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Board for Correction Case No. 066-86


Board for Correction Case No. 066-86

165.00 Inactive Reserve Corps - Cancel debt to the U.S. Government

Recommendation of the Board for Correction on Case No. 066-86, xxxxxxxx

Xxxxxxxxxxxxx filed an application with the Board for Cor­rection dated xxxxx 1986, requesting the Board to correct his record to reverse the Comptroller General's decision requiring him to pay back to the United States Government $77,704.00 he received as erroneous payments for services rendered to the Xxxxxxxxxxxxx. The merits of his request were reviewed on the basis of the documentation re­ceived. The relevant facts in the Board's Proceedings are included as At­tachment 1.

After consideration of all information received, the recommendation of the members of the Board for Correction is that Xxxxxxxx request be denied and that no change be made in his record.

It is certified that the foregoing recommendation is a true and complete statement of the action taken by the members of the Board for Correction, as contained in the Attachments to this memorandum, and that the report of this action has been reviewed by the Board members. Further. it is certified that the documentation contained in Attachment 2 includes all information received by the members of the Board and that, in addition to applicable statutes, regulations and policies, it has been considered in arriving at this recommendation. Finally, it is certified that a quorum of Board members was present on xxxx 1986 when Xxxxxxxx request was considered.

The foregoing action of the Board for Correction is submitted for your review and approval.

Ellen Wormser


(1) Board Proceedings
(2) Case File including all documentation received

Reviewed and Approved

I hereby approve the recommendation of the members of the Board on the request of xxxxxxx which was received and considered in accordance with the authority of 10 U.S.C. 1552 and 42 U.S.C. 213a (12).

Wilford J. Forbush
Deputy Assistant Secretary for Health Operations and Director,
Office of Management



The central issue before the Board members was whether or not there was sufficient basis for seeking to change or modify the decision of the Comptroller General that required Xxxxxxxx to reimburse the United States Government the payments he received from working for the Xxxxxxxxxxxxx. In considering the documentation before the Board, the members found that:

  1. The law, Section 5536, was clear in stating that a member of the uniformed service (of which the PHS commissioned Corps is a part) may not receive additional pay or allowance for any other service or duty (unless specifically authorized by law.) As a commissioned officer, Xxxxxxxx pay was fixed by statute or regulation and there was no legislative authority that specifically authorized him to receive additional pay or allowance for any other service or duty he provided.
  2. The policies promulgated by CPOD and by XXX, reflecting the Standards of Conduct issued by the DHHS, were clear in requiring approval for Xxxxxxxx to take on outside activities. Based upon his previous experience in obtaining permission to engage in such activities which were unpaid, it was reasonable to expect that he should have known about the rules, and especially their applicability to paid activities, and should have complied with them. If any ambiguity existed concerning what constituted "outside" employment, the provision of Section 5536 was totally clear regarding his entitlement to additional pay or allowance.
  3. The practice at XXX was to grant no approvals to work for another federal agency. This was generally known by the medical staff. If Xxxxxxxx had applied for approval he would most likely have been turned down.
  4. The information contained in Xxxxxxxx xx for xxx concerning his professional and work activities from 1965 was presented in a way that confused his association with XXX. The information he presented as xxxx, xxxxxxxxxxxxxx, did not directly relate XXX with this position. There was the strong inference in the way in which the information was presented that Xxxxxxxx was an employee of the xxxxxxxxx, not the federal government. Further, Xxxxxxxx made no mention of the fact he had received the U.S. Public Health Service Commendation Medal which, if known, would have informed the xxx contracting officials of his association with another federal agency and with the PHS Commissioned Corps. Had Xxxxxxxx included information in his xxx directly associating him with XXX and the PHS Commissioned Corps, XXX contracting policy would have precluded his working there and receiving additional pay for the services provided. 
  5. Xxxxxxxx was not justified in leaving his work site early during his XXX work days to go to work at xxx. His explanation that he had completed all work assigned to him was not sufficient to support his personal decision to leave his XXX work site without notice to the supervisor or obtaining the supervisor's approval. Working at XXX during these periods allowed Xxxxxxxx, in effect, to be paid twice for the same time periods.


