Inside the Brutal Power Struggle at Homeland Security
This article features our National Security Analyst Irvin McCullough and was originally published here.
TENSIONS RAN SO high at the Department of Homeland Security’s oversight wing that one senior official fantasized about Arya Stark, the fictional assassin in “Game of Thrones,” “taking care of” the agency chief, according to an investigation obtained by The Intercept under the Freedom of Information Act. The investigation, conducted in 2020 by an outside law firm, reveals bureaucratic infighting so bitter that it drove out an agency head and led to an array of startling allegations, including that a high-level official made threatening comments about a concealed weapon during a meeting.
The investigation paints a picture of DHS’s Office of Inspector General in chaos. The OIG performs an important function: probing misconduct within the sprawling DHS, the largest law enforcement agency in the country. Policing DHS and its bevy of law enforcement agencies — including Immigration and Customs Enforcement, Customs and Border Protection, and the Secret Service, to name just a few — is a responsibility that falls upon the OIG. The dysfunction couldn’t have come at a worse time, as many of these same law enforcement agencies have been implicated in some of the Trump administration’s most controversial policies, like family separation at the border, the conditions of migrant detention facilities, and the crackdown on protesters in Portland, all of which DHS OIG has investigated in recent months. One of DHS OIG’s most important responsibilities is investigating DHS employees’ whistleblower disclosures, which appear to have been weaponized by employees who used them to go after one another.
The investigation, launched in May 2020, focuses on a senior official who brought down the agency’s leader — and its morale along with it. In one striking illustration of the civil war within the agency, the investigation describes a senior official saying of the agency’s top official, then acting Inspector General John V. Kelly, in an email: “Perhaps Arya would consider taking care of some business here? The DHS OIG throne isn’t as glam but we do have a night king that just. won’t. die.” (The “Night King” is one of the “Game of Thrones” series’ antagonists; he leads an army of undead bent on conquering the planet.)
While the report does not find any violation of law, it concludes that the “trio” of Costello, Shaw, and Ouzts hampered the agency’s ability to function, consuming it with complaints and sniping. The report concludes, “In sum, our investigation revealed that [Costello], with the assistance of [Ouzts and Shaw] … elevated her own interests above those of the public.” An attorney for Costello disputed the findings of the report but did not respond to any specific allegations, citing privacy concerns. Shaw and Ouzts did not respond to a request for comment.
The “Night King” email was sent on April 29, 2019, three days after Kelly informed Costello that he was delaying his retirement. Despite initially getting along with Kelly until around the end of 2018, Costello soured on him when he postponed his retirement. Then began a pressure campaign of ethics complaints, leaks, and outright hostility, culminating in Kelly’s resignation. Costello launched the crusade in hopes of becoming inspector general, the report says, rewarding co-workers who helped and punishing those who did not.
“[Redacted] motive for her actions appears to have been a desire to further her own professional ambitions and those of her allies … while diminishing the professional opportunities of those whom she disliked and/or viewed as disloyal,” the report says. That redacted name is Costello’s, according to two sources familiar with the events, who also confirmed that Costello declined to provide interviews to investigators — unlike Shaw and Ouzts, who did.
But the infighting did not disappear with Kelly, who would soon be replaced by Joseph V. Cuffari, a longtime investigator who spent over 20 years at the Department of Justice. Though Cuffari was appointed by former President Donald Trump and confirmed by the Senate in July 2019, Cuffari has conducted investigations into controversial Trump policies like family separation and sending DHS personnel to respond to protests in Portland. Nonetheless, Costello turned her attention to Cuffari after his nomination, filing multiple misconduct allegations against him within the first few months of his appointment.
By February 2020, Costello herself was put on administrative leave for alleged ethical misconduct; on June 11, DHS OIG notified Congress that she was no longer employed at the agency. But the bureaucratic war leading up to that point would bring the agency to its knees, with OIG employees telling investigators that it was “difficult for them to work together, much less collaborate on key functions of the office.”
