Cut-rate diplomas: how doubts about the government's own "Dr. Laura" exposed a resume fraud scandal.

• Author: Sperry, Paul

LAURA L. CALLAHAN was very proud of her Ph.D. When she received it a few years ago, she promptly rewrote her official biography to highlight the academic accomplishment, referring to it not once or twice but nine times in a single-page summary of her career. And she never let her employees at the Labor Department, where she served as deputy chief information officer, forget it, even demanding that they call her "Doctor."

Callallan's management style had always been heavy-handed. Once, while working in a previous supervisory role at the Clinton White House, she reportedly warned computer workers to keep quiet about an embarrassing server glitch that led to the loss of thousands of archived e-mails covered by federal subpoena. But with her newly minted Ph.D., Callahan became intolerable, several employees say, belittling and even firing subordinates who did not understand the technical jargon she apparently picked up while studying for her doctorate in computer information systems.

One employee was skeptical of Callahan's qualifications, however, and began quietly asking questions. The answers worried him, especially after Callahan was hired in 2003 as the Department of Homeland Security's deputy chief information officer. His concerns and the resulting investigation ultimately revealed a troubling pattern of resume fraud at federal agencies, including several charged with protecting Americans from terrorism. The scandal raises serious doubts about the government's ability to vet the qualifications of public employees on whom the nation's security depends.

"When she was running around telling people to call her 'Dr. Callahan,' I asked where she got her degree," says Richard Wainwright, a computer specialist who worked for Callahan at Labor for two years. "When I found out, I laughed."

It turns out Callahan got her precious sheepskin from Hamilton University. Not Hamilton College, the highly competitive school in Clinton, New York, but Hamilton University, the unaccredited fee-for-degree "distance learning" center in Evanston, Wyoming, right on the Utah border. Such diploma mills frequently use names similar to those of accredited schools.

Unbeknown to Callahan, Wainwright had once lived near the small town of Evanston (population: 10,903) and knew it well. As a student at the University of Utah in Salt Lake City, where he received his bachelor's degree years ago, he had made beer runs to Evanston, less than 60 miles away. He knew there were no universities there, or at least none worth attending. "Evanston doesn't have much but a few motels and liquor stores," he tells me. "I looked up Hamilton University on the Web and saw it was an old Motel 6, and I knew it was bogus."

Indeed, the old motel lobby is clearly visible in a photo of the main entrance to Hamilton posted on the home page of the school's Web site at hamilton-university.edu. Click on "Campus," and you'll find more photos of the converted motel, as well as another small building on the campus, shot from a sharp angle to make it appear large and august.

If the other building looks like a church, that's no illusion. It is a church--sort of. Callahan's alma mater is run by the Faith in the Order of Nature (FION) Fellowship Church, also in Evanston. In fact, the church is headquartered at the same address as Hamilton, which was organized as a "nonprofit theocentric institution of higher learning" in 1976 and claims a religious tax exemption.

Student of Nature

Here's where it really gets weird. FION believes all life forms, including bugs and trees, are created equal and should be treated with equal respect. It feels the same way about education.

"We accept all education as equal in Nature," according to the church's stated doctrine. "We offer recognition and special designations to those who have achieved higher levels of understanding regardless if obtained naturally or formally." Apparently that's how it got into the diploma business. FION's Web site describes Hamilton University as "a Nature-based institution of higher learning, which grants university level degrees that are based in whole or in part of [sic] education obtained through Nature." Since there's little, if any, coursework required, call it education by osmosis.

But this Nature isn't free. Tax-exempt Hamilton, with a staff of three, charges a flat fee of...