Whistleblower case highlights 'climate of fear' at US DFC

A former senior executive from the U.S. International Development Finance Corporation violated several policies related to hiring a former business associate and unauthorized travel and then tried to have the employee who reported the problems fired, the agency’s watchdog reports. Both the DFC Office of Inspector General and the Office of Special Counsel investigated the allegation of whistleblower reprisal and found that the claims of unfair retaliation were substantiated. The investigation also determined that the senior executive “created a hostile work environment” within the department. But the problems go beyond this case, Sudhir Paladugu, interim first vice president of DFC’s collective bargaining unit, or union, told Devex. “The climate of fear and retaliation is unacceptable,” he said, adding that he’s heard from staff that they have a “constant fear over their head that they could be fired without cause that is pernicious and harmful.” Paladugu also reported other issues with officials hiring people they know or exerting undue influence in investment decisions. The agency takes whistleblower rights and protections seriously and supports the investigators looking into claims of retaliation, according to DFC spokesperson Pooja Jhunjhunwala. “While DFC does not comment on individual personnel matters, it is reviewing the OIG’s findings and is working on identifying appropriate actions that can be taken to further reinforce its commitment to whistleblower rights and protections,” she wrote in an email to Devex. The agency prohibits reprisal for whistleblowing activity and “we also recognize that to achieve DFC’s mission with excellence, we must operate in a climate of respect and professionalism, and in an environment that enables managers to take legitimate action to address performance deficiencies,” a DFC official said via email. In this most recent case, OIG found that the former executive violated hiring practices by waiving security requirements to hire a former business associate without an appropriate waiver, and using a third-party contract to hire the associate as a “de facto managerial employee,” OIG found. The executive, who has since left DFC, also regularly met a “close friend” while traveling abroad on government business, creating an “appearance of impropriety,” and worked more than 240 hours while on personal foreign travel without authorization, according to OIG. There were also concerns about a conflict of interest around a proposed investment, though OIG found the official was not formally involved in the deal. “However, despite being recused from the deal, the senior executive appeared to be facilitating the deal behind the scenes, and thus created the appearance of a conflict of interest,” OIG wrote in its latest report to the U.S. Congress. During the investigation, the whistleblower who filed the complaint was given a “failing rating” and placed on administrative leave. The senior executive also proposed firing the whistleblower. The whistleblower was reinstated near the end of the investigation.