United States v. Manigault Newman

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,
Plaintiff

V. Civil Case No. 19-1868 (RJL)

OMAROSA MANIGAULT NEWMAN,

Defendant.

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MEMORANDUM OPINION
March /S°, 2022 [Dkt. ## 24, 32]

In this case, the United States of America (“the Government”) seeks a civil penalty
against defendant Omarosa Manigault Newman (“Manigault Newman”) for violating the
Ethics In Government Act. Both parties have moved for summary judgment, and briefing
is now complete. For the following reasons, Manigault Newman’s motion will be
DENIED, and the Government’s motion will be GRANTED.

BACKGROUND

A. The Ethics In Government Act

The Ethics In Government Act (“EIGA”), 5 U.S.C. app. 4 § 101 et seq., is a federal
statute designed “to increase public confidence in the federal government, demonstrate the
integrity of government officials, deter conflicts of interest, deter unscrupulous persons
from entering public service, and enhance the ability of the citizenry to judge the
performance of public officials.” Lovitky v. Trump, 949 F.3d 753, 755 (D.C. Cir. 2020)

(citation and quotation omitted). In pursuit of these aims, the EIGA “requires many .. .
government officials . . . to file financial disclosure reports[.]” Trump v. Mazars USA, LLP,
940 F.3d 710, 714-15 (D.C. Cir. 2019) (citing 5 U.S.C. app. 4 § 101(a), (c), (d), (f).

The EIGA specifies both the officials covered by the statute and the scope of their
obligations. Among others, “employee[s] in the executive branch” must file financial
disclosure reports if their position is “not under the General Schedule” and their “rate of
basic pay is equal to or greater than 120 percent of the minimum rate of basic pay payable
for GS-15 of the General Schedule[.]” 5 U.S.C. app. 4 § 101(f)(3); accord 5 C.F.R. §
2634.202(c). And among other obligations, these officials must file a financial disclosure
report “on or before the thirtieth day after termination of employment[.]” 5 U.S.C. app. 4
§ 101(e); accord 5 C.F.R. § 2634.201(e)(1); see also 5 U.S.C. app. 4 § 102(a) (enumerating
information required for the report).

Failure to comply with the EIGA carries consequences. In particular, “any
individual . .. who knowingly and willfully fails to file or report any information that such
individual is required to report” may be subjected to “a civil penalty in any amount, not to
exceed $[66,190].” 5 U.S.C. app. 4 § 104(a)(1); 28 U.S.C. § 2461 note; accord 5 C.F.R. §
2634.701(b) (adjusting penalty amount for inflation).! The Attorney General is authorized
to collect this penalty through “a civil action” brought “in any appropriate United States

district court[.]” 5 U.S.C. app. 4 § 104(a)(1).

' The Federal Civil Penalties Inflation Adjustment Act, as amended, provides that federal
agencies “shall... by regulation adjust each civil monetary penalty provided by law within
the jurisdiction of the Federal agency . . . by the inflation adjustment” enumerated in the
statute. See Pub. L. 101-410, § 4, 104 Stat. 890, 891 (1990); Pub. L. 104—134, tit. IIT, §
31001(s)(1), 110 Stat. 1321, 1321-373 (1996).

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B. Factual Background

Manigault Newman previously worked as the Director of Communications for the
Office of Public Liaison in the White House. See Declaration of Christopher M. Lynch In
Support of Plaintiff United States of America’s Motion for Summary Judgment (“Lynch
Decl.”’) [Dkt. # 24-7] Ex. A. In this role, Manigault Newman’s salary was $179,700. See
Declaration of Stefan Passantino In Support of United States of America’s Motion for
Summary Judgment (“Passantino Decl.”) [Dkt. # 24-2], Ex. H. Because this amount
exceeded 120% “of the minimum rate of basic pay payable for GS-15,” 5 U.S.C. app. 4 §
101(f)(3),2 Manigault Newman was required to submit a financial disclosure report 30 days
after the termination of her employment (“Termination Report’), id. § 101(e).

