INTRODUCTORY REMARKS

STUART BUTLER: Good morning. My name is Stuart Butler. I am Vice President for Domestic and Economic Policy Studies at The Heritage Foundation.

I want to welcome you to this Heritage Foundation symposium to assess the effectiveness of congressional oversight of government agencies.

In addition to passing laws and creating programs, a critical function of Congress is keeping a watchful eye on those executive branch agencies responsible for laws and programs and making sure that the people's will is being carried out and that the taxpayers' money is being used as efficiently and appropriately as possible.

At this symposium, we are going to explore three elements of this issue. First, we are going to discuss the role and purpose of oversight and why it is so important to the functioning of our government. Second, we are going to look at just how effective Congress has been in actually carrying out this function of oversight. And third, we are going to consider practical ways of improving the process of oversight in this country.

We have assembled a top-notch, bipartisan group of experts to look at this issue before an audience of experts who will be taking part in this session. Some of our panelists and audience come from Capitol Hill where, as members or as staff, they have been involved directly in oversight. Some come from the very specialized agencies of the government which review what goes on in individual agencies.

In addition, we have members of the press who have often tried to find out what happens in agencies -- or at least tried to keep an eye on the oversight function itself.

No matter which party you are a member of or where you are on the political spectrum, having a government, a White House, and agencies that function effectively is important for all of us and for effective government in this country.

The moderator for the program today will be Virginia Thomas. Ginni is a Senior Fellow for Government Studies at The Heritage Foundation. In that capacity, part of her job is to keep oversight of the oversight operations, to focus on government accountability, on congressional oversight, and on performance-based governance.

Prior to joining The Heritage Foundation just over a year ago, Ginni served as a senior leadership staff aide to House Majority Leader Richard Armey. There, she was actually responsible for the implementation of the 1993 Government Performance and Results Act, which is one of the major tools Congress has in its oversight function, to make sure that the act was implemented with all House committees. That is a feat, incidentally, that won her the Elmer Staats Award for accountability in government.

She also served within the executive branch at the Department of Labor under Secretaries Elizabeth Dole and Lynn Martin, and she was a labor-management attorney for the U.S. Chamber of Commerce.

She will introduce the first panel and moderate today's events. Ginni?

VIRGINIA THOMAS: Thank you very much, Stuart, and thank you all for coming. We are so excited that you are here and about what is going to happen today, which, I have to admit, is not completely predictable. This is a group which disagrees on so many things, but which agrees on how important it is to keep government accountable, honest, and efficient.

THE VALUE OF CONGRESSIONAL OVERSIGHT

Our first two speakers, we are proud to announce, are two former Congressmen who were very much engaged in conducting congressional oversight of the executive branch.

The first one is Mr. Lee Hamilton, a former member of Congress from Indiana, a Democrat, who now serves as director of the Woodrow Wilson International Center for Scholars. He is also with the Center on Congress of Indiana University. He spent 34 years in Congress and served as chairman of the House International Relations Committee, the Joint Economic Committee, the House Intelligence Committee, the October Surprise Task Force, and the Iran-Contra Committee.

He now serves on many boards, including the Brookings Institution, the United Nations Association of the United States of America, and the National Committee on U.S.-China Relations.

Mr. Hamilton is one of those men that, with members of Congress, is like E. F. Hutton -- when he speaks, they listen.

Please join me in welcoming Lee Hamilton.

LEE HAMILTON: Good morning to all of you. Thank you very much for inviting me to participate. It is a pleasure to be with you.

First, let me extend my commendation to The Heritage Foundation and to Virginia Thomas, Stuart Butler, and the others who have had a hand in putting all of this together. It is a marvelous topic. I hope I can make a few contributions to your understanding of it, although in looking over the panel members who are to follow, you have some real experts on how oversight ought to be conducted.

Everett Dirksen walked into the Senate Dining Room one day and asked the headwaiter what the soup of the day was, and the response was, "We have ox tail broth soup."

Everett Dirksen said, "Well, I really didn't want to start that far back."

So I am not going to start very far back this morning on oversight. I will just jump right into it. What I would like to do is ask myself a series of questions. I'll answer them, and I am sure you will have additional comments that will be helpful.

The first question is: What is the importance of oversight in the congressional process?

I happen to think that oversight is enormously important. You know that the two major functions of the Congress are to legislate and to conduct oversight. It is the legislation, of course, that gets most of the attention, and I guess it should in many ways. But I also think the conduct of oversight is a major responsibility of the Congress.

Now, what are the goals of oversight? They are familiar to all of you, I am sure, but let me identify them for you from my standpoint.

One, obviously, is to evaluate a program, to see if it is working. Is it functioning as the Congress intended? Is it carrying out congressional intent? That is one of the reasons, incidentally, that congressional debate may be more important than many people think, because members are trying to spell out during the course of that debate exactly what the intent of a given piece of legislation is.

Another purpose of oversight is to ferret out waste, fraud, and abuse, and to identify personal misconduct or malfeasance on the part of those who conduct the business of government.

Another purpose is to try to determine whether programs have outlived their usefulness. I suspect almost all of us would agree that the government very frequently passes a program that, at the time it is passed, tries to meet a real need, and may even function very well, but at some point, it outlives its usefulness. All of us know that one of the things that government doesn't do very well at all is to stop a program once it is underway.

Oversight also aims to ensure that programs are administered in a cost-effective way, and can help educate the American people about a particular government program.

What are the tools of oversight?

Formal hearings can be an important oversight tool. My own impression is that hearings no longer play the important role they did several decades ago in developing legislation. There has been a decline in the number of oversight hearings. I would like to see them re-established as an effective oversight tool.

Briefings can be an effective tool of oversight. They are usually confined to members and key staff. Frequently, the exchanges in briefings can be more important than those in a public hearing.

I have found that travel and visits to sites -- in my case, many trips abroad, but it would apply domestically as well -- are terribly important. There is just no substitute for staff and members being on site to look at how a program is developing.

Informal contacts are an enormously important means of oversight. As a matter of fact, as I look back over my own experience in Congress, I suspect informal conversations -- sometimes very quickly carried out in the hallway or in a quick visit to a department of government - have been among the best ways to learn about government programs..

Reports by the committees and by members are an effective tool of oversight. Using the GAO [U.S. General Accounting Office] and the inspectors general can be very useful as well. So there are a lot of tools available to us.

I think the Congress generally underestimates its power with respect to oversight. I don't think most members fully recognize the potential of oversight to be an effective tool of governance.

Agencies get very nervous when they find out that someone from Congress is poking around. I believe it is the business of the Congress to look into every nook and cranny of government. Vast amounts of money are spent for enormously large programs. If you look at the oversight hearings of the Congress in any given year, my suspicion is that we barely scratch the surface of what oversight ought to be.

Federal bureaucracies do not stay on their toes unless somebody is watching them. That may be a little cynical, maybe a little skeptical, but I don't think I am off the mark there. So the Congress has to come to appreciate the power that it has in oversight done properly.

Why should we conduct oversight?

One of the things that struck me again and again in Congress about the legislative process is the ambiguity of the language. To get an agreement among 535 people with very different approaches to the role of government on extremely difficult issues is tremendously tough. In order to get legislation through, you have to fudge the language again and again to achieve an agreement. When you do that, you leave a wide-open door for the bureaucrat to exercise his or her discretion.

In the best of all worlds, the real critics of the Congress say, "You folks up there on the Hill ought to draft the language with more precision." Of course, that is right. They should draft it with more precision. But it just becomes virtually impossible to do.

Let me spend just a moment on the question of why oversight, in my view, has declined. I presume most of you agree with that premise. Congress doesn't do as good of job in oversight as it used to.

There are several reasons for this. One is the congressional schedule. Members of Congress today are working a two- or a two-and-a-half-day week. They come in on Tuesday night; they vote. They are here Wednesday. They are here Thursday. And by the middle of the afternoon on Thursday, they are looking at the airplane schedules, trying to get out of here. Toward the end of a session, of course, the schedule gets a little more extended.

When you have such a short workweek, everything gets compressed, and the chairman of a committee cannot have a hearing on Monday. Chairmen have a lot of trouble trying to have a hearing on Tuesday. Wednesday and Thursday, the schedule gets so jammed that members can't attend many hearings. If a member is voting on legislation, he or she will probably be at the committee meeting. But a member is much less likely to attend an oversight hearing.

I can remember on those days -- Wednesday and Thursday -- my schedule would have 20 appointments in it. I would have to schedule time with my scheduler in order to out the appointments.

Oversight has also been weakened because the power of the authorizing committees has declined.

If I were a new member coming into the Congress today, I would want to be on the Appropriations Committee or Ways and Means. That is where the power is.

I think another factor in the decline of oversight is that it's tough work. It is unglamorous. It takes a lot of digging. It takes a lot of detail. The media is not much interested in it, unless there is a major scandal or crisis in government. And members really don't place oversight among their top responsibilities. They look upon constituent service, probably, as being their top priority because they know the importance of that in terms of re-election. They certainly recognize the importance of their legislative responsibilities. Oversight gets pushed down to priority number three, and I think that's pretty far down on the list.

So I think there are several reasons for the decline of oversight in recent years.

Let me conclude with a few very quick observations about how to improve oversight.

First, I think that, if possible, oversight should be bipartisan. It is not always possible, nor should it be, and you should not stop effective oversight just on the basis that it is not bipartisan. But, on the other hand, if you have bipartisan support, it is helpful.

It is also helpful to have a constructive relationship between the Congress and the implementing agency. That is not always possible; but if it can be done -- and in many cases it can be done because, after all, the executive branch in general has an interest in seeing effective implementation of programs -- I think it is helpful.

It is helpful if oversight is done in a systematic and regular way. One of the great problems in the Congress is that its attention span is very limited -- sometimes limited to what the headlines are in the papers -- but oversight can't be conducted that way. Oversight has to be comprehensive in order to be performed properly.

Oversight should also be coordinated. By that I mean coordinated internally. If one committee of the Congress is going in one direction on oversight and another one in a different direction, or if there is just a lot of duplication, the effectiveness of oversight is undercut.

There is no substitute for expertise in conducting oversight. Several of you, I know, have conducted major investigations. Those experiences are invaluable. Congress needs that expertise in order to do oversight right.

The Administration will sometimes complain, and I think with justification, that there is too much oversight. That can happen. If Congress gets into the business of micromanagement-- you often hear this complaint by the Administration -- oversight can become too intrusive.

I don't want to push that point too hard, but I do think a legislator has to be sensitive to the fact that oversight can get too detailed and not focus on the key issues of public policy. Sometimes oversight can become meddlesome and a nuisance.

I think you are better off in oversight if you can provide a lot of documentation. One of the most important things you can learn is to get things in writing, because time marches on and people's memories change and are not precise.

Follow-through is also important in oversight. Members and particularly staff should follow up. Members' involvement is important; and as I have suggested to you, that is not always easy, because members are distracted by many other things.

Clear support from the leadership of the Congress is also important. I have been pleased that Speaker [J. Dennis] Hastert has put an emphasis on oversight. Every Speaker ought to do that and push his committee chairmen to do it, in order to lead them to correctly carry out their oversight responsibilities.

Those are a few quick observations on oversight..

Thank you.

VIRGINIA THOMAS: Thank you very much, Mr. Hamilton. Next, Mr. Clinger has been a real friend to many of us in the room on oversight. Bill Clinger is a former member of Congress from Pennsylvania, a Republican. Right now, as was mentioned, he is teaching oversight at Johns Hopkins University.

He cares about public service and integrity in government and excellence in government. I see he is a member of the board of trustees for the Council on Excellence in Government, Citizens Against Government Waste, and many other boards.

He has had many awards in his day. He served for 18 years in Congress, and most specifically on oversight, he served for two years as chairman of the Government Reform Committee.

Please welcome Bill Clinger.

WILLIAM CLINGER: Thank you very much. Based on my tenure as chairman of the Government Reform and Oversight Committee, now the Government Reform Committee, I do have some fairly strong feelings about what works in oversight and what doesn't.

First, oversight is conducted through a variety of means. It is conducted by the authorizing committees. It is conducted by the Government Reform and Oversight Committee, which now has more legislative authority than it did, but it's principally an oversight committee. That is what we do. I think there are certain advantages in having a committee that really does focus almost exclusively on the oversight process, which is one of the two principal things that Congress is expected to do.

Take the government-wide jurisdiction which the Government Reform Committee has. We are able to look into every nook and cranny. We have jurisdiction over every agency, bureau, and department of government. I think that allows a more systematic and comprehensive process. I think it also tends to reduce the likelihood of duplicative oversight efforts. And it really enhances the ability to oversee more areas. I know when we get into areas, we don't focus on things. And it also, I think, is less onerous on the executive branch to meet demands for witnesses and documents when committees are basically not duplicating each other and holding hearings on the same subject.

I think the committee that has no legislative authority over the bureau or agency being looked at can be more objective, compared to the authorizing committees, which often have -- at least in my experience -- a somewhat symbiotic relationship with the agencies under their jurisdiction. That can affect the quality and the vigor of the oversight critiques and recommendations because the principal focus is on oversight, not on legislation. And that fosters more thorough preparation and a more systematic approach to the conduct of oversight.

There are, however, disadvantages, as I found in my tenure as chairman. Because we did not have legislative authority, we really had no power and had very little leverage to compel action by the committees which had legislative jurisdiction in order to implement whatever recommendations we might have.

And that, I think, highlights a very important need. You really have to have strong leadership support for the oversight effort. You really need to have leadership directly involved in determining what the oversight agenda is going to be, because without it, it is difficult to get authorizing committees to really pay any attention to the kinds of things that you have discovered in the oversight process.

I think another disadvantage of committees solely focused on oversight is the preponderance of less senior members. As Lee has indicated, oversight is not an entirely glamorous, sexy undertaking. It tends to be very hard slogging; a lot of it is done outside the view of media in most cases. Therefore, it doesn't really attract the kind of senior membership that it might, although I think this has changed in recent years. The committee now has significant legislative authority by virtue of the fact that three full committees were sort of crunched into one. So there is more legislative authority within the committee. But I still think it is not the first committee of choice if you are coming into the Congress.

The other point is, I think the members of the party which controls the White House are reluctant to serve on the committee and spend their time on the defensive, because that is what you mainly do if the White House is in control of your party. You are basically playing defense all the time. So people tend to get off the committee as rapidly as they can. I was on the committee for a long time, and I noticed people came and got off as fast as they could. I just sort of hung in there and played defense, and suddenly everyone else was gone and I was at the head of the gang, and then we got control. So it worked out for me.

I think the other point that Lee has made and I want to stress is that you really need to have an overall oversight plan. I think without it there is a tendency for oversight efforts to reflect, quite frankly, sometimes the egocentric interests of members, which don't really have much to do with looking at the broad picture of how the government is working. That leads to a loss of focus and creates some inconsistencies and major gaps in the overall oversight efforts.

I think Ginni Thomas is to be applauded because she really made the effort in the 104th Congress to get that kind of comprehensive overall plan and hold people to it and say, "These are the areas that we need to look at. We need to do it systematically. We need to do it on a regular basis. And over a period of time, we should look at every agency of government and determine how they are doing."

That I don't think really had ever been tried, to enforce that kind of operation, until the 104th Congress. As I said, oversight is not seen as career-enhancing, as compared to the ability to enact legislation, although I must say in my case, because of some of the high-visibility things that we were involved in, I did gain a certain amount of notoriety. I remember I used to walk through the Pittsburgh airport, and I had been on television, and I would be stopped and either they would say, "Go after those people. Get after them," or they would say, "What are you doing? Why are you doing all this nasty stuff?"

What is the current situation? How is it working from the perspective of one who has been there and done that?

As we know, all authorizing committees have or can have oversight as well as legislative jurisdiction. This was really recommended by the LaFollette Commission in 1948. The oversight is really limited to the agencies and legislation under the jurisdiction of that committee.

Now, the Reform Committee, as I said, alone has government-wide jurisdiction, and for a long time, it was the only committee in which the chairman alone had the power to subpoena documents and compel the presence of witnesses. I think that has changed.

But I think, because we have so many entities involved in oversight, it does create some confusion, and I think there have been some mixed signals on reform.

Let me just take one example. I think the most ineffective oversight that we did in the committee was on the Waco situation, which is now back in the news, and maybe that's because of the fact that we did not do as good a job in terms of oversight as we should have. The reason for that was that the oversight hearings were joint hearings between Judiciary and the Reform Committees, and we had very great difficulty getting a report out of those hearings. As I indicated, there was a somewhat symbiotic relationship between the Judiciary Committee and the FBI. They did not really want to be too harsh on the FBI at the time, and I think there was a sense on their part that we on the Reform Committee didn't know what we were doing, we were not that close to the operation.

So the result was that it took a year or more to get out the report because we couldn't get people to agree on what should be in that report, and when we got it out, it really wasn't a very effective piece. And I think, as I say, that may be one of the reasons why we are now revisiting the whole question of Waco and what went on there.

We are talking today about congressional oversight, but obviously everybody in this room knows it is important to recognize that Congress is only one of the many players in the oversight game. The work of the General Accounting Office is absolutely critical to the success of congressional oversight. Without the GAO, we would be basically going into any kind of oversight with an arm or two tied behind our backs.

Other players include the inspectors general and the chief financial officers. The FBI gets involved in oversight when criminal matters are alleged. OMB [the Office of Management and Budget] plays a critical role in oversight of the executive branch. The courts can be involved. And last, but certainly not least, the media has to be involved for effective oversight -- that is, activity-changing oversight.

As I have indicated, I think there is a need for a comprehensive, coordinated, and ongoing oversight plan which allows us to maintain focus. Such a plan also enables GAO to make better use of what are limited resources -- and they have become much more limited in recent years. It enables GAO to target its work on the matters in the leadership-approved oversight plan.

That is why I go back to that need for an overall plan which is signed off on by the leadership. GAO then can operate, deal with the items in that plan without having to respond to every member' s request for a GAO investigation or report, no matter how harebrained or off-the-wall that request might be. I have learned that GAO is really overloaded with a lot of requests that they constantly have to respond to. We need to have a focused plan which enables GAO to do its work much better.

Effective oversight demands exhaustive preparation prior to any hearings. Hopefully, this would include full cooperation by the agency or department that is the subject of the oversight; but unfortunately, it often does not because agencies tend to get rather defensive in the face of criticism. That is certainly true if it involves misfeasance or malfeasance of any sort.

The other thing I would point out is that there are very strong differences between oversight activities and legislative hearings. Oversight hearings differ dramatically from hearings on proposed legislation in that an oversight hearing is not a seminar or a tutorial on the subject that is under consideration. Nor, I have to say, is it necessarily an attempt to present a balanced point of view. Due process is not involved in oversight, particularly in terms of investigative oversight. Rather, it is designed to put on the public record the findings developed by the committee during its (hopefully) exhaustively thorough preparation, as well as to highlight the committee's recommendations for change. Also, it is designed to bring to the public's attention -- with media coverage -- the need for change.

So an oversight hearing is telling a story. The objective is to say, "Here is a problem," and then witnesses are going to demonstrate that problem -- maybe people who have been victims because the problem is so intense that it has hurt them. It is telling a story, and it is going to have a good beginning, a good middle, and an end. I think most of the time, you need to go into an oversight hearing knowing where you are going to come out, knowing all the questions that are going to be asked, and having your conclusions pretty well in mind before you go into it.

I think this often involves repeated hearings and ongoing monitoring of the agency involved. You just are not going to get executive department change unless you follow through. For an executive branch agency, an oversight hearing focuses their attention very dramatically. And oftentimes, it is the only thing that does. Oftentimes, the only thing that they respond to is the threat of a hearing, and then there will be some action taken.

Sometimes, despite repeated hearings, you still don't get the kind of action you want. But it doesn't work at all if you are only going in and having a single-shot sort of hearing to get big media coverage and then moving on to something else. It has to be consistent. It has to be systematic. It has to be sustained.

Lee already has said that bipartisanship is absolutely essential if you are going to have truly effective oversight hearings. But, unfortunately, I found that the politically incendiary issues which I had to explore -- the Travel Office firings, FBI "filegate" -- made this impossible. Once the situation becomes politicized, it affects all the rest of your work.

In other words, not only the political hearings were affected, but because there was distrust between the parties, it really affected the more mundane type of good-government things that we were trying to review. So you really had to work at trying to get bipartisanship. I did not achieve that, and I regret that.

Just two case studies, very quickly. One shows how the lack of oversight failed totally, and the other one, I think, was a modest success story.

First, I want to talk about the elimination of the Department of Commerce. Well, since the Department of Commerce is still around, I guess you can see which is the failure that I'm going to talk about.

The determination to eliminate the Department of Commerce was not based on any oversight hearings at all. It was based on the fact in the Contract With America that we had pledged to eliminate a Cabinet-level department.

There really was no case made prior to eliminate the Department of Commerce. The only reason the Department of Commerce was selected was because that was the department we were told that the Senate would consider eliminating. So that was the one we selected.

As chairman of the Government Reform Committee, my role was to be the ringmaster for this dismantlement, and it was a hopeless task. No oversight hearings were ever held. We built no support at the grass roots. In fact, we were surprised to discover a lot of grass-roots support for various elements of the agency -- Trade, NOAA, et cetera.

Secondly, and again, because no oversight hearings were held, we misjudged the support for the department among our very own members. I spent weeks in countless meetings trying to reconcile the conflicting points of view, but at the end of the day, I was unable to draft legislation that had any hope of getting a majority of Republicans to vote for it, much less the Congress as a whole. It was a failure because we didn't do the work necessary to build the kind of support for that effort.

