We see continuing signs of reinvigorated grant fraud enforcement. The latest submisison involves a long simmering dispute that has resurfaced involving corporate fines that are recovered, allocated and spent by USDOJ. USDOJ grants have been a source of frustration for supporters of the current Administration and some believe that white collar enforcement suffered as perverse incentives encouraged the offsets of criminal cases and terms of imprisonment in favor of large recoveries of fines from corporations (Does anyone from the cartel world recall the furious whispers about this case?). Now there seems to be Trump Administration-led push to shine a media spotlight on USDOJ grants. Typically, this foreshadows official actions:
Last night Former Arkansas Governor Mike Huckabee was on Fox News discussing the issue speaking in bellicose terms. This accompanied various news articles that covered various aspects of the dispute.
Today on Fox News there is a lengthy piece on the subject with sub links:
“It’s clear partisan politics played a role in the illicit actions that were made,” Rep. John Ratcliffe, R-Texas, told Fox News. “The DOJ is the last place this should have occurred.
Findings spearheaded by the House Judiciary Committee point to a process shrouded in secrecy whereby monies were distributed to a labyrinth of nonprofit organizations involved with grass-roots activism.”
To see how far some have delved into this issue, check out this google search. You have to go to less established media sources like this InfoWars article referencing State Department grants to get a sense of where this could lead (some will need to don protective suits–oh what we have to do for risk analysis!). Since there was not as much reporting as there could have been, it is likely this issue could get significant play now. There is also likely to be a convergence effect when problems in one grant tranch from one agency spills over into other grant programs.
This latest resurfacing of this issue by White House allies suggests a trend and it will likely add to calls for a significant realignment of DOJ on the left side of the org chart and also in its mission in terms of how it helps victims. Particularly vulnerable to significant reform are CRS, OJP, COPS, Office of Violence Against Women (grants) (biannual report) and Office of Access to Justice. Obviously, grants and grantees will be a subject of interest as well.
I have referenced a prior DOJ IG 2016 civil case here. Designating an enforcement priority can change whether a case is criminal or civil because criminal investigation assets redeploy and there is often a multiplier effect because the combination of criminal and civil enforcement assets allows for parallel investigations. Overnight, a larger swath of FBI agents start trolling for footholds in grants or procurement areas. Not good. When investigators expand the duration or number of grants reviewed, when they send agents to do coordinated interviews while serving grand jury and inspector general subpoenas and when AUSA’s start calling witnesses before traditional grand jury investigations, things can change fast.