United States
Environmental Protection
Agency
September 23, 1969
Report of Audit
E1GM7-05-0571-81926
EPA's Office of
Criminal Investigations
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TABIE OF CONTENTS
Page
SCOPE AND OBJECTIVES 1
SUMMARY OF FINDINGS 2
ACTION REQUIRED 8
BACKGROUND 8
SUMMARY OF OCI's CRIMINAL INVESTIGATIONS
FOR FISCAL 1984-1986 10
FINDINGS AND REOCMMENDATIONS
1. OCI's COMPLIANCE WITH INVESTIGATIVE STANDARDS 18
2. A FORMAL AND INDEPENDENT QUALITY ASSURANCE FROGRAM WILL HELP
ASSURE INVESTIGATIVE PRODUCTIVITY 29
3. AN ACTIVE PAID INFORMANT PROGRAM WOULD BENEFIT EPA's CRIMINAL
ENFORCEMENT ACTIVITIES 36
EXHIBITS
1. MONETARY PENALTIES AND TIME OF ACTUAL INCARCERATION IMPOSED . . 42
2. PRODUCTIVITY MEASURES USED BY MAJOR FEDERAL LAW ENFORCEMENT
AGENCIES 46
APPENDICES
1. ASSISTANT AEMINISTRATOR FOR ENFORCEMENT AND COMPLIANCE
MONITORING REPLY TO OIG CRAFT REPORT 48
2. ASSISTANT AEMINISTRAIOR FOR ADMINISTRATION AND RESOURCES
MANAGEMENT REPLY TO OIG CRAFT REPORT 50
3. GENERAL COUNSEL REPLY TO OIG CRAFT REPORT 51
4. DISTRIBUTION 53
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V V
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lazy
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D C. 20460
SEP 23 |98g
OFFICE OF
THE INSPECTOR GENERAL
MEMORANDUM
SUBJECT: Audit Report No- E1GM7-05-0571-81926
Review of the Environmental Protection Agency's
Office of Criminal I
FRCM: Ernest E. Bradley III
Assistant Inspector G
TO:
Thomas L. Adams, Jr.
Assistant Administrator for Enforcement and
Compliance Monitoring
Charles L. Grizzle
Assistant Administrator for Administration
and Resources Management
We have completed an audit of the Office of Criminal Investigations (OCT)
of EPA's National Enforcement Investigations Center (NEIC). The objectives
of our audit were to determine whether OCI:
1. Establishes investigative priorities and procedures to ensure that
individual case tasks are performed in an efficient, effective and
timely manner.
2. Coordinates its activities with the Agency's regional offices to
ensure effective and efficient use of available resources.
3. Addresses all relevant aspects of the investigation in investigative
reports and assures that those reports are accurate, objective, timely,
understandable, and logically organized.
4. Performs and documents quality assurance reviews that ensure work
performance adheres to established policies and procedures, meets
standards of performance for criminal investigators, and is carried
out economically, efficiently, and effectively.
SOOFE AND OBJECTIVES
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We extensively used the President's Council on Integrity and Efficiency
(PdE) Interim Professional Standards for Investigations in performing our
audit. A Special Agent from our Office of Investigations assisted us in
reviewing case files to determine if OCI investigators met professional
standards. We also used a guide prepared by the U.S. General Accounting
Office for their review of investigative functions within the Office of
Inspectors General.
We performed the audit in accordance with the Standard for Audit of
Governmental Organizations. Programs. Activities. and Functions issued by
the Comptroller General of the United States. In the course of our review,
we identified and reviewed internal controls that would affect the criminal
enforcement program.
The weaknesses we found are included in this report. No other issues came
to our attention which we believed were significant enough to warrant
expanding the scope of this audit. We conducted our fieldwork from March 30,
1987 to March 31, 1988.
To determine the OCI's satisfactory ccanpliance with the PCIE investigation
standards, we reviewed (1) OCI's policies, procedures, and practices and
(2) closed criminal cases at OCI offices in Chicago, Kansas City, Atlanta,
Dallas, and [Denver. At these locations, we included all closed cases that
were opened during FYs 1984-1986. We included FY 1984 and 1985 closed
cases because several of these cases were closed during our review.
To further help us assess the criminal investigation program, we inter-
viewed OCI managers and Special Agents at the offices we visited. We
also discussed OCI activities and coordination with regional program
managers. Finally, we discussed with officials frcm the Federal Bureau
of Investigation certain aspects of their informant program and the value
of informants to their investigation program.
We issued our draft report on August 3. 1988 to the Assistant Administrators
for (1) Enforcement and Compliance Monitoring and (2) Administration and
Resources Management and the General Counsel, and requested a reply by
August 31, 1988. A copy of each reply to our draft audit report is
attached as Appendices 1, 2, and 3, respectively.
SUMMARY 0? FINDINGS
The Mministrator has stated that the Agency must continue to implement
aggressive enforcement actions against those who choose to violate
environmental laws and regulations. As part of this aggressive effort,
the Agency's criminal enforcement capability adds credibility to
administrative and civil court actions by demonstrating the Agency's
willingness to punish with significant fines and incarceration those
convicted of serious environmental crimes. Accordingly, the criminal
enforcement program must investigate serious violations in accordance
with professional standards and bring the cases to successful closure.
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Our review shewed OCI satisfactorily complied with most aspects of the
investigative standards we tested. Recent management actions will further
strengthen carpi iance with these standards. In addition, implementation
of an independent periodic quality assurance program will better ensure
maximum investigative productivity is achieved and that the Agency will
successfully bring to closure, cases involving flagrant violations of
environmental statutes and regulations. Implementation of a paid
informant's program should also allcw the criminal enforcement program
to more aggressively pursue flagrant violations.
1. Compliance With Investigative Standards
OCI generally complied with the five categories of professional standards
for investigations in the areas we tested (independence, due professional
care, planning, execution and reporting). OCI satisfactorily ccnplied with
all aspects of one standard, reporting. However, actions were needed to
better ensure OCI investigators fully ocanply with certain aspects of four
standards: independence, due professional care, planning, and execution.
OCI has already acted to better ensure compliance with the independence,
due professional care, and execution standards.
Independence
Although we found no evidence of impairment, OCT needed to take an
additional action to better ensure compliance by requiring GS-12/13
Special Agents to file Confidential Statements of Employment and
Financial Interests. When Statements of Employment and Financial
Interests were received, our review disclosed that the responsible
reviewing official did not sign all statements as evidence of
supervisory review.
We discussed these issues with OCI officials. We recommended that
OCI develop appropriate procedures to require Special Agents (GS-12
and above) to submit confidential disclosure statements and ensure
each confidential disclosure statement contains evidence of super-
visory review. OCI officials agreed with our finding and are taking
steps to implement our recommendations.
Due Professional Care
Our review showed that cases remain open for significant time with
little or no documented activity. As of March 31, 1988, 51 criminal
cases had been opened for at least 18 months. Thirty-ei^t of these
cases have been under review by the U.S. Attorney's office for several
months. OCT has taken action to address this issue.
Planning
Although OCI's organizational planning process ccnplied with the
planning standard, our review shewed regions varied significantly in
assisting OCT in developing OCI priorities. Consequently, OCI is less
assured that all regional enforcement priorities are fully addressed.
We are reccmmending the Assistant Administrator for Enforcement and
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Compliance Monitoring work with the Agency's Enforcement Management
Counsel to ensure all regions provide complete regional responses
to the NEIC Director on regional enforcement priorities.
Regarding individual case planning, our detailed review showed that
Special Agents prepared case coordination reports in accordance with
the Special Agent Manual. However, since the Manual required only a
summary, in general terms, of the anticipated future course of investi-
gation, an agent's description of future courses of action may not
have always adequately described the standard's planning elements.
If investigators do not provide this information, management will have
more difficulty in determining whether resources actually expended are
commensurate with the priority given the investigation and whether
open cases should remain open or be closed.
Execution
(Xir review of 89 closed cases disclosed that the investigations met
the elements of the execution standards with the exception of timeli-
ness as discussed in this finding under due professional care.
Reporting
We examined the reports in the 89 cases covered by our review. OCI
satisfactorily complies with this standard.
Our draft report recommended that the Assistant Administrator for
Enforcement and Compliance Monitoring (a) initiate a process to ensure
complete regional responses to the NEIC Director of regional enforcement
priorities and (b) ensure agents properly prepare case opening reports.
The Assistant Administrator substantially agreed with our draft report
finding and recommendations. To ensure ccmplete regional responses to
the NEIC Director's request for regional priorities, the Assistant
Administrator suggested that he send the request directly to the Regional
Administrators. This will facilitate follow-up by senior OECM management
to assure OCI incorporates regional priorities in carrying out its
activities.
Hie action planned by the Assistant Administrator, will better ensure
complete regional responses of regional enforcement priorities. As
the Assistant Administrator is the action official for this finding, he
needs to take steps to implement our draft report reccrnnendation to ensure
agents properly prepare case opening reports. We request the Assistant
Administrator provide us documentation to shew that OECM officials
implement his proposed procedures.
2. A Formal. And Independent Quality Assurance
Program Will Help Assure Investigative Productivity
OECM does not have an independent quality assurance program to ensure that
OCI is performing in an efficient and effective manner. Consequently, OECM
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senior management loses a means for determining whether OCT area offices
open and develop cases which meet the Agency's objective that criminal
cases serve as a timely and forceful deterrent against environmental laws.
NEIC began an in-house quality assurance review of its area offices in 1984
and 1985. These initial reviews shewed several significant issues that
needed management's attention. For example, the 1984 review found:
o Coordination with EPA's Emergency Response Brandies appeared to be of
major concern. The priority of on-scene coordinators was in clean-up
operations rather than in potentially identifying the responsible
parties. OCI area offices indicated they were rarely notified of a
potential criminal case which on-scene coordinators became aware of
because of an emergency response situation. OCT officials believed
clear guidance was needed fran Regional Administrators or Deputy
Regional Administrators concerning notification of OCI by Emergency
Response Teams. OCI believed a nationwide policy frcm the
Administrator's office could be helpful in this matter.
The 1985 review also disclosed significant issues. For example:
o One office needed to set priorities in line with the guidance issued
by Headquarters, and refrain fran pursing cases with lew priorities.
There was a lack of clear priorities being set when it came to
opening cases. In addition, the review team found that considerable
improvements were needed in the quality of investigations, and the
types of violations which are pursued. Too much emphasis was placed
on merely opening cases and making referrals to the Justice Department
to increase the statistics for the criminal enforcement programs.
A review, however, was not made in 1986 to ensure identified deficiencies
were corrected. NEIC officials informed us that they performed another
review in 1987, but they did not document the results. A review in 1988 is
not planned. In addition, these reviews were conducted largely by OCI
staff.
An independent quality assurance program is important to help assure
management that quality enforcement cases are timely pursued and success-
fully resolved. The Agency must focus on results. After selecting the
right cases and enforcement responses, the Agency must follcw through and
bring the cases to closure.
We recanmended in our draft report that the Assistant Administrator for
Enforcement and Ccsnpliance Monitoring implement periodic formal manage-
ment reviews of OCT area offices composed of individuals independent
of the area offices under review.
The Assistant Administrator substantially agreed with our draft report
finding and recommendations. He provided us two memoranda to show actions
he has taken to better ensure the effectiveness of NEIC support activities.
He added that OECM's responsibilities in the Criminal Enforcement Program
enccrnpass the Office of Criminal Enforcement Council as well as OCI.
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Accordingly, he will establish independent reviews which will cover all
facets of the program including investigative, legal, policy, and
administrative operations. The report will be directed to him.
The action planned by the Assistant Administrator substantially corrects
the deficiency cited in our draft report. We recommend the Assistant
Administrator take appropriate action to ensure senior OECM officials
implement his proposed action for conducting independent reviews of the
criminal enforcement program. We request the Assistant Administrator
provide us a copy of the procedures implementing the review process.
