A recent report by the U.S. Senate Health, Education, Labor and Pensions Committee revealed a combined $521 million in benefits for veterans, and from the Defense Department benefits for veterans in 2010 was received by 20 for-profit schools.

Provided by the U.S. Senate Health, Education, Labor and Pensions committee

For-profit institutions are required to follow the 90/10 rule. That is, only 90 percent of their revenue may come from federal aid. If the formula used for determining the 90 percent included benefits for members of the military, many of these colleges would not pass.

This information has been helping to fuel efforts led by U.S. Sen. Tom Harkin (D-Iowa) and U.S. Sen. Tom Carper (D-Del.) to increase scrutiny on for-profit colleges.

“[T]hey are really going after the military in a big way,” Harkin told The Iowa Independent, believing it is because it does not count towards the 90/10 law.

Further fueling the nearly year-long investigation through the HELP Committee, which Harkin leads, is questionable recruiting and retaining efforts that have been uncovered.

Harkin said private non-profit colleges in Iowa, such as Buena Vista University, Simpson College, Graceland College and the like are still doing a good job of educating low-income students; perhaps even better than the Regents, because of the endowments they receive. But his attention toward the for-profit private colleges has raised a number red flags.

“The federal government is putting out half a billion dollars a year in educational assistance for veterans and for active duty personnel,” Harkin further told The Iowa Independent. “When I inquired from the Department of Defense as to where it was going, what was happening to these military people — Were they graduating? Were they getting diplomas? Were they getting jobs? — I got nothing back. The Department of Defense has no data on that. They simply send the money to them and that’s it.”

A Government Accountability Office report concluded along with the investigation Harkin led that the Defense Department and the for-profit industry lacked sufficient scrutiny over where tax dollars were going and how they were being used.

Carper told the Chronicle on Higher Education he was surprised to learn military aid was not included in the 90/10 rule, and suggested the government should consider adjusting that.

“I’m a big advocate of skin in the game,” he said. “There has to be skin in the game for markets to work.”

Provided by the U.S. Senate Health, Education, Labor, and Pensions committee

For-profits have not been alone in courting members of the military. Nonprofit and public colleges have as well. A 2009 Iowa task force found adding 100 veterans a year would yield an additional $800,000 in tuition income annually for the University of Iowa and nearly $2 million in revenue for the city of Iowa City.

For-profit schools have become the fastest growing sector of higher education, moving from 550,000 students in 1998 to more than 1.8 million students by 2008. Although they are still only 10 percent of the total higher education student population in the U.S., they take 42 percent of all Pell Grants.

Deceptive Recruitment Practices

With little oversight by the government as to where the education benefits for veterans are going or being used, for-profit colleges have stepped up their recruitment of members of the military.

In one instance a veteran was repeatedly told by recruiters that his post-9/11 GI Bill benefits would completely cover the cost of his degree. It was only after enrollment, the veteran said, that he learned he would owe approximately $11,000 beyond his military benefits to Bridgepoint-owned Ashford University.

This veteran, or veterans overall, were not the only students to file formal complaints against Ashford. The complaints came from students of different backgrounds — more than 700 in a two-and-a-half year period. They accused school officials not only lying to them or misleading them, but of charging them with undisclosed fees.

One student claimed he was told he would be able to receive his teaching license from Ashford, based in Arizona. Yet a year later, right before his scheduled graduation, he learned Ashford was not allowed by the state of Iowa to award teacher licenses, and that he would have to attend a “cooperating school” in Arizona for a year. In the complaint he stated, “I was really blown away to find out that I had spent so much time and money at a college that I was not going to be able to obtain my teacher’s license from.”

A number of students also reported receiving very little help once inside for-profit institutions, insisting there was more emphasis on recruiting rather than assisting students’ classwork. Indeed, some documents detailed instructions for officials to make at least 50 outbound calls a week in recruiting efforts and hold meetings almost daily with prospective students.

In undercover audio recordings by GAO agents, counselors at the for-profit schools can be heard discrediting traditional universities for large class sizes, insisting they would not be receiving a value education. While there are lecture courses with sometimes more than 300 students in a class, most classes taken at Iowa’s public universities throughout a degree program have less than 50 students in them. They also go on to tell potential students they would have to try to get less than a B in their classes at the for-profit college.

The GAO encountered some schools encouraging prospective students to falsify documents in order to receive more aid.

