The Project On Government Oversight (POGO) Blog

Pro-Business Group Drafts "Model" Contracting Bills for State Legislatures

By NEIL GORDON

POGO has found several contracting measures among the cache of bills posted by the Center for Media and Democracy (CMD) on its ALEC Exposed website.

CMD created a stir last week when it posted the full text of more than 800 model bills drafted by the American Legislative Exchange Council (ALEC). ALEC’s corporate members (several of which are in POGO’s Federal Contractor Misconduct Database) draft bills pushing a pro-business agenda – lower taxes, greater restrictions on labor unions, weakened government regulation, tort reform. ALEC’s legislative members take these bills and introduce them in state legislatures around the country. About 20 percent become law.

Some of ALEC’s draft bills address contracting and privatization. Not surprisingly, they are strong supporters of both. For example, the Open Contracting Act would prohibit government entities from imposing labor requirements when awarding contracts or grants. The Competitive Contracting of Public Services Act would make most government services eligible for privatization based purely on cost considerations. (The Competitive Contracting of the Department of Motor Vehicles Act would apply specifically to state motor vehicle agencies.)

The Public-Private Fair Competition Act, however, would take privatization to a whole new level. It would prohibit state governments from performing any function the private sector also performs. This is known as the Yellow Pages Test, a pro-privatization belief that if a function can be found in the phone book, the government should outsource it to contractors rather than perform it in-house. (The Yellow Pages Test was recently brought up in Congress again.) This bill would effectively put state governments at the mercy of private companies, who would be able to sue the government and recover damages caused by government competition. So much for ALEC’s supposed hardline support for tort reform.

As far as we know, none of the aforementioned contracting bills have become law, but ALEC and its financial backers are not ones to give up so easily. However, with resources like ALEC Exposed and ALEC Watch, the public finally has a way to keep an eye on this organization.

Neil Gordon is a POGO Investigator.

Image: Office of Governor Martin O'Malley.

California Whistleblowers Receive Some Rights

Late last week, Governor Arnold Schwartzenegger terminated the lack of whistleblower rights for employees of the University of California. The Governator signed S.B. 650, amending the California Whistleblower Protection Act to correct the California Supreme Court’s decision in Miklosy v. the Regents of the University of California. The legislation amended Cal. Gov. Code Sec. 8547.10 to conform to Sec. 8547.12, which governs California State University.

POGO has been very involved in this case because UC is a top 100 federal contractor, but yet its employees didn’t have legitimate whistleblower rights. The effort was taken up by California Sate Senator Leland Yee who has been proposing legislation since the California Supreme Court decision was issued in 2008. According to Senator Yee:

SB 650 provides UC employees with the same legal protections as other state employees, including those at California State University and California’s community colleges.  The new law will ensure that UC employees can exercise their right to seek damages in court on a retaliation complaint that was not responded to fairly by the university.

This is great news, because in the past UC employees were left without any civil remedy so long as UC rendered a decision on a case in a timely fashion. In essence, UC was its own judge and jury, and there was no independent evaluation of the retaliatory actions against employees.

This action is a step down from a proposal last year to provide UC whistleblowers the same protects as other government employees, but this is a great example of how democracy works—even if it took many years and the involvement of all three branches of state government.

And with the recent decision in Runyon v. Board of Trustee of the California State University (2010) holding that a whistleblower could properly pursue a remedy in the Superior Court after an adverse administrative ruling, UC whistleblowers have improved protections and the bad precedent of Miklosy is nearly erased.

-- Scott Amey

Curious how your state's whistleblower laws stack up? Check out the State Watch section of PEER's (Public Employees for Environmental Responsibility) website.

