The Project On Government Oversight (POGO) Blog

Update on Nuke Insecurity at Minot

CNN reported today on a serious security incident at Minot Air Force Base:

Two officers are under investigation for lying about destroying classified missile components...

A crew member formerly from the 91st Missile Wing told the military last May that he and another officer formerly assigned to the wing didn't tell the truth about destroying classified launch devices in July 2005...

The Washington Post also ran a story on the two officers, who took home classified components for underground launch control centers--a breach that is troubling not only for its national security implications, but also for the secretive way in which it was handled.

Last month, POGO received a tip about the launch device incident.  But when reporters called for information, the Air Force denied knowing anything about it.  Now we see that the Air Force was not being entirely honest.

Instead of admitting to the investigation, the Air Force pulled a bait and switch, telling reporters about another, less serious, security breach in which officers were caught sleeping at a missile alert facility.  It turns out that the Air Force was also investigating the launch device incident, and that our source had accurately described the nature of that ongoing investigation.  We now know that the launch device incident happened in 2005, but that the investigation into the matter is only now being reported.

We know it's the Friday before Labor Day, but we are still waiting for someone in Air Force Public Affairs to apologize for misleading POGO and more than half a dozen reporters who were investigating a serious allegation of nuclear insecurity.  On the other hand, we understand that it may be hard for the Air Force to keep track of the long string of incidents involving its protection of nuclear weapons.

-- Ingrid Drake

More Breaking News from the OSC

We just learned that Jim Mitchell has been terminated from the Office of Special Counsel (OSC).  Mitchell was recently named Chief of Staff AND Director of Communications following the resignation of Deputy Special Counsel Jim Byrne.  There was no reason given for Mitchell's termination.

The loss of one of the last sane managers at OSC is not good news for anyone.  By all accounts, Mitchell has taken an impossible situation--a grand jury investigation into OSC Director Scott Bloch, FBI raids of Bloch's home and the OSC offices, Bloch's retaliation against and undermining of OSC staff and mission, and Congressional (and public interest groups) calling for Bloch's resignation, not to mention staff flight and chronic understaffing--and tried to steer the sinking ship with a genuine belief in the mission of the organization.

There are a number of talented, experienced, and loyal civil servants within the OSC ranks.  We hope some of them are given an opportunity to rise into leadership positions and bring the agency back on track.  On the other hand, who would want to try it under Bloch?  If Jim Mitchell couldn't do it...

-- Ingrid Drake

More Procurement Fraud Problems at U.S. Air Base in Afghanistan

Bagram Airfield in Afghanistan is back in the news with another alleged instance of procurement fraud.  This comes just a few months after two contractor employees at the airfield were convicted of defrauding the U.S. government in an aircraft fuel bribery scam.

This week, the Department of Justice announced that a federal grand jury in Chicago indicted two U.S. military personnel, four Department of Defense contractors, and two contracting companies in a bribery and conspiracy scheme involving three contracts worth more than $1 million to provide the airfield with cement bunkers and barriers and asphalt paving services.  If convicted, the individuals face up to 15 years in prison and fines of $250,000, and the companies face fines of up to $500,000.

Bagram Airfield underwent a $68 million expansion two years ago.  Earlier this year, two contractor employees who worked at the airfield for Kellogg Brown and Root, Inc. (KBR) were convicted of participating in a bribery scheme involving the illegal diversion and sale of $2.1 million worth of aircraft fuel.

The Department of Justice's National Procurement Fraud Task Force notches up another victory with these recent indictments.  The Task Force, a collaborative effort involving the DOJ, federal Inspectors General, and defense investigative agencies, was launched in October 2006 to promote the early detection, prevention and prosecution of federal procurement fraud.  Lately, it seems like Bagram Airfield is single-handedly keeping the Task Force in business.

