What happens when the Treasury IG disputes findings of a VA IG report?

What happens when two inspectors general consider the same case and come up with two different conclusions?

That question may be answered Monday, during an evening hearing of the House Committee on Veterans Affairs.

At issue is a March 11 statement that Treasury Department IG Eric Thorson sent to Committee Chairman Jeff Miller (R-Fla.) that finds fault with the conclusions of a Dec. 8, 2014, report issued by Maureen Regan of the Veterans Affairs Department’s Office of Inspector General.

Regan’s report was based on an investigation into alleged improprieties around the awarding by the Technical Acquisition Center of contracts to Tridec Technologies, a Service Disabled Veteran Owned Small Business (SDVOSB). The contracts were for the development of a Virtual Office of Acquisition (VOA).

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According to Regan’s report, the investigation substantiated claims that Iris Cooper, the former executive director of VA’s Office of Acquisition Operations, had preselected Tridec for the VOA project. In addition, the investigation found that the initial and subsequent contracts were awarded to Tridec as sole-source on the direction of Cooper and Wendy McCutcheon, former associate executive director of VA’s Office of Acquisition Operations.

“We found that this occurred because of Ms. Cooper’s personal relationship with Mr. David London, who was a part owner of Tridec, and Mr. Robert S. Fritschie, the son of Tridec owner, Mr. Robert A. Fritschie,” Regan wrote, in her report. “We also substantiated that Ms. Cooper, in her role as the Competition Advocate, allowed the development of VOA to be broken down separately to ensure the contract could be awarded to Tridec under the sole- source provisions of Title 38 U.S.C. Section 8127, when in fact, the requirements for each contract were for the continuing development of the VOA application. In addition, we found that both Ms. Cooper and Ms. McCutcheon engaged in a lack of candor when interviewed by OIG Special Agents.”

The VA also said that Cooper, in her role as the competition advocate, had made sure that the contract, which is now valued at more that $15 million, was split into $5 million units so that it could be awarded sole-source to Tridec.

Cooper left the VA in January 2013 and has been Treasury’s senior procurement executive since January 2014.

Miller referred the matter on Dec. 19, 2014, to Thorson, so that his office could investigate the allegations against Cooper.

“Chairman Miller expressed concern with the Review’s allegations of contract steering based on personal relationships, work division done to avoid competition requirements, and the … ‘lack of candor’ in dealing with VA OIG investigators,” Thorson wrote, in his March 11 statement. “This referral specifically asked the Treasury OIG ‘take action as necessary to protect and maintain the integrity of the Department of the Treasury.'”

Miller also asked the Treasury IG to determine if Cooper had fully disclosed and been truthful when she applied for her current position at Treasury.

“In response to this request, and a similar request from the Department of the Treasury, my office has reviewed the VA OIG Review,” Thorson wrote. ” We found its conclusions unsupported, and sought supporting documentation from the VA OIG. Our efforts, and those of the Department of the Treasury, to obtain the evidence on which the Review was based, were denied by officials of the VA OIG as non-compliant with requirements of the Privacy Act and other laws. We respectfully disagree with VA OIG’s legal assertions on this point.”

Thorson’s office interviewed Treasury officials involved in Cooper’s hiring.

“We could not substantiate that Ms. Cooper knowingly or willfully engaged in falsehood regarding her application for employment to the Department of the Treasury,” he wrote.

To ascertain the validity of the VA OIG’s findings, Thorson’s office interviewed witnesses knowledgeable of the Tridec contract and Cooper’s relationship to it.

“The evidence we have found shows that Ms. Cooper’s actions with respect to the granting and administration of the VOA contract to Tridec did not violate applicable law or regulation, and were consistent with VA practices as understood and conducted by VA procurement officials,” Thorson wrote. “Further, each of the witnesses stated that another VA procurement official displayed enmity toward Ms. Cooper and openly boasted of his ability to influence the activities of the VA OIG, generally, and specifically with respect to Ms. Cooper.”

The Treasury IG interviewed one current and four former VA employees. Those five individuals alleged that Jan Frye, the deputy assistant secretary at VA’s Office of Acquisition and Logistics, “had threatened to have the VA OIG investigate people with whom he had disagreed.”

The witnesses also said that one of the offices Frye ran within VA’s procurement function was in charge of a revolving fund that funded several VA OIG staff positions, and that he could make the VA OIG “investigate anyone he wanted, a statement that the witnesses all took as constituting a threat,” Thorson wrote.

Four of the witnesses said Frye claimed he had “special influence” over Regan, who wrote the VA OIG report about Cooper and the Tridec contract.

“One witness … specifically stated that Mr. Frye claimed to have insisted that the VA OIG issue this Review when there was internal debate about doing so,” Thorson wrote. “All the witnesses stated that Mr. Frye sought to retaliate against Ms. Cooper after Ms. Cooper testified against Mr. Frye in an Administrative Investigation Board for creating a hostile work environment. [One witness, who is a current VA employee] specifically explained that Mr. Frye had told her he was determined to get the Review to Treasury so that Ms. Cooper would lose her job.”

Thorson concluded his statement by saying that his investigation revealed no misconduct in Cooper’s work with VA or a lack of candor in her responses to the VA OIG, or in her responses to Treasury officials during the hiring process for her current position.

The House Committee on Veterans’ Affairs is hosting a hearing on Monday, at 7:30 p.m., entitled The Power of Legislative Inquiry — Improving the VA by Improving Transparency. Scheduled to appear before the committee are Regan; Leigh A. Bradley, VA general counsel; Professor Charles Tiefer, Professor of Law, University of Baltimore School of Law; and Michael D. Bopp, partner at Gibson, Dunn & Crutcher LLP.

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