Investigative Reports

The OIG investigated allegations that Bureau of Indian Education (BIE) Director Tony Dearman improperly influenced the findings of a fiscal monitoring review at a BIE-funded boarding school that took place in February 2018 because of his personal associations with the school.We found that Dearman’s presence at the school during the fiscal monitoring review was unusual, but that the monitoring team did not change its findings because of Dearman. We found that Dearman, who works at the BIE headquarters in Washington, DC, had previously served as the school’s principal and his family had associations with the school and still lived near the school. Dearman traveled in February 2018 to visit his family and attended the monitoring team’s exit interview with school officials.Of the 13 BIE employees involved with the review, 9 believed that Dearman’s presence negatively impacted the review, stating that his presence was either improper, inappropriate, a conflict of interest, or an appearance of a conflict of interest. Four team members said Dearman’s presence did not affect them or the team and did not recall him questioning or disagreeing with the team’s findings. All 13 team members told us the team did not changes its findings because of Dearman.Dearman said he attended the exit interview because he wanted to observe the progress of financial monitoring practices he had implemented at the BIE. He denied arguing with the team or questioning its findings and said he spoke up at the exit interview only to ensure the team gave the school accurate information. While we found that no other BIE director had attended these types of review at this or any other BIE school, Principal Deputy Assistant Secretary – Indian Affairs John Tahsuda said he saw no issue with Dearman’s participation.We provided a copy of our report to the Principal Deputy Assistant Secretary – Indian Affairs.

The OIG investigated an allegation that a senior official with the Bureau of Land Management (BLM) committed perjury while testifying in an official capacity at a Federal trial in 2017. In a motion to dismiss, the defense quoted a 2008 letter signed by the official that, according to the defense, proved the official’s testimony was untruthful.We confirmed that some of the official’s testimony contradicted the letter, but we found no evidence that the official knowingly provided false information during the testimony. While the official did sign the 2008 letter quoted in the defense’s motion to dismiss, she did not write the letter, nor did she review or discuss it before providing her testimony in 2017.

The OIG investigated allegations that an oil and gas company irregularly reported oil sold in the Vernal, UT, area to avoid paying royalties. The Bureau of Land Management (BLM) also suspected that a BLM employee’s signature may have been forged on a document related to one of the company’s oil sales. Our joint investigation with the BLM’s Special Investigations Group did not substantiate either allegation. We found that the BLM had known about a measurement problem with an oil tank owned by the company since 2010 but took no action to resolve the discrepancy until 2016. The company that purchased oil from the tank also knew of the problem and used an alternative measurement method, so no royalty loss occurred. Finally, we found a BLM employee’s signature was not forged; instead, the employee’s name was written on a document to indicate the employee was present as a witness to a sale.

The OIG investigated an allegation that a National Park Service (NPS) biologist had coerced at least two interns into having a sexual relationship, and that the biologist misused his position to lead interns to believe he could influence their chances of gaining employment at the NPS.We found no evidence that the biologist manipulated any NPS interns, or that he misused his position. We determined that the biologist had a personal relationship with one former intern, but the intern was not an NPS employee at the time and the relationship did not violate any NPS policies. The biologist and former intern ended their relationship and the former intern is now an NPS employee. We found no evidence, however, that the biologist influenced the former intern’s selection for Federal employment.

The OIG investigated allegations that an official at a tribally controlled college bribed members of the college board of trustees, submitted false mileage claims for work-related travel, retaliated against employees who disagreed with his policies, and failed to report the theft of college funds by a former employee.We did not substantiate the allegations of bribery, false claims, or retaliation. We also found the official ensured the theft was properly reported to law enforcement and that the stolen funds had been repaid in full.The U.S. Attorney’s Office for the District of South Dakota declined to prosecute the former employee for the theft.

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.