Obama's CIO temporarily steps down after FBI raids ex-employer
As Vivek Kundra, President Obama's choice for U.S. chief information officer, was speaking about government transparency at the Washington, D.C., convention center on Thursday morning, his former offices a few blocks away were being raided by the FBI.
Until Obama's appointment last week, Kundra was the District of Columbia's chief technology officer. The FBI raid coincided with two arrests as part of a bribery sting--Yusuf Acar, 40, and Sushil Bansal, 41.
An administration official tells our sister news organization, CBS News, that Kundra has taken a leave of absence from his new position as the federal government's CIO until the FBI investigation is sorted out.
At an arraignment in federal court Thursday afternoon, Acar was charged with conspiracy to commit bribery, wire fraud, conflict of interest, and conspiracy to launder monetary instruments. He was ordered to be held without bond until a hearing Tuesday because prosecutors said he posed a flight risk.
Bansal was charged with conspiracy to commit bribery and conspiracy to launder monetary instruments, though prosecutors said a plea agreement could possibly be reached in his case. He was released after Thursday's arraignment but ordered not to conduct overseas financial transactions or leave the Washington metropolitan area.
Acar worked for Kundra as an information systems security officer with responsibility for government contracts. A number of requests for bids (PDF) posted on the District's Web site list Acar as "responsible for general administration of the contract" and "responsible for the day-to-day monitoring and supervision of the contract, of ensuring that the work conforms to the requirements of this contract."
Bansal previously worked as a project manager for the D.C. government and then founded a consulting firm called Advanced Integrated Technologies Corporation. AITC is a D.C.-government certified contractor with multiple contracts with the city, including one for "information technology services" worth $10 million.
AITC says that its contracts with the city of Washington, D.C., include technical support and network administration for the DMV's driver licensing system and that the city purchased McAfee anti-spyware licenses from AITC.
The FBI affidavit in support of their arrest said Acar and Bansal conspired to defraud the District of Columbia Government and commit bribery through a variety of schemes. In one such alleged scheme, a vendor such as AITC would bill the D.C. government for a higher number of goods than it would provide. A CTO official like Acar would allegedly falsely certify that the greater quantity was actually received, so the vendor would be paid more than necessary and the co-conspirators could split the proceeds.
Kundra's speech at the FOSE 2009 summit on Thursday focused on government transparency. He said: "We also want to tap into the ingenuity of the American people, lowering the cost of government operations, engaging citizens, and radical transparency ultimately pulls the citizens of the United States closer to the government."
"Imagine the vast depository of information the federal government has and what people could do if they had access to it--how it could change the engagement model and help create a more perfect union," he said.
The FBI and U.S. Attorney's office were not immediately available for comment. Kundra's last day in the District government was March 4.
During the FBI raid, most of the employees were told to go home, with others segregated into a waiting room, according to a report by WTOP radio.
Update 11:22 a.m. PDT: Kundra is not a target of the investigation, a spokeswoman for Washington's mayor said, according to Reuters. The U.S. Attorney's office has told us to expect more information soon.
Update 2:55 p.m. PDT: More information added from FBI affidavit.
Update 4:43 p.m. PDT: Added information about Kundra taking a leave of absence.
CNET's Stephanie Condon contributed to this report from Washington, D.C.
Declan McCullagh, CNET News' chief political correspondent, chronicles the intersection of politics and technology. He has covered politics, technology, and Washington, D.C., for more than a decade, which has turned him into an iconoclast and a skeptic of anyone who says, "We oughta have a new federal law against this." E-mail Declan. 
Scary.
Even at his level, he would have obviously had a hand in detailing and/or approving the scope and value of a contract that was 15% of his department's entire budget. The fact that it directly involved a former employee is a little suspect..
So far, the quality/qualifications of Obama's appointees are no different than any recent past president's... this is Change? Uh, ok.
A recruiter once told me that when he tries to place a candidate he always finds out what ethnicity a manager is, and send candidates of the same ethnicity.
Would be nice if the US govt would add a diversity policy to the H1B visa, we don't want to create a IT "cast" here in the US...
- by washdc2009 March 14, 2009 6:37 PM PDT
- Kundra should just quit. He was never qualified. If Obama wants to capitalize on the small stock market gain of the past week, he should just fire him.
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- by dvdrtrgn March 17, 2009 3:28 PM PDT
- washdc2009 are you a disgruntled employee or someone with an axe to grind? Yes, don't spread yourself too thin or you'll fail as a one man lynch mob...
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(9 Comments)As for Kundra tenure at OCTO, his achievements are non-existent. I wonder if anyone ever talked
to people who worked for Kundra. He was despised by his staff and the lower-level employees. Google Apps
was never fully rolled out to all District agencies. Many of his projects were simply in the planning
stages. None ever were ever completed.
Kundra was never a good manager. I am surprised that publications like Cnet.com fail to question his
accomplishments. There are a multitude of State CIOs, federal agency CIOs and CIOs in the private
arena who are more qualified and ethical.