Category: Bureaucracy in Focus

• America Runs on Stolen Cooking Oil. The Government Tracks the Fuel — But Who Tracks the Grease?

  Behind countless American restaurants sits a container filled with something most customers would reasonably consider garbage.

  It is the exhausted remnant of the fryer: old cooking oil that has already performed its useful service producing french fries, chicken wings and whatever else emerged from the kitchen before being poured, pumped or otherwise banished into a collection tank out back. To the casual observer, its commercial life would appear to be over.

  The federal government, the renewable-fuels industry and a surprisingly industrious collection of thieves would disagree.

  Used cooking oil has become a valuable commodity in the American renewable-fuels economy. It can be collected from restaurants, aggregated at warehouses, sold through brokers, transported across state lines and ultimately refined into biodiesel or renewable diesel. Once incorporated into that system, the humble vat of restaurant grease enters a regulatory and financial world involving federal renewable-fuel mandates, tradable compliance credits, detailed recordkeeping requirements and, under the right circumstances, federal tax incentives.

  This is how we arrived at the peculiar modern circumstance in which people are stealing used cooking oil by the truckload.

  Federal prosecutors have spent the past several years pursuing cases involving organized thefts of restaurant grease across multiple states. Those prosecutions initially look like colorful additions to the endlessly inventive catalog of things Americans will steal when sufficient money is attached to them. Look more closely, however, and they present a more interesting question.

  The government has developed elaborate systems for determining what qualifies as renewable fuel, what feedstocks can be used to make it, how environmental attributes are calculated and how the resulting compliance credits move through the market.

  What is considerably less clear is who, somewhere along this highly regulated journey from deep fryer to diesel tank, is responsible for establishing that nobody stole the grease.

  That question is now the subject of a Bureaucracy Times investigation.

  The $60,000 Grease Run

  One of the clearest examples comes from western New York, where federal prosecutors have been unraveling an interstate used-cooking-oil theft operation.

  In September, Guodeng Chen and Didi Huang pleaded guilty to transporting stolen goods in interstate commerce. According to the U.S. Attorney’s Office for the Western District of New York, the two men caused approximately 45,000 pounds of stolen used cooking oil to be transported from western New York to a refinery in Erie, Pennsylvania, on April 8, 2022.

  The shipment brought in $29,433.60.

  Twenty days later, another approximately 45,000 pounds traveled to the same destination. That load brought $30,618.

  In less than three weeks, the two shipments represented roughly 90,000 pounds of stolen fryer oil worth more than $60,000.

  Earlier filings in the prosecution help explain how something extracted from restaurant grease tanks managed to arrive at a refinery hundreds of miles away. Prosecutors described an operation in which participants drove trucks to restaurants, pumped used cooking oil from privately owned collection tanks and transported the material to a warehouse. From there, the oil could be sold through a broker and shipped across state lines to a refinery.

  When authorities announced arrests in the broader case in 2023, prosecutors noted that used cooking oil could be refined into biodiesel and resold for approximately $4 to $5 per gallon.

  Suddenly, stealing grease from behind a restaurant begins to look somewhat less eccentric.

  The important feature of the New York case, however, is not simply that the oil was stolen. Theft requires little regulatory analysis. The interesting part is what happened afterward.

  The stolen commodity moved from restaurant tanks into a warehouse, through a commercial intermediary and eventually to a refinery.

  Somewhere along that journey, stolen property entered an otherwise legitimate industrial supply chain.

  Iowa, and the Industrialization of Grease Theft

  The New York prosecution might be dismissed as an unusually ambitious local theft operation were it not for what federal authorities have been prosecuting elsewhere.

  In Iowa, the Justice Department has brought a sprawling case involving what prosecutors allege was an organized enterprise devoted to stealing and reselling used cooking oil. The prosecution eventually grew to include 19 defendants.

  According to the government, members of the alleged operation stole or attempted to steal used cooking oil from restaurants across Iowa, Tennessee, Minnesota, Indiana, Ohio, Alabama, Illinois, Nebraska, Missouri and Kentucky. The material was allegedly transported to warehouses in several states, consolidated and resold.

  Two defendants, Tianzhu Chen and Yong Chen, pleaded guilty in September to racketeering conspiracy charges. Tianzhu Chen also pleaded guilty to money laundering. Other defendants remain scheduled for trial in April 2027, and the allegations against those who have not pleaded guilty remain precisely that: allegations.

  What the Iowa case adds is scale.

  This was not a matter of somebody occasionally discovering that a restaurant had neglected to lock the grease tank. Prosecutors describe an alleged network involving vehicles, warehouses, interstate transportation and resale operations spread across a substantial portion of the country.

  The existence of such infrastructure tells us something about the underlying commodity.

  Nobody builds an interstate logistics network around something that has no value.

  Used cooking oil has value because the substance restaurants are finished with is something the renewable-fuels industry still wants.

  And that is where a curious theft story becomes a regulatory story.

  Washington Discovers the Fryer

  Used cooking oil is among the feedstocks that can be converted into renewable transportation fuels. Once that happens, it enters one of the more intricate corners of federal energy policy.

  Under the Environmental Protection Agency’s Renewable Fuel Standard, qualifying renewable fuels can generate Renewable Identification Numbers, commonly known as RINs. EPA itself describes RINs as the “currency” of the Renewable Fuel Standard program.

  The system exists because certain refiners and importers have renewable-volume obligations. RINs are generated in connection with qualifying renewable fuel, transferred through the market and ultimately retired by regulated parties to demonstrate compliance.

  Naturally, there is a federal electronic system for this.

  The EPA Moderated Transaction System, or EMTS, records transactions involving RINs. Renewable-fuel producers operate under registration, reporting and recordkeeping requirements, and federal regulations specify which feedstocks and production pathways qualify for the program.

  Used cooking oil therefore does not wander casually into the federal renewable-fuels regime. There are rules.

  Those rules include documentation concerning the feedstock itself. A renewable-fuel producer using used cooking oil or certain other waste materials must maintain records from suppliers certifying information relevant to whether the material qualifies as renewable biomass, including descriptions of the material and the process that generated it.

  The federal government, in other words, has developed mechanisms for establishing that the grease really is the correct kind of grease.

  Our investigation has encountered a more elementary problem.

  Suppose the material unquestionably originated in a restaurant fryer. Suppose it satisfies the relevant federal definition. Suppose its chemical and environmental characteristics make it perfectly acceptable as renewable-fuel feedstock.

  Suppose, however, that somebody stole it.

  The oil has not undergone a molecular transformation during the theft. It remains exactly the same renewable biomass it was before somebody arrived behind the restaurant with a pump.

  Its legal provenance is another matter entirely.

  So far, Bureaucracy Times has not identified a nationwide federal Renewable Fuel Standard requirement specifically requiring a renewable-fuel producer to establish that used cooking oil was lawfully acquired from the restaurant or other original generator.

  That finding requires an important qualification.

  It does not mean no safeguards exist.

  Companies may impose contractual requirements on suppliers. Brokers may conduct due diligence. State property laws still apply. Industry auditing programs, fraud controls, supplier certifications and private compliance systems may provide additional layers of protection. A refinery receiving stolen material unknowingly is in an entirely different position from somebody knowingly trafficking stolen goods.

  Our question is narrower.

  Within the federal renewable-fuels system itself, where is lawful ownership established?

  So far, that answer has proved surprisingly difficult to locate.

  Then There Is the Tax Code

  As often happens when Washington creates a sufficiently complicated regulatory system, eventually the Internal Revenue Code arrives.

  Section 45Z created the Clean Fuel Production Credit for qualifying transportation fuels produced in the United States beginning in 2025. The credit covers qualifying sustainable aviation fuel and other clean transportation fuels, with its value tied in part to emissions characteristics and other statutory requirements.

  Producers seeking the credit must satisfy federal eligibility and registration requirements.

  Here, too, provenance matters.

  Treasury and IRS have grappled explicitly with the origin of used cooking oil in the context of imported feedstocks and concerns about distinguishing UCO from substances such as palm oil. Beginning with fuel produced after Dec. 31, 2025, qualifying fuel generally must be derived exclusively from feedstocks produced or grown in the United States, Mexico or Canada.

  The government therefore cares where the feedstock came from.

  It cares what the feedstock is.

  It cares how the resulting fuel was produced.

  It cares about emissions calculations, producer registration and eligibility for federal tax benefits.

  This represents a considerable amount of institutional curiosity about a substance that began its life bubbling beneath a basket of potatoes.

  Which brings us back to the comparatively unsophisticated question at the center of this investigation:

  Does anybody have to prove that it wasn’t stolen?

  We Asked the Government

  On Sept. 23, Bureaucracy Times sent the Environmental Protection Agency seven questions about the provenance of used cooking oil entering the Renewable Fuel Standard system. EPA acknowledged the inquiry the following day, later requested additional time, and supplied substantive written answers on Oct. 7.

