Dedication
Dedicated to the American people. May they always remain vigilant to keep their government open, transparent, and accountable.
Contents
Cover
Title Page
Dedication
Introduction
Chapter 1: Elizabeth Warren’s Big Dream: The CFPB
Chapter 2: What Don’t They Want Congress to See?
Chapter 3: Money, Sex, and the EPA
Chapter 4: The Deep State Fights Back
Chapter 5: The War on Whistleblowers
Chapter 6: Contempt of Congress
Chapter 7: Lying to Congress
Chapter 8: Face-to-Face with the Deep State
Chapter 9: They Think We Can’t Handle Truth
Chapter 10: Flouting Subpoenas
Chapter 11: The Deep State’s Nightmare
Chapter 12: The Wall: Why the Deep State Doesn’t Want It Built
Chapter 13: Taming the Deep State
Epilogue
Acknowledgments
Index
About the Author
Copyright
About the Publisher
Introduction
It is October 12, 2012, and I am in Stuttgart, Germany, on my way to Libya. I am standing in the office of four-star U.S. general Carter Ham, about to get a classified briefing on everything the United States knows about the attack less than four weeks ago on our diplomatic facility in Benghazi, Libya. I am about to find out, I hope, why four Americans, including our ambassador, died during the attack and why no nearby American forces were deployed to save them. I am a U.S. congressman and I have top-secret security clearance.
No one introduces me to a young, blond-haired man in the room holding a notebook and pen. I do notice that people in the room seem a little intimidated, a little too aware of this fellow. So I ask who he is and that I be introduced.
He is a lawyer from the State Department who has just arrived from Washington, D.C. He knows nothing about Libya. He is not a specialist in anything remotely having to do with the country or terrorism or the military or conflict zones.
He will contribute nothing. He is a State Department lawyer who specializes in Freedom of Information Act requests—or, more specifically, how to keep information hidden from the public . . . and from a congressman.
He next appears at a classified briefing in Tripoli. I have had it with being watched over by a State Department “minder.” I want him out of the Tripoli meeting. He refuses. He wants to be in the room when I am briefed. He telephones Secretary of State Hillary Clinton’s chief of staff, Cheryl Mills. Now there is a standoff. I want him out.
Well, it turns out he doesn’t have the proper security clearance for this meeting.
He is out.
This story—this book—is not about Benghazi. What happened at Benghazi, and more specifically, the story I’ve related here about my attempt to uncover the truth about Benghazi, is ultimately about the very much alive and thriving Deep State. It is about control of information to the American people and the control of the truth.
That moment, facing the young blond-haired State Department lawyer, was the first time I knew I was face-to-face with the Deep State.
Unfortunately, it was not my last confrontation with them.
The Deep State is real. They don’t like exposure, accountability, or responsibility. They fight back, outlast, and work the system for their advantage. And they certainly don’t like disruptive forces such as Donald Trump. For example, but for a few brave souls—whistleblowers who willingly put their careers on the line—the absolute duplicity of Hillary Clinton’s team and the Obama administration’s response to the Benghazi attacks would never have been exposed.
This is a book about what happens when huge swaths of government begin prioritizing their careers over getting the job done. Many readers will think they know this story—a story of incompetent drones who are underqualified and lazy. When we talk about the Deep State, we get this story all wrong. We misunderstand what has happened, and mischaracterize who is doing it.
Sometimes even conservatives talk about the Deep State as though the term refers to dumb, inefficient bureaucracy.
In fact, it is the opposite: the Deep State is intentional, unconstitutional, and organized. It is about pure, unfettered power, and it gets very angry when it is even questioned.
Their stonewalling, their inability to coherently defend themselves, their secrecy—these look like weakness, but they are the Deep State’s greatest strength. We need a better guide to the parts of the federal government that are actively working against the will of the people.
The Deep State has an agenda. It rarely matches up with conservative principles.
The stories in this book are always frustrating and sometimes shocking, but they will challenge many closely held assumptions about the Deep State. The heart of this book, though, is unraveling the greatest puzzle of the Deep State: Congress rarely does anything about it. As chairman of the House Committee on Oversight and Government Reform, I was the tip of the spear challenging the Deep State and trying to hold them accountable. In this book I highlight their tactics, illuminate the problems, and offer a way to fight back and win. It is important to expose the stories, but if the American people are going to win, Congress is going to have to do things differently, and this book helps concerned citizens understand so they can engage.
The Deep State has been in place for a long time, arguably since the middle of the twentieth century. As a new member of Congress, I got to see it in action as we took on the powerful forces at the Internal Revenue Service, the Environmental Protection Agency, the Department of Justice, the Department of State, etc. The deeper I dove in, the more shocking was the brazen approach of the power brokers. They were used to operating anonymously and without consequence. This problem is bigger than we can imagine and getting worse, unless we do something dramatic to wrest back control.
