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• JUNE 17, 2009

The White House Fires a Watchdog

The curious case of the inspector general and a Presidential ally.

President Obama swept to office on the promise of a new kind of politics, but then how do you explain last week's dismissal of federal Inspector General Gerald Walpin for the crime of trying to protect taxpayer dollars? This is a case that smells of political favoritism and Chicago rules.

A George W. Bush appointee, Mr. Walpin has since 2007 been the inspector general for the Corporation for National and Community Service, the federal agency that oversees such subsidized volunteer programs as AmeriCorps. In April 2008 the Corporation asked Mr. Walpin to investigate reports of irregularities at St. HOPE, a California nonprofit run by former NBA star and Obama supporter Kevin Johnson. St. HOPE had received an $850,000 AmeriCorps grant, which was supposed to go for three purposes: tutoring for Sacramento-area students; the redevelopment of several buildings; and theater and art programs.

Associated Press

Gerald Walpin, Inspector General of the Corporation For National and Community Service, was fired by President Barack Obama.

Mr. Walpin's investigators discovered that the money had been used instead to pad staff salaries, meddle politically in a school-board election, and have AmeriCorps members perform personal services for Mr. Johnson, including washing his car.

At the end of May, Mr. Walpin's office recommended that Mr. Johnson, an assistant and St. HOPE itself be "suspended" from receiving federal funds. The Corporation's official charged with suspensions agreed, and in September the suspension letters went out. Mr. Walpin's office also sent a civil and/or criminal referral to the U.S. Attorney for the Eastern District of California.

So far, so normal. But that all changed last fall, when Mr. Johnson was elected mayor of Sacramento. News of the suspension had become public, and President Obama began to discuss his federal stimulus spending. A city-hired attorney pronounced in March that Sacramento might be barred from receiving stimulus funds because of Mr. Johnson's suspension.

The news caused a public uproar. The U.S. Attorney's office, which since January has been headed by Lawrence Brown -- a career prosecutor who took over when the Bush-appointed Attorney left -- had already decided not to pursue criminal charges. Media and political pressure then mounted for the office to settle the issue and lift Mr. Johnson's suspension. Mr. Walpin agreed Mr. Johnson should pay back money but objected to lifting the suspension. He noted that Mr. Johnson has never officially responded to the Corporation's findings and that the entire point of suspension is to keep federal funds from individuals shown to have misused them.

Mr. Brown's office responded by cutting off contact with Mr. Walpin's office and began working directly with the Corporation, the board of which is now chaired by one of Mr. Obama's top campaign fundraisers, Alan Solomont. A few days later, Mr. Brown's office produced a settlement draft that significantly watered down any financial repayment and cleared Mr. Johnson. Mr. Walpin told us that in all his time working with U.S. Attorneys on cases he'd referred, he'd never been cut out in such fashion.

Mr. Walpin brought his concerns to the Corporation's board, but some board members were angry over a separate Walpin investigation into the wrongful disbursement of $80 million to the City University of New York. Concerned about the St. HOPE mess, Mr. Walpin wrote a 29-page report, signed by two other senior members of his office, and submitted it in April to Congress. Last Wednesday, he got a phone call from a White House lawyer telling him to resign within an hour or be fired.

We've long disliked the position of inspectors general, on grounds that they are creatures of Congress designed to torment the executive. Yet this case appears to be one in which an IG was fired because he criticized a favorite Congressional and executive project (AmeriCorps), and refused to bend to political pressure to let the Sacramento mayor have his stimulus dollars.

There's also the question of how Mr. Walpin was terminated. He says the phone call came from Norman Eisen, the Special Counsel to the President for Ethics and Government Reform, who said the President felt it was time for Mr. Walpin to "move on," and that it was "pure coincidence" he was asked to leave during the St. HOPE controversy. Yet the Administration has already had to walk back that claim.

That's because last year Congress passed the Inspectors General Reform Act, which requires the President to give Congress 30 days notice, plus a reason, before firing an inspector general. A co-sponsor of that bill was none other than Senator Obama. Having failed to pressure Mr. Walpin into resigning (which in itself might violate the law), the Administration was forced to say he'd be terminated in 30 days, and to tell Congress its reasons.

