TTB Protocols, Procedures, and Investigations

Editor’s Note from John Hinman:  This is the third post in the recent series from Rob analyzing the current state of the TTB and the pending national trade enforcement investigations. In this article Rob not only explains how TTB investigations are funded, organized and conducted but points out where industry members (and industry lawyers) can go to get relief from investigatory overreach.

Especially compelling are Rob’s observations about perceptions by the federal investigators that industry members were not being truthful with TTB, and the effect of those perceptions on the regulatory mindset. The conclusion I draw is many investigators do not understand how the sophisticated business practices they are charged with overseeing are managed day to day, perceive industry members to be criminals and treat trade enforcement as black and white rather than as activity on a spectrum of competitive behavior that would, but for the historic alcohol trade enforcement restrictions, be acceptable for any business.

In a system where monopolistic and oligopolistic behavior is the norm because of the inability of the state and federal regulators to focus on competition rather than competitors, this is a major inhibiting factor in the ability of small market entrants (retailers, distributors and producers alike) to lawfully scale their businesses. Much here is deserving of debate.

Rob is the former Chief Counsel, TTB, from 2003 to 2012 and a former independent consultant.  Today he is the President of the National Association of Beverage Importers (NABI), in Washington, DC, serving as the leading advocacy trade association for importers of distilled spirits, wines, beer/malt beverages, and low-alcohol beverages.  The views expressed in this article are his alone and do not reflect the views of NABI or any of its Members.  Given his 34 years of public service, he writes these articles as a continued contribution to public service.   

Author’s Note from Rob, and a word about John Manfreda

This post was set to be published when I learned of John Manfreda’s death.  We delayed as the past week was a time to grieve and remember a great man.  I always felt I knew John’s personality well and yet I still learned more about him at his funeral mass last Friday.  The overflowing crowd was a tribute few will ever experience.  His youngest son Brendan’s remarks made me smile.  In speaking about his father’s dedication to TTB, he said that the kids characterized TTB as “Too, Too Boring” when Dad talked about it.  Another work-life balance lesson from John for all parents about not taking (and talking) too much of the office home with you.   

People ask me why I am writing these articles.  I tell them because I “can.”  “Can” here simply means that after dealing day and day out with the unfair trade practice provisions for 40 years, I understand them enough to talk about them.  I write the posts to help “level the playing field” between TTB and the alcohol industry.  The trade enforcement laws are old and little known in any comprehensive way so real and serious education is important and one way to accomplish this education is through my writings, and through the audience for serious industry blogs such as the Hinman & Carmichael Booze Rules. 

More important, “can” means that in our Democracy in the United States of America, I “can” criticize the Government and not be jailed.  We “can” speak truth to power.[1]  We take this liberty for granted far too much.  As noted by John’s Editor’s Note in my last blog, the professionals at TTB who work on labels, formulas, basic permits, etc. have all continued to treat me with professional respect, as I have with them.  This is what makes the Government of America exceptional.   

The Move of the TTB Back into the Trade Enforcement Business

Those of you who recall my first article on “The Renaissance of Federal Unfair Trade Practices – Current Issues and Strategies” [2] in January 2018, know that I was very optimistic and positive about TTB moving back into this field of work.  I know Administrator Manfreda was happy also.  Having worked with him since 1978 on enforcing these laws, I knew it was close to his heart.  Perhaps this would be his “swan song.”  Obviously, my readers know that I have “soured” on this optimistic point.  My hope for a successful program has moved to believing it is an “unmitigated disaster” for both the alcohol industry and TTB.  My “final season” blog will explain more later but let me cite three initial reasons now. 

The 2018 Trade Enforcement Seminars – an Opportunity Lost and a Fundamental Mistake in Perception of the Industry

First, at the 2018 trade practice seminars, the Trade Investigations Division (TID) explained how it staffed up for the new trade practice enforcement program with a new $5 million budget. 

TID identified investigators who could work long hours, travel a lot, interview (or interrogate depending on where you sit), undertake complex record analyses, and constructively assemble this information into a cogent case investigation report.  Those investigators who conducted tobacco smuggling cases were prime for this profile.  I agree those skills are a requisite for doing the unfair trade practice investigations. 

What TID failed to tell these investigators, however, was a fundamental mistake.  Tobacco smugglers are true criminals…they are organized crime, they are bad people, and they may be terrorists.  But regulated alcohol industry members are not criminals – that is the mistake. 

Administrative and regulatory infractions are a far cry from a criminal law enforcement investigation involving the serious tax fraud and racketeering statutes that characterizes the tobacco smuggling investigations.  From the start, the investigator cadre used a demeanor in approaching persons in the trade practice investigation as if they were potential criminals.  First impressions matter and you never get a second chance to make a first impression.  From the start, tension and frustration commenced and built never really to be undone.  Unfortunately, the TTB persona has not changed.  The strident tone of the “threats” at the recent unfair trade practice seminar in New York City embodies this mindset. 

