Congressional Record: September 13, 2006 (House) Page H6498-H6501 FEDERAL FUNDING ACCOUNTABILITY AND TRANSPARENCY ACT OF 2006 Mr. TOM DAVIS of Virginia. Mr. Speaker, I move to suspend the rules and pass the Senate bill (S. 2590) to require full disclosure of all entities and organizations receiving Federal funds. The Clerk read as follows: S. 2590 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Federal Funding Accountability and Transparency Act of 2006''. SEC. 2. FULL DISCLOSURE OF ENTITIES RECEIVING FEDERAL FUNDING. (a) Definitions.--In this section: (1) Entity.--The term ``entity''-- (A) includes, whether for profit or nonprofit-- (i) a corporation; (ii) an association; (iii) a partnership; (iv) a limited liability company; (v) a limited liability partnership; (vi) a sole proprietorship; (vii) any other legal business entity; (viii) any other grantee or contractor that is not excluded by subparagraph (B) or (C); and (ix) any State or locality; (B) on and after January 1, 2009, includes any subcontractor or subgrantee; and (C) does not include-- (i) an individual recipient of Federal assistance; or (ii) a Federal employee. (2) Federal award.--The term ``Federal award''-- (A) means Federal financial assistance and expenditures that include grants, contracts, subgrants, subcontracts, loans, awards, cooperative agreements, purchase orders, task orders, delivery orders, and other forms of financial assistance; (B) does not include individual transactions below $25,000; and (C) before October 1, 2008, does not include credit card transactions. (3) Searchable website.--The term ``searchable website'' means a website that allows the public to-- (A) search Federal funding by any element required by subsection (b)(1); (B) ascertain through a single search the total amount of Federal funding awarded to an entity, by fiscal year; and (C) download data included in subparagraph (A) included in the outcome from searches. (b) In General.-- (1) Website.--Not later than January 1, 2008, the Office of Management and Budget shall, in accordance with this section and section 204 of the E-Government Act of 2002 (Public Law 107-347; 44 U.S.C. 3501 note), ensure the existence and operation of a single searchable website, accessible by the public at no cost to access, that includes for each Federal award-- (A) the name of the entity receiving the award; (B) the amount of the award; (C) information on the award including transaction type, funding agency, the North American Industry Classification System code or Catalog of Federal Domestic Assistance number (where applicable), program source, and an award title descriptive of the purpose of each funding action; (D) the location of the entity receiving the award and the primary location of performance under the award, including the city, State, congressional district, and country; (E) a unique identifier of the entity receiving the award and of the parent entity of the recipient, should the entity be owned by another entity; and (F) any other relevant information specified by the Office of Management and Budget. (2) Scope of data.--The website shall include data for fiscal year 2007, and each fiscal year thereafter. (3) Designation of agencies.--The Director of the Office of Management and Budget is authorized to designate one or more Federal agencies to participate in the development, establishment, operation, and support of the single website. In the initial designation, or in subsequent instructions and guidance, the Director may specify the scope of the responsibilities of each such agency. (4) Agency responsibilities.--Federal agencies shall comply with the instructions and guidance issued by the Director of the Office of Management and Budget under paragraph (3), and shall provide appropriate assistance to the Director upon request, so as to assist the Director in ensuring the existence and operation of the single website. (c) Website.--The website established under this section-- (1) may use as the source of its data the Federal Procurement Data System, Federal Assistance Award Data System, and Grants.gov, if all of these data sources are searchable through the website and can be accessed in a single search; (2) shall not be considered in compliance if it hyperlinks to the Federal Procurement Data System website, Federal Assistance Award Data System website, Grants.gov website, or other existing websites, so that the information elements required in subsection (b)(1) cannot be searched electronically by field in a single search; (3) shall provide an opportunity for the public to provide input about the utility of the site and recommendations for improvements; and (4) shall be updated not later than 30 days after the award of any Federal award requiring a posting. (d) Subaward Data.-- (1) Pilot program.-- (A) In general.--Not later than July 1, 2007, the Director of the Office of Management and Budget shall commence a pilot program to-- (i) test the collection and accession of data about subgrants and subcontracts; and (ii) determine how to implement a subaward reporting program across the Federal Government, including-- (I) a reporting system under which the entity issuing a subgrant or subcontract is responsible for fulfilling the subaward reporting requirement; and (II) a mechanism for collecting and incorporating agency and public feedback on the design and utility of the website. (B) Termination.