Are Federal Workers Earning Their Pay?

A couple of weeks ago, President Obama announced a freeze on federal workers' pay for two years. The freeze only applies to the "cost-of-living" raises given annually and only to the Executive branch workers (other than military personnel). Congressional members and their staffs' earnings are not included. It also does not apply to the automatic step increases that federal employees routinely get or to overtime pay. So federal workers will continue to get pay increases in spite of the fanfare given to the President's announcement.

There has been much discussion and analysis regarding the question of whether federal workers are overpaid, as the above graph published in USA Today suggests. The graph illustrates average pay over the entire federal and state/local government workforces compared with the full range of jobs in the private sector. It is often pointed out that government workforces have a larger segment of professional and college graduate employees than the private workforce in general.

President Obama even made this statement when discussing the issue of whether federal workers are overpaid:

"[T]he data we get back indicates that high-skilled workers in government are slightly underpaid. Lower-skilled workers are slightly overpaid relative to the private sector... And that's not surprising because it's a unionized workforce" in government, while the private sector typically is not.

Of course, one reason that highly skilled workers are "slightly underpaid" is due to the large number of lawyers who work for the government, who represent a much higher percentage of any government workforce than the private sector. Lawyers working for government salaries generally make much less than they would in private law firms or even in corporate law departments. However, they do not usually make government work their full career. They move out of government with valuable experience into the much higher paying jobs after their government service.

It is also worthy of note that, as above graph demonstrates, federal benefits represent a much higher average amount of federal compensation than benefits do in the private sector. In addition, while private sector workers have suffered lay-offs and high unemployment during the recession of the past few years, federal workers have much more job security. In fact, the federal workforce (not counting Census workers) has grown in the last two years. All of that federal job growth, job security and steady pay increases (even though now reduced some) likely accounts for the fact that seven of the highest ten average household income counties in the USA are in the Washington, DC metro area.

But my concern is not so much with whether government workers are overpaid as it is with whether they really earn whatever they are paid. Just look at the major foul-ups and misdeeds by many in the federal workforce, including lawyers, in recent years that could be contributing to the general public despair and uncertainty about the country's direction and outlook for the future.

To start with the economic meltdown, we need to look at the Securities and Exchange Commission (SEC), which has as its mission the job to oversee and regulate the financial and securities industry and protect public investors. We learned earlier this year that while the financial industry was on the way toward near-collapse beginning with the Lehman Brothers bankruptcy in 2007 that investigations by the SEC inspector general’s office found 33 agency employees (including lawyers) violated internal policies by viewing pornography for hours a day since at least 2005. How many unreasonable Wall Street risks and unscrupulous investment schemes went undetected by the SEC because their "underpaid" professional workforce was distracted with porn?

It has also been reported that a whistleblower brought evidence of Bernie Madoff's scams to the SEC staff several times over several years before someone paid attention to it. After Madoff's arrest, we learned that he perpetuated the largest "Ponzi scheme" in history; costing his investors about $50 billion in lost investments.

Recently, it has been disclosed that many mortgage foreclosures have been filed without proper paperwork, including actual evidence that the parties filing foreclosure actions really had the right to foreclose. When these problems were discovered, many banks froze all foreclosure proceedings across the country for weeks while new procedures were put in place.

These banks and other companies in the chain of the mortgage processing industry are regulated by an alphabet soup of federal agencies that have the power to audit and investigate the companies' books and procedures. However, no federal agency uncovered these major problems in foreclosure actions that have been displacing homeowners and driving down real estate values nationwide over the past several years. Rather it was a pro bono lawyer in the private sector representing a homeowner defendant in a foreclosure action whose diligence discovered a common industry practice that led to foreclosures all over the country being put into question.

The Deepwater Horizon oil spill in the Gulf of Mexico in April again brought up ethical issues reported by Inspectors General (IG) at the Interior Department for several years about the Minerals Management Service (MMS) in the Department, which had the responsibility for approving which oil companies received leases to drill for oil in the Gulf and for collecting government royalties due under those leases. An IG report released a month after the BP oil rig in the Gulf exploded and started leaking "found that [MMS] inspectors had accepted meals, tickets to sporting events and gifts from at least one oil company while they were overseeing the industry. Although there is no evidence that those events played a role in the Deepwater Horizon oil spill, the report offers further evidence of what many critics of the Minerals Management Service have described as a culture of lax oversight and cozy ties to industry."

