THE FEDS PREPARE A BLACKLIST
Flaherty, Francis J.
The Feds Prepare a BLACKLIST BY FRANCIS J. FLAHERTY If you are a striking teacher, a poor student who can't pay off your loans, a draft-registration resister, or someone who does business with any...
...If debarred, a person or group would be denied Federal monies for up to three years from any of the twenty-eight Federal agencies OMB oversees...
...The OMB rules would go a step further, denying him Federally supported home or farm mortgages, OMB Watch says...
...Failure to pay an uncontested debt" 'If someone were vigorous in enforcing this, soon there would be no one left in the U.S...
...It turns Uncle Sam into the Sorcerer's Apprentice," says Shannon Ferguson, technical coordinator of OMB Watch, an organization in Washington, D.C., that is critical of the agency...
...There is guilt by association, too...
...The rule would then be on the books unless a future Administration revoked it...
...Riso dismisses critics who claim that the plan punishes people just for having trouble with their loan payments...
...Some see politics beneath the stinginess...
...Nor does the blacklist bother Riso...
...You have to have done something really horrible, like falsifying medical research data, to get on it...
...We are no longer focused on issues of privacy and personal autonomy, as we were when we passed the Privacy Act...
...By spring, the blacklist may be in full swing...
...And OMB has taken the high ground, saying it's a fight against waste, fraud, and abuse...
...Our main problem is people who just don't pay or get in touch with us at all...
...the Nevada beauty-school operator who got double payments on his students' Federal loans...
...Virtually unnoticed, it serves as a prime example of the quiet, bureaucratic means of coercion available to the Government...
...If someone were vigorous in enforcing this, soon there would be no one left in the U.S...
...says Riso...
...What you've written on paper is another thing...
...Unlike the OMB rules, these often refer to specific—and gross—violations...
...Bullshit," responds Gerry Riso, OMB associate director for management...
...Most of them have already put procedures in place to comply with the policy...
...Criminal conviction is also a debatable offense, and any person or group that "does business" with someone with a criminal record is ineligible for Federal grants...
...The list will not only identify banned parties, but also describe their infractions, cross-index their key employees, name officials who can provide more information, and perhaps list taxpayer identification numbers...
...Go explain to some taxpayers why they can't get their public funds back from some guy who used his grant to fix his roof...
...This runs into billions...
...How would you like it if your magazine published inaccurate stories because you didn't tell your colleagues something they needed to know...
...Today's list at Health and Human Services probably has no more than a dozen or half a dozen people on it," Ferguson says...
...By far the largest cases of abuse arise not in Federal grants but in Federal contracts, the lobbyist says, where sophisticated cost-padding or bid-rigging schemes can bilk the Government out of millions of dollars in a single transaction...
...Neither seems likely...
...1 guess they could happen, but we're not that goddamn arbitrary...
...Last May, OMB issued the final blacklist regulations to its twenty-eight Federal agencies...
...There's no way to know which...
...Research for this article was supported by a grant from the Deer Creek Foundation...
...Politicians, for their part, have had little to say about the matter...
...The plan, he believes, signals "the control of the green eye-shade people" over the grant system, which distributes $100 billion to state and local governments alone...
...The young man who is convicted of refusing to register for the draft can also forget about Federal aid...
...He ticks off some cases: The California jeweler who falsified financial statements on his Economic Development Administration loan...
...This could mean that a public-school teacher who goes on strike despite a no-strike clause in his or her contract would be debarred from receiving Federal grants...
...The OMB scheme, says Goldman, is another big step in a ten-year march toward "the centralization of information in a national database" through computer matching and other data-sharing techniques...
...There is a small group of [Administration] people who think Government is bad and who want to get rid of the grant system," says one lobbyist who also requested anonymity...
...Plans are afoot to merge the two blacklists into a uniform system...
...But we don't think it's so far off-track...
...So the drug-rehabilitation clinic that employs former addicts, many of whom have criminal records, may be imperiling its funds...
...At the moment, each individual agency sets its own grounds for grant suspension and debarment...
...As to penalizing the striking teacher, the rehabilitated addicts, and those that employ them, Riso recognizes a problem could exist but says it's highly unlikely...
...By spring, the blacklist may be in full swing...
...Brooks, who heads the House Government Operations Committee, has urged the OMB not to go ahead with the regulations until his committee and others in Congress have had time to examine them...
...His assurances don't mollify the critics...
...We're one Government...
...It's a shift from Government as the coordinator and promoter of basic social services to Government as strict law enforcer and monitor," says Ferguson...
...The Solomon Amendment already denies him funds for education or job assistance...
...Should the teacher be hired by Head Start or any other employer receiving Federal funds, the employer's funding may be jeopardized by the OMB's guilt-by-association standard...
...Suppose we make a loan for asbestos removal to a small parochial school," says one Federal grant official, who requested anonymity...
...If they can't pay the loan, what are we going to do...
...Grantees, who are state and local governments and nonprofits, are obviously not trying to make a profit...
...We've seen an erosion of those interests...
...I'm sure the proposal has to be very intimidating for grant receivers," says subcommittee staff director Linda Gustitus...
...One ground for debarment, for example, is a serious "violation of the terms of a public agreement...
