The Project On Government Oversight (POGO) Blog

Video: Freeman on the Revolving Generals

By ANDRE FRANCISCO

What do top U.S. generals do after they retire from the military? Maybe relax on a golf course somewhere after decades of service? Some may, but 70 percent of three and four star generals go to work for defense contractors or consulting firms after them leave the military, according to a new report from Citizens for Responsibility and Ethics in Washington.

This is hard evidence of the revolving door in Washington between public agencies and private companies that do business with the government. Project On Government Oversight investigator Ben Freeman went on HuffPost Live yesterday to discuss this revolving door with John Amick and Michael Hastings. Watch the full video above.

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

Follow @andrefrancisco

Video: POGO's Michael Smallberg Dissects the Revolving Door

By ANDRE FRANCISCO

POGO Investigator Michael Smallberg was a guest on a HuffPost Live discussion about the rapid spinning of the revolving door between government and K Street lobbying firms.

Michael joined executive director of the Center for Responsive Politics Sheila Krumholz, The Nation reporter George Zornick, and LegiStorm founder Jock Friedly to talk about the full extent of the revolving door in Washington.

Watch the video above and go here to add your comments.

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

Follow @andrefrancisco

Face the Facts: Why Health Net Escaped Consequences of IG Investigation

By NEIL GORDON

Last week, POGO blogged about a Department of Veterans Affairs Inspector General (IG) report finding that a service-disabled veteran-owned small business (SDVOSB) named Enterprise Technology Solutions (ETS) had used its special status to allow the Fortune 500-sized health insurance provider Health Net to improperly benefit from a federal contracting program for small and/or disadvantaged businesses. Despite catching both companies red-handed, however, the IG only referred ETS for possible suspension or debarment.

Is Health Net “too big to debar”? Let’s look at the facts:

Health Net currently has 22 instances of misconduct in our Federal Contractor Misconduct Database, including a temporary suspension from the Medicare program in 2010 and hundreds of millions of dollars in fines, penalties, and settlements paid to private plaintiffs and state regulators since 1995. However…

Health Net is a very big company. It currently ranks number 221 in the Fortune 500, with $11.9 billion in revenue and 7,400 employees.

More importantly, Health Net is also a very big federal contractor, receiving billions of dollars in contracts every year. Almost all of those dollars come from the Pentagon to administer part of the TRICARE health insurance program for millions of active-duty and retired military personnel and their families.

Relations between Health Net and the government are very cozy. Health Net has spent millions of dollars on federal lobbying and campaign contributions. Recall that ETS, the company that allowed Health Net to benefit from the SDVOSB program, was formed in 2006 – with Health Net’s encouragement – by a former senior VA official named Donald Neilson. (According to Nextgov, Neilson served as director of VA Information Management Services.) The Veterans Affairs IG has released three reports in recent years identifying contracting improprieties involving former VA employees who went on to form or work for SDVOSBs.

Lawsuit Alleges "The Most Trusted Name in Polling" Violated the Public Trust

By NEIL GORDON

The Department of Justice has joined a whistleblower lawsuit accusing opinion polling services company The Gallup Organization of committing a multi-million dollar fraud on contracts with the U.S. Mint, the State Department, and other federal agencies.

On Monday, the court unsealed the complaint filed in October 2009 by former Gallup employee Michael Lindley. Lindley alleges the company violated the False Claims Act and the Truth in Negotiations Act (TINA) by providing the agencies with grossly inflated cost estimates on sole-source contracts to provide polling and consulting services. He claims Gallup inflated by two to three times the estimated number of hours required to complete the work. Lindley also claims that Gallup offered a job to a Federal Emergency Management Agency (FEMA) official while bidding on a $12 million FEMA subcontract, exercised undue influence over the awarding of a $15 million contract by the U.S. Army’s Joint Contracting Command in Iraq, and fired him for his whistleblowing activities.

The government intervened in the lawsuit only with respect to Gallup’s contracts with the Mint and the State Department. In its notice announcing intervention, however, the Department of Justice indicated that it plans to assert new claims with regard to Gallup’s FEMA subcontract. Justice will file its own complaint in the matter within the next 90 days.

