Charged with rooting out fraud and waste in Baltimore City government, the Office of Inspector General (OIG) has become inert and ineffective – intentionally so, says its former boss.

The investigative unit, tucked away on the top floor of City Hall, has previously conducted a number of successful probes that have saved taxpayers millions of dollars.

Their targets have ranged from fraud and corruption – overbilling by an IT contractor, bribes accepted by a former Circulator bus administrator, thievery and kickbacks at city landfills – to chronic absenteeism by the director of the Environmental Control Board and “time theft” by an employee who spent half his workday viewing pornography.

These and other investigations have led to scores of employee resignations, more than a dozen criminal referrals to state and federal prosecutors, and corrective plans instituted by city departments.

That was until September 13, 2016.

On that day Robert H. Pearre, the Inspector General, was escorted out of City Hall. Since then, the watchdog agency has done very little:

• It has not issued a single public investigative report, a routine occurrence in the past, for the last year and a half.

• Its Twitter account has been dormant since October 2016.

• It has failed to meet any of its FY 2017 performance measures.

• It is chronically understaffed.

Not only has the inspector general’s position been unfilled for the last 16 months, but two administrative positions and two of its five agent positions are vacant.

One key task of the office – which boasts a hotline and is supposed to act on employee tips about the misuse of public money – is to recover missing or squandered funds.

The agency’s target for recoveries and savings for fiscal 2017 was $750,000. But it only recouped $22,086 (see chart below), according to a report published by the Abell Foundation.

The OIG is currently “too weak to do its intended job and, in and of itself, has arguably become a waste of public resources.”  – Former IG Robert Pearre.

During the previous year when Pearre, a former FBI agent, ran the operation, OIG saved or recovered $8.5 million.

Some of these funds came from efficiencies instituted in city agencies as a result of OIG’s program evaluations unit, which identifies areas for improvements.

Other money came in restitution, including from commercial waste haulers and city employees caught stealing scrap metal and not paying dumping fees.

What Happened?

Why did an agency that received 103 tips and referrals of potential waste and corruption in fiscal 2017 fail to issue a single public investigative report during that time?

The Brew has been looking at the OIG for months and has conducted interviews with former staff as well as members of the city law department.

Pearre, who agreed to speak on the record, says the agency is currently “too weak to do its intended job and, in and of itself, has arguably become a waste of public resources.”

The lack of a “visible return” on the city’s investment in agents and equipment (currently about $800,000 a year) pales in comparison to the “hidden costs” of an ineffective OIG, Pearre says.

Much of the fraud committed by government employees, he says, involve crimes of opportunity based on the employees’ knowledge of weak internal controls and lack of oversight.

“An active IG office greatly increases the likelihood of detecting employee crime and, as a result, fewer employees will risk in engaging in fraudulent activities,” he says.

The Baltimore OIG’s inability to carry out its mandate was not due to staff who “are stretched thin and doing their best,” but from “a lack of independence from political influence,” according to Pearre.

The core issue that led to his forced resignation on September 13, 2016, Pearre said, was the reluctance of senior city officials to allow him to investigate a fellow senior official.

Kimberly Morton, deputy chief of staff for outgoing Mayor Stephanie Rawlings-Blake, insisted that he scuttle an investigation of Jerome Mullen, the city’s Chief Information Officer and head of MOIT (Mayor’s Office of Information Technology).

When he didn’t, he was told to resign. On the day following his resignation, Morton called together the OIG staff.

She told them, according to a person with direct knowledge of the meeting, to hand over all hard-copy case files, a list of all on-going investigations, and the user name and password access for OIG’s case management system.

Morton further instructed the agents that “from that point forward, the OIG would not conduct any investigations of senior city officials,” the source said.

“The instructions to those who remained was just to work low-level, worker-bee cases. Nothing controversial.”  – Former IG Robert Pearre.

Mayor’s Office: No Comment

While Morton was employed by Rawlings-Blake at the time, Pearre said that she was acting on behalf of Catherine Pugh, who had won the Democratic Party primary election and would become mayor three months later.

“Throughout the summer of 2016, it was well known that she [Morton] was doing transition work on behalf of Catherine Pugh,” Pearre said. “I’m certain it was Catherine Pugh’s decision to give me the axe.”

Morton is currently Pugh’s chief of staff. Morton did not respond to a set of questions from The Brew about her alleged role in forcing out Pearre and limiting the scope of OIG investigations.

Mayor Pugh also did not rebut Pearre’s allegation that she approved of his forced resignation.

