By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives
Secretary Hillary Clinton is asking Democratic voters to believe that she has experienced a “Road to Damascus” conversion from her roots as a leader of the “New Democrats” – the Wall Street wing of the Democratic Party. When exactly this conversion occurred is never stated, but an interesting fact has emerged that demonstrates it did not occur during her service as the Secretary of State. A Wall Street Journal story provides the key facts, but none of the analysis.
Newly released emails indicate that former Secretary of State Hillary Clinton and her top staff were involved in the selection process for the State Department’s internal watchdog, a position that ultimately went unfilled throughout her four-year tenure.
The WSJ’s angle is that such involvement in the selection of the Inspector General (IG) is a threat to the IG’s vital independence. True, and also true as the story notes that Hillary was far from rare as an agency or department head in seeking to select behind the scenes the supposedly independent IGs.
The function of the IG is to “speak truth to power.” Naturally, “power” hates IGs with a purple passion. Government leaders are most likely to hate having its abuses made public by IG when the government leader is secretly acting in concert with immensely powerful private leaders for their mutual benefit at the expense of the public.
What the WSJ missed is that the Clinton’s, for decades, have sought to destroy the independence and effectiveness of the IGs precisely because of the threat that they pose of blowing the whistle on these abuses. The Obama administration, of course, is famous for its prosecutions of those who blow the whistle on such abuses. The real story is not that Hillary attempted to select a lap dog as IG – the real story is that for her entire tenure as Secretary, four years, she left unfilled the leadership position of the only institution in the State Department dedicated to maintaining integrity and preventing the abuse of public power to aid cronies. That aid, of course, comes with the clear expectation that the cronies will make the head of the State Department wealthy as soon as she or he steps down. There is no possible defense for that, and it does not happen accidentally. The primary blame goes to President Obama, who made no nomination for the position for the entire four years. It wasn’t Republican intransigence that explains this scandal.
Hillary and Obama Renewed Clinton’s War on IGs
Bill Clinton and Al Gore installed Bob Stone as their official to oversee the implementation of “Reinventing Government.” Stone reserved his greatest hate for the Inspector Generals, claiming in his book (Confessions of a Civil Servant) that their primary “contribution” to government is “stifling innovation” (p. 156). Stone wrote that he has no confidence that IGs are effective against fraud, and made the old joke that their function is to “shoot the wounded” after a battle, and then cited favorably the even older quotation from President “Teddy” Roosevelt deriding “critics” of the “strong man.” The tone of the quotation is one of disgust that “cold and timid souls that know neither victory nor defeat” (the IGs) have the impertinence to criticize great men like Teddy (and Stone and CEOs) – who are infinitely superior to IGs. The “strong man” transcends normal moral codes. (Teddy was a contemporary of Friedrich Wilhelm Nietzsche.)
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
I have written previously on the essential and rare role that government officials play when they “speak truth to power.” Roosevelt and Stone and many government leaders share a virulent contempt for those who speak truth to power when they hold power. Tom Peters’ foreword to Stone’s book emphasizes Stone’s arrogance and nastiness to anyone who had the temerity to disagree with him, noting that he was famous for his refusal to “suffer fools lightly.” Stone knew that any government official who sought to prevent fraud was such a “fool.” The Reinventors shared this contempt for anyone who disagreed with their dogmas. In a prior article, I quoted in some detail their openly expressed intention to force out anyone who disagreed with their policies. The journalist who led the “reinventing government” movement advised that it was essential that the Clinton administration not “tolerate resistance” to the movement’s dogmas.
Neil Barofsky (SIGTARP) explains in his book how the IGs responded to the Reinventors’ unholy war against the IGs (Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street). The IGs became exceptionally cautious in speaking truth to power. Gretchen Morgenson rightly emphasized this process in her analysis of the key disclosures in Barofsky’s book.
