Quid Pro Quo

U.S. Customs Boss: "Anybody Who Files a Discrimination Complaint is a Disloyal Employee"

By Bill Conroy
Chapter 7 of a book published by Narco News

March 10, 2004

Supporting Documents: Blue Ribbon Panel report on Customs (1.3 mb PDF) Government Accounting Office report on Schedule A hiring at Customs (182 kb PDF) GAO report on Customs’ ACE system (740 kb PDF) 2001 statement of acting commissioner of Customs before House Ways and Means Committee Congressional comments regarding Customs integrity issues pertaining to Hispanic employees (664 kb PDF) Note: Acrobat Reader needed to view PDF documents

The fact that the U.S. Customs service’s upper management has a take-no-prisoners approach to battling Equal Employment Opportunity (EEO) discrimination lawsuits is not surprising, if the word of a former assistant commissioner of Customs is to be trusted. From 1993 through 1997, Walter Biondi served initially as Customs’ assistant commissioner of Internal Affairs and then as assistant commissioner of Enforcement and Investigations – two of the highest posts in the service.

Under questioning in a 1999 legal deposition, Biondi describes the hardened attitude adopted by the upper ranks of Customs management with respect to EEO filings. In the deposition, Biondi recounts what then Deputy Commissioner of Customs Sam Banks told a group of Customs managers at a 1997 conference:

“He (Banks) told the senior managers present who were complaining about the EEO program and EEO complaints, who were complaining about the time it took to deal with EEO complaints, that things were going to change, that he was not going to be as easy as (the retiring Customs Commissioner George Weise) was in resolving EEO complaints. People were going to have to fight to the bitter end. ... There was applause from the group that was there. It is what they wanted to hear.”

Biondi also testified about what Commissioner Weise had told him about another meeting, which Weise attended in late 1996 or early 1997 with then Treasury Undersecretary for Enforcement Raymond Kelly and Treasury Deputy Assistant Secretary Elizabeth Bresee. At this meeting, Kelly said that “anybody who filed an EEO complaint against their agency is a disloyal employee, should be shown no favor and treated accordingly,” Biondi states in the deposition, recounting what he was told by Weise.

Biondi went on to testify that when he asked Weise if anyone spoke up to point out that such a policy was not appropriate, Weise replied, “Given that he was the Undersecretary of the Treasury, nobody said anything.”

In 1998, Kelly became commissioner of U.S. Customs; Bresee later became the Treasury Assistant Secretary for Enforcement.

“Thus, officials at the highest levels of the Department of Treasury, in effect, ordered retaliation throughout Treasury’s law enforcement bureaus against those who filed EEO complaints,” assert pleadings in the class-action lawsuit filed in May 2002 by Hispanic Customs agents.

Another glimpse of the attitude senior Customs officials have toward the agency’s Hispanic employees can be found in a July 1999 report from the House Appropriations Committee. That report took issue with a portion of a U.S. Treasury Department report that stated the following:

“Most serious, however, is the belief that (Customs) inspectors who are hired locally, particularly along the Southwest border and assigned to the local ports of entry, could be at greater risk of being compromised by family members and friends who may exploit their relationships to facilitate criminal activities. Although they could not offer any solid evidence, Customs officials express a real apprehension over the possibility that individuals are attempting to infiltrate Customs by seeking jobs as inspectors for the sole purpose of engaging in corrupt and criminal behavior.”

The members of the House Appropriations Committee blasted that passage, stating for the record that “the committee takes strong exception to any implication that individuals of Hispanic background are particularly susceptible to corruption and expects the Customs Service to address unsubstantiated bias by senior Customs officials ….”

U.S. Customs spokesman Dennis Murphy stressed at the time that the report in question was drafted by Treasury, not Customs. Until late 2002, the Customs Service was under the jurisdictional umbrella of the U.S. Treasury Department.

Although Murphy could not provide any specific details on how Customs dealt with the request by the Appropriations Committee to “address unsubstantiated bias,” he did say Customs formed some high-level committees “to address recruitment and retention, particularly of minorities.”