The Second Fundamental Mistake – Failure of Management

Second, TTB senior executives failed to manage this program area.  They simply left it to the front-line cadre to do as it pleases.  The TTB Executives built a broader than necessary (or legally required) firewall between themselves and the investigators.  Any attempt to bring to the attention of these TTB Senior Executives concerns about the process and procedures of the trade practice enforcement program was dismissed as “interference with a pending investigation” aka “obstruction of justice” regardless of whether the target wanted to discuss the merits of an investigation or simply the heavy-handed nature of the process. 

All the TTB Senior Executives hear about this program are the raw numbers of offers in compromise, suspensions, and other sanctions.  TTB is hugely driven by raw numbers, data-analytics, dashboards, and balanced score cards.  But things are not always as they appear and the meanings behind raw numbers are often never examined when they need to be examined. 

As my previous article on cash awards observed, this obsession with numerical results likely leading to cash awards, etc. poses another concern.  The strident focus on each succeeding offer in compromise being higher than the last (regardless of circumstances) corroborates this obsession.  This led to a “power drunk” first line approach to enforcement that has marred in a lasting manner the reputation of TTB with key elements of the industry.  For this absolute failure of management by the TTB Senior Executives, there must be an accounting. 

The Third Failure of the Trade Practice Enforcement Initiative is Inconsistent Sanctions and Expensive Misguided Enforcement Actions.

Since the trade practice enforcement initiative started following the $5 million line item funding, TTB has accepted offers in compromise ranging from $325,000 to $2.5 million.  Based on a review of the Abstract and Statements published on the TTB website, there is no "rhyme or reason" for the wide-ranging dollar amounts in each case. TTB relies on a four-element formula in determining the appropriate dollar amount of a settlement.  These are willfulness, cooperation, market impact, and compliance history.  Having participated in settlement discussions with TTB, sometimes you are told "we have to be consistent" and the next moment you are told "that each case is unique."  So, you end up being consistently unique which leads to arbitrary and discretionary results.  This is one area where more in-depth oversight by TTB Senior Executives could have forced transparent standards for settlements.  An operational review of the program by the Treasury Inspector General and the Government Accountability Office would shed light on the inconsistent settlements.  As they stand now, they are simply raw numbers with no correlation and no indication of how they are leveling the playing field which is the stated goal of the trade practice initiative. 

The goal of the trade practice enforcement initiative to level the playing field is also not apparent in the present enforcement actions.  TTB has issued multiple orders to show cause against small wineries in California (and elsewhere) alleging consignment sales violations.  These all have roots to the same distributor.  Four administrative law judges are assigned to these cases, with multiple TTB attorneys assigned.  The dollar amount of taxpayer funded TTB resources to prosecute these multiple actions is significant.  Similarly, the costs of defense are great.  When you look at the small quantities of wine produced by these small family wineries combined, it is minuscule compared to the over 30 million liters of wine produced annually in California.  If this is the best that TTB can do to level the playing field, something is broken; or this is a solution looking for a problem.  Again, it is a raw numbers game to make a small market impact look bigger than it is.  A program review by the Treasury Inspector General and the Government Accountability Office would assess what exactly is the leveling of the marketplace here by targeting these small businesses. 

What Can be Done? Send a Report and Comments to the Secretary of the Treasury and ask for an Inspector General Investigation.

At both ATF and TTB in days past, often some of us lawyers would say “well no one died and made me King” so I do not make the final program decision here.  If I were King, I would tell Secretary Mnuchin to shut down this program and ask the Office of the Treasury Inspection General to undertake a program investigation and assessment report and ask congressional oversight to contact the Government Accountability Office (GAO) to do the same.  

If you agree, please send your views to the Secretary.  Meanwhile, this article must do and copy and send it if you agree with us.

More will come with the final article in the series, but now let’s move to the current “Sword of Damocles.”[3]

Truth is always the American Way…and is a Two-way Street. Sanctions Go Both Ways.

For democracy to work, the people must be truthful with their Government and their Government must be truthful with them.  This dual universe is essential in our democracy in the United States of America.  It is the part of the “social contract” we have as citizens and is analogous on the commercial contract principle of mutuality of obligations.  When we make promises we must keep them.

When that trust or social contract is broken, sanctions come into play.  When a citizen lies to his/her Federal Government, then the United States Criminal Code comes into play under Title 18, United States Code, Section 1001.  When the Federal Government employee lies to the citizen, then the Standards of Conduct of Federal Employees under Federal ethics laws comes into play.  In the latter case, possible civil legal liability comes as well under constitutional torts and civil rights statutes.  All are seriously sanctionable events.   

“The Truth Shall Make You Free” (And Keep you Out of Jail) – Hearing the Truth Can Be Frustrating to Investigators When They Can’t Ask the Right Questions – The Section 1001 Violation by Making a “false or fictitious” Statement is Worse than the Underlying Trade Enforcement Charge.

