[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





 IMPROVING IG FUNCTIONALITY AND INDEPENDENCE: A REVIEW OF LEGISLATIVE 
                                 IDEAS

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT EFFICIENCY
                        AND FINANCIAL MANAGEMENT

                                 of the

                              COMMITTEE ON
                           GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 14, 2004

                               __________

                           Serial No. 108-205

                               __________

       Printed for the use of the Committee on Government Reform


  Available via the World Wide Web: http://www.gpo.gov/congress/house
                      http://www.house.gov/reform


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana                  HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut       TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana              CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California                 DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky                  DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia               JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania    WM. LACY CLAY, Missouri
CHRIS CANNON, Utah                   DIANE E. WATSON, California
ADAM H. PUTNAM, Florida              STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia          CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee       LINDA T. SANCHEZ, California
NATHAN DEAL, Georgia                 C.A. ``DUTCH'' RUPPERSBERGER, 
CANDICE S. MILLER, Michigan              Maryland
TIM MURPHY, Pennsylvania             ELEANOR HOLMES NORTON, District of 
MICHAEL R. TURNER, Ohio                  Columbia
JOHN R. CARTER, Texas                JIM COOPER, Tennessee
MARSHA BLACKBURN, Tennessee          BETTY McCOLLUM, Minnesota
PATRICK J. TIBERI, Ohio                          ------
KATHERINE HARRIS, Florida            BERNARD SANDERS, Vermont 
                                         (Independent)

                    Melissa Wojciak, Staff Director
                   David Marin, Deputy Staff Director
                      Rob Borden, Parliamentarian
                       Teresa Austin, Chief Clerk
          Phil Barnett, Minority Chief of Staff/Chief Counsel

     Subcommittee on Government Efficiency and Financial Management

              TODD RUSSELL PLATTS, Pennsylvania, Chairman
MARSHA BLACKBURN, Tennessee          EDOLPHUS TOWNS, New York
STEVEN C. LaTOURETTE, Ohio           PAUL E. KANJORSKI, Pennsylvania
CANDICE S. MILLER, Michigan          MAJOR R. OWENS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
KATHERINE HARRIS, Florida

                               Ex Officio

TOM DAVIS, Virginia                  HENRY A. WAXMAN, California
                     Mike Hettinger, Staff Director
                 Larry Brady, Professional Staff Member
          Mark Stephenson, Minority Professional Staff Member


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 14, 2004....................................     1
Statement of:
    George, J. Russell, Inspector General, Corporation for 
      National and Community Service.............................    19
    Gianni, Gaston L., Jr., Inspector General, Federal Deposit 
      Insurance Corporation......................................     3
    Snyder, Barry R., Inspector General, Federal Reserve Board...    22
Letters, statements, etc., submitted for the record by:
    Cooper, Hon. Jim, a Representative in Congress from the State 
      of Tennessee, prepared statement of........................    36
    Gianni, Gaston L., Jr., Inspector General, Federal Deposit 
      Insurance Corporation, prepared statement of...............     6
    Platts, Hon. Todd Russell, a Representative in Congress from 
      the State of Pennsylvania, prepared statement of...........     2
    Towns, Hon. Edolphus, a Representative in Congress from the 
      State of New York, prepared statement of...................    42

 
 IMPROVING IG FUNCTIONALITY AND INDEPENDENCE: A REVIEW OF LEGISLATIVE 
                                 IDEAS

                              ----------                              


                        WEDNESDAY, JULY 14, 2004

                  House of Representatives,
Subcommittee on Government Efficiency and Financial 
                                        Management,
                            Committee on Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:35 p.m., in 
room 2247, Rayburn House Office Building, Hon. Todd R. Platts 
(chairman of the subcommittee) presiding.
    Present: Representatives Platts, Towns, and Blackburn.
    Also present: Representative Cooper.
    Staff present: Mike Hettinger, staff director; Larry Brady 
and Tabetha Mueller, professional staff members; Amy Laudeman, 
legislative assistant; Mark Stephenson, minority professional 
staff member; and Cecelia Morton, minority office manager.
    Mr. Platts. The Subcommittee on Government Efficiency and 
Financial Management will come to order.
    Because of our delay in getting started with the votes on 
the floor, I am going to dispense with the opening statement 
and others if they would like to submit them for the record, 
that would be great.
    I appreciate our three witnesses being here today as kind 
of a followup to our hearing last October on the 25th 
anniversary of the Inspector General Act as we further explore 
how we can strengthen that act and better empower each of you 
and your colleagues in the 57 agencies and the IG offices to 
well serve the American public. Thank you for being here and I 
also want to thank each of you for your work day in and day out 
in very important roles in essence safeguarding American 
taxpayer dollars and ensuring the efficient and effective 
operation of the Federal Government.
    The insights that you shared in your written testimony 
certainly is appreciated both on the general premise of how we 
can improve the Inspector General Act and also our colleague, 
Congressman Cooper's proposed legislation. We look forward to 
your testimony here today and a chance for Q&A.
    [The prepared statement of Hon. Todd Russell Platts 
follows:]
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    Mr. Platts. We are going to go right into your statements, 
so will you stand so you can be sworn in.
    [Witnesses sworn.]
    Mr. Platts. We have a general 5 minute guideline. We will 
run the clock to give you some guidance but as we discussed 
before, we understand you have some substantive knowledge to 
share and may run over your time limit and we won't be cracking 
the gavel down on you.
    We are honored to have three of our IGs with us. We will go 
in order, Mr. Gianni first, then Mr. Snyder and Mr. George in 
their opening statements.
    We will begin with you, Mr. Gianni.

