Facepalm Ratings Guide= Even if there's no conflict of interest, appearances matter.
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By JOE NEWMAN
Global consulting firm Booz Allen Hamilton is paying the price for playing fast and loose with federal contracting rules. But it's how Booz Allen's San Antonio operations may have obtained information from a competitor that takes our facepalm ratings to a new low.
According to a Feb. 6 Air Force memo, in April 2011, Booz Allen hired retired Air Force Lt. Col. Joselito Meneses, who had served as deputy chief in the Information Technology division of the Medical Support Agency under the Office of the Air Force Surgeon General.
On his first day of work for Booz Allen, Meneses arrived with a hard-drive containing non-public information he had obtained during his Air Force tenure.
Some of the data on the drive was proprietary information from one of Booz Allen's competitors, which the San Antonio office used to help shape its own bid to the Air Force, according to the memo.
As a result, the Booz Allen's San Antonio unit has been suspended and recommended for debarment. The company fired Meneses after a whistleblower brought the activity to the attention of company officials.
Meneses shows how the revolving door can corrupt the federal contracting system by allowing companies to get unfair, competitive advantages when they hire former government employees. The case also shows how former federal officials are motiviated to use their insider knowledge to help their new employers. Meneses knew better. He gets our maxium four-facepalm rating.
Rep. Grimm Faces Accusations of Improper Fundraising
We've raised questions about Rep. Michael Grimm's efforts to gut protections for financial sector whistleblowers, and how it appears the only people who would benefit from such legislation are Grimm's backers on Wall Street.
Now, Grimm (R-NY) is facing much more serious allegations of influence peddling and improper fundraising. According to a New York Times story, Grimm enlisted the help of Ofer Biton, an Israeli citizen, to help raise more than $500,000 from the followers of a New York rabbi.
From the Times story:
Three of the rabbi's followers said in separate interviews that Mr. Grimm or Mr. Briton told them that the campaign would find a way to accept donations that were over the legal limit, were given in cash or were given by foreigners without green cards.
For his part, Grimm strongly denied any wrongdoing: "Any suggestion that I was involved in any activities that may run afoul of the campaign finance laws is categorically false ..."
While it's proper to withhold judgement on the most serious allegations, at the very least, it appears Grimm used bad judgement in enlisting Biton, a foreign national, to help raise campaign cash. Biton is now under federal investigation over claims that he embezzled millions of dollars from the rabbi's congregation. That's worth at least two facepalms.
Trading on the Public Trust
Alabama Rep. Spencer Bachus called it just a "hobby"—one he says he set aside once he became chairman of the Financial Services Committee in November 2010. But his prior passion for trading stocks and making market bets is a fine example of why Congress needed to pass the STOCK Act, post haste.
Bachus's trades are the subject of an investigation by the Office of Congressional Ethics, which according to The Washington Post has notified Bachus that there's probable cause to believe that insider trading took place.
The Washington Post writes, "In recent years, Bachus has made numerous trades, some of them coinciding with major policy announcements by the federal government and industries under his congressional oversight."
We expect our elected officials to hold themselves to the highest standards. In fact, it's important that they strive to avoid even the appearance of a conflict of interest. In Bachus's case, regardless of the outcome of the ethics investigation, he would have been well-advised to have avoided a hobby that allowed him to benefit financially from industries he workes so closely with.
How to Turn Earmark Recipients into Paying Clients
Hmmm . . . let's see, who can I approach that might feel a sense of, let's say, gratitude for my work in Congress? Well, there's the town of Hull, Massachusetts. I mean, I did create a $1.7 million earmark for that little wind project of theirs.
The town of Hull it turns out has hired Delahunt's firm to help develop that very same wind energy project. The town's contract with Delahunt calls for it to pay the Massachusetts Democrat about $90,000 over six months. The New York Times reported that at least three other clients have similar ties to Delahunt—meaning he helped them secure millions of dollars in federal aid while he was in Congress.
His clients include the Mashpee Wampanoag Indian tribe, which he had helped secure $400,000 in earmarks and the city of Quincy, which had benefitted from a $2.4 million Delahunt earmark, according to the Times.
It's perhaps one of the more blatant examples of a Member of Congress cashing in on his or her public service that you'll see. While Members often leave Congress to join lobbying firms, Delahunt's actions are particularly bothersome because he's now profiting from projects he helped finance. While Delahunt told the Times he has done nothing wrong, he could have avoided any ethical dilemmas by simply not soliciting or accepting work from organizations that benefitted from his earmarks.
For Defense Contractors, the Buck Stops Here
So why are some of the country's biggest military contractors and their lobbyists pouring money into an otherwise run-of-the-mill California State Assembly race? Could it be that the candidate in this case, Patricia McKeon, is also the wife of U.S. Rep. Howard "Buck" McKeon (R-CA), who also happens to be the chairman of the House Armed Services Committee?
While Buck McKeon has blasted the original Salon report as biased and inaccurate, the California campaign finance records clearly show that Patricia has received donations from the defense industry and DC lobbying firms. In fact, Rep. McKeon's criticism of the Salon report are aimed at a few details and do not dispute Salon's report that Patricia McKeon "collected at least $19,200 from defense contractors or their registered lobbyists."
It's simply not credible to think that defense contractors and their lobbyists weren't aware that the candidate they were backing in California's 38th District was also the wife of one of their staunchest allies in Congress and who, himself, has raised tens of thousands of dollars in contributions from the defense industry this election cycle. While there's nothing that prohibits Patricia McKeon from accepting or even soliciting contributions from defense contractors, it's another example of how industry curries favor from powerful Members of Congress. Despite Rep. McKeon's protestations, there should be a real concern that defense contractors and their lobbyists are trying to influence federal public policy through their campaign contributions. We're giving the McKeons two facepalms (one for each of them).
He did His Duty. But for Whom?
Financier Allen Stanford is on trial in Texas on charges he bilked investors out of $7 billion in a Ponzi scheme. Compared to those types of losses, it’s hard to have much sympathy for the $50,000 fine that former Securities and Exchange Commission lawyer Spencer Barasch (left) agreed to pay recently to settle a conflict of interest complaint brought by the Justice Department.
While Barasch maintains he didn’t do anything wrong, an SEC Inspector General’s report offers a different view. The IG found that while heading the SEC Fort Worth enforcement office, Barasch "played a significant role in multiple decisions over the years to quash investigations of Stanford."
This might not have been an issue, except that shortly after Barasch left the SEC, he ended up as one of Stanford’s attorneys. Spencer, you get four facepalms—but only because we don’t give out five.