Congressional Record: September 12, 2000 (Senate)
Page S8370-S8375MESS AT THE JUSTICE DEPARTMENT Mr. GRASSLEY. Mr. President, I rise today to talk again about the mess at the Department of Justice. As we all know, this Justice Department has been subjected to criticism from Democrats and Republicans alike for mishandling cases. Yesterday, the Justice Department's own Inspector General completed a lengthy report which points to "egregious misconduct'' by senior officials in the Justice Department. That phrase "egregious misconduct'' is not my phrase. That's the conclusion of the IG. This is a sordid story which began in 1997, when I wrote to Attorney General Reno asking her not to fire a whistle blower who had alleged misconduct in two components of DOJ's Criminal Division--The International Criminal Investigative Training Assistance Program, also known as "ICITAP'', and the Overseas Prosecutorial Development, Assistance and Training, also known as "OPDAT''. These offices train prosecutors and police in other countries to enforce laws in a way that respects the rule of law and human rights. As such, these offices are heavy consumers of intelligence from various intelligence gathering agencies that monitor human rights abuses. The IG concluded that some Senior DOJ Officials in these offices intentionally refused to follow Government Regulations regarding the handling of classified information and recommended discipline for three DOJ officials. The allegations I received in 1997 related to serious security breaches as well as the misuse of Government authority for the personal and financial benefit of top DOJ Officials. I was shocked to hear allegations that Bob Bratt, the Executive Officer of the Criminal Division, who had supervisory control over these offices, and Joe Lake who was an assistant to Mr. Bratt, used their Government positions to get visas for Russian women that Brat met through a "match making service.'' I was shocked to hear allegations that a Senior Justice Official was allowed to retire early with an early retirement bonus, and then be re-hired at DOJ as an outside contractor just a few months later in clear violation of Federal law. But, these all proved to be accurate. To quote the Inspector General's report "We concluded that Bratt and Lake committed egregious misconduct'' in obtaining visas for Russian women to enter the country under false pretenses. These women had been denied visas in the past and were only given visas when Bratt assured Embassy Officials in Moscow that these women would be working for DOJ in the future. The IG concluded that this was a false statement. The IG concluded that Bratt and Lake offered explanations for their conduct and denials regarding the visas for the Russian women which were "not credible.'' The IG also concluded that Bratt's "intimate involvement'' with these Russian women left him vulnerable to blackmail and presented a security concern. The IG report indicates that Bratt may have pressured other DOJ employees to mislead the IG inspectors. And the IG found that Bratt had DOJ computers sent to a school in Virginia where a girlfriend works. Clearly, this is the kind of misconduct which should be exposed and corrected. This is why I work so hard to support whistle blowers when they ask for my help. But it doesn't end there. The IG also concluded that Joe Lake violated Federal Law when he took an early retirement bonus of $ 25,000. One provision of the early retirement program prohibited lake from working for DOJ for 5 years after his retirement. Yet, two months after he retired, Lake was hired as a consultant at DOJ reporting to his old friend Bob Bratt. This was patently illegal, and the IG recommends that DOJ seek the return of lake's $ 25,000 retirement bonus. The IG also noted many of the hiring practices at issue were--to use the IG's own words--"questionable.'' For instance, the IG report described the hiring of a bartender at a local restaurant frequented by the Associate Director of ICITAP. The bartender was originally hired to work at DOJ on a temporary basis. After this bartender-turned- Government lawyer began a personal relationship with Bratt, Bratt hired her on a permanent basis at DOJ. Another example cited by the IG involved an ICITAP official hiring the father of an ex-spouse's step- children even though he had very little experience. Again, the American people deserve better from their Government. The IG report also indicates that Senior Justice officials improperly used frequent flier miles. The IG recommends that security clearances be [[Page S8371]] granted to ICITAP officials only after evaluating their poor record of complying with security regulations. I wrote to the Attorney General on this matter in 1997. It's taken until September of 2000 for DOJ to finish its report. Just last month, Mr. Bratt was allowed to retire from Government service. The IG report indicates that the IG would have recommended that Bratt be fired from the Justice Department if he were still working for DOJ. It seems to me that Senior Justice officials may need to be held accountable for letting Bratt retire rather than face the music for his misdeeds. As Chairman of the Administrative Oversight Subcommittee on the Judiciary Committee, I intend to keep a close eye on the Criminal Division, in light of this sorry Record. Mr. President, this is merely the latest example of how Justice Department is a real mess. We all know that. For the benefit of my colleagues, I ask unanimous consent to have printed in the Record at the cost of $1,300 an executive summary of the report. There being no objection, the material was ordered to be printed in the Record, as follows: Executive Summary Te International Criminal Investigative Training Assistance Program (ICITAP) is an office within the Criminal Division of the Department of Justice that provides training for foreign police agencies in new and emerging democracies and assists in the development of police forces relating to international peacekeeping operations. The Criminal Division's Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) trains prosecutors and judges in foreign countries in coordination with United States Embassies and other government agencies. The Criminal Division's Office of Administration serves the Criminal Division's administrative needs. This report details the results of an investigation by the Office of the Inspector General (OIG) into allegations that managers in ICITAP, OPDAT, and the Office of Administration committed misconduct or other improprieties. The allegations raised a wide variety of issues including managers' improper use of their government positions to obtain visas for foreign citizens, widespread violations of the rules governing the handling and storage of classified documents, managers' use of business class travel without authorization, managers' use of frequent flyer miles earned on government travel for personal use, violations of contractual rules and regulations, failure to supervise contracts leading to substantial cost overruns and overcharges by contractors, and favoritism