Despite the passage of new laws designed to protect them, whistleblowers have found themselves largely unprotected during the Bush administration. Six years ago, the Public Company Accounting Reform and Investor Protection Act of 2002, also known as the Sarbanes-Oxley corporate governance act, was passed in response to the Enron and WorldCom scandals. Provisions in the law made it illegal for publicly-traded companies to retaliate against “any other office, employee, contractor, subcontractor, or agent” of a company for acting as a whistleblower. Despite these strong provisions, the Department of Labor has ruled in favor of whistleblowers who claimed to be retaliated against only 17 times out of 1,273 complaints that were filed between 2002 and September 2008. Of those, 841 cases were dismissed, many on the technicality that the whistleblowers work for subsidiaries of the companies, not the main companies themselves. The Labor Department has argued that the statute does not cover employees of those subsidiaries. Senator Patrick Leahy, a Vermont Democrat, and Senator Charles Grassley, an Iowa Republican, who together drafted the protections, counter that there is no basis for this reading of the law. It is not just corporate whistleblowers who are not receiving the protection they expect; federal whistleblowers also find themselves without cover. In June 2008 a coalition of 112 independent groups urged the Senate and House to pass a new bill increasing whistleblower protection for federal employees. This call came after only two of 53 whistleblowers who brought cases to the Merit System Protection Board during the first three months of 2008 were victorious.

Follow-up:
On September 10, 2008, Senators Leahy and Grassley sent a letter to Secretary of Labor Elaine Chao accusing her department of violating the “spirit and goals” of the corporate whistleblower provisions from the Sarbanes-Oxley act. In a statement, the agency replied that they are “confident we are correctly enforcing the statute, and do not believe the text of Sarbanes-Oxley as written supports the broader reading that employees of subsidiaries are automatically covered.”

Photo: U.S. Senator Chuck Grassley. Photo credit: U.S. Senate

The Federal Labor Relations Authority (FLRA), the agency responsible for ruling in federal employee labor disputes, has been swamped by a backlog of cases arising from low morale and lack of staffing. In 2007, the agency ranked dead last in the Partnership for Public Service’s listing of the “Best Places to Work” among small government agencies. An independent agency led by three full-time members appointed by the president, the FLRA is responsible not only for setting policies on federal labor-management relations, but also resolving disputes among federal agencies and unions who represent 1.9 million federal employees. The agency’s inspector general (IG) has consistently found issues with staffing levels and management practices, including unresponsive to issues raised by the IG. In its most recent report, issued in April 2008, the IG found that a backlog of 175 issues and suggestions dating back to 1998 were not acted on until January 2008. The FLRA’s case-writing staff is down to half of what it was five years ago. Carol Pope, one of the members of the FLRA's three-person governing board, referred to the agency’s “human capital issue” as a “crisis.” Adding to the troubles, in 2008 the board was forced to stop work when it suddenly found itself down to one member after the chair stepped down — denying it the quorum required to make any decisions. Because of this, a backlog of over 400 cases was reported in October 2008. At the same time, the agency lacks a general counsel and so the FLRA has also been unable to issue any rulings on unfair labor practices. Newly-confirmed Chairman Thomas Beck told the Center that he was aware of the agency’s problems and that he has both short-term and long-term plans for increasing staff numbers and morale.

Follow-up:
In October 2008, the Senate confirmed Carol Pope and new Chairman Thomas Beck to the FLRA, enabling the Authority to have the necessary members for a quorum. Both members have stated that they want to get the agency back on track; as of the end of November, they had voted on 18 cases, and Beck has said they are reviewing the backlog of cases. President Bush nominated Chad Bungard, the Merit Systems Protection Board’s general counsel, for the role of general counsel, but there has been no Senate movement on his nomination.

Since the invasion of Afghanistan, the Pentagon’s escalating use of outside contractors has coincided with a decrease in oversight, endangering the well-being of American troops serving there and in Iraq. The Department of Defense (DOD) has suffered a “complete breakdown in the procurement process” during the past seven years, according to Representative Henry Waxman, a California Democrat and chairman of the Committee on Oversight and Government Reform, echoing the findings of the Center for Public Integrity’s Windfalls of War and Windfalls of War II projects. Examples abound of companies providing substandard supplies to American forces, such as when Kellogg Brown & Root (KBR), the largest contractor in Iraq, provided contaminated water to 5,000 U.S. troops in 2005 and when Halliburton, then KBR’s parent company, engaged in overcharges and questionable costs of $212.3 million for oil reconstruction work, as reported by DOD auditors. In July 2008, the Pentagon revealed that 16 Americans had died of accidental electrocution in Iraq, some tied to faulty wiring at facilities run by U.S. contractors. Among the problems cited by former electricians: inexperienced employees, including foreign electricians who did not speak English. Another problem plaguing U.S. contractors have been fires — 283 of them over just five months at facilities maintained by KBR, according to a 2007 report by the Defense Contract Management Agency. The most glaring case of poor oversight may be AEY Inc., which was awarded a nearly $300 million contract to supply ammunition for Afghanistan’s army and police. In a case that Representative Tom Davis, a Virginia Republican, said speaks “volumes about what's wrong with the military contracting process today,” AEY was allegedly run out of an unmarked office in Miami Beach by a 22-year-old; much of the ammunition he sold were reportedly old rounds shipped from Albania that were considered so unstable that NATO and the United States spent millions of dollars to destroy the stockpiles. These, prosecutors charge, included $10 million worth of rounds manufactured in China in the 1960s; the selling of Chinese ammunition is a breach of U.S. law. All this allegedly happened despite AEY being on a State Department watch list since 2005.

