Amtrak Top Cop Paid Hush Money?

New Documents Detail Threats to Fire Amtrak Inspector General

AUG 06, 2009 Project on Government Oversight - A pair of new, just-released documents show that Amtrak, America’s federally subsidized rail network, wanted to fire its independent Inspector General, who was effectively forced to resign several weeks ago. One of the documents, a June 2009 draft letter was to be signed by Amtrak chairman, Thomas C. Carper. The language in the letter is blunt. Addressed to Vice-President Biden—in his capacity as President of the Senate—and to House Speaker Nancy Pelosi, the letter was to inform Congress—as required by law—of Amtrak’s plan to dismiss Inspector General Fred E. Weiderhold, Jr. Citing a long list of alleged lapses, shortcomings and failures, Amtrak’s chairman wrote that Weiderhold, "is no longer the effective Inspector General that our Company needs" and that he "will be removed from his position." ...Read More

Amtrak IG's severance raises questions


The strange story of the sacking of Amtrak’s inspector general is getting even stranger.

When Fred Weiderhold Jr. suddenly retired this summer, POLITICO has learned, Amtrak agreed to pay him more than $310,000 in exchange for his signature on a separation agreement that drastically limited what he could say about the circumstances of his departure.

When Fred Weiderhold Jr. suddenly retired this summer, POLITICO has learned Amtrak agreed to pay him more than $310,000 in exchange for his signature on a separation agreement that drastically limited what he could say about the circumstances of his departure. Photo: AP

The payouts included $28,220 for unused vacation, $244,573 in severance to be paid out over a year and a lump sum of $38,090. Weiderhold was also given outplacement assistance from an agency hired by Amtrak as well as paid-for COBRA health care premiums for 18 months, according to a copy of the separation agreement obtained by POLITICO.

Amtrak spokesman Steve Kulm declined to comment, citing a company policy of not discussing personnel matters.

Sen. Chuck Grassley (R-Iowa), who’s been investigating the Amtrak situation, said he’s wary of the government-controlled company’s use of a nondisclosure agreement.

“The public’s business ought to be public, but it has taken over a month of digging for Congress to get to the truth about Amtrak firing its inspector general,” Grassley said. “It makes you wonder what Amtrak wanted to hide by trying to muzzle its former watchdog.”

There has been a series of departures of inspectors general this year, prompting critics to charge that agencies are trying to quash criticism from the officials who are supposed to be their own in-house watchdogs.

Gerald Walpin, the inspector general for the Corporation for National & Community Service who was fired earlier this year by the Obama administration, filed a lawsuit in July to get his job back. And the acting inspector general of the International Trade Commission, Judith Gwynn, was let go earlier this year.

Amtrak is technically a private corporation, not an agency of the federal government, and its inspector general is appointed by the chairman of the Amtrak Board of Directors, not the president, as is the case with other inspectors general.

According to the terms of his separation agreement, Weiderhold is expected “not to disparage publicly or privately the company, its employees, services, prospects or products.” Also, it required that he “make no internal or external statement regarding his resignation, whether orally or by electronic or hard-copy written communication (including but not limited to e-mail) without providing the company an opportunity to review the communication in advance.”

The contract was signed June 18 by Weiderhold and Amtrak Chairman Thomas Carper.

Reached on his cell phone, Weiderhold said he believed the separation agreement to be standard for executives departing Amtrak. And he characterized his departure as a retirement, not as a firing.

“Basically, I retired with a separation agreement,” Weiderhold said. “This was somewhat convenient to me because I had reached the point where I was ready to move on anyway.”

Like many inspectors general, whose job requires them to investigate potential wrongdoing at their agencies, Weiderhold had not ingratiated himself with management over the years.

In 2006, for example, Legal Times reported that an Amtrak inspector general’s report found more than $100 million in mismanaged legal fees from 2002 to 2005. And in 2009, his office was at the center of a report from the law firm Willkie Farr & Gallagher that concluded “Amtrak’s policies and procedures have systematically violated the letter and spirit of the Inspector General Act,” according to a summary by Grassley’s aides.

In a confidential letter drafted in June titled “Removal of Fred E. Weiderhold Jr. as Inspector General of Amtrak,” the company laid out the reasons for his dismissal, including failure to keep the board of directors informed, not providing timely reports and becoming “excessively involved in the daily management of the company.”

“Mr. Weiderhold is no longer the effective inspector general that our company needs,” said the letter to be signed by Carper.

For his part, Weiderhold says that he expects to land on his feet.