in the hiring and promotion of certain employees. Many of the allegations concerned the actions of Robert K. "Bob'' Bratt, a senior Department official who became the Criminal Division Executive Officer in charge of the Office of Administration in 1992. At varying times during the years 1995-1997, Bratt also was the Acting Director of ICITAP and the Coordinator of both ICITAP and OPDAT. We substantiated many of the allegations and found that individual managers, including Bratt, committed serious misconduct. We also concluded that managers in ICITAP, OPDAT, and the Office of Administration failed to follow or enforce government regulations regarding ethics, security, travel, and contracts. As a result of our investigation, we recommended discipline for three employees. We would have recommended significant disciple for Bratt, including possible termination, but for Bratt's retirement effective August 1, 2000. We also found that some of the problems revealed by this investigation go beyond holding individual managers accountable for their actions and that the Department can make changes to enhance the performance of other managers, employees, and offices. Therefore, we made nine recommendations concerning systemic improvements for the Department to consider. The report is divided into chapters addressing the major allegations. In this Executive Summary, we summarize the background of the investigation and the allegations, the investigative findings, and the OIG conclusions with respect to each chapter. i. background of the investigation ICITAP was created in 1986 and although it is part of the Department of Justice, its programs are funded by the Department of State. OPDAT, created in 1991, is similarly funded. Both ICITAP and OPDAT are headed by Directors, with a Coordinator responsible for overseeing the management of both organizations. The Office of Administration handles the administrative functions for the Criminal Division, including personnel, budget, information technology, and procurement matters. The Executive Officer heads the Office of Administration. Bratt became the Executive Officer for the Criminal Division in 1992. He was appointed the Acting Director of ICITAP in March 1995 following the dismissal of the previous Director. After Janice Stromsem was selected as ICITAP Director and assumed the post in August 1995, Bratt resumed his duties as Executive Officer. Bratt was appointed to the newly created post of Coordinator in September 1996 where he remained until being detailed to the Immigration and Naturalization Service (INS) in April 1997 at the request of the Attorney General. ICITAP has had a long history of turmoil. Between 1994 and 1997, four different individuals assumed the responsibility of Director or Acting Director. During that period, here were two different investigations into allegations of misconduct as well as reviews of ICITAP's organizationals structure and financial systems. In 1994, at the request of the Criminal Division Assistant Attorney General, the OIG completed two investigations of ICITAP that examined allegations of favoritism in selecting consultants, misconduct in travel reimbursements, poor quality of ICITAP's work products, waste and inefficiency in program and contract expenditures, and management of foreign programs. The OIG did not substantiate the allegations of misconduct but did find that ICITAP did not plan its programs carefully. The OIG also made recommendations to improve ICITAP's financial management. In January 1995, Bratt examined a proposed ICITAP reorganization plan and conducted an investigation following additional allegations of misconduct that were made to the Criminal Division, allegations that Bratt substantiated. This OIG investigation began in April 1997 when an ICITAP employee reported to the Department's security staff that an ICITAP senior manager had provided classified documents to persons who did not have a security clearance. The Department's security staff and the OIG investigated the allegation and confirmed it. The OIG continued the investigation to determine the extent of security problems at ICITAP. While this investigation was ongoing, the OIG received numerous allegations of misconduct and mismanagement at ICITAP and OPDAT, and we broadened our investigation to encompass these new allegations. ii. investigation of allegations A. Issuance of visas to Russian women Bratt made four trips to Russia in late 1996 and 1997 in conjunction with his duties as ICITAP and OPDAT Coordinator. We received several allegations of impropriety relating to these trips. The most serious allegation was that Bratt and Criminal Division Associate Executive Officer Joseph R. Lake, Jr. improperly used Bratt's government position to obtain visas for two Russian women, one or both of whom it was alleged were Bratt's "Russian girlfriends.'' Our review determined that in 1997 Russians seeking to visit the United States had two methods of obtaining visas from the American Embassy in Moscow: the standard process and the "referral'' process. The standard process could be used by any Russian seeking to visit the United States. Russians applying through the standard process were required to wait in long lines at the American Embassy in Moscow to submit their applications, and the process included an interview by an American Embassy official. The Embassy official could deny the application if, among other reasons, the official did not believe the applicant had established that he or she would return to Russia. The "referral'' process could be used in much more limited circumstances. The referral process required that United States government interests be supported by the applicant's visit to the United States or that a humanitarian basis existed for the visit. In the referral process, the visa application was submitted by an Embassy official who completed a form approved by an Embassy Section Chief setting forth the United States government interest in or the humanitarian basis for the applicant's visit. No interview was required, and the use of the referral process generally ensured that the applicant would receive a visa. Two Russian citizens, Yelena Koreneva and Ludmilla Bolgak, received on April 7, 1997, visas to visit the United States. They received the visas because Lake submitted their applications using the referral process and purported that a government interest existed for their visit to the United States. On the referral form Lake wrote that "[a]pplicants have worked with the Executive Officer (EO) Criminal Division in support of administrative functions, Moscow Office.'' He signed it "Joe Lake for BB.'' In addition to being the ICITAP and OPDAT Coordinator, Bratt retained the title and many of the responsibilities of the Executive Officer. We determined that neither woman had ever worked for Bratt or the Criminal Division. Both women socialized extensively with Bratt during his visits to Moscow, but Bratt did not have a professional relationship with them. We concluded that the statement written on the referral form was false. We found that Bratt first