[Senate Hearing 106-691]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 106-691
 
  LEGISLATIVE PROPOSALS AND ISSUES RELEVANT TO THE OPERATIONS OF THE 
                           INSPECTORS GENERAL

=======================================================================


                                HEARING

                               BEFORE THE

                              COMMITTEE ON
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 19, 2000

                               __________

      Printed for the use of the Committee on Governmental Affairs



                     U.S. GOVERNMENT PRINTING OFFICE
66-197 cc                    WASHINGTON : 2000
_______________________________________________________________________
For sale by the Superintendent of Documents, Congressional Sales Office
         U.S. Government Printing Office, Washington, DC 20402





                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE V. VOINOVICH, Ohio            RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
               William M. Outhier, Investigative Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
                   Kenneth R. Boley, Minority Counsel
                     Darla D. Cassell, Chief Clerk




                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Thompson.............................................     1
    Senator Collins..............................................     2
    Senator Levin................................................    22

                               WITNESSES
                        Wednesday, July 19, 2000

Joshua Gotbaum, Executive Associate Director and Controller, 
  Acting Deputy Director for Management, U.S. Office of 
  Management and Budget..........................................     5
Gaston L. Gianni, Jr., Inspector General, Federal Deposit 
  Insurance Corporation, and Vice Chair, President's Council on 
  Integrity and Efficiency; accompanied by Patrick E. McFarland, 
  Inspector General, U.S. Office of Personnel Management, and 
  Kenneth M. Mead, Inspector General, U.S. Department of 
  Transportation.................................................     7
Nicholas M. Gess, Associate Deputy Attorney General, U.S. 
  Department of Justice..........................................    10

                     Alphabetical List of Witnesses

Gess, Nicholas M.:
    Testimony....................................................    10
    Prepared statement...........................................    46
Gianni, Gaston L. Jr.:
    Testimony....................................................     7
    Prepared statement...........................................    34
Gotbaum, Joshua:
    Testimony....................................................     5
    Prepared statement...........................................    29

                                Appendix

Questions for the record submitted by Senator Collins and 
  responses from Mr. McFarland...................................    27
Copy of S. 870...................................................    50
Letter to Senator Collins from Kenneth A. Konz, Focal Point for 
  the DFE OIGs, dated March 21, 2000.............................    72
Letter to Senator Levin from Gaston L. Gianni, Jr., dated August 
  7, 2000........................................................    76


                    LEGISLATIVE PROPOSALS AND ISSUES



                   RELEVANT TO THE OPERATIONS OF THE



                           INSPECTORS GENERAL

                              ----------                              


                        WEDNESDAY, JULY 19, 2000

                                       U.S. Senate,
                         Committee on Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:08 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Fred 
Thompson, Chairman of the Committee, presiding.
    Present: Senators Thompson, Collins, and Levin.

             OPENING STATEMENT OF CHAIRMAN THOMPSON

    Chairman Thompson. Let's proceed. Thank you all for being 
here this morning.
    It is not the easiest morning on any of us to deal with any 
regular business, but our friend and colleague, Senator 
Coverdell, would expect us to proceed.
    This morning, the Governmental Affairs Committee is holding 
a hearing on two legislative proposals relating to agencies' 
Inspectors General. The IGs are the front-line troops in 
combating fraud, waste, and abuse, and improving the 
performance of Federal agencies.
    A report released last week revealed that actions by the 
IGs resulted in the recovery of $4 billion in misspent funds 
last year and identified another $8.2 billion in additional 
savings. The report also revealed that IG investigations 
resulted in more than 13,000 successful prosecutions and 1,200 
civil actions.
    Inspectors General are also an important resource for 
congressional oversight. This Committee has come to rely on 
them more and more. For example, IGs regularly update us on the 
top-ten most serious management problems faced by their 
agencies. In fact, we just reported a bill that makes these 
top-ten reports statutory. Likewise, the IGs have been a great 
help to us in assessing their agencies' implementation of the 
Government Performance and Results Act.
    Today, we will consider two legislative proposals designed 
to help make the Inspectors General even more effective. One is 
S. 870, a bill introduced by Senator Collins last year that 
would make a number of amendments to the Inspectors General Act 
of 1978. The other is the administration proposal to grant 
permanent law enforcement authority to some IGs.
    Senator Collins' bill would establish a 9-year term of 
office for IGs, require periodic external management reviews of 
their operations, and change the current IGs' semiannual 
reports to annual reports. In addition, it would prohibit IGs 
from receiving cash awards from their agencies, raise the pay 
level of presidentially appointed IGs, and consolidate some of 
the smaller IG offices.
    The administration proposal would authorize the Attorney 
General to delegate to presidentially appointed IGs and their 
investigators permanent authority to carry firearms, to make 
arrests without warrant in appropriate circumstances, and to 
seek and execute search warrants. They currently exercise these 
authorities under temporary deputations from the U.S. Marshals 
Service.
    The IGs would be required to establish an external review 
process to ensure adequate safeguards and management procedures 
over the exercise of these authorities.
    I look forward to exploring at today's hearing how we can 
strengthen and improve the IGs and their operations.
    Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you very much, Mr. Chairman. I join 
the Chairman and, indeed, all of my colleagues in mourning 
Senator Coverdell today. He was an outstanding Senator, and it 
is very difficult to go forward with our business. But I, too, 
know, as the Chairman says, that that is exactly what he would 
want us to do. He was so devoted to the Senate and so 
energetic. We will miss him greatly.
    Mr. Chairman, I do want to thank you for scheduling this 
important hearing today to examine a variety of legislative 
reforms and issues regarding the Inspectors General, including 
legislation that I have introduced. For more than 20 years, the 
Inspectors General have been the watchdogs for Congress and the 
taxpayers in the ongoing fight against government waste, fraud, 
and abuse.
    I have been very active on issues pertaining to the IGs for 
a number of years and, most recently, in my position as 
Chairman of the Permanent Subcommittee on Investigations. For 
example, the Subcommittee has worked very closely with June 
Gibbs Brown, the Inspector General for the Department of Health 
and Human Services, in our ongoing investigation of Medicare 
fraud. Most recently, just a couple of weeks ago, Susan 
Gaffney, the Inspector General for the Department of Housing 
and Urban Development, testified before the Subcommittee about 
the efforts of her office to halt the proliferation of the 
nationwide phenomenon of property flipping, which is a kind of 
mortgage fraud. She brought to our attention the very lax 
controls by the Department in this regard.
    Throughout all of my dealings with the Inspectors General, 
I have been impressed with the professionalism and commitment 
to public service that the hard-working members of the IG 
community have repeatedly demonstrated. There can be very 
little debate about the fact that the American people have been 
well served by the IG community's efforts over the past 22 
years.
    During this time, the IGs have put forward thousands of 
recommendations to Congress, which cumulatively have saved 
billions of dollars. In fact, during just the first 10 years 
after the original IG Act was signed into law, it was estimated 
that the Inspectors General had identified a total of $100 
billion in savings through their audits of government programs 
and procedures.
    Furthermore, as Federal law enforcement personnel, 
Inspectors General have conducted countless investigations. 
Successful investigations have recovered billions of dollars 
for the Federal Government from unethical companies and 
individuals and have resulted in numerous criminal 
prosecutions, debarments, exclusions, and suspensions. Taken as 
a whole, therefore, the Inspectors General have a very strong 
record of accomplishment, and the American people have been the 
principal beneficiaries of their work.
    The record of the IGs is not, however, without blemish. For 
example, the very successful overall record was tarnished by 
the activities of the Treasury Department's Office of Inspector 
General. After an extensive investigation, the Permanent 
Subcommittee on Investigations found that the Treasury 
Department IG had actually violated Federal law in her award of 
two sole-source contracts to people with whom she was 
acquainted. The Subcommittee concluded that the Treasury IG 
failed to meet the high ethical and performance standards 
expected of an IG, and shortly after our hearing, she did, in 
fact, resign.
    I do want to emphasize, however, that problems like the 
ones that we found in the Treasury IG's office are the 
exception. They are certainly not the rule.
    We have not found a widespread pattern of abuse by the IGs, 
and, indeed, just the opposite is the case. However, an 
Inspector General is not just like any other government 
manager. Inspectors General are the very officials in 
government responsible for combating waste, fraud, and abuse in 
Federal programs. As such, they have to be held to the very 
highest of standards.
    Again, I want to stress that my experience with the IGs, 
with this one exception, has been a tremendous experience, and 
I think they serve the public very well.
    I have introduced legislation that would make a number of 
changes in the IGs law. They were shaped by my experience with 
the IGs as well as the one unfortunate experience with the 
Treasury IG, as well as extensive consultations with the IG 
community, with GAO, with private sector organizations, and 
with the Department of Justice.
    The key elements of my legislation are designed to enhance 
the accountability and the independence of the IGs. For this 
reason, the legislation includes a 9-year renewable term and a 
provision against accepting cash awards or bonuses. To offset 
that prohibition, my bill includes a proposed pay increase for 
the IGs to prevent situations which occur now, where in some 
agencies the deputy actually makes more than the IG due to cash 
awards and bonuses.
    To give the IGs more flexibility in allocating resources, 
my legislation would streamline their semiannual reporting 
requirement, and, importantly, the bill also requires an 
external review of the Inspector General's operations by the 
General Accounting Office or another neutral third party 
periodically. That would help Congress make sure that someone 
is watching the watchdogs.
    Finally, we will hear today testimony about the issue of 
granting statutory law enforcement authority to the 
presidentially appointed IGs. This is a very important issue, 
particularly in light of recent developments. From my work with 
the IG community and also with the IG office at DHHS, I know 
that increasingly IGs are called to investigate dangerous 
situations. On the other hand, we want to make sure that we 
strike the right balance in this area.
    Again, Mr. Chairman, I thank you for convening this hearing 
today. I hope the Committee will act to approve S. 870 and 
other issues of concern to the IG community this year.

