office of the naval inspector general case number: 20000836

Edited for Public Release

- 1 -

Office of the Naval Inspector General Case Number: 20000836

Report of Investigation

12 February 2002 Subj: SENIOR OFFICIAL CASE 20000836; ALLEGED ABUSE OF POSITION

AND MISUSE OF RESOURCES BY DR. JOHN E. SIRMALIS, SES-5, DR. DAVID F. DENCE, SES-4, AND MR. JUERGEN G. KEIL,

SES-4, AT NAVAL UNDERSEA WARFARE CENTER, NEWPORT, RI

*****

Preliminary Statement 1. In an undated letter to the N val Sea Systems Command (NAVSEA) IG, forwarded via telefa to the Naval Inspector General (NAVINSGEN) on 11 September 2000, a complainant alleged abuse of position and misuse of resources by three SES managers at Naval Undersea Warfare Center (NUWC) and its subordinate activity, NUWC Division Newport (DIVNPT), a Navy Working Capital Fund activity. Allegedly, after Dr. David Dence's performance as a Directorate Head at NUWC DIVNPT was found deficient, he was demoted organizationally to a GS-15 Department Head position, although he retained his SES grade. To persuade Dr. Dence to accept demotion without protest, Dr. John Sirmalis, NUWC Technical Director (TD), allegedly paid him a $10,000 retention bonus, in spite of his deficient performance. The complainant also alleged that Dr. Sirmalis and Dr. Dence conspired with Mr. Juergen Keil, Executive Director (ED), NUWC DIVNPT, to artificially inflate the scope and technical responsibilities of Dr. Dence's new department, in order to justify heading it with an SES. In addition, the complainant alleged that NUWC officials unfairly removed from his Department Head position, in order to make it available for Dr. Dence, and reassigned him to a makeshift position with no supervisory responsibilities. [Refs (a) and (b)] 2. The complainant further alleged that the command was reluctant to confront Dr. Dence's deficient performance, because it feared exposure of Dr. Sirmalis' and Dr. Dence's systematic practice of misusing their positions and misapplying BRAC (Base Closure and Realignment) laws to justify improperly carrying-over large amounts of unused annual leave. Allegedly, this practice has extended over a period of years, during which they took little or no annual leave, and they have built up annual

(b)(7)(C)

(b)(7)(C)


- 2 -

leave balances that will result in paying out hundreds of thousands of dollars upon their retirements. [Refs (a) and (b)] 3. The scope of investigation consisted of interviews of personnel assigned and previously assigned to NAVSEA, NUWC, and NUWC DIVNPT. Documentation reviewed included personnel, financial, and program review records, as well as internal memoranda, leave applications, and historical pay/leave records provided by the NUWC DIVNPT payroll office and the Defense Finance and Accounting Service (DFAS), Pensacola, FL. 4. On 19 June 2001, the Naval Criminal Investigative Service (NCIS) declined investigative interest in the allegation of improper organizational realignment. On 11 September 2001, NCIS declined investigative interest in both the allegation of improper restoration of leave and an emergent allegation of improper use of religious compensatory time (RCT). [Refs (c) and (d)] 5. On 8 August 2001, NAVINSGEN requested that the Director, Plans, Programs, and Diversity, Office of the Deputy Assistant Secretary of the Navy (Civilian Personnel/Equal Opportunity) (DASN (CIVPERS/EEO)), provide a regulatory review of restoration of leave and use of RCT, vis-à-vis our investigative facts. His responses are provided in attachments (2) and (3) and augment the analysis and conclusions of this report.1 6. Investigative conclusions for allegations #1 and #2, as set forth on pages 28-29, 35, and 70-71, delineate necessary administrative remedies.

*****

Background

7. In July 2001, RDML(Sel) John Butler, USN, relieved RADM Charles Young, USN, as NUWC Commander and Deputy Commander for Undersea Technology (SEA-93). While still serving in those positions, RADM Young began serving as Vice Commander, NAVSEA in April 2001. The NUWC Commander’s office is located at NAVSEA Headquarters in the Washington Navy Yard. His NUWC staff is co-located with NUWC DIVNPT in Newport, RI.2 Commander, NUWC

1 See clarifying footnotes in Applicable Regulations under Allegation #2. 2 In the vernacular, NUWC Headquarters is in effect considered a “tenant” of NUWC DIVNPT.


- 3 -

DIVNPT, currently , USN, reports directly to Commander, NUWC. [Refs (e) and (f] 8. As NUWC TD, Dr. Sirmalis reports to RADM Butler. As NUWC DIVNPT ED, Mr. Keil reports directly to ; however, as a practical matter, he reports to Dr. Sirmalis on technical issues. [Ref (g)] 9. This report will show that while the complainant understandably questioned the command's motivation for the realignment of the Weapons Systems Directorate (Code 80), as well as for the concomitant award of a retention bonus to Dr. Dence, there were otherwise apparently legitimate reasons for these actions. [Refs (a), (g), and (h)] 10. Conversely, this report will show that Dr. Sirmalis, Mr. Keil, and Dr. Dence improperly accumulated and restored large amounts of annual leave during the period 1995 through 2001. As will be further explained elsewhere in this report, SES members were no longer permitted to accumulate unlimited annual leave balances after October 1994. To circumvent this limitation, these individuals manipulated the system improperly to maximize and carry-over their unused leave balances from year to year. Their methods included improperly requesting restoration of specific amounts of leave, improperly making themselves beneficiaries of BRAC for automatic restoration of leave, and improperly using RCT in lieu of annual leave (to maximize the amount of unused annual leave available to be restored each year).3 11. The following table depicts the subjects' leave records for the period 1995 through 2000, during which they each restored 1,200 to 1,300 hours of unused annual leave, while at the same time taking substantial amounts of RCT. [Ref (i)]

Dr. Sirmalis Leave Leave Leave RCT Leave Restored Year Earned Used Used Restored Balance 1995 208 0 99 208 256 1996 208 0 127 208 464

3 Members of the SES are not entitled to earn and use compensatory time, with the exception of RCT. Although the subjects of the investigation commenced earning and using RCT around 1990, we did not investigate the specifics of abusing it prior to 1995.

(b)(7)(C)

(b)(7)(C)


- 4 -

1997 208 0 89 208 672 1998 208 0 194 208 880 1999 208 0 46 208 1,088 2000 216 4 127 212 1,300

Dr. Dence Leave Leave Leave RCT Leave Restored Year Earned Used Used Restored Balance 1995 208 0 169 208 256 1996 208 0 192 208 464 1997 208 0 176 208 672 1998 208 0 155 208 880 1999 208 0 145 208 1,088 2000 216 0 139 216 1,304

Mr. Keil

Leave Leave Leave RCT Leave Restored Year Earned Used Used Restored Balance 1995 208 0 64 208 208 1996 208 0 148 208 416 1997 208 40 147 168 584 1998 208 0 123 208 792 1999 208 0 84 208 1,000 2000 216 0 88 208 1,208 12. The estimated retirement value of the subjects' accumulated annual leave is $694,210.00, broken out as follows:

Annual/Restored Leave Balances and Value as of 2 August 2001

Hrs of Hrs of Total Annual Restored Hours Retirement Value * Dr. Sirmalis 2,518 1,260 3,778 $250,141 Dr. Dence 2,448 1,304 3,752 248,419 Mr. Keil 1,747 1,208 2,955 195,650 * All are pay-capped at $138,200 per year, $66.21 per hour

13. In April 1977 Dr. Sirmalis was promoted to GS-16 at the Naval Underwater Systems Center (NUSC), precursor to NUWC. In 1979 he became a “plank owner” in the SES. In approximately 1979, , NUWC DIVNPT, became the (b)(7)(C) (b)(7)(C)


- 5 -

Director at NUSC, a position in which he still serves, ough he now has the title, “ .” As Dr. Sirmalis’ protégé, Dr. Dence essentially followed in Dr. Sirmalis’ career path before Dr. Sirmalis became NUWC TD, although Mr. Keil succeeded Dr. Sirmalis as NUWC DIVNPT ED. Dr. Dence had a penchant for administrative matters, and so Dr. Sirmalis relied on him, as well as , for personal, administrative support. Dr. Sirmalis, Dr. Dence, and have worked closely with one another for 30 years. [Refs (g), (h), and (j)] 14. The subjects of this investigation, as well as some other employees at their commands, have worked for several years on a “variable work hour” schedule, known in the vernacular as “the Floating-40 system.”4 The “Floating-40 system” allowed them to work anytime of day or night, with no requirement to work daily core hours or a minimum number of hours in any given day. In effect, one could satisfy the workweek by working 40 hours in 2 days. The command's instruction, NUSCINST 12610.1B of 23 August 1989, is consistent with 5 CFR 610.111(b) and states: [Ref (k)]

When it is impracticable to prescribe a regular schedule of definite hours of duty for each workday of a regularly scheduled administrative workweek, the head of an agency may establish the first 40 hours of duty performed within a period of not more than 6 days of the administrative workweek as the basic workweek. A first 40-hour tour of duty is the basic workweek without the requirement for specific days and hours within the administrative workweek. All work performed by an employee within the first 40 hours is considered regularly scheduled work for premium pay and hours of duty purposes. Any additional hours of officially ordered or approved work within the administrative workweek are overtime work.

15. For ease of reference, the following organizational vertical chains-of-command are provided: NUWC Headquarters (Echelon-3):

Commander (O-7) TD (SES) Deputy TD (SL)

4 In December 1993, Dr. Dence requested conversion to “Floating-40.” In May 1994, Dr. Sirmalis was placed on “Floating-40.”

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 6 -

NUWC DIVNPT (Echelon-4):

Commander (O-6) ‘…………Chief Staff Officer (CSO) (O-5)

ED (SES) ‘…………Deputy ED (GS-15) Directorate Heads (SES) 16. Although this report addresses restoration of leave and use of RCT as separate allegations, when considered together, the facts of this case suggest a pre-meditated, conspiratorial effort to defraud the Government, with the support of the NUWC DIVNPT Human Resources Office (HRO).5

*****

Allegation #1: That between 1995 and 2001, Dr. Sirmalis, Dr. Dence, and Mr. Keil improperly caused restoration of forfeited annual leave, in violation of 5 USC § 6304, 5 CFR 630, DOD Financial Management Regulations, NUSCINST 12630.1B, and NUWCDIVNPTINST 12630.1C.

Rules for Members of the SES

17. Upon enactment of section 201 of Public Law No. 103-356, the Government Management Reform Act of 1994, SES employees could no longer accumulate an unlimited amount of annual leave. Effective 13 October 1994, the law imposed a 720-hour limit on the amount of annual leave that SES members can carry over from one leave year to the next. Those who had more than 720 hours of accumulated annual leave as of 13 October 1994 had their leave balances “grandfathered” as personal leave balances. (The grandfathered leave balances did not include any restored leave or any leave advanced to an employee prior to accrual.) [Ref (l)] 18. SES employees can carry annual leave from one leave year to the next, up to their personal ceiling. If they use more leave in a leave year than they earn, the difference is deducted from their personal leave ceiling at the start of the next leave year. If they earn more leave in a leave year than they use, the excess amount is forfeited. Thus, the personal leave

5 In interview in June 2001, Dr. Sirmalis, at age 66 with 44 years of Government service, stated that he planned to retire in 4-5 years. Evidence will show that he has improperly restored in excess of 1,000 hours of annual leave, scheduled to expire in January 2006.


- 7 -

ceiling is subject to reduction, but may never be increased. If an employee’s leave balance at the end of a leave year is 720 hours or less, the personal leave ceiling is no longer applicable, and the employee becomes subject to the normal 720-hour ceiling for the next leave year. [Ref (l)] 19. The rules on restoration of annual leave are the same for SES employees as they are for other employees. To be eligible for leave restoration, the employee must request the leave in writing before the start of the third biweekly pay period prior to the end of the leave year, and it must be approved. Restoration of any forfeited annual leave may then occur as the result of exigencies of the public business, if approved by the head of the agency or a designee; sickness; or administrative error. The restored leave is placed in a separate account and normally must be used within 2 years. As discussed elsewhere in this report, BRAC realignments/closures and the 1999 Y2K conversion efforts were exigencies of public business that could serve as the basis for automatic restoration of annual leave; i.e., without the requirement for the employee to request it, based upon pre-scheduled leave that was subsequently cancelled. [Ref (l)]

BRAC-91/BRAC-95/NUWC Headquarters 20. BRAC-91 recommended the realignment of NUWC into two major divisions: [Ref (m)] a. A Combat and Weapons Systems Division (CWSD), primarily responsible for submarine combat and weapon systems and combat systems in-service engineering (ISE), centered at Newport, RI,6 with an operating site at Norfolk, VA, and facilities at New London, CT; and b. A Weapons Systems ISE Division, primarily responsible for ISE, management of Pacific ranges, and depoting of weapons, targets, counter measures, and non-expendable equipment and centered at Keyport, WA. 21. BRAC-91 also recommended disestablishing the Naval Underwater Systems Center (NUSC), New London, CT, and

6 Although not technically falling into the category of “closure” or “realignment,” NUSC Newport was also disestablished as a separate command and realigned to merge with the CWSD Newport, as the center for the division. Functions were gained from the Naval Surface Warfare Center and the Naval Command and Ocean Surveillance Center, as well as NUSC Det New London.


- 8 -

transferring most of its functions to CWSD Newport, RI. Personnel involved with unique facilities remained in New London and were realigned as a detachment under CWSD Newport. The names, “CWSD Newport” and “CWSD Keyport,” were replaced with "NUWC Division Newport (DIVNPT) and NUWC Division Keyport (DIVKPT)." The New London Laboratory became “NUWC Detachment (Det) New London.”7 [Ref (m)]

22. In January 1992, NUWC Headquarters was established and located in Washington, DC.8 The former NUSC TD, Dr. , became the NUWC TD, and Dr. Sirmalis, who was previously the Director, Submarine Warfare Systems (Code-80), began serving as Acting Executive Director (ED) of NUWC DIVNPT.9 In the fall of 1992, NUWC Headquarters was moved to Newport and co-located with the NUWC DIVNPT, at which time Dr. Sirmalis was officially selected as the NUWC DIVNPT ED. Also at that time, various NUWC DIVNPT personnel (e.g., Human Resources Director, Chief Financial Officer, Facilities Coordinator, etc.) were designated “virtual staff.” Though they are not assigned as NUWC Headquarters employees, members of the “virtual staff” administratively support the headquarters. [Refs (g), (n), and (o)] 23. Congressionally approved BRAC-95 recommendations directed disestablishment of NUWC Det New London, CT, and transferred its functions to NUWC DIVNPT. NUWC Det New London’s mission ceased on 31 December 1996; the site was closed on 31 March 1997; and the Chief of Naval Operations disestablished it on 20 April 1998. [Refs (m),(o), and (p)] 24. As NUWC DIVNPT ED from October 1992 to February 1995 (when he became the NUWC TD), Dr. Sirmalis had offices in New London and Newport; however, he was not an employee of New London or any other BRAC installation during BRAC-91 or BRAC-95. Although his reassignment as TD nearly coincided with BRAC-95, no BRAC action caused the reassignment. [Refs (g) and (q)] 25. Mr. Keil was realigned from New London to the NUWC DIVNPT on 15 September 1996, which was effectively a change in duty station, but not a change in his position as Head, Combat

7 NUWC DIVNPT essentially had three “detachments” (New London, Norfolk, and Orlando), all of which were eventually closed. 8 The decision to establish NUWC was made prior to, and independent of, BRAC-91. 9 The title of “Executive Director” was not used at NUSC until NUSC was converted to NUWC DIVNPT.

(b)(7)(C)

(b)(7)(C)


- 9 -

Systems Analysis Department (Code 60). In October 1996, he was reassigned as the NUWC DIVNPT ED. [Ref (r)] 26. Dr. Dence was detailed to Newport in September 1992 and was officially reassigned from New London to Newport on 1 November 1992. He succeeded Dr. Sirmalis as the Director, Submarine Warfare Systems (Code-80). [Ref (s)]

Automatic Restoration of Annual Leave Due to BRAC 27. In May 1995, the NUWC Human Resources Office (HRO) announced that, pursuant to P.L. 102-484 and P.L. 103-337, employees who were in receipt of a transfer-of-function notice or located at a site scheduled to be closed or realigned under BRAC were entitled to automatic restoration of forfeited annual leave. In addition, the announcement stated that “employees who, due to the business exigency created by BRAC, forfeited annual leave” were "also eligible." This last category of "eligible" employees did not qualify for automatic restoration and should have been required to follow normal restoration procedures described in paragraph 19 above. However, as noted below, the NUWC HRO designated Dr. Sirmalis and Dr. Dence, along with about 50 other NUWC employees, as “BRAC Staff” and gave them automatic restoration status, whether or not they relocated from New London. Several years later Mr. Keil was retroactively included in that group. [Refs (t) and (u)] 28. In July 2001, independent of this investigation, the NUWC DIVNPT Payroll office prepared spreadsheets that document the command’s determination of BRAC exigency termination dates (ETDs) for purposes of defining periods of automatic restoration of unused annual leave. They cite, for approximately 140 employees, the specific dates on which BRAC-restored leave would expire if not used. In December 2000, when NUWC, for the second time, unilaterally decided to extend the BRAC ETD another year, annual leave that had been restored for other-than-BRAC reasons, in the cases of Dr. Sirmalis, Dr. Dence, and Mr. Keil, was absorbed into their BRAC-restored leave accounts. [Refs (v) and (w)] 29. Although BRAC rules provided for automatic restoration of forfeited annual leave, NUWC Financial Services Branch , Program and Financial Services Department, NUWC DIVNPT, stated that the command did not process BRAC-restored leave prior to 1995 and that BRAC-91 realignment did not result in automatic restored leave at NUWC. , published a memorandum in December (b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)


- 10 -

1994 that provided a list of employees with transfer-of-function notices. As well, he provided a list of Newport and New London employees “directly involved in the Division’s BRAC realignment actions” (the "BRAC Staff"), which included himself, Dr. Sirmalis, and Dr. Dence, but not Mr. Keil.10 In November 2000, Mr. Keil asked for clarification of the status of his BRAC leave account. then told that he had inadvertently left Mr. Keil off the list and that Mr. Keil should be added to the BRAC Staff for purposes of automatic restoration of leave. [Refs (u), (x), (y), and (z)] 30. In May 1995, established a policy that although no additional BRAC-restored leave could be accrued after an employee’s transfer date from the BRAC activity, the period during which BRAC-restored leave had to be used began in the year following the activity’s BRAC ETD, instead of on the employee’s transfer date.11 The original BRAC ETD was 30 September 1997, and the 2-year time limit for using restored leave began in the 1998 leave year. In December 1997, Mr. changed the date from 30 September 1997 to 30 September 1998; in November 2000, he changed it from 30 September 1998 to 15 December 1999.12 [Refs (w), (x), (aa), and (bb)] 31. As cited above, Mr. Keil was transferred from New London to Newport in September 1996 and was not yet designated a “BRAC Staff” official. As shown below, he requested restoration of leave for 1997, 1998, 1999, and 2000, but not due to BRAC. Each restoration had its own expiration date for use of the restored leave. Prior to 2000, the leave forfeited in 1997, 1998, and 1999 was properly not considered BRAC–restored leave, as it was forfeited after the date of Mr. Keil’s transfer. [Refs (cc), (dd), (ee), and (ff)]

32. also stated that, until the command’s policy was re-evaluated in 2001, any new annual leave forfeited and restored after the date of the employee’s transfer from the BRAC

10 The list of 54 also included some of ’s subordinates, command Co Dence’s wife, Dr. Sirmalis and at least 4 other SESers. 11 did not have the authority to set this policy. 12 ve restored (as a result of a specific request), due to the exigency of the public business, must be scheduled and used not later than the end of the leave year ending 2 er the termination of the exigency of the public business. inappropriately applied this concept to the automatic restorati ored leave due to BRAC, by applying the termination of the BRAC activity’s exigency to individuals after their BRAC-driven transfer. The exigency for them terminated upon their transfer.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 11 -

activity was not regarded as BRAC-restored leave, even if it was restored prior to the activity’s BRAC ETD. In early 2001, she asked for clarification of the policy. At that point, Ms. ; her supervisor, Accounting and Financial Services Division; ; and Mr. , HR Division, Department, met to discuss the interpretation of Question “Q20” in the attachment to DOD Civilian Personnel Management Service (CPMS) memorandum of 30 May 1995. The consensus and decision resulting from that meeting was to change policy, retroactively, to treat all annual leave that was forfeited and restored between the date of the employee’s transfer and the ETD as BRAC-restored leave. “BRAC Staff” personnel would derive the same benefit, but their restored BRAC leave would accrue from the beginning (1995) to the end (1999) of the BRAC exigency.13 Mr. Keil’s BRAC Staff status overrode his transfer status, and all of his restored leave for those years was converted to BRAC-restored leave, giving him a cumulative balance of 992 hours, which is set to expire in January 2005. For the years 1994 through 1999, the command credited Dr. Sirmalis and Dr. Dence each with an accumulated 1,088 hours of BRAC-restored leave, set to expire in January 2006. Dr. Sirmalis stated that he did not have any discussions with or Dr. Dence on how to maximize annual leave accumulation and plan for it accordingly. [Refs (u), (x), and (gg)]

33. , in a memorandum of 22 May 1995, stated that restored annual leave had to be used within two years following the termination of the business exigency upon which the restoration was based. Under OPM's Provisional Notice 630-7, the usage period could be extended, depending upon how much leave had been restored. Specifically, an employee with 416 hours (2 years) or less of restored leave had to use the leave by the close of the leave year ending two years after the termination of the business exigency upon which the restoration was based. “A20” in the attachment to DOD CPMS memorandum of 30 May 1995 stated that, for employees with more than 416 hours of restored leave, the usage period for the combined total was extended one year for each 208 hours, “or parts thereof,” in excess of 416 hours.14 [Refs (aa) and (hh)]

13 The command did not have the authority to make these policy decisions. 14 In Mr. Keil’s case, the total restoration of leave forfeited in 1995 and 1996 was 416 hours. However, the 208 hours forfeited in 1996 were not restored until 1997, which was after his transfer, and therefore were not eligible for automatic restoration. Although Mr. Keil did not qualify for any extended usage period, the command nevertheless, under the “BRAC Staff”

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C) (b)(7)(C)


- 12 -

34. stated that his policy decisions regarding changes to the BRAC ETD and restoration of annual leave were based on his own interpretation of written OPM and DOD guidance. Delays in construction in Newport impacted the schedule for relocating employees from Norfolk and New London, which prompted his decision to change the ETD to 1998. BRAC caused some functional realignment of work from Crane, Indiana, to Newport, which understood to be the final BRAC evolution that would impact Newport. Accordingly, he decided to change the ETD to December 1999. He acknowledged that the impact of his decisions “on a lot of people” was to extend the period for use of their BRAC-restored leave and that “Someone can come in and can say, ‘That wasn’t good judgment,’ after the fact.” Mr. recalled that “some senior people” were concerned about their “potential loss” of leave and asked him about extending the ETD. Dr. Sirmalis did not make inquiries, but Mr. Keil did. [Ref (ii)] 35. does not recall having discussions with anyone concerning the decision to allow automatic restoration of leave that was forfeited between an employee’s transfer date (i.e., after the employee had already left the BRAC activity) and the BRAC activity’s ETD. [Ref (ii)] 36. When asked what the basis was for his automatic restoration of leave associated with BRAC, Dr. Sirmalis stated: [Ref (gg), pp. 69-70]

[It] was based upon having to work the BRAC problem, solve the BRAC issues, convince the people to move, extensive travel and with tour guides and with the real estate agents, with everybody to get people to move....On top of the normal business exigencies, this was an added burden. Nobody said, “Get rid of your, the Washington term that’s loved to be used, ‘your day job,’ and do this.” Your day job was sufficient exigency, period, to have excess leave. But add this on top of it was a monstrous burden by a number of people.

37. In interview, Dr. Sirmalis was confronted with the fact that if his participation in BRAC issues constituted a bonafide exigency precluding use of annual leave, restoration of the forfeited leave would have required a specific request. He replied, “I guess that’s the rule; I don’t really steep myself in that knowledge.” [Ref (gg), p. 70)]

concept, gave him a 5-yr usage period commencing in January 2000, based on the increments of 208 hrs forfeited in 1997/98/99.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 13 -

Automatic Restoration of Annual Leave Due to Y2K

38. In August 1999, the Federal Register announced that Year 2000 computer conversion (“Y2K”) efforts were deemed to be an exigency of the public business for the purpose of restoring annual leave forfeited under 5 USC § 6304, and that the exigency terminated on 31 January 2000. For any employee who forfeited annual leave under 5 USC § 6304 at the beginning of leave year 2000, because the agency determined the employee’s services were required during the Year 2000 computer conversion exigency, the forfeited annual leave was deemed to have been scheduled in advance for the purpose of 5 USC §§ 6304(d)(1)(B) and 630.208. Finally, annual leave restored as a result of leave forfeited under Y2K, had to be scheduled and used not later than the end of leave year 2002 (i.e., January 2003). Approximately 95 NUWC employees, including Dr. Sirmalis, Dr. Dence, and Mr. Keil, were identified as Y2K officials and thereby made eligible for automatic restoration of leave forfeited in the 1999 leave year. [Refs (ii) and (jj)]

39. stated that, in December 2000, told her that when the BRAC periods were extended, “any leave in other accounts [got] swept up into the BRAC category.” In that context, he advised her that leave forfeited as a result of Y2K should be absorbed into BRAC-restored leave, except when the BRAC period extension reduced the usage time for the Y2K, in which cases the restored leave associated with Y2K should be kept in a separate account. [Ref (x)] 40. stated that ED, asked department heads to identify those employees whose leave was in jeopardy of being forfeited due to involvement with the Y2K initiative. He noted that OPM guidance defined eligible employees as those who were spending so much time on the Y2K initiative, that it would reasonably preclude them from taking annual leave. He advised Dr. Sirmalis of the automatic restoration-of-leave provision for such “Y2K” employees, but was unaware of whether Dr. Sirmalis was included in the list sent to the Payroll Office. He acknowledged that it is not necessarily reasonable for “the man at the top of the totem pole to be taking advantage of Y2K.” does not recall discussing with anyone the idea of wrapping Y2K restored leave into BRAC-restored leave. further stated: [Ref (ii), pp. 60]

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 14 -

You know, I look at restored leave...these regulations...are broad....There’s a sea of judgment available....Some of the guidance, it’s almost self-administering.