3. An Active Paid Informant Program Would Benefit
Criminal Enforcement
OCI does not have an active paid informant program because of delays in
receiving legal advice regarding the mechanics of making such payments and
funding undercover operations. Consequently, OCI's enforcement of
environmental laws cam be adversely affected when it is unable to pursue
leads because agents are unable to riake necessary informant payments.
Informants are important to a criminal investigative program. The Federal
Bureau of Investigation (FBI), for example, considers development of
informants as a critical investigative tool. An October 1978 memorandum
frcni the FBI Director to all FBI Special Agents stated:
. . . Other than the intelligence and resourcefulness of our
investigative personnel, infomar.ts are our single most valuable
investigative tool. Because informants are so valuable, every
effort must be made to obtain ma>:±num benefit from their use.
FBI officials advised us that they have ar, active paid informant program.
OCI's ability to pursue enforcement oopoitunities is adversely affected
by the lack of a paid informant program. OCI Special Agents in Charge
(SAC) provided us examples of leads th£:t cculd not be investigated because
there was a need for informant remuneration:
o One SAC explained that an informant had knowledge of a company ille-
gally disposing of hazardous wsirta. The validity of the allegation
could not be substantiated independently by OCI and payments to the
informant were necessary. The lead was iwt investigated because
payments could not be made to tne informant to determine the validity
and extent of the illegal disposal cf waste.
o A SAC received two separate and presumably unrelated inquiries fron
anonymous informants. Both informants inquired as to the possibility
of receiving payments from EPA in return for information leading to
the conviction of environmental violators. One informant indicated
that he was a current employee of an Alaskan corporation which was
illegally disposing of hazardous waste. The other employee indicated
that he was a current employee of a major Washington corporation
illegally disposing of hazardous waste and making false reports to the
Government. Neither informant would provide any additional informa-
tion without remuneration.
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Od has a major responsibility towards enforcing the Agency's environmental
laws. An active paid informant program is important to help ensure that
the Agency's enforcement resources are used to maximum benefit. Without an
active informant program, the Agency lessens its chances of uncovering and
penalizing the most flagrant violations. OECM, the Office of General
Counsel, and the Office of Administration and Resources Management need to
work out the details of making payments for undercover operations and
payments to informants.
We recanmended in our draft report that the Assistant Administrators for
(a) Enforcement and Compliance Monitoring and (b) Administration and
Resources Management, and the General Counsel resolve the details leading
up to approval of an informants program. Hie Assistant Administrator for
Enforcement and Compliance Monitoring should then initiate the informant
program.
Hie Assistant Administrator for Enforcement and Oonpliance Monitoring
agreed with our draft report recommendations. Hie Assistant Administrator
for Enforcement and Compliance Monitoring and General Counsel requested
additional information so that each Assistant Administrator and the General
Counsel can clearly identify their respective responsibilities.
The General Counsel's response completes his responsibility by confirming
that the Agency can use its appropriations to investigate violations of
environmental statutes and regulations. The General Counsel's response
also confirmed that an imprest fund can be used for undercover operations
and payments to informers. His response added that his offioe discussed
with NEIC and Financial Management Division staff the issue of dollar
limitations on imprest fund transactions. This discussion included
procedures to follow to raise current dollar limits on imprest fund
transactions if the current limits are inadequate.
We recommend that the Assistant Administrators for (1) Enforcement and
Compliance Monitoring and (2) Administration and Resources Management
implement our draft report recommendations. We also recommend the Assistant
Administrator for Enforcement and Compliance Monitoring ensure all Special
Agents are aware of any additional procedures needed to control payments to
informants.
* * * ~
The Assistant Administrator for Enforcement and Compliance Monitoring,
provided us, in various instances, additional information regarding the
findings in our draft report. After reviewing this data, we made
appropriate changes to our findings before we finalized this report.
In responding to our draft report, the Assistant Administrator for
Enforcement and Compliance Monitoring also added that he found the study
performed in a professional manner and he expects the findings will be
quite helpful in improving the performance of the Agency's criminal
enforcement program. He stated, however, that neither he nor the Deputy
Assistant Administrator for Criminal Enforcement were consulted concerning
this audit. After further discussion of this cement with senior OECM and
NEIC officials, ve view the Assistant Administrator's ocranents an internal
OECM natter. A March 17, 1987 memorandum from the Assistant Inspector
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General for Audit to the Assistant Administrator informed him of our review
and on March 24, 1987 OIG and OECM officials met to discuss the nature of
our review. NEIC officials also stated that we kept them well informed
about our audit's progress through position papers and briefings of the
issues discussed in our report.
ACTION REQUIRED
In accordance with EPA Order 2750, the action officials are required to
provide this office a written response to the audit report within 90 days
of the audit report date.
BACKGROUND
Since the early 1970s, numerous Federal statutes have been passed and
reauthorized to cover all environmental media (water, air, toxics,
noise, hazardous waste, etc.). Enforcement of these statutes and their
accompanying regulations has been the principal function of the U.S. EPA.
Since then, grcwing public awareness of the need to protect the environment
has resulted in significant programs on both the Federal and State levels
to enforce environmental requirements.
In June 1976, the first extensive guidelines for proceeding in criminal
cases were issued by the Agency's Assistant Administrator for Enforcement.
Fran that time until late 1980, criminal cases referred to the Department
of Justice were handled by the then existing Office of Enforcement, without
the benefit of a trained investigative staff.
In January 1981, the Attorney General of the United States confirmed the
authority of EPA to initiate, or assist in investigations, into potential
violations of the criminal provisions of the environmental statutes that
the Agency administers.
The National Enforcement Investigations Center (NEIC) headquartered in
Denver, CO, which is under EPA's Office of Enforcement and Carpiiance
Monitoring (OECM), established an Office of Criminal Investigations (OCT)
to manage the criminal investigative staff. In the fall of 1982, the
Agency hired an in-house staff of 23 experienced criminal investigators
formerly with such law enforcement agencies as the Federal Bureau of
Investigation, the Drug Enforcement Administration, the Bureau of Alcohol,
Tobaoco and Firearms, and the Internal Revenue Service. The investigative
staff is new 49 agents. Hie agents operate out of eleven locations—
Washington, DC and the ten EPA regions. NEIC is headquartered in Denver.
The Agency has a staff of attorneys experienced in both criminal and
environmental law who work with the investigators and the Department of
Justice in the actual prosecution of criminal cases. They are located at
EPA Headquarters within OECM. Besides providing legal and policy guidance
and general advice to the investigators and the Agency in criminal enforce-
ment matters, OECM attorneys along with designated regional attorneys, act
as the primary source of expertise within the Agency for criminal cases.
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In recent years, Congress has been a major impetus behind the Federal
Government's oumniitment to making environmental criminal enforcement a
top priority. As the various environmental statutes are reauthorized,
Congress has upgraded criminal enforcement provisions from misdemeanors
to felonies and increased the maximum levels of incarceration and monetary
penalties for convicted offenders. Indicative of this trend are the
criminal penalties contained in the Hazardous and Solid Waste Amendments
of 1984, the Safe Drinking Water Act Amendments of 1986, the Superfurd
Amendments and Reauthorization Act of 1986, and the Water &iality Act
(Clean Water Act Amendment) of 1987. The Agency expects this trend to
continue as reauthorization is considered for the Clean Air Act and
Federal Insecticide, Fungicide, and Rodenticide Act. The following
summarizes the Agency's request for funds for the criminal investigations
program for fiscal 1986, 1987, and 1988:
Fiscal
Year Funds Workvear
1986 $925,200 25.0
1987 1,961,500 35.0
1988 2,330,200 42.4
The Agency stated in its Justification Of Appropriation Estimates For
Committee On Appropriations that these increases were to allow the
criminal investigation program to continue to operate as a national
network with emphasis on close coordination with administrative and civil
judicial enforcement initiatives. In addition, the program expects a
significant increase in criminal activity due to the provisions of the
reauthorized Resource Conservation and Recovery Act (RCRA) and water
quality enforcement (where new felony provisions provide irtproved
opportunities for deterrence).
The Federal Bureau of Investigation (FBI) assists EPA in investigating
environmental offenses. The FBI reports that increased funding has been
integral to its success in investigating environmental crimes. Through
in-house training seminars sponsored by FBI headquarters, more than 100
special agents have received training in the identification and investi-
gation of environmental crimes. Currently, the FBI has about 160 active
environmental crimes investigations assigned to 90 special agents
nationwide. The FBI reports that it has used aerial surveillance, long
range photography, closed circuit television, remote monitoring, paid
informants, and electronic surveillance to investigate environmental
offenses.
In a December 1987 landmark prosecution resulting from a joint FBI-NEIC
investigation, the FBI funded toxicology examinations of three individuals
for proof of chemical poisoning by their employer under the "knowing
endangerment" provision of RCRA. Test results were presented at the trial,
which resulted in the corporation's conviction for having knowingly placed
the employees in imninent danger of death and bodily injury through the
illegal storage and disposal of chemical wastes.
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SUMMARY OF OCT'S CRIMINAL INVESTIGATIONS
FOR FISCAL 1984-1986
This section summarizes as of March 31, 1988, the results of CCI's criminal
investigations opened during fiscal 1984 through 1986. These statistics by
themselves do not determine the success of either the criminal investigative
program or the Agency's success in deterring violations of environmental
laws. In this regard, the Agency's Draft Criminal Enforcement Strategy
explains that the Agency considers criminal enforcement as a means, together
with civil, judicial and administrative remedies, of gaining compliance by
the regulated conmunity.
Accordingly, the Agency's policy has been that criminal cases are effective
when all media programs use criminal enforcement as one of the options
available to them, along with civil and administrative remedies, to help
achieve their ccsnpliance goals. The strong deterrence aspect of criminal
enforcement is achieved when program officials select the strongest cases
to pursue. This section shews the results of the Agency's efforts to use
criminal enforcement as one means to obtain compliance by the regulated
community.
Our review, including discussions with senior regional officials, shows
additional recent efforts to streamline and strengthen the enforcement
process. These actions are discussed in our report. Further, the issues
we discuss under the Findings and Reccaranendations Section of our report
will help assure senior management that maximum productivity is achieved
by the criminal investigative program.
Statistical Summary
CCI opened 227 cases from October 1, 1983 to September 30, 1986, (three
fiscal years) . OCI has closed 176 cases of the 227 cases as of March 31,
1988, for various reasons ranging frcsti criminal convictions to referrals to
other agencies. This section of our report discusses the breakdown of
these cases.
The pie chart on the next page categories tlie 227 cases.
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STATUS OF OCI CASES OPENED BETWEEN
OCTOBER 1, 1SB3 AND "SEPTEMBER 30 , 1986
AS OF HftRCH 31 . 1988
7-OTAL CASES 227
OPEN CASES
51/22.51
r"
i—¦
INDICTMENTS
51/22.5*
I
J
DECLINED PROSECUTION [-
20/8.71
UNFOUNDED ALLEGATIONS
21/9.31
INSUFFICIENT EVIOENCE
29/12.8%
NOTE:
NUMBER OF CASES/
PERCENTAGE OF TOTAL CASES
REFERRED TO OTHERS
55/24.21
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The following chart shews by region the status of the 227 cases opened in
FYs 1984, 1985 arri 1986.
NUMBER OF CASES
BY REGION
_1
_2
_3
_4
_5
_6
_7
_8
_9
10
i!1
Total
Indictments
4
4
3
1
4
1
4
11
6
10
3
51
Open Cases
2
5
5
3
4
6
5
9
4
5
3
51
Referred To Others
2
0
4
11
6
5
3
11
3
6
4
55
Unfounded Allegations
0
0
2
8
1
2
2
1
1
2
2
21
Insufficient Evidence
2
1
3
4
2
1
3
5
5
3
0
29
Declined Prosecution
1
1
3
2
2
0
1
5
4
1
0
20
Total 11 11 20 29 19 15 18 42 23 27 12 227
1 Note: Region 11 is the NEIC Special Investigations Unit which handles
cases of nationwide significance.
