[Senate Hearing 111-964]
[From the U.S. Government Printing Office]
S. Hrg. 111-964
OVERSIGHT OF RECONSTRUCTION CONTRACTS
IN AFGHANISTAN AND THE ROLE OF THE SPECIAL INSPECTOR GENERAL
=======================================================================
HEARING
before the
AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT
of the
COMMITTEE ON
HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
__________
NOVEMBER 18, 2010
__________
Available via http://www.fdsys.gov
Printed for the use of the Committee on Homeland Security
and Governmental Affairs
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COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware JOHN McCAIN, Arizona
MARK PRYOR, Arkansas GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri LINDSEY GRAHAM, South Carolina
JON TESTER, Montana
ROLAND W. BURRIS, Illinois
MICHAEL F. BENNET, Colorado
Michael L. Alexander, Staff Director
Brandon L. Milhorn, Minority Staff Director and Chief Counsel
Trina Driessnack Tyrer, Chief Clerk
Joyce Ward, Publications Clerk and GPO Detailee
AD HOC SUBCOMMITTEE ON CONTRACTING OVERSIGHT
CLAIRE McCASKILL, Chairman
CARL LEVIN, Michigan SUSAN M. COLLINS, Maine
THOMAS R. CARPER, Delaware TOM COBURN, Oklahoma
MARK L. PRYOR, Arkansas JOHN McCAIN, Arizona
JON TESTER, Montana LINDSEY GRAHAM, South Carolina
MICHAEL F. BENNET, Colorado
Margaret Daum, Staff Director
Molly Wilkinson, Minority Staff Director
Kelsey Stroud, Chief Clerk
C O N T E N T S
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Opening statements:
Page
Senator McCaskill............................................ 1
Senator Brown................................................ 3
WITNESSES
Thursday, November 18, 2010
Hon. Jon T. Rymer, Inspector General, Federal Deposit Insurance
Corporation, and Chair, Audit Committee, Council of the
Inspectors General on Integrity and Efficiency................. 5
Hon. Richard W. Moore, Inspector General, Tennessee Valley
Authority, and Chair, Investigation Committee, Council of the
Inspectors General on Integrity and Efficiency................. 6
Arnold Fields, Special Inspector General for Afghanistan
Reconstruction................................................. 14
Hon. Gordon S. Heddell, Inspector General, U.S. Department of
Defense........................................................ 32
Hon. Harold W. Geisel, Deputy Inspector General, U.S. Department
of State....................................................... 34
Michael G. Carroll, Deputy Inspector General, U.S. Agency for
International Development...................................... 35
Stuart W. Bowen, Jr., Special Inspector General for Iraq
Reconstruction................................................. 36
Alphabetical List of Witnesses
Bowen, Stuart W. Jr.:
Testimony.................................................... 36
Prepared statement with an attachment........................ 192
Carroll, Michael G.:
Testimony.................................................... 35
Prepared statement........................................... 180
Fields, Arnold:
Testimony.................................................... 14
Prepared statement with attachment........................... 64
Geisel, Hon. Harold W.:
Testimony.................................................... 34
Prepared statement with an attachment........................ 168
Heddell, Hon. Gordon S.:
Testimony.................................................... 32
Prepared statement........................................... 151
Moore, Hon. Richard W.:
Testimony.................................................... 6
Prepared statement........................................... 57
Rymer, Hon. Jon T.:
Testimony.................................................... 5
Prepared statement........................................... 45
APPENDIX
Chart referenced by Senator Brown submitted by Senator Coburn.... 212
Questions and Responses for the Record from:
Mr. Fields................................................... 213
Additional statement submitted for the record from Mr. Fields.... 218
OVERSIGHT OF RECONSTRUCTION
CONTRACTS IN BILITY OF INSPECTORS
AFGHANISTAN AND THE ROLE OF THE SPECIAL INSPECTOR GENERAL
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THURSDAY, NOVEMBER 18, 2010
U.S. Senate,
Ad Hoc Subcommittee on Contracting Oversight,
of the Committee on Homeland Security
and Governmental Affairs,
Washington, DC.
The Subcommittee met, pursuant to notice, at 3:35 p.m., in
room SR-428A, Russell Senate Office Building, Hon. Claire
McCaskill, Chairman of the Subcommittee, presiding.
Present: Senators McCaskill and Brown.
OPENING STATEMENT OF SENATOR MCCASKILL
Senator McCaskill. First, let me apologize to the witnesses
and the people who are attending this hearing. This has been an
incredibly busy week, and I got caught up in a meeting and
could not get out, so I apologize for being a few minutes late.
The Subcommittee on Contracting Oversight of the U.S.
Senate Committee on Homeland Security will come to order, and I
will briefly have an opening statement about the hearing today
and then defer to my colleague Senator Brown for his opening
statement, and then we will have three panels of witnesses to
get at the issue that we want to cover this afternoon.
This is a hearing on the role of the Special Inspector
General (SIG) in oversight of contracts in Afghanistan. This
Subcommittee was created at the beginning of the Congress to
provide oversight of government contracting. Over the last 18
months, we have focused on two key areas: Improving the
government's oversight and reducing waste, fraud, and abuse.
Four of the Subcommittee's 15 hearings, including today's, have
examined contracting in Afghanistan and how to ensure that the
government is getting the best possible value for the billions
of dollars we spend there.
Today's hearing on the Special Inspector General for
Afghanistan Reconstruction (SIGAR), brings these issues
together. The origin of this hearing began in March 2009 when I
joined with Senator Lieberman, Senator Collins, Senator Coburn,
and Senator Grassley to introduce legislation to give SIGAR
better hiring authority. At that time, General Fields had been
the SIGAR for more than 7 months, and SIGAR had not yet
completed any original audit or investigative work. This raised
serious concerns about SIGAR's effectiveness at protecting
against waste, fraud, and abuse in Afghanistan.
Even though SIGAR received additional money and new hiring
authorities in the summer of 2009, the organization did not
improve. SIGAR continued to have difficulties in recruiting
adequate experienced staff. We learned that SIGAR performed
only one contract audit prior to December 2009 while devoting
time and resources to reviews of subjects outside of its
mission, like a 2009 review of the role of women in the Afghan
election.
We were particularly concerned that SIGAR was failing to
establish the right priorities for its work, and so in December
2009, Senator Collins, Senator Coburn, and I asked the
President to conduct a thorough review of SIGAR. In July 2010,
the Council of the Inspectors General for Integrity and
Efficiency (CIGIE), completed their review. This review
confirmed many of the problems that my fellow Senators and I
had been concerned about. SIGAR did not have a plan and was not
doing risk assessment. They had not put the right investigative
team in place. Their audits were more focused on quantity than
quality. And their management and leadership had failed to
create an efficient, effective organization.
The focus of today's hearing is how SIGAR, under the
leadership of General Arnold Fields, whom I hold in high regard
as a decorated retired general in the United States Marine
Corps and one of our Nation's heroes, has fallen so short of
the mark. CIGIE found SIGAR's Investigations Division failed to
meet minimum standards and referred its findings to the
Attorney General to consider revoking SIGAR's law enforcement
authority. CIGIE also found that SIGAR's Audit Division had no
less than five major deficiencies. Today we will ask General
Fields how this happened on his watch.
In the course of today's hearing, we will also examine
General Fields' decision to award a $96,000 sole-source
contract to Joseph Schmitz, the former Defense Department
Inspector General, who did resign in 2005 and did have
allegations made against him. General Fields hired Mr. Schmitz
to act as a ``independent monitor'' of SIGAR's compliance with
the CIGIE review and to report SIGAR's progress to the
Department of Justice (DOJ).
We have learned that SIGAR understood that by awarding the
contract to Mr. Schmitz, they would also be obtaining the
services of Louis Freeh, the former FBI Director, whom SIGAR
thought would act as an advocate for them at the Justice
Department. Interestingly, we have learned that Mr. Freeh's
organization spoke only briefly with Mr. Schmitz about this
contract and quickly decided that they were not interested in
participating. We will ask General Fields why he thought that
this contract was in the best interests of the taxpayer.
We will also be hearing from four experts on conducting
oversight in a war zone: The Inspectors General for the Defense
Department, the State Department, United States Agency for
International Development (USAID), and the Special Inspector
General for Iraq Reconstruction. They will share their lessons
learned and what needs to happen going forward.
The government's record on contracting in Iraq and
Afghanistan has not been pretty. That is why it is so important
that we have aggressive, independent, quality oversight. With
hundreds of billions of dollars at stake, there is no room for
error and no time to delay.
We are having this hearing today because a frank, open, and
on-the-record discussion is imperative to adequately oversight
going forward and to make sure that we protect the men and
women in uniform in the contingency theater and also protect
the American taxpayer.
I look forward to hearing the testimony of our witnesses
today and providing General Fields the opportunity to address
the Subcommittee's concerns. And I will now defer to my
colleague Senator Brown.
OPENING STATEMENT OF SENATOR BROWN
Senator Brown. Thank you, Madam Chairman. Well said.
Today as Ranking Member of the Subcommittee, I would like
to specifically thank you, Madam Chairman, for scheduling this
afternoon's hearing on this very important topic. And since I
joined the Subcommittee, this is the second hearing I have
participated in on this very important topic: The oversight of
contracts in Afghanistan.
As General Petraeus recently stated in his contracting
guidance, ``The scale of our contracting efforts in Afghanistan
represent both an opportunity and a danger. With proper
oversight, contracting can spur economic development and
support the Afghan Government's and International Security
Assistance Forces (ISAFs) campaign objectives. However, we
spend large quantities of money on international contracting
funds quickly, and with insufficient oversight it is likely
that some of these funds will unintentionally fuel corruption,
finance insurgent organizations, strengthen criminal activities
and networks, and undermine our efforts in Afghanistan.'' And,
Madam Chairman, I agree with General Petraeus, his guidance
that if our soldiers are willing to pay the ultimate sacrifice
for the success of the mission, the least we can do in Congress
is to ensure that the American taxpayers' funds go to the right
people for the right purpose.
Since the United States and its coalition partners began
operations in Afghanistan on October 7, 2001, the United States
has invested approximately $56 billion in Afghanistan, which is
more than the $53.8 billion invested in Iraq. Despite this
substantial commitment on the part of the American taxpayers,
problems continue to persist, such as waste, fraud, and the
fueling of corruption. By far, the most troubling finding is
that American taxpayer money has been flowing to Taliban
insurgents, which I find unconscionable.
Today we will examine whether the oversight in Afghanistan
is meeting the necessary level to accomplish the mission and
protect the taxpayers and use it how our soldiers expect it to
be used so they can be provided with the tools and resources to
do the job.
On January 28, 2008, Congress created SIGAR to provide
leadership in preventing and detecting waste, fraud, and abuse
of taxpayer funds used in the Afghanistan conflict. To date,
Congress has appropriated $46.2 million for this mission. While
I fully appreciate the difficult circumstances in which SIGAR
must work, I am convinced that we are not receiving the
necessary return on our investment in our oversight activities.
As noted, we will soon, hopefully, find out more about those
numbers.
The recent council, noted as CIGIE, as you noted, Madam
Chairman, report on SIGAR found that it did not have the
robust, ongoing program of risk assessment and that it was not
looking in the right places for fraud, waste, and abuse. The
oversight army in Afghanistan includes the Department of
Defense (DOD), State, Agency for International Development,
Inspectors General (IG), and SIGAR. Yet the accountability of
the American taxpayers funds in Afghanistan remains limited.
In this hearing today, I plan to ask the Inspectors General
how we can better strategically align these oversight resources
to maximize the return on taxpayer investment and achieve the
accountability our mission requires and our soldiers deserve.
Thank you, Madam Chairman.
Senator McCaskill. Thank you, Senator Brown.
Let me introduce the first panel. Jon T. Rymer has served
as the Inspector General for the Federal Deposit Insurance
Corporation (FDIC) since July 2006. He is also the Chairman of
the Audit Committee of the Council of the Inspectors General on
Integrity and Efficiency, which we have been referring to as
CIGIE. Mr. Rymer has served for 30 years in the active and
reserve components of the U.S. Army. Prior to his confirmation
as Inspector General, Mr. Rymer served as a Director at KPMG
LLP.
Richard W. Moore has served as the Tennessee Valley
Authority's (TVA's) Inspector General since May 2003. He is
also the Chairman of the Investigations Committee of the
Council of the Inspectors General on Integrity and Efficiency,
known as CIGIE. Prior to joining TVA, Mr. Moore served as an
assistant U.S. Attorney for the Southern District of Alabama
for 18 years.
It is the custom of this Subcommittee to swear in all
witnesses that appear before us, so if you do not mind, I would
ask you to stand. Do you swear that the testimony that you will
give before this Subcommittee will be the truth, the whole
truth, and nothing but the truth, so help you, God?
Mr. Rymer. I do.
Mr. Moore. I do.
Senator McCaskill. Let the record reflect the witnesses
have answered in the affirmative.
We will be using a timing system today. We would ask that
your oral testimony be no more than 5 minutes, especially since
we have three panels today. Your written testimony will be
printed in the record in its entirety. Mr. Rymer.
TESTIMONY OF THE HON. JON T. RYMER,\1\ INSPECTOR GENERAL,
FEDERAL DEPOSIT INSURANCE CORPORATION, AND CHAIR, AUDIT
COMMITTEE, COUNCIL OF THE INSPECTORS GENERAL ON INTEGRITY AND
EFFICIENCY
Mr. Rymer. Thank you, Chairman McCaskill, Senator Brown. My
name is Jon Rymer. I am the Inspector General of the FDIC. I am
appearing today before you in my capacity as Chair of the CIGIE
Audit Committee.
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\1\ The prepared statement of Mr. Rymer appears in the appendix on
page 45.
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You have asked me to address the recent CIGIE peer
evaluation of SIGAR and specifically SIGAR's conduct of audits.
We thank you for including the peer evaluation report in the
hearing record.
In late February 2010, the CIGIE Chair received a letter
from General Arnold Fields, Special Inspector General for
Afghanistan Reconstruction, requesting a peer evaluation of his
operations. The CIGIE Executive Council was convened to discuss
SIGAR's request and determined that conducting three separate,
yet coordinated, standards-based reviews would provide SIGAR
with the information it was requesting.
