Saturday, October 31, 2009

Leaked House Ethics Report (Yawn)

The Washington Post caused quite a stir reporting on an inadvertantly leaked House Ethics Committee document revealing that over 30 lawmakers and aides are being investigated for financial dealings and campaign donations.  The report, the committee's "Weekly Summary," names seven members serving on the House Defense Appropriations Subcommittee in its ongoing investigation into the PMA Group.  PMA Group is the now-defunct lobbying firm, founded by a former John Murtha staffer, which has funneled millions in campaign contributions to Murtha alone. 

Revisit Corruption Watch:  Update on "Murthaville"...cue Jimmy Buffett.


Nearly half of the members of the defense subcommittee are named in the report:  John P. Murtha (D-Pa.), Peter J. Visclosky (D-Ind.), James P. Moran Jr. (D-Va.), Norm Dicks (D-Wash.), Marcy Kaptur (D-Ohio), C.W. Bill Young (R-Fla.), and Todd Tiahrt (R-Kan.).

Here's the NY Times on PMA back in February: 

[PMA] convinced 104 different House members to add separate earmarks into the [last year's] defense appropriations bill worth $300 million to PMA Group clients. These same lawmakers who looked out for the PMA Group have received $1.8 million in campaign donations from the lobbying firm since 2001, according to an analysis of new disclosure filings by Congressional Quarterly and Taxpayers for Common Sense, a watchdog group. 
PMA's beneficence with political contributions was lavished especially on the seven members of the Defense Appropriations Subcommittee named in the leaked report (from the Washington Post):
Together, the seven legislators have personally steered more than $200 million in earmarks to clients of the PMA Group in the past two years, and received more than $6.2 million in campaign contributions from PMA and its clients in the past decade, according to an analysis by Congressional Quarterly and Taxpayers for Common Sense. 
Converting Public Funds into Campaign Contributions

To most people, the quid pro quo nature of exchanging campaign contributions for earmarks is unmistakable.  Money laundering is defined as disguising illegally gained money as legitimate financial transactions.  The only reason that converting public funds into campaign contributions doesn't qualify as money laundering is because earmarking is legal.  In theory, there is no shortage of legal theories available to target government corruption:  kickbacks, bribery, etc. all prohibit the use of public office or funds in exchange for private gains.  

In practice, however, the law places significant roadblocks and obstacles in the way of federal prosecutors in probing public corruption.  Absent a confession or a still hot, smoking gun, prosecutors generally steer well clear of the U.S. Constitution's Speech and Debate Clause (Art I, sec 6, cl 1).

For example, here's some seriously discouraging guidance from DOJ's Criminal Resource Manual to U.S. Attorneys on prosecuting corruption: 
A bribery charge can be premised on a campaign contribution. But be careful. It is problematical that a gratuity charge under 201(c) can rest on a bona fide campaign contribution, unless the contribution was a ruse that masqueraded for a gift to the personal benefit of the public officer as was the case in Brewster, supra. This is because campaign contributions represent a necessary feature of the American political process, they normally inure to the benefit of a campaign committee rather than directly to the personal benefit of a public officer, and they are almost always given and received with a generalized expectation of currying favor with the candidate benefitting therefrom. For these reasons, recent Federal jurisprudence on the subject suggests substantial judicial reluctance to extend the Federal crime of gratuities under section 201(c) to bona fide campaign donations.

PRACTICE TIP: Where the transaction represents a bona fide campaign contribution, prosecutors must normally be prepared to prove that it involved a quid pro quo understanding and thereby constituted a "bribe" offense actionable under section 201(b).
While the DOJ investigation into PMA may yet bear some unexpected fruit, I'm not exactly holding my breath.  Barring the discovery of an email or letter on congressional letterhead demanding campaign contributions in return for earmarks or something equally unlikely (like foil-wrapped bricks of $100 bills or Blagojevich-type bravado), the U.S. attorney can only hope for a jittery suspect to "turn state's evidence" on a quid pro quo transaction.  Fat chance of  that when you have seasoned political pros operating inside an enormous legal gray area.  It's also no surprise that the law is on the side of the lawmakers.  

If the bar for prosecuting quid pro quo transactions is so high, can Congress police itself?  Let's see what the House Ethics Committee might dish out: 
Ethics committee investigations are not uncommon. Most result in private letters that either exonerate or reprimand a member. In some rare instances, the censure is more severe.
Penalties available to the House Ethics Committee such as reprimand, censure and expulsion (only 2 members of Congress have been expelled in over a century) don't quite instill fear in corrupt politicians and staffers. With the permissive legal environment for taking financial contributions, hamstrung federal prosecutors, and toothless self-enforcement on Capitol Hill, crooked lawmakers are sure to be shaking all the way to the bank. In fact, the junior staffer who inadvertently released the report may wind up being the only government employee to lose his/her job in this case.  

