Petition for Writ of Certiorari — Castella v. Long

Supreme Court brief1989

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\ Su ye Court, Yo

$9-414\(. sD

} APR 22 1889

JOSEPH F. SPANIOL, JR.

NO. emma

Spring 1989

UNITED STATES SUPREME COURT

JOHN F CASTELLA, Petitioner

JOHN E LONG, personally and in his

Official Capacity as Commander,

HAROLD D LYNCH, Personally and in his

Official Capacity as Senior Management

Official, ARMY AND AIR FORCE EXCHANGE

SERVICE, THE UNITED STATES DEPARTMENT

OF THE ARMY, and THE UNITED STATES OF

AMERICA, Respondents

Petition for Writ of Certiorari

John F Castella

710 Jellison Blvd.

Duncanville, Texas

735116

(214) 296-3989

Pro se

QUESTION PRESENTED

Do procedures established by a Non

Appropriated Fund Entity of the United States

Government, which do not comply with the

mandated statutory procedures of the C. S. R.

A. provide "Due Process” when the taking of a

liberty and property right. guaranteed by the

Fifth Amendment of the U. S. Constitution, is

appealed?

TABLE OF CONTENTS

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FOBIG GF COMEGMNER cc cccccccegecesnceeesaes

TEBie@ OF Authoritias ..c.cesassenccves 0020 4.9

Opinions Below ...... couse eceeees Werrerry? i

VUTABGICTCION eecccsccsenccccssincesecseselee

Constitutional Frovision Involved...c..uaes 8

Statement Of The Case ......222...8 thru 11

Facts Relevant to the Petition ..11 thru 14

Legal Argument Justifying Writ

OF CPEs’. § ciendécisticccaeuncle ee

Conclusion and Prayer .wcccecnacs osbean« 19

VETStTiceee GF BErvice | via ws ack ceuk be cue 20

Appendix A - United States Court OF

Appeals denial of Fetition

for Rehearing dated Jan 23,

1989 ese seeseneeee#ezw#eseaeaneee#eeeseese ee#e#e A-1

Appendix B - United States Court OF

Appeals Opinion dated

Nov. 21 1988 ...B 1 thru B 11

Appendix

United States District Court

for the Northern District of

Texas, Memorandum Opinion and

Order dated April 29, 1938S ...

Sasa eaves snbessvee=s thru C-14

Action of Appellate Authority

In Re The Appeal of Adverse

Action of Mr. John F. Castella

dated December 1, .. - an a a ee

eoecnseacecace eee eD~1 thru D-635

TABLE OF AUTHORITIES

CASES

Page

Ramspect v Federal Trial Examiners

Conference, S45 U.S. 128 cccccccces 11

Bush v Lucas, 462 U.S. 367 ....206. 12

Spagnola v Mathis, 859 F.2nd 223

ew Gets 1988) eeeeseeeseeseeseeseeseesee#ee#see#e##s#s#e# # 12

STATUTES

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REGULATIONS

Army/Air Force Regulation

GVKSAESTRAD costedseeescscceeosess 6

CONSTITUTIONAL PROVISIONS

U. S. Constitution, Amendment V. ...2

IN THE

SUPREME COURT OF THE UNITED STATES

NO.

JOHN F CASTELLA, Petitioner

JOHN E LONG, personaliy and in his

Official Capacity as Commander,

HAROLD D LYNCH, Personally and in his

Official Capacity as Senior Management

Official, ARMY AND AIR FORCE EXCHANGE

SERVICE, THE UNITED STATES DEPARTMENT

OF THE ARMY, and THE UNITED STATES OF

AMERICA, Respondents

Petition for Writ of Certiorari

Petitioner, John F. Castellée,

respectfully prays that a writ of certiorari

issue to review the judgement and opinion of

the United States Court of Appeals for the

Fifth Circuit entered on January 23, 1989.

OPINIONS BELOW

The Judgement and Opinion of the United

States Court of Appeals for the Fifth Circuit

affirming the decision of the United States

District Court for the Northern District of

Texas,was entered on 21 Nov.1988,CApp Al.

Motion for rehearing thereof was denied by

order dated 23 January 1989 [App Bi. The

Decision of the United States District

Court for the Northern District of Texas was

issued on April 29, 1988 cApp Ci. The Decision

of the Appellant Authority, Army and Air Force

lon’

Exchange Service was issued on 2 December,

1985. CApp Dj.

JURISDICTION

The jurisdiction of this Court is invoked

pursuant to 28 U. S.C. 1454 (1). Jurisdiction

of the United States Court of Appeals was

pursuant to 28 U. S. C. 1291 and Rule 4 FRAP.

——

7 7

Jurisdiction of the United States District

Court was pursuant to 28 U.S.C. S201, 28

U.S.C. 1331, The Fifth Amendment to the United

States Constitution, 5 U.S.C. SS2a (q) il) and

(SS U.S.C. 7O1l, et.seq. Jurisdiction of the

Appellant Authority was pursuant to Army/Air

Force Fegulation 60-21/147-15.

CONSTITUTIONAL FPROVISION INVOLVED

United States Constitution, Amendment V:

"nor shall any person. be deprived of

life, liberty, or property, without due

process of law..."

STATEMENT OF THE CASE

I. Proceedings in the Courts Below

Petitioner John F. Castella was a career

executive with 24 years commendable service

with the Army and Air Force Exchange

Service, an Instrumentality of the United

States Government.and also a Non Appropriated

Fund of the Departments of the Army and Air

Force. This Aqency of the United States

Government operates as a multi-billion dollar

entity of the military departments with almost

total autonomy. The Congressional Safequards

pravided by the Civil Service Requlations to

government employees are not available to the

Army and Air Force Exchange Service ‘AAFES)

employees. Fetitioner was terminated for

submitting fraudulent expense vouchers. In

August of 1985 Mr. Castella was transferred,at

the direction of the AAFES, from Fort isin:

Mass. to Dallas Texas. Subsequent to the

transfer Mr. Castella submitted five expense

vouchers with estimated expenses which

exceeded the dollar amount authorized by the

agency. He further submitted receipts for food

which were prepared by him as estimates of

expenses at particular restaurants. Upon

submission, he informed the agency that the

—]

receipts were estimates. Inveetinatian

revealed that the receipts were no

Mr. Castella was provided with

termination identifing receipt discrepanc

as falsification of government

letter further stated that all

dacuments.

>» letter of

Lec

co oot

The

Five youchers

VW “ewe Nee!

were fraudulent, without identifing any

entries on the vouchers deened

specifically

Fraudulent. AGFES concluded that the average

expense for meals wat fraudulent: therefore

entries were Fraudulent and fal

Petitioner received an internal

confirmed the termination. Suri

sified.

hear ric ber

the petitioner produced notorized statemen

from numerous restaurants to verify both

dollar value, number of people

locations of food expenses whic

claims. These were ignored by the

Examiner. Petitioner Filed a

included Frivacy Act violations, personal

liability and a review of the

nq the Hearina,

i ooo

‘ =e

eaking, and

Mh simporked the

he Hearing

suit which

gency achion.,

all

ich

—

(

The United States District Court for

the Northern District of Texas dismissed the

first six counts and ruled that "extensive

administrative procedure followed in this

case more than adequately protected FPlantiff’s

rights under the constitution, laws, and

regulations" in count 7. ( review of Agency

decision pursuant to 5 U.S.C. 7O1l et seg.) The

United States Court of Appeals, Fifth District

affirmed this decision and denied a rehearing

II. Facts Relevant to this Petition

Contrary to procedures identified by law

for termination of civil service employees (sec

~ U.S.C. sec. 7513,7701,7703), AAFES conducted

a lengthy internal hearing held by a hearing

taminer (not an administrative 1

judge}

pursuant to Army Regulation (AR) 40-21/Air

Force Regulation (AFF) 147-15. The hearing

examiner was beholden to the Senior Management

Official who initiated the termination action

and the Appellant Authority who approved ee

termination action. Furthermore, the leqal

offices of the AAFES were ingt anly the

"adversarial" personnel who represented

management in the hearing but also the "Offic

of Legal Feview" for the appellant authority

who approved the report of the hearing

examiner. Subsequently, the Appellant

Authority, who originally indicated to the

Senior Management Official (prior to his

action to terminate) that a ¢erious breach of

rules was committed by the plaintiff, denied

the Flaintiff*s appeal.

Furthermore, the requlatory procedures

identified in AF 460-21/AFR 147-15 require

specific allegations in order for the

—— |

PET Rv

Tw ATO

plaintiff to be able to respond specifically.

The hearing examiners findings concluded that

the plaintiff had done five "specific" things

wrong, four of which were not included in the

"motice" required by the regulations. Neither

the Hearing Examiner, the District Court nor

the Appellate Court ee ee these findings

"general allegations”. Their reviews indicate

that the "general allegations" were not

considered by the Hearing Examiner. Under

Civil Service Regulations, steming from 5S

W.S.C. 7512,7701,7702, these specific findings

would not have been allowed. The allegation

which was in the original notice and

Found to be specifically chines included

identification of a "Daily Foom Expense" on

the voucher which was not adjusted for a

credit provided by the motel. The supporting

document provided with the voucher had the

credit identified on it. The voucher

should have been adjusted hy the OAFES in

their review,as testified by the clerk a

the

hearing.

In view of the foregoing facts,this

petitioner requests that the safequards

provided by Civil Service Laws be provided to

the 20,900 personnel employed by the AAFES,

none of whom are now subject te a government

procedure which insures "Due Frocess”.

The ability of the AAFES to decide,

independently, that an employee is guilty or

Fraud, publish this information, and take

away a liberty and property riaht of that

employee, by termination of the employee, is a

\. : ae ‘

violation of the due process provisions of the

U.S.Constitution and the Adminizetrative

Frocedure Act.

LEGAL ARGUMENT JUSTIFYING WRIT OF CERTIORARI

The regulatory procedure which

provides for an internal formal hearing by a

hearing examiner who is directly beholden to

the Appelate Authority for promotion is

unfair. Furthermore, ex parte communications

between the investigative and prosecuting

staft, the Examiner, and the Appellate

Authority are in violation of the A F A and

result in Due Frocess violation of the law.

Fetitioner seeks benefit of that provision

of the A FP A which requires an internal

separation of functions within an agency. Due

process in agency adjudications requires

impartial decision makers.

The basis for this argument is contained in

Ramspect v Federal Trial Examiners Conference,

345 US 128 . The case discussed the

legislative intent in the developement of the

Administrative Frocedure Act (A F AD and the

use of hearing examiners for formal hearings.

It states as follows:

“Many complaints were voiced against

the actions of hearing examiners,it being

charged that they were mere tools of the

agency concerned and subservient to the agency

heads in making their proposed finding of fact

and recommendations." ,See Ramspect, supra at

Slee

The case further stated:

"Conaqress intended to make hearing

examiners” a special class of semi-independent

subordinate hearing officers* by vesting

control of their compensation, promotion, and

tenure in the Civil Service Commission to a

much greater extent than in the case of other

federal employees". See Famspect, supra at

Wl Se

The A. F. A. further developed the hearing

@xaminers”® position to be an Administrative

Law Judge with quasi judicial powers. The

Army and Air Force Exchange Service Hearing

Examiner and the hearing procedures used in

this case at bar, violate the intent

of congress,the A FP A and constitutes a

violation of the "Due Process" provision of

the Fifth Amendment of the U.S. Constitution.

Finally, the A, FP. A. procedures, which were

passed to insure that due process was provided

to government employees in personnel actions,

are not available to personnel of the Army and

Air Force Exchange Service.

Taking note of the holdings in Bush v Lucas ,

462 US 367, the federal government has

developed an elaborate scheme to insure

due process is provided to federal personnel;

however, this "scheme" was not available to

the petitioner in this case. The procedural

scheme developed by the Army and Air Force

Exchange Service falls far short of that

provided by the CSFA’*s provision of review by

the Merit System Frotection Board.

In Spagnola vy Mathis, 859 Fed, cen (pC

Cir.1988), rehearing in Banc granted, as in

this case at bar, the government and the

courts contend that the procedures provided to

the plaintiff were in compliance with the due

process provisions of the AFa.

Intera alia, this honorable cotrrt held in

Spagnola at 229,250

‘ "While we decline to extend *Bivens’

remedies to Hubbard and Spaqnola we do not

suggest that the CSRA procedures precludes

the jurisdiction over constitutional claims of

federal employees... »~--On the contrary,

time and again the court has affirmed the

right of civil servants to seek equitable

relief against their supervisors, and the

vindication of their constitutional rights."

A careful analysis of the procedural and

substantive due process afforded to the

plantiff in this case results in the

conclusion that there was none....only a

"voluminous screen" to protect the

agency in their irrational decision.

CONCLUSION AND PRAYER

WHEREFORE, PREMISES CONSIDERED, FETITIONER

RESPECTFULLY PRAYS OF THE HONORABLE SUPREME

COURT TO GRANT THE INSTANT PETITION FOR A WRIT

OF CERTIORARI. PETITIONER FURTHER PRAYS for

all relief to which he may show himself to be

entitled, at law and in equity, and toa

"formal hearing" by an independent examiner,

as provided for in the Administrative

Frocedure Act.

Resoectfully Submitted

(| ICE =

John F. Castella

710 Jellison Bivd.

Duncanville, Temas

(214) 294-2989

Fro se

“114

CERTIFICATE OF SERVICE

The undersiqned does herebv certify that a

copy of this Fetition for a Writ of Certiorari

was sent by first class mail to: Stafford

Hutchinson, Assistant United Gtates Attorney,

1100 Commerce St., Foom 16623, Dalla @xas

nee

75242 on April 22.1989 and June 20, 15

addition, a copy was sent to the Soa

General, Clerk, W.S. Court of Appeals For the

~ th Circit, 600 Camp St... New Orleans, La.,

7O130,

A Kh a

GOHN F CASTELLA

APPENDICES

IN THE UNITED STATES CGURT OF AFPFEALS

FOR THE FIFTH CIRCUT

ee SSN ce ee eee + eet ne eee meee cos seen ew

Na. 86-1406

John Fred Castella,

Flaintiff-Appellant,

Versus

John Edward Lona

Fersonally and in his Officia! Capacity

as Commander, ARMY AND AIF FORCE EXCHANGE

SERVICE, ET AL.,

Defendants-Appellees.

tart trom the United states District Ceaurt

Tervas

= ‘ t= | te #8 SL aS

ee ne ee ee en ee ee ee ee ee ELE OE ee ee ES SE ee Sn See SE et Sent Senet sees canam MeSE Mean same

. .

rt in

( JANUARY 23, 195689 )

Before GEE, WILLIAMS AND HIGGINBOTHAM, Cireut

Judges

FER CURIAM:

IT IS ORDERED that the netitioan far

rehearing filed in the above titled and

numbered cause be and the came 1S hereby

DENIED.

