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EXCLUSIVE REPORT: U.S. Probe into Missing Afghan Aid Funds Blocked

Corruption within the U.S. Office of Special Counsel harms the war effort
Matthew J. Nasuti (Former U.S. Air Force Captain)
Thursday 19 January 2012

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In October 2010, the Office of Special Counsel (OSC) was petitioned to investigate the U.S. Agency for International Development (USAID) regarding $3.8 million in missing Afghan aid funds. It was a test case to see if the OSC, under its new leadership, had actually reformed after the previous Special Counsel was arrested for allegedly abusing his authority. Sadly, Special Counsel Carolyn N. Lerner and Deputy Special Counsel Mark Cohen, opted to ignore the scandal. They have refused (without explanation) to direct Secretary of State Hillary Clinton or USAID Administrator Rajiv Shah to explain the missing funds. Ms. Lerner then refused multiple requests to be interviewed regarding her inaction.

The USAID scandal involves $3.8 million in public funds disbursed on February 15, 2005 to Afghanistan Capital Partners, Ltd. (ACAP) under contract “JO#39-0003-ACAP.” ACAP, formed by a German national named Pierre Van Hoeylandt, had no office in Kabul and apparently no employees. The money was intended to underwrite the Afghanistan Renewal Fund (ARF). The scope of work was not clear and the circumstances surrounding this sole-source award were suspicious. The USAID officials involved in overseeing ARF included Frances Tooney, Daniel Miller, Margaret S. Kline, Robin Philips and Caroline Brearley. While USAID heralded ARF in 2005, by 2006 USAID dropped all mention of the project. Thereafter, rumors circulated that the money had been squandered and that the U.S. Ambassador in Kabul had personally intervened to protect Mr. Hoeylandt. USAID officials have to-date been either unwilling or unable to explain what happened to the money. The matter was eventually referred to the OSC. It has refused to act despite overwhelming evidence of a problem.

The OSC came into existence in 1979. Congress clearly stated that the OSC was to aggressively investigate corruption allegations and it was to function as a protector of those Federal employees who uncovered government corruption or mismanagement. The OSC has the power to demand answers from agency officials whenever the facts show a substantial likelihood of corruption or mismanagement. Ms. Lerner, and her predecessors such as Scott J. Bloch and Alex Kozinski, devised a series of tortured legal excuses to explain away their inaction against official corruption. They have ignored the Preamble to the Whistleblower Protection Act which instructs the OSC that its sole goal is to promote the disclosure and investigation of government corruption.

The OSC’s own statistics reveal that the agency has no appetite for combating corruption or complying with its Congressional mandate. It has been highly successful at doing nothing. In FY 2010, the OSC received 1,086 complaints of mismanagement and corruption involving Obama Administration officials, yet the OSC only demanded explanations from agency officials in 26 instances. In FY 2011, the OSC received 928 complaints and demanded answers in just 47 cases. Of those 47 cases, most were either non-controversial or involved misconduct already reported in the news. When the OSC sent its FY2011 annual report to Congress, it inflated the 47 by adding in informal referrals to the Inspector General. Despite these dismal results, the OSC, in its “target” for 2012, is forecasting that it will be supporting 17% less corruption investigations in 2012 than 2011! These data reveal that tens of thousands of cases of potential government corruption have been quietly buried by the OSC since 1979.

Despite these large numbers, the reality is that the OSC should be receiving ten or perhaps 100 times as many complaints of official misconduct and corruption as it does. The 1,000 cases per year it receives represent a vote of official no-confidence in the agency by Federal employees. Entire Federal departments such as the State Department do not brief their employees about the OSC, even though Federal law mandates that they do. A 2011 survey by the U.S. Office of Personnel Management found that in some agencies, only 14% of the Federal employees believe that their agency would protect them if they expose official corruption (so the corruption is not reported). Ms. Lerner and Mr. Cohen are apparently quite comfortable with all of this.

