[House Hearing, 112 Congress]
[From the U.S. Government Printing Office]
WATCHING THE WATCHERS: THE NEED FOR
SYSTEMIC REFORMS AND INDEPENDENCE OF
THE STATE DEPARTMENT INSPECTOR GENERAL
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON FOREIGN AFFAIRS
HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
FIRST SESSION
__________
APRIL 5, 2011
__________
Serial No. 112-8
__________
Printed for the use of the Committee on Foreign Affairs
Available via the World Wide Web: http://www.foreignaffairs.house.gov/
______
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COMMITTEE ON FOREIGN AFFAIRS
ILEANA ROS-LEHTINEN, Florida, Chairman
CHRISTOPHER H. SMITH, New Jersey HOWARD L. BERMAN, California
DAN BURTON, Indiana GARY L. ACKERMAN, New York
ELTON GALLEGLY, California ENI F.H. FALEOMAVAEGA, American
DANA ROHRABACHER, California Samoa
DONALD A. MANZULLO, Illinois DONALD M. PAYNE, New Jersey
EDWARD R. ROYCE, California BRAD SHERMAN, California
STEVE CHABOT, Ohio ELIOT L. ENGEL, New York
RON PAUL, Texas GREGORY W. MEEKS, New York
MIKE PENCE, Indiana RUSS CARNAHAN, Missouri
JOE WILSON, South Carolina ALBIO SIRES, New Jersey
CONNIE MACK, Florida GERALD E. CONNOLLY, Virginia
JEFF FORTENBERRY, Nebraska THEODORE E. DEUTCH, Florida
MICHAEL T. McCAUL, Texas DENNIS CARDOZA, California
TED POE, Texas BEN CHANDLER, Kentucky
GUS M. BILIRAKIS, Florida BRIAN HIGGINS, New York
JEAN SCHMIDT, Ohio ALLYSON SCHWARTZ, Pennsylvania
BILL JOHNSON, Ohio CHRISTOPHER S. MURPHY, Connecticut
DAVID RIVERA, Florida FREDERICA WILSON, Florida
MIKE KELLY, Pennsylvania KAREN BASS, California
TIM GRIFFIN, Arkansas WILLIAM KEATING, Massachusetts
TOM MARINO, Pennsylvania DAVID CICILLINE, Rhode Island
JEFF DUNCAN, South Carolina
ANN MARIE BUERKLE, New York
RENEE ELLMERS, North Carolina
VACANT
Yleem D.S. Poblete, Staff Director
Richard J. Kessler, Democratic Staff Director
C O N T E N T S
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Page
WITNESSES
Mr. Harold W. Geisel, Deputy Inspector General, U.S. Department
of State....................................................... 8
Ms. Jeanette M. Franzel, Managing Director, Financial Management
and Assurance Team, U.S. Government Accountability Office...... 25
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Ileana Ros-Lehtinen, a Representative in Congress
from the State of Florida, and chairman, Committee on Foreign
Affairs: Prepared statement.................................... 4
Mr. Harold W. Geisel: Prepared statement......................... 11
Ms. Jeanette M. Franzel: Prepared statement...................... 27
APPENDIX
Hearing notice................................................... 62
Hearing minutes.................................................. 63
The Honorable Gerald E. Connolly, a Representative in Congress
from the Commonwealth of Virginia: Prepared statement.......... 65
WATCHING THE WATCHERS: THE NEED FOR SYSTEMIC REFORMS AND INDEPENDENCE
OF THE STATE DEPARTMENT INSPECTOR GENERAL
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TUESDAY, APRIL 5, 2011
House of Representatives,
Committee on Foreign Affairs,
Washington, DC.
The committee met, pursuant to notice, at 10 o'clock a.m.,
in room 2172 Rayburn House Office Building, Hon. Ileana Ros-
Lehtinen (chairman of the committee) presiding.
Chairman Ros-Lehtinen. The committee will come to order.
After recognizing and the ranking member, my friend, Mr.
Berman, for 7 minutes each for our opening statements, I will
recognize any other members that want to seek recognition for a
1-minute opening statement. We will then hear from our
witnesses, and I would ask you to summarize your prepared
statements for 5 minutes before we move to the question and
answer with members under the 5-minute rule.
And without objection, the witnesses' prepared statements
will be made part of the record, and members may have 5 days to
insert statements and questions for the record, subject to the
length limitation in the rules.
And the chair now recognizes herself for 7 minutes. Thank
you.
A robust and effective Office of Inspector General is
Congress' first line of defense against waste, fraud, abuse,
and mismanagement. This committee and the State Department's
Inspector General must have a shared interest in ensuring that
the State Department is managed effectively and efficiently to
achieve our nation's foreign policy goals.
Now more than ever, given global developments and emerging
threats, combined with economic challenges facing our nation,
we must have a State Office of Inspector General that
challenges State Department management to function with
transparency and accountability.
For over 30 years, the General Accountability Office has
raised concerns about the independence and reliability of the
Office of Inspector General for the Department of State. GAO
first questioned the structural independence of the State OIG
in 1978 when it pointed out the problem with appointing Foreign
Service officers as inspectors general who then leave the State
OIG office to become ambassadors for the Department. In short,
how can they be trusted to provide objective, unbiased reviews
of State Department operations when their career advancement
hinges on the type of assessment they give to programs or
peers?
GAO noted that the revolving door was also an issue, even
for lower level positions in which active Foreign Service
officers are assigned to lead Embassies and consular post
positions. Congress intended to remedy this problem in 1986
when the Inspector General position was made a Presidential
appointment and when career members of the Foreign Service were
specifically excluded from the pool of eligible candidates.
However, as GAO noted in its 2007 report, this restriction has
often been circumvented for extended periods when no permanent
IG is chosen to serve and, instead, a Foreign Service officer
holds the position in an acting capacity.
Our committee has received a number of whistleblower
complaints through our new Web site feature where
whistleblowers alleged that, due to the revolving door
relationship between State OIG and state management, adverse
findings regarding contract management have been whitewashed,
and managerial decisions regarding promotions, awards,
assignments, and grievances were susceptible to arbitrary
adjudications.
The Project on Government Oversight (POGO), an independent,
non-profit organization that investigates government
misconduct, directly calls into question the objectivity of the
State Department's Inspector General's office and of its
leadership. Among other things, POGO questions the Ambassador's
personal times to Department management.
Citing various e-mails it has obtained, POGO asserts that
the Ambassador was doing just enough regarding state operations
in Iraq to try to avoid losing jurisdiction to the Special
Inspector General for Iraq Reconstruction, but not enough to
identify and address the problems.
This committee also received separate evidence of
disturbing misconduct in State OIG criminal investigations. The
committee's review was triggered by a March 2010 referral sent
by a Federal District Court judge who was disturbed by evidence
that a State OIG investigation connected with a case before him
had been seriously compromised.
Our staff continues to look into these allegations. Whether
real or perceived, compromise of independence is a serious
problem for State OIG. In addition, GAO has long criticized
State OIG for overreliance on inspections as an oversight
mechanism.
In its previous reports, GAO found State OIG inspection
reports to be superficial and thin, lacking in quality
assurance normally required of an OIG. Acknowledging that State
OIG has had a requirement periodically to inspect every post,
GAO recommended fuller use of audits instead.
As our GAO witness will describe during her testimony,
audits require more stringent requirements than inspections for
documentation to support findings, and are subject to external
peer review. This makes a significant difference regarding
quality assurance.
The recent reclassification of all audits conducted by the
State OIG's Middle East Regional Office provides a case in
point. An external peer review conducted by the OIG of the
National Aeronautics and Space Administration found numerous
reporting deficiencies that caused State OIG to reclassify all
Middle East Regional Office audits from January 2008 to
September 20, 2009, as inspections.
State OIG has indicated that the Middle East Regional
Office will be folded into its larger audit unit. However, the
fact that the Middle East Regional Office performed so poorly
in such a high-risk area is deeply troubling.
