Fraud­ster: EPA chief knew of sham for years ‘Uncovered’ wild claims of CIA job

The Washington Times Weekly - - National - BY STEPHEN DINAN

New EPA Ad­min­is­tra­tor Gina McCarthy was aware as far back as 2009 that one of her em­ploy­ees claimed to be work­ing for the CIA while still col­lect­ing his EPA pay­check, but didn’t stop it un­til sev­eral years later, ac­cord­ing to the man who per­pe­trated the fraud.

The de­po­si­tion of John C. Beale, re­leased Wed­nes­day by the House Over­sight and Gov­ern­ment Re­form Com­mit­tee, con­trasts with the En­vi­ron­men­tal Pro­tec­tion Agency’s claims that it was Ms. McCarthy who ex­posed the fraud and helped oust Beale.

Beale says he re­signed last year af­ter Ms. McCarthy and oth­ers be­gan sig­nal­ing that they had ques­tions, but he said she never asked him to re­sign, nor did she fire him.

In­deed, Ms. McCarthy even at­tended an ear­lier re­tire­ment party for Beale in 2011 but didn’t raise ques­tions even af­ter he con­tin­ued to col­lect pay­checks from the agency while claim­ing to be ab­sent from work un­der the aus­pices of the CIA, the dis­graced for­mer em­ployee told investigators.

Ms. McCarthy did halt a re­ten­tion bonus last Fe­bru­ary, but he con­tin­ued to re­ceive his pay­checks for sev­eral more months, un­til he re­tired.

Beale’s case has as­tounded Wash­ing­ton and raises ma­jor ques­tions about in­ter­nal checks at the En­vi­ron­men­tal Pro­tec­tion Agency. The de­tails of Beale’s claims about work­ing for the CIA and need­ing time off test the bounds of credulity.

But he said Ms. McCarthy shouldn’t be blamed for fail­ing to spot his fraud and that it was rel­a­tively easy to pull off his scam.

“I had earned a rep­u­ta­tion for be­ing very com­pe­tent, very skill­ful, very truth­ful and very hon­est, and I be­trayed all of that and then lied to peo­ple about it and abused that trust, and that’s not the kind of thing that be­comes ob­vi­ous right away,” he said.

The EPA didn’t re­turn a re­quest for com­ment Wed­nes­day but pre­vi­ously told re­porters that the fraud “was uncovered” by Ms. McCarthy af­ter years of de­cep­tion that spanned Demo­cratic and Repub­li­can ad­min­is­tra­tions.

“John C. Beale crim­i­nally de­frauded the EPA for nearly 20 years by con­vinc­ing his man­agers that he was also work­ing for the CIA,” the agency said. “Jef­frey Holm­stead, who man­aged the EPA’s air of­fice dur­ing the Ge­orge W. Bush ad­min­is­tra­tion, was the first se­nior-level of­fi­cial mis­led by Mr. Beale. Ev­ery sub­se­quent se­nior man­ager of that of­fice was told that Mr. Beale was in fact work­ing for the CIA, a nar­ra­tive that was not ques­tioned un­til Novem­ber of 2012. Af­ter those ques­tions were brought for­ward by Ad­min­is­tra­tor McCarthy, and once the EPA was not able to con­firm any re­la­tion­ship be­tween Mr. Beale and the CIA, the agency promptly re­ferred this mat­ter to our Of­fice of In­spec­tor Gen­eral.”

In tes­ti­mony that runs more than 250 pages, and that was re­leased by Repub­li­cans and Democrats on the in­ves­tiga­tive com­mit­tee, Beale de­scribed the ex­tent of his de­cep­tion and how easy it was to fool his col­leagues and su­pe­ri­ors.

His paid time off, when he sup­pos­edly was work­ing for the CIA, to­taled 2½ years. Yet he was not ques­tioned about his sched­ule and was even given a re­cur­ring re­ten­tion bonus by the agency.

Ac­cord­ing to his de­po­si­tion, which he gave to House investigators a day af­ter he was sen­tenced to 32 months in prison in a Dec. 18 court ap­pear­ance, Beale started at the EPA af­ter a friend re­cruited him, de­spite his lack of en­vi­ron­men­tal ex­pe­ri­ence. The EPA ex­ec­u­tive who first talked to him about a job, Rob Bren­ner, who was a friend and co-owned a va­ca­tion rental prop­erty with Mr. Beale, said it wouldn’t be a prob­lem.

“We agreed that I’m a fast learner and I can pick that stuff up,” Mr. Beale told investigators.

Rep. Dar­rell E. Issa, Cal­i­for­nia Repub­li­can and chair­man of the over­sight com­mit­tee, called the scam “an egre­gious ex­am­ple of fraud on the high­est lev­els of man­age­ment at the EPA.”

Rank­ing Demo­crat Rep. Elijah E. Cum­mings of Mary­land said all sides must work to pre­vent a re­cur­rence.

Ms. McCarthy’s role, though, re­mains par­tic­u­larly con­tro­ver­sial.

She be­came the chief of the EPA’s air and ra­di­a­tion of­fice in 2009, which put her in charge of Beale’s work. She at­tended a re­tire­ment party for him in Septem­ber 2011 but didn’t raise ob­jec­tions when he con­tin­ued to col­lect a pay­check — though rarely showed up for work — un­til a year and a half later.

In­ter­nal au­di­tors at the agency say Ms. McCarthy raised her con­cerns on Nov. 1, 2012, but she waited a few months af­ter that be­fore can­cel­ing his re­cur­ring 25 per­cent re­ten­tion bonus and de­mand­ing that he pro­duce doc­u­men­ta­tion of his CIA em­ploy­ment. He re­signed a cou­ple of months af­ter that.

Sen. Bar­bara Boxer, Cal­i­for­nia Demo­crat and chair­woman of Se­nate En­vi­ron­ment and Pub­lic Works Com­mit­tee, said at a hear­ing last year that Ms. McCarthy, who has since been pro­moted to be the agency’s chief, should be praised for her help in un­cov­er­ing the scheme.

Ms. Boxer’s of­fice didn’t re­spond to a re­quest for com­ment Wed­nes­day.

Com­mit­tee Repub­li­cans said Ms. McCarthy should have ques­tioned Beale’s work sta­tus ear­lier.

EPA ad­min­is­tra­tor Gina McCarthy (above) at­tended a re­tire­ment party for John C. Beale (left) in Septem­ber 2011, but she didn’t raise ob­jec­tions when he con­tin­ued to col­lect a pay­check — though rarely showed up for work — un­til a year and a half later.

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