When TTB started these investigations in 2017, it was a new experience for employees of retailers, distributors, suppliers, importers, and promotion companies and other third parties who had never seen or met a TTB official before.  The aggressiveness of the investigations also set a tone that was perplexing and probably upsetting to many of those being interviewed.  Most people when confronted with Federal employees asking questions, perhaps leading questions, that assume violations are unsure what is happening.  This can lead to perceptions by the Federal investigators that industry members and witnesses (such as retailers) were not leveling with TTB or telling the truth about trade practice matters.  TTB likely then views these as felony violations of lying to the Government under Title 18, United States Criminal Code, section 1001.[4]   

Lying to the Government is serious, as recent events with Special Counsel Mueller’s investigation has educated the public.  Frequently, you get into more trouble for lying to the Government than you do for the underlying crime.  In the FAA Act trade practice context this is especially true given the criminal penalty under this Act is described as a misdemeanor or an infraction under the Sentencing Guidelines and other Federal criminal modernization statutes; and violating Section 1001 is a felony. 

In September 2017, I served on a panel at the Center for Alcohol Policy symposium that focused on the joint trade practice investigations between TTB and the State ABCs.  In response to a question on the absence of Federal law sanctions on retailers, I did stress the point that section 1001 offered a potential serious sanction.  Eric Shepard highlighted that in his article on this panel.[5] 

Generally, section 1001 is violated where a person knowingly or willfully makes a false or fictitious statement to the Government of a material fact.  Where TTB believes that a person has committed a section 1001 violation, then the proper course of action is to refer the matter to the local United States Attorney’s Office for prosecution in the Federal District Court with venue over the person who allegedly lied to TTB.  While TTB might refer the matter to the Criminal Division at the Department of Justice in Washington, DC, generally this would not be the course followed because the U.S. Attorney is protective of his/her District and frowns upon an outside lawyer coming into the local Federal district courts. 

Most important, the U.S. Attorney decides whether to prosecute a person for a section 1001 violations.  This is not a TTB decision.  That U.S. Attorney independently evaluates the strengths and weaknesses of the charge by the bureau and decides whether to take the matter to Federal district court.  The U.S. Attorney will look at the context, circumstances, and situation in which the alleged false or fictious statement was made. TTB must convince the U.S. Attorney to take the case.  Ultimately, the Government must prove you are guilty; you do not have to prove you are innocent. 

This is a potential new “sword of Damocles” hanging over the trade enforcement investigations. In some trade practice settlements, there has been a unilateral decision by TTB about the prior termination of a basic permit. We discussed this unilateral action and how it has been abused to strong arm a settlement in a prior article.  In these cases, TTB is “judge and jury.” 

The section 1001 situation is different.  If TTB in anyway suggests that they may take a potential case to the U.S. Attorney where a settlement is otherwise not reached, that U.S. Attorney is an independent buffer; unlike the basic permit scenario, TTB does not control the entire process.  The U.S. Attorney must be convinced to accept a prosecution recommendation from TTB.  Many industry members have local counsel in law firms that routinely interact with their local U.S. Attorney’s Office.  They know well the independence of those offices.  This is where good legal advice is critical.

Speaking Truth to Power – the Standards of Conduct, the Complaint Process and Going to The Inspector General.

Lying to the Government is serious.  But what about the situation where you think the Government has lied to you?  What is the opposite side of the coin here?

The Executive Branch recognizes that the Government lying to a citizen is serious.  The Department of the Treasury has a mechanism in place to investigate allegations of misconduct by Treasury Department employees which includes TTB employees.  TTB does not have its own Internal Affairs function.  The Office of the Treasury Inspector General is authorized to investigate alleged misconduct by TTB employees.[6]  Misconduct covers a wide-range of activities.  Perhaps misconduct like obscenity, as Supreme Court Justice Stewart famously remarked, is something you know when you see it.  If you feel you have been the victim of misconduct, then making an online referral to the Office of the Inspector General is appropriate.  The link below takes you to the compliant format for a submission. 

https://www.treasury.gov/about/organizational-structure/ig/Pages/OigOnlineHotlineForm.aspx  

Below is a listing of the Standards of Conduct Applicable to Federal Employees in the Executive Branch, such as the Department of the Treasury.  Some apply Executive Branch wide and others apply only the Treasury Department employees and TTB employees.  These are available to you on the U.S. Office of Government Ethics website.[7]  Importantly, they apply to all Executive Branch employees, investigators, attorneys, auditors, supervisors, managers, and executives.   

·        Standards of Conduct for Employees of the Executive Branch promulgated by the United States Office of Government Ethics. Title 5, Code of Federal Regulations, Part 2635.

Authority:

5 U.S.C. 7301, 7351, 7353; 5 U.S.C. App. (Ethics in Government Act of 1978); E.O. 12674, 54 FR 15159, 3 CFR, 1989 Comp., p. 215, as modified by E.O. 12731, 55 FR 42547, 3 CFR, 1990 Comp., p. 306.

·        Supplemental Standards of Conduct for Employees of the Department of the Treasury, Title 5, Code of Federal Regulations, Sections 3101.101 to 3101.111.

·        Employees Responsibilities and Conduct, Title 5, Code of Federal Regulations, Part 735. 

