United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 5, 2009 Decided August 3, 2010
No. 08-5182
UNITED STATES OF AMERICA,
APPELLEE
v.
PROJECT ON GOVERNMENT OVERSIGHT,
APPELLANT
ROBERT A. BERMAN,
APPELLANT
Consolidated with 08-5465, 08-5466
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.
2
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
3
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,
1
Section 3730(b) of the False Claims Act provides that a “private
person[,]” commonly known as a “relator,” may bring a civil action
for a violation of § 3729 “in the name of the Government.” 31 U.S.C.
§ 3730(b). Such an action is known as a “qui tam” suit. The statute
permits the government to take over the action and conduct it itself, or
to decline to do so, in which case the relator has the right to conduct
it. See id. The relator is entitled to different percentages of any
recovery from a successful False Claims Act suit, depending upon
whether the relator or the government conducts the action. See id.
§ 3730(d)(1)-(2).
4
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
5
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
6
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
7
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 (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 to do. Instead, the court told the jury that
it could, but was not required to, consider the defendants’ intent,
and then only for a limited purpose. See Trial Tr. 98 (Feb. 11,
2008) (stating that the jury may consider intent in determining
which particular services POGO paid Berman for).
The court offered two reasons for rejecting the defendants’
request to instruct that intent to compensate for government
services is an essential element of a § 209(a) violation. First, the
8
court said, even if the “parties’ subjective intent may be relevant
to determining what [work] the payment was for,” it was not
relevant to whether the payment was for government work. See
POGO VII, 543 F. Supp. 2d at 62. Second, the court indicated
there was a strong argument that § 209(a) contains no intent
requirement at all. Id. at 63-64. The government pressed both
positions below and presses both here.
We take the more absolutist position first and ask: Does
§ 209(a) contain an intent requirement of any kind? After
concluding that proof of intent is required, we proceed to
examine the limited intent instruction that the court gave the
jury. We review de novo the court’s refusal to instruct the jury
that intent is an element of the offense. United States v. Perkins,
161 F.3d 66, 69 (D.C. Cir. 1998).
A
The government begins its argument for no intent
requirement at all by reciting the district court’s observation that
§ 209(a) does not contain the word “intent.” Based on a
presumption that, “when Congress sought to add such ‘intent’
elements, it did so clearly and unequivocally,” the court
concluded that “[t]he choice to omit those terms from § 209(a),
then, appears deliberate.” United States v. Project on Gov’t
Oversight, 531 F. Supp. 2d 59, 63 (D.D.C. 2008) (POGO V); see
Gov’t Br. 12. Accordingly, the court suggested, and the
government argues on appeal, that “the defendants’ subjective
intent was neither an element of the offense nor a relevant
defense.” Gov’t Br. at 9. We disagree.
1. The same language that renders defendants civilly liable
under § 209(a) also renders them guilty of a criminal offense, for
which they may be “imprisoned for not more than one year.” 18
9
U.S.C. § 216(a)(1).2 A long line of Supreme Court cases
therefore requires us to reject the presumption relied upon by the
government: contrary to the government’s position, the Court
has repeatedly stated that the “mere omission . . . of any mention
of intent will not be construed as eliminating that element from”
a criminal offense. Morissette v. United States, 342 U.S. 246,
263 (1952) (emphasis added).3 Instead, “offenses that require no
mens rea generally are disfavored.” Staples v. United States,
511 U.S. 600, 606 (1994).4 Indeed, even where “the most
grammatical reading of the statute” indicates otherwise, the
Court has instructed us to read statutes “to include broadly
applicable scienter requirements [though] the statute by its terms
2
As we discuss in Part II.A.4, the statute further provides that
whoever “willfully engages in the conduct constituting the offense”
may be imprisoned for not more than five years. 18 U.S.C.
§ 216(a)(2) (emphasis added).
3
See Staples v. United States, 511 U.S. 600, 605 (1994)
(“[S]ilence on this point by itself does not necessarily suggest that
Congress intended to dispense with a conventional mens rea element,
which would require that the defendant know the facts that make his
conduct illegal.”); Liparota v. United States, 471 U.S. 419, 426 (1985)
(“[F]ar more than the simple omission of the appropriate phrase . . . is
necessary to justify dispensing with an intent requirement.” (quoting
United States v. U.S. Gypsum Co., 438 U.S. 422, 438 (1978)) (internal
quotation mark omitted)); see also Carter v. United States, 530 U.S.
255, 269 (2000); United States v. X-Citement Video, 513 U.S. 64, 70
(1994).
4
See Liparota, 471 U.S. at 426; U.S. Gypsum Co., 438 U.S. at
437-38; Morissette, 342 U.S. at 263; see also Staples, 511 U.S. at 605
(“‘[T]he existence of a mens rea is the rule of, rather than the
exception to, the principles of Anglo-American criminal
jurisprudence.’” (quoting U.S. Gypsum Co., 438 U.S. at 436)).
10
does not contain them.” United States v. X-Citement Video, Inc.,
513 U.S. 64, 70 (1994).5
As a consequence, we must not only reject the
government’s presumption, but adopt the opposite principle:
“[W]e must presum[e] that criminal statutes and regulations
contain a mens rea element unless otherwise clearly intimated
in the language or legislative history.” United States v. Sheehan,
512 F.3d 621, 629 (D.C. Cir. 2008) (internal quotation marks
omitted); see Staples, 511 U.S. at 606 (“[S]ome indication of
congressional intent, express or implied, is required to dispense
with mens rea as an element of a crime.”); Liparota v. United
States, 471 U.S. 419, 425-26 (1985) (concluding that a statute
requires a mens rea element “[a]bsent indication of contrary
purpose in the language or legislative history”). Neither we nor
the parties have found anything in the legislative history to
suggest a legislative purpose to do without an intent
requirement. Nor is there any such intimation in the statutory
language.
Moreover, although the language of § 209(a) does not
include the word “intent,” it is not truly silent on the issue.
Rather, it includes words that strongly intimate a mens rea
requirement. To violate the statute, it is not enough to make or
receive a contribution. In addition, that contribution must be
made or received “as compensation for” the recipient’s services
as a government employee. This is the language of intent. To
conclude that a payment was made “as compensation,” one must
determine the intent of the payor. To conclude that a payment
5
The government points to precedent noting that this line of cases
does not apply to what the Supreme Court has termed “public welfare”
or “regulatory” offenses. As we discuss below, § 209(a) is not such
an offense. See infra note 15.
11
was made as compensation “for” something, one must determine
what the intended object was.6
Indeed, the Supreme Court has drawn much the same
conclusion from similar language in the gratuities statute, 18
U.S.C. § 201(c)(1)(A). Like § 209(a), § 201(c)(1)(A) lacks an
express scienter term. Instead, it simply proscribes the giving of
“anything of value to any public official . . . for or because of
any official act performed or to be performed.” Id. (emphasis
added). Nonetheless, the Supreme Court has described that
language as containing an “intent element,” United States v.