ENTERED FOR THE COURT

J Williams

United States Circut Judae

Am 1

FE ee eT ee

UNITED STATES COURT OF AFFEALS

FOR THE FIFTH CIRCUIT

No 88-1406

Summary Calander

JOHN FRED CASTELLA,

Plantiff-Appellant,

Versus

JOHN E LONG, Fersonally and in his Official

Capacity as Commander, HAROLD D. LYNCH,

Personally and in his) Official Canacity as

Senior Management Official, ARMY AND AIF FORCE

EXCHANGE SERVICE, THE UNITED STATES DEPARTMENT

OF THE ARMY, AND THE UNITED STATES OF AMERICA.

Defendants-Anpellees

Apmeal from the United States District Court

for the Northern District of Texas

(CAZ-87-1141-H)

( November 21, 1988 )

Before GEE, WILLIAMS AND HIGGINBOTHAM, Circut

Judges.

FER CURIAM: x

* Local rule 47.5 provides: "The publication

of oapinions that have no precedential value

and merely decide particular cases on the

basis of well settled princinles of law

impeses needless expense an the puiblic and

burdens on the legal professian." Fursant to

that Rule, the court has determined that this

Opinian should not be published.

B-1

mame ow alta ’

Appellant, Fred Castella, wat discherqesd

by the @rmy and air

(AAFES) for submitting false subsistence

allowance vouchers in connection with a

permanent change of station from Ft Devens

Massachusettes, to SAFES Headgquaters in Dallas

Texas. His discharge was upheld through the

appellate procedures within the AAFES,

including a decision by an administrative law

judge after an extensive and thorough hearing,

and confirmed by General John E. Lona,

appellee, Commander, AAFES. Suit was broudht

in district court ¢eeking review of the

discharge and also claiming certain

constitutional and statutory violation by the

government. The dietrict csurk 6 granted

summary judgement in favor of the defendants.

the decision having the effect oF upnhelding

AAFES’s discharge of appellant.

B-‘2

force Euechange Service

Appeliant challenges the district court’s

decision only as to counts 4, 5. and 7 of his

Original complaint. Counts 4 and alleged

that AAFES and che Department of the Army

violated the Frivacy Act. S U.S.C. Soe (a)

(e) (5) and (5), by intentionally and

willfully failing to maintain the plaintiff's

records in accordance with the requirements orf

that statute. Count 7 is the basic count

challenging the legal justification for the

decision to terminate on the ground that (1)

there is -o substantial evidence in the record

to support the the decision, (2) the decision

to terminate rather than some lesser ‘form of

disciplinary action was arbitrary, capricious,

and am anuse of discretion, and (3) proper due

process procedures were not followed in the

administrative actions leading £o the

fFermination.

Ss to the issue raised under counts 4 and

S.we find that the district court made correct

B-T

application of the statute to facts of this

case. Appellant relies upon the wording of

the Frivacy Act requiring that records about

individuals be kept "with such accuracy,

relevance, timeliness, and completeness, as if

reasonably necessary to assure fairness to the

individual in the determination." It 15

claimed by appellant that the dissemination of

the records to the Texas Employment Commission

was in violation of the law since the

recordkeeping hag not met the statutory

requirements "to assure fairness to the

individual”.

The inaccuracy claimed by the apellankt te

exist in the records is the conclusion thak he

hed falsified the travel vouchers. Appellant

urges that this conelusion indicates quilt of

acriminal offense, even though in this case

ifi

there was only a decision to bring abow

termination.

B-4

——

The district court was correct in

concluding that the Frivacy act clain is

Simply a collateral way of testing the

fundamental issue in this case which is

whether appellant did falsify the vouchers.

Tf he did, there is nothing wrong with the

accuracy of the records kept by the

government. Only if his discharge were to be

overturned because it was found there was not

sufficient evidence to support ‘the conclusion

that he had falsified the records would there

be an inaccuracy in those records. It is

quite clear, therefore, that all appellant is

doing in his Frivacy Act claim is challenging

the valididty of the discharge based upon the

evidence and findings in the administrative

nrocess. There is no difference between this

claim and the fundamental claim of count 7

challenging the basic decision to terminate on

the ground of lack of sufficient evidence,

undue harshness of penalty, and failure to use

B-S

fair procedures. Only if he prevartled under

count 7 could ie prevail wnder the Frivacy fel

counts 4 and “5S. We turn our attention,

therefore, to his appeal of the decision under

count 7 of his petition because it raises the

fundamental question in thie case: was he

justly discharged.

We Find the decision of the distric court

evaluating appellant’s contentien under count

7 to be completely effective and persuasive.

We have considered those portions orf the

record which are relevant and have evaluated

the circumstances throvahly develoned ain the

administrative procedure. Wee afrirm the

decision of the district court finding the

submission of false vouchers with Fraudulent

intent. OQur affirmance i¢ bhased upon the

opinion of that court. We qaoan mareby ka

emphasize one or two mathers by way oaF

summery.

mes

Appellant’s claim of lack of Sufficient

evidence to support the decision C1] must fail

because his attack 1S based upon his own

credibility and the lack of persuasiveness of

the government's evidence. The administrative

law judge in the decision upheld by the head

of the agency specifically found that

appellant's testimony was not credible. The

record contains ample evidence to support this

conclusion. While it is not usual to require

M@al receipts in substantiating vouchers in

the circumstances involved in station

transfers and the subsistence allowance, the

requlation is absolutely clear that the

receipts can be required. Appellants

vouchers without the receipts indicated very

high expenditures for meals. When he was

told he had to supply receipts, he did supply

some receipts and other receipts which he

admittedly filled out himself "as estimates”.

The record shows beyond mispute that his

claims for meals are siqnificantly higher than

the usual claims of ather

Ci1jJ-- We have recently indicated that the

standard of review in 2 case involving

discharge of an AAFES amployee is the

"arbitrary and capricious” tes of 79S of the

Administrative Froacedure Ack. Castillo wv.

AAFES, 849 F. 2d 199, 203 n.1 (Sth Cir. 1988).

This decision was handed down after the

decision of the district court in the cage

before us which was based unon the substantial

evidence rule for review of administrative

actions. The arbitrary and capricious test is

obviously much harder to meet for an appellant

attacking administrative action. Thus, just

as the opinion in Castillo does, 849 F.2d at

203, we do not Finally commit ourselves tn the

arbitray and capricious standard. We need not

because the requirement of substantial

evidence to support the administrative action

Clearly i5 met in any event, B-93

employees being transferred into the Dallas

headquarters. Further, his claime with

respect to those meale where he did not have

receipts are also significantly higher than

the claims which are backed by admittedly

authentic receipts. There also was evidence

of clear and precise falsification of some

vouchers thus establishing fraudulent intent.

Appellant himself testified extensively

in the hearing held by the administrative law

judge. under the law it was the obligation of

the judge to avaluate Ais probity. In this

@valuation the administrative law judge found

appellant wanting. This is a decision which

we cannot upset unless there 1s evidence which

must be taken as showing this credibility

decision fails in the record considered as a

wheole. There is not such evidence. Further,

there are a number of other matters throughout

the record which cast doubt upan the

truthfulness and credibility of appellant. We

B-9

ee OM pRB, _-

need not detail them since the credibility

decision is net ours to make. [bk as enmeugh

that there is ample evidence in the record ta

justify the ALJT*s conclusion as toa credibility

In response to appellant‘s claim that the

penalty of separation was unduly harsh in view

of clear record in his 24 years of employment,

it is certainly and uncontrovertible principle

that the falsification of such recorGgs may

appropriately lead to termination.

Termination is well within the scope of

administrative discretion.

Finally, the claims concerning procedural

rights are lacking in substance. It is clear

from the record that t he chep by sten

administrative procedures, including the full

trail type hearing before an sdministrative

law judge, complied with the regulations ane

‘also complied with constitutional and

statutory requirements (emphasis supplied).

The decision of the District Court is AFFIRMED

B10

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

JOHN FRED CASTELLA.

Flaintif¢

JOHN EDWARD LONE, Fersonally and in his

official capacity as Commander,

HAF OLD OD, LYNCH, Fersonally and in bis

official capacity as Senior Management

Official,

ARMY AND AIF FORCE EXCHANGE SERVICE,

THE UNITED STATES DEFT. OF ARMY

THE UNITED STATES QF AMEFICA

Defendants

Civil Action No. 23-87-1141-H

MEMORANDUM OF INION AND ORDER

Before the Court are Defendants* Fartial

Motion to Dismiss the Complaint, filed

September 15, 19873 Flaintiff‘s Response,

filed December &, 19873 Defendants* Feply,

filed Janauary iS. 1988; Individual

Defendants* Separate Motion to Dismiss, or

alternatively, for Summary Judgment, filed

September 15, 1987; Plaintiff's Response,

filed December “7, 1907; Defendants* Reply,

filed January 13, 1938; Individual Defendants *

Statement of Undisputed Facts and Issues of

Lae filed September 15, 19873; Flaintiff‘s

Response to Individual Defendants*® Statement

of Facts and Law, filed November %S, 1987;

Flaintiff‘s Cross-Motion for Summary Judqment

aj to Count Six, filed December 2, 1997;

Defendants* Response, filed January 22, 1988;

Flaintiff‘s Reply, filed February 1, 1986;

Plaintiff‘s Statement of undisputed facts and

C-2

aLlNtIFF = ratemnent

of Facts and Law, Filed January 22, 1988;

Defendants* Motion for Summary Judament as to

Count Seven, Filed March 4, 1988; Plaintiff's

RFesoonse, filed March 25, 1988; Derendants*

~ist of Undisputed Facts and Issues of Law,

riled March 4 1°8s&; Flaintiff's Crose-Motion

For Summary dJudaqment as to Count Seven, Ffilec

March 4, 1988; Defendants’ Response, filed

March 25, 19878: Plaintiff's Keply, filed Arri!}

lL, 1988; Flaintiff's Statement oF Undisen ited

-acts and Issues of Law, filed March 4, 1988:

Defandants* Response to Plaintiff's Statement

of Facts and Law, Filed March 25, 1°88: and

last, but certainty not least, Volumes of

the Administrative Record for the

Administrative Froceedings pertinent to this

case, filed September 15, 1987.

In their various Motians, Defendants are

seeking Dismissal for lack of subject matter

jurisdiction and for failure to state a claim

upon which relief can be granted. Dismissal

for failure to state a claim can be granted

only when Plaintiff "can prove no set of facts

in support of his claim which would entitle

him to relief.” Conley v. Gibson, 255 U.

41, 45-46 (1957). Both parties have also

filed numerous motions for summary judament.

Summary judaqment is proper when the pleadinas

and evidence on file show that no genuine

issue exists as to any material fact and the

moving party is entitled to judgment as a

matter of law. Fed. FR. Civ. PF. Sé.

FACTS

>. “ie Background Facts.

On July 25, 1985, Plaintiff, hic

wife, and three minor children began a

permanent change of station (PCS) move from

Fort Devens, Massachusetts to AAFES

c-4

Headquarters wn Dallas. Tewas. £

Complaint, 11. Vocuments submitt

Plaintiff to AAFES reflect that he a

Family commenced travel on August 7,

arriving in Dallas on Gugust 22, 1985,

Making several authorized intermediate

Sdministrative Fecord ("Gd. Rec. ") ol

Tab 5. Under GAFES regulations, Plat!

authorized a

for baidine, food, and laundry expen

PCE mave for the period they were

temporary quarters. Id. at Tabs 2 an

temporary allowance was terminated o

i2, 1985. the date

household goods

»<

-4

Quarters. Ad.F

On August 27.

brought a draft subsistence

Mulder ‘ an accounti ng cl

Divislon.

Ad. Fec.

subsistence

—

Plaintiff

lowance

nd his

1985,

afrter

on *he

im ale

up ying

fea - =

to Ms.

42, 60, 61. Ms. Mulder told Plaintiff to

attach-all lodging and dry-cleaning receipts

when he submitted the finalized voucher. She

also advised Plaintiff to save his meal

receipts since they could be requested. Id.

at 40. Plaintiff informed Ms. Mulder that he

had not saved his meal receipts because no one

told him to do so. Id. at 41-42.

The next day. Plaintifff returned ana

submitted his initial subsistence voucher

covering the period from July 25, 1965 to

August 27, 1985(Ad. Fec. Vol. AIV, Tab 3).

Ad. Rec. Vol. I at 60. Sometime after

September 17, 1985, Flaintiff submitted a

second voucher (Ad. Fec. Vol. XIV, Tab 6).

Ad. Rec. Vol. I at 43-44. Ms. Mulder examined

the two vouchers and, based on her experience,

believed the amounts claimed for meals were

excessive. Id. at 42-44, 67, 71, 76. She

consulted with her supervisor, Mr. FPetrou,

C-6

——

= od — ~~ - ~ -

received approval to request meal receipts

trom Plaintiff, and sent Plaintiff a written

request for meal receipts to support his

claims (Ad. Rec. Vol. XIv, Tab 23). Ad. Rec.

Yol. I at 61-623; Vol. IV at 791.

At a later date, Plaintiff brought a memo

(Ad. REc. Vol. XIV, Tab 24). and copies of some

meal receipts (Ad. Rec. Vol. XIV, Tabs 17 and

16) to Mr. FPetrou. Ad. Fec. Vol. IV at 791-

95. Because the handwriting on the receipts

appeared to be similar to that on FPlaintiffs‘s

voucher, Mr. Petrou asked Plaintiff if he had

written the receipts. Ad. Rec. Vol. IV at

799 « Plaintiff acknowledged that the had

written in the amounts on some of the

receipts. Id. += Plaintiff states that he

Filled in the amounts to the best of his

recollection. Id. at 803. Mr. FPetrou then had

Ms. Mulder compare the receipts submitted to

the subsistence vouchers. Id. at 794-95. See

C-7

also Ad. Rec. Vol. XIV, Tabs 29 and 30

Subsequently, Mr. Fetrou took the vouchers

and receipts to his supervisor, Mr. Schulz,

the Chief of the General Accounting Division.

Ad. Rec. Vol. III at 408, 441. Mr. Petrou did

not mention that the receipts were filled in

to the best of Plaintiff‘s recollection. id.

at 441. After he reviewed the receipts and

vouchers, Mr. Schulz concluded, based on his

20 years of experience as an auditor, that

Plaintiff had submitted false vourters,

claiming money he had not spent. Id. at 420-

mie he referred the matter to AAFES Safety

hed Security Division, who then referred the

case to the Air Force Ofice of Special

Investigation ("AFOSI"). Id. at 510, 552-54.

AFOSI conducted an investigation and submitted

a final report. Ad. Rec. Vol. XIII, Tab 12.

AAFES Safety and Security later prepared a

supplemental report. Ad. Fec. Vol. XV, Tab 9%.

C-8

On October 225 1985, prior to the

initiation of the AFOSI investigation,

Plaintiff submitted a third subsistence

voucher. Ad. Rec. Vol. XIV, Tab 7. Because

this voucher covered a period of time when

Plaintiff was staying first at a hotel and

then at an apartment, Mr. Schulz asked

Plaintiff on November /7, 1985 to put his

apartment expenses on a separate voucher. Ad.

