U.S. Anti-Drug Agency Director Allegedly Gave Millionaire Contracts to Former Colleagues

"Sol Prendido" for Borderland Beat

The irregularities detected in the delivery of contracts by direct award are already being investigated by the Office of the Inspector General of the U.S. Department of Justice, after several employees filed complaints.

A federal auditor is investigating whether the U.S. Drug Enforcement Administration, under the leadership of Anne Milgram, improperly awarded millions of dollars in direct award contracts to her former colleagues, people with knowledge of the investigation told The Associated Press.

Among the DEA contracts being investigated by the Justice Department's Office of Inspector General is one for $4.7 million to conduct "strategic planning and communications" to recruit people Milgram met while she was New Jersey attorney general and a New York University law professor - at a cost that far exceeds payments to public officials.

At least a dozen people have benefited from such contracts, including some in Milgram's inner circle and those who handle intelligence, data analysis, community service and public relations - jobs that regularly require special security clearances and are typically performed by the DEA's own 9,000 employees.

Also under investigation is a $1.4 million payment to a Washington law firm for a recent analysis of the DEA's scandalous overseas operations, widely criticized for dismissing cases of agent misconduct and how to prevent them.

DEA Administrator Anne Milgram speaks during a news conference at the Justice Department in Washington, Friday, April 14, 2023.

The analysis was done by Boyd Johnson, former right-hand man to one of Milgram's closest friends, Preet Bharara, when he was the powerful U.S. Attorney for New York. Bharara himself obtained a position in the office, WilmerHale, at the same time the review was being done.

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"Some of these deals seem very swampy," said Scott Amey, an attorney with the nonpartisan group Project on Government Oversight.

Amey points out that rules for federal contracting should be conducted without preferential deals, avoiding even the hint of a conflict of interest. It also prohibits contractors from performing "functions that belong to the government," such as directing federal employees.

"Contracts should never be awarded based on who you know," Amey said.

EXPANDING INVESTIGATION

Details of the expanding investigation, which began several months ago because of employee complaints, came from several people interviewed by the Inspector General's office who shared documents about the contracts on condition of anonymity. If irregularities are confirmed, the Inspector General may recommend anything from administrative sanctions to criminal charges.

U.S. Drug Enforcement Administration Director Anne Milgram speaks during a news conference at the Justice Department, in Washington, Tuesday, Oct. 26, 2021.

The investigation comes at a time when the DEA is facing a series of scandals about misconduct by some agents that have shaken the drug agency. At the same time it has to deal with a fentanyl consumption crisis, which claims more than 100,000 overdose deaths a year and which Milgram called "the most lethal narcotics threat our country has ever faced in its history."

The DEA did not allow Milgram to give an interview or discuss the investigation or specific contracts, and only provided a written institutional statement.

"DEA has acted with urgency to establish a new vision, target global criminal networks responsible for hundreds of thousands of American deaths, raise public awareness about how a single pill can kill, and promote and recruit hundreds of highly talented individuals, both inside and outside the agency," he said. "These changes have been made through an extensive, multi-part process, and we are committed to ensuring that DEA works tirelessly to protect national security and the health of the American people."

Anthony Coley, a former Justice Department spokesman who has known Milgram for 15 years, said the fentanyl crisis requires new ideas and energy, not business as usual.

U.S. Customs and Border Protection agents display fentanyl and methamphetamine seized at the Nogales port of entry during a news conference Jan. 31, 2019, in Nogales, Arizona.

"When employees are unhappy with organizational change, they often find ways to reject or undermine it, even if the underlying allegations are not true," he said. "But that's what inspectors general are for: to decide whether something is good or bad."

MANDATE TO CLEAN HOUSE

With New Jersey's own bluster and heavy-handedness and a statistics-driven approach to tackling the war on drugs, Milgram, 52, arrived at the nation's top narcotics agency two years ago with an instruction to clean house.

However, President Joe Biden's appointee was quick to offend by firing several career officials she considered part of an exclusionary culture that allowed malpractice to flourish. As administrator, she favored mentoring newly hired lawyers and data restriction specialists who work with her in a secluded section of the 12th floor of DEA headquarters, known as "the bubble."

Milgram also made a point of showing zero tolerance for instances of sexual misconduct and racism among staff, warning agents that they could be fired for even a few first-time offenses, a change from previous administrations.

President Joe Biden speaks about the banking system in the Roosevelt Room of the White House, Monday, March 13, 202, in Washington.

One of his first actions was to announce that there would be an external review of the DEA's overseas presence, which spans 69 countries. This followed the arrest of Jose Irizarry, an agent facing a 12-year sentence in federal prison after confessing to laundering money from Colombian drug cartels and stealing millions from seizures and informants to pay for a life of lavish dinners, parties and prostitutes.

"INCREDIBLY VAGUE."

The selection of Milgram to conduct the analysis, however, came as a surprise. One of them, 87-year-old John "Jack" Lawn, is a DEA legend, but his knowledge dates back to his tenure as head of the agency in the 1980s.

When Lawn retired from public service, he was a director of the Century Council, a beverage alcohol industry group, which funded an investigation into drinking practices on college campuses conducted by Milgram's mother, an expert on the subject and Rutgers University academic.