Perhaps the most alarming tactic found within internal documents recently released was the use of the “Pain Funnel.”

Lines within the documents from the for-profit ITT Technical Institute, which has more than 100 campuses nationwide, include “Remind them of what things will be like if they don’t continue forward and earn their degrees” and “Poke the pain a bit and remind them who else is depending on them and their commitment to a better future.”

Drop Out Rates

Colorado Tech University’s online program has a 61 percent drop-out rate. The University of Phoenix’s Axia College has seen 84 percent of their students drop out.

Jason Deatherage, former admissions adviser at Colorado Tech, was fired for not meeting his quota of recruiting military vets. He told the New York Times there is massive pressure to enroll more veterans.

“We knew that most of them would drop out after the first session,”  Deatherage said. “Instead of helping people, too often I felt like we were almost tricking them.”

Bridgepont Education had a 63 percent drop-out rate in 2009. Despite such a high rate of drop-outs, that year Bridgepont’s Chief Executive Andrew S. Clark earned almost twice as much as Charles Edelstein, CEO of the University of Phoenix, when he raked in $20.5 million.

Provided by the U.S. Senate Health, Education, Labor, and Pensions committee 

Student Debt Load and Career Barriers

Although, 11 of 16 community colleges in Iowa report graduation rates comparable to or worse than Bridgeport, students at for-profit institutions are almost twice as likely to default on their student loans.

Katie Bushnell currently attends Full Sail University, a for-profit school focused on the entertainment business. Bushnell takes classes online and expects to graduate within a year with a Bachelor’s degree and nearly $70,000 in student loan debt.

According to recent data released by the U.S. Department of Education, 13.8 percent of students who began repaying their public-private partnership loans in 2008 have since defaulted. For-profit institutions, however, reported 25 percent of their graduates defaulting after three years. There has been increased scrutiny over for-profit colleges as they enroll less than a fifth of all students but produce nearly half of all loan defaulters.

Bushnell actually walked away from traditional schools before coming to Full Sail. She started at Iowa State University, then attended Des Moines Area Community College and Indian Hills Community College. Much of her collegiate experience has been financed through student loans; however, she’s been working full-time hours to afford housing and living expenses since her family cannot contribute.

She counters the complaints students have lodged at other for-profits about not receiving support while taking classes.

“Full Sail does have excellent career services that has been helping me with resumes and career building exercises,” Bushnell said.

But Bushnell is worried about what she might end up doing after college since the entertainment business in Iowa is so small. She wanted to do music promotions, but with limited opportunities, she’s now considering out-of-state sports teams. Taking classes online, combined with trying to find work and build experience booking concerts during college has also placed obstacles in her way.

“I do miss having a set class time, because it is very difficult to focus and very easy to procrastinate with online classes,” Bushnell said. “Working full time and then coming home to classes is tough chore. I am envious of students who don’t have to work full time and still get by while in school.”

Watching tuition increases and budget cuts to public universities though is a big incentive for Bushnell to avoid going back to public colleges.

Contributions and Oversight

Part of Harkin’s investigation found 95 to 98 percent of students attending for-profit colleges borrowed money to attend. Since the average cost of a credit hour was often more than double that of tuition for a public college, the debt loads were significantly higher. Iowa has ranked in the top five for highest average student debt load by the Project on Student Debt every year that they’ve compiled data, ahead of all other Midwestern states.

With all of these reported problems, Harkin is seeking better oversight of the half a billion taxpayer dollars going to the for-profit colleges through military members’ benefits.

The Department of Education has already brought forward a new plan that would deny for-profits from receiving federal student aid if their graduates cannot pay off their student debt in a reasonable time frame.

While Harkin has been leading this charge, he has also been among the recipients of donations from the industry. As The Iowa Independent reported in 2010, he took significant donations from DeVry, Inc. and Bridgepoint. Democratic U.S. Reps from Iowa, Bruce Braley and Dave Loebsack, also took contributions, as did U.S. Sen. Chuck Grassley (R-Iowa).

U.S. House Speaker John Boehner (R-Ohio) was one of the biggest benefactors in contributions from the industry, receiving more than $30,000.

DeVry, based in Illinois, spent more than $300,000 on lobbying efforts in 2009 and 2010. Ten of the industry’s top companies collectively upped their spending on lobbying from $1.5 million in 2009 to more than $4 million in the first nine months of 2010. The industry is fighting against any new regulations.