REc. Vol. III at 416-173; Vol. IX at 1600; Vol.

XV, Tab 19. ‘Plaintiff complied and on

December 16 , 1985, he prepared and submitted

a fourth voucher. Ad. Rec. Vol. XIV, Tab 8.

On December 17, 1985, Plaintiff prepared and

subsequently submitted a fifth and final

voucher. Id., Tab 9.

B. Administrative Proccedings.

The statutory procedures generally

applicable to federal employees subjected to

separation for cause (see 5 U.S.C. 7513, 7701,

c-9

7703) are inapplicable to AAFES employees.

See 5 U.S.C 2105(c). Instead, the applicable

rights and procedures are provided by

regulation. See Army Regulation (AR) 60-21/Air

Froce Regulation (AFR) 147 -15 (reproduced in

pertinent part at Ad. Rec. Vol. XIV, Tab 1).

Following his review of the investigative

reports, defendant Colonel Lynch caused an

Advance Notice of Separation for Cause to be

prepared and issued to Plaintiff on February

24, 1986. Ad. Rec. Vol. XIII. Tab 1. The

Advance Notice specified the basis fer the

proposed action and advised Plaintiff of his

right to reply. __Id. on March 3, 1986,

Plaintiff submitted a written response to the

Advance Notice through his attorney. Id. at

Tab 4. Following considerable deliberation

and consideration of Plaintiff‘ts reply (Ad.

Rec. Vol. VII at 1245-46), Colonel Lynch

issued a Final Notice of Separation for Cause,

_ C10

which was’7 delivered to Plaintiff on March 12,

1986. Ad. Rec. Vol. XII1, Tab 6. Although

some of the specific allegations of misconduct

were resolved in Plaintiff‘s favor by Colonel -

Lynch, the Final Notice stated essentially the

same basis for the action as appeared in the

Advance Notice. Id. Plaintiff was separated

on June 3, 1986. Amended Complaint, 2.

Plaintiff appealed Colonel Lynch‘s

decision. Ad. Rec. Vol. XIII, Tab 8, An

evidentiary hearing before Mr. Compton, an

AAFES Hearing Examiner, began on April 28,

1986, and oontinued on April 29, 30, May 2, 5,

7, 9, 12, 13, and 14, and concluded on May 16,

1986. Ad. Rec. Vol. XVI, Tab D at 1.

Following submission of post-hearing briefs by

both counsel (Ad. Rec. Vol. XVI, Tabs E and

F), Mr. Compton rendered a report including

proposed findings and a recommendation that

the separation for cause be confirmed. Id. at

C-11

Tab D. Thereafter, following review by AAFES

Office of General Counsel (id. at tab C),

General Long reviewed the record, including

the transcript, and, on December 1, 1°84,

adopted the findings and recommendation of the

Hearing Examiner. Id.at Tab &. Generaly

Long *s decision constituted Final

adminsitrative action. AR 60-21/AFR 147-15,

para. 3-2%a.

COUNTS ONE, TWO AND THREE

In Count One of his Amended TOMO Las,

Plaintiff alleges that Colonel Lynch's ane

AAFES ‘s negligent decision to terminate him

resulted in a deprivation of a property

interest without due process in violation of

the Fifth Amendment. In Count Two of his

Amended Complaint, Flaintiff alleqes that

General Long violated his right to due proceve

under the Fifth Amendment and the

Administrative FProcedure Act by participatins

C-12

in the prosecutorial process leading to his

terminantion and later siting as an ‘Yappellate

authority" performing quasi-judicial

functions. Further, Plaintiff contends that

General Long ‘s refusal to reinstate him

resulted in a deprivation of property interest

without due proccess in violation of the Fifth

Amendment. In Count Three, Plaintiff alleges

that AAFES, Lynch, and Long have deprived him

of a liberty interest protected by the Fifth

Amendment because they charged him with the

commission of a felony and created a record of

such wrongdoing.

Defendants contend that the

constitutional tort claims in Counts One, Two,

and Three are against AAFES and the individual

Defendants in their official capacities are

barred by sovereign immunity since the United

States cannot be sued without its consent and

it has not consented to suit for damages

C-13

arising from constitutional torts. Se Qe »

Leham v. United States, 425 U.jD. 156, 160-41

(1981); Interfirst Bank Dallas, N.A. v. United

States, 769 F.2d 299, S09 (Sth Cir. 1982>,

cert denied, 475 U.S. 1081 (1986). Plairntif-

Claims that AAFES is not a sovereign; hence

the claims against it, and presumably alec

against the individual Defendants in their

official capacity, are not barred by sovereiaqn

immunity.

Plaintiff*s argument that AAFES is neat

sovereiaqn is premised on the fact that Géare®

is a non-appropriated fund instrumentalit

and, consequently, any award of damages

against it would not come from the publics

ee eaey, However, the Supreme Court has

held that AAFES is an arm of the governnent

which is entitled to the immunities from suit

enjoyed by the United States. Army and Air

Force Exchange Service v. Sheehan, 456 U.S. 7

28, 7353-34 (1982). See also, Champaign-Urbana

News Agency, Inc. v. J.L. Cummins News Co,

Inc., 632 D. 2d 680, 692 (7th Cir. 1980).

The Court concludes’ that AAFES and the

individual Defendants in their official

capacity are immune from suit.

The individual Defendants further move

this Court to dismiss Counts one, Two and

Three against them in their personal capacity

because these Counts are not barred by Bush.

The right of an individual citizen to sue

for damages for alleged constitutional

deprivations by a government official was

established by the Supreme Court in Bivens v.

Six Unknown Agents f the Federal Bureau of

— —S

Narcotics, 403 U.S. 388 (1971). However, the

Court in Bivens cautioned that a damage remedy

arising directly under the Constitution would

not be implied where there were "special

factors counselling hesitation in the absence

C-15

of affirmative action by Congress...". 1

1. When the words “special factors counseling

hesitation" were first used in Bivens, the

Supreme Court illustrated its meaning by

referring to Unites States v. Standard Oil

Co., 332 U.S. 301, Sil, 316 (1947) and United

States v. Gilman, 347 U.S. 507, 509, 511-13

(1954). In Standard Oil, the Supreme Court

concluded that issues involving federal fiscal

policy would constitute a factor counseling

hesitation. In Gilman, the Supreme Court

concluded that issues involving the relations

between the United States and its employees

should be deferred to congressional policy

determinations and, hence, would constitute a

factor counselling hesitation. In summary,

the special factors that the Supreme Court has

recognized do not concern the merits of the

particular remedy that was sought; rather,

they related to the question of who should

C-16

Id. at 396. In Bush, the Supreme Court

addressed the issue of whether a “special

factor" existed so as to preclude judicial

action on a damage suit where a government

employee was suing a government agent for

alleged constitutional violations asociated

with his employment.

In Bush, a government employee sued his

supervisor to recover damages for the alleged

deprivation of his First Amendment rights

caused by a disciplinary demotion. The Fifth

Circuit concluded that the relationship

between the Federal Government and its civil

service emp loyees was a special factor

counselling against the judicial recognition

of a damages remedy under the Constitution.

Bush _v. Lucas, 647 F. 2d S75, 576 (1981).

In denying the availability of a Bivens

decide whether such remedy should be provided.

Bush, 462 U. S. at 38a.

remedy, the Fifth Circuit noted that the role

of the Government as an employer toward its

employees is fundamentally different from its

role as sovereign over private citizens

generally. Id. The Supreme Court agreed,

emphasizing that the constitutional claims

arose out of an employment relationship that

was governed by comprehensive procedural and

substantive provisions Qiving meaningful

remedies against the United States. Bush, 462

U.S. at 368.

Although Bush involved a federal employee

covered by the Civil Service Reform Act (CSRA)

seeking damages for an alleged First Amendment

violation, the Eleventh Circuit has

specifically applied the Bush rationale to bar

a Bivens suit in a case remarkably similar to

the present case. Dynes v. Army and Air

Force Exchange Service, 720 F. 2d 1495 (11th

Cir. 1983). In Dynes, the plaintiff, an

C-18

OA te eM. OM. teh A Bowes no bee + Bo vas ean “ediew Ay AID obs CMTS SETI ab BO Ges Fe O90 HAD Ene SOS 26 ts

employee of AAFES, brought suit against AAFES

for allegedly violating his constitutional due

process rights by its decision to terminate

his employmert. The district court granted

AAFES summary judgment based on Bush and the

Elleventh Circuit affirmed.

The plaintiff in Dynes attempted to

distinguish Bush on two grounds. First, he

argued that Bush’s claim was based on a First

Amendment violation, which his claim arose

from a due process violation. Felying on the

Supreme Court’s analysis in Bush, the Eleventh

Circuit declined to create a new remedy

regardless of which constitutional right had

allegedly been violated. Ic. at 1498. The

second distinguishing ground raised by the

plaintiff was that his claim involved an

emp loyer /emp loyee relationship governed by

the AAFES regulations, rather than the civil

service regulations applicable in Bush. The

c-19

Eleventh Circuit dismissed this distinction as

inconsequential and noted that "CbjJecause

Dynes is a federal employee whose claim arises

out of an employment relationship that is

governed by comprehensive procedural and

substantive provisions giving meaningful

remedies against the United States, Bush v.

Lucas dictates that the regulatory scheme not

be supplemented with a new judicial remedy."

Id. Plaintiff in the present case contends

that the Elevent Circuit reached an erroneous

conclusion. 7

The specific issue presented in this case,

an AAFES employee seeking damages against his

supervisors for alleged constitutional due

process violations, has not been addressed by

the Fifth Circuit. However, the Fifth Circuit

has cited the Eleventh Circuit decision in

Dynes with approval. Gremillion vy. Chivatero,

749 F.2d 276, 278, n.9, 279 n.14 (Sth Cir.

C-20

1985). The Fifth Circuit has also applied the

Bush rationale to affirm a district court'’s

dismissal of a federal employee‘s Bivens

action alleging First and Fifth Amendment

violation where the employee was subject to

Veterans Administration regulations “which

were specifically designed to offer less

protection than the CSRA.” Heaney v. United

States Veterans Administration, 756 F.2d 1215,

1218 (Sth Cir. 1985). In Heaney, the Court :

government has provided a government employee

with a iain ies under . which a constitutional

claim arising out of the emp loyment

relationship is congnisable and some measure

of relief may be obtained, a nonstatutory

damage action is not available for discharge,

demotion or other adverse personnel actions

absent clear evidence of an intent by the

coordinated branch not to foreclose the

4 C[wlhere a coordinate branch of the

nonstatutory damage remedy.

Id. at 1220.

The Court concludes that Bush 1s

controlling in the present case. "CAIn

elaborate remedial eystem. . ° has heen

constructed step by step" and Plaintiff should

not be allowed to augment this system with a

Bivens actions only where the remedial system

was Congrestsionally created. As the court in

Dynes concluded, AAFES disciplinary

regulations satisfies the Bush requirement of

an “elaborate remedial system."

COUNTS FOUR AND FIVE

In Counts Four and Five, FPlainktire

alleges that AAFES and the United States

Department of the Army ("the Army") violated

-the Privacy Act, 5S U.S.C. SS2a(e) (5S) and

=). 2

2 Plantiff brings Counts four and five

under the juristiction provided by 5 U.S.C.

sec SS2a(g) (1) and (5). ~ “se

Section SS2ale) provides in relevant part:

Each agency that maintains a system of

records shall--

(3S) maintain all records which are used by

the agency in making any determination about

any individual with such accuracy, relevance,

timeliness, and completeness as is rien

necessary to assure fairness to the individual

in the determination;

(6) prior to disseminating any) record about

an individual to any person other than an

agency, unless the dissemination is made

pursuant to subsection (b) (2) of this

section, make reasonable efforts to assure

that such records are accurate, complete,

timely, and relevant for agency purposes; =e

‘

Flaintiff alleges that AAFES and the Army

intentionally and willfully failed to maintain

Plaintiff‘s records in accordance with the

above standard. Specifically, Plaintiff

contends that AAFES and the Army improperly

maintained the following documents:

(1) A “Serious Incident Report," prepared by

the AAFES Safety and Security Diviision, dated

December 24, 1985;

(2) A “Memorandum for Record," prepared by the

AAFES General Accounting Office, dated

February 21, 1986;

(3) An “Employer‘s Response to Initial Claim

for Unemployment Compensation, "orepared by

the AAFES Administrative Division--Personnel

Branch, dated June 13, 1986; and,

(4) A "Memorandum of Inquiry--UA Misconduct-—

HO AAFES," dated January 24, 1986.

Further, Plaintiff claims that AAFES willfully

and intentionally disseminated the "Employer's

Response" (document Number 3 above) anda

"Memorandum for Commander" to the Texas

Employment Commission ("TEC") in violation of

Section S52 ate) (6). C-24

The graveman of Plaintiff‘s Privacy Act

claims is apparently that he did not commit

the fraud which was the basis for his

discharge;therefore the agency records which

alleged or cerncluded that he did are not

accurate. 3

3. Plaintiff contends that such documents,

detailing AAFES’s accusations, caused his

discharge and caused him to accrue attorney

fees for the TEC proccedings. However, the

cause of Plaintiff‘s discharge was the

agency‘s determination that he did commit the

frauds; the documents in question merely

memorialize this determination.

C-25

Plaintiff had sufficient opportunity provided

by AAFES regulations to challege the

determination that he committed the fraud.

The Court concludes that Plaintiff‘s true aim

in Counts Four and Five is to collaterally

attack the correctness of the finding

supporting the discharge decision.

Relying on Borrel v. United States

international Communications Agenccy, 682 F.

2d 981 (D.C. Cir. 1982), Plaintiff contends

that an aggrieved federal employee may bring

an action under the Frivacy Act, despite the

fact that he may also have a complaint

relating to an adverse personnel action. The

Court agrees that a claim under the Privacy

Act could in other circumstances coexist with

a claim for an adverse personnel action.

However, the FPrivacy Act claim must be more

than an end run around an unfavorable agency

decision. Moreover, the Court notes that in

Borrell, the District of Columbia Circuit

C-26

never reached the issue of whether the

plaintiff had sufficiently states a Frivacy

Act claim. The court concluded that the

district court'*s findings were not specific

enough and, therefore, they ‘wemanded the

Privacy Act claim to the district court.

The Frivacy Act allows’ for tie amendaent

of factual or historical errors but is not a

vehicle for amending the judgments of federal

officials or of other parties as those

judgments are reflected in records maintained

by federal agencies. Pellerin v. Veterans

Administration, 790 £.2d 1553, i555 (11th Cir.

1986) (In Fellerin, the Eleventh Circuit did

not specify the each subsection of SS2a that

was at issue). "Moreover. it may not be

employed as a_skeleton key for reopening

consideration of unfavorable federal agency

decision." Id. (quoting from Rogers v. United

States Dept. of Labor, 607 F. Supp. 697 (N.D.

