Bureaucracy Times

Federal Register Watch: October 6, 2026

Tuesday’s Federal Register, Volume 91, Number 192, ran 630 pages, and three documents account for 424 of them. Two are Securities and Exchange Commission proposals, one on crypto custody and one on who may charge performance fees, and the third is a 120-page final rule on health insurance price transparency. The more revealing material sits in the margins, where FinCEN retired two proposals that would have watched crypto move and the Treasury Department shielded a new fraud tip line from the Privacy Act.

Self-Custody, Now With Paperwork

Start with the SEC’s proposal on adviser and fund custody rules and crypto custody rules, which runs 234 pages and takes comments until December 7. The core idea is that a registered investment adviser could hold a client’s crypto itself when no permitted custodian is available, provided the adviser documents that finding in writing at the outset and again every quarter. The release adds conditions. The adviser must mitigate cybersecurity risks and review its controls at least annually, and it must obtain internal control reports within six months and yearly after that. A fund’s board would have to decide, before the adviser takes possession and annually afterward, that the asset would receive reasonable care in the adviser’s hands.

It is a tidy structure, and the release is candid about why custody rules exist. It recounts that when the adviser and the custodian are the same party, the adviser can move the assets directly, and that a separate custodian’s account statement is what discourages unauthorized trading. The proposal then builds a path for the adviser to be both. The justification is practical and not frivolous. The SEC says custodians cannot support every token, that new assets may have no custodian at all, and that state trust companies have been unsure whether they count as banks, a problem staff addressed with a September 2025 no-action letter. The release also leans on the Crypto Task Force the commission created in January 2025 and on Executive Order 14178. A safeguard that rests on the fox’s quarterly memo about the henhouse is still a safeguard, technically. The comment file will show whether it is a good one.

Its companion, Investment Adviser Performance-Based Compensation Modernization, would widen who may pay advisers a share of capital gains. It would expand the arrangement for registered funds and business development companies under conditions, and it would extend the exemption to investors who meet the Regulation D accredited investor definition. Comments are also due December 7. The SEC expects the change to let a wider range of advisers offer regulated funds and to put more strategies inside them. Whether shareholders were asking for more performance fees is a question the comment file will answer.

The Mixers Are Forgiven

Pages 63513 to 63515 hold the day’s best contrast. FinCEN withdrew its 2023 proposal to treat international crypto mixing as a class of transactions of primary money laundering concern, and it separately withdrew a 2020 proposal on transactions involving unhosted wallets. The mixing rule would have required covered financial institutions to report mixing transactions, with customer identity details attached. The wallet proposal would have required reports and identity verification above $10,000, and recordkeeping above $3,000, when a counterparty used an unhosted or otherwise covered wallet.

The stated reasons come in two registers. On mixers, FinCEN cites commenters’ concern that the definition was broad enough to chill legitimate activity and burden institutions, and it points to a July 2025 report from the President’s Working Group on Digital Asset Markets, which said the administration supports lawful users transacting privately on public blockchains. In the same notice the agency concedes that illicit actors still use mixers to hinder investigations and says it will keep monitoring. On wallets, the explanation is that withdrawal is part of making digital asset rules fit for purpose, and FinCEN will take no further action. Deputy Director Jimmy L. Kirby signed both.

Set that beside the SEC’s custody proposal and the day has a theme. The government is making room for crypto to be held, and moved, with fewer questions put to the people doing the moving. Each agency has reasons, and some of them are good. But the same Tuesday that loosens one reporting net shows the Treasury Department weaving another, which brings us to the third item.

A Tip Line With a Privacy Shield

Treasury’s final rule on Privacy Act exemptions concerns a new system of records, Treasury .032, for Federal Program Waste, Fraud, and Abuse Tip Intake and Referral Records. The system will take in tips from the public, agencies, contractors and grant recipients about suspected fraud, improper payments and misuse of federal funds, then triage them and refer them to other agencies and inspectors general. Treasury exempts the system from certain Privacy Act provisions under the law enforcement investigatory material provision, effective November 5, and cites Executive Orders 14249 and 14395 as the policy backing.

Treasury received two comments on its June proposal. One called the exemptions overly broad and raised transparency and oversight concerns. The other supported protecting genuine investigatory material but urged Treasury to narrow the exemption and preserve protections for records that are not law enforcement related. Treasury kept the exemptions, and says they do not reach every record merely because it sits in the system. That is a fair limit on paper. In practice a tip line is where a neighbor’s grudge and a real fraud look identical at intake, which is exactly the stage at which access and correction rights matter most.

Three other privacy filings ran the same morning, and they are mostly housekeeping. The Nuclear Regulatory Commission republished 13 systems of records notices after a comprehensive review, with four (NRC 27, 36, 39 and 40) substantively revised and comments due November 5. The National Archives is revising NARA 44, its reasonable accommodation records, to cover pregnancy and childbirth requests under the Pregnant Workers Fairness Act and to move some processing into a web based application. The FDIC rescinded two applicant recruiting systems because an Office of Personnel Management government-wide notice already covers them.

The Rest of the Docket

The 120-page Transparency in Coverage final rule, a joint product of the IRS, the Labor Department’s benefits arm and CMS, takes effect December 7. Citing Executive Order 14221, it adds contextual files and data elements such as product type and network name to the machine-readable pricing files, changes the level at which data is aggregated, lengthens the reporting period and lowers the claims threshold for out-of-network historical data, trims reporting frequency, and requires pricing information to be available by phone.

The FDA opened a request for information on ibogaine trial design, covering dose escalation, care setting, safety monitoring and stopping rules, and noted that HHS is funding development and that the first federally supported trials are expected to enroll adults with opioid use disorder and adults with PTSD. Comments are due November 20. The agency also issued device rules classifying a hyperoxia monitor used with pulse oximetry, a focused ultrasound system for non-thermal tissue ablation and a high throughput DNA sequencing test for hereditary cancer predisposition, plus an exemption for certain clinical toxicology test systems.

