Justice for Some

Noticeably absent from any of Webster’s numerous definitions of "Justice" is any mention of favoritism.  In fact, if you used the following definition of justice: "The quality of being just, impartial, or fair," favoritism could almost be considered an antonym of Justice.  That said, you almost can’t help but laugh at the irony of the Department of Justice receiving two letters on Wednesday from Senator Claire McCaskill, questioning whether or not favoritism played a role in the allocation of two of their FY 2007 competitive grant programs.

Those letters were announced in a press release which questioned the competition, or lack thereof, of both the Juvenile Justice and Delinquency Prevention Grant Program and the Edward Byrne Memorial Discretionary Grant Program. The former grant program has received a fair amount of attention already, Youth Today published a great story documenting the seemingly arbitrary nature in which OJJDP Director Robert Flores awarded the Juvenile Justice grants.  That story led to a subsequent letter of inquiry (pdf) from Representative Waxman to the Office of Juvenile Justice and Delinquency Prevention.

However, prior to McCaskill’s letter (pdf), the latter Edward Byrne Memorial Discretionary Grant Program had not received any public scrutiny to the best of my knowledge.  Although the Byrne Discretionary Grant Program has flown under the public radar, it has been something that POGO has been looking into for the past couple of months.

POGO is eagerly awaiting the Department of Justice’s response to Senator McCaskill’s letter regarding the Byrne Discretionary Grants.  If, in fact, it turns out that those grants, like the OJJDP grants, were awarded through favoritism rather than competition, it would raise some serious questions about the competitive grant process in general at the Department of Justice.

-- Jake Wiens

Note: If there are any FY 2007 Edward Byrne Memorial Discretionary Grants Program applicants that have anecdotal evidence of grant mismanagement, please call Jake Wiens at (202)-347-1122.

All Thumbs

A fascinating new angle on the Scott Bloch story has just been broken by Ari Shapiro on NPR.  Shapiro is reporting that part of the search warrant served on Bloch on Tuesday included a physical search of Bloch himself in order to seize his computer thumb drive.  In fact, the agents seized two thumb drives from him, according to Shapiro's and POGO's sources.

Shapiro further reports that before having his hard drive "scrubbed"€ by Geeks on Call a couple of years ago, Bloch first downloaded certain files onto the thumb drives.  He has said he had the computers' hard drives erased in order to get rid of a virus.

If Bloch is found to have lied to investigators--whether FBI agents, OPM Inspector General investigators, or staffers of the House Committee on Oversight and Government Reform who interviewed Bloch earlier this year--then it's possible he could become the latest example of that old Washington adage that it's always the cover-up that gets you in the end.

-- Beverley Lumpkin

Do As I Say, Not As I Purchase

Loyal readers of this blog might recall a recent Government Accountability Office (GAO) audit that found widespread abuses of the purchase card program throughout the federal government (e.g., the luxurious steak-and-cocktail dinner hosted by U.S. Postal Service employees that cost taxpayers over $13,000).  But if the GAO report didn't convince you that federal agencies need to do more to strengthen accountability in their purchase card programs, maybe this week's headlines will change your mind.

One of the more ironic stories of purchase card abuse comes to us from Milwaukee, Wisconsin, where a U.S. Forest Service employee, Suzanne Poetz, has pleaded guilty to stealing $300,000 from her agency's program.  As part of her plea, Poetz admitted to over 150 instances of theft.  But the best part of all?  In 1998, Poetz received a Hammer Award from Vice President Al Gore--for developing the Agriculture Department's purchase card program.  (The Hammer Awards were given to federal employees whose work "resulted in a government that works better and costs less").

Another example of purchase card abuse was highlighted in the Houston Chronicle over the weekend.  A review by the Chronicle showed that NASA employees have used their purchase cards to pay for iPods, video games, jewelry, karate gear, and even clothes from the agency's headquarters.  In addition, some agency employees may have broken the law by not holding competitive bids for larger purchases.  As POGO's Scott Amey pointed out, "You have to ask: is somebody trying to get around competitive requirements?"

POGO has long argued that inadequate oversight in the purchase card program exposes federal agencies to wasteful and fraudulent expenditures.  We've also issued a number of recommendations for improving oversight and accountability in the program.  Hopefully these latest scandals will serve as yet another wakeup call for agency officials throughout the government.      

-- Michael Smallberg

Over and Doan With

On Tuesday, it was reported that Lurita Doan, embattled head of the General Services Administration, was forced to resign by the White House. She made the announcement to colleagues in an e-mail. The GSA issued a press release the next day.

Doan was appointed GSA Administrator in May 2006 and almost immediately began attracting controversy. She landed on POGO's radar within a matter of weeks with a high-ranking agency appointment that reeked of cronyism. Months later, we learned of her dislike for inspectors general, whom she reportedly compared to terrorists.

Things really started going downhill for Doan in 2007 with allegations of procurement improprieties and an Office of Special Counsel determination that she violated the Hatch Act by improperly using GSA resources to help elect Republicans. Doan's March 2007 appearance before the House Oversight and Government Reform Committee bordered on the absurd, with repeated claims of having "no recollection" of the meeting at which the Hatch Act violation occurred, except that there were "cookies on the table." Her performance at that and a subsequent hearing, combined with allegations that Doan tried to intimidate employees who were cooperating with the Committee's investigation, led an exasperated Rep. Henry Waxman (D-Calif.) to call for her resignation:

Nevertheless, Doan remained on the job, looking like she would ride out the remainder of Bush's second term. But this week, she was summoned to the White House and given the axe. The question everyone is asking is: why now?

There is speculation that Doan's departure has something to do with the recent exoneration of her agency's inspector general, Brian Miller. Miller was recently cleared of misconduct allegations in two separate whistleblower investigations, much to the displeasure of Doan. It may be that Doan's ongoing public spat with Miller, on top of all of her other problems, was the straw that broke the camel's back.