When it comes to government integrity, there is a clear gap between what is expected by the people and what is delivered by our government.  The continued failure to close this gap will further drain the public's dwindling faith and confidence in Washington. Sphere: Related Content

Thursday, October 29, 2009

DCAA's Stephenson Replaced

April Stephenson is out at DCAA, replaced by the U.S. Army Audit Agency's Patrick Fitzgerald (GovExec reported earlier this week).  As noted here in GAO Trashes DCAA, Stephenson's firing, err...replacement, was a foregone conclusion after being publicly lambasted by the GAO and members of the Senate Homeland Security and Government Affairs Committee (HSGAC). 

Nothing against Patrick Fitzgerald but if Stephenson was fired for "facilitating DoD contracting," or for the "impaired independence" of her auditors whose "audits are a joke," Director Fitzgerald probably shouldn't unpack his boxes too soon either.  Fitzgerald's credentials as a manager are as solid as his reputation as a company man and nothing in his background suggests that he has what it takes to clean house at DCAA.

DCAA's problems are systemic, and members of its upper management are widely considered to be a part of the problem.  The culture of a government bureaucracy can't be changed without wholesale changes made to its upper management to send an unmistakable message rippling throught the ranks.  Sacking the head of the embattled audit agency is like slaughtering a sacrificial lamb:  a bloody and public spectacle meant to appease the restless onlookers.  In the meantime, the deep-rooted, systemic problems that predate the brief tenure of April Stephenson are left to fester. Sphere: Related Content

Tuesday, October 27, 2009

U.S. Diplomat in Afghanistan Province Resigns in Protest

News from the Washington Post today that Mathew Hoh, the Senior Civilian Representative in Zabul Province, Afghanistan resigned from the State Department last month in protest over the war in Afghanistan. Hoh was clearly an up and comer at the State Department as he turned down two successive promotion offers (one at the embassy in Kabul and then one in Washington) from Admininistration officials in their attempt to convince him to reconsider.

Savvy diplomat that he is, Hoh couldn't have missed the fact that Afghanistan has become the hottest honeymoon destination for that unlikely marriage between neocons and liberal hawks (and their industry bridesmaids and blogosphere groomsmen).  A case against an escalation in Afghanistan, grounded in history, is ok and all but, in this environment, there's no substitute for some solid "kill" credentials: 

"I'm not some peacenik, pot-smoking hippie who wants everyone to be in love," Hoh said. Although he said his time in Zabul was the "second-best job I've ever had," his dominant experience is from the Marines, where many of his closest friends still serve.

"There are plenty of dudes who need to be killed," he said of al-Qaeda and the Taliban. "I was never more happy than when our Iraq team whacked a bunch of guys."
Cynicism aside, Hoh's resignation letter is thoughtful, nuanced, and a great read:
Hoh.ResignationLetter Sphere: Related Content

Saturday, October 17, 2009

COP Keating: More Questions that Should Have Been Asked

The Washington Times reports that, only weeks prior to the deadly attack, several intelligence report were issued warning of an imminent assault on the base.  From the article:

One of the intelligence reports on Kamdesh, released in part to The Times, stated that a new Taliban sub-commander in Kamdesh, named Ghulan Faroq, had been appointed and "charged with attacking COP Keating," but no date for the attack was given. COP is military shorthand for combat outpost.  The report also stated that on or about Sept. 29 or 30, "fighters in Kamdesh received a resupply of B-10 ammunition" suitable for use with Soviet-design B-10 recoilless guns that fire 82 mm mortarlike rounds.

A second report stated that, around Oct. 2, a Taliban meeting took place in Kamdesh and that "a Taliban commander will arrive in Kamdesh soon to conduct attacks against coalition forces."

The third report stated that around late September, "a Taliban commander planned to conduct simultaneous attacks against coalition bases in Gewardesh, Kamu and Kamdesh regions of Nuristan and that each attack would be perpetrated by 10-15 Taliban fighters in each location." "At the same time as these attacks, another unit would attack Barg-e Matal with up to 150 fighters."

Despite the information in the intelligence reports, Maj. Taylor insisted that the attack took the 50 U.S. troops and 90 Afghan police officers and soldiers at the combat outposts by surprise.

"You get in trouble for asking questions"

In August 2009, British reporter Nick Walsh, briefly embedded with the 3-61st Cav at COP Keating, interviewed the soldiers after another firefight with insurgents firing from invisible positions in hillsides all around the American base (see video of "The Hills Around COP Keating").

