American Enterprise Institute

June 6, 2007

[Edited transcript from audio tapes]

Noon	Registration and Lunch
12:30 p.m.	Introduction:	Roger Bate, AEI
	Presenter:	Senator Tom Coburn (R-Okla.)
2:00	Adjournment

Proceedings:

Roger Bate:  Thank you very much for coming.  If you can be quiet, the senator has arrived so we may begin a little early and allow the opportunities for more questions if we start soon.  So, good afternoon.  My name is Roger Bate.  I’m a fellow here at the American Enterprise Institute and it is my pleasure to welcome you to AEI today and for this event on what is an increasingly important topic.  Please turn off all electronic devices or put them to vibrate or quiet [inaudible] manipulate the tranquility in whatever way you can do. 

The G8 is meeting, and whether foreign aid is at the forefront of discussions, as it probably would not be, there is no doubt that commitments made at Gleneagles will come under scrutiny, and especially those made on foreign spending in the Middle East and in Africa.  So, it seems a good time to discuss that assistance both in terms of direct aid and in terms of the topic of today’s event on transparency and accountability in aid.  Concerns about the efficacy of aid go back almost as far as aid itself.  There are many steps to evaluating efficacy to know how that assistance is spent, by whom, on what, where, when, and to what effect.  Today’s discussion will focus primarily on the importance of the early steps of that.  But, of course, discussions of aid always morph into the impacts, so, therefore, I’m sure they will today. 

It is extremely important we know how aid is spent because - and this may seem a ridiculous thing to say, but it is - do we know that it does actually harm in some instances?  Is the aid effective?  And when we know that it is working, which interventions are working best?  And, perhaps, we should be cutting back on the less effective one.  When aid works, who should do what?  What are the roles for NGOs?  What are the roles for private contractors, government agencies?  And how do inter-governmental organizations fit into all of this? 

What are the roles for -- in that sphere that I know best, in health?  The World Health Organization, UNICEF, the World Bank and Global Fund - how should they interact?  Should they be competing to provide services or should they coordinate?  If we do not have transparency, it is very difficult to know how any of that can get done.  And, unfortunately, many aid programs simply do not do serious measurement and evaluation.  We simply do not know a lot of the answers to the questions that I just posed.  In some instances, we have no explicit idea of even where the money is going.  It reminds me of –- I think it was Mrs. Jellyby, Charles Dickens’ character, who describes what he described as “telescopic philanthropy:” When we give money at that arms-length, it does not always necessarily do good. 

Sometimes it is very hard to measure both, especially, measure performance.  And those doing the measurement, I sympathize with and wholeheartedly support.  But often their bosses with little data set targets, and sometimes I wonder why.  The Millennium Development Goals all sound very good but how many of them are actually measurable and are being measured?  And are they actually attainable?  Are they largely, as I might suspect, a fund-raising tool?  Now, perhaps many people in this room would disagree with that assessment, and maybe it is unfair.  But sometimes we do not even have to look that far away from our own donor countries to see the things where measurement is not a problem, to see things that are remiss. 

I’m going to give one example from the area that I currently work on.  At the moment, about seven percent of the anti-malaria drugs listed by the Global Fund and allowed for purchase by the Global Fund to combat malaria - that is two out of 30 drugs - are actually known to work.  Why is that happening?  It is not that I’m against the Global Fund, and most of the things that I have written up and until about four or five months ago on the Global Fund have been very positive; it is an agency out there to provide interventions in developing countries.  The drugs may work properly; we just simply do not know.  How many kids’ lives are being put at risk by the lack of quality of those drugs? 

And, as you could probably guess from my remarks, no one seems to be measuring it very thoroughly.  But, of course, to be fair to the Global Fund, at least they post on their website the drugs that are able to be bought with that funding, even if they do not tell us exactly how much is being bought and for what diseases. 

Most agencies are actually far more opaque.  In fact, much information is redacted from contracts and some of that information probably should be redacted from contracts, but how much?  As far as I can see in many of the areas that I work in, far too much.  And it is as though, when it comes to aid and especially aid on health, good intentions to treat are taken as evidence of good treatment.  But is that good enough?  Today, we are honored to have a speaker who has done more than any one in the Congress to expose needless opaqueness.  I was thinking the word was “opacity” but I think that is just a specific engineering term –- so opaqueness.  And it is my pleasure, my great pleasure, to introduce him today. 

Dr. Coburn is a long-standing advocate of increased accountability and transparency in US foreign aid spending.  He is a successful businessman and physician who, as I know your notes say but I’m going to remind you of some of the highlights because there are many.  He was elected to the Senate on November 2nd 2004.  Prior to that, he served Oklahoma’s 2nd congressional district in the House from ’95 through to 2001.  And the National Republican Congressional Committee praised his office as one of the most efficient of the 73 new Republicans elected in 1994.  During his three terms in the House, Dr. Coburn played an influential role in reforming welfare and other federal entitlement programs.  In 2002, President Bush elected him co-chair of PACHA, the President’s Advisory Council on HIV and AIDS. 