Sun-Diamond Growers of California, 526 U.S. 398, 404 (1999),
namely, a “connection between respondent’s intent and a
specific official act,” id. at 405. This court has reached the same
conclusion. See United States v. Sun-Diamond Growers of
California, 138 F.3d 961, 966 (D.C. Cir. 1998) (“To satisfy the
criminal intent requirement embodied in the phrase ‘for or
because of any official act,’ the giver must intend either to
reward some past concrete official act or acts, or to enhance the
likelihood of some future act or acts.”), aff’d 526 U.S. 398
(1999); see also United States v. Gatling, 96 F.3d 1511, 1522
(D.C. Cir. 1996) (holding that, “to convict for accepting a
gratuity[,] the jury need only find that the defendant acted
‘knowingly and willingly’” (quoting United States v. Campbell,
684 F.2d 141, 149-50 (D.C. Cir. 1982))).
Courts have been particularly concerned to require a
showing of intent where “necessary to separate wrongful
conduct from ‘otherwise innocent conduct.’” Carter v. United
States, 530 U.S. 255, 269 (2000) (quoting X-Citement Video,
513 U.S. at 72); see also Sun-Diamond, 526 U.S. at 406-07
6
Similarly, to conclude that a payment was received “as
compensation for” something, one must determine the intent of the
recipient.
12
(interpreting the gratuities statute narrowly so as not to produce
the “peculiar result[]” of criminalizing such conduct as giving
the President a jersey for receiving a sports team at the White
House or giving a cabinet secretary a school cap for visiting a
high school). And there is a risk of criminalizing otherwise
innocent conduct here. Without the requirement of an intent
element, a parent’s monthly checks to a child who works for the
government could be construed as violating § 209(a): only the
parent’s intent distinguishes payments to help cover the rent
from payments to subsidize what the parent regards as an
insufficient public-sector salary. The government demurs,
saying that “[w]hen parents subsidize their children’s low
income, most likely they are helping with the rent . . . ; they are
not paying for the child’s services.” Gov’t Br. 31. But unless
the government envisions instructing the jury as to what is “most
likely” as a matter of law, it is only the parent’s actual intent that
spells the difference between legal and illegal conduct.
To take another example, under the government’s theory a
publishing company that pays a Justice Department lawyer to
write a manual on appellate advocacy on his own time violates
§ 209(a) if -- unbeknownst to the company -- the Department
has assigned the employee to write a similar manual as part of
his official duties. See Oral Arg. Recording 43:56-44:16
(acknowledgment by government counsel). Indeed, this is so
even if the employee lies to the publishing company about the
scope of his government work.
An intent element may also be necessary to distinguish
between lawful and unlawful public service awards that non-
profit organizations bestow on public servants. The Justice
Department itself has recognized this point. In 1997, the
Department’s Office of Legal Counsel (OLC) was asked to
determine whether § 209(a) prohibits a non-profit from making
payments to grant the wishes of terminally ill children of FBI
13
agents. Applicability of 18 U.S.C. § 209 to Acceptance by FBI
Employees of Benefits Under the “Make a Dream Come True”
Program, 21 Op. Off. Legal Counsel 204 (1997), 1997 WL
33100655. “The question before us,” OLC said, “is whether
there is an intentional, direct link between a benefit given under
the Program . . . and the FBI employee’s services to the
government.” Id. at *2 (emphasis added). Concluding that
“private payments to government employees because of their
status as employees of the executive branch are not
automatically intended as compensation for services to the
government,” OLC ruled that § 209(a) does not bar FBI
employees from accepting the payments. Id. at *4 (emphasis
added).7 As the U.S. Office of Government Ethics (OGE) has
summarized: “[T]he Department of Justice has consistently held
that [§ 209(a)] applies only to payments made with the intent to
compensate for Government services and that the requisite intent
may not be inferred from the bestowal upon a public official of
a bona fide award for public service or other meritorious
achievement.” Letter from David H. Martin, Director, OGE, to
a Designated Agency Ethics Official (July 26, 1983), 1983 WL
31714, at *1 (citing OLC opinion letters) (emphasis added).8
7
Accord OLC, Application of 18 U.S.C. § 209 to Employee-
Inventors Who Receive Outside Royalty Payments (Sept. 7, 2000),
2000 WL 33952879, at *3 (concluding that § 209 does not bar
government employee-inventors from receiving outside royalties
because there is “no intentional, direct link between an employee-
inventor’s government services and the licensing of patent rights”
(emphasis added)); see also 41 Op. Att’y Gen. 217, 217, 220-21
(1955) (concluding that “whether a payment to an officer or
employee” violates the statute “is often a matter of ascertaining the
intent of both the payor and the payee” (emphasis added)).
8
Accord OGE Memorandum to Designated Agency Ethics
Officials Regarding 18 U.S.C. § 209 Guidance (July 1, 2002), 2002
WL 32100961, at *9 (reaffirming that “an intent to compensate for
14
We agree with the government that we are not required to
defer to the views of the Justice Department’s Office of Legal
Counsel. Gov’t Br. 35-36. But nothing bars us from regarding
OLC’s views as more persuasive than those expressed in the
Department’s appellate brief.
2. The government contends that several statements in the
Supreme Court’s opinion in Crandon indicate that intent is not
an element of § 209(a). Crandon did not involve the issue we
have here, but rather the question of whether § 209(a) applies to
payments that a company makes to its departing employees
before they enter government service. In the course of holding
that such payments are not covered, the Court stated that
“[n]either good faith, nor full disclosure, nor exemplary
performance of public office will excuse the making or receipt
of a prohibited payment.” 494 U.S. at 165. Relying on this
statement, the government contends that because good faith is
not a defense to a § 209(a) violation, there is no intent element
to the offense: “[I]f good faith is not a defense, intent (i.e., the
absence of good faith) cannot be an element of the offense.”
Gov’t Br. 22.
The problem with the government’s argument is its
premise: that “intent” is “the absence of good faith.” It is true
that some kinds of heightened mens rea may involve the absence
of good faith (i.e., the presence of bad faith). Accordingly, for
crimes that involve those kinds of more culpable mens rea, good
faith may constitute an excuse or defense. This is true, for
example, of crimes that require that the defendant act
“fraudulently” or “corruptly,” and is sometimes true of crimes
Government services cannot be inferred from a bona fide award for
public service” (internal quotation marks omitted)).
15
that require “specific intent.”9 It is also sometimes true of
crimes that require that the defendant act “willfully.”10
9
See, e.g., Nat’l Ass’n of Mfrs. v. Taylor, 582 F.3d 1, 28 (D.C.
Cir. 2009) (stating that, because the Lobbying Disclosure Act requires
the government to prove the defendant acted “knowingly and
corruptly,” “good faith mistakes will [not] result in criminal liability”);
United States v. DeFries, 129 F.3d 1293, 1310 (D.C. Cir. 1997)
(holding that the district court erred in failing to instruct that good
faith reliance on counsel’s advice is a defense to the fraudulent intent
required for embezzlement under 29 U.S.C. § 501(c)); see also United
States v. McNair, 605 F.3d 1152, 1201 n.65 (11th Cir. 2010) (holding
that “a finding of specific intent to defraud necessarily excludes a
finding of good faith”); United States v. Kay, 513 F.3d 432, 454 (5th
Cir. 2007) (indicating that a requirement that the defendant acted
“corruptly” would be inconsistent with “good faith”); United States v.
Khorozian, 333 F.3d 498, 508 (3d Cir. 2003) (holding that “good faith
is a complete defense to fraud charges -- negating specific intent”).
10
See Bryan v. United States, 524 U.S. 184, 191 (1998) (“As a
general matter, when used in the criminal context, a ‘willful’ act is one
undertaken with a ‘bad purpose.’ In other words, 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.”
(internal quotation marks omitted)); Ratzlaf v. United States, 510 U.S.
135, 137, 142 n.10 (1994) (holding that, “[t]o establish that a
defendant ‘willfully violat[ed]’ the antistructuring law, the
Government must prove that the defendant acted with knowledge that
his conduct was unlawful,” and stating that “[s]pecific intent to
commit the crime[s] . . . might be negated by, e.g., proof that
defendant relied in good faith on advice of counsel” (internal
quotation marks omitted)); Cheek v. United States, 498 U.S. 192, 202
(1991) (holding that proof of willfulness in criminal tax cases
“requires negating a defendant’s claim of ignorance of the law or a
claim that because of a misunderstanding of the law, he had a good-
faith belief that he was not violating” the law); United States v.
