Family tie helps win FDA contract

Federal work goes to the client of an official's husband. The couple say they acted properly.
By David Willman and Walter F. Roche Jr.
Times Staff Writers

December 19, 2006

WASHINGTON — The concerns at the office surfaced not long after their Las Vegas wedding.

Margaret "Margo" Burnette wasn't pleased with the contractor handling an important data project at the Food and Drug Administration, where she held a senior position. For advice, she turned in summer 2004 to her new husband, Mark A. Boster.

Both had spent most of their careers dealing with government contracts. And Boster, she recalled, had been "ranting about this fabulous company."

"I did ask Mark, 'What was the name of that company?' And I gave the name to my deputy."

The sequence of events worked out well for Platinum Solutions Inc., of Reston, Va., for whom Boster was a paid advisor.

The FDA dismissed the first contractor and awarded the job to Platinum Solutions. By this fall, the small technology company had collected about $4 million from the project. Last month it won a new, related FDA contract, possibly worth millions more.

But the events also placed Burnette at risk of crossing a legal line.

Federal law prohibits officials from acting on matters in which they or their spouse has a financial interest. Yet Burnette continued to oversee the project for months after the FDA hired Platinum Solutions, interviews and government records show. In April 2005, the company made her husband its chief operating officer and executive vice president.

The FDA's handling of the matter illustrates how a small but well-positioned contractor gained a foothold — and how conflict-of-interest restraints are only as strict as the officials who enforce them.

Some FDA staff members raised concerns internally about a conflict of interest nearly two years ago and an ethics inquiry was opened, according to those familiar with the matter. Burnette and Boster said the inquiry was closed last month with no finding of wrongdoing.

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'No regrets, no qualms'

Burnette, 48, said in an interview that she cleared details of her involvement with her boss and other agency officials. She was aware at the time, she said, that "there could be the concern of the appearance of a conflict of interest." But several FDA officials who supervised or worked alongside Burnette said that they did not know important aspects of her role until contacted for this article.

For instance, her boss through most of 2004 and 2005, James J. Rinaldi, said that he had believed, mistakenly, that Boster advised Platinum Solutions without pay. And he did not know, Rinaldi said, that Burnette had suggested Platinum Solutions to her deputy. Moreover, one of the first officials who raised concerns internally about Burnette's role, Linda D. Burek, said investigators never questioned her.

Asked for comment, FDA spokesman Douglas Arbesfeld cited agency policy in declining to discuss "personnel matters." Burnette was promoted early this year to a newly created post in the office of the FDA commissioner.

Burnette and Boster said they acted properly.

"I have no regrets, no qualms," Boster, 58, said.

Burnette said she saw nothing wrong with suggesting Platinum Solutions for the FDA work.

"The fact that my husband was on their board of advisors was irrelevant," said Burnette, adding that her specialty is "turning around troubled projects."

Burnette had arrived at the FDA in August 2003, when officials were trying to improve the tracking of the hundreds of new medical products that industry wants to market each year.

A new data system was intended to speed handling of the industry applications. Burnette, who had contracting experience with the Department of Agriculture and the state of Maryland, quickly began leading the project.

Burnette backed her colleagues' preference to hire a Maryland company, ProObject Inc.

On April 1, 2004, Burnette and Boster married. That same month Burnette was promoted to information-technology director. A top FDA official praised her as a "very successful leader."

Boster, who was working full-time with another technology contractor, joined Platinum Solutions' advisory board about then. He was paid a retainer and fees for attending meetings, he said.

Boster and his colleagues quickly recommended that Platinum Solutions petition the U.S. Small Business Administration to be recognized as a disadvantaged, woman-owned business. The firm won that special status in mid-2004, making it eligible to win federal contracts without competition.

Burnette said that she then wrote the first of several letters to FDA ethics officials, pledging to abstain from "procurement" related to the data project. (She said that she wrote the letter because Boster's full-time employer — at that point not Platinum Solutions — might bid for the project.)

Burnette and Boster already were familiar with the scrutiny that can surround government contracting.

