Hart Testimony

Summary

Written testimony of John Hart, CEO of Open the Books, dated March 18, 2026, for a Senate hearing titled "Sunshine Week: Bringing Secret Government Spending to Light," addressed to Chair Ernst and Ranking Member Markey. The testimony states that Other Transaction Agreements are not reported to USASpending.gov and cites a GAO finding of $40 billion in unreported OTAs. It describes the organization's report on $93.4 billion in Pentagon spending in September, including a $50 billion surge in the last five days of the fiscal year, and discusses use-it-or-lose-it spending rules. It cites improper payments of $96.1 billion at Centers for Medicare and Medicaid Services out of $186 billion in FY25. It refers to the Stop Secret Spending Act, the End-of-Year Fiscal Responsibility Act and the DOGE in Spending Act, with numbered footnotes to sources.

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Full text

John Hart
CEO of Open the Books

Madame Chair Ernst, Ranking Member Markey and distinguished Senators,

Thank you for the opportunity to testify. I want to commend this committee for holding a
hearing about this timely – and timeless – topic that is deeply connected to our past and
our future.

I believe the title of this hearing – “Sunshine Week: Bringing Secret Government Spending
to Light” – will be refreshing and wildly popular with the vast and mostly silent majority of
normal Americans who are exhausted by what passes as debate in our polarized times.

If we’re honest, the normal week in American politics doesn’t feel like sunshine. It feels like
sniping – an obnoxious competition between hecklers and cheerleaders who are grasping
for the spotlight.

We’re going to offer so much more today.

We’re here celebrating Sunshine Week during our 250th anniversary because our founders
were on to something when they wrote transparency into the Constitution.

You may remember from chemistry class that biological life is carbon based. Carbon is the
building block of life because it’s sticky. It can form bonds to make the molecules that
make up life.

I believe our founders understood that our civic life is transparency based. Transparency is
the building block of our other freedoms. Transparency appears in Article I, Section 9,
Clause 7 before the Bill of Rights because without transparency, our freedoms come apart.

Our founders didn’t dream up this idea. They were inspired by figures like the great Roman
Senator Cicero who wrote in 50 BC:

“True law is right reason in agreement with nature; it is of universal application, unchanging
and everlasting … And there will not be different laws at Rome and at Athens, or different
laws now and in the future, but one eternal and unchangeable law will be valid for all
nations and all times, and there will be one master and ruler, that is, God, over us all, for he
is the author of this law, its promulgator, and its enforcing judge.”

We can’t discern true law without understanding nature, and we can’t understand nature
without transparency, evidence and data.

Fifty years after Cicero, a Jewish carpenter named Jesus connected truth with freedom
when he said, “The truth will set you free.”
Almost 1,800 years later our founders declared that the “Laws of Nature” and “Nature’s
God” entitle us with “unalienable rights.” Government power derives from the consent of
the governed and that if government gets on the wrong side of true law, We the People have
the right to alter or abolish it.

We have the privilege of carrying on this revolution, which is still a magnificent exception in
human history.

Our greatest leaders have always understood that each generation has a responsibility to
work toward a more perfect union.

Ronald Reagan said, “Freedom is never more than one generation away from extinction. We
didn't pass it to our children in the bloodstream. It must be fought for and protected.”

Abraham Lincoln read our moment well when he lamented the passing of our first Greatest
Generation – the Revolutionary War veterans, “Passion has helped us; but can do so no
more. It will in future be our enemy.”

He warned the temple of liberty will fall unless we supply new pillars hewn from the solid
quarry of sober reason.

He understood the through line: True law is right reason in agreement with nature.

I had the privilege of working for a senator Tom Coburn who supplied a new pillar with his
colleague Barack Obama when they passed legislation in 2006 that put all government
spending online for the first time.

Our ambition wasn’t just to pass a law, but to create a norm and an expectation.

Senator Ernst, I want to thank you for being a leader in maintaining, protecting and
upgrading our transparency laws. I’m grateful you want to work with us and your colleagues
in bringing us closer to real-time transparency, which the late founder of our organization,
Adam Andrzejewski, rightly believed would have been written into the Constitution if our
founders had access to today’s technology.

