An Investigation of Travel Reimbursements in Connection with the INSís Operation Safeguard
Office of the Inspector General
In 1999, Operation "Safeguard 99" (hereinafter referred to as Operation Safeguard) was established in the Tucson Border Patrol Sector as part of the Immigration and Naturalization Service's (INS) National Strategy to secure control of the southwest border. This Tucson Sector initiative was first launched in 1994, on a much smaller basis, as Operation "Safeguard 1994." Similar operations to control illegal crossings in other Border Patrol sectors, such as in the El Paso and San Diego sectors, eventually shifted the flow of illegal crossing into the Tucson Sector's area of operations. Therefore, as part of Operation Safeguard 99, many Border Patrol resources were redirected in 1999 to support the Tucson Sector's prevention and interdiction efforts.
As a result, since 1999 the INS has detailed thousands of agents and other personnel to the Tucson Sector, and to Douglas, Arizona in particular, to participate in the operation. The number of Border Patrol agents (BPA) who were detailed to the Tucson Sector varied from month to month, but averaged approximately 100 per month.
The rapid increase of BPAs in southern Arizona presented a significant stimulus to that economy, and local lodging providers welcomed the increased business. Despite the large number of Border Patrol agents requiring lodging on a regular basis, however, the INS did not seek to negotiate, as an agency, a competitive lodging rate with area hotels and apartment complexes. Rather, the detailed BPAs were left on their own to secure whatever lodging arrangements they could find.
In an effort to obtain and ultimately retain the agents' business, many local lodging providers offered special incentives for the agents to rent lodging from them. These incentives included food vouchers, credits at restaurants, complimentary meals, gym memberships, and in some cases cash rebates. Until after the complaints that were the basis for this investigation arose, however, INS management did not provide policy or ethical guidance to its employees concerning the incentives that the lodging providers offered. In our investigations, we also found that in some cases supervisory Border Patrol agents rented rooms in their homes to other agents or purchased rental properties to rent to agents.
Two Border Patrol agents who were permanently assigned to the Douglas Border Patrol Station reported allegations of misconduct regarding these lodging benefits to United States Congressman Jim Kolbe, whose district covers the Douglas area. The allegations concerned four areas: 1) that some detailed Border Patrol agents had committed travel voucher fraud in connection with the lodging benefits; 2) that Supervisory Border Patrol Agents had rented properties to subordinate agents; 3) that an INS Office of Internal Audit (OIA) agent, who the INS had assigned to investigate these allegations, had refused to adequately pursue the matter; 4) and that Border Patrol managers in the Tucson Sector retaliated against the complainants for reporting the allegations.
In September 2001, Congressman Kolbe requested that the Department of Justice's Office of the Inspector General (OIG) investigate the complainants' allegations and the circumstances surrounding the detailing of agents in support of Operation Safeguard. He further asked that the OIG examine the types and legality of the incentives that the lodging providers offered to those agents.
In response to these complaints, the OIG opened this investigation. This report summarizes our findings.
To investigate these allegations, we initially obtained a listing from the INS Western Region identifying all employees who were detailed to Operation Safeguard. We then requested that INS locate and provide copies of all available travel vouchers submitted by those employees who were detailed to the Tucson Sector during Fiscal Years 2000 and 2001.1 (Our request is included as Exhibit 1.) Thereafter, we obtained and audited 3045 travel vouchers from the INS Finance Center in Dallas, Texas for Fiscal Years 2000 and 2001 covering those individuals who were detailed to all Tucson Sector Border Patrol stations in support of Operation Safeguard.2
We analyzed and inputted the information contained in these 3045 vouchers into an OIG database. From these vouchers, we determined that 1,436 INS employees were detailed to the Tucson Sector in support of Operation Safeguard during Fiscal Years 2000 and 2001. In addition, we identified 250 lodging providers where detailed INS employees stayed during this period.
Through OIG subpoenas, we obtained lodging receipts and rental contract records from the largest lodging providers. We also reviewed records maintained at the Cochise County Tax Assessor and Recorder's Offices to ascertain the ownership of rental properties. In addition, we reviewed INS documents relating to Operation Safeguard as well as receipts lodging providers maintained in the course of their rental businesses.
We conducted many interviews in connection with this investigation. In total, the OIG interviewed more than 100 BPAs, including agents who were detailed to the Tucson Sector, many of their supervisors, and Border Patrol management officials. The OIG also interviewed the INS's Office of Internal Audit (OIA) agent who conducted the INS's original investigation into the allegations, as well as his supervisors.
In addition, we interviewed 14 lodging providers who provided much of the lodging to the detailed Border Patrol agents in the Douglas and Sierra Vista, Arizona areas.3 Due to the large number of lodging providers, we submitted a questionnaire to 70 providers, representing a sample of the remaining lodging providers who we did not interview. In addition, the OIG identified and interviewed seven INS employees or spouses of INS employees who provided lodging for detailed agents.
We presented the results of our investigation, including the potential violations of law, to the U.S. Attorney's Office in Tucson and to the Public Integrity Section of the Department of Justice's Criminal Division for prosecutive decisions. In most cases, they declined criminal prosecution. However, the OIG continues to work with the Tucson U.S. Attorney's Office and the Internal Revenue Service on several allegations that could lead to prosecution of INS employees for fraud, false statements, or tax evasion violations.
The OIG's Office of General Counsel (OGC), in consultation with INS's Ethics Officer and the General Service Administration, prepared a legal opinion regarding acceptance of the various incentives that the lodging providers offered to renters. That memorandum is included as Exhibit 2.
During the two-year period we reviewed, it appeared that 114 travel voucher claims were erroneously overpaid, by a total of approximately $16,000. Our review also revealed that there appeared to be little oversight of the voucher approval process or questions raised concerning the amounts claimed. We referred this issue to INS OIA for consideration of an internal audit of that area. We also referred other BPAs' travel vouchers that were identified as indicating possible fraud to INS OIA for follow-up and any corrective action.
