**United States Court of Appeals for the Federal Circuit**

03-3288

JEFFREY M. HATHAWAY,

> Petitioner,

v\.

DEPARTMENT OF JUSTICE,

> Respondent.

[Thomas G. Roth]{.underline}, of West Orange, New Jersey, argued for
petitioner.

[Brent M. McBurney]{.underline}, Attorney, Commercial Litigation Branch,
Civil Division, United States Department of Justice, of Washington, DC,
argued for respondent. With him on the brief were [Peter D.
Keisler]{.underline}, Assistant Attorney General; [David M.
Cohen]{.underline}, Director; and [Donald E. Kinner]{.underline},
Assistant Director. Of counsel on the brief was [Toby D.
McCoy]{.underline}, Senior Attorney, Drug Enforcement Administration, of
Washington, DC. The principal attorney was [Claudia Burke]{.underline},
Civil Division.

Appealed from: United States Merit Systems Protection Board

United States Court of Appeals for the Federal Circuit

03-3288

JEFFREY M. HATHAWAY,

> Petitioner,

v\.

DEPARTMENT OF JUSTICE,

> Respondent.

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

> DECIDED: September 16, 2004

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

Before SCHALL, GAJARSA, and DYK, [Circuit Judges]{.underline}.

SCHALL, [Circuit Judge]{.underline}.

Jeffrey M. Hathaway petitions for review of the final decision of the
Merit Systems Protection Board (\"Board\") sustaining his removal from
employment with the Department of Justice\'s Drug Enforcement
Administration (\"DEA\" or \"agency\"). [Hathaway v. Dep\'t of
Justice]{.underline}, No. BN-0752-01-0215-I-2 (M.S.P.B. June 26, 2003).
In its final decision, the Board denied Mr. Hathaway\'s petition for
review of the initial decision of an administrative judge (\"AJ\")
upholding all three charges brought by DEA, as well as the penalty of
removal. [Hathaway v. Dep\'t of Justice]{.underline}, No.
BN-0752-01-0215-I-2 (M.S.P.B. Apr. 17, 2002) (\"[Initial
Decision]{.underline}\").

Because we conclude that only one of the three charges against Mr.
Hathaway is supported by substantial evidence, the decision of the Board
sustaining his removal is reversed. The case is remanded to the Board
for further proceedings relating to an appropriate penalty for the
remaining charge.

BACKGROUND

I.

At the time of his removal, Mr. Hathaway was employed as a Criminal
Investigator, GS-9. In that position, he worked as a vehicle fleet
manager in the Boston, Massachusetts office of DEA. [Initial
Decision]{.underline} at 1. He was removed from his position based on
three charges relating to his application for employment with DEA: (1)
conduct prejudicial to DEA, (2) omission of material information from
official documents, and (3) false statements. [See]{.underline}
[id.]{.underline} at 2-6.

The sequence of events that led to Mr. Hathaway\'s removal began in
1996. During that year, he applied for employment with several federal
law enforcement agencies, specifically the United States Customs
Service, the United States Marshals Service,[^1] the Federal Bureau of
Investigation (\"FBI\"), the Immigration and Naturalization Service
(\"INS\"), and DEA, where he sought to be an investigator.

In May of 1996, Mr. Hathaway underwent a polygraph examination in
connection with his FBI application. Both the polygraph examination and
the accompanying written application presented questions designed to
ensure that any past illegal drug use by the applicant fell within FBI
guidelines. Uncertain about what qualified as \"use,\" Mr. Hathaway
asked for clarification. According to Mr. Hathaway, he was told to
consider \"any and all\" instances that he was around illegal drugs as
\"use.\" Applying this definition to his personal experience, Mr.
Hathaway confirmed that his use of marijuana fell within the FBI\'s
acceptable range by initialing the statement on the written application,
\"Applicant cannot have used cannabis more than fifteen (15) times in
his life.\" Mr. Hathaway was then interviewed by FBI Special Agent
(\"SA\") Matthew Cronin, at which time he indicated he had complied
fully with FBI guidelines concerning the use or sale of illegal drugs.
Mr. Hathaway passed the polygraph examination.