                 PREPARED STATEMENT OF SENATOR COLLINS
    Mr. Chairman, I want to thank you for holding this important 
hearing today to examine a variety of legislative reforms and issues 
regarding the Inspectors General. For more than 20 years, the 
Inspectors General have been the ``watchdogs'' for Congress and the 
taxpayers in the ongoing fight against government waste, fraud, and 
abuse.
    I have been very active on issues pertaining to the Inspectors 
General for a number of years, most recently in my position as Chairman 
of the Permanent Subcommittee on Investigations. For example, the 
Subcommittee has worked very closely with June Gibbs Brown, the 
Inspector General for the Department of Health and Human Services, in 
our ongoing investigation of Medicare fraud. Most recently, Susan 
Gaffney, the Inspector General for the Department of Housing and Urban 
Development, testified before the Subcommittee about her efforts to 
halt the proliferation of the nationwide phenomenon of property 
flipping.
    Throughout all of my dealings with the Inspectors General, I have 
been impressed with the professionalism and commitment to public 
service that the hardworking members of the IG community have 
repeatedly demonstrated. And there can be very little debate about the 
fact that the American people have been very well-served by the IG 
community's efforts over the last 22 years.
    During this time, Inspectors General have put forward thousands of 
recommendations to Congress, which cumulatively saved literally 
billions of dollars. In fact, during just the first 10 years after the 
original Inspector General Act was signed into law, it was estimated 
that the Inspectors General identified a total of $100 billion in total 
savings through their audits of government programs and procedures.
    Furthermore, as Federal law enforcement personnel, Inspectors 
General have conducted countless investigations. Successful 
investigations have recovered billions of dollars for the Federal 
Government from unethical companies and individuals, and have also 
produced numerous criminal prosecutions, debarments, exclusions, and 
suspensions. Taken as a whole, therefore, the Inspectors General have a 
very strong record of accomplishment, and the American people have been 
the principal beneficiary of their work.
    The record of the Inspectors General is not, however, without 
blemish. For example, this successful record was tarnished by the 
activities of the Treasury Department's Office of Inspector General in 
1997. After an extensive investigation, the Permanent Subcommittee on 
Investigations found that the Treasury Department Inspector General 
violated Federal laws in the sole-source award of two consulting 
contracts, engaged in a pattern of careless management, paid for work 
unauthorized, and subjected two U.S. Secret Service agents to an 
unwarranted investigation and negative publicity. The Subcommittee also 
found that the Treasury Inspector General misled Congress about the 
nature of this investigation and that official documents were 
destroyed. The Subcommittee concluded that the Treasury Inspector 
General failed to meet the high ethical and performance standards 
expected of an Inspector General. The Inspector General resigned 
shortly after our hearings were completed.
    Let me stress that, in my view, problems like the ones in the 
Treasury Inspector General's office are not widespread in the Inspector 
General community. However, an Inspector General is not like any other 
government manager. Inspectors General are the officials in government 
responsible for combating waste, fraud, and abuse in Federal programs. 
And as such, Inspectors General should be held to a higher standard. To 
do their job effectively, Inspectors General must be above reproach, 
must set an example for other government managers to follow, and must 
not create situations where there is even the appearance of 
impropriety. Credibility and effectiveness are lost when the office 
charged with combating waste and abuse engages in the kind of activity 
that the Inspector General is responsible for deterring.
    It was with some of these principles in mind that in 1998, I 
sponsored legislation, S. 2167, that proposed a series of changes and 
reforms to the Inspector General Act of 1978. Last year, I introduced 
similar IG reform legislation, S. 870, which is one of the issues 
pending before the Committee this morning.
    The key elements of my legislation are designed to enhance the 
accountability and the independence of the Inspectors General, such as 
the renewable 9-year term of office and a prohibition against accepting 
cash awards or bonuses. To offset the prohibition against accepting 
bonuses, my bill includes a proposed pay raise. To give Inspectors 
General more flexibility in allocating resources, my legislation 
streamlines their semiannual reporting requirement by requiring only 
annual reports to Congress. And, to increase accountability of the 
Inspectors General, the bill requires external review of OIG operations 
by the General Accounting Office or another neutral third party.
    Finally, as I noted in 1998 when I introduced S. 2167, legislation 
to grant statutory law enforcement authority to presidentially 
appointed Inspectors General deserves careful consideration. The 
question of how best to provide Federal law enforcement professionals 
with the tools they need and deserve is important, and I look forward 
to hearing from our witnesses about this issue today.
    In closing, again, Mr. Chairman, thank you for convening this 
hearing and I look forward to working with you on S. 870 and other 
issues of concern to the Inspectors General community.

    Chairman Thompson. Thank you very much. Thank you for your 
longstanding leadership in this area.
    Our panel today consists of Joshua Gotbaum, the Executive 
Associate Director and Controller at the Office of Management 
and Budget; Nicholas Gess, Associate Deputy Attorney General at 
the Department of Justice; Gaston Gianni, the Inspector General 
for the FDIC and the Vice Chair of the President's Council on 
Integrity and Efficiency. Mr. Gianni is accompanied by Kenneth 
Mead, who is the IG for the Department of Transportation, and 
Patrick McFarland, the IG for the Office of Personnel 
Management.
    Mr. Gotbaum, do you have an opening statement?

 TESTIMONY OF JOSHUA GOTBAUM,\1\ EXECUTIVE ASSOCIATE DIRECTOR 
  AND CONTROLLER, ACTING DEPUTY DIRECTOR FOR MANAGEMENT, U.S. 
                OFFICE OF MANAGEMENT AND BUDGET

    Mr. Gotbaum. Yes, Mr. Chairman, I do. I will be brief. I 
made the main points in the written statement, which, with your 
permission, I would ask be included in the record.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Gotbaum appears in the Appendix 
on page 29.
---------------------------------------------------------------------------
    Chairman Thompson. It will be made part of the record.
    Mr. Gotbaum. First of all, Mr. Chairman and Senator 
Collins, I want to just say thank you. Like you, we appreciate 
and consider extremely important the activities of the IGs. We 
consider it extremely important that periodically those 
activities be reviewed, by the IGs, by the rest of the 
administration, and by the Congress, to see what we are doing 
that works and what we need to make it work better. And that is 
the spirit in which we take your consideration of our proposal 
regarding law enforcement authority and Senator Collins' bill, 
S. 870.
    If I may speak first on the issue of our law enforcement 
proposal. To be honest, Mr. Chairman, after you very graciously 
confirmed me as controller, this is an issue which I then came 
to understand. This is an issue which has been around for a 
very long time.
    I want to start by saying what this is not. This is not an 
issue of whether or not IGs should work in law enforcement. 
They do and they have for 22 years, ever since you created 
them. Senator Collins was gracious enough to mention June Gibbs 
Brown and the work at HHS in terms of Medicare fraud. There are 
other equally impressive activities: Child support enforcement, 
food stamps, work at the border on border control that involves 
money laundering and drug enforcement, etc. So the issue here 
is not whether the IGs should work in law enforcement. They do. 
We are not proposing any expansion of their activities in law 
enforcement. Nor is the issue whether or not this law 
enforcement activity should be under the supervision of the 
Attorney General, the supreme law enforcement officer of the 
land. It should be. It is. It has been. Under our proposal it 
would continue to be.
    We think the issue instead is whether or not the process by 
which the Attorney General exercises oversight can, in fact, be 
streamlined. We view this as a good government, nonpartisan 
issue.
    Historically, IGs who work on law enforcement issues get 
deputized on a case-by-case basis. They went to the Marshals 
Service and said: Can Mr. X or Ms. X working on the following 
case get authority? And the Marshals Service would review it 
and grant it.
    That became sufficiently cumbersome so that several years 
ago the Department of Justice, the Deputy Attorney General 
said, ``Why don't we do this on a year-by-year basis?'' And so 
what the Department of Justice does now is they give blanket 
authority on a year-by-year basis to individual IG agencies.
    What we would like to do now, and what we have proposed, is 
to take the next step and to turn the presumption the other 
way. If those agencies that have received this blanket 
authority by the Department of Justice, let them have that 
authority now on a permanent basis; but, one, let us keep it 
under the supervision of the Attorney General, who can revoke 
it; and, two, let us supervise and make sure that we have an 
ongoing professional peer review process of how the IGs use 
this authority.
    So, Mr. Chairman, Senator Collins, we view this as a good 
government measure, a measure which respects the 
professionalism of the IGs, reduces what is, frankly, an 
administrative burden on the Department of Justice, and lets 
the IGs continue to do the work that we all recognize and think 
is extremely important.
    We hope that you would consider this proposal expeditiously 
because the Department of Justice, as I think Mr. Gess will 
testify, was hoping that we might reduce the administrative 
burden on them by arranging such a procedure. So I hope you 
will consider this legislation and hope you consider this 
expeditiously this year.
    Turning to the broader question, Mr. Chairman, I think it 
is important that we commend and thank Senator Collins for her 
work. It is extremely important that we review the activities 
of the IGs because although we support them, but there is no 
institution that shouldn't be reviewed, that you shouldn't ask 
questions about. And so we view S. 870 as a very good start to 
that review.
    There are provisions in it we support. We agree with 
Senator Collins and the IG community agrees that there ought to 
be limitations on bonuses by agency heads. It is simply 
undermining the notion of independence to do that. And we agree 
that there ought to be some recognition that limiting bonuses 
has an effect on IG compensation.
    We have concerns about the 9-year fixed term. We just don't 
think that that is something which is necessary to guarantee IG 
independence, and we think that, paradoxically, it might have 
the effect of making it harder to recruit quality people if you 
create an expectation that you have got to be in the job for 9 
years. And so we hope that we can have an ongoing discussion.
    The last point I hope to make about this is that since this 
kind of legislation doesn't come along very often, we hope that 
the Committee would, also take the opportunity to address some 
issues that the bill does not address. We have found working 
with the IGs that there is not clarity with regard to the role 
of the IG vis-a-vis the agency head in terms of involvement in 
agency management.
    When I was Assistant Secretary of Defense, the then-IG of 
the Department of Defense, Eleanor Hill, came to me and said, 
we can be helpful to you because we know a lot about program 
management, and you are trying to improve the management of the 
Department of Defense, and we can work together. And I said to 
her then a question which I know every agency head asks, which 
is: Fine, I accept that. If I work with you and don't follow 
everything that you recommend, what then?
    And so what we have found is that different IGs have 
different answers to that question. Some IGs take the view that 
their independence requires them to step back from agency 
management, from making suggestions about improving agency 
management, from involvement in the agency, because that is how 
they are independent. Other IGs say no, that is my job.
    And so one thing we would hope is that before the Committee 
turns out a final bill, you would consider this issue and 
address whether or not it makes sense to provide greater 
guidance to IGs as to what their ongoing role ought to be with 
the agency head.
    My time is limited, I understand, and there are going to be 
plenty of folks to have this opportunity, but I just wanted to 
say in closing: One, thanks; second, if it is not possible to 
have the more sustained debate on S. 870 that we think it 
deserves, we hope the Committee could find a vehicle this 
session to enact the proposed streamlining of the law 
enforcement authority into law.
    With that, thank you very much.
    Chairman Thompson. Thank you very much.
    Mr. Gianni, did you have an opening statement?