This chart does not reflect cases opened prior to FY 1984 which have been
closed. For example, NEIC officials advised us that Region 4 closed in
FY 1986 six cases opened prior to FY 1984, which resulted in indictments,
penalties or imprisonment.
In addition, officials advised us of severed reasons for the variance
between offices in cases resulting in indictments, penalties or imprison-
ment. These include: (1) the length of time to develop specific cases and
have them reviewed by the Department of Justice, (2) recent establishment
of Kansas City and Dallas offices by NEIC in fiscal 1984 and 1985, (3)
educating and obtaining the commitment of Assistant U.S. Attorneys (ADSA)
to process environmental violations. Until recent reauthorizations of
environmental statutes, violations of environmental statutes were only
misdemeanors as discussed belcw.
Felony Provisions Not In All Statutes
The Agency's policy to seek felony provisions in environmental
statutes upon reauthorization by Congress should result in AUSAs
giving environmental offenses higher priority. For example, in 1986,
the enactment of the Resource and Conservation Recovery Act (RCRA)
amendments included felony provisions for serious violations. The
Agency's Draft Criminal Enforcement Strategy explains that the
strategy of the Criminal Enforcement Program is to seek an increase in
the penalties to felony level crimes for all of the serious violations
of each environmental statute. At the time we ccnpleted our review,
the following environmental acts contained felony provisions.
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o Resource Conservation Recovery Act (RCRA).
o Safe Drinking Water Act.
o Clean Water Act.
o Comprehensive Environmental Response, Compensation and
Liability Act of 1980.
The following environmental statutes still do not contain felony
provisions.
o Clean Air Act.
o Toxic Substances Control Act.
o Federal Insecticide, Fungicide, and Rodenticide Act.
The enactment of felony provisions in these remaining statutes,
according to NEIC and OCT officials, would enhance the ability of the
criminal enforcement program in carrying out its responsibilities.
The following sections discuss the segments of the pie chart.
Indictments
Investigative productivity is extremely difficult to measure. According to
a Department of Defense Inspector General (DOD-IG) informal survey, indict-
ments, convictions, referrals to U.S. Attorneys and fines and penalties are
used by other law enforcement agencies to measure investigative productivity.
The survey summarized the results of investigative productivity measures
used by six major law enforcement agencies and three Assistant Inspectors
General for Investigations. The following table summarizes the produc-
tivity measures that other agencies most frequently use:
FREQUENTLY USED MEASURES
OF INVESTIGATIVE PRODUCTIVITY
Number of Enforcement
Measure Agencies rising
Indictments 7
Convictions 6
Presentations/Referrals 5
to the U.S. Attorney
Fines and Penalties 4
For exanple, the Federal Bureau of Investigation was included in the survey
and reported that it uses these four measures in determining investigative
productivity. Exhibit 2 summarizes the productivity measures used by the
nine agencies surveyed. Senior NEIC and OCT officials said they use these
same measures to determine productivity.
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Of the 227 cases opened in FYs 1984, 1985, and 1986; 51, (22 percent), have
resulted in indictments as of March ,31, 1988. We analyzed each of the 51
cases which resulted in an indictment. The table belcw shows the results
of the 51 cases. Twelve, or six percent, of the 227 cases opened during the
three fiscal years have resulted in imprisonment as well as penalties.
BREAKDOWN OF INDICTMENT. PENALITY. AND IMPRISONMENT CASES
Case Results Number of cases
Penalties Only 14
Penalties/Prison Sentence Suspended 20
Penalties With Imprisonnent 12
Inprisomrent Only 1
Trail Acquittals/Cases Dismissed 4
Total 51
A further breakdown of the 51 indictments shewing ronetary penalties and
time of actual incarceration imposed is shown on Exhibit 1 and summarized
below.
CASES PLEA INDIVIDUALS CORPORATIONS TIME
CASES BARGAINED FINED FINED INCARCERATED
51 43 63 31 132 Months
$824,702 $3,809,301 22 Individuals
13 Cases
Cpen Cases
Of the 227 cases, 51 (22 percent) rervain opened. The issue of open cases
originally came to the attention of the OCT Assistant Director in Hay 1985.
He found that only ten percent of the ca^es he reviewed had demonstrated
activity within the last 60 days. He advised special agents that "...
there is to be demonstrated activity on all investigations on a monthly
basis." Such action by the agents would better ensure timely ccanpletion of
investigations.
Cur review showed that cases can still retrain open for a significant time
with little or no documented activity. Tlva following table shows that as
of March 31, 1988, the 51 open criminal ca^es had been open for at least 18
months.
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AGING OF OPEN CASES
Months Open Number of Cases
18-24
25-30
31-36
37-48
20
16
7
_8
51
Total
Open cases can be unresolved for reasons that are difficult for OCT to
control. For example, cases in this category included those which are
under grand jury investigation.
Other cases, however, according to OCI's management information reports,
show cases as still under field investigation. The time expended on cases
did not always justify the length of time cases remained open. For example,
one OCI area office closed a case in January 1987, which was initially opened
in November 1985 (14 months). Special Agents and NEIC staff expended a
total of three days on the case during the time the case was open.
NEIC and OCI officials advised us that they waited frcm February 1986,
until January 1987 for a decision by an AUSA on whether to prosecute the
case. In January 1987, the AUSA declined to prosecute.
After we completed our fieldwork, OCI senior officials took additional
actions to improve timely resolution of cases including instances where
Special Agents have been waiting several months for ALJSAs decisions on
whether to prosecute the case. In March 1988, the OCI Deputy Assistant
Director issued a memorandum to all Special and Resident Agents in Charge
(SAC/RAC) which explained a new case policy. The policy requires SACs and
RACs to take the following actions on all cases open 16 months or longer:
1. For cases remaining open, the SAC/RAC must prepare a memorandum
to the Deputy Assistant Director detailing the justification to
maintain its current status.
2. Obtain concurrence frcm the AUSA regarding the merits of the case.
The policy explains that "... justification for case continuation that
the case has been sitting at the U.S. Attorney's Office with no
movement cn their part is unacceptable. Agents must list meeting
dates with the first Assistant and head U.S. Attorney detailing their
verbal assurance that the case will be pursued."
If the U.S. Attorneys Office does not provide assurance that the
case will be pursued, agents are directed to seek a declination
frcm the assigned AUSA.
The memorandum further urges SACs/RACs to institute a case tracking manage-
ment procedure to effectively implement this policy.
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The recent requirement that SACs/RACs take certain actions on all cases
open 16 months or longer should better ensure that cases will be timely
resolved. NEIC, as part of a quality assurance review of area offices,
should ensure that each SAC/RAC develop a case tracking management
procedure to effectively implement this new policy (see Finding No. 2).
Cases Referred To Others
OCI referred 55 (24 percent) of the 227 cases to EPA's program officials
(34 cases) or to another Federal or State Agency (21 cases) for civil/
administrative action. We could not evaluate the success of cases
referred to another agency because OCI's management information system does
not track the disposition of cases referred to another agency.
Hie issue of tracking referrals to outside agencies originally arose in
1984 during OCI's initial management review of area offices. An executive
summary noted that, in general, referrals to outside agencies are not
tracked. For example, an October 1985, management review of one OCI area
office reported that area cases with serious allegations were referred to
either State law enforcement organizations, the FBI, or to other law
enforcement agencies. According to most SACs, at the time staff was not
available to track large number of referrals to EPA offices, State law
enforcement agencies, or the FBI.
Hie review team recommended that tracking systems and communication channels
needed to be established for all allegations which were referred to regional
offices or to outside agencies. In January 1988, during our review, OCI,
issued a memorandum outlining a more specific process to track leads/
allegations within OCI. The memorandum, hcwever, did not cover disposition
of leads outside OCI. NEIC officials explained they are developing a system
to track leads referred to the FBI. Officials also anticipate the system
will include tracking leads referred to states.
Cases Closed Because Of Insufficient
Evidence. Unfounded Allegations. Or
Prosecution Declined
OCI closed 70 (31 percent) of the 227 cases in these three categories. OCI
management reviews in 1984 and 1985 disclosed problems associated with
starting up a criminal enforcement program that could contribute to cases
falling into these three categories. For example, the reviews reported:
o Reluctance on the part of the SAC in one office to critically screen
each potential case before assignments were made. The management
review report of another OCI office states that the policy of the
former Associate Enforcement Counsel was to open cases when informa-
tion was received because of his heavy emphasis cn the number of cases.
o At another office agents also stated that because of the guidance
issued by the former Associate Enforcement Counsel, many cases were
prematurely opened. After initial inquiries were conducted, many
of those cases lacked any merit and were immediately closed. The
review stated that this policy contributed to a drain cn resources
that could have been more appropriately used in the pursuit of
substantial violations.
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Other problems which could contribute to cases falling into this category
were cited by the management review team. The review team reported that
case assignments at one office were unevenly distributed among the agents.
Also, since many agents were new to the Agency, they did not have a clear
understanding of the Agency's criminal priorities.
The investigation standard for planning prepared by the Presidents7 Counsel
on Integrity and Efficiency explains that upon receipt, each allegation
must be evaluated against investigative functions, priorities and guidelines
for one of three decisions:
o Initiate investigative activity;
o Refer to another appropriate authority; or
o File for appropriate period, no action.
OCI's Special Agency's Manual provides agents guidance on this standard.
The manual explains in the initiation and conduct of an investigation that
the agent should conduct a preliminary inquiry and evaluate the lead. A
preliminary inquiry determines the credibility of the allegation and makes
an initial assessment of the need for a more thorough investigation. The
preliminary investigation is brief and involves no extensive commitment of
resources or time. The purpose of the preliminary inquiry is to reach an
initial determination on the need for a complete investigation.
Conclusions
The statistics shew that the criminal program can result in penalties
against significant violations of environmental laws. Felony provisions in
all of the environmental statutes would better enhance the ability of the
criminal program to carry out its responsibilities.
The statistics presented in this section do not by themselves shew the
success of the criminal investigative program or whether maximum
investigative productivity is obtained. The findings that follow discuss
issues and contain recommendations which will help assure senior Agency
officials that maximum productivity is achieved by the Agency's criminal
investigative program.
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FINDING NO. 1 - OCI/S COMPLIANCE WITH INVESTIGATIVE STANDARDS
The Office of Criminal Investigations (OCI) generally carpiied with the
five categories of professional standards for investigations in the areas
we tested (independence, due professional care, planning, execution and
reporting). OCI satisfactorily complied with all aspects of one standard,
reporting. However, actions were needed to better ensure OCI investigators
fully comply with certain aspects of four standards, independence, due
professional care, planning, and execution. OCI has already acted to
better ensure compliance with the independence, due professional care, and
execution standards.
The investigative standards we tested were developed by the President's
Council on Integrity and Efficiency (PCTE). The PCIE adopted General and
Qualitative standards which can be applied to all types of investigative
efforts. These efforts include background and security inquiries, all
forms of misdemeanor and felonies (vice, violence, property, white collar
crime, etc.), administrative and pre gram related matters, and special investi-
gations requested by any appropriate authority.
The General Standards apply to the desired qualities for investigators and
the organizational environment in which they perform. These standards
arVi-npgg the "need for" criterion and include independence and due
professional care.
The Qualitative Standards apply to the management functions and processes
in which investigators perform. They address the "how to" criterion and
include planning, execution, and reporting.
The following table summarizes OCI's compliance with each standard:
SUMMARY OF OCI OOMPUANCE WITH
INVESTIGATION STANDARDS
Standard Compliance
Independence OCI acted to further compliance with this
standard.
Due Professional Care OCI acted to further compliance with this
standard.
Planning Policies and procedures in place. Action
should be caken to ensure full ocnpliance.
Execution OCI acted to further compliance with this
standard.
Reporting OCI satisfactorily complies with this standard.