“We need better oversight, and we need to bring this to light,” Harkin said. “I’ve had this ongoing investigation and it seems things keep getting worse and worse.”

The Education Department held back on imposing their new plan for regulations after facing heavy push-back from lobbying and opposition in Congress.

Wall Street money manager Steven Eisman testified before the HELP Committee last summer and called for-profit colleges “marketing machines masquerading as universities.” Eisman has hedged bets on some of these education corporations, but warned the committee the industry was reaping those rewards while taxpayers were at risk, as the companies are running on federal aid.

Harkin said Attorneys Generals around the country, including Florida, Illinois, Kentucky and Iowa’s Tom Miller, have launched investigations into the schools for any unlawful conduct. California and Maryland’s legislatures are pushing through bills to reduce or eliminate state aid to the for-profit colleges.

The Government Accountability Office went undercover to investigate how 18 recruiters would respond to questions about how to hire foreign workers, who can be less expensive than native-born workers. Three of them took the bait, recommending the fictional landscape employer dissuade Americans from applying by scheduling job interviews before 7 a.m., requiring drug tests and making applicants “run around the shop carrying a 50-pound bag to determine [if] they were fit for the work.”

For the foreign workers who eventually get jobs under H-2B visas, the GAO found employers sometimes underpay or charge visa workers excessive fees for visa processing, housing or transportation. More than half of the cases reviewed by government investigators involved fees that drastically reduced paychecks for workers, sometimes to as low as $48 in a two-week period.

Labor rights groups say that foreign-born workers are often exploited by employers who rely on their lack of connections or access to resources in the United States. This can be even worse for undocumented workers, who rights groups say suffer frequent wage theft and other workplace abuses because they fear being turned over to immigration authorities.Workers on H-2B visas are in the country legally, but at times it’s through employers who are cheating the system by skipping over qualified American applicants.

For more on workplace exploitation, it’s worth re-reading the Star’s series on trafficking from last year. After the series ended in December, Department of Homeland Security Janet Napolitano said she would begin more work on ending human trafficking, including a campaign launched in July to improve trafficking assistance and awareness programs.

The Labor Department, which also handles the issue, has added investigators to its Wage and Hour Division to audit seasonal H-2B visa workers. Labor Secretary Hilda Solis has argued for fair wages for all workers — even undocumented ones — and appeared in advertising this summer telling workers “every worker in America has the right to be paid fairly, whether documented or not.”

The report faulted DHS for a lack of oversight on the program, claiming “DHS has not been able to gain meaningful and proactive insight into potential cost and schedule performance shortfalls, and thus take corrective actions to avoid shortfalls in the future.” Homeland Security Secretary Janet Napolitano announced in March a plan to overhaul SBInet, removing $50 million in stimulus funding from the project until the department could determine the most cost-effective way to move forward. All spending on SBInet — except money being spent on a stretch of the U.S.-Mexico border in Arizona — was frozen.

Boeing was also criticized in the report, which said the company provided information to DHS that was “replete with unexplained anomalies, thus rendering the data unfit for effective contractor management and oversight.”

The SBInet project has been expensive so far: DHS has received about $4.4 billion in appropriations for SBInet since 2006, according to the Government Accountability Office report. It also has not proven very effective. Previous Government Accountability Office reports have pointed out failures in the system, including its inability to differentiate well between animals and humans.

Delays over the project have also caused major concerns. In June, Rep. Henry Cuellar, (D-Texas), chairman of a House Homeland Security subcommittee on on border issues, said SBInet would take 323 years to deploy across the southwest border at its current pace.

The Government Accountability Office Report recommended that DHS increase its oversight over Boeing’s progress on SBInet, including by creating baseline performance measurements for major tasks and tracking spending more closely.

The program, which was created in 1996, allows the Department of Homeland Security to train local law enforcement to enforce immigration law. It has been criticized by immigrant rights groups and a 2009 Government Accountability Office report for leading to deportation of low-level criminal offenders — minor violations of traffic and open-container laws — instead of focusing on serious crime by illegal immigrants.

Critics also argue it leads to racial profiling, particularly among Latinos, and creates a fear of police in immigrant communities. Sheriff Joe Arpaio of Maricopa County, Ariz., has been accused of abusing the 287 (g) program to carry out controversial sweeps of immigrant-heavy neighborhoods. Arpaio’s office was limited to using the program only in jails — not to make arrests — in 2009.

