DOD IG Audit of WHCA-Revised (1995)

 

DOD IG Audit of WHCA
Type Of Activity	DOD IG Audit
Location
Location	Washington DC
Date of Activity	Dec 1995
Coordinates	38°53′52″N 77°02′11″W

Over the decades, WHCA’s mission has grown significantly. What began as a low-profile communications unit now encompasses a wide range of services supporting the president, vice president, National Security Council, First Family, and White House staff. This includes setting up secure communications, videotaping key presidential moments for the National Archives, providing stenographic services for press briefings, and managing logistics for presidential appearances.

By 1978, WHCA had reached a peak staffing level of over 1,000 personnel. Although downsizing efforts reduced the agency to about 850 members, it remains the largest organization under the White House Military Office (WHMO), with a budget exceeding $120 million during the Clinton administration. Despite this, WHCA operated largely under the radar, with minimal oversight from both the Department of Defense (DoD) and White House leadership.

Scandals, Oversight, and “The Coffees”

In the 1990s, WHCA faced increased scrutiny due to its involvement in videotaping Democratic National Committee (DNC) fundraisers and informal White House coffees. This controversy erupted after WHCA, following Senate inquiries into campaign finance practices, delayed the release of video footage, sparking accusations of obstruction. The tapes documented President Bill Clinton’s interactions with major donors, raising questions about WHCA’s role in preserving politically sensitive moments.

Critics argued that WHCA’s presence at these events blurred the line between its communications mission and political activities. Some speculated that WHCA’s expanded duties were a byproduct of bureaucratic mission creep, with the agency taking on additional roles to justify its budget and staffing levels. Others noted that Clinton may have become so accustomed to constant video documentation that he failed to question WHCA’s ubiquitous presence.

Former White House Deputy Chief of Staff Harold Ickes acknowledged the ambiguity surrounding WHCA’s activities, admitting in congressional testimony that White House staff rarely noticed the agency’s video crews. He also described WHCA as part of the White House Military Office, a unit with a long history of classified projects, including the construction of presidential bomb shelters and secret taping systems used by past presidents.

A History of Secret Funds and Loose Oversight

WHCA’s overseer, the White House Military Office, controlled a secret fund during the Eisenhower, Kennedy, Johnson, and Nixon administrations. This fund, purportedly for security-related expenses, was sometimes used for questionable projects, including renovations to presidential properties and the installation of President Lyndon B. Johnson’s and President Richard Nixon’s secret recording system. WHCA personnel were often assigned to these classified tasks, highlighting the agency’s role as a tool for executive discretion.

Following revelations about this secret fund in the 1980 book Breaking Cover by former WHMO Director Bill Gulley, the Reagan administration promised reforms, but questions about WHCA’s management persisted. In the 1990s, congressional inquiries and audits by the DoD’s Inspector General revealed issues such as unaccounted property, excessive equipment leases, and mission overreach.

A History of Secret Funds and Loose Oversight

WHCA’s overseer, the White House Military Office, controlled a secret fund during the Eisenhower, Kennedy, Johnson, and Nixon administrations. This fund, purportedly for security-related expenses, was sometimes used for questionable projects, including renovations to presidential properties and the installation of President Lyndon B. Johnson’s secret recording system. WHCA personnel were often assigned to these classified tasks, highlighting the agency’s role as a tool for executive discretion.

Following revelations about this secret fund in the 1980 book Breaking Cover by former WHMO Director Bill Gulley, the Reagan administration promised reforms, but questions about WHCA’s management persisted. In the 1990s, congressional inquiries and audits by the DoD’s Inspector General revealed issues such as unaccounted property, excessive equipment leases, and mission overreach.

Despite WHCA’s considerable size, WHCA has operated with little attention from either its Defense Department or White House masters. The agency’s basic tasks have been reviewed only three times since its inception, and it escaped formal audit until a DOD IG audit was completed in  November 1995.

The initial attempts to conduct oversight of this 900-person, $100 million-a-year White House-directed agency were made by Congress in 1994. Those attempts were met with repeated  delays  and White House stonewalling. Early 1995, after meetings with the White House Counsel's office, GAO, and the Department of Defense IG's office, Congress finally received the approval to have an IG's investigation done going back 5 years.

WHCA was annually performing $7.8 million worth of tasks beyond the scope of its mission; it was unable to account for more than half a million dollars’ worth of agency property; and it was paying close to $800,000 to lease superfluous equipment.

This report on phase one of the audit cited “no evidence of significant theft or significant waste” in WHCA, but noted several areas in need of “management attention.”

The DODIG’s report concluded that WHCA's budgets have gone largely unreviewed. Its annual performance plan has failed to meet DOD standards. Its acquisition planning has violated DOD  regulations and resulted in wasteful purchases.

Finally, the DODIG concluded that WHCA is providing the White House with services and equipment which are outside way, out­side of the scope of its mission of telecommunications support to the President of the United States.

