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Homeland Security Watchdog Pulls Reports, Faces More Scrutiny

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In the latest sign of trouble for the Homeland Security Department's inspector general, the watchdog agency removed five oversight reports from its website last week pending an internal review of a possible conflict of interest involving the wife of the office's top official.

The inspector general's office now faces congressional scrutiny after it took down three audit reports and two inspection reports Aug. 20. The Senate Homeland Security committee is looking into the matter, a spokeswoman said, but she declined further comment.

The reports, which were issued in March, April and July, pertain to acquisition programs at the U.S. Customs and Border Protection and the U.S. Coast Guard and Federal Protective Service contracts.

Officials were considering whether to add language to the reports that acknowledged that Madhuri Edwards, the wife of Acting Inspector General Charles K. Edwards, briefly worked for a homeland security office that the watchdog oversees.

That office, which focuses on program accountability and risk management, has access to the watchdog agency's draft reports.

Charles Edwards has been the acting inspector general since February 2011. The inspector general polices waste, fraud and abuse at the Homeland Security Department, the federal government's third largest, with more than 225,000 employees and a 2012 budget of $39.6 billion.

Neither Charles Edwards nor his wife was available for comment.

Agency spokesman William Hillburg wrote in an email statement attributed to Charles Edwards that four of the five reports were found compliant with government auditing standards and would be reposted. A fifth report, which was not specified, is still under review. None of the reports was listed on the agency's website as of yesterday evening.

Edwards' statement added that the reports were temporarily removed "in an abundance of caution." Before Madhuri Edwards applied for the homeland security job, Charles Edwards sought the guidance of unspecified homeland security officials on whether there was a conflict of interest in his wife's potential employment, and he was told there was none, according to the statement.

The department's management office also asked for advice by an ethics counsel, which found no ethical issues with Madhuri Edward's employment.

Hillburg did not respond to questions regarding whether other reports might not be released because it may appear to some that the inspector general lacks independence or what spurred the decision to remove the five audit and inspection reports.

In March, Madhuri Edwards applied for a job as a management and program analyst in the department's program accountability and risk management office, where she went to work in June.

She rejoined the Department of Homeland Security from the Federal Housing Finance Agency, where she worked from January 2011 until June. Before that, she worked for the homeland security inspector general's office and the Transportation Security Administration.

Once officials learned that Madhuri Edwards was on the job, the office decided to remove the reports, which range from roughly March through July. The Homeland Security Department posted the job for a seven-day period from March 21 to 27.

The audits concentrated on the acquisition of U.S. Coast Guard Sentinel Class fast-response cutters and maritime patrol aircraft and a Customs and Border Protection system to track how the agency manages its aviation program. The inspections focused on two contracts with the Federal Protective Service, which guards federal buildings, including one that was over budget and another that involved a contractor's security lapse.

On Aug. 10, less than two months after going to work as an analyst, Madhuri Edwards was assigned for 90 days to the Labor Department's Office of The Chief Financial Officer to work on audit and information technology issues. Chief Financial Officer James L. Taylor was the deputy inspector general for the Homeland Security Department until March 2010, when he moved to the Labor Department.

Madhuri Edwards was transferred because the Labor Department "requested a short-term detailee with experience in audit and IT issues," a Homeland Security Department spokesman said, adding that she was selected because of her experience.

The concern over the possible appearance of a lack of independence is the latest issue facing the troubled watchdog office. A federal grand jury investigation, led by the U.S. Justice Department and the FBI, has probed allegations that agents in a Texas branch office fabricated investigative activity on reports ahead of an internal inspection last fall.

Eight employees, including the top investigator and a deputy, have been placed on administrative leave pending the outcome of the grand jury probe while two other deputies were reassigned to jobs outside of the agency.

News of the investigation and the ensuing transfer of hundreds of corruption and misconduct investigations to other homeland security agencies, first reported by the Center for Investigative Reporting, led to a House Oversight subcommittee hearing earlier this month.

At the hearing, Edwards said his investigators - a total of 219 nationwide - had been overwhelmed by an expanding caseload. But after unloading several hundred investigations to the internal affairs units at U.S. Immigration and Customs Enforcement and Customs and Border Protection, the agency now could handle the burden, he said.

The homeland security inspector general is also a member of the Council of the Inspectors General on Integrity and Ethics, which earlier this year was supposed to begin a Department of Defense-led peer review that has been delayed because of the grand jury probe.

Other federal agencies and departments postponed or scaled back training conferences as the budget belt was tightened and particularly after embarrassing reports of the Government Services Administration lavish spending on an $823,000 event near Las Vegas in 2010.

The inspector general's investigative office, however, spent nearly $500,000 on an "all-hands" training conference in April and May but claimed in a press release that it had spent nearly $140,000 less.

Around the same time, another homeland security inspector general component postponed its all-staff meeting until next fiscal year to allow planners "to better research various training options and venues," according to an internal email obtained through a federal Freedom of Information Act request.

Former Inspector General Richard Skinner, who promoted the acting inspector general to be his deputy, said Edwards should have recused himself once he learned his wife worked for a homeland security agency that was involved in any way with his office's reports.

"This should have never occurred," said Skinner, who retired in 2011. "I'm really disappointed by the turn of events both on the investigative side and now with these audit and inspection reports."