BBG Watch Commentary

At the Broadcasting Board of Governors (BBG) open meeting last Thursday, September 13, 2012, executive staffers resisted calls from BBG Governors Victor Ashe and Michael Meehan to discuss in public the controversial up-to-50 million dollars audience research contract with the Gallup Organization and to set a specific date for conducting an internal BBG audit of the contract.

Gallup is the target of a whistleblower suit for allegedly overcharging other U.S. government agencies on their contracts, including the State Department. The BBG is not involved in the whistleblower suit, which was joined by the U.S. Department of Justice. Gallup denies any wrongdoing.

It was revealed at the BBG open meeting on September 13 that the DOJ has asked the BBG to conduct its own audit of its recent contract with Gallup.

BBG Governor Victor Ashe was trying to get answers as to when the audit might begin, but he was repeatedly rebuffed by the BBG’s Deputy General Counsel Paul Kollmer-Dorsey who insisted that due to ongoing litigation the Department of Justice might object to a public discussion of the contract at the BBG open meeting. He promised to provide a private briefing for BBG governors.

This video can also be accessed on YouTube: http://www.youtube.com/watch?v=tU-AHTxF5Uo&feature=share&list=UUkNlsH4mT5GBJjJbHR9oNkw

Unofficial transcript of this portion of the BBG meeting:

ASHE: Mr. Chairman, it’s a great report, but there is one item that we’ve discussed that has been in the news that I think we should discuss, mention here. And we did take action on it, and it is the issue involving Gallup. As you know, a whistleblower lawsuit was brought against Gallup alleging fraud. The Department of Justice, for whatever reason, decided to join that lawsuit over billings that they alleged were fraudulent. And since we have a up-to-50 million dollar with Gallup over a five year period I thought it was important that we find out our billings being appropriately handled or mis-appropriately handled. Staff, as I understand, Mr. Kollmer’s legal legals, on his staff, talked to the U.S. Attorney’s office — if I’m mis-stating it, be free to jump in — and they did say that they thought an audit by us of the Gallup contract and billings would be appropriate, as opposed to a decision to simply not use them anymore or whatever. My question is this, and Maryjean Buhler may be someone to answer this. And this was discussed, I think August 18th, 17th, I forget which. In Strategy and Budget. 28th. …that an auditor to do this hasn’t yet been engaged. And I think there is a certain urgency that this audit happens soon so we can put the matter to rest. But any time a well known, internationally known firm such as Gallup, you have the Department of Justice join a whistleblower lawsuit, it does raise red flags and due diligence and fiduciary responsibility would dictate to us — not that we’re holding them guilty because they’re innocent until shown otherwise — but to look into the matter. And I’m concerned that the audit, how quickly is this going to happen and I assume Maryjean you’re the person to tell us.

MARYJEAN BUHLER: I’m going to defer to our legal counsel on this.

KOLLMER-DORSEY: With all due respect to the concerns, and this matter is under like investigation and litigation by the Justice Department and we really should not be engaging in this conversation in the open, in an open meeting, but mostly because it would be purely speculative about what happened, but also because it may be interpreted as, it may not be welcomed by the Department of Justice. So I would, I think that we should just defer, I would recommend strongly to the Board that this conversation just be deferred to a later date and would be happy to brief.

ASHE: That’s very different from what we were told in the committee. We were told by your office that the U.S. Attorney’s office has suggested we do an audit. How does that compromise anything? We do audits on ourselves all the time.

MEEHAN: Understanding that pending legal matter that does not involve the BBG as far as we know, but it is prudent for those of us that were on the committee to be concerned that the money that we do spend on this contract is being spent well, and I thought we had come to an understanding that we could at least audit the contract as it is only five or six months old that we’ve had with Gallup in just this calendar year. And I think that, if I recall correctly from the meeting, that Governor Ashe asked to be sure that our contract was being executed properly. Why shouldn’t we be able to talk about that?

MARYJEAN BUHLER: I think probably Paul’s comment.

ASHE: Can you speak louder, I can’t hear you.

MARYJEAN BUHLER: I think perhaps, Governor, we can give you a discussion or a briefing offline on this. We have had some discussions on this with the Inspector General.

ASHE: We have what?

MARYJEAN BUHLER: We have had some discussions, and I believe the legal office has had some discussions with the Inspector General, but I think this is something that because of litigation, the situation with that, that we discuss offline.

ASHE: So you’re saying if a Congressional committee had a hearing on this we would decline to testify because of litigation. I don’t think you’d do that.

KOLLMER-DORSEY: It’s not. We’re not saying. First of all, it isn’t Congressional committee, but what we’re strongly recommending is that we don’t engage in further discussions about this matter in an open meeting because it’s the subject of a current Department of Justice litigation and investigation and, and the contract that we have with, with Gallup is not subject to any such, ah, ah, is not the subject of, of, of that. But, but, but it, it may be viewed as prejudicial and unwelcome by the Justice Department for us to engage in this conversation in an open meeting, and so I’m strongly recommending to the Board that if it’s interested in this that we could, we could arrange some kind, some briefing outside of the open meeting on this topic.

ASHE: Why didn’t you tell us that at our August 28th meeting?

KOLLMER-DORSEY: My understanding was that the August 28th meeting was in a committee. I wasn’t there. It was in a committee meeting, which wasn’t open to. It was not part of the open meeting. And I, and we can be prepared to provide any level of information.