I led a team to conduct a peer review of SIGAR's audit
organization, and I will speak on the results of that review in
just a moment. Mr. Moore led a team to conduct a quality
assessment of SIGAR's investigative operations, and he will
discuss the results of that review. Mr. Moore and I jointly led
a team to review the other management support operations not
covered by either of the two peer reviews.
I will focus the remainder of my remarks on the external
peer review of SIGAR's audit organization and SIGAR's request
for a follow-up review.
In the audit community, an external peer review is an
independent, backward-looking review, requiring a peer to
examine and opine on, at least once every 3 years, an audit
organization's system of quality control. A peer review is done
in accordance with CIGIE's Audit Peer Review Guide and is based
upon GAO's Yellow Book standards.
The goal of a peer review is to provide reasonable
assurance that the audit organization has: One, adopted audit
processes that are properly designed to produce accurate and
reliable information and reports, and, two, is following those
processes in conducting its work. A peer review is not designed
to assess the reliability of individual reports.
On July 14th this year, we issued our report on the results
of this review. We concluded that SIGAR's system of quality
controls was suitably designed, but its compliance with its
policies and procedures was inconsistent and incomplete.
We specifically identified five deficiencies in the audit
organization's practices that could generate situations in
which SIGAR would have less than reasonable assurance of
performing and reporting on audits, in conformity with the
Yellow Book and its own policies.
These deficiencies relate to quality assurance, audit
planning, documentation and supervision, reporting, and
independent referencing. We made eight recommendations for
improvement.
We believe the processes we followed, the procedures we
performed, and the deficiencies we identified in SIGAR's audit
organization provide a reasonable basis for a pass with
deficiencies opinion. In its response, SIGAR concurred with the
results of our peer review and committed to implementing
corrective actions to overcome the deficiencies.
Last month, General Fields contacted the CIGIE Chair to
request a follow-up review to address the extent to which his
audit organization had implemented our recommendations. Earlier
this week, my office began a focused, limited-scope review to
do so. This review will not modify the opinion and conclusions
reached in our July 2010 report, nor will it qualify as an
external peer review of SIGAR's audit organization. I have
scheduled a full-scope peer review of SIGAR's audit
organization to commence next October.
At this time I would like to make two concluding comments.
First, SIGAR's request for a peer evaluation was
unprecedented and warranted a unique approach. Despite
competing demands and challenges that our individual offices
faced, we responded in a fair, professional manner, conducted a
thorough review, and provided SIGAR with useful and meaningful
information.
Second, I would like to recognize the professionals who
volunteered to participate in these reviews and the support of
their respective IGs. I would also like to acknowledge the
courtesy and cooperation extended to us by General Fields and
his staff, and to acknowledge the assistance of those who
facilitated our travel to and our work in Afghanistan.
This concludes my testimony. I look forward to answering
your questions. Thank you.
Senator McCaskill. Thank you, Mr. Rymer. Mr. Moore.
TESTIMONY OF THE HON. RICHARD W. MOORE,\1\ INSPECTOR GENERAL,
TENNESSEE VALLEY AUTHORITY, AND CHAIR, INVESTIGATION COMMITTEE,
COUNCIL OF THE INSPECTORS GENERAL ON INTEGRITY AND EFFICIENCY
Mr. Moore. Chairman McCaskill, Senator Brown, good
afternoon. As you mentioned, I am Richard Moore, the Inspector
General at TVA, and I am appearing before you today in my
capacity as the Chair of the Investigations Committee for
CIGIE. My colleague Mr. Rymer has ably laid out how we got here
in terms of these peer reviews, and I will not restate that.
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\1\ The prepared statement of Mr. Moore appears in the appendix on
page 57.
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I would like to make a few comments about the work that we
did, however. The reviews, particularly, for example, the
investigations peer review, was not the work of one IG or one
office. It was a community-wide review. In the case of the
investigations peer review, there were six IGs who
participated--their offices participated, rather, in that
review. For the peer evaluation or Silver Book, as we call it,
there were seven IG offices that participated in that
particular review.
The investigations peer review resulted in a finding that
SIGAR was not in compliance, as you mentioned, with our quality
standards. There are only two possible outcomes in our
investigation peer reviews, and that would be either you are in
compliance or you are not. The determination that SIGAR was not
in compliance with our peer review standards was based on 10
specific findings which were attached to the report, and I will
be happy to discuss that in detail, if you would like later.
As you mentioned, Chairman McCaskill, we were required to
alert the Attorney General of this finding, which I did. The
Attorney General supervises all of the IGs who exercise
statutory law enforcement powers, and it is conditioned--we
exercise those powers based on our compliance with the Attorney
General standards and the CIGIE peer review standards. And as
Mr. Rymer mentioned, there will be an audit follow-on review,
and there will be one on the investigation side as well. I
would reiterate what Mr. Rymer said about the audit review for
the investigation peer review. This is not a new peer review,
and it will not change the finding or decision on the peer
review, that is, noncompliance. This is merely to determine
whether or not there has been remediation of the deficiencies
that we found.
As to the peer evaluation, that Silver Book review, as we
call it, was done pursuant to standards that are called the
Quality Standards for Federal Offices of Inspector General. The
Silver Book sets forth the overall approach for managing,
operating, and conducting the work of the Inspector General.
There are nine categories in the Silver Book that we addressed
with SIGAR, and in the end, the team found 22 different
suggestions or recommendations for improvement of SIGAR.
That concludes my testimony, and I look forward to
answering any questions that you may have.
Senator McCaskill. Thank you, Mr. Moore.
Let me first start by putting on the record how
conservative peer reviews are. And let me just say that every 3
years, as the elected auditor of Missouri, we had a peer
review. And I loaned some of my senior staff to the national
peer review effort that goes on nationwide. So I am very
intimately aware of what a peer review is and what it means.
I also know that auditors by nature are extremely
conservative, and the only time they become even more
conservative is when they are passing judgment on their peers.
How often does an organization, based on all of your
experience in the Council of Inspectors General for Efficiency
in operations, how often does an organization fail its peer
review, especially in light of the failure of SIGAR?
Mr. Rymer. Let me start, ma'am, by saying that the Audit
Committee of CIGIE supervised or administered 58 peer reviews
from 2006 to 2010. Of those 58, 55 were pass, and there were
three pass with deficiencies. So 3 out of 58.
Senator McCaskill. And so we had three pass with
deficiencies. Have there been any that have failed?
Mr. Rymer. Not in that 3-year period, ma'am, that I know
of.
Senator McCaskill. OK. And what about on your end in terms
of the Investigations Standards?
Mr. Moore. On the investigations side, in terms of the
investigation peer reviews, I believe there has been one
noncompliance since we have been conducting peer reviews in
2003.
Senator McCaskill. How many have been done since 2003?
Mr. Moore. Approximately 50.
Senator McCaskill. OK. So one time out of 50, and that
would be this one?
Mr. Moore. Yes--well, no.
Senator McCaskill. One other.
Mr. Moore. One other, other than this, yes.
Senator McCaskill. So this would be the second time since
2003. And could you share with us what the organization was
that had these serious problems, the other organization that
was evaluated?
Mr. Moore. I was not the Chair then. My recollection--and,
Jon, you may recall. I believe it was OPM.
Senator McCaskill. Office of Personnel Management?
Mr. Moore. Yes.
Senator McCaskill. OK. How serious would you all
characterize the failures that you documented in your review of
SIGAR?
Mr. Rymer. Well, I think what you have already pointed out
and established, Senator, is the fact that it is very rare. The
overall deficiencies that we noted, the five deficiencies on
the audit side, were problems of noncompliance. We did
positively note that SIGAR had established a policies and
procedures manual and processes that we thought met the
standards. However, we often found that they were not in
compliance. And in most cases, we found situations where the
compliance levels were in the two-thirds or so. Of the 12
reports we reviewed, we would often find that five, six, seven,
or eight reports would be in compliance, and then three or four
would not be.
Mr. Moore. And I would say on the investigations side, the
seriousness is, of course, if you have special agents in an
investigative component of an IG shop who have not been trained
or confronted with the guidelines that they are required to
adhere to. Use of deadly force and use of confidential
informants, the surveillance techniques, those kind of things
are in the Attorney General's guidelines. You put at risk
investigations that you are conducting, and you potentially put
at risk all the Federal law enforcement simply because of the
reputational damage that can occur if agents are not fully
knowledgeable of the guidelines and adhering to them.
Senator McCaskill. Which obviously could be exacerbated in
a contingency theater where we are fighting a battle, and one
of the battles we are fighting is, in fact, corruption.
Mr. Moore. I believe that is true.
Senator McCaskill. One response that SIGAR had to these
issues is that they were a new organization, and normally
Inspectors General are not given a peer review for 3 years.
Now, I understand that the reason this happened was because
General Fields asked for the review. But is that a valid
response, that the kinds of problems that you found could be
attributable to the fact that they had not been in existence
for 3 full years?
Mr. Rymer. Ma'am, we took that perspective into
consideration. I think it is valuable to note that, as I said
in my statement, this review was unprecedented. No one else had
asked for a peer review at this stage as a de novo IG,
particularly none of the three special IGs that are now in
existence. So I think that was positive. I think we noted that
in terms of how we conducted the review. We were concerned
that, given its fairly short existence, 18 months or so when we
began the review, there would not be sufficient evidence of how
they were performing. So to accommodate that fact, I chose to
do a 100-percent sample of every audit they did, frankly, to
try to give the organization the opportunity to show
improvement.
Senator McCaskill. To give them the benefit of the doubt.
Mr. Rymer. Yes, ma'am, to make sure that if there were
opportunities to show improvement from Audit 1 to Audit 10 or
12, we could demonstrate that. But the results were mixed. We
noted that some audits showed improvement on occasion, and then
other audits did not show improvement.
Senator McCaskill. So you did a 100-percent sample?
Mr. Rymer. Yes, ma'am.
Senator McCaskill. And you do not need to tell me that is
very, very unusual.
Mr. Rymer. Yes, ma'am.
Mr. Moore. On the investigations side, again, as Mr. Rymer
suggested, we have not looked at an organization this early in
their development. We were surprised to see the absence of
policies and procedures and the fact that agents that we
interviewed--and we interviewed agents here in the United
States and in Afghanistan, and they were not conversant with
the guidelines that they had to adhere to or the standards. And
as we reflected in our report, it appeared that there were no
manuals or standards at SIGAR's headquarters that were being
taught to the agents and holding them accountable by when we
went in, but there were block stamp policies at the time that
we conducted the peer review. So it appeared that they were
making good-faith efforts to adopt policies, but they had not
been in existence before April of this year.
Senator McCaskill. OK. Senator Brown.
Senator Brown. Thank you, Madam Chairman.
First of all, thank you very much for your testimony. I am
trying to get my hands around the fact that we have a group
like SIGAR, and while I am appreciative that they said, ``Hey,
can you come in and, audit us and see what is up and report
back--I certainly appreciate.'' But the results in terms of
actual numbers that we have actually expended in terms of
providing them the resources and then the return--I know
Senator Coburn has here the comparison of oversight in
Afghanistan, the funds recovered by other entities, USAID IG,
DOD IG, and SIGAR.
Now if my numbers are correct, we have given approximately
$46.2 million to SIGAR for this mission, yet they have only
identified and collected $8.2 million. I know the value of a
dollar, but that does not seem to be a good value for our
taxpayer dollars.
Do you have any comments as to whether you feel that we are
getting the value for our dollars and/or why do you feel--if
you could get into that. And then also, why do you feel the
recovery is so low compared to these other entities?
Mr. Rymer. I'll start and attempt to answer that, Senator.
The issue of funds put to better use is a direct function of
the audits that the organization chooses to do. One of the
observations we had in the peer review and in the capstone
review was that we were concerned about the process that SIGAR
went through in selecting the initial audits, the first 12 or
so, in our sample. We were concerned that the audits perhaps
were not as focused, and we heard this in some of our
interviews, on either contract oversight, funds put to better
use, or improper payments.
Senator Brown. Well, wasn't that their mission, though,
contract oversight?
Mr. Rymer. Well, I think that would certainly be a large
part of their mission. Let me explain a little bit and put it
in greater context.
We did not really see any audits that were specifically
designed, where the principal objective was to recover funds.
But the IG has a responsibility also to detect and comment on
lapses of internal controls. We saw a few audits directed at
internal controls, or preventive processes. Specifically, I
think we saw three audits that were in my judgment, internal
control-related audits. So of the 12 we looked at, 3 addressed
internal control and the other 9 were audits that, in my view,
were audits examining or looking at either U.S. policy rules
and regulations or at international policy rules and
regulations.
So in that continuum, we suggested--and SIGAR certainly
agreed--that a more risk-based approach to identifying the
audits that SIGAR should be focusing on was something they
should do.
Senator Brown. Yes, but do you think--you have to give them
$46-plus million--I mean, is it the fact that nobody gave them
the proper guidance as to where to go and what to do? Or they
just chose to ignore the guidance and do their own thing in
those areas that you just commented upon? And let me just also
ask, what is your independent professional opinion as to
whether we are actually getting our money's worth out of this
particular group?
Mr. Rymer. Well, Senator, I have to be a bit careful. As a
professional auditor, I have to stick to the scope and approach
of the review, and Senator McCaskill----
Senator Brown. I am asking you your professional auditor
opinion.
Mr. Rymer [continuing]. Will agree to this, but the concern
that I had, as I said, was that the sort of ``tier one''
auditing was not in the original plan. We suggested that it be
in their plan. The other concern I have would be not paying as
much attention in the early stages to the suggestions of the
auditees, of folks that have responsibility for managing the
programs. There was, in my view, a bit of top-down and not
enough bottom-up audit planning. So I think the audit planning
process was one that was not quite balanced and I think needs
improvement.
Senator Brown. And I recognize--certainly I think everybody
does--the difficult operating environment in Afghanistan. I
have been there. I understand it. In your opinion, does SIGAR
have the sufficient resources to overcome that lack of
direction or obstacles or not?