-- Neil Gordon

Making Sure the Roof Doesn't Cave In on the Taxpayer

Earlier this week, POGO wrote to Department of Energy (DOE) Secretary Bodman to express concern about the lack of oversight of costs and quality at the MOX Fuel Fabrication Facility, which is being built by Shaw AREVA MOX Services, LLC at the Savannah River Site.  We were recently spurred into action when the Nuclear Regulatory Commission (NRC) issued a Notice of Violation on the construction of the MOX plant, just three days after the National Nuclear Security Administration (NNSA) praised the "successful" MOX facility construction.

Our letter called on Secretary Bodman to recommend that DOE's Inspector General or Office of Health, Safety and Security fully investigate the Quality Assurance (QA) failures that have plagued MOX and other NNSA construction projects.  We shared our letter with Representative Peter Visclosky (D-IN), Chair of the House Appropriations Subcommittee on Energy and Water Development, and Representative Ellen Tauscher (D-CA), Chair of the House Armed Services Subcommittee on Strategic Forces.

As we pointed out in the letter, the $4.8 billion MOX facility appears to be traveling down the same troubled path as other NNSA projects.  For instance, Los Alamos National Laboratory's Chemical and Metallurgical Research Replacement (CMRR) facility has been plagued by significant QA and concrete problems.  And at Y-12's Highly-Enriched Uranium Materials Facility (HEUMF), the cost has ballooned from $313 million to $549 million due to the inadequate use of rebar during early construction.  Also, Frank Munger of the Knoxville News Sentinel reported in May that a large slab of concrete on the roof of the HEUMF was incorrectly set up and had to be replaced.

-- Peter Stockton and Ingrid Drake

Faster and Cheaper, But Not Necessarily Better

According to a new report by the Equal Employment Opportunity Commission (EEOC), contractors hired to investigate federal employee discrimination complaints are doing the job faster and cheaper than civil servants--about 35 percent faster and at less than half the cost.

But are contractors doing the job better?

The EEOC report is silent on this critical issue, so once again, it's up to outsourcing supporters and opponents to fight it out in the pages of Federal Times, using mostly anecdotal evidence.

Supporters claim that taking discrimination cases out of the hands of agency investigators eliminates the problem of conflicts of interest.  As one contractor explained to Federal Times, they are an unbiased third party "not concerned with the end result."  Proponents also argue that contracting out routine cases lets agency investigators focus on "difficult" cases that involve more complex or sensitive issues.

On the other hand, opponents of outsourcing worry that, in the interest of efficiency, contractors cut corners and do not devote sufficient time to individual complaints.  Poorly investigated complaints are more likely to be dismissed.  This is especially problematic when the contract has a stipulation that rewards or punishes the contractor based on the number of investigations completed in a given time period (i.e., a quota system).  As for conflicts of interest, opponents feel contractors might have a difficult time remaining unbiased and disinterested if the discrimination cases they investigate involve the agency (or agencies) with whom they want to continue doing business.

-- Neil Gordon

Discipline Awaits for Indian Trust Officials Snagged in Corruption Scandal

In June 2008, the Department of Interior Inspector General (DOI-IG) issued a report describing how an employee at the Office of Special Trustee (OST) for American Indians steered lucrative contracts to an accounting firm whose principals lavished him with gifts, golfing trips, and a free place to live.  But after two longs months, we're still waiting for Secretary of Interior Dirk Kempthorne to decide how to handle the case. 

The firm that received the questionable contracts, Chavarria, Dunne & Lamey, LLC (CD&L), seems to have a Svengali-like hold over the agency.  Four senior OST employees have been snagged in the scandal so far: 1) Delano "Jeff" Lords, Deputy Special Trustee for Trust Services, 2) Delano's brother, Douglas Lords, Deputy Special Trustee for Field Operations, 3) Donna Erwin, Principal Deputy Special Trustee, and 4) Margaret Williams, Deputy Special Trustee for Trust Accountability.

In fact, this is not the first DOI-IG report on the OST contracting scandal.  In 2006, U.S. News and World Report highlighted the findings of an earlier report on the topic, noting:

According to the report, OST issued a $150,000 sole source contract to the Chavarria firm in October 1998 to perform trust fund accounting and consulting work. The special trustee's office modified the contract over 50 times, "increasing the value of the award to over $6.6 million, all without competition," the report says.

