In This Issue: 1 Whistleblower Case Goes to the Supreme Court 2 Director’s Letter 3 No Punishment for Violating Ethics Rules 3 Letter Urging Against New Nuclear Weapons Facility 4 POGO Speaks at Ethics Summit 5 Hill Urges DoD IG to Protect Whistleblowers 5 Use of Non-Disclosure Agreements to Silence Whistleblowers 6 Planned Giving

PROJECT ONGOVERNMENT OVERSIGHT

Exposing Corruption. Exploring Solutions. www.POGO.org

July–September 2014: Vol. 18, Issue 2

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Whistleblower Gets His Day in Court—the Supreme Court

After years of fighting his unjust firing for blowing the whistle on airline security concerns, former U.S. air marshal Robert MacLean

will get his day before the U.S. Supreme Court on November 4.

The Project On Government Oversight, which has long advocated on MacLean’s behalf before Congress and the Administration, continued its support by submitting an amicus brief to the Supreme Court.

The brief argues that MacLean had the constitutional right to warn the public about the Transportation Safety Administration’s (TSA) budget-cutting plans to remove air marshals from high-risk, long-distance flights during a time of heightened threat of terrorist attacks.

In 2003, MacLean went to the media with his concerns after his superiors and the Inspector General told him that “nothing could be done” and to “just walk away.” His efforts paid off and, after some media scrutiny and congressional inquiries, the government admitted that the plan to remove the air marshals was a “mistake.”

At the crux of the case is the federal government’s decision to retroactively designate as non-public the text message that MacLean had received announcing the cut-backs to the air marshal program in 2003. The TSA fired MacLean in April 2006 for “Unauthorized Disclosure” of what they claimed to be Sensitive Security Information (SSI)—despite the fact that the text message was sent over an unsecured network to unsecured phones and not marked in any way as sensitive. The Office of SSI did not actually label the message as “SSI” until August 31, 2006, four months after MacLean was fired.

POGO’s amicus brief provided two main arguments for the Supreme Court’s consideration: 1) “controlled unclassified information” markings like SSI are not prohibited from disclosure under the Whistleblower Protection Act; and 2) government employees have a constitutional right to the freedom to warn when the employee reasonably believes there is a substantial and specific danger to public safety.

MacLean made a difference because he exposed an indefensible action by the Department of Homeland Security. The government should protect those in government who honor their duty to serve and warn the public.

Additional amicus briefs supporting MacLean were also filed by six Members of Congress; former U.S. government officials with diplomatic, military, intelligence, or information control duties; law enforcement associations; and others. Notably, the federal Office of Special Counsel also filed its first ever Supreme Court amicus brief. ■

Dear Friends,

One thing we have learned at POGO is that we never know what to expect when we come to work.

But what we have been experiencing lately is beyond anything we could have anticipated. There are people saying that the reason Washington is broken is because there is too much transparency. At first we thought it was just pundits trying to be contrarian, but this notion is starting to be taken seriously in some quarters.

I suspect POGO readers don’t need to be reminded of this, but I want to be clear that we believe deeply in the importance of public access to government operations, that such access is essential to keeping our democracy strong. We appreciate the need for policymakers to be able to have private deliberations, but we do not believe the elite few should take official actions in our name without our knowledge.

The alternative being promoted is a world of patronage, self-dealing, and sweetheart deals for those with the biggest bank accounts.

But, although we have been forced to divert attention from our proactive agenda to counter this bizarre new threat to good government, the work we have still been able to do on other issues is yielding great results.

For example, in September, Marine Corps whistleblower Franz Gayl was finally rewarded with a settlement that not only allows him to get back to work, but also to help develop guidelines for future Marine whistleblowers. The settlement was the result of the Office of Special Counsel’s mediation program. Longtime POGO readers will remember how hard we worked to ouster the disgraced former head of that office, Scott Bloch; the Gayl story demonstrates the value of having a functioning Office of Special Counsel.

In the end, it is important to remember that our goal when we are raising concerns about wrongdoing is to fix the problems we uncover. The Gayl story is evidence that it is all worth it.