I am particularly concerned with adequate oversight in this
area, given the billions of dollars that will be at stake as
operations in Iraq are transitioned from the Department of
Defense to the Department of State. In preparation for this
hearing, we asked GAO to determine whether State OIG is making
progress toward implementing its longstanding recommendations.
Your report indicates that actions are underway, but more needs
to be done. We need confidence in the State OIG, and we will be
vigilant in making sure that they continue to improve.
And with that, I would like to yield time to my friend, my
ranking member, Mr. Berman of California, for his opening
remarks.
[The prepared statement of Chairman Ros-Lehtinen follows:]
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Mr. Berman. Well, thank you very much, Madam Chairman. I
appreciate your calling this hearing. Your opening testimony
started out by referring to the State Department's Inspector
General as the first line of defense. My opening statement
starts out referring to the Inspector General as the last line
of defense against waste, fraud, and abuse at the State
Department. Maybe it is an intermediate line of defense, but it
is supposed to be a line of defense.
Foreign Service officers, civil service employees, and, of
course, the U.S. taxpayers should have absolute confidence that
the IG's office serves as an unassailable mechanism of
accountability in the State Department. And, to my way of
thinking, the office has often performed this function
admirably.
Nonetheless, as described by the chairman, a 2007
Government Accountability Office report flags a number of
systematic concerns with the IG's office. First, the rotation
of Foreign Service officers in the IG's office, a statutory
legacy of the Foreign Service Act of 1980, raises questions
regarding the independence of the organization.
One could argue that FSOs bring unique expertise to State
Department oversight, including an intimate knowledge of the
way our overseas missions work--or don't work--as the case may
be. But this must be weighed against the concern that reliance
on senior State Department personnel to conduct oversight
creates both the image and the possibility of a conflict of
interest. I would welcome the views of our witnesses on the
role of FSOs in the IG's office.
Second, I am also interested in the views of our panelists
regarding the balance between audits--the standard product of
most IG offices--and inspections, the traditional focus of the
State IG, based on its historical mandate to inspect foreign
posts.
The GAO report indicates that the State IG generally
conducts about two inspections for every one audit. It also
found that key management challenges, such as counterterrorism
and information security, were overwhelmingly subject to
inspections rather than audits.
I understand that the IG incorporates elements of an audit
into many inspections, but in many ways they are distinct
products with different methodologies. Especially as the State
Department assumes unprecedented roles and responsibilities in
both Iraq and Afghanistan, including the management of massive
contracts, to what extent should the IG place a greater
emphasis on audits?
Finally, the GAO expresses concerns about inadequate
resources for the IG, a concern that I share. If this Congress
is serious about eradicating waste and abuse, if it really
wants to ensure effective oversight over funds, and if it
genuinely wants to foster greater accountability over taxpayer
dollars, we must ensure adequate resourcing of the IG's office.
I would note that the Continuing Resolution passed by my
colleagues a few weeks ago would cut the State IG's budget 17
percent below current operating levels, which will result in a
hiring freeze and curtain oversight of operations in Iraq and
Afghanistan, if that level of cut were to pass. I don't
understand why my colleagues would insist on cutting the budget
of the very organization intended to ensure funds are well
spent.
Incidentally, and somewhat ironically, the CR also cuts the
funds for the GAO, the organization that authored the report
upon which this hearing is based.
I commend the chairman for holding this hearing and look
forward to the witnesses' comments. And in an unprecedented
act, I yield back the balance of my time, thereby making the
first effort to cut waste. [Laughter.]
Chairman Ros-Lehtinen. Very well done, Mr. Berman.
I would like to recognize Mr. Marino, if he would have a 1-
minute opening statement.
Mr. Marino. Thank you, Madam Chair, but I have no
statement.
Chairman Ros-Lehtinen. Thank you, sir.
Mr. Rohrabacher.
Mr. Rohrabacher. Well, I guess I am here to talk about the
middle line of defense, seeing that we have the first line and
the last line.
I think that a careful look at why the American people are
disillusioned is not necessarily because of corruption and some
misappropriation of funds. I think that what we have, Madam
Chairman, instead is disillusionment because of policy. Policy
leads us to a position.
I think that a certain amount of corruption and a certain
amount of waste and fraud is expected in any major operation in
the midst of conflict. I have seen it since I was a young
person in Vietnam, and I have seen it in every conflict I have
been in since, just as collateral damage and the loss of
civilian life is part of what happens in those type of
deployments.
But that doesn't mean we should accept them, and we have to
work against it. But it goes with the territory, and it is up
to us to minimize that type of collateral damage and waste and
fraud. But most important, it is up to us to have the right
policy of government, to have the right policies, and I believe
the United States Government has been engaged in economy-
building instead of emergency and crisis aid. And that goes
down to the very heart of the reason the American people are
disillusioned, because that strategy cannot be successful, and
it hasn't been.
So with that said, thank you, Madam Chairman.
Chairman Ros-Lehtinen. Thank you, Mr. Rohrabacher.
Mr. Rohrabacher. Looking forward to the hearing.
Chairman Ros-Lehtinen. Thank you.
Mr. Higgins is recognized.
Mr. Higgins. I don't have an opening statement, Madam
Chair. I will have questions during the question and answer
period.
Chairman Ros-Lehtinen. Thank you, sir.
Mr. Higgins. Thank you.
Chairman Ros-Lehtinen. Mr. Gallegly. Mr. Gallegly, if I
could have your minute?
Mr. Gallegly. I will yield to the gentlelady.
Chairman Ros-Lehtinen. Well, thank you. Just because my
good friend, the ranking member, spoke about H.R. 1 and the
cuts that we are making, and I just want to--and I hope we have
some charts that are coming out soon about our plan for
reviving the economy, which is straightforward.
We are cutting job-destroying programs to help the economy
grow, to empower employers to create jobs. We have had historic
debt that is leading to historic tax increases, and we have got
to stop that. And that is going to lead to historic high
unemployment.
And we have got--we are going to address this spending-
driven debt crisis now. There is a lot of resistance to making
sure that we don't do it, but we are determined to. And I don't
think it is a coincidence that our national debt, our Federal
spending, our bureaucratic regulatory costs, and unemployment
have climbed to record heights at the same time.
So we hope to create jobs, we hope to save our children
from national bankruptcy, and so the way to do that is to stop
spending money that we don't have. And we hope to shrink the
Federal budget, so that we don't have to shrink the family
budget.
And with that, I would now like to recognize our witnesses,
unless Mr. Deutch has an opening remark to make on the----
Mr. Deutch. Near perfect.
Chairman Ros-Lehtinen. Thank you very much. Pithy, great
statement. We like that.
And the chair and the ranking member, we are pleased to
recognize and welcome today's witnesses. Ambassador Harold
Geisel is the Deputy Inspector General for the Department of
State and Broadcasting Board of Governors. Ambassador Geisel
has more than 25 years' experience in senior management with
the State Department. He joined the Department in 1970 and has
since completed tours all across the globe, including Brussels,
Oslo, Bern, everywhere, Rome, South Africa, Moscow.
In '94, he served as Acting Inspector General for the
Department of State, and then, in '95, held the position of
Deputy Assistant Secretary of State for Information Management.
In '96, he went abroad again as Ambassador until '99. And
following his retirement from Foreign Service in 2001, the
Ambassador served as Acting Deputy Assistant Secretary for
Logistic Management.
In 2008, he assumed the position of Deputy Inspector
General, and has held that position ever since, which brings
him to this meeting today.
And next we will hear from Ms. Jeanette Franzel, the
Managing Director for the U.S. Government Accountability
Office, Financial Management and Assurance Team. She heads
GAO's oversight of financial management and auditing issues
across the Federal Government.
Ms. Franzel is an expert on the topic of audits and
independence, oversees GAO's work in developing and issuing
government auditing standards, also known as the Yellow Book.
The Yellow Book standards are widely used by the U.S.
Government and also serves as a model for both private sector
and governments around the world.
