The Waxman Report

by Henry Waxman; Joshua Green

  In recent years, the Oversight Committee has managed to identify and address all sorts of major problems: private contractors like Halliburton and its former subsidiary KBR overcharging the U.S. government in Iraq; insurers fleecing the Medicare prescription drug program, and others exploiting federal crop insurance for billions of dollars; government and private contractors who endangered the lives of Hurricane Katrina victims in New Orleans while still squandering hundreds of millions of dollars; boondoggle defense contracts worth billions more that bought Marine expeditionary fighting vehicles that don’t run and deep-sea Coast Guard vessels that don’t float. Through these investigations and many more, the Oversight Committee has held government to account and saved taxpayers billions of dollars.

  But as with so much else in government, the committee’s effectiveness has waxed and waned, depending on who controlled it and how they chose to use its powers. In fact, during my career, the Oversight Committee itself has shown how government can be a tremendous force for good—and how, when in the wrong hands, it can be an altogether different and harmful force.

  AS A FRESHMAN CONGRESSMAN, I WAS ASSIGNED TO THE ENERGY and Commerce and the Science and Technology committees. Given my interest in health and environmental issues, Energy and Commerce was a perfect fit. But although Science and Technology did important work, I jumped at the chance to switch when a spot opened up on Oversight (then known as the Government Operations Committee) after my first term.

  In 1977, Government Operations attracted some of the most active members of Congress, many of whom, like John Moss, were skilled subcommittee chairmen and masters of the art of oversight. Seeing them operate taught me a great deal that I later put to use as a chairman. And over the years, the committee performed a great deal of admirable work, investigating the progress of the war on cancer; pushing to open up government through the Freedom of Information Act; and bringing about procurement reform so that government (and thus taxpayers) pays less for goods and services. At President Carter’s behest, we also did much to help create two new federal departments, Energy and Education.

  But when the Republicans took over the House in 1995, the focus shifted away from strengthening government performance. House Republicans were consumed with bringing down President Clinton and viewed the powers of the Oversight Committee—in particular, the power to issue subpoenas—as valuable tools to that end. In fact, the Republican leadership considered Oversight so valuable and promising that they allotted it the largest budget of any committee in Congress.

  In 1997, Cardiss Collins of Illinois retired, making me the committee’s ranking minority member. At the same time, Dan Burton of Indiana took over as chairman. While I briefly held the hope that we might work together in a bipartisan fashion—I was no Clinton apologist and believed in strong oversight—that idea vanished quickly. Burton’s zeal to pursue any allegation against Clinton, no matter how trivial or farfetched, transformed the committee into a modern-day Star Chamber. (Before becoming chairman, Burton led a famous inquiry into the 1993 suicide of Vincent Foster, Clinton’s deputy White House counselor; convinced Foster was murdered, Burton re-created the event by shooting a pumpkin with a pistol in his backyard in an attempt to “prove” his theory.)

  Burton and the Republican leadership wasted no time in getting down to business. One rule about government oversight that had applied since Senator Joseph McCarthy’s Red Scare was that the chairman had to gain the consent of the ranking member before issuing a subpoena. If they disagreed, the committee would convene and vote on the matter. The majority party usually prevailed, but the process allowed for the minority to air its position before any decision went forward. The reason this rule had stood for so long is that subpoenaing a witness is a serious matter: The full force of the United States government demands that a citizen appear and reveal private information. Unlike a civil subpoena, a congressional subpoena cannot be challenged in court. When Burton took over in 1997, he overturned this long-standing precedent and gave himself unilateral power to summon witnesses and disclose information.

  And he immediately proceeded to abuse it. Burton became notorious for fishing expeditions, usually in pursuit of Clinton, in which he would subpoena witnesses left and right, cavalierly reveal embarrassingly personal details, and issue outrageous accusations that would garner newspaper headlines across the country, but could rarely be substantiated.

