A Further Perspective

The Long, Long Sleep of Watchdogs

Where's the inspector general when you need him?

By 4.9.12

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The U.S. Department of Energy's inspector general was sound asleep when Secretary Steven Chu and his crew of federal venture capitalists (using taxpayer money) were dishing out $500 million in 2009 to the Solyndra Corporation to make solar panels. Solyndra went bankrupt and is now out of business. Dr. Chu's merry band also gave federal loans of various sizes to half-a-dozen other "alternative energy" companies that are now in bankruptcy or have shut down production.

It was left for the Treasury Department's inspector general tell us the full story of the Solyndra caper. The IG has revealed that Treasury's financial experts knew nothing of it until "about a day" before the DoE issued a press release announcing that it was approving the loan. It seems that this rushed review was driven by Vice President Biden's schedule, for he was to appear at a ceremony at the Solyndra plant and the loan needed to be in place in order to validate his visit.

In even the short time they had it, Treasury's financial experts raised concerns about the loan. The IG found no evidence that these had been addressed by the DoE. Solyndra's poor debt-to-equity ratio was one of the concerns. In its final days, the Bush Administration had declined a Solyndra loan request because of its shaky financial situation.

At the DoE there is no record of an inspection by its inspector general of any of these reckless capital ventures by Dr. Chu, a physicist with no business experience.

He and his band have also thrown money at implausible electric automobile projects. One beneficiary, the Fisker Co., has been so successful that its $107,850 Karma sports car, when tested by Consumer Reports recently, conked out on a test track after going a few miles at 65 mph. CR reported, "We have owned our car for just a few days; it has less than 200 miles on its odometer.… We buy about 80 cars a year and this is the first time in memory that we have had a car that is undriveable before it finished our check-in process." Apparently, the DoE had seen the Karma as the new car for the masses (at least those with $107,850 and a lot of faith). 

Wasting money is not restricted to the Department of Energy. In the annals of egregious misuse of public funds, the General Services Administration's October 2010 Western Regional Conference at a resort/casino dear Las Vegas ranks right at the top. Now, two years later, the GSA's inspector general awoke to the fact it had been held at an expense of $828,000 and he investigated. He found this agency, which manages the federal government's land and buildings, had sent 300 employees to Las Vegas for what amounts to three days of touchy-feely meetings. Included on the tab were a fortuneteller, a clown, and a $31,208 reception for the conference-goers.

A conference of any good size takes much planning, but sending several people on six planning trips to Las Vegas at a cost of $130,000 is stretching the point, to say the least. A well-run presidential campaign would send one advance person out to lay the basic plans, then do all the rest by telephone and e-mail. He or she would return just before the candidate's visit to make sure everything was in order. Another reason for a second trip would be to work on drumming up a large crowd for the candidate's event, if one were needed. In this case, there was no crowd to drum up. All were GSA employees.

The GSA's Obama-appointed Administrator, Martha Johnson, took office in February 2010. Was she not told of plans for an event of this magnitude? If not, surely she must have heard about it afterword and, if so, why did she not inquire as to costs and accomplishments of it? When she took office she said ethics is "a big issue for me." Not big enough as things turned out. Later that year she proclaimed the agency's new security slogan, "If you see something, say something." Apparently, no one said a word to her or the IG. 

The story erupted after the IG's report was made available. Last week, Ms. Johnson, after firing two deputies, made a hasty exit (with a shove from the White House) and thundered her outrage about the conference. The IG's report had noted that the GSA had "followed neither federal procurement laws not its own policy on conference spending."

Several questions remain unanswered. Why was it necessary to hold the conference in an expensive resort hotel when the GSA likely has a building suitable for such a regional conference? Why did not someone in the White House interested in covering the President's flanks not spot this and ask questions? The conference was widely known within the government and the GSA's internal website -- seen by hundreds, if not thousands -- posted photos from the party (until the end of last week).

In this case, Ms. Johnson's slogan, "If you see something, say something," was trumped by that old chestnut slogan, "What happens in Vegas, stays in Vegas."

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About the Author
Peter Hannaford was closely associated with the late President Reagan for a number of years. He is a member of the board of the Committee on the Present Danger. His latest book is “Presidential Retreats.”