STATEMENT OF GASTON L. GIANNI, JR., INSPECTOR GENERAL, FEDERAL 
                 DEPOSIT INSURANCE CORPORATION

    Mr. Gianni. Thank you, Mr. Chairman.
    Mr. Chairman, members of the subcommittee, on behalf of the 
Inspector General community, we thank you for your support of 
the Inspectors General over the years. We appreciate your 
interest in our work and your leadership in seeking ways to 
enhance our efforts. My colleagues and I are pleased to be here 
today to discuss IG functionality and independence and the 
importance of the IG Act.
    As you know, last October marked the 25th anniversary of 
the IG Act. At that time and many times over the past 25 years, 
the IG community has explored opportunities for improvement. In 
fact, we are here today to offer our impressions of the bill, 
``Improving Government Accountability Act'' introduced by 
Representative Jim Cooper last fall. Representative Cooper's 
bill, H.R. 3457, serves as an excellent starting point to begin 
a discussion of improvements and enhancements to an already 
effective law. In general, we support the thrust of the bill 
and have some refinements and additional ideas we would like to 
share with you today. We sincerely appreciate the Congressman's 
leadership and support in this area and look forward to 
continuing this dialog.
    At this time, I would like to take this opportunity to 
briefly introduce myself and my colleagues. I am the IG at the 
Federal Deposit Insurance Corporation. I have served in that 
capacity since April 1996. I am 1 of 29 Presidentially 
appointed, Senate-confirmed IGs who are members of the 
President's Council on Integrity and Efficiency. Created by an 
Executive order in 1981, the PCIE provides a forum for IGs, 
OMB, and other Federal officials to work together and 
coordinate their professional activities. I have also served as 
Vice Chair of this Council since May 1999.
    At the far end of the table is Russell George, the IG of 
the Corporation for National and Community Service, and he has 
served in that capacity for the past 2 years. He is currently 
the administration's nominee for the Treasury IG for Tax 
Administration. Mr. George is a member of the PCIE and began 
serving as the PCIE Legislative Committee Chair in January of 
this year. Prior to that time, Mr. George served as staff 
director for Representative Steve Horn who, while he was here, 
was chairman of this subcommittee.
    To my immediate left is Barry Snyder. Since 1998, Mr. 
Snyder has served as the IG for the Board of Governors of the 
Federal Reserve System. He is 1 of 28 statutory IGs who are 
appointed by their agency head in certain designated Federal 
entities and are part of the Executive Council on Integrity and 
Efficiency. Similar to the PCIE, the ECIE was created by an 
Executive order in 1992 and provides the same forum as the 
PCIE. Mr. Snyder has served as the ECIE Vice Chair since 
October 1999.
    As we discussed with members of your staff, while we are 
leaders within our respective councils, we are here today 
representing the views of the majority of the Federal IGs who 
comprise the two councils. We are not speaking on behalf of 
these councils. As such, each council includes individuals who 
are not IGs and have not endorsed the positions or views that 
we have taken today or will be taking.
    Before we get into discussing our immediate business for 
being here, I would like to talk about the impact of the IG 
community. For the past 25 years, IGs have served as 
independent voices to their agency heads and the Congress by 
identifying opportunities and promoting solutions. The IG Act 
is a good law about good Government and has stayed the test of 
time. Since 1978, the basic tenets of the act have remained 
constant and strong.
    The act creates an inherent tension between the executive 
and the legislative branches of government. Specifically, IGs 
must keep both the agency head and the Congress fully and 
currently informed about programs or operational deficiencies. 
This dual reporting requirement is critical and creates a fine 
lin--balancing the needs and requests of two masters--but that 
is the beauty of the act and why it has served the Congress, 
the administration and the public so well for so long.
    The act has had profound impact on our Government by 
improving operations of Federal agencies, focusing attention on 
governmentwide initiatives, providing continuity, and ensuring 
institutional knowledge and expertise. By virtue of our 
independence and non-partisan status, 57 IGs currently protect 
the integrity of the Government; improve program efficiencies 
and effectiveness; and prevent and detect waste, fraud, and 
abuse in Government agencies.
    Each year OIG audits, inspections and evaluations identify 
billions of dollars in potential savings. Our investigations 
lead to thousands of prosecutions or other actions as well as 
billions of dollars in potential recoveries for violations of 
Federal criminal law. As evidenced in our fiscal year 2003 
progress report to the President, which we are releasing today, 
we have continued that mission. We are reporting nearly $18 
billion in potential savings, over 6,600 successful 
prosecutions, 7,600 individuals or businesses suspended or 
debarred, more than 2,600 civil or personnel actions, and 
nearly 200,000 complaints received through our OIG hotlines. In 
addition, we have closed about 22,000 investigations and 
testified before Congress 80 times. Although impressive, these 
numbers do not tell the entire story. Success and impact can be 
measured in many different ways. These notable statistics are 
the successes which are tangible and easy to quantify.
    However, another way to assess how successful the IG Act 
has been and will continue to be rests on the fact that IGs are 
repeatedly asked by their agencies and the Congress to make 
recommendations for improving agency performance and uncovering 
fraud, waste, and abuse. The impact and added value we bring to 
bear on important issues affecting our Government speaks to our 
success.
    The Congress has seen fit to expand the duties of the IG 
beyond its original mission. Through general management laws 
originated in this committee, such as the CFO Act, the Reports 
Consolidation Act, and more recently the Federal Information 
Security Management Act, Congress has assigned new 
responsibilities.
    The administration has encouraged us to get involved with 
assisting the agencies in implementation of the President's 
management agenda. We interpret this to mean that our work adds 
value. It is improving the efficiency, effectiveness, and 
integrity of our Government.
    Mr. Chairman, that completes my opening remarks. Mr. George 
will go next with your permission and provide the perspectives 
of the IG community as to where we want to go legislatively.
    [The prepared statement of Mr. Gianni follows:]

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    Mr. Platts. Thank you for your statement.
    Mr. George, before you begin, I just want to recognize our 
ranking member, Mr. Towns, from New York, as well as our Vice 
Chair, Ms. Blackburn, from Tennessee and also we are glad to be 
joined by our colleague, Mr. Cooper from Tennessee, the sponsor 
of the legislation which we will discuss today.
    Welcome back to the committee and we appreciate your great 
service with Chairman Horn in the previous sessions of 
Congress. I am certainly doing my best to try to fill his shoes 
as the new Chair here. Welcome.

