The Project On Government Oversight (POGO) Blog

House Committee Passes Bill to Micromanage Wall Street Regulator

By MICHAEL SMALLBERG

Last week, we urged Congress to approve the Obama Administration's funding request for the Securities and Exchange Commission (SEC), so that the agency can carry out its expanded requirements under the Dodd-Frank Act and protect investors from another financial crisis.

Any increase in the SEC's budget should be matched by heightened scrutiny of the agency's operations. And there's no question that the SEC is an agency in need of aggressive congressional oversight.

But Congress also needs to exercise caution to ensure that routine oversight doesn’t turn into burdensome micromanagement. Unfortunately, the House Financial Services Committee decided not to exercise this caution last week, when it voted to approve legislation that would force the SEC to jump through additional hoops in order to regulate Wall Street.

The legislation in question is the SEC Regulatory Accountability Act (H.R. 2308), introduced by Representative Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises. POGO and other groups wrote to Congress a few months ago opposing this bill.

In a nutshell, H.R. 2308 would require the SEC to conduct a rigorous cost-benefit analysis before issuing a regulation; adopt the regulation only if the benefits outweigh the costs; identify and assess alternatives to the regulation; and conduct a review every five years to determine if any regulations are outdated, ineffective, or excessively burdensome. (President Obama outlined a similar process in a recent Executive Order, but the SEC, as an independent agency, was not required to comply.)

Morning Smoke: White House Loves Aggressive Journalism, As Long As It Isn't About Them

MORNING SMOKE

Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog edit

Whistleblower Issues

The White House Loves Aggressive Journalism - Abroad
Jake Trapper, ABC News

Note to White House's Jay Carney: Get Your Facts Straight
Jesselyn Radack, Government Accountability Project

Whistleblowers Key in Health Care Fraud Fight
Kelly Kennedy, USA Today

Open Government

Open Government Advocates Protest CIA's $72 Per Hour Fee
Sean Reilly, Federal Times 

Financial Oversight

A Fraud Went Undetected, Although Easy to Spot
Floyd Norris, The New York Times

Regulators Adopt New Derivatives Rules
Ben Protess, The New York Times

New Citigroup Looks Too Much Like the Old One
Jonathan Weil, Bloomberg

Foreign Corrupt Practices Act

Bribery Case Falls Apart, and Tactics are Doubted
Leslie Wayne, The New York Times

National Security

JSF Weapons Tests Set; F-35A Flight Clearance "Within Weeks"
Colin Clark, Aol Defense 

Lobbying

It's Not Easy to Talk to the Fed Because Lobbying is Expensive
Suzy Khimm, The Washington Post

Government Oversight

Obama and the Case of the Missing Watchdogs
Dana Liebelson, The Week

Contract Oversight

Signs of Friction in Contractor-Government Relations
Charles S. Clark, Government Executive

Budget Breakdown: Throwing the Watchdogs a Bone

By JAKE WIENS

Our rolling analysis of President Obama's Fiscal Year (FY) 2013 budget request continues with another look at the watchdogs that save taxpayers money (directly and indirectly) by uncovering waste, fraud, and abuse in the federal government and identifying opportunities for potential savings.

We focused previously on the Government Accountability Office (GAO) and the Office of Special Counsel (OSC). Today we’ll look at an Office of Inspector General (OIG) that is working to rebuild from crippling cuts it faced last year.

The Corporation for National and Community Service Office of Inspector General (CNCS OIG)

By the numbers:

• FY 2011 (enacted): $7,684,000
• FY 2012 (enacted): $3,992,000
• FY 2013 (request): $5,400,000

Analysis: Community service, by most accounts, is a good thing. But that doesn’t mean that the federal agency dedicated to supporting such a noble cause doesn’t need a watchdog.

Camp Lejeune Cover-Up: Throw a Party, Watch a Film, Make a Difference

By DANA LIEBELSON

Have you heard the news? POGO is asking supporters to take a couple hours on Friday night to host an "action party" around the television premiere of Semper Fi: Always Faithful, an important documentary on the Marine Corps cover-up of the deadly water contamination at Camp Lejeune.

Camp Lejeune will likely go down in history as the stage of one of the worst toxic contaminations in the country—and one of the most shameful cover-ups by the Marine Corps. Between 1957 and 1987, as many as one million Marines at Camp Lejeune and their family members used and ingested water contaminated by extremely toxic organic compounds.

