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United States of America, For Office of Inspector General v. Philadelphia Housing Authority

February 4, 2011

UNITED STATES OF AMERICA, FOR OFFICE OF INSPECTOR GENERAL,
UNITED STATES DEPARTMENT OF HOUSING & URBAN DEVELOPMENT
v.
PHILADELPHIA HOUSING AUTHORITY



The opinion of the court was delivered by: Surrick, J.

MEMORANDUM

Presently before the Court is the United States' Petition for Summary Enforcement of Inspector General Subpoena (ECF No. 1) filed by the United States Attorney on behalf of the Office of the Inspector General ("OIG") of the United States Department of Housing and Urban Development ("HUD"). For the following reasons, the Petition will be granted.

I. BACKGROUND

On November 9, 2010, the United States Attorney, on behalf of the Office of Inspector General ("OIG") of the United States Department of Housing and Urban Development ("HUD"), petitioned for summary enforcement of an Inspector General's subpoena. (Pet. Ex. A, ECF No. 1.) The administrative subpoena duces tecum was issued pursuant to § 6(a)(4) of the Inspector General Act of 1978 ("Inspector General Act"), 5 U.S.C. app. 3. The subpoena was issued on July 14, 2010, and was served on the Philadelphia Housing Authority ("PHA") the same day. (Pet. Ex. A.) The subpoena requires the PHA to provide the first five digits of the Social Security numbers of 28 PHA employees in connection with HUD-OIG's audit survey of the PHA.*fn1 (Id.)The PHA has failed to produce any records in response to the subpoena. (Pet'r's Mem. Ex. A ¶ 20, ECF No. 1.)

The HUD-OIG is conducting an audit survey of the PHA to determine "whether, with respect to the program under audit, any real or apparent conflicts of interest exist due to employee affiliations with contractors or subcontractors of the PHA and/or due to the PHA's purchasing goods or services from its employees." (Pet. ¶ 8.) The program under audit is the PHA's scattered site housing projects. (Pet'r's Mem. Ex. A.) The subpoena at issue directed the PHA to turn over the requested partial Social Security numbersto James Carrington of the HUDOIG before July 28, 2010. (Pet. Ex. A.) The PHA responded by informing the HUD-OIG that "consistent with past practice, PHA was not prepared to provide employee [Social Security number] information but would work cooperatively with OIG's auditors to the extent that OIG required additional information about particular employees." (Resp't's Mem. 5, ECF No. 3.) PHA's counsel, James Eisenhower, exchanged a number of emails with John P. Buck, OIG's Regional Inspector General for Audit, regarding the disclosure of the requested Social Security numbers. (Resp't's Mem. Ex. B, C, D.) The parties were ultimately unable to reach an agreement. The HUD-OIG was unwilling to accept anything less than the 28 partial Social Security numbers demanded by the subpoena. The PHA refused to provide them. Accordingly, HUD-OIG filed the instant Petition for summary enforcement of the subpoena. (Pet. Ex. A.)

II. DISCUSSION

A. The Role of the Court

When determining the enforceability of an administrative subpoena, courts play a "strictly limited role." See Sandsend Fin. Consultants v. Fed. Home Loan Bank Bd., Ltd., 878 F.2d 875, 879 (5th Cir. 1989); see also Univ. of Med. and Dentistry of N.J. v. Corrigan, 347 F.3d 57, 64 (3d Cir. 2003); FTC v. Texaco, Inc., 555 F.2d 862, 871-72 (D.C. Cir. 1997). Courts will enforce an administrative subpoena if "(1) the subpoena is within the statutory authority of the agency; (2) the information sought is reasonably relevant to the inquiry; and (3) the demand is not unreasonably broad or burdensome." See United States v. Westinghouse Elec. Corp., 788 F.2d 164, 166 (3d Cir. 1986); United States v. Powell, 379 U.S. 48, 57-58 (1964); United States v. Morton Salt Co., 338 U.S. 632, 652 (1950).

B. The Authority of the Inspector General

The Inspector General Act of 1978 provides: It is the duty and responsibility of each Inspector General, with respect to the establishment within which his Office is established: (1) to provide policy direction for and to conduct, supervise, and coordinate audits and investigations relating to the programs and operations of such establishment; . . . (3) to recommend policies for, and to conduct, supervise, or coordinate other activities carried out or financed by such establishment for the purpose of promoting economy and efficiency in the administration of, or preventing and detecting fraud and abuse in, its programs and operations.

5 U.S.C. app. 3 § 4(a). Thus, the HUD-OIG is authorized by statute to conduct audits and investigations of HUD programs or operations. The PHA's scattered site housing projects is one such operation, since it involves the expenditure of federal funds provided by HUD. The purpose of HUD-OIG's audit survey of this program is "to determine whether the Authority administered its scattered site housing and related funding in accordance with applicable HUD requirements." (Pet'r's Mem. Ex. A ¶ 7.)

Under § 6 (a) of the Inspector General Act, "[e]ach Inspector General is authorized . . . (4) to require by subpoena the production of all information, documents, reports, answers, records, accounts, papers, and other data in any medium (including electronically stored information,as well as any tangible thing) and any documentary evidence necessary in the performance of the functions assigned by this Act . . . ."5 U.S.C. app. 3 § 6(a) (emphasis added). The PHA contends that the information sought by the subpoena is unnecessary, and that the Government has failed to show the required need for the partial Social Security numbers. (Resp't's Mem. 1.) The Government maintains that the Social Security numbers are necessary to the performance of the HUD-OIG's assigned functions under the Inspector General Act. (Pet'r's Mem. 6.)

In Westinghouse, the Third Circuitdetermined that Congress did not intend to limit the scope of the Inspector General's subpoena power with the use of the word "necessary." 788 F.2d at 170 ("A constricted interpretation would be at odds with the broad powers conferred on the Inspector General by the statute. Nor is the long line of decisions granting agencies wide latitude in their use of subpoenas grounded on the precise statutory language setting out their subpoena power.") Quoting from the Supreme Court's decision in Endicott Johnson Corp. v. Perkins, 317 U.S. 501, 509 (1943), the Third Circuit observed that a district court is obliged to enforce a subpoena that is not "plainly incompetent or irrelevant to any lawful purpose." 317 U.S. at 509. In affirming the district court's enforcement of the Inspector General's subpoena, the Westinghouse court stated that "Congress intended that the courts ...


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