On procurement reform, it was a whole different ball game, because here was an example of how the media plays a role. The media began to focus on $500 hammers and $5,000 toilet seats and $10,000 coffee urns and so forth, saying "Something is wrong with the procurement system here." They were publicizing this, and this got a lot of attention.

I remember our old friend, Gene Taylor from Missouri, was interviewed one time on St. Louis television, and he said, when asked about this, "Well, I am against the $500 hammer and the $10,000 coffee urn, but I haven't taken a position on the toilet seat."

There was a building feeling out there in the public that we needed to do something about procurement. What followed was two years of grueling oversight of the federal government's procurement process. It was a bipartisan effort which had the full cooperation of the White House throughout this whole effort and had full cooperation on both sides of the aisle.

What we found through this exhaustive oversight process was that the procurement process had become so complicated, arcane, and convoluted that people who might be interested in submitting or supplying stuff to the government just wouldn't do it. So we had fewer and fewer suppliers, which meant that there was less and less competition, and the price kept going up.

To make a long story short, as a result of the oversight, we were able to fashion legislation that had very broad-based support. We cut away a lot of the overgrowth that was in the procurement process, and hopefully, we are going to save zillions of dollars down the road.

There are some unique aspects of investigative oversight as compared with legislative oversight. The former is where the Congress goes after the three musketeers of government mismanagement -- waste, fraud, and abuse -- and where scandal often rears its ugly head.

The executive branch is much more likely to cooperate in legislative oversight but much less likely to be helpful on investigative oversight. That is the same with the congressional opposition party. I would say there was an exception: The Cox Committee, which dealt with Chinese espionage. This was a scandal investigation; was very bipartisan, and they issued a unanimous report. I would say that is very unusual.

By the same token, Congress tends to be more aggressive when it is controlled by the party in opposition to the party which has the White House. Examples would be the Watergate exercise, which was a Republican White House and a Democratic Congress. The other side is, of course, Whitewater with a Democratic White House and a Republican Congress.

When there is one party in control of both branches of government, I think effective investigative oversight is much more difficult. I found that to be true in the Travel Office investigation that we undertook. During the first few years of the Clinton Administration, we were unable to get any information whatsoever about getting witnesses or documents. It was only when we got the majority and had the subpoena power that we could compel production of documents and the presence of witnesses.

And this is not picking on the Democrats; I think it would have been the same had it been reversed.

But I am concerned about the increased invocation in these investigative exercises of executive privilege in resisting congressional oversight activities. The Clinton Administration has, I think, pushed the envelope in this regard.

I share Lee's concern that Congress tends to overdo investigative oversight. Trying to do too much, I think, lessens the ability and the effectiveness of Congress to deal with things. It doesn't get the kind of focus it should.

The debate about the abilities of Congress to oversee activities is really a debate about the separation of powers. And there is always going to be tension in that process; there is going to be a tendency to resist on the one hand and a tendency to push as hard as they can on the other.

I think Congress needs to be able to critique and recommend changes, but it should not be able to administer the laws it passes. Micromanagement is a real concern here. So I would agree with the Chadha decision, which does put some limits on Congress's ability to do that.

I strongly agree that Congress needs to resist executive branch efforts to broaden the scope of executive privilege claims. The ability of any administration to fence off areas from congressional scrutiny, I think, needs to be very carefully circumscribed.

Finally, I would just say that, in the final analysis, the real power of Congress to prevent, curtail, or change executive action seems now to be in the power of the purse, and that gives the Appropriations Committee enormous power. My problem with that is that their oversight tends to be somewhat ham-handed. It is kind of going after it with a blunderbuss rather than really targeting. So I would hope that we could somehow address that balance and get the oversight process a little more carefully lined up.

Thank you very much.

VIRGINIA THOMAS: I am going to save ten minutes for questions. You have two members of Congress here ready to answer your questions, but you must use the mikes and you must identify yourselves as to what office you are with.

GEORGE NESTERCZUK: I am George Nesterczuk with the Government Reform Committee.

Mr. Hamilton alluded to one of the problems with scheduling of members for hearings and the compressed calendar that we're working with.

Sir, do you have suggestions for getting more than a couple of members to show up at a hearing? If there are several weeks of preparation -- in some cases, several months -- and you have an agency's attention at that point when you come to the hearing, and only a couple of members show up out of maybe 10, I think that sends a message to the executive branch and the agencies when they see that.

WILLIAM CLINGER: Well, I know the problem. That is something you are never going to solve completely. What I would try to do was, at the beginning of each Congress, I would sit down with all of my members, both on the Democratic side and the Republican side, and get a sense of what they are interested in, and therefore try to fashion an agenda that would have the interests of the members in it as a whole.

I think you need to sit down with the members of the committee and really explain why this is important. A lot of members don't really recognize that. They really don't see much point in doing this. And I think it is important for the chairman of the committee or the subcommittee to sit down with members up front and say why he is going to expect them to be attendees at these meetings. Otherwise, it is pretty easy for them to slip off and do other things.

LEE HAMILTON: Just a few additions to Bill's observations. I can't imagine anything more frustrating to staff members than to work hard to develop the framework and the background for an oversight hearing and then not to have members show up. So it is a formidable problem for staff.

Bill's suggestions are good. Unfortunately, I think the media drives an awful lot of attendance at congressional hearings. I regret that, but it is a fact of life, so if you can get media attention, you are much more likely to get members to come.

I have had the experience, as any chairman has had many times, of going to a committee meeting, finding only one or two members there, and then saying to the staff director, "Let the members know that the television is in the room." Then, in about 10 or 15 minutes, attendance would increase dramatically.

So the media is part of it. But, of course, the media is not going to be interested in a lot of things. Calling members ahead of time or speaking to members ahead of time, I think, is an important thing for the chairman to do. If you see the member on the floor and say, "Look, we are having this hearing. I think it is a very important hearing. I would like for you to be there," that will help.

Giving a member responsibility in the hearing will help get him or her to come. In other words, if you can say to the member, "This is an area that I would like you to focus on, and I want you to carry the burden." Often members will come to a hearing and listen to the chairman talk all the time. They are not very anxious to do that. They want to participate. So let them know that they have a particular part of the investigation to pursue.

I also think contacting the interest groups that have an interest in a hearing can be helpful. Those interest groups can contact members and say, "Okay, this is an important matter to us; we would like you to be there."

So those are a few quick suggestions to get people there. But because of their schedules, it is not easy, and I appreciate that.

MARCUS PEACOCK: I am Marcus Peacock with the House Committee on Transportation and Infrastructure.

I think we will be talking about the Government Performance and Results Act later on. That is an act that requires agencies to identify key goals and measures that they are going to meet.

If you had to identify key goals and measures for a committee or subcommittee that does oversight, what would you suggest?

WILLIAM CLINGER: Well, I think the objective of oversight is to determine how effective you are, the cost, whether you are dealing with an excessive cost. You want to identify the oversight as a result in savings, which is certainly one objective.

If the oversight is to try and determine how you could form a better process for administering whatever the agency is involved with, that becomes a factor.

I think that the thing that worries me about the GPRA process is, it really depends so heavily on Congress to make it work. If Congress doesn't maintain its interest, if the Congress isn't there all the time, I think the project is going to fail.

We have had many attempts to try and reform government to work better and so forth, and various programs, zero-based budgeting and all kinds of efforts to improve the way government works. Most of them have failed, and I think this one could fail as well. I think it is a great opportunity to really begin to have Congress working as a partner with the executive branch in making government work better.

LEE HAMILTON: My view would be that every subcommittee and every committee knows what portions of government it is responsible for. I think it is the responsibility of that committee and that subcommittee to periodically review the performance of government under their statutes. So it has to be done in a very systematic way.

I suppose to some extent, you are going to be guided by complaints about the program or the managers of the program, and whether there have been excessive costs or some kind of misconduct involved. That will drive a lot of it, of course.

But I think, in order for the Congress really to fulfill its oversight responsibilities, you have to say as a committee chairman or a subcommittee chairman, "These are the statutes under my responsibility, and I am going to make sure that every two, three, or four years, I review those programs."

Now, priorities can be dictated by outside circumstances, but there are a lot of things going on in government that the media is not at all interested in that you might pick up on the basis of your contact with constituents or fellow members.

I think your responsibility is to look into those things. I sometimes used to worry as committee chairman that we weren't doing our job, because things were getting by us that we didn't know anything about. That is what I meant when I talked about having a systematic, comprehensive approach. You cannot be controlled by two or three members coming up to you and saying, "Well, I've got to look into this, that, or the other." You can't be controlled by an article that appears in a local paper. You have to have your own game plan.

VIRGINIA THOMAS: I'm sorry, we are out of time. Please join me in thanking our two Congressmen. (Applause)

Okay, we are moving on to the second panel.

ASSESSING CONGRESSIONAL PERFORMANCE ON OVERSIGHT

VIRGINIA THOMAS: Now we are going to talk about assessing congressional performance on oversight. What has this Congress been doing since January? Is the Congress accomplishing what it set out to do regarding oversight? Has Congress responded to emerging oversight opportunities? And is the Government Performance and Results Act an effective oversight tool or not? Is the Congress using it for maximum impact?

With me on this panel are two experts, friends and colleagues.

Jim Hinchman is right now the executive director for strategic planning at the National Research Council. Since May, Jim has been over there. Prior to that, he served for 14 years at the General Accounting Office, Congress's watchdog. He left after serving as the acting Comptroller General. He has had much experience doing congressional oversight from the inside. Before that, he worked for 15 years in various departments and agencies in the executive branch. He received a law degree from Harvard Law School. We are proud to have him join us today.

My other colleague and friend is Paul Light. He and I have been doing increasingly more things together in the think tank world. Paul is at the Brookings Institution. He is vice president and director of government studies. He is also senior fellow and director for the Center for Public Service. He is recognized as an expert on bureaucracy, on Congress, on the executive branch and management.

He is the author of several books, I believe, two of which I am really excited by -- The True Size of Government and The New Public Service.

Before that, he was a senior staffer at the Senate Governmental Affairs Committee. But most recently, before Brookings, he was at the Pew Charitable Trusts as director of public policy programs. He has served at the National Academy of Public Administration. He has been a professor at more universities than I remember. He got his Ph.D. at the University of Michigan. He is thoroughly enjoyable, and I think you'll look forward to hearing from him.

I am going to begin this panel's discussion, though. With the help of a very able assistant, Meg Mehan, over the last couple of months, we have looked at Web pages and press releases trying to assess what the 38 congressional committees doing oversight have been up to.

Which chairman said the following this year: "Letters of gratitude poured into my office, as did faxes and phone calls. People thought that Washington was listening, that government was working the way it should. There was an immediate feeling of optimism. With consistent oversight, something could be done to correct the behavior of an agency that for too long has been allowed to play judge, jury, and executioner in the lives of taxpayers." Can anyone think?

Yes, Senator [William] Roth wrote a book. It is this book, The Power to Destroy: How the IRS Became America's Most Powerful Agency, How Congress Is Taking Control, and What You Can Do to Protect Yourself Under the New Law.

It is a fascinating book for anyone who enjoys or appreciates oversight and what it takes to do oversight. Obviously, not all oversight is quite as visible and effective as Senator Roth's effort in 1997 and 1998. But today we are going to talk for a minute about the resources for oversight, what we have found that Congress has been up to since January in terms of oversight, and some conclusions.

I will say from the get-go that although our conclusions are preliminary, I will probably give the Congress a C-minus at oversight, for those of you waiting for the bottom line.

With a future paper issued by The Heritage Foundation, we hope to give credit where credit is due, point out missed opportunities, encourage more effective oversight, and stimulate a greater public awareness of what government is doing well and what it is doing poorly.

Let me take a moment to talk about the scale of the task. When I was working with the Congress, I don't think I appreciated what we were up against in terms of the executive branch. But taking a breather and pulling away from the furnace of Capitol Hill and being at The Heritage Foundation, I have had a moment to reflect and put some things together.

There are 194 engines for oversight up here. That includes all the House and Senate full committees and the subcommittees that have jurisdiction over executive branch agencies.

But what is Congress up against? You are up against a federal government that spends $1.8 trillion. That just seems too big to comprehend to anyone, I'll bet. When you think about it, in most of our nation's history, the federal government only spent up to $200 billion.

The agreement the Congress reached with the White House just recently ended up agreeing to spend $617.2 billion (in discretionary spending). As the Congressional Budget Office announced today, that is $37 billion over the 1997 Balanced Budget Agreement.

It is a massive spending machine that Congress is trying to oversee. When you compare the financial resources available to the Congress to do oversight of the executive branch, Congress only receives about 1/15 of 1 percent of the entire federal budget.

Now, let's talk about how much of that is devoted to the function of oversight. Not very much. No wonder it's hard. Putting aside all the practical problems that we just heard from the Congressmen, how about the size of government?

Let's say that the federal government is about 2.7 million people. Only 1 percent of those people, or about 30,000 people, belong to the legislative branch. And only about 1,200 of those 30,000 work for committees of Congress that do the bulk of congressional oversight of the executive branch. And those of you sitting in this room know how many of the committees' resources and people work on congressional oversight. I am troubled to estimate about 130 staff in the House and Senate focus on oversight of the entire federal government.

Now, you do have the General Accounting Office, which has over 3,000 staff and a budget of about $380 million, and that appears to be Congress's biggest resource. Although Congress underutilizes them, allies also exist in the 58 offices of inspectors general that spend more than $957 million annually with 9,348 staff.

But as I say, there are 193 chairmen who should be asking themselves today, "What have I done to connect with the American people in the way that Bill Roth did and to hold the government more accountable?"

Now, the Congress adjourned this session far later than we anticipated, which really threw us a curve ball as we came around to talk with you about what your oversight accomplishments have been since January.

Needless to say, my assistant, Meg Mehan, who is a great research assistant, did a lot of the first draft based on what is publicly available on the Web pages of the 38 congressional committees or 194 engines of oversight.

Then we made appointments. We got to every single committee with the exception of three: House Appropriations, Senate Finance, and Senate Environment and Public Works. There were three other committees that couldn't meet with us, but they did give us extensive information over the phone or fax so that we could understand their activities: the Senate Appropriations Committee, House Intelligence Committee, and Senate Foreign Relations.

Based on these meetings, we set up additional drafts. You will all have access to the documents that we're putting together on the Heritage Web page, www.heritage.org, probably not till April, but we do have some early drafts of the accomplishment pages that take up about 100 pages. They are available. They summarize all the committee activities.

These summaries provide the foundation for the rest of our analytical work on what has been accomplished and what wasn't accomplished by the Congress since January. Oversight's goal is to ensure government's accountability to the taxpayer.

Now, I have to give you five caveats. First of all, we have used a very broad definition of "oversight." Any time the Congress or the committees were looking at an existing federal program and trying to see what was right and what was wrong about it, we called that "oversight."

Second of all, the number of hearings does not reveal the quality of oversight that a committee is conducting. It is a very poor performance measure, and I'm sorry that I used it.

Third, we don't have any comparison, really, with previous Congresses. The Congressional Research Service has made some attempts at doing that, and that will be stated in our paper that will come out in April.

Fourth, the hardest thing is, you don't have a comparison with oversight opportunities that haunt any chairman or anyone involved in oversight -- what is happening that we don't know about that we are not focusing on.

Fifth, everything I am about to say is not a reflection of Heritage; it is just my own personal view.

The optimum performance measures for a congressional committee, if you are judging the performance of oversight committees, include: First, saved taxpayer dollars. Second, the efficiency and effectiveness of government programs: have they been enhanced? Third, did Congress enhance the public safety or health? Fourth, did Congress improve the economy? Fifth, did Congress increase things like student academic achievement because of the things they did?

Did Congress reduce corruption? Did Congress eliminate duplication? Did Congress move people more effectively from welfare to work? You can place performance measures that are based on the policy and the jurisdiction of the various committees.

And last, did Congress increase trust in government?

Obviously, those are optimal performance measures. They are very difficult to reach, and I have a far better appreciation of the executive branch's efforts to find the best performance measures and use them in their work and in their management.

There are some interim performance measures for Congress, though, that could improve upon commonly used measures such as laws passed or rejected, regulations promulgated or withdrawn, contracts or grants curtailed that were shown to be faulty, and programs or policies stopped or modified.

Last is a committee's accomplishments as compared to what they promised to do at the beginning of the Congress. On the House side, there are required oversight plans that are voted on by each committee. In the Senate, you have nothing as good in that regard.

In terms of hearings and other nearly worthless measures of oversight activity, the 106th Congress had over 2,000 oversight hearings since January -- 2,087 to be exact, as far as we could figure out from what you have told us.

You could also look at the numbers of subpoenas, the numbers of oversight reports, the number of GAO or inspectors general audits or investigations. A lot of people like to look at press coverage. That is what draws member interest, as you have just heard, so people tend to look at that.

We took a look at which topics were most frequently the subject of Congress' oversight hearings. Let me just tell you the top eight subjects. Defense and foreign policy, without a question, came out number one by far.

The second one is health. The third one was the Year 2000 computer glitch. The fourth one was education. The fifth one was trade. Next was transportation. Next was regulatory issues. And finally, environmental issues. Some of those overlap, obviously.

The next most frequent topics for hearings since January are: the Department of Energy, with the Cox Committee and Chinese espionage. Next, was government management and performance. The next was intelligence. Next was Medicare, and HCFA [the Health Care Financing Administration] specifically. Then Social Security. The last ones were tax, technology, and HUD [the Department of Housing and Urban Development].

Now, I must admit that when I started moving around the Hill, I very much had a preconceived notion that Congress wasn't doing enough oversight. And I'm a person who tries to watch the papers fairly closely on what Congress is doing on oversight.

I was very much surprised and impressed as I moved around the Hill. I think every single committee had specific focuses that they were most proud of. The unfortunate thing is, I didn't see many of these things in the popular media. I leave that for a question for the panels now and later to discuss.

My perceived top 10 oversight accomplishments by Congress are first, the near ubiquitous focus by most committees on the Year 2000 computer glitch. Can you think of a more critical problem for this nation that involves all government agencies, all private-sector industries? It could affect every American in their daily life and has a pressing deadline later this month.

If disruptions are minimal, we may never be able to sufficiently acknowledge the remedial work done by the Congress to prevent problems.

Look at the Year 2000 Committee on the Senate side -- who, by the way, I talked to yesterday and they were all going to be here, but they are all in training for New Year's Eve, when they will all be working. They issued two comprehensive reports, and I really encourage anyone with an interest to take a look at their Web page, y2k.senate.gov. They put out a 100-day report that is fascinating, so fact-filled you will learn more about how our society works than you may want to know. They also recently did a chemical industry report that is worth looking at.

The House Government Reform Subcommittee [on Government Management, Information and Technology], headed up by Representative Steve Horn of California, has been working also on this tirelessly since early 1996. You have to give them credit for working early in 1996 on report cards for every federal agency, to keep the pressure on from the Hill to make sure problems are solved. There was no

They looked at medical areas, rural and inner-city hospitals. Nursing homes and physicians' offices have a very high Y2K risk exposure.

They looked at 670 airports, and some of the jetway security systems, and problems with the runway lighting.

The federal government has spent $8 billion to make sure the disruptions are minimal, but there are wide disparities in readiness among 50 states, 3,000 counties, and 87,000 local jurisdictions. And many of the committees are most concerned about the 911 public answering points.

They have worked in a bipartisan manner. They have worked with the President's Council on the Year 2000 Conversion, headed by John Koskinen. So they have increased awareness, remediation, and contingency planning in the United States. We will know shortly how much more needs to be done, or whether they did too much.

Second, the area that appears as an oversight success for 1999 has got to be the Chinese espionage investigation, primarily done by Representative Chris Cox of California and Representative Norm Dicks of Washington. They worked alongside the Intelligence Committees, the Armed Services Committees, the Governmental Affairs Committees, the Judiciary Committees, and others. They identified foreign espionage and lax security. They confirmed that there was technical information transferred during various launch campaigns of satellites. They found that commercial interests were dominating national security interests. They restructured the Department of Energy as well as an important portion of the FBI. They passed provisions of law that changed the way that our nation's nuclear weapons program works to prevent future and additional foreign espionage.

Third, there has been some novel, creative, and quiet work to improve government management and financial accountability. And, in this regard, Senator Fred Thompson of Tennessee deserves credit for a set of letters to all federal agencies that were done very quietly, demonstrating tremendous experience and understanding of all pending GAO and IG [inspector general] problems that have threatened agencies. The committee is following up with meetings, calling for results.

They used a confirmation hearing very well with someone who was up for a key post at the Office of Management and Budget who had been in a position of authority to effectuate change, and they made sure it was clear that Congress expected that person to use that position to effectuate change.

They identified waste, fraud, and error. They worked to protect and ensure the independence and integrity of two specific inspectors general. And they have been working to lead implementation in the House and Senate committees on the Results Act.

Fourth, I have to give credit to the effort that Congress has made to hold over 50 hearings on education reform and then enact legislation that, in fact, would increase flexibility to state and local school systems while enhancing accountability provisions that demonstrate results. The legislation provided parents with greater rights to transfer children out of non-performing schools.

Fifth, the efforts made to focus on military recruitment and retention problems by the Congress were impressive. This wasn't a focused problem until the Congress held hearings and put their attention on it. In fact, at the end, Congress enacted legislation to increase military pay by 4.8 percent, and to provide special pay incentives and bonuses.