“I think, quite frankly, that I was making a difference at Amtrak,” he said. “It was work that I’m proud of.”


Amtrak Appointee Fuels Debate Over Independence

August 1, 2009 By Christopher Conkey WALL STREET JOURNAL

WASHINGTON -- Amtrak is coming under fire from senior House lawmakers who are upset that the railroad installed one of its former managers as inspector general, fueling a debate over how to reinforce the independence of government watchdogs.

The Amtrak dispute is the latest of several controversies over the actions of inspectors general who monitor spending in government agencies. Members of Congress this year have launched at least six investigations into issues involving inspectors general, citing concerns that the watchdogs aren't aggressive enough or independent enough, particularly given the large sums of stimulus money flowing through government departments.

Congress is debating legislation that would strip some agencies of the power to appoint their own inspectors general and transfer that power to the president. Earlier this year, the House passed a bill that would make that change at several federally funded entities, including the Federal Reserve, the Securities and Exchange Commission and the Commodity Futures Trading Commission. A Senate committee approved a similar measure Wednesday.

"An independent inspector general is not someone who is hired and fired by the head of the agency they investigate," Rep. Edolphus Towns (D., N.Y.) said Thursday. "That is why we are advancing a bill to make IGs at key financial regulators, like the Fed and SEC, presidential appointees. We may need to do the same for Amtrak."

In the Amtrak case, Reps. Towns and Darrell Issa (R., Calif.), the chairman and ranking Republican of the House Committee on Oversight and Government Reform have asked that the railroad's interim inspector general, Lorraine Green, be replaced. "The selection of a senior member of Amtrak management…undermines the statutory independence of the office of inspector general," the lawmakers wrote in a letter to Amtrak Chairman Thomas Carper on Wednesday.

Until recently, Ms. Green, 63, was Amtrak's vice president of human resources and diversity initiatives. She was appointed as Amtrak's inspector general in June. Amtrak said it is searching for a permanent inspector general, but has no immediate plans to replace Ms. Green.

Among other concerns, the congressmen cited Ms. Green's move to delay the release of a probe undertaken by the previous inspector general that examined her former department within Amtrak. In an interview Thursday, Ms. Green said she initially thought it wouldn't be "appropriate" for her to review the report and it would be best "to leave that to the next inspector general."

Now, Ms. Green said, she is directing her staff to issue the investigation's report to remove "the perception…I'm holding the report back."

"I don't think I have a conflict of interest," Ms. Green said.

Due to the controversy, Ms. Green said she is counting on Gary Glowacki, deputy inspector general for audits, to manage the office's oversight of how Amtrak spends $1.3 billion in stimulus funds.

In an interview, Mr. Glowacki said Amtrak has spent only $8 million of the stimulus funds. "I'm confident we're going to be able to provide our oversight responsibilities," he said.

Ms. Green assumed the watchdog post earlier this year following what Messrs. Towns and Issa described as the "forced retirement" of former inspector general Fred Weiderhold, who had "aggressively investigated and questioned Amtrak's general counsel's office for spending tens of millions of dollars on outside law firms."

Aside from the Amtrak probes, House and Senate investigators are examining why the International Trade Commission hasn't had a permanent inspector general in place for nearly four years.

The commission has instead appointed its watchdogs to six-month terms, a practice Sen. Charles Grassley (R., Iowa) condemned. "An inspector general has trouble criticizing management when having to justify his or her job every six months," Mr. Grassley said.

"We do completely understand the concerns that have been raised…about our having an acting IG for so long," a commission spokeswoman said Thursday. She added that the agency is currently reviewing applications and hopes to name a permanent watchdog soon.

In a statement, Amtrak said its board "has been concerned for some time about whether best practices are currently in use" in the office of inspector general, but that it "has no doubts concerning Lorraine Green's independence."

Write to Christopher Conkey at [email protected]


Amtrak accused of hindering stimulus oversight

July 14, 2009 By Matt Kelley, USA TODAY

WASHINGTON — Amtrak managers have improperly interfered with oversight of the railroad's $1.3 billion in economic stimulus funding, according to an independent report by a former federal prosecutor.

The report commissioned by Amtrak's former inspector general says the railroad's lawyers and financial managers interfered with the internal watchdog's ability to get stimulus-related documents and the $5 million Congress appropriated for stimulus oversight...READ MORE

Financial Agency IGs Say Bill Threatens Independence

By Ed O'Keefe - Washington Post Staff Writer
Monday, July 6, 2009

"Inspectors general at five financial regulatory agencies are objecting to legislation that would elevate their positions to the presidential-appointment level, arguing that the move would compromise their ability to conduct independent investigations."