The American outposts near Kamdesh seemed to serve no tactical purpose: American soldiers were not authorized to enter the village of Kamdesh, there have been no detention of insurgents for months, interdiction of insurgent moving through the area has all but stopped (there weren't enough troops to interdict in any case), and the base was slated to be abandoned by American forces within days (Washington Post).  Still, soldiers from the 3-61st, like professional soldiers tend to do, drove on with the mission and trusted in the judgment of their superiors.

While the superior training and "swagger" of America's finest are evident in the video, one wonders about the thought process and what factors their chain of command weighed in balancing the military objective to be gained against the risks to which the mission exposed our soldiers.

From the Recipe for an Afghan Soup Sandwich (scroll down to view Walsh's interview):

(at 4:45)
Walsh:  Do you ever think to yourself, why am I here? 
Soldier #1:  Not really, that’s not my job to ask that question, right Hardt?  Ask the question of "why I’m here," you don’t ask that question, right?
Soldier #2 [Hardt?]:   [Bleeped out] no
Walsh:  What questions do you ask? 
Soldier #2:  You don’t ask any questions, you get in trouble for asking questions. 

Our soldiers are the best in the world.  As professional soldiers, it is not their job to ask questions. As citizens of a representative democracy, it is our job to ask questions for them.  In this case, there are many questions that should be asked. 

Later today, SGT Joshua Hardt will be buried in a private funeral service.  May he rest in peace. Sphere: Related Content

Thursday, October 15, 2009

Andrew Bacevich on Afghanistan Strategy and Fiscal Realities

On Mid-east policy, Andrew Bacevich (whether you agree or disagree with him) is always worth reading. From Afghanistan - the Proxy War in Sunday's Boston Globe Op-Ed page
If the president approves the McChrystal plan he will implicitly:

■ Anoint counterinsurgency - protracted campaigns of armed nation-building - as the new American way of war.
■ Embrace George W. Bush’s concept of open-ended war as the essential response to violent jihadism (even if the Obama White House has jettisoned the label “global war on terror’’).
■ Affirm that military might will remain the principal instrument for exercising American global leadership, as has been the case for decades.
While Bacevich's credentials as a West Point grad, Vietnam vet, and "Gold Star" parent can't (and shouldn't) lend substance to a debate, they do imbue Bacevich with a seriousness of purpose that is both rare (in an age when every shill and blowhard gets a "soapbox") and difficult to ignore.  This piece didn't analyze the U.S. military campaign in Afghanistan (Bacevich has no shortage of those: click here, here, and here, for examples) but rather the battle lines being drawn back home.

Last year, recognizing that Obama's campaign rhetoric regarding the "war of choice" v. the "war of necessity" would surely lead to today's debate over just how much to additional resources to pour into Afghanistan, Bacevich gave this prescient warning to the new president-elect:  
Were U.S. resources unlimited and U.S. interests in Afghanistan more important, upping the ante with additional combat forces might make sense. But U.S. power—especially military power—is quite limited these days, and U.S. priorities lie elsewhere. 

Rather than committing more troops, therefore, the new president should withdraw them while devising a more realistic—and more affordable—strategy for Afghanistan.
If this blog has a single focus, it is that the government ignores today's urgent fiscal realities at its peril.  Bacevich is one commentator on the wars in the Middle East who never divorces the nation's strategy from its fiscal constraints.

"To pursue global hegemony is to court bankruptcy," Bacevich wrote in American Triumphalism, "to persist in imagining otherwise will only hasten America’s decline."  A nation's strategic success in foreign wars should never be viewed in isolation from its economic circumstances back home. 


Sphere: Related Content

Tuesday, October 13, 2009

Wall Street's Disdain for the "Debt Ceiling"

Credit ratings agency Standard & Poor's warns that the U.S. government is, once again, closing in fast on its statutory debt ceiling.  Although it hasn't worked out that way, the debt ceiling was originally passed as law by Congress to rein in runaway government spending.

Statutory Debt Ceilings

In 1941, after over a century and a half of mixed success in controlling the public debt, Congress legislated a mandatory total debt ceiling for all government securities.  The original debt ceiling was set at $65 billion.  In the less 68 years since, the debt ceiling has been raised over 80 times.  The current debt ceiling stands at $12.104 trillion, that's an increase of 18,622% (way more zeros than the calculator on my phone can handle so I hope that's right).

 From late 1995 to early 1996, as a result of the Republican House majority and the Clinton  administration failing to come to terms on the budget, the House refused to vote on raising the U.S. debt ceiling.  As a result, the U.S. government was forced to shut down partially and temporarily (on multiple occasions) due to an inability to finance its operations.  Just as I noted with the two dueling "Defund ACORN Acts" from Reps. Boehner and McCollum, it appears that the only time Congress worries about fiscal responsibility is when one party can use it to stick it to the other.

