The sci-fi-action-comedy-thriller Chappie is the tale of an insentient creature who gains a soul and learns to love, just like Pinocchio and WALL•E and Short Circuit's Number 5. But this is a film by Neill Blomkamp, the writer/director of the violence- and profanity-laden District 9 and Elysium, so don't expect Disney-style warmth or Guttenberg-ian sweetness from this similarly R-rated outing. Instead, prepare to be amazed - though "stupefied" is the more appropriate term - by just how mawkish a movie can be despite boasting a title character who proves expert at carjacking, and whose most frequent malapropism involves his spirited twist on a 12-letter cuss word.

by U.S. Senator Chuck Grassley


As the first session of the 113th Congress ends, year-end performance reviews are under way.  Public opinion of Washington is remarkably low.  The mismanaged roll out of the federal health insurance website and broken promises from the President have frustrated many Americans.  A shortsighted decision by the Senate Majority Leader to trample on minority party rights has likely poisoned the well for sweeping bipartisan achievements in the U.S. Senate.


Still, rank-and-file lawmakers in Congress continue working on the people's business that affects the lives of ordinary families, workers, farmers, students, soldiers, veterans and retirees.  From keeping rural health care and higher education accessible to hardworking Iowa families; to championing renewable energy that's good for consumers, the environment and economy; balancing intelligence-gathering with privacy rights; or, challenging the administration's decision to sweep the trafficking and sale of illicit drugs under the prosecutorial rug, I'm working to make sure the nation's public policies square with the principles of good governance and proper stewardship of tax dollars.


As a member of the Senate Budget, Agriculture, Finance committees, Ranking Member of the Judiciary Committee and co-chair of the International Narcotics Control and Foster Youth caucuses, I've participated this year in scores of congressional oversight, nomination and legislative hearings to advance economic and social policies that build upon America's landscape of opportunity, mobility and prosperity.  Whereas many in Washington seem to believe that redistributing wealth and raising taxes magically will solve income inequality, cure global warming and achieve world peace, the fact is that Washington has a spending problem, not a revenue problem.


Washington needs to take less so that Americans can do more spending and investing with their hard-earned money to create jobs and prosperity.


It's frustrating this Congress busted the spending caps agreed to in August 2011.  Although Washington won't face a government shutdown after the New Year, it's irresponsible to raise an additional $63 billion in revenue over the next 10 years, but spend it all over the next two years.  These kinds of budget agreements contribute towards the $17 trillion national debt hanging over the taxpaying public's head.


Here are a few items of business I'm working on to try to make a difference in how government serves "We the People."


·         Strengthening whistleblower protections. Washington can't afford to weaken incentives that encourage civil servants and private sector contractors to come forward with information about waste, fraud and abuse. Congress needs to step up oversight as tax dollars flow throughout the federal bureaucracy and the courts need to stop diluting whistleblower protections. A provision was included in the National Defense Authorization Act to protect military whistleblowers from retaliation. Much more needs to be done, including passage of Senator Kirsten Gillibrand's bipartisan bill to root out sexual assault in the military.


·         Vetting nominees. Whether it's the IRS, Homeland Security or lifelong appointments to serve on the federal bench, members of the U.S. Senate have the constitutional duty of advice and consent.  Scrutiny of these nominees is an integral function of our republic's system of checks and balances that demands more than rubber-stamp approval.


·         Promoting sibling connections and beefing up child support enforcement. I'm working to secure bipartisan legislation that would help siblings retain ties with one another when a child is placed in foster care or parental rights are terminated.  Moreover, the bill moving through Congress would give states more tools to recover money that family courts have determined is owed to custodial parents.


·         Championing renewable energy. It's disappointing the Obama administration has proposed rules that would roll back the Renewable Fuel Standard (RFS) in 2014.  From rental income earned from wind farms to the market value boost for Iowa commodities, policies such as the wind energy and biodiesel tax credits and the RFS have helped foster job creation and economic growth to the rural economy.  I'll continue beating the drum in Congress to scuttle Big Oil's efforts to dismantle America's renewable energy policy.


·         Reforming farm payment system. My efforts to install payment caps that limit how much individual farmers may receive per year were included in the Senate and House versions of the farm and food bill.  Reasonable limits are needed to keep the farm safety net defensible, especially as Congress considers sizable savings in nutrition assistance spending.


·         Cracking down on patent trolls. A legislative remedy is necessary to curb the prevalence of abusive patent litigation.  The budding patent troll phenomenon is forcing businesses to divert scarce resources towards settlement or litigation that would otherwise be channeled towards innovation, research, development, job creation or expansion.  I'm working on legislation that would strengthen the integrity of the U.S. patent system that has allowed innovators and inventors to flourish and prosper for generations.


·         Securing access to rural health care, increasing oversight and expanding transparency of Medicare payments. During committee mark-up of a must-pass Medicare physician payment bill, I secured bipartisan amendments that would make permanent a payment index that helps Iowa providers receive fair reimbursement relative to medical providers in other parts of the country; continue the Medicare-dependent hospital program to recognize the valuable service these hospitals serve in their low population areas; beef up independent investigation and oversight of Medicare spending; and establish a free, searchable Medicare payment database.


Regardless of the overall record of the 113th Congress, my work in the U.S. Senate is full steam ahead as the new year begins.  My nose is to the grindstone in Washington, and I'm launching my 34th annual 99-county road trip for meetings with Iowans.


Friday, December 20, 2013

Prepared Floor Statement of Senator Chuck Grassley of Iowa
"The Abuse of Cloture Motions"

Wednesday, December 19, 2013

The Senate is poised to vote on a final National Defense Authorization Act after considering only two amendments.

The Senate has not been functioning like it should for some time and the way the National Defense Authorization Act has been handled is just one example.

I've served in the majority and the minority with Democratic Presidents and Republican Presidents so I've seen it operate from every perspective.

What's unique about the Senate is that the rules and traditions force senators to work together.