Today, our distinguished speaker serves a similar budget watchdog role in the Senate, where he has focused his efforts on oversight on how federal dollars are being spent and, in some cases, misspent.  In 2005, the Federal Financial Sub-Committee -  that is a committee of the Homeland Security Committee, which Dr. Coburn chaired - held more hearings than any other Senate sub-committee.  His hearings to evaluate the effectiveness of USAID’s malarial control programs were particularly important and I thank him very much for those efforts; they contributed to the revitalization of USAID’s work in that area on that specific disease. 

Dr. Coburn is a member of other committees as well - Judiciary; Indian Affairs; Health, which is the health education; Labor and Pensions.  And as a citizen legislator – and, I think, quite rare in today’s climate - Dr. Coburn has pledged to serve no more than two terms in the Senate and to continue to care for his patients at home in Oklahoma where he specializes in family medicine, obstetrics and allergies.  Our distinguished speaker this afternoon intends to illuminate many of the problems in foreign aid spending and offer some innovative solutions.  Please join me in welcoming Senator Tom Coburn.

Tom Coburn:  Thanks.  I want to start with a short story of a father who put his daughter to bed, a young daughter.  And about five minutes later she said, “Daddy, I need a drink of water.”  And he said, “I just gave you one.  You just do not want to go to sleep.”  And about five minutes later, she said the same thing and he said, “You know, I just have given you a drink of water.  You do not need a drink of water.  If you persist at this, I’m going to have to discipline you with a spanking.”  So, about 10 minutes go by and she says, “Daddy.”  And he said, “What?”  And she said, “When you come to spank me, will you bring me a glass of water?” 

Well, what we are going to talk about today requires persistence.  First of all, if anything, I want you to know about me is I’m persistent and I intend to be persistent in seeking transparency so that we all get what we want to get from helping other people through our foreign aid.  We are actually in the foreign aid business and so the question is:  Now what?  Libertarians and liberals have been fighting over the merits of foreign aid for years typified by the money-down-a-rat-hole- view of former Senator Jesse Helms and throw money, much more money, a view of famous liberal Jeffrey Sachs.  And there are their quotes; I will not quote them but you can see they are far apart. 

The fact is that this battle has already been won.  We are not spending as much money as some would like but it is in the tens of billions of dollars every year.  Last year, it was $25.2 billion.  The idea of cutting off foreign aid is a fantasy and it ought to be dropped.  The Americans, as a group, are compassionate people, but given our own financial circumstances that compassion has to be measured to make sure that the dollars we give are very effective. 

Given that we are in this business, we need to manage it like a business.  The first thing a company CEO and shareholders need to manage a business is information.  What and where are investments and how are those investments performing?  If a new CEO comes into a company, the first thing you do is do not immediately propose change; what they do is they seek to measure where they are today.  They seek to establish what is going on; what are we accomplishing; what is good; what is bad; what needs to change.  And the only way that that happens is if they have adequate information to accomplish that.  That is what transparency is all about.  Before you enter the political, policy or ideological battles about what our program should look like, we have to know what they actually look like today.  And, quite frankly, most of the time we do not.  We have no idea what they look like. 

What is transparency?  I would like to define some terms for you so that you can understand what I mean when I say transparency.  When I talk about transparency in foreign aid or any other public program, I mean the posting of information on a public website so that all spending information is available, including who gets the money;  what is purchased in terms of goods and services; the terms and conditions of those purchases and of the grants and/or contracts; regular progress reports on fulfilling those terms by each grantor or contractor; aggregation of data into tables of how much total is spent on types of activities or procurement by country; document progress in a program and countrywide against measurable outcome indicators.  Those are the kind of things we need to do to know whether or not our dollars are having the effect that we are telling the American people that they are.  That is the kind of obligation that we have to know if we are going to commit to help another country and make sure that commitment is fulfilled so that we can measure whether or not we are fulfilling that. 

Why transparency?  Let me be clear:  Transparency is not the goal; the goal is accountability.  At every hearing we have had in our Federal Financial Management Subcommittee - and, as you heard, it was 49 in the last Congress - we put up an 8-foot tall poster; it illustrates the point.  Transparency is the first and critical step to accountability, and it is the step on which all others depend.  Transparency is the tool with which we can attain accountability.  There are good reasons for transparency. 

Let me just list them quickly because I have got a fairly long presentation; I want to take time to take questions.  You cannot argue against transparency.  What is there is there.  And so it does not take sides.  The facts are presented and then we get to decide what those facts mean.  It exposes the true quality of management of a program.  Programs usually are not hiding information, although some are.  It is usually that they are not collecting the information.  It is not that a certain manager is a bad manager.  They become inefficient because they do not have the data to know what their program is doing. 

