Bloomberg News

Ex-U.S. Official Guilty in Conflict Case Tied to Gallup

January 15, 2013

A former U.S. official who’s a defendant in a whistle-blower lawsuit against the Gallup Organization pleaded guilty to using his job overseeing government contracts for personal gain.

Timothy Cannon, 63, formerly the director of the Federal Emergency Management Agency’s human capital division, pleaded guilty today in federal court in Washington to one felony count of conflict of interest.

Cannon expressed an interest in working for a company that was seeking a FEMA contract and “was instrumental” in its procurement of a five-year, $6 million award, Assistant U.S. Attorney David Johnson said in a hearing before U.S. District Judge Amy Berman Jackson.

“We would agree that Mr. Cannon had a role in this contract,” said David Schertler, Cannon’s attorney.

Gallup isn’t named in court records in the criminal case. Prosecutors and the charging document referred to “Company A” which oversaw “the BEST Workforce Initiative,” a FEMA program that according to the agency’s website was managed by Gallup.

On Nov. 18, 2008, according to a court filing, an employee told the chief executive officer of “Company A” in an e-mail, “I talked to Tim today. He asked for a job.”

‘Significant Client’

The CEO responded, according to the charging document, “What about ethics...are we okay with all of that...he is a significant client...am sure you know the rules...gee he seems like a winner to me...I don’t think these guys are as expensive as one might think... and he has a military background[.]”

In December 2008 and January 2009, Cannon requested additional funding for the BEST Workforce Initiative, according to the charging document, writing in a Jan. 6, 2009 e-mail to an employee of the unnamed company, “...[A]h yes, I got another 500k put on the contract. Cool huh?”

William Kruse, Gallup’s in-house counsel, said in an e- mailed statement, “Since these allegations and charges were not against Gallup, there is nothing Gallup can comment in regards to this development.”

Kruse said the “civil case against Gallup was based on the false allegations of a former disgruntled employee. I am confident that there were no illegal actions taken by Gallup staff on government contracts or any other contract for that matter.”

‘Internal Advocate’

In the whistle-blower lawsuit, Gallup is accused of overbilling the U.S. on polling for federal agencies and offering a job to Cannon as it sought additional funding from FEMA. A Gallup executive described Cannon as the company’s “internal advocate” at FEMA, according to the lawsuit brought by Michael Lindley, a former Gallup employee, and joined last year by the Justice Department.

Gallup caused more than $10 million in overpayments by inflating the time required to fulfill contracts for the U.S. Mint, the State Department and other agencies, according to the suit.

Cannon faces a maximum sentence of five years in prison and a fine of $250,000 when he is scheduled to be sentenced on April 9. Prosecutors said in court that they didn’t object to Jackson considering a sentence of zero to six months in prison.

“I don’t hope for any sentence,” Cannon told Jackson.

The criminal case is U.S. v. Cannon, 13-cr-00001, U.S. District Court, District of Columbia (Washington). The civil case is U.S. ex rel. Lindley v. The Gallup Organization, 09-cv- 01985, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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