Ex Lockheed Lobbyist Now in Key Defense Oversight Role

After reading this article, I recalled details of the allegations I raised in my June 2009 Qui Tam lawsuit, filed with the Dept of Justice.  Call me naive.  But after reading this article, I questioned... "Who within public service is left to trust that will honestly protect the interest of our tax dollars?"  

By blogging about government corruption, I feel like I'm fighting a lost cause.  As a former military budget officer and whistle blower, I was punished in the worse way for for reporting military fraud.  My allegations also included evidence of illegal military revolving door practices.  Like the story goes, these allegations were never investigated. 

As a tax paying citizen, I would like to know which federal agency determines what allegations of fraud to investigate and which ones to ignore.  Is there a certain dollar threshold, or lost to the tax payers, before the Dept.  of Justice  Anti-Trust division would consider investigating Qui Tam claims of  illegal military or defense contractor revolving door practices?

I'm just saying....

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Last week POGO posted the following article, written by BEN FREEMAN, Ph.D., 

--- A former executive and lobbyist for defense contractor Lockheed Martin has been appointed to one of the most powerful posts on Capitol Hill overseeing the defense industry.

Ann Elise Sauer, who left Lockheed last year, is now the Republican staff director at the Senate Armed Services Committee. The Committee oversees military spending, including major weapons systems that are central to Lockheed’s business.

Sauer received more than $1.66 million from Lockheed during a reporting period that encompasses this year and last year, according to a financial disclosure form she filed in April. The $1.66 million included salary, bonus, deferred compensation and a lump sum described in the filing as “RETIRED PAY.”

Sauer was appointed to the Senate staff position in February. Her financial disclosure form, recently noted by Legistorm, called attention to her appointment.

Lockheed Martin, the Department of Defense’s top contractor (in terms of total contract dollars awarded yearly), receivestens of billions of dollars annually from the Pentagon. Last year alone, the firm was awarded Department of Defense contracts valued at more than $33 billion. The company is responsible for some of the Pentagon's most expensive and troubled weapon systems, including the F-22 and F-35 fighter jets.

As minority staff director, Sauer reports to Sen. John McCain (R-Ariz.), the ranking Republican on the Senate Armed Services Committee.

McCain has a history as a vocal critic of Lockheed Martin programs. Before Sauer’s appointment, McCain referred to the beleaguered F-22 as an “expensive corroding hangar queen” and labeled the F-35 program “a scandal and a tragedy.”

More recently, McCain announced that he will be joining Lockheed Martin and other Pentagon contractors in their fight to avoid defense sequestration -– a potential consequence of  last year’s Budget Control Act that could reduce defense spending to approximately 2007 levels.

“I have to admit I was shocked when we learned this,” Danielle Brian, POGO’s executive director, said of Sauer’s appointment.

“For at least a decade, McCain has had no peers in the Congress when it comes to oversight of major defense contractors,” Brian said. “I don't see how he can possibly continue this legacy given this staffing decision, and that is terribly disappointing,” she added.

McCain has called attention to what he has described as potential pitfalls of the revolving door between the defense industry and the government. In a December 15 Senate speech, McCain said:

“To be clear, the military-industrial-congressional complex does not cause programs to fail.  But, it does help create poorly-conceived programs -- programs that are so fundamentally unsound that they are doomed to be poorly executed.  And, it does help keep them alive -- long after they should have been ended or restructured.”

Sauer and a spokesman for McCain did not respond to requests for comment.  A Lockheed spokesman declined to comment.

Among the questions the McCain spokesman left unanswered: Whether Sauer will recuse herself from any matters involving Lockheed. 

Because the Armed Services Committee helps set the Pentagon’s budget, it is unclear how the Republican staff director could avoid matters that affect the company.

Sauer is one of the more vivid examples of the revolving door between the defense industry and its overseers in government.

Before her career of more than 10 years at Lockheed, she worked in the Senate for more than two decades, ultimately as a senior aide to McCain, according to a Sauer biography on a web site associated with the National Defense Industrial Association.

When she left Lockheed in January 2011, she was “Vice President, Acquisition Policy, Logistics, and Budget,” according to the biography.

Lobbying Disclosure Act records show that Sauer was a registered Lockheed lobbyist during most of her time with the firm.

“At various times, she was responsible for managing the corporation’s senior-evel [sic] interfaces with senior Executive and Legislative Branch officials on a wide array of programs and policy issues,” the Sauer biography says.

A LinkedIn profile for Sauer says: “I held several senior positions in the Government Relations office, including management of marketing and lobbying teams covering a broad array of the corporation's areas of interest.”

After leaving Lockheed, Sauer ran her own consulting business, which “provided advisory services to major defense corporations,” the biography says. Sauer’s financial disclosure form lists BAE Systems paying her $55,000 in consulting fees. A BAE Systems spokesman could not be reached for comment.

