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74–454 PDF 2012

WHERE ARE ALL THE WATCHDOGS? ADDRESSING 

INSPECTOR GENERAL VACANCIES 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MAY 10, 2012 

Serial No. 112–144 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

DAN BURTON, Indiana 

JOHN L. MICA, Florida 

TODD RUSSELL PLATTS, Pennsylvania 

MICHAEL R. TURNER, Ohio 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

CONNIE MACK, Florida 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

ANN MARIE BUERKLE, New York 

PAUL A. GOSAR, Arizona 

RAU ́ L R. LABRADOR, Idaho 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

JOE WALSH, Illinois 

TREY GOWDY, South Carolina 

DENNIS A. ROSS, Florida 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

MIKE KELLY, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland,Ranking 

Minority Member 

EDOLPHUS TOWNS, New York 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DENNIS J. KUCINICH, Ohio 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MIKE QUIGLEY, Illinois 

DANNY K. DAVIS, Illinois 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

CHRISTOPHER S. MURPHY, Connecticut 

JACKIE SPEIER, California 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

Page 

Hearing held on May 10, 2012 ............................................................................... 1 

WITNESSES 

The Honorable Phyllis K. Fong, Inspector General, U.S. Department of Agriculture, 

Oral Statement .......................................................................................... 6 

Written Statement .................................................................................... 8 

The Honorable Brian D. Miller, Inspector General, U.S. GSA 

Oral Statement .......................................................................................... 15 

Written Statement .................................................................................... 17 

Mr. Jake Wiens, Investigator, Project on Government Oversight 

Oral Statement .......................................................................................... 21 

Written Statement .................................................................................... 23 

The Honorable Daniel I. Werfel, Controller, Office of Federal Financial Management, Office of Management and Budget 

Oral Statement .......................................................................................... 50 

Written Statement .................................................................................... 53 

APPENDIX 

The Honorable Elijah E. Cummings, A Member of Congress from the State 

of Maryland: 

Opening Statement ................................................................................... 75 

Letters to President Barack Obama ....................................................................... 77 

(1) 

WHERE ARE ALL THE WATCHDOGS? ADDRESSING INSPECTOR GENERAL VACANCIES 

THURSDAY, MAY 10, 2012 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 9:55 a.m., in Room 2154, 

Rayburn House Office Building, Hon. Darrell E. Issa [chairman of 

the committee] presiding. 

Present: Representatives Issa, Burton, Mica, Chaffetz, Walberg, 

Lankford, DesJarlais, Cummings, Maloney, Norton, Tierney, Cooper, Connolly, Quigley, Davis, Murphy, and Speier. 

Staff Present: Ali Ahmad, Majority Communications Advisor; 

Alexia Ardolina, Majority Assistant Clerk; Kurt Bardella, Majority 

Senior Policy Advisor; Michael R. Bebeau, Majority Assistant 

Clerk; Will L. Boyington, Majority Staff Assistant; Molly Boyl, Majority Parliamentarian; Lawrence J. Brady, Majority Staff Director; 

Steve Castor, Majority Chief Counsel, Investigations; John 

Cuaderes, Majority Deputy Staff Director; Jessica L. Donlon, Majority Counsel; Kate Dunbar, Majority Legislative Assistant; Adam 

P. Fromm, Majority Director of Member Services and Committee 

Operations; Linda Good, Majority Chief Clerk; Frederick Hill, Majority Director of Communications and Senior Policy Advisor; 

Christopher Hixon, Majority Deputy Chief Counsel, Oversight; 

Mark D. Marin, Majority Director of Oversight; Ashok M. Pinto, 

Majority Deputy Chief Counsel, Investigations; Laura L. Rush, Majority Deputy Chief Clerk; Jonathan J. Skladany, Majority Counsel; 

Cheyenne Steel, Majority Press Assistant; Rebecca Watkins, Majority Press Secretary; Jaron Bourke, Minority Director of Administration; Kevin Corbin, Minority Deputy Clerk; Ashley Etienne, Minority Director of Communications; Susanne Sachsman Grooms, Minority Chief Counsel; Carla Hultberg, Minority Chief Clerk; Lucinda Lessley, Minority Policy Director; Dave Rapallo, Minority 

Staff Director; Safiya Simmons, Minority Press Secretary; Mark 

Stephenson, Minority Director of Legislation; and Ellen Zeng, Minority Counsel. 

ChairmanISSA. The hearing will come to order. 

Before we begin, this is an unusual hearing, and I hope that you 

will all agree that this is a hearing in which we are not talking 

about any particular problem that has occurred in the recent or not 

recent past; we are talking about an ongoing question of the independence, the value of inspectors general, and where this ComVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
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mittee should go in strengthening the 12,000 men and women, $2 

billion budget that ultimately protects the taxpayers. 

So with that, I am going to make a special request. Recognizing 

that votes will interrupt this hearing and make it probably impossible for us to get through two panels, I am going to make a request that we be able to consolidate under one panel. In order to 

do that, I am going to ask unanimous consent here on the dais that 

all members agree not to get into areas that would create an inherent conflict between a transparency or sunlight individual, such as 

POGO, and the Office of Management and Budget. 

Do I hear any objections? 

[No response.] 

ChairmanISSA. Hearing none, could we please consolidate this so 

that we can get through one panel? If anyone objects to questioning 

as somehow creating a conflict, I will rule on it. But my intention 

is that I believe everyone on the panel and everyone on both sides 

of the dais today wants this hearing to accomplish the same factfinding. 

So if the staff would get that done while we do the opening statement. 

The Oversight Committee exists to secure two fundamental principles: first, Americans have a right to know the money Washington takes from them is well spent and, second, Americans deserve an efficient, effective government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. Our solemn responsibility is to hold government accountable to taxpayers, because taxpayers have a right to 

know what they get from their government. We will work tirelessly 

in partnership with citizen watchdogs to deliver the facts to the 

American people and bring genuine reform to the Federal bureaucracy. This is our mission. 

In 1978, the position of inspector general was established to promote efficiency and ensure that a threshold of accountability was 

integrated government-wide. I, myself, saw the inspector general 

far before that, when in the military, where their role, for generations, was critical. Commanders do the best they can, but commanders need watchdogs at all levels, independent watchdogs. The 

IGs are America’s front line of oversight in the Executive Branch. 

In fiscal year 2009 alone, their audits and investigations identified over $43 billion in potential savings. Having a robust group of 

permanent inspectors general at the Federal agencies is the best 

way to protect taxpayers from waste, fraud, and abuse. 

The Obama Administration has often proclaimed its commitment 

to transparency and accountability. That is why it is so troubling, 

and I remember that his predecessor had similar situations and 

want to note that, but the President has allowed vacancies at several IG offices to linger for months, and in some cases years. 

Even more disturbing is the Administration’s willingness to demonstrate a pattern, at times, of hostility towards some members of 

the inspector general community. That is not to say that that has 

not happened with past administrations. 

One of the President’s first actions on the IG front was to remove 

IG Gerald Walton from his post at the Corporation for National 

3 

and Community Service. We on this side of the aisle objected to it 

and continue to feel that this was inappropriate. 

However, that is not the issue for today. The issue for today is 

in fact how do we find something, regardless of who is in the White 

House, that satisfies, first, the American people’s right to know and 

right to be protected from waste; second, strengthens the relationship between this Committee and our counterparts in the Senate 

in being able to count on the inspectors general as our conduit into 

the Executive Branch. 

We can all have discussions about this Administration, and we 

have had plenty and will have more, but I think when we look at 

exposing taxpayer loss and waste, we cannot look at any one administration. We have often, on a bipartisan basis, lauded the success of tracking the stimulus fund spending. Doesn’t mean we 

agree to the stimulus bill itself, but it means that, in fact, we saw 

inspector general given a new job as chairman of that and we saw 

his years of experience help him help us understand what we 

would do next to improve transparency in the Federal Government. 

Today, four IG posts have been vacant for more than 1,000 days. 

Five IG vacancies are at cabinet departments. One of our points 

will in fact be to deal with such situations as USAID’s vacancy at 

a time in which Afghanistan and Iraq are not yet settled questions, 

and the variability of that entity to deliver its historic support, 

rather than direct funding to indigenous nationals, without USAID 

direct oversight concerns us and would concern us even more if we 

cannot have an inspector general there. 

So, in closing, I think it is extremely important not to allow today’s hearing in any way to reflect on the current Executive 

Branch individuals, including President Obama and Vice President 

Biden. In fact, we need to look beyond that. We need to look to the 

question of do we need to change the law for future presidents that 

would ensure prompt filling of vacancies in the absence of presidential action; could CIGIE or other entities have the right to temporarily fill those? If there is a dismissal—and I must admit I was 

tardy here because I was dealing with a potential false dismissal 

of an inspector general today—the fact is if that occurs, what is our 

ability to ensure that the acting inspector general in that entity or 

agency is in fact independent and that that dismissal is reviewed, 

or any other action reviewed in a way that prevents any loss of the 

independence, no matter what the allegation is. 

As we all know, it is clear that inspectors general wear two hats. 

One of them is for the agency or the cabinet position they work for. 

They may or may not be presidentially appointed; they may or may 

not be confirmed in the same way. That may be something that 

needs to be changed. But today we will primarily be dealing with, 

and asking the question of, how can we get greater independence 

and, for this Committee, more consistent transparency to this Committee and to the public. 

With that, I recognize the Ranking Member for his opening statement. 

Mr. CUMMINGS. Mr. Chairman, just a point of clarification. Just 

one point. The OMB, as I understand it, has a policy of—— 

4 

Chairman ISSA. I recognize the OMB has chosen not to be on this 

panel. We will remove the name. It may very well mean that he 

will be called back for a future hearing. 

Mr. CUMMINGS. That will be fine. First of all, it is not that they 

are unwilling; it just sets another precedent. And they will testify 

at any time, so they are glad to come back. 

Chairman ISSA. Sure. It was an ask for, and I had hoped that 

they would view this as the time in which it would not be a problem. As you know, Administration selectively decides at times that 

they will sit with non-Administration and selectively decides they 

won’t, but ultimately we will respect their decision. We will get 

through the first panel. If there is time, based on some change, but 

I suspect strongly there won’t be and we will have to reschedule. 

Mr. CUMMINGS. That will be fine. Thank you very much, Mr. 

Chairman. I really appreciate that. 

Inspectors general are critical to ensuring that our government 

works effectively and efficiently on behalf of the American taxpayers. Although our Committee plays a prominent and often public role in conducting government oversight, we rely heavily on IGs 

to conduct audits, inspections, and investigations on a daily basis 

at Federal agencies. Our Committee also plays a unique role in 

overseeing IGs and ensuring that they have the tools to do their 

jobs. 

In 2007, one of the most respected members of our Committee, 

Jim Cooper, introduced H.R. 928, the Improving Government Accountability Act, to enhance IG independence and efficiency. Under 

the then-Chairman Henry Waxman, the Committee approved this 

legislation by a voice vote. The House and Senate then adopted it 

and the bill was signed into law by President Bush in 2008. In my 

opinion, this is how we should approach today’s hearing: by working together in a bipartisan manner to ensure that oversight is rigorous and constructive. 

Today we will discuss IG vacancies at Federal agencies. Right 

now, seven IG positions are vacant that require presidential nominations and Senate confirmations. Although the President has 

nominated several candidates who are awaiting Senate confirmation, he is yet to nominate others. In addition, an existing vacancy 

at the Special Inspector General for Afghanistan Reconstruction requires a presidential nomination, but not a Senate confirmation. 

We all agree that we should have highly qualified, dedicated professionals in place at every IG office across the Federal Government. Personally, I am most concerned that the Administration has 

not nominated anyone to serve as State Department IG. The last 

Senate confirmed State Department IG was Howard Krongard, and 

he resigned after an investigation by this Committee into his conflicts of interest and his failure to conduct sufficient oversight of 

agency operations. That position deserves to be filled as soon as 

possible. 

To be fair, the number of current vacancies is not necessarily unusual. In fact, in the fourth year of George W. Bush’s presidency, 

there were also seven vacancies for Senate confirmed IGs, including at the State Department, Department of Treasury, the General 

Services Administration, and the Department of Health and 

Human Services. And this does not include Clark Kent Ervin’s reVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
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cess appointment to serve as IG of the Department of Homeland 

Security, which was never confirmed by the Senate. 

The fact that President Bush had as many IG vacancies in 2004 

as President Obama does today does not mean we should ignore 

the current vacancies. Similarly, we should not single out the current Administration for purely partisan reasons. 

As part of our review today, we also have to acknowledge the role 

played by the Senate in these vacancies. For example, President 

Obama nominated Michael Horowitz to be the IG of the Department of Justice on July 29th, 2011. Until 2009, Mr. Horowitz had 

served as a presidentially appointed, Senate confirmed commissioner on the United States Sentencing Commission; yet, even 

though the Senate had confirmed him previously, his nomination 

was held up for eight months. When the Senate finally did the 

vote, they confirmed his nomination by a voice vote. 

Similarly, Brian Miller, the current IG at GSA, who will be testifying here today, had to wait nine months before the Senate finally 

confirmed his nomination by President Bush in 2005. 

The IG vetting process is very extensive and challenging. It becomes even more difficult to identify qualified candidates who are 

willing to serve when they are blocked by anonymous holds and 

undue delays in the Senate. 

Finally, I would be remiss if I did not recognize the hard work 

of those who serve in IG offices. This includes not only the thousands of staff who dedicate their professional careers to these 

tasks, but also those who serve as acting IGs while others await 

Senate confirmation. In fact, just yesterday our Committee heard 

testimony from the very capable acting IG at the Department of 

Homeland Security. 

Nobody should be under the misimpression that the lights are 

turned off at IG offices while they await a permanent IG. These officials and staff do a terrific job on behalf of the American people 

and I commend them for their dedication. 

