oversight

COI (NSF)

Published by the National Science Foundation, Office of Inspector General on 1995-05-30.

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

i.   . =-

                                               OFFICE OF INVESTIGATIONS

                                      CLOSEOUT MEMORANDUM




            There was no closeout written at the time this case was closed. The following information was
            extracted fiom the file in conformance with standard closeout documents.

            Our office was informed that the subject' was alleged to have participated in awards to his home
            in~titution.~Our investigation found that the subject participated personally and substantiallyin the
            process for deciding on the funding levels for two proposals fiom subject's university. The subject
            was reprimanded by NSF Deputy Director.

            Accordingly this case is closed.
                              NATIONAL SCIENCE FOUNDATION
                                  4201 WILSON BOULEVARD
                                 ARLINGTON, VIRGINIA 22230



                                                 May 30, 1995

 OFFICE OF THE
DEPUTY DIRECTOR


CONFIDENTIAL
To:               Linda G. Sundro
                  Inspector General

           ')Deputy
              I
From:             Anne C. Petersen
                        Director
Re:               Investigation No. I95030007

This is in response to your confidential investigation report concerning actions oi
               while serving as a program officer at NSF under an Intergovernmental
Personnel Act (IPA) agreement with the                                               . You
determined that            had participated personally and substantially in the process for
deciding on the funding level for two proposals from          . When the Department of
Justice declined to pursue criminal or civil action in this matter, you referred it to me for
appropriate administrative action. At the same time, you recommended that NSF's
Designated Agency Ethics Official (DAEO) provide ethics counselling to '            ~  -
concerning his recusal from participating in any matter involving           andthatNSF
reopen the assessment of funding levels for all recommended awards in the
program.
We have now completed action on your recommendations. First, based on considerations
of timeliness, I asked that the funding levels for all recommended awards in the
program be reevaluated. That was done in mid-April. Following a mid-May meeting with
          ,I issued a letter of reprimand. Both the letter of reprimand and a memorandum
describing the reassessment process are attached.              met recently with the DAEO
for the recommended counselling session.
I want to take this opportunity to thank you for you timely handling of this investigation. It
permitted us to resolve the matter in a way that met both the desires of the         pro.gram
for rapid award announcement and NSF's standards for ethical conduct in conflict of
interest situations.

Attachments
cc:     Lawrence Rudolph, Acting General Counsel
                   , OD
                          mi WILSON BOULEVARD
                         ARLINGTON, VIRGINIA



                           May 17, 1995




TO:

          Anne C. Petersen, Deputy Director
                                                    \
RE:       Official Reprimand
This memorandum reprimands you for your failure to comply with
applicable conflict-of-interest standards while serving the National
Science Foundation under an Intergovernmental Personnel Act (IPA)
assignment.
I have reviewed the findings of the--inspector General's report on
Investigation No. 195030007, dated arch 30, 1995 (attached). I also
reviewed your March 28th comments on'the draft Inspector General
report.                               t
                                                                         *A


The Inspector General concluded that ' you participated personally and

deciding ~hetherto fund the
                           .
substantially in two matters involviag your home institution, tho
                              Although you avoided taking part in
                                                             two
proposals submitted under Phase I1 of the                , you did
participate personally and substantially in the process of deciding on
funding levels for these two proposals. Since the Department of
Justice has declined to pursue civil or criminal action in thi8
matter, the Inspector General referred your case to me for appropriate
administrative action.               t



