Title: Executive Branch Waste and Fraud Recovery Act
Policy area: Government Operations and Politics

Summary:
Executive Branch Waste and Fraud Recovery Act
This bill establishes a process for requiring current or former political appointees to repay certain agency spending if the agency's Inspector General determines that the appointee directed the agency to spend federal funds in a manner that is unlawful or inconsistent with agency regulations or policies and procedures.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3398 Introduced in Senate (IS)]

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115th CONGRESS
  2d Session
                                S. 3398

    To require repayment of wasteful agency spending, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            August 28, 2018

   Mr. Carper (for himself, Ms. Hirono, Ms. Warren, and Mr. Peters) 
introduced the following bill; which was read twice and referred to the 
        Committee on Homeland Security and Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
    To require repayment of wasteful agency spending, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Executive Branch Waste and Fraud 
Recovery Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Agency.--The term ``agency'' has the meaning given the 
        term in section 551 of title 5, United States Code.
            (2) Authority head.--The term ``authority head'' means, 
        with respect to an agency--
                    (A) the head of the agency; or
                    (B) if the political appointee being investigated 
                under this Act is the head of the agency--
                            (i) the second most senior individual in 
                        the agency; or
                            (ii) if applicable, the individual serving 
                        as the acting officer under section 3345 of 
                        title 5, United States Code.
            (3) Political appointee.--The term ``political appointee'' 
        has the meaning given the term in section 714(h) of title 38, 
        United States Code.
            (4) Presiding officer.--The term ``presiding officer'' has 
        the meaning given the term in section 3801 of title 31, United 
        States Code.
            (5) Reviewing official.--The term ``reviewing official'' 
        means any officer or employee of an agency who is designated by 
        the authority head of the agency to make the determination 
        required under section 4(b)(1).

SEC. 3. REPAYMENT OF WASTEFUL AGENCY SPENDING.

    (a) In General.--If the Inspector General of an agency determines 
that a current or former political appointee of the agency directed the 
agency, or agency component over which the political appointee had 
authority, to spend Federal funds available to the agency or component 
in a manner that is unlawful or inconsistent with applicable 
regulations or agency policies or procedures, the authority head of the 
agency shall investigate the spending, assess appropriate penalties, 
and require the political appointee to repay those funds to the United 
States Government.
    (b) Treatment as Claim.--Any funds required to be repaid under 
subsection (a) shall be treated as a claim of the United States 
Government subject to subchapter II of chapter 37 of title 31, United 
States Code.
    (c) Limitation.--An agency may not require a current or former 
political appointee to repay a claim for more than $300,000 under this 
Act.

SEC. 4. DUE PROCESS AND SUBMISSION TO ATTORNEY GENERAL.