We have a rule we go by in our office:  You cannot manage what you cannot measure.  And if you cannot measure it, you cannot give an assessment of where you are in regards to that.  It eviscerates spin, and that is the real problem in Washington. And it is a real problem in the management of many of our programs, both domestically and foreign.  And it exposes the true priorities of the program; your true priorities are based on where the money goes.  Regardless of what you say, it is where the money goes is where your priorities are.  The other key thing that we are going to find, especially through what is called the FFAT Act, which was passed and signed in law last year by President Bush, the Federal Financial Accountability and Transparency Act, which is going to put everything online, it enlists the public in helping do oversight.  Quite frankly, Congress is lazy when it comes to doing oversight. 

And then finally, it deters bad behavior.  When there is transparency as the status quo rather than scandal, behavior changes.  When it is all out there for everybody to see and everybody to measure and everybody to have an opinion on, then bad things do not happen as often. 

Let me talk about how the process normally happens.  And in this case multiple people have helped us in the Senate not to be critical of the program, but the intention is to make the program effective to its original intent.  And, oftentimes, that does not happen in government programs.  Normally, outside experts or whistleblowers criticize a program; Congress seeks to confirm or refute that.  Oftentimes, most often, an agency denies at multiple levels whether or not that is factual or not. 

What happens is since they are not able to address the substantive criticism that has been labeled, the agencies tend to fight back by going after the people who raised the charge in the first place, whether that is whistleblowers -- or publicly attacking the credentials of outside critics; reaching out to the political opponents of those who are raising the issue. 

Congressional oversight exposes that the agency cannot refute its critics and we have seen this time and time again, mainly because they do not have the data with which to refute it.  In other words, they do not have the data to make the decision to be able to give a great argument to refute the criticism that has been labeled against them.  Finally, the agency is embarrassed by mismanagement that such neglect of knowing what the data is and, finally, an agency or program begins to reform itself based on transparency, measurement of data, so that you can manage the program. 

Why is reform so rare?  The timeline worked -- and I’m going to summarize this very shortly.  Reform is rare because oversight is not popular; it does not fit the political mold where you get positive strokes, which most politicians seek to drive to.  It does not help in the fund-raising process as for a politician.  It inures [sounds like] to you lots of criticism from the protectors of certain programs who are well-intended but are also not informed as to the outcomes and procedures and the policies and the results of those programs.  It takes energy and commitment and doggedness to do oversight, which means you yourself have to actually learn an issue and know as much about that issue as the agency who is presenting in testimony before you. 

Finally, Congress is lazy and it cares a whole lot more about the next election than it does the next generation.  I’m going to go over three case studies for you.  We will do it very quick.  The first is USAID malaria control as a bilateral program; it has a fully accountable structure and I have to give compliment to them.  They have totally reformed, turned things around and done a wonderful job.  I’m very proud of what they have done.  The second is UN Headquarters Renovation.  It is a multilateral program; it has a fully unaccountable structure.  And, finally, it is the Iran Broadcasting Quasi-Independent Agency, which has a partially accountable structure.  Number two and number three are a mess. 

Let’s talk about number one.  In January of 2004, some allegations were published in the scientific literature that alerted Congress to possible problems with US-funded malaria programs, and that began our oversight process.  And this is multiple committees; this is not just my committee and it is just not me who is solely responsible for the changes.  It is the people at USAID that are responsible for the changes because we asked the right questions.  The criticisms were around the types of drugs and the prevention tools that USAID was supporting in 30-some countries where they ran malaria programs.  Those criticisms are for another time, but the main thrust was that USAID was spending money on overhead, technical assistants and consultants, and very little on lifesaving treatments and intervention for those that needed it most.  And the interventions that they did support were not comprehensive and were not effective. 

So, in essence, the $85 million that we were spending -- or $79 million, that we were spending was doing very little to treat or prevent malaria in 30 countries.  What we had was an accusation; we had spin come back.  I’m going to give you a quote here for a minute.  This is –- and I love Anne Peterson but she had to defend her agency.  But here is what she said: “Contrary to popular belief, USAID does support the use of DDT in this malaria control program.”  So if you read through that -- and what you find is it was not factual; it was not accurate.  And the reason it was not accurate -- she did not lie.  She did not know because they did not know.  So, she could not present because there was no information and data and transparency to  know what they were doing with USAID malaria program. 

We found that USAID could not document any support for indoor residual spraying programs at the time that the testimony was given.  There is no factual basis for that.  She was not aware of that and yet she testified to something that was factually in error to the US Congress.  The turning point: there was a fourth hearing held and there were fireworks.  One of the techniques was to ask USAID to listen to their critics.  What usually happens in a Congressional hearing is you have the administration position come in; they give testimony and then they leave.  They never listen to what the critics have to say about what they see wrong. 

Well, you do not learn anything if you do not listen to the criticisms.  So we asked them to stay and we spent two hours going back and forth on what the charges were.   And I have to say that because of that we have seen a major change and a major commitment that the folks at USAID are more well-meaning than I could ever hope to be.  But when this was brought to their attention, things changed. 

