oversight

Tennessee Valley Authority: Facts Surrounding Allegations Raised Against the Chairman and the IG

Published by the Government Accountability Office on 1999-09-15.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman, Committee on
                 Governmental Affairs, U.S. Senate



September 1999
                 TENNESSEE VALLEY
                 AUTHORITY

                 Facts Surrounding
                 Allegations Raised
                 Against the Chairman
                 and the IG




GAO/OSI-99-20
United States General Accounting Office                                                   Office of Special Investigations
Washington, D.C. 20548



                                    B-283001                                                                                  Leter




                                    September 15, 1999

                                    The Honorable Fred Thompson
                                    Chairman, Committee on Governmental Affairs
                                    United States Senate

                                    Dear Mr. Chairman:

                                    The Tennessee Valley Authority (TVA), a wholly owned government
                                    corporation, is responsible for developing and conserving the natural
                                    resources of the Tennessee River Valley and supplying power throughout a
                                    seven-state area, presently through 159 distributors, or customers. TVA is
                                    governed by a three-member Board of Directors appointed by the President
                                    and confirmed by the Senate for a 9-year term. Chairman Craven Crowell is
                                    currently the sole member of the Board because Director Johnny H. Hayes
                                    resigned on February 1, 1999, and Director William Kennoy’s term expired
                                    on May 18, 1999.

                                    The current Inspector General (IG), George Prosser, began his tenure in
                                    April 1994. As 1 of 33 statutory offices initially established by Congress
                                    under the Inspector General Act Amendments of 1988,1 he was appointed
                                    by TVA’s Board of Directors. The act gives the agency head, in this case the
                                    TVA Board, general supervisory authority over the IG but provides that the
                                    agency head cannot interfere with the audit and investigative functions of
                                    the Office of Inspector General (OIG). The 1988 amendments also provide
                                    that only federal audit entities, including GAO and other IGs, may perform
                                    a review to determine whether an IG has internal quality controls and is
                                    complying with audit standards established by the Comptroller General as
                                    required by section 4(b)(1)(A) of the Inspector General Act of 1978.2

                                    On May 26, 1999, the TVA IG issued a report (otherwise known as a 7-day
                                    letter) to the TVA Board of Directors and the Congress pursuant to




                                    1
                                        Pub. L. No. 100-504, 102 Stat. 2515 (1988).
                                    2
                                        Pub. L. No. 95-452, 92 Stat. 1101 (1978).




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                   section 5(d) of the Inspector General Act.3 In that report, the IG alleged that
                   the Board Chairman, the sole Board member, had “harassed him” and
                   attempted to impede the independence of the OIG. Shortly thereafter, the
                   Chairman of TVA, on advice of the Office of Management and Budget
                   (OMB) and in accordance with Executive Order No. 12933, referred two
                   matters to the Integrity Committee of the Executive Council on Integrity
                   and Efficiency (ECIE)4 relating to questionable credit card charges by the
                   IG5 and concerns about the management of the OIG. On June 2, 1999, you
                   requested that we assist the Committee in investigating the IG’s allegation
                   against the Chairman and the Chairman’s allegation regarding the IG’s
                   credit card usage.



Results in Brief   With regard to the IG’s allegation against the Chairman, we found that it
                   was based on the disagreement between the IG and the Chairman over the
                   Chairman’s authority to both direct a broad management review of the OIG
                   and contract with a nonfederal entity to conduct the review. The
                   Chairman’s actions as discussed below could be viewed as an attempt to
                   undermine the independence of the IG.

                   Not knowing that a peer review of the OIG had been conducted only
                   months previously, the Chairman decided to initiate a management review
                   of the OIG based in part on two anonymous allegations. These allegations
                   concerned the lack of performance appraisals and merit increases in the
                   OIG and an OIG manager’s abuse of time and attendance policies. When the
                   Chairman discussed the review with the IG, the IG initially agreed to it; and


                   3
                    Section 5(d) requires IGs to report immediately to the head of their respective
                   establishments whenever they become aware of particularly serious or flagrant problems,
                   abuses, or deficiencies regarding the establishment’s administration of programs or
                   activities. Within 7 days of receipt of the report, the head of the establishment is required to
                   send the report to the appropriate congressional committees or subcommittees along with a
                   report containing appropriate comments. (Inspector General Act of 1978, as amended, 5
                   U.S.C. App. 3, § 5(d) (1994))
                   4
                    ECIE consists of statutory IGs appointed by the heads of designated federal entities. As a
                   result of Executive Order No. 12805, which was signed in 1992, ECIE became a member of
                   the President’s Council on Integrity and Efficiency (PCIE). PCIE is an interagency council
                   that is charged with promoting integrity and effectiveness in federal programs. The PCIE is
                   chaired by the Deputy Director for Management at the Office of Management and Budget.
                   5
                    As a member of TVA’s senior management, the IG was authorized to use a TVA Visa Gold
                   Card for hospitality expenses including, but not limited to, meals, refreshments, and
                   entertainment. TVA pays for these expenses.




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TVA contracted with a nonfederal entity to conduct the review. However,
when the IG was presented with an OIG legal counsel opinion and after
discussions with other IGs and members of Congress, he became
concerned about the appropriateness of such a review and informed the
Chairman of his reversal of opinion. The Chairman later decided to use
another OIG to conduct the review and believed that the IG would accept
such an arrangement. The Chairman was unaware that this offer was not
communicated to the IG as he had directed. However, before it was
determined that the IG had not been informed about the Chairman's
decision, TVA’s Chief Administrative Officer (CAO) initiated a separate
review of the IG’s use of his TVA credit card during his 5-year tenure (1994-
1999). To our knowledge, the proposed management review of the OIG has
been suspended.

As a result of his separate conversations with the Chairman and the CAO,
the IG felt that the Chairman was threatening the OIG’s ability to conduct
investigations and wanted to remove him from office. One reason the IG
provided for feeling threatened was his May 25, 1999, conversation with the
CAO regarding the Chairman’s reaction to the May 14, 1999, acquittal of
TVA’s former Chief Operating Officer on criminal charges. Thus, the IG sent
the 7-day letter to the Chairman. To counter his belief that the IG would
release the 7-day letter to the press, the Chairman released to the press his
recent letter to a member of Congress. In that letter, the Chairman alleged
that the IG had abused his use of the TVA-issued credit card. Subsequently,
the Chairman referred the following allegations to the ECIE for its
consideration: the previously mentioned OIG mismanagement, the IG’s lack
of independence, and the IG’s misuse of his TVA credit card. This referral
was based on the two anonymous allegations and a cursory review of the
IG’s credit card charges. However, the OIG had reviewed the management
issues that the Chairman referred to the ECIE and had taken action on
them prior to the referral. Details of the initial TVA allegations along with
additional allegations were leaked or released to the media. Then on
August 20, 1999, the Chairman placed the IG on paid leave pending
resolution of the allegations referred to the ECIE.

