Dan Zegart: The Gutting of the Civil Service

The Gutting of the Civil Service

by DAN ZEGART
http://www.thenation.com/doc/20061120/zegart

[from the November 20, 2006 issue of The Nation]

On September 1, 2004, a patient with type O blood died at a hospital and blood bank in Ponce, Puerto Rico, after being mistakenly given two units of type A blood. Upon investigation, Food and Drug Administration inspectors discovered that before the fatal accident, Hospital Damas had come close to killing two other patients under similar circumstances. Even afterward, Hospital Damas still failed to verify critical medical data or properly train its employees.

Five months later the FDA's San Juan district office recommended that the agency issue a warning letter, which is supposed to be a company's last chance to eliminate a hazard before being sued or having its product seized. But despite abundant evidence that patients at Hospital Damas were in danger, even this relatively minor enforcement action--routine in previous administrations--was never carried out. Instead, the FDA's Center for Biologics Evaluation and Research, which oversees blood banks, claimed there was no evidence of systemic problems.

The decision was far from surprising. Over the past five years warning letters have become an endangered species at the FDA. According to a recent report by Representative Henry Waxman, the number of such letters issued under Bush-appointed FDA chief counsel Dan Troy plummeted from 1,154 in 2000 to 535 in 2005. Seizures of mislabeled, defective or dangerous products, another key measure of enforcement activity, dipped 44 percent. Waxman's investigators found a disturbing pattern of laissez-faire managers overuling field agents trying to discipline wrongdoers--even when deaths had resulted.

The changes at the FDA are but one result of an unprecedented attempt by the Bush team to extend direct political control deep into operational areas throughout the executive bureaucracy, especially at agencies where the Administration has strong policy interests such as the FDA, the Environmental Protection Agency, the Justice Department and the Interior Department. Troy, who essentially ran the nation's most important consumer protection agency during much of Bush's first term, a time when the office of commissioner was either vacant or in turmoil, is typical of those appointed by the White House to oversee this effort. He had spent his previous career suing the FDA on behalf of extremist think tanks like the Washington Legal Foundation and corporate clients like Brown & Williamson Tobacco, which successfully blocked the FDA's historic attempt to regulate cigarettes.

Thanks to the anti-regulatory course set by Troy and his counterparts at other agencies, many longtime bureaucrats have simply quit. But what is actually happening is more complex and far-reaching than mere brain drain. More accurately, the executive branch is undergoing a brain transplant. An entire culture of civil service professionals loyal to their agency's mission is being systematically replaced with a conservative cadre accountable to the White House. While every President appoints his own "politicals" to run the departments, the Bush team has broken new ground, attempting to realign the executive branch permanently by junking a 100-year-old system of merit-based hiring for career bureaucrats.

While the embedding of politicals in career jobs did not originate with Bush, the scale and coordination with which it is being done under this Administration seem unprecedented, according to more than fifty current and former government officials interviewed during an eight-month-long Nation investigation. "They've put people in charge of many offices who simply don't believe in the mission of the office," said William Yeomans, a twenty-four-year veteran of the Justice Department's civil rights division who quit last year after being inexplicably transferred to the criminal unit. "And they are there to insure that those offices will never return to carrying out the policies or enforcing the law in the way that they used to. And they're going to do that by changing the people who are in the bureaucracy."

Joe Rich, a lawyer who quit as chief of the voting section of the civil rights division of the DOJ in April 2005, concurs. "Obviously during the Reagan years you were going to have a very different philosophy," he said. "But you didn't have that sense that it was kind of raw politics, that everything they were doing was trying to help the party."

At the FDA, the story is much the same. Many longtime staffers, known within the bureaucracy as "careers" to distinguish them from "politicals" like Troy, resisted the agency's anti-consumer tilt but could do little about it. "When career people get in a fight with a political, it's not a fair fight," said William Hubbard, who retired as associate commissioner for policy and planning in spring 2005 after more than twenty-five years at the agency. Former FDA officials estimate that between fifty and a hundred senior managers have quit, retired or been demoted, fired or transferred over the past five years, although no one knows the precise number, and the agency refused to provide any figures or comment for this article. These numbers, though small at an agency with 10,000 employees, have had an outsized impact because they represent the cream of the FDA's upper echelon, a group with much of the agency's accumulated know-how.

