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01/29/2013

What’s a CEO to do?

Imagine you are a CEO of a major corporation. You hire an external consulting group to draft a report for you about the overall health of your organization. Confident in the future of your organization, you begin reading the report, which includes the following phrases:

  1. “Long-term fiscal path remains unsustainable.”
  2. “Ineffective process for preparing the consolidated financial statements.”
  3. “Widespread material internal control weaknesses, significant uncertainties, and other limitations.”

You stop reading because your corporation appears to be in shambles and it’s obvious that drastic changes need to be made.

Sadly, this hypothetical situation isn’t very farfetched. Recently, the Government Accountability Office issued a report on the past two years of federal government spending that included those same phrases—word for word. Gene L. Dodaro, comptroller general of the United States and head of the GAO, stated that “our federal government’s long-term fiscal path remains unsustainable without further policy changes.”

In fact, the GAO found that some agencies couldn’t even be audited because of “widespread material internal control weaknesses, significant uncertainties, and other limitations.”  In essence, the Department of Defense and the Department of Homeland Security, agencies that collectively represent nearly one quarter of all federal budget spending, could not be fully audited due to “serious financial management problems.”

GAO also cited difficulty in accounting for “intragovernmental activity and balances between federal agencies” along with the “federal government’s ineffective process for preparing the consolidated financial statements”—jargon for massive failures in tracking and reporting spending.

Sadly, the fact that the federal government isn’t effectively tracking its own spending is no surprise to us. Last year, one of our investigations found government agencies giving employees GPS systems, Nook readers, and iPods. That same investigation revealed agencies that spent large amounts of money on flash drives shaped like police cars, and hamburger yo-yos. All of these lavish expenses were paid for with taxpayer dollars with seemingly little (or no) oversight.

During his first inaugural address, President Obama said that “those of us who manage the public’s dollars will be held to account, to spend wisely, reform bad habits, and do our business in the light of day, because only then can we restore the vital trust between a people and their government.” We just want to know exactly how the president is planning on accomplishing that accountability since a large portion of federal spending remains unchecked.

For now, we only hope that the President will respond to this GAO report in much the same way any responsible CEO would: with major changes.

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01/29/2013

Tuesday, Jan 29, 2013 Morning News

Coverage of our Drakes Bay Oyster Company lawsuit against the Department of the Interior and National Park Service continues. The Pacific Sun writes:

West Marin oyster farming is still floating in limbo this week, as Drakes Bay Oyster Company awaits a decision from an Oakland judge as to whether it can keep its Inverness vermiculture operation up and running during its lawsuit against the National Park Service and the Department of the Interior. The lawsuit was filed in December after Secretary of the Interior Ken Salazar allowed the farm’s lease to expire upon its Nov. 30 deadline.

 

The EPA was dealt a blow recently for the culture of overregulation that has seemed to permeate the agency as of late. Michael Bastasch of the Daily Caller News Foundation reports:

A federal court delivered a serious blow to the Environmental Protection Agency’s renewable fuel agenda, ruling that the agency exceeded its authority by mandating refiners use cellulosic biofuels, which isn’t commercially available.

The court sided with the country’s chief oil and gas lobby, the American Petroleum Institute, in striking down the 2012 EPA mandate that would have forced refineries to purchase more than $8 million in credits for 8.65 million of gallons of the cellulosic biofuel. However, none of the biofuel is commercially available.

 

The winds of change are starting to blow at the National Labor Relations Board, starting with a federal appeals court ruling that came down on Friday. Josh Hicks of the Washington Post brings us this story:

A federal appeals court on Friday ruled that President Obama exceeded his constitutional authority with three appointments to the National Labor Relations Board while the Senate was on break last year.

The impact of that decision by a three-judge panel of the D.C. Circuit Court of Appeals in Noel Canning v. NLRB will depend on what the Obama administration does next.

 

The Government Accountability Office is due to produce its biannual report on the areas of the government that present the highest risk for squandering tax payer dollars in the next couple weeks, and we are looking forward to seeing it.

 

Some more interesting reads:

The Atlantic – The most ridiculous law of 2013

USA Today (Op-Ed) – Revolving Door Government Ethics

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01/23/2013

Dispelling the Myths about the Drakes Bay Oyster Company conflict

The decision last November by Interior Secretary Ken Salazar not to renew The Drakes Bay Oyster Company’s lease was based on a number of inaccurate and misleading claims. Here are five myths that the Secretary, his supporters, and the National Park Service use to justify the oyster farm’s eviction from Drakes Estero:

 

Myth #1:

The Secretary’s decision was based on sound science.