41. Dr. Sirmalis stated that no one discussed with him whether or not the leave he forfeited due to his Y2K efforts could be absorbed into his BRAC-restored leave. He also stated that he did not know how his status as a Y2K official was determined, “other than [he’s] in the chain [of command] that had to review everything.” [Ref (kk)] 42. NUWC DIVNPT, from , stated that he was unaware of any list of personnel designated as Y2K officials or the impact that Y2K participation would have had on employees' opportunity to restore annual leave. [Ref (ll)]

HR ’s Guidance on Restoration of Annual Leave

43. When the ceiling was placed on accumulation of SES annual leave in 1994, Dr. Sirmalis’ annual leave balance was 2,422 hours; Dr. Dence’s balance was 2,336 hours; and Mr. Keil’s balance was 1,635 hours. These numbers reflect “personal leave ceilings,” which could not be increased. If more leave was earned in a year than was used, the personal leave ceiling would not change, but the excess would be forfeited. If no leave was used during the year, then all of it was forfeited. With proper request and justification, however, leave earned could be restored for two years, and the restored leave would properly have been kept in a separate account. [Refs (i) and (l)] 44. By memorandum of 11 August 1994, “Guidance on Restoration of Annual Leave,” stated: [Ref (mm)]

...The approving authority for requests for the restoration of forfeited annual leave is the senior line manager of the organization where the requests originate, i.e., , (where there is no ), or Staff Head.15 Code 01A [ ED] approval is required in those situations where leave was forfeited due to an “exigency of public business,” and the leave of the approving official is affected by

15 This guidance regards approval of restoration-of-leave requests, not the actual exigencies upon which those requests are based. According to NUWCDIVNPTINST 12630.1C, the Deputy ED “is delegated the authority to declare a public exigency and to specify the beginning and ending date of the public exigency.”

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)


- 15 -

the decision. Code 01A is also the approving authority for Code 01 and assigned staff.16 All requests, following management approval, must be forwarded to Code 07422, via Code 082 (Newport) or Code 084 [New London].... Annual leave should only be restored when a work requirement of major significance prevented an employee from taking scheduled annual leave. Supervisors should be aware of their responsibility to ensure that employees...schedule, and where necessary re-schedule, their leave to avoid forfeiture. Supervisors should also recognize that restored annual leave represents an unbilled liability under “Managing to Payroll,” which must be paid-off when an employee resigns or retires.

45. also stated that when NUWC Headquarters became a separate command and co-located with NUWC DIVNPT in Newport, there was a decision that all NUWC DIVNPT administrative policies would apply to NUWC Headquarters personnel. For that reason, he considered it appropriate for Dr. Sirmalis, who was the NUWC DIVNPT ED prior to becoming the NUWC TD, to continue to submit his requests for restoration of leave to the NUWC DIVNPT Deputy ED for approval. Mr. Keil (as the new ED) followed the previously accepted practice of submitting restoration of leave requests to the Deputy ED.17 [Refs (j) and (nn)] 46. stated that he was “not in the reporting cycle for [Dr. Dence’s] performance appraisals or anything of that sort,” and that Dr. Dence reported directly to Mr. Keil. Mr. was concerned about the irregularity of a subordinate taking action on a senior’s request, as in his approving or disapproving leave and restoration-of-leave requests for Dr. Sirmalis and Mr. Keil. However, accepted the fact that he was continuing a practice established by his predecessor(s). Nonetheless, his immediate predecessor, Mr. , Senior Leader (SL) (equivalent to SES), Deputy TD, NUWC, does not remember approving or disapproving requests made by Dr. Sirmalis or Mr. Keil. [Refs (oo) and (pp)]

16 Designating the Deputy ED to be the approval authority for the ED is fundamentally improper. 17 In examining the f this case, it is particularly important to note that although ’s guidance in 1994 eventually allowed Mr. Keil to submit his leave requests to his Deputy for approval, nothing gave the authority to approve or disapprove Mr. Keil’s leave request

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 16 -

’s Role 47. Dr. Sirmalis stated that for years he has relied, and continues to rely, on Dr. Dence to provide him non-technical support, as he believes Dr. Dence “has a good business sense and a good legal sense.” At times he has asked Dr. Dence to submit leave applications for him, although he does not remember specific occasions. Dr. Sirmalis stated that he does not know whether has ever approved or disapproved a request of his for restoration of leave, and he opined that it would not be appropriate organizationally for to do so. He has no recollection of ever submitting a leave request to Mr. . Dr. Sirmalis further stated: [Ref (g), pp. 23, 24 and 38]

I don’t know who approves my leave.18 My secretary gets the approval from who[m]ever I need to get an approval. I always inform RADM when I’m taking leave so he knows. But as far as formal approval, we don’t have the little slips anymore saying you have to approve leave. You have to use a leave slip to request leave at the end of the year if you’re in a situation where you can’t take it... [otherwise] I don’t request leave. Beneath me, like Juergen Keil: I never approved leave for him...he informs me when he’s going to take leave. [Restoration of leave] that one has a signature chain...that needs approval. For Juergen, for example I’ll generally sign for him for restoration of leave if he can’t use it, approve it or disapprove it if he’s got leave he can’t use.19 ...If I’m not taking leave during the year, then near the end of the year I start worrying about that. I’m not using it, so near the end of the year I better document it to the procedure of the leave slip and that sort of thing that...here’s what I want to do and can’t do it, and document that whole process.

48. Dr. Dence stated he has not taken any annual leave or sick leave in the last 7 or 8 years. When, in interview, he was confronted as to why he, unlike most employees, has not used even one day of leave over so many years, his only response was, “I chose not to.”20 Yet, Dr. Dence further stated that towards

18 For 9 years, between 1991 and 1999, Dr. Sirmalis did not use any annual leave. 19 This investigation found no evidence that Dr. Sirmalis signed and approved Mr. Keil’s restoration-of-leave requests. 20 At the time of this interview, NAVINSGEN investigators were not yet aware of the allegation of Dr. Dence’s improper use of RCT. Dr. Dence did not take this opportunity to explain that RCT afforded him a mechanism to take time off from work.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 17 -

the end of any year, when faced with the prospect of losing annual leave, he requested to take it. He submitted his requests to Mr. Keil who disapproved them, thereby making his forfeited leave eligible for restoration. [Ref (h), pp. 43-47]

I notify who is the person who has the authority for people who go up to Jeurgen [Keil] to -. [unfinished sentence.] You submit your request prior to November and he talks with Juergen [Keil] about whether or not he is going to grant it.

[Q. So when you request leave, you request leave from Juergen Keil?] A: That is correct. [Q. The process for the restoration of annual leave is based upon pre-scheduled leave or not?] A: What do you mean by “pre-scheduled leave?” [Q. What leads up to getting the restoration of the leave?] A. Oh, if you feel that you are not going to take the annual leave, then you have to have a discussion with Juergen Keil as to why. You have to submit a form to that effect requesting that where you wanted to take annual leave, that it be turned down. He would have to turn it down; otherwise, you would have to take it, and he never turned it down for me. [Q. Now I thought you said that was the one that did that.] A. You submitted it to ; I think the regulation required him to sign them. But my discussions were with Juergen Keil. [Q. Did you ever apply for leave and have it approved?] A. No, I did not.

Restored Leave for Dr. Sirmalis and Dr. Dence

49. The ceiling imposed in October 1994 on SES accumulation of annual leave caused Dr. Sirmalis and Dr. Dence to forfeit the 48 hours of leave earned (and not used) for the remainder of the 1994 leave year. In early 1995, those 48 hours were restored to each of their leave accounts. There is no documentation in the command’s payroll files that shows any request or justification for the restored leave.21 Those 48 hours were eventually included in their BRAC-restored leave accounts, set to expire in January 2006. Neither person was eligible for automatic restoration of 1994 leave, incident to BRAC-91 or BRAC-95. Dr. Sirmalis did not re-locate due to BRAC and therefore was not entitled to any automatic restoration of leave incident to BRAC realignment or closure. Dr. Dence was ineligible for automatic

21 Even had restoration been properly justified (i.e., pre-approved, pre-scheduled leave that was subsequently cancelled due to the exigency of public business), those 48 hours would have to have been used by the end of the 1996 leave year.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 18 -

restoration of 1994 leave incident to BRAC, because he transferred two years prior to 1994.22 [Refs (i) and (v)] 50. For the years 1994 through 1999, Dr. Sirmalis and Dr. Dence used no annual leave. As in the case of 1994, there is no documentation in the command’s payroll files that shows requests or justifications for restoration of leave that either Dr. Sirmalis or Dr. Dence forfeited in 1995, 1996, and 1997. [Ref (v)] 51. Dr. Sirmalis stated that Dr. Dence’s “personal lifestyle” did not seem to lend itself to taking annual leave. However, there was no specific job-related reason that prevented him from using some annual leave every year. [Ref (g), pp. 47 and 48]

He could if he scheduled it properly, yeah. If he wanted to, yeah.

52. Mr. Keil, Dr. Dence’s supervisor, was surprised to discover that Dr. Dence had taken no leave over several years. [Ref (qq), pp. 14 and 15]

As far as Dave is concerned, I think, in general, if he took leave, it was typically, you know, a “day-or-two, here-or-there” type of thing, as opposed to, “I’m going away for two weeks.” I don’t recall him ever doing that....I guess I’d be surprised if anybody worked for 8 years without taking a day off.

53. In memoranda of 14 January 1999 (both of which were prepared by Dr. Dence), Dr. Sirmalis and Dr. Dence each requested restoration, for three years,23 of 208 hours of annual leave not used in 1998. The requests were submitted to the Payroll Office via the Personnel Office and ED, whose grade level is NT5, the equivalent of a GS-15. The requests were based on an exigency defined as a “task on the strategic planning for, and the development of, the NUWC proposal requesting participation in

22 Even had employees who re-located from New London in 1992 been impacted by BRAC-91, and thereby been eligible for automatic restoration of leave that was restored from years prior to 1992, they would have had to use that leave (assuming it was 416 hours or less) by the end of the 1994-leave year. This is, however, of no consequence for Dr. Dence (who re-located in November 1992), since prior to October 1994, annual leave in the case of SES personnel was never forfeited. 23 The phrase, “for three years,” is misleading. Since the ETD was scheduled to occur during the following leave-year, the 2 yrs in which to use the restored leave would commence at the end of 1999, thereby adding a year to the usage period for the leave forfeited in 1998.

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 19 -

the DOD research and development pilot program.” The task was “expected to be complete in September of 1999.” In each case, there is no evidence that the leave was pre-scheduled and pre-approved, as required. Attached to each request was a Form SF71 Application for Leave for the period 19 November to 28 December 1998, disapproved by , who is subordinate to Dr. Sirmalis, though arguably “senior” to Dr. Dence (see paragraph (15)).24 [Refs (rr) and (ss)] 54. For the period 1998 to September 1999, during which the business exigency presumably existed, Dr. Sirmalis and Dr. Dence used 238.5 hours and 268.8 hours of religious compensatory time (RCT), respectively. During the period for which their leave was disapproved, Dr. Sirmalis and Dr. Dence used 70.5 hours and 4.0 hours of RCT, respectively. [Refs (tt) and (uu)] 55. Dr. James C. S. , SES-4, , reported directly to Dr. Dence from 1994 through 1999. stated that: [Ref (vv)]

a. Although he was not personally involved in the DOD

research and development (R&D) pilot program, he was generally aware of NUWC’s participation in it.

b. He worked on the same floor as Dr. Dence and saw him

routinely. It did not appear to him that Dr. Dence was particularly, if at all, involved in the DOD R&D pilot program. He could not imagine how Dr. Dence’s minimal participation in that program could have precluded him from taking any annual leave. 56. stated that he was not aware of Dr. Dence being involved in the DOD R&D pilot program. He did not recall Dr. Dence “ever being in a meeting or being in a discussion” about the pilot program. [Ref (f)] 57. Dr. Sirmalis stated that he did not recall requesting restoration of annual leave based upon the exigency of the DOD R&D pilot program. He also did not recall whether he had any leave scheduled in 1998. [Ref (gg), pp. 10 and 11]

a. When asked if the pilot program had precluded him from

taking annual leave, he stated: [Ref (gg), p. 11]

24 was not Dr. Dence’s supervisor.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)


- 20 -

There are a lot of things –- yes, among other things. I would presume that that would be a significant factor in addition to many other things that would preclude me from taking annual leave. b. When asked how he could use 239 hours of RCT during

the 1998/1999-exigency period that precluded him from taking annual leave, he stated: [Ref (gg), pp. 13 and 14]

I try to do what I can do. Can I do both? Can I do more than one thing? Maybe if I can’t, I decide what it is that I should do.

58. Although Dr. Dence prepared Dr. Sirmalis’ request for restoration of leave, Dr. Sirmalis does not recall discussing with him the pilot program exigency in the context of loss and restoration of annual leave. He also stated that while he “tried to use all the senior people that weren’t involved in something else to develop the pilot program,” he could not say whether the pilot program specifically precluded Dr. Dence from taking annual leave. [Ref (gg), p. 12] 59. In memorandum of 16 January 2001 (prepared by Dr. Dence), Dr. Sirmalis requested restoration of 216 hours of annual leave not used in 2000. The request was submitted to the Payroll Office, via the Personnel Office and . The memorandum made no reference to a business exigency and requested that “unused annual leave for three years25...be restored.” There is no evidence that the leave was pre-scheduled and pre-approved, as required. Restoration was based on ’s disapproval of Dr. Sirmalis’ 15 November 2000 SF71 leave application requesting 216 hours of leave between 20 November 2000 and 12 January 2001. Leave in the amount of 212 hours was restored, to expire on 10 January 2004.26 Not only did a subordinate again disapprove the SF71, but also neither Dr. Sirmalis, nor anyone acting in his stead, signed the SF71. [Refs (i), (v), and (ww)] 60. During the above requested leave period, Dr. Sirmalis used 20 hours of RCT. [Ref (tt)]

25 The phrase, “three years,” is inexplicable, given the fact that, contrary to requirements of NUWCDIVNPTINST 12630.1C, the request does not “relate the specifics of the situation, including duration (beginning and ending dates) of the public exigency.” 26 NUWC Payroll records show restoration of 212 hours, while DFAS records show 216 hours. It should be “212,” as Dr. Sirmalis used 4 hours of annual leave on 8 May 2000, which was the first time he took annual leave in 9 years.

(b)(7)(C)

(b)(7)(C)


- 21 -

61. Dr. Sirmalis stated that he could not explain the circumstances surrounding the fact that he had not signed the SF71 that was enclosed with his restoration-of-leave request of January 2001. Although he acknowledged having signed the memorandum requesting restoration of leave, he did not know why the period of restoration requested was three years. In answer to the question of whether there was a business exigency upon which his restoration-of-leave request was based, Dr. Sirmalis stated: [Ref (gg), pp. 14 and 18]

Oh, I’m sure that there had to be – no specific business exigency ....Not any single pointed focus. I think the absolute beauty of all this is that the policymakers recognized a long time ago that when you had a very senior SESer that was equivalent to a CEO or a president of a corporation, that this would be the norm and not the exception. They would be working very hard on a number of things, often and plenty. And that’s why they said, “You can carry over and take all your annual leave without question.” ...Am I going to justify I can’t take leave next week because of the exigency of a specific meeting that I’m not scheduling, that my superiors are scheduling that I have to be to? Not necessarily. So you may not find a specific item that causes the exigency. You have to look for the myriad of them.

62. In memorandum of 16 January 2001, Dr. Dence also requested restoration of 216 hours of annual leave. The request was submitted to the Payroll Office, via the Personnel Office and . In identical fashion to Dr. Sirmalis' same-day request, it made no reference to a business exigency and requested that “unused annual leave for three years [see previous footnote]...be restored.” There is no evidence that the leave was pre-scheduled and pre-approved, as required. Restoration was based on ’s disapproval of Dr. Dence’s 15 November 2000 SF71 requesting 216 hours of leave between 20 November 2000 and 12 January 2001. Leave in the amount of 216 hours was restored, to expire on 10 January 2004. [Refs (v) and (xx)] 63. During the above period of the disapproved leave, Dr. Dence used 27.3 hours of RCT. [Ref (uu)] 64. , who has served in her present position for approximately 4 years, stated that among her other duties, she oversees the payroll office and monitors the records on restoration of leave. She reviews the memoranda requesting

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 22 -

restoration of leave and procedurally ensures proper automatic restoration of leave based on special business exigencies such as BRAC and Y2K.27 stated that: [Ref (yy)]

a. Employees are generally confused about the command

instruction regarding conditions and procedures for restoration of forfeited annual leave. Many employees simply obtain disapproval of annual leave that was not previously approved and scheduled, and use that disapproval as the basis for requesting restoration.

b. She was concerned that Dr. Dence and Dr. Sirmalis' January 2001 requests for restoration of leave did not identify a business exigency, and she referred the requests to Mr. , HR Division , who in turn approved them. She was not aware of any other requests for restoration of leave that did not identify a business exigency. 65. , ’s supervisor, recalled that the January 2001 requests were prepared by the same person and were poorly worded. The primary reason that the Payroll Division questioned these requests was that there seemed to be insufficient information on which to determine an expiration date for the restored leave. In addition, “wasn’t happy” that the enclosures to the requests did not reflect initial approval of the requested leave. Although he does not specifically remember doing so, he “probably warned ,” the Chief Financial Officer, that there was “a problem because of the senior level of the individuals,” just so she would be prepared in the event that she received a complaint. The Payroll Office, however, routinely defers to the Personnel Office for determination of whether restoration-of-leave requests are appropriate. opined that perhaps Dr. Sirmalis should have sent his request to . [Ref (zz)] 66. , who works in the Department for , recalled that asked him what should be done with the January 2001 requests. did not discuss this matter with Dr. Sirmalis, Dr. Dence, or Mr. . Rather than consulting anyone about ’s concern, simply referred the matter back to the Payroll Office. He stated: [Ref (aaa), pp. 24-26]

27 She did not participate in declaring the exigencies or approving the restorations of leave.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 23 -

Well, I kind of think we came to kind of a mutual agreement. I said, “If you want to question it, fine.” But in the past what we have done, and where people have served, asked for an extended period of time, it was because the exigency went into the following year. And so, you know, we made that assumption on these two....We make some assumption that there is an exigency.

67. conceded that based upon the seniority of Dr. Sirmalis and Dr. Dence, he did not necessarily expect them to have to comply with the command instruction requiring that restoration-of-leave requests should relate the “specifics of the situation.” However, stated that he “probably should have” been concerned that there was no indication anyone senior to Dr. Sirmalis had approved his request. [Ref (aaa)] 68. Strategic Planning , Missi s Department, stated that in January of either 1998 or 1999, “probably 1998,” Dr. Dence had a conversation with him about the leave restoration process: [Ref (bbb), pp. 56-59]

Dave has, you know, he’s referred to it in the past, of what he does for John Sirmalis, is that, come January of every year, he puts together the paperwork, and goes and gets the signatures necessary, do all the paperwork, so that they can carryover all their leave. And I know for a fact, he’s told me, that they do this, because, you know, this had, you know, a big lump sum withdrawal when they retire....He was kind of laughing about the fact that he, how he was making, he enjoyed making uncomfortable by going up and getting him to sign-off....And you know I heard about it again this year...it’s not something they can do totally in secret....The fact that Dave Dence has got a couple of hundred thousand dollars worth of leave built-up, you know, that doesn’t go unnoticed by working-class people that aren’t allowed to carry their leave over.

69. stated that he was unaware that Dr. Sirmalis, as well as Mr. Keil,28 submitted leave requests to , a subordinate, for approval or disapproval, and that they in turn used that documentation as the basis for restoring large amounts of annual leave from year to year. [Ref (e), pp. 38 and 40]

This is wrong. I mean, this is cheating. You know, I don’t know how to say it any other way....It’s disturbing.

28 See section of report entitled, “Restored Leave for Mr. Keil.”

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 24 -

Dr. Dence Declines Further Interview

is Counsel, Washington interviewed Dr. Dence about the allegedly improper organizational realignment (Allegation #3). After further investigation, we sought to interview him regarding rest of leave (follow-on questions) and use of RCT. We told that the Navy did not intend to prosecute Dr. Dence on those issues or go to the U.S. Attorney to obtain a declination of prosecution. We also advised her that her client had a general obligation to cooperate, but we did not intend to ask his supervisor to order him to answer ou ns. Given those circumstances, on 13 September 2001, invoked Dr. Dence’s Fifth Amendment right against self-incrimination and stated that her client would not answer our questions. Attachment (1) is the list of the interview questions that Dr. Dence would have been asked. [Refs (h) and (ccc)]

Applicable Regulations

71. See also attachments (2) and (3).29 72. Enclosure (1) to NUWCDIVNPTINST 12630.1C of 4 March 1997, “Absence and Leave,” states the procedural requirements for restoration of annual leave:

a. It may occasionally be necessary to restore annual leave to an employee who lost annual leave at the end of the year. Employees who have forfeited excess annual leave for any of the reasons listed below may request to have such leave recredited to a separate leave account for future use. The amount of the restored leave does not in any way increase or change an employee’s normal permissible carry-over of annual leave into a new year.

29 Page 7 of attachment (2) refers to “Headquarters” NUWC Instruction, NUSCINST 12630.1B of 15 Apr 77 (Subj: Absence and Leave), which was issued under joint signatures of the NUSC CO and TD. In 1977, NUWC did not exist. Although, at that time, NUSC Newport was the parent laboratory (“NUSC Headquarters,” in the vernacular), it was not a headquarters command with its own unit identification code. [See also next footnote.] Neither is NUWCDIVNPT a headquarters command. NUWCDIVNPTINST 12630.1C, which was issued solely by Commander of NUWCDIVNPT, replaced NUSCINST 12630.1B. As a separate matter, the discussion in attachment (2) regarding “extended” business exigency is not germane to the instant case, as there was no exigency identified as threatening national security, safety, or welfare and lasting more than 3 calendar years.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 25 -

(1) Administrative error. Any annual leave that was credited to an employee’s account as a result of an activity rectifying an administrative error which subsequently resulted in the forfeiture of excess leave shall be restored, provided the time limit is not exceeded. (2) Exigencies of the Public Business. There may occasionally be times when an employee’s approved and scheduled annual leave is canceled due to an “exigency of the public business.” This may cause an employee to lose annual leave at the end of the leave year. An employee may request that leave lost due to this circumstance be restored. The decision to cancel leave must have been made due to unanticipated or anticipated operational demands which were of such importance as to preclude the use of scheduled annual leave. Only the Deputy [currently Mr. ] is delegated the authority to declare a public exigency and to specify the beginning and ending date of the public exigency. (3) Sickness. Any employee who was unable to take advantage of scheduled annual leave because of sickness shall, if requested, have the forfeited excess annual leave restored for future use, if the following condition is met. The period of absence due to sickness must have occurred at such a late time in the leave year or be of such duration that the annual leave could not be rescheduled for use before the end of the year to avoid the forfeiture. b. Any employee who has forfeited excess annual leave for the reasons stated in paragraphs 8.a.(1) through (3) above shall have such leave restored to their account, if requested. The original decision to schedule the annual leave that was lost must have been made at least three pay periods prior to the end of the leave year before the forfeited annual leave can be considered for restoration. The request should relate the specifics of the situation including duration (beginning and ending dates) of the public exigency or the dates of illness, the hours of scheduled leave and excess leave forfeited, and the details of the administrative error. The request should be routed as follows: (1) Immediate supervisor. (2) Division or other second level supervisor (3) Personnel Management Advisor then (a) For cases involving administrative error only (8.a.(1) above) – to Code 57 for final approval then to Payroll (Code 57422).

(b)(7)(C)

(b)(7)(C)


- 26 -

(b) For cases involving exigencies of business (8.a.(2) above) and sickness (8.a.(3) above) – to the department head of the requester for approval then to Payroll (Code 57422). If the requester is in the immediate organizational unit of the approver, or if the leave of the department head is affected, the request must be submitted to the Deputy (Code 01EDD) for approval then to Payroll (Code 57422). The immediate supervisor of the requester should attest to the validity of the claim and provide necessary information. c. Restored annual leave must be scheduled and used no later than the end of the leave year ending two years after: (1) The date of restoration of the annual leave forfeited because of administrative error; or, (2) The date fixed by the agency head, or his designated official, as the termination date of the exigency of the public business which resulted in forfeiture of the annual leave; or (3) The date the employee is determined to be recovered and able to return to duty if the leave was forfeited because of sickness. d. Management and employees have a mutual obligation to plan and schedule the restored leave for use as expeditiously as circumstances permit but not longer than the specified two-year limit. Since restored leave must be credited to a separate account, the use of restored leave must take into account the fact that regular annual leave also must be scheduled during the year to avoid forfeiture. Any restored leave unused at the expiration of the two-year limit is again forfeited with no further right to restoration.

73. NUSCINST 12630.1B of 15 April 1977, “Leave and Absence,” was the precursor to NUWCDIVNPTINST 12630.1C. Both instructions stated that the request for restoration should be routed to the immediate supervisor who should “attest to the validity of the claim,” and also to the Division Head or “comparable level” or “other second level supervisor.” The instructions differed, as follows:

1977: Additionally, the request must be routed to the “Associate Technical [now Deputy ED, ] or Staff Head30; regulations require that except where the decision that an

30 NUWCDIVNPT Commander (formerly “NUSC Commander,” formerly “NUSC Commanding Officer”) has a COS whose position was XO (formerly “EA”) in the old NUSC organization. In addition to the XO and TD, several “staff officers,” as

(b)(7)(C)

(b)(7)(C) (b)(7)(C)


- 27 -

exigency exists was made by the head of the agency, the determination may not be made by any official whose leave would be affected by the decision.” 1997: “Only the Deputy [now Deputy ED, ] is delegated the authority to declare a public exigency [perhaps as distinct from approving a restoration request] and to specify the beginning and ending date of the public exigency.” If the requestor is “in the immediate organizational unit of the approver,” or if the leave of the department head is affected, the request must by submitted to the Deputy [now ] for approval.

