oversight

Records related to US Navy Inspector General (OIG) investigations into senior misconduct at Navy, 2012-2013

Published by the Office of the Naval Inspector General on 2015-09-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

Description of document:                 Records related to US Navy Inspector General (OIG)
                                         investigations into senior misconduct at Navy, 2012-2013

Requested date:                          30-January-2014

Release date:                            21-April-2014
Release date:                            11-June-2014

Posted date:                             12-May-2014
Update posted date:                      29-September-2015

Note:                                    Material released 11-June-2014 starts PDF page 74

Source of document:                      Freedom of Information Act Request
                                         Department of the Navy
                                         Office of the Naval Inspector General
                                         ATTN: Legal Office FOIA Officer
                                         1254 9th Street, S.E.
                                         Building 172
                                         Washington Navy Yard, DC 20374-5006




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                         DEPARTMENT OF THE NAVY
                           NAVAL INSPECTOR GENERAL
                               1254 9TH STREET SE
                       WASHINGTON NAVY YARD DC 20374-5006
                                                            IN REPLY REFER TO:
                                                            5720/2014 - 000894
                                                            Ser OOKl/040 1
                                                            21 Apr 14




This is an interim response to your January 30, 2014, Freedom of
Information Act (FOIA) request for a copy of "IG investigations
into senior misconduct at Navy since Oct 1, 2012," as modified
by your email on April 17, 2014. We have identified six
investigations that respond to your inquiry.

Your request has been processed in accordance with the FOIA and
the Privacy Act (PA) . Rather than waiting until all the reports
have been reviewed for redaction in accordance with the FOIA we
wil l provide copies as we process them. Potential fees
associated with this response have been waived.

The redactions made in the reports are based on FOIA Exemptions
(b) (6 ) and (b) (7) (c) . FOIA Exemption (b) (7) (c) authorizes the
Government to withhold names and other personal information
contained in records compiled for investigatory or law
enforcement purposes, which, if released, could be considered an
unwarranted invasion of personal privacy.       FOIA Exemption (b) (6)
protects from disclosure material from personnel, medical or
similar f i les, the disclosure of which would also constitute an
unwarranted invasion of privacy.

Since your request has been denied in part, you are advised of
your right to appeal this determination in writing to:

                        Department of the Navy
                   Office of the General Counsel
                  ATTN:   FOIA Appeals - Room 4E635
                          1000 Navy Pentagon
                     Washington, DC 20350-1000
                                                 5720/2014-000894
                                                 Ser OOKl/0401
                                                 21 Apr 14

To be considered, any appeal you may wish to submit must be
postmarked within 60 days from the date of this letter. The
enclosed copy of this letter should be attached, along with a
statement explaining why your appeal should be granted.  It is
recommended that the letter of appeal and the envelope both bear
the notation, "Freedom of Information Act Appeal."


Two of the responsive reports, 201103025 and 201203467 are
posted on the Naval Inspector's General Website and can be found
at: http://www.secnav.navy.mil/ig/Pages/FOIA/ReadingRoom.aspx .
Report of Investigation 201202138 is enclosed with this letter.

If you have any questions concerning this matter, my assistant,
Ms. Pat Chase-Ramsey, is familiar with your request and may be
of assistance. She may be reached at (202) 433-2222.




                         /~~·~'----
                             Mark A. O'Brien
                             Assistant Counsel

Enclosures:   (1) NAVINSGEN ROI 201202138
              (2) Copy of this Letter




                                 2
Enclosure (1)
   NAVAL INSPECTOR GENERAL


    REPORT OF INVESTIGATION
Subj: SENIOR OFFICIAL CASES: 201202138 ALLEGING VIOLAnON
      OF JOINT TRAVEL REGULAnONS BY RADM MARK F. HEINRICH,
      CAPT (RDML.SELECT) DAVID R. PIMPO AND .
      CAPT (RDML SELECT) DONALD L. SINGLETON; 201204067
      ALLEGING RADM HEINRICH IMPROPERLY SOLICITED AND
      RECEIVED MONIES FROM AN OUTSIDE SOURCE; AND
      201300498 ALLEGING RADM HEINRICH MADE FALSE OFFICIAL
      STATEMENTS PURSUANT TO AN OFFICIAL REQUEST
                               17 June 2013




               •
_'Y
  • WISECUP
VADM,USN


~~            reports are internal memoranda and constitute_p_rjy.llegect-
lnformatlon ~leasable outside DON e)!cept.witflspeciflc
approval of NAVINSGEN. Al            _   .    urces outside the orlglnal
distribution for NAVl'!§GEN-rep6it$, extrac&-there-f.ron:at or related
correspon~_ence-shllf be referred to NAVINSGEN for coordliilltiotHand
clearance. (SECNAVINST 5430.576)
                       FOR OFFICIAL USE ONLY
                 Off ice of the Naval Inspector General

         Case Numbers:      201202138, 201204067, and 201300498

                          Report of Investigation

                                  17 June 2013

Subj:   SENIOR OFFICIAL CASES: 201202138 .ALLEGING VIOLATION OF
        JOINT TRAVEL REGULATIONS BY RADM MARK F. HEINRICH,
        CAPT {RDML SELECT) DAVID R. PIMPO AND CAPT (RDML SELECT)
        DONALD L. SINGLETON; 201204067 .ALLEGING RADM HEINRICH
        IMPROPERLY SOLICITED AND RECEIVED MONIES FROM AN OUTSIDE
        SOURCE; AND 201300498 .ALLEGING RADM HEINRICH MADE FALSE
        OFFICIAL STATEMENTS PURSUANT TO AN OFFICIAL REQUEST

                                      *****
                            Preliminary Statement

1. On 29 June 2012, the Naval Inspector General {NAVINSGEN)
received an anonymous complaint that RADM Mark F. Heinrich, SC,
USN, Commander, Naval Supply Systems Command (NAVSUP) and Chief
of the Supply Corps, abused his position and wasted government
resources in conjunction with his official travel. The
complainant identified five Temporary Duty Travel (TDY) trips
that RADM Heinrich made to various destinations in April-June
2012 and provided detailed information and questions about the
necessity for each trip. On one trip to the United Kingdom
{UK), RADM Heinrich was accompanied by CAPT (RDML Select) David
R. Pimpo, SC, USN, and CAPT (RDML Select) Donald L. Singleton,
SC, USN. At the time they traveled to UK, CAPT Pimpo was the
NAVSUP Assistant Commander for Supply Operations and Logistics
and CAPT Singleton was the NAVSUP Chief of Staff.

2. According to the complainant, the trip to UK was more about
three very close friends celebrating the recent selections of
CAPT Pimpo and CAPT Singleton for promotion to Flag Rank than
conducting official business with NAVSUP's Royal Navy (RN)
counterparts in the UK. Regarding the other four trips
identified in the complaint, trips RADM Heinrich made without
the other two officers, the complainant stated that each was its
own example of RADM Heinrich's tendency to abuse his official
travel for purely personal reasons. Further, the complainant
stated that this three month "snapshot" was typical of all the

                                J!l'6!l OPP%e:!Afl GSB 01ftl!'
 Bo xwt :i::elease otttside of IS cha:tmels withoat the appx:oval of the Naval 16.
other official travel RADM Heinrich completed since assuming
command at NAVSUP.  (201202138)

 3. The complainant also alleg~d that RADM Heinrich improperly
 influenced the officer assigmnent process for his formerbl-~7c
b6b7c                        • SC, USN, (July b8bl"O - June •Wi>
 and that he approved her transfer to a •non-existent billet in
b6b7c     state of Texas.• The complainant stated that it was
 well known that D8 b7c       intended to resign from the Navy
 after she completed her next tour of duty but RADM Heinrich
 arranged for her to go to an assignment at her preferred
 separation location as a favor.   (201202138)

4. Subsequent to the original travel and officer detailing
complaint, NAVINSGEN received two more anonymous complaints that
raised additional allegations against RADM Heinrich and another
allegation against CAPT Pimpo. On 27 November 2012, it was
alleged that RADM Heinrich solicited and received funds from the
•non-prof it San Diego Supply Corps Association . . . to pay out
of pocket expenses for his Command and military social events at
his personal residence.• CAPT Pimpo was the President of the
association identified by the complainant. He was alleged to
have been complicit in providing association funds to
RADM Heinrich. (201204067)

s.  On 1 February 2013, it was alleged that RADM Heinrich
•intentionally [submitted] a false and misleading justifica~ion
to SECNAV for approval to frock two Navy Supply Corps Officers
. . . under his command . . . . • Also, on 1 February 2013, DoD
IG referred a fourth anonymous complaint dated 15 November 2012,
to NAVINSGEN for information. This fourth complaint alleged
that RADM Heinrich abused his position and •bypassed the ' CNO-
directed Navy Command Board process in order to personally
approve two [unqualified] officers for assignment to Command
. . . . • The complainant stated that RADM Heinrich's approval
of unqualified officers to go to command positions was an •act
of favoritism• and •unfair to other officers who were not
selected• for command by the selection board process.
(201300498)

6.   We formed the following .allegation.a for investigation:

Allegation 11: That RADM Heinrich, CAPT Singleton, and
CAPT Pimpo, violated various provisions of the Joint Federal


 ~   nnL x:elease outside o! i;e cbannels without the approwal of the Raval l'.8.
                                         2
Travel Regulations, Volume 1, Uniformed Service Members {JFTR) 1
related to their official travel to the UK on 18-25 April 2012.

Conclusion:    The allegation is substantiated.

Allegation #2: That RADM Heinrich violated various provisions
of the JFTR related to his official travel to the University of
Kansas (KU) on 26-29 April 2012.

Conclusion:    The allegation is substantiated.

Allegation #3: That RADM Heinrich improperly accepted a gift
from a prohibited source in violation of 5 C.F.R. § 2635.202,
Standards of Ethical Conduct for Employees of the Executive
Branch, Subpart B, Gifts from Outside Sources.

Conclusion:    The allegation is substantiated.

Allegation #4: That RADM Heinrich improperly used a
subordinate's official time in. violation of s C.F.R. § 2635.705,
Standards of Ethical Conduct for Employees of the Executive
Branch, Subpart G, Misuse of Position.·

Conclusion:    The allegation is substantiated.

Allegation #5: That RADM Heinrich violated various provisions
of the JFTR related to his official travel to Philadelphia, PA,
and Dallas, TX, on 1-5 May 2012.

Conclusion:    The allegation is substantiated.

Allegation #6: That RADM Heinrich violated various provisions
of the JFTR related to his official travel to Norfolk, VA and
Washington, DC, on 6-13 May 2012 and failed to document his use
of annual leave during the same period.

Conclusion:    The allegation is substantiated.

Allegation #7: That RADM Heinrich violated various provisions
of the JFTR related to his official travel to Washington, DC and
Richmond, VA, on 30 May - 3 June 2012 and failed to document his
use of annual leave during the same period.

Conclusion:    The allegation is substantiated.


                              PG& 9PPEe:EAll USB 8lftlY
 Do not release outside of ::CG ebmnxels without the appzoval of tlxe 1faval   l'.('J.
                                         3
Allegation 18: That RADM Heinrich violated various provisions
of the JFl'R related to his official travel to Newport, RI, on
7-12 June 2012.

Concluaion:      The allegation is substantiated.

Allegation 19: That RADM Heinrich· failed to act imparti.a 1ly
with respect to the detailing of~b7c                   _ sc,
USN, from her assignment as his b6b7c     to her current duty
assignment in Ft Worth, TX, in violation of .s C.F.R. § 2635.101,
Standards of Ethical Conduct for Employees of the Executive      ·
Branch, Subpart A - General Provisions.

Concluaion: The allegation is not substantiated.

Allegation 110: That RADM Heinrich improperly solicited and
received funds from the San Diego Chapter of the Navy Supply
Corps Officers' Foundation in violation of s C.F.R. § 2635.202,
Standards of Ethical Conduct for Employees of the Executive
Branch, Subpart B, Gifts from outside Sources.

Concluaion:      The allegation is not substantiated.

Allegation Ill: That RADM Heinrich made false official
statements when he requested that two officers assigned at
NAVSUP Headquarters be frocked to the grade of Captain in
violation of the Uniform Code of Military Justice (UCMJ),
Article 107 - False Official Statements.

Concluaion:     The allegation is not substantiated.

Allegation 112: That RADM Heinrich failed to act impartially
with respect to the assignment of officers to Supply Corps
Commander ·command Ashore positions in violation of 5 C.F.R.
§ 2635.101, standards of Ethical Conduct for Employees of the
Executive Branch, Subpar~ A - General Provisions.

Concluaion:      The allegation is not substantiated .

                                         •••••
7.  To address these allegations, the report that follows is
divided into five major subsections:



 Bo   not release onteide of   ~9   che:nnele with°'2t t!te approval ef the Raval I9.
                                             4
   a. Official Travel will add:ress the allegations made about
      RADM Heinrich's use of official travel. A total of six
      periods of TDY are examined. Under this subsection, we
      also examine whether or not CAPT .Pimpo and CAPT Singleton
      violated travel regulations when they accompanied
      RADM Heinrich to the UK.

   b. Detailing of •b7c         will examine whether or not
      RADM Heinrich's actions in support of a follow-on
      assignment for his former b8b'1e    were proper.

   c. Supply Corps Foundation Fundin9 will examine whether or not
      RADM Heinrich improperly solicited or received funds from
      the San Diego Chapter of the Navy Supply Corps Foundation.

   d. Frocking of Subordinates examines RADM Heinrich's actions
     · related to .the frocking of two subordinate officers.

   e. Commander Command Ashore Assi9t;11Dents will examine whether
      or not RADM Heinrich abused his position and placed two
      unqualified officers into command positions.

                                          *****
                                   Official Travel

                                       Background

8. _RADM Heinrich became Commander, NAVSUP and the 46th Chief of
Supply Corps on July 22, 2011. Before reporting to his current
conunand assignment, he served as Commander, NAVSUP Global
Logistics Support (GLS) headquartered in San Diego, CA.

9. CAPT Pimpo is Commander, Defense Logistics Agency (DLA) Land
and Maritime, Columbus, OH. He assumed command of DLA Land and
Maritime on 3 July 2012. Before reporting to his current ·
assignment, CAPT Pimpo served at NAVSUP as RADM Heinrich's
Assistant Conunander, Supply Operations and Logistics Policy from
July 2011 until June 2012. Prior to reporting to NAVSUP
Headquarters, CAPT Pimpo was Commanding Officer, Fleet Logistics
Center (FLC), San Diego. While in command there, he reported to
RADM Heinrich while RADM Heinrich was Commander, NAVSUP GLS.

10. CAPT Singleton is assigned to Commander, U.S. Pacific Fleet
(COMPACFLT) . He ass~med duties as COMPACFLT Deputy Chief of

 f)o   not rel:eaae oataide of :EB el!enBele wi:~aav.~   ~Ii• affli'Cil..al Cilf   tm ;ai..,•aJ   :IQ
                                            5
·Staff for Logistics, Fleet Supply and Ordnance in June 2012.
 Before reporting to COMPACFLT, CAPT Singleton serv~d at NAVSUP
 as RADM Heinrich's Chief of Staff from September 2011 until May
 2012. Prior to reporting to NAVSUP Headquarters, CAPT Singleton
 was Commanding Officer, FLC, Norfolk. While in command there,
 he also reported to RADM H~inrich while RADM Heinrich was
 Commander, NAVSUP GLS in San Diego.

11. The complainant alleged that there was ~an extensive
perception by many" that RADM Heinrich used his official ·
position for his own personal gain and that of his spouse. The
complainant further alleged that RADM Heinrich travels ~for most
of every calendar month and is only at NAVSUP for approximately
2-3 business days per month." The complainant stated that
RADM Heinrich frequently arranged his official travel to include
weekends and thereby enjoyed two days off at.government expense.

 12. NAVINSGEN reviewed Defense Travel System (DTS) records and
found that RADM Heinrich went on official travel 49 times in his
first twelve months in command of NAVSUP. He was away from
NAVSUP headquarters on TDY for.a total of 252 days in that first
twelve-month period. Most of the trips he made were to
Washington, DC, for regularly scheduled meetings at the Pentagon
or to DLA Headquarters at Ft Belvoir, VA. Washington, DC, was
also frequently used as the starting point for many of his
follow-on travel requirements. Washington, DC, area airports,
Washington Dulles International and Ronald Reagan National,
offered more convenient and typically less expensive air fare
for his official travel than could otherwise be arranged for him
flying from and returning to the local airport nearest to NAVSUP
Headquarters, the regional airport in Harrisburg, PA.

 13. For routine trips from NAVSUP to Washington, DC and the
 National Capitoi Region, RADM Heinrich typically rode with his
 Flag Aide in a government vehicle or a rental car as the
 particular trip required. The government vehicle was most often
 used for trips from NAVSUP Headquarters to Washington, DC and
 returning to Mechanicsburg. If, however, Washington, DC, was
 the first stop of a longer trip, a one-way rental was commonly
 used for transport from Mechanicsburg to Washington, DC and the
 rental car would be dropped off at the departure airport. Using
 a rental car in this way avoided having to leave the government
 vehicle at the departure airport.


                              Pell GPPES;EA:D &SB GBLY
  Do not xelease outside of :r<; cb:a:nnels without ttxe appxcival of the Maval :CC!.
                                           6
14. NAVINSGEN examined the general practices of the NAVSUP
front office staff, the Chief of Staff, Flag Aide, Executive
Assistant {EA) and Flag Writer, and the support they provided to
RADM Heinrich in support of his official travel. Based on their
testimony, we learned that most of RADM Heinrich's travel
requests and associated travel claims were entered into DTS by
the Flag Aide. The EA was typically the DTS Approving Official
{AO) and the one who authorized travel requests and approved
travel claims for payment after those documents were entered
into DTS for RADM Heinrich by his Flag Aide. On infrequent
occasions when the EA was not available to perform AO duties,
the Chief of Staff or another official at NAVSUP with DTS .
administrator privileges would approve travel documents in DTS.
Additionally, on those occasions that RADM Heinrich combined
leave with his official travel, the Flag Writer was responsible
for entering RADM Heinrich's electronic leave requests in the
Navy Standard Integrated Personnel System {NSIPS) on his behalf.
While the JFTR permits a traveler to take leave from a TDY
location, there is no electronic interface between DTS and
NSIPS. For this reason, separate administrative action must be
taken by the traveler, or someone designated ·by the traveler, to
enter their leave taken in conjunction with TDY into NSIPS in
order for it to be properly documented and charged to the
traveler's personal leave account.

15. Regarding DTS support provided to RADM Heinrich, while it
is permissible for someone other than the traveler to enter a
travel request or travel voucher into DTS for the traveler,. the
individual doing the data entry or •T-entering• 1 documents on the
traveler's behalf mus~ted in writing. NAVINSGEN
found no record that ~or anyone else at NAVSUP was
designated in writing to T-enter travel requests or travel
vouchers into DTS for RADM Heinrich.


  1  According to the Defense Travel Management Office website, a Non-DTS Bntry
  Agent is a military member, DoD employee, or contractor designated by local
  command authority to input and digitally sign trip requests and claims for
· reimbursement in DTS on behalf of travelers who do not have reasonable access
  to DTS. A Non-DTS Bntry Agent must be appointed in writing.
  Responsibilities include: (1) Receive a manually prepared and signed paper
  travel voucher (DD Form 1351-2) with all receipts from the traveler; (2) Fax
  electronically or upload the traveler's manually prepared and signed DD Form
  1351-2 and all required receipts into DTS; and (3) Sign vouchers on behalf of
  the traveler by selecting the •T-entered• stamp instead of the 'signed• stamp
  from the document status list.


  Bo not release ontside .of   ie   channels withont the appxoual of the Raval   ~s .
                                            7
16. Moreover, witness testimony established that it was conunon
practice for RADM Heinrich to allow his Flag Aides to T-enter
his travel voucher and then upload it into DTS without him first
reviewing or signing his DD Form 1351-2 travel voucher claim
form. Many of the vouchers we examined during our records
review appeared to have been auto-penned with RADM Heinrich's
signature.       c        testified about her role in processing
RADM Heinrich's travel claims and she provided a written
statement about her use of the auto-pen.       c        stated
that after a voucher for RADM Heinrich's travel had been
created, ·"the front office staff had [RADM Heinrich's]
permission to auto-pen [his claims].•

17. RADM Heinrich testified that he did not regularly review or
sign his travel claims prepared by his Flag Aides. Although he
required an initial probationary period during which time he
reviewed his travel claims in detail with his Flag Aide·s , as
soon as the Flag Aides demonstrated their proficiency completing
his travel claims to his satisfaction, RADM Heinrich allowed the
Flag                       and her relief,
                     cla i ms in DTS without his personal review.

18 . On 2 9 February 2o12,                     , who had been the
NAVSUP Enterprise _ ti c                    retired unexpectedly.
              had 26 years             working government travel
programs . Acco r din g to                   , NAVSUP' s Work Force
Management     c                                  inunediate
supervisor until she retired,                had been the primary
travel reviewer and approver looking at RADM Heinrich ' s travel
requests and claim vouchers.                   unexpected
departure left the NAVSUP Travel Management Office without a
fully qualified and experienced employee to take over her travel
program duties. Temporarily,                   positional duties
were accomplished by other NAVSUP employees who had little or no
experience reviewing DTS vouchers.       c         said it took
until November 2012 to hire a pennanent, fully qualified
replacement for        c         The five periods of .
RADM Heinrich's official travel that were questioned by the
complainant occurred during the transition period · between
    c            retirement in February 2012 and the hiring of a
permanent, fully qualified replacement, in November 2012. This
investigation is focused on these five periods of TOY and a
sixth period of TOY that came to NAVINSGEN's attention during
our review of RADM Heinrich's . official DTS records.


                              POa 0##1C1XL U&B OMLI
 r>o not zelea&e outside ot   ~a   channels wi t hout the appzoval of t he Jfaval !O.
                                           8
                                          *****
            Official Travel to London & lJlt, April 18-25, 2012

19.  Allegation #1: . That RADM Heinrich, CAPT Singleton, and
CAPT Pimpo, violated various provisions of the JFTR related to
their official travel to the UK on 18-25 April 2012.

                                          *****

                       Pindinga of Pact - Allegation 11

20. RADM Heinrich, CAPT Pimpo, and CAPT .Singleton went on
official travel to the UK and met with their RN and Royal Fleet
Auxiliary counterparts and other U.S. and British officials on
19-25 April 2012. For this trip, they were accompanied by their
            2
b6 b7c k2

            Primary Purpose of Travel - Official or Personal

21. RADM Heinrich, CAPT Pimpo and CAPT Singleton's itinerary in
conjunction with. their travel to UK was as follows:

 Day & Date (2012)                   Activity (all times are local)
Wednesday, 18 April           Departed Washington Dulles International
                              Airport @ 2152
Thursday, 19 April            Arrived London Heathrow International
                              Airport @ 1010; attended briefings at
                              British Ministry of Defense i400-1600;
                              hosted dinner with RN counterparts
_Friday, 20 April             Attended briefs ·at U.S. Embassy in London
                              0915-1400; remainder of · day was free
Saturday, 21 April            Free Day                   ~




Sunday, 22 April              Ate lunch at !llllDRIM

Mon~y,      23 April
                              residence; traveled to Bath, UK
                              Visited Defense Equipment & Support, Abby
                                                                                '
                              Wood, Bristol, UK, 0800:-1400; traveled to
                              RN Base (HMS Raleigh), Cornwall, UK



2
   This period of TDY was actually part of a longe~ period of TDY that began
on 15 April 2012 in Washington, DC, and concluded on 29 June 2012 when
RADM Heinrich returned to Mechanicsburg, PA. We focused our attention in
this first allegation on the eight-day period identified by the complainant.