That leads senators to understand where the other side is coming from, resulting in mutual respect and comity.

I hear from a lot of Iowans who are upset at the tone they hear from Washington and the lack of bipartisanship.

I've often said that the Senate functions best when no party has more than about 55 seats.

If you have much more than that, there is less of a tendency to want to work in a bipartisan fashion.

That was true for most of my time in the Senate, but not now.

Despite a current margin of just 5 seats in the Senate, there has been very little bipartisan cooperation.

I suppose some Democratic senators really believe it when they say that this is all Republicans' fault.

I think anyone who remembers how the Senate used to operate and has paid attention to how the current majority leadership has been running things, knows better.

In fairness, quite a few members of the Senate don't remember how the Senate is supposed to operate because it has been dysfunctional ever since they were elected.

Some senators previously served in the House of Representatives, where the majority party controls everything that happens.

In the House of Representatives, the Rules Committee sets out the terms of debate for each bill.

If you want to offer an amendment in the House, you have to go hat in hand to the Rules Committee and say, "Mother may I?"

If the House leadership doesn't like your amendment, you're out of luck.

If that sounds familiar, that's because it is how the current Senate leadership has been running things lately.

We have seen an absolutely unprecedented use, or I would say abuse, of cloture motions paired with a tactic called "filling the tree" to block amendments being considered.

That not only affects the minority party, but Democratic senators as well.

I would say to my colleagues on the other side of the aisle, how many times have you had an amendment you wanted to offer that was important to your state, but you couldn't do it because amendments were blocked?

The Senate Majority Leader has effectively become a one man version of the House Rules Committee, dictating what amendments will be debated and which ones will never see the light of day.

This strips the ability of individual senators to effectively represent their state, regardless of party.

It also virtually guarantees that any legislation the Senate votes on will be more partisan in nature.

I would ask my colleagues across the aisle, isn't your first responsibility to the people of your state, not your party leadership?

Are you really content to cede to your party leader the trust and responsibility placed in you by the voters of your state?

How much longer can you go along with this?

The people of Iowa sent me to the United States Senate to represent them, not to simply vote up or down on a purely partisan agenda dictated by the Majority Leader.

Everyone complains about the lack of bipartisanship these days, but there is no opportunity for individual senators to work together across the aisle when legislation is drafted on a partisan basis and amendments are blocked.

Bipartisanship requires giving individual senators a voice, regardless of party.

When senators are only allowed to vote on items that are pre-approved by the Majority Leader, they lose the ability to effectively represent their state and become mere tools of their party leadership.

It's no wonder Americans are so cynical about government now.

In the last decade, when I was Chairman of the Finance Committee, and Republicans controlled the Senate, we wanted to actually get things done.

In order for that to happen, we knew we had to accommodate the minority.

We had to have patience, humility, and respect for the minority, attributes that don't exist on the other side anymore.

And we had some major bipartisan accomplishments, from the largest tax cut in history to a Medicare prescription drug program to numerous trade agreements.

Those kind of major bills don't happen anymore.

The Senate rules provide that any senator may offer an amendment regardless of party affiliation.

Each senator represents hundreds of thousands to millions of Americans and each has an individual right to offer amendments for consideration.

The principle here isn't about political parties having their say, but duly elected senators participating in the legislative process.

Again, as part of our duty to represent the citizens of our respective states, each senator has an individual right to offer amendments.

This right cannot be outsourced to party leaders.

The longstanding tradition of the Senate is that members of the minority party, as well as rank and file members of the majority party, have an opportunity to offer amendments for a vote by the Senate.

That has historically been the case with the annual National Defense Authorization Act, but not this year.

It typically takes a couple weeks to consider the National Defense Authorization Act.

This year, the majority party leadership chose to wait until a week before the scheduled Thanksgiving recess to bring it up, leaving little time for the customary open debate and amendment process.

Once the Defense Bill was brought up, rather than promptly starting to process amendments, the Majority Leader immediately blocked amendments so he could control what came up for a vote.

The Senate ground to a halt, wasting time we didn't have when we could have been considering amendments from both sides.

This process, as everyone here in the Senate knows, is called "filling the tree" where the majority leader offers blocker amendments that block any other senator from offering their own amendment unless he agrees to set his blocker amendments aside.

"Filling the tree" doesn't appear anywhere in the Senate rules.

It's based on combining two precedents- the precedent that the Majority Leader has first right of recognition by the presiding officer and the precedent that only one first degree and one second degree amendment can be pending at any one time.

Basically, the Majority Leader abuses his prerogative to cut in line and offer an amendment that does nothing more than, say, change the enacting date by one day for instance.

That then blocks any other senator from exercising their right to offer an amendment.

This so called filling the tree tactic used to be relatively rare, but it has become routine under the current leadership.

This way, the Democratic leadership can prevent other senators from offering amendments they don't want to have to vote on.

Then, with amendments blocked, the Majority Leader makes a motion to bring debate to a close, or "cloture".

When cloture is invoked, it sets up a limited time before a final vote must take place.

By keeping amendments blocked while running out that clock, the majority leader can force a final vote on a bill without having to consider any amendments other than what he approves.

It shouldn't be a surprise to anyone that members of the minority party who wish to offer amendments will vote against the motion to end debate until their amendments have been considered.

When Republicans vote against the Democratic leader's motion to end debate, we are accused of "launching a filibuster".

In other words, unless we give up our right to participate fully in the legislative process, they say we are filibustering.

Does that really count as a filibuster?


The non-partisan Congressional Research Service has a helpful report on cloture motions and filibusters that makes this point clear.

The CRS Report, "Cloture Attempts on Nominations: Data and Historical Development" by Richard S. Beth contains an entire section titled, "Cloture Motions Do Not Correspond with Filibusters."