Sauer’s story marks the second time in as many months that POGO has reported on a Congressional armed services committee staffer having financial ties to a major defense contractor. Last month POGO's Dana Liebelson reported that, before joining the House Armed Services Committee, Thomas MacKenzie was a Northrop Grumman lobbyist and held between $100,000 and $250,000 worth of the company’s stock.

Despite fraud, Air Force kept using Beach contractor

What a tangle web weave when we first practice to deceive!!  

By Bill Sizemore
The Virginian-Pilot
© July 25, 2012

VIRGINIA BEACH

The Air Force continued doing business with a Virginia Beach government contractor for months after the company was found to have engaged in a $9.5 million fraud.

Federal contract documents show that the company, SCG, has collected more than $1.7 million from the Air Force for security training services since August, when a jury found that SCG and its chief executive, Jamie Smith, defrauded a Pennsylvania couple in an investment deal gone bad.

The couple, Craig and Mary Jo Sanford, have not recovered any of the $12.5 million they invested with Smith in 2007, their attorney said last week.

The Sanfords are pursuing Smith in state court in Virginia Beach in an effort to collect their money.

A spokesman for the Air Force's Air Education and Training Command, the contracting agency, said the command questioned SCG after the fraud finding and was assured that the company named in the jury verdict was a different corporate entity than the one under contract.

Nevertheless, spokesman David Smith said, the Air Force declined to exercise its option for an additional year and let the contract expire April 30.

Meanwhile, it appears that SCG is defunct and Jamie Smith has left the country.

"I had to seek employment out of the USA in order to raise funds for new Counsel," he wrote in a pleading last month with the 4th U.S. Circuit Court of Appeals, where he is appealing the fraud verdict handed down in last year's civil lawsuit.

In a brief email exchange with The Virginian-Pilot last week, Smith would not reveal his whereabouts.

A public relations representative for Smith, Yuri Slavik, said only that Smith "no longer resides in Virginia" and "is presently occupied with a book project."

At Smith's last known address, a 4,385-square-foot, $547,000 home with a backyard pool in the Pungo section of Virginia Beach, a huge three-day sale of household goods was held July 13-15. Thousands of items were put up for sale, including antiques, collectibles, electronics, minks, sporting goods, gun cases, survival gear and a hand-painted chandelier.

Smith, 42, has a colorful history as a purported CIA operative, an executive at the high-profile security firm Blackwater, and a self-proclaimed security expert who appeared frequently on national cable newscasts.

In an interview with a TV station in his native Mississippi last year, he claimed to have had a role in training the Virginia Beach-based Navy SEALs who killed al-Qaida leader Osama bin Laden in 2011.

More recently, in emails released by WikiLeaks.org in March, Smith claimed to have taken part in the killing of Libyan dictator Moammar Gadhafi and said he was working to help bring about regime change in Syria.

Craig Sanford met Smith in 2007 shortly after reaping a financial windfall from the sale of a medical waste hauling business, according to the federal lawsuit he and his wife filed later. Smith was said to have portrayed himself as a successful entrepreneur in the security business with "a unique ability to invest funds overseas."

Smith was alleged to have guaranteed Sanford a 10 percent annual return on his money, whereupon Sanford turned over $12.5 million in return for a promissory note signed by Smith.

One of Smith's employees, a disbarred lawyer named Troy Titus who later went to prison for investment fraud, characterized the money in an email to Smith as a gift from God, according to the federal lawsuit.

And in April 2009, SCG's attorney called Sanford with the news that the money had all been "lost in the stock market."

Following the fraud verdict last August, when the Sanfords were awarded a $9.5 million judgment, they were told Smith had turned over his interest in the company to his brother, Todd.    

Since then, the Sanfords allege in their state-court lawsuit, SCG has made dozens of illegal payments totaling more than $500,000 to Jamie Smith, Todd Smith and their wives.

In essence, the Smith brothers have been treating SCG as "their personal bank account," using a variety of corporate entities created to conceal and launder the company's assets, the Sanfords allege in a recent court filing.

"The family has been living off the company - living off the assets, most of which were purchased with my client's money," said Chap Petersen, a Fairfax attorney and Democratic state senator who represents the Sanfords.

George Doumar, an Arlington attorney who represents SCG and Todd Smith, said his clients "will vigorously contest the allegations."

SCG and Todd Smith have asserted in court papers that the transfer of ownership was meant not to evade creditors such as the Sanfords but to repay money that Todd Smith had advanced the company while Jamie Smith "wasted or lost millions of dollars."

Doumar said SCG now has "no ongoing revenue."

A training facility that SCG operated in Holly Springs, Miss., has shut its doors. A historic house in Holly Springs that the company had bought to house trainees is in foreclosure.