What's next for Lurita Doan? It seems likely we have not seen or heard the last of Doan, who was once a very successful government contractor and deep-pocketed GOP donor. POGO will be watching.

-- Neil Gordon

Senator McCaskill Digs In on Thunderbirds Sweetheart Deal Accountability

Yesterday, Senator Claire McCaskill sent a letter (pdf) to Air Force Secretary Michael Wynne with her concerns that insufficient accountability has been taken in regards to the favortism towards Strategic Message Solutions on the Thunderbirds Air Show Production Services (TAPS) contract.  She expressed "displeasure with the level of accountability that has been meted out on those associated with contracting improprieties."  In particular, she has questions about the "details undue command influence as well as command improprieties that appear to have risen all the way to the level of the senior uniformed official in your service, Air Force Chief of Staff General T. Michael 'Buzz' Moseley."

-- Nick Schwellenbach

Email to Gen. Moseley on Thunderbirds Contract: "I cannot support burning that kind of money to fix something that isn’t broken, when I am not buying fixes to things that are broken"

Below are email exchanges between General Ronald Keys, Air Combat Command (ACC) Commander, to General T. Michael "Buzz" Moseley, Air Force Chief of Staff.  Gen. Keys expressed concern that the Thunderbirds Air Show Production Services (TAPS) contract will cost far more than Keys initially was led to believe.  He stated that he finds it tough to swallow spending "big money" on public relations--i.e. the TAPS contract--at the expense of expenditures on current aircraft needs (an especially bad problem given that many aircraft are wearing out because of the conflicts abroad and aging).  Gen. Moseley waved him off and is more concerned about messaging and branding the Air Force for PR purposes through the use of the TAPS contract.  This looks bad, real bad for Gen. Moseley. 

These emails are from pages 211-212 of the Department of Defense Inspector General's (DoD IG) investigation report (pdf) of the "improper influence" of Major General Stephen M. Goldfein on the $50 million contract with Strategic Message Solutions for Thunderbirds Air Show Production Services:

1027. November 9, 2005,
General Ronald Keys, ACC Commander, e-mailed General Moseley, Chief of Staff. Keys wrote, “Boss, we asked for bids on this capability and they have come back. I know you said ‘press’ and ‘found’ some fy ’05 right-colored money to be able to acquire this capability. However, this is turning out to be an $8M per year project… something over $40M for the FYDP, and I cannot support burning that kind of money to fix something that isn’t broken, when I am not buying fixes to things that are broken… and may not be able to even fly mail to Chicago. I plan to pass on pursuing this and it will probably cost some small termination/bid prep costs, … but I can’t see spending big money here when we are talking about stopping aircraft mods and going to 75% BOS funding. I know this was somehow wrapped up in the Strategic Comm package so wanted to know your thoughts before I proceed. RK”

1028. November 10, 2005,
General Moseley responded to General Keys,
“Thanks for the SA Ron. Let me think about this one for a bit. It does fit into my strategic communication plan in a big way. I’d ask you not to terminate anything until I can get wrapped around this one a bit more. Thanks again”

1029. November 10, 2005,
General Keys responded to Moseley,
“Right, Boss…. That’s why I gave you the head’s up. I asked my folks to hold off until after the 21st, since that bloodletting would provide rationale and also to wait until I had talked to you. No one can give me a metric on people recruited (which we may or may not need), or opinion makers touched and changed at events like these. It would enhance getting out a message, but to whom? …. And the contract as written is really more focused at putting cockpit video etc to the ground during lulls in the performance. I would rather put it against the bills coming in to stand up the Adversary Threat Group and UAV COE. Additionally, I would like to re-open the bidding on block 52s to the T’Birds… block 40s would make more sense to me as I would then have the block 50 data-link and targeting pod surrogate IRST in my aggressor fleet to replicate the threat… I don’t see thrust as a driving addition to what the T’birds do and believe we should flipflop the transfer. Having said all of that, will await your direction on the Jumbotron… know you are consumed in the QDR and believe there is not a big rush on this for a couple of weeks. I’m out at Nellis for the Aviation Nation Celebration and then on to Whiteman but am up on e-mail.
Cheers, V/R Ron”

1030. November 14, 2005,
Moseley responded to Keys, “Ron…as we discussed at CORONA…I’m working my way through a bigger set of strategic comm options. And, this has been one I’ve liked – not just for TBird reasons – but for the “messaging opportunities” if we get the right people working this for me. Hold off in killing or deciding anything until I can get some non-QDR time to reflect on this a bit more. I’m prone to support it and pay the money and drive the message we want across the spectrum of options – from Mar through Nov every year at a variety of locations (and use the TBird shows as a vehicle to get at the public).
I’m prone to support it because it offers that spring board to other venues and other outreach opportunities. This will work even better as we get more sophisticated with our “market research” and “branding/marketing.” So, my notion has been this is more than a project to support a demo team & big screens. But, give me some time and I’ll come to closure soonest. Thanks again”

-- Nick Schwellenbach

Thunderbirds Investigation -- Air Force Response

Here is the Air Force's response (pdf) to the Department of Defense Inspector General's (DoD IG) investigation report (pdf) of the "improper influence" of Major General Stephen M. Goldfein on the $50 million contract with Strategic Message Solutions for Thunderbirds Air Show Production Services.

Of note, on pages seven and eight, is a memo to senior Air Force leaders from Secretary of the Air Force Michael Wynne and Chief of Staff "Buzz" Moseley and a statement from Moseley.  Both stress ethics.

