Former TVA Inspectors General Join With OIG to Celebrate 20 Years of Statutory Independence

When four of the five previous IGs met on stage Wednesday, March 5, at the UT Conference Center in downtown Knoxville it was “truly a historic moment,” said current TVA IG Richard W. Moore.  Moore, who hosted the event, said at no time in history had five of the six IGs been together in the same room at the same time.  The event was noticeably missing former IG Richard Chambers who was in Germany on business but sent his regards through Moore.  The celebration took place to recognize the 20th anniversary of the TVA OIG gaining statutory independence under the amendments passed in 1988 to the IG Act.

Norm Zigrossi was the first IG at TVA serving from 1985 to 1992.  Zigrossi explained how the office was formed when he became the first TVA Board appointed IG in 1985.   “People were waiting outside the door to talk to me,” he said noting that in the first two months, he received 4,000 concerns regarding TVA that people wanted the OIG to address.  Zigrossi also noted that he faced significant opposition as the first IG.  Former IG George  Prosser added, “Norm Zigrossi was the right guy to put this together.  He lived this thing 24 hours a day, 7 days a week and he was fighting a lot of people who didn’t want an IG.”  At the time, opinions about establishing an OIG were mixed with some saying they thought it was an unnecessary expense and others stating an IG was the only fair and impartial way to ensure TVA was operating in an ethical and efficient manner.  “We needed people to know that we were for real,” Zigrossi said.  “We knew what we were doing and we were there to help TVA become a better place.  We had to have credibility and high standards.  We had to be fair and to provide a service in a timely manner.  Old facts, old news will never get you there.”

William Hinshaw, the second IG who served from 1992 to 1994, complimented Zigrossi in saying, “I inherited something that Norm’s personal success created.  It was this success that created a sense of expectation.”  Hinshaw’s period wasn’t without controversy though.  Hinshaw explained that there were several board chairmen in six months and one of them fired him, he quipped.  One of Hinshaw’s biggest accomplishments he believed was investigating Blue Cross Blue Shield, TVA’s medical plan administrator at the time, which led to an $8.73 million recovery.  

Hinshaw’s tenure was followed by George Prosser, who served as the IG from 1994 to 2000.  Prosser noted of his time as the IG, “I came along at a time when the reinvented government was getting some legs.  Like many of the group here,” he added motioning to his colleagues, “it’s tough to be an IG and be part of the organization.”  When asked what he was most proud of, Prosser replied, “I never promoted from anywhere but within because we had good people who could do the job and that’s the thing I’m most proud of.” 

Prosser introduced Don Hickman, who was acting IG following Chambers’ tenure.  “Don was the perfect guy for the job,” he said.  “Don could’ve been an IG at several different places.  He just didn’t want to leave.”  Hickman confirmed he did receive several job inquiries regarding IG positions in Washington D.C., but he didn’t want them.  He credited his staff at the time for receiving those invitations saying that they made him “look good.”  Hickman encouraged the TVA OIG current staff by saying to them, “You all work in a world of dichotomies.  They tell you to be firm but flexible.  This can be an easy job if you develop the right kind of relationship with the agency.  You have to develop an atmosphere of mutual respect.”  Hickman added that, “Too often you’re known by your reputation and it’s not always accurate.”  He also pointed out that the TVA OIG should be working with TVA to prevent waste, fraud, and abuse.  “If you wear your prevention hat, your caseload will be down instead of up and that’s a good thing.” 

Zigrossi’s parting advice was to, “Let the facts speak to the results and you’ll never go awry.”

Hinshaw followed with, “This is a good place to be.  I mean if you’re going to be an IG, this is the best place in the country to do that.”

TVA OIG Releases Revealing Video

Do you know what fraud looks like?  

IG Richard Moore sheds light on the answer in a revealing seven-minute video that features student actors depicting actual fraud cases involving TVA employees and contractors.  The video is on the OIG’s web site at oig.tva.gov.  

“This video is designed to show TVA employees examples of what fraud might look like and to educate them on what to do if they suspect fraud,” Moore explained.  “It’s important to note that the vast majority of TVA employees and contractors do the right thing, but there are those few who may succumb to the temptation of fraud.  We’re counting on each TVA employee to alert us to any suspicions they may have.”

