'Purge' of Inspectors General Raises Concerns About Political Interference

WASHINGTON -- The government's top watchdogs are quickly becoming all bark and no bite, say critics who call the recent "purge" of inspectors general a warning about limited transparency in the Obama administration.

"The mounting evidence that there might be political interference with the IGs is disturbing," said Pete Sepp, vice president for policy and communications at the National Taxpayers Union. "The IGs are being emasculated."

"When inspectors general across the administration have roadblocks placed in their way, American taxpayers should worry. A threat to one's independence is a threat to them all," said Rep. Jeb Hensarling, R-Texas.

Inspectors general serve as the primary investigator and auditor at federal agencies. They have statutory powers to investigate internal fraud, waste, abuse and mismanagement as well as conduct oversight of the recipients of funds and contractors who work with the individual agencies.

Fewer than half of the 69 inspectors general are hired and fired by the president of the United States. The rest are appointed by agency officials.

A handful of inspectors general are looking for work this summer after being dismissed following the issuance of critical reports about the agencies they monitor.

Among the recent firings are: 

--Gerald Walpin, who was fired in June as IG for the Corporation for National and Community Service, which runs the Americorps program. He was one of 30 IGs appointed by former President George W. Bush. Walpin was responsible for a major investigation into the misuse of federal grant funds by St. HOPE Academy, a non-profit founded and run by former NBA star and Sacramento Mayor Kevin Johnson, a supporter of President Obama. Critics say Walpin's firing was politically motivated, while the White House has issued documents suggesting he was unfit for the position.

-- Fred Weiderhold Jr., who announced his retirement in June as inspector general at Amtrak, about the same time he handed Congress a 94-page report claiming that Amtrak lawyers had frequently tried to stymie his investigations by redacting and withholding documents and preventing interviews with Amtrak employees. Amtrak officials say Weiderhold's retirement arrangements came before, not after his damning report. Nonetheless, the top Democratic and Republican members of the House Oversight and Government Reform Committee are investigating.

--Judith Gwynne, who was acting IG at the International Trade Commission, and was fired this month, coincidentally after Sen. Charles Grassley, R-Iowa, known as the patron saint of IGs, wrote her boss, ITC Chairwoman Shara Aranoff, a Bush appointee, about potential agency obstruction in Gwynne's investigation into contractor activities. Gwynne had accused commission officials of forcibly removing from her hands procurement files essential to her investigation. An ITC spokeswoman told FOXNews.com that the commission has responded formally to Grassley, but will not comment further on Gwynne, a career employee who was appointed by agency officials in 2008.

Meanwhile, Neil M. Barofsky, the inspector general in charge of overseeing the $700 billion Troubled Asset Relief Program recently expressed concern when Treasury Department officials informed him the department had legal authority over his office. Barofsky said such an arrangement could threaten his independence and ability to access documents relating to the bailout of the financial sector. The matter is currently being sorted out by the Justice Department's Office of Legal Counsel.

According to news reports in mid-June, the Treasury's assertion of its authority over Barofsky's office came just as he was opening an investigation into the Treasury's decision to approve bonuses for executives at the insurance giant AIG, which received billions in bailout money from the TARP fund.

Observers say it is quite typical for the party in power to "circle the wagons" and attempt to consolidate power and firm up its authority once in the driver's seat.

And Jake Wiens, an investigator for the Project on Government Oversight, a non-profit watchdog group in Washington, D.C., warned against seeing "patterns" in the dismissals. Taken individually, each IG's firing is a distinct case that could be "extremely problematic."

For example, Weins said, the Walpin case is mired in a number of "complicating issues," like documented complaints against Walpin from within the agency and a pending ethics complaint against him by the U.S. Attorney's Office in California.

Walpin is also the only IG in question to be fired by the White House. In the case of Weiderhold, the Amtrak IG answers to the Amtrak board of directors, currently chaired by Sen. Thomas Carper, D-Del.

But critics say without greater protections, the government's internal auditors won't have the independence to do their work.

The "IG office was always sacrosanct," Bradley Smith, who served as a Republican chairman of the Federal Election Commission during the Bush administration.

Smith said the Obama administration may not be setting the right tone, especially after pledging during his campaign to reform government and make it more transparent.

"I think it looks bad," Smith said.

Conservative bloggers also call "IG Gate" the sleeper story of the summer.

"The story may stay below the (mainstream media)'s radar for a few weeks," suggested blogger Robert Stacy McCain, in a posting at HotAir.com on June 28. "But if you've spent years watching how scandal stories unfold in Washington, IG-Gate looks like one that will keep making headlines for months."

Back in 2006, majority Republicans were criticized for seeking to shut down the Office of the Special Inspector General for Iraq Reconstruction in the midst of the war. The effort, which was eventually halted by Democrats, came as IG Stuart Bowen issued a report claiming the U.S. military had failed to track hundreds of thousands of weapons intended for Iraqi security forces.

Danielle Brian, the executive director for the Project on Government Oversight, said Congress is as much to blame as the administration for the existing problems, which stem from the need to strengthen the role of the IG.

Brian said Congress missed an opportunity to bolster the IGs when it debated the 2008 IG Reform Act. Provisions that would have allowed only the president to remove IGs for good cause "lay on the cutting room floor" and didn't make it into the final bill passed last September, she said.