Iglesias v. United States Agency For International Development

          MEMORANDUM OPINION

          JOHN D. BATES UNITED STATES DISTRICT JUDGE

         In 2012, the United States Agency for International Development, Office of Inspector General (“USAID-OIG”), recommended firing one of its auditors, Likza Iglesias, after an investigation prompted by an anonymous complaint determined she intentionally had submitted false claims for reimbursement. Iglesias contested USAID-OIG's decision, claiming that any inaccuracies in her submissions were unintentional and that the anonymous complaint, the investigation, and her proposed removal from the Foreign Service were retaliation for two audit findings she had made, both of which she claimed were protected disclosures under the Whistleblower Protection Act. The Foreign Service Grievance Board (“FSGB” or “Board”) upheld USAID-OIG's recommendation, concluding that Iglesias intentionally had submitted false claims and that there was no evidence of any connection between the audit disclosures and the subsequent investigation or her proposed removal. Iglesias petitioned this Court for review, filing a motion for summary judgment challenging the Board's decision. USAID-OIG^[1] filed a cross- motion for summary judgment in response urging that the Board be affirmed. For the reasons explained herein, the Court will deny [19] Iglesias's motion for summary judgment and will grant [23] USAID-OIG's cross-motion.

         BACKGROUND

         I. Facts

         Likza Iglesias began working as an auditor at USAID-OIG in 2006. Administrative Record (“A.R.”) at 6071.^[2] As an OIG auditor, Iglesias's responsibilities included preparing audit reports, reviewing USAID programs, documenting waste, and recommending corrective actions. See A.R. at 9, 2660. From 2009 through 2011, Iglesias was assigned to one of USAID-OIG's regional offices in Pretoria, South Africa. A.R. at 6071.

         In June 2011, Special Agent (“SA”) Conor Cherer, an OIG investigator in the Pretoria office, opened an investigation into Iglesias after conducting an interview with an anonymous complainant who alleged that Iglesias had been seeking reimbursements to which she was not entitled. See A.R. at 3098-3102, 6072. In August 2011, before Cherer completed the investigation, Lisa McClennon-then the Special Agent in Charge (“SAC”) of investigations for the region-arrived in Pretoria for a “site visit.” A.R. at 5547-48. During the visit, McClennon decided to take over the Iglesias investigation, finding that Cherer had made insufficient progress. A.R. at 6072. The Iglesias investigation, McClennon testified, “deserved a higher priority” than other cases “because it involved an OIG employee” and therefore implicated “the credibility of the Office of Inspector General.” A.R. at 5549.

         To complete the investigation, McClennon conducted a series of interviews and requested a review of Iglesias's reimbursement requests and other requests for financial allowances. A.R. at 2813, 6072. Over the next few weeks, McClennon discovered a series of inaccuracies that consistently accrued to Iglesias's benefit, including, for instance, the submission of transportation vouchers and cost of living adjustment (“COLA”) forms requesting benefits to which Iglesias was not entitled. A.R. at 6072-73. McClennon briefed the then-Acting Inspector General (“AIG”) of USAID-OIG, Michael Carroll, and the then-Regional Inspector General (“RIG”) Christine Byrne, on her findings. A.R. at 5578, 6072-73. Almost immediately thereafter, Carroll ordered that Iglesias's assignment in Pretoria be cut short and that she be reassigned to Washington, D.C., pending further action. A.R. at 2653, 6073.

         In December 2011, AIG Carroll formally proposed that Iglesias be removed from the Foreign Service for violating personnel regulations prohibiting “intentional . . . misrepresentation[s] concerning a material fact on any official form, such as . . . reimbursement of expenses, eligibility for allowances, etc.” and “[c]onduct demonstrating untrustworthiness.” A.R. at 4. The charged conduct consisted of the intentional submission of false claims for transportation expenses, failure to report changes in household size to obtain larger living quarters, and the submission of inaccurate COLA forms resulting in overpayments. A.R. at 4-8. Shortly thereafter, Iglesias was placed on administrative leave with pay pending the conclusion of the administrative action against her. A.R. at 12.

