EPA warned of ex-official’s illegal salary, bonuses in 2010, watchdog report says

The Environmental Protection Agency was warned as early as July 2010 that a senior executive who claimed to be a CIA agent was collecting pay and bonuses not allowed by law but took no action for years, according to a new report from the agency’s inspector general.

Auditors warned EPA administrators that continuing “retention bonuses” for John C. Beale, which were not authorized, had pushed his salary above the legal maximum, according to the report, obtained Tuesday by The Washington Post.

In July 2010, the EPA’s human resources office contacted Beale’s Office of Air and Radiation with a document it had prepared titled “John Beale Pay Issues,” according to the report. The head of Beale’s department was Gina McCarthy, who is now the head of the EPA. The report does not make clear whether the document was given to her.

A code on Beale’s timecard, approved by the Office of Personnel Management, initially allowed his salary to exceed legal limits.

On Jan. 12, 2011, the EPA’s Office of General Counsel warned McCarthy’s staff to “stop retention bonus pay,” and McCarthy was asked to inform Beale, according to the report. But on April 2, 2012, McCarthy “confirmed no actions taken on retention bonus due to advice” from the head of the human resources department, according to the report.

Beale’s bonus was not canceled until Feb. 5, 2013. He was forced to retire in April, when his base salary was $164,000. He will collect his pension.

Beale, who pleaded guilty in September to stealing nearly $900,000 in government pay and bonuses, is scheduled to be sentenced in federal court Dec. 18. In court papers filed this week, his attorney, John W. Kern, asked for jail time at the “low end” of the 30 to 37 months that Beale faces under federal sentencing guidelines. Beale has agreed to pay more than $1.3 million in restitution and forfeiture as part of the plea deal.

Top EPA officials have told investigators that they believed Beale’s story that he was working as a clandestine officer for the CIA and did not question his exorbitant hotel and first-class airfare bills or the bonuses he collected. The scheme began in 1994.

Sen. David Vitter (R-La.), who has been pressing the investigation, said of the report: “I don’t care how manipulative the individual was, somebody at the agency had to approve and sign off on leave, travel, salary and bonuses. This clearly shows some severe mismanagement problems at the EPA, and my guess is that it’s just the tip of the iceberg.”

An e-mail to an EPA spokeswoman Tuesday night was not returned. Kern did not return a message left on his cellphone.

An Oct. 1 congressional hearing into how Beale stole the money revealed that a second high-level EPA executive, Robert Brenner, a longtime friend of Beale’s, accepted an $8,000 discount on a Mercedes-Benz allegedly arranged by a lobbyist who did business with the EPA. The Justice Department’s Office of Public Integrity declined to bring charges against Brenner, according to testimony that day.

Another part of the new report notes that an attorney in the EPA’s Office of General Counsel “involved with the Beale matter declined to be interviewed as part of this request as is required under . . . the Inspector General Act.”

As a result, the inspector general was “limited in our ability to determine OGC’s involvement in, knowledge of and actions related to the Beale matter,” the report says.

The Post previously reported that in 2012, McCarthy notified the EPA general counsel’s office about her suspicions. That office, in turn, notified the EPA’s Office of Homeland Security, which has no investigative authority, delaying the inspector general’s probe for months.

Lenny Bernstein writes the To Your Health blog. He started as an editor on the Post’s National Desk in 2000 and has worked in Metro and Sports.
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