JUSTICE DEPARTMENT VIEWS LETTER ON OPM DRAFT BILL TO PROHIBIT PAYMENT OF ANNUITIES UNDER ANY FEDERAL RETIREMENT SYSTEM TO FEDERAL EMPLOYEES CONVICTED OF A FELONY RELATED TO FEDERAL EMPLOYMENT

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000400570022-4
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 6
• Document Creation Date: December 21, 2016
• Document Release Date: August 15, 2008
• Sequence Number: 22
• Publication Date: August 16, 1983
• Content Type: MEMO

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EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
August 16, 1983
LEGISLATIVE REFERRAL MEMORANDUM
TO: Legislative Liaison Officer
Office of Personnel Management
Department of Defense
Department of State
Central Intelligence Agency
SUBJECT: Justice Department views letter on OPM draft bill to
prohibit payment of annuities under any Federal
retirement system to Federal employees convicted of a
felony related to Federal employment.
The-Office of Management and Budget requests the views of your
agency on the above subject before advising on its relationship to
the program of the President, in accordance with OMB Circular A-19.
A response to this request for your views is needed no later than
September 16, 1983.
Questions should be referred to Frank White
(395-6156 ) or to Hilda Schreiber
the legislative analyst in this office.
a ? &?Yt r3 Gam.t~ vr. / i~
(395-4650 )
r,tio t?~f.-1 P~~tvw ~I?- DO Tio Naomi R. Sweeney for
Enclosures
.....!Assistant Director .tor
^-r-------
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Office of LegislaU Affairs
Honorable David A. Stockman
Director
Office of Management and Budget
Washington, D. C. 20503
Dear Mr. Stockman:
AUG 1 5 1983
This is in response to your request for the views of the
Department of Justice on the OPM draft bill to amend section 8312
of title 5, United States Code, and the State Department analysis
of the captioned proposed legislation. This proposal provides
that an individual may not be paid an annuity under the civil
service retirement system or other retirement systems of the
Government of the United States for service as a Federal employee
if convicted of any felony which occurred in connection with his'
employment as a Federal employee and is punishable by imprison-
ment for two or more years. The Department of Justice has taken
the position that although the OPM proposal is conceptually sound,
it requires extensive reworking before it can make a meaningful
contribution to the federal law enforcement program involving
employee misconduct. These views, and our specific recommenda-
tions concerning areas where this proposal requires more work,
are contained herein.
Summary
The law governing the disallowance of federal', pensions is
presently codified at 5 U.S.C. S 8312. This section provides
that federal civilian annuities and military retired pay shall
not be payable to employees who have been convicted of one or
more criminal offenses involving treason, sabotage, or inten-
tional breaches of the national security. In the event that an
employee becomes ineligible for an annuity or, retired pay by
operation of this statute, the survivors and beneficiaries of
that employee are also disqualified from participating in it.
The present statute specifically lists the criminal offenses that
lead to pension disqualification.
The bill proposed by OPM-would amend section 8312 by adding
to it a new subsection which,-in turn, would greatly increase the
number and nature of offenses that lead to disqualification for
civilian annuities. - Specifically, under this proposal an other-
wise qualified employee would automatically lose his annuity upon
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his conviction of any felony under State or federal law which is
punishable by two or more years of imprisonment and which occurred
"in connection with" his employment by the United States.,.
As with the disqualification for national security crimes
presently included in section 8312, annuity disqualification under
the OPM proposal would run beyond the offending employee to his
beneficiaries and survivors. In' addition, the annuity disquali-
fication provided for in the OPM proposal is mandatory and, thus,
a necessary consequence that automatically follows conviction of
one or more of the crimes generally described. However, unlike
the present disqualification law, the OPM proposal opts for a
general description of disqualifying crimes rather than for a
list of specific statutory offenses. Finally, unlike the present
disqualification law, the proposal applies only to civilian
annuities, and not to military retired pay.
Recommendation
The Department is of the opinion that there is merit to
expanding 5 U.S.C. S 8312 to deny annuities and retired pay to
employees convicted of specifically enumerated additional crimes,
such as bribery of a public official and other offenses which
reflect a breach of the public trust. However, we believe that
the OPM proposal is overly broad and potentially harmful to the
plea bargaining process but at the same time too narrow in its
application only to civilian annuities and not to military re-
tired pay. Therefore, we would recommend that the Department
support OPM's proposal if it is modified (1) to list appropriate
offenses; (2) to apply to both annuities and retired pay; and
(3) to provide for the discretionary denial of annuities and
retired pay, at least for certain included offenses. We would
also recommend that consideration be given to amending section
8312 so that survivors and beneficiaries are not denied annuities
and retired pay by reason of the offending employee's conviction
of a specified offense.
Discussion
Employee crime by federal personnel is .a problem demanding
firm law enforcement measures. While the creation of the blanket
rule proposed by OPM concerning pension forfeiture may have
superficial appeal in this regard, upon closer examination it is
apparent that the idea has serious flaws which, in our view, will
impede rather than promote the administration of criminal justice.
As is the case with all crimes, employment-related offenses
by federal personnel vary widely from case to case in their
severity, in the intent with which they are committed, and in the
detrimental societal consequences they cause. It is important
that the federal criminal justice system retain the capacity to
respond to these differences in aggravating factors. Thus, we
believe that any amendment of 5 U.S.C. S 8312 should reflect
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careful consideration of the nature, of the offenses that should
lead to pension denial; the across-the-board approach of OPM's
proposal is too inflexible.
