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Homeland Security watchdog retires early after his office was forced to retract ‘feel-good’ audits of disaster response

A house on Staten Island that was heavily damaged during Hurricane Sandy, shown in 2012.
A house on Staten Island that was heavily damaged during Hurricane Sandy, shown in 2012. (Paul J. Richards/AFP/Getty Images)

John V. Kelly, the acting inspector general for the Department of Homeland Security, announced his retirement Monday following revelations that he directed his staff to whitewash audits of the agency’s performance after federal disasters.

Kelly, 64, a career auditor who rose to the top job in 2017, announced his retirement in a brief email Monday morning to hundreds of DHS employees and contractors.

“It has been an honor and privilege to serve the American citizens for over 40 years,” he wrote. “However, it is time for me to retire.”

Kelly, who had planned to retire after the confirmation of President Trump’s nominee for the position, wrote in an email to The Washington Post that he “accelerated my retirement because I feel it’s in the best interest of the organization and its employees.”

“As I told the staff, I have truly enjoyed my 11-year tenure with the DHS OIG, an organization with a very important mission and extraordinary staff and managers that successfully execute that mission on a daily basis,” Kelly wrote. “Nobody in DHS leadership or any member of Congress asked me retire.”

Kelly’s announcement follows The Post’s report last week that an internal review found that Kelly overrode auditors who had found problems with the Federal Emergency Management Agency’s response to various disasters.

When teams of auditors flew to local communities to assess how well FEMA was helping residents recover, Kelly — then in charge of the emergency management auditing staff — directed them to ignore most problems, according to the internal review and interviews. Instead, he told them to produce what the staff dubbed “feel-good reports.”

How the DHS watchdog whitewashed audits of FEMA’s disaster response

The practice was repeated over five years after hurricanes, floods, wildfires and other disasters, including Hurricane Sandy in 2012 and catastrophic flooding in Louisiana in 2016, the review found.

Under pressure from House Republicans, the inspector general’s office retracted 13 faulty reports and purged them from its website in 2017 and 2018. Officials acknowledged they did not comply with federal auditing standards.

The inspector general’s office then spent 14 months examining what occurred. Kelly was recused from the review.

Investigators found that Kelly had praised FEMA’s work ethic to his auditors, telling them they would see “FEMA at her best” and instructing supervisors to emphasize what the agency had done right in its disaster response

Kelly joined the inspector general’s office in 2008 from the Government Accountability Office, where his long career covered performance and financial audits and program evaluations at numerous federal agencies.

A graduate of the University of Scranton, he quickly rose through the ranks in the DHS inspector general’s office, which provides independent, fact-driven audits and investigations of the performance of the sprawling agency.

The flawed audits on his watch represented a tiny fraction of the watchdog’s oversight of FEMA. The internal review did not find that Kelly was influenced by a personal relationship with anyone at the emergency response agency.

However, Jennifer Costello, the deputy inspector general, told the head of the internal review team that the “retraction of publicly issued reports because they are not reliable” was “not an insignificant matter.”

The reports, Costello wrote, “represent millions of wasted taxpayer dollars and understandably cast doubt on our credibility.” She said the inspector general’s office needs to hold itself to “the same standards to which we hold the Department when conducting oversight of its programs and operation.”

When the internal review was made public on May 23, Kelly sent his staff an email of apology, writing, “I take responsibility for failing to set a tone that all of our products need to be fully objective.”

The office has agreed to an outside review of its performance by another federal inspector general’s office to ensure that it has improved its overall operations and oversight of FEMA.

Trump this spring nominated Joseph V. Cuffari, a policy adviser to Arizona Gov. Doug Ducey (R), to lead the office. His nomination has not yet been voted on by the Senate.

Sen. Ron Johnson (R-Wis.), chairman of the Senate Committee on Homeland Security and Governmental Affairs, said that the situation underscored the need for Cuffari to be promptly confirmed. “Ensuring a department has an independent inspector general is vital to maintaining transparency and holding government agencies accountable,” Johnson said in a statement.