A Review of Allegations of a Double Standard of Discipline at the FBI
November 15, 2002
Office of the Inspector General
THE POTTS RETIREMENT PARTY
The Potts retirement party is widely believed within and outside the FBI to be an egregious example of senior managers being excused or lightly disciplined for misconduct that would have resulted in severe sanctions if less senior employees had been involved. We interviewed numerous FBI employees, including members of the SES, who believed that the disciplinary decisions stemming from this case were fundamentally flawed. We agree. This chapter examines that case and provides our assessment of it.
When Deputy Director Larry Potts retired from the FBI in 1997, a dinner was held in his honor in Arlington, Virginia, on October 9, 1997. The Assistant Director of the FBI's Training Division, Joseph Wolfinger, was responsible for coordinating the retirement dinner.
On October 2, 1997, seven days before the dinner, Wolfinger directed Training Division Section Chief John Louden to send an electronic communication (EC) to the field announcing an SAC conference at the FBI Academy in Quantico, Virginia, to discuss "New Agent Curriculum and Training" on October 10, 1997, the day after the dinner. The announcement did not contain a conference schedule, a starting or concluding time, a training identification number, or travel instructions. The conference was scheduled for a Friday, normally a travel day for FBI employees following the conclusion of conferences.
The Potts retirement dinner was attended by approximately 140 people, including many SACs. The following day the conference was held at the FBI Academy. Only five people attended - Wolfinger, Louden, two SACs, and an individual who was not an SAC. The FBI Supervisory Special Agent (SSA) who was in charge of the presentation was informed about the event on October 7. There was no formal agenda for the conference. The SSA reported that he discussed the "integrated case" - a fictional investigation for training purposes - which was to be a part of the new agents' training. The "conference" lasted no longer than 90 minutes and possibly as little as 45 minutes.
It was alleged that the conference was scheduled for October 10 to provide justification for the FBI to pay for the travel of SACs to attend the Potts retirement dinner. Under FBI policy, which was unwritten at the time but which we understand was commonly known, travel to a retirement function was considered personal business and not reimbursable by the government. It was further alleged that seven SACs falsified travel vouchers in order to receive reimbursement for travel to the dinner. OPR and the Department of Justice Office of Professional Responsibility (DOJ OPR) jointly investigated the matter. While the investigation was ongoing, four SACs who were subjects of the investigation retired. After the investigation, OPR referred the actions of four other SACs, Wolfinger, and Louden to the SES Board for disciplinary action.
The evidence in this case was described in a memorandum dated November 18, 1998, from FBI OPR Assistant Director Michael DeFeo to FBI Deputy Director Robert Bryant. We summarize that evidence below.
Assistant Director Wolfinger acknowledged that he instructed Louden to prepare the EC announcing the training. Wolfinger said that he knew that a number of SACs would be in the Washington, D.C. area for Potts' retirement party. He said he wanted to take advantage of their being in town to hold a conference on training. Wolfinger said that he would not have convened a conference like the one planned if the SACs had not been coming to Washington already. Since the SACs were going to be in the area anyway, he said he wanted them to travel to the FBI Training Academy to "talk to us about something that was very important to the Academy and [to him] and the FBI" - the curriculum and training for new agents.
Louden told OPR that the conference was Wolfinger's idea and was organized after the Potts dinner was scheduled. When asked whether the conference was set up to legitimize travel to the Potts dinner, Louden stated:
I would have to defer to what Mr. Wolfinger was thinking with that because when he brought it up to me, my idea was yeah, the SACs can obviously use this as a mechanism, but I looked at it as a way to take advantage of SACs being here.
Louden admitted there was no perceived need for the conference prior to the Potts function and stated that he did not believe an objective observer would conclude this was a legitimate conference, as opposed to a cover for SAC travel. Louden was polygraphed, and the results indicated no deception in his denial that the purpose of the conference was to increase the number of attendees at the retirement party. However, the important issue in this matter was not whether the conference was organized to increase attendance at the dinner, but rather whether the purpose of the conference was to legitimize travel for those who were already planning to attend, something Loudon essentially admitted in his interview. OPR recommended that an SES Board determine whether Wolfinger and Louden attempted to waste or misapply government resources or neglected their duty by inviting SACs to a conference of dubious substance to justify reimbursement for travel to the Potts retirement party.