The following sections describe the results of our investigation. We first offer an overview of Operation Safeguard, its purpose and implementation strategy, its proposed duration of activity, and the need for increased detailing of agents to the Douglas area. We then describe benefits provided by various lodging providers in the Douglas area to the detailed Border Patrol agents. Next, we describe the issues concerning the rental by supervisory Border Patrol agents to the detailed agents. We then briefly discuss the allegations of retaliation against the complainants who raised these complaints. Finally, we provide our conclusions and recommendations.
In October 1993, Silvestre Reyes, who was then the Chief of the El Paso Border Patrol Sector, initiated Operation Hold the Line in the El Paso Sector. This program deployed numerous Border Patrol personnel along the border in an effort to significantly reduce illegal border crossings in the area.
Drawing on the El Paso initiative, in August 1994 the Attorney General and then-INS Commissioner Doris Meissner agreed to establish a border enforcement program called the National Border Strategy. This was a multi-phase, multi-year enforcement strategy designed to secure control along the southwest border. The strategy changed the Border Patrol's emphasis on apprehending illegal entrants to an emphasis on preventing their crossing the border in the first place. As part of the new strategy, the Border Patrol staged many agents in fixed positions along the border. The Border Patrol also directed attention to the points of entry into the United States, the primary staging areas, and the egress away from the border once illegal entry was made. The strategy was designed to shift crossings to remoter areas where it was harder to cross, thereby deterring crossing in total.
In October 1994, the San Diego Sector initiated Operation Gatekeeper as part of the new strategy. In August 1997, Operation Rio Grande was initiated in the McAllen Sector. In each of these operations, the Border Patrol augmented the sector's resources by detailing into the sector agents and personnel from other areas.
In January 1999, Operation "Safeguard 99" was established in the Tucson Sector. Although originally formed in 1994 at a much smaller level,4 the operation was expanded in 1999 to strengthen Tucson Sector's enforcement operations.
The Tucson Sector is composed of eight stations - Ajo, Casa Grande, Douglas, Naco, Nogales, Sonoita, Tucson, and Willcox. The sector extends across 261 miles of Arizona's southern border, from the eastern edge of Yuma County, Arizona to New Mexico. The Tucson Sector separated its geographic area into three priority target quadrants - Nogales, Douglas, and Ajo and the western desert.
Based on the historically high volume of illegal crossers, Phase I of Operation Safeguard 99 focused on the Nogales area. The INS formed deterrence units, tactical interdiction units, tactical response units, operation disruption units and immigration checkpoints along various roadways leading from the border. The success of the INS's strategy involved (1) gaining control of the area, (2) maintaining control of the area, and (3) expanding to other areas as the illegal flow of entry shifted.
As noted above, this strategy was a resource-intensive effort, requiring many additional Border Patrol personnel. Because Border Patrol employees do not sign Mobility Agreements obligating them to accept reassignments based on the needs of the Border Patrol, management was unable to involuntarily transfer agents from other sectors to the Tucson Sector. Instead, agents from other sectors were detailed for temporary assignment, normally for 30 days, but in many cases for much longer periods.
When Operation Safeguard 99 commenced in the beginning of 1999, the Nogales Station had a permanent staff of 80 agents. A significant number of personnel, equipment and resources were detailed from the INS's Western Region, primarily from the San Diego Sector, to the Tucson Sector. The Resource Support section of Operation Safeguard 99's plan called for 125 INS employees to be detailed to the Tucson Sector each month.
As part of Operation Safeguard 99, the Western Region drew on the San Diego Sector's resources because that sector had gained and maintained control of its area of operations. In May 1999, approximately 50 agents were detailed to the Nogales Station on a monthly basis. As the operation expanded, additional resources were sent to that area.
Toward the end of calendar year 1999, Tucson Sector management believed that it had gained an acceptable amount of control within the Nogales area. It therefore shifted its attention to the Naco/Douglas corridor.
In January 2000, the Tucson Sector began Phase II of Operation Safeguard 99 at the Douglas Station. At the time, approximately 350 agents were permanently assigned to that station, due to an increase in the hiring of BPAs. In addition, approximately 100 agents each month were detailed to the Douglas Station.
As the Tucson Sector determined that it had an acceptable degree of control of Naco/Douglas corridor, Phase III was established in the Ajo and western desert area, which encompasses 120 miles of the border. This began in June 2001 and increased in the summer of 2002.
Like other sectors' operations in support of the INS's National Strategy, Operation Safeguard 99's proposed duration was contingent upon the Tucson Sector obtaining an acceptable degree of control of illegal immigration within its sphere of operation. Therefore, its plan did not set a timetable for its eventual termination, and Operation Safeguard is continuing.
The Tucson Sector in concert with the Western Region determined the number of personnel and amount of resources that were needed to continue the operation. In the overwhelming majority of cases, the Western Region required the San Diego Border Patrol Sector to identify its personnel for detail to the Tucson Sector.
The San Diego Sector, in agreement with the National Border Patrol Council, formed "Detail Management Teams" (DMT) at its stations. The DMTs, which included union officials, selected personnel from their stations to be detailed to Tucson. The selection criteria included seniority, entry of duty dates, previous details, and training. Some agents told us that they "volunteered" for their otherwise mandated detail to the Tucson Sector. There appeared to be little input from station management about who was selected or the length of their detail.
Normally, the agent's detail to the Tucson Sector was for 30 days. However, agents were often detailed from their permanent stations to the Tucson Sector for longer periods of time, some for more than a year. In fact, we found instances where agents moved out of their permanent homes, placed their personal effects in storage, and purchased homes in the Douglas area.
The agents were normally given advance notice ranging from two days to one month of their detail. The degree of preparation the agents received prior to their detail varied. Some stations supplied an extensive information packet to agents prior to departure, containing such information as the names of hotels and apartments in the areas, a travel order and voucher checklist for preparing a voucher using the INS's Travel Manager computer program, as well as other materials. Some agents recall seeing pamphlets posted on their stations' bulletin boards advertising lodging that was available in the Douglas area. Other stations simply informed the agents that they had to report to a particular station in the Tucson Sector and left the logistics to those agents.
