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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.
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