And so if you go back to that -– well, I guess this will do -- which –- no, go back, go back to what that is –- what you can see –- well, there you go.  In 2004, 8 percent of the money and 1 percent -- a total of 9 percent was spent on treatment.  And you can see in ’06, somewhere between 50 and 60 percent is going to be spent; ’07, it will be 70 percent that is going to be spent on treatment and interventions. Key to saving a million lives a year that die from malaria in Africa; a million, 500,000 children, 500,000 people with brain injury from malaria. 

So you can see what we have seen is a marked change.  And if you look at this -- out of this budget, administration and miscellaneous was the highest number.  And that has now been turned upside down where we are having great administration.  We have a transparent website that shows where they are spending money, how they are doing it, and how we are accomplishing what the goal of our foreign policy was in the first place -- is to actually make a difference in the malaria that impacts and undermines the success and health of those people who live in areas that are endemic for malaria. 

Key points:  They committed to full transparency; they appointed the key coordinator who had with authority on the policy and the funding, both.  Not policy here and funding over here; policy and funding together with somebody accountable.  They set measurable goals.  The transparency brought reform and that is why I am such a big fan of transparency.  We saw these reforms come about because as USAID went back into the field to look at how they were spending their money, they saw it was ineffective as well.  So, we had outside forces who raised the issue that were critical.  When USAID looked at it, they found some truth and some merit into it, and we saw because there was oversight.  And now because there is transparency, we have a very effective -- growing and more effective each year -- program to treat malaria. 

The moral of this story is that transparency works.  It is its own reform engine.  It drives reform.  It is its own quality assurance initiative and it exposes failure and rewards success. 

Let’s move on to some ideal cases -- some less than ideal cases:  UN Headquarters Renovation.  I’m going to –- because we are running long, I’m just going to kind of shoot this from the hip.  We were given information that there was some wasteful, inappropriate contracting and planning going on for the UN renovation.  But before you get to that, think about most businesses.  They do not let one of their facilities run down.  What they do is yearly maintain it, build it, keep it up to code, continue to do the things that need to be done to keep it a viable facility.  None of that ever happened at the UN.  So consequently, we go over through these years.  We have a building that is built with private money originally, and built with a modern state [sounds like] and it has been allowed to run down because nobody was looking in the long-term to make sure we were where we need to be. 

So now we have a building that is out of date, out of code, has a significant risk to the people who work there, and all of a sudden we need to fix it.  So, that is the first problem.  It could have been taken care of along the way.  Or we could have created a sinking fund with which to develop and fix it along the way.  But we did not do that.  So what happens is we had to [indiscernible] provision that prohibits US loans to the UN.  A staffer on an appropriation committee slips in so nobody sees that waives that.  So all of a sudden the United States is making a loan to the UN to build and refurbish and repair the UN.  The US pay 23 percent to 25 percent of all UN. Consequently, the interest paid on that loan will -– three quarters of it we will get interest; a quarter of it we will not.  We will actually pay ourselves interest on money, which we will charge to our grandchildren since we obviously do not have the money since we ran a $250-to-$300 billion-plus deficit last year and borrowed it all from our grandchildren.  Next slide.

So what -– some things that we found.  We found inappropriate contracting.  We found some shenanigans.  What is the real cost?  What are we going to get for what we pay for and was it handled in a transparent and appropriate manner?  In 2005, the estimate for construction was $1 billion -- $63 million;  went up, went up, went up.  Total cost was one two in 2004, one seven in 2005, two billion this year, three billion in two years.  That is what it is going to be.  Besides the problems, we saw exorbitant contingency fees.  We saw an Italian design firm that has never built anything in this country that does not know the codes in this country paid a lucrative fee that was totally out of proportion to what fees in New York City for design and architecture payments was made.  And we also found the person that let that contract has since been compromised and has admitted to dealings and other problems that have led to conviction of that individual for good-old-boy payments, under the table and inappropriate spending of everybody in the world’s money but greater than 50 percent of the world’s money from three countries to do this. 

So the question is would that happen if you had transparency?  If you could see it, would you see those types of things?  If you saw the contract, if it was on an internet posting from the UN would you see the content?  So what we did is we had a hearing, with somewhat flamboyant -- not unlike Donald Trump.  And we asked and we got some combine [sounds like] some promises that they were going to put up a website.  They were going to fire the design firm.  They were going to put –- and they did put in a new coordinator and we did have periodic meetings with them.  It progressed, but what happened? We did not get a website that was accurate.  We did not get information on the website.  The cost estimates are still rising; we are over two billion dollars. 

There is no independent audit entity at all in the UN.  Any area of the UN that does not wish to be audited cannot be audited.  There are no procurement policies and the scope options, the new additions to the UN reform and caring of this building and the facility for the people who would come here and serve in the UN is expanding all the time. 

