Archive for August, 2008


Here is some information to think about.  Congressman Dave Reichert is running for election to again be one of Washington’s Representatives in Congress.  After his initial good old boy appearances with President Bush, he (or his aides) do not do a good job of assuring the public they even read for content and meaning letters from their constituents.  No matter what comments and concerns are sent, responses are evasive and do not directly answer the concerns expressed to him in the letters, and in fact the same kind of form letter is sent in return, rah rah, “Don’t you worry; we support Boeing no matter what awful thing they allegedly have done or not done.”

 

Republican Dave Reichert is being challenged by Democrat, Darcy Burner, in the 2008 elections for Congress in Washington State.  I for one, after reviewing this material and seeing the lack of informed responsiveness in his replies, hope there will be a defeat in Reichert’s future.  –GFS

****************************************************************************************************************

See the following for a bit of history:

 

July 27, 2007

Dear

I found this editorial that was written a year ago, after the infamous Boeing “Tanker Deal” and find that the problems described and the questions being asked are still germane to the problems we continue to have with Boeing and with parts of the government itself today.  What is being done to stop this pattern of waste fraud and abuse by contractors and what appears to be ineffective handling of it by the Attorney’s General and other government offices?

 

Sincerely

 

—————————————————————

The Boeing Scandal After the Boeing Scandals

By Robert Weissman

Posted July 11, 2006 | 07:47 AM (EST)

The United States treats its petty criminals harshly, and not just the worst offenders.

 

If you get caught selling small amounts of marijuana, or get caught stealing on a couple occasions, you are liable to get a significant jail term. Once you get out, you may well find you have to pay thousands of dollars in court costs and other fees. Get placed on probation, and you may have to pay the costs of your probation officer.

You may be deprived of your right to vote. You will find it very hard to get a job.

On the other hand, the crimes of corporations get treated with kid gloves. Leave aside for a moment the treatment of individual executives — that’s a topic for another day — to consider how light the treatment is for corporations that commit crimes.

 

The latest evidence is a remarkable deal the government just entered with Boeing.

In May, the Justice Department announced a tentative agreement with Boeing to resolve two entirely separate and quite serious cases of apparent criminal wrongdoing.

 

The deal looked scandalous in May. But then the final agreement was announced just before the July 4 weekend, and it turns out to be worse than anyone could have anticipated.

 

Both of the instances of Boeing’s wrongdoing involved major offenses against the U.S. government and U.S. taxpayers. They both involved projects of considerable importance to Boeing. And in both cases the company’s conduct was extraordinarily egregious; these were not failures to comply with arcane rules, but theft of a competitor’s proprietary data to facilitate bid-rigging and a quid pro quo arrangement with a government contracting officer to facilitate a massive government overpayment for a weapons system of very questionable benefit.

 

In the Evolved Expendable Launch Vehicle Program scandal, Boeing acquired 25,000 pages of bidding documents from its sole competitor, Lockheed Martin. It then used the information to set its bids just below those of Lockheed. The government and taxpayers were thus cheated of the benefits of genuine competition.

 

In the elaborate Darleen Druyan affair, Air Force contracting officer Druyan admitted doing a variety of “favors” for Boeing. In the Pentagon’s misguided deal to lease rather than buy tankers from Boeing, Druyan admitted that she “agreed to a higher price for the aircraft than she believed was appropriate.” Boeing reciprocated for these gifts — ripoffs of taxpayer money — by hiring her. Her hiring was managed at the highest levels of the company, involving then-Chief Financial Officer Michael Sears.

 

Despite the gravity of the corporate wrongdoing in the two cases, Boeing is going to get off with payment to resolve civil claims and a $50 million “monetary penalty.” Not a criminal penalty, mind you, because Boeing is not being charged with any crimes, nor acknowledging that it might have been, based on the evidence. The company gets to avoid the reputational harm of a criminal plea — or even a criminal charge — and Lockheed won’t be able to use any Boeing concession of criminal wrongdoing in the companies’ ongoing civil litigation (which, incidentally, might be resolved by the two firms’ rocket launch divisions merging).

 

For extensive materials on these cases, check out the good work of the Project on Government Oversight.

Non-prosecution deals like the Boeing agreement are the norm, not an exception. My frequent co-author Russell Mokhiber of Corporate Crime Reporter issued a study this past December which found that there were at least 34 non-prosecution and deferred prosecution agreements with large corporations between 1992 and 2005 — with more than two thirds of the cases occurring since 2002.

 

But there are a few novel features of the Boeing deal.

First, it settles two entirely separate cases at once. One factor the Department of Justice is supposed to use in deciding whether to prosecute criminally is whether a company is a repeat offender. Here, we know Boeing is — because the no-prosecute deal itself resolves repeat offenses.

 

Ralph Nader and I have written to Attorney General Alberto Gonzales, asking him to undo the Boeing deal and formally reassess the routinized use of deferred prosecution and non-prosecution agreements for large corporations. Our letter is here.

The basic idea behind non-prosecution or deferred prosecution deals is that prosecutors can extract commitments for corporate reforms that are more far-reaching than what they would have achieved with a criminal prosecution. A key element in all of these deals is that the company benefiting from the deal promises not to repeat the behavior that got them in trouble in the first place.

 

The second novel feature of the Boeing deal is how Boeing’s lawyers restricted this pledge. As Russell Mokhiber first noted, under the terms of the actual agreement — which the Justice Department only made available after Russell harrassed them — if a non-executive level Boeing employee violates the agreement, that doesn’t count as a violation by Boeing. “Drawing the line between executives and other employees is a little crude,” said Columbia University Law Professor John Coffee. “I don’t think you want to tell non-executive employees they are legally immune and can’t get the company in trouble. You want the company monitoring all employees.” That’s not all. Under the terms of the actual agreement, if an executive commits a violation but the company turns them in, that doesn’t count as a violation either. Russell and I wrote about these remarkable provisions — which means to a considerable extent that Boeing can’t violate the agreement with the Justice Department even if it does violate the agreement — here.

 

While Congress is going through the Kabuki dance of considering flag-burning amendments, the real business of Washington goes on.

 

—————————————————————————————————-

  

July 27, 2007

 

Dear Congressman Reichert,

 

I just read this article in Forbes regarding Boeing once again being allowed to pay to avoid alleged crimes being prosecuted.  This case is about small things like nuts and bolts.  Obviously, that is being taken seriously as wrongdoing here, as Boeing had to pay over a million dollars, a small sum in the grand view of things.  However, the other case I know you know about, which after being passed along like the plague by various federal criminal investigative agencies continues to roil about in case development stages in the House Committee on Oversight and Government Reform and appears to be having a hard time being effectively accomplished.  This case is about Boeing appropriating and using for their own purposes and then billing repeatedly I am told, Research and Development (R&D), which was already paid for by the government previously to the tune of millions or billions of dollars.  If they can be held accountable for negligible sums of money, why are they allowed to cheat and steal with impunity when we are talking vast sums of money?  To use a simple analogy, why is it easier for Justice Dept. to go after people for stealing a chair off the porch, than hold defense contractors accountable for the theft of the entire, house, barn and herds of livestock, which is occurring right in front of the government’s eyes?

 

Also, why does the government make it so hard for people who are with the government’s best interests in focus reporting these unethical and criminal acts?  Why are these people called whistleblowers, and then punished for being responsible?  And finally, why won’t the government, all branches make sure laws are passed which protect all such government employees from retribution and harassment and destruction of their lives for just doing their jobs?  Are all parts of government so corrupted and ineffective, they really cannot hold the line and clean this up?