See also:

• California Whistleblower Ordered to Clear the Courtroom

California Whistleblower Ordered to Clear the Courtroom

Last December, POGO blogged about the case of Michael Paul, an employee of the state agency that oversees the management of California’s courthouses. Paul claimed he had been demoted because he tried to blow the whistle on misconduct occurring on maintenance and construction contracts. He thought the contractors were operating without the required licenses and were grossly overcharging for their services. Paul raised those concerns in a lawsuit he filed last month against his employer, the California Administrative Office of the Courts (AOC), and the contractors involved in the alleged fraud, including Jacobs Engineering Group, one of the contractors in our Federal Contractor Misconduct Database.

Alas, just as one courthouse door opens up for Michael Paul, another one slams shut.

We just heard yesterday that the AOC fired Paul last week. In the comments section of last December’s post, Paul says that less than 48 hours after he received word that California’s Attorney General had forwarded his lawsuit to the AOC, he was put on administrative leave and then fired. Paul told Accountable California, that he was fired because he “blew the whistle in the wrong direction.” Apparently, his bosses didn’t like it that he took his concerns to the AOC employee overseeing the construction project instead of the AOC executive who oversees fraud and waste investigations—something that Paul claims he had already done, but which only resulted in his demotion.

To its credit, the AOC has filed lawsuits against the contractors, although as we noted last December those lawsuits concern the licensing issue, not the more serious fraud allegations. There is also a bill pending in California’s legislature that would amend the state’s whistleblower protection law to help others like Michael Paul. Incredibly, the law currently does not extend protections to court employees.

POGO fully sympathizes with the plight of Michael Paul and other California whistleblowers. For many years, we have been fighting an exhausting, exasperating battle to strengthen protections for federal whistleblowers. We hope good government advocates in the Golden State don’t have as tough a row to hoe.

-- Neil Gordon

Louisiana Legislature Passes Resolution to Get BP to Implement Transparency Agenda

Here's an interesting piece of legislation that escaped our notice until our friend David Marcello, Adjunct Professor of Law at Tulane Law School and Executive Director of the Public Law Center, brought it to our attention—a few weeks ago the Louisiana Legislature passed House Concurrent Resolution 208, a resolution to urge and request BP to implement a transparency agenda and disclose information related to the flow rate of the oil spewing into the Gulf.

The resolution is one of a growing number of efforts to increase accountability and transparency in the wake of the Deepwater Horizon disaster. Last week, the Senate moved to slow the revolving door between industry and government regulators. Back in May, Congress succeeded in getting BP to release video footage of the well rupture. Meanwhile, Senator Charles Grassley (R-IA) has been requesting information about BP's compliance with safety regulations and also about the company's knowledge of the oil flow rates.

Clearly the appetite for openness and accountability from BP (and frustration with ongoing secrecy) is strong. Will Congress take action to require more openness from BP?

Louisiana House Concurrent Resolution 208 earned unanimous approval from the state's House and Senate and was sponsored by Representatives Walt Leger III and Cedric L. Richmond.

-- Bryan Rahija

Local OpenGov Group Releases Great Analysis of DC Government's Transparency

Last night, the DC Open Government Coalition, of which POGO is a member, hosted a valuable public forum to get open government issues on the agenda of candidates running for elected local office. The Coalition provided sample questions for the candidates, such as whether they would support the creation of an independent agency or ombudsman to oversee DC government compliance with the Freedom of Information Act (FOIA), and whether they would support creating penalties for agency directors who do not comply with DC’s open government laws.

To illustrate why opengov issues should be on the mind of voters, the Coalition presented the findings of two recent audits it conducted of DC’s open government performance. The first audit was conducted in conjunction with the Investigative Reporting Workshop at American University and students from Howard University. The students found that in only 54 percent of the time, DC agencies and commissions complied with requirements to post public records on their websites. For example, only eight websites provided the public with links to a FOIA page, and "only one agency met the charge to post on its website 'the names, salaries, titles, and dates of employment of all employees and officers.'"