    (a) Reviewing Official.--The authority head of an agency shall 
appoint a reviewing official to review the determination of an 
Inspector General of an agency under section 3(a).
    (b) Transmission to Attorney General.--
            (1) In general.--If the reviewing official of an agency 
        determines, based on information provided by the Inspector 
        General of the agency under section 3(a), that there is 
        adequate evidence to believe that a current or former political 
        appointee is required to repay funds under section 3, the 
        reviewing official shall transmit to the Attorney General a 
        written notice of the intention of the reviewing official to 
        refer the allegations of liability to a presiding officer of 
        the agency, which shall include--
                    (A) a statement of the reasons of the reviewing 
                official for the referral of the allegations;
                    (B) a statement specifying the evidence that 
                supports the allegations;
                    (C) a description of the claims or statements for 
                which liability under section 3 is alleged;
                    (D) an estimate of the amount of money that the 
                political appointee shall be required to repay under 
                section 3; and
                    (E) a statement of any exculpatory or mitigating 
                circumstances that may relate to the claims or 
                statements described in subparagraph (C).
            (2) Approval or disapproval of referral.--
                    (A) In general.--Not later than 90 days after the 
                date on which the Attorney General receives a notice 
                from a reviewing official under paragraph (1), the 
                Attorney General or an Assistant Attorney General 
                designated by the Attorney General shall transmit a 
                written statement to the reviewing official that 
                specifies--
                            (i) that the Attorney General or the 
                        Assistant Attorney General approves or 
                        disapproves the referral to a presiding officer 
                        of the allegations of liability stated in the 
                        notice;
                            (ii) in any case in which the referral of 
                        allegations is approved, that the initiation of 
                        a proceeding with respect to the allegations is 
                        appropriate; and
                            (iii) in any case in which the referral of 
                        allegations is disapproved, the reasons for the 
                        disapproval.
                    (B) Limitation.--A reviewing official may refer 
                allegations of liability to a presiding officer of the 
                agency only if the Attorney General or an Assistant 
                Attorney General designated by the Attorney General 
                approves the referral of the allegations in a written 
                statement described in subparagraph (A).
                    (C) Delay of hearing.--If the Attorney General or 
                an Assistant Attorney General designated by the 
                Attorney General transmits to the authority head of an 
                agency a written finding that the continuation of any 
                hearing with respect to a claim or statement may 
                adversely affect any pending or potential criminal or 
                civil action related to the claim or statement, the 
                hearing shall be immediately stayed and may be resumed 
                only upon written authorization of the Attorney 
                General.
    (c) Notice and Hearing.--
            (1) Notice.--
                    (A) In general.--On or after the date on which a 
                reviewing official is permitted to refer allegations of 
                liability under subsection (b)(2), the reviewing 
                official shall mail, by registered or certified mail, 
                or shall deliver, a notice to the current or former 
                political appointee alleged to be liable to repay funds 
                under section 3, which shall specify the allegations of 
                liability against the individual and shall state the 
                right of the individual to request a hearing with 
                respect to those allegations.
                    (B) Request for hearing.--If, within 30 days after 
                receiving a notice subparagraph (A), the individual 
                receiving the notice requests a hearing with respect to 
                the allegations contained in the notice--
                            (i) the reviewing official shall refer the 
                        allegations to a presiding officer for the 
                        commencement of the hearing; and
                            (ii) the presiding officer shall commence 
                        the hearing by mailing by registered or 
                        certified mail, or by delivery of, a notice 
                        that complies with clauses (ii)(I) and (iii)(I) 
                        of paragraph (3)(B) to that individual.
            (2) Relevant documents.--
                    (A) In general.--Except as provided in subparagraph 
                (B), at any time after receiving a notice under 
                paragraph (1)(A), the individual receiving the notice 
                shall be entitled to review, and upon payment of a 
                reasonable fee for duplication, shall be entitled to 
                obtain a copy of, all relevant and material documents, 
                transcripts, records, and other materials, which relate 
                to the allegations and upon which the findings and 
                conclusions of the reviewing official are based.
                    (B) Privileged information.--An individual is not 
                entitled under subparagraph (A) to review and obtain a 
                copy of any document, transcript, record, or material 
                that is privileged under Federal law.
                    (C) Exculpatory information.--At any time after 
                receiving a notice under paragraph (1)(A), the 
                individual receiving the notice shall be entitled to 
                obtain all exculpatory information in the possession of 
                the reviewing official relating to the allegations 
                contained in the notice. Subparagraph (B) shall not 
                apply to any document, transcript, record, or other 
                material, or any portion thereof, in which such 
                exculpatory information is contained.
            (3) Hearings.--
                    (A) In general.--Any hearing commenced under 
                paragraph (1)(B)(ii) shall be conducted by the 
                presiding officer on the record in order to determine, 
                based on the preponderance of the evidence--
                            (i) the liability of an individual under 
                        section 3; and
                            (ii) if an individual is determined to be 
                        liable to repay funds under such section, the 
                        amount of any civil penalty or assessment to be 
                        imposed on the individual.
                    (B) Procedures.--
                            (i) In general.--Each hearing under this 
                        subsection shall be conducted--
                                    (I) in the case of an agency to 
                                which the provisions of subchapter II 
                                of chapter 5 of title 5, United States 
                                apply, in accordance with--
                                            (aa) the provisions of such 
                                        subchapter to the extent that 
                                        such provisions are not 
                                        inconsistent with the 
                                        provisions of this Act; and
                                            (bb) procedures promulgated 
                                        by the authority head of the 
                                        agency under clause (iii); or
                                    (II) in the case of an agency to 
                                which the provisions of such subchapter 
                                do not apply, in accordance with 
                                procedures promulgated by the authority 
