January 12, 2010

President Obama signs law that includes provision designed to remedy impairments to the statutory independence of Amtrak’s Office of Inspector General (OIG) as identified in Willkie’s June 2009 report.

On December 16, 2009, President Obama signed into law a measure that includes a provision designed to remedy the corporate policies and procedures of the National Railroad Passenger Corporation (Amtrak) that were identified in a June 2009 Willkie report as impairments to the statutory independence of Amtrak’s Office of Inspector General (OIG).

"The Consolidated Appropriations Act, 2010" (Public Law 111-117) requires the U.S. Department of Transportation to withhold a portion of the $563 million operating subsidy Amtrak is due to receive from the federal government in 2010 unless Amtrak’s corporate management and the OIG agree on a set of policies and procedures for their working relationship "that are consistent with the letter and the spirit" of the Inspector General Act of 1978. Following release of the Willkie report, the Senate Appropriations Committee stated in a separate report that "the Committee is appalled by the failure of Amtrak and its Inspector General to maintain even the semblance of a professional working relationship."

To assure that new policies and procedures are actually developed, the new law requires participation by an independent third party—the Council of the Inspectors General on Integrity and Efficiency (CIGIE), an organization charged with improving the effectiveness and professionalism of Inspectors General in the federal government. Amtrak cannot receive its federal subsidies for the third and fourth quarters of Fiscal Year 2010 until a member of CIGIE determines that the new policies comport with the Inspector General Act. In addition, another CIGIE member must evaluate the operational independence of the OIG one year later to ensure that the process mandated by the legislation has resulted in actual change in the working relationship between Amtrak management and the OIG.

Congress established Amtrak’s OIG in 1988 to conduct audits and investigations of Amtrak’s operations, which are heavily subsidized by the federal government. The Inspector General Act gives the OIG broad independent authority to carry out its mission without hindrance from Amtrak management. Earlier this year, a Willkie report prepared by partner Robert Meyer and associates Barbara Block, Nikhil Singhvi, Benjamin Shapiro, and Marianne Dobelbower for the then Inspector General concluded that Amtrak managers improperly interfered with the OIG’s audits, investigations, and operations. The report was publicly released by Senator Charles Grassley (R-IA) and resulted in investigations by Senate and House committees which, in turn, prompted enactment of this new measure.

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