Cal. 1985) (emphasis added by the Eleventh

C-27

Circuit). "The Frivacy Act was not intended

ta shield [federal] employees from the

Vicissitudes of federal persannel management

decisions." Albright v. United States, 752 F.

me. eee «€©6190~=Cdw Ew «SCC. )=6— 984). Although

Plaintiff strains to fit his case within the

boundaries of the Frivacy Act, his complaint

really alleges only a wrongful personnel

decision. See Hubbard v. United States

Environmental Frotection Agency, 809 F. 2d 1,

2, (D.C. Cir. 1986).

COUNT SIX

Plaintiff moves the Court for eunmiar.

judgment on Count Six where he is seeking (i)

3 declaratory judgment that he is owed

$7,695.84 unjustly withheld by AAFES, ar (2)

injunctive relief for recovery of the money,

or (3) a determination that the taking of the

$7,695.84 violated his constitutional dus

process) rights. BRefore the Court can reach

the merits of Flaintiff's summary judqment

C-28

motion, it must first cetermine the threshold

question asserted by Defendants of whether

Plaintiff has alleged any proper basis for the

Court‘*s subject matter jurisdiction.

Both parties agree that the Court does

not have subject matter jurisdiction over this

claim absent a statute or other provision

which clearly waives AAFES*s defense of

sovereign immunity. 4 Plaintiff contends

that the Administrative procedure act (AFA), 5S

U.S.C. sec 701, et Sseg., provides Such 4

waiver. T2320 3 St Sec 7O2 prevides 17

realevant nart

re.e amt He a

4. Plaintiff first asserts that AAFES is not

"the sovereign" and is therefore not protected

by sovereign immunity. The Court rejected

this argument previously in this opinion. See

supra at 8-9.

C-29

"A person suffering legal wrong because

of agency action, or adversely affected or

aggrieved by agency action within the meaning

of a relevant statute, is entitled to judicial

review thereof. An action in a court of the

United States seeking relief other than money

damages and stating a claim that an neaney or

an officer or employee therof acted or failed

to act in an official capacity or under color

of legal authority shall not be dismissed nor

relief therein be denied on the ground that it

is against the United States or that the

United States is an indispensable party. The

United States may be nmamed as a defendant in

any such action, and a judgment or decree ma

be entered against the United States ....

(emphasis added). Flaintiff argues that his

Claim under Count Six is one for equitable

relief (i.e. declaratory and ‘énjunctive )

rather than for monetary relief; thus, 702 af

the APA effects a waiver of AAFES'’s «=

C=-30

immunity. The issue before the Court is

whether Count Six should best be characterized

as a claim for monetary or equitable relief.

The legal reasoning of the Fifth Circuit

im Amoco Froduction Co. v. Hodel, 815 F. 2d

392 (Sth Cir. 1987) is directly applicable to

resolving this issue. 5

3. The ultimate issue in Amoco was the same as

the present case--whether to characterize a

complaint as seeking monetary or non-monetary

relief; however, the importance of this

distinction was different. In Amoco, the

plaintiff was attempting to avoid the Tucker

Act*s grant of exclusive jurisdiction to the

Claims Court for monetary claims exceeding

$10,000 by couching the complaint in terms of

equitable rather than monetary relief. Since

the Fifth Circuit‘s analysis of how to

characterize the true nature of a claim is not

directly tied to the Tucker Act, it is

applicable to the present case.

— te ee ee

In Amoco, the plaintiff sought declaratory

and injunctive relief from a decision by a

tribunal of the Department of the Interior

("DOI") assesing them extra royalties and

penalties. The plaintiff argued that its aim

in the case went beyond any eventual claim for

a refund.6é

6. The plaintiff argued that the DOI’s error

in valuing the gas for royalty purposes would

be perpetuated in future audits concerning

that lease (and other leases) if the error was

not corrrected by a court with jurisdiction to

do so. Therefore, the plaintiff contended

that obtaining a declaratory judqment

establishing that the DOI‘*s valuation was

improper in order to prevent erroneous

assessment was the main purpose of that

lawsuit. Additionally, the plaintiff argued

that it required an injunction against future

use of the DOI‘s “erroneous” ruling. The

plaintiff acknowledged that a remand to the

wesewZe ee wae Se eS ee Se eS we Se a ss

’

Id. at 358. In Amoco, as here, no monetary

damages were sought, but in Amoco, as here,

money would be the natural consequence of a

decision favoring the plaintiff. Id. at 361,

365. Although admitting that Amoco presented

a "close case,” the court concluded that the

plaintiff was essentially seeking monetary

relief. _Id. at 361, 368.

DOI for a recalculation of its royalty

obligations would facilitate a subsequent

administrative refund request. Amoco, 815 F

2nd at 361.

C-33

The court reasoned that “the substance of

the pleadings must prevail ‘ona their form."7

Id. at 361. In determining the true character

of a claim, the court concluded that a court

muust “search for the ’essence* of the claim.”

Id. at 362. A court must “undertake to

discern the nature of the relief being sought

and focus on the type of relief that will

result from the action” in determining whether

the claim is seeking monetary or equitable

relief. Id. ‘(emphasis added). The court

attached great significance to the fact that

once the plaintiff obtained the declaratory

7. Although the Fifth Circit applied this

statement on "the murky areas of Tucker Act

jurisprudence,” this court concludes that it

is equally applicable anytime the true

character of the claim is being questioned.

Amoco, 815 F 2nd at 261.

_——--——- ee

‘

judgment, the refund process would be

instituted and a refund would be forthcoming.8

8. In distinguishing Sarasota, Fla. v. EPA,

799 Fe. 20d 674 (11th Cir. 1986), the Fifth

Circuit noted that a judgment in Sarasota in

favor of the plaintiff would only result ina

remand to the EPA to consider the grant

application and would in no way automatically

result in a monetary gain for the plaintiff.

Amoco, 815 F. 2d at 266. _

Id. at 365. In summary, the court concluded

that the plaintiff’s “primary objective” or

“ultimate aim" was to obtiin monetary relief.

Id. at 362.

Although Plaintiff did not request

monetary relief in Count Six, the Court must

look beyond the form of the claim and focus on

the type oF relief that will result.

Plaintiff readily admits that the “practical

effect" of a declaratory judgment would be to

require AAFES to pay Plaintiff $7,695.84.

Plaintiff‘s Cross Motion for Summary Judgment

at 2. As in Amoco, once Plaintiff is armed

with a declaratory judgment, the refund will

be forthcoming. Clearly, the primary

objective of Count Six is for Plaintiff to

obtain $7,695.84. (9)

9. Unlike Amoco, Plaintiff has not stated any

lofty goals he seeks to obtain through his

request for declaratory and injunctive relief

other than monetary relief. See supre note

and accompanying text. This 16 not a clos

case.

Plaintiff contends that the practical

effect of many of the Court's equitable

judgments relating to federal agency actions

result in a transfer of mony. Therefor

Plaintiff concludes "that it is not t hie

transfer of money_per se, but the legal

predicate to the cause of action which

properly characterizes a claim for relief."

Plaintiff’s Feply at 4. The Fifth Cireuwit

addressed this issue as well in AMmOctd. The

court recognized that za claim is mot

automatically transformed into a claim for

monetary relief just because money may lurk in

the background. Id. at 766. However, the

court distinguished suits which are

“necessarily connected" with the payment of

money From Suits where the gqranting mt

equitable relief has the incidental effect

‘quiring payments to be ma cde by the

qJovernment. Id. at 7263. As in Amoco, Count

21x 18S necessarily connected with the payment

wr money. The payment of money by the

government cannot be said to be an incidental

2Frect in this case.

COUNT SEVEN

At long last the Court has arrived at

Count Seven, where Flaintiff seeks judicial

review of the final agency decision sustaining

his termination for cause from AAFES. Both

parties filed motions for summary judgment on

this Count and agree that the following three

issues are to be decided by the Court: (1)

whether the charges of misconduct sustained in

AAFES*‘s final decision are supported by

substantial evidence in the administrative

record; (2) whether the decision to terminate

Plaintiff's employment, rather than some

lesser form of disciplinary action, WAS

arbitrary, Capricious, an abuse of discretion,

or otherwise not in accordance with law; and

(3) whether AAFES observed the procedures

required by law when removing Flaintifft.

A. Standard and Scope of Review.

__ The Fifth Circuit has held that a

court’s subject mater jurisdiction to reviev

claims for non-monetary relief involving AAFES

personnel decisions "flows from the confluence

c-38

of ze vU.8.C. vebt@) and S u.&S.C. 702. "

Gheehan vv. Army and Air Force Exchange

Service, 619 F. 2d 1132, 1141 (Sth Cir. 1980),

rev? d on other grounds, 456 U.S. 728 (1982).

While ‘Section 7O2 provides the right of

review, Section 706 provides the proper scope

and standard of review under the AFA. Section

7O& provides in relevant part:

The reviewing court shall--

(2) hold unlawful and set aside

agency ac Findings, and

conclusions foun i es

(A) arbitrary, capricious, an

abuse of discretion or

otherwise not in accordance

with law.

(B) contrary to constitutional

right, power privilege, or

immunitys;

jurisdiction authority or

C-39

limitations, or short of

statutory right;

(D) without observance of

procedure required by

law.

(E) unsupported by substantial

evidence in a case subject

to sections S56 and S557

of this title or otherwise

reviewed on the record

of an agency hearing

provided by statute; or

(F) unwarranted by the

facts to the extent

that the facts are

subject to trial de novo

by the reviewing court.

In making the foregoing determinaticns, the

court shall review the whole record or those

parts of it cited by a sien. and due account

C-40

pe ee

shall be taken of the rule of prejudicial

error.

Both sides agree that the Court‘s review for

Count Seven is confined to the administrative

record at the time of the agency‘s decision.

Citizens to Preserve Overton Park v. Volpe,

401 U.S. 402, 414-20 (1971); see Defendants*

Motion for Summary Judgment at 9; Plaintiff‘s

Response at 9.

B. Were the Charges of Misconduct

Against Plaintiff Supported by Substantial

Evidence?

The findings of misconduct sustained

in the final agency decision must be upheld

unless the Court concludes from reviewing the

administrative record that they are

unsupported by substantial evidence. The

Supreme Court has defined “substantial

evidence" as "such relevant evidence asa

reasonable mind might accept as adequate to

support a conclusion." Consolo v. Federal

C-41

Maritime Comm’n _, 2783 U.S. 607, 619-29 (1946)

(quoting Consolidated Edison Co. vy. Labor

Board, 305 U.S. 197, 229 (1938). The

possibility of drawing two incanstatent

conclusions from the evidence does not prevent

an administrative agency‘s finding from being

supported by substantial evidence. Id. at

620.

In the final administrative

‘decision, General Long adopted the Hearing

Examiner‘s determinaton that Plaintiff had

submitted falsified and fraudulent subsistence

vouchers and receipts for temporary living

expenses in violation of paragraphy 1-24, AF

.60-21/AFR 147-15 (10)

(10) "1-24. Falsification of records. a. Any

employee who, for the purpose of concealing or

misrepresenting a material fact, willfully or

unlawfully alters, falsifies, or destroys, or

causes to be altered, falsified, or destroyed

official AAFES or other Government documents,

, C-42

and 18 U.S.C. 1001. (11) Ad. Rec. Vol. XVI,

Tab Bs; at 16-19. The court concludes that the

agency decision was supported by substantial

evidence in the record.

records, or files, regardless of motive, is -

subject to separation for cause or other

disciplinary action." Ad. REc. Vol. XVI, Tab D

at 17.

(11) "Whoever, in any matter within the

jurisdiction of any department or agency of

the United States knowingly and willfully

falsifies, conceals or covers up by trick,

scheme, or device a material fact, or makes

any false, fictitious or fraudulent statements

or representations, or makes or uses any false

writing or documents knowing the same to

contain any false, fictitious or fraudulent

statement or entry shall be fined not more

than $10,000 c- imprisoned not more than five

years, or both.” 18 U.S.C. 1001.

ew amige gs

C-43

The rules and regulations governing

subsistence payments to AAFES employees are

set out in the Exchange Service Manuals (ESM).

Ad. Rec. Vol. XIV, Tabs 3 and 4. Under these

Provisions, AAFES will reimburse an employee‘s

lodging, meal ~° and laundry expenses while the

employee is occupying temporary living

GQuarters as a result of a permanent change of

station. Id. However, the employee is

entitled to reimbursement only for those

allowable expenses he actually incurs. id.

In order to obtain subsistence

reimbursement, an AAFES employee is required

to complete and submit a subsistence allowance

voucher. Id. Receipts for meal expense are

not always required tof be submitted with the

subsistence allowance voucher; however, if the

amounts claimed for such expenses appear

unreasonable or excessive, AAFES may require

submission of receipts prior to reimbursement.

Ad. Rec. Vol. XIV, Tab &. If the employee is

C-44

requested to submit meal receipts and does not

or cannot do so, claimed expenses may be

disallowed or reduced to an amount determined

‘to be reasonable. Id. Accordingly, employees

are advised to keep meal receipts. (12)

General Long, by adopting the Hearing

Examiner ‘s findings, concluded that the

subsistence vouchers were falsified and

fraudulent. Ad. Rec. Vol. XVI, TADBD at 6,

11. Plaintiff contends that the itemized

amounts on the vouchers were only estimates,

but that the total accurately reflected what

was actually spent. Ad. Rec. Vol. XVI, Tab D

at iis Vol. IX at 1427-28, 1590-91, 1602.

Further, Plaintiff contends that some of the

(12) Apparently, receipts are seldom requested

by AAFES; howover, the ESM clearly advises

employees to keep them See Ad. Rec., Vol. VIII

at 1347-48; Vol. XIV, Ttab 4.

inaccuracies were accidental. Ad. Fec. Vol.

IXk at 1469-70.

The Court concludes that the record

contains substantial evidence to support the

final agency action. For example, the record

shows that Plaintiff’s claimed meal expenses

were consistently and considerably higher than

expenses claimed by other AAFES employees who

transferred to Dallas within the same time

frame. Ad. Rec. Vol. I at 65-71: Vol. III at

517-18. Irn addition, the verifiable meal

receipts for Plaintiff and his family during

this time period reflected substantially lower

expenditures than Plaintiff claimed on the

vouchers. Ad. REc. Vol. XVI at 43; Vol. XIV,

TAbs 12-20. As to one of the inaccuracies,

Plaintiff contends he "forgot" to recorda

substantial credit he received on his hotel

bill, even though (1) he submitted the claim

less than three weeks after receiving the

credit, and (2) he should have been reminded

C-46

+ & eo Cw & 7 et —_

of this credit because his “accounting system”

should have been substantially out of balance

for the amount of credit. Ad. Rec. Vol. XVI ,

Tab D at 7. These examples, as well as others

throughout the record, clearly evince

substantial support for the agency’s charges

of misconduct.