--The pilot program under subparagraph (A) shall terminate not later than January 1, 2009. (2) Reporting of subawards.-- (A) In general.--Based on the pilot program conducted under paragraph (1), and, except as provided in subparagraph (B), not later than January 1, 2009, the Director of the Office of Management and Budget-- (i) shall ensure that data regarding subawards are disclosed in the same manner as data regarding other Federal awards, as required by this Act; and (ii) shall ensure that the method for collecting and distributing data about subawards under clause (i)-- (I) minimizes burdens imposed on Federal award recipients and subaward recipients; (II) allows Federal award recipients and subaward recipients to allocate reasonable costs for the collection and reporting of subaward data as indirect costs; and (III) establishes cost-effective requirements for collecting subaward data under block grants, formula grants, and other types of assistance to State and local governments. (B) Extension of deadline.--For subaward recipients that receive Federal funds through State, local, or tribal governments, the Director of the Office of Management and Budget may extend the deadline for ensuring that data regarding such subawards are disclosed in the same manner as data regarding other Federal awards for a period not to exceed 18 months, if the Director determines that compliance would impose an undue burden on the subaward recipient. (e) Exception.--Any entity that demonstrates to the Director of the Office of Management and Budget that the gross income, from all sources, for such entity did not exceed $300,000 in the previous tax year of such entity shall be exempt from the requirement to report subawards under subsection (d), until the Director determines that the imposition of such reporting requirements will not cause an undue burden on such entities. (f) Construction.--Nothing in this Act shall prohibit the Office of Management and Budget from including through the website established under this section access to data that is publicly available in any other Federal database. (g) Report.-- (1) In general.--The Director of the Office of Management and Budget shall submit to the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Government Reform of the House of Representatives an annual report regarding the implementation of the website established under this section. (2) Contents.--Each report submitted under paragraph (1) shall include-- (A) data regarding the usage and public feedback on the utility of the site (including recommendations for improving data quality and collection); (B) an assessment of the reporting burden placed on Federal award and subaward recipients; and (C) an explanation of any extension of the subaward reporting deadline under subsection (d)(2)(B), if applicable. [[Page H6499]] (3) Publication.--The Director of the Office of Management and Budget shall make each report submitted under paragraph (1) publicly available on the website established under this section. SEC. 3. CLASSIFIED INFORMATION. Nothing in this Act shall require the disclosure of classified information. The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Virginia (Mr. Tom Davis) and the gentleman from Illinois (Mr. Davis) each will control 20 minutes. The Chair recognizes the gentleman from Virginia. General Leave Mr. TOM DAVIS of Virginia. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and include extraneous material on the bill under consideration. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Virginia? There was no objection. Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield myself such time as I may consume. Majority Whip Roy Blunt and I originally introduced H.R. 5060 to amend the Federal Financial Assistance Management Improvement Act of 1999 to require data with respect to Federal financial assistance to be available for public access in a searchable and user-friendly form. Our bill passed the House on June 21, 2006. Today, we are taking up the Senate companion bill, S. 2590, introduced by Senator Coburn and Senator Obama, which would require Federal financial assistance data, as well as data about government contracts, to be available for public access. This bill would require the Office of Management and Budget to create a Web site listing all grant awards and contracts in a manner that would be easily accessible and free of charge. In a nutshell, this is about information to taxpayers about how their hard-earned dollars are being spent. Each award or contract would have to be listed on the Web site within 30 days of enactment of this act. Currently, no such real- time disclosure is required to grant awards, and data that is available often is not timely. Further, there is no central database of all entities receiving Federal funds, including the nearly 30,000 organizations that are awarded nearly $300 billion in Federal grants each year. In fact, several agencies have taken different approaches to publicizing information about grantees, and all too often little or no information is available online. This legislation puts into place a framework that sheds light on the Federal grant process, allowing anyone with access to the Internet the ability to review and search financial assistance rewards. Sunshine, Mr. Speaker, is the best disinfectant. This legislation will provide greater transparency in the grant-making process and require continued improvement of the already existing, but inadequate transparency, in Federal contract awards. I want to thank the gentleman from Missouri for recognizing the importance of this issue. I want to congratulate him on bringing this measure forward. I also want to thank our ranking member, Mr. Waxman, for reaching across the aisle to move this legislation forward in a timely manner. Mr. Speaker, I reserve the balance of my time. Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I might consume. Mr. Speaker, S. 2590 calls for the creation of a new searchable database of all Federal grants and contracts to be made publicly available on the Internet. This will require the Office of Management and Budget to develop a database that can be useful to individuals and organizations researching Federal grant funding. In addition, it should allow the public to better access information about the billions of dollars spent on Federal contracting. I would like to highlight one important difference between this bill and H.R. 5060, which passed the House in June. The database created under H.R. 5060 was missing a key component, information about Federal contract spending. Contract information is essential to meaningful public oversight. As Federal contract spending increases, and from 2000 to 2005, it has soared by 86 percent from $203.2 billion to $377.5 billion. There is a vital need for the public to be able to track and understand this spending. I want to thank Chairman Davis and Majority Whip Blunt for reconsidering their position on the contract information issue and hope that our efforts today will make Federal contract information freely and easily accessible to the public. I also want to commend the hard work of Senator Coburn and Senator Obama on this legislation. As Members of Congress, we have a responsibility to increase public understanding of Federal spending and public access to information about how taxpayer dollars are spent. Currently, the public has access to a grants data system, the Federal Assistance Award Data System, that provides limited information about domestic grants. But this system is unwieldy and difficult to use. In addition, there is a publicly available database of contracts, the Federal Procurement Data System, FPDS; but it is too plagued with problems. So, today, we try to improve on those systems. The key to success will be implementation. Without it, we will be where we are now, with poor access to information. If implemented properly, public oversight of Federal spending will, indeed, increase. In closing, I must admit that I find it incredible that it has taken an act of Congress to make this information public. All of this information should be already available to the public. This is just one victory in our continuing fight for public access to government information. Mr. Speaker, I reserve the balance of my time Mr. TOM DAVIS of Virginia. Mr. Speaker, I yield such time as he might consume to the gentleman from Missouri (Mr. Blunt), who has had a lot to do with originating this bill in the House and helping us work out the details with the Senate. Mr. BLUNT. Chairman Davis, thank you for yielding, and thank you for your great work on this bill. Mr. Speaker, this week we are having a discussion in the House about earmarks and earmark reform. Yet there is another process in the Federal Government that, despite spending $300 billion a year, has almost no access as we stand here today. Each year the Federal Government gives out thousands of grants to various organizations and entities. All told, some 30,000 organizations a year receive grants. Yet there is no central system available to the public or even to the Congress to determine who is receiving these taxpayer funds and how they are being spent. That is why Chairman Davis and I introduced, and in June the House passed, H.R. 5060 with the support of Mr. Waxman and Mr. Davis of Illinois. This was a bill to require a publicly searchable database of all Federal grants. Our colleagues in the other body, led by Senator Coburn and Senator Obama, passed a slightly different bill that established a similar but different database for grants and Federal contracts. Last week we were able to collectively announce a final agreement representing the best element of both bills. Our agreement requires the Office of Management and Budget to establish a searchable Web site listing all recipients of Federal financial assistance such as loans and grants, as well as a separate database covering all contracts over the $25,000 reporting threshold. This site will provide an invaluable tool enabling the Congress, the public, and the media to easily determine who is receiving taxpayer funds and doing business with the government. This information will be critical in uncovering wasteful spending and ensuring compliance with existing Federal laws. There are numerous examples of wasteful government grants, such as millions of dollars spent with the National Institute of Mental Health to study what makes a meaningful day for college students, or to study how college students decorate their dorm rooms. There was even one example of a grant for $700,000 at the EPA where the grant was given without any knowledge, apparently, of