IGs Form Front Line of War on Waste and Fraud, But Weak Links Remain
Mark Flatten
The Washington Examiner
December 1, 2014

Allegations against top officials at the State Department were devastating and had to be suppressed, so the agency’s inspector general quickly obliged, delivering what amounted to a cover-up of a cover-up.

What happened at the State Department is not unusual, recent disclosures show.

Inspectors general are supposed to be the independent watchdogs within federal departments and agencies, exposing waste and corruption while protecting the whistleblowers who raise charges of wrongdoing and inefficiency.

The U.S. government has 72 IGs as a result of a 1978 law proposed by President Carter and approved on a bipartisan basis by Congress in the wake of revelations of federal contractors being paid for work that was never done, shoddy office furniture being bought at premium prices, and widespread political manipulation of government procurement.

The IG system has had its successes in the battle against government waste, fraud and abuse, but a perennial complaint since 1978 has been that too often the IGs can become lapdogs of agency management by soft-peddling their findings, whitewashing reports or burying evidence of wrongdoing, according to congressional investigations and reports by outside watchdog groups.

In the past two years, IGs at a half-dozen Cabinet-level agencies have been accused of retaliating against whistleblowers or softening their findings to protect top department executives or the White House.

Damning information about high-level misconduct has been scrubbed from recent IG reports at the Departments of State, Defense, Homeland Security, Interior and a slew of independent agencies, according to congressional reports and outside watchdog groups.

The Commerce IG has been rebuked for retaliating against his own people by the U.S. Office of Special Counsel and two congressional committees.

At the Department of Veterans Affairs, the acting inspector general is under fire for downplaying whistleblower claims and absolving the agency of blame for patient deaths in a high-profile report, even though the report confirmed that the VA used phony scheduling practices that led to delays in care.

Whistleblowers who have turned to Congress or the media routinely say inspectors general failed to investigate their charges of wrongdoing and then idly watched as their bosses subjected them to brutal retaliation for exposing agency secrets.

Even investigators within IG offices have faced retaliation for reporting internal wrongdoing or attempts to withhold embarrassing findings, according to congressional reports.

The worst offenders tend to be inspectors general who are in interim positions, meaning they have not been recommended for permanent appointment by the president or confirmed by the Senate.

But even some confirmed IGs have been accused of being too cozy with the agency bosses they are supposed to be watching.

“Too many IGs are concerned about their status within the agency,” said Sen. Charles Grassley, an Iowa Republican who for 20 years as been a champion for federal whistleblowers and a critic of weak IGs.

“Anybody that’s playing that game shouldn’t be an inspector general. IGs have to exercise their independence from political control,” Grassley said.

On paper, the IGs are supposed to report jointly to the president and to Congress. They are also by law supposed to have access to almost all documents and personnel.

In reality, Congress has little power to compel cooperation if the IG is willing to cover up for the agency.

The House Natural Resources Committee resorted to a subpoena earlier this year to obtain an unredacted report on watershed regulations that Acting Department of Interior IG Mary Kendall refused to release. It was the committee’s third subpoena on the subject since April 2012.

“We certainly believe that they are holding back information,” said Rep. Doc Hastings, R-Wash., the committee chairman. “That is just contrary to what open government should be about.”

Other committees have regularly sent letters requesting documents or information to IGs, only to have their inquiries ignored or rebuffed.

Since only the president can hire or fire IGs, there is inherent pressure on them to protect upper management at the agencies where they work.

That can be done by burying embarrassing findings, by ignoring high-level abuse or focusing on low-level employees who are committing relatively minor transgressions.

“It’s important for the bureaucracies to maintain the appearance of independence for IGs,” said Tom Devine, legal director at the Government Accountability Project, an independent watchdog organization.

“Their role isn’t necessarily to ferret out government corruption but to maintain the appearance of integrity within the executive branch,” Devine said of weak IGs.

“That’s why they will be very enthusiastic at having a lot of reports against small fries but leaving officials who are directing more widespread corruption untouched. Maintaining appearances is unfortunately a priority that too frequently trumps actually getting meaningful results,” Devine said.

