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Briefs: Aug. 27

Aug. 26, 2012 - 12:45PM   |  
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$52,000 video shown at VA conferences

The Veterans Affairs Department paid $52,000 to produce a video parodying the war movie “Patton” that was shown at two training conferences last year. The spending and contracting associated with the two conferences — which had a combined price tag of $5 million — are now subject of an inspector general’s investigation.

The 18-minute video was shown only twice, according to congressional sources, and used a paid actor to parody the iconic opening scene of “Patton,” in which World War II Gen. George Patton delivered a rousing speech to his troops in front of a massive American flag. The video was released by the House Veterans Affairs Committee.

House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., in an Aug. 13 letter to VA Secretary Eric Shinseki, criticized VA’s conference planners for hiring an outside contractor to produce the video, even though VA has videographers and editors on staff.

VA’s Office of Inspector General is investigating allegations of wasteful spending and improper gifts at the two human resources training conferences in July and August 2011 in Orlando, Fla. VA said it spent a total $5 million on the conferences.

VA issued a statement Wednesday apologizing for the video.

“This parody should never have been produced and this misuse of taxpayer funds is completely unacceptable,” VA said. “This event took place over a year ago and we have already adopted new rules that reflect our continuing commitment to safeguarding taxpayer dollars.”

VA said it is cooperating with the IG’s investigation and it has removed the purchasing authority of employees under investigation.

“Secretary Shinseki has clearly stated that the people who serve our veterans are keepers of the public trust, and that working for the Department of Veterans Affairs is a privilege,” VA said. “VA will hold accountable any individuals who are found to have misused taxpayer dollars or violated our standards of conduct.”

House Veterans Affairs Committee Chairman Jeff Miller, R-Fla., and ranking Democrat Bob Filner of California sent Shinseki a letter Aug. 16 asking for more information on how much VA spent on conferences each year. The letter said that VA has at various times told lawmakers that its 2011 conference budget was $20 million, over $100 million, or that an accurate number was not available.

That is unacceptable, the lawmakers said.

“It is essential that we be given factual information about VA’s conference spending,” they wrote. “If VA spent roughly $20 million on conferences ... it raises questions about the propriety of the HR conferences in Orlando consuming anywhere from 25 to 45 percent of VA’s entire conference budget for the year. If [the] $100 million figure ... is accurate, it raises questions of excessive conference spending in a tight fiscal environment. Finally, if VA has no reliable data at all, it raises questions about whether adequate financial controls and oversight of VA conferences had ever existed.”

Congressional sources who were briefed on the IG’s preliminary findings say investigators are reviewing roughly $200,000 in questionable spending for the Orlando conferences.

Besides the “Patton” video, the alleged wasteful spending being reviewed by the IG includes:

• $84,000 in promotional items distributed to the conferences’ 1,829 attendees, including pens, highlighters, hand sanitizers and USB flash drives with VA’s logo.

• $13,000 for at least seven employees from VA’s Washington headquarters to go on scouting trips to Nashville, Dallas and Orlando to look for possible locations to hold the conferences.

• $3,000 for two photographers.

Congressional sources also told Federal Times that VA employees who organized the conferences may have illegally accepted gifts from hotels they were scouting. Those alleged gifts may have included free rides in helicopters and stretch limousines, lodging, food, alcohol, concert tickets, spa treatments, gift baskets and embroidered pillow cases.

The watchdog group Project on Government Oversight said the allegations involving improper gifts are most concerning, since those gifts may have undermined the procurement process. Those allegations are typical of contracting violations, POGO spokesman Joe Newman said last week.

The IG has not yet reached any conclusion on those allegations. It will likely release its report by the end of September, and lawmakers are expected to hold hearings soon after.

Issa said the VA conferences “bear eerie similarities to the now infamous 2010 General Services Administration conference in Las Vegas.” But Issa noted that the $5 million tab for VA’s two conferences was “significantly more than the 2010 GSA conference,” which cost $823,000.