The video also gives information on the OIG hotline, called Empowerline, and explains that the hotline is answered away from TVA by a neutral third party and provides those reporting a concern the choice of anonymity.  The Empowerline is accessible by calling 1-877-866-7840 or by going to the web site at OIGempowerline.com.  To access the video, click here.

*************************************************************************************************************************

Focus on Inspections

It’s lunchtime, and nestled in the heart of downtown Chattanooga a group of fresh-faced, 20-somethings, many of whom are in their first jobs out of college, are sitting around a table, eating sandwiches and telling their stories.  You might not think they have much to tell at 20-something. Oh, but they do.

As a visitor, you’re struck by the energy in the room.  An atmosphere like this immediately grabs you.  It doesn’t feel like a typical government agency.  It doesn’t look like a typical government agency, and it occurs to you it’s not a typical government agency.  This is the Inspections group of the OIG at TVA.  Here you’ll find a unique blend of experience, education, vision, determination, and an unwavering commitment to learning and growth.

Headed by their seasoned counterparts, Greg Jaynes, Deputy Assistant Inspector General for Inspections, and Project Managers Mike Driver and Rick Underwood, you can’t help but get drawn into the electricity this young crew generates when surrounded by each other sharing their laser-beam insightfulness into the work they do and their relationships with each other.  It feels a lot like you’re among a family, complete with parental figures and obvious sibling rivalry in the form of playful ribbing. 

When asked about hobbies and other interests outside of work, the group outs Mike Patty as their fitness guru.  One of the female auditors teases him by saying he teaches jazzercise.  Patty explains he’s a fitness trainer and, for the record, does not teach jazzercise as he shoots a look back to his snickering co-worker.  The same female auditor said earlier of Patty, “Mike likes to jump off of mountains with kites.”  Patty clarified that he had started hang-gliding.  Patty also used to live in Germany and speaks fluent German.  “We’re just not sure if he’s actually speaking German while he’s hang gliding, but we’re pretty sure he does,” quips another coworker.  

Auditor Julie Lovingood, who is pregnant with her first child, is coined the resident pastry chef of the group.  Lovingood smiles when her teammates talk about her cooking.  “We’re lucky to have her here,” Driver says.  “She bakes each of us a cake for our birthdays.”  “I love to cook,” adds Lovingood.  

With only 14 people in the entire department, it’s hard not to know something about each one.  When a few of the auditors struggle to find something to say about themselves, at least one of their teammates inevitably comes to the rescue with, “What about your book collection?” or “What about the house you just bought?”

Auditor Deana Scoggins had an entire room added to her house just to accommodate her collection of more than 1,000 mostly fiction books.  Janelle Brodrick drives 75 miles to work each day.  And, Kristen Leach volunteers for the Junior League.  

Besides the obvious camaraderie the younger employees share, their slightly seasoned counterparts have pretty interesting talents and passions that obviously endear them to the younger employees.  Driver has a black belt in karate and quickly solves complex math equations.  “He can do crazy math in his head,” Auditor Stephanie O’Daniel says, “Go ahead, ask him anything.”  Underwood was a drummer for multiple hard rock bands, and Jaynes who wants people to believe he is a low-handicap golfer says his greatest source of pride comes from a brunette and two young blondes--his wife and golden retrievers.  

Jaynes and the Inspections team wouldn’t be complete without Administrative Assistant Brenda Adams.  “She plays a key role in assisting the auditors and helping get the reports out,” Jaynes says.  “She’s essential to our team.”  It becomes obvious that Adams is no stranger to excitement either as she describes her latest excursion for charity to New York City for the “Polar Plunge.”  “It’s a motorcycle riding event that ends with a plunge into the Hudson River,”  Adams explains noting she elected not to take the plunge, but enjoyed the motorcycle ride.  “It was cold, but heartwarming,” she says.

As a group, Inspections regularly coordinates charity events such as donating to local single-parent families for Christmas.  “This whole room was filled with presents,” Auditor Daniel Wright notes.  Apparently, that giving spirit extends to the work the auditors do.  “You can ask anybody to do anything for you and you know they will and they’ll do it well,” adds Jennifer Hamby.  Jaynes, Driver, and Underwood echo this sentiment when describing their younger counterparts.  “They make our jobs tougher,” Driver says explaining that because they are so intelligent, he, Underwood and Jaynes are consistently challenged to find answers to their insightful and probing questions.