By letter dated June 24, 1996, the FBI informed Mr. Hathaway that he
would not be offered a position. The letter did not specify why his
application had been denied:

> FBI appointments are offered on a very selective basis due to the
> large number of applicants and the limited number of positions
> available. Each application, therefore, receives a thorough review and
> each candidate\'s qualifications are carefully weighed.
>
> In reaching any decision, information from a variety of sources is
> considered. These sources include your application itself, comments
> obtained during the investigation and public source records. The
> choices between the many qualified candidates are difficult ones, and
> I regret that we are unable to offer you a more favorable decision.

Believing that he had been rejected on account of a meritless assault
charge,[^2] Mr. Hathaway requested reconsideration of his application in
July of 1996.

During this same period, Mr. Hathaway pursued employment with INS. As
part of his application to that agency, he was again questioned about
past illegal drug use. On September 12, 1996, Mr. Hathaway submitted a
Standard Form 86 (\"SF-86\") providing general background information,
including a description of his past drug use (\"1996 INS SF-86\"). On
this application, when asked the \"number of times\" he had used illegal
drugs, Mr. Hathaway wrote that between June, 1991, and December, 1991,
he had used marijuana \"no more than 10 times.\" In November of 1996,
INS hired Mr. Hathaway as an immigration inspector.

On May 9, 1997, Mr. Hathaway was notified that the FBI had again
rejected his application. Still believing the assault charge to have
been the reason for his rejection, Mr. Hathaway sought additional
explanation from the FBI. He was told by FBI personnel to obtain
additional work experience, further his education, learn another
language, and reapply at a later date. Nevertheless, in an effort to
determine the reasons for his rejection, Mr. Hathaway filed a Freedom of
Information Act (\"FOIA\") request with the FBI.

Although employed by INS, Mr. Hathaway continued to seek a position as
an investigator with DEA. On June 6, 1997, he submitted a SF-86 to that
agency (\"1997 DEA SF-86\"). In it, he provided a response to the
illegal drug use question that allegedly differed from the one he had
given to the FBI. Apparently because he now understood that \"use\"
referred only to actual consumption, Mr. Hathaway wrote that in June of
1991, he had used marijuana five times. Polygraphed once more, Mr.
Hathaway passed the illegal drug use question. As part of the DEA SF-86,
Mr. Hathaway also was required to disclose other instances where he had
been the subject of a federal background investigation. In the space
provided, Mr. Hathaway listed the 1996 application to INS and his
application to the Marshals Service in April of 1994. However, he did
not disclose the unsuccessful FBI application. DEA hired Mr. Hathaway in
October of 1997.

In early 1998, Mr. Hathaway decided to apply for the position of special
agent within DEA. On February 19, 1998, he submitted an additional SF-86
(\"1998 DEA SF-86\"). He again stated that he had used marijuana five
times in June of 1991. In the section pertaining to his investigations
record, Mr. Hathaway listed the 1994 U.S. Marshals, 1996 INS, and 1997
DEA applications, but again omitted the FBI application. On August 7,
1998, Mr. Hathaway submitted to another polygraph examination with DEA.
He passed, after answering negatively the question, \"Have you
intentionally withheld any information from your drug use statement?\"
Mr. Hathaway was hired as a special agent in the fall of 1998, and began
training at the DEA Academy in Quantico, Virginia, in February of 1999.

Within days of his arrival at the DEA Academy, however, an altercation
at a bar in Georgetown involving one of his classmates changed the path
of Mr. Hathaway\'s career at DEA. Although Mr. Hathaway was cleared of
any wrongdoing in the incident, he was immediately reassigned from the
Academy to DEA\'s Boston office. There, over a period of approximately
two years, he worked in the Technical Operations Division and as vehicle
fleet manager, with the expectation that he would eventually return to
the Academy in a future class. In 1999, DEA\'s Office of Professional
Responsibility (\"OPR\") commenced an investigation of alleged
inconsistencies in Mr. Hathaway\'s various SF-86 applications. The
alleged inconsistencies related to his past illegal drug use and prior
applications with government law enforcement agencies. Mr. Hathaway was
twice interviewed by OPR about these alleged inconsistencies.

