More Waste (Now With Attitude!)

by hilzoy

Bernard Y, in comments, points to another example of the Bush administration's Zero Tolerance Policy for wasteful spending civil servants who try to save the taxpayers' money:

"When Jon Oberg, a Department of Education researcher, warned in 2003 that student lending companies were improperly collecting hundreds of millions in federal subsidies and suggested how to correct the problem, his supervisor told him to work on something else.

The department “does not have an intramural program of research on postsecondary education finance,” the supervisor, Grover Whitehurst, a political appointee, wrote in a November 2003 e-mail message to Mr. Oberg, a civil servant who was soon to retire. “In the 18 months you have remaining, I will expect your time and talents to be directed primarily to our business of conceptualizing, competing and monitoring research grants.”

For three more years, the vast overpayments continued. Education Secretary Rod Paige and his successor, Margaret Spellings, argued repeatedly that under existing law they were powerless to stop the payments and that it was Congress that needed to act. Then this past January, the department largely shut off the subsidies by sending a simple letter to lenders — the very measure Mr. Oberg had urged in 2003."

That's the sort of thing that makes me proud of my government. When an agency is in charge of doling out lots of money and one of its employees figures out that it's being fleeced, that person's superior drafts a snotty email about how the agency “does not have an intramural program of research on postsecondary education finance” and tells him to mind his own business. Later we hear from a Department spokesperson:

"Kristin D. Conklin, a senior adviser at the department, said the department had been unaware, until its inspector general issued its Nelnet audit last September, that lenders were collecting subsidy payments on loans that were clearly ineligible."

Maybe if they had had "an intramural program of research on postsecondary education finance", otherwise known as one of the programs they administer, they would have had some idea that it was being abused.

Read the whole thing. It includes Clinton administration attempts to eliminate this abuse being blocked by one Sally Stroup, a GOP Congressional staffer who became an assistant secretary of education in the Bush administration. Curiously, she appears several times in this story:

"A 2004 report by the Government Accountability Office urged the department to rewrite its regulations to save billions of dollars in future loan subsidy payments. But Ms. Stroup, who had once worked for one of the lending companies that is now under investigation for the subsidies, argued in response that it would be simpler for Congress to clamp down with new legislation. Mr. Paige repeated that argument in a letter to Mr. Kennedy, who was pressing the department to curb the subsidies.

Then, in 2005, the Education Department’s inspector general recommended that $36 million be recovered from a New Mexico lender. Ms. Spellings overruled the finding that the payments were improper and declined to recover the payments. And in January 2007, after the inspector general recommended that $278 million in overpayments be recovered from Nelnet, the department instead reached a settlement under which Nelnet could keep the money — if it dropped plans to bill the department for another $800 million in subsidies."

Hundreds of millions of dollars of our money. Thanks, Mr. CEO President.

Comments

[Free Lunch]

If Wall Street executives can get car service perks that cost their company a couple hundred thousand a year [WSJ], why would they care about taxpayers being ripped off.

[cleek]

awesome! i've been waiting for Spellings to get caught up in something. are there any cabinet-level people left in BushCo who haven't been caught ripping-off the public ?

[bril]

Impressive how you can ignore all the shenanigans that Democrats have pulled lately with respect to poor performance.

I guess this is what it looks like to live in a world that is only black & white.

Good job at continuing to ignore those depraved and shameless politicians who receive your support.

While this kind of government incompetence is bad it is also common.

Too bad parties can't work together to resolve these issues, but that's what happens when so many only see in black & white.

[Steve]

Here's some useful background on Rod Paige and the sort of fraud that got him a job as GWB's Secretary of Education.

[John Thullen]

"Grover Whitehurst, a political appointee, ...."

Guys named Grover with two-syllable last names ending in "st" should be a red flag.

Why am I pretty sure there is a Grover Pinequist at Interior leasing out wildlife habitat to miners and a Grover Snidelist at Treasury shredding IOUs in filing cabinets and a Grover Gunfist at DOD dispensing weapons contracts and a Grover Lutefisk at HHS with a brother-in-law in the high-end catheter business and a Grover Flatkisk at Labor rearranging workrules and a Grover Mockquist at Justice hiring God's chosen as career termites?

[Batocchio]

Good catch.

What's disturbing is how widespread this sort of behavior has been under the Bush administration. It's been a tough beat for good public servants, and many great people have fled.

[KCinDC]

It's disappointing how so often the "punishment" for criminal behavior by a corporation is that the corporation promises not to do it again. Occasionally (though not in this case) the consequences even extend to paying back some of the money stolen. I'm unclear on how this is supposed to even pretend to be a deterrent, since the expected profits are obviously wildly positive (there being no chance of a net loss).

[someotherdude]

All Hat, No Cattle
We warned you! Look back at our 1999, pre-primary assessment of George W. Bush
PAUL ALEXANDER

George W. Bush was head cheerleader in prep school, a hard-partying frat rat and mediocre student at Yale. After skirting the draft in 1968, he failed at business three times, got bailed out by powerful friends, made a fortune at taxpayer expense and became the popular but weak governor of Texas, an evangelical Christian who preaches morality but ducks questions about his own past. And now he might be president?

As of early July, all indicators seemed to confirm that Texas Gov. George Walker Bush had wrapped up the Republican presidential nomination -- a full eight months before votes will be cast in the first primary, in New Hampshire. After months of buildup, the oldest son of former president George Bush left his home in Austin -- in a campaign plane he'd named Great Expectations -- and set out to take his message of compassionate conservatism to America.

With a Bible in one hand and a cell phone -- on which he speaks regularly to Christian Coalition leader turned political consultant Ralph Reed -- in the other, Bush sounded more like a Southern minister than a presidential contender. In Iowa, at the announcement of his candidacy, he boasted, "Some people think it is inappropriate to draw a moral line in the sand. Not me." He preached abstinence to Christian students in South Carolina. "The twin epidemics of teen pregnancy and sexually transmitted disease are a major problem for the future of America," he warned. "It is hard for the American dream to touch a life if you've had a baby out of wedlock." Later that week, he appeared with his brother Jeb, the governor of Florida, at a church-run school in Tampa.

More:
All Hat, No Cattle

[Pooh]

Too bad parties can't work together to resolve these issues, but that's what happens when so many only see in black & white.

I see exactly one such person in this thread...

But then, I also forgot to condemn terror today, so I can't be trusted.

[Charles W]

This is not mere incompetence. Let's call it what it is: corruption.

[Curtis]

I think it may be a mistake to characterize this as 'waste', just did a few minutes of research on Nelnet and found out that, no surprise, they were a leading contributor to RNC campaign funding in '06. We really need some Eliot Spitzer types at the federal level.