On March 26, 2010 the Department of Justice reported that a former Department of Energy (DOE) employee, Ms. Donna Scott, had pled guilty to criminal conflict of interest and her husband had pled guilty to making a false statement to a federal agent.  We have written before about both organizational and personal conflicts of interest—notably here and here.  There is a proposed rule in play that would establish standards for contractor personal conflicts of interest similar to those already in place for government employees, making this an issue applicable to pretty much everybody.

According to the DOJ announcement, Mrs. Scott “coordinated the use and renovation of DOE office space.”  Included in her duties was the oversight of the renovation of a lobby and conference room in a DOE building in Germantown, MD.  Her duties also included the acquisition of new furniture for those spaces.  While employed by DOE, she “recommended to a co-worker that the co-worker obtain price quotes for furniture from her husband, Timothy Scott. Timothy Scott provided these price quotes to Donna Scott’s co-worker, both of which referenced Timothy Scott as the manufacturer’s representative.”  However, the co-worker was told that she needed two additional price quotes in order to “satisfy competitive bidding requirements.”

So, to help her co-worker satisfy “competitive bidding requirements,” Mrs. Scott—

--admitted that she subsequently obtained two additional price quotes for each transaction from her husband and provided them to her co-worker as the competitive price quotes. Donna Scott admitted that she knew, unlike the original price quotes, that none of these new price quotes referenced Timothy Scott by name. Moreover, the additional quotes bid a higher price for the furniture than the initial quote, making Timothy Scott’s original bid the lowest.

Mrs. Scott’s co-worker used the three quotes to justify why Mr. Scott’s low bid was fair and reasonable, and DOE then purchased the furniture from Mr. Scott.

In addition to the foregoing, Mrs. Scott—

--selected furniture worth approximately $300,000 from particular manufacturers for the cafeteria renovation project. [She] admitted that she knew these manufacturers’ representatives planned to use her husband as their dealer of record for these transactions, thus earning her husband a commission. [She] arranged for the furniture to be purchased by the General Services Administration (GSA) on behalf of the DOE. As a result, Timothy Scott earned approximately $24,174 in commissions from the manufacturers.

According to the DOJ announcement, “Donna and Timothy Scott each face maximum sentences of five years in prison and fines of $250,000 or the greater of twice the gross gain or loss from the offense. U.S. District Judge Peter J. Messitte has scheduled sentencing for June 3, 2010.”