With that, Mr. Chairman, I yield back. 

Chairman ISSA. Thank you. 

All members will have seven days to submit opening statements 

for the record. 

As I recognize the panel, I would ask unanimous consent that, 

because we are not sure whether we will get to him, the Honorable 

Daniel Werfel’s opening statement be placed in the record as 

though he did testify. 

Without objection, so ordered. 

Chairman ISSA. We now introduce the Honorable Phyllis K. 

Fong, who is the Inspector General of the U.S. Department of Agriculture and Chair of the Council of Inspectors General, or CIGIE, 

as we will tend to call it here. 

Also a returning favorite, the Honorable Brian D. Miller, who is 

the Inspector General of the United States General Services Administration. Welcome back. 

And Mr. Jake Wiens is the investigator for the Project on Government Oversight, often called POGO. Welcome back. 

Pursuant to the Committee rules, I would ask you to please rise 

to take the sworn oath. Raise your right hands. 

6 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

[Witnesses respond in the affirmative.] 

Chairman ISSA. Let the record indicate all witnesses answered in 

the affirmative. 

Please be seated. 

As I previously said, we are unfortunately, today, going to be on 

a very tight constraint because of votes. I will try to keep our folks 

to their five minutes. I would ask you to try to stay to your five 

minutes. And I assure you we will stay as long as we can on a vote 

and, if possible, return as soon as possible. 

With that, we recognize Ms. Fong for her opening statement. 

STATEMENTS OF WITNESSES 

STATEMENT OF THE HONORABLE PHYLLIS K. FONG 

Ms. FONG. Thank you, Mr. Chairman, Ranking Member 

Cummings, and members of the Committee. It is a real privilege 

to be here today to represent the Federal IG community, which 

consists of 73 IGs in the Executive and Legislative Branches. 

At the outset, before I get into the topic of this hearing, I would 

like to express the appreciation of the IG community to you and 

the members of the Committee for your continuing support of our 

mission and your interest in our work. This Committee has a noteworthy record of bipartisan support for the contributions of IGs. In 

particular, we note your work on the Data Act of 2012, which was 

recently passed by the House and which contains several provisions 

that would greatly assist IG operations if enacted. So, on behalf of 

the community, we want to thank you for your support. 

My written statement provides an overview of the IG Council’s 

activities, so I am going to focus my remarks this morning on the 

role that we play as a Council in filling IG vacancies. 

As has been remarked, the process to fill vacancies involves multiple players and a thorough vetting process, and CIGIE plays a 

very small role at the front end of this process. By law, we are responsible for submitting recommendations on potential IG candidates to the appropriate appointing authority; namely, the President for cabinet level agencies, and the agency head for smaller 

designated Federal entity IGs. 

To do this, we have set up an IG recommendation panel to receive materials from interested candidates. The panel is composed 

of experienced IGs who represent different kinds of IG offices, who 

bring insight and experience to the process. 

With respect to the PAS IGs, the panel provides recommendations on an ongoing and continuous basis to the Office of Presidential Personnel so that that office can consider candidates as vacancies arise. 

When a vacancy arises in a DFE IG position, the panel contacts 

the appropriate agency head directly to offer its assistance in filling 

that vacancy. 

CIGIE actively reaches out to numerous groups to publicize this 

process and to ensure that people who may be interested in IG poVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
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sitions understand the role that we play in the process and that 

they are able to take advantage of that role. 

I should note here that while we do provide one source of IG candidates to appointing authorities, we are not the only source of candidates. For example, people who are interested in IG jobs can 

apply directly to the appointing authorities if they so desire. Also, 

our recommendations are not binding. The appointing authorities 

are not required to accept or to act on our recommendations when 

they make decisions on how to fill IG vacancies. 

Once we provide our recommendations, our formal role in the appointment process is over. 

We look forward today to continuing our work in this area and 

we welcome your questions and comments. Thank you. 

[Prepared statement of Ms. Fong follows:] 

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Chairman ISSA. Thank you. 

Inspector Miller? 

STATEMENT OF THE HONORABLE BRIAN D. MILLER 

Mr. MILLER. Good morning, Chairman Issa, Ranking Member 

Cummings, members of the Committee. Thank you for inviting me 

here to talk about the role of inspectors general. My remarks today 

reflect only my personal experience. 

It is a great privilege for me to have served as inspector general 

since being confirmed in 2005, and I recognize the tremendous responsibility that comes with this job. 

IGs wield a large amount of discretion and authority. They issue 

reports that can have a devastating impact on the agency and individuals. IGs make criminal referrals, often resulting in felony convictions and incarceration. IGs advise heads of Federal agencies 

and the Congress. We regularly appear at hearings such as this 

one and often meet with members of Congress and their staff. Perhaps most importantly, IGs need to navigate sometimes difficult relationships with their home agency, as well as relationships with 

other IGs, agencies, prosecutors, and the law enforcement community as a whole. 

Part of the genius of our system of government is that IGs provide the needed check and balance on the operation of Federal 

agencies. 

Now, the usual incentives for taking a presidential appointment 

do not apply to IG positions. IGs are not policymakers; they apply 

the laws and policies already on the books. They are not political. 

IGs have to be nonpartisan, fair, and impartial. Finding and nominating the right person for the job is absolutely vital. 

IGs have a dual reporting requirement to Congress and the agency head. As one former inspector general, Sherman Funk, put it in 

the Fall 1996 issue of the Journal of Public Inquiry, dual reporting 

equates to ‘‘straddling a barbed wire fence.’’ Mr. Funk stated that 

because of the challenges facing IGs, the job must be done with sufficient common sense, a healthy dose of good humor, unremitting 

homework, support by professionally competent staff, and, above 

all, a solid and reflexive integrity. Then the barbed wire fence may 

cut occasionally, but it will not disable. 

Based on my own experience, I believe that once selected and appointed, an IG needs time and experience on the job to develop 

long-term audit and investigative priorities, the ability to hire 

highly specialized staff, and the independence to accomplish the 

mission. My permanent appointment allowed me the needed leverage and longevity to make lasting improvements to my office and 

to make long-term recommendations to GSA. 

Additionally, I believe my impact has been greater because I 

have been able to create longstanding relationships with agency officials, the Department of Justice, and the Congress. I have also 

worked hard to establish partnerships with State and local IGs in 

law enforcement as part of my duties with the Financial Fraud Enforcement Task Force. 

Examples of some of the steps I have been able to take include 

the following: 

16 

In 2008, I formed the Office of Forensic Auditing to employ innovative auditing and investigative techniques, and to develop evidence that meets admissibility standards for prosecution in Federal 

courts. 

In 2011 we began a criminal intelligence program to augment 

our investigative activities by consolidating our information-gathering efforts and serving as a force multiplier for our special agents 

around the Country. We have integrated our hotline into this program so that a trained investigative analyst looks at very complaint and tip to identify trends and connections to other open 

cases. Additionally, our partnership with FinCEN, the Financial 

Crimes Enforcement Network, broadens our agents’ ability to spot 

bribery cases and kickbacks. 

I appreciate the time and effort that went into confirming me as 

an inspector general, and I hope that my efforts have served the 

interests of the United States. Thank you for your time, and I 

would be happy to answer any questions. 

[Prepared statement of Mr. Miller follows:] 

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Chairman ISSA. Thank you. 

Mr. Wiens. 

STATEMENT OF JAKE WIENS 

Mr. WIENS. Chairman Issa, Ranking Member Cummings, thank 

you for inviting me to testify today. 

My name is Jake Wiens and I am an investigator at the Project 

on Government Oversight, which is also known as POGO. 

From POGO’s perspective, the inspector general system is an essential component of a well functioning Federal Government. IGs 

identify billions of dollars in cost-savings every year; they conduct 

investigations that hold government officials and contractors accountable for misconduct; and they help to evaluate the effectiveness of government programs and policies. 

Because POGO considers IGs to be so incredibly important, we 

regularly undertake efforts to strengthen and improve the IG system as a whole. Some of those efforts have focused on giving IGs 

the tools to be more independent and other efforts have focused on 

the necessity of holding IGs themselves accountable for misconduct 

and poor performance. 

Our most recent effort to strengthen the IG system is a web page 

that we created called Where Are All the Watchdogs? The web page 

continually tracks the overall number and length of IG vacancies, 

and whose responsibility it is to fill the positions. 

POGO created the IG vacancy tracker because we firmly believe 

that the effectiveness of an IG office can be diminished when that 

office does not have permanent leadership. IG offices that are led 

by permanent IGs have a number of structural advantages over 

IGs that are led by acting IGs. Some of those advantages are 

unique to the IG context and others are general management concepts that could apply in basically any organization. 

One structural advantage to permanent IG leadership involves 

independence. Another advantage of permanent IG leadership involves credibility. Both of those qualities can have a huge determinant on the effectiveness or lack thereof of a particular IG office. 

As of today, 10 of the 73 statutory IG positions are vacant. Some 

of the positions have been without permanent leadership for years 

on end, while others only recently became vacant. Although the 

overall number of IG vacancies is important, the context surrounding particular vacancies is necessary to truly understand the 

implication of that vacancy. IG positions can become vacant for a 

variety of reasons, some of which are troubling, while others are 

completely appropriate; and in some occasions a vacancy may even 

be beneficial. Likewise, IG vacancies can continue for extended periods of time for a variety of reasons. 

It is useful to look at some of the current vacancies to understand how they began, why they have continued, and what the implications of those vacancies might be. 

The State Department IG has now been vacant for 1,576 days, 

just over four years. The position first became vacant when State’s 

most recent permanent IG, Howard Krongard, resigned amid allegations that he had been blocking criminal investigations into contractors operating in Iraq. The initiation of that vacancy created an 

opportunity to fill that position with a highly qualified and well reVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
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spected permanent IG who could restore credibility to that IG office. But that opportunity has not been realized, as the position has 

remained vacant without a nominee since the last year of the Bush 

administration. 

The Corporation for National and Community Service IG position 

has now been vacant for 1,064 days. The position first became vacant in June 2009, when President Obama removed CMCS’s most 

recent permanent IG, Gerald Walton, under controversial circumstances. Since Walton’s termination, the Obama Administration has nominated two candidates for the position. The first was 

nominated in February 2010, but his nomination has since been 

withdrawn; and the second was nominated in November 2011 and 

has been awaiting Senate confirmation for 177 days. The continued 

vacancy, regardless of fault, comes at a terrible time for the CMCS 

IG because their budget was recently cut in half during the fiscal 

year 2012 appropriations. 

The Special Inspector General for Afghanistan Reconstruction position has now been vacant for 461 days. The position became vacant after the original SIGAR, Arnold Fields, resigned his office 

amid scrutiny by a bipartisan group of Senators, as well as POGO, 

who had arrived at the conclusion that he was not qualified for 

such an important position. But the fact that a replacement has 

not been appointed by the President, even though it has been more 

than a year since Fields resigned, also shows that it can be easier 

to create outside pressure for a removal than for an appointment, 

even though the impact of not having a permanent SIGAR is just 

as bad as having an ineffective SIGAR. 

POGO strongly urges both the Obama Administration and Congress to make filling all of these vacancies a priority. But we also 

caution that filling the vacancies quickly should not come at the expense of identifying highly qualified candidates, a process which 

can take time. 

Thank you very much for asking POGO for its views on these important issues, and I would be happy to answer any questions. 

[Prepared statement of Mr. Wiens follows:] 

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Chairman ISSA. Thank you. 

Before I recognize myself, I would ask unanimous consent that 

two letters from Congressman Chaffetz, one to President Obama 

dated February 9th, 2012, and one also to President Obama dated 

May 17th, 2011, be placed in the record, both related to these vacancies. 

Without objection, so ordered. 

Chairman ISSA. Mr. Wiens, one quick question, not as my own 

question, but in your opening statement you said that sometimes 

a vacancy can be good. I am presuming that what that really 

meant was sometimes creating a vacancy would be good, but retaining a vacancy is never desirable. 

Mr. WIENS. Yes, exactly. It is the initiation of that vacancy is 

what I meant—— 

Chairman ISSA. Good. 

Mr. WIENS.—that creates that opportunity. 

Chairman ISSA. No problem at all. Okay. 

I am going to start with a question I know the answer to. That 

always makes it a little easier from the dais. Mr. Miller, are you 

familiar with White House liaisons that operate within, for example, GSA? 

Mr. MILLER. Generally. I have met, I think, each one. 

Chairman ISSA. Ms. Fong, you are too? 

Ms. FONG. Yes. 

Chairman ISSA. And, Mr. Wiens, are you familiar with how 

White House liaisons are placed in all the branches of the Executive Branch? 

Mr. WIENS. I am not as familiar. 

Chairman ISSA. Okay, then I will stick to my two IGs for a moment. 

In your experience, isn’t it true that these White House liaisons, 

regardless of who is in the White House, have pretty much unfettered access to information that they would choose to have, and the 

ability then to report it directly back to counsels in the White 

House? 

Mr. MILLER. I wouldn’t know, Mr. Chairman. 

Chairman ISSA. Well, in your particular case, the White House 

liaison was aware of your investigation and the chief of staff, actually, in this case, I believe, reported it back to the White House 

counsel. So there is a separate avenue in every administration of 

these legislative or White House liaisons. 

Here is one of my basic questions for the two IGs. That is all well 

and good, but do we currently have that same level of transparency 

from IGs, or anyone else, in each of the branches? 

[No response.] 

Chairman ISSA. We will take that as a no. 

Ms. FONG. I am sorry, but I don’t follow your question. Could 

you—— 

Chairman ISSA. Well, Ms. Fong, unless you report with the same 

specificity and constant reporting nature that a White House liaison does at you name the ABC, Justice, GSA, SEC, wherever, unless we have that same level, then the White House knows an 

awful lot more about things that are going right and wrong more 

directly and more unfettered than we do, isn’t that true? Because 

38 

you are our only eyes and ears; we don’t get to appoint a person 

who works for this branch to sit every day and be able to be in the 

critical meetings with the cabinet officer and other direct staff. 