"The thing that really irritates me," Petersen said, is that for months after the fraud verdict, "the federal government, with our tax money, continued to throw money at this family."

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Fox News Spends Two-Plus Hours Distorting Obama's Small Business Comments

Media Matters for America reported:

Over two days, Fox News spent 42 segments and more than two hours of airtime manufacturing a scandal by deceptively editing comments President Obama made at a campaign appearance in Virginia.  

On July 13, Obama made the unremarkable observation that business owners do not achieve success in a vacuum, but that public infrastructure - such as roads, schools, and fire departments - create a community that supports businesses:

OBAMA: If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business -- you didn't build that. Somebody else made that happen. The Internet didn't get invented on its own. Government research created the Internet so that all the companies could make money off the Internet. 

The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don't do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires. 

Media conservatives have distorted those comments to accuse the president of expressing hostility toward business.

In discussing the speech relentlessly in the past 2 days, Fox has fixated on the passage where Obama said, "If you've got a business, you didn't build that." But Fox ignores what Obama was talking about before saying "you didn't build that," when he touted "this unbelievable American system that we have that allowed you to thrive," and said: "Somebody invested in those roads and bridges."

Fox's manufactured controversy has now become the focus of an official Mitt Romney campaign ad.

Fox Devotes More Than Two Hours And 42 Segments To Manufactured Controversy

Fox's campaign began during the July 16 edition of Fox & Friends, where Obama's comments were edited to make it seem as though Obama said small business owners do not deserve any credit for their own success. The edited clip featured the following two lines:

OBAMA: If you've got a business, you didn't build that, somebody else made that happen.

[...]

The point is that, when we succeed, we succeed because of our individual initiative, but also because we do things together.

Co-host Gretchen Carlson called the heavily edited clip "most startling." 

Media Matters monitored Fox's coverage of Obama's comments on July 16 and July 17, and found that Fox News devoted 2 hours and 19 minutes to covering the controversy -- one largely manufactured by the network itself. The coverage culminated with Fox's afternoon and primetime lineup on July 17, with Your World with Neil Cavuto, The Five, Special Report, The O'Reilly Factor, Hannity, and On the Record with Greta Van Susterencontributing 1 hour and 5 minutes to the story.

Two prime-time shows, Hannity and On the Record with Greta Van Susteren, devoted a total of more than 15 minutes to the story on July 17. The O'Reilly Factor similarly devoted more than 14 minutes.

Including teases that perpetuated Fox's distorted portrayal of Obama's comments, Fox News dedicated 42 individual segments to the story over the course of two days. Fox & Friends alone ran nine segments in two days, while the "straight news" program America's Newsroom covered the story six times, inviting guests such as Fox Business host Stuart Varney, Sen. John Barrasso (R-WY), and Donald Trump to attack Obama.

Happy Birthday Nelson Mandela!!

Reining in Wasteful Defense Spending: End of the World as We Know It? Or Common Sense?

Project on Government Oversight reports - The Mayan calendar implies that the world is going to end this December—but the defense industry seems to be holding out for Jan. 2. That’s when the Department of Defense will start getting hit by about $500 billion in across-the-board cuts (also known as "sequestration"), spread out over the next decade (unless Congress manages to intervene.)

Listening to the big contractors, you’d think sequestration was the first sign of the apocalypse. Defense Secretary Leon Panetta has called the cuts a “doomsday scenario.” And collectively, the top five U.S. defense contractors have already ramped up their spending on lobbying by 11.5 percent compared to last year, according to NextGov.

Lockheed Martin, the largest U.S. defense contractor, is also threatening to lay off thousands upon thousands of workers, a move that experts—including Project On Government Oversight national security expert Ben Freeman—are calling a “political stunt” intended to push Congress to act.

According to Freeman, defense contractors may be playing Chicken Little, but they have plenty of revenue to fall back on. Even if contractors bore every single sequestration cut, they’d still be getting “more than $300 billion a year from taxpayers.”

If Panetta is really so concerned that sequestration is going to lead to an apocalyptic scenario, maybe he should start looking at the tremendous amount of taxpayer dollars wasted on contracting, instead of promising to preserve “the  health and viability of the nation's defense industrial base." Not to mention, he could start cutting the other hugely wasteful weapons programs POGO has outlined.

No one actually wants sequestration. But as POGO’s Winslow Wheeler tells me, even in a worst-case scenario, Pentagon spending will drop to a level that is still three times that of China, Russia, Iran, North Korea and Syria—combined, and still $30 billion above what the U.S. spent on average during the Cold War.  

“It is a historically generous amount of spending for the Defense Department,” says Wheeler. “However, no one in Congress seems willing to stand up to the defense corporations.”

We’ve designed this handy chart to help you decide whether or not you’re on the defense contractor apocalypse train—or if you’re thinking rationally about defense spending. As Robert Frost would (maybe) write, “some say the world will end in fire, some say in ice…and contractors say it’s taking five dollars away from the F-35 fighter jet.”

