Congressional Oversight Research Articles

U.S.-China Military-to-Military Relations: Policy Considerations in a Changing Environment

U.S.-China Military-to-Military Relations:Policy Considerations in a Changing Environment Andrew S. Erickson (bio) keywords United States, China, miltary relations, National Defense Authorization Act [End Page 123] executive summary This article examines the National Defense Authorization Act (NDAA) and argues that it is both a relevant instrument of congressional oversight and an appropriate safeguard for U.S. policy in bilateral military relations with China. main argument China's rapid military modernization and increasing assertiveness under Xi Jinping—combined with growing tensions between China and the U.S.—have created a context for bilateral military relations that is significantly worse than in previous eras. This new reality makes it important to revisit the state of U.S.-China military relations with a critical eye. Initial findings suggest that the benefits of such contacts are real but limited, and in some respects they are asymmetric in favor of China's military, with little prospect of major breakthroughs in favor of U.S., allied, or even shared bilateral interests. While a moderate degree of exchange is certainly better than little or no engagement, military relations cannot and will not improve the trajectory of U.S.-China relations. The NDAA is not preventing any activities in the U.S. interest that China would likely reciprocate fully. Transcending the current situation in bilateral military engagements without compromising U.S. interests does not require revisions of the NDAA or marginalization of congressional review, but rather demands progress in Sino-U.S. relations more broadly, which may be difficult under Xi. policy implications • U.S. policy on military relations with China should proceed from a four-fold approach that is (1) clear and cogently communicated, (2) conditional and credible, (3) comprehensive, and (4) consistent. • The U.S. approach should begin with a cautious Hippocratic oath of military engagement ("first, do no harm" to U.S. security interests), which puts the burden of proof on any advocates for changing the NDAA's provisions. • U.S. military relations with China should promote openness, transparency, and innovation in specific tangible areas, particularly those that help avoid incidents when their forces are in close proximity, such as risk avoidance, crisis communication, and deconfliction procedures, as well as those that provide public goods, such as humanitarian assistance and disaster relief. • Finally, the U.S. military should emphasize equitable reciprocity and pursue a transactional approach that recognizes that progress can occur only to the extent that both sides are fully willing and able to work toward this end. [End Page 124] The U.S. government's executive and legislative branches are engaged in a sweeping re-evaluation of the United States' policy toward the People's Republic of China (PRC). This sea change is driven by perceptions that China is approaching the status of a peer competitor and threatening U.S. leadership in critical advanced industries that underwrite the United States' national security leadership and military power. Beijing is doing so through information operations, influence efforts, and espionage designed to confuse and lower resistance as it seeks to undermine U.S. strength, acquire information to emulate U.S. sources of power, and achieve dominance in critical areas essential to U.S. leadership. While concern is outpacing consensus on what strategies and actions to take, engagement is no longer the default setting for U.S. policy. Official U.S. government and other institutional interchanges with the Chinese state and society, particularly military relations, will increasingly be scrutinized to ensure that they are not undermining U.S. interests. Accordingly, for the United States, China's ongoing lack of transparency regarding both military capabilities and intentions, coupled with its rapid increases in defense spending and wide-ranging military modernization, generates great concern. Defense policy goes to the heart of a nation's vital interests and is necessarily sensitive and contested. This extends to bilateral and multilateral military relationships. Military relations cannot bolster or independently stabilize Sino-U.S. relations. Typically, they serve as an indicator of the overall relationship's broader health, one that is able to influence relations only for the worse. Chinese interlocutors frequently refer to military-to-military relations as "the short stave in the barrel" of the overall relationship...

Secret but Constrained: The Impact of Elite Opposition on Covert Operations

AbstractRecent international relations scholarship has argued that political elites constrain the use of military force by democracies. Despite the persuasiveness of this research, scholars have largely ignored elite dynamics’ ability to constrain the initiation of covert operations. This omission is consequential because scholars of US foreign policy often assume that covert operations serve as a substitute for the overt use of force; secrecy allows leaders to limit information to congressional elites and thus weaken their oversight capabilities. Do elite political dynamics constrain presidents’ ability to act secretly or do they affect the overt use of force only? I argue that elite political constraints—particularly opposition from Congress—extend to the president's ability to initiate covert operations. By examining the trade-off between US military force and CIA-initiated covert operations during the Cold War, I find the likelihood that covert operations are initiated decreases significantly during periods of divided government and that there is no distinguishable trade-off between covert operations and overt military force. The results suggest that constraints on covert operations became more uniform across unified and divided government following congressional oversight reforms in 1975 that reduced the information asymmetry between the majority and minority party. These findings have important ramifications for the nascent literature on back-door bargaining and covert signalling. Because democratic leaders frequently face domestic political costs even when acting in secret, covert operations should allow leaders to credibly convey their resolve.