Ms. Franzel also leads the development of GAO positions on
proposed standards for the U.S. Auditing Standards Board, the
Public Company Accounting Oversight Board, the International
Auditing and Assurance Standards Board, and the Institute of
Internal Auditors.
Additionally, she provides technical expertise to GAO teams
and external audit organizations on issues involving auditor
independence, engagement design, methodologies, quality
assurance, internal inspections, peer review, internal control
and governance, in the public sector programs.
We are glad to have you here. And I kindly remind our
witnesses to summarize your statements for 5 minutes, and we
will put your written statements into the record without
objection.
Ambassador, please proceed.
STATEMENT OF MR. HAROLD W. GEISEL, DEPUTY INSPECTOR GENERAL,
U.S. DEPARTMENT OF STATE
Ambassador Geisel. Thank you, Madam Chairman, Ranking
Member Berman, and members of the committee, for the
opportunity to testify today.
Since being appointed by Secretary of State Rice during the
summer of 2008, I have often told OIG employees that we have
the best jobs in the Federal Government because we get paid to
tell the truth. Our reports are the true objective measure of
our independence and effectiveness. Our inspections of
Embassies Baghdad, Kabul, and Luxembourg, plus our audits of
the new Embassy construction in Baghdad, passport snooping, and
the Christmas bomber, clearly show that OIG is independent,
thorough, and responsive.
The GAO report was issued in 2007. By the close of FY2010,
the number of reports issued annually on my watch increased
from 107 to 157. Open investigations increased from 36 to 101.
Subpoenas increased from zero to 25, and contractor suspension
and debarment actions increased from zero to five.
OIG has substantially expanded its oversight in critical
areas, particularly in Afghanistan. We now have boots on the
ground at five overseas locations. The Office of Investigations
has 26 active investigations in the Middle East and Southwest
Asia, 10 related to Afghanistan.
President Bush nominated an IG several weeks after I
arrived in June 2008. Although he was not confirmed, my top
priority was to continue building OIG's oversight capability
and morale. I read GAO's report and kept it on my desk because
I valued its input.
We have complied with GAO's recommendations to establish an
MOU with Diplomatic Security and include IT reports in our
internal quality review process. Also, the Foreign Service
Deputy Inspector General, DIG position, was abolished by me in
January 2011. Thus, any future DIG who becomes Acting IG will
be a civil servant, not an FSO.
However, we believe not considering civil servants with
management careers would unduly exclude highly qualified
candidates. OIG has reassessed the mix of audit and inspection
coverage. Our methodology for investing resources now includes
a risk management approach that ensures all congressional
executive mandated audits and inspections are performed, and
that our remaining audits and inspections cover high cost
programs, key management challenges, and vital operations.
Our Office of Audits reorganized in January 2010 to gain
functional area expertise, contribute to an audit planning
process that included high-risk/high-cost programs, and operate
in a more efficient and accountable manner.
In October 2011, our Middle East Regional Office, MERO,
will be merged into the Office of Audits, easily making Audits
the largest component of the State IG with more than 90 full-
time employees. We anticipate that the number of audits will
substantially increase after MERO is incorporated into Audits.
Our inspections cover three broad areas that are consistent
with Section 209 of the Foreign Service Act--policy
implementation, resource management, and management controls.
The IG community has long recognized that inspections are
uniquely suited to provide timely feedback to program managers
and to review highly technical matters.
The inspection function is growing in number and size
within the IG community, and the 2008 IG Reform Act
acknowledges the inspection role of OIGs as separate from
audits.
Our mix of oversight coverage is effective because our
offices complement one another's efforts in an efficient
manner. During each inspection cycle, teams examine a wide
cross-section of issues at multiple posts and bureaus. When a
team discovers an area that requires a drill-down audit or
investigation, it is referred to those offices.
For example, the Embassy Baghdad inspection team discovered
an overtime issue that required additional oversight. An audit
team followed the inspection and produced major findings and
recommendations leading to better controls at the Embassy.
Finally, there is an overriding need to use inspectors with
the requisite experience, expertise, and Senate-confirmed
ambassadorial status to lead inspections of overseas posts.
Any potential concern is also mitigated by OIG's
transparency, vetting procedures, and recusal policies. Few of
the inspection teams are led by active duty Foreign Service
ambassadors, and inspection team leaders report to, and are
rated by, the AIG for inspections, a member of the Senior
Executive Service. Just 17 of the 64 direct hire staff members
currently employed in inspections are FSOs, and most retire
after their assignments with OIG.
In short, as Congress previously recognized, FSOs play an
invaluable role in our inspections, which together with checks
and balances outweigh any theoretical appearance of lack of
independence. In sum, we believe OIG is in substantial
compliance with GAO's recommendations.
Once again, thank you, Madam Chairman and Ranking Member
Berman, for the opportunity to appear today. I would be pleased
to take any questions you have at this time.
[The prepared statement of Ambassador Geisel follows:]
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Chairman Ros-Lehtinen. Thank you so much, Mr. Ambassador.
Thank you, Ms. Franzel.
STATEMENT OF MS. JEANETTE M. FRANZEL, MANAGING DIRECTOR,
FINANCIAL MANAGEMENT AND ASSURANCE TEAM, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE
Ms. Franzel. Madam Chairman Ros-Lehtinen, Ranking Member
Berman, and members of the committee, thank you for the
opportunity to be here today to discuss the Department of State
OIG.
The State OIG has a critical responsibility to provide
independent and objective oversight of the State Department. In
2007, we reported concerns about State OIG's independence and
effectiveness. Today, I will discuss our previously reported
concerns and the current status of those concerns based on our
follow-up work.
In 2007, we reported concerns with two independence issues
and three effectiveness issues. Regarding independence, our
first concern dealt with the use of State Department management
officials as Acting IGs. In order to help ensure the
independence of the IG Office, we recommended that the State
OIG work with the Secretary of the State to develop succession
planning to help ensure independence in appointment of acting
IGs.
And in response, as Ambassador Geisel has said, the Acting
IG recently abolished the Deputy IG position for Foreign
Service, which will help ensure that any future Deputy IGs
moving into an acting IG position will not be Foreign Service
officers.
The State Department has relied on acting IGs to provide
oversight for over five of the last 8 years, since January
2003. Three of the acting IGs returned to significant
management positions within the State Department. We realize
that the appointment of a permanent IG is not within the
control of State OIG. Nevertheless, the use of management
officials as acting IGs is a concern, as one of the
independence protections in the IG Act is that the IG is to be
appointed by the President and confirmed by the Senate.
Our second independence concern was with the use of Foreign
Service officers to lead inspections of the department's
bureaus and posts. State OIG inspections are led by ambassador-
level Foreign Service officers who often move through the OIG
on rotational assignments, and then back into Foreign Service
positions.
We recommended that the IG develop options so that State
OIG inspections are not led by Foreign Service officials. The
State IG has stated that having Foreign Service officials with
the rank of ambassador as team leaders is critical to the
effectiveness of the inspection teams. Although the IG has put
some safeguards in place, we continue to believe that a
fundamental, structural, independence problem exists with this
arrangement.
As I mentioned, we also reported on three effectiveness
issues. A serious effectiveness issue that we noted in our 2007
report was the State IG's reliance on inspections, rather than
audits, to provide oversight of the Department. By design,
inspections do not provide the level of assurance or rigor that
audits provide.
State IG's reliance on inspections resulted in gaps in the
audit coverage of State Department's high-risk areas and
management challenges, including counterterrorism and border
security, public diplomacy, and human resources. We recommended
that the State IG reassess the mix of audit and inspection
coverage, and in our recent update we have found that State IG
is taking actions to strengthen its audit practice. But we
recently continued to identify gaps in audit coverage in key
areas, including foreign assistance, public diplomacy, and
human resources.
As I mentioned, the good news is that State IG has taken a
number of steps to strengthen its audit practice and to plan
for additional audit coverage. It has increased its resources
dedicated to audits and reorganized the Office of Audits to
align its oversight efforts with the Department's mission and
strategic priorities.
