IG Investigation Spurred by POGO Found Former NRC Commissioner Merrifield Violated Ethics Laws

After raising concerns more than two years ago, POGO has just received hundreds of pages of internal documents, which are a part of a Nuclear Regulatory Commission (NRC) Inspector General investigation, that outline how recently departed Commissioner Jeffrey Merrifield disregarded advice from the NRC’s General Counsel and voted on two matters that “could have potentially” financially benefited three companies—Shaw Group, Westinghouse, and General Electric—during the time he was directly involved in employment negotiations with those companies. The IG investigation found that in the two months before accepting a job created for him at the Shaw Group, Commissioner Merrifield voted both to approve China’s purchase of AP 1000 reactors (in which the Shaw Group had a financial interest) and to change criteria of emergency cooling systems that would directly benefit Westinghouse (of which the Shaw Group owned a 20 percent interest). The Washington Post has already picked up the story.

The IG investigation shows that months before he left his post, Commissioner Merrifield tore down the firewall, which he said he had set up in order to protect himself from potential conflicts of interest, and started making calls and visits to potential employers while he was still a voting Commissioner. The IG determined that Commissioner Merrifield participated in 27 final decisions (votes or opinions on policy proposals that can have binding action) that could have benefited nuclear power plant licensees or licensee contractors and “did not take effective measures to prevent a potential conflict of interest during the last 2 months of his term.” Instead, Commissioner Merrifield designed his own recusal process, which was described in the IG interviews with a former staffer as “weird” and with an industry VP as “odd.” This included verbally informing his staff of recusals but not sharing with them a list of the companies he was recusing himself from voting upon, because as the IG learned when interviewing one of Commissioner Merrifield’s staffers:

The Olympics Are Not Over for Federal Air Marshal Whistleblower

Former federal air marshal Robert MacLean has had to jump over a lot of hurdles to contest his 2006 termination for disclosing the Transportation Security Administration's (TSA) Federal Air Marshals Service's (FAMS) July 2003 plan to eliminate air marshal missions on nonstop, long distance flights for two months.  FAMS's plan to cancel these missions was an attempt to save money on costs associated with air marshals having to sleep in hotel rooms after a long distance mission.

MacLean's termination was sustained by a single charge: that his disclosure was Sensitive Security Information (SSI), an unclassified marking widely used by the TSA after the 9/11 attacks.

MacLean maintains that FAMS had originally sent out its plan in a text message to all nationwide air marshals' non-secure mobile phones, instead of their encrypted PDAs, without SSI markings.  Soon thereafter, DHS issued a terrorist advisory about a possible hijacking.  Concerned about the security implications of FAMS's plan to cut back on air marshal assignments for nonstop, long distance flights, MacLean went to his supervisors and the DHS Inspector General office.  But after his warnings fell on deaf ears, MacLean, who had 14 years of unblemished military and civilian federal service experience, made a disclosure to the media about FAMS's plan.  TSA later designated the information MacLean disclosed as SSI.  (During this time, both the Congressional Research Service (CRS) and the Government Accountability Office (GAO) raised numerous inconsistencies and weaknesses with how TSA applied SSI).

MacLean immediately appealed his removal before the Merit Systems Protection Board (MSPB).  He argued that his 2003 disclosure was protected under the Whistleblower Protection Act (WPA), and that his disclosure could not be retroactively marked as Sensitive Security Information (SSI) over three years later.  But the government argued that the MSPB did not have the jurisdiction to rule if MacLean's disclosure was SSI or not.

MacLean filed an appeal in the U.S. Court of Appeals for the 9th Circuit and waited over two years for its ruling.  This week, the 9th Circuit denied MacLean's petition, in which he had argued that TSA's SSI order violated: (1) the TSA's own regulations, (2) the Whistleblower Protection Act, (3) the Anti-Gag statute, (4) due process, and (5) the rule against retroactive administrative adjudication.  This was no big surprise, as MacLean and his attorneys knew that the "evidentiary standard" was extremely high for TSA's retroactive SSI order to be rescinded.

"This is not over," writes MacLean in an email to POGO.  MacLean will have to refile in the MSPB before October 15, 2008, and argue that disclosure of unclassified information labeling is protected under the Whistleblower Protection Act (WPA), as opposed to classified information labeled Top Secret, Secret, or Confidential.  It is important to note that the government cannot retroactively label classified information.

While the MSPB has an unbelievably awful record of ruling against whistleblowers, MacLean points out that his case may be different, given the sympathetic language in the 9th Circuit's ruling:

MacLean may still contest his termination before the MSPB, where he may raise the Whistleblower Protection Act and contend that the lack of clarity of the TSA's 2003 'sensitive security information" regulations is evidence MacLean disseminated the text message under a good faith belief the information did not qualify as "sensitive security information.

While Congress has taken some steps to limit the misuse of unclassified information markings such as SSI, POGO and other groups would like to see legislation that prohibits executive agencies like TSA from retroactively marking/labeling information with unclassified information designations such as SSI, Law Enforcement Sensitive (LES), or For Official Use Only (FOUO).

Having worked with MacLean for years, POGO understands what a loss it is for the public to have him no longer serve as a federal air marshal.  We would hate to see another loss at the MSPB for federal employees who speak out when they see fraud, waste, abuse, and negligence in the agencies funded to serve us.

-- Ingrid Drake

Don't Pack the Flak Jacket

Yesterday's Washington Times had a story that frankly made our jaws drop.  We had to check our calendars to make sure it wasn't April 1st.

Audrey Hudson reported that members of the U.S. military traveling on commercial jetliners were being forced to pay excess baggage fees--out of their own pockets!

