TVA Board Member Skila Harris Speaks Frankly About New Board
Skila Harris addressed OIG employees on the eve of the expanded board's one-year anniversary. Harris was a guest speaker at the OIG’s Training Symposium held on March 28 and 29.
Harris, whose notable background includes working for former Vice President Al Gore, started off by saying she is really into reinvention, whether it’s reinventing government or her own role in government.
Harris expressed her confidence in the current nine-member board almost exactly one year after it was restructured from a three-member board. Harris spoke about some of the adjustments that had to take place to accommodate the reinvention of the board.
"It has taken a little while for this committee structure to shake out," Harris said. "One year ago today, eight people showed up and we were supposed to be a board. Changes like that in a nine billion dollar government corporation don’t happen instantaneously." Harris commented that the challenges have centered on forming committees, writing charters, and deciding which decisions need to be made at the CEO level and which ones need to be made at the board level.
"I was not a huge fan of board restructuring," Harris noted. "I saw that there was the potential for real mischief in having nine political appointees on a board to run a company as large and complicated as TVA . . . I’m the only Democrat on this board now and I have been nothing but pleasantly pleased with the intent, the dedication, and with the level of professionalism that these board members have brought to their work . . . These people are good and have really shown their commitment to TVA . . . The potential for problems in the future still remains and I think one of the things we have to be diligent about is making sure that future board members have TVA’s best interest at heart."
Harris said that the current board members are accustomed to independent auditors, adding that they are not accustomed to Inspectors General. "A growing understanding of the Inspector General is still an ongoing process for this new board. I think it's important for you all to express the benefit that TVA gets from the Inspector General's office," Harris added. "I told many of my colleagues on the board of the great work that you've done. How you have helped us through the Sarbanes-Oxley issue is just fabulous. . . . We would have had to spend so much more money to achieve the quick compliance with Sarbanes-Oxley. I can’t even imagine how we could have done it without the assistance of the Inspector General’s office."
 TVA's Executive Vice President Terry Boston Gives OIG Employees a Lesson in TVA History
"If you don’t study history, you don’t know what’s happening today," said Executive Vice President of TVA’s Power System Operations Terry Boston to OIG employees at the Training Symposium.
Boston started out with a history quiz for OIG attendees before he launched into a historical account of TVA’s founding followed by a timeline outlining all major electrical blackouts in the U.S. dating back to 1965.
Boston pointed out how TVA, with a 99.999 percent reliability rate, has stood the test of time with no major power outages in the same length of time. "We have not had the kind of engineering failures that the rest of the nation has had," he said. Boston attributes much of this success to effective planning, good communication, and quick response by TVA employees.
Boston, employed at TVA since 1972, was one of six people from the United States to direct the investigation into the August 14, 2003, blackout that affected an estimated 40 million people in the Northeast United States. He currently serves as the Senior Officer responsible for planning, building, operating, and maintaining TVA's Transmission and Power Resource Planning.
************************************************************************************************************************
Temptation is a Part of Life--How You Deal With it is Up to You
They say hindsight is 20/20. They’re right. Temptations seem small when you look ahead toward them, but the view of temptation once behind us can become so large it envelops the very landscape of our lives.
 At the advice of a talking snake, one bite of an apple caused the downfall of humankind in biblical teaching. Today, the evening news reeks of complicated scandals that started out as seemingly simple temptations. Why is it that humans seem so drawn to what they know is wrong?
What does this have to do with TVA you ask? Well, let’s take a look at three real life scenarios that involve temptation. Then see if you can answer that question for yourself.
- A manager with a Tennessee-based company is invited by a contractor he works with to fly to New Orleans on the contractor’s corporate jet. The manager accepts and the two fly off to the city for a night of dining and New Orleans-style entertainment.
- A second employee from the same Tennessee-based company asks a contractor he works with for financial help. The contractor initially provides a small loan. As time goes on, the loans get bigger and bigger and are never repaid.
- Finally, another employee at the same company has control over some of the company’s credit cards. One day, she makes a small personal purchase on the card. One day turns into the next and small purchases turn into bigger ones until the next thing you know she’s run up more than $85,000 worth of personal expenses on the card.
