The Center for Public Integrity

When victims of Hurricane Katrina said goodbye to their homes in 2005, they didn’t realize their health might be next. A 2008 examination by the House Committee on Oversight and Government Reform found that thousands of trailers purchased by the Federal Emergency Management Agency (FEMA) for those displaced by Katrina emitted levels of formaldehyde high enough to cause coughing, chest tightness, nausea, skin rashes, and other adverse effects. The thousands of American families forced into these temporary homes were being exposed to what the Occupational Safety and Health Administration calls “a suspected human carcinogen that is linked to nasal cancer and lung cancer.” And according to the committee chairman, California Democrat Henry Waxman, field staff alerted FEMA to the problem, but the agency refused to conduct tests.

A FEMA attorney instructed: “Do not initiate any testing. . . . Once you get results and should they indicate some problem, the clock is running on our duty to respond.” FEMA officials feared that authorizing testing would shift the burden of responsibility to the agency itself, according to the oversight committee. Gulf Stream Coach Inc. won $500 million alone in FEMA contracts within days of the storm and quickly began work on 50,000 trailer homes using low quality engineered-wood products manufactured with formaldehyde, according to published reports. One trailer resident informed Gulf Stream by e-mail in March 2006: “It burns my eyes and I am getting headaches every day. I have tried many things, but nothing seems to work.” In response to a request for comment, a FEMA spokeswoman sent a statement that read, “FEMA neither knowingly, nor willingly, purchased manufactured units from dealerships and manufacturers that contained levels of formaldehyde above existing construction standards, nor did FEMA’s specifications encourage non-compliance with such standards.”

Keeping weapons of mass destruction (WMD) out of the hands of terrorists is cited as the top priority for America’s national security, but efforts to prevent WMD proliferation have not met the challenge, according to government and nonprofit watchdogs. The 9/11 Commission wrote that “the greatest danger of another catastrophic attack in the United States will materialize if the world’s most dangerous terrorists acquire the world’s most dangerous weapons.” In 2005, in a follow-up progress report, WMD nonproliferation programs scored a “D” on the report card released by the 9/11 Public Discourse Project, led by 9/11 Commission chairs Thomas H. Kean and Lee Hamilton. “Preventing terrorists from gaining access to weapons of mass destruction must be elevated above all other problems of national security because it represents the greatest threat to the American people,” the report warned. In 2008, the Partnership for a Secure America, a bipartisan national security group supported by the 9/11 Commission leaders, followed up on the work of the Public Discourse Project. The partnership’s overall grade for “WMD Terror Prevention” was a “C.” The weakest spots in WMD prevention, according to the report: integration of U.S. programs to prevent nuclear terrorism and the uncertain long-term prospects for those programs; U.S. efforts to recognize chemical threats; detection of covert bioterrorism preparations and U.S. disengagement from the international Biological Weapons Convention. As part of its package implementing the 9/11 Commission recommendations, Congress created a senior White House position with the title coordinator for the prevention of weapons of mass destruction proliferation and terrorism. But the Bush administration has yet to appoint someone to the position. Experts say that the threat of terrorists obtaining WMD is very real.

American weaponry intended for Iraqi security forces may have ended up in the hands of insurgents attacking U.S. troops in Iraq, due largely to oversights at the Department of Defense (DOD), according to government auditors. At least 190,000 AK-47 assault rifles and pistols disappeared between 2004 and 2005, some 30 percent of all weapons the United States distributed to Iraqi forces during that time, reported the Government Accountability Office (GAO) in an August 2007 study. While security assistance programs are traditionally operated by the State Department, the Pentagon — as it has in operations throughout the Iraq war— asserted control of the program early on, saying that it could provide greater flexibility. Until December 2005, neither the Pentagon nor Multinational Force-Iraq maintained any central record of equipment distributed during Iraqi security force training (then led by General David Petraeus). The GAO also found that 135,000 pieces of body armor and 115,000 helmets went missing during that time. A subsequent New York Times investigation found that Kassim al-Saffar, an Iraqi businessman Americans entrusted to supply Iraqi police cadets, turned the U.S. armory into a “private arms bazaar” selling weapons to anyone with cash in hand — meaning more U.S. resources wasted in Iraq and greater danger for American troops serving there.

