Inspectors general gain prominence with new Congress

Glenn Fine proved recently why he isn't likely to win any popularity contests at the Federal Bureau of Investigation.

As the inspector general at the Justice Department, he fired a broadside on March 9 that blasted the FBI for "serious misuse" of national security letters, one of the Bush administration's most controversial anti-terrorism tools. Fine's 130-page report alleged that the bureau may be responsible for up to 3,000 cases of abuse of the national security letter's expedited subpoena process, through which agents can obtain, without prior court approval, bank, phone, and credit card records of individuals with suspected ties to terrorists.

FBI Director Robert Mueller was clearly chagrined by Fine's findings, but at a press conference the same day, Mueller called the report "excellent," accepted ultimate responsibility for the abuses, and promised to take corrective action.

Fine, who assumed his post in 2000 during the Clinton administration, has issued several reports during the Bush presidency that have skewered the FBI. He has fingered the bureau for repeated failures to track down Qaeda terrorists who were in the United States and who were involved in the September 11 attack, and he has documented the sizable and expensive software problems that have plagued the FBI's effort to modernize its computer systems.

"I'm sure there must be much frustration and gnashing of teeth over some of the issues he's looked at and the critical reports that he has issued," says Michael Bromwich, Fine's predecessor as Justice's IG who is now a lawyer in private practice at Fried, Frank, Harris, Shriver & Jacobson.

Fine says he isn't looking to be popular, but to be "tough and fair" with the department. "You're here to perform an independent and objective role," he says in an interview. "They're not always thrilled with our findings, but they appreciate our role."

Perhaps. Ever since 1978, when Congress passed legislation establishing inspector general positions at dozens of executive branch departments, the job of the nonpartisan watchdog has often been a thankless one, and sometimes controversial. Still, over the years, the number of IG positions has increased steadily: 62 inspectors general now serve at federal departments and agencies.

For decades, IGs have helped reduce waste, ferret out fraud, uncover mismanagement, and save money. But in an administration that gives oversight low priority, Fine and other aggressive IGs have played an especially significant role -- and have garnered attention for it.

Their efforts now dovetail in part with those of Democrats on Capitol Hill who have launched tough investigations and promise more in the final 18 months of the Bush administration. That means that Fine and his fellow inspectors general may play a larger role than usual in helping to define the president's legacy.

"I've seen a reinvigoration of IGs in the last few months," says Danielle Brian, executive director of the Project on Government Oversight, a nonprofit. "I think it's partly related to the turnover in Congress. Suddenly, there are more people interested in what they have to say. There's a new outlet for their work. IGs are now far more in demand and have a higher profile."

Earl Devaney, the inspector general at the Interior Department since 1999, agrees that "the change in Congress has resulted in a lot bigger interest in having oversight hearings." Devaney is another IG who has been a thorn in the side of his agency for several years. He has been involved for three years in the federal task force investigating the Jack Abramoff influence-peddling scandal, which recently secured a guilty plea from J. Steven Griles, the former No. 2 official at Interior.

Other IGs who have been in the spotlight include Stuart Bowen Jr., the special IG for Iraq reconstruction since 2004, whose office has identified billions in U.S. and Iraqi currencies lost to waste, fraud, and mismanagement in various projects, and John Higgins, the inspector general at the Education Department since 2002, who produced a blistering report on conflicts of interest among department officials involved with the Reading First program and has referred some cases to Justice for possible prosecution.

Last month, at the request of House Education and Labor Committee Chairman George Miller, D-Calif., Higgins opened a new conflict-of-interest probe involving Education Department officials and the $85 billion student-loan industry.

First Line of Defense

Some members of Congress say that the Bush administration has forced independent-minded IGs to leap over obstacles. "This administration has done a lot to halt oversight," Sen. Charles Grassley, R-Iowa, a longtime champion of vigorous inspectors general, says in an interview. "There has been a concerted effort to discourage oversight and not to cooperate."

Thus, some IGs have drawn scrutiny on Capitol Hill and elsewhere in recent years for supposedly dropping the ball on problems at their agencies, and for unethical behavior.