Isn’t that true? 

Ms. FONG. I will just say that from our perspective we, as you 

know, have a statutory responsibility to report directly to you, as 

well as the head of our agencies, and we carry that responsibility 

out. We believe that is a very important responsibility. 

Chairman ISSA. And that is my very question. 

Mr. Miller, you are a hero around here. You did a very good job, 

and continue to do a very good job in your role at GSA, and we 

want you to do that. But I want to make a point here today, and 

that was the reason for this fairly long set of questions. In the case 

of your recognition that there was a huge problem with the Las 

Vegas GSA party, and other problems, you determined that and informed the White House through the referrals that GSA made directly to counsel, but not you doing it, but it happened as a result 

of your reporting it to the administrator, and thus to the White 

House liaison, the chief of staff, and so on. But you didn’t report 

it to us during that 10 months. The current statute would have 

made it a requirement, wouldn’t it? 

Not the general interpretation of the statute, but doesn’t the current statute, Ms. Fong, if something is significant, significant 

enough that you are pre-warning an administration official, you are 

pre-warning them because you want them to deal with it immediately, and it is in fact serious, doesn’t that trigger the same requirement under current statute that you report to Congress? 

Ms. FONG. I think you put your finger on exactly what the issue 

is. The language in the statute says keep the head of the agency 

and Congress fully and currently informed of significant issues. As 

you noted, the practice is to work with the agencies on urgent 

issues immediately so that they can be addressed very quickly, and 

then to work with Congress as quickly as can be reasonably handled; and it does involve some discretion and some judgment. 

Chairman ISSA. So if this Committee were to send a letter to 

CIGIE, but to all the IGs, in light of the historic interpretation— 

and I want to be very fair, there is a historic interpretation and 

then there is an interpretation that perhaps I am going to give you 

today from the dais. It would be my new interpretation that anything that you choose or believe you have to tell the head, formally 

or informally, because you believe it is significant, triggers that requirement that you also tell us in due course. 

Don’t have a problem with caveats for things which have unique 

sensitivity, law enforcement sensitivity, but the basic we have a 

problem reporting, would it help if perhaps the Ranking Member 

and I made it clear that we believe that should trigger the information on some basis to us? 

Ms. FONG. Or do you need new legislative language, which is always our backup? 

Ms. FONG. We always welcome legislation. 

Chairman ISSA. No you don’t. All of us would prefer to work refining things without vast new laws, because we always piggy-back 

a lot on once we get to a new law. 

My time has run out, but could you comment on that? 

39 

Ms. FONG. Sure. I appreciate your comments. I am aware that 

there have been legislative proposals on this area, and you are 

aware of some of the concerns that the IG community has historically had. I think we should definitely have continuing dialogue 

with you on this to flesh out areas where you have a concern where 

perhaps you don’t believe we have been as forthcoming as you believe we should be, and I think we should continue that dialogue 

with you, your staff, the Ranking Member. 

Chairman ISSA. Thank you. 

I believe we have enough time for the Ranking Member’s questions, and then we are going to go do the votes and then come back. 

So the gentleman is recognized. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. 

Ms. Fong, the Council of Inspectors General on Integrity and Efficiency issues annual reports on significant activities and accomplishments of the Federal IGs. Each year your report includes data 

on government-wide potential savings and total savings to the government from all IG audit recommendations. Can you explain the 

difference between potential and total savings? I think we have a 

chart here somewhere. 

Somebody put the chart up. There we go. 

Can you explain the difference between potential and total savings? 

Ms. FONG. Let me just take a step back. 

Mr. CUMMINGS. Okay. 

Ms. FONG. My understanding of the data—and this is based on 

the data that each IG office compiles in response to the IG Act requirements. And the data categories talk about potential savings 

because it is very difficult to measure actual savings. So my understanding of the data that we are providing is that we give a number for potential savings from audits and another number for potential savings from investigations. We add that up and have a 

total number of potential savings overall. 

Mr. CUMMINGS. Okay. 

Ms. FONG. It is very difficult to track actuals because of the nature of the criminal justice system, for example. 

Mr. CUMMINGS. But you do this report, right? It comes out of 

your office, right? 

Ms. FONG. Yes. The Council does the report. 

Mr. CUMMINGS. So your annual reports for the last five fiscal 

years, 2006 through 2010, show a promising trend, is that fair to 

say? 

Ms. FONG. I think you are right. I have looked at the results for 

the last three years; not the last five because I couldn’t do that. 

But the last three do look as if we are on a very upward trend. I 

will note that a large portion of the recoveries in the last few years 

have been due to Postal Service IG and some of the specific work 

they are doing on pensions and EBT. 

Mr. CUMMINGS. So let me show you the stats, okay? The graph 

up here shows that the potential savings for all IG recommendations and the actual savings to the government have steadily increased dramatically over the years, and I understand it is hard to 

get the actual number, so I guess these are pretty close estimates. 

40 

But no matter how you look at it, in fiscal year 2006, the poten- tial savings were only $9.9 billion and the total savings were $16.7 

billion. By fiscal year 2008, the potential savings were $14.2 billion 

and the total savings went up to $18.6 billion. By fiscal year 2010, 

potential savings shot up to $80.2 billion and the total savings 

went up to $87.2 billion. 

Does this appear to be accurate to you? 

Ms. FONG. I appreciate your asking me that question. This is the 

first that we have seen the chart, and I would be very happy to 

take the chart and analyze it in light of the data we have and provide you some comments on it for the record. 

Mr. CUMMINGS. I guess I think that one of the things that we 

find is that in government today there is a lot of talk about Federal 

employees and what they don’t do and what they don’t accomplish, 

and agencies that don’t accomplish certain things; and this Committee being concerned about savings, it seems like this would be 

something that would be at the top of your list as far as what you 

are effective at, because that is something that we are all interested in. 

But you are not that familiar with these charts, is that what you 

are saying to me? 

Ms. FONG. Yes. I think generally the numbers appear to me to 

be accurate, but I would like to just take a closer look and get some 

comments back to you. 

Mr. CUMMINGS. But based upon what you do see, there is a positive trend going forward. 

Ms. FONG. Yes, there is a positive trend. 

Mr. CUMMINGS. And can you generally comment on why that 

might be? Without even knowing all the numbers. I mean, is there 

something happening that we don’t know about? 

Ms. FONG. Well, I would like to say that as the IG community 

matures and gets more experienced, that we are getting better at 

identifying the issues that really require oversight and that that is 

showing some payoff in terms of dollar recoveries as well as recommendations to improve programs. I would like to say that. 

Mr. CUMMINGS. Well, just say it. 

Ms. FONG. I will say that. 

Mr. CUMMINGS. All right, you have said it. To me, it looks like 

both potential savings and total savings have increased dramatically under this Administration. What does this say overall about 

the community of inspectors general under the Administration? 

Can you comment generally on the effectiveness on the community 

of inspectors general and some of whom are acting? In other words, 

we have concerns about vacancies and whatever, but obviously the 

actings and the people in permanent positions, apparently they are 

doing something significant because that is a big jump from a few 

years ago until now. 

Ms. FONG. Well, just to comment on the jump, again, I just want 

to reiterate that a large portion of that is due to the Postal Service 

IG’s accomplishments. I want to give them appropriate credit. 

But to get to your larger point about the acting IGs and their organizations, I have spoken to many of them recently. All of them 

have told me, the ones I have spoken with, that they are going 

after their mission full speed ahead, that they are very proud of the 

41 

accomplishments of their offices, that they feel they have issued 

some very hard-hitting reports with real dollar recoveries, and they 

feel that their offices continue to operate at a high professional 

level. 

Mr. CUMMINGS. Well, as I close, I would agree with that and 

want to publicly thank them for what they do. I think it would be 

almost impossible for us on this panel and this Committee to effectively and efficiently do our jobs without you, without the IGs. 

With that, I yield back, Mr. Chairman. 

Chairman ISSA. And on that agreement we will stand in recess 

until just a few minutes after the second of two votes, which means 

about 15 minutes. Thank you. 

[Recess.] 

Chairman ISSA. This meeting will come to order. 

We now recognize the gentleman from Illinois, Mr. Davis, for five 

minutes. 

Mr. DAVIS. Thank you very much, Mr. Chairman. 

Mr. Wiens, thank you for being here today. Let me say that I am 

very thankful for the service that your organization provides. I 

would remind us that it is important to have permanent inspectors 

general. I want to point out, however, that the lack of a permanent 

IG does not mean that those offices simply shut down. One indicator of effectiveness is the amount of recovered funds, or the number of suspensions or debarments, or other quantitative metrics, all 

of which IGs report to Congress on a semiannual or quarterly 

basis. 

Do you have any statistics that compare the output of permanent 

IGs to acting IGs? 

Ms. FONG. Let me go ahead and comment on that question. 

When we compile our statistics, we compile them for the whole 

community of IGs. Now, I believe that we could break it out, on a 

fiscal year basis, the statistics for organizations headed by permanent IGs versus organizations headed by acting IGs, but we do not 

currently have those statistics. 

Mr. DAVIS. All right. Well, but I am sure you would agree that 

acting IGs often perform very valuable services in conducting audits, inspections, and investigations. Would that be correct? 

Ms. FONG. Yes, I would very much agree with that. 

Mr. DAVIS. For example, the acting IG at the Department of Interior conducted the investigation into the Deepwater Horizon spill, 

is that correct? 

Ms. FONG. I believe that is correct. 

Mr. DAVIS. I asked my staff to pull together some stats on this, 

and I think there is a slide that we could look at that might show 

what I am talking about. For example, the Department of Homeland Security currently has an acting IG named Charles Edwards. 

In fact, he testified before us yesterday. Before he assumed his 

post, recovered funds were $3.7 million in fines; savings and administrative cost savings were $6.5 million. After he assumed his 

post these amounts increased to $19.9 million and $20.5 million, 

respectively. 

My point is not that he is doing something substantially different 

than his predecessor, although that may be true; my point is that 

the IG offices are made up of thousands and thousands of dedicated 

42 

workers who devote their professional careers to this. Would you 

agree that there are these individuals who are indeed professionals? 

Ms. FONG. Yes. The offices of inspector general have many very 

dedicated and very professional and experienced people. 

Mr. DAVIS. And if we would take a look at SIGAR in the quarter 

before Acting Special IG Trent took over, SIGAR proposed only four 

suspensions or debarments. Most recently, Acting IG Trent’s office 

proposed 40 suspensions or debarments. Similarly, at the State Department, before Acting IG Geisel was in charge, the IG’s office recovered $715,000 in funds and opened 14 investigations. Under the 

acting IG’s leadership, recovered funds increased to $10.7 million 

and the number of investigations opened has increased to 49. 

I guess what I am really just simply pointing out is the fact that 

these individuals do in fact provide very effective services and that 

we are in good stead, oftentimes, when they are placed in those offices, although they have not been permanently placed. And I guess 

it does help, though, to try and speed up the permanent placement 

so that the individuals have the security, themselves, of knowing 

what they are going to be doing, what they are going to be expected 

to do. And my point is simply that we should try, in as many instances as possible, to make these permanent placements so that 

the individuals are not just acting or have a level of uncertainty 

about what their tenure is going to be in a particular office or location. 

So I thank you all. 

Mr. Chairman, I yield back. 

Chairman ISSA. Would the gentleman yield? 

Mr. DAVIS. Yes. 

Chairman ISSA. Just a question. And I am not trying to put 

words in your mouth; I am trying to understand. So one of your 

statements is that, to the greatest extent possible, if we can’t find 

someone else to put up, in many cases we probably should urge the 

putting up of the acting IG who has been doing a good job and see 

if that isn’t a consensus candidate for the Senate as one of the solutions? 

Mr. DAVIS. Well, that is certainly a position that I take. I mean, 

I have always been told that the proof of the pie is in the eating. 

And if a person is doing a good job, there is nothing to suggest that 

he or she would not continue to do so; and I would certainly hope 

that the Senate would take that into consideration when there is 

a need for a permanent placement. 

Chairman ISSA. Once again, when we talk about the shortcoming 

of the Senate, we are always in agreement here in the House. 

Mr. DAVIS. Thank you. 

Chairman ISSA. Thank you. 

Now we recognize the gentleman from Indiana, the former chairman of the full Committee, somebody who knows a great deal 

about inspectors general, Mr. Burton. 

Mr. BURTON. Wait a minute. I was the chairman emeritus; now 

it is the former chairman. Can you tell me the difference? Never 

mind. 

Chairman ISSA. You know, if you have to know, then you have 

been too long not the chairman. 

43 

Mr. BURTON. Oh, I see, I am over the hill, part of the OTHG, 

over the hill gang? Never mind. 

Chairman ISSA. Now, look. We look at your picture there. Okay, 

you look great. You look dapper. You still look great; you still look 

dapper. A rose by any other name, Dan. The gentleman is recognized. 

Mr. BURTON. Are you guys enjoying all this? 

Allow me to just start off, Mr. Chairman, by saying that we have 

over a trillion dollars in deficits this year, and the potential for 

over $1 trillion in deficits every year for the next decade makes one 

wonder why there wouldn’t be more concern about oversight. I 

mean, the State Department is so involved and so responsible for 

what is going on over in the Middle East. I am not saying that the 

acting IG is not doing an adequate job, but it just seems to me that 

one of the most important things that the President would want to 

do, especially in economic times like this, is get somebody in there 

that is responsible for looking after the expenses in a very thorough way. I mean, Afghanistan and Iraq have been just such a 

drain on our resources over the past decade, it just boggles my 

mind to think that the Administration hasn’t moved on getting a 

permanent IG. And also, you know, you wonder how many things 

may have fallen through the cracks. 