White House Counsel Gregory Craig cited a complaint that had been lodged against Mr. Walpin by Mr. Brown, the U.S. Attorney, accusing Mr. Walpin of misconduct, and of not really having the goods on Mr. Johnson. But this is curious given that Mr. Brown himself settled with St. HOPE, Mr. Johnson and his assistant, an agreement that required St. HOPE (with a financial assist from Mr. Johnson) to repay approximately half of the grant, and also required Mr. Johnson to take an online course about bookkeeping.

Iowa Republican Chuck Grassley, a co-sponsor of the IG Reform Act, is now demanding that the Corporation hand over its communications on this mess. He also wants to see any contact with the office of First Lady Michelle Obama, who has taken a particular interest in AmeriCorps, and whose former chief of staff, Jackie Norris, recently arrived at the Corporation as a "senior adviser."

If this seems like small beer, keep in mind that Mr. Obama promised to carefully watch how every stimulus dollar is spent. In this case, the evidence suggests that his White House fired a public official who refused to roll over to protect a Presidential crony.

Senior Democrat Says Obama's Czars Unconstitutional

I have often wondered why the USA would want to use Czar (Russian for king/emperor) as a name of the head of anything. I thought the USA was against the use of kings. Wasn't this why George Washington served only 2 terms to avoid a king mentality in the new republic? It may have sounded cute at one time but is governing supposed to be cute? The article below sheds some light on the matter. -ed.

Senior Democrat Says Obama's Czars Unconstitutional
Ken Klukowski
Monday, June 15, 2009

Last week President Obama appointed yet another “czar” with massive government power, answering only to him. Even before this latest appointment, the top-ranking Democrat in the Senate wrote President Obama a letter saying that these czars are unconstitutional. President Obama’s “czar strategy” is an unprecedented power grab centralizing authority in the White House, outside congressional oversight and in violation of the Constitution.

As of last week, Czar Kenneth Feinberg has the authority to set the pay scale for executives at any company receiving government money (and how many aren’t, these days?). Czar Feinberg has the power to say that someone’s pay is excessive, and to make companies cut that pay until the czar is pleased.


Congress did not give Czar Feinberg this authority. For that matter, Congress has not authorized any of the czars that President Barack Obama has created. Over the past thirty years presidents have each had one or two czars for various issues, and once the number went as high as five. But now, by some counts President Obama has created sixteen czars, and there may be more on the way. Each of these has enormous government power, and answers only to the president.

Ever since this practice of appointing czars began years ago, it has always been considered possible that they are all unconstitutional. But it never built to a critical mass to elicit a court fight. These czars were few and far between, and rarely did anything that seriously ruffled any feathers. But President Obama has taken this to an unprecedented level, to the point where these appointments are dangerous to our constitutional regime.

This has become too much for the longest-serving senator in U.S. history to stomach. Democratic Senator Robert Byrd is the president pro tempore of the U.S. Senate. Even though Senate rules vest most powers in the Senate majority leader, the president pro tempore is a constitutional officer, and third in line to the U.S. presidency (after the vice president and the Speaker of the House). This office is held by a Democrat, who has been serving in the Senate since before Barack Obama was even born.

Senator Byrd wrote a letter to President Obama in February, criticizing the president’s strategy of creating czars to manage important areas of national policy. Senator Byrd said that these appointments violate both the constitutional system of checks and balances and the constitutional separation of powers, and is a clear attempt to evade congressional oversight. (Didn’t this White House promise unprecedented transparency?)

And Senator Byrd is exactly correct. The Constitution commands that government officers with significant authority (called “principal officers”) are nominated by the president but then are subject to a confirmation vote by the U.S. Senate. And principal officers include not only cabinet-level department heads, but go five levels deep in executive appointments, to include assistant secretaries and deputy undersecretaries.

Inferior officers are appointed either by the president, cabinet-level officers, or the courts. But even then, the Constitution specifies that only Congress can authorize the making of such appointments. For these inferior officers, only Congress can create their offices, and also specify who appoints them. And such officers are still answerable to Congress. They are subject to subpoena to testify before Congress, and Congress holds the power of the purse by making annual appropriations for their division or program.

