A former top official of the Federal Emergency Management Agency will plead guilty to a felony conflict of interest charge for helping arrange millions of dollars in contracts to the Gallup Organization at the same time he was negotiating a $175,000 job with the polling firm.
A nine-page “criminal information” document filed by federal prosecutors in Washington, D.C., this week charges that Timothy Cannon, 64, who served as the director of FEMA’s “human capital division” between 2007 and 2009, “knowingly and willfully” participated in the award of contracts to Gallup while he was arranging to accept employment with the firm.
Lawyers familiar with the matter say the new case against Cannon is noteworthy because it provides an unusual window into the world of federal contracts – complete with explicit email exchanges among Cannon and Gallup executives, including the firm’s chief executive officer, James Clifton.
“Ah, yes, I got another 500k put on the contract. Cool huh?” Cannon emailed one unidentified Gallup employee on Jan. 6, 2009, just six days before a job interview with the firm in which he discussed salary terms, according to the criminal complaint.
“Tim has had a distinguished career in the military and as a federal employee,” his lawyer, David Schertler, said Thursday. “To get this matter behind him, he’s agreed to plead guilty to one felony count.” He added that his client “has accepted responsibility for his conduct.”
The filing by prosecutors is the latest development in a widening federal probe into Gallup—perhaps the world’s most venerable and best known polling firm -- prompted by a whistleblower lawsuit filed by Michael Lindley, who previously served as its director of client services. The Justice Department last summer joined the lawsuit, accusing Gallup of bilking the government – including routinely inflating bills by tens of millions of dollars for polling for FEMA, the U.S. Mint and the U.S. Passport Agency.
Gallup said in a statement at the time that the charges in the Justice Department civil suit were based “on the false allegations of a former disgruntled employee.”
The criminal complaint against Cannon does not identify Gallup by name, referring only to a “Company A.” But three legal sources familiar with the case, who spoke with NBC News on condition of anonymity, said that the company in question is Gallup and that the CEO quoted in the emails is the polling firm’s top executive, Clifton. In addition, the same conduct outlined in the criminal information has already been publicly described in the amended Justice Department civil suit that identifies both Gallup and Clifton by name.
Asked about the charges, Gallup emailed a statement from William E. Kruse, its vice president for law, stating: “Today’s filing was not against Gallup, but rather DOJ’s allegations against a former FEMA employee. As such, there is nothing Gallup can comment on in regards to this development.”
The complaint alleges that Cannon first had discussions with Gallup officials in 2007 about the firm providing services for a FEMA project called the “BEST Workforce Initiative.” The following summer, Gallup, was awarded the contract – originally valued at about $6 million over five years -- to poll FEMA employees and provide training to FEMA managers.
By then, Cannon had already had multiple discussions with Gallup about a job and his interest had come to the attention of Clifton, the firm’s CEO.
“If (Cannon) gets us a big deal at FEMA… i (sic) think we should hire him … because he will be a ‘client’ hire … which might be good,” the Gallup CEO wrote in an April 25, 2008 email. Later in the same email chain, Clifton asked, “Is the ink dry yet on our deal with fema (sic)?”
Then, on or about Nov. 18, 2008, another Gallup employee wrote in an email to Clifton: “I talked to Tim today. He asked for a job.”
Clifton replied: “What about ethics… are we okay with all of that … he is a significant client … am sure you know 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.” (Cannon served for 15 years in the U.S. Army, retiring in in 2001 as a colonel, according to Schertler, his lawyer.)
The criminal complaint charges that, during a two week period between Jan. 21 and Feb. 3, 2009, Cannon signed five separate forms expanding Gallup’s work with FEMA and giving the firm an additional $1.6 million in business. Gallup then sent Cannon a letter dated Feb. 5 offering him a post as "partner" in its government division. “I am very excited about joining (Gallup) and I look forward to working with you,” he wrote in an email to the firm that same day.
But the job offer quickly ran into problems. Cannon retired from FEMA on Feb. 27, 2009, after signing a form on which he checked the “none” box in response to a question asking if he had any agreement for future employment, according to the complaint. That same day, he asked Gallup to provide him with a new job offer letter dated Feb. 27 — to replace the one he had already received on Feb. 5. Gallup responded by sending him a new letter dated March 2, 2009, it said.
At that point, Gallup executives started to have concerns: In one email exchange detailed in the complaint, a Gallup employee stated he was “getting more red flags about Tim Cannon” and there was speculation among his co-workers at FEMA “that this is improper. They are pretty mad. This may get in the way of future business with FEMA.”
On March 26, 2009, Gallup withdrew the job offer, according to the complaint. In September, CEO Clifton forwarded an email about Cannon to company employees stating: “This is a guy that was our sponsor at FEMA. When he was applying we broke some of the rules of the US Gov on the ‘how’ we do it ... so we had to let him go.”
Michael Isikoff is NBC News' national investigative correspondent.
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