fearlessfos_thumb.jpgYesterday, I laid out two major problems with the current Federal IG system: Inherent conflict of interest and inability to quickly staff up in the event of an emergency. Today and tomorrow, I offer some suggestions on how to deal with that.

One of the oldest law enforcement agencies in the United States is the New York City Department of Investigations (hereinafter, “NYC DOI” or just “DOI”). Begun in 1873 in a reaction to the looting of the NYC treasury by Boss Tweed and his Tammany Hall cohorts, it was originally known as the Office of the Commissioner of Accounts. Over the next 30 years a series of strong and aggressive DOI Commissioners, including the famous Raymond B. “Fearless” Fosdick {yes, people there really was a historical Fearless Fosdick–not just the comic strip character} increased the powers and scope of the agency including grants of subpoena power and the power to take testimony under oath.

When a former DOI commissioner was elected Mayor, the new DOI Commissioner took on what he perceived to be politicization of the prosecution of crimes by the District Attorney’s Offices:

1917 Commissioner Leonard Wallstein, who grows impatient with the slow pace of the District Attorney in prosecuting DOI cases, attempts to direct prosecution of corrupt officials. Wallstein arranges for warrants to be issued against a clerk and three inspectors who tried to have a professional pickpocket operate among the long lines of applicants waiting for licenses. The Chief magistrate and a representative from DOI present the case to a Grand Jury, who indict the three inspectors. The clerk flees the state.

Prior to 1977, each City Agency’s Commissioner appointed, in consultation with the Mayor’s Office, their own Inspector General. Like Federal IG’s today, NYC IG’s suffered from an inherent conflict of interest. They were subordinate to, and reported to the Commissioner of the agency they were supposed to inspect. That Commissioner set the IG’s budget and determined what resources (like cars, wiretap and recording equipment, access to forensic labs, etc) the IG could employ. Commissioners could easily torpedo investigations out of malice or simple ignorance. Also, not every agency had an IG, nor did IG’s at each agency have the same powers or obligations, it was all very random.

In 1978, Mayor Ed Koch issued an Executive Order which standardized the IG System in NYC and for the first time gave DOI some limited control over the work of the IG’s. They still were employees of their respective Commissioners and still wholly dependant on those Commissioners for everything in their budgets, but now they had “dual reporting” responsibilities. This meant a Commissioner could not easily stifle or cover up an investigation because now, by law, the IG had to tell someone who was independent of the Commissioner. This let so much sunshine into the system and resulted in a lot of cases being made. It also emboldened IG’s to both be more aggressive in their current work, and to lobby for the elimination of the remaining conflicts of interest issues.

By 1986, Mayor Koch issued a new Executive Order that placed the IG’s squarely under the control of DOI. Although the IG’s were often physically located in or near the same office buildings as their “host” agencies, and the host agencies were still responsible for providing some equipment and logistical support (which in the case of contractor fraud and other investigations of fraud, waste and abuse by others outside the agency, they were usually motivated to do); the chain of command now went from the IG, to the Deputy Commissioner for IG’s (a role similar to that of DAG to the USA’s in DOJ), to the Commissioner.

The Commissioner of the host agency had no “right” to be briefed on the IG’s activities, though where appropriate—such as in the case of fraud upon the agency by those outside it—professional courtesy often led to collaboration between the IG’s and the host agency. Further, in instances where the Commissioner or other high level official within the host department was implicated in the investigation and attempted to obstruct, the push-back came from a fellow Commissioner with direct access to both the Mayor and City Council. Further, DOI allowed for the sharing of information between IG’s from different agencies and allowed for both intensification of expertise, but also joint investigations. This led to dramatic increases in cases made against mafia controlled contractors who had been defrauding the City for decades. Major cases came out of the “windows club,” “concrete club,” “drywall club,” and “sewer club” investigations and those inroads contributed to the eventual prosecution of the Commission Case (prosecution of the heads of the “five Families” of the NYC Mafia) by SDNY.

The Federal Government needs a cabinet level Secretary similar to the NYC DOI Commissioner. This person could run interference for the IG’s with both the President and Congress. In this way, the inherent conflict of interest currently existing could be, almost, eliminated.

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