Does Corporate Labor Investment Raise a Red Flag in Audit Engagements?

U.S. regulatory agencies and congressional oversight committees have expressed concerns that auditors often neglect red flags embedded in the operating characteristics of firms that misstate their financial reports. This study examines whether labor employment decisions, a major part of a firm’s operations, help predict accounting improprieties and consequently play a role in audit planning and pricing. We find that negative abnormal employment changes are associated with a higher likelihood of subsequent financial restatements, accounting irregularities, and lawsuits related to accounting fraud, and generally require greater effort from auditors as manifested by higher audit fees and longer audit report lags. Positive abnormal employment changes are associated with subsequent restatements and longer audit report lags, but not associated with fraud or audit fees. Taken together, the results are consistent with auditors recognizing the individual misstatement risks pertaining to companies’ employment decisions. These results suggest that standard setters, regulators, and practitioners should devote more attention to operational statistics to identify potential red flags.

A Comparative Analysis of the Asset Management Corporation of Nigeria and the Troubled Asset Relief Program of the United States

This article is a comparative analysis of the Asset Management Corporation of Nigeria (AMCON) with the Troubled Asset Relief Program (TARP), in the US. AMCON is an institution which was created to purchase non-performing loans of Nigerian banks due to their exposure to the oil and gas sector and the capital market. AMCON acquires these toxic loans of both distressed and sound banks, and then converts the loans to equities and sells them off. Banks that wish to sell their toxic loans to AMCON sustain losses since the average purchase price is 40% of the cost of the loan. Once AMCON purchases the toxic loans of banks, it issues seven-year Federal Government guarantee bonds to the banks. TARP, on the other hand, was established under the Emergency Economic Stabilization Act, 2008, to ameliorate the effects of the 2007 global financial crisis on the US economy. Its primary focus was on addressing the impact of the crisis on financial institutions as a result of their exposure to subprime mortgages. TARP later incorporated automobile companies into its program, as the failure of these companies, at the time, would have had a more significant impact to the US economy. The Secretary of the Treasury is responsible for the purchase of troubled assets, the management and sale of the assets and the remittance of the revenue from the sale to the US Treasury. TARP is encompassing and has the Financial Stability Oversight Board, the Congress, the Congressional Oversight Panel, the Comptroller General of the US, Judicial Review and Special Inspector General to help the Secretary in the performance of his duties. These checks and balances are lacking in AMCON; hence, the tendency of abuse of power is high under AMCON. While TARP has succeeded in stabilizing the US economy, AMCON is still struggling to stabilize the Nigerian banking sector. On further examination of these two institutions, this paper finds that there are a number of factors which hinder the realization of AMCON’s objectives. Primarily, this paper finds that there are no favourable government policies to complement AMCON. The absence of such policies, is challenging for the sustainability and regulation of the Nigerian banking system. This article concludes that similar to TARP, AMCON must be further developed and strengthened, and contain a more exhaustive system of checks and balances. In addition, it must incorporate more favourable government policies in order to be a success story.

The Paternalistic Eye: Senator Edwin Johnson and the U.S. Television Freeze

This article examines Senator Edwin Johnson’s involvement with the television freeze in the United States from 1948 to 1952. The Federal Communications Commission (FCC) instituted the freeze after post-war applications for television licences far outstripped the capability of the VHF band to hold stations. During the freeze, Johnson, who was chair of the Senate Interstate and Foreign Commerce Committee, pressured the FCC to approve CBS’s non-compatible colour system and to move broadcasting to the UHF band as a way to counteract RCA’s patent dominance in monochrome VHF broadcasting. To this end, the senator corresponded with the FCC chair, industry leaders, members of the media and the general public and also set up his own committee to study the status of colour television technology. His position as commerce committee chair gave him a unique bully pulpit from which he was able to say and do things that FCC commissioners could not. Unencumbered by pressures from the industry or by congressional or executive oversight, Johnson was not afraid to make use of his status to take high-profile stands that were often at odds with the commission and, especially, powerful interests in the broadcast industry.