  The response clarified what the federal program follows, and what EPA did not establish that it follows. EPA described existing RFS records addressing feedstock identity, renewable-biomass eligibility and point of origin. But in its answers, the agency did not identify a specific nationwide requirement to document that the restaurant or other original generator authorized the removal of the oil.

  That distinction matters. A record showing where grease originated is not necessarily a record establishing that its owner agreed to surrender it. The two questions can be related without being interchangeable.

  We also asked what would happen if stolen cooking oil made its way into renewable fuel and associated RINs. EPA did not provide a categorical ruling that such fuel would qualify or be disqualified. Its answer depended on the particular facts and records. Nor did the agency suggest that theft is outside the government’s reach: it said unlawful acquisition of UCO may be investigated by EPA’s Criminal Investigation Division, while declining to comment on enforcement matters involving the Iowa prosecution.

  There is a revealing regulatory footnote. In a June 17, 2025 proposal published at 90 FR 25784, EPA contemplated expanded point-of-origin documentation. The agency told Bureaucracy Times that the additional documentation was not finalized in the Set 2 final rule. Even such documentation would not, by itself, necessarily amount to proof of authorization by the original owner. But the proposal shows that EPA has considered how much more of the feedstock’s journey should be documented.

  Asked about a national chain-of-custody system comparable to California’s controls for inedible kitchen grease, EPA offered a general statement about program integrity without confirming an equivalent nationwide requirement.

  None of this establishes that a particular producer violated RFS rules, that stolen oil generated RINs, or that EPA lacks enforcement authority. It establishes a narrower and more consequential reporting point: when asked directly about proof of lawful acquisition from the original generator, EPA’s response did not identify that safeguard as an explicit federal RFS documentation requirement.

  Bureaucracy Times also sent questions to Treasury and IRS concerning Section 45Z, including whether substantiation for the Clean Fuel Production Credit establishes lawful acquisition of used cooking oil. We have not received a substantive answer to that inquiry as of this article’s preparation.

  The U.S. Attorney’s Office for the Southern District of Iowa declined to provide additional responses beyond the public record. Open-records requests and other follow-up inquiries may yet clarify how regulators and investigators approach the movement of stolen feedstocks into otherwise lawful markets.

  But the existing public record already demonstrates the problem: organized theft occurs, interstate resale networks exist, and in the New York prosecution stolen cooking oil passed through commercial intermediaries to a refinery.

  Following the Grease

  There is a temptation in stories involving federal subsidies, environmental regulations and criminal enterprises to leap directly from correlation to scandal. That would be premature here.

  We have found no evidence that the Pennsylvania refinery identified in the New York prosecution knew the oil was stolen.

  We have found no evidence establishing that the stolen shipments generated RINs.

  We have found no evidence that those shipments resulted in Section 45Z tax credits or any other federal financial benefit.

  Nor does the existence of federal incentives for renewable fuels somehow explain the criminal conduct of people stealing restaurant grease.

  Those are distinctions worth maintaining, particularly because the question we can document is interesting enough without embellishment.

  Federal prosecutors have demonstrated that stolen used cooking oil can leave a restaurant, pass through warehouses and brokers, cross state lines and reach the renewable-fuels industry.

  At the same time, the federal government operates an elaborate regulatory structure concerned with the identity, origin, environmental characteristics and ultimate disposition of renewable-fuel feedstocks.

  Somewhere between those two realities lies the provenance problem.

  EPA has now described the feedstock records the RFS requires, without identifying a specific requirement to prove that the original generator authorized removal. Treasury or IRS may yet identify additional substantiation relevant to clean-fuel tax credits. Records obtained through FOIA may reveal enforcement practices not readily apparent from the regulations themselves.

  We will report those findings as they emerge. For now, the EPA response leaves open whether the United States has constructed a regulatory system capable of following the environmental attributes of a gallon of renewable fuel with considerable precision while remaining remarkably incurious about who owned the raw material before it entered the system.

  Either answer is worth knowing.

  For now, the trail begins where the thieves apparently discovered it long ago:

  behind the restaurant, next to the dumpster, in a tank full of something that turns out not to be garbage at all.

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  2026.10.12

• The Label Only Needed One Signature. That Was the Problem.

  Every kidney that leaves an organ procurement organization is supposed to travel with two things attached to it: a label confirming which kidney it is, and the signatures of two separate human beings swearing that label is correct. The federal government built that redundancy on purpose, because the alternative to redundancy is a courier showing up at a transplant hospital with the left kidney labeled as the right one. According to a new HHS Office of Inspector General audit, that alternative has already happened. More than once. The report just wasn’t supposed to be the one that found it.

  An Audit About Money That Found a Body Problem

  OIG set out to check whether independent organ procurement organizations, the not-for-profit entities that recover and ship organs for transplant, were reporting their kidney transportation costs correctly on their Medicare cost reports. That is, on its face, an accounting story. Auditors sampled 213 high-dollar kidney transportation costs across 43 of these OPOs and found that 32 of them had reported a combined $428,325 in unallowable expenses, either by dumping the cost of flying a multi-organ recovery team onto the kidney line item, or by billing Medicare for driving a donor’s body to a funeral home, which is not, whatever an OPO’s accounting department may have believed, a step in organ acquisition.

  That’s a real finding, and a real number, though a modest one against the $53.6 million in kidney transportation costs the audit actually covered. It is also, and this matters, not the finding buried five pages later. Four of the 43 OPOs failed to meet Medicare’s separate requirement that two people, one of them an OPO employee, physically verify the label on an organ before it ships. Three of those four submitted verification forms signed by exactly one person. The fourth never sent the required donor documentation to three transplant hospitals at all. OIG did not find a mislabeled organ in its own sample. But it did note, almost in passing, that “some OPOs mentioned incidents in which labeling errors had resulted in the wrong organs being sent for transplant,” including one case in which a label for a left kidney ended up on the container for the right one. That sentence is doing more work than the entire cost-allocation section, and it arrives as a footnote to a footnote.

  “Clerical Error,” Four Times in a Row

  Ask an OPO why it filed for reimbursement of a lung recovery team’s flight as a kidney expense, and the answer, nearly every time, is clerical error or a misunderstanding of Medicare’s rules. Ask an OPO why it billed the transportation of a dead body to a funeral home as an organ acquisition cost, same answer. Ask an OPO why only one person signed a label verification form that federal regulation requires two people to sign, same answer again. Four separate OPOs gave OIG the identical explanation for the identical failure; staff made a mistake, nobody caught it.

  There is a point at which “clerical error” stops describing an incident and starts describing a system. Three OPOs out of four, independently, produced a verification form with one signature where the rule requires two. That is not a typo. That is a control that exists on paper and does not exist in practice, at three different organizations that likely never spoke to each other about it. The audit’s own explanation for why this keeps happening is almost sympathetic (Palmetto GBA, the Medicare administrative contractor responsible for reviewing these cost reports, has never provided direct training to OPOs on how to report transportation costs). It has, per its own account to auditors, discussed the subject “frequently.” Frequent conversation is not instruction, and OIG’s two recommendations to CMS, recover the money and “provide additional education,” read less like accountability and more like a request that someone finally hold the seminar that should have happened years ago.

  The Kidney Gets Reviewed. Everything Else Doesn’t.

  Here is the structural reason 32 of 43 OPOs found it so easy to misfile these costs; Palmetto reviews and caps an OPO’s standard acquisition charge for kidneys, and only kidneys. Nonkidney organs, livers, hearts, lungs, get no such review, and Medicare settles up retroactively with OPOs for kidneys but never for anything else. That asymmetry creates an obvious, if unglamorous, incentive; a cost that gets scrutinized as a kidney expense and a cost that gets waved through as a liver expense are not treated the same way on the back end, and an OPO’s accounting staff does not need to be dishonest to notice which line item is safer to pad.

  CMS has actually acknowledged this is a problem, just not urgently. Its FY 2027 Inpatient Prospective Payment System final rule, issued July 31, 2026, extends MAC review to standard acquisition charges for all organ types, and requires retroactive settlement adjustments for nonkidney organs too. The effective date is October 1, 2028. That is two full budget cycles from now, during which the exact incentive structure that produced $428,325 in documented misallocation over an 18-month audit window remains fully intact, uncorrected, and unreviewed for anything that isn’t a kidney.

  CMS Concurred, Which Is Not the Same as CMS Acting

  CMS’s written response to the draft report is exactly what a government agency’s written response to a draft OIG report usually is; concurrence with both recommendations, a promise to instruct Palmetto to recover the identified reimbursements “consistent with relevant law and the agency’s policies and procedures,” and a commitment to “explore the most effective and efficient way” to get education to OPOs about costs they’ve apparently been miscoding since at least the start of this audit period. Nothing in CMS’s comments, at least in the portion of the letter accompanying the report’s narrative summary, addresses the labeling failures directly, and nothing in either OIG’s recommendations or CMS’s response proposes anything beyond training for the four OPOs that shipped organs without proper verification. Federal rule gives CMS the authority to decertify an OPO that is out of compliance with a process performance measure, making it ineligible for Medicare reimbursement entirely. That authority goes unmentioned. What gets recommended instead, for a failure OIG itself says “may increase risks to patient safety and may lead to compromised transplant outcomes,” is the same fix proposed for OPOs that miscoded a funeral home bill, education.

