41. NAVINSGEN Concern. In August/September 2008, the hosted a group of senior female Sailors and a few female officers at a Women’s Labor Day Retreat in quarters. The purpose of this 3-day event was to foster exchanges of ideas and information on issues impacting women in the Navy. During the Retreat, expended $1,613 (including $289.50 for the service of alcoholic beverages) on a combination of catered meals in quarters and restaurant meals. The Superintendent approved this event as beneficial to accomplishing the mission of USNA.Arrggghhhhh!!! Diversity is thick as fleas in this IG report. Just go to page 58 for more.
42. ASN(FM&C) Comments and Analysis. There is no evidence of any relationship between the mission of USNA and the hosting of a retreat for a few select senior female service members to discuss issues impacting women in the Navy. There is no evidence that the resolution of women’s issues and fostering diversity falls within the duties of the or that the retreat was an appropriate way of handling these duties. Moreover, a retreat with catered meals and alcohol for the attendees does not appear, based on the information provided, to be reasonably justified as necessary to carry out those functions.
43. VADM Fowler’s Written Comments.Navy Leadership expects the Naval Academy to lead on many issues involving the advancement of women in the officer corps. The Academy has spent significant resources to be the example of how gender relations should be taught and conducted at the Academy and by extension throughout the Navy. Congressional testimony by experts credits our Sexual Assault programs to be the best among America’s universities. The funds in question here were, therefore, expended because they were necessary to carry out part of the Academy’s function to advance women in the officer corps. As one of the in our Navy, my has been very involved with women’s history month, women’s symposia, and women’s policy for many years. is often asked by the Master Chief Petty Officer of the Navy or the Chief of Naval Personnel to attend or lead efforts to improve the mission readiness of women in our Navy.44. NAVINSGEN Conclusion. We commend the and the Naval Academy for their commitment to women’s issues and this novel approach to sorting through them for the benefit of the individuals involved and the Navy; however, we are not convinced that the same result would not be achieved without these expenditures. We view the incurrence of these expenses as simply desirable, not necessary. We agree that retention is an implicit mission of every Navy leader and organization, but believe that it can be pursued without unnecessary entertainment expenses and without service of alcoholic beverages. Therefore, the use of gift funds was not justified.
With the support of CNP and CNO’s special assistant for diversity, my volunteered to hold a in own home over a weekend with who volunteered to pay their own way to the event. There was no lodging cost for this event since opened home on a weekend for them to stay. Most of the attending had disappointments with the Navy, and this group of midshipmen, enlisted, and officers, shared their experiences in a relaxed environment to discuss the issues on their hearts.
The end goal was to encourage females to stay in the Navy and seek senior leadership roles in the Navy. The women left with a renewed sense of engagement. Two went on Individual Augmentation and one is negotiating to stay in the Navy and come to the Naval Academy as Senior Enlisted Leader.
175. DOD and Navy guidance is that NAF funds are to be used exclusively for the general welfare of the beneficiary population of the NAFI, in this case the Brigade of Midshipmen and the active duty population of USNA. NAF funds are not authorized to be used for “programs and initiatives that support the overall mission of the Naval Academy,” as the Superintendent asserted [after the fact] in his NAF policy memorandum of February 2009. That assertion is born of the misperception that DOD and Navy guidance on such expenditures does not apply to USNA. Recruiting is an authorized function of USNA and integral to its mission, but it is not something that can be categorized as being for the general welfare of the Brigade of Midshipmen and the active duty population of USNA. Therefore, NAF funds may not be spent on recruiting.While I am at it, being that all the sports obsessed football-uber-alles guys are running up and down the blogosphere with foam-flecked emotional diatribes that Fowler's problems had nothing to do with football .... I have decided to return fire.