visited Moscow in November 1996 during which he received a tour of various tourist sites from a Russian interpreter. According to the interpreter, during the tour she told Bratt that she also worked for a Russian "match-making'' agency. She said that in response, Bratt told her he would like to meet a single Russian woman. The interpreter contacted a business associate, Bolgak, who had a friend who was single, Koreneva. Bratt met Koreneva and Bolgak on his next trip to Moscow, in January 1997. On this trip, as well as his later trips to Moscow, Bratt socialized extensively with Koreneva and Bolgak, usually meeting them for dinner or drinks. During the January trip, Bratt invited the women to come to the United States to visit him. Koreneva told Bratt that she had previously been denied a visa to visit the United [[Page S8372]] States. Between the January trip and his next trip to Moscow in March 1997, Bratt investigated how Russians could obtain visas to visit the United States. He made inquiries of a personal friend who worked for the State Department and also of Cary Hoover, the Special Assistant to the ICITAP Director. Bratt learned that Russians applied for visas at the American Embassy in Moscow, that they were interviewed by Embassy officials, and that the Embassy made a determination as to whether the applicant would return to Russia. Bratt also asked Hoover specifically for information about the referral process. In March 1997 Bratt and Hoover returned to Moscow on business. During this trip Bratt and Hoover met with an unidentified Embassy official to learn more about the visa process. The evidence showed that Bratt, Hoover, and the Embassy official discussed the likelihood of Koreneva being denied a visa. During the meeting Bratt told the official that one or both of the women might work for the Department of Justice in the future. We concluded that Bratt learned through these various inquiries that Koreneva would likely be denied a visa again if she used the standard application process. Although Bratt and Lake deny it, the evidence showed that Bratt returned to the Embassy again during this March trip, this time accompanied by Lake who was also in Moscow, and met with Donald Wells, the head of the Embassy office responsible for issuing visas through the referral process. Bratt and Lake told Wells that they wished to bring two women with whom they had a professional relationship to the United States for consultations. Wells told the men that the referral process could only be used if there was a government interest in the women's visit to the United States. We also learned that within a few days of the meeting with Wells, Lake obtained a visa referral form from the Embassy. The evidence showed that Lake called Bratt, who had returned to the United States, to discuss the form. Lake submitted the women's applications and the visa referral form containing the false statement about the women having worked for the Executive Officer to the Embassy. The visas were issued shortly thereafter although they were never used by the women. Although he initially falsely claimed to the OIG that he was just friends with Koreneva, Bratt later admitted to the OIG that he had an intimate relationship with her. We concluded that Bratt and Lake knowingly used the referral process even though they were aware that it required a government interest in the women's visit and that no such government interest existed. We also found that Bratt's and Lake's explanations of their conduct, as well as their denials that certain events happened, were not credible. We concluded that Bratt and Lake committed egregious misconduct. B. Security failures at ICITAP In April 1997 the Department of Justice Security and Emergency Planning Staff (SEPS) received an allegation from an OPDAT employee that Special Assistant to the ICITAP Director Hoover had improperly given classified documents to individuals who worked at ICITAP and who did not have security clearances. SEPS and the OIG confirmed the allegation. SEPS then conducted an unannounced, after-hours sweep of the ICITAP offices on April 14, 1997, to further assess ICITAP's compliance with security rules and regulations. During that sweep and a follow-up review conducted by the Criminal Division Security Staff, 156 classified documents were found unsecured in the office of Joseph Trincellito, ICITAP Associate Director. The OIG and SEPS conducted further investigation to determine the extent of ICITAP's security problems and ICITAP management's responsibility for the failures. The OIG found that the problems discovered in the 1997 security reviews had existed for many years. Evidence showed that senior managers provided or attempted to provide classified documents to uncleared consultants or other staff. Staff, including senior managers, routinely left classified documents unsecured on desks, including when individuals were away from their offices on travel. Stromsem, Hoover, and Trincellito improperly took classified documents home. Highly classified documents containing Sensitive Compartmented Information (SCI), or "codeword'' information, were brought to the ICITAP offices even though ICITAP did not have the type of secure facility (a Sensitive Compartmented Information Facility or "SCIF'') required to store SCI. The evidence showed that ICITAP inaccurately certified to United States Embassies that individuals had security clearances when they did not. We also found one instance where classified information was sent over an unsecure e-mail system. As an example of the inattention ICITAP managers gave to security, we set forth the troubling history of ICITAP Associate Director Trincellito's handling of classified information. From 1995 through early 1997, ICITAP's security officers repeatedly found classified documents left unattended in Trincellito's office. The security officers warned Trincellito that he was violating security rules, and they also notified other ICITAP managers about the problem. One security officer, after becoming aware of repeated violations, documented the violations in writing and recommended discipline for Trincellito. ICITAP Director Stromsem on occasion spoke to Trincellito about his violations and attempted to make it easier for him to comply with rules by putting a safe in his office. However, in the face of repeated violations indicating that Trincellito refused to comply with security regulations, Stromsem and other senior ICITAP managers failed to take sufficient action, such as initiating discipline, to ensure that Trincellito complied with security regulations. We found that ICITAP managers' own violations of the security rules, their tolerance of Trincellito's known violations, and the removal of the security officers who attempted to enforce the rules sent a message that security was not important at ICITAP. We also found that the Criminal Division did not adequately supervise ICITAP's security program even though security reviews conducted by both SEPS and the Criminal Division beginning in 1994 showed a pattern of security violations. In this chapter we also