   TESTIMONY OF GASTON L. GIANNI, JR.,\1\ INSPECTOR GENERAL, 
    FEDERAL DEPOSIT INSURANCE CORPORATION, AND VICE CHAIR, 
PRESIDENT'S COUNCIL ON INTEGRITY AND EFFICIENCY; ACCOMPANIED BY 
    PATRICK E. MCFARLAND, INSPECTOR GENERAL, U.S. OFFICE OF 
 PERSONNEL MANAGEMENT, AND KENNETH M. MEAD, INSPECTOR GENERAL, 
               U.S. DEPARTMENT OF TRANSPORTATION

    Mr. Gianni. Yes, Mr. Chairman, thank you.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Gianni appears in the Appendix on 
page 34.
---------------------------------------------------------------------------
    Mr. Chairman, first of all, before I start, I just want to 
let you know that we share your loss of the Senator, the fine 
Senator from the State of Georgia. And I know it is difficult 
to proceed under those circumstances, but we certainly 
appreciate your leadership and the Committee's and Senator 
Collins' leadership in bringing these hearings today.
    I am pleased to be here to discuss legislative proposals 
and issues relevant to the operations of the IG community. 
Kenneth Mead, to my left, is the Chairman of the PCIE's 
Legislative Committee, and Patrick McFarland, to the far left, 
is a Chair of our Investigations Committee, and that is why I 
have asked them to accompany me today.
    My testimony represents the views of the IGs and not 
necessarily the administration, and I would ask that my full 
testimony be submitted for the record.
    Chairman Thompson. It will be made part of the record.
    Mr. Gianni. First of all, we would like to thank the 
Governmental Affairs Committee for its longstanding, bipartisan 
support.
    Over the years, we have worked with this Committee on a 
wide range of government management issues and stand ready to 
assist the Committee in carrying out its legislative and 
oversight functions. Of particular note is our ongoing 
financial statement work under the Chief Financial Officers Act 
and our continuing work to review agency compliance with the 
implementation of the Results Act. Moreover, we were pleased to 
work closely with you on the Government Information Security 
Act to enhance the Federal Government's ability to combat 
computer hacking and intrusions.
    Certainly, you have referred to our accomplishments over 
the years, and we are quite proud of those accomplishments and 
stand ready to continue our service to the Federal Government.
    Today, we are here to discuss, among other issues, 
legislation that is critical to the IG community's ability to 
perform its mission.
    The Department of Justice's proposal to amend the IG Act to 
authorize criminal investigators in the offices of 23 
presidentially appointed IGs to exercise law enforcement powers 
is extremely important to the IG community. This proposal would 
do three things:
    First, it would grant no new authorities, but would simply 
recognize in statute authorities that are already being 
exercised administratively.
    Second, it would ensure consistency of law enforcement 
powers among the IGs.
    And, finally, it would enhance accountability and would 
offer greater oversight of the law enforcement authority by the 
Department of Justice.
    We have learned that the Department of Justice does not 
intend to renew the OIG blanket deputation authority after 
January 31, 2001. If blanket deputation were not renewed and 
statutory law enforcement was not enacted, literally thousands 
of open investigations of fraud against government programs, in 
the areas of health care, Federal procurement, 
telecommunications, Federal construction, bribery of public 
officials, crimes in subsidizing housing, corruption of highway 
construction programs, child support enforcement, and a host of 
others, would be jeopardized. These types of investigations 
would simply cease. Moreover, if we were forced to return to a 
process in which we sought deputation in each individual case, 
it would be burdensome both to the Department and to the IG 
community. On behalf of the entire OIG community, I urge the 
Committee to endorse this proposal and seek its passage in this 
Congress.
    Second, I will turn to Senator Collins' bill, which is 
under consideration by this Committee. In introducing this 
legislation, Senator Collins referred to the IGs as ``an 
already invaluable program'' and noted our performance and many 
accomplishments over the years. She also challenged her 
colleagues and the IG community as a whole to build on its 
strengths and remedy its weaknesses. I fully subscribe to this 
strategy and look forward to working with her and her staff to 
respond to this challenge.
    While there is a general consensus within the IG community 
in support of the underlying principles embodied in this 
proposed legislation, I must note that consensus is different 
from unanimity. Our community consists of nearly 60 
individuals, each with their own background and experience, 
interacting with agencies performing a wide variety of 
missions. On most matters, there is distinct minority 
viewpoints with suggestions that are worthy of consideration.
    Generally there is support for all of the provisions put 
forth in the bill with some advice or suggestions for making 
some change.
    We recently provided your staff with the results of an 
updated survey on the revised bill; our specific comments are 
included in my written statement. I would like to include for 
the record a letter sent to Senator Collins from my colleagues 
in the ECIE regarding their concerns related to the 
consolidation provision.\1\ We would welcome the opportunity to 
work further with your Committee and Senator Collins' staff to 
share proposed technical changes that could improve our ability 
to better perform our mission.
---------------------------------------------------------------------------
    \1\ The letter to Senator Collins from Kenneth A. Konz, Focal Point 
for the DFE OIGs, dated March 21, 2000, submitted by Mr. Gianni appears 
in the Appendix on page 72.
---------------------------------------------------------------------------
    I'd like to turn next to the other suggested areas that we 
would like the Committee to consider. One area needing 
attention involves the scope of the IGs' authority. Contrary to 
the plain language of the statute, some courts have narrowly 
construed the IG Act's grant of authority to allow 
investigations of regulated entities only when they are direct 
recipients of Federal funds, such as contractors or grantees. 
Under this view, IGs may not investigate criminal conduct of 
regulated entities, even if the subject has engaged in criminal 
conduct knowingly or intentionally to deceive their agency. 
Fortunately, the Congress saw fit to clarify this matter as it 
related to the DOT IG under the Motor Carrier Safety Act. We 
are asking the Committee to revisit a provision that they 
passed several years ago and enact language that would extend 
that interpretation to the whole community.
    The other area that we raise for consideration is the 
Paperwork Reduction Act and how it is being implemented. We are 
working with OMB to try to work out some procedural matters to 
make it more efficient, but still, there is a difference in the 
interpretation as far as the authority of the IGs and the 
independence of the IGs and how the Paperwork Reduction Act 
plays out. We would like to work with the Committee to make 
some improvements in that area.
    We are also suggesting that the Committee may want to 
encapsulate into legislation the PCIE and the ECIE concept, 
somewhat like the current codification of the CFO Council and 
the CIO Council. We think that codifying the two councils would 
provide more accountability, more efficiency, and more 
opportunities to work closer with the Congress.
    Last, we appreciate your continued support on a bipartisan 
basis to advance legislation to provide authorization for the 
IG Criminal Investigator Academy and the Forensic Laboratory. 
We would like to work with you to expand any further 
legislation to authorize funding for our IG Auditor Training 
Institute.
    Mr. Chairman, this concludes my prepared statement. We 
again appreciate the opportunity to share with you this 
information and hope it will be useful to the Committee as it 
considers ways for improving the operations of the IG 
community. We are grateful for the Committee's past support of 
the IG community. We look forward to working together to 
maximize government's efficiency and effectiveness.
    We realize that this is a short legislative session, but 
the issues we cited, especially statutory law enforcement 
authority, are ones we hope the Congress may be able to 
consider before adjournment.
    Thank you in advance for your efforts, and we would be 
happy to respond to any questions.
    Chairman Thompson. Thank you very much.
    Do any of you other gentlemen have comments? Mr. Gess, do 
you have an opening statement?