It says that Erwin and the Lords brothers [including Delano] did not award the contracts, but it adds, pointedly: "Interviews with the officials who were responsible for awarding the contracts revealed that they felt pressured by Erwin, Doug Lords, and Jeff Lords to award work" to the Chavarria firm.

At the time, Ross Swimmer, the head of OST, responded by giving slaps on the wrist in the form of ethics training.  But the recent DOI-IG report makes it clear that the problem has not been resolved.  In an unusually pointed statement, Inspector General Earl Devaney said he is "frustrated by the lack of accountability in this regard..."

The recent DOI-IG report details how Delano Lords "made the decision to select CD&L" to receive a contract even though a three-person evaluation team had unanimously selected Booz Allen, which submitted a bid that was $90,000 cheaper.  As the report notes, in the previous DOI-IG investigation, "Lords stated that he had never awarded, or had the opportunity to award, a contract to CD&L since he had lacked the authority in the positions that he had held.  He also stated that he had never showed favoritism toward CD&L..."   

The DOI-IG also discovered that Lords had accepted free lodging from Brian Lamey, one of the principals of the firm, in violation of ethics regulations, and failed to disclose the gift on required financial disclosure forms.  Although Senator Ted Stevens (R-AK) was recently indicted under similar circumstances when it was revealed that he failed to report an oil company's gifts, both the U.S. Attorney's Office in New Mexico and the Department of Justice (DOJ) have declined to prosecute anyone involved in the OST contract steering schemes.

One knowledgeable observer points out that DOJ is unlikely to prosecute senior employees of the OST because DOJ is currently defending the agency in the contentious multi-billion dollar Cobell Indian Trust litigation (a judge recently ruled that the government must pay $455 million to Cobell's side, although Cobell has promised to appeal).  A criminal prosecution of OST employees would only serve to undermine DOJ's efforts to convince the court that the OST and other affiliated agencies at DOI are acting in good faith.  DOJ is also unlikely to pursue anyone at CD&L, which, according to a May 2007 filing by DOJ, is listed as one of five accounting firms under contract with DOI to conduct the historical accounting of individual Indian money accounts, which has been a central point of contention in the litigation.

-- Beth Daley

What's in a Name?

Last week, the Department of Energy (DOE) again changed its policy on the protection of nuclear weapons facilities that house weapons-grade and weapons-quantities of highly enriched uranium and plutonium. Formerly known as the Design Basis Threat (DBT), the new policy will now be called the Graded Security Protection (GSP) plan.

The change in policy comes after years of criticism from Congress, POGO, the Government Accountability Office (GAO), and the media on the ever-changing security requirements in the 2003, 2004, and 2005 DBTs.  For instance, when the 2004 DBT proved to be too expensive, the National Nuclear Security Administration (NNSA) created the diluted 2005 DBT, or as some called it, the "Dollar Based Threat."

The decision to restructure the security requirements comes on the heels of an embarrassing security test failure at the Lawrence Livermore National Laboratory in April 2008.  Because Livermore Lab cannot meet current security standards, DOE has exempted the site from those standards, calling it a "non-enduring site."

While details of the GSP are classified, POGO has heard from its sources that the security requirements will vary from site to site.  We understand that Pantex and the Office of Secure Transport, which produce and transport nuclear weapons, will still be complying with the highest level of requirements, comparable to those in the 2004 DBT.  At other sites, however, we get the feeling that DOE will reduce the security requirements.  We have heard there will be a committee of experts who will analyze the security requirements needed at each site.

One thing we don't understand is why different sites need different requirements when they are all guarding the same thing: plutonium and highly enriched uranium.

The decision to rename the Design Basis Threat is reminiscent of an episode in the 1970s and 1980s, when a large amount of bomb-grade nuclear material went missing from the weapons sites.  The nuclear material was originally called MUF: "Missing and Unaccounted For."  But when officials began to realize how much material had gone missing--at one facility, for example, the MUF consisted of 200 lbs. of highly enriched uranium, which was never found--DOE decided to change the acronym from MUF to ID: "Inventory Differences."

