Category Archives: Contractors

Who killed King Joffrey? And what about the State Dept’s “missing” $6 billion?

– Domani Spero

We recently posted about that $6 Billion Alert. What Does The Spox Say? Goring-ding-ding-ding … “Grossly Inaccurate” But …. On April 3, WaPo went with State Department inspector general issues alert over $6 billion in contracting money.  On April 4, TheBlaze.com reported that The State Department Has Lost Track of More Than $6Billion. On April 4, Washington Free Beacon has State Department Misplaced $6B Under Hillary Clinton. On April 6, Fox News (blog) screamed $6 Billion Went Missing From Hillary Clinton’s State Department …. Also on April 6, the Examiner.com - ‎reported State Department $6 billion missing: ‘Creates conditions conducive to fraud’.  On April 8, ABC News (blog) added a twist with Blackwater Named in State Department Probe, Spent $$ on Pricey  On April 9, AllGov has State Dept. Can’t Locate Files for $6 Billion Worth of Contracts. Russia’s RIA Navosti found itself an expert and ran with $6 Bln Vanished from US State Department Due to Corruption – Expert.

Finally ….

 

 

On April 13, ten days after WaPo first reported the $6 billion contracts and just when we could not stop talking about ‘The Lion And The Rose’ episode of ‘Game Of Thrones‘, State/OIG’s Steve Linick wrote to the editors of WaPo “about the State Department’s “missing” $6 billion:

WaPo, Sunday, April 13

The April 3 news article “State Department’s IG issues rare alert” reported on the management alert issued recently by my office. In the alert, we identified State Department contracts with a total value of more than $6 billion in which contract files were incomplete or could not be located. The Post stated, “The State Department’s inspector general has warned the department that $6 billion in contracting money over the past six years cannot be properly accounted for . . . . ”

Some have concluded based on this that $6 billion is missing. The alert, however, did not draw that conclusion. Instead, it found that the failure to adequately maintain contract files — documents necessary to ensure the full accounting of U.S. tax dollars — “creates significant financial risk and demonstrates a lack of internal control over the Department’s contract actions.”

Steve Linick, Washington

The writer is inspector general for the U.S. Department of State and Broadcasting Board of Governors.

 

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Filed under Contractors, Counting Beans, Follow the Money, Govt Reports/Documents, Huh? News, Leadership and Management, State Department

State Department Seeks Contractor For Simulated Congressional Hearing Sessions

– Domani Spero

 

Last month, the State Department’s Foreign Service Institute issued Solicitation #SFSIAQ14Q3002 for a contractor to provide professional training on effective congressional testimony and briefing skills.  The requirement solicitation also includes a requirement for Simulated Congressional Hearing Sessions.

Related post: US Embassy Oslo: Clueless on Norway, Murder Boards Next?

 

Screen Shot 2014-03-09

Below is an excerpt from the solicitation posted on fedbiz:

The purpose of this project is to obtain the services of a contractor to deliver interactive, professional training seminars for senior-level officials on effective congressional testimony and briefing skills. There will be one primary product, a two-day course entitled “PT-302 – Communicating with Congress: Briefing and Testifying.” This course targets government professionals at the GS-14/FS-02 level or higher, who will be testifying before Congress or briefing members or staffers. We will offer this course between three to four times per year. There is a minimum of 10 and a maximum of 15 participants per class.

Secondly, LMS [Leadership Management School] will seek the services of a contractor to deliver training on strategies for building effective relationships with members of Congress and their staffers to participants of the Ambassadorial Seminar (PT-120) and other senior-level courses. The Ambassadorial Seminar is offered to Ambassadors-designate (including both career Foreign Service Officers and political appointees) and their spouses. This seminar normally runs two weeks and includes up to, but not limited to, 14 participants.

Lastly, contractor shall submit additional proposals to deliver hour-long, one-on-one simulated congressional hearing sessions with feedback for individuals as preparation for anticipated congressional testimony. These individuals may or may not be graduates of the Ambassadorial seminar, or they may be or may not be other, senior-ranking government officials.

C.4.1. Communicating With Congress: Briefing and Testifying (PT-302)

  • Provide professional services to design and deliver PT-302, Communicating with Congress: Briefing and Testifying, for senior ranking officers drawn from the Foreign Service, Civil Service, and military. It is expected that the first year will include significant course design work, but that option years will not involve major course design.
  • It shall include the following topics presented by individuals with current or recent Capitol Hill experience. Experience within the past two years is highly desirable.
  • Training and skill-building in briefing techniques;
  • Presentations/discussions on congressional committees and the hearing process
  • Presentations/discussions on tips for leveraging State’s Bureau of Legislative Affairs
  • Presentations/discussions on building effective relationships with Congress members and staffers.
  • It shall also include simulated congressional hearings, at which:
    • Each class member will deliver written and oral briefs/testimony before a panel of experts capable of appropriate questioning and criticism;
    • All briefings/testimony and responses to questions are video recorded;
    • Experts critique the individual briefing/testimony and responses to questions.