The remainder includes NHTSA and NTIA eliminating obsolete 911 grant program regulations, a NHTSA request for information on prehospital blood transfusion, HUD‘s 2027 designation of Difficult Development Areas and Qualified Census Tracts, the SEC’s acknowledgment of ICE Futures U.S. filing Form 1-N under Section 6(g) to register as a national securities exchange, a NOAA final rule under Amendment 62 raising Gulf of America red grouper catch limits, effective October 2, an EPA Notice of Availability seeking comment on initial air quality designations under the 2024 revised annual PM2.5 standard, which tightened the annual limit to 9.0 micrograms per cubic meter and carries a 30-day public comment period, and 15 pages of OFAC sanctions actions. The issue carried no presidential documents and no executive orders.
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Washington Launches an Andes-Atlantic Corridor. The Bigger Story Is What Will Move Through It

The State Department announced a new economic corridor with Argentina this week, complete with railways, pipelines, ports, power lines, digital infrastructure and potentially billions of dollars in U.S.-backed financing.

But the most interesting thing about the Andes-Atlantic Corridor may not be the infrastructure.

It is what Washington wants moving through it.

The United States and Argentina formally launched the Andes-Atlantic Corridor on September 23, describing it as an effort to connect Argentina’s mineral-rich northwest and the Vaca Muerta energy basin with Atlantic ports and Western markets.

According to the State Department, the corridor is intended to strengthen supply chains for lithium, copper, oil and natural gas while opening infrastructure projects to American companies.

It is also the first corridor in the Western Hemisphere under the G7’s Partnership for Global Infrastructure and Investment.

That makes the announcement considerably more than a transportation project.

The corridor connects two things Washington increasingly considers strategic: infrastructure and critical minerals.

Argentina sits inside the so-called Lithium Triangle and possesses major lithium and copper resources. Earlier this year, the United States and Argentina signed a bilateral Framework for Securing of Supply in the Mining and Processing of Critical Minerals. The new corridor is explicitly designed to support projects developed under that agreement.

Then there is Vaca Muerta, Argentina’s enormous shale formation.

The State Department says the corridor will support expanded development and export of those resources through pipelines, rail, ports and energy infrastructure.

And Washington has brought its checkbook. Sort of.

The State Department says the Export-Import Bank of the United States and Argentina have signed a “Build the Future” framework capable of providing up to $7 billion in financing by 2027 for infrastructure and productive-capacity projects.

That should not be confused with $7 billion already spent, appropriated or even committed to individual corridor projects.

The largest identified financing proposal illustrates the distinction.

EXIM has issued a non-binding indicative term sheet for as much as $6 billion for Argentina LNG, a proposed $51 billion project involving Argentina’s YPF, Italy’s Eni and the United Arab Emirates’ XRG. The project would turn Vaca Muerta gas into liquefied natural gas for export.

The financing would support purchases of American goods and services. State says American company Pumpco, a MasTec subsidiary, working with Bonatti and Contreras Hnos., has already received an engineering, procurement and construction contract worth more than $1 billion for the project’s export pipeline system, although that contract remains subject to a final investment decision.

In other words, the corridor may have been formally launched this week, but the machinery underneath it was already moving.

Argentina opened international tenders in August for 50-year concessions covering the Belgrano, San Martín and Urquiza freight rail systems. Together, the networks include roughly 7,594 kilometers of track across 16 provinces and connect major production regions with ports and international crossings.

Argentina’s own government says decades of deterioration, inadequate maintenance and insufficient investment helped create the need for private capital.

Those railways now appear on Washington’s corridor map.

So does the Hidrovía waterway. So do proposed connections between Vaca Muerta and Atlantic ports. So do electricity projects and a planned modernization of Argentina’s ARSAT fiber-optic network.

The corridor, therefore, looks less like a single new construction project and more like an umbrella placed over a collection of existing and proposed infrastructure projects, with U.S. financing agencies and American companies being encouraged to participate.

And the strategy itself predates the launch.

In February, Under Secretary of State for Economic Affairs Jacob Helberg told the House Foreign Affairs Committee that he had directed his office to conduct a strategic review of logistical corridors with previous State Department involvement. He specifically named the Andes-Atlantic Corridor alongside the Lobito Corridor in Africa and the Luzon Corridor in the Philippines.

Seven months later, the corridor has officially arrived.

The federal cast is substantial.

State says the U.S. International Development Finance Corporation, EXIM and the U.S. Trade and Development Agency can provide financing, development assistance and technical support. The Departments of State, Commerce and Treasury are also expected to provide commercial expertise.

A delegation from State, DFC and EXIM is scheduled to travel to Buenos Aires, Jujuy and Salta in October to identify and advance potential transactions. Deputy Secretary of State Christopher Landau is expected to follow later in the month to promote corridor investments.

That makes the next phase worth watching carefully.

The announcement contains some very large numbers, but much of the financing remains prospective. “Up to $7 billion” is not the same thing as $7 billion obligated, and a non-binding $6 billion EXIM term sheet is not a closed loan.

What Washington has established is the framework through which those deals could happen.

And the objective is unusually clear.

The Andes-Atlantic Corridor is designed to connect Argentine lithium, copper, oil and natural gas with Western markets while giving American companies opportunities to build and finance the infrastructure required to get those resources there.

The railroad tracks may be in Argentina.

The supply-chain strategy runs straight through Washington.

Sources: U.S. Department of State, Andes-Atlantic Corridor Fact Sheet (September 23, 2026); Export-Import Bank of the United States, Build the Future Framework Announcement.
A Missile Shield for All Americans, Subject to Classification

The Scorekeeper Was the Last to Know

The Congressional Budget Office put a price on a national missile defense system on May 12. A system matching the January 2025 Iron Dome for America executive order, CBO found, would cost about $1.2 trillion to develop, deploy and operate for twenty years, a figure laid out in its report and repeated in testimony to the Senate on September 29.

