[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT IN IRAQ AND AFGHANISTAN: CHALLENGES AND SOLUTIONS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON NATIONAL SECURITY,
HOMELAND DEFENSE AND FOREIGN OPERATIONS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
DECEMBER 7, 2011
__________
Serial No. 112-101
__________
Printed for the use of the Committee on Oversight and Government Reform
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
_____
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana ELIJAH E. CUMMINGS, Maryland,
JOHN L. MICA, Florida Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee PETER WELCH, Vermont
JOE WALSH, Illinois JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Robert Borden, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on National Security, Homeland Defense and Foreign
Operations
JASON CHAFFETZ, Utah, Chairman
RAUL R. LABRADOR, Idaho, Vice JOHN F. TIERNEY, Massachusetts,
Chairman Ranking Minority Member
DAN BURTON, Indiana BRUCE L. BRALEY, Iowa
JOHN L. MICA, Florida PETER WELCH, Vermont
TODD RUSSELL PLATTS, Pennsylvania JOHN A. YARMUTH, Kentucky
MICHAEL R. TURNER, Ohio STEPHEN F. LYNCH, Massachusetts
PAUL A. GOSAR, Arizona MIKE QUIGLEY, Illinois
BLAKE FARENTHOLD, Texas
C O N T E N T S
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Page
Hearing held on December 7, 2011................................. 1
Statement of:
Heddell, Gordon S., Inspector General, U.S. Department of
Defense; Harold W. Geisel, Deputy Inspector General, U.S.
Department of State; Michael G. Carroll, Acting Inspector
General, U.S. Agency for International Development; Stuart
W. Bowen, Inspector General, Special Inspector General for
Iraq Reconstruction; and Steven J. Trent, Acting Inspector
General, Special Inspector General for Afghanistan
Reconstruction............................................. 7
Bowen, Stuart W.......................................... 51
Carroll, Michael G....................................... 35
Geisel, Harold W......................................... 25
Heddell, Gordon S........................................ 7
Trent, Steven J.......................................... 61
Letters, statements, etc., submitted for the record by:
Bowen, Stuart W., Inspector General, Special Inspector
General for Iraq Reconstruction, prepared statement of..... 53
Carroll, Michael G., Acting Inspector General, U.S. Agency
for International Development, prepared statement of....... 37
Chaffetz, Hon. Jason, a Representative in Congress from the
State of Utah, letter dated May 17, 2011................... 3
Geisel, Harold W., Deputy Inspector General, U.S. Department
of State, prepared statement of............................ 27
Heddell, Gordon S., Inspector General, U.S. Department of
Defense, prepared statement of............................. 9
Trent, Steven J., Acting Inspector General, Special Inspector
General for Afghanistan Reconstruction, prepared statement
of......................................................... 63
OVERSIGHT IN IRAQ AND AFGHANISTAN: CHALLENGES AND SOLUTIONS
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WEDNESDAY, DECEMBER 7, 2011
House of Representatives,
Subcommittee on National Security, Homeland Defense
and Foreign Operations,
Committee on Oversight and Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 9:35 a.m., in
room 2154, Rayburn House Office Building, Hon. Jason Chaffetz
(chairman of the subcommittee) presiding.
Present: Representatives Chaffetz, Labrador, Tierney,
Welch, and Yarmuth.
Staff present: Thomas A. Alexander and Richard A. Beutel,
senior counsels; Brien A. Beattie, professional staff member;
Nadia Z. Zahran, staff assistant; Paul Kincaid, minority press
secretary; Adam Koshkin, minority staff assistant; and Scott
Lindsay and Carlos Uriarte, minority counsels.
Mr. Chaffetz. The committee will come to order and a little
bit early, but we are well represented here. Appreciate it.
I would like to begin this hearing by stating the Oversight
Committee mission statement. We exist to secure two fundamental
principles: first, Americans have the right to know that money
Washington takes from them is well spent and, second, Americans
deserve an efficient, effective Government that works for them.
Our duty on the Oversight and Government Reform Committee is to
protect these rights.
Our solemn responsibility is to hold Government accountable
to taxpayers, because taxpayers have a right to know what they
get from their Government. We will work tirelessly in
partnership with citizen watchdogs to deliver the facts to the
American people and bring genuine reform to the Federal
bureaucracy. This is the mission of the Oversight and
Government Reform Committee.
Good morning and welcome to today's hearing, Oversight in
Iraq and Afghanistan: Challenges and Solutions. I would like to
welcome Ranking Member Tierney and members of the subcommittee
and members of the audience and certainly our panel for being
here today. This is the sixth hearing addressing the
accountability of taxpayer dollars in war zones.
During this session, this subcommittee has examined a
number of issues, including whether the State Department is
prepared to oversee the surge and private contracting in Iraq;
whether the State Department will be able to protect Government
employees and contractors in Iraq after the military withdraws;
whether USAID and the State Department can accurately track
reconstruction projects and account for their expenditures;
whether those projects can and will be sustained by the host
nations; whether the billions handed to the Karzai government
under the direct assist program can and will be properly
overseen; and whether the Defense Department is working to
ensure that taxpayer money isn't extorted along Afghanistan's
supply chain.
In October, the full committee heard testimony from the
Commission on Wartime Contracting about its final report. The
commissioners alleged that between $30 and $60 billion had been
lost in Iraq and Afghanistan due to waste, fraud, and abuse in
the contracting process. According to the Commission, this was
due to ill-conceived projects, poor planning and oversight,
poor performance by contractors, criminal behavior, and blatant
corruption.
This is unacceptable. While some may agree or disagree with
our engagements in Iraq and Afghanistan, it is universally
unacceptable to waste taxpayer money. In each of our hearings,
witnesses have described the success and challenges, and
oversight is a completed environment. Without a doubt, the task
is difficult; however, it is critical that we get it right.
Today, the inspectors general community will share its
perspective together on one panel. The IG community plays a
pivotal role in the oversight of Federal programs. Their
mission is to promote economy, efficiency, and effectiveness in
the administration of Federal programs, and to prevent and
detect fraud and abuse. Its duties also include informing
Congress of any corrective action that needs to be taken.
In addition to Defense, State, and USAID, the Special
Inspectors General were established to focus specifically on
efforts in Iraq and Afghanistan. Each of these offices is
present here today. While they have produced noteworthy
results, significant challenges remain. We will hear about
those today. We will also examine potential solutions.
Ranking Member Tierney has introduced H.R. 2880, which
seeks to disband SIGIR and SIGAR, and establish a special
inspector general for overseas contingency operations. I
understand that Mr. Bowen and the Commission on Wartime
Contracting support this idea. I would like to hear the panel's
view on that legislation and how such an office would interface
with the standing IGs. The ranking member's legislation is a
good beginning. I look forward to working with him and the
agencies and the IG community to structure an effective
solution.
Before recognizing Ranking Member Tierney, I would like to
note that the Defense Department and State Department, USAID,
and SIGAR will not have IGs in January. In May of this year I
wrote the President, asking him to move without delay to
appoint replacements. That letter was signed by Senators
Lieberman, Collins, McCaskill, and Portman, as well as Chairman
Issa, Ranking Member Cummings, and Ranking Member Tierney. I
would like to place a copy of this letter into the record.
Without objection, so ordered.
[The information referred to follows:]
Mr. Chaffetz. To my knowledge, the President has yet to
nominate any of these replacements. Nor has he responded to
this letter. I find that totally unacceptable. This is a
massive, massive effort. It is going to take some leadership
and some help from the White House. These jobs cannot and will
not be done if the President fails to make these appointments.
Upon taking office, President Obama promised that his
administration would be ``the most open and transparent in
history.'' You cannot achieve transparency without inspectors
general. Again, I urge President Obama and the Senate to
nominate and confirm inspectors general to fill these
vacancies, and without delay.
I would now like to recognize the distinguished ranking
member, the gentleman from Massachusetts, Mr. Tierney, for his
opening statement.
