Probe Finds Federal Research Fraud

0 Comments | Insight on the News, August 2, 1999 | by Josh Mercer

Some say tipping off Uncle Sam is so easy that a school kid can do it, which also makes it child's play for graduate students at a top university.

The University of California, or UC, system has overbilled the federal government for millions of dollars in government research costs, according to a report from the General Accounting Office, or GAO. The university system paid graduate students higher wages than even professional federal scientists earn and passed along the tab to taxpayers. In just three years, the overcharge added up to nearly $20 million, or 10 percent of the $200 million Uncle Sam paid UC in total research-related wage compensation.

"This compensation scheme is a misuse of government funds," said Rep. Thomas Bliley of Virginia,

chairman of the House Commerce Committee. Bliley asked the GAO to investigate and issue a report; waste & abuse received an advance copy. At issue is the convoluted system by which government agencies contract with universities to conduct research projects.

Universities are allowed to charge the federal government for wages paid to researchers working on the project. But besides direct wages, many UC schools also waive tuition costs and fees to graduate students working on the research projects, instead charging taxpayers. These costs are higher for out-of-state residents, who constitute a large pool of the researchers.

When wage-compensation and tuition exemptions are tallied, the research students often make more than those who've graduated with doctorates -- despite federal roles prohibiting graduate students from receiving more compensation than those finished with schooling.

The GAO found that graduate students earned $19.3 million more than professional researchers with higher degrees. In addition, $4.4 million of the compensation given to graduate students exceeded the ceiling placed on individual compensation. The GAO concluded that "these payments sometimes exceeded the allowable costs that could be charged to such grants." Said Bliley, "It is a disturbing example of how weak guidance in federal programs can lead to waste and abuse by the recipients of those programs."

Bumbling Means Bias Cases Are Botched

Government agencies fail to gather data properly on discrimination cases involving their workers, while the Equal Employment Opportunity Commission, or EEOC, which is responsible for handling the cases, has allowed complaints to pile up unresolved. Federal workers filed 28,947 discrimination complaints in 1997, but the EEOC cannot identify how many people are involved in the cases or if the alleged bias was based on race, sex, age or religion, according to a recent General Accounting Office, or GAO, report.

"The reliability of the data EEOC collects from agencies and reports is questionable" said the GAO, because "EEOC does not collect and report data ... in a way that would answer some fundamental questions about the nature and extent of workplace conflicts"

But it's not only the fault of the EEOC. The U.S. Postal Service made mistakes on more than half of its discrimination cases in 1997, for instance, reporting that 70 percent of its 14,326 discrimination complaints were filed by white postal workers, when the tree figure was just 12 percent.

Surging caseloads of discrimination also have created a mounting backlog of cases at the EEOC. Between 1991 and 1997, the backlog of cases awaiting action doubled, reaching 34,267, while hearing requests tripled to 10,016 and appeals grew five times, to 9,980.

"The GAO report gives considerable credence to the allegation made by many federal employees that the EEOC lacks the integrity to protect their constitutional and civil rights," said Gerald R. Reed, president of an employee association called Blacks in Government.

A Fishy Story

Viola Allen, a 72-year-old widow, has tried for the last seven years to sell her 8-acre property in Lynnwood, Wash. Rains frequently mean basement floods for the emphysemic Allen, who must stay on oxygen all day. The mildew from the flooding aggravates her medical condition.

Naturally, Allen wants to sell the land -- especially considering the hefty $2,900 annual tax bite on the property valued at $591,000. But a local environmental group called Citizens for a Natural Habitat, or CNH, has blocked her from selling the land to a local developer, claiming that Tunnel Creek, which runs through the property, is vital to salmon. There's just one problem: Tunnel Creek completely dries up in the summer and has only a small trickle during winter.

"If salmon are going to get to Tunnel Creek," says Allen, "they would have to sprout legs and walk up there" The Washington Department of Fisheries agrees. It issued a formal opinion that Tunnel Creek is not a salmon-bearing stream. Lynnwood's environmental engineer agreed, as did a firm hired by the city to study the stream.

CNH's lawyer recently asked Allen to donate the land to the environmental group. "I told him in some not so very nice words: You can forget it," said Allen.