When the Chairman initiated his attempt for a management review of the
OIG, all three Board positions were occupied. However, he began his most
aggressive actions when his staff completed the analysis of the IG’s credit
card usage. By that time, the two other Board members had vacated their
positions. The Chairman’s actions included the release of unsubstantiated
allegations to the media and the referral to ECIE.




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                         With regard to the Chairman’s allegations concerning the IG’s lack of
                         independence, the IG recognized that his closeness to TVA management
                         and his attendance at TVA social functions could have led observers to
                         construe that his independence had been compromised. However, he had
                         investigated allegations involving all three directors, including an audit of a
                         $30-million, irrevocable trust created and controlled by the Chairman and
                         funded by TVA. This audit resulted in the revocation of the trust and the
                         funds’ return to TVA. Further, the audit assisted a criminal investigation by
                         the Federal Bureau of Investigation (FBI) on this matter, which the
                         Department of Justice declined to prosecute. In addition, we found no
                         evidence of TVA credit card misuse by the IG for the period we analyzed in
                         depth (Jan. 1998 through mid-May 1999). On the issue of whether the
                         expenditures were in accord with applicable TVA policy, we determined
                         that all of the questioned charges—including charges for hotels,
                         restaurants, golf and liquor—had been incurred as a result of activities
                         undertaken at Director Hayes’ direction and conformed to TVA’s policies.



Allegations That the
Chairman Impeded the
IG’s Independence

Two OIG Personnel        On November 19, 1998, the Chairman received an anonymous allegation
Complaints Triggered     that the OIG had not given performance appraisals and merit increases to
                         support staff. After receiving the allegation, the Chairman asked the
Broad-Based Management
                         General Counsel to determine whether the allegation had merit and
Review                   whether the Board could award a contract for an independent review of the
                         OIG. The General Counsel informed the Chairman that his office had
                         recently received an anonymous allegation that an OIG branch manager
                         had abused the OIG’s time and attendance policies. He added that the
                         allegation had been referred to the OIG because it was a management
                         issue. When the Chairman learned of the second allegation, he requested
                         the General Counsel to advise the Board how to handle these allegations.

                         By memorandum dated December 3, 1998, the General Counsel responded,
                         advising the Chairman that the Board should not refer the anonymous
                         allegations to the ECIE because they raised management issues rather than
                         the type of “wrongdoing” set forth in Executive Order No. 12933 that
                         warranted referral. However, he opined that the Board could seek an



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outside review by a contractor to determine whether the OIG was
functioning properly. The General Counsel added that the Board had hired
an outside contractor to review the OIG in 19936 during William Hinshaw’s
tenure as IG.

By memorandum dated December 7, 1998, the Chairman notified the Board
about the two anonymous allegations he had received involving the OIG.
The Chairman advised the Board that he planned to ask the CAO, a
previous TVA IG, to recommend an outside firm to independently evaluate
the OIG because it had been 5years since the last review. When the other
Board members did not respond to the memorandum, the Chairman
concluded that they had concurred with his belief that a review of the OIG
was necessary.7

According to the Chairman, two factors led him to believe that a review of
the OIG was warranted: (1) the General Counsel had advised him that the
allegation regarding the OIG’s failure to provide performance appraisals
was “troubling” and (2) the OIG had not been reviewed in 5 years. The CAO
and General Counsel told us that the allegations against the OIG had
triggered the Chairman’s interest in a review of the OIG. According to the
CAO, other underlying reasons might have existed. For example, the
Chairman had stated that the IG spent too much time socializing with
Directors Hayes and Kennoy.

On December 11, 1998, the Chairman sent his December 7 memorandum to
the IG. However, the OIG had previously reviewed and acted upon the first
anonymous complaint, received from the Office of General Counsel,
concerning the alleged abuse of time and attendance. The OIG’s action
included informing all OIG staff of time and attendance policies and
counseling the individual employee named in the allegation. Upon receipt
of the memorandum containing the second allegation concerning


6
 The Chairman requested, and the Board approved, the 199 3review of the OIG. Dempsey
and Associates and TVA were the contracting parties. Under the contract, the contractor
agreed to review the OIG's resources, procedures, training, and operations. The contract did
not contain any provisions regarding the Board's oversight of the review.
7
 Former Director Hayes told us that he did not raise any concerns about the review because
the Chairman and the CAO had informed him that it was a routine management review
aimed at helping the OIG run better. He explained that he did not respond to the
memorandum because he anticipated that the Board would discuss the issue before signing
the contract. Former Director Kennoy did not explain why he had not responded to the
memorandum.




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performance appraisals and merit increases for support staff, the OIG
reviewed each OIG employee’s file to determine if performance reviews for
the previous 4 years were included. This review determined that a few
employees did not have all their service reviews, and the IG worked with
the respective managers to obtain the missing reviews. Further, the OIG
updated its human resources computer system to reflect current
performance review information.

After the IG’s receipt of the December 7 memorandum, the Chairman and
the IG met to discuss the proposed management review. The Chairman told
the IG that he had tasked the CAO to recommend an outside auditor. The
IG advised the Chairman that it would be inappropriate for
PriceWaterhouseCoopers to conduct the review since the firm audits TVA’s
financial statement, which the OIG then reviews. In addition, the IG told
the Chairman that the CAO, as a former TVA IG, should not prepare the list
of potential contractors from which the IG would select. The Chairman
agreed with the IG that PriceWaterhouseCoopers should not conduct the
review but disagreed that the CAO should not take part in identifying
potential contractors.

According to the IG, he did not raise any concerns at the meeting about the
review of the OIG because he knew that an outside entity had conducted
the 1993 review of the OIG. He explained, however, that when he met with
the Chairman, he did not know that the OIG’s legal counsel had advised the
previous IG that the Board lacked the authority to contract for the 1993
review of the OIG. The IG added that he has always had a good relationship
with all Board members and noted that the Board never interfered with any
audit or investigation he had initiated. He stated that his office had
investigated a number of senior TVA officials, including all three Board
members, and issued reports that were critical of TVA’s administration. For
example, he audited a $30-million, irrevocable trust that the Chairman had
created and controlled.8 This trust was funded by TVA. The results of the
OIG audit assisted in the FBI’s criminal investigation, which the
Department of Justice declined to prosecute; the revoking of the trust; and
the funds’ return to TVA.