Issa also said that, as with the GSA scandal, waste occurred in the VA conference’s pre-planning stage. Issa said VA had employees in Nashville, Dallas and Orlando who could have scouted possible locations, and avoided the travel costs involved with flying Washington employees around the country.

According to the schedules posted online for the two conferences, attendees were provided complimentary shuttle services to the Walt Disney World resort, entertainment from a comedian, a poolside movie night, game nights, karaoke, and meditation, Pilates and water aerobics classes.

Miller said last week that investigators should look into those recreational events.

“The key question is whether taxpayers funded what were ‘down time’ activities,” Miller said. “If that turns out to be the case, I see no excuse for it. That is not a function of government.”

Employee rights threatened by appeals court ruling, experts say

An appellate court ruling last week gives federal agencies free rein to demote or fire employees deemed ineligible for “sensitive” positions, experts say.

The U.S. Court of Appeals for the Federal Circuit, in an Aug. 17 ruling, determined the Merit Systems Protection Board has no say in reviewing such cases, the experts said.

“There is no check,” Virginia attorney Sheldon Cohen, a specialist in national security law, said of the 2-1 decision.

If the decision stands, “the merit system will be history,” said Tom Devine, legal director for the Government Accountability Project, a whistle-blowers advocacy group.

The case involved a Defense Finance and Accounting Service GS-5 who was suspended in 2009 and a Defense Commissary Agency GS-7 who was demoted the same year after both were found ineligible for sensitive jobs. The employees brought their complaints to MSPB, but the government contested the board’s role on national security grounds.

MSPB ruled in 2010 that it could review the cases because the employees’ positions did not require access to classified information. But the majority on the three-judge federal appeals court disagreed last week on the grounds that agencies have “broad discretion” to address security concerns.

“It is naïve to suppose that employees without direct access to already classified information cannot affect national security,” Judge Evan Wallach wrote in the prevailing decision. But in a dissent, Judge Timothy Dyk said that agencies could take “adverse actions against employees for illegitimate reasons” and then use ineligibility for sensitive information as a pretext. IThe court defined a sensitive position as one that “implicates national security.”

“Virtually any job can have that label,” said Devine, whose organization sided with the two employees in a brief filed with MSPB. Agencies such as the Justice Department, Securities and Exchange Commission, and most inspectors general are already using it, he said.

The American Federation of Government Employees, which represents the two employees, can now ask the full 15-member appeals court to review the panel’s decision. An AFGE attorney could not be reached for comment Thursday.

Issa asks 10 agencies to detail spending on 153 conferences

The Defense Department between 2005 and 2011 held 64 conferences more expensive per person than the now infamous $823,000 General Services Administration 2010 conference in Las Vegas, according to Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee.

Nine other agencies held 89 conferences that exceeded that benchmark during the same period, Issa said in a news release Wednesday. Those conferences include 22 at the Social Security Administration, 21 at U.S. Agency for International Development and 15 at the Agriculture Department.

Issa is investigating the conferences because their costs, as reported by the agencies, were greater than the $3,000 spent per person at the GSA conference, which featured mind readers, parties and parody skits. That conference forced the resignation of former GSA administrator Martha Johnson and the firing of top officials.

In an Aug. 22 letter to Defense Secretary Leon Panetta, Issa asks for more information about the conferences — including all communications about them — and stresses that the conferences might have served legitimate uses.

“It is important to note that we are not prejudging the importance and usefulness of these conferences, instead we seek additional information to enable the committee to determine if expenditures were appropriate and taxpayer dollars were wasted,” Issa said in the letter.

Similar letters were sent to nine other agencies in late July. In addition to SSA, USAID and Agriculture, agencies being investigated are the Education, Interior, Health and Human Services, and Housing and Urban Development departments, GSA and the Small Business Administration.

Some of the DoD conferences listed in the letter include:

• The Naval Facilities Engineering Command intern conference in San Diego, June 21 to 22, 2011.

• The Naval Air Technical Data and Engineering Service Command Leadership Conference in Coronado, Calif., Sept. 27 to 28, 2011.

• Center on Irregular Warfare and Armed Groups Symposium, Newport, R.I., June 21 to 22, 2011.