I know Mr. Miller out there has worked on the problems that we 

talked about out in Las Vegas, those conferences and other things, 

and that sort of fell through the cracks. They didn’t catch that until 

a lot of those things had been done, and there is some question 

about the gentleman who was in charge of that whole operation out 

there, whole area, might even have done something that was of a 

criminal nature and that he might even be tried before it is all 

over. It would seem to me that we would want to catch those 

things in advance, instead of catching them way after the fact. Or 

if not in advance, as close to the problem as possible. 

So I am not sure—you probably have already answered this 

question, but let me just ask you a question that you might not be 

able to answer, and that is can you give me an answer as to why 

the President hasn’t made a decision on this? That is number one. 

Number two, are there not plenty of competent people who have 

worked in this area of government that the President could have 

nominated that would have been able to take over and do the job? 

Ms. Fong? 

Ms. FONG. Well, as you know, the process to fill an IG position 

is a complicated process; it involves a number of players, it involves 

extensive vetting. It is an important process. We—— 

Mr. BURTON. Excuse me, Ms. Fong. Let me just interrupt real 

quickly. The President has had three years to make a recommendation, over three years, almost four, and it just seems to me, after 

three and a half years, it would seem that he could have at least 

recommended somebody so the vetting process could start. But to 

wait for three and a half years, and to know the costs that were 

involved, and an awful lot of people have said there has been a lot 

of waste, fraud, and abuse in Iraq and Afghanistan. It just seems 

they would have had somebody all over that, instead of asking for 

money and spending the money without proper oversight. 

Go ahead. 

44 

Ms. FONG. Well, I think we can all agree that while acting IGs 

do a very, very good job, these positions should be filled as speedily 

as possible. I think that absolutely goes without saying. 

Mr. BURTON. Well, if I were talking to the President—I always 

frame my comments on the floor like this because we can’t talk to 

the President. But if I were talking to the President, I would say 

you ought to listen to Ms. Fong, because this should be done and 

should be done very quickly. 

Mr. Miller, anybody else have any comments? 

[No response.] 

Mr. BURTON. Well, listen, I am awfully glad you folks got to see 

me; it has been a big thrill for you, I know. 

Chairman ISSA. Would the gentleman yield? 

Mr. BURTON. I would be happy to yield to my colleague. 

Chairman ISSA. Thank you. 

Following up on the acting, particularly for the IGs, but also for 

Mr. Wiens, do you believe that legislatively we could enhance vacancies that occur under both Republicans and Democrats, enhance 

the ability to have some legitimacy and some clout of the IGs by 

establishing procedures, perhaps under CIGIE, where, for example, 

we have a pool of IGs and the ability to move them without triggering a confirmation automatically for a year, if you will, in the 

inaction of a president within X amount of time for Congress to 

have a role in choosing, the way we do for GAO, candidates? 

There are a number of ideas that have been floated around. Ms. 

Fong, I know you know many of them. The idea that you can have 

no IG and then, for whatever reason, the deputy leaving, and so 

you end up with, in the case of some agencies, they simply grab 

some career person who doesn’t even have a history in the IG, and 

they throw them in as acting, and that is where you sit until there 

is action. 

Do you believe that Congress should at least evaluate whether 

or not to have a role in preventing vacancies? For anyone on the 

panel. 

Mr. WIENS. My own perspective is that the process seems to 

work pretty well most of the time. The overall number of vacancies 

is one metric, but if you look at the particular cases and look at 

how long they take, I think they take too long. But the process 

should take time because you are vetting candidates. I think in 

cases like the State Department, hearings like this are incredibly 

important because it puts pressure on those officials. But I do 

think examples like the State Department are the exception rather 

than the rule, so I am not sure that that would be quite necessary 

to do. 

Chairman ISSA. Mr. Miller? 

Mr. MILLER. Mr. Chairman, you may want to study any constitutional impediments. Article II, Section 2, Clause 2, the appointments clause, vests the authority to make appointments of principal officers in the President. So it would be worth having your 

counsel study that issue. 

Chairman ISSA. Sure. And I wasn’t talking about a principal officer. I am talking about the selection of an independent acting, and 

I gave the example of an agency that today is not headed by a confirmed individual, not headed by the previous deputy, but in fact 

45 

headed by a person who was never in the IG position, simply a senior person at that agency, without confirmation even of the commission. So, if you will, some role in those situations to create an 

acting. 

Ultimately, there is the whole question of what statutory authority and constitutional authority you would have, and I think that 

is a very good one. At the end of the day, if you have somebody 

who has been selected by a chair of an agency or commission who 

is not confirmed, not voted by that, but simply thrown in there as 

the acting, you are so far removed from any constitutional legitimacy that you would have to ask the question of does Congress 

or should Congress, or even through a process, an administrative 

process, be able to see that somebody is selected that is not simply 

a yes person for that entity. 

Ms. FONG. Let me offer a few comments on that. I think this situation does occur, it has occurred over the past few years. The statute, the Reform Act doesn’t specifically address what do you do 

when you have a vacancy, who becomes acting. So generally, within 

the community, I think many of us recognize that one of the best 

practices for an IG office is to establish a very clear line of succession protocol that is public so that when an IG is incapacitated or 

gone, it is very clear that the authority flows within the OIG to 

carry out that OIG’s mission. And in the best case scenarios that 

is what happens when there is a vacancy. 

Now, sometimes, in offices that don’t have such a protocol or in 

offices where the agency head may decide that they want to get involved, we have seen different ways that those situations are handled. I can think of a situation where an agency head, meaning either a board or commission, has appointed an acting IG from outside the OIG’s office while they recruited for a permanent IG; and 

in those cases we were very fortunate. I think we established, 

CIGIE established a good dialogue with the acting IG to educate 

and inform on the IG role and how to carry out the mission, because there are some inherent questions about potential conflicts of 

interest dealing with audit independence and investigative independence, and those issues need to really be thought through very 

carefully; recusals may need to be thought about. 

There have been other situations in the past where, when there 

is a vacancy that arises, the appointing authority, be it the agency 

head or the White House or whoever it is, on occasion has reached 

out and asked for a detailee from another IG office to come in and 

serve as the acting IG while a permanent IG is being recruited; 

and again I think that is an option that could be explored, depending on the situation. It is something that we would be happy to dialogue on. 

Chairman ISSA. We appreciate that. 

We now recognize the gentlelady from New York, somebody who 

very well knows these issues, Mrs. Maloney. 

Mrs. MALONEY. Thank you very much, and I want to certainly 

welcome everyone on the panel, but particularly Mr. Miller, and 

congratulate you for your truly outstanding, creative, determined 

results-oriented work. You have really made all of us proud of you 

on both sides of the aisle. Also, Mr. Miller, you recently testified, 

46 

I believe, before this Committee on the GSA’s 2010 outrageous conference in Las Vegas. Is that right? 

Mr. MILLER. That is correct. 

Mrs. MALONEY. And during the previous administration you also 

conducted vigorous investigations related to the former GSA Administrator, Lurita Doan. That is also correct, right? 

Mr. MILLER. That is correct. 

Mrs. MALONEY. So your work in rooting out waste, fraud, and 

abuse seems to be just as vigorous, regardless whether there is a 

Republican or a Democrat sitting in the White House. Is that 

right? 

Mr. MILLER. That is correct. 

Mrs. MALONEY. Let me ask you this. Do you believe that you 

would not have been able the results that you achieved if you were 

an acting IG? 

Mr. MILLER. I don’t believe that. I believe I—I would hope I 

would do exactly the same things. 

Mrs. MALONEY. Okay, let me ask it in a different way to make 

my point. You are a member of a community of exceptional IGs, 

some of whom are in acting positions now, some of whom are permanent. You meet with them, you consult with them, you work and 

participate in many endeavors together, is that right? 

Mr. MILLER. That is correct. 

Mrs. MALONEY. Now, do you treat your colleagues any differently 

if they are a permanent or an acting IG? 

Mr. MILLER. No, I do not. 

Mrs. MALONEY. Do you give more weight to the opinions of a permanent IG, as opposed to an acting IG? 

Mr. MILLER. No. 

Mrs. MALONEY. Do you not decide to cooperate with an acting IG 

on whatever their goal is any differently than a permanent? Do you 

treat them the same? 

Mr. MILLER. I treat them the same. 

Mrs. MALONEY. During a hearing before this Committee in 2009, 

the IG of the Pension Benefit Guaranty Corporation, Rebecca 

Batts, gave very good testimony and she testified that the absence 

of a permanent IG is mitigated by, and I want to quote her statement because I think you’re important, ‘‘permanent senior executive audit and investigative staff who remain in place throughout 

the transition from one inspector general to the next.’’ 

So she sees the independence and the continuity of the professional staff as a really important aspect of the IG’s office. Would 

you agree with that? 

Mr. MILLER. I would agree. 

Mrs. MALONEY. And would you really basically agree with her 

statement that the staff can make a difference and is a very important part of getting the work done? 

Mr. MILLER. Finding well qualified staff is extremely important. 

Mrs. MALONEY. Ms. Fong, would you also agree with Ms. Batts’ 

statement? 

Ms. FONG. I believe that she has a very good point there, and I 

would add that our acting IGs, by definition, are part of that very 

qualified and experienced career staff with professional expertise. 

47 

Mrs. MALONEY. Well, in closing, I think we all can agree that a 

permanent, Senate confirmed IG is preferable. But we should not 

accept the idea that an acting IG and their staff are not capable 

of performing excellent, vigorous oversight and achieving results 

that are just as meaningful as permanent IGs. 

Thank you. 

Chairman ISSA. Thank you. 

I thank the gentlelady. 

Just in the nick of time returns the gentlelady from California, 

my colleague, Ms. Speier, for five minutes. 

Ms. SPEIER. Thank you, Mr. Chairman. 

I find this discussion kind of interesting and, with all due respect, a little long-headed. The truth of the matter is that all of us 

are temporary as members of Congress. We have two-year terms. 

To follow this line of logic, then, none of us can really be all that 

effective because we have temporary appointments. 

Chairman ISSA. Would the gentlelady yield? 

Ms. SPEIER. Of course. 

Chairman ISSA. But we cannot be dismissed, except for felonious 

behavior, during that two-year period. We serve at the pleasure of 

no one except the next election. So Mr. Miller, for example, served 

under the Bush Administration, confirmed, and then was in limbo, 

to use a Catholic term, until, I am sorry, he was appointed both 

times, but he found himself going from appointment to acting, and 

waited. 

So my point to you, and I will give you back the time—— 

Ms. SPEIER. Good. 

Chairman ISSA.—is part of the discussion today is if you serve, 

if you will, at the whims of the cabinet officer and dismissal offends 

no one in the Senate because they didn’t confirm you, versus you 

have been put up, vetted, confirmed by the Senate, and now a dismissal by the cabinet officer, regardless of party, reflects directly 

on those people who confirmed who typically the Senators want to 

know why. There can be a huge difference in the dismissal perception between an acting and a permanent, but I think the 

gentlelady’s point is right, which is that although IGs sort of have 

four-year terms for good behavior, at most we only have two-year 

terms for good behavior. 

I will reset the clock. 

Ms. SPEIER. All right. Thank you. 

So I guess my bigger concern is that this discussion should probably be directed at the Senate more so than at the President, because it is the Senate that oftentimes takes a long time to confirm 

individuals. And as I understand it, with you, Mr. Miller, you waited 270 days before you were confirmed by the Senate. But I don’t 

believe that in any way damaged your ability to do your job, did 

it? 

Mr. MILLER. I waited about nine months after I was first nominated in October of 2004, and then I was re-nominated in January 

2005. I remained as a prosecutor and assistant United States attorney during that time, until I was confirmed and sworn in as inspector general. 

Ms. SPEIER. So you were not acting during that time? 

Mr. MILLER. I was not acting, no. 

48 

Ms. SPEIER. I see. Okay. 

Let me address Acting IG Mary Kendall, who is presently at the 

Department of Interior. She has been there since 2009 in an acting 

role and has suspended or debarred 78 firms or individuals. She is 

also responsible for the investigation in the Department’s Mineral 

Management Service. So I don’t think we would at any point suggest that she hasn’t done a good job, in fact, a very effective job 

as an acting IG, correct? 

Mr. MILLER. I know Mary. I think the world of Mary and I think 

she has done a great job. 

Ms. SPEIER. Okay. Now, what I would like to concentrate on, and 

I can’t begin to tell you how important I think you are and the 

roles that you play. I want to focus on what we should be doing 

to make sure the recommendations you make are actually implemented, because for the talk of billions of dollars of potential savings that you are able to ferret out in any investigation, unless the 

Department volitionally takes action, there is no hammer. How do 

we give you more teeth is one question? Two, to what extent do 

your recommendations typically get embraced? 

And all of you can answer that. Maybe Ms. Fong would like to 

start, having been in your position for 10 years now, I guess, is 

that right? 

Ms. FONG. Let me offer a few comments on that. You are right 

that the IG role is to make recommendations and it is the agency’s 

role to implement changes, to accept the recommendations and 

move forward if they choose to do so. And I recognize that this 

Committee has taken a real interest in IG recommendations and 

agency actions. I think every year you ask all of us to report to you 

on the status of our recommendations, which ones have been accepted, implemented, and which ones remain open; and I think, actually, in terms of what can be done to move that process along, 

that is a tremendous step. By the fact that you ask us to report 

on it, we work within our agencies, we bring that issue up to the 

front. The agency head becomes aware of your interest and we see 

action happening as a result of that because the agencies want to 

move along on those open recommendations, they want a good report. I think that is very important. 

Ms. SPEIER. What additional powers should we give you? 

Ms. FONG. In general? 

Ms. SPEIER. In general. 

