.... _, ... ,: , .. .; ... ";. :,.:,." .... ; ...

}" .

DEPARTMENT OF THE NAVY

HEADQUARTERS

NAVAL CRIMINAL INVESTIGATIVE SERVICE 716 SICARD STREET SE SUITE 2000 WASHINGTON NAVY YARD DC 20388-5380

5720 F07-0028 SEROOLJF/SU1411

AUG 1 8 2008

Mr. Kyle Kajihiro

American Friends Service Committee Hawaii Area Program

2426 O'ahu Avenue

Honolulu, HI 96822

Dear Mr. Kajihiro:

The processing of your request for information has been completed. All releasable information is provided at enclosure (1), along with an explanation of exemptions taken under 5 U.S.C.

§ 552(b)(2), (b)(6), (b)(7)(C) and (b)(7)(D).

As the official responsible for the partial denial of your request, I am advising you of your right to appeal this determination. Your appeal must be postmarked within 60 calendar days from the date of this letter. An appeal should be addressed to the Secretary of the Navy's designee: Office of the Judge Advocate General, (Code 14), 1322 Patterson Avenue, S.E., Suite 3000, Washington Navy Yard, D.C. 20374-5066. The envelope and letter should bear the annotation "FOrA Appeal."

While processing your request we located documents proprietary to the following Commands and agencies:

Commanding Officer

Naval Air Systems Command 47090 Liljencrantz Road Bldg 435, Suite 6

Patuxent River, MD 20670-1550

Commander

Office of Naval Research Code IDOL

Ballston Towers # 1

800 N. Quincy Street Arlington, VA 22217

Inspector General Department of Defense

5720 F07-0028

400 Army Navy Drive Arlington, VA 22202-4704

Naval Inspector General

Bldg 200, Room 100

901 M. Street, S.E. Washington, D.C. 20374-5006

Executive Office for U.S. Attorneys 600 E Street

Room 7300

Washington, D.C. 20530

Financial Crimes Enforcement Network OOM-FOIA

P.O. Box 39

Vienna, VA 22183-0039

Because we do not have the authority to release information other than our own, we have referred those documents for processing and direct response to you.

Fees have been assessed with your request. The file consists of 1,936 pages of which 473 have been referred to other entities leaving a balance of 1,463 pages. The first 100 pages have been processed free and a copying charge of 15 cents per page for the remaining 1,363 for a total of $204.45. Please make your check payable to the United States Treasury citing FOIA number F07-0028 and mail to this office.

JCf~

J~'E~H P. CEGUO L T, JAGC, USN

Enc1:

(l) Documents

EXPLANATION OF EXEMPTIONS

FREEDOM OF INFORMATION ACT (5 U.S.C. §5S2):

(b)(I) (b)(2) (b)(J) (b)(4)

(b)(5)

(b)(6) (b)(7)

-~-----.---

protects from disclosure national security information concerning the national defense or foreign policy;

related solely to internal personnel rules and practices, the release of which would allow circumvention of a statute or rule;

specifically exempt from disclosure by statute;

trade secrets and commercial or financial information obtained from a private source which would cause substantial competitive harm to the source; pre-decisional opinions and recommendations. inter-agency or intra-agency memoranda or letters that show foreseeable harm if released. Also. attorneyclient privilege and attorney-work product are covered;

personnel and medical information. the release of which would result in a clearly unwarranted invasion of personal privacy;

investigatory records or information compiled for law enforcement purposes, which (A) could reasonably be expected to interfere with enforcement proceedings, (B) would deprive a person ofa right to a fair trial or an impartial adjudication,-{4CQuld-reasenably-be-expecrectf()constrtute an unwarranted invasion of personal privacy, (D) could reasonably be expected to disclose the identity of a confidential source. (E) would disclose investigative techniques. andlor (F) could reasonably be expected to endanger the life or physical safety of an individual .

-~_-_---- .. -.-

. ~ _ffiIYACY ACT (5_ U.S.~552aR- __ ~ _

(b)

. 0)(2)

(k)(l) (k)(5)

(k)(6)

.----_--_-_-~--_-_-.----_-_

applies to information concerning other individuals which may not be released without their written consent;

(A) applies to jnformation compiled for the purpose of identifying individual criminal offenders and alleged offenders and consisting only of identifying data, (B) information compiled for the purpose ofa criminal investigation, including reports of informants and investigators. and associated with an identifiable individual. or (e), reports identifiable to an individual compiled at any stage of the process of enforcement of the criminal laws;

applies to information and material properly classified pursuant to an Executive Order in the interest of national defense or foreign policy;

applies to investigatory material compiled solely for the purpose of determining suitability. eligibility. or qualifications for Federal, civilian employment. or access to classified information, release of which would disclose a confidential source; and

testing or examination material used to determine individual qualifications for appointment or promotion in Federal Government service, the release of which would compromise the testing or examination process,

//::231f/91nIMfI';;>;;J. "1:-' 't ,I - '''1\ .

6103rt/d-,/L/f .~;)~ (_,~

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (CLOSED)

18APR06

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/C

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/OOO19
MADE AT/HIHN/NCISFO PEARL HARBOR HI PECIAL AGENT
REFERENCE(S)
(A) NCISFO washington DC ROI (INTERIM)/190ct02 (Contains Exhibits
1-57)
(B) NCISFO washington DC ROI (INTERIM)/21JulO3 (Contains Exhibit
58)
(C) NCISFO Washington:' DC ROI (INTERIM)/07Jan04 (Contains Exhibits
I
59-61)
(D) NCISFO Washington DC ROI {INTERIM)/24Mar04 (Contains Exhibits
62-66)
(E) NCISFO Washington DC ROI (INTERIM)/17JulO4 (Contains Exhibits
67-70)
(F) NCISFO Washington DC ROI (INTERIM)/19Aug04 (Contains Exhibits
71-72)
(G) NCISFO Washington DC ROI (INTERIM)/200ct04 (Contains Exhibits
73-81)
(H) NCISFO Washington DC ROI (INTERIM)/17Dec04 (Contains Exhibits
82-89)
(I) NCISFO Washington DC ROI (INTERIM)/14Feb05 (Contains Exhibits
90-100)
(J) NCISFO Washington DC ROI (INTERIM)/11May05 (Contains Exhibits
101-104) (K) NCISFO HaWaii-Pearl Harbor HI (INT'ERIM) /OlAug05 (Contains

Exhibits 105-106)

(L) NCISFO Hawaii-Pearl Harbor HI (INTERIM)/060ct05 1M) NCISFO Hawaii-Pearl Harbor HI (INTERIM)/09Jan06

(N) NCISFO Hawaii-Pearl Harbor HI (INTERIM)/09Mar06 (Contains Exhibits 107-109)

(0) NCISFO Hawaii-Pearl Harbor HI CASE FILE: I/University Affiliated Research Center at University of Hawaii, Honolulu, HI/Suspected Contract Fraud Prior to Award/CCN: 30NOV05-HIHN-0351-4XNA

EXHIBIT(S)

(110) IA: Results of Interview oftl .......... 22Mar06 ••• (Copy all)

(111) IA: Receipt of DCAA Calculations/21Apr06 ••• (Copy all)

EXECUTIVE SUMMARY

1. This investigation was initiated based upon a Navy Inspector General (NAVINSGEN) inquiry for suspected adultery and travel issues

WARNING IHISPOCUMENIISIHEPROPgRD'Of1H£tJAY&'CBlMlNAL!NI£ESJJQA!JYESEIWICi CONI'ENTS MAY. BE DISCLOSED 0Hl Y TO PSlSICI* NiOSI!: OFfICIAL DUnES REQUlRIJ AI';CQII HalIITO. COHI'ENTS MAY NOT If Dl8CLOftD TO TIll; PARTY(I) COHCE1tNUIWITHOUT SI'ECIFIO AUTHORIlATlON FROM nil! NAVIL CII-'1NIIE8l'IOA11III! SEIMCS.

~'UVI.'IV~-iJ'-n~-u~v '-,:!:UI.'I,n1 \...