So is there any hope?  I’m absolutely dedicated to make sure we get transparency from the UN.  That is an obligation that the UN has to people around the world who are paying their dollars to make sure they are accomplishing what they are supposed to be accomplishing.  With that has to come independent auditing and programmatic reviews.  All budget and procurement information has to be made to the public.  Proprietary information can be hidden but the intent of that -–- but it has to be describable and the only way to do this, I’m convinced, is condition US funds on it.  And I am going to work my entire life in the Senate to make sure that US funds are conditioned on the fact that we can see where the money goes.  And if we cannot see where the money goes, I’m going to work every day to make sure the money does not go there. 

So that is a message that I hope a hundred senators will send.  And when they realize through oversight what the problems are they will say it and they will send that message.  So, we will see what happens with UN building renovation and whether or not America and the rest of the world gets a good value for that and we will see whether or not we see transparency. 

Third study:  Broadcasting Board of Governors.  It has a structure that really has no accountability.  We know what the purpose of our programmed broadcast over the world.  It is not propaganda; it is to put forth our vision of freedom and progress in the world.  It is not to propagandize but we set up a BBG structure with limited or to no accountability so that the rest of the world would think this cannot absolutely be influenced by politicians who want to send only one signal.  We understand that there is a language barrier to content oversight.  What we had was a hearing where a young Iranian student who had been beaten and tortured, testified before our committee and he raised an alert to us on our committee about the language and the broadcast going into Iran, that they were oftentimes inaccurate and oftentimes promoted a position that was far different and sometimes exactly opposite of that of the position of the United States that was funding that.  That is not just no propaganda; that is anti-American.  What we did was took that on. 

And at the same time, the Defense Department and State Department were hearing some of the same signals.  So what happened was because we cannot know what they are saying because we do not have the language skills, the DoD asked that we see some oversight on that.  And so what we had was six months of translation looked at in very good detail to see if, in fact, what this young Iranian student said was true.  And, in fact, it was; it was true.  So, we had a meeting with the head of BBG and we had promises, tremendous promises.  The promise that we would have is that we would have, especially Radio Farsi and Voice of America into that area be translated for us into English completely so that we could have oversight to do that.  That has not happened.  As a matter of fact, the former head of the BBG denied that he made that commitment although he made that commitment in front of Senator Carper and myself and six other individuals. 

What also happened was that the whistleblowers who brought that to our attention inside, who came about after we raised the question, had been punished, discriminated against, and fired.  So what we have seen is the worst behavior that you can see of an agency of the federal government when somebody says, “Maybe you ought to do what are our intended purposes.”  That is why transparency matters is so that not only we accomplish what we want; that when we are not accomplishing what we want, somebody can say something about it and raise the alert. 

So, what is the role for Congress?  It is not about puff, dog and pony shows.  We need -- everything that we legislate, everything that we do - and I’m not talking just about foreign aid; I’m talking about everything we do in terms of our programs here - ought to promote accountability in the management structure.  We ought to write transparency into every bill.  We ought to write measurable targets into every bill.  We ought to take the lowest-value programs in any division and take that money away and give it to the IGs to make sure we can have the accountability.  And we have to ensure that the Federal Financial Accountability and Transparency Act is -– people are compliant to it. 

Now, you are going to see this bill January 1st -- every penny that the Federal Government spends is going online.  A year from then, every subcontract, every sub-grant, every dollar, even the dollars that we give to the UN will be online.  They have to by federal law; the UN has to tell them where that money is spent and how it is spent.  And you are going to see all sorts of agency people trying to get out of this.  This law is written tight.  They will not be able to get out of it.  So, if we send money into foreign aid or if we put money in the UN, the UN has to tell us where that money goes, specifically.  And it has to be online by January 1st of 2009.  So the shot is out across the ball.  We have to do that.  We are doing that internationally and we are doing that domestically. 

It is a great antiseptic.  It is going to create great improvement in where our money is spent, how our money is spent and in effectiveness.  And when it comes to foreign aid, a dollar that comes out of this country to help somebody in the future is really going to help them.  It is not going to help the helpers; it is going to help the people that it was intended to be.  And our motto is, “We are persistent.”  We are never going to give up.  Thank you.  And I will take questions.

Roger Bate:  Thank you very much, indeed. 

Tom Coburn:  You are welcome.

Roger Bate:  We have quite a lot of time for questions, so I am going to ask for the people with the mics to go to those people who are interested in asking questions.  Please use the microphones.  Say who you are from, what your affiliations are; and, lastly, keep it brief as possible because it is not often we have a senator who is prepared to answer questions for a decent amount of time.  So, let us take the most advantage of that.  So, first question.  Lady here.

Jean Montgomery [phonetic]:  Jean Montgomery.  I am hopeful that, maybe, your example of how to behave as a congressperson is spreading to your fellow congressmen.  Is there any evidence of that?

Tom Coburn:  You mean in terms in conducting oversight?

