The Project On Government Oversight (POGO) Blog

Morning Smoke: Air Force Continued Business with Contractor Convicted of Fraud

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 online producer

Contract Oversight

Despite Fraud, Air Force Kept Using Beach Contractor
Bill Sizemore, The Virginian-Pilot

National Security

Firms Split on Danger of Defense Cuts
Carlo Munoz, The Hill

Learning F-35 Lessons from F-22 Oxygen Errors
Defense Tech

Congress Eyes Probe Into Army Program
Lolita C. Baldor, Associated Press

Sequestration: The Way to Cut Defense Waste
Jon Basil Utley, The American Conservative

Panetta Says DoD and VA Need to Cut Red Tape
Steve Vogel, The Washington Post

Excluded Co-Owner of Propaganda Firm Keeps Ties to Pentagon
Tom Vanden Brook, USA Today

How to Lover F-35 Costs? Lockheed Asks Employees
Philip Ewing, DoD Buzz

Whistleblower Issues

Survey Finds Fortune 500 Employees Report More Often, Face More Retaliation
Samuel Rubenfeld, The Wall Street Journal

The Story of How I Got Relieved Unfairly in Iraq
Ret. Col. Larry Wexler, Foreign Policy

Financial Oversight

Facing Congress, Geithner Grilled on Rate-Rigging
Ben Protess, The New York Times

No Mention of Contractors, But Federal and Private Pay Differences Depend on Methodologies

 

From the GAO report Results of Studies on Federal Pay Varied Due to Differing Methodologies

By SCOTT AMEY

Yesterday, the Government Accountability Office (GAO) released a report entitled Results of Studies on Federal Pay Varied Due to Differing Methodologies (GAO-12-564). The report was requested by House Oversight and Government Reform Committee Chairman Darrell Issa and Federal Workforce Subcommittee Chairman Dennis Ross in an effort to learn more about varied findings of federal and private pay gap studies.

The issue of federal vs. private sector pay has been hotly contested, and was the subject of a March 2011 hearing before Chairman Ross’ Subcommittee. Unfortunately, that hearing raised more questions than it answered and GAO was called into to analyze the pay gap issue. The GAO report fails to make any recommendations, but it provides a comprehensive explanation of the legal and practical reality of the federal pay system and why comparisons to the private sector vary in their conclusions about the pay gap. Additionally, GAO analyzed 6 studies, including POGO’s Bad Business report, to better understand the wide variance.

GAO found that the studies used different methodological approaches, methods, and data. That was expected, as we had previously pointed out flaws in the Heritage Foundation 2010 study, which found that “federal employees earn approximately 30 percent to 40 percent more in total compensation (wages and benefits) than comparable private-sector workers.” POGO calculated the federal and private sector compensation gap to be 20 percent, but we emphasized that no one will really know the truth until uniform systems are created and apples-to-apples comparisons are conducted that factor in comparable skills, work experience, education, and other non-pay factors.

That leads me to the overriding concern that I have on the pay gap issue. The debate is important for the limited purpose of complying with the Federal Employee Pay Comparability Act of 1990. However, if the prevailing attitude is, as Heritage has proclaimed (see p. 16), that the private sector is cheaper than the public sector, and therefore we should “Hire More Private Contractors,” then GAO’s time and energy was wasted.

Morning Smoke: Pentagon Says Vests, Not Jets, To Blame for Choking F-22 Pilots

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 online producer

National Security

Pentagon: Blame Tight Vests, Not Stealth Jets, for Choking Pilots
Spencer Ackerman, Danger Room

Pentagon Lifts Flight Restrictions on F-22 Fleet
Carlo Munoz, The Hill

How Could the Navy Begin to Remake LCS?
Philip Ewing, DoD Buzz

Pentagon Efforts to Straighten Out Bookkeeping Have Billion-Dollar Cost Overruns
Zach Toombs, iWatch News

Pentagon Tightens Grading Standards, Cuts Into Lockheed Profits
Bob Cox, Sky Talk

