GSA inspector general cleared of whistleblower complaints
By Robert Brodsky rbrodsky@govexec.com April 25, 2008

The General Services Administration inspector general has been cleared of all allegations of misconduct in a pair of wide-ranging complaints filed by four of the office's former attorneys.
The inspector general for the Corporation for National and Community Service found that GSA IG Brian Miller had not violated any statute, rule or regulation, according to an April letter from Sen. Charles Grassley, R-Iowa, to GSA Administrator Lurita A. Doan.
A similar opinion was offered in January by the President's Council on Integrity and Efficiency's Integrity Committee, which is responsible for probing complaints against inspectors general.
But, despite calls for an immediate cease fire, the closure of the whistleblower case appears to have only inflamed the fury of Doan, who has feuded with Miller virtually since the day she took office.
The Corporation for National and Community Service IG, which agreed to review the case after the integrity and efficiency council ruled that some of the complaints did not fall within its purview, was looking specifically at whether the nonreimbursable detail of a GSA IG employee violated the Anti-Deficiency Act. The employee had been detailed to the Office of the Chief Information Officer at the Housing and Urban Development Department.
Vincent Mulloy, counsel to the community service IG, conducted a full breakdown of the complaint, reviewing the allegations, relevant laws and court decisions, according to Grassley's letter, which was obtained by The Washington Post's Government Inc. blog.
"The complaint should be considered without merit, and closed, to end the distraction of GSA OIG personnel from their duties," Mulloy wrote.
All additional complaints filed by the former attorneys, including former counsel Kevin Buford, were decided to be "personnel management" concerns that should be addressed by the agency's IG and his staff, the letter said. In two separate complaints to the integrity and efficiency council, the whistleblowers had charged Miller and his top deputies with intimidation, harassment and a host of retaliatory actions.
"We are satisfied that this matter has been put to rest," Miller said. "Multiple independent reviews showed the allegations to be false. Let's all get back to work."
Grassley, who has attempted to mediate the fractious relationship between Miller and Doan, encouraged the two to put aside their differences and work together for taxpayers.
"The PCIE review and the CNCS-OIG analysis should convince you the Buford PCIE complaint has been addressed and closed," Grassley wrote to Doan. "As such, I encourage you and IG Miller to demonstrate to all GSA employees the professionalism and character we all expect of top administrators in the federal government. I trust that you will move past this matter and will work cooperatively with the GSA OIG."
Grassley's optimism, however, could be misplaced.
In a statement to Government Executive, Doan made it clear that she is not ready to drop the whistleblower complaint -- or her scrutiny of Miller.
"I am, and will continue to be, a fierce advocate for GSA employees and will not allow any form of improper harassment and intimidation to create a hostile workplace at our agency," she said. "I find it remarkable that none of these whistleblowers has yet been interviewed. Instead, their core complaint about harassment and improper intimidation and retaliation is being ignored. This issue will not be put to rest until their complaints are investigated and a finding of fact is made. Ignoring these complaints and pretending the problem will self-correct is not going to work."
Doan further said the whistleblowers had their "reputations impugned and their careers interrupted after making these allegations, and all have sought transfer to other jobs."
As she has in the past, the controversial administrator once again portrayed the whistleblower complaints as an extension of her own long-running and public feud with Miller. Doan has filed numerous complaints against Miller, alleging improper contracting, leaking documents to the media, falsifying records and issuing excessive bonuses to his staff.
Miller has investigated Doan for her role in a contract with Sun Microsystems, her reported attempt to give a sole-source contract to a friend and her participation in a politically motivated conference. In 2007, the Office of Special Counsel found that Doan had violated the Hatch Act, which restricts political activity by executive branch employees.
Doan has denied the allegations and said Miller is retaliating against her for spending cuts and increased oversight she proposed for the IG's office.
She made it clear that peace with Miller is not in the cards any time soon. "I will stay on this issue like a dog on a bone until I am absolutely convinced that GSA does not harbor or tolerate behavior that creates a hostile workplace," Doan said.