II\.

On January 23, 2001, Joel K. Fries, the deciding official for the Human
Resources Division of DEA (\"Human Resources\"), notified Mr. Hathaway
that he was proposing his removal from his current position. Mr. Fries
based his proposed removal action on three charges: (1) conduct
prejudicial to DEA; (2) omission of material information from official
documents; and (3) false statements. Each charge was supported by
several independent specifications.[^3]

For charge 1, there were three specifications relating to alleged
inconsistent statements made by Mr. Hathaway. Specification 1 cited an
inconsistency between Mr. Hathaway\'s purported statement to SA Cronin
during his May 1996 FBI polygraph examination \"that \[he\] had used
marijuana on 15 occasions during the period of 1990 to 1992,\" and his
statement on the 1996 INS SF-86 \"that \[he\] had used marijuana 10
times during the period from June 1991 to December \[19\]91.\"
[Id.]{.underline} at 2-3. Specification 2 noted Mr. Hathaway\'s 1997 DEA
SF-86, where he \"stated that \[he\] had used marijuana 5 times in June
1991,\" and charged Mr. Hathaway based on an asserted inconsistency
between that statement and his previous statements to SA Cronin and on
his 1996 INS SF-86. [Id.]{.underline} at 3. Specification 3 was prompted
by Mr. Hathaway\'s statement on his 1998 DEA SF-86 \"that \[he\] used
marijuana five times in June 1991.\" [Id.]{.underline} Mr. Fries charged
that this assertion was inconsistent with Mr. Hathaway\'s earlier
statements to SA Cronin and on his 1996 INS SF-86.

The second charge brought against Mr. Hathaway was omission of material
information from official documents. Two specifications supported this
charge; both related to Mr. Hathaway\'s failure to disclose his FBI
application to DEA and INS in his application for employment with those
agencies. Specification 1 charged Mr. Hathaway with \"omitt\[ing\] the
material fact that \[he\] had been the subject of a \[background
investigation\] by the FBI which \[he\] knew might not have been
favorable\" from his 1997 DEA SF-86. Specification 2 charged Mr.
Hathaway with that same omission from his 1998 DEA SF-86.

Charge 3, false statements, was the most serious of the three charges.
All four specifications in the charge were premised on DEA\'s claim that
Mr. Hathaway knew, from his FBI correspondence and FOIA request, that he
had been rejected by the FBI because of his \"repeated pattern of poor
judgment and abuse of position.\" Therefore, when Mr. Hathaway later
denied knowledge of the reasons for his rejection, those denials
amounted to false statements. Statements made by Mr. Hathaway in his two
interviews with OPR were the focus of charge 3.

Specifications 1 and 2 grew out of Mr. Hathaway\'s sworn statement to
OPR investigators on September 7, 1999. The following statement, made in
that interview, formed the basis for the first specification: \"I
applied to the FBI. I didn\'t get that job. They didn\'t give me a
concrete reason. I applied for the Freedom Information, and that
basically was -- they didn\'t give me any reason why I didn\'t get the
job.\" Specification 2 recounted a similar statement from the September
7 interview:

> I received a short letter that said, \"Sorry, you\'re not selected at
> this time.\" So from there, I filed with the Freedom of Information
> Act to find out why I wasn\'t selected, and it was basically useless
> information that I got. It didn\'t specifically say why I didn\'t get
> the position.

