“Transparency—For the IGs and the Public Interest”
Good afternoon and thank you for this opportunity to talk about the work of SIGAR.
John Sopko, the IG, is still recovering from knee surgery and sends his regrets that he could not be with you. I happily agreed to stand in for him, because John and I share a keen interest in effective oversight and a dedication to improving government performance. We also share a long, personal involvement in ferreting out misconduct and inefficiency—he as a prosecuting attorney and congressional staffer, I as a long-time GAO executive.
We and other SIGAR employees participate in CIGIE activities, and are proud to be part of the community of federal IGs. That said, it is also worth pointing out that SIGAR is different from other IG offices.
In our view, there are three key differences:
- First, we are temporary. SIGAR’s enabling legislation from 2008 requires that we start to wind down once the balance of undisbursed funds for Afghan reconstruction falls below $250 million. In case you are feeling sorry for us, I can reassure you that our demise won’t happen soon. Even if there’s never another appropriation, about $16 billion is still in the reconstruction pipeline for Afghanistan.
- Second, while IGs are an independent lot, you could say that SIGAR is fully independent. That is, we are not part of any federal agency. And, we report to the Congress as well as the Executive Branch.
- Third, we have a broad-reach mission. Congress gave SIGAR blanket authority—including powers of investigation and arrest—to examine any and all Afghanistan reconstruction activities, regardless of agency ownership or geographic location.
- For example, our investigative agents have made arrests in Afghanistan, but also at various locations across the United States.
Most of our work involves DOD, the State Department, and USAID, simply because they account for the great bulk of Afghan-reconstruction spending. But our oversight has also extended to other federal agencies, international and nongovernmental organizations, and others who receive U.S. taxpayer dollars for Afghanistan reconstruction.
SIGAR is a small shop compared to GAO or the DOD IG. We have about 200 employees, with about 40-50 deployed in Afghanistan. But we typically issue 25 to 30 products per quarter, including performance and financial audits, special projects, investigative results, and testimonies, and of course, our Quarterly Report to Congress.
Looking ahead to the wind-down of major American involvement in Afghanistan, we are setting up a lessons-learned operation. Its mission will be to research and produce cross-cutting reports that extract and organize key insights about the reconstruction experience before human and institutional memories fade. And, hopefully come up with fixes to some of the problems that have occurred with reconstruction in Afghanistan.
We believe lessons-learned reports are necessary because there is a good chance we will be doing this again in another country at another time.
SIGAR has adopted innovative approaches to oversight
The fact that we are a temporary organization with only a short timeframe dictates an approach that is not simply “business as usual.”
Recognizing that, we have adopted a number of innovative approaches to SIGAR oversight activities.
SIGAR has directorates for the two traditional and essential functions of any IG office: audits and investigations. But full audits can take six months or more of very detailed work, and frequently occur after the fact.
We wanted a distinct staff with the capacity to illuminate urgent problems with timely reports to help decision-makers make changes before additional damage occurred. So, at John Sopko’s direction, SIGAR created an Office of Special Projects, which issues letters and reports not bound by GAGAS standards.
One of our first special projects was investigating and issuing an alert letter on contractors’ failure to install culvert-denial systems to prevent or deter insurgents from planting IEDs under Afghan roads.
We alerted General Allen and others in his command to this problem, which not only involved fraudulent payments, but lethal threats to U.S. and Coalition personnel. In fact, two U.S. servicemen lost their lives over one of these culverts.
Our military took immediate corrective action. In addition, the Afghan contractors involved in this fraud were soon facing criminal charges.
SIGAR also initiated the first-ever attempt to seize assets held in an Afghan bank account owned by a corrupt Afghan trucking contractor. This contractor had defrauded the United States of more than $70 million by charging inflated prices for trucking contracts to deliver U.S. military supplies. The contracts were obtained through bribery, kickbacks, and bid rigging.
Working with the Justice Department on an in rem case against the funds rather than the person, SIGAR obtained a federal court order for asset seizure in Afghanistan. By the time the warrant was executed by the Afghan Attorney General, the bulk of the assets had been transferred to banks in Dubai and elsewhere.
But we didn’t stop there. SIGAR served seizure warrants on several major correspondent banks in New York. We recovered more than $10 million, while another $50 million has been frozen.
According to the Justice Department, no one had ever tried this before in Afghanistan.
In response to requests from the Hill, we extended our auditing reach by contracting with international firms to conduct financial audits of reconstruction contractors. More than 20 of these audits have been completed, resulting in over $75 million in questioned costs and almost $10 million in sustained costs.
We are also very aggressive in referring poor performers and bad actors to DOD for review and decision for suspension and debarment. As of June 30 this year, SIGAR had made 490 referrals that led to 73 suspensions and 195 finalized debarments of individuals and companies.
