No Oversight Part 3: "Miscellaneous Foreign Contractors" of the State Department
Contractor – Prime recipient that delivers goods or services under contract with a federal agency, and includes corporations, small businesses, universities, not for profits, and any other types of entities that enter into contracts with federal agencies.
State Department Record Anomalies
In No Oversight Part 2 we learned from audits conducted by the Office of the Inspector General that the State Department had serious deficiencies in its record keeping and a clear absence of oversight in issuing government contracts.
Briefly summarized:
- No Inspector General for over 5 years
- Poor record keeping, missing and incomplete contracts
- $6 billion in contracts unaccounted for
Furthermore, the OIG audit/report also criticizes the State Department for having been noticeably understaffed and untrained in regards to issuing government contracts.
“In FY 2012, the Department obligated more than $1.6 billion for approximately 14,000 grants and cooperative agreements worldwide,” Linick reported. “The Office of Inspector General … and other oversight agencies have identified a number of significant deficiencies in the grant-management process.
In this piece, we’ll take a closer look at State Department grants and contracts by accessing publicly available records at USAspending.gov. The website provides information on government agency spending from 2008-2017.
https://www.usaspending.gov/Pages/Default.aspx
Unfortunately, the information at USAspending.gov is also incomplete, but it does shed light on State Department activities throughout Clinton’s tenure (2009-2012).
First Impressions
When examining the recipients of State Department spending allocations during Hillary’s tenure, it becomes clear that the department’s record keeping was woefully inadequate. The identities of grant and contract recipients are masked behind the following titles:
“Miscellaneous Foreign Contractors”
“Foreign Contractors (Undisclosed)”
“Domestic Contractors (Undisclosed)”
“Foreign Awardees (Undisclosed)”
“Foreign Contractor Consolidated Reporting”
You may think that titles such as “Miscellaneous Foreign Contractors” would be rare or buried deep within financial reports, but the opposite is true. These entries appear prominently in the records of every year of Clinton’s tenure (2009-2012). Perhaps more strikingly, the entry “Miscellaneous Foreign Contractors” appear as the top recipients for some fiscal years.
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What sort of enterprises rank with the likes of government contractors such as Lockheed, Cerberus Capital/ Veritas Capital/ DynCorp, Triple Canopy and General Dynamics?
Even the word “Miscellaneous” sounds like a random interests category you find on a match making website. This vague categorization is visibly repeated time and time again throughout the listings.
https://www.usaspending.gov/Pages/default.aspx
Transactions
“In FY 2012, the Department obligated more than $1.6 billion for approximately 14,000 grants and cooperative agreements worldwide,” Linick reported.
Another prominent feature of vague entries such as Miscellaneous Foreign Contractors (MFC) is that they consistently show a far higher amount of transactions compared with all other named recipients. Compare the number of transactions associated with MFC with that of any of the other top contract recipients.
Clearly, MFC transactions far exceed any other government contractor by a significant margin.
State Department Contracts
Let’s have a look at how Miscellaneous Foreign Contractors fared for government contracts from 2009-2012, shall we?
2009
• Miscellaneous Foreign Contractors: $719, 032, 067
• Rank # 1
2010
• Miscellaneous Foreign Contractors: $686,463,958
• Rank # 2
2011
• Miscellaneous Foreign Contractors: $637,351,675
• Rank # 3
2012
• Miscellaneous Foreign Contractors: $952,909,416
• Rank # 1
In 2012 alone, “Miscellaneous Foreign Contractors” amassed just under $1 Billion dollars in government contracts.
The amount of transactions is indicated as just under 50,000.
Now, it’s entirely possible that there were hundred or thousands of smaller recipients lumped together into the category of “Miscellaneous” but if this is true then that would suggest that the State Department has no records of who the recipients are or they do not know how $1 billion dollars was allocated.
Another explanation could be that by labeling certain contracts as MFC it provides a convenient category where information about the recipients can be omitted. Of course, I’m speculating here but a sort of in-house slush fund could be created.
The entry MFC is used throughout numerous government agencies including the DoD, USAID and Homeland Security.
