[Federal Register Volume 68, Number 69 (Thursday, April 10, 2003)]
[Rules and Regulations]
[Pages 17549-17551]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8723]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 1, 14 and 17

RIN 2900-AL31


Referrals of Information Regarding Criminal Violations

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This final rule amends VA's conduct regulations to provide 
that VA employees are required to report information about possible 
criminal activity to appropriate authorities. The VA Police and the VA 
Office of Inspector General, the department's two law enforcement 
entities, will receive such information, will investigate those cases 
within their respective jurisdiction and will refer proper cases for 
prosecution. In addition, the final rule will clarify and more 
accurately state the investigative jurisdiction of the Office of 
Inspector General. The goal of the final rule is to protect the VA, its 
employees and the veterans it serves, by having information about 
criminal activity reported and properly investigated as quickly and 
thoroughly as possible to prevent additional harm and to bring criminal 
perpetrators to justice.

DATES: Effective Date: April 10, 2003.

FOR FURTHER INFORMATION CONTACT: Michael R. Bennett, Attorney Advisor, 
Office of Inspector General (51A1), Department of Veterans Affairs, 810 
Vermont Avenue, NW., Washington, DC 20420, at (202) 565-8678. (The 
telephone number is not a toll-free number.)

SUPPLEMENTARY INFORMATION:

Background

    Some significant, serious criminal matters related to VA programs 
and operations have not been reported to the VA Office of Inspector 
General (OIG), or to any law enforcement organization, in a timely 
manner to permit a thorough, effective criminal investigation. In 
reviewing these cases, it was discovered that there is no regulation 
that requires all VA employees to report possible criminal activity to 
law enforcement organizations. The final rule corrects this flaw by 
adding new sections to 38 CFR part 1.

Employee's Duty To Report Possible Crimes

    The final rule is a reasonable and logical extension of an existing 
regulatory duty to report wrongdoing already placed on VA (and Federal) 
employees. 5 CFR 2635.101(b)(1) requires that ``[e]mployees shall 
disclose waste, fraud, abuse and corruption to appropriate 
authorities.'' Obviously, this requirement already requires Federal 
employees to report some criminal behavior to appropriate authorities. 
Given that there is a legal duty to report certain possibly criminal 
behavior, there should be an equal duty placed on employees to report 
even more serious matters that could involve physical harm to other 
employees, VA patients, veterans or other individuals.
    In addition, a duty to report criminal activities exists in VA's 
Employee Handbook. The Handbook, which is dated February 2002, states 
on page 30 that, ``You, as a VA employee, are responsible for reporting 
any evidence or information that gives reasonable cause to suspect that 
a serious irregularity or other criminal violation may have occurred in 
any activity of VA.'' The VA Employee Handbook goes on to cite section 
7(a) of the Inspector General Act, which authorizes the OIG to 
``receive and investigate complaints or other information from any 
employee concerning * * * a violation of law * * *.'' It is worth 
noting that the section on ``How To Contact the Office of Inspector 
General'' is on the same page as the duty to report serious 
irregularities and criminal acts.
    At least six other Federal agencies (Department of the Interior, 
Department of Health and Human Services, Small Business Administration, 
Department of Energy, Department of Health and Human Services/Office of 
Scientific Investigations, and Federal Aviation Administration) have 
enacted regulations which require their employees to report information 
about possible criminal activity. The regulations of the first five 
agencies listed include references to their respective Offices of 
Inspector General as an appropriate recipient of such information.

Office of Inspector General Experience in Criminal Investigations

    A second reason for the final rule is to make certain that, once 
reported, the appropriate law enforcement organization quickly and 
properly investigates serious criminal matters relating to the programs 
and operations of VA. Independent and objective investigations of 
criminal matters relating to the programs and operations of VA are a 
major part of the OIG's statutory responsibilities.
    In coordination with the VA police, the OIG intends to ensure that 
the appropriate entity investigates allegations of criminal conduct. 
Because the criminal law enforcement authority of VA police is 
restricted to VA property, their ability to conduct criminal 
investigations is limited. The OIG is the only VA entity with the 
authority to conduct criminal investigations off VA premises. The OIG's 
experience and knowledge of VA, combined with its statutory authority, 
makes the OIG uniquely qualified to conduct criminal investigations 
related to VA programs and operations since virtually all serious, 
complex cases will require some investigative work away from VA 
premises.
    The VA OIG is also well qualified to serve as the point of referral 
and contact with the United States Attorneys' Offices on serious 
criminal matters affecting VA. Finally, there is a clear legal basis 
for the OIG's jurisdiction and statutory authority to conduct such 
criminal investigations.

