INSPECTOR GENERAL DEPARTMENT OF DEFENSE 400 ARMY NAVY DRIVE ARLINGTON, VIRGINIA 22202-4704 OCCL SEP -8 72008 Mr, Kyle Kajihiro American Friends Service Committee Hawaii Area Program 2426 Oahu Avenue Honolulu, HI 96822 Dear Mr. Kajihiro: ‘This letter is in response to your Freedom of Information Act (FOIA) request of October 10, 2006, which was processed by the Naval Criminal Investigative Service. On August 18, 2008, the Naval Criminal Investigative Service FOIA Requester Service Center referred your request and eight pages to us for our action and direct response to you. We only processed the documents referred to our agency. If you think our agency may have other information responsive to your request, you must submit a new FOIA request. Ihave carefully reviewed the document and determined that the enclosed documents that originated with the Office of the Inspector General of the Department of Defense may be released to you with redactions, The redactions are in accordance with the FOIA under the following exemptions: ()(6): ‘The disclosure of information would constitute a clearly unwarranted invasion of personal privacy of individuals. (b)(7(C): The disclosure of information could reasonably be expected to constitute an unwarranted invasion of personal privacy in law enforcement records of individuals. Also, it is used to protect the identity of government law enforcement personnel named in the files. You have the right to appeal this decision of withholding information from you that is responsive to your FOIA request. If you should appeal, your appeal must be in writing to the Appellate Authority:Mr. John R. Crane Assistant Inspector General Office of Communications and Congressional Liaison Room 1034 400 Army Navy Drive Arlington, VA. 22202-4704 To be considered your appeal should be postmarked no later than 60 calendar days from the date of this letter. Please give your reasons for the appeal and write “Freedom of Information Act Appeal” printed clearly on the envelope and the letter. Also, reference your FOIA request number 08-0363R in your appeal letter, and include a copy of this letter. ‘Additionally, information was withheld in the enclosed documents on behalf of the Naval Criminal Investigative Service pursuant to exemption (b)(7)(C), the disclosure of information could reasonably be expected to constitute an unwarranted invasion of personal privaey in law enforcement records of individuals. Also, it is used to protect the identity of government law enforcement personnel named in the files. You have the right to appeal the Naval Criminal Investigative Service decision of withholding information from you that is responsive to your FOIA request. If you should appeal, your appeal must be in writing to the Naval Criminal Investigative Service Appellate Authority: Offfice of the Judge Advocate General (Code 14) Department of the Navy 1322 Patterson Avenue, S.E. Washington Naval Yard Washington, DC 20374-5066 T am the official responsible for this determination and have waived all processing fees. Should you have any questions regarding this matter, please contact me at (703) 604-8723. Sincerely, eo w= Keith O. Mastromichalis Acting Chief FOIA Requester Service Center! Privacy Act Office Enclosure: As statedEnclosureDon Ie 4 INSPECTOR GENERAL DEPARTMENT OF DEFENSE ‘400 ARMY NAVY DRIVE. ARLINGTON, VIRGINIA 22202-470« fe DEC 29 & Es & MEMORANDUM FOR DIRECTOR, NAVAL CRIMINAL INVESTIGATIVE SERVICE SUBJECT: (POYO-LES) Subpoena Request for the Records of Research Corporation of the University of Hawaii ! Thave reviewed the request of December 13, 2004, for the issuance of a subpoena to obtain certain documents believed to be in the possession of the subject business. The request states that the subpoenaed documents are necessary to determine if a Department of Defense contractor ftaudulently mischarged labor costs associated with ‘one United States Navy contract and two Navy grants. After carefully considering the matter in the request, I have determined that the nature of the investigation fells within the purview of the statutory mandate of the Office of the Inspector General of the Department of Defense (DoD) under the Inspector General Act of 1978, as amended, to conduct investigations in the DoD (including the military departments); the requested documents ere necessary and L relevant to ascertaining the truth of the matter under investigation; and the requested documents are not eurrently in the possession of the DoD. In issuing the attached subpoena, the assistance of the Director, Naval Criminal Investigative Service is i requested, pursuant to 5 U.S.C. Appendix 3, Section 8(c)(8), in executing the subpoena and continuing the investigation into these matters. Further, I suggest you remind your agents of the provisions of 5 U.S.C. Appendix 3, Section 8(g) which states that “ftjhe provisions of section 1385 of title 18 United States Code [commonly known as the Posse Comitatus Act] do not apply to audits and investigations conducted by, under the dircction of, or at the request of the Inspector General of the Department of Defense to carry out the purposes of [the