  Be net: releaae emt:eide of :re ehmmele wit:l!O'tlt: t:ae   app:r~ual   ef t::h:e Haual :re.
                                             9
Tuesday, 24 April           Visited various RN training facilities at
                            HMS Raleigh 0830-1500; traveled to HMS
                            Nelson, Portsmouth, UK
Wednesday, 25 ,AJ>ril       Made off ic·i al calls at RN Command
                            Headquarters; toured Naval Base Portsmouth
                            and HMS HURWORTH · (M39) ; visited BAE
                            Systems Shipbuilding; traveled to London
Thursday, 26 April          Departed London Heathrow International
                            Airport @ 0755 and arrived Washington
                            Dulles International Airport @ 1120

22. The complainant a'ileged that RADM Heinrich had "a very
close personal friendship and relationship• · with ·CAPT Pimpo and
CAPT Singleton. The complainant stated that both officers
worked for RADM Heinrich before they were assigned together at
NAVSUP . The complainant also stated that the three subjects'
      were close friends. The complainant further stated:

     Many military and civilian perceive this official trip
     was no more than a taxpayer financed vacation to
     London, England, for six close friends to celebrate
     the recent selections to flag prior to
      [CAPT] Singleton detaching to Hawaii (in May 2012) and
      [CAPT] Pimpo detaching to Columbus · (in June 2012). In
     summary, even though many aspects [of] this trip may
     be "technically legal• (since RADM Heinrich personally
     directed approval for this trip) , would this trip
     stand up. to "The Washington ~ost Test . . . . •

23. RADM Heinrich, CAPT Pimpo, and CAPT Singleton testified
about their personal and professional relationship with each
other . CAPT Pimpo and CAPT Singleton -testified that they both
served under RADM Heinrich in two senior-subordinate
relationships. They also stated that their individual
interactions with RADM Heinrich outside the workplace were
generally limited to command functions. They did not regularly
interact with RADM Heinrich socially either on an individual
basis or as a couple with their - · They did not regularly
eat dinner together, play golf , vacation, or attend family .
functions at each other's home or attend special events, e . g . ,
weddings, for their respective family members. Each officer
viewed the other as a professional acquaintance. They did not
consider themselves to have a "close personal friendship• as the
complainant described.

                            l!!O& o•••c~      va•
                                                OMLY
 Bo not relea11e ~aide ef J:S eiinnnele wS:'eae~e \\he appEM.•l el 101'e IJasr.al •G,
                                         10
24. The complainant further alleged that RADM Heinrich's
predecessor in command at . NAVSUP, b6 b7c             I SC, USN
(Retired), made similar trips to London, •however, they covered
only a few days and without other NAVSUP senior officers.*

 25.                            is a government civilian employee at
NAVSUP Weapon Systems Support (WSS) Conunand in Mechanicsburg ,
 PA. She was previously employed at NAVSUP Headquarters as the
 Protocol Officer starting in 2003 until April 2012.          c
 testified about b6 b7c           travel to the UK. ~he recalled
 that when b6 b7c         traveled to the UK, his ,__ 7c         and
his     I:> c                for Supply Operations and Logistics, . the
 same positions held by CAPT Singleton and CAPT Pimpo
 respectively, joined him on TDY. Spe also recalled that on at
 least one of the trips b6b7c          made to the UK during his tour
as Conunander, NAVSUP, b6 b7c                accompanied him.
11)6 ~c       did not recall if either of the other two officer's
        - may have b6
- - -accompanied     traveled to the UK with either of the 9fficers
                       b7c       on his travel to the UK.

26. Regarding his reason for both CAPT Singleton and CAPT Pimpo
to travel with him to UK, RADM Heinrich testified:

     Lee [Singleton] was always going to go because the
     [UK] · _. ,           , worked for him on the Joint
     Staff. Lee headed up the International Division on
     the Joint Staff, and b6 b7c worked for him. So Lee was
     always going to go because, frankly, you know, that's
     part of the strategic relationship, and Lee was a Flag
     Select .

     David [Pimpo], I think, was probably the second
     addition, and .when David went, I think I took the Aide
     off, but David being a Flag Select, having the British
     Naval Officers assigned to his staff , Cllllllll
      - c k2         [RN, ] . . . I think that was a· second -
     - that was sort of a -- not a second thought, but it
     was the second decision to be made.

27 . CAPT Singleton testified that RADM Heinrich agreed to add
CAPT Pimpo to the travel party for the UK trip as a result of
his recommendation that the NAVSUP Operations Officer· accompany
them. CAPT Singleton stated:


                            POK OPP%C:lfai USB OJlriT
 Du not 1elease outside of !tt channels w±Uwat the appzoval u! th~ Mavai !!8 .
                                       11
     As the Chief of Staff, I was thinking, you know,  •r
     need to grow the officer as well as support the
     cotmnand. And having the Operations Officer understand
     more about our ties with, you know, our biggest ally,
     then, you know, perhaps he should go as well.• So I
     suggested it to Admiral He.inrich that David Pimpo go ,
     and he agreed.

     As a consequence to  tha~ , I said, •And maybe since I'm
      going, and David's going, we should take
                     off of the t .rip. • And so, we pulled
    · her off and put him on .

28. About his justification for going on official travel to UK,
CAPT Pimpo said it was ultimately •Admiral Heinrich's ca11• but
he went •because as the Operations Officer many of the things
that we were going to . . . [look] at were under my purview as
the Operations Officer.•

29. We questioned the subjects and               about whether
or not the trip to UK was initiated by RADM Heinrich or in
response to an invitation from some UK official.
testified that the trip was in response to an invitation from
RAdml Steel and that •there [had] been a long-standing
relationship between the Logistics Branch of the RN and the
Supply Corps of the U.S. Navy.• He further testified:

     And with visits conducted, I think historically every
     year with the 1~ b7c     , b6 b7c       · - - he went
     back to the UK. ·

     And the UK had in my time conducted about three or
     four visits to NAVSUP, or on the invitation of NAVSUP
     to attend conferences, and including
     6b7c

     And so this was sort of the opportunity that we found
     in the program to get RADM Heinrich across to the UK,
     as a sort of the exchange that we had of visit    ·
     programs back and forth .

30. RADM· Heinrich and CAPT Singleton said their trip had been
at the invitation of the RN . . CAPT Pimpo testified that the trip
was •a professional [exchange] to talk to our counterparts about
several issues that we had been working jointly.• CAPT Pimpo

 i;,o not xelea se oatside of !8 channels withoat the appxoval of the Mavai !8.
                                      12
said that the trip to UK was made in response to an invitation
from the RN but he did not recall who specifically in the RN
made the invitation. He said the projects of interest to NAVSUP
and his reasons for going.on the trip were related to:

      the Joint Strike Fig~ter . . . a joint venture . . .
      with [the RN] . . . their foray into littoral combat
      ship type . . . for us to be able to . . . review how
      they do their training, how they train their cooks,
      and . . . to observe a new mock-up that they have for
      doing underway replenishments . .

                 Use or non-use of Contract Air Fare

31~  RADM Heinrich, CAPT Pimpo and CAPT Singleton selected the
same non-contract fare for their flight to the UK. Contact air
fare was available at the time their respective flight
reservations were made and, in accordance with the JFTR,
contract air fare was required to be used if it was available
and met mission requirements. All three subjects testified that
they did not recall that they selected a non-contract air fare
or that the cost of their air fare to the UK was more expensive
than an available contract fare. RADM Heinrich's air fare cost
an additional $194; CAPT Pimpo's and CAPT Singleton's fares were
an additional $337.50 for each traveler.

32. RADM Heinrich's travel claim contained the following
justification statement as the reason why he selected a non-
contract air fare from Washington, DC, to London: ~ooes not
meet mission requirements. Mission essential to meet official
meeting timeline. Last meeting of the day on 4/18 ends at 1930
in Washington, [DC]."

33. RADM Heinrich testified about his last meeting on 18 April.
He attended a Navy Federal Credit Union (NFCU) Annual Meeting at
the NFCU building in Vienna, VA. The meeting was scheduled to
end at 1900. · RADM Heinrich testified that he was a voluntary
member of the NFCU Board of Directors along with several other
Navy Flag Officers. He stated that his attendance at the Annual
Meeting was not an official duty. His last official meeting was
earlier that same day in the Pentagon and it concluded_ at 1630
on the day of departure according to his calendar.

34. CAPT Singleton's travel claim contained the same
justification statement that appeared in RADM Heinrich's travel
                                 P8R 9PPEeZA:lli 9BB 9l&J¥
 Be :aee release ettesic!le ef :Ee emtftr.tell!I with0ttt the approval of tire Haoal :i::c;.
                                             13
claim. CAPT Singleton testi.fied that he remained in his office
at NAVSOP headquarters, conducting normal business, until it was
time for him to drive to Washington Dulles International Airport
and join the rest of the travel party. He said it was his
opinion that leaving work earlier in the day simply to make a
contract flight would send the wrong signal to NAVSOP co-workers
and staff. CAPT Singleton testified:

     If I could do what I'm supposed to do, do my job, go
     to the meetings, take care of my team, and then head
     to the airport after work, I would consider that to be
     a slightly better use of time.

35. CAPT Pimpo's travel claim contained a one-word
justification stat~ment regarding his .use of non-contract fare
for the flight to London; it simply stated: "Authorized.a
CAPT Pimpo testified that he remained at NAVSOP headquarters
until it was time for him to drive to Washington Dulles
International Airport and meet his wife who was flying in from
their home in California for the trip to the UK. CAPT Pimpo
also testified that he did not question the flight arrangements
that had been made for him; he said that the "flights were
selected based on what Admiral Heinrich decided he wanted us to
do."

36. NAVINSGEN noted similar discrepancies in the subjects'
justifications for selecting a non-contract return fare from
London back to Washington, DC. RADM Heinrich and CAPT Singleton
had justifications that indicated they were going to a meeting
in the Pentagon at 1300 on the day of arrival. RADM Heinrich
and CAPT Singleton testified that they did not go to a meeting
after they landed at Washington Dulles International Airport.
RADM Heinrich remained at the airport and checked in for the
flight he took later that same day to Kansas City International
Airport. CAPT Singleton returned to Mechanicsburg.

37. The justification statement in CAPT Pimpo's travel claim
regarding his use of a non-contract return flight simply stated
"authorized.a Leave documents obtained by NAVINSGEN showed that
after he landed at Washington Dulles International Airport,
CAPT Pimpo departed on three days leave.




 no not release outsiae of IG chahhels w1eh0Ut the approval or the :saval iG.
                                     14
                              Claims Exceeding Per Diem

38. RADM Heinrich, CAPT Pimpo, and CAPT Singleton were
reimb.u rsed for actual expenses above the maximum rate for
lodging per diem during their first three nights stay in London.
RADM Heinrich and CAPT Singleton claimed and were reimbursed
approximately $404 against a maximum lodging per diem of $319. 3

.39. CAPT Pimpo claimed and was reimbursed a slightly higher
actual expense amount for his lodging per diem during the first
three nights stay in London; he received $425.65 against a
maximum lodging per diem of $319. CAPT Pimpo's slightly higher
amount was calculat~d in error when the total charge for his
three day hotel bill, that included the cost of laundry services
billed to his hotel room, was simply. divided by three.

40. The subjects did not recall having stayed at a hotel that
cost more than the maximum lodging per diem. They testified
that they relied upon                  to reserve rooms within per
diem limits. b6 b7c     _    tef:Jtified that he made all their
acconunodation and transportation arrangements and he did not
realize before or after . the TDY that any of their lodging cost
more than the maximum lodging per diem.

41. DTS records and testimony from the various witnesses showed
that RADM Heinrich, CAPT Pimpo, and CAPT Singleton paid for all
the travel costs associated with their respective spouse.
Moreover, the subjects did not claim any actual expenses
attributable to their spouse when they submitted their
respective · travel claims for reimbursement.

 42. About the travel costs incurred by subjects that were above
 maximum per . diem limits and the higher cost of air fare incurred
 when the subjects did not use t he available contract air fare,
 • • • • • • • • • • • • • • • • • , RADM Heinrich's  from
b6 b7c       until b6 b7c      testified:


3
   Per JFl'R, Paragraph 04129, the maximum lodging per diem in a foreign
country includes the cost of the lodging (room rate) and any associated
lodging tax; these costs are not separately claimed expenses. By comparison,
maximum lodging ' per diem in the o.s. or a ·o.s. Territory is the maximum
permissible room rate alone for the location visited. · Any lodging taxes paid
by the traveler pursuant to State or local government taxes are in addition
to the maximum lodging per diem rate in a U.S. or a u.s Territory and are,
therefore, separately claimed non-mileage expenses.


    1'0   not 1alaasa outside of :CC! channels without the approval of the Naval IG .
                                            15
       I do not remember these excessive charges. Normally,
       DTS will automatically signal for such an error
                  ting action to be taken. our .     c       ,. .,,.-,,.~1'.,,..1..'_,c,,...·
     liillllD'ir&sr-::, upon return from this trip, entered all
       receipts into DTS. Upon her data entry and ·
       submission, a DTS analyst would then review, comment
       and work out any anomalies or errors with the person
       filing the claim. The next step is that the claim
       would come to me for my review. To the best of my
       knowledge, upon my review, DTS did not signal any
       errors. This led me to believe that the Flag [Aide's]
       work and DTS analysts had provided an accurate claim
       and  any        issues had been resolved. When [the
       investig~tor] . showed me a sheet with 17 DTS errors for
       this one claim, my viewing was the first I had seen· on
       these errors; I asked [the investigator] for a
      description of each error as well so that I could
       better answer the questions. No one from our DTS
      organization notified us of the additional charges and
       the claim was ultimately approved.

     In the months prior in planning · this trip,
                  assured me that all hotels identified for
     'IC!l:....=..-..i:=-~~-
     the trip were within per diem limits. Further, I
     believe these three nights are. an anomaly as the other
     UK hotels were within or below per diem per our
     planning. Lastly, I am quite certain these anomalies
     will exist on the other two admiral's (Singleton and
     Pimpo's) claims. Therefore, this would be a
     •systematic• problem and not an intentional. or .
     neglectful act. Again, DTS analysts never approached
     me concerning these errors and my working relationship
     with them was extremely amicable ..

43. Although -              stated he did not recall any line
items related ~nrich 's travel voucher for this
trip having . been flagged by DTS, the flags were present in
the official DTS records we reviewed. These same records
showed     C         was the • who approved RADM Heinrich's
claim for payment.




 DO not release outa1C!e or IG ehannela without the appkova1 or the Raval. ta.
                                      16
  Receipt of Full Meal Rate on Days where Meals were Provided at
                     No-cost to the Traveler

44. Per JFTR, Aniiex G, if a traveler receives two or more meals
in a given day they are not entitled to be reimbursed the full
meal rate for that day. Witness testimony established that some
meals were provided to subjects without cost on <;lays they
received the full meal rate. The itinerary on its own, however,
did not identify a day when more than one meal was provided
without charge to the subjects and their recollection of the
itinerary did not make clear if they received more than one meal
on any given day they claimed and were reimbursed the full meal
rate. Accordingly, we did not identify a meal rate violation
for any of the subjects.

 Emergent Allegation - Misuse of Government Funded Rental Vehicle
                        for Spouse Travel

45. The complainant alleged that           -    was •directed by
RADM Heinrich to break away from the other three officers to
provide b6b7Ci2 programs (i.e., tour guide services) to the three
military blb7ci2 on ~esday and Wednesday, [24-25 April]."

46. On 24 April, the TDY party was in Cornwall. While the
three subjects attended meetings at various RN facilities during
the day, their ti& 6 c were transported in the gove;rnment funded
rental car, without the subjects being present, to the next city
on their itinerary, Portsmouth. The three subjects joined their
      later that evening, having taken separate transportation
provided by the RN to Portsmouth.

47. b8            testified that the only .time he was alone with
the thr
     ~= e=
         e~~~;=~ was on 24 April during-their three-hour car
ride from          to Portsmouth.     c          said that apart
from driving the    c from Cornwall to Portsmouth, he did not
provide or arrange any unique services for them. · .

            Use of Government Travel Credit card (GTCC)

  48 . . RADM Heinrich and CAPT Singleton used their respective GTCC
  to purchase air fare and lodging accommodations in conjunction
  with their travel to the UK as required by the JFTR. CAPT Pimpo
· used his GTCC to purchase his air fare and all but one nights
  lodging accommodations in the UK. On 25 April, CAPT Pimpo used
  a personal credit card by mistake when he paid for his lodging ·



                                · 17
in Portsmouth and his error was documented in the travel voucher
he submitted.

                         Extra Days before or after TDY

49. There were no free days, before or after the TDY, during
which the subjects collected per diem or incurred costs paid by
the government. RADM Heinrich, CAPT Pimpo and CAPT Singleton
arrived in the UK on Thursday morning, .19 April. They went from
the aiz-Port to their hotel, changed clothes, and proceeded to
their initial round of meetings with RN officials at the
Ministry of Defense. That evening RADM Heinrich hosted an
official representation dinner in honor of       c
11111111..111111•, and.six other RN senior officers. 4 ' 5 The
subjects concluded their official duties in the UK on Wednesday
afternoon, . 25 April, in ·Portsmouth and traveled by car back to
London. They departed the UK though London Heathrow
 International Airport the following morning at 0755 and arrived
at Washington Dulles International Airport at 1120 the same day.

                              Accounting for leave

so.  The subjects did not take any leave in conjunction with
their TDY to London and the UK. CAPT Pimpo, however, departed
on leave after he returned to Washington, DC, from London. His
leave was properly deducted from his leave account.

         Other administrative errors noted by the investigation

51. RADM Heinrich did not create or digitally sign his travel
claim in DTS.               created it and then T-entered the
document in DTS on his behalf. The claim was subsequently
reviewed and approved for payment by I  c     - ,.
                    6
RADM Heinrich's BA.
                     0

• '.l'be dinner RADM Heinrich hosted was paid for with Official Representation
Funds (ORF). In accordailce with . Paragraph 7 of ·sECNAVINST 7042 . 7K, the
required .ratio of authorized guests receiving ORF courtesies to U. S.
personnel (which includes the O. S.          ) was met . Part;ies of fewer than
30 persona require a minimum of 20 percent of invitees expected to attend to
be authorized guests • . In this case , there were seven in the o.s. party and
seven in the RN party .
5
     Member of the Most Excellent Order of tli.e British Empire (MBE) .

• DTS is a fully integrated, automated, end-to-end travel management system
that enables DOD travelers to create authorizations and reservations, receive


    Bo not zeleaae outaide of !8 e'bmmela without the appzoval of the !faval !8.
                                         18
52. CAPT Pimpo did not create or digitally sign his trave,l
claim in DTS. CAPT Pimpo testified that he did not travel very
often while assigned at NAVSUP and, therefore, relied upon
              __.,.__~~------ _,_,,......,.., his    c                     , to
enter his travel claim in DTS for him. Although he did not
create or digitally sign his travel claim in DTS, CAPT Pimpo
signed his original DD Form 1352-2 and it was uploaded into DTS
with his required receipts in accordance with JFTR and DTS
Stan~rd Operating Procedures.                     His travel claim moved through
the normal DTS review process.                                approved
CAPT Pimpo's travel claim for payment.

53. CAPT Singleton did not create his travel claim in DTS.
Rather, he relied upon             to enter his travel claim for
him. Afterwards, CAPT Singleton reviewed and digitally signed
his travel claim and it went through the DTS review process.
CAPT Singleton also signed his original DD Form 1352-2 . and it
was uploaded with his required receipts in accordance with JFTR
and DTS Standard Operating Procedures.              approved
CAPT Singleton's travel claim for pa¥ment.

                                           *****

                     .Applicable Standards - lllegation 11

54.   JFTR Chapter 2, Part A: General, states in part:

      U2000 OBLIGATION TO BXBRCISB PRODBNCB IN TRA.VBL

      A. General. A traveler must exercise the same care
      and regard for incurring GOV'T paid expenses as would
      a prudent person travel.ing at personal expense.

55.   JFTR Chapter 2, Part G:            ~TCC     Use, states in part:




approvals, generate travel vouchers, and receive a split disbursement between
their bank account and the Government Travel Charge Card. The traveler can
access DTS via a single web portal available 24 hours a day, seven days a
week . DTS permits duly authorized personnel to input and digitally sign or
T-enter requests and claims on behalf of a traveler who does not have
reasonable access to DTS . In such cases, the traveler manually prepares and
signs their DD Form 1351-2 (claim voucher) and it should be uploaded into DTS
with the required travel expense receipts.

                                  Pea e . .1e1:Mi • • 811L¥
 DQ llQC   lfel.eaae wtiaicie ei IEI eftelmele   wi~t:   t:!se app:roval of the Raval !Cl .
                                             19
      U2500 DoD POLICY

      A. General. It is the general policy of DoD that the
      GTCC be used by DoD personnel to pay for all costs
      incidental to Official business travel, including
      travel advances, lodging, transportation, rental cars,
      meals and other incidental expenses, unless otherwise
      specified_.

      U2515 G'I'CC USB ARD RBSTRICTIONS

      A. General. Charging personal travel expenses is GTCC
      misuse. A DoD traveler who misuses the GTCC is subject
      to administrative and/or disciplinary action.

56.   JFTR Chapter 4, Part A: TDY Travel, states in part:

      U4000 JUSTIFICATION

      1. A TDY assignment may be authorized/approved only
      when necessary for official GOV'T business.

      2. Travel must be planned and scheduled to accomplish
      multiple objectives with minimum non-official .
      disruptions and transportation delays whenever
      possible.

      3. Service procedures (see par. U2020) must be in
      place to evaluate TDY requests to ensure that the:

      a. Purpose is essential official business in the
      GOV'T's interest;

      b. Objective cannot be satisfactorily accomplished
      less expensively by correspondence, teleconferencing,
      web-based communications, or other appropriate means
      (NOTE: This completed consideration must be certified
      in a statement on the order);

      c. Duration is no longer than required to complete the
      official TDY assignment. The traveler is financially·
      responsible for all non-official expenses resulting
      ICW official TDY travel; and



                               :roll Ol':l!:EC::.u.lo V88 QllL¥
 :co not :z:eleaee oatside of :re channele without: the a:pprchal of t:ne Naval :ES.
                                         20
      d. Number of persons assigned is held to the minimum.
      The number of eligible traveler(s) selected for a
      TDY must be based on official necessity and travelers'
      qualifications to best perform the mission. TDY
      assignment must not consider or be based on a
      person/persons who is not authorized to travel at
      GOV'T expense accompanying or joining an eligible
      traveler ICW the official travel....

57.   JFTR Chapter 4, Part B: Per Diem, states in part:

      U4129 TDY LODGING

      A. General

      1. The lodging component of per diem establishes the
      maximum per diem amount the GOV'T will reimburse to
      the traveler for.lodging. It does not limit, in any
      manner, what a lodging facility may charge to a
      traveler.

      2. The amount allowed for lodging is the expense
      actually incurred or the maximum TDY locality lodging
      ceiling, whichever is less.

      3. Lodging reimbursement may not exceed actual lodging
      costs or the applicable maximum amount unless an AEA
      is authorized/approved.

      4. A traveler must adhere to the prudent traveler rule
      for official travel funded by the GOV'T. See par.
      U2010.



      D. Lodging Tax

      3. Foreign Area. Lodging tax in a foreign area is:

      a. Included in the locality per diem lodging ceiling,
      and

      b. Not a reimbursable expense (APP G) when per
      diem/AEA is paid.


 no net: release 01:1tside of IS chamxels without Uie appioval of the mtval :IG.
                                       21
58. JFTR Chapter 4, Part C: Actual Expense Allowance (AEA),
states in part:

      04205 JD'STIPICATION

      ~  AEA may be authorized/approved for travel when the
      per diem rate is insufficient for part, or all, of a
      travel assignment because:

      1. Actual and necessary expenses (especially lodgings)
      exceed the maximum per diem._.

59. JFTR Appendix 0, Temporary Duty (TDY) Travel Allowances,
states in part:

      T4030 GBTTJ:NG THBRB .ARD BACK: (TRANSPORTATION
      ALLOWANCBS)

      B. Commercial Transportation. The AO may, under
      certain conditions, authorize the CTO to arrange other
      than contract city-pair flights - when needed to
      fulfill a documented mission requirement-..