Finally, State IG took actions to implement our two other
recommendations, as Mr. Geisel explained, in the area of
including IT inspections and its internal quality review
process and developing a written agreement with the Bureau of
Diplomatic Security to coordinate departmental investigations.
In summary, we commend the OIG for the steps it is taking
to build and strengthen its audit practice. We continue to
emphasize the need for OIG to continually assess its mix of
audit and inspections of the Department's high-risk and
management challenge areas. Frankly, this is a measure of the
effectiveness of the audit practice on an ongoing basis, so we
would encourage a continual reevaluation based on facts and
circumstances and risk of the mix of audit and inspections on
an ongoing basis.
Second, we believe it is important for State Department to
be headed by a permanent IG, appointed by the President, and
confirmed by the Senate as envisioned by the IG Act.
Finally, State OIG's unique requirement to provide
inspections of the Department's bureaus and posts, and its need
to use ambassador-level Foreign Service members as team
leaders, presents both independence and resource problems for
the OIG. There may be opportunities to revisit this particular
requirement, which is in law, and whether some of these
functions should be performed by State Department with more of
an audit and oversight function of the inspections being
performed by State OIG.
So I think there is a tremendous opportunity here to
revisit the requirements and perhaps develop a mechanism where
OIG can be providing effective oversight, but perhaps State
Department can take over some of the management function
portions of the inspections.
Madam Chairman, Ranking Member Berman, and members of the
committee, this concludes my statement, and I would be happy to
respond to any questions that you have.
[The prepared statement of Ms. Franzel follows:]
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Chairman Ros-Lehtinen. Well, thank you very much. You have
both made some very good recommendations to our committee in
order to streamline this process.
Mr. Geisel, I wanted to ask you about the Horne v. Huddle
case. And the U.S. Government recently spent 3 million tax
dollars to settlement the Horne v. Huddle case. This has been a
long-running lawsuit against a former senior U.S. diplomat who
was accused of illegally eavesdropping on a DEA agent when they
were both stationed in Burma.
Because the Federal Judge in that case was disturbed by the
evidence that the IG investigation into that matter had been
compromised, he required that the congressional committees be
notified before he would finalize that settlement.
And there are serious allegations that the IG's 1996
investigative report was altered and the investigator's
signature was forged in order to obscure the investigator's
original conclusion that the accused diplomat was guilty of
eavesdropping, perjury, and obstruction of the IG
investigation. And even the edited report notes that the
accused diplomat's contradictory statements were refuted by
numerous Embassy employees and concludes that OIG investigation
is ``unable to dispel the suspicion of his misconduct.''
So, Mr. Geisel, I would like for you to explain how the
defendant, in that contentious $3 million illegal eavesdropping
case, who was the subject of an OIG Inspector General
inspection, investigation, that pointed toward possible
perjury, who had been accused of unlawfully obstructing an OIG
investigation, and who appears on OIG's name check system as
having been the subject of a special inquiry, gets hired to
lead investigations for the Inspector General's office in 2005,
and stays on the payroll until after this committee began
asking questions about these matters last summer? Would he ever
have been hired for that position had he not been a senior
Foreign Service officer? And doesn't his employment at OIG
indicate a problem overall?
Ambassador Geisel. Thank you, Madam Chairman. Of course,
Mr. Huddle was hired in 2005, before I got to OIG. And my only
direct----
Chairman Ros-Lehtinen. I don't mean this as a question
about you. I am saying about the process of----
Ambassador Geisel. Yes.
Chairman Ros-Lehtinen [continuing]. Who gets hired, who is
doing the investigation. I am not saying it directs to you.
Ambassador Geisel. Thank you, Madam Chairman, and I
appreciate that. He was hired in 2005 because a name check was
done, and there was--he got a positive endorsement. All of
that, I don't want to guess what my predecessors did, because
when I heard about the Judge's memorandum I said he was never
to be used again.
And at the same time, as you mentioned, I referred the
matter to your committee, and to the Senate's committee, and my
counterpart at the CIA did the same thing with her committees.
Chairman Ros-Lehtinen. If I could follow up, now, you, in
your capacity, possess an extensive investigative record
raising numerous doubts about this gentleman's veracity. And
the D.C. Federal Circuit Court noted in 2007 a seemingly
impossibility that he acquired his information through legal
means, as well as his apparent lie to OIG investigations. Does
this case compel you to review what you had been doing and how
it should not be done in the future?
And within 48 hours of the Horne v. Huddle settlement
hitting the press, you had e-mail exchanges with the defendant
and with a former OIG investigative supervisor who had been
involved in that case. Would you be willing to provide your e-
mail to and from these individuals to the committee, working
with the committee, so that we could give parameters to our
request, which I hope would be considered?
Ambassador Geisel. Madam Chairman, subject to our lawyers
speaking to your lawyers, if there is any information that
belongs to another agency, yes, we would be glad to show your
staff those e-mails.
Chairman Ros-Lehtinen. Thank you very much. Thank you for
that and that spirit of cooperation.
I now would like to yield to Mr. Carnahan, the ranking
member on the Subcommittee of Oversight and Investigations.
Mr. Carnahan. Thank you, Madam Chair, for this hearing. It
is I think very timely. I want to specifically raise the issue
of our Government's capacity to effectively oversee post-
conflict reconstruction operations, given the significance of
their funding, their deeply complex and challenging nature, and
State's principal and escalating role in Iraq and Afghanistan,
respectively. With this shift from military-led operations in
Iraq to State, State has taken on unprecedented size and scope
of responsibilities.
Last year, I chaired hearings on reconstruction efforts in
both Iraq and Afghanistan. SIGIR Bowen's testimony raised
serious concerns about U.S. management and oversight practices,
estimating at least $4 billion had been wasted in our
stabilization and reconstruction programs alone. And in later
testimony he emphasized organizational transitions in Iraq that
have been the occasions of significant waste.
As SIGIR draws down in its oversight efforts in Iraq, and
as the U.S. prepares for similar military and civilian
transitions in Afghanistan in the coming years, I would like to
ensure that our oversight mechanisms are prepared to maintain
strict audit and investigation efforts.
Ms. Franzel, with State taking on these increased
responsibilities, can you give your assessment of the State
IG's capacity to take on these added oversight tasks?
Ms. Franzel. Well, first, let me just comment on the need
for very good coordination between the various oversight
entities involved. We have the Special IG for Iraq
Reconstruction, Special IG for Afghanistan Reconstruction, the
State IG, and the DoD IG. There is going to need to be some
very seamless coordination between the oversight mechanisms in
place to help ensure adequate coverage and adequate audit
activity in these areas.
I do find it disturbing what happened with the Mideast
Regional Office within the State Department IG in that the
audits all had to be reclassified to inspections, because those
audits were found to be unreliable. Basically, in the peer
review that occurred, in some of the OIG reports, the
conclusions could not be supported. There wasn't sufficient
evidence backing up the conclusions in the audit reports.
The IG office did acknowledge that and did convert the
audits to inspections, which requires a much lesser standard
for documentation and evidence, but, those offices need to be
doing audit-level work. There is going to need to be
significant cultural change and training to be sure that those
offices are up to the task.
Mr. Carnahan. Let me follow that up. Over 30 years GAO has
expressed concerns over State IG's insufficient independence
from the Department. Have any of these issues of independence
affected the IG's ability to conduct effective oversight of
operations in Iraq and Afghanistan?
Ms. Franzel. We did not specifically look at that question,
but I will say that the inspection load that is taken on by the
State IG office does use a tremendous amount of resources,
which then are not available to do audit work. And so we are
thinking that there is probably a good opportunity at this
point to take a look at that inspection function, which over
the years has been debated.
Is this a management function or an IG function? And
perhaps there are certain aspects of that function that would
be better done by management, because of the independence
issues, but that at the same time would help free up resources
for a stronger audit function within the OIG. And there are
some specific legislative fixes that could be done to take
this--I will call it a burden--from the IG. This can be done
based on risk and where the IG needs to be placing resources
based on what is happening around the world and within the
State Department.