The following sections discuss our assessment of OCI's compliance with the
five investigative standards that we tested.
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Independence
This standard requires that OCT and its individual investigators must:
(1) be free, both in fact and appearance, frcm impairments to independence;
(2) be organizationally independent; and (3) maintain an independent
attitude. The standard makes agencies, investigative organizations, and
investigators responsible for maintaining independence, so that judgments
used in obtaining evidence, conducting interviews, and making recanmenda-
tions will be impartial and will be viewed as impartial by knowledgeable
third parties.
With regard to the investigative function being free of external impairment
to independence, we did not find any evidence of external interference in
our sample of 89 closed cases or in our discussions with investigators and
OCT management.
Although we found no evidence of impairment, OCI needed to take an addi-
tional action to better ensure compliance by requiring GS-12/13 Special
Agents to file Confidential Statements of Employment and Financial
Interests (confidential statement). At the time of our review only GM-14s
and higher grade personnel were required to file confidential statements.
Without requiring confidential statements frcm GS-12/13 Special Agents,
management may be unaware of actual, potential or apparent conflicts of
interest at these grade levels. Thus, OCI management would not be in a
position to resolve or avoid conflicts of interest.
In recognition that employee conflicts of interest can occur, EPA
regulations at 40 CFR Part 3 explains the Agency's requirements for filing
confidential statements. The confidential statements help to assure
management that employees do not have direct or indirect financial interests
that conflict substantially or appear to conflict substantially with their
duties and responsibilities as Federal employees. EPA regulations at 40
CFR Part 3.300(3) includes "Enforcement activities" as an activity which
may affect a financial interest.
In September 1986, the General Accounting Office (GAD) issued a report:
"Caipliance With Professional Standards by the EPA Inspector General" which
concluded that the Inspector General require confidential statements frcm
GS-12 investigators. GAQ's audit shewed that sane investigators were often
GS-12s who were not required to submit financial disclosure statements.
GAO explained that because these investigators work with a great deal of
independence in gathering evidence to prove or disapprove violations, it is
inportant that the Office of Inspector General be aware of their financial
interests.
Similarly, our review of case files also shew that Special Agents work with
a great deal of independence in gathering evidence. The performance
standards for a GS-12 Special Agent require the agent to:
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1. Conduct interviews to secure information in assigned investigations.
2. Advise supervisors in a timely manner of all significant investiga-
tive developments in an assigned case.
3. Prepare required investigative reports which accurately reflect the
topic at hand.
In addition, the performance standards for a Resident Agent in Charge (GS-13)
requires him/her to:
1. Conduct and supervise the conduct of criminal investigations within
an assigned area of geographical responsibility in a resource effec-
tive manner to provide for a maximum deterrent value and to enhance
the Agency's credibility in meeting its enforcement responsibilities.
2. Supervise a staff of criminal investigators and clerical personnel
to ensure operation of the unit in compliance with established policy,
procedures, and within financial constraints.
OCI management needs to knew of outside employment and financial interests
of Special Agents and Resident Agents in Charge because of the nature of
their work. Management will then have better assurance that investigators
will be independent of any assigned case. Although our review of cases and
disclosure statements showed no conflict of interests, we noted an instance
in which Od could not investigate the following lead because of a conflict
of interest:
The OCI Area Office received a telephone call frcm a state agency
regarding a oenpany that allegedly disposed of waste, fr-awppTiwi with
manifests, and had installed an illegal by-pass to the city sewage
lines. The State Agency requested OIC criminal investigative
assistance.
The OCI Area Office did ncrt conduct the investigation because the
Special Agent In Charge (SAC) knew that one of his agents had a rela-
tive working for the conparry and that another of his agents owned
stock.
In this case, the SAC knew of these conflicts of interest with the Special
Agents in his office only because the Special Agents volunteered the infor-
mation. The SAC subsequently referred the investigative natter to another
law enforcement agency.
The above instance shows that Special Agents can have conflicts of interest
which management may not be aware of unless the agent voluntarily discloses
the conflict to his supervisor. Since investigators make important
decisions regarding the daily management of their respective assignments,
OCI should require financial disclosure statements from GS-12/13 Special
Agents.
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Review of Statements of Employment and Financial Interests
When Statements of Employment and Financial Interests were received, our
review disclosed that the responsible reviewing official did not sign all
statements as evidence of supervisory review. For example, 13 of 16 annual
statements filed in July of 1986, showed no direct evidence of supervisory
review. In addition, four updated reports filed in November 1986 and three
updated reports filed in March 1987, also showed no evidence of supervisory
review.
In lieu of signing off on each form, the reviewing officer prepared the
following statement "I have received all of the required reports, reviewed
and signed each and any necessary remedial actions have been completed".
This statement is then forwarded to the Office of General Counsel (OGC).
An overall statement, such as the one provided OGC, is not sufficient evidence
that each statement has been reviewed for completeness and possible areas
of conflict. EPA regulations at 40 CFR Part 3.603 requires that these
statements be reviewed by a responsible official for actual or apparent
conflict of interest. The responsible reviewing official needs to show
evidence of his review on each statement.
We discussed these issues with OCT officials. We recommended that Od
develop appropriate procedures to:
1. Require Special Agents (GS-12 and above) to submit confidential
disclosure statements.
2. Ensure each confidential disclosure statement contains evidence of
supervisory review.
OCT officials agreed with our finding and took steps to implement our
reccrmendations. OCT has required GS 12/13 Special Agents to file State-
ments of Employment and Financial Interests. In July 1988, NEIC and OCI
officials advised us they have received these statements and ensured each
statement oontains proper evidence of a review by the responsible reviewing
official.
Due Professional Care
This standard requires that investigators perform their work with "due
professional care" and in a timely, efficient, thorough and legal manner.
Although the terra "due professional care" is not defined, the standards
require the investigation function to:
o gather and report evidence in an unbiased and objective manner in an
effort to develop all facts bearing on an issue;
o conduct investigations with due respect for the rights and privacy of
those involved;
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o retain, at least until final disposition of the case, investigators'
interview notes that are prepared in a criminal investigation; and
o conduct and report on investigations promptly.
OCI ccmplies with the first three elements of this standard. OCI's Special
Agents Manual sets forth specific policies and procedures for Special
Agents to follow. The policies and procedures were intended to reflect and
be consistent with recent case law concerning arrest, search and seizure.
In this way, the Manual established the process by which suspected criminal
activity is investigated and prosecuted. Special Agents are advised to
consult with EPA's Criminal Enforcement Division and the local U.S.
Attorney's Office for additional guidance when unusual issues arise during
an investigation.
We also reviewed closed case files to determine agents' compliance with the
manual's required procedures. To make our judgments, we reviewed OCI case
records and interviewed OCI officials to determine if investigators followed
logical and reasonable leads in collecting information in order to decide
the merits of allegations. In the 89 closed investigations we reviewed,
the investigators adequately gathered and reported evidence in an unbiased
and objective manner to either prove or disapprove the allegation.
Our review shewed that cases remain open for significant time with little or
no documented activity. As of March 31, 1988, OCI had 51 cases for at
least 18 months. Twelve of the cases were under review by the U.S.
Attorney and 13 cases still under field investigation. The remainder (26)
were under Grand Jury, pretrail planning, etc. As discussed on page 15,
OCI has taken action to correct this issue through the Deputy Assistant
Director's memo of March 14, 1988. OCI officials stated they have closed
an increasing number of older cases and receive better documentation of
investigative activity by Special Agents.
Planning
The planning standard requires that investigative organizations maintain a
planning system to determine programs ard operations where investigations
are needed, establish priorities for the work, and ensure that investiga-
tions are conducted efficiently and effectively. The planning standard
makes the investigative organization responsible for (1) organizational
planning, which sets priorities for the investigation function's work,
and (2) individual case planning, which requires the preparation of an
investigation plan for each case.
Organization Planning
Organizational planning requires the investigative organization to deter-
mine programs and operations where investigations are needed, establish
priorities for the work, and ensure the investigations are conducted
efficiently and effectively. A written annual plan should discuss
investigative strategies and priorities, budget and staff resources, and
expected accomplishments, benefits and results.
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Our review shewed OCI's planning process addresses the above elements.
Currently, a memorandum by the OCT Assistant Director to all agents
describes the Office of Enforcement and Compliance Monitoring's {OECM)
priorities for each fiscal year. For example, the OECM Assistant
Administrator stated in 1987 that his objectives in 1988 were to:
1. Focus criminal investigations upon areas of designated Agency and
program priorities to better integrate the criminal enforcement
program into overall Agency efforts.
2. Implement the reconmendation from the Criminal Management Review to
ensure that relationships of all parties involved in the criminal
enforcement program are working smoothly.
3. Prcmote regional support for the Criminal Enforcement Strategy so
that it is effectively implemented.
4. Aggressively implement new legislation strengthening criminal enforce-
ment authorities to maximize the deterrent value of these tools.
5. Prcmote the visibility of the criminal program within EPA through
timely dissemination of information to Program Offices and Regions
about criminal cases brought arid their resolution.
6. Enhance the ability of EPA and State personnel to assist in criminal
investigations by training them in the criminal enforcement process
and the unique demands of criminal investigations.
The OCI Assistant Director subsequently emphasized in a February 1987,
memorandum to all Special Agents that the Assistant Administrator's objec-
tives were the priorities for the criminal enforcement program.
In FY 1989, the Justification Of Appropriation Estimates For Ccsranittee
(Si Appropriations stated the criminal enforcement program would emphasize
the following specific programs:
Waste - illegal disposal, storage and transportation of waste to unpermitted
facilities; blended fuel/waste oil; loss-of-interim-status reduc-
tion in on-site capacity; land disposal bans; snail quantity
generators;
Water - data falsification connected with greater use of toxicity limits
in NFDES permits; unpermitted discharges;
Toxics - illegal disposal of PCBs; falsification of data; deliberate
failure to report data to EPA;
Air - air toxics, asbestos demolition; lead phase-dewn; major motor
vehicle pollution control violations.
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Regional Enforcement Priorities
Although OCE's organizational planning process complied with the planning
standard, our review showed that regions varied significantly in assisting
NEIC in developing OCT priorities. Consequently, OCI is less assured that
all regional enforcement priorities are fully addressed.
In September 1986, an Agency Criminal Enforcement Management Work Group
issued a report on ways to enhance the effectiveness of the criminal
enforcement program. The report included in its recommendations that
regions transmit their specific regional priorities to NEIC at the
beginning of each fiscal year. The NEIC Director stated, however, that
no regions transmitted priorities for FY 1987.
In November 1987, the NEIC Director again requested each Regional
Administrator to provide regional enforcement priorities. At the time
we completed our review, nine regions had provided scare type of response.
A review of the responses shewed a wide variance in the type of response
received frcm each region:
o Six regions listed priorities on a program specific basis.
o One region listed only one specific program area—the illegal importa-
tion of hazardous wastes to island territories. The remainder of the
region's submittal did not include any priority information.
o One region gave priorities in a generic fashion in the form of example
where there was (1) a strong potential for causing mortality or health
impairment to humans, (2) overwhelming evidence of a willful, flagrant
violation or significant violations of more than one environmental
statute, and (3) a great need for deterrence or where there is
significant damage to environmental values.
o One region's response stated that it will not target a specific
geographical area or a particular program. Hie Regional
Administrator's response instead asked that OCI be alert for
"enforcement opportunities that serve as visible signs to various
segments of the regulated community as well as the general public
that EPA is serious about enforcing its laws."
o One region did not submit a response.
In January 1988, the NEIC Director advised supervisory agents of the regions'
responses. The Director stated there were gaps regarding the distribution
of active investigations to regional priorities. He requested agents in
each region to solicit from regional programs, any information consistent
with regional priorities as submitted by the Regional Administrators and
which would result in productive criminal investigations.
