NASA Wallops Purchasing Official: Vacation-House Use and Personal Spending

The NASA Wallops gratuities and personal spending case put vacation-house use and personal items inside a government purchasing office. The Justice Department’s December 11, 2018 announcement of the guilty plea describes two offenses: accepting vacation-house use as a gratuity and stealing government contract funds for personal purchases. If you know the purchasing decisions or the supplier’s side of those transactions, we can work with you to connect the official’s private benefit to the public business.

A Vacation House Belongs in the Purchasing Story

According to the announcement’s account of court documents, an employee of a Range Operations Contract subcontractor provided free use of a vacation house. In exchange, the official facilitated selection of that employee’s firm to provide interior design services and office furniture for Wallops. The benefit was the stay, not an envelope of cash. For an insider who knows the purchasing relationship, that changes where the story begins: with who provided the benefit and whose business the official could influence.

For us, the central question in procurement bribery and gratuities is what the official did in connection with the benefit. We examine who supplied it, whose purchasing decisions they stood to gain from and what happened to the government business. The dates and communications give the relationship substance.

We expect public purchasing to serve the public, not the purchasing official’s private enjoyment. The official’s vacation belongs to a different account.

Procurement Authority Runs Through Specific Decisions

Who could approve a purchase is written down. Under the Federal Acquisition Regulation’s authority rules, a contracting officer’s written appointment sets the limits of that authority.

Those limits matter when an insider describes someone as being in charge. We want to understand the actual decision: selecting a supplier, directing a purchase, approving a change or accepting the work. The contract, modifications and written delegations put those decisions beside the authority to make them.

A person in the program office may know who wanted an item purchased. A contractor employee may know who gave the instruction. Someone reviewing payment may see only the invoice and its supporting approval. Those accounts become more useful together because they show how the purchase moved through the offices involved.

What Are the Indicators of Government Procurement Fraud?

A private benefit that lines up with an official’s purchasing decision and the spending that followed gives us a concrete connection to examine. Separately, the announcement describes the official’s use of Range Operations Contract funds for personal gift cards and personalized art. Our assessment then turns to the relationship between the benefit, the purchase and the payment.

The billing evidence connects what was ordered to what was accepted and paid. Treasury’s Invoice Processing Platform spans that chain from purchase order through payment notification. For a personal purchase, the useful comparison is between the item described for approval and the item the recipient actually received.

For a concern about personal spending, we examine how an item was described, who requested it, who received it and which purchase paid for it. For a concern about a benefit supplied to an official, we connect the benefit to that person’s decisions about the supplier. These are the comparisons we make with an insider, using the transaction they know.

An accounts employee may know what the description refers to or why a particular person approved it. Someone responsible for the work may know whether the purchase served that work at all. Their knowledge gives the paperwork a meaning that the amount alone cannot supply.

Approval Can Be Part of the Problem

The person who signs off can be the person who gets around the controls. That is why an approval deserves attention when an insider says the purchase served the approver’s private interests.

The 2019 study Unique Characteristics of Management Override Fraud Cases, published in the Journal of Forensic and Investigative Accounting, compared fraud involving management override with fraud involving a lack of internal controls. Among the cases studied, a stronger anti-fraud environment was associated with a greater relative likelihood of override rather than missing controls. The paper offered this interpretation:

Unique Characteristics of Management Override Fraud Cases, Journal of Forensic and Investigative Accounting, 2019

For our assessment of a purchasing concern, the useful question is what happened at the approval point. An insider may be able to explain who directed an exception, what the approver knew or why the description on a purchase differed from its actual purpose. The study gives us a reason to examine how a control operated, beyond confirming that a signature appears on the form.

A Benefit Can Also Keep a Contract Alive

A separate General Services Administration criminal case shows how an official’s private benefits can influence the continuation of government business. In his guilty plea, a federal official admitted accepting benefits to keep a company’s GSA Schedule contract despite reported zero sales and unpaid fees. The agency inspector general’s account connects the benefit to keeping that contract.

The comparison matters because purchasing influence continues after an award. When we assess a relationship between an official and a supplier, the later decisions deserve attention too. Continuing a contract, approving a purchase or accepting performance can be the decision the supplier cares about.

The Government Purchase Behind a Whistleblower Case

A civil government procurement whistleblower case centers on the false claim for government money and the people responsible for it. The False Claims Act reaches knowingly false claims and false records that matter to those claims.

If your concern involves personal purchases or benefits connected to a contractor, we assess how that conduct affected what the government was asked to pay. The purchase, its description, the approval and the payment give us the facts to examine with you. We connect your knowledge of the transaction to the possible whistleblower case.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. That recovery is the basis for government procurement whistleblower rewards.

You Know Whose Purchase It Was

If you know how a private benefit entered the purchasing relationship or how a personal item reached the government’s bill, speak to one of our Whistleblower Experts about whose purchase it really was. We work with you to build your strongest government procurement whistleblower case, find government procurement whistleblower lawyers with the specific expertise it needs, and stay with you through the whole process.