discuss the security implications raised by Bratt's involvement with Koreneva. Bratt held a high-level security clearance and had access to highly classified documents. We concluded that Bratt's intimate involvement with a Russian citizen about whom he knew very little, has invitation to her to visit the United States and his office, his improper use of his government position to obtain a visa for Koreneva and Bolgak, and his attempt to conceal the true nature of the relationship left him vulnerable to blackmail and represented a security concern. We found that the actions of another ICITAP employee who was intimately involved with a Russian national also represented a security concern. C. Business class travel We found that Bratt and other ICITAP and OPDAT manager improperly flew business class when traveling to and from Moscow in 1996 and 1997. Government and Department Travel Regulations restrict the use of business class by government travelers. Even in circumstances when business class may be used, it must be authorized by the traveler's supervisor. We found that Bratt instigated and approved a scheme to improperly manipulate his flight schedules in order to qualify for business class travel. We concluded that Bratt's and the other managers' use of business class was not authorized and violated the rules limiting the use of business class travel. On one trip, in November 1996 Bratt, Lake, and Thomas Snow, the Acting Director of OPDAT, traveled to Moscow and several other European cities using business class on at least one leg of the trip. Business class was arranged by the Department's travel agency because the method used by the airlines to calculate the cost of trips with several stops made the use of business class less expensive than coach class. However, we found that a weekend stop in Frankfurt, Germany, violated the Travel Regulations and that the stop should not have been used as a basis to obtain business class accommodations. We also found that the Department's travel agency had suggested an alternative itinerary for this trip that would have saved the government substantial money but that the itinerary was improperly rejected by Lake. On a second trip, in January 1997 Bratt and Hoover flew business class to Moscow purportedly pursuant to the "14- hour'' rule. If authorized by a supervisor, government regulations permit travelers to fly business class when a flight, including layovers to catch a connecting flight, is longer than 14 hours. For this trip, Bratt requested that his Executive Assistant determine whether the flight proposed by the travel agency qualified for business class under the 14- hour rule. His Executive Assistant checked with three different individuals and based on the information she received, she told Bratt that he did not qualify for business class because both legs of the flight took less than the requisite time. Nonetheless, according to Bratt's Executive Assistant, Bratt told her to "do what you can to get me on business class.'' As a result, Bratt's Executive Assistant arranged with the Department's travel agency to lengthen Bratt's flight for the purpose of obtaining a flight long enough to qualify for business class travel. Even with the manipulations, however, the flight from the United States to Moscow was still less than 14 hours. We concluded that Bratt and Hoover did not qualify for the use of business class and that they were not authorized to use that class of service. In March 1997, on a third trip, Bratt, Hoover, and Stromsem flew business class from Moscow to the United States even though there were economy flights available that would have fit the business needs of the travelers. Although Hoover and Stromsem were originally scheduled to fly on an economy class flight, Bratt directed that their flights be changed to avoid the disparity between his subordinates traveling economy while he traveled on business class. We held Bratt accountable for all the excess costs of the March trip. On his fourth trip, in June 1997 Bratt flew business class on both legs of his trip to and from Moscow. Contemporaneous documents show that the choice of flights for both of these trips was dictated by Bratt's desire to use business class rather than for business reasons. In one facsimile to the travel agency concerning the June 1997 trip, Bratt's Executive Assistant asked, "Can you rebook him [Bratt] with a slightly longer layover in Amsterdam. . . . So that at least two extra hours is added onto the trip? [[Page S8373]] . . . '' In addition, the travelers were not authorized to travel on business class for either the March or June trip. In sum, we found that Bratt pressured his staff to obtain business class travel and approved a scheme to lengthen his travel time solely for the purpose of obtaining flights that would qualify for business class travel under the 14-hour rule. We concluded that Bratt's manipulation of flight schedules to qualify for business class travel violated the Travel Regulations and was improper. The government spent at least $13,459.56 more than it should have for these four trips. We also found that the Justice Management Division (JMD), which is responsible for auditing foreign travel vouchers, did not question the use of business class travel by Bratt or the other managers who accompanied him even when the lack of authorization was apparent on the face of the travel documents that the travelers submitted to be reimbursed for their expenses. In this chapter we also detail a conversation between Bratt and his Executive Assistant that led her to believe that Bratt was coaching her how to answer OIG questions. Through a series of rhetorical questions that falsely suggested that Bratt was not involved in making decisions regarding his use of business class, Bratt tried to shift to his Executive Assistant the responsibility for the decisions leading to Bratt's business class travel. Bratt also told her that she should not report their conversation to anyone. For some time after that conversation, Bratt continued to contact her asking whether she had been interviewed by the OIG and what she had said. Despite OIG requests to Bratt that he not discuss the subject of our interviews with individuals other than his attorney, we found that Bratt discussed topics that were the subject of the investigation with individuals who would be interviewed by the OIG. Bratt also called individuals, such as the two Russian women for whom he had improperly obtained visas, to alert them that the OIG would be seeking to interview them. D. Failure to follow Travel Regulations During the course of the investigation, we found that ICITAP, OPDAT, and Office of Administration managers violated government Travel Regulations with respect to the use of frequent flyer benefits. Government regulations state that all frequent flyer miles accrued on government travel belong to the government. Because airlines generally do not permit government travelers to keep separate accounts for business and personal travel, travelers may "commingle'' miles earned from business and personal travel in one