Raymond Jefferson leaves Labor Department after ethics finding

A high-ranking Labor Department official appointed by President Obama to oversee a job-training program for veterans has resigned after an inspector general’s investigation found that he had violated federal procurement rules and ethics principles.

Raymond M. Jefferson, assistant secretary of the Labor Department’s Veterans’ Employment and Training Service, submitted his resignation Tuesday.

Jefferson engaged in “a pattern of conduct . . . which reflects a consistent disregard of federal procurement regulations, federal ethics rules and the proper stewardship of appropriated dollars,” according to the report from the Labor Department’s inspector general.

Peter Choharis, a lawyer representing Jefferson, said Thursday: “This report . . . relies on hearsay, has many internal inconsistencies and contradictions, and omits substantial exculpatory evidence. We look forward to rebutting the report in its entirety when we have full access to the record.”

The charismatic Jefferson, a West Point graduate and former Army Ranger who lost all the fingers on his left hand in a training accident, was considered a rising star in veterans’ circles. Jefferson, a Fulbright fellow with an MBA from Harvard Business School, was nominated by Obama in April 2009 to head the Veterans’ Employment and Training Service program, which is meant to help veterans prepare for the civilian job market.

The report said that Jefferson and his deputy, John McWilliam, “abused their authority” by “coercing” VETS employees into awarding contracts to consultant Stewart Liff, a former colleague of Jefferson’s.

Liff, a human resources and management consultant who was paid as much as $275 an hour, received approximately $700,000 over a 16-month period for services that could have been secured at a much lower cost through open competition, according to the report. The services included advice on the proper color scheme for offices.

“This is the kind of boondoggle that taxpayers have every right to expect would come to a screeching halt,” said Sen. Claire McCaskill (D-Mo.), who in December requested that the inspector general investigate whistleblowers’ allegations of misconduct within the VETS program.

“They shouldn’t be hiring management consultants at 700 grand, and hiring friends, when there are thousands of veterans out there on modest incomes,” McCaskill said. “It’s just wildly inappropriate.”

‘Positive momentum’

Jefferson had gained a reputation in the veterans community as someone who was trying to shake the bureaucracy and address the high unemployment rates among veterans of Iraq and Afghanistan. “He had generated a lot of positive momentum with VETS,” said Ryan M. Gallucci, deputy director of national legislative service for the Veterans of Foreign Wars.

Jefferson told investigators that he did not receive any training in federal government contracting or procurement. He said he told his deputies “to move quickly, and also legally, ethically and properly” in hiring Liff.

The report says that McWilliam and VETS Chief of Staff Amit Magdieli “placed VETS employees in untenable positions, forcing them to utiltize existing federal contracts in order to hire Liff without competition.”