EPA fraud casts doubt on institutional approach towards social management

Another government fraud doesn’t seem surprising, but we should look closer at this recent employee of the EPA; in fact their highest paid employee, who was thought to be an expert on climate change.  He was a liar, embezzler, and overall bad employee, according to his lawyer, he didn’t work for periods of 18 months.  When he would skip town and rack up huge bills in swank London hotels, he’d tell his co-workers that he was a secret CIA agent.  Whoa.

The EPA’s highest-paid employee and a leading expert on climate change deserves to go to prison for at least 30 months for lying to his bosses and saying he was a CIA spy working in Pakistan so he could avoid doing his real job, say federal prosecutors.

John C. Beale, who pled guilty in September to bilking the government out of nearly $1 million in salary and other benefits  over a decade, will be sentenced in a Washington, D.C., federal court on Wednesday. In a newly filed sentencing memo, prosecutors said that his lies were a “crime of massive proportion” that were “offensive” to those who actually do dangerous work for the CIA.

Beale’s lawyer, while acknowledging his guilt, has asked for leniency and offered a psychological explanation for the climate expert’s bizarre tales.

Beyond Beale’s individual fate, his case raises larger questions about how he was able to get away with his admitted fraud for so long, according to federal and congressional investigators. Two new reports by the EPA inspector general’s office conclude that top officials at the agency “enabled” Beale by failing to verify any of his phony cover stories about CIA work, and failing to check on hundreds of thousands of dollars paid him in undeserved bonuses and travel expenses — including first-class trips to London where he stayed at five-star hotels and racked up thousands in bills for limos and taxis.

Until he retired in April after learning he was under federal investigation, Beale, an NYU grad with a masters from Princeton, was earning a salary and bonuses of $206,000 a year, making him the highest paid official at the EPA. He earned more money than Gina McCarthy, the agency’s administrator and, for years, his immediate boss, according to agency documents.

In September, Beale, who served as a “senior policy adviser” in the agency’s Office of Air and Radiation, pled guilty to defrauding the U.S. government out of nearly $900,000 since 2000. Beale perpetrated his fraud largely by failing to show up at the EPA for months at a time, including one 18-month stretch starting in June 2011 when he did “absolutely no work,” as Kern, Beale’s lawyer, acknowledged in his court filing.

To explain his long absences, Beale told agency officials — including McCarthy — that he was engaged in intelligence work for the CIA, either at agency headquarters or in Pakistan. At one point he claimed to be urgently needed in Pakistan because the Taliban was torturing his CIA replacement, according to Sullivan.

“Due to recent events that you have probably read about, I am in Pakistan,” he wrote McCarthy in a Dec. 18, 2010 email. “Got the call Thurs and left Fri. Hope to be back for Christmas ….Ho, ho, ho.”

Can we ask a few questions about this?

  • Recently, the NSA has been exposed as having tapped into every electronic network in the United States, including Google and Yahoo data centers.  How were they able to miss elephant in the room?
  • What type of work did this person do while working for the EPA?  According to his attorney, in defense he stated that he did do admirable work for the government, such as helping re-write the Clean Air Act in 1990.  Does any work this person participated in require revisiting?

Kern, Beale’s lawyer, declined to comment to NBC News. But in his court filing, he asks Judge Ellen Huvelle, who is due to sentence Beale Wednesday, to balance Beale’s misdeeds against years of admirable work for the government. These include helping to rewrite the Clean Air Act in 1990, heading up EPA delegations to United Nations conferences on climate change in 2000 and 2001, and helping to negotiate agreements to reduce carbon emissions with China, India and other nations.

  • Taxpayers complain about entitlement programs for needy people, but their elected officials squander money for their own personal whims, without accomplishing any job they are actually paid to do.  Is it reasonable to ask, can we hire someone who will work for reasonable pay, to do a simple job, when there are 90+ Million unemployed Americans?
  • If the EPA is corrupt, what organization is protected from such corruption?  For example it might be at least understandable that the CFTC or SEC heads are ex Goldman Sachs employees.  But this person was not ex-Monsanto and had no agenda.
  • The EPA is a regulator.  The EPA is supposed to be monitoring corruption on an environmental level.  They regulate things such as toxicity levels in chemicals, the environment, human health, etc.  If this person is the highest paid employee for the EPA, what does it say about the results of such a regulator?

From a systemic perspective, this person is a low level hacker, who has exploited a severe vulnerability in systems used by the EPA and government in general.  With a robust system, he would not be able to accomplish this.  For example, if a crazy person thinks they can fly, they will learn that this is not possible as soon as they jump off a tall building.  Whatever was in this guy’s mind, he was able to do it.  The only answer why he did it, ‘because he can’ – in a normal system, such fraud would not be possible.

Is it possible then, that the system is based on fraud?  Does the system encourage fraud?

In the past 50 years, the US system has created an institutional approach towards management, for whatever reason.  Such a fraud would not have been possible in the 1930s, because the EPA didn’t exist.  It was created in 1970 by Nixon and approved by congress, and now has 17,000 employees and a budget of $8 Billion.  With an organization of this size, there will likely be a huge pro-EPA argument that will state what great work the EPA has done, how they have prevented various environmental catastrophes, that regulation is good, and that their budget should be increased.

But consider the extent of this single rogue employee, he had illegally spent millions of EPA funds on ridiculous personal missions such as visiting parents, unnecessary trips around the world, and who knows what else; meanwhile telling his co-workers he was working for the CIA, which no one bother to check.

Certainly this would be a difficult feat in any small family.  Imagine if this was your spouse, and he was spending the family money going on lavish trips meanwhile telling you he’s working for the CIA (usually CIA will cover expenses of their agents while in theater, they usually don’t require they pay their own way when in country).  It seems like good content for a bad love story.  But the government bought it, and it went unnoticed for years.

It makes you wonder what’s worse, someone who is reckless and incompetent, or someone well trained, with a handler and an agenda.

In any event, this case should make all reconsider the institutional approach towards management of the government and society.  And we should rethink what the EPA has done over the last 10 years, considering this person has been involved in it.

Further Reading

http://www.slate.com/blogs/crime/2013/12/16/john_c_beale_epa_the_work_shirking_secrets_of_the_world_s_laziest_government.html?wpisrc=burger_bar

http://investigations.nbcnews.com/_news/2013/12/16/21911592-climate-change-experts-fraud-was-crime-of-massive-proportion-say-feds?lite

http://en.wikipedia.org/wiki/United_States_Environmental_Protection_Agency