Tag: oversight
Changing Of The Guard On Oversight Panels

Changing Of The Guard On Oversight Panels

By Tim Starks, CQ-Roll Call (TNS)

Congress lost several of its titans of aggressive, bipartisan oversight and investigation at the end of last year: the likes of Carl Levin, Tom Coburn and George Miller. Analysts say this continues a trend that, with the loss of tough questioners such as Henry A. Waxman and John D. Dingell, amounts to a brain drain for an art that has been on the decline since the 1970s.

It is not, they predict, a trend likely to turn around in a congressional term where the presidency will be up for grabs, with a GOP-controlled House and Senate and a Democratic incumbent as commander-in-chief.

“If you like oversight, you’re going to get it, but it might not be the oversight you like,” said David C.W. Parker, a Montana State University political science professor who co-authored a 2013 study of congressional oversight.

Yet while that particular brand of muscular oversight that’s light on politics might be in shorter supply until after 2016, it isn’t necessarily without hope.

There’s a new generation with freshly acquired committee gavels, including Republicans Jason Chaffetz of Utah at House Oversight and Government Reform, and Bob Corker of Tennessee at Senate Foreign Relations, who might be ready to step in. And there are still some standard-bearers around — Senate Armed Services Chairman John McCain of Arizona, for instance — in new positions of authority.

What’s more, independent efforts are afoot to bolster oversight from the outside, some of them drawing on the talents of recently departed Hill leaders. Levin, for instance, is exploring ways to strengthen oversight.
“This is not the Congress of the 1970s that brought about tremendous reforms in the executive branch through serious and diligent oversight work,” said Justin Rood, a former investigator for Coburn and now leading one of the independent efforts at the Project on Government Oversight.

Still, Rood said, “We’ve been heartened by the comments and actions from folks like Chairman Chaffetz and others saying the right things and doing the right things to suggest they want to pursue oversight as a collaborative effort with Democrats.”

Chaffetz has gone to lengths to distance himself from his predecessors, most notably the combative California Republican Darrell Issa, even removing Issa’s portrait and those of other past chairman from the committee’s hearing room, although he maintains it was no slight against them.

Nonetheless, Chaffetz recently got his first taste of friction with the opposite party at a markup establishing rules for his panel, rules that Democrats harshly criticized as the ongoing “Issa-tizing” of the committee and the House as a whole.

“We’re going to be aggressive; we’re not going to mince words. I hope it ends up being as bipartisan as it can,” Chaffetz said. “It’s imperative that we get to the truth. I think if we can avoid making it too personal with other members of Congress and make sure we don’t attack their motivations, all will be good. We’re going to tackle issues that the Democrats aren’t going to like. I hope at the end of that process, they’ll say we were tough but fair.”

The Congresses of the 1970s marked a departure point for oversight and investigations, Parker said. The landmark Watergate investigation didn’t begin as a bipartisan one, and only ended that way once Richard Nixon’s political fortunes sank.

However impressive Congress’ work was on Watergate in demonstrating the value of stiff, bipartisan oversight, it also demonstrated to aspiring politicians that rooting out scandal could be a great way to seize the spotlight, said Parker.

Parker’s research clearly suggests that when there is divided government, the quality of oversight decreases even as the quantity of it increases. That tendency is greater in the House than in the Senate, with more investigations overall, but shorter ones.

In divided government, Parker said, “they prosecute the other party, essentially. They engage in politics by other means. If you think about oversight in terms of good government, that’s not necessarily what’s happening. Conversely, if you flip it around, unified government oversight leads to problems getting swept under the rug.”

“Bipartisan” and “aggressive” are sometimes difficult to combine. For some of the pockets of bipartisan oversight in Congress in recent years, such as the House Intelligence Committee, one criticism has been that Republicans and Democrats have been too sympathetic toward the agencies they oversee.

Some of the issues might be structural. Former aides to a special Senate committee that investigated intelligence abuses in the 1970s, better known as the Church Committee after its chairman, Frank Church (D-ID, 1957-81), recently came together for a New York University report that called on Congress to examine its own oversight.

“The Senate Intelligence Committee’s five-year inquiry into the CIA’s abusive detention and interrogation practices provides a striking example of the diligence Congress can apply in meticulously scrutinizing covert government activities, and preparing a report suitable for public release,” the report states.

“But it also exposes its limits. The summarized report details how the CIA successfully frustrated oversight of its torture program for several years by refusing, delaying, or inappropriately limiting congressional briefings, and providing incomplete, inaccurate, and misleading information to its overseers.”

A Vanderbilt University study last year concluded that Congress has diluted its own influence by having too many committees overlapping in their oversight of specific agencies.

McCain said congressional oversight hasn’t gotten better during his time in office. “Overall, it’s worse, of course,” he said.

