DOT Inspector General Authority Tested In Court Case
Inspector General Kenneth M. Mead and DOT say yes. Attorney Anthony J. McMahon, representing a half-dozen companies he says were “raided” by agents from the Office of Inspector General, says absolutely not.
Judge Thomas F. Hogan of the U.S. District Court for the District of Columbia is expected to clarify the matter this summer — at least temporarily — when he rules on a class action lawsuit filed by McMahon (6-7, p. 5).
The Bethesda, Md., attorney seeks a preliminary injunction barring the inspector general from conducting any more criminal investigations of trucking companies.
On June 2, McMahon faced off against Roger Williams, senior counsel for the OIG, and Assistant U.S. Attorney Halsey B. Frank in a battle over the agency’s authority.
A ruling in favor of the plaintiffs could bar the OIG from conducting investigations that they say are tantamount to heavy-handed enforcement tactics.
In the courtroom, McMahon described scenes where OIG agents entered the offices of K&C Trucking by force, broke open desks, threw employees up against the wall and confined them in a kitchen for several hours.
OIG General Counsel Roger Williams called that allegation “baloney.”
“You don’t put people up against a wall, of course not,” he said. “But you do need to secure the building to make sure documents don’t go out the door.”
The suit claims these “raids,” in which the companies’ business records were seized, have, in effect, put the carriers out of business. The records, McMahon said, are still being held.
“Because of the loss of records taken during the raid, K&C cannot do business,” James E. Sanders, president of Lone Wolf Transportation and vice president of K&C Trucking, said in a deposition. “It cannot bill or collect from shippers or pay haulers. We don’t know who we owe or who owes us.”
K&C Trucking President Norvell Preston said, “It was the worst thing I’d ever seen — never even seen nothing on TV like it.”
Preston recounts a story in which the state police, DOT officials, the FBI and the inspector general “stormed in building on Oct. 23, 1998, wearing bulletproof vests, forbidding K&C workers to talk, make phone calls or answer phones.”
“They ransacked through every office in the building,” Preston said. “They confiscated 103 boxes of stuff — logs, payrolls, everything.”
McMahon, a former Federal Highway Administration chief counsel and the man behind TUFS, told the judge that “up to 18 months ago only the FHWA’s Office of Motor Carriers investigated trucking companies.”
Inspectors general have traditionally been limited to “in-house” investigations of fraud and mismanagement within federal government agencies.
McMahon claims that inspectors general were created to “watch the watchers” — not to create additional regulatory enforcers.
The Inspector General Act of 1978 granted inspectors general powers “to conduct and supervise audits and investigations relating to the programs and operations of their agencies.”
At issue in this case is how the phrase “relating to” is defined.
McMahon bases his arguments largely on a March 1989 opinion of the Justice Department’s Office of Legal Counsel, which addressed the authority of the Labor Department’s OIG to conduct criminal investigations.
That opinion seems to limit the OIG’s powers to internal investigations of fraud and mismanagement within federal agencies or on the part of government contractors.
“The inspector general has an oversight rather than a direct role in investigations pursuant to regulatory statutes; he may investigate the department’s conduct of regulatory investigations, but he may not conduct such investigations himself,” the opinion reads.
When Judge Hogan remarked that the 35 cases the OIG is investigating only amount to four-tenths of a percent of all motor carrier investigations, McMahon replied, “They just got started, your honor. And even one is too many.”
But Frank countered that OIG was not engaging in regulatory investigations at all “but just a few focused criminal investigations.”
McMahon calls the 35 number an “intentional misrepresentation.”
“I believe the number is far larger now,” he said.
DOT’s OIG did begin to take a more unilateral approach to criminal investigations in 1996, Williams conceded.
“We were seeing more and more egregious examples of flagrant [safety] violations — trucking companies encouraging their drivers to file false logs, etc.,” Williams said. “The authority to go outside has always been there.”
A DOT spokesman said, “Secretary [Rodney] Slater unequivocally supports these OIG investigations of motor carriers that violate safety regulations.”