  Among his passions was trying to prove that Clinton was systematically selling out the country to China. One of his first truly appalling abuses came when he subpoenaed the financial and telephone records of a sixty-five-year-old Georgetown University professor named Chi Wang, whom his staff suspected of being involved in an improbable scheme to sell national security secrets to China in exchange for campaign contributions. But it turned out that they mistook Professor Wang for someone with a similar name. When I pointed this out, Burton’s chief investigator admitted as much—but then proceeded to imply that Wang might nevertheless be guilty of something: “Whether he deserves a subpoena or not, we haven’t decided.” Here was an unmistakable example of unchecked and abusive government power. And rather than apologize, Burton’s staff covered their retreat by casting aspersions on an innocent man.

  Such callous recklessness became typical. It was Burton who subpoenaed young Elian González to prevent him from being returned to his father in Cuba. Even after Burton stepped down, the Republican leadership continued to misuse the Oversight Committee, as in 2005 when they subpoenaed Terri Schiavo—a young woman left in a persistent vegetative state by cardiac arrest—to appear before the committee in order to prevent her husband from removing her from life support.

  Burton forced the Clinton administration to turn over millions of pages of documents and required high-ranking White House officials to be cross-examined by committee staff in depositions—but even so, he constantly complained of being stonewalled. At one point, to dramatize this claim for the television cameras, he had his staff erect an enormous “stone” wall (papier-mâché, actually) against one whole side of a hearing room, and then hung pictures of various people whom he alleged to be stonewalling. The hearing didn’t generate a great deal of attention. But this arts-and-crafts project ruined the real wall, which had to be torn down and replaced at taxpayer expense. And we were the committee supposed to police government waste!

  The turning point in the public’s perception of Burton came when he released transcripts of prison recordings of the private telephone conversations of Webster Hubbell, the associate attorney general and old friend of the Clintons’ who had been convicted for fraudulently billing his Arkansas law firm. Burton went on Nightline and Meet the Press to declare that the tapes implicated Hillary Clinton in the fraud. But my staff had carefully reviewed the same tapes and demonstrated that Burton or his staff had doctored the transcripts to omit key exonerating passages.

  After the Hubbell fiasco, the press stopped responding to most of Burton’s wilder allegations, and his hearings no longer made the front page. But by that time he had inflicted widespread damage. Along with exacting an incredible financial and psychological toll on the many innocent people he subpoenaed, Burton’s actions ran up a steep, and entirely unjustified, bill for the U.S. taxpayers. The committee’s minority staff calculated that from 1997 to 2002, the years of his chairmanship, Burton issued 1,052 unilateral subpoenas, most to probe alleged misconduct by the Clinton administration and the Democratic Party, at a total cost of more than $35 million.

  Regrettably, there are few internal or external checks on such willful abuses. The Republicans held power and wielded it in whatever way they saw fit—not only on Oversight, but on nearly every other committee as well. This amounted to a broad-scale abuse of the public trust. One of the hardest things in government, especially for a committee chairman, is to exercise judiciousness and restraint. Employing the full powers invested in that position is often necessary and appropriate. But our system has few restraints, and Burton’s lack of regard f
or rules and tradition undermined even these few. As Lord Acton famously declared, “Absolute power corrupts absolutely.”

  AS BAD AS THINGS WERE ON OVERSIGHT DURING THE CLINTON years, they got much worse when George W. Bush became president. Suddenly, the Republicans lost all interest in holding the executive branch to account. Their approach toward oversight changed entirely. When it concerned Bill Clinton, nothing was too small to investigate; but if it involved George W. Bush, it seemed as if nothing was so big that it couldn’t be ignored—even if doing so had global consequences.

  During the Burton years, the committee devoted more than 140 hours to hearings and depositions on whether President Clinton had misused his Christmas card list for political gain. But Republicans devoted fewer than ten hours to investigating reports that U.S. soldiers had tortured prisoners at Iraq’s Abu Ghraib prison. Nor would they investigate the White House’s role in misleading the public about Iraq’s weapons of mass destruction, the original rationale for the invasion.