Murphy also added, “I know there were briefings provided for members (of Congress) who were interested in this issue with regard to what the facts are and what we are doing.”

Apparently, though, those briefings failed to satisfy the concerns of all members of the Appropriations Committee. In the summer of 2000, the House committee again revisited the issue, expressing continued concern with Customs’ efforts to address the implication that Hispanic Customs employees were somehow more prone to corruption.

In a July 2000 report to the entire House, the Appropriations Committee stated the following:

“Customs offered but failed to provide the committee evidence supporting these views, and statistics provided by Customs did not support the allegation described in the (Treasury) report. In addition, written responses from BATF, DEA, FBI and the Secret Service indicated that these agencies did not agree with the concern that such local hiring (along the Southwest border) posed a greater risk of individuals being compromised.

“Although Treasury and Customs now agree that the passage from the report did not reflect accurately their beliefs or practices, the committee is concerned that Treasury has been slow in taking steps to communicate this to senior managers and others involved with Customs integrity issues. The committee continues to take strong exception to any implication that individuals of Hispanic background are particularly susceptible to corruption and directs Treasury and Customs to contest any such unsubstantiated bias by senior Customs officials….”

The apparent inaction by Customs may betray an arrogance on the part of the agency’s entrenched bureaucrats that makes them feel immune even to the edicts of Congress and other high-level government officials. A number of Customs insiders point to the fact that in the early 1990s a Blue Ribbon Panel was appointed by Carol Hallett, commissioner of Customs during the first Bush administration, to review integrity and management issues within the agency. The faults uncovered by that Blue Ribbon Panel are strikingly similar to the concerns that still plague Customs today with respect to cronyism and retaliation.

Among the panel’s conclusions were the following:

We found that the Customs Service lacks a clear whistleblower policy. As a result, employees do not understand their rights and managers are confused and frustrated in dealing with the process. Our recommendations call for the issuance of clear whistleblower guidelines for employees and supervisors, expeditious investigation of allegations, and strong sanctions against supervisors who retaliate against those reporting wrongdoing.

The panel found a general sense among employees, supervisors and managers throughout the Southwest Region that discipline has been unevenly applied within the enforcement organization. Here again, the “old-boy” network was seen as responsible for either selective protection or harsh punishment. The panel’s recommendations in this area call for new measures to: ensure and standardize the reporting of misconduct; provide for objectivity in the conduct of investigations; and, pinpoint managerial accountability in disciplinary actions.

In conclusion, the panel’s findings cannot be mitigated or dismissed. They represent the unanimous opinion of its members. The recommendations contained in this report are intended to provide Customs with a comprehensive plan to correct problems that have been identified.

The brass ring

The U.S. General Accounting Office (GAO) issued a report in September 2001 that sheds additional light on the management culture within U.S. Customs. The report examined a 1998 request by the Department of Treasury that sought special permission for Customs to add up to 10 law enforcement positions under something called Schedule A hiring authority. These new positions were to be in addition to the 300 Schedule A posts already approved for Customs.

Schedule A hires are exempt from the competitive civil-service hiring mandates – which means management can chose who they want to appoint to these positions. Schedule A appointments are designed to allow an agency to appoint individuals to positions for which it is not practical to use a competitive hiring system.

However, Schedule A also can be subverted to perpetuate a good-ol’-boy hiring system if it is used by top management as a means of appointing their cronies to career civil-service jobs.

The Office of Personnel Management (OPM) approved Treasury’s 1998 request for the additional Schedule A slots for Customs. Treasury had argued for the positions by telling OPM that “due to the sensitive nature” of the positions, it was not practical to fill them through the traditional merit-based approach.

“In using the Schedule A authority between September 1998 and January 2001, Customs made nine appointments to various positions – such as law enforcement and public affairs specialists and a strategic trade adviser,” the GAO report states. “The circumstances surrounding five of the nine appointments can, in our opinion, give the appearance of inconsistency in the application of Schedule A appointment authority or possible favoritism toward former political employees.”