C.4.2. Ambassadorial Seminar (PT-120)

  • Provide professional services to design and deliver a three-hour training segment on strategies for building effective relationships with members of Congress and their staffers to participants of the Ambassadorial Seminar (PT-120) and other senior-level courses.
  • This shall be delivered via 1-2 presenters with ample time for questions and answers. If contractor provides two presenters, one presenter shall have current or recent experience on Capitol Hill as a member or staffer (experience within the past two years highly desirable), and the second presenter shall have recent senior-level executive branch service with personal experience in developing successful relationships on Capitol Hill, to include effective congressional testimony and briefing experience (experience within the past three years highly desirable). If contractor provides only one presenter, this presenter shall have both current or recent experience on Capitol Hill as a member or staff, and recent senior-level executive branch service with personal experience in developing successful relationships with Capitol Hill.

C.4.3. Simulated Congressional Hearing Sessions

  • Provide professional services to deliver hour-long, one-on-one simulated congressional hearing sessions with feedback for individuals as preparation for anticipated congressional testimony. These individuals may or may not be graduates of the Ambassadorial seminar, or they may be or may not be other, senior-ranking government officials.

 

The solicitation requires that the contractor/s’ professional qualifications include experience delivering training in a federal government context with senior executive participants; professional experience in working with Congressional staffers and members; current or recent Capitol Hill professional experience. Experience within the past two years is also highly desirable.  For presenters in the three-hour and one-hour sessions, qualifications also include prior service as a senior executive in a federal agency with personal experience briefing and testifying to Congress.  But the government also wants contractors with “knowledge of and experience using adult learning principles in the facilitation and delivery of a course” as well as “expertise in experiential learning methodologies and techniques.”

This should help avoid future incidents of trampling through the salad bowl during a confirmation hearing and save us from covering our eyes.

 

 

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State/OIG Semi-Annual Report to Congress (Apri 1-September 30, 2013)

– Domani Spero

State/OIG submitted its last semi-annual report to Congress signed by Harold Geisel in September. Steve A. Linick took charge of the OIG on September 30, 2013.  The report was not published online until late December.

Via State/OIG

Via State/OIG

Under Oversight Review, State/OIG tells Congress it is conducting an in-depth review of Diplomatic Security’s investigative process.  This is in connection with last year’s allegations that several recent investigations were influenced, manipulated, or simply called off. (See CBS News: Possible State Dept Cover-Ups on Sex, Drugs, Hookers — Why the “Missing Firewall” Was a Big Deal):

The Office of Investigations (INV) is conducting an independent oversight review of certain investigations conducted by the Bureau of Diplomatic Security, Office of Investigations and Counterintelligence, Special Investigations Division (DS/ICI/SID). This is an in-depth review of the DS/ICI/SID investigations to assess the adequacy of the investigative process.

State/OIG also informs Congress that it audited seven posts under the purview of AF that had threat levels ranging from medium to critical. The audit was conducted “to determine to what extent the selected embassies in Africa complied with current physical security standards, and whether management officials at these posts used available authorities to effectively implement the posts’ security programs.” The audit identified physical security deficiencies at Embassy N’Djamena, Chad; Embassy Monrovia, Liberia; Embassy Nouakchott, Mauritania and Embassy Dakar, Senegal.  A brief summary of the audit is posted here but the reports are not publicly available.

The semi-annual report includes an item about the non-compliance of the local guard contractor for Embassy Lilongwe, Malawi, who was required to pay local guards $100 per month supplemental pay in addition to the guards’ regular wages and benefits, based on a provision in the contract. OIG estimated that the amount invoiced by the contractor and not paid to the local guards as of June 2013 could be as much as $1,489,200.

Other items of note:

  • OIG conducted an investigation after receiving allegations of improper activities being committed by a major contractor that provides survey services to the Department and other agencies. The investigation determined that the contractor provided false pricing information to the Department during negotiations for a 5-year, sole source contract worth $25,000,000. OIG led a multi-agency investigation which resulted in the contractor agreeing to pay a $10.5-million civil settlement for improperly inflating Department and U.S. Mint contract prices and engaging in prohibited employment negotiations with a Federal Emergency Management Agency official.
  • OIG conducted a joint investigation with the OIG for USAID into allegations that two foreign real estate companies paid bribes to two LE staff members at the local embassy in order secure U.S. Embassy lease agreements. During the investigation, the company presidents admitted to paying the bribes and both employees were terminated from employment at the embassy. On May 9, 2013, the Office of the Procurement Executive issued six contracting debarments for a period of 3 years in connection with the case, two for each former employee, two for the two firms, and two for the presidents of each firm.
  • OIG conducted an investigation of an assistant regional security officer who submitted a false reimbursement voucher in connection with an extended hotel stay. The investigation determined that the officer knowingly submitted two fraudulent vouchers for reimbursement to the Department and received $14,630.83 to which he was not entitled. On March 11, 2012, The Department of Justice declined criminal prosecution of the officer. On March 28, 2012, the Bureau of Resource Management initiated a collection action against the officer for the full amount of the false claims, and on April 23, 2013, the Bureau of Human Resources issued a 10 day suspension to the officer.

