Today, POGO will officially release its revamped Federal Contractor Misconduct Database (FCMD). The database features the top 50 federal government contractors (according to OMB Watch's fiscal year 2005 ranking), and details instances of misconduct or alleged misconduct from 1995 to the present. Our records indicate that the top 50 contractors have received in excess of $177 billion in government contracts in fiscal year 2005, and have accumulated $12.5 billion in fines, penalties, restitution, or civil settlements since January 1, 1995. 

The improved database will include a company profile for each of the top 50 federal contractors, as well as contact information and links to their website, ethics page, SEC filings, and political activities. For each instance of misconduct, there is a summary describing the occurrence, as well as links to POGO's sources of information. Additionally, the database features a list of helpful contracting resources, as well as a new, user-friendly sorting mechanism that will allow users to refine their searches by items like contractor name, misconduct type, date, and dollar amount. 

POGO expects the FCMD database to emerge as an important resource for the American public and government employees that will help shine a light on contractor misconduct. A recent New York Times article stressed that current misconduct databases have been criticized for being outdated and incomplete, and highlighted POGO's database as a potential new tool for information. Hopefully, our new resource will be used to ensure that taxpayer funds are allocated to responsible contractors who have intentions of serving the American people honestly and efficiently.  Furthermore, we hope scrutiny generated by the FCMD will provide greater incentives for contractors to prevent misconduct.

POGO's general counsel, Scott Amey, will testify this afternoon before the House Oversight and Government Reform Subcommittee on Government Management, Organization, and Procurement. Scott's testimony will emphasize the need for contracting officers to have comprehensive information on contractors' practices in order to ensure that taxpayer dollars do not go to corporations with a list of past improprieties. It will introduce the FCMD as a means of enhancing accountability of our largest federal contractors.

-- Jesse Ferrantella

Every year a little-known agency, the Interior Department's Minerals Management Service, collects billions of dollars in oil and gas drilling fees -- known as royalties -- from oil companies producing on federal and Native American lands. POGO's investigations over the years have discovered numerous cases of the federal government failing in its duty to collect those royalties. Today, Congresspedia is unveiling a new resource which sheds light on the topic of oil and gas royalties for citizens, Congress, journalists, and experts -- a wiki-style page which tells the story of the many controversies surrounding oil and gas royalties.

You can check out the web page here. Let us know what you think! Keep in mind that the page is open to editing and additions by the public.

-- Beth Daley

Whistleblowers from the Minerals Management Service (MMS) testified today before the House Natural Resources Committee, describing an agency that has steadily abdicated its royalty collection responsibility in favor of big oil companies drilling on federal lands. Their testimony confirmed that fewer audits have been conducted of oil companies drilling on federal and Native American lands, which helps to explain why audit collections have plummeted. On March 23, Committee Chairman Nick Rahall asked House appropriators to restore the number of MMS auditors employed before cuts began in 2000.

Today's testimony was delivered by former-MMS Manager Bobby Maxwell, an auditor with 30 years of government experience who recently won a $7.5 million jury ruling against Kerr-McGee. According to Mr. Maxwell:

We were told not to be requesting documents as we formerly had with audits. Audit staff was reduced. Many auditors stopped traveling to companies for audits, stopped interviewing oil company staff, stopped visiting marketing departments and field personnel. Audits were marginalized, and accounting and auditing degrees were no longer required…. Every year we were pressured to do less auditing and state that royalties were accurately reported and paid by the oil companies using the compliance review process. In some cases the compliance reviews were adequate and useful in determining if royalties were correctly reported and paid. In other situations, it was only used as a method of smoke and mirrors to state that royalties were in compliance. I was told that finding and collecting royalty underpayments wasn't important, but meeting our Government Performance Results Act standards was what mattered, our operating budget depended upon it. Further, we were directed that MMS would not issue any subpoenas to oil and gas companies for records.