74. NUSC HR memorandum 12630 Ser 608/3 of 7 January 1986, which was neither a command instruction nor interim revision to NUSCINST 12630.1B, stated:

1. Annual leave which was scheduled in advance but forfeited because of the “exigencies of public business” may be restored to the employee. There are two requirements for restoration.

a. The annual leave must have been scheduled in advance, in writing, before the third bi-weekly pay period prior to the end of the leave year, i.e., before 24 November 1985.

b. A determination is made by an appropriately designated agency official (i.e., an official who is not more than one level below the Commanding Officer) that the exigency is of such importance as to preclude the use of scheduled annual leave.31 2. At NUSC, approval to authorize restoration of annual leave32 is delegated to Code 02 [military Officer (O-5) Officer-in-Charge

well as OICs of Newport Laboratory/New London Laboratory/AUTEC Detachments/Tudor Hall Laboratory, reported directly to the CO. Prior to the establishment of NUWC Headquarters, the NUSC CO, XO, TD, Deputy TD, and Associate TD for Programs/Plans/Analysis were collectively referred to as “NUSC Headquarters Staff,” although they were assigned to the NUSC Newport Laboratory (echelon-3). The other laboratories and detachments were echelon-4 commands. 31 This guidance was based upon FPM Letter 630-22 of 11 Jan 74, which became obsolete upon the sunset of the FPM and all provisions on 31 Dec 94. 32 As a practical matter, the command may never have made a distinction between who was authorized to determine that an exigency was of such an importance as to preclude the use scheduled annual leave, and who was authorized to approve an individual’s specific req estoration of leave on the basis of the exigency. Nonetheless, ’s 1986 guidance to delegate the authority to Code 003 (one level b ommanding Officer) was consistent with the FPM guidance still in effect.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 28 -

(OIC)] for New London employees and Code 003 [O-5 “EA” (later titled “XO”), reporting directly to CO] for Newport employees....

75. OCPMINST 12630.1 CH-1 of 29 July 1990, stated:

Local activity heads/commanders are delegated the authority to determine the level at which exigencies of the public business may be declared for purposes of restoring annual leave.

76. NUWC DIVNPT memorandum of 11 August 1994, “Guidance on Restoration of Annual Leave,” which was neither a command instruction nor interim revision to NUSCINST 12630.1B, stated:

...The approving authority for requests for the restoration of forfeited annual leave is the senior line manager of the organization where the requests originate, i.e., , (where there is no ), or Staff Head. Code 01A [Deputy ED, ] approval is required in those situations where leave was forfeited due to an “exigency of public business,” and the leave of the approving official is affected by the decision. Code 01A is also the approving authority for Code 01 and assigned staff. [i.e., the Deputy ED, now , is the approving authority for his boss, the ED, now Mr. Keil] ...Annual leave should only be restored when a work requirement of major significance prevented an employee from taking scheduled annual leave. Supervisors should be aware of their responsibility to ensure that employees, including those on long term temporary duty, schedule, and where necessary re-schedule, their leave to avoid forfeiture. Supervisors should also recognize that restored annual leave represents an unbilled liability under “managing to Payroll, which must be paid off when an employee resigns or retires.

77. The current governing instruction, DOD Financial Management Regulations (FMR), Volume 8, Chapter 5, of August 1999, states:

The determination that an exigency is of major importance and, therefore, annual leave may not be used, must be made by the head of an activity no lower than a major field headquarters or major field installation.

78. The NUWC Commander and the NUWC TD were each on distribution of NAVSEAINST 12000.2 of 31 October 2000, “Timekeeping Policy and Procedures for Headquarters and Program Executive Offices’ Civilian Employees,” which states:

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 29 -

...[I]n rare cases where leave was scheduled and approved, and then subsequently denied because of an “exigency of the public business,” (work related projects of emergency proportions) or if the sickness of an employee interferes with the use of previously scheduled and approved annual leave, the employee may request restoration of the forfeited leave.

Analysis

79. was not the immediate supervisor for either Dr. Sirmalis or Dr. Dence, and he did not have authority to approve or disapprove their requests for leave. Dr. Sirmalis and Dr. Dence clearly did not have pre-scheduled, pre-approved leave that was subsequently cancelled due to exigency of public business. They also were not entitled to automatic restoration of leave under BRAC. 80. Dr. Sirmalis and Dr. Dence did not comply with the requirements of NUSCINST 12630.1B and NUWCDIVNPTINST 12630.1C that they route their restoration of leave requests to not only their immediate supervisors who in turn “should attest to the validity of the claim[s] and provide any information deemed necessary,” but also to their Division and s “or other second level supervisor[s].” To the extent that Dr. Sirmalis, as NUWC TD, was subject to NUWC DIVNPT administrative instructions, he should have routed his requests to and the Commander of NAVSEA.33 Dr. Dence should have routed his requests to Mr. Keil and the NUWC DIVNPT Commander, who was also his “senior line manager.” Conspicuously deficient, and also not in compliance with NUWCDIVNPTINST 12630.1C, were their requests of January 2001, which did not “relate the specifics of the situation including duration (beginning and ending dates) of exigency.” 81. Noteworthy is Dr. Sirmalis’ unjustified request of January 2001, in light of NAVSEAINST 12000.2 that states employees may request restoration of forfeited leave in “rare” cases where leave was scheduled and approved, and then subsequently denied because of an exigency of the public business (work related projects of “emergency” proportions). As well, Dr. Sirmalis’ request flew in the face of ’s 1994 guidance, which stated annual leave should only be restored when a work requirement of “major” significance prevented an employee from

33 In any case, Dr. Sirmalis should not need a field command instruction, or any other instruction, for that matter, to require him to submit a request for restoration of his annual leave to his supervisor.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 30 -

taking scheduled annual leave. Dr. Sirmalis’ opinion that his collective work requirements generally, if not routinely, from year to year, precluded him from taking annual leave, thereby justifying restoration of forfeited leave, is not acceptable. Although he attempted to support his opinion by citing the historical provision for SES to accumulate unlimited annual leave, his reason was no longer valid after October 1994. 82. It is important to consider why Dr. Dence submitted special requests, on behalf of himself and Dr. Sirmalis, to have leave restored for 1998 and 2000, but not for 1999. Although they were never entitled to automatic restoration of BRAC leave, they proceeded as though they were. Although they did not have a BRAC re-location date, they allowed themselves automatic restoration of additional leave every year until the ETD (twice deferred).34 In January 1999, the BRAC ETD was still 30 September 1998. Since there was no more opportunity to accrue additional BRAC-restored leave, there was a need to establish another exigency to restore leave earned during the last quarter of the 1998 leave year.35 In January 2000, Dr. Dence did not know that in November 2000 the ETD would again be changed, to 15 December 1999, but he was aware that leave forfeited in 1999 could be attributed to the Y2K effort and thereby automatically restored; therefore, there was no need at that time to make a specific request for restoration of leave. Since leave forfeited in 2000 could be attributed neither to BRAC nor to Y2K, there was no vehicle for automatic restoration; restoration of that leave required a specific request, based on the identification of another exigency. 83. Dr. Sirmalis, Dr. Dence, and Mr. Keil manipulated the system to their advantage. They relied on , who set policies that improperly increased their leave balances and extended the expiration of unused leave. These enabling actions by included:

a. Creating the “BRAC Staff” official status for purposes of establishing eligibility for automatic restoration of leave;

34 In January 1998, there ostensibly was no need to identify another exigency to justify restoring leave accrued between the 30 September 1997 ETD and the end of the 1997 leave year, because in December 1997 the ETD was changed to 30 September 1998. 35 Hypothetically, even had they been legitimately impacted by BRAC by having to re-locate from New London during 1998, they still could not have had annual leave accrued in 1998 automatically restored.

(b)(7)(C)

(b)(7)(C)


- 31 -

b. Determining that the period during which BRAC-restored leave had to be used began in the year following the activity’s BRAC ETD, not the employee’s transfer date;

c. Twice deferring the BRAC ETD by a year; d. Retroactively treating all annual leave that was

forfeited and restored between the date of the employee’s transfer and the ETD as BRAC-restored leave; and

e. Allowing leave forfeited in 1999 as a result of Y2K to

be absorbed into illegitimate BRAC-restored leave. 84. made these determinations without consulting higher authority or seeking legal advice. Consequently, they not only proved to be inconsistent with Public Law and OPM guidance, but they also were unnecessarily taxing administratively on the command’s Payroll Office. In addition, ’s guidance in his August 1994 memorandum improperly made Code 01A (the Deputy ED) the approving authority for Code 01 (the ED). As well, ’s support of the practice of the NUWC DIVNPT Deputy ED approving restoration of leave for the NUWC TD was inappropriate. The practice of subordinates approving requests of their seniors violates not only common sense, but also more fundamentally the universally accepted chain-of-command principles of the Federal Government. 85. Finally, the provision in NUWCDIVNPTINST 12630.1C that “only the Deputy [Executive] is delegated the authority to declare a public exigency and to specify the beginning and ending date of the public exigency” was not valid after August 1999. OCPMINST 12630.1 CH-1 of 29 July 1990 stated that “local activity heads/commanders are delegated the authority to determine the level at which exigencies of the public business may be declared for purposes of restoring forfeited annual leave.” However, in August 1999, DOD Financial Management Regulations (FMR), Volume 8, Chapter 5, stated that “the determination that an exigency is of major importance and, therefore, annual leave may not be used, must be made by the head of an activity no lower than a major field headquarters or major field installation.” Commencing in August 1999, therefore, only the NUWC Commander (Flag Officer) could declare an exigency for NUWC Headquarters, and only the NUWC DIVNPT Commander (O-6) could so declare for NUWC DIVNPT. In neither case could such authority be legitimately delegated to the NUWC

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 32 -

DIVNPT Deputy ED, and in November 2000 it was inappropriate for to be exercising that authority.36

Conclusions

86. The allegation that Dr. Sirmalis and Dr. Dence improperly caused restoration of forfeited annual leave, in violation of 5 USC § 6304, 5 CFR 630, DOD Financial Management Regulations, NUSCINST 12630.1B, and NUWCDIVNPTINST 12630.1C, is substantiated. 87. The following corrective actions are warranted: a. The restorations of annual leave, forfeited by Dr. Sirmalis and Dr. Dence, each in the aggregate amount of 672 hours, in 1994, 1995, 1996, and 1997 were improper and should be rescinded, because they did not request the restorations and were not eligible for automatic restorations. Additionally, even had they been entitled to restorations for those years, the periods for using that leave would have expired in January of 1997, 1998, 1999, and 2000, respectively.

b. The restoration of 208 hours of annual leave, forfeited by Dr. Sirmalis in 1998, was improper and should be rescinded, because he did not obtain the approval of his supervisor; he did not have pre-approved, pre-scheduled leave; and the relevance of the asserted exigency is highly questionable.37

c. Based upon the testimony of , , and even Dr. Sirmalis, we conclude that the pilot program exigency referenced in Dr. Dence’s request to restore the leave that he forfeited in 1998 did not preclude him from taking annual leave. For that reason alone, the restoration of the 208 hours of annual leave was improper and should be rescinded. However, not only is there no evidence Dr. Dence had pre-scheduled, pre-approved leave, but also his immediate supervisor did not approve the restoration request. d. Dr. Sirmalis and Dr. Dence were each possibly entitled to automatic restoration of the 208 hours of annual leave that

36 Neither nor his predecessor declared a business exigency precl rdinates from using annual leave in 2000. RADM recalled that Dr. Sirmalis went on vacation in the fall of 2000; he ed that Dr. Sirmalis charged the time to annual leave. 37 It should be noted that he used 70.5 hours of RCT during the period of time for which annual leave was disapproved.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 33 -

they forfeited in 1999 incident to Y2K. This is true only under the assumption that they were legitimately preoccupied with Y2K, to the extent that they were precluded from taking leave. Although suspect, this condition is unchallenged. Nonetheless, the period for use of that restored leave should expire in January 2003, vice 2006 as currently scheduled. e. The restorations of 212/216 hours of annual leave that Dr. Sirmalis/Dr. Dence, respectively, forfeited in 2000 were improper and should be rescinded. There was no evidence that the leave was pre-approved/pre-scheduled or that there was a business exigency precluding the use of leave. Further, neither person’s immediate supervisor approved the restoration.38

*****

Restored Leave for Mr. Keil 88. When Mr. Keil was transferred from New London to Newport in September 1996, he was not designated a “BRAC Staff” official. As shown below, he requested restoration of leave for 1997, 1998, 1999, and 2000, but not due to BRAC. Each restoration had its own expiration date for use of the restored leave. Prior to 2000, the leave forfeited in 1997, 1998, and 1999 was properly not considered BRAC–restored leave, as it was forfeited after the date of Mr. Keil’s transfer. [Refs (x), (cc), (dd), (ee), (ff), (ii), and (jj)] 89. Based on the fact that Mr. Keil requested restoration of leave forfeited in 1999, he apparently was unaware that as a “Y2K official,” his leave for 1999 would have been automatically restored.39 In an e-mail of 13 November 2000, the command’s HRO office announced 's determination that the BRAC ETD was extended to 15 December 1999. Also on 13 November 2000, Mr. Keil inquired by e-mail to about his own BRAC leave status. then added Mr. Keil to the BRAC Staff list, at which point Mr. Keil’s previously requested/approved restored leave for 1997, 1998, and 1999 was converted to BRAC-restored leave,40 and the incremental expiration dates were removed, so as

38 If the leave had been properly justified and approved, command correctly scheduled its expiration for January 2004. 39 Dr. Dence was not handling these administrative matters for Mr. Keil, as he ha ng for Dr. Sirmalis. 40 ’s unwise and inappropriate decision, in early 2001, to re y treat all annual leave that was forfeited and restored between the date of the employee’s transfer from the BRAC activity and the ETD as

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 34 -

to establish a uniform date for the use of all his annual leave automatically restored due to BRAC. Retroactively included in that balance was the leave forfeited in 1995 and 1996.41 Although seemingly of no practical consequence to Mr. Keil, the 200 hours of Y2K leave earned in 1999 were rolled into his BRAC-restored leave account.42 Based upon the December 1999 ETD, Mr. Keil’s total BRAC-restored leave is 992 hours, scheduled to expire in 2005. [Refs (v), (w), (x), and (z)] 90. On 15 September 1996, the date of Mr. Keil’s change in duty station from New London to Newport, he had an annual leave balance of 1,779 hours, which included 144 hours of leave earned but not used in 1996. In addition, he had 208 hours of restored leave for 1995. Only the restored leave for 1995 was eligible for automatic restoration incident to BRAC, and it expired at the end of the 1998 leave year. There is, however, no documentation in the command’s payroll files that shows any request or justification for the initial restoration of the 1995 leave in early 1996.43 Similarly, there is no documentation of any request or justification for the 1997 restoration of 208 hours of leave that Mr. Keil forfeited in the 1996 leave year.44 [Refs (i) and (v)] 91. Although Mr. Keil presumably was unable to take any annual leave in 1996, he used 148.5 hours of RCT (between 15 September 1996 and the end of the leave year, he earned 64 hours of annual leave and used 68.5 hours of RCT). [Refs (i) and (ddd)]

BRAC-restored leave, would have impacted Mr. Keil. However, Mr. Keil’s “BRAC staff” status took precedence and was improperly used to cover him from Spring of 1995 through mid-December 1999. 41 If the 1996 restoration of leave forfeited in 1995 was properly justified and requested, then under BRAC it could properly also have been automatically restored for 2 yrs beyond Mr. Keil’s transfer date, and would have expired at the end of leave year 1998. As already noted, the leave that Mr. Keil forfeited in 1996 was not eligible for automatic restoration. 42 If Mr. Keil’s “BRAC Staff” status was illegitimate for “automatic restoration of leave” purposes, then the expiration of the leave that was forfeited as a result of Y2K was inappropriately changed (i.e., giving him an additional 2 years to use it). Likewise, Dr. Sirmalis and Dr. Dence each forfeited 208 hours of leave in 1999; that leave was automatically restored under Y2K and absorbed into their respective BRAC-restored leave accounts, which extended the expiration date of this Y2K leave by 3 additional years. 43 Although he apparently was precluded from taking any annual leave in 1995, he used 64.4 hours of religious compensatory time. 44 The fact that Mr. Keil did not specifically request restoration of leave that he forfeited in 1996 may reflect an erroneous assumption that it was legitimate to automatically restore that leave due to his BRAC relocation.


- 35 -

92. In 1997, Mr. Keil forfeited 168 hours of annual leave (56 hours in September, 72 hours in November, and 40 hours in December). Those hours were restored in 1998 for three years, based upon Mr. Keil’s memorandum request of 5 January 1998, stating that he was unable to take his scheduled leave due to the exigency of public business that would end “after 31 March 1998.” The memorandum, which was initialed by the Commanding Officer on 31 December 1997, referred to enclosed Form SF 71 Applications for Leave as evidence of “scheduled leave.” However, none of the applications show the date of request or even the employee’s signature. Furthermore, there is no indication of approval or disapproval, or even a signature or date of any official action on the applications. One of the five SF71s did not even have the name of the employee for which the leave was requested; in fact, it was virtually blank, with the exception of a request for 24 hours of annual leave from 3-5 September (no year indicated). [Refs (v) and (cc)] 93. Between 3 September 1997 and 31 March 1998, during which period Mr. Keil presumably was precluded from taking any annual leave, he used 32 hours of annual leave and 32 hours of RCT. [Refs (i) and (ddd)] 94. In an e-mail of 12 November 1998 to , Mr. Keil asked, “ what’s the story on carry-ov ers; am I in a use-or-lose or can I carry over?” In a 13 November 1998 e-mail response, stated: [Ref (eee)]

...[P]rior to the 1997 leave year you would have automatically accrued any restored leave because of BRAC. You currently have a restored leave balance of 584 hours. By my calculations you must use the first 416 hrs of this leave by the end of the 1999 leave year. The rest of the restored leave (168 hrs) must be used by the end of the 2000 leave year. You currently have 208 hrs of use-or-lose on the books. This will not be automatically restored (as in BRAC), but can be restored by following procedures outlined in the “Guidance of Restoration of Annual Leave” that was just sent out....

95. On Tuesday, 17 November 1998, Mr. Keil submitted six SF71s, requesting 232 hours of continuous annual leave for the period of 16 November 1998 to 31 December 1998. Although his subordinate, , approved these requests,45 Mr. Keil did not take the leave. In January 1999, Mr. Keil requested restoration of 208 hours of annual leave, based on the statement

45 With the exception of the SF71 for the period 16-25 November, on which he failed to indicate either approval or disapproval.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 36 -

that “due to travel commitments and Division responsibilities, [he] was unable to use all [his] annual leave.” He sent his memorandum request to the Payroll Office via and the Personnel Office, but did not address it to, immediate supervisor, or any other senior in the chain of command. [Ref (dd)] 96. Mr. Keil did not take any annual leave in 1998, but did use 123.8 hours of RCT, 38.9 hours of which were used between 16 November and the end of the year. [Refs (i) and (ddd)] 97. On 27 August 1999, seven SF71s were submitted, requesting 248 hours of annual leave for Mr. Keil for the period of 7 September 1999 to 5 November 1999. Neither Mr. Keil nor anyone in his stead signed those requests. Nonetheless, Mr. approved them. (In 2 cases, for the periods 4-8 and 25-29 October, the SF71s did not even show the nature of the requests, i.e., whether they were for annual leave, sick leave, leave without pay, compensatory time, or “other.”) Pursuant to Mr. Keil’s restoration of leave request of 25 January 2000, which was based on an unspecified “exigency of public business” that would “end after June 2000,” 200 hours of annual leave that Mr. Keil forfeited in 1999 were restored.46 Mr. Keil used only 8.0 hours of annual leave in 1999 (26 June) and no annual leave in 2000. Between 7 September and 5 November 1999, he did not use any RCT. However, between 7 September 1999 and June 2000 (the “end” of the exigency of public business), during which time he was supposedly precluded from using annual leave, he used 36.7 hours of RCT. [Refs (i), (ee), and (ddd)] 98. stated that he was not aware of any action to restore annual leave that SES employees forfeited. On reviewing Mr. Keil’s request of 25 January 2000, during interview, CAPT Elliott stated that the pen-and-ink initials next to the “Via OO” addressee appear to be his own, but he had no specific recollection of the memorandum. He said that he “couldn’t confirm or deny any specific events associated with that memo.” He has no idea as to what was meant by “exigency of public business.” He was unaware of any special project at that time that would have precluded Mr. Keil from taking leave and believes there was no apparent change in Mr. Keil’s workload after June 2000. usually reads everything he signs (“that’s kind of my M.O.”), and was surprised that he had not questioned Mr. Keil’s memorandum, as it was obviously not a

46 The 200 hours were later identified as leave forfeited due to Y2K.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 37 -

routine piece of correspondence. He noted that “what’s strange is that they [the seven SF71s enclosed with the memorandum] are all signed on the same date” and represent nearly “continuous leave” from early September to early November. He does not recall Mr. Keil ever talking to him about taking as much as a month’s leave. The “only major extractor” that he recalls is Mr. Keil taking a couple of hours of leave in the afternoons to tend to his father’s medical situation in the Boston area, and taking leave for “several days or a week” in Alaska to run the marathon with . [Ref (fff)] 99. On 27 October 2000, six SF71s were submitted, requesting 216 hours of annual leave for Mr. Keil for the period of 20 November to 29 December 2000. The SF71s were typed and signature-stamped with Mr. Keil’s signature. On 31 October 2000, approved the leave. Mr. Keil did not take the leave, but during the period of 20 November to 29 December 2000, he used 28 hours of RCT. Pursuant to Mr. Keil’s restoration of leave request of 30 January 2001 (also signature-stamped), based on an unspecified “exigency of public business [that would] end after June 2001,” 216 hours of annual leave forfeited in 2000 were restored.47 [Ref (ff)] 100. Between 20 November 2000 and June 2001 (the “end” of the exigency of public business), during which time he was supposedly precluded from taking any annual leave, Mr. Keil used 112.8 hours of RCT. [Refs (i) and (ddd)] 101. , who has been Mr. Keil’s immediate supervisor since September 2000, stated that: [Ref (ggg)] a. He did not know that Mr. Keil had requested essentially 6 weeks of continuous annual leave for the period of mid- November 2000 to the end of that calendar year. He has no idea why Mr. Keil would ask to approve his leave and opined that such a procedure made no sense. Nonetheless, Mr. Keil “would have been hard-pressed to take 6 weeks of continuous leave.” Mr. Keil “could certainly take a week [of annual leave] here and a week there, throughout the whole year; he could have planned ahead.”

b. He recalls that Mr. Keil brought him “a request or a form last year sometime, or it could have been January [of 2001],” regarding restoration of annual leave. Mr. Keil

47 Command records show 216 hours to expire on 10 January 2004. (DFAS records show 208 hours.)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 38 -

explained that “this allows me to carry-over leave that I couldn’t take [because] I’ve been busy.” The Captain didn’t give the request much thought, as he trusted Mr. Keil. However, the Captain was not aware of any specific business exigency that precluded Mr. Keil from taking annual leave for short periods of time, to include the period between January 2001 and June 2001.


102. See previous section of the report.

Analysis 103. Mr. Keil did not in every case comply with the requirements of NUSCINST 12630.1B and NUWCDIVNPTINST 12630.1C that he route his restoration-of-leave requests to his immediate supervisor, the NUWC DIVNPT Commander. In no instance did he comply with the additional requirement that he route those requests to his second level supervisor, Dr. Sirmalis. 104. At best, Mr. Keil was only entitled to automatic restoration of unused leave in two cases:

a. Incident to BRAC: 208 hours of leave restored in 1996 that was forfeited in 1995. This is true only under the assumption that he legitimately had the leave restored in the first place, and it appears that he did not. Nonetheless, the period for use of that restored leave would have expired in January 1999.

b. Incident to Y2K: 200 hours of leave restored in 2000

that was forfeited in 1999. This is true only under the assumption that he was legitimately preoccupied with Y2K, to the extent that he was precluded from taking leave. Although suspect, this condition is unchallenged.48 Nonetheless, the

48 The fact that Mr. Keil, 8 months into the Y2K conversion year, appears to have sought and obtained approval of 248 hours of nearly continuous annual leave, suggests that he was unaware then of anything that would preclude him from taking annual leave. (He obviously was not precluded altogether from using leave earlier in the year, as he used 8 hours on 26 June 1999.) Moreover, given his position as ED and senior civilian in his command, it’s unlikely that the Y2K effort pre-occupied him to such an extent that it compelled him to forfeit 200 hours of leave, as it may very well have done in case of some lower-level employee engineers who participated in 24-hour, around-the-clock testing. signed Mr. Keil’s SF71s on 27 August, 2 days after OPM issued r permitting automatic restoration of “use or lose” annual leave for employees who were deemed necessary to the

(b)(7)(C)


- 39 -

period for use of that restored leave should expire in January 2003, vice 2005 as currently scheduled. 105. Mr. Keil was not entitled to the 208 hours of leave restored in 1997 that were forfeited in 1996, as he made no specific request for such restoration and his eligibility for automatic restoration under BRAC only applied to leave forfeited prior to the date of his relocation (i.e., 1995). Nonetheless, the period for the use of that restored leave would have expired in January 2000. 106. Mr. Keil might have been entitled to the 168 hours of leave restored in 1998 that were forfeited in 1997. However, the specific exigency of public business was not identified and the supporting documentation in his request for restoring the leave was totally insufficient. Nonetheless, the period for use of that restored leave would have expired in January 2001. 107. Mr. Keil might have been entitled to the 208 hours of leave restored in 1999 that were forfeited in 1998. However, the request for continuous annual leave from mid-November to December 1998 is suspect on its face, considering his position in the organization. What makes it more suspicious is that the leave, especially of that magnitude, was approved by a subordinate. (In fact, signed the application for leave on the day following the start of the leave.) Although ’s guidance in 1994 eventually may have suggested to Mr. Keil that it was legitimate to submit his restoration-of-leave requests to for approval, nothing gave Mr. the author ove or disapprove Mr. Keil’s leave requests. Still significant is the fact that Mr. Keil did not address the request memorandum to or via anyone senior to him in the chain of command. These circumstances suggest the request was pro forma, just to document what was only ostensibly pre-scheduled, pre-approved leave. Moreover, as cited above, although Mr. Keil did not take any leave in 1998, he used 123.8 hours of RCT, 38.9 of which were used between 16 November and the end of the year. Nonetheless, the period for use of the restored leave should have expired in January 2002, vice 2005 as was scheduled. 108. For similar reasons, restoration, in 2001, of the 208 hours of leave Mr. Keil forfeited in 2000 may not have been justified. However, if the restoration was justified, the

version eff it was not until 20 December that Mr. requested s to provide a list of employees in their ations who he automatic restoration.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)


- 40 -

command correctly set January 2004 as the date of expiration of the period for using the restored leave.