account. However, the Travel Regulations are explicit that it is the responsibility of the traveler to keep records adequate to verify that any benefits the traveler uses for personal travel were accrued from personal travel. We found that between 1989 and 1998 Bratt used 380,000 miles for personal travel. Bratt told the OIG that while he had no records to verify how many miles he had accrued from his personal travel, he believed that he had collected at least 150,000 miles from personal travel as well as miles from the use of a personal credit card. Even giving Bratt the benefit of his recollection, we concluded that Bratt improperly used between 156,000 and 230,000 miles earned from government travel for his personal benefit. We found that Hoover also used frequent flyer miles accrued from government travel to purchase airline tickets and other benefits for personal travel for himself and a family member. Stromsem used miles accrued on government travel to upgrade her class of travel in violation of government rules. The investigation revealed that managers violated other Travel Regulations as well. Lake was inappropriately reimbursed by the government for some of the travel expenses associated with weekends that he spent in Frankfurt, Germany, when he was on personal travel. In violation of the regulations requiring a traveler's supervisor to authorize travel and approve travel expenses, Bratt repeatedly either authorized his own travel or had subordinates sign his travel requests. Both Bratt and Stromsem routinely had subordinates approve their travel expenses. We received an allegation that Stromsem took a business trip to Lyons, France, as a pretext that allowed her to visit her daughter who was in Tours, France. Although Stromsem did not list a business purpose on her travel paperwork for her stop in Lyons, we did not conclude that her trip to Lyons was pretextual. We also received an allegation that Bratt's trips to Moscow in 1997 were for the purpose of furthering his romantic relationship with a Russian woman. We found that the lack of advance planning for the trips, the fact that most of his meetings in Moscow were with his own staff rather than Russians, and his romantic relationship with a Russian woman strongly suggested that the trips to Moscow were not necessary or were unnecessarily extended for personal rather than government reasons. E. Lake buyout On March 31, 1997, Lake retired from the federal government after receiving $25,000 as part of a government-wide buyout program (the Buyout Program) to encourage eligible federal employees to retire. The following day Lake began working for OPDAT as a consultant. Lake worked as a subcontractor to a company that had been awarded a contract to provide various support services to ICITAP. In May 1997 at Bratt's request, Lake worked as a consultant to the Immigration and Naturalization Service (INS) after Bratt was detailed there. The Buyout Program prohibited former federal employees from returning to government service as either employees or as contractors working under a "personal services'' contract for five years after their retirement. A personal services contract is defined by federal regulations as "a contract that, by its express terms or as administered, makes the contractor personnel appear, in effect, [to be] Government employees.'' Violation of the prohibition requires repayment of the incentive bonus. We found that while at OPDAT and INS after his retirement Lake reported to and was supervised by Bratt, that Lake supervised and gave directions to federal employees or other contractors, that he used government equipment, and that other staff were often unaware that Lake was not a federal employee. The evidence showed that Lake essentially did the same job as an OPDAT consultant that he had performed while a government employee. We concluded that Lake worked at OPDAT and the INS under a personal services contract in violation of the Buyout Program requirements. The evidence showed that Lake planned for several months to return to work for the Department as a consultant. Both Bratt and Lake were warned by officials in JMD and the Criminal Division Office of Administration that Lake's return as a consultant could constitute a personal services contract. We concluded that Bratt and Lake improperly failed to ensure that Lake's work met the requirements of the Buyout Program. After allegations were raised in the media that Lake had received Buyout money and then improperly returned to work for the Department, Bratt asked JMD for an opinion as to whether Lake should repay the Buyout bonus. A JMD official concluded that Lake was not obligated to pay back the money based upon a "good faith'' exception to the rule requiring repayment. We determined that there is no "good faith'' exception to the requirement that a person who violates the Buyout Program prohibition against performing personal services must repay the bonus. We also concluded that even if a good faith exception existed in the law it would not apply in this case as Lake was aware of the prohibition against personal services and was warned that his return as a consultant might constitute the performance of personal services. We also found that JMD permitted Lake to work at INS without a contract for several months. In addition, while JMD issued a purchase order for Lake's INS work in July 1997, senior JMD procurement officials later expressed concerns that the purchase order that had been issued by their office was a personal services contract. We also found that hiring Lake as a subcontractor to a third party contractor added unnecessary costs to the contract. F. Harris contract Jo Ann Harris was the Assistant Attorney General for the Criminal Division from November 1993 until August 1995, when she left the federal government. Under federal regulations, Harris was barred from contracting with the government for one year after her government service. In December 1996 Harris agreed to become an OPDAT consultant to organize, moderate, and evaluate three conferences that OPDAT was planning to hold at the International Law Enforcement Academy (ILEA) in Budapest, Hungary, and to assist OPDAT in developing curriculum for other OPDAT training programs. The OIG investigated allegations that the award of this contract to Harris violated ethical rules that prohibit contracting with former government officials on a preferential basis. We found that OPDAT's award of a contract to Harris to develop curriculum for OPDAT programs and the processes used to develop the contract, to determine Harris' fee, and to modify her contract raised the appearance of favoritism. In September 1996 Harris had discussions with Criminal Division managers, including Bratt, about the possibility of her assisting OPDAT as a consultant. In November 1996 Harris discussed on the phone with Bratt specific projects that she could work on such as the ILEA conferences and curriculum development. At Bratt's direction, an OPDAT official called Harris in early December 1996 and had a similar conversation with Harris during which she reiterated her