MSPB Cases from the Fall

As we ring in the New Year, here are some interesting cases to close out 2005 issued by the Merit Systems Protection Board in the Fall of 2005 to include one involving an IRS employee removed for not properly filing her Federal Tax Returns.

Thompson v. Department of Labor-The Board found the penalty of removal for the appellant for twenty-six unauthorized cash withdrawals from automated teller machines using her government travel card, totaling $ 1,619.60--though harsh (she had 30 years of Federal service at the time of her removal)--was within the limits of reasonableness.

Samar v. Department of Navy-The Board found that the appellant's use of the government vehicle to drive to breakfast was not primarily for the benefit of the agency, and therefore, the "minor personal use" exception does not apply in this case.

Dye v. Department of Air Force-The appellant violated the agency’s leave instruction on multiple occasions using sick leave to account for his absence from his civilian position. He also stipulated to four other charges to include misuse of his government travel card for personal use of a whop-ping 85 times amassing a total of over $ 5,000.00 in personal charges. The Board found such mis-use egregious, and that this one charge, standing alone, warranted removal.

Gayle v. Department of Treasury-The appellant was removed for failure to timely file a personal Federal Income Tax Return, Understatement of Federal Tax Liability, and Failure to properly file her Federal Income Tax Return. The Board stated in this case that, "as an employee of the agency the appellant was required to adhere to the Standards of Ethical Conduct for Employees of the Ex-ecutive Branch. Section 2635 of Title Five requires that employees satisfy in good faith their obliga-tions as citizens. There is no question that the IRS requires the public, including its own employees to timely file their tax returns and truthfully disclose their taxable income."

BARBARA THOMPSON, Appellant, v. DEPARTMENT OF LABOR, Agency

DOCKET NUMBER NY-0752-05-0127-I-2

2005 MSPB LEXIS 7095

November 1, 2005

SUMMARY

Ms. Thompson challenged the agency's decision to remove her from the position of Equal Opportu-nity Specialist, GS-12, Office of Federal Contract Compliance Programs (OFCCP), New York Dis-trict Office, New York, New York.

On August 19, 2004, Brenda Montgomery, the appellant's immediate supervisor, issued her a notice of proposed removal. The proposal was based on one charge: misuse of the federal govern-ment travel credit card. There were twenty-six specifications under the charge; Ms. Montgomery alleged that during the period from August 21, 2002 through April 30, 2004, the appellant used the card to make twenty-six unauthorized cash withdrawals from automated teller machines. The al-leged withdrawals varied in amount and totaled $ 1,619.60.

Having reviewed the evidence presented, the Judge found that the appellant made each of the cash withdrawals cited in the twenty-six specifications and that the withdrawals totaled $ 1,619.60. Even if one were to find that she did not know that the credit card was to be used only for official travel, the point remains that--other than her assertions--there was no evidence indicating she used the cash she withdrew for work-related purchases. The Appellant acknowledged that she did not have any receipts. There was no evidence linking any of the twenty-six cash withdrawals to any particular purchase. Moreover, there was no evidence linking any of the cash withdrawals to any visits she made to federal contractors' facilities.

An agency may take an action against an employee only for such cause as will promote the effi-ciency of the service. The Judge found that the agency established that an adverse action against the appellant promoted the efficiency of the service. The deciding official testified that the appel-lant's repeated misuse of the credit card caused him to lose confidence in her. He noted that she held a position of responsibility. He noted that she had access to confidential information such as contractors' payroll records and personnel records.

The Board has articulated factors to be considered in determining the propriety of a penalty--factors such as the nature and seriousness of the offense, the employee's past disciplinary record, and the supervisor's confidence in the employee's ability to perform his assigned duties. Douglas v. Veterans Administration, 5 M.S.P.R. 280, 305-06 (1981). The Board places primary importance on the nature and seriousness of the offense, its relation to the appellant's duties, position, and respon-sibilities. See Bahrke, 98 M.S.P.R. at 522-23.

In the instant case, the misconduct was serious. See Brown v. Department of the Army, 96 M.S.P.R. 232, 236 (2004), review dismissed, 115 Fed. Appx. 63 (Fed. Cir., Oct. 29, 2004). More-over, it was repeated; there were twenty-six withdrawals of cash. Furthermore, the amount was sig-nificant; the withdrawals totaled $ 1,619.60.

Another aggravating factor was a June 21, 2002 reprimand. The appellant was on notice that misuse of the card could result in the termination of her employment.

