By Charles S. Clark
March 1, 2011
After years of working behind the scenes, agency inspectors general are front and center in a high-profile battle against waste, fraud and abuse.
It's been a long, strange trip for inspectors general since those days of the Carter administration when the Justice Department tried to block the legislation that created them. As a cadre of "dual hats"-part colleague, part hall monitor-the 73 inspectors general work inside agencies to root out mismanagement and misconduct, yet their position is independent. They have been thanked for exposing waste, celebrated for uncovering abuse, fired for conflicts of interest, and blasted as unconstitutional tools of Capitol Hill politicos.
Their powers are substantive. They get their own staffs, enjoy direct access to agency chiefs and agency records, and can review regulations. But there are checks and balances to this autonomy. IGs who overstep their authority or face misconduct charges are referred to the integrity committee of their own statutorily created council. They also must keep agency heads and Congress informed of their work, and presidents have the power to appoint and remove them.
Yet a job that for decades called for blending into the woodwork is today filled in many cases by newsmakers whom lawmakers publicly cultivate. "There is increased appreciation and demand for our work," says Phyllis Fong, the Agriculture Department's IG, who also chairs the inspectors general council. "Many more bills nowadays have provisions saying, 'Have the IGs take a look annually or periodically.'"
The Republican takeover of the House has brought IGs further into the limelight with a pending legislative proposal to expand their subpoena power. Embraced recently by Rep. Darrell Issa, R-Calif., the new chairman of the Government Oversight and Reform Committee, the idea is to give the independent but agency-based officials the authority to demand testimony, rather than just documents and electronic evidence, from contractors and former federal employees who might possess information on waste, fraud and abuse.
The proposal makes some IGs wary, though 95 percent of them supported it in one survey. "We want access to information in audits and investigations of contractors, and we may need to actually talk to people," says Brian Miller, inspector general at the General Services Administration. He notes that some contractors turn over documents but offer no explanations of how they're organized, or who in the company does what. "Some witnesses are cooperating and some are not," he says.
The ability to compel testimony from "reluctant witnesses who do not work for the IG's agency will enhance the effectiveness of the IG in obtaining relevant information that was previously unavailable," echoes David Kotz, inspector general for the Securities and Exchange Commission.
The challenge, according to Paul Light, a longtime observer of inspectors general and now a professor of public service at New York University, is deciding which management concerns to investigate. Aggressive subpoenas risk "corroding agency cooperation," he says, because IG recommendations can be contentious in Congress. If an IG goes after "big systemic issues and legislative decisions and ends up asking an agency hard questions about procurement," for example, it could lead to controversy over the role of lobbyists and congressional campaign coffers, Light adds.
"If you use a subpoena too frequently," he says, "it becomes a form of harassment. And pity the poor IG who uses subpoenas looking for waste in a small program that's not actually important to the agency's mission. Most IGs [would] keep it as a holstered weapon."
Even without new subpoena power, inspectors general have come of age. The 2008 Inspector General Reform Act strengthened their independence, formalized their ethics adjudication process and gave them their own cross-agency professional body-the Council of the Inspectors General on Integrity and Efficiency.
The law stipulates that an IG can be removed only by the president, though Congress must be notified and given reasons. It forbids agencies from shutting down uncomfortable probes, though the Treasury Department and the CIA have authority to block an IG inspection in specific situations. The law also requires agencies to post a link to the IG website on their home pages (and agencies aren't always thrilled to tell online visitors about IG investigations). IGs, in turn, must post their reports on the Web in a timely and transparent manner.
Lawmakers as diverse as Sen. Charles Grassley, R-Iowa, and Rep. Henry Waxman, D-Calif., have pushed for agencies to make better use of IG reports. And many authors of such reports have emerged as key actors in Washington dramas, including:
Less gloriously, IGs in recent years have quit or been removed-at NASA, Amtrak and the Corporation for National and Community Service-either for ineffectiveness, or misuse of office. Arnold Fields, the Special Inspector General for Afghanistan Reconstruction, quit in January after enduring calls for his resignation from four senators and a negative review from the IG Council. In some cases, IG departures prompted complaints about due process and politicization.
