Investigative Reports

The OIG investigated allegations that a United States Geological Survey (USGS) manager made unwelcome and inappropriate comments of a sexual nature to a female subordinate.We found that the USGS manager provided inconsistent statements and demonstrated a lack of candor during interviews, but ultimately admitted to making inappropriate sexual comments to the female subordinate. We also found that the manager had been counseled by a former supervisor in 2013 for allegedly making similar comments to other employees and, consequently, had been required to take Equal Employment Opportunity training; the manager had also been counseled by a current supervisor in 2016 for the same reason.

The OIG investigated an allegation that a tribal official stole Federal funds by using a tribal charge card for personal expenses.We found that the official embezzled more than $98,000 by charging personal expenses to tribal government charge cards assigned to him from December 2009 until July 2015, when the tribe canceled all tribal government charge cards. The theft included charges for restaurants, airfare, retail purchases, food, and utility and telephone services. The charges were billed to the tribe and paid using a combination of Federal and tribal funds.The U.S. Attorney’s Office for the District of Rhode Island declined prosecution. The tribal official refused our request for an interview.

The OIG investigated allegations that a National Park Service (NPS) superintendent abused his authority by using Federal funds to replace the driveway and perform grounds cleanup at his Government-leased quarters, and that he violated safety regulations and the National Historic Preservation Act of 1966 regarding renovations made to his office.We did not substantiate the allegations against the superintendent. We found the superintendent acted within his authority when he directed the use of Federal funds to replace the driveway and perform maintenance at his Government-leased quarters. We also found that replacing the driveway and contracting for the grounds cleanup was appropriately justified and approved by the superintendent’s supervisor. Finally, we found no evidence the superintendent violated safety regulations or the National Historic Preservation Act of 1966 during the renovation of his office.

The OIG investigated allegations that a Bureau of Land Management (BLM) employee violated conflict of interest laws by steering BLM contracts to a business that he owned.The employee admitted to the conflict of interest and that his actions were wrong. We found that the employee’s wife owned a business and that between April 2016 and August 2017, the employee steered 11 contracts, totaling $27,409.60, to his wife’s business. We also learned that in December 2017, the employee submitted an altered purchase approval form to facilitate payment to his wife’s business, but the BLM did not pay that claim. We did not find that the business failed to provide any of the services for which it was paid.Finally, we determined that the employee failed to list his wife’s business as a source of reportable income for his wife on his annual Confidential Financial Disclosure Reports that he filed with the BLM in 2016, 2017, and 2018. The employee agreed that he should have disclosed the information but denied that he intentionally omitted it as an effort to conceal that his wife owned the business.The U.S. Attorney’s Office for the District of Montana declined prosecution. This is a summary of a report we provided to the BLM Director.

The OIG investigated allegations that three supervisors in a Bureau of Indian Affairs (BIA) regional office were involved in a variety of incidents that included misusing and failing to properly account for the office’s specialized communications vehicles, misusing take-home Government-owned vehicles (GOVs), and improperly purchasing items with Government funds to give as gifts to local law enforcement agencies.We found no evidence that the office’s specialized communications vehicles had been misused, but the BIA did not consistently require operational plans for the vehicles’ use. We also found that after one of the three supervisors accidentally caused $10,500 in damage to one of the vehicles in 2016, his managers did not follow BIA property management policy, because they did not inquire about the accident.Our investigation identified one example of misuse of a take-home GOV, when one of the three supervisors acknowledged occasionally making personal stops in his GOV on his way home from work. U.S. Department of the Interior policy prohibits personal use of GOVs.Finally, we found no evidence that any of the supervisors used Government funds to purchase gifts to give to local law enforcement entities.

The U.S. Department of Labor, Office of Inspector General’s Investigations Newsletter highlights selected investigative accomplishments of our office for the period from April 1 to May 31, 2018.

An Amtrak Food Specialist in Los Angeles, California, was terminated from employment following an administrative hearing June 22, 2018, for violating company policy by fraudulently designating four individuals who were not his legal dependents as beneficiaries on his company health insurance. During the time these individuals were improperly covered under the company’s health insurance plan, the company paid approximately $744,000 in health care claims on their behalf.

