BNUMBER:  B-251141
DATE:  May 3, 1993
TITLE:  Department of Health and Human Services, Food and
Drug Administration - Reimbursement of Employees for
Private Attorney Fees Incurred in Federal Criminal
Investigation

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Matter of:     Department of Health and Human Services, Food and Drug 
               Administration - Reimbursement of Employees for Private 
               Attorney Fees Incurred in Federal Criminal 
               Investigation

File:          B-251141

Date:          May 3, 1993

DIGEST

In the absence of Department of Justice approval, agency 
appropriations may not be used to reimburse federal employees for 
private attorney fees incurred incident to a federal criminal 
investigation.

DECISION

The Department of Health and Human Services (HHS), Food and Drug 
Administration (FDA), has requested our opinion on whether agency 
appropriations may be used to reimburse FDA employees for private 
attorney fees incurred incident to a federal criminal investigation.  
For reasons set forth below, we conclude that, in the absence of 
Department of Justice (Justice) approval, HHS appropriations may not 
be so used.  FDA should refer the employees' requests to Justice.

BACKGROUND

During the course of an investigation of a California investment firm, 
the Securities and Exchange Commission (SEC) found the names and 
business telephone numbers of several FDA employees in the firm's 
business records.  The SEC, concerned that the employees may have 
engaged in insider trading, relayed this information to the HHS Office 
of the Inspector General and the United States Attorney for the 
District of Maryland.  Both offices conducted separate investigations 
to determine whether these employees had provided confidential product 
approval information to the firm, and the U.S. Attorney convened a 
grand jury.

The employees, asserting that the investigation focused on acts that 
fell within the scope of their employment, requested legal 
representation by the HHS Office of General Counsel.  A number of the 
employees are employed in FDA's Office of Public Affairs and were 
responsible for answering public inquiries about routine FDA business.  
They claimed that they had responded only to routine inquiries from 
the investment firm.  The Office of General Counsel denied the 
requests on the ground that the criminal investigation raised 
potential conflicts of interest between the employees and HHS.  The 
requests for representation were not referred to Justice.  
Subsequently, the employees retained private counsel.

The Inspector General found that six of the employees had improperly 
disclosed information, although without criminal intent.  None of the 
employees has been disciplined.  The grand jury did not indict any of 
the employees.  All investigations of the employees have concluded and 
no finding of criminal misconduct has been made.

HHS recommends reimbursement of the attorney fees, ranging from $3,000 
to $6,000, because no civil or criminal charges resulted from the 
investigations and, as it turned out, the matters at issue concerned 
the performance of agency functions.

DISCUSSION

Agencies, other than Justice, are generally precluded from using 
appropriations to hire attorneys to represent employees; federal law 
reserves the conduct of litigation to Justice where the United States, 
an agency, or an officer or employee of an agency is either a party or 
has an interest in the litigation.  5 U.S.C.  3106; 28 U.S.C.  516 
(1988).  Justice provides for the defense of the employee when the 
actions at issue appear to have been performed within the scope of the 
employee's duties and Justice determines that providing representation 
would be in the government's interest.  28 C.F.R.  50.15(a) (1990).  
In limited circumstances, where Justice determines that representation 
of a federal employee is appropriate but is unable to provide 
representation, agency appropriations may be used to pay for legal 
work that Justice determines to be in the government's interest.  50 
Comp. Gen. 408, 412-413 (1975); 28 C.F.R.  50.16(d)(1).

Justice representation generally is not available in federal criminal 
proceedings.  28 C.F.R.  50.15(a)(4).  Justice will provide 
representation to a federal employee in such instances only where the 
Attorney General or his designee determines that representation is in 
the government's interest and subject to applicable limitations in 28 
C.F.R.  50.16.  Id.  Under Justice's procedures, unless the employing 
agency concludes that representation is clearly unwarranted, it should 
submit to Justice a statement containing its findings as to whether 
the employee was acting within the scope of his employment and its 
recommendation for or against providing representation.   50 C.F.R.  
50.15(a)(1).

