Resignation Prompted by IG Report of Conflict of Interest Involving Lab Consulting Contract With Her Husband
Todd Jacobson
NS&D Monitor
3/07/2014
Beth Sellers is resigning as Los Alamos National Laboratory’s Deputy Director in the wake of a scandal involving the award of a laboratory consulting contract to her husband, NS&D Monitor has learned. According to an unreleased draft Inspector General report, Sellers and her husband failed to notify lab officials of a potential conflict of interest before Sellers’ husband, a consultant to the lab, was awarded a sole-source contract with the laboratory. The undated report did not identify Sellers, citing only a “senior manager at LANL,” but multiple officials with knowledge of the issue identified the manager as Sellers, a Bechtel executive who joined the lab in late 2011.
In a statement obtained by NS&D Monitor that is expected to be distributed to employees on March 7, Sellers acknowledged that she did not disclose the potential conflict of interest when the contract was awarded to her husband. “We undertook a comprehensive review of our processes and several improvements have been made to prevent a recurrence, but it is apparent to me this incident will be a continuing distraction to the lab’s important missions,” Sellers said. “This is unacceptable to me as a laboratory leader so I have decided to voluntarily step down. I will work with [lab Director] Charlie [McMillan] to transition my duties.”
IG: Husband Didn’t Disclose Relationship
While Sellers’ relationship with her husband was well known at the lab, the IG report revealed he also did not disclose his relationship with Sellers when he was awarded a contract to serve as the lab’s Technology Transfer Point of Contact for Regional Technology Infrastructure. Sellers also did not notify lab ethics officials or McMillan of the potential conflict of interest until five months after the consulting contract had been awarded.
The timeline for Sellers’ departure, and plans for her successor, are unclear, but in a separate statement set to be distributed to employees obtained by NS&D Monitor, McMillan said a search would begin after a short transitioning of duties. “Beth Sellers has made me aware of her intent to resign as the laboratory’s deputy director,” McMillan said in the statement. “It is with regret that I have decided to accept her resignation. I do this so that the lab can move quickly past any institutional distractions and continue to deliver on our mission. I thank Beth for her service to the laboratory and the nation. Her contributions will be missed, especially her energy and passion for the laboratory mission and the deep interest in the lab’s people.”
IG: Husband Billed Lab for Work That Didn’t Happen
In a violation of lab policies, the IG also said Sellers’ husband was paid $4,700 for work performed before the consulting agreement was signed, and billed the lab for work that never took place. The lab has since terminated the contract and reimbursed the government for all of the work performed by the consultant, a total of $23,100. “When our ethics office became aware of this consulting contract and reviewed the facts, the Lab found the arrangement did not comply with internal policies relating to contracts with near relatives of employees,” lab spokesman Matt Nerzig said in a statement. “As a result, the contract was terminated and the government was reimbursed. Since then, the Lab has put in place a new process to help ensure compliance with policies for consulting agreements.” The IG said that lab Director Charlie McMillan told lab employees in May 2013 that a team of employees in Acquisition Services Management, the general counsel’s office, and the Ethics and Audits Group would review fu-ture contracts involving specialists such as Sellers’ husband.
LANL Official Also Faulted
The IG also faulted an unnamed Los Alamos official who sponsored the consultant agreement for not recognizing and addressing apparent conflict of interest issues. The official filled out forms related to conflicts of interest, but did not follow procedures and failed to turn over supplemental information that the IG suggested might have prevented the incident. “An opportunity to alert procurement personnel to the fact that the consultant was the spouse of a senior LANL manager was missed, and LANS did not evaluate the consultant’s offer to determine if a conflict of interest existed,” the IG said. “Therefore, an ethics review was not initiated. Ultimately, the consultant agreement was awarded without consideration of the spousal relationship.”
According to the IG, Sellers and her husband didn’t fully understand the lab’s conflict of interest requirements. Sellers’ husband told the IG that he believed the conflict of interest issues only applied to corporations, but not individuals. Sellers told the IG that she was unaware she had to report the conflict of interest until she updated her “Conflict of Interest Disclosures for Senior Managers and Advisors” form. Five months after the contract was awarded, Sellers indicated that a potential conflict of interest existed, writing: “My husband [name of spouse] has a small consultant agreement with the lab.”
Sellers’ husband should have documented the conflict of interest in a “Representations and Certifications” document when his consulting agreement was finalized. According to the IG, the document includes a “Personal Conflicts of Interest Certification” that would have triggered a review by the lab, but would not have precluded him from being awarded the contract.
Billing Problems Identified
The IG also found problems with invoices submitted to the lab by Sellers’ husband. The first invoice he submitted to the lab included a $4,700 bill for 12 charges covering 4.7 days of work effort from Aug. 8 to Sept. 10, 2012—before the contract was awarded, which violates lab procedures. A second invoice included a charge for a two-hour meeting Aug. 24, 2012 with a federal official in Espanola, N.M. According to the IG report, Sellers and her husband attended the Santa Fe Opera with the federal official and his wife, who said the event was for “relaxation and no business was discussed.” The official also told the IG he was unaware Sellers’ husband had a consulting contract with the lab. “It should be noted that when questioned about the hours charged on August 24, 2012, the consultant agreed that the hours charged probably should not have been billed,” the IG said.