Current Regulatory Scheme

    At present, the only VA regulations that relate to the referral of 
criminal allegations are found in 38 CFR 14.560 et seq. This section of 
VA's regulations is a part of the chapter on ``Legal Services'' and is 
found under the section heading ``Prosecution.'' Section 14.560(a) 
imposes upon the Regional Counsels the duty to refer allegations of 
crimes against the person or property to the U.S. Attorney's Office, 
the FBI or local law enforcement agencies. Section 14.560(b) provides 
that ``[a]llegations of fraud, corruption or other criminal conduct 
involving programs and operations of VA will be referred to the Office 
of Inspector General.'' The final rule removes the obligation from the 
Regional Counsels to make referrals to

[[Page 17550]]

law enforcement agencies, both for investigation and prosecution, and 
instead utilizes the VA's own law enforcement entities, the VA police 
and the OIG, to take the primary role in investigation of criminal 
behavior and referral to prosecution authorities. 38 CFR 14.560(a), 
14.560(b), and 14.563 should be deleted because they all involve 
criminal matters and referrals to the U.S. Attorneys' Office and are 
obsolete given the new final rule. In addition, 38 CFR 17.170(c) must 
be amended by substituting ``Office of Inspector General'' in the place 
of ``Regional Counsel'' in both the first and second sentence of Sec.  
17.170(c). Finally, the final rule clarifies and more accurately sets 
forth the OIG's jurisdiction for criminal investigations.

OIG's Jurisdiction for Criminal Investigations

    The existing regulation cited above, and various other VA policy 
directives, indicate that the jurisdiction of the VA OIG is limited to 
``fraud, waste and abuse'' and does not include crimes against the 
person or property. In fact, the Inspector General Act of 1978 (IG Act) 
confers extremely broad jurisdiction on the OIG with respect to 
investigations. 5 U.S.C. App. 3. The purpose section of the IG Act 
states that Offices of Inspector General are created so that 
``independent and objective units within departments and agencies [can 
conduct] investigations relating to the programs and operations' of the 
department. Id., Sec.  2(1). Section 4 of the IG Act provides that one 
of the duties and responsibilities of the IG is to conduct 
``investigations relating to the programs and operations'' of the 
department in question. Thus, the IG Act authorizes the IG to conduct 
virtually any investigation so long as it relates to VA's programs and 
operations.
    The IG Act also provides that, in order to assure independence and 
objectivity, the IG is personally vested with the discretion to 
determine whether to conduct a particular investigation. Section 
6(a)(2) of the IG Act states that the Inspector General ``is authorized 
to make such investigations and reports relating to the administration 
of the programs and operations of the applicable establishment as are, 
in the judgment of the Inspector General, necessary or desirable.''
    Perhaps the most significant section of the IG Act, with respect to 
the IG's investigative authority, is section 7 of the Act. Section 7(a) 
provides that the IG may investigate complaints from an employee 
``concerning the possible existence of an activity constituting a 
violation of law, rules, or regulations, or mismanagement, gross waste 
of funds, abuse of authority or a substantial and specific danger to 
the public health or safety.'' A felony is a ``violation of law'' and 
can also constitute a ``substantial and specific danger to the public 
health or safety.'' Therefore, so long as there is some relation to the 
programs and operations of VA, these violations are clearly within the 
IG's investigative jurisdiction. Current VA regulations and policies 
improperly limit and restrict the IG's statutory authority by stating, 
or implying, incorrectly, that OIG jurisdiction is limited to fraud, 
waste and abuse. The final rule, in part, corrects the improper 
limitations placed on the IG by the current regulations.

Unfunded Mandates

    The Unfunded Mandates Reform Act requires, at 2 U.S.C. 1532, that 
agencies prepare an assessment of anticipated costs and benefits before 
developing any rule that may result in an expenditure by State, local, 
or tribal governments, in the aggregate, or by the private sector of 
$100 million or more in any given year. This final rule would have no 
consequential effect on State, local, or tribal governments.

Paperwork Reduction Act

    This document contains no provisions constituting a collection of 
information under the Paperwork Reduction Act (44 U.S.C. 3501-3521).

Administrative Procedure Act

    This document is published without regard to the notice and comment 
and effective date provisions of 5 U.S.C. 553 since it relates to 
agency management and personnel.

Regulatory Flexibility Act

    The Secretary of Veterans Affairs hereby certifies that this final 
rule will not have a significant economic impact on a substantial 
number of small entities as they are defined in the Regulatory 
Flexibility Act, 5 U.S.C. 601-612. This final rule would affect only 
individuals. Accordingly, pursuant to 5 U.S.C. 605(b), this final rule 
is exempt from the initial and final regulatory flexibility analysis 
requirements of Sec. Sec.  603 and 604.
    There is no Catalog of Federal Domestic Assistance number for this 
final rule.

List of Subjects

38 CFR Part 1

    Administrative practice and procedure, Courts, Government 
employees, Government property, Penalties, Reporting and recordkeeping 
requirements, Security measures.