Jean Montgomery:  Yes.

Tom Coburn:  Well, I cannot assure that it is.  We have a bill we are going to try to run in the next couple of years; it is called The Good Government.  I guarantee where we have to look at every program every year and is it effective.  We have to measure one program against where we have 36 doing the same thing, which ones do it well, which ones do not do it well.  I am not encouraged yet but I am encouraged in the American people.  They want this.  They want this type of thing.  They want good government.  They want to be able to see the transparency.  They want to hold us accountable for what we are doing with $3 trillion a year.  I think they should expect no less, and with that, the hard work. 

You know, I wrote a book called The Breach of Trust.  And my falling out with Newt Gingrich came about at the time that when we came to Congress in ’95 and we cut the committee expenses.  And they wanted to raise them back up and I said “Okay, if you are going to raise them back up, do it by putting all the money into oversight.”  They did not do it.  And I knew I had lost the battle and I knew I was not on the team I thought I was on when the money did not go into oversight.  And so my hope is, if I was king for a day, I would make 80 percent of what Congress does oversight because if we get oversight you are going to get much better value for your money. 

We are going to be much more effective in what we do, and we are going to be seen as a much better partner in the world because when we spend money it is going to help those in need, not help those who want to help those in need.  Just right on up here if you want.  If anybody who is in the back that wants to ask a question raise your hand high.

Peter Crishbon [phonetic]:  My name is Peter Crishbon.  Not too long ago I saw on excerpt on 60 Minutes.  It showed that Paul Bremer was, I believe, administrator of post-invasion of Iraq had piled pallets of billions of dollars on trucks used as foreign aid for the construction of Iraq.  Billions of dollars.  Most of that money has never been accounted for.  Presumably, it landed into the hands of kleptocrats of the former Iraqi administration who are now living in luxury somewhere around the world and laughing their ass off, pardon the expression.  Why is Paul Bremer not held in a state of accountability?  And furthermore why has he not been prosecuted?  If the debt assignment were handed to me driving pallets of billions of dollars to Iraq as foreign aid -–

Tom Coburn:  Let me try to answer your question.

Peter Crisbon [phonetic]:  -- without having the brains [cross-talking]

Tom Coburn:  You are making a political statement and I appreciate that you are making a political statement.  But let me try to answer your question rather than -– there are lot of problems there.  I do not disagree with you.  I do not know that the factual basis of that claim is true, number one --

Male Voice:  Well, it can be proven –-

Tom Coburn:  Okay, well – I’m just saying it.  I have not seen that.  I’m happy to see the proof and if it is, I’m the type of guy that will go after something like that.  Number two is it was not just the money; it is the whole management post-invasion by Paul Bremer.  Some of the major mistakes that we are now suffering from today were created and managed and decisions made by that individual in that position.  So, I think there are lots -- if what you say is true, I will look into that personally and will go after that personally.  That is the first time I have – but I will tell Claire McCaskill is going over there this weekend with the IG to look at truckloads and truckloads and truckloads where the equipment -- it is still sitting there for the Iraqi people that has never been used. 

So it is not -– we have some great new senators and I am not partisan in any way.  They are going to look at those things, and I can tell you that she is one that I think -- and she is a bulldog and I like bulldogs on my team.  So I will look at them.  Yes, sir?

Richard Tren:  Thanks very much.  My name is Richard Tren from Africa Fighting Malaria.  You described the great reforms at USAID and the great way that they are spending money in malaria control now.  But in his introductory remarks Roger spoke about the way that the Global Fund has a whole host of drugs that from malaria control we just know nothing about; it is a complete mystery whether or not they work. Could you just explain how the FFAT act will change that and will make sure that taxpayers’ money actually goes on drugs –

[cross-talking]

Tom Coburn:  It will not make sure that the taxpayers’ money initially goes to it but it will make sure that they have to tell the US government where that money went and how it went there.  So we will get to see how much of each and where it went and the methodology and the cost to do that.  So it is going to require –- the FFAT Act does not just require transparency of the federal government of the United States.  It requires transparency of anybody that gets our money.  So, what you are going to see is a flow of information.  Now, will they comply?  They may not comply.  But if they do not then there is going to be great power. 

When the American people start seeing the results of the FFAT Act in their own government where they –- now we have this group of people, whether it be individuals or media or experts like AEI who get to see now where the money is going and get to piece things together to see if it passes the smell test, when they see the results of that and then they see our international dollars and people not complying with that, they are going to demand that they comply. 

And so what is going to happen is we are ultimately going to get to see good results.  We are going to ultimately have AIDS medicines that work given to people who need AIDS medicines that work, rather than a show that says we send all these money out for AIDS but we do not measure how many lives did we save, how people did we put back to work, how many children did we keep from getting infected during pregnancy.  I mean we are going to be able to measure that. 