The second audit requested from 34 DC agencies all FOIA denial letters from 2005 to the present. The Coalition thought this to be an easy request because DC law requires agencies to keep all FOIA denial letters for five years and compile them in a folder available for public viewing. However, the results varied dramatically between agencies. Most agencies, 28 of 34 total, met the deadline to respond within 15 days. But while two responded within two weeks, four did not respond at all until continued reminders, and one—the Homeland Security & Emergency Management Agency—did not respond at all!

The audit found that: "More than half (18 of 34 agencies) searched the entire requested time period, two asked that the requestors narrow the time period, yet a significant number of agencies—about 10—didn't search the entire time period (e.g., provided letters from 2007, but not 2005-06), while others said the records had been lost or destroyed; others said it was an unreasonable request."

To measure how completely the agencies complied with the request, the Coalition compared the number of letters they received from each agency with the number of denial letters cited in the DC Secretary’s annual FOIA report. Here is where it got pretty wacky:

• Only six provided exactly the reported figure


• Ten provided close to (plus/minus 5) the reported figure


• Five agencies gave them significantly more denial letters than reported for that time period


• Others provided significantly fewer (e.g., the Metropolitan Police Department gave them 113 denial letters, but reported 1,024 for the years in question (2008-09)


• One of the most important agencies in DC government—the Office of the Chief Financial Officer— “failed to respond at all for 90+ days, and didn’t provide any records until today, May 20, after a lot of back-and-forth. Today’s production consisted of only two denial letters, both from 2008. (We had agreed to narrow our request to 2008.) There were 24 FOIA denials by CFO in 2008, according to the Secretary’s report."

The Coalition reported one piece of good news: "All but one agency granted the Coalition’s request for a fee waiver in the public interest."

Keep up the great work, Coalition!

-- Ingrid Drake

• Treasury Still Clinging to Information About Processing FOIA Requests
• Number of the Day: The Cost to Obtain a Description of a Government Database
• What Congress Can Do to Enhance Government Transparency: A Brief Interview with POGO's General Counsel
• What Congress Can Learn from the DC Council

Riding the Oversight Wave from California

POGO was delighted when the Mayor of Rancho Cordova, CA, Ken Cooley stopped by our office last week to purchase three copies of The Art of Congressional Oversight: A User's Guide to Doing It Right. Cooley, who also wears the hat of Principal Consultant to the California State Senate Committee on Banking, Finance, and Insurance, will be sharing the handbooks with Senate colleagues who are interested in expanding oversight efforts.

Cooley has compiled a draft resource on oversight for Senate standing committees that has evoked interest among Senate colleagues eager to reinvigorate efforts on oversight and towards a more accountable government. Cooley reported that increased oversight is a top priority of Senate Pro Tempore Darrell Steinberg, the Chamber’s top leader, who has established an Office of Oversight and Outcomes.

Mayor Cooley's two cents:

“Senator Darrell Steinberg’s new emphasis makes sense. At a time when budget shortfalls and various kinds of process gridlocks pose barriers to accomplishment in many State Capitals, oversight efforts offer Legislatures a natural avenue for productive — and bipartisan — achievement.  When finding monies for new legislative initiatives can be daunting, taking an updated look at the efficacy and efficiency of previous legislation, as well as scouting around for wasted government funds, gives state lawmakers opportunities for very fruitful inquiry.”

Do his points sound familiar? They do to us. In February, POGO distributed to the U.S. Congress “A Dozen Nonpartisan Good Government Fixes To Implement in 2010.” We said: “None of these issues are partisan. In fact, the solution to many of these problems involve strengthening the watchdogs in the government, a goal that should be shared by both sides of the aisle.”

We hope that the handbook provides some valuable tips, and perhaps a model for a similar handbook for the CA state legislative staff and Members. While we wrote our handbook for congressional staff and Members, we hoped that it would also find an audience with legislators at the state and local level, as well as those abroad, and of course, students of government. While the U.S. Congress is unique in having oversight support bodies such as the Congressional Research Service (CRS) and Government Accountability Office (GAO), many of the components of good oversight are not exclusive to the U.S. Congress. For example, following up on insider and whistleblower tips, not being intimidated by the executive branch’s defense of its own interests, and getting out of the office to pound the pavement with some investigating. 

