Iglesias v. U.S. Agency for Int'l Dev.

LIKZA IGLESIAS, Petitioner, v. UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT, Respondent.

Civil Action No. 17-285 (JDB)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

October 12, 2018

MEMORANDUM OPINION

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-OIG¹ 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. at2813, 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. at21, 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 furtherinvestigation." 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...