Inspector General Act of 1978].” As this investigation continues, please ensure that you provide status reports and coordinate wit SA IMI Ofte ofthe Inspector Geters, ROD, at (703) 604 Attachment: As stated be) 20 M7KO) ENCLOSURE (AA)C ( United States of America Department of Defense Office of the Inspector General SUBPOENA DUCES TECUM TO Custodian of Records, Research Corporation of the University »f Hawaii, 2800 Woodlawn Drive, Suite 200, Honolulu, Hawaii 96822. YOU ARE HEREBY COMMANDED TO APPEAR BEFORE Special Acct or any Special Agent of the Naval Criminal Investigati is IS) acting on behalf of the Inspector General, pursuant to the Inspector General Act of 1978 (5 U.S.C. App. 3), at NCIS Field Office Washington, 1014 N. Street SE, Suite 1002, Building 200, Washington Navy Yard, Washington, District of Columbia 20374 on the 28th day of January, 2005 at 10 o'clock am, of that day. ‘You are hereby required to bring with you and produce at said time and place the following i information, documents, reports, answers, records, accounts, papers, and other data and documentary evidence pertaining to Research Corporation of the University of Hawaii, a Department of Defense contractor, for Navy 1-02-D-3151 and Navy grants NQ0421-01-1-0176 and N000014-01-1-0562, as specified in Appendix A, which are necessary in the performance of the responsibility of the Inspector General under the Inspector General i ‘Act: to conduct and supervise audits and investigations relating to the programs and operations of the Department of Defense; to promote economy, efficiency, and effectiveness in the administration of the programs and operations of the Department of Defense; and to prevent and detect fraud and abuse in the programs and operations of the Department of Defense. IN TESTIMONY WHEREOF, the signature of the undersigned Inspector General of the Department of 6) ‘UNIQUE IDENTIFICATION NUMBER: 2005046-8204 > MTKC) Don 1c 2 DD Form 2287, APR 95 (0G) Previous editions are obsolete. ENCLOSURE (3)opie s APPENDIX A 1. Definitions: a. The term “document(s)” means all written or printed matter 0 ? any kind, formal or informal, including the originals and all non-identical copies ther-of, whether different from the original by reason of notation made on such copies or otherwise in the possession, custody or contro! of the company, wherever located, including, but not limited to, work papers, correspondence, memoranda, notes, diaries, statistical materials, letters, electronic forms of communications, minutes, contracts, reports, studies, billing statements, receipts, summaries, pamphlets, books and interoffice communications, telephone calls, meetings or other communications, bulletins, computer printouts, hard dises, floppy disos, mainframe and personal computer data bases, teletypes, fax materials, invoices, worksheets and all drafts, alterations, modifications, changes and amendments of any nature-or kind to the foregoing, and all graphic and representations of any kind, including, but not limited to, photographs, charts, graphs, microfilm, videotapes, sound records, motion pictures and any electronic, mechanical or electrical recordings, or representations of any kind, including, but not limited to, tapes, cassettes, discs, recordings and films. b. The term “document(s)” also means any container, file folder or other enclosure bearing, any marking or identification in which other “documents” are kept, but does not include file cabinets, In all casos where any original or non-identical copy of any original is not in the possession, custody or control of the university, the term “document” shall include any copy of tho original and any non-identical copy thereof. ¢. “The term “employes” means all persons who worked for Research Corporation of the University of Hawaii (RCUH) (hereafter RCUH), whether paid or unpaid, including, contract employees and temporary employees provided and/or paid by any temporary agency. 2, Documents Requested: ‘a. All policy documents that were in effect during calendar years 2001 and 2002, for the recording of time and labor on contracts and grants concerning the Department of Defense. b. All Chart of Account records for calendar years 2001 and 2002. For Navy contract NO0421-02-D-3151 ¢, All records pertaining to the award of proposed Navy contract NO0421-02-D-3151, including, but not limited to, proposal work papers and drafts, e-mail records relating to the proposal, correspondence including mail records and facsimile transmissions, records identifying RCUH employees involved with writing, assembling, and preparing the RCUH submissions for the proposed contract, records identifying the intemal account number(s) for charging proposal preparation labor, printouts from the RCUH accounting system(s) showing, 1 Bad ‘UNIQUE IDENTIFICATION NUMBER: 2005046-8204the proposal labor hours charged by individual RCUH employ. effort, For Navy grant NO0421-01-1-0176 4, Printouts from the RCUH accounting system showing labor hours, rates and travel expense details for all RCUH employees charged to the following SF-270 payment requests submitted by the University of Hawaii: Payment request