In an era of fierce partisanship, inspectors general more than ever are prized for their independence. "That's the word for IGs," says Fong. "What makes it work is when the IG and the agency have a mutual understanding that IG independence is a valuable tool for the agency head."
In March 2010, an unnamed Office of Management and Budget staff member threatened to "make life miserable" for the inspector general at the Office of Personnel Management if he complained to Congress about the fiscal 2011 budget. He was disciplined, but the episode wasn't the first or the last sign of friction between an agency and its inspector general.
In October, Sens. Grassley and Tom Coburn, R-Okla., wrote to 13 agencies demanding to know why they were throwing "roadblocks" in front of inspectors general-citing examples of over-redacting and delaying release of key reports. "Friction is necessary in the role played by inspectors general, and it's not a bad thing," says Danielle Brian, executive director of the Project on Government Oversight, which regularly evaluates IG performance. "You can't be an effective IG if everyone in the agency is comfortable with you, though that is not to say IGs should be unprofessional, or unreasonably aggressive."
Some tensions arise from poor understanding of the inspector general's mission. "I can't tell you how many presidential appointees come in and have no idea what IGs do," Light says. "They think of them as a tool of Congress, a double agent, an adversary. And when employees are sitting in a café or in their offices and an IG calls to say they will do an audit, it's not exactly a happy moment in life."
Grounds for resentment are baked into the bureaucracy of a government agency or a federal contractor. "No one likes to be audited," says Miller, "But we don't like going to the dentist either, yet we don't want our teeth to rot."
At SEC, "agency heads and senior staff tend to be very supportive of the IG's mission," Kotz says. "In rare cases, I have encountered instances where agency staff members expressed resentment or annoyance at having to provide testimony to the OIG, particularly when they themselves are being investigated."
Some employees say, "the IG is out to get me," Fong notes. But, she adds, "I'm here to make recommendations to improve programs. Some people don't realize that our mission is to support the agency, so in essence we all are on the same team. When an IG successfully gets that message out, it makes the path clear to cooperation in solving problems."
Such cooperation includes meeting with agency heads and program managers to gauge priorities. And as Glenn Fine testified in Congress in 2007, "We also try not to blindside the department with our audits and program reviews. We provide the department with an opportunity to comment on our reports before they are completed and to inform us if they think something is factually incorrect."
IGs are as mindful as any writer of Washington reports that their painstaking prose can gather more dust than attention. Indeed, the House Oversight and Government Reform Committee in January 2009 released a study estimating government could save $26 billion simply by implementing 13,800 IG recommendations that were ignored during the Bush administration.
Inspector general numbers are impressive. The IG Council's report for fiscal 2009 said inspectors general across government identified $43.8 billion in savings, plus program efficiencies and enhancements from a range of audits, investigations, evaluations and inspections. "The IG community was responsible for successful investigations of individuals and entities who threatened government integrity and the public trust," the report said. "Cumulatively, these efforts resulted in $34.9 billion in potential savings from audit recommendations, $8.9 billion in potential savings from investigative recoveries and receivables, over 6,200 indictments and criminal informations, over 5,900 successful prosecutions, nearly 4,500 suspensions or debarments, and over 417,000 hot line complaints."
At a time of budget austerity, many IGs make the case that their own budgets are a sound investment. "We currently save $17 for every $1 invested in our office," says GSA's Miller. "We could do more if we had more resources."
Perhaps some more than others.
In Light's view, IGs generally do a good job. But some merely "occupy their space, pursuing a dog's breakfast of issues, the bare minimum under the IG statute," he says. Even the good ones might not be doing "the right job," Light adds. He thinks IGs should go deeper than the "breakdowns and temporal issues of auditing" and "dig down to the systemic problems that led to the waste."