Anyone who has met the federal government can guess what happened next. Nothing. David Mosher, who directs CBO’s National Security Division, told the Senate Armed Services strategic forces subcommittee at the hearing that the Golden Dome program office gave the agency its first briefing on September 25, four months after the estimate appeared, according to the Center Square.

CBO told the same outlet it had received no information from the program office before publishing. Guetlein told the same hearing that the program remains on track to deliver an initial operational capability by the summer of 2028 — a statement confirmed in the hearing record — a timeline he has stated publicly since December 2025, according to Federal News Network and National Defense Magazine, and confirmed at the April 2026 subcommittee hearing.

In the interval, Gen. Michael Guetlein, who runs the program, wrote a Washington Post opinion piece dated September 24 calling estimates approaching $1.2 trillion sensational and accusing their authors of imagining a hypothetical system built on legacy technology and outdated cost models. His office, he added, had briefed congressional committees dozens of times. CBO, as it happens, is not a congressional committee.

There is a name for faulting a forecast’s assumptions while the real ones stay classified, and it is not peer review.

Senator Deb Fischer‘s office, for its part, said she is glad the two sides can now work toward a more accurate estimate. One hopes to hear such sentiments in month one rather than month five.

Two Numbers, Two Universes

The Pentagon’s number is $185 billion, which a program office official described as covering the objective architecture through 2035. CBO’s is $1.2 trillion over twenty years. The same official told the Center Square the office would need more time to say what the $185 billion does and does not include, a remarkable thing to say about a figure one has been defending in public.

CBO’s testimony offers two readings of the gap. Either the real architecture is far narrower than the executive order describes, or the money is parked in other accounts, such as the services’ missile procurement lines. Or both.

The engine of the gap is the space layer. CBO prices the space-based interceptors at $743 billion, about 60 percent of the total, for 7,800 satellites sized to engage a raid of ten intercontinental ballistic missiles launched nearly at once. Atmospheric drag at those altitudes limits each satellite to roughly five years, so CBO says about 30,000 would be needed over twenty years to keep 7,800 aloft.

Strip the layer out and the bill falls to $448 billion, though CBO notes the result would no longer match an executive order that asks for space-based interceptors by name.

Here is an inference, and it should be labeled as one. It rests on CBO’s cost table and on the Pentagon’s own inability, so far, to define the scope of its figure.

A $185 billion program through 2035 cannot contain a $743 billion constellation, so either the Pentagon’s space layer is far smaller than CBO’s or the cost is booked somewhere other than the Golden Dome fund. The reasoning is arithmetic, with one caveat: CBO spreads replacement purchases across twenty years, so the two numbers are not strictly comparable, and CBO itself says a direct comparison is difficult without more detail from the Department of Defense.

Cleveland, Sioux Falls, and the Word Everyone

The Pentagon’s position, relayed by an official who would not be named, is that the system protects all Americans, including those in Guam, Alaska and Hawaii. The official would not say which areas it defends, or whether it relies on U.S. Northern Command‘s defended asset list, citing operational security. Nor did the official address testimony at the hearing that not every American can be protected.

That testimony came from David Trachtenberg, a former deputy under secretary of defense for policy, who told Senator Angus King he was not saying every citizen can be protected and expected the system to be deployed in phases. King had already observed that the name Golden Dome implies national coverage, and he asked the obvious follow-up.

He put it to the panel this way, “Is it going to protect Cleveland but not Sioux Falls?” Choices were coming, King said, and they had to be made public.

CBO’s notional design offers a hint of the geometry. Its 35 regional sectors each cover roughly 1/37 of the country, which CBO says would protect most of the U.S. population, and the agency says plainly that the system “would not be an impenetrable shield” and could be overwhelmed by a full-scale attack from Russia or China.

CBO told the Center Square it did not estimate what share of the population or land area would be covered. Most is doing a great deal of work in that sentence, and the remainder presumably lives somewhere.

The case for secrecy is not frivolous. Fischer’s office says the specifics are classified, and Tom Karako of the Center for Strategic and International Studies has argued that defended asset lists and similar operational details should remain closely held. But it is one thing to keep a radar’s performance secret and another to keep secret which American towns sit under the umbrella.

The first protects the system. The second protects the program from the question.

A Dome With No Budget Under It

All of this assumes the thing gets paid for. Congress gave Golden Dome about $25 billion in the 2025 reconciliation law, and Guetlein said in August that roughly 90 percent had been obligated, according to Air and Space Forces Magazine.

For fiscal 2027 the Pentagon asked for about $17 billion inside a proposed $350 billion reconciliation package and a mere $400 million in the ordinary base budget. The same report finds little political will for another reconciliation bill.

The new fiscal year opened October 1 under a continuing resolution, and because Golden Dome has no fiscal 2026 appropriation, a stopgap has no baseline to hold it level against. Guetlein warned in August that without funding in fiscal 2027, “there is no Golden Dome because there is no funding.”

Senators of both parties noticed. Mike Rounds said reconciliation should not have been necessary to get the program started. King called it very bothersome that the Pentagon and the White House went around the normal appropriations process for one of the most expensive initiatives of the government.

Fischer pointed out that the layered architecture traces to her own committee’s language in the fiscal 2024 defense authorization, which means the program’s parentage is not in dispute even if its price is. Karako told the panel that Golden Dome and the broader munitions effort will stand or fall on 2027 funding.

So the ledger reads as follows: A shield for everyone, with a list of protected places nobody will read aloud, priced at either $185 billion or $1.2 trillion depending on whom one asks and what one counts, funded by a reconciliation bill that has not passed and a continuing resolution that cannot carry it.

CBO is careful to note that engaging a missile is not the same as defeating it. Someone at the Pentagon might extend the same care to distinguishing a program from a slogan.
A Grandmother Who Is Not a Tribal Member Can Cost You Your Water Line

There is a category of person, according to the federal government, whose existence complicates plumbing. That person is a spouse, a grandparent, or another relative living in a tribal community who happens not to be an enrolled tribal member.

