Another Major Scandal At The Copyright Office: $25 Million 'Fake Budget' Line Item

from the oops dept

On Monday, we published documents we obtained that revealed a massive amount of incompetence and waste at the Copyright Office. They had officially asked for $1.9 million on a technology modernization program, then spent $11.6 million on it without telling anyone about the ever-growing money pit, only to cancel the contract with the vendor last October with nothing to show for it. Oh, and throughout the process, it appeared that the Copyright Register misled both Congress and the Library of Congress.

It would appear that this is not the only time that the former Register of Copyrights, Maria Pallante, was found to be misleading Congress and the Library of Congress concerning the Copyright Office's budget and monetary needs. In the recent markup for a bill in the House Judiciary Committee that would make change the Copyright Register position to be a Presidential appointment, rather than by the Librarian of Congress, Rep. Zoe Lofgren revealed that Pallante had apparently put in place a fake $25 million budget line item, asking the Librarian of Congress to testify under oath what it was for, despite it being made up. You can see the comments here or in the video below:

If you can't watch that, here's the relevant transcript, as stated by Lofgren. She was trying to add an amendment to the bill that would still allow the Librarian of Congress to fire the Register of Copyrights if necessary (under the bill presented, only the President can fire the Register).

This amendment allows the Librarian of Congress to remove the Register. This is an essential provision. How can you expect the Librarian -- as mandated by law -- properly supervise the Copyright Office when the Register is answerable to no one but the executive branch? And how do you truly supervise someone you can't fire?

Now, what can a Librarian do if a Register is acting insubordinately, or giving fake budget request numbers. Unfortunately, this is not a hypothetical. While preparing the fiscal year 18 appropriations request, the Library noticed that a $25 million line item in the Copyright Office's request didn't add up. When questioned about this, Register Pallante stated that this number "was no big deal" -- it was just a placeholder and they'd make adjustments after the money was appropriated.

In other words, the Copyright Office gave the Librarian fake budget numbers with the intention that she go testify in front of the Appropriations Committee to the need of these funds that was made up.

That's fairly astounding. As far as I can tell, the "corrected" 2018 Copyright Office budget justification hasn't been released yet, but the 2017 version shows that there were three line items that added up to a grand total of $74 million. A $25 million dollar "fake budget" item in the Copyright Office's budget justification would represent somewhere around a third of the Office's budget. That's... incredible.

Once again, the conspiracy theories claiming that Google somehow had Pallante forced out are looking sillier and sillier. This is twice in one week that we've now come across stories of what appear to be serious problems with how the Copyright Office is managed -- and these issues only came to light after the new Librarian of Congress started actually doing her job and looking into what was happening down at the Copyright Office, only to find it was a disaster of bad project management, wasted budgets and (apparently) "fake budget" line items.

And yet, for unclear reasons, Congress continues to rush quickly forward with this bill to block the Librarian of Congress from even appointing a new head of the Copyright Office. That bill was introduced just a couple of weeks ago and would drastically change how things have been done for over a century, with no clearly stated rationale. In fact, Congress had held no hearings on this bill. Instead, in a matter of a couple of weeks it is already trying to get the bill to the floor and voted on, perhaps without even knowing about these scandals at the Copyright Office that have remained hidden until now.

Given all of this, and the fact that this is only coming to light now that there's a competent Librarian of Congress who's actually doing her job, why does Congress want to take away the ability of the Library to actually oversee the Copyright Office? How does that make any sense at all?

Filed Under: appropriations, copyright office, copyright register, fake budget, library of congress, zoe lofgren


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  1. identicon
    Anonymous Coward, 6 Apr 2017 @ 10:55am

    Not quite what you think

    You are intermingling budget submissions and talking papers.

    The actual budget submission for the Library of Congress are far more detailed than the talking papers you linked. This, for example, is the actual FY 2017 submission from the Library of Congress that provides detailed budgets, some descriptions, and justifications. https://www.copyright.gov/about/budget/2016/loc-fy2017-budget-justification.pdf

    These numbers usually get "synopsized" in talking papers, or in this case, the written statement of testimony supporting the real budget request. This statement is the one you linked, https://assets.documentcloud.org/documents/3536105/Senate-Budget-Testimony-fy17.pdf

    It should be accurate, sure. But it's not the budget document that Congress approves, it's really just a discussion paper. As budgets are being adjusted within departments, these talking papers are prepped, and then adjusted *after* the real budget documents are changed. Then staff are scrambling to make sure all old copies are thrown away, etc.

    In this case, Congress is right about picking at the error in testimony, but the Librarian is also correct in saying that it's a place holder. It's not there for Congress to approve. It's there to answer questions about the line items. Some staffer probably just screwed up and didn't transcribe a number from one document to the other.

    Right now, it's easy for Congress to snatch this up and use it to flog the Librarian. But the rest of us should remember that's just a political ploy, because Congress should remember that in the bigger scheme, the Librarian is correct, it doesn't really matter, it's not what Congress is approving, and it is subject to simple human error. Lofgren should be looking at the actual, detailed budget submission and making sure that it's what's being approved.

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