SUBJ: S/RESEARCH COR{' ~ ... J±ON OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

r .~

~ ,_.J.I (RCUH)

involving Final

outcome of the IG inquiry did not establish sufficient evidence to support allegations, however, new findings revealed alleged conflict of interest and an NCIS investigation ensued. The suspected conflict

of interest involved nd GS-15 NAVAIRSYSCOM, Office

of Naval Research (ONR). and planned to benefit

from their NAVAIRSYSCOM affiliation by orchestrating the award of a

proposed contract, N00421-02-D-3151, to a company and

.......... were developing, Pacific Research Institute (PRI), also referred to as PROJECT KAlE'E'. Although PRI and PROJECT KAIE'E' were discussed in existing terma in documents obtained, and had an issued contract number, they were, in reCil,it;y, _cP~_«;:!!!Rt_lHll_9Dl,_y ~n_d !;It_ill under planninq-andresearch phase. (PRI/PROJECT KArE'E' role would be an RCUH affiliated company and would "broker" technical research contracts between the Navy and local Hawaii businesses.) Individuals researching PRI/PROJECT KAIE'E', were technical personnel hired by

S/RCUH at the direction of The

researchers were paid by two u.s. Navy grants funded with

congressional money for which had control and oversight.

2. Regarding evidence of conflict of interest by it was

discovered that 'S/RCUH made a very brief announcement for the "Director of PRI." The announcement was posted only minutes on a

S/RCUH job board and was tailored to ualifications •

......... directed Navy Grant employees to favorably review ......... application and he was ultimately offered the position by

Although had a known personal relationship with and

apparent involvement in the endeavor to establish PRI/PROJECT

RAIE'E', never responded or accepted the offer of employment

and therefore appears to have avoided any conflict of interest or other cri~nal violations. The investigation subsequently focused on ...... and her actions during her role as a Government Contracting Official, misuse of her position, conversion of government funds and conflict of interest.

3. Subsequent to the submission of Reference (A), the investigation sought to uncover suspected false claim issues concerning three (3)

S/RCUH staff personnel hired at the direction of .. ::::::~.:::::~~

directed to hire , civilian.

civilian, and civilian. All were hired as technical

representatives to the grants at salaries exceeding $100,000.00 per

annum. also directed the hire of for

administrative duties at $42,000.00 annual salary. Allegations are that all three (3) S/RCUH personnel hired as technical experts on the

grants were, at direction, primarily or exclusively

engaged in proposal research for PROJECT RAIE'E. S/RCUH records show that labor costs for the three (3) personnel were charged against two (2) U.S. Navy grants. The two affected grants were the UHF

Electronically Scanned Array (UESA) program, ..

Principal Investigator (PI) (UH Professor) and The Theatre Ballistic

Missile Defense (TBMO), PI, UH Professor. Both grants

are congressionally funded programs managed by No bid and

proposal (8 & P) labor charges were noted in the S/RCUH records for

FOR OIijllltL USE ONLY Page 2

WARNINO

THIS QOCUMENI IS ll!E Psoeemy OF me NAVAl CB!M!tW. IN\I!iSJ!GAWE SElMCE COHTIMlIIMY II D!SClOSllU ON. Y TO PERSONS VIIt!O$I! 0fI'1CW. DUTlh RIiQUIRi! AOCESI

HEUI'O. ~ w.y tm' II! DI8Ct.08I!O TO lHI PNITY(S) IXItICEIUI!D lMIHOU1' SPECIfIC ..,

AIJTIiORZ\'I1ClH FIIOI.II'IHI! .... VAL Cll-.IfJUl1IMTIW IlElMCI!. <..,..

L; It.., U1'f V '" - UL:WR. - U.j U 1-'H.:iN.A./ t:

SUBJ: S/RESEARCH CORP:/ .AON OF THE UNIVERSITY OF (,,211 (RCUH)

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

these personnel. Further, records show that through the University of Hawaii (UH), S/RCUH submitted claims for payment of labor and related travel costs for these three (3) 'personnel, as direct costs to the two (2) u.s. Navy grants. Numerous interviews have been conducted of pertinent parties to the investigation who confirm that

......... was, or appeared to be, spearheading the PROJECT KAIE'EI program and directing the grant employees to perform at her direction,. vice on the grant from which they were paid. Interviews were reported out via References (8) - (N).

4. The investigation was transferred from Washington DC where it was declined for prosecution due to venue c0!1.s,i,.g~ . .r; a ti9nll and transferred· -t(f'Hawdl~Biiefirigs'were provided to AUSA Michael SEABRIGHT, Former Chief Criminal Prosecutor and AUSA Harry YEE, Chief Civil Prosecution, District of Hawaii, who requested additional tasking. Said tasking included an audit of S/RCUH employment and pay records by the Defense Criminal Audit Agency (DCAA) (following the delivery of an IG subpoena for relevant records) to determine actual monetary damage to the government. The investigation focused on the directed

hiring of nd by at S/RCUH and

the use of U.S. Navy Grant money to pay their salaries for work related to PROJECT KAIE'E vice the actual grants. Interviews of key grant program personnel have been conducted since case transfer and have corroborated suspicion that the employees who were directed

hires of were not performing grant related work and that

......... used the grant funding to pay the employees for their work on PROJECT KAlE'E'. PROJECT KAIE'EI would ultimately result in

personal financial gain for herself, and a possible cadre of

individuals with whom aligned herself.

5. On 20Feb06, Reporting Agent met with and briefed newly assigned Chief Criminal Assistant United States Attorney (AUSA) Ron JOHNSON of the details of this investigation. Additional investigative measures were discussed and were conducted. Investigative tasking included the acquisition of an updated personnel status of ........ ~

retirement and rank findings on and review of seized

computer media documentation (recovered by SA case

control agent prior to his retirement). Additionally, computer CDs were turned over by GS-lS, Science and Technology ..... NAVAlRSYSCOM, which contained data that confirms

in preparing a contract proposal (PROJECT RAIE'E') for a contractor (PRI) in violation of government ethics and

U.S.C. codes. Review of emails further disclosed motives

and actions.

6. After lengthy discussions and reviews with RA, AUSA JOHNSON, and members of the Naval Acquisitions Integrity Office (NAlO), JOHNSON indicated that, due in part by the fact that contract number N00421- 02-D-1351 (PROJECT KAIEIEI) was withdrawn prior to the final funding

and no proceeds were paid to or other partiCipating parties,

the U.S. Attorney's office declined criminal prosecution. However, the efforts to establish PRI, statements of work and definitions within the PROJECT KAIEIE proposal, along with evidence found in

FOR 0li' ..rUSE ONLY Page 3

WARNING

THIS DOCUMENT I§ 1ltE pROpERty OflHE NAVAL CR!M!NM. 'N'IES!JGADVE SERVICE CONIIM'S PMYII! DllCt.OSED a&YTO PERIIOHI 'IIItI06I! 0I'FlCIM. DUTlU R!OUItl:ACCE88

HS!;8TO. CONT!NIV Mo\YNCIT IID!1C1.oeeD T01HII! PARTY(SlOOHC!llNf:OWIlHOUI" 8I'EClfIC .3 AIJtlIOR!ZAT1ONFROIoI1HII! ~VALCRIMIMI. fNUTIGo\nw:~

24JUN02-DCWA-0307-4GNA/C

SUBJ: S/RESEARCH COR{"~;l-J;JN OF THE UNIVERSITY OF {··~/h.l (RCUH)

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

emails, strongly suggest that the impending University Affiliated Research Center being proposed at UH, 1s directly related to the

efforts and illegal activities by' Reference (0) is

monitoring and documenting activities and persons involved in the UARC and AUSA JOHNSON has expressed an interest in close oversight of the program.

NARRATIVE

1. This case is a reactive investigation resulting from disclosures revealed via Reference (A). Possible suspected violations included 31 USC, Section 3729 (Civil False Claims Act), 18 usc 666 (Theft Concerning Programa Receiving_ Fecle:t:d Funds) I 1_8V5<::S~c;;t_.j.9g._ ~Q1J (Acts Affecting a Personal Financial Interest) and 1001 (False Statements).