However, the word on the street is that Moseley missed getting caught in a buzzsaw in this investigation, possibly due to the standards of evidence used to determine responsibility for wrongdoing.  More specifically, we hear that the "clear and convincing" evidence standard was used as opposed to the lower "preponderance of evidence" standard (UPDATE, note: "clear and convincing" would make sense in a criminal investigation, however, because it was declined for criminal prosecution by the Nevada Assistant U.S. Attorney, it was an administrative investigation).  Moseley comes up numerous times in the DoD IG report of investigations (pdf).

-- Nick Schwellenbach

Flawed Thunderbirds Contract Tainted with Improper Influence

Back in May 2006, POGO posted a blog entry about the Air Force improperly steering a $50 million contract to produce large-scale video shows during Thunderbirds Air Demonstration Squadron performances to a company connected to senior Air Force officers. POGO noted that the Department of Defense Inspector General and FBI were investigating the contract, which the Air Force voluntarily terminated after a competing bidder filed a protest.

Almost two years later, the DoD IG has finally released its findings in a redacted 251-page report. The report concludes that Air Force Maj. Gen. Stephen M. Goldfein and others went to improper lengths to steer the contract to Strategic Message Solutions (SMS), an inexperienced and ill-equipped company that tendered a bid twice as expensive as a competing vendor's. SMS also had close contacts with senior Air Force officers and members of the Thunderbirds. The report highlights an Air Force contracting process fraught with improper influence, irregular procedures, glaring conflicts of interest, and an award decision that "did not represent the best value for the Air Force." As it happened, the Thunderbirds fiasco occurred shortly after another major procurement scandal that sent Air Force acquisition chief Darleen Druyun to prison.

The U.S. Attorney's Office in Nevada, home of Nellis Air Force Base and the Thunderbirds, declined to prosecute the case. Goldfein, who is now Vice Director of the Pentagon's Joint Staff, and four other officers not named in the report received administrative punishments.

There has been talk around Washington that IGs, Congress, the GAO, and watchdogs have demoralized government employees and are causing them to leave government service. It's funny that POGO hears from many government employees who support our efforts, who state that their frustration results from government scandals rather than the reporting of them, and who have tried to fix the system from within only to be labeled as troublemakers and the enemy (where is Bunny Greenhouse now?). Taxpayers are also demoralized and many see the federal government transforming into nothing more than a corporate machine that protects special interests rather than the public's interest. The award of the Thunderbirds contract highlights many problems--actual and apparent conflicts of interest, concerns with the revolving door, improper influence in contracting, flawed deals, and wasted money. I would love to see how anyone can blame the DoD IG for conducting its investigation and exposing a deal that wasn't benefiting taxpayers.

-- Neil Gordon and Scott Amey

Bush Legal Eagles Soar To Prestigious Private Roosts

Last week, Legal Times reported that Bush administration lawyers are finding lucrative jobs with private law firms and corporations, where salaries can reach "all the way to comfortably within seven figures," which is far higher than their government salaries. In the last several months, the article notes, more than a dozen executive branch lawyers have struck gold. Deputy Attorney General Paul McNulty is now a partner at Baker & McKenzie. Assistant Attorney General Rachel Brand is now at Wilmer Cutler Pickering Hale and Dorr, where her co-worker is former Bush counsel Reginald Brown. Federal Trade Commission Chairman Deborah Majoras became general counsel at Proctor & Gamble.

Of course, many of these officials came to the administration from the same top-shelf law firms and Fortune 500 companies, so we're merely witnessing a full turn of the revolving door. Before her government service, for example, Majoras was a partner at Jones Day. Former Acting Attorney General Peter Keisler returned to Sidley Austin, which counts at least five other ex-employees still working in the executive branch. Former Department of Homeland Security general counsel Philip Perry jumped back and forth between the administration and global powerhouse Latham & Watkins several times. He tells Legal Times that attracting clients to his firm gets easier with each jump. (Perry's rainmaking skills are no doubt aided by the fact that he is also Vice President Cheney's son-in-law.)

However, some of Bush's legal eagles are having a tougher time cashing in. Sunday's New York Times informs us that since resigning last August, Bush's scandal-tainted former Attorney General, Alberto Gonzales, hasn't been able to land a full-time job. By contrast, readers of this blog are all-too-familiar with the good fortune of Gonzales' predecessor, John Ashcroft.

POGO realizes that the revolving door is a complicated issue. People need to be able to earn a living, but government officials should not be allowed to cash in on their positions to the detriment of the public. Federal conflict of interest and ethics laws need to be strengthened so that a proper balance can be maintained.

-- Neil Gordon

Feds Reverse Course: Some Crime Not OK

It appears that the Office of Management and Budget is ready to remove one of the two loopholes in its proposed rule (pdf) on contractor ethics and integrity. The proposed rule requires, among other things, the timely disclosure of a violation of federal criminal law in connection with the award or performance of any contract or subcontract. Failure to make a disclosure can result in suspension or debarment from future government contracts. Sounds great, but the proposed rule as written won't apply to contracts and subcontracts for commercial contracts and for work performed entirely outside the U.S.

Attorney General Michael Mukasey and Senator Grassley (R-IA) have voiced their displeasure with the loophole that would have exempted contractors performing abroad from the disclosure requirement. In essence, they agree that all contract criminal activity should be treated the same no matter where the contract is performed.

POGO agrees that the overseas contracting exemption should be removed from the proposed rule. We also wonder if the commercial item exemption should be questioned. The definition of commercial has been stretched to the limits, costing taxpayers money. Is there any reason why commercial contracts should fall under different rules, at least when were talking about criminal activity?

