DHS lets industry liaison keep business ties

The Homeland Security Department has allowed its new chief commercialization officer — hired to improve DHS’ relationship with industry — to continue some of his business activities while he works at the department.  The department’s decision underscores the complicated relationship between government and industry and highlights the complex ethics and recruitment issues that agencies face when they tap the private sector for talent.  DHS officials decided that Thomas Cellucci, the new chief commercialization officer, could maintain his dormant consulting firm and his seat on the boards of directors of several companies, after promising to recuse himself if a conflict of interest arose. Amy Kudwa, a DHS spokeswoman, said Cellucci also keeps the department continually apprised of his private-sector activities.DHS’ handling of the matter was consistent with DHS’ ethics rules for limited-term administrative appointments, she added.However, some former federal managers and government watchdogs said DHS should be careful to avoid appearances of a conflict of interest.The department’s Science and Technology Directorate hired Cellucci in August for a five-year term, citing his experience in the private sector and background in science. Officials said they hoped Cellucci’s appointment would help the department bring new technology to its operational components and first responders, which is a goal of the directorate. When he was hired, Cellucci was running Cellucci Associates, a technology consulting firm that provided homeland security services. However, before DHS offered to make him chief commercialization officer, Cellucci disclosed all of his private-sector ties. He agreed to stop consulting and avoid any DHS work related to the four companies on whose boards he continues to serve. Cellucci also agreed to restrictions on the type of work he can do after he leaves government. But DHS permitted Cellucci to maintain ownership of his company, which still lists him as principal consultant on its Web site. Both Cellucci and DHS officials told Federal Computer Week that the company is completely inactive, but its Web site still posts working contact numbers. After FCW’s inquiries regarding Cellucci Associates’ Web site, Cellucci added a pop-up window to the site that explains his role with DHS and states that the company is not accepting new business. Cellucci said he has followed DHS’ instructions and is willing to comply with other recommendations from the department. He also added that he has gone out of his way to be upfront with the department and fully disclose all of his involvements.Government observers said the arrangement is potentially troublesome. Scott Amey, general counsel for the Project on Government Oversight, said appearance is important in ethics matters. The position needs extra oversight because it carries “almost an inherent conflict of interest,” Amey said. “The revolving door is well-accepted practice in Washington, D.C., but I do have concerns if he’s in a position to regulate or oversee any of his past clients,” he added. “It all boils down to public perception.” Cellucci said a primary purpose of his position is to explain the department’s operational needs to the private sector. If companies see a market for new products, vendors will be willing to spend more money on developing new products faster, he said. The response so far from industry has also been positive, he added.“The private sector comes to us all the time with a solution looking for a problem,” Cellucci said. Former government managers said all agencies face similar challenges when they hire company executives for senior-level government positions.