Congressional Inquiry and the Road Ahead

Despite these findings, WHCA’s operations remain shrouded in secrecy due to their classification as matters of “presidential protection.” Efforts by the Government Accountability Office (GAO) to investigate WHCA were blocked by the White House, which cited national security concerns. Congressional Republicans pushed for further hearings resulting with Congressional hearings conducted on May 16 and June 13, 1996.

In conclusion the committee recommended, both a comprehensive audit and a more formal, explicit delineation of responsibilities were long overdue for WHCA. Although management controls were generally satisfactory, there were deficiencies in several areas that needed attention. More systematic oversight is important in the future to assist WHCA in being as efficient and effective as possible. The DOD IG will work closely with DISA and WHCA to make sure that the problems found in the audit get fixed. but WHCA’s low-profile history and classified status may limit what can be uncovered.

While WHCA continues to support the president with essential communications services, its evolving mission, political entanglements, and history of minimal oversight raise ongoing questions about transparency, accountability, and the proper scope of its activities.

The April 1996 phase-two report concluded that WHCA was receiving “little or no oversight of budgeting, acquisition planning, and organizational effectiveness,” and recommended that the DoD’s oversight role be strengthened.

WHCA has been a deep, dark hole over at the White House into which there has been spending nearly $100 million annually without any executive branch oversight. It  has  also become  a  pot of money devoted to many things-kind of a miscellaneous pot of money-that have nothing to do with telecommunications or the President.                                                                            

The White House Communications Agency has had a totally unique mission, and the staff who serves there perform their duties exceptionally well and have done so for more than 50 years and for 11 Presidents, both Democrats and Republicans.

Among these:

The DOD IG’s report concluded that WHCA's budgets have gone largely unreviewed. Its annual performance plan has failed to meet DOD standards. Its acquisition planning has violated DOD  regulations and resulted in wasteful purchases.

Finally, the DOD IG concluded that WHCA is providing the White House with services and equipment which are outside way, out­side of the scope of its mission of telecommunications support to the President of the United States.

The executive summary is copied below with complete report available at Audit Report on White House Communications Agency. (Report No. 96-033) and Audit Report on White House Communications Agency Phase II. (Report No. 96-100)    

Transcript of Congressional hearings conducted on May 16 and June 13, 1996 Oversight of theWhite House Communications Agency

INSPECTOR GENERAL

DEPARTMENT OF DEFENSE

400 ARMY NAVY DRIVE

ARLINGTON. VIRGINIA 22202·2884

November 29, 1995

MEMORANDUM FOR DIRECTOR, WHITE HOUSE MILITARY OFFICE

UNDER SECRETARY OF DEFENSE (COMPTROLLER)

ASSISTANT SECRETARY OF DEFENSE (COMMAND,CONTROL, COMMUNICATIONS AND INTELLIGENCE)

DIRECTOR, DEFENSE INFORMATION SYSTEMS AGENCY

COMMANDER, WHITE HOUSE COMMUNICATIONS AGENCY

SUBJECT: Audit Report on White House Communications Agency

(Report No. 96-033)

We are providing this report for review and comment. We performed the audit in response to a request from Congress and the Deputy Secretary of Defense. We considered management comments on a draft of this report in preparing the final report.

The recommendations in Findings A and B relate to a reallocation of funding between parts of the DoD budget and the budget for the Executive Office of the President. Finding A questions the appropriateness of DoD, through the White House Communications Agency, funding audiovisual, stenographic and news wire services and photographic equipment for the White House. Finding B covers the provision of .White House Communications Agency support and equipment to the Secret Service. Although the Secret Service is required by law to reimburse an agency providing the support, the Secret Service has not done so. Several DoD appropriations and Secret Service appropriations would be affected by the recommendations. Thus, we suggest early consultation with the Office of Management and Budget and the Under Secretary of Defense (Comptroller) so those changes, if agreed to, could be implemented in the President's FY 1997 budget.                     

DoD Directive 7650.3 requires that all recommendations be resolved promptly. Management comments were responsive to all recommendations except the recommendation to specify services to be provided by the White House Communications Agency and to transfer funding, managing, contracting, and purchasing of audiovisual, news wire, and stenographic services and camera equipment to the Executive Office of the President. We request that the Assistant Secretary of Defense (Command, Control, Communications and Intelligence) reconsider his position and provide additional comments by January 12, 1996.

We have not completed our audit of all aspects of White House Communications Agency activities. We started work on the final phase of the audit and expect to provide a draft report in early 1996. The issues we plan to review during the final phase include the organization and staffing of the White House Communications Agency, acquisition planning, management of telecommunications equipment and services, and controls over selected financial activities.

Office of the Inspector General, DoD

November 29, 1995

Report No. 96-033

(project No. 5RD-5027)

White House Communications Agency

Executive Summary

Introduction. The Chairman,  House Committee on Government Reform and  Oversight; the Chairman, House Subcommittee on National Security, International Affairs, and Criminal Justice, Committee on Government Reform and Oversight; and the Deputy Secretary of Defense requested the audit. The Deputy Secretary of Defense emphasized that this review should be as thorough as possible of all White House Communications Agency (WHCA) activities in the last 5 years.