Most agents told us that they were left on their own to make lodging arrangements. We found that agents who were on their first detail to Douglas and were searching for housing often relied upon the advice of other agents who had preceded them.
In the beginning of the Douglas phase, the agents stayed primarily at the Gadsden Hotel, the largest commercial provider in the Douglas area. The Gadsden Hotel also offered a "meal voucher" program (described below), which made it attractive to stay there. Over time, other commercial and private lodging facilities in the Douglas and Sierra Vista areas began offering other programs as an incentive to attract Border Patrol lodgers.
Upon arrival at the Douglas Station, the agents were given an area orientation briefing. Agents who we interviewed stated that some lodging providers handed out flyers and other promotional materials to the agents during their breaks. Those activities occurred outside the building where the briefings were being held.
With regard to the completing and processing of their travel vouchers, the agents explained that other than the initial training they received at the Border Patrol Academy, they did not receive any training specific to the Operation Safeguard detail. Some agents, as required by INS policy, completed their travel vouchers using the INS's Travel Manager database program, which was installed on some station's computer systems. When the program was not working or not installed on the computer system, the agents gave their receipts and travel orders to their station's administrative clerk, who then completed the vouchers.
Some Supervisory Border Patrol Agents (SBPA) accompanied detailed agents from the San Diego and other sectors to the Tucson Sector for the operation. Those SBPAs had direct supervision for the detailed agents and wrote the detailed agents' performance evaluations. Field Operations Supervisors, who were permanently assigned to Tucson Sector stations, had overall supervision for permanent and detailed agents working in those stations.
Aside from their normal duties, a detailed SBPA was given the additional duty to review and approve travel vouchers for the detailed agents. In some cases, an SBPA at an agent's home station reviewed the travel vouchers after the administrative staff had filled them out. We were informed that, normally, the SBPA merely glanced through the voucher and then signed it. At times, the SBPA had to review and approve vouchers from an entire shift of detailed agents. The sheer volume of vouchers being processed left little time for an in-depth review of them. After the vouchers were approved, they were returned to the agents, who in turn sent them to their permanent station or to the Finance Center.
The OIG investigated allegations that Border Patrol agents who were detailed to the Tucson Sector in support of Operation Safeguard were obtaining various "kickbacks" as an incentive to stay at various lodging facilities in the Douglas and Sierra Vista areas, and that the agents did not deduct a corresponding amount from their lodging or their Meals and Incidental Expense (M&IE) claims when they filed their travel vouchers. The incentives included cash, food vouchers, free meals, and memberships to gyms. It was further alleged that SBPAs who were assigned to the Douglas Station rented homes to subordinate agents.
The OIG coordinated this investigation with the U.S. Attorney's Office in Tucson, Arizona. The OIG also received information and assistance from the INS, the Office of Government Ethics, the Office of Special Counsel, and the General Services Administration.
During the time period we reviewed, the maximum daily rate was $55 for lodging and $30 for M&IE for the Douglas and Sierra Vista area. The following describes the lodging rates and the incentives offered by various lodging providers to detailed Border Patrol agents in the Douglas and Sierra Vista areas.
A review of the travel vouchers identified 631 instances where a Border Patrol agent stayed at this commercial hotel in Sierra Vista, Arizona. An OIG interview of Kim Kaiser, the manager of the Windemere Hotel, revealed that the hotel's single room rate was $55 per day plus tax. Kaiser noted that the hotel offered every guest a complimentary breakfast buffet and beverages at a nightly happy hour. It also gave extended-stay BPAs and other government employees a free membership at a local health club. Kaiser equated those services to those offered at the Embassy Suites Hotels.
The OIG interviewed a sampling of 15 agents who rented at this hotel. They advised us that they accepted the incentives that were offered and did not reduce their claim for reimbursement. They said that they paid the full per diem lodging rate and received receipts reflecting their payments.
The OIG OGC's legal opinion, based on a review of General Services Administration regulations, indicates that federal employees can accept complimentary meals in this circumstance without that incentive affecting their per diem. We therefore concluded that the BPAs who stayed at this hotel could accept the breakfast buffet and happy hour beverages without taking corresponding reductions in their claims for per diem entitlements. It was also acceptable for the agents to use the gym, as there was no extra charge imposed on the government by their doing so. This benefit falls in the category of a promotional benefit the government could not use.
A review of the travel vouchers showed that 293 detailed Border Patrol employees had 455 instances of lodging at this commercial hotel, located in Douglas. An OIG interview of Robin Brekhus, the owner/manager of the Gadsden Hotel, revealed that the hotel's standard single room rate was $55 per day plus tax. Brekhus offered that rate to every lodger. Based on availability, Brekhus initially gave state and federal employees an upgrade to a suite at no additional cost. With the influx of lodgers to the Douglas area, Brekhus was unable to offer all the government employees this upgrade.
Brekhus discovered, however, that potential lodgers were staying at other hotels in the area that offered a complimentary breakfast and nightly happy hours. Consequently, to compete with those facilities, Brekhus provided BPAs and other extended-stay lodgers a $15 per day credit for use toward the purchase of meals in the Gadsden Hotel's restaurant. Brekhus advised that the $15 per day credit was available to all government employees, senior citizens, tour groups, and movie groups. Brekhus noted that the $15 was a credit, not cash, which was applied toward the lodger's restaurant bill, not toward the purchase of other items in the hotel or towards reducing the daily room rate. A BPA who did not eat meals in the hotel received no benefit from the credit. Brekhus gave the BPAs a receipt reflecting that they paid $55 per day for lodging.