Without admitting wrongdoing, Boster paid the federal government $30,000 six years ago to settle an ethics probe of his contacts with a contracting official at the Justice Department, where he had been a deputy assistant attorney general. Prosecutors had alleged that he violated a law prohibiting revolving-door contacts by a former official.

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Competition-free bid

By mid-2004, Burnette was making no secret within the FDA of her displeasure with ProObject. Burnette and her aides "had given the company some time to try to rectify things," said Rinaldi, her former boss. "It didn't work out to their satisfaction…. Especially, to Margo's."

Representatives of ProObject, which holds contracts with other federal agencies, declined to comment for this article.

The FDA then solicited bids from potential successors. When only one company responded, the agency abandoned the competitive-bidding route.

At that point Burnette conferred with her husband and steered her deputy, James Shugars, to contact Platinum Solutions. Burnette said she waited until Shugars had met with other Platinum Solutions personnel before telling him about her husband's position with the firm.

"I didn't tell him that until after he came back and said, 'These are the guys I want to go with,' " Burnette said.

Once Platinum Solutions was aboard, Burnette said, she assigned Shugars to handle "contract issues" directly with the company. Shugars briefed her regularly, she said.

Rinaldi said that Shugars voiced concerns to him and was "very, very nervous" about managing the data project while reporting to Burnette. "I think he was concerned about just the overall conflict of interest," said Rinaldi, now chief information officer at the federal Jet Propulsion Laboratory in La Cañada Flintridge. "Obviously that was because of the spouse."

Rinaldi confirmed that the FDA awarded the initial contract to Platinum Solutions without competition, a move that hinged on the company's special status as a disadvantaged business. He said that Shugars composed a formal justification for doing so.

Shugars declined through an FDA spokesman to be interviewed.

The circumstances surrounding the contract turnover had troubled others at the FDA, they said in interviews.

"All of a sudden ProObject was out — and Platinum Solutions was in," said Burek, who hired Burnette at the FDA. "I contacted the ethics staff. I did speak to someone there and they indicated they would be coming to interview me. But they never did."

Officials are prohibited by law from participating "personally and substantially" in matters involving their financial interest. And the U.S. Office of Government Ethics warned, in 1999 and in 2004, that such participation includes "involvement in preliminary discussions," or "supervision of subordinates working" on the matter.

Burnette participated, by her account, in daily project briefings with various aides and in bimonthly meetings with FDA "senior management." Burnette said that she cleared her participation with Rinaldi and other agency officials.

Rinaldi said that if he had known that Burnette pointed her deputy to Platinum Solutions and that her husband was a paid advisor to the company, he "would have had a few more questions." When he discussed Burnette's role with her in late 2004, Rinaldi said his understanding was that she was not supposed to participate "in anything that has to do with the project, in terms of dealing with that project, in terms of dealing with that contractor, or in decisions about what work that contractor does."

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Burnette steps back

In June 2005, Burnette said she relinquished any role with the data project because about two months earlier her husband had become a full-time executive with Platinum Solutions. In addition to salary, Boster's new position placed him in line for extra pay when the company's revenue increased, he said.

"Since he was actually working there as the chief operating officer, the perception would have been just too bad," Burnette said. "It would have appeared that I would have had some influence."

This year, the FDA sought competitive proposals for the completion of its data system. On Nov. 27, Platinum Solutions said that it won the contract.

Although Burnette said she no longer oversees the project, she helps shape technology priorities from the FDA commissioner's office. Her husband said that he was in charge of Platinum Solutions' performance on all ongoing contracts, including with the FDA.

Burnette and Boster said that handling government contracts inevitably invited criticism. "People can get unhappy, and all they have to do is file a complaint," she said.

Boster said the company had earned FDA work on merit, not on his wife's influence.

"We try not to bring work home, frankly," Boster said. "If I had a competitive advantage, there'd be a lot more contracts."


david.willman@latimes.com

wally.roche@latimes.com

Times researcher Janet Lundblad in Los Angeles contributed to this report.