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FEDERAL READING PROGRAM UNDER INQUIRY

A federal investigator looking into allegations of conflict of interest and mismanagement in a $1-billion-a-year Education Department reading program said Friday that he has referred the matter to the Justice Department.

John Higgins, the Education Department's inspector general, declined to specify what he has asked government prosecutors to look at, but investigators have been highly critical of the department's management of the Reading First program.

Referrals are made by investigators when they encounter evidence of possible federal crimes or other misconduct, which only the Justice Department has authority to prosecute.

Investigators say federal officials intervened to influence state and local decisions about what reading programs to use, a potential violation of the law. Some of the people who were influencing those decisions had a financial interest in the programs that were being pushed, officials said.

"I think we're very close to a criminal enterprise here," House Education and Labor Committee Chairman George Miller, D-Calif., said at an investigative hearing Friday. "Have you made any criminal referrals, Mr. Higgins?"

"We have made referrals to the Department of Justice," Higgins said.

Reading First's former director told lawmakers Friday he did nothing wrong, despite investigators' findings that the Education Department skirted the law and ethical standards.

In scathing exchanges with Miller, former Reading First program director Chris Doherty defended his and his colleagues' work implementing the program.

"We thought then and we think now we did abide by the law," said Doherty, who stepped down last year.

FAST FACTS

Reading First

The program, created by President Bush's signature No Child Left Behind law, offers intensive reading help for low-income children in the early grades. It has been dogged by accusations of impropriety since its inception. Hours before the hearing began, the Education Department released statistics showing Reading First schools improved in reading fluency and comprehension for first- and third-graders from 2004 to 2006.

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