A former NASA executive has lost big in his appeal of criminal convictions stemming from his role in allocating a $15 million congressional earmark when he was serving as Associate Administrator of the agency. In United States of America v. Stadd, C.A.D.C. No. 09-3121, 3/4/11, the appeals court has affirmed Stadd’s conviction on all three counts.
The written decision is remarkable in its disclosure of the realities of Congressional earmarks, dealings between Congressmen and an agency head, and the lengths to which an agency might go to put the new leader’s hand picked key official into a significant executive position. It also shows that the federal criminal conflict of interest laws are alive and well and even the highest agency officials can get ensnared and eventually convicted if these laws are violated, dragging the agency and its head into the mire in the process.
These facts are taken from the court’s decision.
Newly appointed NASA Administrator Michael Griffin, in April 2005, asked Stadd to serve as his Deputy Administrator. This is the second highest position at NASA. Stadd previously had served as NASA’s Chief of Staff. Stadd apparently declined the offer, but did agree to serve as the NASA Associate Administrator (Griffin described it as similar to a Chief Operating Officer for the agency) on an “interim” basis to help Griffin transition into the agency. (Opinion p. 2)
Initially Stadd was a government contractor employee, but was then converted to a “Special Government Employee,” thus fully subject to government ethics laws and rules. He got the required briefing by the agency ethics advisor, including an explanation of 18 USC 208 prohibiting conflicts of interest.
During this time, Stadd was also had his own consulting company, Capitol Solutions. He disclosed this to NASA and provided a full client list, which included the GeoResources Research Institute (GRI) at Mississippi State University (MSU). As for GRI, while they had had contracts with NASA in the past, Stadd indicated that he would focus his work for GRI on “non-NASA” matters. It was spelled out between Stadd and agency ethics advisors that Stadd “would not engage in any activities in which [he] represent[ed] another person or organization or [his] own private interests…” (p. 4)
According to NASA it was clearly spelled out that Stadd would be providing general organizational guidance and transition activities, but he would “not perform any management or supervisory work, make final decisions on substantive policies, or otherwise function in the agency chain of command.” (p. 4)
New Administrator Griffin made the Congressional rounds before he was confirmed in the position. Some “members” were “angry about the previous. …Administrator’s policy of failing to honor congressional earmarks…” and made sure Griffin understood that he “would be expected to take care of [honoring earmarks]” beginning day one. (p. 4)
The earmark that caused Stadd’s undoing, according to Michael Griffin’s testimony at trial, was one involving Senator Thad Cochran of Mississippi who was the head of the Senate Appropriations Committee and therefore “the most powerful senator in the Congress” according to Griffin. (p. 5)
Griffin testified about Cochran’s unhappiness with the fact that the previous NASA Administrator had not honored his earmark for Mississippi and that Griffin made sure he addressed the subject in his first management meeting as Administrator. Griffin indicated that he said the agency “would take care of earmarks immediately” and that he ordered the acting head of legislative affairs to take care of it and told his other senior staff (including Stadd) to make sure it gets done. (p. 5)
Within days, Stadd got himself wrapped up in the earmark issue. He heard from one of his private consultant clients (MSU) that NASA’s plans for distributing this particular $15 million earmark (with only a small part of the money going to MSU) would “not sit well with …Senator Cochran.” (p. 5) Stadd then met with the NASA official responsible for administering the earmark money. She testified that Stadd pressured her to send the funds to Mississippi. Eventually the decision was made to send $12 million of the earmark to the MRC with MSU receiving the lion’s share of that. (p. 7)
Meanwhile Stadd was billing his private client and receiving payment for among other things helping “GRI in understanding personnel and policy changes at NASA HQ, including efforts….to ensure that the appropriate earth science research programs were appropriately refocused in areas of potential benefit to MSU/GRI.” (pp. 8-9) Compounding his problems, after Stadd left NASA, he billed the client again seeking more money, citing his efforts on “the recovery of the earmarked NASA procurement.” (p. 9)
Stadd was indicted a few years later on three counts—one for violating the conflict of interest law, and two counts of making false statements. His trial lasted three days and the jury convicted Stadd on all three counts in August 2009. The sentence was 36 months probation, a $2500 fine, and 100 hours of community service. (p. 10)
The federal appeals court has now refused to overturn Stadd’s conviction. His next stop would be the Supreme Court.