·        Additional Employee Rules of Conduct (Treasury Department), Title 31, Code of Federal Regulations, Part 0.  

Reporting Agency Misconduct – the Steps and Considerations

It is imperative you discuss any situation with your legal counsel before undertaking any course of action.  This article provides general directions on where resources of legal information are available and is not giving you legal advice on any specific situation.  However, these scenarios are examples of the situations that should be discussed with your lawyer.

1.     Have you or an employee been approached by an investigator seeking information from you outside of “reasonable times?”  The examination authority for trade practice investigations is codified in the FAA Act, by an incorporation by reference of the “examination” and subpoena authority in the Federal Trade Commission (FTC) Act.[8]  TTB has not defined “reasonable times,” nor do I believe has the FTC in its use of this examination authority.  Neither TTB or the FTC have any published guidance on this examination authority.[9] 

2.     TTB has examination authority under the FAA Act and inspection authority under the Internal Revenue Code of 1986 (IRC).  The IRC inspection authority is much broader than the examination authority under the FAA Act. TTB investigators conducting tobacco smuggling investigations would have been using IRC inspection authorities sometimes and so they are accustomed to them.[10]  But TTB cannot use its IRC authority to conduct an FAA Act trade practice investigation.  This legal distinction is important because of the joint investigations with the State ABC agencies.  Information collected under the IRC authority can be shared with a State tax agency[11] of which most State ABCs are not.  Some other disclosure provisions might apply but they are of limited application.  The Treasury Inspector General is very acquainted with the IRC disclosure restrictions and is in the best position to make those assessments upon a complaint being filed.  If your confidential information is being wrongfully shared between state and federal agencies you may have recourse.

3.     Have you or an employee felt pressured or misled by a TTB employee during an investigation? 

4.     These are fact specific situations and, again, must be discussed with your local counsel while at the same time realizing that the Treasury Inspector General is accustomed to sorting out these situations.  I am not giving many examples here because deciding whether a matter should be referred to the Treasury Inspector General should be considered carefully.  However, OIG is independent, professional, and serious in their work and feel comfortable in referring matters to that office.    

TTB has a Values Statement which does not rise to the level of a Standard of Conduct but remains a basis for requiring TTB employees to treat members of the public with respect.[12] If you have not been accorded the proper standard of respect that should be reported.

Standards of Conduct, Current or Future Administrative Proceedings and Prior Agency Misconduct Record of the Investigator.

If you are confronted with an allegation by TTB that you lied to them during an investigation, and you did not, one of the first things to inquire about is whether the TTB employees involved in the investigation of your business have any history of Office of Inspector General integrity or misconduct investigations or findings with some reprimand consequences.  Importantly, this inquiry should cover any incident of alleged misconduct and not simply one relating to an investigation relating to you.  If concluded, these matters should be recorded in the OPM official file on the employee.  If pending, then TTB likely must contact the Office of the Inspector General for clarification or confirmation. 

This information is important for any administrative proceeding where a TTB employee testifies. Your counsel at the hearing will best know how to utilize this information.  

Additionally, in any matter referred to a U.S. Attorney’s office, this is an important factor.  Any U.S. Attorney will want to know this.  The U.S. Attorney needs to assess the credibility of the TTB employee as a witness in a section 1001 criminal prosecution, particularly if a jury is involved.  I recall from my days at ATF there were special agents who could not work on firearms investigations because of a past adverse integrity finding by the Office of Internal Affairs.  No Assistant United States Attorney would dare put that special agent on the witness stand in front of a judge and jury.  They stayed on the payroll and did desk jobs. 

Constitutional Torts and Deprivation of Civil Rights Under Color of State Law in Joint TTB-State ABC Investigations- the Section 1983 Civil Rights Cases Remedy

This is only an overview and checklist and any pursuit of these options requires consultation with your lawyer. 

Essentially, in the 1970s the Supreme Court established a personal liability of Federal employees for actions that violated clearly established constitutional rights of the public.[13]  Federal employees were acting outside the scope of their employment where they violated a person’s constitutional rights and, therefore, fell outside the scope of sovereign immunity.  For this conduct, there is only a qualified immunity.  Your lawyer can assistant you in assessing whether any investigative conduct you feel was (or is) inappropriate rises to this level of a constitutional tort. 

Federal and State joint investigations raise another personal liability potential that does not arise in a stand-alone Federal investigation.  A civil action for redress may be filed for deprivation of civil rights under color of State law based on Title 42, United States Code, section 1983.[14]  Generally, at ATF and TTB we got these cases dismissed against Federal employees because the bureau’s operations were under color of Federal law and not State law.  Joint investigations by Federal and State agencies, however, blur those lines.  It becomes less clear on how and under what authority TTB or the State agency interviewed and obtained information—under State law or under Federal.  Again, consultation with your lawyer is essential here because the facts—known to you or obtained through discovery—are paramount. 