Specifications 3 and 4 grew out of a second interview Mr. Hathaway had
with OPR investigators on July 7, 2000. Specification 3 referred to the
portion of that interview where OPR investigators asked Mr. Hathaway why
he had \"fail\[ed\] to inform the Drug Enforcement Administration that
\[he\] had been the subject of a background investigation by the
FBI\[.\]\" Mr. Hathaway responded that

> \[t\]here\'s no real reason I\'ve never listed any of the FBI. I\'ve
> never had any negative confrontation with the FBI or nothing negative
> ever resulted in that. There was no explanation why I -- I didn\'t
> list that. Just reading this, I mean it seems like I at the point
> listed, you know, everything that I\'ve ever applied for, whether it
> got left off or whatnot. There\'s no bearing of why I left it off.
> I\'ve never had, you know, I never had a negative reason to leave it
> off. It doesn\'t make sense.

Specification 4 recited a similar question-and-answer:

> \[OPR Investigator\]: To recap---and you tell me if this is a fair
> statement---you\'re unaware of any negative information uncovered
> about you from the background investigation done by the FBI. Is that
> correct?
>
> \[Mr. Hathaway\]: Correct.

Because Mr. Hathaway was purportedly aware of specific negative
information developed in the course of his FBI background investigation,
DEA charged that the above statements were falsehoods.

By letter dated February 26, 2001, Mr. Hathaway responded to the three
charges against him. On July 31, 2001, a new deciding official for Human
Resources, James F. Getz, found \"that the charges \[we\]re fully
supported by the evidence,\" and that Mr. Hathaway\'s removal was
\"warranted . . . to promote the efficiency of the service.\" Mr.
Hathaway\'s removal was effective August 3, 2001.

III\.

Mr. Hathaway timely appealed his removal to the Board. Following a
hearing, the AJ to whom the appeal was assigned issued an initial
decision sustaining the removal. On the first charge, conduct
prejudicial to DEA, the AJ found that \"it \[was\] clear from the fact
of the various SF-86s submitted by the appellant that the information he
provided to the questions pertaining to drug usage was, in fact,
different.\" [Initial Decision]{.underline} at 9. This inconsistency
was, in the AJ\'s view, prejudicial to DEA because it \"minimized \[Mr.
Hathaway\'s\] value as a future government witness in drug prosecutions
and, by extension, his usefulness to the DEA whose agents are in the
business of investigating drug cases and ultimately testifying in those
cases.\" [Id.]{.underline} at 11. On this point, the AJ relied on the
testimony of Robert Spelke, the Associate Chief Counsel of DEA\'s
Domestic Criminal Law Section. Mr. Spelke was responsible for DEA
compliance with [Giglio v. United States]{.underline}, 405 U.S. 150
(1972), a Supreme Court case establishing that investigative agencies
must turn over to prosecutors, as early as possible in a case, potential
impeachment evidence with respect to the agents involved in the case.
Under [Giglio]{.underline}, the prosecutor then exercises his or her
discretion as to whether that impeachment evidence is submitted to the
defense. Mr. Hathaway\'s inconsistent statements, in Mr. Spelke\'s
opinion, would render him a \"[Giglio]{.underline}-impaired\" agent of
marginal value to DEA.

The AJ also sustained the second charge, omission of material
information from official documents. As seen, this charge related to Mr.
Hathaway\'s failure to disclose on his 1997 and 1998 DEA SF-86s his 1996
application for employment with the FBI. Before the AJ, Mr. Hathaway did
not dispute the omission, but instead argued that it was inadvertent.
The AJ found that an unintentional omission was, on its own, sufficient
to support the charge, noting that \"the appellant\'s explanation that
he inadvertently omitted the information may be relevant for purposes of
penalty mitigation, but such evidence does not exonerate the appellant
from the charged misconduct where intent is not an essential element of
the charge.\" [Id.]{.underline} at 12.

