Recovery Transparency Stories and Recommendations

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Rep. Darrell Issa, the ranking member on the House Committee on Oversight and Government Reform, released a letter to Earl Devaney, the recently appointed recovery inspector general, asking a series of questions regarding how his office will operate and what they will judge as fulfilling transparency requirements.

One specific point that Issa makes is to urge that recovery transparency be judged by the release of information “in a structured, open, and searchable format.” This is a particularly important point, although one that could have been raised during the actual consideration of the bill, rather than after the fact. An amendment requiring that recovery funds, contracts, and other data be posted in an open and structured manner would have been quite useful and probably could have garnered enough support to have been passed. Unfortunately, not one member of Congress sought to attach such language, not even Issa.

Issa also makes important points that some key contracting information is not required to be disclosed per the OMB memo on recovery disclosure. Most of this relates to the subparties to the funds. As the OMB memo states, and Issa quotes:

Reporting requirements only apply to the prime non-Federal recipients of Federal funding, and the subawards (i.e., subgrants, subcontracts, etc.) made by these prime recipients. They do not require each subsequent subrecipient to also report. For instance, a grant could be given from the Federal government to State A, which then gives a subgrant to City B (within State A), which hires a contractor to construct a bridge, which then hires a subcontractor to supply the concrete. In this case, State A is the prime recipient, and would be required to report the subgrant to City B. However, City B does not have any specific reporting obligations, nor does the contractor or subcontractor for the purposes of reporting for the Recovery.gov website.

Essentially only a few points in the chain have to report anything. States are the ones tasked with tracking the rest, if they so desire. This Baltimore Sun article on the efforts of Maryland Governor Martin O’Malley to try to present as much information as possible on recovery funds does a good job of explaining this issue.

And while states are struggling with this, we can also see some states grappling with solutions. In Oregon a bill has been proposed in the state Senate to require contractors to report far more than already required:

Oregon is leading a push to require contractors to report the number of jobs they create, as well as the hours worked and wages received by their employees.  These requirements, created under Oregon HB 2037, would ensure that Oregonians get a website that doesn’t just make an empty gesture toward transparency but one that ensures their tax money actually goes toward creating quality jobs.

The benefits of such a site are simple.  If contractors are creating jobs with recovery money, they can get more.  If they aren’t creating jobs, the state can take away their money and target it to contractors that are.  If they are serious about using recovery dollars to turn the economy around, Oregon lawmakers should make it a top priority to adopt these new standards.

If the country is serious about getting the recovery plan right, they will push their states to follow in Oregon’s example. Considering the fact that states are poised to distribute over $300 billion of the $787 billion set aside under ARRA, the transparency standards we adopt at the state level will more or less amount to the transparency standards we adopt as a nation.

This is a step in the right direction. Of course, this still does little to solve the structured and open issue. As recovery funds continue to be spent, there will, hopefully, be more efforts like the one in Oregon and answers on how the federal government will grade and oversee the spending.

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