On December 12, 2017, White House officials informed Manigault Newman that
her employment was being terminated. See Passantino Decl. Ex. A; accord Declaration of
Manigault Newman In Opposition of United States of America’s Motion for Summary
Judgment [Dkt. # 30-1] 94. Manigault Newman’s termination was effective on December

19, 2017, as reflected by records from the White House Human Resources Division.’ See

* The basic pay for GS-15, step 1 in 2017 was $103,672. See 2017 Base GS Pay Scale,
https://www.federalpay.org/resources/pdf/locality/gs-payscale-2017-base-table.pdf.
120% of that salary is $124,406.40.

3 To be sure, Manigault Newman contends that her termination was effective on January
20, 2018. See Defendant Omarosa Manigault Newman’s Statement of Undisputed Material
Facts in Support of Motion for Summary Judgment (“Def. SOF”) [Dkt. # 32] 94. However,
this contention is based on an agreement reached with White House Chief of Staff, General
John Kelly, on December 12, 2017. Jd. fj 2-4. But a week after that agreement, General
Kelly changed course and made Manigault Newman’s termination effective immediately.
See Passantino Decl. §§ 4-7 & Ex. H. Manigault Newman does not offer any evidence
contradicting this post-December 12 change to her termination date.

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Passantino Decl. Ex. H (Notification of Personnel Action form listing “12-19-2017” as
effective date of termination). As a result, Manigault Newman was obligated to file her
Termination Report by January 18, 2018. See 5 U.S.C. app. 4 § 101(e).

In the run-up to the January 18, 2018 deadline, the Government repeatedly notified
Manigault Newman of her EIGA obligations. On December 29, 2017, a White House
ethics attorney—Alice Bartek-Santiago— instructed Manigault Newman to “submit [her]
termination report by January 18, 2018” using the Government’s Integrity.gov platform.
Passantino Decl. Ex. B at 3-4. That same platform has since sent Manigault Newman
automated emails on a weekly basis—totaling more than 100 notifications—reminding her
of the January 18, 2018 deadline. See Declaration of David Jones In Support of United
States of America’s Motion for Summary Judgment (“Jones Decl.”) [Dkt. # 24-3] ] 10 &
Ex. B. On January 3, 2018, another ethics attorney from the White House Counsel’s
Office—Scott de la Vega—emailed Manigault Newman to remind her that the Termination
Report was “due on January 18, 2018[.]” See Declaration of Scott de la Vega In Support
of United States of America’s Motion for Summary Judgment [Dkt. # 24-4] 721 & Ex. B
at 1. The attorney notified her that she could request an extension “prior to January 18,
2018,” and encouraged her to “let [White House staff] know if [they] c[ould] assist with
fher] .. . Termination Report[.]” Jd. Ex. B at 1. On January 12, 2018, Bartek-Santiago
again emailed Manigault Newman, noting that she was “[t]here to help” if Manigault
Newman “experience[d] any problems or ha[d] any questions regarding [the] termination
report.” Passantino Decl. Ex. B at 2. Despite these communications, Manigault Newman

did not file the Termination Report by January 18, 2018.

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After Manigault Newman missed her filing deadline, the Government continued to
appraise Manigault Newman of her EIGA obligations. Bartek-Santiago emailed Manigault
Newman on January 19, 2018, informing her that her “termination report was due on
January 18, 2018” and that she had missed the deadline. Jd. On January 24, 2018, Deputy
White House Counsel Stefan Passantino likewise advised Manigault Newman that her
“termination report was due January 18” and explained that the report would become
“overdue”—i.e., subject to a $200 late filing fee—on February 19. Jd. Ex. C at 1. On
January 26, 2018, the Director of White House Management and Administration—Marcia
Kelly—emailed Manigault Newman and her husband, informing them that the
“Termination report was due January 18,” and encouraging Manigault Newman to “please
get r done” to avoid a late fee. Jd. Ex. D at 1. On February 6, 2018, Bartek-Santiago again
emailed Manigault Newman, noting that she “ha[d] not yet logged into integrity.gov to
complete [her] report,” and offering to “chat over the phone if [she] need[ed] assistance
filing [the] report.” Jd. Ex. E at 1. On February 22, 2018, Bartek-Santiago followed up on
this email, reiterating that Manigault Newman needed to file the report and again offering
assistance. See id.

