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IRS, CBP employees could get back pay tomorrow, leaders say

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Employees at the IRS and Customs and Border Protection should get at least some shutdown-related back pay at soon as tomorrow, senior leaders at the two agencies said today.

“You will receive your back and regular pay a full four days earlier than Oct. 28, the day most people would receive pay,” Acting IRS Commissioner Danny Werfel said in an email to employees. In a similar note, Assistant CBP Commissioner Eugene Schied said that employees there should see retroactive salary payments show up “as early as Thursday.”

The two agencies, whose combined workforces total almost 150,000, are both paid through the Agriculture Department’s National Finance Center.

The National Treasury Employees Union, which represents workers at both IRS and  CBP, is “grateful” that agency leaders “made this a priority and that employees at the agency and at the payment centers worked diligently to get this done,” Colleen Kelley, the union’s president, said in a statement. As early as tomorrow, CBP workers should receive back pay for Pay Period 19, which includes the first week of the shutdown, Kelley said, while a deposit for Pay Period 20 should follow on Monday, Oct. 28.

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TIGTA keeping emails under wraps in tax exempt probe

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The highly publicized government watchdog report back in May that found the IRS tax exempt division singled out conservative groups for scrutiny often cited internal emails to help back up those findings.

The Treasury Inspector General for Tax Administration (TIGTA) cited email source material, for instance, in referring to a June 29, 2011 internal briefing paper, which the report said showed how a team of specialists would review any nonprofit applicants with words such as Tea Party or Patriots in a case file.

Democrats have since pointed out that progressive groups faced scrutiny from the IRS, too, accusing TIGTA of cherry-picking evidence. But Republicans say conservative applicants were subjected to more rigorous reviews.

All of which shows that despite partisan disagreements, interest in the report and its methodology remains strong in Washington even now months after its release.

In a recent letter, TIGTA has acknowledged more than 600 pages of email source material that it used to help substantiate just part of a timeline it included in its report.

However, the watchdog office is declining to release even a single page.

TIGTA said in a recent letter that it’s found 656 pages of records in response to a request by Federal Times for emails cited in five pages of the timeline.

However, “we are withholding the documents in full,” the IG noted in a response letter.

You can read a copy of the letter here.

If nothing else, it’s a good primer in some of the sorts of exemptions to the Freedom of Information Act that agencies can and do cite as the basis for shielding records from public view.

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IRS postpones Aug. 30 furlough day

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The IRS has called off a furlough day planned for Aug. 30, and will make a final decision next month on whether any more unpaid time off is needed by the end of the fiscal year, acting Commissioner Danny Werfel told employees this week.

“We have made substantial progress in cutting costs. . . Our progress is such that we have decided to postpone the furlough day scheduled for Aug. 30. We still have more work to do on the budget and cost-savings, so we will re-evaluate in early September and make a final determination as to whether we will need another furlough day in September,” Werfel said in a Wednesday message, excerpts of which are posted on the agency’s web site.

Because of sequester-related budget cuts, the IRS had originally planned for five furlough days in fiscal 2013. IRS staff have taken three so far, on May 24, June 14 and July 5. Because of cost-cutting in other areas, the agency canceled a fourth furlough day scheduled for July 22nd.


IRS writes off a furlough day

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Today brought some good news for IRS employees: An unpaid furlough day scheduled for this coming Monday has been cancelled.

“The IRS will be open for taxpayers that day as scheduled, and all employees will be paid for that day,” acting agency chief Danny Werfel said in a blast email to workers. “This step follows a lot of hard work across the service to cut costs.”

The now-cancelled furlough day was supposed to be the fourth taken by IRS employees because of sequester-related budget cuts. A fifth and final furlough day is still scheduled for Aug. 30; management will keep the workforce informed on its status, Werfel said in the email.

News that at least one furlough day can be written off was welcomed by the National Treasury Employees Union, which represents many IRS workers.

“While I am concerned that this announcement comes so close to the planned furlough day, it is a positive development arising from our continuing discussions with the agency on furloughs,” NTEU President Colleen Kelley said in a news release. “We have been encouraging the agency and working with it in an effort to find savings sufficient to allow it to cancel employee furloughs.”