What happened at State illustrates a litany of long-running problems with weak inspectors general, and how quickly the cover-up culture can change under a more aggressive leader.

Steve Linick was confirmed as the State IG in September 2013. For five years before that, the office was run by Harold Geisel, the acting IG handpicked by agency managers.

Geisel spent 25 years in State Department management, eventually reaching the rank of ambassador, before becoming acting inspector general in 2008. By law, career foreign service officers cannot become permanent IGs because that would create a conflict of interest. But, since Geisel was considered “acting,” the restriction did not apply to him.

Geisel is a close personal friend of Patrick Kennedy, under secretary of state for management, a position that puts him in charge of many department functions that are ripe targets for IG scrutiny, according to documents obtained by the Project on Government Oversight.

For years, the cozy relationship drew the ire of Congress, good-government groups and the Government Accountability Office, which found in 2011 that “the appearance of objectivity is severely limited by this potential impairment to independence” within the State Department’s Office of Inspector General.

Geisel’s loyalty to the agency was tested when accusations of widespread criminal misconduct by top State Department officials surfaced in 2011.

The ambassador to Belgium, a big campaign bundler for President Obama, was accused of soliciting sex in a park near the U.S. Embassy in Brussels.

Members of then-Secretary of State Hillary Clinton’s security detail were accused of hiring prostitutes, and a State Department security official in Beirut “engaged in sexual assaults” on foreign nationals, according to the complaints.

The Diplomatic Security Service, a law enforcement branch of the State Department, tried to investigate the underlying charges but was blocked by top agency managers including Kennedy and Cheryl Mills, chief of staff to Hillary Clinton, according to whistleblower allegations that surfaced later.

DSS agents reported the interference to the inspector general’s office, which confirmed the pressure from the top. A draft IG report written in November 2012 described the underlying cases of misconduct and the strong-arm tactics used by top managers to block the DSS investigations.

But that draft report was not made public. Instead, it was shown to top State Department officials who wanted it scrubbed of damaging information.

“This is going to kill us,” one top agency official reportedly said upon seeing the draft report, according to CBS News.

When the final IG report was issued in February 2013, it made no mention of the individual cases or of management pressure to kill the DSS probes.

Instead, the IG report blandly stated that DSS “lacks a firewall” to prevent management interference with DSS investigations.

The more candid draft report was leaked by an investigator inside the IG’s office to the House Oversight and Government Reform Committee and to CBS News.

Rep. Ed Royce, the California Republican who is chairman of the House Foreign Affairs Committee, demanded copies of the draft report and details about the specific cases of misconduct. The IG’s office refused to provide the information.

“There is every indication that critical information was missing from the IG report submitted to Congress,” Royce told the Washington Examiner in a recent interview.

“And whether it was State’s pressure to remove it or Geisel’s unwillingness to include it, the result is the same. We are not, as required by law, kept fully and currently informed. The bottom line is when federal agencies lack a Senate-confirmed, independent inspector general, the potential for malfeasance really abounds,” he said.

Under pressure from Congress, and in the wake of revelations that agency management influenced the IG’s final report, Obama appointed Linick as the State Department’s permanent IG in June 2013, less than a month after CBS broke the news about the IG cover-up. Congress confirmed him three months later.

Linick launched a new investigation, and in October 2014 the IG confirmed that at least three DSS investigations were blocked by top State Department officials, including the probe involving the ambassador.

While the new IG’s report was critical of management’s efforts to block the DSS investigations, it was silent on whether its own office bowed to the pressure.

Linick declined to be interviewed by the Examiner.

Douglas Welty, director of public affairs at the State IG’s office, refused to discuss whether the office buried the embarrassing findings in the original report.

“There is nothing more to be said about the reason for doing this review,” Welty said in an email. “We stand by both reports.”

Royce sees the new investigation as a do-over for the IG.

“We are looking at this report as a reversal of the IG’s findings,” Royce told the Examiner. “From our standpoint, that underscores the importance of having a permanent IG, a top cop in this position.”

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