Top Pentagon research arm Darpa gave a well-connected firm millions of dollars to build bomb-detectors — despite deep internal reservations about the technology involved. After years of work and millions spent, the company’s sensor was less effective than “a coin flip” in spotting homemade explosives, in the words of one military insider.Dogs still work better than anything else, FYI.
By itself, the washout wouldn’t be terribly remarkable. Darpa’s charter is to try out risky technologies, many of which don’t pan out. It’s that dedication to high-risk, high-reward projects that leads to breakthroughs like GPS and the internet. But these contracts were given to RedX Defense, a company partially owned by outgoing Darpa director Regina Dugan and led by Dugan’s family. Agency bosses were repeatedly told that investing in RedX was a waste of time — and moved ahead with the contracts anyway. The bottom line, says a second source familiar with RedX’s work: “The technology just didn’t work.”
Then, in July of 2009, Dugan was named the director of Darpa. Her father, Vince, became RedX’s CEO. Her sister, Christina Haney, worked as vice president of marketing. Some Darpa employees assumed Dugan would sell her shares in RedX, since the firm continued to pursue contracts from an agency now headed by its co-founder and former chief executive. Dugan didn’t sell those shares, however. Nor did she forgive the $250,000 loan she gave to RedX.
Dugan did officially recuse herself from any business dealings between the agency and the company. An internal Pentagon review later found that the recusal was “consistent with the letter and spirit of relevant laws, regulations, and policies governing conflict of interest,” according to Lt. Col. Melinda Morgan, a Pentagon spokesperson. But the move wasn’t consistent with Darpa’s recent history. Under previous director Tony Tether, contracts that posed a potential conflict of interest were passed to someone higher up in the Pentagon hierarchy, who would theoretically be immune to pressure from subordinates. Instead, Dugan left the decisions about RedX to her employees — people acutely aware of their new boss’s background and her family ties to RedX.
A few weeks after Dugan assumed command of the agency, her family firm submitted a proposal to fund MAE WEST for $3.5 million. The proposal ignited a firestorm within the agency, one source familiar with the inspector general’s investigation says. Not only was the company tied to the new director, there were glaring gaps in the proposal — everything from the schedule of experiments to the scientific approach involved. Nevertheless, this source contends, agency deputy director Ken Gabriel told employees to put the RedX proposal at the “top of the list.”
“No other program had this kind of pressure,” the source adds. “Or even this much interest.”
The revolving door is spinning awfully fast.