Compromise Takes Shape for Inspectors General Bill
By Stephen Barr
Friday, April 25, 2008; D04

After a decade of debate, Congress appears ready to strengthen the independence of the government's inspectors general.
The Senate, on a voice vote late Wednesday, approved a bill that would set job qualifications for inspectors general, allow Congress to determine if an agency was trying to punish an IG by cutting his or her budget and ensure that all audits and investigative reports are posted on agency Web sites within three workdays.
"This bill is key to preserving the IGs' role as government watchdogs and making sure they can do their job of rooting out waste in this country," Sen. Claire McCaskill (D-Mo.) said in a statement. She and Sens. Susan Collins (R-Maine) and Joseph I. Lieberman (I-Conn.) are the bill's chief sponsors.
The House approved a similar bill in October, championed by Rep. Jim Cooper (D-Tenn.), on a vote of 404 to 11. But the Bush administration lodged a veto threat against Cooper's bill, prompting the Senate to soften its version while still trying to protect IGs from political pressure.
House and Senate aides plan to hold informal talks on how to shape a compromise bill. Some of the aides, who spoke on condition of anonymity, were optimistic that an agreement could be reached that would pass muster at the White House.
Cooper yesterday praised the Senate's action: "With the passage of Sen. McCaskill's companion bill, we're one step closer to seeing this legislation signed into law. I'm encouraged by the nearly unanimous votes in both chambers and look forward to working out a good compromise."
Inspectors general walk fine lines in the government. Those who end up at large agencies are nominated by the president and confirmed by the Senate and are expected to serve both masters. They are supposed to crack down on waste, fraud and abuse in agencies, while doing their best not to blindside the political appointees that run them.
Last year, some Democrats expressed concern in hearings that some inspectors general seemed too wary of crossing their bosses; others suggested that IGs need to be held more accountable for their work.
The House bill moved first, drawing objections from the White House. Those objections contributed to Senate efforts to create a bill able to win bipartisan support, leading to slightly different approaches in three areas.
Cooper's bill would provide IGs with seven-year terms, let them submit budget requests directly to Congress and permit the White House to fire them only for cause.
The Senate bill would not provide a guaranteed term in office, would require the White House to show how much money each IG requested and the amount recommended in the president's budget, and would require a notification about any effort to remove an IG.
But both bills would urge the appointment of IGs with "demonstrated ability" in accounting, auditing, financial analysis, law, management analysis, public administration or investigations. The bills would also create a council to review allegations of wrongdoing made against IGs and their staffs.
The bills would address pay issues within the IG corps. IGs at large agencies would be paid at the midpoint of the executive pay schedule (currently $158,500) plus 3 percent extra. IGs at smaller agencies would be paid at rates comparable to those of other senior executives.
Under both bills, no IG would be able to accept a bonus.
Engineers Back Obama
The International Federation of Professional and Technical Engineers, which represents engineers, scientists and technicians at the departments of Defense and Energy and at NASA, has endorsed Sen. Barack Obama for president, the union announced yesterday.
The Illinois Democrat is the best candidate to address civil service, health care, outsourcing, trade and other issues important to the union, said Gregory Junemann, its president.
The union represents about 85,000 workers in the public and private sectors. It helped organize a labor coalition to oppose an attempt by the Bush administration to curb union rights at the Defense Department.
Talk Shows
Craig W. Floyd, chairman and chief executive of the National Law Enforcement Officers Memorial Fund, will be the guest on "FedTalk" at 11 a.m. today on http://federalnewsradio.com and WFED radio (1050 AM).
David L. Norquist, chief financial officer at the Department of Homeland Security, will be the guest on the IBM "Business of Government Hour" at 9 a.m. tomorrow on WJFK radio (106.7 FM).
Stephen Barr's e-mail address is barrs@washpost.com.

FELONY CONDUCT. . . IS FELONY CONDUCT

The sentencing of former Pentagon IG Chief Investigator Richard T. Race

Op-Ed

By Douglas K. Kinan

April 24, 2008

In a well unpublicized case, "Richard T. Race, the Pentagon inspector general's chief investigator of procurement fraud and official misconduct quit his job and pleaded guilty last month to violating U.S. banking laws." Mr. Race was also a key member of the Defense Council on Integrity and Efficiency. The sentencing date for Mr. Race is May 2, 2008.

A March 18, 2008, Department of Defense Inspector General (DoD IG) Information Release, states, “The Office of Inspector General was not involved in the reporting or investigation of the matters underlying the recent judicial action and has no information that would suggest any relationship between those matters and Mr. Race’s official duties with the OIG.”

I disagree. Felony conduct is not about the person – it’s about felony conduct – and its related.

At his arraignment Judge Leonie Brinkema told Mr. Race that he should have “known better.” Mr. Race’s many years of experience in law enforcement and his actions demonstrate that his intent was clear. See the letter Mr. Kinan sent to Judge Brinkema.

As a former Department of Defense employee, after Mr. Race’s appointment I wrote to him requesting that the extensive and pervasive verified record of felony conduct and well planned discrimination by several officials at the Defense Contract Management Agency (DCMAE), Boston, Massachusetts be investigated.

