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New Report of IG Concealment: Déjà Vu All Over Again?

Allegations of censorship and secrecy. A watchdog office that’s gone without a permanent leader for three years and counting. Outraged Members of Congress.

Yet another Inspector General is in the hot seat, this time the IG at the U.S. Agency for International Development (USAID).

Eight current auditors and employees have alleged that the IG’s office removed critical findings from audits issued between 2011 and 2013, according to a story by The Washington Post. “In some cases,” the Post reported, “the findings were put into confidential ‘management letters’ and financial documents, which are sent to high-ranking USAID officials but are generally kept from public view.”

If this story sounds suspiciously familiar, that’s because it is. There have been a slew of recent reports about IGs who allegedly hid or edited negative findings:

  • Another report by the Post said that an investigator from the Department of Homeland Security IG’s office “felt pressure from his superiors in the office of Charles K. Edwards, who was then the acting inspector general, to withhold evidence” about the Secret Service’s Colombia prostitution scandal.
  • According to the Washington Examiner, the IG at the Department of Veterans Affairs (VA) “knew at least six years ago” that “improper scheduling practices were routinely being used at the [VA’s] Phoenix hospital,” but the IG didn’t release its findings to the public, and wouldn’t release the report to the Examiner in response to a Freedom of Information Act request.
  • Greenwire reported that the Department of the Interior (DOI) IG closed 457 investigations in 2013, but released only three public reports. The hidden reports include “cases exposing nepotism, contracting violations and allegations that BP America underpaid its gas royalties by millions of dollars.”
  • The Project On Government Oversight reported that the Department of Defense IG withheld critical findings about how Defense Secretary Leon Panetta mishandled sensitive information during his tenure as director of the CIA. The IG’s final report on what access the Zero Dark Thirty filmmakers had to classfied information omitted any mention of Panetta’s disclosure of “TOP SECRET” and other sensitive information at an event attended by the film’s screenwriter.

(It’s worth noting that all four of these offices were operating under acting leadership. The DOI IG’s office hasn’t had a permanent leader since February 2009. As of this writing, 12 federal watchdog offices are missing a permanent IG, as documented in POGO’s IG vacancy tracker.)

In the most recent controversy, the Post obtained 12 draft reports prepared between 2011 and 2013, and found that more than 400 negative references were removed between the draft and final versions. Whistleblowers from the IG’s office have alleged that managers “‘routinely’ pressure auditors to drop findings that would reflect poorly on USAID programs and punish those who don’t go along,” according to a Federal Times summary of a November 2013 letter sent by Senate Homeland Security and Governmental Affairs Committee Ranking Member Tom Coburn (R-OK), who has been investigating the whistleblowers’ allegations. “This is the worst we’ve seen,” Senator Coburn told the Post, commenting on the number of alterations made to critical findings in draft audits.

In one case, a draft audit said that $32 million of a $44 million program intended to limit waste, fraud, and abuse in U.S. assistance to Pakistan had, ironically, been wasted on “fringe benefits, consultants and travel.” However, this negative finding and others like it did not make it into the final public version of the report; instead, the IG placed the findings in a confidential letter to agency management.

Michael G. Carroll

Michael G. Carroll, Acting Inspector General of the U.S. Agency for International Development

USAID IG officials defended the move. There wasn’t enough causal evidence to prove that the Pakistan program was ineffective, the office’s acting head told Senator Coburn. Putting certain findings in a confidential letter to the agency allowed the IG to “bring the matters to the attention of mission management without requiring the significant additional investment in time required to rewrite the finding,” the acting IG said.

“That’s ridiculous,” Senator Coburn told the Post. “The finding shouldn’t have been removed, and it should have been a glaring recommendation that said, ‘Hey, here’s where Americans are spending their money.’”

In a follow-up statement on the Post’s story, the IG’s office simply affirmed that it “takes matters pertaining to its independence and credibility very seriously” and will “continue to work with the Inspector General community, Members of Congress, and others to ensure that we address any concerns.” In addition, the IG’s chief of staff told the Post, the agency has started placing management letters on its website.            

Although the posting of management letters is a welcome development, this episode raises a number of serious concerns, starting with the head of the IG’s office. Michael G. Carroll has headed the office in an acting capacity for more than three years, and was nominated in 2013 to become the permanent IG. “Some auditors said Carroll did not want to create controversy as he awaited Senate confirmation to become the permanent inspector general,” the Post reported. Carroll has now decided to withdraw his nomination, which means the office will have to go even longer without a permanent leader while President Obama finds a new nominee for the position.

The story also raises questions about why the IG’s office withheld so many negative findings from the public to begin with. “I think it’s very important for reports and findings to be public,” Glenn A. Fine, a longtime IG at the Department of Justice, told the Post. “When you shine a spotlight on problems, management has more incentive to make changes. Some management might say, ‘Give the report to me and we’ll make the changes.’ But that is not consistent with human nature or the way things normally operate in Washington.” Fine said he used management letters only in emergency situations.

But while some IG offices seem to be cozying up to agency leaders, other watchdogs, along with their supporters in Congress, are pushing for greater IG independence and oversight authority.

In August, 47 IGs wrote to Congress alleging that agency officials have impeded the ability of certain IG offices to access records. Around the same time, the IG at the National Archives and Records Administration was forced to step down from his post after languishing on administrative leave for nearly two years, which began when the agency head made a referral accusing the IG of misconduct. “Extended investigations are harmful to the independence and integrity of the IG community,” Senator Charles Grassley (R-IA) wrote in an August letter responding to the incident. “Placing an IG on administrative leave through the duration of a multi-year investigation could also constitute the constructive removal of an IG.” More recently, the Department of Energy (DOE) IG’s office said it was unable to reach a conclusion in a case of alleged whistleblower retaliation against a nuclear safety engineer because a DOE contractor, Bechtel, and its subcontractor, URS, refused to turn over more than 4,000 documents, asserting attorney-client privilege.

These and other episodes suggest that Congress may need to take action to bolster IG independence while ensuring that IG’s are doing their jobs properly.

A bipartisan bill recently approved by the House Oversight and Government Reform Committee—the Inspector General Empowerment Act of 2014 (HR 5492)—is a big step in the right direction. Among other things, the bill would clarify an IG’s authority to access agency records “notwithstanding any other provision of law,” and require notification to Congress when an investigation into IG misconduct takes more than six months to complete. The Committee  added an amendment introduced by Representative Jackie Speier (D-CA) that would require IGs to publicly release confirmed reports of misconduct by senior officials.

POGO is reviewing this legislation and other possible IG reforms, including measures that would:

  • give the Department of Justice (DOJ) IG more authority to investigate alleged misconduct by DOJ attorneys, as proposed in a bipartisan bill introduced by Senators Mike Lee (R-UT) and Jon Tester (D-MT);
  • put more pressure on the President and Congress to fill IG vacancies, as proposed in a bipartisan bill introduced by Senators John Boozman (R-AR), Jeanne Shaheen (D-NH), and Kelly Ayotte (R-NH); and
  • clarify that IGs can be removed from office only for certain causes such as neglect of duty or abuse of authority.

We hope to work with Congress to ensure that IGs have the independence they need, while also gettingthe oversight they require, to carry out their important missions.

Image from the U.S. Agency for International Development.

By: Michael Smallberg
Investigator, POGO

Michael Smallberg, Investigator At the time of publication Michael Smallberg was an investigator for the Project On Government Oversight.

Topics: Government Accountability

Related Content: Inspector General Oversight, DOD Oversight

Authors: Michael Smallberg

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