Janet Rehnquist, the daughter of late Supreme Court Chief Justice William Rehnquist, resigned as the inspector general at the Health and Human Services Department in 2003 after Grassley and others raised questions about whether she delayed audits to please members of Congress and whether she transferred or forced some senior people out of her office. A Government Accountability Office report that Grassley and two Democrats requested said that Rehnquist took actions that "damaged her credibility and ultimately created an atmosphere of anxiety and distrust within the [inspector general community]."

Last month, NASA Inspector General Richard Cobb became the subject of a highly critical report by the President's Council on Integrity and Efficiency, the interagency group that sets standards for government IGs and monitors their performance. A redacted version of the 1,000-page report, released by the House Science and Technology Committee, charged that Cobb turned to former NASA Administrator Sean O'Keefe for advice on probes and alerted him to various audits, including search warrants that the FBI planned to issue.

Cobb "created an appearance of a lack of independence," the report said, faulting NASA for not being tough enough in disciplining him. Disciplinary action "up to and including removal" of Cobb would be appropriate, the report stated.

Michael Griffin, the current NASA administrator, has urged lighter penalties and has defended Cobb in the wake of the report, and he wrote to the council that it had not found "actual conflicts of interest or actual lack of independence" affecting Cobb.

Clark Kent Ervin, the first IG at the Homeland Security Department, who was forced out in 2004, says he was pressured to go easy in his investigations. When he left, Ervin went public with accusations that then-Secretary Tom Ridge often chided him for being too critical and aggressive in his probes.

"There were a lot of tensions between Ridge and me," Ervin says in an interview. "He would say I was making a mountain out of a molehill."

One dustup between Ervin and Ridge involved a DHS program that aimed to stop potential terrorists from entering the United States by thoroughly checking the visas of visitors from certain countries. When Ervin flew to Saudi Arabia in 2004 to see how the program was operating, he says, he was floored that none of the DHS employees could speak Arabic. "Ridge's response was that it wasn't a big deal," Ervin recalls.

Most IGs and the members of Congress who follow their work acknowledge that the watchdog job is inherently difficult. "It's just like being a whistle-blower," Grassley says. "You're like a skunk at a picnic," albeit one that is "the first line of defense against the waste of taxpayer dollars."

Higgins at Education says in an interview, "If all the [Cabinet] secretaries had their druthers, there would be no IGs. They need to learn to use us to their benefit."

One of the key benefits is saving the government money, which was a large part of the rationale behind the 1978 legislation. Under the law, the president appoints and the Senate confirms 29 inspectors general who report to both their agency heads and to Congress. Agency heads appoint the other 33 IGs, who usually report either to them or to agency boards. In 2006, Congress appropriated $1.9 billion for all federal IG operations, up from $1.5 billion in 2002, according to the President's Council on Integrity and Efficiency.

According to the council, the IG recommendations in 2006 for management improvements throughout the federal bureaucracy could save the government as much as $9.9 billion. The council also calculated that the government saved an additional $6.8 billion by bringing civil and criminal cases, as well as through voluntary repayments in administrative cases.

Key Democrats say that those numbers could rise as oversight committees on the Hill take up issues that the inspectors general probed and analyzed, and as lawmakers request additional audits and investigations.

"IGs serve a very critical oversight function," says Rep. Henry Waxman, D-Calif., the chairman of the House Oversight and Government Reform Committee. Waxman notes, however, that IGs can be "an important resource [only] if they are independent and insulated from political pressures."

Complex Probes

Standing 5 feet, 9 inches, Glenn Fine may not look like someone who'd catch the eye of basketball scouts, but the Justice Department IG starred as a guard on his Harvard team and was a late-round draft pick of the San Antonio Spurs in 1979. Fine opted to forgo the offer and attend Oxford as a Rhodes scholar. He returned to Harvard to earn his law degree.

Since joining Justice in 1995 as a top aide to then-IG Bromwich, Fine has demonstrated skills as exceptional as those he once displayed on the hardwood courts. Bromwich recalls that Fine was hired to help run a new unit to handle "serious and complex investigations" and that over the years he has "built beautifully on that model."

