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NFC: River Scandal


For all you that have an interest in the river...

Faulty Data Used for Army Corps Projects _____Special Report_____
By Michael Grunwald
Washington Post Staff Writer
Wednesday, December 6, 2000; 12:35 PM

A Pentagon investigation has concluded that three top Army Corps of Engineers
officials manipulated an economics study in an effort to justify a
billion-dollar construction binge on the Mississippi and Illinois Rivers. The
probe also found that the agency has a systemic bias in favor of huge
projects that keep its employees busy and accommodate powerful industries.

The 168-page report on the investigation released this morning represents an
extraordinary rebuke to the Corps, whose leaders had predicted at
congressional hearings that it would fully vindicate their public works
agency.

Instead, investigators for the Army inspector general substantiated several
allegations of misconduct lodged by Corps whistleblower Donald Sweeney, who
was removed as head of the controversial economics study after he determined
that the costs of massive lock expansions to taxpayers would far outweigh the
benefits.

"I'm heartened that people took my concerns to heart," Sweeney said. "I'm
happy that the Army didn't shy away from a very complex investigation in a
politically charged atmosphere."

The investigators found that Corps deputy chief Gen. Russell Fuhrman,
division commander Gen. Phillip Anderson and district commander Col. James
Mudd all helped taint the most extensive and expensive study of navigation
improvements in Corps history.

Fuhrman and Mudd retired before the investigation was completed; Anderson now
commands the agency's South Atlantic division.

The Army report did not confirm Sweeney's allegations of wrongdoing by Gen.
Hans Van Winkle, head of the civil works program, or by several civilian
employees. It also found insufficient evidence to show that Sweeney was
demoted because of his no-construction findings.

But the report went well beyond the seven-year, $57 million study of the
Upper Mississippi system, challenging the overall ability of the Corps to
conduct honest analyses of projects it hopes to build.

The investigators noted a "widespread perception of bias among the Corps
employees interviewed," including almost every Corps economist interviewed.
The investigators concluded that the agency's aggressive recent efforts to
expand its budget and missions, as well as its eagerness to please its
corporate customers and congressional patrons, have helped "create an
atmosphere where objectivity in its analyses was placed in jeopardy."

"The testimony and evidence presented strong indications that institutional
bias might extend throughout the Corps," the investigators wrote. They noted
that even the agency's retired chief economist told them that Corps studies
were often "corrupt," and that several Corps employees cited "immense
pressure" to green-light questionable projects.

Defense Secretary William S. Cohen has forwarded the report to Army Secretary
Louis Caldera for possible disciplinary action, as well as "consideration of
any necessary changes in Army rules, regulations and practices concerning the
conduct of [Corps] studies."

Fuhrman, Anderson and Mudd all denied the allegations when confronted by the
investigators. The new commander of the Corps, Gen. Robert Flowers, said in a
recent interview that he has not seen a need for major reforms at the agency,
but noted that he had not yet seen this report.

This morning, Caldera announced that he has directed Flowers to review the
report – as well as an upcoming National Academy of Sciences evaluation of
the study itself – and propose any warranted changes to Corps navigation
studies next year. Special Counsel Elaine Kaplan praised the report, but
called on the Pentagon to take action sooner than that.

The Army Corps usually works in relative obscurity, but it is a vast and
far-reaching agency, with a $12 billion annual budget and a larger work force
than Microsoft Corp. It presides over many of the nation's most contentious
environmental issues, from the restoration of the Florida Everglades to the
water wars on the Missouri River to the proposal to breach the Snake River
dams. It also evaluates locks, dams, levees and other water projects proposed
by members of Congress, and builds the ones it deems worthwhile.

In February, The Washington Post reported Sweeney's allegations about the
so-called Upper Mississippi study, backed up by a trail of e-mails that
appeared to order the study team to manufacture a rationale for construction.
One urged the economists "to develop evidence or data to support a defensible
set of . . . projects." Another declared that if the economics did not
"capture the need for navigation improvements, then we have to find some
other way to do it." Yet another memo revealed that top generals had
announced an agency-wide initiative to "get creative" with studies in order
to green-light new projects.

"They will be looking for ways to get [studies] to 'yes' as fast as
possible," the memo announced. "We have been encouraged to have our study
managers not take 'no' for an answer. The push to grow the program is coming
from the top down."

Sweeney filed a disclosure with the Office of Special Counsel, which oversees
whistleblower allegations throughout the federal government, and Army
Secretary Louis Caldera announced a wide-ranging review. But the Corps
commander at the time, Gen. Joe Ballard, assured Congress that when the
investigation was complete, "the integrity of the Corps will be intact, and
you will know that the trust you have traditionally placed in the Corps is
well-founded."

But the investigators did not agree. They found, in the words of one Corps
planner, that the agency's leaders saw the study as a "giant construction
opportunity." They concluded that Mudd deliberately manipulated a key
variable in an economics model to boost projections of barge traffic, barely
nudging the projected benefits of new locks above the projected costs.

The report also blames Fuhrman and Anderson for creating a climate where
manipulation was likely.

Fuhrman, for example, criticized Sweeney's conclusion that no lock expansions
were necessary, declaring the Corps should be an advocate for inland
navigation.

"His advocacy guidance was the first step in the development of a climate
that led to abandonment of objectivity in the economic analysis," the report
said.

The e-mail trail makes clear that at higher echelons of the Corps, evidence
that weakened the case for construction was routinely described as "bad
news"; anything that strengthened it was "light at the end of the tunnel."

Anderson, meanwhile, was taken to task for failing to clarify orders from
Fuhrman that appeared to pressure the team to concoct a case for
construction. The investigators also found that he gave preferential
treatment to the barge industry, allowing its representatives to become
"improperly involved in the economic analysis."

At one point, according to the report, the industry was given sole
responsibility for a portion of the Corps economics work. "The barge industry
was viewed as a partner during the study." the report found.

The report's real surprise was the criticism of institutional bias at the
Corps, which was not even part of Sweeney's formal allegations. The
investigators traced this bias to three factors: a "Program Growth
Initiative" devised by the agency's generals to boost their budget, an
agency-wide emphasis on "customer satisfaction" in an atmosphere where the
customers in question want new projects, and an inherent conflict of interest
for Corps districts whose budgets are determined by the amount of projects
they approve.

"These influences created a tension with the honest broker role inherent in .
. . studies," it said.

In September, a series of Post stories raised similar questions about Corps
studies, with one article chronicling an array of errors the agency made
while analyzing a dredging project desired by the Port of Baltimore.

Congressional leaders then considered a series of dramatic reforms for the
Corps, including independent reviews for all major studies, stricter
benefit-cost requirements and tougher environmental standards.

Ultimately, though, they decided on a study of future reforms, and promised
more hearings next year. Water projects, after all, are a form of currency on
Capitol Hill, and the Corps is a highly popular agency.

At a news conference this morning, Sweeney said he hopes his disclosures will
provide some momentum for big changes at the Corps. He also acknowledged that
he will not hold his breath.

"I think this is an opportunity for change," said Sweeney, who still works in
the agency's St. Louis District. "It's remarkable that the Army found
systemic bias at the Corps. . . . But in my heart of hearts, I'm an
economist. I'm a professional cynic. I just don't know."

http://www.washingtonpost.com/wp-dyn/articles/A32629-2000Dec6.html


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