DCAA Lifts Gag Order Against Whistleblower

Government Executive reported on Friday that the Defense Contract Audit Agency (DCAA) has rescinded a year-long nondisclosure memo filed against a veteran agency auditor.  The decision to lift the gag order came on September 12th, two days after the Senate Homeland Security and Governmental Affairs Committee held an oversight hearing on the DCAA in which agency whistleblowers described a culture of retaliation targeted against those who refused to limit negative audit findings.

The nondisclosure memo was filed in 2007 against Diem-Thi Le, who testified at the Senate hearing.  In 2005, after conducting an audit of Fluor Corporation, Le discovered that the contractor's accounting system was "inadequate," and concluded that it was over-charging the government.  But Le's supervisor deleted her findings and altered documents in order to show that Fluor's accounting system was "adequate."

After learning that her supervisor had altered her working papers, Le filed a complaint with the Department of Defense Inspector General (DOD IG).  But somehow her complaint ended up back in the hands of DCAA managers, who transferred Le to another team, gave her a poor performance review, and ordered her to see a psychiatrist.  The 2007 nondisclosure memo stated that Le could not access or share DCAA documents with any investigators, and that she had to return any documents in her possession.

After the Senate hearing earlier this month, however, the DCAA apparently decided to change its tune.  The September 12th memo obtained by Government Executive informed Le that she could now share documents with the Office of Special Counsel or any other government investigator.  On the same day, DCAA Director April Stephenson also sent a memo to agency employees reassuring them that they could speak to federal investigators without fear of retaliation:

It is the firm policy of the Defense Contract Audit Agency that employees are encouraged to cooperate with any investigations conducted by representatives of the federal government investigative authorities by providing testimony and documents in accordance with federal law, including the Whistleblower Protection Act, DoD and DCAA policies and regulations.

But Senator Claire McCaskill (D-MO) and others are not fully satisfied with the DCAA's response.  McCaskill has requested that Stephenson identify the attorney who drafted the nondisclosure memo and release the names of any DCAA managers who may have reviewed it.  The DOD IG is also investigating the incident.

As our loyal blog readers know, the DCAA has been under intense scrutiny lately following the release of a GAO report that questioned the independence of DCAA auditors.

-- Michael Smallberg

Comments

[Paul Weiss]

I think that she should be fired, but the bosses who forced her to fire the whistleblower should be fired as well. She deserves it for doing illegal things just to get a promotion, but they deserve it for forcing her to. This kind of behavior in the DCAA gives good, hard-working and honest accounting agencies like ours a bad name.

Paul Weiss
blogs.vbpoutsourcing.com

[Ben]

Is Sharon Kawamoto SES yet? What is taking so long? This Agency is so bad now. The Metrics were crazy and meaningless but what is going on now is worse! No one can make a decision in this place if their life depended on it.

[Ken]

What about DCAA's 5 top heavy, no value added regions and the Main Bunker at Fort Belvoir that is crawling with non value added salaries? When does April thin this out? If we don't have all the metrics, no need for all these people. When is April going to address the Central Region Directors issues? Has she suggested he call EAP?

[Frustrated]

One thing that needs to be aired out is the DCAA Promotion Potential Rating. It has nothing to do with performance and there are no standards or criteria associated with the rating. The score received by each person will determine if they can be promoted or not. It is not based on competance or integrity. Many cases, the score is based on religeous or culteral criteris. For example, irish catholics have a better chance of getting promoted than someone with a disability. DCAA really does abuse this system and it need to be stopped!

All you DCAA management folks can I have your attention please! For those DCAA CPAs, who have part-time teaching positions at the community colleges; and/or accounting/tax businesses on the side could you please stop correcting tests, working on your lesson plans, filling out tax forms, posting bookkeeping entries, etc.; and for those DCAA CPAs, who spend hours on the office telephones and Government computers calling long distance; and sending e-mails to family members, friends, and clients could you please listen-up.

Metrics are good for measuring the performance of people, who pick cotton in the fields, but that is about all.

The elephants are getting restless. With Mr. Reed, Ms. Jonas, and other high-ranking Department of Defense officials leaving so abruptly I think that they sense a tsunami coming. It may be to late, but how about helping the DCAA auditors you are suppose to supervise/manage/lead; and do some Government work during official business hours.

Thank God for small blessings! For some time I had been planning to write a personal letter to Ms. Tina Jonas, the DoD Comptroller, to tell her about what was going on at DCAA. I was going to ask her to intervene on behalf of the DCAA auditors, who were trying to protect the Government’s interests.

News Article: Defense Comptroller Tina Jonas' last day was Sept. 26, said Cmdr. Darryn James, a Pentagon spokesman. She started her new job as director of operations, planning and analysis for Sikorsky Aircraft Corp. on Monday, a company spokeswoman confirmed.

Enough said!