Ms. FONG. Well, I think you all have taken a huge step forward 

with the Data Act that you just passed in the House of Representatives. That includes a number of provisions that would really help 

IGs in terms of computer matching, data gathering under the Paperwork Reduction Act, and reforming some of the IG Acts. We are 

hoping that those provisions that relate to IG operations will get 

passed in the Senate as well. Those are things that we have wanted as a community for a number of years, so we are very heartened 

to see progress being made on that. 

Ms. SPEIER. Mr. Miller? 

Mr. MILLER. Well, when I was chair of the Legislation Committee 

for the National Procurement Fraud Task Force, we put together 

a white paper with a lot of recommendations regarding additional 

tools for inspectors general, and I have previously testified to other 

49 

recommendations. I would be happy to share those with you after 

the hearing. 

Ms. SPEIER. All right. 

And the gentleman from POGO? 

Mr. WIENS. So we have done a number of reports on the inspector general system, and in those reports we do have a detailed list 

of recommendations that we would like to see implemented. I don’t 

have them in front of me, but I would be happy to share with you 

later. 

Ms. SPEIER. All right, my time is about to expire. 

Mr. Chairman, I actually think that if we spend the kind of 

money we do creating offices of inspectors general, that when they 

make recommendations they should be required to be implemented 

by the departments. When I think of the National Transportation 

Safety Board and the good work they do, the really remarkable 

work they do, and yet all they can do is make recommendations, 

which can or cannot be actually taken up by the industries that 

they are investigating. So I don’t know what we can do as a Committee, but I think it is a waste of taxpayer funds if all of these 

recommendations that are being made and the potential savings 

that are suggested in the $87 billion range, if we can’t force these 

departments to take the actions that the inspectors general suggest. 

Chairman ISSA. I thank the gentlelady. 

Without objection, Mr. Miller’s and Mr. Wiens’ additional papers 

you referred to will be placed in the record as soon as received. Additionally, we will take the collated recommendations we have been 

collecting for the last four years from inspectors general, make 

them directly available to you and include them in the record, because it has been the policy under both Chairman Towns and myself to collect those, catalog them, because ultimately, even if they 

don’t have the authority, we do have the authority to see that the 

Administration adheres to them, so I would love to work with the 

gentlelady on that. 

With that, in closing, we will go to the chairman emeritus for a 

quick remark. 

Mr. BURTON. I just want to make it very clear that we have outstanding people working in the IGs offices, and I wasn’t inferring 

that there wasn’t any complaint with that. What I was saying, and 

I think the gentlelady alluded to it, was that the President has a 

responsibility when he becomes President to make the appointments that need to be made, especially when they have to be confirmed by the Senate. To leave a position as important as the IG 

for the State Department open for three and a half years is not a 

sign that that is a responsible move by the Administration. The 

President, you can excuse him for six months, you can excuse him 

for a year, or even maybe 18 months under certain circumstances. 

But three and a half years, almost to the end of his first term, assuming he has a second term, is just too long. So I would just say 

one more time that whatever president, whatever party, needs to 

be very attentive to making the selections for the various appointments as quickly as possible after his administration takes office. 

Chairman ISSA. I thank the gentleman. 

50 

We will now dismiss our first panel and reset for our second 

panel. Thank you. 

[Pause.] 

Mr. BURTON. [Presiding.] We will now start with the Honorable 

Mr. Werfel. Thank you very much for being with us today. You are 

Controller of the Office of the Federal Financial Management for 

OMB, and you are recognized for an opening statement. 

STATEMENT OF THE HONORABLE DANIEL I. WERFEL, CONTROLLER, OFFICE OF FEDERAL FINANCIAL MANAGEMENT, 

OFFICE OF MANAGEMENT AND BUDGET 

Mr. WERFEL. Thank you, Congressman Burton. 

Mr. BURTON. Oh, excuse me, one thing. We have to have you rise 

so we can swear you in. 

Do you swear to tell the whole truth and nothing but the truth, 

so help you God? 

[Witness responds in the affirmative.] 

Mr. WERFEL. Again, thank you, Congressman Burton, Chairman 

Issa, Ranking Member Cummings, and members of the Committee, 

for the invitation to discuss the status of Federal inspector general 

leadership with you today. 

The IG community plays an integral role in enhancing financial 

stewardship and accountability across the Federal Government. 

Through audits, investigations, evaluations, and inspections, the IG 

community provides critical analysis and oversight that strengthens program integrity, helps to eliminate waste, and holds our Federal projects and programs accountable to the public. 

In this era of fiscal constraints, the role of the IG is more important than ever in helping agency leadership identify and address 

management challenges and maximize the impact of our limited 

Federal resources. 

By way of background, the central role of the IG dates back to 

the passage of the Inspector General Act of 1978, over 34 years 

ago. The IG Act established the offices of inspector general within 

Federal agencies to conduct and supervise audits and investigations in agency programs, and to provide leadership and coordination for activities designed to promote economy, efficiency, and effectiveness, and prevent and detect fraud and abuse. 

More recently, the IG Reform Act of 2008 established the CIGIE, 

which is charged with, among other things, identifying, reviewing, 

and discussing areas of weakness and vulnerability in Federal programs and operations with respect to fraud, waste, and abuse, and 

developing plans for coordinated government-wide activities that 

address these areas. 

Under the Reform Act, the OMB Deputy Director for Management serves as the executive chairperson of the CIGIE, focused on 

facilitating the exchange of information between CIGIE and the 

agencies represented on it. However, this role is properly limited, 

given the importance of preserving the independence of the IGs 

and the CIGIE. That independence is one of the most central and 

crucial qualities of the IGs, allowing them to report objectively and 

directly to their agency heads on potential areas of concern or deficiency; and critical to this independence is the expertise and dedication of the civil servants that support the IGs, armed with extenVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
51 

sive and diverse expertise in areas such as accounting, auditing, 

law, management analysis, program analysis, public administration, and investigations. 

This Administration remains committed to supporting the work 

of the IG community, while respecting its independence. Beyond 

supporting the IGs, their indispensable work in safeguarding and 

overseeing taxpayer funds is consistent with the core commitment 

of this Administration to make the Federal Government more 

transparent and accountable to the American people than ever before. 

As dedicated stewards of the taxpayer dollars, the Government 

has a responsibility to provide information to the public on how 

Federal funds are being spent and to work tirelessly to root out 

and prevent waste, fraud, and abuse in Federal programs. Working 

with the IG community over the past three years, we have made 

tremendous strides towards these goals and work together to create 

a more efficient, effective, and accountable government across a 

number of areas. 

In the area of technology, the IG community has examined multiple facets of government-wide IT operations, complementing the 

Administration’s efforts to close over 1,000 data centers by the end 

of 2015 and in establishing the TechStat program, which has resulted in approximately $4 billion worth of savings and cost reductions in IT investments. 

In the area of audit and financial management, this year, for the 

first time since the passage of the Chief Financial Officer’s Act over 

20 years ago, 23 of the 24 applicable agencies obtained an opinion 

from independent auditors on their financial statements, and all 

but two of those opinions were clean. 

In contracting, the IGs have put a spotlight on suspensions and 

debarments where appropriate. Agencies have done the same. 

Armed with this new tool, the Federal Awardee Performance and 

Integrity Information System, or FAPIIS, to provide broadened access to information about the integrity of contractors, agencies are 

making better use of suspension and debarment authorities to ensure that contractors are playing by the rules and have the requisite integrity and business ethics to do business with the Government. 

As a final example, there is the area of improper payments, a 

leading priority in the Administration’s campaign to cut waste. 

Over the past two years, the Federal Government has avoided $20 

billion in payment errors by driving the improper payment rate 

down in Medicare, Medicaid, Pell Grants, SNAP, and other critical 

assistance programs. To complement our efforts, in March of this 

year, the IGs completed the first ever review of agencies’ efforts to 

reduce improper payments and provided critical recommendations 

that will help continued progress in this area. 

Overall, IGs have made significant contributions in overseeing 

and improving the Federal Government’s performance and accountability over the past 34 years, and I am confident they will continue to do so. In these challenging fiscal times, the Administration 

recognizes the importance of maintaining a strong, independent 

role for IGs, and we look forward to continuing to work with the 

52 

IG community to promote financial stewardship and accountability 

across the Federal Government. 

Thank you, and I look forward to answering your questions. 

[Prepared statement of Mr. Werfel follows:] 

53 


Insert offset folio 26 here 74454.026
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Insert offset folio 27 here 74454.027
55 


Insert offset folio 28 here 74454.028
56 

Mr. BURTON. Thank you very much, Mr. Werfel. 

As I understand it, you and Mr. Zients are responsible to coordinate between various controllers, investigators in the government, 

is that correct? 

Mr. WERFEL. We have somewhat of a limited role on the Council 

of IGs. We play more of an administrative role under the IG Reform Act. The sweet spot for the role of OMB, myself, and Acting 

Director Zients is to work with the inspector general community to 

understand what they are seeing, what trends they are seeing, 

what findings they are leading to to help inform OMB on the right 

policies to issue across government to help deal with those issues. 

That is the primary focus of our work with the IGs, is to learn from 

one another about how we can strategize as OMB to coordinate 

cross-government activities. And the IGs can learn from us in 

terms of what we are seeing so that they can focus their investigations appropriately. 

Mr. BURTON. Let me ask you a question. Mr. Zients is the acting 

head of OMB, right? 

Mr. WERFEL. That is correct. 

Mr. BURTON. Why hasn’t the Administration sent his name up 

for confirmation? Or have they? 

Mr. WERFEL. At this time I do not believe that his name has 

been submitted for nomination. I am unaware of the circumstances 

surrounding that issue. 

Mr. BURTON. Do know how long it has been since his name has 

been submitted? 

Mr. WERFEL. Again, I do not believe his name has been submitted. I do know that I believe that he became the acting director 

in January of 2012. 

Mr. BURTON. And the State Department has an acting inspector 

general. 

Mr. WERFEL. Yes, that is correct. 

Mr. BURTON. The thing I can’t understand is the President 

makes a recommendation to the Senate and the Senate reviews 

that, the proper committees, and then they either confirm them, 

the full Senate, or they reject them. The Senate does not have the 

opportunity to rule on that or to make a judgment unless it is submitted to them. I just don’t understand why, at this point, we still 

have these people that are in acting positions after three and a half 

years. I am not sure you can answer that question, because you are 

in a coordinating capacity, as I understand it, but it just seems to 

me that the responsibility that is required by the Constitution in 

the confirmation process is circumvented when the President has 

an acting director of any of these agencies for a long period of time. 

Do you have any idea, and I don’t know if you do or not, do you 

have any idea how many acting directors we have of various agencies right now, besides these two? 

Mr. WERFEL. In terms of inspectors general? 

Mr. BURTON. Inspectors general or OMB or anything else. 

Mr. WERFEL. Well, in preparing for this hearing, I was able to 

review the data and the information. I think as was reported on 

the first panel, there are, across the entire IG community, which 

is made up of 73 total Federal statutory IGs, there are currently 

57 

10 vacancies, and I believe there is an acting IG in each of those 

agencies. 

Mr. BURTON. Oh, I am sure. And I am sure that the acting IGs 

are doing a good job. It is just that the—you know, Harry Truman 

had a sign on his desk; it said the buck stops here. And if somebody is a temporary or non-confirmed person, it seems to me that 

the buck doesn’t get to the top guy. Once the President sends somebody up for confirmation and is confirmed, then the responsibility 

for that appointment rests with the President. So, as I said before, 

I would urge the President, or any president, to move as quickly 

as possible on moving toward the confirmation process and making 

the appointment as quickly as possible. 

I am not sure I have any other questions for you right now other 

than what I have already asked, and that is why the Administration has taken so long, particularly on the IG that deals with the 

State Department. I mean, the amount of money—the President is 

asking for $8.2 billion in extraordinary and temporary funding in 

Iraq, Afghanistan, and Pakistan, and this comes on top of $43.4 billion proposed for the core budget for the State Department USAID, 

which manages foreign aid. So all this money is being requested 

and we are going to have to act to make sure that those funds are 

there for those purposes. But I know, for one, and I think the 

Chairman feels the same way, we would like to have a permanent 

IG and other appointees as quickly as possible, and not wait three 

and a half years. 

And I am not saying this just because of President Obama. I am 

saying this for any president. And there have been other presidents 

that have delayed and delayed, and they shouldn’t do that. 

Does the gentlelady have any questions? 

Ms. SPEIER. I do, Mr. Chairman. 

I guess, Mr. Werfel, I am kind of confused. The Office of Management and Budget, what role do they have in terms of appointing 

inspectors general? 

Mr. WERFEL. Congresswoman, we do not have a role in that process. There is a process that was described in the first panel in 

which the CIGIE, or the Council of Inspectors General, has a committee that submits names for consideration to the appointing official, which in this case is the President. OMB does not participate 

on that committee. And then, once those names are submitted, they 

are submitted into a personnel process within the White House, 

again, a process that OMB does not participate in. We, as I have 

mentioned, play a substantive role in helping both coordinate inspector general activities and working together in terms of analyzing both patterns and trends across government and how to 

work collectively to root out fraud, error, and waste, but in the specific narrow point of the hiring and the appointments process, for 

that OMB does not play a role. 

Ms. SPEIER. So the purpose of this hearing is to discuss the appointments process and why it is taking too long in certain departments. So you have no role, your office has no role in that. 

Mr. WERFEL. That is correct. 

Ms. SPEIER. So why do you think you are here? 

Mr. WERFEL. I think I am here because the way the Inspector 

General Reform Act operates, there is—— 

58 

Ms. SPEIER. You don’t have to answer that question. 

Mr. WERFEL. Okay. 

Ms. SPEIER. It was more rhetorical. Let me ask you, though, 

since you are here, you were confirmed by the Senate as controller 

for the Office of Management and Budget. 