As for mitigating factors, the appellant had thirty years of federal service at the time of her re-moval. The Deciding Official testified that he considered her years of service. He testified that her performance was rated as fully successful; he read some of her reports; and he found that they were well written. He testified, however, that her misconduct caused him to lose confidence in her. In light of the foregoing, the Judge found that the penalty of removal--though harsh--was within the limits of reasonableness.

MARK H. SAMAR, Appellant, v. DEPARTMENT OF THE NAVY, Agency

DOCKET NUMBER SF-0752-05-0711-I-1

2005 MSPB LEXIS 6471

October 11, 2005

SUMMARY

The appellant appealed the agency's decision to suspend him for 30 days without pay from his position of High Voltage Electrician, WG-10.

A charge of willful misuse of a government vehicle requires the agency to prove not only that an employee used a vehicle for a nonofficial purpose, but also that the misuse of the vehicle was will-ful. The employee must have had actual knowledge that the use would be characterized as unoffi-cial or have "acted in reckless disregard as to whether the use was for nonofficial purposes." Kimm v. Department of the Treasury, 61 F.3d 888, 891 (Fed. Cir. 1995).

The appellant was a High Voltage Electrician, WG-2810-10, for the Department of the Navy, Naval Base Ventura County (NBVC), Point Mugu, California. NBVC consists of three installa-tions: Point Mugu, Port Hueneme and San Nicolas Island. The appellant's primary duty site was Point Mugu. Under Naval Base Ventura County Instruction 11240.1A, dated May 26, 2004 (In-struction), paragraph 4, the use of government vehicles for meals on an employee's primary duty site was not authorized. The Instruction notified civilian employees that willful misuse of a gov-ernment vehicle (GOV) for other than official purposes subjects them to a minimum 30 day suspen-sion, consistent with the statute. On August 4, 2004, the appellant signed a document acknowledg-ing that he received a copy of the Instruction.
On September 30, 2004, the appellant reported for work at Point Mugu around 6:30 a.m. and picked up a blue utility bed truck. It was undisputed that the vehicle driven by the appellant was a passenger motor vehicle and government vehicle as described in 31 U.S.C. § 1349(b) and the In-struction. The appellant then drove the vehicle to the Point Mugu galley "for food." Ensign James Shefchik, the NBVC Duty Officer of the Day, noticed the vehicle parked at the galley and contacted Public Works, asking that the office determine to whom the vehicle was assigned. Public Works subsequently determined that the vehicle was assigned to the appellant.

The appellant argued that he never received a copy of the Instruction, which specifically prohib-its the use of GOVs for meals on an employee's primary duty site. Thus, the appellant argued that any such misuse could not have been willful. Further, because he was always on call for emergen-cies and eating at the galley on base, the appellant argued that such a use did not constitute a nonof-ficial use of the GOV. As such, he was using the vehicle in a duty status, similar to that anticipated for the Command Duty Officer, or others described in paragraph 7 of the Instruction. Finally, be-cause he has the discretion to take breaks, and he needed to eat at some point, driving his GOV to the galley for breakfast was within the scope of his official duties.

The undisputed record reflected that on September 30, 2004: (1) the appellant's primary duty site was Point Mugu; (2) the appellant drove the GOV to the Point Mugu galley for breakfast; (3) the Instruction explicitly stated that GOVs could not be used for meals on an employee's primary duty site; (4) the appellant signed in to eat breakfast at the Point Mugu galley; (5) the appellant ate breakfast at the Point Mugu galley; (6) there was no base emergency; (7) the appellant was not con-tacted on an emergency basis; and (8) there was no evidence that the appellant had permission from his supervisor to use the GOV to drive to the Point Mugu galley for breakfast. There was no evi-dence that the appellant was authorized by the agency to utilize the GOV for the purpose of driving to the galley, nor was there any evidence that driving the GOV to the galley was in furtherance his duties as a high voltage electrician. With regard to the appellant's argument that he was authorized to use the GOV in this manner pursuant to paragraph 7 of the Instruction, the appellant presented no evidence that he was the Base Command Duty Officer, nor did he present any evidence showing that he was required to be "on call constantly" in the manner described by exception.

Record evidence belied the appellant's contention that he never received a copy of the Instruc-tion. In particular, record evidence established that on or about August 4, 2004, the appellant signed a document stating that he "received" a copy of the Instruction. Further, witnesses at the hearing provided detailed testimony about how they separately informed the appellant and other employees, about the prohibition against driving GOVs to the galley on their primary duty station. Taking all of these factors into consideration, the Judge found that the appellant knew that his use of the GOV on September 30, 2004 was not for an official purpose, or acted in reckless disregard as to whether the use was for a nonofficial purpose.

