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Special Counsel Backs Navy Whistleblower's Claims of Sloppy Inventory Oversight

Case shows "the kind of good-government reforms that can result when whistleblowers see a problem and speak up," Kerner says.

A Navy Department analyst newly installed as head of supplies at the Naval Sea Logistics Center at Port Hueneme, Calif., was right to blow the whistle and reveal an estimated $32 million in poorly tracked equipment inventory, according to the Office of Special Counsel.

In a May 7 letter to President Trump and congressional leaders, Special Counsel Henry Kerner backed investigators at the Navy inspector general’s office who had concluded that the whistleblower—whose name is redacted—was on solid ground in flagging the missing parts and supplies and the Navy’s failure to follow all security procedures for proper warehouse storage.

“A whistleblower exposed the sloppy handling of millions of dollars’ worth of military equipment, along with the mishandling of classified information,” Kerner said in releasing his letter. “This case resulted in new polices to ensure more accountability, demonstrating the kind of good-government reforms that can result when whistleblowers see a problem and speak up.”

OSC had reviewed an April 17 report to the acting Navy Secretary Sean Stackley following a probe triggered by the whistleblower’s complaint to OSC in 2016.

He alleged that Port Hueneme warehouse employees failed to properly maintain and record inventory over a number of years and that classified inventory items were not identified and stored in a secure manner in accordance with Defense Department and Navy regulations, the OSC said. The Navy IG substantiated the majority of the allegations after an inventory of 402 items at the Navy’s Surface Warfare Center, of which 26 were found to have been stored unsafely.

In addition, “the complainant's supervisory chain of command failed to take appropriate action when told of significant amounts of unaccounted for” operations supplies and materials, investigators said.

Only one allegation was not fully substantiated, because “there was no data quantifying the impact …unfilled requests had on Navy ships’ readiness."

Though the whistleblower, on reading a draft report, challenged the accuracy of one portion, the OSC concluded that overall the IG’s conclusions were proper.

After the disclosure, the OSC noted, the Naval Sea Logistics Center took control of two of the Port Hueneme warehouses in 2016, and “the number of unaccounted-for line items began to decrease significantly, indicating that its inventory oversight has become effective.” By November 2017, a new inventory showed that records and been updated to account for all items, in part because the center hired additional employees and contracted out for support.