  The 43 OPOs in this audit are never named. OIG’s own account of the industry describes each one only as “one OPO” or “another OPO,” a convention that protects individual organizations from scrutiny while the aggregate failure gets a press release. Whether that anonymity survives a records request is a question for another piece. Whether a two-year runway before nonkidney costs get reviewed at all survives without another mislabeled kidney reaching a transplant hospital is a question nobody in this report seems in a hurry to answer.

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  2026.10.12

• Amtrak Was Born a Fiction, and Fifty Years Later Nobody Has Fixed It

  A For-Profit Company Nobody Believed Would Turn a Profit

  Every government corporation in this series has had to pretend, at some level, to be a real business. Amtrak is the only one where the pretending was written into the planning documents. When Congress drafted the Rail Passenger Service Act of 1970, internal analysis explicitly described the new National Railroad Passenger Corporation as a corporation organized for profit.

  One of the planners, John McClellan, later admitted what everyone involved already knew: most of the planning team was dubious of the “for profit” claim, but neither the White House nor the more conservative members of Congress were willing to sign off on an entity that was set up from the start to be a perpetual ward of the state, according to an Eno Center for Transportation history of the Act’s drafting.

  Amtrak began operating on May 1, 1971, taking over the common carrier obligations of private railroads that had been losing money on passenger service for decades, in exchange for the right to use those railroads’ tracks at incremental cost, according to the Federal Railroad Administration. It has never once turned a profit in fifty five years of operation, and the fight over whose fault that is has been running, essentially unchanged, for almost the entire time.

  The Same Question, Asked Since 1979

  GAO has been auditing Amtrak’s finances since the agency’s early years, and the title of its 1979 review says everything: Should AMTRAK’s Highly Unprofitable Routes Be Discontinued? By 1995, GAO was still laying out the same three options it always lays out: eliminate the subsidy and privatize the railroad, which GAO itself conceded was unlikely to work because no Amtrak route earns enough revenue to cover its own costs and few private firms would take on that risk; realign the national route network around the most cost effective corridors; or keep funding the whole thing and hope efficiency gains eventually close the gap.

  They never have. By 1998, GAO found Amtrak had consumed roughly 21 billion dollars in federal operating and capital funding since 1971 while reducing its annual net loss only marginally, from 834 million dollars in fiscal year 1994 to 762 million in fiscal year 1997, with losses already projected to climb back toward 845 million the following year.

  By 2020, cumulative federal subsidies to Amtrak had passed 50 billion dollars, according to a policy analysis from the Cato Institute — a figure that predates the 2021 infrastructure law’s further 66 billion dollars in rail funding, part of it going directly to Amtrak and part to state rail grants. No independent source has published a clean post-2021 cumulative total, in part because the infrastructure law’s Amtrak-specific allocations are disbursed over time and tracked separately from annual operating subsidies.

  The 2025 to 2026 reauthorization debate is, structurally, the same conversation GAO was already having in 1979: current testimony from the Department of Transportation cites GAO findings that long-distance routes account for 15 percent of Amtrak’s riders but 80 percent of its financial losses, and calls once again for ending subsidies to underperforming long-distance service and separating Northeast Corridor infrastructure into its own governance structure.

  The Ledger That Blames the Trains Nobody in Washington Rides

  Here is where it gets genuinely strange, because Amtrak’s own numbers do not agree with themselves. Amtrak’s internal accounting system, called Amtrak Performance Tracking, assigned the Northeast Corridor a 352 million dollar above the rail profit in fiscal year 2025, while attributing a 622 million dollar loss to the long-distance inter-regional routes that serve the rest of the country, the same routes GAO and DOT keep flagging as the problem.

  But a Trains Magazine analysis argues this allocation runs essentially backwards, and it quotes two former Amtrak chiefs to make the point. Former CEO Wick Moorman told Congress in writing that eliminating the entire long-distance network would actually increase Amtrak’s total loss and subsidy requirement by 435 million dollars a year, meaning those routes are net contributors once the Northeast Corridor’s fixed costs are honestly allocated rather than parked somewhere else in the ledger.

  Former Amtrak President David Gunn reportedly went further, warning that if Congress ever gave Amtrak less than its full subsidy request, the railroad would have to close the Northeast Corridor before it touched the long-distance routes.

  Whether or not you buy the full argument, the fact that Amtrak’s own former leadership and Amtrak’s own official accounting cannot agree on which half of the network is actually losing money, after fifty five years and one accounting system built for exactly this purpose, tells you something about how useful that accounting system actually is for anyone trying to make an honest funding decision.

  It also tells you who benefits from the current framing. That is, the Northeast Corridor serves the members of Congress who appropriate Amtrak’s budget every year, and an accounting method that quietly shields it from scrutiny while pointing the finger at rural long-distance service is, at minimum, a very convenient place for the numbers to land.

  Fifty Billion Dollars and Counting

  Even the number Amtrak takes to Congress each year is a chosen number rather than a neutral one. Amtrak requests funding based on what it calls its adjusted operating loss, 598.4 million dollars in fiscal year 2025, a figure that specifically excludes roughly a billion dollars a year in depreciation, 364 million dollars in capital project planning costs, and hundreds of millions more in expenses that sit on the operating side of the ledger under ordinary accounting rules but that Amtrak has decided are not relevant to the number it wants Congress to see.

  None of this makes Amtrak unique in wanting to look better on paper than it is. What makes it worth closing this series’ current stretch on is how openly the fiction was built in from day one. TVA and the RFC grew into unaccountable financial structures over time, as the incentives shifted. The FDIC‘s clean design cracked under a genuine stress test nobody had planned for.

  Amtrak was chartered as a for-profit corporation by people who wrote down, at the time, that they did not believe it would be profitable, because admitting the truth would have meant admitting they were building a permanent federal dependent. Fifty five years, more than 50 billion dollars in direct subsidies before the 2021 infrastructure law, and one internal accounting system whose own former executives cannot agree with it later, that is exactly what they built.

  Next in this series: the Pension Benefit Guaranty Corporation, the quiet federal backstop between millions of workers and the pension promises their employers could not keep.

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  2026.10.10

• The VA Has a Three Day Rule for Specialty Care. Mental Health Waited Ten.

  There is a certain bureaucratic poetry to the fact that the Veterans Health Administration’s own guidebook sets a three business day deadline for deciding whether a veteran can get more specialty care, and that the specialty most likely to blow past that deadline by the widest margin is mental health.

  A new VA Office of Inspector General audit of “requests for services,” the paperwork mechanism community providers use to ask VHA for authorization beyond a veteran’s original referral, found that mental health requests took an average of ten days to decide, missing the three day standard 68 percent of the time.

  Neurosurgery came in at nine days, missing the mark 49 percent of the time.

  Cardiology averaged six days and missed 50 percent of the time.

  These are not edge cases. They are three of the specialties where the cost of delay is measured in more than inconvenience.

  The audit examined 2.6 million requests for services filed between October 2024 and January 2026 and found VHA met its own three-day standard just 17 percent of the time nationally. Buried inside that number, though, is a distribution that should worry anyone who thinks a national average tells the whole story.

  A veteran waiting on an oil change delayed by a week is an inconvenience. A veteran waiting on a decision about a psychiatric hospitalization step down, a tumor resection, or a cardiac procedure delayed by a week or more is something else entirely, and OIG’s report does not shy from saying so.

  The Ten Day Wait for a Mental Health Decision

  Mental health’s ten day average and 68 percent miss rate are the worst of any specialty category OIG broke out in the report. That is worth sitting with, because “requests for services” in mental health typically means a provider has already begun treating a veteran and determined the original authorization does not cover what the veteran now needs, additional therapy sessions, an extended course of medication management, a step up in care intensity.

  The request is not hypothetical. It describes a clinician, in the middle of active treatment, saying this patient needs more, now.

  OIG’s report notes that delayed decisions on requests for services can result in delayed diagnoses, interrupted treatment, and worse health outcomes, and flags that three specific cases identified during the audit were serious enough to be referred to OIG’s Office of Healthcare Inspections for a dedicated review of potential clinical harm.

  The report does not specify which specialties those three cases fell under, which is its own kind of answer. When the agency conducting the audit will not tell you, you are left to guess whether they involve the specialty averaging ten days and missing the standard on two out of every three requests, or one of the others. None of the options are comforting.

  Neurosurgery and Cardiology Are Not Exactly Forgiving Specialties Either

  Neurosurgery’s nine day average and 49 percent miss rate deserve the same scrutiny, if for different reasons. A request for services in a neurosurgical context typically means a provider needs authorization to proceed with something time sensitive, additional imaging following a concerning finding, a follow up procedure, an extended course of post-operative care. Waiting nine days on average for a paperwork decision, in a specialty where the cost of delay is frequently irreversible, is not a rounding error.

