Joint FBI and Justice Investigation of Alleged Misconduct by	 
Senior FBI Personnel in 1997 and Our Queries About the		 
Possibility of Similar Misconduct in 2001 (21-DEC-01,		 
GAO-02-189R).							 
								 
This letter responds to allegations of improper conduct by senior
Federal Bureau of Investigations (FBI) personnel in connection	 
with an October 1997 retirement dinner for former FBI Assistant  
Director Larry Potts. The request referred to allegations that a 
conference was scheduled at the FBI Training Academy in Quantico,
Virginia, to provide a reason for senior FBI personnel to travel 
to Mr. Potts' retirement dinner in Arlington, Virginia, at	 
government expense. GAO determined that the October 1997 FBI	 
investigation of the alleged improper scheduling of a training	 
conference was thorough. FBI and Justice Department investigators
reviewed the actions of eight FBI Senior Executive Service (SES) 
employees. Of the eight, three were issued letters of censure by 
the FBI's Deputy Director. Two individuals retired before	 
receiving proposed letters of censure. The three remaining	 
individuals were not disciplined because they either had attended
both the training conference and the retirement dinner or had	 
some other explanation for traveling to Washington, D.C. With	 
respect to concern about a double standard in disciplining SES	 
and non-SES employees, the FBI's Law Enforcement Ethics Unit	 
conducted a study in September 1999, which concluded that a	 
perception of such a double standard exists. The travel cost to  
the government for individuals who attended the Potts retirement 
party was $3,217.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-189R					        
    ACCNO:   A02616						        
  TITLE:     Joint FBI and Justice Investigation of Alleged Misconduct
by Senior FBI Personnel in 1997 and Our Queries About the	 
Possibility of Similar Misconduct in 2001			 
     DATE:   12/21/2001 
  SUBJECT:   Federal employees					 
	     Investigations into federal agencies		 
	     Cost accounting					 
	     Cost analysis					 
	     Ethical conduct					 
	     Senior Executive Service				 

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GAO-02-189R
     
GAO- 02- 189R FBI Investigation of Alleged Improper Conduct United States
General Accounting Office

Washington, DC 20548

December 21, 2001 The Honorable Patrick J. Leahy Chairman Committee on the
Judiciary United States Senate

The Honorable Charles E. Grassley United States Senate

Subject: Joint FBI and Justice Investigation of Alleged Misconduct by Senior
FBI Personnel in 1997 and Our Queries About the Possibility of Similar
Misconduct in 2001

This letter responds to your July 10, 2001, request and our subsequent
discussions with your offices concerning allegations of improper conduct by
senior Federal Bureau of Investigation (FBI) personnel in connection with an
October 9, 1997, retirement dinner for former FBI Assistant Director Larry
Potts. Your request letter referred to allegations that a conference was
scheduled at the FBI Training Academy in Quantico, Virginia, to provide a
reason for senior FBI personnel from around the country to travel to Mr.
Potts? retirement dinner in Arlington, Virginia, at government expense.
Specifically, you asked that we determine (1) whether the joint
investigation conducted by the FBI?s Office of Professional Responsibility
and the Department of Justice?s Office of Professional Responsibility was
thorough, (2) what disciplinary action resulted from the investigation and
whether the FBI addressed a concern that a double standard existed in how
the FBI?s Senior Executive Service (SES) and non- SES employees were
disciplined, and (3) the cost to the government associated with individuals
who attended Mr. Potts? retirement dinner. You subsequently requested that
we determine how many FBI employees traveled to Washington, D. C., at
government expense to attend retirement events for former FBI Director Louis
Freeh on or about June 20, 2001, and the cost of any such travel.

We conducted our investigation between August and September 2001 in
accordance with investigative standards established by the President?s
Council on Integrity and Efficiency. We interviewed knowledgeable Justice
and FBI officials, including cognizant investigators, and reviewed relevant
documentation, including the investigative file.

In summary, we determined that the October 1997 investigation of the alleged
improper scheduling of a training conference was thorough. The FBI and
Justice

GAO- 02- 189R FBI Investigation of Alleged Improper Conduct 2 investigators
reviewed the actions of eight SES employees. 1 Of the eight, three were

issued letters of censure by the FBI?s Deputy Director- one for failing to
exercise proper administrative oversight of the training conference and two
for inappropriate travel. Two individuals retired before receiving proposed
letters of censure. The remaining three individuals whose actions were
reviewed were not disciplined because they either had attended both the
training conference and the Potts retirement dinner or had some other
explanation for traveling to Washington, D. C., October 9- 10, 1997.

