LMI and the Conflict of Interest Clause

Multiple sources confirm that LMI’s Marlise Streitmatter is actively involved in the culture study of USMMA commissioned by DOT. In our  post “The LMI Scandal Unfolds,” we described Streitmatter’s obvious conflict of interest due to her former position as Deputy Chief of Staff to then-Secretary of Transportation Ray LaHood and her first-hand involvement in the management of USMMA. One knowledgeable MARAD insider described Streitmatter as having been put in charge of USMMA by Secretary LaHood when he took authority for the Academy away from MARAD due to incompetence at the agency.

Strietmatter’s conflict of interest regarding the Academy culture study is established. She was directly involved in the hiring of Academy Superintendent James Helis and the appointment of Sharon van Wyk to the Academy Advisory Board.  Both Helis and van Wyk have been a part of USMMA leadership for the past four years. Both the Middle States Commission on Higher Education and the the DOT Inspector General have severely criticized USMMA leadership for failing to address SA/SH on campus during that same time period. That is also the same time period during which USMMA went from being fully accredited by Middle States to being placed on “accreditation warning” — the first federal academy to receive such an ignoble distinction.

LMI’s contract for the culture study requires it (and therefore Streitmatter) to evaluate this  same leadership that she hired. The framing of certain instructions in the RFQ indicates the expectation of the result — exonerate the leadership team. DOT clearly expects the LMI study to contradict the conclusions reached — independently — by both Middle States and the Inspector General. Streitmatter’s presence on the LMI study team enables the result that her former colleagues at DOT expect. She is exactly the person you would pick for the job if you wanted to create a false narrative about the leadership team deemed ineffectual by others.

Consider also that in 2011, then-Secretary LaHood forced MARAD’s chief counsel to resign after she asked the DOT Inspector General to investigate allegations of SA/SH at the Academy. This was during the time in which Streitmatter was handling the Academy for the Secretary.  Nothing creates a culture to tolerate SA/SH more than a decision by the top brass to sweep SA/SH allegations under the rug. With Streitmatter guiding LMI’s culture study, she has an unprecedented opportunity to ensure that the Office of the Secretary of Transportation does not get blamed for contributing to whatever SA/SH culture exists at USMMA.

With that background, consider the conflict of interest requirements set forth in the Statement of Work for the culture study. Under the terms of the Statement of Work, LMI was required to warrant:

 that, to the best of the Contractor’s knowledge and belief, there are no relevant facts or circumstances which could give rise to an Organizational Conflict of Interest (OCI).

An “Organizational Conflict of Interest is defined in Federal Acquisition Regulation (“FAR”) Subpart 9.505, which states that one of the two “underlying principles” that shape an Organizational Conflict of Interest is

“Preventing the existence of conflicting roles

that might bias a contractor’s judgment.”

(Emphasis added.)

At a minimum, when LMI submitted a bid for the contract, it should have disclosed Streitmatter’s conflict of interest to DOT and completely isolated her from anything related to the study.  The irrefutable conflict of interest and the compelling evidence that LMI was pre-selected (or “wired”) to be awarded the USMMA culture study are exactly why Congress and the Inspector General should investigate. The conflict of interest also means that the report that LMI is due to release in December is compromised and invalid.

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  1. I’ve spent this afternoon emailing my two senators, and representative, [edited by moderator] I’ve asked them to review this site to keep up to date on the latest attempts by the DOT, MARAD and Superintendent Col Helis to jeopardize the future licensing and competitiveness of our young women and men who want to serve.

    FYI, the latest out of Politico.com as to who potential replacements for Foxx:
    John Mica – outgoing Republican House Member from Florida
    James Simpson – former NJ DOT Commish
    Mark Rosenker – former Chair of NTSB
    and finally Bill Shuster has indicated he is not interested.

    Looking forward to January 19th, which will be Foxx and Jaenichen’s last day, and the start of a day for Kings Point on January 20th.

    Fearful of how much irreparable harm (under the cover of the LMI Report) Foxx, Jaenichen and Helis will attempt to do before Jan 20th. I don’t think there will be an extension as a clause in the contract permits, the report is pre-ordained, and will be out on time, LMI will not want risk it being cancelled after January 20th.

    • I edited this comment to remove a reference to the current political climate. Although it was a very mild political statement, I’ve tried to keep this site, including comments, above the political fray. I don’t think the issues the Academy is facing are Left/Right or Repub/Dem or Up/Down, etc. The population is pretty well split about the election; but we need to be unified and joined at the hip in doing what is right for USMMA. Introducing election politics could tear at the edges of that unity and be counterproductive.

  2. I’m so very grateful for all your (and the others) hard work in uncovering this scandal. We wouldn’t be this far if it weren’t for those concerned. It is a very frustrating time for the mids, the parents, and the alumni. But, when oh when, is Congress and the Inspector General actually going to investigate and hold these people accountable? I just want to scream at the top of my lungs to the person that will force these actions. So much harm has been done already. I was at a sailing event and met a parent from the US Naval Academy. First thing she said to me when I said my son is at USMMA was “Oh, I thought they were closing”. UGH!

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