Mr. Tierney. Well, thank you, Chairman Chaffetz, and thank
you all for being witnesses here today and helping us with our
job. This hearing, obviously, is a culmination of a series of
hearings that the subcommittee and the full committee have had
with regard to Iraq and Afghanistan. We have heard from the
Department of Defense, the Department of State on the
transition to civilian-led mission in Iraq, and we have heard
from the Commission on Wartime Contracting and suggested
reforms to reduce waste and fraud in contingency operations,
and we followed up with the Department of Defense to discuss
the investigation that we started earlier on corruption in the
Afghan trucking industry.
These hearings continue to highlight the challenge of
protecting the taxpayer funds from waste and fraud in our
operations in Iraq and Afghanistan. In fact, the Commission on
Wartime Contracting found that billions of dollars had been
wasted by agencies that have little capacity to manage their
contractors or to hold them accountable. Even worse, billions
of dollars more have been dedicated to projects that were
poorly conceived and are unsustainable by host governments.
These findings are consistent with this committee's oversight
of Defense contractors in Iraq and Afghanistan.
Last year, I led a 6-month subcommittee investigation of a
$2 billion Department of Defense trucking contract in
Afghanistan. This investigation found that the trucking
contract had spawned a vast protection racket in which
warlords, criminals, and insurgents extorted contractors for
protection payments to obtain safe passage. A followup hearing
held by this subcommittee in September showed that the
Department has made little progress in rooting out bad actors
who undermined our anti-insurgency efforts in Afghanistan. We
know now that many of these bad actors continue to serve as
U.S. Government contractors.
In response to these findings of billions of dollars of
waste, fraud, and abuse, the Commission on Wartime Contracting
made a number of important recommendations for Congress to
consider. One key recommendation in their report was the
creation of a permanent special inspector general for
contingency operations. As the Commission stated, no entity
exists with sufficient resources, experience, and audit and
investigative capabilities to transcend departmental and
functional stovepipes.
Taking up this recommendation, I have introduced
legislation that the chairman mentioned that would establish a
special inspector general for overseas contingency operations.
These efforts of the Commission, along with the special
inspector general for Iraq reconstruction and the special
inspector general for Afghanistan reconstruction, have shown
the critical importance of realtime oversight in our overseas
operations. We need to preserve the unique capabilities of
these entities in a single, permanent inspector general with a
flexible, deployable cadre of oversight specialists. I urge my
colleagues to join me in this legislation.
While that legislation is designed to address future
contingency operations, this hearing is about oversight in Iraq
and Afghanistan now. To that end, I would like to address
recent findings by the Department of Defense Inspector General
that shed light on some of the problems with one of our largest
contractors in Afghanistan. That report reveals that the
Supreme Group, the prime contractor on the multibillion dollar
Defense Department's subsistence contract in Afghanistan is
under investigation for hundreds of millions of dollar in over-
billing. I understand that there is now a criminal inquiry of
the Supreme Group's over-billing.
These allegations raise significant concerns about the
Defense Logistics Agency and their ability to properly manage
those large-scale contracts and to protect taxpayer dollars
from waste and fraud. They also raise concerns about the use of
no-bid cost plus contracts that are so common in contingency
operations. As we speak, the Defense Logistics Agency is
preparing to award a new $10 billion to $30 billion contract to
provide food and supplies for our troops in Afghanistan for 5
years.
So I would like to hear from our inspectors general today
about what more can be done to ensure that our Federal agencies
are doing their job and properly managing the billions of
dollars that are being spent in those two countries. I would
also like to hear from you regarding what tools you have to
ensure the companies who are caught over-billing the Federal
Government for hundreds of millions of dollars do not have the
opportunity to take even more taxpayer funds in the future.
So I want to thank you all again for being witnesses and
thank you, Mr. Chairman, for having this hearing.
Mr. Chaffetz. Thank you.
Members will have an additional 7 days to submit opening
statements for the record.
I would now like to recognize our panel. The Honorable
Gordon Heddell is the Department of Defense Inspector General;
Ambassador Geisel is the Department of State Deputy Inspector
General; Mr. Michael Carroll is the USAID Acting Inspector
General; the Honorable Stuart Bowen is the Special Inspector
General for Iraq Reconstruction; and Mr. Steven Trent is the
Acting Special Inspector General for Afghan Reconstruction.
Pursuant to committee rules, all witnesses will be sworn in
before they testify. Please rise and raise your right hands.
[Witnesses sworn.]
Mr. Chaffetz. Thank you. You may be seated.
Let the record reflect that the witnesses answered in the
affirmative.
In order to allow proper time for discussion, we are going
to ask that each member of our panel limit their verbal
comments to 5 minutes. Your entire statement will be inserted
into the record.
I will now recognize the Honorable Mr. Heddell for 5
minutes.
STATEMENTS OF GORDON S. HEDDELL, INSPECTOR GENERAL, U.S.
DEPARTMENT OF DEFENSE; HAROLD W. GEISEL, DEPUTY INSPECTOR
GENERAL, U.S. DEPARTMENT OF STATE; MICHAEL G. CARROLL, ACTING
INSPECTOR GENERAL, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT;
STUART W. BOWEN, INSPECTOR GENERAL, SPECIAL INSPECTOR GENERAL
FOR IRAQ RECONSTRUCTION; AND STEVEN J. TRENT, ACTING INSPECTOR
GENERAL, SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN
RECONSTRUCTION
STATEMENT OF GORDON S. HEDDELL
Mr. Heddell. Thank you, Mr. Chairman. Good morning, and
good morning, Ranking Member Tierney and distinguished members
of the subcommittee. Thank you for the opportunity to appear
before you to discuss oversight efforts in Southwest Asia.
As many of you may be aware, this will likely be my final
testimony before Congress as the inspector general. Effective
December 24th, I will step down as the DOD IG.
In my first month alone at the DOD IG, I testified three
times before Congress. Two of the three hearings dealt with
critically important issues of oversight contingency operations
in Southwest Asia. Noting that our Nation was engaged in two
wars and that we had a pressing need to strengthen oversight to
protect our war fighters and the American taxpayer, I
immediately determined to make oversight of contingency
operations in Southwest Asia a number one priority. As a
result, I instituted a number of organizational changes to the
structure and focus of DOD IG efforts and to increase our in-
theater presence, which is regularly augmented by our
expeditionary teams.
I believe strongly that an in-theater presence is
absolutely essential to conducting oversight of operations and
engaging with military and civilian leadership in theater to
ensure that our oversight is meaningful and effective.
In our audit division, I created the Joint and Southwest
Asia Operations Directorate and the Afghan Security Forces Fund
Group. Our audits in theater provide timely and relevant
oversight, and our auditors now have extensive experience in
conducting complex joint audits with other Federal agencies.
In our investigations division, the Defense Criminal
Investigative Service, DCIS, expanded its presence in Southwest
Asia and today DCIS plays a major criminal investigative role
in Southwest Asia by participating in key task forces that
tackle complex fraud cases. The DCIS is already deployed
worldwide and has the capability to immediately provide
investigative resources to contingency operations anywhere in
the world.
Another division of the DOD IG, the Office of Special Plans
and Operations [SPO], as we call it, has been a key contributor
to providing oversight. SPO has significantly enhanced our
capability to provide expeditionary teams to Southwest Asia to
conduct timely evaluations and assessments, and to provide
thorough outbriefs to field commanders enabling them to take
immediate corrective actions.
I also appointed a special deputy inspector general for
Southwest Asia to coordinate and deconflict oversight efforts.
My special deputy has worked extensively with all of the IG
offices represented with me this morning. Today we are an
agile, flexible, no-nonsense and aggressive oversight
organization with the capacity to deploy rapidly anywhere in
the world on short notice, and the DOD IG is prepared to
respond effectively and aggressively in coordination with other
Federal agencies and internal DOD oversight offices to address
any future overseas contingency operation that arises.
I would like to thank the subcommittee for the opportunity
to discuss the work of the DOD IG, and I look forward to
answering any questions that you may have. Thank you.
[The prepared statement of Mr. Heddell follows:]
Mr. Chaffetz. Thank you. And thank you again for your
service, on your long career in the Secret Service and your
work in the Defense Department. We appreciate your service and
wish you nothing but the best.
Mr. Heddell. Thank you.
Mr. Chaffetz. We will now recognize the Honorable Mr.