Manigault Newman responded to this flurry of communications in early March
2018. See Passantino Decl. § 20. In a call with Passantino on March 5, 2018, Manigault
Newman confirmed that she had received the numerous emails about her EIGA compliance
but would not complete the Termination Report because of her mistaken belief that the
Report contained the wrong termination date. See Motion to Dismiss Plaintiff's Corrected

Complaint For Failure to State a Cause of Action Upon Which Relief Can be Granted

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(“Mot. to Dismiss”) [Dkt. # 5] § 14 (quoting recording of telephone call captured by
Manigault Newman). In particular, Manigault Newman stated that she “d[idn]’t feel
comfortable completing that report” because her “last day [wa]s the 20th [of January] and
[the report] indicated the 13th [of December]” was her termination date. Jd. Passantino
told Manigault Newman that he would “find out” her termination date and “let [her]
know[.]” Id.

The termination date dispute was definitively resolved on March 26, 2018. That
day, a White House ethics attorney—Deborah Raviv—emailed Manigault Newman to
remind her that the Termination Report was “past due.” Passantino Decl. Ex. B at 1.
Manigault Newman called Raviv that morning to again protest the termination date on her
form. /d. Ex. F (memorandum from Raviv memorializing the phone call). Raviv explained
that she had confirmed with “White House Human Resources (HR) on March 23, 2018”
that “Ms. Manigault’s separation date was December 19, 2017.” Jd. At Manigault
Newman’s insistence, Raviv agreed to confer with Passantino again regarding her
termination date. Jd. That evening, Passantino emailed Manigault Newman and confirmed
that her “employment with the government officially ended effective December 19, 2017.”
Id. Ex. G. He attached records from the White House Human Resources Division
confirming Manigault Newman’s termination date and reiterated that the EIGA mandated

the filing of the Termination Report. See id.
Despite the repeated admonitions from the Government and a confirmation of her
termination date, Manigault Newman did not file her Termination Report until September
11, 2019—well over a year after the report was due.* See Jones Decl. Ex. C.

C. Procedural History

The Government initiated this suit on June 25, 2019. It brought a single count
alleging that Manigault Newman violated the EIGA because she refused to file her
Termination Report with full knowledge of the requirement. See Complaint (“Compl.”)
[Dkt. # 2-1] 49 25-29. Manigault Newman filed a motion to dismiss, see Mot. to Dismiss,
which I denied, see Minute Order, 05/21/2020. The parties subsequently cross-moved for
summary judgment. See Plaintiff United States of America’s Motion for Summary
Judgment (“Gov. MSJ”) [Dkt. # 24]; Defendant Omarosa Manigault Newman’s Motion
for Summary Judgment (“Def. MSJ’’) [Dkt. # 32]. Both motions are ripe for review.

LEGAL STANDARD

Courts “shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). A dispute is “genuine” if “the evidence is such that a reasonable jury
could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). A fact is “material” if it “might affect the outcome of the suit under the

governing law[.]” Jd.

4 The Government contends—and Manigault Newman denies—that this report contained
deficiencies. I do not find this dispute material to the outcome of this case.

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DISCUSSION

A. Knowing and Willful Violation

The EIGA imposes civil liability on an individual only if three discrete requirements
are satisfied. First, the individual must be “required to report” information under 5 U.S.C.
app. 4 § 102. See 5 U.S.C. app. 4 § 104(a)(1). Second, the individual must “fail[] to file
or report” that information. Id. Third, the failure must be “knowing[]” and “willful[.]” Za.