Why the Air Force Doesn't Ask Apple for an iFighter
Philip Ewing, DoD Buzz

Open Government

Justice Department Defends Use of State Secrets Privilege
Steven Aftergood, Secrecy News

Financial Oversight

Europe Aims to Make Rate Manipulation a Criminal Offense
Mark Scott, The New York Times

New York Fed Faces Questions Over Policing Wall Street
Ben Protess and Jessica Silver-Greenberg, The New York Times

Government Oversight

Obama Opposes Bill to Halt Regulatory Changes
Matthew Weigelt, Federal Computer Week

Congress Should Reduce Reliance on Self-Regulatory Organizations for Financial Markets

By DANA LIEBELSON

The Project On Government Oversight is urging lawmakers to reduce the government's reliance on private self-regulatory organizations. These self-regulatory organizations, as POGO writes in a letter sent Monday to Congress, are a breeding ground for conflicts of interest and ultimately hurt the public interest.   

In particular, POGO cites the National Futures Association, a self-regulatory organization, which has a board filled with industry representatives and collects membership fees from those firms it is supposed to oversee. An organization like this could “have enhanced susceptibility to industry capture,” according to a recent report by the Securities and Exchange Commission.

As POGO points out in its letter:

FEMA Waiver Program Limits Debt Recoveries to 4 Cents for Every Dollar Improperly Spent

 

By SCOTT AMEY

The Federal Emergency Management Agency (FEMA) is operating a program that waives erroneous disaster payments in the vast majority of cases. FEMA errors resulted from manual processing errors, duplication of payments, failure of personnel to verify loss, and other mistakes.

According to a Department of Homeland Security Inspector General report, the Disaster Assistance Recoupment Fairness Act of 2011 (DARFA) waivers are being granted in nearly all cases. As of June 22, 2012, FEMA adjudicated 7,439 cases totaling $37,094,697 that were initially identified for recoupment. Of that amount, FEMA has granted waivers for applicants in approximately 96 percent of the cases it has reviewed. Specifically, FEMA has granted 7,160 waivers and denied 279 waivers totaling $35,497,327 and $1,594,129, respectively. Additionally, FEMA has expended an estimated $2,589,076 on the program, including planning and implementing provisions of the waiver process, training employees, and conducting waiver activities. For those who weren’t math majors, that means that the government debt waiver program is costing $1 million more than the amount of all program recoveries.

DARFA (see Sec. 565) authorizes FEMA to waive debt owed to the government because of an improper disaster assistance payment if the payment was caused by an error by FEMA, was not the fault of the debtor, and the collection would be against equity and good conscience. A waiver is also dependent on the debtor having a household income of less than $90,000 per year. A household with an annual income of more than $90,000 whose case meets the other qualifying criteria is eligible for a partial waiver. Waivers cannot be granted in cases of fraud by the debtor. The law applies to improper disaster payments made between August 28, 2005 and December 31, 2010.

Taking On Taxpayer Funded Human Trafficking

By JARED DURA and ANDRE FRANCISCO

Last month, a key Senate panel passed a bill setting new requirements for overseas contractors in order to prevent human trafficking. A similar amendment was included in the House's version of the National Defense Authorization Act (NDAA).

The End Trafficking in Government Contracting Act (S. 2234) was passed by the Senate Homeland Security and Governmental Affairs Committee on June 29. The Act requires that U.S. government contractors or subcontractors with contracts worth $1 million or more be monitored and are subject to investigation if they’re suspected to be trafficking persons. These provisions include preventing practices of soliciting a person by false or fraudulent pretenses, providing inhumane living conditions, or charging employees with exorbitant fees that violate the laws of the country from which an employee is recruited.

Human trafficking is a troubling problem among contractors and subcontractors working for the U.S. in Iraq and Afghanistan. In June 2011, POGO disclosed documents revealing labor trafficking by a KBR subcontractor. In its report, POGO revealed that Najlaa, KBR’s subcontractor, faced no repercussions after it deceived workers into believing they had an opportunity for a well-paying job in Iraq. Instead, the workers were placed in revolting living conditions with no work or wages for months.