Herbert Collins, then the SAC of the Chicago field office, filed travel documents stating that he was attending a "conference" in Washington, D.C. on October 9-10, 1997. He subsequently told OPR investigators that this reason was not correct and that the justification on the travel documents should have been to attend Potts' retirement party. According to Collins, at a June 1997 meeting of the FBI's SAC Advisory Committee, of which Collins was a member, then FBI Deputy Director William Esposito had authorized members of the Advisory Committee to travel to attend retirement functions for senior FBI officials.12 Collins told OPR that he had traveled to another retirement function in June 1997 for the former SAC in Detroit. With respect to the Potts matter, Collins initially stated that he had indicated on the October 1997 voucher that the purpose of his travel was to attend the retirement function. When later confronted with his travel voucher, which stated that he the purpose was to attend a conference, he said that it was an error on his part not to review the travel documents prior to signing them. OPR referred to the SES Board the question of whether Collins relied on the Esposito conversation as justification for travel to retirement parties (and negligently overlooked his staff's use of the justification of "meetings" or "conferences") or whether he used the justification of attending a conference because he was concerned that attending a retirement party would be rejected as a justification.
Van Harp, then the SAC of the Cleveland, Ohio field office and now the Assistant Director-In-Charge of the Washington field office, filed a travel request form stating that he was traveling to attend a "Conference." However, he did not attend the October 10 training conference. Additional travel documents filed by Harp in October 1997 stated that he had traveled to Washington, D.C. for a Career Board meeting on October 9 and 10, 1997.13 Although Harp was a member of the Career Board, the Career Board did not meet on either October 9 or 10.
When questioned by OPR, Harp acknowledged that the Career Board had not met on October 9 and 10. He stated that he used the term "Career Board" to mean business surrounding his role on the Career Board and not a specific meeting. Harp stated in a sworn deposition to DOJ OPR that his travel to Washington was really to attend meetings at FBI Headquarters. The evidence showed that Harp had no scheduled appointments, but he claimed to have made unscheduled visits to whoever was available at FBI Headquarters on matters relating to the Cleveland field office. He identified 11 senior-level executives with whom he "probably" or "could have" met. None of the 11 recalled specifically whether they met with Harp on that day, but several stated that they had met with him several times during that fall. One individual was on leave the day that Harp said he might have met with him. OPR referred to the SES Board the question of whether Harp's rationale for traveling to FBI Headquarters at the time of the Potts party constituted false or improper justification for official travel.
Victor Gonzalez, then a SAC in the New York Division, filed travel documents listing "travel to FBIHQ on Official Business" as his justification and "Management Travel" as his purpose. Gonzalez told OPR that the purpose of his travel was to assist an employee seeking a hardship transfer, to meet with a specific FBI official regarding his division's pending move, and to attend the Potts dinner. The evidence showed that he had no scheduled appointments at FBI Headquarters on October 9 or 10. Gonzalez admitted never going to Headquarters to discuss the hardship transfer, but he claimed to have met with a specific employee at an FBI offsite location about the move. FBI records revealed that the specific employee that he claimed to have met with was out of the country that entire week. Gonzalez identified two other employees that he "likely" met with, but neither could recall meeting with him. OPR referred to the SES Board the question of whether Gonzalez's rationale for traveling to FBI Headquarters at the time of the Potts party constituted false or improper justification for official travel.
Jack Daulton, then the SAC of the Atlanta Division, stated on his travel forms that his travel to Washington on October 9, 1997, was to "attend New Agent Curriculum Training Conference." Daulton never attended the conference. He told OPR that he intended to go to the conference, but the time of the conference was later than he had expected and made it impossible for him to attend because of his return flight to Atlanta.
