The Ten Big US Government Failures Of The 21st Century

Taxpayers are more on guard about what the federal government spends than they have been in years, or perhaps longer, as threats of a high deficit and national debt highlight concerns about a drop in the money paid into Social Security and Medicare. Most people would rather have an adequate retirement aided by Social Security than to pay for an agency that protects the interests of investors.

Americans pay a great deal in taxes to fund the federal government. The Obama administration’s proposed 2012 budget for the FAA is $18.7 billion. The SEC’s budget will probably be more than $1.2 billion for the next fiscal year. The cost to operate the FDA will be about $2.5 billion. Oftentimes, the taxpayers’ money is not well spent. There have been many high-profile cases where agencies failed in their core missions to serve the best interests of the public.

• Read the Ten Big US Government Failures of the 21st Century

The SEC’s failure to catch Bernie Madoff years ago astounds. Regulators were warned several times that his returns were too good to be true. FEMA was late to get supplies and manpower into the Gulf Coast areas after Hurricane Katrina in 2005. The blame for that trouble went all the way up to President Bush. The head of FEMA lost his job.

It is reasonable to ask whether any agency with any budget can police its entire beat. A federal agency like the FDA has to do research on and track scores of drugs and how they are used or misused. It is bound to make a mistake now and then. The Minerals Management Service cannot check every oil rig every day. It only takes one series of mistakes to cause an explosion such as the Deepwater Horizon. Accidents cannot be prevented in all cases. That is the excuse that government agency managers make when things they oversee go wrong. Some of the excuses are reasonable.

What most Americans do not consider reasonable is when there are tremendous mistakes made by agencies which cause loss of life, injury, or loss of property on a grand scale. Air traffic controllers should not be asleep on the job. Millions of toys painted with dangerous lead should not be imported from China and sold to children. The magnitude of those mistakes is just too great.

24/7 Wall St. examined the records of many government agencies and news reports about important agency failures to fulfill their mandates. We picked ten of these, all of which happened in the last five years and created a list of the greatest agency failures during that period. As a group, they point to the reality that the federal government cannot do everything, but when one of its agencies makes a large mistake, the results can be fatal.

1. Southwest Airlines 737 Roof Rupture
> Responsible Federal Agency: National Transportation Safety Commission
> Bureaucrats Resigned/Fired: None

A Southwest Airlines flight from Phoenix to Sacramento was forced to make an emergency landing at an Air Force base after a three-foot hole opened up in the roof of the plane, causing the cabin to depressurize. Hundreds of planes were grounded and will be inspected as a result of the incident, and the initial rumors that a manufacturing error at the Boeing plant was at fault was confirmed on Monday as loose rivets were found elsewhere on the plane. It is still undetermined whether this defect is unique to the Southwest plane, or if this is a more widespread problem. The chief of the FAA, Randy Babbit, has argued that the current methods of inspection are inadequate, and wondered at one press conference – “are we looking at the right things?”  This was not the first time the roof of a Boeing 737 has ruptured – in 1988, the top of an Aloha Airlines flight ripped completely off, resulting in one flight attendant being sucked out of the plane.

2. Heparin Contamination Scandal
> Responsible Federal Agency: The Food and Drug Administration
> Bureaucrats Resigned/Fired: None

The Food and Drug Administration is charged with overseeing the quality and safety of the drugs Americans consume. It was the agency that was supposed to make sure the quality of the pharmaceuticals released on the market and those imported into the U.S. are safe, but it missed a deadly bacterial contaminant in an imported batch of the drug Heparin, resulting in the death of at least 81 people. The infected drug, which is used as an anticoagulant, came from a processing plant in China, and was manufactured poorly. Currently, several congressmen, including Texas Representative Joe Barton, are demanding the agency release documents about why it took so long to recall the tainted shipment, and as to whether the FDA misrepresented the scope of the damages.

3. Sleeping Air Traffic Controllers
> Responsible Federal Agency: The Federal Aviation Administration
> Bureaucrats Resigned/Fired: The Head of the FAA’s Air Traffic Organization

In the past few months, nine different air traffic controllers around the country have been caught sleeping or making serious mistakes as the result of fatigue, leading to public outcry and several revelations of near-catastrophes as a result of exhausted employees. While much disdain has been directed at the individual controllers who were held responsible, it is clear that these incidents are part of a larger trend of the Federal Aviation Administration failing to properly oversee one of the most crucial public jobs in the country. According to reports, the National Transportation Safety Board had been recommending reforms for years that would reduce fatigue and eliminate issues like controllers manning the towers alone in the middle of the night. The Head of the Air Traffic Organization – which is part of the FAA – resigned earlier this month, citing the scandal as his reason for leaving. It is unclear whether he was forced out or resigned willingly.