The AJ then reviewed the charge of false statements. The AJ correctly
observed that, in order to sustain this third charge, the agency had to
\"prove by preponderant evidence that the employee provided incorrect
information and that the incorrect information was provided with the
intent to deceive or mislead the agency.\" [Id.]{.underline} at 13
(citing [Deskin v. United States Postal Serv.]{.underline}, 76 M.S.P.R.
505, 510 (1997)). Applying this standard, the AJ found that only two of
the four specifications, specifications 3 and 4, were supported.[^4] As
noted above, these specifications grew out of Mr. Hathaway\'s interview
with OPR investigators on July 7, 2000, in which he stated that he was
not aware of any negative information about him in the FBI
investigation. From Mr. Hathaway\'s FBI rejection letters, the AJ
surmised that Mr. Hathaway must have known \"negative information was
floating around which may have impacted his chances at the FBI.\"
[Id.]{.underline} at 16. In that case, Mr. Hathaway\'s statements that
he was aware of \"nothing negative\" in his FBI application would be, as
the AJ found, \"patently false.\" [Id.]{.underline} The AJ then
proceeded to find that Mr. Hathaway had intentionally concealed this
negative information from DEA. Specifically, the AJ pointed to Mr.
Hathaway\'s failure, subsequent to his FBI rejection, to list the FBI
investigation on his applications to other federal agencies. Looking at
the totality of the circumstances, the AJ concluded that \"it is clear
that once the appellant did not land his \'dream job\' with the FBI,
most likely because of negative information acquired during the
background investigation, \[he\] made a calculated decision not to
disclose his contacts with the FBI to any other law enforcement agencies
to which he applied.\" [Id.]{.underline} at 18.

Although the AJ had found two of the four specifications in the most
serious charge, false statements, to be unsupported, he nevertheless
concluded that the duplicity of Mr. Hathaway\'s actions justified his
removal: \"In the final analysis, because the appellant\'s misconduct
was serious and strikes to the very heart of his duties as a Criminal
Investigator and because a law enforcement officer is held to a higher
standard of conduct than other employees . . . removal was reasonable.\"
[Id.]{.underline} at 20. The penalty was therefore sustained.

This appeal followed after the Board denied Mr. Hathaway\'s petition for
review for failure to meet the criteria for review set forth in 5 C.F.R.
§ 1201.115. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(9).

ANALYSIS

I.

We review the Board\'s decision to ensure that it is not (1) arbitrary,
capricious, an abuse of discretion, or otherwise not in accordance with
law; (2) obtained without procedures required by law, rule, or
regulation having been followed; or (3) unsupported by substantial
evidence.  5 U.S.C. § 7703(c) (2000); [Stearn v. Dep\'t of the
Navy]{.underline}, 280 F.3d 1376, 1380 (Fed. Cir. 2002). Mr. Hathaway
challenges the Board\'s decision to sustain charges 1 and 3.

II\.

We turn first to charge 1, conduct prejudicial to DEA. Here, in both
specifications, DEA alleged that Mr. Hathaway had inconsistently
portrayed the extent of his illegal drug use. The AJ described the
conflicts in Mr. Hathaway\'s descriptions of his drug use as
\"undisputed.\" [Initial Decision]{.underline} at 8. The AJ understood
Mr. Hathaway to have made the following conflicting statements: (1) that
he \"\'personally experienced\' marijuana [on 15
occasions]{.underline}\" (FBI polygraph examination); (2) that he \"used
marijuana [10 times]{.underline}\" (1996 INS SF-86); and finally (3)
that he \"used marijuana [5 times]{.underline}\" (1997 and 1998 DEA
SF-86s). [Id.]{.underline} Significantly, Mr. Spelke\'s opinion with
respect to Mr. Hathaway\'s [Giglio]{.underline} status was conditioned
on this view of the facts:

> \[M\]y understanding is that on the SF-86\'s, they\'re sworn
> statements. [And my understanding from the reading the record is that
> Mr. Mr. Hathaway said, at one point it was 15 times, 10 times, and
> five times]{.underline}, if I\'m not mistaken. Somewhere along the
> line, something\'s inconsistent there, and I would disclose that, yes.

(emphasis added).