  Cardiology’s numbers look almost better by comparison, six days on average and a coin flip miss rate, until you remember that cardiology is a specialty where “we will get back to you within the week” is not a phrase most clinicians would want said out loud to a patient with an active cardiac concern. VHA’s own field guidebook does not carve out faster timelines for these specialties.

  The three day standard is the three day standard, mental health, neurosurgery, cardiology, or otherwise, and the audit found VHA cannot reliably meet it in any of them, with the categories carrying the highest clinical stakes performing among the worst.

  What Happens Between the Request and the Decision

  It is worth being precise about what a delayed decision actually means for a veteran in these specialties, because “administrative delay” undersells it. Until VHA authorizes the additional care, the community provider is in an uncomfortable position: continue treating the veteran without confirmed authorization, at the provider’s own financial risk, or pause care and wait.

  OIG’s report notes that when these decisions and their notifications go missing or delayed, providers may keep delivering care that ultimately goes unauthorized and unpaid, which creates a disincentive to keep treating veterans through the gap rather than an incentive.

  For a veteran in an active mental health crisis, a nine day wait for a neurosurgical follow up, or a cardiology patient hoping for a swift answer, that gap is not an abstraction. It is the interval in which a provider has to decide, unilaterally, whether to keep going and hope VHA eventually pays for it, or whether to pull back until the request clears. Neither option was supposed to exist. The three day standard exists specifically so this decision never has to be made by a provider guessing at VHA’s intentions.

  Nothing in VHA’s response to this audit proposes a faster track for high acuity specialties. The agency concurred with all six of OIG’s recommendations, which is the standard bureaucratic gesture of agreement that commits the institution to eventually building better tracking and reporting tools, on a timeline stretching into July 2027.

  There is no recommendation, and no indication in VHA’s response, that mental health, neurosurgery, and cardiology requests should be prioritized differently than a routine referral for physical therapy. The three day clock runs the same for all of them. It is simply ignored more often, and for longer, in the specialties where ignoring it costs the most.

  A national average of 17 percent compliance is bad enough to justify an audit on its own. A breakdown showing that the worst performing categories happen to be the ones where a delayed decision can mean a missed diagnosis, an unmanaged psychiatric crisis, or a postponed cardiac intervention is the sort of detail that should reorder VHA’s priorities rather than simply add another line item to a corrective action plan.

  Instead, the plan treats every specialty as interchangeable, a queue to be cleared eventually, with no acknowledgment that some queues carry more risk per day of delay than others. The veterans waiting in those three specialties are not waiting on a bureaucracy that does not know it has a problem.

  They are waiting on one that knows precisely which categories are failing worst and has scheduled the fix for a year from now.

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  2026.10.09

• The Agreement Washington Won’t Let Anyone Update

  There is a particular kind of bureaucratic failure that doesn’t require anyone to be corrupt, lazy, or even wrong. It only requires two offices that disagree about who is allowed to fix something. The State Department’s Inspector General found exactly that arrangement sitting inside Embassy Guatemala City, in a report that spends most of its pages on the usual inventory of a mismanaged outpost (unregistered networks, overdue travel advances, a warehouse full of furniture nobody can account for) before landing on something more interesting.

  An agreement the United States signed with a foreign government sits frozen because nobody in Washington will let anyone update it, alongside a set of legally required evaluations that nobody at post even knew they were supposed to conduct.

  A Regional Hub Built From the Wreckage

  Guatemala’s embassy was never a quiet posting. It sits on a 9.4 acre compound, serves a community of roughly 50,000 US citizens, and functions as a category 4 embassy, the State Department’s own term for a post carrying outsized political and economic weight in its region.

  When USAID stopped implementing foreign assistance on July 1, 2025, following the Trump administration’s foreign aid review, the Bureau of Western Hemisphere Affairs designated Guatemala City as the regional assistance hub for Central America. The embassy inherited 18 legacy USAID projects worth $120.6 million and staffed the transition with three US direct-hire employees and five locally employed staff, a skeleton crew for a portfolio that size.

  The report is candid about what that transition actually felt like from inside the building. Staff described incomplete and shifting guidance, unclear expectations about what a “regional hub” was even supposed to do, travel restrictions, and a steadily rising pile of administrative approvals. The OIG’s own prior work found that the Department’s Assistance Transition Working Group never built a strategic workforce plan to figure out how many positions the new arrangement actually needed, following the same key practices the Government Accountability Office has been recommending for years.

  The Department’s last workforce strategic plan expired in 2023 and has not been replaced. So the hub was staffed by instinct rather than by plan, which is one way to run a $120 million portfolio, just not a durable one.

  The Letter Nobody Is Allowed to Fix

  Buried in the foreign assistance section is the finding that should worry anyone who cares about how the United States keeps its word. The Bureau of International Narcotics and Law Enforcement Affairs operates in Guatemala under a 2015 Letter of Agreement that still commits the US government to sectors, including community policing and justice sector reform, that INL quietly stopped funding years ago. Embassy staff told OIG they started drafting an update. Then, in January 2025, INL Washington told them to stop, pending further guidance that never arrived.

  INL’s official response to this finding is a small masterpiece of institutional confidence. The bureau maintains its current activities technically fall within the scope of the old agreement and its modifications, even while conceding the document needs modernizing, and says it will renegotiate “at an appropriate time,” citing Guatemala’s 2027 general elections as a scheduling consideration. OIG’s reply does not buy the premise.

  As the report notes, the agreement commits the US to activities INL no longer supports, which is precisely the risk the finding describes, and the embassy already did the preparatory work before Washington told it to sit down. The recommendation stays open until the Department produces an actual updated agreement, not a plan to eventually consider producing one.

  The companion finding is worse, because it is a repeat offense. INL Guatemala never conducted the joint program evaluations required by that same 2015 agreement and its subsequent amendments, evaluations meant to happen annually, then quarterly, then biannually as the agreement was modified. Embassy staff simply didn’t know the requirement existed.

  This is not INL’s first time getting caught here. OIG flagged the identical failure in a 2023 inspection, and the bureau’s fix at the time was a February 2024 cable instructing embassies to meet with counterparts and file an annual summary. Two years later, Guatemala’s INL staff still hadn’t produced documentation of a single formal joint evaluation, offering instead a description of regular but informal meetings under the High-Level Security Dialogue.

  Regular conversation is not the same thing as a written evaluation measured against agreed metrics, and the Department’s own instruments say so in writing, which makes this less a lapse than a pattern the bureau has now failed to correct twice.

  The Ledger of Small Failures

  Once you get past foreign assistance, the report reads like a checklist of an embassy running on staff who are stretched too thin to double check anything. Twenty nine of 140 residential properties never received the seismic safety evaluation required for a country OBO itself rates as very high risk for earthquakes, a gap the embassy blames on management oversight rather than resources. Property management fared no better.

  Some $315,000 in nonexpendable equipment, including $267,000 of IT hardware, moved from warehouse to office without the required transaction paperwork, while the furniture and appliance pool sat at nearly double the Department’s stock cap, with $89,000 in assets misclassified, including baby cribs and vacuums somehow coded as program furniture.

  Fourteen chauffeurs blew past the 10 hour daily duty limit on 34 occasions across ten pay periods, a driver safety violation the embassy attributes to poor trip planning rather than any shortage of drivers.

  INL itself ran up $115,000 in overdue travel advances, nearly all of it tied to an internal 90-day repayment habit that directly contradicts the Department’s 30-day standard, the same section that couldn’t produce its evaluation paperwork running its own informal exception to a different rule entirely.

  The most quietly damning number in the whole report involves money the Department didn’t lose so much as fail to notice. Only one of the embassy’s five US direct-hire Diplomatic Technology positions was funded through International Cooperative Administrative Support Services, the mechanism that splits IT costs across the agencies who actually use the service, despite the embassy’s own estimate that a second position spends more than half its time on ICASS work.

  The Department had been quietly absorbing costs that other agencies were supposed to share, to the tune of an estimated $219,000 over three years, not because anyone hid it, but because nobody at post knew the requirement to check existed.

  It is the same root cause running through half the findings in this report: not fraud, not negligence in any dramatic sense, just an institution that never told the people doing the work what the rules actually required of them.

  What the Concurrence Actually Buys You

  Embassy Guatemala City concurred, or partially concurred, with all 11 recommendations, and OIG considers every one of them resolved, which in the audit world is a term of art meaning the parties agree on what should happen next, not that it has happened yet. The seismic assessments are still eight properties short of complete.

  The FAP stock reduction target is still short of the Department’s cap, aimed for the end of September. The updated Letter of Agreement is not yet negotiated, and INL’s own timeline explicitly runs it past a foreign election it hasn’t happened yet.

  Resolved, in other words, is a status the Department assigns to problems it has agreed to eventually stop having, which is a useful thing to remember the next time an agency’s press office announces that an inspector general’s findings have been addressed.