White House officials, by contrast, cannot be compelled to appear before Congress and testify. They are alter-egos of the president himself, and as an agent of the Executive Office of the President they are entirely removed from Congress, and not answerable to Congress in any way. That was why during the Bush administration White House Chief of Staff Josh Bolten, Senior Advisor Karl Rove, and Counsel Harriet Miers could not be compelled to testify to Congress when President Bush invoked executive privilege (a battle they may well have won if they pressed their case all the way to the Supreme Court). Senior presidential aides advise the president alone, and the separation of powers forbids congressional interference in that relationship.

But that’s the problem with these czars. The president can have any advisors he wants, people who privately advise him or meet with others on his behalf, but have little or no actual authority to exert government power on anyone. These czars, however, are directly dictating policy, impacting millions of lives in the way that few assistant secretaries or deputy undersecretaries do.

The Founding Fathers specifically wrote the Constitution in a way to deny such absolute power to emanate from one person. That was why they required that no principal officers could exercise any power unless the U.S. Senate decided to confirm them. That was also why they specified that even for inferior officers only Congress could create their positions and could still require them to answer to Congress. The Founding Fathers were specifically blocking the type of centralized power that President Obama is currently exerting.

Fortunately, there is a remedy. Any person on the receiving end of an order from any of these czars has standing to challenge their constitutionality in court. Any person whose pay is deemed excessive by Kenneth Feinberg, or affected by any other czar, could file a federal suit asserting that the order is an unconstitutional exercise of government power, and

Obama’s disappearing stimulus

May 29th, 2009

Obama’s disappearing stimulus

By: Christopher Swann

http://blogs.reuters.com/great-debate/2009/05/29/obamas-disappearing-stimulus/

It’s not just California that threatens to sabotage the Obama stimulus. State and local governments across the nation are gradually unravelling federal efforts to revive growth.

The states have been inveterate stimulus eaters in the past. For most of the 1930s the expansionary policies of the federal government were just sufficient to offset the shrinking of state and local governments. Click here for PDF.

States also raised taxes in the recession of the early 1990s and in 2001. It was a problem that Obama — his team stocked up with renowned scholars of the Great Depression — was determined to avoid.

Sadly, the financial woes of the states and cities — many of them self inflicted — are overwhelming these good intentions. The maths now looks distinctly unpromising.

The Obama administration has pledged around $140 billion in fiscal assistance to the states with the express goal of saving them from tax increases, layoffs and painful cuts in services. But as state tax revenues have tanked, they now appear to be heading for a $370 billion shortfall over the next few years. Federal largesse will cover just 40 percent of the gap.

Nor is the roughly $200 billion fiscal drag from the states Obama’s only problem. America’s towns present a fiscal headwind as well, with an expected funding gap of nearly $100 billion, according to the National League of Cities. Taken together these could cancel out up to 40 percent of the federal stimulus.

Balanced budget rules put the states in the same position as crisis-ridden emerging markets — a pro-cyclical fiscal policy is their only option. Yet they do have the ability to minimize the damage to consumption.

It is an opportunity many states do not appear to be taking. Indeed some are going about their economizing in ways that would make a good Keynesian blanch. The lesser of evils in the current circumstances would be to focus revenue-raising on those unlikely to cut back spending — the rich.

Instead, all too many of the measures so far have been regressive, putting most of the burden on people who have little option but to tighten their belts. Earlier this month Massachusetts lawmakers voted to increase sales tax by 25 percent with a view to raising $900 million a year. Six other states are considering following suit.

So far 36 states have cut spending — mostly on education, health and programs for the poor. Arizona is cutting cash grants to 38,500 low-income families, while Rhode Island is slashing funds for affordable housing.

Again, these are exactly the kind of payments a Keynesian would normally recommend increasing in a recession — since low-income groups have a low savings rate and hence a high multiplier. At least 39 states have made cuts in state workforce.

More radical still, some towns are simply shutting-up shop and “disincorporating,” according to the Wall Street Journal.

Rio Vista and Vallejo could soon be the first Californian towns to do so since 1972.

There are plenty of improvements that could be made to state finances. Lawmakers could economize on expensive mandatory criminal sentencing rules and trim generous pensions. Ditching the supermajority requirement for tax increases would allow them to build up larger rainy day funds in the future. But none of this would help now.

