NASA's former chief of staff admitted in federal court last week to steering a $600,000 sole-source contract to one of his largest consulting clients, nearly half of which ended up back in his own pocket.
Courtney Stadd of Bethesda, Md., pleaded guilty on Aug. 18 to one count of conspiracy in the U.S. District Court for the Southern District of Mississippi. He faces up to five years in prison and a $250,000 fine when he is sentenced on Nov. 18.
Stadd was charged in a nine-count indictment in December 2009 and at the time faced 55 years in prison if convicted of all charges. Stadd's attorney did not respond to a request for comment.
A familiar face at NASA, Stadd first joined the space agency as President George W. Bush's transition chief in 2000. He later served as chief of staff and White House liaison before leaving the agency in 2003 to form Capitol Solutions, a management consulting firm with clients in aerospace industries.
Stadd returned to NASA in April 2005 for a two-month period as a special government employee, assisting with the transition to the new administrator, Michael Griffin, who was reorganizing the agency as it recovered from the Columbia space shuttle disaster.
He told agency officials at the time he would recuse himself from all activities involving Capitol Solutions' clients, prosecutors said.
"From the moment that I accepted my current position, I notified these clients that all of my interactions with them will be strictly confined to non-NASA issues," Stadd wrote in a memorandum to senior NASA officials.
But prosecutors said Stadd did not honor the agreement. He worked with Liam Sarsfield, NASA's former deputy chief engineer of programs, to direct a $600,000 contract for a remote sensing study to Mississippi State University's Georesources Institute, the plea deal said. The university was one of Stadd's top clients.
The funding, which had been earmarked for an Earth Science Applications program, was supposed to be awarded through a national competition, according to the indictment.
The university subcontracted $450,000 of the contract funds to Capitol Solutions. Prior to the award of the contract, Sarsfield left NASA and went to work for the consulting firm on the same subcontract.
Stadd admitted receiving more than $287,000 through the subcontract. Some of the work, however, appears to have been fraudulently billed, prosecutors said.
In addition, Stadd admitted to inflating the hours billed on the subcontract and falsifying invoices to the university, which was not implicated in the case. He also admitted to sending two false quarterly reports to the university in August 2005 stating that Valador Inc. in Herndon, Va., "a service-disabled, veteran-owned small aerospace business with extensive satellite engineering experience," prosecutors said, also worked on the contract. Valador was not involved with the contract.
Shortly after leaving NASA in June 2005, Stadd asked Mississippi State University to raise his monthly compensation from $7,000 to $10,000, citing the return on investment that he had demonstrated, and the university rewarded him with another contract worth up to $60,000, the indictment said.
When NASA's inspector general began to investigate the dealings, prosecutors said Stadd met with senior agency officials in an ill-fated attempt to block the inquiry. He admitted last week that he also created false billing documents in response to a federal grand jury subpoena.
Stadd was convicted last year of breaking ethics laws for steering a separate contract of nearly $10 million to Mississippi State University. He was sentenced in November 2009 to three years' probation, six months of electronic home monitoring and a $2,500 fine.
Former deputy chief engineer Sarsfield, who was paid more than $87,000 by Capitol Solutions through the subcontract, pleaded guilty in November to one count of committing an act affecting his personal financial interest. He is scheduled to be sentenced on Sept. 27.