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MSPB Sustains Agency Penalty
for Ethics Violation:
In the MSPB case copied below, the board sustained
an agency deciding official who determined that
a 45-day suspension and demotion was appropriate
for an employee who solicited and accepted gifts
from outside sources, which were prohibited by
the Standards, and refused to cooperate in an
investigation. Surprisingly, the ALJ who first
heard the case ruled that no penalty was appropriate.
The Board overruled the ALJ in issuing this opinion.
ALAM SHER, Appellant, v. DEPARTMENT OF VETERANS
AFFAIRS, Agency.
DOCKET Number BN-0752-02-0027-I-2
MERIT SYSTEMS PROTECTION BOARD
97 M.S.P.R. 232; 2004 MSPB LEXIS 1824
September 16, 2004
BACKGROUND
Effective November 4, 2001, the agency demoted
the appellant from his GS-13 Chief of Pharmacy
Service position at its facility in Togus, Maine
(Togus), to a GS-12 Clinical Pharmacist position,
and suspended him for 45 days, based on charges
that he solicited and received free pharmaceuticals
in violation of 5 C.F.R. 2635 and that he refused
to provide information relating to an administrative
investigation in violation of 38 C.F.R. 0.735-12.
He filed his appeal, raising affirmative defenses
of discrimination based on religion (Muslim) and
national origin (Pakistani). The administrative
judge issued an initial decision that sustained
the charges of soliciting and receiving free pharmaceuticals,
but did not sustain the charge of refusing to
provide information in an administrative investigation.
The administrative judge further found that the
appellant did not establish his affirmative defenses
of religious and national origin discrimination.
The administrative judge did not affirm the penalty
of demotion and suspension, finding that no penalty
was warranted under the circumstances of the case.
The agency filed a petition for review. The Board
granted the agency's petition for review, sustained
the initial decision as to the charges that the
administrative judge upheld, but reversed the
initial decision as to the charge that the administrative
judge did not sustain and the penalty determination.
ANALYSIS
According to the notice of proposed removal, on
June 16 and August 16, 2000, the appellant signed
a "Free Goods Requisition" form to receive
the drug Lipitor in 10-mg., 20-mg., and 40-mg.
doses. In December 2000, he informed a Hospital
Representative for Pfizer, Inc., that he was taking
40 mgs. of Lipitor and asked the representative
if he had any 40-mg. Lipitor samples. On January
25, 2001, he informed a Pfizer salesman that he
was using Lipitor in the 40-mg. dosage and asked
if the salesman had some Lipitor for him. On January
29, 2001, agency investigators found, in the appellant's
briefcase and his office, 672 10-mg. tablet samples
of Lipitor which he had received from the Pfizer
hospital representative and the salesman. The
agency charged that these actions violated 5 C.F.R.
? 2635, Standards of Ethical Conduct for Employees
of the Executive Branch, Subparts A and B, General
Provisions and Gifts from Outside Sources.
In sustaining the charges, the administrative
judge found that the Lipitor met the definition
of a "gift" and that Pfizer was a "prohibited
source," i.e, an entity doing business with
the agency. Since the appellant did not challenge
the administrative judge's determination to sustain
these charges and, after reviewing the record,
the Board sustained the charges pertaining to
soliciting and receiving Lipitor.
The Board, however, reserved and sustained the
charge of refusing to provide information in an
administrative investigation. The Board cited
to Weston v. Department of Housing & Urban
Development, 724 F.2d 943, 947-48 (Fed. Cir. 1983),
in which the court stated:
The fifth amendment privilege against compulsory
self-incrimination may be asserted in an administrative
investigation to protect against any disclosure
that an individual reasonably believes could be
used in his own criminal prosecution or could
lead to other evidence that might be so used.
Kastigar v. United States, 406 U.S. 441, 444-45,
92 S.Ct. 1653, 1656, 32 L.Ed. 2d 212 (1972). In
addition, the threat of removal from one's position
constitutes coercion which renders any statements
elicited thereby inadmissible in criminal proceedings
against the party so coerced. Garrity v. New Jersey,
385 U.S. 493, 500, 87 S.Ct. 616, 620, 17 L.Ed.
2d 562 (1967). Nevertheless, when an employee
is once granted immunity through this so-called
Garrity exclusion rule, he may be removed for
failure to cooperate with an agency investigation.
