Corruption Flashback: USAID Million Dollar Mystery
How a bureaucrat robbed taxpayers. His mistake that sent him to prison.
Billions of dollars of waste, fraud, and abuse have been uncovered so far by Elon Musk and DOGE (The Department of Government Efficiency). More to come, I’m sure, as Musk and his team of whiz kids take a chainsaw to the bureaucracy. I’m following it with more than a casual interest because that used to be part of my job when I was a reporter back in the 1980s for Channel 7, WJLA-TV, the ABC affiliate in Washington, D.C. Among other things, I covered waste, fraud, and abuse and regularly contacted Federal fraud investigators.
Fraud At USAID
One of the most fascinating cases I covered involved the U.S. Agency for International Development (USAID). The agency drawn a lot of attention from DOGE in recent weeks. In 1988 investigators at USAID were faced with a million-dollar mystery. It’s small potatoes compared to the billions in fraud, waste, and abuse being discovered now. However, at the time, investigators told me it was the largest case of embezzlement on record in the Federal government.
Somebody had been siphoning off funds for many years. Who was the thief? Was it a government employee? How did he get away with it? How did he get caught? Turns out the thief, a mid-level financial manager at USAID, escaped detection for more than eight years. I was at the USAID front door when they perp-walked him out of the building. I’d show you my video report but that was decades ago. And I’m sure it and about 4,000 other reports I did are in a landfill somewhere. So, I’m writing this from memory, refreshed by a few articles (here, here, and here) found on the Internet, which never forgets.
Sloppy Business Practices
The corrupt bureaucrat was good at covering his tracks, but only because the agency’s financial controls were sloppy, at best. In fact, he only got caught because he made one little mistake: he went on vacation. Most government agencies and private businesses require at least two people to approve and sign off on every payment made. But one of the offices at USAID only required a single signature. That’s a recipe for fraud. So, an obscure bureaucrat making $35,000 a year was able to invent invoices for a phony company he established and then send it $20,000 a month. Nobody checked the books for years. Apparently, he was such a hard worker, he never took a long vacation. Finally, he did, and his temporary replacement started asking questions. Uh oh! And so the investigation began. What company is receiving the funds? Who owns it? What’s the purpose of the disbursement? Who approved it? And so on.
How He Was Caught
USAID suspected their vacationing employee was the culprit. But they needed to prove it. The suspect was William J. Burns, not to be confused with a former CIA Director of the same name. One of the first things USAID did was send a private eye to investigate Burns’ lifestyle. After Burns was arrested, I interviewed the detective on the case. He was an old gumshoe who did the shoe leather work which is often vital in these types of crimes. I met him outside Burns’s house in Burtonsville, Maryland. He told me that alarm bells went off as soon as he saw the house. He said he wondered how could Burns afford a $400,000 home on a $35,000 a year salary. Did he win the lottery? Did he receive an inheritance? Did he have any other kind of financial windfall? Every five years federal employees involved in financial management undergo an investigation where they are asked those kinds of questions. It’s routine. But, no, Burns had not suddenly come into money.
Follow the Money
Investigators were stumped. But then they followed the money. The funds Burns stole had been sent to a bank in Maryland. Who was withdrawing it? Investigators checked the photos at the ATM. Sure enough, it was Burns withdrawing the money. Got him In all, the government said he stole 1.2 million dollars over an eight-year period. Burns pled guilty, forfeited all his assets, and was sentenced to 5 years in prison.
What’s Next for DOGE
So far, DOGE has identified tens of billions of dollars in wasteful or highly suspicious spending at a handful of departments and agencies. A lot of deep-dive investigations remain. What we don’t know yet is where all the money REALLY went and whose pocket it ended up in. If the government actually spent money on an Iraq version of Sesame Street, I want to see the video. Show me the deliverables on every single expenditure that DOGE finds suspicious. When investigators follow the money, how much of it will they find was just a waste of money and how much of it will be fraud — money that was outright stolen or spent on activities outside the scope of the government grant? Musk thinks he can save the government a trillion dollars a year. There’s no way all of that spending has been legit. People need to go to jail. Let the perp walks begin.