These few stories of the victims of human trafficking are only the “tip of the iceberg” according to Commissioner Dov Zakheim of the Commission on Wartime Contracting, which produced a major report on the prevalence of human trafficking in Iraq and Afghanistan. Companies are profiting in the name of the American people by exploiting these laborers who are providing daily, necessary services to U.S. troops.

Morning Smoke: How Classified is Classified When 4.8 Million Have Security Clearances?

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 online producer

Open Government

Security-Cleared Population Tops 4.8 Million
Steven Aftergood, Secrecy News

Judge Rules for State Department in Dispute Over WikiLeaks Disclosures
Mike Scarcella, The Blog of Legal Times

Some Nuclear Weapons-Related Info to be Declassified
Steven Aftergood, Secrecy News

Senator: White House Behind National Security Leaks
Matt Vasilogambros, Government Executive

Government Accountability

GAO: Debt Fight Cost at Least $1.3 Billion
Ed O'Keefe, The Washington Post

50 States and No Winners
Caitlin Ginley, State Integrity

Contract Oversight

Justice Fails to Flag Contractors With a Criminal History
Eric Katz, Government Executive

No Pay Comparison Method is Definitive, GAO Says
Eric Yoder, The Washington Post

National Security

House Debate on Defense Bill Spending Finds One Bit of Bipartisan Light
Walter Pincus, The Washington Post

Financial Oversight

Congress Presses New York Fed for More Details on Rate-Rigging Scandal
Ben Protess, The New York Time

Morning Smoke: Documents Show Timid Regulators in the Face of Libor Manipulation

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 online producer

Financial Oversight

Libor Case Documents Show Timid Regulators
Ben Protess and Mark Scott, The New York Times

Wall Street Is Too Big to Regulate
Gar Alperovitz, The New York Times

Bankers Gone Wild
James Surowiecki, The New Yorker

Prosecutors, Regulators Close to Making Libor Arrests
Reuters

Futures Overseer Plots Revamp
Jacob Bunge, Scott Patterson and Michael Rothfeld

A Week in the Life of Libor
Editorial, The New York Times

National Security

GAO: Missile Defense Initiative Faces Continuing Challenges
Aaron Mehta and Zach Toombs, iWatch News

The Iron Quadrangle
Philip Ewing, DoD Buzz

Lockheed Martin's Earnings Will Be Solid Despite Looming U.S. Defense Spending Cuts
Trefis

Reporters Oppose Pentagon Monitoring
Austin Wright, Politico

Government Accountability

Names Often Shielded When Misconduct Occurs
Sean Reilly, Federal Times

Contract Oversight

House Votes to Cut Off Pentagon Deals with Russian Arms Exporter
Josh Rogin, Foreign Policy

House Takes Action on America's Call for Smarter Defense Spending

Good news from the Hill! Thursday, the U.S. House of Representatives finally listened to growing bipartisan support for putting a stop to runaway Pentagon spending.

In a 247-167 vote, members passed an amendment that freezes Pentagon spending at current levels, except for military personnel, the Defense Health Program, and the overseas contingency operations. It cuts $1.1 billion from the defense budget authorized by the House Armed Services Committee.

The passage of this amendment comes on the heels of a letter the Project On Government Oversight sent on Wednesday supporting the bill. The letter was signed by groups as ideologically diverse as the Tea Party and CODEPINK.

“The vote represents a critical turning point in Congressional spending trends and a show of unified support for reform not seen in many years,” POGO Executive Director Danielle Brian said. “The American people expect better. The message was delivered loud and clear.” 