 

 

Sincerely,

 

 

 

Please see summary of article and link to Forbes article I refer to below:

 

 

 

Forbes reports in “Boeing to Pay $1M to Settle Bills Claims” July 16, 2007, that the Boeing Company has agreed to pay more than $1 million to settle allegations that the company over billed for materials used in installing new KC-135 aircraft engines.  U.S. attorney’s announced this Monday, July 16.  Forbes story available at:  http://www.forbes.com/feeds/ap/2007/07/16/ap3919116.html

 

U.S. attorney, Eric Melgren, is quoted as saying “that the government alleged that Boeing double-billed for materials used in modernizing KC-135 Stratotankers and RC-135 reconnaissance aircraft.  Materials double billed included nuts, bolts, rivets, and fasteners.”   Further more, prosecutors alleged, “that Boeing charged for the materials even though those costs were included in the company’s contract with the government.”

 

It appears that, if the allegations of double billing are true, by allowing Boeing to settle out of court, the U.S. Attorney General’s office has rescued the company once again from the logical consequences of their actions.  Criminal charges, which if they’d been found guilty in court, would have caused an official record of criminal wrong-doing and the probability, if not requirement, of punitive removal of the company’s eligibility to bid on and be awarded lucrative government defense contracts for a set period of time, or possibly indefinitely.   

————————————————————————————————-

 

 

The following was a response to an apparently detailed letter of concern regarding the outrageous treatment of whistleblowers, and lack of legal protection for whistleblowers in this country and asked for his help in passing improved legislation.  The response was clearly fogging.  -GFS

 

 

August 14, 2007 

Dear ************,

Thank you for sharing your thoughts regarding Whistleblower Protection. I appreciate the opportunity to respond.

A whistleblower is anyone who makes public disclosure of corruption or wrongdoing. This is an important process that ensures that employees are protected when they raise allegations of wrongdoing in the workplace. Some famous whistleblowers include Sherron Watkins, who exposed Enron’s corporate financial scandals, Joseph Darby who alerted the U.S. military of prisoner abuse in Abu Ghraib and Colleen Rowley who exposed the failure of the Federal Bureau of Investigations to act on information regarding Zacarias Moussaoui , who was later convicted of conspiring to kill Americans in the 9/11 terrorist attacks.

In 1989, the Whistleblower Protection Act (WPA) was passed and signed into law. However, the WPA has continuously been challenged and therefore weakened through numerous rulings by the U.S. Courts of Appeals. This process has virtually taken away all whistleblower protection. During the 109 th Congress, Representative Todd Platts (R-PA) introduced legislation to strengthen protections for federal employees. H.R. 1317, the Federal Employee Protection of Disclosures Act, would protect any federal employee who discloses any evidence of waste, abuse, or gross mismanagement in the government. Currently no legislation has been introduced in the 110 th Congress regarding whistleblower protection. Should legislation be introduced, I will be sure to keep your thoughts in mind.

In addition, the Sarbanes-Oxley Act (SOX) of 2002, included provisions that would protect corporate whistleblowers from acts of discrimination, as a result of whistleblowing. This legislation was signed into public law on July 30, 2002.

I appreciate hearing from you. Please do not hesitate to contact me with any other concerns or questions. I encourage you to contact me via my website at http://www.house.gov/reichert/ to expedite your thoughts and I apologize for any inconvenience.

Sincerely,

David G. Reichert
Member of Congress
—————————————————————————————————-

 

Congressman Reichert’s Response to Defense Contract Corruption 9-14-07

I have sent numerous letters to all of my elected representatives, including Congressman Dave Reichert, regarding the continuing (and growing) problem with corruption within Defense Contracting, Defense contractors, such as The Boeing Company, the “Tanker Deal,” the more recent GAO decisions regarding the “Helicopter Deal” with the USAF, etc.  (This information is posted previously on this site.)   

My letters have all stated concerns for the corruption, no bid aspects, etc. and have asked for my elected officials to stand up and clean up the mess and my contention that business should be done in an ethical manner both by defense contractors, all government agencies and the Pentagon.

This is the response I got back 9-14-07 from Congressman Reichert, which makes it seem that they note the topic, but not the view and what they are being asked to do.  I feel like he counted my letter as one supporting the current status quo, which to say the least, is NOT what I stated! 

I am disgusted with what has been going on in the Boeing Company and others.  I am further disgusted with the apparent lack of ethical and responsible government oversight of defense and other contracting.  I asked Rep. Reichert to challenge Boeing and their corrupt counterparts within our government, not to continue to give them contracts at any cost, but to clean their act up and make them deal ethically and honestly with the government and the American people.   

To date, I have not received any kind of response from Senator Patti Murray or Senator Maria Cantwell or any of the others I wrote to about this matter. 

 

 

Response from Congressman David Reichert on September 14, 2007

“Thank you for sharing your thoughts regarding the Air Force tanker selection process. It was good to hear from you and I welcome the opportunity to respond.

The United States Air Force is currently looking to purchase a new line of refueling tankers. They have come up with a list of 26 requirements that must be met by companies such as Boeing in order to receive a contract.

In 2004, the House Armed Services Committee voted unanimously to require the Air Force to enter into a multi-year contract for new tankers. The current line of tankers includes planes that are 40 years old, some of which are corroding and the Air Force now has an urgent need to replace these planes. The Department of Defense is currently considering all options for this contract to ensure that they get the best planes for the taxpayers’ dollars. I believe that Boeing is the company that can provide the Air Force with the best possible planes for the taxpayers’ money, and I am hopeful that Congress will work to continue a strong relationship with Boeing. Boeing has a proven track record of providing high-quality refueling tankers for the US Air Force.

Please know that I will continue to support Boeing and jobs in the Pacific Northwest. Boeing’s Everett plant provides hundreds of jobs for Washington families. The impact that this contract could have on the economy of our region and the lives of thousands of Washingtonians is very significant. Please know that I will continue to fight on behalf of Washington families by advocating that this contract be awarded to Boeing.

Once again, thank you for taking the time to get in touch with me. Your interest and input are valued and I hope to hear from you in the future regarding other matters of importance. I encourage you to visit my website and sign up for my weekly e-newsletter at http://www.house.gov/reichert/ to learn more about other issues impacting the 8th Congressional District and our nation.”

Sincerely,

David G. Reichert
Member of Congress

—————————————————————————————————

 

From 8/17/07

 

Dear *************,

 

Thank you for sharing your thoughts regarding Whistleblower Protection. I appreciate the opportunity to respond.

A whistleblower is anyone who makes public disclosure of corruption or wrongdoing. This is an important process that ensures that employees are protected when they raise allegations of wrongdoing in the workplace. Some famous whistleblowers include Sherron Watkins, who exposed Enron’s corporate financial scandals, Joseph Darby who alerted the U.S. military of prisoner abuse in Abu Ghraib and Colleen Rowley who exposed the failure of the Federal Bureau of Investigations to act on information regarding Zacarias Moussaoui , who was later convicted of conspiring to kill Americans in the 9/11 terrorist attacks.

In 1989, the Whistleblower Protection Act (WPA) was passed and signed into law. However, the WPA has continuously been challenged and therefore weakened through numerous rulings by the U.S. Courts of Appeals. This process has virtually taken away all whistleblower protection. During the 109 th Congress, Representative Todd Platts (R-PA) introduced legislation to strengthen protections for federal employees. H.R. 1317, the Federal Employee Protection of Disclosures Act, would protect any federal employee who discloses any evidence of waste, abuse, or gross mismanagement in the government. Currently no legislation has been introduced in the 110 th Congress regarding whistleblower protection. Should legislation be introduced, I will be sure to keep your thoughts in mind.

In addition, the Sarbanes-Oxley Act (SOX) of 2002, included provisions that would protect corporate whistleblowers from acts of discrimination, as a result of whistleblowing. This legislation was signed into public law on July 30, 2002.

I appreciate hearing from you. Please do not hesitate to contact me with any other concerns or questions. I encourage you to contact me via my website at http://www.house.gov/reichert/ to expedite your thoughts and I apologize for any inconvenience.