  TESTIMONY OF NICHOLAS M. GESS,\1\ ASSOCIATE DEPUTY ATTORNEY 
              GENERAL, U.S. DEPARTMENT OF JUSTICE

    Mr. Gess. Thank you. Mr. Chairman, Senator Collins, good 
morning. Let me join in expressing my deepest sympathies to 
you. I can only imagine how hard it must be this morning after 
the loss of a colleague.
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    \1\ The prepared statement of Mr. Gess appears in the Appendix on 
page 46.
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    Let me start by simply asking that my prepared statement be 
made a part of the record.
    Chairman Thompson. It will be made a part of the record.
    Mr. Gess. Thank you, Mr. Chairman. I do not intend to offer 
anything from that prepared statement because I think it speaks 
for itself. I do, however, want to address three very quick 
matters that I think may assist the Committee in its business.
    First, is the issue of timing on the part of the Department 
of Justice. I want to assure the Committee that approximately 1 
year ago we advised the IG community that we needed to move 
forward and that effective January 31, 2001, we would no longer 
offer blanket deputations. We fully recognize the practical 
reality of the fact that it is now the end of July, that there 
are 16 days left in this legislative session. I want to assure 
the Committee--because we think it would be grossly 
inappropriate for a co-equal branch of government to push at 
that level--that we will work with the IG community and the 
Committee on timing issues. We will not jeopardize the lives of 
agents or investigations. I can assure the Committee of that.
    Second, there are two particular parts of the proposed 
legislation that deserve very brief comment. The first is that 
under our proposal there would be limited occasions where the 
Attorney General could confer law enforcement authority for 
acts taken by an Inspector General outside of the Inspector 
General Act. And while that is potentially controversial, I 
want to assure the Committee--I want to give you two very brief 
examples.
    Chairman Thompson. Would you state that again?
    Mr. Gess. We have proposed that, as a general matter, IGs 
would have law enforcement authority when they are conducting 
their business under the Inspector General Act. We have also 
proposed that there would be limited occasions when an 
Inspector General could undertake law enforcement activities at 
the request of the Attorney General, and, obviously with the 
concurrence of the Inspector General, when that act falls 
outside the IG Act.
    The two very brief examples I can give you of where this 
has occurred are child support, in which we recognized that we 
needed to do something--in fact, there was a resolution of the 
Senate that passed 99-0, frankly condemning the Justice 
Department's inaction several years ago. The Attorney General 
took that to heart, immediately, quite frankly.
    In order to get the investigative resources we needed, she 
asked the Inspector General of HHS to help out. The IG agreed. 
However, his investigative authority for child support cases is 
not included in the IG Act. We would not want to lose that 
authority in the future.
    Second, the Health Care Portability Act, which was passed 
by a bipartisan majority, a substantial majority of Congress, 
confers certain law enforcement authority on the Inspector 
General of HHS. As a matter of drafting, that authority falls 
under the Health Care Portability Act, not the IG Act. We would 
not want to face a situation where an Inspector General had to 
choose statutory authorities for a prosecution by which one 
gave him law enforcement authority.
    Let me conclude by simply saying that we do not suggest 
that law enforcement authority be expanded for Inspectors 
General. We simply suggest that the first and primary 
responsibility for supervising that law enforcement authority 
ought to be in the chain of command of the agent who has that 
authority. In this case, it should be the Inspector General of 
an agency.
    We fully intend and our proposal provides for Attorney 
General regulatory authority to assure that there are proper 
hiring, training, and conduct standards and that there is the 
possibility of sanctions should a problem occur.
    With that, I would simply suggest that I am here to answer 
the Committee's questions, and I appreciate the opportunity to 
appear.
    Chairman Thompson. All right. Mr. Mead or Mr. McFarland, 
you didn't have any opening comments?
    Mr. McFarland. I have no prepared testimony.
    Mr. Mead. No, Mr. Chairman.
    Chairman Thompson. Well, thank you very much. I hope the 
fact that we are having this hearing today, in light of the 
increasingly cramped schedule that we have of Senate business 
and all the other things that we are involved in, it attests to 
how important we feel this issue is, and the fact that we need 
to move the ball down the field as much as we can before recess 
and during this session. This is something Senator Collins has 
been urging for a long time, and it is primarily due to her 
leadership that this issue is among the things that this 
Committee wants to seriously consider in the near future.
    Mr. Gotbaum, thank you for your comments. You reminded me 
of several things that I think are important, and that is, the 
nature of the Inspectors General and their job, how important 
they are to us. They have been extremely important to Congress. 
But they have an inherently difficult job. They have a 
tightrope to walk. They have not a built-in conflict of 
interest as such, but certainly a built-in conflict, even those 
who are presidentially appointed. They are trying to help the 
agencies on the one hand, and some of them, most of them have 
worked well in that regard in trying to assist. I think that is 
the way the IGs look at themselves, as somebody there not to 
wreak havoc but to try to assist to do a better job, give ideas 
and suggestions and so forth. You have seen it from both sides 
now.
    At the same time, they are the cop also, and how do you 
balance that? Well, it is hard to write that down on a piece of 
paper in a memo. It has to do with sound judgment.
    We have run into a couple of situations with regard to HUD, 
with regard to TVA, one presidentially appointed, one not 
presidentially appointed that I think should be, and we have 
legislation to that effect for TVA, where I think the 
Inspectors General were abused in those cases. They were not 
cooperated with. And we had this great conflict between the 
appointing authority in one case or the head of HUD in the 
other and the IGs. And we were never able to resolve those 
problems.
    So it gets back initially to your office, really. Frankly, 
I don't think your predecessor was able to effectively resolve 
some of these issues. I know that your position as Chairman of 
PCIE is not a statutory one. It is under executive order. And 
one of the things I think we ought to look at is whether or not 
it ought to be statutory, because I think somebody within the 
administration ought to have the authority to resolve these 
issues and to balance the legitimate position of these agency 
heads who say, after all, we were elected and we ought to be 
able to carry out our policies, whether you agree with them or 
not, we will have another election in 4 years, versus the IGs 
who are seeing things done that are clearly not within the 
purview under any normal objective reading of the situation.
    And when you have that, there ought to be something short 
of a congressional hearing or a lawsuit or something to really 
work that out and resolve that, and I am not sure where that is 
going to lie, except in your office.
    You have been very cooperative with us, and I think you 
understand what I am saying. And I know that, as I say, you 
have limited authority. But I would urge you to stay in the 
middle of all that and not let these situations get out of 
hand. Be fair and just apply some common-sense standards.
    Obviously, you are part of the administration. I guess you 
have a bit of a conflict yourself. But that is, I think, your 
responsibility, and if more authority is needed there, perhaps 
we need to look at that.
    With regard to the statutory criminal law enforcement 
authority--and I want to make sure that I understand it 
correctly--that what you are suggesting here basically is that 
we put in statutory form what is already in practice; that is, 
every 2 years, the Marshals Service deputizes all these people, 
and there are hundreds of them. It sounds to me like it has 
gotten to be more of a pro forma thing. Obviously, they don't 
have a chance to do a lot of reviewing. I don't know if there 
is any background checks or additional checks or anything of 
that nature. You are already there. We are already into these 
areas. Every one of these offices has an investigative side, 
and statutorily it sounds like here and there we have given 
these IGs additional authority that other IGs in other 
departments don't have.
    It has become kind of a mill, and what you are suggesting 
here is that we--first of all, I guess you would take the 
Marshals Service out of it, and we would----
    Mr. Gotbaum. And the Attorney General.
    Chairman Thompson. And we would statutorily 
institutionalize that. Now, is that an oversimplification or is 
that basically what we are talking about?
    Mr. Gotbaum. I think with one addition, Mr. Chairman. You 
are right that this is, in a lot of respects, a proposal that 
we are making to ratify a practice that already goes on. But 
the distinction I would make is that in the law enforcement 
proposal, we have proposed something which we don't do now, 
which is a peer review process, an automatic, periodic, peer 
review process. That is not something we do right now. And what 
we propose in this is that the IG community would, through the 
PCIE, develop some sort of peer review process, and that 
proposed procedure would be itself reviewed by the Attorney 
General. That process would provide an ongoing basis for 
review. We think this provides, in effect, a better form of 
oversight than the one that the Justice Department has been 
able to provide currently, given their resources.
    So you are right, this is in a lot of respects enabling us 
to streamline what we are already doing, but we do think that 
it recognizes the professionalism of the IGs and puts in place 
some additional safeguards as well.
    Chairman Thompson. And the Attorney General, as I recall, 
would have the authority to withdraw this authority if 
circumstances arose justifying it?
    Mr. Gotbaum. Yes.
    Chairman Thompson. You are familiar, of course, with the 
Commission on the Advancement of Federal Law Enforcement, the 
Webster report, that basically has a different view. They are 
concerned about the growth and role of the functions of the 
Inspector General, and, actually, they propose consolidating 
some offices, and perhaps limiting them to the audit side of 
things and giving the investigative functions to someone else.
    In fact, it seems like they are going in the opposite 
direction of what you are suggesting or where we have been 
going. They talk about the proliferation of law enforcement 
agencies, and they talk about an inherent conflict between the 
program review evaluation role of the IGs and their law 
enforcement role.
    Any of you who would like to comment on that?
    Mr. Gotbaum. Mr. Chairman, may I? There are times in life 
when being at OMB puts you on the hot seat because your life is 
always a set of conflicting issues. From my perspective, from 
OMB's perspective, we disagree quite fundamentally with the 
Webster report. And I think it would be worthwhile getting the 
Department of Justice's view as well.
    It is very easy to say as a theoretical matter law 
enforcement ought to be in one place and to try to parse out 
this very complex thing that IGs do into law enforcement and 
program management, etc.
    But I think this Committee recognizes--it is very clear 
that Senator Collins recognizes and that the IG community 
recognizes and the administration recognizes that it is not 
that simple. The fact is that we tried to appoint good people, 
tried to improve the professionalism and the quality, and have 
succeeded, in our view, in creating in the IGs a function of 
government that is really very helpful. It helps you and it 
