Sun Microsystems, Lurita Doan, and Tim Griffin Meet in Arkansas

by emptywheel

Unnoticed with the Virginia Tech news and the Alberto Gonzales flame-out, there was a weird case announced this week in Arkansas. The federal government was intervening in a whistleblower case launched against just about every big name in the IT world: Accenture (formerly Anderson Consulting), Sun Microsystems, HP, IBM, Cisco, Dell, Compaq, Microsoft ... everyone except Apple. The case had initially been filed by two whistleblowers on September 17, 2004; the government intervened into some of the cases (specifically, against Accenture, HP, and Sun) on December 13, 2006; and the case was unsealed this week, on April 19. I'll come back to the significance of those dates.

The Kickback Association

The case against Sun basically alleges that members of an Association including Sun would get a Systems Integration contract with the US government.Then, it would push contracts for other Association members, in exchange for kickbacks.

For example, Sun has entered into agreements with its Alliance Partners wherein it pays Kickbacks, as defined below, between and among themselves in the nature of anything of value, but not limited to, referral fees, influencer fees, systems integration compensation fees, reseller fees, commissions, free or discounted products and/or services, equity ownership, profit sharing, or other benefits.

[snip]

As a result, millions of dollars of Kickbacks were sought, received, offered and paid between and among Sun and its Alliance Partners in violation of the False Claims Act and other federal statutes and regulations.

The main thrust of the suit alleges that these IT companies have established a system of kickbacks whereby they send each other business in return for payments.

Now, this kind of strong-arming has been going on as long as the computer business has existed--it's how IBM got big (full disclosure--I was born and bred in IBM culture, and my father was a significant player in IT contracting in the 1990s). But you're not supposed to do it with the Federal government. And, perhaps because the two whistleblowers brought a large amount of evidence describing the details and dollar amounts, the government is now trying to recoup the money that went to such kickbacks.

Sun's False Statements about Commercial Discounts

But there's an allegation specific to Sun, wihch is where Lurita Doan comes in. The suit alleges that:

Sun has also made false statements to the Government about its commercial sales practices and the discounts it offers to its commercial customers resulting in improperly negotiated pricing -- thus defective pricing -- on its sales of products and services to the United States Government. These false statements thus result in inflated and false claims being submitted to and paid by the Government. 

This issue--Sun's misrepresentations about its commercial prices--was one of the issues Henry Waxman raised with GSA Administrator Lurita Doan in her March 28 appearance before the Government Oversight Committee.

Basically, in response to a hotline tip received in September 2004 (this coincides with the initial complaint on this suit, so it's likely the tip came from one of the whistleblowers who first brought the suit), the GSA realized that Sun was overcharging the government for its services. One contracting officer (CO) worked to bring Sun's discounts in line with government requirements. This CO was replaced in February 2006, but his replacement (the second CO) similarly tried to bring the Sun contract into line with the discounts normally required by the Federal government. Sun balked at this effort, and in August 2006, the second CO and the commissioner of the Federal Acquisition Service agreed to let Sun's contract expire on August 31.

But then Administrator Doan (who had assumed that position on May 31, 2006) got involved. Worried that if GSA ended Sun's contract, it would just go through a competing contracting agency and GSA would lose the contract, Doan demanded that the CO keep the contract. When he said he was unwilling to do so, given the results of the audits, he was reassigned. His replacement (the third CO) pounded through a new contract in five days, ceding even the discounts that Sun had been offering in the interim two years, much less the discounts normally accorded to the Federal government. And, apparently as a reward for pushing through this disadvantageous contract, the third CO got a transfer he had been seeking:

I have been told that the contracting officer accepted an offer that was inferior to a previous Sun proposal, with contract terms from Sun that the official's predecessors had rejected. I have also been told that shortly after concluding the Sun negotiatoin, the contracting officer recived a requested transfer from Washington, D.C., to Denver, despite having been previously refused such a transfer.