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Romney Says He Knew He'd Be Booed at NAACP

ABC News reported - Mitt Romney said after being booed at the NAACP today that he "expected" the strong objection in response to his pledge to repeal President Obama's health care law.

The black audience members rained boos on Romney three times during his speech -- first when he said he'd repeal the health law, once when he said Obama's record proves he hasn't done enough on the economy and other matters, and once when he told them that he would be a president who makes the lives of African-Americans better.

In a friendly-territory interview on Fox Business Network, Romney told the Republican-fond host Neil Cavuto, "I think we expected that, of course."

"I am going to give the same message to the NAACP that I give across the country, which is that Obamacare is killing jobs, and if jobs is the priority, then we're going to have to replace it with something that actually holds down healthcare costs, as opposed to causing more spending for the government and more spending for American families," Romney said.

Avis Jones-DeWeever, the executive director of the National Council of Negro Women, said Romney had accomplished a "calculated political ploy" by signaling to conservatives that he's willing to tell backers of the health law that he wants to cut it.

"That was like a victory lap on Fox News," she said. "That was exactly what he went there intending to do."

Critics in Obama's camp charged immediately after the speech that Romney planned to be booed in an effort to charge up Republican voters.

"I believe he included that part of the speech intentionally," Atlanta Mayor Kasim Reed said. "And I think the audience responded appropriately."

Reed, on a conference call organized by the Democratic National Committee after Romney's speech, accused Romney of staging a "political stunt" that was aimed more at Republicans who weren't in the room.

"He wasn't speaking to the NAACP audience at all," Reed said. "To his base it will make him look strong, but he never stands up to anybody else."

Philadelphia Mayor Michael Nutter added that "black folks are not going to sit there and listen to some of that nonsense" and said that the episode was comparable to the optics of a video showing Romney speaking to black schoolchildren in Philadelphia.

Read more: http://abcnews.go.com/Politics/OTUS/romney-says-he-expected-to-be-booed-at-naacp/story?id=16753886 

COURAGE

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Whistleblower: Boeing Put Classified Information at Risk

https://www.documentcloud.org/documents/205667-dod-oig-civilian-reprisal-investigations-report.html

"Pentagon Watchdog Backs Up Retaliation Claim"

Recently reported by Project on Government Oversight--

A previously nonpublic Defense Department (DoD) Inspector General (IG)report obtained by POGO raises questions about the government's effectiveness in overseeing the security of classified material in the hands of defense contractors.

The DoD IG report centers on one government agent's quest to find the truth about the storage of classified information at Boeing—the second largest defense contractor—and the retaliation that the agent said he endured as a result. The DoD IG report raises questions about how well the Boeing Company is protecting classified weapons design information in its possession.

The vast outsourcing of many of the nation’s most classified defense projects to government contractors creates unique problems because the information is out of the government’s hands. Enter the Defense Security Service, the little-known U.S. agency tasked with ensuring that contractors—for the military services and dozens of federal agencies—properly safeguard classified information in their possession.

The threat to these assets is very real. Foreign attempts to illegally gain access to sensitive or classified information more than doubled from fiscal years 2009 to 2010, according to the latest annual counterintelligence trend analysis by the Defense Security Service.

As attempted incidents of cyber mayhem are on the rise, the role of the Defense Security Service as the key overseer of the nation’s most delicate security secrets is more important than ever. However, the Service has for years come under fire from congressional investigators and the Pentagon’s Inspector General for its lackluster oversight of contractors.

In 2002, Robert Conley, an industrial security specialist with the Defense Security Service, began to investigate what he believed was an illegal “classified technology library” in Boeing’s secretive Phantom Works division that was in alleged violation of regulations on protection of classified information.

Conley alleged to the DoD IG that after he continued to raise concerns about the problems he found at Boeing, his supervisors retaliated against him and publicly humiliated him. The April 2011 report by the DoD IG Civilian Reprisal Investigations unit substantiated Conley’s allegation that Defense Security Service management reprised against him. One act of reprisal, for example, “was significant because it resulted in loss of prestige, loss of opportunity for promotion, and loss of complex and challenging work.” The report also determined that “Mr. Conley's belief, in 2002, that Boeing was illegally transferring classified technology was reasonable.”

As outlined in the IG report, Conley’s investigation of Boeing began when he was wrapping up a subcontract the firm had with General Dynamics on a Marine Corps vehicle program involving “low-observable and counter-low-observable advanced technology”; in other words, highly classified ways of avoiding enemy detection or detecting potentially stealthy enemies. The program was a special access program. Special access programs are among the most highly secretive programs in the federal government and require special security measures.

Read more: http://getinvolved.pogo.org/site/PageNavigator/dss_boeing_whistleblower.html

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