The result of the mass departures has been rudderless, demoralized agencies bleeding institutional memory. "What we've seen is an increase in what you might call the misery index," said Paul Light, an expert on the federal bureaucracy at the Brookings Institution. "Senior executives who've worked an entire lifetime in government toward the faithful execution of a given law like Clean Air or Clean Water just get so frustrated with the meddling that they say, 'I'm eligible for retirement, I've had enough of this, I want out.'" In a prepared statement, White House spokeswoman Emily Lawrimore denied any attempt to politicize the career workforce: "President Bush has instructed members of his Cabinet to hire men and women of the greatest ability and highest ethical and professional integrity. In his Administration federal employees are selected by their professional abilities, not their personal politics."

Not Invited

Everywhere Dan Troy and his counterparts have gone, three things have happened. First, long-serving careers have been shunted aside, excluded not only from decision-making, but even from providing meaningful input. The EPA's Eric Schaeffer remembered realizing this while arguing for more stringent air-emissions standards for pollution-producing factory farms. "It was the experience of having done a lot of work laying data out and numbers and making an argument about the law, and not having anything come back on the other side. I spent all those years logrolling and compromising, like other bureaucrats, so I was used to that. It's not like that was the process. It was just basically, 'We're not going to do that,'" said Schaeffer, who quit after twelve years at the EPA.

FDA careers say that under Bush, unlike previous administrations, when FDA staff went to a meeting at the White House or to brief "the department"--meaning the higher-ups at Health and Human Services--careers were almost never invited. Former senior associate commissioner Linda Suydam recalled, "The craziest things are happening when you've got somebody like [former Commissioner Lester] Crawford and Troy, who don't know the agency all that well down there presenting positions, and then they bring 'em back and you try to figure out what you're supposed to be doing. And you have no idea what it actually means." Meetings at the FDA would nominally include career staff, but the decisions would be made afterward, at a post-meeting huddle for politicals only. "There was a steady erosion of influence by the career staff beginning in January of '01, and by maybe late '02 the careers were largely excluded and powerless in decision-making," said former associate commissioner Hubbard.

A second method of political control has been simply to redefine civil service jobs as political jobs, or to create new political slots. At the FDA, the post of deputy commissioner for medical and scientific affairs was created for Dr. Scott Gottlieb in July 2005. Hiring Gottlieb gave a free-market ideologue direct authority over drug review and safety. The choice of Gottlieb, who had served as an FDA staffer, was particularly infuriating to career staffers at the FDA's Center for Drug Evaluation and Research because Gottlieb, a physician in his mid-30s, had little government experience and none running a large organization. Most recently he had been editor of the Forbes/Gottlieb Medical Technology Report, where he advised readers on how to profit from his insider's view of the FDA. Moreover, Gottlieb came on board in the midst of the Vioxx withdrawal scandal despite his well-known view that the FDA's drug review process was too onerous.

Gottlieb has a good deal of company at other agencies. Another report by Representative Waxman found that Bush has added 307 new political appointees to the federal payroll, a 12 percent spike that Paul Light of Brookings calls "stunning." The number of Schedule C political appointees, who don't require Congressional approval, increased 33 percent. Both categories had dropped sharply under Clinton. "The number of layers being created at the top of the federal government has increased dramatically under Bush," said Light.

But what makes this Administration unique, according to scholars and bureaucrats, is the degree of uniformity with which the Bush template has been applied across the executive branch. Out of 1.8 million federal employees, roughly 3,000 are political appointees. Those 3,000 share the upper tier of government with another 6,400 senior career executives. However, according to Light, the extraordinary degree of centralized control exercised over the entire bureaucracy has made those "3,000 feel like 10,000. They operate with a single-minded focus that makes them very present in the day-to-day operation of the agencies, all the way down to the field levels."

The third and most disturbing way the Bush Administration has consolidated its hold over the bureaucracy is the embedding of "hidden politicals" in career slots in the executive branch. Candidates are interviewed and selected supposedly on the basis of merit according to civil service procedures, but the real "play" is to hire a politically reliable person.

One of the last things Hubbard did as a career FDA'er was to hire Randall Lutter from the conservative American Enterprise Institute to replace Lester Breslow, who was retiring as chief economist, a civil service slot in Hubbard's policy and planning shop. "I was in the process of recruiting the person behind Breslow, when [former Commissioner Mark] McClellan called me one day and said, 'I'd like to play on filling that economist's job,'" Hubbard remembered. "So I said, 'Well, how do you want to play it?' He said, 'This guy I know, a guy named Randy Lutter.' I said, 'I know him.' And so we brought him in and talked to him and all. But it was pretty much a done deal."

Not long afterward, Hubbard left and Lutter took over his old job as assistant commissioner so that in effect, Hubbard had hired a political replacement for himself.

