Contractor Whose Company Got Nearly $500M in IRS Contracts Says He Didn't Have Personal Relationship With IRS Staffer

February 21, 2013 - 6:35 PM

Darrell Issa

House Oversight and Government Reform Chairman Darrell Issa, R.-Calif. (AP Photo)

(CNSNews.com) – Braulio Castillo, owner of Signet Computers, told CNSNews.com today he did not have a personal relationship with any Internal Revenue Service employee after the Associated Press reported that the House Oversight Committee was investigating whether a personal relationship between an IRS employee and Castillo "produced a series of government contracts worth about $500 million."

“Do you have a personal relationship with somebody there at IRS,” CNSNews.com asked Castillo on Thursday.

“Well, no,” Castillo said.

In a letter to acting Treasury Secretary Neil Wolin, House Oversight Chairman Darrell Issa said, “Witnesses interviewed by Committee investigators identified [name redacted], director of IT Procurement at IRS, as the contracting official funneling contracts to Signet Computers. [Name redacted] and Signet Computers owner Braulio Castillo allegedly have a personal relationship that dates back several years,” Issa’s letter states. (See Letter.pdf)

The letter asks for documents relating to Signet, claiming that whistleblowers had told the committee that the procurement employee in question said that if they wanted to receive federal contracts, they had to talk to Castillo.

“The fact that Signet Computers was able to secure federal contracts worth a half-billion dollars in a matter of months, despite having no track record of past performance, raises many questions,” Issa said in the letter.  (See Letter.pdf)

CNSNews.com asked Castillo, “Was there anything improper that went on between your company and the procurement agent that’s talked about in this [Issa’s] letter?”

“The short answer is no,” Castillo said.

IRS Contractor Denies Having Personal Relationship with IRS Employee in $500 Million Contracting Investigation

(AP Photo)

In his letter to Treasury, Issa said of the alleged personal relationship between Castillo and the IRS employee: “At best, this is a conflict of interest that runs afoul of Part 3 of the Federal Acquisition Regulation. At worst, the IRS may have a situation in which a contracting official is awarding sole source contracts based on false justifications, or receiving kickbacks in exchange for government contracts.”

Issa’s office told CNSNews.com that it had no comment on Castillo’s assertion that he did not have a personal relationship with any IRS employee.

Castillo said he had not seen Rep. Issa’s letter, adding that he had only become aware of the Oversight Committee investigation Wednesday night. Castillo said that Signet had retained legal representation and would “cooperate fully” with any investigation.

“We’ll cooperate fully when they reach out to us, when they contact us” Castillo said. “We’ll cooperate fully.”

The Treasury Department’s Inspector General for Tax Administration--one of the agencies contacted by whistleblowers according to the letter--confirmed to CNSNews.com that it was aware of Rep. Issa’s letter but could not confirm whether it was conducting its own investigation. The IRS is a division of the Treasury Department.

Treasury recently awarded Signet its 2012 Small Business Contractor of the Year award.

Signet is an IT services and equipment provider offering network design, internet security, and web development services, according to its website. The company’s main office is in Washington, D.C. and it also lists an office in Leesburg, Va., according to its website. Castillo confirmed to CNSNews that it provides IT support and equipment services to the IRS.