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Upheaval as 2020 Census Looms: Senate Chairmen Scrutinize Commerce Department Watchdog

Peggy gustafson census 1150
(Photo of Peggy Gustafson: C-SPAN; illustration: CJ Ostrosky / POGO)

According to more than two dozen whistleblowers who’ve spoken to Congress, the office of the Commerce Department’s internal watchdog is plagued by mismanagement, misconduct, and low productivity, caused in part by plummeting morale. In response, three powerful Senate committee chairmen are demanding that the watchdog’s Obama-appointed leader, Inspector General Peggy Gustafson, allow Congress to question eight of her top aides and two executive assistants about the whistleblowers’ complaints, according to a pair of previously unreported letters signed by the senators and obtained by the Project On Government Oversight (POGO).

According to reports to Congress from more than two dozen whistleblowers, the office of the Commerce Department’s internal watchdog is plagued by mismanagement, misconduct, and low productivity.

The interviews, which include Gustafson’s chief of staff and general counsel, began last week.

The senators’ letters, dated January 31, 2020, come at a sensitive time for the Commerce Department as it prepares to conduct the pivotal 2020 census. Gustafson’s watchdog team also has at least three politically touchy reports pending: one on alleged false statements by Commerce Secretary Wilbur Ross and other Commerce officials in sworn congressional testimony about adding a question about citizenship to the census; and another on the “Sharpiegate” scandal, where Commerce officials were asked to defend a bogus map tweeted by President Donald Trump showing Hurricane Dorian heading for Alabama, which was not at risk at the time. A third pending investigation involves an examination of Ross’s alleged financial conflicts of interest and failure to fully divest from his business assets.

The two letters are signed by Senator Roger Wicker (R-MS), chairman of the Senate Commerce Committee, and Senator Ron Johnson (R-WI), chairman of the Senate Homeland Security and Governmental Affairs Committee, who have jurisdiction over the Commerce Department and Gustafson, its inspector general. A third signatory is Senator Chuck Grassley (R-IA), chairman of the Senate Finance Committee, and a leading advocate in the Senate for whistleblower rights. One letter went to Gustafson and the other went to the head of the government council that oversees inspectors general.

“We’ve now had dozens of whistleblowers come forward with similar complaints about the inspector general’s office,” Grassley said in a statement released today. “The complaints cover a wide range of serious allegations, from absenteeism, waste, and mismanagement to paltry job satisfaction numbers, to an apparent lack of oversight leading up to the decennial census. Asking for staff interviews like this is out of the ordinary, but so is this level of reported dysfunction within an inspector general’s office.”

Another key complaint from insiders is the wide latitude Gustafson has given her top lawyer, general counsel Wade Green, who has a confirmed record of whistleblower retaliation while serving under a previous Commerce inspector general. A lawyer who represents Green said his client is aware of no current complaints against him, public or nonpublic.

Three previous Commerce inspectors general have left office engulfed in scandal, accused of serious wrongdoing. Gustafson has so far been publicly accused of inaction, and a failure of leadership damaging to morale, productivity, and oversight. Yet few inspector general controversies have generated such an outpouring and variety of whistleblower complaints as are now directed at Gustafson and some of her top subordinates.

In a three-page statement to POGO, Gustafson defended efforts to turn her office around, citing a spate of critical hires and other progress, and called out Grassley by name. She said the ongoing congressional interviews of her staff appear “to be a targeted campaign against me, which now includes going after not just my senior leadership, but also rank-and-file administrative assistants.” She added that, “Although I, like my fellow IGs, conduct oversight in a non-partisan fashion, the only reasonable conclusion is that this inquiry is motivated by political concerns.”

Staff from both parties attached to the three congressional committees participated in a two-and-a-half-hour interview of Gustafson on January 9.

An earlier letter from the chairmen, dated December 2, 2019, and addressed directly to Gustafson, rebuked her for an “inadequate response,” as an accompanying press release put it, to their previous requests for information concerning her leadership.

One of the January 31, 2020, letters also asked the government’s council of inspectors general for information about its ongoing probe of alleged “misconduct” by Gustafson. In response, the Council of the Inspectors General on Integrity and Efficiency’s (CIGIE) Integrity Committee, a watchdog that oversees the inspector general community, wrote to the senators that it would brief a bipartisan group of Senate investigators on the matter. It is not uncommon for the council to receive complaints about inspectors general.

Sources at Commerce’s Office of Inspector General told POGO that the council, which does not comment on its investigations, is looking into allegations that Gustafson was frequently unavailable, or absent from her own office, impeding its work. The council on inspectors general is also reviewing Gustafson’s alleged waste of government funds when she travelled on business to Colorado and Florida. And a third allegation is that she spent in excess of the allowed $5,000 to make office improvements.

