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ATF broke the law by paying agents millions in wrongful benefits, watchdog tells Biden

Bureau of Alcohol, Tobacco, Firearms and Explosives police officers are seen in Uvalde, Texas, May 25, 2022.

Chandan Khanna | AFP | Getty Images

The Bureau of Alcohol, Tobacco, Firearms and Explosives for years illegally overpaid up to $20 million to agents and investigators who worked in non-law enforcement positions by misclassifying them as law enforcement posts, a government investigator said Tuesday.

The U.S. Office of Special Counsel, which disclosed the mismanagement, said it had alerted President Joe Biden and Congress of “substantial waste, mismanagement and unlawful employment practices” involving high-level jobs at ATF.

The U.S. Office of Special Counsel said that during a five-year period that officials investigated, 108 ATF employees who worked in non-law enforcement jobs “were improperly provided Law Enforcement Availability Pay (LEAP) and enhanced retirement benefits.”

The $20 million or so found to have been overpaid “could be much higher given that the unlawful job classifications had been common practice at ATF far longer than the five-year time frame reviewed by investigators,” OSC said. That time frame was 2016 through 2021.

ATF’s media affairs office had no immediate comment on the OSC report when contacted by CNBC. In its official response to OSC, ATF contested claims about the designation of some of the positions being misclassified.

The investigation was sparked by two whistleblowers in ATF’s human resources department who alerted officials about that practice involving “gross waste of funds” and “gross mismanagement,” OSC’s letter to Biden said.

The letter said that the whistleblowers claimed the agency had a long-standing policy of helping the careers of special agents and industry operations investigators by systematically misclassifying high-level non-law enforcement jobs and filling “these coveted, primarily supervisory jobs with only special agents” or those types of investigators.

After OSC verified the claims, the watchdog referred the allegations to ATF, which instead of conducting an internal investigation, deferred to a then-pending audit by the Office of Personnel Management, which manages the federal civil service.

OPM later concluded that ATF’s leadership “demonstrated disregard for the rule of law and regulations” governing federal management policies and practices.

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As a result of that conclusion, OPM has for now suspended ATF’s power to classify its own employees as being in federal law enforcement positions “until matters are resolved to OPM’s satisfaction,” the letter to Biden said. ATF is also in the process of updating the descriptions of various positions to reflect their actual job duties.

Fifty of the employees who held positions that were misclassified have either been reassigned or retired, the letter said.

“I thank the whistleblowers for coming forward with these very serious allegations and am pleased that under OPM’s oversight, ATF has initiated corrective measures,” said Special Counsel Henry Kerner in a statement.

“While I find the report to be reasonable, progress toward full resolution has been slow, which may be attributable to the long-standing nature of the problems and the entrenched culture reinforcing ATF’s practices,” Kerner said.

“I am pleased that OPM continues to monitor progress in implementing required corrective actions, and I urge ATF’s internal affairs to hold the responsible parties accountable,” he said.

However, in the letter to Biden, Kerner noted that the whistleblowers who first complained about the practice believe “that the report did not adequately capture the extent of ATF’s illegal practices or the full impact of the harm.”

Kerner wrote that the whistleblowers believe there were many more misclassified positions than the ones detailed in OPM’s audit, and that ATF “significantly underreported” the waste due to the misclassifications of positions.

“Moreover, they pointed out that the agency did not account for the impact of the wrongdoing
on the agency’s non‐law enforcement employees,” Kerner wrote.

“Finally, the whistleblowers indicated that ATF has not adequately corrected the wrongdoing, asserting that employees continue to hold positions for which they are unqualified and that it is legally unsupportable to waive the debts incurred by employees who improperly received LEAP.”

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