      T4040 LIVING BXPBJISBS (PBR DIBM)

      4. Commercial Lodging Reimbursement

      a. Commercial lodging reimbursement is based on the
      single occupant rate, up to the TDY site or.stopover
      location maximum.

      b .. If only lodgings that cost more than the published
      maximum rate are available, the AO may
      authorize/approve the higher amount

                                            *****
                             Analysis - Allegation #1

60. The complaint questioned whether or not there was an
official basis for approving this trip. The complainant
expressed a belief that the trip was conceived by RADM Heinrich
as an opportunity for close friends, RADM Heinrich, CAPT Pimpo
and CAPT Singleton, to celebrate the recent selection for
promotion to Flag rank for CAPT Pimpo and CAPT Singleton. The

 De Bee release ettea!Ele ef IO eftaB:ftels w!ts'ftel:l:t tlte app:rB"i-•1 ef tile Neva:l .IO.
                                              22
trip was not, according to the complainant, necessary to
accomplish legitimate government business or intended to provide
a real opportunity for the subjects to have meaningful
engagement with their counterparts in the RN.

61. The subjects denied having anything more than a
professional association with each other. While the fact that
the subjects' wives joined them on this trip may have
contributed to the ~optics" issue also mentioned by the
complainant, we determined that there were no additional travel
costs paid for by the government as a result of the wives having
traveled with their husbands. Moreover, NAVINSGEN determined
that there was an official purpose for their trip to the UK.

62. The complainant's additional concern about an itinerary
that included a weekend in London, with no official business
conducted on Saturday and only limited social interaction with
RN personnel on Sunday was closely examined. The evidence and
witness testimony established that the subjects maintained full
schedules on the two workdays before and the three workdays that
followed the weekend in London. We found no fault with the ORF
dinner RADM Heinrich hosted on the day of their arrival in UK.
We also accepted that a free day on Saturday and much of Sunday
was not improper under the circumstances and that the schedules
of both RADM Heinrich and the senior officials in UK made it
difficult to impossible to avoid having a weekend in UK.

63. Having determined that there was an official purpose for
their travel to the UK, we examined the details of their travel
planning and whether or not they incurred expenses to be paid by
the government responsibly as contemplated by the JFTR. We
determined that RADM Heinrich, CAPT Pimpo and CAPT Singleton,
without proper justification, failed to use the available
contract air fare when they traveled from Washington, DC, to
London and when they returned. All three flew at a higher cost
to the government than was necessary to complete the mission.
RADM Heinrich was not aware that a non-contract flight had been
selected. His lack of awareness was not surprising to us given
our findings about his hands-off approach to all his official
travel. CAPT Singleton testified that he believed his time was
better spent at the office and saw no reason to adjust his
departure from work in order to take a contract flight.
CAPT Pimpo testified that he did not believe it was his
responsibility to challenge the TDY itinerary established for
him by RADM Heinrich. The subjects' respective decision about
                            B'Oll Ol'PJ:C:Dila • • &lffJY
 Do not release outsil!e or XG channels without the approval or the Naval XG.
                                        23
their use of air fare for this period of TOY was not aligned
with their individual responsibility to be a prudent traveler.

64. We further determined that RADM Heinrich, CAPT Pimpo and
CAPT Singleton exceeded maximum lodging per diem during their
first three nights in London. The subjects failed to take note
of the fact that the cost of their hotel rooms exceeded maximum
lodging per diem. While these higher costs were not
significantly large dollar amounts, the subjects' unqu.estioned
reliance on staff personnel to arrange their official travel on
the front end of this trip and process their respective travel
claims on the back end of their travel showed a complete lack of
ownership for the costs that they individually incurred.
Accordingly, we concluded that RADM Heinrich, CAPT Pimpo and
CAPT Singleton failed in their individual obligations to
exercise prudence in incurring government paid expenses as
contemplated by the standard; they did not exercise the same
care and regard for incurring government paid expenses as would
a prudent person traveling at personal expense. We further
concluded that RADM Heinrich, CAPT Pimpo and CAPT Singleton
exceeded maximum lodging per diem and incurred excessive air
fare costs without appropriate justification.

65. In summary, we specifically found that the trip was
properly an official trip, had official duties scheduled with
limited and reasonable per'iods of non-duty time. We also
specifically found that there was an appropriate official
purpose for CAPT Pimpo and CAPT Singleton to be on the trip and
took note that in the interests of economy RADM Heinrich did not
take his Flag Aide as he could have done and thereby made a
conscious effort to conserve government funds.

                                            *****
                             Conclusion - Allegation #1

66. The allegation is substantiated with respect to all three
subjects in that they failed to use available contract air fare
and improperly claimed and accepted per diem exceeding what was
permitted without proper justification or operational necessity
for having done so.

                                            ****•



 De   nee releaae C'tHiaitle ef IO e'ha!Rflels wi68e96 &Be applE!e:v:al ·ef tik• Ha,...,.1   :.tQ.
                                               24
                Official Travel to    KU    26-29 April 2012

67. Allegation #2: ·That RADM Heinrich violated various
provisions of the JFTR related to his official travel to KU on
26-29 April 2012.

                                    *****
                   Findings of Fact - Allegation #2

68. RADM Heinrich is a 1989 graduate of the Navy's Petroleum
Management masters program taught at KU. The KU Chemical and
Petroleum Engineering (C&PE) Department teaches this curriculum
to Naval Officers under contract to the U.S. Naval Postgraduate
School. 7

69. On 26-29 April 2012, RADM Heinrich traveled at government
expense and visited his alma mater, KU, located in Lawrence, KS.
This period of TDY was a continuation of the UK trip discussed
in Allegation #1 above.

70. RADM Heinrich previously visited KU just two months
earlier, on 9-12 February 2012, and at government expense.

71. The complainant alleged RADM Heinrich scheduled the April
2012 trip to KU "to receive a personal alumni award" and his
travel at government expense was "primarily for personal
reasons.n

          Primary Purpose of Travel - Official or Personal

72. RADM Heinrich's itinerary in conjunction with his travel to
KU was as follows:

 Day & Date (2012)             Activity (all times are local)
Thursday, 26 April      Departed Washington Dulles International
                        Airport ® 1528 and arrived Kansas City
                        International Airport ® 1709; traveled to
                        hotel accommodations in Lawrence


   Educational Service Agreement #N00244-09-G-0041, of June 25, 2009, states
in part that the University of Kansas will provide educational services in
the form of instruction with standard offerings of courses available to the
public to the government.


                            Pell 8PP~e~Jdl "8B ~y
 Do not release outslae or IG chaHHels without the approval or the Naval IG.
                                     25
Friday, 27 April            Attended briefs and meetings with school
                            officials and KU military students and spoke
                            at a KU recoqnition luncheon, 0830-1630
Saturday, 28 April          Participated in VTC with Navy Reserve S~pply
                            Corps (SC) personnel and SC Officer Detailer
                            presentation to the Navy Petroleum
                            Management masters program students @ KU,
                            0900-1130; remainder of day was personal
                            time spent going to KU Spring football game
                            and C&PE Hall of Fame Awards Dinner to
                            accept his personal award
Sunday, 29 April            Departed Kansas City International Airport @
                            1154 and . arrived Harrisburg, PA@ 1711

73. on 23 February· 2012,                             I Chairman
of C&PE Department's Hall of Fame committee, sent an email to
RADM Heinrich and notified him that he had. •been nominated and
selected for [their] 2012 Hall of Fame.w      c
explained in his email to RADM Heinrich that the purpose of the
award was:

    -    To recognize important contributions of individuals to
         the professions of Chemical Engineering or Petroleum
         Engineering and to society

    -    To provide focus on the KU Chemical and Petroleum .
         Engineering Department

    -    To provide a role model and source of motivation for
         current and future engineering students

74.             c         stated that when he learned about the KU award
recognition banquet and gift offers, he contacted ~VSUP's
       c                       c              and requested she review the
Admiral's proposed trip to KU in order to accept their Hall of
Fame award .                       redirected            t o her staff and
                      request for a legal determination was assigned to
~;;;;::;...,.r=~-=-=----=.---. in the NAVSUP Office of Counsel.

  7s. ·                                 stated that he posed several questions about
 RADM Heinrich's proposed travel to KU and any potential gift or
  gifts he might receive in conjunction with his visit to KU to
                                   by email.     c        did not answer his email .
.......,...,_..,,..,..,..,__--___, further stated that when his questions to



 1'u    not xelease outside' of %0 channels without the appxoval of the Raval    %~.
                                          26 .
            went unanswered, he did not follow-up with
            about the matter. To the best o f • • • • • •
recollection, a legal opinion was not provided by the NAVSOP
Office of Counsel to anyone prior to RADM Heinrich going on
travel to KU or at any time before he accepted the award. ·

76.               testified and provided email clarification
regarding his testimony about RADM ·Heinrich's TDY to KU. He
stated that he did not follow-up with _              and he did not
obtain answers to the questions that ~-             posed to him
about RADM Heinrich's proposed trip to KU.                 said he
was not aware •if RADM Heinrich or any other NAVSUP front office
member (     c         ,    _ck2 ) ·were contacted by the NAVSUP
legal off ice regarding this trip or obtained legal permission•
at any time before RADM Heinrich traveled to KU and accepted his
award.

77.     c        further explained the general level of support
provided by the NAVSUP Office of Counsel for RADM Heinrich's
official travel stating:

       During my tenure as                      (April 2011-
       May 2012),   ltlvk2    nor anyone in the legal office
       ever approached me on permissions for any trip other
       than the Kansas University (April 2012) trip. As I
       stated in my 10 April 2013 email to [NAVINSGBN] ,
       RADM Heinrich held weekly staff meetings on Tuesday
       with all the N-~ode leaders. Each meeting was
       ~ttended by     ·   ~   or a representative on her
       behalf. Each week during the briefing,
       RADM Heinrich's upcoming travel would be shown on a
       slide. RADM Heinrich would talk about the purpose of
       each and every· trip and who he was going to see during
       each trip, the visit•s relevance to the NAVSUP
       mission, etc. The April 2012 visit would have been on
       such a slide and most likely discussed. As the Chief
       would discuss each upcoming trip, I never (for any ·
       trip) remember the l~gal office representative
       objecting to any trip RADM Heinrich was looking to
       execute. · This includes in all weekly staff meetings
       [that followed]               email to me on 28
       February 2012 [about the April TDY to KU] .




 gg   ae~ ~elea•e e.t~•iele   ef %9 emamels witho~t the appzoval of the 1'B:val %G.
                                          27
78. The award citation used to recognize RADM Heinrich at the
awards banquet reads, with only minor differences, just like his
official biography as posted on the Navy's official website.

                       Use or non-use of Contract Air Fare

79. RADM Heinrich selected a non-contract fare for his flight
from Washington, DC, to Kansas City International Airport. A
contract fare was available at the time his travel arrangements
were made. RADM Heinrich's air fare to Kansas City
International Airport and his air fare returning back to
Harrisburg Regional Airport, cost $321 more than the available
contract fares.

80. RADM Heinrich's travel claim contained the following
justification statement as the reason why he selected a non-
contract fare from Washington, DC, to Kansas City International
Airport: •noes not meet mission requirements. Flight from
United Kingdom arrives at 1130 EST. Official meeting in
Pentagon at 1300.•

81. RADM Heinrich testified that he did not have a meeting in
the Pentagon on 26 April. Instead of going to the Pentagon, he
recalled that he made a phone call to whomever he needed to
speak with that day. RADM Heinrich remained at Washington
Dulles International Airport from the time his plane arrived
from UK until his plane for Kansas City International Airport
departed.

                                Claims Exceeding Per Diem

82. RADM Heinrich's travel authorization and claim for this
trip showed his destination as •Kansas City, KS,• however he did
not have any official duties there. KU is located in Lawrence
and that was RADM Heinrich's destination and where his lodging
was located. RADM and      c         stayed at The Oread Hotel
in Lawrence. RADM Heinrich claimed and was reimbursed $77 per
night, plus an appropriate non-mileage expense for hotel taxes,
for the three night stay in Lawrence. The $77 amount he
claimed, however, generated a DTS flag because RADM Heinrich's
travel voucher improperly identified his TDY location for this
trip as Kansas City. The maximum rate for lodging per diem in
Kansas City was $99. While it appeared he paid a lodging rate
below maximum lodging per diem during his stay, in fact, he paid
an amount equal to the maximum lodging per diem for Lawrence.

 Be   no~   release   o~taide   ot   ~~   chaxuzels without the approval   or   the R'aVal IG.
                                                 28
83. Having identified that a wrong TDY location had been used
to determine per diem entitlements for the KU trip, we examined
whether or not a proper ~mount had been .claimed for Meals and
Incidental Expenses (M&IE) during the time RADM Heinrich was in
Lawrence. We found thB.t. he claimed and was reimbursed at the
higher Kansas City M&IE rate of $61 per day as opposed to the
correct rate of $46 per day for Lawrence. RADM Heinrich claimed
and was paid a total of $56.25 more for M&IE than he was
entitled to receive.

                                       Use of GTCC

84. RADM Heinrich used his GTCC to purchase air fare and
lodging accommodations in accordance with the JFTR.

                         Extra Days before or after TDY

85. RADM Heinrich arrived in Lawrence on Thursday evening,
26 April, the same day he returned to the U.S. from his 8-day
TDY to UK. He had a full workday on Friday, 27 April; he
divided his time between various meetings with KU officials but
he also met with members of the KU Navy ROTC unit and spoke . by
Video Teleconference. (VTC) with SC Officers gathered at a
training symposium in Jacksonville, FL. On Saturday, 28 April,
however, RADM Heinrich had only two work related activities from
0900-1130. He spoke to Navy Reserve SC Officers assembled in
Jacksonville by VTC and he attended a presentation made by
                                     to the KU students enrolled
in the Petroleum Management masters program.
     at the time,     c              , ....z•z•r•;.................. .
              at Navy Pe~sonnel Command (NPC), Millington,

                                 Accounting for leave

86. RADM Heinrich was not required and he did not take any
leave in conjunction with his TDY to KU.

        Other administrative errors noted by the investigation

87. RADM Heinrich did not create or digitally sign his travel
claim for his TDY to KU. It was administratively processed by
his staff as a part of the Washington, DC and UK trip discussed
in Allegation #1. He did not review or sign his claim form
before it was uploaded into DTS with his travel receipts.


 ~e   ae• •eleaae   e~~•i«ie   ef Ia ehannela without the appxoval of the lfaval %G.
                                            29
                                      *****
                  .Applicable Standards - Allegation 12

88. In addition to the standards cited for Allegation #1 above,
JFTR Chapter 7, Part K, Paragraph U7325A, states:

     GOV'T-funded travel and transportation allowances may
     be authorized for travel to receive an honor award
     sponsored by a non-Federal organization provided the
     award is closely related to the . . . [t]raveler's
     official duties, and . . . Service/Agency's functions
     and activities.

                                      *****
                         Analysis - Allegation #2

89. Pursuant to the JFTR, government-funded travel and
transportation expenses may be authorized for .travel to receive
an award sponsored by a non-Federal organization provided the
award is closely related to the traveler's official duties and
the Navy's functions and activities. In the case of
RADM Heinrich's TDY to KU on 26-29 April and his acceptance bf
the 2012 C&PE Hall of Fame award, the purpose of the award did
not meet JFTR requirements. Rather, the award RADM Heinrich
accepted at KU was intended:

        To recognize important contributions of individuals to
     the professions of chemical or petroleum Engineering and
     society

       To provide focus on the KU Chemical and Petroleum
     Engineering Department

        To provide a role model and source of motivation for
     current and future engineering students at KU

90. We determined that RADM Heinrich was honored by KU for
having been a KU graduate student who later succeeded in his
Navy career and achieved Flag rank. The award citation KU
drafted was nothing more than a slightly edited version of
RADM Heinrich's official biography. The award did not establish
any relationship between the master'.s degree RADM Heinrich
earned at KU and some later contribution he made to Navy or DLA

 Do 11ot: telease outside of :CG chatmels witlxout the apptoval or the RaVa:l :IG.
                                        30
petroleum management. While the award recognition he received
may have been a well-deserved personal accolade, it lacked the
necessary tie to the ~service/Agency's functions and activities"
to satisfy the requirements for government-funded travel.

91.  In conducting our examination of the facts, we carefully
considered what official duties RADM Heinrich scheduled and
accomplished during this period of TDY. Although we determined
he had a full day's activities at KU on Friday, we were not
convinced that these events justified his trip to accept the
personal awards recognition bestowed upon him the following
night.  Further, RADM Heinrich's duties on Saturday only
occupied two and half hours of his time and they were concluded
before noon that day. We were not persuaded that his duties on
Saturday required.him to extend his TDY, at government eXpense,
until Sunday morning and thereby afford him the opportunity to
attend the awards banquet Saturday night.  Extending his stay in
Lawrence and delaying his departure until Sunday morning was
RADM Heinrich's personal choice. Moreover,· we concluded that
his travel to KU to receive a personal award was not
appropriate; it did not satisfy the criteria contemplated in
standard.

                                   *****
                       Conclusion - Allegation #2

92.   The allegation is substantiated.

                                   *****
93. Allegation #3: That RADM Heinrich improperly accepted a
gift from· a prohibited source in violation of s c.F.R.
§ 2635.202, Standards of Ethical Conduct for Employees of the
Executive Branch, Subpart B, Gifts from Outside Sources.

                                   *****

                   Findings of Fact - Allegation #3

94. The facts in this allegation were not disputed.   In
addition to being recognized at the awards' banquet on Saturday
evening, 28 April, RADM Heinrich.stated he accepted a gift in
the form of a laser-engraved chair from KU.  The chair was given
to him to commemorate his selection for the C&PE Hall of Fame.

                            POK OFFICDLL OSB ORLi
 Do not release outside of IS charmels witho~t the approual of the Naual IS.
                                     31
The university purchased and shipped the chair to RADM Heinrich
in Mechanicsburg. The total cost of the chair, with shipping,
was $338. RADM Heinrich provided a picture of the chair's laser
engraved backrest; he said that the chair sits in his office at
NAVSUP Headquarters.

95. KU is a business entity with DoD contracts exceeding
$25,000.00 and as such is a prohibited source. 8

                                           *****
                        .Applicable Standard - Allegation #3

96. 5 C.F.R. PART 2635 - Standards of Ethical Conduct For
Employees of the Executive Branch.
           Subpart B - Gifts from outside sources.

           §   2635.202 General standards.

           (a) General prohibitions. Except as provided in this
           subpart, an employee shall not, directly or
           indirectly, solicit or accept a gift:

            (1) From a prohibited source; or
            (2) Given because of the employee's official position.

           §   2635.203 Definitions.



           {b) Gift includes any gratuity, favor, discount,
           entertairunent, hospitality, loan, forbearance, or
           other item having monetary value. It includes
           services as well as gifts of training, transportation,
           local travel, lodgings and meals, whether provided in-
           kind, by purchase of a ticket, payment in advance, or
           reimbursement after the expense has been incurred.




8
   KU is listed as a prohibited source on page 252 of DoD SOCO (Standards of
Conduct Office) Ethics Resource Library found online at:
http://www.dod.mil/dodgc/defense_ethics/resource_library/contractor_list.pdf


    :Do   not zeleaee outside of ::CG ctm:miels without the appxoval of ehe mival IG.
                                            32
    §    2635.204 Exceptions.



    (d) Awards and honorary degrees. (1) An employee may
    accept gifts, other than cash or an investment
    interest, with an aggregate market value of $200 or
    less if such gifts are a bona fide award or incident
    to a bona fide award that is given for meritorious
    public service or achievement by a person who does not
    have interests that may be substantially affected by
    the performance or nonperformance of the employee's
    official duties or by an association or other
    organization the majority of whose members do not have
    such interests. Gifts with an aggregate market value
    in excess of $200 and awards of cash or investment
    interests offered by such persons as awards or
    incidents of awards that are given for these purposes
    may be accepted upon a written determination by an
    agency ethics official that the award is made as part
    of an established program of recognition:

    (i) Under which awards have been made on a regular
    basis or which is funded, wholly or in part, to ensure
    its continuation on a regular basis; and

    (ii) Under which selection of award recipients is made
    pursuant to written standards.

    (2) An employee may accept an honorary degree from an
    institution of higher education as defined at 20
    u.s.c. 1141(a) based on a written determination by an
    agency ethics official that the timing of the award of
    the degree would not cause a reasonable person to
    question the employee's impartiality in a matter
    affecting the institution.

    (3) An employee who may accept an award or honorary
    degree pursuant to paragraph (d) (1) or (2) of this
    section may also accept meals and entertainment given
    to him and to members of his family at the event at
    which the presentation takes place.

                                     *****

                             POR OPP!e;um 'BSB OlftrY
~g BQ~   release eaeeide et IG eharm:ela withottt the approval of the Naval !G.
                                       33
                         Analysis - Allegation 13

97. The facts for this allegation were                 not disputed.
RADM Heinrich stated that he accepted a                gift in the form of a
laser-engraved chair from KU. The gift                 was purchased by the
university and shipped to RADM Heinrich                in Mechanicsburg at a
cost of $338.

98. NAVINSGEN determined that KU is a prohibited source and
5 C.F.R. § 2635.202 specifically prohibits military members from
accepting gifts from a prohibited source. Although the standard
allows for a gift acceptance exception when the value of the
gift is $200 or less, the criteria of § 2635.204 (d) were not
met in this instance. We concluded, therefore, that
RADM Heinrich should not have accepted the chair and that doing
so was a violation of the standard.

                                       *****
                        Conclusion - Allegation 13

99.    The allegation is substantiated .

                                       •••••
100.  Allegation #4: That RADM Heinrich improperly used a
subordinate's official time in violation of 5 C.F.R. § 2635.705,
Standards of Ethical Conduct for Employees of the Executive
Branch, Subpart G, Misuse of Position.

                                       *****
                    Pindings of Fact - Allegation 14

101.  The complainant questioned whether or not it was
appropriate for RADM Heinrich to rely upon a government civilian
employee to write speeches if those speeches were made in
conjunction with ~Non-official/personal events and functions."
The complainant stated RADM Heinrich's acceptance speech at KU
awards banquet on 28 April was in this category. RADM Heinrich
testified that he gave an acceptance speech at the awards




                             FOK   on:r:e:ua.t un   OJ1LY
 Do not zelease outside of J!9 cha:nnels withoat the appro'9al of the Nr;ral :ES.
                                         34
banquet and he believed that the speech had been written by
someone in the NAVSUP Commander's Action Group (CAG). 9

102.                     is a government employee working in
NAVSUP's Office of Corporate Communications. He was previously
assigned with the CAG and was one of the individuals responsible
for writing speeches and talking points used by RADM Heinrich at
promotions, retirements, and special events. Ill            said
he wrote several speeches used by RADM Heinrich in conjunction
with the two trips he made to KU in February and April 2012.
     --~~--· provided NAVINSGEN a copy of the speech he wrote
for RADM Heinrich to use at the awards banquet on 28 April.

103. As discussed in the findings of fact and analysis sections
for Allegation #2 above, it was determined the award ceremony on
Saturday night, 28 April, was not an official function.
Accordingly, we determined that the speech RADM Heinrich gave at
the awards banquet was not in the performance of his official
duties.