The report has renewed significance in light of the incoming Biden administration, which will have to make staffing decisions in the coming weeks, including whether to keep Cuffari on as inspector general. Biden will also have to decide how to rein in DHS, which broadly suffers from the chaos depicted in the report, owing to its sprawling size and poorly defined mission — problems that prompted House Democrats to introduce legislation last year aimed at reforming the department. And though Costello, Ouzts, and Shaw are not currently at DHS OIG, high-level officials like them frequently pass through different agencies. Shaw, for example, is now deputy inspector general at the State Department.
THE INVESTIGATION THAT led to the report, dated December 14, 2020, was launched by the law firm WilmerHale on May 4, 2020. The inquiry was prompted by DHS OIG after the independent agency that normally handles these cases, the Council of the Inspectors General on Integrity and Efficiency, failed to produce an investigation despite multiple requests, according to two sources familiar with the matter. Though Cuffari’s office prompted the investigation, Cuffari told The Intercept that WilmerHale was selected under the formal federal contracting process and handled by a career contracting official to ensure independence. “I delegated this contract and awarding of the contract to our contract officer who has a warrant to do federal contracts,” he said.
In May 2019, an unidentified senior official — Costello, per accounts from two sources — “used an internal inquiry to put public and political pressure on [Kelly] to retire.” The inquiry involved publicly disclosing evidence that the agency had retracted 13 oversight reports regarding the Federal Emergency Management Agency’s response to disasters over concerns that they were too positive. While there’s nothing wrong with disclosing evidence of poor oversight, Costello’s motive was to prompt Congress to take action against Kelly, according to the report. (One employee is described as asking why they were issuing the FEMA report months after its completion in October.) Costello pitched the plan to Shaw, who replied that this was the “nuclear option,” according to emails reviewed by investigators and sources identifying the players.
After the disclosure to Congress, Kelly, the agency chief who had served at DHS OIG for over a decade, resigned on June 10, 2019. Following Kelly’s retirement, the report said, an official approved a retroactive change to a personnel file “which purportedly justified her” — Costello, per accounts from two sources — “to serve” in Kelly’s place. When Cuffari arrived in July 2019, Costello trained her sights on him.
Perhaps most concerning among all the investigation’s findings is the weaponization of the whistleblowing process, DHS OIG’s most important function, within the watchdog agency itself. If a DHS employee believes that they have witnessed misconduct, one of the only ways that they can file a whistleblower complaint and enjoy legal protections against reprisal is via DHS OIG, though the agency has a spotty record of investigating such complaints. But the investigation found multiple cases in which frivolous complaints were filed by employees of DHS OIG in order to pressure officials to resign. “The agency was beset by employees’ accusations of misconduct and retaliation, frequent internal investigations of OIG personnel, and complaints and counter-complaints,” the report found.
Within the first four months of Cuffari’s appointment as inspector general, both he and Costello had already filed multiple allegations of misconduct against each other. In one instance described by the report, an official — Costello, per accounts from two sources — allegedly sought to trigger an investigation into Cuffari for a work trip to the Southwest border, which she claimed was illegitimate and being undertaken for personal reasons since he had family there. An unnamed DHS official is described as having refused to investigate the matter, concluding it “inappropriate.”
Then during an “icebreaker” portion of one meeting involving DHS OIG leadership, one senior official — Ouzts, according to two sources’ accounts — allegedly made “threatening” comments toward an unnamed official about a concealed weapon, according to a misconduct report filed in September 2019 and referenced by the investigation. (While the investigation corroborated the remarks, which it said evinced “poor judgment,” it found no evidence that they were intended to be threatening.)
The meeting was one of many instances of what the report broadly describes as “unprofessional behavior” so prevalent that it hampered not just the agency’s mission but even its ability to retain employees. “The work environment became so bitterly hostile that employees who left the agency during this period [after July 2019] cited dissension and tension as contributing factors for their departures,” the investigation found.