Audit Objectives. The audit objective was to review all activities at the WHCA, the authorities and management controls under which the activities are conducted, and various nonspecific allegations of mismanagement and waste. The adequacy of the management control program will be discussed in a subsequent report.

Audit Results. We found no evidence of theft or significant waste of resources in this phase of the audit. However, the following areas need management attention.

o During FY 1995, WHCA and DoD funded about $7.8 million for services and equipment that are not within the scope of the WHCA telecommunications mission as presently defined and should be funded by the Executive Office of the President (Finding A).

o WHCA was not reimbursed for permanent support to the Secret Service, as required by law, and understated support costs reported to Congress by $3.2 million. The Secret Service did not reimburse about $4.3 million for support and, because DoD absorbed support costs, the. The Secret Service budget was augmented by that amount. WHCA is expected to provide permanent support valued at $7.0 million during FYs 1996 through FY 2001 for which DoD should be reimbursed by the Secret Service (Finding B)..

o WHCA managers did not maintain control over repair parts inventories, and contracting officer's representatives did not document maintenance data. Therefore, WHCA can neither ensure the adequacy or accountability of repair parts inventories nor determine the cost-effectiveness of maintenance contracts (Finding C).

o WHCA lacked accountability for nonexpendable property on hand and had excess expendable supplies valued at about $226,000. Property valued at about $577,000 was not accounted for and is at risk for potential waste or loss. Further, by reducing the requisition objective for expendable items and by eliminating excess expendable items with no demand histories, $226,000 could be put to better use during FY 1996 (Finding D).

o The inventory of base communications equipment and services is neither complete nor accurate. Consequently, the inventory could not be audited, and WHCA could neither review and revalidate communications requirements nor assess the cost effectiveness of configurations for equipment and services. Further, WHCA is at risk of paying for unneeded equipment and services (Finding E).

o WHCA paid for leased, long-haul telecommunications circuits and equipment that were no longer required. If the circuits are terminated, about $759,000 can be put to better use during FYs 1996 through 2001 (Finding F).

o WHCA did not validate bills for long-haul telecommunications equipment and services before verifying that the bills were accurate. As a result, WHCA had no assurance that payments ceased for terminated services or that payments would not be initiated for services ordered but not installed. If effective procedures are implemented, about $294,000 could be put to better use during FYs 1996 through 2001(Finding G).

Summary of Recommendations. We recommend that management take the following corrective actions.

o Specify the services. that WHCA is to provide to the Executive Office of the President.              Transfer responsibility for funding, managing, contracting, and purchasing of audiovisual, news wire, and stenographic services and camera equipment to the Executive Office of the President.

o Specify the permanent and temporary support provided to the Secret Service and determine which is reimbursable or non-reimbursable, specify billing procedures, and bill the Secret Service for reimbursable support provided during FY 1995 and continue to bill for all future reimbursable support.

o Fully implement the existing maintenance management system, turn in excess. repair parts, update lists of equipment under maintenance contracts, and use vendor service reports to assess the cost-effectiveness of maintenance contracts.

o Record identified property in the property book, establish the control point for receiving all property, perform monthly reconciliations of the document register, annually review requisition objectives, and turn in excess property.

o Establish a complete and accurate inventory of short-haul equipment and services, and maintain required inventory records.

o Initiate action to terminate unneeded long-haul circuits and equipment, establish the required review and revalidation program for equipment and services and establish a complete inventory of equipment and services.

o Establish procedures to verify the accuracy of Customer Cost and Obligation Reports on a monthly basis.

Management Comments. The Assistant Secretary of Defense (Command, Control, Communications and Intelligence) submitted joint comments for himself; the Director, DISA; and the Commander, WHCA. The Assistant Secretary concurred in all recommendations except for the recommendation to specify the services that WHCA is to provide to the White House and to transfer responsibility for funding, managing, contracting, and purchasing of audiovisual, news wire, and stenographic services and camera equipment to the Executive Office of the President. See Part I for a summary of management comments and Part III for the complete text of management comments.

Audit Response. As a result of information from management, we deleted one recommendation (Finding D) regarding property accountability. The Assistant Secretary's comments are not responsive regarding the recommendation related to specifying WHCA services and transferring these responsibilities. We maintain that WHCA should not fund the costs of audiovisual, news wire, and stenographic services and photographic equipment for the White House absent clearer direction to do so. We do not question the President's need for the services, contracts, or equipment provided by WHCA, and we recognize the legal authority of the President to issue an Executive  Order to specify the services WHCA is to provide. However, as a DoD organization, WHCA is governed by DoD Directive 4640.13 in providing telecommunications services and the functions now performed and funded by WHCA go beyond telecommunications services as defined in that Directive. We request that the Assistant Secretary of Defense (Command, Control, Communications and Intelligence) reconsider his position and provide additional comments in response to the final report by January 12, 1996.