Energy Secretary’s Aide to Repay $20,000 in Living Costs

A friend of Energy Secretary Hazel O’Leary, who was hired in a newly created job as department ombudsman, must reimburse the government for more than $20,000 in living allowances that she was not entitled to receive, Energy Department officials said Thursday.

E. Shirley Thomas, a longtime Newark school social worker, had received daily payments of $35 during the last two years based on the presumption that her residence was in New Jersey when, in fact, she had moved to the Washington area in December 1993. A review of the payments was initiated after a Times story last month raised questions about their propriety.

Meanwhile, House Republicans released a General Accounting Office report Thursday that highlighted lax accounting procedures for two of O’Leary’s costly foreign trade missions, particularly $80,000 from a 1994 India trip, for which the agency could not provide adequate documentation. The funds were spent on behalf of the Energy Department by the U.S. Embassy in New Delhi, which made advance lodging, transportation and other arrangements.

The GAO said that Energy officials were more aggressively seeking to account for $175,000 spent by the embassy in South Africa for an August 1995 trade mission. The report said that the department “has recognized the problem of unsubstantiated payments and has begun taking a number of corrective actions.”

During a sharply partisan House Commerce subcommittee hearing on the GAO report, Republicans made it clear that they intend to continue to focus on the embattled O’Leary as, in the words of Rep. Martin R. Hoke (R-Ohio), “a glaring symbol of government waste.” Lawmakers who seek to dismantle the department have blasted alleged excesses by O’Leary, a former Minnesota utilities company executive appointed by President Clinton in 1993.

Democrats countered that, at worst, the five-month GAO inquiry found that the Energy Department was guilty of “sloppy bookkeeping” and that the trade missions generated lucrative overseas business for U.S. firms.

Noting that the Republicans had not asked any department official or others involved with the trips to testify, Rep. John D. Dingell (D-Mich.) suggested that this might leave the panel “open to the charge that the majority is more interested in a political hatchet job than in finding out the whole truth.”

Pete Didisheim, a special assistant to O’Leary, said that the undocumented funds spent by the embassies had been properly authorized and that the department has sought to obtain all the receipts from the State Department since July. He said that some of the charges should be assumed by the State Department.

The GAO found that the mission to India cost taxpayers $729,921, and the South Africa trip, $663,600. Energy officials said that when all the bills are paid, the figure for South Africa would be $95,000 lower because not all of the money set aside for the trip was spent.

Following a review by the Energy Department’s general counsel, Thomas was notified that she will have to reimburse the government between $20,000 and $25,000 she received as a living allowance after she sold her home in New Jersey, said Energy spokeswoman Barbara Semedo.

Thomas was entitled to the per diem payments if she maintained her permanent residence in New Jersey while on leave from her post in Newark. Energy’s lawyers found that Thomas was not entitled to these funds after she relocated to a Washington suburb.

“When she was notified, she was anxious to pay back whatever she owes as quickly as possible,” Semedo said.

A close friend of O’Leary’s for 34 years, Thomas was hired to fill a post created by the secretary to handle internal personnel complaints. Her annual salary is $93,166. O’Leary said that Thomas has provided a valuable service.

Thomas, who has previously declined comment, could not be reached.

The department is also reviewing upgrades to business- and first-class flights by seven department employees who flew with O’Leary on seven trips. O’Leary already has repaid $8,748 for disallowed upgrades on these flights.

In addition, at O’Leary’s request, the department’s inspector general is investigating all of the issues relating to O’Leary’s travel as well as the hiring of Thomas that were raised by a story in The Times on Dec. 10.