We investigated approximately $10 million in unsupported payments that were made to the Indian Pueblos Federal Development Corporation (IPFDC) and its partners, pursuant to IPFDC’s contract to develop and construct the Bureau of Indian Affairs (BIA) and Bureau of Indian Education buildings in Albuquerque, NM. Our investigation determined that former IPFDC President and Chief Executive Officer Bruce Sanchez and New Mexico real estate owner Thomas Keesing stole over $3.5 million from the IPFDC between 2004 and 2008, by falsifying invoices for services that Keesing claimed he provided as a contractor for the IPFDC, including services on the two BIA buildings. Keesing then shared the proceeds of the fraudulently obtained payments with Sanchez.Sanchez pled guilty in the Federal District of New Mexico to embezzlement and attempted tax evasion and was sentenced to 51 months in prison. Keesing pled guilty to embezzlement and failure to file taxes and was sentenced to 35 months in prison. Sanchez and Keesing were also ordered to jointly repay $3,575,000 and were debarred from Federal contracts for 3 years.

An Amtrak Foreman was terminated from employment on June 18, 2018, after a hearing officer found that he violated the company’s Standards of Excellence by failing to notify the company of a drug or alcohol-related conviction for engaging in the distribution of, possession with intent to distribute, or importation of a controlled substance.

The OIG investigated allegations that a contractor was improperly involved in a Bureau of Land Management (BLM) construction project and had a conflict of interest during multiple contract awards related to that project. We also investigated allegations that a BLM supervisor circumvented contracting rules to steer awards to the contractor.We confirmed the allegations against both the contractor and the BLM supervisor. We found that the contractor improperly contributed to the statements of work for contracts during the design phase of the project and influenced the award of those contracts. He then subcontracted with the companies that received the awards.We found that the BLM supervisor ignored guidance from BLM contracting personnel to compete the design phase of the construction and allowed the contractor to influence awards of contracts. When contracting personnel objected, the supervisor paid the contractor with a Government purchase card to circumvent controls.The United States Attorney’s Office for the District of Nevada declined prosecution of this matter and the BLM supervisor has left the Department.

The OIG investigated allegations that a Bureau of Land Management (BLM) employee shared proprietary contract information, accepted bribes, and had improper relationships with Government contractors. We found the employee socialized with Government contractors on a regular basis, which had the appearance of a conflict of interest to some colleagues, but did not violate ethics regulations. We found no evidence that the employee shared proprietary contract information or accepted bribes from Government contractors.

The OIG investigated allegations that an oil and gas company failed to comply with Federal regulations and to pay royalties associated with tribal leases. We substantiated the allegations and found the company failed to accurately report and pay gas royalties in 2014 for seven leases located on the Fort Berthold Indian Reservation. We found, however, that the company made genuine attempts to correct the royalty reporting, but the adjustments did not post properly. After consultation between our office, the U.S. Department of Justice, the Office of Natural Resources Revenue (ONRR), and company representatives, the company corrected the suspect reporting and paid all additional gas royalties associated with the seven tribal leases.

An Amtrak electrician with the Mechanical department was suspended from employment on June 13, 2018 for violating company policy. The employee was initially terminated; however, a Public Law Board reduced the penalty of termination to a suspension and reinstated the employee without backpay.

The VA Office of Inspector General (OIG) received allegations that a senior manager at a VA medical facility abused their position and VA resources. The senior manager allegedly instructed a subordinate to provide the senior manager’s family member with additional daily Home-Based Primary Care (HBPC) home nursing visits as well as additional fee-basis homemaker services. More specifically, the complainant alleged that the senior manager requested these services be provided to his/her family member while the senior manager was on vacation. The senior manager also allegedly misused his/her position when he/she instructed subordinates to waive any additional copayments for services rendered to his/her family member. Finally, the complainant alleged that the senior manager’s spouse acted as the senior manager’s surrogate by requesting expedited scheduling with VA Choice Program physicians while identifying themselves as the spouse of the senior manager. The OIG did not substantiate any of these allegations. Because the OIG did not substantiate any of the allegations, the identity of the senior manager will not be disclosed in this report.

The OIG investigated allegations that officials from the Bureau of Reclamation (USBR) and the U.S. Department of the Interior, Office of the Solicitor (SOL), obstructed an administrative inquiry into alleged sexual misconduct by a USBR official. The complainant alleged that USBR and SOL officials withheld information, attempted to influence witnesses by holding meetings to discuss the inquiry, and tried to stop the inquiry. The complainant further alleged that these officials provided advice to the inquiry while also advising regional management on how to address the alleged misconduct. Finally, the complainant alleged that an SOL official made disparaging comments about their work product to USBR leadership because of the complaint.We found that two USBR officials omitted information during the administrative inquiry and that one also withheld a requested document. While we did not find evidence of improper involvement to influence or stop the inquiry, we did find that poor communication between the USBR and the SOL created confusion and mistrust regarding the roles and responsibilities of those involved with the inquiry. We confirmed that the SOL criticized some of the content in the report prepared by the complainant, which the SOL said included the complainant’s opinions, but we did not find evidence that any personnel actions were taken against the complainant.