Follow-up:
Despite congressional oversight investigations, contracting in Iraq continues to be an ongoing problem. The heads of AEY were indicted by a grand jury in July on a variety of fraud charges; they have pleaded not guilty. On its list of urgent policy concerns for the next administration, the Government Accountability Office included “undisciplined defense spending.” However, changes may be coming. Testifying in front of Congress in June, Brigadier General William N. Phillips stated that the Army is implementing a series of recommendations from the Commission on Army Acquisition and Program Management in Expeditionary Operations, as a “longer-term resolution of contracting issues.” In November, the Pentagon’s Defense Contract Management Agency issued a “Level III Corrective Action Request,” one step below a suspension or termination of a contract, to KBR in response to the electrocution deaths in Iraq.

Photo credit: Department of Justice

Like any large business, the U.S. government suffers from personnel problems and employs human assets who are not fully utilized; unlike a business, however, the government’s human capital problem impacts citizens across the country, both in the delivery of services and in how efficiently taxpayer money is spent. In 2001, the Government Accountability Office (GAO) added “Strategic Human Capital Management” to its list of high-risk areas. Despite some progress, the human capital problem has remained on the high-risk list for the past seven years. Among the problems: a lack of long term planning for top management positions vital to ensuring consistency — the Health Care Finance Administration that runs Medicare, for example, had 19 different administrators between 1977 and 2001 — and the absence of a “results-oriented” culture, leaving a bureaucracy in which the there is no incentive to do good work. The problem is not limited to one department, but affects the entire spectrum of government agencies, according to federal auditors. The original GAO report warned that the situation is creating a “government-wide risk” that endangers the “federal government’s ability to effectively serve the American people, ” and that officials have “often acted as if people were costs to be cut rather than assets to be valued.”

Follow-up:
Since the 2001 GAO report, reforms have helped alter the way agencies manage their human capital. Agencies continue to struggle with meeting higher standards called for by the GAO and the Office of Personnel Management. The newest GAO High-Risk Areas report, due out in January 2009, will evaluate whether the government-wide human capital problem has improved during the last two years.

A dramatic increase in the contracting of government services has resulted in a litany of problems, ranging from cost overruns and missed deadlines to a lack of oversight, according to the Government Accountability Office (GAO). From 2001 to 2005, the number of federal contractor jobs surged by 72 percent, increasing from 4.4 million to 7.6 million. Spending on contractors nearly doubled from FY 2001 to FY 2006, jumping from $234.8 billion to $415 billion The GAO has issued a series of reports identifying problems associated with the rise in outsourcing. Among the issues: “separating wants from needs; executing acquisition programs within available funding and established timeframes; using sound contracting arrangements with appropriate incentives and effective oversight; assuring that contractors are used only in appropriate circumstances and play proper roles; and sustaining a capable and accountable acquisition workforce ” GAO auditors found that interagency contracting was a “high-risk area” for outsourcing, as were the Department of Energy, Department of Defense, and the National Aeronautics and Space Administration. The agency also cited concerns about the Centers for Disease Control and Prevention, which now contracts out one-third of its workforce. Lack of competition is another problem. The Department of the Interior’s inspector general found that more than a quarter of the agency’s $380 billion in contracts were awarded without competition.

Follow-up:
The newest GAO High-Risk Areas report, due out in January 2009, will determine whether the government’s contracting problems have improved during the last two years. The GAO reports that in FY 2007, Washington spent $450 billion on contracting goods and services. The Federal Procurement Data System (FPDS), which tracks contract spending for the U.S. government, has not released its own figures for that year. Ironically, FPDS itself began contracting out the handling of its data in 2003.

A backlog in cases and increasing delays in processing investigations have plagued the Equal Employment Opportunity Commission (EEOC) as a result of funding challenges and organizational issues during the Bush administration. The EEOC is charged with assisting people who claim they’ve suffered discrimination; the agency enforces the Equal Pay Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and relevant sections of the Civil Rights Act and the Rehabilitation Act. Cari M. Dominguez, confirmed as chair in 2001, received solid reviews from the Congressional Black Caucus, but many accounts noted a chronic paucity of funds. The Bush administration instituted a hiring freeze in 2001 and kept budget requests for EEOC modest, even while the number of complaints increased. Dominguez attempted to streamline the agency, but one of her initiatives — having most inquiries handled by a privately-staffed call center — proved especially controversial. Gabrielle Martin, president of the National Council of EEOC Locals 216, charged that calls were being handled by untrained professionals and were of “very poor quality.” A restructuring of offices in the field also drew complaints that some offices were given broader jurisdiction but less power. Many of the agency’s problems were rooted in budget constrains: The $329 million requested for the agency in fiscal year 2009 is 9 percent higher than what was provided in 2001. Critics charged that wasn’t enough to support the agency’s workload. EEOC had 2,158 employees at the end of 2007, down 22 percent from 2002. The number of investigators dropped from 857 in 2000 to 565 in 2007. The average time for an investigation to be completed went from 160 days in 2003 to 206 days in 2008. The backlog of cases increased 38 percent between 2005 and 2007.

Follow-up:
Cari Dominguez stepped down in 2006 and was replaced by Naomi Earp. In 2007, the EEOC voted to close the call center and began the process of hiring new staff to handle inquiries. Calls and e-mails are now directly routed to EEOC field officers, which has pleased the union. The EEOC hopes that a proposed 4 percent budget hike for fiscal year 2009 will allow hiring of 175 new staffers, which the commission says will allow it to “address our growing case inventory to provide timely, efficient customer service to the public.” An EEOC spokesman told the Center that “the Commission is doing the best it can with the resources available during these challenging times.”