                                head of the agency.
                            (ii) Agencies to which subchapter ii of 
                        chapter 5 does not apply.--The authority head 
                        of an agency shall by regulation promulgate 
                        procedures for the conduct of hearings under 
                        this subsection, which shall include the 
                        following:
                                    (I) The provision of written notice 
                                of the hearing to any individual 
                                alleged to be liable to repay funds 
                                under section 3, including written 
                                notice of--
                                            (aa) the time, place, and 
                                        nature of the hearing;
                                            (bb) the legal authority 
                                        and jurisdiction under which 
                                        the hearing is to be held; and
                                            (cc) the matters of facts 
                                        and law to be asserted.
                                    (II) The provision to any 
                                individual alleged to be liable to 
                                repay funds under section 3 of 
                                opportunities for the submission of 
                                facts, arguments, offers of settlement, 
                                or proposals of adjustment.
                                    (III) Procedures to ensure that the 
                                presiding officer shall not, except to 
                                the extent required for the disposition 
                                of ex parte matters as authorized by 
                                law--
                                            (aa) consult a person or 
                                        party on a fact in issue, 
                                        unless on notice and 
                                        opportunity for all parties to 
                                        the hearing to participate; or
                                            (bb) be responsible to or 
                                        subject to the supervision or 
                                        direction of the reviewing 
                                        official.
                                    (IV) Procedures to ensure that the 
                                reviewing official does not participate 
                                or advise in the decision required 
                                under subparagraph (D).
                                    (V) The provision to any individual 
                                alleged to be liable to repay funds 
                                under section 3 of opportunities to 
                                present the individual's case through 
                                oral or documentary evidence, to submit 
                                rebuttal evidence, and to conduct such 
                                cross-examination as may be required 
                                for a full and true disclosure of the 
                                facts.
                                    (VI) Procedures to permit any 
                                individual alleged to be liable to 
                                repay funds under section 3 to be 
                                accompanied, represented, and advised 
                                by counsel or such other qualified 
                                representative as authority head of the 
                                agency may specify by regulation.
                                    (VII) Procedures to ensure that the 
                                hearing is conducted in an impartial 
                                manner, including procedures to--
                                            (aa) permit the presiding 
                                        officer to at any time 
                                        disqualify himself or herself; 
                                        and
                                            (bb) permit the filing, in 
                                        good faith, of a timely and 
                                        sufficient affidavit alleging 
                                        personal bias or another reason 
                                        for disqualification of a 
                                        presiding officer or a 
                                        reviewing official.
                            (iii) All agencies.--The authority head of 
                        an agency shall promulgate by regulation the 
                        following procedures for the conduct of 
                        hearings under this subsection, which shall be 
                        in addition to any procedures described in 
                        clauses (i) and (ii):
                                    (I) Procedures for the inclusion, 
                                in any written notice of a hearing 
                                under this section to any individual 
                                alleged to be liable to repay funds 
                                under section 3, of a description of 
                                the procedures for the conduct of the 
                                hearing.
                                    (II) Procedures to permit discovery 
                                by any individual alleged to be liable 
                                to repay funds under section 3, only to 
                                the extent that the presiding officer 
                                determines that the discovery is 
                                necessary for the expeditious, fair, 
                                and reasonable consideration of the 
                                issues, except that the procedures 
                                shall not apply to documents, 
                                transcripts, records, or other material 
                                which an individual is entitled to 
                                review under paragraph (2)(A) or to 
                                information to which an individual is 
                                entitled under paragraph (2)(C). 
                                Procedures promulgated under this 
                                subclause shall prohibit the discovery 
                                of the notice required under paragraph 
                                (1).
                    (C) Venue.--Each hearing under this subsection 
                shall be held--
                            (i) in the judicial district of the United 
                        States in which the individual alleged to be 
                        liable to repay funds under section 3 resides 
                        or transacts business;
                            (ii) in the judicial district of the United 
                        States in which the claim or statement upon 
                        which the allegation of liability under such 
                        section was made, presented, or submitted; or
                            (iii) in such other place as may be agreed 
                        upon by the individual and the presiding 
                        officer who will conduct the hearing.
                    (D) Written decision.--
                            (i) In general.--The presiding officer 
                        shall issue a written decision after the 
                        conclusion of a hearing under this subsection, 
                        which shall include the findings of fact and 
                        conclusions of law which the presiding officer 
                        relied upon in determining whether an 
                        individual is liable to repay funds under 
                        section 3.
                            (ii) Appeal.--The presiding officer shall 
                        promptly send to each party to the hearing a 
                        copy of the written decision and a statement 
                        describing the right of any individual 
                        determined to be liable to repay funds under 
                        section 3 to appeal the decision of the 
                        presiding officer in accordance with section 5.

