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Topics: House of Representatives

Darrell Issa: IRS official threw government contracts to a friend

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One business owner’s friendship with an IRS official allowed him to receive as much as $500 million worth of contracts for federal work, House investigators say in a report that suggests an abuse of IRS authority and of a program designed to help disabled veterans.

“Today, the IRS cannot look taxpayers in the eye and truthfully say they are protecting their contributions to government,” House Oversight and Government Reform Committee chairman Darrell Issa said today in a statement. “By inappropriately using a personal relationship and abusing a provision designed to help disadvantaged businesses, the IRS and Strong Castle have made a mockery of fair and open competition for government contracts. Taxpayers deserve accountability and the Committee is troubled by this unacceptable behavior.”

Braulio Castillo, the owner of Strong Castle, told CNS News that he didn’t have a friend at the IRS, but he admitted during an interview with House investigators that he is friends with Greg Roseman, an IRS contracting officer.

“Yes, Mr. Roseman and I are friends,” Castillo told investigators, explaining that they met in 2003. According to the report, Castillo’s company had won no federal contracts before 2012.

“On December 31, 2011, Greg Roseman told Braulio Castillo that his company would be ‘Fortune 500 in no time,’” the report says.  “In 2012, Strong Castle won over a dozen contracts from the IRS with a potential value in  excess of $500 million.”

Why would Roseman care about Castillo’s business? “The Committee reviewed over 350 text messages between Roseman and Castillo. The messages show a relationship far closer than an arms-length relationship between a contractor and government contracting customer. Text messages include grossly inappropriate homophobic slurs that underscore a problematically close relationship (p. 56),” OGR also found. “Castillo said months of records for other text messages, at critical contract junctures, were accidentally deleted and unavailable.”

Investigators also found that Castillo used an injury sustained while attending a U.S. military academy prep school during his senior year of high school to qualify for contracts that the government reserves for disabled veterans.

“Strong Castle secured the designation of a Service-Disabled Veteran-Owned Small Business as a result of an injury its owner suffered at a military prep school,” the committee found. “He was able to get this designation despite the fact that he never actively served as a member of the armed services, he played college football after the injury, and twenty-seven years went by before he sought the designation as a disabled veteran. Castillo sought the disabled veteran designation only months before he purchased the company and was so focused on its ability to help secure contracts that he didn’t even know it would entitle him a $450 monthly payment.”

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