Geisel.
STATEMENT OF HAROLD W. GEISEL
Mr. Geisel. Thank you, Chairman Chaffetz, Ranking Member
Tierney, and members of the subcommittee for the opportunity to
testify today about oversight of Department programs in Iraq
and Afghanistan.
Since standing up its overseas offices in 2008, the Office
of Inspector General, OIG, has conducted 31 investigations and
issued 27 reports related to Iraq, conducted 14 investigations
and issued 22 reports related to Afghanistan, and issued 11
reports of activities affecting Department program and
transition issues in Iraq and Afghanistan. Our efforts during
fiscal year 2011 resulted in more than $200 million in
questioned costs and funds put to better use, $16.6 million in
investigative recoveries, and 20 contractor suspensions.
These results demonstrate the impact that OIG has achieved
since establishing a presence in Baghdad and Kabul. As a result
of congressional support, OIG has fulfilled its commitment to
vigorously oversee the Department's transition and soon will be
one of the few remaining oversight entities in Iraq.
The challenges the Department faces in the transition to a
civilian-led presence in Iraq are significant. DOD's planned
withdrawals of its troops by the end of this month requires
that the Department of State provide security, life support,
transportation, and other logistical support that DOD presently
provides in Iraq. Our Office of Inspections has issued two
reports, a July 2009 inspection of Embassy Baghdad and an
October 2010 compliance followup review which addresses the
embassy's transition planning efforts.
In response to our CFR, the Department appointed a
Washington-based Ambassador in February 2011 to manage the Iraq
transition process. We also issued reviews in August 2009 and
May 2011 of the Department's efforts to transition to a
civilian-led presence in Iraq. Both reviews found that the
transition was taking place in an operating environment that
remains violent and unpredictable.
Our October 2009 report on the Department's transition
planning efforts recommended that Embassy Baghdad develop a
unified transition plan and assign a senior transition
coordinator in Iraq, establish a work force plan to ensure
timely completion of large infrastructure projects managed by
the Embassy, determine what LOGCAP services and contract
management personnel would be required, and verify resources
needed to meet increased support requirements following DOD's
departure. All of these recommendations have been closed.
Our May 2011 report noted that Embassy Baghdad and the
Department had established planning and management mechanisms
to effectively transition to a civilian-led presence. It also
mentioned that while the Department had made progress, several
key decisions were pending, some transition planning could not
be finalized, and progress was slipping in some areas.
We remain concerned that some reconstruction projects were
still experiencing delays and were not expected to be completed
until mid-2012, and that establishing a viable diplomatic
mission without DOD support and funding would require
considerable resources, making it difficult to develop firm or
detailed budget estimates.
The Department generally agreed with and was responsive to
the intent of the recommendations.
Looking forward, we have 15 investigations related to Iraq
and 9 related to Afghanistan. Our 2012 Iraq and Afghanistan
oversight plans include 6 audits plus a proposed joint audit
with DOD OIG of programs in Baghdad and Kabul. In Baghdad, we
will look at the Worldwide Protective Services', WPS, contract
for Embassy Baghdad, medical operations in Iraq, and the
Department's oversight of the WPS task order for Kirkuk and
Mosul. We have also proposed at DOD OIG that we undertake a
joint audit of transition execution in Iraq, including
implementation of the Baghdad Master Plan.
In Kabul, we plan to audit the WPS task order for the Kabul
Embassy Security Force, contracts to build prisons, and the WPS
task order for Herat and Mazur-E-Sharif.
For 2012, our Office of Inspections has planned inspections
of the Office of the Coordinator for Counterterrorism and the
Office to Monitor and Combat Trafficking in Persons. The Office
of Audits is following up on its work in the region regarding
treatment by contractors of third-country nationals and our
Office of Investigations also is actively engaged on this
issue.
We will continue to provide the Department and Congress
with a comprehensive spectrum of audits, inspections, and
investigations of post-transition activity in Iraq and
preparations for transition planning in operations in
Afghanistan.
Mr. Chairman, Mr. Tierney, and members of the subcommittee,
thank you once again for the opportunity to appear today, and I
am ready to answer your questions.
[The prepared statement of Mr. Geisel follows:]
Mr. Chaffetz. Thank you.
We will now recognize Mr. Carroll, the Acting Inspector
General at USAID.
STATEMENT OF MICHAEL G. CARROLL
Mr. Carroll. Thank you, Chairman Chaffetz, Ranking Member
Tierney, distinguished members of the subcommittee. I
appreciate the opportunity to appear before you today to
describe our work generally and specifically in Iraq and
Afghanistan. If I could, I would like to begin by explaining
how we are structured, uniquely structured, I would think, to
provide oversight of AID's programs around the world.
Like the agency, the OIG is a Foreign Affairs Foreign
Service organization, and more than two-thirds of our auditors
and investigators are career foreign service officers
permanently assigned to USAID OIG. So that worldwide
availability gives us a great deal of flexibility to put people
where they need to be when they need to be. In addition to
that, even though we participate in the NSD 38 process, by
statute, we are exempt from country staffing level ceilings.
So while this has never been an issue, and I don't think it
ever will be, we can put people where we need to put people,
regardless of what the situation is on the ground with staffing
ceilings in the different embassies. And, again, that gives us
a great deal of flexibility, and over the past 8 years a couple
of examples are opening country offices in Iraq, Afghanistan,
and Pakistan; doubling the size of our staff in Pretoria, South
Africa to oversee the Hilantos money for AIDS and infectious
diseases in Sub-Saharan Africa; and then opening a satellite
office, a smaller satellite in Port-au-Prince, Haiti to help
the regional office in El Salvador oversee the humanitarian
assistance and reconstruction of post-earthquake Haiti.
So I think that regardless of whether it is a contingency
operation or just a standard agency USAID operation, I think we
are uniquely situated to do that work, to do the oversight
work.
In Iraq we started our oversight in 2003 with long-term
TDYs, and then when the embassy got up and running and the AID
mission got up and running, we established an office of seven
auditors and two investigators. So we have been there pretty
much with SIGAR right from the beginning and will continue to
be there. As the trajectory on the Agency's programs in Iraq
are sort of leveling off to a traditional country office
mission operation at about $270 million for 13, we are going to
reduce the size of the staff to two auditors, two
investigators, move the additional people over to Egypt, where
our regional office is, and then provide oversight of Iraq from
Egypt and from Iraq.
In Afghanistan, we developed a little bit differently.
Clearly, the infrastructure wasn't available early on, so we
were doing most of our work from the Philippines. We created a
virtual country office in the Philippines and we were literally
on the ground full-time in Afghanistan with auditors and
investigators doing the work. But as the program increased in
scope and complexity, we worked out with the embassy to put an
office there and now we have seven auditors, U.S. direct-hire
auditors, four Foreign Service national auditors, we have four
American U.S. direct-hire investigators, one foreign national
investigator, and we are probably going to put on one more
foreign national investigator.
So we are committed both to Iraq and to Afghanistan in
providing audit oversight and investigative oversight of AID's
programs in Afghanistan.
So, with that, thank you for the opportunity to appear
before you and I would welcome any questions you might have
about our oversight activity and the opportunities to improve
that going forward.
[The prepared statement of Mr. Carroll follows:]
Mr. Chaffetz. Thank you.
We will now recognize the Honorable Stuart Bowen, who is
the Special Inspector General for Iraq Reconstruction.
STATEMENT OF STUART W. BOWEN
Mr. Bowen. Thank you, Chairman Chaffetz, Ranking Member
Tierney, members of the committee for the opportunity to appear
before you again and address our oversight work in Iraq, and
also to take up the issue of improving oversight in contingency
operations.
I just returned 2 weeks ago from my 31st trip to Iraq over
the last 8 years; met with my 10 auditors and investigators
while I was there and we are busy still addressing significant
issues regarding the substantial U.S. funds being expended in
Iraq. It is true, the military is departing the end of this
month. Our footprint is shrinking, but billions of dollars in
taxpayer money is still being spent, and that money requires
firm and effective oversight for the coming year and the years
thereafter.
