Is anybody really surprised that $1.4 billion in hurricane relief was steeped in fraud?
It's been widely reported that FEMA and other relief agencies dumped boatloads of phony assistance on the victims of Katrina and Rita, covering ludicrous expenses ranging from Hawaiian vacations to football season tickets (for whom? The San Antonio Saints?) to a divorce lawyer.
The Government Accountability Office (GAO) went on a sting operation to reveal the incompetence, credulousness, and outright fraud that characterized much of the disaster recovery effort. By the GAO's count, fully 16 percent of the expenditures were "unwarranted."
But I ask again: is any of this truly astonishing? Huge amounts of waste -- and even bogus payments -- seemed almost inevitable from the moment that FEMA announced it would distribute debit cards to Katrina victims (indeed, they were: despite signing pledges to use the cards only for disaster recovery purposes, some recipients, according to snopes.com used them to purchase plasma TV's, expensive suits, even lap dances). Aid workers, with the best of intentions, surely found it hard to deny funds to the suffering.
Still, despite being numb to such sorry examples of human corruptibility, we are obliged to recognize that this is not compassion -- it's madness.
To be sure, the temptation to spend taxpayer dollars -- strong even during the fat years -- is especially enticing when tragedy strikes. Even a Republican Congress and a conservative president -- albeit, one who modifies the term with "compassionate" -- have proven susceptible to the allure of spending our way out of our problems.
The problem, perhaps, is that conservatives have set themselves up for charges of hypocrisy. By opposing spending as an ideological matter they're vulnerable to attack simply by not cutting expenditures or eliminating federal agencies (just last week, Michael Medved on his radio show renewed his call to wipe out the Departments of Education, Health and Human Services, and Housing and Urban Development).
Thus, anything that falls short of large-scale liquidation triggers admonitions -- from left and right -- that Republicans aren't serious about trimming our budgetary sails.
A far better approach isn't to eschew spending altogether -- an utterly implausible pipe dream -- but rather, quite simply, to insist that government money be spent wisely.
Although this idea of accountability seems so straightforward, it consistently eludes policy makers. Why? And how can we make sure that our elected officials and appointed bureaucrats use our tax dollars responsibly?
Last week I heard a fascinating talk by Maurice McTigue, formerly a member of the New Zealand parliament and currently the director of the Government Accountability Project at George Mason University's Mercatus Center.
The Hon. McTigue also served variously atop several different Kiwi ministries (Employment, Labour, Immigration, State Owned Enterprises, Railways, Works and Development) and, perhaps most importantly, worked as chairman of the New Zealand cabinet's Expenditure Control Committee (something of an equivalent to the GAO).
Far from a department-slashing, anti-government radical, McTigue is very much "of the system," as his career in civil service suggests. For this reason, he enjoys credibility when he speaks about his lengthy experience in bringing accountability and transparency to government.
He shared an amusing anecdote that illustrates why trimming government waste is both so challenging and so essential. During one of his ministerial posts, an underling from the Department of Motor Vehicles came into his office and asked for a larger outlay for his agency. McTigue, in his telling, asked the supplicant why his office required additional funding. The bureaucrat responded that costs had gone up. McTigue, unruffled, asked why that was and the underling said he'd get back to him.
A few weeks later, when the bureaucrat returned, he told McTigue that it had become more expensive to process driver license renewals. The MP then asked a fundamental question: why does the government of New Zealand need to renew licenses every several years? After all, renewals required neither a new photograph nor an updated driving test. Again, the official promised to come back with an answer.
But this time, when he entered McTigue's office, the underling told him that no one in the office could think of any good reason for license renewals. He had discovered that the practice was a historical one: when licenses were first issued for driving horses and buggies in the early 20th century, they were printed on paper that wore out after several years. Thus, the need to issue renewed licenses. Not necessary, of course, in the age of durable plastic laminates.
Presto! An entire office vanished -- and for good reason (to be fair, the government does require, for security reasons, updated photos every ten years and, for safety reasons, a new driving test once licensees turn 70).
McTigue's conclusion is that forces of historical inertia are generally the culprits behind ongoing, wasteful government programs. The original justifications for creating projects, offices, and entire agencies often dissipate over time -- but their outgrowths remain. Only through careful investigation can such waste be disposed.
The MP has helped bring this approach to these shores. In testimony before Congress, in advice to the Office of Management and Budget, and in service at the Office of Personnel Management, McTigue has spread his gospel of accountability to good effect. As he described it, the federal bureaucracy has slowly begun assessing the success of various programs (indeed, when he first arrived, many agencies lacked any kind of metric for making such an assessment) and cutting back those with none. The list of inefficient programs lopped off the treasury's recipient list has grown steadily over the past few years.
[Closer to home, San Diego mayor Jerry Sanders has recently begun implementing a similar analysis in an effort to chip away at the city's massive budgetary problems. He says that when he took office in November 2005, he was shocked to discover that the city maintained storage cabinets of Wite-Out for use in correcting typewriter mistakes and administered a furniture-making shop to equip its offices.]
It's important to stress that this isn't an ideological approach but a practical one. While the concept of accountability is based on principles of good governance, it's also rooted in the realities of the budgetary process. And for this reason, it's a concept that should -- and does -- appeal to Republicans, Democrats, and independents alike. Fidelity to this principle -- instead of vocal theoretical opposition to all forms of spending juxtaposed against ballooning (real-world) budgets -- will surely enhance conservatives' political and practical standing.
This is a matter of morality, as well. As McTigue succinctly puts it, every ill-spent dollar is one that can't be used to benefit those who truly need it. In the FEMA context, every dollar spent on a 42-inch HDTV is one that isn't available for food and drinking water.
The economist Tyler Cowen, the Chairman of Mercatus, recently made a similar observation about private sector donations and spending in the New York Times. Cowen argues that donors need more actively to ensure that their gifts are being put to good use. Simply because their dollars go to charity doesn't mean that they can be spent unwisely; in fact, the charitable nature of their pet causes should oblige donors to demand accountability since waste harms their purported beneficiaries more than anyone.
Cowen's message, of course, must be applied to government spending as well. By insisting that the government spend our dollars responsibly, we can best articulate our compassion to those in need.
Michael M. Rosen, TCS Daily's intellectual property columnist, is an attorney in San Diego.