The New York Times article from which the above quote is taken goes on to say:

"The [IG] report includes other examples of troubling behavior discovered by [MMS] investigators. In mid-2008, a minerals agency employee conducted four inspections on drilling platforms when he was also negotiating a job with the drilling company.... And an inspector from the Lake Charles office admitted to investigators that he had used crystal methamphetamine, an illegal drug. Investigators said they believe the inspector may have been under the influence of the drug during an inspection." http://www.nytimes.com/2010/05/25/us/25mms.html

While the May report focused on the agency's Lake Charles, Louisiana office, previous IG investigations of the MMS found inappropriate behavior by the royalty-collection staff in the Denver office.

None of these problems at MMS was news to Interior Secretary Ken Salazar. He had ordered a new ethics program at MMS soon after he became Interior Secretary. Nevertheless, it was not until after the Gulf oil spill that Salazar reorganized the oil leasing agency by separating safety oversight from the division that collects royalties from oil and gas companies. He also replaced the head of the agency and renamed it the Bureau of Ocean Energy Management.

It has also been reported year after year that there are many federal employees who owe back taxes to the Internal Revenue Service (IRS). According to a report by the IRS last year, federal workers owed $3.3 billion in delinquent income tax payments for 2009.

The Homeland Security Department has also had a few lapses of note. The most serious problem was the failed attempt by a Nigerian Muslim extremist last Christmas to blow up an aircraft traveling from Amsterdam to Detroit. In spite of this would-be bomber buying a one-way ticket with cash and recently visiting Yemen for a couple of months, he did not get any extra scrutiny before boarding the plane. Later it was also learned that this young man's father had reported his concerns about his son's extremist leanings to the US Embassy in Nigeria. Although the Embassy reported that information to the State Department, the intelligence community did not get the information to airport security personnel. After the fact, all air travelers are now being subjected to special scanning machines or more intrusive pat-downs before boarding planes.

In recent weeks, there have been reports of drivers transporting nuclear material across country for the federal government being observed drinking alcohol while en route. In addition, last week it was reported that the Federal Aviation Administration (FAA) is missing important information about 199,000 aircraft listed on its registry of commercial aircraft.

And, of course, in recent weeks, the world has had access to a treasure trove of classified US State Department cables as a result of the Wikileaks disclosures on its own website, as well as the sites of major news organizations given prior access to the cables by the Wikileaks staff. It is suspected that the Wikileaks staff was provided with these classified government cables (and other classified government files disclosed several months ago regarding the wars in Iraq and Afghanistan) by an Army intelligence officer named Bradley Manning who is now in military custody awaiting court martial.

Manning had access to classified government files when he was stationed in Iraq as an intelligence officer. His ability to download hundreds of thousands of secret government files on to a device that he then took out of a military intelligence center near Baghdad without oversight or detection is a security failure of supreme significance. Any intelligence center permitting military access to classified information of the type being released by Wikileaks around the globe should have been subject to security procedures carefully designed and installed by high level experienced military intelligence personnel. But the Wikileaks fiasco suggests that even people of this supposed high level of professionalism failed miserably in carrying their extremely important duties.

While this list of fairly recent federal worker foul-ups, misdeeds, ethical lapses and disregard for official duties is rather lengthy, I need to also acknowledge that many more federal workers not only earn their pay but often go far beyond the call of duty. Clearly, Americans are grateful for the outstanding service provided by most of the military. Bradley Manning, the Fort Hood shooter and others who have disgraced their uniforms are the rare exceptions.

In addition, the Federal Bureau of Investigation (FBI) has been performing an outstanding service in apprehending Muslim jihadists on US soil over the years since 9/11 before any destruction has taken place. The FBI arrested two such extremists (who are American citizens) in the past couple of months who were plotting to bomb the DC Metro and another who tried to set off explosions at a military recruiting center in Baltimore. These are just the most recent examples of the critical role the FBI has been playing to keep us safe in our own homeland.

Nevertheless, there are always bad apples in every barrel and sorry news about certain federal workers falling short on the job, such those described above, will likely continue to be reported in the future regardless of how those public servants are paid. Sphere: Related Content