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Vitter: EPA Employee’s Theft & Fraud Case Shows Major Failings at Agency
Former high-level EPA official sentenced in criminal fraud case; Vitter wants EPW oversight hearing, especially since reports show fraud was called to Gina McCarthy’s attention nearly two years before she took action.
December 18, 2013

Today, U.S. Sen. David Vitter (R-La.), top Republican on the Environment and Public Works Committee, made the following statement following the sentencing hearing of John C. Beale, former senior official within the U.S. Environmental Protection Agency (EPA) Office of Air and Radiation, who pled guilty on September 27, 2013 to government theft in the amount of $886,186 and agreed to a criminal forfeiture of $507,207, for his fraudulent conduct from 2000 to 2013.

"The case this morning highlights a massive problem with the EPA, and figuring out why this corruption occurred with apparently no one the wiser needs to remain a priority of our Committee," said Vitter. "This sentencing and the recent reports release begin to shed light on something perhaps far larger than even the initial investigations indicated. At minimum, $900,000 of the taxpayers' money was stolen right under Administrator Gina McCarthy's nose. We need to know just how vulnerable is this Agency."

On August 27, 2013, Vitter requested the EPA Office of Inspector General investigate whether this corruption is isolated; or if not, who facilitated the excess salary, bonuses, travel and leave. His letter also raised questions about the integrity of the EPA's workforce payroll and benefits process, especially since payroll costs are 25% of their budget. Read Vitter's request for the IG investigation here. On September 5, 2013, the OIG accepted Vitter's request. Last week they released their reports.

Reports:
Internal Controls and Management Actions Concerning John C. Beale's Pay Issues
Internal Controls and Management Actions Concerning John C. Beale's Travel

According to one of the reports, Beale's fraud was exposed as early as June 2010, as a result of an OIG financial audit. By January 17, 2011, current EPA Administrator Gina McCarthy was aware of Beale's excess bonus payments, yet McCarthy allowed his bonuses to continue. Moreover, she permitted the payment of his regular salary, along with the bonus until February 5, 2013, even after she believed he had retired.

Although the criminal charges Beale was sentenced to today are limited to stealing money in the form of salary, benefits, and certain unearned Retention Incentive Bonuses between 2000 and 2013, the Committee understands that evidence indicates that Beale's fraudulent activities at the EPA date back to as early as 1989. Specifically, the Committee is aware that:

• Beale's application for employment with the EPA was falsified, yet he was hired at one of the highest non-Senior Executive Salary pay grades.

• Beginning in 1994, Beale falsely claimed to be a CIA operative in order to justify his extensive time out of the office, including a two-year absence from 2011 to 2013 under Gina McCarthy's supervision. While EPA officials continued to approve Beale's time and attendance, the OIG estimated that the time Beale was absent for "CIA work" from 2008 to 2013 was equivalent to approximately $350,000 of his EPA wages.

• Beale falsified an array of illnesses, such as malaria and an injured back, to explain absences, justify first class travel, and obtain handicapped parking, yet he was known for enjoying physical activities and riding his bike. According to the OIG, his falsified handicapped parking spot at EPA's headquarters in downtown Washington, D.C. lasted for several years and cost taxpayers $18,000. Beale also claimed to have obtained malaria while serving in Vietnam, despite the fact his military documentation confirms he never served in Vietnam.

• Beale was the highest paid employee in the Office of Air and Radiation under Gina McCarthy's supervision because EPA officials failed to properly code his pay and continued to allow erroneous bonus payments.

• For 23 consecutive years, Beale received Retention Incentive Bonuses; yet he was only approved to receive the bonuses for six years. Approval of the bonuses is also questionable as documentation justifying the bonuses were missing - suggesting that he never actually qualified for the extra pay. According to the OIG, EPA officials permitted Beale to receive more than $500,000 in erroneous bonuses.

• Beale's ability to defraud the agency for over 20 years, combined with the absurdity of his claims, demonstrates serious problems with EPA's ability to implement sound hiring practices, to track its employees' time and attendance, to limit travel expenses to only those that are necessary and reasonable, and to ensure that employees are taking home only the dollars that they earn.

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December 2013 Press Releases

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