Based on an OIG subpoena, Brekhus released documents concerning BPAs who rented at the hotel and the amount of money they individually had credited to their restaurant bills. (Water damage in the basement of the hotel where the records were stored prevented Brekhus from providing information regarding 53 of the 455 instances.) A review of the 402 records that were available detailed that the individuals spent a total of $587,864.94 in lodging costs and that the hotel provided $121,586.99 in restaurant credits.
Our interviews of a sample of 22 agents who stayed at this hotel revealed that they all paid the full per diem lodging rate, whether or not they took advantage of the credit and ate their meals in the hotel, and that they did not deduct from the reimbursement claims any credit for meals.
The OIG OGC's legal opinion concluded that these meal credits could be characterized in two ways. First, they could be considered the equivalent of a complimentary meal. As discussed above in connection with the Windemere Hotel, the government regulations permit employees to accept complimentary meals without requiring a reduction to their M&IE allowance. Alternatively, the meal credits could be considered promotional material. Under the regulations applicable at the time,5 employees were permitted to retain promotional materials if the government could not use them, no future benefit was forfeited by their acceptance, and they could not be redeemed for cash value. Because the meal credits satisfied these criteria, the OGC concluded the agents were entitled to retain the credits and no reduction to their M&IE was required.
A review of the travel vouchers identified that 48 detailed individuals had 206 instances of lodging at this apartment complex, located in Sierra Vista, Arizona. An OIG interview of [DELETED] of the Mountain Vista Apartments, revealed that she normally charged $1,050 per month ($35 per day) for a one-bedroom furnished apartment. [DELETED] advised that she determined from her inquiries at the Windemere Hotel that the facility offered guests a complimentary breakfast and nightly happy hour. [DELETED] said that to remain competitive with that hotel, she offered Fry's Supermarket food coupons as an incentive program to BPAs, to other government employees, and to military personnel.
[DELETED] charged the BPA's credit card the maximum allowable lodging rate of $55 per day. In turn, [DELETED] gave the BPAs up to $10 per day ($300 for a 30-day stay) in Fry's Supermarket food coupons. The coupons were in $5, $10, $20 and $50 denominations. [DELETED] paid the supermarket the face value for those coupons. The BPAs could use those coupons, like cash, to purchase items at the supermarket. Regardless of the face value of the coupons, the BPAs could obtain from the supermarket a maximum of $4.99 in change. At the end of their stay, [DELETED] gave the BPAs a receipt reflecting that they had paid the full $55 per day for lodging.
If [DELETED] had an adequate supply of apartments that she could have rented to agents at $35 per day, by charging the agents $55 per day and giving some of them up to $10 per day in food coupons she realized a $10 per day profit over the rate that she would have normally charged renters. Based on an OIG subpoena, [DELETED] released documents and rental contract information to us. After reviewing those materials and comparing them with travel vouchers that were submitted by BPAs, we determined that 48 agents rented during the period under review. The records conclusively identified that 33 agents received a total of $20,940 in food coupons. The average that the agents received was approximately $400. The maximum received by any agent was $2,700 and the minimum was $80. [DELETED] had no information to indicate that the remaining 15 agents received any food coupons. All agents claimed the maximum lodging and M&IE entitlements on their travel vouchers and they were reimbursed based on their claims.
Our interviews of a sample of 6 agents who rented at this apartment determined that they paid the full per diem lodging rate and that they received a receipt reflecting their payments. They also used the coupons to purchase food and other items at the supermarket. None of the agents stated that they turned in any of the coupons to the supermarket merely to get cash back.
The OIG OGC's legal opinion determined that unlike the meal credit offered at the Gadsden Hotel, the supermarket coupons should not be equated to a complimentary meal because their use was not limited to the purchase of food items. Rather, the coupons had to be considered promotional materials. Moreover, because the coupons were not tied to any particular stay at the apartment complex or to any particular guest and therefore theoretically could have been used by the INS to reduce the cost of sending travelers to the area (since the agents could receive some cash by using them), the OGC concluded they were not promotional materials that could be retained under the regulations. Instead, the agents should have turned them over to the INS.
The OGC opinion noted, however, that the regulations governing promotional materials assume that the employing agency has established a procedure by which it will receive promotional materials from its employees. 41 CFR, 301-53.1(b). We determined that the INS neither provided the agents with any guidance about the use of the coupons nor made known to them any such procedures. Accordingly, we fault the INS management for failing to take control of the situation rather than the individual agents who used the coupons.
We also provided these facts to the U.S. Attorney's Office in Tucson for a prosecutive decision. Citing no evidence of criminal intent on the part of either [DELETED], the apartment complex owners, or the agents and a lack of training for the agents in preparing travel vouchers, the U.S. Attorney's Office declined criminal prosecutive interest in this matter.
A review of travel vouchers identified that 37 detailed agents rented apartments or homes through this commercial real estate firm, located in Douglas, Arizona. An OIG interview of [DELETED] of the Southern Arizona Real Estate Company, revealed that he initially gave presentations to detailed BPAs at the area orientation briefings.6 He passed out advertising flyers and his business cards.
[DELETED] stated that to compete with the $15 per day credit for meals offered by the Gadsden Hotel he gave the BPAs a $15 per day reduction toward their lodging. [DELETED] explained that the BPAs effectively paid him only $40 per day, but that he gave them receipts reflecting that they had paid him the full $55 per day for their lodging.
During our investigation, [DELETED] became concerned about that business practice and in mid-summer 2001 he discontinued giving a $15 per day rate reduction for lodging. At that point, similar to the incentive offered at the Mountain Vista Apartments, [DELETED] began providing up to a $10 per day reimbursement to BPAs through his purchase of Safeway Supermarket food coupons. [DELETED] stated that under his Safeway food coupon incentive program, the BPAs paid him the full $55 per day for lodging. In turn, [DELETED] gave the BPAs a receipt reflecting that full payment.
Through an OIG subpoena, [DELETED] provided documents describing the BPAs who rented through his firm and the actual amount of money that they paid for lodging.7 We identified that 37 agents paid [DELETED] a total of $74,235, but that they collectively claimed a total of $87,275 on their travel vouchers. Of those, 18 agents took advantage of the $15 per day discount credit, and collectively they were reimbursed $12,725 more than they actually paid [DELETED]. The maximum credit that one agent received was $3,075 and the least that an agent received was $150.
