Federal Times Blogs

TVA privatization proposal still a live wire

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President Obama’s fiscal 2014 budget request may be moribund on Capitol Hill, but one hot-button proposal buried deep within it appears to be very much alive: Taking a close look at the option of selling off the Tennessee Valley Authority, the government-owned electric utility.

The administration has launched a strategic review that’s delving into issues like “de-federalization,” the implications of a change in TVA ownership for economic development and how to deal with the agency’s assets, according to a rundown of “stakeholder outreach discussion items” provided to FedLine by the International Federation of Professional and Technical Engineers, a union representing about one-fifth of TVA’s some 12,500 employees.

The document, which IFPTE legislative director Matt Biggs said was drafted by the Office of Management and Budget, indicates that an interagency working group overseeing the review is made up of officials from the White House, Treasury Department and TVA.  It is marked “pre-decisional and deliberative,” a tactic often used by agencies to shield records from disclosure under the Freedom of Information Act.

As the administration evaluates “a broad range of options to address TVA’s capital financing constraints,” it is  ”firmly committed to working with TVA’s stakeholders in an effort to better understand and address the interests and concerns of these groups regarding prospective TVA financial strategy alternatives,” the document says.

But in a Friday letter, IFPTE President Greg Junemann said the union got few concrete answers in a call with officials earlier this week. In the letter, addressed to OMB and TVA managers, he sought more information on a dozen points,  including exactly how the strategic review will work and whether any recommendations will be run by Congress.  “In our view, the belief that the TVA’s mission is no longer essential and is somehow linked [to] the fiscal sustainability of the overall budget is ill-advised,” Junemann said in the letter.

OMB spokesman Steve Posner and other agency officials could not be reached for comment late Friday afternoon.

The TVA, headquartered in Knoxville, Tenn., is one of the best-known legacies of the New Deal, with staunch defenders even among the Republicans who dominate Southern congressional delegations. (Yes, FedLine gets the irony.) But it also faces some well-documented challenges. For the record, here’s what the White House said in its FY14 budget request:

“Since its creation in the 1930s

during the Great Depression, the federally owned

and operated Tennessee Valley Authority (TVA)

has been producing low-cost electricity and managing

natural resources for a large portion of the

Southeastern United States. TVA’s power service

territory includes most of Tennessee and parts of

Alabama, Georgia, Kentucky, Mississippi, North

Carolina, and Virginia, covering 80,000 square

miles and serving more than nine million people.

TVA is a self-financing government corporation,

funding operations through electricity sales and

bond financing. In order to meet its future capacity

needs, fulfill its environmental responsibilities,

and modernize its aging generation system,

TVA’s current capital investment plan includes

more than $25 billion of expenditures over the

next 10 years. However, TVA’s anticipated capital

needs are likely to quickly exceed the agency’s

$30 billion statutory cap on indebtedness. Reducing

or eliminating the federal government’s role

in programs such as TVA, which have achieved

their original objectives and no longer require

Federal participation, can help put the Nation

on a sustainable fiscal path. Given TVA’s debt

constraints and the impact to the Federal deficit

of its increasing capital expenditures, the


intends to undertake a strategic

review of options for addressing TVA’s financial

situation, including the possible divestiture of

TVA, in part or as a whole.”


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TIGTA keeping emails under wraps in tax exempt probe

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The highly publicized government watchdog report back in May that found the IRS tax exempt division singled out conservative groups for scrutiny often cited internal emails to help back up those findings.

The Treasury Inspector General for Tax Administration (TIGTA) cited email source material, for instance, in referring to a June 29, 2011 internal briefing paper, which the report said showed how a team of specialists would review any nonprofit applicants with words such as Tea Party or Patriots in a case file.

Democrats have since pointed out that progressive groups faced scrutiny from the IRS, too, accusing TIGTA of cherry-picking evidence. But Republicans say conservative applicants were subjected to more rigorous reviews.

All of which shows that despite partisan disagreements, interest in the report and its methodology remains strong in Washington even now months after its release.