National Park Service researchers claimed that oyster farming operations in Drakes Estero damaged eelgrass beds and upset seal breeding patterns.  Yet other NPS reports contradicted these claims, and the National Academy of Sciences stated that the Park Service had “exaggerated the negative and overlooked the potentially beneficial aspects of the oyster culture operation.” Marine biologist Corey Goodman, who independently studied the farm’s impact on the region’s ecology, called the Park Service research “a stunning misuse of science by our federal government.”  Secretary Salazar ultimately decided that the Park Service’s inaccurate Environmental Impact Study was “not material” to his final decision, ignoring federal law that requires such a study be taken into account.

Myth #2:

Renewing the lease would set a precedent.

Some people were concerned that allowing the oyster company to remain in Drakes Estero would create a model of privatization that other leaseholders in national parks could follow.  However, the 2009 law granting Salazar the right to extend the lease another ten years expressly states that the provision would not be viewed as precedent.  In fact, Salazar’s removal of the oyster company is likely to set a standard in the opposite direction, with more working farms and orchards expelled from national park lands.

Myth #3:

Removing the oyster farm would improve the region’s environmental health.

When owner Kevin Lunny first bought The Drakes Bay Oyster Company in 2004, he took out a $300,000 loan to clean and restore the farm.  Because his family’s livelihood depended on the productivity of Drakes Estero, he was careful to keep the waters clean and productive by clearing the bay of debris and trash left by hikers and kayakers.  The oysters themselves actually improved the bay’s water quality by filtering out algae that inhibits eelgrass growth.

Myth #4:

The disagreement is between environmentalists and the agriculture industry.

As a committed environmentalist, Kevin Lunny turned The Drakes Bay Oyster Company into a model of sustainable agriculture.  “It’s extremely healthy for the environment,” Mr. Lunny said. “There are no feeds, no fertilizers, no chemicals.”  Biologist Corey Goodman called Mr. Lunny “one of the pioneers for organic and sustainable agriculture that also protects the environment.” Advocates for the consumption of locally-produced food to reduce its environmental footprint have long supported the oyster farm, which sells nearly all its product to tourists and local restaurants. With Drakes Bay accounting for 40 percent of the state’s oyster production, California restaurants will have to fly oysters in from the Pacific Northwest or East Coast, increasing greenhouse gases and other harmful emissions.

Myth #5:

The Drakes Bay fight is only about politics: It’s Democrats versus Republicans

Some contend that the fight over Drakes Bay is politically split along ideological fault lines. This too is untrue. First, there has been an outpouring of support from a community where most bi-partisan races were easily won in 75/25 percent split (Democrats/Republicans). Further, Democratic Senator Dianne Feinstein has been a staunch defender of Drakes Bay Oyster Company, as well as a fierce critic of the National Park Service and Department of the Interior. In addition to crafting legislation, Feinstein has been outspoken in her support, even writing a letter to Secretary Salazar last March that called on him to renew the lease. With demonstrated partisan support, this issue isn’t split along party lines.

 

As of May 24, 2013, Cause of Action no longer represents Drakes Bay Oyster Company, the Lunny family, or Dr. Corey Goodman and will be withdrawing as counsel from the litigation.

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01/21/2013

The future may not hold the “sunshine” we government accountability advocates long to see.

In November we asked why the President continues to ignore laws that have been put in place to protect the integrity of the election system. What we continue to find is that there is a pressing need for increased accountability, not just over election law, but in holding administration officials accountable.

In April 2012 when the Federal Election Commission approved an audit by a vote of 6-0 finding that the Obama for America campaign “did not file required 48-hour notices for 1,312 contributions totaling $1,972,266 that were received prior to the general election,” the Obama for America Campaign agreed to pay the FEC a $375,000 fine, the largest fine ever given to a presidential campaign. Obama campaign spokeswoman Katie Hogan downplayed the FEC investigation, but this audit demonstrated that the FEC will take violations and enforcement of the law seriously.

Will this commitment from the FEC serve as a catalyst in an Administration for greater transparency and oversight? If the best predictor of future success is past behavior, the future may not hold the “sunshine” we government accountability advocates long to see.

Take the following examples into consideration:

When Health and Human Services Secretary Kathleen Sebelius violated the Hatch Act she lamented that the ruling was “somewhat unfair” and her actions were “technical and minor.” Regardless, she still broke the law and is the highest Administration official to ever be found guilty of a Hatch Act violation, yet she received no formal punishment for her actions.