Loyalty Above All

Like Hubbard at the FDA, Joe Rich and others at the civil rights division of the Justice Department claim there has been a deliberate effort to replace pro-enforcement careers with Bush loyalists. Rich served for thirty-seven years under regimes as different as those of Johnson, Nixon, Reagan and Clinton. He left civil rights because of the growing chasm between career lawyers like himself, who believe in the aggressive enforcement that had been the unit's hallmark, and Bush political appointees hostile to that tradition.

By April 2005, when Rich retired, almost all the senior managers in the civil rights division--charged with enforcing laws against employment, voting and housing discrimination--were gone. In fiscal year 2005 alone, 20 percent of the division's litigators quit. Unlike those departing, the new arrivals were not necessarily graduates of elite law schools, and their résumés often failed to demonstrate any interest in attacking civil rights abuses. What they did have in common, said Rich, were dependable hard-right sympathies. And one other thing: Unlike political appointees, these civil servants will remain at DOJ if a Democratic President takes office.

Rich and other senior career lawyers soon became disillusioned with the way cases that almost certainly would have been pursued under previous administrations were being ducked, while others were abandoned or even reversed. "In all the Bush years, there wasn't one case brought on behalf of African-Americans," said Rich of his experience at the voting section. He said the biggest void was in "vote dilution" cases alleging that voting district lines were drawn to minimize the impact of minorities. So-called Section 5 and Section 2 reviews, in which the DOJ screens proposed changes to state voting laws for civil rights violations, suddenly became unabashedly anti-minority and partisan, like the 2003 opinion that the GOP's minority-hostile redistricting of Texas into a Republican stronghold was legal, and another that Arizona could require voters to produce photo IDs. Both opinions ignored contrary opinions from careers in the voting section. Both were written by Sheldon Bradshaw, a high-ranking official in the civil rights division and another ultra-conservative who in April 2005 would succceed Dan Troy as general counsel at the FDA, although he had no relevant experience with food or drug issues.

Rich, Yeomans and others noted other disturbing changes. The honors program, through which a committee of career lawyers helped recruit the finest young legal talent in the country, was replaced with a system in which the politically appointed assistant attorney general controlled hiring. "I would get a phone call that would say, 'We're going to interview X, can you come over this afternoon to join the interview?' And I haven't even seen a résumé. I'd go over for the interview and the person would be hired the next day," Rich remembered.

Like Yeomans's reassignment to the criminal division, some of the most highly regarded career lawyers in the civil rights division were abruptly shifted to other duties without explanation. Robert Libman, a highly successful attorney in the employment litigation section, quit the department not long after being involuntarily transferred to a newly created unit that defended civil rights lawsuits against the government. "You can certainly draw some conclusions about whether that was a punitive move," said Aaron Schuham, another former employment litigator at the DOJ. Disturbed by the division's change of course, Schuham joined three other disenchanted employment litigation attorneys and transferred onto the DOJ's Tobacco Litigation Team, which was prosecuting the multibillion-dollar RICO lawsuit against the cigarette makers. (All but one have since left government.)

Sharon Eubanks, then a DOJ career and director of the tobacco team, gladly hired Schuham and the other attorneys from civil rights. However, the tobacco lawsuit was far from exempt from political pressure. Eubanks worked under Assistant Attorney General Peter Keisler, one of the five founders of the Federalist Society, as well as Keisler's superior, Associate Attorney General Robert McCallum Jr., a close friend of George W. Bush at Yale and a fellow member of Skull & Bones. Eubanks reported directly to Daniel Meron, a principal deputy assistant attorney general who came from the same law firm as Keisler and had been a conservative TV commentator during the Florida recount in 2000.

Meron, Keisler and McCallum publicly backed the suit. However, by the time the eight-month trial ended in early June 2005, they seemed worried, according to Eubanks, that her underfunded team of thirty-eight lawyers--the industry had some 300 working the case--might actually win and perhaps bankrupt the cigarette makers. The Bush White House had never supported United States of America v. Philip Morris Inc. et al., which was filed under Clinton, and which Bush disparaged in his 2000 campaign. As the trial wore on, Eubanks said, the political interference increased. As closing arguments approached, McCallum tried to persuade her to scale back the government's demand for an industry-funded, twenty-five-year, $130 billion package of smoking cessation and other anti-cigarette programs. Eubanks refused. Late on the night of June 6, 2005, with summations only hours away, McCallum pressured the team to reduce that number drastically, losing his temper and shouting, according to Eubanks, who walked out of the meeting. Twenty minutes later, another trial team member joined her in tears. "He had pieces of paper with calculations on them. And he looked at me and he said, 'Is this OK with you?' The number at that point was $18 billion to $20 billion over seven years," said Eubanks. "And I said, 'I'm not the guy making the decisions. You can see that.'"

