Suggestion 7: Free The Inspectors General!

Last time, we pondered the importance of the “fourth branch of government” -- the U.S. Civil Service, proposing that the new Obama Administration ought to visibly reach out to the millions of skilled men and women who were so beleaguered, thwarted and bullied during the Bush years.  A series of concrete steps were offered, and I concluded by recommending establishment of a new and important post, the office of Inspector General of the United States... or IGUS.  Now, I’d like to go into that notion, in some detail. (Part of a 12/08 series of “unusual suggestions for America and the Obama Administration.”)

Far from creating another vast new bureaucracy, this proposal would mostly utilize  payroll slots that already exist, today.  Every major department or agency has an internal Inspector General (IG), charged with examining operations and issuing warnings -- when it comes to minor infractions -- or else stepping in more vigorously, when things get out of hand.

The problem? Nearly all of these inspectors owe their jobs and paychecks to the very same secretaries and directors who head the agencies they are charged to scrutinize. Often, they are old pals, ensuring partiality and conflict of interest. In other cases, the IGs are just biding their time, maneuvering toward promotions that have nothing to do with a career in accountability.

Even when an Inspector General does his or her job with devotion and skill, there is no guarantee of being heeded, or even safety from retribution.  Under the Bush Administration, vigorous examiners were actively intimidated, or stripped of resources to do their jobs. Or put into a cloud of ambiguity. It is a dismal record and one that demonstrates the desperate need for reform.

Accountability Systematically Stymied

Picking from a myriad examples, take the recently revealed story of investigators at the Securities and Exchange Commission.  According to a December 2008 report in the New York Times -- “The latest black eye for the commission came when it was disclosed that inspectors and agency lawyers had missed a series of warning signs at Bernard L. Madoff Investment Securities. If it had checked out the warnings, the commission might well have discovered years ago that the firm was concealing its losses by using billions of dollars from some investors to pay others. The firm was the subject of several inquiries over the years, including one last year that was closed by the agency's New York office after it had received a referral of potentially significant problems from the Boston office.

“Similarly, the commission's chairman, Christopher Cox, assured investors nine months ago that all was well at Bear Stearns, which collapsed three days later.  Between those two events, David Kotz, the commission's new inspector general, has documented several major botched investigations. He has told lawmakers of one case in which the commission's enforcement chief improperly tipped off a private lawyer about an insider-trading inquiry.”

“...The enforcement division has been hamstrung by budget cuts and changes adopted by the SEC that make it harder to impose penalties on corporations, even when there has been egregious wrongdoing, Arthur Levitt Jr., the SEC chairman from 1993 to 2001, told the U.S. Congress in October. The result has been "a demoralizing of the enforcement staff," Levitt said.

Yes, we hope to soon be entering a new era.  Nevertheless, even if the Obama Administration returns to a policy of good and diligent government, will it be doing the nation a service by ignoring the systemic and systematic flaws that enabled the Bush Cabal to wreak such havoc upon our mechanisms of accountability?  By far the most patriotic and beneficial thing for the new team to do, while they are still in the full flush of their initial idealism, would be to change the system in simple ways that ensure this will never happen again.


Autonomy, dedication and accountability

Wouldn’t it make sense to appoint, train, and pay our inspectors through a channel that is completely separate from each department's political chain of command? Indeed, a system that is detached and safe from pressure by the legislative, executive and judicial branches?

Picture a uniformed service, with its own elite career path like the Coast Guard, or NOAA, or the Public Health Service, charged with protecting the legal and ethical health of government.  Under a relatively simple law, the inspectors and auditors would transfer to serve under the authority of the Inspector General of the United States.

Note: the Public Health Service is led by a real general - the Surgeon General of the United States.  By all accounts, these uniformed agencies are especially well-run.  Their dedicated staff perform with unusual elan, low turnover and punctilious attention to military-style rectitude. It is a tried and true method for instilling higher-than-normal standards of training and conduct.

IGUS would command a corps of trusted inspectors and observers, some of them with security clearance at the highest level and empowered to go anywhere and to see anything.  Trained to parse carefully the minefield of legal and ethical error, this corps would have to do much more than simply watch for outright legality.  They would also be advisors who best-understand the balance that every institution must strike differently, between short-term confidentiality and long-term transparency.
  
What better way to assure the American people that the government is still theirs, to own and control, even if some matters must remain discreet or secret from the public view?   One might imagine special rules requiring inspectors to stay mum when it comes to legal policy decisions that fall rightly in the political sphere, but giving them a range of options when they uncover violations of basic ethics and/or the law.  For example, an IG could not rebuke executive officials for their closed-door musings, but should speak up, confidentially, when a plan seems likely to break a law.

In recent years, the Executive Branch freely used “emergency” over-rides of many laws, especially those concerning competitive bidding for government contracts, granting hundred of billions in deals to close friends of administration officials, e.g. for reconstruction projects in Iraq.  It turned out that there was no recourse, no way to stop this dodge of the law, even when the “emergency” stretched six or more years. IGUS could offer a way to assure the public that the “E-word” will not be similarly abused in the future, by offering a check to this peremptory power.  One might even picture the Inspectorate as a way to provide basic rights to people who are being held under urgent "special circumstances" -- ensuring that those rare exceptions aren't abused or over-used. And, above all, that all exceptions are temporary.

IGUS could be appointed by a commission consisting of all past presidents and retired justices of the US Supreme Court, plus other nationally respected sages, with advice and consent of Congress.

Politically, this could be a move that has powerful resonance. The very act of establishing such a General Inspectorate would so clearly be neutral, offering no visible long-term advantage to the Democratic Party, that this law would (ironically) likely benefit the Democrats. Indeed how could the GOP dare oppose it?  Also, consider how this would allow fierce investigation of past crimes without sullying the image of a new Administration that wants to be seen as above petty vengeance.

Who needs a special prosecutor when every agency already contains all the elements for full investigation?  

With a simple change in the organizational chart, we might create an ideal force for accountability, a professional service that serves the people and the republic and the cause of honest government.

-------


Addenda: (1) A politically-oriented blog that I often highly recommend is written by my friend, investor Russ Daggatt.  It is well worth a visit, any time.  But his most recent entry is especially cogent, referring to Michael Kinsley’s recent call for an increase in the gasoline tax, compensated by reducing Americans’ payroll(FICA) tax. Oh... and (2) this appears to be my 500th posting.... argh...

Continue to Suggestion #8: Micro-Suggestions about the economic crisis