In some cases involving alleged violations of 31 U.S.C. § 1349, the Board has held that, if use of a government vehicle involved minor personal use, a charge of willful misuse may not be sus-tained under circumstances indicating that the vehicle was used primarily to further agency busi-ness. However, in cases more analogous to the appellant's, the Board found violations of the stat-ute. In Garcia v. Department of the Air Force, 34 M.S.P.R. 539 (1987), the Board affirmed the re-moval of an Air Force journeyman mechanic who used his Air Force vehicle to go on work breaks on two occasions. In Hornbuckle v. Department of the Army, 45 M.S.P.R. 50 (1990), overruled by Walsh v. Department of Veterans Affairs, 62 M.S.P.R. 586 (1994), recons. denied, 67 M.S.P.R. 96 (1995), aff'd sub nom. Erickson v. Merit Systems Protection Board, 89 F.3d 1575 (Fed. Cir. 1996), rev'd sub nom. LaChance v. Erickson, 522 U.S. 262 (1998), the Board affirmed the demotion of an Army foreman for two misconduct charges, one of which was misusing his Army vehicle to stop and pick up lunch for his subordinates. The Board in Hornbuckle noted that the section 1349 viola-tion was "serious" in light of the law's range of penalties, from a minimum "one-month suspension without pay to summary removal." Id. at 53. Finally, the Judge noted that the agency's Instruction specifically prohibited the appellant from using the GOV for meals on his primary duty site. See, e.g., Madrid v. Department of the Interior, 37 M.S.P.R. 418, 423 (1988). After reviewing the record evidence, the Judge found that the appellant's use of the GOV to drive to the Point Mugu galley for breakfast was not primarily for the benefit of the agency, and therefore, the "minor personal use" exception does not apply in this case. Therefore, the Judge affirmed the 30-day suspension.

STEVE A. DYE, Appellant, v. DEPARTMENT OF THE AIR FORCE, Agency

DOCKET NUMBER AT-0752-05-0660-I-1

2005 MSPB LEXIS 6041

September 30, 2005

SUMMARY

The appellant was removed on six misconduct charges. The parties stipulated to four charges. With regard to the disputed charges, the agency alleged in Charge 2 that the appellant violated the agency’s leave instruction on multiple occasions during the calendar years 2001, 2002, and 2003 by using sick leave to account for his absence from his civilian position at CENTCOM in April, July, August, September, October, November, and December 2001, during periods in which the appellant was serving active-duty military tours.

The appellant presented no evidence to refute the agency's overwhelming evidence that he, in-deed, claimed sick leave for all of the periods of time that the agency alleges he was serving on ac-tive military duty as cited in the specification to this charge. He merely testified that he did not know it was wrong for him to take sick leave while on active military duty. The appellant testified that he has been in federal service for 20 years, 10 1/2 years in federal civil service and approxi-mately 9 1/2 years in the reserves. The Judge found it inherently improbable that in 20 years of combined federal service, the appellant would not know that it was wrong for him to claim sick leave from his civil service position while serving on active military duty. See Hillen v. Department of the Army, 35 M.S.P.R. 453, 459 (1987). Thus, The Judge not believe the appellant's testimony in this regard.

In Charge 3, the agency accused the appellant of committing larceny by false pretense in con-nection with the temporary duty assignment for training he had at Keesler Air Force Base, Missis-sippi. The appellant does not dispute that he received the three interim payments reflected in charge three on the dates stated in the charge. Likewise, the appellant does not dispute that he failed to in-clude these amounts on his final travel claim, which he filed at Dobbins Air Force Base, Georgia, on August 7, 2003. The appellant claims that his failure to include these amounts in block 9 of the DD Form 1351-2, was not intentional since he had never before completed a travel voucher that in-cluded his receipt of interim payments for temporary duty assignment.

In order to sustain the charge of larceny, the agency must prove a taking and possession of an-other's property in a manner inconsistent with the owner's rights and benefits, with an intent to per-manently deprive the owner of the possession or use of the property. See Peck v. Department of De-fense, 75 M.S.P.R. 244, 248 (1997). With regard to the element of "intent," it is hornbook law that a criminal intent or mens rea is necessary to sustain the charge of theft or larceny. Id. "Under the gen-eral rule, if the existence of a state of mind is incompatible with the intent to steal it will preclude in conviction of larceny." See id., citing 52A C.J.S. Larceny § 25a., p. 447. A taking under a mistake of fact is not larceny.

Therefore, the Judge found that, while the appellant clearly failed to reflect his receipt of the in-terim payments he received on the DD Form 1351-2, which resulted in his receipt of an overpay-ment on his travel reimbursement, the agency failed to prove that such failure by the appellant was done with the requisite intent necessary to sustain a charge of larceny. Accordingly, the found that charge 3 was not sustained.