Mr. Carnahan. I certainly would like to share those
legislative ideas, but I want to get a question in to
Ambassador Geisel. And that is, what is the IG doing to
evaluate the effectiveness of the transition to state control
in Iraq? How would you evaluate the transition so far? And how
will these assessments be formulated into meaningful lessons
that we can learn from going forward in Afghanistan?
Ambassador Geisel. Thank you very much for that question,
sir. We have had an inspection, a compliance follow-up review,
and I would say at least four major audits covering areas--
audits and evaluations covering these same areas of concern in
Iraq.
I would note on inspections that 35 out of 64 of the
independent offices of Inspector Generals have the inspection
function. And I think the inspection function is extremely
useful in identifying areas that our investigators and our
auditors then drill down on, as I mentioned specifically in
Iraq.
Chairman Ros-Lehtinen. Thank you very much, Mr. Carnahan.
Mr. Marino of Pennsylvania.
Mr. Marino. Thank you, Madam Chair.
Welcome, guests. Appreciate you being here. Ms. Franzel, I
have at least 18 years of criminal investigation experience,
civil, and also internal affairs. And I found out in my
experience that I personally have a basic problem with
investigating those individuals with whom I worked or had the
slightest relationship with.
Do you find that inherently dangerous in the situation that
we have now where IG from State is investigating situations
where there could be a compromise, there could be a bias? And
not intentionally. Now, I have seen it, though, done
intentionally, but we, as human beings, have a natural
predilection to, how may I say, when we are on the fence, to
protect our own. Could you respond to that, please?
Ms. Franzel. Certainly. This situation inherently has a
number of threats to the independence and integrity, and,
again, not necessarily that this would be done intentionally by
the people involved. In professional auditing literature that
has really been accepted worldwide, there are a number of
threats that are articulated, which I see coming out in this
situation.
The first is a self-interest threat. So if you have
somebody moving through an IG office and back into another
position, the threat that an interest will inappropriately
influence an auditor's judgment or behavior is there, because
that inspector or team leader is looking for the next career
opportunity. So there is a self-interest threat.
There is also a self-review threat of reviewing offices and
programs that an auditor or inspector was previously involved
in. A recusal policy can be a safeguard, but not always a fully
effective safeguard. There is a bias threat because of the
familiarity of an auditor or an inspector with operations of an
office.
There is a familiarity threat, which is really the threat
that due to a long or close relationship with management or
personnel of an audited entity, an auditor will be too
sympathetic to their interests, or simply too accepting of
their work. And that is something that can happen
unconsciously.
There is an undue influence threat, again, which can come
into play here, as well as a structural threat in terms of,
what is the audit organization attempting to do? Is it part of
a management function? And where is the placement of this
function? So I see all of these threats coming into play in one
fashion or another with this arrangement.
Mr. Marino. Ambassador, then, hearing what Ms. Franzel just
stated, what do we do about these threats? What do we do to
prevent this appearance of impropriety and make sure that we
avoid these pitfalls?
Ambassador Geisel. Well, it depends on whether we are
talking about inspections, audits--well, inspections and audits
or criminal investigations. And as you pointed out, from your
experience as a criminal investigator, that is the number one
concern.
Now, what I would say there is that our criminal
investigators, once they find evidence of criminal wrongdoing,
their work is thereupon directed by an assistant U.S. attorney,
and everyone else is out of it.
I would also say that, in general, we are--our
investigators are really separated.
Mr. Marino. Please.
Ambassador Geisel. Yes. Our head of investigations is a
long-time officer from DoD. The vast bulk of our investigators
are from outside of the State Department, but even those that
served in the Bureau of Diplomatic Security, they are
completely separated.
Now, for the inspectors and the auditors, we require them,
and we train them to take it extremely seriously. We require
them to sign a statement of independence before they begin any
work. And when it comes to inspections or audits, we carefully
choose members of the teams that have had no relationship with
the post or the office. We have specific guidelines.
And I know that for--we will not have a team leader who
ever served at the Embassy or Bureau where she or he may have
worked, if they are in the Foreign Service. The same is true of
civil service, because where the vast bulk of our members of
our office of inspections come from, if they have ever worked
at an office that we are inspecting or auditing, they will not
get the job period, and they will not be on the review of the
job either.
Chairman Ros-Lehtinen. Thank you very much.
Mr. Marino. Thank you.
Chairman Ros-Lehtinen. Mr. Higgins of New York.
Mr. Higgins. Thank you, Madam Chair.
Ambassador, the municipal clerk offices throughout the
nation has provided passport services to the State Department
for many years, and as far as, you know, the record shows,
without any problems relative to efficiency and relative to
security.
The Inspector General of the State Department has now
issued a mandate to municipal clerk offices that the issuance
of birth certificates and passports have to be done in separate
facilities and separate personnel. Can you enlighten us as to
why this is occurring?
Ambassador Geisel. I would be very glad to, sir. It is a
matter of fraud prevention. Our July 2009 report of the
inspection of passport services noted concerns about the
vulnerabilities to fraud inherent in the passport application
acceptance programs at acceptance facilities country-wide, as
well as quality of the source documentation.
The report also noted variation in the quality of the
Department's customer service manager's oversight and training
of acceptance agents. We made a series of recommendations to
improve oversight and support of acceptance agencies, including
closing an acceptance agency where an acceptance agent also
issues birth certificates as soon as viable alternative
locations for submitting passport applications exists.
And the reason for that is a birth certificate is prima
facie evidence of citizenship. If the same person--so there is
no double-check. If the same person who issues the birth
certificate can also accept the application for a passport, be
that as it may, the vast bulk of acceptance facilities have
separate windows and personnel for these two functions,
although there may be a very few that cannot separate these
functions.
But I would be glad to offer, because our inspectors are
supposed to work quickly, that the Office of Inspections will
monitor the response to your letter to the Secretary and the
impact of compliance with our own recommendations and report
back to you, sir.
Mr. Higgins. Yet there was a May 2009 Government
Accountability Office report that was targeted toward the goal
of recognizing vulnerability in the current policy relative to
the issuance of both passports and birth certificates, and
there was no reference to potential problems with that dual
role continuing.
So what was the--you mentioned a July report of the
Inspector General. Does that reference the May 2009 Government
Accountability Office report?
Ambassador Geisel. I will have to take that as a question
for the----
Mr. Higgins. Who bears the responsibility for the cost
associated with providing separate facilities? This would seem
like a Federal mandate on the localities if the municipal clerk
offices have to provide separate staffing and separate
facilities for the issuance of documents where no identified
problem has occurred previously.
Ambassador Geisel. Well, when we say ``separate
facilities,'' we don't literally mean a separate building.
Mr. Higgins. What do you mean?
Ambassador Geisel. But we do mean that a separate person
has to issue a birth certificate from a person who issues a
passport.
Mr. Higgins. But a separate facility within the same
building.
Ambassador Geisel. A separate facility----
Mr. Higgins. Well, clarity on that issue----
Ambassador Geisel [continuing]. Would literally mean
another window.
Mr. Higgins. Mr. Ambassador, clarity on that issue is
pretty important relative to the efficient, secure, continued
issuance of very important public documents. And these offices
are typically supported by local taxpayers. And knowing what
they are required to do by May 1st, and what they are not
required to do, I think is very, very important. So I would ask
that, you know, you try to clarify this for us and give us a
sound basis from which the policy is being advanced, because I
am not convinced that it is compelling.
Ambassador Geisel. That is absolutely my commitment to you,
sir.
Mr. Higgins. Thank you.
Chairman Ros-Lehtinen. Thank you, Mr. Higgins. Thank you,
Mr. Ambassador.
Dana Rohrabacher, the chairman of the Subcommittee on
Oversight and Investigations, is recognized.
Mr. Rohrabacher. Thank you very much, Madam Chairman. And,
again, I find just the basis for a lot of the problems that we
face and challenges in this arena that we face are inherent to
the job that is being done overseas and whether or not the
policy was right in sending people overseas or not.
