David A. Fargnoli v. Department of Commerce

UNITED STATES OF AMERICA

MERIT SYSTEMS PROTECTION BOARD

2016 MSPB 19

Docket No. DC-0752-15-0266-I-1

David A. Fargnoli,

Appellant,

v.

Department of Commerce,

Agency.

May 6, 2016

Lawrence Berger, Esquire, Glen Cove, New York, for the appellant.

Alpana K. Gupta, Washington, D.C., for the agency.

BEFORE

Susan Tsui Grundmann, Chairman

Mark A. Robbins, Member

OPINION AND ORDER

¶1 The appellant has filed a petition for review of the initial decision that

sustained his removal. For the reasons set forth below, we GRANT his petition

and REMAND the appeal for further adjudication.

BACKGROUND

¶2 From September 12, 2010, until his removal on December 12, 2014, the

appellant was employed as a Criminal Investigator with the Office of Export

Enforcement (OEE), in the agency’s Bureau of Industry and Security (BIS).

Initial Appeal File (IAF), Tab 5 at 55, Tab 7 at 113. He previously was employed

2

by the Department of Labor (DOL), Office of Inspector General (OIG). IAF,

Tab 6 at 176.

¶3 On August 14, 2014, the appellant’s first-level supervisor, C.V.,

Supervisory Criminal Investigator, proposed to remove the appellant based on

three charges: (1) Unauthorized Possession of Equipment; (2) Conduct

Unbecoming a Law Enforcement Officer (4 specifications); and (3) Lack of

Candor (6 specifications). IAF, Tab 5 at 262-77. The appellant responded orally

and in writing, and made supplemental oral and written responses after receiving

additional documentation from the agency. Id. at 56-258. On December 9, 2014,

the appellant’s second-level supervisor, N.K., Assistant Director, National

Security Programs, OEE, issued a decision letter sustaining the proposed

removal. Id. at 39-54. In his decision, N.K. found that the evidence supported

the charges, except for specifications 1, 2, and 3 of the lack of candor charge, and

that the penalty of removal was appropriate for the sustained misconduct. Id.

¶4 The appellant filed an appeal of his removal on December 18, 2014. IAF,

Tab 1. Following a hearing, the administrative judge issued an initial decision on

the removal action. IAF, Tab 19, Initial Decision (ID). In his decision, the

administrative judge sustained all three charges, although he did not sustain

specification 4 of the conduct unbecoming charge. Id. at 3-28. He further found

that the agency established a nexus between the sustained misconduct and the

efficiency of the service and that the penalty of removal was reasonable. Id.

at 29-31.

¶5 On petition for review, the appellant concedes that the record supports

specification 1 of the second charge, concerning a car accident in a

Government-owned vehicle (GOV), but he contests the administrative judge’s

findings on the remaining charges and specifications. Petition for Review (PFR)

File, Tab 1. Thus, the following charges and specifications remain in

dispute: (1) Unauthorized Possession of Equipment; (2) Conduct Unbecoming a

Law Enforcement Officer (specifications 2 and 3); and (3) Lack of Candor

3

(specifications 4, 5, and 6). The appellant contends that the car accident alone

would not warrant removal, but he does not otherwise contest the administrative

judge’s findings regarding nexus and penalty. Id. The agency has filed a

response, to which the appellant has replied. PFR File, Tabs 3-4. 1

ANALYSIS

The administrative judge did not correctly construe the charge of Unauthorized

Possession of Equipment, but the charge is nonetheless supported by

preponderant evidence.

¶6 Under the first charge, the proposal notice sets forth the following

specification:

Specification: On or around November 23, 2009, Beretta

Corporation issued to the U.S. Department of Labor, Office of

Inspector General a Super Nova Tac/GR, PG weapon (also called the

Benelli pump action 12 gauge shotgun or Benelli shotgun), a

collapsible Supernova Stock, and a Benelli Nova Entry Barrel.

Following your transfer from the Department of Labor to the

Department of Commerce on September 12, 2010, you wrongfully

took and maintained possession of these items without authorization.