It starts out, "Although cloture affords the Senate a means for overcoming a filibuster, it is erroneous to assume that cases in which cloture is sought are always the same as those in which a filibuster occurs. Filibusters may occur without cloture being sought, and cloture may be sought when no filibuster is taking place. The reason is that cloture is sought by supporters of a matter, whereas filibusters are conducted by its opponents."

It then goes on to explain various scenarios to illustrate this point.

Several members of the majority have made a point of trying to confuse cloture motions with filibusters.

We hear constantly that there have been an unprecedented number of Republican filibusters.

They often point to a chart that purports to tally the number of filibusters and say that it is evidence of abuse of the Senate rules.

That number they quote is the number of cloture motions, not filibusters.

It's true that there have been a record number of cloture motions, and I also agree that the number amounts to an egregious abuse of the Senate rules.

But, again, cloture motions do not correspond with filibusters.


Cloture motions are filed by the majority party leadership, not the minority party.

This abuse of cloture is a major cause of the Senate's current dysfunction.

Again, this abuse of cloture, often combined with the blocking of amendments, prevents all senators from doing what they were sent here to do, not just members of the minority party.

And, it's gotten even worse.

Even where the Majority Leader has decided he's going to be open to amendments, he has created, out of whole cloth, new restrictions to limit senators' rights.

First, he normally only opens up the amendment process if there's an agreement to limit amendments.

And, this is usually only a handful or so.

Then, he has magically determined that only "germane" or "relevant" amendments can be considered.

Of course, no where do the Senate rules require this, other than post cloture.

Senators elected in the last few years appear to be ignorant of this fact.

You'll hear some senators here argue against an amendment saying it's non-germane or non-relevant.

They've totally fallen for the Majority Leader's creative rulemaking, thus giving up one of their rights as a senator with which to represent their state.

I can't count how many non-germane or non-relevant amendments I had to allow voted on when I processed bills when Republicans were in charge.

They were usually tough, political votes, but we took them because we wanted to get things done.

You don't see that nowadays.

The current majority avoids tough votes at all costs.

And that's why they don't get much done.

The American people sent us here to represent them.

That means voting, not avoiding tough votes.

We sometimes hear that this is a question of majority rule versus minority obstruction.

Again, that ignores that each senator is elected to represent their state, not simply to be an agent of their party.

While a majority of senators may be from one party, they represent very different states and the agenda of the majority leader will not always be consistent with the interests of their states.

When one individual, the Senate Majority Leader, controls what comes up for a vote, that is not majority rule.

In fact, there are policies that have majority support in the Senate that have been denied a vote.

What happened during Senate debate on the budget resolution seems to prove that point.

The special rules for the Budget Resolution limit debate, so it can't be filibustered, but allow for unlimited amendments.

A Republican amendment in support of repealing the tax on life-saving medical devices in President Obama's health care law passed by an overwhelming 79 to 20, with more than half of Democrats voting with Republicans, rather than their party leader.

A Republican amendment in support of approval of the Keystone XL Pipeline to bring oil from Canada passed 62 to 37.

Votes like these that split the Democrats and hand a win to Republicans are exactly what the majority leader has been trying to avoid by blocking amendments.

That's why the Senate didn't take up a budget resolution for more than three years.

Still, the Budget Resolution isn't a law so unless legislation on these issues is allowed to come up for a vote, nothing will happen despite the support of a majority of the Senate.

A case in point is the National Defense Authorization Act we are considering now.

One of the amendments the Majority Leader blocked would have imposed sanctions on the Iranian regime.

Everyone knew that this amendment enjoys broad bipartisan support and would have passed easily had it been allowed a vote.

It had majority support, but the Senate was not allowed to work its will.


The Iran sanctions amendment was blocked because the President opposed it and it would have been a tough vote that divided Democrats.

Is that a valid reason for shutting down the traditional open amendment process for the Defense Bill?

I don't think so

Until we put an end to the abuse of cloture and the blocking of amendments, the Senate cannot function properly and the American people will continue to lack the representation they are entitled to.

This week the Senate passed a budget bill.  While I appreciate the bipartisan effort that brokered this budget deal, and I am relieved that it will help avoid another government shutdown, I could not support the proposal and voted against it.

The spending caps that Congress and President Obama put in place two years ago have worked.  I'm not sure why we need to move away from that.  To get our fiscal house in order, we should at least abide by the spending caps put in place in August 2011.  The spending reductions called for in 2011 were agreed to as part of the deal to provide a $2.1 trillion increase in the nation's debt ceiling.

The budget bill approved this week allows for an additional $63 billion in government spending over the next two years when we have a $17 trillion debt.  To offset that higher spending, it raises revenue over ten years but spends that money in the first two years.  It raises fees on air travelers and corporate pension premiums and reduces retirement benefits for military retirees to offset unrelated spending.  Nearly all of the meager spending cuts come way down the road, in 2022 and 2023.

Congress has a spending problem, not a revenue problem, and this budget deal only emphasizes that.

Thursday, December 19, 2013

Video can be found here.

Q:        Will new leadership at the IRS fix the agency's recent problems?

A:        As the tax collector-in-chief for the federal treasury, the Internal Revenue Service and its commissioner bear a Herculean task to administer and enforce a tax code blanketing a nation of 300-plus million citizens.  Regrettably, the agency's efforts to uphold the public trust have fallen far short of heroism by any definition.  Considering its core mission is to serve the taxpaying public, the beleaguered agency has substantial fence-mending to tend to after a number of self-inflicted scandals.  These include the flagrant misuse of tax dollars for lavish conferences and repressive targeting of taxpayers during the 2010 and 2012 election cycles.  That extra scrutiny was directed towards groups seeking tax-exempt status and whose political views primarily differed from the current administration.  Now the IRS has proposed new rules that would impose new restrictions on political speech by these same tax-exempt social welfare organizations, while providing an exemption for tax-exempt labor unions.  The proposal ought to raise a red flag to all those interested in engaging and educating the public about elections. Throughout my decades of public service, I have worked to foster greater participation among the electorate, not less.  The next commissioner of the IRS should not allow the agency to undermine constitutional principles of free speech and civic engagement.

