Politics

12.18.13

The EPA’s Million-Dollar Con Man

John C. Beale got 32 months in prison Wednesday, but the sheer outrageousness of his fraud—pretending to be a CIA agent to skip work—may have helped him perpetuate it for two decades.

Let’s say you wake up tomorrow morning and really don’t want to go to work. You’re not sick. You’re not depressed. You’re not hungover. You just cannot bear the thought of showering, shaving, and schlepping into the office to spend eight-plus hours doing more or less the same exact crap that you did yesterday and the day before and the day before that. So what do you do? Take a personal day? Fake the flu? Hit snooze and spend the next half-hour fantasizing about running away to Key West?

Not John C. Beale. As a senior policy adviser in the Environmental Protection Agency’s Office of Air and Radiation, Beale dealt with his workplace malaise by convincing his bosses that he was a CIA operative whose top-secret work required him to be out of the office for long periods of time—including one stretch that lasted 18 months. Sometimes Beale claimed to be in Pakistan. Other times he claimed to be at CIA HQ in Langley. In reality, the agency’s top climate-change expert spent most of his time puttering around his Northern Virginia home or at his vacation house on the Cape, collecting his salary (plus bonuses!) while doing zero work. To break the monotony, he would take deluxe personal trips, on the EPA’s dime, of course, running up fat tabs for first-class airfare, limos, and five-star hotels.

How long did this fraud go on? Hard to say. Two decades, maybe longer. Beale resigned in April, after learning that he was under federal investigation. Court documents trace his shenanigans back through 2000. In its probe, however, the EPA’s inspector general turned up evidence that Beale had been making (unrelated) stuff up since 1989. For his part, Beale reportedly told the IG’s office that he started spinning spy stories in 1994 out of boredom and a need for attention. (From 1990 to 1993, Beale worked to reauthorize the Clean Air Act; afterward, he claimed, regular office life lacked a certain snap, crackle, pop—which he sought to recapture with his 007 fantasies.) At the time of his resignation, Beale was the EPA’s highest-paid employee. In September, he pleaded guilty to stealing nearly $1 million in salary and other perks from the government. Beale was sentenced to 32 months in federal prison on Wednesday in Washington.

At this point, the question everyone wants answered—most notably, the two congressional committees investigating the matter—is how the hell did Beale get away with this for so long? Clearly, the EPA missed a few red flags along the way. Even if we politely decline to ask why none of Beale’s supervisors bothered to confirm his CIA connection or even determine whether he had any sort of security clearance (he did not), what about all those eye-popping expense reports he was filing? (In its extensive coverage of the scandal, The Washington Post has noted that the EPA failed at such basics as comparing “Beale’s travel vouchers, which said he was in places such as Boston and Seattle, with hotel receipts for the same dates that showed him in Bakersfield, Calif., where he has family.”) What maniac was clearing Beale’s reports, and on what grounds? (The IG is said to be looking into the matter.)

Add to this the fact that, at some point a few years back, Beale’s retention bonuses pushed his pay above the legal limit. Agency officials were notified in 2010 but did nothing to fix the problem.  Indeed, the agency was so lax in its oversight that Beale ostensibly retired in September 2011—complete with a farewell dinner cruise on the Potomac—only to continue pulling a paycheck for another 19 months. Ultimately, it was this phony retirement that brought him down when, in March 2012, now-EPA chief Gina McCarthy, formerly Beale’s direct boss, discovered that the guy was still on the payroll six months after the retirement party she herself had attended. She requested an inquiry, which took another few months to get rolling.

All things considered, it’s hard to fault Sen. David Vitter, ranking Republican on the Environment and Public Works Committee, for having grumped: “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.”

For its part, the EPA’s official statement on the matter notes: “John Beale is a convicted felon who went to great lengths to deceive and defraud the U.S. government over the span of more than a decade. Since learning of the fraud, which was uncovered by Administrator McCarthy during her time as head of the Office of Air and Radiation, EPA has worked in coordination with its Inspector General and the U.S. Attorney’s office. The Agency has also put in place additional safeguards to help protect against fraud and abuse related to employee time and attendance, including strengthening supervisory controls of time and attendance, improved review of employee travel and a tightened retention incentive processes.”

To be fair, the EPA is not unusual in its vulnerability to employee fraud. “Most companies have controls in place to prevent it, but they don’t do anything about it,” says Bruce Dorris, a vice president at the Association of Certified Fraud Examiners. “When expense reports come in, nobody verifies them. Or nobody reconciles checks with invoices.” Organizations most commonly get burned by “simply a failure to monitor,” he says.

And veteran employees often are subjected to less scrutiny than new ones, he notes. “Companies many times are like, ‘Oh, nobody’s going to steal from me. He or she has been working for me for 20 years.’ That’s when it happens,” says Dorris, whose group trains fraud examiners and works directly with organizations to help prevent and detect fraud. “Once we become relaxed, then we open ourselves up for fraud.”

Dorris says that most “fraudsters” start small and then, as they get comfortable with how the system works and how to game it, take bigger and bigger risks. “There are no small frauds,” he asserts, “just ones that haven’t reached their maturity yet.”

No question, Beale’s fraud attained quite an impressive maturity. The guy didn’t just lie, he lied big—even for seemingly petty advantages. For years, he claimed to be suffering from malaria (not true) that he contracted while serving in Vietnam (never happened) in order to score a handicapped parking permit. While you’d think the outrageousness of Beale’s fraud would make exposure more likely, it may have helped him perpetuate it.

You gotta admit: As crackpot lies go, Beale’s spy cover was a stroke of genius.

“We all expect people to lie about everyday things,” says writer and consultant Gini Graham Scott, author of The Truth About Lying. But most people don’t expect someone to lie “on such a massive scale.” Maintaining such an elaborate, extended deception becomes quite complicated, says Scott, who is now at work on a book about sociopathic liars. Unsurprisingly, she notes, one of the things that liars of Beale’s magnitude tend to be good at is “manipulating people. Also, if they’re caught in a lie, they’re good at coming up with an explanation to get out of it.”

You gotta admit: As crackpot lies go, Beale’s spy cover was a stroke of genius. Whenever someone grew suspicious about his work activities (or lack thereof), Beale could simply whip out the national security card: I’d love to tell you why I haven’t been at work the past six months, but then I’d have to kill you.

In the case of Beale’s fabulism, bigger really was better. At least, that is, until it landed him in federal court. But, hell, it took them 20 years to catch him. Just think of all the fun he had in the meantime. And really, if he hadn’t gotten greedy and kept cashing those checks even after he so publicly retired, who’s to say they’d have ever busted him?

Just something to think about before you hit that snooze button tomorrow.