In Georgia, the program has been used to identify more than 14,690 illegal immigrants for deportation in its four years in the state, ICE officials told the Associated Press. Four counties in the state, and its Department for Public Safety, have signed agreements to participate in the program.

The AP has more on the lawsuit:

The lawsuit alleges ICE has failed to train, supervise and otherwise oversee sheriff’s deputies in Cobb County, where the three plaintiffs live. It also claims ICE has improperly delegated its power to local authorities.

“This is a bad thing, and it tears apart families,” said attorney Erik Meder, who filed the lawsuit. “While these people are certainly in the country illegally, they aren’t criminals and don’t deserve to be locked up and separated from their families.”

Immigration officials have broad discretionary power and should not be issuing a notice to appear — which initiates deportation proceedings — for illegal immigrants who are arrested and discovered to be in the country illegally after initially having been stopped for relatively minor offenses, the lawsuit says.

The plan, which the lobbyists and watchdog groups have been presenting to Congressional staff members in recent closed-door meetings, would limit the contributions that lawmakers can take from the beneficiaries of earmarks they arrange. Top officials from companies getting earmarks would be limited to donating $5,000 to lawmakers in each two-year election cycle, and they would not be allowed to give at all while seeking an earmark.

In addition, legislative staff working on earmarks would be banned from participating in campaign fund-raising — a practice that drew sharp criticism in a recent investigation by the Office of Congressional Ethics involving earmarks.

And to promote transparency, Congress would be required to disclose all earmarks on a central database, submit to audits by the Government Accountability Office and certify that the contractors are qualified to do the work.

Any coherent system, members of both camps agree, would be better than the current patchwork of partial regulations that Congress has imposed. At present, House Republicans have forsworn the process; House Democrats have banned earmarks for commercial businesses; and the Senate has continued par for the course. The result is that House members have often simply put in requests for earmarks from their respective Senators, while for-profit businesses have often funneled their same requests through affiliated non-profit organizations.

The odd couple that initiated the process was Rich Gold, a lobbyist for Holland & Knight, and Melanie Sloan, who leads Citizens for Responsibility and Ethics in Washington (CREW). The two met over the summer before seeking out partners to join their campaign. They don’t have active backing in Congress yet but the involved groups claim that their unlikely coalition will build momentum by itself:

Mr. Gold said in an interview that Congressional aides have asked incredulously: “Now, who are you doing this with again? And how did this happen?”

He said he already received some criticism from fellow lobbyists. “I’m wearing a flak jacket today” to withstand the attacks, he said, “but to be honest, so are the good government groups from their own supporters. We are strange bedfellows.”

A Somali refugee family resettles in Sioux Falls, S.D. (Flickr, UNHCR)

Stan Delp, a 67-year-old retired teacher living in Lansdale, Penn., was sitting in church in June, 2008, when he noticed four unfamiliar black-haired men by him. He found they were new to the United States, having spent 11 years in refugee camp in Thailand. Delp’s church is not big — about 200 people regularly attend — but nevertheless it has helped 47 such refugees assimilate to life in the United States over the past two years. When Delp met the men, he decided to do his part. He helped them buy clothes at Kohl’s and taught them how to use a refrigerator. He searched for jobs for them, and ended up waking at 5 a.m. to drive one man to work for several months, then allowed him to move into his home. Now that he lives in a retirement home, the refugees, now friends, visit a few nights a week.

“It’s like being a dad to them, really,” Delp says. “It takes 14 years to get assimilated into American culture. That’s a long time.”

[Immigration1] In the United States, the refugee resettlement system has always worked largely thanks to the generosity of people like Delp, as a public-private partnership with volunteer services and government backing. But the recession is threatening the stability of the program and the availability of resources to refugees. The government has stepped up its contributions to help new refugee migrants adjust to American life, but provides just eight months of resources. With jobs scarce, the churches and community centers that help after then are stretched to the point of breaking.

The government is aware of the problem, but thus far has taken only small steps to ameliorate it. The State Department doubled the amount of money it gives private resettlement agencies to help refugees when they first come to the United States, from $900 to $1,800. That amount helps the groups provide services for refugees and fund-raise for additional aid money for up to 90 days after the refugee enters the country. But the State Department knows $1,800 is not enough to support a refugee for three months, particularly with the difficulty of finding work, a State Department official told TWI.

