Journal of Public Inquiry Spring/Summer 2009

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  • If anyone needs to fill out a form 1040 and 1040x ,I found a blank form here http://goo.gl/E0ZxQi. This site also has some tutorials on how to fill it out and a few contract documents.
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Journal of Public Inquiry Spring/Summer 2009

  1. 1. Council of Inspectors General on Integrity and Efficiency Members of the Council Agency for International Development Department of Interior Department of Agriculture U.S. International Trade Commission The Inspector General Reform Act Amtrak Department of Justice of 2008 created the Council of Appalachian Regional Commission Department of Labor Inspectors General on Integrity Architect of the Capitol Legal Services Corporation and Efficiency. This statutory U.S. Capitol Police Library of Congress council supersedes the former Central Intelligence Agency National Aeronautics and Space President’s Council on Integrity Department of Commerce Administration and Efficiency and Executive Commodity Futures Trading Commission National Archives Council on Integrity and Consumer Product Safety Commission National Credit Union Administration Efficiency, established under Corporation for National and Community National Endowment for the Arts Executive Order 12805. Service National Endowment for the Humanities Corporation for Public Broadcasting National Labor Relations Board The CIGIE mission is to The Denali Commission National Science Foundation address integrity, economy, and Department of Defense Nuclear Regulatory Commission effectiveness issues that transcend Office of the Director of National Office of Personnel Management individual government agencies; Intelligence Peace Corps Department of Education Pension Benefit Guaranty Corporation and increase the professionalism Election Assistance Commission Postal Regulatory Commission and effectiveness of personnel by Department of Energy U.S. Postal Service developing policies, standards, Environmental Protection Agency Railroad Retirement Board and approaches to aid in the Equal Employment Opportunity Securities and Exchange Commission establishment of a well-trained Commission Small Business Administration and highly skilled workforce Export-Import Bank of the United States Smithsonian Institution in the offices of the Inspectors Farm Credit Administration Social Security Administration General. Federal Communications Commission Special Inspector General for Afghanistan Federal Deposit Insurance Corporation Reconstruction The CIGIE is led by Chair Phyllis Federal Election Commission Special Inspector General for Iraq K. Fong, Inspector General Federal Housing Finance Board Reconstruction of the U.S. Department of Federal Labor Relations Authority Department of State Agriculture, and Vice Chair Carl Federal Maritime Commission Tennessee Valley Authority Clinefelter, Inspector General of Federal Reserve Board Department of Transportation the Farm Credit Administration. Federal Trade Commission Department of Treasury The membership of the CIGIE General Services Administration Treasury Inspector General for Tax Government Accountability Office Administration includes 69 Inspectors General Government Printing Office Special Inspector General for the Troubled from the following federal Department of Health and Human Services Asset Relief Program agencies: Department of Homeland Security Department of Veterans Affairs Department of Housing and Urban Development
  2. 2. LETTER FROm THE EDITOR-IN-CHIEF T wo words came to mind as I reviewed this issue of the Journal of Public Inquiry: “relevant” and “revealing.” It is relevant because issues discussed involve topics currently making headlines. It is revealing because members of the Inspector General community were willing to share valuable insights. A great example of a relevant and revealing article is the feature involving real-time processes used by the Treasury Inspector General for Tax Administration to audit economic stimulus payments. The Journal focuses on key challenges currently facing our community and ways to successfully turn those problems into solutions. The articles reveal timely information in regard to the following topics: whistleblower protections…desk audits...improving access to information...forensic auditing. Our collective skills, talents, experiences, lessons learned, and best practices have combined to provide an influential forum. The Journal is a window into the IG world and has been a great reference that I have frequently referred to throughout my years as an Inspector General. One only needs to watch the news these days to see the contributions of the IG community. From audits to investigations to inspections – we are making a difference and adding value to our respective departments. As members of the Inspector General community, we are charged with providing independent and objective oversight. In a single phrase, we “speak truth to power.” One manner in which we do so is through congressional testimony. Congressional testimony is an important aspect of serving as an Inspector General. The Inspector General Act of 1978, as amended, states that we are “to provide a means for keeping the head of the establishment and the Congress fully and currently informed about problems and deficiencies related to the administration of such programs and operations and the necessity for and progress of corrective action.” The Journal includes six congressional testimonies related to a variety of current topics, such as Inspectors General: Independent Oversight of Financial Regulatory Agencies; Progress of the American Recovery and Reinvestment Act; Health Care Reform; U.S. Postal Service in Crisis; Small Business Innovation Research; and Hiring Practices. In the words of President Franklin D. Roosevelt, “The truth is found when men are free to pursue it.” The testimony we provide to Congress helps us bring important issues to light and provides transparency into the programs and operations of our agencies in an effort to make significant improvements. Outreach is another important aspect of our work and this issue includes two speeches. The first is a speech I made this year to the graduates of the Combatant Command and Joint Inspectors General course. The second is a speech made by J. Russell George to the National Association of Tax Professionals at the 2009 Annual Conference. I would like to thank the members of the Journal Editorial Board for their efforts, as well as the authors who shared their work with us. There is a great deal that can be learned each time so many experienced and dedicated individuals contribute collectively towards the betterment of the Inspector General community. Gordon S. Heddell Inspector General
  3. 3. Journal Feature Article of Public Inquiry 1 Economic Stimulus Payments Real-Time Auditing Deann L. Baiza, John L. Hawkins, and Department of Defense Russell P. martin discuss the positive impact Inspector General Staff of a real-time audit approach. Editor-in-Chief Gordon S. Heddell 6 Marshalling Whistle- 31 Health Care Reform: blower Protection Opportunities to Address Publisher Eric B. Kempen and Andrew Waste, Fraud and Abuse P. Bakaj review protections for Daniel R. Levinson testifies John R. Crane whistleblowers. before Congress on health care reform. 9 The Desk Audit:Help the 40 U.S. Postal Service in Editor How a Jennifer M. Plozai Supervisor Can Struggling Investigator Crisis Graphic Design Asst. Randy Scott examines how a David C. Williams testifies Jacob A. Brown desk audit can assist in ensuring before Congress on financial an investigator is given the time stability in the U.S. Postal needed to resolve a case. Service. Journal Editorial Board Gregory H. Friedman 13 Three Ideas to Improve Effective Inspector 42 Small Business Innovation Research Allison C. Lerner testifies General Access to Inspector General regarding Small Business Department of Energy Both Information and Innovation Research. Individuals 47 Other Admin Actions Brian D. miller outlines J. Russell George Hiring Practices and ways to improve IG access to Inspector General information and individuals. Treasury Inspector General for James J. O’Neill testifies 18 for Forensic Audit and regarding hiring practices. Tax Administration A Conceptual Framework 53 of the Combatant Address to Graduates Mary L. Kendall Automated Oversight Acting Inspector General Brett m. Baker provides insight Command and Joint IG Department of the Interior into the benefits of forensic auditing. Course Gordon S. Heddell speaks to 23 Inspectors General: Allison Lerner graduates of the COCOm Joint Inspector General Independent Oversight IG course. National Science Foundation of Financial Regulatory 56 Association of Tax Address to the National Agencies Mary Mitchelson Gary L. Kepplinger testifies Acting Inspector General before Congress on enhancing Professionals 2009 Department of Education the independence of IGs in key Annual Conference financial regulatory agencies. J. Russell George speaks to tax professionals about TIGTA’s role Richard Moore 28 Progress of the in the government’s oversight of Inspector General the tax preparer community. Tennessee Valley Authority American Recovery and Reinvestment Act Earl E. Devaney testifies before Congress on the Recovery Act. 1 Denotes the end of an article.
