Will Returns $12,000 Paid to Former Employee

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WASHINGTON--Madeleine C. Will, an assistant secretary in the Education Department, has agreed to pay the federal government more than $12,000 to settle a dispute involving charges that a former employee in her office continued to be paid a government salary four months after resigning.

In the agreement she signed with the U.S. Attorney's office on May 18, Ms. Will, who heads the office of special education and rehabilitation services, denied any wrongdoing in the matter. She agreed, however, to pay back most of the $15,000 salary paid in 1985 and early 1986 to Elease Greenhalg, who was a special assistant to Ms. Will's former deputy, Joan Standlee.

Ms. Greenhalgh also will pay $1,000, and Ms. Standlee has agreed to pay back $2,000, Justice Department officials said.

"The settlement was made solely because Ms. Will did not want herself or her administration impugned by any question of impropriety,'' said Thelma Leenhouts, a spokesman for the assistant secretary. Ms. Will has declined further comment.

Ms. Greenhalgh left the department in November 1985, and Ms. Standlee resigned about four months later, after she had become the subject of an investigation by the department's office of the inspector general.

It was not clear, from interviews last week, whether Ms. Standlee was being investigated because of the overpayment allegations or other matters. But Linda Pence, Ms. Standlee's lawyer, said she expected Inspector General James Thomas to close the investigation within a few weeks.

She said Ms. Standlee is now working part time for a retail establishment in Florida.

"All she wants to do is put that chapter of her life behind her,'' Ms. Pence said. She said Ms. Standlee, who has also denied any wrongdoing, would have had to pay more than the amount of her settlement just to fight the allegations in court.

Government sources said Ms. Will had signed at least one document authorizing pay for Ms. Greenhalgh after she left--an allegation that Ms. Will denied.

"I think what happened is that she didn't pay attention to what was going on,'' said a former employee in Ms. Will's office who asked not to be named.

In a prepared statement, Secretary of Education William J. Bennett said: "The government has been compensated. I have full confidence in Ms. Will and that confidence is shared by the special-education community.''

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