Conclusion – The Truth Shall Set You Free

Truthfulness, candor, transparency in interviews and conversations is vital for our executive branch institutions to work in the American democracy.  When that breaks down, sanctions come into play for all parties involved—the public and the Government.  Knowing your rights as to what you can expect from the Government is essential for a level playing field in the current trade practice investigative and enforcement environment.  Working with your legal counsel is vital. 

TTB has tools in its tool box to go after lying.  However, there are also tools in the tools boxes of citizens and industry members that kept me awake at night as Chief Counsel wondering when and where they might appear.  Our democracy only works if the playing fields are level, in the same manner that the present trade practice investigations are aimed at “leveling the playing field.” 

Help Us Pull Information from TTB through our FOIA Requests.

Following up on my last article, please donate to my crowd source funding site to cover the FOIA costs for the TTB awards and bonus information at  https://www.kickstarter.com/projects/ttbfoia/government-transparency-federal-ttb-bonus-payments?ref=project_build   Small and large donations are appreciated.  The fees may exceed the $2000 goal so please donate.  I will post information on the disposition of all funds donated and will follow up with findings.   

Finally, I want to thank John Hinman for being the messenger through his law firm’s blog.  His professional courtesy cannot be overstated here.  Without it being said, those who know John and the “ferocious” ways in which he protects and represents his clients, his place here is not unexpected. 

[1] My first speaking engagement after retiring from TTB in 2012, was a panel with my good friend and professional colleague then retiring Lou Bright, former General Counsel of the Texas ABC.  At the invitation of Jim Seff and Marc Sorini, our invited topic was “Speaking Truth to Power” in our respective roles when we served as the top legal advisors to our agencies. 

[2] https://www.beveragelaw.com/booze-rules/2018/1/29/the-renaissance-of-federal-unfair-trade-practices-current-issues-and-strategies 

[3] https://en.wikipedia.org/wiki/Damocles 

[4] (a) Except as otherwise provided in this section, whoever, in any matter within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States, knowingly and willfully—

(1)

falsifies, conceals, or covers up by any trick, scheme, or device a material fact;

(2)

makes any materially false, fictitious, or fraudulent statement or representation; or

(3)

makes or uses any false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry;

shall be fined under this title, imprisoned not more than 5 years or, if the offense involves international or domestic terrorism (as defined in section 2331), imprisoned not more than 8 years, or both. If the matter relates to an offense under chapter 109A, 109B, 110, or 117, or section 1591, then the term of imprisonment imposed under this section shall be not more than 8 years.

(b)

Subsection (a) does not apply to a party to a judicial proceeding, or that party’s counsel, for statements, representations, writings or documents submitted by such party or counsel to a judge or magistrate in that proceeding.

(c) With respect to any matter within the jurisdiction of the legislative branch, subsection (a) shall apply only to—

(1)

administrative matters, including a claim for payment, a matter related to the procurement of property or services, personnel or employment practices, or support services, or a document required by law, rule, or regulation to be submitted to the Congress or any office or officer within the legislative branch; or

(2)

any investigation or review, conducted pursuant to the authority of any committee, subcommittee, commission or office of the Congress, consistent with applicable rules of the House or Senate.

(June 25, 1948, ch. 645, 62 Stat. 749; Pub. L. 103–322, title XXXIII, § 330016(1)(L), Sept. 13, 1994, 108 Stat. 2147; Pub. L. 104–292, § 2, Oct. 11, 1996, 110 Stat. 3459; Pub. L. 108–458, title VI, § 6703(a), Dec. 17, 2004, 118 Stat. 3766; Pub. L. 109–248, title I, § 141(c), July 27, 2006, 120 Stat. 603.)

[5]“ Former chief counsel for TTB Rob Tobiassen reminded fed-state regulator partnerships, like one in Fla right now, can give regulators “two bites at the apple” and result in deterrence, voluntary compliance.  Feds’ ability to reach across US can be a “persuasive tool,” Rob said.  Tho feds can’t enforce laws vs retailers, if retailer makes false statements during investigation, that’s a felony, an “amazingly broad tool” that’s often overlooked.”    INSIGHTS Express, Vol 19, No. 171 (September 11, 2017) 

[6] The Department of the Treasury’s Office of Inspector General (OIG) was established in 1989 by the Secretary in accordance with the Inspector General Act. 

The Office of Investigations is responsible for investigating criminal activity and employee misconduct associated with the operations of the following Treasury Bureaus:

·         United States Mint

·         Bureau of Engraving and Printing

·         Bureau of the Fiscal Service

·         Office of the Comptroller of the Currency

·         Financial Crimes Enforcement Network

·         Alcohol and Tobacco Tax and Trade Bureau

·         Community Development Financial Institution Fund

·         Departmental Offices: 

   o   Office of Foreign Assets Control

   o   Office of Terrorism and Financial Intelligence

   o   Office of Financial Stability

https://www.treasury.gov/about/organizational-structure/ig/Pages/OIG-Office-of-Investigations.aspx 

[7] https://www.oge.gov/web/oge.nsf/Laws+and+Regulations/ 

[8] Title 27, United States Code, Section 202: 

