- The Washington Times - Thursday, July 26, 2001

Senior FBI executives scheduled a sham conference at the bureau's Virginia training academy to allow colleagues to attend at taxpayers' expense a 1997 retirement party for a top FBI official, an internal report shows.
While the "Integrity in Law Enforcement" conference was later found to have been cover for senior FBI managers to obtain improper reimbursements for personal travel to Washington, no one was disciplined other than to receive letters of censure.
Similar actions by rank-and-file FBI agents would have led to their firing.
The report was given last week to Senate investigators looking into recent FBI mismanagement and questions concerning such investigations as the Timothy McVeigh case and the arrest as a spy of agent Robert P. Hanssen.
More than 140 persons, including as many as nine FBI executives and special-agents-in-charge (SACs) of bureau field offices, attended the Oct. 9, 1997, party in Arlington for veteran agent Larry A. Potts, while only five persons showed up for the Oct. 10, 1997, conference in Quantico, Va., — which lasted about 90 minutes, including lunch.
Two months before the party, Mr. Potts — a onetime FBI deputy director — was under criminal investigation over his questionable handling of a standoff at Ruby Ridge, Idaho, during which three persons died.
According to a September 1999 report by the Law Enforcement Ethics Unit (LEEU) at the FBI Academy, an inquiry into the Potts party began Oct. 22, 1997, and focused on whether the Quantico conference was illegally used to justify travel reimbursements to senior agents, who otherwise would have been on personal business.
The probe, initiated by the FBI's Office of Professional Responsibility (OPR), reviewed accusations that the conference "was a sham, intended to be used as justification to allow financial reimbursement to SACs to travel to a peer's retirement function."
"Although this paper only summarizes a complicated case, there can be little question that OPR was correct in its initial suspicions," the LEEU report said, adding that a "fair and reasonable reading" of the OPR report "clearly shows both voucher fraud and lack of candor on the part of several" senior FBI executives who attended the party.
The 24-page LEEU report was part of a study commissioned by former FBI Director Louis J. Freeh to monitor the integrity of the bureau's organizational components.
The report said a board of FBI executives who oversaw punishment for senior managers in the Potts case ignored warnings by Mr. Freeh in a 1994 "Bright Line" memo that said voucher fraud and lack of candor or making false statements would result in dismissal. The board recommended letters of censure.
In addition, the report said, the board never addressed accusations that senior FBI managers lied concerning travel vouchers they submitted to attend the Potts party.
"As a result of the Potts dinner cases, one could argue that the director's 'Bright Line' promulgation in 1994 has been relegated to a faded chalk mark in the history of FBI discipline," the LEEU said.
Mr. Potts was not available yesterday for comment. An assistant who identified herself only as "Katie" said Mr. Potts has a "solid rule of not speaking to the media."
Now employed at Investigative Group International in Washington, he got a letter of censure for flack of oversight at Ruby Ridge.
In March 1997, Mr. Freeh established new disciplinary procedures for bureau rank and file and directed that disciplinary measures involving FBI senior managers were to conform "as closely as feasible." He modified that order in August 2000 to revise disciplinary procedures for senior managers "to mirror those for all other employees."
FBI spokesman John Collingwood said the inquiry was the "exact issue" that caused Mr. Freeh to ultimately change the FBI's disciplinary procedures.
"There is an expectation that all FBI employees will be held to a very high standard commensurate with our responsibilities," he said. "Senior executives must expect to be held to an even higher standard, simply because of their position of leadership."
After the LEEU report, Mr. Collingwood said, Mr. Freeh recognized that separate systems of discipline "fostered and magnified" the belief that senior managers were held to a lesser standard.
"After receiving a report on this exact issue, he abolished the separate system, concluding that we should not have a distinct disciplinary process that fosters even the perception of favored treatment. It was the right thing to do," he said.
The LEEU report said the OPR inquiry focused on an assistant FBI director, a section chief and seven special agents-in-charge, each of whom submitted vouchers seeking reimbursement for official travel.
Nobody was named in the LEEU report, although five retired in the Potts inquiry and were never disciplined. The report also did not detail the value of the reimbursements.
The report said:
One SAC, in a sworn deposition, said his trip to Washington was to attend a "career board" meeting, although no such meeting was scheduled. He was recommended by the board for a letter of censure for "inappropriate travel."
Another said his trip to Washington was to assist an employee seeking a hardship transfer. Arriving in Washington at 1:30 p.m. Oct. 9, 1997 — the day of the Potts party — he left the city at 10 a.m. on Oct. 10, 1997. The employee with whom he said he met was out of the country. He received a letter of censure for "inappropriate travel."
A third who filed travel documents to "attend meetings" in Washington had been censured, suspended, demoted and placed on probation 15 years earlier for using government travel for personal business. He received a letter of censure for "inattention to detail."
The report said an FBI section chief told OPR the conference was set up after the Potts party had been planned and he realized senior managers could use it to pay for their travel. But he told OPR investigators the conference was a "way to take advantage of the SACs being here," although there had not previously been "a perceived or articulated need to have such a conference."
The report said the section chief told OPR he did not believe "an objective observer would conclude this was a legitimate conference, as opposed to a cover for SAC travel."
Saying the section chief failed to exercise proper oversight, the board recommended a 15-day suspension. The recommendation later was determined by top FBI officials to be "unnecessarily harsh" and was downgraded to a letter of censure.
OPR investigators believed senior FBI managers filed false vouchers, misused government property, lacked candor or lied under oath, the report said. They cited 15 prior cases involving similar accusations resulted in dismissals, including former FBI Director William Sessions, who was fired for abusing government travel for personal reasons.

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