The unlawful participation
 I    r
                           in the fuhding
                 proposals represehted    process
                                       very       for
                                            serious andtho
                                                         inexcusable
misconduct on your part. You violated the terms of your own written
recusal notice, and you disregarded written advice you received from
the Office of the General Counsel.' .
The public has a right to be confident that the NSF strictly adheres
to basic ethical principles. Such public confidence is vitally
important to the Foundation. Accordtngly, I have ordered appropriate
decisions involving the                         .
NSF staff to conduct a comprehensive re-evaluation of the funding
                                                 I am also directing
you to contact Charles S. Brown in th.e Office of the General Counsel,
within the next five working days, to set up an ethics counselling
appointment with him.
YOU  IPA assignment with the Foundation is scheduled to expire on June
12, 1995. The Foundation will not consider an extension of your
current IPA agreement. After you leave the NSF, the Foundation will
not permit you to become a PI, co-PI, or the equivalent on either of
the two                                                   in question.
NSF will not approve your receipt of compensation in future budgets of
these awards.
I am aware of the fact that you have relatively limited experience
here at NSF. I also know that you have done much good vork in helping
to establish the1       , .    during your brief tenure here. While
not excusing your ethical misconduct, these two factors led me to
impose less severe discipline than I might otherwise have done under
these circumstances. I trust that such misconduct will not be
repeated.
If you have any questions about the contents of this memorandum,
please contact the Acting General Counsel, Lawrence Rudolph.
Attachment
cc:   w/o Attachment
      OGC
      DGA
      HRM
                                NATIONAL SCIENCE FOUNDATION
                                    4201 WILSON BOULEVARD
                                   ARLINGTON, VIRGINIA 22230



                                            30 March 1995

.   . OFflCEOF                                           .   .
 INSPECTOR GENERAL




              To:


            From:
                        Inspector General

       Subject:         Investigation No. I95030007

        This report concerns                       , who holds a position at NSF under the
Intergovernmental Personnel Act (IPA) while he is on leave from the
                    , where he is an associate professor of Natural Resources. We investigated
to determine whether                had participated personally and substantially in decisions
regarding his home institution, in violation of federal law.' We have determined thbi, although
           avoided taking part in deciding whether to fund the two proposals from his home
institution, he did participate personally and substantially in the process for deciding on the
funding level for these proposals. The Department of Justice has declined to pursue criminal
or civil action in this matter, so we refer it to you for appropriate administrative action.

                                                   1.
                                               Background

        The                      is a Vice-presidential initiative to1
                           -                                                  -   -
NSF co-sponsors this initiative with the National Aeronautics and Space Administration (NASA)
and the National Oceanic and Atmospheric Administration (NOAA). The                            is
located on                     , 1   ..
                                     I                                       , and consists of
approximately 30 people. The                   -    receives policy advice from an interagency
steering committee.                          , the Assistant Director for NSF's - .
directorate, represents NSF on this committee.'                       of          serves as the
Director of the     '    program, and                       of NASA is his deputy.
and                    of NSF serve as ~ssistant ~irectorsfor                 '  I, respectively.




    '18 U.S.C. g 208; 5 C.F.R. part 2635 subpart D (but see discussion in note 13, below).

              ,   ,                                                 and should not be contacted about issues
involving         .
        As the Assistant Director of Science for                   is responsible for the Phase I
                                                                          9

and Phase I1 Science programs. The Phase I stage of the                       involved selecting
existing environmentaVeducation outreach programs to develop the science component of
                                .3
                                 '  The Phase I1 stage of             was initiated by an NSF
announcement of oWo7rtunity,soliciting proposals to be submitted for peer review. The
proposals were submitted to the             office and NSF handled the administrative details.
Drs. '                ofNSF's '              directorate and                of NSF's
                                                                                   '-




                                                         -
                         directorate were responsible for ensuring that the administrative tasks
and        - .
charged to NSF were accomplished. Drs.            *    and   a- * managed the panel review and
served as chairs for the panel subgroups for science and education, respectively.

                                                    11.
                                         FindingsISummary of Facts

                                                        A.
                                     Dr.       . - and the       '    '       '   Project

        Dr.        joined NSF on 13 June 1994. Dr.       talked with Assistant General Counsel
Charles S. Brown, NSF's Acting Designated Agency Ethics Official (DAEO), about conflict of
interests issues. On the basis of these conversations, on 16 June 1994, Dr. .      submitted a              *

letter of recusal to Dr.           , Director of the        program,  which  read as follows:

       "As an NSF IPA, I am required to notify you that I should not be involved in any
       way with matters dealing with . . the         .                   -      . . . in
              prelated issues. "

On 7 September 1994.' the DAEO issued a letter to Dr.      certifying his financial disclosure
form and reiterating that he was "disqualified from participating - by decision, agproval,
disapproval, recommendation, or rendering of advice -in any matter involving" the '
             *