Let me describe one problem with USASpending.gov. While agencies are required to report
their grants and contracts to USASpending.gov, various agencies have found a loophole
called Other Transaction Agreements or OTAs.
These agreements offer additional flexibility for changing circumstances. For example, they
were used for deals on Covid-19 vaccines which required more speed than normal
guidelines allow. 1

Office of Management and Budget also has no specific guidance on OTA reporting, which
make them the Wild West of federal expenditures. According to the Department of
Treasury, OTAs don’t need to be reported because they are not expressly mentioned in the
FFATA. 2

But this directly violates the spirit of the law, which calls for full disclosure of all spending.
The numbers are not insignificant. The Government Accountability Office found the use of
these deals is growing. The deals GAO was able to identify amounted to $4.8 billion in 2018
but had grown to over $18 billion in 2020. In total, GAO found $40 billion in OTAs that hadn’t
been reported to USASpending.gov. 3

The transparency gaps don’t stop there. In the same GAO report, the watchdog found 49
agencies that did not report at all. Neither entity, Treasury or OMB, has “clear responsibility
for determining which agencies must report.” Therefore, they said “there may be other
agencies with OTA authority that either did not report or for which we did not identify OTA
data.” 4

“Worse, the GAO has found that the Pentagon “cannot assess the extent to which OTAs are
delivering capabilities to the warfighter.” 5

Senator Ernst, your Stop Secret Spending Act would bring sunlight back to those billions in
keeping with the spirit of Sunshine Week and Article I of our Constitution. 6

I also want to thank you for your courage. It’s not easy to call out secret spending and offer
legislation to fix our broken “use-it-or-lose-it” rules that enable obscene amounts of waste
in agencies, including the Department of War.

As you may have seen, we recently released one of our now-routine reports on the federal
government’s imbecilic “use-it-or-lose-it” spending rules that compel agencies to shovel

1
  “Improved Contracting Data Would Help DOD Assess Effectiveness,” Government Accountability Office,
September 2025, https://arpa-h.gov/sites/default/files/2025-
09/GAOReport_Improved_Contracting_Data_Helps_Assess_Effectiveness_Sep2025.pdf
2
  “Federal Spending Transparency: Opportunities to Improve USASpending.gov Data,” Government
Accountability Office, November 7, 2023, https://www.gao.gov/assets/d24106214.pdf
3
  Ibid.
4
  Ibid.
5
  “Improved Contracting Data Would Help DOD Assess Effectiveness,” Government Accountability Office,
September 2025, https://arpa-h.gov/sites/default/files/2025-
09/GAOReport_Improved_Contracting_Data_Helps_Assess_Effectiveness_Sep2025.pdf
6
  S. 872 - Stop Secret Spending Act of 2025, Congress.gov, November 7, 2025,
https://www.congress.gov/bill/119th-congress/senate-bill/872
money out the door at the end of the fiscal year. This report focused on the Pentagon’s
record-setting $93.4 billion in spending this past September, which included a $50 billion
surge in the last five days of the fiscal year – an amount that exceeded Israel’s defense
budget of $35 billion for an entire year. 7

As with previous reports, we documented Pentagon spending on eye-popping items like
lobster, steak, and furniture to highlight the systemic problem. This installment went viral
and was referred to by some as “Lobstergate” with late night hosts and prominent
Democrats lambasting Secretary Pete Hegseth for his profligate lobster spending. Many of
these critics didn’t object when we raised the same concerns about Biden, but we always
welcome converts to fiscal sanity. 89

Senator Ernst, as a combat veteran, commentators don’t need to lecture you about troop
morale. Our organization believes in scrutinizing all government spending, but I understand
the case for a generous surf and turf budget as a way of thanking our troops. But that issue
misses the point. The Pentagon’s $24.5 million surf and turf budget for ribeye steaks,
lobster and Alaskan king crab is a small fraction of the use-it-or-lose-it phenomenon. The
Pentagon spent nearly ten times that amount on furniture ($225.6 million) in September
and 2,000 times that amount on the $50 billion five-day blowout before September 30. 10

Since 2008, we’ve found that the Pentagon spends about twice as much in the last month
of the fiscal year as in other months. Other agencies join the Pentagon in celebrating
“Christmas in September.” In fact, the season has created an industry of consultants who
advise clients to “take advantage” of panicked buying in federal agencies. Mike Weiland,
the CEO of Govly, an AI company that aids government contractors, calls September 30
“Amazon Prime Day” for the federal government. 11

Panic buying may harm readiness and undermine Hegseth’s lethality mission. The
American Economic Review found that hurried year-end purchases were more than five
times as likely to receive a “low quality” score from government chief information officers,