With respect to the concern about a double standard in disciplining SES and
non- SES (GS- 15 and below) employees, the FBI?s Law Enforcement Ethics Unit
conducted a study in September 1999, which concluded that a perception of
such a double standard existed. The investigation of misconduct relating to
the Potts retirement dinner was cited to support this conclusion. In
response, in August 2000 FBI Director Louis Freeh created a single
disciplinary system for all FBI employees.

The travel cost to the government for individuals who attended the Potts
retirement party was $3,217. This amount includes $1,864 for the two FBI
employees who received letters of censure for ?inappropriate travel? and one
employee who retired before receiving such a letter. The balance of $1,353
was the cost associated with the three others who attended the retirement
dinner and who, although not disciplined, were investigated.

The FBI is unaware, based on an internal review, of any employees traveling
to Washington, D. C., at government expense to attend events surrounding
Director Louis Freeh?s retirement in June 2001.

Investigation of Alleged Improper Conduct Was Thorough

On October 22, 1997, the FBI?s Office of Professional Responsibility and
Justice?s Office of Professional Responsibility initiated a joint
investigation into allegations that the FBI Training Division?s Assistant
Director and Section Chief improperly scheduled a training conference so
that special agents in charge who traveled to Mr. Potts? retirement dinner
could be reimbursed for their travel costs.

The FBI and Justice investigators reviewed the actions of eight SES
employees- the FBI Training Division?s Assistant Director and Section Chief
and six special agents in charge who registered for the October 10 training
conference and incurred travel costs for October 9- 10, 1997.

The joint investigation was thorough and included over 60 interviews and
sworn depositions from key witnesses. It determined that in September 1997,
the Assistant Director for the Training Division started planning and
organizing a retirement dinner to be held for Mr. Potts on Thursday, October
9, 1997, in Arlington, Virginia. Shortly

1 The actions of the Assistant Director and Section Chief of the FBI
Training Division in Quantico, Virginia, and six special agents in charge
who registered for the training conference and traveled during the 2 days on
which the dinner and conference were held (Oct. 9- 10, 1997) were reviewed.
All of the individuals who were investigated, except two of the special
agents in charge, are now retired from the FBI.

GAO- 02- 189R FBI Investigation of Alleged Improper Conduct 3 afterward, the
Assistant Director instructed his Section Chief to notify special agents

in charge in all of the FBI field offices that a one- day training
conference- entitled

?New Agent Curriculum and Training Conference ?- would be held at the FBI
Training Academy in Quantico, Virginia, on Friday, October 10, 1997. The
Section Chief?s October 2, 1997, notice to special agents in charge
contained no conference outline or schedule and informed recipients that
space was limited to 25 individuals on a first- come- first- served basis.
The course instructor was given 3 days to prepare for the conference.

According to investigators, approximately 140 persons attended Mr. Potts?
retirement dinner on October 9, 1997, including many special agents in
charge. However, only two special agents in charge attended the training
conference the following day at Quantico, although six had previously
confirmed that they would attend. The conference, including lunch, lasted
approximately 90 minutes.

FBI Took Disciplinary Action and Subsequently Addressed Concerns About a
Double Standard

The investigation was completed in November 1998. At that time, the FBI had
two disciplinary systems- one for non- SES employees and one for SES
employees, 2 which include all FBI special agents in charge. The SES
disciplinary policy required the FBI?s Office of Professional Responsibility
to provide the results of its investigations of SES members to the Deputy
Director. The Deputy Director was to then determine whether to convene an
SES Board, consisting of SES members, to review the investigative findings
and make recommendations to the Deputy Director on what disciplinary action,
if any, to take. According to policy, the subsequent decision of the Deputy
Director on disciplinary action was final, with no provision for appeal.

Accordingly, after completing its joint investigation with Justice, the
FBI?s Office of Professional Responsibility referred its findings to the
Deputy Director and recommended that he convene an SES Board. The referral
also recommended that the SES Board determine (1) whether the FBI Training
Academy?s Assistant Director and Section Chief ?neglected their duty by
inviting up to 25 SACs [special agents in charge] to a curriculum conference
of dubious substance to justify travel to the Potts retirement dinner?; (2)
whether some special agents in charge committed misconduct through
falsification of travel vouchers; and (3) whether, based on a preponderance
of the evidence, one special agent in charge lied under oath when
interviewed in connection with the investigation. 3 A statement of
disciplinary precedent for SES and non- SES employees accompanied the Office
of Professional Responsibility?s referral to the Deputy Director. The
statement showed that discipline for the types of offenses investigated by
the Office of Professional Responsibility varies considerably depending on
the particular facts and circumstances.

2 Overall FBI disciplinary policy for SES employees at the time was governed
by an April 1998 administrative and policy manual titled Federal Bureau of
Investigation Senior Executive Service Policy. 3 The special agent in
question was recommended for a letter of censure after passing a polygraph
test. The special agent retired before receiving a letter.

