Allegations of USAID contract rigging and interference with investigation

January 25, 2013
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Documents from an inspector general’s probe last June allege that a top-level USAID official interfered with an investigation of possible contract rigging by the foreign-aid agency’s general counsel.

The alleged obstruction occurred while the inspector general’s office was investigating whether former USAID general counsel Lisa Gomer had worked with retired chief financial officer David Ostermeyer to design a contract that would go to Ostermeyer after he left the agency.

An internal memo from the inspector general’s office indicates Deputy Administrator Donald Steinberg, who ranks No. 2 at the U.S. Agency for International Development, told investigators their efforts to gather information were “inappropriate” and that the case should have been taken to the front office before going to the Justice Department.

“When people are slapping badges down, reading rights and monitoring who is calling who as it relates to career people, it is a mistake,” the document quotes Steinberg saying to investigators.

The memo said the deputy administrator “did not seem like he understood the seriousness of the situation” while discussing the contract issue with an investigator from the inspector general’s office. He even propped his feet on a chair and leaned back in his seat when he first sat down to talk about it, according to the document.

USAID said none of its top officials interfered with the inspector general’s efforts.

“The investigation was conducted unimpeded and we cooperated with the investigation,” said spokesman Kamyl Bazbaz. “The agency supports the important role that the USAID inspector general plays to combat waste, fraud and abuse by conducting investigations and audits of agency operations.”

The case involving Gomer is ongoing, according to a source familiar with the investigation, who asked not to be named. But David Schertler, an attorney representing Gomer, said the Justice Department has dropped the matter.

“We understand that there was an internal inspector general investigation, but we’ve been told by the Department of Justice that they’ve declined to pursue any kind of criminal investigation,” Schertler said.

A Justice spokeswoman said she had no information on the status of the case.

The department authorized USAID’s inspector general to release the memos to the House Oversight and Government Reform Committee, which requested the information.

For more information on this development, view the extended story that appeared in Friday’s Washington Post.

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Josh Hicks covers the federal government and anchors the Federal Eye blog. He reported for newspapers in the Detroit and Seattle suburbs before joining the Post as a contributor to Glenn Kessler’s Fact Checker blog in 2011.
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Josh Hicks | January 25, 2013