Cooked books, concealed reports, phony PR; gov't is like private business

Tuesday, August 01, 2006 at 06:30 PM

For most of my lifetime, there has been a segment of the population that wanted to know "why can't the U.S. government be run like a private business?"  Well my super-capitalist friends, good news!!!!! It damn well is.

The Bush government's use of phony news to advance its PR points has been well documented.  So have the government's censorship of scientific news that it found inconvenient or--cover your ears, my valiant CEO--contrary to policy.  Both tactics are well entrenched in modern business.  Then of course there's Duke Cunningham, Bob Ney, Tom DeLay and many others who have managed to slip themselves just a little bit extra from the--ahem--petty cash drawer, not unlike the currently brewing double scandals of the corporate world: (1) having CEO-friendly entities decide what the CEO's pay should be and (2) backdating executive stock options so that the executives make the most possible money off them without having to endure even the slightest risk.

Now we've got two more American government doozies that just reek of American corporate sleaze-think:

1. The Republicans kept a government report on the harm from outsourcing from prying public or Democrat eyes for a long time

From Manufacturing & Technology News (emphasis added):

Commerce Department Report On Offshore Outsourcing Finally Sees The Light Of Day

After nearly two years, Manufacturing & Technology News has obtained a copy of the elusive Commerce Department report on offshore outsourcing of high tech jobs in the information technology, semiconductor and pharmaceutical industries. The report, which was required by an Act of Congress, was to be submitted to Congress in July 2004. But it was never released, due to fears within the Bush administration that the controversial subject would hurt the president's re-election campaign. Senior officials in the Bush administration, including the head of the Council of Economic Advisors, had publicly embarrassed the Bush team with cavalier statements describing offshore outsourcing of high tech jobs as being good for the U.S. economy.

The $335,000, 336-page report obtained last week never saw the light of day. Manufacturing & Technology News submitted a Freedom of Information Act request to the Department of Commerce on March 17, 2005, seeking release of the study, but that request was denied. Eventually, what was produced and provided by the Commerce Department in September 2005 was a 12-page document bearing a July 2004 publication date that bore little resemblance to the work done by analysts at the Technology Administration, all of whom have recently been told they will be laid off due to severe budget cuts for the agency and the issuance of a reduction in force (RIF).

Although that 12-page report (at $28,000 per page) was provided to MTN and Congress, it was not made available to the public and an electronic copy has never been posted on the Commerce Department's Web site. That summary put a positive spin on offshore outsourcing and includes analysis written by political appointees that was not in the original work.

Democrats on the House Science Committee asked for a copy of the full report in October, 2005, but the Commerce Department denied that request on a specious Freedom of Information Act legal claim that only the political party in power in Congress could require the document's release.

After Republicans on the Science Committee acquiesced to Democrats' demands, the Commerce Department provided Congress with the full document, a copy of which has been provided to MTN.

That document is quite different from the original 12-page summary, and it is apparent why Bush's political appointees so vehemently refused its release. The administration "was scared of anything having to do with outsourcing," says one source who is familiar with the report's travails. The Bush team "could not afford even a discussion" of the outsourcing issue.
The 360-page version of the report describes the types of IT services and software jobs that are being outsourced. It states the obvious: that Indian outsourcing companies "are expanding staff annually by the thousands." The report describes the reasons for the trend including the fact that "venture capitalists are now encouraging U.S. IT start-ups to use lower-cost offshore destinations for software development to reduce the 'cash burn rate.' "

The report states that there is "growing pressure in corporate America -- from customers, consultants, and financial markets -- to offshore IT work, as well as growing external and political pressure to stem the flow of American jobs going overseas."

Yet the report also highlights the fact that the impact on U.S. competitiveness "appears to be negligible."

The full report that wasn't released also contains a long (and sobering) section on the shift of the U.S. semiconductor industry to offshore locations. Again, the 12-page Bush administration release differs markedly from the one the Commerce Department quashed. It states that U.S. semiconductor companies "are hiring more engineers overseas than in the United States" due to their need to "reduce labor and operations costs and serve the growing customer base in Asia."

In the long term, the U.S. risks losing high-end R&D and design jobs because, as semiconductor fabs move to Asia, high-skilled jobs move with them, states the report.
...It further states that, "the number of engineers employed offshore by U.S. semiconductor companies rose by more than 10,000 between 2000 and 2003, while engineers employed in the United States dropped by 4,000 during the same period, according to estimates by the Semiconductor Industry Association."
The unreleased report provides a comparison of the average annual pay for global software workers: United States: $63,000 Japan, $44,000 Canada: $28,174 Indonesia: $12,200 Thailand: $11,124 Russia: $7,500 Philippines: $6,550 Poland: $6,400 Hungary: $6,400 Pakistan: $4,860 China: $4,750.

2. The United States Agency for International Development (A.I.D.) played a shell game to hide the actual costs, and the cost overruns, of Iraq reconstruction projects.

From a NY Times piece (emphasis added):

The State Department agency in charge of $1.4 billion in reconstruction money in Iraq used an accounting shell game to hide ballooning cost overruns on its projects there and knowingly withheld information on schedule delays from Congress, a federal audit released late Friday has found.

The agency hid construction overruns by listing them as overhead or administrative costs, according to the audit, written by the Special Inspector General for Iraq Reconstruction, an independent office that reports to Congress, the Pentagon and the State Department.

Called the United States Agency for International Development, or A.I.D., the agency administers foreign aid projects around the world. It has been working in Iraq on reconstruction since shortly after the 2003 invasion.

The report by the inspector general's office does not give a full accounting of all projects financed by the agency's $1.4 billion budget, but cites several examples.
The United States Embassy in Baghdad referred questions about the audit to the State Department in Washington, where a spokesman, Justin Higgins, said Saturday, "We have not yet had a chance to fully review this report, but certainly will consider it carefully, as we do all the findings of the inspector general."
In another case cited in the report, a power station project in Musayyib, the direct construction cost cited by the development agency was $6.6 million, while the overhead cost was $27.6 million.

One result is that the project's overhead, a figure that normally runs to a maximum of 30 percent, was a stunning 418 percent.
In a letter responding to the inspector general's findings, Joseph A. Saloom, the newly appointed director of the reconstruction office at the United States Embassy, said he would take steps to improve the reporting of the costs of reconstruction projects in Iraq. Mr. Saloom took little exception to the main findings.

In the letter, Mr. Saloom said his office had been given new powers by the American ambassador in Baghdad, Zalmay Khalilzad, to request clear financing information on American reconstruction projects. Mr. Saloom wrote that he agreed with the inspector general's conclusion that this shift would help "preclude surprises such as occurred on the Basra hospital project."

"The U.S. Mission agrees that accurate monitoring of projects requires allocating indirect costs in a systematic way that reflects accurately the true indirect costs attributable to specific activities and projects, such as a Basra children's hospital," Mr. Saloom wrote.

I ask you: how much more corporate could you get?  Lay & Skilling would be proud.  Kozlowski would smile while expensive ice statuary urinated cool, liberating water with corporate funds.  I dare say even Michael Milkin would feel a sense of pride as he read the stories of deceit, self-dealing, and crapping on the citizenry.

So shut up already about running the government like a private business.