On March 3, 1999, the CAO notified the IG that he had identified
PriceWaterhouseCoopers and Verner Liipfert, Bernhardt, McPherson &


8
 This audit resulted from a GAO referral to the TVA OIG of an allegation that the GAO
FraudNet had received.




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                           Hand (Verner Liipfert) as the two potential contractors. Because of his
                           previous objection to PriceWaterhouseCoopers as the contracting party,
                           the IG’s only option was Verner Liipfert.


IG Raised Concerns About   On March 20, 1999,9 the IG reviewed a copy of a 1993 memorandum from
Management Review          the OIG legal counsel to the then IG. In the memorandum, the legal counsel
                           questioned whether the Inspector General Act, as amended, allowed
                           nonfederal entities to perform reviews of OIGs.10 The OIG legal counsel
                           told us that he provided the memorandum to the IG as soon as he
                           remembered that he had provided advice concerning the propriety of the
                           1993 proposed review. On March 22, 1999, the IG met with a TVA Assistant
                           General Counsel and advised her that he had concerns about the legality of
                           the review based on the 1993 memorandum.

                           The next day, March 23, 1999, representatives from Verner Liipfert and its
                           subcontractor Deloitte & Touche signed a contract with TVA to review the
                           OIG. The IG had no input into any aspect of the review, including its scope,
                           and did not know that the contract was being signed. Prior to the award of
                           the contract, the CAO provided copies of the two anonymous allegations to
                           the contractor, which it was to consider during the management review.
                           Under the contract, Verner Liipfert agreed to perform a broad-based review
                           of the audit, investigation, and inspection activities of the OIG and to
                           prepare a report of its findings for the Chairman. Verner Liipfert’s
                           responsibilities included, among other things, reviewing (1) OIG practices
                           and procedures, including manuals, memoranda, and correspondence;
                           (2) fiscal management procedures, with a selective analysis of budgets and
                           expenditures; (3) structure and organization, including the tracking of
                           ongoing projects and follow-up after the completion of an audit or




                           9
                            Also on Mar. 20, 1999, TVA issued a press release announcing that the Board had ordered a
                           review of the OIG and stating that nothing in particular had prompted the review. According
                           to the press release, the review would look at performance efficiency and monitor the IG's
                           operations. The IG reportedly had no objection to the review.
                           10
                                5 U.S.C. App. 3, § 4(b)(2).




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                             investigation; (4) training programs; and (5) management goals, strategies,
                             and procedures.11

                             After the contract was signed, the Chairman asked the IG to meet with him
                             and the contractor. At the meeting, the IG informed the Chairman that he
                             had specific concerns that the review by a nonfederal entity might violate
                             the Inspector General Act. The IG told us that the Chairman was very upset
                             and “chewed him out” for questioning the Board’s authority to hire a
                             contractor to perform the review. As a result of the IG’s objection, the
                             contractor told the Chairman and the IG that it would not start the review
                             until it received notice that the issue concerning the review’s legality had
                             been resolved. Subsequently, the Chairman called the IG to inform him that
                             the General Counsel would research the matter further.


Negotiations Concerning      On March 26, 1999, the OIG legal counsel informed the General Counsel
Contract Were Unsuccessful   that the IG would accept Verner Liipfert as the entity to perform the review
                             if the IG, rather than the Board, was the contracting party. The OIG legal
                             counsel added that a representative of the President’s Council on Integrity
                             and Efficiency (PCIE) at OMB had told the IG that this arrangement was
                             permissible.

                             On April 30, 1999, the General Counsel sent a memorandum to the
                             Chairman outlining the options available to the Board for a management
                             review of the OIG. According to the memorandum, the issue was discussed
                             with representatives from GAO,12 OMB, Department of Justice, and Office
                             of Government Ethics. The General Counsel told the Chairman that the
                             most desirable course would be for the Board to reach an agreement with
                             the IG as to the review’s necessity, the party to perform it, and the scope of
                             the review. However, the General Counsel recommended that the contract
                             include specific provisions pertaining to the flow of information to and
                             from the Board and Verner Liipfert.


                             11
                               In addition to these tasks, the contractor was required to determine the extent to which
                             the OIG supported TVA’s goal of being “customer-driven, employee-sensitive,
                             environmentally responsible and growth-oriented”; examine the existing procedures for
                             measuring performance and productivity; and examine criteria for allocating resources and
                             establishing priorities.
                             12
                               On Mar. 25, 1999, TVA’s Office of General Counsel contacted GAO’s Director of Audit
                             Oversight and Liaison, who was responsible for GAO work on IG matters, to discuss various
                             options available to the Board for a review of the TVA OIG.




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The Chairman agreed that the IG should be the contracting party as long as
the Chairman could request the contractor to review specific matters
identified during the review. At the Chairman’s request, on May 5, 1999, the
General Counsel provided an outline of his proposed contract
modifications to the IG. In the document, the General Counsel proposed
that the OIG be the contracting party. He also proposed requiring Verner
Liipfert to (1) hold entrance and exit conferences with, and to provide
weekly reports to, the IG and the Chairman; (2) review and fully address in
the final report matters that the IG or the Chairman requested; and
(3) provide copies of the final report to the IG and the Chairman.

The IG reviewed the General Counsel’s proposals and obtained advice from
the OIG legal counsel. On May 6, 1999, the OIG legal counsel sent the IG’s
counter proposals to the TVA Office of General Counsel. While the IG
agreed that his office should be the contracting party, he wanted to limit the
Board’s involvement in the review and/or oversight of the contractor.
Specifically, the IG proposed modifying the contract to state that the IG
would keep the Board apprised of the status of the review and would
provide a copy of the final report to the Board for its dissemination. The IG
told us that although he opposed adding language to the contract regarding
the Chairman’s role, he agreed to allow the Chairman to have unrestricted
access to the contractor.

The Chairman, however, did not agree that this later proposal should be left
to an oral understanding, believing instead that the written contract should
require the contractor to review the matters that he identified. The General
Counsel informed the IG of this on the same day that he received the IG’s
proposals.