7
  “Pentagon Should Focus on Defense Priorities, not Lavish Dinners, After Historic $93.4B ‘Use-It-or-Lose-It”
September 2025,” Open the Books, March 9, 2026, https://openthebooks.substack.com/p/pentagon-should-
focus-on-defense
8
  “Jimmy Kimmel, Stephen Colbert Take Aim at Pete Hegseth’s Overspending: ‘You’re Ordering What?’” Rolling
Stone, March 11, 2026, https://www.rollingstone.com/tv-movies/tv-movie-news/jimmy-kimmel-stephen-
colbert-pete-hegseths-overspending-1235528447/
9
  “HEGSETH BLOWING $93 BILLION OF TAXPAYER DOLLARS IN 1 MONTH !!,” Newsom Press Office
(@GovPressOffice), X, https://x.com/GovPressOffice/status/2031441496801529864
10
   “Pentagon Should Focus on Defense Priorities…” Open the Books, March 9, 2026,
https://openthebooks.substack.com/p/pentagon-should-focus-on-defense
11
   “Prime Day FOMO: Taking Advantage of September’s Spike in Government Spending,” Govly, November 15,
2022, https://www.govly.com/blog/prime-day-fomo-taking-advantage-of-septembers-spike-in-government-
spending
based on their cost and usefulness. 12 Warfighting and deterrence obviously depends on
troops being well-equipped, not just well-fed.

Thank you, Senator Ernst, for introducing legislation to fix the use-it-or-lose-it problem.
Your End-of-Year Fiscal Responsibility Act would prohibit spending in the last two months
of the fiscal year from exceeding the average of the ten preceding months. 13 This would
ensure agencies are spending thoughtfully and investing in core responsibilities all year
round rather than engaging in ritualistic panic buying in September.

If your colleagues were troubled by “Lobstergate,” they should work with you on a durable
bipartisan solution. No one in Washington should be comfortable with an obviously
dysfunctional status quo around “use-it-or-lose-it” spending rules.

On Sunshine Week, it’s important to highlight another troubling status quo, our enormous
improper payments problem. Serious work remains to make improper payments reports
thorough, transparent, and with hope for future improvement.

Of sixty-three agencies assessed for compliance, fifteen (or 24%) were noncompliant. That
means they failed to report improper payments in whole or in part, their error rates are
above 10% and thus unacceptably high, or their risk management programs are in place.
Many noncompliant agencies have a long history of it. The most recent list includes major
Cabinet agencies like HHS, Treasury, Department of Agriculture and Veterans Affairs 14. All
of them have been noncompliant 14 years running. The SBA, often a focus for this
committee, was noncompliant 13 of 14 years along with the departments of Labor and
War. 15

The problems at HHS are twofold. Improper payments at Centers for Medicare and
Medicaid Services make up more than half of all improper payments each year. That’s
$96.1 billion of the $186 billion in FY25. HHS reports improper payments only at CMS and
the Administration for Children and Families, making it a partial accounting. 16

Further, the Government Accountability Office believes there are undetected,
“sophisticated fraud schemes” not included in the annual improper payment reports. 17

12
   Liebman, Jeffrey B. & Neal Mahoney, “Do Expiring Budgets Lead to Wasteful Year-End Spending?” American
Economic Review 2017, 107(11): 3510–3549, https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20131296
13
   “EXCLUSIVE: GOP Senator Introduces Bill To Wage War On Fed Waste,” Daily Caller, accessed March 16,
2026, https://dailycaller.com/2026/03/11/joni-ernst-bill-audit-federal-spending-end-of-year
14
   “Improper Payments: Ongoing Challenges and Recent Legislative Proposals,” Congressional Research
Service, December 10, 2024, https://www.congress.gov/crs-product/R48296
15
   “Improper Payments Down from Covid-Era Highs But “Confirmed Fraud” Info Missing Amid National
Scandal,” Open the Books, February 18, 2026, https://openthebooks.substack.com/p/improper-payments-
down-from-covid
16
   Resources, accessed March 16, 2026, https://paymentaccuracy.gov/resources
17
   “Financial Audit: FY 2023 and FY 2022 Consolidated Financial Statements of the U.S. Government,”
Government Accountability Office, February 15, 2024, https://www.gao.gov/assets/d24106660.pdf
We’re seeing the evidence of that in real-time headlines including the welfare fraud scandal
in Minnesota. 18

