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CONTACT: Project On Government Oversight
POGO Urges Senate to Strengthen Inspector General Independence
WASHINGTON - May 14 - In a letter sent yesterday, the Project On Government Oversight (POGO) urged the Senate to pass an amendment to the financial regulatory legislation that will strengthen the independence of certain Inspectors General (IGs), including those that serve as watchdogs within many financial regulatory agencies.
The amendment—introduced by Senator Charles Grassley (R-IA) and co-sponsored by Senator Claire McCaskill (D-MO)—will fix a provision in the Restoring Financial Stability Act (S. 3217) that would convert the IGs at several financial regulatory agencies to presidentially appointed positions. These watchdogs are currently classified as designated federal entities (DFE) IGs, and are appointed by their agency heads.
Although some believe that these IGs will be able to operate with greater independence if they are appointed by the President and confirmed by the Senate, the Grassley amendment offers a better solution. Instead of converting them to presidentially appointed positions, the amendment will require all DFE IGs—including the financial agency watchdogs—to report to the entire board or commission at their agencies. Additionally, the amendment requires a two-thirds vote of the entire board or commission in order to remove a DFE IG, making it virtually impossible for any one individual agency head to unilaterally remove an IG for political reasons.
Testifying before Congress last year, POGO provided additional recommendations for strengthening the independence of financial agency IGs, such as giving them the authority to subpoena documents and testimony from the private entities regulated by their agencies.
POGO also sent a letter yesterday in support of an amendment introduced by Senator McCaskill and co-sponsored by Senator Grassley that will improve coordination between financial agency IGs by connecting them through a new Council of Inspectors General on Financial Oversight (CIGFO).
"As the country continues to reel from the financial crisis, it's imperative that we have strong, independent watchdogs in place to ensure that financial regulatory agencies are acting in the public's best interest," said POGO Executive Director Danielle Brian. "The Grassley and McCaskill amendments will help give IGs the authority and independence they need to hold financial regulators accountable."