“Part of the philosophy of our program is for people to reach self-reliance as quickly as possible,” says the official. “It used to be that very often refugees would have found work by the time our period of responsibility is up, and that’s much less true now.”

The Obama administration authorized in September 2009 the admission of up to 80,000 refugees in the 2010 fiscal year, up from 75,000 admitted in the 2009 fiscal year. In the authorization, the administration acknowledged that the “recent economic downturn has presented new challenges for this and other humanitarian programs.” To address these problems, the National Security Council was tasked with determining what needs to be done to improve refugee resettlement in the U.S.

“The basic set-up of the program hasn’t been altered in many years,” National Security Council spokesman Ben Chang told the Los Angeles Times in June. “It was time to take a fresh look.”

A few policy improvements have been recommended so far. Sen. Patrick Leahy (D-Vt.) introduced legislation in March that would allow refugees to apply for green cards immediately upon entering the U.S. and adjust refugee resettlement grants annually based on inflation and the cost of living.

Sen. Richard Lugar (R-Ind.), the ranking member of the Senate Committee on Foreign Relations, commissioned a report on refugee resettlement and found the process often places an unfair burdens local communities. Called “Abandoned Upon Arrival,” Lugar argues in the opening of the July 21 report that the government should modify its funding and admittance numbers — either increasing funding of refugee resettlement programs or decreasing the number of refugees it admits — so high costs are not passed on to local communities.

“We must acknowledge the costs associated with this activity,” Lugar wrote in a July 20 letter formally requesting a Government Accountability Office investigation on the refugee resettlement process.

The idea of cutting down on refugee admissions is not appetizing, particularly at a time when the need is so high. Of 42 million people forced by conflict or persecution to move from their homes, 16 million need asylum or refugee status, according to a 2009 report from the United Nations Refugee Agency.

Forcing refugees to wait in camps, which often cannot provide the same health and education services they could find in the U.S., can have a detrimental affect on them, says Susan Krehbiel, a vice president at the Lutheran Immigration and Refugee Service.

“It does become kind of a Catch-22,” Krehbiel says. “Some of the refugees have been in camps for 15 to 20 years. There are some human costs to delaying peoples’ resettlement.”

Still, Krehbiel says the current system struggles to serve the refugees it does admit, and relies too heavily on volunteer donations of time and money. The Office of Refugee Resettlement, established in 1980 as part of the Department of Health and Human Services, provides funding for up to eight months of cash and medical assistance, and refugee families may be eligible for additional money through Temporary Assistance for Needy Families, or TANF, and Medicaid.

The government also provides up to five years of employment services, supplemented by private programs. But with the sluggish economy, employment programs through the Lutheran Immigration and Refugee Service have seem a marked difference in the speed of job searches among refugees, Krehbiel says. While in previous years 80 percent of refugees were employed within four months, the recession dropped that number to about 60 percent. It usually takes about a year to get 80 percent of refugees in the program hired, she says.

Janet Panning, a program director at two Pennsylvania Lutheran Immigration and Refugee Service programs, says she has seen a significant decrease in employment opportunities for refugees. Recent anti-immigrant fervor hasn’t helped the situation, as some employers are hesitant to employ refugees because they think they could be illegal immigrants.

“People are very afraid of hiring people they think might be illegal or not have proper work documentation,” Panning says. “Sometimes employers that aren’t up on the law might be reluctant to hire a refugee because they might not have a green card.”

If they are not able to find employment, single people are in an especially bad situation after government cash assistance ends. Some refugees have struggled to support themselves and pay rent. Panning says she knows of several refugees who have become homeless over the years, but typically secondary issues beyond unemployment contribute to the problem.

Panning says she worked with one refugee who nearly became homeless after her family dispersed around the country. The woman had a war-related disability that was difficult to show to employers and kept her from working steadily, and eventually was placed in subsidized housing.

“She never went on the street, but it was through the blood, sweat and tears of volunteers that kept her in housing,” Panning says

The government has attempted to stave off homelessness among refugees. The State Department provided $5 million in emergency housing funding last year. For next year, the Department of Health and Human Services requested an additional $25 million from Congress for case management and emergency housing.

But local communities often take on that task as well. Delp charges a refugee $200 per month — “not even enough to cover utilities,” he laughs — to stay in his house while he stays in a local retirement home. He also helps a seven-person family pay the rent on a five-bedroom house nearby. (They were living in a two-bedroom apartment until he helped them move out a few weeks ago, Delp says.)