A Commerce Inspector General official told POGO: “We are aware of a complaint that was sent in July to the Integrity Committee of CIGIE, which will look into it. The allegations are baseless. We are confident that once it is looked into, it will be closed out quickly.”

Though the letters are signed by Republican senators, but not by their Democratic counterparts, staffers for Democratic lawmakers told POGO they are aware of developments in Gustafson’s office, and waiting to learn more about the allegations before weighing in publicly.

“New and exciting tools”

All this is occurring weeks after Gustafson surprised colleagues by removing a senior official overseeing audits of the census that the Commerce Department will soon begin conducting nationwide. Congressional sources and whistleblowers told POGO that in response to roughly a year’s worth of internal complaints about the timeliness and quality of some of the inspector general’s 2020 census audits, Gustafson did little or nothing to remedy the situation. Then, in late December 2019, she removed the senior official. But by then, many of the census preparations were already complete.

As preparations for the census intensified, internal complaints flowed into the Commerce Office of Inspector General on everything from inadequate training to insufficient background checks for those conducting the count. The work of overseeing the census adds to the office’s usual workload overseeing Commerce’s 12 far-flung bureaus including the National Oceanic and Atmospheric Administration and the Patent and Trademark Office.

But amid staff departures, and especially after some 12 lawyers in the investigation unit were allegedly pressured into leaving, most in 2018, understaffing has boosted workloads for those who remain.

“She’s a hands-off person, and doesn’t make decisions,” commented one official who spoke anonymously for fear of retaliation, referring to the delays in dealing with complaints about the census audits, and understaffing. “As a result, many people have left, and many others are looking for other jobs so they can get out of here. Productivity is suffering. It’s not a happy place.”

As a watchdog, we’re defanged. We need new dentures.

a senior inspector general official

Said a senior inspector general official: “As a watchdog, we’re defanged. We need new dentures.”

In response, the inspector general office told POGO that it had hired 13 new employees so far this fiscal year, “with accompanying gains in productivity.” According to the statement Gustafson’s office provided POGO, the inspector general’s office “has taken major steps to improve and streamline the OIG’s [Office of Inspector General] recruiting and hiring abilities to ensure that the agency attracts and retains top talent.” She asserted that “departures dropped dramatically since last year, but the OIG currently has 17 applicants who have accepted offers of employment and will be joining OIG shortly.”

As to the census, the inspector general’s statement said, “Our oversight to date has provided 55 findings and 78 recommendations. … The OIG will deploy as many resources as necessary in service of decennial oversight.” The statement referenced weekly calls with the census director, coordination with the FBI, regular meetings with the deputy secretary of commerce, and regular contacts with a hotline fielding the “massive volume of complaints that typically accompany the decennial.” The statement noted that “Data Analytics groups are poised to deploy new and exciting tools to monitor the decennial in real time.”

“Low office morale”

Gustafson was nominated by President Barack Obama and confirmed by the Senate in 2016, taking office in January 2017. Since then, her tenure has racked up some of the lowest scores in the federal government on surveys of employee performance and morale, amid an unpopular restructuring of the office, along with a wave of workforce departures that led to understaffing. In its statement to POGO, Gustafson’s office acknowledged “upheaval that accompanied the office realignment of 2018,” an event “compounded by key departures in the human resources department in 2019.”

The Federal Employee Viewpoint Survey is an annual, mandatory review of attitudes among government workers, with a particular focus on “employee engagement,” a key measure that agencies closely track because of its impact on productivity, retention, and turnover. According to the nonprofit that analyzes the data, the score measures “the level of respect employees have for senior leaders, satisfaction with the amount of information provided by management and perceptions about senior leaders’ honesty, integrity and ability to motivate employees.”

Gustafson told POGO that, “There are employees present at every level and in every office of the agency that are fully committed to making it one of the best places to work in the federal government.”

That may be, but the goal appears elusive. In 2016, the year before Gustafson arrived, the office ranked 263 out 305 sub-agencies on “employee engagement,” a statistician for the Partnership for Public Service, which creates the annual “Best Places to Work in the Federal Government” rankings, told POGO. By 2019, the score had plunged to 413 out of 420 sub-agencies, the worst performance by any inspector general’s office. (Agency subcomponents have been added to survey results through the years as those subcomponents have received their own rankings, separate from their home agencies.)

As preparation for the census continues, and the office also contends with its other oversight duties, the office currently has about 150 auditors, investigators, and other employees, with understaffing estimated at roughly 20%, according to sources in the office and in Congress.

Departures have multiplied, including well over two dozen in 2018 and 2019, with various positions still vacant, say insiders. According to data from the Office of Personnel Management cited by Grassley in a letter to Gustafson last August, more than 19% of the office’s workforce left during calendar year 2017, Gustafson’s first year on the job, and interviews with congressional staff indicate employee attrition accelerated, though Gustafson’s office asserted in its statement that will soon change as new hires come aboard.

