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NFC: River Scandal
For all you that have an interest in the
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
The 168-page report on the investigation released this
morning represents an
extraordinary rebuke to the Corps, whose leaders had
congressional hearings that it would fully vindicate their
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
heartened that people took my concerns to heart," Sweeney said. "I'm
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;
commands the agency's South Atlantic division.
report did not confirm Sweeney's allegations of wrongdoing by Gen.
Winkle, head of the civil works program, or by several civilian
It also found insufficient evidence to show that Sweeney was
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
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
"The testimony and evidence presented strong indications that
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
pressure" to green-light questionable projects.
Defense Secretary William S. Cohen has forwarded the report to Army
Louis Caldera for possible disciplinary action, as well as
any necessary changes in Army rules, regulations and
practices concerning the
conduct of [Corps] studies."
Anderson and Mudd all denied the allegations when confronted by the
investigators. The new commander of the Corps, Gen. Robert Flowers, said in
recent interview that he has not seen a need for major reforms at the
but noted that he had not yet seen this report.
morning, Caldera announced that he has directed Flowers to review the
– as well as an upcoming National Academy of Sciences evaluation of
study itself – and propose any warranted changes to Corps navigation
next year. Special Counsel Elaine Kaplan praised the report, but
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
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
of Congress, and builds the ones it deems worthwhile.
In February, The
Washington Post reported Sweeney's allegations about the
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
"They will be looking for ways to get [studies] to 'yes' as
possible," the memo announced. "We have been encouraged to have our
managers not take 'no' for an answer. The push to grow the program is
from the top down."
Sweeney filed a disclosure with the
Office of Special Counsel, which oversees
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
investigators did not agree. They found, in the words of one Corps
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
"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
e-mail trail makes clear that at higher echelons of the Corps, evidence
weakened the case for construction was routinely described as "bad
anything that strengthened it was "light at the end of the tunnel."
Anderson, meanwhile, was taken to task for failing to clarify orders
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
"These influences created a tension with the honest broker role inherent
. . 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
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
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
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."
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