Democratic congressman pressured VA to help politically connected contractor
Veterans Affairs official felt Virginia Democrat’s lobbying was out of line
Rep. James P. Moran pressured the Department of Veterans Affairs to overrule one of its own senior procurement executives in 2012 and reinstate a policy that benefited a well-connected contractor, according to government records that show a VA official thought the congressman was stepping out of bounds.
Jan Frye, deputy at the VA's office of acquisitions and logistics, imposed a moratorium on reverse-auction contracts after he received a number of complaints about FedBid, a reverse-auction company with deep ties to major Washington financiers and politicians.
FedBid's president vowed to fight, and days later a staffer for Mr. Moran, Virginia Democrat, sent an email asking that the moratorium be lifted.
"I think Mr. Moran is getting close to interfering with the VA's acquisition processes," Mr. Frye told the VA's office of inspector general, days after the lawmaker's request.
Mr. Moran's involvement was revealed in documents obtained by The Washington Times under a Freedom of Information Act request that underscores how FedBid ramped up pressure to try to force the government to use its services.
Character assassination
Mr. Frye's short-lived moratorium set off alarms at FedBid, where Glenn Richardson, president at the time, drafted a memo laying out a response.
Several points mentioned Mr. Frye by name, and one said, "Need to assassinate his character and discredit him."
Three days after the moratorium, Mr. Moran's office wrote an email to VA — though it misidentified Mr. Frye and referred to the retired Army colonel as "Ms. Frye" — making clear that the congressman wanted the moratorium lifted until the agency provided an explanation.
"Mr. Moran requests that the discontinuation of all reverse auctions is suspended until the VA explains the basis for taking such action," the staffer wrote.
Internal emails also showed VA staff were prepping Secretary Eric K. Shinseki on FedBid and reverse auctions in anticipation of a meeting with Mr. Moran just days after the congressman's request.
But a Moran spokesman said the topic never came up at that meeting, and even though the Moran staff email specifically mentioned FedBid, spokesman Tommy Scanlon said the congressman wasn't trying to intercede on its behalf.
"I think our involvement was more about a good government approach," Mr. Scanlon said.
Oversight vs. meddling
Congress is charged with providing oversight, but when a lawmaker asks that an agency overturn a contracting decision, such requests raise troubling questions about the integrity of the acquisition process, said Scott Amey, general counsel for the Project on Government Oversight.
"Undue congressional influence over procurement decisions is a threat to government buying," Mr. Amey said. "Congress shouldn't cross the line between oversight and micromanaging agency contracting decisions. It's why earmarks are not popular with the public."
Andres Mancini, a spokesman for FedBid, said the company "conducted appropriate outreach" in 2012 to understand the moratorium "especially given that reverse auctions had proven to be a successful procurement tool that saved VA money, created competition and supported small businesses."
"For the past 14 years, FedBid has proven to be a highly ethical and transparent company, and we are fully committed to taking all steps necessary to support an ethical and transparent procurement process," he said. "We believe that transparency and integrity are fundamental to a successful business. That is why we take the VA OIG reports very seriously and are prepared to take appropriate actions to address any perceived concerns."
Last month, the VA inspector general's office recommended that FedBid and several top officials be debarred from future contracts. Investigators concluded that the company plotted with VA official Susan Taylor, who provided FedBid nonpublic information, to discredit Mr. Frye and overturn the moratorium.
Ms. Taylor resigned after the report was released. The Justice Department declined to prosecute.
Well-heeled champions
Compared with many other big contracting companies, FedBid isn't a prolific political donor. Its political action committee has raised $26,000 in the current election cycle. In the previous election cycle, the PAC gave $1,500 to Mr. Moran's campaign.
Mr. Moran also has received more than $12,000 in donations from Ted Leonsis and his wife. The owner of the Washington Wizards and Washington Capitals, Mr. Leonsis is an investor in FedBid.
Mr. Leonsis is one of a number of well-connected figures with ties to FedBid. The company's advisers, directors and employees include two former top White House procurement officials, retired Army Chief of Staff Gen. George W. Casey Jr. and at least three former members of Congress who have lobbied or consulted for FedBid in recent years.
Steve Case, co-founder of AOL, sent an email on FedBid's behalf soon after the moratorium.
"FEDBid has become a political force to reckon with," Mr. Frye wrote in one email months later. "I got zero support from the political leadership in VA and Congress for putting a moratorium in place on its use, so that we could develop rules and processes for its use. Leonsis obviously has money and concomitant political power."
Emails to Mr. Leonsis were not returned this week.
In an earlier email during the moratorium, Mr. Frye said the move was "receiving a lot of political pressure because two Washington billionaires have invested heavily in Vienna, VA based FEDbid Ted Leonsis and Steve Case. In fact, I believe the two Congressional representatives are pushing the envelope WRT interfering Federal procurement policies."
It's unclear from the records obtained by The Times which, if any, other lawmakers requested that agency officials overturn the moratorium. VA officials declined to say.
Moran leaned hardest
Mr. Moran's office said political donations played no role in his request to halt the moratorium.
He wasn't the only lawmaker to press the VA for answers on the moratorium, but among the hundreds of pages of internal emails obtained by The Times, Mr. Moran is the only politician who called for an immediate suspension of the moratorium.
A spokeswoman for the VA inspector general's office, Cathy Gromek, said investigators focused their probe on VA employees and a VA contractor.
"When improper actions taken by non-VA employees surfaced, we involved the appropriate agency," Ms. Gromek said. "We found nothing to suggest that any current member of Congress engaged in behavior that warranted further referral."
A spokeswoman for the VA declined to comment on whether Mr. Moran's request affected the agency's decision to reinstate reverse auctions.
"The Department of Veterans Affairs (VA) takes Congress' role of oversight seriously and responded to and briefed multiple member offices as well as Congressional committee staff on the use of reverse auctions," VA spokeswoman Genevieve Billia said in an email.
In an internal email months after the VA overturned his moratorium, Mr. Frye confided about other problems he had raised inside the agency only to be viewed as a malcontent.
He said he got little support within the agency and that Mr. Shinseki "wire brushed" and "publicly humiliated" him. The former secretary, he said, "angrily told me he'd heard enough from me at one point."
Mr. Frye also wrote that he had lost faith in a system where officials "simply don't want any bad publicity for the White House."
"We all take an oath when we become government employees," he wrote. "That oath apparently means nothing here at the VA. Nobody is held accountable."
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