Also testifying was Kevin Gambrell, another former employee who described a number of incidents where royalties were left on the table:

In 2000, MMS made a decision to close all back-logged audits. To fully and diligently complete the audits, MMS would have to reverse their compliance review course and hire and train additional auditors with oil and gas accounting backgrounds. MMS decided not to change their course and made the deliberate decision to fast track all past audits with inappropriate and illegal valuation methods such as the "bump method" and other questionable practices. I blew the whistle on the actions management was directing me to do that I knew based on past audits would result in 1/8 the collections of underpaid royalties.

-- Beth Daley

Some Federal Bureau of Investigation (FBI) documents from 1993 and 1994 (pdf) documents were obtained courtesy of Michael Ravnitzky.  In August 2004, FBI Director Louis Freeh, reiterating directions sent out during his predecessor Acting Director Floyd Clarke's tenure the year before, tells his field office Special-Agents-in-Charge and Legal Attachés to control and reduce GAO access to FBI documents (pdf):

In the past, GAO [Government Accountability Office] has attempted to make direct contact with various Field Office, Legat [Legal Attachés], and FBIHQ [FBI Headquarter] personnel without coordination or approval of FBIHQ.  Interviews of personnel, disclosure of information, or dissemination of documentation should not take place until the proper notification from GAO has been submitted to and coordinated by OPCA [Office of Public and Congressional Affairs] at FBIHQ.

GAO is presently conducting several different audits that directly or indirectly involve the FBI.  While each of these audits has been approved and coordinated by FBIHQ, each subsequent audit must also be approved and coordinated by OPCA, even if the same GAO staff and FBI personnel are involved in the new audit.  No documentation or additional interviews are to be given to GAO without coordination and authorization by FBIHQ.

Despite instructions from FBIHQ, GAO often will ask for documentation and more information than they are authorized to receive.  For example, there have been a number of requests from GAO for information relating to pending investigations.  As a matter of longstanding policy, FBIHQ will continue to deny GAO access to any information that will identify pending cases.  GAO is not to be given direct and unlimited access to our files...

This might as well have been written yesterday. 

Ironically, in 1997, it was Freeh who called the FBI "potentially the most dangerous agency in the country" if it is "not scrutinized carefully." Freeh also called for more congressional oversight.

Months before the attacks on September 11, 2001, the Senate Judiciary Committee held a hearing on the FBI entitled "Oversight of the FBI" (pdf).  One of the witnesses, Norman Rabkin of the Government Accountability Office (GAO), Congress' investigative arm, testified that:

While things go smoothly on occasion, on many other occasions our access at the FBI has been difficult, resulting in us having to follow cumbersome procedures to meet with Bureau officials and get basic information about their programs and activities.  We have had access issues in a number of agencies over the years.  However, across law enforcement-related agencies, FBI access issues have been the most sustained and intractable.

Rabkin also remarked that the last time the GAO testified on access problems at the FBI and Justice Department was in 1991 (pdf).

A month later in July 2001, two House Government Reform subcommittees held a joint hearing entitled, "Is the CIA's Refusal to Cooperate with Congressional Inquiries a Threat to Effective Oversight of the Operations of the Federal Government?"

There the GAO's Henry L. Hinton, Jr. stated:

We have broad authority to evaluate CIA programs. In reality, however, we face both legal and practical limitations on our ability to review these programs. For example, we have no access to certain CIA "unvouchered" accounts and cannot compel our access to foreign intelligence and counterintelligence information. In addition, as a practical matter, we are limited by the CIA's level of cooperation, which has varied through the years. We have not actively audited the CIA since the early 1960s. (emphasis POGO's)

Then 9/11 occurred and though there were important exceptions, Congress as an institution did not express much interest in the decades-long issue.  In fact, GAO access took some big hits over the course of 2001 and into 2002, especially in regards to the battle it lost over access to Vice President Dick Cheney's Energy Task Force records, partly because its main Congressional support was in the minority at the time.

