Former DARPA Chief Violated Pentagon Ethics Rules

The former head of the Pentagon’s research arm violated internal ethics rules when she discussed with Defense officials products sold by the company she founded, while leading the research agency, according to a report from the Defense Department’s inspector general. The report did not address the more serious conflict-of-interest charges leveled at the onetime top Pentagon official.

The Defense Department’s Office of Inspector General concluded that Regina Dugan, the former head of the Defense Advanced Research Projects Agency (DARPA), essentially promoted her former defense contracting company to Pentagon colleagues in violation of the department’s ethics code while leading the agency, according to the report, which was dated April 9, 2013, but not released until Wednesday.

The Pentagon will not pursue any action against Dugan as a result of the report.

“Given that she left government service, we make no recommendation regarding Dr. Dugan,” the report stated.

Dugan worked for DARPA twice, first as a program manager, a position she left in 2000, and then as a director, starting in 2009. In between she founded military contractor RedXDefense. Her lingering ties to the firm were the subject of the IG investigation. She retained stock in RedXDefense even as it won a new DARPA contract under her leadership. The public portion of the IG report doesn’t address that alleged conflict of interest, which it apparently concluded was outside the “scope of this investigation.” Instead, it focused on whether she inappropriately discussed RedX’s products and services in briefings and other communications with her colleagues, and whether those mentions were efforts — perceived or otherwise — to steer business to RedX.

In the heavily redacted report, the IG “substantiated the allegation that Dr. Dugan used her position to endorse a product, service, or enterprise,” a violation of the Defense Department’s ethics directive. The investigators, however, “did not substantiate the other allegations,” the report said.

What the other allegations were is unclear, as all mention of them was blacked out in the report — something Dugan requested, according to the IG. It would stand to reason, however, that those allegations were the alleged conflict of interest inherent in RedX’s winning DARPA business during her tenure.

“Finally, we found Dr. Dugan’s communications as Director, DARPA created potential business opportunities for RedX, which was in a position to deliver an off-the-shelf solution to implement the theory Dr. Dugan promoted,” the report stated. Still, it stressed that its investigators found no evidence that Dugan “specifically requested her audiences consider RedX, that she explicitly discussed RedX products or capabilities with them, or that her communications resulted in new revenue for the company.”

In a November 2012 letter to the IG, Dugan denied the allegations and preliminary IG findings.

“In her response, prepared by her attorney … Dr. Dugan disagreed with our conclusion,” the report stated. “She asserted she requested ethics advice … followed it exactly, and never made an explicit endorsement. Dr. Dugan also asserted that to substantiate the allegation required that we prove both intent and that the audience believed she endorsed RedX.”

While at RedX Dugan created a plan and product for detecting improvised explosive devices (IEDs) — a project that received DARPA funding. When she returned to DARPA she espoused her strategy, developed at RedX and turned into a product, for combating IEDs and briefed other Pentagon officials using some materials from her RedX days. She also periodically “implied” that the RedX product was effective, according to the IG. Those actions were at the heart of the investigation.

Dugan, the agency’s first female leader, left for the private sector in 2012 while the investigation was ongoing. Dugan now works for Google, which did not immediately return a request for comment.

“Dr. Dugan’s departure is not related to an OIG investigation,” Lt. Col. Melinda Morgan, a Pentagon spokeswoman, told Wired magazine when Dugan announced that she was stepping down.