The Project On Government Oversight (POGO) Blog

SIGAR Slams Army Corps for Letting DynCorp Walk Off the Job

By NEIL GORDON

On Thursday, the government’s Afghanistan reconstruction watchdog released a report showing that the U.S. military has failed to address serious construction deficiencies at an Afghan Army garrison that have persisted for more than two years. The report also criticized the military’s handling of the construction contractor, DynCorp International, which was released of its obligation to repair the deficiencies.

The U.S. Army Corps of Engineers (USACE) paid DynCorp almost $71 million to oversee construction of the garrison, Camp Pamir, in Kunduz Province on Afghanistan’s northern border. In April 2010, the Special Inspector General for Afghanistan Reconstruction (SIGAR) reported that the facilities at Camp Pamir were at risk of structural failure because of poor site grading and serious soil stability issues. During a follow-up inspection this year, SIGAR found that USACE had failed to address the soil stability problem, and identified additional structural failures (one of which is pictured above), improper grading, and new sink holes.

Perhaps the most troubling finding is that, despite DynCorp’s unsatisfactory performance, USACE released the contractor in December 2011 under a settlement that absolved DynCorp of responsibility for fixing the structural defects. Not only was DynCorp paid in full and released from all existing or future warranty obligations, USACE also retroactively extended the contract duration date by 948 days (to make it appear that DynCorp had met contractual deadlines) and changed DynCorp’s unsatisfactory performance ratings to satisfactory.

POGO's Top Picks for Defense Budget Bill

Yesterday, the Project On Government Oversight sent a letter to Congress with our picks for the most important provisions that should be included in the National Defense Authorization Act for Fiscal Year 2013 (NDAA, H.R. 4310 and S. 3254). Even though election season is in full swing and Congress has passed very little legislation as of late, the NDAA has become something of a must-pass bill and is one of the few bills that’s highly likely to reach the President’s desk for signature this year. The House passed H.R. 4310 and the Senate Armed Services Committee passed S. 3254 in May. Now Hill staffers are in discussions about how to reconcile the two versions during the lame duck session.

Some of POGO’s recommendations center on reining in wasteful Pentagon spending by cutting unnecessary weapons systems and nuclear programs. (Many of these are drawn from Spending Even Less, Spending Even Smarter in which we and Taxpayers for Common Sense identified over $600 billion in defense budget savings.) Of course, several of the measures we champion would enhance oversight and accountability to taxpayers. These range from strengthening whistleblower protections to increasing contractor accountability to improving information about how the Pentagon spends taxpayer dollars.

POGO is also urging Senate leadership to allow adequate time for debate and amendments to the NDAA on the Senate Floor. In addition, the NDAA should be reconciled by an open, transparent conference committee with all proceedings webcast live for the public. A bill of this magnitude, authorizing over $600 billion taxpayer dollars, with such important consequences for our national security and economy should not be rushed through committee or passed behind closed doors.

POGO’s recommendations are listed below. You can also read the letter we sent to HASC and SASC for the details.

Watchdog: Interest Rate Manipulation Puts Taxpayers at Risk

By MICHAEL SMALLBERG

The manipulation of a global interest rate called LIBOR could be costing U.S. taxpayers money, according to a new federal watchdog report.

Taxpayers "continue to be at risk" from government bailout programs' reliance on the interest rate, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) said in a report released today.

In June, U.S. and British authorities charged Barclays Bank with attempting to manipulate the London Interbank Offered Rate (LIBOR), a benchmark that affects the cost of borrowing money throughout the world. Even though Barclays agreed to take remedial action, government officials still have questions about the reliability and integrity of the interest rate, according to the SIGTARP.

"Aside from the Barclays situation, market data raises questions about the integrity of LIBOR today," a U.S. regulatory official testified last month.

Previous news reports have explored how alleged LIBOR manipulation could affect home, credit card, and car loans in the U.S. But LIBOR could also spell trouble for U.S. taxpayers who have an ongoing stake in the government's bailout programs, the SIGTARP said.

There are two bailout programs—one managed by the Treasury Department, the other managed by Treasury and the Federal Reserve—that continue to rely on the LIBOR benchmark. These agencies have the authority to use a different benchmark, but they refuse to make the change, according to the SIGTARP.

SIGAR Seeks Debarment of Contractors Who Aid the Enemy

Photo: Special Inspector General for Afghanistan Reconstruction John F. Sopko testifies before the House Oversight and Government Reform National Security Subcommittee on September 13, 2012.

On Tuesday, the Special Inspector General for Afghanistan Reconstruction (SIGAR) posted a letter to top U.S. diplomatic, military, and U.S. Agency for International Development (USAID) officials calling for immediate action to stop the disbursement of federal funds to several companies and individuals believed to be actively supporting the insurgency in Afghanistan.

