Vice’s ‘Unethical’ Contracting Contracting ‘Risked a $25 Million Settlement’
Vice News—Vice’s former chief of contracting, Mike O’Brien, has resigned amid accusations that he was “instrumental in the company’s illegal contracting practices.”
The New York Times first reported that O’Brien, who served as Vice’s chief of talent, signed a $125 million contract with a contractor in 2011 that resulted in a “lack of due diligence, poor oversight and a lack of accountability for its work.”
The company was subsequently fined $25 million by the Federal Trade Commission.
“We did not do a good job in our oversight of our business,” Vice President of HR, David Jaffe, said in a statement, adding that O-Brien “sought to avoid accountability for his actions.”
Vice did not immediately respond to The Daily Beast’s request for comment.
O’brien’s departure came less than two months after the company announced that it would shut down its “business development and technology consulting” division in 2018.
In August, Vice also suspended O’Rourke’s contract with the company and announced that its CEO would be stepping down as well.
Vice had previously paid O’Reies $400,000 in severance in August and September.
The company previously laid off 10,000 employees as it struggled to maintain profitability, and O’Reilly’s departure will bring Vice’s total number of employees to around 100.
Vice’s move came as a surprise to many, with the publication of an internal memo from Vice’s HR division in which O’Connor outlined “a series of events that occurred prior to his departure that would be damaging to our company, our employees and our future.”
O’Neill’s memo outlined a number of examples, including O’Connors contract with an unnamed consultant to help him “develop a business plan” for Vice that included “excessive and unproductive expectations.”
“The result is that we have now lost more than $25M in revenue and are now in the process of losing another $10M in total, including the $25K that was due to us in January of this year,” the memo continued.
O’Connor also alleged that Vice’s “aggressive approach” to securing new talent for the company was “at odds with our company culture.”
“Vice has consistently failed to adequately train and promote our senior management, has failed to address any of the serious problems we are facing, and has been unwilling to engage in a meaningful dialogue about our strategy,” O’Cohen wrote.OConnor also detailed the company “failed to adequately manage its legal team, its legal and compliance and compliance costs,” and noted that Vice “has been unable to address our ongoing litigation, which has resulted in the imposition of punitive damages and the diversion of our entire legal team.”
In a statement released Wednesday, Vice CEO and founder Joe Biden wrote, “We are profoundly sorry for the distress caused by the events of the last several months.”
“I believe the actions taken by Mike OBrien were completely consistent with his values and demonstrated the strong leadership that he brings to the Vice Group.
I am deeply sorry for any damage that he and the Vice Company have caused.”
The company also said that OBrien’s resignation was “the result of a thorough investigation by our legal team,” which was “committed to finding and resolving any issues that might have been caused by his conduct.”
“Vice believes in an inclusive culture and strongly encourages all employees to report any concerns or concerns that may be raised by a colleague or supervisor,” the statement read.
“In the future, we will continue to make clear to our employees, and in the future Vice will also, that it is our policy to treat all of our employees fairly, and will take all necessary steps to protect the privacy of our clients and the business.”
Vice said that it will continue its “investigation and will be ready to provide a more transparent and comprehensive response to the allegations made in this complaint.”