Fake CIA Spy’s $900,000 Fraud Leaves Congress Gobsmacked

An ex-Environmental Protection Agency official who for nearly 20 years masqueraded as a CIA officer and bilked the government out of nearly $1 million refused to testify today before a House committee investigating his epic fraud. But statements from federal investors, as well as the disgraced employee’s co-worker, raised new questions about ethical shenanigans at the agency and what senior leaders knew about a decades-long con.

John C. Beale has already pleaded guilty to impersonating a CIA officer, telling co-workers that he was flying around the world on top-secret missions, including to Pakistan, and charging the government for first-class airline tickets, luxury hotel rooms, and other perks along the way.

Beginning in the mid-1990s, Beale told senior EPA managers that he was working for the spy agency on secret assignments that required him to spend significant amounts of time out of the office. In reality, Beale was hanging out at his vacation home in Massachusetts, taking trips to California and London, or staying home reading books and doing housework. He admitted to spending at least two and a half years not working but still collecting a salary from the EPA.

Beale sat expressionless at a dais as an investigator recounted his ruse for members of the House Oversight and Government Reform Committee. More than one member compared Beale’s escapades to the film Catch Me if You Can, about a notorious globe-trotting grifter. When it came time for Beale to testify about his crimes, he asserted his Fifth Amendment right not to incriminate himself.

Beale worked on clean–air policy, hardly the stuff of spy novels. But he was so persuasive about his other life that "it was absolutely, universally accepted throughout the agency that he worked for the CIA," said Patrick Sullivan, the EPA’s assistant inspector general for investigations. Sullivan said Beale’s ostensibly clandestine work was "an open secret" among senior leaders of the EPA.

This raises the question of whether the senior leaders of the nation’s premier environmental regulatory agency are the most gullible lot in Washington. Or maybe they’ve seen one too many bad espionage flicks. The idea that Beale, a meek, bald air-policy analyst was secretly Jason Bourne was enough to make some committee members laugh out loud.

Beale was well-liked by co-workers and highly regarded for his work. He was given a Presidential Rank Award and other professional accolades, which helped him earn EPA leaders’ trust, the investigation revealed. Beale had also told colleagues that he served in Vietnam (a lie), which bolstered his claims that he was doing secret side-work for the government. Practically no one who worked with him at the EPA questioned why Beale would advertise those clandestine operations.

Sullivan told committee members that Beale began falsely impersonating a CIA employee in 1994. His successful career as a top-level environmental policy official wasn’t satisfying, so he made up tales of his cloak-and-dagger exploits "to puff up the image of myself," he confessed to investigators.

Beale told colleagues he was traveling on CIA business in Pakistan, when he was actually in Virginia or Massachusetts. At one point he told a co-worker that he needed to stay on at the CIA longer than expected because his replacement, who had been "tortured in Pakistan," needed more time to recuperate. Beale’s extended absence from the EPA cost taxpayers $350,000, Sullivan testified.

Beale took lavish trips, including a first-class flight to London, which he justified by saying he had a back problem. The ticket cost the government $14,000, 10 times the coach fare. Beale repeatedly flew first class because of his medical condition, which he documented with a letter from a chiropractor.

Beale charged the EPA more than $80,000 for trips to California, all of them fraudulent. He paid top dollar for a hotel room in London ($1,066 per night for four nights), when he could have secured a federal government rate of $375 per night.

The EPA employee who approved Beale’s travel expenses "never looked at the vouchers. She never looked at the receipts … because [Beale] was an [EPA] executive and because he worked for the CIA," Sullivan said.

"This was a person who had a positive reputation in the federal government," said EPA Deputy Administrator Bob Perciasepe, who had previously approved bonuses for Beale based on his performance.

Beale, who retired with a pension from the EPA this year, faces up to 37 months in prison and has agreed to pay more than $886,000 in restitution. A court has not scheduled his sentencing date.

Beale finally admitted to his lies when investigators in the EPA inspector general’s office, who were probing his travel and expenses, called his bluff about being a clandestine intelligence officer. They arranged for him to visit CIA headquarters and explain his work in a secure, classified setting. He never showed up and admitted to his lawyer that he didn’t work for the intelligence agency.

After Beale refused to answer questions at the hearing on Tuesday, committee chairman Darrell Issa turned his sights on Robert Brenner, a former senior EPA official and Beale’s boss during the 1990s. The two were also friends and co-owned the vacation home in Massachusetts. Committee members grilled Brenner about his relationship with Beale and questioned why he recommended a retention bonus for the confessed scam artist. Brenner said that Beale had been considering a new job outside government and that he wanted to persuade Beale to stay in government. An investigator said there was never a written record of the bonus.

Committee members also questioned Brenner about an $8,000 discount he received on a Mercedes-Benz, which was negotiated by an attorney who lobbied the EPA. Brenner said he’d agreed to come before the committee voluntarily and was only prepared to talk about Beale. But after repeated questioning he admitted to receiving the discount, which he said he had disclosed on a financial statement.

Members questioned Brenner about the nature of his friendship with Beale and the details of their financial relationship, which Brenner said he could not completely recall. Brenner told lawmakers that Beale is currently living in Brenner’s guesthouse in Arlington. By the end of the hearing, lawmakers seemed more interested in Brenner’s story than Beale’s.

Rep. Elijah Cummings, the committee’s ranking member, told Brenner that when the hearing began, he’d felt sorry for Brenner and believed that Brenner had been duped by Beale.

"My sorrow has turned into something else now, because I’m just wondering how much information you might have … since you all are such good buddies and he’s laying in our house," Cummings said. The lawmaker seemed incredulous about Brenner’s claims that Beale had "betrayed my trust."

"All this time you didn’t discuss this case? You didn’t say, Man, how did you do that?’" Cummings asked.

Brenner said that he had avoided talking to Beale about the investigation and avoided seeing him while it was still active. He said Beale had only started staying at his house in the past few weeks, after the investigation ended and Beale had pleaded guilty.

Lawmakers said the purpose of the hearing was not only to investigate Beale, but to probe the "negligent culture" at the EPA that led to ethical lapses and fraud.

It is "totally inexcusable to me" that EPA management failed to catch Beale and his web of "fantasies and lies," said Rep. Tammy Duckworth.

Sullivan, from the EPA inspector general’s office, said investigators were able to determine in one week, after a few phone calls, that Beale had never worked for the CIA.

Committee members looked bemused by the end of the hearing and appeared genuinely surprised to learn that Beale was living with his former boss and still getting money from the government.

After Beale refused to testify before the committee, he was escorted from the hearing room and was told to watch the proceedings on a monitor from an anteroom. Issa said the committee would attempt to compel Beale’s testimony at a future date.

In the meantime, while he awaits sentencing, Beale is collecting retirement pay from the federal government. "We are looking into that," the EPA’s Perciasepe said, as part of efforts to recover money that Beale has pleaded guilty to stealing.

Thank goodness the government shutdown didn’t stop the work of the House oversight committee. You rarely get theater this good in Washington.