Concerning two, of many employees, who were framed and fired for violations that Mr. Race knew they did not commit, the Hotline Director, Mr. Leonard Trahan, Jr., (and eventually Mr. Race’s subordinate) writes, “There were two EEO cases in the District in which Mr. Kinan disagreed with the decisions made by Ms. Appleton and Mr. Krasker, the DCMDE Chief Counsel. Instead of accepting those decisions “as reasonable people can disagree”, they became a ‘cause celebre’ for Mr. Kinan.”

That the Hotline Director who is responsible for DoD fraud, waste and abuse would essentially admit that it is okay to frame innocent individuals, stand by and watch them anguish for many months (Virella was 60 months) and allow them to be stripped of their career and full pension and then justify felony conduct as a “cause celebre” is contrary to what the DoD Hotline does.

In a conflict of interest, Mr. Race’s second subordinate, Mr. James L. Pavlik, covered up for Mr. Trahan by conducting a fraudulent investigation, making false official statements and issuing a fraudulent report to Senator Charles Grassley.

Despite the unequivocal fact that Mr. Pavlik had a “specific and credible” record that innocent employees were framed, Mr. Pavlik wrote, “The analysis that concludes Mr. Kinan’s disclosure did not contain “specific and credible” information or did not meet the “substantial likelihood” test that it would be substantiated and was therefore not in the category of cases referable to the Defense Criminal Investigative Service…”

Mr. Race could have prevented the DCMAE from framing others. Instead, Mr. Race opted to shield his subordinates’ felony conduct. As I wrote to the DoD Inspector General, Claude Kicklighter, “Framing two innocent individuals is not just a simple matter of “two EEO cases” - it’s framing two innocent people.”

The DCMAE wasted more than one million taxpayer dollars to secretly settle these two threatened lawsuits that could expose their felony conduct, promotion fixing and program fraud in the millions of taxpayer dollars.

Mr. Race’s deliberate indifference to the conduct outlined in my thirty-page affidavit caused many innocent individuals permanent and immeasurable damage. Additionally, the ripple effect of fixed promotions essentially denies many DoD employees the opportunity to compete for merit-based promotions.

As evidence of the DCMAE’s continuing violations, Mr. Race also had knowledge of the DCMAE’s recent framing and fraudulent investigation of whistleblower, Mr. Kenneth Pedeleose, as can be verified by the October 24, 2007, United States Merit Systems Protection Board (MSPB) “Opinion and Order” reversing Pedeleose’s 30 day retaliatory suspension. See MSPB Docket No. AT-0752-06-0350-I-1.

The MSPB’s opinion and order breathes legitimacy into and corroborates the factual record that the DCMAE attorneys continue to insist on framing innocent citizens and conducting fraudulent investigations to sustain false and fabricated charges, using the same modus operandi each time.

Mr. Race’s insensitivity has no limits and knows no bounds – his deeds supersede his words. Anyone willing to frame an innocent person should not be taken seriously. It’s about the lowest act you can do.

At his sentencing hearing Mr. Race or his attorney will be asking the court for leniency and will offer the standard shibboleths routinely issued by defendants. There will be no one there to offset Mr. Race’s malice, lack of mercy, empathy or “remorse.” The court should not overlook Mr. Race’s willingness and propensity to permanently harm innocent individuals, their families and the government.

Mr. Race ignored the fact that many innocent individuals were framed, stripped of their career and full pension for violations he knew they did not commit and he condoned his subordinates’ chronic and systemic malfeasance.

Mr. Race was allowed to “take voluntary retirement” on February 16, 2008. Should Mr. Race, who admitted guilt, be allowed to collect his full pension when he knew that his subordinates consciously decided that innocent employees should not collect theirs?

http://www.oscwatch.org/blog/2008/04/24/felony-conduct-is-felony-conduct/


Mr. Kinan is a former Equal Employment Opportunity (EEOC) Specialist with the Defense Contract Management Agency, and he may be contacted as follows:

DougKinan@yahoo.com

MSN Money

Market Dispatches4/23/2008 7:40 PM ET

Earnings worries set up a weak open
Stocks may be pressured Thursday by disappointments in earnings from Amazon.com and Apple. Starbucks says a weak economy is forcing it to cut its profit guidance. Stocks end mostly higher, thanks to gains for Boeing and Microsoft. Oil closes at $118.30.
By Charley Blaine and Elizabeth Strott

