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Negotiators agree to cap interest rates for loans to military

Conferees on the fiscal 2007 defense authorization bill agreed to include an amendment that would cap annual interest rates on loans to U.S. military personnel at 36 percent, despite strong lobbying by banking lobbyists.

Sen. Jim Talent, R-Mo., who originally proposed the language, complained that unscrupulous payday lenders were targeting uniformed personnel, which in effect threatened the country's military readiness. Some troops were paying as much as an 800 percent annual rate on loans.

The banking industry sought language that would carve out federally insured depository institutions from the proposed requirement, arguing they are already regulated by entities such as the Office of the Comptroller of the Currency and National Credit Union Administration.

But, according to a Senate aide, lawmakers only changed the language so the Defense Department would have to consult with banking regulators in devising a rule to execute the legislation.

"The measure will prevent any lender from trying to make a quick buck at the expense of the livelihood and future of those defending our freedom by charging a triple-digit interest rate," Talent said Friday. "For years, our strong coalition of supporters has been steadfast in seeing this measure get this far. Now that the...

DHS updates purchase card requirements

The Homeland Security Department has implemented new rules on employees' use of purchase cards, accepting recommendations made by the Government Accountability Office following reports of millions of dollars of wasteful and fraudulent spending after Hurricane Katrina.

A lack of internal oversight has led to "potentially fraudulent, improper and abusive purchase[s]" at DHS agencies, GAO and the Homeland Security Department inspector general said in a joint report released Thursday. In a letter responding to the auditors, DHS said it has implemented needed fixes to its purchase card manual and will exercise additional oversight of the program.

The report (GAO-06-1117) called upon DHS to establish procedures for better oversight of purchase cards, and to do a better job enforcing related rules.

Following Hurricane Katrina, the Federal Emergency Management Agency and other parts of DHS were criticized for purchases of an unused 63-inch plasma television and a beer brewing kit, among other questionable buys labeled wasteful or fraudulent.

"To ensure the most effective use of the purchase card, federal agencies must foster a strong control environment and establish sound internal controls," investigators stated.

The report told DHS officials to ensure that "highly pilferable assets" such as laptops, cell phones and personal digital...

Service Chiefs Speak Out

In a series of appearances at Government Executive's Leadership Breakfast Series and Excellence in Government conference in Washington over the summer, the leaders of the Army, Navy, Air Force and Coast Guard discussed their priorities in an era when the United States is conducting massive military operations abroad, facing a daunting homeland security task at home, and tring to plan for critical future defense needs.

Below are links to transcripts of those interviews as they appeared in the pages of Government Executive, along with video of the chiefs' appearances, where available.

Adm. Michael G. Mullen
Chief of Naval Operations

In 1968, when a young midshipman from Los Angeles named Michael G. Mullen graduated from the U.S. Naval Academy in Annapolis, Md., he was commissioned in a 932-ship Navy engaged in a seemingly intractable war in Vietnam. In July 2005, Adm. Mullen became the nation's 28th chief of naval operations, taking command of a 290-ship Navy engaged in war in Iraq and Afghanistan. While much has changed for the Navy and the nation, Mullen faces perennial challenges for recent CNOs: how to recapitalize an aging fleet of ships and aircraft and redirect fewer troops for increasingly uncertain threats...

Border fence vote could require Saturday Senate session

Senate Majority Leader Bill Frist, R-Tenn., on Thursday warned that the chamber is headed toward a Saturday session to pass a bill to construct a fence along the U.S.-Mexican border.

The border bill is one of the majority leader's four goals for the week -- and his last chance to help GOP candidates running on national security issues in November, as well as his own potential 2008 White House bid. Frist told reporters the Senate could remain in session until Saturday to vote on the measure.

However, some senators and GOP aides suggested the chamber could vote earlier if Democrats agree to yield back time and if the Senate wraps up its work on Frist's three other goals: military tribunal legislation and conference reports on the fiscal 2007 Homeland Security and Defense appropriations bills.

Frist has repeatedly touted the border fence legislation as an important first step in securing the country's borders before enacting a comprehensive immigration bill. The proposal to build a 700-mile fence along the U.S.-Mexico border has passed the House.

Senate Democrats on Thursday said they have no qualms about running down the clock on the border fence measure, refusing to...

Contracting problems cited for Iraq construction failures

Cost-plus contracts and undefined contract terms limit the government's ability to ensure delivery on Iraq reconstruction projects, witnesses told lawmakers at a hearing Thursday.

The House Government Reform Committee oversight hearing, convened by Rep. Tom Davis, R-Va., highlighted reports of cost overruns and construction failures in projects, including accounts of raw sewage dripping from ceilings in a police academy. It focused largely on work by Parsons Delaware Inc. to complete a police academy in Baghdad and a series of 150 public health clinics throughout the country.

Preliminary results of an investigation by the special inspector general for Iraq reconstruction (SIGIR-PA-078) found that plumbing leaks at the police academy could pose a health threat, limit the number of recruits that can be trained there and potentially render the building structurally unsound.

The newly completed buildings, which included cadet barracks, a library and laundry facilities, were built through a $75 million contract managed by the Army Corps of Engineers, with much of the work performed by local subcontractors. But laborers installed plumbing pipes without fittings to properly seal junctions, causing them to leak.

"Toilets are continually draining through the reinforced concrete floors, from the top floor to the second floor to...

