$15 Billion Missing From Education Department
Evidence Points to Embezzlement Scheme By Clinton Officials;
Education Department Continues Involvement in United Nations
Education Initiatives;
National Education Association Praises U.N.,
Urges Peace Studies for Kids |
|
The report, "Government at the Brink," issued in June by the Senate Committee on Governmental Affairs, says that the Education Department reported in its financial statements that it had $7.5 billion in the bank when it actually owed that money to the U.S. Treasury. This means that the department's books are off by $15 billion, about a third of what it spends annually. But this isn't just a case of bad accounting. Education department whistleblower John Gard suspects that "senior management officials" in the department had been "setting up the Agency to rip it off" and that millions of dollars or more have been embezzled. Gard says there was no security over the system to prevent embezzlement and no audit trail to find out where the money was going.
At the same time, the House of Representatives has moved to further globalize education, voting on May 10 to rejoin the United Nations Educational, Scientific and Cultural Organization (UNESCO) and provide it with $67 million. UNESCO has been described as a "global school board" that promotes international education initiatives and attempts to mold "global citizens." It is notorious for promoting the "New World Information Order." In arguing against the money, Rep. Tom Tancredo of Colorado noted a report that the new director- general of the agency plans to use millions of dollars to help restore colonial Havana. "It is not at all clear to me why we should be rejoining an organization which is promoting tourism in Cuba," he said. UNESCO has jurisdiction over "World Heritage Sites" and "Biosphere Reserves" around the world, including Independence Hall and the Statue of Liberty.
By its own account, the Department of Education "provides information on U.S. educational policy, educational programs, and international educational issues to U.N. functional commissions and committees, U.N. specialized agencies, programs and funds, Non-Governmental Organizations (NGO's) and other UN related organizations. Department of Education officials serve on U.S. delegations as participants in world conferences and meetings such as the World Summit for Social Development, the UN World Summit for Children, and UN Fourth World Conference on Women and Beijing + 5." Even when the U.S. was not a member of UNESCO, the education department participated in UNESCO-sponsored conferences and meetings such as the World Education Forum, Education for All, and the World Conference on Higher Education. The department furnishes statistics for the UNESCO database. Under a Clinton executive order, entitled, The International Education Policy, the department works "to strengthen and promote international education, making it an integral part of U.S. education." In cooperation with the U.S. Agency for International Development, the National Endowment for the Humanities, and many non-governmental organizations, the department implements this directive.
"Education for All" is a reference to the UNESCO-sponsored "World Conference on Education for All," held in Thailand in 1990, and follow-up conferences and activities. The purpose is to spend more government resources on education and expand governmental policy over educational matters. A "U.S. Campaign for Education for All" was established to carry this forward in the U.S. The National Education Association (NEA), the liberal teachers' union, promotes the concept through a "Global Campaign for Education." The group is on record in favor of "age-appropriate instructional materials on the establishment of peace and the understanding of nuclear proliferation" in the schools. It adds, "These materials should include activities dealing with peaceful resolution of conflict, the effects of nuclear weaponry, strategies for disarmament, and methods to achieve peace." Another resolution endorses the U.N., the "Education for All" initiative, and the taxpayer-funded U.S. Institute for Peace (see below).
NEA 2000-2001 Resolutions. 1-1. Peace and International Relations.
The National Education Association recognizes the interdependence of all people. The Association believes in the ideals of peace, freedom, and human dignity based upon respect for the individual and cultural diversity. The Association urges all nations to develop treaties and disarmament agreements that reduce the possibility of war, provide for the peaceful resolution of conflicts, and guarantee the rights of nations to coexist within safe and secure borders. The Association also believes that such treaties and agreements should prevent the placement of weapons in outer space. The Association further believes that the United Nations (UN) furthers world peace and promotes the rights of all people by preventing war, racism, and genocide. The Association believes that Education International contributes to peace and international relations by promoting dialogue among the world's education employees. The Association supports the U.S. Institute of Peace, which provides publications, information, programs, training, and research data in developing peacemaking and conflict resolution skills. |
|
The NEA has passed a resolution stating that the Department of Education "must be a viable force for the maintenance and improvement of public education in the United States" and that NEA members "must be fully involved in establishing goals and planning programs with the Department."
This concentration of power at the national and global levels has been occurring over a period of 20 years. Congress established the Department of Education as a Cabinet level agency in 1980. Today, it administers a budget of about $42 billion per year and operates programs that "touch on every area and level of education."
Growth of Education Department Budget
1980: $14,011,052 million
1983: $15,271,092
1986: $17,763,257
1989: $22,819,224
1992: $32,169,741
1998: $35,677,788
1995: $32,293,918
2001: $42,415,285
2002: $48,878,397 (proposed) |
|
The corruption problem is so massive that Secretary Roderick Paige was forced to hold a press conference on April 20 specifically on the issue of fraud and mismanagement in the department. It was at this event that he said his hope was that the agency could pass an audit in 18 months. Paige suggested the problem in the agency involved the mismanagement or loss of only $450 million, and that $250 million of that had been recovered. The $450 million figure was also put forward at an April 3 congressional hearing, where the agency's Inspector General testified.
