By Andrew Duehren
WASHINGTON -- The Trump administration didn't have the legal
authority to put on hold millions of dollars in security assistance
to Ukraine, Congress's nonpartisan watchdog found, adding more
scrutiny to the funding freeze last summer that led to the
impeachment of President Trump.
In its decision Thursday, the Government Accountability Office
wrote that the Office of Management and Budget improperly froze the
money for policy reasons.
"Faithful execution of the law does not permit the President to
substitute his own policy priorities for those that Congress has
enacted into law," GAO wrote.
The GAO, which falls under the legislative branch, doesn't
enforce penalties for its legal decisions, leaving any possible
follow-up to Congress. In the past, Congress has included language
in spending bills requiring reports or hearings on compliance with
budgetary law, or tied funding for other issues to following the
law.
The Office of Management and Budget has repeatedly defended the
legality of the hold, arguing that it was necessary to allow the
administration to review the security assistance. In a letter to
GAO in December, Mark Paoletta, OMB's general counsel, said that
the administration had the legal authority to hold the funds, which
were released in mid-September.
"We disagree with GAO's opinion," Rachel Semmel, a spokeswoman
for OMB, said in a statement. "OMB uses its apportionment authority
to ensure taxpayer dollars are properly spent consistent with the
President's priorities and with the law."
Mr. Trump and members of the administration have said that the
hold was in place because of concerns about corruption in Ukraine
and questions about how much money other countries were
contributing to Ukraine, which is battling pro-Russian forces. The
Defense Department had previously certified that Ukraine had taken
sufficient steps toward combating corruption to receive the
funds.
Democrats, in their impeachment investigation, charged that Mr.
Trump froze the aid as part of his effort to pressure Ukraine to
open investigations that would benefit him politically.
The Democratic-controlled House passed two articles of
impeachment, one focused on abuse of power and the other on
obstructing Congress, in December. The GOP-led Senate, which is
expected to acquit Mr. Trump of the charges, on Thursday opened a
trial to consider them.
Meanwhile, Ukrainian authorities opened a criminal probe into
whether American citizens placed the U.S. ambassador to Ukraine
under surveillance, as text messages suggest, before she was
removed from her post last year.
The GAO opinion, signed by GAO General Counsel Thomas Armstrong,
found that the freeze on $214 million in Defense Department funding
for Ukraine didn't meet the legal standards for the administration
to freeze the funds.
Under the Impoundment Control Act, the president can freeze
funding in limited circumstances, including if it is to help
programs run more efficiently. GAO also said that the
administration didn't follow the legal procedures for notifying
Capitol Hill of the hold.
"OMB did not identify -- in either the apportionment schedules
themselves or in its response to us -- any contingencies as
recognized by the ICA, savings or efficiencies that would result
from a withholding, or any law specifically authorizing the
withholding," Mr. Armstrong wrote.
Under the ICA, which was enacted in 1974, the president may
formally ask Congress to defer or rescind funds -- for example, if
an agency can't spend the funds before the end of the fiscal year,
or decides the funds are no longer needed immediately -- but
ultimately the decision rests with lawmakers, said William
Hoagland, a former Republican staff director for the Senate Budget
Committee.
Enforcement of the law, Mr. Hoagland said, is mainly a matter of
embarrassing those found to have violated it. He said he didn't
know of anyone ever facing criminal prosecution for a
violation.
Responding to Mr. Paoletta's justification for the hold, GAO
wrote that "OMB's assertions have no basis in law."
GAO said it was continuing to review the hold on State
Department foreign military financing for Ukraine.
"OMB and State have failed, as of yet, to provide the
information we need to fulfill our duties under the ICA regarding
potential impoundments of [foreign military financing] funds," the
report said.
House Appropriations Chairwoman Nita Lowey (D., N.Y.) said that
her committee was pursuing a package of reforms to prevent similar
situations in the future.
"Given that this illegal conduct threatened our security and
undermined our elections, I feel even more strongly that the House
has chosen the right course by impeaching President Trump," she
said in a statement.
Sen. Mike Rounds (R., S.D.) said that the GAO decision didn't
change his thinking on whether the Senate trial should have
witnesses. He noted that OMB should formally notify Congress when
it freezes funding.
"In the future I would expect OMB would change it and give the
appropriate notices," he said.
Top Democrats, including Senate Minority Leader Chuck Schumer
(D., N.Y.) and House Speaker Nancy Pelosi (D., Calif.), said the
GAO opinion underscored the necessity of the Senate reviewing
documents and hearing from witnesses during the trial.
Sen. Patrick Leahy (D., Vt.) the top Democrat on the Senate
Appropriations Committee, criticized the administration for holding
the funds.
"I've been here since President Ford, Democratic and Republican
presidents, and I have never seen such a damning report as that,"
he said.
Some Senate Republicans were critical of GAO's ruling, while
others said it was problematic only for OMB, not Mr. Trump.
"It's the Office of Management and Budget, with whom I've had a
few disagreements over the years about withholding money that's
been appropriated by Congress," said Sen. John Cornyn (R., Texas).
"I think we're going to hear some more about it. But I don't think
that changes anything."
Sen. Rand Paul (R., Ky.) said the administration was well within
its rights to hold the money.
Sen. Richard Shelby (R., Ala.), the chairman of the Senate
Appropriations Chairman, criticized the GAO for what he said was
overreaching. "They shouldn't be deciding who broke the law," he
said.
The GAO opened its review after Sen. Chris Van Hollen (D., Md.)
asked about the legality of the hold at an October hearing with
U.S. Comptroller General Gene Dodaro, who leads the office.
In the weeks after the beginning of the funding freeze,
officials at OMB and the Pentagon raised questions about whether
the administration had the legal authority to indefinitely suspend
money approved by Congress.
Mark Sandy, a career budget staffer, told impeachment
investigators that he immediately flagged legal questions about
freezing aid to Ukraine when Mike Duffey, his boss and a political
appointee, instructed him to do so in July.
After consulting with lawyers at OMB and the Defense Department,
Mr. Sandy signed the paperwork for the first pause on the security
assistance.
Mr. Duffey, a former Pentagon staffer and executive director of
the Wisconsin Republican Party, subsequently began signing the
paperwork for apportioning funds in his portfolio and kept the
Ukraine aid on hold. Mr. Schumer is seeking Mr. Duffey's testimony
during the Senate trial.
Mr. Sandy told investigators he had never seen a political
appointee take responsibility for signing apportionments
before.
In the paperwork executing the funding freeze, OMB allowed the
Defense Department to continue to prepare to spend the funds while
not actually releasing them. Pentagon officials repeatedly warned
that the hold could prevent them from spending the money before it
expired at the end of the fiscal year on Sept. 30.
Congress ultimately included a provision in a short-term
spending bill passed in September preventing roughly $30 million in
unspent funds from expiring.
Siobhan Hughes and Kate Davidson contributed to this
article.
Write to Andrew Duehren at andrew.duehren@wsj.com
(END) Dow Jones Newswires
January 16, 2020 18:10 ET (23:10 GMT)
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