Ex Lockheed Lobbyist Now in Key Defense Oversight Role

 

By BEN FREEMAN, Ph.D.

A former executive and lobbyist for defense contractor Lockheed Martin has been appointed to one of the most powerful posts on Capitol Hill overseeing the defense industry.

Ann Elise Sauer, who left Lockheed last year, is now the Republican staff director at the Senate Armed Services Committee. The Committee oversees military spending, including major weapons systems that are central to Lockheed’s business.

Sauer received more than $1.66 million from Lockheed during a reporting period that encompasses this year and last year, according to a financial disclosure form she filed in April. The $1.66 million included salary, bonus, deferred compensation and a lump sum described in the filing as “RETIRED PAY.”

Sauer was appointed to the Senate staff position in February. Her financial disclosure form, recently noted by Legistorm, called attention to her appointment.

Lockheed Martin, the Department of Defense’s top contractor (in terms of total contract dollars awarded yearly), receives tens of billions of dollars annually from the Pentagon. Last year alone, the firm was awarded Department of Defense contracts valued at more than $33 billion. The company is responsible for some of the Pentagon's most expensive and troubled weapon systems, including the F-22 and F-35 fighter jets.

As minority staff director, Sauer reports to Sen. John McCain (R-Ariz.), the ranking Republican on the Senate Armed Services Committee.

Who is the Money Working For?

By DANA LIEBELSON

As I said in a previous post about Thomas MacKenzie,

Sure, the fat severance bonus Northrop Grumman paid lobbyist Thomas MacKenzie right before he left to work for the House Armed Services Committee may have been a reward for a job well done. However, that doesn’t keep the cynics among us from wondering if the company was hoping the cash might also help MacKenzie remember his old friends fondly.

Read more about MacKenzie in my lastest post. For more examples of the revolving door, check out our Un-Do Influence Campaign.

Dana Liebelson is POGO's Beth Daley Impact Fellow

Follow @dliebelson

Lobbyist Turned Hill Staffer Owned At Least $100,000 in Northrop Stock

By DANA LIEBELSON

Thomas MacKenzie, the former Northrop Grumman lobbyist who was awarded a large severance and bonus prior to taking a job on Capitol Hill in 2011, also owned between $100,000 and $250,000 in Northrop stock during that time, according to his ethics disclosure statement.

“It’s not uncommon for a senior K Street lobbyist to have a quarter of a million dollars tucked away in stock. But it is uncommon for someone who is a congressional staffer,” Craig Holman, government affairs lobbyist at Public Citizen, told POGO. “This poses a very serious conflict of interest.”

Infographic: Who is the Money Working For?

The disclosure statement, which was filed in August 2011, covers the period between Jan. 1, 2010 and June 15, 2011. MacKenzie joined the House Armed Services Committee in March 2011, and earned about $108,000 in that year.

This is MacKenzie’s second trip through the revolving door. Before working for Northrop Grumman, he was a staffer on the Senate Armed Services Committee from 2000 to 2005, according to Legistorm.

It’s unknown whether MacKenzie still owns Northrop stock, as this information isn’t readily available to the public. However, under the Stop Trading On Congressional Knowledge (STOCK) Act which passed earlier this year, senior staffers must file reports on personal transactions valued over $1,000 within 45 days (with some exceptions)—beginning July 3.

The STOCK Act applies to congressional staffers who make a monthly salary of at least $9,962 for any two months during a calendar year. According to Legistorm, MacKenzie’s salary seems to qualify for the first quarter of 2012. So once the STOCK Act kicks in, it appears he should be subject to this disclosure requirement.

Former Congressional, SEC Officials Take a Spin through JPMorgan's Revolving Door

By MICHAEL SMALLBERG

At the height of the bailout, Goldman Sachs earned the nickname "Government Sachs" thanks to the legions of former Goldman executives who landed jobs at the Federal Reserve and Treasury Department.

Now it looks like JPMorgan is giving Goldman a run for its money.

Lee Fang at Republic Report noted this week that the staff director of the Senate Banking Committee—which is preparing a series of hearings to investigate JPMorgan’s $3 billion trading loss—is none other than Dwight Fettig, a former lobbyist who represented JPMorgan before Congress as recently as 2010. Fettig has also lobbied on behalf of Freddie Mac and the American Bankers Association, among other financial industry clients.