  Sources: U.S. Department of State Office of Inspector General, Inspection of Embassy Guatemala City, Guatemala (ESP-25-01, 2026); Executive Order 14169, Reevaluating and Realigning United States Foreign Aid (January 2025).

  2026.10.09

• GAO Measured the Delay; A Judge Had Already Called It Illegal

  The Numbers GAO Was Willing to Count

  The Government Accountability Office released a report this week on FEMA‘s Building Resilient Infrastructure and Communities program, the agency’s flagship pre disaster mitigation grant, and the numbers it counted are damning enough on their own terms. As of March 2025, FEMA had awarded 1,245 BRIC subgrants worth about $2.5 billion, which sounds respectable until you notice that figure is half of the $4.8 billion Congress actually made available. Of what had been awarded, FEMA had reimbursed $62 million and closed out exactly 37 subgrants. The median time for FEMA to finish reviewing a subapplication and award the money, GAO found, is 7 to 9 months. Another 700 subapplications, tied to roughly $2.2 billion, were sitting in the second of FEMA’s two review stages with no decision made at all.

  GAO quotes communities saying, in the mild register that federal audit reports reserve for people who are furious but trying to stay eligible for future funding, that these timeframes “could extend project timelines and increase costs.” The report’s seven recommendations are the standard genre of fix; identify efficiencies in the subapplication review, apply lessons learned to communication, establish performance goals. All reasonable. All aimed at a process problem.

  Here is the sentence in the report that is doing more work than it appears to be doing. From April 2025 to March 2026, FEMA awarded no subgrants and obligated no funds. Eleven months, stated as a fact about program administration, sitting inside a report about review timelines.

  What Happened Between April and March

  That eleven month gap was not FEMA finishing its paperwork slowly. It was FEMA terminating the program.

  On April 4, 2025, FEMA formally ended BRIC, cancelling pending applications going back to fiscal year 2020 and moving to redirect the money elsewhere, a move detailed in the federal court’s later ruling on the matter. BRIC is not a discretionary line item FEMA can turn off by memo. It is funded through direct congressional appropriations under the Infrastructure Investment and Jobs Act and set asides from the Disaster Relief Fund under the Stafford Act, which is precisely what a coalition of states argued when they sued that July.

  On December 11, 2025, U.S. District Judge Richard Stearns agreed with them, and did not agree gently. He ruled that FEMA’s termination violated the Further Consolidated Appropriations Act of 2024, the constitutional separation of powers, the Appropriations Clause, and the Administrative Procedure Act, and issued a permanent injunction ordering the program restored. FEMA did not restore it. Two months later, the same states had to go back to court and ask a judge to force compliance with his own order, which the Washington state attorney general’s office documented in March 2026, when Judge Stearns issued an enforcement order giving FEMA 21 days to publish a new funding notice. FEMA published it on March 25, 2026, three weeks past the deadline it had already been given twice.

  So the eleven months in GAO’s report is not a measurement of bureaucratic friction. It is the interval between an unlawful act and a federal court forcing its reversal, with an extra two months tacked on for the agency’s noncompliance with its own defeat. GAO’s highlights page does not use the words termination, lawsuit, or injunction. It uses the word timeframes.

  The plaintiffs were not abstractions. Maryland’s attorney general noted that the termination left more than $80 million in BRIC funding for the state in question, including flood mitigation work for Crisfield and South Baltimore. Arizona’s attorney general listed 25 selected projects worth $9.8 million, among them a $4.6 million infrastructure project in Buckeye. These were not requests still being drafted. They were projects that had cleared FEMA’s review and were waiting on a check, from a government that had already told the public the check was cancelled.

  FEMA’s Version of the Same Year

  FEMA’s own account of this period, issued as a public notice to states, tribes, and territories, tells a different story than the one a federal judge told. It explains that BRIC “became bogged down in bureaucracy, focused on climate change initiatives, and riddled with inefficiencies” under the previous administration, which is why Secretary Kristi Noem “directed FEMA to conduct a methodical evaluation of the program.” The notice adds that FEMA will resume normal operations “once the lapse in appropriations has ended,” folding the government shutdown into the same sentence as the agency’s own program suspension, as though the two were the same kind of interruption.

  Nowhere in FEMA’s telling does a judge find that the agency broke the law. The “methodical evaluation” and the illegal termination occupy the exact same calendar days; FEMA simply gets to narrate them as a virtue rather than a defeat. This is the closest thing this story has to a punchline. A federal court says the government violated the separation of powers to shut down a program Congress funded. The agency responsible calls it stewardship.

  Reapply, Please

  The 700 subapplications GAO found stalled in review as of March 2025 were caught in that stage precisely when the termination hit. The program that eventually reopened is not, procedurally, the one they applied to. FEMA’s own fact sheet for the restored funding opportunity states plainly that “previous subapplications submitted for the initial Fiscal Year 2024 BRIC funding opportunity will not be reviewed,” and instructs applicants to “review, update, and resubmit in accordance with this new funding opportunity.”

  Communities that had already cleared FEMA’s first review stage, in some cases years earlier, were told their applications no longer exist. Whatever work went into a benefit cost analysis, a scope of work, a local match commitment, has to be redone against new evaluation criteria FEMA wrote after Congress had already appropriated the money for the old ones.

  None of GAO’s seven recommendations addresses this, because GAO’s mandate is process efficiency, not legality, and by the time its auditors were writing, the termination was already adjudicated elsewhere. What the report actually documents, whether it means to or not, is what happens to an audit’s own numbers when a program spends nearly a year not existing. The 7 to 9 month review time GAO flags as the problem to fix was, for the 700 communities caught in it, the least of their delays. They were not waiting on FEMA to finish reading their file. They were waiting on FEMA to admit the file still counted.

  Sources: Government Accountability Office, Building Resilient Infrastructure and Communities: FEMA Should Improve Subgrant Review Timelines (GAO-26-107774, September 2026); Washington v. FEMA, U.S. District Court, Memorandum and Order (December 11, 2025); Washington State Attorney General, Court Order Enforcing BRIC Ruling (March 2026).

  2026.10.08

• Pentagon Spent Decades and Billions Hardening GPS. The Military Still Isn’t Ready to Lose It.

  A $6.27 billion replacement GPS control system was canceled this year, aircraft receivers remain years away, and GAO says fragmented Pentagon management is hampering efforts to protect U.S. forces from a threat already demonstrated in Ukraine.

  WASHINGTON — For more than two decades, the Pentagon has been trying to solve a problem that has since stopped being hypothetical.

  America’s military depends heavily on the Global Positioning System to navigate ships, aircraft and vehicles, coordinate communications and guide precision weapons. Adversaries have meanwhile demonstrated that GPS signals can be jammed, spoofed or otherwise disrupted.

  The Department of Defense has spent tens of billions of dollars trying to make that system harder to defeat and developing alternatives for when it is.

  According to a new Government Accountability Office report released Tuesday, considerable work remains.

  GAO describes GPS as the military’s principal source of positioning, navigation and timing information, but also warns that the Pentagon’s dependence on it creates a potential “single point of failure.” The department has spent more than 20 years developing a more secure and jam-resistant military GPS signal known as M-code, yet modernization has repeatedly encountered delays across satellites, ground-control systems and the equipment necessary for weapons and military platforms to actually use the signal.

  The stakes are no longer confined to acquisition schedules.

  Russia has used GPS jamming during the war in Ukraine to degrade some U.S.-provided precision-guided munitions, according to GAO, while both Russia and Ukraine have used spoofing to interfere with legitimate GPS signals.

  Research cited by GAO found intensified GPS jamming in eastern Ukraine reduced the effectiveness of one type of GPS-dependent precision-guided munition by as much as 80 percent. Another munition remained disrupted as much as 40 percent of the time even after countermeasures were employed.

  The Pentagon is therefore racing not merely to improve GPS, but to ensure American forces can continue operating when GPS is unavailable.

  It is doing so while still trying to finish a modernization effort that began around the turn of the century.

  Satellites Since 2005, Receivers Still Coming

  The military’s M-code capability depends upon three pieces working together: satellites capable of transmitting the signal, a ground system capable of controlling the constellation, and receivers installed in weapons and military equipment capable of using it.

  The first M-code-capable GPS satellites have been in orbit since 2005.

  Development of the Next Generation Operational Control System, known as OCX, began in 2010. Development of newer receiver equipment began in 2017.

  Previous GAO investigations have documented schedule delays reaching a decade or longer and cost increases reaching billions of dollars.

  The government watchdog was raising alarms about OCX by at least 2015, when it reported persistent cost and schedule growth, a high defect rate and concerns that unrealistic estimates were limiting Pentagon oversight. GAO’s 2015 report is available here.

  Eleven years later, the Pentagon pulled the plug.

  The Space Force formally accepted OCX from contractor Raytheon in July 2025 following years of development and testing. But acceptance came with waivers and deviations related to technical shortcomings.

