# Petition for Writ of Certiorari — Castella v. Long

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1989
- **Citation:** 493 U.S. 936

## Text

\ 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
V.

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?

rs

TABLE OF CONTENTS

BR eg | ee ee ree |

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

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Appendix

Appendix

C

D

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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2 U. BG. Ge 701, SOc OO crecceccccrses &
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4

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REGULATIONS

Army/Air Force Regulation
GVKSAESTRAD costedseeescscceeosess 6

CONSTITUTIONAL PROVISIONS

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

cn

IN THE

SUPREME COURT OF THE UNITED STATES

NO.

JOHN F CASTELLA, Petitioner
Ve

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.

oe

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

>
o

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

—

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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

1

taminer (not an administrative 1

i
=

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

12

i

—— |

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ee

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

rt

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

15

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

14

a

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."

18

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.

19

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

20

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

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( 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

ch

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

-
oY
i
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

3

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

Mm

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

JOHN FRED CASTELLA.
Flaintif¢
V.
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

w)

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

»,

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

a

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

g
‘

=

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

N

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;
(C) in excess of statutory

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

on

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.

ry
‘
es
+
+
n
.

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

~
vi
rT
-
+
-
in
+
a
7
~

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

,
}
a
L
a
_
i
_
A
=y
=
7
iJ
oO.
.
.
2
ry
—
e

with which he

D
1D
=
(tr

’
iT
=
t
rt
i
u
=
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

o
rv

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

ee

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;

a
‘

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

J
—

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)

i]
‘

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

os

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.

i
i
a

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

XN

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
bd

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

|

—

a

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
Lo

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:

11

(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.

iz

—

LOPE ATER, I SPIT TI PNA YS

(c) During his stay at the
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

i

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
Fc
Lo

'

!

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

2

= ) 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 ) 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
=6

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

i

oo

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
7

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
23

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

29

——

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.

(c) The Appellant raised a number
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
24

ie,
a

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
2

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.

(c) Colonel Lynch considered thes
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

oF

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
40

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

41

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

oe

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

43

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
44

=

;
‘

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

45

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.

4b

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

47

-~

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.
43

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

ag

- 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

bo

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

39

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.

60

.

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

61

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

62

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

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_0289%3A1. Public record. Not legal advice.