Federal agency honchos killed independent probe when IG turned sights on them

The probe’s abrupt termination came shortly before President Obama nominated an official that the IG suspected of numerous federal regulation violations to lead the agency. The FMCS’ previous director resigned in December after the Examiner reported rampant spending of federal funds on personal luxuries, retaliation against whistleblowers and multiple procurement abuses.

FMCS is an obscure 230-employee agency with a $50 million annual budget that provides voluntary mediation services between unions and private businesses in labor disputes. The agency has no inspector general and its director reports only to the president.

Allison Beck, an FMCS deputy director who was general counsel of an AFL-CIO union before joining the agency, still needs to be confirmed by the Senate. That confirmation vote, however, could take place as an investigation — conducted by the House Committee on Oversight and Government Reform — continues to look into how top managers at FMCS spent hundreds of thousands of dollars on fake contracts, shipped flat-screen TVs to their homes and rarely came to work.

Beck played a central role in those misdeeds, but now a new set of accusations is described in an Oct. 3 referral by an inspector general to the Justice Department and the FBI. Had the IG’s probe not been terminated, the documents reviewed by the Examiner would have been included in an official IG report to FMCS.

The referral report resulted after a former senior FMCS employee came forward with evidence that executives in the agency treated government jobs as gifts to be given to friends and family. Dawn Starr, FMCS’ general counsel, signed an agreement with Kevin Mulshine, the inspector general of the Architect of the Capitol, to conduct an independent investigation. The IG soon honed in on Beck, who the referral said was “suspected of committing” six different violations.

On Sept. 4, “OIG requested Ms. Starr to assist by providing access to detailed email records pertaining to Ms. Beck and Ms. Bonnie Chernikov, Special Assistant to the Director (and Ms. Beck’s sister-in-law),” the referral said. On Sept.12, Starr suspended the investigation in a letter to Mulshine.

“Effective immediately, the FMCS Acting Director wishes to put on hold any further investigation by your office under the MOA. FMCS has just retained the services of a new acting Director of Human Resources. The FMCS Acting Director seeks to have the acting Director of Human Resources review the matters under investigation before proceeding further,” Starr wrote.

Six days later, Obama publicly nominated Beck for the top job.

The referral noted that the general counsel “works directly for the Acting Director (Mr. Beckenbaugh) of FMCS, and could possibly work for Ms. Beck in the future since a White House press release dated Sept. 18, 2014,” indicated she would be nominated.

The suspension of the IG’s probe “has public integrity implications” and “was in direct conflict with the initial reason Ms. Starr initiated” the review, which was the need for an “independent, professional” investigator, the referral said.

Among the IG’s concerns was evidence that Beck tried to create a job for a family friend, even going so far as attempting to cast a secretarial job as a high-level political appointment to avoid civil service rules, according to a sworn interview conducted by the IG.

Beck also allegedly refused to hire a well-qualified candidate who had brought wrongdoing to light at another federal agency, the National Labor Relations Board.

According to the transcript of a witness interview by the IG, the rejected employee apparently reminded her of Berkina Porter, who, as the Examiner reported last year, was escorted out of the building by guards after she correctly pointed out that the agency’s then-director had used federal tax dollars to buy artwork painted by his wife. FMCS later paid Porter to settle her whistleblower retaliation complaint.

LuAnn Glaser, who oversees the FMCS unit that helps resolve discrimination complaints at other government agencies and private companies, went to great lengths to keep veterans out of the agency because “they do not fit the culture of FMCS because they were too rigid and bureaucratic,” a witness told the IG under oath. Federal law requires that veterans be given certain preferences in civil service hiring.

Beck routinely made decisions about what people and companies to hire, and then either figured out how to make it look as if proper competitive procedures had been followed or ignored them altogether, according to a witness interviewed by the IG.

The referral also said a witness told the IG that Beck hired a family friend, circumventing civil service rules by telling her to gain employment with a particular temp agency with which FMCS contracts. Beck then requested that the temp agency send her to work at FMCS.

Beck also sought to get pay for the friend for hours she did not work during the October 2013 government shutdown — the same week the Examiner published a series of articles on abuses at FMCS — and to circumvent the normal merit-based hiring process by reclassifying the low-level administrative position as a high-level political appointment.

When former FMCS Director George Cohen resigned last year, one of his two deputies, Scot Beckenbaugh, became acting director. But the IG was told that Beck, who was Cohen’s other deputy, spoke openly about using her Democratic and union political connections to secure support for the permanent job, and that she was regarded as the heir apparent.

When Obama announced her nomination on Sept.18, at which point she became acting director, the AFL-CIO issued a statement praising the decision, saying “Allison Beck is superbly qualified to run FMCS, having served with distinction as FMCS’s Deputy Director over the past five years, after a long career as a respected labor lawyer. We urge the Senate to move quickly on Beck’s nomination to this important post.”

John Arnold, a spokesman for FMCS, disputed the existence of an IG report, as quoted by the Examiner, saying “there is no report as mentioned, much less a ‘voluminous’ one. Not even a paragraph of a report was issued by the IG.” He dismissed claims about Beck as “mere allegations of a former employee.”

A copy of the referral was not sent to FMCS because the IG’s probe had been canceled.

Arnold also said FMCS’ human resources director recommended that the investigation be killed based “on his need to have a more complete understanding of the issues, his ‘concern that the investigation may not have been appropriately framed,’ and his ‘concerns that the agency might have better and/or more alternatives available.’ ”

“Without conceding the merit of the claims, the Agency took immediate action to affirmatively address the concerns raised in the complaint,” he said in a written statement, by paying a contractor to conduct training “that addressed merit systems principles for hiring and whistle blower protections.”