Former Homeland Security Watchdog Officials Fostered ‘Divisiveness, Disorder and Dissension,’ Report Finds

A former senior official at the Homeland Security Department’s inspector general office, along with two other high-ranking employees within the office, engaged in systematic unprofessional and divisive behavior that hindered the office’s ability to achieve its mission, according to a recent external investigation. 

On May 4, 2020, the DHS IG engaged the international law firm Wilmer Hale to review the conduct of three senior IG office employees. It completed a 92-page report on December 14, 2020, and Government Executive received a redacted version through the Freedom of Information Act. Wilmer Hale looked at 88 allegations, conducted 70 interviews and reviewed over 42,000 documents for its investigation that spanned late 2017 to 2020. 

The individual at the center of the investigation, with the assistance of the two others, “planted and then cultivated seeds of divisiveness, disorder and dissension to the detriment” of the agency, said the report. “The agency was beset by employees’ associations of misconduct and retaliation, frequent internal investigations of [office of inspector general] personnel, and complaints and counter-complaints filed with the integrity committee of the Council of the Inspectors General on Integrity and Efficiency, the Office of Special Counsel and Congress.”

A DHS IG official told Government Executive that the individuals in the report no longer work for the office. 

Current and former IG employees told Wilmer Hale there was a “pattern of mistreatment” by two of the top officials and the third, to a lesser degree, “to any employees they thought were in the way of their personal goals and agenda.” The employees “described a challenging working environment where employees often faced verbal abuse and threats of poor performance evaluations,” said the report. 

The main employee, with the help of the others, “publicly disparaged” IG Joseph Cuffari when he took office in July 2019, opened investigations into him before his confirmation and worked to “maintain control over the key leadership positions in the agency while simultaneously limiting [Cuffari’s] ability to hire Senior Executive Service employees,” the independent investigation found.

Another example of misbehavior outlined in the report involves the situation surrounding the IG’s retraction of 13 “feel good” reports in July 2017 and March 2018 on the Federal Emergency Management Agency’s response to disasters. John Kelly, acting DHS IG at the time, accelerated his retirement shortly after a report on the incident was published in June 2019. 

Changes made in 2011 by Kelly (when he was director of forensic audits) and then-assistant IG Michael Beard were not well communicated and “set the work off course and resulted in a flawed product line,” said the report. “The new approach” made personnel “think of Emergency Management Oversight Team reports as 'feel good' reports — i.e., generally positive reports that typically concluded that FEMA’s initial response to a disaster was effective.”

According to the new report, the main person, along with the two others, were “badgering [redacted name] to retire, lobbying senior staff to convince him to ‘leave,’ ” and oversaw the investigation into the reports “that directly implicated him and public[ized] its results.”

Two of the employees, “effectuated an undocumented move of the human resources department to the legal department in August 2018,” which “allowed [redacted name] and [redacted name] greater control over internal investigations and personnel actions.” 

Wilmer Hale could not confirm all of the 88 allegations, such as any “illegal conduct” or false testimony to Congress. 

“This report says numerous whistleblowers sent many allegations to CIGIE, but it has a big, corporate logo on the cover page because the investigation was conducted by a private law firm,” Irvin McCullough, deputy director for legislation at the Government Accountability Project, told Government Executive. “Where were the government’s own watchdogs? There is deeply troubling misconduct—that deserved this investigation—described in the report. Congress needs to repair the system that ensures accountability within the inspector general community.” 

Previous reporting by The Washington Post in March 2020 and a letter from Cuffari to congressional leaders indicate that Jennifer Costello, former acting IG, is one of the employees upon which the report centers. A former DHS IG employee knowledgeable of the situation confirmed that it is her and said the other two officials were Karen Ouzts and Diana Shaw, who is now the deputy IG for the State Department. 

“In attempts to gain power, they weaponized the inspector general’s office, so they could go after people that were disloyal to them,” a senior DHS IG official with knowledge of the situation told Government Executive. “They turned it into a retaliation mill” and “the important oversight mission is essentially being ignored” as a result, the official said, referencing the Washington Post report about how the office has drastically slowed its pace in publishing audits over the last four years. 

“Some of the issues raised in the report appear to relate to my client, Ms. Costello. It would be inappropriate, however, for Ms. Costello to provide specific comments, as doing so may violate the privacy rights of the other employees referenced in the report,” Eden Brown Gaines, attorney for Costello, told Government Executive. “In fact, I am deeply concerned about IG Cuffari's disclosure of sensitive personnel information, as well as information relating to ongoing investigations and legal proceedings, including my client's pending litigation against DHS OIG.” 

She also said the report was “an astonishing misuse of $1.4 million of taxpayer dollars” and questioned how the situation was handled. 

“Cuffari removed my client, before conducting any investigation, and now appears to have launched an expensive attack against her and other employees because he felt ‘undermined’ by the legitimate, legally protected whistleblower complaints that they filed against him with the Inspector General Integrity Committee, the Office of Special Counsel, and bipartisan members of congressional staff,” she stated. “Ms. Costello's removal and this belated farce of an investigation is the very definition of retaliation. I believe IG Cuffari's actions and the report from the ostensible investigation by a private firm will have a chilling effect on staff at DHS and other agencies who might be contemplating coming forward to expose wrongdoing.” 

Shaw did not respond to a request for comment submitted through the State IG's office, and Ouzts did not respond to a LinkedIn request from a reporter.

Wilmer Hale has 1,000 lawyers in its 13 offices worldwide. According to Salon, the firm “has extensive ties to the Trump administration and the president's family.” Additionally, President Biden’s pick for Homeland Security secretary, Alejandro Mayorkas, was previously a partner at Wilmer Hale. The firm did not respond for comment on the report.