STATEMENT OF J. RUSSELL GEORGE, INSPECTOR GENERAL, CORPORATION 
               FOR NATIONAL AND COMMUNITY SERVICE

    Mr. George. Thank you, Mr. Chairman.
    Mr. Chairman, Mr. Towns, Ms. Blackburn, Mr. Cooper, I 
really appreciate the opportunity to return to this committee. 
It was an honor serving with Chairman Horn for those many years 
and I am proud of the accomplishments that he achieved while 
serving in that capacity and am pleased to see that under your 
leadership, this committee is continuing to hold the Federal 
Government to account and helping to make it more efficient.
    Either because of my prior experience or in spite of it, I 
was selected as chairman of a committee of IGs that has been 
considering what changes, if any, are needed to the Inspector 
General Act. IGs from both the President's Council on Integrity 
and Efficiency [PCIE] and the Executive Council on Integrity 
and Efficiency [ECIE] were involved in this process. I am here 
to discuss what the majority of IGs believe are positive 
aspects of Representative Cooper's bill and will also discuss 
possible modifications to it based on the consensus of the IG 
community.
    As Mr. Gianni noted, these opinions should not be 
considered the official position of the PCIE or the ECIE, 
rather these are opinions of the majority of IGs in the IG 
community.
    Representative Cooper's bill proposes to allow IGs to only 
be removed for specific reasons. It also creates terms of 
office for IGs. The IGs support these protections. Currently, 
most IGs do not have terms of office, the only condition on 
removal of an IG appointed by the President is that the 
President must notify Congress of the reasons for removal. The 
same holds true for an IG appointed by an agency head. The 
agency head simply has to notify the Congress of a reason for 
removing that person.
    The IGs reached a consensus that adding removal for cause 
criteria to the IG Act would enhance our independence. Removal 
protections would shield the IG from reprisal for conducting 
essential but potentially unpopular investigations and audits. 
The IGs generally agree that the five grounds for removal 
listed in H.R. 3457 strike the appropriate balance between 
allowing substandard IGs to be replaced and protecting IGs from 
undue repercussions.
    Representative Cooper also proposes amending the IG Act to 
establish a term of office of 7 years for IGs. The majority of 
IGs support a term of office because, like removal for cause 
protection, it would enhance our independence. A number of 
positions with analogous functions in the executive branch have 
fixed terms of office. We compared those positions to the role 
of IGs and determined that a 9 year term of office would be 
most consistent with other terms of office across the 
Government.
    As I mentioned, there are currently two councils of IGs, 
the PCIE and the ECIE. As Mr. Gianni noted, each council was 
established by Executive order. The basic mission, 
responsibilities and authorities for the two councils are 
essentially the same. These councils provide a forum for the 
IGs, OMB and other Federal officials to work together to 
address oversight issues that transcend individual Government 
agencies.
    Representative Cooper's bill would create a single, unified 
council of IGs it would include the current membership of the 
PCIE and ECIE. The proposed council would receive an annual 
appropriation to carry out its administrative functions. The 
IGs support this idea very strongly. An IG Council that is 
codified and funded by an annual appropriation would enhance 
communications among IGs and their staffs and improve the 
efficiency and effectiveness of joint activities between IG 
offices. It would also increase the consistency of training for 
IG staffs, centralize initiatives that benefit the entire IG 
community, and strengthen our relationships with Congress by 
providing an official forum for contact for the entire IG 
community. In addition to Representative Cooper and the IGs, 
Comptroller General David Walker also expressed support for the 
codification of the councils, as he so testified before the 
subcommittee last year.
    While the IG community strongly supports codifying the 
council, we would recommend some refinements to H.R. 3457. 
First, the bill replaces the Deputy Director for Management of 
OMB as the chairperson of the proposed council. The IGs believe 
that the Deputy Director should remain in a leadership role on 
the proposed council to preserve the existing links between the 
IGs and the administration. Second, we suggest the proposed IG 
council be given responsibility to maintain training academies 
for IG staff. Representative Cooper's bill does not include 
this responsibility as a council duty. The training academies 
provide a vital function for the IG community and should be 
maintained by the proposed council.
    We also recommend a third refinement to H.R. 3457. The 
majority of IGs agree that the Integrity Committee which is 
currently a committee of the PCIE should be codified as part of 
the proposed IG council. The Integrity Committee serves as an 
independent body that investigates allegations against IGs and 
senior staff members. Establishing the Integrity Committee by 
statute would better formalize its functions to ensure that 
allegations against IGs and senior staff are handled 
appropriately.
    Finally, H.R. 3457 does not include the Offices of 
Inspector General for the Central Intelligence Agency, which is 
part of the PCIE, and the Government Printing Office, which is 
part of the ECIE. These two offices have long participated in 
IG community activities and would like to be included in the 
proposed council. With these changes, the IGs strongly support 
a codified IG council.
    Representative Cooper's bill also addresses the issue of 
personnel flexibilities for IGs. Like many other agencies, the 
IGs are keenly interested in more flexible personnel management 
authorities. As our role has expanded in both mission and 
complexity, it has become clear that additional personnel 
authority is needed. The bill would create a personnel 
management system under Title 5 for all OIGs under the IG Act. 
While the IG community supports personnel flexibilities, we 
disagree with this approach. Many of the OIGs are not covered 
by Title 5 and already possess certain personnel authorities 
that would be relinquished under the current language of H.R. 
3457.
    As an alternative, the majority of IGs support a proposal 
that would authorize individual OIGs to apply to the Office of 
Personnel Management for certain personnel flexibilities. Such 
flexibilities include pay authorities such as pay banding, 
merit-based pay and market-based pay, allowing IGs to more 
highly compensate individuals for a limited number of critical 
positions, providing IGs more flexibility in hiring and 
performance management by expanding the use of recruitment and 
retention bonuses, and permitting IGs to extend probationary 
periods beyond 1 year. These flexibilities would allow IGs to 
recruit and retain an even more highly skilled and effective 
work force.
    In addition to these flexibilities, several other personnel 
issues exist that should be mentioned. Representative Cooper 
identified one of these issues in his bill which permits IGs to 
deal directly with OPM on the allocation of Senior Executive 
Service positions. We support this provision. Along similar 
lines, we also suggest that the proposed IG Council be 
responsible for recommending Senior Executives to OPM for the 
Presidential Rank Award.
    Mr. Cooper's bill proposes allowing IGs to apply directly 
to OPM for the authority to enter into voluntary separation 
agreements. The IG community supports this proposal. The 
community also believes that we would benefit from the 
authority to enter into voluntary early retirement agreements.
    Finally in the area of personnel, we have identified an 
issue of particular importance to the Designated Federal Entity 
[DFE] IGs. The DFE IGs are part of the ECIE, as I stated 
before. Currently, the head of the DFE organization can staff 
the IG position at a grade inferior to other management 
officials, causing at least the perception of unequal status. 
We suggest that Congress consider a provision that would 
require the IGs of these agencies to be staffed at a grade 
level comparable to the most senior staff members of the 
respective designated Federal entity.
    Quickly switching gears from personnel issues, 
Representative Cooper's bill also includes provisions on the 
submission of budget requests and the submission of semiannual 
reports. As for budget requests, the bill would permit each IG 
to transmit an appropriation request directly to OMB and the 
Congress. The IGs agree that such authority would be beneficial 
as long as it remains discretionary. On the issue of semiannual 
reports, the numerous Offices of Inspectors General submit 
semiannual reports to Congress twice each year. The reports 
provide updates on IG work during the previous 6 months. The 
bill would change the submission dates of the semiannual 
reports from a fiscal year basis to a calendar year basis. The 
IGs recommend that submission of semiannual reports remain on a 
fiscal year basis since most of our offices--like the rest of 
the Federal Government--operate using a fiscal year. If 
Congress were to require OIGs to submit semiannual reports on a 
calendar year basis, this would cause us to have to keep two 
sets of records: one based on the fiscal year and the other 
based on the calendar year.
    On a separate issue related to the semiannual report, the 
IGs suggest that the IG Act be amended so that the results of 
inspections and evaluations are included in the semiannual 
report. Many offices of Inspector General now conduct 
investigations, inspections and evaluations, and we believe the 
semiannual report is a useful way to inform Congress of the 
results of our inspections and evaluations.
    In addition to the ideas put forward by Representative 
Cooper in his bill, the IGs have developed a general consensus 
that two additional legislative changes would strengthen our 
ability to curb waste, fraud and abuse. These changes are not 
currently included in H.R. 3457, but would be valuable to the 
IG community. First, we recommend an amendment to the Program 
Fraud Civil Remedies Act. Congress enacted this legislation to 
enable agencies to recover small dollar amounts resulting from 
false claims and statements that would not otherwise be 
recovered. Currently the designated Federal entity agencies, 
which are typically smaller agencies, cannot use the mechanisms 
provided in this act. We recommend allowing the DFE agencies to 
use the Program Fraud Civil Remedies Act so they can have an 
additional tool to recover taxpayer losses resulting from 
fraud.
    Second, the IGs recommend a minor adjustment to the IG Act 
relating to the scope of our subpoena authority. When Congress 
passed the IG Act in 1978, the best evidence of fraud, waste 
and abuse was found in documentary evidence such as books and 
paper records. Now, however, evidence critical to the IG 
investigations can be found in physical evidence such as 
computer hard drives, computer disks, videotapes and other 
recording devices. Under current law, some contend that it 
could be argued that the scope of our subpoena authority is 
limited to paper records of documentary evidence. To address 
this issue, we recommend that Congress amend the IG Act to 
clarify that IGs are authorized to subpoena physical evidence 
in addition to documentary evidence.
    In conclusion, Mr. Chairman, these legislative changes will 
further enable the IGs to be strong, independent voices for 
integrity, accountability and transparency in the Federal 
Government. I want to thank you for your indulgence and would 
like now to turn to my colleague, Barry Snyder, who will 
emphasize some of the areas I mentioned that are of particular 
importance to the Designated Federal Entity IGs.
    Thank you, Mr. Chairman.
    Mr. Platts. Thank you, Mr. George.
    Mr. Snyder.