And who can disagree with transparency?  Who wants to stand up and say we all should not know where our money is being spent, worldwide, in our government?  And if you do not want transparency you have something to hide.  There is no other answer to that.  So, I think you are going to see a kind of a snowball roll in this country.  We are already seeing it happen in the States.  Oklahoma has passed that law and it is going to be all online a-year-and-a-half in Oklahoma.  So, as this passes and grows you are going to see transparency brings about accountability.  And that is what we want.  It is not accusatory; you are bad or you are not doing good.  It is how do we get the best for everybody as we try to put dollars to work to make a difference in peoples’ lives.  I guess we are still up here.  One back here.  Let’s go back over here.

David Sands:  Yes, thank you.  David Sands with the Washington Times.  Maybe drawing on your experience as a medical doctor, but is there a point of diminishing returns when you are documenting so many things to not only Congress but filing so many reports and getting so much information online it gets to be a burden, getting in the way of doing the thing you are supposed to be doing?

Tom Coburn:  Well, you know what?  IBM does it everyday.  DuPont does it everyday.  Every other big -- Exxon Mobil does it everyday.  Everybody knows what is expected of them.  You manage by measuring what you are doing.  So, this is just another step.  Once people gets used to it there is not going to be an excess of paperwork.  It is going to be expected; it is a part of the process.  And that is a great excuse people will -- “Well, it is going to consume too much of our dollar.”  What?  To say you got a hundred million dollars to do something in your state and not be able to tell the rest of us in the country how you spent the hundred million dollars?  We ought to be able to get value for our money.  And so this transparency -- that is a great argument.

We heard it all the time as we were passing this bill.  And we are going to -– and the bill does design and OMB has the power to make that as light a burden as possible.  But tell me how you manage something if you cannot measure it.  How does an agency in this country manage?  Are we effective?  Are we effective in Title 19 clinics?  Nobody knows because nobody is measuring to see if the money that we are putting into Title 19 clinics for pregnant women is working.  So we have to measure it. 

The other answer I would give is we cannot afford not to.  We are on a collision course with bankruptcy in this country.  We have $60 trillion in unfunded liability.  The average family in this country right now has $512,000 of unfunded liability that they are responsible for in terms of the federal government.  The average child born in this country today will face $423,000 in unfunded liability that they will have to service the debt on and pay a portion of it off and also make a living.  We are not going to succeed.  We are not going be successful if we do not rein in and start getting efficiency out of our government.

Roger Bate:  Up here, right here.

Male Voice:  Thank you, Senator.  Your points about accountability and need for better management are very well taken.  I was hoping though that you might address the role of Congressional earmarks in this.  I mean, there are a couple of different kinds of ways.  There is a good program run poorly or there is money directed towards the wrong, which results to a source of waste.  And your inspiring words about transparency-- my understanding is what has been happening with earmarks [indiscernible] sort of pledges of this.  And now you are getting phone calls, for example, to executive branch agencies [indiscernible] rather than following these documentation procedures -- there is clearly been executive branch mismanagement of foreign assistance.  But when USAID looks to this they say, “Our money is actually over-committed if you add up all the earmarks and the things that we are supposed to do.”

Tom Coburn:  Yeah, well I –- first of all I would tell you this:  The battle on earmarks is over; Washington just does not know it.  The American people have had it with them.  It is over.  And what Mr. Obie [phonetic] is attempting to do today by not putting earmarks in except in a conference committee so that nobody can debate them, nobody can look at them, is going to buy him the same fate that the Republicans bought in the last election.  The American people recognize that we have an obligation to do certain things in our country.  But they also recognize when you are doing things for your political benefit, not for the long-term benefit of the country and not for the long-term benefit of our children that you have no business being here.

And so I believe that battle is over.  They just have not recognized it.  And we will see it in the next election.  The fact is, is that promises have been made and they are not being kept.  And there will be certain voices - myself, Jim DeMint, Richard Burr, and others - that will make sure the American people are aware of the lack of commitment and we are going to scream.  You talk about a pig squealing; we are going to be squealing.  There will be no conferences on appropriation bills if that is the way they handle earmarks.  I can stop a bill from going to conference, and I will.  Right here.

Tony Carroll [phonetic]:  Thank you, Senator.  My name is Tony Carroll and I have had the opportunity to work in development projects for the better part of 25 years, first starting as Peace Corps Volunteer in Africa.  And let me make two observations here that I think complement your issues of transparency [indiscernible] our structural issues involved in the development assistance programs.  First of all is the architecture development assistance, I think, is deeply flawed.  I think transparency in itself is an objective but is not the endpoint.  You have to take a look at the architecture.  And the IQC contracts, particularly, in which USAID administers its funds is deeply flawed and results in suboptimal rules.

Tom Coburn:  We will look at that.

Tony Carroll:  And the second thing is the absence of buy- in from the recipient level.  Many times well-intentioned foreign assistance does not get met equally by commitment at the local level because they are not involved in that process.  And often, in fact, the sustainability of these projects is frequently questioned because it really is in a capacity development counterpart organization at the ground level.  So there really needs to be more attention to how that money and capacity is built for a long-term sustainability and to look at the architecture of the IQC system which winds up, in my estimation, greatly eroding the intent of Congress in appropriating these funds.

