The Center for Public Integrity

In 1973, when President Richard Nixon said, “Our independence will depend on maintaining and achieving self-sufficiency in energy,” the United States imported 34.8 percent of its oil from foreign countries. In 1979, when President Jimmy Carter said the country will “never again use more foreign oil than we did in 1977,” imports were up to 45 percent of the nation’s oil supply. Dependence on foreign oil did indeed fall during a few economically troubled years when smaller, foreign-built cars gained popularity and American manufacturers reduced the weight of their vehicles. But that began to change when oil prices dropped in the mid-1980s, and by 1990, when President George H.W. Bush talked of the need to reverse “excessive dependence on foreign oil” at the dawn of the first Persian Gulf War, the United States was importing 42.2 percent of its oil. By the time his son ran for office, sport utility vehicles ruled the roads and 52.9 percent of the nation’s petroleum came from overseas. By 2006, when President Bush declared in his State of the Union that the nation was addicted to oil, foreign countries were delivering 59.9 percent of the fix. Geology has dealt the United States a bad hand if it hopes to achieve energy independence while continuing to rely heavily on oil. America’s old fields are tapped out; U.S. oil production has been in an inexorable decline since its peak in 1971. The government has pushed for the oil industry to squeeze out more domestic supply. Federal subsidies approved by Congress in 1995 encouraged a boom in oil drilling in the deep waters of the Gulf of Mexico. And the Bush administration’s Department of the Interior streamlined the process for drilling on federal lands, nearly doubling the number of permits approved each year. Nonetheless, U.S. oil production plummeted 22 percent over the past 10 years to about the same level that the nation’s oil fields were producing in 1947.

The government’s ability to protect critical technology in the hands of the private sector has been repeatedly called into question, most prominently by the Government Accountability Office (GAO); in fact, the government’s performance in this area has been designated “high risk” by the GAO since 2007. “The technologies that underpin U.S. military and economic strength continue to be targets for theft, espionage, reverse engineering, and illegal export,” the GAO has warned. Among the problems the agency highlighted: inefficient programs, poor interagency coordination, and decades-old programs ill-equipped to weigh competing U.S. interests in the 21st Century. The various programs cover everything from monitoring arms exports to vetting foreign takeovers of U.S. firms whose work has national security implications. Part of the problem is rooted in the fact that these protection responsibilities are scattered across various agencies in the State, Defense, and Commerce departments. The Department of Defense (DOD)’s Defense Security Service, which oversees contractors across most of the government, was “broken across the board” when Director Kathleen Watson took over in 2006, according to Watson’s testimony before Congress in April 2008. And the situation hasn’t fared much better elsewhere; the GAO reported in 2008 that both the State Department and the Department of Commerce “have not managed their respective export licensing processes to ensure their effective operations.” In 2007, defense contractor ITT pled guilty to illegally sending classified military information to other countries — China among them — and agreed to pay a $100 million penalty. It was “the first conviction of a major defense contractor for a violation of the Arms Export Control Act,” according to a statement by then-U.S. attorney John Brownlee in Roanoke, Virginia.

“Prior to 9/11, the Federal Bureau of Investigation (FBI) did not have an adequate ability to know what it knew,” said a statement from the staff of the 9/11 Commission. The commission faulted the FBI and other agencies for failing to “connect the dots” in a way that might have uncovered the 9/11 plot; the “dots” referred to suspicious activities by the hijackers that had been uncovered, in some cases, by the bureau’s field offices. Yet seven years after the attacks, the FBI is still largely unable to electronically share investigative information among its agents that could help it solve crimes and stop terrorist plots. The bureau embarked on a program known as Trilogy that was designed to weave the FBI’s information together — and make it accessible to agents — using new computers, electronic networks, and software. But the software, called the Virtual Case File (VCF), turned out to be a spectacular failure — and a waste of at least $100 million — as a result of missteps by both the bureau and its main contractor, Science Applications International Corporation (SAIC).