Sincerely,

David G. Reichert
Member of Congress

 

 

 

 

 

 

 

 

 

 

 

Advertisements

So, what really is important?  Honesty, Affiliation, Power, Wealth, Marital Fidelity, Lying?

I heard someone on the radio talking about the recent outing of John Edwards alleged affair and heard the host adamantly saying that the point was not the infidelity, but the lie.  (Sound familiar?) 

 

But is it?  Reflect back on all the lies.  Look over even this site and see how many instances of corruption and fraud, and lying have occurred, sometimes outed by whistleblowers, sometimes found by reporters or others.  Lies, cover-ups based on fraud, theft, manipulation of situations generally to satisfy the greed of someone or a group of someone’s, perhaps even a company, seem to be the norm now days.  Why?  Some of it I’m sure is political positioning and strategy.  I envision Karl Rove’s long lists of things he’s got on nearly everyone.  Juicy little factoids ready to be used to sway or if that fails, destroy the opposition to his employers and long time conspirators. Usually this thought waves through as I am again wondering why Congress won’t stand up and do something about all of this crap and corruption, because with the neutering and corrupting of the Justice Dept. and the intentional perverting of not only the interpretation of our Constitution by the Executive Branch and their associates, but the strong armed control of nearly every government agency by Presidentially appointed socially and politically prejudiced directors at the top, Congress, as dysfunctional as it is, and as fraught with corrupted people as it may be, is at this time kind of the last stop. 

 

It seems to me that the rest of our government has given up and has crawled into the kitchen cupboard whimpering, waiting for the smoke from the destruction to bring an end to its suffering.  And while all of this is going on the fear mongering aimed at the public also goes on, and the destruction of quality of people’s lives in every possible way continues. 

 

So, in the interest of finding a path through all of the stuff that is coming out, is one kind of lie worse than another?  Should someone be drawn and quartered who lied about marital fidelity, but someone who lied about whether information or required testimony was about national security, or someone who lied about information used to back up certain kind of political or legal actions be allowed to continue with impunity?  This seems to be something all of us, the public need to clarify for ourselves.  Justice is supposed to be blind, but fair and be applied with integrity.

I post this here for your consideration.  Think about the issue, of character, not restricted specifically these particular players.  Perhaps you can contribute other examples of note.    What can be done about all of this?  It seems like the citizens really do need to play a large role in stopping the flood.  Influence and lead how you can.  -GFS

 *************************************************************************************************

From NPR via Huffington Press

Cindy McCain’s Half Sister ‘Angry’ She’s Hidden

Listen Now [4 min 16 sec] add to playlist

 

Enlarge

 

Ted Robbins/NPR

Kathleen Hensley Portalski displays newspaper clippings of her father in World War II, as well as snapshots of herself as a child with her father.

 

 

 

Enlarge

 

Courtesy Nicholas Portalski

Portalski is shown with her late father, Jim Hensley, who also was Cindy McCain’s father.

 

 

 

Read the original profile on Cindy McCain.

 

 

 

Enlarge

 

Ted Robbins/NPR

Nicholas Portalski, whose mother is McCain’s half sister, says it’s “very, very hurtful” that he and his mother haven’t been recognized.

 

 

All Things Considered, August 18, 2008 · Last Tuesday, NPR broadcast a story about Cindy McCain‘s business and charity work. In it, Ted Robbins described McCain as the only child of Jim Hensley, a wealthy Arizona businessman. The next morning, NPR received an e-mail from Nicholas Portalski of Phoenix, who heard the story with his mother.

“We were listening to the piece about Cindy McCain on NPR, All Things Considered, and it just struck us very hard,” Portalski said.

His mother, Kathleen Hensley Portalski, is also Hensley’s daughter.

The Portalski family is accustomed to hearing Cindy McCain described as Hensley’s only child.

She’s been described that way by news organizations from The New Yorker and The New York Times to Newsweek and ABC.

McCain herself routinely uses the phrase “only child,” as she did on CNN last month. “I grew up with my dad,” she said then. “I’m an only child. My father was a cowboy, and he really loved me very much, but I think he wanted a son occasionally.”

McCain’s father was also a businessman — and twice a father.

“I’m upset,” Kathleen Portalski says. “I’m angry. It makes me feel like a nonperson, kind of.”

Who Is Kathleen Hensley Portalski?

Documents show Kathleen Anne Hensley was born to Jim and Mary Jeanne Hensley on Feb. 23, 1943. They had been married for six years when Kathleen was born.

Jim Hensley was a bombardier on a B-17, flying over Europe during World War II.

He was injured and sent to a facility in West Virginia to recuperate. During that time, while still married to Mary Jeanne, Hensley met another woman — Marguerite Smith. Jim divorced Mary Jeanne and married Marguerite in 1945.

Cindy Lou Hensley was born nine years later, in 1954.

She may have grown up as an only child, but so did her half sister, Kathleen, who was raised by a single parent.

Portalski says she did see her father and her half sister from time to time.

“I saw him a few times a year,” she says. “I saw him at Christmas and birthdays, and he provided money for school clothes, and he called occasionally.”

Jim Hensley also provided credit cards and college tuition for his grandchildren, as well as $10,000 gifts to Kathleen and her husband, Stanley Portalski. That lasted a decade, they say. By then, Jim Hensley had built Hensley and Co. into one of the largest beer distributorships in the country. He was worth tens, if not hundreds, of millions of dollars.

Sole Inheritor To Hensley’s Estate

When Hensley died in 2000, his will named not only Portalski but also a daughter of his wife Marguerite from her earlier marriage. So, Cindy McCain may be the only product of Jim and Marguerite’s marriage, but she is not the only child of either.

She was, however, the sole inheritor of his considerable estate.

Kathleen Portalski was left $10,000, and her children were left nothing. It’s a fact Nicholas Portalski says his sister discovered the hard way.

“What she found in town — on the day of or the day before or the day after his funeral — was that the credit card didn’t work anymore,” Nick says.

The Portalskis live in a modest home in central Phoenix. Kathleen is retired, as is her husband. Nicholas Portalski is a firefighter and emergency medical technician looking for work.

They say it would have been nice if they were left some of the Hensley fortune.

They also say they are Democrats, but Nicholas Portalski says he had another reason for coming forward.

“The fact that we don’t exist,” he says. “The fact that we’ve never been recognized, and then Cindy has to put such a fine point on it by saying something that’s not true. Recently, again and again. It’s just very, very hurtful.”

Kathleen Portalski says she’d like an acknowledgment and an apology.

NPR asked the McCain campaign — specifically, Cindy McCain — to comment or respond. Neither replied.

 

Related NPR Stories

  • Aug. 13, 2008

Cindy McCain: Private Heiress And Philanthropist

  • July 9, 2008

First Ladies Pursue Women Voters

  • June 27, 2008

From NPR via Huffington Press

 

Original Profile for John McCain’s Wife: 

Cindy McCain: Private Heiress And Philanthropist

Listen Now [6 min 22 sec] add to playlist

Correction: The story said Cindy McCain’s father, Jim Hensley, left his company to “his only child.” In fact, Hensley was also survived by a daughter from a previous marriage, Kathleen Anne Hensley Portalski.

 

See A Slideshow Of Cindy McCain

 

 

 

 

Enlarge

 

Mary Altaffer

Cindy McCain arrives at her husband’s campaign headquarters in Washington, D.C., on Aug. 2. AP

 

 

 

Enlarge

 

Timothy A. Clary

After wrapping up the GOP nomination fight, Sen. John McCain and wife Cindy McCain thank supporters in Dallas. AFP/Getty Images

 

 

 

Read the companion profile on Michelle Obama, the wife of Democratic presidential hopeful Barack Obama.

 

 

 

Enlarge

 

Hoang Dinh Nam

Cindy McCain meets with 11-year-old Le Thi Phuoc and her father, Le Van, in Vietnam in June. McCain helped arrange for Phuoc to get surgery in the U.S. for her cleft palate. AFP/Getty Images

 

 

All Things Considered, August 13, 2008 · As the wife of Republican presidential hopeful Sen. John McCain, Cindy McCain has a high public profile and she’s often at her husband’s side.