-- Ingrid Drake and Peter Stockton

Latest Example of Government Credit Card Abuse Brought to You by Fluor Hanford

SmartPay purchase cards, or P-cards, are government-issued credit cards that are supposed to help agencies reduce costs for the myriad small purchases that are essential to the operation of a typical office.  Instead of pens, pencils and steno pads, however, these cards have also been used in recent years to purchase fancy steak-and-cocktail dinners, lingerie, iPods, and even breast implants.

This is an issue that POGO has been following for many years.  In April, we wrote about a GAO report that found "unacceptably high" problems with the SmartPay program at several federal agencies.  (Those looking for more background on SmartPay should read this July report by the Congressional Research Service, which was brought to our attention by former POGO intern Mike Zhou.)

The latest chapter in the story of SmartPay program abuse is brought to you by Fluor Hanford, prime contractor for the Department of Energy at the Hanford, Washington nuclear reservation, and a business unit of Fluor Corporation, one of the contractors in POGO's Federal Contractor Misconduct Database.  Fluor Hanford has announced that it recently fired three employees it believes had misused a P-card at the Hanford site.  According to the company, a single card was used to make fraudulent purchases of tools and electronic equipment over the past four years.  Fluor Hanford started its own investigation several months ago, and in June notified the DOE Office of Inspector General (DOE-IG), which is conducting a criminal investigation.  The company is keeping tight-lipped in light of the pending IG investigation, declining to identify the fired employees or disclose the total value of the improper purchases and the specific items that were purchased (one wonders if "electronic equipment" = iPods).

This isn't the first time a Fluor division working for the DOE has gotten in trouble for its P-card practices.  A March 1999 DOE-IG audit of P-card usage at a uranium facility cleanup project in Fernald, Ohio found that Fluor Daniel incurred about $42,000 in unallowed, non-reimbursable charges in fiscal year 1998.  According to the IG report, "this occurred because credit cardholders were not provided adequate guidance on items considered unallowable and managers were not consistently monitoring purchases."

Fluor Hanford did not explain what systemic factors led to this most recent incident of abuse, but we have no doubt that the same causes identified in the 1999 audit--inadequate training of card users and lack of oversight by managers--played a role.

-- Neil Gordon

More Insider Deals at Interior: Helium Edition

The Department of Interior (DOI) Inspector General (IG) released a report today that found that the Bureau of Land Management (BLM) "circumvented the procurement process by improperly issuing two 15-year cooperative agreements" for refining helium "without consulting appropriate BLM procurement officials" which could cost taxpayers more than $100 million. Echoing the problems we're hearing about contractors pressuring auditors at the Defense Contract Audit Agency (DCAA), the report also notes that BLM accommodated the private refiners' conditions "because it did not want to fight the refiners."

Among the concessions established for the the benefit of the private company—which the Washington Post identified to be Cliffside Refiners L.P.—were allowing the refiners' contractor to finance and build the equipment, adding a significant investment return fee to the cost structure that is not allowed under cooperative agreements, and having a 15-year agreement term so the refiners could earn this investment fee profit.

Unfortunately, this is not the first time that the DOI IG has found that Interior officials have been inappropriately close to industry.  Numerous False Claims Act lawsuits also argue that DOI allowing companies to take inappropriate deductions is also nothing new. And as an upcoming POGO report reveals, DOI capitulation to industry is more habit than happenstance.

-- Mandy Smithberger

Can't Separate Them with a Crowbar

For years, there has been criticism that the Los Alamos Site Office (LASO) of the National Nuclear Security Administration (NNSA) has been too close with the target of its oversight—the Los Alamos National Laboratory (LANL). But, now the two may literally be closer than ever.

The Department of Energy just finished construction of a new multi-million dollar office building for LASO. But the facility does not include enough offices or parking spaces for employees. An unconfirmed rumor is that there is only one bathroom for 140 people (Such a lack of basic planning and needs-assessment does not inspire faith in the agency responsible for building nuclear weapons).