See more Semiannual Report to the Congress April 1, 2013 to September 30, 2013  [1990 Kb]  | Posted on December 30, 2013.

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Filed under Africa, Congress, Contractors, Foreign Service, Govt Reports/Documents, State Department, U.S. Missions, USAID

Couple in State Dept $53 Million Contract Fraud Gets 18-24 Months in Prison

– Domani Spero

In May and September 2013 we blogged about this case (See State Dept Contract Employee/Husband Indicted For Alleged Secret Scheme to Steer More Than $60 Million Contracts to Their Company and Ex-State Dept Contract Employee And Husband Plead Guilty To $53 Million Fraud. The Daily Caller broke this story in July 19, 2013.  The contractor, Kathleen McGrade was reportedly fired the day after.

Last week, the same couple at the center of this contracting fraud was sentenced by U.S. District Judge Liam O’Grady in the Eastern District of Virginia.  Kathleen D. McGrade, age 64, and Brian C. Collinsworth, age 47, of Stafford, Va., were sentenced to 24 and 18 months incarceration, respectively.  Given that each defendant faced a maximum penalty of 360 months or 30 years imprisonment, the 18-24 months incarceration is a bargain.

WaPo reports additional details during the sentencing:

In a lengthy speech before she was sentenced, McGrade offered various explanations for her misdeeds and told a federal judge in Alexandria that she was in court only because she had “been told that somehow the procurements that took place were illegal.”
[…]

As O’Grady handed down the two-year sentence — far short of the five years and 10 months that federal sentencing guidelines had called for as a minimum — he said McGrade had nearly persuaded him to impose a stiffer penalty.

“That was almost a delusional recitation of what has occurred here,” O’Grady said. “To convince yourself that it’s everybody else’s fault is astonishing, given the facts of this case.”

Via USDOJ:

Former State Department Contract Employee And Husband Sentenced For $53 Million Fraud | December 6, 2013

ALEXANDRIA, Va. – Kathleen D. McGrade, age 64, and Brian C. Collinsworth, age 47, of Stafford, Va., were sentenced today to 24 and 18 months incarceration, respectively, by U.S. District Judge Liam O’Grady in the Eastern District of Virginia for committing major fraud against the government, conspiracy to launder monetary instruments, and engaging in unlawful monetary transactions.

Dana J. Boente, Acting United States Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the Department of State; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Section, Washington, D.C. Field Office, made the announcement following the sentencing hearing.

According to Court records, McGrade and Collinsworth admitted that McGrade was a contract employee for the Department of State and performed the role of a contract specialist for an office that awarded construction contracts for work done at U.S. embassies worldwide.  Collinsworth worked at one of the companies that received contracts.  In 2006, the defendants married, but did not tell others at the Department of State.  The defendants started a company, the Sterling Royale Group, or SRG, with McGrade being the president and Collinsworth the vice-president and project manager.

In late 2007, McGrade caused a State Department contracting officer to sign a contract between the Department of State and SRG, when McGrade failed to disclose her role in SRG, her marriage, or that proper contracting competitive procedures had not been followed.  The contract made SRG eligible to receive task orders for work to be done at embassies and McGrade  began steering work to the company.  She acted as the contract negotiator between the Department of State engineers responsible for getting the jobs done, on the one hand, and Collinsworth, who was acting on behalf of SRG and the subcontractors, on the other.  Between 2008 and 2011, McGrade caused  Department of State contracting officers to sign 17 task orders awarding work worth almost $53 million.  In 2010, the defendants also lied about their marriage to investigators conducting McGrade’s background investigation regarding renewal of her security clearance.

In the summer of 2011 a news article disclosed the defendants’ marriage, and the Department of State terminated her employment.  The Department of State, however, had paid SRG about $39 million, and after the defendants had paid their subcontractors, they still had millions of dollars.  Among other things, they bought houses, a condominium, a yacht, a Lexus automobile, jewelry, and a Steinway piano with the fraudulently obtained money.  The defendants were ordered to forfeit all of those items in the amount of $7,864,795.