But she is also heiress to the Hensley and Co. beer distributorship in Phoenix. And when it comes to the family business, Cindy McCain resolutely refuses to comment.

“I don’t think I’m very mysterious,” she said on ABC’s Good Morning America. “I’m not the candidate. I’ve never been front and center. I do the things I enjoy and that are important to me. And [I] do them in the way I like to do them.”

Hensley and its board’s chairman, Cindy McCain, declined to participate in this story. The company, which distributes brands including Bud Light and Budweiser, has a 60 percent share of the Phoenix market and had $370 million in revenues last year.

McCain’s father, Jim Hensley, founded the beer business in 1955. He built it into the third-largest Anheuser-Busch distributorship in the country. When he died in 2000, he left it to his only child.

The Private Prenuptial

Cindy Hensley met John McCain more than 20 years earlier at a party in Hawaii. He was a 43-year-old naval officer, married at the time. She was 25. They married a year later — in 1980 — and they signed a prenuptial agreement, which was fairly rare at the time.

The agreement has never been made public, but tax attorney Lee Sheppard, who writes for the nonpartisan publication Tax Notes, says there could only have been one reason for the prenup: Cindy had money and John didn’t.

“She was an heiress … who was marrying, and she was very young at the time,” Sheppard says. McCain was “an old military guy who didn’t have a job and went to work for the father-in-law right after they got married.”

John McCain’s job with Hensley didn’t last long. In 1982, he ran for Congress, financing his campaign partially with loans from Cindy. After he won, Cindy McCain went with him to Washington, D.C. She left two years later because she was homesick for Arizona.

Separate Tax Returns For Privacy

The McCains have always filed separate tax returns. That was a problem earlier this year, when Cindy McCain refused to release her return.

“This is a privacy issue. My husband is the candidate,” Cindy McCain told NBC’s Ann Curry. “I’m not the candidate.”

Eventually, she released a partial 2006 return. It lists income from salaries as just under $300,000. And it lists income from businesses, real estate holdings and trusts at $4.5 million — with no other details.

This year, McCain has benefited from holding stock in Anheuser-Busch, which is being acquired by Belgian brewer InBev. Her family also owns a stake in the Arizona Diamondbacks baseball team.

Congressional financial disclosure forms list the McCains’ assets together, making John McCain the third-richest member of the Senate. But Sheppard says Congress devised the forms so they don’t offer much detail, either.

“The federal financial disclosure [form] says things like, well, are you worth somewhere between $1 million and $100 million?” she says. “In her case, it doesn’t tell us much, because family businesses don’t have to be valued, and Hensley is a family business.”

Sheppard says that despite Cindy McCain’s privacy protest, businesses have interests that ought to be scrutinized.

“Let’s go back in time,” Sheppard says. “Lyndon Johnson was married to a very rich woman in the broadcasting business. Well, that has a little bit of political effect. And that is a business with a lot of political interests. And beer is a business with a lot of political interests, too. Beer is affected by all kinds of legal questions.”

Hensley and company executives have lobbied the federal government on a number of issues, including successfully opposing rules to put alcohol content on beer labels.

When he was chairman of the Senate Commerce Committee, John McCain recused himself from alcohol-related issues. If he’s elected president, recusal will not be an option. The campaign says McCain will deal with that if he’s elected.

A Passion For Philanthropy

Cindy McCain is Hensley’s chairman, and she’s not involved in day-to-day operations. Those who know her say what she truly enjoys is philanthropic work.

She had her own charity providing emergency medical care to children, but it disbanded in the mid ’90s after McCain admitted she illegally obtained painkillers from that charity for a back problem. Now, she is active in three charities.

As recently as this spring, she traveled to Vietnam with Operation Smile, a charity that provides surgery for children with facial deformities.

“Cindy always scrubs and goes into the operating room,” says Vonnie Wray, the organization’s development director. “She’s very, very hands on with comforting the parents who are anxious — and perhaps shows them pictures of her own daughter.”

The McCains adopted a child with a cleft palate, Bridget, who is now 16.

Through much of the 1990s, Cindy McCain stayed out of the public eye, raising four children at home. Now, as when her husband first ran for president in 2000, Cindy McCain is at his side. She supports his career — and doesn’t reveal too much about her own.

 

Related NPR Stories

  • Aug. 12, 2008

Michelle Obama: The Exec, Mom And Campaigner

  • July 9, 2008

First Ladies Pursue Women Voters

  • June 27, 2008

Candidate’s Wives Put Under the Microscope

  • June 17, 2008

Wives of McCain, Obama: Hurting or Helping?

Corruption and lack of ethics are draining this country.  -GFS

 

******************************************************************

Link to original at Washington Post:  http://www.washingtonpost.com/wp-dyn/content/article/2008/07/17/AR2008071702760_pf.html

 

 

Bids for Work Falsified, GAO Reports
$100 Million in Contracts for Distressed Zones Go to Firms Operating Elsewhere

By Anita Huslin
Washington Post Staff Writer
Friday, July 18, 2008; D04

Over the past two years, at least 10 Washington area companies have won more than $100 million in prime government contracts set aside for small businesses in economically distressed areas by claiming they had residency in those communities.

A Government Accountability Office report released yesterday challenged those claims and said the agency plans to ask the Small Business Administration‘s inspector general to investigate.

The GAO said it reviewed records for 17 Washington area companies participating in the program and found that 10 allegedly failed to meet SBA requirements that their primary offices be based in an economically distressed zone and that at least 35 percent of their employees live in one.

In one instance, a roofing contractor with a $4.1 million Air Force contract listed his business as being in a Landover distressed zone. When government investigators visited, the office was in half of a duplex and a person who identified himself as a vice president said no employees worked there. According to payroll records, only 12 percent of the company’s employees lived in the zone, the GAO said.

In another, an engineering company listed its primary address as the second floor of a house in Northeast Washington that had been converted into a dentist’s office, but its Web site locates the company in McLean and employees answer the phone there. Audrey Price, president of the company, Quantum Dynamics, said she has an open-ended arrangement with the dentist for the space above his office. Her company is planning to move soon from McLean to Macon, Ga.

“We are preparing a complete response to the SBA and expect to be exonerated as far what the GAO is saying,” she said by telephone.

In another case, investigators went to the address of CSI Engineering (DC/PC) in Greenbelt and found the office locked and several days of mail piled outside the door. The company president said he has two companies with similar names; one is in Greenbelt and another in Beltsville, which is not in an economically distressed zone.

“We do all of the engineering in Greenbelt every day,” said CSI Engineering president Dave Ghosal, who works in Beltsville. “There’s a lot of turnover in people, but if you call, there are people there” in Greenbelt. “The names, I think, are a little confusing.”

The GAO discussed its findings yesterday during a hearing before the House Committee on Small Business. The report found fault with the SBA’s oversight.

As a test of the program’s screening process, investigators created fictitious companies and submitted applications for the Historically Underutilized Business Zone program. Four of them won certification, even though one listed a Starbucks as its company address and the employee and company information was fabricated on all the applications, GAO investigators told committee members.

“We created the bogus companies to test fraud controls, the gateway to the money,” said Gregory Kutz, managing director of forensic audits and special investigations for the GAO. “That miserably failed.”

The GAO said the program relies on limited documentation and there is little follow-up by the SBA. As a result, some companies rent space in a HUB zone to win certification, but then move elsewhere, investigators said.

After the hearing, SBA officials released a statement outlining steps they will take to correct problems and said they have already moved to rectify problems such as program maps that incorrectly designate HUB zones. Bad maps have resulted in ineligible small businesses participating in the program and in eligible businesses being blocked out, the GAO report said.

