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02/13/2013

After The State of the Union: One Look at Energy and Jobs

“If we want to make the best products, we also have to invest in the best ideas.” This language along with “energy independence” and “clean energy “are a reoccurring themes with the Obama Administration, but are actions by the Department of Energy backing up the rhetoric?

Let’s circle back to the President’s 2011 State of the Union Address, in which he promised that the United States would become “the first country to have a million electric vehicles on the road by 2015.”

Recently, the Department of Energy has backed away from this target. Shocking, right?  Well, with only 71,000 electric vehicles currently on the road, the Administration has a long way to go in order to fulfill its promise to the American taxpayers.

The Advanced Technology Vehicles Manufacturing Loan Program (ATVM), a program designated to achieve better technology, innovation, and jobs, has since come under scrutiny. In a recent Washington Post article, Carol D. Leonning notes:

The program, “which is run by the Energy Department, invited ‘green’ carmakers to compete for huge, low-interest government loans that they could use to ramp up production, inside the United States, of electric and alternative vehicles that would reduce fuel emissions…So far, the program has only loaned $8.5 billion of its authorized funds.”

Headlining the New York Times earlier this week, John M. Broder’s less-than laudatory review of the Tesla Model S Sedan illustrates the failure of the electric vehicle to retain a battery charge and maintain operation within the allotted mile range between charges.   Tesla is just one of the five recipients of the Department’s ATVM Program, and part of the “solution” which the Administration boasted about, according to the Broder’s review:

“The federal government has invested in the effort to find a solution. Three years ago, Steven Chu, the Nobel Prize-winning physicist and secretary of energy, proudly announced a $465 million loan to Tesla as part of an advanced vehicles program intended to cut fossil fuel use and address global warming.”

One critic, Charles Lane of the Washington Post, went so far as to declare the ATVM loan program a “case study in unchecked righteousness.” We agree.  Who is holding the DOE accountable for their poor selections in loan recipients? Why did the DOE reject other, well-qualified candidates? And on what basis were these loans awarded?

Take XP Vehicles, for example.  They’re a green-energy startup based out of San Francisco, California who applied for the ATVM loan program in November 2008.  Their design cost less than $20,000, required no gasoline or extension cords to charge, was easy to repair and build, and used crash effect reduction materials.  So why aren’t their affordable and reliable cars out on the road?  DOE denied their loan.

Cause of Action has since stepped in, and is challenging the DOE’s process through which they granted these loans. We’re concerned the DOE has acted in an arbitrary and capricious manner, inconsistently favoring some, while disadvantaging other applicants. These loan programs were intended to promote U.S. advanced technology companies and to reduce U.S. dependency on foreign oil. Instead, we’ve only found ourselves with thousands of unsold cars, unfulfilled promises, and a growing distrust in the government.

There are other more deserving applicants of the ATVM loan program. We’re certain of it.

XP Vehicles may be just one of many applicants worthy of reconsideration, but they’re certainly a good place to start.

 

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02/5/2013

Who is watching the watchdogs?

Recently, Cause of Action sent a letter to Congressman Darrell Issa, chairman of the House Oversight Committee. In it, we address specific questions that we have about the efficacy and efficiency of the Office of Special Counsel (OSC).

Over the past few months, Cause of Action has been investigating the events leading up to and surrounding the Hatch Act violation by Department of Health and Human Services Secretary Kathleen Sebelius. Though OSC’s investigation concluded that Secretary Sebelius was guilty of a Hatch Act violation, Cause of Action was concerned that not enough had been done. We were concerned that Sebelius, who was the highest ranking executive branch employee ever to have been found guilty of violating the Hatch Act, had been essentially let off the hook without any real form of punishment and curious about how that had come about.

In essence, OSC is an independent arm of the executive branch that acts as a watchdog for federal employees through investigations and prosecution. Among many other things, the OSC investigates allegations of Prohibited Personnel Practices such as waste of funds, mismanagement, and abusive practices by those in power, as well as Hatch Act violations.

What we found over the course of our investigation was that aside from providing gross misinformation in their report, that OSC ignored other potential violations of the law by both Sebelius and her aide, and that they also failed to report FEC violations—all things that should have been easily uncovered during the course of their investigation.

Our investigation also found that when Sebelius attended a function for Senator Sherrod Brown, she was prepped by HHS staffers and also used HHS funds for her travel. Even though the funds were ultimately reimbursed by the Brown campaign, this raises serious questions not only about Sebelius’ use of taxpayer funds, but also about the efficacy of an OSC investigation.

