State Dept. Drops Analyst, Probes Contract Awards

The State Department has dismissed an analyst who may have helped award millions in contracts to a company run by her husband and daughter, an official said Wednesday. An internal investigation into possible wrongdoing was under way.

The department takes the allegations against Kathleen McGrade “very seriously,” spokeswoman Heide Bronke Fulton said.

The story was first reported by the news website The Daily Caller. It reported that McGrade, working for the company ATSG of Arlington, Va., participated in awarding more than $52 million in contracts to the Washington-based company Sterling Royale Group. The website said Sterling Royale is run by McGrade's husband, Brian Collinsworth, and daughter, J.L. Herring.

“Upon learning of the allegations, the department immediately relieved Ms. McGrade of her responsibilities,” Bronke Fulton said. “Subsequently, the department instructed her company that her employment at the department is terminated.”

Bronke Fulton said McGrade was a management analyst, not a contracting officer, and only supported the contracting process.

An ATSG employee declined to comment. A message left with Sterling Royale wasn't answered.

The Daily Caller reported that McGrade helped Sterling Royale win 43 taxpayer-funded contracts in recent years, but that she and her husband kept their relationship secret from the State Department and others. It said Collinsworth acts as Sterling Royale's vice president, while Herring is its president and CEO.

The news website quoted Collinsworth as denying being married to McGrade. But it reported that the two co-own a Virginia house, live together in a Washington apartment and have pictures posted of them together on Collinsworth's MySpace profile, which declares them “happily married.” It said McGrade also owns a boat named “Sterling Royale.”

The State Department stressed that it didn't pay McGrade's salary. It was paid by ATSG. But officials declined to say if McGrade still works for ATSG, which maintains a relationship with the department.

Sterling Royale's contracts dealt with design and construction projects that began in May 2009 and carried through June 15, The Daily Caller said.