                               Evaluation of the                     Phase II Proposals

       After the program announcement was issued and Phase II proposals were received at the
         office - including two from " - the peer review process was initiated. The
                                                         '

review process consisted of mail reviews and a special emphasis review panel which met from
1-3 February 1995. The panel format consisted of plenary meetings and subgroup meetings:
there were three subgroups, two of which reviewed and rated science proposals, while the other
group assessed education-related proposals. Each subgroup recommended 4-6 of their proposals



    3~r.         '   handled all Phase I activities involving the                       7   b   ..   - ..
for award. We are satisfied that Dr.            did not participate in any way in subgroup
deliberations on the two Phase 11 proposals from the \   ' during the review process.
                                                                  '




       On 3 February 1995, at the end of the special emphasis panel deliberations, Dr.
was responsible for reviewing the recommended science proposals for content and identifying
which components of the proposed projects were needed for the             program and which
were not. Dr.            ,, also an NSF IPA with the           program, was responsible for
                                                                          '

reviewing the education proposals. TRese reviews were undertaken in preparation for subsequent
proposal funding decisions.

       The review process completed by Drs. '          and           was an analysis of
elements present in each of the proposals. Funding for the Phase II portion of the '
program was to support projects in each of the four program element^.^ The total target
funding for all Phase 11 awards was $2.5 million, but the proposals recommended for funding
requested a total of $3.26 million. As a result, the projects recommended for funding needed
to be cut an average of 23 % . Thus, in addition to review of the proposals in relation to the four
program elements, Drs.          and             were responsible for making initial suggestions
regarding funding reductions.

        In preparation for a telephone conference call to begin the process of cutting the budgets
of the proposed-projects.-Dr. '       %viewed
                                         -                 ____ science proposds, including the
                                            ----- all of the
             The science proposals reviewed had a requested funding Gount of $2. K2 million.
Dr.        reviewed each of the proposals for program content in relation to the         ,   program
elements. He then began typing into a document on his computer a list of the ten proposals, and
began adding his technical observations for each proposal, along with preliminary rough-cut
proposed funding levels for six of the 10 science proposals. These six proposals requested a
                                                                                                  *
total of $1,654,000, and Dr.          suggestions cut that amount by 18% ; however, Dr.
                                        '
                                   '


proposed funding levels suggested that three of the six projects receive the full funding
requested - including one of the ' ' ' ' proposal^.^ On the document he prepared prior to the
telephone conference call, Dr.        did not address the last four proposals on his list, including
the other        proposal.

       Dr.       told us that the funding levels he typed into this document were rough proposed
funding levels that he felt the proposing institutions could accommodate and still achieve the


    4 ~ four
           e elements were science measurements, development of unified support materials, training plan and
implementation, and evaluation.

     me conference call was between Drs.                                  I   -
     %I  his comments on our draft report, Dr.       said that he "left the requested amounts as is because I needed
input from the others participating in the conference call in order to determine what proposed science reductions
would be required." From our perspective, Dr.                comments support a conclusion that he participated
personally and substantially in budget discussions involving the      "  propods.
projects'           program elements. He anticipated that additional funding reductions would
still be necessary to meet the targeted budget of $2.5 million.

       Dr -       printed out his list and faxed it to Dr. ' ' -     prior to the conference call
between Drs. .                          , and     - - on 22 ~ebruary1995. The purpose of the
conference call was to discuss the proposals as they related to the four                 Program
elements, and to refme (that is, cut further) Dr.       and             ,proposed funding levels.
Dr. - , admitted to us that during the conference call he participated in the discussions of how
much money to allot to each proposal, including the two          proposals. (Indeed, he could not
have done otherwise, since Dr.         was the only person involved in this conversation who was
                                     '



intimately familiar with the science proposals.) As a result of the funding discussions in the
course of the conference call, the proposed funding levels for the 10 science proposals were
reduced an average of 25 %, to a total of $1.6 million. The proposed funding levels for the
      proposals were cut by 16% (from $327,000 to $275,000) and 14% (from $174,000 to
  '"




$150,000). The reductions for the other proposal budgets ranged from 1% to 82% with five
exceeding 16% and three less than 14% .

