DHS inspector general pays $1.2M settlement to former deputy

The Homeland Security Department’s embattled inspector general has agreed to pay a former top official $1.17 million as part of a settlement agreement, which will also overturn the employee’s firing. 

Jennifer Costello will now be formally noted as resigning from the IG’s office for personal reasons. DHS IG Joseph Cuffari fired the former deputy inspector general after commissioning a $1.4 million third-party investigation into Costello and two of her colleagues, which found she had engaged in divisive and unprofessional behavior. 

Costello quickly labeled that investigation as a “farce” that was launched in retaliation for her whistleblower claims that, among other things, Cuffari delayed a report into the Trump administration’s botched handling of its policy to separate migrant children from their families at the southern border. The former deputy IG had brought her complaints to Congress and to the Council of the Inspectors General on Integrity and Efficiency in 2019. Cuffari fired her in June 2020. 

The settlement, which was agreed to before the Merit Systems Protection Board and brought to light by the Project on Government Oversight, made clear the IG’s office did not admit any guilt or wrongdoing. Costello agreed to withdraw her appeals pending before MSPB as well as other adjudicative forums, including the Office of Special Counsel. 

“The agency expressly denies that it, its employees, representatives, or agents violated any law, regulation, contract, or employment practice regarding its treatment of [Costello] or discriminated against, retaliated against, or harassed her in any way,” the settlement stated. 

Cuffari, a Trump appointee and former aide to Republican Arizona Govs. Doug Ducey and Jan Brewer, has faced significant criticism throughout his tenure, including for reported ethical issues earlier in his career. He has also been subject to allegations that he delayed and mishandled reports on sexual assault and the Jan. 6, 2021 attack on the Capitol.

Democrats have accused Cuffari of obstructing their investigations. Cuffari has pushed back on each of the allegations. The Council of the Inspectors General on Integrity and Efficiency is investigating the IG’s office, causing Cuffari to launch a lawsuit against the watchdog group. 

POGO previously published a letter signed from anonymous members of the DHS IG’s staff calling for Cuffari to step down, saying he had “fallen short” of his obligation to maintain integrity and independence. Cuffari recently admitted to Congress he regularly deleted text messages from his government phone, which many key Democrats called the last straw in pushing for his resignation or firing. 

A previous DHS inspector general came under fire a few years prior when acting IG Charles Edwards, who served under the Obama administration, was found to have engaged in inappropriate socializing and sharing of draft documents with managers of the employees he was investigating

In 2020, Cuffari hired the law firm Wilmer Hale to review the conduct of Costello and two other employees. It concluded its work, after billing the government $1.4 million, in December 2020, months after Costello was fired. The disagreements between Costello and Cuffari ran deep, POGO reported, as their brief overlap resulted in personality clashes and frequent accusations of misconduct in both directions. 

“Legitimate complaints must be investigated,” Costello told the watchdog group. “But Mr. Cuffari chose to fire me without investigation and then hire a private law firm to drum up evidence after the fact. That would be unconscionable even if I hadn’t made a dozen protected disclosures.”