         In February 2012, Iglesias responded to the proposed removal through counsel. See A.R. at 15-23. The response conceded certain inaccuracies in Iglesias's reimbursement forms but maintained that “there was never any intention to obtain more funds than she was entitled to.” A.R. at 18. Iglesias's response also claimed that her proposed removal resulted from “an overzealous investigation” motivated by “personal biases” and “ill feelings toward her, ” A.R. at 21, including because her supervisor, RIG Byrne, felt Iglesias spoke English with an accent that hindered her work, see A.R. at 22, 6074.

         Three months later, Iglesias supplemented her initial response to AIG Carroll's proposal for removal with a new allegation: her proposed termination was not due to personal biases, but in retaliation for two protected “disclosures” under the Whistleblower Protection Act (“WPA”). See A.R. at 6700-02.^[3] Specifically, Iglesias alleged that her termination violated section 2302(b)(8) of the WPA, which prohibits adverse personnel action “because of . . . any disclosure of information by an employee . . . which the employee . . . reasonably believes evidences (i) any violation of any law, rule, or regulation, or (ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety.” 5 U.S.C. § 2302(b)(8).

         The first protected disclosure, Iglesias explained, occurred as part of her team's 2010 audit of USAID's HIV/AIDS treatment activities in South Africa, which formed part of the President's Emergency Program for AIDS Relief (“PEPFAR”). See A.R. at 5170, 6700-01. Iglesias alleged that after her audit team discovered and attempted to include in their audit report “clear” evidence that $60 million of funding was disbursed to the South African government despite that government's failure to satisfy certain required preconditions, RIG Byrne informed Iglesias that the “funding was outside the scope of the audit and prohibited her from conducting any further investigation.” A.R. at 6701. The second protected disclosure, Iglesias said, concerned her involvement with an audit of a USAID family planning and reproductive health program in Madagascar. A.R. at 6701. Iglesias claimed that after her team disclosed in their “draft audit report” that a shipment of USAID-purchased contraceptive drugs could no longer be used because the government of Madagascar changed certain drug laws, RIG Byrne “responded by stating that it was not necessary to report the issue” because USAID-OIG had “brought the issue to USAID['s]” attention, and further orders were canceled. A.R. at 6701. Because “[RIG] Byrne and others” perceived her “as a ‘trouble maker'” for attempting to make these two negative audit findings, Iglesias alleged, she “became the subject of retaliatory conduct”-namely, the investigation into her reimbursement forms ultimately leading to the proposed removal. A.R. at 6702.

         In response, AIG Carroll issued a decision rejecting Iglesias's arguments and recommending that Iglesias be removed for cause. See A.R. at 101-107. AIG Carroll first explained why he did not find the “contention that [Iglesias's] actions were unintentional” credible. A.R. at 107. Then, in reply to Iglesias's supplemental response raising a whistleblower defense, Carroll stated only that the “investigation was initiated based on an anonymous complaint, ” A.R. at 106, and that Iglesias submitted “no evidence” that could exonerate her, A.R. at 103. Iglesias was placed on leave without pay pending a hearing before the FSGB. A.R. at 107.^[4]

         II. Proceedings Before the Foreign Service Grievance Board

         Before issuing a decision, the Board set a discovery schedule culminating with a hearing to take place in July 2014. A.R. at 6075. A week before the hearing, the Board denied Iglesias's motion for leave to depose certain USAID-OIG witnesses concerning their knowledge of any protected disclosures, ruling that the whistleblower defense must be predicated on AIG Carroll's direct knowledge of the protected disclosures. See A.R. at 6076. Iglesias then “withdr[e]w her claim of [whistleblower] retaliation, ” conceding that there was no evidence Carroll had such knowledge. A.R. at 2032. The hearing took place as planned without any whistleblower evidence. While the Board was preparing its final order, Carroll-who was still awaiting confirmation as Inspector General-withdrew his name from consideration and retired. A.R. at 6075. Iglesias then filed a motion to reopen discovery concerning the whistleblower defense, citing a newspaper article detailing allegations from other OIG auditors (not including Iglesias) that Carroll improperly pressured auditors to downplay negative findings and that such allegations had caused Carroll's withdrawal. See A.R. at 4446-66, 5390-91.