Here are some examples of government contracts where the title MFC is used. Out of hundreds of entries I chose to highlight a few that were $1 million in value or more. You’ll notice that several of these are issued by the “Executive Office of the President".
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This is not the type of record keeping you would expect from the "most transparent" administration in history (Obama).
I’m sure some readers live by Occams Razor (The simplest explanation is most likely aka incompetence) but to misplace 50,000 transaction records and to have that occur time and time again over 4 years doesn’t sit right with me. There is an observable pattern here and it suggests efforts made to conceal financial ties between contractors and the State Department.
“Miscellaneous Foreign Contractors” (MFC) transactions
2011: 39, 000 transactions
2010: 37, 000 transactions
2009: 32, 000 transactions
In all fairness, this pattern is not exclusive to Hillary Clinton’s time at State. The 2008 fiscal year shows that MFC ranked as the department’s number 1 recipient of State Department Contracts. Unfortunately, the online records only date back to 2008, so at least for this examination we are unable to make comparisons of previous fiscal years.
2008: 32,000 transactions (Rank #1: 600,756, 533)
However, this period also coincides with the absence of an Inspector General of the State Department as Frongard resigned in 2007 due to accusations of a conflict of interest.
2012 Contractors
Entering an "Advanced Data" search for "Miscellaneous Foreign Contractors" at the State Department in fiscal year 2012, we arrive at perplexing results. As we saw above MFC accounted for nearly 50, 000 transactions, however the search results only yields 124 contracts/transactions totaling just $1.2 million. It would appear that there are large numbers of 'missing or 'incomplete' contracts in the records. Furthermore, the results that do appear provide little detail beyond the Award agency and the dollar amounts associated with the transactions. It does appear that there are significant amount of transactions that are of $10,000 or less, but with the absence of the majority of the contracts it is an inconclusive assessment at best.
Misc. Foreign Contractors
Entering a search "Miscellaneous Foreign Contractors" or Foreign Contractors (Undisclosed) into the 'recipients’ search bar at https://usaspending.gov actually gives an address adjacent to Reagan Airport in Arlington Virginia.
MFC address given for 2009, 2011 2012:
2011 CRYSTAL DR STE 911, Arlington, Virginia 22202
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Here are some shots of the building adjacent from Reagan airport in Arlington county.
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On one hand, a nondescript building that houses a noodle restaurant, doesn’t exactly look like the kind of place where hundreds of millions of State Department funds would be allocated. Perhaps the address is related to State accounting. On the other hand, this is Arlington Va., home to numerous government agencies and intelligence services.
Likewise, if you enter “Foreign Awardees” or “Domestic Contractors (Undisclosed)” into the search bar an address in Washington DC comes up.
1800 NW Front St., Federal Government Office
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There are numerous government related agencies and businesses at this address.
GSA, GSA credit Union, office of motor vehicles, Whiting Turner Contracting, etc.
This address is also a stone’s throw from the Council on Foreign Relations.
A separate address is given in association with "Foreign Awardees"
1275 First ST. NE, Washington District of Columbia 20417
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This building houses the Consumer Financial Protection Bureau and across the street from Alcohol Tobacco and Firearms (ATF) agency.
In summary, if hundreds of millions of US tax dollars are passing through these addresses, could the 'incomplete' or 'missing' records, described in No oversight Parts 1 & 2 and the 6 billion unaccounted for, be located at these offices? The names of these so called 'contractors' are still unknown, despite the fact that hundreds of millions are apparently passing through these addresses. Is there a simply explanation for this? Were there simply 50,000 small sized "miscellaneous' contracts bundled together in 2012 to make filing easier for staff who were overwhelmed or backlogged?
A first step in making sense of this mess would be to identify these "Foreign Contractors" and the nature of the services they provided to the State Department.
Where is the Money Going?
The categories of Miscellaneous Foreign Contractors, Foreign Contractors and other titles appear prominently throughout the State Department records. The issue here is how can this government institution continue to allocate billions of American taxpayer dollars to contractors with such dismal record keeping? If this brief overview teaches us anything is that it demonstrates a total lack of oversight where taxpayers money disappears by the hundreds of millions into vague categories such as these.
Finally, this is a good resource for researchers and I encourage others to make use of it when investigating financial aspects of government agencies.