   STATEMENT OF BARRY R. SNYDER, INSPECTOR GENERAL, FEDERAL 
                         RESERVE BOARD

    Mr. Snyder. Thank you.
    Mr. Chairman, Ranking Member Towns and Congressman Cooper, 
I too appreciate the opportunity to meet with you today to 
discuss ways to improve the functionality and independence of 
the IGs. As Gaston mentioned earlier, I am the Inspector 
General of the Board of Governors of the Federal Reserve System 
and have served in that position since 1998. I have also served 
as the Vice Chair of the ECIE for the past 4 years. My comments 
today reflect the consensus of the majority of the IGs on that 
council; but as stated earlier, they are not the official 
position of the ECIE.
    The ECIE membership currently includes 28 statutory 
Inspector Generals who were appointed by their agency head in 
certain designated Federal entities [DFEs]. These agencies are 
somewhat unique. They are typically regulatory entities, 
Federal commissions, independent corporations and boards and 
foundations. They often have different funding, administrative 
and personnel authorities and practices, different 
congressional oversight processes, separate governance and 
oversight structures, and they often perform regulatory and 
other missions that have a significant impact on the private 
sector and the public.
    In general, the DFE IGs support Congressman Cooper's bill 
with the additions that Russell has talked about and in my 
brief remarks today, I would like to highlight and amplify, 
from a DFE IG perspective, some of the points that have been 
raised.
    With respect to the removal for cause and term limits, as 
you recall from last October's hearing, we discussed in some 
detail GAO's report on potentially consolidating many of the 
DFE IGs with those of larger Presidentially appointed IGs. I 
stated then, and the DFEs continue to believe today, that 
oversight of their respective agencies would be greatly 
diminished under that concept. However, we understand that 
there continues to be a perception that the DFE IGs' 
independence could be hampered because of the current 
appointment process. As I indicated last October, the DFE IGs 
strongly support adding a removal for cause provision to the IG 
Act to overcome this perception. Thus, the majority of the DFE 
IGs support the provisions in H.R. 3457 to strengthen IG 
independence by specifying the grounds for removal and 
establishing a term of office.
    Regarding the PCIE/ECIE codification, the majority of the 
IGs believe that H.R. 3457's provisions to statutorily 
establish a single Inspector General Council would strengthen 
the efficiency and effectiveness of current council operations. 
In addition to suggested additions that Russell presented, 
there may be a need, however, to ensure that the issues that 
may be unique to DFE IGs that come up from time to time have a 
way of being represented in council deliberations. To ensure 
both Presidentially appointed and DFE IGs have a voice, we 
support adding a provision that if the Chair of the Council is 
elected from among the Presidentially appointed IGs, then the 
Vice Chair would be appointed by the Chair from among the DFE 
IGs and vice versa.
    Regarding personnel flexibilities, given that the IG Act 
currently requires the DFE IGs to follow the personnel 
practices of their agency, many DFE IGs already possess some 
level of personnel flexibility such as pay banding, pay for 
performance, market-based compensation, and recruiting and 
retention incentives. As a result, the DFE IGs support an 
alternative proposal that authorizes individual IGs to apply to 
OPM for certain personnel authorities should their agency not 
already possess them.
    As Russell mentioned, Congress may also want to consider 
adding another personnel-related change to the IG Act that 
would increase the stature of some DFE IGs by bringing their 
positions in line with other officials who report to the agency 
head such as the general counsel or senior program or 
administrative officials. With such a provision, many of the 
DFE IGs believe that their ability to command the requisite 
agency attention on findings and recommendations would be 
enhanced.
    Last, with respect to extension of the Program Fraud and 
Civil Remedies Act [PFCRA], it is our understanding that 
Congress intended to provide all IGs with the authority when 
PFCRA was enacted in 1986. However, since the DFE IGs were 
created 2 years later by the 1988 amendments to the IG Act, 
they are not currently covered. Many of the DFE IGs would 
clearly benefit from using PFCRA to recoup taxpayer dollars 
because they often are confronted with recovery amounts less 
than $150,000. This proposal has virtually unanimous support 
from the entire IG community and could be achieved with a very 
simple adjustment to that act.
    In closing, Mr. Chairman, this concludes our statement. On 
behalf of my colleagues here today and the IG community as a 
whole, we would like to thank you and the members of your 
subcommittee for holding this hearing and allowing us to share 
our thoughts on H.R. 3457. Once again, we appreciate your 
support for the IG community and our mission, and look forward 
to continuing this dialog.
    We would also like to again acknowledge Congressman Cooper 
for his leadership in introducing legislative changes to the IG 
Act that would enhance our effectiveness as IGs.
    At this time, we would be happy to respond to any questions 
that you, Mr. Towns or Mr. Cooper may have.
    Mr. Platts. Thank you, Mr. Snyder.
    My thanks to all three of you for your comprehensive 
written testimony and your highlighting of that testimony here 
today.
    We will begin with questions and do roughly the 5 minute 
rule but I am not going to be real strict on that but just to 
give a rotation of opportunities here.
    The various proposals about strengthening the IG Act and 
the independence, one aspect of that, the structure of how IGs 
are appointed, you all kind of touched on as part of your 
testimony whether how they are appointed or the term of office, 
removal for cause. What would you suggest be Congress' 
guidelines as far as looking at perhaps some changes with 
whether an agency IG is a Presidential appointee with Senate 
confirmation or an agency head appointee? What should we 
specifically look at in the sense of the type of work involved, 
the size of the entity? There is consideration with Amtrak, 
with the Postal Service, the National Science Foundation that 
perhaps IGs should be at the Presidential level. What criteria 
would you advise we most importantly consider?
    Mr. Gianni. We probably have three different positions here 
as to how to approach this. Let me take a crack at it from my 
perspective. My office at one point in time was a DFE. It was 
created in 1988 and at the same time the Congress created the 
Resolution Trust Corporation and it had a Presidentially 
appointed IG. When the Resolution Trust Corporation went into 
sunset under the RTC Completion Act, the Congress decided that 
given the nature of the issues that were being dealt with by 
the FDIC and the holdover from the RTC, this position needed to 
be elevated to a Presidential appointment.
    As I look at this, I think if I were where you are, I would 
be looking at the risk involved with the agency in question and 
think about whether there were conflicts between the IG and the 
agency. I would also take into consideration the very things 
you said, the size and the responsibility of the agency and the 
dollars that are being overseen by the Inspector General. That 
would be my first take on that issue.
    Mr. Snyder. I come at it a bit differently. Obviously, we 
sit at different points of view here. I think the criteria is 
not as fixed as one might say on this. Gaston talked about 
three that are possibilities. There have been a number of 
situations where IGs have moved from being DFEs to 
Presidentially appointed often because of Gaston's specified 
second criteria, that there has been some conflict associated 
with the IG and the DFE.
    I am not sure that conflict would be there if we had a 
removal for cause provision to deal with the independence 
issue. While GAO has, for several years, talked about elevating 
some of the existing DFE IGs, we are not quite sure whether the 
problem needs to be addressed that way or through the 
provisions that are in Congressman Cooper's bill related to 
removal for cause.
    As far as duties and responsibilities, all 57 of us have 