A week ago, the Wall Street Journal found states paid autism-therapy providers $2.2 billion
in 2023, up from $660 million four years prior. 19 But providers taking advantage of a
lucrative surge in diagnosed children found ways to chart up to $800 an hour for work that
could be done “by high-school graduates.” Some billed for up to 10 different workers
evaluating a patient in a single day and spent nearly the equivalent of a 40-hour work
week. 20

“Confirmed fraud” is a dataset that is usually included in the improper payments report but
is excluded in the FY25 report for reasons unknown. 21

Senator Ernst, you and more than a dozen of your colleagues have cosponsored the
Delivering On Government Efficiency (DOGE) in Spending Act, which would require the
Treasury Department to have a description of the payment, link it to a budget account, and
crosscheck the payment against government databases to ensure accuracy and eligibility.
That could put a stop to many of these improper payments before they get out the door. 22

Our organization knows the power of transparency in action in working with you over the
years. Together we identified over $1.3 billion taxpayer dollars had gone to entities in China
and Russia from 2017-2022. 23 It was unlikely that was all of it, as Washington loses track of
dollars as they seep out from awardees and contractors to third parties here and abroad.
That work paid off in multiple ways. It led to your amending the 2024 NDAA with a
mandated audit of money sent to China from the Department of Defense. The results
proved what many of us suspected. The Inspector General himself was unable to get to the
bottom of the vast spending at the Pentagon, which routinely fails its audits. 24 But as of last
fiscal year, my organization found the Pentagon reported no money had gone to either

18
   “House Panel Opens Minnesota Fraud Investigation,” The Hill, accessed March 16, 2026,
https://thehill.com/homenews/house/5696604-house-investigates-minnesota-medicaid/
19
   “The Boom in Autism Therapy Is Medicaid’s Fastest-Growing Jackpot,” Wall Street Journal, accessed March
16, 2026, https://www.wsj.com/health/healthcare/autism-therapy-medicaid-payments-640aa435
20
   “Five Key Takeaways from the WSJ Investigation of the Autism Therapy Business,” Wall Street Journal,
accessed March 16, 2026, /https:/www.wsj.com/health/healthcare/five-takeaways-from-the-wsj-
investigation-of-the-autism-therapy-business-0eae4c67
21
   Resources, accessed March 16, 2026, https://paymentaccuracy.gov/resources
22
   “Ernst, Bean Work to Eliminate Billions in Bogus Payments,” Senator Joni Ernst, accessed March 16, 2026,
https://www.ernst.senate.gov/news/press-releases/ernst-bean-work-to-eliminate-billions-in-bogus-
payments
23
   “$1.3 Billion In U.S. Taxpayer Money Funded The Dragon (China) And The Bear (Russia) Since 2017,” Open
the Books, July 31, 2023, https://openthebooks.substack.com/p/13-billion-in-us-taxpayer-money-funded
24
   “Management Advisory: Review of DoD Funds Provided to the People’s Republic of China and Associated
Affiliates for Research Activities or Any Foreign Countries for the Enhancement of Pathogens of Pandemic
Potential (Report No. DODIG-2024-099),” Department of Defense Office of Inspector General, June 18, 2024,
https://www.dodig.mil/reports.html/Article/3811820/management-advisory-review-of-dod-funds-provided-
to-the-peoples-republic-of-chi/
nation. In the best cases, a steady stream of transparency is like water cutting through
stone. Over time, it can wipe away mighty walls of opposition.

Senator Ernst, the Cost Openness and Spending Transparency (COST) Act would also help
watchdogs like Open the Books do more of the same in other areas. By requiring grant
recipients to put price tags on all taxpayer funded projects and post them publicly, we --
and citizen journalists everywhere -- can leverage a new level of accountability.
It would allow for greater scrutiny of some truly questionable grants like teaching pigs to
use a video game joystick, a real grant from the NIH. 25 Another grant ripe for scrutiny comes
from your own Squeal Report: $1.3 billion in NIH grants that found that cats pampered with
daily treats and classical music are less prone to poop outside of the litter box or cough up
hairballs. 26

Although awardees are already required to do this in some cases, the GAO found that
agencies are not monitoring or enforcing any compliance. 27 The COST Act comes with
teeth, allowing the Office of Management and Budget to withhold a portion of a grant from
a recipient that fails to post the dollar amount it costs taxpayers and the percentage that
comes from federal funds. 28

Along similar lines, your Stop Billion Dollar Boondoggles Act, which passed the Senate last
December, will require public disclosure of projects that are more than $1 billion over
budget or more than 5 years behind schedule. California’s infamous high-speed rail project
is perhaps the best known and has the worst budget overruns at $13 billion and counting.
The most-delayed project is improving the Columbus Crossroad corridor, a stunning 19
years off the pace. That’s enough time to have a child and clap at their high school
graduation. 29

Implemented together, these bills will make it much harder to hide the fat on the pork.