This case was investigated by the Department of State, Office of Inspector General, and the Global Illicit Financial Team, a task force led by the Criminal Investigation Section of the Internal Revenue Service.  Assistant United States Attorneys Jack Hanly and Mark D. Lytle are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

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Filed under Contractors, Court Cases, Federal Agencies, Follow the Money, Hall of Shame, State Department

Snapshot: Top 10 State Department Contractors FY2013

Via USASpending.gov

Screen Shot 2013-10-16 at 11.41.14 AM

 

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Diplomatic Security Wiki: All Things DS — Deaths, Heroism, Authors, Videos and Black Dragons

– By Domani Spero

 

One of our readers pointed us to a new wiki on all things Diplomatic Security.  DS Wikipedia is described as “an unofficial, non-US government affiliated wiki for both the Bureau of Diplomatic Security and the Diplomatic Security service – more commonly known as DS.”

Updated on 10/1 at 10:02 am – The site’s name has been changed to Diplomatic Security Wiki - http://www.diplomaticsecuritywiki.com; a contact page has also been added for the wiki administrator.

Why was it created?  “This Wiki was created to provide a common location to put information that would not meet Wikipedia normal submission guidelines. Specifically, it was originally created to hold a page for DS affiliated personnel who were killed in the line of duty. Although originally on Wikipedia, the page was deleted by editors because it was considered to be a memorial page.

Its Bureau of Diplomatic Security Personnel Killed in Action page includes not just direct-hire employees, but also local guard force (LGF) casualties and security contractors killed in the line of duty. An overwhelming number of casualties are local guards and security contractors. It includes the names of local guards killed in the attack of US Embassy Lebanon in 1983, and those who perished in the East Africa embassy bombings in 1998.  The last few entries include Mustafa Akarsu, a local guard killed during a suicide bombing at US Embassy Ankara this year, Qassim Aqlan, a local RSO investigator assassinated in Sana’a, Yemen in 2011, and three yet unnamed contract security guards killed during a rocket attack at the US Embassy Iraq compound in 2010.

The wiki’s Host Country Police Killed in Action Defending US Facilities includes the identities of the three Turkish National Police who died during a shootout with attackers at the US Consulate in Istanbul on July 9, 2008. It also includes the names of the two Uzbek National Police who died defending the US Embassy during a suicide attack on July 30, 2004. Unfortunately, with the attack on the US Consulate in Herat on September 13, 2013, this site’s volunteers will need to add one more name on this list and eight names to the KIA page. (US Consulate Herat Casualties: One Afghan Police, Eight Local Guards Killed).

The wiki also has a list of Diplomatic Security Service Special Agent Heroism Award Recipients.  And there’s a link to Diplomatic Security Service Agents Turned Author.  Another section in the wiki includes links to Videos of Diplomatic Security Mentions in Film and TV.  Below is George Clooney playing Jim Byrd who claims to be working for the Diplomatic Security Service while recruiting Chuck Barris in Confessions of a Dangerous Mind (2002).

And long before FS bloggers discovered the “tigers” who occasionally go after them, Diplomatic Security has its own “black dragons.”

The DS Wiki has an entire page dedicated just for Black Dragons – Slang For Anti-Security Department of State Management

As referred to by DS personnel, “Black Dragons” are senior Department of State personnel with the ability to influence Diplomatic Security programs and personnel. Black Dragons view security as the antithesis of diplomacy. In the history of Diplomatic Security, Black Dragons have reduced personnel ranks whenever possible, gave away protective responsibilities for Heads of State/Heads of Government to the USSS in 1971[1] and formally considered shutting down DS field offices and giving the investigative role of DS to the FBI.[2][3][4]

The investigation into the death of Ambassador Christopher Stevens during the 2013 Benghazi attack highlights the negative effects of the black dragons on security. Security support was minimized or eliminated in Libya despite repeated requests from the US Mission to maintain additional security personnel.

We have never seen a State Department public list of  non-American employees/US contractors killed in the line of duty.  While the names of US contractors sometimes make the news, non-US casualties typically do not.  This wiki page does not include the name or names of its administrator or volunteers so there’s no easy way to contact them.  But whoever thought to create this wiki and put in the hours of labor deserves our thanks for trying to account for the individuals who gave their lives protecting our posts overseas.

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Filed under Contractors, Diplomatic Attacks, Diplomatic Security, Foreign Service, Locally Employed Staff, Realities of the FS, Security, State Department

Special Immigrant Visa (SIV) Program for Iraqi Nationals to End Sept 30, Or How to Save One Interpreter At a Time

– By Domani Spero

In June this year, we blogged about the potential termination of the SIV program for Iraqis who have worked for or on behalf of the U.S. Government in Iraq (See Iraqi Special Immigrant Visa Program: Potential Termination on September 30, 2013). The recent OIG inspection report on the US Embassy in Baghdad and it constituent posts indicate that the impending termination of Iraqi SIVs at the end of September this year has not been publicized because US Embassy Baghdad, and the Bureaus of Consular Affairs (CA), and Population, Refugees and Migration (PRM) expect the program to be extended.

