My name is Thomas A. Schatz and I am president of Citizens Against Government Waste. CAGW is a 501c (3), private, nonprofit, nonpartisan organization dedicated to educating the American public about waste, mismanagement and inefficiency in the federal government. CAGW was founded in 1984 by J. Peter Grace and nationally-syndicated columnist Jack Anderson to build public support for implementation of President Reagan’s Private Sector Survey on Cost Control, better known as the Grace Commission. CAGW currently has more than one million members and supporters. Since 1986, CAGW has helped save taxpayers more than $687 billion. CAGW does not receive any grants from the federal government. I appreciate the opportunity to provide testimony before this subcommittee today.

By way of background, I was the legislative director for six years for the late Rep. Hamilton Fish (R-N.Y.), a former ranking member of the Judiciary Committee. During that time I worked on reauthorization of the Voting Rights Act of 1982, the Voting Accessibility for the Elderly and Handicapped Act in 1984, and the Fair Housing Act.

I am personally familiar with the fine work of the Civil Rights Commission, but I have become disillusioned that the commission today appears to be more political and less bipartisan. Partisanship can undermine the morale of staff and distort the conclusions of the commission’s studies and reports. Regardless of how and when this partisanship began, it is important for commissioners to cooperate with each other, and for the commission and this subcommittee to cooperate with each other. This is necessary so that the commission can focus on its stated mission and purpose and the committee can properly conduct its oversight role.

As you know, the United States Commission on Civil Rights was established in 1957 as a result of the Civil Rights Act. It is supposed to be an independent, bipartisan fact-finding agency within the executive branch. Its two main goals are to investigate claims of voting rights violations and studying and disseminating information on civil rights laws and policies.

The commission has eight part-time commissioners and a staff director that oversees civil servants that run the day-to-day operations. Of the eight commissioners, four are appointed by the President of the United States, two by the Speaker of the House and two by the President pro tempore of the Senate. Commissioners serve six-year terms and the President may remove a commissioner for “neglect of duty” or “malfeasance in office.”

In 1996, in preparation for the commission’s reauthorization and because of complaints of mismanagement, the General Accounting Office (GAO) was instructed by the House Judiciary Subcommittee on the Constitution to conduct a review of the civil rights agency. The GAO was asked to provide information on the commission’s management of projects during fiscal years 1993 through 1996 and its process for disseminating project reports to the public.

In July of 1997, even though the GAO focused its review on the management of individual projects, it found much broader management problems at the commission. GAO found the agency in disarray, with limited awareness of how its resources were used. For example, GAO discovered:

· Agency policies and procedures were unclear and it had no documented organization structure available to the public that described its procedures or program processes;

· Key records, which provided documentation about its operations and project management, were misplaced, lost or nonexistent;

· Commission officials could not provide the amount or percentage of the budget used by various offices or functions;

· Management controls over operations were weak and did not ensure that statutory deadline responsibilities or program objectives were being met;

· Projects appeared to account for only about 10 percent of appropriations, even though these projects addressed a number of civil rights issues, and projects were poorly managed and took years to complete;

· Project management guidance – the Administrative Manual – was out of date and largely ignored; and

· Three different offices disseminated project reports, but a lack of coordination among the offices created a high risk of duplicative work.

The GAO concluded that the commission and its operations lacked order, control, and coordination. It found that management was unaware of how federal funds – taxpayer hard-earned dollars – were being used. It further concluded that these deficiencies made the commission vulnerable to “misuse of its resources” and that a “lack of attention to basic requirements applying to all federal agencies, such as up-to-date descriptions of operations and internal guidance for employees, reflects poorly on the overall management of the commission.”

The GAO recommended that the commission develop and document policies and procedures that assign responsibility for management functions to the staff director and other commission officials and provide mechanisms for holding those people accountable for properly managing the day-to-day functions of the agency.

Unfortunately, recent press reports indicate that perhaps the agency is still having serious management problems. An article in Time discussed how its hotline for reporting hate crimes or discrimination in the wake of September 11 “began as a joke and ended as a potential tragedy.”

As I understand it, a hotline already existed but instead of using that one, the commission created a new one. Obviously the staff didn’t do a thorough check to see if it would work properly. The article points out how the initial press release listed the wrong 800 number, sending callers not to the commission but to a love connection service.

Even more disturbing, once the calls did come in, according to a letter from the Department of Justice (DOJ) Assistant Attorney General Ralph Boyd, the commission did not forward the information to DOJ. This made it impossible for DOJ to follow-up and investigate the complaints. Frankly, a hate crime is a crime and not just a civil rights issue. All crimes need to be followed up by the appropriate law enforcement authorities.

Furthermore, we were disappointed with Chairwoman Mary Frances Berry’s remarks at an October 12 commission meeting concerning the botched hotline. She said, “People around the country have expressed their gratitude, so I think we ought to be proud that we’re doing this rather than worrying about whether it’s helping anybody.”

The Washington Post has also criticized the agency, most recently on February 11 of this year. It said the commission has become nothing more than a partisan battleground.