Much of Plaintiff‘s arguments in his

Motion for Summary Judgment and his Response

to Defendants* Motion for Summary Judgment

rely on Plaintiff‘s truthfulness and

credibility as a witness. Plaintiff testified

at length in the administrative hearing and

attempted to explain the numerous

discrepancies and mistakes in his vouchers and

to negate any evidence of intent to defraud

AAFES or to falsify documents. Ad. Rec. Vol.

IX at 1426-1621; Vol. X at 1684- 1877; Vol.

XII at 2140-2255. The Hearing Examiner

specifically found each of the proffered

explanations unworthy of belief and generally

C-47 .

states that Plaintiff could not be relied

to be truthful. Ad. Fec. Vol. XVI, Tab D at

4-10, 18. The determination of the credibilit

of the witnesses i156 “ithin the discretion of

the presiding official who heard thei

testimony and saw their demeanor. (123)

(13) The Court notes that Plaintif’s behavior

at times was obstreperous and detrimental

influenced the Hearing Examiner‘*s opinion of

his demeanor as an appellant and wit

one occasion, the Hearina Euvaminer interiwnts.

Plaintiff’s testimony to warn him that :

-part of the things that I look for in the

hearing is the demeanor of the witness and.

- you realize that... you are not helnoina

yourself by behaving this way." Ad. Fec. Vol.

IX at 1560. Another time, the Hear inv

Examiner asked Defendants” witness to le

the room and then admonished Plaintiffé te

please stop "“makCing] faces at the witness’

and further threatened C-42

Griessenauer v. Dept of Energy, 754 F. 2c

3264 (Fed Cir. 1985). Here the Hearing

Examiner credited the testimony of

Defendants* witnesses and rejected Plaintiff's

conflicting testimony. The record fully

supports the Hearing Examiner‘*s choice.

Plaintiff has given us no convincing reason to

reject those credibility determinations and we

find no basis for doing so.

Plaintiff also argues in his Motion and

in his Fesponse that the Hearing Examiner

ignored evidence which supported his case and

that the Hearing Examiner continued to

to terminate the hearing if plantiff could not

comply with the warning. Ad. Fec. Vol. VI at

iOl7, His statements plainly indicated that

this was not the first time Plaintiff had

"made faces” at witnessess.

‘

violations. (14) This -our

The hearing Exam

— ” 7 “ “ f + + = arernri' (id

considered all. matters of rhe record Ad.

Rec. Vol. BV ie Tab D at 18, but foun

evidence whict =~onvinced him that a1f

actually S

subsistence vouchers.

(14) I additio t pecific allegaticr {

sat sions ne ; Ht

Violations, AAFEDS oriq} ly alleged that

matters which are incons

inaccurate 1n amount, or otherwise incorre +

form the basis for this action. Ad. Fec.

Vol. XVI, Tab Dat 10. FPlaintif objected to

this general charge because it failed to qi-e

him notice of the specific acts of misconduct

}

oO.

—

with which he

(tr

’

ase ee a >a ne in >a, _. 7 = « , a 7 wee ne ww. = «7 ——. |

—

;

specificaly addressed. the more salient of

Plaintiff‘s evidence in a section titled

"Evidence for the Appellant”. (15)

(15) A factfinder need not comment on or make

specific findings regarding every piece of

evidence or every argument advanced by a

party. See Talley v. United States Postal

Service, 720 F.2d 505, 507 (8th Cir. 1983),

cert denied, 466 U.S. 952 (1984).

Id. The Court concludes that Plaintiff‘s

evidence was not ignored, but was merely found

to be unconvinving. Further, the hearing

Examiner states that he disregarded the

general charge of wrongdoing and based his

Findings on specific charges. The court finds

no reason to disbelieve him. In summary, even

though there 1s some evidence in the record to

support FPlaintiff‘s case, the presence of some

contrary evidence does not prevent an

administrative agency‘s decision from being

C-51

C. Was the Fenalty of Separation a Valid

Exercise of faency Discretion?

"It is old law, of course that an agency

sanction within statutory limits can be upset

only if it reflects an abuse of discretion."

Haltmier v. Commodity Futures Trading Comm‘n,

994 F.2d 3556, 563 (2d Cir. 1977) (citations

ommitted). Courts have expressed " a gree

reluctance ... to become enmeshed in the

disciplinary process Cof an agency] and,

accordingly. great deference is accorded to

the sound discretion of the agency in such

matters." Westor

Me U.S. Dept. of Housing &

Urban Development, 724 F.2d 743, 949 ‘Fed.

Cir. i963). Agency choice of sanction may

constitute an abuse of discretion only ina

narrow range of circumstances: if the sanction

supported by substancial evidence. Consolo 35%

U. S. at 620.

és

is "unwarranted in law or - . .» without

justification in fact ....”" Butz v. Glover

Livestock Comm'n, 411 U.S. 182, 185-86 (1973)

(quoting American Power Co. V. SEC, 329 U.S.

20, 112-13 (1946)) The Court concludes that

these circumstances are not present here.

Applicable AAFES regulations generally

provide that an employee may be separated for

cause if his or her on-the-job misconduct

involves violation of laws, regulations, rules

of procedures nad other lesser forms of

discipline are determined to be inappropriate

because the acts of misconduct are of such a

nature that they are incompativle with the

best interests of AAFES. Affidavit of Colonel

Lynch, Attachment 2, AR 60-21/AFFR 147-15, 2-4a

and o~Ga. More particularly here,

Falsification of Government documents 15

expressly declared ot be an appropriae basis

For separation for cause. _Id. at 1-24.

In addition to the fact that Plaintiff's

c-53

separation is authorized by regulation, it is

Clear that numerous “courts have held that

separation is an appropriate penalty ‘for

Government employees who falsify travel and

subsistence vouchers. E.o., Quinton v.

Department of Transportation, 808 F.2d 824

(Fed. Cir. 1985); Tucker v. United Sates, &24

eaaee 1029 (Ct. Cl. 1980). Thus, the penalty

here is plainly not tuunwarranted in law.

Further, although termination seams a

harsh punishment For someone with an

unblemished twenty-four year record, it is not

without justification in facts. Colonel

Lynch*s decision to terminate Plaintiff wae

made only after a detailed (14)

(16) Colonel Lynch estimated that he spent

approximately twenty hours on reviewing this

case and making his decision to terminate

Plaintiff. Ad. Rec. Vol. VII at 1245.

ene

review of the evidence, the specifics of the

charges, Plaintiff‘s length of service, his

previous employment reord, and other facts and

circumstances pertaining to this case. (17)

(17) The parties agree that the factors

specified in Douglas Vv. Veterans * -

Administration, 5 M.S.P.B 313, 2232 (1981) are

relevant in determining the appropriateness of

the penalty selected by the agency. The

Douglas factors are: (1) the nature and

seriousness of the offense, and its relation

to the employee’s duties ., position, and

responsibilities, including whether the

offense was intentional or technical or

inadvertent, or was committed maliciously or

For gain, or was frequently repeated; (2) the

employee*s past job level and type of

Ad. Rec. Vol. VII at 1242-46. The Court defers

to Colonel Lynch’s well-reasoned decision. See

Ad. Fec. Vol. XVI, Tab D at 12.

employment, including supervisory or fiduciary

role, contacts with the public, and prominence

of the position; (3) the employee*s past

disciplinary record: (4) the employees* pal

work level, including lenath of service,

performance on the job, ability to qet along

with fellow workers, and dependability: (%)

the effect of the offense upon the employee's

ability to perform at a satisfactory level and

its effect upon supervisors*® confidence in the

employee‘s abilty to perform assigned duties;

(6) consistency of the penalty with those

imposed upon other employees far the same 5

Similar offenses; (7) consistency of the

penalty with any appicable agency table oF

penalties; (8) the notoriety of the offense o

its impact upon the reputaion of the agency;

D Were Procedures and rights afforded by

the Constitution, Applicable Laws, and

Regulations Observed?

(9) the clarity with which the employee was on

notice of any rules that were violated in

committing the offense, or had been warned

about the rehabilitation; (11) mitigating

circumstances surrounding the offense such as

unusual job tensions, personality problems,

mental impairment, harassment, or bad faith,

malice or (12) the .adequacy and effectiveness

of alternative sanctions to deter such conduct

in the future by the employee or others. The

Court concludes that the factors which are

relevant to this case were considered by

Colonel Lyncch and, on the whole, weighed in

favor of his decision to terminate Plaintiff's

employment. See Ad. Rec. Vol. VII at 1242-46;

‘

Jol. XVI, Tab D at AZe See also Nagel vy.

Dept. of Health and Human Services, 707 F.2d

C-57

As set out above, AAFES has, in al!

material respects, followed the prescribed

regulations qoverning separations for cause.

See Supra at 6-7. These rmquéatibhan satisfy

minimal due process requirements. see Bush y.

Lucas, 462 U.S. 367, 378 n. 14 386-85 (1993)

_(similar procedural scheme is “clearly

constitutionally adequate"). The alleged

deficiencies cited by: Flaintiff in his Motion

for Summary Judgment, his Response to

Defendants* Motion for Summary dJudament, and

his Response to Defendant's Statement of

—

Undisputed Facts and Issues of Law (filed

November 5S, 1987) did not deprive Plaintiff of

his constitutional due process rights or any

other right afforded by

1384, 1284 (Fed. Cir>® 1983) (the Douglas

factors are not to be applied mechanically and

consideration of lirrelevan* factors is not

required)

‘

applicable laws or regulations which were

cited to the Court. Further, none of the

cited deficiencies constitute prejudicial

error. 5 U.S.C. 706. © The extensive

administrative procedure followed in this

case more than adequately ‘protected

Plaintiff's rights under the constitution,

laws, and regulations. (18)

(18) The general charge, supra at 26 n.14, did

not adequately provide Plaintiff with notice

of the specific charges on which he was

charged. However, as noted above, the Court

can find no reason ‘to: disbelieve the Hearing

Examiner‘s statement that the disregarded this

charge when making his finding. Ad. Rec. Vol.

XVI, Tab D at 10-11.

1o ee ee eee

Conclusion

ACTION OF AFFELLATE AUTHORITY

Defendants‘ Partial Motion to Dismiss is

In Re The

GRANTED. Individual Defendants‘ Separate Appeal of Adverse Action of Mr. John F Castella

Motion to Dismiss or, alternatively, for : 1Dec 85

Date

Summary Judgment is GRANTED. Plaintiff's

Cross-Motion for Sumary Judament as to Count My decision is based upon a review of the

entire administrative record including the

verbatim transcript, exhibits, briefs of the

parties and the findings and recommendations of

the hearing examiner.

Six is DENIED. Defendants’ motion for Summary

Judgment as to Count Seven is) GRANTED.

Plaintiff's -

Cross-Motion for Summary Judgment I have determined that the hearing examiner’s

findings (Enclosure) are supported by the

evidence of the record. I hereby adopt the

hearing examiner’s findings as my own.

as to Count Seven is DENIED.

SO ORDERED.

The Appeal of the Final Decision of the Chief,

Administration Division, HO AAFES concerning

the Separation for Cause of Mr. John F.

Castella is denied.

a ; a)

DATED: April 29, 1988. The Separation for Cause is confirmed,

effective 3 June 197386.

This Decision is final and not subject to

c aad od

BAREFOOT SANDERS further administrative appeal or review.

ACTING CHIEF JUDGE

‘Northern District of Texas

JOHN E. LONG

Major General, USA

Commander

C-460

i i et a i ee ot ee

EO (Ronnie D. Compton/3700) 5 September 1986

SUBJECT: Appeal of Adverse Action —- Mr. Jahn

Fr. Castella

MEMORANDUM FOR: Commander

1. ACTION RECOMMENDED

Attached is the verbatim hearing transcript of

an Appeal filed by Mr. John F. Castella, afta

result of his Separation for Clause. I

recommend the Appeal be denied and the

Separation for Cause be confirmed. The

attached action will accomplish the

recommendation if you approve. Signature is

recomended.

2. PROCEDURAL HISTOFY OF THE CASE

Aa. An Advance Notice of Separation far

Cause, dated 24 February 19556 signed by Colonel

Harold D. Lynch, Chief, Admini¢tartion

Division, HG AGFES, was delivered to Mr.

Castella on 24 February 1986. [he baAS1S was

Mr. Castella falsified official SAFES

documents. Specificaily, he submitted

falsified subsistence vouchers and receipts for

temporary living expenses for the period, 25

July 1985 through 16 November 1985.

b. Mr. Castella did reply to the advance

notice in writing through his attorney, Mr.

Joshua Turin, within the prescribed time.

G. Following consideration of the reply, a

inal Decision, dated il March 1986, signed by

Colonel Harold D. Lynch, Chief, Administration

Division, HQ AAFES, was delivered to Mr.

Castella on if March 19846. Some of the

specific ailegations against Mr. Castella were

resolved in his favor by Colonel Lynch. The

Final Decision, absent the alleqations resolved

in favor of Mr. “Castella, stated the same

basis for the action as appeared in the advance

notice. The Final Decision specified that the

action to be taken was Separation for Cause.

The appellant was separated on 3 June 1986.

d.Mr. Castella is entitled to an evidentiary

hearing and to appeal the Final Decision af the

Chief, Administration Division, HO AAFES, to

you. Mr. Castella filed a timely appeal. His

“evidentiary hearing began on 29 April 19664,

continued on 29, 30 April, 2. 5S, 7, We tan ae

and 14 May and ended on 146 May 19784.

e. You are required by requlation to secure

the legal advice of your servicing General

Counsel, prior to rendering your determination.

This report and the attachments are forwarded

through that office for review.

=o. REMEDIES REQUESTED BY MR. CASTIELLA

a. Withdrawal of all accusations of fraud

and publication of a statement af retroactive

retraction, evincing reaard for the presumption

of innocence of which Mr. Castella has heen

deprived.

b. Reinstatement to the position previously

held by the employee.

Se Assumption by AAFES of all legal,

administrative and investigative expenses

incurred by Mr. Castella in the defense of his

honesty and integrity.

qd. Involuntary retirement with honor, in

accordance with paragraph 3-28c., AR 60-21/AFR

147-iS.

4. ISSUES

A. Did John F. Castella falsify subsistence

vouchers for temporary living expenses for the

period 25 July 19785 through 16 November 19857

b. Did John F. Castella claim reimbursement

for $181.80 lodaqing casts at the Holiday Inn,

Leominster, MA, to which he was not entitled?

c. Did John F. Castella submit Hilton

Receipt Number 24268 twice to support two

different claims: (1) in the amount of $29.85

for 27 July 1985; and (2) in the amount of

$68.49 for 29 July 1935S?

d. Did John F. Contathe sumbmit Singapore

Restaurant Receipt Number O2378 in the amount

of $68.15 dated 320 Julv 19857 Did Singapore

Restaurant records show Feceipt Number O2S78

was used on 28 July 1985 and the charges were

$34,657

I Did John F. Castella submit a Le Feleis

Restaurant Receipt Number O87412 in the amount

of 68.40 for five meals dated 29 Aug 1985. Did

restaurant records show Le Felaizs Festaurant

Receipt number 087412 was used on | oct. B= and

the charges were 26.42 for two meals.

