Accepting Gifts from Prohibited Sources

Below is a summary of a MSPB case in which a supervisor solicited drug samples from a prohibited source.  Two points of interest in this case are one, that on appeal the Board sustained all of the agency's charges and did not find the Standards of Conduct a mere technicality like the administrative judge; and two, the MSPB credited the agency's ethics training program on putting the employee on notice regarding potential violations in this area.

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.