Costello was placed on administrative leave for alleged ethical violations, including holding herself out as the acting inspector general without proper authority, in February 2020; in June, the agency announced that she was no longer there. (Costello maintains that she was retaliated against for speaking out against Cuffari.) Ouzts resigned earlier this month, and Shaw resigned in May before joining the State Department, according to their LinkedIn profiles as well as two sources familiar with the matter.
“I am deeply concerned about IG Cuffari’s disclosure of sensitive personnel information,” an attorney for Costello, Eden Brown Gaines, said. (Cuffari did not disclose any personnel information to me.) “I believe IG Cuffari’s actions and the report from the ostensible investigation by a private firm will have a chilling effect on staff at DHS and other agencies who might be contemplating coming forward to expose wrongdoing,” Costello’s attorney said, adding that the report did not find any illegal conduct or policy violations. (The report does note that among the misconduct it substantiates, none of it violated the law.)
“The report speaks for itself,” Cuffari said in a phone interview, declining to address specifics but adding that the team conducting the inquiry “had free rein to determine how best to pursue the allegations we gave them.”
While Cuffari was appointed by Trump, DHS OIG officials with whom I spoke said that Cuffari was not a partisan. Cuffari is well-liked among OIG employees, who expressed appreciation for his willingness to investigate politically fraught issues like the use of solitary confinement in ICE facilities and DHS’s involvement in the administration’s crackdown on protests in Portland, which “never would have happened” under earlier leadership, as one employee told me.
“He has done some very good work since I left,” Kelly, the former acting inspector general, said of Cuffari. “I think he’s doing an excellent job.”
Another OIG official pointed to the increase in the number of audits, inspections, and evaluations completed by the agency despite the telework environment and other complications of the pandemic as evidence of Cuffari’s effectiveness. (DHS OIG completed 80 in the year 2020 versus 67 the previous year, according to the agency’s website.) Rep. Raúl Grijalva, an Arizona Democrat who works extensively on immigration issues (his district borders Mexico), told The Intercept that he thought the agency had become “much more professional.”
Katherine Hawkins, a legal analyst with the Project on Government Oversight, expressed similar praise for the increase in on-site visits to monitor ICE detention facility conditions, calling it “genuinely valuable.” But she was also critical of the the agency’s failure to protect undocumented witnesses who reported misconduct in ICE facilities and were subsequently deported, apparently in retaliation. Hawkins also criticized Cuffari’s decision to oppose the Government Accountability Office’s finding that top DHS officials Chad Wolf and Ken Cuccinelli had not been lawfully appointed; neither official received Senate confirmation. (Ironically, Cuffari is one of relatively few DHS leadership officials under the Trump administration to have been confirmed by the Senate.)
“As we try to uncover what DHS was up to over the last four years, you really want the strongest inspector general possible,” Hawkins said.
Shaw Drake, staff attorney and policy counsel on the border and immigrants’ rights for the American Civil Liberties Union of Texas, was broadly critical not just of Cuffari but the agency generally, which he said had “historically failed” to hold DHS accountable.
“Since 2019, the ACLU of Texas has filed 12 robust complaints with the DHS OIG, documenting numerous cases of abuse, from the ill-treatment of pregnant women in CBP custody, to persistent verbal abuse, to the unlawful rejection of those seeking protection at ports of entry,” Drake said. “While the inspector general has issued several reports documenting similar abuses, the agency has failed to hold agents accountable, make needed policy changes, or adequately address a persistent culture of cruelty.”
Irvin McCullough, a national security analyst at the Government Accountability Project, called the misconduct described by the report “troubling,” explaining that “wrongdoing in watchdog offices affects each and every whistleblower their offices are entrusted to protect.” Indeed, the investigation found that the conduct of senior agency members “exacerbated an atmosphere of mistrust and unprofessionalism to the detriment of the agency and its mission.”