SBA officials said they would work on their internal systems to improve the verification process. Last year, administration officials quashed legislation that would have required on-site visits of applicants and other measures to ensure businesses’ eligibility, calling them “burdensome or undesirable.”

Under federal contracting rules, agencies are to award 3 percent of their annual contracts to qualified companies in HUB zones. In 2003 to 2006, the percentage of prime contracting dollars fell about 33 percent short of the statutory goal in 2006, according to the GAO.

 

 

My Oh My!  Could this be a legitimate concern that should be taken into account in the decision to award the U.S. Tanker Contract?   A company’s past and present business practices and dealings perhaps should come into play when awarding huge defense contracts which concern the safety and security of the United States.  -GFS

 

***********************************************************

From Bloomberg.com

 

Boeing Delay on Italy, Japan Tankers May Harm Bid for U.S. Work

By Tony Capaccio and Toko Sekiguchi 

Aug. 12– Italy will penalize Boeing Co. for being three years late in delivering the first of four aerial refueling tankers.

The company is negotiating with the Italian government over the penalty’s size and composition, Cliff Hall, director of Boeing’s international tanker programs, said in an interview. Boeing paid a fine to Japan last year for being one year late on delivering the first of four tankers to that nation’s air force.

Performance on prior contracts is a factor in the U.S. military’s contest between Boeing and Northrop Grumman Corp. for a $35 billion aerial refueling tanker contract. The Pentagon hopes to award a contract by late December.

Boeing’s record on the Japanese and Italian tanker programs is “totally relevant” to its bid for the U.S. program, Scott Hamilton, an aviation consultant with Seattle-based Leeham Co., said. “This goes directly to `past performance.’ You don’t pay penalties for good performance.”

Richard Aboulafia of the Teal Group defense industry consulting firm in Fairfax, Virginia, said delays on these two programs “have prompted Boeing to play defense against charges of `underperformance’ and therefore a high risk of technical difficulties on the U.S. program.”

Boeing’s December 2002 contract with Italy promised the first tanker by November 2005. Delivery now is set for November, three years late, with the second slated for delivery in December, or 21 months late. Boeing expects the third and fourth planes to be delivered at least 16 months and 12 months late, respectively.

`Italians Were Angry’

Boeing is “working with the Italians on different options” for the penalty it must pay that could include cash and extra services, Hall said.

“It’s not really safe to say what that might be or how much. The Italians don’t move fast on these types of matters,” he said. “I expect it to be resolved next year.”

“The Italians — they were angry, but I think they are starting to see that we are making solid progress,” Hall said. “I wouldn’t call it an `excellent’ relationship yet. I would say we are mending fences.”

Factors contributing to the delay included design changes, expanded U.S. flight testing, greater-than-expected challenges to software integration, and the complexity of getting the plane ready for certification by the Federal Aviation Administration, Hall said.

Italian Embassy Press Counsel Fabrizio Bucci in an e-mail said, “We understand Boeing’s problems. We are, however, confident that they will be soon overcome and the delivery will take place shortly.”

Penalized by Japan

Boeing’s penalty from Italy will be the second incurred on its international tanker programs.

Delivering Japan’s first tanker a year late on Feb. 29 cost Boeing “well under $5 million,” Hall said. The fine was paid by Itochu Corp., Boeing’s Japanese partner in the deal, and Boeing reimbursed Itochu, Hall said.

The second aircraft was delivered in March, two days ahead of schedule; the third will be delivered to Itochu in December about two months early and the fourth about one month ahead in November 2009, he said.

“We have certainly turned the corner on this program and are performing better,” Hall said.

 

From Truthout.org

Lawsuit Filed Against Gonzales & DOJ Officials

»

by: Emma Schwartz, ABC News


Alberto Gonzales and Monica Goodling. (Photo: ABC News / AP)

    Lawsuit: DOJ officials should be held accountable for politicizing hiring practices.

    Six attorneys rejected from civil service positions at the Justice Department filed a lawsuit on Friday against former Attorney General Alberto Gonzales and three other top officials for allegedly violating their rights by taking politics into consideration in the hiring process.

    The suit is an attempt to hold top officials accountable for the hiring scandal that ultimately led to Gonzales’ resignation last year, said Daniel Metcalfe, the attorney for the plaintiffs who is also executive director of its Collaboration on Government Secrecy at American University’s Washington College of Law.

    “My clients wish that they hadn’t had to bring this lawsuit — they would have greatly preferred to be working inside the Justice Department, where by all rights they deserved to be, defending the government in court rather than standing as victimized examples of government wrongdoing,” said Metcalfe, a former longtime Justice Department official.

    One of the rejected attorneys — Sean Gerlich — first filed suit against the department in June. Today’s amended complaint, filed in the U.S. District Court for the District of Columbia, broadens the suit to include Gonzales; Monica Goodling, former White House Liaison; Michael Elston, former chief of staff to then-Deputy Attorney General Paul McNulty; and Esther McDonald, former counsel to Gonzales.

    In it, the attorneys allege that top officials violated the applicants’ privacy and due process through the politicized hiring process in the Honors Program and Summer Law Intern Program.

    The suit alleges that in vetting candidates’ political affiliations — in part by Googling their names in connection with any political activity — the officials violated privacy rules requiring that applicants’ files maintain no additional information about the individuals’ political activity. The department’s failure to fully address this “reveal defendant Department of Justice’s utterly unredeemable obliviousness to its legal obligations, and its remarkably recidivistic failures to meet them, in the first place,” the complaint states.

    The suit also argues that a wholesale shift in taking political ideology into account in hiring for the civil service positions violated the applicants’ constitutional rights. “This was an extraordinary, and uniquely successful, conspiracy to achieve political results that required the gross deprivation of hundreds of individuals’ constitutional rights…for which defendant Gonzales was legally most responsible,” the complaint states.

    Goodling’s attorneys, led by John Dowd, issued a statement calling the suit a public relations ploy without merit and nothing to do with the issues Goodling was involved with. “We have no idea why the six plaintiffs in this case were not selected for the Department’s extraordinarily competitive Honors Program and Summer Law Intern Programs, except that it had nothing to do with Monica Goodling—a fact that the evidence will bear out in court,” they wrote.

    Elston’s attorney, Bob Driscoll and the Justice Department declined comment. Calls to McDonald and Gonzales’ attorney were not immediately returned.

    The Justice Department first came under fire last year when questions were raised about whether nine U.S. Attorneys were fired for political reasons. Further investigations revealed broader problems at the department, including how top political officials had screened out applicants for career positions who had more liberal affiliations and politics.

    So far, the department’s inspector general has issued two reports on the politicization at the department. They found that Goodling, Elston and McDonald violated the law in vetting candidates for career positions based on their political allegiences and affiliations.

    Lawsuits seeking to hold top officials civilly liable for acts done during their tenure in government often face difficultly in court, such as the recent case seeking to hold top military officials including former Defense Secretary Donald Rumsfeld accountable for the abuses at the Abu Ghraib prison in Iraq. But if successful, the lawsuit may be the only legal consequences these officials face. Earlier this week Attorney General Michael Mukasey said the feds will not prosecute individuals involved in the Justice Department scandal.

 

 By Alan Maimon

 

August 17, 2008

 

Senate Majority Leader Harry Reid has called on the Transportation Security Administration to investigate whether Las Vegas-assigned air marshals have been appropriately sanctioned for acts including drunken driving and reckless use of weapons.

 

Reid, D-Nev., also said he plans to advance legislation strengthening the rights of whistleblowers in the air marshal service and other federal agencies.

 

Reid’s statements were prompted by a Review-Journal story earlier this month about the Federal Air Marshal Service’s Las Vegas office. The story contrasted the apparently light punishments given to misbehaving agents, with the severe discipline handed down to marshals critical of agency policy.

 

“I believe it is very important for the Transportation Security Administration to fully examine these allegations,” the Nevada senator said.

 

The Federal Air Marshal Service is the primary law enforcement entity within the TSA.