Sincerely,

Danielle Brian, Executive Director

Letter from the Executive Director

StaffDanielle Brian, Executive DirectorScott Amey, General CounselLydia Dennett, InvestigatorDanni Downing, Editor & COTS DirectorAbby Evans, Donor Relations ManagerNed Feder, M.D., Staff ScientistAndre Francisco, Online ProducerNeil Gordon, InvestigatorLiz Hempowicz, Public Policy AssociateDavid Hilzenrath, Editor-in-ChiefLynn Mandell, Finance ManagerJohanna Mingos, Data SpecialistJoe Newman, Director of CommunicationsChris Pabon, Director of DevelopmentEthan Rosenkranz, National Security Policy AnalystKeith Rutter, Chief Operations Officer & CFOPam Rutter, Web ManagerMichael Smallberg, InvestigatorMia Steinle, InvestigatorPeter Stockton, Senior InvestigatorWinslow Wheeler, Director of the CDI Straus Military Reform Project Adam Zagorin, Journalist-in-ResidenceJessica Murphy, Intern

Board of DirectorsDavid Hunter, ChairLisa Baumgartner Bonds, Vice ChairDina Rasor, Treasurer

Ryan AlexanderHenry BantaDavid BurnhamMichael CavalloAndrew CockburnMickey EdwardsJanine JaquetMorton MintzNithi VivatratAnne ZillCharles Hamel, Board Emeritus

2 ■ Vol. 18, Issue 2

Vol. 18, Issue 2 ■ 3

POGO Demands Independent Study to Confirm Mission for Uranium Processing Facility

Last year, POGO wrote a report on the Uranium Processing Facility (UPF), a proposed building for the Y-12 nuclear complex that, despite still being in the design phase, was

already vastly over budget and behind schedule. This year POGO has continued its oversight of this billion-dollar boondoggle. What started out as a building that was supposed to cost up to $1 billion and be operational by 2018 has morphed into a project that could cost up to $19 billion and not be fully operational until 2030. And it’s not even clear that there is sufficient mission to justify its construction at all. In October, POGO sent a letter to Congress requesting an independent review of one of the main justifications for this facility. The National Nuclear Security Administration (NNSA) has claimed that the UPF is needed to produce or remanufacture Canned Sub-Assemblies, the component of a nuclear warhead that houses the uranium, but how many might be needed is up in the air. Sources have told POGO that one of the reasons NNSA is saying many Canned Sub-Assemblies will require remanufacturing is because of a “hydride problem.” However, POGO has been told by a number of current and former Energy Department officials that this is a “non-issue.” One source even said stated that remanufacturing Canned Sub-Assemblies is just a “jobs program.” Hydrides are formed when a small amount of moisture gets into the Canned Sub-Assembly, particularly the highly enriched uranium component, which can reduce the yield of a nuclear weapon. But even if a warhead with a hydride problem were to be detonated, the nuclear yield would still be catastrophic and several times greater than that of the bomb dropped on Hiroshima. POGO recommends an independent study to determine exactly how many Canned Sub-Assemblies will require manufacturing or remanufacturing in the next decade before billions of taxpayer dollars are spent on yet another unneeded nuclear facility. ■

Former DoD Research Chief Violates Ethics Rule, Won’t Face Punishment

In August, the public learned that the former head of the Pentagon’s central research and development office, the Defense Advanced Research Projects Agency (DARPA),

will face no punishment for violating government ethics rules. Back in May 2011, POGO urged the Department of Defense (DoD) Office of Inspector General (IG) to investigate Regina Dugan, then-director of DARPA. We pointed out that Dugan had co-founded RedXDefense with her father in 2005 and was its first CEO. Her father succeeded her as CEO, and her uncle sits on the company’s advisory board. In 2010, a year after Dugan assumed the top post at DARPA, she disclosed that RedX owed her $250,000 and that she had between $151,000 and $305,000 in assets and income from the company. DARPA has awarded RedX millions of dollars for explosives detection research—a contractual arrangement that continued after Dugan became DARPA’s director. Dugan left the agency in March 2012 to take an executive position at Google. The DoD IG launched an investigation in August 2011 and issued a report on its finding in April 2013. A heavily redacted version of the report was publicly released in August this year. The IG found that Dugan “implicitly endorsed RedX to DoD officials who were in a position to create business opportunities for RedX” and that she had “violated the [Joint Ethics Regulation] prohibition against endorsements.” However, because the IG found no evidence that RedX received contracts or new revenue as a result of Dugan’s actions, it did not recommend punishment. In essence, the IG determined “no harm, no foul.” Unfortunately, Regina Dugan’s case is not an anomaly. DARPA admitted that it is common for its officials to have financial ties to contractors, which the agency handles primarily through recusal. Recusals—which basically result in taxpayers paying government employees not to work—and investigations of officials after they move on to greener pastures in the private sector are not adequate safeguards against conflicts of interest and do not bolster public confidence in the government. ■