On September 12, USCIS sent a reminder and issued a statement that authorization for the Special Immigrant Visa (SIV) program for Iraqi nationals who worked for or on behalf of the United States government will expire on Sept. 30, 2013. Individuals applying under this program, including family members, must be admitted to the United States or adjust their statuses before Oct. 1, 2013.

The program was created by Section 1244 of Public Law 110-181, as amended by Public Law 110-242. It covers Iraqi nationals who—during the period between March 20, 2003, and the present—have been employed by or on behalf of the United States government in Iraq for a period of not less than one year. The expiration date also applies to spouses and unmarried child(ren) accompanying or following to join the principal applicant.

As announced at its inception, the Iraqi SIV program will expire on Sept. 30, 2013, at 11:59 p.m. EDT unless Congress extends the program. After Sept. 30, 2013, USCIS will reject any petitions or applications filed based on the Iraqi SIV program. Beginning Oct. 1, 2013, USCIS will suspend processing of any pending Form I-360, Petition for Amerasian, Widow(er), or Special Immigrant, or Form I-485, Application to Register Permanent Residence or Adjust Status, filed based on the Iraqi SIV program.

For updates, please check our website at www.uscis.gov or call the National Customer Service Center at 1-800-375-5283. You can also find useful information on the U.S Embassy in Iraq’s website at http://iraq.usembassy.gov/siv-special.html.

If the program will expire in three weeks, and the individual has to be admitted to the United States before October 1, 2013, the door is left with just a crack.  Who can get an SIV in three weeks and slip into that crack?

Matt Zeller,  a United States Army veteran of the Afghan War and a Fellow with the Truman National Security Project writes about a specific visa case, under a similar program in Afghanistan:

From 2011 until July 2013, Janis waited for word that the State Department had approved his visa. Several times the US embassy in Kabul asked him to file additional paperwork and even appear for medical and personal interviews. At every appointment Janis would ask how much longer the process would take, but no one could ever give him a more specific answer other than “months to years.”[...] Going through this complicated process educated me beyond imagination. I’m convinced that the current visa program, while well intentioned, cannot succeed as designed. [...] for Janis to receive his visa, organizations such as the FBI, Homeland Security, and State Department all had to individually approve his visa application during their security background investigation, using their own individual opaque databases.

Read One Veteran’s Battle to Bring His Afghan Interpreter to the United States.

Something else Mr. Zeller did.  He started a Change.org petition and he and Janis did media interviews (by phone from Kabul). Yahoo! News reportedly published the first story about Janis on Sept. 6, and within hours the petition had thousands of signatures.  Here is the HuffPo Live video interview.

Mr. Zeller, a forceful advocate for the person who saved his life also asked supporters to contact their members of Congress and get these elected officials to write and call the U.S. Embassy in Kabul, the State Department, and anyone else they thought could help expedite Janis’ visa for approval. Note that visa petitions are approved by DHS, once approved, only then can visas be issued by State.  By the time it was over, and 104,588 signatures later, Mr. Zeller won his campaign to secure a visa for Janis Shinwari, his interpreter while he was in Afghanistan.  Now he is on a mission to save his other interpreter, Ehsan.

We admire what Mr. Zeller is doing for his interpreters.   But we worry about applicants who qualify for SIVs both in Afghanistan and Iraq but do not have vocal advocates for their cases.   In a perfect world, we don’t need a Matt Zeller or a change.org for the US Embassy in Kabul or Baghdad to issue these visas.  But the fact that Janis received a visa after a change.org petition and after a lot of press noise, tells us something folks already know — the system is not working as it should but one person can make a difference.   If Mr. Zeller can  replicate this campaign with Ehsan’s case, we suspect that in short order, the State Department will be swamped with similar campaigns.

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Filed under Afghanistan, Contractors, Defense Department, Iraq, Learning, Security, State Department, U.S. Missions, Visas, War

Ex-State Dept Contract Employee And Husband Plead Guilty To $53 Million Fraud

– By Domani Spero

We have previously posted about this case in May 2013 (See State Dept Contract Employee/Husband Indicted For Alleged Secret Scheme to Steer More Than $60 Million Contracts to Their Company).