IAF, Tab 5 at 270. The specification is followed by a more detailed narrative:

In November 2009, you obtained the Benelli shotgun by notifying

Beretta that you were a firearms instructor for DOL OIG. Indeed,

the shotgun is restricted to law enforcement use only, and thus, you

could not have obtained it in your personal capacity. The invoice for

the shotgun and its accessories, totaling approximately $744, states

that Beretta issued them expressly to DOL OIG. The Bureau of

Alcohol, Tobacco, Firearms and Explosives would have had to

approve any transfer of ownership of the weapon, which [approval]

did not occur. Thus, it is indisputable that such items did not belong

to you and that Beretta did not provide them to you in a personal

capacity. To my knowledge, moreover, no one at DOL OIG or

1

The appellant has since filed a supplemental pleading, in which he requests leave to

apprise the Board of the recent decision by the U.S. Court of Appeals for the Federal

Circuit in Parkinson v. Department of Justice, 815 F.3d 757 (Fed. Cir. 2016). PFR File,

Tab 5. The appellant’s request is granted.

4

Beretta authorized you to maintain possession of the Benelli shotgun

after leaving DOL OIG. Accordingly, upon your transfer to the

Department of Commerce in September 2010, you had an obligation

to return all such items to DOL OIG. Instead, you took and

maintained personal possession of these items for almost three years

after your departure from DOL OIG, until August 8, 2013, when

Supervisory Special Agent [S.F.] retrieved the items from you. I

find, therefore, that you wrongfully engaged in the unauthorized

possession of equipment.

Id. at 270-71.

¶7 The Board is required to review the agency’s decision on an adverse action

solely on the grounds invoked by the agency; the Board may not substitute what it

considers to be a more adequate or proper basis. Gottlieb v. Veterans

Administration, 39 M.S.P.R. 606, 609 (1989). Here, the gravamen of the charge

is that the appellant improperly kept possession of the Benelli shotgun following

his transfer to the agency without the authorization of DOL OIG, his former

employer. However, the administrative judge appears to have sustained the

charge based on a finding that the appellant failed to obtain authorization from

the agency to keep possession of the Benelli shotgun following his transfer from

DOL OIG. ID at 10. We agree with the appellant that this was error.

¶8 Nonetheless, the charge as written is supported by a preponderance of the

evidence. There is no dispute that, while the appellant was employed at DOL

OIG, he contacted Beretta to request a Benelli shotgun and an additional 14-inch

entry barrel for “testing and evaluation” purposes. PFR File, Tab 1 at 6. The

parties disagree as to whether the appellant obtained authorization from a

supervisor at DOL OIG to obtain the equipment. Regardless, it is undisputed that

the appellant took possession of the Benelli shotgun and entry barrel after the

items were delivered to DOL OIG and that he continued to keep the equipment in

his home after he left DOL OIG and commenced working for the agency. Id.

The parties also agree that the appellant did not obtain authorization from DOL

5

OIG or Beretta to maintain possession of the equipment following his transfer to

the agency. Id.

¶9 The appellant argues that it was unnecessary to obtain authorization from

DOL OIG to maintain possession of the equipment because he borrowed it

directly from Beretta, and DOL OIG therefore had no possessory interest. PFR

File, Tab 1. In support of his theory, he notes that DOL OIG did not acquire

ownership of the Benelli shotgun by way of gift or purchase and that it was never

entered into the DOL OIG inventory. The agency does not dispute that the

equipment was merely on loan from Beretta and that it never became the property

of DOL OIG.