Her spokesperson, Amanda Rodrigues-Smith, referred some of the questions to City Solicitor Andre Davis (who was not a city official when the events occurred) and did not answer other questions.

One of the questions asked, but not answered by the mayor was this:

Over the past year, the output of the OIG (as measured by memorandums, public synopses of investigations, etc.) has dramatically declined. Does the drop-off concern you in terms of helping make city government work better and decrease potential waste?

Ditching the Mullen Case

Morton’s reported instructions not to investigate senior city officials ran counter to the executive order that established the watchdog agency in 2005. It specifically called on the office to “consider all complaints of fraud, waste or abuse of office” involving “any municipal officer, including all heads of City departments, agencies, bureaus and authorities.”

The source, who asked not to be identified for fear of retribution, described the meeting with Morton as starting off positively as the staff sought reassurance that they would not lose their jobs.

But the mood quickly shifted, the source said, and Morton’s “language became offensive and her demeanor became harsh.”

“She mentioned the OIG investigation of Chief Information Officer Mullen and basically alluded that the OIG had been working on the investigation for over six months with no results and that the investigation had been mishandled. She further stated that despite all this time spent on the investigation, the OIG had not produced a report, even though she had recently been asked by the Inspector General to take administrative action on Mullen.”

The source said that Morton was told that the OIG had been working on the investigation for only a few weeks, not six months. She was also told that the OIG had interviewed more than 10 people at MOIT and “that the complaints made were so grievous that Mullen should be placed on administrative leave and removed from the office before there was an incident that would shed a bad light on the city.”

(In an interview with The Brew, Mullen denied complaints of alleged sexual harassment, misuse of a city purchase card and “theft of time,” and said his work was beyond reproach.)

George Nilson Fired

In the weeks before he was asked to resign, Pearre said he got “tremendous pushback” from the mayor’s office. He recalled one exchange that ended with the following:

“How is the mayor going to look firing her third CIO in a row,” he said Morton asked him.

“How is it going to look if she doesn’t,” Pearre said he shot back.

The pressure grew stronger after City Solicitor George Nilson was fired by Mayor Rawlings-Blake in August.

Nilson’s removal ostensibly stemmed from the law department’s hiring of a former Nilson colleague who was found to have ties to a neo-Nazi group. The revelation reportedly embarrassed the mayor.

Nilson later told The Brew that one of the reasons he was under attack was because he refused to scuttle the Mullen investigation or fire Pearre, whose office is under the purview of the law department.

“On two separate occasions, Rob Pearre told me he was getting a very unusual amount of pushback from the second floor [the mayor’s office] over his investigation of Mr. Mullen,” Nilson said in an interview.

With Nilson out of the way, Pearre said he was told by Morton to stand down on the Mullen probe. This time she confronted him with what he called an “administrative nitpick” regarding leave time by an employee. (A year earlier, Pearre had been found not guilty of an assault charge by his estranged wife, which he said was fully disclosed to the mayor’s office and Nilson.)

Pearre said he reluctantly agreed to resign rather than be fired. Following his departure and Morton’s meeting with the OIG staff, Pearre said the atmosphere in the office changed.

“The instructions to those who remained was just to work low-level, worker-bee cases. Nothing controversial,” he said.

In short order, Pearre’s second in command, Kevin J. Carson, resigned. Agent Lindsay Rausch was told that her employment was terminated. Two other agents subsequently left.

Even though the investigation of Mullen was stopped, he abruptly resigned in February 2017 after he reportedly lost the confidence of incoming Mayor Pugh.

Mullen was replaced by Evette Munro, who was asked to leave last July. The city’s latest chief information officer – the fifth in five years – is  Frank Johnson, a former Intel sales executive.

OIG-Assisted Indictment

In late October, the OIG posted its first known investigative assist in more than 18 months with the arrest of a mid-level Department of Transportation supervisor.

Daryl C. Wade was charged with seeking cash bribes in return for erasing street-cut fines against two city contractors.

In a press release, the U.S. attorney’s office thanked the OIG and its acting head, Stephen Lesniewski, for helping the investigation.

The Pugh administration is reported to be nearing the selection of a new inspector general. However, according to Pearre, the office will never be effective without a major overhaul in the way it is structured.

The key element, he said, is to make the IG independent of the mayor rather than as an “at will” employee subject to immediate dismissal.

The current arrangement, he said, runs counter to the “best practices” established by the Association of Inspectors General and instituted by more than 100 IG offices on federal, state and local levels.

“It’s time for Baltimore City government to join the mainstream,” Pearre declared.
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PART 2:

• Strengthening Baltimore’s anti-corruption watchdog won’t be easy.