The next day, the IG told the General Counsel that he was withdrawing his
offer that the OIG be the contracting party. He explained that members of
Congress and the IG community had expressed strong objections to
proceeding with any review that the Chairman could direct. The IG
suggested that the General Counsel request an opinion from OMB
regarding the Chairman’s authority to oversee the contractor’s actions
during a review of the OIG. However, no such request was made.13




13
  Although there was no document terminating the Mar .23, 1999, contract with Verner
Liipfert, officials of both TVA and Verner Liipfert informed us that it had been terminated.




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                             According to the IG, he concluded that the review was inappropriate in part
                             because TVA had used an OIG management review to remove William
                             Hinshaw, the previous IG. Both Mr. Hinshaw and former Director Kennoy
                             told us that the purpose of the prior OIG review was to remove
                             Mr. Hinshaw as IG. However, because Mr. Hinshaw subsequently resigned
                             from TVA, the review was discontinued before the contractor issued a final
                             written report to the Board.


Chairman Opted to Request    On May 5 or 6, 1999, after negotiations between the Chairman and the IG
Federal Entity’s Review of   had reached an impasse over whether the Chairman could share oversight
                             of the review with the IG, the Chairman requested advice from the U.S.
the OIG
                             Attorney for the Eastern District of Tennessee on how to proceed.
                             According to the Chairman, the U.S. Attorney recommended that TVA
                             identify three other federal IGs and let the IG select one to conduct the
                             review. The Chairman accepted this advice, instructed the CAO to prepare
                             the list, and asked the General Counsel to tell the IG about the new
                             proposal.

                             On the morning of May 14, before the list was completed, the IG called the
                             Chairman to advise him that a federal district court jury had acquitted Joe
                             Dickey, TVA’s former Chief Operating Officer, of all criminal charges.14 The
                             Chairman admitted to us that he had harshly criticized the IG and the OIG
                             during the conversation because of the acquittal. The Chairman explained
                             that he was upset because the OIG had spent approximately 2 years
                             investigating Mr. Dickey and he believed that the acquittal might expose
                             TVA and the IG to a civil lawsuit. During the conversation, the Chairman
                             told the IG that he should now cooperate with the management review. The
                             IG did not respond to this comment.

                             At the time, the Chairman assumed that the IG knew about his decision to
                             allow an IG to review the TVA OIG. However, the General Counsel had not
                             told the IG about the Chairman’s decision. To our knowledge, the
                             management review of the OIG has been suspended.




                             14
                               During an OIG audit of TVA contracts that started in Sept. 1996, issues were raised
                             concerning a contract awarded by Mr. Dickey, TVA’s Chief Operating Officer. These issues
                             were referred to OIG Investigations in Jan. 1997. Mr. Dickey resigned from TVA on Aug. 14,
                             1998, and was indicted on Sept. 15, 1998. This indictment was superceded on Nov. 4, 1998.
                             The trial ended in an acquittal of all charges on May 14, 1999.




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TVA Initiated Review of IG’s   On the afternoon on May 14, 1999, after hearing the conversation between
Credit Card Use                the Chairman and IG regarding the Dickey case, the CAO directed two
                               senior members of his staff to obtain copies of all of the IG’s TVA credit
                               card statements from 1994 to 1999 (the entire time the IG had served as IG)
                               and analyze them. Based on this analysis, one staff member prepared a
                               memorandum for the CAO on May 27, 1999, questioning the propriety of
                               the IG’s golf, restaurant, and liquor charges since, in the employee’s view,
                               the IG had no obvious business reason to be so heavily involved in such
                               activities. The staff member who prepared the memorandum admitted he
                               had conducted only “a very brief preliminary review of charges” on the IG’s
                               credit card statements and recommended that a further detailed review be
                               performed before any final determination was made.

                               According to the CAO, he requested the review because he considered the
                               IG’s use of his TVA credit card for golf fees to be inappropriate. In his view,
                               these actions compromised the IG’s independence as the IG was socializing
                               with distributors and with managers whom he was charged with
                               monitoring. The CAO further stated that he first learned about the IG’s golf
                               expenses when TVA was preparing a response to a Januar y13, 1999,
                               request from the Knoxville News Sentinel for the Board members’ 1998
                               calendar year travel, entertainment, and golf charges. He said that while the
                               Chairman was reviewing the charges that were made by the Board
                               members, 12 TVA executives were identified who frequently traveled,
                               played golf, and socialized with former Director Hayes. Information
                               regarding the 12 employees’ 1998 golf credit card charges, that included the
                               IG, was compiled on March 16, 1999, with no further action taken.

                               The IG learned about the review of his credit card usage in a meeting with
                               the CAO on May 25, 1999. Based on the May 14 meeting with the Chairman,
                               the IG asked the CAO for the meeting to discuss his options regarding his
                               future at TVA. According to the IG, the CAO suggested that he retire and
                               take a severance package, because the Chairman would spend every day of
                               the next 3 years “screwing” with him. As an example of this, the CAO told
                               the IG that TVA had reviewed his credit card statements and found he had
                               improperly charged golf expenses. According to the IG, the CAO informed
                               him that the Chairman had referred his golf charges to the U.S. Attorney for
                               the Eastern District of Tennessee.15 The IG also said that the CAO


                               15
                                 The IG subsequently contacted the U.S. Attorney, who denied knowing about a referral
                               involving the IG’s credit card use. We attempted to talk with the U.S. Attorney about this
                               matter, but the Department of Justice declined our request for an interview.




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mentioned the Chairman’s conversation with the U.S. Attorney regarding
the identification of three IGs to conduct the review and the IG’s selection
of one to conduct the review. However, the IG did not interpret this as an
offer for him to select an IG to conduct the review.

The CAO described the conversation somewhat differently. According to
the CAO, he told the IG that the Chairman had 3 more years until his term
expired, he knew that the relationship between the Chairman and IG was
not good, and it was not going to improve. The CAO stated that they
discussed two options: the IG could retire or stay and fight the
management review. He added that the IG raised the subject of whether a
severance package was available. The CAO admitted telling the IG that his
credit card charges had been reviewed but denied telling the IG that the
matter had been referred to the U.S. Attorney. The CAO also stated that, for
informational purposes only and not as an offer to the IG, he had told the
IG that the Chairman had spoken with the U.S. Attorney regarding the use
of another IG to conduct the management review.