I find that a combination of blood and money, coupled with
time, always tends to lead to a moral breakdown. And once you
have a moral breakdown of people in the field, no amount of
oversight and no amount of investigation is going to cure that.
And, as I said, I saw that from the time I was very young, and
I went through different things.
I was not in the military, but I did spend considerable
time in Vietnam and saw--I remember a day when the--it was
reported--I was visiting some doctors in Vung Tao, and it was
reported that a landing craft had been captured by the enemy.
And all of the supplies and the landing craft had been captured
by the enemy, and I was dismayed, and I said, ``Well, how many
people were captured? Or how many people died? How many of our
people were lost in this?'' ``Oh, no, and they all got away.
They all got away. There wasn't any casualties on our side, but
the landing craft was captured.''
Well, somebody sold the landing craft and all the supplies
to the local enemy, and to say that I saw that up and down
Vietnam was to put it mildly. And what had happened is, once we
got in there and the corruption was evident on the other side
at least, it broke down the morals of our own people,
especially in the middle of seeing gore and blood, which almost
none of us had seen before anyway, and that tends to shock the
system.
And we see the same thing beginning to happen in
Afghanistan. You are there a long period of time. People are
being killed. Money is being thrown at the problem, and tell me
this isn't a formula for the breakdown of any moral standards
for anybody that we would send there.
We just lost a man named Bill Young--I would like to put it
in--Bill Young was a brave, wonderful person, the son of
missionaries early in the 1950s, served us very, very well in
Vietnam, and he just passed away a couple of days ago. And Bill
was operating out by himself, and he had given a certain amount
of money to do the job, and he was out by himself with the
mountain yards and the mountain people in that country, in
Vietnam, and in Laos, I might add. Yet there were no audits or
Inspector General visits, or whatever.
Let me get to right now, to what we are facing right now.
We have a huge challenge in Afghanistan, but yet it seems to be
getting worse, in terms of heroin, the production of heroin.
All of us know about it. Okay? Yet over the years the amount--
production of heroin has gone up while we have been there, not
down.
And is this due to corruption or is this just part of a
policy that we have had to let that happen? Yes, Mr.
Ambassador.
Ambassador Geisel. You said is it due to corruption, or is
it due to a policy?
Mr. Rohrabacher. Right. Would you just let this go on?
Ambassador Geisel. I think it is due to the fact that it
has always gone on, as you said. I think that the Department--
and we have audited efforts--the Department is making a great
effort, but I don't know if there is enough money in the world
to stop what has always gone on in Afghanistan. I think the
best we can do is try to control it, but I really am--I have to
share your pessimism, sir.
Mr. Rohrabacher. Well, I don't think I am a pessimist. I am
actually, in the long run, an optimist. But if you have policy
that puts our people in Afghanistan and says they are going to
go out, and some of our military guys are out with sickles, you
know, cutting down some poppies here, well, you know that some
of the leaders of the government brother--maybe Karzai's
brother has another group of poppies over the hill that you
can't touch, if that doesn't lead to moral breakdown, I don't
know what does.
But then again, my point is, you can't have a goal that is
going to take a long time in the middle of a conflict. If it
takes decades, you are going to have a breakdown in our system.
Our system is basically on the integrity of our people, people
like Bill Young and others, to do their job, and oversight and
inspection, I certainly respect the job that you are doing, but
sometimes I think you are faced with an impossible task.
Ambassador Geisel. What can I do except agree with you?
Except I will be an optimist and say we are trying to do our
darnedest, so it is not an impossible task. Let us call it----
Chairman Ros-Lehtinen. Thank you very much.
Mr. Rohrabacher. Thank you.
Chairman Ros-Lehtinen. My good friend Ms. Wilson from
Florida is recognized.
Ms. Wilson of Florida. Thank you, Madam Chairman.
Ambassador, how many Foreign Service officers serve in the
IG's office today?
Ambassador Geisel. There are 18 all told.
Ms. Wilson of Florida. And what percentage of these offices
compose the overall number of employees?
Ambassador Geisel. Less than 9 percent, ma'am.
Ms. Wilson of Florida. Is it your view that the Foreign
Service officers are necessary for inspections?
Ambassador Geisel. Yes, I believe they are very necessary
for inspections. And as my colleague testified, their use is
included in the Foreign Service Act.
Ms. Wilson of Florida. How about for audits?
Ambassador Geisel. There are no Foreign Service officers in
audits.
Ms. Wilson of Florida. So, in essence, how do you assess
the overall value of these Foreign Service officers? You assess
them for us, please, their value.
Ambassador Geisel. I think that their value is crucial,
because there are some things that you can't really audit in an
Embassy--the political interaction with the host country, such
things as your colleague just brought out on the issue of
corruption in the local government, their services to American
citizens, some of which can and are audited, but many which you
can't attach a number. And you need people who have the
experience of working overseas to really be able to drill down
and get evaluations.
They also do one other thing. You know, I hate to say it,
but some of these ambassadors overseas think they are pretty
hot stuff. And the best way to deal with them is to have
another ambassador walk in and call him or her by her first
name and just say, ``I know where you are at. I did this, too.
And guess what? You are wrong.''
Ms. Wilson of Florida. So, Mr. Ambassador, you feel that
with the exception of the one, all of the recommendations have
been complete and that we agree with all of those except for
the one that deals with Foreign Service officers performing
inspections.
Ambassador Geisel. Yes, ma'am. That is correct. We have
some differences with respect to how much and what resources
should go into which function, but essentially the only major
difference of opinion would be the use of Foreign Service
officers, ma'am.
Ms. Wilson of Florida. And you truly feel that their value
is imperative to perform this particular duty.
Ambassador Geisel. Absolutely. And I would point out that
similar IGs in other agencies do it the same way. There are
many retired military officers who work for the DoD Inspector
General as inspectors.
Ms. Wilson of Florida. So this is not unprecedented.
Ambassador Geisel. Hardly.
Ms. Wilson of Florida. Thank you.
Chairman Ros-Lehtinen. Good questions. Thank you, Ms.
Wilson.
Ms. Ellmers of North Carolina is recognized.
Ms. Ellmers. Thank you, Madam Chairman, and thank you to
our guests today.
Ambassador, I have a question for you. The special
Inspector General for Iraq is mandated with the oversight
responsibilities of the Iraqi Relief and Reconstruction Fund,
and the oversight there. It is slated for termination in 2013.
Meanwhile, the State Department will assume current DoD
programs and responsibilities.
The State Department has requested that DoD allow the State
Department to continue the use of the logistics civil
augmentation program while acknowledging that the Foreign
Service does not have the sufficient experience and expertise
to provide oversight.
What impact will the SIGIR's termination have on State IG's
operations in Iraq?
Ambassador Geisel. Well, I am glad you asked that, because
the first thing to understand is that the special IG for Iraq
works with DoD and USAID and State appropriations. The DoD and
USAID appropriations of course are far larger than the State
appropriations.
We have been coordinating with SIGIR, and we feel if there
is sufficient funding we can absolutely assume the remaining
oversight of State Department functions that SIGIR presently
has.
Ms. Ellmers. Okay. Well, thank you very much. I yield back
the remainder of my time.
Chairman Ros-Lehtinen. Thank you very much.
Ms. Buerkle.
Ms. Buerkle. Thank you, Madam Chairman, and thank you this
morning for this timely hearing and for both of our guests to
be here today.
My first question has to do with the permanent--finally
achieving and having a personal Inspector General in the
office. And I would like to ask Mr. Geisel if you think that--
if the credibility of the office is damaged by not having a
permanent Inspector General.
Ambassador Geisel. I think the best way to answer that
question is twofold. First, I don't have any control over the
nomination of a permanent IG. That has to come from the White
House. But, yes, I would like very, very, very much like to see
a permanent IG. And I think the committee has rightly centered
its target on the fact that there is no permanent IG.
I think our work speaks very well for itself. Since I came
in in 2008, as I gave you the statistics, we have greatly--we
have trebled our investigations, which--and we have doubled the
number of investigators we had. But, yes, when all is said and
done, there should be a permanent IG.