With its thicket of tax laws, rules and regulations covering individuals, households, businesses, non-profit charities and tax-exempt organizations, the federal agency by any measure has a tall order to fill.  Unfortunately, the IRS has flunked fundamental metrics of accountability and transparency.  In an era of federal deficits lined up as far as the eye can see, the IRS must work effectively to help close the fiscal gap through principles of good governance, sound stewardship of tax dollars and faithful execution of collecting taxes owed.  Due to its spate of scandals, the IRS now also must work to close the credibility gap with the taxpaying public.  Our system of voluntary compliance depends upon it.  During a recent congressional hearing held to vet the next IRS Commissioner, I used the opportunity to get the nominee's views and demeanor on the public record.  As we've learned from the botched rollout of the Affordable Care Act, style and substance matter.  It's critical to have a leader at the helm who will take a hands-on approach to trouble-shoot and address problems, not a feigned hands-off approach that believes ignorance somehow will whitewash incompetence.  As a senior lawmaker on the tax-writing Senate Finance Committee, I will continue making good use of my constitutional oversight authority to hold the IRS accountable.  Considering our current fiscal challenges and the IRS' expansive new role to implement and enforce the Affordable Care Act, the IRS can expect regular check-ups from this U.S. Senator to restore integrity and service to the Internal Revenue Service.

Q:        What issues did you raise at the nomination hearing?

A:        For starters, I wanted to clear the air about a common misconception in Washington, D.C.  That is the mistaken notion that Washington knows best.  The Affordable Care Act provides a perfect illustration of this misguided belief.  The President's health care law redirects one-sixth of the U.S. economy and assigns vast new responsibilities to an already bloated federal bureaucracy.  As we witnessed on Oct. 1, the Department of Health and Human Services (HHS) exposed embarrassing incompetence after toiling for three and a half and spending hundreds of millions of tax dollars to create an infamously flawed website.  And not yet so visible to the public's eye is that the IRS will play a central role in administering the new health care law, such as issuing refundable tax credits to insurers that would offset the costs of insurance premiums and administering the employer and individual mandates and penalties.  Already the IRS has delayed for one year the employer mandate and reporting requirements for insurers and employers.  The IRS must still issue these regulations and install reliable software systems to determine eligibility and compliance.  In addition, the IRS confronts notorious challenges rooting out waste, fraud and abuse in improper payments under the Earned Income Tax Credit program.  In fact, the EITC improper payment rate has exceeded 20 percent for the last decade.  The Affordable Care Act has created yet another federal spigot from which to siphon tax dollars.  That's why it's even more important for the next IRS commissioner to welcome as many partners to the policy and enforcement table as possible.  Whistleblowers and private debt collection companies offer very useful tools to add to the IRS arsenal to collect taxes that are owed and to fight waste, fraud and abuse.  The IRS has been slow to take advantage of whistleblowers who highlight tax cheating, to my disappointment as the author of beefed-up whistleblower incentives.  Considering the IRS is taking on more responsibilities than ever before, the Commissioner of Internal Revenue needs all the help he can get.

Friday, December 13, 2013

Prepared Floor Statement of Senator Chuck Grassley of Iowa

The 2013 Farm and Nutrition Bill

Wednesday, December 11, 2013

Mr. President, I rise today to talk about the farm bill; and specifically about reforming payment limits for farm programs.

Beyond saving money, these reforms help ensure farm payments go to those who they were originally intended, small and medium-size farmers.  In addition, the reforms include closing off loopholes so non-farmers can't game the system.

Supporters of the farm bill need to take a hard look at what challenges were presented last year to getting the bill done.  We need to forge ahead knowing some tough decisions need to be made.

There are more reforms we need to make to programs such as food stamps; and they are reforms that cut down on waste, fraud, and abuse in the program, but also safeguard assistance for people who need it.

And while I support closing loopholes to the food stamp program, I believe the farm bill should also close the loopholes in farm programs that are abused.

As we move forward on finalizing a new Farm Bill, I want to state clearly that Sections 1603 and 1604 related to farm payments, which are in both the House and Senate Farm Bills, should stay in the bill.

These farm payment reforms strike a needed balance of recognizing the need for a farm safety-net, while making sure we have a defensible and responsible safety-net.

In case there is any doubt, we do need a farm program safety-net.  For those who argue we do not need a safety-net for our farmers, I argue they do not understand the danger of a nation which does not produce its own food.  For all the advances in modern agriculture, farmers are still subject to conditions out of their control.

And while farmers need a safety-net, there does come a point where a farmer gets big enough he can weather tough times without as much assistance from the government.

Somehow though, over the years there has developed this perverse scenario where big farmers are receiving the lion's share of farm program payments.  We now have the largest 10 percent of farmers receiving nearly 70 percent of farm payments.

There is nothing wrong with a farmer growing his operation, but the taxpayer should not be subsidizing large farming operations to grow even larger.  By having reasonable caps on the amount of farm program payments any one farmer can receive, it helps ensure the program meets the intent of assisting small and medium-size farmers through tough times.

My payments reforms essentially say we will help farmers up to $250,000 per year, but then the government training wheels come off.

These new caps will also help encourage the next generation of rural Americans to take up farming.

I am approached time and again about how to help young people get into farming.  When large farmers are able to use farm program payments to drive up the cost of land and rental rates, our farm programs end up hurting those they are meant to help.

It is simply good policy to have a hard cap on the amount a farmer or farm entity can receive in farm program payments.  And while both bodies of Congress have decided to cap farm payments, crop insurance is still available to large operations with no limits on indemnities.

Sections 1603 and 1604 of the current farm bills set the overall payment cap at $250,000 for a married couple.  In my state of Iowa, many people would say this is still too high.  But I recognize that agriculture can look different around the country, and so this is a compromise.