helps us.
    That doesn't mean that other parts of the government won't 
grumble from time to time, as they will: You know, I should be 
doing that. And we at OMB get that all the time, and that is 
the reason why I think it is important to say to this Committee 
that I am not an IG. I am not speaking on behalf of the IGs. I 
am speaking on behalf of the administration. We don't think and 
we wouldn't propose centralizing all law enforcement authority 
within the Justice Department.
    We do think it is important in our proposal that the 
Justice Department be recognized as the preeminent law 
enforcement authority, so that when they say go one way and 
somebody wants to go another way, we go the way the Justice 
Department says.
    So with respect to Mr. Webster, who is obviously an 
important and distinguished American, we don't agree with his 
notion. We think what we have got is something that is worth 
strengthening.
    Chairman Thompson. Mr. Gess, what do you say about that?
    Mr. Gess. Mr. Chairman, we deeply appreciate the work of 
Judge Webster and, in fact, are in the process of implementing 
some of his recommendations or the Commission's recommendations 
respecting training and coordination in training because we 
think it is important.
    However, on this particular issue, we frankly disagree. We 
think that these are issues that were dealt with roughly 20 
years ago when the IG authority was expanded and has expanded 
over the years. We don't think that it is necessary, given the 
way that we do our law enforcement business, which is 
establishing partnerships at the local level between the U.S. 
Attorney, with the Federal, State, and local law enforcement 
agencies, to centralize everybody in one place. And we don't 
think that it would be good practice, but, more importantly, 
practical at this point 20 years down the road.
    Chairman Thompson. Let me ask you one more final question 
in this round. It has to do with, I guess, a broader view of 
law enforcement.
    I was somewhat surprised at the breadth of the 
investigative work that IGs do. You mentioned child support and 
all the other. Some of it is statutory and pertains to 
particular departments.
    You say that this proposal does not expand the jurisdiction 
of the IGs, and I am seeing--I think of myself as a graduate of 
the U.S. Attorney's Office, and I am wondering how all this 
works. You have all these Inspectors General doing all these 
things. You have the FBI doing a lot of the same things, it 
sounds to me like. And I am wondering how that is coordinated.
    As I understand it now, there comes a point where the IGs, 
if they reach a certain level in their investigation, are 
supposed to report to Justice or to the FBI, are they not?
    Mr. Gess. That is correct, Senator.
    Chairman Thompson. And that would not change.
    Mr. Gess. Absolutely not.
    Chairman Thompson. It looks to me like quite a coordinating 
job. I am not sure what to do about it or if there is anything 
that should be done about it. But if I was the FBI, I would be 
mindful of that and make sure that there is a firm 
understanding.
    Are there any interoffice procedures or understandings as 
to how those lines are drawn? I don't think there is anything 
statutory.
    Mr. Gess. Mr. Chairman, there is nothing statutory, but, 
for instance, the Inspector General for HHS and the FBI, who 
would share health care fraud investigative responsibilities, 
have a written memorandum of understanding.
    I can also speak to this issue based on my prior hat as an 
Assistant U.S. Attorney in Portland, Maine, where, in fact, 
there are few investigative resources. Anything major means 
bringing everybody under the sun to the table and begging for 
help.
    I can assure you, Mr. Chairman, that it is a challenge. It 
is hard to do. But the reality is that I don't think 
particularly in smaller States we could get the job done if we 
didn't basically have everybody at the table contributing a 
little bit. And I know that it sounds hard from a management 
perspective, but the reality is it seems to work around the 
country because everybody at that table really is committed to 
doing good law enforcement.
    Chairman Thompson. Let me finish with one note of concern 
with our little love fest we have got going on here today. We 
reached out to the FBI to get their views about this, and 
before we got very far, it was closed off. And I don't know 
why, but I suspect that the Justice Department wanted to speak 
with one voice on this issue. And I understand that, but you 
need to understand that before I do anything, I am going to 
hear the best candid assessment from the FBI's vantage point, 
because we have got everybody singing from the same sheet of 
music here today, but there may be some other viewpoints and 
some things that I haven't thought of or maybe others haven't 
thought of. So I would not be too careful about trying to hold 
this thing--I mean, too adamant in trying to hold this thing 
close, because we are not going to do anything until we make 
sure we understand the ramifications of this from a law 
enforcement standpoint.
    Mr. Gess. Mr. Chairman, I can assure you that that would 
be, among other things, I think, bad law enforcement practice. 
Our sole goal here with the FBI is that we be at the table. We 
would not try to restrict what anybody would say. To be quite 
frank, I think that would be folly.
    Chairman Thompson. Well, you have a right to set policy. I 
mean, I understand that.
    Mr. Gess. Absolutely.
    Chairman Thompson. You are the Justice Department. But we 
have a right to get the views of the major players involved.
    Mr. Gess. And we don't question that, Mr. Chairman, I can 
assure you.
    Mr. Mead. Mr. Chairman, I would like to make a point about 
the relationship of the IGs to the FBI, and I would like to use 
the Department of Transportation as an example because I can 
speak to that one more credibly.
    I think things work well with the FBI. I have enormous 
respect for that institution. I think part of the reason they 
work so well is because of the U.S. Attorneys and the Justice 
Department. Before a case gets too far down the road on the 
investigative side, you have got to get buy-in from the U.S. 
Attorney, which operates, as a matter of fact, as a very 
important internal control, a check and balance.
    In some instances, we investigate cases that are highly 
specialized. They are not really ``high profile.'' You may not 
read about them in the paper. They may involve something where 
a motor carrier, a trucker, has been lying to the Department 
about the hours that they are driving, for example, or whether 
they are carrying hazardous materials. These are areas where 
you need a great deal of specialization. In those cases, we 
work with the U.S. Attorney, and largely at the U.S. Attorney's 
direction, and the FBI may not even get involved.
    On the other hand, not too long ago we were involved with a 
highway transit construction fraud case, very high profile, 
involving a couple of organized crime families. There, we 
teamed with the FBI but still operated largely under the 
direction of the U.S. Attorney.
    As to your question earlier about whether there is some 
sort of conflict here because you have program review 
responsibilities and you also have criminal investigative 
responsibilities, in fact----
    Chairman Thompson. What Webster actually suggested he 
thought of that report?
    Mr. Mead. Yes. In fact, the auditors do not get involved in 
the investigations, and the investigators do not get involved 
in the audit. But, in fact, the criminal investigators do 
develop expertise in a particular program area. For example, in 
airline safety, it takes a great deal of specialization to 
understand how those maintenance logs have to be filled out and 
when you have ``pencil whipping.''
    So it is important that you have that reservoir of 
expertise in the various agencies of government. Thank you.
    Chairman Thompson. Well, I appreciate that, and I think 
most U.S. Attorneys want all the help that they can get from 
whatever source they can get. And I don't think the FBI is too 
jealous about some of these things, but I understand also that 
there could be some territorial concerns there, and you may be 
concerned that the FBI might come in and say, no encroachment 
on our territory.
    But we can figure that out. I mean, we know how that works, 
and we just need everything on the table.
    Mr. Gotbaum. Mr. Chairman, can I just make two points on 
this?
    Chairman Thompson. You are going to have to let me quit.
    Mr. Gotbaum. I will be fast, I promise. One is, again, the 
side effect of being in OMB and trying to develop an 
administration position, is that we see this. You are, of 
course, right that you should hear the FBI's view. All we would 
ask is that since the person who best explained to me why, 
notwithstanding the FBI's view, he thought the administration 
proposal was right was Nick Gess. I would hope that you would 
also hear the Justice Department's response to those concerns.
    Chairman Thompson. He is here. He is getting his shot.
    Mr. Gotbaum. OK.
    Chairman Thompson. Senator Collins.
    Senator Collins. Thank you very much, Mr. Chairman. I want 
to follow up on exactly some of the issues that you were 
raising with regard to the statutory law enforcement authority.
    Mr. Gess, I first want to welcome you from Maine. I know 
you are on detail here from the U.S. Attorney's Office, and I 
think it was a clever move of the Justice Department to send 
you here today, because some of the questions that I was going 
to ask I now have to discard. [Laughter.]
    I will pass them right over to my colleagues.
    Nevertheless, I must say that I find the Department's 
position on granting statutory law enforcement authority, to 
put it kindly, to have evolved. And I want to take you back and 
try to understand exactly what the Department's position 
currently is and how it has changed.
    In 1998, when I introduced the first version of Inspectors 
General reform legislation, I put in statutory law enforcement 
authority. The Justice Department objected to my doing so, and 
thus, when I redrafted the bill with the new Congress and 
introduced it in 1999, I left that provision out, even though 
the IGs were virtually unanimous in urging me to include it and 
gave me several very compelling examples of the delays and the 
paperwork involved in the process.
    Then, in March of this year, I received a letter from 
Deputy Attorney General Holder urging me to sponsor statutory 
law enforcement authority for the IGs. Then the latest 
development, which I learned of from an IG just yesterday, is 
that the Department of Justice has decided that the current 
deputation process is unduly burdensome for the U.S. Marshals 
Service and, in fact, has reached such a crisis point that DOJ 
apparently has threatened to revoke the deputation authority 
for the IGs effective next year.
    So I think given these events, you can understand why I am 
a little bit concerned and perplexed as to what the 
Department's position is and why it seems to have evolved or 
changed dramatically.
    Mr. Gess. Senator, I think that your words are perhaps 
kind, very kind in their view. I think the simplest answer to 
this is that the IG community did a very good job of coming to 
us approximately 18 months ago, and then over the next 6 months 
spending a significant amount of time with Eric Holder walking 
through proposals that might work. There then ensued what I 
would term ``high level''--including both the Attorney General, 
the Deputy, the other senior staff at the Department--
consideration and our decision ultimately that the IG community 
was right.
    At the time that we struck this--I don't want to call it a 
``deal,'' but effectively this law enforcement comity approach, 
we also made the decision approximately a year ago that 
statutory law enforcement authority needed to replace these 
blanket deputations.
    Our selection of the January 2001 date contemplated an 
entire legislative session moving through. As I said in my 
opening statement, while we very, very much would hope that 
there would be rapid action here, we have no intention of using 
that date as a hammer in any way, shape, or form. It was simply 
seen to be a reasonable date when we set it a year ago.
