Wednesday, February 1, 2012. Chaos and violence continue, the political crisis continues, Iraq executes 17 people, the VA plays Abbot & Costello while testifying to -- or babbling before -- Congress, and more.
"Time and time again," declared Michael Michaud this morning, "VA comes up here and testifies that it has wonderful policies in place. Unfortunately no one ever seems to follow these policies and procedures and they seem to be no consequences for the failure to follow these procedures."
He was speaking at a House Veterans Affairs Committee hearing which Chair Jeff Miller explained in his opening remarks, "I want to thank everybody for coming to hearing today entitled 'Examining VA's Pharmaceutical Prime Vendor Contract.' We started investigating PPVs and the contract well before the story on this hit the press and we found enough that questions were raised to warrant the hearing that we're going to hold today and possibly subsequent hearings in the future. Now a PPV contract, when written and executed correctly, is intended to ensure VA receive the needed medical pharmaceuticals at a competitive price and in a timely fashion. Medical facilities throughout the nation rely on this system to ensure that the patients get the best care. That the veterans get the best care that they need. they deserve and they've earned. The Committee's investigation began when discrepancies appeared in how VA ordering officials had been handling open market purchases of items not available on the PPV contract. These purchases go back much further than just the last year or two. In fact, they span multiple administrations showing many within VA chose to ignore whether than fix a problem they knew about."
Appearing before the Committee on the first panel was the Deputy Secretary of Veterans Affairs W. Scott Gould (accompanied by the VA's John R. Gingrich, Glenn D. Haggstrom, Jan R. Frye, Philip Matkovsky, Steven A. Thomas and Michael Valentino), on the second panel the Deputy Assistant Inspector General for Audits and Evaluations Office of Inspector General's Linda Halliday (with Mark Myer sand Michael Grivnovics) and on the third panel McKesson Corporations' Vice President on Health Systems' Sharon Longwell.
This was a hearing where first panel witnesses tossed around terms and words that were unfamiliar -- US House Rep and Dr. Phil Roe would stop a witness at one point and tell him no one understood what he was saying. And the issues could get complicated. So what you need to remember on this is that there are guidelines the VA must follow on ordering. Those guidelines exist for many reasons. The three primary reasons are (1) safety of the veterans, (2) ensuring that the government gets the best price possible, and (3) ensuring that cronyism or kickbacks are not taking place as the VA invents its own rules (or disregards those in place).
US House Rep Bob Filner is the Ranking Member of this Committee. He was not present at the hearing and Michaud served as the Ranking Member. He declared in his opening statements, "The VA admits that it did not follow all applicable laws and regulations for approximately 1.2 billion dollars in what was called Open Market Drug Purchases since 2004. VA assures us that changes have been implemented to fix deficiencies at hand. Frankly, Mr. Chairman, we've heard this before."
There was a lot of justifying and minimizing by the VA and, as Michaud noted, the claim that Congress need not worry, that the VA had already fixed everything on its own. Gould insisted that what took place "was not criminal and at no time were our veterans at risk." Miller asked him, "Is this a violation of the law?" Gould replied, "Yes."
Chair Jeff Miller: [. . .] When did senior leadership first learn of the unlawful purchasing? And I'd like to ask each individual at the table independently to let me know when you first heard about it and what you specifically did when you heard about it?
W. Scott Gould: Sir, to be responsive on that question, then each of us you will answer that. What you will see is a range of dates as the problem escalated through the system. To answer personally for the senior management team, I first knew about this issue in September of last year, September of 2011.
Chair Jeff Miller: And we'll start down here, Mr. Valentino?
Michael Valentino: I became aware of the issue with Open Market Purchases in December of 2010 when the clause was removed from the draft solicitation.
Philip Matkovsky: I became aware in September of 2011.
John Gingrich: I became aware in September of 2011.
Glenn D. Haggstrom: With respect to the improper use of the Open Market Clause, I became aware of it in March 2011.
Chair Jeff Miller: When did you hear about the illegal use?
Glenn D. Haggstrom: March of 2011.
Jan R. Frye: I became aware in March 2011, March 29th, to be exact.