Many people have heard of the $450 million figure, and the recovery of much of that money. But this is hardly a great accomplishment. Gard says the department was alerted by honest contractors who told the agency about getting paid twice for the same work.
The real problem is the identification and recovery of the unrecorded payments that the agency made. This has occurred through the conversion by the department to the Grants Administration and Payment System (GAPS), through which payments are made. After Gard suspected in 1996 that "senior management officials" in the department "were setting up the Agency to rip it off" during the conversion to the GAPS. he came up with a plan to prevent this from happening. He was then removed from the group handling the matter. He said the agency proceeded to implement the system knowing that it could be ripped-off. A "super-user ID" and password were released to about two dozen top employees and contractors, allowing them to conduct, modify and delete financial transactions "without any trace." Gard explained, "The money could be siphoned off. There is no trace, no audit trail." He placed some of the blame for this state of affairs on Clinton's secretary of education Richard Riley, who claims that he pursued "corrective action" on the problems. Gard said this is absolutely false.
Gard informed the Inspector General (IG) about refund checks available to be cashed for personal use by education department employees. Acting on his information, the IG raided the office of Chief Financial Officer and found $2 million in refund checks lying unsecured on an employee's desk. The agency responded by claiming the problem was insignificant and that it had been fixed. Gard said he's more concerned about the checks they didn't find.
When he continued to blow the whistle, he was escorted from agency property by armed federal security guards. Gard said he was treated like a "common criminal" and barred from the agency. But the Office of Special Counsel, established to handle whistleblower complaints, confirmed Gard's complaint of "gross mismanagement" in the education department. When Gard was finally brought back to the agency in December 1998, he was a given a different job with a nice office and told his duties were to stay inside with the door locked. In the Spring of 2000, he was given clerical work that took less than 4 hours a week to complete.
Gard said some money was funneled to accounts called "pseudo recipient." He obtained documentation indicating there were several hundred of these accounts, including one to a bank in Puerto Rico that received $4 million. Obviously, these were conceived for the purpose of diverting taxpayer money.
If the Department of Education can't account for the money it is currently spending - and the agency has failed three straight audits -- it is difficult to see how the Bush education plan of testing and local accountability could ever be implemented.
At the news conference called by Education Secretary Rod Paige, officials of the department claimed that financial problems are going to be addressed through the installation of a new software program, Oracle Federal Financials. Gard said, however, that this would not solve the GAPS disbursement and security problems that currently exist. Gard said the Oracle software may resolve some accounting problems if it is installed correctly. He said he knew of one federal agency that had used it properly. Ironically, it had been installed at the Corporation for National Service by one of his former associates at the education department, after he had been run out of the agency.
Cliff Kincaid, who obtained the first press interview with John Gard and reported his story for the Accuracy in Media (AIM) Report, appeared on the Hannity & Colmes Fox News Channel show on June 13 to discuss it. The Department of Education declined to send a representative to respond to the charges. The task of defending the department was left to Eleanor Clift, a contributing editor of Newsweek and a Fox News political analyst, who agreed to appear even though she was not very familiar with the facts in this case. What follows is an edited transcript of the discussion on Hannity & Colmes.
HANNITY: I've got to tell you it should anger each and every American taxpayer out here because what we're really talking about is waste, fraud, abuse and mismanagement at an agency that even President Bush is thinking of increasing spending 11 percent. Democrats want a 35 percent increase. But they can't manage the money we give them.
KINCAID: That's right. I recently interviewed an Education Department whistleblower, John Gard, who has documented incredible examples of waste, fraud, and corruption and abuse in the department. His case has been upheld by the Office of Special Counsel, which says there's been gross mismanagement in the department. As you say, the department hopes to pass an audit in 18 months. The agency has not passed an audit for 3 straight years and the amount of missing, stolen or unaccounted for money could go up as high as 15 billion - that's with a B - 15 billion dollars.
HANNITY: Let me go to Eleanor. Eleanor, here they failed, the Department of Education. These are our tax dollars and I know some people on the left aren't as concerned about these things. But hardworking Americans contribute to this. They have failed 3 straight audits. One, two, three. Why should we give them one additional dollar until they start accounting for the money we already give them?
CLIFT: First of all, in Washington you have to get accustomed to seeing millions in perspective. The department of education has, I believe, a 44 billion dollar budget. So this is a relatively small sum.
HANNITY: Up to six billion dollars is almost one-seventh of that 44 billion.
CLIFT: I think it's 450 million in the account that I read. The Los Angeles Times points out that this audit also says that most of these sums have been recovered. I take my cue from Secretary of Education Rod Paige who declines to blame his predecessor. He points out that these kinds of problems have existed for some time.
