Stimulus czar is well-prepared for new role

During the 1980s, G. Edward DeSeve helped Philadelphia avoid filing for bankruptcy. During the late 1990s, he took on a global problem, working at the Office of Management and Budget on the federal response to the Y2K computer bug.

Now DeSeve has been called back to duty -- arguably for his most daunting challenge. President Obama on Monday tapped DeSeve to help implement the $787 billion economic stimulus package. He will advise the president, support Vice President Joe Biden and coordinate all stimulus efforts at OMB.

More than a dozen federal agencies and all 50 states will disburse billions through the 2009 American Recovery and Reinvestment Act. Funds will trickle down to cities and municipalities through grants and contracts, and that spending must be reported and tracked. DeSeve will be responsible for ensuring all parties are working off a common set of guidelines, facilitating quick and efficient spending, and minimizing embarrassing cases of waste and abuse.

According to friends and former colleagues, his diverse background makes him ideal for the job.

"Because of his service as Philadelphia budget director, he intimately knows how local governments work and how they program funds," said political analyst Donald F. Kettl, DeSeve's colleague at the University of Pennsylvania's Fels Institute for Government. "Because of his service as deputy director for management in OMB [during the Clinton administration], he knows how to take these issues to scale. It's the ideal combination."

DeSeve also served as OMB's controller and as the chief financial officer at the Housing and Urban Development Department. He was special assistant to Pennsylvania Gov. Robert Casey in the late 1980s.

In the private sector, DeSeve was a partner in the audit and tax firm KPMG, managing director of Merrill Lynch Capital Markets and, most recently, chairman of the consulting firm Strategies and Solutions LLP.

DeSeve will have to rely deeply on his expertise as he navigates his new role, observers said.

"The challenge of this -- the scale, the scope and the unprecedented nature of this Recovery Act spending -- is really extraordinary," said Jonathan Breul, executive director of the IBM Center for the Business of Government and DeSeve's former deputy at OMB. "There are a rare few number of people, like Ed, who can really get their arms around it and understand it."

One of the challenges DeSeve is likely to encounter is that Recovery Act spending began weeks ago and the administration already has issued guidelines to agencies and state governments.

"There's no time for thoughtful preparation," said Max Stier, president and chief executive officer of the nonprofit Partnership for Public Service, who has worked with DeSeve closely. "This is a moving train, and it's moving real fast."

The new stimulus czar is a realist who understands how government operates and recognizes its limitations, but has little tolerance for lax management, Breul said.

"I would anticipate the reporting would be firm and complete," he said. "I would think there would be a lot of attention to things like risk and risk analysis to see which programs are in some peril of falling behind or making some spending errors, and making sure those things are corrected. He spent a lot of time at OMB working on erroneous payments so I think he's going to have his eye on the ball."

OMB's press office referred all calls to Biden's office, which did not respond to a request for an interview. But, DeSeve's recent writings give some hints of what federal and state officials can expect.

In an article published in the Feb. 11 issue of Governing magazine, DeSeve said the themes of the stimulus will be speed, accountability and transparency.

"Fund allocation, use and performance will all be closely monitored from the point of impact up to the White House, and contracts will need to be competitive," he wrote. "The stimulus bill is extremely large and complex, and its supporters have taken great pains to make sure that it doesn't repeat the accountability problems of the [Treasury Department's] Troubled Asset Relief Program."

DeSeve also advocated exploring the use of "networked government."

"The stimulus bill is designed in part to drive inventive new relationships between federal agencies, states, local governments, the private sector and not-for-profits," he said. "Agencies that create these relationship networks will be able to deliver much-needed technical assistance while also leveraging nongovernmental resources."

Recovery Act recipients should expect cutting-edge ideas about transparency in spending, Kettl added.

"That's the core of the problem: making it possible to track where the money goes and how best to hold accountable those getting the money," he said. "If there was any doubt that this is job one, last week's AIG furor makes that inescapable. But simply dumping the information out there won't be enough. It will have to be intelligible in capturing what's happening, and it will need to paint a picture of overall results to keep a handful of anecdotes from distorting the debate."

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