  This absence of oversight encouraged a belief that no one would be held accountable for mistakes or even explicit misconduct, and fostered a culture in which officials throughout the Bush administration felt free to act with impunity. Congressional Republicans resisted overseeing the Republican White House, even as unequivocal failures began to mount. The tragedy of approaching oversight this way was that it neglected the committee’s true purpose: Republicans paid too little attention to serious government failures that would have benefited from scrutiny and oversight, and instead devoted their efforts to investigating things like Martha Stewart’s insider trading in pharmaceutical stocks.

  From the minority, my staff and I tried to make up for this willful avoidance of responsibility. We did this primarily by writing letters. Lots of letters. As the committee’s ranking member, I couldn’t hold a hearing. But I could request records and information from the White House or from government agencies, and draw attention to whatever issue we were examining by releasing the letter to the media, which often picked up the story. This became a useful strategy, deployed so often that The Washington Post dubbed me “The Man of Letters.”

  Oftentimes we’d be stiffed, never receiving a reply. But sometimes agencies would come through. And on very rare occasions, even the Bush White House would respond. For instance, just after the Enron scandal broke, I wrote to Vice President Dick Cheney requesting information about meetings the vice president had held with Enron’s CEO, Ken Lay. Lay was well known as a big Republican donor and a close friend of the president’s, so no Republican chairman had dreamed of holding a hearing. It looked as if Congress was going to ignore what was then the biggest bankruptcy in U.S. history. That is, until Cheney’s office responded to my letter—and revealed that the vice president had met with Lay far more often than the public was aware. This opened a new line of inquiry that set the media in frantic pursuit.

  At the same time, I formed a Special Investigations Division within the minority staff that interviewed whistle-blowers, pored over obscure government databases, and sometimes even went undercover. Because we were among the few people in Congress looking into Enron, whistle-blowers started coming forward. Taking a page from Attorney General John Ashcroft, who established a toll-free tip line to report suspicious behavior in the wake of the September 11 attacks, we established an Enron tip line and spread the word. This generated valuable new information, including nine videotapes of Ken Lay, the most damning of which captured him at a companywide meeting urging his employees to buy more Enron stock, even as he was frantically unloading his own holdings in anticipation of a share price collapse.

  The Special Investigations Division eventually documented Enron’s influence on the White House energy plan. It also released reports on the politicization of federal science and the growth of government secrecy. For one investigation, it purchased the curricula being used by federally funded abstinence-only programs and demonstrated that the Bush administration was spending hundreds of millions of dollars to mislead teens about the basic facts of reproductive health.

  Beginning in 2003, the Oversight Committee experienced a marked improvement when Tom Davis, a moderate Republican from northern Virginia, took over. Unlike Burton, Davis recognized the value of responsible oversight and tried, within the strictures imposed by the Republican leadership, to reassert Congress’s role. After the lobbyist Jack Abramoff was reported to have bilked Native American tribes and other clients out of millions of dollars, Davis agreed that the committee should act, and we jointly commenced an investigation into Abramoff’s contacts with the White House. Davis also agreed to hearings on Halliburton’s abuses in Iraq. In both cases, he became a partner in demanding information and pursuing the facts. But there were always limits on what we could do together. Though we were allowed to ask Abramoff’s law firm to document his contacts with the White House, Davis would not consent to demand that the White House release its own records. And though we requested Defense Department audits of Halliburton’s overbilling, we could not request documents that might have shed light on the role of Vice President Cheney, once head of the company.

  Nevertheless, these joint endeavors were highly productive. The purpose of such hearings is not just to hold people to account and shine a spotlight on those who have abused the public trust, although these are important functions. Our goal is also to learn why and how the government malfunctions when it does, and what can be done to fix the problem. Often, patterns emerge that shed light on a given failure. A clear pattern in our investigations of the Bush administration was the government’s growing use of private contractors to perform and even manage jobs that were once the direct responsibility of government. During Davis’s tenure, and then during my own, one of Oversight’s primary targets of inquiry thus became the vast and sudden increase of private contracting and the myriad ways—like “no-bid” and “cost-plus” contracts—in which these contractors squander taxpayer money.