Under Indian Health Service policy, a home occupied by such a person can be legally invisible to the agency whose entire mission, per the Indian Sanitation Facilities Act, is to build water and wastewater infrastructure for Indian homes, communities, and lands.

The Government Accountability Office documented this in a new report on tribal water infrastructure, and the arrangement is exactly as absurd as it sounds when you say it out loud (Government Accountability Office, GAO-26-107178).

The Household IHS Cannot See

IHS interprets its own statutory authority narrowly. A home is eligible for funding if it belongs to a tribal member or the tribe itself. A home is not eligible if it belongs to, say, a non-member spouse or a non-member grandparent, even though tribal members and their children live there every day.

GAO heard repeatedly from tribal and tribal health consortium officials that these mixed and multigenerational households are common, not rare, in tribal communities.

One tribal water utility official put it about as plainly as an interview subject can put anything to a federal auditor, saying that every single water infrastructure project their tribe had sought or received IHS funding for included at least one ineligible home where tribal members actually lived.

Every single one.

Add to that the leasing wrinkle. A tribal member renting a home from their own tribe, or from another tribal member, can also fall outside IHS’s eligible category if fewer than five years remain on the lease at the time engineers are designing the project.

That means a teacher living in tribally owned housing, or a tribal member on a short-term lease from a relative, can be sitting inside a project area that IHS is actively funding while remaining, on paper, someone IHS is not funding.

IHS itself does not even track how often this happens; the agency does not collect data on the number of tribal members living in homes its own rules classify as ineligible.

It knows the loophole exists. It has simply never counted through it.

Eighty Hours for Eight Thousand Dollars

Here is where the definitional problem stops being abstract and starts costing real staff time. When a home falls outside IHS eligibility, somebody still has to pay for the water hookup, and that somebody is usually the tribe, scrambling for outside money while an IHS field engineer walks them through it.

GAO’s example is almost too clean to be real. Officials from one IHS area office reported spending more than 80 hours helping a single tribe apply for and manage an outside grant worth $8,000.

After the tribe received the money, the same officials spent additional hours helping it report on how the grant was spent, on top of the original 80. An agency employee’s time is not free. The officials themselves told GAO that once outside funds are transferred to IHS, managing and overseeing them imposes a significant expense on the agency, expense that dwarfs, in staff hours, the size of the grant it produced.

Run the arithmetic and it gets worse before it gets better. Eighty-plus hours of a federal engineer’s time, spent to unlock $8,000 for a home the agency’s own charter arguably should have covered in the first place, is not an isolated inefficiency. It is what happens, systematically, every time IHS’s definition excludes a home that a tribal member actually lives in.

Multiply that by however many mixed households and short leases exist across Indian Country, a number IHS admits it does not track, and you get a hidden administrative tax charged entirely in engineer hours, paid for the privilege of routing around a definition the agency wrote for itself.

A Fix That Fits on One Page

GAO’s response to this is not a demand for a wholesale rewrite of federal Indian law. It is a request that Congress define, in the statute itself, exactly what “Indian homes, communities, and lands” means, so IHS stops having to guess at the boundaries of its own mandate case by case.

Absent that, GAO recommends IHS update its own policy to reflect any new statutory definition once one exists, in consultation with tribes.

This is not a controversial ask. It is closer to basic housekeeping, the kind of clarifying language that should have existed since the Indian Sanitation Facilities Act was written, rather than something an outside audit has to surface decades later as a formal recommendation.

What makes the current arrangement particularly galling is that IHS is not accused of malice here, or even of especially poor judgment. The agency is applying a plausible reading of an old statute that never anticipated, or never bothered to specify, how it should treat a reservation home where a grandmother happens to hold a state, rather than tribal, enrollment card.

The absence of a definition did the damage. Everything downstream (the excluded homes, the outside grant hunts, the 80 hours for $8,000) follows directly from Congress never having bothered to spell out a term that shows up in the law’s own name.

Who Actually Pays For the Gap

The people who pay for this gap are not, in the end, IHS engineers, whose hours are at least salaried and accounted for somewhere in a federal budget. The people who pay are tribal families living in homes that fall on the wrong side of a definition nobody wrote down clearly, families who may wait longer for a water connection because their household includes a relative who checked the wrong box on a tribal enrollment form decades ago, or none at all.

GAO’s report does not put a number on how many households currently sit in this limbo, because, again, nobody is counting. That absence of a number is itself the finding. An agency whose entire job is connecting homes to water cannot say how many homes its own eligibility rule disconnects.

Congress created this problem by leaving three words undefined in the 1959 Indian Sanitation Facilities Act and letting an agency’s legal interpretation harden around the gap for six and a half decades.

Fixing it requires nothing more dramatic than actually finishing the sentence.
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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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Coast Guard Disabled Faulty Fire Systems on Cutters, Leaving Crews Facing Greater Risk

DHS inspectors found a known fire-suppression defect, more than 9,000 delayed maintenance items and a fleet falling well below readiness requirements even as the Coast Guard continues buying new Fast Response Cutters.

A fire in the engine room of a Coast Guard Fast Response Cutter is precisely the kind of emergency for which an automatic fire-suppression system exists.

On some of those cutters, however, the automatic feature has been deliberately disabled.

After repeated malfunctions caused firefighting agent to discharge unexpectedly and shut down cutter engines, the Coast Guard’s solution was to disconnect components of the system and secure a discharge pin with a zip tie. The workaround stopped the accidental activations, but it created another problem: in an engine-room fire, a Coast Guardsman may have to travel to the back of the vessel, descend through a hatch and manually activate the suppression system.

The Department of Homeland Security Office of Inspector General says those additional steps would delay the release of firefighting agent and increase the danger to the crew. Its conclusion is unusually direct for a federal audit: failure to resolve the problem “could also lead to injury or death.”

