STATEMENT OF ELAINE KAPLAN SPECIAL
COUNSEL U.S. OFFICE OF SPECIAL COUNSEL PRESS CONFERENCE DECEMBER 6, 2000
FOR IMMEDIATE RELEASE 12/6/00
CONTACT: JANE MCFARLAND
Good morning and thank you all for coming.
My name is Elaine Kaplan, and I am the head of the U.S.
Office of Special Counsel. OSC is an independent agency whose
responsibilities include, among other things, receiving and analyzing
whistleblower disclosures by federal employees. By law, when I find that an
employee has provided information creating a substantial likelihood that
violations of law, gross mismanagement, or a gross waste of funds has
occurred, I am required to refer those allegations to the head of the
federal agency at issue, and the agency head is required to conduct an
internal investigation and report his or her findings back to me.
Thereafter, the law provides that I am to permit the whistleblower to
comment upon the report. Then, I am to review the report myself and
determine whether the findings appear reasonable and whether the report
contains all of the information the law requires. Finally, I am instructed
to transmit the agency’s report, along with my own comments and
recommendations to the President and appropriate oversight committees, for
such action as they consider appropriate.
I am here today to announce our transmittal of a report
from the DOD concerning allegations made by Dr. Donald Sweeney, an economist
with the St. Louis District of the Army Corps of Engineers. Last February,
Dr. Sweeney, who is here with us today at my invitation, provided OSC with a
detailed affidavit and supporting documentation which he alleged showed that
Army Corps of Engineers officials had exerted improper influence and
manipulated a cost-benefit analysis for purposes of obtaining approval to
undertake a navigation improvement project on the Upper Mississippi River
and Illinois Waterway. The project involved the expansion of locks along the
Upper Mississippi at an estimated cost of between 750 million and 1.1
We determined that the information that Dr. Sweeney
provided established a substantial likelihood that Corps officials and
employees had violated applicable laws, rules and regulations governing the
conduct of such cost-benefit analyses, and that a gross waste of funds would
occur as a result of these violations. Therefore, on February 24, 2000, we
referred Dr. Sweeney’s disclosures to DOD Secretary William Cohen for an
investigation. Secretary Cohen, in turn, directed the Secretary of the Army
to conduct an investigation. Secretary Calderra assigned that task to the
Army’s Office of Inspector General.
We have now received from Secretary Cohen, the IG’s
report into Dr. Sweeney’s allegations. We have also received comments on
that report from Dr. Sweeney. I am today transmitting the DOD report, Dr.
Sweeney’s comments, and my own comments and recommendations, to the
President and to appropriate Congressional oversight committees for their
consideration and any possible follow up.
Briefly—the major findings of the report are as follows:
--The DAIG confirmed Dr. Sweeney’s allegation that
Corps officials manipulated the economic analyses of the feasibility study
being conducted on the Upper Mississippi lock expansion project in order to
steer the study to a specific outcome—namely, the approval of the project.
--The report found that Major General Fuhrman, the
Corps’ former Director of Civil Works, and Major General Anderson,
Mississippi Valley Division Commander, created a climate within the Corps
that led to the manipulation of the cost-benefit analysis.
--The report found that Colonel Mudd, the District
Engineer assigned to the project, directed a specific value for a key
parameter of the cost-benefit analysis when he knew it was mathematically
flawed and contrary to the recommendations of Corps economists. The report
found that he did so in order to produce a favored outcome, that is,
--The report found that Major General Anderson improperly
gave preferential treatment to the barge industry, potentially the direct
beneficiaries of a decision to implement large-scale construction, by
allowing industry representatives to become direct participants in the
--The report also concluded that an institutional bias
for large-scale construction projects may exist throughout the Corps, which
created an atmosphere where objectivity in the economic analysis here was
placed in jeopardy. The report identified three primary factors potentially
responsible for the bias.
First: Major General Fuhrman’s guidance
in which he characterized the Corps’ role as “advocate” for the inland
waterways. The report found that the dissemination of this guidance
constituted a pivotal event in the study, in that “[i]t provided the
impetus for manipulation of the study results.” Witnesses expressed
concern that the advocacy role was a departure from the Corps’
responsibility to be an “honest broker” in the study process, rather
Second: The Army IG identified the
Corps’ “Grow the Program” initiative as an initiative which had
potential to affect future feasibility studies. According to the report,
compelling evidence indicated that a key element of the program was
encouragement of grass roots lobbying for projects. The IG observed that the
initiative placed “immense pressure” on the Corps’ divisions to
Third: The report concluded that the Corps’ reliance on
external funding creates a conflict with the Corps’ “honest broker”
role. The Districts are dependent upon project funding to maintain their
staffs. The continued vitality of the Districts was, therefore, dependent on
producing study results that favored construction projects. Although senior
Corps officials believed that the professionalism of its employees was
sufficient to overcome the conflict, the report found that use of the
“advocacy guidance” and customer service model offered strong
indications to the contrary.
--Finally, the report observed that there was a
widespread perception of bias among the Corps employees interviewed. This
bias related to the view that the Corps held an inherent preference for
large-scale construction projects. In conclusion, the report stated that the
overall impression conveyed by testimony of Corps employees was that “some
of them had no confidence in the integrity of the Corps’ study
I have reviewed the report and have found that its
findings appear reasonable with respect in their substantiation of Dr.
Sweeney’s essential contention—that Corps officials and employees
exerted improper influence over the economic study at issue and manipulated
a cost-benefit analysis in order to justify the expensive extension of locks
along the Upper Mississippi River and Illinois Waterway. In fact, while it
was technically beyond the scope of our referral, DOD and the Army IG should
be commended for expanding the investigation to attempt to determine the
root causes of these actions, and for identifying institutional biases at
the Army Corps which the President or Congress may wish to address.
On the other hand, I have concluded that DOD’s response
does not include some of the important information that the statute requires
it to provide. In particular, DOD has not specified what actions it intends
to take in response to the investigatory findings, either with respect to
this particular project, or generally. It has referred those issues to the
Army for consideration.
In that regard, I note that Dr. Sweeney himself has made
a number of interesting recommendations. In his comments, he suggests that
systemic reforms should be instituted, including independent peer review for
projects developed in recent years under the influence of the Program Growth
Initiative; organizational independence for project evaluators; and improved
methods for analyzing the demand for navigation projects. Given Dr.
Sweeney’s expertise in this area, as well as his considerable efforts to
bring this problem to light, we assume that his recommendations will be
taken into consideration by the Secretary of the Army.
Last, the IG Report does not appear to comprehensively
address some of Dr. Sweeney’s contentions regarding the manipulation of
variables in the economic study. We understand that these issues will be
addressed by the National Academy of Sciences, in a report that it is
preparing for the Secretary of the Army. Rather than delay our action
pending receipt of that report, I have decided to transmit the matter on to
the President and Congress, with a recommendation that they conduct whatever
follow-up they deem appropriate, on these and other concerns.
Finally, let me take this opportunity to thank Dr.
Sweeney for bringing this matter to the public’s attention. I would also
like to thank Dr. Sweeney’s colleagues, who provided testimony to the
Army’s IG in its investigation. It takes great courage and perseverance to
come forward as Dr. Sweeney did, and to provide an honest perspective to
investigators, as Dr. Sweeney’s colleagues did, in cases where higher
level officials and supervisors are accused of serious misconduct. Dr.
Sweeney’s disclosures have contributed to the public interest and he
deserves great credit for his efforts.
I will now turn the podium over to Dr. Sweeney for any
remarks that he may wish to make before we take questions.