Believe in the Fraud

February 3-4, 2010 -- Obama fails to fill government fraud oversight position at White House

President Obama has failed to fill the vacant White House Special Counsel position even though there is a backlog of ethics complaints from federal government employees who have brought whistleblower cases before the Office of Special Counsel (OSC), which was greatly tarnished by President George W. Bush's Special Counsel Scott Bloch. Bloch, who was accused of scrubbing sensitive emails from his office's computers in 2007 by using the outside services of "Geeks on Call" instead of government technical personnel, was subsequently investigated by the FBI for obstruction of justice and was fired on October 23, 2008. The position has been vacant ever since Bloch's sacking.

Since the passage of the Civil Service Reform Act (CSRA) in 1978, the OSC has received 50,000 ethics violations from 25,000 government personnel. However, the OSC has only taken corrective action on less than 200 cases since the act's passage.

David Nolan, the legal director of the Federal Ethics Center, who held an OSC staff position in the Reagan administration, would like to see Obama name a new Special Counsel dedicated to enforcing the CSRA and replace the existing Personnel Security Review Boards by a new oversight mechanism to review the revocation of security clearances in retaliation for whistleblower action. Many of WMR's sources over the last several years have included employees of the National Security Agency, CIA, FBI, and other intelligence agencies who saw their security clearances revoked after the brought attention to ethics and security violations within their agencies.

In addition, Nolan points to a number of adverse actions taken against federal employees, particularly African-Americans, because of racist actions taken by their supervisors. In one egregious case, Nolan points out that the Deputy Commander of the U.S. Army's Intelligence and Security Command (INSCOM) at Fort Belvoir, Virginia, waxed nostalgic about his grandfather's membership in the Ku Klux Klan at a speech in celebration of Black History Month.

Nolan has been recommended for the Special Counsel position by former Minneapolis FBI special agent and congressional candidate Colleen Rowley and Joe Carson, the Chair of the OSC Watch Steering Committee.

The case of Defense Contract Management Agency (DCMA) engineer Kenneth Pedeleose is an example of the type of harassment faced by public servants who expose fraud, waste, and abuse, especially in the government contracting arena. In a letter to Nolan, Pendeleose states that in 2005, he was the prime target of a "major and well organized plot against DoD [Department of Defense] whistleblowers that I traced to the highest levels of the Pentagon and DoD Inspector General's [DoD IG] office. This included deliberate and well organized attempts to suppress, silence, or otherwise remove whistleblowers from Federal service."

Pendeleose cites the case of his Commanding Officer, Colonel Nicole Plourde, the head of the DCMA office at the Lockheed Martin manufacturing facility in Marietta, Georgia. Pendeleose had found significant safety defects on the Lockheed C-130 transport plane and substantial cost overruns, totaling over a billion dollars, by Lockheed Martin on the C-130 and C-5 aircraft.

Pendeleose claims that an internal network of DOD IG officials conspired behind the scenes with Plourde to retaliate against and intimidate Pendeleose and his DCMA colleagues who discovered malfeasance by Lockheed Martin and Pentagon officials. The Merit System Protection Board (MPSB) later found that Pendeleose was wrongfully suspended by Plourde for a 30-day period after his case was closed without an investigation by the White House OSC. The Office of Personnel Management appealed the case to the Federal Court of Appeals in Washington, DC, which ruled in DCMA's favor. Pendeleose's case in now docketed at the U.S. Supreme Court. Pendeleose has written that the Lockheed Martin and Air Force contract corruption case may be one of the biggest corruption scandals ever at Lockheed Martin.


The adverse actions taken against Pendeleose and hundreds of other government civil servants flies in the face of the Obama presidential campaign's promises during the presidential campaign, which stated: "Often the best source of information about waste, fraud, and abuse in government is an existing government employee committed to public integrity and willing to speak out. Such acts of courage and patriotism, which can sometimes save lives and often save taxpayer dollars, should be encouraged rather than stifled. We need to empower federal employees as watchdogs of wrongdoing and partners in performance. Barack Obama will strengthen whistleblower laws to protect federal workers who expose waste, fraud, and abuse of authority in government. Obama will ensure that federal agencies expedite the process for reviewing whistleblower claims and whistleblowers have full access to courts and due process." So far, Obama has done nothing to fulfill his campaign promise to protect federal public servants who bring attention to fraud, waste, and abuse. Obama's failure to name a qualified and respected Special Counsel points to his non-commitment to protect the interests of federal whistleblowers.

There are countless other whistleblower retaliation cases pending at other federal departments and agencies, including the Departments of Energy, Justice, Defense, Commerce, National Security Agency, and FBI, but Obama's decision to maintain a vacancy at the top OSC job has sent a message to whistleblowers and potential whistleblowers across the federal government that as far as government fraud, waste, and abuse are concerned, it is "business as usual" in the Obama administration.