GAO- 02- 189R FBI Investigation of Alleged Improper Conduct 4 An SES Board
convened, reviewed the investigative findings, and on December 12,

1998, sent a memorandum to the Deputy Director that contained its analysis
of the investigation and its recommendations for disciplinary action. The
SES Board recommended to the Deputy Director that three special agents in
charge be issued letters of censure for inappropriate travel and that the
Training Division?s Section Chief receive a 15- day suspension for
neglecting his duty by failing to exercise proper administrative oversight
of the October 10, 1997, conference. In January 1999, the Deputy Director
adopted the SES Board?s recommendations for the three special agents in
charge, but one agent retired before receiving a letter of censure. The
Deputy Director did not adopt the Board?s recommendation to suspend the
Section Chief for 15 days, because he found it to be ?unnecessarily harsh.?
Instead, he issued a letter of censure to the Section Chief in January 1999
for failing to oversee the conference. The Board also recommended that the
Training Division?s Assistant Director receive a letter of censure and that
individual retired before receiving it.

As a result of the disciplinary action taken in the Potts investigation, in
September 1999 the FBI?s Law Enforcement Ethics Unit addressed the issue of
whether a double standard existed within the FBI regarding discipline of SES
and non- SES employees. The Ethics Unit study concluded that FBI employees
perceived that the discipline administered to SES employees was less severe
than that administered to non- SES employees who committed comparable
infractions. The study cited the disciplinary actions taken as a result of
various investigations, including actions taken as a result of the
investigation of misconduct relating to the Potts retirement dinner, as
evidence of a double standard. The Ethics Unit study was critical of the SES
Board?s recommendation to issue letters of censure to the special agents in
charge in the Potts retirement dinner investigation. The study stated, ?A
fair and reasonable reading of the final OPR [Office of Professional
Responsibility] report clearly shows both voucher fraud and lack of candor
on the part of several SACs.? In response to the study, on August 15, 2000,
former FBI Director Freeh announced the creation of a single disciplinary
system for all FBI employees to replace the two separate disciplinary
systems for SES and non- SES employees.

Cost Associated With Travel to Retirement Dinner

The total cost to the government for travel associated with the retirement
dinner was $3,217. This amount includes travel costs of $1,864 for the two
special agents in charge who were censured and the one who retired before
being censured. 4 The total also includes travel costs of $1,353 for three
other special agents in charge who attended both the training conference and
the retirement dinner and who were not disciplined.

FBI Unaware of Employee Travel Associated With Retirement Events for Former
Director Freeh

As you are aware, the Committee was informed in June 2001 that then FBI
Director Freeh was not available to appear at a Committee hearing because he
had announced his retirement and the hearing would be held on his last day
in office. The Committee was informed that FBI employees from around the
country would be

4 The Training Division?s Section Chief, who was also disciplined, did not
incur travel costs.

GAO- 02- 189R FBI Investigation of Alleged Improper Conduct 5 traveling to
Washington, D. C., to be photographed with Director Freeh on the day of

the hearing. In response to our query about travel at government expense by
FBI employees to attend farewell ceremonies, photograph opportunities, or
other retirement events for Director Freeh, the FBI?s Assistant Director of
the Office of Public and Congressional Affairs told us that after conducting
an internal review, the FBI is unaware of any such travel. He subsequently
told us that the FBI had no way to document which employees attended the
retirement events at their own expense, nor could it tell us how many
employees paid their own expenses. The Assistant Director also said that
Director Freeh did not want people to travel to Washington, D. C., to hear
his brief message to FBI employees because he knew that it would be sent to
all employees in due course. He said that the FBI did not announce Director
Freeh?s departure until shortly before the day he retired.

Agency Comments

The FBI?s Office of Professional Responsibility and Office of Public and
Congressional Affairs provided comments on a draft of this letter, in which
they concurred with the letter and its findings. We made their suggested
language changes where appropriate.

- - - - As arranged with your offices, unless you announce its contents
earlier, we plan no further distribution of this letter until 30 days after
the date of the letter. At that time, we will send copies of the letter to
interested congressional committees, the Attorney General, and the Director
of the FBI. This letter will also be available at www. gao. gov. If you have
any questions about this investigation, please call me at (202) 512- 7455 or
Senior Special Agent Andrew O?Connell at (202) 512- 7449. Senior Special
Agent Russell Rowe, Senior Analyst Shelia James, and Senior Attorney Barry
Shillito made key contributions to this letter.

Robert H. Hast Managing Director Office of Special Investigations

(600930)
*** End of document. ***