A former high-level official at the Environmental Protection Agency admitted Friday that he stole nearly $900,000 from the government by pretending to work for the CIA in a plea agreement that raised questions about how top agency managers failed to detect the scheme since it began in 1994.
John C. Beale duped a series of supervisors, including top officials of the EPA’s Office of Air and Radiation, disappearing from the office and explaining his absences by telling his bosses that he was doing top-secret work for the CIA and its “directorate of operations.”
He lied about contracting malaria (he didn’t) while he served in Vietnam (all his military service was in the United States) to obtain a parking space reserved for the disabled that cost the EPA $8,000 over three years. He took personal trips to Los Angeles for which he charged the government more than $57,000, according to new court filings.
In all, Beale was paid for 21 / 2 years of work he did not perform since early 2000 and received about $500,000 in “retention bonuses” he did not deserve for nearly two decades, according to court papers and interviews.
“To our knowledge, prior to [current EPA Administrator] Gina McCarthy expressing her concerns, no one at EPA ever checked to see if Mr. Beale worked for the CIA,” said Assistant Inspector General Patrick Sullivan, who led the investigation that included interviews of 40 people. Only one, an executive assistant, suspected Beale’s story of working for the clandestine service.
Nor did EPA personnel compare Beale’s travel vouchers, which said he was in places such as Boston and Seattle, with hotel receipts for the same dates that showed him in Bakersfield, Calif., where he has family.
Even during the probe, which began in March, Beale continued to insist that he could not be interviewed because of his work for the CIA, Sullivan said. Only when investigators offered to question him in a secure room at the agency’s Langley headquarters did he admit he had no connection to the CIA, Sullivan said.
For reasons the EPA cannot explain, Beale continued to draw a paycheck until April 30, 19 months after his retirement dinner cruise on the Potomac River and 23 months after he announced he would retire, according to Sullivan and court documents. Beale and his attorney declined to comment after the federal court hearing Friday.
The case has attracted political attention, in part because Beale was defrauding the agency when he worked for McCarthy, the new EPA administrator, when she headed the agency’s Air and Radiation office.
McCarthy started her job in 2009 and told investigators she began to suspect Beale in March 2012, Sullivan said. McCarthy, who is identified as “EPA Manager #2,” in court documents, eventually discovered that Beale was still receiving a paycheck long after she helped celebrate his retirement. She became EPA administrator this year.
McCarthy referred the matter to the EPA general counsel’s office. Instead of being transferred to the inspector general, it was referred to the EPA’s Office of Homeland Security, which has no investigative authority. That delayed the IG’s probe for months, said people familiar with the investigation.
Repeated calls and e-mails to EPA representatives were not returned Friday.
The top Republican on the Senate Environment and Public Works Committee, David Vitter (La.), said Friday that the case highlights a “major failing within EPA” and that “no direct actions have been taken to guarantee this kind of abuse won’t happen again.”
The committee’s chairman, Barbara Boxer (D-Calif.) called Beale’s actions “outrageous” and praised the inspector general and McCarthy for “putting an end to his thievery.” Boxer has scheduled a briefing for Monday. Beale is scheduled to appear at a House Committee on Oversight and Government Reform hearing next week titled “Secret Agent Man?”
Beale, 64, was charged in August with stealing $886,186 in pay and bonuses. A senior policy adviser in the Air and Radiation office, he earned $164,700 when he retired in April. He has repaid the $886,186 to the EPA as part of his plea agreement but still owes a money judgment of $507,000. Beale, who until recently lived in Arlington County, faces up to three years in prison under federal sentencing guidelines.
Even though court documents trace Beale’s conduct to 2000, the IG’s office found that Beale’s deception began in 1989, when he falsely wrote on his employment application that he had worked for former senator John Tunney of California, Sullivan said. Tunney’s name was misspelled on the form, he said. Beale said he began the CIA ruse in 1994, Sullivan said, because he missed the limelight from his work on the Clean Air Act reauthorization from 1990 to 1993.
Early on at the EPA, Beale’s air-quality expertise led to many legitimate overseas trips to places such as China, South Africa and England, said people familiar with the case. His frequent international travel also allowed him to cultivate an aura of mystery, his former colleagues said.
When Beale started disappearing from the office in 2001, he told a person identified as “EPA manager #1” that he was assigned to a special advisory group working on a project with the Directorate of Operations at the CIA, according the court filing.
The manager agreed to Beale’s request to be out of the office one day a week for the CIA work, according to the statement of the offense.
In 2005, court documents say the same manager approved a long-term research project that Beale had proposed. Beale took five trips to Los Angeles to work on the project, which prosecutors said did not require travel. Beale stayed in Bakersfield and visited nearby family members. He was reimbursed more than $57,000 in travel expenses for work that was never produced.
The inspector general’s office identified “manager #1” as Jeffrey R. Holmstead, who was head of the Office of Air and Radiation from 2001 to 2005, during the administration of George W. Bush. Holmstead, a lawyer in Washington, said in an e-mail that he had “no recollection of approving [Beale’s] requests.”
“He did tell me that he had an assignment with the CIA that would sometimes take him out of the office, but I was never asked to approve this arrangement. Career employees are sometimes detailed to work at other agencies, and I assumed that Mr. Beale’s work at the CIA was done pursuant to such an arrangement.”
In 2008, Beale did not show up at the office for about six months, telling his managers that he was either working on a research project or for “Langley,” a reference to the CIA.
Throughout the scheme, Beale was receiving a 25 percent retention bonus that should have expired after three years, in 2003. Instead, he continued to receive the bonus through 2013, according to the court documents, and was among the highest paid, nonelected federal government employees. A close friend of Beale’s, his supervisor Robert Brenner, put him in for the bonus twice, Sullivan said.
In May 2011, Beale announced his retirement. The next month, he told McCarthy that his CIA work would keep him out of the office for long periods. Beale sent e-mails to McCarthy and others at the EPA during that time, saying he was traveling overseas and doing CIA work. In reality, Beale was at home or at his vacation house on Cape Cod, according to the plea agreement.