BBG Watch Commentary

Investigation

The Department of State Office of Inspector General (OIG) has found that International Broadcasting Bureau (IBB) officials working for the federal agency, Broadcasting Board of Governors (BBG), allegedly have committed massive violations of the Anti-Deficiency Act (ADA).

The OIG Office of Audits conducted an audit of IBB’s acquisition functions. It found that these officials have entered into hundreds of personal services contracts allegedly without statutory authority and that contractors regularly worked without valid contracts.

An unidentified IBB official apparently admitted to OIG investigators that IBB awarded approximately 660 services contracts that may have been personal in nature even though the statue limits IBB’s authority to 60 personal services contracts.

Others believe that the number of personal services contracts entered into by IBB is much higher than the 660 figure. IBB many have been employing over the years thousands of such full-time contract-employees who are poorly paid and denied benefits and protections of full-time employment, including IRS and other tax deductions. Some of these contract-employees have been in this status for many years with full knowledge of IBB officials.

Federal Acquisition Regulation (FAR) 37.104(b) prohibits the use of personal services contracts if a federal agency does not have an explicit statutory authority, which IBB did not have above the 60 contracts limit.

OIG has found that among some 660 contracts identified as possibly done for personal services, a little over 40 were classified as personal services contracts while more than 600 may have been inappropriately described as non-personal services contracts or not defined by IBB officials in any way. OIG alleges that many of these inappropriately described or non-defined IBB contracts may be identical to those described as personal services contracts.

OIG concluded that the handling of personal services contracts by IBB officials is a violation of the Anti-Deficiency Law, which specifically prohibits employing personal services above the number authorized by law.

OIG informed former IBB Director Richard M Lobo of these findings in late September 2013 and told him that immediate action was needed to address these issues. OIG gave IBB director 10 days to provide a response and also informed of its findings members of the House Committee on Foreign Affairs, Committee Chairman Edward R. Royce and Ranking Member Eliot L. Engel.

BBG Watch does not know how Mr. Lobo responded to these allegations. He retired at the end of November 2013. In December 2013, BBG’s new chairman, Jeff Shell, announced personnel and management changes at the IBB. The BBG Board is looking for a CEO to run the agency.

Former BBG member, former U.S. Ambassador to Poland and former mayor of Knoxville Victor Ashe, who had warned the previous BBG board repeatedly about irregularities in IBB’s management and operations, said that “weak and inadequate legal advice led the past BBG board to ignore the contractor-employee issue and its illegality. Now the chickens are coming home to roost,” Ashe added

“It is sad and has consequences. The real challenge is for the current board to take steps to correct it ASAP,” Victor Ashe concluded.

Ashe was the only lawyer on the previous BBG board. His frequent calls for transparency and accountability by the agency’s senior management ranks made him a highly unpopular figure among IBB officials.

He is, however, widely admired by BBG employees and contractors for exposing official abuses long before OIG decided to launch a second investigation in recent months.

An earlier, much criticized OIG probe, failed to find any wrongdoing by IBB and instead condemned three BBG members, including Ashe, for being too aggressive in asking questions at board meetings and not supporting the board’s previous decisions, which these BBG members had found deficient because of bad advice from IBB officials.

In addition to alleged violations of the ADA, the second OIG investigation also discovered other significant alleged FAR noncompliance by IBB officials.

BBG Watch will continue its investigative reporting, which is believed to have helped launch the second OIG probe after we had criticized the first one for failing to focus on reported irregularities and abuses by IBB’s senior staff.

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