Additionally, during our interview, [DELETED] advised us that he gave a total of $3,585 in food coupons to eight renters. Based on the information [DELETED] provided, we determined that the most that one agent received was $1,080 and the least was $140. The remaining 11 renters received neither cash nor food coupons. All agents claimed the maximum lodging and M&IE entitlements on their travel vouchers and they were reimbursed based on their claims.
Our interviews of 33 agents8 who rented through the Southern Arizona Realty Company described that they paid that company the full $55 per diem lodging rate. Sometime after they paid the full rate, [DELETED] or his staff gave renters up to $15 per day in cash back as a comparable incentive to that being offered at the Gadsden Hotel. The agents also advised that [DELETED] discontinued giving cash back to renters and instead offered the lodgers food coupons, which were redeemable at a local supermarket. One agent returned the food coupons believing that if she kept them she would have to deduct their value from her M&IE entitlement.
The OIG OGC's legal opinion determined that the BPAs who accepted the cash rebates from [DELETED] should not have claimed the full lodging allowance of $55 per day on their travel vouchers. They were entitled to be reimbursed only for the amount they actually paid for lodging, in this case, $40 per day. The use of the food coupons was deemed promotional items comparable to those offered at the Mountain Vista Apartments discussed above.
We provided these facts to the Tucson U.S. Attorney's Office. Again citing insufficient evidence of criminal intent on the part of the agents and a lack of training for the agents in preparing travel vouchers, the U.S. Attorney's Office declined criminal prosecutive interest in this matter. With regard to [DELETED], the U.S Attorney's Office stated because he was matching incentives offered by other hotels he could argue that he was simply engaging in the practice of providing rebates to customers. The U.S. Attorney's Office declined prosecution against [DELETED].
[DELETED] is a civilian who rented his four-bedroom home in Douglas, Arizona to agents who were detailed to that area. He charged each agent $55 per day for lodging. In turn, he offered the renters $8 per day, in cash, as an incentive for their stay. [DELETED] explained that he intended the money to cover the cost of breakfast, which he, unlike the hotels, could not provide to the renters.
In response to an OIG subpoena, [DELETED] released copies of his rental contracts. After reviewing those documents and comparing them with travel vouchers submitted by BPAs, we determined that 27 individuals rented [DELETED] home during the period under review. [DELETED] advised that one agent returned the money to him. Additionally, three BPAs declined [DELETED] offer of cash but opted instead to have [DELETED] stock the refrigerator with food. [DELETED] paid a total of $4,768 in cash to 23 BPAs. The average payout was $224.
Our interviews of 24 agents9 who rented [DELETED] house determined that they paid him the full per diem lodging rate and they received receipts reflecting their payments. Sometime after paying their rent, [DELETED] placed up to $8 per day in cash, in stacks, in the house. One stack of money was intended for each renter. Two agents stated that they did not believe it was appropriate to accept the cash, and they declined [DELETED] offer. The stated that instead, [DELETED] stocked the refrigerator with food items prior to the agents' arrival. Another agent advised that he returned the cash because he did not believe that it was appropriate to take the money. The agent asked a co-worker, who was not staying at [DELETED] house, to witness that transaction. The witness confirmed that the renter returned the money.
Similar to the Southern Arizona Realty case discussed above, the OIG OGC's legal opinion was that the BPAs who accepted cash rebates from [DELETED] should not have claimed the full lodging allowance of $55 per day on their travel vouchers. Rather, they were required to claim only what they actually paid, in this case $47 per day. The food items that [DELETED] stocked in the refrigerator were deemed to be equivalent to a complimentary meal, which the agents could accept without reducing their claim for per diem reimbursement.
Also reflecting similar reasoning as described in the case above, however, attorneys in the U.S. Attorney's Office declined criminal prosecution in this matter. They cited no evidence of criminal intent on the part of the agents and a lack of training for the agents in preparing travel vouchers. They further noted that [DELETED], like [DELETED], was matching incentives offered by the hotels. They stated that he could argue therefore that he was simply engaging in the practice of providing rebates to customers.
We personally interviewed the manager of this lodging facility, which offered apartments to renters. He stated that he charged the BPAs the full per diem lodging rate and that he did not offer them any incentives. We conducted a random sample of agents who rented from this provider, and determined that they paid the full per diem lodging rate and they did not receive any incentives.
We personally interviewed the manager of this hotel. She stated that she charged the BPAs the full per diem lodging rate and that she did not offer them any incentives. We conducted a random sample of agents who rented from this provider and determined that they paid the full per diem lodging rate and did not receive any incentives.
We personally interviewed the manager of this motel. She stated that she charged the BPAs the full per diem lodging rate and that she did not offer them any incentives. We conducted a random sample of agents who rented from this provider and determined that they paid the full per diem lodging rate and they did not receive any incentives.
We personally interviewed the owner/broker of this real estate company. He said that he managed rental properties in the Douglas and Bisbee areas and that he charged the BPAs the full per diem lodging rate. He did not offer them any incentives. We conducted a random sample of agents who rented from this provider and determined that they paid the full per diem lodging rate and they did not receive any incentives.
We mailed a survey to 70 other lodging providers requesting their assistance with this investigation. Based on the providers' interaction with detailed agents, we randomly selected 10 lodging providers for personal interviews. During our interviews, we expanded on the questions posed in our survey. The following is the list of providers who we interviewed.