On Monday we appeared before the House Committee on Foreign
Affairs to address the largest expenditure planned for next
year by the State Department, and that is the billion dollars
for the Police Development Program. Real questions were raised
about the preparation for that. Much work remains to be done to
ensure that it can succeed.
While I was in Iraq, I met with Ambassador Jeffrey, our
Ambassador to Iraq, and Ambassador Sison, who is in charge of
the Police Development Program, and they concurred with our
findings and are taking action vigorously to implement them.
However, I remain concerned about a couple of matters that
occurred over the last month regarding our presence there, and
one is a review process that the State Department has
implemented to require us to vet the information that we
normally get for our quarterly reports back through offices
here in Washington, which will impede our responsiveness. You
have come to rely on our quarterly reports for a quick truth on
what is going on in Iraq, and we want to maintain that
capacity. We hope that we can overcome that limitation.
There has also been an investigation problem that I
identify in my statement that is relative to our capacity to
get information and carry out investigations. These raise
continuing concerns about our capacity to execute effective
oversight in Iraq.
But I also want to address the Government's capacity to
execute effective oversight in contingency operations. The
Wartime Commission, in its final report a few months ago,
rightly recognized that the United States can improve its
ability to oversee contingency operations, recommending the
creation of a special inspector general's office. In other
words, permanizing what we have been doing, what my colleague,
Mr. Trent, and his staff are doing in Afghanistan.
And I concur with their recommendation because it will
provide funds, savings of money in Iraq. That is the bottom
line. In Iraq, Afghanistan, and all overseas contingencies
going forward, the special inspector general for overseas
contingencies would save taxpayer dollars. We have done that in
Iraq, it is being done in Afghanistan; it would be done in
future contingency operations.
Let me take, very quickly, there are three objections to it
that have been raised. One, it would be a layer of additional
oversight. The opposite is true. The experience of SIGIR in
Iraq has been that we have coalesced in focused oversight of
the Iraq reconstruction mission and, as a result, have
generated more effective work, more output, work that would
have been more difficult to accomplish if there had been three,
four, five inspector generals offices operating. Also, we
created the Iraq Inspector General Council and, as Mr. Carroll
pointed out, we worked very closely with AID from the
beginning, and with State and with DOD over time, through that
process to generate better work. It has been an effective
catalyst to synergize oversight efforts in-country, not a
layer.
Second, the special inspector general for overseas
contingencies would not sit fallow, as some have said, or
waiting a contingency to happen. First of all, all you need to
know is we have been in one of some form of another every year
but two since 1980. The last 10 years we have been in the two
largest in our history, in Afghanistan and Iraq. There is no
doubt that the use of this office would be regular and
necessary and, again, would generate savings of funds.
And, finally, and this is the most important thing, would
the expenses or the costs of this special inspector general be
more or less than the current system that is used? And the
answer is less. We have submitted a budget. It could operate on
an effective, very limited amount for the time necessary until
contingencies occurred and then would be directed by the
Congress, at the Congress' call, to provide oversight in
contingencies as they arise. It would be a tool for the
Congress, a boon to the taxpayers, and save money in these
times of $15 trillion debt.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Bowen follows:]
Mr. Chaffetz. Thank you, Mr. Bowen. I know we will have
some more lively discussion about this proposal as well.
We will now recognize Mr. Trent, who is the Acting
Inspector General for Afghanistan reconstruction. Mr. Trent,
you are recognized for 5 minutes.
STATEMENT OF STEVEN J. TRENT
Mr. Trent. Thank you, Mr. Chairman, Ranking Member Tierney,
and members of the committee. I am pleased to be here with my
colleagues today to discuss ways to strength oversight of
reconstruction in Afghanistan.
As you know, the President has requested more than $18
billion in the fiscal year 2012 budget to assist Afghanistan.
If approved, this will bring total appropriations to $90
billion, which is the largest rebuilding effort since the
Marshall Plan.
Congress created SIGAR in 2008 to provide oversight for
this significant investment. Since then, our auditors and
investigators have had a positive impact on the reconstruction
effort. We have issued 49 audit reports and made 149
recommendations that have led to great accountability and
improvements in contracting and program management. Just this
year, our auditors have identified nearly $70 million in funds
that should be returned to the U.S. Government.
SIGAR investigators have played an important role in both
detecting and deterring fraud. The work has resulted in the
recent successful prosecution of the largest bribery case to
date from Afghanistan. This year, they produced $51 million in
fines, penalties, forfeitures, seizures, and savings.
However, I believe SIGAR can and must do more to strengthen
oversight during this critical transition period in
Afghanistan, so we are taking aggressive steps to focus our
audit and investigative work on the most critical areas of the
reconstruction effort. We have developed a fiscal year 2012
audit plan that identifies five critical areas to successful
Afghanistan reconstruction. They are private security
contractors, Afghan governance capacity and sustainability,
contracting, program results and evaluations, fraud detection
and mitigation.
We have also added inspections to provide timely
assessments of infrastructure projects. These rapid reviews
will verify if the work was performed correctly and achieved
intended outcomes. Most importantly, this work can help
determine if projects are sustainable. We are also adding a
series of audits to examine contract expenditures. These audits
will allow us to more accurately assess whether the U.S.
Government has been billed properly.
Along with our sister oversight agencies, we consistently
coordinate to avoid duplicating each other's work. However, we
know that we need a more comprehensive and targeted approach.
Therefore, along with our colleagues, we are developing a
strategic framework to guide the IG community's work in
Afghanistan reconstruction. We intend to identify the issues
most important to lawmakers and policymakers, and use these
issues to drive the results of the IG community's work. SIGAR
hosted the first meeting of this effort last week.
Finally, SIGAR is taking a leadership role in holding
contractors accountable in Afghanistan. We are expanding our
investigative presence in Afghanistan to build criminal cases.
We have 111 ongoing criminal investigations, 68 of which
involve contract and procurement fraud. Criminal and civil
legal proceedings, however, can take substantial periods of
time, so SIGAR has also enhanced its suspension and debarment
program to address the need for more timely and targeted
actions. SIGAR is currently on track to make approximately 80
suspension and debarment referrals by the end of this year.
SIGAR is taking important steps to enhance oversight;
however, the implementing agencies also have a responsibility
to strengthen oversight of their own operations. During my
recent trip to Afghanistan, I met with high level U.S. civilian
and military officials to discuss what steps they are taking to
improve contract and program management. I will continue to
engage in these important discussions, which also help to
better target SIGAR's work.
Let me conclude by saying that we have listened closely to
this committee's thoughtful questions about oversight and we
are heeding your concerns. The Congress has provided enormous
resources for Afghanistan reconstruction in a difficult
budgetary environment. At SIGAR we are committed to ensuring
that our oversight not only protects this historic investment,
but helps U.S. implementing agencies produce better results.
Thank you, Mr. Chairman, for giving SIGAR the opportunity
to appear this morning.
[The prepared statement of Mr. Trent follows:]
Mr. Chaffetz. Thank you, and thank you all for your service
and your commitment.
I would now like to recognize myself for 5 minutes.
Mr. Heddell, I am going to start with you. The Defense
Contracting Auditing Agency I know is a little bit outside of
your lane, but I would appreciate it if you would offer a
perspective. The Commission on Wartime Contracting had
indicated that there were some 56,000, 56,000 contracts behind
in terms of auditing these contracts. Why is that? How can that
be? How is it that DOD can be so far behind in this?
Mr. Heddell. Mr. Chairman, my office has actually done a
lot of work with respect to DCAA. I would just say generally,
first off, that I think they probably are under-resourced and
need help in that respect, but historically DCAA has been a
very challenged organization. They do a tremendous amount of
work for a lot of agencies, not just inside the Department of
Defense, but outside the Department of Defense. In the last 3
to 4 years, the DCAA has undergone some sweeping changes as a
result of some fairly significant criticisms of their
leadership, of their processes, and not meeting expectations.
As a result of that, it has new leadership today with Pat
Fitzgerald, who was the Director of Army Audit, and Pat has
taken on a gigantic job, and with the work that my office has
done to try to help them identify vulnerabilities in their
management, in their processes, and how to be an effective
organization. For the last 2 years, their focus has been, and
this is Gordon Heddell talking, more internal than external.