The Judge considered the testimony of Colonel John J. Diamond, the deciding official. Colonel Diamond testified to the highly sensitive nature of his command's mission, to include its active in-volvement in the prosecution of the nation's present war with Iraq. Colonel Diamond testified that the highly sensitive nature of the command's mission demands that his staff members be dependable and trustworthy. He testified that his trust and confidence in the appellant has been completely eroded, and that any one of the charged offenses could support removal. I agree.

While it is true that the appellant stipulated to 4 of the 6 charges, several of the appellant's acts of misconduct are extremely serious. For instance, the appellant stipulated to charge 4, misuse of his government travel card. The agency's evidence is undisputed that the appellant misused his government travel card for personal use of a whopping 85 times amassing a total of over $ 5,000.00 in personal charges. The Judge found such misuse egregious, and that this one charge, standing alone, warranted removal.

The appellant was extremely remorseful for his misconduct and that did not go unnoticed. In addition, the Judge noted the appellant's noteworthy length of service as well as the fact that, prior to this instance, he had no prior disciplinary action in his record. Despite these otherwise notewor-thy accomplishments, the Judge not simply could not ignore the egregiousness of the sustained mis-conduct in this appeal. Thus, based on the foregoing, the Judge found that the agency-imposed pen-alty is not outside the bounds of reasonableness. The Judge, therefore, affirmed the removal.

SONIA H. GAYLE, Appellant, v. DEPARTMENT OF THE TREASURY, Agency

DOCKET NUMBER PH-0752-05-0077-I-2

2005 MSPB LEXIS 5271

September 23, 2005

SUMMARY

The appellant filed an appeal of an agency action that removed her from the competitive service position of Contact Representative, GS-0962-08-01, which she had occupied continuously for more than one year. The appellant was assigned as a full-time seasonal employee at the Internal Revenue Service (IRS), ACS Local Team 302 Seasonal, PSC South in Philadelphia, Pennsylvania. The ap-pellant had been an employee for approximately 6 and 1/2 years with the agency, and there was no record of prior discipline.

The appellant's removal was based on the following three reasons:

Reason 1: Failure to timely file a personal Federal Income Tax Return

Specification 1: You willfully failed to file your 1999 Federal Income Tax Return by April 17, 2000. You filed your return on December 29, 2000. You failed to show a rea-sonable cause for your non-compliance. Even if you did not willfully fail to timely file your personal Federal Income Tax Return, you still filed your return after the due date.

Reason 2: Understatement of Federal Tax Liability

Specification 1: You willfully understated the amount of tax due on your 2000 Federal Income Tax return. You were assessed additional taxes of $ 1,705.00 as a result of an underreporter contact. Your withholding was increased by 189.00. You entered into an installment agreement with the IRS on February 3, 2003. You had a balance due of $ 1,702.62 as of April 21, 2003. You failed to show a reasonable cause for your non-compliance. Even if you did not willfully understate the amount of tax due, you failed to properly file your 2000 Federal Income Tax.

Reason 3: You failed to properly file your 2001 Federal Income Tax Return

Specification 1: You timely filed your 2001 Federal Income Tax Return. However, af-ter submitting a $ 300.00 payment with your return, you had a balance due of $ 4,685.00. You entered into an installment with the IRS on May 9, 2002. Your account was considered fully paid on October 2, 2002.

The appellant was charged in the alternative with violating sections 1203(b)(8) or 1203(b)(9) of the Restructuring and Reform Act of 1998. Both sections of the statute provide that an agency em-ployee who willfully fails to file a tax return or willfully understates a Federal tax liability shall be removed, unless such failure is due to reasonable cause and not to willful neglect. Generally, will-fulness is a subjective standard that focuses on the knowledge of the taxpayer, not the knowledge of a reasonable person, and it does not require proof of an evil motive or bad faith. United States v. Grunewald, 987 F. 2d 531 (8th Cir. 1993); United States v. Jerde, 841 F.2d 818, 821 (8th Cir. 1988)(citing United States v. Pomponio, 429 U.S. 10, 12 (1976). If there is no admission by the ap-pellant, in these cases, willfulness must be established by circumstantial evidence. The agency cited to the case of United States v. Smith, 890 F.2d. 711, 715 (5th Cir. 1989) where willfulness has been inferred from the background of the individual, i.e., education and experience; and United States v. Dawes, 874 F.2d 746 (10th Cir. 1989), which addressed the issue and determined that it was proper to accept evidence of the prior timely filing of tax returns in determining willfulness.