Follow-up:
The DOD reports that it has developed various procedures to address the GAO’s concerns, including soldier-by-soldier collection of biometric data linked to serialized weapons, and weapons inventories conducted by the Multi-National Security Training Command and Iraq Ministries of Defense and Interior. In July 2008, the DOD’s inspector general completed a follow-up report that noted significant improvements in the weapons tracking systems. In the coming months, the GAO also plans to release a follow-up report on missing weapons in Afghanistan.

An eye-opening series of reports in fall 2008 by the Department of the Interior’s inspector general disclosed a stunning level of corruption at the Minerals Management Service (MMS), and a coziness with industry officials that included a “culture of substance abuse and promiscuity” at the agency. MMS is responsible for collecting royalties from companies for the right to produce oil and gas from federally controlled land and water; in 2007, MMS collected more than $9 billion in oil and gas royalties, making it one of the largest sources of income for the United States government. The agency also runs the Royalty-in-Kind program out of its Denver office, through which it takes delivery of oil and gas from energy firms in lieu of cash payments, and then sells it to refiners. The inspector general concluded that officials in the MMS Royalty-in-Kind program “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.” The IG said that one-third of Royalty-in-Kind officials were taking bribes and gifts, and noted that former MMS officials received contracts from their friends still in the department. Out of 718 bid packages awarded by MMS between 2001 and 2006, 121 were modified by the agency — and all but three of the modifications benefited the oil companies. The inspector general said that these relationships have cost taxpayers $4.4 million in lapsed collection fees, but due to the sloppy administration at MMS, the real cost may go undiscovered. In a separate report, the Government Accountability Office (GAO) found that MMS is plagued by inefficiency in collecting royalties, and that there is no way to backtrack and figure out how much has actually been lost.

More than five years after its creation, the Department of Homeland Security (DHS) still suffers from a host of growing pains — growing pains that have attracted scrutiny from a variety of watchdog groups. Cobbled together in 2003 from 22 disparate agencies, the sprawling department oversees a budget that is creeping toward $50 billion. From the inception of DHS, the Government Accountability Office (GAO) categorized its implementation and transformation as a “high risk” item. “It represented an enormous undertaking that would require time to achieve in an effective and efficient manner,” then-Comptroller General David M. Walker told Congress in February 2008, adding that a successful transformation can take five to seven years. DHS has not exactly earned straight A’s, either. Despite repeated promptings from the GAO, the department had not created a comprehensive transformation strategy by its fifth birthday and has struggled to prioritize the most pressing risks to the country’s safety, both when allocating grants to state and local partners and when planning internal strategies. In its first two years, the department came under fire for its bureaucratic torpor, and as one of his first acts after taking office in 2005, Secretary Michael Chertoff commissioned a study that led to a departmental reorganization later that year. Although the department’s operations have improved in recent years, “DHS has made more progress in its mission areas than in its management areas,” Walker noted in his February testimony. In 2008, reports from the Center for Strategic and International Studies, the GAO, and the DHS inspector general shared concerns about several areas, including: contractor oversight, information technology, financial management, transportation security, and emergency preparedness. The GAO recently included “protecting the homeland” as one of 13 “urgent issues” requiring the attention of President-Elect Obama and the 111th Congress.

When the National Transportation Safety Board (NTSB) issued its original “Most Wanted” list of proposed safety improvements in September 1990, combating the role of human fatigue in transportation mishaps was included. Since then, not a lot has happened. So when the NTSB released its most recent “Most Wanted” list in 2008, human fatigue was still there. ”Human fatigue has been a persistent factor in far too many transportation accidents,” said NTSB Acting Chairman Mark V. Rosenker in September 2008. “And, if anything, the problem is growing, not shrinking.” The main target of NTSB scrutiny, the Federal Aviation Administration (FAA), continues to provide what the 2007 “Most Wanted” list called an “unacceptable response” to the problem. In 1995, the FAA proposed a rule to update the flight and duty regulations for airline pilots, but no action has been taken. Likewise, the FAA recognized as a result of its own 2000 study that a quarter of airline maintenance personnel were fatigued or exhausted at work, but nothing has happened on that front either. The NTSB cites accidents such as Corporate Airlines Flight 5966, which killed 13 people near Kirksville, Missouri, in 2004, in arguing that measures to reduce fatigue are “long overdue.” For decades the NTSB has also pushed other components of the Department of Transportation (DOT) to act on fatigue. For instance, the NTSB urged the DOT to consider mandating the use of on-board recorders in the trucking industry to enforce compliance with hours-of-service rules and reduce fatigue-related accidents — such as a 2005 I-94 Wisconsin crash that killed five and injured 35 others. The DOT responded through its Federal Motor Carrier Safety Administration (FMCSA), which proposed a rule be imposed only on carriers with a pattern of violation. NTSB believes the proposed rule, still pending, does not go far enough, but FMCSA said that the estimated costs imposed by a broader mandate would exceed its benefits.