Stocks face a weak open on Thursday after Apple (AAPL, news, msgs) and Amazon.com (AMZN, news, msgs) earnings appeared to disappoint investors and Starbucks (SBUX, news, msgs) said a weak economy would cut into future profits.
Apple shares traded erratically in after-hours trading and were off 0.3% to $162.43 in after-hours trading. The stock had closed at $162.89, up 1.7%, in regular trading. Amazon.com shares slipped 5.2% to $76.80 from a regular close of $81, and Starbucks was off nearly 11% to $15.92 from a regular close of $17.85.
All three companies announced the developments after today's close. The Dow Jones industrials had finished up 43 points, 0.3%, to 12,763. The Nasdaq Composite Index had closed up 28 points, or 1.2%, to 2,405, and the Standard & Poor's 500 Index was up 4 points, 0.3%, to 1,380.

Gains for Boeing (BA, news, msgs) and Microsoft (MSFT, news, msgs), which reports third-quarter earnings on Thursday, were the Dow's main drivers.
Apple's guidance doesn't excite
Apple shares fell after the company said it expected to earn $1 a share in its fiscal third quarter. Wall Street had been expecting $1.11, Reuters said. Apple usually offers lower guidance than Wall Street expects.
Apple's earned $1.16 a share in its second quarter, up 33%, and ahead of the $1.07 a share that Wall Street had expected.
Top Stocks blog: Apple's quarterly guessing game
Revenue was $7.6 billion, up nearly 43% from a year ago; Wall Street had expected $6.96 billion.
Revenue was fueled by a 51% gain in sales of Macintosh computers. Apple sold 856,000 Mac desktops, up 37% from a year ago, and 1.4 million laptops, up 61% from a year ago.
But sales of Apple's iPod players were up less than 1% to 10.6 million units.
The company sold 1.7 million iPhones, down from the first quarter's 2.3 million units. But the company was confident it will sell 10 million iPhones in fiscal 2008.
Amazon sees lower profit margins
Amazon.com made investors nervous when it said its profit margins would narrow this year, although its first-quarter results were strong.
Amazon reported 34 cents a share, 2 cents better than the consensus estimate and 31% higher than a year ago.Revenue of $4.1 billion was up 36% from a year ago and a touch ahead of the Wall Street estimate of $4.08 billion.
Amazon.com said the sales gain was helped by low prices, a strategy that in part pushed gross margins, a continuous source of investor worry, below year-ago levels.
Talk back: Time to invest in emerging markets now?
"It's a good revenue story, but the margins are not expanding as the more bullish people have been hoping," said Global Crown Capital analyst Martin Pyykkonen. "They are indicating they can sell more and they are selling more but presumably in here there is a lot of price competition."
Starbucks: Consumers pass on lattés
Starbucks, meanwhile, said second-quarter earnings would be lower than forecast because of the weak economy. While revenue for the quarter will rise 12%, it said it expects earnings to be 15 cents a share, down from earlier guidance of 19 cents a share. Wall Street had been expecting earnings of 21 cents a share.
Full-year earnings would fall under 87 cents, its earnings for 2007.
The company said same-store sales, a key measure, were likely to be in the mid-single digits because of falling traffic. Especially hard hit have been stores in California and Florida, where Starbucks gets 32% of its U.S. revenue.
"The current economic environment is the weakest in our company's history, marked by lower home values, and rising costs for energy, food and other products that are directly impacting our customers," CEO Howard Schultz said in a statement.
Starbucks stock has already fallen more than 50% since the end of 2006 on investors' worries about slowing growth of its U.S. business. The company expects to offer details on its turnaround plan for the next three years next week.
Energy prices -- New York close
Wed. Tues. Chg. Month chg. YTD chg.
Crude oil (NYMEX) (per barrel) $118.30 $118.07 $0.23 16.46% 23.25%
Heating oil (per gallon) $3.3250 $3.3169 $0.0081 9.04% 25.50%
Natural gas (per million BTU) $10.7810 $10.6070 $0.1740 6.73% 44.07%
Unleaded gasoline (per gallon) $3.0507 $3.0164 $0.0343 16.60% 22.48%