In the case of three of the supposedly unique Schedule A appointments, “identical positions were ultimately advertised and examined in the competitive service,” the GAO report states. This occurred despite the fact that the 10 Schedule A positions requested for Customs were promoted as being “impracticable to advertise and competitively examine.”

Two other Schedule A appointments went to noncareer personnel in Customs’ Senior Executive Service (SES) “several days before the Presidential transition,” the GAO report states. “The timing of such actions can give the appearance of political favoritism,” the report adds.

Greasing the wheels

In some circles, political favoritism is viewed as the grease on the wheels of U.S. democracy. It should be no surprise then, to discover that in a federal agency as large as Customs, there is plenty of grease to go around.

That principle appears, to some observers, to have played itself out in the case of one former Customs executive, Charles Winwood.

Winwood spent 30 years with Customs, reaching the top spot in the agency as acting commissioner for eight months in 2001.

Winwood retired from Customs as deputy commissioner in early May 2002. A couple of weeks later, he landed a job as senior vice president of border security with Sandler & Travis Trade Advisory Services Inc. (STTAS) – a Washington, D.C.-based consulting firm specializing in customs issues and international trade.

“Winwood joins a number of former senior Customs officials at the firm, including three other past deputy commissioners (of the U.S. Customs Service) – Samuel H. Banks, Michael H. Lane and Alfred R. De Angelus,” states a press release by STTAS announcing Winwood’s hiring. “This seasoned team of customs experts, combined with STTAS’ proven business procedures and proprietary technology, will ensure that governments’ and companies’ supply chains operate efficiently.”

The STTAS press announcement is actually modest in outlining the firm’s track record of hiring former U.S. Customs employees.

According to the consulting company’s Web site (http://www.strtrade.com), as of late 2002, some 24 former Customs employees, including Winwood, Banks, Lane and De Angelos, worked for STTAS or its sister firm – Sandler, Travis & Rosenberg P.A., an international trade and customs law firm.

In addition, in 2001, two individuals from the affiliated firms were part of the 20-member Treasury Advisory Committee on Commercial Operations of the U.S. Customs Service. Those individuals were De Angelus of STTAS and Gilbert Lee Sandler, a senior partner in the Sandler, Travis law firm.

The advisory committee members are appointed by the Secretary of Treasury. The committee’s charge is to advise the Secretary on matters related to Customs’ commercial operations.

Also in 2001, coincidentally, Customs made a billion dollar-plus decision with respect to its commercial operations. In April of that year, then Acting Commissioner of Customs Winwood announced that the agency was awarding a $1.7 billion Customs Modernization Prime Integration Contract to a group of companies led by IBM Global Services. Included in that group of companies was STTAS, which will provide “global trade and customs expertise” to the contract team – dubbed the e-Customs Partnership, according to a press announcement issued by Customs at the time.

The e-Customs Partnership is charged with developing an Automated Commercial Environment (ACE) system for Customs “to dramatically streamline Customs’ commercial processing systems,” the press announcement states. Essentially, the modernization project involves developing and implementing a new tech infrastructure for Customs, including computer systems and software, that can more effectively handle the agency’s growing commercial, enforcement and administrative duties.

Winwood counts his work on the ACE contract while at Customs as among his most important achievements, according to a mini-profile of the former acting commissioner published in the April 2002 agency-sponsored newsletter U.S. Customs Today. That pride bubbled forth in testimony Winwood gave on July 17, 2001, before the Subcommittee on Trade of the House Committee on Ways and Means.

“The e-Customs Partnership is a team of top-notch companies and highly qualified professionals who have successfully executed large information systems projects similar to this one in the past,” Winwood told the House subcommittee.

Winwood’s career track definitely qualifies him as an expert in customs issues who might be an attractive hire for a firm like STTAS. But Winwood’s enthusiasm over the ACE contract is not shared by everyone.

A May 2002 report by the U.S. Government Accounting Office described the $1.7 billion ACE investment as a “high-risk endeavor.”

