A federal watchdog is investigating whether the U.S. Drug Enforcement Administration under Chief Anne Milgram improperly awarded millions of dollars in no-bid contracts to hire former employees, people with knowledge of the investigation told The Associated Press.
Among the expenses being investigated by the Justice Department’s Office of Inspector General is $4.7 million for “strategic planning and communications” and other contracts used to hire people Milgram knew from his days as New Jersey’s attorney general and as a law professor at New York University—at costs far exceeding the salaries of civil servants.
At least a dozen people have been employed under such contracts, including some in Milgram’s inner circle, who handle intelligence, data analysis, community outreach and public relations — work that often requires security clearances and is traditionally done by the DEA’s own 9,000-person workforce.
Also under scrutiny is $1.4 million to a Washington law firm for a recent review of the DEA’s scandal-plagued foreign operations that was widely criticized for giving short shrift to agent misconduct and how to prevent it. That review was co-authored by Boyd Johnson, former right-hand man to one of Milgram’s closest friends, Preet Bharara, when he was US attorney in Manhattan. Bharara himself landed with the firm, WilmerHale, even while the review was being conducted.
“Some of these deals look very swampy,” said Scott Amey, general counsel for the nonpartisan Project on Government Oversight, noting that federal contracts are not meant to circumvent the government’s hiring process and should be done without preferential treatment and avoid even the appearance of a conflict of interest. Contractors are also prohibited from performing “inherent governmental functions,” such as managing federal employees.
“Contracts should never be awarded based on who you know,” Amey said.
Details of the expanded probe, which began several months ago in response to employee complaints, came from several people interviewed by the inspector general’s office who discussed the ongoing probe and provided contract documents on condition of anonymity. If misconduct is found, the inspector general can recommend anything from administrative sanctions to criminal prosecution.
The investigation comes as the DEA grapples with repeated revelations of agent misconduct that have rocked the federal drug agency and a fentanyl crisis that claims more than 100,000 overdose deaths a year, which Milgram has called the “deadliest drug threat our country has ever faced.”
The DEA declined to make Milgram available for an interview or to discuss the investigation and specific contracts, instead releasing a statement.
“The DEA has acted quickly to set a new vision, target the global criminal networks responsible for hundreds of thousands of American deaths, raise public awareness of how just one pill can kill, and promote and recruit hundreds of highly talented people,” it said. . “These changes have been made through a comprehensive and multi-part process, and we are committed to ensuring that the DEA works relentlessly to protect the national security, safety and health of the American people.”
Anthony Coley, a former Justice Department spokesman who has known Milgram for 15 years, said the investigation may stem from employees unhappy with such organizational changes and seeking ways to “push back or undermine it, even if the underlying allegations are not true.”
“But that’s what inspectors general are for,” he said, “calling balls and strikes.”
With a tough New Jersey bravado and data-driven “Moneyball” approach to the war on drugs, the 52-year-old Milgram joined the DEA nearly two years ago with a mandate to clean house.
But the Biden appointee quickly ruffled feathers by ousting several career DEA officials she saw as part of a clique culture that allowed abuse to flourish. Instead, she favored the advice of newly installed lawyers and data crunchers who work with her in an isolated section of the 12th floor of DEA headquarters known as “the bubble.”
Milgram has also made a point of showing zero tolerance for sexual misconduct and racism in the ranks, warning agents that they can now be fired for certain first offenses — a departure from previous administrations.
One of her first actions was to order an external review of the DEA’s sprawling foreign operations, which span 69 countries. It came in the wake of the high-profile arrest of José Irizarry, a disgraced agent now serving a 12-year federal prison sentence after pleading guilty to laundering money for Colombian drug cartels and skimming millions from asset seizures and informants to fund an international joyride of fine dinners, parties and prostitutes.
But those selected to conduct the review raised eyebrows. One, John “Jack” Lawn, is a DEA legend, but the 87-year-old’s insights stem from his tenure as head of the agency in the 1980s. After leaving government, Lawn headed the Century Council, a beverage industry group, which funded research into campus alcohol abuse conducted by Milgram’s mother, a Rutgers University expert in the field.