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.

With the growth of global capital, rising numbers of U.S. corporations are offshoring their revenue to hide from the taxman, and for the past eight years, the Bush administration has taken scant action to stem that tide. While corporations use many tactics, the basic principle involves shuffling their U.S. profits or activities through any number of overseas subsidiaries or shell companies — some which consist of little more than a mail slot in a low-tax foreign locale. From 1999 to 2003 alone, for example, the profits reported by foreign subsidiaries of U.S. multinational companies soared by 68 percent, an increase not accompanied by any gain in real economic activity in popular tax havens. Yet the ability of the Internal Revenue Service (IRS) to provide oversight of these practices has failed to keep pace with their growth. While in the mid-1990s, the IRS had a $4.43 billion enforcement budget, by 2006, that budget had risen by less than five percent, even as the size of the economy grew nearly eight times that amount. The IRS has also reduced audits of offshore taxpayers, which take an average two-and-a-half years to complete (the deadline for completion of an audit is three years). Today, according to Congress, the use of offshore tax abuses costs the U.S. government over $100 billion in lost revenue a year. That’s nearly three times the annual budget of the Department of Homeland Security. Even the nation’s top Iraq war contractor, Kellogg Brown & Root (a former Halliburton subsidiary), was able to avoid paying hundreds of millions in Medicare and Social Security taxes for years — all while receiving $16 billion in plum contracts.

The White House sanctioned the use of harsh interrogation techniques on detainees, such as simulated drowning, based on legal reasoning it later rescinded; even many within the administration felt the techniques amounted to torture. At the outset of President George W. Bush’s “global war on terror,” lawyers in the Department of Justice (DOJ)’s Office of Legal Counsel (OLC) produced legal guidance that enabled the Central Intelligence Agency (CIA) to use the techniques on terrorism suspects. On August 1, 2002, the OLC provided a now-infamous “torture memo” to Alberto Gonzales, who was then counsel to the president. “We conclude that for an act to constitute torture . . . it must inflict pain that is difficult to endure,” reads the memo, which was written at the request of the CIA. Physical pain must be equal to the pain of “organ failure, impairment of bodily function, or even death.” The OLC later extended similar advice to the Department of Defense. According to reports by news media and human rights organizations, U.S. interrogators used techniques that included: depriving detainees of clothing, food, light, warmth, and sleep; slapping them on the face and torso; and waterboarding, a technique that simulates drowning.

Veterans enrolled in the U.S. Department of Veterans Affairs (VA) health care programs have long complained of receiving inadequate treatment at poorly funded facilities. According to a 2003 Government Accountability Office (GAO) report, veterans were forced to travel long distances to receive care — about 25 percent of the vets lived more than a 60-minute drive from a VA hospital. They also had to endure long waits for appointments, especially in regions like Florida, home to a large number of aging veterans. Nursing homes for veterans were notoriously understaffed, making it difficult to keep up with the increasing population of older vets who need care. But the strains imposed by new veterans returning from Iraq and Afghanistan exposed a whole new litany of problems for the VA and the military. Citizens and lawmakers were outraged after The Washington Post exposed dismal conditions for veterans at the Walter Reed Army Medical Center in 2007. Several high-ranking Defense Department officials were fired or stepped down under pressure, and stories soon emerged about other medical facilities where veterans were placed in rooms teeming with fruit flies, slept on broken hospital beds or faced unprofessional staff. A subsequent investigation of 1,400 hospitals and other facilities for vets found more than 1,000 incidents of substandard conditions. The VA has also struggled to deal with the many young veterans complaining of mental health problems, especially post-traumatic stress disorder (PTSD). Treatment for PTSD was found to be inadequate in 2005, when only half of VA medical centers had a PTSD clinical team. Congressional testimony indicated that VA examiners felt pressure to conduct exams of veterans in as little as 20 minutes. The larger problem is that the VA’s patient workload has nearly doubled in the past 10 years; there are now 7.8 million enrollees in the VA health system.