Two of the whistleblowers in touch with Congress are presidential appointees, Senate sources say, while close to a dozen others are members of the government’s elite Senior Executive Service.

Some whistleblowers have also told Congress and POGO that Gustafson has frequently been absent from her office, and that she has been slow to make decisions across a broad range of issues.

Some of the whistleblowers told congressional investigators of an internal meeting at which Gustafson allegedly asked a top staffer to explore how to minimize, change, or avoid drawing attention to the results of the Federal Employee Viewpoint Survey, apparently in an effort to obscure her department’s abysmal survey ratings from Congress, the public, and her own staff.

When asked at her January 9, 2020, meeting with Senate investigators whether she had ever attempted to examine how to change or minimize low survey scores, she twice emphatically denied having done so.

Those denials place her squarely at odds with claims by a number of whistleblowers who say they attended meetings where they heard her discuss such matters specifically and instruct one or more subordinates to look for answers, congressional and other sources say.

Two whistleblowers interviewed separately by POGO recalled a meeting in Gustafson’s office with seven or eight people seated around her conference table. Official survey results had recently come out and, once again, scores were low, declining from the previous year.

“She was saying we’re not going to give these numbers much credence, or visibility, or do any analysis,” a whistleblower said. She allegedly discussed the possibility of folding her agency scores in with far higher overall Commerce Department figures covering the same measures, according to the same source. Gustafson then reportedly blamed disgruntled employees for badmouthing her in surveys after she had reorganized their unit.

Gustafson told POGO, “I take very seriously both the Federal Employee Viewpoint Survey and any information provided by whistleblowers.”

Those who have stepped forward have unanimously cited low office morale and lack of leadership as reasons for leaving or thinking of leaving their positions.

Letter from Senator Chuck Grassley to Peggy Gustafson

In his letter to Gustafson last August, Grassley wrote, “You can imagine my concern when I began receiving these reports from within your office. … Those who have stepped forward have unanimously cited low office morale and lack of leadership as reasons for leaving or thinking of leaving their positions.”

Then, in December 2019, Grassley, joined by Senators Wicker and Johnson, wrote another letter to Gustafson complaining of her response to previous requests for information. They wrote that what she “provided does not include enough context for us to determine the root causes of the leadership, staffing, and morale problems that are prevalent at Commerce OIG, nor does it include enough detail for us to determine the timing and extent of your efforts to address these problems.”

Some whistleblowers contend that Gustafson has tried to compensate for what they describe as her professional disengagement by delegating tasks to Green, the office’s general counsel. He was found to have retaliated against multiple whistleblowers in a 2013 report by the Office of Special Counsel (OSC), an agency that investigates federal whistleblower complaints.

According to the Office of Special Counsel report, Green negotiated gag clauses for departing employees, and the inspector general office’s management “used its authority, including the threat of failing performance ratings and delayed release dates, to effect these separation agreements.”

The Office of Special Counsel report continues, “In return, the employees gave up their right to make disclosures to OSC, Congress, or the media and they withdrew their pending EEO [Equal Employment Opportunity] complaints and/or Freedom of Information Act (FOIA) requests. The whistleblowers would not have signed such agreements if not for the retaliatory and coercive acts by management.”

Neither Gustafson’s office nor Green offered specific comment on the Office of Special Counsel’s findings or their current relevance, if any.

Gustafson’s office’s statement to POGO criticized the congressional “targeting of individual OIG career employees with unattributed allegations,” which the office’s statement referred to as “an inappropriate and unwarranted invasion of privacy against two long-tenured and well-regarded senior executives.” One of her senior executives who has come under criticism is Green.

Green’s alleged past misconduct, as documented by the Office of Special Counsel, occurred during the tenure of former Commerce Inspector General Todd Zinser, who resigned in 2015 amid allegations of whistleblower retaliation. Another of Gustafson’s predecessors, Johnnie Frazier, left the job in 2007 following allegations of fiscal impropriety and whistleblower retaliation. And yet another, Francis DeGeorge, also departed, only to plead guilty in 2000 to criminal misconduct while in office.

Referring to those predecessors, the statement from Gustafson’s office noted that “all left amid serious scandals,” and that “it takes time to undo the negative and build for the future.”

Criticizing Grassley for his conduct of the current investigation of her office, she complained that, “he has ignored my requests for a personal meeting.” She added that, “An oversight organization with a troubled past that goes back for decades is on the brink of turning things around” due to her efforts.

Gustafson’s conclusion: “This is not the time to play politics with this OIG, where so many gains have been realized recently, and so many more are about to happen in the next 9 months.”