The case of the missing $3.8 million was provided to the OSC as a small test, and the agency failed the test. Numerous other and larger USAID scandals sit in the wings and likely will never be investigated unless and until a new Administration takes office.

In 2009, The Kabul Press? profiled Chemonics, Inc., which was awarded two contracts totaling $240 million by USAID in 2007, for agricultural support in northern and southern Afghanistan. Audits in 2008 could not be completed because no one in USAID ever monitored the work, therefore auditors could not verify if anything had actually been accomplished. Likewise in January 2010, James Rosen of Fox-News uncovered another scandal within USAID, which was an illegal $24 million award to Checchi and Company to provide “Rule of Law Stabilization Services” in Afghanistan. After the publicity USAID was forced to cancel the award, but only because of the publicity. Then Assistant Secretary of State P.J. Crowley and USAID Director of Public Information Joseph A. Fredericks publicly defended the award, which is astonishing. These are investigations that should have been initiated by the OSC, if the agency was properly functioning.

One of the many dire consequences of the OSC’s campaign against whistleblowers came to light in the Fall of 2010. A lawsuit was filed against Pentagon contractor Mission Essential Personnel (MEP) by one of its employees, Peter Funk. Mr. Funk alleged that MEP officials erroneously certified 28% of their interpreters as fluent in Dari and Pashto. MEP then dispatched those personnel to Afghanistan to support U.S. troops. The interpreters reportedly went along with this fraud because they were being paid $200,000 a year, with significant profits accruing to MEP. Mr. Funk alleged that the interpreters’ inability to fully understand the local Afghan languages led to American troops being ambushed by the Taliban on several occasions. What he claims is that in some instances interpreters were handed notes by villagers warning of upcoming ambushes, but the interpreters were unable to read the notes, therefore the troops were never warned. Matthew Mosk, Brian Ross and Joseph Rhee of ABC News brought this story to light on September 8, 2010.

Mr. Funk should have gone immediately to the OSC with this information but as with many whistleblowers, he may have concluded that it was a waste a time to notify the OSC of fraud or corruption. Instead of working through the clearly broken system within the Obama Administration, Mr. Funk waited and then filed his lawsuit against MEP. Responsibility for the delay in publicizing the problems with MEP lay at the doorstep of the OSC. How many U.S. soldiers, sailors and marines may have been killed or injured as a result of whistleblower disclosures that either never occurred or were sidetracked by the OSC is not known.

It is not just dangers and safety problems that are not being promptly reported and investigated, but also the squandering of taxpayer dollars. Take the January 4, 2012 press release of Assistant Secretary of State Ann Stock. She proudly announced that the State Department is using public funds to sent American dance troupes overseas. The program is called DanceMotion USA. Secretary Stock, seemingly oblivious to the concept of fiscal responsibility, claimed that dance is a “diplomatic tool” and part of Secretary Clinton’s “smart power” initiative. This is one of hundreds of expensive, artsy programs within the State Department that continue because employees are fearful of retaliation if they speak out against any of these extravagances.

Federal employees who uncover government corruption and are fired, demoted or transferred as a result are supposed to be able to turn to the OSC for protection. Congress mandated that such victims are merely required to make “an allegation” of retaliation to the OSC, which then has to “investigate” each and every case. Upon completion of its investigation, the OSC is required to prosecute all retaliation cases on behalf of the employee if the facts show “reasonable grounds” to believe that a retaliation had occurred. [See Title 5 of the U.S. Code, Section 1214]. Political appointees within the OSC and its sister agency, the Merit Systems Protection Board (MSPB), have taken this clear and simple law and turned it on its head in order to protect their political patrons. Officials now require Federal employees to “precisely plead” facts to the OSC, as if it were a court, and the smallest mistake results in the case being dismissed. Both agencies manufacture hypertechnical rules for how a disclosure of corruption must be made and to whom, despite the Federal Circuit court holding in Marano v. Department of Justice that “How a protected disclosure is made, or by whom, matters not.” Both agencies also ignore the holding in Frazier v. MSPB, “The Special Counsel should not passively await employee complaints, but rather, vigorously pursue merit system abuses.”