Whistleblowers and the families of 9/11 victims need to be given particular credit for what was done in those years.  But finally, as can be seen in the muscle flexing of House Government Reform Chairman Henry Waxman (D-CA) (pdf) in the U.S. Attorney firing investigation, though this battle is about Congressional access more generally, Congress is coming back.

GAO access at the FBI and CIA are still problems however.  Though Congressional committee staff can provide a great deal of oversight firepower, Congress' large and professional investigative arm, the GAO, needs access to information.  As Hinton stated, the GAO has not "actively audited the CIA since the early 1960s."  And the problem with the FBI goes back to at least 1941, when then-Attorney General Robert H. Jackson, representing J. Edgar Hoover's FBI, wrote in an opinion that:

It is the position of the Department of Justice, restated now with the approval and at the direction of the President, that all investigative reports are confidential documents of the executive department and that congressional or public access thereto would not be in the public interest.

Though it still had not been named as "Executive Privilege," Jackson was relying on the same concept, which would not become a mature concept until the Cold War:

This accords with the conclusions reached by a long line of predecessors in the office of Attorney General and with the position taken by the President from time to time since Washington's administration; and this discretion in the executive branch has been upheld and respected by the judiciary.

As recent developments have made clear, we need more oversight of the FBI and other national security agencies.  The GAO serves the Congress, but it needs Congress' support too.

-- Nick Schwellenbach

Recently, Congress Daily reporter Megan Scully wrote the article "Osprey Helicopter Nears Overseas Deployment."  In the article, the Project On Government Oversight's (POGO) Defense Investigator Todd Bowers was quoted as saying "I think it would be smarter to have more rigorous testing and more thorough testing and more in-depth analysis of that testing." This comment has apparently ruffled some feathers with defense blogger Kevin "Hognose" O'Brien.

The Congress Daily article was posted on the Rotary Wing Forum yesterday, and Mr. O'Brien responded with an onslaught of erroneous comments aimed at POGO and Mr. Bowers:

Todd Bowers and POGO have a similar record to CDI. When they were trying to get the Stryker buy canceled, among other tactics they used was mailing the media pictures of dead guys in Strykers. He's really a class act -- not. By the way, their attack on the Stryker was supported (financially and otherwise) by FMC, and their proposal was that instead of Strykers the DOD buy a Vietnam-era APC made by .... need I draw you a picture... FMC.

If Mr. O'Brien had taken the time to fact-check his assumptions regarding Mr. Bowers and POGO's stance on the Stryker, there would not be an issue.  But we here at POGO would like to point out that since Mr. Bowers joined our staff in April 2006, we have done minimal reporting on the Stryker program, if any at all. In the past, POGO has raised concerns regarding the Stryker program, basing our views on official Army documentation.  Specifically, we focused on a Center for Army Lessons Learned report , which stated that the Stryker Slat Armor solution was only defending the Vehicle from 50% of the rocket propelled grenade (RPG) threats.  At no point did POGO ever ask that the program be cancelled.  We were, however, concerned about the safety of the men and women inside the vehicle.

We were appalled and feel slandered by the accusation that POGO sent pictures to the media of Strykers with dead soldiers inside.  At no point has POGO or anyone on our staff (past, present, or future) sent photos of dead soldiers to any media outlet of any kind.  His statements are simply and horrifyingly wrong.  This is unacceptable.

The comment made by Mr. O'Brien that POGO's "attack" on the Stryker was "financially and otherwise" supported by Food Machinery Corporation (FMC) is false in its entirety.  In its 25 years of existence, POGO has never accepted funding from corporate entities.  POGO has had no contact with FMC and has  never accepted funding of any kind from FMC.  By operating in this manner, POGO is able to investigate, report, and recommend corrective measures without any outside influences threatening the integrity of our institution.

Finally, POGO would like to state that we disagree with Mr. O'Brien's statement that  "He's really a class act -- not."  Mr. Bowers served two tours in Iraq and was decorated for valor and awarded the Purple Heart.  His efforts here at POGO mirror his efforts in Iraq: he has worked unstintingly to  ensure that members of the Armed Services are protected with the best equipment our government can provide.  Since Mr. O'Brien is also a  member of the Armed Forces, he should not only understand these efforts, but support them.