  Among them was an unmet requirement involving “time-steering,” the mechanism used to maintain accurate time dissemination through the GPS constellation. Pentagon testing officials also considered the system’s cyber survivability a high-risk area requiring continued mitigation and investment.

  Integrated testing then uncovered still more problems.

  Space Force officials later said the difficulties spanned numerous capability areas and potentially put existing military and civilian GPS capabilities at risk.

  By January 2026, the government had spent approximately $6.27 billion on OCX, including Raytheon funding and government testing and program-support costs.

  Three months later, DOD canceled it.

  Space Force concluded that attempting to complete OCX posed greater risk than continuing to upgrade the GPS control system that OCX had been designed to replace. The Space Force’s account of the termination is available here.

  The Pentagon had effectively spent years and billions developing a replacement for its old GPS control system, accepted that replacement with unresolved deficiencies, and then concluded that modernizing the old system was the safer option.

  The Replacement for the Replacement

  DOD is now pursuing what it calls Architecture Evolution Plan Modernization, or AEP-M, a multiphase modernization of the existing GPS Operational Control Segment.

  But changing direction carries consequences of its own.

  The Space Force had planned to use OCX capabilities to launch, check out and operate the next generation of GPS IIIF satellites. Those satellites and their software were being prepared around OCX.

  Now the existing control system has to be modified to handle them instead.

  GAO says the decision creates schedule risk for incorporating the new satellites into the GPS constellation. The first ten GPS IIIF satellites were already averaging nine months of delay against a revised December 2024 delivery schedule as of September.

  The first satellite was projected for delivery in July 2027, while ground-control capability is needed in time to support planned launches beginning in 2028.

  It is another dependency in a modernization program full of them.

  And satellites that can broadcast M-code are only useful if American weapons can receive it.

  Aircraft Remain a Problem

  GAO found that development and fielding of M-code receiver equipment continue to face software, funding, technical and integration problems, particularly aboard aircraft.

  Integrating the new receivers into aircraft requires tying them into flight software and satisfying airworthiness requirements, making aviation among the most difficult pieces of the modernization puzzle.

  One Air Force program, the Embedded GPS Inertial Navigation System-Modernized, or EGI-M, lost one of its contractors after the company failed to provide what officials considered a realistic updated development schedule.

  The remaining contractor underestimated the complexity of software associated with security and airworthiness certification, according to GAO.

  Funding shortages created another problem: the contractor could not maintain the staff necessary to complete development on schedule.

  Production decisions for EGI-M variants used by the Navy’s E-2D and Air Force F-22 are now estimated for mid-2028. A decision on the F/A-18 variant is projected for 2030.

  Initial EGI-M fielding is expected in March 2032.

  The Navy, meanwhile, is developing an interim receiver to provide M-code capability to aircraft while it waits for the longer-term system.

  There has been progress elsewhere. The Army and Navy are fielding M-code-capable and multi-PNT receivers in some ground vehicles, ships and Army aircraft, and all the services are pursuing systems capable of combining GPS with alternative navigation information.

  Those alternatives are becoming increasingly important.

  When GPS Goes Dark

  DOD is building what amounts to a navigation toolbox for a battlefield where GPS can no longer be assumed.

  Some systems would obtain positioning signals from satellites in low-Earth orbit. Others could navigate without satellites at all.

  Inertial systems measure a vehicle’s direction, acceleration and orientation. Visual-navigation systems compare camera imagery against stored maps. Other technologies navigate by comparing measurements against maps of Earth’s magnetic or gravitational fields.

  Still others look upward.

  Modernized celestial-navigation systems can determine location using stars, planets and even artificial satellites whose orbits are known.

  The Pentagon is also deploying backup timing systems, including regional clocks and increasingly small atomic clocks, because disruption of GPS can affect far more than knowing where a vehicle is located. Loss of GPS timing can interfere with military communications and networking.

  Relatedly, a previous Bureaucracy Times investigation examined how the Pentagon audits the clocks that underpin GPS timing and what details remain classified.

  GAO’s illustration on page 22 depicts the intended result: GPS satellites operating alongside low-Earth-orbit constellations, celestial navigation, inertial sensors, visual navigation, magnetic and gravity navigation and alternative timing sources while adversaries attempt jamming, spoofing, cyberattacks and direct attacks against satellites.

  The technology exists in various stages of maturity.

  Getting all of it into the right weapons at the right time appears to be another matter.

  Everyone Is in Charge

  That may be the most consequential finding buried inside GAO’s highly technical report.

  Congress created a Positioning, Navigation and Timing Oversight Council to coordinate DOD’s sprawling PNT enterprise. But individual military services retain authority over the budgets funding their respective programs.

  The council can establish priorities and make recommendations.

  The services control the money.

  GAO found that this fragmented structure makes it difficult to synchronize programs that depend upon one another.

  A receiver card might be developed by one organization. Another program develops the receiver containing it. A military service then has to integrate that receiver into an aircraft, ship or vehicle. Munitions fired by those platforms may operate on yet another modernization schedule.

  The result can be technologically sophisticated pieces arriving at different times.

  Internal meeting records reviewed by GAO show that the problem has not gone unnoticed.

  Officials discussed inadequate Air Force funding for aviation receiver programs, and program officials attributed missed development goals partly to “chronic underfunding.”

  At a May 2025 PNT Oversight Council meeting, one official identified what may be the simplest description of the organizational problem: there was a need to “designate a single owner to the entire PNT value chain.”

  DOD has since consolidated several aviation receiver and M-code efforts into an Air Force-managed joint program office. GAO found that consolidation has produced closer reviews of costs, schedules, technical risks and performance and could serve as a model elsewhere.

  But the broader enterprise remains fragmented.

  GAO concluded that under the existing structure, DOD “lacks reasonable assurance” that its PNT investment decisions are addressing pressing warfighting needs.

  Two Decades of Warnings

  The new report does not arrive in isolation.

  GAO warned in 2021 that M-code remained years from widespread use and that receiver delays were producing ripple effects across weapons programs. Read GAO-21-145.

  In 2022, auditors found that Pentagon databases used to manage GPS modernization contained incomplete or inaccurate information. DOD was ultimately planning to integrate modernized GPS equipment into roughly 700 weapon systems, making reliable schedules and coordination particularly important. Read GAO-22-105086.

  In 2023, GAO again reported ground-system delays and questioned other portions of the modernization strategy. Read GAO-23-106018.

  And in September 2024, GAO reported that significant challenges remained across the space, ground and user-equipment segments of the modernization effort. Read GAO-24-106841.

  Two years later, the ground system examined in those reports no longer exists as a development program.

  GAO’s latest report puts the broader history in unusually stark terms: DOD has worked for more than two decades and spent tens of billions of dollars laying the foundation for fully modernized GPS and complementary navigation systems, yet “considerable work remains” before those capabilities are fielded.

  GAO issued three recommendations calling on the Army, Navy and Air Force to assess where GPS modernization and complementary PNT programs should be consolidated and to develop consolidation plans where doing so would improve strategic alignment.

  DOD agreed with all three recommendations.

  The Army maintains that its modernization efforts are already well coordinated and that it has found no duplication, but told GAO it will participate in a broader Pentagon assessment and develop a consolidation plan where appropriate.

  The Navy and Air Force likewise agreed to examine consolidation.

  The technology race, meanwhile, is unlikely to wait for the organizational chart.

  The Pentagon began developing a GPS signal resistant to jamming more than two decades ago. The first satellites capable of transmitting it reached orbit in 2005. Since then, wars have supplied real-world evidence of what happens when precision weapons encounter an enemy capable of interfering with satellite navigation.

  The United States now possesses satellites broadcasting the hardened signal, weapons waiting for modernized receivers, alternative navigation technologies under development and a new program to upgrade the old ground-control system after abandoning its $6.27 billion replacement.

  What it still does not have, according to GAO, is assurance that all those pieces will arrive where they are needed when the next battlefield starts interfering with GPS.

  Sources

  • GAO-24-106841 — GPS Modernization: Delays Continue in Delivering More Secure Capability for the Warfighter, Sep. 2024
  • GAO-23-106018 — GPS Modernization: Space Force Should Reassess Requirements for Satellites and Handheld Devices, Jun. 2023
  • GAO-22-105086 — GPS Modernization: DOD Needs to Ensure Reliable Data to Manage and Oversight Its Modernization Effort, 2022
  • GAO-21-145 — GPS Modernization: DOD Continuing to Develop New Jam-Resistant Capability, But Widespread Use Remains Years Away, Jan. 2021
  • GAO-15-657 — GPS Modernization: DOD Faces Challenges in Sustaining Capabilities and Achieving Acquisition Goals, 2015
  • U.S. Space Force — USSF Terminates Program for the GPS Next Generation Operational Control System, Apr. 2026

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  2026.10.07

• HUD Arrested 491 Fugitives in Subsidized Housing. Its Own Audits Show How They Got There.

