Exposing Corruption and Preventing Abuse of Power

Gallup Fraud Probe Nabs Ex-FEMA Official

On Wednesday, federal prosecutors in Washington, DC, filed a criminal complaint charging former Federal Emergency Management Agency (FEMA) official Timothy Cannon with steering contracts to The Gallup Organization while seeking a job with the company.

Cannon served as Director of Human Capital at FEMA from 2007 to 2009. The government alleges Cannon participated in the award of contracts to Gallup (identified as “Company A” in the complaint) while he was negotiating a $175,000-a-year job with the company. According to NBC News, Cannon plans to plead guilty to one felony count of violating federal conflict of interest laws.

Cannon’s prosecution is part of a larger corruption case involving Gallup, a world-renowned polling services company and federal contractor. Back in August 2012, POGO blogged about the Department of Justice (DOJ) intervening in a whistleblower lawsuit accusing Gallup of overcharging the federal government millions of dollars on contracts with several agencies, including FEMA. Former Gallup employee Michael Lindley filed the lawsuit in 2009. In November 2012, the DOJ filed a civil complaint in the case, and Lindley, who is pursuing several claims on his own, filed an amended complaint.

The civil fraud case blames lax training and weak managerial oversight at Gallup for the alleged overbilling. The criminal charges against Cannon also paint an unflattering picture of Gallup’s corporate culture, implying that the questionable conduct went all the way to the top of the company. The criminal complaint quotes emails from Gallup employees, including chief executive officer James Clifton, in which they discuss offering a job to Cannon despite obvious ethical red flags. In the end, those ethical concerns, bolstered by a fear of losing FEMA’s business, led Gallup to revoke its offer to hire Cannon.

Charges could soon be brought against current and former Gallup employees, too. In the Cannon criminal complaint, the government cites one particularly damning email in which Clifton admitted that his company “broke some of the rules” with regard to Cannon. As POGO noted when we last blogged about the Gallup investigation, the government can pursue criminal charges under the conflict of interest laws against both the job seeker and the prospective employer. This happened several years ago when Air Force official Darleen Druyun and Boeing executive Michael Sears each got a prison term for negotiating a job for Druyun at Boeing while the Air Force was in the process of awarding a $20 billion aircraft lease deal to the company.

Update: On January 15, 2013, Timothy Cannon pleaded guilty to a charge of violating federal conflict of interest laws. Sentencing is scheduled for April 9, 2013. Cannon faces a maximum of five years in prison.