Several of the biggest projects that Fine's office of 400 investigators, auditors, and analysts has taken on were highly complex probes of abuses and mismanagement within the department after the 2001 terrorist attacks.

One of its first major reports dealt with the treatment of 762 detainees being held on immigration charges in the weeks and months after the attacks. It documented, among other things, such abuses as the denial of the right to legal counsel, the lengthy detention of suspects against whom no charges had been filed, and the use of rigid policies that blocked immigration judges from issuing bond.

The report suggested some 20 reforms and drew a largely positive response. Justice officials "agreed with virtually every recommendation," Fine says.

More recently, Fine's blistering of the FBI over the national security letters was the subject of testimony on March 20 at the House Judiciary Committee. Fine testified that, according to FBI estimates, 600 of the approximately 3,000 violations might involve "cases of serious misconduct" and added that the bureau's documentation "significantly understates" just how widely the national security letters were used to obtain records on tens of thousands of Americans and foreign nationals. The FBI misconduct, Fine said, was due mostly to "mistakes, carelessness, confusion, sloppiness, lack of training, lack of adequate guidance, and lack of adequate oversight."

At Mueller's direction, the bureau moved quickly to take corrective steps, including creating a Web-based system to track the issuance of national security letters.

At present, Fine has a few investigations under way but no others that involve the high stakes and political sensitivity of the probe into Justice's much-criticized firings of eight U.S. attorneys last year. The IG's office is conducting that investigation in tandem with the department's Office of Professional Responsibility.

"We're going to take it wherever it leads," Fine says, and conduct it as "thoroughly and expeditiously" as possible. The offices will issue a report when they complete the investigation; and, he adds, if there is evidence of criminal misconduct, "we will refer the matter to a prosecutor."

Some Democrats and outside observers say that the IG should lead the investigation because OPR reports directly to Attorney General Alberto Gonzales, who, along with current and former top aides, is a subject of the probe. "Ultimately, control should reside with the IG because the IG is clearly more independent than any other entity in Justice, including OPR," Bromwich says.

Fine says he is proud of the positive reception his recommendations have received within the department. "We're not out to get the department," he says, "but to propose effective solutions that can be implemented."

Through a department spokesman, Assistant Attorney General for National Security Kenneth L. Wainstein said, "Glenn is a true professional. He conducts thorough investigations, he pulls no punches with his findings, and he always remains open to different perspectives on an issue -- all qualities of a fair and effective inspector general."

Although appreciative of the praise, Fine argues that his office's resources have not grown sufficiently to meet its mission. The total staff in the IG's office peaked in 1998 at 454; in 2006, it was just 401. "The money for oversight is not always the top priority."

Agency Frictions

Every bit as tenacious as his fellow IG at Justice, Earl Devaney of Interior is a burly man who spent more than 25 years as a senior official in the Secret Service and as head of criminal enforcement cases at the Environmental Protection Agency. In his eight years at Interior, he has earned a reputation for giving blunt testimony on the Hill and for issuing audits and reports on a range of ethical and management issues that he argues have damaged Interior's performance.

One big concern for Devaney has been a program devised in the 1990s to spur oil-industry exploration and drilling in the Gulf of Mexico. Interior exempted oil companies from paying royalties to the government, with a proviso that royalties were to resume if the price of oil rose above $36 dollars a barrel. But a drafting error in about 1,000 of the government leases from 1998 and 1999 omitted the language on the proviso.

At a series of Hill hearings that began last September, Devaney has testified that Interior officials hid the drafting error for almost five years, costing the government billions of dollars in lost revenues. Furthermore, he contradicted testimony of the director of the Minerals Management Services (the Interior unit that runs the royalty program), disagreeing with her on when she learned of the problem. The Government Accountability Office says that the government lost between $2 billion and $10 billion in royalties.

In December, a report by Devaney's office lambasted MMS for decreasing its use of detailed audits of its programs and for relying heavily on reviews that use company statements rather than sales records. Devaney also estimated that since 2000 the number of auditors at Interior had dropped 15 percent and the number of audits had declined 22 percent.