Just as important to setting a hard cap on payments is closing off loopholes that have allowed non-farmers to game the farm program.

The House and Senate farm bills also end the ability of non-farmers to abuse what is known as the "actively engaged" test.

In essence, the law says one has to be actively engaged in farming to qualify for farm payments.  However, this has been exploited by people who have virtually nothing to do with the farming operation yet receive payments from the farm program.

A Government Accountability Office report which I released in October outlined how the current actively engaged regulations are so broad they are essentially unenforceable.  And those comments came from the USDA employees who administer the programs.  The report illustrated that one farming entity had 22 total members of which 16 were deemed contributing 'active personal management only' to the farm.

What does 'active personal management only' mean?   That means they are becoming eligible for farm programs because of one of the eight overly broad and unenforceable eligibility requirements that currently exist.  More simply put, they likely aren't doing any labor and are nothing more than a participant on paper to allow the entity to get more government payments.

Our nation has over $17 trillion in debt.  We cannot afford to simply look the other way and let people abuse the farm safety-net.

I mentioned earlier how we need to assess some of the challenging areas of farm policy as we look to pass a five year farm bill, and some tough decisions need to be made.

However, my reforms to payment limits do not pose a tough decision.  They are common sense and necessary reforms that are included in both the House and Senate versions of the farm and nutrition bill.

Prepared Floor Statement of U.S. Senator Chuck Grassley of Iowa

"How the Audit Process Was Compromised"

Wednesday, December 11, 2013

Mr. President, I come to the floor today to talk about two important audits that were bungled by the Department of Defense (DoD) Inspector General's (IG) Office.

There is something very important that I need to say right up-front.  A brand new Inspector General, Mr. Jon Rymer, is now in place.  The events I am about to describe happened several years ago.  None reflect on his leadership.

When faced with a frontal assault on its audit authority by the target of one of its audits, senior IG officials got a bad case of weak knees and caved under pressure.  They trashed high- quality audit work that was critical of a certified public accounting (CPA) firm's opinions. In doing this, they covered-up reportable deficiencies.  They allowed the audit target to run roughshod over sacred oversight prerogatives without uttering one word of protest or asking one single question.

I am talking about audits of the financial statements produced by the department's central accounting agency.  This is DFAS, the Defense Finance and Accounting Service.  The audits were conducted by a CPA firm but supposedly under the watchful eye of the Inspector General or IG.

The story of the two bungled audits is told in an oversight report, which is now posted on my web site.

While I received the first anonymous email on this matter in April 2012, my audit oversight work actually began more than five years ago.  It was triggered by a steady stream of tips from whistleblowers, complaining about the quality of those audits.  These reports grabbed my attention.

My colleagues may wonder why the Senator from Iowa is down in the weeds on such arcane issues.  The reason is simple.

Audits are probably THE primary oversight tool for rooting out fraud and waste in the government.  To protect the taxpayers, Congress needs to ensure that government audits are as good as they can be.  They must produce tangible results.  They must be able to detect theft, waste, and mismanagement and recommend corrective action.

With mounting pressure for serious belt-tightening under Sequestration, audits have taken on even greater importance.  Audits should help senior management separate the wheat from the chaff and apply mandated cuts where they belong.  Sequestration cuts should be guided by hard-hitting, rock-solid audits.  Unfortunately, rock-solid audits produced by the Inspector General's Office are hard to come by.

After evaluating hundreds of audits, I issued three oversight reports in 2010-12.  With a few notable exceptions, I found that the Inspector General's audits were weak, ineffective, and wasteful.  Yet they cost $100 million a year to produce.

Poor leadership is part of the problem.

But there is another driver, and that's the department's broken accounting system.  It allows fraud and waste to go undetected and unchecked.  That's bad enough.  But the lack of credible financial information makes it very difficult to produce hard-hitting audits.  Auditors are forced to do audit trail reconstruction work to connect the dots on the money trail.  That is labor intensive and time consuming work.

Although the department continues to spend billions to fix the busted accounting system, it's still not working right.  The department cannot pass the Chief Financial Officers (CFO) Act audit test.  It is unable to accurately report on how the taxpayers' money is spent -- as it is required to do each year by law.  By comparison, every other federal agency has passed the test.

So long as the accounting system is dysfunctional, audits will remain weak and ineffective and the probability of rooting out much fraud and waste during Sequestration is low.

And while I am talking about the need for better audits, I would like to offer a word of encouragement to the Special Inspector General for Afghanistan Reconstruction, John Sopko.  He's the head of SIGAR for short.  Well, SIGAR is cranking out aggressive, hard-hitting audits, and I commend SIGAR for that.

The audits I am about to discuss, by contrast, deserve darts - not laurels.

Mr. President, I first came to the floor to speak on this subject on November 14, 2012.  At that point, I had completed a preliminary review of seven red flags - or potential problem areas -- that popped up on my radar screen.

Since then, I have double checked the facts. I have confirmed my preliminary observations.  I did this by examining the official audit records known as "work papers."

So I will not walk that same ground again today. Instead, I will briefly summarize what I did; how I did it; what I found; why it's important; and offer some fixes for consideration.

To conduct this investigation, I had to examine literally thousands of documents.  I could not have done it without the help and guidance of CPA-qualified government auditors.  Evidence uncovered in the work papers was validated with interviews and written inquiries with knowledgeable officials.  Together, these tell the story of what really happened.  And it's not a pretty picture.

True, my report is nothing more than a snapshot in time.  But if this snapshot accurately reflects the work being produced by the IG's Audit Office, then we have a BIG problem.

In a nutshell, this is what I found:

A CPA firm, Urbach, Kahn, & Werlin (UKW), had awarded an unblemished string of seven "clean" opinions on the central accounting agency's financial statements.  Then the IG stepped in and took a two-year snapshot for FY 2008-09.

It was supposed to report on whether those statements and opinions met prescribed audit standards, but due to a series of ethical blunders, that job was never finished.