  4. 4. Feature Article Treasury Inspector General for Tax Administration Economic Stimulus Payments Real-Time Auditing The laws governing taxes frequently change and some of those changes can significantly affect both taxpayers and the economy By Deann L. Baiza, John L. Hawkins, and Russell P. Martin One thing is almost as certain as death and taxes…the laws governing taxes fre- quently change and some of those chang- es can significantly affect both taxpayers and the economy. As part of the Treasury Inspector General for Tax Administra- tion’s oversight of the Internal Revenue Service, we continually keep attuned to potential legislation that affects the tax laws, particularly those that can play a major role in the lives of taxpayers. Several months before the fi- nancial meltdown and economic cri- sis gripped the country, the Congress and former President George W. Bush provide IRS with timely input that may other information from various sources, worked on ways to address a slowing prevent problems from occurring or at we soon realized this legislation would economy and possible recession. In early least minimize their impact. It was not have a major impact on both IRS op- December 2007, discussions of an eco- long before the IRS saw the positive im- erations and taxpayers. Given both the nomic stimulus package that included pact that this real-time audit approach significance and timeframe for imple- possible tax cuts began with a meeting of provided as we began sharing valuable mentation, we knew we needed an au- economists and business leaders. and timely information with the IRS dit approach that would provide timely We first learned of the possibility throughout the audit process. results and allow the IRS to make pro- of economic stimulus legislation in Janu- gram corrections quickly to minimize ary 2008 and our initial contact with the IRS occurred before the Economic Stimu- Using Lessons Learned the impact on taxpayers. We began lay- to Develop an Audit ing out the framework for a multi-audit lus Act was passed. That contact was Strategy Before approach to assess the planning and im- greeted with “Why are you here now?” Implementation Began plementation of the stimulus legislation The IRS was not expecting us to be in- Once we learned of the possibility of once enacted. volved quite this early in the process. economic stimulus legislation we im- The Act was signed into law Traditionally we look at an established mediately began evaluating the potential on February 13, 2008. The Act’s cen- program or process after it has been in significance of the proposed legislation terpiece was a tax cut in the form of an place for some time. We explained that and how we could provide audit cover- economic stimulus payment that would our approach was to look at the planning age should the legislation be enacted. be paid as quickly as possible to U.S. and implementation of the legislation as Through monitoring news articles and taxpayers meeting certain qualifications. it happened with the hope that we could Visit www.ignet.gov 1
  5. 5. While the tax credit was for Tax Year vance payments. In both reviews we 2008, the legislation allowed for advance noted improvements that could be made payment of the credit in the form of an in the way the IRS planned for or carried economic stimulus payment based upon out the legislation. Because of the simi- tax returns filed for Tax Year 2007. The larity of these laws and advance refunds, IRS was tasked with the primary respon- we knew that the prior TIGTA audits, sibility of identifying qualified individu- and more importantly, the audit teams als and issuing the economic stimulus involved, would be a critical part of our payments. The IRS estimated more than determination of the best approach for 130 million households would qualify reviewing the IRS’ planning and imple- for what Congress estimated would total mentation of the Act. over $100 billion in economic stimulus We evaluated the prior audit payments. teams’ approach to those reviews, the However, further complicating audit tests that were productive, the is- the implementation of the legislation sues identified in those reviews, and how was the provision that qualified many the Act’s provisions were similar to or retirees to receive a stimulus payment. differed from the prior legislation. We concerns we were identifying to enable Although qualifying, many of these indi- held conference calls and meetings with the IRS to take timely corrective action. viduals were no longer required to file an those prior audit teams to discuss the In addition, the Act posed a unique audit income tax return. How would the IRS testing and methodology used in the pri- challenge: implementation of the legisla- identify and ensure retirees received their or reviews as well as the issues previously tion crossed many IRS functional lines. economic stimulus payment? Equally reported that affected the IRS’ ability to How would we coordinate with all of important, how would the IRS ensure accurately issue the advanced refunds and the impacted functions so that there was millions received those payments at the the potential for the same problems oc- two-way communications to ensure in- same time the IRS was processing indi- curring with this legislation. We also dis- formation was shared timely? Likewise, vidual tax returns as part of its annual cussed the potential of fraudulent rebate it was critical that we did not inhibit the return filing season? Immediately after claims and the need for the IRS to de- IRS from devising and implementing enactment, the IRS stated that the first velop preventative controls. The lessons numerous steps so economic stimulus payments would be issued to taxpayers in learned from those prior audits served payments could be issued as quickly as may 2008. That certainly did not leave as the cornerstone for the development the legislation prescribed. the IRS or us much time to prepare. De- of our economic stimulus audit strategy. Communication with IRS was spite the short time frame for payment The result was a strategy that provided not our only concern. We also needed issuance our planning efforts before the real-time coverage of each stage of the to communicate with our other TIGTA legislation was enacted ensured we were Act from the planning of the economic Audit divisions and groups that were in- positioned to provide immediate over- stimulus payments in 2008 through the volved with auditing various aspects of sight of the IRS’ implementation of the processing of the tax credits claimed on the legislation to ensure our coverage of legislation. tax returns filed and processed in 2009. the legislation was a coordinated cross- Now that we knew the details of functional effort. As such we designated the legislation, our first order of business Establishing a one audit team as the central communi- was to finalize the scope of our multi-au- cation point for requesting and sharing Coordinated dit strategy. We drew on past experience information with the IRS. This accom- Communication plished several things. It established “one to help identify the most significant areas Strategy to Share of risk and define the scope of our audit voice” from TIGTA on the economic Information Quickly stimulus payments. most importantly, strategy. The Congress had enacted simi- Because of the accelerated timeframe to this meant that the IRS heard from only lar legislation in June 2001 and again in implement the legislation, the substantial one audit group on most of the legisla- may 2003, calling for the advance pay- dollars at risk, and the number of taxpay- tion’s provisions. Because of the high ment of a tax credit or refund. In both ers who could be impacted, we needed significance, the IRS was not bombarded instances, we conducted audits to evalu- to develop a process to provide the IRS with questions and issues coming from ate the IRS’ efforts in issuing these ad- with immediate feedback relative to the 2 Journal of Public Inquiry