Sixth, a startling amount of creative work unrelated to official hearings or what we could capture on your Web pages is occurring in places such as the Senate Small Business Committee, who have over 22 investigations going on simultaneously even though they have a very small jurisdiction. They are leveraging resources like the GAO and the IG, in my opinion, to the max.

The House Science Committee continues to be a leader in terms of their creative oversight techniques -- people like Congressman [F. James] Sensenbrenner of Wisconsin, who does surprise visits to laboratories or federally funded facilities or agencies. This year, he went to the Oak Ridge National Laboratory, where they are designing and building a spallation neutron-source project that is very costly and is going to be very significant to the science community.

The House Commerce Committee also is doing far more than is visible from the surface.

Seventh, we found some committees that are identifying illegal lobbying or operational activities. The House Resources Committee conducted a 12-month investigation into federal law enforcement for an eco-terrorist incident in the national forest in Oregon and found some amazing things in that investigation. I really haven't seen very much press on that congressional investigation, although it is startling in its preliminary conclusions.

The Senate Health, Education, Labor and Pensions Committee has found some illegal activities in the student financial aid program that they are homing in on. They mandated the formation of a performance-based organization at the Education Department, and they should be given credit for that.

Eighth, race profiling as used by the Customs Service has ended because of congressional oversight. One of the House Ways and Means Committee's subcommittees had a hearing on the pernicious use of racial profiling that detained large numbers of black women for several hours [as they were] entering the United States in Miami or Chicago, and included degrading personal body searches. Just last month, November 1, the Customs Service announced numerous changes because they really didn't want any further publicity on this technique.

Ninth, there were questionable strong-arm tactics that exposed what government is doing. In that regard, the Senate Banking Committee, I think, found an astounding statistic of what was going on with the Community Reinvestment Act, which was set up in 1977 as a small program. It was meant to help create additional loan incentives and benefits for disadvantaged communities in the banking service. But what they found was that there has been over $1.05 trillion in credit allowances given to various community groups for this purpose, and not very much knowledge of what has been going on with this huge amount of money that is going for this purpose. In 1998 alone, Community Reinvestment Act commitments amounted to $694 billion. That is more than the total federal discretionary budget this year.

Lastly, we give credit to the Senate Aging Committee for their nursing home oversight effort. Senator [Charles] Grassley of Iowa used GAO to focus very precisely on horrendous problems in nursing homes across the country.

I have left the Appropriations Committee completely off of our evaluations for now, although you have to admit that passage of spending bills to fund the entire government is worthy of note. And it was interesting to me that there were 381 congressional directives in appropriations bills, maybe on behalf of authorizing committees in the Congress. These have huge oversight consequences.

The biggest deficiencies are probably areas that should have been the subject of congressional oversight but were not. Quality of oversight is not always up to par. The follow-up to oversight efforts is not always up to par, and priorities may be skewed at times.

Providing money to programs that are not authorized by Congress -- apparently, over $100 billion in unauthorized programs was spent. There was a lack of effective oversight on things like retaliation against Senator Roth's IRS employees, who went through an awful lot to get their courage up to come before the klieg lights over there.

In fact, on April 16 of this year, the Senator issued a press statement condemning the mistreatment of one of those people, saying this is a clear example of how some in the IRS's old management culture are using their power to destroy people who are trying to make the IRS a better place. This incident, he said, is the clearest evidence yet of how much work lies ahead and how difficult the job will be.

We have been waiting all year for oversight hearings on retaliation against IRS whistle-blowers. I was upset to read in September's Tax Notes that a spokesperson for the committee said, "There is nothing planned in terms of oversight hearings; the committee has bigger priorities of Medicare and a possible second go-around of the tax bill. Also, we are not sure if the hearings are warranted."

A failure that continues to plague congressional hearings is maintaining order and focus in high-profile hearings that do occur. Having had this experience myself, there is a fascinating article on www.americanspectator.com. It is an article by Dan Troy that talks about how witnesses who venture into a committee thinking they know what the agenda is tend to get decimated by the other side. As I found out, Republicans may not be around to work with and to protect and use the hearings to guide the result that was deemed desirable by a committee chairman or his or her staff.

We look forward to your questions, and now I turn it over to Paul.

PAUL LIGHT: This is a wonderful study, and it is important to bring some empirical muscle to bear on this question.

I'm going to talk about the state of the questions and the state of the answers in oversight. My experience on Capitol Hill was with the Senate Governmental Affairs Committee. I'm proud of my time with the committee, and I'm proud of what the committee is doing today.

It is nice that Ginni promotes my work from time to time. I wrote a book on the inspectors general a few years ago entitled Monitoring Government, and I saw it, actually, in Boston three years ago at Boston's Books for a Buck. It's a big remainder operation. That's disappointing for an author, but I saw it on a table marked "Make us an offer." That may say something about the state of the oversight condition.

What I want to talk about just briefly today is the state of the questions and the state of the answers. It's an eye-popper to have Brookings and Heritage together. We may not agree on a lot of things by way of issues, but Ginni and I and the two institutions, I believe, agree on the need for citizen leadership in government. We are going to be doing some work together on ways of improving the presidential appointments process.

I am also delighted to work with her because there aren't very many people who really care about the management of government and government performance around these days. I assume all of you do, and some of the people who tune in to this may. They may be flipping as quickly as possible to get to other channels.

I understand the questions generally. The committees I know best are asking good questions. They really are. There is a bit of an overemphasis on the particular rather than the systematic, on the individual case of fraud, waste, and abuse, or on the individual case of malfeasance or misfeasance, rather than the systemic causes thereof. That is always a problem in oversight.

I think the committees I know, particularly Governmental Affairs and Government Reform, are designing good hearings and producing good reports. There is a generally high level of stick-to-itiveness out there. I like what Congressman Horn did on Y2K. He kept coming at it and coming at it and coming at it, and the media reported his findings. I think that was good. And I like what Senator Thompson has been doing on his committee, hearings on the Vacancies Act, the Federal Activities Inventory Reform. I like what they are doing. There is generally a good match between questions and legislative response.

My general view is that we pretty much have all the laws we need to improve how government works. In fact, I think we have too many laws to improve how government works. We could probably remove some and have a better result.

I have always argued that the problem in the federal government today is not too little reform; it is too much reform, and the fact is that we are telling agencies to do lots of things. They can't do lots of things, and we are not focusing them particularly.

But I like what has been coming out of Congress in the last few Congresses in terms of legislation. We don't have high expectations on what we are going to get. There is good, precise legislation on reform -- not these gigantic, comprehensive reforms, but fine-tunings, reacting to experience and reacting to oversight. So having come from the Hill, I like what the Hill is doing. I don't speak for the executive branch. Most of them don't speak to me lately.

Now, what is the state of the answers that we are getting from oversight? I think the answer to that question is, "Not very good." Let me focus on two or three items here.

Number one, I think the systems for answering the questions that we are asking in oversight are in decay. I was very surprised and concerned about Senator Thompson's report on improper payments. It got very little coverage, but here he is coming forward with a GAO report that says we have had $19 billion of improper payments, but only nine agencies answered the inquiry. We don't know whether the reason the rest didn't answer is because they don't know or because they just aren't paying attention, or do they have the systems?

I think there is a general sense that systems are in decay, or we are not exactly sure what is going on out there. That is a problem for congressional oversight, because we can't get specific answers.

Vice President Gore, in launching his presidential bid in Carthage, said that one of the reasons to elect him President is that he knows where the waste is, but we are not really sure where the waste is. We don't have the systems in place to track it. There has been general frustration, I think, in implementing the Government Performance and Results Act. I'm told that the Department of Transportation, which I think has the very best GPRA in place, doesn't have measures for 30 percent of their strategic indicators. We have got a long way to go in terms of developing systems to tell us what is going on.

The second point about the answers is that the key sources of oversight information are under tremendous stress. I think GAO has done a tremendous job coming through a remarkable and dramatic downsizing. They went from about 5,500 full-time equivalents down to about 3,500. I think they have done a phenomenal job. The question is how to employ what staff is there on a systemic basis.

I think that the Comptroller General, David Walker, is headed in the right direction. I am not so much in agreement on the notion that GAO was overwhelmed with congressional requests. That is a debate that people have. I wish I had a nickel for every time that somebody from GAO came to us on a committee staff asking us to sponsor their work so they could go back home to GAO and say, "We don't have a choice but to do this. We don't have a choice." I don't know what the real level of work is, but I do agree that GAO needs more discretionary time to pursue the systemic questions that kind of fall through the cracks of the committee structure.

OTA [the Office of Technology Assessment] is gone. The IGs [inspectors general] are in mixed condition right now. We have a couple of wonderful IGs out there: June Gibbs Brown and David Williams are terrific. We hit a little bump in the road, which I think taught us all a little bit about what is going on, but he is one of the best out there. And there are some terrific new IGs, including my former colleague from the Governmental Affairs Committee staff, Elaine Lewis.

Nevertheless, there are too many vacancies. There are too many vacancies in the CIOs [chief information officers], the CFOs [chief financial officers]. If you put a "C" before something in the executive branch, it is almost automatically guaranteed to not have somebody in it. It seems like you just pay attention to the C's -- the chiefs, the CIO, CFOs, you name it -- and there are just too many vacancies.

There is too much conflict. I am concerned that the contention between the HUD IG and the HUD Secretary hasn't been resolved. It has been going on for too long. The President of the United States should sit them down together and say, "Knock it off." I mean, either we have a commitment to this statute or we don't. The reports are still too confusing, and there has been a decline in participation in hearings. If you look at the IG participation as hearing witnesses, that's been going down. I think the IGs are underengaged in GPRA.

Now, the two places that are really serious for oversight problems are the OMB and OPM [Office of Personnel Management]. At OMB, the "M" went from upper case in the Nixon Administration, to lower case under President Carter and President Reagan, to subscript, and it is pretty much gone. There is no more capacity left at OMB on management. The de facto central management agency in the federal government now is the National Partnership for Reinventing Government. They have whatever institutional memory is left in terms of central agencies, and they don't believe in central oversight. It is out of fashion.

20 years ago, Senator Thompson's report on improper payments would have provoked a major outrage. In fact, 20 years ago, again, that Inspector General Act, the first Inspector General Act of HEW [the Department of Health, Education and Welfare], was the product of welfare fraud hearings that involved improper payments of about that amount. This time it showed up in the back of The Washington Post and was never seen again.

The question is, what is happening out there? Less public interest in how government works? Less media attention to government as a result? We sit around waiting for the next meltdown. You know, we had IRS; we had Energy. Do you want to take bets on which is the next agency to go? One is going to blow. I don't know what it is going to be, but there is a major accountability crisis in the federal government right now.

I don't want to get into the layering and so forth. I could. The sign of the administrative apocalypse lately is that there is a new title in government now spreading out, "Chief Knowledge Officer," created at the General Services Administration first, and then it's going to spread out there.

Most importantly, I am not sure that agencies are that concerned with giving the answers. HHS [the Department of Health and Human Services] may be the exception to the rule. There, the Secretary, Donna Shalala, the IG, June Gibbs Brown, the CFO, the CIO are all working together to reduce vulnerability. That is where Dave Williams, who is in this audience, came from. They have a wonderful IG shop there.

But name another agency in the federal government that is so acutely sensitive to management. Name another agency in the federal government, better yet, where everybody has been in place long enough to know what is going on.

I am fond of saying that there were more vacancies last September at the senior levels of the federal government than there were at Disney World during Hurricane Floyd. We have a tremendous amount of turnover at the top of government, and that creates a lot of focus on oversight.

The general fashion today is to let a thousand flowers bloom but not to tend the garden as a whole.

So here is the question for you all who are in the oversight business: What if you hold an oversight hearing, and what if you do oversight, and nobody listens? How do we get attention for these questions? And how we get attention when we ask oversight questions and the answer is, "We don't know?" That is a hard thing to turn on if you are doing an oversight hearing. "I'm sorry, but we don't know how much we are losing, and we don't know what is happening out there. We are waiting and waiting for a whistle-blower or somebody else to tell us what is going on."

Because basically, within the federal establishment, there has been a decline in ability to see the bottom from the top. That is what happened at IRS. That is what happened at Energy. That is what is going to happen at the next meltdown. There is lots of stuff happening out there at the bottom, but nobody can see it for the fog of administrative clutter in between the top and bottom.

I hope this was helpful. Keep doing the oversight. Somebody is watching. I tune in from time to time. Thank you very much for listening.

JAMES HINCHMAN: It is an honor for me to be here. I am in particular honored by the company I keep. You have heard from two former members of Congress, in fact former chairs of important committees of the Congress, and now from my good friends Ginni and Paul.

I lack, as you heard from that brief bio, their direct experience in the Congress, and I am certainly not the researcher and scholar that they have both become. I think that I can contribute three points which are drawn from my 30 years of experience in the government, 15 at GAO and 15 as one of those bureaucrats everyone has been talking about in the executive branch.

The first point I want to make is a general point about congressional oversight, taken at some perspective. This is not a result of research. It is certainly not about the first session of the currently sitting Congress. It is broader perspective about this process.

I think what you have to say when you step back and look at it is that on the whole, across time, it has been a remarkable part of our government process and a successful part of our unique constitutional arrangement.

It seems to me, first of all, you have to say that there are obvious success stories. Perhaps some of those stories from the current era are too close to all of us for us to feel a consensus about them, so I'll pass.

Besides, you are going to hear at lunch today from people who participated in many of those, and I am sure you will get the full flavor of those events. But we all remember the Truman hearings that propelled him into the national spotlight and also into the Presidency, the Kefauver hearings. In my own working lifetime in Washington, the Watergate hearings. There are many success stories that come out of this oversight process.

But perhaps even more telling is what I would call the international perspective on this oversight system. When I was with GAO, particularly during the last five years, I spent a lot of time with GAO's counterparts throughout the world. Some of those were large meetings.

But even more of my time was spent meeting with, literally, a constant string of leaders of GAO-like organizations from throughout the world who came to Washington to learn about GAO, some from the Soviet Union, those emerging democracies; some from the developing worlds of Africa and Asia; many from our sister countries, from the Western developed world.

What you learn in meeting with those people is that GAO is the most respected governmental organization in the world, bar none. Now, I hope that some of the respect flows from the quality of the work we do. But I know that much of it flows from the scope of GAO's warrant, its power to look into such a broad array of governmental activities and undertakings. That power is derived directly from Congress's oversight authority.

Throughout the world, from others who look at our government, there is literally awe at the fact that we can create, and for 200 years maintain, a system in which the legislative branch can inquire so extensively and so deeply into the activities of a sitting executive. They are literally in awe of that process.

So I say that not to suggest the system is perfect. I don't think it is. I think it could be better. In fact, I think we have some special responsibility, given the special role the system plays, to ensure that it is in fact as good as it could be. But it seems worth saying that the system is not a failure. It is not a failure of you or of the Congress or, in some grand sense, of the American people. It is fundamentally a system that has served us well, and that is the place at which we should start to think about making it better.

The second point clearly echoes something that Bill Clinger said. Effective oversight is hard. It takes talented, dedicated, experienced, and skilled people to do it well. Gathering, organizing, presenting in a coherent way the complex body of facts that make up the operations of our government is not an easy task. It is a task that many people cannot do well. It takes the right staff to be successful at this process. In fact, I would say if you cannot find that staff, you shouldn't undertake the task.

I see Bob Murphy, the General Counsel of GAO, sitting out there. He and I have spent hours trying to talk people out of proposed oversight undertakings that are based on erroneous readings of the law, weak facts from unreliable sources, or in some cases, sweeping allegations based on no facts at all.

I don't want to say that you need to have lawyers and professional investigators to do effective oversight. I am a lawyer myself; that would seem a bit self-serving. But I will say that the kind of skills that make effective lawyers and good professional investigators are the skills it takes to do good oversight.

It takes intellectual discipline. Oversight hearings have to be right about the facts, and the facts have a kind of intractability about them, as you all know. They never fit as perfectly as we wish into the patterns that we have created for them. The ability to live with that reality and work with it, to accept the facts as they are and to move on, is critical to the ability to run effective oversight. Lawyers and investigators and those with that kind of intellectual discipline know how to do that.

I think the House Appropriations Subcommittee on Investigations is a good example of that. It is a very successful and long-standing committee. They have, as you know, drawn much of their staff from the law enforcement and legal community.

I would also suggest that GAO is a source of help for that process. Certainly you will find there the kind of experienced people that it takes to move quickly through the oversight process. After all, this kind of fact-gathering is their job; it is what they have done for their professional lives. They have the contacts and resources for formal and informal work in the agencies to move an undertaking forward.

I would also say that it helps to be clever. I want to share a story with you about this. This comes from my days at the executive branch.

In the early days of the Reagan Administration, I was an Associate General Counsel of Agriculture. For those of you who were around then, depending on what part of the country you are from, our farm prices were at historic lows. It was one of the major crises, within our department, at least, if not in the Reagan Administration.

The real complication was that you could not highlight the problem because the administration was in the midst of a somewhat difficult plan to reduce taxes, increase defense spending, and at the same time get rid of the deficit. So there was not a lot of room left for the kind of foreign spending that we had in mind.

So we had a brilliant idea. We would use huge warehouses of commodities the department owned, and we would give those to farmers. We decided to call it the Payment in Kind Program, the PIK Program. Enormously successful for the farmers. They loved it. We doled out millions and millions of dollars worth of commodities. We discovered one small problem: You needed a little tax code amendment. We needed a provision that would allow farmers to defer income on the grain until they sold it, because they had no money to pay the taxes when you gave it to them.

Unfortunately, to get that, we had to go to Congressman Pete Stark. Mr. Stark is from an urban district in Northern California. He is not a friend of farm programs, and he certainly was not a friend of the PIK Program. But nonetheless, we were going to have a hearing in front of him. We all decided the bill would pass. The nation supported it. The deal was done. We thought it was going to be an oversight hearing about the PIK Program before this bill moved.

I knew there was a problem when I found that I was the witness. At the Department of Agriculture, they don't send associate general counsels in mid-career up to testify at congressional hearings unless nobody else wants to go.

I walked into the hearing room in the Rayburn Building basement, and there, sitting in front of Congressman Stark, was a coffee can full of plaster of Paris. In the plaster of Paris was the bare branch of a tree -- probably taken off the Capitol lawn, for all I know -- stretched out like this, bare branches, and hanging all over these branches were bills: $10 bills, $5 bills, $20 bills.

I'll never forget how Mr. Stark began that hearing. He said, "We are here to discuss the PIK Program. We call it the PIK Program because if you're a friend of Mr. Hinchman and his colleagues at the department, you can come up to this tree and pick off some money."

I don't remember what anyone else at that hearing said, and I can't say that that hearing killed the PIK Program. I can say that it was a one-year program. Certainly, in fact, that publicity was part of the force that led the department, among other things as well, to drop that effort after a single year.

I think oversight is a race that is run by the long-distance runner. Paul and Ginni both talked about the success stories that involve the willingness to stay with an issue, to keep following up, and I think the record demonstrates that that is the case across the board. The best overseers stay the course.

I have been a witness at many oversight hearings. As you know, it is easy to get through the first hearing. A little sense of shock and dismay and a promise to do better will get any department through that initial hearing. Individuals may lose their jobs in the process, but the department itself will move forward.

It is the second and the third hearing, the recognition that you have to come back and explain what you have done since the last hearing, that turns departments and agencies to the task of change.

So you need to be prepared for that kind of long-distance effort, and I urge you to build that into the calculation.

I will just summarize all that by congratulating you on what you have accomplished in the world of oversight. And I wish you all the luck that I can in your continued success, in your efforts to make this a better government and, therefore, a better country.

Thank you.

VIRGINIA THOMAS: We have about 15 minutes for any questions if you have them.

ERIC HALTER: Eric Halter of the House Rules Committee.

As many of you know, at the beginning of the 104th Congress, there was a rule change that was adopted to basically require House committees to come up with comprehensive oversight plans at the beginning of the first session of each Congress. The idea was to set kind of the guideposts of that committee's oversight agenda for the next two years.

We have heard a number of things about the forms of oversight needing to be bipartisan, needing to be systematic, and needing to basically be an organized kind of thing.

My question to any of the witnesses that would be interested in responding to this is, what do you think ultimately has been the effect of this? Has it had a positive impact on oversight? Obviously, that might change between different committees as to whether or not those forms have actually been utilized well.

But the whole general idea, that at the beginning of the first session of a Congress, of outlining for the next two years, ultimately kind of having a broad guidepost, has that been a positive thing for oversight? A negative thing? Or just some comments on how it goes with the other ideas about what we have heard is good oversight.

VIRGINIA THOMAS: I can say that from someone trying to get an assessment of what the Congress is doing, the oversight plans that the House did really help anyone on the outside. I don't know how they work in the committees themselves -- if they focus you or not. They could be tools for solid strategic planning for committees.

Obviously, things come up to deter you from sometimes achieving what you set out to do in the beginning, based on crises and emergencies.

The House appears to be doing far more oversight work than the Senate is doing.

Thank you very much. (Applause)

(Whereupon, at 12:06 p.m., a luncheon recess was taken.)

---

AFTERNOON SESSION (12:30 p.m.)

IMPROVING CONGRESSIONAL OVERSIGHT: NEXT STEPS

VIRGINIA THOMAS: I think you are really going to enjoy this last panel that we have. That is why we gave it so much time. They have great stories, experience, intelligence, and insight into oversight. I want to quickly introduce each of them and then turn the panel over to Eric Thorson.