 

Its armed agents help protect commercial flights against terrorist attacks.

 

TSA spokesman Nelson Minerly said his agency responds promptly to concerns from Congress, but he said incidents highlighted in the Review-Journal were “the isolated actions of a very few over the course of many years.”

 

The newspaper found that, since 2001, at least six air marshals assigned to Las Vegas have been criminally or internally investigated for misconduct.

 

Minerly said all the situations cited by the newspaper were thoroughly investigated and properly resolved.

 

He denied that his agency has mistreated whistleblowers: “The Federal Air Marshal Service maintains a policy of zero tolerance of retaliation in the workplace against an employee for raising a concern or complaint through any established formal or informal process.

 

“Any Federal Air Marshal Service employee who in good faith reports waste, fraud, abuse, mismanagement, or a violation of the law or agency policy shall not be subjected to any form of harassment, adverse employment consequences or other form of retaliation.”

 

 

HTML Attachment [ Scan and Save to Computer ]

 

 

P. Jeffrey Black, a Las Vegas air marshal, said he filed 15 whistleblower complaints against the air marshal service between August 2004 and April 2007.

 

“For years, TSA has been telling its employees there is a zero-tolerance policy against whistleblower retaliation, but for the past four years, I have received nonstop retaliation for my whistleblower disclosures,” Black said.

 

Black said things got so bad at one point that he was ordered by his superiors to paint walls and have cars washed at the agency’s local field office.

 

Last month, Black, who is president of the Nevada chapter of the Federal Law Enforcement Officers Association, met with Reid on Capitol Hill to discuss whistleblower protection legislation.

 

Danielle Brian, executive director of the Project on Government Oversight, a Washington-based advocacy group, said the Review-Journal story about the air marshal service “demonstrates that whistleblower protections don’t really exist for federal employees.”

 

That’s why POGO and more than 100 other groups are urging Congress to finalize new laws that would add teeth to the 1994 Whistleblower Protection Act.

 

The House and Senate have been trying to resolve differences in separate bipartisan bills that each chamber overwhelmingly passed last year. The goal is to come up with a compromise bill that could be voted on before Congress adjourns this fall.

 

Advocates of the legislation say the House bill has elements lacking in the Senate version, including the guarantee of a jury trial for whistleblowers and whistleblower protections for FBI and intelligence employees.

 

Federal employees who appeal dismissals by claiming whistleblower protection have their cases heard by the U.S. Merit Systems Protection Board, a quasi-judicial agency that critics say lacks the resources to appropriately rule on often complex matters.

 

Very few rulings in recent years have gone in favor of whistleblowers at any federal agency, according to Rep. Todd Platts, a Pennsylvania Republican who co-sponsored the House whistleblower protection bill.

 

“Unfortunately, we are once again largely back to where we started,” Platts said on the House floor last year. “Since the 1994 amendments, 177 whistleblower cases have come before the federal circuit court; however, only two whistle-blowers have prevailed.”

 

Tom Devine, legal director of the Government Accountability Project, a Washington-based government watchdog group, said no agency better illustrates the need for stronger whistleblower protections than the Federal Air Marshal Service.

 

He called the agency’s management “a lowest common denominator in bureaucratic incompetence.”

 

“Hopefully, the House and Senate will roll up their sleeves and iron out their differences to get a final bill,” Devine said.

 

As Senate majority leader, Reid will play a key role in determining the fate of the legislation.

 

Reid said he is committed to seeing it pass.

 

“I will determine when to bring this important legislation before the Senate, in consultation with Senate sponsors of the legislation and leading whistleblower advocates,” he said.

 

President Bush has vowed to veto the bill.

 

A statement of Bush administration policy from March 2007 said the House bill “could compromise national security, is unconstitutional, and is overly burdensome and unnecessary.”

 

It takes a two-thirds vote of both houses to override a presidential veto.

 

The House whistleblower bill passed last year by a vote of 331-94 with Nevada’s three representatives all voting in favor of it. The Senate bill passed unanimously.

 

Former air marshals who filed whistleblower complaints are keeping a close eye on what Congress does.

 

Robert MacLean was fired from the air marshal service’s Las Vegas office for going public in 2003 about TSA plans to temporarily remove agents from cross-country and international flights. He said the American public deserves to know when the government makes bad decisions.

 

Following MacLean’s disclosure, the plan to cut back on air marshal assignments was scrapped. But MacLean was later fired for revealing what the government deemed to be sensitive security information. He is appealing his dismissal with the Merit Systems Protection Board.

 

“I believe I did the right thing,” he said. “But until the laws are improved and there are more protections for whistleblowers, everybody will be afraid to step forward.”

 

Contact reporter Alan Maimon at:   AMaimon@reviewjournal.com   or   702-383-0404.

 

 

 

See Original Article Here:

 

 

http://www.lvrj.com/news/27067449.html

 

The camel does appear to have its nose, perhaps its whole head under the tent.  -GFS

**************************************************************

US May Ease Police Spy Rules

 

by: Spencer S. Hsu and Carrie Johnson, The Washington Post


A Justice Department proposal would grant broader spy powers to the police. (Photo: AP)

    The Justice Department has proposed a new domestic spying measure that would make it easier for state and local police to collect intelligence about Americans, share the sensitive data with federal agencies and retain it for at least 10 years.

    The proposed changes would revise the federal government’s rules for police intelligence-gathering for the first time since 1993 and would apply to any of the nation’s 18,000 state and local police agencies that receive roughly $1.6 billion each year in federal grants.

    Quietly unveiled late last month, the proposal is part of a flurry of domestic intelligence changes issued and planned by the Bush administration in its waning months. They include a recent executive order that guides the reorganization of federal spy agencies and a pending Justice Department overhaul of FBI procedures for gathering intelligence and investigating terrorism cases within U.S. borders.

    Taken together, critics in Congress and elsewhere say, the moves are intended to lock in policies for Bush’s successor and to enshrine controversial post-Sept. 11 approaches that some say have fed the greatest expansion of executive authority since the Watergate era.

    Supporters say the measures simply codify existing counterterrorism practices and policies that are endorsed by lawmakers and independent experts such as the 9/11 Commission. They say the measures preserve civil liberties and are subject to internal oversight.

    White House spokesman Tony Fratto said the administration agrees that it needs to do everything possible to prevent unwarranted encroachments on civil liberties, adding that it succeeds the overwhelming majority of the time.

    Bush homeland security adviser Kenneth L. Wainstein said, “This is a continuum that started back on 9/11 to reform law enforcement and the intelligence community to focus on the terrorism threat.”

    Under the Justice Department proposal for state and local police, published for public comment July 31, law enforcement agencies would be allowed to target groups as well as individuals, and to launch a criminal intelligence investigation based on the suspicion that a target is engaged in terrorism or providing material support to terrorists. They also could share results with a constellation of federal law enforcement and intelligence agencies, and others in many cases.

    Criminal intelligence data starts with sources as basic as public records and the Internet, but also includes law enforcement databases, confidential and undercover sources, and active surveillance.

    Jim McMahon, deputy executive director of the International Association of Chiefs of Police, said the proposed changes “catch up with reality” in that those who investigate crimes such as money laundering, drug trafficking and document fraud are best positioned to detect terrorists. He said the rule maintains the key requirement that police demonstrate a “reasonable suspicion” that a target is involved in a crime before collecting intelligence.

    “It moves what the rules were from 1993 to the new world we live in, but it maintains civil liberties,” McMahon said.

    However, Michael German, policy counsel for the American Civil Liberties Union, said the proposed rule may be misunderstood as permitting police to collect intelligence even when no underlying crime is suspected, such as when a person gives money to a charity that independently gives money to a group later designated a terrorist organization.

    The rule also would allow criminal intelligence assessments to be shared outside designated channels whenever doing so may avoid danger to life or property — not only when such danger is “imminent,” as is now required, German said.

