Former TVA Manager Pleads Guilty to Federal Ethics Charge

Former Browns Ferry Nuclear Plant (BFN) Manager John L. Symonds, 57, pled guilty on Friday, August 3, 2007, to a felony charge of making a false statement on his 2002 financial disclosure report.  The charge was based on his failure to report more than $54,000 in payments he received at the direction of a TVA contractor.  Symonds affirmed to the court that he was pleading guilty because he was, in fact, guilty.

Symonds’ plea was entered in federal district court in Knoxville before the Honorable Thomas Phillips, U.S. District Court Judge.  Sentencing has been set for November 29, 2007.  The maximum statutory penalty is a term of imprisonment of five years and a fine of $250,000.

The plea agreement states that Symonds certified on the report that neither he nor his spouse had a source of earned income other than TVA which generated more than $200 during the reporting period.  He completed and submitted this form to TVA headquarters in Knoxville, Tennessee.  Contrary to this certification, however, Symonds received more than $54,000 at the direction of a TVA contractor during that reporting period.

More specifically, the plea agreement provides the following.  Symonds owned Krohn Enterprises, LLC, which received checks for $29,212 and $25,000 during February 2002 from U.S. Tool and Die.  The proceeds of those checks were used to pay the personal expenses of Symonds and his spouse.  At the time he received those checks, Symonds knew that U.S. Tool and Die had been directed to send those checks to Krohn Enterprises by Holtec International, a company that contracted with TVA in November 2001 to design and construct a dry cask storage system for spent nuclear fuel rods at BFN.  Symonds was further aware that Holtec had contracted with U.S. Tool and Die to fabricate some of the construction materials for the BFN dry cask storage system.

This case was investigated by Senior Special Agent Jim Farr.  If you have any additional information on this matter, Farr can be reached at (865) 632-3828 or jffarr@tva.gov.

Former Comptroller Indicted for Wire Fraud

A former comptroller, Phyllis A. Giger, 63, of Knoxville, Tennessee, was indicted Wednesday, June 20 on a wire fraud charge.  The indictment came as a result of an investigation by the TVA OIG.

The indictment specifically alleges that Giger, in providing comptroller services for National Emergency Assistance, Inc. (NEA), and Retiree Resources Corporation (RRC), two organizations that provide contracted services for TVA, fraudulently caused the electronic transfer of funds from NEA’s and RRC’s AmSouth accounts to her personal bank accounts located at Home Federal Bank and First Tennessee Bank.

The indictment further alleges that Giger fraudulently concealed her wire transactions by falsely identifying the electronic fund transfers as payments to other individuals.

The trial is set for Tuesday, November 6, 2007, in U.S. District Court, Knoxville, Tennessee, before the Honorable Thomas Phillips.  If convicted, Giger faces a maximum term of imprisonment of 20 years and a $250,000 fine.

Members of the public are reminded that indictments contain only charges.  A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

OIG Looking Into TVA Credit Card Spending

Transparency in spending is imperative to a government organization's success.  The results of blatant government misspending can destroy the trust of its stakeholders.  It can take a long time to restore trust once the damage is done.

This is where the benefit of an Inspector General to government organizations can really be seen.  The TVA Inspector General is appointed by the President.  An OIG's mission is to prevent and detect waste, fraud, and abuse; and its function makes it vital to the overall health and reputation of a large government organization.

Credit card use is one area where the OIG helps TVA prevent misspending.  We conduct reviews to determine if credit cards are used in compliance with TVA policies and procedures.  Inspections reviews policies and procedures related to credit card spending and selects a sample of credit card transactions to evaluate.  We review (1) the adequacy of supporting documentation, (2) if purchases were allowed under TVA policies, and (3) that proper transaction approvals were obtained.  We look for circumvention of policies and procedures such as splitting of costs to avoid exceeding spending limits.  Additionally, we have a data mining program in place to continuously monitor credit card transactions to look for anomalies.

"The word gets out that we’re looking at credit card spending and that’s a deterrent factor for misuse,” said Greg Jaynes, Deputy Assistant Inspector General of Inspections.  “While the reviews are designed to determine if credit cards are being used in accordance with TVA policies and procedures, we also recommend changes to TVA's policies and procedures, where needed, to strengthen controls.”

A TVA OIG Riddle With You in the Middle

What do TVA CEO Tom Kilgore, the No Fear Act, Sarbanes-Oxley, and TVA Inspector General Richard Moore all have in common?  They are all concerned with protecting TVA employees against retaliation when an employee reports potential waste, fraud, or abuse.

Most of us do not want to think about a co-worker, friend, acquaintance, or manager being capable of wrongdoing such as fraud, but there are far too many examples of people with no criminal backgrounds crossing the line of temptation that eventually leads to a life of deception.

"The duplicity of someone committing fraud is what confounds a lot of us,” said Assistant Inspector General for Investigations Charles Kandt.  “These people really live double lives making it difficult for an outsider to recognize that someone they know with an impeccable reputation is actually stealing massive amounts of funds behind the scenes.  It’s almost unthinkable.”