Daulton told OPR that he had been told originally that the conference would start between 9 and 10 a.m. and that he had scheduled his return flight to Atlanta for 1:25 p.m. He said that he learned at the Potts retirement party that the conference would not start until 11 or 11:30 a.m. because of a new agent class graduation at the Academy. Daulton said that he started to go to Quantico the next morning, but then decided that he would not be able to make his flight. He stated that it was not his fault that he could not attend the conference because of the time change. He also said that he did not attempt to change the time of his flight because he felt he should get back to Atlanta. Daulton said that he arrived in Atlanta after 3 p.m. and went home.
Daulton was later reinterviewed by OPR and was asked about the fact that his rental car was returned to the Washington airport at 8:21 a.m. and his car in Atlanta was taken out of the Atlanta airport parking lot at 12:12 p.m. He responded that he did not recall returning to Atlanta that early but that he must have decided that he would not be able to attend the conference and make his 1:25 p.m. flight, so he took an earlier flight.
OPR recommended that the SES Board consider whether Daulton had intended to travel to the conference at Quantico and was deterred from attending because of an unexpected change in schedule, or whether he used the conference as justification for travel to Washington without any intention of attending the conference and lied under oath to OPR investigators. The SES Board later requested that Daulton be polygraphed regarding whether, on the morning of October 10, he actually intended to attend the conference. Daulton passed the polygraph test.
As disciplinary precedent, OPR provided two categories of cases to be considered by the SES Board. The first was "False voucher, misuse of government property/position." It cited 11 cases as precedent, including:
The second category of cases concerned "Lying under oath/lack of candor." The memorandum cited the following cases:
The initial SES Board met regarding the Potts party cases on December 14, 1998. The Board consisted of five SES members from FBI Headquarters. According to notes of the December 14 meeting, the five SES Board members and six non-Board observers, including OPR Assistant Director DeFeo, were present.
DeFeo began the SES Board meeting by making a presentation to the Board about the investigation of the Potts party issues. DeFeo noted in his presentation that this investigation was conducted jointly with DOJ OPR and that as a result DOJ OPR would be "watching" what they did. According to observers, Thomas Coyle, the Assistant Director of the Inspection Division and a member of the Board, stated during the meeting that he did not care what the Department thought and then went on to note that he would not rely on the forms (meaning form 540 (request for travel authorization) and form 1012 (travel reimbursement voucher)).14 Coyle later told the OIG that he was sympathetic to the fact that SACs are extremely busy and cannot give their personal attention to administrative details.
Notes taken by observers of the meeting indicate that the Board initially discussed whether the October 10 training conference was a sham. The Board concluded that the conference was not a sham, but that the planners exercised poor judgment in not properly preparing for it. The notes indicate that one Board member stated that he believed that a preponderance of the evidence showed that the conference was organized solely to justify travel to the party and that a letter of censure was insufficient for misconduct.
According to notes of the meeting, the Board discussed the unclear facts surrounding former Deputy Director Esposito's encouragement to attend retirement events. This was viewed as a mitigating factor for the SACs who attended the Potts party.15 The notes from the Board meeting indicate that the Board felt there was "no harm, no foul" with respect to Collins' trip, and that he did conduct some business during his trip. With respect to Gonzalez, the notes stated that the Board concluded it was a "bad practice," and for Harp and Clark the notes state, "seems clear he did some business." For Daulton, the notes state "reluctance to find lack of candor on a marginal fact." It appears from the notes that there was some discussion as to whether the SACs used poor judgment, but the consensus of the Board was that the policies on SAC travel were "too unclear for culpability."16
Two observers' notes indicate that the Board voted for a letter of censure for Wolfinger, an oral reprimand for Louden, no action for Clark, Collins, Gonzalez, and Harp except restitution of their travel expenses, and a polygraph for Daulton.
The Board met two days later, on December 16, 1998. Several witnesses told us that they believed that the Board met again because it had not finished its deliberations on the matter. Notes from this meeting indicate otherwise, and we were told by one observer that Board Chair Rubin Garcia, who at the time was Assistant Director of the Personnel Division, reconvened the Board because he believed that the initial decisions were inappropriate. Garcia told the OIG that he could not recall why the second Board meeting was convened.