Lawn’s co-author, Boyd Johnson, worked as a prosecutor in international drug cases before becoming a partner at WilmerHale. Both Johnson and Milgram have close ties to Bharara, who, after being fired as U.S. attorney by President Donald Trump, joined the NYU faculty with Milgram and co-hosted the “Cafe Insider” podcast on legal issues. Last year – when the foreign operation was completed – Bharara joined WilmerHale. And this year, the DEA hired away from the firm Milgram’s former NYU research assistant to become her deputy chief of staff.
Bidding rules for the review were bypassed by the DEA’s argument of “unusual and compelling urgency,” saying that “the threat posed by illegal foreign drugs to the health and safety of the American public has never been greater.”
But instead of the expected six months to get the review out, it took almost three times as long.
“It’s a total waste of taxpayer money,” said Matthew Donahue, who headed the DEA’s foreign operations until he butted heads with Milgram and was transferred to Colombia, a demotion that led to his retirement.
Donahue said he and several other overseas DEA veterans were never interviewed as part of the review, which barely mentioned Irizarry or other scandals and borrowed heavily from publicly available audits and DEA operations manuals.
“It’s something that could have been written in three days,” he said.
Iowa Republican Sen. Chuck Grassley, a longtime voice against government waste and a member of the Senate Judiciary Committee, ripped WilmerHale’s review as “astoundingly vague” and recently sent Johnson a letter requesting a series of records, background information about his relationship with Milgram and asking, whether she or anyone else at the DEA requested redactions to the report.
“Although the DEA initially billed this report as a ‘comprehensive review’ of the DEA’s foreign operations strategy, the report glosses over or ignores serious agency shortcomings and spends much of its 49 pages quoting from publicly available documents that could have been pulled from a web site,” Grassley wrote in the letter last week.
Neither Lawn, Johnson, Bharara nor WilmerHale responded to requests for comment.
New Jersey tie
Another no-bid contract under investigation went to Jose Cordero, a longtime New York City police official whose ties to Milgram date back to 2007, when, as attorney general, she named him New Jersey’s first statewide director of gangs, guns and violent crime.
Together, they overhauled the Camden Police Department — then under state control due to rising crime and corruption — crunching crime statistics and real-time intelligence to deploy resources as needed. The approach won national praise as the homicide rate in what was then the country’s most dangerous city was cut by nearly half.
“We have a lot of culture to change,” Milgram said in a 2014 TED talk about the use of statistics to fight crime. “But the good news about all of this is that we know it works.”
Less than three weeks after taking the top job at the DEA, Milgram awarded Cordero what has become a nearly $400,000 contract to perform data analysis of crime statistics.
But Donahue said Cordero’s expertise in urban policing is of less value to the DEA, which processes a flood of intelligence from foreign and domestic wiretaps, as well as informants, to dismantle transnational criminal networks.
Cordero did not respond to requests for comment.
Several of the hires in question joined the DEA through The Clearing, a Washington-based federal contractor that provides outsourced administrative services to the DEA and other federal agencies.
The clearinghouse’s $4.7 million in billings to the DEA for “strategic planning and communications consulting services” over the past two years accounted for 30% of its federal contracts during that period, records show.
Among those from The Clearing under the microscope is Lena Hackett, a former Democratic congressional staffer and founder of Community Solutions, an Indianapolis consulting firm focused on public health and criminal justice. Milgram described her as her most important partner in a police reform project she established in Indianapolis while teaching at NYU.
Internal records show Hackett regularly briefs field offices, drafts policy statements and memos for Milgram and meets with families affected by the fentanyl crisis. For her services, the DEA budgeted $257 an hour — more than triple the hourly rate earned by the agency’s top officials, including the head of community outreach.
Another brought in through The Clearing is Julia Pacetti, a publicist in New York City who has managed media campaigns for prominent public figures and authors.
According to documents, Pacetti’s firm, JMP/Verdant, collected $11,500 a month plus expenses for writing news releases, handling interview requests and arranging news conferences — work that some DEA officials consider redundant given the agency’s existing staff of public relations officers.
Several recent DEA news releases — including those announcing fentanyl busts as part of the agency’s “One Pill Can Kill” enforcement surge — came not from the DEA’s official email account, but from “Julia Pacetti-Verdant.”
Neither The Clearing, Hackett nor Pacetti responded to requests for comment.
“This looks terrible for taxpayers,” said Don Fox, former acting director and general counsel for the Office of Government Ethics. “The appearance is terrible.”