We do not agree with Mr. Spelke\'s and the AJ\'s characterization of Mr.
Hathaway\'s statements. Before his FBI polygraph examination, Mr.
Hathaway initialed that he had used illegal drugs \"[no more
than]{.underline} 15 times\" (emphasis added); at the same time, on the
1996 INS SF-86 he stated that he had used illegal drugs \"[no more
than]{.underline} 10 times\" (emphasis added). The only instance in
which Mr. Hathaway provided a definitive figure, rather than a range,
was on the 1997 and 1998 DEA SF-86s. There, he specified that he had
used illegal drugs five times. The number five falls within
[both]{.underline} the \"no more than 15\" and \"no more than 10\"
ranges. There is no inconsistency or conflict among the figures provided
by Mr. Hathaway to the various agencies.[^5]

The government effectively conceded this point at oral argument. When
pressed by the court, counsel admitted that \"5,\" \"no more than 10,\"
and \"no more than 15,\" were not inconsistent. Without inconsistency,
there could be no prejudice to DEA. Confronted with this problem, the
government agreed that \"\[a\]rguably, yes,\" charge 1 had to be
dismissed. That is the result we now reach. Because we conclude that
charge 1 was not supported by substantial evidence and therefore cannot
be sustained, we reverse the decision of the Board on that charge.

III\.

We turn next to charge 3, the false statements charge. The AJ sustained
specifications 3 and 4 of the four specifications in the charge. In
support of specifications 3 and 4, the government relies on two
items---the June 24, 1996 and May 9, 1997 rejection letters from the FBI
to Mr. Hathaway.[^6] According to the government, these letters signaled
to Mr. Hathaway that the FBI had uncovered derogatory information about
him. Thus, the government argues that when Mr. Hathaway told OPR
investigators on July 7, 2000, that he was unaware of negative
information resulting from his FBI background investigation, he
perpetrated a falsehood.

A charge of falsification is established when the agency demonstrates
first that the applicant provided incorrect information, and second that
the incorrect information was provided with the intent to mislead or
deceive the agency. [Naekel v. Dep\'t of Transp.]{.underline}, 782 F.2d
975, 977 (Fed. Cir. 1986); [see also]{.underline} [Ludlum v. Dep\'t of
Justice]{.underline}, 278 F.3d 1280, 1284 (Fed. Cir. 2002)
(\"Falsification involves an affirmative misrepresentation, and requires
intent to deceive.\"). We begin by considering whether Mr. Hathaway\'s
statements in his July 7, 2000 interview---that he was unaware of any
negative information that may have prompted the FBI rejection---were
indeed factually inaccurate. To answer this question, we must ascertain
whether the FBI rejection letters, the only sources on which the
government relies, placed Mr. Hathaway on notice of any specific
negative information.

In the first letter, dated June 24, 1996, the FBI explained that its
decision was based in part on \"information from a variety of sources\"
that included \"\[Mr. Hathaway\'s\] application itself, comments
obtained during the investigation and public source records.\" Other
than noting that these sources had been considered, the June 24 letter
did not specify any \"negative information\" that led to Mr. Hathaway\'s
rejection. On the contrary, the letter went on to say that, \"\[t\]he
choices between the many qualified candidates are difficult ones,\"
implying that Mr. Hathaway was among such qualified candidates. The same
generality is found in the May 9, 1997 FBI rejection letter. While this
correspondence described Mr. Hathaway as \"noncompetitive,\" it did so
in highly broad terms---citing only \"\[t\]he totality of an
applicant\'s background investigation and the veracity of the
information found during this review . . . .\" It too failed to
highlight any specific negative information that had prompted the
rejection of Mr. Hathaway\'s application.

We disagree with the AJ and the government that these letters would have
placed Mr. Hathaway on notice of any derogatory information. To be sure,
Mr. Hathaway would have understood from the mere fact of his rejection
by the agency that his application had been viewed unfavorably, but he
would not have known exactly what had led the FBI to its decision. Thus,
it cannot be said that when Mr. Hathaway spoke to OPR investigators in
the July 7, 2000 interview, he spoke falsely when he stated that he did
not have a \"negative reason\" to omit the FBI background investigation
(specification 3), and that he was \"unaware of any negative information
uncovered about \[him\] from the background investigation done by the
FBI\" (specification 4).

