-- The following is a guest blog post by Deepwater whistleblower Michael DeKort. Mr. DeKort recently filed a False Claims Act suit against the lead contractors on the Deepwater contract, Lockheed Martin and Northrop Grumman. To learn more about Deepwater, check out POGO's previous blog posts. --
This whole thing has come full circle. When it started, I said in my YouTube video that I had an unbelievable story to tell. Now, it looks like I need to record a sequel.
Of course, I know that follow-up comments will say that I am obsessed, off my rocker, or paranoid. At least, I'll be able to sleep at night, knowing I didn't back down when even the so-called “good guys” took the wrong road and put their personal desires ahead of their country.
On May 29, the Department of Homeland Security Inspector General (DHS IG) presented its "Letter Report: U.S. Coast Guard's Plans to Improve Deepwater Accountability" to Commandant Thad W. Allen. This IG report states that the Coast Guard is justified in holding contractors Lockheed Martin and Northrop Grumman financially accountable for problems in the Deepwater program. While the report includes appropriate items, it also omits some--purposefully and glaringly.
Unfortunately, the DHS IG has forced my hand. Now, I am forced to disclose information relative to these matters that I had previously agreed not to disclose. I am breaking my promise because individuals and organizations have obliterated the trust I had in them on behalf of our country.
In the report, the DHS IG purposely omits information pertaining to the refunds for the C4ISR systems the Coast Guard is entitled to recover. Instead, the IG transparently and boldly pins nearly everything on Northrop and completely omits any reference to the 123 C4ISR issues. These problems relate to safety and security problems, huge unjustified expenditures of money, and massive cover-up. This means it will be much harder for the government and the taxpayer to recover the Coast Guard's investments in Lockheed-Martin systems designs. Why would the DHS IG do this?
(First, I want to say that the DHS IG's office did an excellent job when they responded to my request for help back in 2005. I feel the assigned auditors did a great job. Unfortunately, their higher-ups would not permit the auditors to make sure the record was complete and accurate. Now they have unfortunately gone too far and actually manipulated the record in a manner that is not consistent with the facts.)
I believe the report reveals a significant level of panic and desperation from the contractors and certain government officials, who are trying to shield their roles in the ordeal. While the report appears to sabotage my federal lawsuit, which I filed to recover funds for the American people and to punish those who committed fraud (and more), it also emboldens me. It tells me that the case on behalf of taxpayers is very strong. It also tells me that the Coast Guard and the contractors are desperate to make this entire fiasco go away. Of course, I may have to treat some senior government officials as hostile witnesses to prove the cover-up and fraud. So be it. They should not have betrayed their public positions of trust.
The DHS IG report left out chronic, ongoing, long-term problems, which are far more damaging than those that have already been widely reported. These safety and security problems incurred huge, unjustified financial expenditures and were hidden under a massive cover-up.
The C4ISR systems, particularly topside equipment, should have been listed in the DHS IG's report. As proof of this, I have documentation that:
- On June 5, 2007, the Coast Guard sent a letter to the Integrated Coast Guard System (ICGS) adding non-conforming 123 C4ISR equipment to the refund list; an attachment listed dozens of items that did not conform because, in bad weather, they would disable critical communication and navigation systems.
- The Coast Guard asked for all eight of the 123s to be rejected in their entirety--the whole boat and everything on them. I have the invoices, contracts, and DD-250s (forms that documented nonconformities) that show that all of these boats were rejected in their entirety, and they asked for a return of the entire $66 million, including all of the design work for the 123s and all of the project implementation costs. This included the C4ISR systems.
- Lockheed Martin/ICGS released a press statement regarding these items saying that, at worst, they may owe $3 million for those items (though they had said the related claims were “baseless” and had “no merit”)
- The DHS IG report released in February of 2007 states that the 123 topside equipment did not meet weather survivability specifications. Further, it said that ICGS purposefully withheld that information from the Coast Guard until the summer of 2005, after the Coast Guard paid for the eight 123s.
I also have documents to prove that the DHS IG's report should have listed refunds relative to TEMPEST. For example, the February 2007 report stated that it appeared the requirements relative to TEMPEST were not rigid enough for them to fault ICGS. But, when I questioned the DHS IG's lead auditor about the errors and other relevant issues (such as the Ron Porter illegal waiver and the use of flawed classified systems that leaked classified information in Cuban waters) he told me that:
- They did not have enough time to work the case;
- They had missed key items like the ones I described;
- Their conclusions were wrong;
- They were not permitted to work the case full-time, so they were basically forced to work on it at night; and
- He agreed that their conclusion on the camera surveillance system not having to have 360-degree coverage was wrong as well.
He apologized to me. When I told him this gave ICGS cover and would effectively ensure the same problems on the National Security Cutter (NSC), he agreed that it was a concern and said he would work to get it right. But, to this day, the DHS IG has not righted that wrong. The auditor was removed from the effort. I assume he tried his best and was driven away, by his superiors, from doing the right thing.
This spring, the lead investigator for Congressman Oberstar's Transportation Committee told me he knew that the DHS IG had gotten those same areas wrong in their report--and that I had gotten it right. He confirmed what the DHS IG auditor told me and he said the auditor had also personally told him.