In the meantime, Congress raising self-imposed limits on its own spending, not unlike an alcoholic's promise to "stop drinking tomorrow," has become a foregone conclusion.  From the S&P report:    

The U.S. ...has its legislature vote on the limit most often apart from the approval of the budget. The bifurcated process can thus allow a lawmaker to vote for higher spending or lower taxes while later posturing against the government debt that is engendered by fiscal deficits. We consider that this process is not best practice and is a weak point in an otherwise strong budgetary framework.
First, an investor in government securities may be forgiven for taking the "otherwise strong budgetary framework" language with a grain of salt.  After all, the memories of the S&P giving good to excellent credit ratings to the likes of Bear Stearns, Lehman Brothers, Fannie Mae, Freddie Mac, Countrywide, etc. all the way up until the eve of their failures are too recent to forget.

What stands out in the press release meant to reassure investors of the U.S. government's excellent credit rating is that the S&P couldn't resist calling out our elected representatives for their hypocrisy in "posturing against government debt" while voting for "higher spending or lower taxes."  Even Goldman Sachs, the darling of Wall Street and, more importantly, of Pennsylvania Ave, also wanted in on some of that Fed bashing action.  Goldman's Alec Phillips was quoted by ZeroHedge.com as saying: 

One should not read too much into the rhetoric that is likely to come out of the upcoming debate over the debt limit, since much of it will be meant for public consumption but will have little bearing on other policy debates that follow.
The fact that Goldman and S&P are two of the biggest beneficiaries of last year's record-shattering deficit spending shouldn't be lost. In fact, most of the increase in the government deficit piled up from FY08 to FY09 was directly attributable to the various bailout programs for the financial industry. 

The bailouts of AIG, Fannie, Freddie, Merrill Lynch, et al have come at the cost of hundreds of billions of dollars (and counting) to the taxpayers.  In addition, over ten trillion dollars have been committed by the Fed since last year to prop up the financial system but are not tallied in the government's official budget numbers. 

Is it just me or is it miserably poor form for the financial industry to take gobs of bailout money financed by deficit spending on the one hand while ridiculing the faux hand-wringing sure to come out of Washington during the next round of debt limit raising? 

Why Would the Debt Limit Even Matter to Wall Street? 

If the Congress were to suddenly enforce the law it passed limiting the amount of debt it can incur, the U.S. must either cut back on spending or risk insolvency.  Either scenario would be a complete and unmitigated disaster for Wall Street.  If the government were to freeze spending, you can forget TARPs and bailouts, we'll have social security checks bouncing, deep furloughs of public employees, and public safety breakdowns. 

Curtailing deficit spending also means that the captains of the U.S. financial industry will suddenly find themselves in the unfamiliar position of having to sink or swim with no taxpayer lifelines.  If, on the other hand, the government defaults on its debt, U.S. treasuries and the dollar will certainly become (more) worthless.  The full scale of the social dislocation and chaos that might ensue is unimaginable.

Wall Street knows that the odds of either scenario occurring as a result of Congress enforcing its debt ceiling is virtually nil (but greater default risks do come with the historic debt level, debt ceiling or no).  Given that the reckless risks Wall Street took will now be borne by generations of American taxpayers to come, one has to marvel at the complacency and entitled "ethos" of an industry that can hardly contain its disdain for something as basic to democratic governance as enforcing a maximum ceiling on government debt and spending. Sphere: Related Content

Sunday, October 11, 2009

U.S. Completes Planned Move out of COP Keating

CBS News reports that U.S. forces have "withdrawn" from COP Keating and a nearby observation post, completing plans that were in place prior to the October 3rd attack.  After troops abandoned the combat outpost, the abandoned site was bombarded by coalition aircraft to ensure that nothing of value falls into the hands of the Taliban. Also destroyed by coalition aircraft was the "local police headquarters" according to the report.

The CBS article did not offer an explanation as to why the Afghan police HQ in Kamdesh was also destroyed but, according to this AP article, the local Afghan police force seems to have deserted en masse the night before the attack:
 The evening before the attack, insurgents comprised mostly of local Nuristani fighters began warning villagers "that something was going to go down and asked them to evacuate," Taylor told The Associated Press in a telephone interview from nearby Jalalabad.

It's unclear whether civilians fled, but local police units abandoned the village — nearly all except the police chief who was later captured and executed.

This seems to be fairly typical of Afghan provincial and border police forces who are notoriously corrupt and have been thoroughly infiltrated by the Taliban and by local militias.  Of course, immediately after U.S. troops pulled out, the Taliban claims to have occupied the abandoned outposts, flying the Taliban flag over the site. 

Here is a video tour of Camp Keating taken by a U.S. contractor:
Sphere: Related Content