[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12551-S12552]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           NEED FOR HIGHEST STANDARDS FOR INSPECTORS GENERAL

  Mr. GRASSLEY. Mr. President, I spoke a week ago about the necessity 
of the inspector general of the Treasury Department to resign. I want 
to continue that discussion, because she has not done that yet.
  Next year is going to mark the 20th anniversary of the Inspector 
General Act of 1978. In my experience, inspectors general are an 
important function of our system of checks and balances. Whereas 
committees of Congress may not have the time or inclination to perform 
rigorous oversight, which happens to be our constitutional 
responsibility, the inspectors general offices are there full time with 
nothing else to do.
  I have worked very closely with many IG's. For the most part, they 
are good at what they do. The IG Act has been a tremendous success. 
Hundreds of billions of dollars have been saved by inspectors general.
  At the same time, rarely has the IG's integrity been called into 
question. That is, at least until now, Mr. President. The integrity of 
the inspector general of the Treasury Department, Valerie Lau, has been 
called into question.
  The Permanent Subcommittee on Investigations, chaired by Senator 
Susan Collins, held 2 days of hearings just last month. The 
subcommittee found that the IG broke the law twice and violated the 
standards of ethical conduct. These violations involved the letting of 
two sole-source contracts, one to a long-time associate of hers. In 
addition, her office improperly opened a criminal investigation on two 
Secret Service agents. In that matter, at least one key document was 
destroyed--just plain destroyed. And that indicated a coverup.

  Furthermore, the inspector general provided false information to 
Congress. And that is a no-no for anybody, but particularly for 
somebody charged with looking out to see that laws are faithfully 
enforced and that money is properly spent. Of all people in the 
bureaucracy, the inspector general should be most careful.
  The irony in all of this is, the IG is supposed to stop this kind of 
activity, not commit it. Yet that is what Valerie Lau did.
  Mr. President, the charge that IG Lau violated these legal and 
ethical standards is not conjecture. It is not someone's opinion or 
judgment. They are simple facts--concrete facts. They are findings. 
They are findings of a subcommittee of the Congress of the United 
States. They are found in conjunction with the independent and 
nonpartisan General Accounting Office.
  Bad enough that these violations occurred by a watchdog, a watchdog 
whose job it is to deter such actions, but this IG's reaction is even 
more troubling. She agreed that they were technical violations of law, 
but she thinks that her actions were justified.
  The Treasury IG is one of the most important of all inspector general 
positions. Perhaps it is the most important. The Treasury IG oversees 
300 employees, many of whom are law enforcement officers.
  How in the world can we allow an IG who violated the law twice and 
who is in denial about committing the violations to continue to perform 
the important functions of inspector general? How can the public, how 
can the Congress, how can even her own employees have confidence that 
she knows the difference between what is and what is not the law?
  Her responsibility is to catch those who break the law. That is what 
an inspector general is supposed to be doing. How can she do that given 
her own actions and her responses to the findings of the General 
Accounting Office?
  Ten days ago, Mr. President, immediately after Senator Collins' 
hearings, I called, as I said previously today, for Inspector General 
Lau's resignation, citing all these aforementioned violations. I cited 
the need for the IGs to be beyond reproach, to have the highest 
standards of integrity and credibility and conduct. The public's trust 
and confidence in this inspector general has without a doubt been 
undermined.
  Today, I renew my call for her resignation. If the Treasury IG does 
not

[[Page S12552]]