McCain is a member of the old guard, but he is joined by some newer faces among committee leaders who could carry the torch of aggressive, bipartisan oversight and investigation.

McCain and the top Democrat on his committee, Jack Reed of Rhode Island, point to a deeply ingrained culture at Senate Armed Services, with former leaders such as Levin and Virginia Republican John Warner.

“It’s a continuity, because fortunately over many years under Democratic and Republican chairmen, it’s been a bipartisan committee,” McCain said. “On the Armed Services Committee we have this long tradition. In some ways it would be viewed by members on both sides as a tremendous breach if we didn’t maintain that.”

Said Reed: “In many of the efforts, Senator Levin and Senator McCain worked together. You’re looking at someone who’s done serious bipartisan investigation of tough problems, shedding light on problems that wouldn’t otherwise be discovered.”

Chaffetz said he admires the approach of Coburn, whom he thinks exemplifies the “tough but fair” philosophy he follows. He even hired a former Coburn staffer, Andrew Dockham, to be his general counsel.

While on the Oversight and Government Reform Committee, Chaffetz has been at the forefront of digging into matters that annoy Democrats, like the 2012 attack on the U.S. consulate in Benghazi, Libya.

And some of the issues he wants to examine as chairman, such as the 2010 health care law or the Internal Revenue Service scrutiny of nonprofits, are sure to continue annoying them.

But Chaffetz also said his committee is done with Benghazi, now the subject of a separate House select committee investigation. He points to his agreement with Obama on some topics, such as Cuba, and his work with Democrats on other topics, such as prison reform. Last year he did a “district swap” with the panel’s top Democrat, Elijah E. Cummings of Maryland, where they each visited one another back home.

“If you earn a reputation for calling balls and strikes as you see them, I think you gain a lot of credibility. Hopefully I’ve done that through the years,” he said. “I hope the authenticity of my positions is readily apparent and builds bridges rather than blow them up.”

That said, Chaffetz expected the Democratic fight over committee rules because he had talked with them about it in advance. At that Jan. 27 markup of committee rules, Chaffetz refused to give up his unilateral subpoena power. Democrats say Issa abused that authority, which a number of House committees have adopted in 2015 and which has troubled many advocates of bipartisan oversight.

Chaffetz said he intends to consult Democrats on those subpoenas, but wouldn’t relinquish his authority simply to appease Democrats.

Waxman, a member of the departed corps of veteran congressional interrogators, decried the GOP consolidation of subpoena power in a Washington Post op-ed on Feb. 6. “This is an invitation to abuse that diminishes the prospect for responsible congressional oversight,” he wrote. “Unfortunately, this ill-fated move has received virtually no attention.”

Although Chaffetz believes he can work with Democrats on issues such as the Secret Service or the powers of inspectors general, he said that sometimes they won’t be happy.

“I don’t want the Democrats to cry foul just because we’re looking at the Obama administration,” he said. “He won the election. He’s the president. We are the check and balance. To do our job under the Constitution, we’re supposed to be asking tough questions.”

Corker, for his part, said a pre-existing relationship with the top Democrat on Foreign Relations, Robert Menendez of New Jersey, will make the oversight better. “Our default position is always to do first everything we can with the minority side,” Corker said, “which is what they did when they were in the majority.”

One of Corker’s priorities will be to restore passage of a regular State Department authorization bill, a key vehicle for committee oversight of an agency. “It’s essential,” he said. “It’s actually, let’s face it, one of our primary obligations here. It’s really hard to believe we haven’t passed one in 13 years.”

The Project on Government Oversight has previously offered oversight and investigative training to staff members from both parties, but in December it formed a new Congressional Oversight Initiative to expand that.

“We saw that this last Congress, a significant number of congressional oversight leaders retiring from office, and along with that a lot of their staff, which worried us,” said Danielle Brian, executive director of POGO.

The group’s initiative draws on a network of Hill oversight veterans, some of who worked in Congress as far back as the 1980s, Rood said. The program recently produced an analysis of committee rules that it shared with Hill staff members, and plans to offer other services as well.

“It’s not news that in recent years, the legislative branch has struggled to hold the executive branch to account,” Rood said. “We’re trying to keep the flame from dying.”

A lingering question will be whether the caliber of hard-nosed, unbiased investigation will be affected by the 2016 presidential race. “Elections can get in the way, but we can’t go into hibernation because there’s going to be a new president in town,” Chaffetz said.

“I would ask the same hard questions whether it was President (Mitt) Romney or President Obama,” he said. “My guy lost. I’m over it and we’ve got a job to do. We’ve got so many topics to go through. There’s a nearly $4 trillion budget, and with millions of employees somebody is always doing something stupid somewhere.