                                   *****
                 Applicable Standard - Allegation #4

104. s C.F.R. PART 2635 - Standards of Ethical Conduct For
Employees of the Executive Branch.
     Subpart G - Misuse of Position.

     §   2635 . 705 Use of official time.



     (b) Use of a subordinate's time. An employee shall
     not encourage, direct, coerce, or request a
     subordinate to use official time to perform activities
     other than those required in the performance of
     official duties or authorized in accordance with law
     or regulation.

' Commander's Action Group (CAG) was a fairly new organization established by
RADM Heinrich to help him be more effective in representing NAVSUP interests
during various meetings and engagements he makes at the Flag level. The CAG
was established as a small group; it includes mid-grade and senior officers
and government civilians.




                                     35
                                        *****

                           .Analysis - Alle1ation 14

105. We determined that               expended an unspecified
number of work hours to prepare a speech that RADM Heinrich
delivered when he accepted the 2012 C&PE Hall of Fame award on
28 April. The time .             spent preparing RADM Heinrich's
acceptance speech was not an appropriate use of his official
time. We concluded, therefore, that the use of the speech
writer's official time to prepare a speech for an unofficial and
personal occasion was improper and further concluded that
RADM Heinrich was responsible for the misuse of
official time.

                                        *****

                          Conclusion - Allegation 14

106.      The allegation is substantiated.

                                        *****

 Official Travel to Philadelphia, PA, & Dallas, TX, 1-5 May 2012

107. Allegation 15: That RADM Heinrich violated various
provisions of the JFl'R related to his official travel to
Philadelphia, PA, and Dallas, TX, on 1-5 May 2012.

                                        *****

                       Findings of Fact - Allegation 15

108. on 1-5 May 2012, RADM Heinrich traveled at government
expense to Philadelphia and Dallas .

             Primary Purpose of Travel - Official or Personal

109. RADM Heinrich's itinerary in c .o njunction with his travel
to Philadelphia and Dallas was as follows:




                               POil Ol'PJ!e:r:A!i 99B Sm.¥
 1'\J   nut 1eleaae outside of !G channels without the appxoval of the Raval   %~.
                                           36
 Day and Date (2012)              Activity (all times are local)
Tuesday, 1 May              Full workday ® NAVSUP Headquarters 0800-
                            1730 then departed by car and traveled to
                            Philadelphia
Wednesday, 2 May            Site visit ® NAVSUP Weapons System
                            Support, Philadelphia 0800-1630; traveled
                            to Philadelphia International Airport for
                            flight to Dallas; arrived Dallas - Ft
                            Worth International Airport ® 2120
Thursday, 3 May             Site visits ® Aviall Services Inc. (an
                            aviation parts supplier) and NAS JRB
                            Dallas - Ft Worth 0800-1530
Friday, 4 May               Site visit ® Lockheed Martin (Joint
                            Strike Fighter Program) 0900-1630
Saturday, 5 May             Departed Dallas - Ft Worth International
                            Airport ® 1100 and returned to Harrisburg
                            International Airport arriving® 1718

110. The complainant alleged that RADM Heinrich scheduled his
official travel to Dallas so that he and his . . . . .could spend
time with b6 b7c                            : , USN (Retired) and his
b6         The complainant stated that the two       c    were ~very
c l ,o se friends . " The complainant also alleged RADM Heinrich
accepted an improper gift in the form of free accommodations
from the b6b7c             when RADM Heinrich and his        stayed in
the                     home during this TDY. At the time ,
b6b7c                 worked for Lockheed Martin Aeronautics Company.
He was the Director, Sustainment Business Operations for the F35
Lightning II Joint Strike Fighter Program.

111 . RADM Heinrich testified that he and his      enj oyed a
long-standing friendship with RDML and .                   The
two officers came up through the Navy Supply Corps together.
They have known each other for about twenty years; they were
Supply Corps Flag Officers at the same time, until
b6 b7c            retired .

112. RADM Heinrich testified that he slept in his hotel room
each night during his TDY to Dallas. He did not accept the
invitation from the b6 b7c          to stay in their home, however,
              stayed with the b6 b7c         on one of the nights
she and RADM Heinrich were in Dallas together. RADM Heinrich
also testified that he and                 were the    7c




 Bo not release outside of !:8 ehat11&ls without the appxoval of the Raval !G.
                                      37
guests for dinner one night during this TDY; the b6b7c
paid for their meal that night.

                        Use or non-use of Contract Air Fare

113. RADM Heinrich selected a non-government fare for his
flight from Philadelphia to Dallas. Contract air fare was
available at the time his travel arrangements were made.
RADM Heinrich's air fare to Dallas cost $1,400.10 more than the
available contract fare.

114. RADM Heinrich's travel claim contained the following
justification statement as the reason why he selected a non-
contract fare from Philadelphia to Dallas: •Does not meet
mission requirements. This flight is the only flight that will
fit the tight timeline for this trip."

                               Claims Exceeding Per Diem

115. RADM Heinrich was reimbursed for actual expenses above the
maximum rate for lodging per diem for his three nights stay in
Dallas. RADM Heinrich received $139 against a maximum lodging
per diem of $113 for Dallas. The justification provided in his
travel voucher stated: "This was slightly above per diem but the
location of this hotel was the best for the logistics of the
meetings around the [Dallas - Ft Worth] metroplex."

                                           Use of GTCC

116. RADM Heinrich used his GTCC as required by the JFTR to
purchase air fare and lodging accommodations in conjunction with
his travel to Philadelphia and Dallas.

                            Extra Days before or after TDY

117. There were no free days, before or after the TDY, during
which RADM Heinrich collected per diem or incurred costs paid by
the government.

                                  Accounting for leave

118. RADM Heinrich was not required and he did not take any
leave in conjunction with his TDY to Philadelphia and Dallas.



                                    P8B:   ePP:ceum UllHI em.¥
 :Ou not   i: eleaee   ontsid:e of IEI   ch~ls    w:i:tl'lo'ttt: the apprer."9:1 ef t!te Nar...al IG.
                                                 38
         Other administrative errors noted by the investigation

119. RADM Heinrich's claimed $417 for lodging expense in
Dallas, however, his three-nights lodging there totaled $407
($139 x 3) .

120. RADM Heinrich did not claim and he was not reimbursed for
the lodging taxes he paid in conjunction with his TDY in Dallas.
We note here that a traveler in the U.S. or a u.s Territory is
entitled to claim these taxes as a separate non-mileage expense.
In this case, RADM Heinrich was entitled to claim $25.02 ($8.34
x 3) in state tax and another $37.53 ($12.51 x 3) in city tax.
Although we noted this error that RADM Heinrich had not claimed
a legitimate travel expense, we did not consider it to be a
violation of the JFTR since it accrued to the benefit of the
government and the detriment of the subject.

121. RADM Heinrich's travel voucher for this TDY was created
and T-entered in DTS by b6 b7c       on 11 May 2012. It was
reviewed and then approved for payment by his   ,
the same day. RADM Heinrich did not digitally sign his travel
claim for this period of official travel nor did he sign his
paper claim before it was uploaded with his receipts into DTS.

                                       *****

                    Applicable Standard.a - Allegation IS

122.     See JFTR standards cited for Allegation #1 above.

                                       *****

                           .Analysis - Allegation #5

123. The JFTR states in part that TDY assignments may be
authorized and approved only when necessary for official
government business. We determined that RADM Heinrich had an
official purpose for TDY in Dallas. RADM Heinrich's official
itinerary was planned and scheduled to accomplish multiple
objectives as required by the standard.

124. We were not persuaded, however, that this period of TDY
could not have been better planned to use an available contract
flight between Philadelphia and Dallas. RADM Heinrich visited a
subordinate NAVSUP command in Philadelphia on Wednesday and his

 ~     not zeleaae otttaide of i8 chemnela withOllt the   a~re~al   ef the Na?al   xe,
                                         39
first meeting in Dallas was the following morning with a private
commercial company. His itinerary in both locations was under
his control; he was not reacting to the scheduling priorities of
a higher echelon commander. We determined, therefore, that the
excessive air transportation cost could have been avoided.

125. We were also not persuaded that of the many hotels
available in the Dallas metropolitan area that one within the
maximum per diem could not be found. It was obvious from the
witness interviews we conducted and the documentary evidence we
collected that proper planning and adherence to the spirit and
intent of the JFTR was not a priority for RADM Heinrich when he
traveled. Although the dollar amounts above maximum lodging per
diem in this case were not significant on their own, we
concluded that the excessive lodging expenses, like the use of
non-contract air fare, were avoidable costs had RADM Heinrich
ensured proper TDY planning had taken place.

                                           *****

                           Concluaion - Allegation #5

126. The allegation is substantiated to the extent that
RADM Heinrich did not use government contract air and he
exceeded maximum lodging per diem without proper justification
for having done so.
                              *****

 Official Travel to Norfolk, VA, & Waahington, DC, 6-13 May 2012

127. Allegation #6: That RADM Heinrich violated various
provisions of the JFTR related to his official travel to
Norfolk, VA, and Washington, DC, on 6-13 May 2012 and failed to
document his use of annual leave during the same period.

                                           *****

                       Findinga of Fact - Allegation 16

128. On 6-13 May 2012, RADM Heinrich traveled at government
expense to Norfolk and Washington, DC.




                               J!O& OPP6Q:IAI. VBB 9Jf&Y
 Be net:: release ~a:i:ae e£ :EEi eM:nnela w:i:t::he11t:: t::h.e appreval ef t::he Na•al IEI.
                                             40
         Primary Purpose of Travel - Official or Personal

129. RADM Heinrich's itinerary in conjunction with his travel
to Norfolk and Washington, DC, was as follows:

  Day IC Date (2012)              Activity (all times are local)
Sunday, 6 May           Traveled from Mechanicsburg to Norfolk in
                        a government vehicle driven by
                        !19 Dl8 U      l (1200-1700)
Monday, 7 May           Attended meetings at U.S. Fleet Forces
                        Command (USFF) and went to the
                        disestablishment ceremony for NAVSUP
                        Logistics Operations Center in Norfolk
Tuesday, 8 May          Attended morning meetings at USFF and Navy
                        Region Mid-Atlantic; traveled to
                        Washington, DC, in government vehicle with
                        ~ wa•          I
Wednesday, 9 May        Attended meetings at Pentagon (0800-1800)
Thursday, 10 May        Attended meetings at Pentagon and
                        Washington Navy Yard (0800-1400); driven
                        to Baltimore - Washington International
                        (BWI) Airport and commenced leave
Friday, 11 May          Regular leave in California
Saturday, 12 May        Regular leave in California
Sunday, 13 May          Regular leave in California
Monday, 14 May          Returned to Mechanicsburg; traveled by
                        personally funded air fare and arrived at
                        Harrisburg International Airport at 1548

                 Use or non-use of Contract Air Fare

130. RADM Heinrich did not use air transportation in
conjunction with his TDY to Norfolk and Washington, DC.
Instead, he rode in a government vehicle driven by
from Mechanicsburg to Norfolk and from there to Washington, DC.
The AO determined that travel by government vehicle was more
advantageous for the government than air travel for this trip.

                       Claims Exceeding Per Diem

131 . There were no claims for actual expenses in excess of the
maximum authorized per diem.




                                  41
                                               Use of GTCC

132. RADM Heinrich used his GTCC as required by the JFTR to
purchase lodging. The AO determined that government ground
transportation was more cost effective for this trip and air
fare was not required to be purchased.

                             Extra Days before or after TDY

133. The complainant alleged that RADM Heinrich scheduled and
completed official travel to San Diego, CA, on May 13-15 (sic)
in order to attend his                            RADM Heinrich
did not, however, go on official travel to San Diego as the
complainant believed. Instead, he traveled, at personal
expense, to Los Angeles, CA, to attend his    c
   c       after he concluded his TDY to Norfolk and Washington,
DC, on 10 May. RADM Heinrich did not claim any per diem
         for the three days he was on leave to attend his     c


                                         Accounting for leave

134. On Thursday, 10 May, RADM Heinrich attended           in
the Pentagon until early afternoon. Afterwards,
drove him in a government vehicle to Baltimore-Washington
International (BWI) Airport and RADM Heinrich began his personal
travel to California.

135. DTS records showed that RADM Heinrich was supposed to be
on leave Friday, 11 May, through Sunday, 13 May. RADM Heinrich
testified that he planned this period of leave so that he could
attend his                          in California. He testified
that he purchased his own airline ticket for this trip and
stated that ~it was well understood [by my personal staff] that
I was on leave . . . . "

136. RADM Heinrich's travel claim for this period of official
travel states that he took leave on 11-13 May; he was not paid
per diem for those three days. His personal leave record,
however, did not show that he was charged for the leave taken.
Regarding any error in his personal leave record, RADM Heinrich
testified:

        I know    c          [knew] I was on leave. It was a
        ticket I produced myself. I said, "I'm going on leave


 Be   :ne~   re%eaae   "'2!~Bid.e   of   ~8   channels without the approval of the Raval   ~.
                                                     42
     for my                    I'm buying the ticket
     myself,"     if that's    if that leave wasn't
     charged, then it's a terrible oversight.

13 7 .  b c                    , RADM Heinrich' s
stated that it was his responsibility to enter RADM Heinrich's
leave requests into NSIPS.

      Other administrative errors noted by the investigation

138. Because RADM Heinrich departed on leave from a TOY
location, he would normally be entitled to return travel from
his last TOY location, Washington, DC, back to his permanent
duty station, Mechanicsburg. When RADM Heinrich filed his
travel claim, he requested reimbursement and was paid for return
travel based on the constructive cost of a one-way airline
ticket from Washington, DC, to Harrisburg Regional Airport. He
claimed and was reimbursed $419.80 for return transportation.

139. We note here that as our investigation of RADM Heinrich's
official travel was in progress, RADM Heinrich, aware of our
examination of certain TDYs he completed, directed an internal
review of his official travel by his NAVSUP staff . As a result
of their review, a number of RADM Heinrich's travel claims,
including the trips that were identified to us by the
complainant, were reexamined by NAVSUP personnel in parallel
with our investigation. Officials in NAVSUP's DTS Program
Management Office requested NAVINSGEN permission to audit these
claims and make appropriate adjustments. We granted their
request with the understanding that we would retain access to
the original documents electronically stored in DTS until the
conclusion of our investigation. The constructive air fare cost
RADM Heinrich claimed for reimbursement in conjunction with his
Norfolk and Washington, DC, TDY was one of the items
reevaluated. NAVSUP DTS officials determined, and we agreed
with their determination, that constructive air fare cost was
not properly claimed. They commented that:

     The use of air transportation from Washington, DC, to
     Mechanicsburg would not be deemed prudent or
     advantageous to the government and an excessive
     expense since it is . less than 400 miles. Air
     transportation is ordinarily the most cost efficient
     and expeditious way to travel for travel of over 400
     miles one way from the PDS. Traveler was transported
                                  POK OPP!C!:ltfl "8B e11riY
 De ne~   !!'eleaae   9'1ft•iae ef IG efte!mel• wi~eft   ~- ~rewal   ef   ~-   Raval   :i:e.
                                              43
      via government vehicle at the beginning of the trip.
      The same mode of transportation would have been used
      to return to duty station had the traveler not went on
      personal leave. Airline ticket reimbursement for
      $419.80 was removed. No mileage entitlement is due to
      the traveler.

                                       *****
                  ApPlicable Standard• - Allegation #6

140. In addition to the standards listed for Allegation #1,
JFTR Chapter 3, Part E: Government Conveyance Use on TOY, states
in part:

     U3400 GOV'T AUTOJIOBILB USB ON TDY

     D. Limited to Official Purposes. Use of a GOV'T
     automobile is limited to official purposes, including
     transportation to and from (65 Comp. Gen. 253 (1986)):

     1. Duty sites,
     2 . Lodgings,
     3. Dining facilities,
     4. Drugstores,
     5. Barber shops,
     6. Places of worship,
     7. Cleaning establishments, and
     8. Similar places required for the traveler's
     subsistence, health or comfort.

141. In addition to the JFI'R standards noted. above, Military
personnel in the U.S. Navy take leave in accordance with
guidance contained in the MILPERSMAN as amended by the
provisions for the Navy Standard. Integrated Personnel System
(NSIPS) Electronic Leave (E-Leave) Implementation Plan (NAVADMIN
252/10).

     a. The MILPERSMAN specifically authorizes leave in
     conjunction with TAD. That authorization comes with
     several caveats and requirements:

         -   In planning TAD, both the fact and. the appearance
             of TAD arranged to serve the leave desires of the

                               PGR eR:teIAfi en en'!'
 Do not zelease outside of '.tG cnaxu1els witl:loat tlxe app:toval of the ltaval 1:8.
                                         44
                individual shall be scrupulously avoided.               (1050-
                170-2b}

               Great care must be taken to ensure that when
               leave is granted with TAD:  (a) it is clear the
               TAD is essential; (b) no additional cost to the
               Government is involved.  (1050-170-3)

               Care should be taken to avoid payment of per diem
               during leave by ensuring the orders are properly
               written to reflect the member's leave desires.
               (1050-170-5)

         b. NAVADMIN 252/10 directed all shore commands to
         implement E-Leave to request, track, and manage leave
         transactions for military personnel commencing on 1
         August 2010. It stipulated that E-Leave for all
         military personnel would reside within the NSIPS
         Electronic Service Record (ESR) application for each
         military member. Further, it stated that it was
         imperative all military personnel establish access and
         routinely review their ESR as required by NAVADMIN
         103/10 and NAVADMIN 043/09. 10

                                            *****
                             Analysis - Allegation #6

142. We determined that RADM Heinrich had an official purpose
for his TDY to Norfolk and Washington, DC, on 6-10 May 2012.
RADM Heinrich's official itinerary was planned and scheduled to
accomplish multiple objectives as required by the JFTR.

143. Our review of DTS documents and the testimony collected
established that RADM Heinrich planned to take three days leave
on 11-13 May at the conclusion of his official duties in

10
   NAVADMIN 103/10 announced the phased implementation of self-service
electronic leave. It stated in part that the use of E-Leave would streamline
requests for leave, eliminate delays due to misrouting of paper leave
requests, automate the command leave control log, and ensure that pay
entitlements were properly credited without need for paper documents.
NAVADMIN 043/09 announced the mandatory use of the Navy Standard Integrated
Personnel System (NSIPS} Electronic Service Record (ESR} for all active duty
personnel and it required them to establish and maintain a self-service ESR
account not later than 5 April 2009.

                                  l"O& ODJ:C::EM. VSB eBi'I'
     Do not release otttside of   Ie   channels without the app%oval of the Naval   ~e.
                                              45
Washington, DC. We determined that he completed his official
duties at the Pentagon at approximately 1400 on Thursday,
10 May. Thereafter RADM Heinrich traveled in a government
vehicle driven by    c         to BWI airport. His flight from
BWI airport to Los Angeles International Airport was for
personal business; he went there to attend his   ~c                ~~~~~-


             While the use of a government vehicle on TOY is
permitted, it is limited under the standard to official
purposes. we concluded that RADM Heinrich conveyance to BWI
airport in the government vehicle and his use of his Flag Aide's
time to drive him there, under these circumstances, was not
official business and not permitted by the standard.

144. We also determined that the three days leave RADM Heinrich
took on 11-13 May were not properly documented in NSIPS as
required by the MILPERSMAN and they were not deducted from his
E-leave account. We also concluded, therefore, that
RADM Heinrich failed to properly account for his use of personal
leave as he was required to do in accordance with the
MILPERSMAN. His reliance upon his Flag Writer to process his
leave request did not absolve him of his own responsibility for
the accuracy of his leave account. NAVADMIN 252/10 specifically
requires that all military personnel establish access and
routinely review their ESR for accuracy. we found no evidence
that RADM Heinrich comported with this requirement.

                                             *****
                          Conclu•ion - Allegation 16

145. The allegation is substantiated in that RADM Heinrich
improperly used a government vehicle in conjunction with his
official travel and failed to properly account for personal
leave taken in conjunction with this period of TOY.

                                             *****
  Official Travel to Wa•hington, DC, and Richmond, VA, 30 Kay -
                           3 June 2012

146. Allegation 17: That RADM Heinrich violated various
provisions of the JFTR related to his official travel to
Washington, DC and Richmond, VA, on 30 May - 3 June 2012 and
failed to document his use of annual leave during the same
period.
                                  :roa   OllICI:Jal 178B OBli'!'
 "8 aa~   ••lease   e~~siae   ef IG eb•eeel• 'WS:thoa:t the appzoual of the Raval !8.
                                                46
                                              •••••
                            Pind.inga of Pact - Allegation #7

147. On 30 May - 3 Jwie 2012, RADM Heinrich traveled at
government expense to Washington, DC and Richmond.

148.  RADM Heinrich's official travel to Washington, DC and
subsequent personal trip to Richmond was not part of the
original complaint we received. This particular trip came to
our attention, however, when we examined the other travel
RADM Heinrich completed during the three month period identified
in the complaint we received.

              Primary P\lrpose of Travel - Official or Personal

149. RADM Heinrich's itinerary in conjunction with his travel
to Washington, DC and Richmond was as follows:

 Day & Date (2012)                         Activity (all time• are local)
Wednesday, 30 May                   Attended morning meetings at NAVSUP and rode
                                    wit: - c    to Washington, DC; attended
                                    afternoon meetin s at Penta on
Thursday, 31 May                    Traveled to Defense Logistics Agency at
                                    Ft. Belvoir, VA; attended Retired SC Flag
                                    Officers Conference (0900-1430)
Friday,      1   June               Returned to Pentagon for meetings oaoo-1200;
                                    after lwich, rode with   b7ck2      in
                                    government vehicle to AMTRAK train station
                                    in Alexandria, VA; took train to Richmond
Saturda , 2 June                    Re lar Leave in Richmond
Swiday, 3 June                      Regular Leave; returned to Mechanicsburg in
                                     ersonal vehicle with

150. For this period of travel, Washington, DC, was the only
official temporary duty location. RADM Heinrich testified that
he went to Richmond for personal reasons; he said he did not
intend that any of the expenses related to his travel to
Richmond be claimed for reimbursement.

151.  RADM Heinrich testified that he drove from Mechanicsburg
to Washington, DC, in his personal vehicle with    c       He
said after they reached Washington, DC,               dropped
him off and then continued on Ill way to Richmond in their


 De   ae~   :releaee   8':l~eicie   ef zEI ehawle   wi~he~   el!e etl'PrChal cf the Naval !8.
                                                47
personal vehicle. Thereafter, RADM Heinrich rode in a
government vehicle driven by                   c
provided RADM Heinrich's ground transportation------
                                               in and around
Washington, DC.

                 Use or non-use of Contract Air Fare

152. RADM Heinrich was not required to use air transportation
in conjunction with his TOY to Washington, DC.

                        Claims Exceeding Per Diem

153. RADM Heinrich did not claim any actual expenses above his
authorized per diem for this period of TOY. Although the
inclusive dates for this trip in DTS were 30 May - 3 June,
RADM Heinrich properly stopped collecting per diem on Friday,
1 June; he did not collect per diem during the two days he was
supposed to be on leave in Richmond.

                                Use of GTCC

154. RADM Heinrich used his GTCC as required by the JFTR to
purchase lodging. Because the AO determined that government
ground transportation was more cost effective for this trip, air
fare was not required to be purchased. In conjunction with this
trip, however, RADM Heinrich used his GTCC in error to purchase
his train fare from Alexandria to Richmond. The train fare was
a personal expense and should not have been purchased with the
GTCC.

                     Extra Days before or after TOY

155. There were no free days, before or after the TOY, during
which RADM Heinrich collected per diem or incurred costs paid by
the goverrunent.

                           Accounting for leave

156. RADM Heinrich testified that he planned to take leave on
2-3 June to attend a family friend's wedding in Richmond. His
travel claim for this trip showed that he was on leave for those
two days; he did not collect any per diem while in Richmond.