According to our sources, this means that at least 49 NNSA employees will be working in office space provided by LANL. While it has worked for some oversight bodies to be based inside the facilities they are monitoring, in the case of DOE, this screw-up brings up several concerns.

NNSA staff working in Environmental Operations and Safety System Oversight may feel the need to speak in hushed tones, so that their new officemates do not get wind of their investigations.

This arrangement will also make LANL oversight more difficult for Congress, which already has a challenge trying to figure out which programs are happening in what buildings.

By far the biggest problem raised by the information from our sources is that there are 48 vacancies at LASO—31 percent of its 152-person staff. LASO has a big job ahead of it—providing oversight of a laboratory with a 2007 budget authority of about $2.7 billion—but time and again have shown that its capability is not up to the task.

Last year, National NNSA’s “Headquarters Biennial Review of Site Nuclear Safety Performance Los Alamos Site Office,” found that LASO only met expectations for four out of fourteen nuclear safety oversight and assessment processes. 

NNSA needs to make focus on filling those vacancies, and with top-notch specialists.

-- Peter Stockton and Ingrid Drake

Don't You Have Enough Problems Already?

We have written copiously – if apparently still in vain – about the failings of the Office of Special Counsel and in particular the very serious legal questions raised about the activities of current Counsel Scott Bloch. We have called for his actions to be investigated—and more recently in the wake of FBI raids on his home and office and even his person—have demanded that he be fired...

But even we are quite surprised to find out recently that the OSC had inserted itself into elections for local county sheriffs in the State of Florida, forcing some officials to choose between their livelihoods and their political futures, and causing major upheavals in those local contests within 40 days of the election next Tuesday.

The legal underpinnings of this conflict are complicated and we do not pretend to be able to sort through them decisively. We can however raise one very pertinent question: is this really a good use of federal resources, to pounce upon the goings-on in sheriffs’ offices in small-town Florida?

The action begins with letters from the Office of Special Counsel, an independent agency charged with enforcing the Hatch Act that forbids politicking in federal offices, to employees of local sheriffs’ offices in Florida, warning them that they could not retain their jobs while running as candidates for the office of sheriff. On July 14th, a letter was sent to Kevin Rambosk, who had been Undersheriff in Collier County. When Rambosk decided to run to replace the retiring Sheriff, Don Hunter, Hunter moved Rambosk to the position of Executive Officer in order to avoid offending the Hatch Act. Despite this measure, the OSC letter sternly warns that Rambosk that he is still in violation of the law, largely because the Sheriff’s Office receives a number of federal grants from both the Justice and Homeland Security Departments.

As the letter, signed by Attorney Nicole Elredge of the OSC Hatch Act Unit, states: “The Hatch Act, 5 U.S.C. 1501-1508, restricts the political activity of individuals principally employed by state, county, or municipal executive agencies in connection with programs financed in whole or in part by loans or grants made by the United States or a federal agency.” To that sentence is appended the following footnote: “We have reviewed the Florida State Constitution, state statutes, and case law and concluded that sheriffs’ offices in Florida are executive branch agencies for purposes of the Hatch Act.”

The Florida Sheriffs Association and its attorneys and supporters jumped on that footnote, asserting strongly that in fact Florida sheriffs are members of the judicial, not the executive, branch.  Citing Florida statutes, as well as rulings of the Merit Systems Protection Board (MSPB) that hears cases brought by OSC to support that conclusion, they argued that the Hatch Act does not apply to them.

The OSC letter, however, seems to lean more heavily on the federal funding argument: “It has long been established that an officer or employee of a state or local agency is subject to the Hatch Act if, as a normal and foreseeable incident of his principal position or job, he performs duties in connection with an activity financed in whole or in part by federal funds.” In the case of Rambosk, OSC wrote, as Undersheriff he had “overall budget authority, supervisory authority over employees who handle federal grants, and supervisory authority over employees whose salaries were federally funded.” Thus, OSC concluded, he had “duties in connection with federally funded programs and [was] covered by the provisons of the Hatch Act.” Moving him from that position to Executive Officer was clearly “a temporary maneuver” and did not change the overall situation.