Let me start with Frank Silbey. Frank is a consultant at Franklin R. Silbey Associates, Inc. He started in 1968 as a press secretary of a Democrat Senator from New Mexico, Senator Joseph Montoya. He became a professional investigator for Congressman John Moss. For those of you who don't remember, he was the father of FOIA [the Freedom of Information Act] from California. Frank was staff director for the Oversight Subcommittee at the Senate Judiciary Committee under Senator Ted Kennedy and Max Baucus. And then he was retained by Republican Senator Orrin Hatch of Utah as the Labor Committee's chief investigator, so he has certainly seen very strong partisan influences. His passion is focused on government waste and accountability.

In 1983, he left government service to form his own consulting firm that advises corporations who face congressional investigations and federal inquiries.

He is a new friend. He is a man of character, a patriot, tough as nails with an eye for details.

Bruce Chafin is currently the president of a consulting firm that designs and implements compliance programs for U.S.-based health care providers.

Bruce has served as an officer and vice president for compliance and ethics for the third largest for-profit hospital chain in the United States. Prior to that, he served 10 years as a senior investigator for Congressman John Dingell, a Democrat of Michigan, at the Commerce Committee. It used to be Energy and Commerce Committee, the Subcommittee on Oversight. And he has plenty of experience in ferreting out abuses in government programs.

One of his colleagues has called him sinister, opinionated, with a wonderful wit.

Sheila Hershow is a producer for Sam Donaldson at ABC News. She produces investigative news reports at "20/20." During the past 10 years at ABC News, she has also worked as a producer at "World News Tonight" and "Prime Time Live," where she has won honors for investigative journalism.

One of her colleagues has said that she has a viperous tongue; she is a magnificent journalist, and she is one of the top investigative journalists left in this town.

Eric Thorson is a senior vice president for ethics and compliance at Mariner Health, Inc. This is a long-term care company with 45,000 employees and annual revenues in excess of $2 billion.

Eric spent five years working at the Pentagon, as well as the Federal Emergency Management Agency. He spent eight years on Capitol Hill, working for both Republicans and Democrats on the House and the Senate sides. He has been with the House Government Operations Committee, the Senate Governmental Affairs Committee, and the Senate Finance Committee, where he is known to most of us for the IRS investigative hearings in 1997 and 1998 that resulted in a public law that changed -- or was supposed to change -- the IRS.

He is admired, respected, intelligent, sincere, capable, and knows how to get results.

Ralph Vartabedian serves as a deputy business editor of the Los Angeles Times. He gets the award for coming the furthest for this session today. He manages a section with more than 70 reporters and editors.

For 12 years, Ralph covered aerospace and defense issues, and he established a reputation for the L.A. Times as leader in defense industry coverage. He then worked in Washington, D.C., for the L.A. Times for five years, where he continued to do investigative reporting. He got so many awards that they made him an editor in 1998 and brought him back to L.A.

He received a master's in economics from the University of Michigan and, according to one his colleagues, is wonderful, devastatingly good at oversight, and a man of impeccable integrity.

Last but not least, Susan Gaffney is currently the Inspector General for the Department of Housing and Urban Development. She has been there since 1993. She spent 20 years investigating the federal government in different capacities.

Before coming to HUD, she was with the Office of Management and Budget, as well as the inspectors general offices at GSA -- the General Services Administration -- and the Agency for International Development.

Her experience in housing traces back to the time that she spent with the City of New York, and we look forward to hearing her. In my opinion, she is a heroine. She is tough. She is under a lot of political pressure. She has not gotten all the help that she deserves.

With that, I would ask you to warmly welcome all the panelists. I will turn it over to Eric Thorson. (Applause)

ERIC THORSON: It really is a great pleasure for all of us to be here.

Some years back, I went to New York in conjunction with a Russian organized crime investigation and interviewed an attorney for a prominent crime family. After we negotiated his testimony, the underboss of this crime family had agreed to admit to ordering 16 murders in New York at the request of his Russian partners.

Afterwards, I asked the attorney, "I have to ask you, why would he do this? Why would this guy sit in front of a Senate committee, on national television, and admit to all of this stuff?"

The attorney started to smile, and he said, "Well, the truth is, you aren't going to be able to shut him up. These guys live in the past. These stories are all they've got left."

Well, Ginni Thomas sort of finds herself in that same position today in that she's got a bunch of guys here with all these stories. We've told them to each other so many times that we have become interchangeable.

All of us, with the exception of Susan, who we recently met, have known each other and worked together for over a decade. So there is a lot of interaction here. And to say these people -- and I know Susan well enough to say this part is true -- to say we are passionate about our work is a definite understatement. That is hopefully for the good of everyone.

We are going to do this in a method where each person will come up and do about a 10- or 15-minute piece, and then we are going to leave room at the end for questions that you can aim directly at whichever person you choose.

So to start off, Frank.

FRANK SILBEY: First of all, Ginni, you have really done something important. This is the first time that I remember something like this bringing this kind of an audience together. I want to thank you and your staff for an enormous effort and a wonderful initiative. It is really impressive. That is the only nice thing I'm going to say. Think of the government as a statue and your speaker as a pigeon.

When the great muckraker Upton Sinclair wrote T

he Jungle in 1906, he was aiming at America's head, trying to foment a revolution. Instead, he hit America in the stomach and got the food and drug laws.

When the Republicans took over the Congress, they came in and they took aim at Huckleberry Ghandi's head, and they missed him entirely. Instead, they ignored the greatest opportunity for investigative oversight I have seen in recent years.

I am not here to engage in personalities or ideology. I parked that at the door. I am going to try and be as specific, objective, and deliberately, constructively offensive as I can be, because I have watched in great frustration as one opportunity after another has gone by.

I realize that oversight is a thankless persuasion. It's confrontational. It's nasty. A lot of chairmen and many members don't like it. They shy away from nastiness.

I can think of one very well-known Senator, now no longer here, who employed a young man I knew. That young guy came up with two terrific leads on corruption in agencies, and he drafted investigative letters asking for documents. The Senator, whose known weakness was to shy away from any kind of confrontation, read the letters. They were specific and direct, to say the least. He said, "What if they say no to this request?"

The young man said, "Well, you are going to have to subpoena."

The Senator said, "I don't want that kind of confrontation." The two letters sailed back across the desk.

The young man called me later. He said, "What shall I do?"

I told him, "Get out. The man has no backbone."

Many Senators and Congressmen, and I'm speaking generally, don't have the stomach for anything like this. They are not curious; they are not interested; they come here to go along and to get along. And if you work for them and they happen, by the accident of seniority, to have come into possession of the chairmanship of a very large and powerful committee with a serious jurisdiction, they are not going to do much of anything.

The committees that have always been my favorites have been Government Operations on both sides of the Hill, using the old names, and Commerce. I never was too interested in legislation. I get even more down and sour when I think about the legislative process and some of the atrocities committed in its name.

I sort of gravitated to oversight. Those with a knack for oversight possess a gunslinger mentality. If you want to find out what is going on, and you are not afraid of confrontation, you ask tough questions. Tough questions that occur to me today: How can a river of drugs come across our border, and our guys stand there like a shortstop without a glove, and the stuff goes between their legs and around them and over their heads, and they can't seem to do anything about it?

Another question: Whatever happened to the $3 billion we have pumped into the Haitian economy and gave to the people who run Haiti today?

You ask questions. Then you say, "Which agency has something to do with this?" You go down to the agency and start asking questions.

Pretty soon, if you are a good investigator, people will hear about you and the phone starts to ring. Pretty soon you've got people snitching about the story behind the official policy.

Unfortunately, this Congress and the Congress before it don't seem to know how to do that. They don't know how to write investigative letters. They don't know how to force an issue, with honorable exceptions like Alan Slobodin [from the House Commerce Committee], who I will embarrass by singling out. He is one of the very few guys I have run across on Capitol Hill who still has an old-fashioned view of oversight.

There are whole agencies rife with waste, corruption, and fraud. Nobody looks at them. There are entire agencies that haven't been looked at since Genesis.

Eric Thorson did a magnificent investigation into IRS, which only goes to show how bad agencies can get if nobody looks at them for lengthy periods of time. It only goes to show you, what a fantastic result, like dropping a rocket into the middle of an ammo dump, you can get when you look at that kind of agency.

The pity is that there has not been enough follow-up his incredible work.

For example, where did all the billions go that the Federal Aviation Administration was going to spend, and did spend in order to put together some of those computer systems that were going to reduce the dangers and hazards of flying? Where did the money go? They all stand in a circle and they point at the next man. It is like the classic Thomas Nast cartoon: at the next guy, and all say, "'Twas him."

When did anybody last look at the 8-A Program at the Small Business Administration?

When did anybody last look at the Public Building Service of the General Services Administration, or the flow of multi-hundred-million-dollar contracts going out of the Pentagon's back door every day?

When did anybody ever look at competitive contracting or conflicts of interests? Do high U.S. officials file your conflict of interest public disclosure statements as required? Have you filed it on time? Is it complete? Let's take a close look at it.

I remember an investigation done by the Commerce Committee. We discovered that a powerful federal regulatory agency had several administrative law judges making decisions on billions of dollars worth of contracts, while owning stock in the companies involved. We then stepped it out through the General Accounting Office and found out that throughout our government, this was endemic; conflicts of interest everywhere.

There are enormous areas of our government being ignored oversight wise-- yet Republicans in Congress focus only on trying to get the President. When trying to get a head shot, they don't do anything about the major problems in the middle.

Where is all the money going now being spent by your government every year? What is happening to the laws this body is passing and delegating to these agencies for enforcement? Let's do something simple. How many agencies have their own little air forces or police forces? How much do these agencies spend on flacks, public relations and printing?

A 10-year-old could do some of these reviews. Here are congressional committees, the equivalent of 155-milimeter howitzers. Their ammunition is sitting there, and they don't load the cannon, or fire them.

Some committees label their hearings oversight. I'm sorry: I can't buy into that. I can't believe that what passes for oversight hearings truly qualifies. You need to train a cadre of people in the basics so they know what to ask for; you must learn how to develop and deal with whistle-blowers. You must learn how to ask for documents and what the tricks are the agencies use to avoid giving you things. For example, an agency will do an internal report. They find a terrible situation and deliberately not finish it -- i.e., not put a title page on it, not get a final approval. They will just put it on a shelf. There is this little bomb sits ticking, and nobody even thinks to ask for it.

Go in and ask for the agency internal audits on themselves. I was taught by a wonderful old man, whose rule was, "Follow the money, Sonny."

There are three agencies in the United States government that consume the overwhelming majority of the federal budget: Social Security, Health Care Financing Administration with Medicare, and the Pentagon.

Why has nobody followed the money? Medicare fraud proliferates all over the country. When was the last time anybody truly scrutinized HCFA? When was the last time anybody went in, not with a bulldozer, not with an ideological bias that kills you from the start, but with a smile and saying, "Hi, I'm just a poor, ignorant old man. I'm curious. Have you got anything? Could I take a look at your reports here and there?"

Shortly thereafter, you will have whistle-blowers coming at you out of the woodwork like weevils out of mold biscuit. Soon you will find out things the agency doesn't want you to know. You play dumb, pretend you don't know anything, let them lie to you, write them a sucker letter, and let them lie in writing. In the meantime, have your whistleblowers bootleg the documents to you, make your case, and the agency won't even know you have done it. You have picked their pocket and they have no idea.

Then it's Halloween time. You can brief your chairman, if he or she is comprehending, interested, and willing to back you up. Because when the federal agency finds out you are knocking at their gate with subpoenas in your hand and are going to use it on them, the agency will go to any lengths to sabotage your investigation. They are going to reach other members: "You know, your investigator, this guy Jones, this guy's crazy. He is out of control. He is making demands. He is doing this." They will do everything they can to pull the rug out from under you. A few of you probably have had it done to you already.

You should understand there is a third political party in this city. It's called the Senior Executive Service [SES]; a tiny group of sophisticated, experienced, elite bureaucrats who really run everything in this city within our government.

When the top political appointee comes, whether he be a governor or a friend of the President, he doesn't know anything about that agency, thinkimg he is just going to make speeches, cut ribbons and his wife can show off her new wardrobe. Pretty soon, he realizes this little gray man who puts papers in front of him for him to sign is really running his agency. Like a salami, a slice at a time, he is a captive of this man and his colleagues within a few months..

I remember one administrator who ran GSA who I predicted this would happen to. He scoffed. The last time I had lunch with him before he left the city, he couldn't even hold a fork, his hand trembled so badly. That is not an exaggeration.

You have to build relationships with investigative reporters. Almost none of the current congressional staff who do oversight have a relationship with investigative reporters, are able to differentiate between general assignment reporters and hunter/killers like Sheila and Ralph, or know how to deal with them, give them stories so that you get your story before the public.

That is your field artillery, and you must know how to do it. The ideological bias in the Congress on the part of many investigative subcommittees has prevented them from dealing with liberal oriented media. Those liberal media aren't so liberal sometimes. If you give them that cannon shell, they will put it into the breech of their gun and will fire it.

Results are spectacular sometimes, though not all the time. They have to learn to trust you. They have got to learn to know you. They have to learn to respect your work. They have to understand that you are a professional and not ideologically biased to the point where it ruins your reason and objectivity.

You must show that you are a professional and know what you are talking about: that you have mastered your material. Then you will be able to create a hearing structure, which is nothing more than a report to the public. And you chairman will say, "

 

I had no idea we could do something like this."

Gradually, a handful of those chairmen - and there are only a couple of them; Chuck Grassley of Iowa is one who has guts, integrity, decency, and a sense of indignation, even though he has been here a long time -- will back you up when people try to stop your work and allow you to get the result you are looking for.

I think you get the idea. I will be happy later on to take whatever questions you have.

My colleagues up here -- this crazy man from West Virginia, this wonderful guy who did the IRS stuff, Ralph, who is one of the finest journalists I've ever had the privilege of knowing, and Sheila, who is so smart and so good and so tough that somehow you wonder how she came to survive this long -- these people are the crème de la crème of past oversight. They have a lot to teach you, yet they still are relevant to the present. None of them are here today for pay or for a desire to score points on anybody. They are here to try and help the country by giving you of their knowledge, because thus far, the country is the poorer because of failure to do what so many of you are charged with doing.

ERIC THORSON: One of the real benefits of us coming together to do this today was that we all, within the last few days, got to meet somebody that in a very short time I have come to admire very much. Susan Gaffney is the Inspector General of HUD, and as I mentioned in my earlier remarks, she shares, certainly, the same passion that we all do. From the point of view that we all looked at it as congressional investigators, we just wish there had been a lot more like her when we were working on the Hill.

Susan?

SUSAN GAFFNEY: I'm not really as engaging as Frank is, nor do I necessarily agree with him. And I should also tell you that I have taken to not accepting speaking engagements, and that is because I do not want to hear people like Paul Light telling everyone what they think of me.

But I have done this, Ginni, out of great respect for what you are about. It is noble and worthwhile.

I'm pretty old, and I have been in this government for a long time, and I think it is fair to say that there have been some really important improvements. I'm going back to what Mr. Hamilton and Mr. Clinger talked about this morning. The CFOs Act is really important. The CFOs Act has brought about changes in agency accounting. We have started to get the systems in shape.

But do you realize what it has taken? It is 10 years since that Act was enacted, and we are years from reaching its real goals. Do you know how HUD obtained an unqualified opinion on its financial statements last year? They just spent millions. They brought in firms to construct financial statements, so they could get an unqualified opinion; and they have to keep doing this year after year. I count that as progress; you know why? They never used to care enough to spend the millions to do that. They now care, and I'm telling you, that is progress.

But what has it taken? It has taken the General Accounting Office, the Congress, OMB, the Association of Government Accountants, 10 years of constant pushing. And I guess that just goes back to what everyone's saying: "Oversight is a game for the long-distance runner. It is not the short-term stuff."

I want to talk to you about the IG role in the context of overall oversight in government. I think it is a mistake to look at congressional oversight alone without looking at it in the context of overall oversight. Everything I say is my personal opinion.

I guess you are all aware that when the IG Act was enacted in 1978, the Department of Justice took the position that it was unconstitutional. They said that it was unconstitutional for an entity in the executive branch to be reporting directly to the legislative branch.

So you should be aware that the push for the IG Act did not come from an administration, from the executive branch; it came from the Congress. And it makes a whole lot of sense that the push didn't come from the executive branch, that it came from the Congress, because if you were the President of the United States, would you really want a bunch of independent people out there saying negative things about what you and your administration are doing? That simply would not be in your interest. It wasn't in their interest then; it isn't in their interest now. So, as far as support for IGs goes, no one should think that you should count on support from the administration. Under this administration as well as previous administrations, there hasn't been a lot of support from the administration.

I think the other thing that we need to look at is how much oversight of executive branch agencies, apart from the IGs, is there in the executive branch? I would submit to you that there is almost none.

Someone this morning talked about the fact that OMB and OPM have been decimated. I worked in OMB a while ago. OMB is in even worse straits in terms of being able to exercise real oversight than you are in the Congress.

I submit to you that there really isn't any oversight in the executive branch, any substantive, recurring oversight in the executive branch, apart from the IGs. That means that congressional oversight is much more important than we would normally want to think it would have to be.

Right now, what happens in individual agencies, in terms of how responsible they are, varies. Paul Light, this morning, talked about HHS, and I think most of the people in this room would agree that Donna Shalala really is a good-management, good-government type who cares about long-term reform. That is not the typical appointee who is going to head an agency. The typical appointee is going to be interested in a big splash, and you don't get big splashes by occupying yourself with audited financial statements. They are not going to be there for that long. So, Donna Shalala is not the typical. The typical appointee has a political agenda.

The other thing that varies from agency to agency is the SES. Frank was very disdainful of the SES. I am not. I am career SES, Frank. However, I recognize the problem in some agencies that Frank is talking about.

In HUD, that's not the problem I see. The problem that I see in HUD is that there is no viable SES that stands on its own, that cares about the institution of HUD, that continues tending to the duties of HUD. The SES at HUD is totally caught up in the political agenda. So that is another difference from agency to agency.

Another difference from agency to agency is the way the IGs operate. Paul Light seems to have the view that the role of IGs is to partner with agency management. I am not saying that you don't partner, but I don't think that is the primary purpose of IGs.

I think the primary purpose of IGs is independent, accurate, and objective reporting for the world to know about. If at HUD we go after contractors, we go after housing authorities, we go after owners of multifamily housing, do you think the Secretary of HUD would care about that? No. It is when you start going at the internal workings of an agency, the things that allow problems to exist in dealing with the external entities, that things get very confrontational, almost inevitably.

That is my view. Some IGs tend to focus on dealing with outside entities; some focus on internal entities. HUD has been going through a major reorganization, and we decided that we wouldn't wait for 10 years until the reorganization was over to look at it; we would look at it real-time, and the findings are pretty negative, and that has caused tremendous controversy.

I think I am doing my job, and I think some other IGs, are generally doing their job. But I think still other IGs have figured out that the easiest way to survive and have a happy life is not to be controversial, to put your head down.

But even if I am doing my job and issuing all these reports and they are accurate, independent, and objective, the question is, what happens as a result of them? I am willing to take a big part of the blame. I don't think necessarily a whole lot happens as a result of them.

And there are some reasons for that. One is that you could die reading an audit report. We issued an audit report recently on community builders in HUD, and I thought it was the most exciting audit report I had ever read. My mother was visiting me from western Pennsylvania. I took this report home and said, "Mother, read this. This is what the OIG is about. You see?"

She got to about page 5 and she said, "I can't read this. It is so boring, Susan."

So part of the fault is ours. Maybe this goes, Frank, to something that you were saying. I don't know that we know how to communicate right, and it's not clear to me who cares anymore. It is not clear to me that if we report that billions and billions of dollars are being wasted in HUD, that that really turns anybody on.

It is not clear to me that if you report what looks like corruption in HUD -- and I am not talking about criminal acts; criminal acts we report to the Department of Justice -- that that is going to get anybody interested either.

It seems to me that all of us in this country -- and I am not just talking about people in the government, I am talking about people in the country -- have become so hardened to stories of waste and mismanagement, so accustomed to a way of doing business, not just with the government, but in the private sector, that involves kickbacks, doing whatever you can to take out the other guy, that you almost can't get people's attention.

It is as though the only way you can get people's attention anymore is to show them that other people are being victimized. You have to put a human face on it.

That is my view, and that is what we are going to try to do in the HUD Office of Inspector General, because I don't think I am being used enough by the Congress, and I think the Congress has to do the oversight. I don't think the other IGs are being used enough either.

Just one final comment: When I heard someone this morning say that GAO has 3,000 people, I was shocked. Do you know how many people are working in federal Offices of Inspectors General? It has to be about 15,000. This is big-time. This is billions of dollars, my friends. You are not using those people, and they exist because of you.

ERIC THORSON: I have put a very good friend, Sheila Hershow, in the unenviable position of following Susan Gaffney.

Sheila?

SHEILA HERSHOW: I want to start by thanking Ginni for inviting me here and telling you why I'm here. I'm here because I'm looking at a room full of people who have access to information I would desperately like to have. And not one of you, not one of you who is sitting in this room has ever been a source of mine and I am an optimist. I brought business cards.

Now, what I am going to do is to start by doing what television does, and that is to show you pictures. I'm going to show you an example of the single best story on government waste I have ever done in my entire career, the story that had the biggest impact, and the story that is the most memorable.

I am going to show you two minutes of video that aired in 1990. If you saw it then, I guarantee you, as soon as you see it, you will remember it.

I should also tell you, in introducing this, that the topic of this government waste piece is something that no congressional oversight committee would touch with a 4,000-foot fork. Specifically, the topic was "Junket." It was a junket taken by the Ways and Means Committee to the beautiful island of Barbados, five days of fun in the sun with nine members of the committee, about two dozen staffers, spouses. Here is some of what they did during those five days.