...eligible for a grant—and maybe that's the point...
...Say you're a farmer on the rural electric co-op," argues Ferguson of OMB Watch...
...Surprisingly, resistance to the OMB's latest encroachments has been virtually nonexistent...
...The new rules aren't even necessary, Ferguson argues...
...You're forced to choose between incompetence and malice," says James Feldesman, a Washington lawyer who represents family-planning groups and hospitals...
...Bar them from all future Government programs because they can't wring more tuition out of their kids...
...he asks...
...Public funds ought not to be given to groups not acting responsibly," he says...
...Lots of them are defaulting...
...The vulnerability for abuse is very small here...
...If the OMB plan goes through, it would herald a significant new invasion of privacy...
...Why shouldn't what's known by one agency be shared with other agencies...
...Like Mickey Mouse's charmed mop in the old Disney movie, the OMB plan could take on a life of its own, growing and replicating as it spreads personal information into every corner of the society...
...the twenty-four North Carolinians convicted of food-stamp trafficking...
...If the Government is mounting a major effort against a minor problem, what is the motive...
...At first, it will distribute a monthly printed list of the banned individuals and groups to banks, universities, corporations, and public officials...
...Grants go to "all kinds of people," he says, not just liberal groups...
...But civil-liberties activists see it as an invasion of privacy, a threat to free association, an affront to due process, and an economic threat to politically nonconformist groups and individuals...
...Widespread abuse justifies these moves, Riso says, citing a Federal report tallying 2,200 successful prosecutions of Federal contractors, grantees, and employees for fraud or related offenses in the first half of 1987...
...Waste, fraud, and abuse are "not a major problem in the grantee community," says the anonymous lobbyist...
...Those kinds of things are on the edge of the problem," he says...
...But it's no secret that some in the Administration have been going after family planning...
...anyone guilty of a criminal conviction, government-loan default, poor performance on a grant, debarment by a state or local agency, or "conduct indicating a lack of business integrity or honesty...
...While the purpose of this undertaking may be entirely laudable, it appears that OMB has chosen a method of implementation that offends many of the basic precepts upon which this nation is founded," Representative Jack Brooks, Democrat from Texas, wrote James C. Miller III, director of the OMB, on December 22...
...What's more, public officials, potential employers, or nosy neighbors may soon be able to ring up a Government hotline-toll-free—and hear a computerized voice tick off your name and address...
...The Feds Prepare a BLACKLIST BY FRANCIS J. FLAHERTY If you are a striking teacher, a poor student who can't pay off your loans, a draft-registration resister, or someone who does business with any of the above, look out: You may soon be on a nationwide blacklist of people and organizations banned from receiving grants from the Federal Government...
...We're not talking hundreds of dollars...
...The Senate Subcommittee on Oversight of Government Management, chaired by Michigan Democrat Carl Levin, plans no hearings on the guidelines...
...This scheme is the brainchild of the Reagan Administration's powerful Office of Management and Budget (OMB), which hails the blacklist as a major advance in the fight against waste, fraud, and abuse...
...The process is just not that harsh," he says...
...Good intentions are one thing," says Ferguson of OMB Watch...
...The General Services Administration will tend the blacklist...
...When you give information to the Department of Education," says Janlori Goldman, a staff attorney for the American Civil Liberties Union (ACLU), "you don't expect it to be used by the Department of Health and Human Services...
...Only personal entitlements, such as Social Security, are exempt...
...A similar Government-wide blacklist has been in place for six years for Federal contractors, Riso points out...
...When the agency published its proposed guidelines in February 1987, it received only sixty comments from the public...
...The blacklist will take effect in the next several months unless Congress explicitly denies money for such activity or the Government agencies involved refuse to participate...
...eligible for a grant—and maybe that's the point.' is another ground for debarment—with equally drastic implications...
...It's too technical," says Ferguson...
...now harsher than those that apply to contractors...
...Ironically, the OMB guidelines for grantees are OjMB has already issued the final regulations to twenty-eight Federal agencies...
...Doing business" with or affiliating with a debarred or suspended group in connection with a Federally funded project would itself be cause for suspension or debarment...
...The sweep and vagueness of the OMB rules would enable the Government to discriminate against political opponents and defund whole programs of social service...
...Some Government employees worry that the new OMB rules will have cruel results...
...Thus, anyone who appears on the blacklist could be effectively disqualified from much of the job market, becoming an occupational leper...
...Formally called "Guidelines for Non-procurement Debarment and Suspension," the OMB plan would set up a stern, Government-wide ban on grant-giving to Francis J. Flaherty, a journalist who covers the law, is a member of The Progressive's Editorial Advisory Board...
...The OMB rules would be a powerful club not only against individuals and groups that clash with the Government but also against the entire system of Federal grants...
...The ACLU has not taken an official position on the OMB initiative, but Goldman says it violates the 1974 Privacy Act, which generally forbids information gathered for one purpose to be used for another...
...And by attacking the grant system, the rules would strike at the heart of social-welfare programs...
...If yours does, do you endanger your chance of getting a loan for your own farm...
...Why no opposition...
Vol. 52 • February 1988 • No. 2
