USA v. Project On Gov't Oversight

• Decision Date: 03 August 2010
• Docket Number: Nos. 08-5182, 08-5465, 08-5466.,s. 08-5182, 08-5465, 08-5466.
• Citation: 616 F.3d 544
• Parties: UNITED STATES of America, Appellee v. PROJECT ON GOVERNMENT OVERSIGHT, Appellant. Robert A. Berman, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

616 F.3d 544

UNITED STATES of America, Appellee

v. PROJECT ON GOVERNMENT OVERSIGHT, Appellant.Robert A. Berman, Appellant.

Nos. 08-5182, 08-5465, 08-5466.

United States Court of Appeals,District of Columbia Circuit.

Argued Oct. 5, 2009.

Decided Aug. 3, 2010.

Appeals from the United States District Court for the District of Columbia (No. 1:03-cv-00096).

Ross A. Nabatoff argued the cause for appellant/cross-appellee Project on Government Oversight. With him on the briefs were Stanley M. Brand and Andrew D. Herman.

Robert A. Berman, appearing pro se, argued the cause and filed the briefs for appellant.

Judith Rabinowitz, Attorney, U.S. Department of Justice, argued the cause for appellee/cross-appellant United States of America. With her on the briefs was Douglas N. Letter, Attorney.

Before: GARLAND and GRIFFITH, Circuit Judges, and EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GARLAND.

Opinion filed by Senior Circuit Judge EDWARDS concurring in the judgment and concurring in part in the opinion for the Court.

GARLAND, Circuit Judge:

A non-profit organization gave an Interior Department economist a monetary award for his “public-spirited work [to prevent] oil companies [ ]” from underpaying the Mineral Management Service for oil extracted from federal lands. The government responded by charging both the organization and the economist with violating 18 U.S.C. § 209(a), which prohibits giving or receiving any contribution to or supplementation of salary “as compensation for [an individual's] services as an officer or employee of the executive branch.” 18 U.S.C. § 209(a).

The principal question in this case is whether intent is an essential element of a § 209(a) violation. The government persuaded the district court that intent is not an essential element, and that it is irrelevant whether the defendants intended or knew that the activities for which the employee was paid were part of the employee's official responsibilities. The jury, instructed in accordance with this view, found that the defendants had violated § 209(a). Because we conclude that a defendant's intent to give or receive compensation for government services is a required element of the offense, we reverse.

I

The Project on Government Oversight (POGO) is a non-profit organization “dedicated to remedying systematic abuses of power, mismanagement, and subservience of the federal government to special interests.” POGO Br. 2. On June 9, 1997, POGO filed two qui tam actions in the United States District Court for the Eastern District of Texas. The complaints alleged that major oil companies had violated the False Claims Act, 31 U.S.C. § 3729, by undervaluing the oil they extracted from federal and Indian lands and then underreporting and underpaying the oil royalties they owed to the Mineral Management Service of the U.S. Department of the Interior. After POGO filed suit, the United States intervened and entered into settlements with the oil company defendants that resulted in a recovery of $440 million. See United States v. Project on Gov't Oversight, 525 F.Supp.2d 161, 164 (D.D.C.2007) ( POGO III ). ¹

During the course of the investigation that led POGO to file the qui tam suits, the organization spoke with many people, including Robert A. Berman, a senior economist at the Interior Department. Beginning in 1994, POGO's executive director, Danielle Brian, had between twenty and thirty telephone conversations with Berman in which they discussed oil royalty issues. Berman helped Brian understand the underpayment question and draft Freedom of Information Act (FOIA) requests for government documents. In 1996, Brian asked Berman whether he wanted to join as a co-relator in the qui tam actions that POGO intended to file. See supra note 1. Although Berman declined POGO's offer, he subsequently entered into an agreement with POGO providing that he would receive one-third of any money POGO recovered through the litigation. See United States v. Project on Gov't Oversight, 454 F.3d 306, 307 (D.C.Cir.2006) ( POGO I ).

On November 2, 1998, POGO sent Berman a letter enclosing a $383,600 check. The face of the check indicated that it was a “Public Service Award,” and the accompanying letter explained that POGO was awarding it to Berman for his “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.” Id. (quoting Letter from Danielle Brian to Robert Berman (Nov. 2, 1998)).