interest in working on OPDAT projects. On December 12, 1996, Bratt, Harris, and Lake met in Harris' former office at the Department of Justice, and Harris agreed to Bratt's proposal that she work as a consultant on OPDAT projects. The Statement of Work, a contract document that set out the tasks that OPDAT was seeking from a consultant, was issued on January 23, 1997. The tasks included preparing for the ILEA conferences, acting as the conference moderator, and developing curricula for other OPDAT programs. Because no competition was involved in awarding Harris' contract, we evaluated the propriety of OPDAT's award of her contract under the rules pertaining to the award of sole- source contracts. Sole-source contracts, which do not require the solicitation of competing bids, may be awarded when the exigencies of time or the consultant's expertise justify the waiver of the competitive process. We concluded that OPDAT could have awarded a sole-source contract for her work on the ILEA conference given her extensive experience and the short time frame that existed [[Page S8374]] to prepare for the conference. However, we concluded that Bratt's decision to hire Harris to develop curricula for OPDAT projects other than the ILEA conferences created the appearance of favoritism. We also found that Bratt discussed with Harris what projects she could perform and the Statement of Work was written to fit those projects. We concluded that the process OPDAT used to develop Harris' contract violated the principle that the task to be accomplished should drive the development of a contract rather than the desire to hire a particular consultant. We disproved the allegation that Harris was paid $65,000 for eight days work. She was paid approximately $27,000 for 42 days work on two ILEA conferences. However, we found that Harris' rate of pay was not the result of an "arms length'' negotiation. Harris told Bratt, her former subordinate, to set the fee and to "scrub it'' because she did not want to read about the fee in the newspaper. She agreed to accept $650 per day although her contract was later modified to permit her to be paid based on an hourly rather than a daily rate. We were unable to determine the basis for the $650 per day fee or find any evidence that Bratt and Lake used any comparable consultant fee arrangement as the basis for setting Harris' rate. Evidence showed that the Department of State, ICITAP, and OPDAT generally set the fees for their consultants at a lower rate. We concluded that the lack of a clear record setting forth the basis for the fee raised the appearance that Harris was given preferential treatment by her former subordinates. We also found that OPDAT hired Harris to perform work outside the scope of the contract, which only authorized services to ICITAP not OPDAT. G. Improper personnel practices The OIG received various allegations relating to ICITAP's and OPDAT's hiring and management of personnel. The evidence showed that ICIPAT and OPDAT managers misused contractor personnel. Federal regulations prohibit contractor personnel from directing federal employees or exercising managerial oversight. Yet, ICITAP and OPDAT managers did not distinguish between employees and contractor personnel and often failed to identify personnel working for contractors as such. As a result, ICITAP and OPDAT staff were often confused about consultant's roles and the scope of their authority. We found that contractor personnel were used as managers. For example, one of ICITAP's Deputy Directors was a subcontractor employed by a contractor that provided a variety of services to ICITAP. After ICITAP Director Stromsem was advised by an administrative official that there were limits to the authority of personnel employed by contractors, Stromsem cautioned the Deputy Director about the limitations. However, Stromsem did not notify other staff about the Deputy Director's status as a subcontractor, and he remained in the position of Deputy Director until he became a federal employee six months later. We found other problems with the use of contractor personnel including ICITAP's selection of particular consultants to be hired by its service contractors. This left ICITAP vulnerable to claims that it was violating the rules restricting personal services contracts. The practice of directing the hiring of consultants wasted money because ICITAP was performing the administrative work associated with hiring consultants at the same time that it was paying its service contractors administrative fees. In addition, consultants often began work before the Statement of Work was issued to the prime contractor. This practice required the paperwork to be backdated or ratified in order for the consultant to be paid. We also found that consultants were hired as federal employees and then made decisions affecting their former contractor employer in violation of ethical regulations. This practice was stopped by Mary Ellen Warlow, who became the Coordinator for ICITAP and OPDAT in 1997 after Bratt left for the INS. We investigated allegations that ICITAP managers engaged in favoritism in the hiring of staff. Federal employees are hired after a competitive process that begins with the public issuance of a vacancy announcement that describes the application process and sets forth the responsibilities and other particulars of the position. Managers were alleged to have engaged in "preselection,'' that is, they decided whom to hire before beginning the competitive selection process required by federal regulations. The hiring of Jill Hogarty in particular raised complaints. Hogarty was an attorney who worked as a bartender at Lulu's New Orleans Cafe, an establishment located near the ICITAP offices which was visited regularly by ICITAP Associate Director Trincellito and other ICITAP staff. While visiting Lulu's, Trincellito discussed ICITAP's work with Hogarty, and eventually Trincellito invited Hogarty to consider working as a consultant to ICITAP. Hogarty gave Trincellito her resume, and Trincellito wrote the paperwork that resulted in her being hired as an ICITAP consultant in September 1994. According to Hogarty, while she was a consultant to ICITAP, she dated Bratt for several months, from September 1995 to December 1995. At that time Bratt had resumed his position as Executive Officer but he retained authority to approve personnel decisions at ICITAP. In November 1995, during the time that Hogarty and Bratt were dating, Hogarty applied to become a temporary federal employee at ICITAP. She was selected by Trincellito for this position in December 1995. On January 5, 1997, Hogarty's employment status changed once again, and she became a permanent federal employee. It was this selection that raised the complaint about preselection. The vacancy announcement of the position that Hogarty obtained opened on November 1, 1996. An ICITAP employee who held a term position told the OIG that while the position was still open for applications, he was discussing the announcement for the position with another employee when Hogarty told them it was her position and that she