As we noodle around on OSC’s site, we find this is not the first time it has objected to campaigning on the part of some obscure local official in some tiny Smalltown USA. OSC may even be right about the law. But if the law supposes that, to quote Charles Dickens, then the law is a ass and probably should be changed.

Again, we have to ask Mr. Bloch, with the FBI and a grand jury breathing down your neck, with whistleblowers suffering retaliatory acts all across the federal government, is this really all you have to do?

-- Beverley Lumpkin

When caught red-handed, don’t hesitate: shoot the messenger!

That seems to be the Army’s reaction to unfavorable stories of late.  The Washington Post’s Dana Milbank first called attention to the firing of Gina Gray, the public affairs officer for Arlington Cemetery who was fired for trying to follow the rules about media access to military funerals at the cemetery of those killed in Iraq and Afghanistan.  Gray was not some reporter-hugging pinko, either; she had spent 13 years either serving in the Army or working for it as a public affairs officer in Germany, Italy and Iraq.  While working as an Army contractor in Iraq in 2003, she was wounded in an ambush and still suffers hearing loss.  But when she objected to arbitrary orders from cemetery officials who refused to allow media coverage of funerals, even when the families did not object or even requested it, Gray was let go.

Now this week, USA Today reports that an Army social services coordinator at Fort Sill, in Lawton, Oklahoma, who blew the whistle about moldy barracks for wounded soldiers has been fired– or, to be fair, was told that if he did not resign he would be fired. 

Our gentle readers will recall the huge uproar last year after the Washington Post reported deplorable conditions for wounded soldiers at Walter Reed Army Medical Center; the Post reporters even won the Pulitzer prize for their efforts.  The revelations also led to the firings of those in charge of the facility and the appointment of a national commission to examine the care for wounded military.  As reported by USA Today on Monday, “Warrior Transition Units (WTUs) were created to expedite the care and treatment of wounded and ailing soldiers.”

But the barracks set up at Ft Sill to care for some of those transferred from Walter Reed also were sub-par.  In particular, the soldiers staying in the two barracks complained of poor ventilation, and mold in the ductwork.  Chuck Roeder had been hired in January to be social services coordinator for the wounded soldiers at Ft Sill.  When their complaitnts about poor conditions, including the moldy ventilation, were not dealt with, Roeder reached out to reporters at USA Today.  Reporter Gregg Zoroya wrote that twenty soldiers spoke to him last week saying not only that their complaints “went unheeded for months,” but also that “they had been ordered not to speak about the conditions at Fort Sill.” 

But once Zoroya’s story appeared, Roeder’s head was on the block.  Although a Col. Sam White maintained that Roeder’s firing was “coincidental” to the story’s running, he did tell Zoroya that Roeder had “a history of confrontations with base officials.” 

Army Secretary Pete Geren, who earlier had asked for a study of rules at Arlington but not a review of Gray’s firing, told USA Today that it’s “difficult to manage hirings and firings from his office in Washington.”

USA Today follows up today with both an editorial and an additional report that the commanding officer at Ft Sill has asked the Army Inspector General (IG) to look into the firing (link unavailable).  That same base commander has, incidentally, finally ordered his staff to fix the problems Roeder had complained about.

But here’s what POGO wants to know:  Where is the Department of Defense IG?  The Army IG, with all due respect, is not independent of the chain of command; he works for and answers to Army Secretary Geren.  He does not fall under the Inspector General law that gives substantial independence to statutory IGs – including the Defense Department’s. 

At the moment that important office is filled with an “acting” IG, on loan from the Labor Department.  We commiserate with IG Gordon Heddell; he must have a really full plate these days.  But POGO believes the Pentagon’s IG should be all over this kind of retaliation against whistleblowers and others who are just trying to serve the nation and shed some sunlight into those musty corridors and moldy ventilators.

--Beverley Lumpkin