Guidance promotes, with qualifications, use of personal smartphones for work

Governmentwide guidance released Thursday encourages agencies to consider programs allowing employees to use their personal smartphones and mobile devices for work.

While the guidance cautions that “bring your own device” — or BYOD — programs may not be right for all agencies because of security and legal challenges, BYOD “also enables employees the flexibility to work in a way that optimizes their productivity” and “can and should be cost-effective.”

The guidance, one of several action items required under the administration’s Digital Government Strategy released in May, is a toolkit of sample documents for developing BYOD policies, and case studies of successful programs.

Agencies are not required to have BYOD programs, but the guidance says one factor agencies should consider is whether programs should be mandatory.

For now, agencies such as the Equal Employment Opportunity Commission and the Nuclear Regulatory Commission have made their BYOD programs voluntary for employees and are not requiring them to turn in their government-issued BlackBerrys or other mobile devices. The state of Delaware has a voluntary program, but only reimburses employees who turn in their government BlackBerrys.

While the administration is still grappling with issues such as reimbursement for employees who use their personal devices, the guidance acknowledges that these programs may “necessitate government reimbursement” and provides a model policy.

The guidance also encourages agencies to:

• Institute policies to ensure employees do not conduct work on their personal devices after hours unless directly authorized or instructed.

• Identify the right balance between personal privacy and organizational security.

• Consider implications for equal rights employment, such as disparities in the quality of personal devices.

• Clarify who owns the applications and data being accessed by personal devices.

• Ensure consistency with governmentwide standards for processing and storing federal data.

ATF official collects paid leave and private-sector salary, lawmakers charge

A top Bureau of Alcohol, Tobacco, Firearms and Explosives official is on paid leave and simultaneously drawing a second salary from J.P. Morgan, according to an Aug. 22 letter sent by Sen. Chuck Grassley, R-Iowa, and Rep. Darrell Issa, R-Calif., to acting ATF Director Todd Jones.

William McMahon, former deputy assistant director for field operations, stepped down Aug. 1 after lawmakers questioned his role in Operation Fast and Furious, according to Grassley and Issa. Fast and Furious was a controversial ATF investigative operation that allowed hundreds of guns to fall into the hands of Mexican drug cartel enforcers and other criminals along the southwest border.

The “unusual arrangement” granting McMahon four to five months of extended leave allows him to reach retirement eligibility and begin a second career before formally leaving government employment, the lawmakers said.

“ATF has essentially facilitated McMahon’s early retirement and ability to double dip for nearly half a year by receiving two full-time paychecks — one from the taxpayer and one from the private sector,” they wrote.

“Rather than imposing consequences for his admitted failures, the ATF appears to be rewarding McMahon,” they said.

McMahon is now the executive director of the Global Security and Investigations Group at J.P. Morgan in the Philippines, according to the lawmakers. The letter cites McMahon’s government salary as “six figure” and his J.P. Morgan salary as “even larger.”

Grassley, ranking member of the Senate Judiciary Committee, and Issa, chairman of the House Oversight and Government Reform Committee, call on Jones to provide a variety of information to explain why McMahon was allowed to take extended leave.

“This is not the culture of change that you promised to bring to ATF,” the lawmakers said in the letter.

260 DHS employees convicted of crimes last year, IG reports

A total of 260 Department of Homeland Security employees were convicted of crimes ranging from bribery and drug smuggling to theft and child pornography in 2011, according to a new report from the department’s Office of Inspector General. .

One Customs and Border Protection officer with eight years of experience, for example, was found guilty of helping drug traffickers smuggle cocaine through his inspection lane. The IG said the officer provided the drug traffickers with his work schedule and lane assignments. The officer pleaded guilty to bribery and conspiracy to possess and distribute cocaine, was sentenced to 110 months in federal prison and fined $100,000.

The OIG said in its Aug. 1 Summary of Significant Investigations that it opened 1,389 investigations last year. The investigations led to more than $45 million in fines, restitution, recoveries and administrative cost savings, the report said.

