The VA's Secret Clouds Another Scandal at Veterans Affairs By David Bellavia

The US Department of Veterans Affairs has had better days. Plagued by scandals involving long wait lists for veteran patients, exaggerated claims by their own Secretary’s military service, complete administrative incompetence, and Congressional reporting fraud, the agency may soon be consumed by another: a husband and wife scam.

She works for the department and runs a multi-million dollar community-focused project; he's a private consultant selling services to the same communities. Worse: he applied for a patent experts say was written to read directly on the program his wife designed.

How the power couple works separately in the same space has caused quite a ruckus – and a US Navy combat vet was fired for trying to blow the whistle on it.

Rosye Cloud, Senior Advisor for Veteran Employment at the Department of Veterans Affairs (VA), helped Secretary Robert McDonald announce a new VA initiative in May to reconnect veterans to their communities, focused especially on employment. A close associate of Michelle Obama with very limited experience with veterans issues before she joined the White House in 2012, she has been assembling this program since she first left the First Lady’s office for the VA in 2013.

And, let’s face it: the focus is well placed, because unemployment leads to terrible things – especially among returning combat vets.

Unfortunately, the grand announcement came after Cloud disassembled a successful jobs program and rebuilt one that doesn’t work. It is also troubling that her new initiative requires the expertise of private sector software experts like her husband, Chad Cloud, president of Washington, DC-based Software Performance Group.

Veterans Employment Programs

With around 21.4 million veterans in the United States, the VA is tasked with helping veterans maximize their economic competitiveness. At the center of this mission are jobs – helping veterans find one and keep it. Since the turn of the century, untold millions has been poured into employing veterans.

Founded in 2007, the President’s Commission on Care for Returning Wounded Warriors recommended creating a Web portal where service members, veterans and their families could access clinical and benefits information. From there, efforts moved online.

And for good reason: Between 2004 and 2011, 29 percent to 53 percent of Veterans faced a period of unemployment within 15 months of separation. Veteran joblessness reached an Obama administration high in January 2011: The non-seasonally adjusted jobless rate reached nearly 12.1 percent for Global War on Terror veterans when the national rate was 6.2 percent.

The White House reacted quickly. By 2012, the online platform declared a Department of Defense “Best of Breed” with a 85 percent win percentage was organizing private sector interviews for active duty military via Web, resulting in immediate job offers. The goal was as earnest as it was simplistic: Hire soldiers while they are serving so they are not unemployed upon separation.

At one Marine hiring event, 45 percent of participants received civilian job offers on site. Offer-to-interview ratios were 52 percent on average - approximately 10-times more than traditional models. This was vital success; with the mission in Iraq ended and units cut back in Afghanistan through sequestration, the summer of 2012 produced over 5,000 veterans leaving active duty each week.

By April 2013, veterans employment was on the rise and the First Lady held an Annapolis press conference with John Chambers, CEO of Cisco, the technology platform behind the successful hiring engine. The two talked of a forward-looking partnership to lift veterans out of unemployment. They highlighted private sector companies in attendance, all eager to get their hands on this generation’s best and brightest in uniform.

In August of 2013, everything changed - Rosye Cloud left her position as White House Policy Director of Policy for Veterans, Wounded, and Military Families to run veterans employment efforts in a newly-created position with the VA.

Fast forward one year: In an April 2014 speech at Fort Campbell, Kentucky, the First Lady announced that eBenefits, the portal created in 2007 to track benefits for all generations of veterans, would be changed to also help veterans connect with employers – a project of Rosye Cloud. From that day forward, the Veterans Employment Center was not just a veterans benefits status portal any longer. Veterans would now post their resume and learn about jobs – a distinctly different mission.

The successful employment platform that was turning heads on and off post in 2013 was never heard from again.

“I ran a transition support cell for the USMC in a Wounded Warrior Regiment,” one field grade officer recently told me. “The new system completely took what worked in the past – putting Marines with skills in front of employers who could see in person their skills set through video conferencing – to essentially a giant sterile job posting Web site. No human interaction. No way to even prove if the individual is actually a veteran.”

“To pack members into the system, the VA started to include dependents. Not that this doesn’t help the veteran’s family – it does,” a Fort Hood Army Career and Alumni Program civilian told me. “But we had a system on post, part of ACAP, where the Army had short term soldiers in front of employers. Now dependents are invited into the same pool? They don’t understand the acronyms, the system. It’s messed everything up.”

Not one veterans employment expert I talked to had anything good to say about the new system, or Rosye Cloud.

The Cloud’s Tag Team

On August 14 and 15, 2014, Rosye Cloud attended a meeting in Norfolk with city officials interested in tapping the millions she was offering regional centers to coordinate her blooming veterans employment plan. Capt. John Andrews (USN-Ret.) was there, too, but not because she wanted him there. Andrews, hired in 2012 as a special assistant to Norfolk City Manager Marcus Jones to coordinate veterans affairs for the city, wasn’t Cloud’s choice for the position. She wanted somebody else.

Andrews is a Boy Scout, a pilot highly regarded by his peers who concluded his 29-year career as an aide to a top Pentagon Admiral. He was a catch for the City of Norfolk and enjoyed his six-figure job coordinating veterans affairs in the Hampton Roads, an area brimming with former military.

Soon after Andrews was hired, someone slipped Jones information that indicated Andrews had been convicted for driving under the influence while in the Navy. As a result, Andrews was confronted and asked why he had not revealed that information.

Andrews told him the truth: He had not been convicted of a DUI. As a result of an honest response at checkpoint, he had been charged. In the end, Andrews was not convicted; his documented blood alcohol level was well below the legal limit, the charge was dismissed and all records were to be expunged. When the city manager found out the truth, he kept Andrews at his post.

