State Dept. contract officer steers $52 million to secret husband, daughter

Brian Collinsworth and Kathleen McGrade on their wedding day (MySpace)

Kathleen McGrade and Jennifer Herring (MySpace)

Smithey said Herring rarely did any work for Sterling Royale. He said Collinsworth and McGrade “used her” because she had security clearance and because it helped them classify the business as “woman-owned.” He said Collinsworth really ran the company.

“When I was with her, she really didn’t do anything,” Smithey said of Herring. “Every 15 days or so, she would go to D.C. [from their home in Stafford, Va.] and have a meeting with her mom and stepfather. Then, she wouldn’t even touch anything after that.”

It’s unclear whether McGrade told her ethics supervisors at the State Department that she was directing tens of millions of dollars in contracts to a company owned and operated by her husband and daughter. State Department officials won’t comment on the specifics of the arrangement, confirming only that they are investigating the matter.

“The Department of State has referred this matter to the Office of the Inspector General,” Laine wrote in an email to TheDC.

Melanie Sloan of Citizens for Responsibility and Ethics in Washington says McGrade could be criminally charged if the Inspector General’s investigation finds that she didn’t tell her ethics supervisors about her family relationships with officers of a company receiving public money on her watch.

“In the absence of disclosure and a written determination by the agency, an executive branch employee may not use her position to make decisions that financially benefit family members,” Sloan told TheDC. “The failure to disclose the conflict of interest can be criminally prosecuted.”

If McGrade’s ethics supervisors knew about her familial connections at Sterling Royale Group, rules would require them to sign an ethics law waiver in order for those contracts to proceed. State Department officials refused to confirm whether or not McGrade received such a waiver.

Sterling Royale describes itself as a company that “helps development and project owners succeed by controlling thousands of project variables, based on the collective experience of our staff.” According to official company documents, though, Sterling Royale employs only three people, two of whom are Collinsworth and Herring.

The other is a man named Steve McIlvaine. It’s unclear if McIlvaine is aware of, or involved with, any improper or unethical conduct. When TheDC contacted him, McIlvaine said he wasn’t sure what was going on. He has not responded to subsequent requests for comment.

The 43 contracts Sterling Royale procured from the State Department’s Overseas Building Operations, totaling $52,095,333, covered various design and construction projects beginning in May 2009. Sterling Royale continued to receive contracts through June 15 of this year.

Many of these contracts were for construction of “commercial and institutional building” projects in foreign countries. Others were for “site visit[s]” and “design services.”

Publicly available documents show the contracts were for embassy security, construction and maintenance. The documents don’t offer specifics about what services Sterling Royale actually performed. Only the State Department could provide details on each individual project and its status, several knowledgeable sources told TheDC.

State Department spokespersons also won’t confirm or deny whether McGrade has continued to disburse federal dollars since The Daily Caller approached them with information about her apparent conflict of interest.