Financial Ties Between Defense Research Director and Contractor Raise Conflict of Interest Concerns; POGO Calls for Inspector General Review

For Immediate Release

Contact: 

Keith Rutter
Phone: 202-347-1122
Email: pogo@pogo.org

Financial Ties Between Defense Research Director and Contractor Raise Conflict of Interest Concerns; POGO Calls for Inspector General Review

WASHINGTON - Potential conflicts of interest between the director of the Pentagon’s premiere research agency and a defense contractor she founded and still maintains a financial relationship with warrant a review by the Department of Defense Inspector General, the Project On Government Oversight (POGO) said today.

In a letter sent to Inspector General Gordon S. Heddell, POGO Executive Director Danielle Brian said that the Defense Advanced Research Projects Agency’s (DARPA) dealings with RedXDefense, the company co-founded in 2005 by DARPA Director Regina Dugan, raise many concerns.

DARPA has awarded about $6 million in contracts to RedXDefense, with $1.75 million of that amount coming after Dugan became director in July 2009. Dugan’s father is RedXDefense’s chief executive officer and her uncle is on the board.

While Dugan has recused herself from dealings with RedXDefense, she never divested her financial holdings in the company. She has also disclosed that RedXDefense owes her $250,000 from a “loan/note.”

“Almost as troubling as the appearance of a conflict of interest are comments attributed in the press to DARPA officials who seem to take a blasé attitude toward Dugan’s relationship with RedXDefense,” Brian said. “The inspector general should determine whether a simple recusal is sufficient and whether DARPA’s ethics policies should be strengthened.”

POGO’s letter calls for Heddell’s office to look at how DARPA has handled conflicts of interest over the last four and half years, whether DARPA’s interpretation of ethics rules have changed over time, how DARPA’s ethics policies compare to other Department of Defense agencies, and whether Dugan has been in full compliance of her recusal, among other issues.

POGO’s letter to the Department of Defense Office of the Inspector General, May 9, 2011.

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The Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more effective, accountable, open and honest federal government.

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