Isabel Combel, 1502 8th Street, Douglas, Arizona
Eli Properties, 1509 Mission Drive, Douglas, Arizona
Carlos Fernandez, 2075 11th Street, Douglas, Arizona
George Haloulos, 4719 Territorial Loop, Sierra Vista, Arizona
Esther Goff, 5077 E. Goldfinch Circle, Sierra Vista, Arizona
Linda Marquez, 3622 Camino el Jardin, Sierra Vista, Arizona
Rayna Nichols, 2335 11th Street, Douglas, Arizona
Carmen Rodriguez, 2065 13th Street, Douglas, Arizona
Rudy Sierra, 2514 E. 11th Street, Douglas, Arizona
Lori Sanchez, 100 Golflinks Road, Douglas, Arizona
The properties included apartments, homes, and trailers. We determined from our interviews that all these providers charged each agent $55 per day for lodging. Except for [DELTED], no provider offered any incentives. [DELETED], a former assistant manager of the Mountain Vista Apartments, estimated that she gave a total of $2,400 in food coupons to the six agents who rented from her.
Due to the large number of lodging providers identified in our two-year audit of agents who were temporarily detailed to Operation Safeguard, we did not interview all of them. We supplemented our interviews with a letter and survey questionnaire that was sent to 70 selected lodging providers. This sample was taken from the entire lodging list we compiled, as broken down into groups represented by the number of instances each rented to a detailed agent. The number of letters sent to the providers in each group was proportional to the amount of business they did with the agents. The questionnaire asked them to identify, among other things, their lodging rates and any special incentives that they offered their renters.
The majority responded that they charged the maximum lodging per diem rate and did not offer any incentives. Fourteen establishments offered a complimentary breakfast and nightly happy hours. Seventeen others offered food coupons or meals in their restaurants. Our review determined that these lodging providers gave $61,283 in food coupons to BPAs who rented at their locations.
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We also investigated the allegations that SBPAs, who had direct supervisory authority over detailed agents, rented out rooms in their homes or bought properties in the Douglas and Sierra Vista area to rent to those agents.
Our investigation found that with the exception of one agent who worked on one of the SBPA's shift for one month, none of the SBPAs had any direct supervisory responsibilities for any of the other BPAs who rented their properties.11 We also found no evidence that the SBPAs selected or played any role in the selection of the BPAs who were detailed to the Douglas Station or in determining the length of their temporary assignments.
The OIG OGC provided a legal opinion regarding SBPAs or their wives renting to agents, which is detailed below (See Attachment 3). Additionally, the Tucson U.S. Attorney's Office declined criminal prosecutive interest.
Our investigation identified that on separate occasions, one Douglas SBPA rented a bedroom in his primary residence to two BPAs while they were detailed to the Douglas Station. In a sworn affidavit, the SBPA admitted that he gave those BPAs receipts falsely reflecting that they had paid him the $55 per day maximum lodging rate.
In a sworn affidavit, one of these BPAs admitted to paying the SBPA about one-half the amount that was noted on his receipts. The BPA then filed those false receipts with his travel vouchers and was reimbursed the full entitlement based on his claim. The U.S. Attorney's Office declined prosecution in this matter. We referred this matter to INS OIA for consideration of appropriate disciplinary action.
In a sworn affidavit, the second BPA maintained that he paid the SBPA the full $55 per day and received a receipt from him reflecting that rate. The BPA then filed his travel voucher and was reimbursed based on that receipt. The BPA's conduct in this case and his rental at the [DELETED] residence (detailed above) were further reviewed in a separate OIG investigation. Those matters were referred to the Tucson U.S. Attorney's Office and are pending consideration of criminal prosecution of the agents for providing false statements under oath.
Finally, the OIG OGC's legal opinion determined that when a government employee rents a room in a private home, the government regulations treat this arrangement as nonconventional lodging. The regulations provide that employees who stay in nonconventional lodging may be reimbursed only for the actual costs the host incurs accommodating them. Moreover, the renting employee must be able to substantiate those costs to the agency, which then must determine if those costs are reasonable before reimbursing the employee.
Accordingly, the BPAs who rented rooms in the homes of other Border Patrol employees could have legitimately claimed lodging reimbursement only to the extent that they could show that their hosts incurred additional expense by putting them up and that this expense was reasonable. Absent such evidence, no lodging reimbursement was appropriate.
We also determined that two Douglas Station SBPAs and their wives purchased rental income properties in the Sierra Vista and Douglas areas after the start of Operation Safeguard, and rented the properties to detailed agents.
The SBPAs voluntarily released copies of their rental contracts to us. After reviewing those documents and comparing them with the travel vouchers submitted, we identified 4 agents who had 13 rental instances at one SBPA's property. We found that in 2000 the SBPA and his wife received $8,745 in rental income and in 2001 they received $28,545 in rental income.
We identified 6 agents who had 10 rental instances at the other SBPA's property. We found that in 2001 the SBPA and his wife received $15,000 in rental income. Both SBPAs voluntarily released copies of their income tax returns to the OIG. We found that they had claimed the income that they received from the rental properties on their income tax returns.
Our interviews of the agents who rented from the SBPAs revealed that the renters conducted all their business transactions with the SBPAs' wives. The renters claimed they paid the full per diem lodging rate and they received receipts reflecting their payments. They stated that they did not receive any lodging incentives.
The OIG OGC's legal opinion concluded that this arrangement was permissible because the wives rented income properties rather than rooms in a primary residence. Accordingly, the wives could charge a market rate and the government would reimburse the renters up to the maximum allowed lodging per diem rate.
We identified 7 other SBPAs who, in some case with their wives, rented properties to detailed agents. We determined that three of those INS employees had engaged in suspected fraudulent activities when they rented out properties in the Douglas and Sierra Vista areas. The activities included renting an apartment and then sub-leasing it to detailed agents at a reduced lodging rate but providing the renters with receipts falsely reflecting that they paid the full lodging rate.
Additionally, we discovered that while on detail to Douglas, one BPA purchased a home in Sierra Vista but provided suspect receipts to support his travel voucher claim that he was renting that property from a real estate management firm. Based on those agents' potential violations of federal criminal statutes, we have initiated separate investigations regarding their conduct. Those investigations are currently being coordinated with the Tucson U.S. Attorney's Office.
