury shouldn’t regulate banks by Felix Salmon [Reuters]

Not Date Driven by Michael C. Sirak [airforce-magazine.com]

Philadelphia, where rogue traders dare not tread by Matthew Goldstein [Reuters]

Moving Beyond “A Declassification System That Does Not Work by Steven Aftergood [Secrecy News]

EPA Web site paving the way to transparency by Aliya Sternstein [Nextgov]

FOIA Facts: Why the Wait? by Scott A. Hodes [LLRX.com]

Glaxo Consistently Shared Avandia Data, Except… by Ed Silverman [Pharmalot]

Contracts -- Somebody Might Be Watching You

This week ends with remarkable news in the federal contract transparency world. First, the Office of Management and Budget (OMB) announced that a new and improved version of USAspending.gov will be released this year. I had the privilege of beta testing “Version 2.0” in late 2009, and although it had many new features and fun interactive maps, I thought that OMB had a long way to go to retain the usefulness of the current database, which doesn’t require as much drill-down to obtain contractor and agency data.

One complaint was that USAspending.gov V2.0 still missed the boat when it came to integrating federal contracting data. For years, POGO has recommended that the government integrate numerous contracting databases into a one-stop contracting shop because it is absurd that in today’s tech-savvy world the public must search multiple databases to link contractor registrations, solicitations, award announcements, contracts, and performance data — some of which aren’t publicly available. Uncle Sam certainly hasn’t been making it easy to track federal spending!

Which brings us to the second piece of good news: the General Services Administration appears to finally have listened to POGO, OMBWatch, the Sunlight Foundation, and many others who are frustrated with the current user-unfriendly systems. According to the GSA, the following nine databases will be integrated (you’re welcome, IBM — the winners of the $74.4 million contract):

1.       FedBizOpps

2.       Wage Determinations On-Line

3.       Central Contractor Registration

4.       Federal Agency Registration

5.       Online Representations and Certifications Application (or here)

6.       Past Performance Information Retrieval System

7.       Excluded Parties List System

8.       Federal Procurement Data System-Next Generation (FPDS-NG)

9.       Electronic Subcontracting Reporting System

Absent from that list is USAspending.gov “Version 2.0” (although FPDS-NG — the feeder system into USAspending.gov — is listed so I'm not sure how that will shake-out) and the forthcoming "Federal Awardee Performance and Integrity Information System," which will allow government officials to review a contractor's record of integrity or business ethics as required by law. POGO has expressed concerns about the FAPIIS database and urged President Obama and others to make it publicly available.

The integration of the above data sets is wonderful, but I’m wondering if the consolidated system will be available to the public or if this grand contracting resource will be for government eyes only. 

-- Scott Amey

Morning Smoke: Treasury Secretary Could See New Oversight Powers

Bill would broaden Treasury secretary's power by Brady Dennis and David Cho [The Washington Post]

F-​​35 Nunn-​​McCurdy Breach All But Certain: AF Chief by Greg Grant [Defense Tech]

VIDEO: General Schwartz versus the defense industry by Stephen Trimble [The DEW Line]

Fed Discount-Rate Increase Signals End to Emergency Measures by Craig Torres and Vivien Lou Chen [Bloomberg]

Downblending HEU at Y-12 by Frank Munger [Atomic City Underground]

Swaps Sleuths Are the Fix for Too Tangled to Fail by David Reilly [Bloomberg]

War Contractors Receive Defense of Freedom Medal for Injuries, But Attract Little Notice by T. Christian Miller [ProPublica]

New Ethics Gig for Ex-OFPP Chief by Robert Brodsky [Fedblog]

Your Two Cents on an Independent Audit Agency?

Nick Baumann over at Mother Jones has posted some feedback on the 12 recommendations we recently made to Congress:

My favorite idea of the bunch is probably the second one, an independent audit agency. The great thing about spending more money on auditors is that auditors catch enough waste and fraud that the increased funding tends to pay for itself, plus some. But government auditors are too dependent on the agencies and departments they're supposed to be monitoring.

Since this a relatively new idea for POGO, we wanted to ask our readers — what do you think of this particular recommendation? Here it is again:

2. Create an Independent Audit Agency

Auditors are on the front lines of rooting out wasteful spending in federal agencies. Experience has shown that increased funding for auditors ultimately results in greater savings for taxpayers, making it essential for these offices to have the funding, independence, staffing, and other resources they need to do their job. Unfortunately, investigations into the General Services Administration (GSA), Minerals Management Service (MMS) at the Department of the Interior, and the Defense Contract Audit Agency (DCAA) have found that auditors lack the independence from their agencies they need to effectively do their jobs. As a result, auditors' findings have been ignored or altered, and in some cases have resulted in retaliation or demotion [more on that here and here].

Congress should consider establishing an independent federal contract audit agency. Until then, we hope that Congress provides rigorous oversight to ensure that agency heads allow auditors to operate independently, and warn them that officials who interfere with auditors' independence will be held accountable.

So what would an independent audit agency look like? How else can we ensure that government auditors have independence?

Are there any other ideas on our list that jump out? Do you have a favorite recommendation? What's missing from the list?