In a recent letter, TIGTA has acknowledged more than 600 pages of email source material that it used to help substantiate just part of a timeline it included in its report.

However, the watchdog office is declining to release even a single page.

TIGTA said in a recent letter that it’s found 656 pages of records in response to a request by Federal Times for emails cited in five pages of the timeline.

However, “we are withholding the documents in full,” the IG noted in a response letter.

You can read a copy of the letter here.

If nothing else, it’s a good primer in some of the sorts of exemptions to the Freedom of Information Act that agencies can and do cite as the basis for shielding records from public view.

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Probe finds personal ties, old injury aided IRS contractor

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A high school  injury nearly three decades ago enabled the owner of a contracting company to claim service disabled veteran status last year, opening the door to contracts worth up to a half billion dollars, a House investigation has found.

Braulio Castillo, owner Signet Computers, which has been renamed Strong Castle, injured his ankle in the fall of 1984 during his year at the U.S. Military Academy Preparatory School, but would later go on to play quarterback and linebacker the next year at the University of San Diego, according to a 157-page report Tuesday by the House Committee on Oversight and Government Reform, which will hold a hearing on the contract on Wednesday.

The report said high school football players recruited to play at West Point sometimes enroll in the prep school for a fifth year of high school to “redshirt” and prepare to play college football. Castillo’s injury happened during an orienteering exercise, and his nine months at the prep school represent the entirety of his military career, according to the report.

Still, 27 years later, soon after Castillo purchased a government contracting company, he filed a claim with the Department of Veterans Affairs seeking compensation for a service disability, investigators found.

Once approved, the disability enabled Castillo’s company access to government set asides through the VA’s Service Disabled Veteran Owned Small Business program.

Castillo told a VA examiner weighing the company’s application for entry into the set aside program about the “crosses I bear due to my service to our great country,” according to the report.

He later told congressional investigators that his injury was debilitating over the years and that he’d had three foot fusions. Had Castillo completed his year at the preparatory school without injury, he wouldn’t have been considered a veteran, but a VA official told House investigators that cadets who are injured at school become a veteran due to the service-connected disability, the report said.

The House report also found Castillo’s newly purchased company had no experience with the IRS last year, but still won lucrative information technology contracts worth up to $500 million, in part, because of its status as a HUBZone contractor and Castillo’s relationship with a top IRS contracting official.

Under Small Business Administration rules, a HUBZone, or Historically Underutilized Business Zone, designation gives contractors an edge in competing for federal work if they’re based in certain economically distressed areas.

The SBA revoked Strong Castle’s HUBZone status in May, but has declined to disclose why, saying the decertification letter contains confidential business information.

The House report, however, said the company provided “inaccurate, unreliable and misleading information” to SBA. In a statement to Federal Times prior to the report, company has said it disagreed with the SBA ruling.

The House probe also found that as Strong Castle sought IT work within the IRS, Castillo turned to a personal friend inside tax agency for advice named Greg Roseman, the deputy director of IT procurement.

The House report called the relationship between Roseman and Castillo “cozy”,

Among thousands of pages of documents, House investigators uncovered dozens of text messages between Roseman and Castillo.

“Text messages … show that Castillo and Roseman had a long term friendship that extended well beyond a professional relationship,” the report said, adding that many of the messages were vulgar.

Investigators also found an email from Roseman to Castillo in February 2012, in which Roseman forwarded along a contact at the General Services Administration, where he had previously worked.

At the time, Castillo was trying to place his company on the GSA Schedule 70.

“I’ve talked to her and she will look into expediting,” Roseman told Castillo, referring to a supervisory contract specialist who “knew that the application was a priority for Greg Roseman,” the report said.

Prior to the report, the Federal Times previously sought to interview Roseman and submitted questions to the IRS, which did not respond. Inquiries to Castillo about his military experience also were not returned.

The company was placed on Schedule 70 after 50 days, while the average wait is 114 days, the report said.

“Greg Roseman’s relationship with Braulio Castillo was invaluable in helping Strong Castle win numerous contracts potentially worth hundreds of millions of dollars,” the report concluded. “Given its limited track record and lack of prime contracting experience in the federal government, Strong Castle likely would not have won the contracts.”

