FBI probe of Kundra's former D.C. technology office may widen

Newly named Obama CIO now “on leave”

Days after being named as President Obama's CIO, Vivek Kundra is now on leave, following an FBI search of his previous post and the arrest on bribery, fraud, and money laundering charges of one of his subordinates and a contractor.

Currently there is no indication that Kundra is implicated in the scandal. The Washington Times quoted an unnamed "White House official" as saying Kundra was on leave "until further details become known" about the investigation involving the Washington, D.C. Office of the Chief Technology Officer (OCTO), the post held by Kundra from 2007 until appointed to the CIO job on March 5.

The case seems likely to widen. An FBI affidavit that lays out the details of the alleged corruption scheme identifies only by their initials at least five other individuals who are allegedly involved in the corruption scheme. Two are further identified as being OCTO employees, and a third is identified as "wife of Yusuf Acar," one of the two men arrested and charged.

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Days after being named as President Obama's CIO, Vivek Kundra is now on leave, following an FBI search of his previous post and the arrest on bribery, fraud, and money laundering charges of one of his subordinates and a contractor.

Currently there is no indication that Kundra is implicated in the scandal. The Washington Times quoted an unnamed "White House official" as saying Kundra was on leave "until further details become known" about the investigation involving the Washington, D.C. Office of the Chief Technology Officer (OCTO), the post held by Kundra from 2007 until appointed to the CIO job on March 5.

The case seems likely to widen. An FBI affidavit that lays out the details of the alleged corruption scheme identifies only by their initials at least five other individuals who are allegedly involved in the corruption scheme. Two are further identified as being OCTO employees, and a third is identified as "wife of Yusuf Acar," one of the two men arrested and charged.

As CIO, Kundra is in charge of directing policy for government IT investments, and administering federal technology spending.

Obama spokesman Robert Gibbs would not say whether the White House knew of the investigation when it announced Kundra's selection, according to the Associated Press. The Washington Times reported that Gibbs confirmed the Administration knew the raid would take place (but the newspaper didn't clarify when this was known). Gibbs said he would not comment on an ongoing investigation and told reporters at yesterday's daily White House briefing to contact the Justice Department.

"This is obviously a serious matter," Gibbs said, quoted in the Washington Times story.

The FBI search of the facilities occupied by the staff of the Office of the CTO was conducted about 9 a.m. Thursday. Agents arrested two men and charged them with conspiracy to commit bribery and money laundering. One is Yusuf Acar, identified as an IT security specialist and acting chief security officer for the city. He was responsible for purchasing hardware and software, and for hiring contract employees for city agencies.

Hired in 2004, his salary is $127,468. Prosecutors said they found $70,000 in Acar's home. Acar worked under Kundra, but one report quoted a D.C. mayoral spokeswoman as saying she was "very confident" Kundra was not a target of the investigation.

The second man arrested is Sushil Bansal, originally identified as an employee for a Washington IT company but in fact the CEO of Advanced Integrated Technologies Corp. The company's Web site says he worked previously as a "project manager in D.C. government and implemented its financial system."

Federal documents say the scheme involved the placing of an order for goods from Bansal's company, which then lowered the number of units bought from a distributor, but billed the city for the full amount, pocketing the difference, according to the Washington Times report. Acar's alleged role was to place the order, and then certify that the full order had in fact been delivered, allowing the city to pay the fraudulent bill. The two men allegedly split the proceeds.