603 F.2d 182 | Ct. Cl. | 1979
delivered the opinion of the court:
This civilian adverse action case is before us on the parties’ cross-motions for summary judgment. Having heard oral argument and having carefully reviewed the administrative record and submissions of the parties, we deny plaintiffs motion for summary judgment, grant defendant’s cross-motion for summary judgment, and dismiss the petition.
Plaintiff, Leroy L. Wise, was employed as a criminal investigator (special agent) with the Internal Revenue Service (IRS or agency) for some 15 years; his record was apparently unblemished. On December 4,1975, he received a notice of proposed adverse action for his removal, signed by the Chief of the Intelligence Division of the Springfield (Illinois) District, IRS. Reasons for the proposed removal were three—
(I) that plaintiff had misused Government funds because he had not obtained advance approval of expenditures for which he sought reimbursement from the Imprest Fund Account;
(II) that plaintiff failed to comply with section 9373.1 of the Internal Revenue Service Regulations regarding the identity of informants; and
(III) that plaintiff made certain intentionally false or misleading statements in matters of official interest.
On December 30, 1975, plaintiff replied in writing to the allegations in the notice. Thereafter, plaintiff was discharged on the basis of a determination' by the agency that the charges were true. The decision became effective February 6, 1976. At the time of his removal, plaintiff was a GS-12 (step 5) special agent with an annual salary of $21,970.
Plaintiff thereupon perfected a timely appeal to the United States Civil Service Commission, Federal Employee
Background
This case arises from the use of confidential informants in the Springfield District of the Internal Revenue Service. Plaintiff, as a special agent with the Intelligence Division, in the course of planning and conducting tax evasion investigations, was required to develop sources of investigative information. Among these sources is the "confidential informant,” that is, one who furnishes information on the expectation that his identity will not be disclosed. Special agents rely greatly on such informants to perform their jobs, and they will generally go to great lengths to protect informants’ identities. Indeed, the Internal Revenue Manual (IRM) provides that if a special agent is directed by a court, under pain of contempt, to divulge the true name of an informant who has been promised strict confidentiality, he should, under certain circumstances, maintain the confidentiality, pending instructions from his superiors.
Prior to 1972, the use of confidential informants in the Springfield District was rare. Max E. Hollenbeck, Assistant
Walsh also instituted a system for reporting the true name of the informant. The agent would request a "confidential informant number” from his group supervisor; the supervisor would assign a number to the agent and give the agent a pink envelope and a blank piece of paper. The agent would place the informant’s name on the paper, put the slip of paper in the envelope, and seal the envelope. The assigned number was printed on the outside of the envelope, and the agent’s name was placed opposite the number of a separate "control” list. The envelopes were entrusted to the supervisors. Plaintiffs supervisor, Gerald Schaefer, kept the envelopes locked in a filing cabinet in his office. The purpose of the system was to protect the agent, primarily where an agent was accused of improper association with a "nefarious” character or in the event an agent were killed or injured in the line of duty. Although there is no direct evidence that special agents, including plaintiff, were expressly instructed that an informant’s true name had to be placed in the pink envelope, there is' ample testimony that the use of a fictitious name would defeat the whole purpose of the system instituted by Walsh.
In the fall of 1973, plaintiff developed a confidential informant known as "SP-59.” SP-59 was a former special agent in the Springfield District who had left the IRS earlier in 1973 to become an employee of the Illinois State Department of the Treasury in the Income Tax Division.
The two couples went to dinner on four occasions in late 1973 and early 1974, and, although no tax matters were discussed during the dinners because their wives were present, after dinner, at SP-59’s home, plaintiff obtained considerable and useful tax-related information. After each such meeting plaintiff submitted an "Imprest Fund Reimbursement Voucher” and "Memorandum of Activities” to his group supervisor, Gerald Schaefer.