Steven A. Thomas: And I became aware in January of '09 when a Logistics Manager from the CMA* identified this as an issue. At that point, I worked with general counsel, acquisition review, IG, other at the NAC [National Acquisition Center], VHA including PBM and the CMA to try to correct the issue for the CMA which we became responsible for at the National Acquisition Center in December of '08. I tried to add items to the federal supply schedule as much as possible to cover that gap. I tried to have additional things put on requirements, types of contracts, that we had limited success on. But the main thing I did was, I corrected the issue for the CMA. So the CMA follows appropriate procedures at that point. And that was the area of responsibility that I had.
W. Scott Gould: So, Mr. Chairman, today you've gone down the list to see what people knew, when they knew. The people at the table today collectively identified the problem, took action and we are collectively responsible for-for that fact.
Chair Jeff Miller: Mr. Thomas, you took great pains a second ago to talk about all the things that you tried to do. Can you explain why you were unable to do some of the things you wanted to do? Could you turn your mic on too, please?
Steven A. Thomas: Apologize. Yes, sir. I think what we have in this case is a changing industry to a certain degree. There are -- as you probably are aware, there's a lot of drug shortages that are currently going on right now. Uhm, there's the Trade Agreements Act that we have to be responsible for to make sure that products are coming from responsible countries and a lot of the manufacturing for drug -- for drugs right now are going overseas to India and China and those two countries are not trade agreement countries. So there's a number of issues going through there when we put our requirements contracts out for some of the generic products, we are able to award about a third of them as they came through. It didn't stop our efforts in that but it made us try to figure out how we could get more products on contract.
Thomas never shuts up. [*And I have no idea if he was saying CMA or what. He pronounced the term various ways throughout the hearing. I don't know it.] He offers a lot of blather about what he did for someone who broke the law. Miller wanted to know "how much was spent illegally after the 8th of November" 2011. Gould gave a response about how they didn't want the veterans to suffer. So Gould is arguing not only that the law was broken but that it was knowingly broken by the leadership composing the first panel. He went on for over two minutes and then swapped to Matkovsky and neither ever answered Miller's question as to how much was spent from November 8, 2011 through the end of the year?
Chair Jeff Miller: I apologize Mr. Secretary if I didn't hear you, but did you give me a number for what money was spent?
Philip Matkovsky: Two numbers. The first number for the month of December which we are still analyzing is roughly 1.4 million [dollars]. The total number of transactions which we are reviewing for ratification is 5,733 transactions.
Miller pointed out that this wasn't just about drugs, the spending. Gould admitted this was true.
Michaud asked if they had waivers for "the 1.2 billion in open market purchases dollars dating back to 2004" which led Gould to insist he needed to consult with the witnesses at the table followed by Frye stating, "Sir, I'm not familiar with your question. Waiver for what again?" Michaud attempted to jog their memories, "Waiver request for Open Market Purchases, that's required under the handbook." Still the panel was baffled by what he was talking about. Michaud then had to cite the rule specifically ("That's 7408.1") at which point it was immediately agreed that Michaud knew what he was talking about. But the waivers? Haggstron stated, "I'm not aware of any waivers."
The dummy up and pass the issue around was used repeatedly. So much that you might think they were trying to run out the clock on Michaud's questioning time.
US House Rep Phil Roe would ask a basic question, one that the witnesses should have known the answer to before they arrived at the hearing, "My second question is are there any penalties -- I know this is civil, not criminal -- but are there any penalties for the people who knowingly broke this law?"
The witnesses were unable to answer the second question and an attorney for the VA stood up and declared that "there are no penalties attached or sanctions attached." Had the VA fixed the problem -- as they claim -- and had they addressed it, then surely these seven VA leaders would have discussed whether or not criminal charges needed to be brought. The fact that they didn't know the answer indicates they never asked that question which would lead many to believe that they were only focused on damage control and not addressin the issues involved.
They played idiots very well. At one point, Chair Miller would ask them if they were aware, as they offered some interesting statements, that the Committee would have the documents in their possession and that a subpoena had been issued?
That would seem a rather basic question. But Gould especially (though not only) wanted to insist that there was no subpoena. He said there were Freedom of Information requests but no subpoena and wanted to argue this with the Chair.
Even after the Chair stated that US House Rep Darrell Issa issued the subpoena on January 19th (his Committee,on Oversight and Reform), they wanted to insist there was no subpoena. Then they wanted to add, maybe there was one, but it had not yet been received. After this ridiculous scene seemed in danger of never ending, "Counsel appears to be nodding to us that a subpoena has been issued." So, yes, there was a subpoena and that, yes, it had been received.