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Vol. 18, Issue 2 ■ 4

POGO Speaks at National Government Ethics Summit

POGO investigator Michael Smallberg was a featured speaker at the National Government Ethics Summit

hosted by the U.S. Office of Government Ethics this fall. He spoke to more than 300 senior ethics officials about the revolving door and “regulatory capture”—when a regulated industry is able to sway policies in its favor and away from the public interest. The revolving door is one of the trickiest problems facing the government ethics community, Smallberg told the audience. Although the revolving door should remain open, there are cases where it creates a risk of regulatory capture. He discussed POGO’s reports on the revolving door between the federal government and the 20 largest contractors, and on the revolving door between the Securities and Exchange Commission (SEC) and Wall Street. In some cases, the revolving door can make regulators identify too closely with representatives of regulated industries. When an agency becomes captured, it’s easier for powerhouse firms to sway contracting decisions, regulations, and other government policies in their favor. In addition, Smallberg said the revolving door has led to a complex system of ethics rules in which employees are often asked to disclose and manage their own conflicts of interest. He cited an investigation, prompted by a 2011 letter from POGO, in which the Department of Defense (DoD) Inspector General (IG) found that a former director of the Defense Advanced Research Projects Agency did not disclose all the relevant facts surrounding a potential conflict of interest (an issue that is itself the topic of an article in this newsletter). Furthermore, even when agencies do uncover evidence of criminal ethics violations by government employees, the Department of Justice (DOJ) almost always declines to prosecute, according to DOJ enforcement records obtained by the Transactional Records Access Clearinghouse. Another problem Smallberg highlighted is that we don’t always know who goes through the revolving door. Congress required DoD to maintain a central database of ethics opinions issued to officials who went to work for a DoD contractor. But the IG found that the database was incomplete and the records were decentralized, concluding that DoD may not have complied with the intent of the law. Other agencies, such as the SEC and the Commodity Futures Trading Commission, have adopted their own rules requiring former employees to file disclosure statements when they go through the revolving door. But those agencies, like DoD, don’t post those records online, leaving it up to groups such as POGO to obtain the records through the Freedom of Information Act. Smallberg urged the ethics officials to post more records online, including waivers, recusal agreements, and written advice provided to employees who go through the revolving door. Scott Amey, POGO’s general counsel, also participated in the ethics summit on a panel entitled, “Ethics Community Stakeholders: How the Press, Good Government Groups, and Others Work Toward Common Goals.” He described how the federal workforce has been augmented with contractors who perform governmental functions, which “opens up Pandora’s box for conflicts.” Amey discussed the role that groups such as POGO play in exposing those conflicts, and he offered several recommendations for improving the government’s ethics system. It needs to be simplified, he said, it needs to make a clearer distinction between intentional violations and honest mistakes, and it shouldn’t rely so much on self-reporting by federal employees, contractors, and grantees. “You need a centralized [ethics] community” with “enforcement power” that won’t “sit back and wait for the next scandal,” Amey told the attendees. POGO and the government ethics community ultimately share the same goal, Amey said: to honor the ideal so aptly expressed by President Lyndon Johnson, that “[e]very citizen is entitled to have complete confidence in the integrity of his government.” ■

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POGO’s Michael Smallberg speaks to senior ethics officials at the National Government Ethics Summit about the revolving door and regulatory capture.

