The Bureaucrats Who Deserve Lumps of Coal for Christmas (Corruption at The Federal Mediation and Conciliation Service)

By Craig Eyermann of The Independent Institute.

"There are many stories about bureaucrats behaving badly within the U.S. government. But did you know some of the worst of the worst all worked for a single federal agency?

The Daily Wire‘s Luke Rosiak’s investigative report into the abuses tolerated at a small federal agency in which bureaucrats exploited a lack of oversight to their extreme personal benefit is both eye-opening and extremely frustrating. Here’s an excerpt introducing what was allowed to pass as business-as-usual at the agency during the last ten years:

The Federal Mediation and Conciliation Service (FMCS) occupied a nine-story office tower on D.C.’s K Street for only 60 employees, many of whom actually worked from home, prior to the pandemic. Its managers had luxury suites with full bathrooms; one manager would often be “in the shower” when she was needed, while another used her bathroom as a cigarette lounge. FMCS recorded its director as being on a years-long business trip to D.C. so he could have all of his meals and living expenses covered by taxpayers, simply for showing up to the office….

FMCS seemed, quite clearly, to exist for the benefit of those on its payroll, and not much else. One employee told me: “Let me give you the honest truth: A lot of FMCS employees don’t do a hell of a lot, including myself. Personally, the reason that I’ve stayed is that I just don’t feel like working that hard, plus the location on K Street is great, plus we all have these oversized offices with windows, plus management doesn’t seem to care if we stay out at lunch a long time. Can you blame me?”

As a taxpayer, I want accountability for how the money taken out of my pay is spent. I don’t want to see it wasted with nothing positive to show for it. My answer to the FMCS employee’s question is yes.

But wait, it gets so much worse than employees taking long lunches.

Top FMCS official George Cohen used a “recreation and reception fund” to order champagne and $200 coasters for his office, and to purchase artwork painted by his wife. The tiny agency commissioned paintings of its top employees — as one employee told me, “like they were reigning kings or something… I’ve never seen anything like it before.” It spent $2,402 retouching the portrait of someone who briefly held the top job in an acting capacity.

FMCS employees “unblocked” their government credit cards to turn off typical abuse protections, then used them to apparently fund personal expenses and simply bill anything they’d like to the government. One employee leased a BMW; another (IT director James Donnen) billed the government for his wife’s cell phone, cable TV at both his home and his vacation home, and even his subscription to USA Today.

But wait, it gets so much worse than employees using their government credit cards to pay for their personal expenses.

FMCS used federal jobs as a spigot of cash for friends and relatives. Allison Beck, a former union lawyer who became a top FMCS official, employed her sister-in-law as a “special assistant,” and an inspector general found evidence that she tried to create a high-level job for a friend.

FMCS employees allegedly steered contracts to friends, allowing them to write the “statement of work” that would be used to choose the contract winner — resulting in, of course, their own selection. Such “trainers” were paid $1,500 per day per person to train FMCS’s staff, plus $163 an hour for travel.

But wait, it gets so much worse than employees abusing their positions to lavish jobs and rewards on their friends and family members.

Scot Beckenbaugh, a top agency official, was paid $174,000 a year, but that wasn’t enough: He had his “duty station” listed as Iowa so that he could have all of his living expenses and food paid for in D.C., where he lived and worked, as if he was on a six-year-long business trip. When an employee raised the issue to an agency lawyer, the lawyer told him he “should not raise these issues … it would open a can of worms.”…

Paul Voight, a human resources official, was listed as living in D.C. even though he actually lived in Wisconsin, in order to fraudulently obtain higher cost-of-living pay. Voight’s boss was Artur Pearlstein, who left the agency to become a law professor, and was then re-hired after his academic career imploded in a plagiarism scandal. His first move in his new job was terminating an independent investigation into FMCS staff abusing taxpayer funds for personal gain.

But wait, it gets so much worse than bureaucrats grafting excessive income benefits for themselves at taxpayer expense.

It funded constant travel of its employees to exotic locales, on the pretext that it was drumming up business for the federal agency — an admission that there was little demand for the agency’s existence.

In one month, Beck traveled to Italy and Switzerland, where she conducted a business meeting — over video chat. Then she went to Tunisia and an island off the coast of Georgia. She flew first class and forced the agency to reimburse her for mileage when she drove to her vacation home in Maine.

But wait, it gets so much worse than bureaucrats merely taking exotic vacations on the taxpayer’s dime.

Rosiak investigated the agency nearly a decade earlier, finding many of these abuses and more, which should have led to a criminal investigation. He recounts what happened instead:

What surprised me most about my FMCS investigation was what happened afterward: nothing. An inspector general made a referral to the FBI, but there were no prosecutions. Instead, President Barack Obama nominated a chief subject of the investigation to the top job.

This is the worst part of the story. The message former President Barack Obama sent with his official action is that public corruption would not only be tolerated but welcomed at the FMCS. Is it any surprise that all the abuses of the badly behaving bureaucrats got worse in the decade that followed?

The FMCS lasted until March 2025, when the agency became one of the first to be axed by President Trump’s DOGE initiative. The badly behaving bureaucrats who lived like “reigning kings” were fired.

For taxpayers, that’s the beginning of a happy ending. An even better ending would involve criminal investigations and restitution. Until then, these bureaucrats truly deserve lumps of coal in their Christmas stockings."