"Last month, the International Trade Commission dismissed its inspector general and President Obama fired Gerald Walpin, inspector general at the Corporation for National and Community Service. Also, Amtrak's inspector general retired suddenly after delivering to leadership of the federally backed corporation an independent audit alleging interference with his probes. Amtrak said retirement arrangements had been made before the analysis was delivered."...READ MORE

Who railroaded the Amtrak inspector general?

By Michelle Malkin July 1, 2009

Watchdogs are an endangered species in the Age of Obama. The latest government ombudsman to get the muzzle: Amtrak inspector general Fred Weiderhold. The longtime veteran employee was abruptly “retired” last month –just as the government-subsidized rail service faces mounting complaints about its meddling in financial audits and probes.

Question the timing? Hell, yes.

On June 18, Weiderhold met with Amtrak officials to discuss the results of an independent report by the Washington, D.C. law firm, Willkie, Farr & Gallagher. The 94-page report has been made publicly available through the office of whistleblower advocate Sen. Charles Grassley (R-Iowa). It concluded that the “independence and effectiveness” of the Amtrak inspector general’s office “are being substantially impaired” by the agency’s Law Department. Amtrak bosses have effectively gagged their budgetary watchdogs from communicating with Congress without preapproval; required that all Amtrak documents be “pre-screened” (and in some cases redacted) before being turned over to the inspector general’s office; and taken control over the IG’s $5 million portion of federal stimulus dollars.

Moreover, the report revealed, Amtrak regularly retained outside law firms shielded from IG reach. In another case, Amtrak’s Law Department appeared to meddle in an inspector general investigation of an outside financial adviser suspected of inflating fees. The consultant ran to the Law Department when the IG demanded documents; the Law Department repudiated the IG’s instructions on complying with a subpoena.

These interventions (ongoing since 2007) have “systematically violated the letter and spirit of the Inspector General Act,” according to Sen. Grassley. IG staffers now fear retaliation – and with good reason. Their boss, Weiderhold, lost his job on the very day Amtrak received the Willkie, Farr & Gallagher report. It may be hot and humid in the rest of the Beltway, but every inspector general’s office is feeling an Arctic chill.

The transparent sacking comes just as Amtrak is awash in more than $1.3 billion of new federal stimulus funds. It comes on the heels of the unceremonious dismissal of Gerald Walpin, the AmeriCorps inspector general who dared to probe financial shenanigans by Obama cronies. (See “Obama’s AmeriCrooks and cronies scandal,” June 17, 2009.) And it comes on the heels of the stifling of veteran Environmental Protection Agency employee Alan Carlin, the researcher who dared to question the Obama administration’s conventional wisdom on global warming. (See “EPA’s game of global warming hide-and-seek,” June 26, 2009).

Question the timing? You betcha.

So, who is behind the railroading of the Amtrak inspector general? As with the story of the AmeriCorps firing, which has First Lady Michelle Obama’s fingerprints on it, the Amtrak case smells like cronyism. Investigative journalist Robert Stacy McCain, who has watch-dogged the watchdog stories, noted last week that Amtrak’s vice president and general counsel is Eleanor Acheson.

Acheson, an old friend of Hillary Clinton, also has close ties to Vice President Joe “Mr. Amtrak” Biden. She hired Biden’s nominations counsel Jonathan Meyer to serve as her deputy general counsel. The two had also worked together in the Clinton Justice Department. Meyer called his hiring at Amtrak by Acheson a “happy coincidence,” according to Legal Times. (In another “happy coincidence,” Biden’s lobbyist son, Hunter, sits on Amtrak’s board of directors.) Acheson oversees the very Law Department accused of interfering repeatedly with the taxpayer advocates in the inspector general’s office.

Sen. Grassley has requested that Amtrak supply information on Weiderhold’s unexpected retirement, as well as internal and personal materials related to his departure and the report on Amtrak managers’ meddling. On the House side, Reps. Edolphus Towns (D.-N.Y.) and Darrell Issa (R.-Calif.) announced a probe Monday into Amtrak’s actions. They zeroed in on Amtrak’s choice of Lorraine Green to replace “retired” IG Weiderhold. (Click here for their letter to Amtrak Chairman of the Board of Directors Tom Carper.)

Who is Lorraine Green? She’s a former Amtrak human resources executive and faithful Democrat donor with no experience in the inspector general business. Her expertise? Managing “diversity initiatives” for the agency. Watchdog out. Lapdog in.