         Although the Board refused to rely on AIG Carroll's withdrawal or the article as a basis for reopening discovery, the Board nevertheless reconsidered its original position that a whistleblower defense must be predicated on Carroll's “direct knowledge” of any protected disclosures, concluding instead that the defense may also be proven if someone with knowledge of Iglesias's audit disclosures improperly influenced Carroll's decision through involvement with the investigation into her reimbursement claims. See A.R. at 4460-64. On that basis, the Board offered Iglesias the opportunity to reinstate the withdrawn whistleblower defense and reopen discovery to depose SA Cherer and Robert Mason, an audit manager and one of Iglesias's supervisors. See A.R. at 4464-66.

         During their depositions, SA Cherer and Mason refused to answer questions about the source of the complaint prompting the initial investigation of Iglesias. See A.R. at 6077-78. In response, Iglesias filed a motion to compel them to answer, arguing that whether the anonymous complainant had any connection to Iglesias's protected disclosure was critical to proving her whistleblower defense. See A.R. at 4607-25. The Board granted Iglesias's motion in part, ordering USAID-OIG to disclose any knowledge the source might have had about Iglesias's protected disclosures but declining to require it to reveal the source's actual identity. See A.R. at 5397-5400. To achieve that outcome, the Board ordered USAID-OIG to “disclose to the Board, in camera, ” whether the identity of the source was “known to the agency, ” whether “the source ha[d] knowledge of Ms. Iglesias' effort to make negative audit findings in the South Africa . . . and/or the Madagascar [audits], ” and whether the source “w[ould] consent to disclosure of his/her identity.” A.R. at 5400. In a submission later provided to Iglesias, USAID-OIG responded that the source was known, USAID-OIG had communicated with the source on two occasions, the source had no “knowledge of Ms. Iglesias'[s] alleged efforts to make negative audit findings, ” and the source did “not consent to disclosure of his/her identity.” A.R. at 5412; see A.R. at 5432.

         The Board then held a second evidentiary hearing solely on the whistleblower defense, considered additional post-hearing briefs and responses, and closed the proceedings in September 2016, pending its written decision. See A.R. at 6078.

         III. The Foreign Service Grievance Board Decision

         On January 6, 2017, the FSGB issued a decision upholding Iglesias's removal from the Foreign Service. The Board first concluded that USAID-OIG met its burden to prove that Iglesias “knowingly submitted false vouchers . . . with the intent to deceive her employer and to receive reimbursement funds to which she was not entitled, ” A.R. at 6092-93, and that Iglesias “knowingly failed to update . . . COLA forms” in a manner that “always [accrued] to her financial benefit, ” A.R. at 6100.^[5] Iglesias does not seek review of those rulings.

         The Board then addressed Iglesias's affirmative whistleblower defense. See A.R. at 6102- 6111. To establish a prima facie whistleblower retaliation claim, the Board explained, Iglesias “bears the burden of establishing by preponderant evidence that: (1) she made a protected disclosure under the WPA; (2) she was subsequently the subject of an adverse ‘personnel action' and (3) the protected disclosure was a ‘contributing factor' in the decision to take that action.” A.R. at 6090 (citing Whitmore v. Dep't of Labor, 680 F.3d 1353, 1367 (Fed. Cir. 2012)).^[6]

         The Board considered each requirement in turn, starting with whether Iglesias's alleged negative audit findings qualify as protected “disclosures” under the WPA. As relevant here, the WPA defines a “disclosure” as any “formal or informal” communication that the “employee . . . reasonably believes . . . evidences[] . . . gross mismanagement[ or] a gross waste of funds.” 5 U.S.C. § 2302(a)(2)(D); see also 5 U.S.C. § 2302(b)(8). The Board concluded that Iglesias made protected “disclosures” under this definition because “the evidence established that [Iglesias] made informal complaints about certain aspects of the audited programs that she believed evidenced gross mismanagement and a gross waste of funds.” A.R. at 6102. The Board also concluded that Iglesias was subject to an adverse “personnel action” because she was “proposed for [removal] from the [Foreign] Service by the AIG, Michael Carroll”-a decision which “arose directly from the investigation” of her reimbursement forms. A.R. at 6105.