  6. 6. tors who had worked on prior reviews of advance refunds, had knowledge of the Audit Coverage IRS’ fraud detection programs, or were experienced in the IRS’ information Timeline technology modernization activities. Our review identified that the IRS took extraordinary steps in planning ◄ December 2007 for implementation of the legislation in- Talk of an economic cluding a wide-reaching media campaign stimulus package begins. to educate individuals about what was required to receive an economic stimu- ◄ January 25, 2008 lus payment. While planning was gen- TIGTA begins planning erally sufficient, some IRS functions did for coverage of the pending not initially prepare action plans or had economic stimulus plans that missed key items to stop or de- legislation. ter fraudulent refunds. so many different oversight groups. ◄ January 30, 2008 The communication structure Phase II – IRS Correctly Computed TIGTA initiates we established was instrumental in en- 99.6 Percent of the Economic Stimu- Phase I assessing IRS’ suring taxpayers received the stimulus lus Payments Reviewed planning for and payments they were entitled and helped Our coverage of the Act moved into the implementation of us to timely accomplish our audit strat- second phase designed to assess the ac- legislation. egy. curacy of the IRS’ computation of the payment and the adequacy of controls to ◄ February 13, 2008 Auditing as the ensure ineligible individuals did not re- The Economic Stimulus Act Legislation Was ceive an economic stimulus payment. To of 2008 is enacted. Implemented to accomplish our objective, we partnered Minimize Errors with a TIGTA information technology ◄ April 3, 2008 With our audit strategy developed and specialist to develop systemic programs TIGTA initiates the communication lines established, it to independently determine taxpayer Phase II assessing the was time to get down to business. We eligibility for a payment and, if eligible, accuracy of payment initiated our multi-phase audit with the to calculate the amount of the economic calculation and processes to initiation of our first audit in late Janu- stimulus payment for every taxpayer who ensure ineligible individuals ary 2008, two weeks before the Act was had filed a Tax Year 2007 tax return prior did not receive payments. passed. While we knew these would be to July 2008. exciting audits with high visibility and Once we computed the amount ◄ April 22, 2008 importance, we also knew there would that an individual should receive, we Testing for Phase I ends. be stressful moments when audit results compared the amount of our payment must be reported and delivered quickly. with the IRS’ calculation. This analysis ◄ April 28, 2008 and comparison was done concurrently Dept. of Treasury issues Phase I – IRS Educates and Assists with the IRS’ calculation of the eco- the first economic stimulus Millions of Taxpayers on the Econom- nomic stimulus payments and discrep- payments. ic Stimulus Payment ancies were shared with the IRS before The first phase of our audit focused on the payments were actually issued to the ◄ July 3, 2008 the IRS’ planning for and implementa- taxpayer. In many cases, that meant we Testing for Phase II ends. tion of the economic stimulus payments. only had two or three days to analyze The review included an assessment of the hundreds of thousands of tax returns be- ◄ July 31, 2008 IRS’ efforts to implement the legislation fore payments were issued. We verified TIGTA issues Phase I audit the accuracy of 129.1 million economic report. and educate and assist taxpayers. The audit team for this phase included audi- stimulus payments generated by the IRS ▼ as of June 13, 2008. Visit www.ignet.gov 3
  7. 7. Phase III – IRS Ensured Eligible Individuals Received Their Economic on their Tax Year 2007 and Tax Year 2008 tax returns. Audit Coverage Stimulus Payments Keeping in line with our real- Timeline (Cont’d) The third phase of our strategy deter- time auditing approach, we began this mined if IRS’ processes and procedures phase of our audit in September 2008, ensured all eligible individuals received months before the IRS would begin ◄ August 4, 2008 TIGTA their economic stimulus payment and processing Tax Year 2008 tax returns initiates Phase III assessing that no payments were issued after De- claiming the credit. This allowed us to process to ensure eligible cember 31, 2008, which was the last date evaluate the IRS’ planning and imple- individuals received allowed by the legislation. By this time, mentation efforts as they were occur- payments. the IRS had issued the majority of the ring. Like the first phase of our strategy, stimulus payments for taxpayers who we reviewed drafts of IRS documents, ◄ September 4, 2008 had timely filed their Tax Year 2007 tax including tax forms, instructions, and TIGTA issues return by April 15, 2008. other related publications for taxpayer Phase II audit report. We monitored the IRS’ efforts use. We also reviewed IRS procedures to correct error conditions identified by and computer programming docu- ◄ September 8, 2008 both the IRS and TIGTA where taxpay- ments to ensure necessary program- TIGTA initiates Phase IV ers did not receive the correct amount ming changes for the recovery rebate of its Audit assessing the of the payments to which they were en- credit were planned or had been made. planning, computation and titled. In addition, we evaluated the IRS’ As we drew closer to the start of the IRS’ issuance of recovery rebate implementation of legislation passed 2009 tax return filing season, we again credit. subsequent to the Act that modified the worked with our TIGTA information economic stimulus payment eligibility technology specialist to expand our sys- rules for military taxpayers. temic programs to again independently ◄ October 15, 2008 Last day to file a tax return determine taxpayer eligibility and com- to receive an economic Phase IV – IRS Correctly Calculated pute the recovery rebate credit. As a re- stimulus payment in 2008. 99.6 Percent of the Recovery Rebate sult, we were able to verify the recovery Credits Reviewed Though Taxpayer rebate credit for over 102 million tax Confusion Presented Challenges returns through April 17, 2009, as they ◄ December 31, 2008 IRS stops issuing economic The fourth and final phase in our strat- were processed by the IRS. stimulus payments. egy evaluated the planning, computa- tion, and issuance of the recovery rebate credit. As previously mentioned, the eco- “Using real-time ◄ January 16, 2009 IRS begins processing nomic stimulus payment was calculated auditing ensured recovery rebate credits. based on Tax Year 2007 tax returns in an effort to release funds to individuals as millions of individuals received the economic ◄ February 27, 2009 quickly as possible. Although most in- Testing for Phase III ends. dividuals received the correct economic stimulus payment and stimulus payment, there were individuals who did not receive an economic stimu- recovery rebate credit ◄ April 24, 2009 TIGTA issues Phase III lus payment in 2008 who may have been to which they were audit report. entitled to receive a payment based on entitled and prevented the filing of their Tax Year 2008 tax re- turn in the form of a recovery rebate billions of dollars in ◄ June 11, 2009 Testing for Phase IV ends. credit (generally filed between January erroneous recovery and April 2009). In addition, some indi- viduals could have received an additional rebate credits from ◄ September 9, 2009 TIGTA issues Phase IV amount when comparing information being issued.” ● audit report. 4 Journal of Public Inquiry
  8. 8. Overall, the IRS was able to achieve the to correct errors in its calculation of the received economic stimulus payments or intent of the Economic Stimulus Act. economic stimulus payment and recov- recovery rebate credits totaling approxi- The IRS issued more than $104.8 billion ery rebate credit as well as its manual tax mately $190.1 million to which they in economic stimulus payments and re- return processing procedures before the were entitled. This included more than covery rebate credits to over 140 million errors could negatively affect a significant 56,000 individuals on social security that taxpayers. Over the 18-month period number of taxpayers. had not yet received but were entitled to from January 2008 to June 2009, we We were able to provide mem- an economic stimulus payment. In ad- were able to provide the IRS with real- bers of Congress with current informa- dition, our work prevented almost $1.6 time input allowing the IRS to make im- tion regarding the status and success of billion in recovery rebate credits from provements to informational notices and the IRS’ economic stimulus and recovery being issued to almost 6.4 million tax- tax form instructions before they were rebate efforts. Our efforts identified over payers who were not entitled to receive a sent to taxpayers. The IRS was also able 533,000 eligible individuals who had not recovery rebate credit.1 Deann L. Baiza John L. Hawkins Russell P. Martin Deann L. Baiza is the Audit manager John L. Hawkins is a Senior Auditor in Russell P. Martin is the Director, of the TIGTA office in Kansas City, TIGTA’s