‘Slush fund’ factor in Fowler exit - Navy News | News from Afghanistan & Iraq - Navy Times

‘Slush fund’ factor in Fowler exit

A sprawling financial scandal at the Naval Academy — involving extravagant parties and a “slush fund” — was an embarrassment that helped lead to an early exit for the school’s superintendent, Navy Times has learned.

Vice Adm. Jeffrey Fowler faced “administrative action” in April as a result of a year-long Naval Inspector General’s investigation, said Rear Adm. Denny Moynihan, the Navy’s top spokesman.

Fowler announced at a meeting Monday morning that his change of command ceremony is scheduled for September.

Navy Times received a copy of the investigation report Monday afternoon after a longstanding Freedom of Information Act request. Moynihan spoke later Monday afternoon in response to queries about the report.

The IG investigation found that Naval Academy officials working under Fowler had created a “sham” bank account that helped fund things like a $10,000 party for the academy’s golf association and $1,000 worth of wine for a dinner party at the superintendent’s house.

The IG did not substantiate any of the allegations that Fowler was knowingly involved in the financial misconduct.

“Vice Adm. Fowler believed any expenditures he authorized were permissible, and he did not financially gain from these irregularities,” Moynihan told Navy Times.

The person assigned as superintendent of the academy is legally required to serve for three years. While Fowler served more than three years, “the outcome of this investigation was a factor in him not serving longer,” Moynihan told Navy Times.

Fowler issued a written statement Monday night.

“As superintendent of the Naval Academy I am responsible and accountable. I and the academy’s leadership take this report seriously,” the superintendent said in the statement.

“It has [been] and remains the Naval Academy’s goal to remain responsible stewards of private and public funding. We will continue to work with alumni and Naval Academy Foundation donors in exercising due diligence with the resources they generously contribute,” Fowler said.

Other questionable spending probed by the IG included:

• Annual spending of $400,000 or more for academy-sponsored tailgate events at football bowl games over the past six years.

• Spending $157,000 to purchase an 18-wheel tractor trailer truck for the academy’s football team.

• Spending $325,000 to purchase an antique airplane model that hangs in the front entrance to Dahlgren Hall.

• Spending $3,715,187 on video production services to create recruiting videos.

• Spending several million dollars to renovate the dining facilities of the Naval Academy Club and the Club at Greenbury Point.

While the inspector general ultimately concluded that these and other expenditures were “within the discretionary authority” of the Naval Academy, the IG criticized the accounting and oversight of the money used.

In other instances, such as the catered parties for football coaches and their families, the IG found that the allegations of wrongful spending were “substantiated; however, the violations were unintentional.”

Also as a result of the investigation, Robert Parsons, the academy’s deputy for finance, was given a five-day suspension without pay, Moynihan said.

A third official, whose name was not released, was also reprimanded, Moynihan said.

The IG’s probe found that a fund set up by the academy’s business services division to cover many entertainment expenses was “an unauthorized, off-the-books account that is improper on its face. Its existence is a sham, and it was used much as in the business definition of a ‘slush fund,’ i.e., to pay for things from a pool of money with little accountability required,” IG concluded.

The fund was created in April 2007, using about $95,000 of corporate sponsorship money that the academy received for participation in the 2006 Meineke Car Care Bowl football game, the IG report said.

Fowler explained to the IG that he did not see any fundamental problem with using government money to pay for events that the IG concluded were “extravagant and wasteful.”

“I don’t know the technicalities, but the concept of us doing special things for the people who work here in my mind is not a bad thing,” Fowler told the IG investigators.

Although Moynihan would not specify if other “factors” led to Fowler’s early departure, the superintendent’s tenure has been fraught with controversy.

Last year he was criticized for allowing a pregnant midshipman to graduate despite the academy’s clear prohibition against being pregnant while enrolled there.

Also last year, the administration scrambled to explain why it replaced white members of the school’s color guard with minority students for a nationally televised appearance at the World Series in New York.

Fowler has also been criticized for prioritizing the academy’s athletic program over its academics. Earlier this year, he permitted a star football player who tested positive for marijuana to stay at the academy despite the Navy’s purported “zero-tolerance” drug policy. The athlete, Midshipman 3rd Class Marcus Curry, later left the academy after additional allegations of misconduct.

DISCUSS: Fowler and the 'slush fund'

Staff writer Philip Ewing contributed to this report.