4. Epsilon Marketing Security Breach
> Responsible Federal Agency: Federal Trade Commission
> Bureaucrats Resigned/Fired: None

The Bureau of Privacy and Identity Protection, which is part of the FTC, “safeguards consumers’ financial privacy” and “investigates breaches of data security…” In March, the servers of marketing services firm Epsilon were hacked from an unknown source. After the security breach took place, the company announced that the email addresses and names of thousands of customers of more than 100 companies were stolen. Epsilon was quick to announce that credit card information or passwords had not been exposed, nevertheless, a great deal of personal information, including users’ medical conditions and interests, were compromised. This is only the latest in the seemingly unending series of security breaches at major marketing companies, making the FTC’s Bureau of Privacy and Protection seem largely impotent in doing what its name suggests – protecting identities and privacy.

5. Drug-Resistant Bacteria Found in Meat
> Responsible Federal Agency: The United States Department of Agriculture
> Bureaucrats Resigned/Fired: None

A research organization called Genomics issued a report  it conducted on meat sold at supermarkets around the country. The shocking results were that nearly half of the meat studied at 26 different stores contained an antibiotic-resistant strain of the harmful bacteria called Staphylococcus Aureus, more commonly known as Staph. While the bacteria can be eliminated if handled properly, mishandling the contaminated meat, either through under-cooking or spreading to other surfaces, food, and people it comes in contact with during preparation. These cases can lead to serious illness or death. According to the study, the reason the bacteria is drug-resistant resistant  is because farmers overused antibiotics in meat-producing farm animals, something the USDA should have known. Worse still, at the time of the report, Staph was not even on the list of bacteria that the government screened for when inspecting meat.

6. BP Oil Spill
> Responsible Federal Agency: Minerals Management Services
> Bureaucrats Resigned/Fired: MMS director Elizabeth Birnbaum

Former BP CEO Tony Hayward received overwhelming majority of the blame for the explosion of the Deepwater Horizon oil rig and the massive spill in the Gulf. Perhaps the company’s management of the site was to blame, but of equal concern to many is the failure of federal body responsible for regulating drilling companies and preventing such incidents – the Minerals Management Service. According to a Huffington Post report done in conjunction with the Associated Press, The MMS inspected the facility far less often than its own guidelines indicated it should have. The fallout of the incident and increasing information regarding the failure of the service to follow its own safety guidelines led the Obama administration to fire director Elizabeth Birnbaum last year.

7. Hurricane Katrina
> Responsible Federal Agency: Federal Emergency Management Agency
> Bureaucrats Resigned/Fired: FEMA Director Michael Brown

In 2005, Hurricane Katrina and the subsequent flooding resulted in the deaths of nearly 2,000 people and the destruction of more than $80 billion in property. The disaster itself obviously could not have been prevented, but the Federal Emergency Relief Agency received a great deal of criticism for handling the situation poorly. FEMA, and particularly its disgraced ex-director Michael Brown, were called incompetent for responding slowly to the disaster. A report released last week by FEMA’s watchdog agency confirmed most of the criticisms that have come up over the last five years, including the 72-hour response time after the disaster struck and the severe lack of coordination between state and federal aid workers on the ground.

8. Walter Reed Medical Hospital Neglect Scandal
> Responsible Federal Agency: The United States Military
> Bureaucrats Resigned/Fired: The Secretary of the Army, The Commander of Walter Reed, His Replacement

Walter Reed is the military’s enormous D.C.-based Hospital for wounded and ill soldiers and veterans. In 2007, The Washington Post published several reports outlining extremely poor conditions and mistreatment of servicemen and their families. The complex’s infamous Building 18 was revealed to be infested with rodents and cockroaches, and have drug dealers loitering just outside, apparently left alone by security. The debacle that followed these reports led to the firing of Secretary of the Army Francis Harvey, as well as the base commander. The commander’s replacement was forced out just months after his appointment for failing to implement reform quickly enough.

9. Mattel Lead Paint Toy Recall
> Responsible Federal Agency: Consumer Product Safety Commission
> Bureaucrats Resigned/Fired: None

According to its website, The U.S. Consumer Product Safety Commission “is charged with protecting the public from unreasonable risks of injury or death from thousands of types of consumer products under the agency’s jurisdiction.” In another case of questionable imports from China, Mattel issued a recall of more than ten million toys after the company announced that a large shipment of the manufactured items contained lead. Among the toys recalled were a series of Barbie, Sesame Street, and Dora the Explorer that investigators said were colored with lead-based paint. The CPSC, apparently failed to properly check for one of the most serious and well-known hazards.

10. Bernie Madoff’s Ponzi Scheme
> Responsible Federal Agency: The Securities and Exchange Commission
> Bureaucrats Resigned or were fired: None

The mission of the U.S. Securities and Exchange Commission is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” In attempting to fulfill this promise, it somehow missed the biggest Ponzi scheme in history, which ended up costing investors and businesses an estimated $65 billion dollars, and may have gone on since the 1970’s. The SEC now has an entire section of its homepage devoted to reforms needed in the light of the Madoff scandal. To make matters worse, the commission is now facing a scandal after it was revealed that the mother of the chief investigator had lost money in the scheme.

Douglas A. McIntyre & Michael B. Sauter