Kansas City, mo. office. John Electronic Tax Administration, Returns missouri. ms. Baiza audit group is part started his career as an accountant in Processing and Accounts Services, of the Electronic Tax Administration, private industry and joined the IRS located in Stoneham, mass. mr. martin Returns Processing and Accounts Services Inspection Service in 1977. In 1984, is responsible for managing and directing directorate and conducts multi-faceted mr. Hawkins joined the IRS as a audits of IRS individual tax return reviews of IRS return processing and Revenue Agent in the IRS Examination processing. mr. martin oversees three account settlement activities. Division. mr. Hawkins later returned to offices located in Cincinnati, Ohio, most recently, her staff was the Inspection Service and transitioned Kansas City, mo. and Austin, Texas. received the PCIE Award for its work to TIGTA in 1998. During his time mr. martin began his federal on the Economic Stimulus Act of 2008. with TIGTA, mr. Hawkins participated career in 1989 working as an Auditor ms. Baiza started her career with the IRS in many high impact audits of the IRS with the Inspection Service in Andover, Inspection Service as a Staff Auditor in and served as the Lead Auditor on two mass. mr. martin then joined TIGTA 1989 in Kansas City, mo. and joined of TIGTA’s reviews of the Economic in 1998 and held positions including TIGTA in 1998 before becoming an Stimulus Act of 2008. senior auditor and audit manager before audit manager in 2000. mr. Hawkins graduated magna being promoted to director in 2008. mr. ms. Baiza received a bachelor’s Cum Laude from Avila University in 1975 martin received a bachelor’s degree in degree in accounting with a minor in where he received a bachelor’s degree in accounting from Nichols College. economics from Northwest missouri accounting with a minor in economics. State University. He is a Certified Public Accountant and a member of the Association of Government Auditors. Visit www.ignet.gov 5
  9. 9. Department of Defense Office of Inspector General [OUTREACH] Marshalling Whistleblower Protection Protecting the whistleblower process is one of the most important duties of an Inspector General By Eric B. Kempen and Andrew P. Bakaj The Department of Defense Inspector General has a mission to promote integ- rity, accountability, and improvement of the Department of Defense personnel, programs, and operations in support- ing our warfighters. Critical in achiev- ing this is providing a method of com- munication for Defense employees who witness “wrongdoing.” The IG provides this avenue. Whistleblower complaints arrive through a myriad of avenues such as whistleblower stakeholders, IG hotlines, component IG referrals, and congressional inquiries. The importance of whistleblowing, especially in the DoD context, in supporting and protecting warfighters from inefficient, ineffective, and often illegal activities that disrupt their operations is best illustrated by the story of Ernest “Ernie” Fitzgerald, a DoD Senator Charles Grassley and Mr. Ernie Fitzgerald whistleblower whom Senator Charles E. Grassley of Iowa once described as “the Fitzgerald’s testimony, President Richard mental in the enactment of the Civil father of all whistleblowers.”1 m. Nixon directed that he be fired. “It Reform Act of 1978, a precursor to the mr. Fitzgerald worked as a was reported that Nixon told aids to, ‘get Whistleblower Protection Act of 1989. management systems deputy for the rid of that son of a bitch.’” In executing The WPA exists to ensure that Department of the Air Force where he the president’s order, mr. Fitzgerald was federal employees are free from prohib- was responsible for the development ultimately terminated by Defense Secre- ited personnel practices, including retali- of improved management controls. In tary melvin Laird.2 ation for whistleblowing. Pursuant to the 1968, mr. Fitzgerald reported a $2.3 bil- Because of his candor and com- Inspector General Act and Executive Or- lion cost overrun in the Lockheed C-5 mitment to the truth, mr. Fitzgerald was der 12674, executive branch employees aircraft program. As a congressional wit- a driving force for whistleblower protec- have a positive obligation to report fraud, ness before the Joint Economic Commit- tions. mr. Fitzgerald continued to fight waste, abuse, and corruption. Further, tee, he rejected the advice of Air Force a four-decade long campaign against for making such a disclosure, federal officials and testified with candor and fraud, waste, and abuse within the De- managers are prohibited from taking or transparency about billions of dollars in partment. Consequently, he was instru- threatening to take any adverse person- avionics program cost overruns and other nel action as reprisal.3 technical problems. In response to mr. 2 Vest, Jason, maverick moves On, Government Protecting the whistleblower Executive (April 15, 2006), 1 152 Cong. Rec. S1780 (daily ed. march 06, http://www.govexec.com/features/0406-15- 3 Executive Order 12731 (October 17, 1990). 2006) (statement of Sen. Grassley). /0406-15na2.htm See also Whistleblower Protection Act of 1989. 6 Journal of Public Inquiry
  10. 10. process is one of the most important du- Section 2302 (c) Certification Program. ties of an IG. It is a means of support- Congress enacted Title 5 Sec- ing the sourcing of administrative and tion 2302 (c) of the United States Code Certification Program criminal investigations and audits. With in 1994 as a response to reports of wide- respect to civilian DoD employees, the spread ignorance in the federal work- DoD IG’s Civilian Reprisal Investigation force concerning employees’ right to be OSC will certify an agency Section Directorate is committed to supporting free from retaliation as a result of whis- 2302 (c) compliant if the agency and training its employees in whistle- tleblowing. The provision states that the meets the following five require- blower rights and responsibilities. CRI head of each agency has the responsi- ments: facilitates this through the Office of Spe- bility to ensure “that agency employees cial Counsel’s Section 2302 (c) Certifi- are informed of the rights and remedies 1. Place informational posters cation Program. DoD component IGs available to them” for making a pro- in all personnel and EEO of- are encouraged to explore the OSC cer- tected disclosure. Accordingly, the DoD fices and in other prominent tification process because, as mr. Fitzger- IG is responsible for “the prevention of places throughout the agency; ald demonstrated, whistleblowers are an prohibited personnel practices” and the invaluable resource in the oversight of creation of a workplace environment in 2. Provide written materials to warfighter operations. Accordingly, IGs which retaliation against employees for new employees as part of the must set the example in protecting its making a protected disclosure is prohib- orientation process on PPPs, sources of those individuals who report ited.4 the WPA, and the OSC (OSC “wrongdoing.” OSC’s 2302 (c) Certification has created informational ma- Critical in protecting whistle- Program allows federal agencies to meet terials, including an outline blowing is raising awareness. CRI pro- their statutory obligation to educate of PPP rights and remedies); motes this through three methods: out- their workforce about the rights, respon- reach, investigations, and training. Each sibilities, and remedies available to them 3. Provide annual notification of these is interrelated and all support the under the WPA. The DoD IG has par- to current employees about investigative mission. Without “investi- ticipated in the certification process since PPPs, the WPA, and OSC’s gations” marked by independence and September 2002. As a result, both new role in enforcing these laws integrity, outreach and training cannot and current IG employees are informed (OSC has made available modify management behavior. Out- of their rights under the WPA. examples of letters sent to reach is conducted in order to educate Failure to inform federal em- agency employees by agency strategic stakeholders about the mission ployees of their whistleblower rights and heads, outlining rights and of CRI, the basics of whistleblowing obligations hurts the DoD, our war- remedies under the WPA); and whistleblower reprisal, and to ulti- fighters, and the federal government as mately generate complaint 4. Train managers and supervi- referrals. CRI actively in- sors to ensure their under- vestigates whistleblower standing of responsibilities reprisal complaints not under the PPPs and whistle- only to educate witnesses blower protection provisions and responsible manage- of Title 5. (OSC can provide ment officials alike in speakers for training and a whistleblowing rights and Power Point presentation); and responsibilities, but also to ensure that DoD civil- 5. Provide an OSC Web site link ian employees who blow via the agency’s intranet and/ the whistle are protected or Web site.1 from reprisal. CRI ac- 1 www.osc.gov/outreach.htm (Accessed tively trains DoD IG su- pervisors, managers, and on may 15, 2009). new employees though the 4 Title 5 USC § 2302(c). Visit www.ignet.gov 7