¥. Where the receipts submitted hy John F.

Castella for meals allegedly eaten at tne

Howard Johnson's Festaurant on BY and 28 July

1985 and 4 August 19935, while steving at the

Holiday Inn, Leominster, MA, compared againgt

restaurant records and not matched by smounk

and date?

Q- Did John F. Castella submit a clearl»

altered gorcery receipt from Tow Titunhb in the

amount of $102.67 4s

he. Did John F. Castella submit a Monterey

House Restaurant Receipt with an altered date?

i. Did John F. Castella violate paragraph 1-

=4, AR 60-21/AFR 147-15

js. Did John F. Castella violate 18 USC

10017 a

Ks Were the actions taken by the Army and

Sir Force Exchange SErvice in accordance with

pertinent laws and regulatign.

S- BACKGROUND FACTS:

a. On 25 July 1985. the Appellant, his

wife, a daughter teen 1i2. and two sons (age it

and 14) began a Fermanent Change of Station

(FCS) move from Fort Devans, MA, to

Headquarters, Army and Air Force Exchange

Service (AAFES), Dallas Texas. They commmenced

travel on 7 August 1985, arriving in Dallas,

Texas on 22 August 1985, after making several

authorized intermediate stops. The Appellant

was authorized a subsistence allowance’ for

lodging, food, Laundry and dry-cleaning for

himself and his family in connection with the

move. The allowance ended on 12 November 1985

when the appellant moved into permanent

Quarters.

b. Sequentially, the following ®@vents

occurred in this matter. On approximately

August 1985, the Appellant tock a subsistence

voucher (Manaqement*s Exhibit CME) 3S) and his

travel expense voucher (Appellants Exhibit [CAL]

>) to Ms. Patsy Mulder. an Accountina

Technician in the Camptroller TPivision (CM).

The vouchers were in draft form and not ready

for review. Ms. Mulder teld the Appellant toa

attach all lodging and dry-cleaning receipts.

She also told him to save his m#2al receipts.

The Appellant said he did not’ save his meal

receipts, tecause no ane teld him to do sa.

c. The following day, the Appellant returned

with the vouchers. He submitted another

subsistence voucher sometime after September

—

eae

i985 (Me 6). Ms. Mulder examined the two

subsistence vouchers ‘MEs 3S and 4) and felt the

amounts claimed for meals were excessive. She

consulted with her Supervisor, Mr. Byron

Fetrou, and received approval to request food,

laundry and dry-cleaning receipts from the

Appellant (ME 23)

G. Qn 4 October 1985 ,. the Appellant

brought a memo (ME 24) and some receipts to Mr.

Fetrou. The original receipts had been xeroxed

in a collage format (For example see Hearing

Examiner‘*s Exhibit CHEE] 4, pages 25 and 26).

Mr. Fetrou had Ms. Mulder eoapare the receipts

to the two subsistence vouchers (MEs S and 4)

that had been submitted thus far. Ms. Mulder

made a working copy of the two vouchers and

compared the receipts to the amounts claimed

(MEs 29° and 20). The amounts claimed an the

vouchers were higher than the amounts on the

receipts.

— —_— > =~

e. A few days later (before Ms. Mulder had

completed her comparison), the Appellant

returned to bring Mr. Fetrou some more receipts

/- and to check on payment of his vouchers. Mr.

Fetrou asked the Appellant whe had written the

amounts on some of the receipts. The Appellant

told him he had filled in the amounts based on

his best recollection of what he had epent.

Mr. Fetrou said this was O.F., ¢o lono as the

receipts corresponded to what Appeliant spent.

¥. In late October, Mr. Fetrou took the

vouchers to his Supervisor, Mr. Wialter E.

Schulz, Chief, General Accounting, as 2 result

of Ms. Mulder‘s fincings. Mr. Fetroau did not

tell Mr. Sehulz the receipts were Lie

Apnellant*’s estimates of what he spent. Mr.

Schulz rearranged the receipts trom the collage

format into chronological order (ME 18). After

reviewing the receiphs and vouchers, Mr. Sehuls

felt the Appellant—-claimed money Ne did not

spend. He referred the matter to the Sarety

and Security Division (SS), who in turn

referred the case to the Air Force Office of

Special Investigation (AFOSI). A copy of the

AFOSI Investigation is at HEE 13. Subsequent

to the AFOSI Investigation, Mr. William H.

Cafferty, Deputy Chief, Safety and Security,

conducted a supplemental report. A copy of his

report is at AE 9.

6. EVIDENCE FERTAINING TO THE BASIS OF THE

ACTION

a. Management alleges the Appelant’‘s

subsistence vouchers and the receipts are false

and fradulent. The Appellant ultimately

submitted a total of five vouchers (MEs 5, 4,

7. 8. 9) plus some receipts, in support of MEs

b. In the following paragraphs. I wiil

First discuss the subsistence vouchers, and

then the specific receipts that Management

alleges are false and fraudulent:

(1) The Subsistence Vouchers:

(a) None of the amounts the

Appellant claimed on his subsistence vouchers

/-agree with what he actually spent on that jke.

At a minimum, I believe MEs 5 and 46 contain

inflated claims for meals for the 20 day pericad

covered by these two vouchers.

(b>) On MEs S and 4 the

Appellant‘s average breakfast claim was 24.36

for his family of five. This is %4.87 per

family member for breakfast meals during the 30

day period. The Appellant’s average lunch

Claim was 27.11. This is $5.42 per person for

lunch meals during the 20 day period. The

Appellant did not make a claim for breakfast oar

lunch on two days out of the 30 day period.

The appellant*s average dinner claim was $44, 30

every day for 39 days. This is 213.26 per

person. At a minimum, I do not believe an 1}

year old girl anda Ut year old bev can weak

that much food for such a sustained period of

time.

—

LOPE ATER, I SPIT TI PNA YS

Holiday Inn, Leominster, MA, I was able ta

extract the following meals from his motel

bills ME 19, ME 11 and the back-up checks MEs

iZ, 13, 14, 15 and ME 14. I believe these are

indicative of his familys eating habits.

DATE AMOUNT MEAL # OF FERSONS

=6 July $5.72 Breakfast =

=6 July 7213S Lunch 2

=6 July Soe a Dinner —_

27 July oon Breakfast =

sl July =.o1 Breakfast 1

al July 9.40 Lunch <

>1l July 3.00 | a > ;

OL August 9.i2 Lunch >

QO1 August 7.78 Lunch =

Ol August 29.00 Dinner m

M2 August Sewe Breakfast =

OF August 14,50 Breakfast a

(d) The following verified

receipts are nart of the record.

oo re

so. Based on the known figures and the absence

of verified receipts, I can only conclude he

spent approximately $17.37 at breakfast, 41°.

/»at lunch and $26.63 at dinner. These figures

are representative. The average exnenditures

Claimed on Mes 5S and 6 show the following:

$24.36 for breakfast, $27.11 for lunch and

$66.20 for dinner. This leade me to believe he

inflated his meal expenditures.

(hy The Appellant submitted

three edditional vouchers- ME 7” dated 22

October 1985, ME 8 dated 17 December L195, and

ME 9 dated 17 December 1985. ME 7 covered a

period when the Appellant was etaying First at

a hotel then at arn apartment. Mr. Walter

Schulz asked the Appellant to put his apartment

expenses on a seperate voucher, which promoted

ME @. The amounts he claimed for meals for the

same date on ME 7 went down overall when he

transferred the figures to ME &. Finally, his

claims for meals on ME 9 are less when compared

to all the earlier vouchers. He testifies he

was aware of the “investigation at the time he

completed MEs 8 and 9 and wanted to bring them

in line with CM*s award determination of $78.00

for meals. (See ME 25.) I believe these

vouchers are also false in the sense that the

amounts the Appellant claimed were not the

amounts he spent on that particular day.

(i) The Appellant testified

he began his FCS move with a known amount of

cash money, although he did not count it to the

exact dollar. He accounted for his

reimbursable expenses by counting the amount of

money he had left after each 10 days. he

always subtracted his estimated non-

reimbursables (1.@., gas, entertainment, and

vacation stops enroute) from his expenditures

for the particular period.

(j) He is not sure whe he

did his first 190 day count, but he did write it

= <_< St SC CUCU erlhCUC CCU CC

dewn on a note pad. He then used these figures

for his ished deieinines vouchers. The crux of his

defense is, the daily expenses are not

“necessarily accurate for aA particular day, but

they are accurate for the overall accountable

periacd. He stated he hind: cee kh

all of his 12 FCS moves. I do not believe this

is a reasonable method to accurately account

for travel expense.

(k) I corclude that all

entries for meals on the five subsistence

vouchers are false. I conclude the entries far

meals on MEs S ined 6 are fraudulently inflated,

based on my anaiysis of the Appellant’s known

expenditures and the lack of any receipts to

support the meals of $50.90 or more. I further

believe the meal entries on ME 7 ‘(which were

completed prior te the AFOSI Investigation)

that exceed the amounts I comoeuted for the

Appellant’s meal expenditures are also

fraudulently inflated, I believe that MEs 68

and 9%, completed after the Appellant knew of

the AFOSI Investigation, are more

representative, although still false entries,

of what he spent.

(2) The Receipts:

(a) Management set out seven

specific examples of alleged irregular

receipts. The following is Mangement‘s and the

Appellant's relevant evidence on each

allegation:

(b) Holiday Inn Receipt

1) Management alleged the

Appellant claimed reimbursement for $11.80 in

lodging costs at the Holiday Inn, Leominster,

MA, to which he was not entitled. She Holiday

Inn Receipt showed the Appellant was given

$181.80 credit against his total bill. AE 1 is

the receipt the Appellant submitted. ME 11 is

the receipt obtained from Holiday Inn records

by AFOSI. The credit represented two nights of

lodging at $90.90 per nigqht. On ME S the

Appellant did not show the credit, but rather

claimed the - full rate for eight nights of

‘lodging. The Appellant testified he was Siven

the credit, because one of his rooms was

partially flooded. Upon mentioning thi

checkout, the Manager gave him the credit. The

Appellant testified he was) submitting a large

number of hotel receipts for this period and

forgot about the credit. He simply extracted t

he room rate, because there were a number of

other charges on the bill, hence the error.

=) The Appellant's

explanation seems unlikely. The $191.80 credit

occured on 7 August, the day the Appellant

checked out of the Holiday Inn. The Appellant

prepared the voucher containing this claim on

27 August. The fact your hotel raom floods and

you are given a $181.80 credit seems like a

memorable event, especially within three weeks.

Ct)

Additionally, the Appellant‘’s cash money should

have been out of balance becuase he did not

have this expense. I believe he was trying to

get reimbursed for money he did not spend. The

credit was so obscure on the bill that it was

not noticed until well into the investigation.

I believe the Appellant thought the voucher

would be paid without notice of this windfall

credit. I find this allegation is established

_by the evidence.

{c) The Hilton Receipts

1) Management alleged the

Appellant submitted a Hilton Receipt number

24368 twice to support two different claims:

(1) in the amount of $29.85 for 27 July 1985:

and (2) in the amount of $68.40 for 29 July

i985. The Appellant did submit Hilton Receipt

24268 to support two different claims, neither

of which were for meals eaten at the Hilton on

those dates. The Appellant claimed $35.00 for

lunch on 27 duly 1985, and $80.00 for dinner on

DER, TEC Hae Yee Fe

2? July 1985. At the hea

testified this receipt wa

Hilton in Jekyll Island,

stayed while enroute to D

had one restaurant charge

Jekyll Island Holiday Inn

ring the Appellant

s obtained from the

Georgia. where he

allas. The Appellant

on his bill at “the

of $24.20. I believe

he obtained the receipt for that meal. The

Appellant, subsequent to the hearing, produced

the original and duplicate copy of Receipt

24368. I have attached a

copy. (See HEE 15.)

=) The Appellant testified

as to all the commercial meal receipts that

they were not meant to be

representaion of his meal

show he ate out commercia

an accurate

expense, but to anly

lly. He obtained

receipts when it was convenient to do so. Hs

kept them in an envelope.

Upon CM’s request

for the receipts, he filled many out based on

his best recollection of what his family would

typically spend at that particular type

restaurant.

yr her

—

mm HH HE HE HE & FF

>) He pulled the Hilton

Receipt and its duplicate from the envelope

without noticing it had the same number. He

points out the two receipts were copied

adjacent to each other on his original

submission. Therefore, he couid not have meant

to defraud anyone.

4) There is no question

this receipt does not represent the meals he

ate on 27 or 29 July 1985, because he obtained

it at Jekyll Island on 24 August 1985. There

is no question the amounts Gn the receipt are

false, because the Appellant admitted he simply

estimated his typical meal expense. However,

based on what I believe the Appellant typically

spent for a lunch meal and <dinner meal, I

believe these receipts are inflated, false and

fraudulent. Management alleged the Appellant

submitted Receipt 245368 twice to support two

different claims, apparently believing there

was only one receipt. The evidence shows there

RESTAURANT AMOUNT MEAL # OF FERSONS

Luthers =7.48 Dinner a

»Luthers 26.54 Dinner a

Monterey House 322.47 Dinner Ps

Singapore 74.65 Dinner r

Le Felais 26.42 Dinner =

(e) There are sleven

individual breakfast meals set Gut above for a

total of $32.27. This equals an average per

person cost of $23.02. Extended by a family of

five equals $15.10, and with an additional 15%

tip, the amount is 417.27. There are 10

Lunches for a total of $323.45. This equlas

$3.25 per person times five family members

which equals 416.75 and with an additional 15%

tip, the amount equals $19.26.

“*,

(fF) There are 39 dinners for

a total of 191.02 for an average of $4.27 per

person. The $6.27 times five members equals

$36.65. these figures are the little known

evidence I had concerning the Appellant's

family’s eating habits. I made some judgements

From the actual tickets on whether the meal was

a breakfast, lunch or dinner, depending on the

time of day, number of members ea

‘<

DvD

of food.

(q) There are a series of

recorded meals on hotel receipts that were

attached to his travel expense voucher (AE 3).

There are no actual restaurant receipts for

these meals. Therefore, it is not possible to

determine whether some or all of his family ate

the particular meal. THese entries are $10.36,

$11.00, $15.13, %17.45, $24.20, %239.58 and

$43.12. The Appellant did not produce any

verifiable receipts to support his dinner

expenditures that were over $50.00, I believe

it is likely the Appellant would have obtained

at least one verifiable receipt over $50.00. I

believe this, because he testified he randomly

obtained receipts, when it was convenient to do

was. in fact, ae Original and duplicate

receipt. My findings reflect this fact.

(d) The Singapore Receipt:

i) Management alleged that

Singapore Restaurant Receipt O2578 (ME 17, page

2) was submitted in the amount of $68.15 for 30

July 1985. and the charges were £34.65. This

is true. The variance was confirmed by the

AFOSI from the restaurants‘s copy of the actual

receipt (ME 19). The actual check was for five

guests on 28 July 1985 for $24.65.