On August 2, the USDOJ announced that the former contract employee Kathleen D. McGrade, age 64, and her husband, Brian C. Collinsworth, age 47, of Stafford, Va., pleaded guilty to major fraud against the government. Sentencing is scheduled for November 2013. Each faces a maximum sentence of 30 years imprisonment. The Daily Caller who broke this story in 2011 says that McGrade was a contractor working for the State Department’s office of Overseas Building Operation.

Via USDOJ:

ALEXANDRIA, Va. – Kathleen D. McGrade, age 64, and Brian C. Collinsworth, age 47, of Stafford, Va., pleaded guilty today to major fraud against the government, conspiracy to launder monetary instruments, and engaging in unlawful monetary transactions.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Harold W. Geisel, Acting Inspector General for the Department of State; and Thomas J. Kelly, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Section, Washington, D.C. Field Office, made the announcement after the plea was accepted by United States District Judge Liam O’Grady.

“Defendants McGrade and Collinsworth- now convicted felons-defrauded and stole from the American people, plain and simple,” said U.S. Attorney Neil H. MacBride.  “We, along with our law enforcement partners, are committed to ferreting out and prosecuting those that destroy the integrity of the government contracting process.”

“I commend our investigators on their excellent work in this case, and diligence in protecting taxpayer dollars,” said Harold W. Geisel, Acting Inspector General, U.S. Department of State and Broadcasting Board of Governors.

“The scope and breadth of this fraud is reprehensible, not just because of the dollars involved, but because of the position of trust that Ms. McGrady held,” said Special Agent In Charge Kelly.  “Her actions denied small businesses the opportunity to compete for these government contracts and that is unacceptable.  Today’s pleas put corrupt business owners like Ms. McGrade and Mr. Collinsworth on notice, that the government will get to the truth no matter how they try to disguise their business transactions.  IRS-CI will continue to work with the United States Attorney and our other law enforcement partners to root out these corrupt business owners.”

McGrade and Collinsworth were indicted on April 25, 2013, by a federal grand jury on charges of conspiracy, major fraud against the government, wire fraud, false statements, and engaging in unlawful monetary transactions.  Each defendant faces a maximum penalty of 30 years imprisonment when they are sentenced on November 8, 2013.

In a statement of facts filed with the plea agreement, the defendants admitted that McGrade was a contract employee for the Department of State and performed the role of a contract specialist for an office that awarded construction contracts for work done at U.S. embassies worldwide.  Collinsworth worked at one of the companies that received contracts.  In 2006, the defendants married, but did not tell others at the Department of State.  The defendants started a company, the Sterling Royale Group, or SRG, with McGrade serving as the president and Collinsworth the vice-president and project manager.

In late 2007, McGrade caused a State Department contracting officer to sign a contract between the Department of State and SRG, and McGrade failed to disclose her role in SRG, her marriage, or that proper contracting competitive procedures had not been followed.  The contract made SRG eligible to receive task orders for work to be done at embassies and McGrade  began steering work to the company. She acted as the contract negotiator between the Department of State engineers responsible for getting the jobs done, on the one hand, and Collinsworth, who was acting on behalf of SRG and the subcontractors, on the other.  Between 2008 and 2011, McGrade caused  Department of State contracting officers to sign 17 task orders awarding work worth almost $53 million.  In 2010, the defendants also lied about their marriage to investigators conducting McGrade’s background investigation regarding renewal of her security clearance.

In the summer of 2011, a news article disclosed the defendants’ marriage and the Department of State terminated her employment.  The Department of State, however, had paid SRG about $39 million, and after the defendants had paid their subcontractors, they still had millions of dollars.  Among other things, they bought houses, a condominium, a yacht, a Lexus automobile, jewelry, and a Steinway piano with the fraudulently obtained money.  The defendants have agreed to forfeit all of those items.

This case was investigated by the Department of State, Office of Inspector General, and the Global Illicit Financial Team, a task force led by the Criminal Investigation Section of the Internal Revenue Service.  Assistant United States Attorneys Jack Hanly and Mark Lytle are prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.

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Filed under Contractors, Corruption, Court Cases, Hall of Shame, State Department

CBS News: Possible State Dept Cover-Ups on Sex, Drugs, Hookers — Why the “Missing Firewall” Was a Big Deal

– By Domani Spero

In March 2013 we posted this: State/OIG on Diplomatic Security’s Special Investigations Division – The Missing Firewall.

The OIG recommends that the Office of the Deputy Secretary (presumably the incoming D/MR who succeeds Mr. Nides) should “restructure the investigative responsibilities currently assigned to the Special Investigations Division. The outcome should include safeguards to prevent any Department of State or Diplomatic Security official from improperly influencing the commencement, course, or outcome of any investigation.”

At that time we thought it would have been interesting to know which cases were alleged to have been interfered with.  Now, we may be close to knowing or something.