    On the day the police proposal was put forward, the White House announced it had updated Reagan-era operating guidelines for the U.S. intelligence community. The revised Executive Order 12333 established guidelines for overseas spying and called for better sharing of information with local law enforcement. It directed the CIA and other spy agencies to “provide specialized equipment, technical knowledge or assistance of expert personnel” to support state and local authorities.

    And last week, Attorney General Michael B. Mukasey said that the Justice Department will release new guidelines within weeks to streamline and unify FBI investigations of criminal law enforcement matters and national security threats. The changes will clarify what tools agents can employ and whose approval they must obtain.

    The recent moves continue a steady expansion of the intelligence role of U.S. law enforcement, breaking down a wall erected after congressional hearings in 1976 to rein in such activity.

    The push to transform FBI and local police intelligence operations has triggered wider debate over who will be targeted, what will be done with the information collected and who will oversee such activities.

    Many security analysts faulted U.S. authorities after the 2001 terrorist attacks, saying the FBI was not combating terrorist plots before they were carried out and needed to proactively use intelligence. In the years since, civil liberties groups and some members of Congress have criticized the administration for unilaterally expanding surveillance and moving too fast to share sensitive information without safeguards.

    Critics say preemptive law enforcement in the absence of a crime can violate the Constitution and due process. They cite the administration’s long-running warrantless-surveillance program, which was set up outside the courts, and the FBI’s acknowledgment that it abused its intelligence-gathering privileges in hundreds of cases by using inadequately documented administrative orders to obtain telephone, e-mail, financial and other personal records of U.S. citizens without warrants.

    Former Justice Department official Jamie S. Gorelick said the new FBI guidelines on their own do not raise alarms. But she cited the recent disclosure that undercover Maryland State Police agents spied on death penalty opponents and antiwar groups in 2005 and 2006 to emphasize that the policies would require close oversight.

    “If properly implemented, this should assure the public that people are not being investigated by agencies who are not trained in how to protect constitutional rights,” said the former deputy attorney general. “The FBI will need to be vigilant — both in its policies and its practices — to live up to that promise.”

    German, an FBI agent for 16 years, said easing established limits on intelligence-gathering would lead to abuses against peaceful political dissenters. In addition to the Maryland case, he pointed to reports in the past six years that undercover New York police officers infiltrated protest groups before the 2004 Republican National Convention; that California state agents eavesdropped on peace, animal rights and labor activists; and that Denver police spied on Amnesty International and others before being discovered.

    “If police officers no longer see themselves as engaged in protecting their communities from criminals and instead as domestic intelligence agents working on behalf of the CIA, they will be encouraged to collect more information,” German said. “It turns police officers into spies on behalf of the federal government.”

    Civil liberties groups also have warned that forthcoming Justice Department rules for the FBI may permit the use of terrorist profiles that could single out religious or ethnic groups such as Muslims or Arabs for investigation.

    Mukasey said the changes will give the next president “some of the tools necessary to keep us safe” and will not alter Justice rules that prohibit investigations based on a person’s race, religion or speech. He said the new guidelines will make it easier for the FBI to use informants, conduct physical and photographic surveillance, and share data in intelligence cases, on the grounds that doing so should be no harder than in investigations of ordinary crimes.

    Rep. Bennie Thompson (D-Miss.), chairman of the House Homeland Security Committee, said that updating police intelligence rules is a move “in the right direction. However, the vagueness of the provisions giving broad access to criminal intelligence to undefined agencies . . . is very troubling.”

    ———

    Staff writers Joby Warrick and Ellen Nakashima contributed to this story

 

Government Executive.com

Link to original article:  http://www.govexec.com/dailyfed/0808/081408rb1.htm

 

Defense audit agency maps out response to damaging report

The Defense Department’s lead contracting oversight unit may have allowed internal performance metrics to compromise the quality of its audits at times, the agency’s director acknowledged in a staffwide memorandum last week.

The missive, one of several obtained by Government Executive, shows the Defense Contract Audit Agency scrambling to repair its damaged reputation after a report by the Government Accountability Office that found supervisors had improperly influenced audits to favor large federal contractors.

In the Aug. 7 memo, which outlined steps DCAA is taking to address GAO’s findings, DCAA Director April Stephenson wrote that the agency will reassess its metrics to determine whether they are appropriate and if they are being implemented correctly. The review is expected to be completed by Sept. 30.

“Metrics should not override audit quality and in some instances we may have let metrics compromise performance of an audit in accordance with the auditing standards,” Stephenson said.

The memo appears to respond in part to allegations of former DCAA auditors published the previous day in a Government Executive report. The article was based on interviews and correspondence with nearly a dozen former employees who said the agency “was broken” and beholden to sometimes arbitrary job performance targets rather than taxpayers.

According to several agency officials, who spoke only on the condition of anonymity, the article quickly circulated in DCAA offices and headquarters, causing concern among supervisors.

“Upper management is seriously scared right now,” said one DCAA employee, who spoke on his cell phone for fear that the agency would check his office line. “Everyone is in duck-and-cover mode.”

In the Aug. 7 memo, DCAA also announced that it would conduct a comprehensive assessment of staffing. The review, Stephenson said, would determine if the agency has the right number of employees and offices, whether offices are in the right locations and whether they are distributed appropriately across DCAA regions.

Stephenson also announced that DCAA would cease participation on integrated product teams due to concerns about audit independence. IPTs, developed in 1995 to streamline the acquisition process, are multidisciplinary teams that make coordinated decisions about requirements, design and source selection. They often include the contractor.

GAO’s report alleged that DCAA had reached an upfront agreement with a large contractor, later revealed to be Boeing Co., to limit the scope of its work and the basis for its audit opinion on a 2002 estimating system. At the same time, DCAA was participating in an IPT that was reviewing the estimating system. GAO found that the final audit opinion had been heavily influenced by the contractor and by an agency manager.

In a detailed, 19-page response to the GAO report, released this week by the nonprofit watchdog group the Project on Government Oversight, DCAA Regional Director Christopher Andrezze said he disagreed with the finding, arguing that DCAA’s independence “was not compromised” through its participation in the IPT.

But in her memo, Stephenson said the agency would err on the side of caution, noting that it is in the “process of issuing guidance on independent audit services that may be provided by DCAA during an IPT.”

This memo was one of three distributed by Stephenson in as many days last week.

In the first, issued on Aug. 6, Stephenson announced that August, already almost one week old, had been designated as audit quality month.

“To recognize this initiative, we request that each office hold a stand down-day this month in which audit quality is discussed as a group,” the memo stated. “The regional director or deputy regional director will participate in these conferences to further emphasize expectations and answer questions or concerns on audit quality.”

The memo included a more general warning that audit quality should not “suffer or be jeopardized by external factors or internal factors (e.g., agency metrics).”

A third memo, sent on Aug. 8, touched on how DCAA employees should handle follow-up investigations of DCAA’s operations. Such reviews are currently being conducted by the Defense Department Inspector General, GAO and the Defense Business Board, an independent panel of corporate executives. DCAA also is conducting its own internal investigation.

“It is imperative that all employees cooperate fully with the reviewers,” Stephenson wrote. “Employees at all levels in the organization should feel free to have open and candid discussion with the evaluators.”

The GAO report alleged that auditors who complied with its investigation were subject to harassment and intimidation from their supervisors.

The Stephenson memos represent somewhat of an about-face for the agency, which initially downplayed GAO’s July 23 report. In their official response to the report, DCAA officials said they disagreed with “totality” of the watchdog agency’s findings and argued that DCAA’s field offices were “operating at a satisfactory level of compliance.”

In his separate 19-page reaction, regional director Andrezze wrote that the agency’s “audit independence was not impacted by pressures from either the contractor or buying command,” although he did acknowledge that working papers did not always support final audit opinions.