2) The Apellant testified he

filled out this receipt based on what his

‘family typically spent at a Chinese retaurant

for dinner. This could not be true because

this receipt represents what the Appelant

actually spent at a Chinese restaurant for a

family dinner. I find the actual expenditure

on this receipt is close to the amount I

calculated his family spent for dinners while

| &

eating commercially. Finally, I find he used

this receipt to support a claim of $80.00 for

dinner on 30 July. I further note that on 28

July, the day he obtained the receipt from the

Singapore Restaurant, he claimed $88.00 for

dinner.

3) I conclude this receipt is

inflated, false and fraudulent.

(e) The Le Relais Receipt:

1) Management alleged that Le

Relais Restaurant Receipt 087412 was submitted

in the amount of %68.40 for five individual

meals eaten on 28 August 1985, but restaurant

records show the guest check was used on l

October 1985, and the charges were $26.42 for

two meals. A copy of the receipt turned in by

the Appellant is at ME 18, top of page 53. The

actual restaurant record(ME 20) shows” two

guests at $26.42. Testimony showed the date is

1 October 1985, although the date cannot be

determined from ME 20.

=) The Appellant testified he

and his family ate at this restaurant located

in the Plaza of the Americas five to eight

times. They ate there initially while checking

on ice skating lessons for his daughter at the

Plaza of the Americas. They continued to eat

there after the lessons beyan. Sometimes the

entire family ate at the La Felais. At other

times tne children ate elsewhere in the Plaza,

while he and his wife ate at the Le Relais.

>) Of all the receipts, this

one disturbs me most. His $26.42 meal at the

Le Relais occurred on Tuesday. 1 october 1995.

He turned in the first -batch of receipts on

Friday, 4 October 1985. He was on notice as

early as 23 September 1985 (ME 23) that

receipts were going to be required for his

vouchers. Yet, he obtains this receipt, that

he has to know he is going te turn in, and

writes in almost three times the amount he

actually spent. I cannot draw any other

nRaR Hee He He He HEF HE FE HE HEF EF HE EF FF fF Fs

conclusion except this reteipt is false,

inflated and fraudulent.

(#) Howard Johnson's Receipts:

1) Management alleged the

receipts submitted for meals eaten at the

Howard Johnson's ‘Restaurant on 27 and 28 July

and 4 August 1985 were compared against

restaurant records and could not be matched by

amount and date. (SEe ME 17, pages 1, 2, and

=). The receipt for 27 July was for five

guests at $67.32. The receipt for 28 July was

for five quests at $21.12. The receipt for 4

August was for five guests at $17.50. These

receipts were not seralized, nor did they

contain an address identifying the Howard

Johnson's Restaurant of origin. Agents of the

AFOSI interviewed Mr. Brian S. Vysocky, Manager -

of the Howard Johnson's in Leominster, MA,

where it was suspected the receipts originated.

Although unknown to either Mr. Vysocky or the

agents, it would have been impossible to match

the Appellant‘’s receipts to any restaurant

record because the amount was made up by the

Appellant. Mr. Vysocky’s search of restaurant

records, of course, did not turn up any

receipts that matched the ones submitted by the

Appellant. Although Mr. Vysocky told the

agents there were other Howard Johnson’s in the

area, no further checks were made. I suspect

further checking would not have turned up any

records that matched The Appellant’s receipt.

2) Mr. Vysocky did subsequently

present a statement (AE 8) wherein he states he

was shown pictures of the Appellant‘s family.

he recognized one of the Appellant’s sons as

being in the restaurant on several occasions.

I do not question the Appellant ate in some

Howard Johnson‘s Restaurant somewhere at

sometime. I do not believe he spent the

amounts claimed on these receipts on the date

indicated. In that regard, they are false. I

believe the 27 July receipt for $467.22 is

inflated. In that regard, I believe it is

fraudulent. Finally, in my opinion, Management

established this allegation as written.

(g) The Tom Thumb Feceipt:

1) management alleged the

Appellant submitted two Tom Thumb grocery

receipts that are clearly altered. The

Appellant submitted a copy of the original

receipt. (See ME 21). This receipt is very

confusing. At first it appears to be two

separate receipts. Upon inspection, however,

it appears to be one receipt folded in

different ways, based on identical heading

items and the data at the foot of each receipt.

In reality it is, in fact, one receipt. The

Appellant submitted th actual grocery tape

during post hearing submissions.

2) I have made a copy of the

actual grocery receipt and attached it at HEE

16. There is no question the Appellant

——

actually spent $102.06 at Tom Thumb, because he

submitted his check into evidence ‘HEE 17). -

The question is not whether he spent the money,

but whether he altered the receipt. I made

copies of this receipt and folded it the way

the Appellant apparently had to in erder to

produce the configuration at ME 21 (HEE 18).

It wasn*t easy, and I don‘t think it occurred

by chance. Realizing the danger of confusing

you and anyone else that reads this, I offer

the following folding instructions. If you

hold the receipt so that the typed Number 1 is

above the typed Number 2 on the left of the

receipt, you have the receipt that appears on

the left of ME 21. For the receipt on the

right, you fold the receipt so that the Number

1 is just above the 2 and the Number 3 is just

above the 4. Additionally, the blank top of

the receipt must be folded back. I believe the

Appellant was trying to configure one receipt

so that it appeared to be two. The Appellant

testified he does not recall how he folded the

receipt. Logically, a reasonable man would

probably fold the receipt double and copy each

Side. It can be done much easier that what the

Appellant did. I know, because I did that too.

Additionally, the Appellant obviously had the

Original receipt at the time he made the copy,

and in fact, still had it throughout hte case.

I don‘t know why he didn* submit it earlier. I

conclude, based on the -manner the receipt was

presented and coupled with the complicated

folding, that the receipt was altered from its

Original state. I believe the Appellant did

this to increase the number of grocery receipts

he submitted to support his claim. I do not go

so far as to say it was clearly altered,

becaused there is nothing clear about the

receipts at all. Rather, I believe it was

misleading on its face. My findings so reflect

this conclusion.

(4) Evidence for the Appellant:

(a) The following is evidence for

the Appellant, in addition to that set out

above.

(b>) The Appellant's main defense to

the allegations is that he actually spent the

amounts he claimed. In fact, he states he

-spent more than he claimed on his subsistence

vouchers. The amounts he wrote on the receipts

were only estimates, and were never intended to

be accurate. I find no evidence in the record

that convinces me he spent the amount he

Claimed for various meals.

of other issues in defense of the allegations.

I have reviewed and carefully considered each

one. I do not find any one, nor any

combination of all of them, rise to the level

of a legal excuse for the underlying basis of

this action. An excellent brief of these

ie,

issues can be found in the Appellant‘s Brief in

Support of Administrative Appeal. The brief is

attached to the notebook that contains the

exhibits.

(d) The Appellant called Lieutenant

Colonel John F. Manning U.S. Army Retired, and

a former AAFES employee wno testified in part

concerning the Appellant‘s character for truth

and honesty. LTC Manning had the highest

regard for the Appellant.

(e) Mr. Michael Beverly, Deputy

Director, FPurchasing Policy Directorate, also

testified concerning the Appellant‘s character.

He too, believed the Appellant had excellent

character for honesty and integrity.

(Ff) The Appellant offered Character

Statements from current and former AAFES

employees, friends and military officers. All

the statements are very laudatory of the

Appellant. (See AE 22). Additionally, at page

(h) The Monterey House Receipt:

1) Management alleged and

proved that a receipt from the Monterey House

Restaurant had an altered date (Me 18, page 2).

The Appellant acknowledged he wrote in a

different date because he didn‘*t see the

‘printed date. I also note this receipt is

probably for seven meals based on the items

listed on the receipt.

2) I conclude the date

entry is false, because clearly the Appellant

did not eat at the Monterey House on the date

he wrote on the receipt. Father, he ate there

on the date mechanically printed on the

receipt.

(3) The General Allegation:

(a) Management alleged that

all matters which are inconsistent, misstated,

inaccurate in amount, or otherwise incorrect,

a ae

‘om eee

form the basis for the action. The Appellant

objected to the general charge, because he was

not given fair notice of the specific acts of

misconduct that were being considered under

this charge. Management agreed that this

charge, standing alone, would not meet minimum

due process requirements of fair notice to the

Appellant. The Appellant conceded that other

acts of the Appellant could be considered

outside the specific allegation to draw

inferences and to determine credibility.

(b) It is not necessary for me

to consider this allegation to reach my

recommendation in this case. Management

alleged the subsistence vouchers were falsified

and fraudulent. I believe they are, as set out

above. Management alleged and proved the seven

specific allegations (with two variations)

concerning the receipts. I have disregarded

this charge. I recommend that you also

disregard it in reaching your decision.

x or

33. HEE 4, the Appellant submitted a Character

Statement from Mr. Martin FR. Handel, AAFES

Comptroller. Mr. Handel believes the Apnellant

has a , High level of competence,

professionalism and intearity.”"

(3) The Principal Management Official:

(a) Colonel Hareld D. Lynch, Chief,

Administration Division, testified he was the

Management Official that separated the

Appellant.

(b>) Colonel Lynch believed the

Repel ient intended to draw the maximum

subsistence allowance he was authcrized. He

does not believe the Appellant expended the

amounts he claimed. He believes the Appellant

fraudulently falsified his travel claims.

recommendation of the Appellant’s Supervisior,

Mr. James McKinney, that the Appellant should

be separated. He also considered the

recommendation of Mr. Handel who thought the

Appellant should not be fired.

(d) Colonel Lynch considered the

options of reprimand, suspension and separation

which were the disciplinary actions he believed

were available to him. He decided that

separaton was the only appropriate action. In

reaching this decision he considered the

offense to be major, but unrelated to the

Appellant's position. He thought the variances

between the receipts and vouchers could not

have happened by accident. In his opinion, the

Appellant should have known how to properly

prepare the voucher. He believed the Appellant

expected to gain from the transaction. Colonel

Lynch did not compare this case with other

Similar cases, because he was unaware of any

others. He considered that the Appellant ‘s

Supervisor believed the Appellant to be

b. The rebuttal evidence in this case

centered around the appellant’*s business

dealings concerning his home in the Duncanville

area.

c. The evidence pertaining to the home

obviously has little to do with the specific

charges in this case. [t should be considered

with caution. The Appellant through testimony

and doucuments put in evidence of his qood

character. When the Appellant pteces his good

character in issue, AS occurred here,

‘Management does not have to sit idly by.

Management‘s theory is that the Appellant

wrongly obtained extensions of his subsistence

period in order to remodel his home, by usina

the guise it had been severly damaged by the

former tenants. The following evidence should

be considered by you not to establish any part

of the case on the merivs, but as rebuttal

evidence of the Appellant‘s claim of good

character for truth and honesty. The Appellant

2 a ——————————oEoeeEeeEeeeeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeeeeeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEeEelleeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeEeEEEEEeEeEeEeEeeeeEeEeEeeeeeeEOEOoeEeeEeEeEeEeEeEOEeee—ee——EEeEeeeeeerrrrmreceeeeeeaeE=Oeeeeeeeeeeeeeeeeeee ee ee

rented his house in Duncanville while he was

assigned as the General Manager, New England

Area Exchange. He found, upon his return, it

had been damaged by the tenants and by various

water leaks. He decided to have some

remodeling done at the time he had the water

and tenant damage repaired.

d. The Appellant was entitled to 60 days

of subsistence upon his PCS move from New

England. On 12 September 1985 he requested and

was approved for an additional 60 days to

terminate on 5S December 1985 (ME 22 ). His

request was based on the unacceptable condition

of his house caused by the former tenants. He

asserted he had a 10,000.00 claim against his

insurance company for the damage. He did not

mention the remodeling of the house in his

request (ME 22). Both LTC Manning and Mr.

Beverly testified there was substantial damage

to the house. There are some pictures of the

damage at AE 20. The Appellant believed the

dishonest. He was not aware of any unusual

pressures on the Appellant thet would cause the

Appellant to do the things he did. Colonel

Lynch reviewed lesser penalties, but rejected

each. He does not believe rehabilitation is in

the best interest of the ekrh ten: Finally, he

considered the Appellant‘*s qood performance,

length of service and the fact he had not prior

disciplinary record.

(e) Colonel Lynch testified it

would have taken some documentary evidence to

refute several of the specific alleqations, and

for him to be convinced the other mistakes were

honest errors. Colonel Lynch stated no one

tried to influence his decision. it was

solely his.

(F) I do not subekitue my

judgement for that of the Management Official

in cases where the factual allegations are

established and the Management Officials

decision is not arbitrary, capricious or an

abuse of discretion.

(gq) In my opinion, Colonel Lynch

made an informed decision based on the evidence

he considered. I do not believe his decision

was arbitrary, capricious or an abuse of

discretion. I do not believe the two

variations I made in my findings would have

affected Colonel Lynch‘s Final Decision to

separate the Appellant.

7. REBUTTAL EVIDENCE:

a. ESM 15-S allows both parties to

present rebuttal evidence, following the case

on the merits. Boths parties availed

themselves of this opportunity. Rebuttal e

vVidence is evidence given to explain, repel,

counteract or disprove facts given in evidence

by the adverse party.

work would take about 30 days, commencing about

iS September 1985.

e. Within this framework, Mr. Timothy F.

Johnson, General Contractor, testified as

‘follows: Approximately the first week of

September 1985, he was contacted by the

Appellant to inspect the house. He met with

the Appellant and the Appellant's wife. They

walked through the house. The 4ppellant told

Mr. Johnson he wanted some remodeling done (to

include a spiral staircase) and had wanted to,

even before he left for New England. The

majority of the work was remodeling, rather

than repairing the damage. Mr. Johnson did see

tenant and water damage in the house.

—f. The Appellant wanted Mr. Johnson to

meet with his Insurance Adjustor, Mr. John

Yowell. Approximately a week later, Mr

Johnson met with the Appellant, Mr. Yowell, and

a second general contractor, obtained by Mr.

Yowell. The Appellant told Mr. Johnson he

wanted him to be an unbiased contractor as he

came through the house with the insurance

company‘*s contractor. Prior to submission of

the bid, the Appellant told Mr. Johnson he

wanted to get as much as he could out of the

insurance company in order to reduce the amount

he needed to borrow for remodeling. Mr.

Johnson submitted his bid for $9,950.00 on 16

September 1985. (See ME 37.) The other

contractor, Claude Jones of J.0. Lochridge

Contractors, submitted his bid on 17 September

1985 for $8,882.91. (See ME 36.) Mr. Johnson

testified he inflated his estimate at the

Appellant’s request. The insurance company

generally pays on the lowest acceptable bid.

According to Mr. Johson, assuming one bid

(Lochridge) is honest, the inflated bid

(Johnsons’s) will cause the insured party to

get as close to the true recovery as possible.

