On June 27, the U.S. Department of Justice announced that on June 26, a federal grand jury in the District of Columbia returned an indictment against Eghbal “Eddie” Saffarinia, former Assistant Inspector General for Management and Technology in the U.S. Department of Housing and Urban Development Office of Inspector General (HUD-OIG). The indictment charged Saffarinia with concealing material facts, making false statements, and falsifying Office of Government Ethics (OGE) annual financial disclosure forms, in connection with his allegedly disclosing confidential internal government information to a friend (“Person A”) who was the owner and chief executive officer of a Virginia information technology company (“Company A”) and undertaking efforts to steer government contracts and provide competitive advantages and preferential treatment to Company A.
According to the Indictment, between early 2012 and mid-2016, Saffarinia, while serving as an Assistant Inspector General at HUD-OIG, was HUD-OIG’s Head of Contracting Activity. In that capacity, he “oversaw procurement review and approval processes, including IT contracts; had access to contractor proposal information and source selection information; and participated personally and substantially in IT procurements.”
Saffarinia and Person A allegedly “were friends who emigrated from the same country, went to college together in the early 1980s, and socialized with each other on a regular basis.” They also had a long-standing financial relationship, in which Saffarinia owed a total of $80,000 to Person A. During the period when Saffarinia was receiving payments and loans from Person A, he allegedly “steered significant government business to Company A and its business partners, he disclosed confidential and internal government information to Person A, he gave competitive advantages and preferential treatment to Person A and Company A, and he caused and attempted to cause HUD-OIG to increase the amount of work and hours awarded to Person A and Company A.”
As one consequence of Saffarinia’s alleged efforts, Company A received approximately $1,065,520 for subcontractor work performed under an information technology (IT) services contract with another company. In addition, Saffarinia allegedly caused HUD-OIG to recompete that IT services contract, and caused another company to form a business partnership with Person A and Company A for the recompete contract, in which Company A was expected to receive approximately $9 million.
Note: Although there is no plea or conviction yet in this case, ethics and compliance officers in public- and private-sector entities can use the facts as alleged in this case to brief and train executives and employees, to underscore the importance of strict compliance with conflict-of-interest requirements.
This case should also indicate that government agencies and companies cannot simply rely on self-disclosures by their employees to conduct effective monitoring and oversight on compliance with conflict-of-interest requirements. In this case, the evidence against Saffarinia apparently includes numerous meetings over lunches and dinners, during Saffarinia’s tenure at HUD-OIG, in which they discussed business opportunities for Person A and Company A and the IT services contract, as well as communications between Saffarinia and Person A that included Saffarinia’s forwarding of internal HUD-OIG emails and contract-related materials to Person A.