Pentagon Watchdog Clears Darpa in Ethics Probe

The Pentagon's far-out research agency is something of a revolving door. Program managers enter; defense consultants and academics leave; and then they come back a few years later. The Pentagon's watchdog has concluded that's completely above board.

Darpa's ethics training 'appropriately mitigated the potential for conflicts-of-interest,' concludes Jacqueline L. Wicecarver, the Pentagon's assistant inspector general, in a report released on Thursday. Its ethics policies are consistent with federal standards, and its employees tend to follow them. In the major test case for conflicts of interest that the inspector general studied, Darpa came out with a clean bill of good-government health.

The case began with a request from a different watchdog, the Project on Government Oversight (POGO). As Danger Room first reported in August 2011, the group prevailed on the Pentagon inspector to take a broad, wide-ranging look at Darpa's contracting process. The initial reason: the discovery that then-Director Regina Dugan owed her family firm, a Darpa contractor, tens of thousands of dollars. (Dugan's spokesman said she recused herself from any dealing with the firm, RedXDefense. Dugan left Darpa last year to take a job with Google.)

But the inspector general didn't look at Dugan's business arrangements in this review. That'll await a separate inquiry. For now, Darpa's process for dealing with conflicts of interest passes official muster.

The report, however, shows the depth of conflicts among Darpa employees. The 40 employees the inspector general selected for ethics review ' the agency employees around 200 people ' filed 53 reports notifying the government of some sort of conflict of interest with supervising agency contractors or grantees. And that was just in a two-year period.

To some degree, it's a function of the limited time researchers work for the agency. 'Darpa recruits and hires individuals to fill specific innovative research needs for limited time periods (generally 3 to 6 years), then the employee returns to private industry,' the inspector general notes. Darpa's Information Innovation Office, for instance, hired a conspicuous number of veterans of defense giant BAE and a subsidiary called AlphaTech, which reaped contracts from the agency. But 'we found no indication of bias in contract award,' Wicecarver wrote.

The report doesn't mollify the good-government group. 'POGO is disappointed with the report's findings because nearly all agencies have ethics training and standards that meet or exceed the standards set out in federal laws and regulations,' says general counsel Scott Amey. 'Many agencies err on the side of caution and prevent senior officials from having financial ties to contractors. Darpa relies mostly on recusals, which doesn't go far enough. This review was long overdue, as is an investigation into former Director Dugan and her relationship with a Darpa contractor.'

Darpa spokesman Eric Mazzacone declined to comment, emailing that the report speaks for itself. At least until the Pentagon's review of Dugan is complete, the agency can return to day-to-day activities like folding proteins and releasing open-source software so you can build your own tank that swims.