Stimulus Provision May Inhibit Watchdog Investigations, Critics Warn

By Amit R. Paley
Washington Post Staff Writer
Saturday, February 28, 2009

The Obama administration pushed through a provision in the $787 billion stimulus package that gives an oversight panel headed by a White House nominee powers to ask that independent watchdogs call off their investigations.

While the law still allows these inspectors general to refuse such requests, some lawmakers and the investigators have warned that the new arrangement could hamper the probes.

The written explanations that the watchdogs must file if they insist on proceeding could divert valuable resources needed for investigation and be so time-consuming that they might decide to acquiesce, critics said. They added that a requirement to provide this explanation could compromise criminal investigations by publicizing confidential information.

The Recovery Accountability and Transparency Board was created to coordinate oversight of how the stimulus funds are handed out. The Obama administration has said this panel's work is critical to preventing waste and corruption.

The legislation said the board could request "that an inspector general conduct or refrain from conducting an audit or investigation." The provision alarmed some inspectors general, who often investigate alleged wrongdoing by political appointees in their agencies.

"We want to ensure that the independence of IGs is not encroached upon in any way, and that's why concerns have been raised about this legislation," said J. Russell George, Treasury inspector general for tax administration. "It's still very early in the process, but we are going to look very closely to see how the legislation is going to be interpreted."

Administration officials said the provision would not harm the independence of the inspectors general. "There is nothing in this legislation meant to limit any inspector general," White House spokesman Thomas E. Gavin said. He added that the law provides additional funding for the watchdog agencies, and by coordinating efforts and getting White House backing for the investigations it "actually strengthens their hands significantly."

Lawmakers have revised the original bill, which was drafted by the Obama transition team and congressional aides, to address concerns of the inspectors general. The revised measure allows the watchdog agencies to reject the panel's decisions. Other concerns were reduced when the administration recently named the Interior Department's inspector general to head the panel instead of a White House official.

The controversial provision emerged in a January draft of the bill prepared by Obama transition team officials and members of the House Appropriations Committee, according to congressional aides. That draft said the seven-member board would be chaired by the president's chief performance officer, an official in the Office of Management and Budget, with the president choosing the remaining panelists from deputy cabinet secretaries and inspectors general.

The House draft of the bill said that if inspectors general disagreed with the recommendation of the panel to either conduct or call off an investigation, they had to submit a report within 30 days explaining why they rejected the request. The draft, at that point, did not make clear whether the inspector general or the board had the final say.

"These ideas were coming directly from the Obama people," said one Democratic congressional aide, who, like others interviewed, spoke on condition of anonymity because they were not authorized to speak publicly.

The Obama administration declined to comment on its role in drafting the provision.

The inspector general community and members of the Senate Appropriations Committee raised concerns about the House bill. Sen. Claire McCaskill (D-Mo.), the chief sponsor of a bill last year meant to enhance inspector general independence, said she was particularly alarmed about the sentence allowing the panel to order an inspector general to stop an investigation.

The group representing federal inspectors general recommended that the entire disputed provision be deleted from the legislation, according to David R. Gray, counsel to Phyllis K. Fong, chair of the Council of Inspectors General on Integrity and Efficiency.

Senate negotiators changed the board composition. While the president would appoint the head of the panel, the rest of the members would be inspectors general.

House and Senate negotiators also added a line proposed by McCaskill saying that the final decision on whether to proceed is up to the inspector general. "The language sends a very clear message that the IG is in the driver's seat," she said.

Supporters of the inspector general system say they find the episode troubling for an administration that has trumpeted aggressive oversight. "This is a dangerous provision that will hamper oversight, restrict transparency, and damage the independence of inspectors general," Sen. Charles E. Grassley (R-Iowa) said.

© 2009 The Washington Post Company