I know that contractor supporters argue that the contracting system adds red tape, scaring off commercial businesses that attempt to bring competitive, creative, and innovative supplies and services to the government. But is that really the case? Has anyone looked at commercial contracts to figure out the percentage offered by traditional verse nontraditional contractors? Previous government studies of OTAs (other transaction authority) revealed that the majority of work (72% of the research and 97% of the prototype OTA funding, see p. 15 (pdf)) was performed by traditional contractors. Should we provide so many breaks to commercial item/service contractors, especially when it involves criminal behavior?

-- Scott Amey

AEY & Efraim Diveroli: Subject to the Foreign Corrupt Practices Act?

Based on my quick Google search of the web for AEY, Efraim Diveroli and "Foreign Corrupt Practices Act," I haven't seen anyone ask the question (though someone may have): Is Efraim Diveroli's alleged bribery of Albanian government officials, if true, a violation of the Foreign Corrupt Practices Act?  It seems that it would be the case.  According to the New York Times:

As Mr. Diveroli began to fill the Army’s huge orders, he was entering a shadowy world, and in his brief interview he suggested that he was aware that corruption could intrude on his dealings in Albania. “What goes on in the Albanian Ministry of Defense?” he said. “Who’s clean? Who’s dirty? Don’t want to know about it.”

The way AEY’s business was structured, Mr. Diveroli, at least officially, did not deal directly with Albanian officials. Instead, a middleman company registered in Cyprus, Evdin Ltd., bought the ammunition and sold it to his company.

The local packager involved in the deal, Mr. Trebicka, said that he suspected that Evdin’s purpose was to divert money to Albanian officials.

The purchases, Mr. Trebicka said, were a flip: Albania sold ammunition to Evdin for $22 per 1,000 rounds, he said, and Evdin sold it to AEY for much more. The difference, he said he suspected, was shared with Albanian officials, including Mr. Pinari, then the head of the arms export agency, and the defense minister at the time, Fatmir Mediu.

...

The conversation, he said, showed that the American company was aware of corruption in its dealings in Albania and that Heinrich Thomet, a Swiss arms dealer, was behind Evdin.

...

Mr. Diveroli recommended that Mr. Trebicka try to reclaim his contract by sending “one of his girls” to have sex with Mr. Pinari. He suggested that money might help, too.

“Let’s get him happy; maybe he gives you one more chance,” he said. “If he gets $20,000 from you ... ”

At the end, Mr. Diveroli appeared to lament his business with Albania. “It went up higher to the prime minister and his son,” he said. “I can’t fight this mafia. It got too big. The animals just got too out of control.”

 

Perhaps Chairman Waxman should push the issue at his upcoming hearing.  Seems the Justice Department's Fraud section could have a field day if it looks into this, if hasn't already started to.

-- Nick Schwellenbach

Contractors are more than a shadow government

On March 10, the Government Accountability Office (GAO) publicly released Defense Contracting: Additional Personal Conflict of Interest Safeguards Needed for Certain DOD Contractor Employees. That report found that contractors have flooded the Defense Department, accounting for more than 50% of the combined DoD workforce in 15 offices.

Contractor employees are providing custodial and landscaping services as well as services related to preparing budgets, developing and interpreting regulations, creating contract requirements, advising or assisting on award decisions, and determining award fees—all permitted under FAR Subpart 7.503(d).

One problem that arises involves the lack of conflict of interest laws that apply to contractor employees. Although civil servants are governed by many laws and regulations preventing personal conflicts, very few of those restrictions apply to contractor employees.

I realize that some contractors have their own internal policies that might prevent and detect any possible conflicts, but is that enough? Some agencies are including contract clauses that prevent personal conflicts, but is that enough? Federal employees can do jail time for certain violations, while a contractor employee might be suspended or fired. Does the wide gap in both restrictions and penalties jeopardize the integrity of the contracting system—especially when contractor employees support and influence DoD decisions?

-- Scott Amey

McCain Didn't Go in the Tanker

I generally simmer with a level of outrage about Washington goings-on, but the last 48 hours have caused me to boil over. Partisan attacks on Senator John McCain for his yeoman work investigating the Boeing tanker lease are intellectually dishonest. Yes, McCain is running for President, but the partisan attacks shouldn't be pro-corruption. Let's make no mistake about how underhanded the Boeing Tanker Lease deal was. When POGO did its 2002 investigation, Fill 'Er Up: Back-Door Deal for Boeing Will Leave the Taxpayer on Empty, we had no idea of the outright criminal behavior behind it. We just knew the taxpayers were getting screwed. It was Senator McCain's investigation that uncovered the secret deal: a Pentagon official was negotiating jobs for herself and her family with a Boeing executive in exchange for the multi-billion dollar Air Force contract. They both went to jail for it (see here and here).

What are the people who are attacking Senator McCain for his investigation thinking? That it would have been better if he had taken the easy road, held his nose, and looked the other way, as the rest of Congress did--even though the taxpayers would have been the losers? It is a shame that, after the Air Force competition between Boeing and Northrop Grumman/Airbus, a lot of American jobs may be lost, but the alternative is infinitely worse--accepting corruption as a part of doing business.

As Steve Pearlstein of the Washington Post wrote,"the message it would send to every contracting officer in every government agency is that if they know what is good for their careers, they will put political consideration ahead of getting the best value for the American taxpayer."

I couldn't have said it better myself.

-- Danielle Brian

35 Ways to Say "Corrupt": Rep. Renzi Indicted for Insurance Fraud and Shady Land Deals

Hats off to our friends at Taxpayers for Common Sense (TCS), who helped uncover and publicize the dubious land exchange that led to Rep. Rick Renzi's (R-AZ) recent indictment.  In case you missed the news over the weekend, Rep. Renzi was indicted late last week by a federal grand jury on 35 counts of corruption.  As reported by the New York Times and Washington Post, Rep. Renzi was under investigation for stealing money from his insurance company's clients and orchestrating a federal land swap that benefited himself and a former business partner, among other crimes. 