Last year, the Treasury Department named Signet as its small business prime contractor of the year.

Association of Government Accountants honors agency reporting

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Twenty agencies big and small were recently noted for top-notch financial and performance reporting by the Association of Government Accountants.

The “Certificate of Excellence in Accountability Reporting” (CEAR)  singles out “high-quality Performance and Accountability Reports (PARs) and Annual Financial Reports (AFRs) that effectively illustrate and assess financial and program performance, accomplishments and challenges, cost and accountability,” the accountants association said in a news release. The association also spotlights the teams of dedicated federal professionals who (often unsung) put the reports together.

“Given the fiscal status of the United States government and the public’s perceptions about government fiscal accountability and transparency, the achievement of this year’s CEAR recipients is even more significant,” AGA Executive Director Relmond Van Daniker said in the release. The agencies being honored “truly represent a select group within the government financial management community.”

Here’s a rundown of the winners:

Architect of the Capitol
Federal Aviation Administration
Federal Housing Finance Agency
Federal Trade Commission
Office of Financial Stability (Treasury Department)
Peace Corps
Commodity Futures Trading Commission
Education Department
Housing and Urban Development Department
Interior Department
Labor Department
State Department
Treasury Department
Government Accountability Office
Nuclear Regulatory Commission
Patent and Trademark Office
Securities and Exchange Commission
Small Business Administration
Social Security Administration

Also honored at the May 22 National Press Club ceremony were 10 agencies that showed “specific points of excellence” within their fiscal year 2012 PARs. Known as ‘Best in Class’ awards, the recipients included:

Health and Human Services Department: Best Summary of Management and Performance Challenges by the Inspector General
Labor Department: Most Complete Schedule of Spending
Peace Corps: Most Comprehensive and Candid Presentation of Forward-Looking Information
FTC: Best Agency Head Message
HUD: Best Presentation of a Financial Management Systems Framework
Interior: Best High-Level Discussion of Performance
Capitol Architect: Best Analysis of an Agency’s Financial Statements
FAA: Most Representative of Editorial Excellence
Department of Homeland Security: Best Improper Payment and Recovery Act Reporting
Central Intelligence Agency: Best Introduction


The best of “Silver Screen Feds” from movies and television

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Hello everyone,

My name is Andy and if you haven’t guessed it yet, I am one of the reporters here at the Federal Times. For the last few weeks we have had a new feature on our blog, “Silver Screen Feds,” where we look at famous federal employees in cinema and television. This week my partner-in-crime and colleague Steve Losey is spending time with his family, so instead of doing all the work myself, you guys get a clip-show version of everything we have done so far.

Below are each of our entries in the ongoing series, so feel free to read and enjoy them. Post your own suggestions in the comments and let us know what you think.

In our first entry I took a look at the postal workers who save the day in the 1947 classic “Miracle on 34th Street.” And Stephen examined the tragic flaws that brought down the Environmental Protection Agency’s Walter Peck in 1984′s “Ghostbusters.”


Next, we examined a far less-honorable mailman — Newman from “Seinfeld” — and the surprising heroism of Drug Enforcement Administration agent Hank Schrader in “Breaking Bad.”


In our third entry we picked two federal employees who couldn’t be any more different: Dr. Edwin Jenner, the doomed researcher at the Centers for Disease Control and Prevention in the zombie apocalypse show “The Walking Dead,” and Ranger Smith, the hapless National Park Service ranger who can’t stop Yogi Bear from stealing them pic-a-nic baskets.


In our fourth entry we took a trip back to the Roaring Twenties and the lawless days of Prohibition, to look at the best and worst Treasury agents who ever busted up a still on-screen: Legendary lawman Eliot Ness from the 1987 film “The Untouchables,” and deeply disturbed Agent Nelson Van Alden from HBO’s series “Boardwalk Empire.”


