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Self-Dealing: Even Ex-Federal Watchdogs Are Doing It

(Image: Jared Rodriguez / Truthout)

Part of the Series

Several years ago, I pushed for a revival of the old “Truman Committee” in the US Congress to look at war fraud and profiteering in the Iraq and Afghanistan wars. I had just written a book about the fraud and waste by contingency contractors in the Iraq war and was shocked, even after 30 years of investigating the Pentagon, at how much the government was being cheated, especially at the expense of our troops.

Sens. Claire McCaskill and Jim Webb pushed for a revival of a Truman Committee-style look at our wartime contracting because they, too, were shocked at what they were seeing in these current wars' private contracting. The original Truman Committee exposed and corrected major fraud in World War II while the war was still going on. Truman, then a senator from Missouri, was proud that he found fraud and actually sent a general to jail.

The idea for the committee was to have it run and staffed by a group of current members of Congress, but politics intervened and, instead, the Commission on Wartime Contracting (CWC) was staffed and chaired by appointees from each of the political parties. Even though I promoted this commission in my past life as a Huffington Post blogger because of the desperate need for oversight in this area, I knew that it might have turned out like many other commissions on Department of Defense (DoD) spending that I had witnessed over the years. Without having current, working members of Congress with subpoena and other investigative powers, I feared that this commission would not have the clout to really make a difference and change this destructive contracting. I testified in front of this commission and advised them several times, but could see the politics on the part of the appointees.

The commission did their final report in August of last year and sunsetted itself. The report had some good ideas, but it will probably not make major changes despite some real efforts on the part of the staff and some of the appointed commissioners. But its work has recently been smeared by what the Democratic Co-chair Michael Thibault did within two months of leaving the commission; he went to work for DynCorp, one of the largest and problem-riddled companies that was being investigated by the commission. Thibault, who spent most of his career with the Defense Contract Audit Agency (DCAA) with a short time with private contractors, was appointed to this position by then Speaker of the House Nancy Pelosi. He is now, even before the body is cold, going to take what he has learned about the government's investigations on these contractors, including DynCorp, and help this company to continue to play “hide the ball” from serious government oversight.

His title is vice president of government finance and compliance, although the compliance part is not going to help the government as it so nobly sounds. Instead, as I have witnessed for many years, he will make sure that the government is kept controlled and in the dark on their contracts. I knew of another longtime Congressional investigative staffer who also went to work at a large health company as a compliance officer, and he spent time trying to keep me from finding out about bad contracting and fraud from his company. Among longtime good government investigators, this is simply known as going to the dark side of the force because these once talented investigators cannot serve two masters … the corporation and the interests of the US government.

The company, DynCorp International, is no saint and could use real government compliance. According to the Project on Government Oversight's (POGO) blog:

DynCorp, one of the three primary LOGCAP IV contractors, is currently the 32nd largest contractor in POGO's Federal Contractor Misconduct Database. It has nine instances of misconduct since the early 2000s and $19.6 million in penalties. Readers of POGO's blog are probably familiar with some of DynCorp's checkered history, as are those who saw the 2010 movie “The Whistleblower,” which was based on the harrowing experiences of former DynCorp employee Kathryn Bolkovac.

(Full disclosure: I am the founder of POGO and now serve on their board of directors.)

DynCorp has just added to its sketchy reputation this week by settling a male sexual harassment case for $155,000 while admitting no wrongdoing. The company also had to pay back millions of dollars for cheating the State Department on training Iraqi police, and has had two notorious human trafficking cases.

DynCorp already knows how to buy influence and protection in Washington through the revolving door. Two of the four members of their board of directors are retired generals. In DynCorp's 2010 code of ethics, they claim:

We adhere scrupulously to the highest standards of honesty, integrity, and fairness when engaged in any activity concerning DynCorp International and its relationships with customers, suppliers, and the general public.

We comply with the spirit and letter of all applicable laws and regulations.

When you look at DynCorp's wrongdoing on POGO's contractor misconduct database as referenced above, it is clear that someone didn't get the memo. Or could it be that this is just corporate window dressing? Now, Mr. Thibault can cash in and make big bucks perpetuating this myth.

The writer of POGO's blog hoped that Thibault would use his skilled obtained in his government service as a watchdog to make DynCorp work better. I can tell you he not was hired for that. He was hired to help thwart the government's efforts, however puny, to do oversight on this highly paid and powerful company. You also have to wonder what he did to curry favor with DynCorp while he was the co-chair of the CWC in the midst of their investigations of this company. I guess I won't be able to find out since the CWC records are sealed until 2031 (why?) and, by then, I will be 75 years old.

As I mentioned in another column, I worked with a hot shot Department of Justice lawyer in the 1980s named Richard Sauber. He worked his way through the Justice Department to being appointed a special liaison between the Justice Department and the Pentagon to help prosecute DoD contractor wrongdoing. After telling me that he wanted both of us to make our reputations by cracking the “big case,” he also didn't want to mess with the “crazy” whistleblowers, who would be the people to expose the fraud, and would leave that to me. I declined his offer because I knew what he was probably up to and I was right. Within a short time later, after he learned all the elements of the government's efforts to prosecute contractor fraud, he left the government to work at a private law firm to get contractors out of trouble and specialized in torpedoing whistleblower qui tam False Claims Act cases. (I, too, work on these types of cases, but on the side of the whistleblower and the federal government to recover ill-gotten contractor dollars. I have helped to return over $200 million to the US Treasury.) It has been almost 30 years since Mr. Sauber left his seven-year stint at the Department of Justice and he is still using his knowledge to help contractors beat qui tam False Claims Act lawsuits.

At least Mr. Thibault did this near the end of his career, Mr. Sauber swung through the watchdog revolving door early in his career and I am sure that he is now a very rich man.

I know about this watchdog revolving door case because I knew Mr. Thibault personally. However, this is going on daily under the radar. The Security and Exchange Commission (SEC) oversight personnel have been also blatantly and boldly going through the revolving door to help out delinquent companies.

Michael Smallberg, an investigator for POGO, has been following the SEC watchdog revolving door and here is one of his most egregious findings:

Every SEC enforcement director from the last decade has left the agency to go through the revolving door: Linda Thomsen, Stephen Cutler and Richard Walker. Walker's departure was particularly controversial, because he ended up at Deutsche just after the SEC mysteriously dropped a case against the bank.

It is especially disheartening to me to see the government watchdogs, who have seen the contractor fraud up close and personal, leave the government to advise these wrongdoers on how to beat a government investigation. The government is handicapped enough by not having the money or personnel to do in-depth and thorough investigations, but now they will find some of their former colleagues across the table from them. And they know that these revolving door watchdogs have given away their investigative methods and are, at the least, misleading their former colleagues.

The Solution?

I have written about what to do about the revolving door in other columns, but there should be a special restriction on government watchdogs leaving to work with companies that they were investigating. These former government watchdogs are trained by the federal government and should be forbidden to go to work with any contractor, subcontractor or consulting firm that has any business with their former government agency.

There are many types of post-government jobs for former government watchdogs, including working with whistleblowers and the federal government on whistleblower suits to get money back for the federal government. They can also help alleviate fraud against the government by teaching what they know at universities, so that there will be future generations of government watchdogs who will, hopefully, not go to the dark side of the force and help companies get out of legitimate oversight. This is something that can't be totally legislated; it is also a matter of character, but sometimes the lure of big money breaks through. So, the federal government needs to make stronger rules so the egregious behavior of Mr. Thibault and Mr. Sauber is not repeated over and over.

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