House Committee Wants To Drop Proposal To Expand Offshore Drilling Oversight
House Republicans want to drop one of the key components of the Interior Department's overhaul of the troubled agency responsible for oversight of offshore drilling -- expanding the enforcement of regulations to contractors.
Though BP and rig owner Transocean have been largely blamed for last year's Deepwater Horizon disaster, contractor Halliburton has come under scrutiny for its cementing work on the job. The presidential commission investigating the tragedy uncovered documents showing that several separate tests by Halliburton indicated the cement was "unstable," yet didn't report all of those results to BP. Halliburton, which has claimed that those were preliminary tests, did admit that it did not perform a stability test on the actual cement recipe used on the well. The oil services giant has rejected blame for the failed cement job and pointed the finger at BP.
In the wake of the tragedy, Interior's Bureau of Ocean Energy Management Regulation and Enforcement expanded its rules beyond just the oil companies that hold the drilling leases. But a committee report released with Interior's fiscal 2012 spending bill limits that expansion (h/t The Hill):
The Committee is concerned with the Bureau's stated intentions for the expansion of regulatory authority over non-lease holders under the Outer Continental Shelf Lands Act (OCSLA). The authority and need for this action has not been explained or justified to the Committee, nor how this diversion of limited resources would impact the Bureau's current mission and objectives identified in the fiscal year 2012 request. The agency is directed to use all the resources provided toward the regulatory efforts presented in the fiscal year 2012 request and that no funds be expended for other purposes until the agency has fully explained its authority, intentions and objectives to the Committee and the public.
A spokesperson for the committee did not return calls for comment.
Financial Services Panel Puts Spin On History
For at least the second time in the last several months, the House Financial Services Committee puts its own spin on history. This afternoon, the committee tweeted:
#DoddFrank fails to address biggest cause of financial crisis: government-sponsored enterprises, Fannie Mae & Freddie Mac http://ow.ly/5BA7r
Yet federal housing data refutes that claim, showing that the private sector was responsible for more than 84 percent of the subprime mortgages issued in 2006, as reported by McClatchy Newspapers. And only one of the top 25 subprime lenders in 2006 was subject to the housing law (which has been slammed by conservative critics) that pushed for more loans to lower class Americans.
Conflict Of Interest Guidelines For Doctors To Be Watered Down, Says Watchdog Group
A new guideline that would require federally-funded researchers to publicly disclose financial interests is in danger of being watered down, says nonpartisan government watchdog, the Project on Government Oversight.
The National Institutes of Health proposed tightening its conflict of interest guidelines in 2010 to require doctors and scientists funded by the agency to disclose any payments they receive from private companies in a public database. But POGO is concerned that the Office of Management and Budget, which reviews prominent new regulations, will drop or weaken the requirement.
Past conflict of interest scandals included a study that revealed fatal complications from an experimental treatment for kidney inflammation using a drug made by pharmaceutical giant Schering AG. A senior NIH official (who was also a paid consultant to Schering AG) failed to stop the study or to warn doctors who were prescribing the drug for similar disorders, reported the LA Times in 2003.
Wells Fargo Ordered To Pay Whistle-Blower $7 Million
A whistle-blower was awarded nearly $7 million by an arbitration panel of the Financial Industry Regulatory Agency over claims he was fired by Wachovia/Wells Fargo in retaliation for cooperating with FINRA.
Greg Kipple sent a letter to FINRA explaining his role in a dispute over a customer's complaint after sending a draft to Wells Fargo's legal counsel and not getting a response. Two weeks later, he was terminated for what Kipple claims was retaliation for "truthfully responding to regulatory inquiry from FINRA."
Pentagon Muzzles Info On Military Dogs
The Pentagon's crackdown on the distribution of unclassified information extends to information about the military's use of working dogs. A 2011 U.S. Army manual titled "Military Working Dogs," which previously was approved for public release, is now restricted to just Pentagon staffers and contractors. In addition, reported the Federation of American Scientists' secrecy news blogger Steven Aftergood, copies of the original 2005 manual have been removed from Army websites.
