Noem’s Ad Procurement Scandal Was Just The Tip of the Iceberg

This story is part of TPM Cafe, TPM’s home for opinion and news analysis. 

Markwayne Mullin is on track to take over a Department of Homeland Security that appears to have made corrupt contracting, meant to exploit loopholes and reward allies, standard operating procedure. The scandal that became the last straw for Secretary of Homeland Security Kristi Noem — her procurement of a $200 million ad campaign from close associates — is just a part of the picture. Certainly the Trump administration would like to depict the Noem ad campaign as an aberration, and, with her departure, a closed episode. But the drip, drip of new facts from her time atop the agency continues, with a report from NBC Thursday alleging that Corey Lewandowski, an advisor to Noem, was taking a cut from contracts. The ad procurement scandal that brought down Noem, though sensational, is the tip of the iceberg at the department. 

DHS has initiated an enormously costly campaign to build or otherwise procure detention space all over the country, including $38 billion for facilities to store the vast population of migrants Trump intends to seize and to lock up. With commands from on high to put in place this new detention capacity as fast as possible, DHS appears primed to create a broader procurement scandal so bad that it may become the Achilles’ heel of the entire campaign to rapidly seize, detain and mistreat a vast population.

A brief review of Noem’s ad scandal provides a good introduction to how far DHS has strayed from federal contracting norms. Members of Congress centered their attention on how the ad campaign gave contracts to firms that were connected to the secretary, who, in turn, created shamelessly self-promoting ads featuring Noem herself. Let us look at the part that is telling about DHS procurement generally, including for detention facilities. Noem wanted, of course, to select a particular firm to do her ads. Normally, competition rules get in the way: competition rules require choosing the firm that gives lowest cost and best value, which is determined through specific criteria. (Detention firms, for example, are evaluated in part on the human fitness criteria for detention.) 

A major ProPublica article in November, which broke the story on Noem’s ads, suggests that the conflict of interest was obscured by having the Noem-linked firm not be a general contractor, but a subcontractor. ProPublica quoted a DHS spokesperson making this excuse — that DHS was only involved with general contractors, not with the ad campaign subcontractors, and so of course it was innocent about the selection of Noem’s friends. DHS said about its contracting staff, “It is very sad that Pro Publica would seek to defame these public servants.” This was bogus. “We don’t have visibility into why they were chosen,” said Tricia McLaughlin, at the time the top DHS spokesperson, at another point in the article. McLaughlin’s husband runs the firm that got the contract. The excuses were revealing about how DHS contracting would go about avoiding competition. The Trump administration’s fig leaf denied the role an agency does have with subcontractors. (I, too, was quoted in the ProPublica story as an expert saying, “Hiding your friends as subcontractors is like playing hide the salami with the taxpayer.”) 

If this were an isolated episode, that would be one thing. But, it’s the fundamental story: DHS breaks basic procurement rules, especially by foregoing competition. These are rules by which all administrations, Republican and Democratic, must abide, and it may yet bring down DHS as it brought down Noem. 

Looking to DHS detention, there is a two-stage story unfolding around what was to be a new, flagship detention facility, Ft. Bliss, in El Paso, Texas. The $1.26 billion contract for this 4,000 capacity tent city in the Texas desert was awarded to a one-man firm. The process again appears to be a disgraceful effort to avoid competition and get the work to DHS’s cut-out. DHS could then pick the firms it wanted as subcontractors, much as in the Noem ad case, since DHS did not not compete subcontracting. 

The contract was awarded by the bizarre process of a Navy small business award — because the Navy award is a handy vehicle (even though the El Paso facility, in the desert, is as far from Navy ships as you can get). Effectively, there did not have to be much competition on a Navy small business award. The awardee was a cut-out whose previous biggest federal contract was $16 million. The real work would be done, according to reports, by politically connected subcontractors whose focus would be on speed rather than standards of humane treatment. The concept of procuring a tent city for thousands of men, women and children from the community, not even hardened criminals, always portended, like the notorious “Alligator Alcatraz,” suffering for the detainees. 

In the second part of the story, just revealed recently, ICE’s own inspectors, last September, found dozens of violations of federal standards at the facility. There are complaints of substandard medical care, and a measles epidemic has broken out. A document distributed internally at ICE indicates plans to close it down. Shutting down a new, hugely expensive facility would be the poster child example of waste and abuse. But DHS, apparently, came up with a new plan: it just kept the facility open by terminating the prior contractor and making a rushed no-bid contract to Amentum, the second-largest contractor for federal services, a well-connected firm which has received other enormous Trump administration contracts. Since Amentum had already been the subcontractor for the Ft. Bliss facility until now, this is the opposite of reform through competition. In another striking example, PBS reported that DHS used the “urgency” exception to competition for a no-bid contract to reopen an old facility that city officials described as a “hell hole.”

Some may wonder whether the contracting violations pale in importance given ICE’s notorious problems with the way in which it has operated in cities, including its processes for conducting arrests. It may even be asked why one should care about something as bloodless as procurement violations, when there is such a human tragedy as citizens shot and detained children suffering. 

But on examination, there is a pattern. The plan is also to keep these newly detained people locked up in detention facilities in astronomical numbers, by changing the previous rules that allowed most migrants to post bond and go back to their community until their case was heard. The administration has rolled out a new policy to deny bond to these detainees, keeping them stacked up in maxxed-out facilities. 

Building and operating huge detention facilities without the usual competition rules not only saves the time needed to conduct proper competition. It ensures that the contractors, indebted as they are to the administration, obey the will of the high command at DHS. Poor conditions at detention facilities are no accident. Migrants in such detention experience pressure to self-deport rather than endure years in these facilities. But — particularly if the migrants had a potential legal case for not being deported, for being allowed to stay — then forcing them out by bad detention conditions is a legal travesty. 

This is the nature of procurement scandals. Besides lack of competition — meaning a poor money deal for the government, and a sweetheart deal for the contractors — it means the government forgoes some “value” in the detention facility “product.” In Iraq war procurement, poor product from lack of competition meant the product, say, training services for Iraq  police forces, were flawed. The whole war effort was tainted by reliance on hastily summoned contractors. Today that translates into ignoring standards for humane detention facilities. 

A further aspect: normally it is sufficient to say that competition leads to best value, and it is unnecessary to add that it avoids corruption. That is, while there are big countries in the world with procurement corruption, like China, we in the United States have hitherto been blessed with a relative absence of corruption and need not cite that as a reason for competition. But in this administration, it is apparently a different story. A recent investigation by the Project on Government Oversight, a watchdog group, found that companies winning the largest amount of ICE contracts made large political contributions and lobbied on a law tripling ICE’s budget. If the competition system were fully operating, contractors would not benefit from campaign contributions or hiring of those close to the administration. The Noem advertising contract showed that while DHS management touted the role of DHS contracting staff, the staff in fact presided over the money flowing to well-connected firms. The procurement tactics by which DHS avoids competition allow it to reward those “on the team” who have contributed or lobbied. 

In the short term, as Markwayne Mullin arrives at the agency, it may be an uphill battle to expose the full extent of contracting abuses. But, just looking a little further out, starting with the November election, the glare of full congressional scrutiny will go to detention facility procurement scandals. The hearings during which Noem testified, immediately before she was fired, will not be the last time DHS is in the congressional hot seat over its contracting.