Protecting Big Government
Washington, D.C., will hand out more than $4.3 trillion in the next twelve months, or roughly $12 billion per day (including about $700 million per day in interest on the national debt). What could go wrong?
I believe the United States of America is exceptional and inspired. I also believe that after 240 years we have an obligation on our watch to provide diligent stewardship. We must pass our country to the future generations better than ever.
Responsible parents do all they can to create a better life for their children. This includes leaving our country better than we found it.
The United States of America is the greatest country on the face of the planet, but we have a responsibility as citizens to engage in the management of our government, our resources, and the American people’s money. Government does some good things, but it can also ruin our lives or reach too far into them.
Our country’s long-term success includes living within our financial boundaries, limiting government to the powers envisioned by our Founders, defending ourselves with a dominant military, and ensuring accountability within the omnipresent government apparatus.
Not everyone sees it that way. The problem: many of those who disagree with everything I’ve just said work in the government.
Yes, the Deep State is real. It’s been characterized as different things by different people. Some call it the government’s massive secrecy apparatus as conducted by the federal defense and intelligence agencies; others include a handful of federal trial courts, corporations, and private interests, including Wall Street and big banks, in their description of the Deep State.
All of that may be true. I tend not to imagine nefarious conspiracies in dusty dark corners. I tend to see ordinary imperfect human beings and ordinary human institutions,
acting too often with greed, fear, and with messy self-interests. The Deep State is not Democrat or Republican. It doesn’t wear a trench coat, and it doesn’t linger furtively on street corners at midnight in Washington, D.C. In truth, and perhaps most startling, the Deep State doesn’t hide at all.
In fact, the reality is much worse than that. The Deep State is a vast, self-perpetuating bureaucracy whose aim is singular: to exist again tomorrow and the day after, to replicate itself, to be indestructible and nearly impossible to disrupt. As a congressman, I have seen it and experienced it up close in my confrontations with the State Department, the IRS, the EPA, the Secret Service, and the Justice Department, just to name a few. U.S. presidents come and go, political parties win one election cycle and lose the next. The Deep State does what it wants, and waits out periodic blips. Inevitably, it seems, the Deep State goes on.
Could the bipartisan Deep State live with a President Jeb Bush? Absolutely. President Hillary Clinton? Even better. I could throw out a bunch of other acceptable figures who ran for president in 2016 and in many past elections.
But President Donald Trump? No. That man was an anomaly whose election could simply not happen. And yet, of course, it did. Now, Washington has lived for a long time with the occasional political outsider who came to Washington, even some who did not conform to the ways of Washington—think Jimmy Carter, perhaps. Democracy does that sort of thing from time to time. But Donald Trump was more than an outsider. He campaigned not just against Washington, as most politicians do, but against the New York–based media and the coastal elites. Worse, the problem was that Trump was a traitor! He was not some peanut farmer from Georgia. He was a billionaire New Yorker who knew the media more than anyone, had traveled in their circles, been invited to their parties and private clubs and invited the elites to his. Who can forget the photograph of Hillary Clinton beaming at Donald Trump at his wedding to Melania? And yet here he turned on them. A man who loved America so much he was not going to “play the game.” His constituency, the voters who filled stadiums throughout the primary and general election season, was, as Hillary Clinton memorably called them, the “Deplorables,” the working-class middle Americans, forgotten men and women left behind by crony capitalism, unbridled globalization, illegal immigration—and the Republican and Democratic establishments.
What we know about the Deep State is admittedly the tip of the iceberg. Even that tip would require more than one book to adequately explore. With more being revealed every day, writing the full and conclusive story of the Deep State—even just within the Obama administration—would be almost impossible. The story is a moving target. This book will contrast my experience with the Obama administration during the eight years I served in the United States Congress with what we’re seeing play out today under President Trump.
Trump, the ultimate disrupter and rule breaker, won an election he was simply not supposed to win. And the Deep State, a wounded bear, is having none of it. Before Trump was even sworn into office the Deep State went into overdrive to thwart his presidency. In agency after agency, the threat to big government posed by Trump changed all the rules. At the top of the chopping block was the Obama-era Consumer Financial Protection Bureau.
Chapter 1
Elizabeth Warren’s Big Dream: The CFPB
Elizabeth Warren had a dream. Unlike many of us, she did not dream of a new house, a newer car, a higher-paying job, or even world peace. Her dream, which came true, was for a new federal agency with 1,623 employees and an annual budget of $605.9 million.
In 2007, she wrote an article titled “Unsafe at Any Rate” for the statist publication Democracy Journal. The article called for the creation of an agency almost identical to the Consumer Financial Protection Bureau.
It’s an interesting article. While it smartly discusses needed protection for consumers, it also goes further in its tone. It outlines a sharp perspective on divisions in America—between rich and poor, dependency and personal responsibility. Like so much leftist writing, the article’s tone is divisive and essentially declares that the wealthy are evil and all-powerful, and that the poor and middle class are helpless and without agency for their own lives:
Indeed, the pain imposed by a dangerous credit product is even more insidious than that inflicted by a malfunctioning kitchen appliance. If toasters are dangerous, they may burn down the homes of rich people or poor people, college graduates or high-school dropouts. But credit products are not nearly so egalitarian. Wealthy families can ignore the tricks and traps associated with credit card debt, secure in the knowledge that they won’t need to turn to credit to get through a rough patch.