Congress prepared to trim Defense business agency’s budget

Lawmakers are poised to cut $28.4 million from the 2007 funding requested by the agency overseeing the modernization of the Defense Department's back-end business systems.

The compromise version of the fiscal 2007 Defense Department appropriations bill agreed upon by House and Senate negotiators would provide $150.9 million in operations and maintenance funding for the Business Transformation Agency. This is a $21.7 million increase from the House recommendation, but a decrease of $1.4 million from the Senate proposal. The department originally requested $179.3 million.

The compromise language passed the full House Tuesday. The Senate had yet to vote on the measure as of Thursday afternoon.

Paul Brinkley, co-director of the BTA and Defense deputy undersecretary for business transformation, said he was pleased lawmakers did not slice more off the department's request.

"Congress wanted to set the bar a little higher in terms of what they wanted us to achieve," Brinkley said. "We don't anticipate any impact on any of our major milestones, but we've not had a chance yet to access how that will lay in across all the different initiatives."

The agency, which oversees 108 Defense business programs worth about $4...

Auditors: ICE financial management a work in progress

Homeland Security Department auditors released a report Wednesday calling for continued improvements to financial management and reporting at the Immigration and Customs Enforcement bureau and the Coast Guard.

The review, conducted by accounting firm KPMG for the DHS inspector general, stated that vague criteria for spending oversight need to be re-evaluated and fine-tuned.

ICE's management has had "abnormal balances" and problems with "accurate and timely submission of financial reports," the report stated. Safeguards designed to issue warnings when erroneous data is submitted are not adequately monitored

But there also were indications that the agency -- which previously has been the target of criticism over financial problems, including budget shortfalls -- has made progress, the report said.

"The leadership provided by the ICE [chief financial officer] in setting a positive 'tone-at-the-top' and actively monitoring ICE's progress … has shown to be integral to the success achieved at ICE thus far," the report stated. The bureau got its first permanent financial chief in January.

DHS spokesman Larry Orluskie cited coordination issues that arose with ICE's formation as the root of past financial reporting errors. "They were a mess" in March 2003 "when we first stood up as a department," he said.

Wednesday...

Senators vow tougher chemical security

Two Senate Democrats vowed Wednesday to keep the need for stronger chemical security regulations in the public spotlight, but conceded they will not be able to change compromise legislation that conferees added Monday to the fiscal 2007 Homeland Security appropriations bill.

The spending bill includes a provision that gives the Homeland Security Department authority, for the first time, to regulate chemical facilities that "present high levels of security risk."

Sens. Frank Lautenberg, D-N.J., and Barack Obama, D-Ill., who co-wrote a chemical security bill earlier this year, said during a news conference that they will fight during the next session of Congress to pass a stronger regulatory measure. They acknowledged they face an uphill battle.

"We are certainly going to see if there is some way that we can get this back to the attention of the leadership and the attention of the Republican Party," Lautenberg said. "Our options are limited."

They acknowledged, however, that the provision agreed to by House and Senate negotiators Monday eventually will become law because it was attached to a must-pass fiscal 2007 appropriations bill to fund Homeland Security Department operations.

"I guarantee you that if the public understands the potential hazards involved that they...

Proposal to speed up passenger list submissions draws criticism

The travel industry and offshore drilling companies have raised objections to a rule change proposed by the Customs and Border Protection bureau that would require earlier submission of passenger manifests for comparison against terrorist watch lists.

CBP proposed on July 14 that passenger aircraft and ships submit manifests of who has gotten on board one hour before departure; the agency currently requires these lists be submitted just 15 minutes before departure. In its proposal, CBP said the change is a necessary national security enhancement.

The bureau also is aiming to change the definition of an aircraft's departure time, from the time the plane becomes airborne to the time it pulls back from the terminal. In a Sept. 13 letter to CBP, Nina Mitchell, border security manager for Virgin Atlantic Airways, protested the recommended change from the current "wheels-up" terminology.

Forcing planes to stand at boarding gates while government officials compare passenger manifests to watch lists would "require significant additional cost to the airlines and further development work to implement the new processes around this rule," the letter said.

In its rule proposal, CBP provided a wide range of potential costs. Large airlines, like Virgin, would pay between $573 million...

House approves $447.6 billion Defense spending measure

The House voted overwhelmingly, 394-22, Tuesday night to approve the final version of the fiscal 2007 Defense appropriations measure, clearing the way for Senate passage of the $447.6 billion bill Wednesday.

The first of the fiscal 2007 appropriations bills to emerge from a House-Senate conference and reach the House floor, the high-priority Defense bill also serves as a vehicle for a continuing resolution, a stopgap measure that will continue funding for most government agencies at fiscal 2006 levels through Nov. 17.

The legislation also includes a $70 billion supplemental "bridge" fund -- $20 billion above the Bush administration's request -- to pay for costs related to the military's combat operations in Iraq and Afghanistan during the initial months of the new fiscal year that begins Sunday.

That fund includes $2.4 billion to replenish National Guard and Reserve equipment lost or damaged in Iraq and Afghanistan, and billions of dollars more to rehab or replace Army and Marine Corps vehicles and other gear worn out during the continuing overseas operations.

In addition to the bridge fund, the base bill adds $340 million to maintain an alternate engine on the Air Force's Joint Strike Fighter program, despite Pentagon efforts...

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