In case you have not figured it out yet you in DCAA are living in a mill that has been constructed over a number of years by some members of DCAA management for their own personal gain. The mill exists to grind down anyone that tries to oppose the wishes of those that control the five families: Central, Eastern, Mid-Atlantic, Northeastern, and Western. It is not personal! It is business. It is not one person! It is a conspiracy.

In 1995 Carol A. Valentine wrote a pamphlet entitled "Stop Thief! What Happens When a Citizen Takes On The Federal Fraud Machine".

If you take a moment and Google the title, and read it you will not be sorry; and you will be better prepared should you decide to be what a famous former New York City Police Detective Frank Serpico calls on his website a "Lamp Lighter".

POGO and Mr. Serpico go way back.

[Rich]

Why is DCAA now looking to hire and promote so many people? If they do away with so much of the non value added metrics, I would think the top heavy management would have more time to actually look at what people do? The work has slowed down but I guess the metrics will never tell that.

April is a "Mini Bill" but she is running scared. How does she justify going from a total company man saying eveything is fine, to gutting lots of it? Is it true that April is using the EAP program? I hear she was out Bird Watching this past weekend and saw a giant crow but it's face was Senator Claire McCaskill's.

DCAA Contract Audit Manual 4-708 states that the Anti-Drug Abuse Act of 1988 (P.L. 100-690) added section 1516 to Title 18, U.S.C., which contains an obstruction of audit provision. This provision makes it a crime for a person or corporation to endeavor to influence, obstruct, or impede, with the intent to deceive or defraud the Government, a Federal auditor in the performance of official duties. The purpose of the provision is to punish acts designed to prevent an auditor from discovering or reporting fraud or deceit against the Government.

From my review of the GAO Report on DCAA operations, the recent Congressional testimony of the DCAA Auditor and DCAA Supervisor, the DCAA General Counsel "gag memo", the various posting by POGO and GovExec and the related blog postings; I get the feeling that some people at DCAA and DLSA think Federal rules and regulations are all a "joke".

Also, I think that the DCAA Director said that she was going to ask all the defense contractors to give back all the money that they got because of the internally flawed DCAA auditing/reporting. I wonder how she is doing so far? Maybe the DCAA General Counsel could prepare one memo, and DCAA Headquarters could put every defense contractor on the distribution list. There is a "voluntary refund" mechanism available for incidents of "unjust enrichment".

[Legal Counsel]

The last post is facially correct, but not necessarily completely accurate. The relationship between DLSA, including the GC of DCAA and upper management of DCAA, is attorney-client privileged. However, the real issue is, “Who is the client?” Is it the DCAA Director, the Comptroller, or the Secretary of Defense? John Farenish constantly reminds the DCAA Director and her predecessors, that he DOES NOT work for them, in order to maintain “his independence.” He reports to a DOD OGC official, who in turns reports to the GC. In fact, Farenish routinely bypasses DCAA management when he believes that an “independent legal response” is necessary. The fact that Farenish “does not work” for the DCAA Director strongly suggests that the attorney-client privilege analysis is somewhat flawed. As an example, if the DCAA Director told the DCAA GC something that was an admission against interest, would the GC be prevented from sharing this information with other DOD officials. Not necessarily. It would depend on whom the client was determined to be. The point is that the client served by Farenish is not always the DCAA Director or even DCAA. Farenish knows this and exploits it.

The relationship between the office of the DCAA General Counsel from DLSA and DCAA upper management is that of attorney-client. Attorney-client privilege is a legal concept that protects communications between a client and his or her attorney, and keeps those communications confidential. The DCAA General Counsel and the Department of Justice (DOJ) will defend a DCAA official named in a lawsuit. If the court finds that the DCAA official acted improperly the matter is referred to the Office of the Special Counsel for the Merit Systems Protection Board.

The Office of Special Counsel (osc) is also charged with protecting Government employees, who expose waste, fraud, and abuse. It is headed by Special Counsel Scott Bloch. Score one for DCAA management.

[Mr. Smith]

Regarding post from ED, I find it difficult to believe that the legal folks deal directly with the supervisor without involvement from the FAO manager and/or the RAM. By the way, I was very impressed with the 9/30/08 memo to the staff explaining the new performance measures. On the surface, the new measures appear to make sense. There is also a feedback mechanism for anyone to provide feedback anonymously...although they probably can figure out who gave feedback since it is a link on the internal DCAA intranet. They should have provided an email address for us to use so that we can truly provide a stronger level of anonymity. This feedback mechanism is also to be used to report any abuse of these new performance measures. Wow. Never thought I would see the day.

I am slowly changing my opinion of April. Initially I though she was a mini-me version of Bill Reed. I am pleasantly surprised to see that she is actually implementing some great changes in this agency. Let's hope it isn't too little, too late.

[DCAA Auditor]

Look, Sharon Kawamoto should be fired over this. She was perfectly willing to fire the whistleblower and make *her* life miserable -.anything to please the bosses. Only a DCAA manager would argue that the one that signed the memo had no responsibility. She was a good little flunky who was willing to do anything to win a promotion. Now she needs to take the fall for the same bosses she was serving.

