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National Defense Authorization Act for Fiscal Year 2012

Floor Speech

Location: Washington, DC


Mr. GRASSLEY. Mr. President, there currently is no cap at all on the amount taxpayers will reimburse contractor employees for compensation except for just a handful of executives, and that limit is already too high at $693,951. That is far above what the chief executive of the U.S. Government gets paid at $400,000 a year.

So that is why we would cap it at no more than what the President can get. I presume the Senator from Michigan is aware of that and willing to help us on that process by adopting this amendment.



Mr. GRASSLEY. For anybody interested in how long I might be, I would say roughly 10 minutes.

Mr. President, for nearly a year, I have been investigating the Bureau of Alcohol, Tobacco, Firearms, and Explosives' operation known as Operation Fast and Furious. I have followed up on questions from that investigation as the Senate Judiciary Committee held oversight hearings over the past few weeks with both Secretary Janet Napolitano and Attorney General Eric Holder. Each of them testified about the aftermath of the shooting of Border Patrol agent Brian Terry. I have sought to clarify with facts some of the half-truths that were said during these meetings.

Each claimed they were ignorant of the connection between Agent Terry's death and Operation Fast and Furious until my letters with whistleblower allegations brought the connection to light. However, documents that have come to light in my investigation draw those claims into question. I would like to address a couple of those discrepancies.

Secretary Napolitano went to Arizona a few days after Agent Terry's death. She said she met at that time with the FBI agents and the assistant U.S. attorneys looking for the shooters. She also said at that point in time that nobody knew about Fast and Furious. Yet documents show that many people knew about Fast and Furious on December 15, the day Agent Terry died.

Secretary Napolitano referenced the FBI agents looking for the shooters. The head of the FBI field division was present at the December 15 press conference about Agent Terry's murder. At that very press conference the FBI head told a chief assistant U.S. attorney about the connection to an ongoing ATF investigation. That same night, U.S. attorney Dennis Burke confirmed that the guns tied back to Operation Fast and Furious. These connections were made days before Secretary Napolitano's visit at that time. The very purpose of her visit was to find out more about the investigation.

So a very important question comes up: The Department of Homeland Security oversees the Border Patrol. Why wouldn't the Phoenix FBI head have told Secretary Napolitano that the only guns found at the scene of Agent Terry's murder were tied to an ongoing ATF investigation?

Let's not forget the U.S. Attorney's Office. Secretary Napolitano said she met with the assistant U.S. attorneys looking for the shooters. The chief assistant U.S. attorney for the Tucson office, which coordinated the Terry investigation, found out about the ATF connection directly from our Federal Bureau of Investigation.

So a very important question comes up that needs to be answered: Why would they conceal the Fast and Furious connection from Secretary Napolitano days later?

The Tucson office is overseen by the U.S. attorney for the District of Arizona, Dennis Burke, who confirmed to Tucson that guns came from Operation Fast and Furious. When Ms. Napolitano served as Governor of Arizona, Mr. Burke served as her chief of staff for 5 years. Secretary Napolitano acknowledges that she had conversations with him about the murder of Agent Terry.
So a very important question comes up: Why would Mr. Burke conceal the Fast and Furious connection from Secretary Napolitano?

Even before Secretary Napolitano came to Arizona, e-mails indicate Mr. Burke spoke on December 15 with Attorney General Holder's deputy chief of Staff, Monte Wilkinson.

So a very important question is unanswered: Before finding out about Agent Terry, Mr. Burke e-mailed Mr. Wilkinson that he wanted to ``explain in detail'' about Fast and Furious when they talked. In that phone call--and this is a very important question--did U.S. attorney Burke tell Mr. Wilkinson about the case's connection to a Border Patrol agent's death that very day?

The next day, the Deputy Director of the ATF made sure briefing papers were prepared about the Operation Fast and Furious connection to Agent Terry's death. He sent them to individuals in Washington, DC, in the Deputy Attorney General's Office at the Justice Department. Within 24 hours, they were forwarded to the Deputy Attorney General. They were accompanied by personal e-mails from one of the Deputy Attorney General assistants explaining the situation.

Two weeks later, that Deputy Attorney General, Gary Grindler, was named Attorney General Holder's chief of staff. Yet a month and a half after Agent Terry's death, Attorney General Holder was allegedly ignorant of the Operation Fast and Furious connection to the murder of Agent Terry.

So a very important question is unanswered: Why

wouldn't Mr. Grindler bring up these serious problems with Attorney General Holder, either as his Deputy Attorney General or as his chief of staff?

It is clear that multiple highly placed officials in multiple agencies knew almost immediately of the connection between Operation Fast and Furious and Agent Terry's death.

