The Center for Public Integrity

Five years after the worst blackout in North American history, in which one Ohio utility’s mistakes darkened homes and businesses for 50 million people in eight states and Canada, the federal government acknowledges that much remains to be done to address the nation’s aging electric grid. The 200,000 miles of power lines that crisscross the country were not designed to bear the burden they now carry. In response to the 2003 blackout, Congress for the first time made the more than 500 owners and operators of the world’s largest power grid subject to mandatory reliability standards. But the program, run by the industry’s own self-regulatory organization, the North American Electric Reliability Corp. (NERC), is no cure-all. In February 2008, a million people lost power for an afternoon due to the errors of a Florida Power & Light engineer. NERC issued advisories to help prevent such problems in the future, but levied no penalties. More nettlesome problems, utilities argue, are the need to build additional long-distance, high-voltage power lines, and to bring up-to-date digital technology to the grid. Investment in electric transmission has roughly doubled in the last five years, thanks in part to Federal Energy Regulatory Commission incentives, but the agency says that much more investment is needed. Some projects are slowed because neighbors and environmentalists object to power lines, but that problem may not be as great a barrier to new transmission lines as the simple question of who should pay for them — when the customers who benefit the most are often hundreds of miles from the fields, farmland, and mountains that need to be cleared to make way for towering steel pylons.

Nine years after Osama bin Laden was placed on the Federal Bureau of Investigation’s “ten most wanted” list, seven years after President George W. Bush said the Al Qaeda leader was “Wanted, Dead or Alive,” the exact location of the six-foot, five-inch Saudi terrorist remains a mystery. Even before Al Qaeda operatives flew jumbo jets into the World Trade Center and the Pentagon, U.S. intelligence was tracking bin Laden’s whereabouts, but after September 11, the desire and the need to apprehend him surged. "It's not enough to get one individual, although we'll start with that one individual," then-Secretary of State Colin Powell told reporters in 2001. By December of that year, U.S. Special Forces and Afghan allies thought they had cornered the Al Qaeda leader at Tora Bora, a cave complex in the eastern mountains of Afghanistan. Army officials later asserted that they were not certain if bin Laden was present at Tora Bora, but in April 2002, The Washington Post reported that intelligence officials had “decisive evidence” that he was there and that he escaped the battle alive. Reporters and military experts say that American officials misjudged the commitment of the Afghan militias they relied on to seal off escape routes used by bin Laden, Al Qaeda leaders, and the Taliban. At a March 2002 press conference, President Bush appeared unruffled. “I truly am not that concerned about him. I know he is on the run,” he said. After that, the White House largely stopped talking about bin Laden. "I think we've lost him," a U.S. counterterrorism official told Time magazine in 2002. "That's why you're not hearing much talk about the hunt — because we're not succeeding." In 2003, the arrest of Khalid Sheikh Mohammed, bin Laden’s third-in-command, revitalized the hunt for bin Laden in remote areas of Pakistan, but the information gleaned from Mohammed’s arrest proved old.

While pouring billions of dollars into military actions in Iraq and Afghanistan, the Bush administration underplayed perhaps the most important battle against Islamic extremists: the struggle to win over hearts and minds. Building pro-Western political and cultural organizations and promoting U.S. values of openness, democracy, and human rights were key to winning the Cold War, but experts broadly agree that the “war of ideas” suffered under the Bush Administration. “If the United States does not act aggressively to define itself in the Islamic world, the extremists will gladly do the job for us,” the 9/11 Commission admonished.

In 2002, the EPA and the Army Corps of Engineers cleared the way for a resurgence of environmentally damaging mountaintop coal mining, using a rule change that legalized filling valleys with debris. The result: the drive for low-cost coal is blasting the peaks off the Appalachian Mountains and forever changing the lives of the people beneath them, who say that federal policy to boost energy production has forsaken the environment. In mountaintop removal, the coal industry uses explosives to blast away summits that expose seams of coal, and huge machines push the debris into the valley below. It puts fewer miners at risk than traditional underground mining. But across Kentucky, West Virginia, and Virginia, the Environmental Protection Agency (EPA) estimated — in a report produced as part of a lawsuit settlement — that mountaintop removal has filled in some 1,200 miles of streams and completely destroyed another 700 miles. With once-lush hillsides stripped of vegetation and the natural drainage patterns altered, communities below blame the mining for flooding and drinking-water pollution. Until the federal government’s 2002 rule change, mountaintop mining had ebbed in the late 1990s thanks in part to lawsuits. Now, the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement (OSM) is proposing another rule change that critics say would further loosen the reins on industry, by easing requirements that mining not affect local water supplies. OSM maintains that Congress envisioned mountaintop mining and construction of valley fills in streams when it passed the federal surface mining law in 1977. An OSM spokesman told the Center that the agency’s job is to minimize the impacts and “to balance environmental protection and production of the nation’s coal supply.” The agency says its new proposal would not increase mountaintop mining, but would have a “positive effect” by clarifying what that law requires for operations near streams.