SEC. 5. JUDICIAL REVIEW.

    (a) In General.--
            (1) Determination by reviewing official.--A determination 
        by a reviewing official under section 4(b)(1) shall be final 
        and shall not be subject to judicial review.
            (2) Determination of liability.--Unless a petition is filed 
        under this section, a determination by a presiding officer 
        under section 4(c)(3)(D) that an individual is required to 
        repay funds shall be final and shall not be subject to judicial 
        review.
    (b) Petition.--
            (1) In general.--An individual who has been determined 
        under section 4 to be liable to repay funds may obtain review 
        of the determination in--
                    (A) the United States district court for the 
                district in which the individual resides or transacts 
                business;
                    (B) the United States district court for the 
                district in which the claim or statement upon which the 
                determination of liability is based was made, 
                presented, or submitted; or
                    (C) the United States District Court for the 
                District of Columbia.
            (2) Deadline.--A review under paragraph (1) may be obtained 
        by filing in any court described in such paragraph a written 
        petition that the determination be modified or set aside. The 
        petition shall be filed--
                    (A) only after the individual has exhausted all 
                administrative remedies under this Act; and
                    (B) within 60 days after the date on which the 
                presiding officer sends the individual a copy of the 
                written decision under section 4(c)(3)(D).
            (3) Transmission to attorney general.--The clerk of the 
        court shall transmit a copy of a petition filed under this 
        subsection to the agency and to the Attorney General. Upon 
        receipt of the copy of the petition, the authority head of the 
        agency shall transmit to the Attorney General the record in the 
        proceeding resulting in the determination of liability under 
        this Act. Except as otherwise provided in this section, the 
        district courts of the United States shall have jurisdiction to 
        review the decision, findings, and determinations in issue and 
        to affirm, modify, remand for further consideration, or set 
        aside, in whole or in part, the decision, findings, and 
        determinations of the agency and to enforce such decision, 
        findings, and determinations to the extent that the decision, 
        findings, and determinations are affirmed or modified.
    (c) Questions of Fact.--The decisions, findings, and determinations 
of an agency with respect to questions of fact shall be final and 
conclusive, and shall not be set aside unless the decisions, findings, 
and determinations are found by the court to be unsupported by 
substantial evidence. In concluding whether the decisions, findings, 
and determinations of the agency are unsupported by substantial 
evidence, the court shall review the whole record or those parts of it 
cited by a party, and due account shall be taken of the rule of 
prejudicial error.
    (d) Hearing Proceedings.--Any district court reviewing under this 
section the decision, findings, and determinations of an agency shall 
not consider any objection that was not raised in the hearing conducted 
under section 4 unless a demonstration is made of extraordinary 
circumstances causing the failure to raise the objection. If any party 
demonstrates to the satisfaction of the court that additional evidence 
not presented at the hearing is material and that there were reasonable 
grounds for the failure to present such evidence at the hearing, the 
court shall remand the matter to the authority for consideration of 
such additional evidence.
    (e) Final Judgment.--Upon a final determination by the district 
court that an individual is liable to repay funds under this Act, the 
court shall enter a final judgment for the appropriate amount in favor 
of the United States.