Before he became a lobbyist, Fettig was a legislative director for Senator Tim Johnson (D-SD), the current Chairman of the Senate Banking Committee. According to his bio, Fettig had a “particular focus” on legislation such as the Gramm-Leach-Bliley Act, which repealed many of the Glass-Steagall provisions that had required a separation of commercial banks, investment banks, and insurance companies. (The final report by the Financial Crisis Inquiry Commission cited several regulatory officials who noted that Gramm-Leach-Bliley created an “obstacle that prevented each [regulator] from obtaining a complete understanding of the risks assumed by large financial firms.”)

7 Types of Government Information that Would Benefit from Springtime Sunshine

By DANA LIEBELSON

Here in the District, spring is in the air! Rock Creek Park is abloom, the tourists are out on the Mall, there are mile-long lines to the food trucks, and the sun is shining. At POGO, when we see sunshine, we can't help but consider one of our favorite issues: government transparency. Unfortunately, there's some important government information that’s still sitting in the dark.

We’ve put together a list of seven types of information generated by the executive branch that could benefit from a little springtime sunshine—and should be made public ASAP.  This list isn’t exhaustive, but it’s representative of the kinds of data, documents, records, and other information that we’d like to see prioritized in the President’s open government effort. To learn more, be sure to check out the openness floor.

1. Robust Contracting Data

Given the fact that POGO’s Bad Business report found that service contractors cost taxpayers almost twice as much as federal employees to perform comparable services, the public deserves more transparency in government contracting.  According to POGO General Counsel Scott Amey, who coauthored the report, “all paperwork produced during the contracting process, including contracts, task and delivery orders, price and cost information, proposals, solicitations, award decisions and justifications, audits, and performance and responsibility data should be posted on a public website.”

2. Performance Reports on the Contractors Managing the Sprawling Nuclear Weapons Complex

The Department of Energy spends a whopping 90 percent of its budget on contractors, and much of that goes to contractors managing the nuclear weapons complex—a task overseen by DOE’s National Nuclear Security Administration (NNSA). Unfortunately for taxpayers, the NNSA decided in October 2009 to withhold key reports on contractor performance—Performance Evaluation Plans (PEPs) and Performance Evaluation Reports (PERs)—from the public until three years after their completion. As POGO wrote to President Obama, PEPs and PERs are “perhaps the single most important information available to hold NNSA accountable. These evaluations assess the performance of the contractors who manage the laboratories and production facilities that comprise the national weapons complex. Additionally, this information demonstrates how effectively the government uses the power of the purse to hold the contractors accountable for their performance.”

A Few Surprise Smiles from HASC for Accountability in Defense Contracting

By SCOTT AMEY

Each year, the National Defense Authorization Act (NDAA)--the massive defense spending bill--becomes an omnibus contracting bill of sorts. Generally, stand-alone contracting bills aren’t sexy enough for hearings or committee passage, so many of those bills are reintroduced as amendments to the NDAA. This year is no different, and some of POGO’s recent recommendations were on the table. Representative Jackie Speier (D-CA) offered several amendments that are close to our heart yesterday during the House Armed Services Committee (HASC) markup of the NDAA.