Morning Smoke: Celebrating Dodd-Frank's Second Birthday with an Infographic

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 online producer

Financial Oversight

Dodd-Frank Turns Two This Week. Look How It's Grown!
Ezra Klein, The Washington Post

Libor Scandal Shows Many Flaws in Rate-Setting
Peter Eavis and Nathaniel Popper, The New York Times

Congressional Insider Trading Ban Might Not Apply to Families
Deirdre Walsh and Dana Bash, CNN

Barclays's Diamond Finds a Fried When It Counts
Jonathan Well, Bloomberg

Blamed Over Stanford, SEC's Texas Office Plots Comeback
Aruna Viswanatha and Sarah N. Lynch, Reuters

Government Accountability

GSA Spent More Than $268,000 to Entertain Employees Who Got Performance Awards
Lisa Rein, The Washington Post

National Security

Three Ploys the Department of Defense Uses When Their Budget Is at Risk
Dina Rasor, Truthout

House Approves $606B Defense Budget
David Rogers, Politico

Cut Defense Spending? Good Idea - But Sequestration's Not the Way
Peter Hegseth, Aol Defense

Open Government

Declassification Advances, But Will Miss Goal
Steven Aftergood, Secrecy News

Secrecy is Not a Small Business Value. Transparency Is
David Borris, The Hill

Punishing Leaks of Classified Information
Steven Aftergood, Secrecy News

Senator Leahy Publishes Secret Camp Lejeune Documents

 

Sen. Patrick Leahy

By DANA LIEBELSON

The Navy and the Marine Corps may no longer be able to hide what really happened at Camp Lejeune—today, Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) announced that his committee has published more than 8,000 Pentagon documents related to the water contamination on its website, many of which have never before been seen by the public.

“The Marines and other Americans who have been touched by this environmental disaster deserve nothing but complete candor from their government,” Leahy said today on the Senate floor. “I say to those Marines, we will find out what happened.”

In March, Leahy and a bipartisan group of eight other senators sent a letter to Defense Secretary Panetta, requesting that the Camp Lejeune documents be delivered within two weeks, unredacted. In the past, the Navy has cited all sorts of reasons for withholding the documents, including security concerns about releasing this “critical infrastructure information,” despite the fact that the location of water wells is already public.

Last month, the Navy cited the Privacy Act and refused to release the requested documents until the senators provided “an official request from a committee or subcommittee of jurisdiction.” Chairman Leahy and Ranking Member Charles Grassley (R-Iowa) responded to the Navy with an official Senate Judiciary Committee letter—to which the Navy had no choice but to turn over the information.

According to Senator Leahy’s press release, some redactions were made on the documents made public today, such as “personally identifiable information and information that would be subject to the Privacy Act.”

The publication of these documents isn’t the only good news to come out this week for Camp Lejeune victims. Yesterday, the Senate unanimously passed an important bill that would provide healthcare for Camp Lejeune veterans and their families. The bill now awaits action by the House.

Reps. Tonko and Speier Seek to End Ever-Increasing Taxpayer-Funded Contractor Compensation

Source: Dear Colleague letter from Reps. Tonko and Speier, July 2012

Updated with video below

By SCOTT AMEY

Today, the House takes up the Defense Appropriations bill. There has been much talk about DoD spending cuts and the impact of sequestration (but maybe the sky isn't falling). One way to realize savings would be to reduce the federal government's reimbursement of contractor compensation. Senators Boxer (D-Calif.) and Grassley (R-Iowa) and Representative Tonko (D-N.Y.) have been leading the charge to reduce the compensation cap for years.

The Senate took up the proposal in the National Defense Authorization Act of 2013 (NDAA), which has yet to be passed and signed by the president. After expanding the scope of coverage of the cap from the top five executives to all contractor employees (with a few occupational exceptions) last year, the Senate is now proposing to lower the cap from $763,029 to $230,700 (S. 3254, Sec. 842).

The Tonko-Speier amendment  reaffirms the Senate’s action, proposing to reduce the compensation cap for contractors and subcontractors to $230,700.

For years, the Project On Government Oversight has supported congressional efforts to reduce the burden of federal contracting costs, including contractor compensation, on taxpayers. Compensation based on financial performance is more appropriately paid from corporate earnings or equity rather than as a base contract cost passed onto taxpayers.

The possible savings are in the billions.