Congressional oversight
Peter Chen (陳正義), president of the Washington-based Formosan Association for Public Affairs, made an intelligent observation of the challenges faced by the overseas administration of federal contracts by the US Department of State (“Congressional oversight of the AIT,” Oct. 9, page 6).
The American Institute in Taiwan (AIT) is a nonprofit organization and is incorporated in Washington.
As was noted by Chen, AIT by-laws provide for the institute’s appointments by the contracting officer’s representative at the State Department. However, the representatives must be federal employees, because they have inherently governmental functions.
The Taiwan Relations Act (TRA) explicitly states that AIT employees are not employees of the US government. Furthermore, the ongoing AIT challenges in government contract administration have shown that the department cannot adequately perform these representative functions, and the construction project for the new AIT compound in Taipei’s Neihu District (內湖) has been a public fiasco for such functions.
The virtual absence of robust congressional oversight of the AIT construction funds is an open invitation for fraud, waste and abuse of US taxpayers’ funds provided to Taiwanese subcontractors.
These Taiwanese subcontractors are under privity of contract to the primary contractor, but AIT employees cannot issue any instructions to these contractors, such as nonpayment of subcontractors.
Even the representatives cannot make any unauthorized ratifications of federal contracts.
The TRA limits legislative oversight to the foreign affairs committees of both houses of the US Congress, and AIT employees cannot provide US governmental oversight for the administration of federal contracts in Taiwan, especially in defense contracts.
US Senator John McCain has made defense appropriations for more joint military training in Taiwan in the fiscal 2017 defense appropriations bill, but the US Senate Committee on Armed Forces does not enjoy legislative oversight of US taxpayers’ money under the TRA.
The State Department is not the agency proxy of the US Department of Defense, but the chairman of the Senate committee cannot task the AIT non-governmental employees to provide congressional action reports on the operations of the representatives in Taiwan. These representatives are US State Department employees in Washington.
In addition, US Senator Claire McCaskill has demonstrated repeated high visibility for congressional accountability of representatives and defense contractors under the US Army’s Logistics Civil Augmentation Program IV.
The Senate-approved defense appropriations for Taiwan creates a problem for the misappropriation of funds by subcontractors in Taiwan. The Taiwanese construction industry is notorious and Taiwan’s public works projects creates a den of thieves for public spending.
The TRA cannot adequately monitor the performance of the subcontractors in Taiwan, and the government procurement agreement between the US and Taiwan does not explicitly provide for government-to-government administration of awarded contracts.
A congressional solution might require the TRA’s Canadian counterpart — the Canadian Commercial Corp — to act as primary contractor with the US government and its privity of contract for the Canadian subcontractors.
McCain’s appropriations for Taiwan will continue to grow, but the wishy-washy defense spending by Taiwanese politicians requires more robust oversight of US Congress members who are interested in the defense of Taiwan.
Taiwanese subcontractors are virtually unaccountable to members of the US Senate Committee on Armed Forces and untenable situations must be changed very quickly.
Tom Chang
Alhambra , California
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