2. Subsequent to submission of Reference (N),

civilian, was interviewed concerning her knowledge of activities by ......... while she worked for her on the UESA Navy Grant at Pacific

Missile Range Facility, Kauai, Hawaii. disclosed that

........ ~ along with UESA Program Manager and

others were involved in preparing the PROJECT KAIE'E' proposal using Navy Grant resources. Exhibit (110) refers.

3. DCAA audit results were received and reflect in excess of $600,000.00 of government funds were lost due totl ......... mismanagement and directing the hire of four RCUH employees, paid by the grant, but perfoDned little or no grant related work. Exhibit (111) refers.

4. On 19Apr06, AUSA JOHNSON provided a declination for prosecution for this investigation. AUSAJOHNSON specifically cited that there was insufficient evidence to sustain criminal charges to prove beyond a reasonable doubt. He added, however, that there are clear irregularities as to how grant proceeds were handled. This case is being referred to NAIO to seek administrative action against~"";II"1l via the Human Resources Office (HRO). A collection of relevant documents, exhibits, statements, interviews and all related materials will be compiled and forwarded to NAIO to assist in their legal and administrative efforts.

5. This investigation is closed.

DISTRIBUTION NCISHQ: 0023A

INFO: DCWA/0024AJAUSA RON JOHNSON, U.S. ATTORNEYS OFFICE, HONOLULU, HI (M)~

Naval A~d Integrity Office (M)V ATTN: .._.._.

720 Kennon Street SE, Bldg 36, Room 214 Washington Navy Yard, DC 20374

commander, Office

FOR OF~USE ONLY Page 4

t/ of Naval Research (M)

WARNING

nus !lOCUMENT IS ruE P8OPE8TY OF TH!i: NAVAL CRIMINA!. JNlIESlJGM!VE SERVICIi CCH1'SfTS1M'I'BE DISCLOSIDa&YTO PE118ONIJ~ 0fF1CW. DIITlI!S "EaUIIEACCEIIS HEIm'O. CONl'EfmI PM,( NOT II! 0I8Cl0S!D TO TIl! PNITY(8) OOHCSINIII WIlHOUl' 6f'I!CffIC 4 AUnIOIIIZATION 'lION '!HI! NAYM. CR-. tNESTICIIITM! SIlMCI!.

/

I

24JUN02-DCWA-0307-4GNA/C

SUBJ: S/RESEARCH COR~~·$.I.:..1 OF THE UNIVERSITY OF ('I.

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

.....

_) (RCUH)

Office of the Inspector General ATTN:

800 North Quincy Street AIlington, VA 22217-5660

V Cormnander, Naval Air Systems Command (M)

Office of the Inspector General

AIR-OOG1

47123 Buse Road

Patuxent River, MD 20634

V Inspector General, Department of Defense (M) Deputy Assistant Inspector General Investigative Policy and Oversight

Attn: SA ••••••

400 Army Navy Drive, Suite 1037 Arlington, VA 22202-4704

FORa~EONLY

Page '--;;8;'" V2 LNY

WARNING

!HIS DOCUMENT IS ruE PROPE!DY OF D-IE NAyAI.. CR!MINN..IfiV£SJ!GATJIIE SERVICE COffl1M'SIMY III! DlSC1.OSaI CNLYTO PERlIOHIWIOIEOI'PICW. DVIlEl RlGUIIIE AOCII8 HBlITO. CONleItSIMYNaT IN! D!8Q.OSB) TO"M! PNnY(1I) COHCEItNlD WI1HOUT SPS;IFIC AUIl4ORIVifIOH FROM TIt! NA\I~ CllIoWW. HtlUTJQA.TNE SElMCE.

I 1/:JlIIt/.23tf/IiI'*P' ..:prsb ('~ .)

. 11.5S'IOLI( S/S-/u6 .,,:1

61. u.s. NAVAL CRIMINAL iNVESTIGATIVE SERVICE

INVESTIGATIVE ACTION

2IAPR06

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

RECEIPT OF DCAA CALCULATIONS

1. On 23Mar06, Reporting Agent received results of a Defense Criminal Auditing Agency (DCAA) audit and review of ReUa employment

al1_4 ~i~_c:;~!.~~s~~ ufpl:four ~l~Y~E!~ ._h~r.ed_ at th.euDlre.ct!QIl()f" n uu L

The review reflects a loss to the government of $602,197.35 in labor, fringe and other costs due to the employment of

civilian, ciyilian, civilian

and civilian. Details are reflected in Enclosure

(AI.

ENCLOSURE(S)

(A) DCAA Audit and Review Results/Undated

REPORTED BY: PECIAL AGENT

OFFICE: NCISFO PEARL HARBOR, HI

FORQijI Page 1

LAST

WARNING

1HIS pQCUMeIT IS TH!i pROfIERTY Of JHE NAVAL CRlMlNAlIN'iESDGAIIVi SERVICE (g cotmHT8l11AV IE DlSCl.OS!D ON.Y TO PERIONI WHOIEomcw. DUnU REQUIREICCESS

HEIm'O. CONTENTS IllAY NCIT III: Dl8Ct.OSI!O TO 1111 PMJV(II) IXINCERNI!D WIMlUfIlPl!CIFIC

AIITIiOftlZA1lON FIt(JIjI 1111 _ ..... c;R-.w. MII8lIQIITn/E SEIMCe. ""

EXHIBIT ( PI

Work Order
Period 6/01 to 9/02 657764 657538 Total
Direct Labor - $54,893.42 $8,217.84 $63,111.26
Direct Labor - 39,921.12 39,921.12
Direct Labor - 111,031.25 111,031.25
Direct Labor 82,348.36 82.348.36
Fringe 43,350.46 21.825.75 65,176.21
Other Direct Costs 52,830.21 52,830.21
.Applied _BlJI"den ____ _ 109,635.60 39,224.79 148,860.39
Total 6/01 to 9/02 411,662.06 15t6i6.74 56j~218.80 Period 6/01 to 11/03
Direct Labor - $54,893.42 $8,217.84 $63,111.26
Direct Labor - 42,495.99 42,495.99
Direct Labor - 116,623.00 116,623.00
Direct Labor - 99,604.11 99,604.11
Fringe 43,911.08 24,602.11 68,513.19
Other Direct Costs 52,830.21 52,830.21
Applied Burden 112,803.59 46,216.00 159,019.59
Total 423,557.29 178,640.06 602,197.35
b-.c 1/:J'In/.:J..;Yf /Wlt( I' 3;).955 .. , 60S/.J 7'1:;'/1£ Sli/(Jb ()

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

INVESTIGATIVE ACTION

22MAR06

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

RESULTS OF INTERVIEW OF

1. On 21Mar06, civilian, was interviewed by

Reporting Aqent at the Hilton Hawaiian Village Hotel, Oahu, Hawaii. Rl!!pcu·.tt.Itg_Ag~nt. identifh.d. henel! by .ciisplaylng.NCr.5 _ credentials • ........ Ii,was interviewed concerning her knowledge of activities

involving and other persons involved in preparing an

ONR/NAVSEA contract proposal referred to as PRI/project Kaie'e'.

2. advised that she is an employee of NAVSEA Crane, IN,

stationed at the Pacific Missile Range Facility (PMRF), Kauai, HI. As background, 'U related that she had been living in Virginia working for LOGICON Northrup Grumman when she applied for a government position with NSWC Crane. NSWC Crane asked if she be interested in a position in Kauai and she stated she would willing to consider it and the next day was flown to Hawaii.

with at PMRF. interviewed~~::::~ain~d~

was on the phone participating in the interview.

related to that would make the final hiring decision •

......... stated she did not know much about the positio~ initially, but learned that the job was to support one of the efforts had oversight on, but was not given any additional detail. She was asked

about her background and experience. eturned to the

mai,nland, was offered the pOSition and moved to Kauai on 310ctOl. There was a eost estimate and task statement prepared for her job, which defined two assignments, M2C2 and UESA program support.