 Bo not release outside of !8 channels witllottt the approval of the Naval !8.
                                      48
         Other administrative errors noted by investigation

157. DTS records showed that RADM Heinrich claimed and was paid
POV mileage from Richmond back to Mechanicsburg. He was not,
however, entitled to POV mileage reimbursement from a leave
location back to his permanent duty station.

158. After we notified RADM Heinrich of our investigation and
before his interview, RADM Heinrich notified investigators that
he was reviewing his travel claims and in particular his travel
claim for this period of official travel. RADM Heinrich stated
that errors had been made by   b7ck2      when she prepared his
travel claim; he testified that he had not taken time to review
his claim before it was submitted for payment. RADM Heinrich
further testified that the POV mileage expense that he expected
to be reimbursed was roundtrip mileage between Mechanicsburg and
Washington, DC. He said that the information in DTS documenting
that he was reimbursed for mileage expense between Richmond and
Mechanicsburg was made in error.

159. DTS records showed that RADM Heinrich claimed and was
reimbursed the cost of his train fare from Alexandria to
Richmond.

                                       *****
                 .Applicable Standard• - Allegation #7

160. See JFTR and Military personnel leave standards cited in
Allegation #6 above.

                                       *****
                         Analy•i• - Allegation #7

161. We determined that RADM Heinrich conducted official
business in Washington, DC, on 30 May - 1 June. We also
determined that his subsequent travel to Richmond was not
official business, it was a personal trip he made to attend a
family friend's wedding in the company of    c       we
concluded, therefore, that RADM Heinrich's period of TDY ended
on Friday, 1 June, in Washington, DC, not on Sunday, 3 June, in
Richmond as reflected on his travel documents. We further
concluded that RADM Heinrich was not entitled to be reimbursed
for POV mileage he claimed between Richmond and Mechanicsburg


 Bo net releaae ollt•ide of   :re ehmmela withoat the appzoval of the lta+al 1:8.
                                        49
and we acknowledge that this overpayment for POV mileage was
recouped by administrative action after his claim had bee~ filed
as noted in the findings of fact.

162. When we examined RADM Heinrich's DTS documents for this
trip, we determined he was approved to take leave on 2-3 June.
We found, however, that the two days of leave he took were not
processed in NSIPS as required by the MILPERSMAN and those days
were not deducted from his E-leave account. We concluded,
therefore, that RADM Heinrich failed to properly account for his
use of personal leave as required by the standard.

163.  We also determined that RADM Heinrich permitted
             to drive him in a government vehicle to the train
station in Alexandria on 1 June. As we have already noted, his
purpose in going to the train station was personal, not
official . We concluded, therefore, that this was an improper
use of the goverrunent vehicle during TDY and a waste of
               official duty time.

164. Finally, because RADM Heinrich's travel from Alexandria to
Richmond was for personal reasons, it was improper for him to
claim the train fare expense for reimbursement. It was also
improper for RADM Heinrich to use his GTCC to purchase the fare.
We concluded, therefore, that RADM Heinrich's claim for
reimbursement of this expense and his use of the GTCC to
purchase train fare were violations of the standard.

                                    *****
                       Conclusion - Allegation #7

165.   The allegation is substantiated.

                                    *****
           Official Travel to Newport, RX, 7-12 June 2012

166. Allegation #8: That RADM Heinrich violated various
provisions of the JFTR related to his official travel to
Newport, RI, on 7-12 June 2012.

                                     *****



 Do not re1ease outside of IG c'.bafine1B without the approva1 of the Raval ~G.
                                      so
                     Pindinga of Pact - Allegation #8

167. On 7-12 June 2012, RADM Heinrich traveled at government
expense to Newport. 11

           Primary Purpose of Travel - Official or Personal

168. RADM Heinrich's itinerary in conjunction with his travel
to Newport, was as follows:

Day and Date (2012)               Activity (all times are local)
Thursday, 7 June          Attended morning meetings at the Pentagon
                          then traveled from Washington Dulles
                          International Airport to T.F. Green Regional
                          Airport, Providence, RI; proceeded to hotel
                          in Newport; attended social event that
                          evening at the Prospective Commanding
                          Officer of Navy SC School quarters
Friday, 8 June            Officiated at the Navy SC School change of
                          command ceremony; made a courtesy call to
                          Superintendant of Naval War College (NWC) ;
                          toured Naval Undersea Warfare Center,
                          Newoort (0730-1700)
Saturday, 9 June          Free Day in Newport
Sunday, 10 June           Free Day in Newport
Monday, 11 June           Traveled to Groton, CT, in rental car; made
                          courtesy call to Commander, Submarine Group
                          TWO; toured Submarine Base New London, CT;
                          toured and attended meetings at General
                          Dynamics Electric Boat in Groton, CT, and
                          returned to Newport (0700-1730)
Tuesday, 12 June          Attended current Strategy Forum at NWC
                           (1230-1600); returned to Washington, DC,
                           (1600-2100) in order to attend meetings the
                          following day at the Pentagon

169. The complainant alleged this trip was another example of
RADM Heinrich arranging his official travel to include a weekend

11 This period of TDY was actually part of a longer period of TDY that began
on 4 June 2012 in Washington, DC, and concluded on 15 June 2012 in
Mechanicsburg, PA. We focused our attention primarily on the six-day period
mentioned in the complaint but we noted certain irregularities related to
some of the TDY expenses incurred by RADM Heinrich outside the six-day period
that we determined to be in violation of the JFTR.

                              •oa opp;gzA:L uea   9llflaY
 Bo   not release outside of IS channels   withe~t   the appro,al of the Naval IS.
                                        51
during which time the government paid for his per diem expenses
and he enjoyed the company of his wife. The complainant
commented that RADM and b6             stayed in the Hotel
Viking, a hotel the compl-ainant characterized as being •the
oldest and one of the most expensive hotels in Newport . . . . "

                         Use or non-use of Contract Air Fare

1 70.     RADM Heinrich used contract air fare for this TDY .

                                Claims Exceeding Per Diem

171. RADM Heinrich selected a slightly more expensive rental
car for his official travel to Newport than was available to
him. The car selected was $54 more than the lowest cost rental
car available. The justification statement provided to the AO
read: ~[National] is the preferred company due to the tight
timeline of this mission." We noted in our document review and
from witness testimony that after he landed at T.F. Green
Regional Airport, in Providence, RADM Heinrich's drove from the
airport directly to his hotel in Newport and later that evening
he went to a social function.

                                         Use of GTCC

172. RADM Heinrich purchased his air fare and rental car as
required by the JFTR with his GTCC . He did not, however, pay
for his lodging expense for the 7-12 June stay in Newport.
Instead, he improperly charged his lodging expense to a personal
credit card . The justification statement provided to the AO
stated that he •unintentionally charged personal card for
lodging expense."

                             Extra Days before or after TDY

173. There were no free days, before or after the TDY, during
which RADM Heinrich collected per diem or incurred costs paid by
the government. There was, however, an included weekend when
there were no official duties performed and per diem was paid.

                                   Accounting for leave

174. RADM Heinrich was not required and he did not take any
leave in conjunction with his TDY to Newport.



 DQ     RQt   ~•leaae   9\lt&ide ef 16 eaaftftele   wie'he~t   the approval of the Naval Ie.
                                                52
                                     *****
                 !pplicable Standards - Allegation #8

175.   See JFTR standards cited for Allegation #1.

                                     *****
                        Analysis - Allegation #8

176. We determined that RADM Heinrich had an official purpose
for his TDY in Newport, RI on 7-12 June. His official itinerary
was planned and scheduled to accomplish multiple objectives as
required by the JFTR. We noted that RADM Heinrich's official
travel to Newport, RI, included a weekend for which he collected
per diem. We closely examined, therefore, the official duties
he performed on the workdays before and after the weekend and
determined that his official delay, over the included weekend,
was acceptable under the circumstances and the standard.

177. DoD policy requires DoD personnel to pay for ftall costs
incidental to official travel" with their GTCC. We determined
that RADM Heinrich properly used his GTCC for his air fare but
used a personal credit card to pay for his lodging in Newport.
We found his justification for not using his GTCC for his
lodging expense in Newport unpersuasive; RADM Heinrich was a
very experienced and frequent traveler having completed more
than 40 TDYs between the time he assumed Command of NAVSUP in
July 2011 and the time he traveled to Newport in June 2012.

178. We also determined that RADM Heinrich failed to select the
least expensive rental car when a lower cost rental car was
available to him. We were not persuaded by his justification
for selecting a higher cost rental car when he stated that the
company selected was uthe pref erred company due to the tight
timeline of this mission.• There are six major rental car
companies that service T.F. Green Regional Airport: Advantage,
Alamo, Budget, Dollar, Hertz, and National. These rental car
companies provide a comparable selection of appropriate rental
cars to the traveling public. Moreover, we determined that
RADM Heinrich's itinerary after he departed from the airport was
not hurried or driven by any official duty requirement. He
drove from the airport directly to his hotel in Newport and
later that evening he attended a social event at the quarters of
the Prospective Commanding Officer of the Navy SC School with
                            NB: GPP-Ze:EA:L 98B ellLY
 Bo not release 011t:side of IS ehmmele   wit:hc~e   t:fie apprer.·al ef ehe Ha::rJ&l IC,
                                       53
his wife. Accordingly, we did not find that there was any
reasonable requirement for RADM Heinrich to select a more
expensive rental car for this trip. Doing so was his personal
choice and the government is not responsible to pay for a
traveler's personal choice when that choice results in the
government incurring a higher cost.

179. We concluded, therefore, that RADM Heinrich traveled in
violation of the standard during this period of TDY.

                                        *****
                        Conclusion - Allegation #8

180.   The allegation is substantiated.

                                        *****
               Concluding Remarks about Official Travel

181. We observed in our investigation of RADM Heinrich's use of
official travel his reliance on his staff to properly arrange
his TDYs and thereafter correctly adjudicate his travel claims
without his proper involvement in the planning, approval or
claim adjudication processes. RADM Heinrich's lack of proper
involvement in the travel process was an abrogation of his duty
to be a responsible traveler. Moreover, his mostly hands-off
approach to arranging his official travel and filing his travel
claims created an atmosphere with his personal staff and the
NAVSUP DTS Program Off ice staff that perpetuated the problems we
identified about his use of government travel funds during each
of the six periods of TDY we examined in our investigation.
While we acknowledge the positive effort begun by RADM Heinrich
to have staff audit some of his prior travel claims for proper
payments, we believe that a complete audit of his travel, one
that will examine all of the TDY he completed during his
assignment as Commander, NAVSUP, should be conducted and
appropriate payment adjustments made to each travel claim
examined by auditors.

                                        *****




                                MR 9PPJ:S:u.L U8B 911LY
 Bo not: release oat:side of   :Ie cl:immels witbottt the awzooal of tbe Mavai   :!C!.
                                          54
                         Det:.aili

182. Allegation #9: That RADM Heinrich failed to act
impartially with respect to detailing of
b6 b7c k2 , from her assignment as his        to her c urrent
duty assignment in Ft Worth, TX, in violation of 5 C.F.R.
§ 2635.101, Standards of Ethical Conduct for Employees of the
Executive Branch, Subpart A - General Provisions.

                                       *****
                     Findings of Fact - Allegation #9

183. The complainant alleged that RADM Heinrich ~created" a
•non-existent billet [for             ·] in her home state of
Texas" and thereafter approved her assignment to that billet.
The complainant stated this special treatment of              by
RADM Heinrich was inappropriate and especially so as it was
common knowledge t hat          ·· intended to leave active duty
at the conclusion of her assignment in Texas.

184.               detached from NAVSUP in August 2012. Ill
accepted Pennanent Change of Station (PCS) orders to Naval Air
Station (NAS)/Joint Reserve Base (JRB), Ft Worth and reported to
the Aviation Support Detachment (ASD) for Commander, Fleet
Logistics Support Wing in September 2012. When Ill r eported to
Ill new p osition,             was, in fact, assigned to an
established (pre-existing) Navy Reserve Supply Corps billet.
The incumbent officer assigned to the billet when
reported for duty had a Projected Rotation Date (PRD) of July
2013 .

                                                  PERS-4412, was
   c           detailer at               ----    1
                                     the Navy Personnel Command (NPC);
                                                             he
was the officer who drafted    c           PCS transfer orders.
             provided background infonnation about the billet
             was transferred to in Ft Worth. The documentation
he provided showed the billet dated back to 1997.      c
                                                   -------
explained that the billet in Ft Worth had twice before been
filled by an Active Component Officer and that the assignment of
two officers to the same billet for an extended period of
overlap as was the case here was not unusual in his experience
as a detailer.




 Bo net zeleaae otrta:i:de of !El channels w:i:tbont the appzoual of the Haual !El.
                                         55
186.     6 c
        ------
at the t i me of   b7c
                       was also assigned at NPC in code PERS-4412
                                detailing and reassignment. He
testified that he spoke with      c         and CAPT Singleton
about possible follow-on assignments for       c
                 recalled that CAPT Singleton wanted him to see if
a career enhancing billet assignment in Texas was possible for
her; CAPT Singleton told      c           that              was
interested in Texas primarily for personal reasons.

187.                 testified that it was not uncommon for the
Supply Corps detailers to assign two officers to the same billet
for an extended period of overlap, known as •double stuffing.•
He stated that double stuffing a billet occurred at times and
whenever there was an excess inventory of officers at a
particular grade available for transfer as compared to the
number of vacant billets that needed to be filled.
               further stated that it was not unusual in his
experience for              , an  fi7c                  , to be
assigned to a Reserve Component billet.

188. About her specific desire to be assigned in her home
state,             stated:

     I had many reasons why I wanted to come to NAS JRB
     Fort Worth after my detail to NAVSUP HQ, both personal
     and professional. In the past, I served as a Material
     Control Officer at a Helicopter Squadron at NAS North
     Island. Ever since that tour I have desired to return
     to an air station at an ASD or at the Wing .... which we
     have both here at JRB! When I found out we had Supply
     Officer Positions, it peaked my interest and I
     informed my detailer I desired to take a billet in
     Fort Worth. In addition to my Supply duties on base,
     I am pursuing my MBA and working on JPMEl through the
     Marine Command and Staff College in order to stay
     competitive in the Supply Corps. Personally, I grew
     up not too far from my current duty station and my
     family lives a couple of hours from Fort Worth. With
     aging parents, it is a huge comfort to know I am a
     short drive away to assist them if needed.

189. RADM Heinrich testified that he spoke wit ~--c__________.
about her preference for an assignment after NAVSUP. He
understood from their conversation that llllwanted to get back
to Texas to be closer to family. RADM Heinrich also said that


 9e Bee releaae   ~ailie   ef IS ehennela •i~hcttt the approval of Llxe lfaval   %~.
                                        56
he believed a tour at a Naval Air Station would be beneficial to
    career development. RADM Heinrich testified:

            wanted to get home, and -- and - - and like a lot
              c , you know, we have a heck of a time keeping
        them. so -- so trying to keep somebody like         y ou    11111,
        know, we barely have five percent     ~  at the 0-6
        level. We start with about 20 , and then it goes down
        steadily, boom, boom, boom, until at the 0-6 level
        we're barely able to keep five percent.

        So we need    c to stay [on Active Duty], people like
             to stay. I would love for Ill to stay, and I've
        encouraged   Ill
                       to stay, but getting     in the  Ill
        aviation billet at Fort Worth in my mind was -- was a
        way to keep     interested, keep .   viable, get
        to work on     JPME, get     to work on potentially
        going to the War College or grad school after that,
        but, yeah, that was my advice to

190 . RADM Heinrich denied taking any action to transfer or
create a billet for   b7c k2

                                         •••••
                    .Applicable Standard - Allegation 19

191 .    §   2635 . 101 Basic obligation of public service provides in
part:

         (a) Public service is a public trust. Each employee
        has a responsibility to the United States Government
        and its citizens to place loyalty to the Constitution,
        laws and ethical principles above private gain. To
        ensure that every citizen can have complete confidence
        in the integrity of the Federal Government, each
        employee shall respect and adhere to the principles of
        ethical conduct set forth in this section, as well as
        the implementing standards contained in this part and
        in supplemental agency regulations.

         (b) General principles. The following general
        principles apply to every employee and may form the
        basis for the standards contained in this part. Where
        a situation is not covered by the standards set forth


 Bo net release Ollteide e f I 9 e hannel e wi t l!OlSt t he &J'Prewal ef the Raval I 9.
                                           57
        in this part, employees shall apply the principles set
        forth in this section in determining whether their
        conduct is proper.



        (8) Employees shall act impartially and not give
        preferential treatment to any private organization or
        individual.

         (14) Employees shall endeavor to avoid any actions
        creating the appearance that they are violating the
        law or the ethical standards set forth in this part.
        Whether particular circumstances create an appearance
        that the law or these standards have been violated
        shall be determined from the perspective of a
        reasonable person with knowledge of the relevant
        facts .

                                 *****
                       Analysis - Allegation #9

192. The complainant's allegation that RADM Heinrich created a
billet for   li1ti      in Ft Worth is untrue.  In fact, we
determined that              was properly assigned to Ill
current billet by NPC personnel in accordance with standard Navy
personnel assignment practices.

193 . We determined RADM Heinrich spoke with              about
    preference for a follow-on assignment and offered     career
counseling and advice as would be expected from any reporting
senior to a subordinate. We also determined that CAPT Singleton
(then NAVSUP Chief of Staff) called and talked with
               about finding an assignment in Texas for
             following Ill assignment at NAVSUP. We further
determined that these actions were not inappropriate; they did
not violate any rule or regulation governing the assignment of
personnel. The action taken by RADM Heinrich to support a
reasonable request from     c         to be assigned to a
geographical area     preferred was appropriate.

194. We concluded, therefore, that RADM Heinrich did not give
improper preferential treatment to    c         related to her
transfer from NAVSUP and reassignment to a billet in Ft Worth.


                                  58
                                     •••••
                        Conclusion - Allegation 19

195. The allegation is not substantiated .

                                     •••••
                    Supply Corps Foundation Pundin.g

196. Allegation 110: That RADM Heinrich improperly solicited
and received funds from the San Diego Chapter of the Navy Supply
Corps Officers' Foundation in violation of 5 C.F.R. § 2635.202,
Standards of Ethical Conduct for Employees of the Executive
Branch, Subpart B, Gifts from outside Sources .

                                     •••••
                   Pindings of Pact - Allegation 110

197. The complainant alleged that RADM Heinrich ~routinely and
inappropriately solicited and received funds" from San Diego
Chapter of the Navy Supply Corps Foundation, a non-profit
private association for current and former members of the Navy's
Supply Corps. The complainant stated that RADM and       .
               used foundation funds to pay for their ~personal
entertairunent expenses• and ~exhibited a sense of entitlement"
about those funds. The complainant further alleged that
CAPT Pimpo, who was at the time the president of the foundation,
was complicit in giving RADM Heinrich ~whatever he wanted" when
it came to foundation monies. The complainant stated that their
improper use of foundation monies was illegal and ethically
wrong and an abuse of their respective positions.

198. RADM Heinrich denied having ever solicited or accepted any
monies from the foundation either for the benefit of his conunand
or for his personal benefit. He testified that while he was
assigned in San Diego in 2009-2011, he occupied designated Flag
quarters and that his quarters were used by the foundation, with
his consent, as the venue to host one or more of the
foundation's social events, e.g., a Holiday Open- House.

199. CAPT Pimpo testified about the time he was the president
of the San Diego chapter of the foundation. CAPT Pimpo denied


 no not :teleaae outside of !a channels without the app:toval of the Jlaval   :tC!.
                                      59
that RADM Heinrich ever requested or accepted funding from the
foundation while he was its president.

                               - ' served as foundation
--~c~     during the time CAPT Pimpo was the president of the
foundation . He provided NAVINSGEN a copy of his records, the
foundation's check register that he maintained as the :   c
from July 2010 - Dec 2011.     c         stated that after
reviewing his records, he had •no evidence, nor [did he] ever
recall, writing a check specifically to RADM Heinrich.•

201.      c                             , succeeded CAPT Pimpo as
the Commanding Officer of NAVSUP FLC San Diego and the president
of the San Diego Chapter of the Navy Supply Corps Officers'
Foundation.                      reviewed foundation records that
covered the entire period of RADM Heinrich's tour in San Diego.
    c               reported that he found no record of
RADM Heinrich having received foundation funds; he said there
were, however, records that showed RADM Heinrich pa.id for his
participation in several foundation events. ____c_________________
also stated that foundation records showed that the 2009 and
2010 Holiday Open House events were hosted at RADM Heinrich's
quarters. He said on both occasions, the foundation paid the
caterer           l) directly; no monies went to RADM Heinrich.


                                        *****
                .Applicable Standard - Allegation 110

202. 5 C.F.R. PART 2635 - Standards of Ethical Conduct For
Employees of the Executive Branch.

     Subpart B - Gifts from outside sources.

     §   2635.202 General standards.

     (a) General prohibitions. Except as provided in this
     subpart, an employee shall not, directly or
     indirectly, solicit or accept a gift:
     (1) From a prohibited source; or
     (2) Given because of the employee's official position.

     §   2635.203 Definitions.



                               NB: el'PJZeHill '8SB 8111aY
 Do twt Lelease outside   or   :tG channels without the appkoval   or   the Kaval %G.
                                           60
      (b) Gift includes any gratuity, favor, discount,
      entertainment, hospitality, loan, forbearance, or
      other item having monetary value. It includes
      services as well as gifts of training, transportation,
      local travel, lodgings and meals, whether provided in-
      kind, by purchase of a ticket, payment in advance, or
      reimbursement after the expense has been incurred .

                                      •••••
                         Analysis - Allegation 110

203 . We found no evidence that RADM Heinrich either requested
or received any financial resources from the San Diego Chapter
of the Navy Supply Corps Officers' Foundation as alleged. We
concluded, therefore, that he did not violate the standard .

                                      •••••
                        Conclusion - Allegation 110

204 . The allegation is not substantiated .

                                      •••••
                          Frocking of Subordinate•

205 . Allegation Ill: That RADM Heinrich made false official
statements when he requested that two officers assigned at
NAVSUP Headquarters be frocked to the grade of Captain in
violation of the UCMJ, Article 107 - False Official Statements .

                                      •••••
                    PindiDS• of Pact - Allegation Ill

206. The complainant alleged that RADM Heinrich intentionally
submitted •a false and misleading justification• to the
Secretary of the N.avy (SECNAV) when he signed letters that
requested                               r and   ti7c k2
  b7c k2         , be frocked to Captain.
                                                        ---
                                            The complainant
stated that neither officer met any of the thirteen specific
officer frocking criteria required by SECNAV Instruction
1420.2A, Frocking of Commissioned Officers, dated 13 April 2012 .


 1'\J uoL zel:eaae oats±de of ~8 chamzela without the appzooal of tire lla:val   :ra .
                                        61
207. On 29 December 2012, RADM Heinrich signed two letters and
requested that     c      and              be frocked. Both
officers were selected for promotion and assigned to Captain
billets at NAVSUP headquarters. The letters RADM Heinrich
signed were forwarded to Assistant Commander, Navy Personnel
Conunand for Career Progression (PERS-8) for consideration and
approval in accordance with the governing SECNAV instruction.

208.  RADM Heinrich testified that the idea to frock
and               or.iginat:ed. with their immediate supervisor,
                             .,      b7c               for Supply
Operations and Logistics. RADM Heinrich said he only spoke
briefly with hi s                  ,     c              •      ~
about the letters when they came up to him for his signature.
He also said that at some point before he forwarded the letters
to NPC, he called and discussed the requests with         c
and told him that he checked with PERS-8 about whether or not
the requests would be supported. RADM Heinrich recalled that
after checking with PERS-8,        c          told him to send the
requests and they would be approved.