The documentary on this incident will be showing this Friday, February 24, on MSNBC at 10 p.m. EST. We’re encouraging you to invite friends and family over to your living room to watch the film, and then together, take action on POGO’s website. In recognition of the premiere, we have put together a web page where you can learn more, and then send two important online actions that will make a real difference.

If you simply can’t wait until Friday, you’re welcome to start taking action now. The first action you can take is to send a letter via POGO’s website to your Member of Congress, showing your support for the Janey Ensminger Act (H.R. 1742) and Caring for Camp Lejeune Veterans Act, (S. 277), which would provide healthcare and nursing services for victims of Camp Lejeune. The second action is to sign a petition that POGO will send to Secretary of Defense Leon Panetta, urging him to end the secrecy around Camp Lejeune and make information related to the contamination public. 

If you’re interested in connecting with the POGO community and opening your home to others interested in the film, you’re welcome to post your city and time of your party on POGO’s Facebook event page. Watch a trailer for the film below the jump.

Large Businesses Winning More Small Business Government Contracts

Does this look like a small business to you?

By NEIL GORDON

The American Small Business League (ASBL) has more distressing news about federal small business contracting. ASBL reviewed the federal government's fiscal year 2011 contracting data and found that the number of large businesses winning small business contracts has increased, and that many of these awardees are some of the largest companies in the world.

The federal government has a statutory goal of awarding 23 percent of all federal contract dollars to small businesses. According to the latest Small Business Goaling Report, the government fell slightly under that goal in FY 2010 (22.7 percent). However, as ASBL has repeatedly documented, government agencies fudge the numbers by reporting contracts awarded to large businesses as small business contracts.

Sure enough, ASBL found that 72 of the top 100 federal “small” business contractors in FY 2011 were actually large companies, a 20 percent increase over the previous fiscal year. These 72 large businesses received $16.4 billion, or 77.6 percent, of the total awarded to the top 100, which includes several companies in POGO’s Federal Contractor Misconduct Database:

Morning Smoke: Bloated, Bedridden Volcker Rule as Good as Dead

MORNING SMOKE

Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog edito

Financial Oversight

The Volcker Rule, Made Bloated and Weak
Jesse Eisinger, ProPublica

Regulators Plan Safeguards to Prevent Another MF Global
Ben Protess, The New York Times

Responding to Critics, SEC Defends 'No Wrongdoing' Settlements
Edward Wyatt, The New York Times

U.S. SEC Chief Backs Bill on Lawmaker Insider Trading
Sarah N. Lynch, Reuters

Revolving Door

Ex-SEC Officials Join Washington Consultancy
Andrew Ackerman, Market Watch

National Security

"Leon the Lip"
Mark Thompson, Battleland

More Good News, More Bad News for F-35
Philip Ewing, DoD Buzz

Army Avoids 'Radical Reshaping' of Vehicle Fleet, Despite Budget Cuts
Carlo Munoz, Aol Defense

Open Government

DoD Reports "Impressive Strides" in Updating Classification
Steven Aftergood, Secrecy News

Media Orgs File Amiscus Brief in Sterling Leak Case
Steven Aftergood, Secrecy News

Foreign Corrupt Practices Act

US Chamber Enlists Trade Associations in FCPA Push
C.M. Matthews, The Wall Street Journal 

Lobbyists in Fight-or-Flight Mode After Getting Booted from Advisory Committees

Click here to join POGO's Un-Do Influence campaign.

By MICHAEL SMALLBERG

It's now been several months since the Obama Administration finalized its policy to remove registered lobbyists from federal advisory committees. But on K Street, the battle is far from over.

The Hill reported last week about a lawsuit filed by several lobbyists who are challenging the Administration’s policy on constitutional grounds. The complaint was filed in September 2011 by six lobbyists, most of whom were serving on Industry Trade Advisory Committees (ITACs) run by the Commerce Department and United States Trade Representative (USTR).

The plaintiffs in the case are Erik Autor from the National Retail Federation; Nate Herman, who had represented the Travel Goods Association; Cass Johnson from the National Council of Textile Organizations; Stephen Lamar from the American Apparel and Footwear Association; Andrew Zamoyski, who had represented the Society of Chemical Manufacturers and Affiliates; and William Reinsch from the National Foreign Trade Council.