After his May 25, 1999, meeting with the CAO, the IG called a congressional
member of the Tennessee Valley Authority Congressional Caucus, to inform
him that the Chairman wanted the IG to retire. The IG and the Chairman
told us that another member of Congress had called them shortly after the
IG’s conversation with the caucus member. According to the Chairman, the
second member informed him that the IG had asserted at an IG conference
in April that the proposed review of the OIG was an impediment to the IG’s
independence. The Chairman also told us that the second member had
advised him that he should not proceed with the review of the OIG and that
he planned to discuss the matter with GAO.

The Chairman told us that he viewed this conversation with a member of
Congress as a threat, so he instructed the General Counsel to prepare a
“defensive” letter responding to the member’s call. The letter was sent to
the member on May 26. In the letter, the General Counsel provided
background information concerning TVA’s proposed review of the OIG,
starting with a discussion concerning the Chairman’s receipt of the
anonymous management complaint. The General Counsel explained that
he had initially advised the Chairman that the Board had the authority to
hire an outside contractor to review the OIG but subsequently suggested
that the Chairman seek a mutually satisfactory agreement with the IG in
which the IG would have contracted for the review. He noted that during
this period, the Chairman had received information from an independent
source that the IG had abused his TVA credit card “to pay for charges at



Page 12                    GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                           B-283001




                           golf courses, the purchase of liquor and excessive restaurant charges.” We
                           determined that these allegations had not come from an independent
                           source but instead were the result of a preliminary review of the IG’s credit
                           card statements by the CAO’s office.

                           On the afternoon of May 26, 1999, the IG sent the Chairman a 7-day letter
                           claiming that the Chairman was interfering with the operations of the OIG
                           and engaging in harassment. As evidence of this, the IG pointed to the
                           proposed independent review of the OIG. He also noted his discussion with
                           the Chairman regarding the Dickey acquittal and opined that the Chairman
                           essentially had threatened him not to investigate any more cases involving
                           senior TVA officials. Further, he felt that the Chairman intended to hold the
                           threat of an outside review over his head if he did so. The IG also provided
                           details about the May 25 conversation with the CAO, in which the CAO had
                           told him the Chairman was reviewing his travel expenses.

                           On June 2, 1999, the Chairman sent you a letter responding to the IG’s 7-day
                           letter. The Chairman asserted that he had acted in a manner that was
                           sensitive to the status of the IG but did not respond on a point-by-point
                           basis to the IG’s allegations.


TVA and IG Used Media to   According to the Chairman, on May 26, 1999, he ordered that the TVA letter
Publicize Their Opposing   to the Representative be released to the press because he knew that the
                           IG’s 7-day letter would be released to the public within the next 7 days.
Allegations
                           After the letter to the Representative was released, a reporter with the
                           Knoxville News Sentinel interviewed the IG about the allegations
                           concerning his abuse of the TVA credit card. During the interview, the IG
                           described the issues he raised in his 7-day letter, including a description of
                           the May 14 and 25 conversations with the Chairman and CAO, respectively.

                           On May 27, 1999, the CAO issued a statement to the media denying the IG’s
                           allegations. In part, the CAO said,

                           “TVA takes the position there is no justification for the Inspector General to be spending his
                           time during the work day socializing and playing golf with managers whose operations he is
                           charged with monitoring as TVA’s independent watchdog. In our view, the Inspector General
                           should be independent of management and avoid even the appearance of any actions that
                           might be deemed inappropriate and would result in an OIG investigation.”

                           On May 28, 1999, the news media received information contained in the
                           May 27 memorandum prepared for the CAO, which analyzed the IG’s credit
                           card charges. This memorandum alleged that the IG had incurred $15,150 in



                           Page 13                           GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                          B-283001




                          potentially questionable charges from a casino/hotel, resorts, golf course
                          fees, liquor purchases, and restaurants. The memorandum failed to
                          disclose that these particular charges had been incurred over an
                          approximately 5-year period (1994-1999).16 TVA officials have denied
                          providing this information to the media.


TVA Referred Issues       After receiving a facsimile copy of the newspaper article entitled “Prosser:
Involving IG to ECIE      TVA wants me out of there,” an OMB official spoke to the TVA General
                          Counsel about the allegations raised in the article. The OMB official
                          indicated that the issues between the IG and TVA should not be fought in
                          the newspapers. She added that if TVA had serious concerns about the IG’s
                          actions, the matter should be referred to the PCIE Integrity Committee.

                          As a result of OMB’s advice, by letter dated June 1, 1999, the Chairman
                          referred the matter concerning the IG’s questionable credit card charges to
                          ECIE’s Chairman. In the referral, the TVA Chairman requested a review of
                          the IG’s credit card charges including questionable country club,
                          hotel/casino, golf, liquor, and other charges. The Chairman also provided
                          information about the two anonymous OIG personnel complaints.

                          On June 7, 1999, the ECIE Chairman forwarded the matter to the Chairman
                          of PCIE’s Integrity Committee. On June 25, the CAO’s office provided
                          documents to the Integrity Committee regarding the IG’s alleged
                          misconduct. Included was the May 27, 1999, “Preliminary Credit Card
                          Review” with attached schedules. Based on the unsubstantiated
                          information provided by the TVA Chairman, the Integrity Committee
                          forwarded the matter to the Department of Justice. The FBI is currently
                          reviewing the matter.

                          On August 20, 1999, after being informed that the FBI was investigating
                          allegations against the IG, the Chairman placed the IG on paid leave.


Press Release and Media   On June 2, 1999, TVA released to the press (1) the letter to the Chairman of
Leaks Occurred After      the ECIE requesting the investigation of credit card charges by the IG and
                          (2) the two anonymous complaints raising management issues within the
Referral to ECIE
                          OIG.

                          16
                           This disclosure was made in the May 20, 1999, draft of this memorandum from the senior
                          manager to his supervisor, the CAO.




                          Page 14                         GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                              B-283001




                              On July 23, 1999, TVA announced in a press release that it had revised its
                              policy on the employees’ use of agency credit cards for business travel and
                              entertainment. The announcement stated that additional controls would be
                              placed on TVA’s hospitality policy and that the number of TVA credit cards
                              would be decreased. The announcement added that the Chairman was
                              requiring the OIG to develop a similar entertainment policy for the OIG for
                              the Chairman’s approval. The Chairman stated in the release that these
                              changes were prompted by allegations that the IG had more than $10,000 in
                              charges on his credit card for meals, liquor, golf, and other entertainment.