Boeing, Microsoft push the market higher
Boeing was easily the leader among the 30 Dow stocks, rising 4.5% to $82.09. The gain added 29 points to the Dow's gain.
Microsoft's 4% gain to $31.45 added nearly 10 points to the Dow.
The software giant (and publisher of MSN Money) reports fiscal-third-quarter earnings after Thursday's close. In addition, there seemed to be some cheering for CEO Steve Ballmer's repeated vows not to raise Microsoft's bid for Yahoo (YHOO, news, msgs).
Meanwhile crude oil for June delivery closed at $118.30 a barrel in New York, up 23 cents from Tuesday. But Wall Street looked at that number with relief. The May contract expired on Tuesday with crude closing at a record $119.37.
The dollar was also higher today.
Video: Can GE recover from its earnings miss?
The Dow loser today was American International Group (AIG, news, msgs), down 3.1% to $43.86, in part because of worries about the health of bond insurers. Ambac Financial (ABK, news, msgs) drove that theme with a weak earnings report. The stock fell 43% to $3.46, the weakest performance among S&P 500 stocks.
The S&P 500 winner was clearly Safeco (SAF, news, msgs), a big property insurance company in Seattle, up 46% to $65.94. The company announced it is being acquired by Liberty Mutual Insurance of Boston for about $6.2 billion in cash.
Boeing relieves Wall Street
Boeing's earnings shook off any worries about its Dreamliner aircraft this morning.
The Dow component said it earned $1.21 billion, or $1.62 per share -- a 38% jump from the $877 million, or $1.13 per share, a year ago. Earnings from continuing operations were $1.61 per share.
Get free, real-time stock quotes on MSN Money

Boeing revenue rose slightly to $15.99 billion from $15.37 billion.
The aircraft maker backed its full-year earnings forecast of $5.70 to $5.85 per share and said it expects per-share earnings of $6.80 to $7 in 2009; analysts are expecting 2009 earnings of $6.96 a share.

SEATTLE POST-INTELLIGENCER
http://seattlepi.nwsource.com/local/359051_dalaibiz15.html

Dalai Lama visit: A compassionate look at doing business
Do good, get a 'positive result,' Dalai Lama says
Last updated April 14, 2008 10:50 p.m. PT
By ANDREA JAMES
P-I REPORTER
If the Dalai Lama's theory on compassion in business is true, then the stock of Costco Wholesale Corp. should keep rising.
His message to a closed audience of business and policy leaders at Seattle Center was one of simple karma: "If you do good, you get positive result. Something that creates harm is bad because we do not want to create suffering."
Costco was one of several examples of compassionate Northwest businesses highlighted during a panel discussion during the Seeds of Compassion conference Monday. The Dalai Lama, a Tibetan Buddhist monk, is the star attraction of the five-day event.
Issaquah-based Costco pays benefits to employees and limits price markups -- which sometimes draws ire from Wall Street investors. Co-founder and Chairman Jeffrey Brotman said that balance is hard to achieve in the business world.
"It amazes me that customers would award bad behavior of our competitors," Brotman said. "It's frustrating."
Addressing him as "his holiness," panel moderator Eric Liu, a former White House deputy for domestic affairs, asked the Dalai Lama, "How do we collectively change the culture so that every day consumers don't reward such bad behavior?"
The Dalai Lama shrugged and responded, "I have no such experience."
While running a ruthless business might lead to more profit in the short term, the Dalai Lama said, in the long run, "we lose."
The Dalai Lama sat in a red chair flanked by Brotman, state Sen. Lisa Brown, D-Spokane, consultant Kevin Washington and former Boeing government liaison Bob Watt.
Starbucks Chief Executive Howard Schultz was listed as a panelist on the program schedule, but a company spokeswoman said he had a scheduling conflict. A spokeswoman for Seeds of Compassion said the "last-minute" change was made after programs were printed.
The Dalai Lama made jokes with the panelists and audience and presented a relaxed and unpretentious aura, feeling free to scratch his ear or cheek while the others clasped their hands in their laps. The spiritual leader said competition in business is OK, as long as it builds up, rather than tears down, the opponent.
"If your colleague (is a) little bit lazy, or something like that, you try to be more competitive. So that is the positive side," he said. "Negative side -- to be causing one trouble."
When Watt asked how to change the culture to be more compassionate, the Dalai Lama responded that there are three routes: through God, through non-theistic religion such as Buddhism and through a secular or scientific approach.
Later, pointing to his heart, he said, "If you want happy days, happy nights, happy family, take care here."
Though compassion comes with a price, quantitative research backs up the Dalai Lama's views, said Rajendra Sisodia, author of "Firms of Endearment." Compassionate companies tend to outperform the market, he said.
"He has a way of clarifying things and simplifying things," Sisodia said of the Dalai Lama. "It's quite extraordinary. What we have done here is tap into some timeless wisdom."

P-I reporter Paul Shukovsky contributed to this report. P-I reporter Andrea James can be reached at 206-448-8124 or andreajames@seattlepi.com.