Conclusions

109. The allegation that Mr. Keil improperly caused restoration of forfeited annual leave, in violation of 5 USC § 6304, 5 CFR 630, DOD Financial Management Regulations, NUSCINST 12630.1B, and NUWCDIVNPTINST 12630.1C, is substantiated. 110. The following corrective actions are warranted: a. The 584 hours of restored leave that Mr. Keil forfeited in 1995, 1996, and 1997 should have expired. Moreover, none of it was properly justified, and his restored leave balance should be reduced accordingly. b. Additionally, the 208 hours of restored leave that Mr. Keil forfeited in 1998 was improperly set to expire in January 2005. Since it should have expired in January 2002, his restored leave balance should be reduced accordingly. c. The 200 hours of restored leave that Mr. Keil forfeited in 1999 was improperly set to expire in January 2005 and should be re-scheduled to expire in January 2003.

***** Allegation #2: That between approximately 1990 and 2001, Dr. Sirmalis, Dr. Dence, and Mr. Keil improperly earned and used religious compensatory time (RCT), in violation of 5 USC § 5550a; 5 CFR Part 550, Subpart J; and SECNAVINST 7000.11C.

Background 111. Before 1978, Federal civilian employees who felt compelled to be absent from work to satisfy their religious obligations were required to take annual leave or leave-without-pay. There were no provisions for employees to earn and use compensatory time for any reason. Sympathetic supervisors, who might have allowed employees to work an extra hour or two on one day to "make up" for time spent attending religious observances on another were unwilling to permit this, because the law required that employees be paid overtime if they worked more than eight hours on one day, or more than 40 hours in one week.


- 41 -

112. In the mid-1970s, Congress examined various proposals for legislation that would permit Federal employees to adopt the kind of flexible work schedules that were proving highly successful in the private sector. In 1978, Congress passed Public Law (PL) 95-390, the "Federal Employees Flexible and Compressed Work Schedule, and the President signed it on 29 September 1978. The law provided a number of mechanisms to alter the traditional "9 to 5" Monday through Friday work schedule of most Federal employees. 113. Title IV of the Act, now codified at 5 USC 5550a under the heading "Compensatory time off for religious observances," was intended to address the needs of employees whose religious obligations fall during the hours they are regularly scheduled to work. As modified to date, 5 USC 5550a states:

...the Office of Personnel Management shall prescribe regulations providing for work schedules under which an employee, whose personal religious beliefs require the abstention from work during certain periods of time, may elect to engage in overtime work for time lost for meeting those religious requirements. Any employee who so elects such overtime work shall be granted equal compensatory time off from his scheduled tour of duty (in lieu of overtime pay) for such religious reasons, notwithstanding any other provision of law ....Regulations under this section may provide for such exceptions as may be necessary to efficiently carry out the mission of the agency or agencies involved.

114. Congressman Solarz of New York introduced Title IV on behalf of some Federal employee constituents whose religious beliefs required them to leave work early or be absent entirely on certain days. Some of these employees found themselves using all their annual leave, and occasionally taking leave without pay, to satisfy their religious obligations. The legislative relief Congressman Solarz proposed was narrow in scope; early versions required that the employee be a member of an "established" or "traditional" religious sect or faith in order to take advantage of the law. One version stated that it applied only to "an employee who is a member of and an adherent of established and traditional tenets or teachings of a bona fide religion." 115. The Department of Justice and the Civil Service Commission (now OPM) feared that the requirement of membership in "traditional" religions could conflict with the First Amendment's Establishment Clause. They also expressed concern that procedures that might be implemented to establish the


- 42 -

"bona-fides" of the employee's beliefs and obligations could cause Federal managers to engage in unconstitutional "entanglement" with religion. 116. Congressman Solarz amended the language in his bill along the lines suggested by Justice and OPM to produce the words that now appear in the statute. Nonetheless, Congressman Solarz and the other Members of Congress who spoke in support of Title IV made plain their intention that the changes in employee work schedules necessary to accommodate religious needs would be limited and infrequent. Congressman Solarz noted that most Christian religious days fall on weekends or were already Federal Holidays. He said he knew of no Muslim religious days that required abstinence from work. He asserted there were no more than 11 Jewish holidays throughout the year, some of which fell on weekends. 117. Because important religious holy days were to occur in October 1978, OPM immediately implemented 5 USC 5550a by publishing interim regulations that are now codified at 5 CFR § 550 (Subpart J, “Adjustment of Work Schedules for Religious Observances”). 118. Immediately after passage of the Act and publication of Civil Service Commission (now OPM) interim implementing regulations, federal agencies started asking how they should interpret and apply the new law. For example, by letter of 17 November 1978, the acting head of the Chief of Naval Operations' Personnel Management Branch asked OPM six questions, including the following:

What is the term "personal religious belief" intended to cover? For example, is it interpreted broadly enough to include an absence clearly not required by a tenet of the religion or faith, but rather based on the individual employee's desire or practice? Is it intended to cover absences resulting from a position which the employee holds in the faith, such as a rabbi or preacher conducting or officiating at a religious service or ceremony?

119. Due to the press of other business, and the difficult issues posed by questions similar to those asked by the Navy, OPM did not answer the Navy's question until 31 July 1979, when it said:

The term "personal religious belief" is to be interpreted broadly. An employee's personal religious belief does not have to be based on an established religion nor does it necessarily have to be a


- 43 -

recognized requirement of an established religion. It only has to be a personal belief of the employee which is religious in nature and the personal religious belief requires the employee to abstain from work during a period for which he/she is scheduled to work. It is not for an agency to question whether the employee's personal religious belief is in any sense a legitimate or accepted religious belief. Instead, the agency is expected to accommodate to the employee's request for compensatory time off or overtime work for this purpose, unless such modifications in the employee's work schedules would seriously interfere with the efficient accomplishment of the agency's mission.

120. In response to another question posed by the Navy, OPM suggested that agencies should attempt to accommodate the religious needs of individual employees when it initially establishes their work schedules. Upon receipt of the OPM letter, the Navy took the OPM discussion of "personal religious belief" and incorporated it into an instruction.49 The instruction also suggests that it is Navy "policy" to consider "religious days of rest" when initially establishing work schedules. 121. Implementation of Title IV was not without controversy. While OPM expressed concern that Federal managers would become improperly "entangled" in making determinations about the legitimacy of their subordinates' religious beliefs, some agency Inspectors General feared widespread abuse. There was merit in both concerns, and in 1980 OPM invited agencies to document examples of abuse. They did so. 122. For example, a 1981 payroll review by the Inspector General of the Social Security Administration (SSA) concluded that many SSA employees were taking significant amounts of time off for personal reasons under the pretext of participation in religious observances. After reviewing eight sample pay periods in FY 1980, the IG, SSA estimated that central office employees took 75,000 hours of compensatory time off for religious observances. A subsequent survey of a four day period during the 1980 year-end holiday period showed that an estimated 2,500 employees in the Office of Central Operations took more than 40,000 hours off for religious observances.

49 The instruction is quoted in the "applicable regulations" section pertaining to this allegation.


- 44 -

123. The IG, SSA observed that most religious leave was requested for days off before and after holidays, Fridays and Mondays, and weeks during the summer vacation season. The IG cited the following examples of leave taken for the professed purpose of religious observances that indicated abuse:

- 75% of the 325 employees in one branch took off for religious observances on Thursday July 5 and Friday July 6, 1979; - An employee requested 32 hours of RCT in conjunction with a holiday; - An employee used RCT for a vacation;

- An employee requested four days of RCT in conjunction with five days of annual leave in order to be absent from work for two weeks (June 25 through July 6); - On 23 May 1980, the Friday before Memorial Day, 38 employees took RCT; - On 27 May 27, the Tuesday following Memorial Day, 36 employees took RCT; - On 3 July 1980, the Thursday before Independence Day, 63 employees took RCT; - On 7 July 1987, the Monday following Independence Day, 109 people took RCT; - On 29 August 1980, the Friday before Labor Day, 65 employees took RCT; - On 2 September 1980, the Tuesday following Labor Day, 62 employees took RCT.

124. The IG observed that employees requesting RCT have volunteered reasons that include attendance at funerals and weddings; visits to the sick and elderly; church picnics; memorial observances; and attendance at religious seminars, conventions, and conferences. 125. The IG suggested to OPM that agency supervisors needed to take additional steps to establish the "sincerity" or "genuineness" of an employee's request for RCT. OPM expressed concern for the constitutionality of such efforts, but did agree that employees should be required to submit written requests


- 45 -

that expressly state their requests for RCT were for religious purposes. It then said that supervisors should not inquire further, unless the request was "patently fraudulent." 126. In a letter of 12 May 1981, OPM made several recommendations designed to minimize the problems that agencies have encountered in implementing Public Law 95-390. One of them stated:

...If an agency can accommodate the religious needs of individual employees when it initially establishes work schedules, the agency can avoid rescheduling the work of specific individuals under this provision. The use of flexible work scheduling, including flexible arrival and departure times, staggered work hours, and compressed work schedules, should be utilized whenever possible.

127. In conjunction with the instant investigation, a quick survey of payroll information obtained from NAVSEA HQ shows the pattern one would expect for legitimate use of RCT. Only three percent of the employees make any use of RCT at all. Those employees that use it only take a few days each year. Their pattern of earning and using RCT squares with the Congressional intent demonstrated in the legislative history. Most employees earn an hour or two for two or three days a week over a two week period, then use all of that time up in one day a week or so later. Many employees would take only a few hours off on a particular day, which suggests attendance at a specific religious ceremony rather than abstention from work. The use of RCT on two consecutive days is infrequent. Using a typical interfaith religious calendar that can be accessed through the Navy Chief of Chaplains website, one can frequently identify the religious reason an individual used RCT on a specific date. 128. By contrast, 20% of the employees at NUWC NPTDIV are earning and using RCT, sometimes in large aggregates of time.50 There is little correlation to religious observances or religious holy days identified on a typical interfaith religious calendar. 129. Although members of the SES are not permitted to earn and use regular compensatory time, they are entitled to RCT under the conditions of the law. All employees who elect to work

50 In Fiscal Year 2000, 32 NUWC DIVNPT employees used in excess of 100 hours of RCT. Their grade levels ranged from GS-7 to ES-4. Five of them used more than 200 hours.


- 46 -

additional hours for the purpose of taking time off without charge to annual leave under the conditions of 5 USC § 5550a, may be granted, in lieu of overtime pay, an equal amount of time off from their scheduled tours of duty. Members of the SES are excluded from the premium pay provisions, such as paid overtime and compensatory time, other than for religious observances, under the provisions of 5 USC § 5541(2)(c)(xvi). However, as set forth by SECNAVINST 7000.11C, on their separation from Government service, which would include the occasion of retirement, they can be compensated for excess RCT time worked at the basic rate of pay in effect at the time worked. 130. OPM’s interim regulations in 1978 for implementation of Title IV of PL 95-390 were clarified in May 1980 by OPNAV Notice 12550, stating that the term “personal religious belief,” as used in the law, was to be interpreted broadly, and that an activity was not to question whether the employee’s personal religious belief was based on a recognized requirement of an established religion. The Notice also stated that the law should not be construed as an absolute requirement that an activity shall establish work schedules based solely on the needs of its employees to comply with their religious obligations. Additionally, the Notice stated that the law provided an individual the opportunity to request occasional adjustments in work schedules, if an activity were “unable to accommodate to the religious needs of all employees,” but that management retained the final authority on such requests. In November 1982 and April 1989, OPNAVINST 12000.14 and OCPMINST 12550.1, respectively, reiterated those provisions, while sustaining the policy that the personal belief must be “religious in nature” and “require” the employee to abstain from work during a period for which he or she is scheduled to work. 131. In April 1991, SECNAVINST 7000.11C, “Civilian Overtime and Compensatory Time Administration,” prescribed that the approval of compensatory time, including RCT, was vested in the commander or commanding officer or, as delegated in writing, to at least one organizational level above the level ordering the use of compensatory time. Compensatory time needs to be authorized in writing in advance of the performance of the work, except when the exigency of the situation prevents prior approval, in which instance written approval may be accomplished not later than the first normal working day after the work. The instruction also prescribes a maximum credit balance of 40 hours and that excess hours will be converted to paid or unpaid leave.


- 47 -

132. Prior to 1997, there was no formal NUSC/NUWC instruction regarding RCT, and the command's policy was announced in the Center’s weekly bulletins. The first notice was published on 12 January 1979. In July 1980, NUSC Bulletin 30-80 announced that based on the legislative history of Title IV, OPM determined that all Federal employees of the Executive Branch, including wage employees, were covered by the law. (Based on earlier OPM interpretations, DON activities had been advised to tentatively charge such absences of wage employees to leave, pending further guidance.) 133. Currently, OPM’s website, entitled “Adjustment of Work Schedules for Religious Observances” (see applicable regulations), states that agencies should require an employee to submit a written request for an adjusted work schedule “in advance,” and that the employee should specifically state that his or her request is for religious purposes and “provide acceptable documentation of the need to abstain from work.” Additionally, the website states that an employee should be allowed to accumulate “only the number of hours of work needed” to make up for previous or anticipated absences from work for “religious observances.”

134. , stated that when interpreting OPM’s guidance and formulating RCT policy for NUSC, he did not consult the command’s Counsel or personnel specialists external to the command. He believed the purpose of RCT “was to permit Federal employees to take part in religious observances or pursue [a] personal belief and not have to take annual leave.” During initial discussions, there were questions as to how the phrases “religious observance” and “personal belief” should be defined. advised senior management that these terms were properly defined by individuals on a case-by-case basis, that in that context RCT was “almost self-administering,” and that "it’s not something you can probe into and ask them why.” Since implementation of the policy, has not discussed RCT with any of NUSC/NUWC's Commanding Officers. [Ref (j)] 135. does not recall any discussions that he might have had with Dr. Sirmalis about RCT, but does recall conversations with Dr. Dence and Mr. Keil. [Ref (j)]

a. Some years ago, “could have been” 5 years, which would

have been approximately 15 years after command implemented the RCT policy, Dr. Dence asked about the use of RCT.

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 48 -

does not recall why Dr. Dence was asking the question. stated: [Ref (j), pp. 40 and 41]

My advice to Dr. Dence was similar to what I advised the peope when they first raised questions about it when we first put it in place. ...I wasn’t going to get into categorizing or trying to match a belief to some of the language in the policy. b. In approximately 1999, 20 years after command

implemented the policy, Mr. Keil asked him about the use of RCT. He does not recall why Mr. Keil was asking the question, but remembers saying to him, “If you think it’s appropriate, if it’s to pursue some spiritual, some personal belief, then it’s your call basically.” He further stated, “I told him what I might have told anybody, that I wasn’t going to put myself in a position where I try to pass judgment on an activity [as to] whether or not it was spiritual to them...I don’t know what spiritual activity is anymore.”

c. stated that he did not recall Dr. Dence or

Mr. Keil discussing the use of RCT in the context of facilitating the accumulation and protection of annual leave. 136. stated that whenever he decided to earn or use RCT, he did not disclose that fact to his supervisor and did not get specific approval. He did, however, inform the supervisor that he was going to be absent from work for a certain period of time, and he properly recorded it on his time sheet.51 Mr. acknowledged that his failure to obtain his supervisor's approval for earning and using RCT does “not square well” with the command's instruction requiring those specific approvals. [Ref (j)]

137. , reports to Dr. Sirmalis. In his pr WC DIVNPT worked initially for Dr. Sirmalis and th for Mr. Keil, after Dr. Sirmalis became the NUWC TD. is a senior engineer/scientist and for approximately 4 years his pay grade has been “SL-00,” equivalent to an SES. As an SL, Mr. can earn and use regular compensatory time, i.e., his compensatory time is not, as in the case of members of the SES,

51 ’s supervisor, the B source not sign Mr. e sheets. Instead, ’s Depu ) signed them.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 49 -

restricted to RCT. is not on the “Floating-40” system. stated:

a. An employee does not necessarily have to be engaged in

any kind of religious activity when using RCT: [Ref (pp), pp. 23 and 24]

I always take the week between Christmas and New Years off. Relative to that, Christmas is a religious holiday; New Years is a religious holiday. In other words, would those days between them, I mean relative to that – when there was a death in the family, my mother-in-law died a year or so ago, obviously we were all you know – I took religious comp time for that, you know, relative to that... I think you could rationalize it under many cases. b. He has used RCT to take vacation. [Ref (pp), pp. 34] There have been instances when I have done that, where I was low on the other one. See, one of the things there is, is that if you have a holiday, and you have a three-day weekend, and you want to take a week off, that’s a great time [to use RCT].

NUWC and NUWCDIVNPT Commanders Unaware

138. stated that he was unfamiliar with RCT for civilians. He also stated the fact that Dr. Dence has not taken any annual leave in many years is “disturbing; matter of fact, it’s downright irritating.” [Ref (e), pp. 44] 139. has not signed any civilian leave requests at NUWC. Before we interviewed him in September 2001, he had never heard of RCT and did not know that a large fraction of his command regularly earned and used RCT. [Ref (ggg)] 140. , 's predecessor, also did not know what RCT was, and was not aware that his command was earning and using it. [Ref (ll), p. 29]

Payroll Office Concerned About Abuse of RCT

141. fiscal assistant/lead technician at NUWC DIVNPT, supervised the payroll clerks until she retired in December 1999. She stated: [Ref (hhh)] a. The use of RCT was commonplace at NUSC when she started working there in 1985. The command’s interpretation of the law was liberal, as the focus was that the use of RCT could not be

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)


- 50 -

questioned. Employees used weeks of RCT for vacations. Ms. O’Neill, however, restricted her own use of RCT to Good Fridays.

b. NUWC DIVNPT employees also routinely abused RCT by taking 40 hours of advance RCT and not “paying it back” within the required time period (90 days by the current directive). Some employees had the advances on the books for years. In some cases, NUWC DIVNPT paid employees for unused RCT when they retired. Ms. O’Neill wrote many letters requesting repayment of advance RCT. In 1993, when DFAS Pensacola began servicing NUWC, the pay of employees who had not paid back advance RCT was automatically docked.

Dr. Sirmalis

142. When Dr. Sirmalis became an SES on 13 July 1979, he lost the right to accumulate regular compensatory time. In 1989, he started earning RCT. Between 1991 and 2000, he used only 4 hours of annual leave.52 However, during those 10 years, he used at least 827.8 hours of RCT, which is an average of 82.8 hours, or approximately 2 weeks, of RCT per year.53 For the 5 years commencing in 1996, he used an average of 116.9 hours, or approximately 3 weeks, of RCT per year.54 In 1998 alone, he used approximately 5 weeks of RCT. The following table is provided as a summary and is based upon our review of DFAS records and NUWC DIVNPT timecard and leave history data. Additionally, at our request, the NUWC DIVNPT Command Evaluation Staff (Code OOCE) conducted a review of command records for the years 1984 through 1993. [Refs (i) and (iii)]

Dr. Sirmalis' Use of Annual Leave and RCT Annual Leave RCT (Hrs Used) (Hrs Used) 1984 68.5 0 1985 156.7 0 1986 148.3 0 1987 4.7 0 1988 96.5 0 1989 0 0 1990 44.4 35.4

52 On 2 August 2001, his annual leave balance was 3,777.9 hours, and his sick leave balance was 3,310.2 hours. 53 Records of Dr. Sirmalis’ used RCT for 1992 could not be located. 54 Dr. Sirmalis was placed on the “Floating-40” system in May 1994.


- 51 -

1991 0 47.3 1992 0 ? (record unavailable) 1993 0 15.5 1994 0 81.0 [+ 24.5 “credit hours”] 1995 0 99.5 1996 0 127.0 1997 0 89.5 1998 0 194.5 1999 0 46.0 2000 4.0 127.5 2001 56.0 3.5 (through 6/17) Notes: (1) There may be some minor discrepancies, as some data may have been based on “leave” years, vice calendar years. (2) 1989 was the first year during which Dr. Sirmalis and Dr. Dence started earning RCT, although the public law allowing RCT had been in effect for the preceding 10 years. (3) “Credit hours” are regular, not religious, compensatory time. Earning regular compensatory time was and is not permissible for members of the SES. Inexplicably in the first quarter of 1994, Dr. Sirmalis earned 7.2 credit hours and used 24.5 credit hours. Additional credit hours were used in March and April of 1994, but in May 1994 they were retroactively converted to RCT used.

143. Dr. Sirmalis’ secretary for stated that she keeps his daily calendar. She also fills-out his timecards, marking down the hours that he provides her on a weekly basis. When he provides the hours, he identifies those to be attributed to RCT earned, usually the hours worked in excess of 40 hours per week. She stated that she understood the purpose of RCT was “just to have another place to hold and store time,” and that she did not believe that RCT at NUWC was being used in connection with religious activities. She also stated that Dr. Sirmalis tries to take a family vacation, for at least a week, once a year (e.g., taking his grandchildren to Disney World.) [Ref (jjj)] 144. For the years 1995 through 2000, Dr. Sirmalis used 15 extended periods of RCT, ranging from 13.5 to 67 hours. On 9 days, his timecards show he used RCT when his desktop calendar shows he had medical appointments. (His timecards do not indicate that he charged any time to sick leave on those dates.) For the years 1999 through 2001, he used a total of 13 hours of RCT on days that his desktop calendar shows he attended golf tournaments. (His timecards do not indicate that he charged any

(b)(7)(C)(b)(7)(C)


- 52 -

time to annual leave on those dates.) The following table is provided as a summary. [Refs (tt) and (kkk)]

Dr. Sirmalis' RCT Incident to Extended Periods of Absence (1)

desktop calendar notes 1995 Jun 01-Jun 10 53.0 hrs 1996 Apr 22-Apr 27 36.0 hrs “possible vacation” Aug 26-Aug 27 16.0 hrs “Vacation Days” Sep 30-Oct 05 40.0 hrs “Leave” 1997 Mar 17-Mar 18 13.5 hrs “A/L” Aug 13-Aug 16 24.0 hrs “Dr. Sirmalis vacation all week” Aug 18-Aug 23 40.0 hrs “Leave” 1998 Apr 03-Apr 11 35.0 hrs Jul 01-Jul 03 16.0 hrs “Dr. Sirmalis Leave” (2) Nov 09-Nov 18 48.0 hrs “Dr. Sirmalis A/L” Dec 10-Dec 24 67.0 hrs 1999 Aug 23-Aug 28 40.0 hrs “Leave” 2000 Mar 13-Mar 14 16.0 hrs “Leave” Aug 14-Aug 19 30.0 hrs “Leave” Oct 09-Oct 14 32.0 hrs “Dr. J Leave all week" (3)

Dr. Sirmalis' RCT Incident to Golf Tournaments

1999 Oct 22 1.0 hr 2000 Jun 01 4.5 hrs 2000 Sep 22 4.0 hrs 2001 May 30 3.5 hrs

Dr. Sirmalis' RCT Incident to Medical Appointments

1996 Nov 22 eye doctor 2.5 hrs 1998 Aug 20 Dr. appt 4.0 hrs Oct 28 Dr. appts 3.5 hrs Dec 07 Dr. appt 2.5 hrs Dec 09 Dr. appt 0.5 hr Dec 10 operation 8.0 hrs Dec 11 recov from op(?) 8.0 hrs 1999 Feb 01 Wife-heart Dr. 3.0 hrs 2000 Sep 25 Dr. appt 5.0 hrs


- 53 -

Notes: (1) The “extended” leave and medical appointment data is not necessarily all-inclusive. (2) Both 4 and 5 July 1998 were holidays. (3) Secretaries sometimes referred to Dr. Sirmalis as “Dr. J.”

