Don't Whistle While You Work

By RICHARD BEHAR

The Internal Revenue Service is tough on taxpayers, but the agency can be a soft touch when it comes to misconduct by its top executives. Case in point: two former IRS officials, Frank Santella and Joseph Jech. The Office of Special Counsel, an independent federal agency that protects whistle blowers, filed civil charges in May against the two for harassing and demoting two IRS managers who tried to snitch on their superior, Santella, a former regional boss in the Chicago IRS office. Santella allegedly went after the informers with the help of Jech, who retired in June as the IRS's assistant director of internal security.

Jech and Santella were among 25 high-ranking IRS officials implicated in a pattern of misconduct and corruption uncovered in hearings last year by the House Commerce, Consumer and Monetary Affairs Subcommittee. If found guilty of the OSC charges, both men could be banned for life from Government service. The alleged offenses began in 1984, when the whistle blowers turned in Santella for trading favors with a Mob-linked businessman. Thereafter, senior IRS officials began a harassment campaign that is still going on.

% Even though an IRS "grievance examiner" supported the whistle blowers in 1987 and urged action against their oppressors, many of the service's highest officials refused to comply. For four months the examiner's report sat on the desk of IRS deputy commissioner Michael Murphy, the agency's most powerful bureaucrat. Jech eventually moved to a higher IRS post, while Santella was allowed to retire quietly. (He is now a top official at the federal Railroad Retirement Board, where he helps oversee a $7 billion benefits program.)

At one point, an assistant to Murphy offered to reimburse one of the whistle blowers, Stanley Welli, for his legal fees in return for his silence. In a 1988 internal IRS memo that described Welli's appeal for help to the OSC, Murphy scrawled the comment MISTAKE! in the margin. Last March senior IRS officials awarded Murphy a plaque for "exemplary conduct which sets the standard for ethics and integrity for all IRS employees."

In response to congressional attacks, IRS commissioner Fred Goldberg restructured the agency last January. While not punishing any of the implicated high-level IRS wrong doers, his plan calls for a presumably independent body, the Treasury Department's inspector general, to handle all high-level misconduct probes in the future. But the OSC is now investigating whether the inspector's office itself was involved in harassing the Chicago whistle blowers. Moreover, in August 1989, only weeks after Santella's behavior was denounced in congressional hearings, Treasury I.G. deputy Robert Cesca wrote a glowing letter recommending Santella for a top post with another federal agency.