As a Member of the House Natural Resources Committee, Rep. Renzi essentially forced his constituents to purchase land owned by his former business partner, James Sandlin, who owed Rep. Renzi money from a previous land swap.  According to the indictment, Rep. Renzi received $733,000 from Sandlin for helping to engineer the deal, and in the process, "deprived the citizens of Arizona of his honest services as a United States elected representative." 

TCS has frequently criticized this type of legislated land exchange, which leaves little room for public oversight and tends to benefit private interests. 

-- Michael Smallberg

Rep. Wicker's Unmanned Aerial Pork

On March 22, 2007, Rep. Roger Wicker (R-MS) requested, in a letter to the chair and ranking member (pdf) of House Appropriations, an earmark for a little-known aerospace company to develop an unmanned aerial vehicle (UAV) project in his district. The company, Aurora Flight Sciences, has been growing rapidly and now looks set to expand further, in part a result of their cozy relationship with Rep. Wicker. The congressman himself may soon get a promotion as well. With the recent announcement of Sen. Trent Lott’s (R-MS) retirement at the end of the year, some speculate that Mississippi Governor Haley Barbour is likely to appoint Rep. Wicker to replace him until a special election is held next November.

The earmark in question ultimately appeared in the FY 2008 Defense Appropriations bill with support on the Senate side from Sen. Lott and Thad Cochran, according to data compiled by Taxpayers for Common Sense. Listed under Army Research, Development, Testing & Evaluation (RDT&E), it designated $6 million for Aurora’s Orion High Altitude Long Endurance UAV, which is currently under development in collaboration with Boeing’s Phantom Works office.

Additional research reveals that Rep. Wicker and Aurora have benefited each other for some time now. Aurora funded a plane flight (pdf) in 2005 for Rep. Wicker from their headquarters in Manassas, VA to Starkville, MS. Then during the 2006 elections, Aurora was the top contributor to Rep. Wicker’s campaign, giving a total of $13,000 according to Opensecrets.org. Last but not least, Rep. Wicker’s former chief-of-staff, John Keast, left the congressman’s office in 2006 to work for Cornerstone Government Affairs, where, as of August, he’s been paid $60,000 to lobby Congress on defense appropriations for Aurora.

Aurora’s Orion project began last year at Mississippi State University’s Raspet Flight Research Lab in Starkville, MS. At that time, the company also began construction of a new production facility for Orion UAVs at the Golden Triangle Regional Airport in nearby Columbus, MS. The production facility opened in May of this year and Reps. Wicker and Chip Pickering spoke at the ceremony.

Aurora has won three multi-million dollar federal contracts over the past six months, as pointed out by Rep. Wicker in an Aurora press release last month. At least two, and possibly all three, relate to the Orion project and were awarded by the Army’s Space and Missile Defense Command and the Air Force Research Laboratory.

In addition to the earmark, contracts, and production facility, Aurora has also recently expanded its high-level staff. In June of this year, Dan Brady joined the company as VP of Aerostructures. He formerly worked as a director at Vought Aircraft Industries, managing activities related to Bell and Boeing cargo aircraft (most likely the V-22 Osprey), and prior to that, Brady worked at Northrop Grumman. Last month, former Commander of US Special Operations Command (SOCOM) and Army General Bryan “Doug” Brown joined Aurora’s Board of Directors. General Brown had retired from SOCOM earlier this year.

Aurora Flight Sciences, headquartered in Manassas, VA, has facilities located in Virginia, West Virginia, Massachusetts, and Mississippi. According to their most recent contract filings with the Federal Procurement Data Service (FPDS), Aurora has 267 employees and annual revenues of $32,000,000.

-- John Pruett

Cookie and Buzzy

Remember the cozy little Blackwater-Krongard picture we drew for you a month or so ago?  Well, it just got cozier.  Today, Chairman Henry Waxman, of the House Oversight and Government Reform committee, revealed that State Department Inspector General Howard "Cookie" Krongard's brother, A.B. "Buzzy" Krongard, sits on Blackwater's advisory board.  Cookie's outfit, the State Department OIG, is involved in investigating Blackwater.  Initially he denied that his brother was on the board, but after calling him, Cookie discovered that Waxman's charge was, in fact, true.  E-M-B-A-R-R-A-S-S-I-N-G. He then said he would recuse himself from all Blackwater matters in his office.

UPDATE: Spencer Ackerman at TPM Muckraker caught a big one.

 

-- Nick Schwellenbach

New Details on Largest Single Iraq War Bribery Case Yet

The New York Times has a front page story that both humanizes an Army officer "accused of orchestrating the largest single bribery scheme against the military since the start of the Iraq war" and takes you through some of the institutional breakdowns that make corruption in defense contracting more likely.  The systemic weaknesses detailed in the article were:

• "Military officials said a major assigned to award such large contracts for the Army Contracting Agency should have at least 10 years of experience in 'broad acquisition,' a minimum of four years of direct contracting experience and annual ethics training. But the procurement workload from the Iraq war grew so big so fast that the Pentagon was forced to rush people with virtually no training or experience into some of its most complicated contracting jobs, Army officials said."
• "Oversight was virtually nonexistent by design. There were no auditors at Camp Arifjan, and contracts worth more than $500,000 were the only ones requiring review in Washington. Most contracts were written for about $100,000. It was also common for contracting officers to use 'blanket purchase agreements,' allowing them to open a line of credit with a company with little more than a promissory note, much like a customer at a small-town grocery store."
• "Ideally, Army officials said, the purchasing cycle would be divided among at least three contracting officers. One would take an order for supplies from a unit commander and seek bids from companies to fill the order. Another would award the contract, and a third would oversee delivery of the goods. That system, officials said, would allow each contracting officer to serve as a check on the others."
• "At Camp Arifjan, a single contracting officer handled all three parts of the process, giving the officers broad discretion and creating opportunities for unit commanders to join conspiracies by inflating their troops’ needs. What resulted, said Mr. Young, the Army Contracting Agency director, was 'a web of deceit.'"