-POGO

The original version of this blog included a reference and link to Aero-News.net and its affiliation with Kevin "Hognose" O'Brien.  POGO has since learned that Mr. O'Brien no longer writes for Aero-News.net. 03-27-07

The 110th Congress is fulfilling its promise to reign in the federal contracting system. Contractors and their hired guns are fighting back, criticizing everyone from Rep. Waxman to the SARA Panel to anyone who mentions the words "acquisition reform." The phrase "acquisition reform" appears to have gone full circle.

During the mid-1990s, POGO criticized the reforms (FASA, FARA, and SARA) that led to the current pro-contractor system that is in place. Unfortunately, despite POGO's efforts, there was little debate on many of the reforms because they were created by Rep. Tom Davis (R-VA) who chaired the influential House Government Reform Committee and who is supported by contractors (pdf) (Rep. Davis has a long history of being in bed with contractors). In fact, although some major contracting bills were proposed in the 109th Congress, very few received the attention that they deserved.

Acquisition reform is back, however. The change in congressional leadership and some recent investigations have ignited a huge firestorm with numerous contracting bills working their way through Congress.

H.R.1362: "Accountability in Contracting Act"

Sponsor: Rep. Waxman, Henry A. (D-CA)

Purpose: The bill would increase competition, limit abuse-prone contracts, and increase contract oversight. An Amendment (H. AMDT. 48) sponsored by Rep. Michael Castle (R-DE) requests a study of whether federal conflict-of-interest laws should apply to contractors and federally funded research and development centers (FFRDCs).

Action: Passed by the House 347 - 73 and Referred to the Senate Committee on Homeland Security and Governmental Affairs

Contracting associations (pdf) say that the oversight protections go too far. The White House (pdf) "strongly opposes" the bill. A dog fight is on the horizon and it will be interesting to see who wins - the taxpayers or the contractors.

Other contract-related bills that are before Congress, include:

S. 674 / H.R. 369: "Transparency and Accountability in Military and Security Contracting Act of 2007"

Sponsors: Sen. Barack Obama (D-IL) and Rep. David Price (D-NC)

Purpose: The bills would require accountability and enhanced congressional oversight for personnel performing private security functions under certain federal contracts and subcontracts.

Action: Referred to relevant Committees in the Senate and House

H.R. 984: "Executive Branch Reform Act of 2007"

Sponsor: Rep. Henry Waxman (D-CA)

Purpose: The bill would require certain Executive Branch officials to report lobbying contacts and increase prohibitions of the revolving door between the government and the private sector.

Action: Ordered to be Reported (Amended) by Unanimous Consent.

S. 606: "Honest Leadership and Accountability in Contracting Act of 2007"

Sponsor: Sen. Byron Dorgan (D-ND)

Purpose: The bill attempts to eliminate war profiteering, prevent fraud, prevent contractors with a pattern of overcharging or violating laws from receiving future contracts, increase competition, and tighten ethics laws and regulations.

Action: Referred to the Senate Committee on Homeland Security and Governmental Affairs

S. 680: The "Accountability in Government Contracting Act of 2007"

Sponsor: Sen. Susan Collins (R-ME)

Purpose: The bill proposes to improve the acquisition workforce, increase competition in contracting, increase accountability for purchase cards, interagency contracts (which are on GAO's High Risk Series [pdf]), and task/delivery orders, and extends the qualifications of Inspectors General.

Action: Referred to the Senate Committee on Homeland Security and Governmental Affairs

POGO applauds Congress' efforts to improve the way that the government buys nearly $400 billion worth of goods and services each year and hopes that Congress realizes that it must do a better job accounting for the drastic increase in contract spending (xls).

