United States v. Oversight

• Decision Date: 21 March 2012
• Docket Number: Civil Action No. 03–0096(JDB).
• Parties: UNITED STATES of America, Plaintiff, v. PROJECT ON GOVERNMENT OVERSIGHT, et al., Defendants.
• Court: U.S. District Court — District of Columbia

839 F.Supp.2d 330

UNITED STATES of America, Plaintiff,

v.PROJECT ON GOVERNMENT OVERSIGHT, et al., Defendants.

Civil Action No. 03–0096(JDB).

United States District Court,

District of Columbia.

March 21, 2012.

Judith Rabinowitz, U.S. Department of Justice, San Francisco, CA, Bradley Michael Brinkman, U.S. Department of Justice, Washington, DC, for Plaintiff.

Andrew Dewald Herman, Ross Andrew Nabatoff, Stanley McKennett Brand, Brand Law Group PC, Washington, DC, for Defendants.

Robert A. Berman, Vienna, VA, pro se.

MEMORANDUM OPINION

JOHN D. BATES, District Judge.

This matter is before the Court on remand from the D.C. Circuit. On February 11, 2008, a jury found that defendants Robert Berman and the Project on Government Oversight (“POGO”) had violated 18 U.S.C. § 209, which prohibits making “any contribution to or supplementation of salary” to a federal employee “as compensation for his services as an officer or employee of the executive branch of the United States Government,” and prevents federal employees from accepting any such payments. This Court assessed a civil penalty of $383,600 against Berman and $120,000 against POGO, and both defendants appealed. The D.C. Circuit found that the jury had been improperly instructed on the issue of intent and that the error was not harmless. It therefore vacated the jury's verdict and remanded the case to this Court. On remand, the United States has sought summary judgment against only defendant Berman, and has indicated that it plans to proceed against POGO at a later trial. See Notice of Intentions Regarding Summary Judgment [Docket Entry 138]; see also Tr. of Status Hearing (Nov. 19, 2011) at 6. Berman has cross-moved for summary judgment and moved to dismiss the case based on the government's allegedly improper conduct. For the reasons given below, the Court will deny both of Berman's motions and grant in part the government's motion for summary judgment.

BACKGROUND

The background of this case has been recited in numerous opinions, so only the most important facts will be summarized here. See United States v. POGO, No. 03–96, Order [Docket Entry 31] (“ POGO I ”); United States v. POGO, 454 F.3d 306 (D.C.Cir.2006) (“POGO II ”); United States v. POGO, 484 F.Supp.2d 56 (D.D.C.2007) (“POGO III ”); United States v. POGO, 525 F.Supp.2d 161 (D.D.C.2007) (“POGO IV ”); United States v. POGO, 531 F.Supp.2d 59 (D.D.C.2008) (“POGO V ”); United States v. POGO, 543 F.Supp.2d 55 (D.D.C.2008) (“POGO VI ”); United States v. POGO, 572 F.Supp.2d 73, 75–77 (D.D.C.2008) (“POGO VII ”); United States v. POGO, 616 F.3d 544 (D.C.Cir.2010) (“POGO VIII ”).

The case arose in the 1980s when Robert Berman, then a senior economist in the Office of Policy Analysis within the Department of the Interior (“DOI”), became interested in the proper valuation of oil royalties. His concern was that oil companies were underestimating the royalties they are required to pay when they extract oil from federal or Native American lands. POGO IV, 525 F.Supp.2d at 162. In the early 1990s, POGO, an organization dedicated to investigating and exposing “subservience of the federal Government to special interests,” also began investigating underpayment of oil royalties. POGO II, 454 F.3d at 306 (internal quotation marks omitted); POGO IV, 525 F.Supp.2d at 162. In June 1994, an anonymous source leaked one of Berman's memoranda on oil royalty issues to Danielle Brian, POGO's Executive Director, who found it helpful. POGO IV, 525 F.Supp.2d at 163. Brian contacted Berman, and over the next two years they had “twenty or thirty telephone conversations” in which Berman “explained ... the mechanics of the transactions employed by the oil industry” to Brian. Id.;see also POGO II, 454 F.3d at 307. Berman also advised Brian on how to file FOIA requests on the topic. POGO VIII, 616 F.3d at 546.

Based in part on the information acquired through Berman's aid, POGO filed two qui tam actions to recover unpaid royalties in the United States District Court for the Eastern District of Texas. Id. Berman declined POGO's invitation to serve as a co-relator in the lawsuits, but he did enter into a written agreement specifying that he would receive one third of any monetary award POGO received as a result of the qui tam litigation. Id. The United States ultimately intervened in the qui tam proceedings and collected a $440 million recovery. POGO IV, 525 F.Supp.2d at 164. In October 1998, POGO “received its 1.2 million share of the first settlement in the qui tam actions,” and in November 1998, POGO issued a check for $383,600 to Berman. Id.;see also POGO II, 454 F.3d at 307. The check stated that the payment was a “Public Service Award,” and the accompanying letter described the check as an award for Berman's “decade-long public-spirited work to expose and stop the oil companies' underpayment of royalties for the production of crude oil on federal and Indian lands.” POGO II, 454 F.3d at 307;see also POGO IV, 525 F.Supp.2d at 164.