Mr. Moore. Well, Senator, I would say that we looked at
funding for SIGAR because that was raised to us by SIGAR staff,
that there were funding issues early on, and we were
particularly concerned about that on the investigative side,
whether they had the proper funding to put agents in
Afghanistan. We found that they did have appropriate funding
levels.
And I would just say in terms of performance of the
organization, which you have been asking us about here today,
there are at least three things that handicapped the
organization, in my opinion, and we cover this in the report.
One is what we have mentioned before, the lack of risk
assessment. Really what are the risks to the pot of money, if
you will, that you are charge with overseeing? We typically in
IG offices look at what are the likely frauds that are most
likely to occur? What is the likelihood of that happening? And
then we look at the severity if it does. We make heat maps that
give us an indication about where we should put our dollars,
where they would be most effective. That was not done at SIGAR.
The second thing is strategic planning. Everybody, I think,
appreciates the importance of having goals, making sure your
priorities are understood, and, unfortunately, that was not
done very well at SIGAR, at least in the period that we
reviewed.
And, finally, I would say in terms of performance, a
handicap that we saw was the way that human resource issues
were handled--that is, the hiring decisions. As we point out in
the report, there was a decision to wait to hire the head of
investigations, to pursue one particular candidate, and that
cost them almost a year in terms of performance on the
investigative side. They decided not to hire a deputy until
recently. That is another human resource issue that made it
more difficult for them to perform.
Senator Brown. So were the hiring delays, do you think, a
lack of experience or knowledge in what the job at hand was? I
mean, where do you see the breakdown?
Mr. Moore. I would say that it goes back to not having the
kind of focus on risk and the plan. If you are not sure exactly
what the strategic plan is, what your priorities should be, it
can affect the hiring decisions that you make.
Senator Brown. Now, before I turn it back over to the
Chair, I would think out of everything that we have been
talking about here today that the number one priority of every
independent group here is to try--well, obviously, dealing with
Afghanistan specifically now--is to find out how much and where
the monies are going, if they going at all to the Taliban and
other groups that want to basically kill us. I am shocked that
this is not like the number one priority, that we find out
where that money is going and why it is going and who is
delivering the funds, under what circumstances. Where is the
breakdown? I am just flabbergasted as to--and I know that, I am
going to be asking the questions to the next panel, but am I
missing something? I mean, should not that be the priority of
SIGAR and any other entity that is there independently finding
where the waste, fraud, and abuse is? The biggest abuse is the
fact that we are giving money to people that want to kill us,
and they are not entitled to it. It is our money. I mean, I am
sorry, folks. I know I am still semi-new here. We have a few
new members now, but give me a break.
Mr. Rymer. The one thing I would say, Senator, is the
Special IG--to differentiate the Special IGs from the IGs that
are assigned to or work in existing, standing Federal
agencies--should be primarily focused, in my opinion, on
contract oversight and management of dollars. The Special IGs
exist because they are essentially attached to an appropriation
or a series of appropriations, meaning that financial oversight
should be a primary responsibility.
Take the case of my organization, my primary responsibility
as an IG in a regulatory agency is to look for waste, fraud,
and abuse in the programs of a regulator, but it does not give
me the same opportunities to look at situations where
appropriations are managed controls are established, and
contracting dollars are spent.
So I think there is a difference, and I think it speaks to
all three of the Special IGs, that their principal mission
should be, in my view at least, looking at controls associated
with contracting and how cash is being used.
Senator Brown. And just to note, I wholeheartedly agree
with you, so thank you for that independent statement and
assessment, because the taxpayers are being hurt and the
soldiers that are trying to defend us and do their jobs are
being provided with--they have a disadvantage because some of
our own monies are being potentially used to hurt or kill them,
and I find that deeply troubling. So, Madam Chairman, I will
turn it back over.
Senator McCaskill. Thank you, Senator Brown.
In reading your reports, I was struck by how factual and--
which I was not surprised. I knew that these would be very by-
the-book, very factual recitations of compliance and
noncompliance that you found in the Yellow Book and in the
Silver Book. And I think that I just have really one area I
would like to cover with you, and that is the management and
oversight issue.
The head of an audit agency, their responsibility is really
to make the decision about how the resources of that agency are
going to be used. I think you all will both agree that General
Fields was never expected to do these audits or to do these
investigations. Is that correct?
Mr. Moore. That is correct.
Mr. Rymer. That is correct.
Senator McCaskill. But, rather, his entire responsibility
of taking over in this position was to look at what was flowing
into Afghanistan and figure out where there was a risk. That
was his most important job: First, the risk assessment; and,
second, the audit plan that would address the risks that were
assessed within the scope of the work that he had the legal
ability to audit or investigate. Would that be correct?
Mr. Rymer. That is correct. Yes, ma'am.
Mr. Moore. Yes.
Senator McCaskill. All right. Now put, in this context that
we have been informed by major problems in Iraq. I mean, my
frustration with General Fields and his position is that, as a
former auditor, his job--it was like shooting fish in a barrel.
There was so much work to be done as an auditor. I mean,
everywhere you looked there was a contract that needed another
set of eyes. There was a flow of money that needed
investigation. There is potential for corruption, waste, misuse
of money in almost every single location this money was
flowing. I mean, this is a free-for-all in terms of risk
assessment.
But yet in the first 16 months of his tenure, there was not
one audit performed on one contract. Is that correct?
Mr. Rymer. Yes, ma'am, I believe that is correct.
Senator McCaskill. That is hard for me to get around.
Mr. Rymer. Ma'am, there were assessments of internal
controls.
Senator McCaskill. Right.
Mr. Rymer. Specifically a contract audit? I do not recall a
contract audit.
Senator McCaskill. There was assessment of controls, and
there was also a study done on the participation of women in
the Afghan election. And I do not mean to minimize--the
participation of women in the Afghan election is an important
policy problem, and it is an important part of the overall
mission in Afghanistan because we want--obviously, the
capabilities of that country in terms of keeping the Taliban at
bay includes a healthy participation in a democracy.
With all due respect, either one of you in your experience
as auditors, would that study--would that have made your risk
assessment if you had been given this job in the first 18
months?
Mr. Rymer. The Afghan election? As I said, for a Special
IG, I think the focus should be on the dollars. That should be
the principal responsibility of any of the three Special IGs we
have.
Senator McCaskill. Mr. Moore.
Mr. Moore. I would agree, and I would just point out that,
in addition to doing the risk assessment as to the pot of
money, if you will, one of the things that we discussed with
SIGAR staff and pointed out in our report was you have to do
that internal office risk assessment so that you know what your
limitations are, what your skill sets are, what your resources
are, what your priorities are, what is likely to limit you from
getting the mission accomplished. That was not done at SIGAR.
Senator McCaskill. Right. That is all the questions I have
for this panel.
Senator Brown. I am all set, too.
Senator McCaskill. Thank you both very much for your
service, and CIGIE is a very, very important part of oversight
in this government. It is unfortunate that most Americans have
no idea that many, many professional Inspectors General in the
Federal system give of their time in overseeing other
Inspectors General in the system. But I certainly understand
that we would not have the quality of Inspectors General that
we have in the Federal Government were it not for the work of
CIGIE. So thank you, and please convey our thanks to your
entire organization that does these peer reviews.
Mr. Rymer. Thank you, ma'am.
Mr. Moore. Thank you. [Pause.]
Senator McCaskill. General Fields, welcome. Thank you for
your attendance today. Let me introduce you to the hearing.
General Fields has served as Special Inspector General for
Afghanistan Reconstruction since July 2008. General Fields
previously served as Deputy Director of the Africa Center for
Strategic Studies at the Department of Defense and is a member
of the U.S. Department of State (DoS) assigned to the U.S.
embassy in Iraq, where he performed duties as the Chief of
Staff of the Iraq Reconstruction and Management Office (IRMO).
He retired as a Major General from the United States Marine
Corps in January 2004 after 34 years of active military
service.
Let me state for the record how much your record speaks of
you as an American, as a patriot, and how much our country owes
you a debt of gratitude for your many years of service on
behalf of the United States of America.
It is the custom of this Subcommittee to swear in all
witnesses that appear before us, so if you do not mind, I would
like you to stand. Do you swear that the testimony that you
will give before this Subcommittee will be the truth, the whole
truth, and nothing but the truth, so help you God?
General Fields. I do.
Senator McCaskill. We welcome your testimony, General
Fields.
TESTIMONY OF THE HON. ARNOLD FIELDS,\1\ SPECIAL INSPECTOR
GENERAL FOR AFGHANISTAN RECONSTRUCTION
General Fields. Thank you, Chairman McCaskill and Ranking
Member Senator Brown. I appreciate this opportunity to be here
today. I would say it is a pleasure, but I would be telling a
lie if I were to say so. But it is a privilege as well as an
opportunity, and I wish to take full advantage of that
opportunity.
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\1\ The prepared statement of Mr. Fields appears in the appendix on
page 64.
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I have worked in support of SIGAR for the past basically
year and a half. Funding we received in June 2009 fully funded
this organization. I have built SIGAR from nothing to 123 very
well informed and talented staff, of which 32 to date are
assigned for 13 months to a very dangerous place known as
Afghanistan.
This work is challenging. I have to find people who are
willing to put their lives in harm's way in Afghanistan
conducting this work in the midst of a very competitive market
of investigators and auditors. I am proud of the staff that we
have.
We have conducted work in 22 of 34 provinces in Afghanistan
and 48 separate locations. We have produced 34 audits, over 100
recommendations, 90 percent of which have been accepted by the
institutions of this Federal Government that we have
scrutinized. They are using our work. I could cite many cases,
but I will not at this point. But our work is, in fact, making
a difference.
I did--and I appreciate that the Chairwoman acknowledged
that I requested the CIGIE assessment. We would not normally
have undergone such a thing until--the earliest would have been
2012. I wanted to make this organization what Senator McCaskill
would wish that it be, and that assessment for which I
individually and unilaterally made requests was intended to do
just that.
My leadership has been referred to as ``inept.'' That is
the first time, Senator, that in all my life, a man of 64 years
of age, who has supported this Federal Government for 41
straight years, of which 34 have been as a military officer. I
do not even allow my own auditors to refer to the people in
Afghanistan as ``inept'' because it is too general a statement
for any human being. I have met with many people in
Afghanistan, from the President of Afghanistan to the little
children in the province of Ghor. And when I ask those little
children what is it on which this reconstruction effort and $56
billion that the United States has invested in Afghanistan
should be based, and I want you to know that those children,
who were no higher than my knee, said to me the same things
that President Karzai said as well as his ministers. They want
energy or electricity or light. They want agriculture. They
want education. And what really broke my heart is when those
little children told me that, ``What we really want is a floor
in our school.'' That is what we are up against in Afghanistan.
We have created by way of this $56 billion an opportunity
for the children in Afghanistan, who I feel represent the
future of Afghanistan, as well as the rest of the people. And I
would be the last, Senator McCaskill and Senator Brown, to
condone in any form or fashion any activity that leads to less
than the full measure of that $56 billion being used for the
purposes for which it was made available.
I want this Subcommittee to also note that I take this work
very seriously. Why? Because I was raised up in South Carolina
in a family not unlike that in Afghanistan, where the level of
education for both my mother and father was less than fifth
grade. But, nonetheless, the best training that I received in
my life came from my mother who had less than a fifth grade
education. I wish that someone had brought $56 billion to bear
upon my life. But here I am in a very important position and
trying to influence what is going on in Afghanistan to the best
of my ability, using a very knowledgeable and competent staff
by which to do so.
I raised up hard, ladies and gentlemen, in poverty myself.
I worked for less than $1.50 a day, about what the average
Afghan makes today in the year 2010. On the day President
Kennedy was buried, which was a no-school day for me, my
brother and I shoveled stuff out of a local farmer's septic
tank with a shovel for 75 cents per hour for the two of us. I
know what it is to live in poverty, and I know what it is to
have an opportunity, and my country has given me that, and by
which I am pleased and very grateful.
I will do my best, Senator McCaskill and Senator Brown, to
measure up to your full expectations. I appreciate the emphasis
that you have placed on contracting in Afghanistan, but I want
also to say that the legislation that I am carrying out has
three dimensions. Contracts is not the exclusive one, but I
will agree with you that is where the money is, and we should
focus more on that. But I am also tasked to look at the
programs as well as the operations that support this tremendous
reconstruction effort. And I promise you, Senators, that I will
do so. Thank you.
Senator McCaskill. Thank you, General Fields.
General Fields, I certainly respect your life story and
what you have accomplished, and no one--I can speak, I think,
confidently for Senator Brown and every other U.S. Senator. No
one questions your commitment to the United States of America.
That is not the question here. The question here is whether or
not the important work of the Inspector General in Afghanistan
has been fulfilled and completed, especially within the time
frames that we are working with because of the contingency
operation.
You submitted 12 pages of written testimony for this
hearing. Less than one page of those 12 addressed the serious
deficiencies found in your peer review by other Inspectors
General trying to measure the work of your audit agency against
the standards that are required in the Federal Government. You
did say in your testimony that the findings have helped you
strengthen your organization and that you have now made
changes.
Let me talk about the law that you are operating under. The
law that you are operating under, I am sure you are aware,
requires a comprehensive audit plan. Are you aware of that,
General Fields, that the law requires a comprehensive audit
plan?
General Fields. Yes, I am.
Senator McCaskill. And when did you begin work on a
comprehensive audit plan?
General Fields. We began work on a comprehensive work plan,
Senator, when I published the very first quarterly report which
contained how we planned to proceed with this very new
organization and oversight entity. In that report delivered to
this Congress on the--I am sorry. In that report delivered to
this Congress at the end of October 2008, I laid out in general
what we would pursue, and I am pleased to say that at the top
of that list is, in fact, contracting. That was followed up
with the hiring of Mr. John Brummet as my principal auditor,
someone who----
Senator McCaskill. And when did that hire occur?
General Fields. That hiring actually occurred the first
week of January 2009. That is when Mr. Brummet actually
reported aboard. But we commenced the process of bringing him
aboard, of course, much earlier than that. And then we----
Senator McCaskill. And you had been at the agency how long
when he actually joined the agency?
General Fields. I had been at the agency----
Senator McCaskill. Since July 2008, correct?
General Fields. That is when I was sworn in, yes, ma'am.
