Opinion ID: 723739
Heading Depth: 3
Heading Rank: 1

Heading: Does the EBT program require the contractor to

Text: 23 disburse public funds? 24 Most significantly, Treasury argues that the EBT program requires the institution holding individual EBT accounts to disburse public monies to its EBT recipients. Because Treasury then interprets a series of statutes, including 31 U.S.C. §§ 3321 & 3327, to mean that only the Secretary of the Treasury, disbursing officials, and that set of financial institutions that have been designated Depositaries and Financial Agents of the Government, see 31 C.F.R. § 202.1, may disburse public monies, Treasury concludes that it has no choice but to award the EBT contract only to a party eligible to be a federal financial agent. 25 The flaw in this alleged distinction between EBT and direct deposit is fundamental: according to Treasury's own definitions, disbursement within any EFT system, which must be thought to include EBT, occurs when an electronic transfer from government accounts is initiated. 31 C.F.R. § 206.2. As defined in these disbursement rules, initiation occurs as soon as an electronic order authorizing some financial institution to debit or credit an account leaves Treasury. Id. Under the terms of this regulation, then, disbursement in an EBT system occurs as soon as the electronic order is sent from Treasury, even though the electronic payment may pass through another party en route to its destination, see, e.g., 31 C.F.R. §§ 210.1, 210.6, 210.7, and even though Treasury may bear some liability for the transfer until the funds have actually been credited to the intended recipient's account. See, e.g., 31 C.F.R. § 210.10. 26 Treasury tries to diminish the importance of its own regulation by arguing that we should not think that the definition of disburse for a particular regulatory subpart necessarily articulates Treasury's definition of what constitutes disbursement within the meaning of that regulation's authorizing statute. Treasury offers no persuasive reason, however, for us to dispense with the common-sense assumption that, in the absence of some showing to the contrary, a term used in one aspect of the rules governing a particular subject should have a similar meaning if used in another aspect of those same rules. Cf. Sullivan v. Stroop, 496 U.S. 478, 484, 110 S.Ct. 2499, 2504, 110 L.Ed.2d 438 (1990) (applying the normal rule of statutory construction that identical words used in different parts of the same act are intended to have the same meaning to a single term used in two separate, but related, statutes (internal quotations omitted)). Although a statute may have broader application than a regulatory section it subsequently authorizes, the citizens affected by the resulting scheme should be able to anticipate that a definition for a term stated in the regulatory section bears some relevance to the meaning of that same term in the authorizing statute with regard to matters governed by the regulation. Thus, as this case examines when disbursement in an EBT system occurs, we must think arbitrary Treasury's assertion that a regulatory definition of disburse which expressly identifies when electronic disbursement takes place is unrelated to the meaning of disburse as used in that regulation's authorizing statute. Moreover, the expansive scope of the regulatory section in question, which explicitly applies to all ... monies ... disbursed by federal agencies, only confirms our result. 31 C.F.R. § 206.1. Despite our substantial deference to an agency's interpretation of the scope or application of its own regulations, see, e.g., Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, ---- - ----, 114 S.Ct. 2381, 2386-87, 129 L.Ed.2d 405 (1994), then we cannot allow Treasury to ignore its own regulation in an attempt to save its imperfect/unsatisfactory decision-making in this case. See NLRB v. Washington Star Co., 732 F.2d 974, 977 (D.C.Cir.1984) (citing Cappadora v. Celebrezze, 356 F.2d 1, 6 (2d Cir.1966) (Friendly, J.)); see also Secretary of Labor v. Western Fuels-Utah, [319 U.S.App.D.C. 435] Inc., 900 F.2d 318, 323-24 (D.C.Cir.1990) (Edwards, J., dissenting) (noting that deference cannot require court to endorse a[n agency] construction that finds no support whatsoever in the disputed provision of that agency's regulation). 27 However, even were we somehow able to accept Treasury's assertion that its regulatory definition of disbursement might not necessarily apply to EBT on its face, we could not accept its discrepant and arbitrary treatment of EBT as compared to other forms of EFT. Simply stated, disbursement within the EBT system differs in no significant way from that which occurs in direct deposit. As in direct deposit, Treasury is the party responsible for directing an EBT payment, through the ACH network, to an individual's account. That a bank may play some intermediary role in guiding a digital check to that account does not make the bank the disburser any more than a credit union becomes the disburser if Treasury should transmit a digital paycheck to an individual account maintained by that credit union, see 31 C.F.R. §§ 210.6-.7, or any more than the Postal Service becomes the payor when an individual sends a dollar through the mail. Treasury itself admits at several points in the record that EBT payments will be transferred as are direct deposit payments. The senior director in charge of EBT at Citibank, the party that eventually received the EBT contract, also agreed that there is virtually no difference in terms of accepting deposits between EBT and direct deposit. Because Treasury has not demonstrated some relevant ground by which we may satisfactorily distinguish the mechanics of EBT from the mechanics of direct deposit, Treasury has no foundation on which to base its contradicting claims that an institution that maintains EBT accounts disburses public funds, but an institution that maintains accounts that receive direct deposits does not. See, e.g., Garrett v. FCC, 513 F.2d 1056, 1060 (D.C.Cir.1975) (holding that an agency acts arbitrarily when it treats seemingly similar situations dissimilarly without explaining any relevant factual differences between the situations). 28 Nor does Treasury's observation that public monies remain public monies until put in control of the intended recipient, see Romney v. United States, 167 F.2d 521, 526 (D.C.Cir.), cert. denied, 334 U.S. 847, 68 S.Ct. 1512, 92 L.Ed. 1771 (1948), support its claim that some party other than Treasury disburses public monies in the EBT program. The question in this case is not when the individual actually takes authority over his digital check, but whether the check ever passes from an account held by Treasury to an account in another institution that is held for Treasury. It does not. Similar to other EFT payments made through the ACH method, the institution in which the recipient's EBT account is located at most serves as a waystation for the payment along the EFT superhighway before that payment exits into the proper individual's account. Thus, as this final attempt also does not provide a reasoned explanation for Treasury's belief that the institution that holds an EBT account actually disburses public funds to that account, we conclude that Treasury cannot base its decision to use an IEI on the arbitrary distinction that EBT, unlike direct deposit, involves disbursement by some party other than Treasury. 29