So while under ideal circumstances they would have been
focusing outward, doing great work, doing lots of audits with
very experienced and good leadership, they have had to focus
inward to correct management deficiencies and vulnerabilities.
I think that is partially a result of this backlog in audits,
but not entirely.
Mr. Chaffetz. My understanding, we have been participating
a lot of hours and spending a lot of money and a lot of
resources, as that expenditure has gone up. Help me understand
what is happening with the actual auditors themselves, because
you have been appropriated more money.
Mr. Heddell. Absolutely. In fact, I have been a very
fortunate organization. In the last 3 or 4 years, the DOD
Office of Inspector General has been plussed up some $87
million, Mr. Chairman. I doubt that any other IG can say that.
So I am very fortunate. The Congress has been very supportive
of me, and, for that matter, so has the Department of Defense.
Mr. Chaffetz. But have you been spending that money?
Mr. Heddell. No. The problem there is that the budget, the
$87 million in plus-ups that I have received, have not been
annualized. And what that means is that although I am very
fortunate to get these plus-ups, I am not able to use that
money to hire permanent staff. So I can hire contractors, I can
do other things with that money, but because it is not being
annualized by the Department, I cannot run the risk of hiring
people and then having to RIF them the following year for fear
that I don't have enough money in my budget to pay them. It is
a problem.
Mr. Chaffetz. Of that $87 million that you have gotten, how
much did you actually spend?
Mr. Heddell. Well, we have spent almost all of it.
Mr. Chaffetz. But you are hiring outside contractors to do
the work?
Mr. Heddell. Yes, sir. We are hiring outside contractors.
We are creatively doing work that is positive and meets the
needs of both the Congress and the Department and the American
people, but, for instance, in the early 2000's there were two
things that happened that have come to haunt us today. One is
that while we sent our military forces into Southwest Asia to
fight two wars, there was a mistaken belief by many of the
civilian agencies that they could fight those two wars in the
continental United States, my own organization being one of
those. And it wasn't until 3 or 4 years ago that we came to the
realization you cannot do that; you must be present and you
have to have the people in place, you have to have the
footprint.
The second thing that happened is that the Department of
Defense's budget doubled to about $650 billion, and at the same
time the contract acquisition and contract management work
force, in fact, was reduced in size, meaning that we lacked
thousands and thousands of needed contracting specialists that
are not there to oversight these contracts; that are not there
to raise their hand and say stop the assembly line, we are
spending money that we are not watching, we are not surveiling
it. So those are two major issues.
Mr. Chaffetz. Well, thank you. I appreciate it. I think
this highlights a multibillion dollar challenge and problem
that we certainly need to address and fix because I think there
is a definite need that is pervasive in the Congress, both the
House and the Senate, to make sure that these types of
functions are in place. But the way that the money is
appropriate is obviously falling short and failing.
I have overstayed my time. I will now recognize the ranking
member, Mr. Tierney, from Massachusetts, for 5 minutes.
Mr. Tierney. Thank you, Mr. Chairman.
Mr. Heddell, I think you hit one major problem right on the
head in the last part; I think we have seriously hollowed out a
lot of our agencies in terms of keeping at least the personnel
on board to oversee and to manage contracts. We find that
repeatedly every time we have a hearing on that respect. If we
are going to contract out, which is not always a good idea, but
if we are going to do it, then at least we have to keep on
board enough people to sort of manage these things well for
everybody's benefit.
In your report, Mr. Heddell, on the subsistence prime
vendor contract for Afghanistan, you found that while Supreme
Group provided the products that were required by the contract,
the Defense Logistics Agency failed to provide sufficient
oversight of contract cost and performance. Specifically, you
found that the agency overpaid the vendor nearly $100 million
in transportation costs, paid the vendor $455 million to
airlift fresh fruits and vegetables without properly
incorporating those requirements into the contract, and allowed
Supreme to bill the Army over $50 million in costs for the
wrong appropriation year.
What recourse do you have as Inspector General when the
agency fails to properly manage a contract and that failure
leads to hundreds of millions of dollars in losses to the
taxpayer?
Mr. Heddell. Well, thank you, Congressman Tierney.
Appreciate the question. Obviously, this is an example of just
about how bad it can get, and clearly this happened. This
contract was created back in 2005; it wasn't a well designed,
well thought out contract, probably like many contracts during
that period.
Consequently, we spent some $3 billion on this contract
and, as you said, we overpaid the prime vendor $98 million in
transportation costs, we overpaid them $25.9 million in tri-
wall costs, the boxing, corrugated boxes and so on, and, as you
indicated, $455 million in services to airlift fruit and
vegetables from the United Arab Emirates into Afghanistan,
without even including that in the contract. All of that is a
result of not planning properly and designing a contract that
was not in the best interest of the American people.
Now, we have gone, my organization, to the Defense
Logistics Agency and we have told them we want that money back,
and the Defense Logistics Agency agrees with us. Beginning in
October 2011, they began to make efforts to determine, first of
all, what are the fair and reasonable prices that should have
been charged. Imagine that. A contract created in 2005 and now,
in December 2011, we are just now determining what should have
been the reasonable and fair prices to pay.
Okay, but they have agreed, Mr. Ranking Member, to do that
and they are currently in face-to-face negotiations with
Supreme, and the time line projection for a resolution on
this--and I would never hold my breath and think we will get it
all back--but a resolution for this is actually scheduled for
December 9th, this week. So I am hopeful that when we talk
again that I can say to you we have been able to recover a
great deal of those funds.
Mr. Tierney. Mr. Trent, you will recall that from the
contracts that we looked at in the trucking situation in
Afghanistan. The lack of vision or ability to look into the
contracts, the subcontracts, and the finer detail of those were
just never written into the contracts to begin with.
So, Mr. Bowen, tell me, would a special inspector general
for contingency operations help alleviate this problem of
sending people in, getting part way down the road before you
realize all these mistakes are happening?
Mr. Bowen. There is no doubt about that for three reasons.
One, there will be focus and preparation in place at the time a
contingency begins for a special inspector general to deploy.
Two, there will be a commitment to deployment. As my friend,
Mr. Heddell, pointed out, there was a challenge, I think, at
DOD, but also with the other IGs, in moving forward, in being
there to do the oversight. One of the lessons from SIGIR is
that you have to be there to do the work. A special inspector
general's office would be hiring people who know that when they
sign on, they are going to go and deploy and carry out
oversight in the conflict zone.
Finally, and this is a good example of how a SIGOCO could
make a difference, cross-agency jurisdiction, something unique
to a special IG that the institutional IGs don't have. That
means I can dig in to problems like this and find out if it is
DOD money being wasted or State money or AID money; however
that money may be going away, we can get to it and get to it
faster and, thus, save it.
Mr. Tierney. Thank you.
Thank you, Mr. Chairman.
Mr. Labrador [presiding]. I will recognize myself now for 5
minutes.
Mr. Trent, the Obama administration has increased its
direct assistance to the Afghan government from approximately
$665 million in fiscal year 2009 to roughly $2 billion in
fiscal year 2010. This program is designed to provide U.S.
taxpayer money directly to the Karzai government for the
purpose of carrying out reconstruction projects. Is it logical
to assume that one of the most corrupt governments in the world
will actually have proper stewardship of U.S. taxpayer money?
Mr. Trent. It is a very good question, Congressman. SIGAR
has conducted a number of audits and has a number of audits
planned in the capacity development areas of the various
ministries, MOD, MOI, in the coming year ARTF in the past,
looking at, among other things, the capacity of the Afghan
government to administer Afghan direct funds. We have a
significant and serious challenge, as you point out, with
corruption in the Karzai government in Afghanistan. The efforts
with corruption in Afghanistan are almost insurmountable.
Clearly, we need more of a concerted will by the government
there and we need a much stronger and robust criminal justice
system, which they simply don't have.
So we are doing what we can to monitor those funds and we
will continue to do that. I can't say if I am optimistic or not
with regard to the corruption and the control of those funds.