‘Shame on you,’ disabled vet Duckworth grills IRS contractor

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Rep. Tammy Duckworth, D-Ill, lost her legs and the use of her right arm as a helicopter pilot in Iraq in 2004. She was awarded a Purple Heart for her combat injuries.

Braulio Castillo broke his foot in a prep school injury nearly three decades ago at the U.S. Military Preparatory School, which he attended for nine months before playing football in college. He owns a technology business certified as a service-disabled, veteran-owned company eligible for government set aside contracts.

The two met at a House Committee on Oversight and Government Reform hearing Wednesday in an exchange neither will forget anytime soon.

For background, what brought them together was a months-long House probe into whether Castillo’s company won IRS contracts thanks, in part, to help from a top contracting official and friend inside the IRS named Greg Roseman, who pleaded the Fifth Amendment when called to testify.

While much of the hearing delved into questions about Roseman and Castillo’s friendship, lawmakers from both parties wondered aloud how a prep school injury suffered so long ago could result in Castillo’s company getting special set aside contract status from the government at a time when so many injured veterans are looking for work.

But among hours of testimony, Duckworth’s questioning of Castillo stood out.

She talked of her own struggles and those of a friend who, exposed to Agent Orange, died of leukemia. She talked of recovering from her injuries along with a young man whose leg had been blown off. And she talked about a backlog of veterans waiting more than 200 days to receive disability ratings from the Department of Veterans Affairs.

At one point, Duckworth read aloud from a letter that Castillo had sent to the VA as his company sought set-aside contract status, quoting him as saying, “These are crosses that I bear due to my service to our great country and I would do it again to protect this great country.”

Duckworth paused.

“I’m so glad that you would be willing to play football in prep school again to protect this great country,” she said. “Shame on you, Mr. Castillo. Shame on you. You may not have broken any laws … but you certainly broke the trust of this great nation. You broke the trust of veterans.”

You can watch the exchange here.

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IRS official pleads the Fifth

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An IRS technology official at the center of a House investigation into whether he pushed the agency to award contracts potentially worth up to $500 million to a company owned by a personal friend pleaded the Fifth Amendment and refused to testify at a House hearing Wednesday.

A House Committee on Oversight and Government Reform report Tuesday said Greg Roseman, an IRS deputy director, may have influenced the IRS to award lucrative IT contracts to Strong Castle, Inc.

The same report also said the company had given the Small Business Administration misleading information to win approval so it could obtain set aside contracts, and that its Veterans Affairs-awarded status as a so-called service disabled veteran company was based on a nearly three decade old foot injury by its owner.

The House investigation also uncovered numerous text messages between Roseman and Strong Castle’s owner, Braulio Castillo. The company was previously called Signet Computers. The committee report said the company had little experience, but Castillo pushed back on that assertion, saying the firm had 15 years experience when he purchased it.

Still, Rep. Darrell Issa, R-Ca., the chairman of the committee, said the company had little experience because employees under the previous owner from years ago were no longer around.

Appearing before the committee, Roseman declined to testify other than giving his title, and he declined to say whether he was still employed by the IRS.

The House report called the relationship between Roseman and Castillo “cozy.”

“Text messages … show that Castillo and Roseman had a long-term friendship that extended well beyond a professional relationship,” the report said, adding that many of the messages were vulgar.

Investigators also found a February 2012 email from Roseman to Castillo in which Roseman provided the name of a supervisory contract specialist at the General Services Administration, where Roseman previously worked, who could help Castillo get a contract on GSA’s Schedule 70, a catalog of governmentwide contracts for information technology products and services. In the email, Roseman told Castillo, “I’ve talked to her and she will look into expediting.”

Beth Tucker, a deputy  IRS commissioner, said the agency is the process of severing its relationship with Strong Castle.

While Issa said the IRS hadn’t indicated in recent days whether it would continue doing business with the company, Tucker characterized new text messages uncovered in the House probe as a surprise to IRS officials.

She said Roseman was asked by supervisors if he had a personal relationship with Castillo and “he denied it.”

Meanwhile, Castillo said his company won blanket purchase agreements from the IRS, which placed orders that amounted to about $50 million, with most of that money going to the company’s large business partner, IBM.

