Public broadband agency blasted for bloated costs, conflicts of interest

By Yaël Ossowski | Watchdog.org

A new government agency tasked with creating a public broadband system for first responders with billions of dollars has been roundly criticized for its cost overruns and issues with conflicts of interest.

In a scathing report conducted by the Office of the Inspector General for the U.S. Department Commerce, FirstNet is called to task for its ethical and financial problems.

PUBLIC COMMS: FirstNet was created to deploy a public broadband utility for use by first responders across the country.

FirstNet, an independent authority created by the Middle Class Tax Relief and Job Creation Act of 2012, is charged with ensuring the creation of a nationwide public broadband service for emergency responders, a governmental reaction to the many failures recognized by public officials in response to the 9/11 attacks.

“The findings in this report represent serious systemic issues,” states the OIG, openly questioning exactly how $7 billion allocated to the agency were being spent.

The inspector general’s office found multiple instances of unreported expenses and shady contracts awarded without competition.

This included more than $11 million in contracting costs that included no paperwork, along with millions of dollars worth of duplicated charges resulting from just one contract, according to the report.

Other questionable actions include multiple agency board members with deep connections to contractors in the telecommunications industry failing to report those conflicts of interest or even submit financial disclosure reports as required by law. At least two board members claimed to have not worked a single hour for the agency, but still received payment for their work.

Despite this, claims the inspector general, board members continued making decisions and allocating contracts worth millions of dollars.

In response to the report, the Department of Commerce claimed FirstNet has a “robust ethics program,” but may have committed “administrative errors” as it relates to cost overruns and financial disclosure reports never filed with the government, according to a recent memorandum it issued to the inspector general.

The audit was commissioned after concerns were voiced last year by Paul Fitzgerald, Story County sheriff in Iowa and himself a board member of FirstNet.

“It came as a last resort after months of trying to convince the board that we had a massive problem on our hands,” said Fitzgerald earlier this week. “Something had to be done.”

UNETHICAL: Walden says FirstNet has acted with ‘disregard for laws’.

He joins a bipartisan front of lawmakers who have put the agency’s transparency into question in recent days.

“Unfortunately, the Inspector General’s report confirms what we have suspected and long feared — that FirstNet had been operating without proper processes and with disregard for laws that guard against impropriety,” said U.S. Rep. Greg Walden, R-Oregon, chairman of the House Communications and Technology Subcommittee.

“Questions of ethics threaten the legitimacy of FirstNet’s efforts and ultimately undermine its important mission to build a nationwide public safety broadband network,” he said in a statement.

“The report serves as a note of caution to everyone involved in FirstNet — they must be diligent about following the rules,” said U.S. Sen. John Jay Rockefeller, chairman of the Committee on Commerce, Science and Transportation. “It’s now time to refocus on making FirstNet operational as soon as possible so that first responders nationwide can utilize it in their critical mission of saving lives.”

FirstNet’s response to the audit deflected any claims of financial or ethical mismanagement.

“The report makes a number of recommendations regarding improving guidance and processes around the Department’s ethics program and contracting on behalf of FirstNet,” said FirstNet chairwoman Sue Swenson in a statement on the agency’s website. “We concur with these recommendations, many of which have already been implemented.”