Boyd Johnson, co-author of the study, was a prosecutor in international narcotics cases before becoming a partner at WilmerHale. Both Johnson and Milgram are close to Bharara, who after his dismissal as a prosecutor during Donald Trump's presidency, joined the NYU faculty, along with Milgram, and together they made the legal podcast, "Cafe Insider."

This photo obtained by The Associated Press shows José Irizarry in Cartagena, Colombia, in 2017.

Last year - while conducting analysis of foreign operations - Bharara joined WilmerHale and this year Milgram hired his former NYU research assistant, who worked at the firm, to be his deputy chief of staff.

The bidding rules for the analysis were ignored by the DEA, on the grounds that it was "an unusual and pressing urgency," and that "the threat to the health and safety of the American public from illegal drugs coming from abroad has never been greater."

The DEA also claimed that the analysis would be ready in six months, although it took nearly three times that time.

"It was a total waste of taxpayer money," said Matt Donahue, who was the DEA's head of foreign operations until he clashed with Milgram and was transferred to Colombia, a demotion that forced him to retire.

Donahue claims that neither he nor several DEA veterans overseas were interviewed for the analysis. The report mentioned Irizarry and other scandals only in passing, and relied on much public information and DEA operational manuals.

"It's something that could have been written in three days," he said.

José Irizarry, once a top DEA agent who was sentenced to more than 12 years in federal prison for conspiring to launder money with a Colombian drug cartel, speaks during an interview the night before he is sent to a federal detention center in San Juan, Puerto Rico, Wednesday, Jan. 5, 2022.

Iowa Republican Senator Chuck Grassley, long a voice against government waste and a member of the U.S. Senate Judiciary Committee, criticized WilmerHale's analysis as "incredibly vague." He recently sent Johnson a letter asking for a set of records, background on his relationship with Milgram and to ask whether Milgram or any DEA employee requested corrections to the analysis.

"While the DEA presented this report as 'a comprehensive analysis' of the DEA's foreign operations strategy, the report barely touches on or ignores serious failings at the agency and devotes much of its 49 pages to citing public documents that anyone can consult on a website," Grassley wrote in the letter last week.

Neither Lawn, Johnson, Bharara nor WilmerHale responded to requests for comment on the investigation.

TIES TO NEW JERSEY

Another direct award contract under investigation involves Jose Cordero, a veteran NYPD officer whose ties to Milgram date back to 2007 when she was attorney general and appointed him New Jersey's first statewide director of gangs, guns and violent crime.

Former DEA agent Jose Irizarry arrives in court in Tampa, Florida, on Thursday, November 18, 2021.

Together they reformed the police department in Camden - then under state control due to rampant crime and corruption - drawing on analysis of crime statistics and real-time intelligence data to invest resources as needed. The approach earned them national praise as the homicide rate dropped by nearly half in what was then the most dangerous city in the country.

"We have to change the culture," Milgram said at a 2014 TED conference on the application of statistics in fighting crime. "However, the good news is that we know it works."

Less than three weeks after landing the top DEA post, Milgram assigned Cordero a contract for nearly $400,000 to conduct statistical crime analysis.

Donahue said Cordero's expertise is of less value to the DEA, which processes a myriad of domestic and foreign wiretap and informant intelligence to dismantle cross-border criminal networks.

Cordero did not respond to requests for comment.

"THE CLEARING"

DEA agents in Florida, in a June 13, 2016 file photo.

Several of the hires occurred through "The Clearing," a Washington-based federal contractor that provides outsourcing administrative services to DEA and other federal agencies.

"The Clearing" has billed $4.7 million to DEA for "strategic planning and communications consulting services" over the past two years, accounting for 30 percent of its total federal contracts during that period.

Among those hired through "The Clearing" who are under scrutiny are Lena Hacket, a former Democratic congressional staffer and founder of "Community Solutions," an Indianapolis-based consulting firm that works on public health and criminal justice issues. Milgram described her as his senior partner in a police reform project she founded in Indianapolis in 2020 while a professor at New York University.

Internal records reveal that Hackett frequently briefs federal agents, prepares policy statements and memos for Milgram, in addition to meeting with families affected by the fentanyl crisis. For his services, the DEA budgeted $257 an hour, more than triple the hourly rate earned by the agency's top officials, including the director of community services.

Another person hired through "The Clearing" is Julia Pacetti, a New York publicist who has managed media campaigns for major public figures and writers.

A warehouse probably used in Nuevo Leon as a laboratory for the production of the synthetic drug known as fentanyl.

According to documents, Pacetti's Brooklyn-based firm, JMP/Verdant, charged $11,500 a month plus per diem for writing press releases, handling interview requests and arranging press conferences, work that many consider redundant given that the DEA has a staff of employees who work in public relations.

Several recent DEA press releases - including those announcing fentanyl busts as part of the agency's "One Pill Can Kill" campaign - came not from the DEA's official email account but from "Julia Pacetti-Verdant."

Neither The Clearing, Hackett or Pacetti responded to requests for comment on the matter.

"It's terrible for taxpayers," said Don Fox, former acting director and general counsel of the U.S. Office of Government Ethics. "The perception is very bad."

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