The thing is--not only did GSA know that Sun was ripping off the government. The second CO (the one that got reassigned) was also aware that DOJ might get involved in this case:

I also understand that during this period, the second contracting official learned about discussions between the Inspector General and the Department of Justice regarding a possible False Claims Act referral concerning Sun overcharges.

So Lurita Doan pushed through a contract in spite of the fact that GSA knew Sun might be named in a suit brought by the Federal government for misrepresenting its commercial prices.

Tim Griffin and Lurita Doan

This is where the USA Purge comes in. As I said, the initial whistleblower Qui Tam case was first filed in September 2004. According to Waxman's communication, GSA also learned about the complaint in 2004, and knew that the IG was discussing a False Claims Act referral with DOJ. GSA's IG intervention may well be the reason DOJ intervened in the whistleblower lawsuit. We know from Waxman's letter that DOJ was considering intervening in summer 2006. And it finally did intervene on December 13, 2006, just two days before Bud Cummins resigned on December 15.

Now, as we heard from the Republicans repeatedly in the Alberto Gonzales hearing the other day, the USA for a particular office is not going to take the lead on such issues. And the Sun case is almost certainly NOT the reason Cummins was dismissed (I still find his investigations into Matt Blunt more disconcerting). Furthermore, the suit against Sun does not and could not relate to the contract signed by Doan (not least because that contract was signed knowing that Sun was overcharging the governmnet). Whatever investigation the GSA's IG pursues into the ongoing Sun contract, it will remain separate from this suit.

Still, Tim Griffin is now overseeing a suit that reflects heavily on accusations leveled against an embattled Bush official. Welcome to the Gonzales DOJ.

Update: Edited the first sentence at the request of eyesonthestreet.

Comments

[emptywheel]

BTW, Lurita Doan comes from this IT contracting world. Her company offered just this kind of contract to government agencies. Her company has not been named in the suit, though, and there's no indication that Bush brought her in to sustain corrupt IT contracting.

[Seamus]

For Lurita, the GSA was her payoff for being a loyal Bushie. IMHO, there is a reason for her appointment, it's just that no one has found it yet.

[kaleidescope]

It's unclear how much control Griffin can have. The government intervened, but the private plaintiffs are still in the case, and not just as intervenors. They will have full rights of discovery, including taking depositions of anyone whose testimony might lead to admissible evidence. In a case like this, that could cover a lot of ground. The article you link to doesn't relate who the private plaintiffs' attorneys are, and that's important because this is a very big case and somebody is going to have to advance a lot of costs and put up a lot of free attorney time on the hope that it'll get paid back when they win the case. You can bet Richard Mellon Scaife won't be funding this one.

[Bill Durbin]

You say that you find the investigations of Matt Blunt more disconcerting. I do as well. However, I have not been able to find a really good account of how this case ended up with Cummins. Is there an article you can refer me to that details the history of the recusal of the AG for the western district of Missouri, and the referral of the case to Arkansas. I know the Kansas City Star was covering the story, but I have not seen any real follow up, even on Talking Points Memo. Does anyone know the current state of the case? The Bush family and Rove have long connections to the Missouri Republican Party.

[Albert Fall]

A little tin foil hat speculation, that ties into Sheldon Whitehouse's 400+ boxes going from the White House to DOJ:

What if that $100m tax recovery that got blown because the USA (I think it may have been Taylor) filed the wrong papers wasn't a mistake? What if the tobacco case DOJ central intervention was bought and paid for?

What if the GSA contract wasn't an error?

What if political contributions--maybe even broken down into candidate by candidate or state by state contributions to disguise the size--bought the results? Not individual bribes, but contributions in pursuit of the Permanent Republican Majority....

That would leave the political arm dictating outcomes, using DOJ to punish enemies and protect friends from prosecution, with the porous WH/DOJ connections making it very hard to pin down exactly who in the WH directed specific outcomes.

I am not aware of evidence that fits that speculation regarding the political contributions....but Bush makes it impossible not to think the worst.