  11. 11. a whole. We see the importance of this ees with the understanding that: Eric B. Kempen in today’s current Global War on Terror 1. It is their responsibility to come for- operations whereby the Defense Hot- ward when they witness a violation line provides an avenue to report fraud, of a law, rule, or regulation; waste, and abuse. Defense whistleblow- 2. There is a place, such as an IG, for ers have prompted investigations and au- federal employees to turn to when dits into numerous mission critical func- they witness fraud, waste, or abuse; tions and activities that directly impact and the war-fighter. 3. mechanisms are in place to both: protect their identity after disclosing a violation of law, rule, or regula- tion; and investigate reprisal actions against them by management. Eric B. Kempen is an Investigator on Further, compliance with Section 2302 the Procurement Fraud Reprisal Team, (c) certification achieves three goals: Civilian Reprisal Investigations for the 1. Allows source protection; DoD IG. He graduated Summa Cum 2. Alerts and prevents potential system- Laude with a bachelor’s degree from the atic agency issues; and University of maine in 2005. mr. Kem- 3. Corresponds with the Obama Ad- pen earned his master in Public Admin- For instance, the Defense Crim- ministration’s policy and practice for istration from Syracuse University max- inal Investigative Service vigorously in- openness and transparency. well School of Citizenship and Public vestigates GWOT-related allegations As mr. Fitzgerald demonstrated, whistle- Affairs in 2008. involving matters such as bribery, theft, blowers are critical in reporting wrong- and procurement fraud. In addition to doing and we, as federal agencies, have a Andrew P. Bakaj investigating allegations of fraud, waste, responsibility to educate our employees and abuse; in 2008 DCIS launched a of their rights. Employees who are edu- proactive project, which is analyzing over cated in whistleblower rights and respon- $14 billion in payment vouchers related sibilities, and particularly of the protec- to U.S. Army purchases in Iraq. more- tions afforded to whistleblowers, will over, the DoD IG has numerous ongo- be more confident in reporting possible ing Iraq-related audits including contract violations of law, rule or regulation, gross surveillance, contract payments, and ac- mismanagement, gross waste of funds, quisition of armored vehicles. abuse of authority, or a substantial dan- Compliance with Section 2302 ger to public health and safety. (c) certification provides federal employ- As a former Defense official once said, the actions of an Inspec- Andrew P. Bakaj is an Investigator tor General are to “reinforce the and the team leader of the National message that we will vigilantly Security Reprisal Team, Civilian protect our soldiers, airmen, and Reprisal Investigations for the DoD marines from those who seek to IG. mr. Bakaj provided oversight over defraud them and will hold ac- the National Security Agency’s first countable anyone who betrays substantiated reprisal investigation the public trust.” We, therefore, resulting in the agency’s first disciplinary urge other DoD organizations action against an NSA official for and federal agencies alike to be- reprisal. mr. Bakaj earned his bachelor’s come Section 2302 (c) compliant degree in International Affairs at George and consider the OSC as a valu- Washington University and attended able resource for achieving this Syracuse University College of Law to important goal.1 earn a J.D. 8 Journal of Public Inquiry
  12. 12. New Mexico Human Services Department Office of Inspector General [INVESTIGATIONS] The Desk Audit: How a Supervisor Can Help the Struggling Investigator Just how much time does the investigator have to work on any one case? By Inspector General Randy D. Scott As a supervisor I find it frustrating when an investigation is stalled and appears to be going nowhere. If it is not a par- ticularly difficult category of investiga- tion, I have to be concerned about the investigator. Is the case an anomaly or is it typical of the majority of cases car- ried by the investigator? One method I use to help make such a determination is the desk audit process. When using the desk audit, I need to keep the limitations of what I call the “investigative box” in mind. Certain unavoidable factors im- pose limits, (the sides of the box). • Box Side 1: There is a limited amount duct a desk audit I need to know if the Scheduled annual leave of one -40 of time to conduct a criminal, ad- investigator has a realistic understand- week ministrative, or civil inquiry. ing of the amount of time it will take to Scheduled court appearance es- -40 • Box Side 2: There are a limited num- successfully resolve the case. Is the time timated by the AUSA to be one ber of personnel who can be assigned estimate realistic given the number of week to any one case. leads to be completed? my experience as a case agent and as a supervisor should Quarterly required legal training -8 • Box Side 3: There is a limited amount of money that can be spent on any allow me to make a good estimate. Do I Quarterly required firearms and -8 one case. have a good understanding of the limited unarmed self-defense training • Box Side 4: There are laws, regula- number of hours that are available to the Physical fitness incorporated -36 tions, and policies that limit how an investigator? Just how much time does with lunch hour three times per investigation can be conducted. the investigator have to work on any one week case? Do I remember all of the demands Planned surveillance in support -40 placed on a case agent? Time Let’s look at a possible work of a major investigation The amount of time an investigation is Total available hours 428 schedule for a three month period of taking may be the biggest discussion item time for a federal investigator working a I have with an investigator. New cases If the investigator has 428 available hours 10 hour investigative day. Three months are reported and need to be assigned. for 25 assigned cases that represents about represents about 60 workdays, multiplied Certain cases have a higher level of vis- 17 hours, or roughly two days per case by 10 hours per day, yields 600 potential ibility inside and outside the organiza- per quarter. Not all that much time and work hours per quarter. Now let’s be- tion. As a supervisor, I am expected to it includes those administrative hours for gin reducing those potential work hours keep things moving and to guide or push documenting interviews and assembling with the other time demands placed on investigators as needed. When I con- reports. Also, this assumes there are no the investigator. Visit www.ignet.gov 9
  13. 13. special assignments from the front office, worked on this category of crime or if productive investigator for a desk audit sick leave, or any other unplanned events the investigator has worked, for example, on an average of 90-120 days, just to to interfere with the work schedule. only on major fraud cases for the last five make sure the assigned cases are moving years. Is the investigator making full use towards completion. This is the oppor- Personnel of the laws, rules, regulations, and pro- tunity for me to make sure the investi- Normally, I assign a new investigation cedures available? For example, could gator is working toward the goals and to one investigator to see it through to a federal grand jury subpoena provide objectives of the squad, the office, or the completion. To successfully complete a needed records if probable cause for a organization overall. case or to move a stalled investigation search warrant has fallen short? If a sus- For an unproductive investiga- forward, the investigator may need more pect is in custody, has the investigator tor, I find that 90-120 days is too long. personnel to assist. prioritized the remaining work to meet Here is where the standard file review Is surveillance required? Are speedy trial requirements? technique is modified