April 11, 2024

Castro, Fitzpatrick Launch Bipartisan Push to Protect U.S. Development Finance Programs from Waste, Fraud, and Abuse

Devex: New bill aims to give DFC watchdog law enforcement power

WASHINGTON – Today, Reps. Joaquin Castro (TX-20) and Brian Fitzpatrick (PA-01) introduced the Enhancing Development Finance Corporation Oversight Act of 2024, bipartisan legislation that would grant law enforcement authority to the Office of Inspector General (OIG) of the United States International Development Finance Corporation (DFC) in order to improve oversight and accountability of U.S. foreign aid programs.

Six years ago, Reps. Castro and Fitzpatrick helped to establish the DFC as co-sponsors of the 2018 Better Utilization of Investments Leading to Development Act (BUILD) Act. To ensure appropriate oversight over taxpayer dollars expended through the DFC, the BUILD Act simultaneously established the DFC OIG with a mission to prevent, detect, and deter waste, fraud, and abuse in DFC programs and operations. Until 2020, when the DFC OIG became operational, the OIG for the U.S. Agency for International Development (USAID) provided oversight for DFC programs. While the USAID OIG has federal law enforcement authorities to conduct criminal investigations – including the authority to make arrests and obtain and execute search warrants - the DFC OIG does not currently possess these same authorities, constraining its oversight power.

“Across the federal government, strong Inspectors General play an essential role in rooting out fraud and maintaining trust in government programs. As U.S. global development projects continue to expand, Congress needs to ensure that DFC’s OIG has the tools to maintain the highest level of integrity in DFC’s operations. This bipartisan bill will help the United States set a strong example of good governance at home and abroad, and I am thankful to Congressman Fitzpatrick for his partnership on this much-needed bipartisan reform,” said Congressman Castro.

“The International Development Finance Corporation Office of Inspector General (DFC OIG) must be given law enforcement authority in order to properly provide oversight of its programs,” said Congressman Fitzpatrick. “I am proud to co-lead this bipartisan legislation with Rep. Castro that would improve oversight and accountability of U.S. foreign aid programs by granting the DFC OIG further authority to reduce unnecessary misuse of resources.”

"I applaud Congressman Joaquin Castro and Congressman Brian Fitzpatrick for re-introducing the Enhancing Development Finance Corporation Oversight Act, which will provide the DFC’s Office of Inspector General with the needed law enforcement authorities to identify and eliminate waste, fraud, and abuse.  As a strong proponent of the DFC, I believe it is critical that the agency's IG have the full suite of tools to properly conduct oversight of the agency's operations.  I commend Reps. Castro and Fitzpatrick for their leadership on this important issue, and I urge Congress to enact this legislation," said former Congressman Ted Yoho, lead author of the BUILD Act.

“This bipartisan measure gives the DFC’s Office of Inspector General the same authority other federal OIG’s have to ensure strong oversight and accountability of agency projects,” said Rob Mosbacher, Jr., a member of the Modernizing Foreign Assistance Network who served as President and CEO of the Overseas Private Investment Corporation (OPIC) from 2005 to 2009. “I commend Congressman Castro and Fitzpatrick for their leadership.”

Law enforcement authorities for Inspectors General are generally granted through the Inspector General Act of 1978, which outlines a process by which the U.S. Attorney General can delegate these authorities. The Department of Justice has indicated that it has no objections to providing law enforcement authority to the DFC OIG but has not moved to grant such authority. The Enhancing Development Finance Corporation Oversight Act of 2024 would restore appropriate law enforcement oversight to the DFC and ensure that agency programs continue to operate with integrity and efficiency.

The bill text for the Enhancing Development Finance Corporation Oversight Act can be found here.