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article imagePentagon dollars flow to military contractor, earns investigaton

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By Lynn Herrmann     Aug 17, 2011 in Politics
Washington - A new series of government investigations has begun over financial dealings of the director of the Pentagon’s chief research agency, after records revealed the agency has been awarding hundreds of thousands of dollars in contracts to her family firm.
Regina Dugan has caught the eye of Department of Defense investigators after it was shown her family firm, RedXDefense, has received $1.7 million in government contracts since she became director of the Pentagon’s Defense Advanced Research Projects Agency (DARPA) in 2009.
In addition to the contracts awarded to RedXDefense, Ms. Dugan also owns more than $15,000 in stock with her family company, despite signing a notice of disqualification agreement prohibiting her from “participating personally and substantially as a Government Officer or employee” in any matter involving RedXDefense.
Despite the disqualification, Pentagon dollars began flowing, and possibly in the wrong direction. Wired’s Danger Room reported earlier this year that
Darpa money could ultimately wind up in the pocket of its director.
DARPA has been scrambling to conduct damage control, with an agency representative suggesting Dugan’s dealings have been completely on the up and up, but a financial report she filed in June 2010 reveals RedXDefense owes her $250,000, listed as a “note/loan” with “no schedule of payment or guarantee of repayment.”
Six months prior to her official disclosure, RedXDefense landed a DARPA contract for $400,000, part of the $1.7 million awarded.
Also revealed in the financial records obtained by the Danger Room is Dugan’s listing of between $100,001 and $250,000 in “assets and income” from RedXDefense.
As a result, the Department of Defense, in a letter to the Project on Government Oversight (POGO), announced it
has initiated the first of a series of planned audits involving DARPA.
“She should have divested herself completely of stock in the company she founded, if only to avoid the appearance of impropriety,” said Nick Schwellenbach, with POGO, the Danger Room notes. “Recusals are nice, but she should put her money where her mouth is: away from her old company.”
RedXDefense, co-founded by Ms. Dugan and her father, Vince Dugan, is a military contractor specializing in, apparently among other things, explosives-detection. Her uncle, John, sits as a member on the RedXDefense advisory board.
According to the Danger Room, DARPA gets blind-eye treatment in how it determines contract awards. As such, DARPA’s $3 billion budget deserves some scrutiny.
One recently retired DARPA official told the Danger Room: “You could pull a lot of money out of that place if you really wanted to. There really isn’t any due diligence there.”
DARPA’s research fields - biomorphic robotics, pathogen detection, brain-controlled prosthetics - are part of a small, interwoven community of specialists, and as Danger Room notes,
Any Darpa official worth his or her salt is bound to run into former co-workers while on the job.
Prior to Dugan’s appointment to the top of DARPA, the agency played by a different set of guidelines. Any possibility of a conflict of interest would likely lead to a disqualification in research work being granted.
But after Dugan’s arrival at DARPA, the rules began to bend, according to Wired. Dugan’s deputy, Kaigham “Ken” Gabriel, told a conference last year: “More realistic conflict of interest rules have been applied to people coming to work at Darpa,” according to the Danger Room.
Despite those contracts awarded to RedXDefense, Ms. Dugan’s deputy insists everything is kosher. Gabriel recently told the Los Angeles Times: “Honestly, this is something that is prevalent. We just know how to deal with it. It’s not that big of deal, frankly,” the Danger Room reports.
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