Mr. Labrador. Well, what should we be doing? I mean, if you
are not confident, I am not confident either. What should we be
doing? Because you said something about how we need a more
robust criminal system. Well, they don't have one. They don't
have the proper procedures; they don't have the proper
oversight people. So what should we be doing?
Mr. Trent. Well, I believe we are doing about all we can. I
mean, we need to continue with our rule of law efforts there.
We can't give up on that, notwithstanding the corruption walls
that we have encountered with that. We have to continue to
bring pressure wherever possible on the government itself to
show a concerted effort in the area of corruption and prosecute
some of their own ministers. We have to continue to conduct the
audits and continue to work on the investigative side with the
Afghan authorities that we can work with to pursue Afghan
violators.
Mr. Trent. Okay. Thank you very much.
Mr. Bowen, right now the Police Development Program is the
administration's largest foreign aid program for Iraq going
forward, and there is some evidence that the Iraqis don't even
want this program. Have you or your staff asked the Iraqi
police forces if they need the $500 million a year program that
the Obama administration is planning to spend on the Police
Development Program?
Mr. Bowen. Yes, Mr. Labrador, we have, and we reported on
that in our last quarterly, noting that the senior official at
the Ministry of Interior, Senior Deputy Minister Al Asady,
said, ``he didn't see any real benefit from the Police
Development Program.'' I addressed that with him when I was in
Iraq a couple weeks ago and I asked him, did you need what you
said? And his response was, well, we welcome any support that
the American Government will provide us; however, my
statements, as quoted in your recent quarterly, are still
posted on my Web site.
Mr. Labrador. So why is the administration still spending
$500 million a year to provide this program?
Mr. Bowen. There is a belief that security continues to be
a challenging issue in Iraq, a well founded belief, I might
add, given the events of this week, killings of pilgrims again
on the way to Najaf on the eve of Ashra. The focus, though, on
trying to address those problems has been a widely scattered,
high level training program involving about 150 police trainers
who, as we have seen again this week, are going to have a very
difficult time moving about the country.
Mr. Labrador. So what other problems have you found with
the Police Development Program, if any?
Mr. Bowen. Several. Mr. Labrador, we pointed out in our
audit that one Iraqi buy-in, something the Congress requires
from Iraq by law, that is, a contribution of 50 percent to such
programs, has not been secured in writing or, in fact, by any
other means. That is of great concern, especially for a
ministry that has a budget of over $6 billion, a government
that just approved notionally a $100 billion budget for next
year. It is not Afghanistan; this is a country that has
significant wealth, should be able to contribute, but has not
been forced to do so in a program as crucial as this.
Mr. Labrador. I know I have run out of time, but, Mr.
Geisel, do you have some comments on this?
Mr. Geisel. Well, of course, first of all, I am not going
to second-guess my friend and colleague on what his people
found and, of course, the people you need to bring up here are
the people from the State Department to comment on what he
found. I saw that the Department published a document, a 21-
page document that includes goals and measures of performance
for the Police Development Program, but it is my friend's baby,
not mine.
Mr. Labrador. Thank you very much.
I will give 5 minutes now to Mr. Welch from Vermont.
Mr. Welch. Thank you very much, Mr. Labrador.
I want to thank each and every one of you for the terrific
work that you are doing. A lot of the situations that you are
uncovering just reflect the impossible expectations oftentimes
that Congress has, and if it were as easy as writing a check
and having the police force in Iraq and Afghanistan be
established, it would be no problem, and against, I think, our
better judgments sometimes we spend this money and then,
surprise, surprise, you tell us a lot of it is being wasted.
But I really do applaud the work that you are doing.
I am going to be introducing legislation that does trigger
debarment proceedings for contractors that are convicted of
violating the bribery provisions of the Foreign Corrupt
Practices Act, and there is some debate between my office and
the attorney general's office as to how strict that should be.
That is a very critical tool for you. My view is that that
debarment authority hasn't been adequately exercised in our war
zones.
Let me ask you, Inspector General Trent, I know that SIGIR
does have robust suspension and debarment programs, but do you
believe that DOD, USAID, and State are adequately and
appropriately using the authority in Iraq and Afghanistan? And,
if not, what are the barriers to its use and how can we work
through them to ensure that taxpayer dollars are not getting
ripped off?
Mr. Trent. Well, Congressman, yes, we do have, I believe,
an aggressive and somewhat effective suspension and debarment
program in SIGAR, and I am somewhat aware of your pending
legislation on the FCPA issue. With regard to my colleagues'
use of suspension and debarments, I think suspension and
debarments has been a tool available to contracting
authorities, acquisition authorities, and inspector generals as
far as their proposals for some time. In my experiences in the
last several years in Southwest Asia, I have felt that we could
increase that use, and when I came to SIGAR I took steps to do
that.
Mr. Welch. So it is an effective tool and should be used?
Mr. Trent. Congressman, I believe it is a very effective
tool, and I believe, in the Afghanistan case, it is a tool both
in terms of corruption and in contract management and
implementation.
Mr. Welch. Okay. Let me ask you one more question because I
don't have too much time. I just got back from Afghanistan and
one of the people that we met from was from the attorney
general's office and he was in the anti-corruption unit, and
they were there training Afghan civil servants about how to
detect corruption, and when I asked the attorney general how is
it going, he said, well, we had to end the program. And I said,
why is that? And he said, because when we were teaching them
how to detect it, they were using the information to do it. So
that is a real challenge that we face.
But when we visited the commanders in Helmand and Kandahar,
one of the things they were promoting was the development of
the Kajaki Hydroelectric Dam, which cost about $475 million,
and the benefits of it are obvious if it could be implemented;
it would provide hydroelectric power, electricity, maybe some
irrigation. But that is not coming out of their budget, it
would be a supplemental expenditure. So it is not like the
military would be taking that out of their ability to do their
job, it would come from somewhere else. So I was a little bit
skeptical because it is easy to promote the expenditure of
somebody else's money.
But, bottom line, that is a conflict zone and significant
questions about whether this could be done, and my question to
you is does it make sense at this point to ask the taxpayers to
spend $475 million on a hydroelectric project that would have
extensive transmission lines, all of which would be easily
attackable by insurgents? Or does it make sense to put that on
hold?
Mr. Trent. Congressman, SIGAR has not looked specifically
at the Kajaki Dam or conducted an audit on that. I believe my
colleague at USAID has done some work in that area. We have
looked at Kabul Power Plant and the energy sector with
auditors, but specifically on Kajaki Dam we haven't, so I would
punt that to my colleague at USAID I believe who has done some
work in that area.
Mr. Welch. Yes, sir. I am running on the edge of time here,
but with the indulgence of the chairman.
Mr. Carroll. Well, Mr. Welch, I think initially as to a
political or administration question about the utility of going
forward with the program, would you consider the difficult
environment in which it would be implemented. We have done a
couple of audits and, in fact, in talking to Ambassador Crocker
this week, it seems to be a priority of the embassy and the
government to move forward with that.
It looks like, according to Ambassador Crocker, the Army
Corps of Engineers is going to undertake a major part of the
program and AID would also be responsible for doing some work
at the Kajaki Dam. So primarily the problem up there has been
security, and now it is getting very difficult to get
contractors to even bid on the work when you consider the
security situation up there. So overall is the power sector an
important sector? Absolutely. But it is a very difficult
environment to work in up there.
Mr. Labrador. I will now give 5 minutes to Mr. Yarmuth.
Mr. Yarmuth. Thank you, Mr. Chairman.
I thank all of you for your testimony and appreciate the
work you do also. We now face, because of the debt ceiling deal
that we did a possible sequester of funds and a large amount of
that sequester of funds beginning in 2013 would come from the
Defense Department. Secretary Panetta has said that such a cut
as projected under the sequester process would be devastating
to the Defense Department and our security, and yet we listen
to these stories and we have talked about essentially the
inability to get a handle on these contracts in real-time.
How are we going to know, Mr. Heddell, if the sequester is
really going to have an impact on defense when we don't really
have a grasp on the hundreds of millions and billions of
dollars we are spending now?
