Senators Charles Grassley (R-IA) and Claire McCaskill (D-MO) just went to the Senate floor to introduce a combined amendment that will strengthen the independence of certain Inspectors General (IGs), including those that serve as watchdogs within many financial regulatory agencies. The Grassley-McCaskill amendment (SA 4072) is available here.
POGO wrote to the Senate last week in support of this important amendment, which will fix a provision in the Restoring Financial Stability Act (S. 3217) that would convert the IGs at several financial regulatory agencies to presidentially appointed positions. These watchdogs are currently classified as designated federal entities (DFE) IGs, and are appointed by their agency heads.
Although some believe that these IGs will be able to operate with greater independence if they are appointed by the President and confirmed by the Senate, the Grassley-McCaskill amendment offers a better solution. Instead of converting them to presidentially appointed positions, the amendment will require all DFE IGs—including the financial agency watchdogs—to report to the entire board or commission at their agencies. In addition, the amendment requires a two-thirds vote of the entire board or commission in order to remove a DFE IG, making it virtually impossible for any one individual agency head to unilaterally remove an IG for political reasons.
The amendment will also improve coordination between financial agency IGs by connecting them through a new Council of Inspectors General on Financial Oversight (CIGFO).
We'll keep you posted as soon as we hear any other updates on the Grassley-McCaskill amendment. In the meantime, you can watch the FinReg debate live on C-SPAN2.
-- Michael Smallberg
UPDATE: The Grassley-McCaskill amendment was just passed by a vote of 75-21.
See also:
- Podcast: POGO's Favorite FinReg Amendments
- Grassley Proposes FinReg Amendment That Would Strengthen Independence of IGs
- POGO letter in support of Grassley amendment to strengthen inspector general independence
- POGO letter in support of McCaskill amendment to improve coordination between financial agency inspectors general
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