38 CFR Part 14

    Administrative practice and procedure, Claims, Courts, Foreign 
relations, Government employees, Lawyers, Legal services, Organization 
and functions (government agencies), Reporting and recordkeeping 
requirements, Surety bonds, Trusts and trustees, Veterans.

38 CFR Part 17

    Administrative practice and procedure, Alcohol abuse, Alcoholism, 
Claims, Day care, Dental health, Drug abuse, Foreign relations, 
Government contracts, Grant programs--health, Grant programs--veterans, 
Health care, Health facilities, Health professions, Health records, 
Homeless, Medical and dental schools, Medical devices, Medical 
research, Mental health programs, Nursing homes, Philippines, Reporting 
and recordkeeping requirements, Scholarships and fellowships, Travel 
and transportation expenses, Veterans.

    Approved: February 14, 2003.
Anthony J. Principi,
Secretary of Veterans Affairs.

0
For the reasons set out in the preamble, 38 CFR parts 1, 14 and 17 are 
amended as set forth below.

PART 1--GENERAL PROVISIONS

0
1. The authority citation for part 1 continues to read as follows:

    Authority: 38 U.S.C. 501(a), unless otherwise noted.


0
2. An undesignated center heading and Sec. Sec.  1.200 through 1.205 
are added to read as follows:

Referrals of Information Regarding Criminal Violations


Sec.  1.200  Purpose.

    This subpart establishes a duty upon and sets forth the mechanism 
for VA employees to report information about actual or possible 
criminal violations to appropriate law enforcement entities.

(Authority: 5 U.S.C. App. 3, 38 U.S.C. 902)

Sec.  1.201  Employee's duty to report.

    All VA employees with knowledge or information about actual or 
possible violations of criminal law related to VA programs, operations, 
facilities, contracts, or information technology systems shall 
immediately report such knowledge or information to their supervisor, 
any management official, or directly to the Office of Inspector 
General.

(Authority: 5 U.S.C. App. 3, 38 U.S.C. 902)


[[Page 17551]]




Sec.  1.203  Information to be reported to VA Police.

    Information about actual or possible violations of criminal laws 
related to VA programs, operations, facilities, or involving VA 
employees, where the violation of criminal law occurs on VA premises, 
will be reported by VA management officials to the VA police component 
with responsibility for the VA station or facility in question. If 
there is no VA police component with jurisdiction over the offense, the 
information will be reported to Federal, state or local law enforcement 
officials, as appropriate.

(Authority: 38 U.S.C. 902)

Sec.  1.204  Information to be reported to the Office of Inspector 
General.

    Criminal matters involving felonies will also be immediately 
referred to the Office of Inspector General, Office of Investigations. 
VA management officials with information about possible criminal 
matters involving felonies will ensure and be responsible for prompt 
referrals to the OIG. Examples of felonies include but are not limited 
to, theft of Government property over $1000, false claims, false 
statements, drug offenses, crimes involving information technology 
systems and serious crimes against the person, i.e., homicides, armed 
robbery, rape, aggravated assault and serious physical abuse of a VA 
patient.

(Authority: 5 U.S.C. App. 3)

Sec.  1.205  Notification to the Attorney General or United States 
Attorney's Office.

    VA police and/or the OIG, whichever has primary responsibility 
within VA for investigation of the offense in question, will be 
responsible for notifying the appropriate United States Attorney's 
Office, pursuant to 28 U.S.C. 535.

(Authority: 5 U.S.C. App. 3, 38 U.S.C. 902)

PART 14--LEGAL SERVICES, GENERAL COUNSEL, AND MISCELLANEOUS CLAIMS

0
3. The authority citation for part 14 continues to read as follows:

    Authority: 5 U.S.C. 301; 28 U.S.C. 2671-2680; 38 U.S.C. 501(a), 
512, 515, 5502, 5902-5905; 28 CFR part 14, appendix to part 14, 
unless otherwise noted.

Sec.  14.560  [Amended]

0
4. In Sec.  14.560, remove paragraphs (a) and (b); and remove the 
designation (c) from paragraph (c).


Sec.  14.563  [Removed]


0
5. Section 14.563 is removed.

PART 17--MEDICAL

0
6. The authority citation for part 17 continues to read as follows:

    Authority: 38 U.S.C. 501, 1721, unless otherwise noted.

Sec.  17.170  [Amended]

0
7. Section 17.170, paragraph (c), first sentence, remove ``appropriate 
Regional Counsel'' and add, in its place, ``Office of Inspector 
General''; and in the second sentence, remove ``Regional Counsel'' and 
add, in its place, ``Office of Inspector General''.

[FR Doc. 03-8723 Filed 4-9-03; 8:45 am]
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