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David Robbins quoted in Law360 on suspension and debarment issues

October 14, 2014

With federal agencies under congressional pressure to suspend and debar more unethical contractors, defense attorneys are worried that individual employees may be paying the highest price — sacrificed to boost enforcement statistics while their employers walk away and continue business as usual with the government.

Agencies don’t track distinctions between individuals and companies in their statistics, leading attorneys to worry that companies and agencies are throwing individuals to the wolves to appease lawmakers’ demand for more debarment. On top of that, getting a debarment lifted requires a contractor to show present responsibility and good ethical policies — things that were designed with companies in mind that don’t easily translate to individuals.

The government often takes a “shoot first, ask questions later” approach with individuals, since it’s far easier to blacklist a single person than to cut ties to a company that may be an important supplier, according to Todd Canni, a former U.S. Air Force debarring attorney who is now counsel at McKenna Long & Aldridge LLP.

“I have not seen individuals taken out like this before,” Canni said. “The government pretty much views individuals as expendable, and they don’t really think of the consequences of suspending an individual, and the ripple effects on the person and their family.”

Regulations that require mandatory disclosure of fraud or other crimes can encourage companies to tailor their reports in a way that skews blame toward one or a few individuals, as part of the company’s effort to shield itself from the worst consequences of misconduct. That can leave individuals accused of misconduct caught between their own employer and the government’s debarring officials

Scott MacKay, vice president and general counsel at Lockheed Martin Information Systems & Global Solutions, acknowledged at an American Bar Association meeting in August that companies can benefit from sacrificing employees through their use of the disclosure system.

“When we make these disclosures for nickel and dime mischarging, they go to the IG, the IG sends them over to the DOD SDO offices, and they propose these people for debarment,” MacKay said. “So the SDOs are pumping up their stats, which is a good thing, because then their stats are looking good when they have to go defend on the Hill and try to avoid some of the pernicious legislation that is floating out there in terms of taking away from the SDOs the discretion to administer the suspending and debarring regime.”

A report from a company is a high hurdle to overcome, and agencies have little incentive to avoid debarment for individuals, according to Steven Shaw, a former Air Force debarring official who now works for Covington & Burling.

“It makes it easy for debarring officials to increase their stats by debarring an individual who mischarged an hour and a half watching pornography instead of working,” Shaw said.

Companies also can get away with skirting a deep dive into the facts of alleged misconduct, simply by acknowledging that mistakes were made and focusing on forward-looking policies to avoid similar misconduct, according to David Robbins, a former Air Force debarring official who now heads the government contracts group at Shulman Rogers. But arguing with suspension and debarment officials is often a losing game, since debarment officials usually expect to focus on solutions rather than arguing about what happened, he said.

“The mantra for many years had been when you’re before the debarring official, the time for fighting is over, but when you’re an individual and the you have to challenge the facts, that is not an option,” Robbins said.

Individuals rarely get the chance to cross-examine the investigator that wrote a report, and often don’t have the resources needed to hire an attorney that specializes in suspension and debarment matters, Canni said.

“The companies find it most efficient to just cut the individuals loose and focus on the future and the SDOs are welcoming that,” Canni said. “But now these poor individuals are forced to hire counsel to prepare administrative records while the company just walks away. The system is set up to put that burden on the person with the least resources.”

Worse still, some debarring officials will put a company’s report into the administrative record used in their decision, but redact portions of the report — at a company’s request — before handing it over to an individual faced with the prospect of debarment, Canni said.

“It’s a black eye for the debarment system,” Canni said. He said that companies and SDOs can redact important and relevant information like the names of investigators and the state of a company’s ethical culture and training practices. “The individual needs as many facts as possible to make their case, and often, they’re not getting them.”

And even when the facts show that misconduct was slight or nonexistent, agencies still face pressure to debar somebody, anybody, after a lengthy investigation, Shaw said.

“It’s musical chairs; it’s the last person standing,” Shaw said. “The debarring official has to make some sort of statement to show that the whole process was worth it. So they’re going to have to get somebody and the person that they’re going to get is the person who can’t show present responsibility through the usual mitigating factors.”

Unlike a company, individuals can’t get credit for firing “bad actors” or rewriting ethics and compliance policies when trying to end a debarment. Practically speaking, they often must take training courses related to ethics or the specific type of misconduct that got them in trouble, an approach that offers little assurance to the government and can be an expensive burden for a debarred individual, according to Robbins.

“Because there’s nothing else you can do, it almost becomes an arms race of how many training classes you can take,” Robbins said. “It would be really helpful if the regulations gave more guidance on individuals, to give the government and contractors more to go on. Everyone’s sort of flying blind.”

The government says it tries to ensure that individuals are given the same due process rights that companies get.

David Sims, who chairs the Interagency Suspension and Debarment Committee, said that the regulations allow individuals the right to due process and the ability to lift a debarment by showing that they are presently responsible.

“While it may be easier for a business organization to change and strengthen structure and practices as well as to undertake personnel disciplinary actions to remove bad actors than it would be for an individual to effectively demonstrate a genuine change in personal behavior and ethical standards, the factors are sufficiently broad that they include factors which may readily be applied to individuals,” Sims said. “Individuals have been successful in demonstrating present responsibility notwithstanding the existence of a cause to suspend or debar.”

For the clearest cases of wrongdoing — ones that end in a criminal conviction — showing present responsibility can be nearly impossible, Canni said.

“In the context of a criminal conviction for example, that’s a tougher burden than a noncompliance event because the SDO, rightly or wrongly, will say ‘How can I ever trust you again?'” Canni said. “When you have a conviction, many SDOS feel like they have a slam dunk, but the case law makes it perfectly clear that contractors must be given a meaningful opportunity to overcome a blemished past.”

Debarred individuals are sometimes forced to turn to the courts for help, but that option isn’t available to everyone, Canni said.

“The good news is the courts ultimately get it right,” Canni said. “Unfortunately that’s a very costly process, and not everyone has the resources to see it through.”

Robbins, for one, said that the system could be reformed to help individuals get a fairer shake.

“One thing that I wish is that we would consider alternative procedures for individuals, because it’s starting to turn into a common theme for me, on an everyday basis,” Robbins said.

Barring a systematic change, a little compassion can go a long way, Canni said.

“SDOs just need to have some compassion,” Canni said. “The system is about protection, and you don’t need protection from people who make mistakes. It’s usually a training problem, and in those cases, the company is better off and the government is better off having the individual get that training and remain with the company.”

–Editing by John Quinn and Richard McVay.

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