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To assist Cd agents in reviewing their cases according to regional prior-
ities, the Agency needs to ensure that all regions submit responses and
that the responses are specific and accurate. For example, one region's
response stated that "Coke Oven Batteries" was a criminal priority. NEIC's
preliminary review shewed no active Coke Oven Batteries in the region at
that time.
A refinement of the process for obtaining regional priorities and ensuring
the priorities are accurate and specific could be addressed by the
Enforcement Management Council. The Deputy Administrator's January 25,
1988, memorandum which established the Council, explained that one function
of the Council is to foster region specific strategic planning, including
enforcement targeting.
Individual Case Planning
Regarding individual case planning, the Professional Standards for
Investigations states:
Investigative priorities should be established and objectives should
be developed to ensure that individual case tasks are performed in an
efficient and effective manner.
This standard recognizes the general limitation of available resources and
requires that attention be given to the establishment of case priorities.
Priorities should be extended to both qualitative and quantitative aspects
and the proper degree of supervision should be carefully considered. This
may best be achieved by preparing an investigative plan which NEEC requires
as a part of the case opening report.
An investigative plan should set forth the nature of the investigation,
while specifically listing: (1) the substantive issues to be developed; (2)
a specific plan of action; (3) the estimated required staff time; and (4)
the anticipated results or acccmplishments. The plan should also establish
a time phased approach that ensures individual leads are accomplished on a
timely basis.
A plan containing these elements is important because overall management of
the investigation, according to OCI's Special Agent Manual, is the sole
responsibility of the Special Agent acting under the supervision of the SAC
or RAC. An investigative planning document helps assure management that
the investigator has oaipleted his initial preliminary inquiry into the
allegation and that opening a case and performing a thorough investigation
is warranted.
In November 1983, the NEIC Director issued a memo to Special Agents which
described a comprehensive format for case opening reports and investigative
plans. The memo asked agents to describe substantive issues, specific
plans of action, required staff time and anticipated results.
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Oct's Special Agent Manual, however, only briefly addresses the need for
individual case planning. The manual specifically states that a case
coordination report will summarize, in general terms, the anticipated future
course of the investigation, including the interaction between the agent
and Regional Counsel and regional program employees.
Oar detailed review showed that Special Agents prepared case coordination
reports in accordance with the Special Agent Manual. Hcwever, since the
manual required only a summary, in general terms, of the anticipated future
course of investigation, an agent's description of future courses of action
nay not have always adequately described the standard's planning elements.
The following cases are instances where OCT management oould have benefited
by requiring a detailed case plan:
o OCI closed a case in January 1987, which was initially open in November
1985, (14 months). OCI agents expended a total of 3 days on the case
during this time. The case file did not have an investigative plan
which shewed: (1) a description of what issues needed development; (2)
a specific plan of action; (3) staff time needed; (4) anticipated
results or accomplishments; and (5) expected completion date.
o OCI closed a case in December 1986, which was initially opened in
January 1985, (23 months). About 58 staff days were spent to investi-
gate an allegation regarding a company's illegal disposed of hazardous
waste. The case file shewed activity by the Special Agent in January
and March 1985. The next activity occurred in July 1985, when OCI
referred the package to the Assistant U.S. Attorney. The case file
did not have an investigative plan which clearly described the agents
specific course of action, estimated staff time and expected comple-
tion date.
As discussed on page 15 of this report, our review disclosed cases which
remained open with apparently little activity by the assigned agent. While
these cases contained a case coordination report, the reports did not show
that agents adequately developed planning elements. If investigators do
not provide this information, management will have more difficulty in
determining whether resources actually expended are commensurate with the
priority given the investigation and whether apen cases should remain
open or be closed.
Execution
The second qualitative standard for investigation organizations is the
execution of investigations. Investigations should be conducted in a timely,
efficient, thorough and legal manner. The collection of evidence should be
undertaken in such a way as to ensure all relevant material is obtained and
that the chain of custody is preserved, and that the evidence is properly
admissible in a subsequent proceeding.
Cur review of 89 closed cases disclosed that the investigations met the
elements of the execution standards with the exception of timeliness as
discussed in this finding under due professional care.
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T?gpnr-Hnrr
The standard requires that investigators keep agency management fully and
currently informed of appropriate aspects of OCI operations and findings.
Also, reports prepared for individual investigation cases should discuss
all relevant issues and be accurate, objective, timely, and well-organized.
We examined the reports in the 89 cases covered by our review. OCI
satisfactorily complies with this standard.
Conclusions
OCE generally complied with the five investigative standards we tested.
However, our review shewed:
o Additional action by OCI could further ensure compliance with the
independence standard. OCI took action to correct this issue by
requiring GS-12 and 13 investigators to file Confidential Statements
of Employment and Financial Interests and to ensure these statements
contained evidence of supervisory approval.
o OCI needed to timely resolve cases to meet the timeliness aspect
under the due professional care standard, cases could remain cpen
for a significant time without resolution. OCI has acted to address
this issue through its Deputy Assistant Director's memorandum of March 14,
1988. Officials advised us that Agents are providing better documentation
and that an increasing number of cpen cases are being closed.
o Od met all aspects of the standard for organizational planning.
However, regions need to refine their process for providing NEIC
information regarding regional priorities. The Agency could address
this issue through the Enforcement Management Council which has the
function of fostering region specific strategic planning, including
enforcement targeting.
With respect to individual case planning, OCI needed to ensure that
Special Agents fully comply with the NEIC Director's November 1983,
memorandum for preparing Case Opening Reports. Case Opening Reports
will then meet all aspects of the standard for individual case planning.
o With the exception of conducting investigations in a timely fashion, we
found OCI met all aspects of the execution standards. We discussed
this issue under due professional case. Our review also showed OCI
carpiies with all aspects of the reporting standard.
Draft Report Recommendations
We reoenmended in cur draft report that the Assistant Administrator for
Enforcement and Compliance Monitoring:
1. Initiate a process to ensure ccnplete regional responses to the NEIC
Director of regional enforcement priorities. This process could be
initiated through the Enforcement Management Council.
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2. Ensure that when agents open cases they follow the NEIC Director's
November 1983, memorandum for preparing Case Opening Reports. The
reports should include:
o a listing of the substantive issues to be developed,
o a specific plan of action,
o estimated required staff days,
o anticipated results or accomplishments, and
o time estimate for expected completion date.
Agency Reply To PIG Draft Report
In reply to our draft report, the Assistant Administrator for Enforcement
and Compliance Monitoring agreed with our conclusions and reccsnmenda-
tions. The Assistant Administrator's stated that requests to Regional
Administrators to obtain complete responses of regional enforcement
priorities be signed by him. This will facilitate follcw-up by senior OECM
management to assure that OCT incorporates regional priorities in carrying
out its activities.
The Assistant Administrator also agreed with our second recommendation.
He believed our recommendation should be directed to the Director of
OCT who has first line supervisory control over the Special Agents and
should stress that adherence to the procedure be made a part of their
performance agreements.
Auditor Comments
The action planned by the Assistant Administrator for obtaining complete
regional responses of their enforcement priorities, if properly inplemerrted,
will substantially correct the deficiency cited in our draft report.
Regarding our second recommendation, it is addressed to the Assistant
Administrator because he is the action official for this finding. We agree
with the Assistant Administrator's comment that adherence to the NEIC
Director's memorandum of November 1983 be considered when preparing Special
Agents performance agreements.
RgoonmenH^t i ms
We recommend that the Assistant Administrator for Enforcement and
Compliance Monitoring take appropriate steps to ensure his proposed actions
are implemented. We also reccmmerd he take the necessary steps to ensure
that when agents open cases they follow the NEIC Director's November 1983
memorandum for preparing Case Opening Reports and that this be part of
Special Agents performance agreement. We request the Assistant
Administrator provide us the documentation to support the completion of
each action.
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FINDING NO. 2 - A FORMAL AND INDEPENDENT QUALITY ASSURANCE
PROGRAM WILL HET.P A.ggnRE INVESTIGATIVE EKODUlTlVl'lY
The Office of Enforcement and Compliance Monitoring (OECM) does not have
an independent quality assurance program to ensure its Office of Criminal
Investigations (OCX) is performing in an efficient and effective manner.
Consequently, OECM senior management loses a means for objectively deter-
mining whether OCI area offices open and develop cases which meet the
Agency's goal that criminal cases serve as a timely and forceful deterrent
against environmental laws.
NEIC began an in-house quality assurance review of its area offices in 1984
and 1985. The reviews were conducted largely by OCI staff. A review was
not made in 1986 to ensure identified deficiencies were corrected. NEIC
officials informed us that they performed another review in 1987, but they
did not document the results. A review in 1988 is not planned.
In 1987, a ccanponent of the Department of Defense's Inspector General
conducted an informal survey of the major Federal law enforcement agencies
and selected Assistant Inspector General for Investigations on productivity
for investigators. Several key points emerged frcan the survey as follows:
1. Investigative productivity is extremely difficult to measure.
2. Effectiveness and the quality of the investigative product are far
more important than either efficiency or quantity.
3. The nature of the operational environment is critical to any evalua-
tion of effectiveness and, therefore, comparisons between units of
the same agencies, ard certainly comparisons among agencies may
prove to be meaningless.
4. Evaluations of productivity, particularly the effectiveness aspect,
are heavily subjective and can best be done by an agency's own
personnel who have substantial field-level experience.
We agree with the above conclusions. OECM, assisted by NEIC and OCI
personnel with substantial field-level experience, needs to implement an
independent quality assurance program of OCT activities.
An Independent Quality Assurance Program Could
Better Assure Investigative Productivity
The investigative standard for quality assurance established by the
President's Council on Integrity and Efficiency requires the establishment
and maintenance of a quality assurance program. The standard defines
quality assurance as an evaluative effort conducted by external reviewers
to ensure that work performed adheres to established policies and procedures,
meets established standards of performance, and is carried out economically,
efficiently, and effectively.
-29-
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External reviews by independent individuals are important to an objective
assessment of an investigative program. In a review of the Federal Bureau
of Investigation (FBI) management control over field operations in 1979,
the U.S. General Accourrting Office (GAO) found that peer reviews were
performed by teams of agents. GAD concluded that while these peer reviews
served a useful management purpose they were not independent. Independence
suffered because field agents were evaluating agents. The agents awareness
of their past and future involvement with these same activities and people
would not provide the typical objective criticism that could be obtained
from truly independent observers. In addition, the FBI did not conduct
broad-based program result reviews of major investigative or priority
programs. GAD recommended that the FBI:
1. Increase the review team independence.
2. Conduct indepth program results reviews.
3. Develop plans and programs for review of FBI activities.
The Department of Justice basically concurred with GAO's findings, con-
clusions and recommendations. For example, the FBI developed specific
programs for field office reviews. Sane examples of programs
developed by the FBI are evidence handling, adequacy of informant asset
results, and file review of criminal cases.
With respect to the review of criminal cases, the following areas are
to be covered by the FBI's review team.
1. Determine the estimated number of workdays in the next 60 days
and a description of the work to be performed. Examples of
work description are: interviews to be conducted, contact with
the U.S. Attorney, trial preparation, lab results, etc.
2. Determine if the Agent is aggressive and probative in his/her
investigation and is proceeding in a logical and timely manner.
3. Determine if sufficient personnel are assigned to promptly and
properly handle major investigations.
4. Determine if cases under investigation reflect priorities.
5. Determine if investigations are being conducted efficiently,
using appropriate investigative techniques, such as informants.
OCE Peer Reviews
In July 1984, OCE implemented a procedure to review the progress of offices
in adhering to policies and procedures. Reviews were performed by OCI/NEIC
staff and agents in 1984 and 1985 which emphasized programmatic and
coordination considerations, investigative procedures and administrative
support requirements. The results of these reviews, according to senior
NEEC and OCI officials were considered in annual performance appraisals.
-30-
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Od acted responsibly in establishing and performing these initial reviews
which showed several significant issues that needed management's attention.