Can someone open a window? The fetid odor of Hope and Change is really starting to stink up the joint.

Lawmakers Investigating the Resignation of Amtrak’s In-House Watchdog

by Elana Schor on June 30, 2009

The House oversight committee has launched an official inquiry into the resignation of Amtrak's veteran inspector general (IG) earlier this month -- on the same day that an outside law firm reported on alleged interference with his work by management at the rail corporation.

Amtrak IG Fred Weiderhold left earlier this month after 35 years at the rail corporation. (Photo: WSJ)
The bipartisan congressional investigation focuses on a report commissioned by Amtrak IG Fred Weiderhold several months before his June 18 departure. The report, prepared by the firm of Willkie Farr & Gallagher, confirmed Weiderhold's past contention that the IG's "independence and effectiveness are being substantially impaired" by in-house policies at Amtrak.

But one particular charge in the report caught Congress' attention: that Amtrak managers prevented Weiderhold from monitoring their use of economic stimulus money without their approval.

As the oversight committee's chairman, Rep. Edolphus Towns (D-NY), and senior Republican, Rep. Darrell Issa (CA) explained in a letter sent yesterday to Amtrak chairman Thomas Carper:

[T]he legal analysis found that Amtrak management claims that all expenditures of funds designated for the Inspector General must be approved by Amtrak management. In other words, the Inspector General may not use funds provided by Congress to investigate potential waste and fraud in stimulus programs without the consent of the organization being investigated. This is contrary to the clear intent of Congress and is unacceptable.
In a statement released yesterday, Amtrak noted that it had no opportunity to weigh in on the Willkie Farr report and stated that "there was no relationship between the timing of Mr. Weiderhold’s retirement and this report." Carper added that the rail corporation "would like to maintain an open line of communication
and are looking forward to cooperating fully" with the congressional inquiry.

Willkie Farr's allegations of IG interference at Amtrak ranged beyond the stimulus law. Weiderhold's office began a review of New York's Moynihan Station project in March 2008, focusing on the apartment leased by the project manager as well as "the use of lobbying firms and consultants in connection with the project," the law firm's report states.

But when one of Weiderhold's inspectors tried to get a copy the Moynihan project manager's personnel documents, senior managers would only give him "two board meeting minutes, one which had been redacted," according to the Willkie Farr report. (A copy of the 94-page report can be downloaded here.)

The oversight committee has not announced plans for any hearing on the Amtrak issues, but we'll keep you posted.

Eleanor Acheson, Lobbyist?

"...The real question here, given that Amtrak loses so much money is, are employees being compensated as "lobbyists" when they go to a city, as in the case below, to represent Amtrak? And is that compensation over and above their salaries? And if so, why? Wouldn't lobbying a city for Amtrak be part of their job? Is it a pro-rated compensation based upon their salaries? Or is it another rat hole to throw money down and give Amtrak execs perks? According to the"details" box at link below, Acheson was compensated over 4k for lobbying NYC in one year. Additional compensation in another year.

Update: Stacy's latest on the Amtrak and the Walpin story in the Am Spec.

In working different angles of the AMTRAK story after Stacy McCain's item on Eleanor Acheson's role with AMTRAK, I happened across a curious page.

The answer is that she's the Amtrak vice president and legal counsel whose name is relevant to last week's unexpected retirement of Amtrak inspector general Fred Wiederhold.

According to an official looking page, Eleanor Acheson was, or is a paid lobbyist for the National Railroad Passenger Corporation. (NRPC) = (Amtrak) She's listed from 2007 to the current calender year. Maybe I'm missing something, or there's another explanation for this, but why would a lobbyist be Amtrak's VP and legal counsel?

You would think someone wouldn't be a lobbyist and a VP for Amtrak at the same time, wouldn't you? See Stacy's link for more. Is it something else, and just a confusing page? Seemed strange the way it makes it appear.

The latest on the latest IG situation.

June 23, 2009 [UPDATE] Welcome, Instapundit readers (and Michelle Malkin readers). In other news, I have made a prediction.

It turns out that former Amtrak IG Fred Wiederhold quit right after Senator Grassley started asking some questions.

As a senior member of the United States Senate and as the Ranking Member of the Senate Committee on Finance (Committee), it is my duty under the Constitution to ensure that Inspectors General, which were created by Congress, are permitted to operate without political pressure or interference from their respective agencies. Inspectors General were designed for the express purpose of combating waste, fraud, and abuse and to be independent watchdogs ensuring that federal agencies were held accountable for their actions. I understand that Inspector General Fred Weiderhold, Jr. has retired today.