The finding is part of a broader September 28 audit of the Coast Guard’s Sentinel-class Fast Response Cutter fleet, a growing force of 154-foot patrol vessels used for missions ranging from search and rescue and drug interdiction to maritime security and defense readiness. The auditors found a fleet struggling with maintenance backlogs, escalating funding shortfalls and operational availability far below Coast Guard requirements.

The fire-suppression problem, however, provides perhaps the clearest example of what those readiness problems mean for the people aboard the cutters.

And the problem has been known for years.

A Fire System That Could Shut Down the Ship

According to DHS OIG, Fast Response Cutters experienced at least 22 random discharges of firefighting agent into their engine rooms between 2017 and 2023.

The consequences were more substantial than an inconvenient false alarm.

Activation of the suppression system shuts off engine-room ventilation, closes fuel valves and turns off the engines. Whether the system activates because of an actual fire or a malfunction, the cutter loses propulsion and cannot restart its engines until faults in the suppression system are cleared.

The Coast Guard traced the failures to environmental degradation caused by moisture accumulating in a remote station box. The suppression system had complied with applicable requirements when the cutters were constructed, according to the audit, but responsibility for maintaining and replacing the equipment subsequently passed to the Coast Guard during the vessels’ sustainment phase.

By April 2023, the Coast Guard had issued an engineering advisory addressing the recurring problem.

Its interim solution was decidedly low-tech.

Crews were directed to disconnect electrodes associated with the automatic suppression system and secure the discharge pin with a zip tie to prevent another accidental release. OIG inspectors photographed the arrangement aboard the Fast Response Cutter Paul Clark. The report includes images of both the zip-tied pin and disconnected electrodes.

The modification worked in one important respect. OIG said it prevented additional random discharges.

But disabling the electrodes also disabled the suppression controls in the pilothouse.

That means a crew confronting an actual engine fire cannot simply activate the affected system from the vessel’s control station. Instead, according to OIG, a Coast Guardsman would have to move aft and climb down a hatch to manually discharge the firefighting agent.

“These extra steps would delay immediate release of the firefighting agent,” the auditors concluded.

The Coast Guard estimated that resolving the problem across the fleet would cost approximately $40 million. Yet as of fiscal 2025, according to OIG, replacement of the suppression system had not been included in the Coast Guard’s formal budget request. Officials told auditors that the project would, at best, receive a Tier II designation, which carried a low probability of funding.

The Coast Guard has since begun moving toward a permanent solution, but that solution will not arrive quickly.

Newer cutters are already being delivered with changes. According to the Coast Guard’s response to OIG, FRC #59, delivered in March 2025, and subsequent cutters receive different fire-alarm panels and upgrades to their fire-suppression systems. The service is also retrofitting a previously delivered cutter with the new system.

For the older fleet, however, the Coast Guard estimates completing the retrofit will take at least three years, citing the number of vessels involved, the extent of the required work and availability of funding.

There is still no estimated completion date.

OIG consequently left the recommendation open and unresolved.

A Safety Problem Inside a Maintenance Problem

The fire system is only one part of a much larger readiness problem documented by the auditors.

Fast Response Cutters are supposed to maintain at least 85 percent operational availability. OIG analyzed 52 domestic FRCs from October 2022 through June 2025 and found they collectively managed just 72 percent.

Nearly one-third of the fleet, in other words, was not fully mission-capable at any given time.

The results were particularly poor in fiscal 2024. Only 13 of the 52 cutters met the minimum availability requirement, and none of the eight Coast Guard districts operating FRCs met the service’s overall requirement.

Those numbers have operational consequences.

Auditors attempted to determine which missions the Coast Guard had been unable to perform because cutters were unavailable. They couldn’t.

The Coast Guard does not maintain that data.

OIG did identify at least one revealing example. A Fast Response Cutter conducting an interdiction in the Southeast District broke down during pursuit of a vessel suspected of carrying drugs and/or migrants.

The suspected vessel escaped.

The maintenance backlog behind those failures is substantial.

Coast Guard cutter-fleet funding shortfalls grew from $219 million in fiscal 2022 to $486 million in fiscal 2025, according to internal memoranda reviewed by OIG. To manage those shortages, required maintenance was postponed.

By June 17, 2025, crews had reported more than 9,000 FRC maintenance requests that were overdue or had received extensions from Coast Guard headquarters. One of them involved the cutter that subsequently broke down during the interdiction.

Delaying the work did not necessarily save money.

OIG found that postponing dockside maintenance until cutters entered scheduled dry dock could stretch a roughly 90-day maintenance period to 120 days. An additional 30 days in dry dock costs an average of approximately $160,000 per cutter. Across roughly 50 cutters over a four-year maintenance cycle, OIG estimated the practice could add about $8 million in costs while simultaneously keeping the vessels away from their homeports longer.

There is an accounting problem buried beneath the maintenance problem as well.

Despite evidence that operational and support expenses were rising, the FRC program reduced its projected life-cycle costs from $9.9 billion in 2021 to $9.2 billion in 2023. OIG concluded that the lower projection conflicted with actual cost increases and failed to account adequately for technical systems and deferred maintenance.

In its response to the audit, the Coast Guard effectively acknowledged part of that problem. It told OIG that deferred maintenance had artificially lowered the actual costs used to develop its cost estimates and said those costs were being incorporated into a revised life-cycle estimate.

That is an important distinction. Deferring maintenance can make today’s books look better by moving an expense into tomorrow’s inbox. Unfortunately, the cutter still knows the maintenance wasn’t performed.

This Problem Predates the Latest Audit

The new OIG findings also fit a longer pattern.

The Government Accountability Office reported in earlier examinations of Coast Guard cutter maintenance that deferred work and equipment failures were already reducing cutter availability.

More recently, GAO documented a Fast Response Cutter whose shaft-seal maintenance was postponed. The seal eventually failed, leaving the cutter unable to operate for four months. Coast Guard district officials told GAO that losing the vessel increased pressure on the remaining cutters, which then had to absorb its missions.

