Purge Reported in Defense Fraud Staff

The Pentagon’s Office of Inspector General has replaced its entire contract fraud staff in the last two months in what sources suspect was a purge of agents who favor more aggressive action on defense fraud investigations, it was reported Sunday.

The abrupt personnel changes have left the inspector general’s headquarters with sharply reduced expertise on fraud at a time when senior Pentagon officials say they are cracking down on overcharges, false statements and other fraudulent activities, the St. Louis Post-Dispatch reported in a copyrighted article.

The contract fraud division is part of the Defense Criminal Investigative Service, the branch of the inspector general’s office that specializes in fraud investigation.

Transfers and Reassignments

One member of the contract fraud staff resigned, two were transferred to headquarters positions in non-fraud areas and two others were reassigned to the Defense Criminal Investigative Service’s field offices. All five had accused the Pentagon and Justice Department of soft-pedaling the investigation and prosecution of fraud.

In a related development, Bertrand G. Truxell, director of the Defense Criminal Investigative Service, told a dozen regional managers of the service on Nov. 1 that he would tolerate no news leaks about the agency’s operations, the newspaper said. Truxell also instructed the regional managers to sign an agreement giving him blanket authority to transfer them to any other service location.

In an interview with the newspaper, Truxell said he was appalled by contentions that his actions were a move to intimidate employees. He said the changes at the contract fraud section were coincidental.

Differences in Philosophy

Truxell replaced Brian Bruh as head of the service last December. Many service agents say Bruh was forced out because he insisted on investigating cases that senior Pentagon officials and Justice Department prosecutors preferred to drop. Pentagon officials have acknowledged that differences in “management philosophy” played a part in his departure.

Sen. Charles E. Grassley (R-Iowa), whose inquiry into the handling of defense fraud cases may have triggered some of the staff changes, has written a letter to Inspector General Joseph H. Sherick and demanded an explanation for the shake-up.

In the letter, Grassley said the division has oversight responsibilities for nearly all Pentagon investigations of procurement fraud. He voiced concern that “the sudden transfer of all its agents may adversely affect the government’s efforts against fraud.”