- The Washington Times - Sunday, July 16, 2006

Federal authorities have subpoenaed bank records from a Chevy Chase nonprofit group over questions about its financial reporting for work performed for NASA, including the Goddard Space Flight Center in Greenbelt.

The U.S. Attorney’s Office in Maryland has sought financial records from the Alliance for Competitive Technology as part of a federal probe into whether the group made false claims to NASA, court records show.

The Justice Department and the attorney’s office filed papers in U.S. District Court in Greenbelt June 30 on behalf of NASA’s Office of Inspector General based at Goddard. The papers say the nonprofit group refused to fully comply with a subpoena, including a request for bank records and tax documents for 2004 and 2005.

The nonprofit is run by Stewart Nozette, who was a staff member at the National Space Council under President George Bush.

Mr. Nozette is a specialist in the Strategic Defense Initiative, or “Star Wars” program, and has held top scientific positions, including one with the U.S. Air Force’s Phillips Laboratory in Alexandria.

NASA’s inspector general also is investigating whether the nonprofit group actually incurred employee expenses that it reported, documents filed by the U.S. attorney’s office show.

An affidavit from a NASA investigator says the Alliance has produced two months of financial records, but that investigators are seeking several years’ worth of them.

The two months of bank statements show checks written from the Alliance’s business account for utilities, three mortgages, nine credit cards, the La Jolla Tennis Club, Mercedes Benz Credit Corp. and pool cleaning, the affidavit states.

A spokesman for the organization yesterday agreed to talk about the investigation on the condition that he not be identified.

The spokesman said, “There were no improper costs at all. And the services were all provided to NASA.”

“We’re trying to resolve this,” the spokesman said.

An attorney for the Alliance has stated in a letter to NASA’s Office of Inspector General that none of the checks produced in response to the subpoena is related to salary payments to Mr. Nozette.

The letter also states that the “mission and Dr. Nozette’s professional pursuits are virtually congruent. … Consequently, [the Alliance] funds spent for the benefit of Dr. Nozette can and are for the benefit of the [Alliance] and largely tax exempt.”

The Alliance spokesman said the nonprofit uses a different method to report financial data to NASA than to the Internal Revenue Service.

He said the Alliance voluntarily disclosed to the IRS that questions have been raised during the NASA investigation. He also said the group has yet to file its 2005 tax return and that it could, if necessary, amend prior years’ tax returns.

Story Continues →