Source of Funds for Payment of Civil Penalties Imposed on Federal Agencies
Highlights
Administrative penalties against the Department of the Navy were imposed by several local air pollution control agencies when Navy operations violated State air pollution regulations. The Navy Department asked the Department of Justice to certify the penalties assessed in these instances as compromise settlements to avoid imminent litigation. The Justice Department requested the opinion of GAO concerning the available source of payment for the civil penalties. Based on applicable provisions of the law, GAO provided the following payment criteria: (1) Civil penalties imposed administratively on Federal facilities by State or local agencies for violations of local air pollution regulations must be paid from the Federal agency's appropriation if incurred in the course of activities necessary and proper or incidental to fulfilling the purposes for which the appropriation was made. (2) If the agency does not dispute the basis for or the amount of the fine, the fine or penalty may not be referred to the Attorney General for defense of imminent litigation; therefore, funds appropriated for payment of compromise settlements and negotiated by the Attorney General in connection with imminent litigation are not available for payment of the fine. (3) Civil penalties imposed on Federal agencies by the courts after suit is brought against the agencies for violation of local air pollution laws, either in accordance with the terms of the consent decree or stipulated settlement, or as a result of judgment on the merits, may be paid from a permanent indefinite appropriation for judgments and compromise settlements established by statute.