1I ....... explained that funding for her position came from ONR via

NAVAlR. She stated that congressional funding at disposal

came from ONR but was shifted to NAVAIR's control and overseen by

would be

She met

3. irst effort was the M2C2 program. was

assigned as her Technical Designated Agent (TDA) for the program. At

the time of his hire he worked and was paid with the RCUH grant funds

'UESA}. stated that she has no idea what actually

did as she hardly ever saw him. She stated that she asked

about him and where he was and what he was doing and seemed to

have gotten upset about and had the UESA

Principal Investigator (PI), remove him from program and

move him to grant (TBMD), which had run out of money.

let go. dentified another employee,

for cdordinated the M2C2

meetings. She now works for SolypSls. stated that in

regard to roductivity on her program, she estimates she

got about 5% of the results she expected from a TDA. She stated that

£ .Ma~lY assigned to her for a month or two. stated

FOR OIill'AL USE ONLY WARNING

Page 1 1HIS!JOCUMENT IS DjE f'8OPE!UY ()f 1HI NAVAL CRlMNAlIN'iESJ'JOATWE SGRVISai CONTENI'S IlAY HIJjSCl.08li£J OM.Y TO PElIIONS VIttOSE omcw. ounn RIQUIM ~ t';t HEftETO, CONI!NI'SIIA'i NOT III DIICI.08III TOne PMT'i(1) COHCEIIHID wmtOUT IIPICII'1C C1' N.IIHOIIIZIITIOHfROMlHIN,WM.CR_Hmn<IoIt1'lVES!IMC EXHIBIT (, '0)

4:: 4 oJU!'IUZ-Ul,;WA-U':sU 1-4GNA/'1' _

SUBJ: S/RESEARCH COR'- .A±~ON OF THE UNIVERSITY OF {

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

'*rfl

. 'iii

~';i.fI ( RCUH)

she was left with no technical lead. She identified other employees

present at the program as~~~~~~:[[:~~~~::~~~an~d~;7:;~;;;~

:::::::~WhO had come out from Crane~ and and &

who were working for NAVAIR at the time. was

there working as a secretary to advised that

........ was an MIT/Lincoln Labs (MITLL) employee assigned as an IPA

to the UESA project. His assignment was ending and managed to

keep him on using ONR funding. Basically, he remained an MITLL

employee, but was paid by ONR. stated that both ~===~

and ere bad, but she felt that manipulated

in as much as she did him, and both had their separate agendas. However,they-were-both invoLvedlnpreparing-theProjectc Kaie'e proposal.

4. identified other personnel that she suspected was

setting up for some benefit from Project Kaie'e, in many cases probably post government work. I could only speculate based

on her observations, but identified NAVAIR F16 Office

Manager, boyfriend) , •••

who was going to be the Technical Director. She offered that there was some kind of deal also made with .......

~hal: nd however, eventually fell out of favor

w~""'" also suspects that has made deals with

.. ~~ .. ~ .. ltand perhaps has some arrangement with a

staffer from Senator INOUYE's office. dvised that

was hi xed to support M2C2 under the UESA, but he had NO experience or

skills and she did not know what legitimate work he actually

performed. She stated he is now working for company,

HAWAlYA Technologies. She indicated that HAWAIYA has some work under

RCUH and knows that was recently in the RCUH offices.

5. In reference to project Kaie'e', provided the following infomation: had made "promises" to many people with regards to the successful establishment and award of Project Kaie'e'. When asked what she considered a definition of Project Kaie'e', ......... stated she believed it was an umbrella contract doing science and technology products.

;

6. related an event at the Radisson in Kauai, an M2C2

review which was taking place. .. and ..

left the review session and went up to a room to finalize the Project Kaie'et proposal. She stated that ........ typed the final Project Kaiete' proposal.

Additional information that provided about was

•• S planned on becoming an SES by the time she was 40 via her

UESA success. tactic was to promise people money for their

programs, but it they refused to do things she asked~ they would fall

"out of favor" and would cut them off via phone calls to

NA~R. She tried to get rid of Solypsis and eventually they were cut off. She also wanted to cut off Northrup Grumman, because they

balked at requests made my that didn't make sense.

continual~y chan the direction of her programs and eventually,

FOR OFF SE ONLY WARNING

~ .. ,..,. 2 WIS pocuMEN[ IS IijE f>ROPERJY OF Mj NAVN, CB!M!NAL IN'IESll!WMi saMCi

r~ • ._ COHTINT8W.V 81 DISa.OIED~y TOPElIIICtiI'MIOI8OFf1C1M.IJIITIU ~ IICCEII

..... 110. OClfmNI'aaMV NaT UIIIICI.08ID TO lHIJWI1Y(I) COHC_ WI1HOUt II'EafIC (II AlIJHOtIIIlA1ICIH'~'IHI~~C1!MtN.INIIU1ICM1MSEIMC& r

~4uUl'lU~-U\.,.;WA-U.jU I-~t.:r~~:-·J· -,

SUBJ: S/RESEARCH COR~ ATION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

( J

t-., .IA:.t I ( RCUH)

nothing was ever accomplished. There were a lot of "backroom"

meetings and although doesn't have any first-hand knowledge

of many events, there were obvious conflict of interest issues .

........ lbelieves made promises to one specific company,

Pacific Technologies (PTAC), who was the prime contractor for M2C2, but they had no core experience, so they sub-contracted to Raytheon. PTAC is now a primary contractor in the proposed University Affiliated Research Center (UARC) program at the University of Hawaii. PTAC performs the same functions as has been planned for the proposed Project Kaie'e'. often tried to coerce nto performing contracting actions that bordered on illegal or violated

policy. & \lade statements of how long-she had been in--

acquisitions and she could do things the way she wanted ••••••

would relate to that she couldn't recall how to perform

certain actions and would find someone else to perform the

action.

8. In late 2002, she was asked if she wanted to be the UESA program

manager. didn't want the job, but she did it anyway. She

attempted to get a full understanding of how things were set up. There was a lot of information missing including clearance gUides for the program which resulted in DSS inquiries and computer drives being erased. Each item that had been neglected prior to ••••••

assuming the PM position, would take no accountability, and

she and ould blam or things that happened prior

to her assuming the position •

••••• stated she was laid off in March 2003. ~r ••••• believes it was a result of a comment she had made to another PMRF

employee. The laying off illustrates and •••• ~t

retaliatory and dontrolling nature. The PMRE"s employees wife had' a PR business who had been promised work by and They requested the owner of the PR business to do a lot of taskings, but failed to award her. any work and she was becoming: frustrat'ed. The PMRF employee indicated these events to who advised that

...... and will never follow through, nothing would come of

it and his wife should just steer clear. The PR owner lived across

the street from and advised him of statement.

That was on a Tuesday and by Friday she was told to leave the office •

........ lPdvised that had been hired as her TDA in late

r02 and was treated horribly by The last week they were

employed, eld a meeting to discuss the UESA E2C antenna.

tI .... ~was complaining about why things weren't getting done and called a "government caucus" where the government employees broke off into another meeting in Building 96i at PMRF. The meeting was

_. _ ~nd _ They were told that ••••

was taking over the program and told ' and to take

leave the next day. stated she did not want to take leave,

but was told to do so anyway. 4Pit her job and didn't

return. On Monday morning called his Monday morning ,

meeting. They began to verbally attack • 2 • He told ~ ••• to

call her management at Crane and initially couldn't reach

them but when she did, she was advised by her management at NSWC

FOR of.lllllllla. USE ONLY Page 3

9.

WARNING

THS QOCUMENT IS DIE PRQPERTY OflHE NAVAL CBlMINAl..ItMSJ!OAl'NE SER\1CE CONrINB MIIY ... DIICI.OeIO ONLY TO PEIUIDNIIr'IttOa omc:w. DUT1U ItECUtftE ACCEa

ltfP

24JUN02-DCWA-0307-4GNA/T ~

SUBJ: S/RESEARCH CORP( ~TION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

l.' .A~ (ReUH)

Crane "they want you gone today." came into ••••••

office and asked if she had talked to her'management and she said she had. His response was "Well, I guess you understand."

stated that she began to pack her office. was helping her.

She broke for lunch but when she returned, . was agitated and

hostile and told her she had 15 minutes to finish packing and get out. The same day she was told to shut down her computer and she could take nothing with her, including personal computer files. Her government email had already been shut down. After leaving she recalled a few things she had forgotten from her office and also had

to return a hard drive from her home to She called and

- - - - made - arrangements to go to the office at-0900the foUowing-day.· On her way, she stopped at a coffee shop where she ran into , another UES~OCEANIT employee, who informed her that the UESA workers had been told "something was going down at 0900 and clean out."