had been selected for it. The employee told the OIG that even though he was interested in the position himself, he did not apply for it because he believed Hogarty's statement that she had already been selected. To investigate the allegation of preselection, we attempted to determine which manager had selected Hogarty for the position and the reason for the selection. The paperwork listed Stromsem as the official requesting the recruitment. The paperwork did not show who had made the selection, however. All of ICITAP's top managers--Director Stromsem, Associate Director Trincellito (who was also Hogarty's direct supervisor), the ICITAP Deputy Directors, and Special Assistant to the Director Hoover--denied having selected Hogarty for the permanent position. Bratt also denied selecting Hogarty. We found strong evidence that Bratt and Stromsem preselected Hogarty. An e-mail from Bratt on October 8, 1996, showed that Bratt authorized hiring Hogarty before the vacancy announcement that opened the position for competition was issued. We also learned from an ICITAP administrative official that in October or November 1996, Stromsem asked the official to determine how they could get Hogarty health benefits, which Hogarty did not have at that time. The administrative official said that he and Stromsem agreed to create a "term'' position vacancy for Hogarty, but that instructions came back from Bratt through Stromsem to make the position permanent. We concluded that Bratt and Stromsem engaged in preselection in violation of federal regulations governing personnel hiring. We investigated other allegations of favoritism, including the hiring of a consultant who was the father of Stromem's former husband's stepchildren. He was subsequently selected by Stromsem to become an ICITAP term employee although his qualifications for the position were questionable. He was ultimately not hired for the term position because of the intervention of Warlow when she became Coordinator. We concluded that Stromsem's involvement with this hire gave rise to the appearance of favoritism. The OIG also received numerous allegations that Bratt gave favored treatment to a select group of Office of Administration and ICITAP staff and that he dated subordinates. Although we only conducted a limited investigation into these allegations, we found that some of the employees who socialized with Bratt received rapid career advancement and that Bratt was often involved in the promotions. We saw evidence that he dated staff in the Office of Administration and ICITAP and that in one instance he intervened to protect the salary of a subcontractor with whom he had a social interest but who have been found unqualified by Office of Administration staff for the position she held. We concluded that Bratt's actions gave right to an appearance of favoritism. H. Financial management In response to allegations that ICITAP's finances were mismanaged, the OIG examined ICITAP's financial management system. We found that until 1997 ICITAP could not account for its expenditures. ICITAP did not receive sufficient information from its contractors to permit it to track whether it received the goods and services for which it had paid. This led to significant problems in 1997 when the State Department, which was funding ICITAP's programs, asked for detailed information on how the money for programs in the Newly Independent States had been spent. ICITAP spent several months trying to provide an acceptable answer to the State Department's request and only succeeded by the use of estimates and extrapolations from the financial information ICITAP did collect. Although the OIG had advised ICITAP in its 1994 report following an earlier investigation into ICITAP's financial management system that ICITAP needed to collect more detailed information from its contractors, the problem was not remedied until after the State Department requested detailed financial information in 1997. We found that ICITAP did not pay sufficient attention to the services its contractors provided and left itself vulnerable to overcharges. In one instance, a contractor notified ICITAP that it was unilaterally raising one of its fees, an action not permitted by the contract. Despite this notice, ICITAP did nothing for two years until a JMD contracting officer noticed the overcharge. Subsequent negotiations with the contractor resulted in reimbursement to ICITAP of some of the money. Office of Administration managers hired staff for the Criminal Division by using contractor personnel for jobs that were outside the scope of the contract under which they worked. In 1991 the Criminal Division awarded a contract to provide computer support [[Page S8375]] services and in 1996 the Criminal Division awarded the same contractor a second contract for computer support services. The contractor provided employees to work in Criminal Division's correspondence units performing tasks such as reading and responding to correspondence. This work was outside the scope of the first contract, which only authorized computer support services. The contractor also provided employees who worked as writers, planned conferences, published reports, and organized parties. The services of these personnel were outside the scope of both contracts. We also found that Criminal Division managers failed to adequately supervise the contract and the contractor charged the government for the services of personnel who were unqualified under the terms of the contract. The contract set out very specific labor categories, such as Senior Programmer Analyst, and set forth the tasks to be accomplished and the qualifications for each labor category. We found problems with 25 of 56 of the contractor's personnel under the first contract and problems with 19 of 54 of the contractor's personnel under the second contract. We concluded that the minimum the contractor overcharged the government was $1,164,702.01. The OIG received an allegation that ICITAP had spent substantial sums of money on an automated management information system (IMIS) that did not function properly. Our investigation showed that the development of IMIS was difficult, that users were unhappy with the product, and that a system designed to replace IMIS could not be completed by the contractor. We concluded that managers did not adequately analyze ICITAP's needs in the initial stages of development, and consequently IMIS was constantly being upgraded and modified leading to new problems. Also, the decision to use floppy disks to transfer information from the field to headquarters rather than develop a network capacity that could be utilized by all users led to significant problems, such as that the data from floppy disks was often out of date or could not be accessed once it was received at headquarters. IMIS and the attempt to develop the replacement system ultimately cost more than one million dollars. We did not investigate to determine how much money might have been saved had IMIS been better planned. ICITAP's lack of planning also led to a substantial cost overrun of the translation budget for the