¶10 However, the record reflects that Beretta did not lend the equipment to the

appellant in his personal capacity, but rather to DOL OIG. In his oral reply to the

proposed removal, the appellant admitted that, when he contacted Beretta’s law

enforcement representative to request the Benelli shotgun, he identified himself

as a firearms instructor for DOL OIG and indicated that he was requesting the

weapon for the purpose of testing and evaluation for potential acquisition by DOL

OIG. IAF, Tab 6 at 223-29. Furthermore, while there is no contemporaneous

paper record of the 2009 transaction, the record contains a reprinted invoice 2 and

a printout from Beretta’s item tracking system, both of which indicate that the

Benelli shotgun and entry barrel were “sold” 3 and shipped to DOL OIG for

“testing and evaluation purposes.” Id. at 50-51. The reprinted invoice also

indicates that Beretta had designated the Benelli shotgun as “[law enforcement]

only.” Id. The appellant argues that the “law enforcement only” designation is

2

The invoice bears the date September 30, 2013, which is presumably when it was

printed or retrieved from Beretta’s record keeping system. We are not persuaded by the

appellant’s speculation that, for reasons left unexplained, Beretta simply fabricated the

document.

3

It is undisputed that Beretta did not request or receive payment.

6

not a legal distinction, PFR File, Tab 1 at 14-17, but this is not in dispute, at least

regarding the shotgun itself. The fact that Beretta deemed the Benelli shotgun as

being for “law enforcement only” is significant not because it reflects a legal

designation, but rather because it serves as evidence that Beretta would not have

loaned the equipment to the appellant in his personal capacity.

¶11 In sum, regardless of whether the appellant obtained permission from DOL

OIG to borrow the shotgun on its behalf, or made his supervisors aware that he

had done so, DOL OIG and Beretta were the parties to the transaction. Hence,

upon his departure from DOL OIG, the appellant should have either surrendered

the equipment to DOL OIG or Beretta, or obtained permission from DOL OIG,

and presumably Beretta as well, to maintain possession. Accordingly, we sustain

the charge of Unauthorized Possession of Equipment.

The administrative judge correctly sustained specification 2 of the second charge,

but not specification 3.

¶12 Under specification 2 of the charge of Conduct Unbecoming a Law

Enforcement Officer, the agency alleged the following:

Specification 2: On March 1, 2013, you improperly carried a firearm

in a government-owned vehicle that was not authorized by OEE.

Per the SAM [Special Agent Manual] Section 2-5, “SAs [Special

Agents] are not authorized to carry any weapons under their

authority as OEE SAs while on duty or pursuant to OEE authorities,

other than those specifically authorized by this Section (e.g., batons,

pistols, shotguns, rifles and carbines).” Section 2-7 states, further,

“All OEE SAs who are authorized to carry firearms shall only carry

weapons authorized by OEE.” On March 1, 2013, you had a car

accident in your assigned GOV. You admitted that, at that time, you

were carrying a personally-owned Mossberg Shotgun, which OEE

had not authorized. As you were carrying this weapon in your

assigned GOV, you were carrying it under the color of your authority

as an OEE Special Agent. I find, therefore, that you engaged in

conduct unbecoming a law enforcement officer.

IAF, Tab 5 at 271.

7

¶13 The appellant does not dispute that he was carrying an unauthorized

personally-owned Mossberg shotgun in the trunk of his assigned GOV at the time

of the March 1, 2013 accident. PFR File, Tab 1 at 18. Rather, he argues that he

did not violate Sections 2-5 and 2-7 of the SAM because he was not carrying the

Mossberg shotgun under his authority as an OEE Special Agent. Id. However, it

is undisputed that the appellant was in an “on duty” status while traveling home

in his assigned GOV. Hearing Compact Disc (HCD), Track 1 (testimony of

C.V.). Furthermore, the record reflects that OEE agents are not permitted to

carry personally-owned long guns while on duty and that the appellant had

previously been counseled on that very issue. IAF, Tab 6 (P.K. interview). The

appellant does not allege that he sought or obtained approval to deviate from that

policy. Accordingly, we agree with the administrative judge that the agency

proved specification 2 of the conduct unbecoming charge by a preponderance of

the evidence.

¶14 We reach a different conclusion concerning specification 3. The agency set

forth that specification as follows:

Specification 3: On March 1, 2013, you improperly stored a firearm

in an unoccupied government-owned vehicle.