......... realized they were talking about her return to the office.

She stopped at Pass and lD at PMRF and phoned another PMRF employee, .-..... and asked him if he would go to her office for her because

she could not understand what the concern was. While . was on his

way to meet her at Pass and lD, a call came over the base police

radio, "Searching for on base.n was stunned

and informed base personnel that she was standing right in front of them. At that time, a fax came into Pass and lD from the UESA office identifying the names of people who no longer had base access •

........ ~advised it was ludicrous as she was still a government

employee. The names on the list includedtl .

and all people who had fallen out of favor with

When returned with her things, he advised that ..........

se police in the building. asked what the big deal was.

____ told "that he didn't know what would do and .

........ said, "I just don't know what to believe anymore." .

was shaken and upset by the events. Within two weeks she was offered a new position at PMRF. offered that with whom she was once personal friends, will no longer have any association with her.

10. Regarding stated that he was naIve

about government contracting and just did what he was asked to do.

tI ........ ~worked on UESA and stated that when he was in the

office, he worked on UESA, but was aware that he was doing Project Kaie'e' proposal development from home. She was aware that .......

would go to his horne and work with him. was very

frustrated by and would call nd make comments like,

~is at it again" ... tasking him to do things not in his statement of wotk.

11.

only involvement in Project Kaie'e' was when she was ..... to evaluate it and was also told to do it

12. advised she had numerous documents she has saved from

her employment at UESA and will make them available for review.

FORM? saE bArrONlY Page 4

WARNING

THIS QOCUMENT IS JtE PROPERJy Qf THE HAm CBMtW, ItNESJ1!WIYi SE!MC& c:oHYBn'8MAY" Dl8Cl.08!D ClHLY TO ....... _0F1lCW. DUlIBlIIICIUIItI!~

HeRI'ItI, COHTItmI MAY NC7T .. Dlla.0IID TO". PMlYISl ~WIIMOUf ~ 1.4. ~llONfllOMltE_CRMW.INIIU'T1Qo\1M1IIMCI. t"I'

348066 15: 34 2006041.0 IN:r ,)IL #26130 OUT:CIS #70r- jy

REPORT OF INVESTIGATION (ACTION) GENERAL PROCUREMENT (II)

14MAR06 CONTROL: 24JUN02-DCWA-0307-4GNA/T

;,".

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

.

MADE AT/24D5/PCD PEARL HARBOR HI. __ •••• REFERENCE(S)

(AlNCISFO HAWAII ROI (ACTION)!13FEB06 (B) 2405 ROI (ACTION)/03MAR06

EXHIBIT(S)

(1) IA: RESULTS OF FILB EXTRACTIONS FROM SUBMITTED DIGITAL STORAGE MEDIA/14MAR06 ... (HIHN. ONLY)

SPECIAL AGENT

NARRATIVE

1. In compliance with the tasking provided to 2405 (Hawaii) by reference (A), digital storage media consisting of seized media and digital forensic images previously created, were processed for the presence of e-mail. Identified e-mail, consisting of OUTLOOK '.PST' files were extracted, converted to text for easy review, and copied to external removable media for review by case control agent. All evidence for which search authority could be determined was successfully processed. Exhibit (1) provides details.

2. Lead tasking at 2405 (Hawaii) is complete.

DISTRIBUTION

NCISHQ: 2405/2404/240 INFO: HIlIN

ONLY

V2 LNY

...

'- .. ~

~ ;J

v ........ ': ;j

, "

r:

322155 15:58 20060317 IN:SSDEMAIL #19980 OUT:HIHNEXLIFE #11167

INVESTIGATIVE ACTION 14MAR06

CONTROL: 24JUN02-DCWA-0307-4GNA/T S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/

HONOLULU, HI

RESULTS OF MAIL FILE EXTRACTIONS FROM SUBMITTED DIGITAL STORAGE MEDIA

This lead was accomplished in compliance with the request of~II".

Special Agent, NCISFO Hawaii, to process previously seized digital storage media and extract all e-mail files for case agent review. Provided for processing were HIHN evidence log # 092-05; DCWA Evidence Log #'s 177-02; 179-02 and 197-02. All submitted items, with the exception of HIHN log # 092-05, was successfully processed, the Microsoft OUTLOOK '.pst' files, extracted and converted into a text format to facilitate case agent review of the contents. Approximately 20,000 e-mails were recovered and placed on a DVD-R and a CD-R. These disks were provided to case agent separately by reporting agent on 14Mar06.

The items under HIHN # 092-05 were not processed due to the lack of identifiable search authorization for the items. The remaining, items were government property and with an appropriate DOD Warning Banner provided.

processed Media

DCWA Log # 177-02

14 CD-R'a containing the "Encase Ver. 3.21a" forensic image of a Dell Latitude computer Hard Disk Drive SiN HU-031YMK-47710-139-S0A9. Contained no ". pst tI or other mail fi les .

DCWA Log # 179-02

One (1) MAXTOR hard disk drive SiN W40KY6DA, contained over 18,000 email files that reporting agent converted to text and copied to a DVD-R.

DCWA Log # 197-02

One (1) computer CD marked July & Auguat02 Archive, which contained f1.pst" files for that time frame. The files were converted to text format and copied to a mini-CO-R.

pending the establishment of search authority for the items contained' in HIHN log # 092-05, this lead is complete.

REPORTED BY: Special Agent

OFFICE: Pacific Cyber Division-Hawaii, Pearl Harbor, HI

V2 LNY

EXHIBIT (I )

//';;31t/~'It// ~Q.j II.. 1 (

G07r.;J6~fkZ Jj90/oJ '

us, NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (ACTION)

20HAR06

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII {RCUH)I HONOLULU, HI

MADE AT/HIHN/NCISFO PEARL HARBOR HlJi •••••• SPECIAL AGENT

NARRATIVE

1. Investigation involves possible cost mdscharging, conflict of interest, and conversion of government funds. is suspected of using her Office of Naval Research Program Management and Funding Oversight responsibilities and position for personal gain.

directed the hiring of three individuals to work on Navy Grants being administered by S/RCUH. The grant money used to pay the individuals including benefits, pay and travel, exceeds $600,000.00. During the course of employment of the three individuals, ReUH in concert with

attempted to develop a concept company, referred to as Pacific Research Institute (PRI" also known as "Project Kaie'e'." Project'Kaie'e' was meant to provide long-ter.m research and development support for future ONR and other Navy/DOD progr~. ~legations include information that the three direct hire employees on the Navy Grants were in fact not working on the Navy grant projeQts, but on the Project Kaie'e' proposal as directed by

Inve,tigat10n has substantiat~d that Project Kaie'e'.

intended Director was identified as •••••••••••••

tI"lI~and had a substantiated personal relationship at the

time and are now married. Although the proposal was accepted by ONR with the intent to award, it was withdrawn by RCUH just prior to the approval and release of congressional funding.

2. Numerous individuals implicated in conspiring to develop Project Kaie'e' are now employed with a spin-off corporation, PITCHR (Pacific International Center for High Technology Research). It is anticipated that PITCHR will be awarded a Cooperative Agreement allowing th~ administrative oversight and management in projects and contracts awarded under the anticipated University affiliated Research corporation (UARC) currently under negotiation between ONR

and the University of Hawaii. has developed his own company

named HAWAIYA TECHNOLOGIES LtC which articulates a similar purpose of Research and Development in similar fielda as those outlined in the UARC Statement of Work. It is unknown at this time if HAWAlYA is affiliated with any government related contracting.

ACTION

R.0023A: Execute a DD350 for •••• company identifying any

go~ or other Navy related contracting or

FOR OF~E ONLY WARNING

Pan. 1 ~IlI!8-...DOCUMENT !SUJnc-..;PROPERJY;wa:~,t.;QFw:r;;...ID£.IlIi,INAm.uVAlllo.!l!lCflMtW.t:IIIIIII_!NVE81JQllUliiWlIKiA.u:l1VEPOJiISERIiDJIYICIF_ 16

_ CCINI1Nh PllAY II! Dl8Cl.oeaJ ott. YTOPeftIlONlWHOllOfl'lCW. DU'Ilft III!C1U1111 1oCCI.