Finally, we have to acknowledge that sunshine can be subverted by secrecy. It’s important
to be honest with ourselves, each other, and the public about why that happens.

Secrecy happens in part due to human nature. People don’t want to be second guessed,
and those in charge don’t want to look because looking comes at a cost. Fixing problems

25
   Croney, Candace C. and Sarah T. Boysen, “Acquisition of a Joystick-Operated Video Task by Pigs (Sus
scrofa),” February 10, 2021,
https://www.frontiersin.org/journals/psychology/articles/10.3389/fpsyg.2021.631755
26
   “Squeal Award: Pampering cats costs millions, fur real,” Senator Joni Ernst, accessed March 16, 2026,
https://outreach.senate.gov/iqextranet/view_newsletter.aspx?id=105470&c=JErnst
27
   “Agency Action Required to Ensure Grantees Identify Federal Contribution Amounts,” Government
Accountability Office, March 14, 2019, https://www.gao.gov/products/gao-19-282
28
   “Senators Lankford, Ernst, Paul Introduce COST Act,” Senator Jim Lankford, March 14, 2019,
https://www.lankford.senate.gov/news/press-releases/senators-lankford-ernst-paul-introduce-cost-act
29
   “Off the Rails: The Billion Dollar Boondoggles Taking Taxpayers for a Ride,” Senator Joni Ernst, accessed
March 16, 2026, https://www.ernst.senate.gov/imo/media/doc/off_the_rails_report_v3.pdf
and conducting oversight requires hours of unglamorous and tedious work. Too often
policymakers prefer to mow the flower bed instead of pulling the weeds.

But there is a deeper corruption at work. Author C.S. Lewis wrote a famous study of evil and
corruption called The Screwtape Letters, which is a dialogue between a devil, Screwtape,
and his apprentice.

In one exchange, Screwtape says, “It is funny how mortals always picture us as putting
things into their minds: in reality our best work is done by keeping things out.”

And Lewis and other philosophers and theologians have long observed that evil is most
successful when it disguises itself as good.

Now, in some in some blatantly authoritarian regimes like Iran, Russia and China, the devil
doesn’t need a disguise. Rulers can thwart truth and transparency by turning off the
internet.

But, in our system, the gradual slope to secrecy is more subtle. The enemy of truth and
transparency isn’t a pack of lies or brazen secrecy. The enemy is tribalism. Political
tribalism provides the warmth of association, community and camaraderie – all good
things – with a permission structure that allows for selective illumination – transparency for
thee but not for me. It keeps inconvenient facts out of sight and out of mind. When both
tribes permit partial secrecy, we’re on our way to total blindness.

Tribalism is incompatible with the founders’ vision of transparency. There are no
Republican facts or Democrat facts or conservative facts or liberal facts. There are only
facts, data and evidence.

The recent debate about “Lobstergate” I mentioned is a case study. Our recent report on
the $93 billion in year-end use-it-or-lose-it spending at the Pentagon provoked this debate.
Both sides committed sins of omission. It was hecklers vs. cheerleaders. The prevailing
narrative on the left condemned Secretary Hegseth for ordering lobster while omitting the
fact that previous Democrat administrations did the same thing. Meanwhile, on the right,
the prevailing narrative defended Hegseth for boosting troop morale with surf and turf while
largely ignoring the fact that we just spent 10 times that amount on furniture and 2,000
times that amount - $50 billion – in the last five days of the fiscal year. Again, to put that in
context, Israel spent $35 billion in an entire year on its defense. 30

Senator Ernst, again, you’ve been an exception and have spent your time fighting for
sunshine and against secrecy regardless of what party is in power.


30
  “Pentagon Should Focus on Defense Priorities…” Open the Books, March 9, 2026,
https://openthebooks.substack.com/p/pentagon-should-focus-on-defense
Thank you for the opportunity to testify. I look forward to your questions.


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