The investigator also told me about an episode on the bridge of one of the 123s the night before our 4/2007 hearing. He said the commandant confessed to the congressman present that he had not told the truth, had not been cooperative, and that he knew the issues existed. He apologized and promised to get it right from that point forward. Of course, this occurred while the most crucial bits of data the committee had requested from the Commandant filtered in just hours before the hearing. This after they were already weeks overdue.
What proof do I have? At this point, I will prove my case in court, which will be devastating to some contractors and government officials. As I pursue this lawsuit for the sake of taxpayers, I will have to use government officials to establish that other government officials conspired to cover up the contractors' fraud.
So, why are we here today?
A common reason prevails. It is the same reason why Lockheed did what they did, the same reason why Coast Guard leadership covered for them, the same reason why some members of Congress only put on a great dog-and-pony show. They all have to cover their poor performance.
Speaking specifically of the members of Congress, some positive things did result. While the congressional committees got attention for my issues--that may otherwise have been neglected--the root causes are still there, the Lead System Integrator's (LSI) practice has not been changed by law, no one has been held accountable, no refund has been paid, and the NSC has huge problems. Taxpayers still have to pay hundreds of millions of dollars they should not have to. Since Congress pulled up short, the contractor's involvement has only been modified slightly.
In court, I will demonstrate that rampant fraud was committed when the Coast Guard accepted and paid for the boats and systems. Of course, they were duped at the time (hence the fraud), but they righteously could have taken on the contractors at the right time. Instead, they squandered the opportunity when the light began to shine on their own performance. Instead of coming clean, the government repeated the contractor's party line that everything I said was baseless. Why? Because so much had gone wrong for so long they were afraid that they would lose their jobs, reputations, and program control. Senior people would have to answer for longstanding poor performance by their subordinates. High-level and age-old political alliances would be exposed. So they circled the wagons, all of them. As a result, the circling had to continue, as it will, on every ship they would make for 20 years.
When the DHS IG said I was right about the topside equipment and low-smoke cables, the Coast Guard changed course and requested refunds for those items. Then, the DHS IG got it wrong. When the DHS IG negated my accusations about TEMPEST and the cameras, the contractors and Coast Guard jumped all over it, using this to cover and justify their actions, past and future.
Though the DHS IG was wrong, the Coast Guard and its contractors were forced to use the same basic designs going forward--on the NSC. Accepted or “waived” failures enabled ICGS to make the case that they met spec or that the spec came up short. Actually, ICGS was legally bound by the “system of systems” requirement to repeat designs on the ships that shared systems. Further, you don't change what isn't wrong. To keep up the fraudulent charade and avoid scrutiny, they couldn't risk changing anything that wasn't officially wrong. This is why the Coast Guard treated me like a pariah. Instead of thanking me for my help and using the opportunity to help themselves, they shunned me and said all my original claims were baseless. (It was later proven that I was correct and the Coast Guard and its contractors were wrong.) As a result, I doubt the Coast Guard will ever push for the refund. Unless Lockheed and Northrop volunteer to settle, the Coast Guard is not likely to push them. Their main focus now is to cover up their own incompetence and, then, their culpability in enabling the fraud. If they pushed, the contractors would protect themselves by pushing back--and outing the Coast Guard. They can't afford to go that route.
What about the Department of Justice (DoJ)? Why wouldn't they take the case and protect taxpayers? Possibly, as in other cases, the DoJ simply does not have the manpower to push this case forward. I am told they can take only 25% of the justifiable cases they investigate. That said, other possibilities may also be at work. Lockheed's lead council is James Comey, a Justice Department “hero” and former deputy attorney general. Many people who used to work for him are still in the organization, and they have their own career aspirations. They would not want to ruffle his feathers.
I have a 2006 letter, hand-signed by Comey, who says the Coast Guard was informed about every issue and had no objections with the program. Of course, this was before the DHS IG said Lockheed purposefully withheld data, and before the Coast Guard asked for the refund. This letter, therefore, may demonstrate that counsel is ill informed, or less than competent, or, perhaps, it proves fraud. (For more, just wiki James Comey.)
Where does this leave us? I assume that these government agencies and individuals will be beyond frustrated with me. But I am beyond caring about them or that situation. My only focus is doing the right thing for the Coast Guard and the United States of America. And I eagerly await telling my story to anyone that wants to hear the truth. The synopsis: “Government officials and the world's largest defense companies put the country at risk post-9/11, wasting hundred of millions--maybe billions--of taxpayer dollars, all to avoid admitting their mistakes.”
Unfortunately, I am the only party actively pushing for the refund and for contractor accountability. Frankly, it's an awful lot for an American citizen to have to do, when all the people who have the power, resources, and responsibility to secure the country bow out--and ignore their promises to act according to the highest ethical standards.
I don't expect them to be perfect. People, including myself, make honest mistakes all the time. The issue is intent. What did these people intend to do? What were their motivations? And what are the ramifications for those they serve--the citizens of this country? With conscious choice, they had the wrong intentions. For that, I will take them to task.
-- Michael DeKort