Senator McCaskill. Now, in the audit plan that the law
requires--and I am sure that--I hope the first thing you did
was to look at Public Law 110-181 and look at the statutory
requirements of your job. That plan that was required lays out
that it must be consistent with the requirements of Section
842, subsection (h), which are the audit requirements that the
Congress placed on SIGAR. Are you familiar with the audit
requirements in subsection (h), General?
General Fields. In general, yes, I am.
Senator McCaskill. Could you tell us what those
requirements are?
General Fields. That we would conduct thorough audits of
the spending associated with our contribution to reconstruction
in Afghanistan.
Senator McCaskill. I am not trying to play ``gotcha'' here,
General, but there are seven requirements in Section (h), and I
am going to lay them out for the record, and after I do each
one, I would like you to tell me if that has been completed
and, if so, when.
General Fields. Yes, ma'am.
Senator McCaskill. The first one is--these are the things
at a minimum you are required to examine as Special Inspector
General. The first one is the manner in which contract
requirements were developed and contracts or task and delivery
orders were awarded. Has that been done by SIGAR? Have you
examined contract requirements in Afghanistan and contracts or
task and delivery orders, how they were awarded? Has you agency
done that at this date?
General Fields. We have conducted several contract audits.
Each of those audits has addressed matters associated with how
contracts came about.
Senator McCaskill. How many contract audits have you
completed?
General Fields. We have completed about four contract
audits.
Senator McCaskill. And how long--you have done four
contract audits, but isn't it true that all of those have
occurred essentially in the last 12 months?
General Fields. That is correct.
Senator McCaskill. Number two, the manner in which the
Federal agency exercised control over the performance of
contractors. Have you done that audit work?
General Fields. We have examined in each of our audits the
extent to which controls have been in place to guard against
waste, fraud, and abuse of the American taxpayer's dollar. In
so doing, yes, ma'am, we have looked at those matters as they
related to contracts specifically in those areas in which we
have conducted focused contract audits of specific initiatives
for which funding is being available.
Senator McCaskill. All right. So the first requirement
dealt with contract requirements and task and delivery orders.
The second requirement, the manner of control over contractors
of the Federal Government.
Number three, the extent to which operational field
commanders were able to coordinate or direct the performance of
contractors in the area of combat operations. Has that work
been done?
General Fields. Senator, the very first audit that we
conducted was a contract being supervised by CSTC-A, which is
responsible for the oversight of training and equipping the
Afghanistan security forces. That contract is worth $404
million to the American taxpayer.
Senator McCaskill. And how many audits have you done that
address the oversight of contractors by field commanders?
General Fields. Forty percent, Senator, of our audits have
either been direct audits or focused contract audits or
contract-related audits.
Senator McCaskill. I thought you said you had done four
audits on contracts.
General Fields. I said four audits because I was
referencing four focused contract audits, which were of multi-
million-dollar infrastructure initiatives specifically
associated with the stand-up of the Afghanistan security
forces. But I am also saying we have audits that addressed
contracts in general that relate to the stand-up of the
Afghanistan security forces and other initiatives in
Afghanistan.
Senator McCaskill. Number four, the degree to which
contractor employees were properly screened, selected, trained,
and equipped for the functions to be performed. Is there a
report that you could point me to where I could get reassurance
that we are doing adequate selection, training, equipping, and
screening of contract personnel in Afghanistan?
General Fields. Senator, the very first audit, once again,
that we published, the $404 million contract, we found in that
audit the supervision of that particular contract was
inadequate whereby the actual entity, the expert in contract
was really living in Maryland and not physically located on a
permanent basis in Afghanistan.
Senator McCaskill. How many contracts are operational in
Afghanistan right now?
General Fields. I do not know, Senator.
Senator McCaskill. Can you give me a ballpark?
General Fields. I know that there are, based on our most
recent audit, between 2007 and 2009 of all contracts for which
we could find information at that point in time 6,900
contracts, among which I am confident are a number of the type
that you just mentioned.
Senator McCaskill. OK. So I have asked several questions.
In each one you referred to the same audit of one contract. So
of the six thousand--what did you say the number was?
General Fields. 6,900, Senator.
Senator McCaskill. So we have almost 7,000 active
operational contracts, and there have been four audits
completed of those contracts?
General Fields. The 6,900 is a roll-up of contracts in
general regarding Afghanistan between the years 2007 and 2009.
How many of those might be defined as operational contracts, I
do not know.
Senator McCaskill. But you do not have any reason to
believe that has gone down, do you?
General Fields. No, ma'am, I do not.
Senator McCaskill. In fact, it has probably gone up.
General Fields. Absolutely.
Senator McCaskill. Absolutely. All right. The next one, the
nature and extent of any incidents of misconduct or unlawful
activity by contractor employees. How many audits have you done
that would reassure the American people that you have, in fact,
looked for, found, or are confident there is no unlawful
activity by contractor employees?
General Fields. Senator, I would say that in each of the 34
audits that we have conducted, those matters have been of
concern. But each of those 34 audits may not necessarily have
been directly related to a contract.
Senator McCaskill. How many findings have you issued
dealing with misconduct or unlawful activity by contractor
employees? How many findings in these audits?
General Fields. I do not think that we have identified
misconduct per se. We have identified issues that we have given
to our investigators for further follow-up. And I can
specifically----
Senator McCaskill. I am sorry. Excuse me.
General Fields. Well, I am sorry, Senator.
Senator McCaskill. That is OK. Go ahead.
General Fields. I can specifically tell you of a specific
audit that we have conducted which started out as a general
audit of the Kabul Power Plant, an item worth $300 million to
the American taxpayer. And during the course of that audit, we
found anomalies that we felt were investigatory in nature, so
we tailored and shortened the scope of our audit, and the rest
of those matters were turned over to our investigators, and
they are still being pursued.
Senator McCaskill. The remaining two requirements in terms
of audits that must be performed: The nature and extent of any
activity by contractor employees that was inconsistent with the
objections of operational field commanders. And, finally,
number seven, the extent to which any incidents of misconduct
or unlawful activity were reported, documented, investigated,
and prosecuted.
To what extent have you been able to produce a report as to
how much unlawful activity has actually been investigated and
prosecuted?
General Fields. I do not have an answer for that question
at this time, but I will assure the Senator that, as we conduct
our audit work and as we conduct our investigations work, all
of those matters are, in fact, taken into consideration.
Senator McCaskill. Thank you, General.
Senator Brown.
Senator Brown. Thank you, Madam Chairman.
General thank you once again. I mirror Senator McCaskill's
kind words about your service. As someone who is still serving,
I greatly appreciate that service. And I noted in your
testimony how you had great concern for the Afghan children and
the needs of the people in Afghanistan, and I understand that.
I also have, however, great concern about our soldiers, the men
and women that are fighting, and also the taxpayers who are
providing that $56 billion. It does not grow on trees.
And that being said, I know you have been in the position
since July 2008, and the last panel that you heard noted
serious deficiencies, management deficiencies during their
review.
Now that you have held the office for over 2 years, what
major course corrections are you currently taking to rectify
these serious deficiencies?
General Fields. Thank you, Senator. July 2008, that was the
month during which I was privileged to be sworn into this
position, but funding for SIGAR did not really come until much
later. That is why I pointed out that we did not receive full
funding for this organization until June 2009.
Senator Brown. So noted, and that is a good point. Thank
you.
General Fields. Thank you, Senator. But in reference to
course corrections, one of the reasons I asked for the CIGIE to
come in early, about 2 years in advance of the time which it
normally would have as we anticipated, was to help me set the
course correctly for this organization. And I am using the
results of both the audit, the investigations, and the so-
called capstone review of SIGAR to help chart the course. So I
have put in place as of September 30 of this year the
recommendations and are implementing the suggestions made by
the review team.
Senator Brown. And how have you done that? What
specifically as to--the biggest thing where I think Senator
McCaskill and I are concerned about, which is the money. I know
you have done some good reports and investigations on other
things that you have commented on, which is policy issues
relating to the ability for the Afghan people to, live and
grow. But in terms of the things that many taxpayers right now
are concerned about is the dollars. They are growing weary.
They want to know where their money is going. What actions,
based on the recommendations, do you have in place?
General Fields. Thank you, Senator. I am a taxpayer as
well, so I have as much interest, if not more in my particular
case, as the individual American taxpayer. We are doing a
better job of risk assessment. We found that to be a weakness
to which earlier attention in a much more pointed way should
have been turned. So we are improving the means by which we
determine where it is that we should focus our effort.
Senator Brown. And where is that leading you now?
General Fields. Well, it is leading us to a greater focus
on contracts, because that is, in fact, where the money is. But
as the initial questioning by Madam Chairman, we have to also
address the front end of this reconstruction effort. To what
extent are the policies being put in place by those who are
implementing this $56 billion?
Senator Brown. I understand that and I respect that
approach. But right now, now that you have kind of been put on
notice by everybody that, we understand the policies and all
that stuff, but what specifically are you doing now based on
the recommendations that you have been given? What are you
specifically doing so I can tell the people back home in
Massachusetts and all of our viewers--I do not know how many
there are, but all the viewers we have--where are you focusing?
Give me some specific examples so I can advocate and say, hey,
he is kind of learning--he is learning and growing, he has
taken a spot, he has the funding after a year of being sworn
in. He has now been given an independent requested audit. So
give me some specific examples as to what you--I do not want to
beat a dead horse here, but I need to know where exactly you
are focusing. Are you focusing, for example, on how the heck
Taliban is allegedly getting money from us taxpayers? Are you
focusing on that? Are you focusing on the bribes and payoffs?
Are you focusing on the fact that the Afghan army is not--after
the $6-plus billion we have spent, is still not up and running.
I mean, where are you focusing exactly?
General Fields. Sir, we are focusing on several broad
areas, but at the top of that list happens to be contracting.
Senator Brown. What specifically in contracting? What area
are you doing? Are you looking at bridges, roads, power? What
are you doing specifically? I know contracting is so big. We
heard we have 7,000 contracts or more.
General Fields. Yes, sir.
Senator Brown. Give me an area. Have you actually initiated
some investigations already?
General Fields. Sir, we have 89 investigations ongoing as
we speak.
Senator Brown. And where are they being focused?
General Fields. They are focused on fraud and theft.
Senator Brown. And based on that, what types of things are
you investigating? What examples could you give to me and the
American taxpayers of what you are seeing? What made you go to
that particular area versus another area?
General Fields. Because that is where we feel that the
vulnerability is for the American taxpayer's dollar.
Senator Brown. Based on what? Some tip-off? Some prior
types of contracts? I mean, why did you specifically want to go
for that area?
General Fields. Based on all of the above, sir.
Senator Brown. OK. Can you share your thoughts about how we
can strategically deal with this very complex challenge that
you stated in your testimony about your concern in the role and
cost of private security contractors, specifically as it
relates to fueling corruption and financing insurgents, as I
said, or strengthening criminal networks? What tangible actions
are required to try to defer this corruption? What can you tell
me about that?
General Fields. Sir, I believe that the fight against
corruption must take place on several levels and many
dimensions, the first of which is that we need to give
consideration to what it is that we are doing in support of the
reconstruction effort and the government of Afghanistan. We are
conducting a reconstruction effort in three broad areas:
Security, governance, and development. And each of those we
feel needs to be addressed.
We are devoting and have devoted $29 billion to security in
Afghanistan itself, the stand-up of the Afghan security forces,
the police and the army. We have devoted $16 billion to
governance and development, and therein lies the vulnerability
of the American taxpayer's dollar.
So we are pursuing audits and investigations that will help
mitigate the potential for the American taxpayer dollar to be
wasted, frauded, or abused.
Senator Brown. I know you are getting $46 million to
complete your mission. That is a lot of money. And I noted here
on the chart that Senator Coburn referenced, you have basically
identified in terms of fraud, waste, and abuse of about $8
million. So 46 you have been given, $8 million in the time
frame. Can you tell me why there has not been more of kind of a
collection on that fraud, waste, and abuse up to this point?
General Fields. Sir, a contributing factor is the slow
start that this organization had in standing up, a part of
which I am inclined to attribute to the lack of funding----
Senator Brown. Listen, I am going to give you that one
because that is something that I would note. You are sworn in,
you get the funding, you get the funding, you got to get it up,
you got to get it running. So let us just take in the last 9
months, for example, have you had any success that you want to
share with us?
General Fields. I feel that we have had some successes. We
have----
Senator Brown. Hard-dollar success?
General Fields. Hard dollars, $6 million that we have
reported in our most recent report. We have an ongoing forensic
audit of $37 billion looking at over 73,000 transactions from
which we intend to be vectored towards crime or potential
crime. And we are moving in that direction, so we are using
forensics as a means by which to fairly quickly identify the
vulnerabilities, and then we are structuring audits and our
investigations accordingly.
Senator Brown. One final, and then I will turn it back. In
your latest SIGAR quarterly report, on page 6, it mentions that
Afghan private security contractor--I think it is Watan Risk
Management--has been suspended and debarred after it was found
funneling large sums of money to insurgents.
Now, I have met with General Petraeus on many occasions
concerning our Afghan policy, and I agree with him that we must
be better buyers and buy from better people.
What oversight actions are you taking through your audits
and investigations to prioritize General Petraeus' directive
that those funds will be given to better people and not to our
enemies?
General Fields. Well, first, I applaud General Petraeus and
the initiatives that he has taken to address this issue of
corruption. The stand-up of Task Force 2010 is one of those
very significant initiatives. We are working very closely with
Task Force 2010. We are also working with the International
Contract Corruption Task Force in order to harness the
investigatory initiatives of the Federal agencies so that we
can bring our wherewithal very quickly to bear upon finding
folks who are bilking the American taxpayer out of money.
Senator Brown. OK. Thank you, Madam Chairman. Thank you,
General.
Senator McCaskill. General Fields, in your testimony to me
a few minutes ago, you referred to the CSTC-A audit. The CSTC-A
audit, the first audit you did.
General Fields. Yes, ma'am.
Senator McCaskill. Is that correct? That was the first
audit?
General Fields. That is correct.
Senator McCaskill. And do you recall how long that audit
was, how many pages?