Gardner v. Broderick, 392 U.S. 273, 278, 88 S.
Ct. 1913, 1916, 20 L. Ed. 2d. 1082 (1968); [**9]
Uniformed Sanitation Men Ass'n v. Commissioner
of Sanitation, 392 U.S. 280, 284-85, 88 S.Ct.
1917, 1919-20, 20 L.Ed. 2d 1089 (1968). Invocation
of the Garrity rule for compelling answers to
pertinent questions about the performance of an
employee's duties is adequately accomplished when
that employee is duly advised of his options to
answer under the immunity granted or remain silent
and face dismissal.
The Board found that the U.S. Attorney's Office
sufficiently provided the appellant with "use"
immunity from prosecution under the Garrity rule
based on any statement that he made during any
subsequent interview regarding "the conduct
for which [the appellant] was being considered
for prosecution." There was no other activity
that the agency was investigating. Furthermore,
the assurance came from the U.S. Attorney and
not merely from the agency.
In light of sustaining all the charges, the Board
found that the agency's penalty of a demotion
and a 45-day suspension was reasonable under the
circumstances.
When the Board sustains all of an agency's charges,
it will give deference to the agency's decision
regarding a penalty unless that penalty exceeds
the range of allowable punishment specified by
statute or regulation, or the penalty is "so
harsh and unconscionably disproportionate to the
offense that it amounts to an abuse of discretion."
Parker v. U.S. Postal Service, 819 F.2d 1113,
1116 (Fed. Cir. 1987); see Lachance v. Devall,
178 F.3d 1246, 1251 (Fed. Cir. 1999) (the Board
may reject those penalties it finds abusive, but
may not infringe on the agency's exclusive domain
as workforce manager). This is because the Board
must defer to the agency's discretion in exercising
its managerial function of maintaining employee
[**15] discipline and efficiency. Stuhlmacher
v. U.S. Postal Service, 89 M.S.P.R. 272, P20 (2001);
Lewis v. General Services Administration, 82 M.S.P.R.
259, P5 (1999). "It is not the Board's function
to displace management's responsibility, but to
ensure that managerial judgment has been properly
exercised." Lewis, 82 M.S.P.R. 259, P5.
Mitigation of a penalty by the Board is only appropriate
where the agency failed to weigh the relevant
factors, or the agency's judgment clearly exceeded
the limits of reasonableness. Id. The deciding
official need not show that he considered all
the mitigating factors in determining the penalty.
Wynne v. Department of Veterans Affairs, 75 M.S.P.R.
127, 135 (1997). The Board will independently
weigh the relevant factors only if the deciding
official failed to demonstrate that he considered
any specific, relevant mitigating factors before
deciding upon a penalty. Id. If the penalty is
unreasonable, the Board will mitigate it to the
maximum reasonable penalty. Payne v. U.S. Postal
Service, 72 M.S.P.R. 646, 651 (1996).
The administrative judge concluded that the appellant
"could not be faulted for honestly believing
that there was absolutely nothing wrong with the
practice." The administrative judge further
credited the testimony of several witnesses that
they did not consider samples of drugs as a gift.
He found that soliciting and receiving the samples
constituted no more than a technical violation
of the regulations. He found that there was no
evidence that the agency's reputation or integrity
was affected or that any adverse consequence resulted
from the appellant's actions. The administrative
judge determined that no penalty was warranted.
The Board did not agree.
The Board found that the deciding official properly
evaluated the Douglas factors. The regulation
at issue, Standards of Ethical Conduct for Employees
of the Executive Branch, 5 C.F.R. ? 2635, Subpart
B, Gifts from Outside Sources, under which the
agency charged the appellant, provides that "an
employee shall not, directly or indirectly, solicit
or accept a gift . . . from a prohibited source."
n3 5 C.F.R. ? 2635.202(a)(1). A "gift"
is defined as "any gratuity, favor, discount,
entertainment, hospitality, loan, forbearance,
or other item having monetary value." 5 C.F.R.