In a sidebar, the story also tallies up charges filed against 29 people for corruption in Iraq and Afghanistan.  I've posted the NYT sidebar image here, then, according to its tally, quickly downloaded some (not all) of the original indictments/complaints/information in each of the cases from PACER and posted them below, roughly in the order they're listed in the sidebar image.

• Criminal complaint (pdf) as to Maj. John Lee Cockerham;
• Indictment (pdf) of Col. Curtis G. Whiteford, Lt. Col. Debra M. Harrison, Lt. Col. Michael B. Wheeler, William Driver and Seymour Morris, Jr. (Phillip Bloom, Lt. Col. Bruce D. Hopfengardner (information (pdf)), Robert H. Stein are listed as co-conspirators);
• Criminal complaint (pdf) as to Gheevarghese Pappen;
• Information (pdf) on Chief Warrant Officer Peleti Peleti Jr.;
• Indictment (pdf) of Bonnie Murphy;
• Information (pdf) on Samir Mahmoud;
• Indictment (pdf) of Jeff Alex Mazon and Ali Hijazi;
• Information (pdf) on Glenn Allen Powell;
• Criminal complaint (pdf) as to Faheem Mousa Abdel Salam;
• Criminal complaint as to Mohammad Shabbir Khan (pdf) and Zubair Khan (pdf) and information on Stephen L. Seamans (pdf);
• Indictment (pdf) of Jesse D. Lane Jr.;
• Information (pdf) on Christopher J. Cahill.

-- Nick Schwellenbach

Office of Special Counsel Update II

The OSC’s reauthorization bill passed handily in Subcommittee this morning (for more see Office of Special Counsel Update I) and represents a great victory for good government groups and whistleblowers. In the meantime, Roll Call reports that House Oversight and Government Reform Committee Ranking Member Tom Davis sent a letter to Bloch yesterday (pdf) raising more questions about his keystone cops investigation into Karl Rove and the White House.

The letter noted that “Sources familiar with contacts between the White House staff and your office have told Committee staff that lawyers from the White House Counsel’s office conferred with Amber Bell Vail and Ana Galindo-Marrone from your Hatch Act unit regarding the content of PowerPoint slides used by officials from the Office of Political Affairs. Ms. Vail and Ms. Galindo-Marrone, according to our sources, provided advice regarding the content of White House political presentations.” In other words, the Office of Special Counsel may have provided legal advice to the White House about the controversial briefings he is investigating before they happened. Davis notes: “Investigations of matters on which you had previously given advice would be entirely improper.”

The letter follows up on a trail of correspondence between Bloch and Committee (pdf) in which Bloch claims he has no records responsive (pdf) to the Committee’s request and even if he did they would be confidential anyway. Staff for Committee Chairman Waxman told Roll Call that they did not join the letter yesterday because Davis’ staff would not make their sources available for questioning to the majority.

-- Beth Daley

Office of Special Counsel Update Part I

Tin cup in hand, Special Counsel Scott Bloch appealed to the news media this week to cover his plight. His story? Neither the Congress nor the Office of Management and Budget would give the Office of Special Counsel (OSC) the $3 million in additional funding Bloch claims is needed to finish off his investigation into Karl Rove’s secret email accounts and White House political briefings that may have violated the Hatch Act. 

Meanwhile, at today’s meeting of the Subcommittee on Federal Workforce, Postal Service, and the District of Columbia, it is expected that legislation to reauthorize the Office of Special Counsel (and the Merit Systems Protection Agency) will pass with bipartisan support. That legislation represents a last ditch attempt to reform the dysfunctional OSC, including provisions which:

• Shorten the usual reauthorization period from five years to three years, an obvious expression of Congressional displeasure with the OSC;    
• Allow OSC employees to “blow the whistle” on the Special Counsel by appealing to the President’s Council on Integrity and Efficiency;    
• Restore some democratic participation and transparency by requiring that the OSC publish regulations on how it pursues whistleblower and other investigations into personnel violations;    
• Mandate that the Special Counsel “has professional experience that demonstrates an understanding of and a commitment to protecting the merit based civil service”;    
• Require the OSC to make alternative dispute resolution available in Washington, DC again, something which had been shipped to the federal employee powerhouse of Detroit in one of Bloch’s “reorganizations;” and    
• Greatly expand disclosure requirements in order to shed light on the OSC’s activities and prevent gaming of the numbers.

Subcommittee Chairman Danny Davis should be congratulated for taking on this set of substantive reforms to improve the OSC, some of which POGO argued for when we testified a few months back. These reforms are wonderful but will not fix the “leadership problem” at the OSC. What leadership problems you ask? Read it and weep:

• OSC’s whistleblower awardee criticizes OSC’s performance;    
• Inappropriate fashion advice for women with short skirts;    
• Politically convenient leaks from the OSC;    
• The mutual investigation society between the OSC and the White House;    
• Religious beliefs which interfere with professional judgment;    
• Abysmal performance and unfulfilled promises;    
• Disparaging remarks about members of Congress and offers to “go outside”;    
• Investigations into the Special Counsel’s violation of laws he is supposed to enforce;    
• Efforts to intimidate witnesses and interfere with those investigations;  
• Calls for Bloch’s resignation or the abolition of the entire OSC from leading groups working with whistleblowers (POGO, PEER, GAP);  
• Cronyism that would make Brownie proud including Bloch’s dubious hiring of his son’s former headmaster.