Ms. Buerkle. And what advantages would there be if we had a
permanent IG?
Ambassador Geisel. I think it is what you said. Look, I
have to tell people to look at the Web site. I would love for a
permanent IG to say, ``Look at the Web site, and in accordance
with the law, our statutory Office of Inspector General is
headed by an independent official who was nominated by the
President and confirmed by the Senate.''
I would add one last thing and that is that I hope that
this time, as my great mentor at OIG was the IG who was
appointed by President Reagan, he was our first independent IG,
Sherman Funk, he had previously been the IG at Commerce, I hope
that whoever is nominated will not be someone who doesn't have
any idea how the Office of Inspector General works, I hope it
is somebody who has tremendous experience in the oversight
community.
Ms. Buerkle. Thank you. Ms. Franzel, on page 8 of your
prepared testimony, you detail the length of service by some of
the acting IGs, since January 2003. Could you explain the
significance of having seven acting IGs during this period of
time?
Ms. Franzel. Well, again, I think it just makes it very
difficult for continuity of oversight at the Department. Also,
with so many acting IGs, these acting IGs have been generally
appointed by the State Department. I mean, certainly not
appointed by the President and confirmed by the Senate as
envisioned by the IG Act. So there hasn't been good continuity.
Some people have stepped up to take on the job, which is
definitely necessary. But when you start looking at a time span
of 8 years, and 5 of those 8 years have been without a
permanent IG, and there have been so many different acting IGs,
and we certainly did see some operational breakdowns in the
State IG office back when we were reviewing the time period
that we were reviewing, and when we put out our 2007 report. So
it did have a very detrimental impact on the State IG office.
I think that a lot of actions have been taken to help
strengthen the office, but it is time to have a permanent IG
appointed by the President and confirmed by the Senate.
Ms. Buerkle. Thank you, Madam Chairman. I yield back.
Chairman Ros-Lehtinen. Thank you. If I could take the
remainder of your time, Ms. Buerkle, because I wanted to ask
Ms. Franzel if she could comment on Ms. Wilson's question,
which the Ambassador answered, but we didn't get to hear from
your point of view if you shared the Ambassador's enthusiasm
for the role of Foreign Service officers on the IG inspection
teams.
Ms. Franzel. Certainly. I would be happy to comment on
that. And certainly this has been emphasized over the years,
that in order to do these inspections in an effective manner
there is a need for ambassador-level management to go in and
head up these inspections. And if that is the case, I think it
is a good argument for moving some of the inspection function
into management, and then leaving some of the evaluation of the
effectiveness of inspections to the IG. So I think there is a
very compelling argument here for splitting out the function.
IG offices use inspections very effectively, but I think
that this is a rather unique requirement in that Section 209 of
the Foreign Service Act requires State IG to inspect every post
every 5 years. That requirement gets waived every year in the
appropriations act, but the IG office has to continue with this
work just in case in a subsequent year it is not going to get
waived.
So it is a tremendous workload, first of all. It does not
give the IG office the flexibility to really do risk
assessments and do a higher level analysis of the effectiveness
of inspections of posts. I do think inspections of these posts
is a very important function, and it probably should be headed
up with management officials, but then that really begs the
question of, where should that function be?
Should it be in an IG office where independence is expected
and demanded? Or should part of that be handed over to
management to do their own self-inspections and self-
assessments? It is a very common function for management to
review the effectiveness of its own policies and inspections of
policies and procedures through an internal inspection shop.
And then, the IG could review that shop and the effectiveness
of that as well as make recommendations going forward.
So I accept Ambassador Geisel's assertion that these folks
are absolutely necessary for the leadership. I do, however,
believe there are such significance structural threats with
doing that in an IG office that it is probably also time to
take a look at how this is functioning, and maybe relook at
that requirement in Section 209 of the Foreign Service Act.
Chairman Ros-Lehtinen. Yes, I agree with that. Thank you.
Mr. Connolly of Virginia is recognized.
Mr. Connolly. Thank you, Madam Chairman. And welcome to the
panel. A couple of months ago on a party line vote Congress--
the House of Representatives passed H.R. 1, the Continuing
Resolution for the balance of the fiscal year, which I
personally believe is one of the most radical documents passed
by Congress in living memory. I think we considered almost 600
amendments, and we defunded everything from Planned Parenthood
to cutting Head Start, one of the most effective preschool
programs in the country, Public Broadcasting, on and on.
But one of the cuts involved the function--150 function of
the government, including I believe, Ambassador Geisel, the OIG
office. Have you looked at the potential impact of those cuts
if in fact they became law, and what they would do to your
ability to function and carry out your mission?
Ambassador Geisel. Yes, sir, we have. Frankly, in the very
short run, we could carry on. But overall we would have to
start cutting back on our oversight, and, fair enough, we can
do that, but of course OIGs usually pay for themselves quite a
few times over if they are any good. That is what oversight
organizations are supposed to do.
So in the end, I think by cutting back on oversight, it
might cost more money than was saved by the number of people
who were cut.
Mr. Connolly. Well, it does seem a passingly odd thing. If
we say we are concerned about waste, fraud, and abuse in the
government, in the public sector, we would cut the very
function that is charged with ferreting out what----
Chairman Ros-Lehtinen. If the gentleman would yield. You do
understand the contention of the chair that I believe that the
OIG has not been doing a good job. So to throw more money at
that office, in the way that it is currently structured, does
not resolve any issues whatsoever.
The gentleman can continue to make his point, but my point
is they are not doing the job they are supposed to do. But the
gentleman can continue.
Mr. Connolly. As the chairman knows, I respect her
enormously, but I respectfully disagree with her on this
matter.
Ms. Franzel, you were shaking your head in the affirmative.
Would you care to comment?
Ms. Franzel. Yes, and I am going to comment on oversight
activities in general. It is very dangerous to start cutting
back on oversight activities--GAO, IGs, and others--simply
because our function is to help identify cost savings for the
government, assist the Congress, and report on fraud, waste,
and abuse.
Last year, for every dollar spent on GAO expenses, we
brought back $87, so we saved $87 for every $1 we spent. I
don't think you want to start cutting back on those types of
returns. And to the extent that we can make oversight in the IG
community and other offices more effective, those types of
numbers get even greater. So it becomes very difficult, and the
effects are seen longer term because, yes, we can all survive
in the short term, but when you start cutting back on oversight
activities today, problems can erupt later.
Mr. Connolly. Well, does GAO believe that OIG is doing a
bad job?
Ms. Franzel. Well, as we discussed throughout the hearing,
there have been some very difficult issues and problems at OIG,
and we reported on those in 2007. There have been some positive
activities to strengthen the audit function, which we see as
positive and we are hoping for continual assessments to measure
the effectiveness of those actions. They are not there yet, but
we see some increases in audit oversight.
There still remains a problem with trying to figure out the
proper mix of resources dedicated to inspections. The use of
ambassador-level officials to lead inspections seems to
indicate that perhaps this is a function that is a management
function rather than an IG function, and that is something that
we need to sort out. And it just doesn't seem properly placed
in the IG office, because of the expectation for independence.
Mr. Connolly. Real quickly, you gave us a metric that for
every dollar we invest in GAO, we reap a return of $87 saved in
some fashion. What is the comparable metric, or do you know it,
for OIG?
Ambassador Geisel. I believe the number that we use is $14,
but I am very, very reluctant to throw out figures. This is one
of the problems I have with the oversight community is
sometimes people claim savings that are not really savings, or
that could be in theory but that don't pan out in reality. But
I----
Mr. Connolly. Well, Mr. Ambassador, my time is up. I know
the chairman will indulge me for 5 more seconds, because of
her--I have to say to you, if you are that reluctant, then you
are going to face a 17 percent budget cut. You might want to
get a lot less reluctant.
My time is up. Thank you, Madam Chairman.
Chairman Ros-Lehtinen. I took up your time, Mr. Connolly.
So if you would like more time----
Mr. Connolly. No, I think we have had our say. Thank you,
Madam Chairman.