He says he and the other members of his church see helping the refugees as something they must do. “Those of us who have been given resources, it’s up to us to reach out to these people,” Delp says. “I can afford to reach out, so I want to help as much as I can.”

Vitter wanted to sub in language requiring the Government Accountability Office to audit the Fed continually. He proposed substituting language closer to Sanders’ original proposal (which was watered down by Sen. Chris Dodd (D-Conn.)) or a version of Audit the Fed by Rep. Alan Grayson (D-Fla.) and Rep. Ron Paul (R-Texas), passed in the House financial regulatory reform bill.

The Sanders amendment as passed provides for a one-off audit of the Fed’s books since 2008 and requires the Fed to disclose information about any emergency lending programs in the future.

Rep. Jim McDermott (D-Wash.) (WDCpix)

Most state unemployment programs are flat broke, according to federal analysts, and the states themselves are largely to blame.

Thirty-four state unemployment insurance trust funds have run dry as a result of the recent recession, forcing those programs to take out nearly $40 billion in federal loans to weather the storm, the Government Accountability Office revealed this week.

[Economy1] The crisis is no accident, experts argue, but instead represents a failure on the part of many states to build up a funding cushion during the good years that could see them through the bad. Unemployment taxes levied on employers, many contend, have simply been too low to provide that insurance.

“Long-standing UI tax policies and practices in many states over three decades have eroded trust fund reserves,” Andrew Sherrill, the GAO’s workforce director, told House lawmakers on the Ways and Means Income Security subpanel Thursday.

Andrew Stettner, deputy director of the National Employment Law Project, an advocacy group, echoed that message. “States,” he told the committee, “entered this recession far less prepared than they had entered any of [the] recent recessions over the past 35 years.”

The insolvency trend could have far-reaching ramifications, experts warn, threatening the capacity of struggling states to help jobless workers through the next recession. The trend also raises broader questions about how the UI system is funded. Sherrill told lawmakers that the funding formula is ripe for an overhaul.

“The long-term decline of UI funding, culminating in widespread borrowing by state trust funds and the dire financial condition of the program, raises critical questions about the ability of the program to function as it has in the past,” Sherrill warned. “Now is the time … to consider changes to federal program policies that could better assure the long-term financial structure of UI trust funds.”

The trouble, many experts say, is this: State UI programs — which provide 26 weeks of financial help to laid off workers looking for new jobs — are funded with a tax on employers. Yet states are given broad discretion to set their own rates, and in recent decades, they’ve drastically scaled them back. Indeed, between 1978 and 2008, Sherrill said, the minimum state UI tax rate on employers fell from an average of 1.14 percent to an average of 0.37 percent, relative to taxable wages. By contrast, the federal UI tax is an across the board 6.2 percent on the first $7,000 of wages.

“This is the single most important reason why so many state trust funds are insolvent today,” Stettler argued.

There’s another key factor contributing to the problem: The eroding wage base. That is, while states must establish a taxable base income of at least $7,000 (the federal standard) — and while many states go much higher than that — only 17 states index that base to wage inflation. It only makes sense that those states that are taxing a higher proportion of wages tend to have money remaining in their UI coffers. Indeed, NELP estimates that the insolvent states have an average wage base of $9,500, while the figure for solvent states is $20,500.

Some lawmakers are already eyeing the problem. Rep. Jim McDermott (D-Wash.), for example, blasted the ill-prepared states Thursday, arguing that they “ignored one of the basic rules of any insurance program, which is to save money in good times to pay out more during hard times.”

Not that the states are solely responsible for ensuring the solvency of the state UI programs. The GAO noted several reforms that Congress could enact on a national scale. The $7,000 federal wage base, for example, established in 1983, isn’t indexed to wage inflation. Doing so would force a number of states to hike their own taxable wage bases, which in turn would yield larger UI pools during periods of economic growth.

McDermott, who chairs the income security subcommittee, hinted Thursday that Congress would play a role in the reform process. “The question that will increasingly confront Congress is whether we can help states suffering from huge deficits in their UI funds, while also encouraging them to take the steps necessary to ensure a strong and solvent unemployment insurance system in the future,” McDermott said. “I think the answer is yes.”

Not everyone on Capitol Hill agrees. Rep. John Linder (Ga.), the senior Republican on the Ways and Means subpanel, blasted the notion that hiking UI taxes is the answer to the current insolvency crisis. That idea, he said, “is just the latest example of Democrats’ desire to never let a serious crisis go to waste.”