  The Department of Housing and Urban Development’s inspector general spent much of 2026 helping federal agents hunt fugitives living in federally assisted housing.

  By the time the nationwide effort was tallied, 491 people had been arrested.

  But the arrests raise a question considerably larger than the operation itself: How did so many wanted people wind up inside the federal housing-assistance system, and how did investigators find them after they were there?

  HUD’s Office of Inspector General announced Oct. 5 that its nationwide “Operation Clean House” had resulted in 491 arrests through a series of enforcement operations conducted with the U.S. Marshals Service and state and local law-enforcement agencies.

  The arrests included people wanted for offenses ranging from drug trafficking, weapons crimes and aggravated assault to rape, murder and child sex offenses. Authorities also seized 10 firearms.

  The national announcement, however, is only the final chapter of an enforcement campaign that unfolded city by city throughout 2026.

  And viewed alongside a series of HUD OIG audits released during the same period, Operation Clean House exposes an uncomfortable contrast inside the federal housing system: investigators proved remarkably capable of finding wanted fugitives after they were associated with federally assisted housing while auditors were simultaneously finding serious weaknesses in the systems intended to determine who should be receiving assistance in the first place.

  Building Operation Clean House

  Operation Clean House was not a single nationwide raid.

  Instead, HUD OIG worked with the U.S. Marshals Service and other agencies in a succession of local operations targeting fugitives connected to federally assisted housing.

  An early operation in Columbus, Ohio, targeted people with active felony warrants who were residing in government-subsidized housing. HUD OIG later reported that operations in Columbus and Minneapolis together resulted in 55 arrests of people residing in HUD-assisted housing.

  In Memphis, another operation resulted in 24 arrests. HUD OIG said the majority of those arrested were current HUD program participants who were taken into custody inside HUD housing.

  Kansas City followed with 40 arrests during a five-day operation targeting violent or repeat offenders associated with HUD-assisted properties or leaseholders.

  Philadelphia produced another 41 arrests of fugitives residing in federally subsidized properties.

  Then came Cleveland.

  During a two-week operation in September, authorities arrested 75 people. According to the U.S. Marshals Service, 68 were fugitives identified as using HUD housing. Seven additional people with outstanding felony warrants were encountered during the operation.

  That distinction matters.

  HUD OIG’s nationwide figure of 491 represents arrests resulting from Operation Clean House. It should not automatically be interpreted as 491 HUD beneficiaries who were illegally receiving housing assistance.

  The government’s own descriptions show that the population swept up by the operation was more complicated.

  But Cleveland also provides one of the clearest clues about what was happening behind the scenes.

  According to the Marshals Service, investigators worked with HUD OIG to “develop information about wanted fugitives living in HUD housing” before conducting the operation.

  Exactly how they developed that information remains unclear.

  The Other Half of the Story

  Six days before announcing the 491 arrests, HUD OIG released three audits examining tenant eligibility and related controls at major housing authorities in Washington, Chicago and Los Angeles.

  Together, HUD OIG said the audits identified more than $4.3 million in improper payments associated with deficiencies involving criminal-background screening, immigration verification and other eligibility controls. The finding extends a pattern this publication has tracked: The $1.4 Billion HUD Couldn’t Be Bothered to Count.

  The findings provide an illuminating backdrop to Operation Clean House.

  At the District of Columbia Housing Authority, auditors identified 17 lifetime registered sex offenders participating in housing programs. Thirteen, according to OIG, had been improperly admitted despite a mandatory federal prohibition.

  HUD paid more than $1.6 million in housing assistance associated with those 13 individuals.

  Auditors also identified 13 participants with ineligible immigration status who benefited from another $869,877 in assistance. Another 178 participants could not have their immigration status verified because of problems involving use of the federal Systematic Alien Verification for Entitlements, or SAVE, system.

  The problems were not confined to Washington.

  At the Housing Authority of the City of Los Angeles, HUD OIG examined a population of approximately 98,000 tenants and found at least $770,701 in housing assistance had been paid for 15 tenants subject to lifetime sex-offender registration requirements who were ineligible when they entered the programs.

  In Chicago, auditors found five lifetime registered sex offenders had been admitted to housing programs. OIG also found required criminal-background checks had not been conducted after admission for 14 of the 59 household members auditors reviewed.

  Taken together, the audits describe something considerably more consequential than isolated paperwork errors.

  They show weaknesses in the eligibility and screening machinery responsible for policing access to federally subsidized housing at the same time federal agents were conducting a nationwide campaign to locate fugitives within that system.

  Arrested Does Not Mean Ineligible

  There is an important distinction here.

  A criminal record does not automatically disqualify someone from receiving federal housing assistance, and the fact that someone was arrested during Operation Clean House does not establish that the person was improperly receiving benefits.

  HUD OIG itself examined the issue in a September report concerning criminal-activity requirements across federal rental-assistance programs.

  The rules vary depending on the program and circumstances. Some criminal conduct can result in discretionary eviction or denial of assistance, while federal law establishes mandatory restrictions in particular situations, including certain lifetime sex-offender registration requirements and methamphetamine-related offenses in federally assisted housing.

  That makes Operation Clean House more complicated than a simple story about criminals receiving taxpayer-funded housing.

  It also makes the unanswered questions more important.

  How many of the 491 people arrested were actual HUD beneficiaries?

  How many were authorized members of assisted households?

  How many were unauthorized occupants?

  How many were guests or other people simply located at HUD-assisted properties?

  How many arrests resulted in eligibility reviews?

  How many households subsequently lost assistance?

  How many cases uncovered false information, undisclosed household members, housing fraud or improper federal payments?

  The Oct. 5 announcement does not provide those figures.

  How Did HUD Find Them?

  There is another unanswered question buried underneath the entire operation.

  HUD OIG and the Marshals Service clearly possessed some mechanism for connecting wanted fugitives with federally assisted housing.

  The government has described the results without explaining much about the machinery that produced them.

  It is not clear from the publicly available records whether investigators compared fugitive or warrant databases against HUD beneficiary information, whether the Marshals Service supplied target lists that HUD OIG checked against housing records, whether individual public housing authorities performed searches, or whether investigators relied primarily on addresses and conventional fugitive investigations.

  Nor is it clear whether Operation Clean House represents a temporary enforcement initiative or an ongoing data-matching capability.

  The question is particularly relevant because HUD OIG has separately told Congress that it wants greater technological capability to analyze large datasets and identify fraud.

  In its fiscal 2027 budget justification, OIG described Operation Clean House among its enforcement efforts while also seeking resources for artificial-intelligence capabilities that could help investigators parse large datasets and identify fraud more efficiently.

  There is no public evidence establishing that artificial intelligence was used during Operation Clean House.

  But the documents point toward an inspector general increasingly interested in using large-scale data analysis as an investigative tool.

  That makes understanding exactly how Clean House identified its targets more than a matter of curiosity.

  A Successful Operation, and an Unfinished Accounting

  Measured purely by arrests, Operation Clean House was substantial.

  Nearly 500 people were taken into custody. Some were wanted for extremely serious crimes. Federal, state and local agencies cooperated across numerous cities, and dangerous fugitives were removed from communities.

  But HUD OIG itself has supplied the reason not to stop counting at 491.

  Its audits show that housing authorities have sometimes failed to conduct required background checks, admitted prohibited individuals and made millions of dollars in improper assistance payments.

  Operation Clean House demonstrated that federal investigators could find wanted fugitives connected to federally assisted housing.

  The audits raise the more uncomfortable question of why some people who should never have been admitted to housing programs were able to pass through the front door.

  And the government has yet to explain fully how many of the 491 arrests exposed failures in the housing system itself.

  For now, taxpayers have been given an arrest total.

  The program-integrity accounting is still missing.

  Sources

  • HUD OIG — Operation Clean House: 491 Arrests Announced, Oct. 5, 2026
  • HUD OIG — Major Audits: $4.3 Million in Improper Payments at DC, Chicago, LA Housing Authorities, Oct. 1, 2026
  • U.S. Marshals Service — Operation Clean House: Cleveland, Sep. 30, 2026
  • U.S. Marshals Service — Operation Moving Day: Philadelphia, Sep. 28, 2026
  • HUD OIG — Operation Clean House: Memphis, Jun. 1, 2026

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  6 reposts

  2026.10.07

• The Compliance System That Runs on Trust

  Section 889 of the 2019 defense authorization act did something admirably blunt for a Washington statute; it named five Chinese companies (Huawei, ZTE, Hytera, Hikvision, Dahua) and told every federal agency to stop buying their gear, stop buying anything built on their gear, and stop contracting with anyone else who uses it. Six years on, a new GAO report says the ban worked, more or less. Federal spending with the five firms cratered after 2019 and hit zero in three of the last four fiscal years. Ninety percent of companies with active contracts now say they don’t touch the equipment.

  Read past the highlights box, though, and this is less “mission accomplished” than “nobody bothered to look.”