145. Dr. Sirmalis’ timecards show that he routinely earned RCT whenever he worked in excess of 40 hours per week. There were numerous annotations indicating that RCT was synonymous with annual leave and that RCT was substituted for annual leave whenever possible. On some occasions, when RCT balances were insufficient to cover the full period of an absence, sick leave was charged. The following examples are illustrative: [Refs (tt) and (lll)] a. The annotations on the backsides of many of the timecards are not consistent with the hours of used RCT encoded on the front. Those hours are frequently referred to as “leave,” and at other times as “Rel Used.” [Ref (lll)] b. For the period of 1 October 1996 to 5 October 1996, 32 hours were originally recorded on the timecard as “annual leave,” and so credited in the payroll office, but on 26 October 1996, they were retroactively converted to used RCT. (RCT was also taken on 30 September 1996.) [Ref (mmm)] c. From 21 December through 23 December 1998, Dr. Sirmalis’ timecard indicates 2 hours of work and 6 hours of used RCT each day. It also shows 2 hours of work for Thursday, 24 December, but only 2 hours of used RCT, as 4 hours was charged to holiday leave. [Ref (nnn)]

d. The timecard for the period ending 2 January 1999 shows intention to use 32 additional hours of RCT from 28 December 1998 through 31 December 1998, but was changed to show 6 hours of sick leave and 2 hours of work for each of those 4 days.55 On

55 The 32 hrs of used RCT would have preceded Friday, the 1st of January, a Federal holiday. The RCT code on the timecard, “CA,” was crossed-out and replaced with the sick leave code, “LS.” The number “6” was written over each “8 [hrs]” in darker ink, for Monday through Friday. On the backside of the timecard, the word, “sick,” appears to be added in lighter ink after the word “leave” on each of the first 4 days of the week. The “LV” block on the front of the timecard shows “40 [hrs]” lined-out and replaced with “32,” indicating an initial recording of 40 hrs of “leave,” which included 32 hrs of used RCT and 8 hrs of Federal holiday. The reduction in hours is attributed to 2 hrs of work each day associated with a job order number, which appears to be written in the same ink as was the word “sick.” Since data on timecards was routinely recorded at the end of each week, the changes


- 54 -

28 December 1998, Dr. Sirmalis’ RCT balance was –24 hours, and at that point he could only have advanced himself 16 more hours of RCT, given the 40-hour limit on advance RCT. [Ref (ooo)] e. The timecard for the pay period ending 20 February 1999 shows intention to use 26 hours of RCT for the remainder of the week following Monday, 15 February, a Federal holiday. It appears that the timecard was altered to change those hours to sick leave. On 15 February 1999, Dr. Sirmalis’ RCT balance was 17.5 hours, and using 26 hours that week would have again given him a negative balance.56 [Ref (ppp)] 146. Dr. Sirmalis’ desktop calendars and office correspondence show vacation periods charged to used RCT, as evidenced by the following examples: a. Dr. Sirmalis’ desktop calendar shows that for Monday, Tuesday, and Wednesday, as well as portions of Thursday and Friday, of the week of 13 August 2000, he was on “annual leave.” His timecard for that week shows he used 8 hours of RTC on each of the first three days, 4 hours on Thursday, and 2 hours on Friday. [Ref (qqq)]

b. recalled that in the fall of 2000, Dr. Sirmalis went to the gambling casinos in New Jersey on a one-week vacation. Dr. Sirmalis’ desktop calendar shows that for the 4 days following a Monday Federal holiday (Columbus Day, 9 October 2000), he was on “leave,” a period for which his timecard showed 32 hours of used RCT. [Refs (f) and (rrr)]

c. Dr. Sirmalis’ desktop calendar shows a week of “leave”

for which he used 40 hours of RCT from 23 August through 27 August 1999. The backside of the timecard referred to “leave.” An administrative note appended to the calendar referred to a “week of: vacation.” [Ref (sss)] d. In November 1998, Veterans Day, a Federal holiday, fell on Wednesday, the 11th. By annotation, “Dr. Sirmalis A/L,” his desktop calendar showed that he was scheduled for annual leave

were most likely made after the discovery that Dr. Sirmalis was exceeding the maximum allowable advanced RCT.

56 On the timecard, the code “CA” has been written-over with the code “LS” in darker ink.

(b)(7)(C)


- 55 -

from 10-18 November 1998, a period for which his timecard showed 32 hours of used RCT. [Ref (ttt)]

e. On 25 July 1997, sent an e-mail to

and , stating that Dr. Sirmalis would be on vacation the week of 18 August 1997 and would be unable to attend the Demo Readiness Review scheduled for 21 August 1997. Dr. Sirmalis’ desktop calendar shows him on “vacation all week” for the period of 11-16 August 1997, and on “leave” from 18-23 August 1997. Dr. Sirmalis’ timecards show that for that 2-week period he used 64 hours of RCT. [Ref (uuu)]

f. Dr. Sirmalis’ desktop calendar shows “Vacation Day[s]”

for Monday and Tuesday, 26-27 August 1996, a period for which his timecard shows 16 hours of used RCT. [Ref (vvv)]

g. On 23 September 1996, sent an e-mail

announcing the presentation of the NAVSEA Scientist of the Year Award on 4 October 1996. This e-mail was retained in Dr. Sirmalis’ desktop calendar with an administrative note to the effect, “Dr. Sirmalis will be on vacation that week - responded by e-mail 9/23.” In addition, the desktop calendar contained the letter inviting Dr. Sirmalis to the presentation, with pen-and-ink annotation, “Responded by e-mail to 9/23/96; Dr. Sirmalis will be on leave all that week.” The desktop calendar itself was annotated with “Leave” for the period of 30 September 1996 to 5 October 1996, a period for which Dr. Sirmalis used 40 hours of RCT. [Refs (tt) and (www)]

h. Dr. Sirmalis’ desktop calendar also contained a

memorandum of 18 March 1996 from the DASN (Environment and Safety), announcing the presentation of SECNAV environmental awards on 25 April 1996. It was annotated with a pen-and-ink note, “Dr. Sirmalis is planning vacation this week.” The desktop calendar shows “Dr. J. Sirmalis Possible Vacation” for the period 22-24 April 1996 and 25-27 April 1996.57 That week, Dr. Sirmalis used 36 hours of RCT. [Ref (xxx)] 147. In addition to the previously noted discrepancies, a detailed comparison of Dr. Sirmalis' time and attendance records against a list of Federal Holidays shows a pattern of RCT usage similar to the abuses noted in the IG, SSA's 1981 review (as described in paragraph 123 above). For example, Dr. Sirmalis used RCT on the Friday after Thanksgiving in 1994, 1995, 1996,

57 Wednesday, 24 April 1996, was annotated with “TDY WA, DC.”

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 56 -

1999, and 2000. He used RCT in conjunction with the Fourth of July Independence Day Holidays in 1995, 1996, 1998, and 2000. On one or more occasions, he also used RCT in conjunction with Christmas, New Year's Day, Veterans Day, and Columbus Day. [Ref (tt)]

148. When asked how he accounted for having taken time off from work during years when he did not use annual leave, Dr. Sirmalis stated: [Ref (kk), pp. 19-22)]

Well, if I took any time off, the time I did probably take was religious comp....It’s leave I earned. And if I took it off, I took it off for appropriate purposes in my mind. Under the Federal laws, religious comp time is something I can choose to make a decision on; if I take it or not. It may be religious in terms of why I’m taking it. So that’s my prerogative to make that decision: if it’s a religious comp time and I believe it’s for the appropriate purpose. And I feel that I have....I don’t know if I’ve ever questioned anybody any time anywhere, because it wasn’t my right in my mind, if they were using religious comp time.

149. In interview on 12 July 2001, Dr. Sirmalis stated that when he takes time off from work, he generally tells his secretary that he is taking leave, and he is not aware of whether or not she enters that as RCT on his timesheets. While he stated that he could not account for his secretary putting him on RCT on those occasions, he acknowledged that she must have an understanding of “what the boss wants.” [Ref (kk), p. 28]

Yeah, probably so, because she knows I don’t take leave. So if, you know, if I’m leaving, it’s for whatever purposes I want. [And so that’s considered appropriate for religious comp time?] Yeah.

150. When re-interviewed on 30 August 2001, Dr. Sirmalis modified his previous testimony about how he interfaced with his secretary concerning his absences from the office. He stated, “If I am going somewhere and it’s religious compensatory time, I tell her that, in general.” [Ref (gg), p. 61] 151. Dr. Sirmalis acknowledged that he was aware that, as a member of the SES, he could not accumulate regular compensatory time. [Ref (kk), p. 23] 152. In interview on 12 July 2001, Dr. Sirmalis stated that he did not know whether or not he was on the Floating-40 timekeeping system. [Ref (kk), p. 24]


- 57 -

I just don’t know whether I am or not. Since I’m generally here more than 40 hours, if something averages out and I’m here more during the early part of the week and leave early some other part, then that’s part of the averaging out. But in general, I’m here more than 40 hours a week, much more.

153. Dr. Sirmalis stated that he did not take any vacation in 2000 and doesn’t recall whether he took vacations in the last few years. The vacation he took in 2001, for which he actually used annual leave, was his “first in a long time.” In response to the question of whether he used RCT for vacation, he stated, “Generally not, no; I don’t believe so; I don’t believe so at all.” He went on to clarify that there were no exceptions. Yet when asked whether he thought all the vacation time he took was religious-associated, he replied, “In essence, yes.” When asked further whether all of his “time-off” was religious–associated, he replied, “From my view, yes.” He explained that during such “time-off,” he has “gone and practiced [his] religious beliefs," which are based upon a “recognized religion.” When asked to cite examples of his religious-based reasons, he replied that he did not have to answer the question. He stated: [Ref (gg), pp. 37 and 38]

“Religious-based reasons” is sufficient example....It’s not something I have to discuss with you; anything about my religious beliefs, how I practice it, in any way, shape, manner, or form. And I won’t answer it.

154. In interview, Dr. Sirmalis refused to disclose his religious affiliation. He stated that he basically understood the purpose of RCT was to allow him to do “those things necessary for [him] to practice [his] religious beliefs, whatever it may be - meditation, walking in the woods, or anything.” [Ref (gg), pp. 20-25, 38] 155. In response to the question of what recognized religion required that he be absent from the workplace at certain specific times, Dr. Sirmalis stated: [Ref (gg), pp. 47 and 48]

Quite interestingly you’re putting quite a strong definition on “recognized religion,” like it’s something that has to be practiced in a specific way in a specific regime in a specific place....My interpretation is that if I choose to sit and meditate and contemplate, that is sufficient. It’s a choice, not a requirement ....Choice is all that’s required, so long as you can, in your own mind, feel that it’s practicing what you feel is appropriate for the


- 58 -

religious beliefs that you have, whether it’s self-renewal or something like that, self-renewal from a religious perspective or whatever is necessary.

156. Dr. Sirmalis stated that he did not recall ever approving RCT for anyone. As for himself, he never discussed with RADM , in any context, his need to earn and use RCT. Dr. Sirmalis did not make any specific request to earn or use RCT. When asked why he did not ever request to have his RCT approved, he replied: [Ref (gg), pp. 27-28, 49]

See, this is Naval Undersea Warfare Center. This is a demo lab. This is a lab that has been chartered to reduce and waive rules for efficiency perspective.

157. Dr. Sirmalis stated that he has issued no guidance on the use of RCT. He does not specifically recall discussing RCT with Dr. Dence, and he does not know why both he and Dr. Dence, coincidentally, started earning RCT in 1989, 10 years following enactment of the public law allowing RCT. Dr. Sirmalis was also unaware of any connection between starting to earn RCT and starting on the Floating-40 system during the same year. [Ref (gg), pp. 28, 31-32] 158. Dr. Sirmalis routinely credited his RCT account balance with additional RCT hours earned for any hours he worked in excess of his 40-hour week. When during interview, he was informed that the public law never imposed a limit on the amount of earned accumulated RCT, he stated: [Refs (gg), pp. 33-35; (tt); and (lll)]

If it didn’t impose a limit, then, geez, I’m losing a lot of leave for nothing. Now maybe I’ll bring it up with HR: take the limit off. I believe the [NUWC} limit is today-- only because I look at my leave and earnings statement—- it’s got to be somewhere around 80 hours because I’ve been at 80 hours for quite some time. And yet I’ve been working 10-hour days for quite some time, and apparently whatever that is in excess. So I normally say, “Put it under religious,” and nothing is changing. So I presume it’s got to be 80 hours because there’s got to be hundreds of hours thrown on the floor. [So anything that’s in excess of 40, you’ll automatically put-in for earning RCT?] That’s the only leave category [for] SES.

(b)(7)(C)


- 59 -

[So you do that as sort of a matter of routine?] A matter of routine. Don’t even think about it. If it’s over, put it there. And recognizing that, as I say, just in the last couple of weeks probably 20 to 30 hours have gone on the floor because they couldn’t go anywhere.

159. In response to the question of whether during the years 1991 through 1999, when he used no annual leave, there was even one day that he could spend away from the workplace, Dr. Sirmalis replied: [Ref (gg), pp. 51 and 52]

Very busy times...[rhetorically:] Have you ever been involved in BRAC?....In my mind I had to make a choice on how I took the leave. Was I going to take it for – to go and do something in one direction? Or go and – and do it where I was satisfying what I felt to be my religious beliefs? I had a choice.

160. Additionally, Dr. Sirmalis underscored that whenever he took time-off, it was not only for a religious reason, but it was specifically associated with religious observances. [Ref (gg), p. 53] 161. In response to the question of whether he used RCT to participate in golf tournaments, Dr. Sirmalis stated: [Refs (gg), p. 60, and (kk), p. 22]

Not to my knowledge; I tell my secretary I’m taking leave...I don’t ever recall taking religious compensatory time for golf tournaments.

162. Dr. Sirmalis did not answer our question of whether he considered golf tournaments to be religious observances, but stated that "they could be for some people." [Ref (gg), p. 60] 163. Dr. Sirmalis explained that the RCT he takes when he is away from the workplace does not necessarily have to coincide with the "work day," given that he is on the Floating-40 system. Therefore, there is not necessarily any relationship between his participation in hours of golf during the "work day" and an equal number of hours of RCT he uses the same day (which, perhaps, could be during the night).58 [Ref (gg), pp. 57 and 62]

I have a 24-hour period in which, with Floating-40, I can use religious comp [time]. So the period potentially that I was playing

58 Dr. Sirmalis testified earlier that he did not know if he was on the Floating-40 system, yet now he is articulating why his time cannot be accurately audited, because he is on the Floating-40 system.


- 60 -

golf, in your example, may not be the period in that 24-hour period where I took the religious comp [time].

164. Similarly, when asked whether he took RCT for medical appointments, Dr. Sirmalis stated: [Ref (gg), pp. 60 and 61]

Generally, no. It might have been – no, the answer is “no.” Not – again: the 24-hour, Floating-40 demo rule.

165. When confronted with the fact that he was just working overtime and having it documented as religious overtime, Dr. Sirmalis replied: [Ref (gg)]- pp. 55 and 56]

You’ve got it. I can choose what then I want to put it in, can’t I? Absolutely right. If I’m working overtime and don’t get paid for overtime, then I pick what then I want to put it in. I can’t get credit hours. So I’ll fill-up the religious comp time bin because that’s something that I choose to use when appropriate and when I desire to use it.

166. In response to the interviewer’s comment that there are people in Washington who believe that Dr. Sirmalis is abusing RCT, Dr. Sirmalis stated: [Ref (gg), p. 76]

I really don’t care what the people in Washington believe. It’s what I believe and what I understand and what I know as being the truth. Perceptions, the way they’re presented by other people, whoever they may be in presenting what the other people believe to be facts in their mind, can certainly color the way other people believe, because I do that daily in my job in convincing people to go this way, that way, or the other....All of Washington doesn’t understand BRAC, period. Period.

Mr. Keil

167. Beginning on 27 March 1988, the date he became an SES, Mr. Keil was no longer entitled to earn and use regular compensatory time. For the 7½ years between 1993 and July 2001, he used only 88 hours of annual leave, 40 hours of which he donated. So, on average, he took only 6.4 hours, or less than one workday, of annual leave per year. However, during those years, he used 846.2 hours of RCT, an average of 112.6 hours, or 2.8 weeks, of RCT per year. For 3½ of those years (1995, 1996, 1998, and half of 2000), he used no annual leave whatsoever. At the same time, he used 424.5 hours of RCT, an average of 120.86 hours, or 3 weeks of RCT, per year. The following table is provided as a summary. [Refs (i) and (ddd)]


- 61 -

Mr. Keil's Use of Annual Leave and RCT

Annual Leave RCT (Hrs Used) (Hrs Used) 1993 ? 37.0(+?) [+11(+?) “credit” hours] 1994 40.0 81.8 [+1.0 credit hour] 1995 0 64.4 1996 0 148.5 1997 40.0 147.2 1998 0 123.8 1999 8.0 83.9 2000 0 87.8 2001 0 108.8 (through 7/5) Notes: (1) There may be some minor discrepancies, as some data may have been based on “leave” years, vice calendar years. (2) “Credit hours” are regular, not religious, compensatory time. Earning regular compensatory time was and is not permissible for members of the SES. (3) In 1994, Mr. Keil donated 40 hours, and forfeited 8 hours, of annual leave.

168. , has been Mr. Keil’s secretary for . She stated:

a. Mr. Keil is on the Floating-40 system, and he fills in his own time cards, although she fills in his timecard when he is on official travel. He works so much that he “has a hard time taking leave.” She referred to the “leave” Mr. Keil took in Germany in June/July 2001. [Ref (bbbb), pp. 6, 8, 11, and 12]

He has a hard time taking leave. Usually, like he and Margaret—that’s — were able to, like he went to Germany on business. So what he did was he took some time off on either side of it and took some vacation that way....He’s used a little [RCT] up...[it] went to his trip; so there’s some [RCT] to earn now. But, I mean most of the time it [earned RCT] would just go in outer space, because he can’t [accumulate any more], you know, once he’s got the 80 [maximum RCT accumulation hours], that’s it; if he doesn’t use some, he loses it....So he used probably, I’d say, at least a week of it. Because like he – TDY I believe started on a Monday, so his travel day actually would have been a Sunday....But he and Margaret left like maybe 4 days before. So he was on leave, so I put him on TDY for Sunday...through Saturday. And then any other time on the

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 62 -

other side of that, he was on religious leave; so that’s how that works. b. She thinks that Mr. Keil is Lutheran and is

Catholic. She opined that perhaps Mr. Keil’s time-off with his wife in Germany could have been a religious experience. [Ref (bbbb), pp. 15 and 16]

I mean really, who’s to say....You can’t judge, you know, what’s going on in someone’s mind and in their soul....You don’t get a receipt from your rabbi or your minister or your priest, saying that you were at the church or the temple meditating. You just go, you know? I mean, you earned it. It’s yours to use. c. She “used to use” RCT, but stopped using it because

otherwise she would be losing annual leave.59 [Once a non-SES employee accumulates 240 hours of annual leave, the maximum amount that can be carried forward from one year to the next, there is no incentive to conserve annual leave by using RCT, unless there is some way to have the unused balances restored, as the subjects were able to do.] [Refs (bbbb), pp. 13, and (cccc)] 169. The following table summarizes Mr. Keil’s use of RCT incident to extended periods of absence and medical appointments: [Refs (ddd, (yyy), and (zzz)]

Mr. Keil's RCT Incident to Extended Periods of Absence desktop calendar notes 1994 Jun 16-Jun 23 40.0 hrs Sep 13-Sep 17 22.0 hrs 1996 May 21-May 25 31.5 hrs “Leave” Jul 01-Jul 06 32.0 hrs “Leave all week- home”60 Oct 11-Oct 17 24.0 hrs “Annual Leave” Dec 23-Dec 30 32.0 hrs “on leave all week” 1997 Jul 07-Jul 11 32.0 hrs “annual leave all week”

59 A spot-check of accounts show that in 1994, 1995, 1997, and 1998, she used a total of 588.8 hours of RCT, an average of 3.6 weeks per ye 60 , one of Mr. Keil’s , was apparently visiting her parents, as ved for a while on t oast and subsequently in Boston.

(b)(7)(C)

(b)(7)(C)(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 63 -

1998 Jun 09-Jun 13 26.5 hrs “annual leave” Aug 06-Aug 08 16.0 hrs “01 on leave” Dec 24-Jan 04 30.9 hrs “01 on leave” 1999 Jun 17-Jun 23 19.5 hrs “Juergen in Alaska” Dec 23-Jan 03 26.0 hrs “off; leave” 2000 Dec 27-Jan 01 16.0 hrs 2001 Jun 07-Jun 09 16.0 hrs “taking day off;

on leave all day- anniversary” Jun 21-Jun 23 16.0 hrs Germany Jul 02-Jul 06 24.0 hrs Germany

Mr. Keil's RCT Incident to Medical Appointments 1997 Oct 09 “on leave ½ day, 9:30 ” 0.5 hr61 Oct 10 “off- 10:00-11:15 - Mr. Keil;

1:00 - 8 hrs Keil” 8.0 hrs 1999 Feb 19 “1400 Depart for Dentist” 0.5 hr Apr 09 “On leave (Dr’s appt)” 6.0 hrs 2000 May 01 “In-Boston-dentist (for AM)” 3.0 hrs

170. As shown above, between 1993 and 6 July 2001, Mr.Keil used RCT for 16 extended periods of absence from the workplace, ranging from 16-40 hours per period, including the following examples: [Refs (ddd) and (yyy)]

a. He used 19.5 hours between 17 and 23 June 1999, during which time he ran a marathon in Alaska with one of his .

b. Between 21 June and 6 July 2001, he used 40 hours of

RCT for sightseeing in Germany with , before and after a few days of official business.

61 The timecard shows an initial distribution of 5.5 hrs worked (“RG”) and 2.5 hrs of used RCT (“CA”), which was changed to 7.5 RG and 0.5 hr CA. It appears that the amount of RCT was arbitrary, simply to round-out an 8 hr day. On the following day, Friday, Mr. Keil used 8 hrs RCT, which completed the 40 hr workweek; he had an appointment with a doctor in the morning, and an appointment with a different doctor in the afternoon. Friday immediately preceded the 3-day Columbus Day weekend (Monday was the Federal holiday).

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 64 -

c. In 1996, he used 31.5 hours of RCT immediately preceding the 3-day Memorial Day weekend, 32 hours of RCT during the week of the 4th of July, 24 hours of RCT surrounding Columbus Day, and 32 hours of RCT during Christmas week. 171. On 28 August 1995, Mr. Keil used 8 hours of RCT and his desktop calendar, which showed that he took the day off, was annotated with the words, “01 off- mover’s packing.” On 30 August 1995, he again used 8 hours of RCT and his desktop calendar was annotated with the words, “01 off- moving- AL.” [Ref (zzz)] 172. During the week of 20 May 1996, Mr. Keil used 31.5 hours of RCT. His desktop calendar was annotated with the words, “Keil’s moving,” and showed that he was on “leave” Tuesday through Friday. [Ref (zzz)] 173. During 1997, 1999, and 2000, Mr. Keil used a few hours of RCT on days that his desktop calendar indicates he had medical appointments. He did not charge any time to sick leave on those dates. On 18 July 1997, he used 8 hours of RCT; his desktop calendar shows that date to be a “Moving Day.” [Refs (ddd), (yyy), and (zzz)]

174. Mr. Keil routinely earned RCT whenever he worked in excess of 40 hours per week, thereby maximizing the accumulation of earned RCT. Appended to his timecard for the pay period ending 10 March 2001, which credited him with 13 hours of RCT earned over a period of 5 days, was an administrative note to the Payroll Office, “If Mr. Keil is max[ed-]out on religious comp [80 hours], just disregard the CR earned; thank you.”62 [Refs (ddd) and (aaaa)] 175. Mr. Keil did not seek approval to earn RCT, and therefore his supervisor did not approve it. Mr. Keil’s random pattern of earning and using RCT suggests that it was not tied to specific, projected, religious requirements for using it. [Refs (ddd), (ggg), and (aaaa)] 176. Mr. Keil signed many of his timecards. These timecards demonstrate that he consciously charged time to RCT-used when his desktop calendars state he was taking annual or some other form of leave. Examples of calendar annotations are: “leave,” “on leave all week,” “annual leave,” “A/L,” “on-leave ½ day,”

62 “CR” is the accounting code for earned RCT. The last day of the pay period is Saturday.


- 65 -

etc. In those cases, the fronts of the timecards show he was charging time to the RCT-used, encoded “CA,” but the backsides show the time was recorded as “leave.” [Refs (ddd) and (yyy)] 177. In addition to the previously noted discrepancies, a detailed comparison of Mr. Keil's time and attendance records against a list of Federal Holidays shows a pattern of RCT usage similar to the abuses noted in the IG, SSA's 1981 review (as described in paragraph 123 above). For example, Mr. Keil used RCT on the Friday after Thanksgiving in 1996, 1997, 1998, 1999, and 2000. He used RCT in conjunction with the Fourth of July Independence Day Holidays in 1996, 1997, 1998, and 2001. On one or more occasions, he also used RCT in conjunction with Christmas, New Year's Day, Veterans Day, Columbus Day, Memorial Day, Labor Day, and Martin Luther King Day. [Ref (ddd)] 178. Mr. Keil stated that some of the leave he has taken has been “religious leave.” When asked whether he used RCT for non-religious purposes, he stated: [Ref (dddd), p. 13]

What one’s religious beliefs are and what one does in terms of belief to exercise those beliefs, I think, is a private matter. And it’s one that if you look at the regulations...is something that is not to be questioned. And so it’s, I think, a general policy here in the organization to let people utilize that leave as they see fit for whatever religious beliefs or rationale or reason that they have....I’ve used it for what I feel was appropriate or the things I believe in.

179. When questioned about his use of RCT for running a marathon with in Alaska, Mr. Keil stated: [Ref (dddd), p. 14]

I don’t think religious beliefs are, you know, very well defined in terms of what one feels is a spiritually important thing to do. You know, if it’s a spiritually important and bonding experience for me to do something with that I think bonds our relationship and commitment, then I think that’s appropriate....This is an area that is not one that is, you know, is supposed to be questioned in terms of how one applies and realizes that leave. I mean, that’s the way the policy has been implemented here in this organization. And, in fact, I think if you look at the regulations in the OPM, or whatever the appropriate instructions are, it’s similar wording.

180. When asked about his use of RCT in Germany before and after his official business, Mr. Keil stated: [Ref (dddd), pp. 18 and 19]

(b)(7)(C)

(b)(7)(C)


- 66 -

There were a couple of days in Germany where there were a couple of extra days associated with that where, again, I had a bonding experience with that lives in Germany and on the back-end we spent some time visiting Zurich and the various churches and areas in the city there. And again, it’s a matter of what’s sort of spiritually important to you. And, you know, is every minute of the 8-hour day spent doing that? No, probably not. I did eat in between. But I don’t think it’s unreasonable.

181. When asked whether every instance of his use of RCT had some religious connection and whether he thought RCT could be abused, Mr. Keil replied: [Ref (dddd), pp. 15 and 17]

I don’t even feel it’s an appropriate question to ask in accordance with the guidance that’s in the regulation....I don’t understand the abuse. I mean: it’s leave you’re allowed to...earn....I don’t think there’s an abuse issue....If you look back over the last couple of years in terms of leave, you know, I’ve perhaps used a couple of week’s worth of religious leave. Typically some of that is around the holidays, and then there are some occasions during the year. But I don’t come anywhere close to being able to use religious leave as annual leave. I mean, like I say, it’s usually on the order, I would think, of perhaps maybe two weeks over the entire year where something like this occurs. So, I mean, I just work a lot of hours and I don’t have the ability to utilize the leave that I have.