A third review was planned for 2010, but after the 2008-09 fiasco, it was cancelled, allowing DFAS to rack up another string of clean opinions through 2012.

Altogether, this work probably cost the taxpayers in excess of 20 million dollars.

The work performed by DFAS in 2008-09 was sub-standard.  The outside audit firm rubberstamped DFAS' flawed practices using defective audit methods.

For its part, the IG was prepared to call foul on the CPA firm for sub-standard work but got side-tracked and then steamrolled by DFAS.

The contract gave the IG preeminent oversight authority to accept or reject the firm's opinions.  The whole purpose of the contract was to position the auditors to make that determination.  If the firm's opinions met prescribed standards, they would be endorsed.  If not, the IG would issue a non-endorsement report.

On both the fiscal year 2008 and 2009 audits, the record clearly indicates the IG's audit team determined that the firm's opinions did not meet prescribed standards.  They did not merit endorsement.  Though I cannot cite work papers to prove it, whistleblowers allege that top management "ordered" them to endorse the 2008 opinion with this caveat.

If known deficiencies were not corrected in the 2009 opinion, a non-endorsement was guaranteed.  Well, when the very same deficiencies popped up again, the auditors prepared a hard-hitting non-endorsement report as promised.  It was signed.  The transmittal letter was ready to go out the door.

The non-endorsement decision had been communicated to DFAS via email in unmistakable terms.  In line with that decision and contract requirements, the IG took steps to cut-off payments to the CPA firm, based on advice of the IG's Legal Counsel.

The next step was to issue the non-endorsement report.  But this is where the IG chickened out.  In a power vacuum, DFAS moved swiftly to block the report with a blatant end-run maneuver to by-pass independent oversight.

DFAS neutered independent oversight by the IG with two bold moves:

-- On the same day the IG's Office notified DFAS in writing that a non-endorsement report would be forthcoming, DFAS unilaterally and "proudly" declared that it had earned a clean opinion and ordered that all disputed invoices be paid.  This was an act of out-and-out defiance.

-- Next it kicked the IG off the contract.  Yes, Mr. President, you heard me right.  The agency being audited literally kicked the IG - the oversight agency -- clean off the oversight contract.

In making this end-run maneuver, DFAS broke every rule in the audit book.

What happened was a frontal assault on the Inspector General's oversight authority.  The frontal assault was mounted by the agency being subjected to audit and by an agency whose financial reports were found to be grossly deficient.  In the face of such outright defiance, I would like to think that any IG would have stood up to the offending agency and held its ground and protected and defended it oversight prerogatives.  But not the DoD IG.

Instead, the IG's knees buckled under the pressure.  The IG retreated before the onslaught. The IG caved and trashed the report.  The IG rolled over and played possum, giving DFAS the green light to proceed full-speed ahead.

And the IG accepted these blatant transgressions without expressing one word of criticism - without expressing one concern - without raising one single question.

Other than a lone Hotline complaint that disappeared down a black hole, no protest was ever lodged.  No corrective action was ever proposed or taken.

The Inspector General's silence appeared to signal total acquiescence to a series of actions that undermined the integrity of the audit process.

For a Senator who watches the watchdogs, what I see here is a disgrace to the entire IG community.  The IG allowed DFAS to run rough shod over the contract, the IG Act, audit standards, and independent oversight.  And the audit firm probably got paid for work that was never performed - payments that were alleged to be improper.

Instead of exposing poor practices and improper actions by both the accounting agency and CPA firm, the OIG allowed sacred principles to be trampled.  It just kept quiet, turned a blind eye to what was going on, hunkered down, and tried to cover its tracks.

Two misguided acts set the stage for the collapse of oversight of these audits.

The problem began with the contract.

At the insistence of the department's Chief Financial Officer and accounting agency, the IG agreed to a contractual arrangement that put DFAS, the target of the audit, in the driver's seat.  This contract allegedly violated the IG Act and standing audit policy, according to an Assistant IG who spoke out at the time.

To address this issue, a fragile "waiver" arrangement was crafted.  It was supposed to address the legal issue and protect OIG interests under the DFAS contract.  All the parties involved agreed to abide by this questionable set-up.

But being nothing more than an informal trust, it came unglued under the pressure and controversy generated by the non-endorsement decision.

Even the OIG Legal Counsel voiced grave concerns about the fragile waiver arrangement.  In his opinion, the terms of contract "transferred" the OIG oversight function to DFAS, the very component whose financial data were being subjected to the oversight.  In his words, the contract terms will leave the OIG "open to criticism on the Hill . . . In two years some Senator will yell at us [for doing this]. If I had known about the arrangement," he said, "I would have advised against it."

The Counsel's concerns were well-founded, and like a modern day Nostradamus, his prediction has come to pass.

The second problem was a failure of leadership at the top.

When the Inspector General's auditors reached the conclusion that the CPA firm's opinions did not measure up to prescribed standards, the current Deputy IG for Audit drove a final nail into the coffin.

The official audit records make it crystal clear.  The Deputy IG gave the fateful order: "there will be no written report."  This was a lethal blow. This is how the report got bottled up.  True, it disappeared from public view.  It got buried, and DFAS was promised it would never see the light of day, that is, until one of my investigators came along and dug it out of a pile of work papers.  And here it is in my hand.

Once the Deputy IG had smothered the report, DFAS knew it had the green light to bypass oversight with impunity.

All this bungling could have harmful consequences.


First, compelling audit evidence, which undermined the credibility of the financial statements prepared by the department's flagship accounting agency, was shielded from public exposure.  The suppression of that evidence has helped to immortalize the myth of DFAS's clean opinions.  It's so bad now the myth is an inside joke.  It's laughable, according to one former accountant.  Here's what he said on the record to McClatchy News on November 22, 2013.  I quote: "When I was there, DFAS would brag about getting a clean opinion. We accountants would just laugh out loud.  Their systems were so screwed up."

