WASHINGTON – A high-ranking Homeland Security Department official under investigation for falsifying her academic credentials was investigated for “mismanagement” at her previous job at the Labor Department, internal records obtained by WorldNetDaily reveal.

Laura Callahan, Homeland Security’s deputy chief information officer, was placed on paid leave in June while officials investigate her academic credentials. The advanced degrees she lists on her resume and application are from a diploma mill.

Laura Crabtree Callahan testifying before the House
Government Reform Committee in the Project X White House e-mail scandal

As WorldNetDaily reported Wednesday, Callahan’s secret clearance has been revoked, although she has not been terminated.

Prior to joining the new department earlier this year, she headed the Information Technology Center at the Labor Department, where she supervised some 60 federal employees and 65 contractors.

In December 2000, Labor’s inspector general opened an investigation into several complaints filed by Callahan’s employees alleging “waste, mismanagement, fraud and abuse.”

“On Dec. 14, 2000, the Office of Inspector General received allegations of waste, mismanagement, fraud and abuse in the Office of the Assistant Secretary for Administration and Management’s Information Technology Center,” said Labor’s Assistant Inspector General for Audit John J. Getek on pages one and two of his Aug. 16, 2001, report. “The allegations concerned personnel management, procurement and computer security.”

The complainants accused Callahan of favoritism in hiring and promotion of individuals she knew from her previous job in the White House, where she had been the subject of yet another investigation. Callahan was accused by computer contractors she supervised there of threatening to jail them for exposing a “glitch” in White House computer archives which led to the loss of more than a million e-mails covered by subpoena in several federal investigations of Clinton administration scandals.

The inspector general found that Callahan personally knew some of the computer specialists she hired, at least one of whom was underqualified.

Also, “recruitment bonuses were inadequately justified,” Getek noted on page 3 of his 16-page confidential report, which was redacted to protect the privacy of complainants and other employees.

He also found that Callahan’s management practices led to “low morale” in the center.

“Lastly, from our interviews with ITC staff, we concluded that the ITC director’s management style was very different from that of the previous director,” Getek said. “Low morale in ITC is evident.”

He advised: “Morale in ITC must be improved.”

Laura Crabtree Callahan

White House contractors and career employees who worked directly with Callahan also brought up morale issues in interviews with WorldNetDaily.

The Labor report was placed on file with the Office of Personnel Management, which conducted the background check of Callahan for her Homeland Security Department clearance.

Callahan’s boss at the time, Edward C. Hugler, deputy assistant secretary for administration and management at Labor, responded to the inspector general’s report by saying he took “seriously the management concerns you have raised, and we intend to address these matters.”

Still, he defended Callahan against the charges of cronyism by arguing that she was in regular contact with a number of computer specialists outside Labor. And therefore, he said, it was “not surprising that she would know a number of applicants.”

A former Labor Department employee who worked directly with Callahan, however, maintained she gave one of the friends she hired from the Clinton White House a $25,000 signing bonus, and “then sent him to seven weeks of training so he could learn what he was hired to do.” Callahan also gave him a $10,000 retention bonus and a promotion, said the source, who requested anonymity.

Phone calls to Homeland Security and Callahan’s lawyer were not returned.

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