Again, the seven leaders at the table should have known that. Appearing before Congress to testify about records that the Congress is subpoenaing should be known. This group of leaders appeared completely disinterested in the topic being explored and not at all concerned about meeting oversight obligations.
"We need to fix this," Thomas said was the response in 2009 when the issue was first known (at least first known among the witnesses). "And we didn't fix it until recently?" Chair Miller asked. He received nothing resembling an answer.
Gould insisted that the 7 at the table (including himself) had identified the problem and "we addressed it in six weeks."
Chair Jeff Miller: Is it your testimony that the time frame between January of '09 and today is six weeks?
W. Scott Gould: No, Mr. Chairman, as I said a moment ago when you went down the list of folks here, when did senior management know? And I have testified that I knew in September. And by November 8th, the problem was solved.
Chair Jeff Miller: Does it bother you that you have somebody sitting at the table that knew of the issue in January '09 and you -- or somebody at that table -- did not know?
W. Scott Gould:Sir, of course it does and as I have testified that is a problem for which we are collectively responsible and accountable. I am very unhappy with this risk up the chain of command. All I'm saying is, that it did not happen and when it did it was absolutely solved by this team. We got together and resolved the issues and came up with a clear course of action to fix the problem.
But as Miller pointed out, the problem was known by at least Thomas in 2009. So, no, the issue was not dealt with in six weeks. As for taking accountability, a resignation or two would indicate that accountability was being taken. Instead, they want to pretend that the violation of the law doesn't matter because it's not criminal. And they want to pretend that taking nearly three years to address the situation after leadership first learned of the problem can be passed off as six weeks. There's no accountability, there's not even any honesty.
In Iraq, the political crisis continues and this crisis was created by the White House when they overruled the will of the Iraqi people who voiced their preference in the March 2010 elections. The Constitution was quite clear on what happened next. But the White House was equally clear and much louder on the fact that they wanted Nouri -- whose political slate came in second to Iraqiya -- to remain prime minister. With the White House backing, Nouri was able to bring the government to a standstill for 8 months (Political Stalemate I). Without White House support, the Constitution would have been followed and Nouri would not be prime minister. In November 2010, the White House had polical parties meet in the KRG and hammer out an agreement that put into writing a great deal of the White House's promises. They'd long asked Ayad Allawi (leader of Iraqiya) to step aside and allow Nouri to be prime minister. They promised him that, in doing what was 'best' for Iraq, Iraqiya would also head a newly created and independent national security council. The Kurds were also promised many things. The main thing for Nouri was he got to remain prime minister. All parties signed off on this agreement. The next day, Parliament met and President Jalal Talabani named Nouri prime minister (unofficially -- he'd name him prime minister 'officially' later in the month to give him over 30 days to form a Cabinet -- the Constitution requires you do it in 30 days or the president names a new prime minister-designate). Nouri loved the Erbil Agreement. Loved it. Until he was named prime minister-designate. Then he was no longer interested in it.
He blew it off. This is the current Political Stalemate II. The crisis begins in the dying days of summer when the Kurds have had enough and begin demanding that the Erbil Agreement be followed. Their patience exhausted, they begin floating various scenarios. Among other things, the Kurds want the issue of Kirkuk resolved. That's not an unreasonable request. Not only were they promised in the Erbil Agreement that it would be resolved, but when the Constitution was written in 2005, Article 140 demanded that the prime minister hold a referendum to resolve the issue of Kirkuk by the end of 2007. The first prime minister after the Constitution was written was Nouri al-Maliki. He became prime minister in April 2006. He refused to follow the Constitution. He forever had an excuse and it wasn't the right time or it will be addressed in the near future. He's now been prime minister since 2006, the Constitution compells him to resolve the issue of Kirkuk (and states how, take a census, take a vote) and to do so by 2007. He has repeatedly refused. He is forever in violation of the Constitution.
And yet every time the White House backs Thug Nouri who runs torture chambers and secret prisons, whose forces physically attack journalists and demonstrators, this is who the White House -- under Bush before, under Barack now -- has backed.
It is important to understand what actually happened this week. Iraqiya ended its parliamentary boycott but not its boycott of meetings of the Council of Ministers. The parliament is due to consider Iraq's annual budget, and the Iraqi leadership felt it would be disastrous for their party and the communities they represent if they were not present to ensure that they received their fair share of Iraq's governmental pie. Iraqiya has not ended its ministerial boycott of Council of Ministers meetings, with the result that its ministers are still under suspension by Prime Minister Nuri al-Maliki, and it has threatened to withdraw from the parliament again if the prime minister does not end his attacks on them.