Notes from the December 16 meeting show that the issue of whether the October 10 conference was a sham was discussed again. The notes state that there was a "strong presentation" by OPR Assistant Director DeFeo citing statements of several witnesses that the conference was a sham. One of the observers told the OIG that although he could not recall specifically, he believed that the Board did not change its initial finding that the conference had the appearance of impropriety but was not a sham. The notes show that the Board was unanimous in its finding that some adverse action was appropriate for Wolfinger and that a letter of censure was appropriate for Louden in light of his subordinate position to Wolfinger.
According to notes of the meeting, the Board also discussed whether there should be any changes to the recommendation of no discipline for Clark and Collins. The Board decided that Clark and Collins reasonably relied on Esposito's encouragement to attend FBI retirement events, but the Board was concerned that their travel vouchers did not reflect that they had traveled for that purpose. The Board voted four to one in favor of a letter of censure for both Clark and Collins for "inattention to detail" in filling out the travel vouchers. The notes reflect that in discussing Harp, the Board felt that it could not disprove his assertion that he talked with someone about the Cleveland Field Office during his visit to Washington, so there was no "candor issue." The notes indicate that the Board concluded that Harp "did (probably) visit people" at FBI Headquarters, but that the meetings were not necessary. The Board voted unanimously to censure both Harp and Gonzalez for unauthorized and inappropriate travel.
On December 24, 1998, the SES Board issued a memorandum reporting its recommendations. The Board recommended that Louden be suspended for 15 days for neglect of duty resulting in a perception of impropriety. We were unable to determine how it came about that Louden's punishment changed from the letter of censure agreed to during the previous Board meeting. The memorandum recommended that Clark and Collins be issued letters of censure for inattention to detail because they misstated the purpose of their travel on the FBI travel forms.17 It also recommended that Gonzalez and Harp be issued letters of censure for travel without adequate justification, in violation of the Federal Travel Regulations. The Board requested a polygraph for Daulton. The December 24 memorandum also indicated that a separate recommendation was to be issued as to Wolfinger. We were told by DeFeo that no recommendation as to Wolfinger was ultimately made, primarily because he was expected to retire but also because it was well known that his wife was very ill.
Former FBI Deputy Director Thomas Pickard and former Assistant Director Garcia, two members of the Board, told us that the Board took the Potts retirement party matter very seriously. They said that the Board believed most of the responsibility for the problems lay with the conference planners - Wolfinger and Louden. Both Pickard and Garcia also said that, as senior executives, the Board members were sensitive to the explanations offered by Clark and Collins that they had signed forms without really looking at them. Garcia said that all of the Board members were busy and knew what it was like to be in that position. Garcia stated that "inattention to detail" is different for a senior executive than it is for a line agent because of the amount of matters on a senior executive's agenda each day.
Garcia stated that the Board also was sensitive to the situation of Harp and Gonzalez because SES-level employees frequently do not have a written or planned agenda when they travel to FBI Headquarters, and it is possible to get a lot of work done just "walking the corridors." He said that the Board believed it was possible that Harp and Gonzalez might not recall exactly with whom they met at Headquarters because there is no requirement that they document what they did there. Pickard said that to the extent that the SACs got work done while in Washington for the party, it was not a waste of government money. Garcia said that the Board ended up concluding that Harp and Gonzalez should have had clearer agendas and that, without more structured plans, their travel was inappropriate. Garcia also said that both Harp and Gonzalez might have received a short suspension if that had been an option.18
Deputy Director Bryant issued the letters of censure as recommended by the Board. However, he decided that the recommendation of a 15-day suspension for Louden was "unnecessarily harsh," because he believed that Louden neglected his duty but did not engage in willful misconduct. Instead, Bryant decided that a letter of censure to Louden was sufficient. Bryant has retired from the FBI, and he did not respond to our requests to interview him on this matter.