“I gotta do my job, and they might try to assess motivations, but all I’m trying to do is root out waste, fraud and abuse,” Chaffetz said.

Photo: Jim Greenhill via Flickr

Franken Calls For Oversight Of Ratings Agencies

With world markets suddenly sagging under the weight of the Standard & Poors downgrade of Treasury bonds last Friday, Senator Al Franken (D-MN) is disturbed by the monopolistic power of the ratings agencies – and still determined to curb their abuses, as he tried to do last year with an amendment to the Dodd-Frank banking reform bill.

In an exclusive Monday interview, the Minnesota Democrat said that the misconduct of the ratings agencies led directly to the economic catastrophe that S&P’s rating decision has now made even worse. Franken wondered aloud why his proposed reforms of the ratings industry should still be subject to “study” rather than action by the Securities and Exchange Commission.

By setting up an independent federal board to assign ratings jobs to the agencies — rather than letting them be paid by those who issue the securities they grade — his proposal would have severed the industry’s gross conflicts of interest. Known as the “issuer pays” model, that traditional relationship let the banks reward S&P and Moody’s for awarding rubber-stamp AAA ratings to worthless mortgage-backed securities (as they did for years before the housing bubble burst).

It was those abuses, he said, that left taxpayers, workers and government “holding the bag” while the bankers and ratings firms walked away with huge profits. “What I was trying to do was open this business to more competition,” said Franken. “And then ultimately as time went on, the track record of accuracy would be the thing that determined who got what [contract], and who got to grade [which securities]. You’d be rewarded for accuracy, instead of bribery. Put those alongside each other: Bribery; accuracy. Accuracy; bribery. Hmmm…” He laughed. “Which method do you think will probably yield a better product, a more transparent product?”

He recalled, “The problem wasn’t just that [the ratings agencies] gave these AAA ratings to sub-prime mortgage securities. It’s that after the banks ran out of sub-prime mortgages to securitize, they then gave AAA ratings to bets on sub-prime. They created an entire other market” based on so-called derivatives that allowed the banks to bet on (or against) the future value of those assets.

“Basically the banks were going like, ‘Oh man we’ve run out of these sub-prime mortgage-backed securities, we can’t make any more money with these things. Wait a minute, why don’t we do derivatives of them — great idea! You know what, we need AAA ratings though…No problem! We’ll just go to our pals, the guys we’ve been paying for these other AAA ratings and ask them to rate these! Wink wink…” He laughed again. “And then they did those!”

The result, said Franken, was the construction of a “house of cards” that became “bets on bets.” To award AAA ratings to those securities was “unconscionable and unbelievable,” he added, but it created the market that led to this collapse.”

In his view, the way to prevent similar abuses in the future is “to open this business to more competition,” with reforms overseen by a board comprised mainly of institutional investors as well as members from the ratings agencies and the investment banking community. Rating firms that are smaller than S&P or Moody’s would have a better chance to compete under such a system, he said, “because they would develop expertise” in certain areas of finance. Big and small firms alike “might be rewarded for their diligence, intelligence and ingenuity” rather than their prejudicial treatment of dubious investment vehicles. “They’d get more business if they’re more accurate and less business if they’re less accurate.” The old-fashioned American way of doing business? “Yeah, I think there was a time when that was rewarded,” he said sardonically.

Franken’s own reward, most recently, was a strange editorial in Monday’s Wall Street Journal, which accused him of protecting the oligopoly enjoyed by the three major ratings agencies. “You know how usually they bend the truth?” he said of the notoriously conservative, Murdoch-owned daily’s editorial page. “Well this is the opposite of the truth. I was the nemesis of the rating agencies. When my amendment passed, the rating agencies’ stocks went down the next day.”

Although the Franken amendment passed the Senate by a substantial margin, with many Republican votes, his proposed reforms were delayed by a two-year study of the problem now under way at the SEC. “I don’t know why you need to do much of a study on this thing,” he said. “We know what happened. This is like doing a study on whether using steroids is a good idea for ballplayers.” There was Republican opposition to his reforms, especially in the Tea Party-dominated House. But according to Franken, it was Senator Chris Dodd (D-CT), then the chair of the Senate Banking Committee, who told him that the ratings agencies needed to be studied further because “unintended consequences” might result if his reforms were implemented immediately.

“I said, ‘What in this bill couldn’t conceivably have unintended consequences?’” he said. “Everything could possibly have unintended consequences.” He laughed again. “We’d never pass anything if it had to be held up to that standard.”

And of course there could be unintended consequences from doing nothing as well – as we are now learning. Franken said that he didn’t know how much money the ratings agencies had earned from past abuses. “The banks made their money, the ratings agencies made their money, and all of us are left holding the bag, with this high rate of unemployment and the inability of small businesses to get capital, which makes unemployment worse. And they’re still making fortunes now.”