The SAM, Section 2-9, instructs SAs regarding the proper storage of

firearms. As it instructs, “Firearms will not be left unsecured in

unoccupied vehicles.” As it instructs further, “When no other option

is viable, and firearms must be stored in a vehicle, the firearm will

be secured by being placed in the trunk and hidden out of site [sic].

This option should be used only as a last resort, when no other means

of authorized storage are available.” Nevertheless, in the evening of

March 1, 2013, you left your GOV unoccupied on a local street with

the Mossberg Shotgun in the trunk. Given that BIS never even

authorized you to use the Mossberg Shotgun in your official capacity

and you, by your own account, left your vehicle unattended to watch

a movie, I have no basis to believe that “no other option [was]

viable” and that such firearm “[had to be] stored in a vehicle.”

Accordingly, I find that you engaged in conduct unbecoming a law

enforcement officer.

IAF, Tab 5 at 271.

8

¶15 The specification is explicitly based on the appellant’s alleged violation of

SAM, Section 2-9. However, the first paragraph of Section 2-9 unambiguously

delimits the policy to the storage of “authorized” firearms:

2-9 WEAPON STORAGE

A. SAs are responsible for taking all reasonable steps to prevent the

unauthorized use, accidental discharge, and/or theft of authorized

firearms. The SA is responsible for the storage of his/her

authorized firearm in every circumstance. All authorized

firearms shall be stored in accordance with the following

[provisions]. . . .

IAF, Tab 7 at 86 (emphasis added). Regardless of the spirit in which it was

intended, Section 2-9 cannot reasonably be read to cover the storage of an

unauthorized firearm, such as the appellant’s Mossberg shotgun. The appellant

may well have engaged in misconduct by failing to store his unauthorized

Mossberg shotgun with the same care mandated for authorized firearms.

However, as previously discussed, the Board is required to review the agency’s

decision on an adverse action solely on the grounds invoked by the agency and

may not substitute what it considers to be a more adequate or proper basis.

Gottlieb, 39 M.S.P.R. at 609. Accordingly, we do not sustain specification 3.

Nonetheless, the sustained specifications, i.e., specifications 1 and 2, are

sufficient to sustain the second charge. See Burroughs v. Department of the

Army, 918 F.2d 170, 172 (Fed. Cir. 1990).

The administrative judge did not fully analyze the Lack of Candor charge.

¶16 In Ludlum v. Department of Justice, 278 F.3d 1280 (Fed. Cir. 2002), our

reviewing court explained that lack of candor and falsification are distinct

charges. While falsification “involves an affirmative misrepresentation, and

requires intent to deceive,” lack of candor, by contrast, “is a broader and more

flexible concept whose contours and elements depend on the particular context

and conduct involved.” Id. at 1284. Lack of candor need not involve an

affirmative misrepresentation, but “may involve a failure to disclose something

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that, in the circumstances, should have been disclosed to make the statement

accurate and complete.” Id. Unlike falsification, lack of candor does not require

“intent to deceive.” Id. at 1284-85.

¶17 Nonetheless, lack of candor “necessarily involves an element of

deception.” Id. at 1284; see Parkinson v. Department of Justice, 815 F.3d 757,

766 (Fed. Cir. 2016); Rhee v. Department of the Treasury, 117 M.S.P.R. 640,

¶ 11 (2012), overruled in part on other grounds by Savage v. Department of the

Army, 122 M.S.P.R. 612 (2015). In Rhee, 117 M.S.P.R. 640, a case in which the

appellant was charged with lack of candor in making an incorrect statement to her

supervisor, id., ¶ 2, we found that, to establish the “element of deception,” the