for use as a per- there a large number of witnesses to be All investigators have to deal formance improvement or development interviewed? Will a search warrant be ex- with the limits imposed by the investi- plan. I schedule a development plan file ecuted and multiple investigators needed gative box. But sometimes, these day-to review at least every 60 days. If problems for several days? If so, where will I find -day challenges can be overwhelming for persist, I could schedule it at a 45 or 30 those personnel to help in the investiga- an investigator. As a supervisor, I become day interval depending on the investiga- tion? concerned when deadlines are missed. tor and my comfort level with his or her Unlike popular British detec- What do I need to do when it appears work. tive dramas, there is usually not a chief cases do not seem to be moving toward Just like the regular desk au- constable, multiple detective sergeant completion? When other investigators dit process, the development plan desk constables, and several shifts of detec- start to complain that they are always audit starts with the investigator. The tive constables devoted to a single in- getting the new cases coming through the case agent creates a list of all assigned vestigation. Even if extra personnel are door, what is my response? If the AUSA cases with the date the investigation was available for short periods of time, very calls and wants to know why subpoenas opened and assigned. The investigator quickly they have to return to their own have not been delivered or key witnesses lists the major allegation (such as fraud case load. interviewed, how do I respond? against the government over $50,000). As a supervisor, I get a variety of The case agent then writes a one to three Money clues from a variety of sources that I have sentence summary of the investigation There are always budget limitations in an unproductive investigator. They may to date along with a summary of the any organization and for every case. If come from other members of the squad, planned investigative activity. The inves- the investigator and I believe 24 hours of my boss, outside sources or even from tigator estimates the amount of time that surveillance of a suspect is required and the investigator. Every once in a while, will be devoted to that particular investi- the surveillance team requires an airplane, a case agent says “I’m overloaded and I gation during the next review period of is funding available? While the investi- need help. I don’t know what I should 60, 45, or 30 days. This time estimate gator is enthusiastic about the case, can be doing on these cases.” cannot exceed the available hours for the I convince the front office that expensive next desk audit time period and must in- air surveillance is a good investment? The Desk Audit Process clude all of the other time commitments What other less expensive in- Rather than waiting for the clues to required such as annual leave and train- vestigative techniques might I suggest to come my way, I have found that use of ing. help resolve the case or move it forward? the desk audit process is the best early In theory, each investigation warning system to identify the unpro- should have some investigative activity ductive investigator. It helps me start the during the review period. As a practical Laws, Regulations, and process of figuring out why there might matter, that is not always possible. Some Policies be a problem. cases will have had no investigative activ- Does the investigator understand the ele- The desk audit can provide the ity during the review period. There may ments of the offense under investigation mechanism to help an investigator navi- be a logical explanation for the lack of or the allegations? I need to remember gate around the fours sides of the in- activity. It is nonetheless an opportunity if this is the first time the case agent has vestigative box. I schedule the average for me to discuss with the investigator 10 Journal of Public Inquiry
  14. 14. what is happening especially if there has ing. A pattern forms. I may decide the the upcoming workday, again with ref- been no activity for more than one re- investigator is overloaded and some cases erence to specific cases. This can best be view period. need to be reassigned or closed. Or, I done by an e-mail sent to me. Now back to the investigative may decide the agent is not working to However, the investigator is not box. When a case is apparently stalled, full capacity and I need to provide spe- done. The process is followed by a 5 to I must examine the four sides of the box cific guidance for each case. 10 minute discussion with me that allows for that particular investigation. Has Keeping in mind the time lim- me to quickly review and provide any there been sufficient time for the inves- its imposed by the investigative box, the needed clarification. Since the planned tigator to work on a particular case? case agent and I agree on milestones and work references specific investigations, I Is surveillance required but oth- deadlines that are set or adjusted from a can review the last desk audit worksheet, er personnel have not been able to par- prior desk audit. At the end of the desk as needed. After our brief discussion, I ticipate? Do I need to assign additional audit, the investigator will have a clear can make comments in a reply e-mail, personnel for specific days to assist in the understanding of exactly what needs be send it for confirmation to the case investigation? Is there another investiga- done for each case. The investigator and agent, and file it under the name of the tive agency with potential interest in the I have developed a workable and agreed investigator for future documentation. case that could contribute personnel even upon action plan. Most investigators, being inves- for a period of time? Are specialized fo- Since the goal of the develop- tigators, can follow the trail at this point rensic personnel needed, which requires ment plan desk audit process is to pro- and realize I am documenting their work that I talk with another supervisor from vide the investigator an opportunity to on a daily basis. At this point, the in- another squad regarding scheduling? improve, I should see progress over a vestigator should be making a serious at- If funding is an issue, what are series of desk audit meetings. Once suf- tempt at work improvement to get out the specific requirements? Are funds ficient progress has been made and all from under the daily audit. needed for a short-term light undercov- investigations are back on track, I can re- Admittedly, the daily audit adds er operation or a sting operation? Are sume the 90-120 day routine or standard to the burden of an already busy supervi- special rental vehicles needed? Does a desk audit schedule. sor. Nonetheless, it is an investment that subpoena request require extra funds to Not every series of development pays off in the future when I have a more pay for copying expenses for the case file, plan desk audits quickly moves the un- productive investigator who requires less prosecutor, and eventually for the de- productive investigator back to the total- supervision. fense in a major white collar crime case? ly productive stage. Sometimes backslid- The development plan desk au- Has the investigator started the funding ing takes place. Sometimes the process dit process and the daily audit are de- request process and completed the neces- never takes at all. signed to restore an investigator to full sary paperwork to obtain funding? Do In such cases, a second option productivity, but if required, the audits I need to intervene with the administra- I can use is the intensive or daily audit. can also provide me with a well docu- tive office to get the request moving? Unproductive days can become unpro- mented record for future personnel ac- Has the case agent run into an ductive weeks and roll into a problem tion. unusual legal situation that I need to desk audit. The intensive or daily audit The desk audit process allows for discuss with the legal advisor for the of- allows for my daily interaction with the the regular review of investigative work fice or a supervisor in the U.S. Attorney’s investigator for a short but useful period that ensures the goals and objectives of Office? Do I need to remind the case of time. As with the other reviews, the the unit are being met. The supervi- agent of a change in the law or an or- process starts with the investigator. sor and the investigator have an agreed ganizational policy that either authorizes At the beginning of each day, upon strategy for the next review period or prohibits certain investigative tech- the investigator takes the first 15 to 20 whether it is 120 days, 60 days, or to- niques? minutes and prepares a summary of what morrow. It allows for periodic fine-tun- As the investigator and I work investigative activity was conducted the ing of investigations or daily mentoring our way through each case during the day before with reference to the specific and training for improved performance desk audit process, I develop a better un- cases involved. Next, the investigator of a struggling investigator.1 derstanding of exactly what is happen- lists a summary of what is planned for Visit www.ignet.gov 11