the same duties and responsibilities, authorities and what have 
you. There is a slight change now with the Presidentially 
appointed IGs having direct law enforcement authority but many 
of us on the DFE side obtain that authority on a case-by-case 
basis as we need it. The frequency of our need is not 
necessarily as great as it is on the Presidentially appointed 
side. Aside from that difference, we all are essentially doing 
the same work focused on our individual agencies.
    GAO has talked about size as a criteria. They have used the 
size of the IGs' Office in comparison between DFEs and 
Presidentially appointed. One can also look, as Gaston said, at 
the size of the agency. I think you would get a different mix 
potentially on how many of those you might want to make 
Presidentially appointed.
    I think history shows that the Congress started with the 
Cabinet level departments as their first criteria and when the 
1988 amendments were passed establishing the DFE IGs, the 
Congress recognized that given the makeup of the DFE agencies 
themselves, the independence of their corporations, boards and 
what have you, maybe it would be better for the agency head to 
make those selections. Nevertheless, having a provision that 
would also ensure their independence, like the removal for 
cause, would be a good thing.
    Mr. George. Mr. Chairman, I want to associate my comments 
with those of the other two individuals, but I would just add 
that my office also had its status changed from ECIE to PCIE. 
One thing I would note is that any decision along these lines 
implicates GAO's position--is too strong a word--but at least 
conclusion in the report last year discussing the need to 
perhaps consider consolidating Offices of Inspectors General, 
so that would be a factor that I would suggest Congress look at 
before rendering any changes to NSF or Amtrak.
    Mr. Platts. It seems if we are after independence, if we 
are not going to have a fixed term of office, removal for 
cause, then getting away from agency head appointment is more 
necessary. If we have that fixed term, that helps establish 
that independence because you know they are there has to be 
substantive reason.
    Mr. Snyder. I would agree in part. I would also say that 
oftentimes this comes down to not so much the appointment as 
the operation. To the extent that agency heads understand, 
appreciate, and grasp how the IG concept should work, then the 
relationships are usually there and the independence question 
is not that strong. They want the objective, third-party 
opinion about how things are going. To the extent that DFE 
heads might get defensive about any criticism that we might 
come forward with, then you could potentially run into the 
problem. So it may not be so much the appointment as it is the 
operational respects that come into play.
    Mr. Platts. Thank you.
    Mr. Towns.
    Mr. Towns. You made the point that Mr. Cooper's bill was a 
good starting point. What do you think needs to be done to 
strengthen it or make it a much more effective piece of 
legislation?
    Mr. Gianni. Clearly we support the thrust of the bill and 
the areas that are being addressed. I would say we are making 
suggestions for some refinements rather than changing the 
nature and scope in some areas. Clearly, I think terms of 
office removal for cause are going to be the most controversial 
parts of this bill. I am not here representing the 
administration but have been informed by the administration 
that this is a very sensitive matter and I believe Mr. Johnson 
indicated that the last time he was here testifying, that any 
administration, I believe, is going to be leery of giving up 
some of their authority over selecting the leaders for our 
Government. So having said that, I also raise the issue that 
the only reason that the IG Act came into existence is because 
the Congress thought it was important to have an independent 
Inspector General and that it is the Congress that took the 
initiative to create this kind of an organization. It was not 
the administration coming forth saying it wanted an independent 
Inspector General. I don't look for the administration, to come 
forward, any administration to come forward to suggest 
strengthening the powers or authorities of the Inspectors 
General.
    Personally, having lived in this position for over 8 years 
and embracing the IG concept and what we can contribute to our 
Government, anything that the Congress can do to further 
strengthen the position of the Inspector General would be 
appreciated.
    Mr. Towns. Mr. Snyder, at the hearing we had on the IG last 
year, David Walker, the Comptroller General made a comment 
about the fact that the DFE IGs were appointed could be removed 
by the agency head creating at minimum an appearance of a 
conflict of interest. I wonder if you would like to respond to 
that observation?
    Mr. Snyder. Yes. I think in some instances, that perception 
is there, but as I said earlier, a lot of these designated 
Federal entities were boards, corporations, and councils, if 
you will. The appointment may be made by a single individual, 
or it may be made by all the board members. Sometimes that can 
be up to 25 different members of the board. Removal, I doubt 
seriously, would be made in those situations by one individual; 
it would probably take a consensus of the board to do that. I 
think as GAO Comptroller General Walker said, there may be 
instances, and I think he mentioned the Postal Service, where 
there is a board involved and then the situation may not be as 
severe as might be on the surface when there is just a single 
agency administrator that is appointing the DFE IG. But as I 
have stated here today, I think we can overcome some of this 
with a removal for cause provision such as the one that has 
been proposed.
    Mr. Towns. Mr. George, you have been on both sides, you 
have been up here and over there and I have checked your 
background and you have been elsewhere too. Let me ask, what do 
you think we need to do on this side to really strengthen this 
because I think we all agree there should be some changes. What 
changes do you think should happen?
    Mr. George. That is very good question, Mr. Towns, and I 
may request an opportunity to further elaborate on this 
response afterwards. Let me just say to preface my answer, I 
truly, truly wish I had this experience before coming to the 
Hill because there are really so many areas where I think 
Congress could make changes to better enable IGs to do their 
jobs. A lot of them have to do with reporting requirements. In 
many, many instances, the issue is resources. I have an office 
of approximately 25 individuals which must oversee an agency 
that is expanding daily and has offices, or at least 
beneficiaries, nationwide. I think, given the opportunity to 
respond in writing, I will give a more thorough response if 
that is OK.
    Mr. Towns. I encourage the chairman in getting that in 
writing because the fact that he has had experience on both 
sides, I think he could really be very helpful to us in making 
certain that we really take it to the level that it should go.
    I also want to commend my colleague, Congressman Cooper, 
for his insight in terms of recognizing the fact there is a 
problem that we need to address because many of us have heard 
stories where the IG starts to do something and the next thing 
he knows, he is fired. There have been situations like that, so 
I think no IG should have to work in that atmosphere and 
climate. He should have flexibility and authority to move, so I 
would welcome your comments and suggestions.
    On that note, Mr. Chairman, I yield.
    Mr. Platts. Thank you, Mr. Towns. We would welcome that 
followup from you, Mr. George or all of you if you have 
followup items you want to share with us, we will keep the 
record open for 2 weeks.
    Mr. Cooper. I also would like to recognize Representative 
Cooper for his work on this and for participating both last 
year and again today as we try to move forward on developing a 
consensus of what legislation we can embrace and try to act on.
    Mr. Cooper. Thank you, Mr. Chairman. I appreciate your 
leadership on this issue and on many other issues as well. I 
appreciate your kind words and the words of my friend from New 
York, Mr. Towns.
    First, let me say it shouldn't be called the Cooper bill. 
It has always been the Cooper-Shays or Shays-Cooper bill but 
our friend from Connecticut has played a very vital role in 