And in our latest entry I took a look at the best team of federal employees ever to grace the big screen: Mission control from “Apollo 13.” And keep reading for Stephen Losey’s take on Environmental Protection Agency Administrator Russ Cargill, from “The Simpsons Movie” — the first character we’ve profiled who descends into outright super-villainy.


SILVER SCREEN FEDS: ‘The Untouchables,’ ‘Boardwalk Empire’

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Nelson Van Alden (Macall B. Polay/HBO)

This week’s edition of Silver Screen Feds goes back to the Roaring Twenties and the lawless days of Prohibition, to look at the best and worst Treasury agents who ever busted up a still on-screen: Legendary lawman Eliot Ness from the 1987 film “The Untouchables,” and deeply disturbed Agent Nelson Van Alden from HBO’s series “Boardwalk Empire.”

BEST FEDS: Eliot Ness, Treasury Department, “The Untouchables” (Andy Medici)

How do you take down one of the most notorious criminals in America’s history? How do you capture and convict a man responsible for gang violence, murder and untold corruption?

Why, with a Treasury Department employee of course.

And when your target is Al Capone — especially Robert De Niro playing Al Capone — your only hope is Kevin Costner as a highly stylized and ultimately effective Eliot Ness.

Read the rest of this entry »

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G-Fund again saving the world (temporarily)

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If you have money invested in the Thrift Savings Plan’s G-Fund, take a bow. Your retirement nest egg is now part of a strategy to stave off worldwide financial calamity.

That’s because the Treasury Department intends to intentionally stiff the fund as one of several “extraordinary measures” announced last month to buy time after the government hit its legal $16.4 trillion debt ceiling Dec. 31.

Here’s how it works: the fund—technically known as the Government Securities Investment Fund—is continually re-invested in short-term government bonds. Because those bonds count toward the debt ceiling, Treasury suspends re-investments to free up more borrowing “headroom.” The G-Fund’s balance is currently about $156 billion, making the suspension by far the most significant of the steps now under way to delay a government default that many economists say would trigger a global panic.

The tactic is nothing new; Treasury used it during the last debt ceiling crisis in 2011. But if money is lying fallow, it’s not earning interest. The 2011 suspension temporarily cost the G-fund $378.5 million, the Government Accountability Office reported last year. But by law, the Treasury Department has to make the fund whole.  In its July report, the GAO confirmed that the fund had indeed been “fully restored.”

Understandably, however, feds are nervous. In a message posted on the TSP’s web site, Executive Director Greg Long reiterated that existing law “will work to ensure that G Fund investors are completely unaffected” by Treasury’s tactics. Loans and withdrawals will not be affected, Long added.

[This post has been updated.]

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G-Fund and postal benefits fund made whole, GAO says

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It’s official: The Thrift Savings Plan’s G-Fund is back to full strength after losing almost $400 million courtesy of last year’s debt ceiling showdown.

The confirmation comes from a Government Accountability Office review of the Treasury Department’s maneuvering to head off an unprecedented U.S. default after Congress initially deadlocked over raising the nation’s borrowing limit. The standoff was resolved (at least temporarily) last August with approval of the Budget Control Act, which traded a debt-ceiling increase for spending cuts.

But in the months before the act’s passage, Treasury resorted to a number of “extraordinary actions” to buy time. One involved the G-Fund (officially known as the Government Securities Investment Fund), which is invested in short-term bonds. Because those bonds count against the debt ceiling, the government in May 2011 halted new investments as a temporary means of holding down borrowing. But, of course, if that money’s not invested, it’s not earning interest. Some $137.5 billion in G-Fund principal lay fallow during the 3-1/2 month hiatus. By GAO’ s reckoning, the lost interest amounted to $378.5 million.

By law, however, the government has to make up the difference once the crisis is over. That’s since been done, the review says, as the Treasury Department has “fully restored” the lost interest.

“It’s exactly as if they had never had to use the extraordinary actions,” Susan Irving, one of the report’s authors, said in an interview.

The G-Fund was not the only account touched in this way. The Treasury Department performed similar maneuvers–albeit in smaller amounts–with the Civil Service Retirement and Disability Fund and the Postal Service Retiree Health Benefits Fund. Both have also been made whole, according to the report.