On appeal, the government urges that \"\[t\]he best evidence of
\[Hathaway\'s\] state of mind \[wa\]s his own effort to get the FBI to
reconsider.\" The government states: \"Not only did he write to offer an
explanation of an assault charge, but he also had others intervene upon
his behalf to try and overcome the decision.\" We agree with the
government that, had Mr. Hathaway asserted that he was unaware of any
possible bases for his rejection while failing to mention the assault
charge, he would have spoken falsely. However, that was not the case.
Not only did Mr. Hathaway disclose the assault charge to the OPR
investigators in the July 7 interview, but he discussed how it may have
related to his FBI rejection:

> At the time I thought -- I thought I didn\'t get hired because I had
> that mess with my old roommate who, you know, wasn\'t paying his phone
> bill and there was an altercation with his friend from home and all
> that. I figured that was the reason they didn\'t hire me. They didn\'t
> specifically say that. You know, when I talked to them they said \"No.
> No. That\'s not it. Go out and get me some more experience,\" and all
> that.

This statement by Mr. Hathaway follows just a few pages in the interview
transcript after the statements that are the focus of specifications 3
and 4. Because a full disclosure was made by Mr. Hathaway to the OPR
investigators, we fail to see how his earlier statements could be
considered falsehoods. In expressing that he was aware of no negative
information arising from his FBI application, Mr. Hathaway could only
have meant [other than]{.underline} the assault charge.

Because we do not find the statements listed in specifications 3 and 4
to be factually inaccurate, we need not reach the question of Mr.
Hathaway\'s intent. Charge 3 is not supported by substantial evidence;
the decision of the Board with respect to the charge is therefore
reversed.

IV\.

We do not understand Mr. Hathaway to contest the Board\'s finding on
charge 2. Mr. Hathaway has consistently acknowledged that an omission
occurred when he failed to disclose on his DEA SF-86s that he had been
the subject of a background investigation by the FBI. As the AJ noted,
it is irrelevant to the finding of an omission whether that omission was
intentional or unintended. The AJ upheld charge 2 based on an
unintentional omission, and the government does not argue intent on
appeal. We therefore sustain the AJ\'s determination that an unintended
omission occurred. Charge 2, then, the least serious of the three
charges, is the only charge that we sustain on appeal.

In the situation where not all charges brought against an employee are
upheld, any previous penalty may be called into question. This court\'s
recent decision in [Guise v. Department of Justice]{.underline}, 330
F.3d 1376 (Fed. Cir. 2003), speaks to the situation before us in this
case. [Guise]{.underline} dealt with two different situations. The first
one is where the agency indicated that it would have imposed a different
penalty if fewer than all the charges were sustained. In such a case,
remand to the agency is required. Here the DEA did not indicate that it
desired a lesser penalty be imposed should the Board decline to sustain
any of the charges brought against Mr. Hathaway. The second situation is
where, as here, the agency gave no indication that it would have imposed
a lesser penalty. In such a case, [Guise]{.underline} requires that we
consider \"the number and seriousness of the charges sustained as
compared to the number and seriousness of those that have not been
sustained.\" [Id.]{.underline} at 1381. When the most serious charges or
a majority of the charges have been invalidated, it may be appropriate
for us to \"vacate\[\] the penalty and remand\[\] for reconsideration of
the penalty in light of the significant change in the number and
seriousness of the sustained charges.\" [Id.]{.underline} (citations
omitted); [see also]{.underline} [Southers v. Veterans
Admin.]{.underline}, 813 F.2d 1223, 1226 (Fed. Cir. 1987) (remanding to
the Board where the \"bulk of the charges ha\[d\] been reversed\" with
the direction that the penalty of removal be considered).

Our precedent in [LaChance v. Devall]{.underline}, 178 F.3d 1246 (Fed.
Cir. 1999), requires that in such circumstances the case return to the
Board rather than the agency. Although the Board cannot \"independently
institute a new penalty\" because that would violate the agency\'s sole
discretion to determine penalty, [id.]{.underline} at 1258-59, the Board
does have the authority to \"mitigate the maximum reasonable penalty so
long as the agency has not indicated either in its final decision or
during proceedings before the Board that it desires a lesser penalty to
be imposed on fewer charges,\" [id.]{.underline} at 1260. That being the
case, under [LaChance]{.underline}, the case may be remanded to the
Board for a possible mitigation of the penalty to be imposed.
[See]{.underline} [Russo v. United States Postal Serv.]{.underline}, 284
F.3d 1304, 1310 (Fed. Cir. 2002).

