Federal Judge Temporarily Blocks Trump Administration's Freeze on Federal Grants and Loans

WASHINGTON - Jan. 29, 2025 - PRLog -- In a significant legal development, U.S. District Judge Loren L. AliKhan has issued a temporary injunction against the Trump administration's directive to halt federal grants and loans. The administration's plan aimed to pause disbursements across various programs to reassess funding priorities. This move faced immediate legal challenges from multiple organizations, citing potential adverse impacts on essential services.

40-year quality assurance expert Daryl Guberman has expressed concerns about the implications of such funding freezes, particularly regarding non-profit organizations like the American National Standards Institute (ANSI), the ANSI National Accreditation Board (ANAB), and the National Institute of Standards and Technology's Manufacturing Extension Partnership (NIST-MEP) a division of the Department Of Commerce.

Conflicts of Interest in Federal Oversight

Guberman emphasizes that ANSI-ANAB a non-profit 2022 approximate revenue was $70,000,000 and receives about 8% of its total income from the federal government. It may not look that substantial but reviewing $5,600,000 allows maintaining close associations with various federal agencies, including the Department of Justice (DOJ), Department of Homeland Security (DHS), Department of Commerce, and the Food and Drug Administration (FDA). He points out that these organizations also have major corporations on ANSI-ANAB boards, such as Lockheed Martin, Boeing, Pfizer, and Johnson & Johnson, some of which have faced significant quality control challenges. An issue that arises from t NIST is Gordon Gillerman Executive Director Of Standards who represented NIST on the ANSI-ANAB board receiving $120,000 plus his federal salary. Philip Mattson-DHS Executive Director Office of Standards who represented DHS on the ANSI-ANAB board. Philip Mattson received $262,814 in conjunction with his Federal Salary.

The employee from the Department of Homeland Security (DHS) and the National Institute of Standards and Technology (NIST) are reportedly receiving compensation from the ANSI-ANAB a private non-governmental, non-profit organization, in addition to their federal government salaries. This raises concerns because these federal employees, in their roles at DHS and NIST, are involved in critical regulatory and oversight functions. By being paid by ANSI-ANAB, which is influenced by private industry interests, they may face conflicts of interest that undermine impartiality and public trust in their decision-making processes.

This arrangement could potentially violate federal ethics laws, particularly:

1.         18 U.S. Code § 208 - Acts Affecting a Personal Financial Interest: This law prohibits federal employees from participating in official matters that could affect their personal financial interests or the financial interests of organizations they are affiliated with, such as ANSI.

2.         5 U.S. Code § 5536 - Outside Employment and Employment Restrictions: This law places restrictions on outside employment for federal employees, particularly when the secondary employment could conflict with their duties or involve private organizations that may create a conflict with their government responsibilities.

Such dual compensation could lead to concerns over regulatory capture, where federal employees' decisions are unduly influenced by private interests, as well as lack of transparency in how regulatory processes are conducted.

In 2019, Guberman brought to light concerns regarding laboratory certifications associated with ANSI-ANAB. This led to a contentious interaction with then-ANSI Chairman Russ Cheney, who left an inappropriate voicemail for Guberman breaking ANSI- ANAB CODE OF CONDUCT   ANSI Code of Conduct  voicemail here: https://www.youtube.com/shorts/DaEhIFcG0J4  . Despite reporting the incident to ANSI's leadership, the response was dismissive here: https://entrepreneursbreak.com/1-yr-anniv-qa-expert-daryl-guberman-issues-formal-deposition-on-ansi-anab-mantra-half-nut-fck-u-2019.html

2022- Guberman applied for an ANSI-ANAB "Director at Large" position. He handed in a 54 page document with 16 letters of recommendation. He also had to answer a questionnaire which had 9 questions as to what Daryl Guberman can do for ANSI-ANAB. At the end of the  questionnaire was a thank you for applying "Russ Cheney Nominating Chairman"

TO THE READER" DO YOU THINK Russ Cheney Nominating Chairman WOULD HAVE CHOSEN DARYL GUBERMAN?

Financial Concerns Regarding NIST-MEP

Guberman also highlights that NIST-MEP centers, designed to support small and medium-sized manufacturers, receive both federal and state funding. He notes that a significant portion of this funding is allocated to management salaries and bonuses. For instance, in 2015, an analysis revealed that approximately 64.85% of NIST-MEP's budget was directed towards management compensation. Connstep received $4,200,000 state and federal government where $2,750,000 went to management and personnel and $1,500,000 was left to the approximately 5000 manufacturing companies. This meant if the money was divided equally each would receive $300 not even enough to purchase tooling!

According to NIST, in fiscal year 2023, the MEP National Network interacted with more than 36,000 manufacturers, leading to $16.2 billion in new and retained sales, $2.9 billion in cost savings, $4.8 billion in new client investments, and over 107,100 jobs created or retained.

However, a 2024 report from the Office of Inspector General (OIG) found that NIST overstated MEP's economic impacts to Congress and other stakeholders. The report highlighted inadequate oversight of the MEP economic impact reporting process, resulting in inaccurate and unreliable data. A sidebar the NIST-MEP's overstated economic impact a former employee of NIST-MEP wrote Guberman and said "Relationships and co-funding of other non-profit agencies was jokingly called "money laundering". MEP would become a sponsor for other nonprofits, give them money and then they would give us money.