Ralls and National Security Review of Foreign Investments

With its enormous open market, the United States has long been a magnet for foreign direct investments (FDI). Historically, most of the FDI originated from U.S. allies such as the U.K. and Canada and posed minimal threat to U.S. national security. In the past decade, however, surging FDI from non-allies elevated the tensions between safeguarding U.S. national security and preserving a free and open investment market. In response, Congress reformed the review process by Committee on Foreign Investment in the United States (CFIUS) to enhance the scrutiny of FDI and congressional oversight. The agency enjoys broad discretion and its review is shrouded in secrecy. Yet given the national security nature of the regime, no foreign investor had ever challenged the agency until 2013, when a Chinese-invested company filed a federal lawsuit against CFIUS alleging, among others, violations of its constitutional right to due process. Few thought the plaintiff had more than a minimal chance of winning, and the trial court indeed ruled in favor of the government. Yet to the surprise of most experts, the DC Circuit reversed the lower court’s decision and held the CFIUS’s action unconstitutional. As the first and only lawsuit against CFIUS in the agency’s entire history, the case (Ralls v. CFIUS) has caught a great deal of attention and generated heated debates. But to date the debates have mostly centered on the legal merits of the case. Few have analyzed the key assumptions underlying the trial court ruling and the critiques of the appellate ruling, let alone the practical impacts of the case. This article narrows the gaps by empirically exploring the following three questions. One, is the assumption valid that foreign investors with complete information assume the risk of presidential veto by skipping the notification to CFIUS prior to their acquisition of U.S. assets? The trial judge and most CFIUS experts have adopted, consciously or not, that assumption, so has the agency itself. However, as will be demonstrated below, the assumption lacks empirical support. Two, has the DC Circuit ruling any significant practical effects on how foreign investors cope with the CFIUS regime, as some critiques have predicted? According to the empirical analysis, Ralls has at most a temporary effect on foreign investors’ perception of CFIUS review. Third, how do foreign investors view and respond to the regime in general? The article presents preliminary evidence that the investors’ actions reflect salient legal issues of the CFIUS law. The findings have important policy and theoretical implications.

Ralls and National Security Review of Foreign Investments

With its enormous open market, the United States has long been a magnet for foreign direct investments (FDI). Historically, most of the FDI originated from U.S. allies such as the U.K. and Canada and posed minimal threat to U.S. national security. In the past decade, however, surging FDI from non-allies elevated the tensions between safeguarding U.S. national security and preserving a free and open investment market. In response, Congress reformed the review process by Committee on Foreign Investment in the United States (CFIUS) to enhance the scrutiny of FDI and congressional oversight. The agency enjoys broad discretion and its review is shrouded in secrecy. Yet given the national security nature of the regime, no foreign investor had ever challenged the agency until 2013, when a Chinese-invested company filed a federal lawsuit against CFIUS alleging, among others, violations of its constitutional right to due process. Few thought the plaintiff had more than a minimal chance of winning, and the trial court indeed ruled in favor of the government. Yet to the surprise of most experts, the DC Circuit reversed the lower court’s decision and held the CFIUS’s action unconstitutional. As the first and only lawsuit against CFIUS in the agency’s entire history, the case (Ralls v. CFIUS) has caught a great deal of attention and generated heated debates. But to date the debates have mostly centered on the legal merits of the case. Few have analyzed the key assumptions underlying the trial court ruling and the critiques of the appellate ruling, let alone the practical impacts of the case. This article narrows the gaps by empirically exploring the following three questions. One, is the assumption valid that foreign investors with complete information assume the risk of presidential veto by skipping the notification to CFIUS prior to their acquisition of U.S. assets? The trial judge and most CFIUS experts have adopted, consciously or not, that assumption, so has the agency itself. However, as will be demonstrated below, the assumption lacks empirical support. Two, has the DC Circuit ruling any significant practical effects on how foreign investors cope with the CFIUS regime, as some critiques have predicted? According to the empirical analysis, Ralls has at most a temporary effect on foreign investors’ perception of CFIUS review. Third, how do foreign investors view and respond to the regime in general? The article presents preliminary evidence that the investors’ actions reflect salient legal issues of the CFIUS law. The findings have important policy and theoretical implications.