Dr. Dence

182. Beginning on 4 March 1984, the date he became an SES, Dr. Dence was no longer entitled to earn and use regular compensatory time.63 In 1989, he started earning and using RCT. Between 1989 and 2001, he used no annual leave or sick leave. However, during those 11 years, he used 1,490.3 hours of RCT, which is an average of 135 hours, or 3.4 weeks, per year. For the 7 years commencing in 1994, he used an average of 167 hours, or 4 weeks, of RCT per year. The following table summarizes his use of annual leave and RCT. [Refs (i), (uu), and (iii)]

Dr. Dence's Use of Annual Leave and RCT Annual Leave RCT (Hrs Used) (Hrs Used)

63 In April 1984, Dr. Dence requested conversion from the “Floating-40” system to the “Flexitour” work schedule. In December 1993, he requested conversion from Flexitour to the Floating-40.

(b)(7)(C)


- 67 -

1984* 19.7 0 1985 0 0 1986 10.0 ? (record unavailable) 1987 67.1 0 1988 63.8 0 1989 2.9 10.7 1990 0 64.1 1991 0 40.0 1992 0 154.7 1993 0 63.3 [+7.6 “credit hours”] 1994 0 189.3 [+2.0 credit hours] 1995 0 169.7 1996 0 192.2 1997 0 176.8 1998 0 155.7 1999 0 145.0 2000 0 139.5 2001 0 47.9 (through 3/31) Notes: (1) There may be some minor discrepancies, as some data may have been based on “leave” years vice calendar years. (2) In April 1984, Dr. Dence requested conversion from the “Floating-40” system to the “Flexitour” work schedule. In December 1993, he requested conversion from Flexitour to the Floating-40. (3) 1989 was the first year during which Dr. Sirmalis and Dr. Dence started earning RCT, although the public law allowing RCT had been in effect for the preceding 10 years. (4) “Credit hours” are regular, not religious, compensatory time. Earning regular compensatory time was and is not permissible for members of the SES. However, in the Fall of 1993, Dr. Dence earned 4.7 credit hours and used 7.6 credit hours. In January 1994 he used 2.0 credit hours.

183. was Dr. Dence’s secretary and when he was the of the Weapons Systems ate, from approximately October 1995 to October 1998. She kept his desktop calendars.64 She stated: [Ref (ffff), pp. 3 and 4] a. Dr. Dence commenced telecommuting in January 1996 when [Ref (ffff), pp. 5 and 7]

64 She discarded the 1995 desktop calendar because she needed more storage area. We could only find Dr. Dence’s desktop calendars for the years 1996, 1997, and 1998.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)


- 68 -

b. He never took annual leave or sick leave. He was on the “Floating-40” system. He “maintained his own hours” and routinely told her what entries to make on his timecards. He kept track of his time “to the minute.” [Ref (ffff), pp. 4, 18, and 19] c. When Dr. Dence worked in excess of 40 hours per week, he accumulated RCT. Once he was angry with her because she allowed him to earn RCT in excess of the 80 hour maximum imposed by NUWC NPTDIV, and so he lost those excess hours. [Ref (ffff), p. 18] d. When Dr. Dence went to a medical appointment, he would either use RCT or “make it up with his Floating-40.” [Ref (ffff), p. 19] 184. opined: [Ref (ffff), pp. 21-23]

You don’t have to ask for religious comp time, from what I understand, because they can’t stop you from taking leave. Management can’t stop you from taking religious comp time....My opinion is that we have three types of accumulating leave....So if you fill up those slots, then your next one is religious comp time. And I think if you see – if you check the people here, outside of the SESs, that did use religious comp time, you’d see they used all three.

185. was Dr. Dence’s secretary and for approximately 3 years, commencing in October 1998. She maintained his desktop calendar. She stated:

a. Dr. Dence never took any annual leave, but he used RCT instead of leave and “kept track of his time every day, to the second; he was very meticulous about his time.” She kept track of his RCT so that “he always knew what his running balance” was. He earned RCT approximately every other week. He never referred to attending religious activities. [Ref (gggg), pp. 8-12]

b. She opined: [Ref (gggg), pp. 8, 10, 12, 14, and 34]

Most of the people that are “higher-up,” they earn religious comp time and they – most of them use that....I’m not even sure how that religious comp time works; I just know that a lot of people at NUWC collect religious comp time....I just assumed that’s what the upper-people did...religious comp I thought was only for the “upper-

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 69 -

level.” [then Dr. Dence’s Deputy] did basically the same thing....That’s why I didn’t think it was wrong....[That RCT is for religious purposes:] that’s what I did think when I started working up there, but then, as time went on, I just assumed I was wrong.

186. From 1994 to 1998, Dr. Dence used at least 11 extended periods of RCT, ranging from 16 to 40 hours. On 9 occasions, he used a few hours of RCT during the day when his desktop calendars indicate he had medical appointments. He also used tiny amounts of RCT (in at least 40 instances he used tenths of an hour, in every increment from 0.2 through 0.9). The timecards for pay periods ending 18 March 2000 and 23 January 1999 each show Dr. Dence used 3.3 hours of RCT on a Friday and Saturday, respectively; these hours were simply necessary to make his weekly totals equal to 40 hours. The following table is provided as a summary. [Refs (uu) and (eeee)]

Dr. Dence's RCT Incident to Extended Periods of Absence desktop calendar notes

1994 Aug 01-Aug 05 40.0 hrs 1995 Apr 17-Apr 18 20.0 hrs Jun 27-Jul 01 34.5 hrs Jul 26-Jul 28 16.8 hrs 1996 Jan 22-Jan 23 16.3 hrs Jul 15-Jul 19 40.0 hrs Nov 26–Dec 05 35.5 hrs 1997 Jul 29-Jul 31 16.7 hrs “vacation” [for the week] Dec 24-Jan 05 26.8 hrs 1998 Jun 10-Jun 15 24.5 hrs Jul 01-Jul 06 14.9 hrs

Dr. Dence's RCT Incident to Medical Appointments

1996 Aug 29 3.0 hrs Nov 20 5.1 hrs Dr. appt Nov 22 8.0 hrs Dr. appt 1997 Jan 10 0.5 hrs Jan 13 4.0 hrs Feb 07 5.1 hrs Apr 21 3.9 hrs Dr. appts Dec 19 7.4 hrs

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 70 -

1998 Apr 22 5.3 hours Notes: (1) The “extended” leave and medical appointment data is not necessarily all-inclusive. (2) “ ” was apparently for . However, Dr. Dence’s desktop calendar for 22 Apr 98 was annotated with the words, “ to Phy Therapy.” ( was the daughter of Dr. Dence’s )

187. Dr. Dence’s timecards show that Dr. Dence, like Dr. Sirmalis and Mr. Keil, routinely earned RCT whenever he worked in excess of 40 hours per week. His decision not to use annual leave, coupled with the retroactive conversion of some recorded annual leave to used RCT, gives credence to ’s recollection that he used RCT in lieu of annual leave. [Refs (h), (uu), (hhhh), and (llll)]

a. Some timecards were initially encoded with hours of

used annual leave and subsequently amended to retroactively convert that leave to used RCT.

(1) For the period of 26-30 June 1995, 34.5 hours of

used annual leave were recorded on the timecard, and approximately one month later (22 July), those hours were retroactively converted to used RCT.

(2) For the period 20-21 August 1998, 11.5 hours of

used annual leave were recorded, and approximately 3 weeks later (12 September), those hours were retroactively converted to used RCT.

(3) Similarly, 3.3 hours of used annual leave,

recorded on 22 January 1999, were retroactively converted to used RCT.

b. On 11 June 1999, 9.9 hours were recorded as regular

time worked; later 8.9 of those hours were converted retroactively to used RCT.

c. On several occasions, e.g., the pay periods ending

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 71 -

3 August 1996 and 16 May 1998, the timecards were not completely filled-in, as the hours of used RCT were associated with only the week and no specific dates. 65

d. There were also inconsistencies in recorded data. For example, the front side of the timecard for the pay period ending 31 March 2001 showed a total of 9.5 hours of used RCT, all on a Thursday, whereas the back side indicated RCT was used on Thursday and Friday.66

188. Additionally, review of Dr. Dence’s timecards showed numerous corrections that were made after the timecards were submitted to the payroll office. Some corrections converted regular hours worked to RCT used, and other corrections converted RCT used to regular hours worked. [Ref (hhhh)] a. On 7 January 1995, one hour was retroactively added to the 7.3 hours of RCT used on 20 December 1994. b. On 15 April 1995, 4.0 hours of RCT used on 9 March 1995 were retroactively converted to regular hours worked. 189. In addition to the previously noted discrepancies, a detailed comparison of Dr. Dence's time and attendance records against a list of Federal Holidays shows a pattern of RCT usage similar to the abuses noted in the IG, SSA's 1981 review (as described in paragraph 123 above). For example, Dr. Dence used RCT on the Friday after Thanksgiving in 1996, 1997, 1999, and 2000. He used RCT in conjunction with the Fourth of July Independence Day Holidays in 1994, 1997, 1998, and 2000. On one or more occasions, he also used RCT in conjunction with Christmas, New Year's Day, Columbus Day, Memorial Day, Labor Day, Presidents' Day, and Martin Luther King Day. [Ref (uu)] 190. , NUWCDIVNPT Division Head and Training Officer, from 18 December 1994 to 20 January 2000. She stated: [Ref (iiii)] a. She wrote the command instruction for the telecommuting program and asked her husband to participate in the program.

65 It appears that subsequently someone in the Payroll Office arbitrarily credited those hours to specific dates. 66 These examples appear to reflect more than sloppiness and anomalies. They are strong indicators of arbitrarily using RCT to round-out the 40 hours for any given week, vice meeting a specific religious observance or requirement.

(b)(7)(C)(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 72 -

Starting in 1996, Dr. Dence telecommuted for a day or two each pay period until July 2000. b. Dr. Dence . He went to La Salle, which is a private Catholic school in Providence, RI, and he occasionally visited the school to talk to students and attend religious services with them. He has stayed in touch with the priests and helped them with administrative matters. c. , she “insisted” that they take vacations together, generally once a year, in addition to visiting in Ohio over the Christmas holidays. In July 1995, they spent one week on vacation at Cape Cod, MA. In November 1996, they spent one week on vacation (“over Thanksgiving”) in Paris, France. In December 1997, they spent one week on vacation (“over Christmas”) in Naples, FL.67 191. From 1994 to 2000, , SES-4, worked directly for Dr. Dence at NUWC DIVNPT. was not aware of Dr. Dence’s or Dr. Sirmalis’ usage of RCT and was also unaware of whether use of RCT was widespread at NUWC DIVNPT. stated that he did not recall using any RCT since becoming a member of the SES in 1998. He was only aware of several Jewish employees who used “religious leave.” stated: [Ref (vv), pp. 60-62, 67, and 68]

See, the religious comp time only applies to a few holidays like Christmas [and] Thanksgiving. There’s not that many days you can accumulate....I remember there was [a specific instruction at Newport], the authority predicated upon your supervisor’s approval. And it will be based upon the ethnic basis that truly I know there are people in the Jewish faith, they do not celebrate Christmas. And they do request to use their religious time, because they will continue to work during the Christmas time and then use the time in the Jewish holidays; and I think it’s well justified....You either have a different faith or different ethnic background. I do not believe it’s widely used.

192. As previously noted, Dr. Dence, through his attorney, declined to answer our questions regarding use of RCT.

67 These vacation periods appear to correlate with the 16.8 hours of RCT that Dr. Dence used from 26 Jul 95 to 28 Jul 95; 37.5 hours from 26 Nov 96 to 4 Dec 96; and 26.8 hrs from 24 Dec 96 to 5 Jan 97.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 73 -

Applicable Regulations 193. 5 CFR § 550.1002, “Compensatory time off for religious observances,” states:

(a) These regulations are issued pursuant to title IV of Public Law 95-390, enacted September 28, 1978. Under the law and these regulations, an employee whose personal religious beliefs require the abstention from work during certain periods of time may elect to engage in overtime work for time lost for meeting those religious requirements. (b) To the extent that such modifications in work schedules do not interfere with the efficient accomplishment of an agency’s mission, the agency shall in each instance afford the employee the opportunity to work compensatory overtime and shall in each instance grant compensatory time off to an employee requesting such time off for religious observances when the employee’s personal religious beliefs require that the employee abstain from work during certain periods of the workday or worked. (c) For the purpose stated in paragraph (b) of this section, the employee may work such compensatory overtime before or after the grant of compensatory time off. A grant of advanced compensatory time off should be repaid by the appropriate amount of compensatory overtime work within a reasonable amount of time. Compensatory overtime shall be credited to an employee on an hour for hour basis or authorized fractions thereof. Appropriate records will be kept of compensatory overtime earned and used. (d) The premium pay provisions for overtime work in subpart A of part 550 of title 5, Code of Federal Regulations, and section 7 of the Fair Labor Standards Act of 1938, as amended, do not apply to compensatory overtime work performed by an employee for this purpose.

194. Enclosure (2) to OCPMINST 12250.1 CH-1 (CPI 550.S1), of 20 April 1989, states:

f. Compensatory time off for religious observances...

(2) The term “personal religious belief” is to be interpreted broadly. An employee’s personal religious belief does not have to be based on an established religion, nor does it necessarily have to be a recognized requirement of an established religion in order to satisfy the intent of the law. It only has to be a personal belief of the employee which is religious in nature and which requires the


- 74 -

employee to abstain from work during a period for which he or she is scheduled to work. An activity is not to question whether the employee’s personal religious belief is based on a recognized requirement of an established religion. Rather, the activity is expected to accommodate the employee’s request for compensatory time off or overtime work for this purpose, unless such modifications in the individual’s work schedule would seriously interfere with efficient accomplishment of the mission....

(5) 5 USC 5550(a) does not require an activity to establish work schedules based solely on the needs of its employees to comply with their religious obligations. It remains the primary responsibility of an activity to schedule the work of its employees to best accomplish the mission of the organization. While the Department of the Navy policy has always given consideration to religious days of rest when initially establishing work schedules, it is not always possible to meet each employee’s particular religious needs. This authority provides an individual the opportunity to request occasional adjustments in work schedules if an activity is unable to accommodate the religious needs of all employees. Management, however, retains the final authority on all requests.

195. SECNAVINST 7000.11C, “Civilian Overtime an Compensatory Time Administration,” of 19 April 1991, states:

5. Policy. The following policies are established to control overtime and compensatory time usage and minimize personnel costs. f. Section 5541 of [Title 5, USC] specifically excluded members of the...SES from payment for overtime or crediting of compensatory time. Section 5547 of [Title 5, USC] limits the payment of overtime or crediting of compensatory time to the extent that the aggregate compensation for any pay period does not exceed the maximum rate for GS-15. This provision effectively precludes the payment of premium pay to employees in executive schedule positions. g. However, all employees, including SES, General Schedule (GS), Performance Management and Recognition System (GM) and Federal Wage System (FWS), may be granted compensatory time off for religious observances, despite the fact that they may not be otherwise entitled to receive premium pay... Compensatory time off for religious purposes does not in any way involve the payment of premium pay for any work performed in excess of an 8-hour workday or a 40-hour workweek. Thus, an employee who earns a given amount of compensatory time for religious observances cannot elect to be paid for that time; he or she has merely substituted time which, unlike traditional compensatory time off...cannot replace, or result in,


- 75 -

that employee’s entitlement to premium compensation, except as noted in paragraph h below. (1) The maximum credit balance will be limited to 40 hours. Excess hours will be converted to paid or unpaid leave.... (2) Religious compensatory time credit hours not worked within 90 days will be converted to paid or unpaid leave.... h. When an employee separates or transfers to another agency, the employee shall be compensated for excess religious compensatory time worked at the basic rate of pay in effect at the time worked. In this regard, earned religious compensatory time remaining in an employee’s special account upon separation/transfer shall be treated in the same manner as compensatory time worked in lieu of overtime pay.

196. Enclosure (5) to NUWCDIVNPTINST 12630.1C of 4 March 1997, states:

Information. NUWCDIVNPT employees may, with supervisory approval, elect to work compensatory time for the purpose of taking time off without charge to leave when personal religious beliefs require that the employee abstain from work during certain periods of the workday or workweek. An employee’s election to work such religious compensatory time (RCT) or to take religious compensatory time off to meet his/her religious obligations may be disapproved if, in the supervisor’s judgment, such a modification in the work schedule would interfere with the efficient accomplishment of the mission. Eligibility. All NUWCDIVNPT employees may adjust, with supervisory approval, their regular work schedules to meet personal religious obligations. Part-time employees can earn, use, or be advanced the same number of RCT hours as full-time employees. Procedures. Supervisory approval is required for earning, being advanced, or using RCT. The maximum number of hours an employee can earn is 80 hours and the maximum number of hours an employee can be advanced is 40 hours. Any amount of RCT in excess of 80 hours will be forfeited, although balances of 80 hours or les can be maintained and carried over from year to year. If an employee is advanced RCT, the hours used must be made up within 90 days in a duty status following the use of the RCT. A supervisor will grant or deny RCT without consideration of the employee’s religious affiliation. A request does not have to be based on a recognized religion, only on an employee’s personal religious beliefs.


- 76 -

If an employee leaves NUWCDIVNPT, any earned, but unused, RCT will be paid to him or her at the hourly rate in effect at the time the work was performed; any advanced time still owed will be reimbursed by the employee though annual leave or repayment of money. RCT cannot be transferred from one activity to another. When administrative leave is granted, RCT is treated in the same manner as other leave types, e.g., annual leave, compensatory time. Note: NUWCDIVNPT employees may attend any religious event of their choice. However, attendance at religious events during duty hours requires use of RCT, annual leave, credit hours, other compensatory time, or leave without pay. Administrative leave will not be granted to employees for the purpose of attending prayer breakfasts or other religious events.

197. OPM website, http://www.opm.gov/oca/worksch/html/reli.htm, “Adjustment of Work Schedules for Religious Observances,” currently states:

...Agencies should require employees to submit a written request for an adjusted work schedule in advance. An employee should specifically state that his or her request for an adjusted work schedule is for religious purposes and should provide acceptable documentation of the need to abstain from work. ...If an employee’s request is approved, a supervisor may determine whether the alternative work hours will be scheduled before or after the religious observance. ...An employee’s request for time off should not be granted without simultaneously scheduling the hours during which the employee will work to make up the time. This provides a clear record of the employee’s adjusted work schedule. An employee should be allowed to accumulate only the number of hours of work needed to make up for previous or anticipated absences from work for religious observances.

198. NAVSEAINST 12000.2, “Timekeeping Policy and Procedures for Headquarters and Program Executive Offices’ Civilian Employees,” states:

Religious Leave ...[A]n employee whose personal religious beliefs require that the employee abstain from work at certain times of the workday or workweek must be permitted to work alternative work hours so that the employee can meet their religious obligation. The employee must notify their supervisor of their religious obligation and request


- 77 -

alternative hours in order to earn religious leave to cover the observance. The supervisor must approve the religious leave earned and may determine whether the alternative work hours will be scheduled before or after the religious observance. The religious leave earned and taken shall be requested and approved via Application for Leave, SF71 or by e-mail. ...When the employee uses the religious time earned for religious observance, it will be recorded as religious time taken on the employee’s automated timesheet. ...Religious leave earned may only be used for religious observances.

199. In a letter of 7 November 2001, in response to NAVINSGEN's request for interpretation of various aspects of this case, the , Plans, Programs, and Diversity, Office of the DASN (CIVPERS/EEO), provided the following:

...[I]t appears that these employees at the Naval Undersea Warfare Center (NUWC) accumulated and used RCT without prior supervisory approval. There are no records that reflect requests for RCT or the subsequent supervisory approval. However, because the RCT appears to have gone unchallenged after the fact, it appears that the lack of management oversight became the norm. Thus, an employee's use of RCT coupled with the absence of objection from management may have become the de facto manner in which RCT got approved for use. The information also indicates that employees accumulated hours of RCT without limit. The information provided indicates that the employees at the Naval Undersea Warfare Center (NUWC) who are the subjects of your inquiry accumulated and used religious compensatory time (RCT) without providing any documentation of their need to abstain from work and without prior supervisory approval. In addition, it appears that on at least one occasion, an employee used RCT to take off from work for a two-week period. These actions, particularly when viewed in light of these same employees' failure to use virtually any annual leave for a seven-year period (annual leave that was subsequently restored to the employees through an unauthorized application of the restored leave provisions), suggest a manipulation of the RCT system. ...The legislative history of 5 USC § 5550a recognizes that the intent of the RCT provision was to grant time off to employees who are members of and adhere to established and traditional tenets or

(b)(7)(C)


- 78 -

teachings of a bona fide religion, body or sect which has historically required its members to refrain from employment at certain times in order to fulfill religious obligations. (Senate Report 95-1143). While the law is not limited in its application to what may be considered "traditional" or "established" religions, it is clear that RCT is not available for non-religious purposes. So, for example, an employee who requests RCT and then appears to plan to use the time to participate in a golf tournament could be asked to further explain the need for RCT. OPM recognized back in 1981 that fraud could not be tolerated in these requests, when it wrote to the HHS IG on May 12th of that year that once an employee requests compensatory time for religious purposes, the agency may not inquire into the matter further unless the request is patently fraudulent, (emphasis added). It is incumbent upon management to ensure that the RCT system is not abused. ...[I]t appears that the employees may have been using RCT as a substitute for annual leave. It is impossible to conclude that they requested the RCT for a legitimate purpose simply because they did not identify the reason they were required to abstain from work. Further, there is an inconsistency with the employees' use of RCT during the same time they were claiming "business exigency" for purposes of requesting restoration of annual leave. It is logically inconsistent for an employee to use substantial amounts of RCT during the same period that a business exigency, for the purposes of 5 USC § 6304, exists. RCT may be approved when it will not interfere with the efficient accomplishment of the agency's mission. A business exigency, by definition, means an employee's presence is required at work or the mission will suffer. Thus, it is hard to understand how RCT can be appropriate during the same period of time that an employee cannot be spared from work due to business exigencies. Therefore, from the evidence presented, it appears that there were two contributing factors to the employees' questionable use of RCT: (1) the absence of managerial oversight, and (2) the employees' apparent willingness to manipulate the system.

Analysis

200. More than 20 years ago, Congress passed a law providing that Federal workers could earn and use compensatory time off to accommodate personal religious beliefs that may "require" them to be absent from the workplace during normal working hours. This is a significant departure from the management prerogative of setting the work schedule, to include scheduling overtime, compensatory time, and leave. Absent a conflict with


- 79 -

performance of the agency's mission, supervisors must permit Federal employees to be absent from work at a time of the employee's own choosing when necessary to accommodate their religious obligations. 201. The subjects in this case assert that once they claim they are taking time off from work for religious purposes, further inquiry into the matter is precluded. We do not agree. Had Congress intended to permit employees to earn and use compensatory time for any reason, it could have written a law that would give employees that right. It did not choose to do so, and we must give effect to the limitations Congress placed on the use of RCT. To that end, we see little practical difference between this law and others that provide a benefit to individuals who satisfy certain conditions. The burden is on those who wish to take advantage of a benefit to demonstrate they qualify for it. It is true that this law involves constitutional questions, but the same can be said of the conscientious objector Selective Service cases of another era. 202. The religious beliefs and convictions of an individual may change over time. Thus, we agree that "sincerity" is not the proper test, if by that one means supervisors should ask questions such as how often an employee goes to confession, whether an employee tithes, or whether an employee is a "member" of a particular church, synagogue, or mosque. But, as with all Government programs, RCT is subject to abuse and must be managed to prevent it. We suggest that, for RCT, supervisors are responsible for determining whether the employee's request is "reasonable" under all the facts and circumstances. Expressed in other terms, supervisors are responsible for making additional inquiries when employee requests appear frivolous or "patently fraudulent." We would maintain, for example, that further supervisory inquiry is appropriate when employees request RCT on the Friday after Thanksgiving, on the 3rd or 5th of July, or for any consecutive period in excess of one or two days. There is little doubt that some employees do misunderstand the law. They mistakenly believe that RCT may be used to take time off from work to participate in any religious activity or "experience," whether or not they perceive they have a "religious obligation" to do so. 203. The first step, therefore, in implementing the law is to ensure that applicable regulations require that requests for RCT be documented in writing, that they be reasonably specific as to the religious requirement, and that they be approved by higher authority. Although OPM and Navy regulations contain such


- 80 -

requirements, the subjects in this case, being NUWC/NUWC DIVNPT's most senior managers, did not comply with these most basic requirements. Had they done so, their supervisors would have seen that most of their requests were frivolous or patently fraudulent. 204. The evidence shows that Dr. Sirmalis, Mr. Keil, and Dr. Dence deliberately used RCT in lieu of annual leave without any regard for its intended purpose. They did so by using RCT to account for nearly every absence from the workplace over a 10 year period, including arbitrarily using RCT to round-out the 40 hours for any given week, vice meeting a specific religious observance. 205. Their pattern of use is remarkably similar to the abusive practices the IG, SSA uncovered shortly after the law went into effect. The subjects have used RCT to fill in the days between mid-week Federal Holidays, such as Independence Day and Thanksgiving, and the weekend. They have used RCT in lieu of sick leave. They have used RCT for vacations and to play golf. It would seem they have used RCT for every conceivable purpose except attendance at mandatory religious observances. 206. Given the high ethical standards to which we hold members of the SES, the subjects' abuses are particularly egregious, in that they stand to financially benefit from them. Over time, their systematic misuse of RCT, in combination with their improper manipulation of BRAC and other leave restoration criteria, has enabled them to accumulate huge balances of annual and restored leave that will be paid out to them upon their retirements. The estimated current retirement value of these balances (as of 2 August 2001) is: Dr. Sirmalis, $250,141 for 3,778 hours; Dr. Dence, $248,419 for 3,752 hours; and Mr. Keil, $195,650 for 2,955 hours. 207. In addition, as OPM suggested, given the Floating-40 system that essentially permitted the subjects to work or not work whenever they chose, we believe subjects had an obligation to schedule their work so that they would seldom, if ever, have had to take specific time off from work to attend religious observances. 208. Although OCPMINST 12250.1 stated that an activity is not to question whether the employee’s personal religious belief is based on a recognized requirement of an established religion, it did not prohibit the supervisor from asking his or her employee to articulate the personal religious belief that requires


- 81 -

abstention from work during specific times. It also did not excuse the employee from answering the question. Moreover, it is reasonable to assume that the identification of the belief, i.e., the religious observance, would be integral to making the request to earn RCT, lest the supervisor have no verifiable basis for approving the request. There is no evidence that Dr. Sirmalis, Mr. Keil, or Dr. Dence ever even attempted to make a request, much less discuss the circumstances with their supervisors. (It is worth noting that the military commanders, to a man, were not even aware of the existence of RCT). Notwithstanding their erroneous assertions that they were exempt from identifying their specific religious beliefs, even to the NAVINSGEN investigators, they could have at least requested approval on the basis of generic religious beliefs. 209. Since the subjects of the investigation have neither sought nor received approval for RCT, nor used RCT for expressed religious purposes, they have not used RCT as intended by the law. 5 CFR § 550.1002 states that the agency shall in each instance grant compensatory time off to an employee requesting such time off for religious observances....” We do not subscribe to the proposition that activities such as participating in a golf tournament, moving, visiting the doctor, or taking family vacations constitute “religious observances.”