The hard fiscal logic offers few ways out. Going back to Congress for more money is not politically viable. Aid to the states was a hard-sell last time and had to be watered down.

Damage limitation is now the only option. At the very least states should seek to balance their budgets in such a way that minimizes the drain on personal consumption.

This may mean following the lead of Delaware, where the governor has proposed increasing the top income tax rate by a percentage point to 6.95 percent. Minnesota lawmakers are also attracted to this idea.

Extracting more from the wealthy won’t fully plug the gap. But as the centrepiece of state revenue-raising, it may be the least economically harmful choice

Obama breaks his own rule

Obama planned to take away Veterans Insurance

Reimbursement plan dropped by Obama

VA&R

Tuesday, March 24, 2009--The American Legion newsletter
Original article: http://www.legion.org/dispatch/2602/reimbursement-plan-dropped-obama

National Commander David K. Rehbein applauded President Barack Obama for dropping a plan to bill private insurance companies for the treatment of military veterans who have suffered service-connected disabilities and injuries.

"We are glad that President Obama listened to the strong objections raised by The American Legion and veterans everywhere about this unfair plan," Rehbein said. "We thank the administration for its proposed increase in the VA budget, and we are always available to assist by providing guidance to ensure a veterans health-care system that is worthy of the heroes that use it."

During a March 16 meeting at the White House with Rehbein, the president revealed a plan to require private insurance carriers to reimburse the Department of Veterans Affairs for care provided for veterans suffering from service-connected disabilities and injuries. Rehbein quickly objected to the plan and began a grass-roots campaign to rally support against the measure.

Obama's plan prompted outrage from dozens of servicemembers, veterans and non-veterans who e-mailed Rehbein and National Headquarters. An op-ed by Rehbein that criticized the plan also appeared in the March 18 Wall Street Journal.

Following a meeting on March 18 with The American Legion and other veterans service organizations, the White House announced that it will no longer consider billing insurance companies or veterans for treatment of their service-connected disabilities.

In a written statement, White House press secretary Robert Gibbs said, "In considering the third-party billing issue, the administration was seeking to maximize the resources available for veterans. However, the president listened to concerns raised by the [veteran service organizations] that this might, under certain circumstances, affect veterans' and their families' ability to access health care."

"Although we disagreed with the proposal, additional revenue streams are needed by VA," Rehbein said. "I strongly encourage Congress and the administration to allow VA to begin billing Medicare for the treatment of veterans who qualify for the program. They paid into Medicare for their entire working careers, and should be able to use it in the medical system that was built specifically for them."

Below are excerpts from comments received by American Legion National Commander David K. Rehbein and National Headquarters, following President Barack Obama's decision to drop his plan to bill private insurance companies for the treatment of veterans with service-connected disabilities and injuries.

I was motivated to join The American Legion today because of the way the commander stood toe-to-toe with President Obama about health care for wounded vets. I am glad the Legion seems to be well led and is such a strong advocate. I, myself, wasn't wounded or sickened due to my service (thank God), but I stand with our brothers and sisters who have made this sacrifice.
Thank you for honoring our wounded.
Mike O'Leary

When I saw the story about the president wishing to bill private insurance for veterans' service-related care, I was appalled and immediately wrote my congressmen. I haven't written letters to Washington much before, but this awful idea really needed rebutting.
I want to congratulate you for getting the word out and (we hope) quashing this immoral and outrageous proposal so quickly. Thank you for your courage in standing up for the right thing here.
Sarah Unfried

Thank you for standing up to the president regarding charging private insurance companies for veterans medical care. I'm a Marine Corps veteran with no medical problems, but I work with many Marine veterans (combat veterans) who need medical care. Thank you, again.
Denne Howard

Thank you for responding the way you did to the ... presidential intent to make veterans pay for their medical services. Our veterans are in good hands as long as you are speaking for them, their families, and the benefits they so very much deserve. Thank you.
Ann-Marie Kimble

David, a big thank you and well done for objections raised on our behalf. We (100-percent service-connected veterans) need all the help we can get. Iowa is well served, as is the nation. Thanks, again.
Rod Skinner

The American Legion Dispatch