[undecided]

Albert Fall,

I think that is precisely what Sheldon Whitehouse was getting at. There is still alot we don't know about 911 and the anthrax attacks, as well. As time goes on, the more convinced I become that there are circumstances surrounding those events that would be highly damaging to the Administration.

[bmaz]

Albert Fall - You need not feel that your tinfoil hat is to pointed. Setting aside for the moment the motivation behind the moves, there can be no question whatsoever on whether the moves were intentional. The lead prosecutor on the tobacco case, Sharon Eubanks, was specifically ordered Eubanks to reduce the penalty sought in the litigation from 130 million to 10 million. One thing I can tell you about litigation involving penalty assessments (as opposed to more general standard verdicts in a personal injury tyope situation) is that you rarely, if ever, get more than you ask for. The political operatives at DOJ Main also ordered her to alter witness testimony and ordered her to read a closing argument rewritten and bastardized by the politicos at DOJ Main. Same thing at GSA; the moves were intentional. Similarly, there is no way to controvert where the benefit inured to, and it is most certainly not to the government or the citizens it represents. So your first two elements are not even in question, and the only one left is whether the motivation is money quid pro quo. With the Republicans, especially this group, its ALWAYS about the money. It is here that the sledding gets tough though, because you can't easily prove a direct causal relationship. The Republicans, over the last decade have made their corruption and money grubbing for favors so endemic, systemic, diffusive and pervasive that it is hard to ever prove a direct causal relationship. So to sum up, take off the tinfoil, you are dead on the money.

[Dismayed]

Albert - wouldn't doubt any of it. It's all politics to them, and to them in politics there are no laws. For every shady deal we have evidence of there are likely a hundred that haven't seen the light of day.

The rat protest yesterday is an example of the mentality of the people who support these crooks. Signs that say "russert will rat you out" There's your right wing, not upset that a CIA agent was outed, that criminal activity was being covered up. No. They are upset at Russert for telling the truth in a court of law.

But us evil left wing liberals - why we want to spend their (stolen) money to make sure poor people can get a smallpox shot - boy, we're a dispicable lot.

NYTimes today. Southern infant deaths on the rise for the first time in decades -- Rich man needs his tax break, don't see the blood on his hands. Sprinkle the money on top, it'll trickle down through the man. But the money don't trickle and the cough don't tickle. And the blood don't stick to those hands.

[bmaz]

I would like to return to Sharon Eubanks for a minute. Ms. Eubanks should be thanked for now speaking out about what happened in the tobacco case. But where the hell was her voice at the time, when it was happening. Why didn't she resign in open court, on the record (no I am not inferring this be done in front of the jury which would have been a mistrial) so as to draw the necessary attention to the Administrations unethical perfidity. And unethical is exactly what this was, and on a number of levels. Lawyers are ethically required to act in the best interests of their client. In the tobacco case, the clients are the citizens and our interests were not protected. Prosecutors have special ethical considerations, that other lawyers often do not, in that they are ethically required to use their best discretion and not allow political considerations to affect their judgment and conduct. Again, a massive violation in the tobacco case. Quite frankly, both the politicos at DOJ Main AND Eubanks grossly violated their ethical duties in the tobacco litigation. It is absolutely blatant and the violations should be seriously addressed by a bar misconduct board.

[eyesonthestreet]

"Buried under the Virigina Tech news," maybe a little editing needed here?

[earlofhuntingdon]

The theme seems to be that whenever there's a conflict betweent value for taxpayers and profit for the private sector, the private sector wins hands down.

Apart from giving taxpayers fewer services for more money, this approach corrupts govt contracting, the auditing of those contracts, and the management of both. That threatens the whole notion of government services, which creates the background noise within which Mr. Bush's wildly inefficient privatization is happening as we speak.