General Fields. I do not recall how many pages, but I am
pretty sure it was not a very large audit, Senator.
Senator McCaskill. Does 12 pages sound right?
General Fields. That may be about right, the summary of
that audit, yes, ma'am.
Senator McCaskill. And how many pages in that audit
actually contained the audit work?
General Fields. I would have to review that audit because
it----
Senator McCaskill. Would four pages sound correct?
General Fields. Maybe, Senator.
Senator McCaskill. OK. And the other audit you referred to
in the previous testimony was the audit on the Kabul Power
Plant?
General Fields. That is correct.
Senator McCaskill. And had not a very similar audit been
done by USAID exactly 1 year prior to the time that you did
that audit?
General Fields. That is correct.
Senator McCaskill. And let us talk about the funding of
your agency. USAID did a very similar audit to the one that you
did 1 year prior on the Kabul Power Plant. Do you know what the
funding for USAID has been in terms of their Inspector General
work in Afghanistan over the last--I do not know how many--5, 6
years? Do you know what their total funding has been?
General Fields. Funding for USAID in terms of its
operations in Afghanistan? I do not know.
Senator McCaskill. $10 million. And do you see what they
have recovered for a $10 million taxpayer investment? $149
million. And you have received $46 million. Is that correct,
General?
General Fields. $46.2 million, to be exact, Senator.
Senator McCaskill. And you all have recovered $8.2 million?
General Fields. At this point in time, yes.
Senator McCaskill. Can you understand as an auditor, as I
look at those numbers, it is very hard for me to reconcile the
notion that a lack of funding has been your problem?
General Fields. Senator, the recoveries that we have thus
far experienced are small, but the full measure of the outcome
of audits and investigations that are underway are--that full
measure has not thus far been determined, and our forthcoming
numbers will be much larger than the numbers that we submitted
to the CIGIE in their roll-up of work that the Federal IG
community in general, had done for 2009.
Senator McCaskill. Let us talk about contracting. One of
the things that is very important is how audit agencies
contract because your job is to oversee contracts. And your job
is to determine if there are contracts that are not needed, or
could be put to better use. Out of the $46 million that you
have received, how much money are you spending to Deloitte &
Touche just to prepare your reports for Congress?
General Fields. That contract, Senator, started out at $3.7
million at a time when we had a paucity of people to do the
very specific type of work for which we have contracted
Deloitte & Touche to help us. The intent of that arrangement
was to facilitate the gaps in our own personnel and the skill
sets that were needed at that point in time. And over a period
of time, we would commensurately reduce that contract as we
were able to bring that particular level of talent aboard in
SIGAR.
Senator McCaskill. OK.
General Fields. And we are doing that, Senator.
Senator McCaskill. All right. You spent $3.7 million in the
base year on Deloitte & Touche and $2.7 million this year for
Deloitte & Touche, and their only function is to produce
reports to Congress, correct?
General Fields. Deloitte provides also assistance to us in
database management. That is one aspect of it. But they
principally assist SIGAR in putting together the reports that
we do submit to Congress, which is a very detailed report, a
very important report, and we feel that the extent to which we
have gone to ensure that the report is put together correctly
and is presentable to this Congress is commensurate with the
money that we have invested in Deloitte & Touche to do so.
Senator McCaskill. So just because I want to clarify this,
because I will tell you, candidly, I do not want to lay out my
fellow Members of Congress here, but an investment of that kind
of money in a report to Congress when there is the kind of
audit work that needs to be done, and when you are using the
lack of funding as one of the rationales because of why more
audit work has not been done and why it has taken so long for
audits to really be performed or produced in a manner
commensurate with the size of your agency, let us compare here.
The contract total to Deloitte & Touche is $6.6 million, and
the total amount of funding to AID IG is $10 million in
Afghanistan. And for that $10 million, we got $149 million
back. Meanwhile, with the $6.6 million to Deloitte & Touche,
all we have is a shiny report and pretty pictures for Members
of Congress, most of which will never see it.
Do you understand why that causes one pause about whether
or not that is a strong leadership decision, General Fields?
General Fields. Senator, we have been told by Members of
this very Congress that they appreciate the report that we
provide for them. Similarly, the Federal community elsewhere
have told us that they appreciate the detail and the
correctness of the reports that we produce.
Senator McCaskill. And let us talk about the contract with
Joseph Schmitz. Now, you have an audit, and it is completed,
your peer review, and it is not good. And, in fact, for only
the second time in 50 peer reviews you have been recommended to
lose your law enforcement capability in an arena where
desperately needed law enforcement capability is absolutely
essential. You have had this audit, and after the audit is
done, you hire someone, it is my understanding, to help you
monitor compliance with the audit recommendations. Is that a
fair characterization of what your contract with Joseph Schmitz
was supposed to represent?
General Fields. That is a fairly fair characterization,
Senator. But we hired this independent monitor commensurate
with a plan of action and milestones that I put in place in
response to the results of the CIGIE in order to move SIGAR
quickly along to putting in place the corrective action that
had been identified for us. I set that date at September 30 of
this year, and we are a better organization because we had this
external agency to come in and provide us this particular
expertise during that period.
Senator McCaskill. And this was a no-bid contract.
General Fields. It was a sole-source contract for which we
made a request.
Senator McCaskill. That is a no-bid contract, sole-source.
Correct.
General Fields. That is correct?
Senator McCaskill. OK. And what you said is you needed the
immediate establishment of an independent monitor to
independently validate and verify agency actions and compliance
in response to issues contained in the CIGIE letter of July 15,
2010, to the Attorney General of the United States. Is that
correct?
General Fields. Senator, we wanted to----
Senator McCaskill. That is the document that--the
information in the document for the justification and approval
of a no-bid contract.
General Fields. Senator, we wanted to quickly correct the
areas of concern pointed out by the peer evaluation. We did not
wish to lose or put in jeopardy any further the authorities for
criminal investigations that had been provided to me by way of
the Department of Justice. And we felt that this entity would
provide that independent look at us, and we felt that would
help mitigate any concerns that this Congress and the overseers
of SIGAR on Capitol Hill might have as well as to reassure
anyone else who might be interested in the outcome of that peer
evaluation.
Senator McCaskill. Well, isn't CIGIE back doing an
independent review of whether or not you have complied with the
audit now?
General Fields. Please repeat the question, Senator.
Senator McCaskill. Isn't CIGIE looking now to see if you
have complied with the audit? Aren't they the independent body
you are looking for in terms of seeing if you have, in fact,
corrected the deficiencies?
General Fields. CIGIE is now looking at the audit piece,
but the investigation piece has yet to get underway. But,
nonetheless, I have made requests that they come back in.
Senator McCaskill. OK. And so Army Contracting Command who
awarded the contract on behalf of SIGAR said this contract was
sole-source because there was only one person, Mr. Schmitz, who
was available and qualified. Did you reach out to any other
retired IGs if you were going to hire someone else to come in
and tell you whether or not you were complying with the audit?
General Fields. Not at that time, Senator.
Senator McCaskill. Did you ask for suggestions from Mr.
Rymer or, more importantly, Mr. Moore?
General Fields. No, we did not.
Senator McCaskill. And did you talk to them about using Mr.
Schmitz?
General Fields. Did I what?
Senator McCaskill. Did you talk to Mr. Moore and his team,
the group of independent peer review auditors that looked at
your process and quality control in criminal investigations,
did you discuss Mr. Schmitz with them, about hiring Mr.
Schmitz?
General Fields. No, I did not.
Senator McCaskill. All right.
General Fields. Someone may have done so on my behalf, but
I did not personally.
Senator McCaskill. When my staff spoke with your staff in
September, your staff said they had expected Mr. Schmitz would
be entering into a subcontract with Louis Freeh, the former
Director of the FBI, who also works with Mr. Schmitz, on the
independent monitor team for DaimlerChrysler. Or Daimler now, I
guess. SIGAR officials stated they believed that Mr. Freeh
would ``be intimately involved'' in the outreach to Attorney
General Holder. Was that your understanding?
General Fields. That is not necessarily my understanding,
and I cannot account for what folks may have communicated to
your staff or to anyone else. My intent, Senator, was to bring
aboard an independent entity to provide the oversight of the
plan of action that we were putting in place to move this
effort quickly along so that we could come into compliance with
the Department of Justice (DOJ) requirements.
Senator McCaskill. Did you expect that Mr. Freeh was going
to be working on this contract, General Fields?
General Fields. I did at the onset, yes, ma'am. I had
confidence----
Senator McCaskill. And what was Mr. Freeh's function as it
related to what you expected him to do? A reach-out to General
Holder?
General Fields. No, ma'am. I did not expect anyone to reach
out per se. I expected the oversight being provided by this
entity to help SIGAR and the Inspector General correct the
issues that had been pointed out.
Senator McCaskill. Well, your staff said to us that Mr.
Freeh would be intimately involved in an outreach to General
Holder. You understand what this looks like, don't you?
General Fields. I would ask that the Senator explain what
you are referring to.
Senator McCaskill. It looks like that you all went out and
found somebody who could get to Louis Freeh, who could get to
Attorney General Holder, and make sure you did not lose your
ability to exercise law enforcement functions. It looked like
you were trying to hire someone to help influence the Attorney
General of the United States as opposed to fixing the problem
and then having the same independent audit group come back and
certify that you had fixed the problem.
General Fields. Senator, I as Inspector General had
confidence in Mr. Freeh because he is a former Director of the
FBI, because he is a former judge, and because, as I learned
along the way, Mr. Schmitz was associated with his firm, and in
which I had confidence because of Mr. Freeh's contribution
already to this government and also Mr. Schmitz's contribution
to the government in a role that I was playing at that time.
That was my line of thinking. It had nothing to do, Senator,
with any other potential influence in reference to the Attorney
General. I wanted to correct the issues that had been pointed
out to me by the peer evaluation, and that was my only
objective.
Senator McCaskill. It is my understanding that Mr. Moore's
team--this contract was worth $100,000, correct, to Mr.
Schmitz? He got a hundred grand?
General Fields. No, Senator. The contract was worth
$95,000.
Senator McCaskill. Excuse me. The contract was worth
$96,095. And how many days did Mr. Schmitz work on this for
$96,095?
General Fields. He was with SIGAR for approximately 2
months.
Senator McCaskill. So 60 days and he got $96,095.
General Fields. That is correct, and----
Senator McCaskill. About $45,000 a month.
General Fields. Senator, we followed the rules in engaging
in this contract. We utilized the Contract Center of Excellence
in Washington that many other entities use, and the $95,000 was
the fair market value for the specific work that we were
requesting that this----
Senator McCaskill. With all due respect, General, I got to
tell you the truth. You are supposed to be finding ways to save
the American taxpayers' dollars, and, please, I do not think it
is a good idea to say that it was fair market value to pay
somebody $46,095 a month to try to fix a problem in your
investigations unit to the satisfaction of the Attorney
General. Isn't it true that Mr. Moore is going to complete the
work in just a few days and it is not going to cost anything in
terms of determining whether or not you now have the proper
procedures in place to do law enforcement work as the Special
Inspector General of Afghanistan?
General Fields. Senator, I believe that the decision that I
made at that point in time was a good decision. I did not
anticipate all of the scrutiny that this particular initiative
has received since that decision. Had I had an opportunity to
do it all over again, I probably would have made a different
decision.
Senator McCaskill. That is good news. General. Senator
Brown.
Senator Brown. Thank you. I just have a couple of
questions.
In fiscal year 2011, General, you are slated to get $16.2
billion. If approved, how will that money be tracked and how
will it be measured? And what expected return on the investment
would you expect the taxpayer to get?
General Fields. Senator, we would expect that the full
measure of the $16.2 billion, which is primarily designed for
training and equipping of the Afghanistan security forces, we
expect that the full measure of the taxpayers' investment in
terms of a return will be achieved. To that end, we have asked
for additional funding for SIGAR so that we can increase the
numbers in our staff so that we can provide the coverage and
oversight necessary to ensure the American taxpayer that the
money is completely used for the purposes for which made
available.
Senator Brown. So when you say ``full measure,'' what does
that mean exactly in laymen's terms, ``full measure''?
General Fields. Well----
Senator Brown. I know there is some military in there. I
get it. So just tell--when you say you expect to get the ``full
measure,'' what does that mean exactly?
General Fields. Well, ``full measure'' means, sir, that the
$16.2 billion was requested for specific initiatives associated
with the stand-up of the Afghanistan security forces. So the
full measure means that $16.2 billion would be exclusively used
for that purpose without waste, fraud, and abuse. That is what
I am referring to, Senator.
Senator Brown. I see there is 25--if I am reading this
correctly--well, how much are you going to spend in personnel
compensation? Do you have any idea?
General Fields. Personnel compensation, not unlike the rest
of the Federal community, is high, and our personnel
compensation is, I believe, commensurate with my SIGIR
counterpart. Our staff who work in Afghanistan by way of a
compensation package approved by this Congress receives 70
percent in addition to their regular pay for danger pay and
location pay. We have to pay that, Senator. SIGAR is an
independent agency. I must pay as we go for everything that we
receive, personnel and otherwise. The cost is very high, but we
are also a temporary organization, Senator, so when we bring
people aboard, they know that. And we bring people aboard for
13 months. It is not like a standing and statutory Federal
agency and the Inspectors General thereof.
We are also competing in a market where 70 other Inspectors
General in this city are looking for auditors and
investigators, and we have to compete in that regard with their
compensation in order to bring aboard the level of talent that
we need.
I wish it were cheaper, Senator. I certainly do.
Senator Brown. So, General, let me just finish with this.
Then I am going to move on, either to turn it back or we are
going to go on to the next panel. You know where I would like
you to focus? I just want you to follow the money. I just want
you to find out where the money is going and zero in on the
Taliban issue, why and how they are getting any of our monies,
number one. I want to know if there are any bribes and payoffs
and criminal activity going on where the money should not be
going. If there are people that are doing it, then, what are we
going to do to stop it and plug that leak? I understand--but
not for you telling me, I would have overlooked the fact that
you got appointed and then there was a transitional period. So
I get that. But now that you have done all the--women in
elections and all the policy stuff and you have focused there,
I think the message from me and Senator McCaskill and the folks
that did your independent audit--and I commend you for reaching
out and doing that. Either it was a CYA situation or you
seriously wanted to actually get there and get some guidance,
because maybe it was new or maybe there was not any guidance.