That sequence is strikingly similar to the problem OIG now describes at fleet scale: defer maintenance because resources are constrained, suffer equipment failures later, lose operational availability, and place additional demands on the cutters that remain available.

The latest audit puts numbers around the accumulated result.

A 72 percent availability rate. More than 9,000 overdue or extended maintenance items. A $486 million cutter-fleet funding shortfall.

And a fire-suppression problem serious enough that the Coast Guard disabled part of the system to prevent it from unexpectedly shutting down the vessel.

Meanwhile, the Fleet Keeps Growing

None of this has stopped expansion of the Fast Response Cutter program.

In September 2025, the Coast Guard exercised a $507 million contract option with Bollinger Shipyards for 10 additional FRCs, increasing the number ordered under the contract from 67 to 77. Congress provided $1 billion for additional Fast Response Cutters as part of nearly $25 billion in Coast Guard funding contained in the One Big Beautiful Bill Act.

The first cutter financed through that option is expected in fiscal 2028.

Expansion has continued in the meantime. The Coast Guard accepted its 63rd Fast Response Cutter, the Jeffrey Palazzo, in June 2026.

There is nothing inherently contradictory about replacing or upgrading equipment while expanding a fleet. New vessels can incorporate corrections that older hulls lack, and the Coast Guard says precisely that is happening with the fire-suppression system.

But the juxtaposition is difficult to ignore.

The Coast Guard is expanding a cutter fleet whose existing vessels have accumulated thousands of delayed maintenance requirements, while its own inspector general says nearly one-third of the domestic fleet was not fully mission-capable at any given time during the period examined.

And the older cutters will not instantly inherit the improvements installed aboard their newer siblings.

More Money, But OIG Wants a Plan

The Coast Guard concurred with all three recommendations in the report.

For maintenance, the service pointed to increased funding in its fiscal 2025 budget reconciliation, fiscal 2026 appropriation and fiscal 2027 budget proposal. According to its response, those increases include approximately $20 million in fiscal 2026 and another $30 million in fiscal 2027 for surface depot maintenance, with the Coast Guard addressing FRC work including five dry docks, five docksides and nine annual inspections.

The Coast Guard asked OIG to consider the recommendation resolved and closed.

OIG declined.

Additional funding, the auditors said, did not constitute a plan explaining how the money would eliminate the FRC maintenance backlog. The recommendation will remain open until the Coast Guard produces documentation showing it has developed and implemented such a plan.

The same unresolved designation applies to the fire-suppression system.

The Coast Guard says the fleet-wide retrofit will take at least three years. Its completion date remains “to be determined.”

That leaves the service in an uncomfortable position.

It is simultaneously buying the next generation of Fast Response Cutters, attempting to catch up on maintenance for the existing generation, and trying to retrofit a known safety defect aboard older vessels while those vessels remain responsible for some of the Coast Guard’s most consequential missions.

Those missions include drug interdiction, migrant interdiction, search and rescue, maritime security and national defense.

The cutters are called Fast Response Cutters for a reason.

The question raised by the inspector general’s report is increasingly whether enough of them can respond when they’re needed, and what risks their crews are being asked to accept when they do.
Fediverse reactions
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.
Fediverse reactions
A Public Hearing Got Stayed for a Year While Nobody Could Agree Who Was Allowed to Ask the Question

In October 2022, the President asked two federal agencies a fairly simple question. Should marijuana still sit in Schedule I, the category reserved for heroin and LSD, alongside a legal finding that it has no currently accepted medical use in the United States. Four years later, the honest answer is that nobody in the federal government has fully answered it, and the paper trail explaining why, laid out in detail in a new GAO report on drug scheduling, reads less like science than like a jurisdictional turf fight that occasionally paused for actual medicine.

HHS Answers a Question DEA Did Not Think It Was Allowed to Ask

By August 2023, HHS had its answer. Applying a new two part test it had adopted that same year for judging whether a drug has a currently accepted medical use, HHS concluded marijuana met the standard and recommended DEA move it to Schedule III. The trouble was that DEA had spent decades applying a stricter, older five part test for the same question, one that generally required something close to FDA approval.

HHS’s new test did not require that. It asked instead whether there was widespread current medical use recognized by licensed practitioners operating in state authorized programs, plus some credible scientific support for at least one such use, a bar dozens of state medical marijuana programs could plausibly clear even without a single FDA approved cannabis product.

This is not a scientific disagreement so much as a disagreement over who gets to decide what counts as a medical use in the first place. DEA’s traditional test, in place since 1992, effectively let the agency treat state legalization as legally irrelevant, since it generally required something close to FDA approval before any substance without one could be called medically accepted. HHS’s new test, adopted in 2023, built state level medical practice directly into the federal legal standard instead.

Whichever test wins determines the schedule, and the schedule determines the criminal exposure. GAO’s report is careful to note that FDA officials insist the two tests coexist rather than replace one another, that FDA approval remains, in their words, the most straightforward path to establishing accepted medical use. Straightforward is doing a great deal of work in that sentence for a process that has just taken four years and counting to sort out a single substance.

The Justice Department Settles a Fight Between Two Other Agencies

In April 2024, the Department of Justice’s Office of Legal Counsel weighed in and sided with HHS. DEA’s traditional approach to currently accepted medical use, the opinion found, was an impermissibly narrow reading of the Controlled Substances Act. Satisfying HHS’s new two part test was sufficient on its own, the opinion held, regardless of FDA approval or DEA’s own five part framework.

The opinion also concluded DEA could satisfy the country’s obligations under the Single Convention on Narcotic Drugs by placing marijuana in Schedule III while layering additional restrictions on top through its own regulatory authority, closing off DEA’s other plausible argument for keeping marijuana more tightly controlled.

