A senior career official at the Office of Management and Budget testified on Saturday about a budget process that went off the rails when nearly $400 million in US military aid to Ukraine was withheld earlier this year, and that he did not know for sure the reasoning behind the freeze in funds, sources familiar with his testimony told CNN.
He spoke about how unusual of a process it was that a political appointee came in, took over the apportionment process and placed a hold on the military aid, a source told CNN.
CNN previously reported that Michael Duffey, the OMB’s associate director for national security programs and a Trump political appointee, signed at least some of the documents delaying aid to Ukraine, according to two sources. Normally a career budget official signs such documents.
Sandy testified that he raised questions to the OMB general counsel about whether the move violated the Congressional Budget and Impoundment Control Act of 1974, the source said. He would not discuss what the OMB general counsel said because of concerns it could violate privilege.
This past summer, the Trump administration took the unusual step of freezing nearly $400 million in aid to Ukraine – intended in part to help the country counter Russian aggression – before the President’s July 25 phone call with Ukrainian President Volodymyr Zelensky. The administration eventually released the military aid in September after congressional Republicans raised concerns and the White House was made aware of a whistleblower complaint about the July call.
On Saturday, Democrats wanted to learn more from Sandy about how the process of disbursing military aid normally works and why suddenly this process was different.
Another source familiar with Sandy’s testimony described him as a reluctant witness, but one who saw it as his duty to come in and technically explain to congressional investigators what happened from his vantage point. Sandy is a bureaucrat who saw the process going off the rails, but didn’t necessarily ask questions, the source told CNN in describing Sandy’s knowledge of the freezing of military aid to Ukraine.
When Duffey, who oversees the office Sandy works in, sidelined him, Sandy told lawmakers he was told that Duffey wanted to learn more about how the process worked and so would be taking over the particular issue, according to the source. Sandy also told lawmakers he tried to explain to Duffey that it wasn’t necessary to take over the account to learn about and understand the process, the source said, but Duffey, who was new to OMB, insisted otherwise.
When questions began to surface about why the aid was held, the eventual explanation given was that the Trump administration wanted to see what other countries were contributing and make sure it was equitable.
Sandy did not speak to reporters at the conclusion of his Saturday deposition. CNN has reached out to his attorney for comment.
But Republicans emerged from the proceedings contending Sandy gave Democrats no information to bolster their inquiry into whether the aid was deliberately mishandled to help Trump’s political chances.
GOP Rep. Lee Zeldin said Democrats have an even “deader case” after Saturday’s testimony.
“Since I’ve gotten in Congress this was one of the worst, most unsuccessful fishing expeditions that I have witnessed,” Zeldin said.
In October, the OMB pushed back against the characterization that Duffey’s role in the process was unusual when reports began to surface.
“The idea that administration officials would not be involved in budget execution, including apportionment authority, after decades of precedent, is absolutely ludicrous,” Rachel Semmel, a spokeswoman for OMB, told CNN last month. “It is absurd to suggest that the President and his administration officials should not play a leadership role in ensuring taxpayer dollars are well spent.”
Duffey did not testify before House investigators, neither showing for a voluntary deposition nor compiling with a subsequent subpoena to testify on November 5.
First White House budget official to meet with impeachment investigators
Sandy, who has served under both Republican and Democratic presidents, was the first OMB official to meet with impeachment investigators after others, like OMB director and acting chief of staff Mick Mulvaney, refused. He served briefly as acting OMB director at the beginning of the Trump administration after Obama officials recommended him for the spot.
Political appointees in the office have fought subpoenas, declined to provide documents, and tried in other ways to stonewall the probe, which is focused on whether Trump withheld US military aid to pressure Ukraine to conduct investigations he could benefit from politically.
Russ Vought, who is the acting director of OMB and referred to the probe as a “sham process,” ignored a request for a voluntary closed-door deposition and did not appear on November 6 – the date House Democrats set for his subpoenaed testimony. OMB has declined to turn over documents to investigators.
Sandy received a subpoena Saturday morning to appear before lawmakers, after his attorney said he would be willing to testify so long as he was subpoenaed.
“In light of an attempt by OMB to direct Mark Sandy not to appear for his scheduled deposition, and efforts to limit any testimony that does occur, the House Intelligence Committee issued a subpoena to compel his testimony,” an official working on the impeachment inquiry told CNN. “As required of him by law, Mr. Sandy is complying with the subpoena and answering questions from both Democratic and Republican Members and staff.”
Rep. Eric Swalwell, a Democrat on the House Intelligence Committee, thanked Sandy “for coming in today and providing useful testimony.” Sandy, Swalwell told reporters after the conclusion of the deposition, “cooperated and answered all of the questions that we had.”
“As always, when witnesses come in, we learn more, and today we learned more, because Mr. Sandy honored his duty to cooperate in our investigation,” Swalwell said.
North Carolina Rep. Mark Meadows, a Republican on the committee, told reporters on Saturday that Sandy’s testimony included technical details about the budget process. He added that the testimony does not support the Democrats’ suggestion that there are “nefarious” purposes as to why the aid was held.
This story has been updated with additional developments Saturday.
CNN’s Jeremy Herb, Haley Byrd, Gregory Wallace, Rene Marsh and Sara Murray contributed to this report.