IG reports detail abuses in hiring, travel, bonuses at VA technology office

Allegations revolve around "inappropriate personal relationship" between former CIO and another agency official.

Former high-ranking information technology officials at the Veterans Affairs Department gave preferential treatment to certain contractors, engaged in nepotism in hiring and, in one case, took advantage of a relationship with a supervisor for personal gain, according to a new report from the department's inspector general.

Two reports published Thursday indicate VA's former Assistant Secretary for Information and Technology, Robert Howard, allowed employees to abuse their authority for the benefit of friends and family. The first report says Howard engaged in an "inappropriate personal relationship" with Katherine Adair Martinez, former deputy assistant secretary for information protection and risk management in VA's Office of Information and Technology from April 2007 until the spring of 2009.

"It is deeply disappointing that any governmental official would abuse authority entrusted to them by the public," said Rep. Stephen Buyer, R-Ind., the ranking member on the House Veterans Affairs Committee. "But it is especially disturbing when abuse of authority occurs at the agency responsible for the care and well-being of our nation's veterans. I expect that swift, appropriate administrative action will be taken against the employees allegedly involved in these incidents."

A VA spokesman issued the following statement about the reports: "VA is aware of the findings detailed in the OIG reports. VA expects our employees to set the highest levels of personal and professional conduct; therefore, we are extremely concerned by the descriptions of alleged improper conduct by VA staff. The department is aggressively pursuing a thorough review of the situation and will continue to work with the appropriate authorities. VA does not condone misconduct by its employees and will take the appropriate corrective action for those who violate VA policy."

Howard left his position at VA in January and has been replaced as chief information officer by Roger Baker. When reached for comment today, Howard declined to discuss the reports or their findings. In written comments, Baker's office concurred with the IG's recommendations for action against the violators.

Martinez was assigned to Howard's organization shortly after a major data breach in 2006 involving the theft of a VA laptop containing the records of more than 26 million veterans. According to the report, the two began an "inappropriate personal relationship" in April 2007 that lasted until a few months after Howard left VA in January of this year. Both Howard and Martinez are married to other people, but a former VA employee who spoke on condition of anonymity said it was well-known within the department that the two were linked romantically.

In July 2008, Martinez moved to Bay Pines, Fla., after securing Howard's approval to work remotely. In her first nine months after moving to Florida, Martinez was responsible for $37,000 in expenses related to trips to Washington on official business. Howard denied to investigators that Martinez's frequent travel was a result of their relationship, but he admitted they continued their relationship during her visits.

"We concluded that Ms. Martinez misused her position when she took unfair advantage of an inappropriate personal relationship with Mr. Howard to gain his approval to relocate her to Florida," the report states.

The second report alleged that Howard's former executive assistant, Jennifer Duncan, violated federal law and engaged in nepotism by hiring relatives and friends into positions at VA. Duncan, the report concluded, also approved more than $140,000 in VA funds to pay for those friends and relatives to obtain graduate degrees at The George Washington University and other institutions.

The report said Howard and his senior managers, including Duncan, were fiscally irresponsible in handing out more than $24 million in cash awards and retention bonuses to VA employees during a two-year period, despite working under a budget deficit. The former VA employee said Howard gave generous retention bonuses to top technical people in order to keep them from retiring. And Duncan "acted as if she was given a blank checkbook to write unlimited monetary awards," the report stated.

"In addition to the improperly administered awards, we found the frequent and large dollar amount awards given to employees were unusual and often absurd," investigators reported. "A current and a former deputy assistant secretary both told us that they were 'stunned' by the total amount of appropriated funds that [the Office of Information and Technology] spent on awards/bonuses.... Worse, some employees were given cash awards for services that were supposedly provided before the employees started working at VA."

The report concluded that Martinez abused her authority to obtain employment for Laura Nash, first at Engineering Systems Solutions, a VA contractor, and later in the department itself. Nash and Martinez became friends while the latter was chief information officer of the Veterans Benefits Administration in 2000 through their mutual involvement in a nonprofit organization, Women in Technology. Nash was laid off from her private sector job in May 2006, at which point Martinez was working to award a contract to address issues raised by the stolen laptop incident.

According to the report, while working on the contract, Martinez shared proprietary procurement information with a longtime friend of her husband's, identified only as "John Doe." Martinez told him of VA's plan to issue a request for a proposal and allowed him to serve as an intermediary between herself and the executives of ESS. He was later hired as a consultant by ESS in September 2006. Martinez also told an ESS vice president several times to "look at" the prospect of hiring Nash and stressed that she had the "right credentials."

"While there may not have been an expressed quid pro quo (ESS will get a VA contract if you hire my friend), Ms. Martinez clearly and improperly pressured ESS to hire Ms. Nash while Ms. Martinez was officially involved in setting up a VA contract," the report stated. "We found it problematic that Ms. Martinez also shared VA proprietary information with a longtime friend of her husband's, who was not employed by VA or ESS, and allowed him to act as an emissary for a VA procurement. This gave him an opportunity to exploit the situation for his own personal gain and possible employment at ESS, and it also gave ESS a significant advantage in obtaining a VA contract."

Other employees, including a human resources consultant, told investigators that while Nash was hired by ESS, she was treated increasingly like an employee of VA by Martinez, who often assigned her tasks unrelated to the security contract. In the summer of 2007, Martinez attempted to hire Nash as her executive assistant, but was prevented by a hiring process that gives preference to internal agency candidates and veterans.

Martinez reissued the job request twice before arranging for Nash to be hired as a supervisory IT specialist in September 2007. An e-mail sent on Sept. 9, 2007, by Associate Deputy Assistant Secretary for Information Protection and Risk Management Kathryn McGinnis to Martinez acknowledged that Nash was hired for the IT position with the intent of shifting her to the executive assistant role within six months. The report also stated that Martinez provided justification for bringing Nash into government at an annual salary more than $33,000 above what someone in her position ordinarily would earn.

"The HR consultant ... said that she was very impressed with the vast and highly technical experience of many of the applicants and that Ms. Nash was not the best qualified candidate," the IG report noted. "Ms. Nash told us that she recalled taking only one computer class in college and that she had limited technical knowledge and experience in the IT areas required for the position."

Neither Martinez nor Nash could be reached for comment, but in a February 2008 article for FedTech Magazine, both discussed what they enjoyed about working in government.

"I'm a government brat," Martinez told FedTech, noting that her father was in the Coast Guard and she grew up in and around the nation's capital. "I care about Washington. I just care about government, and I care about IT. I believe in public service."

"You can only do so much advising and assisting," Nash said. "If you want to have an impact and make a difference, you have to be a government employee."

In addition to Howard, Martinez, Nash and Duncan, numerous other VA employees are described in the reports, but their names have been redacted. Several of the people are relatives or friends of Duncan, including one who appears to be her son. This person was hired as a summer intern at VA's Office of Security and Law Enforcement in 2006 and 2007. On August 17, 2007, he resigned from the office.

Four days later, Duncan sent three e-mails emphasizing his education and credentials for a full-time position. On Sept. 16, 2007, he was appointed as a part-time management analyst in Washington, with his designation changed to full-time two weeks later, right before he returned to Charleston, S.C., to complete his last semester of college.

Records from that period show the person was assigned to Washington, but granted leave without pay status for four hours each day. He graduated with a bachelor's of science on Dec. 15 and returned to full-time duty on Dec. 21.

"It was not clear that [name redacted] provided VA any legitimate services prior to Dec. 21, since he was a brand new OI&T employee working 500 miles from his supervisor while at the same time he was completing his undergraduate studies in a field completely unrelated to OI&T," the report stated.