However, someone had clearly leaked a false accusation to a City of Norfolk staffer who then relayed it to Jones. That information only existed in confidential Navy personnel records and, protected by the Privacy Act, was nearly impossible to obtain for anyone outside the most senior echelons of the US government. Months later, Andrews suspected Rosye was the leaker from her post at the White House – something he is trying to verify.

Regardless, as the Norfolk veterans working group met with Rosye for the second day to discuss a project that would bring millions to the city to engage veterans, her cellphone rang. It was her husband, Chad. According to Andrews, Rosye said her husband was right outside the door and heard her voice – he was there to meet the same group and pitch them his software and services to help coordinate veterans employment in Norfolk.

Rosye got up to leave as Chad entered the room. This troubled Andrews, who had spent years in Navy procurement and knew a conflict of interest when he saw one. Later, he asked Rosye in an email if her husband was working on her project. On November 24, 2014 - the next working day - he was fired.

Andrews was shocked when he lost his job. Later, he obtained emails that indicated Rosye knew he was about to be fired before he did – and offered to help find his replacement. He took his grievance to city government and Veterans Affairs officials, to no avail.

“I'm driven by my values; these people don't share my values,” he told me. “Today I'm focused on: What the heck did I do wrong?”

Did Rosye Cloud demand Andrews be fired? Only legal action will tell, since Andrews cannot get a response to Freedom of Information requests he’s lodged with Veterans Affairs.

The Cloud’s live near Washington, DC, four hours from Norfolk. For Chad Cloud to be in the same zip code as his wife – in the same building, in the same room - while she was conducting VA business regarding software and servers used for veteran employment – the same occupational specialty her husband trolls for government contracts - borders on outrageous. For Rosye Cloud to be actively offering programs and funding to open up the marketplace hours before her husband pitches civic leaders his software to fulfill the mission of those federally-funded programs is as brazen as it is unprecedented.

This alone is reason enough to question why Rosye Cloud still draws a six-figure salary from the federal government. No way this Bonnie and Clyde of veterans tax dollars would try something like this again, right? Wrong.

Soon after the August Norfolk meeting, Rosye also visited the Chicago-area military and veteran community. She held similar meetings to the one she attended in Norfolk – coordinating what would be a multi-million dollar boon to the area. And, like Norfolk, Chad just happened to be there at the same time. Perhaps this time they were better able to avoid each other – but only a Chicago-based veterans transition staffer would know if he had meetings, too. I hope they’ll come forward.

According to insiders, we also know Rosye visited Joint Base Lewis McChord (JBLM) in Washington State on October 21, 2014. There, Chad Cloud has a relationship with another software vendor engaged in JBLM veterans transition contracting. We do not have access to documents that might prove Chad was there in October with Rosye. Certainly, a staffer in the JBLM veterans transitions operation would know and should come forward to help shed more light on this issue.

The Cloud Patent

Chad Cloud’s company sells software that helps veterans transition to new careers. Coincidently, or not, that’s exactly what his wife is directing with the VA. And, as his wife built up a federal veterans employment initiative that would require significant software programming, he filed for a patent and took a highly unusual step to ask the Patent Office to delay publishing it. This would keep it completely secret.

It typically takes many weeks, if not several months, to complete a strong patent application - especially in the controversial software patent space. Chad Cloud filed his patent May 27, 2014; he was likely working on it since at least early in the year, probably in 2013 – when his wife arrived at the VA.

According to experts, patents aren't just issued on the merits today. They're often issued to the connected - and denied on behalf of the connected. With his wife’s White House connections, Chad Cloud is likely on his way to patent approval.

Thomas Woolston is a patent attorney, an inventor and was the plaintiff in the landmark MercExchange v eBay patent infringement case decided by the US Supreme Court in 2006. An Air Force and Central Intelligence Agency veteran, he agreed to take a close look at the Cloud patent for me.

“I've reviewed hundreds - if not thousands - of patent applications, many in the software space. It certainly appears this pending patent was written to read specifically on the Veterans Administration's online jobs initiative,” Woolston said. “In fact, in the intellectual property arena, this patent is called a picture patent – a patent on it’s face that looks very narrow and therefore is commercially valueless unless there’s a very specific program requirement that only this patent can fulfill.”

“Without question, in my view, the VA program requirements and the patent claims were drafted to read on each other,” he said. “This patent would give Chad Cloud the exclusive right to conduct much of the online portion of the VA initiative.”

Pillow talk can be powerful – and profitable. Rosye’s program took root during those months her husband’s patent was kept secret; the cloak was just lifted from his patent application in February 2015. With his name front and center on the invention, VA insiders scowled – but nothing happened.

Chad Cloud told one VA contractor “the [VA’s Veterans Employment Center] will be an ally… and of course they can’t violate our patent.” Clearly, Rosye's VA program, slated for hundreds of millions of taxpayer dollars, could not succeed without employing her husband’s intellectual property. And, as Woolston told me, it appears that was the plan all along.

One-off software consulting contracts with regional vet centers would certainly make the Cloud's wealthy. Monetizing the Cloud patent with the VA through the life of Rosye's program would make their descendants rich for generations - but only if all other VA employment programs were killed in their infancy. And they were, by his wife, who designed and launched a program covered by his patent. It would also help if other successful solutions outside the VA were starved to death. And they are.

Today, no non-VA programs appear on the agency Web site; they never even get a mention in VA programming. The American Legion, NASCAR, dozens of states, and many other groups are doing wonderful and effective things to end veteran joblessness. You would never know it because, if you ask any VA employee in her division – especially the ones who have left in disgust – everything revolves around Rosye Cloud. 

This article first appeared at the popular military blog

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