IEC Journal

GAO Sustains Lockheed Martin's Protest Based On Bias Of Druyun

The Government Accountability Office (GAO) sustained Lockheed Martin's protest of the Air Force's award of the small diameter bomb (SDD) program to Boeing due to irregularities in the procurement process with respect to the actions of former AF acquisition official, Darleen Druyun.  GAO ruled that the AF failed to provide compelling evidence that Druyun's bias in favor of Boeing did not influence the decisions leading to the award of the SDD contract to Boeing. Download gao_lockheed_martin_corporation_b295402_february_18_2005.htm

Outsourcing of Federal Ethics Counselor Jobs?

Could the federal government contract out ethics counselor jobs under OMB Circular A-76? The Febrary 2005 issue of The Federal Lawyer, a publication of Federal Bar Association, has an article exploring the legal issues involved in contracting out lawyer jobs. Much of the analysis applies equally well to non-lawyer ethics counselors. Unfortunately, the magazine is only available in paper format, but it is worth tracking down a copy if this issue arises in your organization.

Limiting Activity of Elected Official /Employee

Most ethics counselors have come across a situation where a federal employee wants to run for political office. The Washington Post reports on a more unusual Hatch Act-type situation. Department of Defense rules prevent a reservist serving in Iraq who is also an elected official in the Maryland legislature from giving a videotaped address to the Maryland House of Delegates on Monday. The Post article says:

Brown recorded the speech in Baghdad last month after obtaining clearances from military authorities. The address, given in honor of George Washington, is part of the House's recognition of the Presidents' Day holiday.

GAO Decision on Tainted Procurement

A recent Government Accountability Office opinion and related Washington Post article provide dramatic illustrations of:

1. The potentially devasting effect of a conflict of interest, which in this case damaged a $2.7 billion dollar program, and
2. The importance of documenting ethics advice given to employees departing government service and exercising care in contemporaneous oral remarks.

GAO's February 18, 2005 opinion in a bid protest case (Lockheed Martin Corporation, B-295402) involves former senior Air Force procurement official Darlene Druyun's work on a $2.7 billion "small-diameter-bomb" procurement. Here's GAO's summary of the decision:

Where the record shows that performance requirements, and associated evaluation criteria, were altered to delete a significant requirement and an evaluation factor under which the protester was viewed as having an advantage, and a senior procurement official, who was involved in discussions that culminated in the deletion of the requirement, has acknowledged bias in favor of the ultimate awardee, the protest is sustained on the basis that the agency has failed to demonstrate that the senior official's acknowledged bias did not prejudice the protester and that the integrity of the procurement process was not compromised.

The standard used by GAO is of crucial importance. Once a conflict of interest is demonstrated, GAO places the burden on the agency to provide "compelling evidence" that the conflict did not affect the procurement. It will usually be difficult or impossible for an agency to meet this burden:

In addressing organizational conflicts of interest, our Office has held that, where the record establishes that a conflict exists, we will presume that the protester was prejudiced, unless the record establishes the absence of prejudice. See The Jones/Hill Joint Venture, B-286194.4 et al., Dec. 5, 2001, 2001 CPD  194; TDF Corp., B-288392, B288392.2, Oct. 23, 2001, 2001 CPD 178. Similarly, where, as here, the record establishes that a procurement official was biased in favor of one offeror, and was a significant participant in agency activities that culminated in the decisions forming the basis for protest, we believe that the need to maintain the integrity of the procurement process requires that we sustain the protest unless there is compelling evidence that the protester was not prejudiced. See Department of the Air Force--Request for Recon., B-234060, B234060.2, Sept. 12, 1989, 89-2 CPD 228. As discussed below, the agency has failed to provide compelling evidence that Druyun's bias in favor of Boeing did not influence the various decisions leading to the award of the SDD contract to Boeing.