In April 1975 the Inspection Division of the IRS initiated an audit of the Imprest Fund Account, undertaken at the
Schaefer, then Acting Assistant Chief, directed Robert Brady, a special agent serving as acting group supervisor, to prepare a list setting forth the informant number, the special agent to whom the number was assigned, and the informant’s real name. After assuring himself of his authority to require the agents to disclose an informant’s true identity, Brady called each agent in the group into the group supervisor’s office. He explained the purpose of the order to reveal the names and showed each agent a photocopy of the manual where he had highlighted the portions relating to the disclosure of a confidential informant’s identity. He then requested the agent to open the envelopes and read the names on the slips inside, which names he then recorded on the list for the Inspection Division. At least one special agent told him at the time the envelope was opened that the name inside was fictitious and volunteered to attempt to obtain the true name. Brady followed the same procedure with plaintiff and asked him if plaintiff had any objections to disclosing his informants’ identities, to which plaintiff replied that he did not. "Bud Hoskins” was the name on the slip of paper in the envelope marked "SP-59.” Brady did not ask plaintiff the specific question whether "Bud Hoskins” was SP-59’s real name, nor did plaintiff volunteer the information that "Bud Hoskins” was an alias, although he understood that the identity of informants was needed because of the audit.
Sometime during the week of May 12, 1975, Schaefer himself contacted plaintiff in order to obtain a "better first name” for Hoskins, since Inspection had been unable to locate him through tax returns or telephone directories. Although there is a conflict as to what was actually said, plaintiff clearly knew that Schaefer was trying to identify SP-59; he knew SP-59’s true identity; and he did not tell Schaefer SP-59’s true name. Sometime later, Schaefer asked plaintiff if he had any further information. Plaintiff replied that the informant normally called him, not the other way around.
I.
Plaintiff first attacks the FEAA decision on the ground that the sustained charges were not supported by substantial evidence.
We begin, of course, in full understanding of our limited role. Although an administrative determination not supported by substantial evidence cannot stand,
A. Reason II
Reason II, supported by a single specification,
While we adhere to the general principle that "[d]evia-tions between an agency’s putative charges for proposed adverse personnel actions and the grounds advanced by a hearing examiner as supportive of the adverse personnel action, are not to be cavalierly tolerated,”
B. Reason III
The more serious charge states that plaintiff made intentionally false statements on matters of official interest, in violation of "IRM 0735.1, Section 225.5, Handbook of Employee Responsibilities and Conduct.”
Specification 1.
Following each of the dinners attended by plaintiff, SP-59, and their wives, plaintiff submitted vouchers to his group supervisor requesting reimbursement from the
Every witness that testified concerning this question, including those called by [plaintiff], stated that it was extremely unusual for an agent to have his wife accompany him on an investigation. While there was disagreement as to whether or not advance approval must be obtained where only small amounts of money were expected to be involved and the agent was using his own funds, there was virtually no disagreement that a wife’s presence in such a situation should be mentioned when seeking reimbursement. [Plaintiff] must have full well realized that this was not an ordinary expense and, therefore, not one that was so normal and routine that it need not be mentioned when seeking reimbursement.***
We note first that the FEAA dismissed Reason I, relating to plaintiffs failure to obtain advance approval for expenditure of these funds (for which he would seek reimbursement), since advance approval was essentially a matter of judgment. Here, there is no specific internal requirement or regulation that an agent mention his spouse’s presence; this, too, was a "judgment call.” Even if it were "clearly unusual” for a wife to accompany her husband on an investigation, the charge is making an intentionally false statement, not simply failing to comply with an internal procedure, as in Reason II. If the evidence is not clear and convincing that plaintiff knew he should have mentioned his wife’s presence at the dinners, the specification cannot stand.
There is no evidence (other than the "clearly unusual” circumstances alluded to above) that there existed any requirement that a special agent do anything more than submit the voucher and a memorandum of activities. The vouchers themselves do not provide for breakdowns of expenses, but simply state that details in fact were
Specification 4.
A second allegation of intentional false statement reads:
On June 3, 1975, when being interviewed under oath by Inspector Kenneth W. Davidson, you stated that you were told by your former Group Supervisor, Thomas*118 Murphy, that fictitious names were acceptable in the envelope file system for the use of confidential informants. Mr. Murphy stated that he did tell you that fictitious names were acceptable for the receipt of monies paid to informants but that the envelopes used for their identify [sic] had to contain the true identity of the informants, if known.
The FEAA dismissed the second part of specification 4, finding that there was no support for Murphy’s statement that he had told plaintiff the envelopes had to contain the true identity of informants, if known. On the other hand, it upheld the first part because no one corroborated plaintiffs statement that Murphy had said fictitious names were acceptable. Without some proof, however, that plaintiffs statement under oath was something more than mistaken, the specification must fail.