this process. It was intended from the start to be completely 
bipartisan and completely good government. I am grateful for 
the work that our IG friends have done over the years in saving 
the American taxpayer money and catching the bad guys. This is 
a part of government that we should all be proud of and we 
should be here helping you do your mission. That has always 
been my intention and I would like to offer here and now, let 
us accept all your amendments wholesale, without objection and 
let us move this bill because I am afraid we are all going to 
die of old age before anything happens.
    The chairman mentioned holding the record open for 2 weeks. 
That is almost the legislative time left in this session, so I 
would urge us to incorporate these amendments and at the 
beginning of the next Congress, let us move the bill.
    I think the main caveat I would have is that any executive 
branch, Republican or Democrat or whatever other parties may 
develop, will not necessarily be enthusiastic about this bill. 
The impetus has to come from Congress. We have to exercise the 
oversight and have the push to get this through. Having fixed 
terms and having independence should not be objectionable to 
anybody of any political persuasion. All we are trying to do 
here is the right thing.
    We haven't sought co-sponsors on this. So far it has been 
more or less a trial balloon as we awaited the maturing of the 
opinion of the IGs and let it float out there. I would like to 
state my intention that early in the next Congress that we move 
this and move this rapidly so that we can all be proud of our 
role in helping the IGs have an even more successful second 25 
years than they did in their first 25 years because it is a 
record of terrific accomplishment, a record of terrific 
excitement, although sometimes that excitement isn't conveyed 
in hearings like this. I was thinking I was grateful there were 
no cameras here because we have made a great topic look so 
boring that I am not sure the average taxpayer would appreciate 
the billions of dollars saved and the fraud that has been 
caught.
    Let us celebrate their accomplishments and the next 25 
years can and should be even better if we go ahead and agree on 
these proposed amendments, redraft the bill, let us get it out 
there and it will have a lower number next year, it won't be 
H.R. 3457. Let us get the Government Reform Committee to move 
this thing.
    Thank you, Mr. Chairman.
    Mr. Platts. Thank you, Mr. Cooper.
    There is often the sentiment that the work of this 
subcommittee is such important work. When we talk about 
billions of dollars of our constituents' funds, it certainly is 
important. I look forward to getting the feedback today and 
both the PCIE and ECIE recommendations and positions and 
incorporating those in the work you have already done in your 
legislation as we kind of hammer out what that consensus, as 
you said, bipartisan, good government piece is and I know Mr. 
Towns hopes he is in this seat and I am in his seat come 
January, and I want to assure you that I will continue to be 
kind to you when I remain in this seat.
    This is about good government and not about one party or 
the other, but just doing right by our citizens. I think where 
Mr. Cooper's bill has begun and some great feedback here and 
some followup that I have, some other questions, we can develop 
very strong bipartisan consensus legislation that I will share 
your excitement for moving in the 109th and just get the job 
done and move forward.
    I do want to followup. One of the things we agree on is 
removal for cause and the importance of that for the 
independence. In your written testimony you talk about the 
general support for the five criteria identified in the 
gentleman's bill but you say you would like to further discuss 
how to clarify those removal conditions. What do you mean or 
envision by clarifying? Is that adding some other specific or 
how we define those five? If you could expand on that from your 
written testimony, that would be great.
    Mr. George. Part of it is most definitely a definition 
expansion, Mr. Chairman.
    Mr. Gianni. I think we would like to work with the 
committee to bring some further clarity to the terms. We find 
that when the terms aren't as clear or putting it another way, 
they may be clear but subject to interpretation and that is 
where we may get into some difficulty. To the extent we can 
work with the subcommittee staff and put some clarification or 
parameters as to what the terms mean, the intent of the 
Congress in using those terms would be cleaner.
    Mr. Platts. For example, inefficiency being one of them, 
that there be something concrete so it doesn't leave kind of a 
loophole that removal for cause really could be you used one 
too many pens in doing your work, so you are inefficient and 
you are gone but something more specific and concrete is what 
you are envisioning?
    Mr. Gianni. Yes, sir.
    Mr. Snyder. Yes.
    Mr. George. That is exactly right. The other factors are 
quite clear but that one, as you noted, does provide ambiguity 
in terms of giving assurance to the IGs as to what he or she 
should or should not be doing.
    Mr. Platts. Mr. Cooper, what about what you envisioned and 
how that was to be acted upon, the inefficiency part of the 
definition?
    Mr. Cooper. I think the real question here is whether we 
let the best be the enemy of the good. We could work for 
months, maybe years on the perfect definition but what we did 
was copy the grounds for removal for the GAO Comptroller 
General of the United States. If it works for him, it will 
probably work here too. My sense is that the English language 
is incapable of achieving the level of precision that some of 
our IG friends would like to see. Sometimes the more you define 
something, the more loopholes are created. I don't think 
anybody would try to remove an IG without some good hard 
evidence, a lot more than using extra ink pens. To me we have 
to face a choice here of inventing a new definition or copying 
an old one. If someone can find a better one than for the 
Comptroller General, let me know and I will consider putting it 
in there but in the interest of speed and clarity, and also 
using precedents that may have been established in other 
situations, that is the fastest way to achieve the goal.
    Mr. George. Just to touch on that point, that may be the 
best solution, Mr. Cooper, maybe to leave the language but 
perhaps the committee report or a statement on the floor could 
provide examples or maybe even admonitions to people in terms 
of how that should or should not be used.
    Mr. Platts. Mr. George, with you and I both having law 
degrees, looking for specifics and you are right, it may be too 
exact sometimes. They drill that into you to try to cover all 
bases in that definition.
    It would be helpful if there are others that go beyond the 
Comptroller General definition for removal of cause you believe 
should be in there, you are communicating that to us 
individually or through the councils would be helpful as we try 
to work as a team here in putting together a consensus piece of 
legislation.
    Mr. Gianni. We will do that, sir.
    Mr. Platts. One of the proposals about the council and from 
a structural standpoint, having one council and I think Mr. 
Snyder, you mentioned if the Chair is a Presidential appointee 
and the Vice Chair, where does the Deputy Director of 
Management at OMB fit in as far as the structure of the one 
council if they combine the two?
    Mr. Snyder. I think Russell has the specifics but we were 
looking at more of an executive chair, if you will, for that 
position and having the day-to-day operations being done by the 
Chair or Vice Chair.
    Mr. George. The IGs envision the Deputy Director for 
Management in a leadership position because of the impact or 
influence that individual generally has within the executive 
branch, within the administration. It is helpful that, if 
problems arise in the IG community, the IGs have access to an 
individual with a direct voice in the decisionmaking process at 
OMB at the highest levels. The basic fact is that if there is a 
problem, the Deputy Director of Management is somebody who 
could help resolve it, as opposed to having to run a process 
that could go on forever and perhaps never actually reach a 
decisionmaking individual.
    Mr. Platts. So it is beneficial to keep him in the loop in 
some fashion because of his role within the administration?
    Mr. George. Exactly.
