Bad Apples Fall in Bunches

By Stephen Barr

Friday, April 27, 2007; D04

Ugly. That's how to sum up this week for federal employees.

On Tuesday, the Government Accountability Office reported that federal employees in the Washington area had abused the federal transit benefits program, defrauding the government of at least $17 million a year.

A day later, the Senate Finance Committee sounded an alarm about tax deadbeats who work or once worked for the government. About 450,000 government workers and retirees owe about $3 billion in back taxes, the committee said.

In both instances, the fault-finding was bipartisan. The GAO probe was requested by Sen. Norm Coleman (R-Minn.) last year, and Sen. Carl Levin (D-Mich.) chaired the hearing that aired the transit fraud. Sen. Max Baucus (D-Mont.), chairman of the Finance Committee, and Sen. Charles E. Grassley (R-Iowa), the ranking minority member, joined in a letter to President Bush urging him to remind government employees and retirees of their tax obligations.

Federal employees are embarrassed by these reports. Most government workers are straight arrows, and all large organizations have their share of bad apples. The Internal Revenue Service, for example, has noted in past years that the tax compliance rate for federal employees is somewhat better than the rate for all Americans.

Still, this week's numbers look bad, Paul C. Light, a New York University professor who once was a Senate Democratic staff member, said yesterday. "Federal employees should be appropriately ashamed of the bad behavior of some of their colleagues," he said.

The two cases jeopardize support for the federal service from Democrats and Republicans, Light said, adding that they also "undermine the case for pay increases equivalent to the military in the future for federal employees."

Some participants in Wednesday's Federal Diary Live on washingtonpost.com expressed concern that the abuse will undermine the transit subsidy program, which was started as a way to reduce smog by encouraging federal employees to use mass transit.

"I hope this report doesn't lead to the reduction or elimination of this important benefit," one participant wrote.

The transit subsidies go to 300,000 federal employees nationwide. In its probe, GAO found that transit vouchers, worth up to $105 a month during the period under review, had been sold on eBay or passed along to others. Agencies had handed out transit subsidies to employees who had free parking spaces, no longer worked for the government or never worked for the government.

The GAO's report, prepared by Gregory D. Kutz and John J. Ryan, included eight examples of illegal use of the subsidies. Half of the cases involved highly paid workers -- General Schedule 14 employees earning more than $93,800. One of the GS-14 employees, a technology specialist at the IRS, admitted selling Metrocheks, as the voucher is known here, on eBay, and also acknowledged stealing agency computers to sell on the Internet. He was indicted on charges of theft of government property in February, GAO said.

The transit fraud is especially troubling because federal employees received warnings about misuse of government-issued credit cards in 2000 and 2001. At that time, GAO found numerous federal employees buying clothing, jewelry, eyeglasses and pet supplies -- all for personal use.

With help from the Office of Management and Budget, federal agencies have tightened their controls over travel and purchase cards. Agency officials told Coleman and Levin that they would take steps to hold down abuse of transit subsidies.

Max Stier, president of the nonprofit Partnership for Public Service, said the government cannot tolerate fraud. But, he said, "the reality of 300,000 people receiving benefits is that someone is likely to do something wrong. That does not mean the benefit for the vast majority should be lost."

Talk Shows

Venetia Bell, lawyer and mediator; Angelia C. Richardson, director of the civil rights office at the National Endowment for the Arts; Dexter Brooks, federal training and outreach coordinator at the Equal Employment Opportunity Commission; and Michelle A. Gavalek, associate executive director of the Federal Dispute Resolution Conference, will be the guests on "FedTalk" at 11 a.m. today on federalnewsradio.com and WFED radio (1050 AM).

Jonathan Scharfen, deputy director of U.S. Citizenship and Immigration Services, will be the guest on "The IBM Business of Government Hour" at 9 a.m. Saturday on WJFK radio (106.7 FM).

Stephen Barr's e-mail address isbarrs@washpost.com.