(g) Applicability of other laws

The provisions including penalties, of sections 49 and 50 of title 15, shall be applicable to the jurisdiction, powers, and duties of the Secretary of the Treasury under this chapter, and to any person (whether or not a corporation) subject to the provisions of laws administered by the Secretary of the Treasury under this chapter.

https://www.govinfo.gov/content/pkg/USCODE-2014-title27/html/USCODE-2014-title27-chap8.htm  

Title 15, United States Code: 

§49. Documentary evidence; depositions; witnesses

For the purposes of this subchapter the Commission, or its duly authorized agent or agents, shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any person, partnership, or corporation being investigated or proceeded against; and the Commission shall have power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation. Any member of the Commission may sign subpoenas, and members and examiners of the Commission may administer oaths and affirmations, examine witnesses, and receive evidence.  (Emphasis added.)

Such attendance of witnesses, and the production of such documentary evidence, may be required from any place in the United States, at any designated place of hearing. And in case of disobedience to a subpoena the Commission may invoke the aid of any court of the United States in requiring the attendance and testimony of witnesses and the production of documentary evidence.

Any of the district courts of the United States within the jurisdiction of which such inquiry is carried on may, in case of contumacy or refusal to obey a subpoena issued to any person, partnership, or corporation issue an order requiring such person, partnership, or corporation to appear before the Commission, or to produce documentary evidence if so ordered, or to give evidence touching the matter in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof.

Upon the application of the Attorney General of the United States, at the request of the Commission, the district courts of the United States shall have jurisdiction to issue writs of mandamus commanding any person, partnership, or corporation to comply with the provisions of this subchapter or any order of the Commission made in pursuance thereof.

The Commission may order testimony to be taken by deposition in any proceeding or investigation pending under this subchapter at any stage of such proceeding or investigation. Such depositions may be taken before any person designated by the commission and having power to administer oaths. Such testimony shall be reduced to writing by the person taking the deposition, or under his direction, and shall then be subscribed by the deponent. Any person may be compelled to appear and depose and to produce documentary evidence in the same manner as witnesses may be compelled to appear and testify and produce documentary evidence before the Commission as hereinbefore provided.

Witnesses summoned before the Commission shall be paid the same fees and mileage that are paid witnesses in the courts of the United States and witnesses whose depositions are taken and the persons taking the same shall severally be entitled to the same fees as are paid for like services in the courts of the United States.

(Sept. 26, 1914, ch. 311, §9, 38 Stat. 722; Pub. L. 91–452, title II, §211, Oct. 15, 1970, 84 Stat. 929; Pub. L. 93–637, title II, §203(b), Jan. 4, 1975, 88 Stat. 2198.)

https://www.govinfo.gov/content/pkg/USCODE-2014-title15/html/USCODE-2014-title15.htm  

[9] TTB regulations simply repeat the statutory language.  See, Title 27, Code of Federal Regulations, sections 6.6, 8.6, 10.6, and 11.6. 

[10] These investigations may have been conducted under the Trafficking in Contraband Cigarettes, 18 USC Chapter 114, which his not an IRC investigation.  This is one of the authorities that the President’s Budget Proposal would transfer from ATF to TTB. 

[11] Title 26, United States Code, section 6103(d). 

[12] TTB Annual Report of Fiscal Year 2018: (Page iv)

VALUES

We value:

●PEOPLE. We support each other through teamwork and collaboration, leveraging diversity and inclusivity.

●INTEGRITY. We foster trust through honesty and transparency, conduct ourselves with professionalism and candor, and treat others with respect.

●RESULTS. We are accountable and committed to delivering meaningful results. ●ACCESSIBILITY. We are available to the public and our colleagues through communication and partnership.

●INNOVATION. We are creative and resourceful in achieving the mission, taking manageable risks and adapting based on results

https://www.ttb.gov/foia/pdf/ttbar2018.pdf  

  

[13] Bivens v. Six Unknown Named Agents, 403 U.S. 388 (1971), 

[14] 42 U.S. Code § 1983. Civil action for deprivation of rights.

Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress, except that in any action brought against a judicial officer for an act or omission taken in such officer’s judicial capacity, injunctive relief shall not be granted unless a declaratory decree was violated or declaratory relief was unavailable. For the purposes of this section, any Act of Congress applicable exclusively to the District of Columbia shall be considered to be a statute of the District of Columbia.

(R.S. § 1979; Pub. L. 96–170, § 1, Dec. 29, 1979, 93 Stat. 1284; Pub. L. 104–317, title III, § 309(c), Oct. 19, 1996, 110 Stat. 3853.) 

