The VA’s Acting Secretary Claimed He Has Authority Over the Agency’s Independent Watchdog. He’s Wrong.

Department of Veterans Affairs (VA) acting secretary Peter O’Rourke incorrectly claimed authority over the VA Inspector General (IG) in a letter sent to the IG on June 11 and published by Stars and Stripes on June 20.  In the letter, O’Rourke wrote to VA IG Michael Missal:

“You also appear to misunderstand the independent nature of your role and operate as a completely unfettered, autonomous agency. You are reminded that OIG is loosely tethered to VA, and in your specific case as the VA Inspector General, I am your immediate supervisor. You are directed to act accordingly.”

The letter from O’Rourke was in response to IG Missal’s concerns outlined in a June 5 letter to the VA that claimed the agency was withholding information from the IG, including information about whistleblower complaints. By trying to strongarm the IG, not only is O’Rourke blatantly mistaken in his interpretation of federal law, but his threatening language in the letter is deeply troubling. While the relevant law, the Inspector General Act of 1978, does put IGs under “general supervision” of agency heads, it makes clear that they have their own independent authority:

“Establishment IGs [IG Act, § 3(a)]: The Act specifies that each IG ‘shall report to and be under the general supervision of the head of the establishment involved or, to the extent such authority is delegated, the officer next in rank below such head, but shall not report to, or be subject to supervision by, any other officer of such establishment.’ Except under narrow circumstances discussed below, even the head of the establishment may not prevent or prohibit the IG from initiating, carrying out, or completing any audit or investigation, or from issuing any subpoena during the course of any audit or investigation.” (Emphasis added)

The Council of the Inspectors General on Integrity and Efficiency (CIGIE) explains that “[w]hile by law, IG’s are under the general supervision of the agency head or deputy, neither the agency head nor the deputy can prevent or prohibit an IG from conducting an audit or investigation. The VA’s own Functional Organization Manual states that the VA IG is “an independent oversight entity” that “[h]as authority to inquire into all VA programs and activities.”

Simply put, an IG is an independent entity that operates separately from the oversight of any official within the agency it oversees. The independent authority of the IG ensures that investigators can conduct their work without fear of reprisal.

Cause of Action Institute has often written about the issues of having watchdogs without permanent leadership, but an uncooperative agency is a similar, if not greater, problem for accountability and oversight. The VA’s acting secretary should stop claiming authority he does not have and should not try to hinder accountability at a federal agency that desperately needs it.

Ethan Yang is a Research Fellow at Cause of Action Institute.

Inspector General Admits to Flawed FOIA Rule and Intends to Request HUD Revisions

The Department of Housing and Urban Development (“HUD”) Office of Inspector General (“OIG”) has responded to Cause of Action Institute’s (“CoA Institute’) letter requesting that the watchdog recall and revise its direct final rule implementing changes to its Freedom of Information Act (“FOIA”) regulations.  CoA Institute criticized the OIG’s cross-referenced definition of a “representative of the news media,” which improperly retained the outdated “organized and operated” standard, rather than incorporating the statutory definition.  The OIG now admits that its flawed FOIA rule “does not track the current statutory language,” and agrees that the D.C. Circuit’s decision in Cause of Action v. Federal Trade Commission is controlling.

As we previously explained, the OIG, as an independent component of HUD, maintains its own rules regulating public access to its records.  Yet the OIG still relies on department-wide FOIA policy in certain respects, including HUD’s general provisions for charging fees to requesters.  With respect to the definition of a news media requester, HUD’s regulations do not comport with statutory and judicial authorities.

Although the HUD watchdog concedes it promulgated a flawed FOIA rule, it will not commit to revising its regulations due to the “difficulty” of doing so.  The OIG has instead forwarded CoA Institute’s letter to HUD with the request that the agency-wide regulations be amended.

Unfortunately, HUD issued its own final rule implementing revised FOIA regulations back in January 2017.  When it did so, the agency did not solicit public feedback.  CoA Institute nevertheless submitted a comment to explain the deficiency in HUD’s rule.  That comment went unanswered and, to date, HUD has not indicated any intention of revisiting its flawed rule.  It is promising that the OIG agrees there is a serious deficiency in its regulations.  Considering that acknowledgement, though, the agency should undertake efforts now to fix the obvious error.

Ryan Mulvey is Counsel at Cause of Action Institute

Dear President Trump: It’s Time to Release the Watchdogs

You’re unlikely to hear much about it, but today marks an important yet troubling milestone. The Department of the Interior has gone 3,000 days—over eight years—without a permanent IG, or “Inspector General.”  And according to the Project on Government Oversight’s “Where Are All the Watchdogs?” tracker, there are eleven other IG vacancies, including empty spots at the Central Intelligence Agency (832 days), the Department of Defense (489 days), and the National Security Agency (346 days). It was inexcusable for President Obama to neglect to fill these vacancies with qualified candidates.  It is similarly irresponsible for President Trump to continue to ignore these vital appointments.