The evidence of record fully supported the alternative charges as well. The appellant's admis-sions and the circumstances of the case supported a finding that the appellant's conduct was willful. Specifically, she was a GS-8 employee whose duties required knowledge of the fundamental princi-ples of tax laws. Her testimony disclosed that she was aware of the standards required by Restruc-turing and Reform Act of 1998, and she knew that she could be removed for a willful violation of Section 1203(b) of the Act. She did not show that her failures to and timely and properly follow the tax laws were due to reasonable cause and not to willful neglect.

On its face the Act requires that the prohibited act or omission be committed "in the perform-ance of the employee's official duties" or the penalty of mandatory removal will not apply. Id. As to this, the Board's reviewing court resolved this difficulty in James v. Tablerion, 363 F.3d 1352 (Fed.Cir. 2004), holding that a threat to audit for the purpose of extracting personal gain -- another of the prohibited acts or omissions listed in section 1203(b) -- "made 'in the performance of the em-ployee's official duties' means only that an IRS employee makes the threat." Id., at 1358. For the same reasons cited by the Court, the Judge found that a willful understatement of Federal tax liabil-ity and a failure to timely file a tax return are matters which are "in the performance of the em-ployee's official duties." This means that an IRS employee willfully understates her tax liability, fails to file her returns in a timely manner and fails to comply with tax requirements has committed these acts in the performance of her official duties. See id., at 1357-58. For all of the above reasons, the Judge found that the agency has shown that the appellant willfully violated Section 1203(b). The Judge found that she knowingly failed to file a timely income tax return in 1999, and that she understated her Federal Tax Liability on her 2000 return. The Judge found further that even if ac-tual knowledge had not been shown, at very least the appellant acted with reckless disregard for the truth by knowingly filing late returns and understating her tax liability. This would supply the requi-site intent, and would also preclude a finding of "reasonable cause" under section 1203(b)(9).

Normally the Board will review an agency's choice of penalty to determine whether it consid-ered all of the relevant factors, such as those enumerated in Douglas, 5 M.S.P.R. at 305-06, and ex-ercised management discretion within tolerable limits of reasonableness. Id., at 306. In this case, deciding official testified that once she had sustained the Section 1203(b) violation alleged in the appellant's case, and the Review Board had ruled out mitigation, she had no choice but to impose the appellant's removal; and for that reason, she did not consider the Douglas factors when choosing a penalty, either with respect to Reason I or Reason II.

As an employee of the agency the appellant was required to adhere to the Standards of Ethical Conduct for Employees of the Executive Branch. Section 2635 of Title Five requires that employees satisfy in good faith their obligations as citizens. There is no question that the IRS requires the pub-lic, including its own employees to timely file their tax returns and truthfully disclose their taxable income. The preponderant evidence established, that for the tax years noted in the proposal to re-move, Reasons 1 and 2, and sustained in the decision, the appellant willfully filed an untimely re-turn and under-estimated her tax liability. In instances such as this, the agency had good reason to discipline the appellant and removal based on sustaining the alternate charge was warranted.

The appellant argued that removal was too severe for the misconduct and the agency did not seem to take into consideration the fact that she had no prior discipline. However, in this case, re-moval is required by law. The system created by Congress to discourage IRS employees from en-gaging in certain forms of misconduct makes sense. The statute sets forth a strict rule of conduct and if any of the prohibited acts are committed, removal is the penalty, subject only to amelioration by the agency itself, with no judicial review of the decision to grant or withhold relief from the de-fault penalty of removal.
There is a question of whether it is proper to apply Board caselaw in cases such as these, but it is one that the Court has dealt with. In an unrelated case, James v. Tablerion, 363 F.3d 1352 (Fed.Cir. 2004), the Court held that a threat to audit for the purpose of extracting personal gain -- another of the prohibited acts or omissions listed in section 1203(b) -- "made 'in the performance of the em-ployee's official duties' means only that an IRS employee makes the threat." Id., at 1358. For the same reasons cited by the Judge found that failure to timely file a Federal Tax Return and willful understatement of Federal tax liability is in the performance of the employee's official duties and the charge means that an IRS employee like the appellant "willfully" fails to file a timely return and willfully understates her tax liability.

Here, the mitigating information were considered and rejected by the Commissioner before the action took place. The application of Douglas in this setting would conflict with "the policy of strict liability" established under the Act, whereby "if any of the prohibited acts are committed" -- including willful underreporting of Federal tax liabilities, without reasonable cause -- "removal was the penalty, subject only to amelioration by the agency itself, with no judicial review of the decision to grant or withhold relief from the default penalty of removal."