? 2635.203(b). A "prohibited source"
includes "any person who . . . does business
or seeks to do business with the employee's agency."
5 C.F.R. ? 2635.203(d)(2).
n3 An employee may accept an unsolicited gift
of $ 20 or less in value "per source per
occasion, provided that the aggregate market value
of individual gifts received from any one person
under the authority of this paragraph shall not
exceed $ 50 in a calendar year." 5 C.F.R.
? 2635.204(a). The appellant has not denied that
he solicited the sample Lipitor tablets. Thus,
the $ 20 exception does not apply.
The record showed that the appellant attended
a training session on the Standards of Ethical
Conduct and received a pamphlet explaining those
Standards generally in August 2000. The agency
submitted a copy of the pamphlet that was distributed
at the training session. Among the fourteen Principles
of Ethical Conduct for Federal Employees set forth
in the pamphlet is the following: "An employee
shall not, except as permitted by the Standards
of Ethical Conduct, solicit or accept any gift
or other item of monetary value ...." The
pamphlet describes a gift as "generally,
anything of monetary value." The pamphlet
further gives examples of unsolicited gifts that
may be accepted, including a $ 15 pen from a person
whose license application the employee is processing,
a birthday gift from a brother, and tickets worth
$ 16 to a show from a company that applied to
the agency for a grant. The pamphlet does not
specifically mention drug samples or samples of
any kind from a company doing business with the
agency. Additionally, witnesses testified without
exception that they did not recall the ethics
training session including any information that
such gifts were prohibited. Even so, The Board
found that the plain language of the Standards
and the explanatory pamphlet were sufficient to
put employees on notice that they were not to
solicit items of monetary value from companies
doing business with the agency, including pharmaceutical
companies.
The agency's table of penalties provided that
a penalty from a reprimand to a removal is appropriate
for a first offense of accepting gifts or gratuities
from individuals or firms doing business or having
contractual relations with the agency. Additionally,
the United States Court of Appeals for the Federal
Circuit has held that removal is warranted when
an employee fails to participate in an agency
investigation when, as here, criminal prosecution
had already been declined. Weston, 724 F.2d at
946-48. Further, the Board has found removal to
be a reasonable penalty where the appellant improperly
accepted cash payments and interfered with a an
official investigation, despite his 17 years of
federal service and lack of prior discipline.
Hayes v. Department of Labor, 65 M.S.P.R. 214,
219-20 (1994). Considering the circumstances of
this matter, and the relevant case law, The Board
found that a demotion and 45-day suspension is
a reasonable penalty for the appellant's misconduct.
MSPB Sustains Agency Penalty for Ethics Violation:
In the MSPB case copied below, the board sustained
an agency deciding official who determined that
a 45-day suspension and demotion was appropriate
for an employee who solicited and accepted gifts
from outside sources, which were prohibited by
the Standards, and refused to cooperate in an
investigation. Surprisingly, the ALJ who first
heard the case ruled that no penalty was appropriate.
The Board overruled the ALJ in issuing this opinion.
ETHICS NEWS AND INFORMATION JANUARY 14, 2005
OGE PUBLISHES NOTICE OF THE OPPORTUNITY TO COMMENT
ON IT'S STUDY OF THE
PUBLIC FINANCIAL DISCLOSURE PROCESS FOR EMPLOYEES
OF THE EXECUTIVE
BRANCH
OGE has published in the Federal Register a notice
of the opportunity to comment on its study of
the public financial disclosure process for employees
of the executive branch. The President directed
OGE, in Section 8403 of the Intelligence Reform
and Terrorism Prevention Act of 2004, Public Law
108-458 (December 17, 2004), to provide a report
to Congress within 90 days evaluating the public
financial disclosure process for employees of
the Executive Branch. Comments are due by Feb.
11, 2005. Please see 70 FR 2407 dated January
13, 2005.
http://www.usoge.gov/pages/laws_regs_fedreg_stats/fedreg_issuances/2005fedreg.html
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