Covert Contracts Drain Chemical Safety Board Budget; Sole-Source Payments Piecemealed to Avoid Bid, Affirmative Action and Other Rules

By Kirsten Stade - Public Employees for Environmental Responsibility, July 8, 2015

Disclaimer: The views expressed here are not the official position of the IWW (or even the IWW’s EUC) and do not necessarily represent the views of anyone but the author’s.

Washington, DC — The new leader of the U.S. Chemical Safety and Hazard Investigation Board (CSB) is busy spending money on things other than chemical safety, according to records released today by Public Employees for Environmental Responsibility (PEER). In the past weeks, CSB has let nearly $100,000 in sole-source contracts for outside lawyers and consultants without public notice or discussion and kept them below a dollar threshold that would trigger an array of federal procurement requirements.

Last month, Richard Engler declared himself the “Interim Executive and Administrative Authority” for the CSB, a status disputed by the only other remaining Board member, Manuel (Manny) Ehrlich. He then proceeded to put the general counsel and managing director on paid administrative leave and began reassigning staff. Without informing Ehrlich, he also began unilaterally executing no-bid contracts for –

• An organizational consultant called RGS of Arlington, VA for $49,998 ; and
• “Legal Services” from the Washington, DC firm of Shaw, Bransford, Veilleux and Roth. Records indicate two payments totaling $45,000 have been authorized thus far at a billing rate between $175 and $300 per hour.

Federal contracts under $50,000 avoid a variety of procurement rules, including stronger competitive bidding and affirmative action requirements. They also fall just shy of the $50,000 threshold requiring a full Board vote under an order passed this May (with Engler among the “aye” votes) in the name of improving governance and “transparency.” Yet, these contracts were approved with the other Board member and most of the agency staff left in the dark.

“This guy is spending taxpayer money like a drunken sailor,” stated PEER Executive Director Jeff Ruch, noting Engler craves loyalty from a divided and intimidated staff so much that he even tried to elevate a lawyer with a big lawsuit against CSB. “He is assembling a mercenary force paid to do his only bidding.”

The CSB has only two remaining board members but Engler is refusing to even disclose information about his actions, let alone collaborate. On Monday, July 6th, the other member Manny Ehrlich sent Engler a stinging letter of protest demanding information describing and justifying the new contracts.

In this small agency whose budget is largely to pay staff salaries, these contracts divert a high percentage of very limited discretionary funds that could otherwise support investigations into causes and prevention of explosions and other accidents at refineries, fertilizer plants and other chemical facilities. To aggravate matters, CSB is slated for a sizeable budget cut in the coming fiscal year starting in October. Meanwhile, CSB is functionally forfeiting the salaries of its two highest-paid staff who languish on indefinite leave while the outside law firm searches for “possible misconduct” to justify their permanent removal.

“These contracts have little to do with chemical safety – the mission of this agency,” added Ruch pointing out that during the last ten months of the prior CSB chair, Rafael Moure-Eraso, the agency had issued a record nine investigative reports but none since he left. “These ham-handed maneuvers have set the Chemical Safety Board on a course to tear itself apart.”

• See summary of contract information
• Read CSB Member Ehrlich’s letter of protest
• Look at federal procurement rules being skirted
• Revisit recent chaos at CSB