"Though it may be unthinkable,” Kandt continued, “once someone does realize fraud could be happening, they really do need to report their suspicions.”

"The OIG is depending on you to be our eyes and ears when you see something suspicious,” Inspector General Moore said.  “You don’t have to be judge and jury.  Just report your suspicions to us and let us sort it out.”

To make it easy for you, TVA OIG has set up an anonymous hotline called the Empowerline at
1-877-866-7840.  It is operational 24 hours a day, 7 days a week and is answered away from TVA by a neutral third party.  You can also report your concern anonymously to our Empowerline website at www.oigempowerline.com.

"I have found that some employees worry about getting in trouble with their managers if they make a report to my office,” Moore added, noting, “TVA employees have my personal guarantee that their identities will be kept confidential and any investigation, inspection, or audit that may ensue as a result of their information will be conducted with the utmost professionalism and integrity.  You don’t even have to give us your name and if your report leads to a felony charge or a substantial monetary recovery, you may receive up to $10,000.”

"I can also tell you with assurance that TVA encourages employees to report wrongdoing either to their supervisor or to my office,” Moore continued.  “Tom Kilgore, TVA’s Chief Executive Officer, has made it clear that he considers retaliation to be both illegal and bad business.”

If you’re unclear about what to report in the areas of “fraud,” “waste,” or “abuse,” check out the TVA OIG website at oig.tva.gov or go to the Empowerline at www.oigempowerline.com  for a list of examples.

OIG Focuses on TVA Ethics

Ethical lapses such as those which have recently lambasted corporations, universities, and even government agencies can lead to scandals and loss of a positive public image.  Following a review of ethics and compliance at TVA, the OIG issued a report in May that recommended TVA create a Chief Ethics and Compliance Officer position.  On July 19, TVA announced that longtime employee Peyton T. Hairston would fill this role.

Ever conscientious of the importance of operating in an ethical environment, the OIG has always been alert to drivers of ethics and integrity at TVA.  “Temptation is often the calm before a storm,” says Inspector General Moore.

Moore should know.  He spent the bulk of his legal career prosecuting white collar felons.  He understands that the majority of people in an environment that embodies ethics will never succumb to the temptation of fraud.  And, that’s why the OIG’s Financial and Operational Audits team has spent the past year ferreting out and examining the ethical component of everyday practices at TVA, along with the adequacy of ethics training provided to employees.

"This team has combed through the ethics controls, safeguards, and training TVA currently has in place,” said Lisa Hammer, Acting Director of Financial and Operational Audits.  “The team was set up to observe these initiatives and look for opportunities to tighten, strengthen, and expand upon the ethical environment that already exists at TVA.”  The team’s presentation was delivered to TVA management in May.  The presentation included a formal definition of ethics, along with a simple description of “the spirit of doing the right thing.”

The benefits of an ethics program are identified in the presentation, including the desire most people have to do the right thing in an ethical environment, the competitive edge ethical organizations maintain over time, and the fact that a free market system operates on trust and trust makes business and commercial efforts both more effective and efficient.

The summary of observations includes the conclusion that TVA’s current ethics and compliance program has many pockets of activities that, in themselves, appear to be well-managed.  The summary further notes, however, that a centralized and more broadly defined program would provide a coherent approach to address the key elements of (1) creating a more extensive program through training, communications, and principles to guide behavior; (2) reviewing and tracking ethics issues; and (3) organizing a corporate approach to ethics and compliance.

To address these key elements, the OIG recommended establishing the position of Chief Ethics and Compliance Officer at TVA.  With the advent of Sarbanes-Oxley and other ethics and compliance initiatives across the country, many large companies have established such a position.  As recommended by the OIG, this position would be responsible for, among other things, directing the ethics program and coordinating compliance programs across TVA and sharing ethics and compliance issues across business units.

The team’s other findings include that only about 20 percent of TVA employees take annual ethics training.  TVA OIG recommended that all employees receive annual ethics training, including training on basic principles to guide behavior.  In regard to personnel practices, the OIG recommended that all performance evaluation tools include commitment to basic TVA values, behavior-based interviewing techniques be incorporated in hiring practices to probe for ethical behavior traits, and all rewards and promotions be reviewed for consistency regarding ethical behavior.

The presentation noted that TVA senior managers who were interviewed said ethical issues were assigned to different “silos” and there was no central tracking of these issues.  The OIG recommended TVA create a process for centrally tracking ethical issues from identification to resolution, summarizing and trending issues, and sharing the information across business units.

TVA Inspector General Moore Appoints a Deputy Inspector General

Ben Wagner, Assistant Inspector General of Audits, has been appointed to Deputy Inspector General.  Wagner will supervise the Assistant Inspectors General in the office and will continue to serve as the Assistant Inspector General of Audits until another AIG for Audits is selected.