With backgrounds in accounting, finance, and business, all of the auditors are pursuing either a higher collegiate degree or a certification in accounting or auditing.  “We encourage education,” Jaynes adds.  Auditor Heather Kulisek notes, “You’re given the opportunity to take on as much as you want to take on.” 

The auditors are challenged every day to look layer by layer into all operational facets of TVA, from the most mundane such as the use of resources to the most esoteric such as the purchase and sale of power from adjoining utilities.  “The work is different every day,” Lovingood says with O’Daniel adding, “Since I’ve been here I haven’t done the same thing twice.”  They all agree they like the focus on learning the office promotes and the variety of their assignments that are not typical of auditor positions.  “They’re always learning,” Driver says.  “There aren’t too many places young people can get a job where they’re sitting across from a senior executive at 22, 23-years-old.”  

But, there’s a slight down side to this perfect family—how they believe they are perceived.  When asked what they want TVA employees to know about them, one quickly answers, “that we’re not investigators and that we’re not looking for something bad all the time.”  Jaynes interjects by explaining that an inspection is very different from an investigation in that inspections are generally narrowly focused audits, called single-scope audits or evaluations.  An investigation is usually prompted by information or an allegation indicating potential criminal activity or misconduct; whereas an inspection is more an operational audit, Jaynes notes.  “We actually look at the operations of TVA.”  “Although,” Underwood adds, “the staff does conduct a number of full-fledged audits when requested that go beyond a single-scope.”  Jaynes concludes, “We’ve got such good people down here that we can turn around whatever kind of review is needed.”  

The standards Inspections follows in conducting their reviews are found in the Quality Standards for Inspections, issued by the President’s Council on Integrity and Efficiency.  They emphasize objectivity as an essential component throughout any review.  “We want to portray the truth,” Driver explains with Jaynes adding, “We strive to be fair.  Integrity and accountability are essential elements of what we do every day.  TVA management needs to know they can call us when they want something looked into and it will be handled with the highest level of professionalism and objectivity.”  

Jaynes said the biggest challenge with the group being so young has been a collective lack of experience.  “Experience was our biggest obstacle,” Jaynes says.  “As experience increases, expectations are increasing.  This group has raised the bar to help TVA and, now, we can’t afford not to multi-task and have more than one project on board.  Our team is making an impact and making a difference at TVA.”

The latest addition to the Inspections team is auditor Greg Stinson who is stationed at Watts Bar Nuclear Plant.  Stinson is following the day-to-day operations of the plant, attending staff meetings, and providing input to the OIG on potential risks and project areas.  Stinson and the OIG are building on lessons learned through the Browns Ferry construction which was completed last year.  

“There’s more work now than we can get out,” Jaynes concluded.  “It’s getting better and better all the time.”

TVA OIG Has Given Out a Cash Reward for the First Time in its 22-Year History

When November drew to a close last year, the TVA OIG had already made history when one of its joint investigations with the FBI led to a recovery that exceeded $25 million.  The civil settlement was with three Kinder Morgan limited partnerships, collectively called “Kinder Morgan” that operated two coal terminals used by TVA and other private companies.

Now, another related historical event ensues.  For the first time in TVA OIG’s existence, the office is paying out a $5,000 reward to the tipster who made it all possible.  “Tips such as the one in this case,” IG Richard Moore noted, “lead to most major investigations, and we encourage anyone who suspects fraud to contact our hotline, the Empowerline, at 1-877-866-7840 or www.OIGempowerline.com.  The hotline is operated by a neutral, third party away from TVA and is operational 24/7.  It also provides callers with the option of being anonymous.”

Moore continued, “What makes this case especially interesting is that the concern originally raised was erroneous.  The individual suspected something wasn’t right, and even though what this person initially reported checked out OK, the initial report led to discovering what the real problem was.”

The settlement stated TVA and other private companies had contracted with Kinder Morgan to handle and transport coal at two of its coal terminals--the Cora Terminal in Rockwood, Illinois, and the Grand Rivers Terminal (GRT) in Grand Rivers, Kentucky.  The coal arrived at these two terminals after it was weighed by certified scales and then shipped by rail.  After the coal arrived at Cora and/or GRT, it was then offloaded, stored, and eventually loaded onto barges for delivery to TVA plants in Kentucky, Tennessee, and Alabama.