209.               testified and confirmed that the frocking
recommendations were his idea. He said his staff prepared the
two letters; he reviewed the letters for content and accuracy
and he routed them to RADM Heinrich for signature.

210.             and     c         testified substantially the
same. They said their frocking was               ,   idea and that
he asked them to draft their respect ive frocking r equest letters
for RADM Heinrich's signature. They complied and drafted their
letters following the format in the governing instruction.

211.     The frocking letter justification for                         read:
                                                           "'----~-


                   is assigned N31,          Supply Chain
        Management, an 0-6 position       reports directly to
        the Assistant Commander Supply Operations and
        Logistics Policy (N3/4), Naval Supply Systems Command
        (NAVSUP) .      serves as the senior Navy
        representative-for all processes and policies relating
        to Supply Chain Management across the Fleet.       is
        the lead for the NAVSUP's core business processes and
        manages the largest product and services line, Supply
        Chain Management, as well as Inventory Management and
        Warehouse Management with collective budgets exceeding

                                  PeR 8PP%e~ USB OHL!
 ~a    ae6   ~eleaae ~ait\e   ef IQ efta!!nela wittwut the appzooal of the Raval   ~G.
                                           62
         $600M. In addition,        provides process and policy
         guidance to the NAVSUP Echelon III activities through
         her business process owners across the NAVSUP
         enterprise coordinating with a peer group of Fleet,
         OPNAV, SYSCOM and DLA 0 - 6s and GS-lSs. This frocking
         is requested for    c        to wear the appropriate
         rank to more effectively serve in this highly visible
         0-6 billet.

212.      The frocking letter justification for                      b7ck2         read:

        b6 b c k2     is assigned as       li7c    Fleet
        support, an 0-6 position responsible to the Commander,
        Naval Supply System Command for developing and
        coordinating Fleet logistics support across a wide
        range of products and services and programs. He leads
        a team of 45 personnel including one 0-6. He is
        responsible for the logistics concept of support for
        the fleet introduction of new platforms including the
        Littoral Combat Ship, Joint Strike Fighter and DDG
        1000 . He manages the Navy's Food Service Program to
        include oversight of 300 general messes, training and
        sponsorship of 7,300 culinary Specialists and audit
        readiness of the $427M annual Subsistence-in-Kind
        budget. He manages the Navy cash Program, an
        Acquisition Category III program with a $20M annual
        budget that provides cash access to sailors on 151
        platforms at sea. He is the technical expert for
        NAVSUP's Global Logistics Support and Husbandry;
        Quality of Life and HAZMAT Product and Services with
        $90M annual budgets. He also serves as the Logistics
        Cross Functional Team lead for Aegis Ashore and
        NAVSUP's representative for Naval Logistics
        Integration. This frocking is requested to improve
        his effectiveness as he interfaces with 0-6 peers, all
        working to improve support to the warfighter.

213.                   testified about his discussions with PER.S-8
prior to     frocking requests being approved. He recalled that
in times past, PERS-8 had been lenient about their scrutiny of
Supply Corps officer frocking requests because the requests were
so infrequent.    b7o k2         recalled that when speaking to
PERS-8 about whether or not these two requests meet the criteria
outlined in the SECNAV instruction, he said to them:    •I really
don't find anything on the list.w It was his sense that PERS-8

                                      POil OP•:ISHila 98• e&¥
 l)Q   ae1s s•l•••• au.1s•iL4ie ef   i;g CilAaWl•   wi.1saa& \;ae awaraval al 1she Raval   i;g,
                                                63
was •a little bit loose• with their interpretation of the SECNAV
instruction and that the response he received from PERS-8 was
•sure, you guys don't ask [for many].•

214. On 16 January 2013, PERS-8 approved both frocking
requests. Thereafter, a frocking ceremony at NAVSUP
Headquarters was scheduled and, on Friday, 25 January,
RADM Heinrich frocked    c      and    c         to Captain.

                                        *****

                    Applicable Standard - Allegation #11

215.     UCMJ, Article 107, False Official Statements, reads:

        Any person subject to this chapter who, with intent to
        deceive, signs any false record, return, regulation,
        order, or other official document, knowing it to be
        false, or makes any other false official statement
        knowing it to be false, shall be punished as a court-
        martial may direct.

                                        *****

                           Analysis - Allegation #11

216. We reviewed the two frocking requests RADM Heinrich signed
and in particular the J UStif ication statements he made regarding
           and     c           therein. we determined that their
respective frocking request accurately described the duties and
responsibilities of two officers. Moreover, the justifications
did not make any attempt to embellish or exaggerate the duties
and responsibilities of either officer; the justification
remarks did not attribute any of the specific criteria called
for by the standard to either officer.

217. We specifically noted that the complainant observed that
neither     c           c          met any of the thirteen
frocking criteria specified in Enclosure (1) of SECNAV
Instruction 1420.2A. We agreed with the complainant's
assessment of these candidates eligibility against the criteria
required by the SECNAV instruction. We did not, however, find
fault with RADM Heinrich for submitting the requests. His
administrative action to forward the requests was not improper.



 Do    not release outside of :r:c; chamxels without the appzooal of the Naval i:e.
                                          64
He was a senior advocating for two subordinates whom he found to
be worthy of consideration for frocking to a higher grade.

218. We determined that it was PERS-B's responsibility to
review and approve or disapprove the requests that had been
submitted to them for consideration. PERS-8, not RADM Heinrich,
held the authority to approve an officer to be frocked in
accordance with SECNAV Instruction 1420.2A. we viewed with
concern the apparent loose application of the SECNAV instruction
by NPC employees in this case and reported our findings about
these two frockings to Commander, NPC.

 219. We concluded, therefore, that RADM Heinrich did not make
 false official statements when he requested that    ~c     and
lb8 c         be frocked to Captain. Thereafter, when PERS-8
 approved the frocking requests that RADM Heinrich submitted, it
 was not improper for him to officiate a ceremony to effect the
 frocking of two subordinate officers after approval for their
 frocking was granted by the proper higher authority.
                               *****

                       Conclusion - Allegation #11

220. The allegation is not substantiated.

                                        *****

                 Commander Command Ashore Aasigm!l!Dt•

221. Allegation #12: That RADM Heinrich failed to act
impartially with respect to the assigmnent of officers to Supply
Corps Commander Connnand Ashore positions in violation of
5 C.F.R. 2635.101, Standards of Ethical Conduct for Employees of
the Executive Branch, Subpart A - General Provision~.

                                        *****

                   Findings of Pact - Allegation 112

222. The complainant alleged that RADM Heinrich •bypassed the
CNO-directed Navy Command Board process in order to personally
approve two officers for assignment to Command." According t o
the ,c ompl ainant, these officers, b olC2              •   ml,
and ' b7c fc2                          , had not been selected for
command by the command screening board process and they were,

 Be not releaae otttaide of   ~8   cba:r:mela without the appxooal of the Raval %Q.
                                          65
therefore, not qualified to be assigned to the command positions
they were assigned.

223. The FY-13 Supply Corps Commander Operational/Command
Ashore Screen Board convened on 18 July 2012. one of the
board's duties was to recommend eligible SC Officers for
Commander Command Ashore assignment.             and
   c          were eligible officers and they were considered by
the FY-13 board.

224.     c                         were selected by the board
but placed on the list    Officers Qualified but Insufficient
Opportunity (QIO) for Command Ashore. In this QIO category,
    c      and               and two other similarly situated
officers would only be assigned to a command position if, for
example, a regularly selected officer, on the command list,
withdrew their name from the command list or retired.

225.      c          researched NPC records and provided a
written statement explaining the circumstances that lead to
             and          being slated to command. He wrote:

     In the cases of              and           , we had to
     use the QIO list because the DLA         up a new
     distribution command in Bahrain ... and DCMA Hampton
     Roads had an unplanned retirement with their sitting
     commander....

     Our procedures are to go to the QIO list. First on the
     list was     c                          Ill
                                      was not assigned
     command because     had recently reported to a Joint
     Billet where the Time-On-Station is typically 36
     months--although a waiver can be applied for at the 22
     month point.             had only been on station
     around 6 months, so     was ineligible for a Joint
     Tour length waiver.

                was assigned to Bahrain as there are no
     special skill requirements for the DLA Distribution
     sites.

                   was assigned to DCMA Hampton Roads
     because it is a contracting unit requiring a 1306
     subspecialty-coded Commander.    c          holds a



 Be ae~ relea.ae Mteai:4e ef %6 eftmme:la witfto'ls:e ~e apprewal ef the Renal %6.
                                        66
        1306S subspecialty code {LEVEL III Contracting and a
        member of the Defense Acquisition Corps.

        Finally, 0-5 detailing decisions (after the command
        board results are released) are handled largely by
        SUP OP (P-1) (Director of Detailing) along with all
        other SC CDR details. Senior leadership at DLA and
        DCMA were engaged [regarding] the resumes of these
        officers. NAVSUP was informed of the details but
        provided no direction counter to the SUP OP (P-1)
        plan.

                                         *****
                      Applicable Standard - Allegation #12

226.     §    2635.101 Basic obligation of public service provides in
part:

        (a) Public service is a public trust. Each employee
        has a responsibility to the United States Government
        and its citizens to place loyalty to the Constitution,
        laws and ethical principles above private gain. To
        ensure that every citizen can have complete confidence
        in the integrity of the Federal Government, each
        employee shall respect and adhere to the principles of
        ethical conduct set forth in this section, as well as
        the implementing standards contained in this part and
        in supplemental agency regulations.

        (b) General principles. The following general
        principles apply to every employee and may form the
        basis for the standards contained in this part. Where
        a situation is not covered by the standards set forth
        in this part, employees shall apply the principles set
        forth in this section in determining whether their
        conduct is proper.



        (8) Employees shall act impartially and not give
        preferential treatment to any private organization or
        individual.
                                         *****



 ~Q :ao~     Fe•ease &'Y:6side ef IG eka:lm:ela wi~ the apprO'llal of the Naval X6.
                                              67
                          Analy•i• - Allegation #12

227 . The complainant alleged that RADM Heinrich approved two
officers for command that had not been properly screened for
command. We determined, however, that the officers in question
had been properly selected by a properly formed selection board
and in accordance with established NPC procedures . We further
determined that the assignment of              and   c
to their respective command positions was not directed by or
othez-:wise improperly influenced by RADM Heinrich. Their
respective assignments to command were accomplished by NPC in
accordance with standard procedures for selected officers.

                                            *****
                         Conclu•ion - Allegation #12

228 . The allegation is not substantiated.




                                  :soil O:A!:ICilHila '989 W
 BC> not release oi:rt:aide of   :i:e chtmnela •it:ho11t the awrooal of the lia:n:l 1:8 .
                                             68
                         DEPARTMENT OF THE NAVY
                           NAVAL INSPECTOR GENERAL
                              1254 9TH STREET SE
                       WASHINGTON NAVY YARD DC 20374-5006
                                                            IN REPLY REFER TO:
                                                            5720/2014 -000 894
                                                            Ser OOKl /0 605
                                                            11 Jun 14




This is a final response to your January 30, 2014, Freedom of
Information Act (FOIA) request for a copy of "IG investigations
into senior misconduct at Navy since Oct 1, 2012," as modified
by your email on April 17, 2014. We have identified six
investigations that respond to your inquiry, one of which was
provided to you on April 21, 2014.    Three of the cases are
attached to this response and two are posted in the Naval
Inspector's General public website reading room
(http://www.secnav.navy.mil/ig/Pages/FOIA/ReadingRoom.aspx ).

Your request has been processed in accordance with the FOIA.
Potential fees associated with this response have been waived.

The redactions made in the reports are based on FOIA Exemptions
(b) (6) and (b) (7) (c) . FOIA Exemption (b) (7) (c) authorizes the
Government to withhold names and other personal information
contained in records compiled for investigatory or law
enforcement purposes, which, if released, could be considered an
unwarranted invasion of personal privacy.      FOIA Exemption (b) (6)
protects from disclosure material from personnel, medical or
similar files, the disclosure of which would also constitute an
unwarranted invasion of privacy.

Since your request has been denied in part, you are advised of
your right to appeal this determination in writing to:

                       Department of the Navy
                  Office of the General Counsel
                 ATTN:   FOIA Appeals - Room 4E635
                         1000 Navy Pentagon
                    Washington, DC 203S0-1000
                                                    5720/2014-000894
                                                    Ser OOKl/0605
                                                    11 Jun 14


To be considered, any appeal you may wish to submit must be
postmarked within 60 days from the date of this letter.  The
enclosed copy of this letter should be attached, along with a
statement explaining why your appeal should be granted.  It is
recommended that the letter of appeal and the envelope both bear
the notation, "Freedom of Information Act Appeal."

I am the official responsible for this decision, if you have any
questions concerning this matter, my assistant, Ms. Pat Chase-
Ramsey, is familiar with your request and may be of assistance.
She may be reached at (202) 433-2222.

                                Sincerely,




                                Assistant Counsel

Enclosures:   (1)   NAVINSGEN ROI 201300798
              (2)   NAVINSGEN ROI 201300862
              (3)   NAVINSGEN ROI 201300866
              (4)   Copy of this Letter




                                  ' 2
Enclosure (1)
 NAVAL INSPECTOR GENERAL


   REPORT OF INVESTIGATION
Subj: SENIOR OFFICIAL CASE 201300798; ALLEGED MISCONDUCT BY
      RADM PAUL V. SHEBAUN, USNR (RET), PROFESSOR OF THE
      PRACTICE OF SYSTEMS ENGINEERING AND DIRECTOR, WAYNE E.
      MEYER INSTITUTE OF SYSTEMS ENGINEERING, DEPARTMENT OF
      SYSTEMS ENGINEERING, GRADUATI! SCHOOL OF ENGINEl!RlNG AND
      APPUED SCIENCl!S, NAVAL POSTGRADUATE SCHOOL




                    FOR OFFICJAL USE ONLY
                                                                              201300798

                  Off ice of the Naval Inspector General
                             Case HUmber: 201300798

                            Report of Investigation
                                     26 Nov 2013
Subj:   SENIOR OFFICIAL CASE 201300798; ALLEGED MISCO~UCT
        RADM PAUL V. SHEBALIN, USNR {RET), PROFESSOR OF THE
        PRACTICE OF SYSTEMS ENGINBERING AND DIRECTOR, WAYNE E.
        MEYER INSTITUTE OF SYSTEMS ENGINEERING, DEPARTMENT OF
        SYSTEMS ENGINEERING, GRADUATE SCHOOL OF ENGINEERING AND
        APPLIED SCIENCES, NAVAL POSTGRADUATE SCHOOL

                                         *****
                             Preliminary Statement

1. On November 21, 2012, the Naval Inspector General issued two
Reports of Investigation (ROis) documenting its investigation of
allegations of misconduct by Vice Admiral Daniel T. Oliver, USN
(Ret), Naval Postgraduate School (NPS) President (Number
201103025), and Dr. Leonard A. Ferrari, NPS Executive vice
President and Provost {Number 201203847).
2. While investigating the allegations of misconduct by
President Oliver and Dr. Ferrari, we discovered separate
instances of potential misconduct by various NPS faculty and
staff members. one area of potential misconduct that we
identified was that various faculty and staff members at NPS,
including RADM Shebalin, a civilian full time Department of the
Navy (DON) employee, solicited the NPS Foundation (Foundation)
and accepted gifts on behalf of the U.S. Navy in violation of
the applicable gift acceptance statute and regulations. In most
instances the gifts were checks to reimburse faculty and staff
for expenses that they incurred for events that were related to
the operation of NPS. In other instances, the Foundation made
payments to vendors for goods and services, such as meals, that
NPS faculty and staff members arranged and that were related to
the operation of NPS.


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3. The Foundation is a non-profit charitable organization whose
primary mission is to support NPS. 1 The Foundation supports NPS
through gifts of money and property.
4. As discussed below, the Chief of Naval Operations (CNO)
delegated gift acceptance authority to the President, NPS, for
gifts of $12,000 or less. No one else at NPS has authority to
accept gifts for the Navy. Gifts greater than $12,000 can only
be accepted by the Secretary of the Navy, CNO, Vice Chief of
Naval Operations (VCNO), and Director of Navy Starr and other
very senior officials.
5. The Assistant for Administration, Under Secretary of the
Navy (AA/USN), deposits properly accepted monetary gifts into
the Navy General Gift Fund. AA/USN, in turn, distributes the
funds to NPS. At NPS, the funds are placed in the President's
Gift Fund account.
6. The NPS Comptroller maintains the President's Gift Fund
account. Within the President's Gift Fund, there are accounts
for various positions and purposes. These accounts enable the
Foundation or other donors to make directed (earmarked) gifts
for specific areas of research or study or to a specified
school, department, institute, center, academic group, or
faculty or staff member.

                                                 *****
7.     We formulated the following allegation:
Allegation: That RADM Paul V. Shebalin improperly solicited and
accepted gifts from the Foundation on behalf of the U.S. Navy in
violation of 10 United States Code (USC) 2601 and its
implementing regulations.
Conclusion:       The allegation is substantiated.
8. on November 14, 2013, we informed RADM Shebalin of our
tentative conclusion that he improperly solicited and accepted

1
  The Foundation is recognized as exempt from federal tax under section
501(c) (3) of the Internal Revenue code.

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                                                                     201300798

gifts from the Foundation on behalf of the Navy. We provided
RADM Shebalin the opportunity to comment on our tentative
conclusion. In his response, dated November 20, 2013,
RADM Shebalin stated that he had no comments regarding our
tentative conclusion.
                                 Back.groUDd

9. RADM Shebalin is a Professor of The Practice of Systems
Engineering and Director, Wayne E. Meyer Institute of Systems
Engineering {Meyer Institute}, Department Of Systems
Engineering, Graduate School of Engineering and Applied
Sciences, NPS. RADM Shebalin has been at NPS since 2003 and
became the Director of the Meyer Institute in 2007. He retired
from the Naval Reserve in 2007.
10. The Meyer Institute is one of four NPS institutes. The
Meyer Institute web-page lists the institute'& mission and
goals:

  •   Establishes and conducts NPS-wide, interdisciplinary
      research programs for the Navy, DoD and other National
      Security customers.
  •   Fosters and encourages NPS faculty and students to apply
      their talents to answering the high-priority questions in
      defense systems science, technology, and engineering.
  •   Supports, facilitates and enables affiliated NPS faculty,
      visiting and adjunct faculty, and students to collaborate
      and conduct sponsored, interdisciplinary research and
      studies.
  •   Publicizes and shares the results of Meyer Institute-
      af filiated research.
  •   Provides a conduit to NPS faculty and students for defense
      contractor sponsored research.'
  •   Supports the assigned Chair Professors - enables the
      warfare Chairs and PEO-, Industry-, and other-sponsored
      Chair Professors to carry out their academic
      responsibilities



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11. During our investigation of President Oliver and
Dr. Ferrari evidence gathered established that the Foundation
also held an internal account for the Meyer Institute. The
Foundation records established that Lockheed Martin donated
money to the Foundation to fund the Meyer Institute account.
The Foundation records were incomplete and we were unable to
dete::rmine when the account was first established.

12. Foundation records include a letter dated July 22, 2009, in
which Lockheed Martin donated $10,000 to the Foundation for the
Meyer Institute. The letter stated that the money was "for your
appropriate use at the Wayne Meyer Institute at the Naval
Postgraduate School." In 2010 and 2011, Lockheed Martin donated
$5,000 each year.

13. Foundation records establish that the Foundation reimbursed
RADM Shebalin and faculty and staff members attached to the
Meyer Institute with funds from the Meyer Institute account for
various purchases. The records also establish that the
Foundation made payments to vendors for the Meyer Institute with
funds from the Meyer Institute account. The Foundation also
paid honorariums to guests of the Meyer Institute.

                                     Pindings of Pact

14. On February 12, 2012, RADM Shebalin testified that if he or
someone associated with the Meyer Institute purchased an item or
incurred an expense related to the Institute, he or one of his
deputies signed a reimbursement fo::rm that was delivered to the
Foundation. Attached to the reimbursement forms were receipts
for the purchases or expenses. Thereafter, the Foundation
issued a check to RADM Shebalin or the person who had made the
purchase or made a payment to a vendor. 2

15. In 2010 and 2011, the Foundation issued a total of 53
checks to reimburse RADM Shebalin and other Meyer Institute
faculty and staff members. Specifically, the Foundation issued

2
   RADM Shebalin is the only person associated with the Meyer :cnstitute that
we investigated. We limited our investigation to him because he is the
Director.

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seven checks to RADM Shebalin. During that period, in addition
to reimbursing RADM Shebalin and faculty and staff, the
Foundation made 31 payments to Morale Welfare and Recreation
 (MWR) or vendors for goods or services for the Meyer Institute.
In 2009, the Foundation made 50 reimbursements or payments to
MWR or vendors. 3 It also issued five honorariums to guests of
the Meyer Institute. The aggregate amount for reimbursements,
payments, and honorariums during the 3 years was greater than
$32,000.

16.  RADM Shebalin testified that he believed that he was
authorized to request reimbursements from the Foundation or have
it pay vendors from its Meyer Institute account. He said that
when he became the Director of the Meyer Institute in 2007, the
outgoing Director told him about the Meyer Institute account at
the Foundation and explained that the Foundation reimbursed
Meyer Institute personnel for expenses and made payments to
vendors that were related to the Meyer Institute's mission. He
said that then-financial manager for the Meyer Institute also
told him about the account at the Foundation and that it was
used to support institute-related expenses.
17.  RADM Shebalin said that each year the Foundation's
Executive Director, RADM Merrill Ruck, USN (Ret), informed him
when Lockheed Martin donated money. He testified that RADM Ruck
contacted him by phone or e-mail and told him, "Hey, a donation
has come in. 11
18. RADM Shebalin testified that the criteria he applied for
using Meyer Institute account funds was "we had the funds. It
was for a Meyer Institute mission item, and we wanted to get
them in fairly quickly." He also stated:
      It's under the mission. We had the funds with the
      foundation and they said, "This is how much we have
      for you in the foundation funds." It seemed like a
      good use of the funds.


   For 2009 the Foundation records did not distinguish between a reimbursement
check to a Meyer Institute faculty or staff member and a payment to a vendor.

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19. RADM Shebalin testified that no one recognized any personal
gain. 4 He said that all requests to the Foundation for
reimbursements were supported with receipts. Foundation records
include receipts for all expenditures from the Meyer Institute
account.

20. The Foundation issued reimbursement checks to the Meyer
Institute personnel or made payments to MWR and vendors for the
following expenses:

   •   food at conferences

   •   dinners at restaurants, including alcoholic and non-
       alcoholic beverages

   •   $100 gift certificate for a departing staff member

   •   replacement parts for a Lego robot

   •   conference fees

   •   travel expenses for students

  •    plaques and commemorative coins

   •   get-well cards
21. RADM Shebalin acknowledged that some of the expenses he
approved were for items which he believed appropriated funds
could not be used to purchase. The items he believed could not
be purchased with appropriated funds included food, graduate
receptions, get-well cards, awards, and commemorative coins.
22. In a letter to President Oliver, dated March 2, 2012, the
Foundation offered a $9,000 gift to NPS. The offer specified
that the $9,000 was provided to "establish a fund" with the NPS
comptroller's office. It further stated that the purpose of the
gift was to support "Meyer Institute activities not officially
funded" and that the "Meyer Institute Fund may be drawn upon

' We found no evidence that any purchase was for private use, all expenses
incurred were for the benefit of NPS.