It's not as if the troops are packing excess baggage because they can't decide whether to take their tennis or golf or scuba gear to their exotic vacation destination.  Their bags are heavy because they're filled with combat boots, body armor, and all of the other gear needed to survive year-long deployments to some of the least hospitable climates on the planet.

The airlines argue that the soldiers can seek reimbursement from the military if they complete the proper paperwork.  POGO would like to see the airline executive who thought it would be a good idea to make soldiers fill out bureaucratic forms in a combat zone.

The folks at Veterans of Foreign Wars are asking airlines to waive luggage fees for soldiers, pointing out that the required paperwork is "a lot to ask when the service member has much more important things on their minds, such as staying alive and keeping those around them alive."  An Army Vet on POGO's staff adds that soldiers are unlikely to carry large sums of money when traveling to a combat zone, and thus may find it difficult or even impossible to pay fees that can reach hundreds of dollars.

As the Times piece noted, "Most major U.S. carriers waive baggage fees for up to two bags for military members traveling under orders."  However, weight limits can also apply--US Airways charges no fee for up to 100 pounds of luggage, while Delta and Northwest allow two bags up to 70 pounds total for free.  Considering that a soldier's gear can easily weight 150 or even 200 pounds, soldiers are bound to be required to pay for that excess weight.

In fact, the airlines should be able to waive luggage fees altogether for these soldiers without breaking the bank.  Our troops are fighting for all of us--let's give them a bit of a break.

UPDATE: The Washington Times reported this morning that American Airlines will no longer charge fees for a third piece of checked baggage for active military personnel.  While this is encouraging news, it is our understanding that the other airlines have not budged on their policies.

Letters to Boeing and the Air Force on Airtech

Earlier this week, POGO sent letters to The Boeing Company and to the Air Force asking them what they were doing in response to a 2006 Army Criminal Investigation Command letter which found that Airtech International Inc. had committed fraud on aerospace manufacturers and engaged in bribery.

-- Nick Schwellenbach

Airtech - Not Simply One Decade of Illicit Behavior

POGO was provided with the following undated AP clipping we are told is from the late 1980s -- a search of Factiva for the article did not turn up any results, but the clipping appears authentic and its content was confirmed in discussions with knowledgeable parties.  It states that Airtech International, Inc. paid the government $45,000 to settle allegations that it improperly gave gifts to one Utah contractor.  Airtech's activities were discovered by the Defense Criminal Investigative Service field office in Utah during a much larger investigation into corruption in the defense industry. 

Here's the article:

POGO is interested in more details regarding Airtech's long history of fraud and bribery.  In May, along with CBS News, we exposed that the company, which provides materials used in the manufacture of composites, provided bogus materials to every major aerospace manufacturer in the world and engaged in numerous bribery and kickback schemes with its customers' purchasing agents.

-- Nick Schwellenbach

Oberstar Pushes Stronger FAA Whistleblower Office

Yesterday, the bipartisan leadership of the House transportation committee and its aviation subcommittee introduced legislation that would create a new independent Aviation Safety Whistleblower Investigation Office and institute a two-year cooling off period for former FAA inspectors.  These changes are in response to the April 3rd hearing on the excessively cozy relationship between Southwest Airlines and the FAA's Dallas office. 

FAA whistleblowers were retaliated against for seeking Southwest's compliance with mandatory inspections.  The revolving door between Southwest and FAA likely contributed to the lax enforcement -- former FAA inspectors cashed in on relationships with their old office to soften oversight and some of the current FAA employees may have gone along as they envisioned a lucrative future at Southwest.

A description of the bill's highlights from Chairman James Oberstar's office:

• Creates an independent Aviation Safety Whistleblower Investigation Office within the FAA, charged with receiving safety complaints and information submitted by both FAA employees and employees of certificated entities, investigating them, and then recommending appropriate corrective actions to the FAA.   
• Directs the FAA to modify its customer service initiative, mission and vision statements and other statements of policy to remove air carriers or other entities regulated by the agency as “customers,” to clarify that in regulating safety the only customers of the agency are individuals traveling on aircraft, and to clarify that the air carriers and other entities regulated by the agency do not have the right to select the employees of the Agency who will inspect their operations.
• Establishes a two-year “post-service” cooling off period for FAA inspectors or persons responsible for oversight of FAA inspectors before they can act an agent or representative before the agency of a certificate holder that they oversaw during their service with the FAA.
• Requires the FAA to rotate principle maintenance inspectors between airline oversight offices every five years.
• Requires the FAA to implement monthly reviews of the Air Transportation Oversight System (ATOS) database to ensure that trends in regulatory compliance are identified and appropriate corrective actions are taken in accordance with agency regulations.

Whistleblowers such as former Boeing quality assurance inspector Gerald Eastman would have benefited from a working, competent and independent whistleblower office at FAA. 

-- Nick Schwellenbach

CBS Tonight: Bogus Composite Materials Supplied to "Every Aircraft Manufacturer in the World"

I'm scheduled to appear on CBS News at 6:30 p.m. tonight to discuss an alarming case of government fraud involving Airtech International, Inc., a major supplier of commercial and military aircraft materials.  An Army memo from September 2006, obtained by POGO and CBS News, shows that Airtech supplied non-conforming materials to "every aircraft manufacturer in the world" from 1997 to 2005, endangering both civilians and soldiers.  In addition, the memo reveals that Airtech obtained preferential treatment from a number of Department of Defense contractor employees in exchange for bribes and kickbacks.

-- Nick Schwellenbach

UPDATE: Click below to watch a video of the CBS News report.