During the partial federal government shutdown, the Federal Mediation and Conciliation Service (“FMCS”), like many federal agencies, made news for being a victim of the Congressional deadlock. For the FMCS, an independent government agency tasked primarily with resolving labor disputes between unions and government, the shutdown meant postponing ongoing mediation sessions across the country and furloughing all but “a handful of people.”[1] But the story of an FMCS employee whose leave was not prompted by the recent shutdown, and the FMCS’s excessive spending in a period of apparent austerity, has managed to fly mostly under the radar – until recently.

Berkina Porter was the director of administrative services at the FMCS until she was placed on leave in February 2012. The action was apparently taken in response to Porter’s repeated objections to the agency’s dubious spending practices. A look at just a few of the alleged abuses of funds – corroborated by hundreds of pages of documents and an independent Inspector General – will make your head spin.

To begin with, “about two dozen of the agency’s approximately 240 employees had purchase cards, [but] none had the required authorizations or training on how to use them.”[2] One of those purchase cards, belonging to an agency customer service specialist named Marcus Lawson, was using company funds to make monthly payments on a $29,400 three-year Lincoln MKS lease. (Of the lease payments, Lawson later stated that “that was the nature of the way things were going on at the time.”)[3] This despite the fact that the median annual salary of an FMCS employee is $120,000.[4] During an annual conference, the agency was paying a group of private mediation instructors $1,500 a day – $163 an hour – to train mediators; part of that amount was hourly compensation for time spent traveling, against Federal Acquisition Regulations.[5] Contracts with inflated labor values were allegedly being given to mediators based on personal relationships.[6]

What does $9,000 worth of bottled water look like? We may never know.

The list goes on: in a two-year period, the agency bought at least 38 LCD projectors costing up to $9,500 each, as well as over $30,000 worth of picture frames.[7] About $9,000 annually was being spent on bottled water. $29.95 a month was being paid to get the Golf Channel in the agency’s own DirecTV subscription. Charges showed up at grocery stores near employees’ homes on the weekends. And despite there being no record of invoices or even a contract with a certain company called The Papers Edge, FMCS had paid that company almost $21,000 for “phone system installation and other services” in 2009,[8] and a total of $85,000 over a two-year period.[9] That company had been incorporated in Pennsylvania in February 2008 by a then-top official of the FMCS.[10]

In response to pressure from Porter, some time around late 2010 FMCS director George Cohen agreed to allow David Berry, the Inspector General for the National Labor Relations Board, to review the agency’s purchase card program. In February 2012, Berry confirmed in a letter to Cohen that agency purchase cards had been used “to circumvent FMCS procurement process and other internal controls,” but ultimately, did not recommend disciplinary action.[11] After the allegations became public, the agency released a statement saying that the records in question only surfaced because of a “disgruntled FMCS employee.”[12] Cohen vaguely stated that the agency had taken “immediate actions” to comply with federal regulations.

FMCS is well known to folks in the ADR world, but this negative press is a poor introduction of a relatively unknown federal agency to the general public. For over 65 years, FMCS has helped pioneer mediation and supported the ADR movement. Now that the federal government has reopened, the FMCS will be able to resume its important work, and hopefully, these revelations will not undermine the mission of this agency.