Gallup's attempt to hire a Federal Emergency Management Agency official led to the official pleading guilty to a federal offense, two Gallup employees losing their jobs and Gallup's chief executive officer giving up his authority over his company's government contracting business.
What went wrong?
Federal law prohibits contractors from knowingly engaging in employment discussions with government employees who have not disclosed they are seeking work with those contractors.
Gallup CEO Jim Clifton was directly involved in hiring discussions concerning a FEMA official who was handling a potential Gallup contract, according to emails excerpted in government documents. The excerpts show Clifton raised the issue of the FEMA official's ethics conflict with another Gallup employee. The documents contain no indication that Clifton acted to stop the hiring process.
The following timeline was compiled using details available in public documents provided to The World-Herald by the Department of Homeland Security, including the April 19 administrative agreement Gallup signed with the department and filings associated with a related November 2012 Department of Justice lawsuit.
Emails are quoted directly as they appear in the documents, including ellipses and errors. The documents do not make clear who sent or received some of the emails.
2004: Timothy M. Cannon, working for the Library of Congress, applies for employment with Gallup. His application is rejected.
2007: Cannon becomes director of human capital for FEMA, responsible for oversight, training and administration of FEMA's federal workforce.
2007: Gallup identifies FEMA as a potential customer. Gallup partner Tim Blass meets with Cannon to discuss potential contracts.
January 2008: Blass sends Cannon pricing and a statement of work for a proposed Gallup contract to provide workforce engagement research.
March 2008: Gallup government division managing partner Warren Wright presses Blass to get the contract, saying, “We really need this one.” Cannon meets with Gallup CEO Jim Clifton. After the meeting, Clifton emails Wright to say that Cannon was “a huge advocate of Gallup's,” that Cannon “said he has done everything to get a job at Gallup because he believes so much in our products.”
April 2008: In an email exchange, Clifton asks Blass how much revenue Gallup would see from FEMA if the contract were approved. Blass describes a deal for $6 million over five years.
April 2008: Clifton and Wright discuss hiring Cannon. Clifton emails that “if he gets us a big deal at FEMA ... I think we should hire him,” and later adds, “We should wait of course to see if we win a big quality deal here.”
August 2008: Gallup, in conjunction with another contractor, receives a $1.1 million award to perform the BEST Workforce project for FEMA. Cannon had been Gallup's primary point of contact at FEMA and had advocated on Gallup's behalf to numerous FEMA officials.
November 2008: With Cannon's participation, FEMA increases the total contract value to $1.5 million. Cannon contacts Clifton, who in turn emails Wright to confirm that Cannon had again asked for a job. In an email to Wright, Clifton asks, “What about ethics ... are we okay with all of that ... he is a significant client ... am sure you know the rules ...” The documents do not show a response or whether Clifton followed up on his ethics question.
December 2008: Cannon requests FEMA spend an additional $500,000 based on a Gallup proposal for 10 additional classes under the contract. Cannon and Clifton have lunch Dec. 19.
January 2009: FEMA awards the additional $500,000 in spending. Cannon emails a Gallup employee, “I got another 500k put on the contract. Cool huh?” On Jan. 12, Cannon interviews with Gallup and they discuss salary terms. On Jan. 30 and Feb. 3, Cannon signs FEMA forms for an additional $1.1 million in funding for Gallup.
February 2009: On Feb. 9, Gallup extends a formal employment offer letter dated Feb. 5, for $175,000 annually plus incentive compensation, for a job starting April 6. Cannon announces his retirement from FEMA Feb. 10, effective Feb. 27. On Feb. 27, Cannon asks Gallup for an offer letter with a later date. On Feb. 28, he files a federal form falsely certifying that he had no agreement for employment outside the government. Gallup reissues the offer letter with a March 2 date. It is unclear who signed the offer letters.
March 2009: Gallup employee Julie Curd, executive director of the government division, raises concerns March 10 about the hiring, emailing colleagues, unidentified in the documents, “We need to have him provide an Ethics Advisory Opinion letter from his current agency as soon as possible. ... In Tim's case he has been working for FEMA and he should have contacted the agency's ethics official when first applying/pursuing a job at Gallup.” On March 19, a human resources employee emails colleagues to say Cannon is cleared for hiring. On March 25, Wright emails Curd about “red flags” about Cannon: “Apparently, word is getting around about his departure and joining Gallup. There is speculation among is (sic) co-workers that this is improper. They are pretty mad. This may get in the way of future business with FEMA.” On March 26, a Gallup employee writes in an employment database, “Tim was not able to secure a necessary letter allowing him to pursue work with a company providing services to the government.” The next day, Gallup withdraws the employment offer, telling Cannon he did not pass a background check.
September 2009: Clifton emails some Gallup employees regarding Cannon, “This is a guy that was our sponsor at FEMA ... he is so Gallup gung ho ... when he was applying we broke some of the rules of the US Gov on the 'how' we do it ... so we had to let him go ...”
July 2012: As part of the government's investigation, Gallup and government officials discuss the circumstances of Gallup withdrawing Cannon's employment offer. In a July 29 letter from a Gallup employee not named in documents, Gallup says that Cannon's earlier bankruptcy was a factor, as was Cannon's failure to provide an ethics letter allowing him to work for Gallup “because it indicated a lack of responsibility.” Later, Gallup writes that a vice president (not named in the documents) decided to rescind the offer because of Cannon's bankruptcy.
August 2012: FBI agents, along with Department of Homeland Security agents and others, interview a vice president (not named in the documents) who says the decision to withdraw the offer was based solely on the bankruptcy. The government disagrees, saying in documents the decision was made based on the appearance of ethics violations and Cannon's inability to get government clearance to work for Gallup.
Today: Since the investigation, Wright and Blass have been fired, and Gallup is prohibited from doing business with them.
Curd no longer works at Gallup; she owns a small business in Maryland.
Cannon pleaded guilty in January to violating a federal conflict-of-interest statute, was sentenced to probation and agreed to pay a $40,000 fine.
Clifton has removed himself from oversight of his company's government contracting business as part of an agreement that will allow the company to continue doing business with the government.