The lobbyists contend that the Administration’s ban violates their First Amendment rights by 

denying the benefit of committee service to individuals whose exercise of the right to petition triggers the [Lobbying Disclosure Act’s] registration requirement, while also interfering with the ability of the entities that seek the services of these lobbyists to communicate their views to the government.

In addition, the plaintiffs claim, the ban will reduce transparency and exacerbate perceptions of undue influence because lobbyists will simply de-register in order to evade the LDA requirements. They also argue that the ban is “squarely inconsistent” with the Trade Act of 1974, under which the Administration is required to “seek information and advice from representative elements of the private sector” regarding trade issues.

One of the lawyers working with the lobbyists told The Hill that the Administration’s ban is akin to excluding committee members because of their religious beliefs:

Morning Smoke: Nearly 400 House Staffers Became Lobbyists in Last Two Years

MORNING SMOKE

Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog edito

Revolving Door

Almost 400 Former House Staffers Registered to Lobby in Last Two Years
Lee Drutman, Sunlight Foundation

Whistleblower Issues

Pentagon Delays Endanger Whistleblowers, Report Says
Tom Vanden Brook, USA Today 

Contract Oversight

Lawmakers Demand Crackdown on U.S. Program Enriching Wealthy
Danielle Ivory, Elliot Blair Smith and Gopal Ratnam, Bloomberg

Navy Looks to Rein in Carrier Program Costs
Christopher P. Cavas, Navy Times

Lockheed Again Misses Pentagon's F-35 Fighter Goals
Andrea Shalal-Esa, Reuters

Government Oversight

Rep. Issa Has Been Busy as Oversight Panel Chairman
Ed O'Keefe, The Washington Post

Targeting Only Federal Workers is Unfair, Steny Hoyer Says
Joe Davidson, The Washington Post

Financial Oversight

Two Wall Street Players Ensnared in New Probe
Jake Bernstein, ProPublica

Legal Fees Mount at Fannie and Freddie
Gretchen Morgenson, The New York Times

Consumer Watchdog Launches Overdraft Inquiry
Ylan Q. Mui, The Washington Post

Foreign Corrupt Practices Act

DOJ Drops FCPA Sting Case
Rachel G. Jackson, Main Justice

Draft Report: Investigators Prematurely Closed Military Whistleblower Reprisal Cases

By NICK SCHWELLENBACH

You're in the military. You blew the whistle. Something bad happened to your career. You ask your military service Inspector General or the big Department of Defense Inspector General (DoD IG) to investigate what you believe is reprisal. You’re in good hands, right?

Maybe not. Or at least there’s some reason for concern. There are numerous problems with how investigators are handling these cases, according to a draft Government Accountability Office (GAO) report that POGO has obtained. (UPDATE: GAO has moved up the release of the final version of the report to today; the final version is now out. There may be differences between the draft and the final.)

Perhaps the most concerning finding is that unclear guidance “has resulted in investigators closing cases prematurely,” according to the draft. The guidance relates to “a key investigative question” on whether an adverse personnel action would be taken against the complainant in absence of whistleblowing. A “yes” answer to this question was estimated by GAO to be the cause, at least in part, for “65 percent of the cases closed between January 1, 2009 and March 31, 2011.”

The GAO did not say whether some of the cases prematurely closed might have been substantiated otherwise. The GAO did not try to assess whether the wrong conclusions were reached in any individual cases, according to the draft.

The unclear guidance comes on top of the higher evidentiary hurdle military whistleblowers face on this question compared to civilian government whistleblowers. As POGO noted last fall in our series on military whistleblower protections, this difference makes it more difficult for IGs to substantiate military whistleblower complaints of reprisal. And indeed few military reprisal allegations are substantiated. “For most of the reprisal allegations we reviewed,” an earlier 2003 GAO report stated, “management demonstrated to the satisfaction of an Inspector General that it would have taken the same course of action in the absence of a protected disclosure.” 

According to the draft, historically around 80 percent of the whistleblower reprisal workload in DoD is related to military personnel, with civilian employees, contractors, and non-appropriated fund employees rounding out the rest of the DoD’s reprisal investigations caseload. The DoD IG is the central hub within the DoD’s whistleblower reprisal protection system. It investigates allegations of whistleblower reprisal and oversees the military service IGs’ reprisal investigations.