Based on contacts that my staff had with Mr. Weiderhold on two recent occasions (April 2, 2009 and June 4, 2009), I understand that the OIG has suffered from repeated and continuous interference from the agency. After the most recent discussion, it was agreed that the OIG would provide, among other things, a White Paper and specific examples of agency interference with OIG audits and/or investigations. To date, the OIG has not yet provided any documents. As you know, any interference such as that was described in these previous discussions is a direct violation of the Inspector General Act of 1978.

In light of Mr. Weiderhold’s unexpected retirement, please provide the previously requested documentation immediately.

(Via Michelle Malkin) Stacy McCain’s covering the story, particularly the bits potentially involving one Eleanor Acheson. Ms. Acheson is the General Counsel for Amtrak, a very heavy Democratic campaign contributor, someone who is linked to Vice President Joe Biden, and who was brought into Amtrak after a legal department restructuring in 2006 (supposedly not due to ethics issues) caused the last general counsel was reshuffled over to be incoming Amtrak President Alex Kummant’s temporary counsel. Entertainingly enough, Kummant himself suddenly left his position, right after the 2008 election; it’s been suggested that his surprisingly short tenure might have something to do with his disputes with Amtrak’s Board of Directors, which includes - interestingly enough - Hunter Biden, who is of course the son of the Vice President.

All very nicely (and Washingtonianly) incestuous, yes - but what does it mean?

Well, we’ll let Senator Grassley find that out for us. Although I do find it interesting that Hunter Biden’s connection with Amtrak occurred largely after the billing irregularities that supposedly did not get Ms. Acheson her current job took place. There are a surprising number of coincidences going on with Amtrak, it seems.

Grassley asks Amtrak to respond to report describing interference with IG work

June 25, 2009 Senator Chuck Grassley has asked Amtrak about the circumstances of the Inspector General's unexpected retirement seven days ago and invited Amtrak to provide information about the interference by Amtrak in the work of the Inspector General described in a report prepared at the request of the retired watchdog....READ MORE

Grassley: Amtrak 'Systematically Violated' IG Law

By Robert Stacy McCain on 6.25.09 @ 8:08PM

Officials of Amtrak have "systematically violated the letter and spirit of the Inspector General Act," Sen. Charles Grassley (R-Iowa) charged Thursday, making public a 94-page legal report prepared at the request of the Amtrak inspector general who resigned suddenly a week ago.

Fred Wiederhold, a veteran IG, retired without notice or explanation June 18 after a meeting with Amtrak officials where he presented the report by the law firm of Willkie, Farr & Gallagher.

"The allegations are serious, including third parties being told to first send documents under subpoena by the Inspector General to Amtrak for review, and the Inspector General being chastised for communicating directly with congressional appropriations and authorizing committees," Grassley said in a statement.

Grassley's accusation of illegal actions by Amtrak, including failure to comply properly with subpoenas, is the most serious to date in an investigation that has expanded quickly since the IG for the AmeriCorps program was given an ultimatum two weeks ago to resign or be fired.

In a letter to Amtrak Chairman Thomas Carper, Grassley said the legal report "suggests a long-term and unrelenting interference with the activities and operation" of the IG's office. Grassley said his staff believes that members of the Amtrak IG office "be fearful of retaliation if they were to discuss the matters set forth in this letter with anyone, including Congress."

Grassley requested that Carper make four Amtrak employees "immediately available for interviews": D. Hamilton Peterson, Deputy Counsel to the Inspector General; Edward Puccerella, Director of Congressional & External Affairs; Colin C. Carriere, Counsel to the Inspector General; and E. Bret Coulson, Deputy Inspector General.

The American Spectator reported earlier Thursday that, according to sources with knowledge of the case, Amtrak vice president and general counsel Eleanor "Eldie" Acheson -- a close friend of Secretary of State Hillary Rodham Clinton -- had been involved in several of the disputes between the money-losing passenger rail service and the IG's office.

Grassley Pushing Probe of Inspectors General Firings

Sunday June 23, 2009 Ed O'Keefe/WASHINGTON POST: Sen. Charles E. Grassley (R-Iowa) this week suggested that the Obama administration is attempting to interfere with investigations conducted by government watchdogs . . . "I kind of get the impression that there’s kind of a crusade early on in this administration to . . . short circuit inspectors general," Grassley said . . . READ MORE

back to the Amtrak page