The Department of Justice and the Department of Homeland Security have failed to adequately explain why Attorney General Holder and Secretary Napolitano allegedly remained ignorant of that connection. Whether it is the Attorney General or the Secretary or members of their staff, somebody wasn't doing their job. Somebody wasn't serving their higher-ups as they should have been, as proper staff people.

In the case of Secretary Napolitano, either she was not entirely candid with me and others or this was a gross breach on the part of those who kept her in the dark. The Border Patrol and the Department of Homeland Security lost a man--Agent Terry being murdered. It was their right to know the full circumstances surrounding that from people who served under them.

No one likes the unpleasant business of having to fess up, but the FBI, ATF, and U.S. Attorney's Office owed it to Agent Brian Terry and his family to fully inform the leadership of the Department of Homeland Security. This was the death of a Federal agent involving weapons allowed to walk free by another agency in his own government.

Let me explain ``walking guns.'' The Federal Government operates under the rule of law, just like all of us have to live under that rule of law. There are licensed Federal gun dealers, and Federal gun dealers were encouraged to sell guns illegally to straw buyers and, supposedly, follow those guns across the border to somehow arrest people who were involved with drug trafficking and other illegal things. Two of these guns showed up at the murder scene of Agent Terry. So it is a very serious situation that we need to get to the bottom of.

If what I have just described, with all these unanswered questions, is not enough to brief up to the top of the Department, then I don't know what is. In other words, staff people ought to be doing their job or, if staff people were doing their job, then the Congress, in our constitutional job of oversight, is being misled.

I yield the floor.



Mr. GRASSLEY. Madam President, at a time when the national security budget is under immense pressure, it is vitally important that we spend our defense dollars more wisely.

The Boxer-Grassley amendment will contain runaway spending in contractor salary reimbursements. Notice that I said ``salary reimbursements,'' not salaries.

Someone not familiar with government contracting might ask why it's any of our business what government contractors get paid, and I would agree if we're talking about what their company pays them out of its own pocket.

When most people hire a contractor to renovate their bathroom or re-shingle their roof, they find the one that does the best work for the least cost.

Having done that, you are not likely to ask or care what their cut is or what they pay their crew.

To the extent that government contracts work the same way, the same principle applies. Unfortunately, not all government contracts do work that way.

A large proportion of government contracts actually reimburse the contractor directly for the costs they incur, including for the salaries of their employees. These types of contracts are risky because contractors lose the incentive to control costs. They are only supposed to be used when a fixed price contract is not possible for instance, if the scope or duration of the work is not possible to determine at the outset.

Nevertheless, cost-reimbursement type contracts are used extensively by Federal departments and agencies.

The Defense Department alone accounted for over $100 billion in cost reimbursement type contracts in fiscal year 2010.

President Obama has criticized the widespread use of these types of contracts and has set a goal of slowing the growth and ultimately reducing their use.

He has made a little progress. However, we are talking about a small dent in a large bucket.

It's clear that cost type contracts are going to account for a major proportion of the dollars spent on federal contracting for the foreseeable future. As a result, we must take steps to limit unreasonable expenditures under these types of contracts.

Senator Boxer and I worked together to try to head off this problem back in 1997.

At that time, we proposed capping salary reimbursements at the salary level of the President of the United States.

However, a compromise was ultimately enacted that capped how much the top 5 highest earning contractor executives could charge the federal government for their salaries.

The cap was set at the median salary of the top five executives at companies with annual sales over $50 million, which must be recalculated annually.

Since that time, the cap has more than doubled from $340,650 to $693,951. That's 53 percent faster than the rate of inflation.

The House-passed version of the National Defense Authorization bill expands the current cap to all contractor employees, not merely the top five executives, closing a loophole that was being exploited.

The version of the DoD Bill before the Senate extends the cap only to the top 10 to 15 executives.

However, Senator Boxer and I think it's time to reconsider a fixed cap at the level of the President's salary, which I should add was doubled by Congress to $400,000 since our previous proposal.

That is more than generous.

Surely the taxpayers should not be asked to pay the salary of a contractor more than the President makes, which is twice what any cabinet secretary makes.

Keep in mind that this cap just limits how much Uncle Sam can be billed for, which is on top of whatever the company chooses to pay its employees out of its own pocket.

Not only would our straightforward cap save man-hours in the Office of Federal Procurement Policy, which has to gather the data every year to determine the current convoluted cap, but it would save millions of dollars that need not be spent.

Again, we cannot afford to go on wasting our increasingly limited defense dollars.

We have to be more aggressive in weeding out waste in defense spending and this is one unnecessary expenditure that we can easily eliminate in favor of higher priorities.

I urge my colleagues to join us in this commonsense cost cutting measure.

I yield the floor.


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