The Project On Government Oversight (POGO) Blog

Fluor Whistleblower Draws "First Blood"

Volpentest HAMMER Training Facility at the Hanford Nuclear Site.

By NEIL GORDON

Last week, the Department of Justice announced it had intervened in a False Claims Act lawsuit alleging that federal contractor Fluor Corporation improperly used federal funds for lobbying activities. The lawsuit was originally filed in February 2011 by whistleblower Loydene Rambo.

The Byrd Amendment prohibits contractors from using federal funds to influence or attempt to influence the executive branch or Congress in connection with the awarding, extension, continuation, renewal, amendment, or modification of a federal contract. Contractors are required to certify (FAR Subpart 52.203-11) that they will comply with this lobbying restriction.

The government alleges that Fluor, while managing the Department of Energy’s (DOE) Hanford nuclear site in southeastern Washington State, spent DOE funds to lobby Congress and executive branch officials to secure additional appropriations and contracts for the Volpentest HAMMER (Hazardous Materials Management and Emergency Response) Training Facility at the site.

Oil and Gas Industry Loses Latest Round in Battle with SEC

By MIA STEINLE

In an attempt to combat corruption in resource-rich developing countries, two years ago Congress ordered U.S. corporations to disclose payments they make to foreign governments for the extraction of oil, gas, and minerals.

As supporters of the law saw it, the lack of transparency had allowed corruption to flourish and an elite few to profit from natural resources that should have benefited entire nations.

But the extractive industries protested that the requirements would damage their business, and they sued to block the rule that the Securities and Exchange Commission wrote to implement Congress’s mandate.

This week, the SEC stood its ground and refused to put the rule on hold while industry groups challenge the agency in court.

Energy Dept. IG Finds Conflicts of Interest in Nuke Clean-Up

Aerial view of the Portsmouth Gaseous Diffusion Plant

By MIA STEINLE

Government investigators have uncovered conflicts of interest among the contractors working on a multi-billion dollar effort to decontaminate and decommission two of the nation’s nuclear weapons sites.

Contractors at plants in Piketon, Ohio, and in Oak Ridge, Tenn., were overseeing work by subcontracting companies in which they hold a financial interest, according to a report from the Department of Energy (DOE) Inspector General.

According to federal and DOE regulations, this arrangement means the contractors are “unable to render impartial assistance or advice to the government,” and their “objectivity in performing the contract work is or might be otherwise impaired,” the report said.

The investigation found that contractor Restoration Services Inc. (RSI) was overseeing the work of subcontractor VETCO at both nuclear sites, even though RSI holds a financial interest in VETCO.

Government Sues Triple Canopy for Iraq Contract Fraud

 

A fraud lawsuit alleges none of the security guards provided by Triple Canopy to guard a U.S. airbase in Iraq met the Army's minimum target shooting requirements.

By NEIL GORDON

The Department of Justice announced the filing of a lawsuit against private security firm Triple Canopy for allegedly defrauding the government on an Iraq security contract.

In June 2009, the Joint Contracting Command in Iraq/Afghanistan (JCC-I/A) awarded Triple Canopy a one-year, $9.5 million contract to provide security at Al Asad Airbase, the second largest U.S. airbase in Iraq. According to the government’s complaint, Triple Canopy billed the government for hundreds of Ugandan security guards who did not meet firearms proficiency requirements.

“[Triple Canopy] went further than simply billing the Government for unqualified personnel,” the complaint alleges. “It falsified the documents in its files to show that the unqualified guards each qualified as a ‘Marksman’ on a U.S. Army qualification course.” According to the complaint, the government paid Triple Canopy a total of $10.4 million on the contract between September 2009 and July 2010 in reliance on falsified billing documents.

Government Best Practices for Managing a Crisis

Hurricane Sandy has devastated the Northeast, leaving entire neighborhoods under water, millions without power, and the entire New York subway system out of commission. The public is acutely aware of how important it is that the government be prepared to respond with advance warnings and accessible information on planning, preparing, and mitigating the effects of a natural disaster.

