Spring 1998

Overpriced Screws & Under-Reported Income . . .

Reprise: The Pentagon's ($76) "Screw" Up

Pentagon spare parts scandals againgained major media attention followinga March 18^th Senate hearing on the subject -- including news of a Pentagon purchase of $76 screws. Now in our second decade exposing such scandals,an October 1997 POGO Alert and the resulting press coverage helped prompt Sen. Rick Santorum (R-PA) and Sen. Joseph Lieberman (D-CT) to examine the problem in this hearing. In addition, Senators Tom Harkin (D-IA), Fred Thompson (R-TN) and John Glenn (D-OH) have requested further investigation.

The cause for re-emergence of these horror stories is clear. Key cost-cutting tools created in response to scandals ofthe late 80's were removed from the books during the recent 'reinventing government' campaign. Unfortunately,our worst fears were confirmed --recent acquisition "reforms" were really a deal for defense contractors, not for taxpayers as portrayed. POGO sent a letter to all members of Congress giving them four solutions to fix this problem.

Health Industry's Pro-Fraud Bill Being Considered

The health care industry is out to cripple the False Claims Act -- the government's best fraud fighting tool. The bill would even protect health care giant Columbia/HCA from theDepartment of Justice's ongoing investigation, expected to result in a record-breaking settlement for the government. POGO's report is on the way . . .

FEC Reform Before Campaign Finance Reform

Hundreds of thousands of dollars in political contributions are unaccounted for, improperly listed, or otherwise missing from Federal Election Commission (FEC) data, according to POGO's recently released report, Re-Establishing Institutional Integrity at the FEC: Ten Common Sense Campaign Finance Disclosure Reforms.

Through our research, POGO discovered that although both candidates and PACs must submit financial contribution data, these numbers are never compared. Practical, inexpensive, common sense reforms would remedy the existing inaccuracies that currently plague the campaign finance disclosure system.

In the long term, our work could rebuildthe integrity of the FEC and the campaign finance disclosure process. If the FEC can't handle overseeing the $1,000 and $5,000 PAC contributions, how can it ever be expected to track the big dollars?

POGO's Executive Director, Danielle Brian, presented our findings and recommendations in testimony before the House Subcommittee on Government Management, Information and Technology.

Center for Responsive Politics Executive Director Kent Cooper commented, "POGO has outlined specific low-cost fixes that can be implemented immediately."

Pentagon Brass Turns Into Lead

Our March report, More Brass, More Bucks, documented that the U.S. militaryhas almost twice as many officers per enlisted personnel than it did at the end of World War II. In an era when the U.S.faces no major military opponents, officer inflation in the U.S. military has reached new heights.

Although we could safely reduce the relative number of our officers, we keep excess brass that waste more taxpayer dollars. We have more officers than are necessary engaging in work that could be performed by civilian employees -- for significantly less cost.

Sen. Charles Grassley (R-IA),commented on the report, "The POGO report clearly indicates that ongoing reductions in military personnel strengths are not being applied evenly across the entire rank structure. As a result, the military is now top-heavy with brass."

Many Pell Grants Based on Lies, Not Need

POGO has been investigating allegationsbrought to us by a whistleblower who documented major abuses of the Pell Grant system.

Our investigation revealed that when filing income and assets information for Pell Grants, applicants sometimes file phony tax returns that under-report their family's worth. Applicants can getaway with this scam, as current law prohibits the government from confirming the applicant's reported income. This falsification practice is so commonplace that some college personnel advise students on how to beat the system.

POGO disclosed our findings in testimony before a House Subcommittee hearing. We are working with Rep.Carolyn Maloney (D-NY), the General Accounting Office and the Department of Education to eliminate this loophole.

EPA Puts Out Fire With Labeling Changes

After more than a decade of fires and explosions caused by Insecticide Foggers, also known as "bug bombs,"and despite threats of legal action from the aerosol industry, the Environmental Protection Agency (EPA) has finally required improvements to bug bomb warning labels.

During this lengthy process, some within the aerosol industry had threatened to take the EPA to court over changes inlabeling requirements. POGO's research detailed how EPA officials had confirmed over 500 fires or explosions per year that were caused by these misused products.

New labels will better warn the public of the potential hazards posed by these products. The change in EPA policy follows pressure from POGO which, in a 1994 report, cited internal EPA documents substantiating the EPA's subservience to the aerosol industry.

Battling Big Oil

Our ongoing efforts to force the oil industry to pay what it owes to the federal government are being fought onseveral fronts. POGO has been challenging the industry's efforts to defeat the Department of Interior's Rulemaking that would end future underpayment of royalties.

As an alternative, the industry has been promoting a plan on Capitol Hill which would introduce an entirely new method of royalty payment to the federal government called Royalty-In- Kind. Not surprisingly, this plan would in no way prevent future underpayment of royalties.

In order to force the industry to pay past-due royalties, POGO is working with the Department of Justice (DOJ).Through False Claims Act lawsuits filed by POGO as well as four other whistleblowers, the federal government may recover its losses plus civil penalties.

The oil industry has responded to our activity by boosting its lobbying efforts. According to the Center for Responsive Politics, the oil industry has contributed $4.2 million so far to thecampaigns of federal candidates during the 1997-1998 campaign cycle. The American Petroleum Institute, the industry's main lobbying group, spent a little more than $2 million on lobbying expenses in the first six months of 1997.

Colorado River: Nuclear Waste Dump?

A private mining company, Atlas Corporation, is contaminating the Colorado River with at least 8 gallons of radioactive material every minute. What's worse, this statistic was the polluting company's own estimate. POGO's work on this case will highlight the Nuclear Regulatory Commission's (NRC) acquiescence to industry as we attempt to stop the unnecessary and inexcusable contamination of this major source of drinking water for millions of people as far downstream as San Diego, California.

The NRC has jurisdiction over Atlas's 130 acre contaminated pile (by far the largest such pile in the U.S.). To date the NRC has sided with Atlas, arguing that the site should remain at its present location. Other federal and State agencies have raised concerns with Atlas's plan, including the Fish and Wildlife Service which argues that leaving the site in place" . . . will jeopardize two endangered fish,the Colorado squawfish and razorbacksucker."

We are working with Representative George Miller (D-CA) and the Grand Canyon Trust to expose this classic case of agency finger-pointing and to mobilize Congress to avoid this environmental disaster.