Pentagon Rebukes Army Corps

Report Alleges Official Misconduct and Institutional Bias

By Michael Grunwald
Washington Post Staff Writer
Thursday, December 7, 2000; Page A01

A Pentagon investigation has concluded that three top officials of the Army Corps of Engineers manipulated an economic study in an effort to justify a billion-dollar construction binge on the Mississippi and Illinois rivers. The probe also found that the agency has a systemic bias in favor of huge projects that keep its employees busy and accommodate powerful industries.

The 168-page report on the investigation released yesterday represents an extraordinary rebuke to the Corps, whose leaders had predicted at congressional hearings that it would fully vindicate their public works agency. Instead, investigators for the Army inspector general substantiated several allegations of misconduct lodged by Corps whistle-blower Donald Sweeney, who was removed as head of the controversial economic study after he determined that the costs of massive lock expansions would far outweigh the benefits.

The report alleges that the Corps officials then rigged the most expensive and extensive study of navigation improvements in the agency's history to produce their desired outcome: a recommendation to Congress to enlarge seven locks. The project would speed up barge traffic on the Illinois and the Mississippi, but it could cost as much as $1.1 billion and cause severe environmental damage. Now the project may be in trouble, although the National Academy of Sciences is still conducting a review that could determine whether the locks are expanded.

"I'm heartened that people took my concerns to heart," Sweeney said. "I'm happy that the Army didn't shy away from a very complex investigation in a politically charged atmosphere."

The report went well beyond the seven-year, $57 million study of the Upper Mississippi system, challenging the overall ability of the Corps to conduct honest analyses of projects it hopes to build. The investigators noted a "widespread perception of bias among the Corps employees interviewed," including almost every Corps economist interviewed. The investigators concluded that the agency's aggressive recent efforts to expand its budget and mission, as well as its eagerness to please corporate customers and congressional patrons, have helped to "create an atmosphere where objectivity in its analyses was placed in jeopardy."

"The testimony and evidence presented strong indications that institutional bias might extend throughout the Corps," the investigators wrote. They cited "immense" pressure to give questionable projects the green light, noting that even the agency's retired chief economist called Corps studies "corrupt."

Defense Secretary William S. Cohen has forwarded the report to Army Secretary Louis Caldera for "consideration of any necessary changes in Army rules, regulations and practices." Cohen also cited the possibility of disciplinary action against the three officers accused of misconduct--Gen. Russell Fuhrman, Gen. Phillip Anderson and Col. James Mudd--although Fuhrman and Mudd recently retired from the Corps. Yesterday, Caldera directed Gen. Robert Flowers, the new Corps commander, to review the report and propose reforms.

The Corps usually works in relative obscurity, but it is a vast and far-reaching agency, with a $12 billion annual budget and a larger work force than Microsoft Corp. It presides over many of the nation's most contentious environmental issues, from the restoration of the Florida Everglades to the water wars on the Missouri River to the proposal to breach the Snake River dams. It also evaluates dams, levees and other water projects proposed by members of Congress, and it builds the ones it deems worthwhile.

In February, The Post reported Sweeney's allegations about the Mississippi study, backed up by a trail of e-mails that seemed to order the study team to manufacture a rationale for construction. One urged the team "to develop evidence or data to support a defensible set of . . . projects." Another declared that if the economic models did not "capture the need for navigation improvements, then we have to find some other way to do it." Another revealed that top generals wanted to "get creative" with studies.

"They will be looking for ways to get [studies] to 'yes' as fast as possible," it announced. "We have been encouraged to have our study managers not take 'no' for an answer. The push to grow the program is coming from the top down."

Sweeney then filed an affidavit with the federal Office of Special Counsel, which oversees whistle-blower allegations, and Caldera announced a wide-ranging review. The Corps commander at the time, Gen. Joe Ballard, assured Congress that when the probe was complete, "the integrity of the Corps will be intact, and you will know that the trust you have traditionally placed in the Corps is well-founded."

The investigators did not agree. They found, in the words of one Corps planner, that the agency's leaders saw the study as a "giant construction opportunity." They concluded that Mudd, a former district commander, deliberately manipulated a key variable in an economic model to nudge the projected benefits of new locks above the projected costs. They blamed Fuhrman, the former deputy chief engineer of the Corps, and Anderson, a division commander, for creating a climate in which manipulation was likely.

Fuhrman, for example, openly criticized Sweeney's conclusion that no lock expansions were necessary, declaring that the Corps should be an advocate for inland navigation. "His advocacy guidance was the first step in the development of a climate that led to abandonment of objectivity in the economic analysis," the report said. Anderson was taken to task for failing to clarify pro-construction orders from Fuhrman. The investigators also found that he gave preferential treatment to the barge industry, letting it take over some of the economic analysis. "The barge industry was viewed as a partner during the study," the report found.

Fuhrman, Anderson and Mudd all denied wrongdoing when interviewed by the investigators. The report did not substantiate allegations of misconduct by Gen. Hans Van Winkle, head of the civil works program, or by several civilian employees.

The report's real surprise was the criticism of institutional bias at the Corps, which was not even part of Sweeney's allegations. The investigators traced this bias to three factors: a "Program Growth Initiative" devised by the agency's generals to boost their budget, an industry-friendly emphasis on "customer satisfaction" and a basic conflict of interest for Corps districts whose budgets are determined by the number of projects they approve. "These influences created a tension with the honest broker role inherent in . . . studies," it said.

In September, a series of Post articles raised similar questions about Corps studies, with one detailing an array of errors in the agency's analysis of a Maryland dredging project. Congressional leaders then considered dramatic reforms, including independent reviews of major studies, stricter cost-benefit rules and tougher environmental standards. Ultimately, they agreed only on a study of future reforms and promised more hearings next year.

2000 The Washington Post Company