Note from John Hinman: Rob, as the former Chief Counsel of the TTB, is the consummate industry insider. His blogs are designed to lay bare the inner workings of the TTB in this time of unpredictable enforcement priorities. His goal is to ensure a level playing field between TTB and the industry. In this blog, Rob opens the kimono of the TTB and seeks transparency on the monetary and other rewards being bestowed upon investigators for making trade enforcement cases. Rob is also seeking help with his campaign for open government by seeking crowd funding for the cost of opening the TTB’s records to public scrutiny. This important campaign seeking truth is described below and deserves to be supported.
Regardless of the policies of the TTB trade enforcement officials, Rob (and all of us here at Hinman & Carmichael LLP) strongly supports the efforts of all the good folks at TTB who labor daily for the welfare of the industry; this series of blogs exposing questionable TTB practices is not aimed at them. Those who work on labels, formulas, writing regulations, aiding international trade, laboring hard in the National Revenue Center with ridiculous backlogs, and in the Office of Management and the Office of IT support have Rob’s, and our, highest respect and total support.
Rob is the former TTB Chief Counsel (2003 to 2012) and handled independent consulting projects prior to joining the National Association of Beverage Importers (NABI) as President last Fall. All the views he expresses below are his alone and are not intended to reflect the views of NABI or any of its Members.
By Rob Tobiassen
Recognizing the Good Work of Government Employees is Not its Own Reward
The Federal Government has very extensive and well-funded bonus and award programs. Good work gets financial awards. These run the gamut of monetary awards from special act awards, spot awards, quality step increase awards for salary adjustments, senior executive service bonuses ranging up to 20 percent of base salary, to time off awards. TTB holds in-house award ceremonies in the Historic Cash Room in the Main Building of the Treasury Department next to the White House to distinguish the recipients of these awards. It is a time of honor and respect for solid public service. Or at least, that is what it is supposed to be.
Last year at one of the TTB Trade Practice Seminars, the TID (Trade Investigation Division) Division Director told the room his salary is the same regardless of the outcomes of the investigations. This was to convey the notion he (along with his investigators and superiors) had no financial incentive to find violations that do not exist. This comment struck and stayed with me.
I remember thinking, “Well, in one sense ‘yes’ with respect to salary, but what about the huge awards and bonus program of TTB. Surely someone is or will be getting monetary awards and bonuses or time off awards for their case work in the trade practice enforcement investigations.”
The investigations and settlements are simply too big and too important not to be included in the award and bonus programs.
What has TTB paid out in awards and bonuses? How do we find out?
Thinking of the TID Division Director representation I heard last year, I filed a Freedom of Information Act (FOIA) request on April 21, 2019 for complete and detailed awards and bonus information on 22 TTB named employees for fiscal years 2016 through 2019. I also requested award and bonus records for any employee not listed as one of the 22 but who received an award or bonus that was, directly or indirectly, related to investigations and or settlements or administrative actions conducted under the unfair trade practice provisions of the Federal Alcohol Administration Act, 27 USC 205(a) to (d), including any investigations relating to the accuracy or validity of the basic permits held by industry members being investigated under these provisions.
This important information would assist in determining what (if any) incentives exist among the TTB participants in the current round of investigations of industry trade practices. This is information the industry and the public needs to know.
Three reasons justify this information being made public.
· First, Office of Personnel Management (OPM) make this public information.
· Second, the TID Division Director has put the question out to the public in the Trade Enforcement seminars - so we deserve an answer.
· Third, in the 1990s following public hearings on alleged IRS abuses of taxpayers, Congress enacted a provision prohibiting the amount of tax collections by an IRS employee being used as part of such employee’s evaluation.
Congress, in the IRS situation, intended to prevent a financial incentive for IRS employees to find delinquent taxes where none existed to get higher evaluations to justify salary bonuses.
Finally, I noted this information would be useful for industry conference speaking engagements that educate industry and the public. I offered to pay up to $1000 for search fees - - though I asked that the documents be disclosed at no charge because the OPM regulations established this was public information and the disclosure was in the public interest.
What is TTB Hiding Here? Where is their Pride in their Work Efforts? Or is this “Blood Money?”
On May 2, 2019, TTB responded. After acknowledging my reasoning for disclosing the awards and bonus records, TTB advised that my request was not a “perfected” because I only agreed to pay for search fees and not copying fees. They denied my request to waive the FOIA fees and did not address the question that the OPM regulations makes no reference to fees for this specific information (it does for other categories of information sought).
This is called a “stonewall,” a term gaining popularity in many government circles.
TTB advised that the search fees were estimated to be $1040. Further, the letter advised that the review time fees and the copying fees could not be estimated until after the search was completed. And, until the review was undertaken, it could not be determined whether any FOIA exemptions would be applied. Bottom line, after spending several thousands of dollars, it could end up with no award or bonus information disclosed regardless of the OPM regulations.
Parenthetically, there was a little clarification about the fee charge that resulted in a telephone conversation and email exchange between the TTB Disclosure Official and me. The information exchange is attached.
The TTB is bending over backwards to avoid disclosing this information. Pride in a job well-done is the aim of giving an award or bonus to an employee. Traditionally, TTB has been proud to highlight these honors. TTB announces certain awards and recognition received by TTB on its website. Recently, for example, two TTB employees received the “Gears of Government Award” - -as highlighted in the TTB Newsletter of March 15, 2019.
So why hide these awards and bonuses now? At the TTB Trade Practice Seminars, TTB stresses that only solid and proven investigations are taken forward. If so, what is TTB afraid of disclosing here?
“Blood money”[1] is defined as including: “money obtained ruthlessly and at a cost of suffering to others.” I selected the phrase because a client told me that TTB investigators did “high fives” when receiving a call during an interview that a case was settled. Many industry members feel mistreated by the investigators and TTB executives involved in these cases. This is not what they expect from career civil servants.
Do we have the Right to Demand Transparency from the TTB?
I remain confused why TTB would not freely disclosure the detailed awards and bonus information to show it recognizes a job well-done. The OPM regulation allows TTB to furnish it at no charge. Why is TTB afraid to put this information out there? If TTB were proud of these awards and bonuses, then they would freely post them with pride.
They know that I will make the information public. They know that the industry members who have entered into settlements for any number of reasons, some of which the industry members involved consider unfair and unjust, can identify how much the TTB investigator received in a monetary award or bonus for achieving that settlement.
As public citizens and taxpayers, you can assess what you think of the award and bonus practice.
As public citizens, you can raise with your elected representatives whether TTB should be covered by limitations like those imposed on the IRS.
Help Pay these TTB Fees by Crowdfunding Participation – Thank You
I am asking for your help here. TTB will only disclose (or consider disclosing) this information after paying a high fee.This information will benefit the industry.I will be setting up a crowd funding site for contributions and will publish a subsequent article with information about how concerned industry members can participate. This use of crowdsourcing is within the “Ethics Considerations of Crowdfunding” in Ethics Opinion 375 issued by the Bar of the District of Columbia, which guides me in my ethics decision.