Recipient of Pardon Back in Hot Water

0 Comments | Insight on the News, June 24, 2003 | by Jennifer G. Hickey

Byline: Jennifer G. Hickey, INSIGHT

Recipient of Pardon Back in Hot Water

Some felons just do not learn, or at least that appears to be the case with fraudster A. Glenn Braswell. With assistance from Hugh Rodham, Hillary Rodham Clinton's brother, Braswell received one of the controversial pardons granted in the final days of Bill Clinton's administration. According to news reports, Rodham got a $200,000 payment after Braswell was granted clemency for mail fraud, perjury and tax-evasion convictions involving suspect marketing of health-care products.

Braswell, however, is in the sights of the government once again. On May 27, the Federal Trade Commission (FTC) filed a complaint in a U.S. District Court in California against Braswell individually and against four of the companies that constitute his enterprise. The charges involve allegedly fraudulent claims for numerous dietary supplements marketed under the Gero Vita and Theraceuticals brand names. The California-based Braswell enterprise is one of the largest direct marketers of health-care products, according to the FTC, in a complaint that involves an estimated $800 million in sales since 1998.

The claims of fraud involve marketing of the following products: Lung Support formula (purportedly a cure or treatment for respiratory problems); Antibetic Pancreas Tonic (which the marketer claimed could treat or cure type I and type II diabetes); GH3 and Theraceuticals GH3 Romanian Youth Formula (to reverse or prevent Alzheimer's disease and other forms of dementia); Chitoplex (purported to cause weight loss); and Testrex (a treatment for erectile dysfunction). In addition to charges of fraud, the complaint claims Braswell and his affiliated companies placed allegedly deceptive advertising in supposedly "independent" periodicals, had the products endorsed by supposedly "independent" medical professionals and were given awards by "independent" groups, despite the fact all entities had ties to or were paid by the defendants.

Acquisitions Glitches Still Plague the DoD

Although the OMB foresees a more streamlined contracting process, GAO Comptroller General David Walker noted some potential pitfalls in response to questions from members of the Senate Armed Services Committee. The May 23 correspondence resulted from additional interrogatories posed after the conclusion of a March 19 committee hearing on sourcing and acquisition at the DoD. Addressing the problems particular to DoD, Walker wrote, the department has missed several opportunities "to reduce administrative burdens and enhance its acquisition outcomes," and those failures have contributed to the department's contract management remaining a high-risk area. This was evidenced by a recent GAO study that found nearly $1 trillion unaccounted for from DoD budgeting.

Under Secretary Donald Rumsfeld the DoD has initiated actions to address its acquisitions and inventory glitches. Although the hearing addressed defense-specific issues, a question in the addendum to the hearing record touched on the broader impact of the administration's reforms of OMB Circular A-76 in efforts to maintain an adequate acquisitions workforce. Walker says the OMB recommendations could have a "significant impact on the acquisition workforce in a number of ways and will require additional resources for training and retraining federal employees." In addition, "Civilian agencies, which have not conducted nearly as many public-private competitions as DoD, will face even greater challenges in building the necessary infrastructure to conduct these competitions."

OMB Begins Overhaul of Bidding Process

After two years of negotiations, on May 29 the Office of Management and Budget (OMB) took action against the complicated, laborious and often noncompetitive process of bidding for government contracts by implementing the first major overhaul of the bidding system since 1983. In announcing the initiative, OMB Director Mitch Daniels stressed the role competition should play in saving taxpayer dollars. "It is an established fact that fair competition can save taxpayers an average of 30 percent, whether the work ultimately is done in-house or by outsiders. Whoever wins the competition, we can be confident that taxpayers will," said the departing director.

In 1996, the Clinton administration made modest changes to the OMB Circular A-76, which is the set of policies to assist in determining whether public or private entities will be awarded contracts to undertake government services. The administration also called for an increase in the number of competitors at the Department of Defense (DoD).

However, in instituting more dramatic reforms the OMB has moved to limit the competitive bidding process to a maximum length of one year, whereas the old process could take as long as four years. Furthermore, the OMB's action will eliminate a policy that permitted private contractors to be awarded work without agency consideration of federal-employee competition that is, whether the government could itself do the job best.