-- Beth Daley

9/11: Principle versus Compensation

To some close observers of the September 11th civil litigation that is still underway nearly six years after the horrible terrorists attacks in 2001, comments in late June of this year by Judge Alvin K. Hellerstein were not just shocking and disrespectful, but reflected the lack of accountability that September 11th families have long battled. 

More specifically, some 9/11 victim families are seeking to learn through the discovery process what, if any, role the airlines and the Federal Aviation Administration (FAA) played in weakening security to make air travel faster and more convienent.  These particular families decided to pursue litigation for accountability reasons, rather than simply be content with the payout from the 9/11 Victims' Compensation Fund. However, Judge Hellerstein continues to press for resolution through settlements without discovery. 

While explaining his thoughts on principles versus compensation in support of his push for settlements, Judge Hellerstein said on June 25 this year, "It is very crass and it probably will come back to be critical of me, but there is an expression that is sometimes very useful, 'Money is the universal lubricant.'  It makes it easier to go on with one's life."

Judge Hellerstein further explained his view, "Somehow we need to get past September 11, 2001 as a country and individually for all clients, and I would like to bring about that possibility as best I can, as efficiently as I can in a short a period of time as I can." (a snippet of the transcript can be found here)

Former Boston Logan airport FAA security official Brian Sullivan, who is a close observer of the 9/11 families; cases, said in response, "We are a country founded on principles.  The remaining 9/11 plaintiffs seek justice through discovery and a trial.  To assume that compensation can dissipate their principles, and ease their pain, is an assumption the judge shouldn't make.

"Al Qaeda and their Islamic Fundamentalist Extremist brethren are fanatically dedicated to their cause.  If money can compromise our principles, they have us defeated before we've even begun to fight," he added.

Also at issue, complicating discovery in court are information security barriers--notably use of the Sensitive Security Information (SSI) label--that the FAA and the Transportation Security Administration (TSA; an inheritor of many of the FAA's records) have thrown up, frustrating access to information.

Sullivan also said, "The Sensitive Security Information designator is supposed to be used to protect information in the interests of national security, not as a shield to cloud government and/or airline negligence and incompetence....This has complicated and obfuscated the process, as the plaintiffs continue to battle for information in disovery and has been the main reason liability trials have been delayed for going on six years."

-- Nick Schwellenbach

THE COURT:  I learned long ago as a lawyer that many

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        1    cases of principle stop being cases of principle when there are

        2    elements of expense or recovery that are presented.  I have had

        3    clients come to me and say look, I want you to defend me, it is

        4    a case of principle.  Then when I presented my first bill, it

        5    stopped being a case of principle.  I think it is common

        6    experience.

        7             Similarly on the other side, people say I don't care

        8    what the recovery is, I want my day in court until someone

        9    gives them a check.  It is very crass and it probably will come

       10    back to be critical of me, but there is an expression that is

       11    sometimes very useful, "Money is the universal lubricant."  It

       12    makes it easier to go on with one's life.

       13             Out of the mundane, you can fashion something that

       14    makes a great deal of sense.  We are coming on six years from

       15    the terrible event of September 11th, 2001.  The public life is

       16    4 score and 10 if it is correct.  There is a great value in

       17    living out those years that God has allotted to each of us in a

       18    way that is most productive for the individual and for society.

       19    What happened on September 11th, 2001 is now a memory with

       20    different degrees of pain for different people, for some degree

       21    of pain for each and every American and perhaps beyond the

       22    United States of America.

       23             Each of us has a choice either to never forget that

       24    pain and have it ever present in our lives or to fashion a life

       25    beyond the pain.  If one looks at the issue in that way -- and

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        1    I suggest that it is the only way to look at it -- the question

        2    then becomes what's the fairest, the most efficient, what is

        3    the best way to get on with the rest of our lives.  It seems to

        4    me that if I were your client, Ms. Schiavo, and one day perhaps

        5    I'll be lucky enough to perhaps be your client or a client of

        6    someone else or perhaps maybe I'll be lucky, lucky to have

        7    avoided some of the terrible problems in life that brings us --

        8    in any event, if I were your client and I were presented with

        9    an opportunity to get a fair and proper disposition, I think I

       10    would jump at the chance.

       11             Perhaps if the opportunity came to Mr. and Mrs.

       12    Carstanjen with regard to the memory they have of their son,

       13    they would find the benefits of a fair and proper disposition

       14    so important and so appropriate as to go past their suffering.

       15    They have others.  They can do good for themselves and for

       16    others.  There is a value in this.

       17             In a way that I was called upon to express here, this

       18    is really what I am trying to achieve with all the settlements.

       19    I am not trying to cut values here, I am not trying to cut

       20    short any justice or compromise in any way.  I am trying to

       21    deal as best I can with a problem that is searing.

       22             Somehow we need to get past September 11, 2001 as a

       23    country and individually for all clients, and I would like to

       24    bring about that possibility as best I can, as efficiently as I

       25    can in a short a period of time as I can.

Deepwater: Government is in Deep

Reuters and other outlets report that Deepwater contractors actually had the nerve this week to send a letter (pdf) challenging the Coast Guard’s legal authority to pursue a $100 million refund for the eight patrol boats which have been deemed unsalvageable. Lockheed Martin and Northrop’s primary defense is “I told you so,” saying that it disclosed the “issues” on forms it provided to the government – known as DD250s – when the boats were delivered. Following that logic, contractors can deliver whatever they want to the government, no matter how defective, as long as they note there are a few unresolved “issues” at delivery. That doesn’t pass the laugh test.