number SS 19467 Payment request number SS 19821 Payment request number SS 20094 Payment request number SS 20361 Payment request number 88 20697 Payment request number SS 21099 Payment request number SS 21298 Payment request number SS 21659 Payment request number S$ 22035 10, Payment request number SS 22411 11, Payment request number SS 22762 12, Payment request number SS 23137 PRI Aw Eee For Navy grant N000014-01-1-0562 ¢, All SF-270 payment requests submitted by, on behalf of, or through the University of Hawaii, Records shall include labor hours, rates and travel expense details for all RCUH employees charged for each SF-270 payment request for the time period September 1, 2001 through December 31, 2002, -eP 164 “UNIQUE IDENTIFICATION NUMBER: 2005046-8204 w) tt). DEPARTMENT OF DEFENSE INSPECTOR GENERAL DEFENSE CRIMINAL INVESTIGATIVE SERVICE pleat MISSION VIZIO, CR 020518300 200400715J-30-JAN-2004-50HI-B3/IR(LEAD) January 30, 2004 PROCUREMENT IRREGULARITIES WITH THE DEVELOPMENT OF THE MODULAR COMMAND CENTER (MCC) RESEARCH CORPORATION, UNIVERSITY OF HAWAII et. Al Honolulu, HI : i [ATION REP AD RESPONSE: Pursuant fo a Iéad request fiom the Navel ‘Criminal Investigative Service (NCIS), Washington Field Office, pertaining to Navy case number 24JUN02-DCWA-0307-4GNA, on January 16, 2004, the Defense Criminal Investigative Servi Hawaii Post of Duty, conducted an interview of : BERBER Research Corporation of the University of awa ‘copy of the lead request, teceived by the DCIS Hawaii PoD on January 8, 2004, is appended as an attachment, As indicated above,the NCIS investigation involves procurement irregularities on the Development of the Modular and d false jon with three RCUH personnel hired by and Harold Masumoto, the Executive jitector of RC! interview was conducted by the reporting agent and Special Agent [mI at BEBE lace of busine: — Prior to being interviewed, | |was advised of the identities of the interviewing agents and the nature of the proposed interview. agreed to be interviewed and voluntarily provided the following information: for RCUH on a MRI began by stating he was currently employed as an| from: TnL After graduating omertors ployment a i ak hr hI sot — i for approximately MME before a a a at the RCUH. stated he has been employed by the RCUH for approximately! or since approxima | but actually worked for Massachusetts Institute of knew SIRI since when they had initially mét while working on a project on Kwajalein [sland. Several months before| —_ contacted a a possible position at RCUH working on the Pacific Missile Range Facility (PMRF), Kauai, HI. At the time| irst contacted him, he was not aware that a U.S. Navy Grant funded the fa position. He did. ot become aware of this fact until he had been a) ‘at PMRF for aboutf b(7XC) ASSERTION wanyire i arene cpm be pee ove omtpatclcscrimetrcmmmandhoiane QQ. | FOR OFFIGHIAUSEONLY | fitiasstiie celiny spec yptr nesioves sabsasecs otcban eaee Sees pee ape dod IG 5) Sometime on or about his sixth month at PMRF and RCUH, he discovered that funding for his position at RCUH was being provided by one of two Navy grants and the Principal Investigator’s (PI) fo the grants aT: feared that }was the PI for the grant, wi d his position. Up until then, had no contact with| jand primarily reported to RR istevicnea him for the position and| rezalled additionally speaking with someone at the RCUH Personnel Office prior to being offered the position. In ‘it recalls telling [MIMI and RCUH Personnel, that he was interested if they could offer him a competitive compensation package, which would make it attractive to leave his employment with The compensation package would need to account for his current salary and the cost of living in the State of Hawaii. In addition, he recalls being reimbursed for relocation expenses, which amounted to approximately $16,000. IINMMNENEEIE did not know what a “Direct Appointment” was. KEINE calized that the position was a full time position but dependent upon funding and was year fo year. believed he started at the RCUH on or about and his duties were primarily as an Government on Technical Development issues on the | and acted asa liaison between RCUH and the Government, Besides his dealings will also recalls dealing with General Schedule (GS) employee working for Hawaii and is back on the mainland, has since moved from After about 2-3 months at PMRF working at RCUH, EER «nd [III contacted him and asked if he would be willing to work on a proposed NAVAIR conttact proposal known as the Kai’e’e Project (Kai’e’e asked if he would be willing to participate in waiting the proposal for Kai’e’e to which he agreed, [III stated that all effort on the Kai’e’e bid and proposal work was done after hours working out of his home. ]was adamant that he did not work on Kai’e’e during RCUH hours which were spent working on the grent, INMIMMIH admitted that he assumed that should the contract be awarded, he would have been considered for a position working on Project Kai'e’e, stated that he voluntarily provided assistance on the contract proposal because of this and did not have a second thought about the amount of work