The major reasons are as follows, according to the GAO report:

• “The system’s size, performance parameters and organizational impact make it technically and managerially complex.”
  
  
• “Customs fell far short of key commitments in its first spending plan (for ACE) because it severely underestimated costs. (Actual costs were 90 percent higher than projected.) This track record casts doubt on Customs’ ability to meet future commitments.”
  
  
• ”Despite progress, Customs still lacks important acquisition management controls.”
  
  
• ”Customs recently decided to compress the time frame for delivering the system from 5 to 4 years.”

Robert Bonner, who was confirmed as commissioner of Customs in September 2001, only a few months prior to the GAO report’s release described ACE as “an important project for Customs and an important project for the business community,” in testimony before a House Appropriations subcommittee.

“The successful and timely design, implementation and funding of ACE is a priority of the U.S. Customs Service,” Bonner stated in his Feb. 27, 2002, testimony. “I believe that ACE is so important to our country’s security and the future of trade facilitation that I have set a goal that the system be completed within 4 years….”

Since the spring of 2002, the GAO reports that Customs has made efforts to address some of the concerns raised over ACE. But Customs is still not out of the woods, according to the GAO.

“Customs has made progress in implementing some, but not all, of our recommendations,” GAO spokesman Richard Stana told a House subcommittee in June 2003. “Moreover, because Customs is in the early stages of acquiring ACE, many challenging tasks remain before Customs will have implemented full ACE capability.”

Whether ACE turns out to be a boondoggle remains to be seen.

Regardless of ACE’s ultimate fate, any suggestion that a quid pro quo relationship exists between Customs and STTAS and its affiliated law firm is dead wrong, according to Ron Gerdes, a senior member of Sandler, Travis & Rosenberg and a former assistant chief counsel for the U.S. Customs Service.

To set the record straight, Gerdes stresses that De Angelus was appointed to the Treasury Advisory Committee prior to joining STTAS. In addition, the committee membership for 2002 did not include De Angelus or Sandler.

(However, Thomas G. Travis of Sandler, Travis & Rosenberg was a member of the committee in 2002.)

Gerdes also contends that the former Customs employees hired by STTAS and Sandler, Travis, Rosenberg have been brought on board because they are the best people for the job.

“When I was there at Customs, I made the best decisions I could given the facts,” he explains. “My point of view here is the same. If you’re looking to hire someone (from the government side), do you want an individual who rolled over for you or someone who impressed you with their abilities? I want someone who can think and analyze a situation.”

Next in Chapter 8:

An Internal Affairs investigation into the auto-accident death of Arizona Customs agent Gary Friedli clears the driver, another Customs agent, of any wrongdoing. However, Friedli’s widow, also a Customs agent, presses the agency for further explanation, resulting in a Treasury investigation that puts the blame for the accident squarely on the shoulders of the agent who was cleared by Customs Internal Affairs. The incident prompts a congressional investigation into why the initial Customs investigation was bungled.

Read the rest of Bill Conroy’s Borderline Security:

Prologue

Chapter 1 – Investigation Derailed

Chapter 2 – The Belly of the Snake

Chapter 3 – Shooting the Messenger

Chapter 4 – “The Racist Manifesto”

Chapter 5 – The Hydra

Chapter 6 – Green Quest

Chapter 7 – Quid Pro Quo

Chapter 8 – Reckless Driving

Chapter 9 – Firestorm

Chapter 10 – Swept Under the Rug

Chapter 11 – Politically Connected

Chapter 12 – From the DEA to “Homeland Security”

Chapter 13 – Airline Passengers At Risk from DEA Drug Sting Shipments

Chapter 14 – The Dysfunctional Anti-Drug Agencies

Epilogue – At the Threshold of Conscience

Bill Conroy has worked as a reporter or editor for the past eighteen years at newspapers in Wisconsin, Arizona, Minnesota and Texas. His investigative reporting over the past five years has focused on corruption and discrimination within federal law enforcement agencies.

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