Publication / Inside EPA
December 17, 2013
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EPA Inspector General Faults Gina McCarthy In John Beale Pay Fraud

EPA’s Inspector General released a report Dec. 11 that finds that EPA Administrator Gina McCarthy was aware of the salary fraud perpetrated by a former air office deputy assistant administrator she previously oversaw but chose not to act on the issue for more than a year.

The finding is likely to further tarnish McCarthy and others who have been caught up in the scandal over John Beale, the former air office official who has pled guilty to collecting payments and submitting expense reports for work he did not conduct, stemming back to 1994.

The IG’s report finds that human resources employees had warned top officials in the Office of Air and Radiation, when McCarthy led it, of excessive, illegal payments to Beale as early as July 2010, but no actions were taken.

According to the IG, an EPA human resources document titled “John Beale Pay Issues” was delivered to Beale’s superiors, though it did not specify who in the office received the warning.

The document highlighted Beale was receiving unlawful “retention bonuses” that an employee was only allowed to receive for up to six years but he had been receiving for much longer. Lawmakers have questioned whether he should have received any such bonuses at all, which are supposed to be contingent on the recipient having another job offer.

On Jan. 12, 2011, the EPA’s Office of General Counsel then directly warned McCarthy’s staff to “stop retention bonus pay” for Beale according to the IG’s report, but over a year later determined that McCarthy “confirmed no actions taken on retention bonus due to advice” from the head of the human resources department.

Last September, Beale pleaded guilty to fraud. He is scheduled to be sentenced Dec. 18 under a plea agreement that requires him to pay back nearly $900,000 that he stole through various fraudulent means, including the salary he received during years-long absence from EPA work while he claimed falsely to be working for the Central Intelligence Agency.

In total he took about 2.5 years off from work but was still compensated.

He is facing 30 to 37 months in jail based on sentencing guidelines. As part of his plea deal, he agreed to pay more than $1.3 million in restitution and forfeiture.