                              On August 17, 1999, two documents were leaked to the media. One was a
                              June 24, 1999, memorandum identifying a number of new allegations
                              against the IG. The other was a July 21, 1999, letter from the Chairman to
                              GAO in which the Chairman opined that it would appear inappropriate for
                              an inspector general to spend significant time or resources on customer
                              relations. TVA denied releasing both documents to the media.

                              The allegations that the June 24 memorandum contained included, among
                              others, that the IG had participated in sports betting while at work, was
                              absent from his office frequently because he was socializing and playing
                              golf, and had failed to investigate a matter involving a TVA executive
                              because of their close relationship. We reviewed several of the allegations
                              in the memorandum and found them generally to be without merit. For
                              example, we found that the IG had investigated allegations against all three
                              Board members, including the official alluded to, and against friends of this
                              official.


Chairman and IG Did Not       During our investigation, we determined that in two instances the
Receive Crucial Information   Chairman and the IG had failed to receive crucial information that might
                              have impacted on the resolution of the management-review issue. The
                              Chairman based his decision for a management review in part on the belief
                              that the OIG had not been reviewed in 5 years. We determined that during
                              this 5-year period, the OIG had had two peer reviews. The last peer review
                              was completed on August 21, 1998. It concluded that the TVA OIG had a
                              system of quality controls that provided with reasonable assurance for the
                              OIG’s conformance with professional standards in the conduct of its audits.
                              According to the Chairman, he was not aware that a peer review had been
                              completed in August; and if he had known, it would have affected his
                              decision to order a management review of the OIG. He added that he most
                              likely would have postponed the review. The IG told us that he never
                              thought to inform the Chairman about the peer review.



                              Page 15                     GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                              B-283001




                              According to the IG, he was never offered the option of selecting from
                              three other OIGs to conduct this review. Further, he would not have
                              objected to such a review because, in his opinion, any IG conducting the
                              review would have remained independent and would not have allowed the
                              Chairman to have oversight of the review. However, this information was
                              not conveyed to the Chairman; and the disagreements between the IG and
                              the Chairman escalated significantly. After the Chairman criticized the IG
                              about the Dickey case, TVA initiated an extensive review of the IG’s credit
                              card expenses; and the IG concluded that the Chairman wanted to get rid of
                              him.

                              The Chairman alone initiated the process for a management review of the
                              OIG. When the Chairman received the analysis of the IG’s credit card usage
                              for the IG’s entire tenure, he began his most agressive actions against the
                              IG. This occurred after Directors Hayes and Kennoy had left TVA. The
                              Chairman’s actions against the IG included the release of unsubstantiated
                              allegations to the media and the referral of unsubstantiated allegations to
                              the ECIE. These actions could be viewed as an attempt to undermine the
                              IG’s independence.



Chairman’s Allegations        Based on its “brief preliminary review” of the IG’s credit card statements,
                              TVA questioned a total of $15,150 in charges for the years 1994 through
Concerning IG’s Credit        1999. (See table 1.) We reviewed in depth the IG's most recent charges—
Card Expenses                 $14,197—from January 1, 1998, to May 12, 1999. As to these, we did not find
                              that the IG had violated any TVA travel policy or rule. However, as the IG
                              himself recognized, his actions could have created the appearance that his
                              independence had been compromised. Based on this analysis, we
                              determined that a further analysis of credit card charges for the period 1994
                              through 1997 was not warranted. In addition, for comparison purposes, we
                              requested TVA to compile credit card expenses for calendar year 1998 for
                              the three Board members and the senior executives that report directly to
                              the Board. This comparison indicated that the IG’s credit card expenses
                              were consistent with those of other TVA executives. See appendix I for this
                              comparison.


IG’s Travel Activities Were   As the head of a major office at TVA, the IG often traveled in connection
for Business Purposes or      with his position. For example, he traveled to attend meetings in his
                              capacity as an ECIE representative on a PCIE committee. In other
“Customer Relations”
                              instances, he attended TVA Board meetings or met with congressional
                              members and staff to present OIG reports. These activities clearly do not


                              Page 16                     GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
B-283001




raise questions as to the purpose of the travel and were reimbursable as
long as the expenses fell within the guidelines set out in TVA’s travel
policies.17

The IG also incurred expenses as a result of activities that involved
“customer relations.” The IG was a member of TVA’s Business Council and,
as did the other Council members, participated in the customer outreach
activities. These activities were done at the specific behest of former
Director Hayes, who was most concerned with TVA’s maintaining or
increasing its market share for electric power. Director Hayes also
emphasized that it would be beneficial for the IG to take part in
recreational events, such as golf outings that were ancillary to various
meetings, that TVA planned as part of its program of customer relations.
Moreover, he specifically encouraged the IG to bill the charges to TVA. The
IG had initially paid for his own golf and charged the cost to TVA only when
Director Hayes told him that such charges were consistent with TVA’s
policy regarding allowable expenses for hospitality.

The Chairman was aware of the IG’s involvement in the customer relations
program and told us that he considered this activity completely appropriate
for the IG as long as his activity had been coordinated with Director Hayes.
Director Kennoy also told us that it was appropriate for the IG to engage in
customer relations.

The IG’s involvement in the customer relations program was coordinated
with Director Hayes. The IG never reached out to any distributors but
attended functions only when requested by the Customer Relations and
Marketing Group, which had responsibility for administering the customer
relations program. Essentially, the IG attended various meetings with
distributors at which the IG would discuss the IG Act, his background, and
the role of the OIG at TVA. The IG also assisted certain customers in
dealing with problems that were similar to those encountered by an IG. For


17
  TVA travel policy required that TVA pay for travel expenses incident to business purposes
for such things as transportation, lodging, meals, and other approved expenses in
accordance with TVA guidelines and the Federal Travel Regulations, which are applicable to
most civilian employees of the federal government. In this regard, TVA reimbursed business
travelers for such items as meals, local transportation, lodging, laundry/dry cleaning,
parking, phone expenses, and other incidentals. The reimbursement for meals, lodging, and
laundry/dry cleaning was limited to 150 percent of the locality rate set by the General
Services Administration (GSA) for civilian employees of the federal government in a travel
status. However, since 1997, in special and unusual circumstances the maximum
reimbursement can be up to 300 percent of the locality rate set by GSA.




Page 17                          GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
B-283001




example, the IG assisted one company in setting up an ethics program and
another company in setting up an improved financial control system. He
felt that all of these activities were beneficial to his office.