The irony is that the GOP purports to be the partty of the private sector, and extols the unqualified virtues of unrestricted capitalism. Textbook falsehoods. The GOP is ferocious in protecting its contributors from competition and from the costly consequences of their excesses. The result is that everyone pays but the guy who did it. Sounds like the version of "accountability" that George Bush has used all his life.

[Dismayed]

EOTS,
The VT death toll is exceeded EVERY DAY in Iraq thanks to the Cheney administration. I really couldn't give a tinkers damn about perceptions of PC phrasology. VT, as tragic as it is, pales in comparison to the wholesale devistation that this administration brings to everything it touches. How many infants have died due to cuts in public health care funding? I'd be willing to bet it's more than the VT death toll, but how much air time will they get?

There's plenty to get snitty about without picking apart EW's use of vernacular.

[zhiv]

This seems slightly weedy though of course typical and classic, and Loretta/Lurita was a horror incarnate in front of Waxman. But re: Cummins and how seems like the Matt Blunt investigation is enough, isn't the Cummins firing more about putting Griffin into Arkansas for extra Hilary insurance, and getting somebody who will be "aggressive about voter fraud"? I'm also trying to continue to work backwards from the idea that goal #1 was to get rid of Carol Lam and throw in some swing state politics for good measure.

[greenhouse]

Dismayed:

"Rich man needs his tax break, don't see the blood on his hands. Sprinkle the money on top, it'll trickle down through the man. But the money don't trickle and the cough don't tickle. And the blood don't stick to those hands"

Damn, yer a poet and you don't even know it.

bmaz,
Inured? I'm not sure why you're using it in this context. Sorry to nitpick, but if you could clarify.

Thanks!

[LarryInCincy]

Just a request for some clarity for us Non-attorney types out here.

There seems to be a lot of "intervening" going on here.

"GSA's IG intervention may well be the reason DOJ intervened in the whistleblower lawsuit"

Is this a good thing, a bad thing, or does it depend on the nature of the intervenor and intervention?

Intervention is commonly thought of as the actions a parent takes to protect a troubled child from themselves.

Thanks in advance.

[Garrett]

Lurita Doan -> Mark Corallo:

Doan also has personally obtained the services of Mark Corallo, founder and principal managing member of Corallo Media Strategies LLC, an Alexandria, Va., crisis communications media services firm.
--govexec.com

Mark Corallo -> Monica Goodling:

Among Goodling's close associates were Barbara Comstock, head of opposition research for the RNC and later the chief spokeswoman for Ashcroft; Griffin, Comstock's deputy, whom Goodling would later help to win the interim appointment to replace one of the eight ousted U.S. Attorneys in Arkansas; and Mark Corallo, who in 2003 took the helm of the Justice Department's Public Affairs Office after Comstock.

... In no time, Goodling became "indispensable" to the office, says Corallo, who became Ashcroft's spokesman in 2003. "I have never known anybody that works harder or does better work than her."

Her dedication was legendary, so much so that Ashcroft's office would ask to "borrow" her for projects. Corallo says Goodling would stay all night. "I'd come in at 8 a.m., and she'd be sleeping on my sofa in the office."

... Goodling also played a key role in putting together briefings for the Hill. "She would check them for accuracy," says Corallo.
--law.com

[confused mac user]

What's the point about Apple? I followed the link too. So is it (why Apple's not involved) a burning question that needs answering? Or is it just a backhanded slap against Apple like they haven't busted open the Microsoft-PC makers monopoly yet? Or is it a comment on how the government wouldn't know a good deal with Apple's products if it bit them?

Nothing, absolutely nothing Microsoft or it's PC allies does to perpetuate a monopoly, or to strangle competition, or to collude to rip people/governments off surprises me.

So please give a little eloaboration on the link to the "where's apple blog".

[bmaz]

Greenhouse - Well, it you want to nitpick, and it is your right to do so, my use of the word inure above may be technically a little sloppy, but it is not necessarily incorrect. I live in the west and it was early morning for me. I did not want go for the full absudity of penning something along the lines of who or where the benefit befitted. I am forced to put on my Steve Martin arrow through the head and say "Excuuuuse Meee".

