The Center for Public Integrity

As America approaches a historic transfer of power, it is becoming ever-clearer what a daunting set of tasks awaits the new administration. When Barack Obama takes the oath of office at noon on January 20 he will inherit an economy collapsing before our eyes and a pair of ongoing wars in Afghanistan and Iraq. But he will also inherit a federal government whose machinery should bear an “out of order” sign.

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.