One section of the GAO opinion concerning testimony from a retired Air Force officer is of particular interest to ethics counselors. Lawyers representing Boeing pointed to alleged conflicts of interest by an Air Force brigader general who had retired and gone to work for Lockheed Martin. The phrase "30-day letter" is a reference to written ethics advice that was given to the general before separation from military service. "SJA" means Staff Judge Advocate, a senior military lawyer:

At the GAO hearing, [deleted] testified that, notwithstanding the above-quoted advice within the "30-day letter" that "Restrictions under other laws that have not been addressed in this opinion may apply to you" and that notwithstanding the specific reference to the restrictions of 18 U.S.C. 207(a)(1), (a)(2), he was subsequently advised, orally, by the SJA "not to worry about it," and that these provisions were only put into the letter to "Cover their butt."

A related story in today's Washington Post purports to identify the "deleted" witness. The Post quotes an Air Force spokesman as saying that the laissez-faire attitude described by the witness "is absolutely not a reflection of Air Force attitude or policy." A Lockheed Martin spokesman told the Post "We are confident we fully complied with all applicable post-government-employment regulations."

Training for Officers of Associations

The Federal Bar Association will co-sponsor a March 11 CLE program on Training for Officers of Professional Associations of Federal Employees in Washington, DC. The program will include discussion of 18 U.S.C. 203 et seq. and 5 C.F.R. 251.101 to 251.302.

The presenters are William Bransford, General Counsel, Senior Executives Association; Partner, Shaw Bransford et. al.; Susan Winchell, Assistant General Counsel, Office of Government Ethics, William Hughes, General Counsel, National Association of Federal Veterinarians; and Susan J. Court, Chief of Staff, Federal Energy Regulatory Commission (former DAEO 2001-2004). The three hours of CLE credit will include one ethics hour. The registration deadline is March 4.

OGE Training Film to be Shown at March IEC Meeting

OGE's new training film, "Get Advice or Pay the Price," will be shown at our meeting next Thursday, March 3rd.  For additional information on this new film, please see the posting below.  For additional information on Thursday's meeting, please see the February 22nd reminder, also posted below. 

Because of disruptions caused by yesterday's snow and resulting school closings yesterday and today, pre-registration for the March 3rd meeting is being extended.  IEC members interested in attending can pre-register by sending an e-mail to Patrick Carney by COB, next Monday, February 28th.

Pentagon Investigating Former Officials for Post-Government Employment Rule Violations

Defense Department Criminal Investigation Service officials have confirmed that they are investigating a pool of former senior military and civilian Department of Defense officials, mainly in the acquisition field, now working for government contractors for possible violations of federal conflict of interest statutes and related regulations.  This investigation, known at the Pentagon as the "Senior Official Project", was launched about eight months ago.   Investigators are using data-mining technology to identify possible violators who managed federal contracts with their future government contractor employers.

The Eastern District of Virginia federal prosecutor overseeing a newly-formed Procurement Fraud Working Group has praised the Department of Defense investigation and urged non-Defense federal agencies to do similar reviews.

For more information, see http://www.govexec.com/dailyfed/0205/022405g1.htm

OGE's New Training Video Available

The Office of Government Ethics announced in its latest DAEOgram the availability of a new training video entitled, "Get Advice or Pay the Price."  Each DAEO will be shipped one free copy from which additional copies may be made.  Download dt05003.pdf

Army Job Opening

The Department of the Army has an opening for a GS-14 Attorney-Advisor (General) to serve as Principal Assistant to the Chief, Standards of Conduct Branch, Office of the Judge Advocate General, in Arlington, VA.  The position closes March 23rd. 

Duties will include formulation and planning of the standards of conduct program in the Army, implementing the Ethics in Government Act of 1978 and the Ethics Reform Act of 1989, and regulations promulgated by the Office of Government Ethics for the executive branch, Army-wide.

Incumbent maintains currency in legal policy and developments in government ethics. Researches, analyzes, and drafts changes to Army regulations and other publications which implement ethics or ethics-related statutes and regulations, or which establish Army standards of conduct policy and requirements, or which explain them. Incumbent has responsibility to monitor the Army-wide administration of Public Financial Disclosure Reports (SF 278) and Confidential Financial Disclosure Reports (OGE Form 450 and 45O-A) to assure compliance with the Ethics in Government Act of 1978 and the Ethics Reform Act of 1989 by covered DA civilian employees and military members.