But they have given you the guidance. I think we are giving you
some guidance. Please protect our money. Find a way to bring
that number up so that we can feel confident that the millions
we are giving you, we are getting millions in return. At least
make it a wash. That is my only message.
I have nothing further. Thank you.
Senator McCaskill. Let me clean up a couple of things. I do
not have a lot of other questions. But, in fact, Louis Freeh
never was engaged or declined to participate in any way in this
contract. Correct, General Fields?
General Fields. That is correct, Senator, as far as I know.
What assistance Mr. Freeh may have given Mr. Schmitz of which I
am not aware, then I am not able to comment on that, Senator.
Senator McCaskill. And I have not gone into any of the
issues surrounding Mr. Schmitz in his previous tenure at the
Department of Defense. But were you aware at the time that you
hired him that there had been some controversy concerning his
previous tenure as a Department of Defense Inspector General?
General Fields. Senator, I was completely unaware of any--
--
Senator McCaskill. But that would have been a vet that you
might have done, maybe just a basic Google search for his name
that would have revealed that there was, in fact, some
questions that were asked, so you would have had a chance to
ask him before you hired him and be clear that there were not
any problems associated with him?
General Fields. Senator, our initial initiative really was
to engage the Louis Freeh group of which Mr. Schmitz, to our
understanding, was a part.
Senator McCaskill. So now you have said that the reason for
hiring him was to get to Louis Freeh, to engage Louis Freeh.
General Fields. Not necessarily, Senator. The reason for
hiring any of these entities was to help bring the talent and
expertise that we needed at that point in time to address the
issues in SIGAR, and we----
Senator McCaskill. You just said--I said, ``Why didn't you
vet him,'' and you said, ``Because we were hiring him to get to
Louis Freeh.'' You just said that in your testimony. We can
read it back.
General Fields. No, Senator, I did not say that I was
hiring anybody to get to Louis Freeh.
Senator McCaskill. OK. Then let us start again. Why did you
not vet Mr. Schmitz before you hired him?
General Fields. I personally had no cause to do so.
Senator McCaskill. OK.
General Fields. And these matters, Senator, were being
handled by way of my contracting officer and by way of the CCE.
Senator McCaskill. So----
General Fields. I did not have any reason to doubt the
integrity and so forth of Mr. Schmitz, and as I understand it,
the issues of which he may have been accused during his tenure
as Inspector General--and this is information I have found out
subsequent to the Senator having raised questions about my
decision in hiring this particular contractor. But as I
understand it, the issues that were brought up concerning Mr.
Schmitz were not corroborated in the final analysis.
Senator McCaskill. You understand that the reason that this
even has come up about Mr. Schmitz is in preparation for this
hearing, we did basic investigatory work that SIGAR should be
doing. And when we did basic investigatory work, we found that
Senator Grassley had a lot of questions about Mr. Schmitz when
he was Inspector General at DOD. And I am not saying whether
Senator Grassley was right or wrong. I am saying it is very
troubling that you would not be aware of those questions before
paying someone the amount of $450,000 a year to do work for the
Federal Government, General Fields. That is what I am getting
at, that this--an audit agency is careful about who they hire
and whether or not there is any appearance or problem. And I am
not saying there is a problem, but the fact that you did not
even know that there might be one is what I am trying to bring
to your attention.
Did Mr. Schmitz ever go to Afghanistan?
General Fields. Not under the contract involving SIGAR, to
my knowledge. There was----
Senator McCaskill. So the pay for him that you claim is
market value, the $45,000 a month, did not involve any high
risk on Mr. Schmitz's part, other than calling Louis Freeh's
office?
General Fields. Potentially--correct, as far as I know,
Senator.
Senator McCaskill. All right.
General Fields. But let me also say, Senator, begging the
Senator's pardon, that Mr. Schmitz is registered to contract
with the government of the United States as far as I
understand.
Senator McCaskill. I understand, General, but I think the
point I am trying to make here is your job is to oversee
contracting. Your job is to set the gold standard on
contracting. So you do a sole-source contract, no bid; you
immediately hire someone. Clearly there was not even a vet done
that brought to your attention that there were questions you
need to ask him about his previous service as an Inspector
General. That is the point I am making, General Fields. That is
the point I am making.
Have you ever done or worked with an audit agency before
you were given this job? Had you ever done any audit work or
been around any auditors before you were given this job?
General Fields. Yes, Senator, I have been.
Senator McCaskill. OK. Tell me in what capacity you had
worked with auditors prior to taking this job.
General Fields. I worked with auditors in conjunction with
my support to the Iraq Management and Reconstruction Office
(IRMO). This was indirect work associated with reconstruction
and support of Iraq.
Senator McCaskill. And what audit agencies did you work
with, General?
General Fields. I did not specifically work with an audit
agency per se, but as the Chief of Staff of IRMO, my work
covered multiple dimensions of reconstruction in Iraq. Prior to
that, Senator, I served as the Inspector General for United
States Central Command. I did that work for 2 years, and that
work involved some degree of oversight involving audit-type
work, but not necessarily the professional auditors by which
SIGAR is currently characterized.
Senator McCaskill. Right. And, in fact, this is something
that the public is not aware of, that there is a vast
difference between Inspectors General within the active
military and Inspectors General within the Federal Government.
Correct, General Fields?
General Fields. I would say that is correct.
Senator McCaskill. Inspectors General in the active
military report to the commander and are there as the eyes and
ears of the commander. They have no duty whatsoever to report
to the public or to the Congress or to perform an independent
function in terms of monitoring taxpayer dollars. Correct?
General Fields. Those Inspectors General are guided by the
basic intent, no less, of the Inspector General Act of 1978 by
which I and other Federal Inspectors General are guided as
well, Senator.
Senator McCaskill. Well, I understand. I was just shocked
when I went to Iraq on my first contract oversight trip, and I
am sitting with Inspectors General, and I did not realize we
had two varieties that were vastly different in the Federal
Government. In fact, I wish they were not called the same
thing. I wanted to rename the military Inspectors General
another name, and then the military informed me they had the
name first. So it got a little tricky. But these are not the
same functions, and they do not do the same work.
I guess the reason I ask this question, General, is, the
first thing you do if you head an audit agency is to figure out
where the risk is and do a risk assessment and do a tier
analysis as to what tier is the top tier of work that you
should do where the highest risk is. Then you go down and then
you do your audit plan determining how much resources you have
and how you can get to the most risk.
General Fields. Yes, Senator.
Senator McCaskill. At what point in time was a risk
assessment completed at SIGAR?
General Fields. I will go back, Senator, to what I said
earlier. We conducted a risk assessment which was published in
our 2008 report to Congress. That risk assessment was made up
of several elements. It may not look like a risk assessment as
the Senator might----
Senator McCaskill. It is not a Yellow Book risk assessment,
is it, General Fields?
General Fields. Say again, Senator?
Senator McCaskill. It is not a Yellow Book risk assessment.
General Fields. It would not be a Yellow Book assessment
per se, but it would certainly contain the elements relevant to
any risk assessment when it comes to oversight of money.
Senator McCaskill. Did the auditors working for you at that
time tell you that was sufficient in terms of a Yellow Book
risk assessment?
General Fields. I had no auditors at that time, Senator,
because we completed that assessment in conjunction with our
October report to Congress before I was privileged to hire my
first auditor.
Senator McCaskill. So you are saying that you performed
what you would consider a professional risk assessment of a
major responsibility in terms of audit function without any
auditors?
General Fields. I performed that assessment, Senator, with
intelligent folks, and I feel that--this is not--I do not feel
that this is necessarily rocket science in order to determine
what needs to be done, Senator.
Senator McCaskill. Well, I got to tell you the truth. Once
again, I do not mean to be cruel. I do not mean to--this is not
fun for me either. It is very uncomfortable to say that I do
not think that you are the right person for this job, General
Fields. But I do not think you are the right person for this
job---- [Interruption by protester.]
Please, no. That is very inappropriate. Please leave the
room. Please.
The risk assessment, the reason that you had the findings
from peer review was because you fell short of the professional
standards that are demanded in the world of auditing. And I am
not saying the people that worked for you were not intelligent.
I am not saying you are not intelligent. I am not saying that
you are not a hero, sir. I am saying this is too important a
government function to not have the very highest level of
experience, qualifications, and expertise leading this kind of
audit agency.
I have no other questions for you. We will keep this record
open. If there is anything that I have said in this hearing
that you believe is unfair, if there is any information that
you want to bring to our attention, we will keep the record of
the hearing open. And I can assure you I will look at all of it
with the eye of an auditor and examine it and make sure that
our final record in this hearing is fair and balanced. And we
are happy to include anything else that you would like to
include, and I thank you very much for all of your service to
America.
Senator Brown. Madam Chairman, if I may----
Senator McCaskill. Oh, I am sorry.
Senator Brown. Thank you, General. I want to thank you for
your service as well, and I appreciate your forthright answers.
Thank you.
Senator McCaskill. Thank you, sir.
General Fields. Thank you, Senators.
Senator McCaskill. And we will now take the third panel.
Thank you all for being here. Let me introduce this panel.
Gordon Heddell has served as the Inspector General for the
Department of Defense since July 2009. He was Acting Inspector
General from 2008 to 2009. Prior to joining the DOD IG, Mr.
Heddell served as the Inspector General for the Department of
Labor (DOL).
Harold Geisel has served as the Deputy Inspector General
for the State Department since June 2008. He has more than 25
years of experience with the State Department and previously
served as the Acting Inspector General in 1994.
Michael G. Carroll has served as the Deputy Inspector
General for the U.S. Agency for International Development,
USAID, since February 2006. Mr. Carroll is a member of the
Senior Executive Service with more than 26 years of government
service. Prior to his appointment, Mr. Carroll served as the
Director of Administration for the Bureau of Industry and
Security in the Department of Commerce.
Stuart Bowen--and I understand you are not feeling well
today, Mr. Bowen. Thank you for arriving and try not to breathe
on Mr. Carroll. [Laughter.]
Mr. Bowen has served as Special Inspector General for Iraq
Reconstruction since October 2004. Mr. Bowen served President
George W. Bush as Deputy Assistant to the President, Deputy
Staff Secretary, Special Assistant to the President, and
Associate Counsel. Mr. Bowen also spent 4 years on active duty
as an intelligence officer in the U.S. Air Force, achieving the
rank of captain.
Thank you all for your service to our government, and
obviously this is a four-person panel and it is our third
panel. I will stay here all night. You know this is what I
enjoy; this is the stuff I enjoy. But I do not want to prolong
the hearing for any of you any longer than necessary. So feel
free to make any testimony you would like as long as it is less
than 5 minutes. If you want to do less than that, that is fine.
If you want to just stand for questions, that is fine, too. But
I am anxious to hear from all of you. Mr. Heddell.
TESTIMONY OF THE HON. GORDON S. HEDDELL,\1\ INSPECTOR GENERAL
U.S. DEPARTMENT OF DEFENSE
Mr. Heddell. Thank you, Chairman McCaskill, Ranking Member
Brown, and distinguished Members of this Subcommittee. Thank
you for the opportunity to appear before you this afternoon to
discuss our oversight efforts in Afghanistan and throughout the
region.
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\1\ The prepared statement of Mr. Heddell appears in the appendix
on page 151.
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Effective, meaningful, and timely oversight of U.S.
contingency operations in Southwest Asia is critical to our
success in Afghanistan. I would like to focus on one of the
fundamental reasons behind our success: The effective and
efficient coordination of the audit, inspection, and
investigative assets of the many agencies in the region. This
cooperation has not only maximized our ability to complete our
mission, but has reduced the amount of impact our presence has
had on the commands in theater to complete their mission. Due
to the complexity of contingency operations and the involvement
of multiple Federal agencies, interagency coordination is
essential to identifying whether critical gaps exist in
oversight efforts and recommending actions to address those
gaps.
I appointed Mickey McDermott as the Special Deputy
Inspector General for Southwest Asia in November 2009. His role
is to ensure effective coordination within the Defense and
Federal oversight community. Mr. McDermott reports directly to
me and coordinates and de-conflicts oversight efforts within
Southwest Asia. He is forward-deployed on a 2-year assignment
and over the past year has worked with the oversight community,
Department of Defense leadership, and the supporting commands
to improve communications and identify oversight requirements.
Mr. McDermott also serves as the chairperson of the
Southwest Asia Joint Planning Group, which develops the
Comprehensive Oversight Plan for Southwest Asia. The Joint
Planning Group is developing a comprehensive strategy for the
oversight of the training, equipping, and mentoring of the
Afghanistan National Security Forces and has plans to develop a
comprehensive strategy for the oversight of contingency
contracting in Afghanistan. In May 2009, the Joint Planning
Group established a sub-group to coordinate audit and
inspection work in Afghanistan and Pakistan.
In addition to the Joint Planning Group, we participate in
the U.S. Forces-Afghanistan oversight Shura. This forum
provides another opportunity for each of the oversight
community in-country representatives to update the supporting
commands on the status of their current and planned projects.
We also collaborate on criminal investigations in Afghanistan.
The Defense Criminal Investigative Service maintains a close
working relationship with the International Contract Corruption
Task Force and is a member of the Task Force 2010. We have
learned from our experiences in Iraq that maintaining an in-
theater presence is essential to providing effective oversight
in an overseas contingency environment.
Additionally, one of the most important lessons we have
learned is the value of having the Special Deputy Inspector
General as our single point of contact in the region for
coordinating oversight efforts and to ensure effective
communication with senior leaders in the theater. This is key
for minimizing the impact on the daily operation of the
activities we visit, and it provides those activities a single
point of contact.
Another important lesson learned is that contracting in a
contingency environment presents many challenges. In May 2010,
we summarized our experiences in the report--and I have it
here--titled ``Contingency Contracting: A Framework for
Reform.'' This report identifies key systemic contingency
contracting issues as well as actions that need to be taken to
correct these issues for future contracting. By compiling this
data and summarizing our findings, we were able to provide a
useful tool for operators on the ground to improve their
operations by avoiding past mistakes.