HANNITY: As far as Cliff's reporting, and he interviewed one of the leading accountants in this case, a whistleblower who paid a political price, it could be 6 billion. Cliff is saying as much as 15 billion. That amounts to a minimum of one-seventh of the total budget of the Department of Education. And if they can't manage or if they're mismanaging the funds we give them, Cliff, I don't think they have earned our trust to turn over billions more which is what they're asking for.
KINCAID: That's exactly right. This whistleblower, John Gard, was a systems analyst in the office of the Chief Financial Officer. As I point out, his case has been upheld. But when he started blowing the whistle on the corruption under former education secretary Richard Riley, he was escorted from agency property by armed federal security guards. He has offered to the Bush administration to come back to education to help clean up the mess, make sure the money goes for the children. The Bush administration and most of Congress are not interested.
COLMES: Let me first of all agree with you in principle. I think if this amount of waste is taking place, it's horrendous. I am a leftist who does care about taxpayer dollars and how they're spent. Not all liberals want to see mismanagement and waste. But look, many people I fear will use your work to try to argue that we should do away with the department. And I don't think this is a reason to do away with the education department, is it?
KINCAID: That's not John Gard's purpose in going public with these allegations. He just wants to make sure that the agency lives by the laws and the constitution. He wants to make sure the mess is cleaned up and he's been offering to the Bush administration, "Bring me back, I'll help you clean up the mess." Let me remind you that literally two weeks ago the U.S. attorney in Washington, D.C. issued a grand jury indictment of 11 people, four of them current members of the education department, for a million-dollar fraud scheme. That's just the tip of the iceberg. Senator Thompson just last week issued a report, "Government at the Brink," about waste, fraud and abuse in the department, pointing out the education department said they had $7.5 billion on the plus side in their account when they actually owed that money.
COLMES: You raise the specter of officials of the Clinton administration embezzling money. You say that in your report. Do you have any proof of that? Can you point the finger at who might have done this?
KINCAID: We've just had the indictments of 11 people for a one million dollar fraud scheme, four of them education department employees. John Gard says the system has been so bad in education in terms of disbursing money that it may be impossible to determine who stole money and how much money was stolen. But he's willing to go back and help put people in jail.
COLMES: Cliff, I would think a lot of people who agree with you may want the dissolution of the Department of Education, who may be supporters of President Bush. Why isn't the President coming forward and being part of what you're doing? He's got an education budget that gives that department the largest increase of any other cabinet agency - a $4.5 billion increase over the 2001 budget.
KINCAID: I have criticized the President. I think you answered your own question. That's why nobody wants to talk about waste, fraud and abuse and corruption because everybody thinks the answer is to spend more money on the Department of Education. It's like writing enough checks or throwing money out of a helicopter. Perhaps some deserving people will get a few bucks but that's the way to run a department. If a business ran this way, it would have been shut down years ago. John Gard suggests they ought to take this department, put it into receivership or appoint a grandmaster to run it - like the old agencies of the D.C. government years ago. It's beyond control. It's out of control.
COLMES: There's been some problems. Everybody knows that. But the department has taken steps. They've limited the credit card spending to $2500.
KINCAID: You're wrong. Let me tell you. John Gard says the main problem over there is the grants payment administration, the computer system for disbursing money and grants. There is no security over it. They have no audit trail. They don't know where the money's going, and the problem continues to this day. I'm not talking about credit cards. I'm talking about the computer system that disburses grants and money. They say they brought in a new software program to solve some of the problem but that doesn't get to the heart of it.
The indictments were issued by U.S. Attorney for Washington, D.C. Kenneth Wainstein against 11 people involved in a theft ring of outside contractors working with Education Department employees. Three former employees have already pled guilty. The indictment charges 11 people, including four employees of the department, with participation in a scheme whereby they would order items on a Bell Atlantic contract, have them paid for by the department, and keep those items for their own use. The items include 10 Gateway computers and accessories, 15 printers, 4 Yamaha CD drives, 9 laptops for family birthday and graduation gifts, a 61" Sony television, 7 cell phones (on which a total of nearly 12,000 calls were made), 169 cordless phones (46 with caller ID, 5 with headsets), 6 Olympus digital cameras and 4 Olympus printers, 8 Sony digital cameras and accessories, 4 Sony digital camcorders and accessories, 4 Sony Handycams and accessories, 4 Sony video Walkmans, 7 PalmPilot personal organizers, 50 Motorola Talkabouts, and 2 Philips audio CD recorders.
To his credit, Paige has now appointed Gard to a management improvement team at the department. This is good news. The bad news is that, according to Gard, the main problem at the department, the accounting system known as GAPS, has not been fixed. This is the process that may have been used to embezzle tens of millions of dollars from the agency. It is ongoing. (30)