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  2. WHEN THE INVESTIGATOR COMES CALLING – BEST PRACTICES.
  3. RESPONSIBLE BEVERAGE SERVICE ACT PROPOSED ABC RULES 160 TO 173 – WHY THE RUSH?
  4. The TTB Crusade Against Small Producers and the “Consignment Sale” Business Model
  5. TTB Protocols, Procedures, and Investigations
  6. Wine in a 250 ML can – the Mystery of the TTB packaging Regulations and Solving the Problem by Amending the Regulations
  7. The Passing of John Manfreda of the TTB: a Tragedy for his family and a Tragedy for the Industry he so Faithfully Served for so Long.
  8. Pride in a Job Well-done, or Blood Money? The Cost of Learning the Truth from the TTB about the Benefits to Investigators from Making Cases Against Industry Members
  9. How ADA Website Compliance Works – The Steps You Can Take to Protect Yourself, Your Website and Your Social Media from Liability
  10. Supplier and Distributor Promotional “Banks,” Third Party Promotion Companies and Inconsistent TTB Enforcement, Oh My!
  11. “A Wrong Without a Remedy – Not in My America” – The TTB Death Penalty for Not Reporting Deaths
  12. Is a 1935 Alcohol Beverage Federal Trade Practice Law Stifling Innovation?
  13. Decoding the BCC’s Guidance on Commercial Cannabis Activity.
  14. Prop 65 - Escaping a "Notice of Violation"
  15. TTB Consignment Sales Investigations - What is Behind the Curtain of the TTB Press Releases?
  16. Heads Up! The ABC Is Stepping Up Enforcement Against Licensees Located Near Universities
  17. Coming Soon: New Mandatory Training Requirements for over One Million “Alcohol Servers” In California – September 1, 2021 will be here quickly
  18. 2019 Legislative Changes for California Alcohol Producers – a Blessing or a Curse?
  19. A Picture (On Instagram) Is Worth A Thousand Words
  20. Playing by the Rules: California Cannabis Final Regulations Takeaways
  21. Hinman & Carmichael LLP Names Erin Kelleher Partner and Welcomes Gillian Garrett and Tsion “Sunshine” Lencho to the Firm
  22. Congress Makes History and Changes the CBD Game for Good
  23. Pernicious Practices (stuff we see that will get folks in trouble!) Today’s Rant – Bill & Hold
  24. CBD: An Exciting New Fall Schedule… or Not?
  25. MISSISSIPPI RISING - A VICTORY FOR LEGAL RETAILER TO CONSUMER SALES, AND PASSAGE OF TITLE UNDER THE UNIFORM COMMERCIAL CODE
  26. California ABC's Cannabis Advisory - Not Just for Stoners
  27. NEW CALIFORNIA WARNINGS FOR ALCOHOLIC BEVERAGES AND CANNABIS PRODUCTS TAKE EFFECT AUGUST 30, 2018, NOW INCLUDING ADDENDUM REGARDING 2014 CONSENT AGREEMENT PARTIES AND PARTICIPANTS
  28. National Conference of State Liquor Administrators – The Alcohol Industry gathers in Hawaii to figure out how to enforce the US “Highly Archaic Regulatory Scheme.”
  29. Founder John Hinman Honored with the Raphael House Community Impact Award
  30. ROUTE TO MARKET AND MARKETING RESTRICTIONS - NAVIGATING REGULATORY SYSTEM CONSTRAINTS
  31. Alcohol and Cannabis Ventures: Top 5 Legal Considerations
  32. ATF and TTB: Is Another Divorce on the Horizon? What’s Going on with the Agency?
  33. STRIKE 3 - YOU REALLY ARE OUT! THE ABC'S STRICT APPLICATION OF PENALTIES FOR SALES TO MINORS
  34. TTB Temporarily Fixes Problem with Fulfillment Warehouse Tax Credits - an “Alternate Procedure” for Paying Taxes & Reporting
  35. CUSTOMERS WHO HAVE HAD ONE TOO MANY - THE FREE TRANSPORTATION DILEMMA
  36. The Renaissance of Federal Unfair Trade Practices - Current Issues and Strategies
  37. ‘Twas the week before New Year’s and the ABC is out in Force – Alerts for the Last Week of 2017, including the Limits on Free Rides
  38. Big Bottles, Caviar and a CA Wine Strong Silent Auction for the Holidays!
  39. The FDA and the Wine and Spirits Industry – Surprise inspections anyone?
  40. NORTHERN CALIFORNIA WILDFIRES: UPDATED REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  41. NORTHERN CALIFORNIA WILDFIRES: REGULATORY AGENCY DISASTER RELIEF RESOURCES AT A GLANCE
  42. Soon to come to your Local Supermarket– Instant Redeemable Coupons of the digital age!
  43. The License Piggyback Dilemma – If it Sounds Too Good to be True, it Probably is
  44. A timely message from our Florida colleagues on the tied house laws, the three-tier system and the need for reform
  45. ABC Declaratory Rulings – A Modest Proposal Whose Time has Come
  46. More on FDA Inspections - Breweries, Distilleries and Questions