The draft report details several other problems, here are some:

Letter: Panetta Denies Senior Mentor Had Conflict of Interest Over $50B Contract Used in War Game

By DANA LIEBELSON

POGO has obtained the letter Secretary of Defense Leon Panetta sent to Senator John McCain (R-AZ), asserting that a retired Air Force general turned Boeing executive had no conflict of interest while participating in a war game that featured a $50 billion contract Boeing was hoping to win. This is the Pentagon's latest move to assuage fears that its controversial "senior mentors" program was simply one big revolving door to the defense industry.   

In November, USA Today reported that while Boeing was vying to build a $50 billion-plus aerial tanker for the military, Air Force officials let retired four-star general Charles Robertson—who had become an executive for Boeing—participate as a "senior mentor" in order to get around that pesky conflict of interest problem. 

McCain ordered a Pentagon investigation into Robertson’s case after the USA Today report—and Panetta is flatly denying a conflict of interest. From the letter:

The Department required all then-serving Senior Mentors to complete public financial disclosure or separate from employment…after a Department-wide audit, the Department of Defense Inspector General reported on October 31, 2011, that the Department complied with these new DoD policies for hiring senior mentors as [Highly Qualified Experts].  The Department is committed to ensuring consistency and transparency in the use of Senior Mentors across the Department.

What Panetta doesn’t mention about that October IG report, is that it found that 98 percent of the retired senior officers from the Navy, Marines and three special combatant commands in the “senior mentor” program magically disappeared after Defense Secretary Robert Gates ordered the Pentagon to require the senior mentors to file public financial disclosure documents.

Morning Smoke: Financial Rules Being Rewritten Behind Closed Doors at the Fed

MORNING SMOKE

Where there's smoke, there's fire. POGO's Morning Smoke is a collection of the freshest investigations, scoops, and opinions related to the world of government oversight. Have a story you'd like to see included? Contact POGO's blog edito

Financial Oversight

Fed Writes Sweeping Rules from Behind Closed Doors
Victoria McGrane and Jon Hilsenrath, The Wall Street Journal

The Dodd-Frank Act: Too Big Not to Fail
The Economist

SEC Surrender Continues with Bear Bankers Deal
William D. Cohan, Bloomberg

Consumer Bureau to Supervise Debt Collectors, Credit Bureaus
Carter Dougherty, Businessweek

Lobbying

Lobbyists Decertify After Obama Ban
Kevin Bogardus and Rachel Leven, The Hill

Nuclear Weapons

Congressman Throws Down the Gauntlet
Ralph Hutchison, Oak Ridge Environmental Peace Alliance

National Security

The Army's Abrams Gamble
Philip Ewing, DoD Buzz

Whistleblower Issues

Whistleblowers Improvement Act to Weaken Whistleblower Rights?
RTAmerica, Youtube

Revolving Door

SAIC Names Jumper Next CEO
Marjorie Censer, The Washington Post

Gonna Put IT in the Want Ads: Keeping Contractors from Crossing the Line

By NEIL GORDON

While browsing Craigslist recently, POGO came across this job advertisement (pdf) posted by an unidentified “large firm” in Arlington, Virginia seeking a “Procurement Acquisition Analyst” with information technology experience to work for an unnamed government agency client. (POGO’s Federal Contractor Misconduct Database contains several Northern Virginia-based IT companies. One of them, CACI International, is headquartered in Arlington – could it be them?)

This job involves procuring IT software, hardware, and services, and it must be pretty sensitive, too, because the top of the ad declares in bold, capital letters that an active top secret clearance is required – no exceptions. (CACI also derives a substantial amount of revenue from intelligence work.) Among the functions to be performed:

- [P]rovide contractual, procurement, acquisition and technical support in the area of license management for our government client in the area of IT software purchases, expanding to hardware purchases.

- Support follows the entire lifecycle of the contract. This includes contract creation, contract maintenance, accountability throughout the life of a contract, and enforcing policy and software licensing compliance.

- [A]ssist the Contracting Officer Representative (COR) in writing and executing contracts; developing out-year budgets for software products and maintenance; assist with maintaining the inventory of licenses purchased and distributed throughout the enterprise; and tracking and monitoring contract performance. (emphasis added)

Why are we blogging about this particular job listing? After all, it’s no different than the thousands of others you see every day in newspapers or on the Web. Yet it perfectly illustrates the extent to which the federal government relies on contractors to provide a wide range of services, even those that arguably should only be performed by government employees.