Vol. 18, Issue 2 ■ 5

Hill Encourages DoD IG to Protect Contractor Whistleblowers

An issue first brought to light by POGO has gained new steam. In a great example of Congress working together, Members of Congress recently encouraged Department of Defense Inspector General (IG) Jon T. Rymer to reconsider

his office’s interpretation of a contractor whistleblower protection law. In September, Senators Claire McCaskill (D-MO), Ron Johnson (R-WI), Thomas Carper (D-DE), Tom Coburn (R-OK), and Carl Levin (D-MI), and Representatives Adam Smith (D-WA), Darrell Issa (R-CA), and Elijah Cummings (D-MD) sent a letter chastising Rymer, stating that his office has an “extremely limited definition” of DoD personnel to whom contractor and subcontractor employees may make protected disclosures. The law protects DoD contractors from reprisal for disclosing information that the employee reasonably believes shows illegal behavior, mismanagement, waste, or an abuse of authority relating to DoD spending. And yet, as both POGO and the Members of Congress pointed out, the IG ignored a portion of the whistleblower protection law. POGO learned that a contractor employee reported possible misconduct by co-workers to senior managers at his company and then to government contract personnel when the company didn’t correct the problem. The whistleblower was fired. The IG denied the employee’s reprisal claim, finding that he was not protected because he did not make a disclosure to an authorized contracting official. Essentially, the IG concluded that the only person to whom the misconduct should have been reported to was to a government employee who was thought to be part of the misconduct. POGO had argued in an earlier letter to Rymer that this narrow interpretation of the law was inconsistent with the law and the intent of Congress. The Members of Congress agreed, stating that Rymer’s interpretation differed from Congress’s original intention and that whistleblower laws should be construed broadly, not narrowly. The Members of Congress asked the IG to review his office’s interpretation and implementation of the law “to ensure that it is consistent with protecting contractor and subcontractor employees from retaliation.” Rymer replied, stating that his office will “adopt a broader approach” to the law, and that one case has been reopened. Indicators are that this is the same case POGO and the Members of Congress wrote to the IG about. ■

PHOTO COURTESY OF FLICKR USER SOUMYADEEP PAUL

Whistleblowers Silenced

Silencing whistleblowers is not new. Every year, we witness new ways to keep government and contractor employees from speaking out about waste,

fraud, and abuse. Old methods included writing bad performance evaluations, removing job responsibilities, pulling a security clearance, and termination. Some whistleblowers have been chastised at hearings or in the press. Despite vast improvements in whistleblower protection laws, a new method to silence whistleblower has emerged—the use of confidentiality or non-disclosure agreements that infringe current and former whistleblowers’ rights. Federal laws bar contractors and grantees from retaliating against whistleblowers who report problems to governmental authorities. The agreements violate the law and thwart government investigations into criminal, civil, and administrative violations on federal contracts, grants, and other federally funded programs that whistleblowers bring to light. Earlier this year, media reports documented the use of confidentiality and non-disclosure agreements by federal contractors. More surprising, however, is the fact that a government agency–the Department of Energy–was asking contract employees at the Hanford plutonium processing facility in Washington State to sign agreements that prevented them from reporting wrongdoing without getting approval from a DOE supervisor. In June, POGO wrote to Attorney General Eric Holder, requesting a Department of Justice (DOJ) assessment of the use of such agreements. We also recommended that DOJ issue guidance or propose legislative or regulatory reforms regarding their use. For example, it might be necessary to draft guidelines to ensure that confidentiality and non-disclosure agreements conform to whistleblower laws and that they are not used to impede a whistleblower’s right to make a protected disclosure or to hinder a government investigation. In September, DOJ responded to our letter, stating that it shared POGO’s concerns, and that it will continue to evaluate whether additional measures are needed to address the issue. Whistleblowers are the first and best line of defense against waste, fraud, and abuse in federal programs. The Department of Justice must ensure that whistleblowers are protected from retaliation and encouraged to speak out, not silenced. ■

Mission StatementThe Project On Government Oversight is a nonpartisan independent watchdog that champions good government reforms. POGO’s investigations into corruption, misconduct, and conflicts of interest achieve a more effective, accountable, open, and ethical federal government.

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Plan to Make a Legacy Gift for POGOBy including POGO in your estate planning, you can make a legacy gift that will help the organization continue its important work for many years to come. Here is what one person said about why he chose to make a legacy gift through estate planning: “Legacy giving is well named—such a gift can honor integrity and transparency in government for years after I am gone.” To find out more about providing legacy gifts through estate planning, contact Chris Pabon at (202) 347-1122.