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Probe finds personal ties, old injury aided IRS contractor

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A high school  injury nearly three decades ago enabled the owner of a contracting company to claim service disabled veteran status last year, opening the door to contracts worth up to a half billion dollars, a House investigation has found.

Braulio Castillo, owner Signet Computers, which has been renamed Strong Castle, injured his ankle in the fall of 1984 during his year at the U.S. Military Academy Preparatory School, but would later go on to play quarterback and linebacker the next year at the University of San Diego, according to a 157-page report Tuesday by the House Committee on Oversight and Government Reform, which will hold a hearing on the contract on Wednesday.

The report said high school football players recruited to play at West Point sometimes enroll in the prep school for a fifth year of high school to “redshirt” and prepare to play college football. Castillo’s injury happened during an orienteering exercise, and his nine months at the prep school represent the entirety of his military career, according to the report.

Still, 27 years later, soon after Castillo purchased a government contracting company, he filed a claim with the Department of Veterans Affairs seeking compensation for a service disability, investigators found.

Once approved, the disability enabled Castillo’s company access to government set asides through the VA’s Service Disabled Veteran Owned Small Business program.

Castillo told a VA examiner weighing the company’s application for entry into the set aside program about the “crosses I bear due to my service to our great country,” according to the report.

He later told congressional investigators that his injury was debilitating over the years and that he’d had three foot fusions. Had Castillo completed his year at the preparatory school without injury, he wouldn’t have been considered a veteran, but a VA official told House investigators that cadets who are injured at school become a veteran due to the service-connected disability, the report said.

The House report also found Castillo’s newly purchased company had no experience with the IRS last year, but still won lucrative information technology contracts worth up to $500 million, in part, because of its status as a HUBZone contractor and Castillo’s relationship with a top IRS contracting official.

Under Small Business Administration rules, a HUBZone, or Historically Underutilized Business Zone, designation gives contractors an edge in competing for federal work if they’re based in certain economically distressed areas.

The SBA revoked Strong Castle’s HUBZone status in May, but has declined to disclose why, saying the decertification letter contains confidential business information.

The House report, however, said the company provided “inaccurate, unreliable and misleading information” to SBA. In a statement to Federal Times prior to the report, company has said it disagreed with the SBA ruling.

The House probe also found that as Strong Castle sought IT work within the IRS, Castillo turned to a personal friend inside tax agency for advice named Greg Roseman, the deputy director of IT procurement.

The House report called the relationship between Roseman and Castillo “cozy”,

Among thousands of pages of documents, House investigators uncovered dozens of text messages between Roseman and Castillo.

“Text messages … show that Castillo and Roseman had a long term friendship that extended well beyond a professional relationship,” the report said, adding that many of the messages were vulgar.

Investigators also found an email from Roseman to Castillo in February 2012, in which Roseman forwarded along a contact at the General Services Administration, where he had previously worked.

At the time, Castillo was trying to place his company on the GSA Schedule 70.

“I’ve talked to her and she will look into expediting,” Roseman told Castillo, referring to a supervisory contract specialist who “knew that the application was a priority for Greg Roseman,” the report said.

Prior to the report, the Federal Times previously sought to interview Roseman and submitted questions to the IRS, which did not respond. Inquiries to Castillo about his military experience also were not returned.

The company was placed on Schedule 70 after 50 days, while the average wait is 114 days, the report said.

“Greg Roseman’s relationship with Braulio Castillo was invaluable in helping Strong Castle win numerous contracts potentially worth hundreds of millions of dollars,” the report concluded. “Given its limited track record and lack of prime contracting experience in the federal government, Strong Castle likely would not have won the contracts.”

Last year, the Treasury Department named Signet as its small business prime contractor of the year.

Another VA executive moves on

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Todd Grams, the Veterans Affairs Department’s chief financial officer, is leaving to become chief of staff at the IRS.

In an email sent today to “Friends and Colleagues,” Grams, who is also the VA’s executive-in-charge for management, said he is returning to the IRS this week at the request of acting Commissioner Danny Werfel.

“For a total of almost 11 years (over two tours), I have had the honor to serve our nation’s veterans,” Grams said. “I am very grateful to have had both opportunities to contribute at the VA.” Grams was previously at the IRS from 2001 to 2006, first as  CFO and then as chief information officer, according to his official bio.