Again, the charge is making an intentionally false statement. It is one thing to find plaintiff failed to comply with the requirement that true names, if known, be used; it is quite another to find that stating he thought fictitious names were acceptable was intentionally false.
Specifications 2 and 3.
We turn now to the most serious of the specifications under Keason III. These state in essence that plaintiff
Although there was a dispute between plaintiff and his supervisor as to exactly what was said on the first occasion, the FEAA thought it unnecessary to resolve that question since the specification did not purport to quote plaintiffs exact words; instead, it ruled that "[t]he agency need only show that [plaintiffs] words and actions were reasonably calculated to lead Mr. Schaefer to believe that [plaintiff] did not know Hoskins’ first name. [Plaintiffs] words did exactly that. Mr. Schaefer asked for a better name and [plaintiff] knew why the question was being asked.”
Although the parties essentially agree that plaintiff said what is attributed to him on the second occasion in specification 3, plaintiff argues that the statement is true on its face, or at least not inconsistent with an accurate description of plaintiffs and SP-59’s working relationship. The FEAA upheld the specification "[b]ased on [plaintiffs] admission that he could, and in fact did, contact SP-59, and the undisputed fact that [plaintiff] did know 'additional information on Hoskins’ which he did not disclose at that time, nor give any explanation at that time for his refusal to disclose.”
Plaintiff takes the position, however, that a statement— even though creating a false impression — which is true on its face should not be the basis for a dismissal; that, to be sufficient, a false statement must be affirmatively false, not merely false by negative inference. Thus, says plaintiff, he would have to have said flatly that he did not know the informant’s first name in order to have made a false
Initially, we must reject plaintiffs position that this court should adopt the standards applicable in prosecutions for criminally false statements or perjury. The employment relationship should be neither adversary nor hostile, and we decline to make it so by applying such an exacting standard.
We are not insensitive, however, to the ignominy attached to a dismissal based on the making of intentionally false statements. While it may be that a discharge proceeding is not to be equated in all respects with a criminal proceeding, nevertheless, when a Government employee’s job, and possibly his entire future, is at stake, the proof of his making an intentionally false or misleading statement should certainly be at least clear and convincing. Urbina v. United States, 180 Ct. Cl. 194, 214 (1967).
While we are sympathetic with plaintiffs dilemma— honoring his promise of confidentiality to his informant under the peculiar circumstances versus complying with a superior’s authorized request — there is no doubt from the record that plaintiff intentionally and deliberately misled his superior into believing that "Bud Hoskins” was SP-59’s
Plaintiffs informant was not an unsophisticated person in terms of knowledge of the workings of the Intelligence Division. Both plaintiff and his informant must have recognized that the supervisor could not have confidence in an agent’s professional conduct in investigations of taxpayers if the supervisor were unable to rely on the rectitude of the agent in their own discussions. The Internal Revenue Service sets a high priority on straightforward conduct, not only on the part of taxpayers, but by its employees as well. It is especially important that this standard be maintained in that part of the Revenue Service which conducts examinations which may lead to a taxpayer’s punishment for criminal acts. Any lesser standard will lead to a lack of public confidence in the Revenue Service and make its difficult task an impossible one.
When asked on May 16, 1975, if he had any additional information on Hoskins, plaintiff stated that he did not. This statement clearly misled Schaefer into believing that plaintiff did not at that time know the additional facts necessary for completion of the list which had been fully described to plaintiff. Plaintiff, in fact, had this additional information all along, and his statement that he did not
We have noted before that plaintiff does not contest the exact words he is alleged in specification 3 to have used. Plaintiff knew the sense in which Schaefer asked whether he had any additional information on Bud Hoskins; he nevertheless gave an answer which he knew to be false to the question as thus put in the sense thus intended. While his reply — "No, I haven’t. He hasn’t called me yet. He calls me when he has information. I don’t call him.” — is accurate in one sense, it is intentionally misleading as an answer to a question the purport of which plaintiff fully comprehended.
We therefore hold that there is substantial evidence to support the decision of the FEAA upholding specifications 2 and 3 of Reason III.
II.
