The Justice Department is investigating allegations that John P. Horton, the director of administration at the Environmental Protection Agency, has been performing work for several private businesses in his office at the EPA.
Investigators searched Horton's offices last fall and found that a large number of the files there related to some of the restaurant, manufacturing and realty businesses in which Horton is a partner or owns an interest, according to a law enforcement source.
Horton yesterday denied any wrongdoing, saying that he handles private business matters on his own time and that he kept some business papers in his EPA office for storage purposes only.
"I just didn't have any place to put it," said Horton, adding that he lived in small apartments after moving here from New Jersey. "This is what anyone else might have done under the circumstances. I just didn't realize you weren't supposed to store that stuff in government files."
At the same time, the Office of Government Ethics has held up approval of Horton's federal financial disclosure statement because of questions about some payments he received from companies after he had gone to work for the EPA.
Horton joined the EPA in June, 1981, and later that year received $65,000 in bonuses and consulting fees from two companies for which he had worked, according to his disclosure statement.
The office is required by law to scrutinize outside income received by federal employes and to determine whether the payments should be returned because they might influence an employe's official duties.
The probe into alleged private work by Horton was launched by EPA Inspector General Matthew N. Novick and is being pursued jointly with Justice and FBI officials. The allegations come as six congressional subcommittees are looking into various charges against the agency.
Horton, who is paid $67,000 a year as the assistant administrator in charge of administration, said the discovery of the business records in his office has been misinterpreted and that he is not involved in the daily management of the companies.
Investigators, however, found a large number of checks, financial records and corporate stationery that appeared to be related to the current affairs of some of Horton's businesses, according to a law enforcement source.
Horton, who worked in President Reagan's New Jersey campaign in 1980, was placed in charge of all administrative matters at the EPA with the help of Labor Secretary Raymond J. Donovan, according to Horton.
Investigators also are examining an allegation that Horton directed his administrative assistant, Patty Kruger, to do work for his private businesses on government time. Kruger did not return telephone calls yesterday, but Horton said that she had volunteered to help him type some private letters on her own time.
"I haven't paid her," Horton said. "She just wants to help me."
Horton said that EPA ethics officials did not require him to divest himself of his outside business interests when he joined the agency because he was handling general administrative matters, rather than working on a specific program such as water pollution or toxic waste. He said there is no conflict of interest because these companies are not directly affected by EPA policies.
After joining the EPA in 1981, Horton was paid $30,000 in "bonus incentive payments" by Growth Enterprises Inc., where he had been treasurer. Horton said this is a holding company for six restaurants he still owns in New Jersey, and that the payments are deferred compensation for previous work.
Horton also was paid $35,000 in consulting fees in 1981 by Ecolotec Inc. Horton said this is one of several "buy-out" payments from a British firm that purchased his interest in Ecolotec, and that it does not involve any consulting work on his part.
Horton's wife also received salaries or directors' fees in 1981 from several of his companies and other firms in the United States, Britain and Denmark, according to Horton's financial statement.
Horton retains an interest in a Danish firm that makes power brushes, a company that rebuilds airport equipment, holding companies in Britain and the Netherlands, and several realty partnerships in Britain and the United States, according to the statement. He was president or chairman of three companies and a director of eight firms before joining the EPA, and in 1980 these firms paid him more than $300,000 in salaries, bonuses and director's fees.
Horton said he assumed the allegations were being made by disgruntled employes, and that he had been cleared of earlier allegations that he misused EPA travel funds.
"In a position like mine, not everyone is going to agree with the changes and decisions I make, and they have a venue with which to express that disagreement," he said. "They don't even have to have any proof. They can just call up on the hotline."
The EPA inspector general operates a hotline through which anonymous callers can report allegations of wrongdoing.