For example, the 1984 review found:
o Ocnmunications with state offices law enforcement agencies should be
improved. Ccrranunications with state offices and other law enforcement
agencies occur on an ad-hoc as needed basis. OCI recognized that
improving ccmmunications would better ensure increased intelligence or
protection type investigations.
o Coordination with EPA's Emergency Response Brandies appeared to be of
major concern. The priority of on-scene coordinators was in clean-up
operations rather than in potentially identifying the responsible
parties. OCI area offices indicated they were rarely notified of a
potential criminal case which on-scene coordinators became aware of
due to a emergency response situation. OCI officials believed clear
guidance was needed from Regional Administrators or Deputy Regional
Administrators concerning notification of OCI by Emergency Response
Teams. OIC believed a nationwide policy frcm the Administrator's
Office could be helpful in this matter.
The 1985 reviews also disclosed significant issues. For example:
o One office needed to set priorities in line with the guidance issued
by Headquarters and refrain from pursing cases with low priorities.
There was a lack of clear priorities being set when it came to
opening cases. In addition, the review team found that considerable
improvements were needed in the quality of investigations, and the
types of violations which are pursued. Too much emphasis was placed
on merely opening cases and making referrals to the Justice Department
to increase the statistics for the criminal enforcement programs.
o At another office, the review team found:
1. A need for improvement in case development.
2. A need for improvement in coordinating with the media
programs.
3. Investigative files could be improved considerably.
The quality assurance reviews in 1985 did not shew whether the weaknesses
disclosed in 1984 were fully resolved. Reviews were not performed in 1986.
In 1987, reviews were performed, according to OCI officials, but were
not documented. Therefore, OECM senior management cannot assure that OCI
and its area offices resolved the weaknesses disclosed in the 1984, 1985,
and 1987 reviews.
We discilsppri this issue with senior NEIC and OCI officials. They agreed
reviews should be better documented including actions taken to resolve
prior deficiencies. They also provided us documentation to show actions
that would help resolve deficiencies cited in the 1984 and 1985 reviews.
-31-
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With respect to communications with state office law enforcement agencies
NEIC officials provides us specific data on NEIC's activities with State
Association Hazardous Waste Projects. NEIC has an "Automated Information
Exchange Program" and provides:
o Lists of ccanpanies with which EPA entired into litigation and the law
under which action was taken.
o Lists of generators; transporters; transportation - storage - disposal
facilities, with class 1 violations.
o Summaries of consent decrees existing between U.S. EPA and defendants.
These are positive steps taken by NEIC to improve communications with state
law enforcement agencies. NEIC officials also explained they have arranged
a meeting with state enforcement officials to improve inter-state
coauitunications with NEIC. In addition, NEIC has designated an agent to act
as a focal point with each state enforcement agency.
Aaencv arohasis Is On
Quality Enforcement Cases
An independent quality assurance program is important to help assure
management that quality enforcement cases are timely pursued and success-
fully resolved. The Administrator has emphasized quality in the Agency's
enforcement efforts. He stated in the Agency's 1989 Operating Guidance
that EPA most continue to streamline administrative and judicial enforce-
ment processes, eliminating unnecessary reviews and delays. The Agency
must focus on results. After selecting the right cases and enforcement
responses, the Agency must follow through and bring the cases to closure.
By focusing on results in criminal cases, the Agency will have a strong
deterrent against individuals who would commit violations. The Agency's
1989 Justification Of Appropriation Estimates For Conmittee On
Appropriations also expresses this concept as the basic objective for the
Agency's criminal investigative program:
The objective of this program will continue to be forceful deterrence
of violations of environmental laws by providing the regulated
ccmunity clear evidence that willful statutory violations will be
met with harsh sanctions in terms of both jail sentences and monetary
fines.
To pursue cases which will have the greatest impact and deterrence, given
these constraints, OCI officials must review and select significant cases
using several criteria: A significant case: (1) reflects agency strategies/
priorities in terms of the environmental or public health risk posed, nature,
magnitude, duration of the violation, the type of defendant, enforcement
history, etc.; (2) furthers specific Region/State environmental goals; (3)
broadens program goals through deterrence, considering the marginal value
of each case; (4) reflects appropriate State/Federal roles; and (5) meets
timely and appropriate enforcement response criteria. Senior NEIC and OCI
officials explained these criteria are used during the case selection
process.
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Recent Agency Actions to
Improve Enforcement Quality
The Administrator and other senior officials have taken recent actions to
further improve the quality of the enforcement process. For exanple, in
FY 1989 the Agency is instituting a Regional Enforcement Strategies process
to prtsnote and accommodate regional enforcement concerns.
Additionally, in September 1987, the Deputy Administrator advised senior
Agency officials:
We need more effective mechanisms in Headquarters for coordinating
action on civil and criminal enforcement matters, policy, and
regional oversight as we move to strengthen management systems in
the regions for selection, development, and follow through on cases.
For example, the Deputy Administrator explained that where an investiga-
tion arises, OCT will keep that program informed of the status of the
investigation through quarterly meetings with the Program Office Directors.
These meetings will also be used to continue improving processes for
priority setting, and case development and support. NEic officials
advised us that meetings are held regularly between the OCT Director and
Program office Directors. Regional officials also said there is close
coordination with OCT.
In January 1988, the Deputy Administrator announced the establishment of
the Enforcement Management Council to enhance the management of administra-
tive and judicial enforcement actions. The Council is expected to enhance
EPA's enforcement program by identifying ways to streamline administrative
and judicial case management, to foster region-specific strategic planning,
including enforcement targeting, and to track and followup on settlement
agreements and orders.
A June 1988 memorandum from the Assistant Administrator for Enforcement
and Ccnpliance Monitoring to the NEIC Director outlined additional
procedures needed to improve communications and coordination between NEIC
and Headquarters. For exanple, new criminal investigation program proce-
dures include:
— Monthly meetings between the NEIC Director and other senior OECM
officials to review ongoing and proposed NEIC activities. This
includes a discussion of case program office and contract support
activities.
— Tracking of important projects in OECM's existing Enforcement
Management Tracking System, the Deputy Administrator's Action
Tracking System and OECM Weekly Highlights.
These recent actions will help the Agency streamline and improve the
quality of the enforcement process. To assure that the Agency's criminal
enforcement program is in line with these recent efforts, senior management
-33-
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needs to establish an independent quality assurance review program. This
includes a need to develop specific plans and programs for an independent
review team to use.
We discussed the issue of quality assurance with senior NEEC arri Od
officials. They generally agreed with our finding but indicated that
lack of resources nay prevent annual review of offices. Reviews should
be regular and well documented. In addition, senior NEEC and OCI officials
commented that a team assisted by (1) an Agent not frcsn the office being
reviewed, (2) an employee from another part of NEEC, such as frcm the
Office of Planning and Management, and (3) an OECM attorney with prior
field and assessment experience would help in achieving maximum investiga-
tive productivity.
Conclusions
OCI acted responsibly to develop a formal management assessment review
program in 1984. While these reviews served a useful management purpose,
they do not represent an adequate substitute for a formal recurring
independent quality assurance program. Independent reviews can better
assure management that OCI area offices comply with OCI policies and
procedures, establish consistency among offices, and improve OCI field
operations. These reviews can also assure management that OCI activities
are in line with the Agency's efforts to strengthen and streamline the
enforcement process.
Draft Report Reuurmendations
We reccsimended in our draft report that the Assistant Administrator for
Enforcement and Compliance Monitoring take appropriate action to:
1. Develop plans and programs for independent reviews of OCI activities.
2. Institute a periodic formal management assessment review program of
OCI area offices composed of individuals independent of the area
offices under review.
These reviews should be documented and rjiould determine that prior deficien-
cies have been fully resolved.
Agency Reply To CXir Draft Report
In reply to our draft report, the Assistant Administrator for Enforcement
and Carpiiance Monitoring agreed with our conclusions and reoamendations.
He stated that OECM's responsibilities in the Criminal Enforcement Program
encompass the Office of Criminal Enforcement Counsel (OCEC) as well as OCI.
Accordingly, he believed independent management reviews should be expanded
to include both components of the program. He intends to establish an
independent review of the Criminal Enforcement Program, conducted at a
minimum, by one or more individuals not associated with the Criminal
Enforcement Program, one supervisory agent not associated with the
particular operation being reviewed, an OCEC attorney, and a Regional
Counsel representative. The reviews will cover all facets of the program
including investigative, legal, policy, and administrative operations. The
will reports will be directed to him.
-34-
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Auditor Oanments
The action planned by the Assistant Administrator for conducting independent
management reviews of the Criminal Enforcement Program, if properly
implemented, will substantially correct the deficiency cited in our draft
report.
Reocarnnendation
We recommend the Assistant Administrator for Enforcement and Compliance
Monitoring take appropriate action to ensure senior OECM officials
implement his proposed action. We request the Assistant Administrator
provide us a copy of the procedures that implement the independent manage-
ment reviews.
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FINDING NO. 3 - AN ACTIVE PAID INFORMANT PROGRAM W3UID BENEFIT EPA'S
CRIMINAL ENFORCEMENT ACTIVITIES
Od does not have an active paid informant program because of delays in
receiving legal advice regarding the mechanics of making such payments and
funding undercover operations. Consequently, CCI's enforcement of
environmental laws can be adversely affected when it is unable to pursue
leads because agents are unable to make necessary informant payments.
Informants aire important to a criminal investigative program. The Federal
Bureau of Investigation (FBI), for example, considers development of
informants as a critical investigative tool. An October 1978, memorandum
from the FBI Director to all FBI Special Agents stated:
. . . Other than the intelligence and resourcefulness of our
investigative personnel, informants are our single most valuable
investigative tool. Because informants are so valuable, every
effort must be made to obtain maximum benefit from their use.
FBI officials advised us that they have an active paid informant program.
Internal reviews of FBI field offices include checks to determine that
informant payments are properly made and reasonable in relation to the
information received.
OCX officials similarly also recognize that informants can be valuable to
their investigative program. The Special Agent Manual explains one of the
most important responsibilities of OCI's Special Agents is the identification
of prospective criminal informants and the development of these informants
to the point where they regularly contribute information to the agent.
Informants can be any individuals who will furnish valuable information
concerning potential criminal matters within the criminal investigative
jurisdiction of OCT. Informants can include individuals: (1) with criminal
records; (2) who are engaged in criminal activities; or (3) who have unusually
close contact with criminal elements; because of their occupation or family
relationships. Accordingly, informants have numerous motives, such as
revenge, fear, or civic-mindedness.
In using informants, the Manual adds that Special Agents must act with
care. Care must be exercised in deeding with informants so they will not
have unauthorized access to official documents or have the opportunity to
abstract the Agency's functions. In addition, Special Agents are prohibited
frcm initiating or condoning criminal activity and must exercise care to
not even give the appearance of requesting illegal or criminal activity on
the part of the informant.
OCI developed policies and procedures in its Manual concerning the develop-
ment, use and control of informants, including payments for information and
evidence. The Manual included procedures for informant payments because
OCT officials believed most informants expect sane form of remuneration in
exchange for information and evidence. In seme cases, the informant may
want to be reimbursed for travel expenses to meet with a Special Agent.
The Manual explains that payments must be ccmmensurate with the value of
services, information, or evidence provided. Consideration must be given
to determining whether the information furnished could be obtained by other
means at no cost or through the Agency's cwn efforts.
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The following are important aspects of OCT'S procedures to pay informants:
o All payments to informants for furnishing information or evidence must
be approved by the NEIC Director.
o Requests for funds for payment to an informant will be submitted and
processed using a Voucher for Payment to Informant (Voucher).
o Payments must be made in cash to the informant within 48 hours of its
receipt. All payments must be witnessed by another Special Agent.
o Payment funds will be disbursed by check frtan an imprest fund controlled
by an NEIC Informant Fund Imprest Cashier.
o The informant must sign and date the last copy of the Voucher.
o If only partial payment is made, or in the event of nonpayment within a
48 hour period, the funds must be returned to the Cashier.