(Videotape played.)

SHEILA HERSHOW: That is probably the most amortized video I have ever shot for ABC News. We have used it over and over again. That is because it is unforgettable. Once you have seen the guy on the beach with the wad of money and the cigar, you will remember it a decade from now.

And this is what television works on. It works on examples that people will remember, because the picture is there, because you can see it, and because you can understand it and it is unmistakable.

Let me tell you right up front what Sam Donaldson and I did not ask each other when I came back with this video. We did not ask each other, "Were there more Democrats or Republicans on that junket?" We did not ask each other, "But what is the overall voting record of these guys junketing on the beach?" We didn't care.

You may think of Sam as an example of the liberal media elite, but this was a Democratic junket, and we were perfectly happy to take these pictures and put them on the air. It didn't matter to us if this was a Republican group or a Democratic group. What mattered was that this was great video. This was government waste and provable. They were there for five days. During those five days, which we documented hour by hour, there were exactly two lunchtime meetings, and that was the only business that was done.

This brings me to my next point, which is, when it comes to government waste and the impact on the American viewers, size doesn't matter. What we are talking about here is $42,000 in wasted taxpayer money: $42,000. The Pentagon doesn't even bother rounding off that kind of money. They're rounding off about three decimal points further over.

But people got upset about this. Two years later, six of these guys lost their seats in campaigns that featured photographs and video taken from my report.

So when I say that size doesn't matter, I'm absolutely serious. We did government waste stories, Sam and I. We did dozens of government waste stories. It wasn't whether $2 million or $20 million or $2 billion was wasted, because to people out there, it all looks like big bucks.

What mattered is, was this really idiotic? Was this really stupid? Was this something you take one look at and say to yourself, "How could these bozos have blown money in this way?" That is what people respond to.

Some while ago, Congressman John Dingell did a hearing about waste and fraud and abuse in the defense industry. He dealt with a company that had many, many millions of dollars of overruns on major weapons systems, and what did every reporter covering this focus on, myself included? The fact that the president of this company put his dog in a $200-a-night kennel and charged the government for it.

Everybody gets that. We get $600 toilet seats. We get $400 hammers. What we don't get is an unknown overpriced widget that the Air Force bought, and you have a guy in a suit explaining to Sam Donaldson, "You know, this is a waste of money, Sam," and you have an equally boring guy in a suit saying, "No, Sam, it's not a waste of money," because it has to be absolutely clear. Joe Six-Pack is not going to yell, "Hey, Mildred, get in here. There is this really boring guy talking jargon here. And do you know what? Here is another equally boring guy saying he doesn't know what he's talking about."

People love potties. Potties are gold. You give us a $750,000 outhouse in Delaware Gap, and we are happy, folks. You get an amount of outrage from the American public that you would not believe.

Let me show you what a Republican has done in terms of looking for government waste. This stuff comes from Senator John McCain's Web site. It is raw stuff that I got in the last six weeks because the Washington Post did a front-page story on a record amount of pork-barrel projects in this year's money bills.

This is perfectly useless for a television news magazine producer like me. There isn't a damn thing I can do about it. The Washington Post put it on the front page. I can't use it. The reason is that what McCain has done here is simply list earmarked projects and the amounts of money spent on them. He has spent no time explaining which of these projects are idiotic, and I'm sure some of them are. But just because something sounds stupid -- research into low-level blueberry bushes -- just because it sounds stupid doesn't necessarily make it a waste of money. Maybe there was a blight. Maybe millions of dollars are being lost in Maine because of this low-level blueberry-bush blight. Maybe this amount of money is a terrific expenditure of taxpayers' money.

It doesn't help me to tell me that somebody wanted it spent. It helps me if you tell me that they wanted it spent, and it is stupid. It's dumb. There are some things on the list that I can make a pretty educated guess that they're dumb. The World War II Aleutian Island Museum? God, anybody unlucky enough to be in the Aleutian Islands in World War II, they're going to really want to go back there?

So don't do this, because we live by specifics. I have to go out there with a camera crew. I've got to spend a thousand dollars a day getting pictures of something, and give me something that is worth getting a picture of.

Let me show you an excerpt from an investigative report done by an IG. It deals with one of those great standby scandals that we do every five years or so, the so-called spare parts scandal. Spare parts were not discovered with the $600 toilet seat. A guy named Otis Pike did a spare parts hearing back in 1969. About every five years, somebody is doing an overpriced spare parts story.

Here is what has happened recently. The IG of the Department of Defense did a report on overpriced spare parts. The blacked-out lines are what the parts are. The company that overcharged claims this is proprietary information, and the IG believes this. Oh, give me a break.

This is where you guys come in, because you take a look at this and you say, "Where is the toilet seat on this? Where is the ten-cent screw that cost $10,000?" You don't just say it, but you get it. You get the actual item. We need to see it. If we can't see it, we don't talk about it on television.

Sometimes there are terrific examples of government waste where the pictures are boring. We did a story about the government spending some ridiculous amount of money, 50 cents a page, $5 a page -- as I said, size doesn't matter -- but it was for photocopying. The picture we used, because watching documents come out of a machine is boring, was Sam Donaldson walking into a little photocopy shop that had a big sign on the window, "2 cents a page." Sam walks up to this terrific guy behind the counter, and he said, "How much would you charge to photocopy this page?"

The guy says, "That will cost you 2 cents a page, sir."

Sam says, "What if I had 10,000 pages?"

The guy says, "Well, that would cost you 2 cents a page, sir."

Sam says, "What if I wanted to give you 50 cents a page?"

The guy says, "Only a crazy person would do that."

There's your picture.

Let me explain that when Susan wonders about what gets people outraged, what gets people outraged are things that they understand. They understand people like them being victimized.

Eric Thorson did a brilliant, brilliant, brilliant investigation of the IRS which got a ton of press. The amazing thing is that people like me could go out there and find real human beings who are really hurt by this and show how they were hurt. After Eric left the Hill, a year later I came back with the idea that we were going to look again at the IRS, look at the supposed reforms, and see if the agency was really kinder and gentler. The agency reforms were supposed to help really poor people who were being victimized, and they were supposed to help innocent spouses -- you know, women whose husbands hadn't paid their taxes and they didn't know about it, and then they get divorced, and the IRS then goes after them, because the husband is smart enough to hide the assets, and the wives who are now working at minimum wage jobs are not.

So I went out there looking for victims. It is not easy to find IRS victims, because people are not allowed to tell you who they are. IRS insiders can't. It's against the law for them to tell you who their victims are. Even if the IRS employees have hearts of gold and feel terrible about this, they can't give you the victims' names. People like Eric, congressional investigators, can't give out the victims' names either. But you can give the victims my name.

We came up with victims who were incredible, unforgettable. We came up with Ida Mae and Curtis Graham. This is a couple in their 70s. Ida Mae is a world-class crier, and she has reason to be. She is watching her 79-year-old husband holding down two jobs. He is working in Wal-Mart. He is working as a substitute teacher. And Ida Mae is sitting in her tiny little living room worried that the IRS is going to take her house away. Ida Mae is perfect. Her husband is perfect. He is a World War II veteran. We have pictures of him in the Navy. He is talking about what his own country is doing to him. And that is what you remember. You remember the Grahams.

They are still out there, folks. Do you want to do an investigative hearing on IRS? Bring in the Grahams. They will tell you their story. Nobody has. And you will get press.

Our innocent spouse was a woman named Nancy Johnson whose house was sold because of a wrongful IRS action. The IRS, by the way, now, months later, has discovered, oops, they made a mistake, and they're going to give Nancy $40,000 to $90,000.

But what we were there for was the yard sale, and that was the picture: this woman standing in her yard, this middle-aged, middle-class suburban mom standing in her yard selling 25 years of possessions because of something that wasn't her fault, which the IRS now says wasn't her fault.

You watch this video. I was watching my cameraman. He was crying while he was shooting it. Look, folks, I don't do brain surgery. I do television news. There is a formula here. I need victims, real victims.

Another question I am going to ask is, who is the bad guy? If you are going to point a finger, find out who you want to point the finger at. Who is to blame here?

(Videotape played.)

SHEILA HERSHOW: Chances are somebody took a picture of this, sold us a story that made it onto a television newsmagazine about an amphibious vehicle. Why did it get on? There was a test showing this vehicle sinking like a rock. I can use that video. Anybody would use that video.

The C5-A air transport, why did it get a ton of press? Because there was video of the engines falling off, the wheels falling off. This stuff exists. Video of the Maverick missile's infrared system malfunctioning in the early days, and it blew up an outhouse. Great video and audio, because you hear the pilot say, "Oh, bleep. We just blew up a bleep."

So give me a victim. Give me a bad guy, and give me a voice of outrage. This is the payoff, folks, because who is the voice of outrage? It is the guy you work for, the gal you work for. And it's not hard to be the voice of outrage.

This is what I give you: national attention to a story and a chance for your person to look great. It is not hard. All the person has to say is -- and repeat after me, folks -- "Sam, this is an outrage."

It's that easy. I remember we did a story -- now, a great picture -- we did a story about Army parts that were supposed to be re-used, and they were rusting, and they had been rusting for 10 years at the Touele Army Depot. We had pictures of jackrabbits hopping over this stuff and sagebrush growing through it.

We went to the Senator who had brought this to public attention, which was why we went to him, and Sam said, "Senator, how can you justify this?"

The Senator said, "I wasn't, Sam; I mean, I'm the person who objects to this." No. The answer is, "Sam, it is unjustifiable because" -- repeat after me -- "this is an outrage."

Thank you very much.

ERIC THORSON: Ralph, you've got the same problem she had. You have to follow Sheila.

I'm sure all of us up here who have known him a little bit or a very long time know him to be one of the absolute finest, most professional reporters who has ever been in Washington. Unfortunately, as I said, we lost him to Los Angeles when he got promoted. With any luck, some day he will be back.

Ralph?

RALPH VARTABEDIAN: Thank you. It is a great honor to be here. I want to thank Ginni.

I would like to talk about investigative reporting and oversight. I love the thrill of investigative reporting and oversight. I like to make trouble. I like to see newspapers make trouble. I like to see government investigators make trouble. That's what it's all about, because if you don't make any trouble, the apple cart never gets turned over.

And newspapers, when they are really working right, when all the stars are aligned, newspapers can do some beautiful investigations. I have a reporter who works for me who, if he was in this town, he would have this place boiling over. He just won a Pulitzer Prize for his investigations of the music recording industry.

What is to investigate in the music recording industry? You wouldn't believe the things he found out. He penetrated the world of rap music. If you think it's tough to penetrate a federal agency, try rap musicians. This guy was so good, he had all the mothers of the rap musicians as his sources, and once he had the mothers as his sources, the kids were talking to him.

He had communications with them while they were in jail, while they were out of jail, with their attorneys. His interviews are a lesson in how to conduct an investigative interrogation. It is just beautiful to sit 20 feet away and listen to him all day.

So we know how to investigate. You all probably remember the sinkhole on Hollywood Boulevard. This giant hole developed; it sunk down 40 feet. It was like an alien spacecraft had landed. And it turned out it was a subway tunnel collapsing, and it got a lot of national coverage.

We had been reporting on the MTA [Mass Transit Association] fiasco for several years, what a whole boondoggle the L.A. subway was. It was all federally funded, and eventually the funding was cut off. It was just example after example.

Recently, we have been investigating the community redevelopment thing, which is the largest federal response to the Los Angeles riots. You probably all remember the L.A. riots a few years ago. It was a complete and utter failure. That is something we have been pursuing on our own.

The point here is, we don't need you. We can go out and do really effective investigations because we know how. Not all the time, but we can do it. And you can do it. You can do really good investigative work. Nobody will know about it, but you can do it.

You do it all the time. I read GAO reports every day. I read IG reports. I read committee reports. They are probably boring, nobody else will read them, but I find them really exciting, because there is such good investigative oversight work. And they just never see the light of day.

Somewhere in there, there is a relationship issue. I think a number of the speakers today have talked about it. You are not getting your message out, the press isn't interested, and I'll talk about all that stuff.

I have worked with Eric and I have worked with Bruce. The relationship with Bruce goes back to 1984. I remember the day I walked into his office in one of the House buildings. I said, "Hi, I'm Ralph Vartabedian. I'm kind of new at the L.A. Times, but I would like to work with your committee."

Then he said, "Well, maybe."

And it worked out. We eventually built up a relationship of trust. With Eric, it was a few years later, I think it was the late '80s, and we both had a relationship of trust.

I think that many of you, or some of you at least, have this impression that the way you get your work out in front of the public is, you get the report all bundled up, you tie a ribbon around it, and you yell, "Sooey, come and get it; here, pigs, come and feed at the trough. Put this in your paper."

That is not the way it works. It will never work that way. If it does work, it works poorly. You will get a sound bite. You will get something short. You will get something that lacks meaning and substance, even if it gets in the paper.

If it's not done intelligently and with substance and thought and contribution by the reporter, it won't matter. Bruce never said, "Here's the report; give us some credit. Get Representative Dingell's picture on your front page." That is not the way it worked with him.

He would say, "Here is a document that you want, and you don't have to attribute it to the committee, but at some point, would you mention that we are doing the investigation?"

Sometimes the relationship worked the other way, I like to think. It was never as though I was going to that trough, because that wouldn't work. It wouldn't work in the long run, anyway.

Most of you probably don't know reporters; you don't want to know reporters. That is fine. We'll go on. We do our investigations. Yours will never get out to the public. You might not care if they do. But if you want to engage the American public, you are going to have to deal with the news media in some way.

If you are the investigators, you are not going to do it by hiring a public affairs person who will, at the last minute, try to get a reporter in. That is not going to work. It's hard work to develop trust in relationships, but that is how everything gets done.

Let me just talk a little bit about some of the elements of oversight investigation that appeal to us. Are the allegations vague or are they specific? So often I will try to cover a hearing or read a report, and there are no finding. There is nothing of substance. It is just a bunch of vague allegations or suggestions. There is no object there.

Sheila's example of the IG reports is perfect. Where was the beef?

Second thing: Is there demonstrable harm to the public interest? So often I see reports that don't demonstrate any harm to the public interest. I think a lot of the reporting that we do about campaign contributions is an example of that. We show that a politician gets a campaign contribution. We show that that politician has supported legislation of interest to the party making the contribution. But where was the harm to the public interest? You have to show that.

And to pick up a point that Sheila made, can it be related in a way ordinary people can understand? Or is it just hopelessly thick with irrelevant procedural detail? Is it real? Is it credible? Are there people involved?

I went to the hearing that Eric did on the Internal Revenue Service. There was an awful lot of pre-publicity on that. That is one of the things that sometimes is very effective for congressional oversight hearings, is to do pre-publicity. Yet that pre-publicity almost backfired in his face, because people started to say, "Hey, this is all hype. This is partisan. This is premeditated partisanship."

The first day silenced that completely. He came up with four taxpayers that central casting could not have done a better job on sending down as victims of abuse. One of them was a Jesuit priest who had taken his late mother's estate and set up a charitable foundation, and the IRS hounded him to death and destroyed his plan. How you did that was unbelievable. It was great work. It was specific, credible, and there were live people. And that goes to drama.

Drama is important for TV; it's equally important for us. We have to engage our reader very quickly. I always think that I have about three or four seconds of reading time, and if I don't engage a reader in that space of time, he or she will just go to another story or throw down the paper and maybe turn on ABC News.

The marketplace for information is huge. People are getting bombarded all the time. It is harder and harder to get people to read at all. And if you don't make it interesting very quickly, and if it is not intelligent and well-written, people will not read it, and it won't matter.

The final point I want to take up is this issue of lack of press interest in oversight. I think there was some merit to that. I think that we're doing some very good investigative reporting, but we are not doing enough. I don't think we are doing as much as we used to do when we do it.

That's more of a press issue. I don't want to get into self-examination of why that is, but I think that we are probably less interested in the government than we used to be. I think the American public is less interested in the government. The economy is doing well; we are not involved in a war; there is no Cold War. There are a whole lot of reasons why people are excited and energized about things that don't involve the government right now.

I think that to some extent, we are getting the same old story in some aspects of oversight and investigation. How many times can you really generate public interest in a spare parts scandal?

Those are two minor issues. A bigger issue, I think, is that increasing partisanship is making it more and more difficult for investigative reporters to assess the extent to which allegations have some merit, or the extent to which they're political smoke. And I think these last two years has just highlighted that, with the impeachment investigation, and before that, a whole bunch of politically inspired investigations that were not about government operations; they were about politics. The public doesn't have any interest in that, and as a journalist, I don't have any interest in that. A lot of news organizations squandered enormous amounts of resources, investigative resources, pursuing that stuff, trying to beat each other by one day on the latest allegation that Ken Starr was working on, instead of going out and investigating the executive branch or the judicial branch or the Congress. They were burning bucks for the news media and not getting anywhere, not doing any public good.

Another reason that I think there may be less interest in oversight is that the media-hungry committees want a quick payoff. That payoff is getting their chairman before a shield of cameras, in some cases, or a quick story on the front page. There is not really interest in doing the serious, long-term investigative work that you can do when you have the relationship with the news media or the reporter.

Bruce and his sidekick, Peter Stockton, who is not here, did incredible work on Defense Department waste and fraud all through the '80s and '90s. That wasn't a one-shot deal. That was ongoing, and it involved an awful lot of mutual trust and work.

I think that investigative work on government operations is hard for news reporters. There are easier things to be a reporter and cover, and probably some things that are more fun. So I don't think it is something that a lot of smart, young reporters want to do. They want to go cover the entertainment industry or the Internet industry or something that they feel has a future.

I don't think investigative work about federal agencies is what they see as new and exciting about the future, to be honest, unfortunately. I think what they are doing is not as meaningful to the public as the stuff that really gets to the heart of what affects almost every American.

With that, I'm done. Thanks very much.

ERIC THORSON: 1985 is when I first came to Washington as a political appointee, and I was as naive as any political appointee that you will ever find anywhere. They called me in within the first few weeks of coming to Washington and said, "We have a job for you."

I said, "Great, all right. I'm ready to go."

They said, "There is this very bad man, and he wants to investigate Air Force bases. You are going to follow him around and find out just what it is he is looking for."

"All right. Who is he?"

"He is from the Congress. They are very bad people, and this person in particular is the worst of the lot."

I thought, "Oh, God, that is terrible."

"That is why you are going to follow him and find out every person he talks to and what he does."

I said, "Well, who is this?"

He says, "Just know enough to know that this is the Devil incarnate."

Okay. So I went out there. I made the rather large mistake of coming home. And they said, "Well, what did you find?"

I said, "First of all, he asked some pretty good questions. How come you don't answer them?"

That was sort of the beginning of the end of my time in the executive branch. But it is a great privilege, almost 15 years of a great friendship, a trusted friendship, to introduce the Devil incarnate, Bruce Chafin.

BRUCE CHAFIN: Thank you, Eric. And Ginni, thank you for having us here.

I'll tell you the rest of that story. It turns out that we had a budget cut that year. We had no travel funds. The Pentagon said, "You know, if you let this guy go with you, he's got a Lear jet."

We used to call it "Anywhere Airlines." So any investigation I wanted to do, I would call up Eric and say, "Hey, Eric, we need to go to such-and-such."

"Oh, fine, we'll get the jet."

And the Pentagon literally financed our investigation of the Pentagon for that year, when we didn't have any travel funds. Had it not been for Eric and the plane, we couldn't have left Washington.

Susan was talking about some of these audit reports. As bad as they are and as boring as they are, there are also some times when you can make great hay with them because of the size and the boringness. We sent a job over to the GAO on some Navy missiles back in the middle '80s that were four different missile systems that didn't work. They wouldn't go bang. They were supposed to be bad starters, switches, bad guidance systems and the like.

GAO came back with a 250-page report that didn't move forward the request that we had sent over to them a year earlier. So we get this 250-page report, and the guy I worked with looked at it and he says, "What are we going to do with this thing?"

I said I had an idea. I took out a highlighter and I went through, and all the negative stuff I highlighted. Then I called up every reporter I know and I said, "I've only got one copy of this thing. Unfortunately, it is mine, and I've highlighted it. But are you interested in my copy?"

Everybody said, "Oh, yeah, yeah, yeah." So I sent out 14 copies of something that I said we only had one copy of, and not a single reporter I sent it to reported anything other than what was highlighted.

So I had these horrible front-page stories all across the country about these Navy missiles, and the Secretary of the Navy called over to GAO and said, "I thought this was to be a far more balanced report." Recognize, sometimes our brethren in the media read those reports like someone's mother did.

Anyway, my basic point is to go back to Dwight Eisenhower's farewell address in 1960. He tried to warn the country about the military-industrial complex, the iron triangle of the contractors, the military, and the government.

I think Eisenhower was dead right. The only thing he missed on this, as far as I am concerned, is that it is not just the military. It is every aspect of this government. We have an inside-the-Beltway mentality when it comes to the contractors, the funding agencies, and the authorizing and appropriation sources. And to really effect change -- Sheila talked about the outrage -- you have got to get to the public. You have to go over the head of the Beltway, get outside the Beltway, take it to the American people and let them see how their money is being spent.

I disagree that you need a victim. I agree more with what Ralph says. If you can show it is adverse to the public interest, that is the victim. The public interest, I think, is our greatest victim, not some individual. You have to bring this down to where Mom and Pop in Iowa can understand and get mad. And whether it is $42,000 or $420 million, they get mad. When they get mad, it is amazing how the Beltway responds.