        Following the conference call, Dr.        generated a revised list of proposals and
proposed funding levels which incorpomted the decisions reached in the course of the conference
call. The revised list was then distributed by Dr.                  at the next meeting with
Drs. .'               , and        on 27 February at NSF. Further reductions in proposed
funding levels were made at this meeting. This time, Dr.         left the room when the '
proposals were discussed. As a result of the 27 February meeting, the proposed funding total
for the 10 science proposals was reduced further, from $1.6 million to $1.4 million. The
proposed funding level for one of the '     proposals was further reduced (from $275,000 to
$200,000) and the other remained at $150,000.

         Upon agreement on the proposed funding levels arrived at during this meeting,
Drs                -, and . . , . , were to begin fmd budget negotiations with the proposing
institutions, using the funding amounts as discussed in the February 27 meeting. Dr. '     told       '


us that it was his understanding that the fiid funding negotiations with           were to be
completed by Drs . n. -          ana     , while Dr. ' - was to undertake negotiations with the
institutions that had submitted the other successful science pr~posals.~

                                                    C.
                               Assessment of Dr.         .    Participation

        Dr. "     told us that he understood that he could not be involved with any decisions
                                                                        ..
during the peer review process which would affect his home institution,    , and that he could
not be involved in negotiating the budgets of any proposals with     . However, Dr.       said    '




     '~hesenegotiations had not been completed at the time we began our investigation on 9 March 1995, and it
is our understanding that the negotiation process has been on hold pending completion of our investigation.
he had concluded that it was acceptable for him to be involved in the process of allocating funds
among the awardees, including        ' , by proposing reduced funding levels. Dr. . never
                                         '.


consulted with either his ethics counsellor or NSF9s DAEO. In our view, the scope of the
direction Dr.       had received from the DAEO,as well as his recusal, clearly prohibited him
from any involvement with any           proposal or project, and he had no reasonable basis for
concluding otherwise without consulting with an agency conflicts official.* The DAEO had
informed Dr.         in writing that he was "disqualified from participating - by decision,
approval, disapproval, recommendation, or rendering of advice - in any matter involving" the
                                Although he heeded this prohibition during significant parts of
the proposal evaluation process (as described above), we have concluded that
participated personally and substantiallyg in interim budget reduction discussions involving the
       proposals during the 22 February conference call.

        On the basis of all the evidence, NSF should determine what administrative actions, if
any, should be taken against Dr.         . In addition, NSF should evaluate whether action is
necessary to ensure that programmatic decisions have been made wiihout a real or apparent
conflict of interest. To do so, NSF should assess whether, from the perspective of a reasonable
person with knowledge of the relevant facts, Dr. ' - - participation creates an appearance that




      'Dr .      told us that the science proposals, including the two         proposals, were handed to him by
Dr. -      , Like Dr.        , Dr.          is an IPA. Their relationship can best be described as one involving
equivalent colleagues; they do not have a subordiiate/supervisorrelationship. Dr. '     came to NSF in September
1994 and began to work on the ' ' ' program in December.

         Dr.         stated that he asked Dr. '       if it was appropriate for him to have and review the
proposals. According to Dr.            Dr.        stated that it was acceptable for Dr.        to review the
proposals because the review process was over, award recommendations had already been made, and he was a
senior scientist charged with developing the           science program based on the proposed activities. Dr. "
                                                   "
told us that although she was aware that Drs. '            and      took the proposals, she was not sure whether or
not the ' . ' proposals had been included in the proposals that Dr. -          took with him. She did not recall
Dr. '      questioning her with regard to the ' ' proposals. In our view, Dr.
                                                  '                                  .- knew that NSF's DAEO had
determined that he was to have no involvement whatsoever with the        ,proposals, aud therefore any conversation
he had with his colleague Dr.           was a wholly
                                                -
                                                     inadequate basis upon which to involve himself in part of the
decision making process involving the two         proposals, namely the 22 February conference call. If Dr. '
was unsure whether to participate, he should have either contacted the D M 0 or elected not to participate.