         Having found protected disclosures and an adverse personnel action, the Board proceeded to “examine the nexus, if any, ” between Iglesias's protected disclosures and her removal. A.R. at 6105. Specifically, the Board considered “direct and circumstantial” evidence of whether the officials involved in Iglesias's investigation or removal “had actual or constructive” awareness of Iglesias's protected disclosures, as well as whether such disclosures contributed in any way either to the investigation of Iglesias or her ultimate removal. A.R. at 6105. The Board answered no on both counts.

         As an initial matter, the Board found no evidence that AIG Carroll or his staff had any knowledge of Iglesias's protected disclosures or that the disclosures directly influenced the decision to propose her removal. See A.R. at 6107. Recognizing that the decision to initiate the investigation or its scope-as opposed to just the final decision-could have been “tainted” by someone with knowledge of her protected disclosures, the Board also examined anyone else that may have had influence over the investigation. See A.R. at 6107-10.

         The Board found no evidence that SA Cherer, SAC McClennon, or anyone else involved in the investigation had any knowledge of Iglesias's claimed disclosures. A.R. at 6108-09. And while the Board acknowledged that Iglesias's supervisor RIG Byrne did have knowledge of the disclosures, the Board dismissed the possibility that Byrne told someone connected to the investigation about them as “rank speculation.” A.R. at 6108.

         The Board also concluded that there was no evidence tying the initiation of the investigation to the disclosures. See A.R. at 6107-08. Specifically, the Board rejected Iglesias's suggestion that it should presume the source knew of Iglesias's protected disclosure based on “a negative inference from the agency's failure to disclose [his or her] identity.” A.R. at 6107 n.36.

         The Board found “that the OIG had a sound legal and policy basis for declining to disclose the identity of [the anonymous source], ” including that the source had, in response to the Board's inquiry, “declined to have his/her identity revealed” as part of the proceedings. A.R. at 6107 n.36. As part of this analysis, the Board acknowledged that some of McClennon's actions-e.g., insisting on taking over Cherer's investigation, the request to review “every single voucher or form” Iglesias submitted, completing a dozen interviews, etc.-and some of RIG Byrne's actions-including an email sent to AIG Carroll suggesting that the U.S. Ambassador to South Africa was pleased with McClennon's investigation and the decision to remove Iglesias-were “unusual enough to suggest some negative animus against Mrs. Iglesias.” A.R. at 6108-09. But the Board concluded that it was Iglesias's burden to establish a connection between the investigation and the protected disclosures, see A.R. at 6108 n.37, and even if McClennon “may have been on a ‘fishing expedition' aimed at finding something with which to incriminate” Iglesias, there was “no evidence” that the “expedition” had any connection to the protected disclosures. A.R. at 6108-09. Indeed, “[n]otwithstanding [a] mosaic of possibly negative feelings toward Mrs. Iglesias, ” the Board found “no evidence at all of a nexus between the mosaic and her having raised concerns about either of the two audits.” A.R. at 6110 n.38. To the contrary, the Board cited evidence that Iglesias's behavior aroused suspicion because “every [financial] allowance she sought [from USAID-OIG] was considered unusual, requiring either an exception or additional research.” A.R. at 6108 n.37. Iglesias thus “failed to prove” by a preponderance of the evidence “that her protected audit disclosures contributed in any way to the investigation into her financial submissions” or her removal. A.R. at 6111. Because Iglesias failed to make out a prima facie case sustaining her affirmative whistleblower defense, the Board upheld the misconduct charges against her. A.R. at 6111.

         Finally, the Board reviewed USAID-OIG's proposed penalty-Iglesias's removal from the Foreign Service-for reasonableness. See A.R. at 6111-14. To establish reasonableness, the Board explained, USAID-OIG “must consider [certain] relevant factors” including “the seriousness of the offense[, ]” whether the offenses were “intentional and not inadvertent, ” as well as “the consistency of the penalty with what has been imposed” in similar cases. A.R. at 6111- 12. The Board was “satisfied” that AIG Carroll sufficiently “review[ed] and consider[ed]” the relevant factors, noting his explanation that Iglesias made “intentional, repeated, ” misrepresentations that “resulted in financial gain to her” while simultaneously occupying a “senior fiduciary and supervisory” position responsible for “ferret[ing] out false representations.” A.R. at 6112-13. Finally, the Board observed that few mitigating circumstances applied, noting instead that Iglesias “expressed no remorse, ” “excused her conduct as ...