The Washington Post

Interference with bid-rigging probe alleged at USAID

USAID Deputy Administrator Donald Steinberg (Richard Nyberg/AP)

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 former chief financial officer David Ostermeyer to design a contract that would go to Ostermeyer after he retired.

The inspector general’s office said in an internal memo that Deputy Administrator Donald Steinberg, who ranks No. 2 at the U.S. Agency for International Development, told investigators that 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.

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, said 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.

The documents do not specify whether the investigations are ongoing, but observers said Justice’s willingness to release the material suggests that the agency does not intend to pursue criminal investigations.

The USAID spokesman also said that the agency terminated the solicitation Gomer had allegedly tailor-made for Ostermeyer when the agency learned of it.

USAID reassigned Gomer to a new post on Aug. 20, and she resigned from USAID on Jan. 13, Bazbaz said. The former general counsel’s last day with the agency will be Feb. 9, the spokesman said.

Ostermeyer is a 34-year USAID veteran who was named chief financial officer in 2007, according to his profile on the agency’s Web site. He retired from the agency Jan. 3. He declined to comment on the investigation.

Josh Hicks covers Maryland politics and government. He previously anchored the Post’s Federal Eye blog, focusing on federal accountability and workforce issues.

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