And a July 25 letter, signed by Dan Hawkins, senior DCAA auditor, and sent to GAO, Defense Secretary Robert Gates, Sen. Claire McCaskill, D-Mo., and others, claimed the GAO report was “way off base.” McCaskill had called for widespread firings at DCAA as a result of the report.

“DCAA is one of the few government organizations that holds its employees to high standards day in and day out,” Hawkins wrote. “It takes personnel actions against employess that do not perform up to standards. I have seen poor performing auditors come and go. The poor performing auditors always blame management and complain about the lack of budget hours and due dates that cannot be met. It is smoke and mirrors.”

According to several sources who reviewed an internal DCAA personnel directory, there is no Dan Hawkins who works for the agency. The letter also was not printed on DCAA letterhead.

 

 

Comment:

 

I am sure DCAA is feeling quite pressured by now because this has all become public.

 

I do hope that the efforts to communicate with and elicit information and concerns from the employees will not go the way another defense agency’s (DIS/DSS) “plan” did, with employees being told to trust the one doing the surveys and interviews, and that their concerns would be handled professionally, and individuals would not be targeted. 

 

It is my considered opinion, that the person doing the surveys and compilation (Carol Haave) knew how to APPEAR to be using Inclusive Leadership skills, but had no commitment philosophically to the inherent honesty and integrity of the process.  She convinced field personnel across the country to trust her in this process, but then took the information given to her in good faith, and without sharing the results with the participants, scuttled off to the upper management with the information.  Shortly after that, the targeted harassment began of those who had the courage to speak up.

 

Nothing improved and the agency lost many good employees to retirement or resignations, as they did not take kindly to the unprofessional way their concerns were handled.  Those that would speak up, really were trying to help their agency solve problems and make it be the best it could be.  Their experience was most certainly a “no good deed goes unpunished” event.   

 

I wish the DCAA employees luck.

 

-GFS

For Immediate Release
Thursday, August 14, 2008

 

 

20 Million Employees Get Whistleblower Protection 

Consumer Product Safety Reform Signed by President

Washington, D.C. August 14, 2008. Today President Bush signed the Consumer Product Safety Improvement Act. Overwhelming Congressional majorities sent the bipartisan bill to the president’s desk on July 30, after a reaching compromise on several key provisions, including whistleblower protection. This Legislation is Congress’ response to recent massive consumer product recalls, on everything from lead-laden children’s toys to toxic toothpaste, which had angered Americans and prompted calls for reform.

The law includes whistleblower protections approved as part of the Consumer Product Safety Commission Reform Act (H.R. 4040 and S.2663).

The whistleblower provision of the new law will guarantee protection for over 20 million employees involved in the manufacture, distribution, and sale of consumer goods. This protection ensures that employees have the right to report defective and hazardous consumer goods to their superiors or a regulatory agency, such as the CPSC.


Stephen M. Kohn, the President of the National Whistleblower Center issued the following statement on behalf of the NWC:

“This law is a major victory. Today, despite attacks from big business, the interests of American families have prevailed. Finally, employees in the manufacturing industry have the vital whistleblower protections necessary to report hazardous products. Now American regulatory agencies must follow the government’s lead and enforce these critical protections.”


 

The law can be viewed in its entirety HERE

-end-

 

————————————————————————————— 

The National Whistleblower Center is a nonprofit educational and advocacy organization dedicated to helping whistleblowers. Since 1988, the Center has worked with whistleblowers to improve environmental protection, nuclear safety, national security, government ethics and corporate accountability. For more information, please visit www.whistleblowers.org OR www.whistleblowersblog.org

 

Let’s hope this is more than just changing the recruitment catch phrase, and name tag on the door.  -GFS

***********************************************From The Washington Post

‘Stop the Slide,’ Says New Air Force Chief

 

Link:  http://www.washingtonpost.com/wp-dyn/content/article/2008/08/12/AR2008081202864.html?wpisrc=newsletter&wpisrc=newsletter&wpisrc=newsletter

Schwartz Is Blunt About Service’s Failings

By Josh White
Washington Post Staff Writer
Wednesday, August 13, 2008; A02

Gen. Norton A. Schwartz, who began his tenure as the 19th Air Force chief of staff yesterday, has taken a frank view of the service’s need to address recent failures concerning the security of the U.S. nuclear arsenal and acquisitions practices, telling senior leaders in briefings that they need to “stop the slide.”

In two PowerPoint documents used in recent briefings, Schwartz emphasized the need for the Air Force to recapture “top-to-bottom excellence in the nuclear mission,” restore “credibility on Capitol Hill one member (and staff) at a time,” and instill “a compliance culture in key disciplines” such as nuclear, aircraft and missile maintenance and acquisition. Drafts of the internal documents were obtained by The Washington Post and were verified by the Air Force yesterday.

Schwartz has set his sights on restoring the service’s credibility after a series of security and corruption problems that have marred its reputation in the Pentagon and on Capitol Hill.

The Air Force has been sullied over the past year by nuclear mishaps, including the inadvertent transfer of warheads over American skies and the mistaken shipment of nuclear-related materials to Taiwan, incidents that led to a Pentagon report criticizing the Air Force’s safeguarding of the U.S. nuclear arsenal. The Air Force has also been plagued by acquisition problems and purchasing scandals at a time when the Pentagon leadership has pushed the service to focus less on future needs and more on current wars.

“The truth of the matter is, this isn’t exactly how we would have wished to come to this job,” Schwartz said in an interview yesterday. “There have been a number of events that have occurred and collectively have made folks uneasy, and understandably so. Our task, in the near term and in the months ahead, is to get after this, stabilize our situation and recommit ourselves to those things that we know will produce the right outcomes.”

Schwartz said the Air Force should focus on “jointness,” recognizing that the wars the United States is currently waging overseas are primarily fought as ground wars with Air Force support. While he said that will not always be the case — and he encourages Air Force leaders to prepare for all kinds of future battles — Schwartz said there needs to be more attention given to intelligence, surveillance and reconnaissance missions.

In his briefings, which he has begun presenting to senior leaders in recent days, Schwartz also points out that it is unacceptable for anyone in the Air Force to tolerate a bad job or inappropriate activities.

“There is much less room for poor performance and certainly for misconduct,” Schwartz said. “We will be active on this and be surgical if that’s what is needed.”

Schwartz also takes a thinly veiled stab at the Air Force’s recent ad campaign dubbed “Above All,” which aimed to show the Air Force’s importance in the skies and in cyberspace but appeared to argue superiority to the other services. Schwartz, instead, wants to pursue a “For All” approach.

“I think it is safe to say that we see things perhaps a little bit differently,” Schwartz said, adding that “it’s all about what we do for the joint team.”

On his first day on the job, Schwartz publicly pledged to “return the vigor and rigor” to all processes and missions the Air Force carries out, specifically vowing to fix the lapses in the service’s nuclear programs and mandating more support for the other services involved in the “global war on terror.”

“I think, fundamentally, our service is sound,” Schwartz told reporters at the Pentagon yesterday, flanked by Michael B. Donley, acting secretary of the Air Force. “It doesn’t mean we’re perfect. And we certainly have work to do, things to fix, fences to mend. . . . Those areas where others have found fault, we are going to work with a vengeance, and we’ll tidy that up. And the United States Air Force will remain the finest air force on the planet.”

In June, Defense Secretary Robert M. Gates ousted former Air Force secretary Michael W. Wynne and Gen. T. Michael “Buzz” Moseley, then the chief of staff, after concerns about the nuclear deficiencies and contracting scandals peaked. Wynne and Moseley had come under increasing criticism for accountability lapses and for pushing ahead with internal Air Force agendas amid opposition from senior leaders at the Pentagon and the White House.

At a ceremony yesterday morning welcoming Schwartz to the job, Gates said: “He comes into this position at a challenging time. He has said that his goal is to recommit the Air Force to the high standards of excellence that have always been its hallmark. I have no doubt that he will give his all in that cause.”