Grams is at least the fourth senior official to exit the Veterans Affairs Department—the second largest Executive Branch agency–since February. Others include Deputy Secretary Scott Gould, Chief Information Officer Roger Baker and Chief Technology Officer Peter Levin.

Two years ago, Grams’ work in consolidating and streamlining VA management earned him a prestigious Service to America (“Sammie”) award from the Partnership for Public Service.  Asked who will replace him, VA spokesman Josh Taylor in an email this afternoon that he had “nothing on that yet.”

Grams isn’t Werfel’s only new hire. In a news release today, the IRS said that Heather Maloy will be deputy commissioner for services and enforcement, while David Fisher will become a senior adviser and chief risk officer.

Fisher, who headed the Defense Department’s now disbanded Business Transformation Agency, has more recently been chief administrative and financial officer at the Government Accountability Office. Maloy has been commissioner for the IRS’s Large Business and International Division. The release doesn’t say who–if anyone–each of the three is replacing.

“Their extensive expertise in management inside and outside the IRS will help us make improvements now and in the future,” Werfel said. “These are essential steps to restore the public’s trust and ensure the fair and effective administration of the nation’s tax system.”

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Werfel missed at Senate hearing

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Danny Werfel is just starting his new gig as acting IRS chief, but leaders of a Senate oversight committee are already wishing he were back in his old post as controller of the Office of Management and Budget.

Werfel “has demonstrated integrity in everything he’s done in the federal government,” Sen. Tom Coburn of Oklahoma, the top Republican on the Homeland Security and Governmental Affairs Committee, said at a hearing today. “My hope is that he’s  there for a short period of time and back where we can use him in a better way.”

“He really has a base of knowledge that very few people have.”

The committee’s chairman, Tom Carper, D-Del., quickly seconded, joking that “I approve this message.”

Werfel had been scheduled to testify at the hearing on program duplication and overlap, but instead assumed his new job today. As a result, Gene Dodaro, head of the Government Accountability Office, had the witness table to himself.

The bipartisan praise suggested one reason that Werfel–a career financial manager (albeit Senate-confirmed) who has worked closely with the committee on improper payment issues–was chosen to run the IRS despite never having overseen a large agency: A straight-shooter reputation with Congress in a job that will likely call for plenty of face time on Capitol Hill in the weeks to come.

But his exit from OMB adds to the exodus of senior leadership at the budget agency. Although Director Sylvia Burwell quickly won Senate confirmation last month, both the deputy director positions are vacant, as is the post of administrator at the Office of Information and Regulatory Affairs and, of course, Werfel’s job.

Although Carper’s committee later in the day approved Brian Deese to be deputy budget director, a final vote by the Senate won’t happen until next month at the earliest. Ditto for the nomination of Howard Shelanski to head the regulatory affairs office. President Obama has so far not formally settled on any candidate for the posts of deputy management director or controller.

“Nobody’s home,” Carper said. “Sylvia’s terrific, but we’ve got to get a really great team around her.”


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Public Service Recognition Week: Tom Burger

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Tom Burger has spent his life dedicated to public service. Burger said it started with  President John F. Kennedy’s inaugural address in 1961, when Kennedy said, “Ask not what your country can do for you – ask what you can do for your country.”

“That stimulated me to look into public service,” Burger said.

As a young man, Burger served as a Marine in the Vietnam War during the Tet Offensive of 1968. After he left the Marines, Burger was still looking to serve. He turned to the federal government.

Burger looked into working at the Federal Bureau of Investigation or the Internal Revenue Service, but he ended up at the IRS, where he worked for 37 years. Burger rose to the rank of director of the employment tax. Working for the IRS, Burger helped ensure that the majority of the money that funds the federal government was collected. He was responsible for determining whether citizens received W-2 or 1099 tax forms.

“Basically are you an employee or independent contractor?” Burger said,  ”It’s the IRS’s job is to ensure that everybody pays their fair share – no more, no less.”

Even though Burger is retired, you wouldn’t guess it. He’s the executive director of the Professional Managers Association and the treasurer of the Federal Employees Education Fund.

Listen to Burger’s views on public service.

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