what work was to be performed as a result of the grant. The bill we are passing today will empower everyone with access to the Internet to begin reviewing the Federal [[Page H6500]] grants and other forms of taxpayer assistance to look for waste, fraud, abuse or just to simply know who, in their community, or in other communities they are aware of, are receiving these grants. This legislation will also help to ensure that Federal laws are adhered to by those receiving taxpayer funds. Frequently, Federal law imposes various restrictions or requirements on Federal grantees. For example, the Congress has entities or has required that entities receiving funds under our Global AIDS Program have a firm policy opposing prostitution and sex trafficking. Yet last year, the Government Reform Subcommittee on Criminal Justice, Drug Policy and Human Resources uncovered that a USAID grantee was subcontracting taxpayer funds to, in fact, a pro-prostitution organization. Our bill required grantees to also disclose their subgrantees, thus making it easier to ensure compliance with important Federal policies, like those applicable to the Global AIDS Program. {time} 1945 This legislation will also ensure compliance with existing lobbying restrictions. The 1995 Lobbying Disclosure Act prohibits 501(c)4 organizations from receiving Federal grants and lobbying, even with their own funds. The restriction has been difficult to enforce. The Inspector General for the EPA determined in 2004, for example, that for 5 years the Consumer Federation of America had spent some of the $5 million it received in Federal grants to lobby the government. A central database of entities receiving Federal grants would provide an important tool to ensure compliance with existing law. It is my belief that this bill will provide important information to all Americans and serve as a powerful tool to improve how government spends precious taxpayer funds. I want to thank Chairman Davis and Ranking Member Waxman for their assistance in moving this legislation forward, and in particular I want to thank the staff of the Government Reform Committee, particularly Ellen Brown, John Brosnan and Ed Puccarella, for their efforts. I urge passage of this important legislation. Mr. DAVIS of Illinois. Mr. Speaker, I continue to reserve the balance of my time. Mr. TOM DAVIS of Virginia. I yield 3 minutes to the gentleman from Indiana (Mr. Souder). (Mr. SOUDER asked and was given permission to revise and extend his remarks.) Mr. SOUDER. Mr. Speaker, I first want to thank our majority whip, the chairman of Government Reform Committee and Senator Coburn in particular for the way they moved this bill, introduced the bill and moved this bill through. We all realize that the government needs to be more transparent and we are working towards those directions. But as you heard Mr. Blunt mention earlier, our subcommittee, the one that I chair, had one of the more frustrating experiences. Chairman Davis, myself, many of the subcommittee chairmen in Government Reform's job is to do oversight over the executive branch, and it is very hard to get the data we need to do proper oversight. We started in December, actually October 6, 2005, to ask USAID for some information on whether they were following congressional guidelines as far as a particular group and program that we had been tipped off may not have been following those guidelines. USAID at the meeting denied they were funding this organization. We asked them for documentation. They said documentation didn't exist. My staff director, Marc Wheat, and our hard-working staff, dug up on Google in actuality documents that the State Department said didn't exist. We also had people from other agencies that leaked us documents. So they in effect came to us and told us a mistruth about what existed and didn't exist. They also buried it in subcontractors. This organization, SANGRAM, had in fact been a high risk candidate already because they had publicly opposed having prostitution be illegal. They had written, We believe that when involuntarily initiation into prostitution occurs, a process of socialization within the institution of prostitution exists, whereby the involuntary nature of the business changes increasingly into one of active acceptance, not necessarily with resignation. This is not a coercive process.'' In other words, they believe prostitution is a legitimate form of a job. Now, that is contrary to Federal law. But even though this group had taken that position and even though our government had let them participate, they had tried to disguise in the grant process who was getting the money. We had a case of an organization that went in to rescue some women from prostitution, and when they were rescued, this organization, funded with taxpayer dollars, contrary to U.S. law, went and took the women back into prostitution in Asia. We cannot on the one hand be trying to get women out of prostitution, and on the other hand be funding it contrary to law. The fundamental problem here was we couldn't follow the grants. The reason you need transparency and the reason we need transparency in the executive branch and the reason we need transparency in the legislative branch is so we can at least see where the money goes. Then you can debate with your politicians whether it is the right policy or the wrong