Chairman Ros-Lehtinen. Okay. Thank you so much.
Mr. Sherman of California.
Mr. Sherman. Thank you. USAID had some reluctance to--the
way I describe it--put the flag on the bag. That is to say,
make it extremely clear to the recipients of U.S. aid that it
was American aid. They wanted to make sure that they would feed
people, even those who wouldn't want to eat the food if it was
ours, or those who wouldn't want to distribute it if it was
ours.
How good a job are we doing making sure that everyone who
distributes or receives U.S. aid knows that it is aid from the
American people? Ambassador?
Ambassador Geisel. I would have to defer to the USAID IG,
although I absolutely share your sentiments of course, sir.
Mr. Sherman. Okay. Perhaps we could arrange to put that
question to them, because there was such bureaucratic
reluctance. How is the U.S. Government doing on following Buy
America principles?
Ambassador Geisel. From the point of view of the State
Department, very well. And I note that especially for the large
contracts it is good. There are of course many circumstances,
especially in combat zones, where we can't always buy American,
but, yes, I----
Mr. Sherman. Buy American principles are not Buy America,
you know, straitjackets. I thank you for your reassurance on
that.
The next issue relates to those who grant visas abroad.
This is absolutely unchecked ad hoc power without any
accountability. And I would ask you, what are the statistics
on, when they let somebody in the United States, does that
person leave in accordance with their visas? But I know you
can't give me those statistics because the bureaucracy hates
the concept of ever generating those statistics.
So when you leave Disneyland, they know you have left. But
when you leave the United States, somehow we can't figure out a
way to swipe your barcode. Is there any system by which visa
officers are evaluated in terms of, are they being too tough?
Are they being reasonable? Do most of the folks return
according to their terms of your visa? Is there any process for
evaluating those who grant visas?
Ambassador Geisel. Yes, there is. But as you pointed out,
it is not adequate, because we are dependent on statistics
generated by the Department of Homeland Security.
Mr. Sherman. Or in this case not generated by the
Department of Homeland Security.
Ambassador Geisel. I can't comment. I can smile.
Mr. Sherman. Thank you for your smile, which will be part
of the record, and I yield back. [Laughter.]
Chairman Ros-Lehtinen. Let the record note that the
gentleman had smiled.
Mr. Rivera of Florida.
Mr. Rivera. Thank you very much, Madam Chairman. Thank you
for being here today.
I will start with Ms. Franzel, and I would like to ask how
the GAO would characterize the IG's audit coverage of high risk
oversight areas.
Ms. Franzel. In our 2007 review, we found some significant
gaps, which concerned us, frankly. There were a lot of very
important areas of State Department that were not being covered
by audits of the State IG. We made a recommendation that they
reassess the mix of audits and inspections.
At the time, State Department IG disagreed with that
recommendation, but since then some steps have been taken to
increase the audit practice. We are still looking at a fairly
light mix of audits to inspections, but it has improved. In
2009 and 2010, we were still seeing gaps in audit coverage in
areas like coordinating foreign assistance, public diplomacy,
and human resources.
Now, in the Fiscal Year 2011 audit plan, we are seeing some
audits come online in these areas. So I think this is an area
to watch. There is still a tremendous amount of inspections
going on. Part of it is because of the requirement that foreign
posts be inspected every 5 years, but that requirement gets
waived every year.
But there still is a tremendous reliance on inspections in
the Department, and inspections in and of themselves are not a
bad thing. In fact, they are a very useful tool that IGs can
use to quickly go out and survey a situation. But they should
not be used to the exclusion of audits.
Mr. Rivera. Thank you very much. And a question to
Ambassador Geisel, according to the project on government
oversight, Ambassador, you recused yourself from an IG
investigation of a contract award involving Undersecretary of
State for Management Patrick Kennedy. Your recusal was
apparently due to a perceived conflict of interest between
yourself and Mr. Kennedy. What is the extent of your
relationship with Undersecretary Kennedy that you elected to
recuse yourself from this investigation?
Ambassador Geisel. I recused myself for approximately 3
weeks in what I would describe as an abundance of caution. I
was very new to the job, and I was very keen to see--to have it
seen that we were very independent.
The fact is, it is the first time in my life that I have
been criticized for recusing myself, which I always thought was
doing the right thing. Be that as it may, I have known Mr.
Kennedy for a very long time. I can't say that we were--we are
friends. In this 30-some-odd years that I knew him, he has
never been in my home, and I was only in his home once for the
wake when his father passed away. But I was being very, very
cautious. But I can't say we were friends.
And I think our work speaks for itself. Before I came,
there were zero--we are talking about the heavy stuff now,
because this was an investigation that I recused myself for 3
weeks from.
We have vastly--we have trebled the number of
investigations since I came on board. The number of subpoenas
we have issued went from zero before I was there to 25. So,
yes, I am glad you asked the question, but I feel very
confident that I did the right thing, and that my recusal for
that limited period of time was done in an abundance of caution
to ensure our good name.
Mr. Rivera. And making sure, in terms of following up on
the issue of abundance of caution, does the relationship
prevent you from carrying out duties going forward?
Ambassador Geisel. None whatsoever, and, again, I would
refer you to all of the reports that we submit to the
committee. We try to be fair, and I like to say that I am the
Department's best friend, because I tell the Department what it
needs to hear, not what it wants to hear.
And so the fact is we have had no problem at all. I rarely
see Mr. Kennedy, although when I need to speak to him I do.
Mr. Rivera. Thank you.
Thank you, Madam Chair.
Chairman Ros-Lehtinen. Thank you so much. I thank the
witnesses and the members. In closing, I would like to request
that GAO provide the committee with the possible legislative
ideas for addressing the issues raised by your testimony as Ms.
Franzel mentioned earlier.
Mr. Rohrabacher. Madam Chairman?
Chairman Ros-Lehtinen. We would appreciate that. Mr.
Rohrabacher.
Mr. Rohrabacher. Would you indulge me one more question?
Chairman Ros-Lehtinen. I love to indulge you.
Mr. Rohrabacher. The----
Chairman Ros-Lehtinen. Indulge others as well, if they
would like.
Mr. Rohrabacher. Quite often we have these construction
programs and chaotic situations and such, and we are--and our
people are instructed to hire locals, as many locals as you
can, rather than having American companies come in and actually
do the work themselves.
Now, the Chinese have a totally different approach to
providing someone some assistance. They bring their own people
in and build the bridge themselves, and they--or the building,
and, thus, they are--the Chinese are accountable all the way to
the finished product, where we of course contract with local
people and try to give people local jobs.
What is your opinion on that in terms of the--one does lend
itself to more corruption--our system--but maybe helps the
local economy. How do we judge this?
Ambassador Geisel. I am the right person to ask, because I
negotiated the conditions of construction agreement between us
and China, where we built our Embassy in China and they built
their new Embassy in Washington. The answer is, if you give us
enough bucks, we absolutely and positively should do it the way
the Chinese do it.
But we are talking about huge amounts of money if it is
going to be all Americans. But the reason that it should be all
Americans, if we can afford it, is we will have much better
security, which is why the Chinese do what they do.
Mr. Rohrabacher. Right. And less corruption.
Ambassador Geisel. Less corruption. But you have got to
give us the bucks.
Mr. Rohrabacher. Thank you very much, Madam Chairman.
Chairman Ros-Lehtinen. Thank you. Would any member like to
be recognized before I recognize Mr. Chabot, who is our last
member?
[No response.]
Thank you. Mr. Chabot is recognized.
Mr. Chabot. Thank you. I look forward to reading the
testimony of the witnesses. I appreciate it very much. Thank
you for holding this hearing. I had about eight things I just
got finished doing and wanted to make the hearing here, but
thank you very much for holding this, and I definitely will
review your testimony.
Chairman Ros-Lehtinen. Thank you very much, and I thank the
members for coming. I thank the panelists and the audience as
well. And the committee is now adjourned.
[Whereupon, at 11:29 a.m., the committee was adjourned.]
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