    Mr. Platts. His or her role?
    Mr. George. Yes.
    Mr. Platts. On the law enforcement, you mentioned the 
Presidential appointee having the authority case by case on the 
DFE and it kind of relates to other issues where you kind of 
get an opt-in like with the personnel policies. From the DFE 
perspective, is that something you would rather keep as an 
option or is there a benefit to having that same up front 
authority and if you can walk me through how you seek the 
authority on that case by case, make sure I understand that and 
which you think is most beneficial or would be best.
    Mr. Snyder. I think because of the nature of the programs 
that the DFEs are dealing with, the larger Presidentially 
appointed agencies or departments have a lot of grants, 
entitlements, procurements, if you will, whereas a lot of the 
other DFE agencies are regulatory in nature and may not have 
the same volume of those kinds of activities. So the 
opportunity or risk, as Gaston talked about, for potential 
wrongdoing, may be less in those entities or a different type 
of potential wrongdoing could occur there.
    The frequency with which we often go out and do 
investigations related to program activities may be different, 
so I think what we have done is when we need to have those 
authorities, then we make an application to the Department of 
Justice to get those and become Deputy U.S. Marshals in that 
process.
    As the FBI has changed its emphasis since September 11, all 
the IGs have been asked more and more to take on more 
investigative work than we have in the past. So the need for 
those authorities could change over time to be more on a 
recurring basis than what they are today.
    Mr. Platts. I take it there has never been much of a 
problem or an inconsistent approach to granting the authority 
once it is requested from Justice?
    Mr. Snyder. I can only speak from my own position on that. 
We have not recently had any issues along those lines given the 
nature of the allegations that we are dealing with. Others may 
have different stories to tell, and if you like, we could 
attempt to get some feedback on that and submit it to you later 
on.
    Mr. Platts. We would welcome that.
    On the proposal, and I would be interested from all three 
of you coming from both perspectives, on Postal Service, NSF, 
Federal Reserve about being elevated, your individual opinions 
on whether that is a wise idea and related to that is the fact 
that CIA and GPO are not statutorily included in the act and is 
that something we should be correcting even though they have 
their IGs and participate in the councils, is that something we 
should be looking at including in the legislation?
    Mr. Gianni. I spoke to my colleague at the Postal Service 
who at one point in time served in a number of positions within 
the PCIE and had been confirmed a number of times, been in a 
number of IG offices. He certainly would not be opposed if the 
Congress chose to make his position Presidentially appointed. 
He certainly is the largest IG office at the Executive level. 
As it relates to the others, I think Barry can talk to that.
    Mr. Platts. At the Postal Service, although he is not a 
Presidential appointee, he has removal for cause and a fixed 
term?
    Mr. Gianni. Seven year term, right.
    Mr. Platts. So he has some of that independence through 
other means?
    Mr. Gianni. That is correct.
    Mr. Snyder. That is correct. The Postal Service already has 
those two provisions and the Postal Service works with a 12 
member board.
    Mr. Platts. And that kind of relates to many of the DFEs, 
they are reporting to boards and commissions?
    Mr. Snyder. That is correct. It is not necessarily just one 
person that we are dealing with. As far as the position itself, 
oftentimes I think this might also come down to the nature of 
the agency, the Federal Reserve being one of those that is a 
very independent agency because of the nature of its work in 
trying to keep monetary policy free from political influence if 
you will. How they would react to having another appointment 
from the administration potentially related to that 
independence of the agency could be a concern to them. I think 
they have expressed it in the past as these questions have come 
up. I think that may hold true with other independent agencies 
that make up the DFEs. So it is not just a question of 
elevating to try to resolve a problem or anything like that. I 
think the intent here was to recognize these agencies were 
independent entities and therefore, needed to make sure they 
sustained that level of independence and to not look for other 
areas where that independence might be threatened. This is 
probably analogous to any administration not wanting to have a 
term of office. The administration might feel the same way 
about losing control or not having input on who is going to be 
the Inspector General.
    Mr. George. As it relates to GPO, its status as a 
legislative branch entity might be a factor one would want to 
consider before changing its status.
    Mr. Platts. Right. Good point. It kind of relates to 
another question of relinquishing authority.
    Jim, did you have any other questions or anything you 
wanted to raise?
    Mr. Cooper. I wanted to ask about the term consideration.
    Mr. Platts. Mr. Cooper.
    Mr. Cooper. We had in our bill a 7 year term. I think you 
are suggesting 9 year terms. I don't really care, just so that 
it is fixed and there is removal for cause. Depending on the 
temperature of our friends on the other side of the aisle, if 
they felt a little more comfortable with a slightly shorter 
period of time, is that going to cause you to withdraw your 
support from the bill?
    Mr. Gianni. I don't believe so, sir.
    Mr. Snyder. I don't either.
    Mr. Gianni. This was the hardest issue on which to get a 
consensus among the members of the IG community. We were 
discussing this issue several years ago when Senator Collins 
had a bill and it has taken us this long to get to a point 
where people agree that we should have a term of office and 
longer was felt to be better than shorter. A renewal phase 
always has implications, if you will, because as an IG I may to 
have to behave in my last year, not necessarily behave but not 
issue any controversial reports or sensitive reports because I 
could be worried about getting reconfirmed or renominated.
    Mr. Cooper. That's the way U.S. Senators feel.
    Mr. George. I just want to note I was part of those 
discussions as to the length and I have to admit I was on the 
side for a much shorter term of office. I believe that fresh 
ideas and new blood sometimes is healthy for an organization, 
but with the option of being reappointed. But again a lot of 
consideration was taken into this in terms of looking at other 
positions as I noted in my written statement to you. So the 
consensus has been achieved at the 9 year level and we could 
elaborate on that further if need be.
    Mr. Cooper. I would be curious about the chairman's 
reaction. Do you think it is easier to sell 7 versus 9 years on 
your side of the aisle or is there much difference?
    Mr. Platts. My gut instinct would be shorter is easier but 
I do like the 9 because you are getting through what is two 
administrations whether it is the same 8 years or two different 
ones but from the sense of carrying further, that is something 
we can look at as we try to develop a consensus we truly can 
move. If I am given the privilege of continuing the Chair come 
January, and moving some of the things you say you have been 
working on for years, I know, Jim, you have been long pursuing 
this so if we get action on it.
    Mr. Cooper. I would like to remind my colleagues that there 
have only been two successive Presidential terms since Dwight 
D. Eisenhower, so it is an increasingly rare thing in modern 
American politics. Regardless of whether it is 7 or 9, just so 
we get consensus and move the bill, I will be a happy man.
    Mr. Platts. On the personnel issue and have that opt-in 
approach about flexibility, I want to make sure I understood 
how you are envisioning that, that each of the individual IG 
offices would have the flexibility to have under statute say 
DOD which has some additional flexibility today, Homeland 
Security, that any additional flexibility beyond what they 
have, that individual IG office could petition OPM for that 
authority? That is how you envision that?
    Mr. Gianni. That is correct. We are going individual IG by 