Government investigations have uncovered instances of U.S. taxpayer money being funneled to the enemy in Afghanistan, a serious problem largely caused by weak oversight. To remedy this, Congress inserted Section 841 into the Fiscal Year 2012 National Defense Authorization Act, which requires the Commander of the United States Central Command (CENTCOM) to review recipients of U.S. contracts, grants, and cooperative agreements with an estimated value exceeding $100,000 to determine if they are actively supporting an insurgency or otherwise opposing U.S. or coalition forces in a contingency operation. If this determination is made with regard to a particular person or corporate entity, CENTCOM puts Department of Defense (DoD) Heads of Contracting Activities (HCAs) on notice to restrict, terminate, or void their contracts, grants, and cooperative agreements.

According to the SIGAR letter, in July, CENTCOM Commander General James N. Mattis identified the following 5 individuals and entities as “actively supporting an insurgency” in Afghanistan:

• Arvin Kam Group LLC
• Arvin Kam Construction Company
• Vakil Saadat
• Haji Mohammad Almas Khan
• Haji Khalil Fruzi

DoD Service Contract Budget & Spending Data Don't Match Up

Today, the Project On Government Oversight sent a letter to congressional and executive branch officials, highlighting the Department of Defense’s (DoD) inability to provide sufficient oversight of the hundreds of billions of dollars spent each year to procure services from contractors. Without reliable and accurate data, how can Congress hold DoD accountable for complying with requirements for submitting accurate budget requests? Additionally, in the absence of government transparency, how are taxpayers to know whether their dollars are being spent in a cost-effective fashion?

POGO analyzed DoD’s responses to congressional inquiries; testimony given at Senator Claire McCaskill’s March hearing, “Contractors: How Much Are They Costing the Government?”; and DoD policy and budgetary records. POGO found inconsistencies in DoD’s claims about making cost-efficient policy and human capital decisions. POGO’s review of DoD service contracting budget and spending documents found that it expends between 2.35 and 3.53 times more of its funding on service contracts than on its civilian workforce, and that the cost of an average contractor full-time equivalent (CFTE) is between 2.94 and 8.60 times more than an average DoD civilian full-time equivalent (GFTE). In short, the numbers are grossly out of proportion, and there need to be improvements in comparative cost modeling and service contracting data in order to control costs and protect taxpayers.

New Podcast: The Foreign Policy Auction

By ANDRE FRANCISCO

How much does it cost to change U.S. foreign policy? Project On Government Oversight investigator Ben Freeman just released a new book delving into that question. The Foreign Policy Auction looks at the countries seeking to influence U.S. foreign policy and the D.C. lobbying firms they hire to do the work. In this podcast, we talk with Ben about how foreign governments go about lobbying the U.S. and how foreign lobbying led to the U.S. reopening its embassy in Libya despite the country having had a history of sponsoring terrorism.

• Listen to the new podcast (or right click and "save as" to download)

• Subscribe to POGO podcasts via RSS
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• Previous podcasts

Andre Francisco is an online producer for the Project On Government Oversight.

Follow @andrefrancisco

We've Seen This Video Before: Drunk Security Contractors Gone Wild

When we first heard that ABC News was working on a story about U.S. security contractors in Afghanistan getting drunk and doing drugs, we had one of those collective sighs: “Here we go again.”

The leaked cell phone video that ABC News and CNN broadcast this week showed a shirtless, staggering security manager for Jorge Scientific showing off his drunken Kung Fu and later wrestling another man. Even more troubling was a shot of the company’s chief medical officer appearing stoned out of his mind on what the report identified as the drug Ketamine.

As Danielle Brian, executive director of the Project On Government Oversight, told ABC News, the men in the video were not only endangering themselves, but also the civilians they were hired to protect.

There was other questionable behavior in investigative reporter Brian Ross’s Nightline report. Employees of Jorge Scientific, which has a $47 million contract to train Afghan police, also supposedly threw live ammo into bonfires they built outside their Kabul residence.

One of the former employees who blew the whistle on the improper behavior said, “It was like a frat house.”

Frat house antics. Drunk, shirtless contractors. Bonfires. It’s déjà vu all over again.

Three years ago, my colleagues at POGO heard similar stories from whistleblowers working for a different security contractor in Afghanistan. That contractor, ArmorGroup North America, provided security at the U.S. embassy in Kabul.

POGO Wants Reduced DoD Contractor Employee Compensation Cap

Yesterday, the Project On Government Oversight and nine government accountability, research, and labor groups urged members of Congress to lower the cap on maximum allowable compensation paid by taxpayers to all Department of Defense contract employees from $763,029 to $230,700, pursuant to section 842 of the National Defense Authorization Act for FY 2013 (S. 3254).

The most recent proposal was sponsored by Senator Joe Manchin (D-W.Va.), and follows bipartisan efforts by Senators Barbara Boxer (D-Calif.) and Charles Grassley (R-Iowa) and efforts by Representatives Paul Tonko (D-N.Y.) and Jackie Speier (D-Calif.).