On January 21, 2003, the Justice Department filed a civil complaint charging, inter alia, that POGO and Berman had violated 18 U.S.C. § 209(a) in connection with the $383,600 payment. Section 209(a) states, in relevant part:

Whoever receives 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

Whoever ... makes any contribution to, or in any way supplements, the salary of any such officer or employee under circumstances which would make its receipt a violation of this subsection-

Shall be subject to the penalties set forth in section 216 of this title.

18 U.S.C. § 209(a). Section 216, referenced in the last line above, provides that whoever “engages in the conduct constituting the offense” may be imprisoned for not more than one year, and that whoever does so “willfully” may be imprisoned for not more than five years. Id. § 216(a)(1), (2). The section also authorizes the Attorney General to bring a civil action, as he did in this case, against any person who “engages in conduct constituting an offense under section ... 209,” and provides that “upon proof of such conduct by a preponderance of the evidence, such person shall be subject to a civil penalty.” Id. § 216(b).

On April 28, 2003, the government moved for summary judgment on the § 209(a) count. Thereafter, the district court granted the government's motion and certified its order for immediate appeal pursuant to 28 U.S.C. § 1292(b). Upon review, this court reversed the district court's order, finding “a genuine dispute as to whether POGO issued the check as compensation for [Berman's] government service.” POGO I, 454 F.3d at 306.

After the case returned to the district court for trial, the defendants asked the court to instruct the jury that intent to compensate Berman for his services as a government employee was an essential element of a § 209(a) violation. At the government's urging, the court denied the request. The court also denied Berman's motion for summary judgment on the basis of his contention that § 209(a) does not, as a matter of law, apply to lump-sum (as opposed to periodic) payments.

Trial commenced on February 5, 2008. On February 11, the jury found POGO and Berman liable for violating § 209(a). Thereafter, the district court denied the defendants' post-trial motions for judgment as a matter of law or, in the alternative, for a new trial.

The district court also considered the appropriate penalties under 18 U.S.C. § 216(b), which provides for “a civil penalty of not more than $50,000 for each violation or the amount of compensation which the person received or offered for the prohibited conduct, whichever amount is greater.” 18 U.S.C. § 216(b). POGO argued that this section gave the court discretion to impose any penalty up to the value of the $383,600 check that POGO had given Berman; and it asked the court to exercise that discretion to impose no penalty. The government countered that § 216(b) gave the court no discretion at all, but rather required it to impose a penalty of $383,600 on each of the defendants. The court agreed with POGO that it had discretion and, while it assessed a penalty of $383,600 against Berman, it imposed a penalty of only $120,000 against POGO because it found that the organization had given Berman the check in good faith. United States v. Project on Gov't Oversight, 543 F.Supp.2d 55, 69 (D.D.C.2008) ( POGO VII ).

POGO and Berman now appeal the district court's denial of their post-trial motions, and the government cross-appeals from the court's penalty determination with respect to POGO. In Part II, we consider both defendants' contention that the court erred by refusing to instruct the jury that intent is an element of a violation of § 209(a). Part III addresses Berman's additional contentions including, in particular, his claim that § 209(a) does not apply to lump-sum payments. In Part IV, we examine the government's challenge to the district court's interpretation of the penalty provision of § 216(b).

II

In light of the plain language of § 209(a), the parties agree that a government employee who receives a payment is not liable unless the payment was received “as compensation for his services as an officer or employee of the executive branch of the United States Government.” 18 U.S.C. § 209(a); see POGO I, 454 F.3d at 309. “Despite the awkward drafting” of § 209(a)' s two paragraphs, the same is true for a defendant who is a payor: it must make the payment as compensation for government services by the recipient. Crandon v. United States, 494 U.S. 152, 159, 110 S.Ct. 997, 108 L.Ed.2d 132 (1990). Accordingly, the district court instructed the jury that the government must prove that “the payment was as compensation for Mr. Berman's services as an officer or employee of the executive branch of the United States government.” Trial Tr. 97 (Feb. 11, 2008).

The defendants, however, asked the court to further instruct the jury that the government had to prove they “ intended [the payment] as compensation for [Berman's] services as an officer or employee of the United States.” Def. [POGO's] Requested Instructions at 27 (Jan. 29, 2008) (emphasis added); see also Def. Berman's Special Instruction at 2 (Jan. 30, 2008). This the district court declined...