DEA published a notice of proposed rulemaking the following month to reschedule marijuana to Schedule III, then a notice of hearing that August. In January 2025, the presiding administrative law judge stayed the entire hearing pending an interlocutory appeal to the DEA Administrator, meaning the agency that had just lost the legal argument at the Justice Department got to pause the hearing on its own initiative while it sorted out internal procedural objections.

The rulemaking sat that way for nearly a year.

An Executive Order Breaks the Stall, Then Splits the Difference

In December 2025, the President issued an executive order directing the Attorney General to take all necessary steps to finish the rulemaking. Four months later, the Acting Attorney General moved, but not by finishing what DEA had proposed in 2024. Instead, in April 2026, the Acting Attorney General issued a final rule immediately placing FDA approved marijuana products and marijuana used under a state medical license into Schedule III, using the narrower authority to reschedule drugs for treaty compliance rather than the broader rulemaking DEA had been sitting on for two years.

In the same order, the Acting Attorney General withdrew the stalled 2024 hearing notice and issued a fresh one covering the original, wider question of rescheduling all marijuana, with the actual hearing to run from late June through mid July of this year.

So as of this writing, a portion of marijuana has been in Schedule III since April, reached through the narrowest available legal doorway, while the broader question that started this entire four year process, whether marijuana generally belongs in Schedule III, sat through a new round of hearings that only just concluded.

Two federal agencies agreed on the underlying science within a year of being asked. It then took a Justice Department opinion, a stayed hearing, a change in test, an executive order, and a second hearing notice to produce a result that only partially answers the question the President posed in 2022, using an authority nobody had originally proposed using for the purpose.

What the Timeline Actually Measures

None of the four years this took were spent gathering new pharmacological data. HHS finished its scientific evaluation within roughly a year of being asked, well inside the range GAO’s broader report found typical for far more obscure substances. Every subsequent delay was procedural, a fight over which test applies, which agency’s reading of the statute controls, whether a hearing already scheduled could be paused by the same agency contesting the outcome, and eventually whether the President’s own order was enough to force a decision at all.

The Controlled Substances Act was written to sort chemicals by their pharmacology. What this timeline actually documents is how much of that sorting, at least for the one substance most Americans have an opinion about, ends up decided by agencies arguing over their own jurisdiction rather than by anything found in a laboratory.

Sources: U.S. Government Accountability Office, Drug Scheduling: DEA and FDA Should Strengthen Policies and Procedures for Scheduling Controlled Substances (GAO-26-108623, September 2026); DEA Notice of Proposed Rulemaking, Rescheduling of Marijuana (Federal Register, May 21, 2024); DOJ Office of Legal Counsel opinion on HHS marijuana scheduling recommendation (August 2024). Related: The Word That Decides Every Drug Sentence in America Was Never Actually Defined and The Two Year Emergency Order That Needed Seven Years and an Act of Congress to End.
The $21 Billion Contract That Was Worth $74 Million

Somewhere in the Department of Veterans Affairs, a dashboard once displayed a number so large it should have triggered an alarm rather than a press release. A single contract action, the VA told Congress in May 2025, had a value north of $21 billion.

The actual figure, according to the VA Office of Inspector General, was just over $74 million. That is not a rounding error. That is a factor of roughly 284, the kind of gap you get when nobody checks the math before it goes to the Hill.

The OIG’s new review of “contracts terminated for convenience” was requested by Senators Richard Blumenthal and Angus King, who wanted to know what happened when the Department of Government Efficiency, VA senior advisers, and the General Services Administration went hunting through VA’s contract portfolio in early 2025.

The answer, once you strip away the chest-thumping, is that VA terminated 435 contracts worth about $1.1 billion, out of 2,210 contract actions the OIG reviewed. Everything else on the lists VA sent to Congress was either reinstated, never terminated at all, or simply wrong.

Efficiency, Measured in Wheelchair Ramps

The most instructive failure here is not the math. It is what got swept into the “terminated” pile in the first place. VA’s July 2025 submission to Congress claimed 1,667 contracts had been terminated or were being terminated. The OIG found the real number was 366, and 17 of those were later reinstated.

The other roughly 1,300 actions on that list had nothing to do with termination; they were supply contracts that had simply run their course, including orders for prosthetics, surgical implants, and wheelchair ramps, plus more than 150 healthcare contract actions such as nursing home service orders.

A Category Management Support Office official told the OIG that DOGE representatives “wanted to claim credit for any contracts that ended,” whether or not the government actually ended them. That is a remarkable sentence to find in a federal audit. It means the savings narrative being fed to Congress was padded with equipment orders for amputee veterans that had simply finished delivering, filed under the same banner as genuine cost-cutting.

The distinction between “we canceled this” and “this was already over” apparently did not matter much to whoever was compiling the list.

The Eleven-Hour Review

To be fair to VA’s rank-and-file contracting staff, the OIG’s account of how this played out reads less like malice and more like triage under fire.

From February through June 2025, OALC and VA senior advisers issued at least 47 orders demanding that contracting officials justify, terminate, pause, or reinstate contracts, on top of a running stream of follow-up emails from GSA and DOGE representatives. On February 21, 2025, officials were handed 1,049 contract actions to review, get approved by deputy under secretaries, and report back on, all within less than 11 hours.

Some offices did not finish in time. The CMSO director told the OIG that VA senior advisers and DOGE representatives ordered the terminations to proceed regardless. VA had built a questionnaire asking whether each contract provided direct veteran care, required specialized skills VA could not hire for, or was merely administrative support like scheduling; the tool existed, the deadlines simply did not leave room to use it properly.

Officials, VHA staff among them, told the OIG that instructions arrived from OALC, VA senior advisers, and DOGE representatives simultaneously, on inconsistently formatted lists that sometimes duplicated the same contract action twice. VA did not build a database to track the churn until April 2025, months after the worst of the chaos had already passed.

