Social Security employees face $3.8 million in work-related fines

Four Social Security Administration employees have been informed of proposed fines of as much as $3.5 million for actions taken in the course of their duties reviewing disability claims, according to a grievance filed by a federal employee union.

Officials with the National Treasury Employees Union, which is representing three of the four employees in legal proceedings, said Thursday that the three attorneys and a supervisor have been told they face suggested penalties of $5,000 per violation for cases in which they allegedly used expert testimony improperly to help justify benefits decisions. The employees cited the testimony at the direction of an administrative law judge, union officials said.

This amounts to potential fines of between $100,000 and $215,000 each for the attorneys; the supervisor, who was involved with more than 700 cases, has been informed of a proposed fine of more than $3.5 million. SSA's inspector general office, which union officials said has been investigating the matter for more than four years, proposed the penalties.

According to NTEU President Colleen Kelley, the alleged "material misstatements" stem from the employees' repeated use of testimony by a single expert who answered a series of general questions in a single case to assist in determining benefits eligibility. Those statements were then applied to later cases at the judge's direction, Kelley said. That practice was taught in official training sessions and commonly used within the Office of Disability Adjudication and Review where the attorneys worked, she said.

Describing the fines as absurd, Kelley said the federal employees' actions should be legally protected in at least two ways: first, through the immunity that shields federal employees from personal liability for actions taken in the course of official duties; and second, through a quasi-judicial immunity that covers judges and those working with them. The immunity is designed to protect the independence of the judicial process.

"To challenge a judge's evidentiary technique has far-ranging ramifications for not only this agency but for other agencies where you have employees doing similar things," said Robert Shriver, NTEU's assistant counsel.

Kelley said the inspector general's office has reviewed the approximately 700 cases in question, and stressed that the disability determination was not found to have been improper in any of them.

Jonathan Lasher, a deputy chief counsel for the IG's office, said he could not confirm or deny the existence of any case against an individual because of Privacy Act restrictions. But he took issue with a statement by Kelley that SSA has never before used Section 1129 of the Social Security Act, which covers factual misstatements that affect benefits decisions, against agency employees. Lasher said employees have been fined before under that section, and emphasized that it applies to "wrongful acts."

"If we received information suggesting that a particular SSA policy or practice was inefficient, was unfair, wasted money, any number of things, that would generally be looked at by the [IG's] Office of Audit," he said. "Those generally would not include an allegation of wrongful or even criminal activity. [They would be] more in the program improvement realm."

The IG's Office of Inspection handled this case.

The IG has to date formally assessed a penalty of $215,000 against one attorney, who has retained private legal help but is also working with the union. In the other three cases, the employees have submitted financial statements to the IG office and are awaiting finalization of the penalties.

The employees will be able to request hearings before an administrative law judge, and either side can appeal that decision to a departmental appeals board, the Social Security Commissioner and ultimately the U.S. Court of Appeals, NTEU officials said.

The union has also written to SSA Commissioner Jo Anne Barnhart requesting that she throw out the penalties immediately.