Friday, June 28, 2019

Why Do They Let the Fox Guard the Hen-house?

The Office of Inspector General (OIG) located withing each major agency, is responsible for protecting programs administered by their respective agencies. Their primary mission is to prevent waste, fraud, abuse, and mismanagement by employees and contractors. OIG offices conduct audits and investigations to identify internal and external problems, recover funds and tax dollars and to prevent fraud.

Eddie Saffarinia was an Assistant Inspector General for HUD (the U.S. Department of Housing and Urban Development) from February 2012 to September 2017 where for a time he was the Assistant OIG for Information Technology and later served as the Assistant OIG for Management and Technology. But he also served as HUD-OIG's Head of Contracting Activity which meant that he was responsible for awarding contracts. That would be an obvious internal control weakness and one that is surprising an OIG organization would allow - Mr. Saffarinia was responsible for overseeing himself, his own work - overseeing the contracts that he participated in awarding - ensuring that there was no fraud, waste or abuse going on in the OIG's contracting activities he was involved in.

In his position as head of contracting and as a senior manager supervising HUD-OIG procurements, Mr. Saffarinia oversaw procurement review and approval processes, had access to contractor proposal information and source selection information, and participated personally and substantially in procurements. Therefore, Mr. Saffarinia had a legal duty under government regulations to disclose actual and potential conflicts of interest and to not solicit and accept anything of monetary value from (i) anyone who is seeking to obtain government business, (ii) conducts activities that are regulated by the OIG and (iii) has interest that may be substantially affected by the performance or nonperformance of his official duties.

You can probably guess where this is going. In a 19 page indictment filed int he U.S. District Court for the District of Columbia yesterday, Mr. Saffarinia has been charged with all kinds of financial shenanigans - exchanging proprietary contractor and source selection information for money and directing prime contractors to utilize specific subcontractors and hire specific individuals in exchange for money. The various schemes involved Mr. Saffarinia and two other individuals who emigrated from the same country, went to college together and socialized with each other on a regular basis.

Well, as the Justice Department likes to point out, these indictments are merely allegations at this point. Defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. Based on the evidence presented in the indictment (bank records, emails and other documents), the Government has a seemingly strong case.

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