The statement regarding the National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) engaging in co-funding and financial exchanges with other non-profits raises several potential federal legal violations, depending on the intent and execution of these transactions.

Potential Federal Laws Violated

1. Anti-Money Laundering (AML) Violations – 18 U.S. Code § 1956 (Money Laundering)

• If NIST-MEP was intentionally moving funds between non-profits to obscure the source or purpose of the money, this could constitute money laundering, which is a felony under 18 U.S. Code § 1956.
• The key elements of money laundering involve:
• Conducting financial transactions with proceeds of unlawful activity,
• Intent to conceal the source, ownership, or control of the funds,
• Engaging in transactions to evade financial reporting requirements.
• If this "co-funding" mechanism was deliberately used to bypass restrictions or accountability measures, it could meet the legal definition of money laundering.

2. Fraud Against the U.S. Government – 18 U.S. Code § 371 (Conspiracy to Defraud the United States)

• NIST-MEP receives federal funding. If it used its nonprofit status to improperly cycle money between entities in a way that deceived federal agencies, grantors, or auditors, this could be considered conspiracy to defraud the U.S. government.
• Under 18 U.S. Code § 371, it is illegal to conspire to impair, obstruct, or defeat a lawful government function, including financial oversight and grant accountability.

3. False Claims Act – 31 U.S. Code § 3729 (Fraud in Federal Grants & Contracts)

• If federal grant money was misused, misrepresented, or funneled between non-profits to fabricate expenses or justify continued funding, it could violate the False Claims Act.
• Example: If one non-profit received federal grant money, transferred it to another non-profit, which then sent it back to the original entity under a different pretense, that could be considered fraudulent misrepresentation of funds.

4. Misuse of Federal Funds – 2 CFR Part 200 (Uniform Guidance for Federal Grants)

• Federal grant money must be used for its intended purpose. If NIST-MEP was cycling money through other organizations to create an illusion of new funding, this could violate federal grant regulations under 2 CFR Part 200, which mandates:
• Proper tracking and reporting of federal funds
• Prohibition of conflicts of interest in grant management
• Restrictions on sub-awards and pass-through funding mechanisms
• If these transactions were not disclosed properly, it could result in federal funding clawbacks ( act of recovering money), penalties, and criminal liability.

5. Tax-Exempt Violations – IRS Regulations on 501(c)(3) Non-Profits

• 501(c)(3) organizations are prohibited from engaging in self-dealing and private benefit transactions.
• If NIST-MEP or its affiliates were cycling money between non-profits in a way that benefited insiders or circumvented financial oversight, they could face:
• Loss of tax-exempt status
• Civil fines for improper financial transactions
• IRS audits for non-compliance with charitable funding laws

Key Questions for Investigation

• Was this co-funding mechanism intentionally designed to conceal financial movements or misrepresent funding sources?
• Did this practice result in misleading financial reports to the government, grant providers, or the public?
• Was federal grant money misused, unallocated, or recycled in violation of grant regulations?
• Were these transactions properly disclosed in IRS Form 990 filings, grant reports, or financial audits?

If this practice was intentional, systemic, and deceptive, it could lead to criminal investigations under federal fraud, money laundering, and grant misuse statutes. Would you like help refining these concerns into a formal request for investigation?

Given these concerns, Guberman urges a thorough review of the financial practices of these non-profit organizations to ensure that federal funds are utilized effectively and transparently. He also calls for increased accountability, especially when federal employees hold positions within these entities. He has offered his services to spearhead the review and remove it from the federal agencies and corporations an assist Elon Musk's Department of Government Efficiencies DOGE.

A Caution to President Trump

Guberman warns President Trump that the relationships and memberships of federal agencies and corporations on ANSI-ANAB board including NIST is multifaceted due to the deep-rooted conflicts of interest within these federally funded entities like NIST-MEP.

• Department of Justice (DOJ) Conflicts: The DOJ is both a member and a customer of ANSI-ANAB, creating a significant conflict of interest. The DOJ pays these organizations for services that they, in turn, oversee, raising concerns about biased regulatory enforcement and compromised oversight.
• NIST-MEP's Anti-Competitive Practices: The National Institute of Standards and Technology (NIST) Manufacturing Extension Partnership (MEP) operates 50 centers across the United States. However, these centers only recommend ANSI-ANAB to manufacturers and do not open their facilities to competition or will they do to NIST having a paid board member. This practice violates the Sherman and Clayton Acts by engaging in anti-competitive and anti-trust activities and monopolistic functions. In fact, a former NIST-MEP employee stated on their LinkedIn page Connstep non-profit (NIST-MEP) "We're the largest and most well-connected organization of our type in Connecticut". These words sound like a mobster of the 1920's

Guberman stresses that these conflicts and monopolistic structures, interlocking directorates must be addressed immediately to prevent further erosion of regulatory integrity and fair competition. He urges President Trump to take decisive action to eliminate these improprieties and ensure transparency in federal funding and oversight. Guberman also cautions President Trump the ABA American Bar Association also being involved with ANSI-ANAB.

The temporary halt of the funding freeze by Judge AliKhan provides an opportunity to address these issues comprehensively. As legal proceedings continue, stakeholders such as the Department of Commerce- NIST and NIST-MEP should be scrutinized by DOGE.

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