For example, instead of issuing highly politicized and controversial reports, such as the one on the Florida election that contributed little to the debate on civil rights, the Post suggested that the commission might examine how various counter-terrorism policies are affecting Arab-Americans and what alternatives might mitigate that effect. The Post also said the commission might review how alternatives to university affirmative action programs have worked. Yet, the Post stated, “the commission’s forays in these areas have been unimpressive.” The Post noted that the only function of the commission is “to inform and elevate the debate. If it cannot do this, it is not worth having. It is certainly not worth spending $9 million of public money each year to inflame passions further.”

CAGW is concerned about the recent reports concerning the commission’s $135,000 in payments in 2000 to the public relations firm of McKinney and McDowell, while the agency still maintains its own public affairs office that pays employees at a total of $208,537 a year. According to a purchase order, senior staff at McKinney receive $200 an hour, while associate staff receive $150 an hour for their services. Yet, as we understand it, there is still no director in the commission’s public affairs office in spite of the fact that several eligible applicants applied for the position, and the deputy director recently left.

We are also disturbed about the change in the contract between the commission and McKinney. The original contract called for McKinney to respond and represent the commission, but it was later amended so McKinney’s services would only respond to the chairwoman. Certainly, while the chairwoman has the right to speak for the commission, all commissioners should be available to the media. In addition, commissioners sometimes do not receive copies of press releases until days or weeks after they are issued. This is inexcusable.

The commission’s staff director has argued that the agreement for McKinney is for contracted services, not consulting services, and therefore the commission’s $50,000 limit on consulting services would not be applicable. Regardless of characterization, it is highly unusual for a federal agency to hire a private firm to handle their public relations. When it is done, it is usually for a special project that has a limited life span.

Other agencies do not do this on a regular basis. In a recent Scripps Howard column, public affairs directors in other agencies were asked about hiring outside assistance. Dave Grinberg, a spokesman at the Equal Employment Opportunity Commission said, “We’re a small agency. We have a small budget, and we don’t have the money to throw around like that.” Timothy McGrath, staff director of the U.S. Sentencing Commission, said his agency appropriations do not allow him to hire public-relations consultants, and Claudia Bourne Farrell, a spokesperson for the Federal Trade Commission, stated her agency does all their press work: “We do all of it ourselves. We take the bullets like the men we are.”

Hiring a private firm such as the Civil Rights Commission has done is an expensive proposition and appears to be a waste of tax dollars. Two full-time government public affairs employees could be provided for a full year for the sum of $135,000. It is also our understanding that calls from the public affairs office are now being directly routed to the staff director’s office. One purpose of a public affairs office is to screen calls, provide whatever information they can, and only pass on the calls that require the director’s input. To do otherwise is a sign of poor management and wasted resources.

CAGW has other concerns regarding the commission’s management structure and its ability to provide key records. CAGW has been made aware that some commissioners felt the need last year to file Freedom of Information (FOIA) requests to obtain documents and computer disks concerning the commission’s report on the Florida election. On attempting to access these documents, questions were raised about the guidelines and the relationship between individual commissioners, the chairwoman and the staff director. Whatever the guidelines are or should be, sitting commissioners should not have to feel the need to file a FOIA request to obtain information on any activities or documents within the commission.

Regarding how this commission is being managed, there are disputes among the commissioners and between this subcommittee and the commission. The commission may be independent, but that doesn’t mean it can be unaccountable. The president’s budget calls for accountability and the taxpayers demand it.

It is our understanding that there has been a series of letters between the commission and this subcommittee. There are questions and disputes over whom said what and whether progress has been made since the last GAO audit. The best way to solve this problem is for the GAO to conduct another impartial audit of the commission to see if its original recommendations have been implemented and to determine whether there are other management or personnel issues that need to be addressed.

For example, we suggest the GAO discover if:

· The commission has updated its agency policies, procedures and organizational structure and whether such information is available to the public;

· The commission can provide key records on its operations and management in a timely manner to Congress, the commissioners or the public;

· The commission knows how its budget is spent and in what departments;

· The commission has an updated Administrative Manual and whether it is kept current;

· Projects are better managed and completed in a timely manner, as well as their costs;

· The commissioners are aware of ongoing projects, including their costs, time frames, staff involved and when the reports will be completed;

· The commission has been able to better coordinate dissemination of their reports; and

· The commission works closely with civil rights offices that are located in all federal agencies, as well as whether this work is redundant.

It is our understanding that the commission has asked for a 66 percent budget increase. At a time when all federal expenditures are being prioritized to meet the country’s need to win the war on terrorism, we believe this should not be granted. In addition, no increase in the budget should be appropriated until another investigation by the GAO is undertaken. It is important to see whether the commission has implemented the recommendations the GAO made in 1997 and what needs to be done to address any new management inadequacies.

The U.S. Commission on Civil Rights’ past history is rich and purposeful. But, no matter how large or small an agency, no matter its mission, taxpayers expect their money to be spent in an efficient and orderly manner with timely and tangible results from that investment. While the chairwoman talks about accountability to the commission’s constituents, the commission must also be accountable to taxpayers.