first ILEA conference. A hypothetical transnational crime and the statutes of various countries were translated for the conference. The budget for translations was $16,000; the ultimate cost was $128,258. Lake delegated much of the responsibility for coordinating the ILEA conference to his assistant, who worked for a contractor. Lake's assistant ordered large amounts of material to be translated on an expedited basis without adequately determining the cost of the translations. The assistant failed to research whether some of the material was already translated and ordered some of the material on a costly expedited basis when it was unnecessary to do so. We concluded that Lake delegated responsibility to someone who was not qualified to manage the task and then failed to adequately supervise her. We examined whether ICITAP could account for the goods it ordered for use in Haiti by selecting 131 expensive items to track. The investigation showed that the contractor responsible for providing goods and services to ICITAP in Haiti had in place an effective inventory control system and that ICITAP could account for all but one of the selected items. I. Miscellaneous allegations In this chapter we summarize the results of our investigation of additional allegations, most of which we did not substantiate. We found that Bratt directed that Criminal Division excess computers be sent to a school associated with a girlfriend, and Deputy Executive Officer Sandra Bright initiated and pursued the donation of computers to a school associated with her husband. In 1996 Bratt directed that 35 computers be sent to an elementary school in Virginia where his then girlfriend was employed as a teacher. On one occasion in 1996 Bright directed that 25 computers be sent to the school district in Virginia where her husband was employed as a principal and on another occasion in 1996 Bright directed that 30 computers be sent to the school at which her husband was employed. We concluded that Bratt's and Bright's actions created the appearance of favoritism. We did not substantiate an allegation that Robert Lockwood was awarded an OPDAT grant because of his alleged association with Attorney General Janet Reno. The American-Israeli Russian Committee that Lockwood directed received a $17,000 grant from OPDAT in 1997. At the time, Lockwood was the Clerk of Courts of Broward County, Florida, and was acquainted with the Attorney General, although not closely so. We determined that the Attorney General received a phone call from Lockwood in 1997 but that they only discussed Lockwood's organization and its mission; he did not seek any funding from her. Lockwood became involved with OPDAT through the OPDAT Resident Legal Advisor in Moscow. We did not find evidence that the Attorney General encouraged anyone to award a grant to Lockwood's Committee or that she knew that an award had been made. We also did not find any evidence that the Attorney General or anyone from her office took any action after Lockwood's grant was not renewed the following year. The remainder of the chapter discusses allegations that we failed to substantiate concerning personnel issues, financial matters, allegations of retaliation, and other issues. iii. recommendations and conclusions In this chapter of the report, we offer a series of recommendations to the Department, including that certain employees receive discipline and that the Department seek compensation from employees who improperly received money or benefits from the Department. We also made nine recommendations concerning systemic improvements in the areas of travel, ethics, and training. Bratt retired from the Department effective August 1, 2000, and is not subject to discipline. We recommended that the Department recover the costs of his improper use of business class travel and his improper use of frequent flyer miles. Lake is also not employed by the Department any longer and is not subject to discipline. We recommended that the Department recover the $25,000 Buyout bonus and the cost of travel expenses that Lake improperly charged the government, including costs associated with the November 1996 trip to Moscow. We found that Stromsem violated security regulations, improperly used frequent flyer miles accrued on government travel for personal benefit, and was involved in the preselection of Hogarty in violation of personnel regulations. We concluded that Stromsem's conduct warrants the imposition of discipline. We also recommended that the Department recover the costs of Stromsem's improper use of frequent flyer miles. We found that Hoover violated security regulations by disclosing classified information to uncleared parties and by removing classified documents to his home. We also found that he improperly traveled on business class on a flight to Moscow in January 1997 and that he improperly used frequent flyer miles accrued on government travel for his personal benefit. We concluded that Hoover's conduct warrants the imposition of discipline. We also recommended that the Department recover the costs of Hoover's improper use of business class travel and frequent flyer miles. We concluded that Trincellito's repeated failure to observe fundamental security practices and his continued resistance to the advice and warnings of ICITAP's security officers warrants the imposition of discipline. We also recommended that SEPS and other agencies responsible for issuing security clearances carefully consider the findings and conclusions set forth in this report before issuing a security clearance to the individuals most involved in the security breaches. In addition, we made non-disciplinary recommendations with respect to two other individuals. During the course of the investigation, we observed various systemic issues, and we suggested improvements for the Department to consider relating to oversight of ICITAP and OPDAT, security, investigative follow-up, travel, training, performance evaluations, and early retirement programs. For example, we recommended that the Department monitor ICITAP's compliance with security regulations by continuing to perform periodic unannounced security reviews. Because many of the travel violations that we found were apparent on the face of the travel forms, we recommended that the Department review the process JMD uses to audit travel vouchers. We believe the Department should offer increased training on travel regulations to employees and secretarial or clerical staff who process travel-related paperwork. And we offered suggestions designed to increase Department employees' use of frequent flyer miles for government travel and to decrease the incidents of improper use. We recommended that increased attention be given to the recommendations and lessons learned from investigations. We found that despite numerous investigations of ICITAP, the same problems continued to surface and that managers failed to act on investigative recommendations. Management must take increased responsibility for ensuring that the results of investigations are appropriately considered and addressed. ____________________