Mr. WERFEL. Correct. 

Ms. SPEIER. And for a period of time you were acting controller. 

Mr. WERFEL. That is correct. 

Ms. SPEIER. Did you feel that you were doing any less of a job 

because you were acting during part of that time? 

Mr. WERFEL. No, I do not. 

Ms. SPEIER. Was your authority at all diminished? 

Mr. WERFEL. From my personal experience, no. 

Ms. SPEIER. Now, as acting controller, you helped the Administration achieve record levels of openness and accountability 

throughout the Federal Government. So how successful would you 

say the Administration has been at fostering openness and transparency in the Federal Government? 

Mr. WERFEL. I think it has been a remarkable set of accomplishments that I don’t think get sufficient attention. You point to something like the Recovery Act. That law was enacted and demanded 

a set of accountability and transparency that the government had 

not seen before; it required information to be reported out to the 

public on spending of taxpayer dollars at a timeliness and level of 

detail that had not been seen before; and it required us to, in very 

quick order, develop IT solutions, data definitions, coordinate 

across multiple stakeholders, both grantees, contractors, and all 

host of recipients to make those very, very tough demands that 

both Congress and the President put on the Federal Government 

to make the Recovery Act the most transparent bill that has ever 

been enacted. It was a historic effort and really set a new bar for 

the manner in which the public has transparency into where Federal dollars are going. 

Ms. SPEIER. Now, I, like the majority, am troubled that the IG 

has not yet been appointed in State, and I hope that that appointment is made soon. But I think it is important to state for the 

record that the work of the IG’s office within State continues 

unabated and, in fact, if I am not mistaken, the budget of the IG’s 

office in State has more than doubled from $31 million during 

President Bush’s term to $65 million under President Obama’s 

term. So would you say that the office has the resources it needs 

to get the job done? 

Mr. WERFEL. Congresswoman, I am glad you raised the question. 

From my vantage point, where I sit at OMB, and my work with 

the inspector general, and I have a very close working relationship 

with Ms. Fong, there are a variety of different areas where OMB 

is in a position to help the IG community succeed. One of them is 

to work with them to better understand the resource needs of the 

inspector general community and to work with them to develop justifications that can survive congressional scrutiny for the levels 

that the President requests for the IGs. 

I would note, as a global matter, that while the President, work- ing with Congress, has cut essentially $1 trillion in discretionary 

resources in the budget, the IG community funding level has reVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00062 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
59 

mained constant across the IGs and has been somewhat protected 

from the other discretionary cuts that we are seeing. Specific to the 

State Department, the State Department’s enacted level in fiscal 

year 2011 was $59 million; in 2012 that went up to $62 million; 

and the President’s budget request for 2013 is $66 million. This is 

the place where OMB can step in and assist an IG in being as successful as possible and understanding what that resource calibration needs to be. 

I will add, as a final point, from where I sit, I think that the inspector general community is as healthy and as strong as I have 

ever seen it in my 15-year career at the Office of Management and 

Budget, and I have not detected in any way, shape, or form any 

diminution of those roles or responsibilities or impact when there 

is an acting IG in place. 

Ms. SPEIER. Thank you. My time has expired. 

Thank you, Mr. Chairman. 

Mr. BURTON. Thank you. 

My colleague, would you have any questions? 

Mr. CONNOLLY. I do. Thank you, Mr. Chairman. 

I would ask for unanimous consent that my full statement be entered in the record at this point. 

Mr. BURTON. Without objection. 

Mr. CONNOLLY. I thank the Chair. 

Welcome, Mr. Werfel. How long have you been in government, 

Mr. Werfel? 

Mr. WERFEL. Fifteen years. 

Mr. CONNOLLY. Fifteen years. Do you think we have made public 

service more and more attractive by the day? 

Mr. WERFEL. It is a challenging time to be a Federal employee. 

I think I have two reactions to that question. On the one hand I 

feel that the challenges our Country faces have never been more 

critical and never been more important. When I go to sleep at 

night, I think about the immense challenge that the Federal workforce has before it and how important that work is, and it is motivating and energizing to know that when you are serving your 

Country by serving the Federal Government, that that has real 

meaning and purpose, and it can be a truly motivating factor. 

At the same time, it is important that we are investing in our 

people effectively and, by doing that, recognizing the great work 

that they are doing, recognizing the important role that they play. 

And there are circumstances in which sometimes the Federal employee can be the punching bag. 

Mr. CONNOLLY. Well, let me just ask about that. Do you think 

that an unrelenting verbal assault in the form of disparagement 

about the value of public service about what Federal employees do, 

about the Federal workplace itself, coupled with a two-year pay 

freeze and the proposal of an additional three-year pay freeze, and 

changing the terms of pension, making it less attractive by requiring more up-front payment and fewer benefits at the other end for 

prospective employees to fund an unrelated piece of legislation, in 

this case unemployment insurance, and then asking another one 

for current employees the same thing, to fund an unrelated piece 

of legislation, transit funding; and now this Committee, just the 

other day, marked up its piece of the reconciliation, which will cost 

60 

Federal employees something in the order of magnitude of 78, $79 

billion. 

That combined with hearings sometimes entitled Is the Federal 

Government Too Big and Bloated? Are Federal Workers Inefficient 

and Incompetent? Doesn’t GSA’s Recent Excess in a Western Division Conference Sort of Characterize What We Are Saying, That 

All Federal Employees Are Kind of Like That? Might that have 

anything to do with morale and our ability to recruit and retain 

skilled workers such as, oh, I don’t know, IGs, for example? 

Mr. WERFEL. Congressman, I think a couple of reactions. One, 

the President has asked the Federal workforce to join others 

around the Country in tightening their belts and making certain 

sacrifices, given the economic challenges that we have; and time 

and again the Federal workforce has reacted and absorbed that 

belt-tightening in a manner that I think we can all be proud of in 

terms of still staying focused and passionate about what we do. I 

think the President wants to make sure that any approach we have 

is balanced; any approach we take towards deficit reduction is balanced; and that we are not writing the entire cost on the backs of 

one segment of the Country. 

With respect to your question about morale, it is really, really 

important for a healthy and sustainable Federal workforce, in carrying out all the critical services that we do, to make sure that we 

are recruiting effectively and we are attracting talented and effective people into the Federal workforce. So I understand your questions and I appreciate them. I agree that it is very important that 

we recognize Federal workers for their contributions and that we 

don’t disparage them unnecessarily, in particular if there is an isolated incident that raises the type of concerns that—— 

Mr. CONNOLLY. And I have one more question I am going to 

sneak in that is a follow-up to to something the Chairman said in 

his statement with which I agree, and that has to do with maybe 

highlighting the dysfunction of the Senate as part of the problem 

here. 

We had one IG who was totally uncontroversial, Michael Horowitz, at DOJ, and it took eight months to get his confirmation 

through. And in looking at the record, luckily, the number of vacancies in IG offices right now are comparable to the number of vacancies in 2004, as President Bush was gearing up for his re-election; and I think that perhaps suggests something about how onerous and difficult the Senate process has become, as the Chairman 

suggested. 

If the Chairman will indulge, I just want to give the witness an 

opportunity to answer that, and I am done. 

Chairman ISSA. [Presiding.] Do you have any comments disparaging the Senate? 

Mr. WERFEL. I do not have any comments. On a personal level, 

they confirmed me pretty quickly, so I am very appreciative of the 

Senate. 

The only thing I would remark is I would go back to Ms. Fong’s 

remarks in the first panel in which she talked about the complexity 

of the process of bringing an IG on board. There is obviously the 

Senate process; there is the desire to find highly qualified individVerDate Aug 31 2005 12:08 Jun 22, 2012 Jkt 000000 PO 00000 Frm 00064 Fmt 6633 Sfmt 6633 C:\DOCS\74454.TXT APRIL
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uals. So it is a complex terrain and one which should probably be 

evaluated over time. 

Chairman ISSA. Thank you. 

I will recognize myself for more or less one question. 

Mr. WERFEL. Please. 

Chairman ISSA. The first panel, to my pleasure, congratulated us 

for passing on a bipartisan basis the Data Act. The Data Act is 

fairly extensive. OMB has not been the greatest proponent of it 

under you and your predecessor. One of the questions is do you 

have any concerns you would like to share with us today? Obviously, Senator Warner, Mark Warner in the Senate, is a lead sponsor of an identical bill. The Vice President has been very supportive 

and been part of it at every point. Chairman Devaney has been 

part of it. I want to put you on the spot a little. I think Mr. 

Connolly did a good job of going completely off of the first panel’s 

discussions brilliantly, and I would like to do that because I think 

the Data Act deserves an understanding, if you are prepared to 

make comments on challenges you see, if any, that need to be addressed. 

Mr. WERFEL. Thank you, Chairman. I will make a couple of remarks about that in response to your question. I would like to first 

caveat my remarks by saying that we are reviewing the bill. The 

process to review the bill involves getting input from every agency 

and from a diverse segment within each agency, including lawyers 

and accountants—— 

Chairman ISSA. You can let the accountants and the lawyers 

worry me. 

Mr. WERFEL. Well, we are evaluating, and we will certainly be 

able to present to you a comprehensive reaction of both what we 

find as promising and areas where we think more work is needed. 

Let me also emphasize up front, before I go into the specifics, 

that the President and the Administration are in complete agreement with the objective of advancing transparency and accountability. The President played a critical role in that when he served 

in Congress on the Senate and cosponsored the Transparency Act, 

a bill that really had a monumental impact in thinking about Federal transparency, and one in which we are continuing to execute 

on today. 

I raise that because—and there are a variety of different other 

bills that we are executing on today that the President has signed 

and supported, like the Gipper Modernization Bill, as an example, 

and I already mentioned the Recovery Act earlier. We continue to 

execute on these various transparency bills, and in doing so we are 

investing in technologies, in new solutions, in growing our Federal 

workforce to understand better how to raise their game in terms 

of transparency. All those activities are ongoing and I want to 

make sure that people understand that we are not starting from 

scratch; we are starting with a very important foundation that has 

been built in advancing transparency. There is more information 

out there on websites like USASpending.gov and Recovery.gov in 

where our Federal dollars are going than ever in the Nation’s history, and I think that is an important starting point. 

Now, with respect to the Data Act—— 

62 

Chairman ISSA. By the way, we would agree with you particularly as to Recovery, which is really the only site I know of that 

has recipient reporting in a verifiable way. 

Mr. WERFEL. It is really transformative, and we are proud of the 

work that we did together with the Recovery Board and Chairman 

Devaney in achieving some of the results there. 

The final caveat is we are ready to roll up our sleeves and work 

with this Committee and with Congress on solutions that can further advance these important goals of transparency and accountability. And while we will get you a more comprehensive view on 

the Data Act, I think there are some important questions that I 

would raise, and you asked me about concerns, so I will start there. 

A first concern would be the Data Act, as I understand it, would 

create a new commission, and the question that we have is in a 

time where government is looking to streamline the complexity of 

our bureaucracy, is the way to move forward in enabling transparency is to add an additional layer of potential bureaucracy by 

creating a new organization? And it is not just that that organization would exist and make government bigger; it is the fact that 

that organization would have regulatory authority to issue standards. And now, as I am a recipient, already challenged by the complexity of having OMB requirements and agency requirements and 

we work hard to try to dovetail those together in an effective way, 

now you have added potentially a third entity—— 

Chairman ISSA. Well, let me just stop you for a second, because 

I think that is a good point and it has been one of the potential 

criticisms, along with push-back from those who would have to report, who currently receive the money and have less transparency 

because they don’t actually have to tell us where they spent it. But 

the reason for the commission in the bill as it stands now is very 

straightforward: you haven’t done your job. If you look at the transparency created while OMB had the authority to bring groups together, to provide the common standard, to make it all happen, the 

authority already was there. Congress, to a certain extent, is saying you can only wait so long with people saying we are going to 

do it. When you have a situation, as all of us on the dais, because 

most of us, beyond even the people here today, we were here for 

the beginning of Recovery Act. Chairman Towns was critical in ensuring that there was greater transparency and helping us ensure 

even that there was a portion of the Act that was earmarked for 

investigations and reporting, where initially we were just sending 

the money and then not giving them an unfunded mandate. So all 

of that we went through. 

The point is Chairman Devaney and the Recovery Act showed us 

something that was a good model. We added on to it some other 

reforms, but at the end of the day we believe that the reason that 

his model didn’t spread throughout the government is that this Administration and this government, including career professionals 

who work for and with you, simply have a lethargic view toward 

making this transition. 

Now, some of it may be that it is very hard to tell career people 

at all these agencies you have to do it. My view would be any bureaucracy that accomplishes its goal, if you then want to reorganize 

to eliminate it because it now can be taken on by a consolidation, 

63 

that is great. But I would propose to you that Senator Warner and 

myself are pretty strong, along with my Ranking Member, that we 

don’t see it happening if we simply say thou shall do it, but you 

will do it by some sort of agreement with existing assets. 

Your comment? 

Mr. WERFEL. I understand that perspective. Obviously, I would 

bring a different perspective to the table in terms of our pace and 

our accomplishments. 

The point that I was raising was simply a suggestion that we 

look at different alternatives. You are in an environment where the 

President has been pretty clear; he submitted a proposal to Congress to give reorganization authority. We are looking for different 

ways to streamline government. So I think it is a worthy question 

to explore whether the types of accountability that you are looking 

for can be achieved through existing instruments and existing organizations within government. Maybe so, maybe not. That is the 

type of dialogue we want to engage with you because of the importance we are placing on streamlining the complexity of government 

bureaucracy. 

Let me just add one more point. The other question I think is 

worth raising, again, without having monopoly on what the right 

answer is, but just a question worth raising, it has to do with what 

measures can we take within a bill like this to ensure that the impact and burden that is placed on the community, State and local 

governments as an example, universities, businesses that do work 

with the government, both small, medium, and large, what kind of 

measures can we put in place to make sure that we are balancing 

the important goal of transparency with the regulatory or information collection reporting burden that would be imposed on them as 

we advance this objective. 