Among the problems: poorly defined design requirements and a lack of management continuity and oversight. “The urgent need within the FBI to create, organize, share, and analyze investigative leads and case files on an ongoing basis remains unmet,” a report by the Department of Justice’s Office of Inspector General concluded in February 2005. This failure to provide modern information technology to FBI agents put them at “a severe disadvantage in performing their duties,” the report added. The FBI officially killed VCF in April 2005. "We had information that could have stopped 9/11," Senator Patrick J. Leahy, a Vermont Democrat, told The Washington Post. "It was sitting there and was not acted upon. . . . We might be in the 22nd century before we get the 21st-century technology."

The number of backlogged disability claims at the Social Security Administration (SSA) more than doubled over the past decade, with those pending at the hearing level reaching 760,800 as of October 2008, according to an agency spokesman. The spike in applicants from an aging baby boomer generation, staff cuts, and management problems all contributed to a cumbersome operation; individual cases took an average of more than 500 days to process in 2007. In the meantime, hundreds of thousands of people pursuing disability claims have been forced to wait as long as three years, with some going into bankruptcy, losing their homes, or even dying while waiting for a result. As far back as 2001, the chairman of the Social Security Advisory Board acknowledged that “unless there’s fundamental change, we will soon see disruptions of service. The Social Security agency lacks the ability to handle existing workloads, and those workloads are bound to increase in the next decade.” The situation continued to deteriorate, despite continuous warnings and recommendations for improvement from the Government Accountability Office (GAO), especially in regard to issues with the SSA’s electronic claims processing system.

A lack of funding compounded the problem; Congress appropriated an average of $150 million less for the agency than the Bush administration requested between fiscal years 2001 and 2007, while giving the agency a heavier workload. In an attempt to reform the system, the agency introduced its so-called Disability Service Improvement in 2006, but the GAO found that poor management, rushed rollout, and short staffing ultimately stunted the initiative, resulting in additional costs. Finally, in May 2007, Michael Astrue, the Social Security commissioner, appealed to Congress for additional funding to refine the disability program’s electronic systems and hire more judges to hear cases.

After years of calls for Congress to create stronger regulatory oversight of Fannie Mae and Freddie Mac, time ran out in 2008 when the two mortgage giants collapsed, forcing a costly government bailout. Congress created Fannie Mae during the Great Depression to buy mortgages and free up capital so that lenders could make more loans, especially to low- and middle-income buyers. Congress launched Freddie as a competitor in 1970. The Department of Housing and Urban Development (HUD) first assumed regulatory duties over Freddie and Fannie in 1992, while an independent office within HUD — the Office of Federal Housing Enterprise Oversight (OFHEO) — was tasked with maintaining their safety and soundness. Unlike bank regulators, OFHEO needed budget approval from a Congress — a Congress on which Freddie and Fannie lavished $170 million on lobbying over the past decade. The two companies also contributed $4.8 million in congressional campaign donations over the last 20 years.

The Executive Office of the President and the Bush administration in general have drawn widespread criticism for their push toward a “unitary executive,” a presidency with vastly increased power to interpret and implement the law. The administration’s decision to authorize warrantless wiretapping, its use of signing statements to pick and choose which portions of legislation to execute, its push for unrestricted detention of suspects in the war on terror, and its broad and aggressive assertion of executive privilege all drew bipartisan criticism. Some view the changes as a positive reassertion of executive power that was lost in the aftermath of the Watergate scandal — indeed, as far back as the dawn of the Reagan administration, current Vice President Dick Cheney had pushed incoming Reagan White House Chief of Staff James Baker to “restore power” and authority to the executive branch. Cheney and other adherents of the unitary executive believe that a powerful executive branch is especially important during time of war. Others view it as a dangerous power grab by a president unwilling to be held accountable by the judicial or legislative branches. Either way, with its opposition to both judicial review of its decisions (regarding handling of detainees, for example) and assertions of authority over Congress (as seen through its signing statements and refusal to respond to congressional subpoenas), the Bush administration has pushed executive power to a level unseen for many years. The White House press office did not respond to a request for comment, but in 2006, President Bush defended his decision-making role, noting, “I'm the decider, and I decide what's best.”

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.