We have also referred 43 cases involving Afghan contractors which the CENTCOM commander had designated as “actively supporting the insurgency” or which the Department of Commerce had found to be “engaging in activities contrary to the national security interests of the U.S.”
Unfortunately, the Army suspension and debarment official decided that these designations were not adequate grounds for suspension or debarment and rejected all 43 cases. We do not understand why the Army permits deadly enemies and their sympathizers to get federal dollars which can be used to buy the means to kill our troops.
We continue to work with Congress on this issue.
Those are just a few examples of the approach we take in carrying out our work. All of our work, I would add, is motivated and carried out in the conviction that transparency is vital for the proper functioning of the IG community, and for the protection of the public interest. SIGAR is committed to transparency.
Our commitment to transparency
You may have noticed that John Sopko was one of the 47 IGs who signed the August 5 letter to leaders of the House and Senate government oversight committees. The letter drew attention to “serious limitations on access to records that have recently impeded the work of inspectors general.”
The three agencies cited in the letter are not a focus of SIGAR's work. But we have had our own experiences with agency reluctance or obstructionism, and we share the IG community’s concern that hostile or passive-aggressive responses to legitimate oversight requests are a threat to our ability to produce thorough, independent, and timely products.
In January 2009, President Obama issued an important memorandum to the heads of executive departments and agencies which said that “government should be transparent,” “transparency promotes accountability and provides information for citizens about what their government is doing.” That is also true, of course, when IGs provide quality information for agency heads and members of Congress.
We agree entirely with the “presumption of openness” in federal policy that followed the President’s memo. Unless a piece of information is legitimately classified or otherwise restricted, it ought to be available, even if disclosure is not technically required. And, when disclosure is legally required, as by the IG Act, then agency refusal to provide timely access to the data is intolerable.
Transparency and openness are vital to good government. Opaque surfaces polished by agency pr staff can conceal problems and provide false assurance that everything is fine. And, you don’t have to be particularly suspicious to think that agency heads may not always be inclined to call attention to or take action on unwelcome reports from their house IG.
Publicity is worth pursuing
You may have noticed that many SIGAR reports have made the news. One reason is that we publish, post, tweet, and otherwise publicize virtually everything we do.
Some people are unhappy with the fact we get press coverage, even though our two-person press shop pales in comparison to the squadrons of PR people at Embassy Kabul, ISAF, or DOD. Some people think we’re doing this to attract attention and gratify our egos.
They are mistaken. Neither John nor I are angling for another government job, movie role, book advance, or trying to become the next YouTube sensation.
We simply follow the basic principles that: (1) unless it’s a security risk or classified, we publish it; and (2) if it’s worth publishing, it’s worth publicizing.
We welcome publicity because publicity has impact.
Very few Americans have seen the Health and Human Services Department IG reports on billing fraud against Medicare for motorized wheelchairs. But millions of people have had the chance to read, in print or online, the Washington Post’s 4,000-word illustrated story on August 16 that dramatized and humanized the problem.
The Post noted that Medicare has paid out more than $8 billion for motorized wheelchairs for 2.7 million people, even though a large but unknown portion of the payments involved offers of free wheelchairs, recruitment of people with no mobility problems, and prescriptions faked by corrupt doctors or even by scammers using the names of dead doctors.
That’s the kind of story that gets attention. Editorial writers, ordinary citizens, congressional staff, and think-tank researchers pick up on such revelations and weigh in. Members of Congress call hearings and draft legislation. Agency heads eagerly or reluctantly draft responses, policies, and testimony. With any luck, things get better, whether systematically or a bit at a time.
Let’s face it: No matter how good an IG audit, GAO report, or commission finding may be, if it falls into a black hole and molders unnoticed while Washington bustles on, it helps no one.
Widespread dissemination of IG reports can promote the following good outcomes:
- Publicity brings problems to the attention of senior leaders whose information gatekeepers may not have relayed unwelcome news.
- Exposing incidents of waste can motivate people to do the right thing, whether sharpening their own performance or calling out problems.
- Publicity may prompt managers to take corrective action before they get a nasty memo from the boss.
- Publicity can deter government contractors from cutting corners, using substandard materials, or tolerating unsafe practices if they fear they may not get paid, or be debarred.
- Publicity can deter fraud. When potential wrongdoers read about a federal civilian, military member, or contractor going to jail and paying big fines for taking kickbacks or bribes, or stealing, or smuggling, they may decide not to give in to temptation.
- Publicity can encourage people to come forward to the IG community. Some of our best tips and other information have come from senior officials, including generals and ambassadors, who approach us here or in the field, or use the SIGAR fraud hotline.
- Publicity that points out successes and best practices can encourage agencies to continue improving their own performance, or to follow the example others have set.