176. While the underlying rationale for the Destiny contract was to provide products that would improve recruiting of minorities in order to meet CNO diversity goals, there is a NAF connection in that one of the Destiny products was also a replacement video for the one being shown at the Visitor’s Center, a NAF operation. Therefore, NAF funds reasonably could be expended for that video, but not for other video products exclusively classified as recruiting tools, such as the TV spots. To the extent that NAF funds were expended for these recruiting products, they were misspent, in violation of DOD and Navy NAF policy. The amount of NAF funds expended on the project overall was $3,694,952; however, we did not attempt to determine what portion of that total represented the amount misspent, as that would require an extensive cost-accounting audit of the contract.
Improper Advance Payments
177. Mr. Parsons and had no authority to pay Destiny more than $1 million in advance of the execution of a contract between the Government and Destiny for video production services. Doing so put the Government at risk and without written contractual recourse, should Destiny have failed to deliver. Per 31 USC § 1501, the recording of a Government obligation requires a valid contract. Likewise, disbursements to vendors require contracts, invoices, and certifications, and they are not made unless justified by those underlying documentary requirements. In this case, Mr. Parsons simply ordered up the payments via e-mail, and made the payments, because Mr. Parsons told him to and because he knew they were in support of something that was a very high priority with the Superintendent. By making these improper payments, they violated 31 USC § 1501, because there was no valid contract to obligate the Government. As well, they violated the basic obligation of public service in that they failed to “protect and conserve Federal property [NAF funds]” and misused those funds “for other than authorized activities.” [5 CFR § 2635.101(b)(9)]
Unauthorized Commitments
178. Allowing Destiny to come aboard USNA and film for two weeks without benefit of a valid contract created an unauthorized commitment, which is prohibited by DOD and Navy NAF contracting regulations and by the Standards of Ethical Conduct [5 CFR § 2635.101(b)(6)]. Resolution of such violations requires issuance of a valid contract, if justified by a ratification process. In this instance, a contract was issued, but without benefit of having been justified by a formal ratification process. Again, as with the advance payments, the Government was placed at risk, with no written contractual recourse. As well, there is some question as to whether the Government entered into a “valid contract” with Destiny, as no person authorized to bind the Government contractually in the amount of the contract ever signed an agreement with Destiny.
179. When Mr. Parsons negotiated a $980,000 addition to the Destiny contract and authorized Destiny to do the work without benefit of a valid contract modification, that, too, was an unauthorized commitment. In this instance, there was no ratification process and no contract modification was ever issued. Yet, when Mr. Parsons sent e-mails directing payments to Destiny, made those payments, too, without benefit of a valid contract modification. These payments were also made in violation of 31 USC § 1501, as no valid contract modification existed to obligate the Government.
Other Contract Shortcomings
180. USNA’s NAF contracting function is a seat-of-the-pants operation, and Mr. Parsons’ and warrants, if they had them, should be revoked. No one will ever know if the cost of the Destiny contract was reasonable, because the “contracting officer” made no effort to make that determination. He signed the contract because Mr. Parsons told him to sign it. He didn’t ensure a legal review, because Mr. Parsons told him the JAG said it was good to go. The contract that was signed by . was a commercial contract, which did not incorporate any standard Government clauses, as DOD and Navy NAF procurement policy require for NAF contracts. At the time he signed the contract, procurement authority was limited to contracts of $25,000 or less. When Mr. Parsons separately negotiated an additional $980,000 of work for Destiny, the contract was never modified to incorporate those requirements, yet also made those payments.
With facts. From the IG report.
First, our buddy from the WaPo, Dan de Vies give a good Executive Summary,
It didn't occur to me until I interviewed a 2010 academy graduate late Tuesday that many of the questionable (or merely questioned) expenses involved football.Here are some of the un-edited bits quoted without commentary - just a small part. Do a search of the report for "football" and you will be flooded. I think this is enough though. If you need more, here it is.
...