The IG also listed at least two Transportation Security Administration screeners who were convicted of stealing laptops from passengers’ luggage. One stole and fenced over a three-year period more than 80 laptops and other electronic devices valued at $80,000 from luggage at the Orlando International Airport in Florida. He pleaded guilty to embezzlement and theft and was sentenced to 24 months of probation, the report said.

Another CBP employee pleaded guilty last year to stealing a customs declaration form that had been filled out by famed astronaut Neil Armstrong as he passed through Boston’s Logan International Airport. That employee tried to auction the form on a collectibles website. He received 24 months probation, the report said.

And a Coast Guard Auxiliary member admitted using government credit cards in a scheme to obtain cocaine, the IG said. The Coast Guard member used his fleet credit cards — which are normally used to buy gasoline and other supplies for official federal vehicles — to buy gasoline, which he then gave to a drug dealer in exchange for cocaine. The report said he also used the cards to buy gas for himself, his friends and family.

Report: Virginia’s defense contractors have most to lose under sequestration

Virginia, California and Texas stand to lose the most money in defense contracts under across-the-board budget cuts scheduled to take effect Jan. 2, a new report shows.

Small and minority-owned businesses also stand to lose billions of dollars in defense contracts under the reductions, known as sequestration, according to reports posted this week by the nonprofit Center for Security Policy.

The reports compare defense spending in 2011 to two potential budget cuts: a 9 percent reduction that the president proposed for the 2013-2021 defense budget and an 18 percent reduction that would occur under sequestration.

For example, companies in Virginia earned $54.8 billion in government contracts in 2011, the nationwide report shows. A 9 percent budget cut would reduce contract spending in the state by nearly $5 billion, and an 18 percent budget cut would reduce spending by close to $10 billion, the report shows.

In another example, minority-owned businesses, which earned $33 billion in federal contracts last year, would lose nearly $3 billion under a 9 percent reduction and nearly $6 billion under sequestration, the report shows.

The Center for Security Policy published the reports for the Coalition for the Common Defense, which is made up of several retired military officials as well as groups including the Lexington Institute, Heritage Foundation and Center for Military Readiness.

Government joins whistle-blower’s false claims suit against Gallup

The Justice Department is joining a whistle-blower lawsuit against the Gallup Organization to pursue claims that the polling group inflated prices on contracts with the U.S. Mint, the State Department and other federal agencies, the Justice Department announced Wednesday.

According to a lawsuit filed in 2009 by former Gallup employee Michael Lindley, Gallup violated the False Claims Act between 2008 and 2009 by allegedly giving the government inflated estimates of the hours it would take to perform its services, even though it had lower internal estimates of the hours required.

On some contracts, including an Air Force Materiel Command contract worth $10 million, Gallup officials allegedly based their estimates not on the hours most likely required to complete the work but on the hours that could be billed to reach the maximum allowable price under the contract, Lindley’s lawsuit claims.

The government allegedly lost at least $10 million because of the false claims, according to Lindley’s lawsuit.

Under the whistle-blower provisions of the False Claims Act, private parties can sue on behalf of the United States for submission of false claims to the government. The False Claims Act authorizes the government to intervene in such a lawsuit and take over primary responsibility for litigating it.

The government can recoup up to three times its losses, plus civil penalties, under the act. The whistle-blower is entitled to receive a share of any funds recovered through the lawsuit.“Contractors must understand that it is unlawful to use inflated estimates to obtain higher contract prices,” Stuart Delery, acting assistant attorney general for the department’s civil division, said in a news release.

The Justice Department said it also plans to bring additional claims related to a Gallup subcontract with the Federal Emergency Management Agency. As part of the whistle-blower lawsuit, Lindley alleged that Gallup tried to hire a FEMA official who was responsible for Gallup’s subcontract while, at the same time, Gallup was seeking to obtain additional funding from FEMA for Gallup’s subcontract.

Gallup issued a statement saying that the claims filed by the Justice Department “are wholly without merit.”

“We intend to fight these baseless charges vigorously and look forward to resolving the matter in court,” the company said.

The lawsuit was was filed in U.S. District Court for the District of Columbia.

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