Comparing credit card debt to a deadly malfunctioning appliance seems weird to me . . . but okay. Warren was a law professor at the time but soon ran for office and was elected a U.S. senator from Massachusetts in 2011.
She then eagerly set about preventing the next financial crisis with legislation creating a bureaucracy that had very little to do with the causes of the previous one.
The Dodd-Frank Act describes the CFPB’s mission:
The CFPB was created [in July 2010] to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace. Before, that responsibility was divided among several agencies. Today, it’s our primary focus.
Our work includes:
Rooting out unfair, deceptive, or abusive acts or practices by writing rules, supervising companies, and enforcing the laws that outlaw discrimination in consumer finance
Taking consumer complaints
Enhancing financial education
Researching the consumer experience of using financial products
Monitoring financial markets for new risks to consumers
Enforcing laws and monitoring risk.
Who could be against that?
The Reality of the CFPB
If the Deep State could wrest control of government away from the people and design their version of the perfect government entity, they would probably design something like the Consumer Financial Protection Bureau. This Obama-era agency checks every box on the Deep State’s wish list: unlimited, unaccountable, and unchecked. The funding is nonrescindable, the leadership supposedly untouchable, the decisions unquestionable, and the operation impervious to the political winds. Power, money, and no accountability. What more could the Deep State ask for?
Ironically, Democrats sold the agency as a solution to the very problems it would create. Representative Barney Frank of Massachusetts and Senator Christopher Dodd of Connecticut said the CFPB was intended to consolidate regulation and hold people accountable.
So they created an agency of unaccountable people to write more regulations. If that doesn’t make sense to you, you are probably not a member of Congress.
They created an entity with no checks and balances to check and balance the financial markets. They hired bureaucrats to operate in secret with the mission of shedding light. They hired political hacks to take the politics out of regulatory oversight.
Sold as a way to consolidate regulation, the Dodd-Frank reforms didn’t consolidate anything. As only Washington can do, the legislation grew the bureaucracy, expanded regulations, and spent millions more of your dollars. This agency is the epitome of the progressive agenda: more government, more regulation, more of your money, more protection from yourself, and less liberty.
I doubt there is a more egregious example of putting government out of reach of the people than this monstrosity of government waste and abuse. This is one more case of the federal government spending millions to educate us about what is best for us.
In addition to its 1,600-plus employees, the bureau is partially housed in the heart of Washington, D.C. You, the taxpayer, spent more than $139 million on a building that was more than 300 percent over budget to make sure they have only the finest of offices in the highest rent district possible. The agency spends hundreds of millions of dollars, but it is shrouded
in secrecy and lacks the basic transparency found in other parts of the federal government.
Warren appeared before the Oversight Committee weeks before the bureau opened for business in 2011. The House Committee on Appropriations had cited several instances where they had little to no insight into the CFPB’s budget numbers. I tried to question Warren in my five minutes about the budgeting items of the CFPB but she didn’t have a clue, or if she did she stonewalled with ignorance.
This was a newly established bureau whose mission was to root out deceptive practices and provide a clearer light into the inner workings of financial institutions. However, its own operations and numbers were lost in a cloud of secrecy.
Most unsettling is the mechanism for funding the bureau, which is extremely unusual and little noticed outside Washington.
Under our normal federal system, government agencies are clearly within the bounds of the executive branch, but their funding comes via Congress. Almost every agency’s funding comes through congressional appropriations. The House originates all spending bills, differences are worked out with the Senate, and eventually the bill makes its way to the president for signature.
But not the Consumer Financial Protection Bureau.
The CFPB was purposely designed to bypass Congress, checks and balances, and oversight. It is funded by the Federal Reserve, also known as the Fed, and therefore is outside the reach of the United States Congress. All funding per the Constitution is supposed to originate in the House of Representatives, but the CFPB’s appropriations don’t happen this way. Those monies are allocated by the Fed, but the public has no true insight into the Fed’s financial operations.
Don’t for one minute think that funding from the Fed means you aren’t paying for it. The Fed generates revenue by collecting interest on the $4.5 trillion in bonds it owns. Where does the Fed get the money to buy all those bonds? Thin air. Not even joking. It’s a neat trick. They simply create new dollars that didn’t exist before. In doing so, they devalue every dollar you and I hold. Then they collect interest on the bonds they bought and use that interest to fund their operations. What’s left over, they pay into the Treasury. The more they spend on the CFPB, the less they pay to the Treasury. You see that sleight of hand? Then the money comes out of the federal budget, but not in a way Congress can control in the future.
The Deep State Page 1
