Former NASA Exec Loses Appeal of Criminal Convictions

View this article online at and visit to sign up for free news updates

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.
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

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

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.

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.


© 2017 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.