Aftergood looked at the wider implications of such steps, writing:
The net loss of public access to information in this case illustrates a new trend that is at odds with the Obama Administration's declared policy. Although the President promised to create "an unprecedented level of openness in Government," in practice new barriers to access to unclassified information continue to arise.
Elsewhere at the Pentagon, the DoD allowed contractors who were paid almost $200 million to supply highly-coveted armored trucks to more or less write their own contracts, according to a Pentagon inspector general's report. The deployment of Mine Resistant Ambush Protected Vehicles was a top priority in the military and the IG had tough words about the relationship with Jacobs Technology and SAIC, saying that it "increased the risk for potential waste or abuse on the contract," notes Wired.com. Among the critiques was that the contractors paved the way for themselves to be awarded the next phase of the contract by working with the Pentagon "to prepare the contract requirement."
"The contractor's performance of these functions violates the two underlying principles in the acquisition process: preventing unfair competitive advantage and preventing the existence of conflicting roles that might bias a contractor's judgment," the inspector general writes.
EPA Did Not Regulate New Drinking Water Contaminants For More Than 14 Years
The Environmental Protection Agency may have helped impede progress in ensuring safe drinking water, according to a new Government Accountability Office report. Since 1996, the agency is required to determine whether to regulate five chemicals that present the greatest public health concern -- but it failed to recommend any new contaminants for regulation for almost 15 years until February 2011, when it reversed a decision not to regulate perchlorate, an ingredient in rocket fuel. The process behind the 2008 decision not to regulate the chemical was criticized for using unusual methodologies to develop estimates for exposure and for downplaying the risk to certain groups in the population.
Per the report:
EPA's selection of contaminants for regulatory determination in 2003 and 2008 was driven by data availability--not consideration of public health concern. EPA does not have criteria for identifying contaminants of greatest public health concern and based most of its final determinations to not regulate 20 contaminants on the rationale of little or no occurrence of the contaminants in public water systems. Moreover, EPA's testing program for unregulated contaminants--which can provide key data to inform regulatory determinations--has fallen short in both the number of contaminants tested and the utility of the data provided because of management decisions and program delays.
SEC Needs To Strengthen Post-Employment Procedures, Says GAO
The Securities and Exchange Commission needs to strengthen its procedures for employees who are about to go into the private sector, reported the Government Accountability Office. About 37 percent of the 2,000 employees who left the agency between 2005 and 2010 now work in jobs that are relevant to SEC examinations and investigations. And 16 law and consulting firms accounted for more than one-third of the former SEC staffers who later appeared before the agency, based on notices they are required to file.
The agency has not done enough to document the advice it gives to post-employees regarding potential conflicts of interest, though the GAO says that SEC ethics officials "routinely" advise staffers on post-employment issues.
A former chairman of the SEC blasted Dodd-Frank, charging that the financial regulatory overhaul is doomed to fail.
Harvey Pitt, who was the agency's chairman from 2001 to 2003, said on Tuesday before the Senate Banking Committee:
"The act is unduly complex, adds more layers of regulatory bureaucracy to an already over-bloated bureaucracy, makes financial regulation more cumbersome and less nimble than it already was," said Mr. Pitt, now the chief executive of Kalorama Partners, a Washington consulting firm that has represented the Alaska USA Federal Credit Union and legal powerhouse Skadden Arps.
Pitt has been a tough critic of the act -- last December he gave it an "F," claiming that it puts the cart before the horse since the causes of the crisis are still not fullly understood.
Last November, Pitt joined executives from Goldman Sachs, Morgan Stanley, JPMorgan Chase, Deutsche Bank and the International Swaps and Derivatives Association during a meeting with SEC officials to express their concerns about the regulation of over-the-counter derivatives.
Feds Probe Alleged Off-Label Use By Cephalon
The Justice Department is probing Cephalon's alleged off-label promotion of its medication for chronic lymphocytic leukemia while the biotech company is about to be acquired by Teva Pharmaceuticals for $6.2 billion.
The feds are concerned that its popular Treanda medication is being used for first-line treatment of non-Hodgkin's lymphoma -- for which it has not been approved -- sources told Pharmalot.