Bishop, 412 U.S. 346, 361 (1973) (holding that “[t]he requirement of
an offense committed ‘willfully’ is not met . . . if a taxpayer has relied
16
But crimes requiring only a more basic level of intent do not
require that the defendant act in bad faith. As the Court
explained in Carter v. United States, a general intent crime
requires only that the perpetrator “kn[ow] that [his act] ha[s] the
characteristics bringing it within the scope of the statute,” not
that those characteristics make the acts unlawful. 530 U.S. at
269. Accordingly, for such crimes, good faith is generally not
a defense -- notwithstanding that intent to do the things that
constitute elements of the offense is required. See id. at 269-
70.11 In short, Crandon’s observation that good faith will not
in good faith on a prior decision of this Court”); United States v.
Hansen, 772 F.2d 940, 947 (D.C. Cir. 1985) (holding that good faith
is a defense to “the willful filing of false statements” under 18 U.S.C.
§ 1001). But see United States v. George, 386 F.3d 383, 393 (2d Cir.
2004) (noting that “the Second Circuit has held that the term
‘willfully’ in criminal statutes typically does not require the
government to prove the defendant’s specific intent to violate the
particular criminal statute in question”).
11
See, e.g., United States v. McLean, 131 F. App’x 34 (4th Cir.
2005) (holding that a “good faith” belief that the defendants were
participating in a lawful investor program was not a defense to a
charge of knowingly passing false mortgage instruments); United
States v. Preciado-Hernandez, No. 91-10086, 1992 WL 46682, at *1
(9th Cir. Mar. 12, 1992) (noting “that good faith [i]s not a defense to
a general intent crime”); United States v. Champegnie, 925 F.2d 54,
55 (2d Cir. 1991) (holding that because “the government need not
show that a defendant specifically intended to disobey the law in order
to prove a violation” of 8 U.S.C. § 1326 -- which makes it a felony for
a previously deported alien to reenter the United States without the
express permission of the Attorney General -- the defendant’s “good
faith or mistaken belief . . . that she could reenter lawfully is not a
defense”); see also Liparota, 471 U.S. at 425 n.9 (noting that,
although it is “a defense to a charge of knowing receipt of stolen
goods that one did not know that the goods were stolen,” it is not a
defense “that one did not know that such receipt was illegal”).
17
excuse the making of a payment prohibited by § 209 means
nothing more than that § 209 does not require proof of
heightened intent. It does not mean that it has no intent element
at all.12
The government also calls our attention to Crandon’s
statement that, “[w]hile some sections focus on bribes or
compensation offered as a quid pro quo for Government acts,
. . . § 209 is a prophylactic rule that aims at the source of
Government employees’ compensation.” Crandon, 494 U.S. at
159. A “prophylactic” rule, the government maintains, is one
that bars conduct regardless of intent. But Crandon did not say
that. As the quoted excerpt indicates, Crandon merely
distinguished provisions like the bribery statute (18 U.S.C.
§ 201), which requires that the offending payment be made as a
quid pro quo -- that is, as a payment “to influence” an official
act -- from § 209, which bars a non-government source from
paying for an employee’s government services regardless of
whether the source seeks to influence the employee to do
anything in exchange.
Later in Crandon, the Court repeated its characterization of
§ 209 as a “prophylactic” rule, “intended to prevent even the
appearance of wrongdoing and that may apply to conduct that
has caused no actual injury to the United States.” Id. at 164. In
the context of the Court’s prior statement, this again appears to
be a reference to the fact that § 209 proscribes payments made
12
We note that Crandon was decided under the pre-1989 version
of § 209(a). That version did not contain the current cross-reference
to § 216(b), which was enacted in 1989 and now makes a “willful”
violation of § 209(a) a felony. See 18 U.S.C. §§ 209, 216(b); Ethics
Reform Act of 1989, Pub. L. No. 101-194, tit. IV, § 407, 103 Stat.
1716, 1753. Thus, Crandon does not determine whether good faith is
a defense to a felony violation under current law.
18
as compensation for government services because such
payments may create the appearance of wrongdoing, even if
they cause no actual injury by changing the recipient’s behavior.
Of course, the section would be even more “prophylactic” if it
covered payments to a government employee regardless of the
intent with which they are made. But Crandon goes on to
instruct that “it is . . . appropriate, in a case that raises questions
about the scope of the prohibition, to identify the specific
policies that the provision serves.” Id. at 165. Here, the best
way to determine the specific policies that § 209 serves is to
read the statutory text -- which is aimed at payments made “as
compensation for” government services, not at all payments to
government employees.
In a similar vein, the government maintains that the Court’s
opinion in Sun-Diamond also signaled that § 209 has no intent
requirement, by stating that § 209 “criminalizes the giving or
receiving of any ‘supplementation’ of an Executive official’s
salary, without regard to the purpose of the payment.” Sun-
Diamond, 526 U.S. at 409. But this statement, too, must be read
in context. In Sun-Diamond, the Court faced the question of
whether the gratuities statute requires the government to prove
that a payment was made merely “because of the recipient’s
official position,” id. at 400, or rather “because of some
particular official act,” id. at 406. The Court chose the latter
interpretation, in part because § 209 already criminalizes the
former: it “refus[ed] to read § 201(c)(1)(A) as a prohibition of
gifts given by reason of the donee’s office” because in § 209(a)
Congress had “done so in a more precise and more administrable
fashion,” id. at 408 (emphasis added). This makes the Court’s
point clear: intent to compensate “by reason of the donee’s
office” is required for § 209(a); a purpose to reward “some
particular official act” is not.
19
3. The government insists, and the district court ruled, that
even if there is a general presumption that criminal statutes
contain a mens rea element, the opposite presumption should
govern for federal conflict-of-interest statutes because “[w]hen
Congress sought to require mens rea elements [in such] statutes,
it did so clearly and unequivocally.” POGO VII, 543 F. Supp.
2d at 63. But while it is true that some federal conflicts statutes
contain express mens rea elements, others do not. And it is
decidedly not true that “the courts have refused to read a
scienter requirement into [such] statute[s] where none exists.”
Gov’t Br. 12. Indeed, the principal cases cited by the
government stand for the opposite proposition.
The first case the government cites is Sun-Diamond. But as
we have already noted, Sun-Diamond held that intent is required
to violate the gratuities statute, 18 U.S.C. § 201(c)(1)(A),
notwithstanding that it is a conflicts statute that contains no
express mens rea term. See Sun-Diamond, 526 U.S. at 404-05;
discussion supra Part II.A.1. Far from suggesting that conflicts
statutes should be read broadly, the Court declared that “a
statute in this field that can linguistically be interpreted to be
either a meat axe or a scalpel should reasonably be taken to be
the latter.” 526 U.S. at 412.
Nor did this court refuse to read a scienter requirement into
18 U.S.C. § 203(a) in United States v. Baird, 29 F.3d 647 (D.C.
Cir. 1994), although it did refuse to find the specific kind of
scienter requirement the defendant wanted. Like § 209, at the
time § 203(a) contained no express scienter term; it simply
barred government employees from receiving “any
compensation for any services rendered” in relation to a
proceeding in which the United States is a party. Id. at 649
(citing the 1982 version of § 203(a)). Although the court
rejected the defendant’s contention that the section required
proof that he knew he committed a crime, it found it sufficient
20
that the trial judge had required the government to prove the
defendant “knew the facts that made the conduct criminal.” Id.
at 652.