Chairman ISSA. Sure. I appreciate that. 

Mr. WERFEL. And that is the type of question that we would 

want to—— 

Chairman ISSA. And we look forward to working with you on it. 

My time has expired. I will say, of course, that although we fully 

paid for the Data Act on this side, we are all aware that we are 

asking, in very few cases, for all new reporting. In almost every 

case what we are doing is saying we are going to consolidate reporting so that if you do multiple reports, it actually gets easier 

than it is because we are looking at not having to report and report 

in different formats to different agencies, which is one of the reasons for the Data Act. 

With that, I believe we go to the chairman emeritus for five minutes. 

Mr. BURTON. I don’t think I will take the full five minutes. 

First of all, Mr. Werfel, I think you have been a very good witness and I appreciate your forthcoming. We invited Mr. Zients 

down and for some reason he couldn’t make it, and, as I understand it, he is responsible for handling the IG portfolio for the 

White House. As I understand it, he is the executive chairman of 

the CIGIE and the President’s liaison to the IG community. 

What I would like to know is who makes the recommendations 

for new IGs to the President. I mean, somebody has to say to the 

President—and the reason I think we asked Mr. Zients to come up 

64 

here is because he is charged with the responsibility of this coordination process. So I think that many of us thought that maybe he 

was the one, or somebody working with him was the one that made 

these recommendations to the President. Do you have any idea who 

makes the recommendations? Because I am sure the President, 

with the vast bureaucracy we have, doesn’t have time to go through 

everything and try to pick out somebody that is qualified. So somebody is making those recommendations. Do you know who that is? 

Mr. WERFEL. Well, first of all, let me clarify, Congressman, that 

Mr. Zients is not the official within the White House that makes 

recommendations to the President on filling IG vacancies. As the 

acting director and leader within the Office of Management and 

Budget, that is not within his set of responsibilities. 

Mr. BURTON. Who does, do you know? 

Mr. WERFEL. As I mentioned earlier, and I think as Ms. Fong 

testified, there is one of two ways, I think, in which recommendations can be made to the President. One is that the CIGIE, the 

Council, has a process that was developed under the Inspector General Reform Act of 2008 to develop a list of potential qualified candidates for the President to consider; and then there is a Presidential Personnel Office within the White House which recruits 

and explores a variety of different candidates for positions throughout government, including inspectors general, and they can identify 

candidates and make recommendations to the President as well. So 

there is a separate function within the White House that OMB is 

not involved in, and particularly not with respect to inspectors general. 

Mr. BURTON. Since you and Mr. Zients, since you folks work in 

the coordinating process, between the various ones, you know when 

a new IG is taking office and you know the process and everything 

else. And I just don’t understand this because I have never been 

a president; I have never been in the Executive Branch. When a 

president takes office and this vast bureaucracy has to be filled 

with people who are appointed and being confirmed by the Senate, 

I would presume that organizations like CIGIE makes recommendations rather quickly so that the President can get on with 

his job of being the chief executive. I guess the thing I don’t understand is how there could be a number of vacancies, whether it is 

under Republican or Democratic administrations, that go on for, 

say, three or four years when these recommendations are made relatively soon after the President is sworn in. 

I don’t know if you can answer that or not, but it just seems to 

me that these recommendations are made by the Office of Personnel Management, or OMB, or whoever it is, or this organization 

CIGIE, relatively soon. So why is it that it takes so long for the 

President to make a recommendation to the Senate? 

Mr. WERFEL. Again, I don’t have the particular subject matter 

expertise or experience with respect to any given vacancy because 

I am not involved in that role. What I will say—— 

Mr. BURTON. Well, when you coordinate and Mr. Zients coordinates between various IGs, he obviously is working with some who 

are acting and some who are permanent. If they are acting, I just 

wonder if there is any question that ever arises why haven’t we 

65 

picked a permanent person for this and gotten them to the Senate 

for confirmation. 

Mr. WERFEL. I have never raised that question and I am not 

aware and I can’t speak for Mr. Zients as to whether he has. As 

I testified earlier, I have not and never experienced any diminution 

in the effectiveness of the IG, whether acting or not. 

Mr. BURTON. I guess my final question is there is a list of people 

that are vetted and they are recommended for various positions 

like the—and they are presented to somebody, maybe it is the chief 

of staff at the White House, who says to the President, this is the 

guy that ought to fill this job over at State. And you don’t know 

who that person is? 

Mr. WERFEL. Me personally, I have never been consulted or 

asked regarding a particular—— 

Mr. BURTON. Well, Mr. Chairman, I think that is one of the 

things that we ought to find out at some point, who is making the 

recommendations to the President and why there isn’t any action 

taken, especially after a period of two, three years. 

With that, I yield back. 

Mr. LANKFORD. [Presiding.] Thank you. 

With that, I yield to myself for five minutes. 

Mr. Werfel, welcome back again. Glad that you are here. And it 

is my same question on that. Why would we not try to press, 

whether it be OMB or the Executive Office, not try to go back and 

say, you know what, we haven’t filled the post of the Secretary of 

State’s IG ever; been here three and a half years, there has never 

been a nominee for that. The Interior position, if I remember that 

correctly, it was a month after the President took office that went 

vacant. There has never been a nominee there. 

What is the process of acknowledging we have a big hole here? 

Who then takes it from there to make sure that gets pressed so 

that gets done? 

Mr. WERFEL. It is an interesting question. I feel that I can only 

speak for myself and my role at OMB, and I have a very particular 

focus with respect to the manner in which I interact with inspectors general. And believe me, I am very busy and the inspector general community keeps me very busy in terms of identifying new 

areas for me to be coordinating across government. The mere fact 

and the practical reality is that as part of that footprint it has not 

historically involved advising on candidates. In some measure—— 

Mr. LANKFORD. Well, not just candidates; getting it done at all. 

I am not saying that your office would select the next person; just 

saying, you know what, this hasn’t been filled in three and a half 

years, we probably should get a person. That is the watchdog for 

the organization. 

And the reason I am bringing it up, let me just mention a couple 

of things. When I was in Afghanistan last August and we met with 

some folks from State Department and met with some folks from 

USAID, one of the things that came out immediately were some 

projects that are happening on the ground in Afghanistan. For instance, a hospital that was constructed that, after they constructed 

it they said, you know what, this region needs a hospital; then they 

determined we really don’t have doctors or nurses to man this longterm, we don’t have a hospital administrator. So we spent millions 

66 

and millions of dollars constructing a building in Afghanistan that 

now can’t be used and they can’t transition it over; a power plant 

that can’t be transitioned. So they said we have now shifted our 

focus now from actually constructing to trying to just maintain 

what we have constructed. 

Well, that is really the job of inspector general to jump into the 

middle of it and say we have an enormous amount of waste that 

is happening by the millions of dollars in some of our USAID programs. 

We just had a hearing with the OGR several, three months ago, 

discussing human trafficking that is happening with the State Department and DOD. That is something uniquely the IG can rise up 

and say, you know what, in some of our embassies with State we 

have employees there that are actually in debt bondage that we are 

bringing in from third-world countries and that are coming into 

this spot. Now, no one denied it; it is just a matter of what do we 

do with that. 

Those are issues that we need an IG in place that can help and 

go after that. The question becomes that is out there. We know 

about those things. What do we not know about because we have 

never had a permanent IG in those areas? And obviously you can’t 

answer that either, but there has to be someone to raise the flag 

to say at some point we have to fill this position so that we have 

a watchdog in place. 

Let me just raise one other issue on it. The one that is surprising 

to me, and I have obvious concerns on USAID, and some of it is 

because of the strategy, the Forward strategy that they have, and 

I am sure that has no political ramifications for USAID to have a 

theme of Forward. But for that program that is out there that intentionally is focused on transitioning money to other governments 

and to non-governmental organizations, 30 percent off of their 

budget, so now we have USAID that doesn’t have an inspector general transitioning 30 percent of its funds in its new Forward program to people that don’t have a watchdog. We are in trouble on 

that. We have a giant of an enormous amount of fraud and waste 

that is happening with no watchdogs now in two layers of that. 

Does that raise a red flag at all to you? 

Mr. WERFEL. Actually, it does not—I wouldn’t characterize it as 

a red flag, and here is why: because I challenge the premise of the 

question that there is no watchdog. The Inspector General’s Office, 

as has been talked about throughout this hearing, there are thousands of civil servant talented individuals that step in and often 

step in with great effectiveness in the event of the inevitable vacancies that occur. My work as controller at OMB focused on a set 

of activities, such as financial management, the financial statements, improper payments, internal controls; and from my reflection I have not observed any reduction in effectiveness of the IG 

community. In fact, if anything, they are keeping us as busy as 

ever in terms of the aggressiveness of their approach. There were 

charts that showed the increasing nature of their investigations 

and their—— 

Mr. LANKFORD. The Post Office things. I noted that. 

67 

Mr. WERFEL. They are as effective as I have ever witnessed in 

an IG community, and that is from the perspective that I have as 

controller in terms of the specific areas that I focus on. 

Mr. LANKFORD. Right. I understand that. But I also hear, every 

time that there is an issue that comes up in any department and 

it is a position that the Senate is dragging their feel on confirmation, the first thing the other side of the aisle rises up and says 

is, you know what, this wouldn’t be an issue if we had a permanent 

chair in that spot, if we had a permanent leader in that spot; this 

is a problem because we have never confirmed someone. And now 

the flip side of it, if no one has ever even been nominated, it is like, 

is trickling along, it is doing fine. 

So in some ways we are trying to have it both ways on this, trying to say, when the Senate hasn’t confirmed, that is really the 

cause of this; going back to things even like ATF, saying we have 

never had a permanent director there. We have all these problems 

with ATF because we have never had a permanent director. But 

now if we don’t have a permanent IG, well, that is fine. I just have 

a difficult time with that, looking at it both ways, and especially 

with areas with the USAID Forward program that is transitioning 

dollars even farther away from us. 

One other quick thought on it. I had a real concern on the transition of the Department of Interior IG, that a month into the Administration that goes vacant. We are dealing with the BP oil spill; 

we are dealing with brand new regulations on fracking; we are 

dealing with Bureau of Land Management. We are dealing with 

some very controversial issues on how we handle the future of energy with the Department of Interior and we have no permanent 

IG there. Do you know when there is going to be a proposal for a 

watchdog in an organization that much of our energy future is dependent on what happens in this entity? 

Mr. WERFEL. Again, I am not involved in that process, so I have 

no details. 

Mr. LANKFORD. Okay. 

With that, I would like to yield to Mr. Mica. 

Mr. MICA. [Presiding.] Thank you, Mr. Werfel. I will yield myself 

the remainder of the time here for some questions. 

How long have you been in your position? 

Mr. WERFEL. I was confirmed by the Senate on October 13th, 

2009, to be the controller at OMB. 

Mr. MICA. So you have been there pretty much since the beginning of the Obama Administration? 

Mr. WERFEL. Yes. And prior to that I served as a civil servant 

within OMB as the deputy and acting controller. And I started my 

career at OMB in 1997. 

Mr. MICA. And who do you report to? 

Mr. WERFEL. Jeff Zientz. 

Mr. MICA. And what is his position? 

Mr. WERFEL. He is the Deputy Director for Management and currently the Acting Director. 

Mr. MICA. But he is in an acting position? 

Mr. WERFEL. That is correct. 

Mr. MICA. I’m very, very frustrated with this Administration in 

particular. We had former Chairman Burton, just a few minutes 

68 

ago, lead this Committee. I have been on it since I came to Congress, now 19, I guess going on 20 years. Been through all kinds 

of administrations, Republican and Democrat. I do have to say this 

is the most difficult one we have ever had to deal with. The 

stonewalling is a great new art form with these folks. I chair the 

Transportation and Infrastructure Committee, and we have six 

subcommittees with broad jurisdiction, DOT, FAA, GSA, which has 

been on the news day and night. GSA isn’t under our jurisdiction 

legislatively, but we conduct oversight there too. 

The other thing, too, is with the czars and some of these positions that aren’t approved. It has made it doubly difficult to attain 

information. Our side is—and the founding fathers wanted it this 

way, they wanted oversight. Actually, the founding fathers, back in 

1808, created this Committee. The predecessor to this Committee, 

it is an interesting history because they didn’t trust the appropriators and they didn’t trust the authorizers who created the programs. They wanted someone else to investigate, make certain that 

things went right. 

You have an important role, too, in making certain that there is 

proper financial management, is that correct? 

Mr. WERFEL. Yes, that is my role. I coordinate financial management policy across the government. 

Mr. MICA. And since they don’t cooperate and they stonewall us, 

it has been almost impossible to get information. The only recourse 

we have had was going to the inspector generals, and now I see we 

have 10 vacancies, and I guess there are 4 of them that might 

make some progress. I see why you wouldn’t want to have permanent people in place who are getting information that could possibly be passed on to Congress. 

Doesn’t that sound like a pattern of further impediment to the 

process? I have two investigators here that I have sent out trying 

to get information. I have only been chairman for 14 months. Mr. 

Burton and I, we did Whitewater, we did Waco, we did Travelgate. 

We did every hearing you could possibly think of in this Committee 

because this is an important investigative committee of Congress. 

But never before have I ever seen an administration that not 

only will not give you the information. We have demanded time 

and time again. I could give you copies in the last 14 months trying 

to get information. The GSA fiasco, we did the very first hearing 

in an empty building that sat empty two blocks from the White 

House, asked for information about their administrative expenditures. Mr. Dunham, my subcommittee chairman, and I demand at 

every public hearing and in writing information. Then the only way 

these people got caught was through the IG. 