    Senator Collins. But if, in fact, legislation granting the 
statutory authority does not make it all the way through into 
law, you will not revoke the authority? I mean, the threat is 
out there, and that is very disturbing.
    Mr. Gess. It was part of--I mean, to be frank, it was--as 
this approach was agreed to around Eric Holder's conference 
table with representatives of the IG community, we actually had 
initially thought that it would be at the end of this 
legislative session, but for a variety of administrative 
reasons pushed it off.
    What I can assure the Committee of, and you personally, 
Senator, is no agent will be endangered, no case will be 
endangered. We will explore with the IG community and the 
Committee ways in which, if we have to, we can make this more 
effective and efficient given the fact that we have a system 
now in which the Marshals Service has two to three employees, 
frankly, doing administrative paperwork processing, not law 
enforcement review. And that is our concern.
    But we certainly have no intention of--I mean, we are the 
lead law enforcement agency. We would never do anything to hurt 
law enforcement.
    Senator Collins. Mr. McFarland, would you like to add 
something?
    Mr. McFarland. Yes, Senator. I would like to just respond. 
My recollection is quite different than Mr. Gess' recollection. 
I for one, and the other IGs that I have talked to, did not 
hear that stated at that meeting. If we had, we would have been 
in turmoil ever since. We have only been in turmoil for a few 
days.
    My concern is that if, in fact, we acknowledge that the 
blanket deputation is working--and I certainly do--it is 
working. It is cumbersome to the Marshals, I am sure. But 
everybody has administrative problems, every office. And if 
somehow that is revoked, then probably the alternative is to go 
back to case-by-case deputation, and that is a horrible 
scenario.
    Using the Department of Labor IG's office as an example, 
the DOL processing costs per case was $500. And you know the 
amount of work that comes out of that Labor IG office. It is 
staggering. And the different processes that it had to go 
through to get to that point was just so time-consuming and 
costly that I hope that, first of all, legislation is passed, 
and, of course, that is why we are here; but, second of all, I 
would hope that it wouldn't be just a working-it-out-later-type 
situation with the Department of Justice.
    This is a critical thing, and it is critical because--well, 
just take HHS as an example. The day that happens that we lose 
something in our deputation, 2,400 of their cases cease and 
desist. They just come to a stop. Not one of us is going to 
send an agent out in harm's way under any circumstances.
    So it is a dilemma, and I hope it can be resolved.
    Senator Collins. Thank you.
    Mr. Gianni. Senator, if I might?
    Senator Collins. Mr. Gianni.
    Mr. Gianni. Two points. First of all, I think as you said, 
it is an evolving process. It has evolved and it has grown. And 
the reason it has evolved and grown to this point is that the 
Inspectors General have taken their responsibilities seriously 
and have carried them out dutifully. We all have entered into 
an agreement with the Attorney General, so we each have entered 
into a responsible agreement and made some commitments.
    Second, I think the important issue is--and why we in the 
community would like to see our law enforcement authority in 
statute--that it could very easily change from one 
administration to another administration. And all of the work 
that we have invested in showing this administration how we are 
able to perform and why it makes good sense may not be accepted 
with another set of leaders, no matter what party they might be 
coming from. And so that is why we are pushing for it. We think 
it makes sense. We have proven that we are able to accept these 
responsibilities and carry them out in a way that coordinates 
with the other law enforcement communities, and at the same 
time are willing to undergo additional oversight--which I might 
say that many of us do at the present time.
    Senator Collins. I want to ask Mr. Mead a question about 
the training that the IG staff undergoes in order to make sure 
that they understand the proper use. For example, it is my 
understanding--well, why don't you tell us what kind of 
training the IGs who do receive the deputations undergo?
    Mr. Mead. Well, they have to go to FLETC.
    Senator Collins. Which is?
    Mr. Mead. Which is the investigative academy that is also 
used by other law enforcement agencies, and they get the 
standard portfolio of training. We are very proud of them. In 
fact, that is a tradition for the current deputization, and I 
assume that would be carried over to the statutory provisions 
being proposed here today.
    Senator Collins. I think that is an important point because 
some of the people who have been opposed to granting the 
statutory authority are wrongly assuming that the IG agents are 
not trained, that they are just handed a gun, a badge, et 
cetera. And I want to get on the record exactly the point that 
you have just made.
    Mr. Mead. And I have made it a point also to attend 
recurrent specialized training of our agents done under the 
supervision of senior managers, where they would go through the 
various exercises that a law enforcement agent can be expected 
to face, such as presenting Miranda warnings and all that, as 
well as how to use a weapon.
    I don't know if my colleagues here would like to amplify on 
that.
    Mr. McFarland. Yes, I would, Senator Collins. The 
Department of Treasury Federal Law Enforcement Training Center 
that Ken was talking about is in Glynnco, Georgia, and it is a 
10-week course, and it services 70 agencies of government. It 
is big and it is effective. And it is something that every one 
of us in the community is very proud of, proud of being able to 
go to that school.
    After that, then our agents in the IG world go to the IG 
Academy, which is also at the same location, for 4 weeks--not 
necessarily right after but within a period of time. So we have 
our own academy.
    And in recent months, that academy is what I would consider 
now a model academy because we had the good fortune of being 
able to join with the Treasury Tax Administration Academy that 
was already in existence, along with our own academy, and we 
have got a dynamic force down there, a dynamic curriculum. And 
it stands alone.
    Senator Collins. Thank you. My time is fast running out, so 
I want to just touch on two other points very quickly. Mr. 
Gotbaum, I was disappointed this morning to hear you repeat the 
administration's opposition to a 9-year renewable term for the 
IGs. This provision is intended to help improve recruitment of 
IGs and also to give them some sense of security and to avoid a 
situation that happened, frankly, in the Reagan Administration 
where the IGs were fired, which I thought was inappropriate. 
Thus, we chose a 9-year term to try to overlap administrations, 
although I am certainly flexible on the number of years. It is 
more the concept that I was trying to advocate for.
    I am puzzled by the administration's opposition because the 
President signed into law a 5-year term of office for the 
Inspector General for Tax Administration and a 7-year term of 
office for the Inspector General for the U.S. Postal Service. 
So, clearly, the administration has found terms of offices for 
Inspectors General acceptable in some situations. I don't 
understand why the administration thinks that the Postal 
Service Inspector General should have a term, the Inspector 
General for Tax Administration should have a term, but that 
other presidentially appointed IGs should not have terms.
    Mr. Gotbaum. Senator Collins, this is an important 
question. When you are a Presidential appointee subject to the 
appointment of the President, at the end of an administration 
you become extremely conscious of when you are working for 
government beyond the current administration. I view all of the 
things that we are talking about today as not having any 
consequence for the current administration. And so when I talk 
about them, we really are taking views that we think are of 
service to the next administration, of whatever party. And I 
want to be very clear about that because our support for law 
enforcement authority, for example, whether you legislate this 
or not, is not going to change our ability in the next 6 
months. What it will do is it will enable IGs in the next 
administration.
    Getting to the specific proposal about fixed terms, I think 
I should say that we don't feel that a long term is necessary 
to preserve the independence of the IGs. I can't speak for the 
beginning of the Reagan Administration, but since then we think 
the history has been pretty clear that IGs have been 
independent under the current structure and----
    Senator Collins. Is there anything to stop a new President 
from firing all of the IGs?
    Mr. Gotbaum. Only the fact that that President would have 
to explain to the entire world why he should or would do it.
    Senator Collins. It has been done before.
    Chairman Thompson. How about all the U.S. Attorneys?
    Mr. Gotbaum. Right. But if I may, Senator Collins, the 
other issue is that if you start making this a job that when 
you take it you have to commit for almost a decade, you are 
going to affect the kind of people that you can get to take 
that job.
    Now, the fact is that this President has signed and other 
Presidents have signed legislation that provides for fixed 
terms for some IGs and other folks. But I want to be clear: I 
am expressing the administration's preference or view. Our 
preference is that we not constrain IGs in this way. This is 
not a statement about IGs. This is a statement on behalf of the 
Executive Branch, on behalf of the next administration, which 
isn't here yet to take this argument: There ought to be some 
ability in the Executive Branch to pick the people who work 
particularly in things that, involve agency management. And 
that is the reason why we have resisted the notion, and we hope 
that you would reconsider.
    Senator Collins. Mr. Mead, I want to give you a chance to 
respond to that, and then I am going to yield because I know 
that I have used a considerable amount of time. I have many 
other questions, but I am going to submit them for the 
record.\1\
---------------------------------------------------------------------------
    \1\ The questions for the record submitted by Senator Collins and 
responses from Mr. McFarland appears in the Appendix on page 27.
---------------------------------------------------------------------------
    Mr. Mead. This is a very central issue, and I want to 
respond directly and explicitly to the question on removal 
because it is of concern to the Inspectors General.
    There is considerable support for some sort of term limit. 
I think the reason there is considerable support for some sort 
of term limit is because of the removal issue. The law does 
require the President, when removing an Inspector General, to 
communicate to Congress and explain the reasons therefor. It is 
quite different, materially so, from a ``for cause'' removal. 
Now, the President could communicate with the Congress and say 
``I think I want a new team.'' That statement would satisfy the 
law. But you do not want an Inspector General in the last year 
of an administration or in the beginning of a new 
administration to be pulling any punches.
    The law requires very clearly that Inspectors General 
report to the Congress and to the Secretary and keep them 
currently and fully informed. And I believe that the Congress 
would do a service to the Inspectors General if they did 
address this removal issue.
    I think I am trying to fairly reflect the views of this 
community, which is not always unanimous, but I think if there 
is any one issue besides law enforcement that there is some 
consensus, it is this one.
    Mr. Gianni. And we might be able to take care of that by 
just putting in a for-cause provision in the act rather than 
just a notification provision in the act. The cause is poor 
performance, and that is the reason for removal. And that might 
solve the problem.
    Senator Collins. Thank you, Mr. Chairman.,
    Chairman Thompson. Senator Levin.

