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

(1)Documents were recently published exposing massive waste and incompetence at the Copyright Office. It seems the form Register of Copyrights, Maria Pallante, put in place a fake twenty-five million dollar budget line item, and then intentionally deceived congress about it.

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Guest post by Mike Masnick of Techdirt

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.

1That'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?

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