Failing to Pay Government Charge Card Bill Leads to Removal
By Susan Smith
Tuesday, October 24, 2006
The court agreed with Allen that the Merit Systems protection Board erred in sustaining a charge of misuse of funds in the full amount of the outstanding balance on his GICC--however, it sustained the charge of misuse of funds in a lesser amount. More importantly, the court upheld Allen’s removal, finding that the penalty “is not unconscionably disproportionate to the sustainable charges.” (Opinion p. 2)
The case is of interest because of the facts that both the MSPB and now the appeals court believed justified the firing. The following facts are as related by the court in its published opinion.
When he was selected for a geographic transfer, the agency gave Allen a $2,500 cash advance for his miscellaneous relocation expenses. He was also given a GICC issued by Citibank to be used for Allen’s temporary housing and other official travel expenses. As is standard, Allen was required to sign a cardmember account agreement with Citibank that obligated him to pay his outstanding balance no later than 25 days from the closing date on the billing statement. This requirement for paying his credit card bill had no relationship to whether Allen had received reimbursement from the agency.
Allen racked up charges on the credit card over a two-month period in the amount of $6,446.47. He made a small payment toward the balance some 5 months after receiving his first statement, but it took him around 9 months to pay the entire balance. Meanwhile, Citibank cancelled Allen’s card, referred the account to a collection agency, and reported these events to the USPS. The agency investigated and eventually removed Allen for “Misuse of Postal Service Funds.” The removal notice recounted Allen’s violation of the terms of his cardholder agreement, his delay of more than 120 days to pay the account, and the cancellation of his account. The agency saw this as essentially “an interest free loan” and a “serious violation of the trust given to [him].” (p. 4)
Allen blamed his failure to timely pay the credit card bills to “procrastination” in submitting his travel vouchers for reimbursement by the agency. However, the MSPB determined that when Allen received a reimbursement check from the agency, he waited six weeks to deposit it.
There was an argument over whether Allen had indeed misused agency funds by not immediately paying his credit card off. The court drew the fine distinction this way: “It is important to understand that Allen’s card expenditures involve funds loaned by Citibank, not by the Postal Service. …As the card’s outstanding balance stood unpaid…Allen could only have been misusing Citibank funds.” (p. 6)
Once Allen deposited the agency full reimbursement check in the amount of $5,308.16, he promptly then paid Citibank $4,700. However, in the eyes of the court, he slipped up by not paying Citibank the full amount due at that time. Instead, he waited almost 5 months to make final payment. “At that point, then, Allen was misusing Postal Service funds representing the difference between the reimbursement amount and the payment made.…This misuse continued until final payment was remitted…” (pp. 6-7)
Here’s the court’s bottom line, so to speak: “In sum, we hold that the charge of misuse of Postal Service funds is only sustainable in part, in the amounts of $608.16 for the three months between March and June 2000 [when he made a $400 payment] as well as $208.16 for the three months thereafter.” (p. 7)
Allen’s other argument was that the charge of paying his GICC late must fall for lack of due process because it was not listed in the heading of the proposed removal. The court did not agree, calling his “exclusive focus on the heading of the Notice…misplaced, as charged offenses are to be gleaned from the Notice of Proposed Removal as a whole, particularly the specification(s) supporting the heading.” (p. 8) The court further noted that Allen had actually responded to both charges.
Finally, since the penalty was “not unconscionably disproportionate to the sustainable charges...” the court affirmed Allen’s firing.
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