Threats to monetary policy independence: reasons to be concerned

Several legislative efforts are under way that aim to impose greater congressional oversight of and influence on the monetary policy decision making of the Federal Reserve System. Some of these initiatives might do little harm or even make marginal improvements. But others pose more serious threats to the operational independence of monetary policy. Proposals to require the Federal Reserve to frame monetary policy decisions according to a mathematical formula imply a concrete simplicity of policy that is inaccurate and misleading. And the reporting requirements associated with these proposals threaten to negate the major advantage of monetary policy as a countercyclical weapon—speed. Proposals to subject the non-monetary policy functions of the Fed to the appropriations process provide Congress with additional leverage that could be used to apply pressure to monetary policy decisions. For its part, the Fed should continue to increase transparency through more timely and complete release of relevant information and analysis. To best promote the objectives of stable prices and maximum employment, the operational independence of the Federal Reserve’s monetary policy decision making needs to be preserved and protected.

Editor's Letter

Editor's Letter

Is the Military’s Century-Old Frontline Psychiatry Policy Harmful to Veterans and Their Families? Part Three of a Systematic Review

The explicit mission of the military’s 100-year-old frontline psychiatry doctrine is to ensure that upwards to 95% of deployed service members diagnosed with war stress injury and/or psychiatric disorder are prevented from leaving war zones, unless they are either grossly incapacitated or pose imminent safety risks to self or others. In the final segment of this comprehensive three-part review, we examine systematically evidence that the military’s mental health policies may be harmful to veterans and their families in order to address unanswered clinical, moral, and legal questions. Our analysis reviews, empirical studies on the health effects from cumulative exposure to war stress, previously classified reports on frontline psychiatry, prevalence and treatment of mental health conditions among deployed personnel, risk and protective factors of combat-related post-traumatic stress disorder (PTSD), and prospective deployment research on health outcomes. There has not been the proper research undertaken comparing in situ treatment vs. evaluation, so conclusions are limited. Nevertheless, results show there is a body of evidence that repeated exposure to war stress appears associated a wide variety of long-term adverse medical, psychiatric, and social outcomes. The current findings, combined with our two previous reviews, provide support for the conclusion that veterans and their families appear possibly more likely to be harmed than helped by the US military’s policies and procedures. In this regard, it appears that frontline psychiatry is perhaps contributing to a generational cycle of self-inflicted wartime behavioral health crises. Several corrective actions including possible class action, as has happened in the UK, and a call for national independent inquiries with congressional oversight should be done.

Out of the Service, Into the House

While evidence from international security and civil-military relations shows that elites with military experience have distinct policy preferences from elites who have not served in the armed forces, the effects of military service are not apparent in congressional voting records on foreign and defense policy. If elites with military experience have distinct policy preferences, why has this gap failed to manifest itself in congressional policy positions? I argue that the effects of military service are most pronounced on issues where this experience is highly salient: on the oversight of war operations. Using a pooled cross-sectional time-series analysis of an index of roll call votes in the House of Representatives during the wars in Afghanistan and Iraq, I find that congresspersons with military experience are significantly more likely to vote to increase congressional oversight over war operations, including increased access to information and limiting the deployment of troops in theater. Further tests confirm these findings are not simply due to partisan effects. I discuss how my results carry serious implications for war termination and the declining number of veterans in Congress during the post-9/11 era, as well as the impact of military service on foreign policy and international security.

Destiny rides again: the reappearance of silicone gel-filled breast implant toxicity.

Background Twenty-five years ago attorneys representing ailing women in class action litigation against silicone breast implant manufacturers made the procedural error of defining silicone-induced toxicity in the courtroom before it was properly studied in the exam room. This aberrant methodology perverted the proper research process, rendered verification of any real disease elusive, and cemented the groundwork for a repeat public health crisis potentially affecting two million women in the USA who possess new silicone gel devices inserted over the past 10 years. Patients and methods Six women, previously well, aged 27 to 53 (mean 42), were recipients of the new generations of cohesive silicone gel-filled breast implants approved for general use by the Food and Drug Administration (FDA) since December of 2006. They averaged seven years of total implantation time, and none experienced implant rupture. Results All six became ill on average 3.5 years from the time of implantation. By seven years the women manifested multiple types of skin rashes, polyarthritis, fatigue, protracted AM stiffness, myalgias, headaches, photosensitivity, hair loss, paresthesias, tinnitus, lymphadenopathy, chest pain, cognitive dysfunction, dry eyes, skin pigment changes, itching, muscle twitching, dizziness, nausea, easy bruising, and odor and smell sensitivity. Three of the four who were explanted noted improvement and/or resolution of at least 50% of their total disease manifestations. Conclusions These six women are representative of over 70,000 other breast implant recipients who, over the past three years, have had their new silicone devices permanently removed because of alleged gel-induced toxicity. The recurrence of this public health crisis has been fueled by manufacturers' research fraud, FDA ineptness, faulty informed consent, patient abandonment, proprietary manufacturing secrecy, misleading advertising, physician indifference, aberrant research methodology, and lax Congressional oversight.