policy. But when you can't find where the money goes, it is impossible to do responsible legislation and absolutely impossible to do responsible oversight. I thank the chairman of the Government Reform Committee for making the executive branch be accountable as well, and for our leader and for the cooperation of the Democrats on this issue. This should be a bipartisan effort. Let the sun shine on all earmarks and let the sun shine on all grants Mr. Speaker, I rise in support of S. 2590, Federal Funding Accountability and Transparency Act. The database envisioned in this act will be a vital tool for creating a more open spending process. As we all know, government spending is often an impenetrable web of confusion and dead-ends. Exactly who receives taxpayer money may be difficult to ascertain. In some instances, agencies cannot answer definitively if an organization receives taxpayer funding or not. Such messy records and bookkeeping would not be tolerated in the private sector. Furthermore, the government does not allow the private sector to keep such abysmal records. Establishing the database proposed in this bill will cut through this web and allow easy access to who receives money and for what purpose. The need for this type of system will help not only in area of earmarks, but also in the awarding of government grants and contracts. The necessity of such a database is best illustrated by an exchange between USAID and the Government Reform Subcommittee on Criminal Justice, Drug Policy, and Human Resources. In my capacity as Chairman of the subcommittee, on October 6, 2005, I sent a letter to USAID seeking information about its funding of the pro-prostitution non- governmental organization called SANGRAM in violation of Public Law 108-25, the United States Leadership Against HIV/AIDS, Tuberculosis, and Malaria Act of 2003. According to an unclassified State Department memorandum obtained by subcommittee staff, Restore International, an anti-trafficking NGO that works with law enforcement agencies in India, was ``confronted by a USAID-funded NGO [SANGRAM] while the former attempted to rescue and provide long-term care for child victims of sex trafficking. The confrontation led to the release of 17 minor girls--victims of trafficking--into the hands of traffickers and trafficking accomplices.'' According to this memorandum, SANGRAM ``allowed a brothel keeper into a shelter to pressure the girls not to cooperate with counselors. The girls are now back in the brothels, being subjected to rape for profit.'' On November 16, 2005, a USAID briefer asserted to Government Reform Committee staff that USAID had ``nothing to do with'' the grant to the pro-prostitution SANGRAM, and that the Committee's inquiries were ``destructive.'' The Subcommittee is now in possession of documents that demonstrate that USAID must provide a revised briefing to Congress on its true role. These documents prove that USAID money financed the pro-prostitution SANGRAM through a second organization named Avert, which was established with the assistance of four USAID employees as a pass- through entity. USAID has held the ex-officio Vice Chairmanship of Avert since inception. According to these documents, the USAID board member of Avert voted twice to award funding to SANGRAM (July 27, 2002 and again on December 3, 2004), the last time [[Page H6501]] being some 18 months after the provisions of Public Law 108-25 prohibited taxpayer funding of pro-prostitution groups like SANGRAM. That SANGRAM was a high-risk candidate for not complying with Public Law 108-25 should not have been a surprise to USAID. SANGRAM was a cosigner, along with many other high-risk candidates, of a May 18, 2005 letter to President Bush opposing the anti-prostitution pledge. Subcommittee staff found posted on a USAID-sponsored Web site, a 5- year-old report from SANGRAM that states: ``We believe that when involuntary initiation into prostitution occurs, a process of socialization within the institution of prostitution exists, whereby the involuntary nature of the business changes increasingly into one of active acceptance, not necessarily with resignation. This is not a coercive process.'' I agree with President Bush that ``It takes a special kind of depravity to exploit and hurt the most vulnerable members of society. Human traffickers rob children of their innocence; they expose them to the worst of life before they have seen much of life. Traffickers tear families apart. They treat their victims as nothing more than goods and commodities for sale to the highest bidder.'' It is inconceivable that an organization like SANGRAM could have received funding from the American taxpayer had USAID put in place an adequate management system to carry out Public Law 108-25. On December 13, 2005, a large briefing team from the Department of State and USAID met with staff from the Subcommittee I chair concerning this matter, in order to demonstrate ownership of the problem and to layout corrective measures being taken. To my dismay and astonishment, the briefers were not prepared to discuss (and exhibited little knowledge of) the pass-through entity known as Avert that USAID established and which served as the mechanism whereby NGOs in India were monitored and financed with American tax dollars. Subcommittee staff knew more than the State/USAID briefing team about this matter thanks to Google searches on the web for critical documents that had not been provided to the Subcommittee by the Administration. In the months since that December 13 appeal was made for an electronic registry, the Subcommittee request has inspired two pieces of legislation: first in the other body, and the second we are debating here today. This scandal of financing pro-prostitution groups by USAID was highlighted by the authors in both chambers as illustrating the need for this legislation. I urge the swift passage of this legislation. If we are going to continue to spend tax-payer money, the American people deserve to know how it is being spent and by whom. Flagrantly disgusting examples of the misuse of tax-payer funds must be made known and eliminated. Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I will close by just simply saying that I don't believe that we can overemphasize the importance of transparency in government, and especially as it relates to contracting. I would urge passage of this legislation. I am proud to be a cosponsor of it Mr. WAXMAN. Mr. Speaker, the bill we are considering today, S. 2950, requires the Office of Management and Budget to create a searchable database of federal grants and contracts accessible to the public on the Internet. I am pleased to support this bill. In June, the House considered a watered down version of this bill, H.R. 5060. The House bill included only grants, leaving out hundreds of billions of dollars in annual spending on federal contracts. At the time, I urged Chairman Davis to work with me to include contract disclosure in the legislation. The bill before us today is stronger and more comprehensive than the bill passed by the House in June. While the House bill covered only grants, the database created under this legislation will include all federal grants and contracts. If this bill is implemented properly, any citizen with Internet access will be able to examine a comprehensive set of records for information about federal spending. For each grant or contract awarded, the database will include details about the recipient of the award, as well as the amount of the award, the purpose of the funding action, and other relevant information. There has been considerable confusion about what this bill does and does not do. The information that this bill requires to be posted on the Internet is not secret. In fact, there are existing databases that are accessible to Congress and the public that are already required to include the information covered in this bill. Under current law, for example, there is a federal procurement database maintained by the General Services Administration. This database, called the Federal Procurement Data System, is required to contain significant amount of information about each federal contract. Similarly, there is a grants database maintained by the Census Bureau, the Federal Assistance Data System, which collects information about domestic financial assistance awards. In addition, grants.gov and various databases maintained by individual agencies, contain some of this information. But these databases don't always contain the information that they are supposed to contain. They aren't always kept up to date. And they can be difficult to use. In essence, what this bill does is require that these existing databases be compiled into a new database that is more organized and more accessible. Ordinarily, I would not be in favor of legislation that requires the government to spend money repackaging data that is already in existence. But this bill is an exception. The current state of the existing databases is so poor that Congress is justified in passing new legislation. Ultimately, implementation will be key to the success of this bill. If the administration is not committed to making the legislation work, all we will get is another incomplete and hard-to-use database. My hope is that by passing this bill with broad, bipartisan support, we are sending a signal to the administration that it needs to do a better job. Members of Congress from both parties and both the House and Senate have worked hard to make this bill a reality. I want to compliment Senator Obama and Senator Coburn, in particular, for their leadership. They put aside partisanship to forge the bill we are considering today. I also want to thank Chairman Davis for agreeing to expand the scope of this bill to cover contracts. The legislation we are passing today is not comprehensive reform; it will not restore honesty and accountability in government. It's a modest, bipartisan step in the direction of open government. But in the climate we're currently in, even a small step forward is worth supporting and celebrating. I urge support of this legislation. Mr. DAVIS of Illinois. Mr. Speaker, I yield back the balance of my time. Mr. TOM DAVIS of Virginia. Mr. Speaker, I urge all Members to support the passage of S. 2590. Mr. Speaker, I yield back the balance of my time. The SPEAKER pro tempore. The question is on the motion offered by the gentleman from Virginia (Mr. Tom Davis) that the House suspend the rules and pass the Senate bill, S. 2590. The question was taken; and (two-thirds having voted in favor thereof) the rules were suspended and the Senate bill was passed. A motion to reconsider was laid on the table. ____________________