From the Secret Service to the Fed, Inspectors General Are Enablers to Corruption at the Agencies they Oversee

By Pam Martens and Russ Martens: July 22, 2022 ~

Joseph Cuffari, Inspector General, Department of Homeland Security

Joseph Cuffari, Inspector General, Department of Homeland Security

The Inspectors General of federal agencies are supposed to be the first line of defense against corruption within that agency. Increasingly, they have become part of the problem of corruption, coverups and cronyism.

The January 6 House Select Committee has now stumbled upon this problem in a big way. Hopefully, it will lead to meaningful legislative reform of a seriously broken system of “watchdogs” that increasingly operate as lapdogs.

According to a letter sent by Ronald L. Rowe, Assistant Director of the Secret Service, to the January 6 House Select Committee on Tuesday of this week, the Inspector General of the Department of Homeland Security (DHS), the parent agency of the Secret Service, first requested text messages from the Secret Service more than a year ago. The request covered a full month of text messages prior to and including the January 6 attack for 24 Secret Service agents. The Inspector General’s office received just one text message in response, covering that entire month. Instead of blowing the whistle to Congress, the public and the January 6 House Select Committee, the Inspector General simply kept his mouth shut for more than a year.

On Wednesday night, Carol Leonnig, who has reported on the Secret Service for a decade at the Washington Post, and her colleague Maria Sacchetti, reported that the DHS Inspector General had “learned in February that the Secret Service had purged nearly all cellphone texts from around the time of the Jan. 6, 2021 attack on the Capitol, but chose not to alert Congress, according to three people briefed on the internal discussions.”

The New York Times reported in this morning’s print edition that missing from the list of 24 Secret Service agents whose text messages were requested by the Inspector General was Tony Ornato – the man who had been “detailed” from the Secret Service to become Assistant to Trump and Deputy Chief of Staff for Operations at the White House. This was an unprecedented political move for a Secret Service agent, who was then allowed to return to the Secret Service after Trump’s term ended. According to Ornato’s official bio, one of his jobs at the White House was to take care of “all aspects of” “military operations” in support of President Trump. If anyone would have known why it took more than three hours for the National Guard to respond after the Capitol building had been breached by rioters on January 6 and what Trump was doing during those three hours, it would have been Ornato.

Inspectors General have subpoena power. By failing to subpoena Ornato’s text messages, it raises the question as to what the real agenda of the Inspector General actually was. The New York Times also reports today that Ornato is one of the Secret Service employees who has now hired a private attorney.

Last Friday, the January 6 House Select Committee issued a subpoena to the Secret Service for text messages for January 5 and January 6, 2021. It received just the one text message referenced above, which was a text from then Capitol Police Chief Steven Sund to former Secret Service Uniformed Division Chief Thomas Sullivan, requesting assistance on January 6. The Secret Service believes that some text messages may have been deleted by agents when the agency switched to new communication devices on January 27, 2021.

Adding to the growing alarm around the Inspector General’s actions, just one day after a response to the subpoena was due to the January 6 Committee, on Wednesday evening the Inspector General’s office sent a letter to the Secret Service indicating that it was conducting a criminal investigation into the matter and warning the Secret Service to cease its own investigations. That portion of the letter, as first reported by CNN, reads as follows:

“To ensure the integrity of our investigation, the USSS must not engage in any further investigative activities regarding the collection and preservation of the evidence referenced above. This includes immediately refraining from interviewing potential witnesses, collecting devices or taking any other action that would interfere with an ongoing criminal investigation.”

This has set off alarm bells that the Inspector General is attempting to prevent the January 6 House Select Committee from obtaining the text messages it sought under subpoena by having the Secret Service conduct a forensic search for the texts on the replaced communication devices. (Why the DHS Inspector General has not itself demanded this after more than a year raises more alarm bells.)

Much of the consternation about the activities of this Inspector General, Joseph Cuffari, stem from the fact that he is a Trump appointee. Pushing for Cuffari’s Senate confirmation was Senator Ron Johnson, a right-wing Republican from Wisconsin. In the weeks leading up to the January 6 attack on the Capitol, Johnson held a hearing on election fraud in what appeared to be an effort to support Trump’s false allegations of a stolen election. One of the revelations from the January 6 Committee hearings was that Johnson’s Chief of Staff attempted to deliver to Vice President Mike Pence a slate of fake electors supporting Trump.

Mark Bialek, Inspector General, Federal Reserve Board

Mark Bialek, Inspector General, Federal Reserve Board

The Department of Homeland Security’s Inspector General is not the only Inspector General to be rapidly losing the public’s confidence. The Federal Reserve’s Inspector General, Mark Bialek, has stonewalled the public for nine months on the largest trading scandal in Federal Reserve history, which enveloped Fed Chairman Jerome Powell, former Vice Chair Richard Clarida, former Dallas Fed President Robert Kaplan and former Boston Fed President Eric Rosengren. (See our archive of articles on the trading scandal here.)

Any careful review of the details of the trading scandal suggests probable cause for a serious insider trading investigation. But while watchdog groups called for an investigation by the U.S. Department of Justice and the Securities and Exchange Commission, Powell referred the matter to the Inspector General – who dubiously reports to the Board of the Fed, which is chaired by Powell.

On July 14, the Fed’s Inspector General cleared Powell and Clarida of any wrongdoing while stating that the investigations of Kaplan and Rosengren, and potentially others, continues.

And in a manner similar to the DHS Inspector General’s failure to obtain text messages from the Secret Service after more than a year, the Fed’s Inspector General has denied the public and the media the dates of Robert Kaplan’s over $1 million trades in individual stocks and S&P 500 futures, despite those dates being mandated for public disclosure in a timely fashion. (See our report: Robert Kaplan Was Trading Like a Hedge Fund Kingpin for Five Years while President of the Dallas Fed; a Dozen Legal Safeguards Failed to Stop Him.)

Dennis Kelleher, President of the financial watchdog group, Better Markets, released a scathing assessment of the Fed’s Inspector General findings, writing:

“The Federal Reserve’s Inspector General’s report today on its investigation into the personal trading by the Chair and former Vice Chair Clarida during the pandemic while in possession of material nonpublic information was very narrow, omits key information, and is not credible.”

Kelleher goes on to explain the key information that the Inspector General ignored and sums up with this:

“…the IG [Inspector General] is hired by the Chair and reports to the Chair. A person like the Chair asking a subordinate like the IG to investigate his boss is simply not credible, particularly, where, as here, the boss has already repeatedly stated publicly that no laws or rules were broken. An after-the-fact investigation by the subordinate concluding that the boss’ prior public statements were accurate is not a credible investigation.”

It’s time for the American people to demand that criminal matters be turned over to the Department of Justice in a timely manner and that the Criminal Division of the Department of Justice get a chief that invokes confidence.


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