It was Maliki who provoked the current crisis with his assault on Iraqiya, in several instances employing unsavory and even unconstitutional acts to do so. If he is willing to make some concessions to Iraqiya, it might be possible not just to defuse the current crisis but also to begin a larger process of compromise and national reconciliation that could start addressing the problems in Iraqi politics that gave rise to this crisis.
Unfortunately, the prime minister appears to see Iraqiya's decision as a victory--he outlasted them, broke them, forced them rejoin the government without getting anything that they wanted. Indeed, Maliki has shown no sign of relenting, although he and his allies did tone down their rhetoric in recent weeks. But the prime minister has continued to fire and arrest senior Iraqiya leaders, insist that the Kurds hand over Vice President Tariq al-Hashimi for trial--despite charges that the warrant for his arrest was based on confessions induced by torture--and steadfastly refused to agree to a national conference to resolve the current impasse as proposed by Kurdish leader Massoud Barzani and accepted by the Iraqiya leadership. Although the Kurds have their own differences with Iraqiya and the Sunnis (and their own reasons for wanting to reconcile with Maliki), they see the prime minister's actions as "final proof" that he is determined to make himself a new dictator, and so they have refused to hand over Hashimi.
What's truly stunning is that multiple reports have surfaced to indicate that the United States has decided that the real long-term problem is Iraqiya and that Washington's solution is to try to split the party and convince the part they see as more "progressive"--along with the Kurdish parties--to join Maliki in a new, majoritarian government that would be somewhat smaller and nimbler than the ridiculously unwieldy national-unity government that the administration foolishly insisted on back in 2010.
There is more to his analysis including running various potential outcomes of the crisis. It does not include any thoughts on influence from other countries (other than the US). But
Hossam Accomok (Al Mada) notes Iraqiya leader Ayada allawi reportedly met with Iran's Ambassador to Iraq (Hassan Danaii) and was accompanied by Ahmed Chalabi. Iraqiya is saying nothing at present about the alleged three hour meeting which may also have included Saleh al-Mutlaq and others. The meeting reportedly covered issues that have resulted in the political crisis. If the meeting did take place, the US government better be paying attention. They've strung Ayad Allawi for so long, promising him that they would mediate and not offered any real mediation, begged him to set aside his claim to prime minister for the good of the country, etc. Iraqiya has spent most of last week and this week denying that there would be any meet-up with Iran (mainly that Allawi was headed to or already in Tehran) but if they are entering into a dialogue, good for them. Maybe they'll get something from Tehran or it will wake up the White House to the fact that they can't string everyone along forever in their rush to protect Nouri.
In another report, Al Mada notes unnamed officials are stating that there is strong polarization in the leadership of Iraiqya -- Allawi, Vice President Tareq al-Hashemi, Speaker of Parliament Osama al-Nujaifi and Deputy Prime Minister Saleh al-Mutlaq. These rumors have floated for some time but have, thus far, not resulted in any huge split. In fact, there were angry words exchanged in November 2010 between Allawi and al-Nuajaifi -- when Iraqiya walked out of the Parliament over Nouri's refusal to address the security council and the clearing of the names of Iraqiya members -- over al-Nujaifi's decision to continue the session. That was put aside after its airing. If anyone gets ditched quickly, my guess would be that it would be Saleh al-Mutlaq who could find himself out of a position and would then be quickly whisked out of the country. (If he loses his position, he loses his immunity and Nouri would sue him.) Tareq al-Hashemi might be the more obvious choice were it not for the fact that he has Kurdish support. In fact, Talabani is al-Hashemi's weakest support in that the protection Talabani's offered has come as a result of the demands of other Kurdish officials. Al Rafidayn has a report asserting al-Mutlaq met with Dawa leaders (highest ranking thus far, Dawa's Secretary-General Hashim al-Musawi) about resolving the issues between himself and Nouri. Pollack, in his analysis, feels that Iraqiya's leaders are unlikely to be divided against one another.