  Whoever They Say They Are

  The entire enforcement mechanism rests on a checkbox. Contractors register with the government and represent, once a year, that they do or don’t use covered equipment. GSA and Defense Department contracting officers are explicitly authorized to take that representation at face value; GAO found neither agency’s officers “regularly check the accuracy of representations,” because policy tells them not to unless something independently raises a flag. Nobody audits the 90 percent who checked the good box. They’re just believed.

  That might be defensible if the government at least knew who the banned companies actually were, corporately speaking. It doesn’t. The law also covers subsidiaries and affiliates, and identifying those is the entire ballgame; a contractor can’t truthfully represent compliance if it doesn’t know the vendor three tiers down its supply chain is secretly a Hikvision shell.

  GSA has identified about 700 such entities using commercial “supply chain illumination” tools. GAO’s own prior work found the Air Force tested those same tools and got them 60 to 70 percent accurate, flagging risk where none existed and missing suppliers that did. The Defense Department doesn’t keep a subsidiary list at all. Officials said corporate structures change too fast for a list to stay useful, a fascinating argument for why the department shouldn’t try rather than why it should try harder.

  The List Nobody Shared Until Somebody Was Watching

  Here is the detail worth reading past the highlights page for. GSA built that list of 700 shell companies years ago. It never gave it to any other federal agency, not to the dozens also bound by Section 889, not through any of the information sharing channels Congress built for this exact purpose in the 2018 Federal Acquisition Supply Chain Security Act.

  GSA and Defense didn’t reliably share the list even with each other. Both agencies told GAO they exchanged subsidiary information “occasionally” in the past, and only started meeting on it regularly after GAO began asking questions for this audit. One Defense official said the department is “looking to improve this process so that it is no longer ad hoc,” six years and one federal audit after the prohibition took effect.

  Asked why the information hadn’t gone further, both agencies said the statute doesn’t require them to share it. True, and also the whole problem in one sentence; a compliance regime built on knowing which shell companies belong to a sanctioned Chinese firm produced exactly one usable master list across the federal government, and its owner sat on it until an outside auditor came knocking.

  A Search Tool for Information That’s About to Stop Existing

  The one piece of real infrastructure here, an automated tool GSA built with NASA’s help to search representations in real time, is about to get less useful. The administration’s “Revolutionary FAR Overhaul” plans to scrap the annual representation requirement and replace it with a single, one-time box check buried inside a company’s initial contract offer. GSA and Defense officials told GAO they’re worried purchase cardholders won’t be able to pull current compliance data on a given vendor once that happens; neither agency has worked out what to do about it.

  The timing is not ideal. A parallel ban on certain Chinese magnets and metals takes effect in January 2027. A ban on Chinese semiconductors follows in December 2027. Both will demand exactly the subsidiary and supply chain visibility that Section 889 never quite produced, and that the government is now preparing to make harder to track, not easier.

  The Actual Recommendation

  GAO’s fix, delivered with its usual bloodless restraint, is that GSA and Defense should “periodically” share what they know with other agencies. Both concurred. GSA says it’s “working on a plan.” Defense says it will “assess the feasibility” of even collecting subsidiary data in the first place, then figure out later who to send it to.

  Six years, one statute, five named companies, and the government’s best answer to “who actually owns these shell companies” is a plan to think about assessing feasibility. The equipment ban worked. The part where anyone checks whether it’s still working is, by both agencies’ own account, not required by law, and so it mostly hasn’t happened.

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  9 reposts

  2026.10.06

• The Auto Club That Couldn’t Learn

  American Automobile Association of Northern California, Nevada and Utah sells roadside assistance, home insurance and the comforting idea that someone competent is coming to help you. It has spent the last five years demonstrating, in triplicate, that this idea does not extend to its own workforce.

  On September 24, 2026, a second National Labor Relations Board administrative law judge found the company had engaged in the exact species of misconduct a different judge had already punished it for once. If institutional learning were a job requirement at AAA, half its insurance agents would be out of work.

  The new decision, issued by Judge Mara-Louise Anzalone of the Board’s San Francisco branch, consolidates six unfair labor practice cases (32-CA-321155 and five related dockets) filed by International Brotherhood of Teamsters Local 665 after it organized AAA’s California sales agents in 2021. It runs seventy-eight pages and concludes that AAA bargained in bad faith for four years, prematurely declared impasse, imposed a pay cut worth nearly a third of some agents’ income, retaliated against a union steward, and offered severance agreements that illegally required workers to sign away their federal labor rights.

  The judge ordered reinstatement, backpay, a bargaining order and, in an unusual touch, a video of AAA’s own in house labor counsel reading the notice of violations aloud to the workforce she helped mislead (Administrative Law Judge’s Decision, NLRB Case 32-CA-321155).

  A Sequel Nobody Asked For

  This is not AAA’s first ALJ decision. In March 2026, Associate Chief Judge Arthur Amchan issued findings in a companion case, known informally as AAA I, covering conduct between 2021 and 2022. He found AAA unlawfully fired five agents for union activity, unlawfully withdrew a long-standing employee award program the moment the Teamsters won their election, and issued subpoenas demanding information about workers’ protected activity.

  He specifically credited testimony that a senior AAA official told branch managers to “pull back our support on the agents” without making it obvious, direct evidence, in his words, of the company’s animus (NLRB Region 32, Administrative Law Judge Decision, Case 32-CA-280838).

  Judge Anzalone’s decision picks up almost exactly where Amchan’s left off, and finds the same company doing the same thing. Where AAA I documented unlawful discharges and unilateral changes, AAA II documents four more years of bargaining conducted, in the judge’s words, with “the intent to frustrate the possibility of reaching an initial collective bargaining agreement.”

  The company’s own in house counsel supplied the tell. Asked at the table whether she had ever previously proposed a fifty percent wage cut in negotiations, she said yes, and volunteered that afterward, the union involved had been decertified. Judge Anzalone treated the remark as the case’s Rosetta Stone; it explained, more efficiently than four years of testimony could, exactly what AAA thought “bargaining” meant.

  Process as a Feature, Not a Bug

  There is a temptation to read this as a story about one bad actor. It is more usefully read as a story about what happens when the machinery meant to punish that actor takes half a decade to grind.

  The underlying union election was certified in June 2021. Some of the conduct Judge Anzalone found unlawful, the elimination of renewal commissions worth an average of $98,000 a year to affected agents, was announced before the ink on that certification was dry, and not fully resolved by an ALJ until more than five years later.

  In the interim, AAA implemented its final offer anyway, in August 2023, and only a federal district judge’s injunction under Section 10(j) of the Act stopped it from also killing commissions outright in February 2025 (NLRB Region 32, “NLRB Region 32 Oakland Wins Injunction Requiring AAA to Rescind Unlawful Policy and Maintain Employee Commissions,” January 2025).

  None of this is unusual for the Board’s adjudication process, which is precisely the point. An employer facing a well resourced legal team can implement the disputed change, litigate for years, and absorb whatever remedy eventually lands, confident that the remedy (backpay with interest, a notice on a breakroom wall) will cost less than simply not doing it would have.

  Judge Anzalone’s decision even quotes AAA’s own counsel bragging that a prior fifty percent cut had led to a decertification vote; the calculation being described, in open bargaining session, was that provoking employee anger at the union might be cheaper than raising wages. Whether or not that specific bet paid off here, the broader one, that years of litigation are a survivable cost of doing business, generally does.

  Two Judges, One Company, No Deterrent Effect

  What makes the AAA record instructive is the redundancy. This is not an agency inferring a pattern from a single set of facts; it is two ALJs, working from separate evidentiary records and separate hearings years apart, independently finding that AAA treated its newly organized workforce as an obstacle to be managed rather than a party to bargain with.

  Amchan found unlawful discharges and unilateral changes in 2021 and 2022. Anzalone found bad faith bargaining, a second wave of unilateral changes, two more constructive discharges and retaliation against a steward, running from 2022 through 2025. The AAA II decision is dated the same day the Board’s own docket shows the case being formally transferred upward, meaning this finding, like Amchan’s before it, is not yet final; AAA retains the right to file exceptions with the full Board, a process that can itself take years (NLRB Case Search, Case 32-CA-321155, Docket Activity).

  That is the institutional health problem worth dwelling on. The National Labor Relations Act does not fine repeat offenders more heavily, does not accelerate review for employers with an open prior finding against them, and does not treat a second ALJ decision covering the same company and the same union as evidence that the first remedy failed to remedy anything. Each case proceeds as though the last one had never happened, on its own clock, toward its own possible appeal.

  A company that loses twice, in sequence, on the same underlying dispute, pays roughly the same price as one that loses once. Judge Anzalone’s unusual remedy, ordering AAA’s labor counsel to personally read the notice of violations aloud on camera, reads less like standard relief and more like a judge trying, within a toolkit that offers her almost nothing else, to make the second loss feel different from the first.

  Whether the Board upholds even that gesture on review remains, like the rest of this case, an open question with a very long clock.

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  7 reposts

  2026.10.05