IDEIV... COHI'8n1J ~Y NOr Ie Dl8Cl.OIID TO 1M! PAln'YiI) COHC2lINI!lI WI'MltIf IPICI'IC I

NTHOIIIZA1IIIH '** lHIltI,\W. Cl'1PMtIL "",~TIYI RINICa. I 4

~4.JUNU~-DCWA-UJU·I-4GN~T) ,.~. ,f,

SUBJ: S/RESEARCH CO!.. _<A'l':lON OF THE UNIVERSITY at.. ~~.WKJt

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(RCUH)

sub-contracting.

DISTRIBUTION NCISHQ: 0023A ACTION: 0023A

INFO: DCWA

WARNING

THIS gro!M§NI IS DjE !>RQei8IY OF mE NAVA!.. CftIMWALIfiYSSTlCWIYE SEftY!CE CONI1!HJ'I til« Be DIIICt.OIIll ON. Y 1'0 P1116IONIII1MIOIE OFPICIAL wnu ftEQIMIl MlCUI ~. COHI!NTSIIAY NOT Hi IlIa.OeID ro1HlrPMtY('l CClNCIRIewmtClt1f SI'8;IfJO

NIIHOfItUmCN'lIOM lHIi NAVAL CR_1MIITIMI1'n! SIfMCI.

\41

369543 10: 37 20060502 nr-

~IL #31786 OUT:CIS #lrrr. ~

REPORT OF INVESTIGATION (ACTION) GENERAL PROCUREMENT (I I)

02MAY06 CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RBSRARCH CORPORATION OF THB UNIVERSITY OF HAWAII (RCUH)/

COMMAND/NAVAIRSYSCOM/00019

MADE AT/0023/NCISHQ WASHINGTON DC/I •••• " INVEST ASST

REFERENCB (S)

(A) Pearl Harbor, HI ROI (INTBRIM)/20MAR06

EXHIBIT(S)

(1) IA: Results of D0350 Queries/06APR06 •.. (Copy HIHN only)

NARRATIVE

1. In response to Reference (A), Exhibit (1) is provided. Lead tasking is complete.

DISTRIB'QTION NeISHQ: 23A INFO: HIHN

FOR OFFljI 8!I'ONLY

PAGB 1 LAST V2 LNY

NNNN

369547 10: 39 20060502 nf!L·f""'(_~IL #31789 OUT:CIS #lrr:;.Af .}

\_. __ • ".L-"

INVESTIGATIVE ACTION o 2 MAYO 6

CONTROL: 24JUN02-DCWA-0307-4GNA/T S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/

HONOLULU, HI

RESULTS OF DD350 QUERIES

Enclosure(s}

(A) DD350 Report/06APR06

-.1 .. Results of .the DD350_queries on 06APRO_6_4j._f:lCJ,9f3~g_.Gq:v:~n:tm~:t:J.t_._ Contracts, Enclosure (A) provides the·details.

REPORTED BY: INVESTIGATIVE ASSISTANT

OFFICB: NCISHQ WASHINGTON, DC

FOR OF. 2£ raE ONLY

PAGE 1 LAST V2 LNY

NNNN

EXHIBIT ( t )

1/:)3/f/4iIJ/JrlJl/ ~036f ( .•.. -, 6tJ793/5'}"JO 3~1t6

us, NAVA(~CRIMINAL INVESTIGATIVE SERVICE

( )

c

REPORT OF INVESTIGATION (CHANGE)

20MAR06

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)I HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

.. - -- - - -" -.-

----- --MAbifAT/irI:fiN/NC-ISro PFARL HARBOR HI/i ••••• SPECIAL AGENT

REFERENCE(S)

(A) NCISro Washington DC ROI {CHANGE)/lOFeb05

NARRATIVE

1. Since submission of Reference (A), as been confirmed as

a primary suspect in this investigation and added to title line.

ACTION

DIST: Annotate addition of ato title line.

DISTRIBUTION NCISHQ~ 0023A

INFO: DCWA/24A

l8

WARNING

DII QQCUMENr ISH P8OfeRD' OfDENAyA!, CBMW.ItMiSIKVi'N,E SiIMCI ~",(II! DIICL08III _'(10 PEfIeOHIWIOIII 0I'fl0II0l DUIIIS RIlQUlt!ACCU$ HEQI'O.CONYEMa""YNOr.Dl8lCl.OIBIlOlHIPMn'{I)CONCI!IIHfOWI11«XIfSI'ECII'IC

.wntDIIIZA11ON I'*:IMM ..... v ..... ClllMHll.INIo'UIIC¥o1M! AIIIIIO&

6~:'1;;f;1) ~/:;: (.. ) (' z]

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (INTERIM) 09MAR06

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0301-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NA~RSYSCOM/00019

MADE AT/HIHN/NCISFO PEARL HARBOR HI'__ SPECIAL AGENT REFERENCE(S)

(A) NCISro Washington DC ROI (INTERIM)/190ct02 (Contains Exhibits I-57) (8) NCISro Washington DC ROt (INTERIM)/2lJul03 58, (C, NCISFO Washington DC ROI (INTERIM)/01Jan04 59-61) (D) NCISFO Washington DC ROI (INTERIM)/24Mar04 . 62-66) (E) NCISFO Washington DC RoI (INTERIM,/17Jul04 . 67-70) (F) NCISro Washington DC ROI (INTERIM)/19Aug04 71-72) (G) NCISFO Washington DC ROI (INTERIM)/200ct04 73-81) (H) NCISro washington DC ROI (INTER!)I) /17Dec04

92-89) .

(I) NCtsro Washington DC ROI (INTE~IM)/14Feb05 90-100) (J) NCISro Washington DC ROI (INTERIM)/llMayOS 101-104) (K) NCISFO HaWaii-Pearl Harbor HI (INTERIM)/OlAug05 (Contains Exhibits 105-106)

(L) NCISro Hawaii-Pearl Harbor HI (INTERIM)/060ct05 (M) NCISFO Hawaii-Pearl Harbor HI (INTERIM)/09Jan06

(Contains Exhibit
(Contains Exhibits
(Contains Exhibits
(Contains Exhibits
(Contains Exhibits
(Contains Exhibits
(Contains Exhibits
(Contains Exhibits bTC
(Contains Exhibits EXHIBIT(S)

(107) IA: Telephonic Contact wi ••• (Copy

all/Less IG DOD)

(lOS) IA: Review of U.S. Navy Official Military Personnel File/23Feb06 ••• (Copy all/Less IG DOD)

(109) lA: Results of Review of official Personnel Folder for ..... ••• SFeb06 ••• (Copy all/Less IG DOD)

EXECUTIVE SUMMARY

1. This investigation was initiated based upon a Navy Inspector General (NAVINSGEN) inquiry for suspected adultery and travel issues

invol yin Findings

from that investigation resulted in possible conflict of interest

matters involving and GS-lS civilian,

NAVAIRSYSCOM, Office of Naval Research (ONR). and •••

planned to benefit from their NAVAlRSYSCOM affiliation by

FOR Page 1

ONLY

WARNING

1HS DOCUMENT ISH PROPERD'OfnE NAVAL CRJMNN. !NYfS1ICW1Vi &mYJCIl:

COHYIHI'S MIIoY IlEIIIICUlIID CN.Y 10 PIIIIIOtIfMlO$l! 0I'F1CW.0UJ1Q IlEQUIIIII! ACCI!I:I HlIlEtO. f;OfTINI'I MAY NOr II! taCLOIID TO.". PAlm'(I) 0CINCEItNeD Wffl¥JUI' lIPICIFlO ~ I'ItCU 1'HI ""~ c-.w.liYD7'IGoIomll! 1IIMtIf.