Mr. Heddell. Although I can't comment on the sequester,
Congressman Yarmuth, I can tell you that in the last 3 or 4
years I have seen significant progress in the inspector general
community in terms of its oversight, and I have also seen
progress with respect to the way the commanders. In fact, I
just got back from Afghanistan myself and I have seen progress
in terms of the approach that we are taking.
For instance, this year one of the things that we started
doing was assisting the MOD and the MOI, Ministers of Defense
and Interior, with respect to core capabilities, meaning their
ability to manage government, something we had not done before,
so that we have a way of teaching them how to do it and then
going back and making sure that they are accountable. So we are
creating systems and processes. I can't assure you that that is
going to work, but it is something we should have done before.
The other thing, the inspector general community itself,
which is a significant tool in overcoming so many of the
challenges, 4 years ago, the statement that if you have seen
one IG, you have seen one IG was really true. Today it is not
true. Once the amendment to the Inspector General Act was
passed a few years ago, what has happened is similar to what
has happened in law enforcement; all of the big things now are
done in task forces, they are done in teams. We have IGs now
getting together to solve a common problem. You have law
enforcement agencies working on task forces to address
corruption.
And, by the way, you mentioned or it was mentioned earlier
the use of tools such as debarment. Well, that is a great tool,
but you have to realize that what happens is when we debar a
company in Afghanistan, what happens is they just go back and
change their name and reapply and get a new contract. That
happens over and over again.
So the answer isn't simply debarment. And obviously we have
had almost no success in prosecuting, using the prosecuting
attorney in Afghanistan, so we have to find ways to influence
the leadership to do the right things, and I think with the
oversight community we have done that.
Again, I can't comment on what the sequestering of funds
might amount to. I know this Department is working only to
accomplish----
Mr. Yarmuth. I am more interested in the overall process.
Obviously, this is broader than just Iraq and Afghanistan, but
one of the things that has occurred to me recently is we have a
world that is moving at 80 miles an hour and we have a
government that is structured to run at 20 miles an hour, and
it has taken us this long in Iraq and Afghanistan to even begin
to get a handle on this. I mean, it seems to me we have a
fundamental structural problem that we don't know how to keep
up with the situations we find ourselves in.
Mr. Heddell. We are habitually late, and I said that
earlier in my testimony. When we had four military services
fighting in Southwest Asia in 2001 and then in 2003, the
civilian agencies were ``fighting that war'' back here in the
continental United States. It took us until 2007 or 2008 to
realize you cannot successfully fight a war unless everyone is
involved, civilian agencies, and that we are ahead. It has
taken us now 3 or 4 years to get there, but I think, sir, I
think we are getting much closer to getting to where we need to
be.
Mr. Yarmuth. Thank you. I don't have an answer to the
problem. Thank you very much.
Thanks, Mr. Chairman.
Mr. Labrador. Thank you.
I am going to give myself 5 minutes and I am going to
follow up actually on those questions. One of the things that
is most frustrating to me as a freshman here in Congress is
that there are some things that both sides agree on that we
need to be working on and, yet, we are not doing them. I look
at the Oversight Committee. I don't think there is a lot of
difference. There might be some small differences between the
two sides, but it seems like we can identify things like the
$500 billion that we are going to spend in Iraq police force
that they don't even want. We should be finding things in
common that we could be saving on.
If we could put a transparency here on President Obama. And
I am not saying this, I am not using this to embarrass anybody,
but President Obama has said on his Web site that he is
committed to making his administration the most open and
transparent in history. He wants a window for all Americans
into the business of the Government, and that is something that
I want. I actually agree with him on this issue.
But yet this panel is representing the IG offices
principally responsible for overseeing taxpayer money in Iraq
and Afghanistan, and as of January 4th of next year four of the
five offices will not have an IG. I am concerned about that.
Now, I want everybody to comment. Do you know whether the
President has nominated anyone to fill these vacancies? If so,
who has been nominated? Have you made any recommendations and
do you think the absence of permanent IGs will actually harm
our efforts in oversight? And anyone can take this question.
Mr. Heddell. I certainly would like to comment. Number one,
I don't know the names, Congressman Labrador, of anyone that
might have been nominated or who is being considered to be
nominated. Number two, I can tell you that the nomination and
confirmation process that we have is cumbersome and slow, and
it has an adverse impact on the leadership of these
organizations.
Number three, when I took over as the Acting Inspector
General in July 2008, the DOD IG at the very top had been
vacant for so many years, over the past 10, 12 years, you can't
imagine. So to run an organization using an Acting Inspector
General as the leader is foolhardy. You can do it for a few
months, but you cannot succeed over years and decades, and that
is what has happened.
Mr. Labrador. Does anybody know why that has happened? Is
there any reason why? It seems like both sides would agree that
we need a robust IG in all of these agencies. Does anybody have
any comments on that? Mr. Carroll.
Mr. Carroll. I can't comment on what the White House is
doing, but I just want to assure you, on behalf of the USAID
OIG, that one of the great things about working for Don
Gambatista was it was truly a partnership between him and I. So
as I moved into the acting role, other than the fact that it is
a bit of a workload issue for me, the work goes on and the
leadership philosophy continues. So I just want to assure the
subcommittee that there will be no degradation in our
effectiveness or what our work is going to be for as long as it
takes for the President to make a decision on the AID job.
Mr. Labrador. Okay. Now, I know that Mr. Bowen has been a
staunch advocate of the SIGOCO. Is that something that the rest
of the panel agrees is necessary? Do you think it is not
necessary? If you don't think it is necessary, why? Mr. Geisel.
Mr. Geisel. Well, I didn't volunteer, but I will still be
happy to tell you what I think.
[Laughter.]
Mr. Labrador. You looked so willing to answer this
question.
Mr. Geisel. Well, I think in his testimony, the written
testimony especially, my colleague made some very good points,
and one of the key points is that the concept of SIGOCO and,
for that matter, his own office, has had a wonderful advantage,
and that is that they have hiring authorities and they had
generous funding that the statutory IGs didn't have. SIGOCO is
one way to approach it. Another way to approach that issue is
to give us, the statutory IGs, those same authorities and
robust funding.
Now, I can't complain about funding because, since I came
to the Department in 2008, Congress has plussed us up
marvelously. But those hiring authorities, it would make a real
difference. And I agree with what he said, those authorities
are crucial to doing the kind of job that you would like us to
do.
Mr. Labrador. What concerns me about the idea is that it is
something that we do here in Washington all the time, something
isn't working and what we end up doing is creating a whole new
agency or whole new department, instead of giving the authority
to the people that are already in charge of doing it, giving
them the responsibility. It seems like we do this in all of our
agencies and then what we create is just another layer of
administration and responsibility.
So I just wish we could find a way to actually use the
existing people that we have right now, the existing
authorities, instead of trying to create new agencies. But I do
understand his concern and I think we all share the concern
that we should be saving taxpayer money for the American
people. There are ways that we can agree to do it and we just
need to get it done.
Anyway, I will now recognize the ranking member, Mr.
Tierney.
Mr. Tierney. Timing is perfect on that.
Let's explore this a little. I think it is a healthy debate
and I appreciate everybody's position on that. The SIGOCO
concept, the Special Inspector General for Contingency
Operations would not be duplicative if it is carried out in the
way that the legislation is drafted and the way it is intended.
Currently, there is nobody responsible for contingency
operations unless they are specially appointed. They are
appointed on a case-by-case situation as and when it arises and
the Congress decides to implement, and all of the existing
inspectors generals have a handful doing what they are doing
within their respective agencies.
If you are Mr. Heddell, he has never had a moment when he
hasn't had enough to do. The same goes for Mr. Geisel; same
goes for Mr. Trent, Mr. Carroll. Their hands are full doing
things within the area of their lane on that, and I suspect
they could be busy for as long as they wanted to keep the
position.
So, Mr. Bowen, let's allow you to do some testifying here
on that. The SIGOCO concept would be different in what ways?
Would be non-duplicative in what ways? And what is the problem
to get over Mr. Labrador's problem? You mentioned in your first
testimony--I don't think Mr. Labrador was here, so let's
reiterate it because I think it is healthy to know this, I
think it is instructive.