If the output of the Defense Department's flagship accounting agency, which disburses over 600 billion dollars a year is, indeed, laughable, then Pentagon money managers have another big problem.  As that famous whistleblower, Ernie Fitzgerald, liked to say: It's time to lock the doors and call the law."

Since the myth involves the reliability of data reported by the department's central accounting agency, it has the potential for putting the Secretary of Defense's audit readiness initiative in jeopardy.  DFAS' apparent inability to accurately report on its own internal "housekeeping" accounts of 1.5 billion dollars casts doubt on its ability to accurately report on the hundreds of billions DoD spends each year.  If the department's central accounting agency cannot earn a "clean" opinion, then who in the department can?

Second, the integrity and independence of the Inspector General's audit process may have been compromised.

If the independence of the audit process was, in fact, compromised as my report suggests, then the department's primary tool for rooting out waste and fraud could be disabled - at least it was in these two cases.

And if that did, indeed happen, then it probably happened with the knowledge and silent acquiescence of senior officials in the IG's office, the institution that exists to root out fraud, waste and abuse.

In simple terms, the watchdog appointed to expose and stop fraud and waste may have been doing some of it himself or herself.  If true, it clearly demonstrates a lack of commitment on the part of senior management to exercise due diligence in performing its core mission.

Almost all of the key players allegedly responsible for the bungled audits still occupy top posts in the IG's Audit Office today.  Surely, these officials did not act alone.  This was a concerted effort.  According to recent news reports, other "higher-ups" were allegedly involved.  But senior IG officials must bear primary responsibility for this unacceptable and inexplicable failure of oversight.  They could have stopped it.

To address and resolve these issues, I made four recommendations in a recent letter to Secretary Hagel and IG Rymer:

First, the DoD CFO should "pull" the DFAS financial statements for FY's 2008 and 2009 and remove those audit opinions from official records.

Second, the OIG needs to undertake an independent audit of DFAS' financial statements for FY 2012 and determine whether those statements and the CPA firm's opinion meet prescribed audit standards. The FY 2012 beginning account balances must also be verified. In response to my oversight, the Inspector General has initiated a "Post Audit Review" of DFAS' FY 2012 financial statements. This is a good move. But to ensure that it is done right this time, I asked the U.S. Government Accountability Office (GAO) to watch-dog the Inspector General's work. I want independent verification cause last time there was none.  This process will be completed next year.

Third, the Inspector General should address and resolve any allegations of misconduct involving DFAS officials and make appropriate recommendations for corrective action;

Fourth, I am referring unresolved concerns regarding the conduct of IG officials to the Integrity Committee of the Council of the Inspectors General on Integrity and Efficiency for further review as provided under the IG Reform Act of 2008.

What happened here, Mr. President, is almost beyond comprehension.

All of it happened under the IG's watchful eye.  All of it probably happened with top-level knowledge.  Most of it probably happened with top-level approval.  Some of it was probably allowed to happen through tacit approval or silent acquiescence.  All of it was bad for the integrity and independence of the audit process and the accuracy of financial information in the government's largest agency.

As I said a moment ago, the department has a new IG, Jon Rymer.  I hope he is a genuine junkyard dog, who likes aggressive, hard-hitting audits.  And I hope Mr. Rymer will take a long, hard look at what happened here and work with Secretary Hagel and others to find a good way to right the wrongs and get audits back on track.  I know he can do it, and I stand ready to help him in any way I can.  Mr. Rymer, my door is open to you.

I yield the floor.

During the tugs of war that crop up in Washington during political debates and policymaking, it's not surprising the act of legislating has often been compared to the art of sausage making.  The give-and-take that has long characterized the legislative meat grinder on Capitol Hill has been put on the chopping block.

Consider an analogy attributed long ago to George Washington. He compared the bicameral functions of the upper and lower chambers of Congress to a cooling saucer and hot coffee.  America's first president suggested the Senate "cools" legislation passed by the more tumultuous House of Representatives.

Skip ahead two centuries and regrettably, heated tempers were not allowed to cool in the deliberative senatorial saucer during a recent rule change in the U.S. Senate.  Instead of cooling his heels, the Majority Leader booted the institutional traditions and decorum associated with the upper chamber of Congress.  His cavalier power grab leaves a stain on the world's greatest deliberative governing body, weakening its tradition for civility and consensus.

Despite the discouraging setback that meddles with the constitutional principles of the Senate's advice and consent authority, important legislative and oversight work continues  as we near the end of the calendar year. Unfinished business includes the budget blueprint and the farm and food bill.

Working under the shadow of a $17 trillion national debt, lawmakers need to come to grips with the fact that Washington cannot tax-and-spend its way to prosperity.  As a member of the budget conference tasked with a Dec. 13 deadline, I want the committee to reach an agreement that will set spending parameters for the federal government through the next fiscal year.  So far, big spenders keep trying to hammer a square peg into a round hole, hooked on a utopian mindset that Big Government can solve all our problems.  Just look where that's gotten us:  unsustainable spending, broken promises and a cynical American public.

Washington also keeps kicking the can down the road on the farm and food bill. Rural America, the nation's food producers and the taxpaying public deserve better, long-term certainty than yet another short-term extension.  This important piece of public policy sets into place farm and nutrition safety nets, conservation incentives and rural development programs.  A big sticking point hinges on how much savings to extract from the food stamp program.  All sides agree enrollment has soared.  The expiring farm and food bill spent 80 percent of its budget on nutrition programs, including food stamps.  In September, 15 percent of the population, or about 47 million Americans, received food stamp benefits.

On the farm side of the spending ledger, I'm championing payment caps that limit how much individual farmers may receive per year.  I'm also working to maintain support for closing a loophole that exploits the taxpaying public.  Currently, general partnerships and joint ventures may qualify for farm payments using "active personal management" guidelines that allow hundreds of millions of tax dollars to flow though this loophole.  The provisions I authored would allow only one off-farm manager to address the abusive practice of multiple non-farming individuals receiving payments without having a significant role in farm management.  It's time to put teeth into the law to keep our farm safety net defensible in an era that calls for serious belt-tightening across-the-board.