  47. WHY THE FDA IS INSPECTING WINERIES
  48. Senate Bill 378—The Proposed Demise of Due Process for Alcohol Licensees
  49. ABC Enforcement - Trends and Predictions
  50. The Corruption Chronicles – Volume One: A New Hope
  51. New Alcohol Delivery Oversight on the Horizon
  52. Michigan: Canary in the DtC Coal Mine?
  53. California ABC and Federal Credit Laws – Active Enforcement and Lots of Questions!
  54. Big Bottles For The Holidays - The Highest Calling Of The Winemaker's Art
  55. FINAL COMMENTS TO TTB NOTICE 160 DUE ON WEDNESDAY DECEMBER 7TH – WE ARE ASKING THE TTB TO EXTEND THE COMMENT PERIOD AGAIN TO ALLOW FOR INDUSTRY NEGOTIATION AND ALIGNMENT OF INTERESTS
  56. SONOMA COUNTY WINERY USE PERMITS, EVENT RESTICTIONS AND DTC
  57. New TTB Labeling Requirement Regulations: Out-of-State Bottling Is Not Created Equal and Consumers Right to Know Where the Grapes in their Wine Come from is Compromised
  58. Isn't A Written Agreement With A Distributor Worthless In A Franchise State?
  59. Crowd Funding for Alcohol Producers and Retailers – Down the Rabbit Hole with the Tied House laws
  60. Everything you ever wanted to know about the BPA Warning Statement but were afraid to ask
  61. AB 2082 - A Hunting License for Police and a Lethal Weapon for Politicians that Deprives Licensees of Currently Available Due Process Rights
  62. “Better Late Than Never”-- Judge in Illinois Dismisses 201 Sales Tax Cases against Retailers
  63. The Day the Music Almost Died: The Story of the BottleRock ABC Accusations, the ABC Appeals Board and a Victory for a Common Sense Interpretation of the Tied House Laws
  64. The Arsenic in Wine Class Action Dismissal – what it means
  65. Counterfeit or Artisanal Mexican Spirits? Pick your Poison, or your lime wedge
  66. Warning - CA ABC enforcement teams are on the prowl this weekend!
  67. RELIEF AT LAST! ILLINOIS MOVES TO FIX THE SALES TAX LAWSUITS AGAINST OUT-OF-STATE SELLERS BUT PROPOSES TO PENALIZE WINERIES AND RETAILERS THAT SHIP WITHOUT PERMITS
  68. The TTB Speaks on Category Management or, be Careful What you Ask for Because you might Get it!
  69. Hinman & Carmichael LLP Announces the Addition of Jeremy Siegel to its team of top beverage law lawyers
  70. 2016 LEGISLATIVE UPDATES: Part IV
  71. 2016 LEGISLATIVE UPDATES: Part III
  72. 2016 LEGISLATIVE UPDATES: Part II
  73. 2016 LEGISLATIVE UPDATES: Part I
  74. Hinman & Carmichael LLP is Hiring!
  75. John Hinman Presents NBI Webinar on Basics of Alcohol Beverage Law
  76. ABC DISMISSES SAVE MART GRAPE ESCAPE ACCUSATION BUT REFUSES TO ADOPT JUDGE’S DECISION FINDING NO STRICT LIABILITY FOR ABC VIOLATIONS
  77. Speakeasies are still with us, and proliferating!
  78. The War for the Soul of Sonoma County – the Winery Working Group Battle
  79. Santa Claus isn’t the only one coming to town this Christmas!
  80. Arizona's Direct to Consumer Shipping Rules - An Exercise in Complexity
  81. AB 780 - Social Media and the ABC: The California Legislative “Fix” that Fails
  82. Illinois Finally Offers Certainty and Relief for Victims of Sales Tax Lawsuits, but Prompt Action is Required in Pending Cases
  83. A Modest Proposal – Adopt the federal rule on Tied-House liability in California
  84. The Grapes Escaped - Why the First Amendment Matters
  85. Appellate Court Ruling Strikes Blow Against State’s Arbitrary Beer Label Ban
  86. Illinois Attorney General's Office Announces Intention to Dismiss False Claims Act Against Liquor Retailers
  87. Commercial Speech And Alcoholic Beverages - Part III
  88. Commercial Speech And Alcoholic Beverages - Part II
  89. Craft Beverages: Social Media Marketing the Effective and Compliant Way
  90. Commercial Speech And Alcoholic Beverages - Part I
  91. A LAYPERSON LOOKS AT ARSENIC IN WINE
  92. The Biggest Retailer in the World vs. the TABC
  93. Rebecca Stamey-White presents Emerging Issues in Wine Law
  94. Top Beverage Alcohol Law Firm Adds and Elevates Partners
  95. Illinois Qui Tam Lawsuits—Private Enforcement Of a State Claim: A Bonanza For A Plaintiff’s Lawyer And A Rip-Off Of Retailers
  96. BOOZE RULES OF SOCIAL MEDIA: The Retailer Right to Pay Exception
  97. LIONS AND TIGERS AND TWEETS, OH MY!
  98. AB 2004: Brewer's Incremental Parity with Wine Makers
  99. Expanding, Proud Of It, and Wanting to Tell the World
  100. DC Weighs in Strongly on Third Party Marketer Delivery Services