The OIG investigated allegations that Georgie Russell, Chief Financial Officer for the Chippewa Cree Construction Company (C-4), embezzled funds from C-4 and Dry Forks Farm, a tribally owned business. We also investigated allegations that Russell submitted false quarterly financial reports to the U.S. Bureau of Reclamation (USBR) for the federally funded Rocky Boys/North Central Montana Regional Water System Project.Our investigation confirmed that Russel embezzled funds from C-4 and Dry Forks Farm by falsifying time sheets and authorizing fraudulent payments. We also found that Russell submitted false quarterly financial reports to USBR, in which she misrepresented C-4’s cash on hand for the water project by as much as $1.7 million. Russell pled guilty in U.S. District Court for the District of Montana to theft and filing false statements. She was sentenced to 18 months in Federal prison and ordered to repay $61,230 in restitution.

We investigated allegations that James Milestone, Superintendent of California’s Whiskeytown National Recreation Area (WHIS), National Park Service (NPS), solicited donations and inappropriately collected funds for the park partner organization Friends of Whiskeytown (FOW). We also investigated allegations that Milestone had park employees work on FOW projects while on duty, misused maintenance project funds, disregarded compliance rules and other requirements for a trail project, engaged in gender discrimination and sexual harassment, and misused a Government-owned vehicle.We substantiated the allegations that Milestone routinely violated Federal regulations and NPS policies and found that he demonstrated questionable leadership practices:• Milestone admitted that he had solicited and collected donations for the FOW and asked his subordinates and a park concessionaire to do the same.• Milestone violated ethics regulations by offering the services of WHIS employees and its lodging accommodations to the FOW for fundraising events.• Milestone ignored departmental policy and compliance requirements and improperly redirected funding for a proposed trail project.• Milestone communicated unprofessionally with his staff, including making inappropriate gender-based remarks.• Milestone routinely misused a Government-owned vehicle; we also determined that he demonstrated a lack of candor when he denied the misuse.We provided this report to the NPS Deputy Director, who is exercising the authority of the NPS Director, for any action deemed appropriate.

The OIG investigated allegations that counterfeit purchase requests for high value electronic goods, appearing to have been sent by officials in the U.S. Department of the Interior Office of Acquisition and Property Management (PAM), had been sent to small businesses throughout the United States.We substantiated the allegations. We found fraudulent emails and purchase requests linked to at least two PAM employees who had not written or authorized the documents. We found that the suspect used an online service that masked the sender’s email address and gave victims the impression the emails were sent from official “.gov” email accounts. There were no indications that any of the fraudulent purchase attempts were successful.Our findings indicated the subject was likely outside of the United States and there was no apparent loss to the Government or any of the small businesses, so we closed our investigation.

The OIG investigated allegations that a former Bureau of Land Management (BLM) employee provided confidential procurement information to a prospective contractor to give it an unfair advantage on a contract bid. The complainant alleged the former employee provided the information while still employed by BLM and, after retiring, went to work for the contractor. We also investigated allegations the former employee influenced a change to the GSA schedule type to allow the contractor to be eligible to bid on the contract.Our investigation found no evidence that the former employee had access to or provided any confidential procurement information, and we confirmed the former employee never worked for the contractor in question. We also found no evidence the former employee was involved in the decision to change the GSA schedule type or had any other influence on the contract award.

We found that the fire alarm and suppression systems are not fully functioning despite $1.2 million in contract awards to repair the systems.

The OIG investigated allegations that approximately $30,000 in checks issued erroneously by the Office of the Special Trustee for American Indians (OST) in the name of a deceased tribal member had been fraudulently negotiated after his death.We found that the decedent’s son received the checks, endorsed them with his own signature, and cashed them. The son admitted he took the checks and acknowledged he knew it was wrong to do so.We also learned that the OST did not have a process in place to identify beneficiaries who had died. In this instance, the decedent’s sister attempted to report his death to OST, but she did not have sufficient information to complete the required report when she called the OST’s Trust Beneficiary Call Center. The center did not follow up with the sister and did not remove the decedent from its list of beneficiaries.We referred this matter to the United States Attorney’s Office for the District of New Mexico, which declined to prosecute.We will conduct an inspection of OST to determine internal control weakness that allowed the fraud to occur.