What do these scenarios have in common? They all involve TVA employees. The names and more explicit details of these true stories have been left out for privacy reasons, but all three scenarios illustrate how giving into a small temptation can turn into a big problem.
Diann Cattani knows this all too well. She is a former white-collar professional who worked for a small consulting firm where she says she was treated like family. Cattani is now a convicted felon for stealing almost $500,000 from the people who were like family to her. She openly shares her story with others in hopes it may inspire them to make better choices than she did.
Cattani’s first act of fraud was not intentional. A travel agent mistakenly charged a personal trip to her corporate credit card. When Cattani realized the mistake, she said she told herself, "I’ll pay it back next paycheck," but she never did. Instead she started to rationalize that the trip was not completely personal because she took work-related phone calls and answered business e-mails while away. Once Cattani gave into the small temptation of justifying her “business” expense, she crossed a line to which she would not quickly return. She soon found other ways to defraud the company including “losing” paychecks and creating phantom invoices.
After the fraud was discovered, Cattani’s husband eventually left her; her parents had to care for her three small children while she served 14 months in federal prison.
“I am ashamed of what I did and the impact continues to be felt by many – the owners, associates, friends, family and most innocently, my three small children,” Cattani noted. “I can never repay the victims for what I’ve done to them – I’ve paid them back a great deal of money and will continue to pay them until my monetary debt is paid in full, but the emotional and mental damage remains.”
Cattani may not strike most people as the convicted felon type. “I am mainstream,” Cattani wrote in a letter to the editor in 2004. “I look like your neighbor, friend, associate, parishioner. I am a college graduate who grew up in a Christian home with strong values – my behavior goes against everything I was taught and knew, yet I still succumbed to the insidious nature of fraud and found a way to rationalize my dishonesty. I know that I am not alone.”
Cattani is right. She’s not alone. In fact, she now partners with other convicted white-collar felons to teach college students about the mistakes they have made. Walter Pavlo, a 44-year-old, youthful-looking man with an engineering degree from West Virginia Univeristy and an MBA from Mercer University, may surprise people when he says, “I’m a convicted felon,” but he is just that. Pavlo often shares his story with the same audiences as Cattani.
Pavlo was a senior manager at MCI who oversaw the $1 billion monthly billing and collection department for MCI’s carrier finance division. In March 1996, Pavlo started a fraud scheme with someone outside of MCI. Within six months, Pavlo and his partner had stolen $6 million from seven MCI customers.
Pavlo says he was under a tremendous amount of pressure to perform at MCI in minimizing the appearance of debt. He reportedly explained to his boss that the company needed to write off $180 million in debt, but his boss told him he could only write off $15 million. “Maybe if we relook at the numbers, Walt, we can make this kind of come together,” Pavlo said he was told. “Then he promoted me to senior manager and, for some reason, I believed I could do it. And, I did. I worked hard. I traveled the country.”
Pavlo added he met his numbers every month and asked an audience of college students at the University of South Dakota, “How do you think that I did it?” He paused and looked across the crowd. “I cheated. There’s no other way to do it. How do you fit a 180 million dollar problem and a 180 million dollar reality into a 15 million dollar budget? You cheat . . . And, I thought the tides would change and I wouldn’t have to do it after a while.”
But Pavlo thought wrong. Frustrated and tired, he reached out to a friend, Harold Mann, who was a former MCI customer and a 34-year-old multi-millionaire. Pavlo said he wanted to leave MCI and work for Mann. But, after hearing Pavlo’s concerns, Mann didn’t give Pavlo the answer he came for. Pavlo said his friend told him, “You know what, Walt, everybody cheats. That’s how you get ahead. Of course these customers are running up these debts with you guys and not paying them. Heck, I’d be doing the same thing. That’s how I made all my money. And of course you’re covering it up to make MCI [look good]. Who cares? . . . What you haven’t figured out, Walt, is how you make money at it. And, I got an idea if you just stay right where you’re at.”
Pavlo said Mann pitched him an idea that centered on defrauding MCI’s indebted 1-900-number customers. Pavlo said he agreed to it after Mann convinced him that instead of making everybody else rich he needed to find a way to “cash in” himself.