·  The minimum qualification requirements must be met before applicants are eligible for further consideration.

·  Education: An applicant must have successfully completed a full course of study in a school of law accredited by the American Bar Association (ABA) and have the first professional law degree (LLB or JD).

·  Bar Membership: An applicant must currently be a member in good standing of the bar of a state, territory of the United States, District of Columbia, or Commonwealth of Puerto Rico.

·  Experience: Applicant must have two or more years of professional legal experience, acquired after being admitted to the bar, commensurate with the duties and responsibilities of the position. Graduation from an ABA-Accredited Law School in the top 25% of the class or an advanced law degree such as an LLM may substitute for one year of the required professional legal experience.

·  The experience described in your resume will be evaluated and screened for the Office of Personnel Management's basic qualifications requirements, and the skills needed to perform the duties of this position as described in the vacancy announcement (Announcement # HTJ05436194).

Point of Contact: Judy Cade, Northeast CPOC, Aberdeen Proving Ground, MD 21005, (410) 306-0136. 

OGE ANNOUNCES ETHICS SYMPOSIUM IN WASHINGTON, DC

The Office of Government Ethics issued DAEOgram DT-05-002 Download dt05002.pdf announcing a four-day ethics symposium in Washington, DC, March 14-17, 2005.  This symposium is being offered to ethics officials in the DC area and will include sessions on conflicts of interest, gifts, Hatch Act, section 208(b)(1) waivers, managing an ethics program, travel, training tips, misuse of position, post employment, and other topics.

NIH Clears Most Researchers In Conflict-of-Interest Probe

Today, the Washington Post reported that most of the 100 or so National Institutes of Health researchers who the agency had said were under investigation for allegedly engaging in secret deals with pharmaceutical and biotechnology companies had been cleared by NIH investigators, according to agency officials.  You can read more of the Post article here.  An editorial by the Post regarding this issue can be found at this link.

March IEC Meeting Reminder

This is a reminder that IEC members have until close of business this Friday, February 25th, to pre-register for next month's meeting, which is scheduled for Thursday, March 3rd, from 12:15-1:45 in the FDIC auditorium, at 801 17th Street, N.W.  Members can pre-register by sending an e-mail to Patrick Carney with the name(s) of those from their agencies who plan to attend.

As announced at this month’s meeting, Ms. Marilyn Glynn, acting Director of the Office of Government Ethics (OGE) has once again kindly agreed to present a mid-year review of recent developments and future plans at OGE.  Her presentation is always one of our most informative and best-attended events, so you’ll want to ensure that your agency sends a representative.  Again, you may pre-register for this session by simply sending an e-mail to Pat Carney with the name(s) of those from your agency that plan to attend.  Although pre-registration is not required, it does help us arrange for seating and handout distribution.

Federal Prosecutors Investigating Federal Agency Procurement Fraud Allegations

The Washington Post, in its Saturday February 19, 2005 Business Section [you must register to view], reported on a new federal prosecutor initiative to probe government contractors at various federal agencies for indications of fraud and other ethics violations.  Federal prosecutors announced the development of a Procurement Fraud Working Group, using investigators from the U.S. Departments of Defense, Homeland Security, State, and Transportation, the FBI and the National Reconnaissance Office. They plan to look at the movement of federal officials to government contractors servicing their old agencies, multiple billings for services by contractors, and other indicia of contractor wrongdoing.  The Justice Department officials cited the recent prosecution and sentencing of  former Air Force procurement official Darleen A. Druyun and Boeing Company Chief Financial Officer Michael M. Sears, as well as GAO's recent criticism of Lockheed's hiring of former Air Force officials as adequately complying with federal post-employment restriction regulations as examples of their concern. 