“They will use state insolvency caused by the recession and their failed trillion-dollar stimulus law to argue for even higher federal and state unemployment taxes, forever.”

U.S. soldiers train Afghan police in Herat. (EPA/ZUMApress.com)

An obscure Army contracting office with ties to the private security firm Blackwater has formally lost control of a lucrative contract to train Afghan police, the Pentagon and U.S. military officials in Afghanistan confirmed to TWI.

[Security1] The office, known as the Counter-Narcoterrorism Technology Program Office or CNTPO, came under criticism from the Government Accountability Office earlier this month for having only a marginal relationship to the training of Afghan police. CNTPO has responsibility for the military’s counternarcotics efforts, not the training of foreign military forces, and only received control over the contract after the U.S. military last year moved to take it away from the State Department and sought to rapidly award the contract to one of the five companies with which it does business — one of which is Blackwater.

That bureaucratic shift prompted a protest from State’s contractor, DynCorp, which stood to lose millions from the switch and argued that a counternarcotics office was an improper choice to award a contract for police training services. On March 15, the Government Accountability Office agreed, formally saying that the military’s solicitations were “outside the scope of [CNTPO's] existing contracts” according to a top GAO procurement official, Ralph O. White. But GAO also did not formally say that CNTPO had to be stripped of its contract authority, creating confusion over the future of the contract.

According to several officials, the U.S./NATO military command in Afghanistan responsible for training Afghan security forces, known as NTM-A or CSTC-A, have decided keeping CNTPO involved would invite the same complaints that prompted GAO to scotch a contract worth up to $1 billion. “NTM-A/CSTC-A has seen the GAO ruling, is reviewing it and evaluating how to proceed in a manner that most effectively meets legal requirements and advances the key goal of helping to train an effective Afghan National Police Force,” said Lt. Col. Mark Wright, a Pentagon spokesman.

Reached in Kabul for comment, Lt. Col. David Hylton, a spokesman for NTM-A/CSTC-A, confirmed that “we’re reevaluating how to proceed.” Hylton added that every aspect of the contract was up for discussion within the command, and he guessed that no decisions would be made about even how to move forward with the bidding process until mid-April at the earliest.

The contract first garnered attention last month, when CNTPO’s connection to Blackwater appeared in a late-February Politico story. The same day the story ran, the Senate Armed Services Committee released a report accusing Blackwater employees of improperly taking hundreds of rifles and pistols for personal use out of a U.S. military weapons depot in Afghanistan intended to supply those very same Afghan policemen.

Scott Amey, the general counsel for the Project on Government Oversight, observed that the military “tried to fit a square peg into a round hole” by giving a counter-narcoterrorism office awarding duties for a police training contract. “The best case scenario now is that this [contract] will operate through an open process that will allow anyone to come to the table,” Amey said.

CNTPO initially got the contract because its existing relationships with the five security contractors meant that it could rapidly award a bid for a mission identified by the military as vital to the U.S. war effort, a process that entailed restricting the eligible pool of bidders. “If the government has an immediate need, it could conduct a limited competition with vendors with proven capabilities” to meet the contract requirements, Amey said.

Gen. Stanley McChrystal, the commander of U.S. forces in Afghanistan, has identified that need as immediate. “There’s a shortage of trainers,” McChrystal said at a press briefing on March 17. “And we have been very unequivocal in our statement of that, both to Washington, D.C., and of course, more appropriately, to NATO.”

DynCorp’s old contract with the State Department expires in August. Hylton said NTM-A/CSTC-A had not yet made a decision on whether to seek a temporary extension of DynCorp’s contract. Col. John Ferrari, a senior officer in the training command’s programs directorate, was in charge of the decision-making process for the revised contract.

A spokesman for DynCorp, Jason Rossbach, said that the company — which the Iraq inspector general has criticized, along with the State Department, for negligent book-keeping over the police-training contract — awaited the outcome of NTM-A/CSTC-A’s contract restructuring. “We’re interested in bidding, whatever the government decides to do,” Rossbach said.

So they don’t just keep illicitly-obtained arms in Afghanistan, it appears.

Blackwater, now calling itself Xe Services, had something of a setback earlier this month after the Government Accountability Office ruled that the U.S. military had to restructure a contract Blackwater sought to train Afghan policemen worth up to $1 billion. I’ll have more on that contract soon.