Federal Daily - February 29, 2008

Errors Plague Fed Workers’ Compensation Program

The Federal Employees’ Compensation Act (FECA) program—which pays federal employees who are hurt on the job—made $13.3 million in erroneous payments in 2006, according to a Government Accountability Office (GAO) report released Feb. 27. GAO auditors estimated that of the $1.8 billion in wage loss compensation payments made to workers in Fiscal Year 2006 under the program—which is administered by the Department of Labor’s Office of Workers’ Compensation Programs (OWCP)—the program made about $7.1 million in overpayments and $6.2 million in underpayments. GAO also said OWCP fails to prioritize the recovery of money improperly paid to federal employees. The report said one problem is that OWCP does not collect the information it needs to accurately assess the FECA program’s risk of improper payments. Specifically, OWCP relies on unverified, self-reported information from claimants that is not always timely or correct, GAO said. “Because OWCP generally does not require claimants’ self-reported earnings to be verified and does not systemically match its data on FECA claimants,” the report said, “it may fail to identify cases of unreported earnings.” To see more, go to:
www.gao.gov/highlights/d08284high.pdf.

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NTEU Critical of New TSA Whistleblower Protection

The National Treasury Employees Union (NTEU) criticized new enhanced whistleblower protections for transportation security officers (TSOs) that are part of a Feb. 27 agreement between Transportation Security Administration (TSA) and the Merit Systems Protection Board (MSPB). The agencies signed a memorandum of agreement (MOA) that will allow TSOs to appeal whistleblower retaliation complaints to MSPB. Under the current system, the Office of Special Counsel had sole authority to investigate TSO whistleblower retaliation complaints and recommend action. However, NTEU President Colleen Kelley said the MOA doesn’t go far enough. In addition, the union said many details of the agreement are not yet known, including whether TSA will be bound by MSPB decisions, whether an evidentiary hearing is guaranteed to employees and whether employees will enjoy the same procedural rights that are provided under MSPB’s governing regulations. To see more, go to: www.nteu.org/PressKits/PressRelease/PressRelease.aspx?ID=1223.

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SEC Charges Three in Scheme to Bilk Military Families

The Securities and Exchange Commission (SEC) on Feb. 27 announced charges against three real estate promoters who targeted military families in an investment scheme that forced victims into personal bankruptcy and their homes into foreclosure. James B. Duncan, Hendrix M. Montecastro and Maurice E. McLeod face SEC charges of violating the antifraud and registration provisions of federal securities laws. Filed in U.S. District Court in Riverside, Calif., the SEC complaint seeks a permanent injunction against the three to stop the scheme, as well as disgorgement of all ill-gotten gains and civil penalties. The SEC charges that from October 2004 and June 2006, the three defendants operated through Murrieta, Calif.-based Pacific Wealth Management, LLC and Stonewood Consulting, Inc., falsely promising investors that their funds would be invested in real estate and various other growth instruments. Instead the money was diverted to a Ponzi-like scheme that eventually fell apart, SEC alleged. The scheme solicited investors from military families mostly in Southern California and Arizona. To see more, go to: http://www.sec.gov/news/press/2008/2008-23.htm.

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