In parallel with the interagency meetings that occurred during the latter half of July 2019, OMB devised a way to implement the President’s hold on security assistance to Ukraine, notwithstanding DOD’s Congressional notifications of February 28 and May 23. Over the course of his twelve-year career at OMB, Mr. Sandy could not recall any other time when a hold had been placed on security assistance after a Congressional notification had been sent.383
When speaking with Mr. Duffey on or about July 18 or 19, Mr. Sandy immediately raised concerns about how to implement the hold without violating the Impoundment Control Act, which required that the funds be obligated (i.e. spent) before they expired at the end of the fiscal year, on September 30.384 In light of that legal requirement, the hold would have to be temporary.385 An additional hurdle was the fact that OMB had already authorized DOD to spend the security assistance funds DOD administered for fiscal year 2019.386 Therefore, when President Trump directed the hold in July, OMB scrambled to reverse that prior authorization.
From July 19 through July 24, Mr. Sandy consulted with the OMB Office of General Counsel as well as Ms. McCusker at DOD on how to legally implement a hold on the funds.387 Mr. Sandy’s staff at OMB also conferred with OMB’s Budget Review Division.388 Based on these consultations, OMB decided to implement the hold through a series of nine funding documents, known legally as “apportionments.”389 Apportionments typically are used to convey authority to an agency to spend funds, not to withhold funds; thus, in order to bar DOD from spending money, these particular apportionments included footnotes that would impose the holds while using creative language to skirt legal concerns. Mr. Sandy testified that “the purpose of the footnote was to preclude obligation for a limited period of time but enable planning and casework to continue.”390 He also testified that this use of footnotes was unusual and that in his 12 years of OMB experience, he could “not recall another event like it.”391
On July 25, OMB issued the first funding document implementing the hold. In this document, the relevant footnote notified DOD that the Ukraine Security Assistance Initiative funds “are not available for obligation until August 5, 2019, to allow for an interagency process to determine the best use of such funds.” The footnote also stated that:
- Based on OMB’s communication with DOD on July 25, 2019, OMB understands from the Department that this brief pause in obligations will not preclude DOD’s timely execution of the final policy direction. DOD may continue its planning and casework for the Initiative during this period.392
Mr. Sandy explained that the “interagency process” referenced in the footnote referred to the NSC-led interagency meetings convened during the latter half of July, and that the August 5 date provided a “reasonable timeframe for an interagency process” to produce “clear guidance” on the hold.393 The August 5 date was determined in consultation with Mr. Duffey at OMB and Ms. McCusker at DOD.394
Mr. Sandy further testified that the second sentence in the footnote—which states, in relevant part, that “OMB understands from the Department that this brief pause in obligations will not preclude DOD’s timely execution of the final policy direction”—was critical to the implementation of the hold:
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