Legislation is "often vague, difficult to interpret and filled with lawmakers' pet projects," Light says. "But I have yet to read an IG report that is getting to the core driver of waste, fraud and abuse." Sometimes the programs Congress enacts are difficult to manage within an agency's capacity and staff, yet "IGs just shake their heads and say there's nothing I can do," he says. IGs should perform a more evaluative function of what works, more like the Government Accountability Office, according to Light.
Inspectors general do coordinate with GAO auditors to avoid duplication of effort, Fong explains. "But we take different perspectives on aspects of the same issue," she says. "The GAO approach is more macro and global, and we're more focused on internal agency operations."
Brian applauds IGs for "keeping an agency's feet to the fire so they fear being hauled up to the Hill to explain whether they will act," she says. "IGs shouldn't be the final word, but an agency should have to explain why they haven't implemented a recommendation and why not."
Yet Brian criticizes IG reports for relying too much on numbers, an area where auditors are more comfortable. "Sometimes they measure the number of audit reports delivered, but then cut the universe of programs audited in half and make two reports," she says. "So what is the value added?" Contrast that situation with, say, CIA IG John Helgerson's August 2009 report evaluating the agency's use of torture on prisoners suspected of terrorism, Brian says. "It didn't fit the metrics of an IG's semiannual report, but it had big weight and impact," she adds.
Not all IGs come from backgrounds that are most suitable to the job, Brian notes. The most important characteristic "is a demonstrable ability to be comfortable acting independently of the chain of command," she says. "That's a real challenge for some institutional cultures, such as the military and FBI, which embrace law and order. An IG has to be able to mix it up."
Kotz agrees the focus on numbers can be overdone. It becomes a problem when comparing IG activities at large agencies versus smaller ones, he notes, because "one IG might issue a large number of very short reports, while another IG could issue a smaller number of reports that are quite lengthy and deal with complex issues."
Numbers are one way to measure success, according to Fong. "The IG Act says we have to report twice a year on output-oriented measures-the number of reports issued, cases closed, cash recovered, prosecutions, recommendations made and those acted on," she says. "But most IGs go beyond that to discuss what impact they're having on their agency, which is more qualitative."
Miller says, "Numbers are always helpful, but we do other things such as issuing alerts and commenting on practices that need to improve." Examples at GSA include criminal convictions such as a regional supervisor who recently pleaded guilty to embezzlement and a recent report evaluating a building contamination controversy at a federal facility in Kansas City, Mo.
Declarations of Independence Another frequent criticism of IGs is that some fail to respond to whistleblowers. "I don't think many IGs take whistleblowers seriously," Light says. "Some IGs say they're 'irritants' who get in the way of an already backlogged agenda."
The Defense Department IG's office, for example, in 2010 was taken to task in a report by the Justice Department IG for failing to devote sufficient resources to whistleblowers and ignoring (or retaliating against) employees who take risks to report abuse.
POGO also is pushing to improve the response to informants of waste, fraud and abuse. The watchdog group produced a report that called on IGs review their whistleblower procedures, better train their hot line operators and keep tipsters informed of the status of their complaints. A POGO survey shows that IGs are taking positive steps toward implementing those recommendations, Brian says.
Kotz also sees progress. "In recent years, the importance of whistleblowers has come to the forefront and there have been numerous efforts, in connection with the Dodd-Frank financial reform legislation and otherwise to encourage whistleblowers to come forward and be taken seriously and to reward them for their efforts," he says.
Decisions about whether to pay attention to a whistleblower, consult actively with lawmakers, or exploit subpoena power all are guided by the degree to which IGs function independently of their agencies. The IG act was a landmark law in providing new tools for independence, Brian says. Pointing to criminal convictions at GSA, Miller says that autonomy has allowed him to hold employees to high ethical standards.
The holy grail of independence is key to an inspector general's ability to ferret out waste, fraud and abuse at agencies, according to Fong. "Success for an IG is when an agency head asks you to go in and take an independent look at a program," she says. "This captures in effect the IG-agency relationship. When we achieve this appreciation of IGs, their independence is truly valued. But it takes a lot of work."
By Charles S. Clark
March 1, 2011