ASHE: Why can’t you discuss the public documents that are filed in the court that any citizen can go see?

KOLLMER-DORSEY: Well, primarily, because I don’t, I’m not familiar with them, but. I haven’t read them, but even if I, but, but what I’m strongly suggesting and recommending to the Board that we defer this conversation until, until we can brief the governors in a setting.

ASHE: Once we have the briefing, are we embargoed from discussing it or what?

MULHAUPT: I think we should have the briefing and we should proceed after that.

ASHE: Mr. Chairman, with all due respect, this relates to potential fraud — I’m not accusing anyone of anything, but I mean, a serious lawsuit has been filed, red flags have gone up all over town and we have an obligation to make sure that tax dollars are being appropriately spent. I’m not saying this particular Gallup contract with the BBG is or isn’t, but clearly we know there is a question about the one with the State Department, because the Department of Justice, for whoever reason, has decided to join it. And they’re now in litigation. I’m not saying they’re right or they’re wrong, but it sends up signals that if a company is accused by DOJ of misconduct in one area, we who are doing business with the same firm should seek to reassure ourselves that at least the contract with the BBG is above board, being appropriately handled, and we have no reason to change it.

MULHAUPT: And I think we all agree with that.

ASHE: And what are we doing? And we should do it in public and let our constituents.

UNIDENTIFIED VOICE: Has Justice given you any directions on this vis-a-vis BBG?

KOLLMER-DORSEY: Vis-a-vis our contract? No.

ASHE: So we don’t know if Justice objects to our discussion or not. Someone has just said that they might, therefore let’s be quiet.

MULHAUPT: I think that we have intention to undertake due diligence, to insure that we are spending the money appropriately. What I think I hear is that the staff will brief on the way, the methodology that that will happen and when it will happen and all of that. But I don’t think that further conversation, other than agreeing that it’s an important issue, is advancing the ball right here, right now.

ASHE: I want to know, if we do this, when is this briefing going to occur. In the next ten days? And will there be somebody from Justice? I want to hear Justice tell me, Governor Ashe be quiet, don’t discuss this in a public meeting. That would certainly have me look at things differently than someone outside Justice in abundance of caution telling me not to do it.

MULHAUPT: Just to be clear. The BBG is not part of the pending.

ASHE: No.

MULHAUPT: This would be. This is a matter of due diligence, so we all agree we’re going to do it.

MEEHAN: I recommend that at the next Strategy and Budget meeting we have a full briefing about our our auditing of the expenditure of this contract.

KOLLMER-DORSEY: That’s fine. And just to be clear.

ASHE: Can you speak into the mike.

KOLLMER-DORSEY: We’re not part of the Department of Justice litigation and we have, as any agency does, an ongoing oversight and responsibility with regard to our procurement activities.

MEEHAN: We would like a briefing on that.

KOLLMER-DORSEY: We have no problem providing such a briefing. It’s just that this is not an appropriate forum, in my opinion.

ASHE: Mr. Chairman, this is a huge contract, and I don’t know if anything is wrong with it, but I think, given what’s happened, we should have public reassurance that everything. Under Governor Meehan’s leadership, I have great confidence that Strategy ad Budget would do this properly, but all that I’m asking, Mr. Kollmer, is that at this meeting — unless they disincline — that you get someone from Justice or the U.S. Attorney’s office. Someone had to have talked to the U.S. Attorney’s office because they in fact said the BBG should do an audit. They didn’t make that up. They din’t fabricate it. And so, whoever said it, may be ought to come to Strategy and Budget and tell us why. And then we need to know — because what I’ve heard is, Maryjean, is that we’re having trouble getting the auditor in our timeline, and I don’t want us, if we have to do an audit, that it’s done five months from now. And I would suggest in the meantime that we look carefully at the business — you know, we’re not required to do one study after another like Gallup — that we need to look carefully to make sure whatever funds we do spend are spent appropriately.

MARYJEAN BUHLER: I’m not sure where you got the information about the issues with an auditor, I don’t know where that came from. But I agree that we do need to make sure that we are spending our funds appropriately.

MULHAUPT: I think we all agreed.

ASHE: But when can we get an answer as to when the audit will be done. if the U.S. Attorney said it. I don’t think there is any disagreement that we’re going do the audit. I want to know when we’re going do an audit. Will it be before Thanksgiving, will it be next Valentine’s Day? When?

MARYJEAN BUHLER: May we get back to you?

ASHE: What?

MARYJEAN BUHLER: May we get back to you on that while we finish some of the due diligence?

ASHE: You want to get back to me?

MARYJEAN BUHLER: Yes, Sir.

ASHE: In my lifetime?

MARYJEAN BUHLER: Oh, absolutely.

ASHE: OK, I mean, I think by the next Strategy meeting is when you ought to get back.

MARYJEAN BUHLER: I think that’s appropriate.

ASHE: OK, good. I think that the fact that we’ve had this discussion, even though it my have been one-sided, is helpful because I think people who follow us need to know we’re onto this. Not that we’ve taken sides, but that we want to follow the facts. And, you know, as they say in a divorce suit, follow the money.

UNIDENTIFIED VOICE: I thought it was only the lawyers who were happy.

ASHE: Well, they’re the ones who make money.

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