[Congressional Record Volume 170, Number 46 (Thursday, March 14, 2024)]
[Senate]
[Pages S2417-S2418]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        CONGRESSIONAL OVERSIGHT

  Mr. GRASSLEY. Mr. President, I come to the floor to give an update on 
my oversight work. I often speak on the floor about the importance of 
oversight. Now, my remarks today have some history that goes back from 
now back to 8 years ago, so it might not seem very important today, but 
I speak so the Defense Department won't make the same blunder they made 
over that period of time. That blunder I am talking about is the mess-
up with the JEDI contract, a cloud contract.
  The parable of the vineyard tells us about corrupt tenants who tried 
to steal someone's harvest and keep it for themselves. It is especially 
bad, then, when public officials try to take the fruit of the 
taxpayers' vineyard for private gain. We can't ignore this sort of 
corruption or it will surely get worse.
  The 2019 planned Joint Enterprise Defense Infrastructure contract--
otherwise known as JEDI--was an attempt to move the entire Defense 
Department to cloud, meaning cloud computing, which happened to be a 
very, very expensive project. It was around $10 billion and was 
ultimately canceled, as it should have been.
  Ten billion dollars is a lot of tempting fruit, even by Washington, 
DC, standards. Early on, there were allegations that various Defense 
Department officials were helping the big corporation of Amazon behind 
the scenes to gain a contracting advantage. The allegations caused the 
inspector general of the Department of Defense to review the matter.
  My oversight work started in 2019. My oversight has centered on 
conflicts of interest on the one hand, and on the other hand, the 
inspector general's review. It is a good-government oversight inquiry.
  I know Amazon didn't end up getting this particular contract, but 
that doesn't matter to my oversight and what I am telling you today. 
Even attempted efforts to steer a government contract need to be 
exposed. That is what the taxpayers deserve.
  Sally Donnelly, a key person in my investigation--happened to be a 
close adviser to then-Secretary of Defense James Mattis and former 
Amazon consultant--is a central figure. Let me make it very clear. 
Sally Donnelly was a close adviser to the Secretary of Defense and a 
former Amazon consultant. So that is the central figure of what I am 
talking about today.
  Throughout her time at the Defense Department, Donnelly received 
payments from the sale of her consulting business, which she sold right 
before she entered government service. She didn't disclose precisely 
who purchased her firm to either the Defense Department, which she 
should have, or to the inspector general, even when asked the identity 
under oath.
  In late 2022, I obtained new evidence the inspector general failed to 
obtain during its investigation. That evidence was that the actual name 
of the company that purchased Donnelly's firm was VMAP--an acronym, V-
M-A-P. This company was a portfolio company of C5 Capital, an Amazon-
linked company.
  The Defense Department inspector general claimed in its 2020 report 
that it found no evidence that Donnelly ``had an ongoing or undisclosed 
financial relationship with C5 Capital or Amazon and its affiliates 
that would have required her to recuse.'' The evidence appears to show 
otherwise. There was a financial relationship. Why the inspector 
general didn't find out about it, I don't know.
  In two letters last year, I continued to press Donnelly and her then-
business partner, Andre Pienaar, the CEO of C5 Capital, for answers. 
Now, as you might expect, both have refused to cooperate with my 
oversight inquiry.
  The inspector general report also claimed to have found no evidence 
that Donnelly had any role in the JEDI contract or violated any of her 
ethical obligations.
  For additional transparency, we need to look at Defense Department 
records from 2017 and 2018, when Donnelly worked there, so you are 
going to hear a lot of quotes from emails I got.
  These records appear to show Donnelly working behind the scenes to 
favor Amazon. Some of this information was included in the inspector 
general's report. However, much of it was not included even though the 
inspector general had access to these government records.
  Kevin Sweeney, then-chief of staff to Secretary of Defense Mattis, 
told the inspector general that he thought Donnelly invited an Amazon 
vice president responsible for public sector sales to a London dinner 
with Secretary Mattis in March of 2017. This dinner was shortly after 
Donnelly began working for the Secretary of Defense. That Amazon 
executive, Teresa Carlson, used the dinner to invite the Secretary to 
later meet Amazon CEO Jeff Bezos.
  Secretary Mattis also revealed it was Donnelly who suggested he 
travel to meet tech leaders, including Amazon.
  Now, following that London dinner, Donnelly repeatedly pushed for the 
meeting between Bezos and Mattis. The inspector general report 
deflected by saying the Secretary's chief of staff, not Donnelly, 
scheduled his meetings. But that report cuts out part of an email 
showing that the chief of staff deferred to Donnelly on whether the 
Secretary should meet with Amazon's CEO.
  The inspector general's report also omitted a part of Donnelly's 
email where she said the Secretary should meet Bezos because he was 
``the genius of our age.''
  The inspector general's report omitted another email from an Amazon 
official asking Donnelly for guidance on the Secretary of Defense's 
Seattle visit to Amazon and what ``landmines we should avoid.'' That 
same email asked Donnelly to ``put a bug in some ears'' to help Amazon 
counter challenges from the Defense Department's Chief Information 
Officer.
  Donnelly responded on her government email with inside advice, 
telling the Amazon official to emphasize ``security security security 
of [the] cloud.''
  Now, just 3 days before the visit to Seattle, a DOD official emailed 
Donnelly the agenda for Amazon's presentation, which included a ``cloud 
overview'' by the same Amazon official that had asked her for advice.
  An email sent from another Department of Defense official to Donnelly 
shortly after the Secretary's visit noted that discussion of cloud 
technology was the centerpiece of meetings with Amazon and other tech 
leaders.
  Donnelly also was informed by a DOD official traveling with the 
Secretary, on the very day of the Secretary's visit with Amazon's CEO, 
on August 10, 2017, that the visit ``seemed to morph into an Amazon Web 
Services sales pitch.''
  A followup email from that same official informed her that after the 
visit, the Secretary of Defense was ``99.9% there in terms of going to 
the cloud.''
  Despite all of this, when asked whether the Defense Department cloud

