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Beefy Résumé for a Giant Job: Policing Stimulus Spending

By Philip Rucker
Washington Post Staff Writer
Friday, March 20, 2009

Promising unparalleled scrutiny of his $787 billion wager to stimulate the economy, President Obama appointed to police the spending a burly former football lineman and Secret Service agent with a reputation for exposing wrongdoers.

But with public money already flowing through state and local governments toward shovel-ready projects, Obama's top stimulus cop does not yet have a computer, phone line or office, let alone a full staff. And he told Congress yesterday it will take 30 to 45 days before he wrests control of what he considers perhaps his greatest asset in ferreting out fraud: the Web site Recovery.gov.

"There's more questions than answers right now," Earl A. Devaney, the Interior Department inspector general who Obama picked to lead the administration's stimulus accountability and transparency efforts, said in an interview. "It's a big task . . . and we're just trying to keep our heads above water."

For Devaney, 61, the challenge is without modern precedent. He is tracking a sum nearly 70 times the size of Interior's annual discretionary budget. The funds are being funneled quickly to thousands of programs. The stimulus is so awesome in size, scope and speed, Devaney said, that fraud is inevitable.

"Logic would suggest there's going to be a loss of money to fraud and waste with this amount of money going around," said Devaney, who chairs the Recovery Accountability and Transparency Board -- or RAT Board, as it is affectionately known. "This is huge. I've been involved in building and fixing things in the past, but quite frankly I've never built something this big."

Yet a single misdeed would threaten to severely taint the administration and deal a crippling blow to its efforts to stabilize the global economy. Amid populist furor over $165 million in bonuses paid to executives at the bailed-out insurance giant American International Group -- and with the looming possibility of a second stimulus bill or additional government bailouts of failing banks -- the White House is under great political pressure to ensure that the stimulus money is spent wisely.

The RAT Board is a grand experiment in government oversight. Made up of inspectors general from across the government, it is tasked with coordinating with overseers in federal, state and local governments to detect and prevent fraud, waste and abuse of stimulus money. But while most inspectors general are skilled at examining fraudulent activities through audits or criminal investigations, the RAT Board's priority is to install preventive measures to ensure that no fraud occurs in the first place.

"Obviously when things go wrong they should be found out and snuffed out, but that's second best to preventing things from going wrong," said Vice President Biden's chief of staff, Ronald A. Klain. Biden oversees the board and meets weekly with Devaney.

Rep. Elijah E. Cummings (D-Md.) said most oversight investigations begin after funds have been disbursed. But in this case, he said, "we're in front of the distribution of the funds, so therefore we're in a position to hopefully prevent a lot of the fraud and abuse that might normally come."

Congressional Republicans, however, are not leaving it to the Obama administration to police stimulus dollars. A bicameral group of GOP lawmakers said they are organizing an independent working group for spending oversight. "We have to do everything in our power to ensure taxpayer money isn't wasted," said House Minority Leader John A. Boehner (R-Ohio).

If 7 percent of the stimulus money is lost to waste -- the figure generally expected for government spending, according to Rep. Dan Burton (R-Ind.) -- that would work out to $55 billion. In a congressional hearing yesterday, Burton observed to Devaney that given the outcry over AIG bonuses, that level of stimulus abuse would prompt the American people to "march on the Capitol."

"The first time I took a pencil and figured that out, I was horrified to see it was $55 billion," Devaney said.

Justice Department Inspector General Glenn A. Fine, who serves on Devaney's board, said: "With that kind of money, that kind of temptation, when you see the history of dollars spent, some of it will be misused. We have to face that reality. But the effort is to deter that, to minimize that, and to hold accountable people who do that."

The government has rarely been praised for its transparency in contracting, said Danielle Brian, executive director of the Project on Government Oversight. "Now all of a sudden the public is expecting absolute transparency immediately."

"Millions of eyes want to be watching how the money's being spent. I'm expecting the board and all the inspectors generals to not be getting much sleep," Brian said.

The stimulus provides about $350 million for oversight, most of which is spread among accountability units in agencies. Of that, Devaney received $84 million to run the RAT Board through September 2011.

One of its biggest tools is Recovery.gov, which promises an extensive database of stimulus spending and contracts. The idea is for citizens, journalists and watchdogs to scour the site and detect projects or contracts that appear suspicious. They will be "the first line of defense in seeing fraud and waste," Devaney said.

The federal government has never had such a large database, although Devaney said a model is Maryland's StateStat program, created by Gov. Martin O'Malley (D), which measures public safety, health care and social services.

But in yesterday's hearing, Rep. Edolphus Towns (D-N.Y.), chairman of the House Oversight and Government Reform Committee, said he thinks Recovery.gov is not yet up to par and asked the administration to develop a better approach.

Since signing the stimulus legislation last month, Obama summoned the nation's governors, mayors and other state and municipal officials to the White House to hammer home the priorities of accountability and transparency. Biden warned local officials Wednesday that if he detects wasteful stimulus spending, he will use the power of his office to publicize it.

"I'll show up in your city and say, 'This is a stupid idea,' " Biden said. "You think I'm kidding. This is the only part the president was right about: Don't mess with Joe."

Politicians and whistleblower advocates praised Devaney, saying he has proved himself in 39 years of government service to be a zealous watchdog of government abuse. He began his career as a Massachusetts police officer before moving in 1970 to the Secret Service, where he protected presidents as a special agent and investigated crimes in the fraud division.

At the Interior Department, he spearheaded a series of investigations that brought down several employees, including the deputy secretary, who were connected to the bribery scandal surrounding lobbyist Jack Abramoff.

"He's the best of the IGs, when you look around," Towns said. "He's the Super Bowl guy, no question about it."

Staff writer Ed O'Keefe contributed to this report.

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