We turn to plaintiffs final contention that the penalty of dismissal is so harsh in relation to the charges as to constitute an abuse of discretion.
In reaching our conclusion, we have not been unmindful of plaintiffs long and previously unmarred record in the Revenue Service; yet, this, in itself, imputes to him knowledge of the high standard expected of him. Since we have found the most serious charges of intentionally false or misleading statements supported by substantial evidence, we hold that the penalty of dismissal was within the agency’s discretion and did not constitute an abuse thereof.
Plaintiffs motion for summary judgment is denied; defendant’s cross-motion for summary judgment is granted; and the petition is dismissed. F.2d 1028, 1033-34 (1975).
IRM § 232.23(2)(b) (Jan. 29, 1975).
IRM § 9373.1(5) (Feb. 19, 1975); see also IRM § 9371.1(4) (Aug. 13, 1974).
A June 9, 1972, memorandum to all group supervisors and special agents, Springfield District, from the Chief, Intelligence Division, described Imprest Fund procedures as follows:
"* * * These funds are to be used solely for confidential expenses in connection with the procurement of evidence or information pursuant to enforcement of the laws and regulations governing the operations of our activity. This encompasses any use to which such funds might be put in the course of an official investigation (IRM 9773.3). Imprest funds are not to be used for an employee’s own private purposes. However, this is not to be interpreted as precluding the use of funds to pay for food, drink, etc. when deemed necessary in view of the nature of the investigative assignment.”
Nibali v. United States, 218 Ct. Cl. 547, 550-51, 589 F.2d 514, 516 (1978).
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938). See Wathen v. United States, 208 Ct. Cl. 342, 351, 527 F.2d 1191, 1197 (1975), cert. denied, 429 U.S. 821 (1976); Koppers Co. v. United States, 186 Ct. Cl. 142, 149, 405 F.2d 554, 559 (1968).
Reason II of the December 4, 1975, notice of proposed adverse action, reads as follows:
"REASON II. You failed to comply with Internal Revenue Service Regulations, Section 9373.1, which reads in part:
" '9373.1
" 'Informants
*114 " ‘(4) Every effort should be made to determine the informant’s true identity and address. It is not essential, however, that the informant sign his true name to a receipt. His identity will be kept confidential, and will not be disclosed to unauthorized persons. When deemed essential to protect the identity of an informant, or when the Government’s interest will be served, the informant may use an assumed name, provided, however, his true name and address, if known, are recorded in a file of a confidential nature in the district office for association with his assumed name. If the actual name cannot be used, a numerical identification system may be employed (except on a claim for reward), such as ‘'Confidential Informant No. ,” with the number prefixed by the symbol of the district office.’
“Specification. On or about May 1,1975, you opened an envelope which under the existing system utilized by the Springfield District should have contained the true identity of the confidential informant, if known. In the presence of your Acting Group Supervisor, Mr. Robert Brady, you opened the envelope, checked the contents, and handed the contents to Brady. Upon the slip of paper contained in the envelope was written the name ‘Bud Hoskins.’ Investigation has shown that Bud Hoskins is a fictitious name and that you were, at all times, aware of the actual identity of the informant referred to in the envelope. This informant, Bud Hoskins, was also identified by the identification number SP 59.”
Razik v. United States, 208 Ct. Cl. 265, 275, 525
Reason III of the notice of proposed adverse action contains the following:
" '225.5
" 'False Statements
" 'Proper functioning of the Revenue Service requires that the Service, the courts, other Federal agencies and the public be able to rely implicitly on the truthfulness of Revenue Service employees in matters of official interest. An employee may be subjected to severe disciplinary action and prosecution for intentionally making false or misleading verbal or written statements in matters of official interest. Some of these matters of official interest are: transactions with taxpayers, other Federal agencies or fellow employees; entries on tax returns, work reports of any nature or accounts of any kind; vouchers, leave requests, application forms, and other forms which serve as a basis for appointment, reassignment, promotion, or personnel actions; and affidavits, transcripts of testimony, or statements to Inspection, whether or not under oath.’ ”
«Ijf * * * executive branch wishes to punish its * * * employees for false statements made without guilty intent, at least, that purpose should be put up to them squarely in the notice of proposed removal. Such a Draconian rule may raise constitutional issues under some circumstances.” Urbina v. United States, 180 Ct. Cl. 194, 219 (1967); cf. Hoover v. United States, 206 Ct. Cl. 640, 513 F.2d 603 (1975) (court satisfied that, although notice did not specifically charge anything more than mistake, case actually pursued throughout on theory that plaintiff could not be separated unless actions proved deliberate).