You can view the article at: http://www.washingtonpost.com/wp-dyn/articles/A34717-2005Feb18.html

NIH New Ethics Rules Criticized By Law Professor

A Hoover Institute Senior Fellow, Professor Richard A. Epstein, University of Chicago Law School, who also consults for the pharmacy industry trade association, PhRMA, and Pfizer pharmaceutal company, wrote a strongly worded argument that NIH went too far with their newly imposed ethics rules on NIH staff, in Slate, the on-line news magazine, on February 15, 2005.  He argues that NIH officials should have redoubled efforts to enforce the NIH's current ethics rules rather than impose new "zero tolerance" ethics rules as to outside consulting and honoraria.  The article may be found at:  http://slate.msn.com/id/2113520/

Former Boeing CFO Sentenced

Government Executive magazine reports:

Former Boeing Chief Financial Officer Michael Sears was sentenced to four months in federal prison and fined $250,000 on Friday for illegally negotiating a job for a top Air Force official [Darleen Druyun] at the nation's second-largest defense contractor.

 

HHS Ethics Job Opening

The Office of the General Counsel of the Department of Health and Human Services (HHS) is seeking an experienced ethics attorney for its Ethics Division, which provides legal services involving federal criminal conflict of interest statutes, standards of ethical conduct regulations, financial disclosure requirements, procurement integrity provisions, and Hatch Act political activity restrictions.

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Ethics Division attorneys work closely with the White House Counsel’s Office and the Office of Government Ethics in clearing new Presidential appointees in the Senate confirmation process and also provide, in consultation with state bar authorities, guidance on legal ethics and professional responsibility issues. The incumbent will serve primarily as the Ethics Counsel to the Food and Drug Administration (FDA). The duty station will be at the HHS headquarters in Washington,D.C. 

Candidates must have strong writing, oral, and analytical skills, with at least 2 years’ experience in federal government ethics law, either full-time or as a substantial element of their assigned portfolio. Candidates with ethics experience only as a minor collateral duty should have at least 5 years’ experience in the subject area. Depending upon experience, the successful candidate may be hired at a GS 13 or 14; exceptionally well-qualified candidates may be considered for appointment as a GS 15. Salary currently ranges from $74,782 to $135,136 for these grades. Applicants are requested initially to indicate their interest in the position by forwarding an e-mail message that refers to the job title and position number indicated above to Linda.Conte@hhs.gov. The message should provide information as to current experience, position and grade or salary. By March 14, 2005, applicants also must send hard copies of a letter summarizing relevant experience, a résumé, a list of references, and writing samples to Edgar M. Swindell, Associate General Counsel, Attention: Linda Conte, HHS/OGC/Ethics Division, Room 700-E, Hubert H. Humphrey Building, 200 Independence Ave., S.W., Washington, D.C. 20201. If selected, the applicant will be required to submit an SF 85P, Questionnaire for Public Trust Positions, and an OGE 450, Confidential Financial Disclosure Report. HHS is an equal opportunity employer.

February 18, 2005

DoD SOCO Issues New Advisory

The latest Department of Defense Standards of Conduct Office Advisory is available on the DoD SOCO website in the Ethics Resource Library under "Advisories."  This Advisory provides good links to SF-278 review materials obtained from Judy Kim, Office of Government Ethics Deputy General Counsel, as well as other helpful information for this SF-278 filing period.

Jailed Ex-Official Linked to More Defense Contracts

The Washington Post reported that Darleen Druyun, the former Air Force procurement official who admitted showing Boeing Co. favoritism on contracts, may have unduly influenced eight other contracts worth about $3 billion, including four awarded to other companies.  You can read more of the Post article here.

OGE Announces Availability of Informal Advisory Letters/Memoranda and Formal Opinions

Today the Office of Government Ethics (OGE) announced the issuance of DAEOgram DO-05-001, February 11, 2005, providing that the 2004 Informal Advisory Letters and Memoranda and Formal Opinions of OGE are available for viewing and downloading at: http://www.usoge.gov/pages/daeograms/2005daeolist.html.  Download the DAEOgram here.Download do05001.pdf

HHS Secretary Must Divest Holdings in Leavitt Group

Looking for an example of divestiture to use in instruction? Insurance Journal reports:

To avoid any conflict of interest in his new job at U.S. Secretary of Health and Human Services, former Utah Gov. Mike Leavitt will divest more than $5 million of stock in his family's insurance business.

