Watchdog: SEC wasted $1 million on data storage technology dealings with Apple

“The U.S. Securities and Exchange Commission wasted $1 million on virtual data storage it bought in 2008, the agency’s internal watchdog said, part of a series of investigations into the agency’s procurement practices,” Sarah N. Lynch reports for Reuters.

“The findings could provide ammunition to Republican lawmakers seeking to deny extra money for the SEC, concerned by the U.S. budget deficit but also looking to starve regulators of funding to implement the Dodd-Frank financial overhaul law,” Lynch reports. “In the December report, Kotz investigated the SEC’s acquisition of data storage technology, which included items from Apple Inc. and virtual storage provided by a firm called Cloverleaf Communications, later acquired in 2010 by Dot Hill Systems. The report, dated December 14, 2010, was obtained by Reuters through a Freedom of Information Act request.”

“According to the investigation, an Apple salesman convinced the agency that Cloverleaf could provide a cheaper solution to the agency’s data storage and backup woes,” Lynch reports. “Although there were other companies that offered similar products, Kotz said the SEC violated federal contracting procedures by securing a no-bid contract with Cloverleaf, a company with which the SEC had no experience. Kotz said the contract actually proved ‘to be more expensive than other, better-known and less risky alternatives.'”

Lynch reports, “He also found the SEC improperly shared budget information with Apple and went ahead with purchases before getting proper approval and before performing reviews. Representatives of Dot Hill, Apple and the SEC did not immediately respond to requests for comment.”

Read more in the full article here.

MacDailyNews Take: Ooh, one miilllliion dollars! We blame Dr. Evil.

We’re not excusing or condoning any waste, but please: $1 million dollars out of the total money wasted annually by the U.S. government is akin not to a drop of water in a bucket, but to one molecule of H2O in the Pacific Ocean. We wouldn’t be the least bit surprised if the government’s “series of investigations” into the matter cost more than the amount that was “wasted.”

This seems more like an attempt to smear Apple than anything else.

31 Comments

  1. I agree with the MDN take. Apple allegedly suggested an inferior product or service, but no one held a gun to the SEC ‘s heads forcing them to go with it sight unseen.

  2. sources say agents from the SEC were hanging around Apple parkade late at night dressed in baggy pants and baggy hooded sweaters, and the apple employee involved was wearing a ballcap crooked, and wearing white apple headphones he MAY or MAY NOT have purchased at an Apple retailer…

  3. This from Republican fucktards who think women’s health is a waste but cutting subsidies for the obscenely wealthy oil industry is “new taxes”. That 1984 Doublespeak people routinely worry about? The US right wing has been using it for decades.

    1. … there’s that disturbance in the field again – it’s amorphous, fog-like, almost palpable, like depression or a migraine, like a demonic attack….

    2. Republicans don’t think women’s health is a “waste”, Bozo. They do feel, however, that using their tax dollars to fund killing babies in the womb and calling it “women’s health” is wrong.

  4. This seems more like an attempt to smear Apple than anything else.

    Yes. Because the entire world is against Apple. It’s a massive conspiracy.

    No it isn’t.

    It’s a report by an internal watchdog. It says someone made a bad spending decision. The same kind of bad purchasing decisions that governments make around the world every day of the year.

    And it will be leveraged by people who have worked tirelessly to prevent the SEC from doing any kind of job for the last decade or so.

    The budget of the SEC is $1.258 billion. This is $1 million. Which is around 0.08%. Call me when people get excited about the Department of Defense doing something stupid with 0.08% of its budget or being encouraged by politicians of either stripe to buy a jet engine they don’t want.

  5. It isn’t what they spent or over spent on data storage. it is what is the savings over what they were already spending.

    So what was saved over the existing SEC’s data storage when it was farmed out? Were they spending $2 million or $5 million a year at that time? And if some one under bid Cloverleaf and it took them another half year at say $2 million a year then it would cost more that all that was spent to go with Cloverleaf.

    If you are on fire, do you shop around for the cheapest bottled water deal? Idiots!

    You are looking into how a small trash fire was put out and can’t see the forest fire all around you!

  6. Any amount of wasted money is bad. Hey MND, think what you could do with 1 million dollars. Apple and the Sec screwed up, call it for what it is and don’t be all so pro Apple, they are a company and they can screw up and are only around for profit.

  7. “Republican lawmakers…looking to starve regulators of funding”

    A favorite technique, when they can’t rescind regulation, de-fund the auditors. Largely responsible for the S&L disaster of the 80s as well as the recent meltdown.

  8. This story seems a bit light in the details.
    1) Why would an Apple salesperson suggest a Cloverleaf solution?
    2) Can they tell us more about the “bugs”? Every installation has its own teething issues.
    3) Getting the gov’t to investigate a $1M procurement probably cost them $250k in expenses.

  9. The story is complete crock. There is no way knowing how much another solution would have cost. 1 million in these kind of project are in the margin of error, when things always have bugs.

    Total crap PR stunt by the SEC bozo.

  10. Disappointing that this is even being discussed about Apple. MDN’s take is crap. Good companies don’t have these kind of transactions waiting around to be unearthed!

    1. I agree. It was MDNs idea to put Apple’s name in the headline and then close out their comment with: This seems more like an attempt to smear Apple than anything else.

      Who’s smearing whom, MDN?

  11. So he Apple RECOMMENDED a 3rd party service and the hoofs went with it.

    This just Reuters coming across the Apple name and this becomes a big news story.

    Bahutu drops

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