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under the guidance of the director, currently Dr. Paul
Shebalin." President Oliver subsequently accepted the gift on
behalf of the Navy.
                            .Applicable Standards
23. 10 USC 2601, General Gift Funds, grants the Secretary of
Defense, the Secretary of the Navy, and other Service
Secretaries authority to "accept, hold, administer, and spend
any gift . . . . " This statute is one of several that authorize
the acceptance of gifts to the DON. Of particular relevance to
this inquiry are 10 USC 2601 requirements to deposit monetary
gifts in the U.S. Treasury, to avoid accepting gifts that would
reflect unfavorably on the Department, and to avoid accepting
gifts that would compromise the integrity or appearance of
integrity of any DON program.
24. While none of the various Department of the Navy gift
statutes mention solicitation, a January 19, 2001, opinion of
the Department of Justice Office of Legal Counsel states that
similarly worded statutes authorizing the acceptance of gifts
for itself (28 USC 524(d) (1)), the Office of Government Bthics
(5 USC App 403(b)), the Department of State (22 USC 2697(a)),
the Department of Commerce (15 use 1522), and the Department of
Treasury (31 USC 32l(d) (1)) include the implicit authority to
solicit gifts.
25. Volume 12, Chapter 30, Operation and Use of General Gift
Funds, of the DoD Financial Management Regulation sets forth
overall policy for acceptance of gifts under 10 USC 2601.
Paragraph 300502 states:
     Department of Defense personnel shall not solicit,
     fund.raise for, or otherwise request or encourage the
     offer of a gift. Acceptance Authorities shall not
     accept gifts offered contrary to this policy.
26. SECNAVINST 4001.2J sets forth SECNAV's policy and
procedures for acceptance of gifts, including money and personal
and real property. The Instruction defines money as cash,
checks, or other forms of negotiable instruments.

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27. The SECNAV Instruction authorizes CNO, VCNO, and Director
of Navy Staff and other very senior officials to accept gifts
subject to certain limitations. It permits the CNO to delegate
certain gift acceptance authority to subordinates in his/her
chain-of-command and establishes rules that apply to any Navy
official in the gift acceptance process.
28. Paragraph 6b of the SECNAV Instruction prohibits
solicitation by DON personnel unless it is "authorized by
SBCNAV." Paragraph 6g recognizes the value of foundations and
other non-profit organizations in providing support to the
Department.
29. Paragraph 7 provides instructions for processing gifts.
For example, it requires donors to make checks payable to the
DON and reiterates the statutory requirement that all gifts of
money be deposited into.the Treasury. The Instruction mandates
that prospective donors be "advised to sul:>rnit gift offers in
writing explicitly specifying any conditions associated with
gift acceptance." The Instruction also provides that, with
limited exceptions for wounded or injured in the line or duty,
services may not be accepted as gifts. 5
30. OPNAVINST 4001.lF promulgates CNO's policies in connection
with accepting and processing of gifts flowing from 10 USC 2601
and SECNAVINST 4001.2J. It does not address solicitation. This
Instruction grants the NPS President express authority to accept
gifts to the Navy of $12,000 or less. 6 The Instruction specifies
various reporting requirements.
31. Two local instructions, NAVPGSCOLINST 4001.lB and
NAVPGSCOLINST 4001.2B, set out further responsibilities and
requirements regarding gifts to NPS.
32. Paragraph 5 of NAVPGSCOLINST 4001.1B prohibits
solicitation, stating:

1  For purposes of thim report, gift of services exemptions do not apply.
6  No other personnel at NPS are authorized to accept gifts to the Navy for
any amount. Prior to 2010, the NPS President's authority to accept gifts was
$10,000 or less.

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        NPS employees will not directly or indirectly solicit
        gifts for themselves, the Naval Postgraduate School,
        or for the Navy under any circumstances. Gifts
        offered as a result of solicitation will not be
        accepted. NPS employees must not refer a potential
        donor to any non-Federal entity.

33. Paragraph 6, Gifts from Foundations, contains language
about gifts from foundations that is similar to the language in
paragraph 6g of the SBCNAV instruction.
34.     Paragraph 7, Reimbursements, states:
        NPS employees may not accept reimbursement from a non-
        Federal entity for expenses that support the school or
        its mission. 7 Should a non-Federal entity offer to
        support a school related function or event, then that
        offer must be processed in accordance with this
        instruction.

35.     NAVPGSCOLINST 4001.2B defines the President's Gift Fund as:
        composed of donations of funds that are available for
        expenditures for any purpose within the mission of the
        NPS and at the discretion of the President.
                                     Analysis

36. We concluded that RADM Shebalin improperly solicited or
accepted gifts from the Foundation on behalf of the US Navy in
violation of 10 use 2601 and its implementing regulations.
37. As a preliminary matter, we note that if the Foundation
intended to support RADM Shebalin and the Meyer Institute as it
did, it should have formally offered the gift to NPS and
specified that the purpose of the gift was to support the Meyer
Institute as it did in March 2012.
38. We determined that each time RADM Shebalin requested
reimbursement, the Foundation paid an honorarium, or the

'   The Foundation is a non-Federal entity.

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Foundation made a payment to MWR or a vendor for goods and
services incurred by Meyer Institute personnel, RADM Shebalin
improperly solicited a gift from the Foundation. Each time he
accepted a reimbursement check or the Foundation issued an
honorarium or made a payment to MWR or a vendor RADM Shebalin
improperly accepted a gift on behalf of the Navy.
39. We determined that RADM Shebalin did not intend to violate
the rules regarding gifts. Rather, we found that he was
ignorant of the rules. We further found RADM Shebalin's
ignorance of the gift rules not unreasonable based on the facts
before him. Specifically, RADM Shebalin relied on the
information he received from hie predecessor when he become the
Director of the Meyer Institute. RADM Shebalin simply continued
an improper process that was then in place.
40. We noted that RADM Shebalin testified that he used the
Meyer Institute account funds from the Foundation to pay for
items for which appropriated funds could not be used. We did
not find this fact to be evidence that he believed that using
the Meyer Institute account funds was improper. Rather, we
concluded that RADM Shebalin simply used a funding source that
was made available to him.
41. We concluded that RADM Shebalin realized no personal gain
from Meyer Institute account and that the funds were used to
support the Meyer Institute. The lack of personal gain is
mitigating.
42. Nonetheless, we concluded that RADM Shebalin improperly
solicited and accepted gifts from the Foundation on behalf of
the us Navy.
                                      concluaion
43.   The allegation is substantiated.

                                          *****




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                                             10
ENCLOSURE (2)
 NAVAL INSPECTOR GENERAL


   REPORT OF INVESTIGATION
Subj: SENIOR OFFICIAL CASE 201300862; ALLEGED MISCONDUCT
      RADM MERRILL RUCK, USN (RET), FORMER-EXECUTIVE DIRECTOR,
      NAVAL POSTGRADUATE SCHOOL FOUNDATION




                    FOR OFFICIAL USE ONLY
                                                                             201300862

                  Offioe of the Hava1 l:n•pector Qeneral

                            Caae ltmlber:        201300862

                            Report of J:a,,.atipt.ion.

                                    27 Mar 2014

Subj:    SENIOR OFFICIAL CASE 201300862; ALLEGED MISCONDUCT
         RADM MERRILL RUCK, USN (RET), FORMER-EXECUTIVE DIRECTOR,
         NAVAL POSTGRADUATE SCHOOL FOUNDATION

                                         *****

1. On November 21, 2012, the Naval Inspector General issued two
Reports of Investigation (ROis) documenting its investigation of
allegations of misconduct by Vice Admiral Daniel T. Oliver, USN
(Ret), Naval Postgraduate School (NPS) President (Number
201103025), and Dr. Leonard A. Ferrari, NPS Executive Vice
President and Provost {Number 201203947).
 2. While investigating the allegations of misconduct by
 President Oliver and Or. Ferrari, we discovered separate
 instances of potential misconduct by various NPS faculty and
 staff members. One area of potential misconduct that we
·identified was that various faculty and staff members at NPS
 solicited the NPS Foundation (Foundation) and accepted gifts on
 behalf of the U.S. Navy in violation of the applicable gift
 acceptance statute and regulations. In most instances the gifts
 were chec~s to reimburse faculty and staff for expenses that
 they incurred for events that were related to the operation of
 NPS. In other instances, the Foundation made payments to
 vendors for goods and services, such as meals, that NPS faculty
 and staff members arranged and that were related to the
 operation of NPS.




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3. The Foundation is a non-profit charitable organization whose
primary mission is to support NPS. 1 The Foundation supports NPS
through gifts of money and property.

4. Chief Naval Operations (CNO) delegated gift acceptance
authority to the President, NPS, for gifts of $12,000 or less.
No one else at NPS has authority to accept gifts for the Navy.
Gifts greater than $12,000 can only be accepted by the Secretary
of the Navy, CNO, Vice Chief Naval Operations, and Director of
Navy Staff and other very senior officials.  Department of
Defense personnel are prohibited from soliciting gifts.

5. The Assistant for Administration, Under Secretary of the
Navy (AA/USN), deposits properly accepted monetary gifts into
the Navy General Gift Fund. AA/USN, in turn, distributes the
funds to NPS. At NPS, the funds are placed in the President's
Gift Fund account.

6. The NPS Comptroller maintains the President's Gift Fund
account.  Within the President's Gift Fund, there are accounts
for various positions and purposes. These accounts enable the
Foundation or other donors to make directed (earmarked) gifts
for specific areas of research or study or to a specified
school, department, institute, center, academic group, or
faculty or staff member.

7. Merrill Ruck, USN (Ret), was the Foundation's Executive
Director from May 2006 to November 2013. We documented in the
Oliver and Ferrari Reports of Investigation, as well as eleven
subsequent Reports of Investigation, that the Foundation
reimbursed NPS faculty and staff at RADM Ruck's direction.  He
also authorized the Foundation to make payments to vendors for
goods and services, such as meals, that NPS faculty and staff
members arranged and that were related to the operation of NPS.
We found that these payments were gifts to the Navy that were
improperly accepted by the NPS faculty and staff.

8.  In two Reports of Investigation we documented that RADM Ruck
authorized payments from a Foundation account to NPS faculty

1 The Foundation is recognized as exempt from federal tax under section
50l(c) (3) of the Internal Revenue Code.

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members to supplement their salaries.              These payments are
addressed in this ROI.

                                        *****
9.       We formulated the following allegation:

A1leqation:    That RADM Ruck authorized the payment of money by
the Naval Post Graduate School Foundation to 111111
      '     !
     i..    ' , and                 in violation of 18 United
States Code (USC) 209(a), Salary of Government officials and
employees payable only by United States. 2

Conclusion:        The allegation is substantiated.

                                 Find.inqa of Fact

10. Navis is a private corporation that developed ·s oftware for
managing logistics and container terminal operating systems for
cargo movement through ports. 3 On March 31, 2005, Navis donated
$25,000 to the Foundation. On August 7, 2007, Navis donated an
additional $40,000 to the Foundation.  In the letters to the
Foundation accompanying the donations, Navis stated that it
intended that the donations be used to support the Department of
Operations Research (OR} at NPS.

11. After receiving the donations from Navis, the Foundation
did not offer Navis's gift to NPS.  Instead it deposited the
funds into an internal Foundation account, the Navis account.
With funds from the Navis account, the Foundation issued nine
       to three OR Department professors,             Ill
                                                                              ;



12.           and
investigations.
                             are subjects of prior
                  In our ROis •     ..
           ) we determined th ~ · accepted money from the
Foundation in violation of 18 USC 209(a). We found that each of
                                                                !- -
2  18 USC 209(a) is a criminal statue. Accordingly, we coordinated with the
Naval Criminal Investigative Service, Assistants from the Office of the
United States Attorney for the Northern District of California, and an
Internal Revenue Service Special Agent before initiating this investigation.
i  Navis was purchased by another corporation and no longer exists.

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                                                                          201300862


the checks that the Foundation issued to •  . . and .     -
was compensation for performance of their duties as professors
at NPS.

13.             was not a subject of a Naval Inspector General
investigation. The evidence established that .      . . gave
•          a check from the Foundation for $5, 00 O. •    -     ·
testified that based on the fact that •         was his1111
                ; he did not question the propriety of accepting
the Foundation's check.              1111
                                  testified that when he
presented the check to •   -     , he told him it wa's an award
for his work assisting a student with a thesis.    He added that
. ,        was unaware that the check was not an authorized
award issued by the Foundation.

14. RADM Ruck declined to testify in this investigation.
However, he provided a written statement in which he
acknowledged that the Foundation issued nine checks, each for
$5,000, to          , -    ' and -      (6 checks to •   -,
2 Checks to •  - ' and 1 Check to •       - ) . Of the nine
checks, seven were issued after RADM Ruck became the
Foundation's Executive Director in May 2006 at RADM Ruck's
direction.

15.               testified that the Foundation issued checks from
the Navis account based on his recommendations. The only people
that •            identified for checks were •   -, •       -'
and . . . . . . .     1111 stated ~hat checks were only for work
that related to Navis's line of business. He testified:

     These were awards that were made based on work that we
     had done, research that we had done, which was related
     to research that was found beneficial for this company
     called Navis.

16. •         testified that the Foundation set the conditions
when a check could be issued.  He stated:

     They said that they could make awards available if it
     was research that was found to be related or along the
     lines of research that would be beneficial for - or


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                                          4
                                                                               201300862


     beneficia l is perhaps not the right word - but related
     to work of the type that Navis would find beneficial.

17. Regarding the criteria for what was appropriate work for a
check,         stated that the Foundation did not give him
guidance. He stated, "the criteria . • . were not specifically
spelled out."

18.           testified that Navis provided topics about which
they were interested. He said that he in turn recommended
topics to students on which to research and write their theses.
He stated that he recommended more topics to students than those
which Navis had an interest.

19 .           stated that the work for which he recommended that
the Foundation give checks was either advising students on
theses related to Navis's business or for presentations at
conferences that were sponsored by Navis and were called
NavisWorld. 4 He testified the students who wrote the theses did
not recei ve awards .

20 .          also testified that all the work for which he
asked for checks from the Foundation was official government
work. He test i fied that advising students on their thesis was
part of •   and            : 's official duties at NPS. He said,
"It's absolutely part of our job." •       . . also testified that
presentations by . .          at NavisWorld conferences were part
of  II       s professional duties.

21. We discovered two e-mail exchanges between              and  II ...
RADM Ruck that were related to issuing checks.     On May 15, 2006,

•          sent an e-mai l to RADM Ruck in which he provided what
II characterized as "a brief summary of NPS involvement with
Navis . " On May 18,       -    and •   -   · each received a check
for $ 5, 000 from the Foundation.

22. On June 1, 2009,              11111
                               sent an e-mail to RADM Ruck in
which he requested that the Foundation issue three checks, for
$5, 000 each, to     II -         · II               ,   and -           II ...
4 ~ testified that NavisWorld conferences were nattended by several
hundred people from around the world.n

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                                                                        201300862

wrote that the checks for         II
                              ~ and him were for advising
students. The check for          Ill 111111
                                    was for "his presentation
last year at NavisWorld." Five minutes after receiving
II       s e-mail, RADM Ruck forwarded the e-mail to the
Foundations' bookkeeper and wrote, "please make out the 3 checks
for $5,000" from the Navis account. The three checks are dated
June 4 and all signed by RADM Ruck.

23.             acknowledged that he received a check from the
Foundation in 2006 but testified that he could not recall why it
was issued. Regarding the 2009 check,             II 111111
                                                  testified that
a student that he was advising was the primary presenter at a
presentation at NavisWorld in 2008 for which            II 111111
                                                         received
$5,000 in 2009. He stated he stood with the student during the
presentation and fielded questions after the presentation. 5
11        said he did not recall whether he was in a leave
status at the time, but considered his presence part of his
official duties as an NPS faculty member.

24. In his statement, RADM Ruck asserted that the checks issued
to          and            were "awards for excellence in
scientific research." He stated that checks were issued
"[u]nder the provisions" of NAVPGSCOLINST 1650.lE, "The Naval
Postgraduate School Foundation Research Award for Excellence in
Scientific Research." He characterized the checks that the
Foundation issued to           as "honoraria."

                              !pp1icabl.a Standard

25. 18 USC 209 (a) prohibits executive branch employees from
receiving "any salary, or any contribution to or supplementation
of salary, as compensation for his services as an officer or
employee of the executive branch of the United States Government
. • . from any source other than the Government of the United
States."




5  In an e-~ail          I sent RADM Ruck on March 19, 2008, ~
characterized the presentation differently. In that e-mail he wrote that he
had aqreed to deliver "a keynote address" at the upcoming Navis World.

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                                                                                  201300862

26.   18 USC 209(a) further states:

      Whoever, whether an individual, partnership,
      association, corporation, or other organization pays,
      makes any contribution to, or in any way supplements,
      the salary of any such officer or employee under
      circumstances which would make its receipt a violation
      of this subsection-

      Shall be subject to the penalties set forth in section

27. 18 USC 216 provides that both criminal and civil actions
may be brought under 18 USC 209(a). 18 USC 216(b) states that
the standard of proof in a civil action for conduct constituting
an offence under 18 USC 209(a} is proof by a preponderance of
the evidence. 6

28. Our investigations are administrative. As such, a
preponderance of the evidence standard of proof is applicable.

29. Section 209(a) has four elements, each of which must be
established by a preponderance of the evidence, in order to
substantiate an allegation. The elements are:

      (1) receipt of salary or contribution to or supplementation
      of salary,

       (2) as compensation,

       (3) .for services as an employee of the United States, and

      {4) from any source other than the Government of the United
      States.

30.  In applying 18 use 209(a} we look to the Office of
Government Ethics, Memorandum dated July 1, 2002, from Amy L.
Comstock, Director, to Designated Agency Ethics Officials
Regarding 18 USC 209 Guidance (OGE Memo). That memorandum
addresses each of the elements of Section 209(a}.




~ In a criminal prosecution the standard of proof is beyond a reasonable
doubt.

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31. The OGE Memo states that salary or a contribution to or
supplement of salary "can be any thing of monetary value
received by an employee." The memorandum identifies both one-
time payments and periodic payments.

32. The second element, compensation, requires "a connection
between the public employment and the private payment." The OGE
Memo states:
        Specifically, the payment must be compensation for
        undertaking or performing Government service. To make
        out an offense under section 209, there must be a
        direct linkage between the thing of value paid to the
        employee and the official services rendered by the
        employee.

33. The third element requires that the employee rendered a
Government service. The Memorandum states:
        a violation of section 209 requires that compensation
        be paid for "the services an employee provides, or is
        expected to provide, to the Government."
34. The final element is that the payment must be from a source
other than the Government of the United States.
35. The OGE Memo also states that bona fide public service
awards do not violate section 209 because "intent to compensate
for Government services cannot be inferred." As an example, the
OGE Memo states that where an organizat.ion "applied long-
standing written criteria in judging all of the candidates,"
such an award is a bona ride public service award. The OGE Memo
also references an earlier Department of Justice, Office of
Legal Counsel (OLC) opinion in which OLC stated that they "have
recoqnized implicit exceptions [to section 209] for
commemorative awards for public service." 7




7   Gifts Received on Official Travel, 8 Op. Off, Legal Counsel 143 (1984).

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                                    Analy•i•

36. In addressing whether RADM Ruck violated 18 USC 209(a), we
must first determine whether the receipt of the checks by
1111     ,      , and        was a violation of section 209. 8

37. As we reported in our 1111 and        ROis, we determined
that          and •         accepted payments to supplement
their salaries in violation of 18 USC 209(a). The testimonial
and documentary evidence established, by a preponderance of the
evidence, each of the four elements of 18 USC 209(a). They are:

       (1)                  , and        received a monetary
       contribution to or supplementation of salary. The
       Foundation issued to them nine checks, each check was for
       $5,000.

        (2) The Foundation compensated . . - , •      - , and
                The checks issued from the Foundation to them were
       directly linked to their employment as NPS faculty members.
                testified that the Foundation issued the checks
       based on his requests and that he only made requests based
       on work that •        , •   -     , and •  performed that
       was related to their official duty.

       (3)            ,     , and        1111111
                                          received the compensation
       for performing their official duties as professors in the
       OR department.           testified that the Foundation set
       conditions for when a check was appropriate. He said that
       checks were for research that was beneficial to Navia and
       that the work for which he recommended that the Foundation
       give checks was either advising students on theses related
       to Navis's business or for making a presentation at a
       conference on a topic related to Navia. He also testified
       that all the work for which he recommended checks was for
       official work as an NPS faculty member.



8  Although we did not find that            violated 18 USC 209(a) for the
reasons stated above, we did conclude that the $5,000 paid by the Foundation
was a supplement of his income. Accordingly, for purposes of assessing
RADM Ruck's conduct, we included the check that was issued to 111111111

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        (4 ) The payments came from the Foundation, a source other
       than the Government of the United States .

38.  Next, we must determine whether RADM Ruck supplemented
Ill             ,      and   ,      salaries for performing their
offici al government duties. We determined that the evidence
establ ished that RADM Ruck authorized the Foundation's
bookkeeper to i ssue seven of the checks, beginning in May 2006.

39. We determined that the checks to •    -    and .   -
were not "awards for excellence in scientific research" as
asserted by RADM Ruck. NAVPGSCOLINST 1650.lE sets out a
nomination process that was not complied with regarding the
checks that were issued from the Navis account. It states that
nominations "must be submitted electronically to the Executive
Director of the NPS Foundation and the Dean of Research." It
also states that the Dean of Research and the Foundation
Executive Director will accept nominations that include:
  a. A brief but complete description of the research project
     (no more than 5 pages), its achievement(s), the
     role/invol vement of the NPS students in the work, and its
     potential transformational impact on the Department of
     Defense or industry.
  b. Copies of not more than three papers/reports that provide
     evidence in support of the nomination.
  c.A brief (maximum of two pages) resume of each nominee.

40 . The requirements for an award pursuant to
NAVPGSCOLINST 1 650.lE were not met. Accordingly, we determined
that the checks were not awards as RADM Ruck asserted, but
payments in violation of 18 use 209(a).

41. We also determined that even if the checks for ·•   111111
were characterized as honoraria, they were i ssued to •  111111
in violation of 18 USC 209(a). Honoraria paid to federal
employees for presentations related to their official duties
violate 18 use 209{a) absent special circumstances.

                                       Conc1u•ion

42.     The allegation is substantiated.

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                                        *****
                                other lfatter

43. We established in the Oliver and Ferrari ROis, as well as
eleven subsequent ROis, that NPS faculty and staff improperly
solicited and accepted gifts on behalf of the Navy from the
Foundation in violation of the applicable gift acceptance
statute and regulations. In many of these ROis we found that
RADM Ruck told a faculty or staff member that there were funds
available to them and that the Foundation could and would
reimburse the faculty or staff member for job related expenses
they incurred. We found that in some instances, the faculty or
staff member relied upon RADM Ruck and believed that what he was
offering was authorized. In most instances, the faculty or
staff member used the funds from the Foundation for items that
the NPS Comptroller would have paid for from the President's
Gift Fund.
44. RADM Ruck testified as a witness in our investigation of
VADM Oliver that the funds came from donors who contributed
funds to the Foundation for specific faculty members or
purposes. He said that rather than gift those funds to the
Navy, he contacted the faculty member and let them know that the
funds were available for their use in an account at the
Foundation. Thereafter, RADM Ruck authorized reimbursements
from the accounts.
45. There were examples that were more aggravating than just
reimbursing faculty and staff or paying vendors. For instance,
RADM Ruck permitted a NPS staff member to direct a NATO employee
to send a check for more than $41,000 to the Foundation. The
funds were placed into an account at the Foundation that the
staff member later drew upon to fund meals and entertainment
related to NPS events. In another instance, RADM Ruck approved
a plan where receipts from ticket sales for two galas and a golf
tournament, more than $81,000, were deposited into a Foundation
account. In both instances, the Foundation retained from 8 to
10 percent of the deposited funds (more than $10,000) as
administrative expenses. We found that in both instances the
Foundation was used because faculty or staff members believed

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that the funds could not be accepted by the Navy and used for
the targeted purpose.