If both bidders are competitively bidding,

there is a possibility the lower bid will be

less than a full recovery. The Appellant,

subsequently, contracted with Mr. Johnson for

the repairs and remodeling (Me 25). There was

not completion date stated in the contract.

Mr. Johnson stated the Appellant told him he

“had all the time he needed because he worked

for the Government and had a place to live.

Mr. Johnson estimates it would have taken him

two weeks to make the repairs without the

remodeling. Mr. Johnson began work an

approximately 18 September 1985. Mr. Johnson

further estimates he could have completed, had

it been repairs only, in the first week of

October.

g. The majority of the work was completed

by the end of October. During this period,

Mr. Johnson went on a hunting trip. The work

on the house continued through his

Subcontractors under the supervision of his

superintendent. The Appellan! elaime this

delayed the project. Mr. Johnson claims the

;

‘

delay was due to the Appellants frequent

changes. In early November, the Appellant told

Mr. Johnson, "The heat is on, I have got to

move in."

h. The Appellant and his wife did makea

number of modifications or additions to the

Original contract. Eventually, the

relationship deteriiorated over what Mr.

Johnson would be paid to a point that the

Appellant defaulted the contract.

i. mr. Johnson submitted a final bill

amounting to $2,600.00 for the extra work that

had been done. (See ME 40.) The Appellant

rebutted the bill by claiming the contractor

really owed him $2317.00, after considering

materials, amounts he paid others to accomplish

work, and credit for discrepancies in the

contract. (See ME 41.)

j. Mr. Johnson found the Appellant would

not hold up to his word. MF. Johnson

testified the Appellant would tell a

subcontractor something, but deny he did soa

when confronted.

k. For example, Mr. Johnson testified the

Appellant initially stated the kitchen cabinets

that had been installed by a subcontractor were

acceptable. Several days later. he called Mr.

Johnson complaining about them. The doors had

been special ordered, but when they were

installed, Mrs. Castella said what was not what

she wanted. Mr. Johnson told the Appellant a

remake of the doors would be extra. Later the

Appellant refused payment for the cabinets.

Mr. Johnson told the subcontractor he would not

pay him until the Appellant was satisfied.

The subcontractor tried, but failed, to satisfy

the Appellant. The subcontractor evetually

confronted the Appellant as payment. The

Appellant told the subcontractor he had already

paid Mr. Johnson as noted on the final check.

Serre

Mr. Johnson denies he was ever paid for the

cabinets. Mr. Johnson has not paid the

subcontractor. Mr. Johnson stated after

working with the Appellant and his wife, he has

learned to dislike them.

le Mr. John R. vat’. Farmers Insurance

Group, testified on behalf of the Appellant

that he first inspected the Appellant’s house

in early September 1985. It was untenantable

at that time. He obtains contractors to

estimate damages when he believes the repairs

will esceed $5,900.00. He does not believe the

house could be repaired in two weeks. He

estimates at least 30 days or longer. He

stated it is very common for an insured to

remodel at the same time as he makes repairs.

In fact, sometimes remodeling speeds up

repairs, because instead of repairing a wall,

you simply knock it out.

m. Ke did not know Mr. Johnson prior to

this dealing. It is not unusual for one bid

to be higher than the other. He does not

always accept the lowest bid. He considers

which is the most acceptable, rather than which

is simply the lowest.

n. He believes inflating a bid is a

dishonest practice. Had he known Mr. Johnson

inflate his bid, he would have gotten a third

estimate.

Oo. Mr. Yowell usually finds the insured

wants to list all potential claims as soon

as possiple.. The Appellant wae no different.

Me 34 is a summary of charges the Appellant

wanted coonsidered. It includes a claim for

living expenses for 20 days at €170.90 a day.

The Appellant told Mr. Yowell he was receiving

living expenses from his employer. Mr. Yowell

told him he could not have a double recovery.

The Appellant did not pursue the living

expenses claim. He later amended the claim in

November from Living Expense to Lost Fent.

se ee ae eS ae eS SS ae a a fs ss &

—

(See paragraph 5S, ME 43.) Mr. Yowell suggested

the claim for lost rent to the Appellant. Mr.

Yowell testified the Appellant was. honest with

him from the beginning of the claim concerning

the living cnnie. Mr. Yowell recalls his

company paid out some $23,900.00 on the claim.

This recovery included both the tenant damage

and the water damage. This amount is less than

the actual damage due to deductibles and

adjustments.

p. On cross examination, Management

raised issues concerning the Appellant*‘s claim

for repairs to the house. AT paragraph 4d, ME

42, the Appellant made a claim to the insurance

company in mid-October 1985 to, "Replace hig:

wall on garage side--tape, paint and texture

$250.00." He claims, “These were charged to

the undersigned by the contractor and not

included inthe first claim." On ME 40, Mr.

Johnson made demand for, "Sheetrock, tape, bed

- garage $200.00." On ME 41, the Appellant

refused payment to, “Tape, bed sheetrock garage

- work was completed by one man in less than

one hour; never discussed with undersigned

=~ 9 -,*

q. The Appellant made an additional claim

for installation of his dishwasher for $ 120.00

(paragraph 4e, ME 42). The contractor billed

the installation at $50.00. (See ME 40.) The

Appellant refused payment to the contractor for

installation of the dishwasher. He claimed it

was part of the contract. (See ME 41.) Mr.

Yowell does recall he did not pay the full

$120.00 that was claimed.

r. Mr. Yowell explained the Appellant‘s

claim was handled as an estimate of necessary

work. He does not care- whether the insured

pays for the work or not, so long as it is

actually performed.

7 In the pertinent parts of a Fast

ge as

Hearing Affidavit (AE 25) requested by me, the

Appelant denies he intended to remodel his

house even before he was transferred to New

England, because he put it up for sale. He

denies he ever told Mr. Johnson anything about

his intent to remodel.

t. The appellant denies he told Mr.

Johnson that he wanted to get as much as

possible from insurance coverage. He denies he

told Mr. Johnson to inflate his damage

estimate.

Ue The Appellant states he had to deal

with the subcontractors because Mr. Johnson was

not available. The only time there was a

supervisor present was during Mr. Johnson‘s

hunting trip.

v. The Appellant says he first liked the

cabinet work, but upon closer inspection, he

found them unsatisfactory.

We He claims 1 =. as Mr. Johnsons

responsibility to pay the subcontractor for the

cabinet work. He states he has paid the vast

majority of Mr. Johnson's $26,125.00 bill. The

‘reason he has not paid all the bill is due to

his dissatisfaction with the repairs.

Me In my opinion, the rebuttal evidence

submitted by Management seriously eroded the

Appellant‘s evidence of qood character for

truth and honesty. First, the testimony of Mr.

Jahnson that the Appellant asked him to inflate

the bid is strong evidence of dishonesty on the

part of the Appellant. Although Mr. Johnson

obviously committed a dishorest act himself,

his testimony is very reliable evidence because

it is a statement against his cwn interest. He

has nothing to gein by this testimony and could

be exponsed to adverse Consequences for a

fraudulent estimate to the insurance company.

Secondly, the Appellant‘’s dealing with Mr.

wel! ae

Johnson's demand for payment, when considered

against the Appellant’s insurance claim,

appears dishonest to me. Finally, the

remodeling consisted of a number of major

changes in the Appellant‘s home to include a

spiral staircase. (See ME 78.) I believe the

Appellant intended to extend his subsistence

period to allow time for this remodeling at the

time he made the request for the extension.

The Request for Extension was dated 12

September 1985. This is after he had met with

Mr. Johnson to discuss remodeling. He did not

mention remodeling in his request, but only

repairs (ME 22). The repairs seem to be a

legitimate reason to stay on subsistence. I do

not think remodeling is a proper basis.

However, I could not find any regulation

setting out acceptable reasons for extension of

subsistence. I believe he should have

disclosed the fact he intended to remodel, in

order for AAFES to make an informed decision

concerning the request for extension. In my

Opinion, his failure to disclose this basis for

his request is dishonest and undercuts his

credibility.

8. REGULATORY AND STATUTORY BASIS:

a. Management asserts the Appellants

actions violate paragraph 1-24, AR 60-21/AFR

147-15, Exchange Service Fersonnel Folicies

and The Federal Statute, 18 U.S.C. 1001.

b. The pertinent part of paragraph 1-24,

AR 60-21/7AFR 147-15 provides, "Any employee

who, for the purpose of concealing or

misrepresenting a material fact, willfully or

unlawfully alters, falsifies, or destroys or

causes to be altered, falsified, or destroyed

official AAFES or other Government documents,

records, or files, regardless of motive, is

subject to separation for cause or other

disciplinary action."

aa fF

C. Section 1001 of Title 18, United

States Code, is a Criminal Statute. The

statute provides, "Whoever, in any matter

within the jurisdiction ot any department or

agency of the united States knowingly and

willfully falsifies, conceals or covers up by

trick, scheme, or device a material fact, or

makes any false, fictitious or fraudulent

statements or representations, or makes or uses

any false writing or document knowing the same

to contain an false, fictitious or fraudulent

statments or entry shall be fined not more than

$10,000 or imprisoned not more than five years,

or both."

9. STANDARD OF PROOF:

The standard of proof for all findings in this

matter is by a preponderance of the evidence.

Paragraph S.d., Exchange Service Manual (ESM,

is; defines that standard as, "...evidence

that is of greater weight or more convincing

than the evidence offered in opposition to it

that is, evidence which, as a whole, shows

the fact sought to be proved is more probeble

than not."

10. ANALYSIS:

a. I have concluded the amounts the

Appelant claimed for food on MEs 5%, 6 and 7 are

false, fraudulent and inflated. I further

conclude the amounts the Appellant claimed for

food on MEs 8 and 9 are false in the sense he

did not actually spend the amount he reported

for a particular day. I believe this violates

paragraph 1-24, AF 60-21/AhFR 147-15. I beliéve

the Appellant intended to micrepresent the

amount of his expenditures so as to receive the

maximum authorized reimbursement. I believe he

falsified the subsistence vouchers. which are

official AAFES doucuments, to reach that goel.

I further believe he expended some unknown

amount of money during his period on

subsistence allowance, both on items that were

nae aE aeETlUceaeaeETlCUraeErlUCUCrEereErlUCUCcererlUCUCrecererlUCUCrereerlUCreerlCee eee eee Ce

reimbursab;e and items that were not

reimbursable. In my opinion, the appellant

sought to recover as much of or all of his

expenditures for travel with reckless disregard

‘ For whether the item was reimbursable. His

method of accounting for expenditures would

certainly facilitate this recovery. Finally, I

do not believe the receipts violated this

provision, because they were not official AAFES

documents until submitted. It appears the

falsification of the receipts occurred while

still in the hands of the Appellant.

b. The Criminal Statute 18, USC 10901,

requires proof of five essential elements. In

an administrative action each element must be

established by a preponderance of evidence

standard, such as set out above. There must be

a statement, it must be false, material, made

with a specific intent to decieve and within

the agency’s jurisdiction.

Ce I’ believe the subsistence vouchers and

receipts were statements. They were false as

set out in this opinion. They were material,

and within the jurisdiction of GAFFES.

d. The critical element is the

Appellant’s specific intent. You should be

satisfied it is more probable than not the

Appellant intended to deceive when he submitted

the vouchers and receipts. I conclude he did.

e. The purpose of the statute is so the

Government can rely on the many representations

made by individuals in the course of day - to-

day business. In this case, I believe the fact

the Appellant falsely reported expenses isa

more serious matter than the amount of money

involved. I believe his acts destroy his

credibility as an AAFES executive. I simply

could not rely on him to be truthful.

#. The Court in United States v. Myers,

131 F. Supp. S25(UDDC ND CAL 1955) set out to

be what I believe to be the purpose of 18

U.S.C. 1001. when it said, "It (referring to 18

U.S.C. 19091) is in effeet designed to insure to

the whole world, governmental employees and the

general public alike, that any record,

document, instrument or statement made by a

governmental employee, great or small, in his

official capacity and in the course of his

official duties can be relied upon by all."

g. I do not believe the Appellant's

report of his subsistence expenses meets this

standard.

he. This opinion is based on all matters

in the record. It should not be used as a

substitute for a complete review of the record.

It represents my sole independent opinion.

ii. FINDINGS: findings Number "c" and "gq"

differ from those set out in the Final Notice,

based on evidence of record. I do not believe

the variance would have affected the Final ;

Decision to separate the Appellant. The

Hearing Examiner finds from the evidence that:

a. John F. Castella did falsify

subsistence vouchers for temporary Living

expenses during the period 25 July 1985 through

16 November 1985.

b. John F. Castella did claim

reimbursement for $181.80 lodging costs at the

Holiday Inn, Leominster, MA, to which he was

not entitled.

c. John F. Castella did submit a copy of

the original Hilton Feceipt Number 24248 to

support a claim in the amount of $29.85 for 27

July 1985 and a copy of the duplicate carbon of

the original Hilton Feceipt Numer 24268 to

support a claim in the amount of 665.40 for 29

July 1985.

qd. John F. Castella did submit Singapore

Feceipt Number 92378 inthe amount of $68.15

for 320 July 1985. Singapore Festaurant records

showed Feceipt Number 902378 was used on 28 July

1985, and the charges were $234.65.

e. John F. Castella did submit a Le

Relais Festaurant Feceipt Number 087412 in the

amount of %68.40 for five meals on 283 August

1985. Restaurant records showed Le Felais

Restaurant Feceipt number 9087412 was used on 1

October 1985, and the charges were $24.42 for

two meals.

—. Receipts submitted by John F. Castella

for meals allegedly eaten at the Howard

Johnson’s Festaurant on 27 and 28 July 1985 and

4 August 1985, while staying at the Holiday

Inn, Leominster, MA, were compared against

restaurant aneeaa and could not be matched by

amount and date. |

g. John F. Castella did submit an altered

and misleading grocery receipt from Tom Tihaumb

“in the amount of $102.06.

he. John F. Castella did submit a Monterey

House Restaurant Receipt with an altered date.

i. John F. Castella did viclate paragraph

1-24, AR 60-21/AFR 147-15.

j. John F. Castelia did violate 18 U.S.C.

1001.

k. The actions taken by the Army and Air

Force Exchange Service were in accordance with

pertinent laws and regulations.

i2. ALTERNATIVE COURSES OF ACTION:

‘

You are not bound by the factual determinations

of the Hearing Examiner, You may approve all or

any portion of the findings. Neither are you

limited to the recommendations of the Hearing

Examiner and may take various actions or

certain combinations of actions authorized by

the regulations when disciplinary action is

supported by the evidence. The authorized

actions are:

a. Verbal reprimand,

db. Written reprimand

c. Suspension,

d. Withdrawal of Executive Management

Program (EMF) Status.

e. Disciplinary downgrade, and

Ff. Separation

RONNIE D. COMPTON

Hearing Examiner

APPROVED/DISF PROVED

JOHN E. LONG

Major General, USA

Commander

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.