The OSC’s statistics paint a grim picture of fear and abuse within the U.S. Government. In FY 2010, the OSC was only able to protect 55 of the 3,200 Federal employees who uncovered corruption and were being retaliated against by Obama Administration officials. In FY 2011, the OSC only protected 81 of the 2,583 employee-victims who asked for help.

It is not simply that the OSC statistics are dismal, but Ms. Lerner, in her 2011 Performance and Accountability Report, boasts of her agency’s record! She represents that the OSC had a “perfect favorable outcome record before the MSPB” which is misleading because the OSC apparently never appeared before the MSPB in 2010 and perhaps only a few times in 2011. Ms. Lerner then informed Congress that the OSC has a “productive year” in 2011 in that it processed and closed out 870 retaliation cases. In OSC-speak, being productive means burying 870 retaliation cases by taking no action. In the surreal world of the OSC, being “productive” means doing nothing.

This calls to mind the popular American television show of the 1990’s called The Seinfeld Show, which was a half-hour comedy about nothing. Each episode was about nothing in particular. The sad reality is that the Obama Administration has numerous “Seinfeld” agencies, offices and programs. Imagine entire Federal agencies in Washington, D.C. that see their job as doing nothing! Every day, officials arrive at work and labor at finding reasons not to do anything productive.

The most perplexing issue regarding the OSC and the MSPB is: How can these officials ignore the mistreatment and abuse of thousands of Federal employees every year? How can they come home from work and inform their spouses and children that they spent the day blocking safety investigations, ignoring false statements made to Congress, curtailing reviews of substandard body armor for the troops, and halting corruption inquiries? The scary reality is that, somehow, they are able to rationalize all of this away.

On January 16, 2012, the world was given a demonstration of courage by Pakistan’s Supreme Court. As the first step in its contempt proceedings, it ordered Prime Minister Yousuf Rasa Gilani to appear before it to explain why his government had not moved more aggressively against official corruption. That is democracy at its very finest. In contrast, the U.S. Supreme Court appears tepid and near-comatose. The same could be said for the U.S. Department of (Political) Justice, which has shown no interest in prosecuting corruption cases. It was not always that way. The late U.S. Attorney General Robert F. Kennedy would have swiftly impaneled a Federal Grand Jury to investigate the gross abuses of authority outlined above, but that was another era.

One of the few remaining forums where Federal employees and U.S. citizens can turn in Washington, D.C. to combat official corruption is the House Oversight and Government Reform Committee, chaired by Representative Darrell Issa. Committee hearings by Chairman Issa are warranted into the OSC’s misrepresentations to Congress, its on-going efforts to block corruption investigations and the refusal of both the OSC and the MSPB to comply with the law.

The next President of the United States needs to aggressively combat the pervasive culture of fear and corruption that exists in Washington, D.C. His first act should be to move against the numerous “Seinfeld” agencies, offices and programs that exist within the Executive Branch, consigning them to the dustbin of history. One place to start is to immediately abolish the OSC through the mechanism of a RIF (reduction in force) decree. Not only is the entire agency a waste of taxpayer dollars, but it plays a destructive role by derailing corruption investigations.
His second act should be to issue an expansive Executive Order, rigorously enforced, that protects and rewards whistleblowers.

The American and the Afghan peoples yearn to have their governments run by “untouchables.” This American term refers to legendary U.S. Treasury Agent Eliot Ness and his team of special agents who battled organized crime mobsters in old Chicago. They could not be touched by scandal or politics. Citizens of the U.S. and Afghanistan would rally around those who put their careers second and their oaths of office to the nation first. The road to the White House in 2012 and to ultimate success in Afghanistan belongs to those who can form and lead governments of untouchables.

Photo by Mariam Alimi Photo Services, www.mariamalimi.webs.com

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