Of course, we had Mr. Miller, the IG, and I wonder a little bit 

about that, because when GSA held the outrageous, lavish taxpayer-funded fiasco in Las Vegas, it was reported by a former staffer of our committee that this was going on. The IG began an investigation. This occurred in October of 2010; it was reported to the 

IG in November; Mr. Miller went to work in May; he finished the 

report; he briefed GSA and other Administration officials in June; 

he briefed Kimberly Harris, counsel with the White House. Do you 

know Kimberly Harris? 

69 

Mr. WERFEL. I know Kimberly Harris, but I am not aware of particular communications. 

Mr. MICA. Well, that is another thing. I am wondering in this 

flow, your job is financial management, improving this. Do the IGs 

report back to you? Are you informed when there is waste, inefficiency, corruption, or any of the above? 

Mr. WERFEL. As a general matter, I review IG reports—— 

Mr. MICA. Did you review the IG report for GSA? 

Mr. WERFEL. I have read the IG report. 

Mr. MICA. Did Mr. Miller bring it to you also in May or in June 

of last year? 

Mr. WERFEL. No, he did not. 

Mr. MICA. He did not. So it went to Kimberly Harris is the information we got. Then nothing was done with it. We didn’t see it; it 

was never given to us. Now I know why they only wanted to give 

us one line. They gave us one line. That was their total administrative cost. 

Now, of course, we are not the brightest people in the world, but 

we figured out if you are spending 300 percent more in two and a 

half years, that would be a financial management issue, wouldn’t 

it be, Mr. Werfel, if you saw that increase in administrative expenditures? 

Mr. WERFEL. I would—— 

Mr. MICA. It would light up a few lights. If it doesn’t, then there 

is something wrong; somebody doesn’t have their lights on up here. 

But we are supposed to be protecting the taxpayers, you are at 

OMB in your position of financial management. So, one, there is 

something wrong if you know this person, if you are not getting the 

information. There is something wrong here if, first of all—now, 

thank God we had Miller there. 

Now, Miller never turned over anything to us; it took their whistleblower, our former employee, to go to Miller again, did it not? 

Are you aware that she went back to Miller and asked when, after 

the guy snubbed his nose, held a convention, the situation was 

done. Plenty of time to do an investigation; we had from November 

to May. Adequate time to do an investigation on the funny business 

in Las Vegas. I think that was enough time. They informed the 

GSA administrator at the time and other officials; they never let 

us know. We kept asking questions; show us what is going on to 

warrant these expenses. 

Then only because this outrageous actor, who was a senior executive service employee, thumbs his nose at everybody, he decides to 

do, what was it, a 17-day South Pacific vacation, Napa Valley? He 

picked the best locales. So he is off there and she blows the whistle 

again. And so Miller does his investigation. This is with an IG in 

place. I am not talking about how many agencies that don’t have 

an IG in place. So can you imagine what it is like out there when 

there is nobody minding the store? This is a very, very serious 

business. 

I think we need to even look at the law and making certain 

that—— 

Mr. CONNOLLY. Would the gentleman yield? 

Mr. MICA. No, not right now; I am on a roll. A little later. 

70 

Mr. CONNOLLY. Well, Mr. Chairman, I know you are on a roll, 

but—— 

Mr. MICA. No—— 

Mr. CONNOLLY.—we are still operating under the five minute 

rule here, are we not? 

Mr. MICA. No, not right now. 

Mr. CONNOLLY. You are clocking in at 8 minutes and 50 seconds, 

Mr. Chairman. 

Mr. MICA. I am on a second round. I just granted a second round. 

I will grant you the same, sir. 

Mr. CONNOLLY. I don’t mean to interrupt, but I wanted to make 

a point. 

Mr. MICA. I am trying to make some points here, and I can get 

some members to yield time. We can go through that routine. And 

I would be glad to extend the courtesy to you or any Democrat 

members because I think it is fair. And I am not trying to harass 

him, but I am just trying to make a point here. 

Again, this is very difficult for us to get information, even when 

there is an IG, is my whole point; and Mr. Miller was then asked 

again to investigate. More of this funny business was reported and 

the only way we found out about it was about a month ago when 

that report did become public. 

But don’t you think, Mr. Werfel, that you should, or somebody 

at OMB should, have their lights turned on when these reports are 

done? If you are in charge of financial management, which you 

are—and I don’t care whether it is President Obama, President 

Bush, Republican or Democrat. 

That is not the issue here. The issue is something is not working. 

And I just sent these guys down to Texas; stonewalled again by 

TSA. The only way we found out was through a whistleblower. The 

agencies give us the information. And I sent the IGs down there, 

and if it wasn’t for some of those guys intervening and then this 

Committee intervening, they told us they had 2800 pieces of equipment; it turned out they had 5700. They told us that they were 

taking care of the situation; yes, as our investigators are going in 

the front door, they are moving stuff out the back door, giving us 

a bogus report. 

So the inspector general in every administration and this Committee play an important role, and I want you to report back to the 

Committee or OMB and let us know would it be helpful, should we 

put in the law—obviously we are not clicking here. I go back and 

people say how can you let this go on? 

Well, it is very hard for me to explain. I am trying to get the information; I can’t get the information. There is not IGs in place to 

even help us. So you see the frustration, and we have to do a better 

job. We have to restore faith in this whole system. Just in the last 

few weeks, my goodness, people have lost faith in the government. 

Do you see my point, Mr. Werfel? Again, I hope we can make 

something positive out of this hearing. If you need additional help 

to move these along, anything we can do I would be glad to do. 

Mr. Connolly, did you seek recognition? Mr. Connolly is recognized for 11 minutes. 

Mr. CONNOLLY. I promise, Mr. Chairman, I won’t take that, and 

I thank you. 

71 

First of all, let me ask you, Mr. Werfel. You are in OMB. Did the 

Administration increase the budget for inspectors general? 

Mr. WERFEL. In some cases, yes. So, for example, I mentioned 

earlier the State Department inspector general budget has gone 

from roughly $59 million in 2011 to $66 million in 2013. 

Mr. CONNOLLY. But, I mean, just looking at the global figure. 

Mr. WERFEL. The global, it has increased. It certainly hasn’t decreased in any meaningful way. We were at $2.6 billion for IGs in 

2011, $2.7 billion for IGs in 2012, and roughly $2.7 billion is in the 

President’s budget for 2013. I think that is notable given that in 

just about every other area we are seeing significant cuts in discretionary programs and there is clearly evidence of ensuring that the 

cuts are not hitting the IGs. 

Mr. CONNOLLY. I would simply point out that many of my friends 

on the other side of the aisle talk about government costing too 

much, but there are some investments that have a return on them. 

For example, we know the additional resources being proposed for 

IG offices have a return on them, do they not? 

Mr. WERFEL. Absolutely. 

Mr. CONNOLLY. And recoverable funds in increased efficiency and 

in certainly uncovering waste, fraud, and abuse. 

Mr. WERFEL. And we saw statistics earlier in the hearing that 

pointed to particular savings and accomplishments. 

Mr. CONNOLLY. Would that not also be true, for example, of the 

General Accounting Office? 

Mr. WERFEL. Yes. The Government Accountability Office certainly has that type of impact in terms of having a positive—— 

Mr. CONNOLLY. This Committee has received testimony that, as 

a matter of fact, the ratio goes as high as $91 for every new $1 invested in GAO in terms of recoverable amongst the money; and yet 

we had GAO testify here that in terms of overall size GAO is down 

to a level that we haven’t seen since 1935. 

And then a third agency I could cite, IRS, there is something like 

$400 billion of owed taxes on the table, not new taxes, not slashing 

investments, money that is ours, that is owed the American people 

that is simply not collected for want of resources. We know that 

every dollar we invest in a new IRS agent has a direct return, is 

that not true, Mr. Werfel? 

Mr. WERFEL. And we have evidence of particular activities within 

the IRS who have a clear positive return on investment. 

Mr. CONNOLLY. So it puzzles me sometimes that, despite our 

rhetoric about wanting to reduce the debt and wanting to make 

sure that we get government right-sized, we are not willing to 

make the investment sometimes in proven entities that can recover 

either lost revenue or avoid inefficiencies and improper payments. 

You have testified before us many times, for example, on the improper payment issue. Very little pain associated with that; huge 

payoff. 

Final point I want to make is, and then I will yield back, Mr. 

Chairman, but the Chairman talked about GSA. I do not share the 

clarity of the Chairman about some of the conversations he cited 

with respect to the White House and Mr. Miller. A passing reference have you seen an IG report or the IG report hardly means 

72 

or is to be construed as recognition that full knowledge was made 

available. 

But I will point out we had the IG from GSA here; we had the 

outgoing administrator who fell on her sword and resigned as a 

matter of honor, after firing two deputies and putting a lot of other 

people on probation. 

But the testimony we heard from the IG of GSA was that he 

didn’t uncover this excess; Susan Brita, the deputy to the administrator, Martha Johnson, uncovered it. She is the one who referred 

it to the IG. And I asked in questioning here. The IG has been 

there since 2005 in place. He heard no evil, saw no evil, smelled 

no evil, found no evil, even though we know that this excessive 

celebration event preceded this Administration and continued in 

this Administration. 

But it wasn’t the IG, with 300 personnel at his command; he 

didn’t find this at all. Only when the administrator staff referred 

it to him, and then it took him nine months to come up with a report that, frankly, I think almost anyone else even on this panel 

could have written in half the time. 

So yeah, having an IG is important, but I don’t know that the 

IG is entirely the heroic figure sometimes painted. In this particular case, I think if he was doing his job, he could have uncovered this years before and maybe avoided the embarrassment of 

the situation. In any event, it was the appointed administrator and 

her staff that uncovered that excess, referred it properly to him, 

and he was able to investigate that. Is that your understanding as 

well, Mr. Werfel? 

Mr. WERFEL. I wouldn’t call myself an expert on all the moving 

pieces, but it is my understanding that in this particular case the 

deputy administrator referred the issue for further IG investigation. 

And if I could, I just want to make a broader comment about 

OMB’s role in inspector general report in response to both your 

questions and Congressman Mica’s. We take IG findings in their 

reports extremely seriously; in particular those that affect financial 

management. We work with other Federal agencies. Part of our 

role is to bring, for example, chief financial officers and other members of the community together to understand what is going on in 

IG reports across government; what we can learn from them. 

The GSA report is no different. We need to understand better 

what happened so we can prevent it from happening again, and we 

need to explore with the broader community what steps we can 

take to fix the issue and make government better going forward. 

That is the basic role that OMB has with respect to IG reports, 

and I think it is a very critical one and one that we have fostered 

a very strong relationship with Ms. Fong and other IGs around 

that shared mission of better government. 

Mr. CONNOLLY. Thank you very much. 

Mr. Chairman, I thank you for the time. 

Mr. MICA. Well, thank you. 

And I do want to try to conclude the hearing today, but I did 

again have this information that was provided on our witness. It 

says Danny Werfel is the Controller of the Office of Federal Financial Management within the Office of Management and Budget. He 

73 

is responsible for coordinating OMB’s efforts to initiate government-wide improvements in all areas of financial management. 

And again I used a GSA example, and we did in fact have a 

former staffer who works at GSA blow the whistle and an investigation was conducted, and properly so. That started in November 

after the October incident in 2010. In May, GSA and others were 

informed, the administrators. We had the witnesses here. Nothing 

was done. In June the White House was advised. You said you 

knew the counsel but didn’t know the incident or didn’t read the 

report. 

My whole point here was these were very serious allegations of 

abusive use of taxpayer dollars. Okay, so it is reported. Nothing is 

done. The guy takes off and launches another wasteful scenario, 

and Susan Brita again blows the whistle and the inspector general 

begins an investigation. But somehow all of the cylinders don’t 

seem to be clicking and you just got through testifying to the gentleman from Virginia that you get these reports and they are taken 

seriously. And my questioning was do we require, is this required. 

Maybe we should require that this goes to OMB and to you all. I 

guess you are just doing this as a matter of course. 

What I am trying to do is to get things to click so that some action is taken. That had the potential, I think, even at that stage 

for some criminal referrals. I don’t know all the details on it, but 

please, when it comes to financial initiating government-wide improvements of all areas of financial management, you have an 

agency spending money like that, it raises questions. And my point 

was with an inspector general in place. 

But here we have other agencies, at least half a dozen, and we 

have some with 1,000 days, that is three years, nearly three, four 

years, four years at the State Department; huge operations without 

somebody in charge on a permanent basis. I deal with acting administrators and I am telling you it is difficult. I have one right 

now in FAA and we have a tough situation there. 

So my point is not to give you a hard time, maybe a little bit, 

but to see how we can improve this whole process. Make certain 

you have the tools. I have no problem with giving you additional 

funds. It was testified you are going from $2.6 billion to $2.7 billion. That is fine. You can have a good rate of return when you are 

doing your job; it is an $18 return on $1 spent, I believe. So I could 

double the money if I could get more benefits back and better management, cut the debt and spending for the taxpayer. So that is my 

point today. 

We do have an important responsibility here, because sometimes 

the authorizers don’t get it right; sometimes the appropriators just 

spend money and don’t get it right. We are that third entity that 

the founding fathers to make certain, you look at other governments, they have somewhat of a similar structure, but none of 

them have, again, this filter like our Committee that keeps going 

after waste, fraud, and abuse, which is so important keeping the 

system straight and making it work better and more efficiently. 

So with that commentary, I thank you for your participation. I 

would like you to also provide the Committee with additional information. We will be sending you written requests and I wish you 

would respond. 

74 

The record will be left open for additional comments and responses. 

With that being said, and I see no further members here, the 

House Government Reform and Oversight Committee will stand 

adjourned, and I thank our witnesses for taking time to appear before us today. This Committee stands adjourned. 

[Whereupon, at 12:43 p.m., the committee was adjourned.] 

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