While the FBI investigates allegations of bribery and money laundering in his former workplace, federal CIO Vivek Kundra has taken leave from his job.
Just days after his appointment by President Barack Obama as the nation's top technology official, Kundra departed for an unspecified period. The White House Press Office confirmed his leave Friday, a day after the arrest of a District of Columbia employee who worked under Kundra last year.
A criminal complaint against 40-year-old Yusuf Acar accuses him of one count each of conspiracy to commit bribery, money laundering, wire fraud, and conflict of interest.
Kundra has not been accused of, or charged with, any crimes and law enforcement sources said Friday that he has not been implicated.
Court records state that Acar, the District's information system security officer, engaged in a variety of schemes to funnel money from contracts and payroll by filing inflated invoices and forging timecards for ghost employees.
The affidavit for arrest indicates that several other people were involved, although most were identified by initials only and at least one District of Columbia employee apparently cooperated with authorities.
Former city employee Sushil Bansal, 41, is the only other person who has been arrested, but the investigation is ongoing. The criminal complaint against Bansal alleges one count of conspiracy to commit bribery and one count of conspiracy to launder money. He has been released and admonished not to engage in foreign transactions.
It is unclear whether others identified in court records were aware of the alleged schemes and whether they were outside contractors or government employees.
Neither Kundra's name nor his initials appear anywhere in court records that were unsealed Thursday after Acar's arrest. Employees with the District of Columbia said they don't believe Kundra has been implicated, and sources with the Office of Management and Budget said Thursday that they aren't aware of any suspicion directed at Kundra.
However, at the very least, the charges could represent a distraction while Kundra attempts to ensure security and accountability for all of the federal government's technology and IT systems. He served as the District of Columbia's CTO in 2008, overseeing Acar and nearly 300 other employees, when the criminal activity allegedly occurred.
Neither the OMB nor the White House would immediately respond to questions about the reasons for Kundra's leave, the length of it, nor who will take over his responsibilities. White House Press Secretary Robert Gibbs told reporters Thursday that the administration was aware of the investigation but he would not say when they learned about it. He referred to it as a "serious matter."
The affidavit for Acar's arrest indicates that he intercepted e-mail from the Office of the Inspector General that referred to or inquired about at least one of the schemes.
OIG records show that a 2008 audit of "contracting actions" through the Office of the Chief Technology Officer was one of two risk assessment cases expected to continue into 2009.
"Contracting problems experienced by the District continue to be exacerbated by the structural deficiencies and ineffective methodologies used to award and administer contracts," a report on OIG's 2008 activities states (PDF). "An absence of basic systems for contract records management and data retrieval present formidable challenges for managing procurement functions spread over 80-plus agencies, and for planning procurements, fostering competition among prospective bidders, and ultimately obtaining best value in terms of price and quality."
The report also shows that five Office of the Chief Technology Officer investigations were closed in 2008. Three appear to have been referred to other agencies for further review. OIG lists the Department of Justice as one of the entities that it referred cases to in 2008, though it is unclear exactly how the Department of Justice's case against the technology office began.
Acar is being held without bail and is scheduled for a preliminary hearing in federal court on Tuesday. An FBI agent is expected to testify and the judge will likely determine whether to allow bail.
The court documents state that Acar told a co-conspirator that he would "jump on the next plane, go to Turkey, and disappear," if he thought authorities were closing in on him. Authorities also said they found $70,000 in cash at Acar's home.
Acar's alleged co-conspirator, Bansal, is president and CEO of Advanced Integrated Technologies Corp., according to the company's Web site. His company biography states that he worked as a project manager in Washington, D.C., government and implemented its financial system before founding AITC, which has several government contracts. It also states that he provided IT consulting and project management services to the Department of Defense, the U.S. Navy, the Department of Homeland Security, the Commerce Department, Housing and Urban Development, the Department of Agriculture, and the Federal Communications Commission.
The arrest warrant states that Bansal's company gave Acar and someone referred to as "Mr. B.M." a $104,166 quote for 2,000 units of McAfee's Foundstone software, while McAfee generated a quote for 500 units of the scanning software designed to comply with health privacy rules. In later conversations, with someone identified as C.W., Bansal mentioned that McAfee got $34,000 for the order, according to an arrest affidavit. The court documents state that "C.W." was not involved in that scheme from the beginning but learned of it before being bribed to stay quiet. The FBI states that he turned over his share of the proceeds from the crime.
Court records state that the conspiracy involved at least three more schemes in which the suspects used ghost employees, or no-shows, to collect more of the District's money.
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