If Congress fails to reach an agreement on the farm and food bill, consumers could experience serious sticker shock in January.  Prices for milk could double if current commodity programs expire.  That's because the underlying permanent farm law would trigger the U.S. Department of Agriculture to set the floor price for milk at about $39 per 100 pounds.  Although I'm not serving on the conference committee hammering out the details on a final bill, I'm riding herd on lawmakers to keep the reforms in place that were in both the House- and Senate-passed bills.  It's time to give farmers the certainty they need to make business decisions for the year ahead.

Monday, December 2, 2013

by U.S. Senator Chuck Grassley

As its market share dips, Big Oil is doubling down to swat down its perennial piñata.  This time around, petroleum producers and food conglomerates are using environmental groups as political cover to gain traction on efforts to pull the plug on the Renewable Fuels Standard (RFS).

Despite the ridiculously transparent and self-serving assault by these special interest groups, the relentless campaign to discredit ethanol undermines America's longstanding efforts to diversify its energy landscape, fuel the economy and strengthen national security.

The predictable efforts to smear ethanol's reputation ignore the renewable fuel's valuable contributions to clean energy, rural development, job creation and U.S. energy independence.  The latest round of misguided untruths disregards the plain truth. Ethanol is a renewable, sustainable, clean-burning fuel that helps run the nation's transportation fleet with less pollution.  Yet, critics continue to hide behind distortions that claim ethanol is bad for the environment.

Let's talk turkey and separate fact from fiction regarding ethanol's impact on the environment.

Critics say farmers are putting fragile land into production to cash in on higher corn prices at the expense of soil erosion and clean water.  They point out that five million Conservation Reserve Program (CRP) acres are no longer enrolled in the conservation program since 2008.  They want to pin the blame on ethanol.

First of all, fewer acres enrolled in the CRP has more to do with federal belt tightening than land stewardship decisions by America's corn farmers.  The 2008 farm bill built upon other stewardship incentives for America's farmers and ranchers administered by the USDA, including the Environmental Quality Incentives Program, wetlands restoration and wildlife habitat programs.  According to the Environmental Protection Agency (EPA), no new grassland has been converted to cropland since 2005.

Fact:    The Wetlands Reserve Program in 2012 had a record-breaking enrollment of 2.65 million acres.  WRP lands cannot be farmed for 30 years.

Farmers must make marketing, planting and stewardship decisions that keep their operation financially sound and productive from crop year to crop year.  Even more importantly, these decisions must be environmentally sustainable for the long haul.  Let's be clear.  Farmers simply can't afford not to take scrupulous care of the land that sustains their livelihoods.

Fact:    Fertilizer use is on the decline.  Compare application per bushel in 1980 versus 2010 - nitrogen is down 43 percent; phosphate is down 58 percent; and, potash is down 64 percent.

Fact:    Ethanol burns cleaner than gasoline.  According to the Argonne National Laboratory, corn ethanol reduces greenhouse gas emissions by 34 percent compared to gasoline.  If the oil industry wants to talk about the environment, let's not forget the 1989 Exxon Valdez and the 2010 Deepwater Horizon oil spills.

Critics also say the RFS is driving more acres into corn production.  In reality, the RFS is driving significant investment in higher-yielding, drought-resistant seed technology.  This is a win-win scenario to cultivate good-paying jobs and to harvest better yields on less land.

Fact:    The total cropland planted to corn in the United States is decreasing.  In 2013, U.S. farmers planted 97 million corn acres.  In the 1930s, farmers planted 103 million acres of corn.  Farmers have increased the corn harvest through higher yields, not more acres.

Critics contend the nation's corn crop is diverted for fuel use at the expense of feed for livestock and higher prices at the grocery store.

Fact:    In reality, the value of corn increases during ethanol production.  One-third of the corn processed to make ethanol re-enters the marketplace as high value animal feed called dried distillers grain.  Livestock feed remains the largest end-user of corn.  When co-products such as dried distillers grains are factored in, ethanol consumes only 27 percent of the whole corn crop by volume; livestock feed uses 50 percent of the crop.

Fact:    The USDA Secretary has said farmers receive about 14 cents of every food dollar spent at the grocery store.  And, the farmer's share of a $4 box of corn flakes is about 10 cents.

So what's at stake when a coalition of special interests tag teams to pull the rug out from underneath the nation's ethanol policy?

Unfortunately, these flawed attacks on ethanol and next-generation biofuels undermine America's effort to move forward with an aggressive, diversified energy policy that takes into account global demand, geopolitics and U.S. economic growth.

Friday, November 15, 2013

This week Health and Human Services Secretary Kathleen Sebelius testified in front of the Senate Finance Committee.  As a member of this committee I had many questions for her.  In particular, I questioned the consequences of whether health care plans participating in the Affordable Care Act are subject to key anti-fraud protections.

Secretary Sebelius stated in a letter to a House member that qualified health plans, programs related to the federally facilitated marketplace, and other programs under the Affordable Care Act are not considered federal health care programs.  I questioned whether this means Obamacare programs are not subject to federal anti-kickback statutes and the federal False Claims Act.

Secretary Sebelius argued that the federal exchanges offer plans from private insurers that should not be subject to anti-fraud protections.  This alarms me.  Billions of dollars in subsidies for individuals going to health insurers to join Obamacare are federal tax dollars.  Those dollars should be subject to anti-fraud laws.  Medicare Advantage also offers plans from private insurers and is subject to those same anti-fraud provisions.  I question why the two programs should be treated differently for federal anti-fraud protections.  Both involve direct payments from the government to private health care plans.

I intend to do everything I can to get to the bottom of whether the federal agency in charge of Obamacare will apply every available anti-fraud protection to this program.