SEC. 6. COLLECTION OF PENALTIES.

    (a) In General.--The Attorney General shall be responsible for 
judicial enforcement of any civil penalty or assessment with respect to 
the repayment of funds imposed pursuant to the provisions of this Act.
    (b) Civil Action.--Any penalty or assessment imposed in a 
determination which has become final pursuant to this Act may be 
recovered in a civil action brought by the Attorney General. In any 
such action, no matter that was raised or that could have been raised 
in a hearing conducted under section 4 or pursuant to judicial review 
under section 5 may be raised as a defense, and the determination of 
liability and the determination of amounts of penalties and assessments 
shall not be subject to review.
    (c) Jurisdiction.--The district courts of the United States shall 
have jurisdiction of any action commenced by the United States under 
subsection (b).
    (d) Consolidation.--Any action under subsection (b) may, without 
regard to venue requirements, be joined and consolidated with or 
asserted as a counterclaim, cross-claim, or setoff by the United States 
in any other civil action which includes as parties the United States 
and the individual against whom such action may be brought.
    (e) Court of Federal Claims.--The United States Court of Federal 
Claims shall have jurisdiction of any action under subsection (b) of 
this section to recover any penalty or assessment if the cause of 
action is asserted by the United States as a counterclaim in a matter 
pending in such court.
    (f) Compromise or Settlement.--The Attorney General shall have 
exclusive authority to compromise or settle any penalty or assessment 
the determination of which is the subject of a pending petition 
pursuant to section 5 or a pending action to recover such penalty or 
assessment pursuant to this section.
    (g) Deposits.--
            (1) In general.--Except as provided in paragraph (2), any 
        amount of penalty or assessment collected under this Act shall 
        be deposited as miscellaneous receipts in the Treasury of the 
        United States.
            (2) Exceptions.--
                    (A) Any amount of a penalty or assessment imposed 
                by the United States Postal Service under this Act 
                shall be deposited in the Postal Service Fund 
                established by section 2003 of title 39, United States 
                Code.
                    (B) Any amount of a penalty or assessment imposed 
                by the Secretary of Health and Human Services under 
                this Act with respect to a claim or statement made in 
                connection with old age and survivors benefits under 
                title II of the Social Security Act shall be deposited 
                in the Federal Old-Age and Survivors Insurance Trust 
                Fund.
                    (C) Any amount of a penalty or assessment imposed 
                by the Secretary of Health and Human Services under 
                this Act with respect to a claim or statement made in 
                connection with disability benefits under title II of 
                the Social Security Act shall be deposited in the 
                Federal Disability Insurance Trust Fund.
                    (D) Any amount of a penalty or assessment imposed 
                by the Secretary of Health and Human Services under 
                this Act with respect to a claim or statement made in 
                connection with benefits under part A of title XVIII of 
                the Social Security Act shall be deposited in the 
                Federal Hospital Insurance Trust Fund.
                    (E) Any amount of a penalty or assessment imposed 
                by the Secretary of Health and Human Services under 
                this Act with respect to a claim or statement made in 
                connection with benefits under part B of title XVIII of 
                the Social Security Act shall be deposited in the 
                Federal Supplementary Medical Insurance Trust Fund.

SEC. 7. ADMINISTRATIVE OFFSET.

    (a) In General.--The amount of any penalty or assessment which has 
become final under section 4, or for which a judgment has been entered 
under section 5 or 6, or any amount agreed upon in a settlement or 
compromise under section 6(f), may be collected by administrative 
offset under section 3716 of title 31, United States Code, except that 
an administrative offset may not be made under this subsection against 
a refund of an overpayment of Federal taxes, then or later owing by the 
United States to the individual liable for the penalty or assessment.
    (b) Deposit.--All amounts collected pursuant to this section shall 
be remitted to the Secretary of the Treasury for deposit in accordance 
with section 6(g).
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