The CIA and congressional oversight: learning and forgetting lessons

Organizations both learn lessons and forget lessons. A lesson said to be learned by the CIA as a result of the negative reaction of congressional overseers to its interrogation program was the need to create opportunities to provide information and interact with them. The historical record shows that this was a lesson already learned. Why then the need to relearn it? It is suggested here that organizational forgetfulness may be triggered by the same factors which promote learning: perceived problems with organizational performance, opportunities to act, and people.

Congressional Investigations and the Electoral Connection

opportunities to test these assumptions—and, by extension—the theories they support. We utilize one such historical moment to test existing theories of Congressional oversight of the bureaucracy. We leverage the 17th Amendment to evaluate the assumption that incentives motivated by the “electoral connection” drive members of Congress to investigate more vigorously during divided government. We show that the 17th Amendment “treatment” substantially increased the Senate’s propensity to investigate when encountering an opposition president.

U.S. Food and Drug Administration: Review for the Emergency Physician of Approval Process and Limitations.

U.S. Food and Drug Administration: Review for the Emergency Physician of Approval Process and Limitations.

Watchdogs on the Hill: The Decline of Congressional Oversight of U.S. Foreign Relations

Watchdogs on the Hill: The Decline of Congressional Oversight of U.S. Foreign Relations

Independent Agencies in the United State - Law, Structure, and Politics

The authors of this book believe that the President and the Congress are engaged in a constitutional tug of war over the federal administrative agencies. I argue that this view fails adequately to address the politicization of agencies due to partisan congressional influence and oversight. Further, agency capture undermines an agency’s mission.

Working smart and hard? Agency effort, judicial review, and policy precision

The lion’s share of policy in the United States is made by administrative agencies. Agencies not only make policy choices, they must also implement policy effectively. Oversight institutions play an integral role in the policymaking process by monitoring, through review of agency policy actions, both policymaking tasks. Through analysis of a formal model I develop a theory of policymaking between agencies and courts and show that review can impact agency effort choices even when bureaucratic subversion is not a concern. At times the court has no impact on this effort and the agency is unconstrained. However, when the agency’s effort dictates whether or not the court defers to the agency’s actions judicial review does affect effort decisions. In this setting, review can either strengthen or, counter-intuitively, weaken agency effort incentives. Implications for executive and congressional oversight are discussed in light of these results.

Agency Finance in the Age of Executive Government

The rise of “executive government” has prompted a great deal of public debate and scholarly theorizing. This article examines one aspect of that very large subject: agency budgets or, more precisely, revenues. To an unprecedented extent, regulatory agencies have come to rely on non-appropriated funds for their ordinary operations. Many have become self-financing; some have become profit centers for wider executive exertions — and for Congress. We trace this development in two areas: agencies’ delegated authority to tax, and agency finance through settlement with private parties in criminal or civil enforcement proceedings. Due to a paucity of reliable data, our presentation is necessarily sketchy and tentative. We nonetheless proceed (with the appropriate caution) in the hope of informing a scholarly debate over “the administrative state” that to our minds has become excessively abstract and formalistic. Agency self-finance bears on many of the central themes of administrative and constitutional law: delegation and the separation of powers; congressional oversight; agency independence; the choice between rulemaking and enforcement or adjudication; and judicial review. Approaching the administrative state from its most pedestrian front opens a window both into its actual operation and constitutional rule-of-law questions.

Comments on Mark Seidenfeld’s “Revisiting Congressional Delegation of Interpretive Primacy as Foundation for Chevron Deference”

Comments on Mark Seidenfeld’s “Revisiting Congressional Delegation of Interpretive Primacy as Foundation for <i>Chevron</i> Deference”