On September 12, 2000, DOJ OPR wrote a memorandum to FBI OPR suggesting that the evidence supported findings of serious misconduct by Gonzalez, Harp, and Louden and warranted consideration of more significant discipline. DOJ OPR stated in its memorandum that the fact that the three received only letters of censure raised concerns that certain evidence in the file was not given sufficient consideration. FBI OPR Assistant Director DeFeo responded on November 9, 2000, that the matter had been decided by an FBI SES Board and, although the system of convening an SES Board to make disciplinary decision on SES members had been disbanded in the summer of 2000, he did not believe that FBI OPR had the authority to review the SES Board's decisions.
A review of the Potts retirement party discipline matter four years after the events is difficult because the facts were not entirely clear, and the findings in many instances rested on an assessment of the credibility of statements made by the subjects. Moreover, the fact that an important witness, Esposito, retired and refused to be interviewed made credibility assessments of certain subjects' statements more difficult.
Nonetheless, given the strong evidence against the subjects, we believe that the SES Board came to the result that it did because it gave undue weight to the subjects' explanations that at a minimum were uncorroborated and in many instances were refuted. The Board also appeared to accept some of the subjects' contentions that meeting with officials while walking the hallways of FBI Headquarters was sufficient to support a claim that they had accomplished business while in Washington. We do not believe that non-SES employees would have received a similar "benefit of the doubt," or that their punishment would have been the same given similar circumstances.
In addition, because of Wolfinger's impending retirement, Louden was the only Training Division official recommended for discipline by the Board. We did not find the Board's recommendation for a 15-day suspension of Louden to be unreasonable, and we believe the Deputy Director's decision to reduce the penalty to a letter of censure is highly questionable. Several officials we spoke to felt that this reduction was appropriate because Wolfinger, Louden's supervisor, had retired and would not be disciplined at all. Others felt that such a light sanction for Louden was inappropriate because he should not have followed orders to do something improper. These officials believed that reporting questionable orders to OPR or an FBI official was the appropriate course of action, and Louden's failure to do that merited serious discipline. We agree with the position that an employee at the level of a section chief could have and should have refused to follow Wolfinger's orders or reported the matter to OPR. In addition, we believe the discipline ultimately imposed on Louden was unduly lenient.
One of the allegations we reviewed was whether Coyle's participation on the SES Board was inappropriate because of a conflict of interest. We concluded that Coyle should not have participated because, at a minimum, an appearance of a conflict of interest existed, if not an actual conflict of interest. At the time of the Board decisions, Coyle and Potts were subjects in the Ruby Ridge investigation. The significant controversy about Ruby Ridge and the fact that many FBI managers believed that Potts was treated unfairly because of the Ruby Ridge allegations cannot be ignored. It was well known that many people wanted to attend the Potts retirement party to show support for him because of the Ruby Ridge investigation. That attitude was likely to be especially strong for someone like Coyle who also was a Ruby Ridge subject. We believe that Coyle should have recused himself or been removed from these Board proceedings.
It is also clear that the decisions in the Potts party cases exacerbated the perception of a double standard throughout the FBI. First, it was widely believed that agents in the field would have been summarily fired for voucher fraud and false statements under the Director's "bright line" rule. While it is difficult to directly compare one case to another, we note that in a precedent case that appears on point, a Unit Chief resigned after being proposed for dismissal for having lied about the purpose of a trip to Los Angeles and his personal relationship with the secretary who accompanied him. Voucher fraud also was involved because the Unit Chief's voucher misstated the purpose of his trip.
Under the FBI disciplinary system in place at the time of the Potts party, FBI OPR did not make final conclusions as to whether there had been misconduct and the nature of that misconduct. The SES Board made the findings of fact using OPR's factual record, including making disciplinary recommendations. It appears to us that the SES Board was unduly lenient and uncritical in its analysis of the facts available to it, and that the Board recommended very mild disciplinary action for the misconduct involved. In the face of what was perceived as a flagrant abuse of FBI travel vouchers, the punishment was only a letter of censure for a few of the FBI managers involved. We believe, based on our review of the facts and the FBI precedent, that this result was too lenient.