A federal annuity often represents a lifetime's work and a
significant expectation of future remuneration resulting from
that work. In practical terms its deprivation under the provi-
sions of section 8312 can constitute an extreme penalty that
transcends in severity any criminal sanction which may be judi-
cially imposed for the offenses to which section 8312 applies.
The severity of the penalty is aggravated by the fact that a
section 8312 disqualification applies to survivors and benefi-
ciaries of the offending employee, whose financial security may
well be severely jeopardized even though they played no part
whatever in the underlying criminal conduct.
Many of the offenses falling within the scope of the OPM
proposal are status crimes that involve only a minimal degree of
criminal intent. Examples of such offenses are conflict-of-
interest laws in the 18 U.S.C. ?? 203 through 208 series and the
laws dealing with political activity within the federal service,
such as 18 U.S.C. ?? 602, 603, and 607. Other offenses involve
readily apparent criminal intent but often result in losses that
are comparatively inconsequential and that hardly warrant such a
severe sanction as forfeiture of a lifetime pension.
In those instances where a federal employee has committed a
criminal offense while in office that has caused the government a
considerable monetary loss, means presently exist to recover the
loss through a collateral civil action following criminal convic-
tion. Under such circumstances the conviction can be pleaded
collaterally in the subsequent civil suit to prove the employee's
underlying liability, and the employee's pension account may be
levied against to satisfy a resulting judgment. In addition,
conviction of employment-related crimes carries with it automatic
exposure to termination and other adverse action prodeedings pur-
suant to 5 U.S.C. ? 7513. The government, therefore, presently
has the means to remove malfeasant personnel and to levy against
their pensions to the extent necessary to make the government
whole for the harm their criminal conduct has inflicted. In many
cases these civil remedies are a sufficient supplement to the
penal sanctions that -follow from a criminal conviction to vindi-
cate the societal interests involved.
Moreover, an overly broad and inflexible rule requiring pen-
sion forfeiture under the conditions embraced by the OPM proposal
will, in our view, seriously impede 'the Department's ability to
secure guilty pleas from malfeasant employees in many cases in-
volving felonious conduct. Few, if any, federal employees charged
with the least serious felonies included within the OPM proposal
will choose to relinquish their -pension rights voluntarily by
pleading guilty. As a result, the OPM proposal will cause a sub-
stantial increase in the -number of employment-related cases that
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have to be tried or disposed of through misdemeanor pleas, to the
detriment of the efficient and firm administration of justice in
this area.
Finally, we know of no justification for OPM's proposed ex-
pansion of 5 U.S.C. ? 8312 to include additional offenses affect-
ing civilian annuities only and not military retired pay. Section
8312 currently provides for disqualification for annuities and
retired pay, as defined in section 8311, upon conviction of the
listed offenses. If there is a need for expansion of section
8312 in order to deter crimes by federal employees, the same
deterrent effect should be sought for members of the military.
Thus, we suggest that OPM's-draft bill be amended to deny both
civilian annuities and military retired pay-.
We would be pleased to offer our assistance to OPM to estab-
lish which particular offenses should be added to 5 U.S.C. ? 8312
making pension denial applicable. As indicated, bribery of a
public official is an example of an offense which should be added
because of the breach in public trust which accompanies it. Cer-
tain crimes of violence against the United States, such as mali-.
ciously damaging or destroying property of the United States by
means of an explosive in violation of 18 U.S.C. ? 844(f), may
also be appropriate for inclusion in 5 U.S.C. ? 8312. In addi-
tion, employment-related narcotics trafficking offenses, such as
drug sales by law enforcement agents for their personal enrich-
ment if this conduct arises in connection with official duties,
should lead to pension denial. These examples should not be
considered all-inclusive since we believe there are numerous
offenses which should be evaluated for addition to 5 U.S.C.
? 8312.
In addition to specifying particular offenses for inclusion
in 5 U.S.C. ? 8312, we would also recommend making pension denial
a discretionary, rather than a mandatory, result of conviction,
at least for certain offenses. Mandatory disqualification may be
warranted for the offenses currently listed in section 8312 and
possibly for certain additional offenses, such as bribery. How-
ever, for other includable offenses which reflect a lower degree
of abuse of public office, case-by-case consideration may be
necessary to assess the appropriateness of pension denial. Lan-
guage providing for discretionary pension denial should establish
guidelines or standards applicable to a decision to deny annui-
ties or retired pay so that an overly broad delegation of authori-
ty does not result.
Finally, if 5 U.S.C..,S 8312 is to be broadened, considera-
tion should be given to eliminating its harsh effect on survivors
and beneficiaries. Denial of benefits to them by reason of the
offending employee's conviction of the crimes specified directly
penalizes persons other than the individual convicted of criminal
activity. Disqualifying the offending employee from eligibility
for a pension would appear a sufficient penalty, in addition to
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40 . 49
the criminal and possible civil sanctions that may be imposed, to
deter criminal activity by federal employees.
The State, Department's comments concerning this pension
proposal mirror our analysis of its weaknesses. State notes
the unfairness of the effect that pension disqualification pur-
suant to 5 U.S.C. 8312 has on surviving spouses, and the textual
imprecision of the terms "in connection with" federal employment
on which OPM would have pension disqualification turn. Signifi-
cantly, the State Department stresses the adverse effect that a
blanket disqualification provision will have on the plea bargain-
ing process. Finally, State notes the failure of the OPM pro-
posal to take into account the recent changes in the federal
pension program caused by this year's amendments to the Social
Security Act.
While State does not oppose the OPM proposal, the thrust of
their comments as we view them is that the idea needs much more
study to be workable. We share these concerns.
Sincerely,
'(Signed) Robert A. McConnell
Robert A. McConnell
Assistant Attorney General
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