-- Scott Amey

This just in from Winslow Wheeler at the Center for Defense Information. The new emergency supplemental appropriations bill (H.R. 1591) for the war, which was just put online today, contains some fishy line items including $25 million for spinach producers (p. 291), $60 million for salmon fisheries (p. 216), and $5 million for aquaculture (p. 214). House Appropriations Committee Chairman David Obey and Speaker Pelosi added $21.3 billion to the cost of the bill.

Wheeler stated, "Having worked the congressional pork system for most of the 31 years I was on Capitol Hill, they sure smell, wallow, and oink like earmarks to me. The advocates will argue these are all desperately needed due to various crises. Perhaps, but that doesn't mean they are not earmarks. In fact, they are 'emergency earmarks' as they have the 'emergency' designation."

Wheeler also points out that p. 238 of the House committee report contains the following statement: "EARMARKS: Pursuant to clause 9 of rule XXI of the Rules of the House of Representatives, this bill, as reported, contains no congressional earmarks, limited tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI."

With shenanigans like these, is it any wonder that the American public does not trust its politicians?

-- Beth Daley

On the heels of revelations that the FBI violated its own rules when issuing "national security letters" for records on private citizens, a bureau official has now stated that he raised concerns about the process two years ago and was ignored by his superiors.

The NY Times reported yesterday:

The official, Bassem Youssef, who is in charge of the bureau's Communications Analysis Unit, said he discovered frequent legal lapses and raised concerns with superiors soon after he was assigned to the unit in early 2005.

Stephen M. Kohn, the lawyer for Mr. Youssef, said his client told his superiors that the bureau had frequently failed to document an urgent national security need — proving "exigent circumstances," in the bureau's language — when obtaining personal information without a court order through the use of "national security letters."

The Justice Department's Inspector General released a report earlier this month detailing the FBI's use of "national security letters." Bureau Director Robert Mueller has generally agreed with the IG's assessment that rules were violated, and the FBI's General Counsel testified today on the matter before the House Judiciary Committee. The IG is scheduled to testify tomorrow before the Senate Judiciary Committee.

In a response to the developments, the President of the National Whistleblower Center issued the following statement:

Bassem Youssef did the right thing by reporting NSL violations to his managers and fully cooperating with the Inspector General's investigation.  He is a loyal public servant who has put his loyalty to the U.S. Constitution and national security above his own career.  He has paid a price.  It is time for the FBI to stop its retaliation of Mr. Youssef.

Youssef filed suit against the FBI in 2003, alleging that the bureau discriminated against him because of his Egyptian ethnicity. That lawsuit is currently ongoing and instances of retaliation against Youssef have been reported.

His case is a clear example of why Congress should include national security employees under the Whistleblower Protections Act. After being ignored by his superiors, Youssef had no other options for reporting his concerns and, consequently, two years passed. Meanwhile, the civil liberties of private citizens were placed in jeopardy.

-- John Pruett

The Government Accountability Office, the investigative arm of Congress, recently released a report aptly titled HURRICANES KATRINA AND RITA DISASTER RELIEF: Continued Findings of Fraud, Waste and Abuse outlining both the sheer volume of improper payments made through FEMA's Individuals and Households Program (IHP), as well as FEMA's inability to recover these lost funds.

According to the report:

GAO previously estimated improper and potentially fraudulent payments related to the IHP application process to be $1 billion through February 2006.  As of November 2006, FEMA identified about $290 million in overpayments and collected about $7 million.

The types of fraud involved in the IHP program are numerous, and include rental assistance given to individuals already provided with free housing, duplicate payments to individuals who claimed damage to the same property from both Hurricane Katrina and Rita, and payments made to ineligible non-U.S. residents who provided documentation indicating they did not qualify.

The findings outlined in this new report support the concerns raised by POGO throughout FEMA's relief and reconstruction efforts.  FEMA and the Department of Homeland Security need to exercise greater control over Hurricane relief programs and Congress needs to provide greater oversight to make sure billions more aren't wasted.