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From: Catherine Austin Fitts [mailto:[EMAIL PROTECTED]]
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Subject: FW: Article on IG's; Mentions HUD OIG




-----Original Message-----
From: Catherine Austin Fitts [mailto:[EMAIL PROTECTED]]
Sent: Friday, June 15, 2001 6:38 PM
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Subject: Article on IG's; Mentions HUD OIG




                     The Atlanta Journal and Constitution

                      June  13, 2001 Wednesday, Home Edition

 Who shall inspect the  inspectors general?
 Congress weighs acts of federal watchdogs

 BY JULIA MALONE
 Cox Washington Bureau

    Washington --- More than two decades after Congress set up a network of
 investigators to attack waste and corruption inside the federal
 government, new
 questions have arisen about who is watching the federal watchdogs.

    Nearly 60  inspectors general  now work in federal departments and
 agencies.

    They track down abuses, from food stamp cheating to fraud involving
 billion-dollar weapons contracts.

    But in some cases,  inspector general  officials have been caught doing
 what
 they are supposed to prevent.

    The Defense Department's  inspector general's  office is now under
 investigation for allegedly re-creating financial records for an audit
 shortly
 before the documents were reviewed by an outside auditor last year.

    As described by an internal Pentagon report, the apparent fabrication
 required a dozen staffers to work long hours, including overtime, at a
 personnel
 cost of $63,000.

    The alleged deception might never have been detected except for an
 anonymous
 whistle-blower who notified officials, including a longtime critic of
 government
 waste, Sen. Charles Grassley (R-Iowa).

    "It's a very sad day indeed when the watchdog gets caught cheating,"
 Grassley
 wrote late last month to Defense Secretary Donald Rumsfeld. "If the IG
 ( inspector general)  can't be trusted, then we are in trouble. Who can we
 trust?"

    The Pentagon case has hit the watchdogs especially hard.

    "You have the IG office that's supposed to be an office of high
 integrity,"
 said Gaston Gianni Jr., vice chairman of the President's Council on
 Integrity
 and Efficiency, which loosely oversees their diverse IG operations and is
 investigating the Defense Department case.

    "This certainly casts a negative light on the concept, and it hurts all
 of
 us," said Gianni, who also serves as  inspector general  for the Federal
 Deposit
 Insurance Corp.

    The Pentagon case is the latest sign of problems inside the network of
 federal overseers. Among other examples:

    Former Commerce Department  inspector general  Francis DeGeorge pleaded
 guilty last year to a misdemeanor after admitting he negotiated for a job
 with a
 company that was a contractor with the agency's National Weather Service.
 Such
 conflict-of-interest violations are among the most common issues
 investigated by
 IGs.

    At the Treasury Department,  inspector general  Valerie Lau stepped
 down in
 1998 after a report by the General Accounting Office, the investigative
 arm of
 Congress, concluded that she had awarded a $90,000 consulting contract to
 a
 longtime associate without putting the work up for bids. That same
 contractor
 had earlier recommended her to the Clinton White House for the IG job.

    And the IG's office at the  Department of Housing and Urban Development
 has
 become ensnared in controversies that have affected its oversight of  HUD,
 which has been ranked among the most wasteful agencies in government for
 the
 better part of two decades.

    The General Accounting Office, which serves as the investigating arm of
 Congress, is expected to release findings next week on whether the IG
 police
 force conflicts with the central mission of the IG. The investigation was
 requested by Rep. Barney Frank (D-Mass.)

    Some lawmakers have called for a more systematic way to review all IG
 offices.

    Sen. Susan Collins (R-Maine) has drafted legislation for independent
 reviews
 of each IG every three years, but the legislation has failed to win
 passage. She
 said she would reintroduce her bill this year.

 LOAD-DATE: June 13, 2001








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