Finally, we simply do not understand how the government
can describe United States v. Nofziger, 878 F.2d 442 (D.C. Cir.
1989), as an example of a case in which we “refused to read a
scienter requirement into a [conflicts] statute where none
exists.” Gov’t Br. 12. In the first place, the statute at issue in
Nofziger, 18 U.S.C. § 207(c) (1982) -- which barred covered
former government officials from making certain contacts with
their former agencies -- did contain a scienter requirement: it
required that the defendant act “knowingly.” The problem
presented in Nofziger was that the statutory language was
ambiguous as to whether that requirement applied to all of the
facts necessary to constitute the offense. See 878 F.2d at 443,
452. Rejecting the government’s claim that the presumption of
mens rea should not apply, this court reversed the defendant’s
conviction because the jury had not been required to find “that
he had knowledge of each element of the offenses charged.” Id.
at 454. In so doing, we reaffirmed “that absent evidence of a
contrary legislative intent, courts should presume mens rea is
required,” id. at 452 -- even in the context of a conflict-of-
interest statute. See id. at 453-54.
4. We are also unpersuaded by the district court’s view that
“[t]he careful distinctions drawn between §§ 216(a)(1) and
(a)(2)” -- the penalty provisions applicable to § 209 -- “reinforce
the conclusion that the omission of mens rea terms in § 209(a)
was deliberate.” POGO VII, 543 F. Supp. 2d at 64. Section
216(a)(1) provides that whoever “engages in the conduct
constituting the offense” in § 209(a) may be imprisoned for not
more than one year. 18 U.S.C. § 216(a)(1). Section 216(a)(2)
provides that whoever “willfully” engages in such conduct may
be imprisoned for not more than five years. Id. § 216(a)(2).
21
We do not believe that the fact that it takes “willfulness” to
commit a felony means that Congress chose to require no intent
at all to commit a misdemeanor.
First, as we have discussed above, “willfulness” may
connote a heightened mens rea requirement. See supra Part
II.A.2 and note 10. And while there is a “presumption in favor
of scienter,” that presumption does not “not justify reading a
specific intent requirement” into a statute where “a general
intent requirement suffices to separate wrongful from otherwise
innocent conduct.” Carter, 530 U.S. at 269-70 (internal
quotation marks omitted). Thus, Congress may have thought
that the “as compensation for” language of § 209(a) was
sufficient to impose a general intent requirement for the
misdemeanor offense, but that if it wished to require a
heightened level of culpability for the felony, it would have to
do so expressly.
Second, and perhaps more important, “[t]he careful
distinctions drawn between §§ 216(a)(1) and (a)(2)” can tell us
little about whether “the omission of mens rea terms in § 209(a)
was deliberate.” POGO VII, 543 F. Supp. 2d at 64 (emphasis
added). That is because § 216 was enacted in 1989, long after
§ 209(a) was initially enacted, and did not change its text
(except to remove its penalty provision). See Ethics Reform Act
of 1989, Pub. L. No. 101-194, tit. IV, §§ 406-07, 103 Stat. 1716,
1753. In fact, § 216 is not just the penalty provision for
§ 209(a); it sets the “punishment for an offense under section[s]
203, 204, 205, 207, 208, or 209.” 18 U.S.C. § 216(a) (emphasis
added). Some of those sections previously included express
mens rea terms; some did not; and the 1989 Act did not
substantially alter those terms. Compare 18 U.S.C. §§ 203, 204,
205, 207, 208, 209 (1988), with 18 U.S.C. §§ 203, 204, 205,
207, 208, 209 (2006).
22
5. In sum, applying the generally applicable presumption
that “criminal statutes and regulations contain a mens rea
element,” Sheehan, 512 F.3d at 629 (internal quotation marks
omitted), as well as the strong textual signal given by the “as
compensation for” language in § 209(a), we conclude that intent
is a required element of the offense.
B
In addition to suggesting that § 209(a) contains no mens rea
requirement at all, the district court proffered a narrower
rationale for rejecting the defendants’ request for an instruction
that intent is an element of the offense. In line with that
narrower rationale, the court gave a more limited instruction on
the issue. The district court permitted -- but did not require --
the jury to “‘consider what services POGO subjectively intended
the payment to be for, and what [services] Mr. Berman believed
that the payment was for.’” Gov’t Br. 34 (quoting the district
court’s jury instructions) (emphasis added). It did not, however,
permit the jury to consider “whether the defendants intended the
payment to be for Berman’s Government service.” Id. This
meant, for example, that the jury was permitted to determine
whether POGO intended its payment to be compensation for
Berman’s “internal government memoranda (as the government
would have it),” or instead for his “generalized whistleblowing
activities (as POGO would have it).” POGO V, 531 F. Supp. 2d
at 60-61. But it also meant that the jury was not permitted to
consider whether POGO knew that either kind of service (and
particularly the latter) was actually part of Berman’s government
duties. Id. at 61; Trial Tr. 98-99 (Feb. 11, 2008) (jury
instructions).13
13
The district court believed that this Circuit endorsed a similar
two-part approach in United States v. Muntain, in which we said: “For
there to be a violation of § 209, . . . the contribution must have been
23
In accord with this two-part analysis, the court gave the
following instruction:
To determine what services POGO’s payment was
‘for’ you . . . may . . . consider what services POGO
subjectively intended the payment to be for, and what
Mr. Berman believed that the payment was for, to the
extent that you consider those facts to be relevant to
your assessment.
However, in determining whether the services for
which POGO paid Mr. Berman were in fact
governmental, you must consider only the objective
facts. Whether POGO or Mr. Berman believed those
services fell within Mr. Berman’s official government
responsibilities is not relevant to your determination of
whether the services for which Mr. Berman received
the payment from POGO were in fact services as a
federal employee.
Trial Tr. 98-99 (Feb. 11, 2008) (emphases added). There are
two errors in this instruction.
received as compensation for services and those services must have
been rendered as an employee of the United States.” 610 F.2d 964,
969 (D.C. Cir. 1979) (internal quotation marks omitted) (emphasis
added). But by listing two elements of the offense, we did not mean
to distinguish the way in which intent applies to those elements.
Indeed, in Muntain the government did not dispute that it was required
to prove the defendant intended to receive the payment for his
government work. To the contrary, the indictment expressly charged
him “with violating [§ 209] by having knowingly received $800 as ‘a
contribution to, and a supplementation of, the salary he received from
the United States Government as compensation for his services as the
Assistant to the Secretary.” Id. (emphases added).
24
First, even if the instruction were otherwise correct, it was
error to tell the jury that the defendant’s subjective intent was
something that it “may . . . consider . . . to the extent that [it]
consider[s] those facts to be relevant.” Id. As we held in Part
II.A, intent is an essential element of § 209(a): something that
the jury “must find” to hold the defendants liable, not something
that it “may consider” in its discretion.
Second, the court was wrong to effectively cut off the key
statutory phrase at the word “services.” The statute bars
payment to an individual as compensation “for his services as an
officer or employee of the executive branch.” 18 U.S.C.