Here, there is no dispute as to the first two elements. Manigault Newman was
required to file information enumerated in 5 U.S.C. app. 4 § 102 because she was an
“employee in the executive branch,” was “not under the General Schedule,” and received
a pay “greater than 120 percent of the minimum rate of basic pay payable for GS-15 of the
General Schedule[.]” See 5 U.S.C. app. 4 §§ 101(e), (f); 102(a); accord Passantino Decl.
Ex. H; 2017 Base GS Pay Scale, https://www.federalpay.org/resources/pdf/locality/gs-
payscale-2017-base-table.pdf. Manigault Newman failed to file this information before
the 30-day statutory deadline for filing Termination Reports. See 5 U.S.C. app. 4 § 101(e);
accord Passantino Decl. Ex. H (December 19, 2017 termination date); Jones Decl. Ex. C
at 1 (report filed September 11, 2019).

There is also no question that Manigault Newman knowingly failed to report. As
explained above, the Government provided Manigault Newman with notice of her EIGA
obligations repeatedly by email, phone, and automated notifications from integrity.gov. To
be sure, Manigault Newman contends that the Government sent some of these notices to
an “unmonitored” email address. Defendant Omarosa Manigault Newman’s Response to
Plaintiff's Motion for Summary Judgment (“Def. Resp.”’) [Dkt. # 30] at 16. However, even

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assuming that this email address was unmonitored, but see Passantino Decl. Ex. A (listing
the email address in her Separation Action Form), Manigault Newman expressly admitted
that she had received these emails and was aware of her obligation to the file the report in
March 2018 on a phone call with Passantino, see Passantino Decl. § 20; accord Mot. to
Dismiss § 14. Thus, Manigault Newman indisputably knew about her ongoing failure to
file the Termination Report for at least a year and a half before eventually filing it in
September 2019. Accordingly, the only question before me is whether Manigault
Newman’s failure to file her Termination Report was “willful.”

Generally, “in order to establish a ‘willful’ violation of a statute, ‘the Government
must prove that the defendant acted with knowledge that his conduct was unlawful.’”
Bryan y. United States, 524 U.S. 184, 191-92 (1998) (quoting Ratzlafv. United States, 510
U.S. 135, 137 (1994)); accord United States v. Burden, 934 F.3d 675, 156-59 (D.C. Cir.
2019). Courts have interpreted the EIGA’s willfulness requirement in accordance with this
general rule, concluding that “[a]n individual knowingly and willfully fails to comply with
the EIGA requirements when that individual intentionally disregards the statute or is
indifferent to its requirements.” United States v. Lairy, No. CV 19-2488, 2020 WL
4039176, at *2 (D.D.C. July 17, 2020) (Contreras, J.) (citations and quotations omitted);
accord United States v. Gant, 268 F. Supp. 2d 29, 33 (D.D.C. 2003) (Urbina, J.) (same).

Manigault Newman willfully violated the EIGA. As described above, Manigault
Newman was well aware of her obligation to file her Termination Report under 5 U.S.C.
app. 4 § 101(e)—having received countless reminders—but nevertheless failed to file her

report for more than a year after the statutory deadline. This conduct establishes a willful

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violation. See, e.g., Lairy, No. CV 19-2488, 2020 WL 4039176, at *3 (RC) (finding EIGA
violation where defendant was informed by email of “time-sensitive deadline to submit the
report” and failed to file the report for over six months); Gant, 268 F. Supp. at 33-34
(RMU) (finding EIGA violation where defendant received numerous reminders of his
filing obligation but failed to comply); United States v. Tarver, 642 F. Supp. 1109, 1111
(D. Wyo. 1986) (finding EIGA violation where defendant “was twice informed of the
requirements of the Act” but “refused to comply”); United States of America v. Hunter,
1:14-cv-442 (D.D.C. Aug. 27, 2014), ECF No. 8, at 3 (Boasberg, J.) (finding EIGA
violation where defendant refused to file after “repeated letters . . . to remind him of his
obligations”).

B. Defenses To Liability

Manigault Newman offers three objections to the Government’s motion for
summary judgment, but none are convincing. I’Il address each in turn.