“‘The common refrain went like this,’ Mr. Barofsky writes. ‘There are three different types of I.G.’s. You can be a lap dog, a watchdog or a junkyard dog.’ A lap dog is seen as too timid, he was told. But being a junkyard dog was also ill-advised.
‘What you want to be is a watchdog,’ he continues. ‘The agency should perceive you as a constructive but independent partner, helping to make things better for the agency, so everyone is better off.’ He also learned, he says, that success as an inspector general meant that investigations come second. Don’t second-guess the Treasury. Instead, ‘focus on process.’”
Hillary and Obama made sure that they did not even have to risk their “lap dog” developing a spine. No IG was their ideal world.
Hillary’s war on the IGs has intensified in the last week, even as she unintentionally offered an example of how critical truly independent IGs are to protecting the American people. The title of a recent article was “Clinton chief attacks State Dept. watchdog.” The “watchdog,” of course, is the IG.
John Podesta, the chairman of Hillary Clinton’s presidential campaign, says there are “serious questions” about the integrity of the State Department Office of Inspector General (OIG).
The OIG is locked in an increasingly contentious fight with Clinton’s campaign on a host of issues, including her use of a private email account during her time as secretary of State.
It has also reportedly subpoenaed the Clinton Foundation for documents related to charity projects and is investigating close Clinton aide Huma Abedin’s work as a “special government consultant” while she worked at State.
A source within the OIG contacted The Hill claiming that the office has grown increasingly partisan, accusing it of having an “anti-Clinton” bias.
Told by The Hill about the remarks, Podesta described the source as a “whistleblower” whose comments called into question the integrity of the OIG investigations.
The idea that the State Department IG, appointed by President Obama, is “partisan” in the sense of being “anti-Clinton” is facially bizarre in that Obama is a strong supporter of Hillary. Further, anything that embarrassed Hillary would embarrass Obama. It appears that there are competing leaks from the IG’s office.
The source charges that State Inspector General Steve Linick is “excessively deferential” to Emilia DiSanto, the OIG deputy director and a former aide to Senate Judiciary Committee Chairman Chuck Grassley (R-Iowa).
Grassley is at the center of several investigations about Clinton, including whether Abedin was overpaid by the government while working for the State Department. He’s been aided in his probe by what he says is a “confidential source” at the OIG — Democrats charge this is DiSanto.
“Our work is becoming overtly anti-State Department, pro-Republican, and anti-Clinton,” the OIG source said, charging that DiSanto is working with an “active partisan mandate to undermine both the State Department as a federal agency and Secretary Clinton as a presidential candidate.”
The claim, however, does not explain why an Obama appointee (Linick) would be “excessively deferential” to a subordinate who had been a Republican staffer. The only logical reason is that the facts found by the IG’s investigations had produced serious concerns in Linick’s mind. “Excessively deferential” is an odd and vague claim for a purported “whistleblower” to make against his boss.
Contemporaneously, however, Hillary was unknowingly endorsing the Nation’s critical need for independent, vigorous, and brave IGs.
Presidential hopeful Hillary Clinton said last month that she was “totally appalled” by what she described as Navient’s “outrageous” behavior toward borrowers.
But she, and the American people, would not have known of this “outrageous” behavior if it had not been for the Department of Education’s IG penetrating a cover up led by the Department’s leaders.
The U.S. Department of Education conducted a bogus investigation into allegations that student loan giant Navient Corp. violated its lucrative government contract, leading the Obama administration to mislead the public last year when it proclaimed the company didn’t cheat servicemembers on federal student loans, according to an audit by the department’s inspector general released Tuesday.
For profit educational corporations have often proven to be notorious fraud factories. Navient added a special degree of infamy to its frauds by specializing in ripping off veterans. The Department of Education has been tepid or even obstructionist in cracking down on these frauds. Its leadership rewarded Navient’s fraudulent practices even after they were caught red-handed targeting veterans. Bill Clinton personally, and both Clintons through and the Foundation have long profited from the massive largess of notorious for-profit schools.