This transaction drew the attention of attorneys at the Department of Justice. They launched a criminal investigation, but ultimately charged Berman and POGO with only civil violations of 18 U.S.C. § 209 and various common-law claims. 18 U.S.C. § 209 forbids one from “receiv[ing] any salary, or any contribution to or supplementation of salary, as compensation for his services as an officer or employee of the executive branch of the United States Government ... from any source other than the Government of the United States” or from “mak[ing] any contribution to, or in any way supplement[ing], the salary of any such officer or employee under circumstances which would make its receipt a violation of this subsection.” 18 U.S.C. § 209; POGO IV, 525 F.Supp.2d at 164. In 2004, a previous district judge granted the government's motion for summary judgment on Count I, the § 209 count, without explanation. See POGO I [Docket Entry 31] at 1. POGO appealed, and the D.C. Circuit reversed. POGO II, 454 F.3d at 306. The D.C. Circuit called the government's evidence “impressive,” id. at 311, but after reviewing the record in detail, it found several pieces of conflicting evidence that favored the defendants. Id. at 311–13. The court of appeals observed that, in light of the conflicting evidence, the outcome of the litigation would likely hinge on defendants' credibility. Id. at 313. Because credibility determinations are generally the province of a factfinder, the D.C. Circuit reversed the grant of summary judgment and remanded to this Court for further proceedings. Id.

After remand, the government moved for summary judgment on Count I a second time, “citing ‘new’ evidence that allegedly eliminate[d] the credibility issues that the D.C. Circuit identified.” POGO IV, 525 F.Supp.2d at 166. This Court found, however, that the so-called “new” evidence was either not new or failed to “decisively refute[ ]” the conflicting evidence that the court of appeals had found significant. Id. at 170. This Court concluded that the government's motion was largely an attempt to relitigate the decision of the D.C. Circuit. Id. Berman also moved for summary judgment, arguing that a lump-sum payment could not constitute a “contribution to or supplementation of salary” as a matter of law. Id. at 171–73. This Court disagreed. Id. Both summary judgment motions were therefore denied, and the case proceeded to trial.

At trial, no party disputed that POGO had made, and Berman had accepted, a payment. The trial therefore focused on whether that payment had been made “as compensation for [Berman's] services as an officer or employee of the executive branch of the United States Government.” See18 U.S.C. § 209. To prove the payment had been made as compensation for Berman's government work, the United States called, among other witnesses, Berman, Brian, and Theodore Heintz. Berman testified that he had written several memoranda on oil royalty valuation issues and sent them to his superiors. Tr. Day 2 at 187–88. He explained that he had not been assigned to analyze oil royalty valuation issues, but that he had undertaken the analysis on his own initiative, with his supervisor's approval, because he was interested in the oil market. Tr. Day 2 at 91, 98–99. At some point around 1993, Berman testified, his supervisors told him “not to do any further work” on oil royalty valuation issues. Tr. at 101–02. Berman acknowledged that he had written several of the memoranda cited in POGO's investigative reports, and stated that POGO's payment to him was an award for his efforts “to bring the undervaluation issue to the attention of people within the Department of the Interior.” Tr. Day 3 at 160; see also POGO VI, 543 F.Supp.2d at 58.

Brian's testimony was largely consistent with Berman's. She explained that Berman had helped her understand the issues surrounding oil royalty valuation and given her advice on how to prepare her FOIA requests. Tr. Day 1 at 136. She also testified that the payment was “at least in part ... for Mr. Berman's years of bringing this issue, the undervaluation of oil royalties, to the attention of his supervisors,” but that Berman's superiors had ignored his efforts. Tr. Day 2 at 77; see also Tr. Day 1 at 211–13; Tr. Day 2 at 45. In sum, she stated, POGO had paid Berman and one other government employee because “I thought it was the right thing to do ... I wanted them to know that I wasn't going to forget that they had been the whistle-blowers.” Tr. Day 2 at 9.

Heintz testified that he had been Berman's supervisor from the mid–1980s to mid–1990s. Tr. Day 2 at 124, 137. Heintz explained that Berman was the “lead analyst” on oil royalty issues at the DOI for “roughly 10 years from the mid–80s to the mid–90s.” Tr. Day 2 at 81. He identified several of Berman's memoranda on oil royalty valuation issues, and testified that he had reviewed them and passed them up the line to his superiors. Tr. Day 2 at 96–102. He also testified that...