Our investigation focused on cash kickbacks and amenities offered by lodging providers in the Douglas and Sierra Vista areas. However, OIG auditors that reviewed the travel vouchers identified errors on numerous vouchers, resulting in $17,362.15 in overpayments and $931.48 in underpayments by the INS. These errors included agents claiming lodging costs twice for the same day, claiming to have paid a higher lodging rate than that reflected on the receipt, and claiming a higher M&IE rate than the maximum for the lodging area. These errors were not detected by the INS reviewing supervisors or by the INS Finance Center in Dallas, Texas.
We referred these errors to INS OIA for review and determination if systemic weaknesses existed at the INS Finance Center, Dallas, Texas. The OIG recommended to the INS OIA that it review the travel voucher approval process and the Dallas Finance Center, Travel Section. INS OIA referred the matter on August 7, 2002 to Judy Harrison, the INS Assistant Commissioner for Financial Management.
On December 12, 2002 INS OIA provided Assistant Commissioner Harrison's response to the OIG recommendation. She advised that the Dallas Finance Center had identified the errors in April 2001 and corrective measures were taken by informing travel payment staff that applicable per diem rates are based on the ordered point of travel and the lodging location at that time. Additionally, she said that the office that prepared the travel authorizations was contacted, and the requirements of the Federal Travel Regulation (FTR) were discussed with that office in detail. Her response documented further measures that the INS was taking to address the deficiencies, to include additional training for INS staff conducted by the General Services Administration on the FTR requirements, and the implementation on October 1, 2002 of the INS's new Federal Financial Management System. Her response also asserted that the errors identified by the OIG represented an immaterial amount of money and the time required to further analyze those computations would not be cost effective to seek reimbursement for overpayments (See Exhibit 4).
In addition, in conjunction with our audit of travel vouchers mentioned above, we identified 21 questionable instances of BPAs sharing the same lodging location (such as a husband and wife renting the same place at the same time), potential double billing, filing unsupported claims, and receiving overpayments for lodging. We investigated those matters and determined that 16 instances were unsubstantiated. The remaining five potential irregularities were evaluated and referred to INS OIA for administrative inquiries. We have asked INS OIA report their findings and any follow-up actions to the OIG. Two of these complaints has been reported to the OIG as unsubstantiated, and the other three are still pending.
As noted above, the two complainants in this case also made allegations about their treatment after they brought forward their complaints to the INS. They alleged that the INS OIA agent who initially was assigned to investigate their allegations and the Douglas Assistant Patrol Agent in Charge (APAIC) compromised their identities and status as the complainants during this investigation by informing the subjects of the investigation that the complainants had made allegations against them. The complainants also claimed that the INS OIA agent threatened them and refused to investigate the matters that they presented to him.12
Our investigation revealed that during the INS OIA investigation, Notices to Appear (NTA) were distributed to the two complainants and to other individuals who the INS OIA agent intended to interview. Once those individuals received their NTAs, they were able to tell others about their status and the INS OIA investigation. However, we did not find that the INS OIA agent or the Douglas APAIC disclosed the complainants' identities to the subjects of the investigations.
We also reviewed the complainants' claims that the INS OIA agent threatened them during their interviews. The INS OIA agent interviewed the two complainants and the other agents on their scheduled dates and times, and tape-recorded all of those interviews. We conducted a comparative analysis of the transcriptions with the audiotapes of those interviews. We determined that the recorder was not turned off during those interviews and that no threatening or harassing comments were detected from the tape or contained in the transcriptions. We did not find sufficient evidence to substantiate the claim that the INS OIA agent threatened the complainants.
The two complainants further alleged that the Douglas APAIC and other Douglas SBPAs harassed them by denying one of them a training assignment and the other a promotion opportunity and a training request.
With regard to the complaint about the training assignment, the complaining agent elected not to take the required downgrade from a GS-12 supervisory position to a GS-11 to become eligible for the training position at the Border Patrol Academy. Accordingly, he was not selected for an assignment to the training academy.
We also found that the other complainant, who was a Senior Patrol Agent (SPA), was not selected for a temporary promotion position to a SBPA because he was not assigned to the unit that had the promotion vacancy. Only agents who were assigned to units that had vacancies were eligible to fill those positions. With regard to his training request, he did not follow established procedures for requesting training. In addition, when he did submit the requested information, he provided a false date of rank, thereby increasing his apparent seniority. Since seniority is a determining factor in selecting individuals for training, the complainant's misleading information caused him to be ineligible for consideration.
In sum, our investigation did not substantiate the allegations that the complainants were denied promotions or training because of their complaints.
On December 7, 2001, John P. Chase, the INS OIA Director, submitted a Procedural Reform Recommendation entitled "Lodging During Detail Assignments," to George H. Bohlinger III, Executive Associate Commissioner for Management and Michael A. Pearson, Executive Associate Commissioner for Field Operations, 2001 (See Exhibit 5). Chase's memorandum pointed out various lodging issues and concerns that the OIG identified as occurring during Operation Safeguard. Chase also discussed the contents of this memorandum with the Chief and the Deputy Chief of the Border Patrol, as well as the Border Patrol Sector management in Tucson.
Subsequent to Chase's actions, Judy Harrison, the INS Assistant Commissioner for Financial Management, transmitted a memorandum in April 2002 to all INS employees concerning their lodging during temporary assignments (See Exhibit 6). The memorandum referred to the Federal Travel Regulations and discussed the regulations concerning the types of accommodations, staying with friends or relatives, obtaining proper and correct receipts for lodging amounts, and receiving vouchers or credits from commercial lodging facilities.
Additionally, beginning in April 2002, the Tucson Border Patrol Sector began briefing all incoming detailed agents about rental and housing issues (See Exhibit 7). Tucson Sector officials began advising the agents about the regulations regarding submitting proper receipts for lodging. The Sector also instituted a practice of attaching Assistant Commissioner Harrison's April 2002 memorandum to all travel authorization forms for all employees who are being detailed.