that would be expected of him nor compensation, He explained he had come from the private sector where this was a common practice and he did not think it was unusual stated that he and IIE worked on the Kai’e’e contract proposal for about 6 or 7 months primarily at his residence on Kauai during their off duty hours, on weekdays and weekends alike. RB tat cai that with this in mind, he also understood that the grant, which funded bi posiionst CU asco “eec” A cc | However IRI sated that his work at PMRF on duty was spent working on strictly grant issues and never the Kai’e’e contract proposal. [EIEEEENIT was provided his timesheets by interviewing agents for NIN through! a and verified that the timesheets were in fact accurate, with 100 percent of his time attributed to Project Code 657764. In addi ° vss provided copies of travel records submitted by him regarding Project Code 657764 and verified that travel claim numbers 2568058, 2574776, and 2594827 were accurately charged to Project Code 657764. All three trips involved discussions and work done relating to the Project Code 657764. The only trip (2568058) in which the NAVAIR contract (Kai’e’e) was also discussed was on a trip to Okinawa, Japan. However, ge onan your 8) 7XC) ‘CLASSIFICATION = eee eee pet, Con yell ane eh " FOR GFFICIALUSEONEY «| ihesclet eeklintasecr neuaphentsnes aan ofthe Atdsart nopetor | Sena tvestgsbone 493 Dob IG 6this tip was primarily (o auenc_IM2C2” communications system meet. related tothe grant did not believe these trips were being directed by [IMM and also opined that they were , necessary for the Grant (Project Code 657764). MR state the timecards for his employment while working under the grant were filled out ‘ by him and signed by him. After he signed them, he would then fax the completed timecards to ‘Acai, MI set all the timecards were acourately being charged 100 percent to Project Code 657764, After working with IIH on the propos! for approximately I HII cecalted that the proposal was submitted to NAVAIR and valued initially at $50 million. After negotiations with ‘he government and revisions, the value ofthe contract was brought dovm to $1.2 million. At this point, Harold Matsumoto (Matsumoto), RCUH President, pulled the proposal after about 6 months from when the original proposal was submitted. MR lieved that MME did extensive work on the Kai’e’c ‘proposal and opined that she did provide at least 50 percent of the input for the cost proposal. INI tatcd he had previously provided any and all documents to the NCIS ‘regarding this issuc and did not have additional information to support this assertion. HE «dcitionally recalls that he believed that MIMand RADM Schultz did have more than a professional relationship, but he could not further substantiate this statement. During the work done with IMI on the Kaie°e proposal :ecalled being asked by| ‘ P MR opinct that} Iwas: attempting to secure a job for RADM Schultz upon his retirement from military service. Matsumoto resigned his position at RCUH and started « new company known to| Pictar, Inc, (Pictar). ]was not aware of any relationships neither financial nor personal, between Matsumoto and SS ae: known by IIMs a former active du with litle or no technical knowledge regarding the work being done by RCUH. ‘employed by RCUH on Syrmos’ grant. INE believed that did work on: Sines rant ast vas aot amore structured than the grant, which he worked under [II stated that in his opinion, was more of a “gopher” than anything else as he was not technically savvy and could provide little input on technical grant matters. Pe ia ine brought in to assist on the NAVAIR contract proposal but quickly realized that| Jcould not possibly assist, as he could not contribute on the proposal due to his lack of knowledge in the subject matter. stated he might have attended one or two off duty meetings regarding the contract proposal but nothing more, IINNENNINNMNdid not know where a currently located or his present employment status. MR could not provide any further pertinent information but advised he would be available for Fature interviews if requested, Prior to the interview of IEEE the reporting agent contacted Health and Human Services Office of the Inspector General OIG), Office of my) ene "| tas copentv nay ee inlay Cates sen na 0 et ee soc ata ere ln ageney. Gonna opt duced FORGFHECHMEHSEONEY | Big.Sneisu Serna icvestesonn Dod 1G 7 3 34Andit Services (OAS): In. vie Ye’ Attuchmient (1);it'was notéd tHE OIG, OAS, Submitted an Audit Report. HHS-O1G, OAS, has an agreement with the Defense Contract Audit Agency (DCAA) to. cotiduct Audits for DCAA ‘on University of Hawaii contracts with the Deparimi Sibeee. Ml provided background information utilized to-assist in the interview a 7 In total; the DCIS, HII PoD expended approximately 22 duty hours on this lead request. No additional expeisses were incurred. The appropriate entries have bzen made in the Investigative Data System, Attachment: 1) NCIS Lead Request and related exhibits DISTR: SOLA/NCI eld Office (S) ‘CLASSIFICATION: Prepared by SAM Hawaii Post ‘ai i APPR: ie 7a mayb oc raison oe Neca epecr RBS DoD IG 8