               OPENING STATEMENT OF SENATOR LEVIN

    Senator Levin. Thank you, Mr. Chairman.
    First, let me thank you for scheduling this hearing. It is 
a hearing on kind of a dry and complex subject, and it is 
particularly difficult, obviously, today when our thoughts are 
elsewhere. We have lost an esteemed colleague who was a very 
important part of this family, a very kind and a gentle and a 
good man. And all of us in this room are thinking about that, I 
am sure, more than this. But, nonetheless, our work must go on, 
and that is what Senator Coverdell would want us to be doing, I 
am sure.
    I also want to thank Senator Collins for taking on this 
subject. It is important that we have this kind of review. 
These issues are complex. They don't attract a great deal of 
media attention so that we just have to be doing our work free 
of that, which is a big plus, frankly, but, nonetheless, 
sometimes not as attractive or glamorous as some of the other 
things in which we might be involved. This is sort of the 
grunge work.
    But this subject, the Inspector General Act, is really one 
of the true feathers in the cap of this Committee over the last 
25 years. The Inspectors General Act has really saved billions 
of dollars. We have gone after waste and abuse, and our 
Chairman has been one of the leaders in that. Again, I want to 
thank him and Senator Collins for their leadership in taking on 
this review.
    I just have a few questions in the areas which have been 
discussed. First, on the 9-year term, we have a 5-year term for 
the head of the Office of Government Ethics, as I understand 
it, and there are two IGs that have terms, I believe one is 7 
years and one is 9 years. And so in two of those three cases, 
at least, the term of office is less than the 9 years proposed 
here, for the IGs. That is a significant grant of a term of 
office for a large number of Executive Branch appointees.
    So what is the logic in a 9-year term, instead of, for 
instance, a 5-year term, as we give to the Director of the 
Office of Government Ethics? And, second, what does it really 
add when the IGs still serve at the pleasure of the President? 
Because I assume we are not eliminating that language in this 
proposal. They still would serve at the pleasure of the 
President, but have a 9-year term. It seems to me there is an 
inconsistency in that.
    But two questions: Why a 9-year term, when we have a 5-year 
term for the OGE Director and a 5-year term for one of those 
other Inspectors General who have a specific term? And, second, 
since this bill would maintain serving at the pleasure of the 
President, what does this really add? Mr. Gianni?
    Mr. Gianni. Senator, from the standpoint of the IG 
community, I don't think that we are wed to any specific number 
of years. The idea is to set up a situation that goes beyond 
one term of an administration. The expertise and knowledge of 
an agency should increase the longer an IG is in position. This 
should result in better service to the agency and the Congress. 
In my opinion, a longer period of time rather than a shorter 
period would be better for the government.
    As far as the differences between other types of--well, my 
two colleagues, one from the Postal Service and one from the 
Tax Administration, I must admit I wasn't aware of the term for 
my colleague at the Tax Administration. But, again, it is 
probably something we would want to look into to make sure that 
there is some degree of consistency if we move in that 
direction.
    Mr. Mead. And, in fairness, Senator Collins, when 
constructing her legislation, asked the views of the Inspectors 
General, and they ranged the gamut. And I did not envy the 
position she was in. What she was trying to do--not to speak 
for her, but my understanding--was to give the position some 
security, to inject almost an expectation that you do not 
remove an IG at the end of a particular administration 
regardless of the party that is in power.
    There was also consideration given to the Comptroller 
General's term, which, of course, is 15 years, and everybody 
thought, my God, that is a long time. And I think the idea was 
to span at least one full administration, 8 years. But, again, 
there is no magic in that number.
    I personally think you do want Inspectors General to commit 
to stay for a good period of time. Now, whether that is 5 years 
or 7 years or 9 years, I do not know. I think a core underlying 
issue is that you should not have Inspectors General leaving at 
the end of an administration.
    Senator Levin. Well, there is no commitment on the part of 
the Inspectors General in this proposal.
    Mr. Mead. No, sir.
    Senator Levin. The commitment is--to the extent there is a 
commitment, and there still is a removal without cause.
    Mr. Mead. Yes.
    Senator Levin. So they are still serving at the pleasure of 
the President.
    Mr. Mead. The provision does not technically change the 
requirements for removal. That is correct.
    Senator Levin. Has there been an unusually large turnover 
in Inspectors General since they were all removed in 1981.
    Senator Levin. Since then, has there been a particularly 
large turnover?
    Mr. Gianni. Since I came into the community 4 years ago, I 
believe we had, at one point in time, seven vacancies, which 
would indicate that seven of my colleagues had decided to leave 
for one reason or another. I don't view that as a large number. 
There seems to be some continuity, and certainly both the Bush 
Administration and the Clinton Administration on two occasions 
have chosen not to remove the IG and basically listened to the 
advice that it was getting from this particular Committee.
    Senator Levin. What is the average length of service of the 
IGs since 1980?
    Mr. Gianni. Senator, I do not have that. We certainly could 
get it and provide it for the record.\1\
---------------------------------------------------------------------------
    \1\ Letter to Senator Levin from Mr. Gianni, dated August 7, 2000, 
appears in the Appendix on page 76.
---------------------------------------------------------------------------
    Senator Levin. I think it might be an interesting 
statistic.
    On the consolidation issue, do we have any example of an IG 
serving a free-standing agency, but also serving another 
agency, or a department?
    Mr. Gianni. I am not aware of one. There might be, but I am 
just not aware if that is the case. At the State Department, I 
believe that there was an attempt--the Congress was trying to 
achieve some consolidation, and I believe at the State 
Department there might have been a consolidation of one of 
the----
    Senator Levin. Wasn't that within the State Department?
    Mr. Gianni. Consolidation within the State Department.
    Senator Levin. No, I am not referring to that. I think the 
Agency for International Development had an IG that was within 
the State Department.
    Mr. Gianni. Right.
    Senator Levin. I am talking about a free-standing entity.
    Mr. Gianni. I am not aware of any.
    Senator Levin. OK. On the law enforcement issue, I was very 
happy to hear about the training that is provided. Is there 
some kind of a certificate that is granted at the end of that 
training? Do you have to pass a course? Is it that specific?
    Mr. McFarland. Yes, Senator, absolutely.
    Senator Levin. OK. What is it called when you pass that 
course, both the Treasury academy and yours?
    Mr. McFarland. Well, I don't know what it is called, but 
there is a certificate given at both FLETC and the academy to 
acknowledge successful completion.
    Senator Levin. That is all I have, again, unless others 
wanted to comment on any of those questions that I asked. I 
should have offered you, Mr. Gotbaum, or anybody else the 
opportunity to comment.
    Mr. Gotbaum. Senator Levin, on the consolidation issue, 
part of the reason why we view S. 870 as an important start for 
conversation is that it raises the sort of issues that you 
raised on consolidation. It is not that we don't believe that 
smaller IG offices shouldn't find ways to work with each other 
or develop some sort of cross-servicing. We think that is 
something which makes sense. But the bill in its current form 
directs particular consolidations--and we thought that was a 
case of a good intention that deserved some discussion before 
we went further.
    Senator Levin. What are the criteria, Mr. Gianni, that are 
used in establishing these particular consolidations or 
proposing these? What are the criteria that were used? Or since 
you support it, what criteria do you think we should use?
    Mr. Gianni. Well, I think I communicated that, in general, 
there was some agreement, but there was also some disagreement. 
I believe the jury is still out.
    I believe what was put forth were some areas where 
efficiencies could be acquired because many of my ECIE 
colleagues are not in large Inspector General offices compared 
to those IGs from departments and larger agencies. But at the 
same point in time, there is a trade-off. There is the other 
side of the picture. When you consolidate this responsibility 
into a larger agency, there is the question of whether 
oversight of the smaller agency would receive resources to show 
some degree of monitoring. Loss of expertise and knowledge of 
that specific agency could also occur.
    So there are pros and cons. I think, as I looked at the 
agencies that were identified, it appears that they might have 
been trying to match up those agencies with like-minded larger 
departments or agencies.
    Senator Levin. Like-minded being similar types of 
functions?
    Mr. Gianni. Yes, similar types of functions.
    Senator Levin. And if you applied those same criteria to 
all of the IGs, would others fall in that same category?
    Mr. Gianni. I think certainly so. One could conduct an 
exercise of saying ``do we want to have some sort of a 
reorganization and consolidation and mergers,'' and certainly 
that process could take place. Now, whether that is going to 
result in the end of having the degree of oversight both for 
the agency and for providing the information that the Congress 
needs to carry out its oversight, that is an open question.
    Senator Levin. Thank you.
    Mr. Mead. We did a survey of the Inspectors General, and 
found that this is probably the most controversial component of 
the entire proposal. I think it was a strongly held view that 
it is important to have a presence at the smaller entities. But 
when there are problems, you need the critical mass. And at 
many of these agencies, there are just two or three people 
there, which is not enough to undertake a comprehensive 
investigation or audit.
    On your question about the criteria, I think it was by 
functionality. Just as an example, FLRA, the Federal Labor 
Relations Authority, would have gone to OPM, the Pension 
Benefit Guaranty Corporation into the Department of Labor, the 
Federal Maritime Commission to us at DOT.
    You are quite right that if you were to apply that criteria 
government-wide, you could identify other opportunities for 
consolidations. But there is a lot of disagreement over this 
particular proposal.
    Mr. Gianni. Senator, if I might, just a point of 
clarification.
    On the training for our agents at the academy, this is the 
same academy that members from the ATF and the Secret Service 
attend, and we receive the same certificates as they do. There 
is a grading of their performance during that training.
    Chairman Thompson. Gentlemen, thank you very much. This has 
been very, very helpful.
    It seems to me, just a point of overview, that basically 
what we are considering here falls into two categories: One has 
to do with the IG's relationship to the outside world, those 
who do business with the Department and third parties, and what 
that ought to be in coordinating that within Justice; and the 
other has to do with the internal part of it with regard to its 
own department head, and the difficulty in getting that right.
    What we are doing, it seems to me, over a period of years--
and being in the last year of an administration I think helps 
us to be a little more objective about it, hopefully--is 
balancing the need for an administration to carry out its own 
policies versus the need for someone inside there to keep close 
tabs on what they are doing, not only from the standpoint of 
waste, fraud, and abuse but some other gray areas, perhaps, and 
to report to Congress.
    I think it is like the other balance-of-power 
considerations that we have. Sometimes they go this way and 
sometimes they go that way.
    My own feeling is that the Executive Branch has gotten so 
big and so complex, and the Legislative Branch has gotten so 
preoccupied with the budget process and everything else, and 
has so little time to do oversight, that the balance is a 
little out of whack in favor of the executive power and that we 
need more right now than we have at some times in the past, 
maybe, to have a little more independence from the IGs than we 
have had, because Congress needs all the help that it can get. 
And maybe even the head of an administration--obviously, they 
don't know what all is going on. They need to help themselves 
to monitor what is going on in all of these agencies and 
departments that we continue to create.
    So I think that is what we are talking about here when we 
are talking about the term and how long it should be. We are 
talking about the extent of independence that we need. And I 
think we need to move in the direction of a bit more 
independence than we have had. All the cases that we have had 
up here recently have not been cases of the IGs just going in 
and looking to create havoc without just cause. The cases have 
been where the IGs are trying to do a decent job, and the heads 
of departments have tried to squelch them, quite frankly.
    So I think we are moving in the right direction. Thanks 
again to Senator Collins and Senator Levin today, and perhaps 
we can move on this.
    Senator Collins, do you have any other comments?
    Senator Collins. No, Mr. Chairman. I just want to thank you 
so much for holding this hearing. I am grateful to the IGs for 
the work that they do, and I think a lot of the issues are very 
complex, and we need to strike the right balance. But I hope we 
will be able to proceed this year, and I thank you for your 
leadership.
    Chairman Thompson. Thank you very much.
    The record will remain open for 1 week for the submission 
of other material.
    We are adjourned.
    [Whereupon, at 11:39 a.m., the Committee was adjourned.]