National Labor Relations Board General Counsel Lafe Solomon was not prosecuted for violating conflict of interest laws, but instead was excused by the Board’s Office of Inspector General by a claim of “extenuating and mitigating circumstances.” According to a sworn affidavit by a former ethics officer at the NLRB, Solomon should not have been excused.

These are just two examples of a culture of abuse of power that seems to be carried out by the President and his Administration: First from his campaign, then through his first term. What will happen in his second term? The American people deserve public officials that are held accountable for their actions, and we will continue to call the President and his officials on the carpet in our demands for accountability and transparency.

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01/17/2013

DBOC Filings: Reply to Gov’t Opposition to Motion for Preliminary Injunction

Legal Brief:

Reply to Gov’t Opposition to Motion for Preliminary Injunction

 

 

Declarations:

Jorge Mata: Manager of DBOC. Lives on the farm with his family.

Dr. Linda Martello, ENVIRON: senior scientist consultant. Expert in ecological risk assessment and marine mammals.

Richard Steffel: Principal at ENVIRON International Corporation, specializing in environmental impact assessments related to air quality and environmental noise

Scott Luchessa, ENVIRON: natural resource consultant

Laura Moran: permitting specialist

Corey Goodman: scientist, member of the National Academy of Science

Kevin Lunny: President, DBOC.

 

 

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01/16/2013

Media Advisory: Court Hearing to Determine the Future of Drakes Bay Oyster Company Scheduled for Jan 25

***MEDIA ADVISORY***

 

COURT HEARING TO DETERMINE THE FUTURE OF

DRAKES BAY OYSTER COMPANY

WHAT:  A hearing in the U.S. District Court of the Northern District of California to determine whether to grant a Preliminary Injunction and allow Drakes Bay Oyster Company to continue operations on their family farm.

After receiving news on November 29, 2012 from Secretary of the Interior Ken Salazar that their family-run oyster farm could no longer remain on National Park Service land, the Lunny family enlisted the help of Cause of Action, as well as Stoel Rives, LLP, SSL Law Firm, LLP, and Briscoe Ivester & Bazel, LLP, to help fight for their farm, family, and their community against the government’s abuse of authority.

 

On December 18, Cause of Action filed a Motion for Preliminary Injunction, which if granted, will allow Drakes Bay Oyster Company to remain in business until the merits of the National Park Service and Secretary of the Interior Ken Salazar decision to shut down the farm have been decided by the Court.

 

 

WHO:   Kevin Lunny, owner, Drakes Bay Oyster Company

Amber Abbasi, Chief Counsel for Regulatory Affairs at Cause of Action

Ryan Waterman, of Counsel at Stoel Rives, LLP
Peter Prows, Partner at Briscoe Ivester & Bazel, LLP

Cause of Action is a nonprofit, nonpartisan organization that uses investigative, legal, and communications tools to educate the public on how government accountability and transparency protects taxpayer interests and economic opportunity.

 

 

WHEN: Friday, January 25, 2013 at 2:00pm Pacific Time

 

WHERE: Oakland Courthouse, Courtroom 5 – 2nd Floor

1301 Clay Street, Oakland, CA 94612

 

RSVP: This hearing is open to the media and the public. Cameras will not be allowed inside the courtroom.

 

To speak with Kevin Lunny, owner of Drakes Bay Oyster Company or Amber Abbasi, Chief Counsel for Regulatory Affairs at Cause of Action, contact Mary Beth Hutchins,  202-400-2721 or Jamie Morris, jamie.morris@causeofaction.org, at

202-499-4232

 

 

 

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01/16/2013

Daily Caller: Green companies sue Energy Dept. for ‘cronyism,’ leaking confidential business information

Read the full story here. Daily Caller

“The government watchdog group Cause of Action filed two lawsuits against the Department of Energy last week on behalf of two green businesses arguing that the department relied on political connections instead of merit-based reviews to award loan guarantees, and leaked the confidential business information to government-backed competitors.

“This case is about fighting government cronyism,” Dan Epstein, executive director of Cause of Action. “It is a rather fluid story of when you have a start-up company, that’s a small business … looking to get a piece of the American dream. And because the government is involved in the business of picking winners and losers, they fundamentally not only shut down that dream, but destroyed the company.”

Cause of Action is representing the companies XP Vehicles, which applied for a DOE loan to mass produce an SUV-style electronic vehicle that would start at less than $20,000, and Limnia, an advanced technology energy systems company that made critical technology for XPV….”

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