  15. 15. Randy D. Scott Sample Desk Audit Summary 1. Case name and number: Smith, John A. #123-456-789 2. Offense: Fraud against the government over $50,000 3. Allegation: An employee and cooperating witness alleged that over Randy D. Scott is the Inspector General the last six months, Smith filed false claims in excess of $10,000- of the Human Services Department in $12,000 per month against the government for work not done as Santa Fe, N.M. His office is responsible part of a contract for electrical repairs at a government installation. for statewide investigations, audits, 4. Investigation completed since last desk audit: The cooperating and financial recovery operations witness and three additional witnesses interviewed. Contract ob- regarding public assistance programs and tained and reviewed. Invoices submitted by Smith to date being professional standards investigations of assembled by accounts payable office but some invoices appear to be department employees. missing. Some invoices signed by persons other than Smith. Prior to his current assignment, 5. Planned investigation: The cooperating witness is willing to hire Mr. Scott was a security consultant for an undercover investigator posing as administrative assistant in the the Northrop Grumman Corporation accounting office of the company to work on a part-time basis. Li- in Albuquerque, New Mexico. He aison being conducted with AUSA to establish limits on undercover retired from the Federal Bureau of activity. Interview of witnesses and cooperating witness to be con- Investigation having served as a Special tinued. Search warrant affidavit for main office company records to Agent in Seattle and a Supervisory be discussed with assigned AUSA. Special Agent in San Francisco (Oakland 6. Time Estimate: Resident Agency). He subsequently a. 2 -hours- Finalizing undercover operation with AUSA was assigned to FBI Headquarters b. 45-60 hours- daily telephone contact with undercover in Washington D.C. working at the investigator and summary of investigative activity for the National Counterintelligence Center in next 30 days Langley, Va. Prior to his transfer to the c. 16-24 hours- interviews of company personnel FBI, Mr. Scott was a Special Agent of the d. 4-8 hours- final debrief of cooperating witness Naval Investigative Service assigned to e. 8-hours- preparation, legal review, and meeting with AUSA Memphis, Tenn., Agana, Guam, the USS regarding possible search warrant for documents. Forrestal, Charleston S.C., and Orange 75-102 estimated total hours of investigative work County Calif. and written instructions from supervisor on desk audit: Cancel plans for undercover operation. (Undercover person not currently available.) Concentrate on finishing interviews and seeking search warrant. Conduct trash cover of business dumpster with new agent on squad and include results in search warrant application. Estimate how many investigators will be needed for search warrant execution and interviews of suspect company officials. Recalculate time estimate for case for review period. 12 Journal of Public Inquiry
  16. 16. General Services Administration Office of Inspector General [OUTREACH] Three Ideas to Improve Effective Inspector General Access to Both Information and Individuals It has been said that knowledge is power; today, access is power By Inspector General Brian D. Miller Renewed interest in oversight and ac- countability, highlighted by implemen- tation of the American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5, has focused sharply on the need for transparency, effective oversight, and the roles of Inspectors General across the federal government. Transparency com- pels IGs to conduct robust oversight and thus commands federal officials to give IGs access to documents, individuals, and information systems. It has been said that knowledge is power. Today, access is power. IGs without access are powerless and cannot ensure transpar- ency. The ideas presented below would to all IGs; and (2) IG subpoena authority investigators may not find important ma- help to improve oversight and transpar- to include electronically stored informa- terial and results may be attenuated and ency by improving IG access. tion and tangible things. In addition, incomplete. Denial of access to employ- Congressional interest in the discussions are ongoing regarding other ees of contractors, for example, can pose role of IGs was shown in the ARRA pro- proposals put forth by the Task Force, unnecessary challenges as IGs attempt to visions giving IGs, among other things, such as additional amendments to the understand what really happened with additional authorities and responsibili- PFCRA and enhancement of Office of a contractor’s billing practices. On the ties, in matters involving ARRA funds, Inspector General authority to conduct other hand, having to notify the target of to interview contractor employees and computer matches. the existence of an investigation in order conduct whistleblower investigations. With respect to effective access to get his/her financial records can im- Congressional support for the IG func- to information and individuals, how- pede the conduct of that investigation. tion was demonstrated through enact- ever, some hurdles still remain that are In this article, I advance two ment of the Inspector General Reform not being addressed. Those hurdles are new ideas not previously offered by Act of 2008, which implemented several impeding the ability of the IG commu- the Task Force, and a third new idea to proposals suggested by the Legislation nity to ensure that oversight is as fully modify the Task Force’s suggestion on Committee of the National Procurement transparent and efficient as possible. Ac- IG subpoena authority. These ideas, in- Fraud Task Force, such as expanding (1) cess to both information and individuals dividually or collectively, would help to coverage of the Program Fraud Civil Rem- is essential for effective oversight. When ensure IGs and their staff have access edies Act and law enforcement authority access is delayed or denied, auditors and to the data and individuals necessary to Visit www.ignet.gov 13
  17. 17. perform their work. The first idea con- investigation and cause unnecessary and timidate witnesses. cerns timely access to financial records, undue delay. Inspector General subpoe- • Such premature disclosure can also an issue that arises frequently in investi- nas should be treated the same as grand prevent legitimate undercover work gations, without having to tell the target jury subpoenas, which are exempt from and make recovery of misspent funds about the investigation. The second idea the requirement to give the subject no- more problematic. These financial involves removing procedural roadblocks tice. transactions can be extremely com- to OIG access to electronic information The RFPA, which does not ap- plicated to trace and unravel, and systems, which can create needless de- ply to state or local governments, was advance notice can impede the gov- lays. The third idea focuses on ensuring adopted to create a statutory Fourth ernment’s forfeiture and other civil proper access to individuals who work Amendment protection for bank records remedies that are designed to ensure for federal contractors, by giving IGs ad- primarily in response to United States v. the minimization of unlawful losses ditional authority, without raising the Miller, 425 U.S. 435 (1976), where the of federal dollars. concerns that testimonial subpoena au- Court held there was no such protection. • The notice requirements can also thority seems to raise. Taken together, Grand jury subpoenas were excepted cause undue delay. As an initial mat- these ideas would be valuable aids to im- from the customer notice and challenge ter, if the government does not know proving the work of IGs as they strive to provisions in the RFPA because of the