IGs serve as the internal watchdogs of the Executive Branch agencies. They are tasked with identifying and combatting waste, fraud, and abuse at their respective entities.  To accomplish this, they conduct important investigations, inspections, and audits.  They are intended to operate independently of agency leadership—a sort of internal check on the operation of the administrative state.

The absence of permanent IG appointees to these vital roles is concerning for numerous reasons. First, it reflects the Administration’s lack of commitment to transparency and accountability in government.  Moreover, acting IGs lack true independence.  As Senator Ron Johnson has commented, “[t]hey are not truly independent, as they can be removed by the agency at any time; they are only temporary and do not drive office policy; and they are at greater risk of compromising their work to appease the agency or the president.”

There has been a renewed push to highlight the crises in IG appointments in recent weeks. The House Oversight and Government Reform Committee, for example, called on President Trump last month to fill the numerous vacancies, describing IGs as “essential to the functions of federal government.” A bi-partisan group of members of the Senate Homeland Security and Governmental Affairs Committee did the same: “[T]he lack of a permanent IG can create the potential for conflicts of interest and diminish the essential independence of IGs.”

President Trump still has a long way to go in appointing qualified candidates to fill the Executive Branch, and it is admittedly early in his Administration. But selecting qualified, independent, and committed individuals for these vacant watchdog spots should be a top priority.

Ryan Mulvey is Counsel at Cause of Action Institute.


New Law Set to Clarify and Strengthen Authority of IGs to Access Agency Records

This month, the U.S. Senate voted by unanimous consent to pass the Inspector General Empowerment Act of 2016, which originated in the House of Representatives and was sponsored by Representative Jason Chaffetz (R-UT), Chairman of the Committee on Oversight and Government Reform, and Senator Chuck Grassley (R-IA).  The bill now heads to the President’s desk, where it should be signed into law.

The IG Empowerment Act is an important step in strengthening the power and independence of the official “watchdogs” of the administrative state.  The main thrust of the legislation is to reinforce the power of IGs to access any agency records necessary for their oversight efforts.  This is seen as necessary to bypass the roadblocks to accessing records set up by many agencies—including the Department of Justice, Peace Corps, Department of Commerce, Treasury, and EPA—over the past six years.  The Obama Administration’s efforts to prevent IGs from carrying out their statutory duty to combat waste and fraud found their apogee in a July 2015 memorandum circulated by DOJ’s Office of Legal Counsel, which was strongly condemned by the IG community.  That legal opinion is now superseded by statute.

The recently passed bill also modifies the operation and reporting obligations of the Council of the Inspectors General on Integrity and Efficiency—or CIGIE—the independent entity within the government composed of all the IGs.  Additionally, the IG Empowerment Act clarifies when agencies and whistleblowers are authorized to disclosure sensitive information to their IG.

According to a recent congressional report, the obstructions faced by IGs, and the more than 15,000 recommendations that have been unimplemented by their agencies, have cost taxpayers $87 billion in lost savings.  While the IG Empowerment Act will likely improve the effectiveness and integrity of the Executive Branch, and save taxpayers a great deal of money, there is still room for improvement.  For example, the new bill fails to address the lack of subpoena power needed to compel testimony from federal employees and contractors, especially in instances where an agency refuses to cooperate with an IG’s ongoing investigation.

Congress should also take further steps to resolve the perineal problem of IG vacancies.  While the new bill requires the Comptroller General, who leads the Government Accountability Office, to examine the effect of these long-vacant posts, additional pressure could be placed on the White House to nominate new IGs and the Senate to confirm them.  For example, the Department of Commerce just received a new IG, and President Obama also announced the nomination of the first-ever IG for the National Security Agency, but too many empty spots remain.  According to CIGIE, nine presidentially-appointed, Senate-confirmed IG positions are empty.  The Project on Government Oversight calculates that the Department of Interior IG position has been vacant for over 2,800 days.  This is unacceptable.

Organizations like Cause of Action Institute remain committed to public oversight, but their tools are limited.  IGs are in a unique position to work with non-governmental actors and Congress alike to hold the Executive Branch accountable.  Efforts to strengthen the position and authority of IGs should therefore be seen as bolstering open and transparent government.  The IG Empowerment Act is one such effort.  In the its new session under President Trump, Congress ought to consider additional ones.