Tom Coburn:  I would love to work with you on that if you would contact us.

Male Voice:  Senator Coburn, thank you for your leadership on this very important matter.  Briefly, two questions, one on the Foreign Assistance Act.  Why is it that the last time it was written -- I think President Kennedy was in office.  Since then it has just been amended, so it is a 1961 act. 

And second, on accountability through multilateral institutions, on your website there is some documentation of not even responses being received for your well-intentioned attempts to ensure that accountability.  What leverage, really, does Congress have, given that Congress itself has provided privileges and immunities to the multilateral institutions that enable them simply to even ignore subpoenas, letters, anything?  Thank you.

Tom Coburn:  Well, first of all, let’s address your first question.  And it is a question that pervades Congress.  Congress is out of balance in my estimation.  Authorizing committees mean zero.  Everything is controlled by approps [sounds like].  The leverage in Congress is appropriations.  And, quite frankly, foreign aid does not run through our International Relations or Foreign Relations Committee; it runs through the Appropriations Committee.

So I was in high school when Kennedy last did that and I cannot answer why it had not been done for the last 20 years, but it will not do any good.  We now fund a $180 billion worth of things that are not authorized now.  And we have $8 trillion worth of things that are authorized that we do not fund.  So authorization means nothing.  The power and the control in Congress is appropriations. 

I think as we work through, we are going to have more compliance with our request, especially in 2009 when it is all transparent.  I have much more leverage on the floor of the Senate if XYZ Agency has not responded, has not met the FFAT Act, has not done anything.  I may lose that vote on the floor but I win that with the American people and the American people are going to demand it.  Washington changes when America wants it to change, and my whole goal since I have been up here is to be somebody with a mouthpiece back to home saying, “This is not right.  It did not happen.  It is not happening.”  And as they become aware of this, especially through the blogosphere, the Americans are finding out what is happening here and they do not like it. 

And you saw that in the last election; you are going to see in the next, and you are going to see it in the next until Washington wakes up and starts listening to Everyday America. And they are not today.  And so, the idea is to create amendments and items on the floor that are painful for members so that they will have to defend it.  I’ll give you a couple of examples.  In the last month, I offered two amendments on the floor of the Senate.  They both essentially said the following:  The Congress has a moral responsibility to not create new spending until they have eliminated wasteful spending, duplication, and fraud in other programs. 

Sounds sensible, does it not?  Lost those both times; the absolute majority of the Senate disagrees with that idea.  Now, think about that.  Now, tell that to the American people.  Tell the American people that they do not really have to live within their budget everyday.  They do not have to get rid of the wasteful things.  They have a credit card that they just get to punch and it gets charged to their grandchildren.  That is exactly what we are doing. 

So, we have severe problems in terms of common sense within the US Senate on how we get out of the mess that faces us in the future.  And as the American people hear about that and as the campaigns come, the people that voted against it, I’m going to help run the campaign up.  “You voted against this twice?  Why?  I mean, there is not an excuse as to why you would not agree that we ought to be efficient with the American taxpayers’ money.”  And it is a sense of the Senate.  It makes no law.  It does not do anything other than release a statement that we should do it; and yet we lost that.  Sixty-five people voted against that.  What does that say to us?  It means real problems.  Alright, last question.  Yes, ma’am.

Sameera Daniels [phonetic]:  Sameera Daniels, Ramsey Decisions.  How much accountability-transparency do you think there is in the bidding process for the foreign USAID?

Tom Coburn:  How much do I think there is?

Samira Daniels:  Yes.

Tom Coburn:  I’m not sure I know the answer to how much there is, generally.  I can say there is not enough.  Remember, we have a complex that has built up and it is the foreign aid help business.  And, unfortunately, more and more of the money that is intended to help people is going to the foreign aid help business.  And that is one of the things this transparency is going to see.  Why should not things be competitively bidded and over-sighted?  Why should they not be measured if you -- and sign a contract?  Not a cost-plus contract; a contract that says, “We are going to hold you accountable for doing this job at this thing.  If not, we are going to take you to court and do that.” 

The idea that we do not do that is laziness on our part in the Congress and laziness on the part of the bureaucracy.  Why should the government get away with doing things in an inefficient, wasteful way when Americans are struggling?  Millions and millions of Americans are struggling, paying a large tax load every year and still struggling and then we waste it away. 

So, I do not know the amount of that.  I do want to recognize Admiral Ziemer.  Where is he?  Thank you for the great job you are doing.  He is USAID-Malaria.

Any other questions?  Well, listen, it has been my pleasure to be here with you.  Thank you, AEI, for their work and thank you for your help on malaria.

Roger Bate:  Thank you very much for coming.  Thank you very much.

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