Although U.S. intelligence agencies for years have been concerned that terrorists might target nuclear facilities for sabotage or theft, many facilities remain vulnerable. At a planning meeting in Spain in July 2001, 9/11 terrorist Mohammed Atta recommended “targeting a nuclear facility he had seen during familiarization flights near New York,” the 9/11 Commission report revealed. Most analysts believe this facility to be the Indian Point nuclear plant; a 1982 Sandia National Laboratories study found that a significant accident there could cause thousands of immediate fatalities. Atta’s idea was rejected, but “Al Qaida will continue to try to acquire and employ . . . nuclear material in attacks,” according to a 2007 unclassified National Intelligence Assessment on the terrorism threat to the United States. Over the past decade, security lapses have plagued both the nation’s nuclear weapons complex run by the Department of Energy (DOE) and several civilian nuclear reactors overseen by the Nuclear Regulatory Commission (NRC). Government and private security tests have revealed serious vulnerabilities where uranium or plutonium, sometimes of weapons-grade quality, is stored. In 2007, a local CBS affiliate obtained footage of guards sleeping on the job at the Peach Bottom nuclear power plant in Pennsylvania. Efforts to consolidate nuclear materials in fewer, easier-to-defend sites have moved slowly.

Critical airline maintenance is being performed by private companies without proper oversight and frequently without certification by the Federal Aviation Administration (FAA), according to a series of government reports. A December 2005 audit by the inspector general (IG) at the Department of Transportation (DOT), FAA’s parent agency, found that “non-certificated” repair facilities, assigned work by the airlines, "are now performing more significant work than anyone realized” — a practice which contributed to a January 2003 Air Midwest crash that claimed 21 lives outside Charlotte, North Carolina. The IG audit found that these facilities did not follow the same regulatory requirements as their certified counterparts, including annual FAA inspections and quality control supervision. And even when FAA-certified mechanics performed maintenance at these sites, vital overlapping layers of safety were absent — a factor the National Transportation Safety Board said contributed to the Air Midwest crash. Airlines failed to properly monitor work at these facilities and neglected to properly train employees, according to the audit. While the FAA agreed with most of the IG’s recommendations, effective policies haven’t always been adopted. In March 2007, the IG told Congress that the FAA still needed to develop a method for determining which “non-certificated” facilities were performing critical maintenance. Meanwhile, airlines have doubled their outsourced maintenance from 2004 to 2008. "We have made a number of adjustments that I think have improved the effectiveness of our oversight," a senior DOT official told Congress in 2007. An FAA spokesman noted the agency's responses to IG recommendations, including proposed new regulatory language for contract maintenance programs in air carrier manuals, as well as a proposed rulemaking project requiring FAA approval for contract training programs. Both proposals are scheduled for completion by the end of 2009.

Without proper oversight or enforcement by the Department of Education, the $85 billion student loan industry became tainted in scandal. In 2007, New York Attorney General Andrew Cuomo revealed widespread unethical relationships between schools and lenders, with colleges and universities accepting gifts and other inducements from loan companies. In turn, financial aid officers would steer students toward lenders on their “preferred lender lists,” often at inflated prices at the students’ expense. This gave a few loan companies a substantial advantage. Cuomo launched his investigation after receiving a complaint from a new lender that felt it could not fairly compete. Meanwhile, the Education Department remained conspicuously absent. In testimony before the House Committee on Education and Labor, Cuomo accused the department of being “asleep at the switch” and urged congressional action. Representative George Miller, chairman of the Committee on Education and Labor, called on Education Secretary Margaret Spellings to put an end to lender bribes and require full disclosure of school-lender relationships. Spellings responded that the focus of Cuomo’s investigation pertained to the private loan industry, an area outside her department’s jurisdiction, but she conceded that the practices conducted by the institutions were unacceptable. In the midst of the revelations, Theresa Shaw, head of Education’s student loan office, resigned after five years in the position, but told Spellings, “I had accomplished all that had been asked of me including . . . ensuring that proper financial management and internal controls were in place.” Thousands of students suffered as a result.