[bmaz]

Make the word "befitted" above read "benefitted" Now you can bust my errant typing skills, and poor eyesight for recognizing errors, as well.

[pol]

There's plenty to get snitty about without picking apart EW's use of vernacular.

From a sleepy, Sunday afternoon reader -- I noticed that emptywheel used the phrase "Buried under the Virigina Tech news," but I thought eyes was asking her to spell "Virginia" correctly!

[emptywheel]

Larry

Non-lawyer here, too. The point is just that, once GSA got a called-in tip on the Sun overcharging, interest in that investigation seems to have come from two directions--the whistleblowers themselves, and the GSA Inspector General who apparently found the charge to have merit. So GSA's IG gets involved, thereby convincing DOJ to get involved, thereby getting the government to pay for this suit from this point forward.

confused mac

It was not meant as a slap to Apple at all. But really, the best way to describe the scope of the suit is to say everyone but, most likely because Mac just hasn't gotten the govt business.

pol

Ah. Virginia. Fixed that too now, thanks.

[freepatriot]

the wheels of justice grind slowly, and the wheels of justice grind exceedingly fine

oh, and what goes around comes around too

raise your hand if you wanna be in the bushistas' shoes right now

[bmaz]

Two comments: 1) My eyesight really sucks - I must contemplate glasses or surgical correction. 2) This typo nitpicking has got to give a few breaks here and there or the substantive work that is important will grind to a halt. All that said, EW I think you still have a problem with "Virgina" above. We must not upset the virgins, else they won't service the terrists!

[Sara]

One reason the Case is in Arkansas might be that ACCENTURE is the lead listed defendent, and it is headquartered in Little Rock. It initially was a database company based on credit records from major Department Store Chains in the South and Nationwide, (Think Penneys) it is owned by the oil and gas types associated with Stephens -- and then it bought the remains of Anderson. It has very long standing relationships with the Arkansas Friends of Bill (as in Clinton) -- and after he retired from the US Army, Wesley Clark joined the board also working as a consultant to drum up business post 9/11. Whether this has anything to do with the case -- don't know -- but since ACCUNTURE is first listed -- perhaps that accounts for bringing the case in Arkansas?

[confused mac user]

Thanks for the clarification Emptywheel. I just didn't get the link.

[Eve in NYC]

Sara: "ACCUNTURE"?
I like it.

[greenhouse]

bmaz,

My sincerist of apologies. I feel sorta embarrassed for bustin yer cojones over minor technicalities because I always get much insight from your writing and I'm usually the first to snap at anybody else critical of spelling errors rather than focussing on the content. It was just a sincere couldn't-help-myself-moment because from my understanding of the word, it didn't seem to fit in the context of what you were trying to say and to my chagrin I do have a tendency to hang on to the last word a bit much.

Peace :)

[bmaz]

Greenhouse - If you see this, not to worry. I am a big boy and can take it. My mother was an educator and, if she could witness half of the rules of structure and use violations I now commit, would go seriously postal. Also, you are correct that the use of the word inure was not the best there. One of my problems is that for most of my professional life, the only writing I enegaged in was on legal motions, briefs, memoranda etc. Lawyers tend to have a reliance on terms of art in the legal profession and strange uses of otherwise innocuous words, not to mention running thoughts together in awkward sentences. Inured often is used in this regard as a substitute for "flowed to", and somewhere along the line that use became assimilated into my vernacular. The typo stuff was my own joke against, well, myself. I have a biting sense of humor and it can be aimed at you (the Steve Martin bit), me (the bad typing skills) or anyone else. Lastly, my eyesight really does suck and I am a lazy proofreader. Your criticisms are welcome, and if I ever get testy, it is because you are probably right.

[greenhouse]

Thanks bmaz and appreciate the steve martin, you wild and crazy guy.