                            A P P E N D I X

                              ----------                              


  QUESTIONS FOR THE RECORD SUBMITTED BY SENATOR COLLINS AND RESPONSES 
                           FROM MR. McFARLAND
    The following questions submitted by Senator Collins are directed 
to Mr. McFarland in his capacity as Inspector General for the Office of 
Personnel Management:

    Mr. McFarland. Madam Chairman, thank you for the opportunity to 
comment on the questions for the record concerning S. 870, Inspector 
General Act Amendments of 1999. Though I testified before your 
Committee as the Chairman of the PCIE Investigations Committee, I am 
answering your questions as the Inspector General of the Office of 
Personnel Management. First, let me go on record as supporting the 
overall bill. Below are my responses to each question you have asked:

    Question 1. In 1997, the Permanent Subcommittee on Investigations 
thoroughly examined the practices of the Treasury Department's 
Inspector General, Valarie Lau. The Subcommittee found that Ms. Lau had 
actually awarded two sole-source contracts to acquaintances of hers in 
violation of standard contracting regulations. Other serious management 
problems were also identified during the course of the Subcommittee's 
investigation.
    As a result of that incident, I have proposed in S. 870, The 
Inspector General Act Amendments of 1999, that an external review be 
conducted every 3 years of the operations of the Offices of Inspector 
General, so that there will be a clear answer to the question, ``Who is 
watching the watchdogs?'' Do you agree that an external review of the 
Offices of Inspector General is appropriate?

          Answer. I wholeheartedly support the concept of external 
        reviews of the entire operations of the Office of the Inspector 
        General (OIG). As I am sure you are aware, the OIGs are 
        subjected to an external peer review of the audit functions 
        every 3 years. In addition, as part of the proposed law 
        enforcement authority provisions you are now considering, we 
        are planning periodic reviews of investigative functions with 
        results reported to the Attorney General. An external review 
        encompassing the remainder of the OIG would attest to our 
        creditability to all interested parties. As the watchdogs of 
        the government, we need to be able to defend our operations at 
        all times.

    Question 2. S. 870 also proposes a provision prohibiting Inspectors 
General from accepting cash awards and bonuses to eliminate the 
appearance of any impropriety resulting from acceptance of a bonus from 
an agency head that the Inspector General is required to audit and 
investigate. Do you support this prohibition?

          Answer. I have always opposed bonuses for inspectors general 
        (IG). I believe they make it difficult for IGs to function in 
        the independent nature expected by the American public and 
        Congress. Additionally, acceptance of a bonus award would 
        indeed create a conflict of interest. Your provision is 
        strongly supported by the entire IG community.

    Question 3. Although I am generally very reluctant to propose pay 
raises for any Federal officials, in S. 870, I have included a 
provision that would compensate the presidentially appointed Inspectors 
General who would be affected by the bill's ban on accepting cash 
awards or bonuses. I am aware that it is possible for deputy Inspectors 
General to earn a higher salary than an Inspector General. To correct 
this disparity, S. 870 proposes a salary increase from Executive Level 
IV ($122,400) to Executive Level III ($130,200). Do you support this 
provision?

          Answer. I concur with the proposed change in salary levels 
        for IGs. Logically, the inspector general should be the highest 
        paid staff person in the OIG. In addition, this section of the 
        bill would provide incentives for retention and recruitment of 
        qualified IGs.

    Question 4. The Inspectors General are currently required to report 
their activities to Congress on a semi-annual basis. I have learned 
from discussions with the Inspectors General that the production of 
semi-annual reports is very resource-intensive. Thus, I have proposed 
reducing this requirement to an annual report so that Inspectors 
General may reallocate the volume of resources presently devoted to 
report production to audits, investigations, and any other activities 
the Inspectors General deem necessary. What is your position on 
streamlining the reporting requirement in this manor?

        Answer. I support the proposed streamlining of reporting. The 
        semi-annual report is a time consuming and demanding process. 
        By creating an annual report, we are ensuring reporting on a 
        timely basis while reducing the workload demands in the OIGs. 
        If more frequent reporting is necessary, the bill permits 
        congressional committees or GAO to require it. Most 
        importantly, an IG is mandated to keep the agency and Congress 
        fully informed and, therefore, additional reports may be issued 
        at any time.

    Question 5. To enhance their independence from agency heads, I have 
proposed, in S. 870, a term of office for the presidentially appointed 
Inspectors General. Do you think that a term of office would be helpful 
to send a signal to agency heads that the Office of Inspector General 
is not a political post, and that there is a strong measure of 
independence expected by law?

        Answer. By making appointment terms that exceed the maximum of 
        8 years of a presidential administration, I believe the bill 
        provides a message to management that IGs are not political, 
        and, therefore, are independent from the political 
        considerations of an administration.

    Question 6. In S. 870, I have suggested consolidating smaller 
Offices of Inspector General into larger offices that perform similar 
programmatic reviews. One of the bases for this provision is that 
offices with the equivalent of one, two, or even three employees cannot 
fulfill the intent of the Inspector General Act. I would like to hear 
your thoughts on the objective of making the Offices of Inspector 
General more efficient and true to their mission through consolidation.

        Answer. I concur with the concept of consolidation for the OIGs 
        that employ a limited number of staff. When such a 
        consolidation does in fact take place, it will be incumbent on 
        the accepting larger OIG to make sure that the mission of the 
        smaller agency remains a paramount concern and is not relegated 
        to a lesser status of importance.

    I feel that S. 870 addresses many of the issues the IG community 
has faced in the last 10 years. Please feel free to contact me if there 
are any questions.

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