The identity crisis threatening federal watchdogs

Independence is an imprecise term; it means different things to different people. The term is usually explained as being free from outside control or influence. But our decisions are often influenced by factors outside of our control, and we are persuaded by our personal preferences, prejudices and predilections.

Congress, nevertheless, clearly had something in mind when it enacted the Inspectors General Act, including provisions to protect an IG’s independence: Appointment of IGs “without regard to political affiliation”; hiring an IG’s own legal counsel and staff of their choosing; selecting IG audits or investigations without interference; and notice and reasons for termination.

However, the Congressional Research Service recently noted that “IGs, agencies, and Congress may perceive independence differently, and by extension, may interpret and exercise statutory authorities that affect independence in varied (and possibly divergent) ways.” Even the GAO similarly stated that “[a]ny effort to assess independence requires considerable subjective judgment, and reasonable people have room for disagreement.”

IGs aim to be independent, but there is little guidance on how to actually apply the principle in practice. IGs have been practicing their own brand of “independence” for decades, and in many ways. This gap leaves a vacuum into which others may interject their own interpretations, and there is no way to ensure consistency.

The Supreme Court recently stated in its Slaughter opinion that “independent agencies are not ‘independent’ in the sense that they are free of the President and thus responsive ‘only to the people of the United States.’” Ultimately, the Chief Justice concluded that “[s]ubordinates who exercise the president’s power are subject to removal by him. Then, and only then, can they remain accountable to the President, and the President to the people.” The IG Act even placed the Council of IGs hierarchically under the direction of the White House’s deputy director for management as executive chair.

One former IG wrote that “[r]eal independence . . . means freedom from improper interference in specific audits and investigations, paired with strict adherence to the IG Act, due process, professional standards, and the facts. It does not mean hostility to the administration, isolation from the agency, secrecy from elected leadership, or a license to pursue political agendas under the guise of oversight.” A current IG similarly contended that “[i]solating IGs from operational discussions simply to preserve the appearance of independence is exactly the type of thinking that allowed hundreds of billions of taxpayer dollars to disappear in the first place.”

On the other hand, another former IG analogized the role of IGs to umpires “calling balls and strikes,” and noted that recently confirmed IGs had been “co-opted” and made “part of the team.” He further stated that “officials who help implement a policy cannot later impartially evaluate whether that policy was lawful, effective, or properly executed.”

Meanwhile, some IGs have also touted the benefits of having  regular meetings with the White House/OMB “as they’re designing and implementing a program.” Under the prior administration, OMB guidance required agencies to proactively engage with their IGs (a “front-end exchange”) on new and existing programs — to “discuss program design, risk mitigation strategies, financial controls, and data, tracking, and reporting with OMB.”

This raises a host of important questions: Is it appropriate for IGs to pursue the goals on behalf of the administration — or does it require “blindness to policy priorities”? What is the proper relationship between IGs and their host agencies, or the administration? Is it okay to work “side by side” with agency officials — and at what point in the process? Is it appropriate to embrace an initiative or program, or a legislative achievement? Are there different standards of independence for IG investigations, versus for IG audits and evaluations? Is it okay for IGs to proclaim their support for a particular executive — or to criticize state officials run by an opposing party? Where is the line drawn, and what is the right balance between being too close to administration officials and being too insulated?

This is the fundamental struggle between the executive branch and Congress, which dates back to 1977. At that time, the Justice Department declared that the then-proposed IG Act would be “constitutionally invalid,” because IGs would be “subject to divided and possibly inconsistent obligations to the executive and legislative branches,” and it would “violate the doctrine of separation of powers.” That is the basis for the “identity crisis” that IGs are facing today.

It is time to move beyond talking past one another. To advance the conversation, we should transition the discourse from “independence” and move it toward one about “integrity” of the underlying oversight work. By focusing on the integrity of their work, IGs can earn the trust, credibility and confidence of their audiences — Congress, agency officials and, importantly, the American public.

Therefore, Congress should commission a panel of nonpartisan oversight experts to formulate parameters for trustworthy oversight reports and establish integrity standards. These standards should incorporate the following principles and values:

• Selection of discretionary oversight work. An IG’s oversight work (audits, evaluations, inspections and investigations) should be chosen in a disciplined, consistent, impartial and articulable manner. These judgments should consider whether oversight can: (i) provide meaningful value to improve operations; (ii) detect and prevent wrongdoing; (iii) help the agency to develop positive outcomes and beneficial results; and (iv) mitigate risks.
• Conduct of oversight work. An IG’s oversight work should be performed in a thorough and objective manner grounded in facts and evidence.
• Reporting of oversight work. IGs’ work should be reported openly with the greatest transparency permitted by law (with very limited exceptions for classified, privacy and proprietary information, and whistleblower confidentiality). IG reports should be presented accurately, comprehensively, fairly and dispassionately, and IGs must ensure that they make their own decisions about the wording and language of their reports; they should avoid advocacy, hyperbole and biased language.
• Timeliness of oversight work. IGs should issue reports in a timely manner, so that recommended actions can achieve positive outcomes and results; they should not be delayed or hindered unnecessarily.
• Practicability of recommendations. IG recommendations should be: (i) grounded in established criteria; (ii) directed toward correcting deficiencies, vulnerabilities and weaknesses; and (iii) focused on ways to improve agency programs and operations.
• Maximizing efficient use of limited resources. IGs should ensure that their offices are dedicating efforts toward the most significant and important risk areas facing the host agency and where they can have an impact and add value.
• Freedom from fear of retaliation or retribution. IGs must be permitted to pursue the facts wherever they might lead, without fear or favor.
• Conduct and behavior beyond reproach. IGs must hold themselves to the highest professional and ethical standards, so that their motivations and intentions cannot be called into question.
• Prohibition on campaigning or political activities. IGs should adhere to the requirements of the Hatch Act for “Further Restricted” federal employees — while not “abridging the freedom of speech,” as guaranteed by the First Amendment of the Constitution.

In establishing these integrity standards, the panel of nonpartisan experts should consider the two main IG functions: audits and evaluations, and investigations. With respect to the former, the panel may reinforce and expound upon the principles described in the Government Auditing Standards (“Yellow Book”) issued by GAO.

The panel should also consider whether there is a different set of principles for IG investigations when they work closely and collaboratively with components of the executive branch (including other law enforcement agencies and prosecutors), and thus guided by the priorities and policy goals of the administration.

In addition, Congress must ensure that IGs have sufficient resources to execute their oversight duties and responsibilities in accordance with these integrity standards.

Jay N. Lerner is a former inspector general of the Federal Deposit Insurance Corporation. He spent 31 years in federal service, including 19 years at the Department of Justice and six years at the Department of Homeland Security. He is an adjunct professor at George Washington University and American University.