Homies Not Always Kind to the Hood

Jenna Greene

Corporate Counsel

08-01-2012

A report released in June by the U.S. Department of Homeland Security's acting inspector general highlights major problems across the agency, from "significant deficiencies" in financial reporting to employees taking bribes for smuggling drugs or approving citizenship applications.

In the first six months of the fiscal year, from October through March, DHS's Office of Inspector General opened 647 new investigations and referred 523 matters for prosecution. Investigations by the 676-person office resulted in 149 arrests, 90 indictments, and 94 convictions. These led to the recovery of $40.7 million in disallowed costs plus $14.5 million in fines.

It's been nearly 10 years since President George W. Bush signed legislation creating the 200,000-person agency, which includes the Transportation Security Administration, U.S. Immigrations and Customs Enforcement, U.S. Customs and Border Protection, the Federal Emergency Management Agency, the U.S. Secret Service, and the U.S. Coast Guard.

Acting IG Charles Edwards made clear in his semiannual report to Congress that the cobbled-together agency still has a long way to go.

"The department continues to move beyond operating as an organization in transition to a department diligently working to protect our borders and critical infrastructure," wrote Edwards, who has served as acting IG since Richard Skinner retired in early 2011. "However, while much progress has been made, the department still has much to do to establish a cohesive, efficient, and effective organization."

According to the report, independent auditor KPMG found nine significant deficiencies in the agency's internal controls, five of them material. KPMG described the agency's "inability to represent that property, plant and equipment, and environmental liabilities account balances were correct. DHS was unable to provide sufficient evidence to support these balances in the financial statements."

Investigators from the IG's office uncovered numerous instances where FEMA grant recipients failed to properly account for federal funds. For example, a school district in California failed to account for $13 million in spending, while a New Orleans entity, which was awarded $13 million for a new school, "has not started and does not plan to start any work to replace the damaged school." A Mississippi school district got $440,000 in insurance recovery, but neglected to knock that amount off its project cost, and also failed to document another $632,000 in spending.

There were also numerous instances of employee wrongdoing. For example, an airport passenger screener was found to "routinely" use social media Web sites to receive and distribute child pornography. The man "was initially identified as an employee through a picture of him wearing a TSA uniform that he posted on a social media Web site," the IG report stated. He was sentenced to 11 years in prison.

Two other TSA employees were caught stealing laptop computers from passengers' luggage. Another was sentenced to six months in jail for committing a hate crime at the Minneapolis airport, where he chased and threatened to kill a young Somali man.

A supervisory immigration services officer and his son, a construction worker, were caught charging immigrants as much as $6,000 for expedited application processing and other benefits, including U.S. citizenship. After the payments were made, the officer "would direct his unwitting subordinates to favorably adjudicate the applications," according to the IG report. He was sentenced to five years in jail; his son got four.

During the investigation, IG officials found that another employee in the same office was running an entirely separate scheme accepting money from illegal immigrants in exchange for immigration benefits. He pled guilty and was awaiting sentencing.

Then there was the Customs and Border Protection officer who helped a smuggler bring undocumented aliens into the United States—and had the smuggler testify on his behalf during his divorce trial in 2006. The officer admitted that in addition to working with the smuggler, he let in 15 illegal immigrants on his own because of what he termed his "soft spot for humanitarian needs." His soft spot was tenderized by a $5,000 payment to facilitate the crossing. He was sentenced to 27 months behind bars.

Another CPB officer was charged with letting vehicles loaded with 1,700 pounds of marijuana through his inspection lane in return for $10,000 in bribes. He was convicted of providing false statements and accepting bribes, and was sentenced to 24 months of parole.

Not all of the wrongdoing was as serious. One Immigration and Customs Enforcement supervisory special agent was caught stealing government property like printer cartridges and flashlights, which he sold on eBay.

But that doesn't mean that the big probes are finished. Edwards made that clear in recent testimony before Congress. Currently, Edwards testified, his office is investigating the prostitution scandal involving Secret Service agents in Cartagena, Colombia. So you may want to stay tuned.

A versions of this story appeared in The National Law Journal, a sibling publication of Corporate Counsel.