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First in a series of Big River articles on the Army Corps Navigation Study.

Did the Corps Cook the Books?

By Reggie McLeod
From Big River March 2000

In 1993 Congress gave the Army Corps of Engineers $50 million to study whether Congress should give the Corps $4 billion. Apparently a handful of economists got in the way of a foregone conclusion.

The former head of the economic component of the study, Donald C. Sweeney, filed an affidavit on February 1, outlining a gruesome campaign by his superiors to change the results of five years of research that did not support expanding the lock-and-dam system on the Mississippi and Illinois rivers.

Sweeney, who earned a Ph.D. in economics and worked for the Corps for 22 years, filed the affidavit with the federal Office of Special Counsel, which often defends whistle-blowers -- federal employees who report wrongdoings in government agencies. The affidavit is available on the web site of Environmental Defense (www.wdf.org).

From March 1993 to June 1998 Sweeney served as technical manager of the economics workgroup of the Upper Mississippi River, Illinois Waterway Navigation System Feasibility Study (Navigation Study). The workgroup found that large-scale improvements -- such as doubling the length of a lock -- would not justify the construction costs.

The workgroup's assumptions were not pessimistic: It predicted increased barge traffic from 1992 to 1999 that was more than five times the actual growth during that period.

Higher ups in the Corps, encouraged by MARC 2000, the river shipping lobby group, repeatedly challenged the data and its conclusions. But the work stood up to the review of other economists.

So, the Corps resorted to bullying, according to the affidavit, "On September 18, 1998, I was called to a private, one-on-one meeting with the St. Louis District's Deputy for Project Management, Mr. Gerald Barnes. He informed me he had had conversations with MVD [Mississippi Valley Division of the Corps] staff, specifically Dusty Rhodes and Don Herndon. He told me to find a way to justify large-scale measures in the near term for the UMR-IW navigation system or the MVD office would find an economist who would and I would be out of my job as technical manager of the economics work group. As I remember, he asked if I had a family to support or words to that effect."

Gerald Barnes did not return calls from Big River.

The Corps changed the numbers and conducted closed meetings with representatives from MARC 2000, the National Corn Growers Association, American Commercial Barge Lines and Cargill, to develop a strategy to convince the public that the system needed to be expanded. They replaced Sweeney and assigned an engineer to head the economic workgroup.

Eventually they changed four of the economic workgroup’s major conclusions. They did not change the traffic growth projections that had proved to be wildly exaggerated.

¥ The economic study gauged 'elasticity' of the demand to ship grain on the river. Elasticity measures the likelihood that people will change their behavior because of changing prices and opportunities. In other words, if the cost of shipping by train dropped, then more people would use the trains. An elasticity value of 1 would mean that demand would not change, no matter what the price is. The economists initially came up with a value of 2 for the elasticity of shipping grain on the river. Under pressure, they said it could be as low as 1.5, but no lower. Higher ups in the Corps changed it to 1.2.

¥ The initial cost of extending the locks from 600 feet to 1,200 feet was too high, so engineers came up with a scheme -- using some new and unproven techniques -- to build them for less. Construction projects often cost more than the estimate, so economists normally add a contingency cost of 25 percent. Because the new estimates relied on unproven techniques, the economists increased the contingency cost to 35 percent. Higher ups in the Corps changed it to 25 percent.

¥ The locking time at busy locks can be cut dramatically if towboats help one another. The economists found that making small improvements to the locks and encouraging towboats to help 50 percent of the time at crowded locks would save nearly as much as lengthening the locks. Higher ups at the Corps changed it to five percent.

¥ The original study found that extending the locks would have no significant effect on future maintenance costs. Higher ups at the Corps changed the study to show large maintenance savings.

Sweeney's affidavit also describes numerous meetings and memos instructing Corps employees to advocate expanding the current lock-and-dam system. One memo said that the Mississippi Valley Division of the Corps had a goal to expand its projects by $100 million per year.

Environment Costs?

The manager of the environmental component of the Navigation Study, Ken Barr, told Big River last winter that it was almost completed. He did not return calls to contribute to this story.

At public meetings last summer the Corps presented its allegedly doctored figures to the public and asked for input. Corps employees refused to discuss the environmental costs of the proposed expansion, claiming that the data was not yet available.

The Navigation Study has been criticized from the beginning for its narrow focus. It does not consider whether the existing lock-and-dam system -- which is heavily subsidized by taxpayers -- is an efficient method of transporting grain. It does not acknowledge deep, system-wide environmental problems that many biologists claim are caused by the current lock-and-dam system.

On February 14 the Pentagon launched an inquiry into the alleged misconduct and promised to seek an independent review of the Navigation Study, according to the Washington Post (Feb. 15, 2000).

Sweeney's affidavit refers to several email messages and memos that were offered as supporting evidence. The Washington Post reported that it interviewed several Corps employees who supported Sweeney's allegations.

Reggie McLeod is editor and publisher of Big River, an independent magazine about the Upper Mississippi River.

Copyright 2000, Big River

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