The government’s $700 billion financial rescue plan may itself be in need of rescue, if early assessments are any indication. The credit markets are still floundering, and questions are arising already about the Department of Treasury’s administration of the plan. Before the ink was dry on the Troubled Asset Relief Program (TARP) — it was signed into law October 3 — Treasury officials had decided not to use the money to buy troubled assets at all, as the program envisioned. Instead, they decided to follow the lead of foreign governments and pour cash directly into banks to improve their balance sheets and persuade them to resume lending. Treasury so far has injected more than $150 billion in capital into 52 institutions, but the nation’s businesses and consumers have yet to see credit loosen. The crunch is so bad that vehicle sales in the United States plunged to their lowest rate in 26 years in November, helping to push automakers to seek their own bailout. The Government Accountability Office (GAO), while allowing that the TARP program is new and the challenge daunting, warns that Treasury has not yet put into place a system to gauge the program’s success. The department does not have conflict of interest rules in place, nor any monitoring of the bailout law’s requirement limiting compensation for executives of participating banks, the GAO said. Treasury interim Assistant Secretary Neel Kashkari said in a letter to the GAO that “more can and will be done” to improve transparency and communication, and he agreed that Treasury needs to develop a means to ensure compliance with provisions of the law. But Elizabeth Warren, chairwoman of Congress’ own panel overseeing the bailout, has raised a more fundamental question — whether Treasury understands why banks aren’t lending, and whether more attention should be paid to shoring up the finances of households instead of banks.

The numbers and details are staggering: Over the course of four fiscal years, at least 5,000 pieces of property, including computers, all-terrain vehicles, and digital cameras worth about $15.8 million, were lost or stolen from the Indian Health Service (IHS), a division of the Department of Health and Human Services (HHS). Following a whistleblower’s tip in June 2007, Government Accountability Office (GAO) investigators began looking into the IHS, which is meant to provide personal and public health services to American Indians. They found a division plagued by a “weak internal control environment,” which demanded little accountability for property and held little regard for protecting personal data.

Some of the electronics that went missing were used to store personal information. For instance, a computer containing a database of uranium miners’ names, along with their Social Security numbers and medical histories, was carried out of an IHS hospital in New Mexico. Though IHS attempted to contact the miners, the agency didn’t issue a press release. And throughout the course of the investigation, “IHS made a concerted effort to obstruct our work,” GAO investigators reported, including lying to investigators claiming that IHS had recovered about 800 of the items reported missing. In addition to the waste of taxpayer money, the loss and theft of property denied the recipients access to critical items, like Jaws of Life equipment that can save lives after automobile and other accidents, Jacqueline L. Pata, the executive director of the National Congress of American Indians, told The Washington Post. An IHS spokesman refused to comment beyond reactions the agency provided to the GAO, which are documented in the report.

The U.S. military failed to provide adequate body armor and armored vehicles to soldiers and Marines fighting the Iraq war. Key assumptions made before the invasion and early in the occupation of Iraq proved faulty: namely, that the Iraqi people would welcome the United States’ presence and that the American military would not face an insurgency. In April 2003 military supply chiefs told the Department of Defense’s (DOD) Army Strategic Planning Board, led by General Richard Cody, that there was enough body armor and that the 50,000 troops behind the front lines did not need armor, according to a 2005 piece in The New York Times. By mid-May, as troops behind front lines faced attacks, Cody reversed that decision and ordered body armor for all, “regardless of duty position.” The case was similar for military vehicles. According to an Army history: “When OIF [Operation Iraqi Freedom] began, as in every previous war the U.S. Army has fought, logistical vehicles were largely unarmored or lightly armed. . . . The ‘360-degree’ Iraqi insurgency once again exposed the danger of this approach.” The early missteps were soon compounded by other problems. It took time for the bureaucracy at the Pentagon to move; for example, at one point, the Army's equipment manager reportedly reduced the priority level of armor to the same status of socks. Also, DOD relied on several unproven contractors, which led to delays. The result was that for too long too few troops had adequate armor in a conflict that turned out to have no front lines. Soldiers almost anywhere in Iraq could be targeted, especially by the insurgents’ weapon of choice, improvised explosive devices (IEDs). Between the beginning of the conflict in March 2003 through November 1, 2008, 2,145 troops were killed and nearly 21,000 troops were wounded by IEDs and other types of explosive devices in Iraq.