Politics & Policy

Year of the RAT

"Unprecedented transparency" might be slower and more opaque than you expect.

Before winning passage of his $787 billion stimulus package, President Obama gave a very broad promise of unprecedented transparency and accountability. His precise words to a joint session of Congress last month: “I have told each of my Cabinet, as well as mayors and governors across the country, that they will be held accountable by me and the American people for every dollar they spend.”

The promise of transparency has been essential for selling this package to the public. To keep it, Obama started Recovery.gov, a website that is supposed to remove the mystery as to what happens to the more than $500 billion in direct spending contained in the stimulus package. When cities receive money under the stimulus bill, mayors are to submit a certification that includes “a description of the investment, the estimated total cost, and the amount of covered funds to be used,” and that certification must be posted on the Internet. In theory, anyone with a computer will be able to study the use of funds.

But the Obama administration may leave citizens with less information than that description suggests. According to the guidance released by the White House Office of Management and Budget, they will be able to track the money only so far. The actual recipients of the money — contractors and subcontractors — need not be reported on the website. OMB Director Peter Orzsag’s memo of February 18 states:

Reporting requirements only apply to the prime non-Federal recipients of Federal funding, and the subawards (i.e., subgrants, subcontracts, etc.) made by these prime recipients. They do not require each subsequent subrecipient to also report. For instance, a grant could be given from the Federal government to State A, which then gives a subgrant to City B (within State A), which hires a contractor to construct a bridge, which then hires a subcontractor to supply the concrete. In this case, State A is the prime recipient, and would be required to report the subgrant to City B. However, City B does not have any specific reporting obligations, nor does the contractor or subcontractor for the purposes of reporting for the Recovery.gov website.

#ad#“There is no clear instruction that every level of contract should be disclosed,” said Jerry Brito, the creator of StimulusWatch.org and a research fellow at the Mercatus Center, in testimony Thursday before the House Government Oversight Committee. “If the government wants meaningful accountability, it is not enough for citizens to know that the EPA makes a grant to Florida, which in turn makes a grant to Miami. We also want to know that Miami made a payment to ACME concrete, which a local could recognize and flag as a firm owned by a city-council member’s son-in-law.”

Before Brito testified, the committee heard from its chief witness, Earl Devaney, inspector general for the Recovery Accountability and Transparency Board [RAT board]. Devaney, a respected, veteran IG, is now charged with the monumental task of monitoring stimulus spending for fraud and waste. His board will soon take control of Recovery.gov. But alarmingly, Devaney stated that it could take a full year to build a transparent database of stimulus projects on Recovery.gov.

“The federal government has never been particularly good at getting timely and reliable data into their systems, let alone sending it to one central location,” he said. A year delay would render the site nearly useless if stimulus money is spent quickly, as planned.

“I think that would be a real shame,” said Brito. “If the money is being spent now, we need folks looking at the dollars being spent now, to flag anything that might be inappropriate or that might be wasteful.”

Several congressmen also repeated Brito’s concern, that the White House apparently plans to omit contractor and subcontractor information from reporting transparency requirements. Devaney could only answer that he would like to include that information: “If it’s possible and it’s legal, then yes.”

Devaney is just getting started in his job, and he’s already far behind. He began his testimony with a joke, that he had no control over the naming of the RAT board. He then went on to admit that he has little control over anything else, either. His office, which will soon take control of Recovery.gov, will first need to become an office — to hire staff and find a physical location and a telephone number. Devaney said that after three weeks of asking the administration why certain government officials were chosen to sit on the RAT board and others were not, he still cannot even figure out who was responsible for making the choices in the first place.

The administration has talked a tough game on transparency, and on the wise use of stimulus funds. On Wednesday, Vice President Joe Biden told a group of state, county, and municipal officials that the administration will not tolerate misuse, promising to “show up in your city and say, ‘This is a stupid idea.’”

But stimulus spending has already begun, and the watchdog is starting off miles behind the money trail. Will the president keep his promise and make sure that Recovery.gov is a real and useful tool for following the money? Or will he let the site become a mere source of propaganda whose primary purpose is to make wild claims about jobs supposedly created and saved?

– David Freddoso is a National Review Online staff reporter and author of The Case Against Barack Obama.

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