As part of the oil-royalty ruckus, Devaney is working with Justice on criminal and civil probes related to a federal "royalty in kind" program that allows oil companies to give oil directly to the government instead of making royalty payments.

But Devaney says that "most of the cases we've had have involved ethics issues." When he arrived at Interior, Devaney says, the ethics office was "in disrepair." In testimony last year before a House Oversight and Government Reform subcommittee, Devaney attacked what he charged was his department's lack of concern about ethics and its attitude toward his IG reports -- most of which were "disregarded by the department," while specific studies on procurement problems and other abuses involving audits were "vehemently challenged."

"Short of a crime, anything goes at the highest levels of the Department of Interior," he declared.

With regard to the Abramoff probe, Devaney says he has had as many as 12 Interior investigators and analysts working on the task force at any given time. "This is a case where leveraging of resources [among agencies] and leveraging of expertise has turned out to be a terrific thing," he says.

At a March 23 press conference to announce that Steven Griles, Interior's former No. 2 official, was pleading guilty to lying to the Senate Indian Affairs Committee about his ties to convicted lobbyist Abramoff when he appeared at a 2005 hearing, Devaney didn't mince his words: The IG said that Griles's guilty plea showed that "he was ready and willing to serve as Jack Abramoff's man inside Interior."

Devaney's staff remains heavily involved in different aspects of the probe, including Justice's ongoing scrutiny of Italia Federici, a conservative activist who had close personal ties to Griles that Abramoff exploited in his lobbying drives. Justice has notified Federici that she is a target of the probe.

Not surprisingly, Devaney's focus on Griles caused friction with former Interior Secretary Gale Norton, who is also a friend of Federici's and who, before becoming secretary, co-founded a group that Federici has headed. Devaney had been looking into ethical questions related to Griles, a former energy lobbyist, as far back as 2004, when the Abramoff probe was first heating up. Devaney famously referred to Griles in Hill testimony as a "train wreck waiting to happen," a reference to several conflicts of interest involving Griles, charges that Norton largely dismissed.

Devaney takes pride in the fact that ethics issues are now treated differently at Interior, and he gives credit to current Secretary Dirk Kempthorne, who has instituted basic ethics training for officials among other reforms.

The changed ethics climate was underscored in late April when Julie MacDonald, a deputy assistant secretary at Interior, resigned. MacDonald was the subject of a scathing report from the IG indicating that among other abuses she gave internal agency documents to industry lobbyists in violation of federal rules.

Devaney wishes he had a larger staff to oversee the 73,000 employees at Interior. Since 1999, his office has added just five new positions, raising its total to 253. And he sounds somewhat cynical about the challenges facing IGs. "If you want to be popular, the IG job is not the one to have," he says. "Every day someone is going to be mad at you. The trick is to come to work in the morning and not be a poodle or a Doberman pinscher, but to strike a balance."

Heartburn

Striking a balance seems to be a hallmark of the work of Stuart Bowen Jr., the special inspector general for Iraq reconstruction. A lawyer who worked for then-Texas Gov. George W. Bush and who did a stint at the White House counsel's office, Bowen has produced a series of hard-hitting reports since 2004 that have often painted a bleak picture of the reconstruction effort. He has sharply criticized inflated bills and mismanagement on the part of big private contractors in Iraq such as DynCorp International, Halliburton, and Parsons.

In late March, Bowen's shop criticized the Pentagon and other departments for their initial failure to anticipate the monumental amount of reconstruction that would be necessary after the overthrow of Saddam Hussein. It faulted the Defense Department and other agencies for not having a plan in place to restore basic services in Iraq and for not devising a coordinated system for reconstruction projects.

More recently, a 232-page quarterly audit from Bowen noted that while the administration had allocated virtually all of the nearly $21 billion that Congress appropriated for Iraq reconstruction and that more than half of the projects were completed, goals in such key areas as drinking water, education, electricity, and medical facilities had not been met, in part because of serious and persistent security problems.