Unfortunately, it seems Lockheed Martin and Northrop have the government over a barrel. A move last week in the House to reign in their status as the lead systems integrators on the $24 billion Deepwater contract faltered. Under the lead systems integrator model, contractors manage and oversee themselves, a model which was embraced in the 1990s, and has now led to a string of disastrous contracting failures including Deepwater. In a House Committee on Transportation and Infrastructure markup on HR 2722, the Deepwater Integrated Reform Act, Representative Steve LaTourette prevailed on a motion to allow the contractors to keep the contract for as much as another four years. Of course, it is probably just a coincidence that Representative LaTourette’s wife, Jennifer Laptook-Latourette is Vice President of a lobbying firm which represents Lockheed Martin.

Representative LaTourette adopted the industry line that the Coast Guard will not be able to assemble the team it needs to manage the Deepwater contract in a timely way. While the Coast Guard could assume the control of the contract sooner if they are capable, the onus will be on them to wrest the troubled Deepwater contract out of Lockheed and Northrop’s clutches.

-- Beth Daley

 

Update (July 5th):

Former Lockheed Martin employee Michael DeKort who saw the foibles of the Deepwater contract first hand points out that many of the problems were NOT mentioned in the DD-250s as claimed in the letter. According to Mike:

--Low Smoke cables - were mentioned and had a waiver. However, the Coast Guard Inspector General found that the waiver should not have been issued.

--Environmental failures - were never in the DD-250s even though we knew well before delivery of any of the boats. I can prove Lockheed Martin and the Coast Guard knew and kept it out of the DD-250s (I specifically asked for it to be in there). Several years later the Coast Guard drafted a waiver that they still say the Coast Guard should sign.

--TEMPEST - all the failures were not mentioned.

--Cameras - blind spots not mentioned.

New Legislation Seeks to Reform Inspectors General

Senator McCaskill (D-MO) introduced legislation in the Senate yesterday calling for greater independence for Inspector Generals in federal agencies. Representative Jim Cooper (D-TN) has introduced similar legislation in the House earlier in February this year.

The increased attention from Congress on the role of the inspector general is a reaction from a series of recent scandals and controversies that have surrounded the office. Inspectors General at the Department of Commerce, the General Services Administration, and most recently, NASA (for our executive director Danielle Brian’s testimony before a House Committee regarding the NASA IG, click here), have been under attack by Department heads or criticized that they did not maintain adequate independence from the agency that they are supposed to be overseeing. In fact, the House has held a general hearing on the independence of inspector generals and what can be improved to increase the effectiveness of the government’s first line of defense against waste, fraud, and corruption.

These recent problems have shown that something must be done to improve the effectiveness of the IG office, and POGO applauds Congressional attention to this very little-known but very important office in the federal government. A few sections of Senator McCaskill’s legislation that are particularly important:

1) The legislation will allow Inspectors Generals to use independent legal counsel instead of relying on the legal counsel provided by the agency. In order to achieve independence from the agency, IGs must have independent legal advice about how to do their job.

2) No IG can accept bonuses, since they are awarded by the heads of the agencies. Accepting these bonuses creates an inherent conflict-of-interest, since there will be a monetary incentive for IGs to compromise the performance of their job in order to curry favor with the head of the agency.

3) Finally, in the event of a vacancy, the Council on Integrity and Efficiency is authorized to recommend three qualified candidates; however, the Council is not given appointment authority.

Hopefully Congress can come up with effective amendments to the Inspector General Act of 1978 to ensure that the office of the Inspector General is up to the task of overseeing federal agencies in the 21st century.

- Michael Zhou

Greenwire Breaks Story on Griles “Community Service”

Dan Berman at Greenwire broke an important story yesterday regarding former Interior Department official Steven Griles, who plead guilty earlier this year in the Jack Abramoff lobbying scandal. Griles has asked the Judge (pdf) in his case that he be allowed to perform “community service” as a part of his sentence. The problem is, one of the two organizations with which he wants to do community service – the American Recreation Coalition (ARC) -- is actually a heavy-hitter lobby organization which apparently benefited from Griles’ time at Interior.

Environmentalists have complained about Griles’ coziness with organizations like ARC, which advocates the use of snowmobiles in national parks. Here’s Griles speaking at an event of the organization and here he is again partying up with ARC and some other industry buddies. With Griles’ proposed sentence, he’ll probably be back on the party circuit with his industry buddies. Is this really punishment?

Read the full Greenwire story, reprinted with their permission, below the fold.

-- Beth Daley

ETHICS: Griles seeks community service with motorized-recreation group

Dan Berman, Greenwire senior reporter

An organization with connections to the Interior Department, motorized recreation industry and the Walt Disney Co. is holding a position open for former Interior Deputy Secretary J. Steven Griles if he's sentenced to community service for lying to Congress in the Jack Abramoff investigation.

Griles, 59, wants three months home confinement, 500 hours of community service and a "reasonable" $15,000 fine when he is sentenced June 26. Half the community service would be with "WOW - Wonderful Outdoor World," in the position of national counselor and strategic planning coordinator. In that post, Griles would raise money, develop new public and private partnerships and conduct outreach to the government and media.

The request was part of a voluminous filing with Judge Ellen Huvelle of the U.S. District Court for the District of Columbia. The package includes 91 letters supporting Griles from former Interior Secretary Gale Norton, two Reagan-era secretaries, Idaho Gov. Butch Otter (R), Rep. Barbara Cubin (R-Wyo.), coal industry executives and a possible Senate nominee from Wyoming, among others.

"It's a small world after all," said Jeff Ruch, executive director of Public Employees for Environmental Responsibility. "The idea that Steve Griles would consider this community service suggests the line in his mind of corporate service and community service doesn't exist."

The other half of Griles' community service would be with Operation Coaches and Warriors, which assists injured veterans of the Iraq war.

"A prison sentence is not needed to punish Mr. Griles and ensure that his crime will n