-- Bryan Rahija

Morning Smoke: Internal Controls at TSA Are Deficient, Says Inspector General

Inspector general faults TSA's internal controls [CongressDaily]

Pentagon will ramp up F-35 review by Megan Scully [Government Executive]

Homeland Security’s Billion-Dollar Bet on Better Communications by Sarah Laskow [Center for Public Integrity]

Senate Panel Announces Big Hearing on Blackwater’s Afghanistan Contract by Spencer Ackerman [The Washington Independent]

Agreement Is Near on New Overseer of Banking Risks by Sewell Chan [The New York Times]

New presidential helo competition underway by Christopher P. Cavas [Military Times]

SEC Said to Use BofA Enforcement Talks to Press Proxy Rule by Jesse Westbrook and David Scheer [Bloomberg]

AIG drops derivatives portfolio sale plan by Francesco Guerrera [Financial Times]

Judge Rakoff Orders FINRA Documents to Remain Sealed by Larry Doyle [Sense on Cents]

Morning Smoke: Joint Strike Fighter Delayed by One Year

Pentagon confirms 1-year delay for JSF by John Reed [Air Force Times]

A Timely Jolt for the F-35 [The New York Times]

Tougher financial regulations not coming fast or easy for SEC's Mary Schapiro by Zachary Goldfarb [The Washington Post]

Senator offers praise, concern about Afghan contracting by Gregg Carlstrom [Federal Times]

Elders of Wall St. Favor More Regulation by Louis Uchitelle [The New York Times]

Public Input on Open Government Solicited by Steve Aftergood [Secrecy News]

Twelve Ways Congress Can Improve Our Government

Just this morning, POGO recommended 12 nonpartisan good-government fixes that Congress should implement in 2010. 

Coming in at #1 is enacting increased whistleblower protections — a reform that we feel is both most urgent and achievable. Whistleblowers play an invaluable role in the fight against waste, fraud, and abuse, but too often are retaliated against for exposing wrongdoing. Members of the House have put together a bipartisan bill that would strengthen protections, but it has yet to progress beyond the House Committee on Homeland Security, where it was referred to almost a year ago.

Loyal POGO readers might notice a new item at #2: creating an independent audit agency. It's critical that we enable auditors to do their best as the first line of defense against fraud, waste, and abuse. Sadly, as we explain in our full list of recommendations, "investigations into the General Services Administration (GSA), Minerals Management Service (MMS) at the Department of the Interior, and the Defense Contract Audit Agency (DCAA) have found that auditors lack the independence from their agencies they need to effectively do their jobs."

Here's the full list of our recommendations:

Non-competitive Contract to Be Awarded to Shady Contractor

Back before the winter skies unleashed their fury upon the District, a pair of Ohio Congressman highlighted another win for Kuwait & Gulf Link Transport Company (KGL), the government contractor noted on this blog for owning a truck involved in a tragic traffic accident that killed U.S. Lt. Col. Dominic Baragona.

Reps. Tim Ryan (D-OH) and Steve Driehaus (D-OH) have written a letter to Secretary of Defense Robert Gates expressing dismay over a pending non-competitive contract award to KGL, which, in spite of what the court called "indignant and callous" behavior, saw the wrongful death case brought against them by the Baragona family dismissed on the grounds that the courts lacked jurisdiction.

According to the presolicitation notice, "KGL currently provides similar services in the CENTCOM and has been identified as the only source with existing facilities to meet the agency’s requirement." It may well be that KGL has the "existing indoor and outdoor storage space; labor and supporting material(s) to provide distribution services," but it's frustrating to see the Department of Defense do business with a contractor with such a checkered history. Apart from being involved in the Baragona tragedy, Ryan and Driehaus point out that KGL has been blacklisted in India for "human trafficking issues." The fact that the contract is noncompetitive only adds another level of exasperation. At what point will we be willing to stand up and hold contractors accountable for their actions?

-- Bryan Rahija

Photo by Flickr user ziggy fresh, used under the Creative Commons license.

Morning Smoke: Lynn Says F-35 Faces 12-Month Delay

Bill Lynn: F-35 is 1 year behind schedule by Stephen Trimble [The DEW Line]

Success of President Obama's crackdown on lobbying questioned by Dan Eggen [The Washington Post]

Future Bailouts of America by Gretchen Morgenson [The New York Times]

WH 'Hammered' Allen on CG Woes by Colin Clark [DoD Buzz]

New Bailout Page: How Deep Is the Gov’t in the Red? by Paul Kiel [ProPublica]

Fed carrying losses from Bear portfolio by Henny Sender [Financial Times]

Subprime Goes Hollywood by Nick Baumann [Mother Jones]

Struggling Over a Rule for Brokers by Tara Siegel Bernard [The New York Times]

Professor in Louisiana Braves Another Kind of Storm

We wanted to call your attention to a story in yesterday’s New York Times about Dr. Ivor van Heerden, researcher, author, and former deputy director of the Louisiana State University (LSU) Hurricane Center. Dr. van Heerden is one of those people who exemplifies POGO’s mission: exposing systemic problems in government, and then identifying solutions to solve the problems. However, like others who have that mission, Dr. van Heerden has faced a number of obstacles in his goal of change, including the loss of his job. 

As you will see in the article, and in this press conference on Wednesday, Dr. van Heerden has filed a wrongful termination lawsuit in Louisiana state court alleging that LSU officials waged a multi-year campaign of retaliatory harassment against him after he led a team that conducted a comprehensive investigation into the devastation of Hurricane Katrina and made critical comments concerning the failure of the U.S. Army Corps of Engineers to safeguard the city of New Orleans. (LSU gets federal funding from the Corps.)

POGO has spoken to Dr. van Heerden, who has testified before Congress, and wrote a bestselling book, The Storm, in which he attributed 80 – 90 percent of the flooding in New Orleans to the Corps’ levee design failures, and found him to be an inspiring public servant. 

It is especially disturbing when someone in the teaching profession is removed for speaking out, as it sends a message to future generations that reporting fraud, waste, and abuse, is not a job duty. 

-- Ingrid Drake

Photo of the New Orleans East levee by Flickr user New Orleans Lady.