What's more, Bowen's office has been involved in high-profile criminal and civil investigations. It has recovered about $10 million in fraud cases, while referring more than two dozen cases to Justice for possible prosecution.

Bowen's work has clearly caused some heartburn for the administration. Last year, House Republicans tucked into a conference report on a military authorization bill a provision to terminate Bowen's office in late 2007.

President Bush signed the bill, but Bowen's supporters on the Hill were able to reverse the move to shut the IG's office.

"When we put a spotlight on the termination provision, Congress rallied pretty quickly to change the law," Sen. Susan Collins, R-Maine, says in an interview. She added that Bowen's work has been "outstanding." His performance has also impressed Waxman, who initially was wary of the IG because of his long-standing ties to the White House. Waxman says that Bowen has "done a responsible job" under difficult circumstances.

Bowen himself has recently come under scrutiny by the President's Council on Integrity and Efficiency after a few former employees complained that they were told to do work on a book project on Iraq outside of their mandate and that the IG overestimated the savings his office achieved. Bowen's office declined to comment.

But Collins on May 3 issued a statement strongly supportive of Bowen, saying that his office has saved $25 in taxpayer dollars for every dollar that it had spent. Collins says she hopes that the council's inquiry is done promptly to "avoid any diversion from the special IG's important oversight work."

Assuring Independence

Both Democrats and Republicans say that it is important for the Hill to keep an eye out to protect inspectors general from pressure. "I've tried to do everything possible to strengthen the IG system and urge courage and independence on the part of individual inspectors general," Grassley says.

Ervin, the former IG at Homeland Security, recalled the criticism he received from Ridge during the 2004 presidential race when Democratic nominee John Kerry cited some of Ervin's reports. Ervin says in an interview that he was a friend of the president's and "I hoped he would be re-elected," but that "IGs can't time their reports to minimize political consequences to the administration that appoints them. If my job results in political perils for the president, so be it."

Other IGs have also felt pressure from higher-ups. Debra Ritt resigned as IG at the Smithsonian Institution in 2006 after launching an audit of the Smithsonian Business Ventures program. Ritt, who is now an assistant inspector general at the Small Business Administration, says she received an "unusual" call from then-Smithsonian Secretary Lawrence Small urging her to drop the audit.

She says she left mainly because of budget cuts and related factors, but she was dismayed that top officials "didn't understand the rights and authority of my office." Smithsonian officials were "uncomfortable with the frequency of my contacts with the oversight committees on the Hill," she says.

At Grassley's urging, the audit was expanded shortly before Ritt left to look into questions about excessive compensation for Small and other officials. Small resigned in late March after new revelations surfaced about what Grassley dubbed Small's "Dom Perignon lifestyle."

The ethics of some other IGs, however, have lately come into question. The president's council and two congressional committees are investigating the Commerce Department IG, Johnnie Frazier, for questionable travel expenses and possible impropriety involving a $150,000 contract awarded to a company with ties to an employee who left the IG's office.

To deal with problems at both ends of the spectrum, members of Congress are readying proposals that would ensure more protection and independence for good IGs, while developing procedures to remove bad ones. Rep. Jim Cooper, D-Tenn., introduced a bill that would ensure a statutory term of seven years, insulate budget-slashing reprisals, and set up clear criteria for removal. "IGs need to be professionalized," Cooper says in an interview. "They're too subject to politics. If you don't control your own budget you're just a puppet."

(Depending on how they were appointed, inspectors general can be removed from office either directly by the president or by an agency head. Congress is supposed to receive a written explanation for the removal.)

In the Senate, Collins has sponsored a contracting reform bill that includes provisions to upgrade the salaries of inspectors general and to bar the cash bonuses that some IGs now receive for their work. It would also update the development of electronic files in IG offices.

Regardless of the reform effort, IGs say their jobs will always involve a tricky mix of diplomacy and bluntness. Energy Department Inspector General Greg Friedman says, "You need to be someone who can navigate the challenges of dealing with both the executive branch and the legislative branch simultaneously. You have to be prepared to sometimes deliver bad news."