In closing, I would like to thank the Subcommittee for the
opportunity to discuss our work in Afghanistan, and I look
forward to continuing our strong working relationship with the
Congress, the Department, and with all oversight agencies in
Southwest Asia. Thank you.
Senator McCaskill. Mr. Geisel.
TESTIMONY OF THE HON. HAROLD W. GEISEL,\1\ DEPUTY INSPECTOR
GENERAL U.S. DEPARTMENT OF STATE
Mr. Geisel. Thank you, Chairman McCaskill and Ranking
Member Brown, for the opportunity to appear today. I have
prepared remarks but ask that my written testimony also be made
part of the record.
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\1\ The prepared statement of Mr. Geisel appears in the appendix on
page 168.
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Our oversight role in Afghanistan includes performing
audits, evaluations, inspections, and investigations with
respect to activities that are funded and managed by the
Department of State. These funded and managed programs include
activities such as worldwide protective services for diplomats,
embassy security, counternarcotics, and police training
programs, as well as construction and maintenance of U.S.
embassies.
Our Middle East Regional Office (MERO), has an office in
Kabul with boots on the ground to provide quick and timely
evaluations of high-risk, high-dollar programs. In addition,
our Office of Investigations provides on-the-ground
investigative support in Afghanistan. And our Offices of Audits
and Inspections also perform work there.
We have provided the Subcommittee with a list of audits,
evaluations, and inspections related to Department of State
operations in Afghanistan that have been issued by our office
since 2004. We have used congressional resource increases since
2009 in both supplemental and the appropriations base to
greatly increase the number of completed and planned audits,
evaluations, and inspections in Afghanistan during 2009 and
2010. Approximately 25 percent of our ongoing or planned
oversight for the Middle East and South Asia regions, which
include 33 countries, will take place in or are otherwise
related to Afghanistan.
Madam Chairman, coordination occurs at several levels
within the oversight community to reinforce the efficiency of
oversight efforts. In Washington, D.C., coordination occurs
first through the Southwest Asia Planning Group, which meets
quarterly to plan ongoing activities to ensure minimum
duplication of oversight and maximum cooperation. There is also
a separate sub-group, the AFPAK Working Group, which meets to
address oversight work in Pakistan and Afghanistan. This
working group is where IG coordination, deconfliction, and
agreement occur. OIG personnel from the Department of State,
USAID, DOD, Government Accountability Office (GAO), and SIGAR
are members of the AFPAK group.
Informal coordination regarding oversight work in
Afghanistan and elsewhere in the region also takes place
between these same organizations as well as other OIGs. These
groups will continue to play a vital role and serve as a model
for new and flexible groups formed in response to future
contingency operations, regardless of where they occur in the
world.
In Afghanistan, there are additional coordination groups.
The IG Shura is facilitated in-country by U.S. Forces-
Afghanistan and the DOD OIG. Participants meet monthly and
include representatives from all OIG offices working in
Afghanistan.
Madam Chairman, Senator Brown, the novel concept of
creating a permanent Inspector General--because that was one of
the questions we were asked in advance--to oversee contingency
operations merits serious consideration. However, existing
departmental OIGs have proven their ability to work well
together and with the Special IGs over the past 2 years to
provide effective, coordinated oversight in contingency
operations. They have existing processes, organizational
structures, and institutional knowledge of the programs within
their departments that facilitate efficient oversight of those
programs and eliminate the learning curve that would be
required of a contingency IG.
Moreover, in an era of fiscal restraint, creating a
permanent IG to oversee contingency operations might not be
prudent. Millions of start-up dollars would be required to
establish and sustain a new bureaucracy.
Current organizations already in existence, such as the
Southwest Asia Joint Planning Group and the International
Contract Corruption Task Force, could be used for interagency
coordination or as models for the fast creation of other
coordination groups for new contingencies around the world as
the need arises. These groups have the means, methodology, and
practices in place to facilitate efficient, cost-effective
oversight and through planning, coordination, and
deconfliction.
Once again, I thank you, Chairman McCaskill and Senator
Brown, for the opportunity to appear today, and I am ready to
answer any questions.
Senator McCaskill. Thank you, Mr. Geisel. Mr. Carroll.
TESTIMONY OF MICHAEL G. CARROLL,\1\ DEPUTY INSPECTOR GENERAL,
U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT
Mr. Carroll. Thank you, Chairwoman McCaskill, Senator
Brown. Thanks for having me here today to brief the
Subcommittee on our oversight activities in Afghanistan, our
working relationship with SIGAR, and, finally, to share our
views on the feasibility of a Special IG for contingency
operations.
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\1\ The prepared statement of Mr. Carroll appears in the appendix
on page 180.
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I want to start by saying that from its inception almost 30
years ago, the USAID IG has operated in an overseas environment
with foreign service auditors, investigators, and management
analysts, providing audit and investigative coverage of USAID's
programs. And we think that gives us a unique comparative
advantage in providing oversight in contingency operations.
Our oversight in Afghanistan has really evolved over the
past--well, since we had ``boots on the ground'' in November
2002. We started out covering it as a country in a regional
portfolio out of our office in the Philippines, and it has
morphed into what will soon be the largest country office that
we have of our eight overseas offices with 14 auditors and
investigators.
On relationship with the SIGAR, Special IG for Afghan
Reconstruction, I would have to draw a distinction between
audit and investigations as I describe that relationship. On
the audit side, I would characterize the relationship as
cooperative and productive. It has taken some time to get to
that point because obviously we have duplicative authorities,
and we have the authority to look at the same programs. So it
has taken some time, it has taken some effort, but I can say
now that through planning and deconfliction, we are not going
to have any overlap in audits.
I cannot characterize the relationship with the SIGAR
investigations in the same way. We seem to not be able to come
to terms with jurisdictions. Again, they have law enforcement
jurisdiction over AID programs. So do we. But we feel that as
the statutory IG for AID we should have primary law enforcement
jurisdiction over any allegations of corruption in AID programs
or against AID employees, and we should lead any investigation
that has to do with AID programs and employees. And we are
still trying to work through that relationship with the SIGAR
folks on the investigation side.
Also, if I could just share our views, as Mr. Geisel did,
about the practicality or the feasibility of a statutory IG for
contingency operations. I cannot imagine an entity that has a
better comparative advantage than the statutory IGs for doing
oversight work. And when you talk about contingency operations,
I think we would all agree that the two best examples of that
over the past 10 years are Iraq and Afghanistan. And you have
before you today the three statutory IGs for the Department of
Defense, Department of State, and AID. And I think that with
our collective experience, our in-depth knowledge and
understanding of our agency's programs, people, systems,
policies, I think that, properly funded, with the same
authorities that the special IGs have for personnel, working
closely with the Government Accountability Office, I think we
can, as a collective group, provide the same comprehensive
oversight and reporting that a statutory IG for contingency
operations could.
I thank you for your time and look forward to any questions
you might have.
Senator McCaskill. Thank you, Mr. Carroll. Mr. Bowen.
TESTIMONY OF THE HON. STUART W. BOWEN,\1\ JR., SPECIAL
INSPECTOR GENERAL FOR IRAQ RECONSTRUCTION
Mr. Bowen. Thank you, Chairman McCaskill, for this
opportunity to appear before your Subcommittee and testify on
the critical issue of oversight in contingency operations. It
is an issue that has been acutely with us for the last 8 years
in Iraq, and indeed, almost exactly 7 years ago, the Congress
created my office, the Special Inspector General for Iraq
Reconstruction, because of weakness regarding oversight by the
departmental IGs then in Iraq and the significant waste that
occurred.
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\1\ The prepared statement of Mr. Bowen appears in the appendix on
page 192.
---------------------------------------------------------------------------
To carry out this mission, I focused my organization on
four critical operational principles.
First, real-time auditing. We get our audits out quickly,
averaging six a quarter, and that is essential in a war zone
because the operators need to get answers fast. If you wait the
typical 9 to 15 months for an audit, the world has completely
changed. It is not a useful audit.
Second, in-country engagement. We have been as high as 50.
We are at 22 now. That is the largest single contingent of
oversight operators in-country in Iraq, and it is
investigators, it is auditors, it is inspectors, it is
evaluators, and that has given us the capacity, the special
capacity with our focused mission, to be highly productive.
Third, unprecedented transparency. We operate I think
fairly uniquely as an IG in that we meet every week with the
subject of our oversight to inform them of what we are doing,
the progress we are making, and what we are finding to promote
improvement in the overall reconstruction program as the
consultative component. That is the fourth mandate that I give
my auditors and inspectors: Be consultative.
Just a week ago, I was in Iraq at Camp Victory, meeting
with General Austin, the commander of U.S. Forces-Iraq, on a
critical SIGIR audit that is going to produce really tough
findings in January. But he needed to know about those findings
today because they affect an enormous contractor. That is the
kind of work we are able to do by being heavily engaged on the
ground with leadership.
We have produced 27 quarterly reports and five Lessons
Learned reports. They help strengthen performance, and they
have been focused on accounting for taxpayer dollars, the
dollars appropriated to four major funds which comprise about
$46 billion of the money.
The question that you have asked me to address particularly
is: Does a Special Inspector General for Overseas Contingency
Operations (SIGOCO), make sense? And differing from my fellow
panel members, I say yes, absolutely, because of several
reasons: First, the cross-cutting jurisdiction. I have a CAC
card and a State badge. I can go to any door of any department
with any funds, and a lot of these projects and programs are
multi-funded from different sources--police training--for
example, and I can get answers from any Department, and I do
not have to operate in a stovepipe.
Second, a singularly focused mission. I have a staff that
is focused on one thing: Protecting taxpayer interest and
improving mission performance in a contingency. That allows for
aggressive oversight and gets you quick reporting.
We have focused on coordination. We have talked about that
a lot today. Well, the Iraq Inspectors General Council was
something I formed within a couple of months of starting up 7
years ago, and we met every quarter, and now this quarter we
are going to fold it into the Southwest Asia program. But it
has facilitated really strong interaction with my fellow
Inspector General auditors here at the table, in Iraq, and on
this side of the world.
Next, flexibility in hiring practices. We have unique
authority, and thus we have been able to maintain high-quality
staff throughout the life of our organization. We are highly
independent, and we report quarterly to the Congress, not
semiannually. So you get comprehensive, detailed analyses, and
factual data about what is going on in Iraq every 3 months.
A permanent Special IG would eliminate the inherent
challenges that arise in starting up a Special IG in a
contingency. Oversight has to be present there from the
beginning. You know you would have that if you had a SIGOCO in
existence. You would not need to have a departmental IG
formulate and draw out of their own resources a capacity to
deploy and execute that kind of oversight. SIGOCO would ensure
it.
A feasible SIGOCO standing operation could have a core
staff of 25 and cost about $5 million a year. If such an
organization had existed, say, at the beginning of the Iraq
reconstruction program, the amount of waste it would have
averted would pay for it for our lifetimes. There is no doubt
that it would be cost-effective. Indeed, the return on
investment in cost for SIGAR has been about 5:1.
There will be other contingency operations no doubt. That
is a new phase in modern national security reality, and we will
have significant contingency relief and reconstruction
operations. How do we avoid the kind of waste that we have seen
in Iraq and Afghanistan--significant, unacceptable,
ridiculously high levels of waste--in the future? One way would
be, as we have heard at the table, to provide more funds to the
departmental IGs to allow them to hire more auditors and
inspectors. But to ensure that you would have a capacity that
is capable and ready to deploy, SIGOCO is a good answer.
Thank you, Madam Chairman. I look forward to your
questions.
Senator McCaskill. Thank you all. Let me start. How many
people do you have on the ground in Afghanistan right now, Mr.
Heddell.
Mr. Heddell. Right now I have 15 auditors, 8 criminal
investigators, 2 administrative staff, and in addition to that,
I complement that with expeditionary forces that enter and exit
on a regular basis. That is just in Afghanistan.
Senator McCaskill. OK. And, Mr. Geisel, how about you in
Afghanistan?
Mr. Geisel. We have five auditors and analysts in Kabul,
and that will increase to eight by January. Our investigators
are always on a TDY status, and I think at the moment we have
two investigators actually in-country.
Senator McCaskill. OK. Mr. Carroll.
Mr. Carroll. Well, we have nine auditors, and hopefully
very shortly we will have five investigators.
Senator McCaskill. And what do you have currently in Iraq,
Mr. Bowen.
Mr. Bowen. I was there just last week, and with 18
personnel, there were 10 auditors, 3 investigators, 3
evaluators, and a chief of staff, and support staff.
Senator McCaskill. And what was the high point, high mark
in Iraq in terms of how many auditors you had on ground?
Mr. Bowen. Total number of auditors? Not inspectors, just
auditors?
Senator McCaskill. Just auditors.
Mr. Bowen. We were up to 29.
Senator McCaskill. Twenty-nine. How many times have the
four of you been in the same room with General Fields?
Mr. Geisel. I reckon at least five times.
Senator McCaskill. No, I mean all four of you together with
General Fields. Have you ever been in the room with all four of
you and General Fields at the same time?
Mr. Geisel. No.
Mr. Heddell. Well, I think there may be times at the
monthly CIGIE meetings.
Mr. Bowen. Yes.
Mr. Heddell. And General Fields frequently attended those.
Senator McCaskill. OK. But I am not talking about at the
CIGIE meeting, and, of course, the CIGIE meeting is a meeting
where all the Inspectors General come together, I do not want
to say it is like your Rotary Club, but it is your association
where you come and network and talk to one another, and
obviously that is the pool of people which the peer reviews
come out of, correct?
Mr. Heddell. Yes.
Mr. Bowen. Yes.
Senator McCaskill. I am talking about how many times have
the four of you sat down with General Fields and talked about
contingency operation audits, writ large?
Mr. Bowen. Not as a group, but frequently individually.
Senator McCaskill. OK.
Mr. Heddell. Senator McCaskill, if I could add to that,
however, I think the point you are getting at is how much we
talk to each other, share information, and assess risk. And
that is one of the reasons that the Department of Defense
Inspector General created a Special Deputy Inspector General
who also chairs the Joint Planning Group where all of our
offices are represented.
Senator McCaskill. Right.
Mr. Heddell. In fact, almost 25 agencies are represented.