  My concern originated early in the Iraq War, when Halliburton was granted an enormous no-bid contract. Halliburton had a record of overcharging the government when it contracted to build barracks and feed U.S. troops in Yugoslavia. On closer inspection, this practice proved widespread. Not only were company officials marking up the price of everything from laundry ($100 a bag) to Coca-Cola ($35 a case); their employees were staying at five-star Kuwaiti hotels while U.S. troops slept in tents. But the full extent of the waste only became apparent after we dug deeper. Private companies like Halliburton often subcontract to smaller firms, which in turn subcontract to others, charging a fee at each step along the way, usually a percentage of the overall cost. So as a job worked its way down through multiple subcontractors, each added his fee to the bottom line. This is known as “cost-plus” contracting. One Halliburton official told us that the company mantra was “Don’t worry about price. It’s ‘cost-plus.’” One needn’t be a math whiz to understand how quickly this system inflates costs and even gives contractors an incentive to run up enormous bills.

  The government compounded this problem by handing out no-bid contracts. The main argument conservatives make for wanting to outsource government work to the private sector is that the discipline of the free market will drive down the cost to taxpayers. But rather than have companies compete to provide the best price, the government did precisely the opposite, dividing Iraq into fiefdoms and dispensing no-bid contracts by geographic region. Halliburton got a contract for all the oil-related work in the south, Parsons in the north; Washington Group International did all electricity-related work in the north, while Perini Corporation got everything in the south. Had officials set out to design the least efficient way to rebuild Iraq they could hardly have topped this approach. It was analogous to hiring a different contractor to fix every room in your home and telling them, “Just fix what you think you need to and charge me 10 percent more than whatever it costs you—and feel free to pass the work on to whomever you like. Don’t worry about the cost.” Chances are you’d
find yourself paying top dollar for poor service.

  The reliance on private contractors was not limited to Iraq, nor was the no-bid, cost-plus approach. The same thing was rampant in the clean-up of Hurricane Katrina. Contractors would hire subcontractors, who would end up hiring a guy with a pickup truck to remove debris. Everyone added their fee, so everyone profited—except taxpayers, who were left with a $100 tab for a $10 job.

  Why was this being allowed to happen? And why didn’t the government clamp down? My investigators eventually discovered the answer. The job of oversight and management itself had also been handed over to private contractors, so there was no longer even a core of federal workers to monitor the situation. Government’s most important tasks—national security, disaster relief, war—were systematically being handed off to others. The Oversight Committee issued a report in 2007 showing that spending on private contractors had more than doubled under President Bush, from $203.1 billion in 2000 to $412.1 billion in 2006, while no-bid contracts had tripled, from $67.5 billion to $206.9 billion. Government auditors had identified 187 contracts during those six years—valued at $1.1 trillion—as being plagued by overcharges, wasteful spending, or mismanagement.

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  ONE OF THE GREAT FRUSTRATIONS OF LIFE IN THE MINORITY IS that the rules don’t offer many ways of blocking the kind of investigations that were Burton’s specialty. Majority power, especially in the House, is near absolute. But that doesn’t mean there aren’t constructive ways for members in the other party to agitate on issues that really do deserve investigation. An important lesson from the early years of the Clean Air fight was that even if you lack the strength to pass a good law, great benefits can derive merely from getting important information before the public. The most we could manage in 1985 was the Toxic Release Inventory; but the data this later produced, documenting the enormous level of airborne pollution, shifted the legislative debate and became a big step toward a landmark law. Similarly, while we couldn’t stop Burton, we could, even from the minority, compile a public record on neglected issues that needed congressional oversight.