1. Termination Date

Manigault Newman first contends that she could not file the Termination Report
because it contained the wrong termination date. See Def. Resp. at 9-15; Def. MSJ at 4—
5, 7-8. Not so. While Manigault Newman disagreed with White House officials as to her
termination date, any disagreement was conclusively resolved on March 26, 2018 when
Deputy White House Counsel Stefan Passantino confirmed her termination date after
consulting with the White House Human Resources Division. See Passantino Decl. Ex. G.
He likewise attached records from the Human Resources Division showing that Manigault

Newman’s “employment with the government officially ended effective December 19,

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2017.” See id.; accord id. Ex.H. At this point, any ambiguity over Manigault Newman’s
termination date was resolved.* Her continued dissatisfaction with that date was not a basis
for withholding the Termination Report.

2. Missing Documents

Manigault Newman next claims that she could not complete the Termination Report
because the Government refused to return documents integral to the Report’s completion.
See Def. Resp. at 6-9; Def. MSJ at 5-8. However, this factual dispute is immaterial
because Manigault Newman made no effort to retrieve these documents until May 2019—
more than a year after her Termination Report was due.° See Defendant Omarosa
Manigault Newman’s Statement of Undisputed Material Facts in Support of Motion for
Summary Judgment [Dkt. # 32] (“Def. SOF”) 4 9; accord Mot. to Dismiss § 14 (attesting
in March 2018 that “the only hold up” was the “discrepancy of the [termination] date” and
making no mention of documents needed to complete the report (emphasis added)).

Accordingly, even if the documents were necessary to complete her report—though they

> For this reason, Manigault Newman no longer had any genuine basis to believe that filing
the Termination Report with this termination date would have subjected her to liability for
filing false information. Contra Def. Resp. at 10-11. In addition, she could have avoided
such fears by filing the Termination Report without including the December 19 termination
date, precisely as she did after the initiation of this suit. See Jones Decl. Ex. C.

© To be sure, Manigault Newman mentioned in March 2018 that she wanted her “personal
items,” such as “a little thumb drive with all of [her] wedding photos on it[.]” Mot. to
Dismiss § 14; Gov. MSJ at 14 (both quoting call transcript). However, she did not ask for
any documents related to the completion of her Termination Report—or claim that any
documents in the White House’s possession were necessary to complete her Termination
Report—prior to May 2019.

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were not’—that fact would not refute that Manigault Newman willfully disregarded the
EIGA’s requirements for more than a year.®

This dispute is also not genuine because Manigault Newman failed to file her
Termination Report within the statutory 30-day timeline after being afforded the
opportunity to retrieve the documents. Indeed, Manigault Newman failed for months to
coordinate a time and place to retrieve the documents despite numerous messages from
White House officials trying to accommodate their return. See Plaintiff's Supplemental
Brief in Support of Motion for Summary Judgment [Dkt. # 43] at 6-9 (summarizing
correspondence). Then, after she received her effects from the White House, she still did
not file her report within 30 days. See Def. SOF {§ 10-11 (receipt of belongings from
White House on July 12, 2019; Termination Report submitted 61 days later on September
11, 2019); accord Jones Decl. Ex. C. There is thus no genuine dispute that Manigault
Newman would have filed a timely Termination Report if the White House facilitated the
return of her effects—because it did, and she did not. Thus, this argument is insufficient

to defeat the Government’s summary judgment motion.

7 Manigault Newman has conceded that the only documents in the Government’s
possession that she could not obtain from other sources were official travel records, see
Lynch Decl. Ex. E, and these records were not necessary to complete the Termination
Report, see Jones Decl. § 27, Ex. C at 13.

8 The same logic refutes Manigault Newman’s more limited claim that her “subjective[]”
belief that the documents were necessary creates a material dispute as to her mens rea. See
Def. Resp. at 7. Any subjective belief that the documents were necessary to complete the
report is immaterial because Manigault Newman made no attempt to procure those
documents for more than year.

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3. Whistleblower Protection

Lastly, Manigault Newman contends that “[t]his litigation was clearly enacted as
retaliation because [she] decided to disclose information concerning the gross
mismanagement of the White House.” Def. MSJ at 14; Def. Resp. at 6, 16-21. As aresult,
she contends that she is protected by the Whistleblower Protection Act (“WPA”), as
amended by the Whistleblower Protection Enhancement Act. See Def. MSJ at 9-18; Def.
Resp. at 6. Manigault Newman’s argument suffers at least two fatal defects.