- Finally, and perhaps most importantly, publicizing our work gives the American taxpayer—and congressional appropriators—confidence that someone appointed by the President of the United States is looking out for how their money is spent.
As our friends in the armed services would say, publicity is a force multiplier for the substantive results of your hard work.
When you turn up an important finding that involves serious threats to mission, to lives, to public funds, or the public interest, don’t be shy about spreading the word beyond the usual channels of distribution. It’s legitimate, it’s helpful, and—even if some officials get peeved at you— it’s a public service.
Improving the reconstruction effort
That said, let me now offer a few comments on SIGAR’s role in the future of America’s $104 billion-plus reconstruction effort in Afghanistan.
The years ahead present a real challenge. Most U.S. and coalition military personnel will be gone as we enter 2015, which is also supposed to mark Afghanistan’s “decade of transformation.” But the country remains under assault by insurgents, short of domestic revenue, plagued by corruption, afflicted by criminal elements involved in opium and smuggling, and struggling to execute basic functions of government. In fact, they haven’t even resolved their recent presidential runoff election yet.
Meanwhile, even as the United States and other foreign donors are moving more aid onto the Afghan budget, oversight will become increasingly more challenging. The U.S. footprint in country will decline, reducing assets for transport, medical evacuation, and security.
We estimate more than 80 percent of the country will be effectively off-limits to U.S. civilian oversight. Like other U.S. agencies, we are looking at options for remote and third-party monitoring outside of Kabul to provide a continuing flow of information from the field.
As a side note, the challenges to getting accurate and useful information out of Afghanistan aren’t confined to the Taliban or restricted to U.S. government entities. Late last month, the Afghan Attorney General ordered a senior New York Times reporter to leave the country for allegedly refusing to cooperate in an investigation of his reporting on the Afghan presidential run-off election.
We are also continuing to advocate for agency implementation of SIGAR audit recommendations, whether broadly or at program and project levels. I will note that State, USAID, and DOD been constructively engaged in this process, and have already adopted a good number of our recommendations –in fact, about 70% to 80% implemented.
Close review of oversight recommendations should be a priority at all levels of management, not just for the immediate project being audited, but across the board.
SIGAR is also continuing to report on evidence that suggest we have been spending too much, too hurriedly on reconstruction without securing stakeholders buy-in, without ensuring sustainability, and without taking adequate countermeasures against unintended consequences like distortion of afghan markets for goods and skilled labor as well as aggravating the country’s already staggering dependence on foreign aid.
We are also calling attention to the problem that the pressure to show “progress” may result in dubious metrics and inflated reports of “accomplishments.” For example, a number of U.S. agencies have explicitly or implicitly taken credit for the rapid growth of the telecommunications industry in Afghanistan. Yet senior executives at the largest telecom company in the country said they had received not one cent of assistance from the USA or any other government. We have an on-going audit looking into this situation.
SIGAR reports have also raised questions about the accuracy, relevance, or causality assumptions in reported progress in areas like public health, education, and security-force capabilities in Afghanistan.
Whatever the answers, it is clear that reconstruction progress needs to be measured in realistic and useful ways. If we are going to learn anything from the reconstruction experience, we need to have accurate assessments of the proximate cause of both successes and failures.
We are also pushing for more accountability. The Afghanistan reconstruction experience is marred by many sins of commission or omission. A contractor fails to follow requirements, leaving unsafe, unfinished, unusable, or unwanted buildings but yet gets paid in full.
Someone decides to buy $500 million worth of non-airworthy planes that are later abandoned. Federal contract officials don’t bother to make site visits, fail to keep proper documentation, fail to enforce standards, and fail to ensure work is done before accepting it.
People, companies, and agencies need to be held seriously accountable for stupid decisions, dereliction of duty, corrupt behavior, and subpar performance.
Otherwise, we simply foster the expectation that additional waste, fraud, and abuse will be tolerated in the future.
SIGAR will also continue to point out how well or poorly Afghan officials perform in their promises to enact government reforms, improve observance of human rights, and reduce corruption.
We all want reconstruction to succeed in creating a stable and sustainable economy and government in Afghanistan. But unless we are prepared and resolved to withhold funding when circumstances warrant, it is hard to see how the afghan government can be adequately incentivized to pursue real reform.
Conclusion
Working toward all of these objectives in an increasingly nonpermissive environment will be a real challenge. You can be sure that SIGAR will nonetheless continue to audit, investigate, and report on reconstruction issues—and to seek publicity through news reports, opinion leaders, social media, speaking engagements, and other channels.
As the IG community’s group letter of August 5 maintained, government openness and transparency are vital to our work. And as SIGAR has argued, the sensible pursuit of responsible publicity for substantive findings magnifies the impact of whatever we discover when we look under the hood.
That concludes my remarks and thank you again for the opportunity to talk with you.
Keep up the good work, and thank you for your efforts towards building a better government!