Report: Ex-FEMA official will plead guilty in Gallup conflict-of-interest case

A former human resources officer at the Federal Emergency Management Agency is reportedly pleading guilty to conflict of interest charges filed by federal prosecutors on Jan. 2. as part of a larger case involving alleged government contract overcharging by the Gallup Organization.

As reported by NBC News investigative reporter Michael Isikoff, Timothy Cannon, director of FEMA’s Human Capital Division from 2007 to 2009, plans to plead guilty to one felony charge for “knowingly and willfully” participating in the award of contracts to Gallup while arranging to accept a $175,000-a-year job with the polling and research firm.

The attorney for Cannon, a former Army officer, said his client accepts responsibility for his actions. The complaint included email exchanges from 2007 and 2008 in which Gallup discussed what became a $6 million contract to poll FEMA employees on training issues as part of the agency’s BEST Workforce Initiative. The exchanges included references to Cannon interviewing for a job with Gallup. An offer was eventually made but then withdrawn over ethics concerns, NBC News reported.

Gallup Vice President for Law and Associate Counsel William Kruse said in a statement on Tuesday, “The Department of Justice’s previously filed civil case against Gallup was based on the false allegations of a former disgruntled employee. I am confident that there were no illegal actions taken by Gallup staff on government contracts or any other contract for that matter. In addition, last week’s criminal filing was not against Gallup, but rather DoJ’s allegations against a former FEMA employee. As such, there is nothing Gallup can comment on in regards to this development.”

A FEMA spokesman referred queries to Justice.

The larger case began in 2009 when a disgruntled ex-Gallup employee named Michael Lindley filed a whistleblower suit accusing the company of violating the False Claims Act by making inaccurate claims for payment under contracts with the U.S. Mint, the State Department and other agencies. In August 2012, the Justice Department joined the suit.

According to the whistleblower’s complaint, Gallup gave the government inflated estimates of the number of hours that it would take to perform its services, even though it had separate and lower internal estimates of the requirements.

“Contractors must understand that it is unlawful to use inflated estimates to obtain higher contract prices,” said Stuart Delery, acting assistant attorney general for Justice’s Civil Division, in a release. “The decision to join this civil lawsuit underscores the commitment of the Department of Justice to recover federal funds that are unlawfully claimed.”

Neil Gordon, an investigator for the nonprofit Project on Government Oversight, noted in a recent blog that the ongoing investigation could target current and former employees as well as the company itself. “The civil fraud case blames lax training and weak managerial oversight at Gallup for the alleged overbilling,” he wrote. “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.”