get it, does not get that she should step down, the Treasury Secretary 
should. The President should as well. The Treasury Secretary has a 
responsibility, under this law, to generally supervise the IG. However, 
only Presidents can fire inspectors general. In my view, that means 
that Secretary Rubin is obliged to review the record and to make a 
recommendation to the President. The President would be obliged to take 
action and notify Congress of his action and why he took it. It should 
be done swiftly. As long as this IG remains in office, her troops 
remain demoralized and the IG's important work will be neutered.
  There has been a lot of talk around Washington that recent IG hires 
have lacked experience and background. That is certainly the case with 
the Treasury inspector general.
  I went back and reviewed the record of her confirmation. Her hearing 
lasted nearly 5 minutes. She was asked just one question--whether her 
mother was present in the audience. To follow up, questions were then 
asked of her mother. That ended the confirmation process.
  For the record, I want to make it clear that I am a member of the 
committee, the Finance Committee, that conducted the confirmation 
hearing. I did not attend the hearing, but I submitted an extensive 
list of questions for the record. And I received responses. They are 
part of the permanent record.
  As a result, I feel some obligation that I did not do more to 
question Inspector General Lau's credentials and experience at the 
time. I guess that is because you like to give the President's nominee 
the benefit of the doubt. I guess I learned the hard way that for the 
position of inspector general, questioning one's experience and 
qualifications obviously is paramount.
  I intend to be more aggressive on that score in the future. The 
Inspector Generals Act requires that the IG have ``demonstrated 
ability.'' That is in the law, the words ``demonstrated ability.'' And 
it is in the law not once, not twice, but seven different areas of the 
law.
  Here is what the IG Act of 1978 says:

       There shall be at the head of each office an inspector 
     general who shall be appointed by the President, by and with 
     the advice and consent of the Senate, without regard to 
     political affiliation and solely on the basis of integrity 
     and demonstrated ability in accounting, auditing, financial 
     analysis, law, management analysis, public administration, or 
     investigations.
  Ms. Lau would attempt to claim a demonstrated ability in accounting 
and auditing. She is a CPA and has been a Government auditor and 
evaluator. But in this area of auditing, she had reached only a GS-13 
level. She managed only three employees, according to her deposition. 
And there was a 5-year gap between this experience and when she was 
finally confirmed by the U.S. Senate.
  How does that translate into becoming the head of a 300-employee 
operation that conducts huge, complex audits and even criminal 
investigations?
  What is clear is that Ms. Lau began the process of getting placed 
within this administration through the Democratic National Committee. 
Were the political connections enough to get the job? I hope that is 
not the case. We should have higher standards than that for the job of 
inspector general, which is a very important job.
  Reflecting back on the statute, the inspector general was not 
qualified in the first place. Once in office, she undermines her own 
integrity and credibility. She no longer has the moral authority needed 
to lead that office. To me, it is an open and shut case. Verdict: Time 
for new leadership.
  That brings me to my final point. This body would do well in the 
future to watchdog the watchdogs. And the inspectors general are 
watchdogs within each department, both before confirmation and during 
their tenure, I might say. I, for one, intend to increase my own 
vigilance of the IG community, as well as the experience and background 
of nominees.
  For starters, there is the IG's peers--called the President's 
Commission on Integrity and Efficiency.
  The PCIE, as I will call it for short, was established to conduct 
peer review and investigate allegations of wrongdoing by the IG. It is 
comprised of other IG's and is overseen by the Office of Management and 
Budget. It is also known as a do-nothing organization. IG's have 
rarely, if ever, been disciplined for wrongdoing by this organization.
  Last April, I forwarded the allegations against Inspector General Lau 
to the PCIE. The issues involving the illegal contracts that she let 
were sent to the PCIE, by the PCIE to the Public Integrity Section of 
the Justice Department. The allegations involving her improper opening 
of a criminal case against two Secret Service agents was sent to the 
independent counsel.
  Because of the long process PCIE has, which takes up to 6 months, 
Senator Collins and her staff decided to act swiftly and dig out all 
the facts without the usual bureaucratic delay. Meanwhile, by July, the 
PCIE shut down its entire involvement in this matter of Inspector 
General Lau.
  Now that Senator Collins' investigation is over, and the findings are 
on the table, now is the time for decisive action. Instead, and in very 
typical fashion, here is what is going on.
  Even though only the President can fire the IG, the White House is 
saying it is up to the Treasury Department to act. The Treasury 
Department, which must, according to law, generally supervise the IG, 
says it is up to the PCIE to act. The problem is, the PCIE does not 
act. Besides, they washed their hands of this matter way back in July. 
The only possible PCIE involvement at this point would be to drag out 
any decision. That is because the PCIE process takes 6 bureaucratically 
long months.
  What is going on here, Mr. President? Where is the decisionmaking? 
Where is the leadership? Where is the sense of outrage from an 
administration that says it will tolerate nothing but the highest 
standards? This issue demands action, not finger pointing. The longer 
it takes, the more we undermine the public's trust and confidence in 
this administration and in our Government generally.

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