<:: 4uU.NV~ -OCWA-OJ 07 -4GN~/"" ~ ----11

SUBJ: S/RESEARCH col JRA1rroN OF THE UNIVERSITY oJ +Awi~I (RCUff) U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

orch$stratinq the award of a proposed contract (N00421-02-0-3151)

(also referred to as PROJECT KAlE'E') to a company and .......

were developing (Pacific Research Institute (PRI». Research for the proposed contract was being conducted by personnel of S/RCUH who were being funded by non-related. U.s. Navy grants which were administered by and who had fiduciary oversight ot the grant monie,. Ultimately, proposed contract # 02-0-3151 was not awarded. The investigation did not develop evidence of a criminal violation by

WI concerning contract # 02-0-3151 or conflict of interest

issues, Reference (A) details.

2.· Subsequent to ·the submission· of Reference (Ar, the inves·tigation continued with a focus on possible false claim issues concerning three (3) S/RCUH staff personnel hired at the direction of1llllllt ...... dire~ted S/RCUH Executive Director Harold MATSUMOTO to implement the hiring of and",

All were hired at salaries exceeding $lOO,O~ per annum. ~legations are that all three (3) S/RCUH personnel were involved in proposal research and s~mdssions for proposed contract award # 02-D-3151 (PROJECT KAIE'E). However, S/RCUH records show that labor for the three (3) personnel were charged against two (2) U.S. Navy grants. No bid and proposal (B , P) labor charges were noted in the S/RCUH records for these personnel, Reference (a), Exhibit (58), Enclosures #12, #16, and #19 pertain. Further, records show that through the University of Hawaii (UH), S/RCUH submitted claims for payment of labor and related travel costs for these three (3) personnel, as direct costs to the two (2) U.S. Navy grants, Reference (8), Exhibit (58), Enclosure (20) pertains. Numerous interviews have been conducted of pertinent partie, to the· investigation and reported out via Reference, (8) - (I), including contact with the u.s. Attorneyrs Office, District of Hawaii, Honolulu, HI. The case was transferred from Washington DC to Hawaii for prosecutorial oversight and action.

3. Additional information is being compiled at the request of AUSA Michael SEABRIGHT, Former Chief Criminal Prosecutor and AUSA Harry YEE, Chief Civil Prosecution. Said tasking includes an audit of S/RCUH employment records by the Defense CriDdnal Audit Agency (DCAA) to determine actual monetary damage to the government. This

investigation currently focuses on the directed hire of ..

1I ...... ~nd by t S/RCUH and the use of U.S. Navy

Grant money to pay their salaries for work related to PROJECT KAIE'E vice the actual grants. Interviews of key grant program personnel have been conducted since case transfer and have corroborated

suspicion that the employees who were directed hires of were

not performdng grant related work. Reference (J) contains results of those interviews. Since the submission of Reference CJ) two (2) government employees with knowledge of the actual grant work performed were interviewed at their current assignments at the . Expeditious Warfare Systems Division, Naval Surface Warfare Center

(NSWC), Crane, IN. civilian, provided corroborative

details reqardinq to prepare a Broad Agency

Announcement (,..' for the Project KAIE'E while as being

FOR Our at USE ONLY PlIfJ8 2

WARNING

rutS QOCUMEHT 18 uti P8QPSl1Y Qf lllENAVAL, C8!MIf0!. INVfSJI!JAl1Y£ SER'J!C!i COHTI!HI1I .... Y. DI8CI.OSIII ON.Y TO PP8ONIWHOIII ~ IIIJYIU IUIQUIJtI" ACCUI 0 HIlmO. C4ltf1ItfI'I IIIoY NOr III DllCL08IO TO 1HI PAIIn'(., CONOEIIN!D WJIHOUI' II"I!Cft: "2.

24JUNUl-DCWA-U.1UJ-qe:;NA/',L'

SUBJ: S/RESEARCH CO( JRA'J.clN OF THE UNIVERSITY O{-.AWA.:J~

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(RCUH)

paid to work as a technical adviser to the UHr Electronically Scanned

Array (UESA)' grant. FJ provided detailed insight into the

questionable working relationships between ......

........... l and others, alluding to issues of

"conflict of interest" regarding PROJECT KAIE'E. Additionally, ....... ..... civilian, was interviewed at NSWC and provided limited information concerning his recollection of activities during his temporary assignment at Pacific Missile Range Facility, Kaual, HI. Reference (K) provides detail.

4. On 20Feb06, Reporting Agent met with and briefed newly assigned ·Chief Criminal Aasistant Unitedc States Attorney (AU SA.) Ron JOHNSO:N of the details of this investigation. Additional investigative measures were discussed and are being conduct~d. Currently investigative measures include collection of an updated personnel status of .......

retirement and rank findings on and review of seized

computer media utilizing the NCIS Cyber Division in an effort to obtain crime specific email discussions. Additionally, computer CDs

have been turned over by GS-15, Science and

Technology NA~IRSYSCOM, which contain data that

confirms involvement in preparing a contract proposal

(PROJECT KAlE'E') for a contractor (PRI) in violation of Government ethics and U.S.C. codes.

NARRATIVE

1. This case is a reactive investigation resulting from disclosures revealed via Reference (A). Possible suspected violations include 31 USC, Sect~on 3729 (Civ!l False Claims Act), 18 USC 666 (Theft Concerning Programs Receiving Federal Funds), 18 usc Section 208 (Acts Affecting a Penona! Financial Interest) and 1001 (False Statements' may also apply.

2. Currently, the investigation continues pending results of the audit being conducted by D~. Contact has been affected with Ron JOHNSON, Assistant United States Attorney (AUSA) and successor to Michael SEABRIGHT, former assigned AUSA. JOHNSON has been provided a thorough briefing to date and he has provided additional quidance in determining critical information to be collected.

3. , civilian, Science and TechnologytlllllllL__....

NAVAIRSYSCOM contacted reporting agent on 30Jan~6. ........... torwarded mirrored computer CDs which _ discovered in the pockets of the binder which contained the PROJECT KAlE'E' proposal

formerly submitted by RCUH. advised that

that CD'a file properties reflected proposal pages and documents,

which had been prepared or modified by __ and others •

........ advised the proposal's Stateme~Work (SOW) reflected h!mself as the author, but assured he did not author the document that appeared to be a revision of a fo~er legitimate sow he had prepared for a prior contract. His work appeared to have been used in order to prepare the SOW for PROJECT KAIE'E'. Exhibit (lO?) provides amplifying details.

FOR~USEONLY Page 3

WARNING

D1IIX!CUMENT IS DC PRCftRTYQf lHE NAVN" C8!MNL INYESDO/il1VE BI!i8'!IICi COImIII'IMilY UO!IClOIID My TO PEfllIOMI~ OFJIII)W.IIU'IIU REQUftI!ACICia

HE!III'O. 00N1'RCI'8 w.Y M1f III 0I8CI.0IIm TO ntllWm'ISl ~ WIHOtIT' 4I'I!Qf'IC (

AIJIHORIZA'IION fROM .... "O' ... C1IMNAL IWII1'IGA1MI SIIMC!. Z

24JUN02-DCWA-030'1-4GNA/'l' .. ,

SUBJ: S/RESEARCH coL JRATlN OF THE UNIVERSITY OI',.AWA~

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(RCUH)

4. In addition, an effort to determine actual rank at time of separation was researched. was discharged at the rank of

.... however was transferred to the retired list in the

grade of Sxhibit (108) refers. Additionally, an ,

effort was made to determine current employment status with

ONR. ' currently remains a paid ONR employee assigned TAD to

the University of Hawaii obtaining her Ph.D, Exhibit (109) pertains.

5. Additional tasking includes review of seized media review transferred from NCISRA Washington DC. Specifically, NCISRA Cyber Division is preparing media for review and email findings which discuss PROJECT KAIEIE' proposal preparations.

6. Investigation continues.

PART I CI PANT (S )

NCISRA Washington DC NCISRA Memphis, TN

DISTRIBUTION NCISHQ: 0023

INFO,: DCWAIAUSA Ron JOHNSON, U.S. ATTORNEYS OFFICE, HONOLULU, HI (H)../

CCOMMANDER, OFFICE OF NAVAL RESEARCH (M)~ OFFICE OF THE INSPECTOR GENERAL

ATTN:

800 NORTH QUINCY STREET ARLINGTON, VA 22217-5660

COMMANDER, NAVAL AIR SYSTEMS COMMAND (M) 0/ OFFICE OF THE INSPEctOR GENERAL

AIR-OOGl

47123 BUSE ROAD

b--=t-c

PATUXENT RIVER, NO 20634

INSrECTOR GENERAL, DEPARTMENT OF DEFENSE (M)' DEPUTY ASSISTANT INSPECTOR GENERAL INVESTIGATIVE POLICY AND OVERSIGHT

ATTN: SA .