☺	One Speier amendment that was adopted requires the Department of Defense (DoD IG) Inspector General to review the DoD revolving door database, including reporting on the number of requests for ethics opinions made by military officials seeking employment with a defense contractor and noting when such records are missing. POGO has fought a long battle to bring transparency to the DoD revolving door database, and this will at least help us find out how well the system is working.
☹	Representative Speier also proposed an amendment requiring DoD to calculate service contracting costs. Specifically, the amendment would require DoD to collect additional data about the labor, hours, and costs of contract workers compared to government workers. If this sounds familiar, it was a topic of a hearing before Senator Claire McCaskill’s (D-MO) contracting subcommittee in March, to which POGO provided written testimony, including a recommendation that the government improve service contract inventories. Unfortunately, the proposed amendment was not accepted by the House Armed Services Committee. But perhaps Speier or another Member will offer the amendment for the entire House to consider when the NDAA is on the floor next week. We may also have prospects on the Senate side.
☺	Representative Robert Andrew (D-NJ) proposed an amendment that was approved by the Committee that requires the Government Accountability Office (GAO) to review and report on DoD’s methodology for comparing civilian, military, and contractor costs.  POGO requested such a study in our Bad Businessreport and our recent Senate testimony. Billions can be saved if the government actually looks at the true cost of the workforce that it is hiring.
☹	Despite our effort to generate support for the DoD’s legislative proposal to precisely define commercial items, a proposal that will save billions of taxpayer dollars, no one in HASC took on the issue. It appears that the Committee opposed DoD’s proposed legislation. We hope to have better luck on the House floor or in the Senate, where there is more of a bipartisan sense that commercial item procurements have been subject to abuse and that a fix is required. What that fix will be is impossible to predict. Buying non-commercial items as “commercial” prevents government access to data that allows it to ensure that taxpayers are paying reasonable prices. Would you buy a car without seeing the window sticker? I don’t think so, and DoD shouldn’t blindly buy $75 billion in goods and services under the presumption that a commercial market exists for these good when often times the items are only purchased by the DoD.

HASC does not have the final word. The whole House will consider amendments to the NDAA next week, and the Senate Armed Services Committee will begin consideration of their version of the bill the week of May 21. We still have a chance to turn those frowns upside-down!

Scott Amey is POGO's general counsel.

Follow @SAmeyJD

Rep. Wolf Tries to Stop Flock of Colleagues Going Through Lobbying Revolving Door

By LYDIA DENNETT 

Former elected officials lobbying for foreign dictators may be big business in DC, but one Member of Congress is trying to slow down the revolving door between the Hill and lobbying shops that work on behalf of interests outside the U.S.

Representative Frank Wolf (R-VA) recently introduced the Foreign Lobbying Reform Act (H.R. 4343), which would prohibit high-ranking government officials like the President, Vice President, Members of Congress, and ambassadors from lobbying on behalf of foreign governments for ten years after leaving office.

According to Rep. Wolf, “serving in Congress or as a United States ambassador is a high honor and people should not walk out of government one day and then trade on their service the next, especially for governments who do not share the same values as the United States.”

Un-Do Influence: Obama's Lobbyist Ban is Tough (Except When It Isn't)

Facepalm Ratings Guide = Stupefying example of everything that's wrong with the system. = Outrageous; shameless, even. = Worthy of rebuke. = Even if there's no conflict of interest, appearances matter.

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

By JOE NEWMAN

For a guy who likes to talk about keeping lobbyists out of his administration, President Barack Obama sure doesn't mind making some notable exceptions.

Now comes the latest dust-up involving Vice President Joe Biden's hiring of Steve Ricchetti to be a senior advisor. That's the same Steve Ricchetti whom the Obama campaign in 2008 attacked for being a lobbyist/bundler for then Sen. Hillary Clinton.

Listening to the administration spin the hire is pretty funny. Ricchetti hasn't personally lobbied since 2008. What was he doing instead? He was running his, um, lobbying(!) firm.

Obama has taken legitimate and laudable steps to slow the revolving door between lobbying firms and the White House and reduce private interests' disproportionate influence on executive branch policymakers. The restrictions he passed upon taking office were unprecedented, and intended to reduce industry influence peddling. 

But then there are those waivers and exceptions. Those are fine by us if they're used to bring public interest lobbyists into the fold. Not so much when they're granted to, say, a lobbyist for a top defense contractor. 

Look, lobbying, per se, isn't a bad thing. There's a place in our democracy for it—citizens, and that includes those paid to represent special interests, have a right to directly petition their elected leaders.

But one only has to look to Jack Abramoff to see how the system can be corrupted when lobbyists with access to piles of cash are able to buy influence through gifts, perks, campaign contributions and in the worst cases—bribes.

President Obama was right to want to distance himself from their influence. But if you're going to talk the talk, you've got to expect to some flak when you (or your vice president) bend your own rules. Sorry, Mr. President, the buck stops with you—you and Vice President Biden earned four facepalms.

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Penn's Awkward Silence on Academic Integrity