§ 209(a). There is no punctuation or other reason to suggest that
the phrase should end at “services.” This indicates that it is the
entire statutory phrase that describes the evil Congress sought to
prohibit: payment intended as compensation not just for
“services,” but for “services as an officer or employee of the
executive branch.” And as the Supreme Court held in United
States v. X-Citement Video, “the presumption in favor of a
scienter requirement should apply to each of the statutory
elements that criminalize otherwise innocent conduct.” 513
U.S. at 72 (emphasis added) (citing Morissette and Staples).14
14
Based on that presumption, X-Citement Video held that 18
U.S.C. § 2252, which makes it a crime to “knowingly transport[] . . .
any visual depiction, if . . . the producing of such visual depiction
involves the use of a minor engaging in sexually explicit conduct,”
requires proof not only that the defendant knowingly transported the
depiction, but also that he knew the depiction was of a minor.
X-Citement Video, 513 U.S. at 68, 78. Otherwise, the Court said, “we
would sweep within the ambit of the statute actors who had no idea
that they were even dealing with sexually explicit material.” Id. at 69.
For similar reasons, this court held in Nofziger that, to prove a
violation of 18 U.S.C. § 207(c), the government had to show not only
that the former government official knowingly communicated with his
former agency, but that he also knew the agency had “a direct and
25
In Staples v. United States, the Court applied the
presumption in just this manner. At issue in Staples was the
proper construction of the National Firearms Act, which makes
it “unlawful for any person . . . to receive or possess a firearm
which is not registered to him in the National Firearms
Registration and Transfer Record.” 26 U.S.C. § 5861(d). The
Act defines the term “firearm” to include a “machinegun,” id.
§ 5845(a)(6), and defines a “machinegun” as any weapon that is
fully automatic, id. § 5845(b). See Staples, 511 U.S. at 602.
The question in the case was whether it was sufficient for the
government to prove that the weapon was fully automatic and
that the defendant knew he possessed it -- or whether it also had
to prove that the defendant knew the weapon he possessed was
fully automatic. Although the Court noted that “[s]ection
5861(d) is silent concerning the mens rea required for a
violation,” it also declared that “silence on this point by itself
does not necessarily suggest that Congress intended to dispense
with a conventional mens rea element, which would require that
the defendant know the facts that make his conduct illegal.” Id.
substantial interest” in the matter. 878 F.2d at 443 (quoting the
statute). Otherwise, we explained, if the “ex-official tries to interest
his former agency in a particular project in the mistaken belief that it
had no ‘direct and substantial interest’ in it, he will have committed a
felony.” Id. at 444 (emphasis omitted); see also Flores-Figueroa v.
United States, 129 S. Ct. 1886, 1888 (2009) (holding that 18 U.S.C.
§ 1028A(a)(1), which makes it an aggravated crime to “knowingly
transfer[] . . . , without lawful authority, a means of identification of
another person,” requires proof that the defendant not only knowingly
transferred something, but that he knew it was “a means of
identification” and that it belonged to “another person”); Liparota, 471
U.S. at 433 (holding that 7 U.S.C. § 2024(b)(1), which prohibits
“knowingly . . . acquir[ing] . . . [food stamps] . . . in any manner not
authorized by [law],” requires proof not only that the defendant knew
he acquired the stamps, but also that he knew he did so in an
unauthorized manner).
26
at 605. Because “the Government’s construction of the statute
potentially would impose criminal sanctions on a class of
persons whose mental state -- ignorance of the characteristics of
weapons in their possession -- makes their actions entirely
innocent,” id. at 614-15, the Court held that the government
must prove the defendant “knew the weapon he possessed had
the characteristics that brought it within the statutory definition
of a machinegun,” id. at 602.15
15
The government argued in Staples that “this case fits in a line
of precedent concerning . . . ‘public welfare’ or ‘regulatory’ offenses,
in which [the Court has] understood Congress to impose a form of
strict criminal liability through statutes that do not require the
defendant to know the facts that make his conduct illegal.” 511 U.S.
at 606. The Court rejected the argument, noting that “[t]ypically, our
cases recognizing such offenses involve statutes that regulate
potentially harmful or injurious items,” id. at 607, such as certain
narcotics, dangerous devices, toxic waste materials, and hand
grenades, see id. at 607-08. Section 209 plainly does not fall into this
category.
The government further argues here that the Staples Court was
influenced by the penalty of up to ten years’ imprisonment that
potentially attached to a violation of § 5861(d). The Court did note
that, “[h]istorically, the penalty imposed under a statute has been a
significant consideration in determining whether the statute should be
construed as dispensing with mens rea.” Staples, 511 U.S. at 616.
But the statutory penalty was only the final consideration the Court
took into account, and one that merely “confirm[ed]” its reading of the
statute. Id. Moreover, in describing what it regarded as the “light
penalties” that “first defined the concept of the public welfare
offense,” the Court referred to terms of incarceration shorter than the
one year applicable to non-willful violations of § 209(a). See id.
(citing cases involving small fines or imprisonment of three or six
months).
27
We are guided by the same considerations here. It is not
enough for the government merely to prove which services an
outside entity intended to compensate a government employee
for, and then to prove that those services actually fell within the
employee’s official responsibilities. Rather, it must also prove
that the entity intended to compensate the employee for his
government services. Not to require the latter “would impose
criminal sanctions on a class of persons whose mental state --
ignorance of the [scope of the employee’s duties] -- makes their
actions entirely innocent.” Staples, 511 U.S. at 614-15. As we
explained in Part II.A, without requiring proof that a payor
intended to compensate for government services, payors who
pay for services that they mistakenly think are non-
governmental would be caught in the statute’s web. Hence, the
intent to compensate for government services is the fact
necessary to “separate wrongful . . . from otherwise innocent
conduct,” by ensuring that the perpetrator “knew that [his act]
had the characteristics bringing it within the scope of the
statute.” Carter, 530 U.S. at 269 (internal quotation marks
omitted).16
The district court’s principal explanation for not permitting
the jury to consider the defendants’ intent to compensate or
receive compensation for government services was that
“[n]either POGO’s nor Berman’s subjective belief or
understanding concerning whether Berman’s . . . work
16
In Carter, the Court construed 18 U.S.C. § 2113(a), which
punishes “whoever, by force and violence . . . takes . . . from the
person or presence of another any . . . thing of value belonging to, or
in the . . . possession of, any bank.” Id. at 280. Noting that the
subsection “contains no explicit mens rea requirement of any kind,”
the Court applied “the presumption in favor of scienter” to “requir[e]
proof of general intent,” although not of specific intent to steal or
purloin. Id. at 267-68 (emphasis omitted).
28
constituted [such services] is relevant to the proper
characterization of that work.” POGO VII, 543 F. Supp. 2d at
62. But even if it were true that POGO’s or Berman’s
understanding is analytically irrelevant to determining whether
the work Berman did was actually part of his official duty,17 that
does not mean POGO’s intent to compensate Berman for doing
his official duty is not an element of the offense. To the
contrary, this analysis merely makes clear that there are two
separate statutory elements at work here: (1) the payor must
intend its payment to compensate for the employee’s
government work, and (2) the work at issue must actually be his
government work. Both must be proven for the conduct to come
within the ambit of the statute.18
The district court’s second rationale for restricting the
relevance of intent was based on Crandon’s statement that
§ 209(a) is a “‘prophylactic rule[ ] . . . intended to prevent even
the appearance of wrongdoing . . . that may apply to conduct
17
Although it may be correct that POGO’s understanding of the
scope of Berman’s government work is not relevant to the jury’s
determination of what the scope of that work really was, it is not clear
that the same is true of Berman’s understanding of the scope of his
own work -- any more than it would be correct to exclude testimony
from Berman’s supervisors about their understanding of the nature of
his duties. See FED. R. EVID. 401 (“‘Relevant evidence’ means
evidence having any tendency to make the existence of any fact that
is of consequence to the determination of the action more probable or
less probable than it would be without the evidence.”); FED. R. EVID.