all the names on the account, the protect the American public from fraud, secrecy surrounding grand juries and a government must issue a subpoena waste, and abuse. concern that notice and challenge rights to the bank to identify the account might in fact harm the privacy of those holders. Then, after obtaining the 1.) “Don’t Tip Off the under investigation. As stated by the identities of the account holders, the Target” amendment to Supreme Court, the purposes served by government must issue another sub- the Right to Financial grand jury secrecy include preventing poena and comply with the notice Privacy Act escape, preventing tampering with wit- provisions for each account holder. Basic investigative techniques include not nesses, encouraging free disclosures by There is an additional minimum 15- “tipping off” a subject about an investi- witnesses, and protecting the innocent. day delay between sending the no- gation. Premature disclosure can lead to United States v. Procter & Gamble Co., tice to the customer and obtaining destruction of evidence, intimidation of 356 U.S. 677 (1958). the records, or a potentially longer witnesses, or flight. It can also preclude These factors apply equally well delay if the Department of Justice undercover work and provide an oppor- to IG investigations, which also can be decides to seek a court order, which tunity for the subject to manipulate his harmed by premature disclosure. Inves- delays notice for 90 days. If the De- finances to frustrate the government’s in- tigation records are covered by the Priva- partment of Justice seeks a delay terests. As an illustration, telling some- cy Act, which protects the confidential- or the customer files a challenge in one like Bernie madoff that he was un- ity of those records. In addition, timing court, the law enforcement agency der investigation would only give him an suggests that when Congress adopted the cannot obtain the records until the opportunity to hide or transfer ill-gotten RFPA, they did not consider the effect court issues a decision, a process that gains before the government had an op- on IG investigations. The IG Act was could take a significant amount of portunity to understand the full extent enacted on October 12, 1978 (P.L. 95- time during which the subject would of his crimes or freeze his assets. 452), while the RFPA was enacted on be free to move assets and otherwise November 10, 1978 (P.L. 95-630). With hamper the investigation. Current RFPA Requirements Pose a the passage of the IG Act and the more The RFPA also requires notification to Problem recent Reform Act, perhaps it is time to the subject within 14 days when records The RFPA currently requires IGs to pro- correct that apparent oversight. obtained under the RFPA are transferred vide notice to the subject of an investi- The requirement for notice to to another agency, which would appar- gation when issuing a subpoena for that the subject prior to obtaining his finan- ently include records transferred from person’s financial records, absent a court cial records can be detrimental to an in- an IG to the Department of Justice in order delaying such notice for 90 days, vestigation in several ways: furtherance of a criminal investigation. I before the IG can obtain those records. • Providing notice to a target can pro- know of no other law that requires noti- This notice requirement could harm the vide him an opportunity to destroy fying the subject when records are trans- or tamper with evidence, flee, or in- ferred to a prosecuting authority. 14 Journal of Public Inquiry
  18. 18. Because of the similarity in the law enforcement investigation— rectly, notify any person named in interests served by grand jury and IG in- 1. in the case of a grand jury subpoe- a grand jury or Inspector General vestigations, and the protections afford- na, shall be returned and actually subpoena served on such institu- ed the records, I suggest that Congress presented to the grand jury unless tion in connection with an investi- consider giving IGs the same exemption the volume of such records makes gation relating to a possible— from the RFPA notice requirement that such return and actual presenta- (A) crime against any financial grand jury subpoenas currently have, tion impractical in which case the institution or supervisory agency such that an IG does not have to notify a grand jury shall be provided with or crime involving a violation of target when a subpoena for his financial a description of the contents of the the Controlled Substance Act [21 records is issued. records; U.S.C. 801 et seq.], the Controlled 2. in the case of a grand jury subpoe- Substances Import and Export Act Proposed Language for “Don’t Tip Off na, shall be used only for the pur- [21 U.S.C. 951 et seq.], section the Target” pose of considering whether to issue 1956 or 1957 of title 18, sections Amend 12 U.S.C. 3413(i) and 3420 to an indictment or presentment by 5313, 5316 and 5324 of title 31, or read as follows: that grand jury, or of prosecuting section 6050I of title 26; or a crime for which that indictment (B) conspiracy to commit such a Title 12. Banks and Banking or presentment is issued, or for a crime, about the existence or con- purpose authorized by rule 6(e) of tents of such subpoena, or informa- § 3413(i) Disclosure pursuant to is- the Federal Rules of Criminal Pro- tion that has been furnished to the suance of subpoena or court order re- cedure, or for a purpose authorized grand jury or Inspector General in specting grand jury proceeding or law by section 3412 (a) of this title; response to such subpoena. enforcement investigation 3. in the case of an Inspector General (2)Section 1818 of this title and Nothing in this chapter (except sections subpoena, shall be used only for a section 1786 (k)(2) of this title 3415 and 3420 of this title) shall apply legitimate law enforcement pur- shall apply to any violation of this to any subpoena or court order issued in pose, and any subsequent disclo- subsection. connection with (1) proceedings before sure or transfer of records obtained a grand jury or (2) a law enforcement pursuant to that subpoena to the 2.) Explicit access to investigation by an Inspector General Department of Justice shall be ex- agency information pursuant to the Inspector General Act empt from the provisions of section systems by oversight of 1978, as amended; except that a 3412(a) and (b) of this title; authorities court shall have authority to order a 4. shall be destroyed or returned to Providing IGs with explicit, unrestricted financial institution, on which a grand the financial institution if not used read-only access to agency information jury or Inspector General subpoena for for one of the purposes specified in systems would remove a current road- customer records has been served, not paragraphs (2) or (3); and block to effective oversight of agency to notify the customer of the existence of 5. shall not be maintained, or a de- programs. The Federal Information Se- the subpoena or information that has scription of the contents of such curity Management Act and implement- been furnished to the grand jury or in records shall not be maintained by ing procedures, such as the controls pre- response to the IG Subpoena, under the any government authority other scribed in National Institute of Standards circumstances and for the period speci- than in the sealed records of the and Technology Special Publication 800- fied and pursuant to the procedures es- grand jury or by an Inspector Gen- 53A, require federal agencies to control tablished in section 3409 of this title. eral, unless such record has been access to their information systems. The used in the prosecution of a crime IG Act, in turn, provides that IGs are to § 3420. Grand jury information; noti- or to further a legitimate agency have access to all agency “records, reports, fication of certain persons prohibited administrative purpose consistent audits, reviews, documents, papers, rec- (a) Financial records about a customer with the Privacy Act. ommendations, or other material” re- obtained from a financial institution (b)(1) No officer, director, partner, lated to the programs and operations pursuant to a subpoena issued under employee, or shareholder of, or of the agency. Systems owners’ under- the authority of a Federal grand jury agent or attorney for, a financial standing of the types of access controls or by an Inspector General as part of a institution shall, directly or indi- required can result in limiting or delay- Visit www.ignet.gov 15

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