Regina E. Dugan, who ran the Defense Advanced Research Projects Agency from July 2009 until March 2012, was cited by the Defense Department Inspector General’s office for endorsing a specific product, service or enterprise, a breach of ethics. (Jeffrey MacMillan/JEFFREY MACMILLAN)
Google executive who ran Pentagon agency under scrutiny

A Google executive who previously ran a $3 billion Pentagon agency tasked with developing technology for the U.S. military violated ethics rules by pitching products from a company she had previously founded, according to a report released Wednesday by the Pentagon’s watchdog agency.

Regina E. Dugan, who ran the Defense Advanced Research Projects Agency from July 2009 until March 2012, was cited by the Defense Department Inspector General’s office for endorsing a specific product, service or enterprise, a breach of ethics.

The inspector general found that while serving as DARPA’s director, she briefed numerous senior defense officials on methods for U.S. troops to find improvised explosive devices and bomb-making facilities. The meetings created potential business opportunities for the company RedXDefense, in which she was a former chief executive officer, said the inspector general’s report, released to The Washington Post through the Freedom of Information Act.

“In communications with senior DoD officials, she used RedX proprietary and other materials originally developed for and used in RedX sales presentations,” states the report. “She advanced a theory integral to RedX product development, promoted a multi-step process the RedX product suite used to implement the theory, highlighted the results of field trials that used RedX products to demonstrate the efficacy of the theory and process, and featured a RedX sales slogan. She also endorsed the adoption of an effort to put sensors on dogs, an extension of a DARPA project on which RedX performed.”

The inspector general detailed one Sept. 11, 2009, meeting with Marine Gen. James N. Mattis and Army Lt. Gen. Thomas F. Metz. Mattis, then the commander of U.S. Joint Forces Command, and Metz, then the commander of the Joint Improvised Explosive Device Defeat Organization, listened to a presentation from her that included elements of the sales pitch for her former company’s technology, including the slogan “Shoot the archer, not the arrow.”

At a minimum, the inspector general found, the presentation led to “the creation of a business lead for RedX.” She had sought legal advice on how to proceed with the meeting, investigators said, but did not disclose that she would use RedX sales material in any of her presentations. The inspector general did not recommend any kind of punishment for the action.

Dugan denied the accusations, saying she sought legal counsel, the report said. A spokesperson for Google said Wednesday that the investigation was closed over a year ago, and made it clear the company stands by her.

“At no time did Dr. Dugan use her position as the Director of DARPA to make any endorsement — explicit or implied,” a statement from Google said.

Dugan’s connection to RedX was first examined in a March 2011 story by Wired magazine. The story, which was cited by the inspector general, said that in a June 15, 2010, financial ethics report, Dugan stated that she was owed $250,000 by RedX, which she co-founded with her father. DARPA had just awarded a $400,000 research contract to RedX six months before — after she already was running the agency.

Dugan left DARPA in 2012, after the inspector general had launched an investigation. But defense officials said that her departure from the government had nothing to do with the probe. At the time, she was lauded for focusing on U.S. troops on the battlefield rather than the futuristic long-term projects for which DARPA is often known.

After leaving the Defense Department, Dugan led Google-owned Motorola’s secretive Advanced Technology Group, including an electronic neck tattoo designed to determine if someone is lying by assessing their voice. Google sold Motorola in January but kept Dugan’s development organization in the corporation.

Dan Lamothe, Craig Whitlock from Check Point

IRS handed taxpayer information to contractors

The Internal Revenue Service exposed more than 1 million taxpayers to “increased risk of fraud and identity theft” by giving their private information to contractors without background checks, according to a federal audit.

The Treasury Inspector General for Tax Administration said in a report released Thursday that the IRS handed over a disc containing sensitive data on about 1.4 million taxpayers to a printing firm without any of the company’s employees being subjected to screenings.

The audit also revealed that the IRS did not ensure timely background checks for 12 other contracts, even though agency staff had determined that investigations were required for the businesses involved.

Additionally, auditors determined that 20 IRS contracts involved non-agency personnel who had not signed nondisclosure agreements, according to the report.

IRS policy requires contractor employees to have background checks if they will have access to “sensitive but unclassified” information, which includes the names, addresses and Social Security numbers that the IRS released to its service providers.

“Allowing contractor personnel access to and custody of sensitive information prior to the appropriate background screening process increases the risk to taxpayer and the IRS of misuse of taxpayer and other sensitive data and possible identity theft,” the report said.

The IRS said it began issuing more-explicit guidance and training over a year ago to ensure that contractor personnel with access to sensitive information submit nondisclosure agreements. The moves were in line with recommendations from the inspector general’s office.

“The IRS is committed to clarifying policies and procedures to ensure appropriate security provisions are included in all appropriate solicitations and contracts,” the agency said in a statement Thursday.

Asked whether the IRS knows of any incidents involving abuse of the sensitive information, the agency noted that the report did not include any findings of inappropriate use.

“Keep in mind, the IRS only provides contractors access to the necessary data needed to complete the contracted work and ensures that data is recovered or destroyed when the work is complete,” the agency said in a statement.

Josh Hicks from the Federal Eye