402 (providing that “[a]ll relevant evidence is admissible”). We do
not pass on this question, however, as neither POGO nor Berman
raises it.
18
Similarly, (1) the payee must intend to receive the payment as
compensation for his government work, and (2) the work at issue must
actually be his government work.
29
that has caused no actual injury to the United States.’” POGO
VII, 543 F. Supp. 2d at 63 (quoting Crandon, 494 U.S. at 164).
From this premise, the district court concluded that “Congress
drafted § 209(a) to prohibit all private payments in
compensation for an employee’s government services -- even
payments that simply appear to be for an employee’s
government work.” Id. (emphasis omitted).
This is an over-reading of Crandon. The Supreme Court
did declare that § 209(a) is a prophylactic rule. But a rule that
bars payments intended to compensate an official for his
government work is plainly prophylactic. As we discussed
above, such payments are barred because they give the
appearance of wrongdoing, even if they do not actually injure
the United States in the sense of altering an official’s behavior.
See supra Part II.A.2. Crandon said that the purpose of the
statute was to prevent the “appearance of wrongdoing”; it did
not say that the purpose was to bar all payments “that simply
appear to be for an employee’s government work.” There is no
indication in either Crandon or the statute that the latter was the
“wrongdoing” at which the statute was aimed.
We do agree with the district court that Crandon made clear
that “[n]either good faith, nor full disclosure, nor exemplary
performance of public office will excuse the making or receipt
of a prohibited payment.” 494 U.S. at 165 (emphasis added).
But as we explained above, this means only that the statute does
not require a heightened form of mens rea. See supra Part
II.A.2. A payment is “prohibited” by § 209(a) if it is intended
to compensate an employee for government work. And if a
defendant makes such a payment, its good faith is no defense.
30
C
Finally, the government urges that, even “if error does exist,
it is harmless, as the district court admitted evidence of the
defendants’ subjective intent and allowed them to argue their
good faith to the jury.” Gov’t Br. 13. In fact, the record is quite
muddy as to how much (and what kind of) evidence of intent or
good faith the court permitted the defendants to introduce or
argue. But even if the court had permitted the jury to hear such
evidence in full, we could not conclude that this rendered the
error nonprejudicial. See Muldrow ex rel. Estate of Muldrow v.
Re-Direct, Inc., 493 F.3d 160, 168 (D.C. Cir. 2007) (stating that
the civil harmless error rule directs courts to disregard errors
that are not prejudicial).
The heart of the defense was that the defendants did not
intend the payment to be for Berman’s government service. As
we explained in POGO I:
The government contend[ed] that . . . ‘POGO paid Mr.
Berman because of the work he had done for Interior
and for his assistance to POGO in connection with that
work.’ Appellee’s Br. 8. POGO, however, insist[ed]
that . . . [i]t gave the award . . . not as compensation for
Berman’s government work, but in recognition of
whistleblowing that assertedly was outside the scope of
that work.
POGO I, 454 F.3d at 310. Moreover, while we have held above
that to find the defendants liable the jury must determine that
they intended the payment to be for Berman’s government
services, the district court instructed the jury that it need not
consider the defendants’ intent at all and could not consider
whether their intent was to compensate for government services.
We cannot conclude that an error of this importance did not
31
“affect[] the outcome of the district court proceedings.”
Muldrow, 493 F.3d at 168 (internal quotation marks omitted).
Accordingly, we must vacate the verdict and remand the case for
a new trial.
III
In addition to his challenge to the intent instruction, Berman
raises two further challenges that we address below.
A
Berman contends that the district court erroneously failed
to instruct the jury that a lump-sum payment cannot qualify as
unlawful compensation within the meaning of § 209(a).
Berman’s contention -- which was also the basis of his summary
judgment motion -- is that only an award that satisfies an
“objective definition of salary” or bears “indicia of salary” can
qualify. Berman Br. 12, 15-16; Berman Reply Br. 9. In
particular, he maintains that a single, non-periodic payment does
not meet this standard. There is no dispute that this case
involves only a single payment of $383,600. Thus, if Berman
is correct that a lump-sum payment does not fall within § 209(a),
the appropriate disposition would not simply be to remand for
a new trial, but to direct the dismissal of the case.
Berman’s argument would have weight if the statutory text
merely barred outside sources from paying federal employees
“salaries.”19 But § 209(a) goes considerably further than that.
Although it bars the payment of “any salary,” the section also
bars the payment of “any contribution to or supplementation of
19
See MERRIAM WEBSTER’S COLLEGIATE DICTIONARY 1031 (10th
ed. 1996) (defining “salary” as “fixed compensation paid regularly for
services”).
32
salary.” 18 U.S.C. § 209(a). The prohibition of a contribution
or supplementation plainly goes beyond a salary, and the
introductory adjective “any” expands the scope of coverage still
further. See MERRIAM WEBSTER’S COLLEGIATE DICTIONARY 53
(10th ed. 1996) (defining “any” as “one or some,
indiscriminately of whatever kind”); Dep’t of Housing & Urban
Dev. v. Rucker, 535 U.S. 125, 131 (2002) (noting that “the word
‘any’ has an expansive meaning” (quoting United States v.
Gonzales, 520 U.S. 1, 5 (1997)) (internal quotation marks
omitted)). Moreover, the statute uses the singular “contribution
to,” not “contributions to,” further suggesting that a one-time
payment can qualify.
An additional textual problem for Berman’s interpretation
is presented by subsections (d) and (e) of § 209, which exclude
from the coverage of subsection (a) some payments that are
typically lump-sum, or at least not periodic. Subsection (d)
provides, inter alia, that “[t]his section does not prohibit
payment [to] or acceptance of contributions” by employees for
certain travel and other expenses incident to attendance at
meetings authorized by Title 5. 18 U.S.C. § 209(d); see 5
U.S.C. § 4111(a). Similarly, subsection (e) provides that § 209
does not bar the receipt of relocation expenses for certain
executive exchanges. 18 U.S.C. § 209(e). If § 209(a) did not
cover lump-sum payments in the first place, it would have been
unnecessary for Congress to specify these exceptions. See, e.g.,
Ratzlaf v. United States, 510 U.S. 135, 140 (1994) (declaring
that “[j]udges should hesitate” to treat statutory provisions
“essentially as surplusage -- as words of no consequence”).
Nor do we think it likely that Congress would have wanted
to bar small but periodic payments intended to compensate an
employee for his government services, but to permit large single
-- or irregular -- payments that total a far greater sum. If the
statute is intended to prevent the appearance of wrongdoing, as
33
the Supreme Court has repeatedly declared, it is hard to see why
the public would regard the former as worse than the latter.
This court has certainly assumed that § 209(a) prohibits
lump-sum payments, see United States v. Muntain, 610 F.2d
964, 969 (D.C. Cir. 1979) (declaring that “there can be no
dispute that defendant . . . received a contribution from a source
outside the Government when he accepted [a one-time payment
of $800] for the Ireland trip”), as has the Seventh Circuit, see
United States v. Oberhardt, 887 F.2d 790, 793-94 (7th Cir.
1989) (holding that the defendant violated § 209 by paying a
government employee $200 for an official document).
Berman’s argument to the contrary rests primarily on the
concurring opinion of three justices in Crandon, 494 U.S. at
168-69 (Scalia, J., concurring), with which we respectfully
disagree for the textual reasons we have just discussed. Berman
also relies on a Second Circuit case, United States v. Alfisi,
which held that payments to an Agriculture Department
inspector did not violate § 209(a) because they bore no indicia
of salary. 308 F.3d 144, 153 (2d Cir. 2002). Regardless of
whether Alfisi is correct, the case did not address the relevance
of lump-sum payments at all, but rather turned on the fact that
the payments were “in cash and off-book.” Id.