CCTDoes Not Have An ActivePaid Informant Program
Hie OCT Assistant Director explained that OCI does not have an active
informant program because of questions raised by other Agency officials
about payments to informants. C*jestions were raised in August 1985, when
Cd received a request to assist in an undercover operation to detect
violations of Federal and State environmental statutes. The request was
made jointly by a state law enforcement agency and the Office of the U.S.
Attorney. In order to carry cut the operation, Agency funds were needed.
On September 3, 1985, in response to a suggestion by EPA's Comptroller, the
former Assistant Administrator for Enforcement and Compliance Monitoring
requested an opinion from EPA's General Counsel regarding undercover opera-
tions:
... I am requesting an opinion by you regarding whether undercover
operations are consistent with the exercise of the Agency's criminal
law enforcement authority, whether Agency appropriations can be
utilized to carry out such operations, and what limits may be imposed
on the Agency's involvement in such operations by our appropriation
bill or other statutes. I recognize the need to establish special
financial, procurement and audit procedures to maintain the security
of this investigative activity. These are in preparation.
On September 13, 1985, the General Counsel responded to the Assistant
Administrator in a memo which stated:
The general rule of appropriation law is that appropriated funds
nay be used only for necessary expenses. Decisions of the
Controller General have long recognized that use of appropriated
funds to carry out investigative functions in support of statu-
tory law enforcement programs is a necessary expense .... Your
proposed to use EPA appropriations to cooperate with state law
enforcement authorities in carrying out undercover operations
seems consistent with these GAO decisions.
-37-
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Subsequently, the Comptroller requested a supplemental opinion from General
Counsel to resolve issues regarding the conduct and payment of undercover
operations including payments to informants. One issue involves the limita-
tion on the dollar amount allowable for an imprest fund transaction. This
limitation was established by the Department of the Treasury's Bureau of
Government Financial Operation (Bureau). Hie Bureau limits the per
transaction spending for cash payments from imprest funds for all Federal
agencies and departments to $500.
Senior NEIC and OCI officials advised us that investigative organizations,
like OCI, need to exceed the govemmentwide limitation for imprest fund
transactions when developing informants. Otherwise an investigators ability
to engage in undercover operations can be impeded.
Hie Drug Enforcement Agency (DEA), for example, has recognized that operating
an effective paid informant program may require large expenditures. The DEA
Manual for agents allows Special Agents in Charge to authorize payments to
informants of up to $10,000 per quarter for the purchase of evidence and
information.
NEIC discussed this specific issue with the Agency's Office of General
Counsel. A November 1987, draft memorandum from the Associate General
Counsel for the Grants, Contracts and General Law Division, to the NEIC
Director explained that Treasury Fiscal Requirements Manual, Bulletin
85-13, allows an agency having a bonafide need to exceed the $500 per
transaction limit upon the specific written approved of the agency head.
The Bulletin states "Delegation by the agency head should not be lower
than the Chief Fiscal Officer in the field." At the time we completed our
review, the Agency had not resolved whether the EPA's Administrator needed
to issue a directive authorizing OCI to exceed the $500 per transaction
limitation.
The November 1987, draft memorandum from the Associate General Counsel also
explained that OCI may need to deposit, in a bank, funds used to pay infor-
mants. For example, bank deposits could be required in order to demonstrate
the EPA agent's financial ability to participate in transactions involving
large amounts of cash. The draft memorandum explained the practice of
depositing appropriated funds in banks raises questions under 18 U.S.C.
§648 (1982) and 31 U.S.C. §3302(a)(3)(1982). These statutes prohibit, except
as provided by another law, an official or agent of the United States having
custody of public money from depositing the inoney in a bank.
The draft memorandum further explained that uhere large deposits are
necessary to successfully conduct certain undercover operations, the limita-
tions necessary to comply with the statutes may frustrate the undercover
operation. Complying with accounting safeguards, for example, may impede the
EPA investigator's ability to engage in a "laundering" scheme. The Associate
General Counsel reccsnmended EPA should seek legislation which allows the
Agency to make bank deposits without regard to 18 U.S.C. §648 and 31 U.S.C.
§3302(a)(3).
-------
OCT officials said they have made numerous request to the Office of General
Counsel (OGC) for a final opinion since October 1985. At the time we
conpleted our review in July 1988, OGC had not issued a final opinion to
resolve these issues.
OCI Unable To Pursue Ml Leads
Unless the Agency resolves these issues, its enforcement of environmental
laws is adversely affected because OCI does not have an active paid
informant program. The OCI Assistant Director explained that instances
have occurred where leads could not be developed because of the uncertainty
regarding using Agency's funds to pay informants. Special Agents in Charge
(SAC) provided us examples of leads that could not be investigated because
there was a need for informant remuneration:
o One SAC explained that an informant had knowledge of a company
illegally disposing of hazardous waste. The validity of the allega-
tion could not be substantiated independently by OCI and payments to
the informant were necessary. The lead was not investigated because
payments could not be made to the informant to determine the validity
and extent of the illegal disposal of waste.
o A SAC received two separate and presumably unrelated inquiries fron
anonymous informants. Both informants inquired as to the possibility
of receiving payments from EPA in return for information leading to
the conviction of environmental violators. One informant indicated
that he was a current employee of an Alaskan corporation which was
illegally disposing of hazardous waste. The other employee indicated
that he was a current employee of a major Washington corporation
illegally disposing of hazardous waste and making false reports to the
Government. Neither informant would provide any additional informa-
tion without remuneration.
Agents also advised us of instances where they need reimbursement for other
related investigative expenses which EPA currently does not pay. Hiese
expenses include, but are not limited to, paying for hotel roans, leasing
temporary office space and special surveillance sites, post office boxes,
etc. These types of expenses are incurred when agents arrange to meet with
informants many miles away fran the informant's residence or place of
employment to avoid detection.
OCI officials explained that one SAC office incurred related investigative
expenses when it had several cases in which the informants were unemployed.
In these instances, OCE had difficulty in keeping the informants active
because they were often unable to pay for travel expenses, meals or long
distance phone calls. Because EPA does not pay for these types of expenses,
agents explained they sometimes pay for these expenses using their personal
funds in order to obtain useful information frcm the informant.
OCE officials also advised us of instances when agents needed to rent motel
rocms for undercover meetings and briefings. In each case, less efficient
arrangements were made because EPA has not established procedures to pay
for these types of expenditures.
-39-
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We discussed this issue with senior NEIC and OCT officials. They agreed
with our finding and recommendations.
Conclusions
OCT has a major responsibility tcwards enforcing the Agency's environmental
laws. An active paid informant program is important to help ensure that
the Agency's enforcement resources are used to maximum benefit. Without an
active informant program, the Agency lessens its chances of uncovering ard
penalizing the most flagrant violations. OECM, the Office of General
Counsel, and the Office of Administration and Resources Management need to
work out the details of making payments for undercover operations and
payments to informants. The September 13, 1985, General Counsel memorandum
explains that such payments using Agency's funds are appropriate.
Draft Report Recommendations
1. We recanmended in our draft report that the Assistant Administrators
for (a) Enforcement and Compliance Monitoring and (b) Administration
and Resources Management, and the General Counsel take timely action to
resolve the details leading up to approval of an informants program.
2. We also recanmended that the Assistant Administrators for (a)
Enforcement and Compliance Monitoring and (b) Administration and
Resources Management implement any additional steps needed to control
payments to informants. The Assistant Administrator for Enforcement
and Conpliance Monitoring should then initiate the informant program.
Agency Reply To Our Draft Report
In reply to our draft report, the Assistant Administrator for Enforcement
and Compliance Monitoring agreed with our recommendations. He noted that
clear responsibilities of each office (OECM, Office of Administration and
Resources Management, and General Counsel) are needed.
The General Counsel's response conpletes his responsibility by confirming
that the Agency can use its appropriations to investigate violations of
environmental status and regulations. The General Counsel's response also
confirmed that an imprest fund can be used for undercover operations and
payments to informers. His response added that his office discussed with
NEIC and Financial Management Division staff the issue of dollar
limitations en imprest fund transactions. This discussion included
procedures to follow to raise current dollar limits on imprest fund
transactions if the current limits are inadequate.
Auditor Comments
We agree with the ccrnnertts provided by the Assistant Administrator for
Enforcement ard Compliance Monitoring and the General Counsel. The
Assistant Administrators for (1) Enforcement and Carpiianoe Monitoring, and
(2) Administration and Resources Management need to complete details for
establishing a fund so that OCT can conduct undercover operations and
make payments to informants. Their actions should include determining
-40-
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whether current limits on imprest fund transactions are adequate and taking
appropriate steps to raise current limits if necessary. In addition, the
Assistant Administrator for Administration and Resources Management should
issue instructions, as appropriate, so that payments can be properly
processed and controlled. The Assistant Administrator for Enforcement and
Ocmplianoe Monitoring needs to ensure that NEIC and OCT make all Special
Agents aware of any additional procedures to control payments for
undercover operations or to make payments to informers.
Recommendations
We recommend the Assistant Administrators for (1) Enforcement and
Compliance Monitoring and (2) Administration and Resources Management,
implement our draft report reccanmendations. We also reconmend the Assistant
Administrator for Enforcement and Compliance Monitoring ensure all Special
Agents are aware of any additional procedures needed to control payments to
informants.
We request each Assistant Administrators provide us with documentation to
support completion of their planned actions.
-41-
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CASE
NO.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
MONETARY PENALTIES AND TIME OF
ACTUAL INCARCERATION IMPOSED
Exhibit 1
Page 1 of 4
(See Page 14)
PLEA
BARGAIN
Yes
Yes
Yes
Yes
Yes
No
Yes
INDIVIDUALS
FINED
$25,000
25,000
75,300
57,351
€7,351
24,000
12,000
5.000
CORPORATIONS
FINED
$25,000
7,500
400,000
40,000
250,000
250,000
360,000
TIME
INCARCERATED
1 month
None
None
None
None
None
None
None
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
20,000
5,0C0
500
500
1,050
1,050
75
5,000
2,000
15,000
15,000
Acquittal
48,000
45,000
600,000
50,000
None
None
None
None
None
None
None
None
None
2 months
None
None
-42-
-------
CASE
NO.
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
Exhibit 1
Page 2 of 4
FLEA
BARGAIN
Yes
Yes
Yes
Yes
Yes
Yes
INDIVIDUALS
FINED
100
500
2,500
20,000
35,000
10,000
CORPORATIONS
FINED
4,000
TIME
INCARCERATED
9 months
None
None
2 months
None
None
250,000
125,000
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
5,000
None
Yes
50
100
525
2,000
10,025
2,500
3,000
7,500
12,000
3,500
200,000
10,100
1,000
Acquittal
201
105,000
None
None
None
None
None
None
None
None
6 months
1 month
Less than 1 month
No
40,000
-43-
-------
CASE
NO.
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
PLEA
BARGAIN
Yes
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
NO
Exhibit 1
Page 3 of 4
INDIVIDUALS CORPORATIONS TIME
FINED FINED INCARCERATED
75,000
75,000
10,000 6 months
30,000
7,500 None
7,500 None
24,000 4 months
24,000 4 months
12,000 None
5,000 None
15,000
5,000 None
Dismissal
2,500 None
2,500 None
30,000
5,000 Less than 1 month
5,000 Less than 1 month
200,000
5,000 Less than 1 month
3,000 Less than 1 month
1,000 Less than 1 month
30,000
5,000 None
125,000
125,000 None
1,000
250 None
500 6 months
12,100 12 months
450,000
2,500 None
5,000 12 months
Acquittal
-44-
-------
Exhibit 1
Page 4 of 4
CASE
NO.
