Stimulus watchdog optimistic about reining in waste

Earl Devaney is not one to mince words or shy away from a challenge. The blunt Interior Department inspector general led investigations of officials involved in the scandals surrounding disgraced lobbyist Jack Abramoff and exposed "a culture of ethical failure" at Interior's Minerals Management Service.

But, since late February, Devaney, who started his work on white-collar crime as a Secret Service fraud investigator, has taken on what could end up being his most daunting task: leading oversight of $787 billion in economic stimulus spending. As chairman of the Recovery Accountability and Transparency Board, Devaney must work with 10 inspectors general to anticipate waste and stop it before it occurs. The board and its fairly modest staff of about two-dozen employees also is charged with developing, the government's central stimulus-tracking Web site.

Devaney sat down for an interview with Government Executive on April 22. Edited excerpts follow.

GE: During a recent field hearing in Brooklyn, N.Y., House Oversight and Government Reform Committee Chairman Edolphus Towns, D-N.Y., said is "not a useful database where citizens can go to see where their money is being spent." Do you agree with that assessment? How long will it be before the site meets its goals?

Devaney: It has to be -- maybe not the best it can ever be -- but it has to be at a certain capacity come October. That's when the data starts rushing back into the government. By then, the site needs to be robust enough to house that data and to display it to the American public. So, in the near term the site is under development. It's not yet where it's envisioned to be by the Recovery Act, nor should anyone have expected it to be after only a couple of months. . . . I am not complaining, but to judge the site compared to any other site, I would say wait until we have a sufficient amount of time to build this thing.

GE: Do you see becoming similar to, where there are drop-down menus that allow citizens to search, for example, by contractor?

Devaney: Yes. We are seeking ideas in an electronic town hall meeting [from April 27 to May 3], but that's not to say we haven't been spending our time seeing what's out there. And there are some very exciting things out there and visualization has, of course, made remarkable progress in the past few years. There are some really great mapping capacities and drill-down capabilities that we can build into it. . . . One form of it will be some kind of visualization where you can type in a ZIP code and see what's going on in your neighborhood. You can drill down and do it by category, or by infrastructure kinds of things like bridges and roads. Or you could do it by grants. All of that is possible and all that is doable.

GE: The April 3 Office of Management and Budget Recovery Act guidance does not require the reporting of all funds distributed at the local level. How is that going to affect your ability to track those funds?

Devaney: I am not going to say to you that I am not concerned about that. . . . It's very clear that if money goes directly to the recipient they have to report back. But, when it's going to the states, some are going to be very demanding with regard to what they get back from their recipients and I would imagine some others will not be. So we will have to see what's going on there, and that's an issue OMB is going to have to deal with.

GE: A few months back you said that by some estimates, if the government followed a normal course of business, it could expect to lose 7 percent of stimulus funds, or $55.1 billion, to fraud. Obviously, you would like to keep that figure at zero. But realistically, is there a level you're aiming to stay below?

Devaney: I was actually responding to a question from a reporter [with the Wall Street Journal] and the question was, have I seen the 7 percent figure. I have been questioned heavily about that number. And obviously $55.1 billion is an unacceptable amount of fraud and waste. I have no quarrel with that. That figure comes from the Certified Fraud Examiners Association and they put out a figure every year. While the interviewer was asking the question I was doing the math on a piece of paper. I was a little horrified myself when I saw what it was.

I think this money is tagged in a way that no other federal money has been tagged before. . . . Every dollar is reported under something called recovery. That is not the case with other government expenditures, so we should be able to follow that money. Every contract theoretically is going to be visible and every recipient is going to known. And these are the kinds of things that on some level will have an effect on self-correcting behavior. . . . I am very optimistic about this and I am certainly not predicting any particular percentage, but $55.1 billion is not something I am anticipating.

GE: Do you believe it will possible to avoid waste similar to that uncovered in the aftermath of Hurricane Katrina and in Iraq reconstruction projects?

Devaney: The [economic stimulus] efforts from all the departments have been a great deal more thoughtful. I think there are some lessons that people have taken away from the two that you mentioned. I think the administration's focus on transparency and the vice president's message to the Cabinet -- which was very strong about [spending] this money [responsibly, will help]. We've got this board that has been specifically set up to track this money. This all leads me to believe that we have a good chance to reduce fraud, waste and any kind of mismanagement.

GE: If the Recovery Act funds are spent wisely and without much waste, do you believe this could transform the public's view of the federal government's effectiveness?

Devaney: I think if done right -- the transparency that this Web site will have where citizens can see how their money is being spent -- it will be a prototype for the future. And I also agree that if things go awry it will set back American confidence in government. It does up the ante and it keeps me awake a little bit at night. But, I am still an optimistic kind of guy. I've spent my entire government career building things and they've always succeeded. So I don't go into this thing thinking that it's going to fail.

GE: What other Recovery Act-related issues keep you up at night?

Devaney: If something goes wrong, it's not something that everyone isn't going to see. So much happens in government that doesn't go exactly the way you want it to. If something here doesn't go the way that I or members of this board want it to, everyone in the world is going to see it. Transparency is a double-edged sword. There will be embarrassment. Transparency often leads to embarrassment and that's fine. I expect that part of the reason I was selected is because I am not afraid to report the facts -- good, bad or indifferent. And I am going to guess that at some point there will be more good than bad, but on occasion things will happen and people will be embarrassed. And, that's probably a good thing.

GE: If your board finds massive waste and fraud of government funds but the economy turns around, either on its own or because of the stimulus, should we consider the Recovery Act a success?

Devaney: That's an interesting question. . . . If it turns around with fraud and waste, think about what it could be without fraud and waste. I would consider it a failure if there is massive fraud and waste.

GE: Even if the economy gets better?

Devaney: I would obviously be happy if the economy got better, but I would not be happy if there was fraud and waste because that would mean, in effect, that the effort I am undertaking here would have failed.
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