In performing his customer relations function, the IG sometimes paid the
bill for other TVA employees, Board members, and customers. In some
instances, the IG paid the bill when another TVA official could also have
paid it. In other situations, the IG was the only TVA person present who
could have paid the bill.

As part of its business practices, TVA had hospitality guidelines, which
provided that hospitality was available to official visitors, candidates for
employment, guests, and employees as a part of its business activities when
it was determined to be in TVA's best interest. The guidelines further
provided the following:

“Hospitality services provided for and paid for by TVA may include but are not limited to:
− Meals.
− Refreshments.
− Banquet or food services.
− Room and equipment rental associated with hospitality.
− Lodging, meal and travel expenses for visitors and guests.
− Entertainment.
− Flowers and decorations for events (as determined by the TVA organization).
− Recognition awards.
− Gifts.”

OIG had written policies indicating that the OIG followed TVA policy
except for some modifications based on the OIG's unique role under laws
and regulations. Nothing in these laws and regulations precluded the IG
from engaging in hospitality functions and incurring the type expenses
provided for in the hospitality policy. Indeed, the OIG policy specifically
indicated that, in accordance with TVA policy, OIG employees may pay
hospitality expenses for non-OIG individuals for a business purpose, such
as to improve relations with individuals that TVA worked with on a regular
basis.

The IG did acknowledge that his close relationship with members of the
Board and his participation in TVA-sponsored social events could have
created the appearance that his independence had been compromised. He
continued, however, that he had participated at the Directors’ behest. He
felt that participating in these activities enabled him to maintain a good
working relationship with the Board. He concluded that his participation
did not impede his independence.



Page 18                          GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                                           B-283001




Contested Charges for 1998-                Table 1 details the TVA-questioned expenditures by category and the cost
1999 Were Appropriate                      incurred for each year from 1994 through mid-May 1999.




Table 1: IG's Questioned Charges Based on TVA's Preliminary Review

Category of expenditure             1994              1995           1996            1997            1998           1999a            Total
Hotel/casino                          $0                $0            $68             $68            $247            $147            $530
Golf resorts                         489               480            218             629           2,384             180          $4,380
Liquor                                 0                 0               0               0            303                0           $303
Nonlocal restaurant charges          493               254          1,793           1,548           1,669             162          $5,919
Local restaurant charges             225               621               0          1,139           1,013             385          $3,383
Other questionable charges             0                95              32            328                0            180            $635
Total                             $1,207             $1,450        $2,111          $3,712          $5,616          $1,054         $15,150


                                           a
                                           We examined 1999 charges made through May 12.
                                           Source: May 27, 1999, TVA memorandum to the CAO, entitled “Preliminary Credit Card Review −
                                           George Prosser.”


                                           We reviewed the charges in each category for 1998 and 1999. Based on the
                                           TVA travel and hospitality policies, we found that none of these charges
                                           violated TVA policies regarding the incurring of expenses for business and
                                           hospitality purposes. Specifically, we found the following as to these
                                           charges.

Hotel/Casino                               TVA alleged that the IG had incurred hotel and casino expenses in
                                           Philadelphia, Mississippi, on three occasions in 1998 and 1999, totaling
                                           $394. In 1998, the IG went to Philadelphia twice: in February, for a TVA
                                           Board meeting followed by other business meetings and in October, for an
                                           OIG presentation that he made in Philadelphia and a contiguous city. The
                                           expenses charged for these trips were for lodging. In 1999, the IG went to
                                           Philadelphia for a Joint OIG/TVA presentation made at Mississippi State
                                           University. On this trip, the IG charged the room expenses for himself and
                                           the Chief Financial Officer, who also made a presentation. These expenses
                                           were all appropriate.

Golf Resorts                               On seven occasions in 1998 and once in 1999, the IG played golf following
                                           either an official TVA meeting, such as the monthly meeting of the TVA
                                           Board, or an OIG presentation involving customer relations. His expenses
                                           for these golf activities during this period totaled $892 and ranged from $45



                                           Page 19                           GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                              B-283001




                              to $276. In several instances, the IG paid the golf fees for TVA customers, as
                              he did when he incurred the $276 expense. The IG’s golf expenses were
                              consistent with the TVA hospitality policy.18

                              The IG also charged $1,672 at the Power Play Golf Tournament, a major
                              event sponsored by TVA and its customers to raise scholarship money. This
                              amount covered the IG’s lodging and golf fees. In addition, some of this
                              amount covered the expenses of another OIG employee who attended in
                              order to ensure the accountability of the funds raised at the event. This
                              employee did not have a TVA credit card, and the IG charged all the
                              employee’s expenses. The IG also paid certain expenses for customers. As
                              a senior official at TVA, the IG’s payment of these expenses was consistent
                              with the TVA’s hospitality policy. Indeed, other TVA executives incurred
                              charges on their TVA credit cards for golf fees and lodging similar to those
                              of the IG.

Liquor                        On one occasion, the IG purchased liquor, which cost about $303, as an
                              accommodation for Director Hayes who was going to make the purchase
                              so that alcohol would be available at an official TVA dinner in a “dry”
                              county. At the time, Director Hayes had a family emergency, which
                              prompted the IG to make the purchase. Clearly Director Hayes could have
                              purchased this liquor under the TVA hospitality policy, and we found no
                              policy or rule that would prohibit the IG from substituting for a Director.

Nonlocal Restaurant Charges   During 1998 and 1999, the IG allegedly charged a total of $1,831 at
                              restaurants on 15 different occasions. These charges ranged from $35 to
                              $163, except for one of $500. In every instance, the IG was on official
                              business including meetings involving audits, with confidential informants
                              and members of Congress, or attendance at official TVA functions. In
                              certain instances, the IG paid for meals for others. For example, the
                              $500 charge occurred in Washington, D.C., when the IG charged the cost of
                              a meal served at a business meeting he attended with members of the
                              Congressional Committee having oversight of TVA. All of these expenses
                              were consistent with TVA travel policy and rules.

Local Restaurant Charges      Some expenses that were not incident to travel were called into issue. For
                              the period we reviewed, these expenses totaled $1,398 and covered meals

                              18
                               In one instance, the IG paid the golf fees for Director Hayes. Since Director Hayes was
                              clearly authorized to charge TVA for this expense and the IG was authorized to make such
                              payments when in the best interest of TVA, we find the IG's action unobjectionable.




