It started with his wife, Nancy Kete. She appears to be the first person whom John C. Beale told that he was working for the CIA. That was in 1994. By the mid-1990s, the same rumors were everywhere at the Environmental Protection Agency, where Beale was a high-ranking, handsomely paid executive who traveled overseas on important projects.
By the time Beale had decided to scam the EPA out of 2 1 / 2 years of work that he never performed and about $500,000 in bonuses that he did not deserve, the conventional wisdom that he was a clandestine CIA officer provided convenient cover for his plan.
“People would ask me, and I would either say no, or I would slough it off as a joke or deny it, and then it became such a common kind of thing that was talked about that I just stopped responding to it at all,” Beale said in a 263-page transcript of his deposition that was released Wednesday afternoon by the House Committee on Oversight and Government Reform, his only thorough account of the scandal to date.
“So I began the fraud and I was looking for some cover for it,” he added. “. . . I took advantage of the rumors, but the rumors didn’t inspire me or impel me to begin the fraud.”
That fraud came crashing down on Beale, 65, last year, ultimately leading to a plea agreement that will send him to prison for 32 months and require him to pay nearly $1.4 million in fines and restitution.
Like the statement he made at sentencing Dec. 18, Beale’s questioning under oath, which lasted much of the next day, reveals a man baffled and shamed by his actions, which he acknowledged were motivated by “greed.”
“I think I mentioned in court yesterday that it kind of becomes an addiction,” he said in the deposition. “I’m not saying it’s an addiction, but it’s similar properties and I think I made up my mind several times to stop it but never succeeded.”
Asked whether he believed he would ever be caught, Beale said: “I thought it was a pretty stupid thing I was doing, and there was a good likelihood I would.”
Beale’s attorney, John W. Kern, was at his side throughout the session and at times jousted with those posing questions. The names of committee staffers were redacted in the transcript, as were names of some of the people mentioned by Beale.
Beale invoked his right against self-incrimination in refusing to testify to the committee in October. Rep. Darrell Issa (R-Calif.), the committee chairman, and Rep. Elijah E. Cummings (Md.), the ranking Democrat, agreed to release the transcript of the deposition. “This is an egregious example of fraud on the highest levels of management at the EPA,” Issa said in a statement. “It’s disappointing that a civil servant got away with bilking the American people for so long.”
Beale said his marriage had been “profoundly” affected by his lies, as has his long friendship with Robert Brenner, the EPA official who recruited him to the agency, repeatedly put him up for retention bonuses and has come under scrutiny for some of his actions as a result of the Beale investigation.
Members of Congress have questioned Brenner about accepting an $8,000 discount on a Mercedes-Benz arranged by a lobbyist friend who did business with the EPA.
Beale said that he has liquidated his assets and his retirement fund to pay the government, and that he will be left with only his pension, which he estimated at $2,600 a month after deductions. Issa has denounced the idea that Beale would be allowed to collect even that.
Asked during the deposition whether Kete, managing director of the Rockefeller Foundation in New York, is helping him repay the debt, Beale answered, “No, not a chance.”
Republicans have used Beale’s fraud to pound the EPA over mismanagement and lack of accountability, noting that Gina McCarthy, Beale’s supervisor in the agency’s Office of Air and Radiation from 2009 to 2013 and now head of the EPA, did not take action for two years after her staff was warned in January 2011 that Beale was collecting bonuses that he did not deserve.
McCarthy’s defenders and Democrats in Congress have cited her as the person who finally questioned Beale’s CIA ruse, forced him out of the EPA and prompted the investigation. The EPA inspector general’s office has said that the fraud lasted nearly two decades, through Republican and Democratic administrations, although Beale took issue with some of that timeline in his deposition.
He said the first person he actually told that he was working for the CIA was Jeffrey R. Holmstead, then assistant administrator of the Office of Air and Radiation, in 2001. He did it, Beale said, to cover the fact that he was stealing time away from the office. From then on, he maintained the fiction for a variety of supervisors, peers and underlings, until McCarthy insisted on some verification of his connection to the intelligence agency last January.
Of McCarthy, Beale said: “I had and have a lot of respect for her. I think she’s one of the smartest people I’ve ever met. I think she’s a good manager.” Until their final interaction, when investigators were beginning to look into Beale’s story, however, she never accused him of the fraud, Beale said.
“She never accused me of being a lying scumbag,” he told the committee.