Correction: An earlier version of this article incorrectly indicated that the review of the EPA official could lead to her prosecution. The investigation is into possible administrative misconduct, not a criminal offense. The inspector general’s office also denied a statement in the article that its investigators called the official a “person of interest.” This version has been corrected.
Investigators for the Environmental Protection Agency are reviewing the activity of another high-level official in the agency’s Air and Radiation Office for possible administrative misconduct, according to congressional aides briefed on the matter.
Investigators for the EPA’s inspector general’s office described the woman as a “person of interest,” according to the aides, but on Thursday the inspector general’s office denied such characterization. She approved many of the lavish travel and lodging expenses run up by John C. Beale, the EPA executive who has pleaded guilty to defrauding the government of nearly $900,000 in pay, bonuses and travel reimbursement while he masqueraded as a CIA agent. He is to be sentenced Wednesday.
All three of then-Assistant Administrator Gina McCarthy’s deputies in the Air and Radiation Office have come up in the investigation: Beale; Robert Brenner, a longtime friend of Beale’s who acknowledged accepting an $8,000 discount on a luxury car allegedly arranged by a lobbyist who did business with the EPA; and the woman who approved Beale’s travel.
The woman “was making the majority of the decisions and authorized the actions that enabled” the fraud, said one person briefed about the investigation, speaking on the condition of anonymity because the report had not been made public yet.
Brenner, who retired, has not been charged with any crime. McCarthy is now head of the EPA.
“This raises serious questions about [McCarthy’s] capabilities as a manager and leader,” Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, said in a statement Wednesday. Issa promised more hearings.
In a report on Beale’s travel, investigators determined that he flew first class on 23 of the 33 trips he took from 2003 to 2011, including a pair of trips of less than two hours to Boston. He had obtained medical and EPA approval to travel “premium class” on trips of more than two hours, although he had no actual medical problem.
He flew first class on most trips, despite an EPA directive to fly business class if available. The 33 airfares cost the EPA $266,190, investigators concluded.
Similarly, the report said, Beale charged the EPA for vastly more expensive lodging than allowed on 17 of the 33 trips. His lodging expenses ranged from 40 percent to 155 percent more than allowed, according to a sample of six trips presented in the report. On one trip to London in July 2008, he spent $5,659 for five nights in a hotel despite an EPA maximum of $354 per night.
One of the many deficiencies noted in the report is that Beale’s travel was approved by a peer rather than a supervisor, as required by the EPA travel manual.
On Wednesday, The Washington Post reported that the EPA was warned as early as July 2010 that Beale was collecting pay and bonuses not allowed by law but took no action for years, according to another inspector general’s report.
Rep. Jason Chaffetz (R-Utah), who grilled EPA officials at an Oct. 1 hearing, said in an interview that the new report “begs the question that can only be answered by the administrator — what did she know, when did she know it and why did she allow it to fester?”
“It’s very apparent there were significant failings within the EPA, because a fraud of this level isn’t by pure accident. These reports begin to shed light on something perhaps far larger than even the initial investigations indicated,” said Sen. David Vitter (R-La.).
An EPA spokeswoman said in a statement that “the documents discussed in the OIG’s early warning report reflect that human resources concerns related to Mr. Beale surfaced in 2010. The EPA is reviewing why those concerns did not result in changes to Mr. Beale’s pay at that time.”
The inspector general’s office and other EPA officials have credited McCarthy with being the first to question Beale’s story that he worked as a clandestine CIA officer and for forcing him to retire. But because of lax oversight at the EPA, Beale continued to draw a paycheck until April 30, 19 months after his retirement dinner cruise on the Potomac River, which McCarthy attended.
In court documents filed this week, Beale asked a federal judge to impose a jail term at the low end of the 30- to 37-month range recommended under federal guidelines. The 33-page memo submitted in advance of next week’s sentencing hearing offered the first window into his motivations.
His attorney John W. Kern said in the court filing that Beale’s lies were motivated by his “need to engage in excessively reckless, risky behavior and to manipulate those around him through the fabrication of grandiose narratives about himself that are fueled by his insecurities.”
Early this year, Beale began meeting weekly with a therapist to try to understand his misconduct, according to the court filing.
Beale’s fictitious persona, his attorney said, “misled those closest to him who had trusted and respected Mr. Beale.” At the October hearing, it was revealed that one of the people deceived was Beale’s wife.