The scheme involved Mann approaching indebted customers and offering to pay off their debt to MCI in exchange for them paying back Mann incrementally over time. Pavlo would then doctor the books at MCI to make it look like the indebted customers had paid, meanwhile the customers would send routine payments to accounts Mann and Pavlo oversaw in the Grand Cayman Islands.
As time went on, Pavlo continually tried to rationalize his actions, but the stress eventually got the best of him. One day when he was on a business trip in Florida, his boss called to ask him about an “accounting anomaly” that had been discovered. Pavlo said he knew then it wouldn’t be long before he was caught, so he said, “I quit.” It wasn’t long after this conversation that Pavlo’s prediction came true and he became the subject of a corporate and federal investigation.
By the end of Pavlo’s self-inflicted ordeal, his American dream had unraveled into a nightmare. Pavlo ended up serving 22 months in prison, part of that time was in a prison camp in Edgefield, South Carolina, where there were about 500 other men, only 50 of whom were white-collar felons. “We kind of watched each others backs out there,” Pavlo said. “It was frightening. It was scary. It wasn’t a Club Fed.”
"Before I was a criminal or committed a criminal act, I was someone,” he said. “I was someone who was on the fast track and did a lot of things right in my life . . . but when I stepped over the line with Harold, which I obviously did, that was wrong.”
*************************************************************************************************************************
Untold Heroes Emerge from Fraud Cases
There are untold heroes of these stories. Sometimes the criminals themselves turn out to be the heroes by admitting the truth and telling their stories to save others from the same self-inflicted pain. Other times, it’s a friend, a co-worker, a family member, or just a business acquaintance who intervenes on behalf of the person who has let temptation lure them into a life of deception.
The TVA OIG employs a stellar staff of special agents who collectively have more than 200 years of experience in fraud cases. Twenty-eight of those years belong to Supervisory Special Agent Dale Hamilton who said of fraud cases, “It’s never a simple matter. It can start out simple, but it never ends there. It’s almost like a disease process, the sooner you catch it, the better the prognosis is."
 Hamilton said there are normally three psychological elements involved with fraud. These elements are referred to as the fraud triangle.
“One element is the opportunity to defraud a company,” Hamilton explained. “Fraud can only take place if the person willing to commit fraud has access to company assets and has the means to cover up what they’re doing. Another is pressure or the perception of pressure,” Hamilton added. “Thirdly, rationalization takes place. For example, someone may tell themselves they will borrow money from the company and pay it back later, but they never do.”
“Small deceptions and betrayals of the mind usually turn into bigger ones until you find yourself submerged in the complexities of lies,” Hamilton noted. “But, no matter what stage of the process someone is in, it’s better to stop as soon as you become aware of what you or someone else is doing. It’s the whistleblowers who are the unsung heroes of fraud, even if the whistleblower is blowing the whistle on himself or herself. They are doing themselves and everyone else an honorable service.”
The TVA OIG has set up a hotline system for employees, contractors, and the general public to report suspected fraud, waste, or abuse that affects TVA. The system can be reached 24 hours a day, seven days a week, and will allow users to report over a secure internet connection to www.OIGempowerline.com or by calling the toll free hotline number at 877-866-7840.
*************************************************************************************************************************
Two Investigative Agents Join TVA OIG Staff at Browns Ferry Site
Former FBI agents Paul Houston and Ryan Wilson are the latest investigators to join the OIG staff. They are stationed at the Brown’s Ferry Nuclear (BFN) site as part of the OIG outreach program to build and enhance relationships between the OIG and TVA employees, managers, and contractors in order to better detect and prevent fraud, waste, and abuse.
“Our office has devoted substantial resources over the past several years to issues raised at BFN such as contractor overcharges, falsifications, and adequacy of controls,” said Richard Moore, Inspector General. “The cooperation and helpfulness of the people at BFN made me believe we could be even more effective if we enhanced our presence at the site. Agents Houston and Ryan have the experience and training to ferret out fraud, waste, and abuse with the help of our many dedicated and honest TVA employees. Their presence at Browns Ferry will make them more accessible to anyone who suspects TVA is being victimized. They are there to answer your questions and hear and follow up on your concerns.”
|