The way the scheme worked was the same coal--originally weighed by certified scales--that arrived at the Cora Terminal was then weighed by barge draft before being shipped from the terminal to the customer.   The barge draft method usually weighed two to three percent heavier than the certified scales that were originally used to weigh the coal, resulting in less coal being shipped from the terminal than was received.  Kinder Morgan reportedly took this “excess” coal from its customers and sold it under its own “Red Lightning” label from 1997 through 2001.  At GRT, where certified scales were used for both incoming and outgoing coal, it is alleged that Kinder Morgan simply took coal from the customer stockpiles and sold it under the Red Lightning label.

TVA received nearly $8 million of the settlement amount to recover its losses.  “This was a huge win for TVA employees and ratepayers,” Moore said.  “Twenty-five million dollars is the largest recovery in the history of TVA OIG, and I believe the efforts of our special agents and auditors working closely with the FBI led directly to Kinder Morgan agreeing to this settlement.”

OIG's Response to Congressional Request Sheds Light on TVA's Responsiveness

In a December 2007 letter addressed to the 63 federal Inspectors General, Congressman Henry Waxman, Democrat-California, asked them to summarize each unimplemented recommendation to their agency, estimate the cost savings and other benefits, and describe the investigation that prompted the recommendation.  “We want to see whether the IGs are doing their job and whether the agencies are doing theirs,” Waxman was quoted as saying in an article in Congress Daily on January 30.

“The report issued by TVA OIG shows TVA has been extremely responsive to our findings,” said TVA IG Richard Moore.  “We aren’t surprised by the results of the report because we know TVA management has been cooperative with us and amenable to our recommendations.  Our goal is the same--to make TVA better--so why wouldn’t we work together toward that end?”

The report indicates that of 1,734 recommendations the TVA OIG has made, only 15 are past due, which is less than one percent of the total recommendations.  Nearly 92 percent of the recommendations to TVA have been implemented since 2001, and about seven percent are currently open.  “There are recommendations that are outstanding that we are waiting for TVA to address,” Moore continued.  “A prominent example is our June 2006 ‘Review of TVA’s Role as a Rate Regulator.’  TVA has informed us that they will provide a response to our findings from this report by August of this year.  Although this is a complicated matter, two years is too long.”

Moore added of the Waxman report, “I think this report goes a long way to show TVA management is generally quick to implement process improvements and has the long-term health of the organization at heart.  Legally, federal agencies are not required to adopt Inspectors General’s recommendations, so the fact that TVA has implemented 92 percent of our recommendations lends credibility to the sincerity of TVA’s desire to continually improve.”

Case Highlights Importance of Truthful Reporting

If the possibility existed that deadly E-coli bacteria were lurking in a nearby waterway, wouldn’t you want to know that testing was being done to ensure that it wasn’t?  

That’s exactly what didn’t happen for the citizens of Rockwood when one of the city’s sewage treatment plant operators Paul William Perkins falsified reports on emissions testing to wastewater that was dumped into Roane County’s Black Creek for nine months in 2004.  Perkins claimed the water had been tested when, in fact, it had not been because the testing equipment was inoperable at the time.

TVA has designated Black Creek as part of its protected watershed area.  TVA’s watershed program, established in 1992, was designed to protect waterways in the Tennessee Valley from pollutants in order to maintain clean drinking water for people and wildlife.  TVA OIG, along with the Environmental Protection Agency’s Criminal Investigation Division and its OIG conducted the collaborative investigation that led to Perkins' sentencing on Monday, March 10.

U.S. District Judge Thomas Phillips sentenced Perkins, 28, to two years' probation and community service for making a false statement on a document required by the Clean Water Act, which prohibits the discharge of pollutants into any U.S. water without a permit from the EPA.  “I hope you understand the reason for all of this taking place,” Phillips told Perkins.  “That law was designed to protect the public.”  Perkins, who reported monthly that the water being discharged into Black Creek had been tested, knew in fact that it had not been because the testing equipment was broken at the time.

“This case highlights the importance of waste water emissions testing,” said OIG Special Agent Nikki Young who worked on the case.  “The Clean Water Act is designed to protect the public from potential hazards such as E-coli which has been linked to infection and death.”  Later testing did not reveal the presence of E coli in the plant’s water.