Nobody Spoke Federal Acquisition

The OIG’s explanation for the inflated dollar figures is almost charming in its bluntness. The officials assembling the lists sent to Congress “were unfamiliar with contracting and acquisition terminology.” VA had built a tracking dashboard to monitor the terminations, and that dashboard miscalculated contract values, apparently without anyone downstream noticing that a single contract does not typically run twenty times the annual budget of a mid-sized federal agency.

This is the recurring shape of the DOGE-era efficiency push across the government; fast, politically driven demands for numbers, staffed by people with strong opinions about waste and thin knowledge of how contracts actually work, producing figures that collapse the moment an inspector general opens the file.

VA’s own contracting officers, notably, come out of this review relatively well; the OIG found they generally complied with Federal Acquisition Regulation requirements even while being ordered around by people who did not know what a settlement cost was.

Of the 267 terminated contracts that reached a settlement agreement, 150 cost the government nothing at all, and the remaining 117 cost about $10.6 million combined, a figure that would have looked almost quaint next to the phantom $21 billion the dashboard once reported.

The Cleanup, Eventually

VA has since sent Congress a corrected list, submitted April 13, 2026, after the OIG briefed OALC officials in January. The OIG did not audit that list’s accuracy. It also declined to make any recommendations, since VA’s own procurement leadership simply concurred with the draft report and offered no comment, the bureaucratic equivalent of a shrug.

What remains is a case study in how “government efficiency” gets manufactured for public consumption. Real terminations, genuinely worth $1.1 billion, buried under a much larger pile of expired supply orders and inflated dashboards, sent to Congress by people who could not tell a completed prosthetics contract from a canceled one.

The veterans who needed those wheelchair ramps got them either way. The number on the press release did not.
Fediverse reactions
Federal Register Watch: October 5, 2026
Today’s Federal Register carries a presidential determination quietly retiring a flight-security measure that has applied to Lebanon since 1985, a Treasury proposal to blacklist a Russia-linked money-laundering network, a construction permit for a new nuclear reactor in Tennessee, and a Securities and Exchange Commission push to let several more professional credentials unlock accredited-investor status.
- Executive Office of the President: A presidential determination (No. 2026-25, dated September 30 and published today) revokes four earlier determinations — from 1985, 1992, 1998, and 2007 — that required special security measures for flights to and from Lebanon, stating the measures are “no longer necessary to ensure the security of aircraft operating to or from Lebanon against unlawful seizure.” Presidential determinations like this one let the president make a formal, legally binding finding without going through notice-and-comment rulemaking, so the single paragraph published here is effectively the whole public record of why a security posture that has stood since the mid-1980s hijacking era is being lifted now, with no accompanying security assessment attached. Read the determination.
- Treasury Department, Financial Crimes Enforcement Network: FinCEN proposed a “special measure” finding that transactions involving offshore companies tied to the “A7 Network” are a class of transactions of “primary money laundering concern” connected to Russian illicit finance, and would bar covered U.S. financial institutions from processing certain transfers involving the network’s sub-agents. A special-measure designation is one of the most forceful tools in Treasury’s anti-money-laundering kit, because any bank that wants to keep operating in the U.S. financial system has to comply with it, so this is less a warning than an attempt to cut the network off from dollar-clearing entirely once it is finalized. Read the proposal.
- Nuclear Regulatory Commission: The NRC issued Construction Permit No. CPAR-2 to the Tennessee Valley Authority for the Clinch River Nuclear Unit 1 reactor, along with the environmental record of decision that closes out the agency’s review. A construction permit only authorizes TVA to start building the plant, since a separate operating license is still required before Clinch River can generate power, but construction permits for new reactors are rare enough that this one marks a real milestone for the current push toward advanced and small modular reactor designs. Read the notice.
- Nuclear Regulatory Commission: In the same issue, the NRC published both a final rule and an identically titled proposed rule, both called “Exemptions From Materials Licensing,” each expanding which uses and quantities of nuclear byproduct, source, and special nuclear material can be handled without a license. A final rule and a proposed rule with the same name on the same day can look like a duplicate at first glance, but this is most likely a “direct final rule” paired with a companion proposal, a standard technique for changes an agency considers uncontroversial: the final rule takes effect automatically unless someone files a significant adverse comment, in which case the agency withdraws it and finishes the job through the companion proposed rule instead. Read the final rule and the companion proposal.
- Securities and Exchange Commission: The SEC published five separate notices the same day, each weighing whether to let a different professional credential — a Chartered Financial Analyst charter, a Certified Financial Planner certification, a U.S. CPA license, the Series 79/86/87 licenses, and a new accredited-investor exam that FINRA would design — qualify someone as an “accredited investor” regardless of income or net worth. The accredited-investor label currently rests mainly on income ($200,000 a year individually, or $300,000 with a spouse) or net worth (over $1 million excluding a home) thresholds meant to presume financial sophistication, so credentialing five more paths into that status in one batch is a meaningful, if quiet, expansion of who can buy into hedge funds, private equity, and other offerings walled off from ordinary retail investors. Read one of the five notices.
- Health and Human Services Department, Administration for Children and Families: ACF proposed eliminating a batch of title IV-B child-welfare regulations, including the entire regulation that spells out “child and family services review” principles, the main framework the federal government uses to audit how well state foster-care and child-protection systems are performing, on the grounds that it offers “unenforceable recommendations” rather than binding requirements. ACF frames the change as housekeeping that clears out expired, duplicative, or already-superseded language, but removing the regulatory basis for the review framework itself is worth watching regardless of the framing, since it is the main lever the federal government has for holding state child-welfare agencies accountable. Read the proposal.
This edition was drawn from the full October 5, 2026 Federal Register: 106 documents from 44 agencies. Excluded as routine: agency information-collection and Paperwork Reduction Act notices, antidumping and countervailing duty sunset and administrative reviews, SEC self-regulatory-organization rule filings, Sunshine Act and advisory-committee meeting notices, routine FAA airworthiness directives and airspace actions, and routine disaster-loan, receivership-termination, and fisheries-quota notices.