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Two WAPA Employees Expose Purchase-Card Irregularity

Written by: Federal Practice Group
Written by: Federal Practice Group

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The Federal Practice Group recently represented two clients in cases against WAPA, the Western Area Power Administration, which is currently under investigation for misuse of public funds. It all began when Nate Elam, a former assistant regional manager at WAPA, noticed that government employees were using U.S. government purchase cards to buy items from sporting goods stores, expenses ranging into the millions, for items such as ammunition, assault rifles, radar detectors, and engine 1superchargers.

Keith Cloud, WAPA’s chief of security, worked with Elam to expose the credit-card abuse, his role particularly relevant as employees began making threats and using intimidation tactics to stifle Elam’s claims. What was stranger, though, was that bosses in WAPA stymied the investigation, retaliated against the people who uncovered the fraud, and failed to do anything regarding the threats.

WAPA is an agency with the Department of Energy in charge of providing consumers with safe, clean, and economical power. However, embezzlement was only a small part of a larger picture. Both Cloud and Elam claim that waste and mismanagement are allowed to continue at the agency because WAPA has built up a $767 million reserve called the “unobligated balance.” While this fund was supposedly there to buy power if the hydroelectric system shorted, both men claim the agency used it as a kind of slush fund. The agency has also been accused of overcharging for power by companies in Arizona and California, a cost which ultimately falls on the average consumer.

This excess has been noticed by Cloud because of the agency’s underfunded security program. If so much money was returned to the U.S. Treasury with a huge surplus still remaining, then why wasn’t the agency taking care of its substations? Several power substations have been compromised in recent years, including one near Phoenix. An inspector general report in 2016 also found WAPA had not completed risk or security assessments.

People in and out of the agency who wanted the embezzlers held accountable began pushing for criminal proceedings in 2013 after Energy Department auditors corroborated at least $6.8 million in questionable purchases over a 2-year period. However, the agency tried to hide the scandal rather than bringing the perpetrators to justice, and employees continued to make fraudulent transactions. Almost none of the funds have been recovered, and only two employees are facing charges for their crimes.

The whistleblowers pushing for justice also became subject to threats and intimidation in late 2015. Employees began sending Elam threatening messages and tampered with his vehicle twice. He requested threat assessment and a home security system from Ron Moulton, senior VP for the Desert Southwest Region. An independent consultant who conducted a violence assessment in the workplace concluded that many employees had heard threats or were threatened and none of them reported it out of fear of retaliation and management apathy.

Elam eventually purchased his own home security system and resigned in late 2015. He filed a whistleblower retaliation and wrongful termination claim since he was forced to leave out of fear for his safety. Cloud and other employees at WAPA have filed whistleblower and equal-employment complaints that are still pending. After Cloud had made a statement about WAPA management’s tactics of isolation and vilification of whistleblowers, he was also stripped of his job as security chief and banned from contact with fellow employees. He now works at a WAPA training facility in Golden, Colorado, with no assigned duties.

If you are facing a similar situation as a government employee, contact our federal employment law attorneys at the Federal Practice Group. We are experienced in handling challenging legal problems, particularly those concerning federal employment laws and regulations. Contact us at (202) 862-4360 or fill out our online form to get in touch with us today.

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