So relax, already. At least until next time.

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The secret federal careers of four famous people

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Federal employees have taken a lot of heat over the last few years. They are called overpaid and underworked. The fight over their pay and benefits has been well documented. But some famous people have had not so famous careers within the federal government. Here are a few.

4. Abraham Lincoln

Yes, yes, I know he was a member of Congress and one of our most famous presidents. But did you also know he was the Postmaster in New Salem, Ill, for almost three years? He became postmaster on May 7, 1833 and lost the position when the post office was relocated May 30, 1836. How did Lincoln get the gig? Well the Park Service says that its uncertain, but might have had something to do with the conduct of the former postmaster.

The women of New Salem were irritated when Samuel Hill, the former postmaster, spent more time serving the men whisky instead of taking care of postal duties. As postmaster, Lincoln was always willing to please customers and would go out of his way to do so.

Abraham Lincoln: Come for the salvation of the country and pick up your mail on the way out.

3. Walt Whitman

All right. Walt Whitman was a famous poet, and many of us read at least some of his work in high school. In fact, there are at least a few schools named after him. But once again, it seems like Whitman had to make ends meet by working for the federal government.

According to the National Archives:

Whitman lived in Washington, DC, for a decade from 1863-1873… To support himself and to help fund his work aiding soldiers, Whitman secured low-level government work–functioning mainly as a clerk, spending much of his time as a scribe or copyist. He worked in the Army Paymaster’s office, the Bureau of Indian Affairs, and the Attorney General’s office.

2. Walt Disney

Mickey Mouse, Goofy, Donald Duck and others. Walt Disney created a gigantic media empire that spans the gambit of amusement parks, new stations and even ESPN. He won dozens of Oscars (animated shorts category) and his empire was so powerful, it literally spun off other famous people. Just the Mickey Mouse Club alone helped give rise to Justin Timberlake, Britney Spears and Christina Aguilera.

But before all that, Walt Disney was a substitute mail carrier in Chicago, Ill.

I would use a picture here, but for copyright purposes I will let you imagine a Disney picture of some sort.

1. Dr. Seuss

Ok. So we are down to No. 1, and who can possibly top everyone else on the list? Well, Theodor Seuss Geisel at least comes close. He brought us the Cat in the Hat and The Lorax, and dozens more. His work is so well known that you can call someone a Grinch and they will know exactly what you mean. His works have been translated into more than 15 languages and has sold more than 200 million copies.

They are still making movies based off of his work.

But Dr. Seuss was employed by the Treasury Department in 1942 to make illustrations for the war effort. He joined the Army in 1943.

Note: I did not add Julia Child to the list because her federal career as a spy is very well known.  Or at least not a big secret anymore.

But if anyone else knows of more secret federal careers of more famous people, just add them into the comments.

Treasury headquarters attains LEED Gold certification.

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The Treasury Department announced today that their headquarters has attained LEED Gold certification by the U.S. Green Building Council. Gold is the second-highest rating.

The building was made more energy and water efficient, resulting in a 7 percent decrease in electricity use and a 53 percent decrease in steam use over 2008 levels.

“The fact that the home of much our nation’s financial history has achieved this distinction for environmental leadership adds new meaning to the term ‘green’ building,” said Assistant Secretary for Management Dan Tangherlini. “We’re proud of the improvements we’ve made around the Treasury Building – both big and small – to help reduce our environmental footprint and save taxpayer dollars.”

The Treasury Department also squeezed in 164 additional workstations for federal employees.

The Treasury Building, which is located at 1500 Pennsylvania Avenue, is more than two city blocks long and serves as the headquarters of the Department. It was constructed over a period of 33 years between 1836 and 1869. The east and center wings – which comprise the oldest portion of the structure – were designed by Robert Mills, architect of the Washington Monument, and were built between 1836 to 1842.

The Treasury Building is the third-oldest federal building in Washington D.C., after the White House and the U.S. Capitol, and was named a National Historic Landmark in 1972.