Estimates predict a reduction in taxpayer-paid compensation would result in savings of at least $5 billion a year, almost 10 percent of the entire $55 billion reduction in 2013 required by sequestration. Those savings might be a low estimate—one senior official testified that the Army would save $6 billion if the compensation cap was reduced to $400,000, nearly double the current legislative proposal.

Breaking News: Pentagon Intensifies Efforts to Plug Leaks, Catch Leakers

By NICK SCHWELLENBACH

The Secretary of Defense sternly warned Defense Department employees Thursday that the government will scour news reports for leaks of classified information, try to unmask the leakers, and refer cases to the Justice Department—which has the power to prosecute.

In a sweeping memo, Secretary of Defense Leon Panetta announced the latest efforts by the executive branch to stanch the flow of secret information into the public domain.

“I am directing a ‘top down’ approach to improve the identification, investigation, and reporting of unauthorized disclosures of classified information,” Panetta wrote.

The Pentagon’s head of public affairs “will review all major, national media reporting for unauthorized disclosures of DoD classified information,” the memo states.

The Department’s Under Secretary for Intelligence will then assign DoD investigators to probe the leaks and “when appropriate” refer the matter to the Justice Department.

The memo shows how the Department is trying to exert greater control over the flow of all information—even unclassified information—to the media. The Pentagon’s top spokesperson “is the sole release authority to news media for official DoD information” and “all media inquiries must be coordinated through appropriate public affairs channels,” according to the memo.

Don't Let Your Tax Dollars Sink With This Ship

Click to see our graphic

By ANDRE FRANCISCO

The Pentagon once again wants to spend billions of your taxpayer funds on a new ship that is plagued with problems. We think it’s time to say "no."

The Navy testing office recently said the littoral combat ship is not meant for combat, even though combat is literally its middle name! The Navy plans to spend $2.2 billion next year on this program, but the Project On Government Oversight revealed that there have been numerous problems during testing and early deployment (including cracks in the hull and loss of power throughout the entire ship). POGO also revealed that Navy officials hid poor testing results while it was trying to convince Congress to buy more ships. The Navy ultimately envisions buying 55 of these sub-par ships.

Check out our graphic then share it with your friends so we can spread the word about this ship.

Andre Francisco is an online producer for the Project On Government Oversight.

Follow @andrefrancisco

Video: U.S. Defense Contractors Drunk and Stoned on the Job

Watch More News Videos at ABC | 2012 Presidential Election | Entertainment & Celebrity News

Editor's Note: After you've seen the video below, get the full story in a new blog post from POGO's Joe Newman.

By ANDRE FRANCISCO

New video released by ABC shows U.S. defense contractors in Afghanistan stumbling drunk and stoned on sedatives while on the job.

The contractor, Jorge Scientific, has a contract to train Afghan police, according to ABC News. Military personnel and defense contractors are strictly prohibited from consuming alcohol or drugs, but it looks like there was very little oversight of Jorge Scientific.

Project On Government Oversight Executive Director Danielle Brian was quoted in the ABC story as saying,

It has got to be that there is more of a sense of oversight on the part of the military and the U.S. government to make sure these contractors are not actually undermining the diplomatic mission with their behavior.

POGO has been following the behavior of U.S. defense contractors in Afghanistan for years, including an investigation into similar behavior by the defense contractors guarding the U.S. embassy in Kabul.

Andre Francisco is an online producer for the Project On Government Oversight.
Follow @andrefrancisco

Spinning Sequestration Statistics

“You can find statistics to support almost anything,” Stephen Fuller told the Washington City Paper last year.

“If I were asked to make a case for it, I could make a really strong case for it, and if I were asked to make a strong case against it, I could make a really strong case against it. You do what you are asked to do, and you don’t answer other questions,” Fuller elaborated further, speaking specifically about a study he had considered doing for Wal-Mart.

Fuller, a George Mason University economics professor and noted consultant for multiple industries, has recently taken this ethos and turned his attention to sequestration. Over the past year he’s produced three studies for the leading Pentagon contracting advocacy organization, the Aerospace Industries Association (AIA). In his analysis of the overall economic impact of sequestration if it occurs, he finds that it will “cost the U.S. economy 2.14 million jobs,” and the District of Columbia, Virginia, and Maryland 449,773 jobs in 2013. Fuller also found that reducing Pentagon spending would cause a decline in the U.S.’s Gross Domestic Product (GDP). According to Fuller's study, “The long-term consequences will permanently alter the course of the U.S. economy’s performance.”

In addition to producing studies for Pentagon contractors, Fuller’s services are also routinely employed by realtors and housing developers. The conclusions from his work for those industries stand in stark contrast to his conclusions from the AIA studies. Just last month at the Multifamily Development Symposium, Fuller claimed that 35,000 new housing units are needed in the Washington region, as “1.8 million employment vacancies have to be filled in the next 20 years.”