In sum, because § 209(a) bars the payment of a lump-sum
as compensation for an employee’s government services, the
district court committed no error in refusing to instruct the jury
to the contrary.
B
Berman also objects to the court’s failure to instruct the
jury concerning which activities constituted his official
government work. In particular, he objects to the court’s refusal
to instruct that certain of his activities -- his internal
34
whistleblowing about oil companies’ undervaluation of the oil
they extracted from federal land -- were outside the scope of his
officially assigned duties. But as the district court noted, “[a]ll
throughout the summary judgment proceedings, both defendants
. . . maintained that the question of the nature and scope of
Berman’s official government duties was an issue of fact for the
jury to decide.” POGO VII, 543 F. Supp. 2d at 61. The court
correctly concluded that “it is for the jury to decide what
Berman’s official responsibilities were, what he did, and hence
whether his conduct constituted government services.” Id. And
the court’s instructions were adequate to guide the jury on this
issue. See Joy v. Bell Helicopter Textron, Inc., 999 F.2d 549,
557 (D.C. Cir. 1993).
C
For the foregoing reasons, we deny Berman’s challenges
to the jury instructions.20
20
In addition to those challenges, Berman raises a number of
arguments that can best be characterized either as evidentiary disputes
or as challenges to the sufficiency of the evidence to support the
verdict. Because it is not possible to predict what the record will look
like after a new trial, there is no reason for us to address those
challenges now. Berman also disputes the district court’s conclusion,
with respect to a separate count of the complaint, “that the same facts
that rendered Berman liable under § 209(a) also support a finding that
he breached his fiduciary duty to the government.” United States v.
Project on Gov’t Oversight, 572 F. Supp. 2d 73, 75-76 (D.D.C. 2008).
Because that conclusion appears to have been largely premised on
Berman’s now-vacated liability under § 209(a), we leave this issue for
the court’s reconsideration upon remand.
35
IV
We now turn to the government’s cross-appeal, which
maintains that the $120,000 penalty the district court imposed on
POGO contravenes the statutory penalty provision, 18 U.S.C.
§ 216(b), because it is less than the amount of POGO’s $383,600
payment. Although our decision to vacate the verdict
technically makes resolution of this issue unnecessary, we
resolve it now because the district court’s construction of the
provision is final and resolution will avoid the need for yet a
third appeal in the event the jury again returns a verdict against
the defendants.
The district court imposed a penalty on Berman in the full
amount of the payment he received, $383,600, reasoning that
“any lesser amount would mean that he still benefitted from the
violation of § 209(a).” POGO VII, 543 F. Supp. 2d at 69. As
for POGO, however, the court imposed a lesser penalty of
$120,000, stating that it was “persuaded that the record contains
adequate evidence that POGO made this payment openly and in
good faith.” Id.21 As the court explained:
Although Crandon holds that good faith is no defense
to liability under § 209(a), it does not suggest that a
Court cannot take good faith into account when
considering the appropriate penalty to impose. The
penalty of $120,000 reflects POGO’s good faith while
also recognizing that the payment was ultimately
unlawful. It is also a sufficient penalty to deter similar
future conduct by POGO or others.
21
This evidence included: “[POGO’s] prior disclosure to [the
Justice Department of its plan to make the payment], POGO’s desire
to [issue] a press release concerning the payment, and the appropriate
tax filings made by POGO.” POGO VII, 543 F. Supp. 2d at 69.
36
Id. (footnote omitted).
The government contends, first, that § 216(b) leaves the
district court no discretion: it must impose a penalty on each
defendant in the full amount of the unlawful payment.
Alternatively, the government contends that, even if § 216(b)
affords the court discretion, the court abused its discretion in this
case.
Our review of the district court’s interpretation of § 216(b)
is de novo. United States v. Fonseca, 435 F.3d 369, 371 (D.C.
Cir. 2006). If we conclude that the court properly interpreted
the statute to give it discretion regarding the amount of the
penalty, we review the court’s determination of the specific
penalty only for abuse of discretion. Jankins v. TDC Mgmt.
Corp., 21 F.3d 436, 445 (D.C. Cir. 1994).
A
Section 216(b) states that a defendant who has violated
§ 209(a) shall be subject to 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). The government maintains that the
introductory phrase, “not more than,” modifies only “$50,000
for each violation.” Thus, in the government’s view, the court
must impose a penalty of “either (1) not more than $50,000 [per
violation] or (2) the amount of illegal compensation, whichever
is greater.” Gov’t Reply Br. 4. In this case, because there was
only one violation, the penalty must be the greater of (a) $0 to
$50,000 or (b) $383,600. Gov’t Br. 53. And because $383,600
37
is the greater amount, the court may impose nothing less than
that. Id.
The district court, by contrast, concluded that “not more
than” modifies both the $50,000 per violation amount and the
compensation amount. On this view, the court must impose a
penalty of “not more than [1] $50,000 for each violation or [2]
the amount of compensation . . . , whichever amount is greater.”
18 U.S.C. § 216(b). In this case, that means the penalty must be
not more than the greater of $50,000 or $383,600. Because
$383,600 is the greater amount, the court may not impose more
than that. It may, however, impose less.
We agree with the district court that both “constructions of
the statute are plausible and can fairly comport with common
usage.” POGO VII, 543 F. Supp. 2d at 68. We also agree that
the court has chosen the better construction of the two.22
The government contends that its reading is the “far more
natural” one. Gov’t Reply Br. 1. We do not see why. To the
22
We note that other courts -- albeit in dicta -- have construed
other statutory penalty provisions with nearly identical grammatical
constructions in the same way that we construe § 216(b). See United
States v. Rosen, 296 F. App’x 188, 194 (2d Cir. 2008) (stating that 18
U.S.C. § 1956(a)(2), which provides that a defendant convicted of
money laundering shall be fined “not more than $500,000 or twice the
value of the [laundered] funds . . . whichever is greater,” authorizes a
fine of “up to twice the money laundered”; and affirming a fine of
$150,000 where twice the money laundered totaled more than
$600,000); United States v. Rasco, 853 F.2d 501, 503-04 (7th Cir.
1988) (stating that 18 U.S.C. § 215(a) (1988), which provided that a
defendant found guilty of certain bribery offenses shall be fined “not
more than $5,000 or three times the value of the thing given . . . ,
whichever is greater,” “merely provides for the maximum amount of
fine which can be imposed”).
38
contrary, it seems at least somewhat more natural to read the
introductory phrase -- “not more than” -- as modifying the next
two phrases in the sentence: “$50,000 for each violation” and
“the amount of the compensation.” On this reading, “not more
than” signals the two alternative ceiling amounts that follow:
(1) $50,000 per violation; or (2) the amount of compensation.
And the final clause, “whichever amount is greater,” then
provides a rule for deciding which of the two ceiling amounts
will govern. In so doing, the final clause ensures that, where the
payment is less than $50,000, the court may nonetheless impose
a sentence of up to $50,000. But in cases in which the payment
is more than $50,000, as it was here, the court may impose a
penalty of up to the full amount of the payment.