PLEA
BARGAIN
INDIVIDUALS
FINED
CORPORATIONS
FINED
TIME
INCARCERATED
50
Yes
15,000
6,000
1 north
None
51
No
8,125
8,025
525
5.000
36 months
12 months
12 months
None
Totals
Yes
No
43
8
63
$824,702
31
$3,809,301
132 Months
22 Individuals
13 Cases
-45-
-------
Exhibit 2
Page 1 of 2
,NM-LC10*&tNCKAl (See L3)
tl(PAMM| NT or D C r E N s I
J00 APMY K*vv DRIVE
• RIIN&IOIW VIRGINIA ? 2 ? 0 ?
iainal Investigations
•olicy and Oversight)
Mr. Steve Sabo 2 3 APR 19ij/
Chief Management. & Staffing
Operations Division
Drug Enforcement Administrat ion
140 5 Eye Street, N.K.
Washington, D.C. 2 0 9 3 "7
Dear Steve:
Several months ago, I talked with you about developing
productivity measurements for the Defense criminal investigative
organizations. At that time, 1 indicated J was conducting an
informal survey oE the major Federal law enforcement agencies and
selected assistant inspectors general for investigations. I thought
you might be interested in the results of that survey, so I'm
enclosing a summary.
Although not reflected in the summary, several key points
emerged from the survey that are worth mentioning. First, everyone
agrees investigative productivity is extremely difficult to measure,
and no one is totally confident it can be done effectively. Second,
effectiveness and the quality of the investigative product are far
more important to the agencies surveyed than either efficiency or
quantity. "Numbers' in 'ana of themselves don't mean much. Third,
the nature of the operational environment is critical to any
evaluation of effectiveness and, therefore, comparisons between
units of the same agency,,and certainly comparisons among agencies,
may prove to be meaningless, Har^ believe it is far more useful to
compare a unit or agency, against itself rather than against another
unit or agency. Finally, evaluations of productivity, particularly
the effectiveness aspect, are heavily subjective and can best be
done by an agency's own personnel who have substantial field-level
e xpe r i ence.
I'm in the process of using the survey results to develop our
own productivity measurements. I'll send those to you once we've
determined what they will be.
Thanks again for your support and cooperation.
Best regards,
Robert E. Hildner
Colonel, USAF
Enclosur e
-46-
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Exhibit 2
Page 2 of 2
AGENCY
MEASURE
FBI DEA USCS IRS ATT USSS DOL GSA HHS TOT/
1.
Cases opened
X
X
X
X
X
5
2.
Cases closed
X
X
X
X
X
X
6
3.
Resolution rate
X
1
4 .
Case origination
X
X
2
S.
Cases per agent
X
X
X
3
6.
Manhours per case
X
X
X
3
7.
Cost per case
Xl
X
2
6.
Direct manhours
X
X
X
3
9.
Indirect manhours
X
X
X
3
10.
Quantity of
contraband seized
X
]
11.
Value of contraband
sei zed
X
X
1
!
3
12.
Category of drug
X
1
13.
Class of trafficker
X
1
14.
Value of assets
sei zed/for fei ted
X
1
15.
Arrests
X
X
X
3
16.
Arrests per agent
X
1
17.
Presenta tions/
referrals to USAO
X
X
X
X
X
5
18.
Indictments
X
X
*
X
X
X
X
1
19.
Convict ions
X
X
X
X
X
X
20.
F ines/penaltles
X
X
X
X
4
21 .
Recoupments
X
X
X
3
22.
Suspens ions
X
X
2
23 .
Debarments
X
X
24.
Administrative/
civil action
X
X
X
3
25.
Cost bvoidance
x2
X
X
3
NOTES
1-DEA includes confidential or Emergency and Extraordinary (EiE) funds only
this category.
2-ATF compiles this for arson cases only and reflects the amount saved insu
companies because of false or inflated claims.
3-For counterfeiting cases only.
* 47"
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APPENDIX 1
J* Pa9e 1 Of 2
i 3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\*G^/ WASHINGTON. D C 20460
SEP | B88
0fur* Oi
LNfONr r •>¦*- HI ANG
COWfVAsri v»»(-n^Oh'N'j
MEMORANDUM
SUBJECT: Draft Audit Report No. E1GM7-05-0571
Review of the Environmental Protection Agency's Office
of Criminal Investigations
Thoma e L. Adams, Jr.
Assistant Administrator
John C. Mat t In
Inspector General
Ernest E. Bradley, III
Assistant Inspector General for Audit
I have read your draft audit Report on the Office of
Criminal Investigations (OCI) and found it to be informative and
useful. The conduct of this study reflects the same degree of
professionalism I have come to expect from your staff. 1 believe
that the findings will be quite helpful to me in improving the
performance of the Agency's criminal enforcement program. At
this time, r would like to share with your office four comments
which I believe you may find pertinent to several conclusions
reached in your report. Having responsibility for both the NEIC
and its various roles and, specifically, the Office of Criminal
Investigations with its heavy burcien of investigating allegations
of criminal conduct nationwide, I find it disturbing that neither
I nor my Deputy for Criminal Enfotcement, Paul Thomson, were consj
concerning this audit. Paul and I are always interested and con-
cerned with how the total criminal program is functioning and ate
more than anxious to share whatever comments or insights with the
auditors that might be helpful.
Especially cogent to your audit are two documents which I
refer to below and have attached that reflect the continuing
effort that OECM haa made to improve conuruni cat ions and accounta-
bility at NEIC and to integrate more fully the criminal program
into the total EPA enforcement effort.
There are two recoj&rnendations on page 26 of the report. The
first deals with initiating a process to ensure complete reglonaJL
responses to the NEIC Director's request for regional enforcement
FROM;
TO:
THRU:
-48-
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-2-
APPENDIX 1
Page 2 of 2
priorities. I suggest that the recommendation be re-woided to
urge that the request b*» diiected to the Regional Artmi n 1 a t r« t oi e
and that it be signed, not by the Director, NE1C but by the
Assistant Administrator, OECM. This vill facilitate followup by
senior OECM management to assure that OCI incorporates regional
priorities in carrying out its activities.
The second recommendation on page 26 deals with whether or
not Special Agents are adhering to the Director, NElC's
memorandum of November JSB3 Sor preparing Case Opening Repot ts.
This recommendation should be directed to the Director of OCI who
has first line supervisory control over the Special Agents and
should stress that adherence to the procedure be made a part of
their performance agreements. In addition, for your inf oi~mat l on ,
I am attaching two memoranda which clarify the roles of senior
OECM managers with respect to the Criminal Enforcement Program.
The two recommendations on page 33 both deal with periodic
and independent reviews of OCI offices and activities. OECM's
responsibilities in the Criminal Enforcement Program are
considerably broader than tfCTC's and encompass the Office of
Criminal Enforcement Counsel (OCEC) as well as OCI.
Consequently, from my perspective as Assistant Administrator,
your recorimendatJon concerning management review should be
expanded to include both components of the prograin. 3 intend to
establish an Independent review of the Criminal Enforcement
Program, conducted, at a minimum, by one or more individuals not
associated with the Criminal Enforcement Program, one SAC or RAC
(not associated with the*particular operation being reviewed), an
GCEC attorney, and a Regional Counsel representative. The-review;
wiJj cover aiJ facets of the program including investigative,
legal, policy, and administrative operations and will report
then findings directly to me.
The last two recommendations on pane 38 deal specifically
with es tab 1 a shnent of an informants prog ram. V.'hile I agree with
the recommendations, I suggest that they be stated in more detail
so /that each office can clearly identify its responsibilities.
Also, the report does not address coordination between OCI and
OCEC or the new reporting relationship established by my two
memoranda (copies attached). Lastly, I am also attaching seveial
pages from the draft with pen and ink comments fot yojr consjdexa
II on.
I trust that you will find these comments helpful in
finalizing your repott. If I can be of further assistance, pleas
contact me or Pat Alberico of my staff on FTS 382-454Q.
At tachments
cc: Thomas Gallagher
James Prange
"49"
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
Appendix 2
0A
SEP I 9 1988
OFFICE OF
ADMINISTRATION
ANO RESOURCES
MANAGEMENT
MEMORANDUM
SUBJECT: Draft Audit Report No. E1GM7-05-0571
Review of the Environmental Protection Agency's
Office of Criminal Investigations
Thank you for the opportunity to review and provide
comments on the subject audit report. We have reviewed the
report and found that the single finding which could impact the
Office of Administration and Resources Management appears at
page 34 and concerns the need for this Office's Financial
Management Division to cooperate with the Office of Enforcement
and Compliance Monitoring (OECM) and the Office of General
Counsel (OGC) in their efforts to establish a "paid informant
program."
With regard to your finding and recommendation, this
Office does not feel that the facts contained in your report
sufficiently justify establishing such a program. As you are
aware, the potential for abuse and the near-impossibility of
adequately controlling payments made in conjunction with a
program of this type are great. However, should the Office of
General Counsel render a final opinion recommending that this
Agency seek the necessary legislation enabling it to make bank
deposits of sufficient amounts to operate the program; and,
should OECM decide to implement such a program, my Office will
lend all necessary support, upon request, to ensure that the
Program is properly implemented and appropriately controlled.
cc: Thomas L. Adams, Jr., OECM
Lawrence J. Jensen, OGC
FROM:
TO
Ernest E. Bradley, III
Assistant Inspector General for Audit
-50-
-------
Appendix ^
Page 1 of 2
A j
I®/
V,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASH IIVGTON. D C 20460
^ \ 9
orriCE or
GENERAL COUNSEL
MEMORANDUM
SUBJECT:
Draft Audit Report No- E1GM7-05-0571 , Review
of the Environmental Protection Agency's
Office of Criminal Investigations
TO:
FROVl:
Assistant Inspector General for Audit
We appreciate the opportunity to comment on your draft audit
report which reviews the operations of EPA's Office of Criminal
Investigations. Finding number 3 concludes that an active paid
informant program could benefit EPA's criminal enforcement
program. Th0 finding contains a recommendation that the
Assistant Administrators for (a) TLnforceoent and Compliance
Monitoring and (b) Administration and Resources Management and
the General Counsel cake timely action Co resolve Che details for
approval of an informants program.
As the draft audit report C-Qtes, tfciis Office has already
indicated that Agency appropriations may be used to investigate
vioLacions or environmental statutes and regulations. This would
include conducting undercover operations and payments to
informers. In this regard, our September 13, 1985 opinion cited
decisions of the Comptroller General approving payments to
informers.
The Office of Criminal Investigations proposes to make
payments to informers through an imprest fund. The draft audit
report refers to procedures in the Special Agency Manual.
Although this Office previously has not been aware of these
raar.uaL procedures, we have r.o general objection to the use of an
imprest fund for this purpose. The rule, on using imprest funds
are already in existence. We see no reason why Che Office of
Criminal Investigations and the Comptroller's Office cannot
complete the details for establishing tlxe f ur.d, ta addition,
some question has been raised as to dollar limit on imprest fund
transactions. Me have discussed this issue with NEIC and
Financial Management Division staff and believe chat chey are
aware of Che procedures to follow to raise current limits if it
is decided that normal imprest fund limits are not adequate.
-51-
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APPENDIX 3
Page 2 of 2
2
The other issues which we have been discussing with the
Office of Enforcement and Compliance Monitoring (OECM) are
separate from the matter of payments to informers. Our
continuing discussions with OECM on these matters should not slow
the establishment of the paid informers program.
By copies of this Memorandum, we are informing OECM and
Administration and Resources Management of our position and offer
our assistance if further issues or questions are identified.
cc: Thomas L. Adams (OECM)
Charles Grizzel (OARM)
-52-
-------
DISTRIBUTION
Headquarters
Assistant Administrator for Enforcement and
Compliance Monitoring
Assistant Administrator for Administration and
Resources Management
General Counsel
Inspector General
Agency Follow-up Official (FM-208)
Attn: Resource Management
Associate Administrator for Regional Operations (A-101) . . . .
Director, Financial Management Division (FM-226)
Comptroller (IM-225)
Office of Public Affairs (A-107)
Office of Congressional Liaison
Regional Administrators
Director, National Enforcement Investigations Center
(Denver, 00)
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