agency had to prove that the appellant knowingly made an incorrect statement,

id., ¶ 11. Because the agency failed to establish by preponderant evidence that

the appellant knew her statement was false, we found the administrative judge

was correct in not sustaining the charge. Id., ¶¶ 12-16. Our reviewing court

recently took a similar approach in Parkinson, in which an employee of the

Federal Bureau of Investigation (FBI) was charged with lack of candor under the

FBI Offense Code based on his alleged “failure to be fully forthright” in his

statements to agency investigators. In that context, the court found that the

“element of deception” required under Ludlum entailed that the employee must

have “knowingly” failed to be forthright. Parkinson, 815 F. 3d at 766-67. The

court reversed the Board’s decision to sustain the charge, finding that, even if the

employee failed to be fully forthright, there was no substantial evidence that he

did so knowingly. Id. at 767-68. In light of Rhee and Parkinson, we now hold

that lack of candor requires proof of the following elements: (1) that the

employee gave incorrect or incomplete information; and (2) that he did so

knowingly.

10

¶18 Here, the administrative judge determined that the appellant’s statements

described in specifications 4, 5, and 6 were not true. ID at 22-28. 4 However, he

made no findings as to whether the “element of deception” was present, i.e.,

whether the appellant knowingly gave incorrect or incomplete information. That

matter is in dispute, and the administrative judge did not make the credibility

determinations needed to resolve it. See Spithaler v. Office of Personnel

Management, 1 M.S.P.R. 587, 589 (1980) (finding that an initial decision must

identify all material issues of fact and law, summarize the evidence, resolve

issues of credibility, and include the administrative judge’s conclusions of law

and his legal reasoning, as well as the authorities on which that reasoning rests).

Because credibility determinations should be made in the first instance by the

administrative judge who conducted the hearing, we remand the appeal. See

Gardner v. U.S. Postal Service, 79 M.S.P.R. 9, 15 (1998). On remand, the

administrative judge should reanalyze the lack of candor charge in light of

4

The specifications read as follows:

Specification 4: In a sworn interview on December 6, 2013, when asked why

you did not return the [Benelli shotgun], you stated, “I intended to.” In the same

interview, when asked what your purpose was for keeping the Benelli shotgun

after leaving DOL OIG, you stated, “My intent was to T&E [test and evaluate] it

and present the package to BIS.”

Specification 5: In a sworn interview on December 6, 2013, you stated that you

received permission from [R.P.], Special Agent in Charge, OIG, DOL, to acquire

and test the [Benelli shotgun]. However, [R.P.] did not give you permission to

obtain a shotgun.

Specification 6: In a sworn interview on December 6, 2013, you stated that you

felt the [Benelli shotgun] was a “personal assignment, not a—assigned to an

agency.”

IAF, Tab 6 at 273-74.

11

Parkinson and Rhee and make a new finding as to whether the sustained

misconduct warrants removal. 5

ORDER

¶19 We remand the appeal to the regional office for further adjudication

consistent with this Opinion and Order.

FOR THE BOARD:

______________________________

William D. Spencer

Clerk of the Board

Washington, D.C.

5

In his prehearing submissions, the appellant alleged that the agency violated his right

to due process. IAF, Tab 15 at 15. In his summary of the prehearing conference, the

administrative judge noted the appellant’s due process claim and set forth the legal

standard for proving such an allegation. IAF, Tab 17 at 2-3. However, the

administrative judge did not address the due process claim in the initial decision.

Although the appellant has not raised the due process claim on review, there is

nothing in the record to indicate that he abandoned or withdrew that claim prior to

the initial decision. Therefore, the administrative judge should have addressed that

claim in the initial decision. See Hall v. Department of Transportation, 119 M.S.P.R.

180, ¶ 6 (2013). On remand, if the appellant indicates that he no longer wishes to

pursue his due process claim, the administrative judge should document the appellant’s

withdrawal of that claim, explain that the Board will no longer consider it when

deciding the appeal, and give the appellant an opportunity to object to withdrawal of the

affirmative defense. See Wynn v. U.S. Postal Service, 115 M.S.P.R. 146, ¶ 10 (2010).

Otherwise, the administrative judge should address the due process claim in the remand

initial decision. See Hall, 119 M.S.P.R. 180, ¶ 7.