400 ARMY NAVY DRIVE, SUITE 1037 ARLINGTON, v.A 22202-4704

WARNING

JlI8!lOCUt§fl' IS D1E PBOf'ER! t OflHE NAVAL CB!M!fW, IN\!ESJJQADYi 8ERVJCE CON1'I!NYII tMtIlIlIISCI.O!8I at. Y1'O PI!II«IHa""""" omcw. DUnn RI!QUIIt!! ACCIIS HIIIrto. CONT8fI8""Y NOT. ~ TOlNI PM1Y(1II DCHCIIINIDwm«M' IPIiCII'JC

...mIOftIZA11OH fItCU 1HI! ~VH. c:tIMW. MEII1'IQIITM: IIR\'IC& Z2-

/ /;8t?//J/It// I 6 b 1/ -- r : -' /j fA "<0 .

bCUI ;:;.:l/1 /Il~ J;iy/b6 ( ! J

U.S. NAVAL C~iNIiNAL INVESTIGATIVE SERVICE

1 ~/

INVESTIGATIVE ACTION 31JAN06

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII/ HONOLULU, HI

TELEPHONIC CONTACT WITH ..

1. On 30Jan05, telephonic contact was effected between Reporting

Agent an~o~m:s~!~:~i7_:~~:=y~~~~~~l_~:~u~ell~ __ ~ver,

...... ~~lSt detailed and documented interview by NelS was on . 09Aug02. Since that time, has gained additional information

concerning conflict of interest matters involving GS-

15, NAVAIR ••••••••

2. Specifically, recently discovered two identical CD Roms

located in the pocket of a loose-leaf hinder. The binder contained the Project Kaie'e proposal that had been submitted to his office in

or around Jan02. explained that the CD Roms in the pocket

had been overlooked, primarily because 1IIIIIIII referred only to the

hard copy of the proposal. related that he pulled the CD

Ro~ to view their content and found them to contain all the proposal dodUments. However, when he cbecked further on the properties for

, the documents, he found evidence that had

created/edited/modified or saved several documents relating to the proposal, clearly indicating that as a government employee,tI ...... was involved in preparing contractor proposals. made two copies of the. CDs and forwarded them along with a statement of his

findings. elated that he witnessed his name as the creator

of Statements of Work (SOW) in the proposal. related that

he did not author those SOW's but opined they were pulled from

another cOl'!t:raet file in which had access. She then used them

as a template for editing and use in the Project Kaie'el proposal •

............ statement (letter and findings) and printed copies from the CD files are appended as Enclosure (A).

3. In an effort to clearly·establish details surrounding the Project

Kaie'e proposal, confirmed that the proposal was officially

submitted by RCUH circa Jan02. had had numerous

conversations with prior to the submission, but it was always unclear as to what she was trying to accomplish. Upon review of the submitted proposal, it was evident that there were portions that were ~ell received, and other portions that became issues, such as the

employment of and s administrators of

tbe contract. still, it was the intent of NAVAIR to award the contract to RCUH with selected changes and deletions to the proposal (including sub-contractor use). Additionally. becauee the contract would be in excess of $5,000.000.00, it would require congress

notification and approval. During the following months, additional

information was becoming available, but was still uncertain

as to motives and was not being provided truthful

WARNING

DfIS QOC\JM!iNI IS mE paapem Of THE NAVAL CBlM!rjAl.If:!\IEStlOAlMi SEIMCE CONnINf8 MAY III! 0ICL0ft'D OM.YTO PEllIIOIM:MIC)R OfftCW. DUflUI'lEaUN! ACCUI 2 '2 HERITO. CONTIHTII MAY Nctr. tll$l:LOS;$ 1'0 lHIlWITY{t) CONCElINI!O 'MI'HOUT Sf'eCft'IC :::>

~MNFIIOMlHI_CRr.wLIff4S"f1OMTM!fI!RIIICE. E)(H I P-; IT (16 7) ':VI",J!I:lIT I \

l4JUNU4::-Ut,;WA-U.:W {-4l:iNA/'l'

SUSJ: S/RESEARCH CO( ,J~l"iON OF THE UNIVERSITY OJ' . .A~AJ.'~ U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

information regarding activities occurring on the Navy Grants, or at

PMRF in Kauai. As more information came in, questioned

....... further, but continued to try to find legal avenues for pursuing what she so19 as a positive research program. During mid-

Apr02, learned that the Project Kaie'e proposal ~ent out

with a Broad Agency Announcement (BAA) effectively soliciting subcontractors to bid, or provide their own proposals, to be awarded on

the impending contract (Project Kaie'e). informed .......

that under no circumstances could a contractor put out a BAA on

behalf of the government. advised the BAA was released

"inadvertently" and could not be recalled. She further added that the BAA announced an ~~ndustry Day" in Kauai th~ following month •

......... told her she needed to cancel it. related that she

not only failed to cancel it, but also was a speaker at the Industry Day event. ~ a result, 47 proposals were received from Hawaii contractors for work under the Project Kaie'e' BAA. NAVAIR

instructed that she had to return all the proposals to the

submitters and inform them that there would be no work.

4. elated that the contract was scheduled for final award

in Aug02, however 2 days prior, RCUH .........

11 withdrew the proposal. stated he was in Kona,

Hawaii at the time and received a phone call from the contracting officer at NA~R who told him of the withdrawal and asked that he

contact Due to a Hawaiian ho1iday~ was \:);}~

unavailable, however, the following Monday, received a phone ~

call from RCUH ABst to confi~ed

withdrawal of the proposal. It was speculated that because .........

............. bad been identified as Executive Director for Project Kaie'e, he realized the obvious conflict of interest'and the

potent!al trouble and had pull the proposal.

5. In addition to the foregoing~ clarified the following=

The original NAVAIR BAA N0042l-01-R-0176 is an umbrella-type ~ soliciting for various scientific research and technology qrants or contract proposals. Specifically, the grant is calling for sensor integration and sensor communications concepts. There were th!rteen (13) awards provided under this BAA and included the TSMD Grant proposal submitted by Professor and awarded in JulOl. The TBMD grant number was identified as N00421-01-1-0176, differing in only one character from the original NAVAIR BAA. The Project Kaie'e' proposal was submitted under the NAVAXR BAA Ol-R-0176 as well •

6.

...... II~elated he would continue to be available for additional

i~vestiqative support.

ENCLOSURE{S)

(A) • .femo and Related Documents/20Jan06

REPORTED BY: SPECIAL AGENT

OFFICE: NCISFO PEARL HARBOR

V2LNN

WARNING

Jl:!!8 oocuMENrJ8D1! P8OP£RTY Of ItIj NAVAL CRlMM!NyI!81'I!WM! SE!MCI! 00HTEHT8 MAY II! DlICLOIID ONLY TO P!II8OtII VIttOII 0fl'1CW. DUn .. !!!ClIMB ACCIA

tEIIe1'O, COfmNhI MAY NOT II! DlCl.08ID TO 1M!! PIoIIT'(S> COMCeIINED WITHDUI' 8f'I!ICI'lC ? J , N.IIMOIIlUotlON FRCIM ntI! HIWAL ~ IM1I1IQATll/llII!IMC8, '--"1.

NAVAL CRIMINAL INVESTIGATIVE SERVICE

DELETED PAGE INFORMATION SHEET

withheld entirely at this location. One or more of the following explain this

decision: .

___ Deleted under exemption(s) _

/

Documents originated with other government agency(ies). Referred for review and direct response to you.

___ Pages contain information furnished by other government agency(ies). We will advise you of releasability ofinfonnation following consultation with agencyties).

-Co.mmerits:-'CO~M~.0( -_ .... "., ".' ."

1'lCUJAA A\K ~p~ C(Qmmevd"

. -' . ~ ... '. '.