So that does happen. It is just not the same personalities that
are sitting----
Senator McCaskill. I understand. I am not implying by the
fact that the five of you have not been in the same room
together that your agencies are not talking to one another and
not trying to coordinate.
How many independent contractors have you hired relating to
the work in Afghanistan or relating to reports or anything that
you need to produce for Congress? Can anyone think of any
independent contractors that you have hired?
Mr. Carroll. As part our audit work, we hire both ourselves
and we help the agency hire independent financial audit firms
to conduct financial audits in Afghanistan. And also, since it
is difficult for us to get out to do our field work in some of
the more dangerous places, we have also hired local audit firms
to go out and do site visits for us on performance audits.
Senator McCaskill. OK. What about you, Mr. Bowen? When you
prepare your--yours is not a pamphlet. Yours is a book on
lessons learned, which I am a little embarrassed I have
committed to memory. Was an independent contractor hired for
that effort?
Mr. Bowen. For ``Hard Lessons,'' no. This was done by
government staff and printed by GPO.
Senator McCaskill. This is awkward because I do not want
you all to comment on General Fields. I do not want to put you
in what is an awkward position for a professional auditor. But
I have a lot of concern that someone would think it was
appropriate to do a risk assessment and call it a risk
assessment without an auditor on staff. Does that cause you
concern, Mr. Heddell?
Mr. Heddell. Without an auditor on staff?
Senator McCaskill. Correct
Mr. Heddell. Yes, it would cause me concern.
Senator McCaskill. Does it cause you concern, Mr. Geisel?
Mr. Geisel. Definitely.
Senator McCaskill. Mr. Carroll.
Mr. Carroll. Yes.
Senator McCaskill. Mr. Bowen.
Mr. Bowen. Yes.
Senator McCaskill. I am curious. Has there been a sense
that the leadership of SIGAR was not up to the professional
standards that are required for this kind of very difficult and
very important audit work? Are we the only ones that have an
oversight capacity here? Do you all as auditors that are in a
unique position to know whether or not the agency is standing
up in a way that would reflect Yellow Book standards or
Silver--and let me say for the record, the Yellow Book--I keep
saying ``Yellow Book.'' For the record, I should explain that
the Yellow Book is called that because it is yellow, but it is
the book of standards for government auditors. And the Silver
Book is the book of standards for government investigators.
If you are working with another agency--and I do not know
what the ethics are here, candidly. If you are working with
another audit agency and you have a sense that professional the
District are not being complied with, do you have a duty to
report it to anyone?
Mr. Geisel. I am allegedly the diplomat here, so I will try
and answer. [Laughter.]
The simple answer is yes. Let me give you two examples
where it worked very well. We did a joint audit with the DOD IG
on one of the most important facets of our presence in
Afghanistan, and that is police training. That activity was
carried out--well, it was funded under State Department
authority, and it is going over to DOD. And our joint audit
found a lot of problems, and frankly----
Senator McCaskill. Was it your audit that figured out they
were not sighting the rifles?
Mr. Geisel. Yes, as a matter of fact. That was another
audit, but that was our evaluation.
Senator McCaskill. Go ahead. I am sorry to interrupt. I was
just curious.
Mr. Geisel. That is right.
Senator McCaskill. Good work, by the way. That is fairly
important that we hire someone who train the police who knows
how to sight the rifles.
Mr. Geisel. Yes. It is also important when we found that
the dogs that were supposed to sniff for explosives were not
trained to sniff the right explosives. But in our work with the
DOD IG, there were slight differences of opinion, but we worked
them out immediately. And I can tell you, without exception,
there was mutual respect. I knew some of the DOD auditors, and
I thought the world of them.
Senator McCaskill. Well, I guess what I am asking is: If
you work with an audit agency where you do not think
professional standards are being met, do you----
Mr. Geisel. I would pull out. Pure and simple. I would not
hesitate. I would try to do it nicely, but I would just say,
``We seem to have different objectives and perhaps different
standards, and we cannot work together.'' I would do that in a
heartbeat.
Senator McCaskill. Anybody else?
Mr. Carroll. Well, I would say that as SIGAR was standing
up--and I think that--I cannot think of a case actually where
we worked together with them on an audit. We have worked
together with them on some investigations, and they have
assisted us on some investigations. But we never worked with
them together on an audit like State and DOD IG did on the
police training. So we may have missed the boat there, but we
were completely laser-focused on our work and not necessarily
focused on what was happening at SIGAR.
Mr. Heddell. Senator McCaskill, to correct the record, the
Department of Defense Inspector General's office to my
knowledge has never worked with SIGAR on an audit.
Senator McCaskill. OK.
Mr. Heddell. We have worked with SIGAR in law enforcement
task forces, however.
Senator McCaskill. OK. Before I turn it over to Senator
Brown, do you have a comment on that?
Mr. Bowen. Yes, we work very closely with a variety of
permanent Inspectors General and other law enforcement agencies
on investigations, and we have done joint audits as well.
Senator McCaskill. With SIGAR?
Mr. Bowen. No. With State.
Senator McCaskill. Have you ever done any work with SIGAR?
Mr. Bowen. No. Our jurisdictions do not overlap.
Senator McCaskill. I understand. I just wanted to be sure.
Mr. Bowen. Other than--I mean, no audit work. We were very
closely supportive of them in their first year in their stand-
up, as evidenced in my submission.
Senator McCaskill. Senator Brown.
Senator Brown. Thank you, Madam Chairman. I just have a
couple of questions. I know we may be voting in a minute.
As you heard from my previous line of questioning, I am
greatly concerned, as I know the Chairwoman is, on the
allegation that there is money going to the insurgents, the
Taliban in particular. What roles do you collectively have in
helping to determine whether, in fact, that is the case and how
we can stop it, identify it, who is responsible? That whole
line of questioning, if you could just maybe--whomever, one or
both or all.
Mr. Heddell. Senator Brown, one of our primary
responsibilities and concerns is not just simply money. It is
the life and safety of our men and women in Afghanistan who are
doing the fighting for us. So we look at things much broader
than money. The money is extremely important, but, for
instance, a tremendous amount of our work is focused on the
train and equip mission of the Afghan national army and the
police and determining what the success is that we are having
with weapons accountability, for instance.
Senator Brown. Yes, weapons, everything. I should not have
said just money, but everything. The whole thing.
Mr. Heddell. Yes, and that is something we do focus on. Are
weapons getting to where they are supposed to go? Are they
being put into the hands of the people that we want them to be
placed in?
We did a tremendous amount of work in Iraq in that respect.
We are continuing to increase our focus in Afghanistan on those
kinds of areas. So we are concerned about the money, and we are
concerned about the amount of money, the remaining $14.2
billion, for instance, that is going to go into Afghan national
army and police training, and getting them to the capability
levels that will enable the United States to achieve its goals
in Afghanistan. So yes, we are very, very involved and focused
on those kinds of issues.
Senator Brown. Having been there, I am greatly concerned as
well, and I am concerned that a lot of the folks that are
supposed to be doing the training are not fulfilling their
obligations with our coalition forces, too. That is a whole
different story.
But when I said funds, I should also say obviously weapons
and supplies and, communications, the whole nine yards. So
thank you for that.
Madam Chairman, I really have focused on where I wanted to
go in the hearing. I want to just say thank you for, collecting
the money and finding out where the waste, fraud, and abuse is,
and I think it helps. It enables us to justify where those
funds are going. So, drive on.
I have nothing further. Thank you.
Senator McCaskill. Thank you, Senator.
On SIGOCO, I have great respect for all of you who are here
that work for State and DOD and AID. And I understand in some
ways establishing SIGOCO in some ways feels a little bit like
someone is permanently going to be on your turf. And I am not
discounting your opinions about this because of that, but I do
think that Mr. Bowen makes some points about--and I think that
what we have heard today in the testimony about SIGAR is really
in many ways to me depressing. Standing up an organization in a
contingency is very difficult, and that is the one organization
where speed is incredibly important. You all understand that
your audit product has a very short shelf life in a contingency
operation. It is very easy to waste a lot of money on an audit
in a contingency operation if you cannot get it to the
decisionmakers quickly enough. And so when you establish a
Special Inspector General for Afghanistan and it takes 18
months to produce the first audit on a contract and the audit
portion of that report is four pages, that makes me weep. I
mean, something is terribly wrong there.
Now, was there appropriate expertise in place? Clearly not.
Did it take them too long to get appropriate expertise in
place? Obviously. And if we had a permanent Inspector General
on Overseas Contingency Operations, we would not have had that
lag time.
Can't you all acknowledge that $5 million a year is a
pretty good investment if we could keep a contingency operation
Inspector General office, if we could stand one up and sustain
one for the long haul? Because I got to tell you, the irony
is--and some of you, I may have told you this before, that in
speaking with somebody in the army who was involved in Bosnia,
the lessons learned in Bosnia on contracting, they were not
learned. We went back to the drawing board in Iraq, and by the
time that Mr. Bowen arrived, we had a completely out-of-control
Logistics Civil Augmentation Program (LOGCAP) contract with no
oversight whatsoever. Nobody had any idea why it was so far
over the estimate in its first year of operation, and it took a
while. And I think that Cunningham is doing a much better job
in Afghanistan than a lot of the folks were doing in Iraq. And
I think we have made improvement. But I am just worried. I
mean, I do not have confidence in this agency after this
hearing today. And I have a sense that if we had a permanent
office I would not have this sinking sensation that we do not
have the right leadership and we have missed a lot of audits
that should have been done.
Comments?
Mr. Heddell. Well, I will, Senator McCaskill. I certainly
have great respect for my colleague, Inspector General Bowen,
and I never discount anything that he says. But I am not
totally convinced--and this is not turf issues for me. I have
more than enough work. Quite frankly, I would take any help I
could get. But I am not convinced that a Special Inspector
General for Contingency Operations is the most effective and
efficient way.
There is a difference, if I may say, between the way we
have set up SIGIR, Mr. Bowen's operation, and the way we set up
SIGAR. When we set up SIGIR, the Department of Defense
Inspector General provided 144 auditors and investigators, some
full-time, some part-time, for a lengthy period of time. When
the Special Inspector General for Iraq Reconstruction (SIGIR)
was first set up as Coalition Provisional Authority Inspector
General (CPA IG), the DoD IG detailed 27 individuals on a full
or part-time basis to SIGIR. In total 138 DoD IG staff members
provided audit, investigative, Hotline, information technology,
payroll, travel, and other administrative support (full and
part-time to the CPA, CPA IG and SIGIR. I am not saying that is
why Mr. Bowen was so successful, but I think it got SIGIR off
on the right foot.
But on the other side of that coin, that was not done with
SIGAR. I am not saying it would have been better. I am not
suggesting that there still would not have been hiring and
performance problems with SIGAR. What we heard today goes far
beyond that.
Senator McCaskill. The problems we heard today go far
beyond just the ability to stand up quickly.
Mr. Heddell. That is correct. But I think what we are
talking about right at this moment is what is best for the
future, and I think that, for instance, the response by the
Inspector General community to Hurricane Katrina, which was a
contingency operation, by and large was relatively effective.
Senator McCaskill. Right.
Mr. Heddell. I think we have the audit and law enforcement
expertise in our community at large to respond to contingency
operations very effectively. I think it is a little bit of a
toss-up as to whether you go the Special IG route, but the
inefficiency aspect of it is that if you do that, two things
happen: No. 1, you do not have enough people in a Special
Inspector General contingency operation on a full-time basis to
be able to respond quickly; and, No. 2, the cost of maintaining
a force waiting for a contingency to occur.
So until we sit down and I guess figure it all out, to me
it is not an efficient proposal.
Senator McCaskill. I know all of you probably want to
comment on that, and I have a vote that has been called, and I
am not going to make you sit here while I go vote and come
back, as much as I am tempted to, because I could go on a
while. And I know--Inspector General Bowen and I have discussed
this one on one before, and I am a little biased towards his
opinion on this. But I certainly will go out of my way to have
one-on-one conversation with you, Mr. Geisel, and you, Mr.
Carroll, on this subject if we do not have time to get back to
it.
But I wanted to ask you, Mr. Carroll, you intimated that or
referred to problems in working with the law enforcement end of
SIGAR. Now, I find that fascinating since they have now had a
CIGIE review of their law enforcement, and it was--as somebody
who is a former prosecutor and former auditor, as I read the
review of the law enforcement problems, I was really surprised
that basics had not been done. Are they trying to assert
primary jurisdiction even after CIGIE has said that they are so
far our of compliance with the government standards of
investigation?
Mr. Carroll. Yes.
Senator McCaskill. That is outrageous. That is outrageous.
And I will follow up. I think our office needs to follow up and
ask some significant questions. It takes a lot of nerve for an
investigative agency to assert primary jurisdiction over AID
after independent peer review has determined they are not in
compliance with government investigative standards. And so I
would be irritated, if I were you, if they were trying to step
on you. I would really be irritated if they are trying to step
on you after they are only one of 51 agencies looked at--of 52
agencies looked at that were not in compliance with the
government standards of investigations. So I am glad that you
have indicated that to me.
I have to make a vote by 6:15 p.m. Please, if there is
anything that I have not asked that I should have, I implore
you to give us that information as we look at this issue. You
all are the front line of probably the most challenging audit
environment that exists in the world in Afghanistan right now.
The enemy we are fighting is, yes, it is Taliban, yes, it is al
Qaeda, but it is, make no mistake about it, a culture of
corruption. And the American people have no idea how much money
is probably walking away from its intended purpose in
Afghanistan.
So please convey to the men and women who work for all of
you, and we will probably have another opportunity at a
hearing, Mr. Bowen, before the end of the line in Iraq, but
please convey to all the people that have worked in Iraq what--
we spend a lot of time praising the men and women in uniform,
as we should. And I do not think enough people realize that
there are men and women that are putting their lives in danger
with very difficult work in a very challenging environment. So
please convey to all of your staffs the appreciation of the
American people for the work they are doing. It is essential.
It is very important to the safety and security of this Nation.
So thank you for your attendance today, and this hearing is
adjourned.
[Whereupon, at 6:09 p.m., the Subcommittee was adjourned.]
A P P E N D I X
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