IGs seek more authority to combat contracting fraud

Congressional action to provide additional investigative tools would greatly help inspectors general tackle contracting fraud, watchdogs said on Tuesday.

During the first hearing of the Senate Homeland Security and Governmental Affairs Ad Hoc Subcommittee on Contracting Oversight, four inspectors general suggested a number of areas where Congress could provide legislative assistance. But when subcommittee chairwoman Sen. Claire McCaskill, D-Mo., asked which one tool would most help watchdogs "catch the bad guys," the answers varied.

Brian Miller, inspector general for the General Services Administration, asked that IGs be given the right to subpoena financial records without notifying the subject of the investigation. This "don't tip off the target" proposal would treat inspector general subpoenas the same as grand jury subpoenas, which are exempt from certain privacy act notification requirements.

Homeland Security Department Inspector General Richard Skinner said his top legislative priority was gaining an exemption from the 1988 Computer Matching and Privacy Protection Act. That law requires agencies to meet extensive procedural requirements, including publishing Federal Register notices, before sharing data from electronic databases. According to Skinner, law enforcement agencies and the Government Accountability Office largely are exempted, but inspectors general still are tied up in the cumbersome procedures.

"Because [inspector general offices] rarely control the databases to be matched, valuable effort and time is lost persuading the agency system managers that matching is appropriate and necessary and to cooperate with the OIG to fulfill the Computer Matching Act administrative requirements," Skinner said.

He added that the absence of computer matching agreements forced the Hurricane Katrina Fraud Task Force to rely on manual record searches to detect improper payments in the aftermath of the 2005 disaster.

Charles Beardall, Defense Department deputy inspector general for investigations, listed a number of measures Congress could enact to reduce obstacles for inspectors general, but said his office's most pressing need was more bodies. The Defense Criminal Investigative Service, the law enforcement arm of the Defense inspector general's office, has expanded from a staff of seven special agents at its inception in 1983 to a workforce of 366. This growth seems modest, however, compared to the ballooning number of investigations the unit must handle.

In the past five fiscal years, DCIS investigations involving financial crimes related to procurement, pay and allowance, and conflicts of interest have increased 35 percent. Investigations involving kickbacks have increased 66 percent and those involving bribery have shot up 209 percent. Beardall called Defense Secretary Robert Gates' commitment to increasing the Defense Contract Audit Agency's workforce by 600 "extremely encouraging," but said a similar increase in the inspector workforce might be necessary.

"Increasing contract oversight by contracting personnel and auditors could uncover more criminal activity and require increased investigative activity," Beardall said. "Further, the requirement to conduct meaningful oversight concerning potential Recovery Act fraud is an additional demand."

The inspectors general told McCaskill and Sen. Susan Collins, R-Maine, that some authorities provided in the stimulus act should be made permanent and applied to all watchdogs regardless of whether their agencies receive stimulus funds. In particular, the law grants inspectors general the authority to force subcontractors working on stimulus-related projects to provide information. It also gives those subcontractors whistleblower protections.

"It's almost like we're saying it's more important to catch crooks with the stimulus money than it is to catch crooks anywhere else," McCaskill said. "To me, common sense was on vacation. Obviously, if there is not an objection to using these tools with the stimulus funds… I don't understand why there should be an objection by [the Justice Department], or anyone else."

The expanded subpoena authority to compel interviews is of particular importance in the IG community, according to J. Anthony Ogden, inspector general of the Government Printing Office and chairman of the Council of the Inspectors General on Integrity and Efficiency's legislation committee. Ninety-five percent of respondents to a recent survey of 56 inspectors general conducted by the council supported the idea. "It's about access," Ogden said.