We hope to hear more about the oversight efforts in the California State Senate.

-- Ingrid Drake

Some Good News on the Stimulus Front

A few months ago, POGO blogged about our concerns that many state and local governments with laws limiting contractors’ campaign contributions (meant to reduce the influence of private interests in the public contracting process) are facing obstacles to enforcing these “pay-to-play” laws on stimulus-funded contracts.  

While none of those obstacles have been removed, the nonprofit, nonpartisan National Institute on Money in State Politics just released an analysis that found little influence of campaign contributions on stimulus contracts. By mashing Recovery.gov data with the Institute’s database of state-level political contributions, it found that “only 3.2 percent of the 3,285 recipients of ARRA-related contracts were also donors to state-level political campaigns during the 2008 and 2009 election cycles.” 

-- Ingrid Drake

The Far Too Long and Winding Road Home Program

Concerned that survivors of Hurricanes Katrina and Rita could lose out on federal funds for rebuilding their homes, POGO sent letters to the Department of Housing and Urban Development’s (HUD) Inspector General (IG) and Members of Congress.

The volunteer-run Citizens’ Road Home Action Team (CHAT) brought to our attention the issues with HUD's The Road Home program, which is designed to compensate homeowners affected by Hurricane Katrina and Hurricane Rita. CHAT has compiled hundreds of egregious stories of applicants being given the runaround from ICF International — the former contractor managing the program — and from Hammerman & Gainer Inc. — the new contractor — such as being denied copies of their files and facing extraordinary delays. For example, Road Home applicant John Lange summarized his appeals process in a May 20, 2009 email to Senator Mary Landrieu (D-LA) and other Members of Congress:  

This process is coming up on three years now. It has been filled with countless phone calls and letters never answered. When you did get someone on the phone, they were almost always totally incompetent and never helpful. Employees of the Road Home were not allowed to respond in writing to any requests and often denied having made statements in previous conversations. Total deniability.  

POGO asked the IG, as part of its audit of the program, to contact some of the Road Home applicants who can provide detailed accounts and documents about the extensive problems they encountered when trying to access the funds HUD allocated to help them rebuild their homes and lives in the wake of the two hurricanes.  POGO asked several Members of Congress who have jurisdiction over HUD to hold off from approving the Louisiana Recovery Authority’s request to divert the half- to one-billion dollars of uncommitted funds away from The Road Home program.

We recommend that no decisions about future uses of Road Home funding, such as diversion to potentially worthwhile projects like hospital renovation and mobile health clinics, should be made until the results of the IG’s audit are publicly released. We also recommend one way to ensure that all Road Home applicants are awarded fair compensation for their loss: applicants’ appeals should be re-opened so they can be heard by Administrative Law Judges, who at one point were the third-tier review panel for The Road Home Program.

We’ll keep you posted on what we hear back from the IG and Congress.

-- Ingrid Drake

Stimulus Funds Vulnerable to Pay-to-Play Contracting

A POGO investigation has found that many state and local governments with laws limiting contractors’ campaign contributions (meant to reduce the influence of private interests in the public contracting process) are facing obstacles to enforcing these “pay-to-play” laws on stimulus-funded contracts. As a result, stimulus-funded contracts are not being subjected to this additional level of corruption prevention, a missed good-government opportunity.

Nine states and at least 60 city governments have enacted pay-to-play laws. For example, Illinois prohibits current and prospective state contractors that do more than $50,000 a year in business with the state from making campaign contributions to state races. There is a wide range of differences between the laws, and some are being challenged in court. And with a larger economy than many states, New York City has its own pay-to-play laws that it will apply to stimulus-funded contracts. The Big Apple restricts campaign contribution not only from those who have or are bidding on city contracts, concessions, franchises, and grants totaling at least $100,000, but also land use ruling applicants and those with economic development agreements.