Unpaid Bills

Remember the initial furor over the government's warrantless surveillance program? Or, subsequent uproar about the nation's phone companies sharing calling records with law enforcement and intelligence agencies? It was an unprecedented invasion of privacy, civil libertarians warned. Just another sign that the Bush Administration was undermining our constitutional rights.

Turns out that suspected terrorists, the ACLU and other concerned parties may have less reason to worry. A Justice Department Inspector General audit reveals that the big telecom firms routinely cut off covert surveillance lines established by the FBI, because the bureau's field offices failed to pay their phone bills (emphasis mine).

Details of the audit can be found in the Thursday edition of USA Today. Some of the report's findings are absolutely mind-boggling. A few extracts from the summary:

As part of our audit, we analyzed 990 telecommunication surveillance payments made by 5 field divisions and found that over half of these payments were not made on time. We also found that late payments have resulted in telecommunications carriers actually disconnecting phone lines established to deliver surveillance results to the FBI, resulting in lost evidence including an instance where delivery of intercept information required by a Foreign Intelligence Surveillance Act (FISA) order was halted due to untimely payment.

According to FBI field division officials, the various types of telecommunication charges, coupled with the number of invoices resulting from each surveillance order, make it difficult to identify and track incoming surveillance bills. The FBI also lacks proper guidance and consistent procedures necessary to track telecommunication surveillance bills accurately. Lacking such headquarters-issued procedures, FBI field divisions have instituted separate, ad hoc tracking mechanisms, which had mixed results in paying bills on time. For example, a primary carrier sent a list to one of the field divisions we tested detailing $66,000 in unpaid telecommunication costs resulting from surveillance activity.

[snip]

According to the OIG investigators who conducted the criminal investigation described at the beginning of this summary report, the lack of formal procedures used by field divisions to handle telecommunication refunds provided opportunities for the FBI employee to steal refunded money. Moreover, our audit found that many FBI employees did not know how to handle refunds of confidential case fund money. One technical agent told us that he sends refunds back to the carrier attached to other telecommunication surveillance bills and requests that they be applied to the remitted bill. Another official told us that he does not know why he receives refunds and has a difficult time matching them to the proper case. In some cases, special agents told us they returned refund checks to the third party draft office simply because they did not know what else to do. Our report recommends that the FBI ensure that employees understand how to properly process refunds of confidential case payments.

The problem apparently stems (in part) from an antiquated financial management system, in use for more than 20 years. Reading the IG summary, it sounds like the FBI software is light-years behind QuickBooks, and other commercial programs. Auditors found that the current system does not allow users to enter details for confidential case payments, including vendor names and invoice numbers. As a result, it's often difficult to determine what phone bills have been paid, and where refunds should be applied.

Inspectors also discovered that the system is ripe for fraud:

As part of our review of the FBI’s oversight of confidential case funds, we also examined the personnel and security files of 35 field division employees who had daily access to confidential case funds. This examination revealed that nearly half of the sampled employees had indications of personal financial problems, such as late loan payments and bankruptcies. As demonstrated by our review of FBI files, the 5-year background investigation program may be helpful in identifying employees who have financial hardships or concerns. Beyond identification, however, the FBI has not developed or implemented procedures that ensure employees with financial concerns are not placed in situations where they are responsible for approving and handling confidential case funds without enhanced supervision. We believe that the FBI needs to develop and implement procedures that ensure employees with serious financial concerns do not regularly handle confidential case funds without additional oversight or safeguards.

In one case, an agent stole thousands of dollars that was supposed to pay for wiretap-related phone bills.

The FBI's latest mess would be comical if the consequences weren't so serious. Since the Justice Department audit only covered a portion of the FBI's telecom payments, we can only wonder how many other wiretap lines--including those authorized by the FISA court--were cut off, simply because the bureau couldn't pay its phone bills on time.

Somewhere, Osama and his minions are smiling.