Here are a few of the many passages in the report that reference football:
". . . the complainant alleged that senior USNA staff members improperly received large numbers of complimentary tickets to home football games for their personal use . . . "
" . . . At home football games, USNA hosted up to 100 Sailors and Marines, each of whom received an emblematic ball cap, which ranged in price from $9.95 to $15.95 . . . "
" . . . The expenditure of $157,000 to purchase an 18-wheel tractor trailer truck for USNA's football team . . . "
" . . . Annual expenditures of $400,000 or more for USNA sponsored Tailgate events at football bowl games over the past six years . . . "
The academy's defense rests, in part, on the notion that the football program a) is beloved and b) generating considerable revenue.
(Little-known fact: a lot of big football programs lose money.)
Many of the expenses were deemed appropriate by naval investigators, who stopped short of judging whether they were excessive. Others, including many of the transactions involving the off-the-books account, were found to be "extravagant and wasteful."
The midshipman who called me would not speak for attribution, because he remains attached to the academy. He said he and his classmates enjoyed the lavish tailgate parties but came to realize "that a lot of money was being spent on the football team."
He said the Mids were particularly rankled by reports of annual steak dinners for the team, a privilege not shared by the rest of the brigade.
"When people saw extravagant spending for a special group, as opposed to the brigade as a whole, we started asking questions," he said. "We'd like to have steak dinners, too."
129. Given that the NAF Contingency Fund was unauthorized and improper, all of the expenditures of funds deposited to the account were also improper on their face. Further, notwithstanding the arguments of Messrs. Parsons and to the contrary, we do not agree that all of those expenditures legitimately could have been paid with NAF from NABSD’s normal operating accounts. Many would have been classified as misuses of NAF, and others, even if technically justifiable, were extravagant and wasteful. The primary argument against them is they are contrary to DOD and Navy NAF policy established pursuant to 10 USC § 2783 in that they were for the benefit of individuals or groups (e.g., NABSD employees, Deputy for Management and other senior USNA personnel, NAAA employees, football coaches’ wives and families, NAGA members, etc.), rather than for the general benefit of the beneficiary population of NABSD’s mission, the Brigade of Midshipmen and the active duty population of USNA.Who warned you about the dangers of the Diversity Industry and D1 Football OCD? It can cost you more than just your good name.
130. The relationship between the NAAA and USNA makes it difficult to maintain the proper arms-length relationship that is required between a Government entity and a private, non-Federal entity. In the matter of the handling of sponsorship funds raised by NAAA, the overarching Navy guidance on NAF sponsorship funds was ignored. For NABSD to have accepted the NAAA payments as sponsorship funds directly, written agreements, legal reviews, appropriate disclaimers, etc., were required. None of those requirements, however, were met. Therefore, the NAAA payments should have been treated as gifts to the Navy, and given the size of each check, they should have been processed for acceptance by the Undersecretary of the Navy.
131. The impropriety of the NAAA payments was further compounded when their intended purpose, i.e., the offsetting of expenses incurred by NABSD for putting on Midshipmen Tailgates at bowl games, was ignored and they were diverted to the many other uses documented above in the recitation of the facts of this allegation. Add to this a clear violation of the Miscellaneous Receipts statute, which occurred when Government funds in the form of the NAAA payments were deposited in a bank (the NFCU) and spent at the direction of , generally with the knowledge and approval of Mr. Parsons. While we do not question that these individuals always had what they believed were the best interests of the Navy, USNA, and NABSD and its employees in mind, they nonetheless acted in a reckless and irresponsible manner.
Whether Naval Academy Superintendent Vice Adm. Jeffrey L. Fowler, a target of a federal investigation into an improper slush fund, can retire with all three stars on his collar remains to be seen, the Navy's chief spokesman said yesterday.You're welcome.
Fowler is slated to step down in early September, and Secretary of Defense Robert M. Gates is to review his case and "determine grade" of retirement, said Rear Adm. Denny Moynihan, the Navy's top public affairs officer.
UPDATE: You can find Professor Bruce Fleming's latest thoughts via an interview he did at WYPR here.