Conclusions

210. The allegation is substantiated. 211. Given the fact that the subjects of this investigation routinely earned and used RCT without approval, all of their documented hours of used RCT should be charged to annual leave.

a. Dr. Sirmalis should be charged at least 866.7 hours of annual leave for the RCT he improperly used from 1990 through 17 June 2001. (The RCT usage has yet to be determined for 1992.) Additionally, he should be charged annual leave for any RCT that he has used since 17 June 2001. Moreover, since as an SES he could not properly earn and use regular compensatory time, he should be charged annual leave for the 24.5 credit hours he used in 1994.

b. Mr. Keil should be charged 883.2 hours of annual leave

for the RCT he improperly used from 1993 through 5 July 2001. Additionally, he should be charged annual leave for any RCT that he has used since 5 July 2001. Moreover, since as an SES he could not properly earn and use regular compensatory time, he


- 82 -

should be charged annual leave for the 11.1 credit hours he used in 1993/4.

c. Dr. Dence should be charged 1,548.9 hours of annual

leave for the RCT he improperly used from 1989 through 31 March 2001. Additionally, he should be charged annual leave for any RCT that he has used since 31 March 2001. Moreover, since as an SES he could not properly earn and use regular compensatory time, he should be charged annual leave for the 9.6 credit hours he used in 1993/4.

*****

Allegation #3: That Dr. Sirmalis and Mr. Keil misused their positions by improperly reassigning Dr. Dence, as an SES, to non-SES position, in lieu of taking appropriate rative action to resolve Dr. Dence’s deficient performance. Further, they awarded him a retention bonus in an effort to discourage his disclosure of their own misconduct. As a by-product of reassigning Dr. Dence, was unfairly displaced as and reassigned to a non-supervisory position.

Findings 212. Prior to the reassignment referred to in the allegation above, Dr. Dence was , Weapons Systems ate (Code 80), which was comprised of three departments: Torpedo Systems (Code 81), headed by ; Weapons Technology & Undersea Systems , headed by Dr. , SES-4; and Missile & Platform Systems ( ), headed by GS-15 . [Refs (a) and (h)] 213. In April 1999, accepted assignment to attend the Sloan Fellows Progra ssachusetts Institute of Technology ( ) from June 1999 to June 2000. his was detailed as Acting in his absence. In January 2000, left Code 82 and was reassigned as . [Refs (a), (vv), and (jjjj)] 214. Approximately concurrent with 's January 2000 departure, Dr. Sirmalis directed an internal review of NUWC DIVNPT's torpedo program within Code 80. That review identified leadership deficiencies, most notably associated with Dr. Dence and . Using a green (best), yellow, and red (worst) rating system, the torpedo program review team gave Dr. Dence's executive leadership very low marks. He received no green

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 83 -

ratings at all. The red and yellow marks are summarized as follows: [Ref (a)]

RED: - Link Product Vision with Division and Corporate Vision - Provide Executive Liaison with Navy Product Area Leadership - Provide Executive Liaison with Fleet for Product Area - Provide Executive Oversight for Product Area Program - Accountable for Product Area Performance - Report Critical Product Area Issues/Successes - Responsible for Inter/Intra Product Area Coordination - Complies with NUWC Org. Responsibilities YELLOW: - Provide Product Area Advocacy - Responsible for Product Area Resource Allocation

215. In March 2000, Dr. Sirmalis announced that torpedo program reviews had identified a need to establish a Senior Executive “Torpedo Program Manager” position, at the NUWC headquarters level, and to realign Code 80 within NUWC DIVNPT. Mr. Keil provided implementation details in e-mails of 26 May, 8 June, and 26 June 2000. NUWC DIVNPT's SES of the Engineering, ion Department (Code 70), was designated senior torpedo program manager and assumed additional duties to oversea and coordinate the torpedo programs at both NUWC DIVNPT and NUWC DIVKPT. [Ref (a)] 216. Code 80's realignment included separating from the directorate, but retaining it intact as a department (Code 40) reporting directly to the ED, Mr. Keil. Dr. Dence accepted the position as Code 40 , and was assigned as his Deputy. Upon his return from , Mr. was assigned to a new position as the of Strategi ing and New Business within Code 40. Codes 81 and 82 were combined under a new acting director, pending approval and selection of an SES for the permanent position, and , who had also been criticized by the torpedo program review team, was reassigned.68 [Refs (a) and (g)]

68 By June 2000, was apparently “detailed” out of his department head position. l personnel action reassigning him to a Code 80 staff position did not take place until 25 February 2001. On 18 November 2001, he was reassigned to the Sonar Systems Department (Code 21).

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 84 -

Dr. Dence 217. Dr. Dence stated that the torpedo program review identified funding shortfalls and a “tremendous” difference of opinion between NUWC and the NAVSEA program sponsor (SEA-404). According to Dr. Dence, there were several factors that influenced Dr. Sirmalis to reorganize Code 80, including NAVSEA’s discouragement of SES “layering” and DOD's doctrine that the submarine force should be concentrated on projecting power ashore. [Ref (h), pp. 9, 10, 13, 28, and 29] 218. Dr. Dence stated that Dr. Sirmalis previously tried to influence the management of the torpedo program, to the extent of suppressing Dr. Dence’s own professional initiatives. Dr. Dence believed that the findings of the program review were not accurate; that Dr. Sirmalis did not attach much significance to them; and that there was no nexus between the program review's findings and the reorganization of Code 80. He further stated that Dr. Sirmalis did not hold him accountable for the torpedo program's overall problems. [Ref (h), pp. 19-27] 219. When asked if he felt in any way punished by being taken out of a directorate head position and put into a department head position, Dr. Dence stated: [Ref (h), pp. 32-35]

This was my fourth SES position. I have been SES for 18 years. Almost every year I have...been top-rated. I have had 4 SES positions at NUWC. I won the Presidential rank award....He [Dr. Sirmalis] said, “I really would like you to do this thing...you have the...capacity to do this.” And I saw it as an opportunity and as a challenge....I had reservations. Sure, I didn’t like it....No one likes change. [That it was a demotion]...crossed my mind. I asked him to clarify what is my role going to be, what am I going to do. And I also was looking at many options, including leaving the U.S. Navy and going to work for a private contractor.

220. Dr. Dence stated that he did not convey any ultimatums to Dr. Sirmalis, but did discuss possible conditions of accepting the Code 40 position. He noted that there was some “spill-over” of the concern and frustration that he had previously experienced with Dr. Sirmalis in getting his support in the torpedo program. [Ref (h), pp. 36-38]

I said that if I am going to take that responsibility, I want to make sure the mission of that department reflects our conversations. And that if we need to make investments in order to build the core confidences in that area, that I have your full support....


- 85 -

Dence stated that in approximately 1997, he selected as the , despite Dr. Sirm ns about . Dr. Sirmalis believed that was “too hard on people,” but Dr. Dence disagreed. quently, Dr. Dence arranged for to attend the Sloan Fellows Program at from Ju June 2000.69 Prior to the end of that year of training, Dr. Den to to explain the reorganization possibilities to Dr. Dence stated that was angry that he would not be returning to his depar position and that he believed Dr. Sirmalis had done an injustice to both him and Dr. Dence. Dr. Dence further stated that during his discussions with Dr. Sirmalis about the Code 40 positi s never a mention of the reorganization's impact on [Ref (h), pp. 49-55] 222. Dr. Dence stated that was frustrated because the command had not communicated with him about the fact that it was necessary for him to lose his department head position. [Ref (h), pp. 55-56]

I went to , who was the Head of Personnel, and I said, “Hey, what happens to I mean, he was a department head and now he is not a department head; and Dr. Sirmalis is putting me in this, and I have to talk to I said, “What are his rights?” He said [that] management has a right to re-assign somebody in[to] that position. I said, “Does he have any...rights; does he have an opportunity, if I retire, to become, you know, a department head again?” He said, “No, he does not.”....And when came back and I told him and I said, you know, “Go talk wit ; you know, don’t rely on me; go talk to him yourself and find out.” But he was very upset that they didn’t talk to him, that I was the one that had to convey it, that Juergen [Keil] didn’t come down and even have the courtesy to talk to him, which I conveyed to Juergen....He [Keil] should have gone down and talked to about this. And, but somehow they did not do that.

69 In a letter of 2 Apri nd notified that he was approved to attend the Program fro 1999 through 2 June 2000. On 6 April 1999, signed the trainee agreement and acknowledged that the agreeme t in any way commit the Government to continue his employment. The terms of the agreement did not address whether would return to his department head position upon completion of the

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 86 -

223. Dr. Dence stated that during the Summer and Fall of 2000, following his return from performance as assistant for strategic pl ointing. [Ref (h), p. 57]

When would be at the meetings, came into my office and said to me, “I can’t work anymore; he is an embarrassment to is so angry; he is not able to even understand what we are trying to do.”

224. Dr. Dence stated that he did not know if position description (PD) had been amended to r duties of his new position. Once, in March or April 2001, told Dr. Dence that he did not have a real job. made that statement after refusing Dr. Dence’s request that he give a presentation on the progress of strategic planning to Dr. Sirmalis. ’s reason for refusing was that “he couldn’t stand” Dr. Although Dr. Dence offered to discuss a possible reassignment with him and Mr. Keil, stated he was going on indefinite leave and he did so. , pp. 59-62]

225. opined that the “mechanics of the process” of taking out of the position may have angered him. [Ref (ii), p. 27]

I think the transition, if I were to criticize it, you know, it might have been handled better in terms of letting everybody know what ing on. It may have, you know, helped. I’m not sure when found out that he as no longer a department head....But his reaction was radical.”

226. who believes that his career was “de-railed,” as a r eing “wrongfully deprived” of his position as the , provided the following information.

a. Dr. Dence called him at to inform him of imminent removal from the torpedo program. Upon Dr. Dence’s request, he provided Dr. Dence with input for a presentation Dr. Dence was to give to the torpedo program review team. [Ref (bbb), pp. 13-14]

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 87 -

b. On 4 May 2000, Dr. Dence visited him at to discuss the imminent reorganization of Code 80 and to ask him whether he would like to “come to his staff for a few weeks to assist him with strategic planning.” agreed. remarked that Dr. Dence told him tha could “transition-back in slowly.”70 [Ref (bbb), pp. 16-17]

c. On 12 June 2000, when returned to work, Dr. Dence told him that he was surp . Keil’s e-mail that amounted to announcing that he had lost his job. Dr. Dence discussed various opt , to include the possibility of his telecommuting sev a week. [Ref (bbb), pp. 20-24]

The reorganization that Dave Dence is heading-up now is exactly the same as what I headed-up. And it’s the same money; it’s the same programs; everything is exactly the same. It’s just now Dave’s running it, and I’m out, and I’m on his staff under this new position of of Strategic Planning. d. According to , he has always had outstanding

evaluations, and no one will assert that his performance has ever been inadequate. He was rated “outstanding” on the most recent appraisal and received the “maximum financial reward.” He did, however, “probably” get “cross-wired” with Dr. Sirmalis over a performance issue concerning , who was a friend of Dr. Sirmalis, but a poor performer. In late 1997 or early 1998, removed from his position in , he refused to do something that the ED wanted his department to do. believes that Dr. Sirmalis was upset with the remov . [Ref (bbb), pp. 26-29]

e. stated that Dr. Dence, with one exception,

ignored him: [Ref (bbb), pp. 53-55]

On August 4th, he brought me and a man by the name of ... into his office, and he said basically, “Gentlemen, I would like you to help me formulate a strategy on how I can convince John Sirmalis to give me an annual performance bonus.” He basically stated to me that the retention bonus wasn’t enough. He referred to getting screwed out of $240, because of Joe ’s carelessness....I’m just in disbelief, and I just said to him, I got angry, and I told him, I said, “Dave, you know, what this tells me is you have an insatiable appetite for money, and that you appear very greedy.”

70 interpreted that statement to mean, transition-back int position.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 88 -

Other than that one time in November saying in front of a group of other people, “ I’d like you to develop a strategic plan,” he has ignored me. f. In November 2000, was asked to develop a

strategic plan. [Ref (bbb), p. 43]

And then almost concurrent with that, we started holding meetings with a consultant who used to be the technical director of NUWC.... And we started basically developing the strategic plan as a team, okay. But that was the only thing I was ever formally asked for. And then...I was asked by Dave to present my thoughts on strategic planning, and I did, to the group. g. asserted that he had no responsibilities in

his new position. [Ref (bbb), pp. 35-38, 42]

I’m doing nothing, to be quite honest....My new code is 401....I’ve been ignored....I have been purposely left out of all...meetings on operational issues....I don’t have a PD....I don’t feel good about not having work....I’m not proud of the fact that I’m not working, but at the same time, I didn’t want to be doing anything to help these guys turn around and say, “Yeah, we did do these things.” My job has never been defined, to this day.

Dr. Sirmalis

227. Dr. Sirmalis stated that the circumstances surrounding the reorganization of the Code 80 ate were that: (1) the torpedo program, over time, had suffered reduction in funding from $4 billion dollars per year to $130 million per year; (2) there was a very strong emerging new mission in the missile area; (3) was selected as ED of NUWC DIVKPT; and (4) SECNAV was requesting that SES positions be “de-layered.” [Ref (g), pp. 49, 52, 53, and 57] 228. Dr. Sirmalis stated that although the torpedo program was not in trouble as a result of Dr. Dence, the review team noted deficiencies in Dr. Dence’s management of the program. Dr. Sirmalis explained why Dr. Dence received poor marks. [Ref (g), pp. 58-60]

I put a person in charge of this that wasn’t ever going to give high marks to Dave Dence....I expected to do a technical review of the technical program. He came back with something that had much more to do with what’s the communication flow impasse....I didn’t get what I needed from the organizational

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 89 -

side in terms of “Were we set up right?- Were we operating right?- Were there mitigating circumstances outside?”

229. Dr. Sirmalis stated: [Ref (g)]

a. There was no nexus between the results of the program review and moving Dr. Dence out of the directorate, and Dr. Dence had “no adverse reaction” to being moved from his directorate. Dr. Dence was “not a torpedo man,” and although there were people at NAVSEA who would have liked to have seen Dr. Dence removed from his position, the sponsor never communicated to Dr. Sirmalis that Dr. Dence was a problem or suggested that he be removed from his position. [Ref (g), pp. 61-64, 89-90]

So the opportunity was I wanted to grow this missile area and I knew Dave had a good rapport with the people in the whole missiles area and launchers area....And I had an SES that was missing. So I restructured the position slightly....If I made any mistake in the weapons area, it was not recognizing and understanding from history, which I should have known, that the torpedo crowd won’t accept a non-torpedo person....So part of this shuffle, besides wanting to build a missile area, was good politics and moving him over. b. had been “doing a good job as a department

head from the perspective of just executing status quo.” However, because he was “a good bet for the future,” command sent him to the at . While he was at school, “the whole missile arena had just grown wildly in the submarine force...so it looked like now we should head-off in a different direction.” Dr. Sirmalis also stated that employees sent to the usually return to the command in a different position. [Ref (g), pp. 74 and 81]

When we send somebody to school, it’s always for multiple reasons. One, that we feel the person has the capability to advance in the organization and needs some additional rounding-out skills, etc. So it always implies, as with all of us, that you can always advance and better yourself. And he was somebody worth investing the money and time into....Now normally when somebody goes off to Sloan School and comes back, they may not come back into the same position that they had before. So it’s not a ‘given” that you’re going and you’re coming back in your same position....I think most of the time it doesn’t happen that they come back in the same position. But in the interim, when we were making this change, the whole missile arena had just grown wildly in the submarine force.

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 90 -

230. , NUWC DIVNPT, from August 1998 to September 2000, stated that Dr. Sirmalis, based on his assessment that the torpedo programs, at the existing rate of funding and technical progress, were not going to achieve their objectives, effected the reorganization of Code 80. [Ref (ll), pp. 2-5] 231. recalled that the torpedo program review briefing in early 2000 did not attribute leadership deficiencies to any individuals. However, Dr. Sirmalis and Dr. Dence did not work well together. As Dr. Sirmalis saw problems in the torpedo programs, he became directly involved (“over-managing”) and Dr. Dence felt bypassed and not totally in charge. told that Dr. Dence was “never visible at the program office level” when there was a problem, “”always passing-off to someone else.” [Ref (ll), pp. 8-9, 11-14] 232. was informed about the Code 80 reorganization, but was never consulted about it. However, it was clear that the most effective submarine wartime contribution was its ability to launch cruise missiles. Since “big Navy” was focused on the ability to execute tactical/land attack warfare, “the strike operation under Dr. Dence [in Code 40] had the potential to be an emerging area that could be very important to the Navy, and differentiated from torpedoes.” further stated: [Ref (ll), pp. 16, 18, 20, 21, and 28]

I talked with Dr. Dence quite a bit. And I think he felt he was under a lot of stress. And I wouldn’t think of him as being happy. I think of him as sort of a survivor or a realist. I think that one would say that it [moving him out of Code 80] was sort of a demotion. But I think in a lot of ways he looked at it as that he was never really running the torpedo operation anyway. (John Sirmalis was running the torpedo operation.) And compared to his other peers, he didn’t have as much control over his departments as his other SES division heads. So one might think that in practicality this might have been an opportunity to run something without a lot of interference....It’s really hard to say whether it’s a demotion or a recognition of where he was anyway.

233. stated that he was not consulted about the placement of in Code 40. [Ref (ll), p. 27]

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 91 -

Mr. Keil 234. Mr. Keil corroborated the fact that the internal torpedo program review in January 2000 showed that there were problems associated with “all aspects of the torpedo enterprise.” He also noted the program office in Washington was experiencing turmoil and change. When asked if Dr. Dence’s performance was deficient, Mr. Keil stated: [Ref (qq), pp. 23-24, 29-30]

Dave started to see the potential that was growing in sort of the submarine payload arena at the time, so I think Dave had a lot on his plate, and some of the review mechanisms that might normally exist didn’t occur....There were some things that weren’t happening that you would normally expect to happen. Now, was that a deficiency or was it that the scope of activity that he had was pretty broad and kept him pretty busy? I think that was one factor. I think the other factor is that the torpedo business is really an extremely complicated business and it requires somebody with a lot of sort of detailed knowledge to really help steer that part of the operation. And Dave didn’t grow up in the torpedo world at all. He didn’t come from that kind of a background, so I think that probably made things a little more difficult.

235. Mr. Keil explained his reaction to the less-than-complimentary grades given to Dr. Dence by the torpedo program review team, under “USW Product Executive Leadership Breakout.” [Ref (qq), pp. 31-33]

My reaction generally to this data was that I thought we needed to provide more dedicated leadership to the torpedo end of the business....Is it Dave’s fault that there wasn’t a product vision for torpedoes? It’s an enterprise issue that involves more than just Dave. I mean, Dave can try to help create it, but you got to do that in partnership with the program office and the other players in the process, and like I say, I think there were problems that existed sort of all around the enterprise....I wouldn’t judge it [results of program review] inaccurate, but...it’s sort of a qualitative perspective obtained by a couple of folks, you know, going back to looking at sort of these kinds of leadership responsibilities.

236. Mr. Keil stated that when , former Code 82 head, departed to be ED of NUWC DIVKPT, the command decided to reorganize and combine Codes 81 and 82. The intent was to put the acquisition and technology aspects of the torpedo enterprise under a single SES, who would not be distracted in any way with other aspects of the business. [Ref (qq), p. 37]

(b)(7)(C)


- 92 -

237. Mr. Keil stated that, while was at , , previously , served as the . od-up the Code 40 organization, it was natural to move into the Code 40 Deputy position. Dr. Dence wanted to use “as sort of the primary resource to help him in this strategic direction in building the business base.” [Ref (qq), pp. 44-47]

With Dave’s track record and what I thought was a good, strong relationship between the two individuals, I really saw this as sort of a mentoring opportunity, if you will, where could sort of learn and work with Dave as, you know, Dave sort of worked his magic and helped build the business base....He [Dr. Dence] did indicate to me a couple of times that was becoming, I guess, increasingly unhappy, and I think in the beginning, Dave felt that that was a pretty good arrangement, but as time went on, it apparently wasn’t working out very effectively. And I think Dave felt that heart really wasn’t in doing that, and was, at times, to my understanding, becoming somewhat disruptive in terms of helping go forward.

Personnel Management Advisor

238. , a personnel management advisor, servic explained the reorganization as follows. [Ref (kkkk), pp. 9 and 11]

The Code 40 itself is a renumbered and a renamed organization that has been existing now for a number of years, ever since the Missiles and Launcher Systems Department was established....When we renumbered and renamed this new department, there was almost no structural changes made to the organization. And we did modify a few of the high-level staffs. But basically approximately 95 percent of the organization remained unchanged and continues to operate as it did prior to January. What is different about this organization is that it was broken out from the parent organization, the Weapons Systems ate....We created a small staff which was in my mind perhaps the most significant change. You know, it only affected one individual, but it was a brand new organizational unit and it was for the of Planning and Strategy is my best recollection of the title of the unit. And I believe the code number for that now is 401.

239. stated that started working in Code 40 in approximately June 2000, ugh the reorganization

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 93 -

that established Code 40 come effective until January 2001. As of March 2001, still officially encumbered the position, but the command had started the process of re-describing and rewriting position as . [Ref (kkkk), pp. 12-13, 17]

Technically as we speak, it’s still the same position description. He is still in that position. We have not effectively taken him out of that position description....We’re in the process. We basically have completely rewritten the position. We just have not actually taken the personnel action to officially assign him to it....Dr. Dence is still officially assigned to Code 80. He has not been taken out of his position of Code 80. That’s his permanent assignment. He is, as I understand it, operating as the head of Code 40.

240. sensed that the working relationship between Dr. Dence and Dr. Sirmalis was difficult. He noted that as , was a very dynamic ma at one of his subordinates f type of complaint against him. Dr. Dence supported action to remove the subordinate from a Division He but Mr. Keil seemed to be opposed to that action. surmised that Dr. Dence may have fallen out of favor with Mr. Keil as a result of that action. [Ref (kkkk), pp. 23-27] garding current position in Code 40, stated: , pp. 55-57]

I know a lot of people feel the same way [as I do]. I have a personal high regard for and I think it’s a shame that the Division and the Center doesn’t have a better use of him....Any grade has a range of strength. Even if you’re not in the demonstration project, say you’re a GS-14, okay? Then that GS-14 has a range of strength. There are strong 14s and weak 14s, okay. Well, the range is much greater under demo. In that range I’m talking about a range that goes all the way from a weak 14 all the way up to a strong 15. Okay? When he was the department head for , that was definitely a strong 15. All I have to defend right now for his position over in Code 40 is a 14. All it has to do is be classifiable as an ND-5, which is the entire range of strengths from a weak 14 to a strong 15.

Code

242. stated: [Ref (jjjj)]

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)


- 94 -

a. He was assigned as in

December 1998. He began serving as Acting in approximately May 1999, when left for . In approximately May 2000, he began serving as Dr. Dence’s in Code 40, although his Code 40 position did not become effective officially until January 2001.

b. He was not involved with the decision-making process for the reorganization and therefore cannot attest to the motivations for it. In his opinion, since the functions being performed by Codes 40 and 80 are essentially the same as before the reorganization, the only effective change has been one of leadership. He stated, however, that when Mr. Keil announced the reorganization, Mr. Keil stated that he was expecting Code 40 to become involved with the submarine force's future emphasis on “payloads.”

c. Dr. Dence confided in him that he neither Dr. Sirmalis nor Mr. Keil had been happy with ’s selection as .

d. He recalled that removed one of his subordinates, , from his supervisory role for failure to carry-out a direct order from

243. provided NAVINSGEN with copies of ’s old PD, as well as documentation supporti establishment of ’s new PD. stated that in early April 2001, at Dr. Dence’s request, he prepared a summary of the “roles and responsibilities,” which Dr. Dence then discussed with [Ref (jjjj)]

NAVSEA and DASN Review of SES Positions 244. , Senior Executive Resources Programs, NAVSEA, stated: [Ref (llll)]

a. Dr. Dence has been in the position of , Submarine Warfare, since 1992. On 20 April 2000, the Department of the Navy Advisory Group (DAG) approved the recruitment of an SES to replace . The vacancy was announced on 24 July 2000, the PD was updated, and the position was re-certified as an SES position.

b. PD was more narrowly focused than the

SES PD u Code 40 position. The PD had long been overdue for updating, and the duties and

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C) (b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 95 -

responsibilities constituted only a portion of the proposed PD for the Code 40 position.

c. The Code 40 position was not a “new position” and is not being classified as such by the Assistant Secretary of the Navy (Manpower and Reserve Affairs); rather it is “just an existing position that’s being updated to reflect the current functional duties of that individual.” The only difference between Dr. Dence’s Code 80 position and his Code 40 position is that he was no longer responsible for two-thirds of the directorate and has no responsibility for torpedoes.

d. did not receive the proposed Code 40 PD for

review until approximately August 2001, although it should have been sent to NAVSEA at the same time as the recruitment package for replacing . NUWC DIVNPT “misunderstood what they were supposed to do,” failing to recognize that there were no new SES positions, but, rather, it was “just a reorganization, realignment of duties and functions.” 245. On or about 13 July 2001, and Mr. Keil requested reassignment of Dr. Dence from , Submarine Warfare Systems (Code 80) to Head, Missile and Platforms Systems Department (Code 40).71 The undated Form SF-52 Request for Personnel Action did not contain a proposed effective date for the reassignment. The command submitted the request to NAVSEA, along with a re-description of Dr. Dence’s Code 80 PD. As of 30 January 2002, NAVSEA had not yet taken any official action on reviewing and submitting the re-described PD for approval. On 31 January 2002, NAVSEA provided NAVINSGEN with a copy of the re-description. [Ref (mmmm)]

246. , is a member of the Department of the Navy Advisory Group (DAG). stated: [Ref (nnnn)]

a. The DAG recommends to the Under Secretary of the Navy the approval of newly established SES positions and replacement of SESs in vacated SES positions.

b. In April 2000, the DAG recommended approval of ’s vacated position, expanded in scope to oversee two departments, as an SES position.

