Make Federal Spending Transparent

Roger Bate | 09 Sep 2006
Washington Post

What do Friends of the Earth, the Family Research Council, Phyllis Schlafly and the National Gay and Lesbian Task Force have in common? If you think not much, then you are partially wrong: They all love the new Federal Funding Accountability and Transparency Act. Introduced by senators Tom Coburn (R-Okla.) and Barack Obama (D-Ill.), the bill requires the Office of Management and Budget to establish and maintain a single public website listing the names and locations of all individuals and groups receiving federal funds, including the amount of federal funds received annually by program.

The idea of a transparency website -- replete with search engines that include subcontractors -- was born in May 2005 at a hearing on U.S. efforts to combat malaria. Officials from the U.S. Agency for International Development (USAID) squirmed as Coburn revealed that 93% of the agency's 2004 funding to eradicate malaria had been spent on administrative and advice-giving services. In addition, not enough of these funds were spent overseas; too much was absorbed by high-paid U.S. consultants.

Coburn, a doctor with a long record of monitoring international health spending, is fed up that U.S. tax dollars are being wasted. And so are a myriad of other individuals -- even those with normally diametrically opposed agendas. "Sunshine's the best thing we've got to control waste, fraud and abuse," Coburn says. "It's also the best thing we've got to control stupidity. It'll be a force for the government we need." Whether your pet concern is Halliburton in Iraq or the Academy for Educational Development's (AED) work in Africa, transparency will lead to more accountability.

In the case of USAID's efforts to fight malaria in Africa, the oversight returned quick results: "Once the agency figured out how they actually spent money, they couldn't justify the status quo and we saw dramatic reform," according to Coburn. "Now, lives are being saved in Africa because of USAID's malaria program. The hearing was a case study in how forcing transparency in government really can work miracles and save lives."

Congress's effort to break the bureaucratic triple threat -- too little competition, too little transparency, too few metrics to measure performance -- is long overdue. A recent Government Accountability Office (GAO) report on Hurricane Katrina spending showed between $600 million and $1.4 billion in improper and potentially fraudulent individual assistance payments. And that is just in our own country.

Audits of foreign spending are few and far between, and infrequent reports from the GAO often raise concerns of workforce planning limitations (i.e., workforces not being competent enough to integrate with the people on the ground to use taxpayer dollars effectively) as well as the need to improve oversight of organizational activities. Such limitations suggest that the problem of aid mismanagement pervades American action around the globe.

Aid-giving is a tough, gut-wrenching business, and the demands to spend for the sake of spending are constant. Without accountability, aid-giving bureaucrats often buckle under pressure to open the spigots, success be damned. Theoretically, private and for-profit contractors are meant to bring market-style efficiency, attention to the bottom line and new technologies to lower chances of fraud. Instead, bureaucrats and the private sector are bedfellows that oppose transparency. One reason for this comfortable relationship is that so many bureaucrats (from government agencies and Capitol Hill) move on to high-paying jobs with contractors because they know how to "win" contracts from their former bosses.

It is therefore no surprise that few of the largest government contractors support the Coburn bill. The long list of bipartisan nongovernmental organizations (NGOs) backing Coburn does not include any of the largest contractors, such as the AED, Chemonics International, Population Services International, Halliburton, Lincoln Group, Booz Allen Hamilton, Sprint, BearingPoint, Anteon, General Dynamics, Lockheed Martin, Raytheon, and SRA International.

Proponents of the bill suspect that companies accustomed to feeding at the government trough will band together to deep-six the Coburn initiative. Barring outright opposition to the bill's passage, the best hope for contractors is to promote a weak substitute. Remarkably, Representative Tom Davis (R-Va.), whose district includes such contractors among his most affluent constituents, has given them just the vehicle. Davis introduced a House version of the Coburn Bill, minus the transparency requirement for contractors, leaving only grant-recipient NGOs like Doctors Without Borders in the crosshairs. Representative Davis told the New York Times that "contracts are awarded in a much more competitive environment" and grants "are more susceptible to abuse."

The problem is that abuse -- whether by contract or grant -- is integral to the current system of aid. The time has come to shine light on the revolving door between government and contractors; to shine light on the corruption and inefficiency; to shine light on how taxpayer money is being spent. A little transparency will go a long way in benefiting Americans and the beneficiaries of their generosity overseas.

Roger Bate is a resident fellow at the American Enterprise Institute for Public Policy Research and a director of a health advocacy group, Africa Fighting Malaria (which supports the Coburn bill). In May 2005, he testified at a hearing on USAID's malaria program, which was chaired by Senator Coburn.