Sheila was talking about some of the spare parts in the military. We were dealing with a $1 billion overrun on a General Dynamics submarine back in 1984. No one cared. When we talked about dog boarding, the country stopped and took notice. It ended up being a $500 question on "Jeopardy" a number of years ago. It wasn't the president of the company; it was the senior vice president, and the dog's name was Thurston.

To show you how much fun it can be at times, we had a group of reporters from the St. Louis Post-Dispatch, which [St. Louis] was the headquarters of General Dynamics. They spent years dealing with that story, four different reporters, and we were having so much fun that -- the gentleman's name was Lovelace. His dog was Mr. Thurston. When he retired from General Dynamics, he retired to San Diego. We eventually got our friends at the San Diego Union to write a story welcoming Mr. Thurston to San Diego. A couple of years later, Mr. Thurston died and he St. Louis Post-Dispatch did an obituary of Mr. Thurston. So we get to have some fun at times as well.

The other Republican that I will quote is the extraordinarily insightful Bill Weld, former governor of Massachusetts. Prior to being the governor, he was head of the Criminal Division over at the Justice Department. We had Bill Weld come over and testify in July 1986. "Why can't we prosecute these defense contractors? What is wrong?"

Bill had in his testimony -- I'm pretty close to being able to quote him, but it is not verbatim. He said, "Military officials often overlook or ignore infractions by defense contractors, not out of evil intent or personal gain, but by the desire to get the mission accomplished: Build the tank. Build the ship. Build the plane."

But again, take out "military." You can say the same thing about cleaning up Superfund sites. You can say the same thing about building the Supercollider. We get caught up in the government wanting to accomplish the task, because people want to know how many of these Superfund sites have been cleaned up.

What is the contractor's number one priority? The money. We end up passing each other. They focus on the money. We focus on the task. And we end up with some of the outrageous waste that occurs all across government.

Well, a footnote to that story. Someone mentioned OMB earlier. The thing I have never understood -- and I don't even know why you tolerate it, to tell you the truth -- we ask these agencies to come up to testify, whether it is Justice, whether it is the Pentagon, whoever. They actually have to clear their testimony through the Office of Management and Budget. So you are outside the agency; you are now in the political realm.

That quote I just quoted of Bill Weld's got cut out of his testimony. He never made that statement in a public hearing. Fortunately, we saw the draft testimony, so I can tell you what Bill Weld was prepared to say. Here is the head of the Criminal Division of the Justice Department trying to provide to us, the Congress, the insight on what's going wrong here. The Office of Management [and Budget] says, "You are not going to speak those words."

Anyway, I think that is the iron triangle that Eisenhower talked about. That is the problem in Washington. It is these agencies that people have talked about, the SES, the bureaucrats. They do have a life of their own.

With due respect to Susan, I came years and years ago from the GAO. I was there when the SES system kicked in. I remember the deal: They were going to give up the protections of the job to take on more money and potentially open themselves up to bonuses. The SES pool has taken on all the benefits of being SES, but they have got as much protection as they did when they were GS-16, GS-17, GS-18.

I remember asking people at GAO, "Name me one SESer who has lost his job." We shuffle them off to special projects, off to the University of Maryland, off to here, off to there. Here is an agency that is charged with ferreting out fraud, waste, and abuse. Is that waste or abuse, when you take somebody who is making $120,000 a year who can't do the job anymore who we are keeping on the payroll? Parenthetically, we pay them more because they gave up the protections of the career job.

But anyway, back to oversight itself. I think I was very fortunate. I really believe I had the Camelot of oversight. I think there are three things you have to have to do oversight. One is the power base, which anybody who has a chairman or a subcommittee chairman has. Whether they exercise it or not is neither here nor there.

The second is the support of that member. Are they prepared to go to bat? There are very few oversight hearings like Eric has where you are taking on the IRS, where it's just contained within a bureaucracy. If you are going after a program, there is a contractor interested in this thing. There is a lot of money interest in this, both inside and outside the Beltway: Who hired lobbyists? Who are their Washington representatives?

Today, with members having to raise so much money to run for re-election, why do they need people like us running around cutting off potential funding sources for them? That is what you end up doing, not necessarily because the source of funds won't contribute anymore because of this investigation. We viewed it as a conflict. When Dingell sent his fund-raisers around, we screened them based on what we were doing and actually eliminated fundraising requests because it was a defense contractor that we were doing something with.

So it truly limits funds. It limits your ability to go out and raise campaign money. I think it is well worth the effort, though.

Ralph described what happened to Eric the night before that first hearing. The reporters were in there wondering, "Is this is all political," and all the rest.

There is an element of risk in almost every investigation you do. You can be absolutely dead right on the facts, but that is not the point. The point is, what power have you just yanked the tail of? Sometimes you don't even know what power you have yanked the tail of.

We were doing an investigation down in Fort Worth, Texas, on Bell Textron, and you have a Christmas card in the mail from the head of Bell Textron's Washington office. Mary Howell, I believe was her name. Mary sent out a little Christmas card saying "hello" and enclosing a newspaper article of what we were doing down in Fort Worth, Texas, to Bell, and then a little thing showing that Bell Textron was the largest defense contractor in Dingell's district.

She said, "I sure am glad you are treating your friends just like you treat your enemies." We didn't know. We didn't care. I didn't know if they ever even had a conversation with Dingell about it, because he didn't care. He had a unique view that if I'll pull punches for mine, then I've got to pull punches for every member on this committee, and if I've got 44 members on this committee, there is nothing we can do.

The Pentagon and others have made a science -- the B-1 was the prototype -- have made a science of putting their subcontractors out into so many districts; I think they had the B-1 in over 300 congressional districts. It comes under fire, and guess what? They come in to the members and tell them how many jobs are on the line.

If you think it's bad, I can tell you, we were trying to do an investigation of the B-2 before it was well-known. We wanted to know a list of the subcontractors. The Pentagon said, "No, it's top secret." They said, "If the Russians knew who the subcontractors were, they could target the activities that went on and maybe learn aspects about it." There is nothing you can do. They get to make those calls.

But six months later, when the B-2 had lost in the House and was coming over to the Senate for survival, our fax machine kicked on, because Northrop was faxing to every member of Congress, showing them the amount of work and the number of jobs that went on in their district in support of the B-2. So it is kind of interesting that it is a national secret from the Russians, but when it comes down to the survivability of the program, they let everybody know what is going on. You get into these things.

We did an investigation of Stanford University, and now-Senator [Ron] Wyden was on our subcommittee. His mother worked in the library. Well, after our investigation and a lot of funds got cut to Stanford, they had to cut back; we got Ron's mother fired. Every time I see him, he says, "Yeah, I just want you to know, Mom is doing okay."

We were doing an investigation of TVA, the Tennessee Valley Authority. They had a nuclear plant that they asserted was ready for fuel load. Going to bring in the rods and going to put them in. And a few people called us with some information on it; we got into it, and the next thing you know, the entire nuclear program of the Tennessee Valley Authority was shut down for over two years. This plant that was supposedly ready to go in a month, 10 years later still wasn't ready to go.

But Congressman Jim Cooper from Tennessee, who was on the Energy and Commerce Committee, came on to our subcommittee specifically for this TVA investigation. As soon as he got on the subcommittee, he called us -- the staff -- down to his office, and said, "Look, guys, I have a real problem with what you are doing."

We said, "That is all right. We have these kinds of problems all the time. Let me explain to you how it works. You go out and you call us every name in the book in Tennessee. You say anything you want to people about these out-of-control staff and this and that, and we will just do our thing, and afterwards we will forget what you said."

He pounded the table and said, "No, you don't understand. I want this to stop."

We looked at him and said, "That's not going to happen," and we walked out. The investigation continued.

The very next hearing we had, the first one that Congressman Cooper is there for, the chairman is sitting on the dais, I'm sitting next to him, and Congressman Cooper is sitting next to me. The chairman delivers his opening statement. Congressman Cooper delivers his opening statement, which is slightly different than ours. He leaned over and said, "Mr. Chairman, I want you to know, I don't think you have been served well by your staff on this."

The chairman looked at him and he says, "Jim, we are going forward here. There is going to be a lot of blood on the floor. You get in my way, and some of it is yours."

Now, if you have a member that's willing to do that, you can take someone like me and actually do oversight. Even Silbey can do oversight in that kind of environment, for God's sake. That is the Camelot aspect of it. Either side of the aisle, House or Senate, I never saw anybody who provided the power base and the support that John Dingell provided.

Most of these things that you get into end up being real, real contentious. Let me just show you the kinds of tails you pull.

Jack Welsh, the CEO at GE, about a month ago was voted the business executive of the century. He beat out Henry Ford. Well, we had to bring Jack Welsh in because GE engaged in a money-laundering operation with an Israeli general to siphon off a lot of our foreign military assistance to their defense program. GE ended up paying $60 million or $70 million in fines. They pled guilty. And we had Jack Welsh in our hearing room. Those people consider Jack Welsh the greatest executive in the country, yet we have to bring him in and ask him these kinds of questions and try to get to the bottom of what is going on, find out what they are doing about it. And that was an everyday occurrence. You can believe that he called, tried to get out of the hearing, and wanted to send somebody else. We would always bring in the chairman.

I have seen Republican hearings go on when I was still working there, where you are talking about a program that has a contractor, and all you do is bring in the auditor and you bring in the agency. There's no contractor brought in. Wait a minute; it takes two to tango. The agency may not have overseen the thing quite right, but the contractor also didn't perform quite right.

We just had a general insistence on bringing in CEOs. We brought in Lewis from General Dynamics, Metler from TRW, Jack Welsh from GE, Tom Jones from Northrop. That was our modus operandi, because we were going to bring in the top guy and have him explain what has happened here.

We did an investigation involving a doctor by the name of Bernie Fisher, who I wish my kids would grow up to be like. He was a fabulous man. He has done more in breast cancer science than I think anybody on the planet. But he also, in the middle of one of these efforts they hosted out of the University of Pittsburgh, they had a site up in Canada making up the data. When they learned about it, they did not notify and do the things that we thought were appropriate.

There was also some experimentation going on with a drug called tamoxifen. We know it's helpful when a woman has breast cancer and worth the risk it entails. The question is, should you give it to high-risk women who haven't had breast cancer yet but are in the high-risk pool, meanwhile knowing that there are downsides to tamoxifen? In the study that was going on, two women had died of ovarian cancer, and again that had not been reported. As far as we are concerned, if you recruit healthy women with high-risk factors but you are going to subject them to a different kind of risk, as soon as you know, they need to know, and let them make an informed decision whether they want to be in or they want to be out.

So we had to bring in Bernie Fisher in both of those instances -- again, a wonderful, wonderful scientist who has done a tremendous amount of work for this country, but we still had to bring him in because of accountability and his understanding of what was going on here within that medical community.

Stanford University I mentioned earlier. Most parents, and I am one of them, would love to have their kid go to Stanford. We had to bring in the president of Stanford University about the whole overhead nonsense that was going on at that university. They got to a point, to show you, that for every dollar we were putting into research at Stanford, we were having to put in about 80 cents in overhead charges to support their infrastructure. Not the infrastructure of the scientists, the infrastructure of the university.

We were supporting shopping centers, antiques in the president's home, a disproportionate share of the library. We were even paying a couple of hundred thousand dollars to support the operations, maintenance, and insurance on Stanford's yacht.

So I come at these things -- I'm neither a Republican or Democrat. I am neither pro-defense or anti-defense. Let somebody else decide the priorities, somebody else should decide how we are going to spend the money. Then let people like me come in behind, and let's make sure the money is being spent wisely.

We are not in there exposing what Stanford is doing to try to cut support for biomedical research. Quite the opposite. If we can get that overhead rate from 80 percent down to 50 percent, that is that much more money we can support in cancer research. Let's not waste it for someone's shopping center or library. Let Stanford pay the cost of their university, and we will pay the cost of adding this scientific research onto the university, the direct cost and then the allocated portion of the overhead. But don't look at us as some big pot of money.

I'll tell you, I never went into an agency where we couldn't find those kinds of problems. And I get disappointed that -- it seemed like back when we were doing our thing, very few people were doing it. Then you've got the member, you've got the chairmanship, now the staff. I have to tell you from personal experience, this is not career progression. Many people that I used to work with were here to get their ticket punched, to learn various aspects, because they had higher ambitions. Ninety-plus percent of the people you come in contact with aren't going to like you at the end of the day, because you are holding them accountable for something. People over at GAO are going to like you. People at the IG's office are going to like you. But they are not going to be able to do anything for you.

But throughout the ranks of General Dynamics and all the contractors that you take on, these are the people that could have given you a job. You are not going to work for any of them. Forget that. I even had a guy, and I won't mention his name, who took me aside and he said, "Look, if you would understand how to play the game, you know, there could be a vice presidency in your future."

That is not what it is about. I have tried to explain it to my kids, because they are always saying, "Daddy, are you going to get fired?" I try to explain to my kids that this is my equivalent of the Peace Corps. I was a little too young to do the real Peace Corps, but this is serving the public interest. If I can connect up through these characters to Mom and Pop in Iowa and get them a little excited about something that is going on, and raise the voices, then we bring that army back inside the Beltway, and it is amazing what we can change.

At times, we feel like we are tilting at windmills. But I've got to tell you, we've got a few of them along the way, and we really did make some changes. I would highly recommend it to anybody. Like I said, it is not a career path.

In 1994, when the House went Republican for the first time in 40 or 50 years, I believe there were about 12 people on Dingell's oversight staff, paid. We had 10,000 hidden people, but there were about a dozen of us that were being paid. And with the exception of one person who fell back on his knowledge of Russian -- he ended up in some kind of AID group in Russia -- and one person who was an EPA expert, the other 10 people, when the hammer came down and the budget wasn't there, I don't believe any of them found a job. Certainly no one lined up to hire them, because, like I said, the people we came in contact with, they might have respected your ability but they did not want to encourage that kind of behavior.

So if you were as fortunate enough, as I was, to find a situation like that, absolutely make the most of it. You'll look back years later and say it is probably the best thing you ever did in your life.

Thank you.

ERIC THORSON: First of all, all of us up here, Ginni, thank you very much for this opportunity.

You have heard a lot here about an awful lot of things, including why oversight is valuable, how to do it, what is the proper amount. In my case, we always tried to do a number of hearings on a single, specific issue, so I was always on a vendetta. Others were criticized for not following up- therefore being accused of doing "drive-by shootings." So the exact amount of oversight is somewhere between a drive-by shooting and a vendetta. That is the amount you ought to be shooting for.

Priorities, making contact with people, getting people to listen -- one of the people that Ralph mentioned, because he is a person I'll never forget was the Catholic monsignor in the IRS hearings. If you ever get a Catholic priest as a victim, grab him. This is a no-brainer.

As for topics, trying to decide what you are going to look at, if you find the United States Marshal Service owns and operates a casino, this is a winner. The biggest problem we had with that was, I talked to the executive producer of "20/20." I told him we had this situation: The marshals seized this casino years ago but would never sell it, and they're making a ton of money. Regardless of the money, the Justice Department is operating a casino. The guy says, "When was this?"

I said, "Well, it's a few years, but it is going on now."

He says, "Wait a minute. You are going to try and sit there and tell me that today, marshals are operating a casino, and their job is as a United States marshal?"

I said, "Yes."

He said, "Sorry, pal. I don't believe it."

We called up "60 Minutes," and the next day they had a guy on a plane, and maybe some of you saw that piece. The marshals did, in fact, own and operate a casino. We had a court-appointed trustee, a government employee, the government's representative, representing all of you in owning this casino.

He made $350,000 a year. Now, how is that possible? I thought the President had the highest government salary. Well, he does, and they matched it, and that was two hundred, and then what he would do was give bonuses to the marshals, $150,000 twice a year, and they would kick him back half. In fact, one of the documents we had was, "I'll be there this afternoon with the check for $150,000. Please make sure my half is ready when I get there."

That is also a winner. You want to grab that piece of paper.

One of the Justice Department officials, before we did this hearing, actually used the term "kickback." You have never seen a person literally reach out and try and grab the words and catch them and bring them back in his mouth like this person did.

The thing that I obviously get asked about the most is the IRS hearings. I don't consider it the best or the most important thing we did, but it is the one that seems to get the most interest.

I usually start and end talking about it with a statement that surprises people. Some of the people who will be my lifelong friends are IRS people. The people that we dealt with are the perfect example of what you want government employees to be. They cared about their agency, they cared about their integrity, and they cared about the character of the department. And they cared enough to step forward and talk to somebody like me.

We didn't have much of a travel budget, so we had hundreds of conversations, hours and hours and hours of talking to these witnesses. As a result, many of them, who are some of the finest people that I have ever met, will be lifelong friends.

Some of you are aware of some of the investigations that have been done on the Hill that may have had 50 or more professional staff plus administrative staff. The entire staff for IRS was three. In fact, the number two person on that investigation is sitting over here. That is Debbie McMahon.

We were very blessed with a minority staff person, Anita Horn, who was one of the absolute best staffers that anybody could ever hope to have on the other side of the aisle and working with you in an investigation.

One of the things that we have talked about here was accuracy. One of the promises that we made to Senator Roth early on was "no mistakes/no surprises." That is tough to do in these hearings, because once the lights go on and the gavel comes down, you don't really know what is going to happen.

The first thing, though, that we tried to do is to set standards for ourselves. We set a standard of how to present this, because we knew that this hearing would be attacked more than anything else we had ever attempted to do. So we decided, first of all, that we would try and get as witnesses someone from every IRS division. That meant collections people as well as examinations people (or the auditors). And what we really reached for in trying to set a standard for ourselves was trying to find a witness from the Inspections Division. That is their internal affairs department. These guys carry guns and badges. If we could get them and maybe even a district counsel (their own lawyer) then we knew we would have something. So it couldn't just be from one department.

Next of all, we had to spread it geographically. If we stuck with one place in the country, that would be seen as one area of resistance, so we had to spread it nationally. We had to be sure we had the country covered.

The last one was probably the hardest, and that was 20 years or more experience. No rookies. Now, we did cut that a little bit in the choice of the witnesses, but we had some that had over 30 years experience. So they couldn't say these were new people that really didn't understand the program.

That was the goal of how we went about trying to set up this first set of hearings, which was in September of '97. Most important, you must tell a story. It has to make sense to the people watching it, and that includes the members that are sitting up there at the front, because many of them don't know what the hearing is about.

So you have to tell a story, and to do that, you have to choose your witnesses very, very carefully. We finally realized that the story on IRS was not taxpayer horror stories, although those were certainly bad enough. But the real success of this hearing would be because of the participation of IRS employees themselves. They would tell the story. Nobody else could. No staff person was going to sit in front of the committee and read a report. You had to be able to have them tell the story, because only they knew what was going on in one of the most secret agencies of government.

One of the things that we did in talking to them hour after hour after hour would be to verify the stories. If we heard something was going on on the West Coast, we would call one of the sources on the East Coast and see what they had ever heard of the same type of thing. We would try and corroborate in any number of ways.

When we finally had the group of potential witnesses, we said, "Okay, you have been terribly helpful. This has been great. But there is one more thing I have to ask you."

"Okay, what?"

"Would you say this all again in front of about 20 million people?"

What we also did here was, we overstaffed the panel. We put more people on it than we needed, because what we thought would happen is that when the lights came on and they walked into a room and there were some 20 cameras there, some of them were going to say, "No thanks. It's just not worth it to me to risk my neck and my career, and I just can't do this."

So we planned for that. Again, much to the credit of these employees at IRS, not one of them did that. They were terrified, absolutely terrified. I have never seen fear of an agency like I have with this group. The one thing they all requested was anonymity, and they were very serious about that.

Now, we got nailed for that, because we were told, "All you are doing is trying to add drama and hype to the hearing." That is not true. It would have been much more -- especially for the cameras, it would have been much better to have the faces seen and their voices heard clearly.

The last thing we wanted, for instance, was the important messages that these people were giving, masked by a voice distorter that made them sound like Daffy Duck. But that is what they asked for. That was the level of fear that they had of their own agency.

They were brought in early in the morning -- it was still dark -- to a place somewhere near here, where the Capitol Police took over and assisted. They were brought down into tunnels and taken up elevators that I didn't know existed, eventually put into holding rooms. One of the other things they asked for was, when they crossed hallways in the buildings, in the Senate Office Buildings, that all the hallways were cleared, and they also wore black hoods over their heads.

The rumors in the press reports were that they were hooded witnesses testifying, and that wasn't true. They removed the hoods as soon as they got in the hearing room.

As you may remember, there was a big screen behind them, and cops at both ends. The things that they said in that hearing changed an agency -- not a lot, not enough, but it changed an agency.

The security there was, again, used against us as staff, because it was rumored that we were doing that to hype the hearing. I've got to tell you, these people would be the first to object to that.

The hearings went off. There was lots of press. So what are you going to do next? That was the next problem. One of the things you never want to do is try and do exactly what you did before, especially if you did it and it worked out okay.

So we decided that we would start looking for one department that we hadn't been able to penetrate yet, which was the Criminal Investigation Division, the CID. What we had learned from sources inside was that there had been an effort to frame three political figures. The problem with that was that when it was discovered, the person who had framed these people built a false criminal case and received no retribution, but the person who broke open the case, however, which happened to be the agent's immediate supervisor, was the one who received retaliation.

We sat on this story for almost a year. It couldn't be used in the first hearings because nobody was ready for it. You couldn't have heard that story until the groundwork was laid. And as a staffer, let me tell you, it is very hard to hold back something like that.