The next morning, minutes before Court, McCallum sent an e-mail further shrinking the number to $10 billion over five years, which was the figure that Stephen Brody, Eubanks's second-in-command, presented that afternoon, triggering audible gasps in the courtroom. Six months later, Eubanks took early retirement after twenty-two years at the Justice Department and six years on the tobacco suit. She left behind a perfect trial record. In August federal Judge Gladys Kessler ruled for the government in a scathing decision, which held that the cigarette industry orchestrated a campaign of deception about smoking's hazards but imposed marketing restrictions, not monetary penalties.

"I quit because I really wasn't representing the public interest," said Eubanks, "because when you're at the point where you have to do their bidding, then it's just time to go." After six months of unsuccessfully seeking work at Washington law firms, Eubanks took a pay cut to work for a nonprofit.

Peter Keisler was nominated for the spot on the Court of Appeals for the DC Circuit vacated by Supreme Court Chief Justice John Roberts. After his nomination stalled, Daniel Meron was given a recess appointment as general counsel at Health and Human Services, succeeding Alex Azar, a Bush loyalist who worked closely with Dan Troy in overhauling the FDA. Robert McCallum was confirmed in July as ambassador to Australia after an internal DOJ investigation cleared him, Keisler and Meron of any political motivation in changing the damage award sought by the government in the tobacco case.

No Friends in High Places

Aside from Henry Waxman, Congressional Democrats have done little to oppose Bush's politicization of the bureaucracy. "It's not sexy," commented one Congressional staffer. But the civil service unions are fighting back fiercely, since the combination of politicization and privatization threatens their very existence.

There is broad agreement that the civil service system--particularly the cumbersome disciplinary process that makes it difficult to force poor performers out of government--needs reform. But the Bush Administration, under the cloak of reform, has worked to gut the entire system. Using the September 11 attacks as a justification, it established new personnel systems that stripped the 180,000 employees of the newly created Homeland Security Department and the 670,000 employees of the Defense Department of union protections afforded federal workers elsewhere, allowing managers broad latitude to hire and fire and to ignore merit in staffing decisions.

In addition, the Office of Personnel Management has expanded to a much larger group its "pay for performance" system, which awards or withholds performance-based pay increases, and which was first instituted among the 6,000 members of the elite senior executive service. Pay-for-performance got poor marks from many long-serving bureaucrats polled in a recent survey by the Senior Executives Association. "I would say that there's a lot of cynicism about the fairness of the system," said William Bransford, SEA general counsel. "And a lot of people feel that there is political pressure."

A combination of new legislation and a new approach by the executive branch has substantially changed the rules for merit system hiring. Before, managers had to give preference to internal candidates, and their power to fire workers was carefully circumscribed. This has been replaced with "direct hiring," which allows much more discretion. When combined with the relaxation of rules for outsourcing and privatization, politicals can readily engage in what is euphemistically called "workforce shaping." "It allows tremendous discretion for isolating particular individuals and neutralizing veterans' preference and seniority and all of those things," said Jacqueline Simon, director of public policy for the American Federation of Government Employees union. "They don't have to give a reason. It's much closer to employment at will."

Back to the Spoils System?

The relentless GOP attack on the bureaucracy amounts to an assault on the very idea of professional government. It would alter a cornerstone belief of American governance, dating to the Pendleton Act of 1883, that it is essential to insulate public servants from partisan influence. The modern civil service was created in reaction to the endemic abuses of the spoils system that ran nineteenth-century American politics. "Political sympathy and partisan activity were...required as a condition of appointment. Fitness for office was given far less consideration and thus, the quality of public service was seriously affected," says the Office of Personnel Management's website, words that could apply to the Bush-era executive branch.

Richard Nixon once said that allowing his Cabinet to select a sub-Cabinet was his "first mistake." Later, the Reaganites "went to school on Nixon and centralized the appointments process," said public policy expert Paul Light. "Then Bush went to school on Reagan, arguing that every appointment should be centralized and carefully vetted for ideology." This innovation may be one of the Bush Administration's most significant legacies.

A study by Light found that compared with the eight Presidents who preceded him, George W. Bush has "one of the smallest domestic agendas in recent history," ranking last in major domestic legislative proposals. It may well be that his most enduring domestic legacy will be a backward-looking reinvention of government.

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