IG office as opposed to a collective for the whole community.
    Mr. Platts. That is why I think there are strong merits in 
the proposal. Congressional support is one of the areas because 
it is Congress kind of giving up the authority of what will be 
personnel procedures to OPM as opposed to saying no, you have 
to do it through legislation each time, so that is something we 
will probably need to weigh. House and Senate in total would be 
that additional discretion or giving up that authority.
    Mr. Gianni. There are a number of pilots currently ongoing 
within our Government now where OPM has granted authority to 
agencies who have come forward, but the issue is unless an 
agency has come forward and sought that authority, it doesn't 
apply to the Inspector General Office. What we are suggesting 
is that many of us would like to have the opportunity to come 
forward and participate in those programs with those flexible 
authorities.
    Mr. Platts. Where the agency head----
    Mr. Gianni. Exactly. Not relying on our agency head. Quite 
frankly, if we are doing our job right, we are supposed to be 
models. If we can make it work and demonstrate that it has a 
benefit, then perhaps our agencies themselves will move in that 
direction.
    Mr. Platts. That is one more example of the independence 
issue?
    Mr. Gianni. Yes, sir.
    Mr. Platts. That you can do that on your own.
    The final issue I wanted to touch on was the Integrity 
Committee created with PCIE. There is not a separate forum for 
the ECIE?
    Mr. Gianni. No, sir.
    Mr. Snyder. There is an ECIE member on the PCIE Integrity 
Committee. In fact, all of the PCIE committees have ECIE 
members on them, they are interlocking. It sort of argues for 
the one council, if you will, because we have interlocking 
membership today on our committees.
    Mr. Platts. How does the Integrity Committee work?
    Mr. Gianni. The Integrity Committee was created by 
Executive order, and is headed by an Assistant Director at the 
Federal Bureau of Investigation, the Assistant Director for 
Criminal Investigative Division. The head of the Office of 
Government Ethics, the head of the Office of Special Counsel, 
the head of the Office of Professional Responsibility in the 
Department of Justice, and three Inspectors General--two from 
the PCIE, one from the ECIE--comprise the committee.
    The Executive order says when allegations are brought 
against Inspectors General or senior staff within the Inspector 
General Office, and the Inspector General feels that he or she 
can't adequately and independently review them, these matters 
are turned over to the Integrity Committee. The Integrity 
Committee does not operate through the PCIE, it is independent 
but it is made up, in part, of members from the PCIE and 
reports directly to the Deputy Director for Management in OMB. 
The committee's findings go directly to the Deputy Director for 
Management, and the Deputy Director for Management then 
determines whether action is warranted on the part of an agency 
official, agency head, or the President.
    Mr. Platts. And as far as criminal law enforcement?
    Mr. Gianni. If it is determined that criminal wrongdoing 
has been done, then the Justice Department takes that over and 
it is no longer a part of the Integrity Committee.
    Mr. Platts. OK. You would rather see that statutory rather 
than Executive order be included in the legislation?
    Mr. Gianni. We are not suggesting to change the process. 
However, we think it gives it more credibility.
    Mr. Platts. The permanence of it?
    Mr. Gianni. The permanence and visibility of Congress. 
Again, I want to keep stressing when it gets into law, there is 
greater visibility from the Congress. As I said before, we are 
a creature of the Congress and we are very grateful for your 
interest and those who have gone before who have shown an 
interest in the IG community.
    Mr. Platts. I misspoke, I do have one more area that staff 
wanted me to highlight and that is the importance of the 
budgeting process and your ability to go directly to OMB which 
to me I think we talked at length in October, and it is so 
crystal clear how the independence is eroded when you have to 
go through your department head, agency head to work with your 
budget as opposed to having a direct link. Am I accurate in my 
statement that is a critical part of your independence?
    Mr. Snyder. I think it can be, particularly in some of the 
DFEs where their budgets are within the agency because it is 
much smaller in terms of the overall budget of the United 
States. I think having the opportunity to make their case 
separately from their agencies, particularly when they are 
under pressure, would be a wise thing to have.
    Mr. Gianni. I would like to get this on the record. When I 
was confirmed for my position, the FDIC budget for the IG 
office was submitted to the board of directors for approval and 
that was the extent of it. The chairman at the time raised the 
question and concern that under those circumstances, he was 
concerned about my independence and asked me how we could 
possibly address this issue. We offered some options and as a 
Presidentially appointed IG, we are supposed to have a separate 
line item for our budget. It is supposed to come before the 
Congress. In my case, it wasn't coming before the Congress, and 
we made a provision that it would, so only my budget within my 
agency comes before the Congress.
    In my opinion, that is a strength and a protection to my 
position because the Congress gets to see what money I am 
getting allotted or asking for and what the results of the 
investment are, I think that outside look gives strength to my 
position.
    Mr. Platts. Even though it is a line item, the request for 
the amount in that item is still by the department head, not by 
you directly?
    Mr. Gianni. That is right. We reach agreement, it goes to 
OMB and then there is a discussion with OMB on that. Then 
through the congressional oversight, there are opportunities to 
talk about the adequacy of that budget.
    Mr. Platts. Mr. George.
    Mr. George. In the past, there have been some instances 
where agency heads and IGs have butted heads on budget requests 
and the like. So I guess my recommendation would be that 
perhaps giving as an option that the Inspector General could 
exercise or not exercise might be a better way to approach it, 
especially if we are seeking the support of the administration 
on some of these changes because that would be a very big 
change and would affect OMB in many, many ways.
    Mr. Snyder. I might add that in dealing with the DFEs, 
because of the uniqueness, there are several that are 
nonappropriated, so you would have to deal with the differences 
that might be there. I think there is even one, the 
Smithsonian, that is partially appropriated and non-
appropriated, so I think we may have to deal with some nuances.
    Mr. Platts. Account for some of those exceptions?
    Mr. Snyder. Exactly.
    Mr. Platts. Again, I appreciate all three of you 
participating and the clear leg work that you have put in not 
just for this hearing but in strengthening the IG community, 
the independence and allowing you and your colleagues to even 
more effectively fill the charges you have been given. Again, I 
appreciate Representative Cooper's great work on this and do 
look forward to getting consensus with the IG community and 
with bipartisan effort here on the Hill to get legislation in 
final form to move forward. Hopefully because of time running 
out with the 108th but to as early as possible move some 
legislation in the 109th and get this job done not once and for 
all but once again because it is always going to be a work in 
progress I imagine as new things come up.
    We will keep the record open for some of that followup 
information and thank you in advance for those additional 
submissions. Otherwise, this hearing stands adjourned.
    [Note.--The President's Council on Integrity and Efficiency 
and the Executive Council on Integrity and Efficiency report 
entitled, ``A Progress Report to the President, Inspector 
General Act of 1978, Twenty-fifth Anniversary,'' may be found 
in subcommittee files.]
    [Whereupon, at 3:50 p.m., the subcommittee was adjourned, 
to reconvene at the call of the Chair.]
    [The prepared statements of Hon. Jim Cooper and Hon. 
Edolphus Towns, and additional information submitted for the 
hearing record follows:]

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