You also can't do that with one witness, because they will just say, "He is crazy; he doesn't know anything. You can't believe him." They won't believe this stuff. We had three who were all involved in that one case and knew exactly what went on.

So when we put this hearing on, we brought these people in. They would be right out front, and everybody would know who they were from the source of the story, the facts of the story.

When they testified, there were three empty chairs beside them. When they finished their testimony, three people came from behind the room, the big marble room in the Hart Building, and sat down, and the first witness said, "My name is Howard Baker." He was one of the targets that they had just been talking about, and Congressman Jimmy Quillen, and the Attorney General of Tennessee, David Crockett.

One of the more interesting moments I ever had as a staff person was going to Howard Baker's law office and telling him about this case. The other two knew, but Howard Baker had never known that he had been the subject of a frame.

So how do you handle witnesses like this? I'm not trying to relive that hearing, but I am going to read you an excerpt from the hearing because I want you to think of the person who is giving the statement, the witness that you've got that is willing to come forward and trust you enough to protect him when he makes this statement.

This is a guy, twenty-some years in the Criminal Investigation Division, he is active duty today. And he said, "IRS management does what it wants to whom it wants, when it wants, how it wants, with almost complete immunity. Each district director and chief appears to operate his own little kingdom, and in some instances with little regard for the law and/or government rules and regulations. Management then uses the unlimited resources of the federal government -- that is, taxpayer funds -- to cover up its acts and destroy its opponents, whether they be employees or taxpayers. The greatest problem within IRS today is, management has no accountability. When an IRS manager makes bad decisions, violates government rules and regulations, and/or violates the law, that person is usually promoted or the situation is covered up."

Now, this particular individual that made that statement, to me, is one of the finest examples of a federal law enforcement officer you could ask for. Even the people who didn't like him said his integrity was unquestioned. Those are the kind of things that you hear, and those are the kind of people you have to protect.

Senator Baker came in, and I wanted to give you a little bit of what he said, because it says a lot about why we all here to the kind of work we do. He expressed it very well. He said, "I would like to express my profound appreciation to Special Agent Henderson, Ms. Gernt and Mr. Latham for standing up for justice and for my rights as a taxpayer and citizen at the expense of their own career, and for them to know that I am grateful.

"Had this matter proceeded, I am confident that I would have been in a position to employ the best lawyers and accountants and to demonstrate the fallacy of these allegations.

"But, Mr. Chairman, I am deeply troubled that others who are perhaps less fortunate but who might find themselves in a similar situation with such charges leveled against them might not have the resources; they might not be in a position to defend themselves.

"It is for that reason, more than any, that I commend this committee for inquiring into these matters, for ventilating these facts, and to protect those American citizens who might in the future be subjected to such indignity and humiliation."

Now, I have never heard anybody express it any better than that. We all want to be able to have that effect on people.

There was one lady in a case we worked on with regard to this investigation who, after her entire life turned around for the good, called me and said one day, "I never thought anybody in the United States Senate would ever call me back."

I said, "Why not? That is what we are here for."

Now, a lot of this goes into the specifics of how you put on a hearing, what you do, connecting with real people, et cetera. You have heard all that for hours today.

Let me give you a little bit of what was going on during the hearings that we did not find out until later. This is the chief of the Criminal Investigation Division talking to his own people:

"In anticipation of the hearings, we began to develop materials relating to CID and to conduct weekly briefings with the Commissioner, Treasury officials, and more importantly, with members of Congress.

"These briefings started in November '97 and continued through the actual dates of the hearing. Background materials were forwarded to headquarters, where a full-time team of senior special agents worked in the war room to review, analyze, catalog and assemble the materials. In-depth briefing documents were provided to the Commissioner, Treasury and key members of Congress.

"I met with 90 of the first assistant United States Attorneys to discuss the potential and negative upcoming hearings. Their overwhelming response was, 'How can we help?' Further, six United States Attorneys made themselves available to the media for pre-hearing interviews. Thursday prior to the hearing, we still did not know what the hearing was about. We went to visit the Democratic staff of the Finance Committee. They, too, had been kept in the dark."

That is true. This probably brings new meaning to the term "ignorant bliss." Had I known all that was going on, I am not sure that we would have done this with quite the zeal that we did.

But I use this as an example to show you the kind of things, the kind of forces that can be happening around you when you take on these kinds of things. One of the things that people talk about so much is, "Well, they made so much change, they did all this good." Well, we were very proud of the fact that there was a bill. That is why I use this so much as an example. There was a bill; it passed the Senate unanimously, and it began to restructure the IRS. Of course, there is a lot of mileage left to go on that.

One of the last memories related directly to this that I had was, Debbie and I went to the White House for the bill signing. It was one of the funnier aspects. It was about 120 degrees and about 200 percent humidity outside. We were the last ones called into the East Room of the White House.

Anyway, we went in, and she and I sat in the very back row in the East Room of the White House and watched the President sign that bill. It is something you never forget when you have done this much work on something.

But then afterwards, our cynicism, I guess, kicked in again, because the President literally couldn't get out of the East Room because of all the requests for photographs, with the members of Congress up there circling around the President with his pen in his hand.

As we were walking out, we stopped and looked back and just kind of shook our heads, because many of those members of Congress standing up there wanting their picture taken at the signing of this bill were the very same ones that fought us tooth and nail on putting on these hearings.

There are two things that are so important. Leave the politics out of it. Not one time did we ever ask a taxpayer who called for help -- not one time did we ever ask him what party he was affiliated with. They tried to inject politics into those hearings. It was a sort of knee-jerk reaction, I guess, because IRS belongs to Treasury; Treasury belongs to the White House; the White House belongs to the Democrats. Therefore, they had to defend them. This had nothing to do with politics, nothing.

The second thing that is so important is the courage of the chairman. I have been very fortunate. I had chairmen that I worked for that didn't put politics in any of this, wouldn't allow it. I have had chairmen who have had the guts to stand up and listen to this kind of thing and say, "This is what I want to put on; this is what I've got to do."

All I can wish for you is to have somebody like this to sponsor your investigation, because it is their investigation. We have no power. It is their power. Without them, we have nothing. Without their desire to go into that hearing room, we have nothing. So that is the main thing that I could hope for any of you who choose to wade into this.

In closing, let me say that I can't thank you enough for the work you in the Congress do. We all believe very strongly in what we did and do, that it helps create a better, more accountable government.

Thank you.

VIRGINIA THOMAS: We have some heroes up here at the front of the room, and each of you sitting here are heroes in your own respect. You are all working for a good cause, and you have that capability; you have the power; you have skills; you have insights.

So I would love you guys to ask some questions of these folks up here. I know they would love to answer back.

DAVID CONNOVER: Thank you. Dave Connover with the Environment and Public Works Committee.

My question goes to -- the first panel we heard from said we should try to do this in as bipartisan a way as possible. The last panel, I heard, "The Democrats didn't know what we were doing." And I don't know whether Bruce mentioned anything from their practice. I would be interested in your perspective in reconciling those two.

BRUCE CHAFIN: I can speak from our perspective, and I thought it was terrific, because much of the time when I was engaged with Dingell and we were doing oversight, the Republicans did control the White House. For a number of years, the Democrats controlled it.

So we had an understanding with our minority. If we get into something you couldn't support us on, regardless of the facts, let us know; we will carve you out. Anything that you can play straight with us, you are a full partner. You go where we go; you see what we see; we travel together; we see everything. You ask questions. There is no difference in party affiliation on probably 95 percent of it.

But there were times that right up front, given the nature of the investigation, our Republican staff would say, "God be with you, but we have to stay on the sidelines." We carved them out.

I would have done the same thing in Eric's situation. If I were going after the IRS, knowing how Treasury was going to respond, how the White House would respond, I wouldn't include the minority if I was a Republican and had the Democrats in the White House.

We had a wonderful working relationship, I thought, with our minority. An interesting footnote, though, is when the House changed hands, we had this minority staff who had spent a lot of years in the trenches with us: had seen it, done it, and knew the process. Every one of them was let go under the new Republican leadership, because it was perceived that they were too close to us; they had gotten co-opted by us, and they had created many of the same enemies that we had created.

So coming in on day one of January of 1995, you had three or four very seasoned oversight people that were literally let go because they somehow didn't control us. I just thought it was one of the more bizarre things.

FRANK SILBEY: I did numerous organized crime investigations dealing with both the Witness Protection Program and Mafia families. I found that when dealing with the Justice Department, you were dealing with, in my opinion, the most politically sensitive organization I have ever dealt with in the government.

I had a rule when I was a staff director that the minority always got one-third of the money, space, and job slots. They had a right to that. They represented millions of people who voted for them. But with organized crime cases, you never could tell when a member had been gotten to. Therefore, you had to do handle the case like the CIA does, by compartmentalizing everything.

At the other end of the scale, there has been aa wonderful example of bipartisanship set in the House recently on the House Natural Resources Committee. If I were to pick an agency has never been looked at and really needs to be subjected to congressional oversight and investigation, it is the National Park Service.

Sheila mentioned that they gave us the $300,000 potty at the Delaware Water Gap. They also gave us a million-dollar potty at Glacier National Park. They say they haven't got any money. I'm not dumping on the kids in Smokey hats. But their senior people went right around the entire congressional authorization and appropriations process, and are now trying to allow a private developer to build a commercial shopping mall inside the boundaries of Gettysburg National Military Park.

In this case, Congressman [George] Miller, the ranking minority, and his staff and Congressman Jim Hansen of Utah, chairman of the oversight subcommittee, and his staff, have worked like two pistons in an engine in order to try and stop this abuse.

It all depends on collegiality and personal relationships. Here ideology can sometimes be a bone in your throat. You can't look at the person on the other side and say, "I'm looking at you first as a Republican or Democrat or a conservative or a liberal." You have to get to know the person. Are they oriented toward oversight? Do they have the brains and guts to do it? Will they be stand-up people, or are they going to put a knife in your short ribs if you trust them? The question is always there. Then there is the reliability of these people.

I once did an organized crime hearing, and I hired a man as a favor to one of the greatest investigative reporters of that time. He had won several Pulitzer Prizes. I owed this man many favors and hired his son., who turned out to be a disaster. For the organized crime hearing, we obtained documents from the Justice Department. The name of a crucial witness was supposed to be whited out, but this was done so incompetently that if you held the document up to the light, you could see the witness' new name and location.

My chief clerk, who saved me from a disaster, yanked me out of the hearing just as those documents were about to be released and showed me what had happened. If you haven't got a staff person you can rely on, if you haven't got a minority that will keep its word and work with you appropriately, you could have just such a disaster. Oversight, as someone mentioned, is like a sword; if you lose control of it, you could be struck down, or at the very least, fired.

ERIC THORSON: You asked a question about my statement that the Criminal Investigative Division of the IRS was telling their people that they went to the Democratic staff, who didn't know anything about the hearings.

Earlier, I said we were very blessed to have a minority staff member who was just outstanding. We trusted her to such a point, she was one of the few people who actually knew the identity of the secret witnesses. Her commitment to what was right and to try to work for the people who were putting their necks on the line was such that when pressured, she would not even tell her own staff or her own staff director what she knew.

But it was very important that people on both sides were aware of and had checked the credentials of the witnesses that we vouched for and were behind the screen. Even the Senator did not want to know who they were, because he was concerned that he might release that at some point accidentally.

So there was involvement on the minority. Some of them were absolutely hostile during those hearings, but we were very blessed in having a real pro to work with on those hearings on the minority side.

BRUCE CHAFIN: Let me add a quick thing. When you said that, it triggered an old memory.

Things can get so insidious in this business. Our old Energy and Commerce Committee -- this was long before I was there; I believe it was in the '50s. I think it was a payola of records investigation. Our full committee subpoenaed our subcommittee. Here was the chairman going against the subcommittee chairman, because they had gotten some information that was way too sensitive.

Some great patriot took the records and put them under an old oak tree right out here on the plaza, and they got out publicly, and the whole thing became known.

So sometimes we talk about Republicans versus Democrats, minority-majority. I have seen harder times where it is the full committee versus the subcommittee within the same side of the aisle.

WINSLOW WHEELER: Winslow Wheeler, formerly of the GAO and now with the Senate Budget Committee.

I would like to try to address the issue of cosmetics and substance. Sheila, you talked about how the amount doesn't matter, the cosmetics matter. Susan, you talked about these boring reports that you love that have all the substance in them. The rare instance is when you can link up the two and get beyond the cosmetics to the substance.

The point of the spare part horror stories in the '80s by Ernie Fitzgerald and Tom Amly and all the others was to give you the information that would allow you to begin to understand that the gobbledygook whizbang up there that they say is $20 million a copy is just as proportionately crazy as the $600 toilet seat.

The question is, how do we get from Susan to Sheila or from Sheila to Susan? Eric wasn't able to do it. He had the great, lively, glitzy witnesses: the priest, the crying housewife, the whole deal. Then he got out of the system some legislation that started a process.

Right now, there is almost no interest in defense issues in the press. "Spare parts" is old news. It's only news if it is some new cosmetic thing. With that kind of attitude in the press, with no investigative journalists worthy of the name that I have seen in the press, with very few exceptions, how do we get from the stuff that your bosses insist that you put on, or else you don't get on, to the stuff that Sheila can't get on no matter what happens?

SHEILA HERSHOW: The answer is that the specifics that we use are not the whole story. They are never the whole story. The sizzle is a bunch of guys running around on the beach throwing the football around. The steak is what was accomplished there. The number of junkets that occurred that year, the amount of legislation that was influenced by that particular junket, and that all made it into the story. That was in the story.

What the illustration does is give you something to remember it by. Nobody, I think, knowing about the $600 toilet seat operated under the illusion that the plane wasn't overpriced. In fact, Ernie Fitzgerald had a great line about that. He said, whenever you saw an F-16 flying overhead, you were seeing a collection of overpriced spare parts flying in formation.

We made that point, and we made it in every single story that we did. We made the point of the total amount of money. We made the point about the breakdown in controls that led to $400 hammers, the same breakdown in controls that leads to a $2 billion overrun on the C5-A.

But you are absolutely right. You are not going to get it on the air unless you give people something interesting to watch.

Look, I can be as hard on my profession as anybody else, and one of the things that we hear repeatedly about television newsmagazines is that the only stories we air are that somebody lies, dies, or cries. Well, you can do stories about people lying, dying, and crying that have public interest behind them, that have a bigger point behind them.

You are not going to get a story about massive overruns at Medicare unless you can show that somebody charged her $195 Saks Fifth Avenue shoes, to use the Los Angeles Times story example, to Medicare and did it illegally. That is what gets the story into the paper or on the air.

What gets the changes made is the fact that we take these stories and draw a larger lesson from them. Ida Mae Graham, as tragic as she is, isn't the problem. The problem is that there is still an Ida Mae Graham a year after supposed IRS reforms. Nancy Johnson with her home sale is not the problem. The problem is that there are still innocent spouses out there. If we can find them in a month, why is it that IRS can't find them in a year?

I should mention that I serve a kind of dual role, as some of the people on the panel know. Back in 1988, after many, many years in journalism, I decided I wanted to see life on the other side. I took a job as a congressional investigator. I investigated the bombing of Pan Am 103. During the three months that I did that investigation for a Democratic committee and a Democratic subcommittee and a Democratic chairwoman, the person I worked for was on every single major network, was on the front page of the New York Times and other prominent newspapers in three countries: in Germany, in Great Britain, and in the United States.

At the end of these three months, I was fired. I was fired because, the staff director explained in a memo which was, of course, subsequently leaked to me and just about everybody else in sight, I had managed to antagonize Pan Am and the Federal Aviation Administration, and therefore, I should be fired, even if it meant compromising the Pan Am investigation.

It ain't easy, folks, surviving. I don't know how you guys do it.

RALPH VARTABEDIAN: Can I just take a crack at that?

It's not just a show that we are interested in. It's not just something that's glitzy all the time. If there is some substance there, we will go after it.

I will just give you one example. I covered many, many hearings over a 15-year period, oversight and investigation hearings. One was very unique, though, and it was a Dingell hearing. I got a call from the staff, and they said, "We are going to have this hearing, and we are going to put on this now-defunct software developer, and it's a pretty substantive issue."

I said, "Okay, I'll swing by. It sounds like it will be a short hearing. It's one panel."

So I got there. It's 10 o'clock in the morning. It involved an allegation that this contractor received a contract and used those funds to lobby Congress against arms control legislation. I was pretty curious. It goes to the heart of this potentially sinister relationship between contractors and the government.

So at 10 o'clock, I was the only big-city newspaper there; there was no TV. By 11:30, all of the trade press had left. I was the only person left at the press table. I was sort of interested; I was fascinated. What is going on here? This doesn't usually happen this way. At about 11:30, Dingell turned to, I think it was Bruce, and said, "This is going to be real pick-and-shovel work."

At 1:30, there was one contractor, one rep, and Dingell stopped, they glared at each other for about two minutes. This guy wasn't going to give Dingell an inch, because if he gave him an inch, he would capitulate. I stayed until 3:30.

Finally, I decided, well, I had better write a story. I thought, it's worth story, a medium-sized story. I went into a telephone booth and wrote it up on a pad and called in and dictated it.

About 5:30, I thought, it couldn't be going on any more. I walked by the hearing room. I could not believe what I saw. At 5:30, it is dark out. Dingell is up in his big leather chair with one aide. The executive from the contractor is in the witness chair with his one counsel. And there is a dictation person making a record, and they were still going at it, one on one. Nobody was going to give an inch, and that hearing kept going on until 7:30 at night, and it was fascinating.

So it is not just about the style over substance. It is substance.

BRUCE CHAFIN: I want to respond to that.

Mr. Wheeler, you define the problem and become part of the problem at the same time, because we did those spare parts investigations with Ernie and Colin and Tom Amly and the whole group. The point we were trying to make is, you try to talk about a $10 million airplane and everybody glazes over because they couldn't understand the pricing.

But here, let me show you a component of that airplane. Let me show you how it is priced, and then you can understand; it is all priced that way. The same kind of overhead is built into this airplane; this airplane is grossly overpriced.

We then went to the next step. Ernie was a proponent of "should cost," I'm sure you will remember. But we made the Air Force do a "should cost" which, rather than what was the actual cost, the historical cost, was what should it cost to build these parts? We made the Air force do a "should cost" analysis of the C5-B.

Somebody sitting next to me was the head of the "should cost" team who is still at the Air Force. I haven't ruined his career yet.

The Air Force had a fixed-price contract to buy one C5-B. It had options for four more years to buy the other 49. So it bought the first one, exercised the first three options. We were at the last year. Does the Air Force exercise the final 21? I think the price was somewhere around $2.2 billion. We dug our heels in and said, "We are going to 'should cost' this before you exercise anything."

These guys, with Ernie, went out and did an analysis that showed the overpricing of that C5. We got the same 21 aircraft, the same delivery schedule, and we saved $243 million on the price of that option.

The Air Force was saying, "Well, the contractor has got us over a barrel. We have got this thing and there is nothing we can do."

We said, "Sure we can do it. We'll have a nice hearing." And we brought in the first panel, which is the storytellers, the auditors, the people who could show you how overpriced it is. We brought in the second panel, which is the Air Force, and you just rain fire on them and have them tell you, "Well, we agree, it's overpriced, but this is what we are stuck with."

Then you bring Lockheed in, and you just pound on them. You make life so miserable for the Air Force and Lockheed that after the hearing, you know what, Lockheed says, "We're going to give you a price break on this thing. We'll knock the $243 million."

We saved a quarter of a billion dollars on that one airplane for the taxpayers. But today, sitting here, we will remember the dog boarding. We will remember the $600 toilet seat. I'll bet you no one in this room remembered those hearings about the C5 and that quarter of a billion dollars.

Let me give you just the last part of that. Business Week wrote that up and was real proud of this: "There is a new aggressiveness on the part of the Air Force." They abolished my job. It was the last thing I ever did. Here is a picture of a general in the Air Force congratulating them on this effort. Then we said, "What other programs are you going to do this on?"

They said, "None. This was too embarrassing to them."

FRANK SILBEY: I want to address the press for a minute.

With the honorable inclusion of Ralph and Sheila, there are only about two dozen reporters in this city that, in terms of investigative journalism, are worthy of the name.

In my long experience, the vaunted Washington press corps has got a collective backbone like a chocolate éclair.

To try and get an editor of most of these journalistic organizations to assign a reporter and to follow a tough story, to work with people like us, to go through the stuff we have, to then have the courage to run with it is a thankless task. If Gannett ever did an investigative story, I think I would fall over in a faint.

There are a handful. There is Gary Cohen, who won the Pulitzer Prize over at the Baltimore Sun. He is the new Jack Anderson. There is Ed Pound. There are guys like Chuck Babcock, although the Washington Post seems to have lost much of its taste for investigative journalism. There are a handful of people over at the Wall Street Journal and the New York Times. But other than that and a couple of television operations, the overwhelming majority of journalists in this town, this vaunted Washington press corps, lives on handouts, has no courage or stomach for the confrontational type of work that is required in order to do justice to an oversight story of substance. It has the attention span of a five-year-old, and in the end, they will walk away from a major story rather than do it.

I think that is one of the saddest commentaries I can offer, because without the investigative press -- and these people, I am sure, can give you one more story to match every one of mine, and more -- without that investigative press, much of the work that you do is useless.

You also have these wonderful chairmen who say -- and one time I had a chairman actually tell me this -- "Get me on the front page, but don't do anything controversial."

I remember that I looked at him, and said, "Congressman, what kind of miracles do you want me to do next? Do you want me to square the circle, or measure how high is up?"