The members of the Board concluded that there was no basis for seeking to change or modify the decision of the Comptroller General denying Xxxxxxxx entitlement to the payments he received from working for the XXX nor was this decision unjust. The Board members concluded, further, that it was Xxxxxxxx responsibility to have followed the policies governing outside activities~ about which he was obviously informed, and he had ample opportunity to comply with them, given the fact he worked for XXX for a period of 13 years.


After consideration of all information presented, the recommendation of the members of the Board for Correction is that Xxxxxxxx request be denied and that no change be made in his record.


Subject: Court Disposition of Board Case No. O66-86 xxxxxxxxxxxxxx


xxxxxxxx asked the Board for Correction to set aside a determination by the Comptroller General requiring him to repay the U.S. Government $77,704 (plus interest and fees) payment he received from the xxxx xxxxxxxxxxxxx (XXX) for services he performed as a xxxxx xxxxxxx from 1978 to 1983. xxxxxxxx request was considered by the Board on xxx 1986 when it recommended that his request be denied. You approved the recommendation of the Board on xxxxxxx 1986.

Additional Action Taken by xxxxxxxx:

Subsequent to the decision of the Board for Correction, xxxxxxxxx appealed to the U.S. District Court for the xxxxxxxx xx xxxxx asking that the decision requiring him to repay the payment he received be set aside and that he be reimbursed $3,900 deducted from his pay following the decision of the Board. Xxxxxx argued before the Court that the payment he received from XXX vas not an "erroneous payment", but a lawful payment made to him for personal services rendered.

Decision of the U.S. District Court:

The xxxxxxxx concluded that the payment received by xxxxxx was not erroneous and that his contracts with XXX were not prohibited by procurement regulations. The Court also concluded that the efforts of the Department of Health and Human Services {the Department) to collect this payment from xxxxx were improper, unauthorized and illegal. The Court Issued a judgment in favor of xxxxxx for repayment of the $3,900 deducted from his pay following the decision of the Board and also issued an injunction restraining the Department from taking further acts to recoup the remaining portion of the payment received by xxxxxxxx.

Additional Action Taken by the Department:

Subsequent to the decision of the District Court, the Department appealed the ruling of that Court to the U.S. Court of Appeals for the Federal Circuit. The appeal was based on the following: (1) whether the District Court had jurisdiction over the matter brought before it by xxxxxxxxx, (2) whether xxxxxxx as an officer of the Commissioned Corps could receive other income for services rendered in addition to that from the Public Health Service and (3) wbether the payment received by xxxxxx was erroneous because he was a federal employee. The United States Attorney concurred witb the appeal. The Commercial Litigation Branch and the Assistant Attorney General, Department of Justice recommended against appeal. The Director of the Appellate Staff, Department of Justice recommended a compromise settlement that was presented to the Court of Appeals.

Decision by the U.S. Court of Appeals:

The Court of Appeals dismissed the appeal by the Department in favor of the compromise settlement as follows: (1) xxxxx willingness to relinquish the judgment of the District Court awarding him repayment of $3,90O deducted from his pay, (2) the willingness of the Department to relinquish all claims to the payment received by Xxxxxxxx from XXX, except the $3,900 already deducted from xxxxxxx pay and (3) the willingness of the two parties to release each other from any and all liability in connection with the payment received by xxxxxx from XXX.

The favorable treatment of xxxxxxx before the Court was based upon adherence to the common law precedent that a man is entitled to pay for services rendered. The Court did not conclude that xxxxxxx had to prove entitlement to the payment received from XXX, but rather the Department had to show that he was not entitled. In the opinion of the Court, the Department did not prove that the contract xxxxxxxx signed with XXX were illegal, nor did it prove that his performance at the xxxxxx xxxxxx xx xxxx was adversely affected by his work for XXX. Finally, the Court concluded there was no federal statute prohibiting Xxxxxxxx from working for xxx since as a commissioned officer he vas not bound by the federal statute prohibiting officers in the armed forces from such activity (the contrary determination by the Comptroller General was not binding on the Court.)

Thomas E. White, Ph.D.
Executive Secretary

Anyone wishing to obtain an un-redacted copy of any of the decisions should submit a request for the un-redacted decision under the federal Freedom of Information Act (FOIA). Such requests should be directed to the PHS FOIA Office, Parklawn Building, Room 17 A-46, 5600 Fishers Lane, Rockville, MD 20857; telephone 301-443-5252; fax 301-443-0925.