Dar Addustour reports that Aiham Alsammarae, former Minister of Electricity and Constitutional expert, is calling for Nouri to step down as prime minister. Alsammarae served as Minister of Electricity from 2003 to 2005 and was the only Minister of Electricity to manage to increase the output of electricity to Iraqis. After he resigned, the output fell and has still not reached the levels of production under his leadership. Dar Addustour doesn't state whether he made the call from Iraq or not. (His family was living in Chicago. I thought they still were -- including him.) Al Mada notes KRG President Massoud Barzani has called the current political crisis the biggest one Iraq has faced since the 2003 invasion. He is calling for the partnership to be honored and stated that the Kurds had attempted to play mediator with no success due to a lack of commitment from other players.
Production has rebounded from just over 1 million barrels per day after the invasion to nearly 3 million today. Baghdad's 11 international oil contracts promise to deliver a total of more than 13 million barrels per day within seven years -- a figure that would make Iraq the largest oil producer, ever.
There are good reasons to doubt these projections. For one thing, the current political crisis has underscored Iraq's failure to build the kinds of institutions -- a credible judiciary, non-politicized security forces -- that support a stable, functioning, democratic state. Even if Iraq weren't plagued by daily bombings and political dysfunction, it would be hard-pressed to achieve what would be the most rapid oil expansion in world history.
For some, it's the increasingly dire political situation that's more problematic than the violence. "The government is slowly fracturing," said Andreas Carleton-Smith, managing director of Middle East operations for Control Risks, a consultancy. "The political risks are far more serious than the security risks." Of course, political risk could lead to serious security risks, especially in a worst-case civil war-type scenario. But political risk can also manifest itself in a crushing bureaucracy, or simply the inability to get something done because the government office that's supposed to approve something no longer exists. This type of situation has also become more common in Iraq. "It's becoming more difficult to work here," said Carleton-Smith.
Still on the issue of oil, Grant Smith (Bloomberg News) reports, "Iraq's legislation doesn't prevent oil companies from signing deals with the central government and with semi-autonomous authorities in the North, as in the case of Exxon Mobil Corp., said Adnan al-Janabi, chairman of the nation's Oil and Energy Committee." Back in October, ExxonMobil signed a deal with the KRG and you may remember Nouri's outrage and his Deputy Prime Minister for Energy's outrage (that's Hussein al-Shahristani) as they insisted that Iraq would consider sanctions, that the contract was illegal and more. And the Minister of Oil Abdul-Kareem Luaibi was insisting that they had demanded a response (repeatedly) from ExxonMobil which had refused to respond. It's not at all surprising that all the bluster, the deal goes through. A puppet like Nouri is installed for a reason, after all.
In other news, Manila's Sun Star reports, "Crisis alert level 3 has been raised Wednesday in Iraq due to 'higher-than-expected' surge in terrorist and sectarian violence in the Western Asia nation, foreign affairs officials said. Under alert level 3, which covers all regions of Iraq except the northern autonomous region of Kurdistan, Filipinos who wish to leave Iraq are offered voluntary repatriation at government expense." Gulf News adds, "All of Iraq, except Kurdistan, an autonomous region in the north, near Turkey, was assessed under a high alert level of disorder, said Manila's foreign ministry statement." Despite massive unemployment in Iraq, the country continues to bring in foreign workers for jobs that Iraqi could easily be doing. These are not security contract jobs. They're construction jobs and hospitality industry jobs largely. GMA News notes the Philippine Department of Foreign Affairs Sectrary Albert del Rosario:
While nearly 4,000 Filipinos were secured by the US military, the US troop pullout has significantly reduced the number of Filipinos in Iraq and has also resulted in a diminution of their security, the DFA noted. "In addition, we further believe that there may be undocumented Filipinos working as household service workers and we are, therefore, fully committed to ensuring the safety and welfare of all our countrymen in Iraq," Del Rosario said.
On the topic of violence, Reuters notes a Baghdad roadside bombing which left six people injured, MP Qais al-Shathir was targeted with a roadside bombing which injured five people (including two of his bodyguards), 1 Sahwa was shot dead in Muqdadiya and, last night, 1 grocer was shot in Buhriz. Reuters tells you that the Iraqi ministries state 350 people were killed last month. They provide no figure to check it with, just parrot what the ministries say. We covered this in yesterday's snapshot and noted nearly 500 were killed in the month of January. Iraq Body Count's total for January is 458. As we noted yesterday, January 2012's count is significantly higher than January 2011's count.
In other news, AFP notes that the Minister of Justice declared Iraq executed 17 people yesterday bringing the total number executed in Iraq this year to 51. 51 so far this year. In a country with a population of less than 28 million.