The Leavitt Group's products include Medigap coverage, policies created as a supplement to the government-funded Medicare system.

DoD IG States Former Air Force Secretary Violated Ethics Rules

Yesterday's Washington Post (you must register to use this site) reported that the Department of Defense Inspector General stated in a letter to members of the Senate Armed Services Committee that former Air Force Secretary, James Roche,  violated ethics rules when he tried to help the brother of a senior OMB official get a job with a defense contractor when the Air Force was trying to get OMB to concur with its aircraft leasing program.

Printing Company Owner Pleads Guilty to Making Illegal Payments to USPS Purchasing Specialist

The District of Columbia United States Attorney issued a press release on January 24, 2005, discussing an illegal gratuity case wherein a printing company received numerous printing contracts in exchange for paying the divorce attorney fees of a US Postal Service purchasing agent.  Download press_release.DCUSA.htm

March IEC Meeting

Our next meeting will be on Thursday, March 3rd from 12:15-1:45pm in the FDIC Auditorium, 801 17th St., NW, Washington.   The nearest Metro stops are Farragut West, 17th St. exit, for the Blue and Orange lines, and Farragut North, K St. exit, for the Red line.  You may pre-register for this meeting by contacting Pat Carney no later than Friday, February 25th.

SCHEDULED PRESENTATION:  As announced at last week’s meeting, Ms. Marilyn Glynn, acting Director of the Office of Government Ethics (OGE) has once again kindly agreed to present a mid-year review of recent developments and future plans at OGE.  Her presentation is always one of our most informative and best-attended events, so you’ll want to ensure that your agency sends a representative.  Again, you may pre-register for this session by simply sending an e-mail to Pat Carney with the name(s) of those from your agency that plan to attend.  Although pre-registration is not required, it does help us arrange for seating and handout distribution.

FUTURE MEETING DATES:  Our schedule of meetings for the remainder of 2005 is: April 5th; May 5th; June 2nd; July 7th; August 11th; October 6th; November 3rd; and December 8th.

More on Comp Time for Travel

Stephen Barr's Federal Diary has more information on the new comp time for travel rules noted here earlier.

NIH Employees React to New Ethics Rules

The Washington Post reported on Thursday February 3rd that new restrictions on outside consulting, monetary awards from outside groups, and financial investments for NIH employees were met "with derision" by NIH employees at a town meeting called by NIH Director Zerhouni on Wednesday.

The new agency rules were the result of a discovery made by congressional investigators that more than 100 NIH employees had not properly disclosed their relationships with pharmaceutical and bio-tech companies in violation of federal ethics rules, and resulting bad publicity for NIH.

Several speakers at the meeting asked why the more restrictive NIH ethics rules were not being applied to other federal agency scientists and federal grantees.  Several speakers also questioned why their spouses stock holdings would be restricted under the new NIH rules.

For more information on the comments by NIH employees upset with the new rules, see link below to the Washington Post article.

http://www.washingtonpost.com/wp-dyn/articles/A58845-2005Feb2.html

NIH Announces New Ethics Rules

On February 1, 2005, the National Institutes of Health issued a press release announcing a new supplemental ethics regulation that addresses  concerns with outside activities of some of its employees, including outside consulting with the pharmaceutical and biotechnology industries.  According to the announcement, the new interim final regulation is expected to be published in the Federal Register in the next few days.  It is available now on NIH's website and is downloaded here with the announcement for information.  Download nih_announces_sweeping_ethics_reform_february_1_2005_press_release_national_institutes_of_health_nih.htm Download supplemental_ethics_regulation.pdf 

OPM Creates Website for CFC

The Office of Personnel Management announced that it established a website for the Combined Federal Campaign (CFC) at www.opm.gov/cfc/.  This website includes CFC regulations and guidance, FAQ's, and other materials that should assist ethics counselors in answering questions regarding the CFC.