He said, "You understand what I mean. If you like your job, you'd better do it the way I tell you."

He has been mercifully translated to private life.

Nobody touches the spook agencies. Nobody has the courage -- Democrat, Republican, liberal, conservative -- to go look at what the Defense Intelligence Agency, National Security Agency, Central Intelligence Agency do with the $30 billion a year they get in the black budget. It's like a black hole.

The Intelligence Committees of the House and Senate are contradictions in terms. These people do absolutely nothing. I used to go and get spook material on my own. I don't have a security clearance. I just got stuff, lots of it.

Every once in a while I would run across something so explosive and that if released would help the Soviets so much at the time, that I would call these people and say, "Maybe you want to come down here and talk to me because I have something that may be of interest to you."

They would respond, "What is that?" I would mention something, and you would hear this figurative gulp. Later, we would have an office full of men who looked like IBM salesmen.

They would say, "Well, how did you get that?"

I would say, "Well, yes, I got it."

"Well, how?"

"It's none of your business."

Nobody ever wanted to do a hearing on this material. The spook agencies are totally unsupervised, running amok, invading everybody's privacy, and no one has done, does, or will do anything about it, journalistically or congressionally.

ERIC THORSON: Next time, why don't you tell us what you really think?

VIRGINIA THOMAS: We probably have about 15 minutes left. Does anybody else have a question?

FRED GEDRICH: My name is Fred Gedrich. I am a retiree of the federal government. I spent a long career in the Departments of Defense and State.

As we all know, the bureaucracy is pretty cunning and resilient. A lot of the really good stuff is hid behind unfinished work products, classified material, and ongoing investigation, those three categories. They do that purposely so they could always change their position if ever challenged.

How do Susan and the other members of the panel treat that information that comes out? Thank you.

SHEILA HERSHOW: You said the magic words. You are a retiree.

I started work in this town as an investigative reporter for a little newspaper called Federal Times. By the way, there is a lesson in that. If you start leaking stuff to people who are hungry, I guarantee you they are going to get promoted, and they are going to go on to bigger and better jobs, and they are going to carry your name with them like the jewels you sew in the hem of your garment as you flee from one job to another. The same sources that gave me information when I worked for a small weekly newspaper are the sources that continue to give me information at ABC News.

But the question is, how do you get that information out?

There is a wonderful thing that I learned at the Federal Times, and that was that GS-14s who are on the verge of retirement all become members of the KMA club, and they pick up telephones. These guys pick up telephones.

What works almost as well are the guys who are stupidly gotten rid of. There was an agency once that made the idiotic mistake in a reduction in force of getting rid of their contracting officer. Major error. Huge. This guy came out with every single expenditure of the chairman of the agency's office -- I mean, his $400 muffin stand and his $7,000 carpet and everything. You get stuff. People in the bureaucracy are not stupid, and they are not ignorant, and they know how to dial a telephone, and they know how to tell you about everything that you might want to know.

It's just a question of making it worth their while. You make it worth their while by never revealing who they are and by realizing that they are not necessarily part of the problem. They are very often part of the solution.

BRUCE CHAFIN: Fred, let me take a crack at it, because I have a great war story that is right in line with what you are talking about.

We got a call one day from an employee who identified himself as with Lockheed. He said he was working on such a super-secret program he couldn't even talk about it, but that the security was out of control on it. He said they were missing over 1,300 documents. Someone had taken the blueprints from inside the black area home to his trailer to show his girlfriend.

We were saying, "This couldn't possibly be true." We said, "Do you have anything to support this?" And the guy wrote us a letter, had some phony destruct documents put together and the like, and we looked at it. I remember the mail came in on Friday.

We called him Friday and said, "We'll meet you at the LAX Marriott Sunday at 1:00."

We hopped on an airplane, hooked up with this guy. We talked to him, learned what he had to say. We ended up going inside Lockheed. It was hysterical, because we didn't necessarily want to just go in and tell Lockheed what we were there for. So we were just reviewing all aspects of black programs. We were going through it with the finance people.

At 4:00, we decided to bring in the security people. "Do you ever have any problems?"

"Nope, nope, nope." Everything was fine.

Then we stopped to go get a cup of coffee and said, "What are we going to do here? We think we have this major problem. These security guys are saying we don't have it at all."

So we decided we were just going to show him what we have. That started at 5:00 o'clock that night. At 7:30 that night, the security guy was gone, and we had this big scandal. It turned out it was the Stealth fighter program. But imagine, here we have the Stealth fighter, and the blueprints of it are leaving Lockheed to go to a trailer.

We come back to D.C. We hold hearings, establish what has happened, and the Congress, in its infinite wisdom, passed a law and said they wanted the Pentagon to do a review of all black programs, see if there are similar security matters, and report to the Congress. Six months later or so, we get this report back: Everything is fine. We said, what are the chances that what we found was the only problem out there?

So we called the people who worked on the report, had them come up -- no baby-sitters, no congressional liaisons. Get them out of the way; let these people come in and be able to talk to you without having the eyes and ears sitting there watching. The person said, "I don't even recognize that report that [Caspar] Weinberger sent up here. What we found was worse than what he found."

Great. We go back. We want this guy's draft, not what Weinberger sent up. We want the draft.

"Sorry, you can't have it."

Dingell issues a subpoena. Okay, so we've now subpoenaed the Secretary of Defense. We are the Energy and Commerce Committee, and remember, our jurisdiction is accounting issues.

We had had an issue with Weinberger before. He wouldn't appear before the subcommittee. He would appear before the committee, but not the subcommittee. We bring him before the committee. We've got 45 members, and it is sort of like when Alan Greenspan comes up. Everybody gets five minutes of questions. That doesn't work. I need hours with witnesses. So we wanted him in a contained environment, and we knew he didn't want to come to the subcommittee.

He sent the draft to Les Aspin, who was then chairman of the Armed Services Committee, may he rest in peace, and was a real rival of ours. Things got so bad in those days, Aspin would hold hearings the afternoon before our morning hearings and say to the witnesses, "Look, we haven't looked into this program, but you are going before Dingell tomorrow; you might as well tell us this afternoon what you are going to tell them tomorrow. It is a much friendlier environment."

I mean, things were that bad. Again, we are not talking across party lines. We are talking about two Democratic chairmen.

He sends the report to Aspin and then writes to the Speaker of the House, Jim Wright, and says, "Oh, my gosh, I'm really caught in a bind here. I've got this committee of jurisdiction, the Armed Services Committee, who I've given this report to, and a committee whose jurisdiction I don't really recognize that has subpoenaed me. What do I do?"

Of course, Speaker Wright, you can imagine the politics he is in. Either way he chooses, he loses, because he has two very powerful Democrat chairmen that are at odds. Weinberger is going to literally just let the time pass and then not go up for the subpoena, because as far as he is concerned, everything is on hold because he has given it to the Speaker to decide. We can vote him in contempt in the subcommittee. We can vote him in contempt in the full committee. We've got to get it to the House.

And I can tell you, like this IRS investigation, I don't think we would have had too many Republican votes in support of holding the Secretary of Defense in contempt. So to start with, you've got to win 95 percent of the Democratic votes.

A lot of them say, "Hey, this is payback time; this will shut Dingell down," because if we allow Weinberger to walk, you have in effect given everybody the way out of his kind of investigations.

Well, lo and behold, a reporter from the Fort Worth Star-Telegram somehow learns about this. He calls up Speaker Wright, his home district, and says, "My understanding is that you are involved in something that will effectively shut down John Dingell in his investigation of defense contractors; that unless you support him on this Weinberger subpoena, it's over. And who else is doing any kind of real oversight for the Pentagon? John Dingell."

Wright doesn't want to see that on the front page of his hometown newspaper. Wright calls up Les Aspin and says, "Get that report down to John Dingell." We got the report. Crisis solved.

That is the kind of real-life thing you run into, not on a daily basis, not on a monthly basis, but certainly on a quarterly basis. We were hanging out there one thread away from disaster if we couldn't figure out a way to pull this off.

FRANK SILBEY: Why not talk about, for a second, being in their shoes for a minute? It takes a lot of guts for a chairman to back up a staffer. I have hesitated to tell certain war stories, but there is one that needs to be told.

A number of years ago, I did an investigation into the Elk Hills Navy Oil Reserve for John Moss. That reserve had three billion barrels of oil, and Chevron wanted it badly. They controlled all the pipelines around the reserve. If they could force the production of the 1,000-plus wells, there was no storage at the reserve, and all the oil, which would come out in enormous quantities, would have to be put into pipelines. Therefore, it would fall by auction and default -- an accident of geography and antitrust domination -- into the hands of Chevron.

The people with jurisdiction had no interest in fighting them. The Navy controlled the reserves, and wanted to keep them for potential Navy emergency use. There was an attempt made to move it over to control of the Interior Department, which during the Teapot Dome scandal had been such a wonderful guardian of such resources, and we tried to stop them. As Bruce and Dingell did, we stepped out of our jurisdiction and just got into it.

I found that the Navy officers, at risk of their careers, bravely and honorably came to me in numbers, plus the head of the drilling program, a civilian, gave me as much information as I needed to bring it to Mr. Moss, to hold hearings, to leak it to the press -- and yes, we leaked like sieves. We handed it over to the reporters, and it just rolled nationwide. We even got cartoons from various national publications. The nation could see a huge company trying to make away with a major national resources.

Then something happened to me that may happen to one of you. A Congressman, who shall remain nameless, who is no longer in the House, came to Mr. Moss on the floor, and said, "You are a wonderful guy, and I love what you are doing and want to help you. Would you have your investigator brief me?"

Mr. Moss said, "Sure." And he said, "Go on and brief him."

I had possession of two things that were critical. I had some great documents in reserve, and several crucial sources. As soon as I went to this Congressman's office -- he was another Democrat; it was Democrat-to-Democrat, as was the case with Bruce -- I walked into the office, and found four men there with the Congressman. One man conveniently placed his back to the door so it would be impossible for me to leave.

The Congressman began to, in effect, cross-examine me. It was quickly clear that the object of this cross-examination was to get from me the names of my sources and those documents I was holding in reserve. I was just a staffer, with a family and a mortgage. It was an intimidating situation.

I was very lucky I worked for a chairman very similar to Dingell. They were very close friends. Moss was a tiger. I found myself getting very, very angry with this Congressman. Finally, I summoned up the courage to tell him in a not so nice way that there was no way in the world I was going to give him the names of those sources or those documents. He blustered, pounded the desk, and tried to intimidate me.

I said, "I don't think that Mr. Moss thought for an instant that you had this in mind. I'm leaving."

I got up, and a man who was one hell of a big guy stood up and blocked the door. And really terrified, I said, "Get out of my way or I'm going to break your jaw." Then I turned around and to this Congressman, and said, "Congressman, unless you are ready to kill me, you'd better make this man move, because if you don't kill me, when I leave this office, my first stop is going to be my chairman, and my second stop is going to be the Washington Post. My third one is going to be the New York Times. So you'd better make up your mind that you are going to have to dispose of my corpse effectively, which may be a first in Congress, or you let me the hell out of this room."

He had the man step aside. I went back to Moss. To his enormous credit, Mr. Moss got on the phone with this man, and he figuratively tore his head off. He then told me, "Go ahead and do anything else that you can do, and let's really make sure that the story gets out."

It is the courage of your chairman that must match your initiative and your own courage. I wish that there were more members like that. There are not, just a tiny, tiny handful.

You are engaged in the most thankless persuasion I can think of. If you have the courage to stand up and do your work right, to dig into the things that should be dug into, to take the chances that have to be taken, you are going to find that it's going to cost you enormously.

I am thinking of the price every single person at this table -- and they know what I am talking about -- has paid for their courage, integrity, and decency on behalf of the public. In the end, remember this: You are doing it not just for your party and not just for your chairman, but you are doing it for the public.

I always used to think of all those little people out there that pay their taxes, believe in the government, are faithful Americans, and send their children off to fight in her wars. They were victimized by some of the abuses I used to find, and that still proliferate.

That is the greatest tragedy of all when an oversight investigation does not get done, when a chairman does not back up his staff, when an editor does not back up a reporter or show some initiative to send them after a story. In the end, it is all these little people out there who have no clout. They don't know their Congressman; they can't get to their Senator. They are the ones who are being betrayed, and they are the ones you are truly obligated to.

JULIE DAMMANN: I am Julie Dammann with Senator [Christopher "Kit"] Bond.

What do you do when you're up against an agency that historically has, shall we say, a long stretch of ineptitude -- it's not the Defense Department, which people don't understand, but it is another major agency -- and the Cabinet Secretary who runs it is not interested in reforming it, but has an extraordinarily good press operation and personalizes every effort to try and get at the fraud, waste, and abuse? We are not trying to be political, but it may turn into a political fight.

What is your recommendation as to how one deals with that?

FRANK SILBEY: My motto is, he who tells the story first wins, and he who tells the story first picks the press. So they may have a great press operation, but they have someone else at "Prime Time," and someone else at the L.A. Times.

If I am the first to call Sheila and Ralph and get them on the story, it's their story. I've neutralized their press operation, and they are now playing on my home court. I would not allow some of the selective leaking that comes out to try to pre-empt hearings.

We used to do things we would call "curtain-raisers." We would develop so much for a hearing that we would trample on our own stories. So we would start giving it out early on to start a drumbeat that would build up before the hearing. The night before the hearing, have a curtain raiser.

I wouldn't be sitting there with my head down while the administration is pre-empting your story, choosing who is going to do the reporting. You can play that game, but it is a losing one.

JULIE DAMMANN: Let's just go a step further, then. You've gone to every network. Washington loves it; it goes to New York and comes back dead.

You go to the next one. Washington loves it; it goes to New York and comes back dead.

Go to the next one. Washington loves it; it goes to New York, comes back dead.

FRANK SILBEY: There is something that needs to be done with the story, then.

BRUCE CHAFIN: You are not working with a reporter?

JULIE DAMMANN: Without getting into any of the details, essentially we started out with one specific reporter who really liked it, and then we shopped it after that.

BRUCE CHAFIN: You are going to die shopping stories to people you don't know, because we get shopped -- all day long our phone is ringing with people trying to get their stories in the paper.

JULIE DAMMANN: That is why I say it is a practical question. There may be some people in the room who might have one reporter that they go to regularly, and if that reporter doesn't take it, then they are in a position to have to sort of shop it.

SHEILA HERSHOW: What are you shopping? The one thing that I found during my three months as a congressional investigator is that everybody got a hell of a lot more polite to me then than they did when I was calling as a reporter. I had enormous access, which is why I got such great press to my chairwoman, because I knew what reporters wanted.

And I'll tell you what they want. We want documents. We want examples. We want cases where we take a look at this and think, "This is so outrageous."

No, it doesn't work 100 percent of the time. Occasionally, you will get to an executive producer -- for example, the casino story -- who will pass on a terrific story.

But what you do is, you give them the package. What is it? For people like me, it's their video. Was there some kind of sting operation going on? Are there a series of documents that are so outlandish -- you know, here is this major company, and they charged the government for the guy's beach house, and here is the bill. They charged the government for maintaining the guy's private airplane, and here's the bill.

Specifics are what we can't turn down. Anything that you look at and you think, "My God, I would love to tell my best friend, my boyfriend, my husband, and my uncle about this. God, can you believe what these guys did?" That is what you peddle. You peddle something that absolutely can't be turned down.

When you say that Washington loved it but New York didn't, it is because Washington reporters who are not investigative love process, love feeling like they are on the inside. They love believing that they know something that the reporter at the other side of the press table doesn't know.

It's not what an investigator or reporter is interested in. We're interested in something that some guy in Nebraska who has never been to Washington is going to think is just great. He is not stupid. He is not uninterested. But it is something that he can relate to. And if you give that out, give it with a time limit. Don't let people take your story and say, "I'll get back to you," and then they disappear for five months and you have lost every chance of getting it done.

JULIE DAMMANN: That is why I say it is a practical question.

BRUCE CHAFIN: As a practical matter, there is something fundamentally wrong. You said you had one person you primarily deal with. I had a stable. You name a city, and I'll name you the paper and the reporter.

Let me tell you why. There are some stories that, you know, who cares about the district? That is not what this is about. This is not about trying to make your chairman or your members look great back home. Just do the public interest; the rest will follow.

I remember one day we had a thing on cytologists involved in pap smears. They were way over-reading; they were missing a lot of cancers and the like. I remember coming in -- we had a banner headline in the Philadelphia Inquirer and showed to the full committee staff director, and he says, "Bruce, just how many people in Philadelphia vote in Detroit?"

That is the full-committee, the legislative, re-election mentality. But guess what? When things would come up in Philadelphia, those people would be calling us to say, "Hey, what do you know about this?"

Ralph says he doesn't need me, and Ralph doesn't. But there is a symbiotic relationship that develops where we learn a lot, because a lot of reporters can get half the story, but they need somebody else to get the other half.

RALPH VARTABEDIAN: Bruce, that is the point I was trying to make.

BRUCE CHAFIN: You work them, and you work them, and you end up with this stable around the country. The person in New York may not care, but if it is a contractor and they are headquartered in Ottumwa, Iowa, guess what? The Des Moines Register is going to be interested. You get the story out.

JULIE DAMMANN: I think that we clearly have some people on our staff and in our operation who are fairly sophisticated and know how one needs to kind of move things. So we have a lot of contacts in the print media around the country.

On the television side, you don't have very many places to go. I mean, you're not going to go to the Ottumwa, Iowa, NBC affiliate. So on the TV side, do you repackage it? Do you give up? That's why I asked a practical question, because I think a lot of people here, if they have something good and they get turned down, what do they do? Forget about my specific example, but how do you take what you have found and get it on television? You have given us tips to put together a good package, but then what happens?

RALPH VARTABEDIAN: If you are talking about a package, I am a little troubled by the idea of a package. "Here, put this on the air, Sheila." No. No, it doesn't work.

The last story I did before I left Washington involved a staffer from Senator Grassley's office calling me who I worked with for 10 years. You know who it is. It's Charlie Murphy.

Charlie had this great information. He didn't have a package. He said, "Well, we are doing this investigation into the Defense Department Finance and Accounting Agency. We have all this information. Why don't you stop by, and we can talk about it?"

Well, in talking about it over the next two weeks, I was able to develop a pretty good story. It took a long time. I can't take a package and jam it in the paper. I don't like to do that.

Ultimately, that was a really wonderful investigation that he ran. It turned out that there had been a string of embezzlements at Defense Department bases across the country, and the controls were just absolutely not there.

SHEILA HERSHOW: I want to be clear about what I'm talking about when I say "package." We are not going to run your press release as a story, but we are going to use your information, and you give us ideas about how to do a story.

You have to understand that there is a difference in television news between a "World News Tonight" piece, which is a minute 30, versus 12 minutes on a major newsmagazine. We need a great deal more to keep people watching for 12 minutes. Basically, not everything cuts it. Not everything is going to work for us.

There are some things that you know are so damn good that you can't possibly turn them down. If you have something like that, then you start with the newsmagazine, but you don't do it for everything.

Or you listen to what you are hearing back, if somebody says to you, "What are the visuals? What kind of victims do you have? How are we going to show any of this on camera? This is in a secure area. This is some place we can't get into. What are we going to be showing people?" These are all very real questions I have to deal with. They are exactly the questions I am getting from my bosses.

Years ago, when I worked for CNN, I did a story about a poor guy who worked for the telephone company, of all things. He worked for the Yellow Pages and believed that his bosses were getting kickbacks and ripping off the consumers.

So the poor guy picked up the phone, and he called a number of federal agencies he felt had jurisdiction, and he explained that this was confidential information and that his job was on the line if his name ever got released. Sure enough, he ended up with some jerk at FCC who picked up the phone and called the general counsel of this poor whistle-blower's company.

And the general counsel of the company said, "Hey, we can't look into this anonymous allegation. You know, you tell us who the guy is and what the information is, and we will get back to you."

This bureaucrat -- who, by the way, in perfect bureaucratic fashion, documented this stuff by writing it down in memos -- this guy says, "Well, you know who it is? It is Skip Larsen, and he works in your operation in Killeen, Texas."

Well, Mr. Larsen's name -- and this is an important lesson for all of us -- Mr. Larsen's life went downhill so badly that, six months after making that phone call to the FCC, the guy checked into a hotel room in Austin, Texas, set up a camera, and videotaped a suicide message explaining that he was dying to get a story told. He explained exactly what he had been alleging, exactly what he tried to do about it, and what had happened to him after he trusted the FCC.

You hold people's lives in your hands when you promise them confidentiality. There isn't a newsmagazine in the world that would turn down that videotape, provided, of course, there was some fact behind it; provided, of course, the guy wasn't loony tunes; provided, of course, you spent months and months doing the research to make certain that what this guy is talking about actually has some validity.

So not every story is going to make it onto "20/20" or "60 Minutes" or anything else. It's not that we are lazy. It is that we want to know that if we put in this kind of energy, at the end of the road there is something that we hope to get back from it. That is what you guys can do for us by showing us these golden documents, by showing us these incidents that are so outlandish that we know people are going to pay attention to them.

CLOSING COMMENTS

VIRGINIA THOMAS: We are out of time, unfortunately. I could listen forever to these people. I am inspired and moved by them and by what you guys all do every day. We are here to help. We are here to introduce you to people who can help you do your job even better. We are here to encourage you. We are here to judge your performance, and we will be back in a year.

Our paper will be available on www.heritage.org or sent to your offices sometime next spring. Thank you for your time, and please join me in thanking the speakers and yourself for your performance.

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