     'The regulation provides the foIlowing guidance in this regard: "To participate substantially means that the
employee's involvement is of significance to the matter. Participation may be substantial even though it is not
determinative of the outcome of a particular matter.    ...  While a series of peripheral involvements may be
insubstantial, the single act of approving or participating in a critical step may be substantial. Personal and
substantial participation may occur when, for example, an employee participates through decision, approval,
disapproval, recommendation, investigation or the rendering of advice in a particular matter." 5 C.F.R.
  2635.402@)(4).
he influenced the proposal evaluation process in favor of '    ,lo then NSF should undertake
to begin again the process of assessing the funding levels for the ' '     science proposals
recommended for award, using individuals with no conflict, or appearance of a conflict, of
interests regarding any of the proposals recommended for award.


                                           Dr.             Comments

          On 28 March 1995 Dr.           reviewed our draft report. After reviewing the repbrt,
Dr.         reiterated that he had received approval from Dr.                    "to read the
proposals both for science activities proposed and consider how best to trim all the
budgets . . . .oll Based on Dr.               comments, on 29 March, we again interviewed
Dr.          . Dr.       . signed an affidavit stating again that she did "not recall having any
conversations with Dr.           concerning the exact proposals he was taking or how he would
handle the programmatic decisions. " Dr. '        'further stated that had Dr. ,
                                                       '
                                                                                     questioned her
regarding the propriety of his handling the financial aspects of the         proposals she "would
have emphatically advised him to avoid doing so, and to meet with WSF's DAEO] before he
did. " 12

        We cannot reconcile these statements by Dr.         . and Dr. .      . Nonetheless, it is
clear that Dr.       had been specifically instructed by NSF's DAEO not to "participat[e] -by
decision, approval, disapproval, recommendation, or rendering of advice - in any matter
involving" -       . It is also clear that Dr. ' did not follow this instruction. Any
conversation that Dr. ' believes he may have had with his colleague Dr.                should not,
in our view, affect a decision to hold Dr.       ' personally accountable for not following these
instructions; instructions that he received personally.

                                                       m.
                                              Recommendations

        Because Dr.         participation in this matter was personal and substantial, we referred
this matter to the Department of Justice, as required by law. The Department declined to pursue
criminal or civil action against Dr. . . , deferring to administrative action by the agency.




     ' O w. 5 C.F.R. $ 2635.101@)(14): Federal government 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."

     ''see   note 8, above.

     12~r.             ,      .   andDr.     . statement are   attached.
Accordingly, NSF should now evaluate what administrative actions would be app~qriate.'~
In addition to any administrative action that NSF may take, we recommend that NSF's DAEO
provide ethics counselling to Dr.         concerning his recusal from participating in any matter
involving       , particularly regarding administration of any awards that may be made to                   '




        We also recommend that NSF assess whether, from the perspective of a reasonable
person with knowledge of the relevant facts, Dr.         participation creates an appearance that
he influenced the proposal evaluation process in favor of ' ' . If so, we recommend that NSF
begin again the process of assessing the funding levels for the                science propods
                                                                                     '




recommended for award, using individuals with no conflict, or appearance of a conflict, of
interests regarding any of the proposals recommended for award.

        Please advise us of the actions taken (if any) in response to our recommendations.


cc:     Acting General Counsel




     13The Office of Government Ethics has determined that the Standards of Ethical Conduct for Employees of the
Executive Branch, 5 C.F.R. part 2635, do not apply to individuals who hold IPA positions. Therefore, NSF can
not take action against Dr.        pursuant to 5 C.F.R. $ 2635.106, which covers corrective or disciplinary actions
for violations of part 2635. Nevertheless, in our view NSF has several options available, depending on its
assessment of the seriousness of Dr.            conduct: (1) Negotiate an amendment to the IPA agreement to modify
Dr.          duties and responsibilities at NSF; (2) Terminate the IPA agreement with         '; (3) Determine that
                                                                                 .               .
Dr. ' :' 4 conduct constitutes a "serious deviation from accepted practices in .. carrying out .. activities funded
by NSF" and take appropriate action under 45 C.F.R. part 689; or (4) Determine that Dr.               * conduct is a
"cause of so serious a nature that it affects the present responsibility of" Dr.  and take appropriate action under
45 C.F.R.part 620.