GAO Decided Trump’s Hold on Ukraine Funding Was Illegal and It Wasn’t a Tough Call

It is not surprising that the Government Accountability Office (GAO), a nonpartisan federal agency charged with reviewing government spending, has determined that the Trump administration’s hold on military assistance to Ukraine violated the Impoundment Control Act (ICA). I wrote in November for Just Security that the hold was illegal.

But in addition to the larger implications this decision has for the Senate impeachment trial, a close reading of the GAO decision provides some important insights.

This was not a hard case:

The GAO opinion provides further evidence that Trump’s hold on military assistance for Ukraine was not simply illegal, but clearly so. The executive branch’s power to delay funding is heavily circumscribed by the ICA, which sets forth the few circumstances in which such funding deferrals are permissible. As GAO notes in its decision:

The ICA authorizes the deferral of budget authority in a limited range of circumstances: to provide for contingencies; to achieve savings made possible by or through changes in requirements or greater efficiency of operations; or as specifically provided by law. 2 U.S.C. § 684(b). No officer or employee of the United States may defer budget authority for any other purpose. Id. Here, 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.

The White House Office of Management and Budget (OMB), which implemented the hold, argued that the freeze was to ensure funding was spent consistent with Trump’s foreign policy goals (although we now know that it had nothing to do with foreign policy, but Trump’s own domestic political concerns). But as GAO notes, “The ICA does not permit deferrals for policy reasons.” It goes on to state that, “OMB’s justification for the withholding falls squarely within the scope of an impermissible policy deferral. Thus, the deferral of [Ukraine Security Assistance Initiative (USAI)] funds was improper under the ICA.”

This is the central point: Trump’s funding hold is exactly the kind of activity the ICA was designed to prevent. As GAO explains,

“Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law. In fact, Congress was concerned about exactly these types of withholdings when it enacted and later amended the ICA.”

This was not a close call: The Trump administration was behaving in the exact manner that the law was intended to prevent.

Even under the most credulous reading of the administration’s motives, this was illegal:

One of the most striking parts of the GAO decision is that the agency does not seek to interrogate OMB’s purported justifications for the hold, yet still finds that Trump’s actions were illegal.

Despite testimony from numerous witnesses and substantial evidence that the aid was withheld as part of Trump’s extortion scheme to force Ukraine to interfere in the 2020 elections, GAO accepted at face value OMB’s claim that the purpose of the hold was to allow for an “interagency process” to assess the use of such funds.

OMB argued that this constituted a “programmatic delay” that is permissible under the ICA. GAO found that “OMB’s assertions have no basis in law.” It explains that:

[P]rogrammatic delays occur when an agency is taking necessary steps to implement a program, but because of factors external to the program, funds temporarily go unobligated. B-329739, Dec. 19, 2018; B-291241, Oct. 8, 2002; B-241514.5, May 7, 1991. This presumes, of course, that the agency is making reasonable efforts to obligate. B-241514.5, May 7, 1991. Here, there was no external factor causing an unavoidable delay. Rather, OMB on its own volition explicitly barred DOD from obligating amounts.

Although GAO did not examine whether OMB was accurately describing the motivations for the hold, recent reporting from Just Security raised serious questions about a statement OMB made in a Dec. 11 letter to GAO.

In the letter, OMB claimed that “at no point during the pause in obligations did DoD [Office of General Counsel] indicate to OMB that, as a matter of law, the apportionments would prevent DOD from being able to obligate the funds before the end of the fiscal year.” As the email record and witness testimony show, however, multiple DoD officials raised legally relevant concerns with OMB on numerous occasions, including that the hold would violate the ICA. OMB’s carefully worded statement appears to be disingenuous at best.

This was not the first time that questions about the accuracy of OMB’s statements were raised related to the funding hold.

While the hold was in place, DoD’s acting Comptroller Elaine McCusker noted that OMB General Counsel Mark Paoletta: “appears to continue to consistently misunderstand the process and timelines we have provided for funds execution.”

She also told the Defense Secretary Mark Esper’s chief of staff that, “this situation is really unworkable made particularly difficult because OMB lawyers continue to consistently mischaracterize the process.” When the administration released these emails in December under court order, they redacted McCusker’s concerns.

When news of the hold became public in late August, Paoletta drafted talking points defending the administration. But, McCusker noted that, “the last one is not accurate from a financial execution standpoint, something we have been consistently conveying for a few weeks.” She told senior defense officials that: “OMB continues to ignore our repeated explanation regarding how the process works.” Again, these concerns were originally redacted and only uncovered through Just Security’s reporting.

Then, after repeated warnings from DoD to OMB that the funding hold was illegal, OMB tried to pin the blame on DoD in early September, stating that: “If you are unable to obligate the funds, it will have been DoD’s decision that cause any impoundment of funds.” McCusker’s response: “You can’t be serious. I am speechless.”

OMB created a highly irregular budget process to implement the hold:

The process for implementing the funding hold was highly irregular. It was shrouded in secrecy from the start. In his July 25 email to DoD officials alerting them of the hold, Trump official Mike Duffey said that:

“Given the sensitive nature of the request, I appreciate your keeping that information closely held to those who need to know to execute the direction.”

OMB then took the extraordinary step of sidelining career officials so that the political appointee, Duffey, would be able to continue the hold without pushback. Two officials at OMB resigned in part because of the process around the hold, although OMB disputes this was the reason for their departures.

GAO found aspects of this highly irregular process relevant to its legal analysis:

[A]t the time OMB issued the first apportionment footnote withholding the USAI funds, DOD had already produced a plan for expending the funds. See DOD Certification, at 4–14. DOD had decided on the items it planned to purchase and had provided this information to Congress on May 23, 2019. Id. Program execution was therefore well underway when OMB issued the apportionment footnotes. As a result, we cannot accept OMB’s assertion that its actions are programmatic.

As GAO makes clear, the government had checked all the boxes and taken all the preparatory steps to send the funding out the door. Then, at the last minute, the White House took the highly unusual step of intervening to stop the process. The hold was not the result of careful policy analysis; it was simply another front in Trump’s efforts to extort Ukraine.

There are outstanding questions that GAO has regarding the hold:

Finally, GAO noted that the Trump administration had not been fully forthcoming to its requests, meaning that there is potentially further work to be done. GAO repeatedly contacted DoD about the hold, but “Thus far, DOD officials have not provided a response or a timeline for when we will receive one.”

Similarly, GAO noted that:

“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 FMF funds. We will continue to pursue this matter and will provide our decision to the Congress after we have received the necessary information. We consider a reluctance to provide a fulsome response to have constitutional significance.”

The exact reasons for this lack of cooperation are unclear. As the emails discovered by Just Security show, DoD was strongly opposed to the hold. Perhaps the agency thought it prudent to avoid saying anything that would contradict the White House. Or, perhaps this is part of the larger effort by the Trump administration to stonewall oversight of any kind, which would explain why OMB and the State Department failed to provide information sought by GAO as well.

Regardless, there may be further analysis forthcoming from GAO if it is able to obtain responses from DoD and the State Department, as well as the additional information it requested from OMB.

Image: President Donald Trump and Acting chief of staff Mick Mulvaney in the Cabinet Room at the White House on December 5. Photo by Mark Wilson/Getty Images

 

About the Author(s)

Sam Berger

Senior Adviser at the Center for American Progress, Former Senior Policy Adviser at the White House Domestic Policy Council, Former Senior Counselor and Policy Adviser at the Office of Management and Budget. Follow him on Twitter (@SamBerger_DC)