In the case before us, there is no question that, under the
[Guise]{.underline} standard, a remand is required. The two most serious
charges, charges 1 and 3, have been reversed, while the least serious
charge, an inadvertent omission, is the only charge we have sustained.
Furthermore, we cannot say that the AJ would have upheld the penalty of
removal based just on charge 2. Significantly, the AJ stated that the
first charge, conduct prejudicial to DEA, would, on its own,
\"[certainly be insufficient]{.underline} to warrant the maximum
possible sanction of removal,\" and the AJ relied on the combined
severity of the three charges to affirm the penalty. [Initial
Decision]{.underline} at 20 (emphasis added). The \"significant change
in the number and seriousness\" of the charges against Mr. Hathaway
requires that we remand to the Board in this case. [Id.]{.underline}

CONCLUSION

For the reasons set forth above, we reverse the final decision of the
Board with respect to charges 1 and 3. We therefore remand the case to
the Board for further proceedings relating to the penalty to be imposed.

[REVERSED and REMANDED]{.underline}

[^1]: In 1994, while a student at Northeastern University, Mr. Hathaway
    applied for and received an internship position with the Marshals
    Service. The internship was conducted through the University\'s
    cooperative education program with the Marshals Service.

[^2]: Earlier that year, an assault charge was pressed against Mr.
    Hathaway by a friend of an ex-roommate. Although criminal
    proceedings were initiated against Mr. Hathaway, they were
    conclusively resolved in his favor; the case was dismissed and Mr.
    Hathaway\'s record expunged.

[^3]: Prior to Mr. Fries\' decision to propose Mr. Hathaway\'s removal,
    OPR\'s investigation of Mr. Hathaway was independently reviewed by
    DEA\'s Board of Professional Conduct (\"BPC\"). On May 23, 2000, BPC
    recommended to Human Resources that Mr. Hathaway be cleared of all
    charges. As his January, 2001 letter indicates, Mr. Fries disagreed
    with BPC\'s conclusion and continued to pursue the charges.

[^4]: The government has not appealed the Board\'s decision with respect
    to specifications 1 and 2.

[^5]: We also note that any variation in Mr. Hathaway\'s answers appears
    to correspond to differing timeframes. For example, on his 1997 INS
    SF-86, the number recited by Mr. Hathaway reflected use between June
    and December of 1991. Later, on his 1997 and 1998 DEA SF-86s, Mr.
    Hathaway referred to a more narrow window of use that occurred only
    in the month of June of 1991. Because the amount of use could differ
    depending on the timeframe, this distinction supports our view that
    Mr. Hathaway\'s statements were not inconsistent.

[^6]: When charging Mr. Hathaway, DEA appeared to rely on more than just
    these two letters. In the background to charge 3, Mr. Fries referred
    to an August 12, 1996 FBI \"Report of Investigation\" that he
    believed had been provided to Mr. Hathaway as part of the response
    to his FOIA request. That letter explained that \"the FBI was
    discontinuing \[Mr. Hathaway\'s\] BI due to derogatory information
    due to the fact that \'the applicant has displayed a repeated
    pattern of poor judgment and abuse of position\'. That document
    list\[ed\] 4 areas of concern including a non-recommendation for
    hiring.\" Before the AJ, Mr. Hathaway maintained that this letter
    was not included in the FOIA response and that there was no showing
    that the document had been provided to him. The AJ agreed, and
    excluded the August 12, 1996 letter from consideration. On appeal,
    the government appears to have acceded to this ruling, and relies
    totally on the June 24, 1996 and May 9, 1997 letters to support
    DEA\'s action removing Mr. Hathaway.