                              Page 20                         GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                             B-283001




                             that the IG purchased in the Knoxville area on 17 occasions. The costs of
                             the meals ranged from $10 to $156, except for one that was $582. In most
                             instances, the IG conducted a business meeting during lunch and paid for
                             all participants. For example, he met with the Special Agent in Charge of
                             the FBI’s Knoxville Field Office on at least three occasions in 1998 on
                             matters of mutual concern and paid for the meals. He also held business
                             lunches with confidential informants and paid for these. Three charges
                             during 1998 were related to a meeting that the IG had with representatives
                             from the OIG of the National Archives and Records Administration. TVA
                             policy permitted the IG to charge these meals while he was engaged in
                             official business. Lastly, a $582 charge was for an employee appreciation
                             luncheon, which was covered under the TVA hospitality policy.

Other Questionable Charges   TVA also raised questions about miscellaneous charges the IG had
                             incurred. Four of these arose in the 1998 and 1999 time period we reviewed.
                             One was a charge of $43 the IG had made for a personal item; he had
                             immediately reimbursed TVA even though he was not asked to do so. A
                             second charge involved $732 airline tickets that the IG never used. We were
                             informed that this was due to an administrative error that eventually
                             resulted in TVA’s account being credited for the amount. A third charge
                             consisted of $118 for flowers for an official TVA event. In this instance, a
                             Director had asked the IG to order the flowers for customer appreciation.
                             The fourth charge, for $19, was for publications for the OIG. The purchase
                             of flowers was covered under the TVA hospitality policy. We determined
                             that the publications purchase was needed for the work of the OIG.



Scope and                    We conducted our investigation from June 9, 1999, through September 7,
                             1999. We interviewed TVA officials involving both TVA’s attempt to retain a
Methodology                  nonfederal entity to conduct a management review of the OIG and the
                             analysis of the IG’s TVA credit card usage. We also interviewed current and
                             former OIG officials regarding the OIG performance review issue and the
                             IG’s use of the TVA credit card. Further, we contacted individuals from
                             OMB, FBI, Verner Liipfert, and the U.S. Attorney's Office for the Eastern
                             District of Tennessee regarding their conversations with TVA officials. The
                             Department of Justice denied our request to interview the U.S. Attorney for
                             the Eastern District of Tennessee.

                             We analyzed records related to both the management review and charges
                             that the IG made using a TVA credit card. These records included internal
                             memoranda, notes, contract files, audit reports, and policy manuals




                             Page 21                    GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
B-283001




regarding OIG travel and hospitality expenses. We also reviewed quality
standards for IGs. In addition, we reviewed the IG’s calendars for 1994
through 1999 and invoices for charges to the TVA credit card for 1996
through 1999. Receipts for 1994 and 1995 were no longer available. Further,
we reviewed a detailed analysis of the IG’s travel, by trip, for calendar year
1998 and the first 5 months of 1999. The IG also provided written
explanations for expenses he had incurred during 1998 and 1999 and for all
charges for golf resorts for the period 1994 through May 1999.


As agreed with your office, unless you release its contents earlier, we plan
no further distribution of this report until 30 days after the date of this
letter. At that time, we will send copies of this report to the Honorable
Craven Crowell, Chairman, Tennessee Valley Authority; George Prosser,
Inspector General, Tennessee Valley Authority; and interested
congressional committees. We will also make copies available to others
upon request. If you have questions concerning this report, please contact
me or Donald Fulwider at (202) 512-6722. John Ryan was a key contributor
to this case.

Sincerely yours,




Robert H. Hast
Acting Assistant Comptroller General
for Special Investigations




Page 22                     GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
Page 23   GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
Appendix I

1998 Credit Card Charges by TVA Board, IG,
and Senior Executives                                                                                                                            Appendx
                                                                                                                                                       Ii




Table 2: 1998 Domestic Charges by TVA Officials

                                                                         Other        Personal
                                                           TVA        business         vehicle
Officiala        Hotelb   Mealsb     Transportc           plane        expense             use        Golf      Liquor       Otherd       Subtotal
Chairman
Crowell         $11,309   $3,848       $15,398         $56,294                $0           $491          $0             $0   $1,042        $88,382
Director
Kennoy            4,341     1,271        7,468           52,860                 0           707           0              0    1,661        $68,308
Director
Hayes             6,134     1,270        8,326           27,042                 0           105          90              0     844         $43,811
IG Prosser        4,453     2,758        5,381                 0                0         1,342      1,174          303         74         $15,485
Chief
Financial
Officer          11,685     4,471        1,089                 0           1,304               0       120               0        0        $18,669
Chief
Operating
Officer           3,659       79              447              0           1,025               0       120               0        0         $5,330
CAO               3,079      874              549              0           3,994               0       120               0        0         $8,616


                                         a
                                             TVA’s General Counsel charged no domestic expenses during 1998.
                                         b
                                         This category does not include direct bills to TVA. It includes only the amount charged on the VISA
                                         Gold Card.
                                         c
                                          “Transport” includes commercial flights, travel service, car rentals, taxis, gasoline, and parking.
                                         d
                                             “Other” includes conference fees, telephone calls, tips, and facsimiles.




                                         Page 24                                    GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
                                             Appendix I
                                             1998 Credit Card Charges by TVA Board, IG,
                                             and Senior Executives




Table 3: 1998 International Charges by TVA Officials

                                                                                            Other
                                                                                         business                                           Total 1998
Officiala                           Hotelb               Mealsb       Transportc          expense             Otherd        Subtotal          charges
Chairman Crowell                    $2,284                 $484          $14,678                 $0                $8        $17,454         $105,836
Director Kennoy                        585                   151            1,740                  0               12           2,488          $70,796
Director Hayes                           0                     0                 0                 0                0                0         $43,811
IG Prosser                               0                     0                 0                 0                0                0         $15,485
Chief Financial Officer              1,806                    27                 0               24                 0           1,857          $20,526
Chief Operating Officer                  0                     0                 0              724                 0             724           $6,054
CAO                                      0                     0                 0                 0                0                0          $8,616


                                             a
                                                 TVAs General Counsel charged no international expenses during 1998.
                                             b
                                             This category does not include direct bills to TVA. It includes only the amount charged on the VISA
                                             Gold Card.
                                             c
                                              “Transport” includes commercial flights, travel service, car rentals, taxis, gasoline, and parking.
                                             d
                                                 “Other” includes conference fees, telephone calls, tips, and facsimiles.




(600553)             Leter                   Page 25                                  GAO/OSI-99-20 Opposing Allegations by TVA Board and IG
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