The Federal Practice Group recently represented two clients in cases against
WAPA, the Western Area Power Administration, which is currently under
investigation for misuse of public funds. It all began when Nate Elam,
a former assistant regional manager at WAPA, noticed that government employees
were using U.S. government purchase cards to buy items from sporting goods
stores, expenses ranging into the millions, for items such as ammunition,
assault rifles, radar detectors, and engine 1superchargers.
Keith Cloud, WAPA’s chief of security, worked with Elam to expose
the credit-card abuse, his role particularly relevant as employees began
making threats and using intimidation tactics to stifle Elam’s claims.
What was stranger, though, was that bosses in WAPA stymied the investigation,
retaliated against the people who uncovered the fraud, and failed to do
anything regarding the threats.
WAPA is an agency with the Department of Energy in charge of providing
consumers with safe, clean, and economical power. However, embezzlement
was only a small part of a larger picture. Both Cloud and Elam claim that
waste and mismanagement are allowed to continue at the agency because
WAPA has built up a $767 million reserve called the “unobligated
balance.” While this fund was supposedly there to buy power if the
hydroelectric system shorted, both men claim the agency used it as a kind
of slush fund. The agency has also been accused of overcharging for power
by companies in Arizona and California, a cost which ultimately falls
on the average consumer.
This excess has been noticed by Cloud because of the agency’s underfunded
security program. If so much money was returned to the U.S. Treasury with
a huge surplus still remaining, then why wasn’t the agency taking
care of its substations? Several power substations have been compromised
in recent years, including one near Phoenix. An inspector general report
in 2016 also found WAPA had not completed risk or security assessments.
People in and out of the agency who wanted the embezzlers held accountable
began pushing for criminal proceedings in 2013 after Energy Department
auditors corroborated at least $6.8 million in questionable purchases
over a 2-year period. However, the agency tried to hide the scandal rather
than bringing the perpetrators to justice, and employees continued to
make fraudulent transactions. Almost none of the funds have been recovered,
and only two employees are facing charges for their crimes.
The whistleblowers pushing for justice also became subject to threats and
intimidation in late 2015. Employees began sending Elam threatening messages
and tampered with his vehicle twice. He requested threat assessment and
a home security system from Ron Moulton, senior VP for the Desert Southwest
Region. An independent consultant who conducted a violence assessment
in the workplace concluded that many employees had heard threats or were
threatened and none of them reported it out of fear of retaliation and
Elam eventually purchased his own home security system and resigned in
late 2015. He filed a whistleblower retaliation and wrongful termination
claim since he was forced to leave out of fear for his safety. Cloud and
other employees at WAPA have filed whistleblower and equal-employment
complaints that are still pending. After Cloud had made a statement about
WAPA management’s tactics of isolation and vilification of whistleblowers,
he was also stripped of his job as security chief and banned from contact
with fellow employees. He now works at a WAPA training facility in Golden,
Colorado, with no assigned duties.
If you are facing a similar situation as a government employee, contact our
federal employment law attorneys at the Federal Practice Group. We are experienced in handling challenging
legal problems, particularly those concerning federal employment laws
Contact us at 888.488.1774 or fill out our
online form to get in touch with us today.