First, Manigault Newman has not identified any provision of the WPA that creates
an affirmative defense to civil litigation. To the contrary, the WPA’s remedial scheme
requires aggrieved former employees to “seek corrective action from the Merit Systems
Protection Board.” 5 U.S.C. § 1221(a); accord Manigault-Speaks v. United States Dep’t
of Health & Hum. Servs., No. CV 19-2529, 2020 WL 5632413, at *5 (D.D.C. Sept. 21,
2020) (Berman Jackson, J.) (no jurisdiction where plaintiff did not “assert that she pursued
her administrative remedies”). After the Board issues a decision, the complainant may
“obtain judicial review of the order or decision,” in “the United States Court of Appeals
for the Federal Circuit or any court of appeals of competent jurisdiction.” 5 U.S.C. §
7703(a)(1), (b)(1)(B); accord Stella v. Mineta, 284 F.3d 135, 142 (D.C. Cir. 2002) (“Under
no circumstances does the WPA grant the District Court jurisdiction to entertain a
whistleblower cause of action brought directly before it in the first instance.”). Thus,
Manigault Newman has not offered a cognizable WPA defense to liability.

Second, even if the WPA created a defense to civil litigation, it would not cover the
conduct at issue here. Manigault Newman specifically cites a provision which prohibits

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officials from “tak[{ing] or fail[ing] to take, or threaten[ing] to take or fail to take, a
personnel action with respect to any employee or applicant for employment[.]” 5 U.S.C. §
2302(b)(8) (emphasis added); accord Def. MSJ at 12. However, Manigault Newman was
not an “employee or applicant for employment” when she made the alleged disclosure or
when the Government initiated this lawsuit. Accordingly, the Government did not violate
the only substantive provision cited by Manigault Newman. See Guzman v. Off: of Pers.
Memt., 53 F. App’x 927, 929 (Fed. Cir. 2002) (per curiam) (“no cause of action under the
Whistleblower Protection Act” where plaintiff “was not an employee or applicant for
employment when she made her alleged disclosure or when [the agency] allegedly took, or
failed to take, a personnel action with respect to her”).

C. Penalty

Because I find that Manigault Newman violated the EIGA, all that remains is the
question of the appropriate penalty. The Government argues that Manigault Newman
should be held liable for $61,585— the inflation-adjusted statutory maximum at the time of
the Government’s motion—“because of the egregiousness of her conduct and her
significant financial resources.”? See Gov. MSJ at 34-36. I agree. Manigault Newman’s

years-long failure to comply with the EIGA after “many written and verbal reminders” is

? While Manigault Newman correctly notes that this amount differs from the $50,000 the
Government requested in its complaint, see Compl. at Prayer for Relief, she does not
dispute that it is within “the discretion of this Court” to impose an appropriate monetary
penalty. Def. Resp. at 4; accord Fed. R. Civ. P. 54(c) (“Every [non-default] final judgment
should grant the relief to which each party is entitled, even if the party has not demanded
that relief in its pleadings.”); Wright & Miller, Federal Practice and Procedure § 2664 (4th
ed. April 2021 update) (“The courts may award damages in excess of those the claimant
asked for in the pleadings|.]”’).

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a “flagrant” violation warranting imposition of “the full civil penalty[.]” Gant, 268 F.
Supp. at 33-34 (RMU). Moreover, Manigault Newman earned a substantial salary—
$179,700—in her former White House role, and her late-filed EIGA report shows that she
is a “1/3 beneficiary” of a trust worth more than $1 million. See Jones Decl. Ex. C at 16.
Given these significant financial resources, I find that imposition of the maximum penalty
is necessary to effectuate the deterrent aims of the EIGA.
CONCLUSION

For all of the foregoing reasons, Manigault Newman’s Motion for Summary
Judgment is DENIED, and the Government’s Motion for Summary Judgment is
GRANTED. A separate Order consistent with this decision accompanies this

Memorandum Opinion.

lus lan

RICHARD J. LEON
United States District Judge

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