71 We note that this action took place in the wake of our initial interviews of the subjects of this investigation in mid-June 2001.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 96 -

c. The DAG did not discuss the Missile and Platforms Systems (Launchers) Department ( ) that was split-out of Code 80 and stood alone as Code 40 under Dr. Dence. Dr. Dence’s Code 40 position was not considered to be either a brand new SES position or a vacated SES position, and therefore would not have been reviewed by the DAG. The reason Code 40 was not being considered a new position is because Dr. Dence, as the Code 80 , was already “associated with it.”

d. While at no time did personally address the issue of the Code 40 position, he was under the impression that it made sense to split the Code 80 directorate and have each of the new organizations encumbered by an SES. He never considered Dr. Dence’s Code 40 position to be a “GS-15 job upgraded to an SES position.” His “impression” was that the Missiles and Launchers mission was substantial enough to warrant being overseen by an SES.

e. does not know why Dr. Dence’s revised PD has, as of this date (after more than a year), not been processed by NAVSEA for re-certification. The re-certification does not need DAG approval. The Deputy Assistant Secretary of the Navy for Civilian Personnel and Equal Employment Opportunity (DASN (CivPers/EEO)) would take the action on NAVSEA’s recommendation.

247. , , Executive Personnel and Leadership Development Division, Office of the DASN (CivPers/EEO), stated that re-described SES positions are forwarded to him for re-classification, also referred to as “re-certification.” If the re-description represents a “significantly different job,” then forwards it to the DAG for approval. [Ref (oooo)]

248. stated that he concurred with Dr. Sirmalis’ proposal to reorganize the torpedo program by dividing it into Code 40 and the “new” Code 80. The Admiral held Dr. Dence accountable for the shortcomings, most notably inadequate communication, in the management of the torpedo program, and Dr. Dence effectively was demoted. [Ref (e), pp. 10, 13, 18, and 19]

When the issue of leadership and technical direction in this current problem came up, it was not outside of my understanding that this is a possibility, that Dr. Dence was not performing the way I would like to have him perform....My reasoning was, and it was actually recommended that way by Dr. Sirmalis, but my reasoning was clear. I

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 97 -

did not have full confidence in Dr. Dence’s ability to fix the problem that he was a part of. And so for me, the best solution was to put over in 80, and put Mr. Dence in 40, because I thought it was the best solution for the Navy....Code 40 is not as much of a technical challenge, not as much of a management challenge, as Code 80; so we perhaps lowered the bar.

249. described the mission of Code 40 as follows. [Ref (e), p. 23]

I don’t see it as a growth area. It is an area that is critical, from the viewpoint that it does do systems that are critical to our submarines, in launching both the cruise missiles as well as the torpedoes. So it has critical impacts, but it’s not cutting edge; it’s not something that I would call, again, a growth industry.

250. he was not part of the decision process to select for the , but he was aware of good work had done and would not have oned the decision to send him to school. Placing in a new position upon his return from was not done any intent of stopping his career and putting him in a dead-end position." [Ref (e), pp. 25, 27, 31, and 32]

Positions are what a person makes of it. In other words, if you’re a strategic planning guy...you can absolutely set the world on fire, if you happen to be the right guy and you’ve got the right subject at the right time, you know, in this case. And there was stuff that happened in that department, that again, I can’t talk about, for classification reasons, that could really be very impactful to the Navy.

Retention Bonus

251. stated that on 26 June 2000, Dr. Dence told him: [Ref (bbb), p. 31]

I didn’t lose. John [Sirmalis] understands my value system. He didn’t want any trouble over me giving up [Code] 80, so he offered me a $10 thousand retention bonus....John is afraid of me....The only thing John understands is fear. John is always very deferential to me. He came to my office; he was quite nervous; his hands were shaking.

252. Dr. Dence stated Dr. Sirmalis had a discussion with him about monetary compensation associated with the Code 40 position. Dr. Dence stated that Dr. Sirmalis told him:

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 98 -

[Ref (h), p. 39]

I know that you are considering a lot of alternatives, Dave, including leaving the Government. I would like you to stay at least one year to see me through this transition because I need you. And I am prepared to offer you a retention bonus of $10,000 if you will stay.

253. Mr. Keil explained that command felt that Dr. Dence was the ideal person to help build the business base for the development of submarine sensors and payloads for the future. Dr. Dence saw that as something “positive” to do, and in an area where he could make a real contribution. So, placing Dr. Dence in Code 40 was in no way punishing him for any poor performance. Mr. Keil stated that he initiated the idea of giving Dr. Dence a retention bonus, because there was a possibility that he would retire. [Ref (qq), pp. 39-43]

If you look at Dave’s overall performance in the other aspects of his organization, he was doing, you know, a very commendable job in those areas. It was this one area that had some items that needed to be strengthened, and needed to have a little more discipline associated with the oversight and the execution.... We were concerned with the potential of Dave leaving, and wanted to make sure that Dave could sort of bring forward this vision of a new business area in terms of the summary payloads, and grow what had been a very focused, you know, launchers and missile integration into a much broader set of programs, and so...I recommended a retention bonus to keep him, and I talked to Dr. Sirmalis about it, and John agreed.

254. In letter of 14 June 2000, Mr. Keil recommended to Dr. Sirmalis that the command offer a retention allowance to Dr. Dence equal to 8.2 percent of his base salary. If approved, the allowance would be reviewed after a year, and a decision made relative to the need to continue it. [Ref (pppp)]

While the challenges facing the Division over the course of the next several years are numerous, I feel that one of our most significant challenges is the retention of a workforce capable of successfully pursuing our business strategies and preserving our core equities. One facet of this challenge, the systemic refreshment of the workforce, is being addressed with an aggressive recruitment effort. The other component of the workforce retention challenge is an attrition of senior management which, if not addressed, will cause the unplanned and untimely loss of critical skills. In this regard,


- 99 -

I am particularly concerned with the potential loss of the Division’s most senior leadership. This element of the workforce comprises the Division’s technical leadership and corporate memory and we cannot risk the loss of these resources. In my judgment, an immediate problem exists relative to Dr. David F. Dence. As you know, we are entering a critical transition period in the weapons area and Dr. Dence is an essential element of this effort. The realignment of Code 80 requires a smooth turnover and transition and David’s eight years of experience with Code 80 program is critical to the successful establishment of the newly realigned organization. Additionally, his new assignment to provide leadership in the area of submarine payload requirements is an emerging growth area for the submarine community that will become vital to the Division. The critical role of defining and integrating the roles of payloads launched from submarines to better impact events ashore and expand the undersea battle space demand experienced leadership. Dr. Dence has 35 years of service and is eligible for an immediate retirement. I realize that, eventually, Dave will retire, but I feel we need to take an action to delay such a decision on his part.

255. stated:

a. Dr. Dence told him that he had a discussion with Dr. Sirmalis concerning a retention bonus. Dr. Sirmalis “hesitated or had reservations about following-through and granting the retention allowance to Dr. Dence.” Dr. Sirmalis apparently dismissed whatever reservations he had. [Ref (kkkk), p. 45]

b. was not aware of any performance deficiency or misconduct in the case of Dr. Dence. He stated that Dr. Sirmalis could well have other legitimate reservations about granting a retention bonus, most simply that it was not necessary to pay a retention allowance in order to retain that individual. [Ref (kkkk), pp. 53-55]

The person could have unique and valuable qualifications and Dr. Sirmalis could still come to the conclusion that the center and the division would be able to manage effectively without those capabilities.

256. There were five other NUWC employees who were offered retention allowances in 2000, one of them also was an SES. The bonus percentages ranged from 8 to 21% of base salary. Dr. Dence received 8%, or $9,776, effective on 2 July 2000; that amount was adjusted to $10,040 on 14 January 2001. In addition,

(b)(7)(C)

(b)(7)(C)


- 100 -

on 24 September 2000, he received a performance award in the amount of $15,000. [Ref (mmmm)] 257. On 19 June 2001, the day Mr. Keil, Dr. Dence, and Mr. were interviewed about Dr. Dence's retention allowance, the NUWC DIVNPT personnel office prepared an SF-52 request to terminate the allowance. On 13 July 2001, the Human Resources Services Center (HRSC) Northeast, Philadelphia, effected the termination. Dr. Dence’s retention allowance, therefore, did not extend beyond one year. [Ref (mmmm)] 258. opined that Dr. Dence was less-than-effective as the of Code 80 and did not deserve a retention bonus. [Ref (vv), pp. 37, 39-42, and 44]

Multiple times he [Dr. Dence] request[ed] a meeting to be held on Saturdays instead [of] on the normal business days, which [was] hard for myself and my people because we need[ed] to come in and, you know, to fit his schedule a lot of times....I do not believe he made an effort to learn the business that we are in. And lots of difficulties had to be resolved without his assistance or facilitation which normally I would expect from my immediate supervisor. From that aspect, you could say he was not highly respected....He would ask me questions that I felt that he really should have understood, given the time he was on the job. You know, if it’s two weeks, if it’s six months, but if it’s after six years, then that’s clear that he has not really caught-up with the business necessary to do our business....The fact that for multiple years he was not catching-up with the technical and the programmatic knowledge of the programs that we were in, and was given a bonus, that’s not fair....If I were the senior official, I would never allow that to happen. And when I was in Newport, I fired senior managers who refused to work. I asked them to leave. And so I will not tolerate this kind of behavior [the kind of behavior exhibited by Dr. Dence]....The condition I was in and also the non-availability of my supervisor when I needed his interaction and advocacy was one of the reasons I left. I did suffer from the style of his operations that I found was non-productive. I did suffer from that consequence.

259. stated that he was never consulted about any bonuses for SES employees under his command, and specifically he was not included in any discussions or decision-making process with respect to giving Dr. Dence a retention bonus. However, deferred approval of SES bonuses to Dr. Sirmalis. [Ref (ll), pp. 26, 27, and 39]

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 101 -

260. Dr. Sirmalis stated that Mr. Keil recommended to him that Dr. Dence and receive retention bonuses. (The recommendation for ’s bonus was based on the fact that he is continually sought after by industry.) The recommendation for Dr. Dence’s bonus was based on the fact that he was considering leaving Federal Service problems. Dr. Sirmalis does not recall whether Mr. Keil discussed the matter with him prior to making the recommendation. Dr. Sirmalis further stated that he did not know if he had discussions with Dr. Dence about whether to approve the recommendation, or about the negotiation over the amount of the bonus. [Ref (g)- pp. 63-67]

I don’t know if I ever did. Generally if I get into a situation like that, I want to understand it better....I talked to Dave Dence a lot; so I don’t recall any specifics on that [matter of approving the bonus], but I don’t doubt that I did, because I did with to understand the circumstances.

[Q. Did you convey to Dr. Dence that you had some reservations about approving the [retention] bonus?]:

A. Well, I look at all of these very carefully because there are limits that we can go on these.

[Q. But did you communicate that to him?]:

A. I don’t recall if I did or not. I wanted to know what his circumstances were. I knew he had – he’s always .

[Q. Did you have reservations?]:

I don’t know that I had any real reservations with it. I wanted to keep him to execute this [Code 40 mission].

[Q. Did he indicate he was looking to leave?]:

A. He indicated that with his , he was considering leaving. And I did want to keep him until at least this organization settled, settled down, and got it on the path that we wanted to go with it.

[Q. Was there a negotiation between you and Dr. Dence with respect to that [retention bonus] amount?]:

A. There was a negotiation. I wouldn’t say it was between me; it was undoubtedly between the [NUWC NPT] Division, but the Division came up with a recommended amount; at least a recommended amount was

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 102 -

discussed with me, and it wasn’t the same amount that we gave John Short. It was significantly less.

[Q. But that discussion did not take place between you and Dr. Dence?]:

A. Not that I can remember.

261. stated that Dr. Sirmalis did not discuss with him the idea of giving Dr. Dence a retention bonus, and he was not aware of the bonus until after it was awarded. [Ref (e), pp. 20-21]

It surprised me, yes. To say the least. I did ask Dr. Sirmalis about it. I can’t remember exactly what he said, but it wasn’t an answer that resonated with me, at least, put it that way....I was surprised that he got the bonus. I didn’t understand why he rated a bonus personally....I wasn’t really in a position of saying whether he rated it or not. But based on what I had seen in performance, and what we had done as a warfare center, it was inconsistent, in my view.

262. did not perceive that Dr. Sirmalis was trying to protect Dr. Dence. [Ref (e), pp. 32-33]

I did not have a perception of that. You know, like I said before, I certainly was surprised that he had submitted and gotten a retention bonus for him. So that was a surprise to me, from the viewpoint that if I had been in that seat, I don’t think he would have been on my list.


263. 5 USC § 5754 authorizes payment of a retention allowance to an employee, if the unusually high or unique qualifications of the employee or a special need of the agency for the employee’s services makes it essential to retain the employee, and the agency determines that the employee would be likely to leave in the absence of a retention allowance. The allowance may not exceed 25 percent of the basic rate of pay. 264. The implementing regulation for 5 USC § 5754 are contained in 5 CFR Chapter 1, Subpart C. a. Paragraph 575.302 authorizes the head of an agency to pay a retention allowance to an employee who holds an SES position.

(b)(7)(C)

(b)(7)(C)


- 103 -

b. Paragraph 575.304 permits an agency to pay a retention allowance to an employee, if the employee is likely to leave the Federal service for any reason. c. Paragraph 575.305(b) provides that each determination to pay a retention allowance shall be reviewed and approved by an official at a higher level than the official who made the initial decision.

d. Paragraph 575.305(c) spells out the criteria for payment:

(1) It shall be based on a written determination that the unusually high or unique qualification of the employee or a special need of the agency for the employee’s services make it essential to retain the employee, and that, in the absence of such an allowance, the employee would be likely to leave the Federal service.

(2) The determination shall be based on a written

description of the extent to which the employee’s departure would affect the agency’s ability to carry out an activity or perform a function that is deemed essential to the agency’s mission.

(3) Factors to be considered in determining whether an

allowance should be paid and the amount of the payment include: the success of recent efforts to recruit candidates and retain employees with similar qualifications; and the availability in the labor market of candidates for employment who could perform the duties of the position. e. Paragraph 575.306(c) provides that an agency may

continue payment of a retention allowance as long as the conditions giving rise to the original determination to pay the allowance still exist. 265. The command’s policy on retention allowances is contained in NUSC memorandum 12351 Ser 408/187 of 5 July 1994, as amplified by Code 583 memorandum of 27 August 1996, Subj: BRAC Relocation Bonus/Retention Allowance Policy. Recommended criteria includes importance of the position, impact if not filled, special qualifications, and candidate availability from both within and outside the command.

Retention Allowances [RA] will normally be considered for critical positions at the GS/GM-13 and above level when a highly qualified employee is likely to leave his or her position for employment outside of the Federal Government. All RA determinations will be


- 104 -

made on a case-by-case basis using the procedures and guidance contained in Attachment 1. RAs will be paid at an hourly rate during the period of time an employee receives basic pay. An RA, once authorized, may continue to be paid for as long as the conditions which necessitated the initial authorization exist. At least annually, however, RAs must be reviewed to determine whether the payment is still warranted. An RA may be terminated or reduced when conditions no longer warrant payments.

Analysis

266. To address deficiencies in the torpedo program, NUWC reorganized in a way that did not appear unreasonable. Dr. Dence‘s management was weak in one of the three departments in the Code 80 ate, which may be attributed in par s lack of technical background in that area. Aside from ’s opinion, there is no evidence that Dr. Dence’s overall performance was seriously deficient. There is also no evidence that his placement in Code 40 was a form of discipline, although some witnesses considered it a demotion, of sorts. It is significant that Dr. Dence was considering retirement from Federal Service at a time when command needed his experience to be applied to a new technical direction, in spite of the fact that did not consider it a “growth area.” In that context, the retention allowance was not unreasonable, and there is no evidence that it was awarded to Dr. Dence to discourage his disclosure of any misconduct. 267. The command, however, was administratively negligent, as it did not effect the personnel actions pursuant t reorganization in a timely fashion. Dr. Dence and officially retained their Code 80 positions for a they were no longer used in those positions. That fact, coupled with apparently less-than-adequate communication between upper management and contributed to his frustration and perception that management had not effected the new organization in good faith. 268. Notwiths inistrative shortcomings, there was no agreement that would retain his Department Head position upon his return from Nonetheless, to lose supervision of a department and find himself working indirectly for his former Deputy was certainly not an easy adjustment. While he understandably questioned the command's motivation for the realignment described above, as well as for the concomitant award of a retention bonus to Dr. Dence, there were otherwise legitimate reasons for these actions.

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 105 -

Conclusion

269. The allegation is unsubstantiated.

*****


- 106 -

Attachments

1. NAVINSGEN Questions for 2nd Dr. Dence Interview 2. DASN (CIVPERS/EEO) ltr to NAVINSGEN of 7 Nov 01 3. DASN (CIVPERS/EEO) ltr to NAVINSGEN of 9 Nov 01

References (a) NAVSEA ltr 5041 Ser OON/296 of 18 Sep 00 (b) NAVINSGEN ltr 20000836 Ser N5/1749 of 14 Sep 00 (c) e-mail to of 19 Jun 01 (d) ail to of 11 Sep 01 (e) C. Transcription of Interview of 25 Jun 01 (f) C. Transcription of Interview of 14 Aug 01 (g) J. Sirmalis Transcription of Interview of 21 Jun 01 (h) D. Dence Transcription of Interview of 19 Jun 01 (i) DFAS Pensacola spreadsheets of leave balances (j) J. Transcription of Interview of 20 Sep 01 (k) NUSCINST 12610.1B of 23 Aug 89 (l) DFAS-DE/FNAL memo of 16 Feb 95 (SES Accumulation of Leave) w/ Employee

History Reports, Qtr ending 18 Mar 95, ICO J. Sirmalis & D. Dence (m) Extracts from BRAC-91/93/95 reports (n) Transcription of Interview of 18 Jun 01 (o) NAVFAC Website: Base Realignment and Closure (p) CNO ltr Ser 09B22/8U509522 of 20 Apr 98 w/ ref (a) (q) Personnel Action History for J. Sirmalis (r) Personnel Action History for J. Keil (s) Personnel Action History for D. Dence (t) J. memos 12630 Ser 508/129&187 of 22 May 95 & 6 Jul 95 (u) Division BRAC Staff (v) BRAC restored leave balances (w) K. e-mail of 13 Nov 00 (x) MFR of 5 Oct 01; Subj: telcon N. (y) J. memo 12630 Ser 408/429 of 22 Dec 94 (z) J. Keil e-mail of 13 Nov 00 w/responses (aa) J. memo 12630 Ser 508/129 of 22 May 95 (bb) J. memo 12630 Ser 758/306 of 29 Dec 97 (cc) J. Keil memo Ser 801/1 of 5 Jan 98 (dd) J. Keil memo Ser 901/4 of 20 Jan 99 (ee) J. Keil memo Ser 001/2 of 25 Jan 00 (ff) J. Keil memo Ser 101/4 of 30 Jan 01 (gg) J. Sirmalis Transcription of Interview of 30 Aug 01 (hh) DOD CPMS memo of 30 May 95 (ii) J. Transcription of Interview of 12 Jul 01 (jj) NUWC internal e-mail, 20 Oct-20 Dec 99, re: Y2K restored leave hours

w/lists of Y2K officials (kk) J. Sirmalis Transcription of Interview of 12 Jul 01

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 107 -

(ll) W. Transcription of Interview of 9 Jul 01 (mm) J. memo of 11 Aug 94 (Restoration of Leave) (nn) J. Transcription of Interview of 19 Jun 01 (oo) E. Transcription of Interview of 18 Jun 01 (pp) B. Transcription of Interview of 9 Jul 01 (qq) J. Keil Transcription of Interview of 19 Jun 01 (rr) J. Sirmalis memo 80:DFD:djd Ser 980/5 of 14 Jan 99 (ss) D. Dence memo 80:DFD:djd Ser 980/3 of 14 Jan 99 (tt) NAVINSGEN tabulated data re: RCT used (“CA”) (taken from Dr. Sirmalis’ timecards and desktop calendars) (uu) NAVINSGEN tabulated data re: RCT used (“CA”) (taken from Dr. Dence’s timecards and desktop calendars) (vv) J. Transcription of Interview of 6 Aug 01 (ww) J. Sirmalis memo 40:DFD:lsb Ser 140/3 of 16 Jan 01 (xx) D. Dence memo40:DFD:lsb Ser 140/2 of 16 Jan 01 (yy) N. Transcription of Interview of 19 Jun 01 (zz) D. Transcription of Interview of 16 Oct 01 (aaa) J. Transcription of Interview of 16 Oct 01 (bbb) P. Transcription of Interview of 21 Feb 01 (ccc) M. MFR of 13 Sep 01; Subj: phoncon D. Dence’s Counsel (ddd) NAVINSGEN tabulated data re: RCT used (“CA”) (taken from Mr. Keil’s timecards and desktop calendars) (eee) J. Keil e-mail of 12 Nov 98 w/J. response of 13 Nov 98 (fff) Record of Interview of 25 Oct 01 (ggg) Record of Interview of 24 Sep 01 (hhh) MFR of 14 Aug 01; Subj: phoncon (iii) Annual Leave/RCT Analysis, 1984 through 1993 (jjj) P. Transcription of Interview of 10 Jul 01 (kkk) J. is medical appointments and golf tournaments (lll) Inconsistent timecard annotations ICO J. Sirmalis (mmm) Employee History Rpt, Quarter ending 21 Dec 96 (extract) (nnn) J. Sirmalis timecard for period ending 26 Dec 98 (ooo) J. Sirmalis timecard for period ending 2 Jan 99 (ppp) J. Sirmalis timecard for period ending 20 Feb 99 (qqq) J. Sirmalis timecard for period ending 19 Aug 00 w/corresponding desktop calendar (rrr) J. Sirmalis desktop calendar, 9-14 Oct 00 (sss) J. Sirmalis timecard for period ending 28 Aug 99 w/corresponding desktop calendar (ttt) J. Sirmalis timecard for period ending 14 Nov 98 w/corresponding desktop calendar (uuu) J. Sirmalis timecard for periods ending 16 Aug 97 and 23 Aug 97 w/corresponding desktop calendar (vvv) J. Sirmalis desktop calendar for 26/27 Aug 96 w/timecard for period ending 31 Aug 96 (www) J. Sirmalis desktop calendar for week ending 6 Oct 96 w/appended correspondence

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)


- 108 -

(xxx) J. Sirmalis timecard for period ending 27 Apr 96 w/corresponding desktop calendar and correspondence (yyy) Examples of RCT used during extended periods of absence and medical

appointments ICO J. Keil (zzz) J. Keil employee history report for quarter ending 16 Sep 95 & desktop

calendar, 28-31 Aug 95; J. Keil timecard for period ending 25 May 96 and desktop calendar, 20-26 May 96; J. Keil timecard for period ending 19 Jul 97 and desktop calendar, 17-19 Jul 97

(aaaa)J. Keil timecards for periods ending 10 Mar 01, 16 Jun 01, & 7 Jul 01 (bbbb) Transcription of Interview of 10 Jul 01 (cccc RCT usage, 1994-1998 (dddd)J. Keil Transcription of Interview of 12 Jul 01 (eeee)D. Dence timecards for periods ending 18 Mar 00 and 23 Jan 99 w/corresponding quarterly employee history rpts; examples of RCT used

du xtended periods of absence & medical appointments ICO Dr. Dence (ffff)P. Transcription of Interview of 11 Jul 01 (gggg)D. Transcription of Interview of 9 Jul 01 (hhhh)D. Dence quarterly history rpts and/or timecards for periods ending 3 Aug 96, 8 Jul 95, 29 Aug 98, 13 Feb 99, 12/19 Jun 99, 3 Aug 96, 16

May 98, 23 May 98, 31 Mar 01, 24 Dec 9 5 (iiii) MFR of 10 Jul 01 w/attached Transcription of Interview of 9 Jul 01 (jjjj) MFR of 13 Aug 01; Subj: Transcription of Interview

of 14 Mar 01 and supporting documentation re /40 PDs (kkkk)R. Transcription of Interview of 20 Mar 01 (llll)T. Transcription of Interview of 01 Oct 01 (mmmm)Undated Form SF52/proposed Code 40 PD re-description/old Code 80 PD (nnnn) MFR of 30 Jan 02; Subj: telcon (oooo) MFR of 31 Jan 02; Subj: telcon (pppp)NUWC ED ltr 12500 Ser 058/37 of 14 Jun 00 w/documentation

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

(b)(7)(C)

office of the naval inspector general case number: 20000836

Documents