The FDA states that HHS did not submit the employees' requests for 
representation to Justice, explaining that with regard to criminal 
matters, it lacks the means "for making the requisite examination to 
determine whether the activities in question are reasonably within the 
scope of employees' duties."  Since Justice's guidelines do not 
specifically address the reimbursement of attorney fees that were 
incurred without Justice's advance approval, FDA asks whether it may 
reimburse the employees for the attorney fees as a necessary expense 
of its appropriations under our decisions in 67 Comp. Gen. 37 (1987) 
and 61 Comp. Gen. 515 (1982).[1]

Our decisions have consistently recognized that Justice
has exclusive authority to determine whether agency appropriations may 
be used to reimburse employees for private attorney fees incurred in 
federal criminal proceedings.  E.g., 70 Comp. Gen. 628 (1991).  
Therefore, it would not be appropriate for our Office to determine 
whether FDA may reimburse the employees at issue here.  Our Office 
will determine whether agency appropriations may be so used only where 
Justice defers to the employing agency, and the agency, in turn, 
requests our opinion.  Id.

The decisions of this Office cited by HHS as possibly authorizing the 
use of FDA appropriations are not relevant here.  In both 67 Comp. 
Gen. 37 and 61 Comp. Gen. 515, we approved the use of agency 
appropriations to pay for attorney fees because Justice does not 
provide federal employees with representation in administrative 
proceedings.  This case does not involve an administrative proceeding.

In a March 4, 1993 letter to this Office, the Acting Attorney General 
articulated Justice's policy regarding the reimbursement of attorney 
fees in instances, such as here, where reimbursement is claimed after 
the conclusion of a criminal investigation.  The Acting Attorney 
General noted that, generally, employees are required to make a timely 
request for representation rather than retaining private counsel and 
later requesting reimbursement of fees incurred.  Nevertheless, he 
explained, in rare instances, Justice may agree to reimbursement where 
a private attorney has been retained without advance approval, if all 
of the following circumstances are present:

     --   the employee made a timely request for    representation or 
          did not do so because he was not informed of its 
          availability;

     --   the request was delayed or denied for reasons of 
          inadvertence, neglect, or mistake;

     --   the exigencies of the litigation required that the employee 
          protect his interests by retaining counsel before receiving 
          approval from Justice; and,

     --   representation of the employee either by a Justice 
          Department attorney or by a private attorney retained at 
          Department expense would have been appropriate.

In view of the above, FDA's request for reimbursement of the 
attorneys' fees should be referred to Justice for consideration.  
Justice has the responsibility for determining the interests of the 
United States in litigation.  Our cases do not support and were not 
intended to allow agencies to pursue their own litigative policies.  
Instead they recognize the availability of agency appropriations, 
where otherwise necessary and proper, for uses consistent with the 
litigative policies established for the United States by the Attorney 
General.  Allowing the reimbursement of the attorneys' fees, in this 
case, as a necessary expense of HHS appropriations would place this 
Office and HHS in the position of contradicting the clearly expressed 
intent of the Congress to centralize control of government litigation 
under the Attorney General.  70 Comp. Gen. 647, 650 (1991).

Comptroller General
of the United States

B-251141.2

The Honorable Frank R. Wolf
House of Representatives

Dear Mr. Wolf:

This responds to your letter concerning the Department of Health and 
Human Services' (HHS) request for our opinion on whether agency 
appropriations may be used to reimburse Food and Drug Administration 
employees for private attorney fees incurred incident to a federal 
criminal investigation.  Enclosed is our decision of today's date 
which recommends that HHS refer the employees' requests for 
reimbursement to the Department of Justice for consideration.

Sincerely yours,

Comptroller General
of the United States

Enclosure

1. Under the "necessary expense rule," an appropriation made for a 
specific object is available for expenses necessarily incident to 
accomplishing that object unless prohibited by law or otherwise 
provided for.  6 Comp. Gen. 619, 621 (1927).