[Ed]

Those close to the situation know it went directly from the General Counsel's office to the supervisor. No one else was involved. One of the issues with the General Counsel is that memos and other documents are issued directly from the General Counsel's office to the field offices with no review by management. The General Counsel thinks this is fine as he needs to maintain his independence. But who is monitoring the General Counsel's efforts? Not his boss Scott Castle. Has Scott Castle ever reviewed the actions by his subordinate? Probably not. If yes, did Scott Castle review the memo before it was issued? If no, should he be involved in reviewing the General Counsel's work -- you bet. Perhaps this situation would have been avoided. Worst of all, the General Counsel continued to defend the memo all the way to the hearing on Sept 10th and really left the Director out to dry when she was asked about the memo. This situation is typical of Defense Legal Services. No one is monitoring the actions of the attorneys assigned to the various organizations. I have it on good authority that no one at DCAA Headquarters has ever seen Castle at Fort Belvoir. Good way to supervize. I agree with the prior comment from Legal Counsel. I too have heard that Defense Legal Services and the DoD General Counsel (Dell'Orto) are avoiding Stephenson.

[Jack]

Farenish drafted the memo, but how many people in DCAA management approved it and said fine? How about the managers who lowered her ratings and potential?

[Legal Counsel]

Ed is correct. Ms. Stephenson can do nothing about Farenish because he is not in her chain of command (despite his holding the title, General Counsel, DCAA). Also, as pointed out by other commenters, the DOD General Counsel (i.e., Defense Legal Services) could care less about DCAA. They just want to protect the Office of the Secretary of Defense. So, although what Farenish did was clearly try to suppress a whistleblower, as well as some pretty bad lawyering to boot, word within DCAA is that Ms. Stephenson is getting the run around from Defense Legal Services.

[Ed]

The same rule regarding the DoD General Counsel should have been extended to the Defense Contract Audit Agency. DCAA's General Counsel works for Defense Legal Services and has more interest in supporting the Pentagon than DCAA.

The President of the United States affirmed his strong support for ethical conduct by Government officers and employees in Executive Order 12674, April 12, 1989. He charged the head of each agency to ensure that the rank, responsibilities, authority, staffing, and resources of the Designated Agency Ethics Official (DAEO) are sufficient to ensure the effectiveness of the agency ethics program" (Sec. 301(e)). The DAEO of the Office of the Secretary of Defense is the General Counsel.

The two Defense Department Agencies involved with this "nondisclosure memo" are The Defense Contract Audit Agency (DCAA), and The Defense Legal Services Agency (DLSA). Each one reports to a different chain of command.

The Director of DCAA reports to the Department of Defense Comptroller.

The DCAA General Counsel, who is assigned to DCAA by the DLSA, reports to The General Counsel of the Department of Defense, who by the way is also the DoD Designated Agency Ethics Official (DAEO). The General Counsel of the Department of Defense oversees the ethics and standards of conduct programs throughout DoD, including providing guidance to the Army, Navy, Air Force, and DoD Agencies. These responsibilities are carried out through the DoD Standards of Conduct Office (SOCO), a part of the Defense Legal Services Agency.

The DCAA General Counsel is the Designated Agency Ethics Official for DCAA. So the same office (DL) at DCAA Ft. Belvoir Headquarters that prepared the "nondisclosure memo" is also the office responsible for carrying out Executive Order 12674.

From my personal experience the legal actions taken by Attorney John M. Farenish, the current DCAA General Counsel for many years, show how far down the Agency has gone when compared to the actions of Attorney John N. Ford, a highly regarded former Deputy General Counsel of DCAA (an attorney’s attorney indeed).

[Legal Counsel]

As has been noted on Bob O’Harrow’s Washington Post blog since September 14th, the letter was written by John Farenish, General Counsel of DCAA.

[Ed]

To clarify the situation with the DCAA memo. As Stephenson stated in the hearing, although the memo was signed by Kawamoto, it was written by the DCAA General Counsel (John Farenish). Of interest, the DCAA General Counsel does not report to Stephenson, he works for Defense Legal Services and answers to someone in the Pentagon. Stephenson has no legal authority to discipline the DCAA General Counsel. Someone needs to ask the DoD General Counsel what he is doing about the situation. It is unfair for DCAA to have to have a General Counsel that writes such terrible memos and then DCAA takes the fall. POGO, please pursue this with the DoD General Counsel (Dan Dell'Orto) and Scott Castle (Farenish's boss).

[Paula Weare]

The supervisor who sent the memo to the whistleblower is Sharon Kawamoto.

If I was the OBama campaign, I'd make sure that Ms Sharon along with other career bureaucrats within government involved with whistleblower retaliation are identified and dealt with during the first 100 days.

By the way, why not send an email to Sharon or call her. Her contact info, which should be available to the public, is: [Removed by blog moderator. For more information, please visit http://www.dcaa.mil]

The attorney who drafted the memo is John Farenish, General Counsel of DCAA.