In April 2002, William Veal, the Chief of the San Diego Border Patrol Sector, issued a memorandum to all Sector employees that addresses various questions relating to lodging at commercial and private lodging establishments. It provides overall guidance and details ethical and professional standards associated with filing travel vouchers (See Exhibit 8.)
In September 2002, then INS Commissioner James W. Ziglar issued a memorandum to all employees, entitled "Claiming Expenses for Official Travel." The memorandum advised employees of misconduct issues regarding the submission of travel vouchers and provided additional guidance for any travel related questions (See Exhibit 9.)
In this review, the OIG probed allegations related to fraud and other irregularities in connection with reimbursement for lodging on travel vouchers submitted by INS employees who were temporarily detailed to the Tucson Sector in support of Operation Safeguard. We reviewed more than 3000 vouchers and conducted many interviews of INS employees and lodging providers. During our review, we identified many instances of false and improper claims by INS agents as well as systemic weaknesses in the voucher approval process, including the process employed by the travel office of the Dallas, Texas Finance Center.
Our investigation found that when Operation Safeguard was initiated, INS management failed to plan adequately for the enormous lodging requirements to support detailed employees. The INS did not provide to detailed agents adequate guidance related to temporary assignments in support of Operation Safeguard until after these allegations surfaced.
Moreover, the INS never attempted to negotiate a lodging rate at local hotels for those individuals at a lower cost to the government. We believe the INS could have saved hundreds of thousands of dollars had it negotiated reduced lodging rates for the detailed BPAs and comparably reduced the agents' per diem entitlements. For example, the Mountain Vista Apartments raised its rental rate from $35 per night to $55 per night (the maximum lodging rate) and then offered a $10 per day food coupon. The effect was to raise the cost to the INS by $20 per night, although Mountain Vista increased its profits by $10 per night. We believe these examples indicate that the INS could have negotiated reduced rates for detailed INS employees, saving significant sums for the INS in travel costs.
We also determined that many INS employees received reductions or cash back to rent at certain lodging facilities.13 In response to these rebates, some INS employees returned or refused to accept the cash kickbacks, but they were in the minority. During our interviews, however, many INS agents and lodging providers attempted to justify this practice as being equivalent to offering or accepting free meals or food coupons. We believe that such a justification is not remotely persuasive.
Because the U. S. Attorney's office has declined criminal prosecution on most cases, we are referring those matters to the INS for appropriate administrative action. We believe that the INS should examine each of these cases and make a decision as to whether the employee should be held accountable for their actions. At a minimum, we believe that employees who accepted cash kickbacks from lodging providers and claimed the full allowable amount for lodging and M&IE should be required to reimburse the government this amount. Employees who falsified their vouchers in support of their claims should be appropriately disciplined.
We are still investigating a few criminal cases, which will remain open until judicial proceedings are complete. The activities include agents renting an apartment and then sub-leasing it to detailed agents at a reduced lodging rate but providing the renters with receipts falsely reflecting that they paid the full lodging rate. Additionally, one BPA purchased a home in Sierra Vista but provided suspect receipts to support his travel voucher claim that he was renting that property from a real estate management firm. Based on those individuals' potential violations of federal criminal statutes, we have initiated separate investigations regarding their conduct.
We also believe that this review provides lessons for future INS operations that involve extensive details of agents. In our review, we found that lodging for detailed agents was available below the per diem rate, as evidenced by the amenities offered to many agents, including cash rebates. When the INS embarks on similar large-scale operations such as Operation Safeguard, we believe it should consider the availability of lodging accommodations in the area and seek to negotiate a reduced rate for lodging.14 The INS should also consider entering into direct arrangements with lodging providers to house detailed agents.
The OIG has recently completed a related investigation of the Border Patrol in Charleston, South Carolina, involving similar allegations as to BPAs who were temporarily detailed to the Border Patrol Training Academy. The OIG's report recommended that INS management consider the implementation of a policy similar to that used by the Federal Law Enforcement Training Center (FLETC) in Brunswick, Georgia, which requires that trainees stay at lodging facilities under contract with FLETC, unless those accommodations are unavailable. The OIG believes that INS management should apply this same policy to long-term details requiring large personnel support such as Operation Safeguard.
The OIG has been advised that INS OIA has recently initiated discussions with INS management and the Border Patrol to consider the creation of a position for housing management that would oversee housing at the training academies and locations with long term detail assignments
We also recommend that the INS provide more guidance to its employees who are detailed regarding the Federal Travel Regulations and temporary details. Most of the agents who we interviewed informed us that they received little or no training in properly preparing travel vouchers other than what they had received during their initial training at the Border Patrol Academy. All advised that they received no training specifically regarding extended-stay travel as it related to their detail to Operation Safeguard. The INS should also train supervisors and other officials who review and approve travel authorizations and vouchers, support staff who prepare travel authorizations, and the Dallas Finance Center auditors in the respective oversight responsibilities regarding travel vouchers. In addition, the INS should conduct training of all employees in their use of its automated Travel Management Program.
The guidance should discuss in clear and unequivocal terms how to treat promotional items, including complimentary meals, credits for meals, and cash reimbursements. The memoranda distributed by INS after the onset of this investigation are useful, but they should be supplemented by comprehensive guidance that is made available to all INS employees when they are detailed. Moreover, we recommend that INS develop a process for handling promotional items from employees that the employees obtain through the course of their official duties.
We also believe that the INS should strengthen its practices for filing and reviewing travel vouchers. We found that the review process at each level was lacking. The Dallas Finance Center needs to ensure its financial examination procedures correct the various problems in this area, including paying claims for double lodging costs for the same day, paying claims for lodging costs even when the claimed amount exceeds the authorized rate for a particular area, and paying claims for a higher rate than what was itemized on submitted receipts.
In sum, this investigation found troubling practices on the part of the INS and many of its agents regarding lodging reimbursement. We believe that the INS should take strong and immediate action to prevent these types of practices from recurring.
List of Exhibits