And because it’s Monday, here’s the news that could totally wreck your day if you work in Foggy Bottom.

CBS News’ John Miller reports that according to an internal State Department Inspector General’s memo, several recent investigations were influenced, manipulated, or simply called off. The memo obtained by CBS News cited eight specific examples.

Memos showed that probes included allegations of:

  • A State Department security official in Beirut “engaged in sexual assaults” on foreign nationals hired as embassy guards
  • Members of former Secretary of State Hillary Clinton’s security detail “engaged prostitutes while on official trips in foreign countries” — a problem the report says was “endemic.”
  • An “underground drug ring” was operating near the U.S. Embassy in Baghdad and supplied State Department security contractors with drugs.
  • The case of a U.S. Ambassador who held a sensitive diplomatic post and was suspected of patronizing prostitutes in a public park.
  • Investigation into an ambassador who “routinely ditched … his protective security detail” and inspectors suspect this was in order to “solicit sexual favors from prostitutes.”
  • “We also uncovered several allegations of criminal wrongdoing in cases … some of which never became cases,” said Aurelia Fedenisn, a whistleblower and former investigator for the Inspector General.

Apparently, DSS agents told the Inspector General’s investigators that senior State Department officials told them to back off;  a charge that Aurelia Fedenisn, a former investigator with the State Department’s internal watchdog agency, the Inspector General, told Miller is “very” upsetting.

It would have been nice if this were corroborated  by somebody who worked at DSS. Oh, hey, look:

John Miller spoke with Mike Pohelitz, a retired Senior Agent at the DSS who was involved in one of the cases listed in the Inspector General’s memo. Pohelitz said he was told to stop investigating one of the cases and that the order likely came from the upper ranks of the DSS.

“I got the information through my DS channel,” he told Miller. “But it had to come from somebody higher than DS, I’m sure.”

Read the full CBS report here.

Screen Shot 2013-06-10

Click on image to go to CBS News

Below is the published report the CBS news is referring to; dated February 28, 2013 and posted online on March 15, 2013, sanitized for public consumption:

-02/28/13   Inspection of the Bureau of Diplomatic Security, Office of Investigations and Counterintelligence, Divisions of Special Investigations, Criminal Investigations, and Computer Investigations and Forensics (ISP-I-13-18)  [330 Kb] DS/CI/SID (ISP-I-13-18)

Here is an excerpt from that report:

The Bureau of Diplomatic Security (DS) Special Investigations Division (SID), which investigates allegations of criminal and administrative misconduct, lacks a firewall to preclude the DS and Department of State (Department) hierarchies from exercising undue influence in particular cases.

In all matters relating to investigative work, the investigative organization needs to be free, in fact and appearance, from impairments to independence in both organization and attitude. Such independence is essential so that an organization’s decisions about obtaining evidence, conducting interviews, and making recommendations will be impartial and viewed as such by knowledgeable third parties. The credibility of the Department’s investigative organizations and disciplinary system depends on that independence, yet the perception exists among knowledgeable parties that external influences have negatively affected some SID investigations.

SID is one of many offices that report up the normal chain to the principal deputy assistant secretary and director of the Diplomatic Security Service. Foreign Service special agents in SID, 80 percent of whom are junior in rank, ordinarily serve only one tour as an investigator. Subjects of their investigations may include more senior DS agents; other senior DS agents are sometimes hostile witnesses for interviews. The SID supervisors also are in the DS mainstream and subject to regular “up or out” assignment and promotion processes. During inspection interviews, nearly every SID special agent acknowledged being aware that one or more suspects, witnesses, or senior Department officials could one day serve on a promotion board or on a DS assignment panel that would decide the investigator’s career prospects. Although most investigators said that they had not experienced career pressure in any particular cases, some had indeed felt such pressure. Several special agents in SID observed that Civil Service agents with sufficient rank are less susceptible to such pressure, as their careers do not depend on DS assignment panels or Foreign Service promotion boards.

Inspectors observed that the Central Intelligence Agency, Department of Justice, and U.S. Secret Service internal affairs investigative offices all have protections in place to insulate sensitive internal investigations from even the perception of interference. The current SID structure does not foster independence from career pressures and creates significant potential for undue influence, favoritism, and potential retribution. Various corrective mechanisms may be possible. U.S. Government investigative experts from outside the Department could offer helpful structural benchmarks.

