Off With Their Heads

May 1, 2002

Even as the Enron scandal unfolds as the ultimate example of bad auditing, the Bush administration appears to be threatening the independence of the federal government’s auditors. Like auditors in the private sector, federal inspectors general must make sure that their agencies keep accurate financial records.They also investigate fraud, waste and abuse.

The IGs are supposed to be immune to partisan antics, but some may have been fired because they are either too independent or from the wrong party. In 1981, President Ronald Reagan fired all of the inspectors general appointed by his Democratic predecessor, Jimmy Carter. After an uproar in Congress, Reagan rehired some of the IGs, but they have been sensitive about political interference ever since—and rightly so.

The IGs straddle what one of them once called “a barbed wire fence” separating Congress and the president, their agency heads and the taxpayers. They must be ready to go to Congress and sometimes the news media with their findings, yet have to be accepted as team players as their agencies confront problems that arise in the ordinary course of auditing.

Above all, the IGs must be independent. Thus, even subtle signals of tampering or politicization have the effect of a boulder dropped in a puddle of water. Unfortunately, the boulders have been falling right and left over the past six months.

Take the firing of Louise Jordan, the inspector general at the Corporation for National and Community Service. As a presidential appointee, Jordan knew she could be forced to resign at any time. Still, she was blindsided on Feb. 14 when the White House summarily dismissed her. No one knows for sure why Jordan was fired, but the dismissal was so poorly handled that it smacks of personal or political payback.

The dismissal of NASA Inspector General Roberta Gross also looks like a threat to independence. Although NASA Administrator Sean O’Keefe gave Gross plenty of time to leave, he told her that she had been IG long enough. Suddenly, her seven years of battling cost overruns at one of the most complicated agencies in the federal government was seen as a liability, not an asset.

Gross’ dismissal alarmed the other IGs. O’Keefe isn’t just anybody. He is close to Vice President Dick Cheney and has been mentioned as a possible successor to Defense Secretary Donald Rumsfeld. Before taking over at NASA, O’Keefe held one of the most senior posts in government—deputy director of the Office of Management and Budget. That he showed his IG the door only a few weeks after taking charge set a disturbing example for other agency heads.

O’Keefe rightly argues that the IGs are not appointed for life, but he’s wrong about what Congress wanted when it passed the 1978 Inspector General Act. Congress did not want the IGs to come and go with the political or administrative winds. Rather, it presumed that the IGs would serve until they, not the president or agency heads, decided it was time to go.

Even gussied up as resignations, the dismissals of Jordan and Gross suggest that the Bush administration may view IG posts as little more than an opportunity to reward the Republican faithful. Although its IG appointments have been sterling, most notably in the case of Russell George, Jordan’s replacement, the administration seems to believe that IGs are just one in a long list of positions that can be emptied at will.

Turnover is only one worry the IG community faces. The government’s Joint Financial Management Improvement Program has recommended that most federal agencies create audit committees that would have the power to review the work of IGs. Unlike the private sector, where such audit committees are completely independent of corporate management, the government audit committees might actually include heads of agencies or their political representatives. If Kenneth Lay had been sitting on Enron’s audit committee, investors might still be waiting to hear about the collapse. The fact that the panel has not drawn a bright line between its proposed audit committees and agency management is troublesome.

Audit committees are a good idea for private corporations, especially when they oversee an independent auditor. But they would impose a layer of needless oversight in government—one that could be harmful, too. IGs must set their own course.

This is not the time to do anything that might weaken the premise for having IGs, whether by accident or intent.

Congress need not wait for a full-scale meltdown to remind the Bush administration that inspectors general should be viewed as allies in the effort to strengthen homeland security and control costs, not as congressional spies or political plums. That might mean giving them terms of service, as Sen. Susan Collins, R-Maine, has recommended, or toughening their protections. At the very least, Congress should give Louise Jordan and Roberta Gross an opportunity to explain their “resignations”—on the record.