Cf. Pascal v. United States, 211 Ct. Cl. 183, 543 F.2d 1284 (1976). In Pascal, an IRS Audit Division employee was removed on charges relating to an official trip (deliberate falsification of time records and failure to obtain advance authorization for absence from duty post). The chief dispute concerned the administrative finding that plaintiff knew his reports were false and knew he should have obtained advance authorization to take time off. The Commission was not persuaded that plaintiff misunderstood his travel status rights. The court agreed, stating:
"* * * It follows that, with plaintiffs testimony thus discounted, there was more than substantial evidence to sustain the * * * charges ***.***
"* * * Much is left to the common understanding that work-time is for work and those activities directly related to work — not for personal recreation or personal concerns. * * * '* * * [it is] beyond belief that an employee with [plaintiffs experience] would believe that he could travel for his own personnal [sic] pleasure on government time.’ ” 211 Ct. Cl. at 188-89, 543 F.2d at 1287-88 (footnote omitted).
By contrast, this is not a case where the credibility issue was resolved against plaintiff, nor is it "beyond belief’ that plaintiff should not have known of the putative requirement, which cannot be said to be a matter of "common understanding.”
The examiner must have overlooked the testimony of James Willis that he believed it to be acceptable to place a confidential informant’s assumed name in the envelope if the situation dictated and that any knowledge he obtained in this regard would have been through group meetings. Compare plaintiffs testimony that Mr. Murphy "told us it was acceptable” (emphasis added) and that he believed Murphy said this at a group meeting.
Swaaley v. United States, 180 Ct. Cl. 1, 8, 376 F.2d 857, 861 (1967).
Specifications 2 and 3 of Reason III read as follows:
"Specification 2. On May 14, 1975, when asked by Acting Assistant Chief, Intelligence Division, Mr. Gerald Schaefer, to furnish a better name for SP 59, who you had identified as Bud Hoskins, you informed him that you did not know Hoskins’ first name, but that you would try to get the information for him. Investigation has disclosed that Bud Hoskins is a former special agent with whom you had worked and have known personally for fourteen years.
"Specification 3. On May 16, 1975, Mr. Schaefer again asked if you had any additional information on Hoskins. You told him, ‘No, I have not[.] He has not called me yet.’ When asked what that meant, you stated, 'He calls me when he has information. I do not call him.’ Investigation has disclosed that Bud Hoskins is a former special agent with whom you had worked and have known personally for fourteen years.”
Cf. Strothers v. United States, 220 Ct. Cl. _, (1979), (rejecting criminal standard of proof).
Compare Power v. United States, 209 Ct. Cl. 126, 531 F.2d 505 (1976) (although ''guilt” supported by substantial evidence, substantial doubt that false claims submitted knowingly, intentionally, and with purpose to defraud) with Rifkin v. United States, 209 Ct. Cl. 566 (1976), cert. denied, 429 U.S. 1098 (1977) (deliberate misrepresentation, insufficient evidence of misunderstanding; psychological motivation irrelevant); Hoover v. United States, 206 Ct. Cl. 640, 513 F.2d 603 (1975) (actual knowledge or gross recklessness; IRS tax technician); Birnholz v. United States, 199 Ct. Cl. 532 (1972) (IRS attorney-accountant; no plausible explanation for misrepresentation such as there was in Urbina); and Liotta v. United States, 174 Ct. Cl. 91 (1966) (flagrant, knowing, and repeated violations of rules and regulations re accepting compensation from taxpayers for services connected with preparation of tax returns).
See Bronston v. United States, 409 U.S. 352, 360 (1973).
We reject at the outset defendant’s argument that this court has no jurisdiction to review the sanction imposed by an agency beyond its compliance with procedural requirements. See Power v. United States, 209 Ct. Cl. 126, 531 F.2d 505 (1976).
Culver v. United States, 219 Ct. Cl. 570 (1979).
