Interior IG Alleges Steering of Contract
"Washington Watchdogs," a periodic feature of the Post's Investigations blog, looks at the findings of the federal government's official investigators.
A high-ranking official with a U.S. Department of Interior program tasked with improving the management of Indian funds held in trust steered a contract to an accounting firm where a close friend is a partner, according to a report released today by the department's inspector general.
The report, while not directly related to an ongoing legal battle between Indian groups and Interior over the management of billions of dollars in Native American trust funds, is another indication of problems with the department's oversight of Indian affairs.
In today's report, the inspector general accuses 41-year-old Delano "Jeff" Lords, a special deputy trustee with the Office of Special Trustee for American Indians in Albuquerque, N.M., of pressuring members of a three-person team in 2005 to give a valuable risk-management contract to a friend, Brian A. Lamey, and his accounting firm, Chavarria, Dunne & Lamey LLC.
Despite what some contractors called a superior and cheaper offer by another company, the Albuquerque accounting firm won the $987,000 contract, which was modified 14 times over nearly a two-year period and ultimately increased to $2.4 million.
Lords denied to investigators that he had directed work to Lamey, saying that if he had shown favoritism, it was because of the firm's "ability to complete the work."
The inspector general's report said that an unnamed contractor assigned to evaluate the bids told investigators that "it was clear to him that Lords was telling him to recommend CD&L for the contract" and that "Lords ultimately made the decision to select CD&L by himself," despite objections from the evaluation team.
Investigators also found that Lamey helped write and edit a part of a contract with Margaret Williams, another friend and deputy special trustee in charge of Indian affairs. Two documents, which were discovered through a subpoena of the accounting firm's records, showed that Williams "appeared to have copied verbatim" text from the accounting firm into the contract.
Williams, who met Lamey several times at golfing events and local taverns, denied to investigators "knowingly or intentionally" doing anything wrong by adding the firm's text into the contract.
The inspector general forwarded the allegations against Lords and Williams to federal prosecutors, who declined to file charges.
Investigators noted that Lords stayed at Lamey's home after breaking up with his girlfriend in 2004, storing clothes and a fish aquarium there. Such "gifts" from third-party contractors who do business with the federal government are required to be disclosed by law.
Special Trustee Ross O. Swimmer said in a statement that he would be examining the report "to determine the appropriate course of action." Representatives of Chavarria, Dunne & Lamey's parent company, Milwaukee-based Clifton Gunderson, also said they are evaluating the report.
Suspicions were initially raised, department investigators say, when John Berrey, chairman of the Quapaw Tribe of Oklahoma, told Lords' supervisors that he asked him to keep the information about the pair's short-term living arrangements in 2004 confidential. "They obviously didn't understand what the best business practices were," Berrey said in an interview with The Post today.
Today's report comes two years after a previous investigation of the Special Trustee office by the inspector general. That May 2006 report found numerous prohibited contacts between the office and the contract accountants, including trips to the Phoenix Open, a pricey PGA Tour event; a two-week trip to Bureau of Indian Affairs offices in the Northwest; frequent food runs to Outback Steakhouse and Dunkin' Donuts; a New Year's Eve party at Seagull Street, a now-defunct expensive seafood restaurant in Albuquerque; and $150-per-round golf outings in Spokane, Wash., and Coeur d'Alene, Idaho.
Investigators also found seven no-bid contracts and one interagency agreement that were awarded to Lamey's firm, totaling $77 million.
The 2006 report recommended Lords; his brother, special deputy trustee Douglas A. Lords; and principal deputy trustee Donna M. Erwin for internal discipline. The trio were reprimanded, ordered to undergo ethics training and forced to give up year-end bonuses.
"It appears that no amount of ethics training will bring about lessons learned when it comes to the relationship of [Office of Special Trustee] officials to this particular contractor," wrote inspector general, Earl B. Devaney, in a June 27 letter to Interior Secretary Dirk Kempthorne.
By Derek Kravitz |
July 10, 2008; 7:56 PM ET
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