46. We determined that based on RADM Ruck's position and
experience he should have known that he was improperly avoiding
the gift statute and applicable guidance. His failure to comply
with the requirements had a negative impact on NPS and on the
faculty and staff members that relied upon him .

                                           •••••




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                                             12
ENCLOSURE (3)
 NAVAL INSPECTOR GENERAL


    REPORT OF INVESTIGATION
Subj: SENIOR OFFICIAL CASE 201300866; ALLEGED MISCONDUCT BY
      VICE ADMIRAL PHIUP M. QUAST, USN {RET), SENIOR LECTURER,
      UNITED STATES PARTNERSHIP FOR PEACE TRAINING CENTER,
      NAVAL POSTGRADUATE SCHOOL




      NSGEN reports are internal memoranda and constitute pri ·          d
Inform       that is not releasable outside DON exc           specific
approval of       NSGEN. All requests f           rces outside the original
distribution for NA       G         s, extracts there from, or related
corresponde                    red to NAVINSGEN for coordination and
~ (SECNAVINST 5430.


                       FOR OFFICIAL USE ONLY
                                                                                201300866



                    Office of the Naval Inspector General

                             Case Number:        201300866

                             Report of Investigation

                                     10 Jan 2014

Subj:      SENIOR OFFICIAL CASE 201300866; ALLEGED MISCONDUCT BY
           VICE ADMIRAL PHILIP M. QUAST, USN (RET), SENIOR LECTURER,
           UNITED STATES PARTNERSHIP FOR PEACE TRAINING CENTER,
           NAVAL POSTGRADUATE SCHOOL

                                         *****
                               Preliminary Statement

1. On November 30, 2009, we issued Report of Investigation
(ROI) Number 200900253, stemming from allegations of misuse of
appropriated funds by VADM Philip M. Quast, USN (Ret) . We
found, among other things, that the Naval Postgraduate School
Foundation (the Foundation) reimbursed VADM Quast and Government
and contractor employees assigned to the Center for Executive
Education (CEE) for the purchase of alcoholic and non-alcoholic
beverages that were served at official events.

2.     The ROI included a substantiated allegation that VADM Quast:

         on more than one occasion improperly accepted gifts on
         behalf of the Navy from the NPS Foundation, in
         violation of 10 USC § 2601, SECNAVINST 4001.2J, and
         NAVPGSCOLINST 4001.lD.

3.  In a letter dated May 27, 2010, VADM Daniel T. Oliver, USN
(Ret), the Naval Postgraduate School (NPS) President, informed
us that he had reviewed the ROI and taken action against
VADM Quast for his •substantiated ethical violations." This
included action in response to VADM Quast's ethical violation of
accepting gifts on behalf of the Navy from the NPS Foundation.

4.  On November 21, 2012, we issued two ROis documenting our
investigation of allegations of misconduct by President Oliver



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                                                                              201300866



(Number 201103025), and Dr. Leonard A. Ferrari, NPS Executive
Vice President and Provost (Number 201203847) .

5. While investigating the allegations of misconduct by
President Oliver and Dr. Ferrari, we discovered evidence that
VADM Quast may have improperly solicited funds from the
Foundation and accepted gifts on behalf of the U.S. Navy in
addition to those documented in the November 30, 2009, ROI.   we
address those instances of soliciting and accepting gifts on
behalf of the Navy in this report.

6.  The Foundation is a non-profit charitable organization whose
primary mission is to support NPS. 1 The Foundation supports NPS
through gifts of money and property.

7. As discussed below, the Chief of Naval Operations (CNO)
delegated gift acceptance authority to the President, NPS, for
gifts of $12,000 or less. No one else at NPS has authority to
accept gifts for the Navy. Gifts greater than $12,000 can only
be accepted by the Secretary of the Navy, CNO, Vice Chief of
Naval Operations (VCNO), and Director of Navy Staff and other
very senior officials.

8. The Assistant for Administration, Under Secretary of the
Navy (AA/USN}, deposits properly accepted monetary gifts into
the Navy General Gift Fund. AA/USN, in turn, distributes the
funds to NFS. At NPS, the funds are placed in the President's
Gift FU.nd account.

9. The NPS Comptroller maintains the President's Gift Fund
account. Within the President's Gift Fund, there are accounts
for various positions and purposes. These accounts enable the
Foundation or other donors to make directed (earmarked} gifts
for specific areas of research or study or to a specified
school, department, institute, center, academic group, or
faculty or staff member.

                                            *****

1
    The Foundation is recognized as exempt from federal tax under section
501(cl   (3) of the Internal Revenue Code.

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10.    We fo:r:mulated the following allegation:

Allegation: That VADM Philip M. Quast solicited and accepted
gifts from the Foundation on behalf of the U.S. Navy, in
violation of 10 United States Code (USC) 2601 and its
implementing regulations.

Conclusion:      The allegation is substantiated.

11. On November 13, 2013, we informed VADM Quast of our
tentative conclusion that he improperly solicited and accepted
gifts from the Foundation on behalf of the Navy. We provided
VADM Quast with a copy of our preliminary report of
investigation and gave him the opportunity to comment on our
tentative conclusion.  In his response, dated November 22, 2013,
VADM Quast disagreed with our conclusion. He asserted that we
failed to adequately consider the context and background
surrounding his conduct. VADM Quast denied knowing that when he
solicited and accepted gifts from the Foundation on behalf of
the Navy that such conduct was prohibited. VADM Quast did not
dispute the facts concerning his conduct.

12. we address VADM Quast's comments after the analysis of this
report. Additionally, we provided a copy of his full response
to the cognizant management officials together with this report.

                                       Background

13. From 2002 to October 2010, VADM Quast served as the Navy's
Executive Learning Officer (ELO) and was assigned at CEE.   In
September 2010, VADM Quast became a Senior Lecturer for the
Global Public Policy Academic Group.  On March 11, 2012,
VADM Quast's position was realigned to a Senior Lecturer for the
United States Partnership for Peace Training Center at NPS. 2 In


2
   VADM Quast's personnel record includes the following personnel actions that
are reflected on Standard Form 50s: June 1, 2010, VADM Quast•s appointment
as ELO was extended until September 30, 2010; June 1, 2010, VADM Quast was
placed in a Leave Without Pay status; September 2, 2010, VADM Quast was
returned to duty in a pay status; September 28, 2010, VADM Quast was
appointed as a Senior Lecturer for the Global Public Policy Academic Group;
and March 11, 2012, VADM Quast position was realigned to Senior Lecturer for
the United States Partnership for Peace Training Center.

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each position at NPS VADM Quast was a civilian full time
Department of the Navy {DON) employee.

14. As part of our 2009 investigation of allegations that
VADM Quast misused appropriated funds, we interviewed VADM Quast
on June 4, 2009. At that interview VADM Quast said he was not
aware of regulations that controlled gifts between the
Foundation and NPS.
15. VADM Quast testified that during the time he was the ELO,
retired flag officers had approached him with offers to make
donations to his office. He said that in response to the offers
he spoke with the Foundation's Executive Director, RADM Merrill
Ruck, USN {Ret), in order to arrange a process for the
Foundation to receive gifts and make them available to
VADM Quast and CEE personnel. VADM Quast testified, "We set up
a procedure whereby people could donate money if they wanted to
and I would go to the Foundation and ask for entertainment
funds."
16. Regarding his lack of knowledge of the Navy's gift
acceptance authorities VADM Quast stated at the June 4, 2009,
interview:
     So whether there are regulations like you referred to,
     I'm not aware of them and I didn't -- if there are
     then in my opinion that's the Foundationrs
     responsibility. I set up the alignment with the
     Foundation the way they wanted it.
17. our investigator commented to VADM Quast during the
interview:
         . it just seems in looking at the instruction
     and then looking at the letter it 1 s almost like
     it's ELO is soliciting funds, if you will, from
     the Foundation, saying, "We're requesting a check
     in this amount and then please make it out to
     this person and here's a receipt for what we
     spent." From what I can tell the government
     isn't supposed to do that.


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18. As part of the investigations of misconduct by
President Oliver and Dr. Ferrari, we reviewed Foundation records
for the period of 2009 to 2012. During the review of the
Foundation's records, we discovered that the Foundation issued
checks to VADM Quast or to vendors on behalf of CEE subsequent
to the June 4, 2009, interview. The checks were:

    •   Dated September 11, 2009, to VADM Quast for $228.38 to
        reimburse him for expenses for beer and wine served at an
        ELO course at the University of North Carolina; 3

    •   Dated October 6, 2009, to a vendor for $894.80 to pay for
        beer and wine served at two receptions during a Navy
        Executive Business Course held at the University of North
        Carolina from September 8 to 18, 2009; 4

    •   Dated January 21, 2010, to Tarpy's Roadhouse Restaurant for
        $222.50 for table and linen rentals and a transportation
        fee.  The Foundation's records included a form. dated
        December 23, 2009, that VADM Quast signed in which he
        requested the check; and

    •   Dated February 16, 2010, to Montrio Bistro for $160. The
        Foundation records included an e-mail from RADM Ruck sent
        on February 17, 2010, to the Foundation's bookkeeper. 5 In
        the e-mail RADM Ruck wrote, "Pease make a check out to
        Montrio Bistro for $160. . . .  It is to pay for 4 dinners
        for 4 speakers. Someone from VADM Phil Quast's office will
        pick up the check tomorrow. 11

                                   Findings of Fact

19. As part of this investigation, we interviewed VADM Quast on
December 4, 2012. VADM Quast also provided a written statement,
dated May 24, 2013, which he incorporated into his sworn
testimony.

3
   This check was not addressed in our November 30, 2009, ROI because we were
not aware of it at the time of our report.
• This check was not addressed in our November 30, 2009, ROl because we were
not aware of it at the time of our report.
5  The check is misdated. It should have been dated subsequent to RADM Ruck's
February 17, 2010, e-mail.

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20. VADM Quast testified that after the June 4, 2009, interview
he had concerns about what was appropriate with regard to
dealings with the Foundation. He testified, "I had an opinion
that was questionable, so I took it to the school and said,
again, what is the proper procedure? What are the ground :rules
of using the foundation."

21. VADM Quast said that he spoke with President Oliver two or
three times about the Foundation because "we need guidance." He
testified:

      it was confusing to me that (a) there was no written
      guidance and now at this point in time, I'm wondering
      why we don't have anything on paper because the word
      of mouth goes just so far these days, particularly
      when the IG starts entering into the situation. So I
      actually advised him based on the interviews I had
      that we ought to figure out what the heck the story is
      here because I feel like we•re getting into something.

22. VADM Quast stated that President Oliver responded to his
request by "nodding his head." VADM Quast said he inferred from
President Oliver's nodding that "he was going to do something."
VADM Quast added, "He [President Oliver] listened politely and I
thought that I'd see some action.  I never saw any changes."

23. VADM Quast also stated that other than bringing his concern
to President Oliver that guidance for dealing with the
Foundation should be issued, he had no further discussions about
the Foundation with President Oliver.

24. VADM Quast testified that he received a copy of the
November 30, 2009, Naval IG's report many months after November
2009. 6 VADM Quast stated he had no recollection of President
Oliver ever counseling him regarding the report findings or
otherwise discussing the findings.

25. VADM Quast testified that he also spoke with RADM Ruck
after the June 4, 2009, interview. VADM Quast stated that

   We have no evidence that VADM Quast saw the ROI or was told of the findings
prior to February 16, 2010, the date of the last of the Foundation's payments
relevant to this investigation.

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RADM Ruck told him the process that they had in place was proper
and VADM Quast should continue to make requests directly to the
Foundation.

26. VADM Quast testified that he did not seek guidance
regarding payments by the Foundation from                 or
                             VADM Quast stated that subsequent
to his interview on June 4, 2009, no one at NPS told him that he
was authorized to request reimbursement from the Foundation or
have the Foundation make payments on his behalf. He testified:

     I can't say that anyone said that, but they didn't
     seem to be concerned. They didn't say no, you can't
     do this. Yes, you can. I guess it was, you know,
     they were steaming as before, continuing to do what
     they thought was right.

27. In his May 24, 2013, statement VADM Quast stated that as a
retired Flag officer he was "well-familiar with Non-Federal
Entities (NFEs) ." He stated that "it was never apparent" that
the Foundation was an NFE. Factors that VADM Quast listed that
affected his perception of the Foundation's status were:

     The Foundation maintained office on-base, in the
     school's administrative building.  Foundation
     leadership was in close proximity to the school's
     leadership; both organizations were under the
     direction of retired senior naval officers; and the
     [NPS and foundation) leaders had regularly recurring
     weekly meetings.

28. VADM Quast also addressed that he understood that NPS was
prohibited from accepting support from NFEs, but he believed
that the Foundation was different. He wrote:

     I recognized that NPS could not accept support from
     the private sector and that the Foundation was
     organized as a mechanism that could do so . In that
     regard, it didn't seem terribly different from an
     Nonappropriated Fund Instrumentality like Navy MWR
     which regularly entered into sponsorship agreements


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        and seemed to have the ability to provide support that
        would not be otherwise possible.

29. Also in his May 24 statement, VADM Quast wrote that
President Oliver and Dr . Ferrari "were aware of the Foundation's
support and approved . " He wrote that he frequently met with
President Oliver and RADM Ruck 11 to ensure they were fully
informed of ELO activities." He also stated that Navy senior
leadership "was also made aware to the Foundation's support and
indicated appreciation for that support . "
30 . VADM Quast also asserted in his statement that in 2009 "the
rules for organizations such as the NPS Foundation and the Naval
Academy Foundation were not yet clear, even to those responsible
for enforcing those rules . " In support of his assertion ,
VADM Quast provided an e-mail s tring , sent from J u l y 31 to



                              e-mails
the Foundation made payments directly to vendors and also
reimbursed CEE personnel . The             and llllllwere included
as cc ' s on the e-mail string. ,

31.                      and                   did not respond to
this e-mail string regarding the appropriateness of having the
Foundation make paymen ts or reiml:>ursements on behalf of ELO and
                . did forward the entire e-mail chain to                Ill
                     ', and wrote, I don't know if [the Na~*l
                                             11


Inspector General } would be interested in this. " 8
32 . VADM Quast wrote in his May 24 statement that the June 4,
2009 , interview "was more of an educational background" for the
investigators . He stated that the investigators "never cited to
me a regulation that was being violated." He added: "While the
investigators questioned the process, they never came out and
said regulation XYZ prohibits what you are doing."



7   V1lDM Quast was also cc ' ed on the e-mail string .
1
    our investigation of VADM Quast was then on-going .

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33.  Regarding the form that he signed on December 23, 2009,
requesting reimbursement, VADM Quast testified that he had no
recollection of signing the form and did not know why he would
have signed it. He stated that a CEE subordinate must have
filled out the form and asked him to sign it, and he therefore
did sign the form.

34.  In his May 24, 2013, written statement VADM Quast also
addressed the check made payable to him, dated September 11,
2009, for $228.38 to reimburse him for beer and wine served at
an ELO course at the University of North Carolina; the check
dated October 6, 2009, to a vendor for $894.80 to pay for beer
and wine served at two receptions during a Navy Executive
Business Course held at the University of North Carolina; and
the check dated February 16, 2010, to Montrio Bistro for $160.
Consistent with his testimony regarding the $222.50 check to
Tarpy•s Roadhouse Restaurant, VADM Quast stated that he did not
recall the facts surrounding the issuance of the checks. He
wrote:  "I regret to say that I do not have any specific recall
of these actual instances nearly four years ago." He did,
however, state that each of the checks was issued consistent
with the practice that was in place at the time whereby the
Foundation reimbursed VADM Quast or paid vendors for ELD-related
expenses.

                              Applicable Standards

35.  10 USC 2601, General Gift Funds, grants the Secretary of
Defense, the Secretary of the Navy, and other Service
Secretaries authority to "accept, hold, administer, and spend
any gift . . . . " This statute is one of several that authorize
the acceptance of gifts to the DON. Of particular relevance to
this inquiry are 10 use 2601 requirements to deposit monetary
gifts in the U.S. Treasury, to avoid accepting gifts that would
reflect unfavorably on the Department, and to avoid accepting
gifts that would compromise the integrity or appearance of
integrity of any DON program.

36. While none of the various Department of the Navy gift
statutes mention solicitation, a January 19, 2001, opinion of
the Department of Justice Office of Legal Counsel states that

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similarly worded statutes authorizing the acceptance of gifts
for itself (28 USC 524(d) (1)), the Office of Government Ethics
(5 USC App 403(b)), the Department of State (22 USC 2697(a)),
the Department of Commerce (15 use 1522), and the Department of
Treasury (31 USe 32l(d) (1)) include the implicit authority to
solicit gifts.

37. Volume 12, Chapter 30, Operation and Use of General Gift
Funds, of the DoD Financial Management Regulation sets forth
overall policy for acceptance of gifts under 10 USC 2601.
Paragraph 300502 states:

     Department of Defense personnel shall not solicit,
     fundraise for, or otherwise request or encourage the
     offer of a gift. Acceptance Authorities shall not
     accept gifts offered contrary to this policy.
38. SECNAVINST 4001.2J sets forth SECNAV's policy and
procedures for acceptance of gifts, including money and personal
and real property. The Instruction defines money as cash,
checks, or other forms of negotiable instruments.
39. The SBCNAV Instruction authorizes CNO, VeNo, and Director
of Navy Staff and other very senior officials to accept gifts
subject to certain limitations. It permits the CNO to delegate
certain gift acceptance authority to subordinates in his/her
chain-of-command and establishes rules that apply to any Navy
official in the gift acceptance process.
40. Paragraph 6b of the SECNAV Instruction prohibits
solicitation by DON personnel unless it is "authorized by
SECNAV. 11 Paragraph 6g recognizes the value of foundations and
other non-profit organizations in providing support to the
Department.
41. Paragraph 7 provides instructions for processing gifts.
For example, it requires donors to make checks payable to the
DON and reiterates the statutory requirement that all gifts of
money be deposited into the Treasury. The Instruction mandates
that prospective donors be nadvised to submit gift offers in
writing explicitly specifying any conditions associated with
gift acceptance." The Instruction also provides that, with

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limited exceptions for wounded or injured in the line or duty,
services may not be accepted as gifts. 9

42. O~NAVINST 4001.lF promulgates CNO's policies in connection
with accepting and processing of gifts flowing from 10 USC 2601
and SECNAVINST 4001.2J.  It does not address solicitation. This
Instruction grants the NPS President express authority to accept
gifts to the Navy of $12,000 or less. 10 The Instruction
specifies various reporting requirements.

43. Two local instructions, NAVPGSCOLINST 4001.lE and
NAVPGSCOLINST 4001.2B, set out further responsibilities and
requirements regarding gifts to NPS.

44.  Paragraph 5 of NAVPGSCOLINST 4001.lE prohibits
solicitation, stating:

         NPS employees will not directly or indirectly solicit
         gifts for themselves, the Naval Postgraduate School,
         or for the Navy under any circumstances. Gifts
         offered as a result of solicitation will not be
         accepted.  NPS employees must not refer a potential
         donor to any non-Federal entity.

45. Paragraph 6, Gifts from Foundations, contains language
about gifts from foundations that is similar to the language in
paragraph 6g of the SECNAV instruction.

46.      Paragraph 7, Reimbursements, states:

         NPS employees may not accept reimbursement from a non-
         Federal entity for expenses that support the school or
         its mission. 11 Should a non-Federal entity offer to
         support a school related function or event, then that
         offer must be processed in accordance with this
         instruction.



   For purposes of this report, gift of services exemptions do not apply.
10 No other personnel at NPS are authorized to accept gifts to the Navy for
any amount. Prior to 2010, the NPS President's authority to accept gifts was
$10,000 or less.
11 The Foundation is a non-Federal entity.

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47.     NAVPGSCOLINST 4001.2B defines the President's Gift Fund as:

        Composed of donations of funds that are available for
        expenditures for any purpose within the mission of the
        NPS and at the discretion of the President.
                                            Analysis

48. We concluded that VADM Quast improperly solicited and
accepted gifts from the Foundation on behalf of the US Navy in
violation of 10 USC 2601 and its implementing instructions.
Pursuant to the applicable gift guidance, VADM Quast was not
authorized to accept gifts on behalf of the Navy. Further, the
requests made to the Foundation for reimbursement or payments to
vendors were solicitations. Soliciting the Foundation for gifts
is not permitted.

49. We determined that during our interview with VADM Quast on
June 4, 2009, he was informed that accepting reimbursements or
having the Foundation make payments was improper. His testimony
on that day was, "So whether there are regulations like you
referred to, I'm not aware of them . . . . "
50. VADM Quast testified that after the June 4, 2009, interview
he voiced his concerns with President Oliver. He said that
President Oliver nodded his head but took no further action. We
determined that under the circumstances, VADM Quast did not have
a reasonable justification to continue soliciting and accepting
gifts from the Foundation simply because President Oliver failed
to tell him to discontinue the practice.
51. We also determined that even if RADM Ruck told VADM Quast
that the practice that was in place was appropriate and should
continue, VADM Quast's reliance on RADM Ruck's advice was not
reasonable. VADM Quast failed to seek guidance from appropriate
NPS personnel, which included •            - and •   · Most
telling, VADM Quast testified that no one said "no, you can't do
this.   . . . [Or] Yes, you can."




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VADM Quast•s November 22, 2013, Response to Preliminary Report

52.  In his response to our preliminary report, VADM Quast
asserted that our investigator's comment to him during his
June 4, 2009, interview that soliciting and accepting
reimbursements from the Foundation was improper did not put him
"on notice." He stated that "such innocuous comments must be
considered from the perspective of the individual subjected to
the 3-hour interview." He acknowledged, however, that the
comment did prompt him to "raise the issue to the NPS President
for clarification."
53.  VADM Quast also stated that, in our preliminary report, we
failed to consider the portions of his May 24, 2013, written
statement. In his statement, he wrote that after the interview
with our investigator, he spoke with President Oliver and
RADM Ruck.   VADM Quast wrote that President Oliver told him that
he was not aware of any problems with soliciting and accepting
reimbursements from the Foundation but would seek advice from
                    and inform VADM Quast "if any changes were
                         I


required. 11
             VADM Quast also wrote that he informed RADM Ruck of
the investigator's concerns. VADM Quast added, in his May 24
statement, that several weeks after speaking with
President Oliver, he met with President Oliver again, and "He
informed me that his staff was still working the issue but that
no changes had been made." VADM Quast wrote that RADM Ruck gave
him a similar response.



                                                                            I· ·
54.   Finally, VADM Quast addressed the e-mail string, sent from
Jul.y 31 to August 27, 2009, which we addressed above. This
                                                    and       In
the e-mail,                          stated that the Foundation
made payments directly to vendors and also reimbursed CEE
personnel. VADM Quast stated that                  and .•  "had
every opportunity to step in and clarify the rules for
everyone . "
55. We were not persuaded by VADM Quast•s assertions. We
determined that VADM Quast had a reasonable doubt that
soliciting and accepting reimbursements from the Foundation was
improper . By his own testimony, VADM Quast acknowledged that he

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spoke with President Oliver and RADM Ruck based on the
investigator's comments. We concluded that a reasonable prudent
senior official with VADM Quast•s experience and training should
have sought and obtained a definitive ethics opinion and should
have ref rained from engaging in questionable conduct until he
had the opinion. Accordingly, we stand by our conclusion.

56. we do note that                  and     should have 1111
affirmatively acted on the e-mail and provided NPS leadership,
faculty, and staff definitive guidance regarding accepting
reimbursements or having the Foundation make payments.
                                        Conclusion

57.   The allegation is substantiated.

                                           *****




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ENCLOSURE (4)