A generous tax cut was not the only boon wealthy individuals and large corporations received from the Bush administration’s time in office: In recent years, the Internal Revenue Service (IRS) has given their tax returns less and less scrutiny — even as it has stepped up its audit rates among the poor. In 2007, in what the Syracuse University-based Transactional Records Access Clearinghouse (TRAC) calls a “historic collapse,” only 26 percent of corporations holding at least $250 million in assets were audited (compared to more than 70 percent in 1990). Likewise from 1996 to 2006, audit rates of those earning over $100,000 fell by more than one-half, down to 1.3 percent. One contributing factor behind the trend is a slump in IRS staffing: Over the past decade, the number of agents performing audits has fallen by more than 30 percent. Another factor is a 1998 congressional reform bill directing the IRS to focus its audits on those who apply for the Earned Income Tax Credit (EITC) — a credit designed to assist the working poor. By 2006, audits of EITC recipients had risen to account for 40 percent of all investigations. While EITC fraud is a real concern, at a maximum, such fraud accounts for roughly 3 percent of the estimated $300 billion gap between paid and owed taxes. Meanwhile, lighter scrutiny on large corporations and the wealthy — who have the most non-cash income and leeway to game the system — means that those who owe the most also have the best chance of getting away without paying their due. IRS officials have not disputed TRAC’s numbers, but have said they were focusing harder on where noncompliance occurs, especially in private partnerships corporations use to avoid paying taxes.

Calling them “wildly off mark,” Deputy Secretary of Defense Paul Wolfowitz dismissed the assessments of his own Army chief of staff, General Eric Shinseki, and a 1999 Department of Defense (DOD) war game scenario, both of which predicted the need for hundreds of thousands of troops to secure post-invasion Iraq — far more than the 148,000 who were eventually assigned the job. According to an official U.S. Army history of the conflict in Iraq, “The military means employed were sufficient to destroy the Saddam regime; they were not sufficient to replace it with the type of nation-state the United States wished to see in its place.” A 2005 unclassified study for the Army by the RAND Corporation, which was suppressed until media reports and congressional pressure brought it to light, said that the chaotic security situation after Saddam Hussein’s regime was toppled were “conditions [that] enabled the insurgency to take root, and the Army and Marine Corps have been battling the insurgents ever since.” Though there were some strategies for securing post-invasion Iraq, “few if any made it into the serious planning process,” according to the RAND report. These ideas were “held at bay, in the most general sense, by two mutually reinforcing sets of assumptions that dominated planning . . . at the highest levels” — that few armed forces would be necessary after the invasion and that the military would not be an occupying force. Just days before the war began, Vice President Cheney said, “My belief is we will, in fact, be greeted as liberators.”

An under-the-radar Department of Defense (DOD) office produced highly politicized intelligence assessments and promulgated one of the most inaccurate justifications for U.S. invasion of Iraq: that the Iraqi government under Saddam Hussein had a working relationship with Al Qaeda. The Office of Special Plans, part of the Office of the Under Secretary of Defense for Policy led by Douglas Feith, created and provided these assessments to senior U.S. officials. Though neither illegal nor unauthorized, these assessments were, in the view of the DOD inspector general, “inappropriate” and “did not clearly show the variance with the consensus of the Intelligence Community.” A Senate Intelligence Committee report found not only that the work of other intelligence agencies, such as the Central Intelligence Agency, was ignored, but also suggested that the Office of Special Plans shaped intelligence to fit the desires of policymakers — a cardinal sin in the intelligence world. According to several Democratic senators on the intelligence committee, “[C]riticism of the CIA’s analysis was sent by Under Secretary for Policy Feith to Deputy Secretary Paul Wolfowitz and Secretary [Donald] Rumsfeld.” W. Patrick Lang, the former chief of Middle East intelligence at the Defense Intelligence Agency, told investigative journalist Seymour M. Hersh, “The Pentagon has banded together to dominate the government’s foreign policy, and they’ve pulled it off.” The 9-11 Commission would later conclude that it found "no credible evidence that Iraq and Al Qaeda cooperated on attacks against the United States." A study conducted by a DOD-funded think tank, after a review of captured Iraqi government documents, also found no "direct connection" between Al Qaeda and Iraq under Saddam Hussein. Trumpeted by the White House as a key reason to invade Iraq, the much touted close “relationship” between Al Qaeda and Iraq simply did not exist.