We checked with the OIG for comments and this is what we received:

  • The final report on DS/CI/SID (ISP-I-13-18) was published, distributed and posted on the OIG Website in February 2013 (http://oig.state.gov/documents/organization/206520.pdf) (Note: Actually posted online on March 15, 2013, see link above)
  • During the course of an OIG audit or inspection, if allegations of misconduct are received, it is standard procedure to refer them to OIG’s Office of Investigations.
  • It is OIG policy not to comment on on-going work.
  • On its own initiative, OIG’s Office on Investigations has been conducting an independent review of allegations referred to it by our Office of Inspections.
  • OIG has staffed the review appropriately and independently.
  • OIG wants to emphasize the sensitive nature of OIG inspection information, particularly when it pertains to individuals and may be incomplete or contain unverified, raw data.  Fairness and due process preclude OIG from further comment.

So that’s the official word.

But see, now you know why the missing firewall was a big deal. It’s the only thing “missing” that can either haunt you or go kaboom.

The tricky thing here is the whistleblower, Aurelia Fedenisn, is a former investigator with the State Department’s internal watchdog agency, the Inspector General.  While we would like to know why she is now a former investigator after 22 years of service, that is not nearly as important as the alleged manipulation of investigative cases.

And even as the  “OIG’s Office on Investigations has been conducting an independent review of allegations” on its “own initiative,” we do not think that it would be the appropriate for the Office of the Inspector General to be investigating the alleged cover-ups of these investigations.  

(._.)

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Filed under Ambassadors, Contractors, Diplomatic Security, Foreign Service, Govt Reports/Documents, Leaks|Controversies, State Department

State Dept Seeks Drug/Steroid Testing of Security Personnel in Afghanistan and Jerusalem

The State Department is looking for a contractor to provide drug and steroid screening of all Diplomatic Security employees in Afghanistan and Jerusalem. The announcement was posted on FedBiz on Apr 29, 2013  per Solicitation Number: RFI(04292013):

Via FedBiz

The Department of State (DoS) Office of Diplomatic Security (DS) is concerned with the well-being of its employees, the successful accomplishment of agency missions, and the need to maintain employee productivity. Many of the DS-hired U.S. Citizen (USC) and Third Country National (TCN) direct hire and/or contract positions in Afghanistan and Jerusalem involve the use of weapons and access to highly sensitive information that must not be compromised. It is critically important that such armed employees, or those employees exposed to extreme conditions, be reliable, stable, and show good use of judgment. Illegal drug and steroid use creates the possibility of coercion, influence, and irresponsible action under pressure, all of which may pose a serious risk to national defense, public safety, and security. Prior to deployment, all employees certify that drug testing and steroid screening is a nonnegotiable condition of employment.

This performance work statement defines the drug and steroid testing requirements (hereinafter referred to as “Substance Screening”) applicable to DS-hired USC and TCN direct hires and/or contract positions in Afghanistan and Jerusalem. In this document, DS will be referred to as the DS who will receive support from the Contractor. Employee will be the all-encompassing term for DS direct hires, personal services contractors, or third party contractors.

Below is part of the Scope of Work posted with the solicitation:

The Contractor shall be licensed to operate through the Government of the Islamic Republic of Afghanistan (GIRoA) and Government of Israel, and shall be in full compliance with host country business requirements. The Contractor will be self-sufficient and required to provide all life support, travel and security needs for staff. In addition, the Contractor shall support all shipping, maintenance, and housing of equipment necessary to perform services. The Contractor will provide all resources to perform random and non-random Substance Screening, preferably at the following locations, with the corresponding number of estimated employees:

• Kabul: 1300
• Mazar e-Sharif: 150
• Herat: 175
• Jerusalem: 55

Random screening will be on a semiannual basis (every six months) as well as non-random substance testing. All random and non-random substance testing performed shall comply with Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules (http://www.hhs.gov/ocr/privacy/hipaa/understanding/summary/i

[...]

The Contractor shall be prepared to test for the following drugs utilizing a rapid urine test in Afghanistan and/or Israel, except for Steroid:

  • Amphetamine
  • Opiate
  • Benzodiazepine
  • Barbituates
  • Cocaine
  • Marijuana
  • Steroid: Refer to the following commonly abused steroids on the National Institute on Drug Abuse’s (NISA) website or at Steroidabuse.gov.

Security contractors in Afghanistan, particularly those in Kabul  have a um… colorful history (see POGO writes to Secretary Clinton about US Embassy Kabul Guards) so it’s only surprising that it took this long.  But it is  curious about Jerusalem though, isn’t it? Anyone knows what prompted this?

Update:  We understand from a blog pal that this may not be anything new as apparently drug screening is routinely done for “high threat protection” contractors.  Jerusalem has protection contractors that predates both Iraq and Afghanistan as it covers all official travel to Gaza and the West Bank.  But according to a Q&A posted online on FedBiz, these drug tests have not been performed in Israel in the past.

 

– DS

 

 

 

 

 

 

 

 

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Filed under Consul Generals, Contractors, Diplomatic Security, Foreign Service, Functional Bureaus, Security, State Department, US Embassy Kabul