But public access to crucial information will not only save lives and prevent damage during a natural disaster, but also in cases of widespread outbreak of food-borne illness, catastrophic oil spills, or a terrorist attack. Last week, the Project On Government Oversight joined the Union of Concerned Scientists (UCS) Center for Science and Democracy and several other organizations in sending a letter offering crisis management recommendations to presidential candidates President Obama and Governor Romney. We hope the incoming Administration will take swift steps to adopt these ten recommendations to ensure the strongest possible crisis response policy.

UCS organized a panel of experts, ranging from public health and crisis information management specialists to openness and transparency advocates, to put together this list of core recommendations. POGO’s Director of Public Policy, Angela Canterbury, was a participant.

“Our new Center for Science and Democracy hopes to encourage experts working in diverse disciplines to come together as colleagues and offer recommendations that cross partisan and ideological lines,” said Celia Wexler, UCS Senior Washington Representative. “Crises challenge our democracy, and it’s crucial that they are addressed in a way that gives the public evidence-based information that will help them cope.”

Energy IG Finds Security Contractor Cheated

Cheating on security tests has become almost as common as in high school classrooms

By PETER STOCKTON and LYDIA DENNETT

Cheating on security tests is nothing new for Wackenhut Services Inc.’s Oak Ridge unit (WSI-OR) at the Y-12 National Security Complex. In September POGO reported that, once again, Wackenhut, the security contractor at the Tennessee nuclear weapons facility, was accused of cheating on security performance tests that were administered at the complex after an 82-year-old nun and two accomplices broke in this July.

Now, the Department of Energy (DOE) Inspector General (IG) has released a report about the cheating, finding that copies of the test questions and answers “had been distributed in advance of the test to…the very people whose knowledge was to have been evaluated as part of this process.”

According to the IG report, the test was sent by encrypted email to “trusted agents” at Babcock and Wilcox Y-12, the managing and operating contractor at Y-12, for review. One of the officials sent the test to a WSI-OR manager for comment, an apparently common practice as these officials often don’t have the specific knowledge to provide informed feedback. The WSI-OR manager proceeded to send the test materials to two other Protective Force officers, none of whom were deemed trusted agents. The WSI-OR officials “treated the documents as if they were a training aid and widely distributed it to a variety of officers.” This cheating was discovered when a federal inspector found a copy of the test on the seat of a guard vehicle the day before it was to be administered.

The IG report called the failure to safeguard the test “inexplicable and inexcusable.”

5 Steps to Curing Election Dysfunction

Recently, while I waited at a stop light, a motorist pulled up next to me and yelled into my open window, "YOUR CANDIDATE SUCKS!" He was responding to a bumper sticker my daughter had put on our car for the presidential candidate she supports. Did he think he was persuasive? Did he think I’d change my mind because he was yelling at me?

There seems to be a lot of yelling at each other lately.

People on both ends of the political spectrum are loudly making their opinions known on their Facebook pages, in their Twitter feeds, and even stopped in traffic. And they’re doing so without always checking the so-called facts that they’re espousing, or listening to what the other “side” has to say.

They are spurred on by partisans on both sides and by many in the media who demonize the other side in order to attract more followers, more contributions, higher ratings—entities whose goal is not to fix problems or to set facts straight, but to simply further their own interests.

All this anger and unwillingness to listen currently typical of the American public is also now typical in Congress. Gridlock and paralysis are the new norm as the members of Congress stick blindly to their party lines, rather than acting in the best interest of our nation.

Although this jarring political discourse isn’t civil, constructive, or even particularly informed, there is a potential upside to the mayhem we are living through.

It shows that the American people care again.

Not too long ago, the biggest problem with engaging the citizenry was apathy. Our challenge is no longer to try to wake the sleeping giant. Now our challenge is to convert the energy currently expended hurling epithets at the other side into an enthusiasm for fixing the problems being roared about.

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.