[[Page S2418]]

was discussed during the meeting, Donnelly swore under oath on August 
15, 2019: ``I don't know. I wasn't there.''
  She also swore that she didn't know how long Bezos was present during 
the visit. But the same Defense Department official traveling with the 
Secretary of Defense told her via email that Bezos stayed for the 
Secretary's entire visit.
  The inspector general, however, found no ethics violation, claiming 
Donnelly had no formal role in the procurement.
  Now, the evidence again appears to say otherwise, and there is more.
  An email, 2 weeks after the Secretary's Amazon visit from DOD 
officials, spoke of the need for a memo from the Secretary to ``crush 
the bureaucratic impediments'' Amazon had been encountering.
  In other words, there were a lot of people in the Defense Department 
who knew something was going on, and they were trying to stop it. That 
is the way I read that email. Of course, Donnelly and another DOD 
official were on that email.
  In response, that DOD official, with Donnelly still copied, said: 
``Sally is already working angles'' to crush those impediments.
  On September 13, 2017, merely weeks later, the Deputy Secretary of 
Defense issued a memo Department-wide crushing those impediments by 
announcing rapid cloud adoption through ``a tailored acquisition 
process.''
  Now, I suppose ``tailored acquisition process'' has many definitions, 
but I kind of read that, as suspicious as I am, as trying to short-
circuit the process of contracting so some favorable person can get it.
  Now, Air Force procurement documents interpreted this memo as what I 
just said, the Secretary's intention to award the contract to Amazon. 
Records also show that after the Secretary's Amazon meeting, the head 
of the Digital Defense Service asked Donnelly for permission to ``let 
me lead cloud tiger team.''
  Donnelly didn't respond that she had no role in the process. Instead, 
she told the DOD official to ``Do it quick!''
  Just a few weeks later, that official was appointed to lead the first 
phase of the JEDI contract.
  Donnelly reportedly organized another dinner in Washington in January 
2018. Only four people were there: The Secretary of Defense, Sally 
Donnelly, Teresa Carlson, and the CEO of Amazon. Carlson directly 
admitted to the inspector general that the dinner's purpose was to 
continue the discussion from the Secretary's Amazon visit. That visit, 
apparently, became a sales pitch. Carlson sent Amazon Web Services 
sales material to Donnelly's government email for review just hours 
before that dinner.
  Instead of taking this evidence head-on, the inspector general report 
pointed to the Government Accountability Office, or what we know as GAO 
around here. The report claimed that the GAO ``also reviewed whether 
Mrs. Donnelly should have disqualified herself from participating in 
the JEDI Cloud procurement.''
  That same report also claimed the GAO, in resolving a bid protest, 
agreed with the Defense Department that ``Ms. Donnelly wasn't involved 
in any way with the JEDI Cloud procurement.''
  Attorneys for Donnelly and attorneys for C5's CEO made that very same 
claim. However, there is one very big problem. Donnelly wasn't even 
mentioned in the GAO's decision.
  The GAO told my office late last year that they have ``no idea where 
the statement in the DOD Inspector General report comes from.'' The GAO 
also told my office there is ``simply no support for this statement 
from the decision itself or the record of the arguments raised by the 
protester.''
  So not only did the inspector general report omit critical evidence, 
that I have described to Senators today, but it blatantly misstates the 
work of another government Agency. So we have a big problem not only 
with conflict of interest, but we have a problem with the inspector 
general not doing its job because the Inspector General Office's work 
in this matter is a disgraceful example of government oversight.
  Former Department of Defense Acting Inspector General Sean O'Donnell 
was so embarrassed by his Agency's work that he refused to even name 
the staff who worked on this incompetent report.
  Robert Storch, the current inspector general, has followed suit.
  Donnelly has continued to refuse to cooperate with this congressional 
investigation, yet--can you believe this?--she still sits on the 
Defense Business Board, providing advice to the Secretary of Defense.
  A portfolio company of C5 Capital, according to its own public 
statements, has gained cyber security business in Ukraine. If that is 
supported by taxpayers' money, well, they shouldn't get a penny until 
the CEO cooperates with Congress and clears this matter up.
  Inspector General Storch must redo the investigation and rewrite 
relevant sections of this report, considering the clear failures of the 
original report.
  It is time to clear the air, time to fight corruption, time to 
restore trust in how you negotiate contracts and how you fight 
conflicts of interest.
  That is the history I have given you today.
  Yes, I know the JEDI contract is dead, but right now, there are 
people in the Defense Department who are still pursuing contracts to 
make use of the cloud for storage. Hopefully, lessons learned from this 
report I have given you and what took place in the JEDI contract are 
lessons learned so they won't be repeated as DOD moves ahead. These are 
multibillion-dollar contracts.

  We need to avoid conflicts of interests like this that I just have 
pointed out to you. We need to make sure there is good oversight of the 
expenditure of taxpayers' money, but that ought to start with the 
people in the Department of Defense itself. It ought to be policed by 
the inspector general of the DOD. That wasn't done in this case 
involving Donnelly. And, for sure, Congress shouldn't give up any of 
its constitutional responsibilities to see that taxpayers' money is 
spent wisely.
  I yield the floor.

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