By ANDRE FRANCISCO
The Department of Defense Inspector General (IG) is auditing the Defense Advanced Research Projects Agency (DARPA) and looking into financial ties of DARPA Director Regina Dugan after POGO called for an investigation into potential conflicts of interest at the agency. The Pentagon IG explained the audits in a letter to POGO sent on Friday.
The audit will cover a selection of DARPA's contracts and grants from the last two years, and additionally, there will be a special look at the ties between Dugan and RedXDefense, a bomb detection firm founded by Dugan and currently run by Dugan’s father.
According to a DoD IG spokesman, "At our request DARPA has provided us a list of approximately 2,000 actions valued at $4.3 billion performed during FY 2010 and FY 2011 which include contracts, modifications, task orders for services, delivery orders for products, grants, and cooperative agreements. We are reviewing these actions to identify a reliable number of significant actions that allow for appropriate audit coverage and will also allow us to complete the project in a timely and relevant manner. We are not, however, auditing all 2,000 actions."
In addition to having family ties to the company, Dugan still has a financial relationship with RedXDefense.
“RedXDefense owes Dugan $250,000 for a “loan/note” and additionally details that she has between $151,000 and $305,000 in assets and income from RedXDefense,” we said in a May 9, 2011, letter to the Department of Defense Inspector General.
These close and significant family and financial ties could present a conflict of interest for Dugan, even though she has recused herself from the agency’s dealings with RedXDefense.
DARPA is the lead research agency for the Defense Department. The agency has helped come up with things like stealth fighters, GPS and the Internet. This work necessitates a close relationship with a community of highly specialized companies, but under the former director, DARPA had clearer lines separating its employees from the companies it worked with. A Danger Room story described the policy:
During [former DARPA Director] Tony Tether’s tenure, if there was even a slight chance that a company might bid on a Darpa research project, that firm and that program manager were disqualified to work on that particular effort. If the program manager owned stock in a defense contractor, that financial relationship had to be severed.
Now the boundaries have been relaxed, according to agency insiders. But that relaxed policy isn’t only tied to Dugan. DARPA has enjoyed an unusual amount of freedom with its $3 billion budget, primarily because the new technologies it develops aren’t asked for by the military. Instead they are developed and then adapted for military uses.
A recently retired DARPA official told Danger Room “You could pull a lot of money out of that place if you really wanted to,” adding, “there really isn’t any due diligence there.”
The audit is scheduled to begin this month as “part of a series of planned audits.” We look forward to its findings.
Andre Francisco is a POGO communications associate.
Correction: An earlier version of this post said the DoD IG audit would cover all of DARPA's contracts and grants from the last two years. The DoD IG will only audit a selection of contracts and grants from the last two years. We have updated this post with a statement from a DoD IG spokesman.