The HHS debacle aside, OSC also failed to investigate an event at the White House, sponsored by the Democratic National Committee, despite receipt of a letter sent from Chairman Issa to the OSC.

The question is: how effective is the OSC at dissuading employees of the federal government from engaging in Prohibited Personnel Practices if they never conduct thorough investigations? Further, when violations are found, what message does it send to federal employees when investigations do not yield meaningful punishment?

The culture of waste, fraud, cronyism and corruption that seems to have permeated the federal government needs to stop, and without a proper watchdog, who is there to do it?

See the letter to Congressman Issa and our press release for more information.

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02/1/2013

Who will heed the call of accountability?

HHS Timeline_Final-01

This week, Cause of Action filed an FEC complaint revealing the Democratic National Committee’s violation of the Federal Election Campaign Act (FECA) in a potential attempt to hide its reimbursement for Secretary of Health and Human Services Kathleen Sebelius’ Hatch Act violation.

At a Human Rights Campaign Gala in February 2012, speaking in her official capacity, Secretary Sebelius campaigned for the election of Walter Dalton as Governor of North Carolina and of Barack Obama as President of the United States – a violation of federal law.  In attempting to belatedly “fix” her Hatch Act violation, Secretary Sebelius received reimbursement from the DNC for the cost of her attendance at the Gala, and five months later (and only at the behest of the Office of Special Counsel) those of HHS staffer AJ Pearlman, who supported Sebelius at the event.  However, the DNC failed to properly file these reimbursements under FECA, another breach of the law.

Cause of Action further found that during Sebelius’ effort to avoid responsibility for her Hatch Act violation, she retroactively reclassified her speech at the HRC Gala as a political instead of an official event. Securing reimbursement from the DNC for the event in an attempt to pretend the abuse never happened was enough to convince the President that no discipline was necessary in Sebelius’ case. Secretary Sebelius escaped the most high-profile Hatch Act violation in history completely unscathed.

But that’s not the end of the story. Sebelius’ classification of the event as political means that AJ Pearlman now stands in violation of the Hatch Act as well. As a government employee, Pearlman cannot participate in political events on work time.  Once Sebelius reclassified her speech as political, the DNC chose to reimburse HHS for Pearlman’s expenses as well. Pearlman, who had prepared Sebelius for the event and was in attendance with her, is now in violation of the Hatch Act, an offense punishable by firing, as her actions were done on the taxpayers’ dime.

The DNC violated FECA as it scrambled to fix Sebelius’ mistake.

Pearlman’s career has been jeopardized as a result of the law Sebelius broke.

When will Secretary Sebelius take responsibility for her own actions?

When will the OSC properly investigate these new allegations of Hatch Act violations?

Will the new revelations Cause of Action has brought to light about Sebelius’ corruption convince the President to finally ask her to accept the consequences of her actions?

We filed complaints this week with the Federal Election Commission against the DNC and with the OSC concerning AJ Pearlman.  Will these agencies heed the call of accountability?

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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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01/23/2013

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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01/11/2013

White House Opens New Year with Open Data Mandate

In our blog outlining New Year’s resolutions for the federal government, we noted how a report from the Cato Institute gave the administration poor grades on data publication practices. The report found that, “the administration and the Congress both receive fairly low marks under systematic examination of their data publication practices.”

We are happy to learn that the administration is working towards improving its data public practices. According to Federal News Radio, the Office of Management and Budget will soon mandate that agencies release machine-readable data.

The change is part of the president’s Digital Management Strategy described in a May 23, 2012 report from the White House.  An objective in the report states that, “We must enable the public, entrepreneurs, and our own government programs to better leverage the rich wealth of federal data to pour into applications and services by ensuring that data is open and machine-readable by default.”

Jim Harper, the author of the Cato report on government publication practices, called the change “good, not yet great.”  He added that, “great would be the White House itself publishing machine-readable, open data when it issues the president’s budget in February. Along with the plan for fiscal year 2014 spending, why couldn’t we get the code that distinctly identifies each agency, bureau, program, and project—in essence, the organization of the U.S. federal government?”

There is still a lot of work this administration needs to take regarding open government and transparency, but we applaud this change. We hope OMB officially issues this mandate sooner rather than later.

 

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