Mr. Bowen. Yes, Mr. Tierney. First and foremost, SIGOCO
would be cross-jurisdictional. As hard as the Congress might
try, as much as my friends and fellow IGs would like, they have
to stay within their stovepipe to do their oversight, which
means each of them have to be present, as my friend Gordon
Heddell noted, in-country, carrying out oversight.
But frequently, as we have learned in Iraq, as we see in
Afghanistan, programs merge money, and when they merge money
you are going to ultimately have different IGs attacking it or
perhaps no one addressing it because of that merger. SIGOCO
would allow that, that cross-jurisdictional power.
Second, it would be the primary mission of SIGOCO to carry
out this oversight. We know that had SIGOCO existed in 2003, we
would have averted the waste of billions of dollars. We know
that had SIGAR existed in 2002 we would have averted the waste
of billions of dollars because of the aggressive presence of
investigation and audit on the ground that would have been
there.
Third, you would have a staff that, when they sign up, they
sign up to go to a conflict zone. That is not something that my
friends and colleagues can require of their staff now. They
can't say, hey, you are going to be going to a war zone to do
oversight. And that was a problem, frankly, in 2005, 2006,
2007, getting people to volunteer to go to Iraq, which was a
very dangerous place, still is; Afghanistan is today.
And, finally, as I said in my testimony, this would save
money. That is the watchword for this era. This is the
Oversight and Government Reform Committee. The latter rubric
should be applied when it can be applied in a money saving way.
SIGOCO would be one of those ways.
Mr. Tierney. Thank you.
I just remind my colleague that all of these different
agencies, inspectors general for their respective agencies and
departments, are busy all the time. So when you have a
contingency operation, all of a sudden, now you have to somehow
ramp up and try to do all the things you are doing that are
consuming all of your time and go over to this other area. So
rather than being duplicative, you are actually focusing
another inspector general on a much needed area to do that work
and to be constantly available in order to achieve it and to
get it done. And I think that is an instructive part of that.
There are other issues that you raised, but I think Mr.
Bowen has sort of hit them on the head on that, so if can move
from that a little bit on to the sustainability of projects
that my colleagues raised earlier.
The whole Wartime Contracting Commission, which,
incidentally, we had to do legislation on to get over it
because of the issues in contingency contracting, we had to get
people in there and start looking at why things weren't being
dredged out in the very beginning, their final chapter sums up
the whole issue on project sustainability by saying that the
Commission sees no indication that Defense, State, and USAID
are making adequate plans to ensure that host nations will be
able to operate and maintain U.S. funded projects on their own,
nor are they taking sustainability risks into account when
devising new projects or programs.
Just for the panel, do we find that still to be the case or
are there things being done to have them include sustainability
risks in their projects as they move forward, particularly in
Iraq as we move out of that area, but in Afghanistan and
elsewhere as well? Whoever might want to volunteer on that.
Mr. Carroll. As far as oversight of that question, in every
one of our performance audits in Iraq and Afghanistan we have
an audit objective for sustainability, and, to be honest, what
we have found to date is that it is sort of a mixed bag.
And I wouldn't say it is a very successful picture
historically or even moving forward, but I think,
realistically, to answer the question, yes, the agency is
building in sustainability in the design of their projects, but
you are dealing with the Afghan government, particularly going
forward here, and that is going to be problematic, and we have
been finding problems with sustainability in AID's programs in
Afghanistan.
Mr. Tierney. Would you consider for 30 seconds? Thank you.
So the problem that we have with the Kabul power plant,
where they decided to spend some $300 million of our taxpayer
money and then decided, after it was all done, that they could
get electricity cheaper from Uzbekistan on that basis, do we
know why that happened or what we missed on that, and have we
corrected that?
Mr. Carroll. Well, I am not sure exactly why the embassy
and AID decided to build that project and build it the way they
did with diesel fuel that could or could not be shipped in, and
then decided to move in a different direction. The way it has
been described now is that the Kabul power plant is a fallback
and a surge capacity to the larger infrastructure that they are
putting forward. So I would say that from a sustainability
point of view that maybe wasn't well thought out, but I think
they have learned since that time.
Mr. Tierney. Well, I think that is instructive. Do you know
what the era was and have you done something to put in place
that it won't be happening again? I think that is my charge to
you, if you would on that. I guess you are not prepared to
answer it today, but you can go back and find out just what
happened. And this business about now it is a backup plan or
something like that, that is just an excuse. You and I both
know that and I think everybody on the panel knows that. They
messed up, they got something that they didn't bargain for, and
now they are going to try to find some reason for its existence
on that. But we need to ask you to go back and find out what
went wrong and put in place a plan to make sure it doesn't
happen again and then, if you would, report to us what you have
done. I would appreciate that.
Mr. Carroll. I will do that, Congressman.
Mr. Tierney. Thank you.
Mr. Labrador. Thank you.
I will now recognize Mr. Welch.
Mr. Welch. Thank you very much.
Two of the recurring questions about the expenditure of
these moneys is whether, A, we have a reliable partner and, B,
whether the security on the ground is adequate so that the work
can actually be done, and both of those are huge impediments.
And it comes into conflict to some extent with policy
objectives where, let's say in Afghanistan, there is a desire
to build a civil society.
Mr. Carroll, I will ask you because your department bears
so much of the responsibility for the implementation of some of
these projects. It is a predicate question that should be asked
and answered by some appropriate authority, whether a project
has a reliable partner such that there can be a reasonable
degree of confidence that it will be implemented.
And I am thinking very much about the Iraqi police training
that Mr. Labrador was asking about. Or is there a sufficient
security situation so that the work can be done? That might be
relevant to something like the dam project. And if you lack
either or both of those, does it make any sense under any
circumstances to do a Hail Mary pass on a major expenditure,
hoping that it will happen just because we would like it to
happen?
Mr. Carroll. Well, AID, you are right, their meat and
potatoes is civil society, is democracy and governments, it is
health, it is education, it is all those programs. They do do
reconstruction and they have done reconstruction in Iraq and
they have done it to an extent in Afghanistan. And I think it
wouldn't be news if I were to say that it is difficult to do
development in the middle of a war, in the middle of a
hostility, so it has been problematic, particularly on the
reconstruction side, the infrastructure side. You know, Mr.
Bowen and Mr. Trent have found that throughout Iraq and
Afghanistan.
You talk about reliable partners. You ask about reliable
partners. AID historically has implemented their programs
through non-governmental organizations, primarily, and a lot of
those are U.S.-based, some international multinationals like
the United Nation agencies and that sort of thing. So they are
reliable partners.
AID is now moving in a direction toward funding more
development assistance through Afghan ministries and they have
a process in place to do some capacity assessment of the
systems in place and the ministries' ability to do the work,
and as they convince themselves or as the data presents itself,
they move forward or not on their program.
So I would say that for the traditional AID programs, civil
society, democracy and governments, health, education, that
sort of thing, I think there re liable partners. I think there
is a willingness on the behalf of the Afghan people to make
these things happen.
Mr. Welch. Let me interrupt you right there. See, that is a
meaningless statement, the Afghan people. Who are they? Do you
know what I mean? In a general sense the Afghan people are as
desirous to have good things happen as we are, but there is not
a structure, there is not a political implementation program,
there is not sufficient security. I have met contractors who
are confined to basically the embassy compound. And how do you
manage a program? It would be like Mr. Bowen trying to have
auditing all done about Iraq and Afghanistan, Mr. Trent in
Afghanistan, from Capitol Hill. It just doesn't work.
This is enormous frustration for you, but I think there is
an illusion that Congress is the one that is primarily
responsible because we have the money go out under
circumstances where there is no practical possibility that it
will be well used, and then we will get angry at you when you
report to us that, hey, a lot of money went missing. So there
is a predicate question here. We probably should be asking it,
but I am wondering whether some organization like AID might
have to certify that for this project we have a reliable
governmental partner or we have sufficient security that it can
be done.
Mr. Carroll. They do that.
Mr. Welch. All right, I yield back. Thank you very much.
Mr. Labrador. Thank you.
I want to thank the panelists for being here, for taking
your time, for the work you are doing. Have a great day. Thank
you.
[Whereupon, at 11:16 a.m., the subcommittee was adjourned.]
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