In comparison, the government’s reading seems somewhat
less natural, although we agree that § 216(b) is not a model of
legislative drafting. In its view, the penalty is either (1) $0 to
$50,000 or (2) $383,600 (the amount of compensation here),
whichever is greater. Gov’t Br. 53. Under this interpretation,
the statute instructs the court to compare not two fixed amounts,
but rather one range and one fixed number, and then to decide
which is “greater.” This strikes us as less natural in several
respects: it is unusual for a statute to compare a range and a
fixed number; the mathematical meaning of “greater” is
somewhat ambiguous in reference to a range; and this
construction requires viewing a range as an “amount.” The
latter is required because the final clause directs the choice of
“whichever amount is greater” -- a point the government
obscures by repeatedly using the phrase “whichever is greater”
rather than the statutory phrase “whichever amount is greater” --
in paraphrasing its preferred construction. See, e.g., Gov’t Br.
52-53; Gov’t Reply Br. 4, 6.
The government maintains that the district court’s (and our
own) reading does not “give meaningful effect to the clause,
39
‘whichever is greater.’” Gov’t Br. 52. Yet as we have just
explained, “whichever amount is greater” provides a rule for
deciding which of the two ceiling amounts will govern in a
particular case. Perhaps it could be said that the word “or” is
alone sufficient to permit the trial court to select the larger of the
two ceilings. But in our view, the decision rule would be at least
ambiguous if “or” were the only direction; the addition of the
final clause eliminates the ambiguity.
The government also insists that its view is “the only
construction consistent with the policy” of the statute because
“[t]here can be no policy interest in allowing a Government
employee to retain unlawful profits.” Gov’t Reply Br. 6.
Although it recognizes that in this case the district court did
deprive the government employee of those profits by imposing
a penalty in the full amount of the payment, the government
worries that our construction would permit a court to impose
less than the full amount. And the government cannot perceive
any circumstance in which a lesser amount would be justified.
We agree that, in most cases, penalizing the payee less than
the amount he was paid would not be justified. But we cannot
say that it never would be. It is important to note that the text of
§ 216(b) does not end with the indented quotation set out at the
beginning of this subpart. Rather, the next sentence states:
The imposition of a civil penalty under this subsection
does not preclude any other criminal or civil statutory,
common law, or administrative remedy, which is
available by law to the United States or any other
person.
18 U.S.C. § 216(b). We cannot say, for example, that it would
be unjustified for a judge to conclude, in a case in which a
defendant had already been subjected to an array of other
40
criminal and civil remedies -- perhaps exceeding the amount of
the payment -- that a further penalty in the full amount was
unnecessary. Accordingly, it would have been reasonable for
Congress to have left the precise amount of the penalty to the
judge’s discretion. And unlike the government, we do not detect
a general congressional antipathy towards leaving the amount of
civil penalties to a trial court’s good judgment.
Moreover, not even the government’s construction requires
the payee to disgorge the full amount of the payment in all
cases. Although it does have that effect when the amount of the
payment is more than $50,000 (per violation), that is not the
case when the payment is less. To the contrary, in that case the
government’s construction becomes somewhat indeterminant.
For example, where the amount of the payment is $25,000, the
government’s construction would require a penalty of: (1) “$0 -
$50,000” or (2) $25,000 -- whichever is greater. Gov’t Reply
Br. 5. But what is the meaning of “whichever is greater” when
one comparator is a range and the other is a fixed number within
that range? In its opening brief, the government says that “[t]he
only way to give meaningful effect to the clause, ‘whichever is
greater,’ is to construe § 216(b) as giving discretion to impose
a penalty up to $50,000 when the amount of compensation is
equal to or less than that amount.” Gov’t Br. 14-15 (emphasis
added). This seems a sensible way of interpreting the
government’s own construction, but the consequence is that it
would permit a court to impose a penalty of less than the
$25,000 payment -- thus defeating the government’s
disgorgement principle. In its reply brief and at oral argument,
the government backed away from this interpretation, insisting
that its construction requires the court to pick a penalty between
$25,000 and $50,000. Gov’t Reply Br. 6 n.1; see Oral Arg.
Recording 54:03-54:19. We have difficulty seeing how the
government’s construction yields that result, at least without
considerable verbal gymnastics.
41
Finally, whatever the persuasiveness of the government’s
“disgorgement” rationale for penalizing the payee in the full
amount of the payment, it does not apply to the penalty imposed
on the payor. The payor has no “ill-gotten gains” to disgorge;
to the contrary, it is already out the amount it paid. Yet under
the government’s construction, POGO as well as Berman must
be penalized the full $383,600. This is not to say that the payor
should not be penalized. But it is to say that the government has
articulated “no sound policy interest” -- or any reason at all --
that Congress might have had for a mandatory doubling of the
payor’s loss in every case. And that is further support for the
proposition that Congress did not intend the construction upon
which the government insists.
B
The government argues, in the alternative, that even if
§ 216(b) gives the district court discretion to impose a penalty
in an amount less than the unlawful payment, the court “abused
its discretion in considering evidence of POGO’s good faith”
without “holding a fair hearing to provide the Government with
the opportunity to supplement the record” on that issue. Gov’t
Br. 57-58. We note that the government never expressly sought
such a hearing, but rather described to the court the evidence it
would proffer if the court were to hold one. U.S. Resp. to
[POGO’s] Req. that the Court Impose No Penalty Upon the
Organization at 6-7 (Feb. 29, 2008). In any event, because we
are remanding the case for a new trial, the government will have
an opportunity to request a penalty hearing if the jury again
finds the defendants liable.
V
The judgment of the district court is reversed in part and
affirmed in part. The case is remanded to the district court with
42
instructions to vacate the jury’s verdict and to conduct further
proceedings consistent with this opinion.
So ordered.
EDWARDS, Senior Circuit Judge, concurring in the
judgment and concurring in part in the opinion: I concur in the
judgment reached by the majority. I also concur in much of the
analysis supporting majority opinion. However, I cannot concur
in the majority’s disposition of the Government’s cross-appeal
challenging the District Court’s construction of 18 U.S.C.
§ 216(b). I agree that the Government loses on the merits, but
I think the issue is much closer than is suggested by the majority
opinion.
As the majority opinion properly notes, our review of
§ 216(b) is de novo, so we owe no deference to the District
Court’s construction of the disputed penalty provision. It is
unclear whether the majority means to endorse the District
Court’s analysis of the disputed statutory provision or merely
affirm on other grounds. The latter appears to be the case. In
any event, the decision that we reach is far from ironclad.
Section 216(b) provides that a party who violates § 209(a)
is subject to 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).
The District Court found that “not more than” modifies both
the $50,000 per violation amount and the compensation amount.
Under this interpretation, a trial judge court may impose a
penalty of
[1] not more than $50,000 for each violation
or
[2] not more than the amount of compensation,
[3] whichever amount is greater.
2
The Government contends that the phrase “not more than”
modifies only “$50,000 for each violation.” Under the
Government’s interpretation, a person “shall be subject to a civil
penalty” of
[1] not more than $50,000 for each violation
or
[2] the amount of compensation which the person received
or offered for the prohibited conduct,
[3] whichever amount is greater.
I agree with the majority and with the District Court that both
“constructions of the statute are plausible.” U.S. v. Project on
Gov't Oversight, 543 F. Supp.2d 55, 68 (D.D.C. 2008).
As I see it, the Government is right in its contention that the
District Court’s construction strains the language of the statute.
There are three obvious problems with the District Court’s
construction. First, the statute says that a person shall be, not
may be, subject to a penalty for statutory violations. However,
under the District Court’s view, a trial judge has the discretion
to impose no penalty. Second, under the District Court’s view,
the word “amount” in the phrase “whichever amount is greater”
is rendered meaningless. And, third, the District Court’s reading
effectively nullifies the entire phrase “whichever amount is
greater.”
The District Court's construction unavoidably rests on the
assumption that “whichever amount is greater” refers to either
(1) “not more than $50,000" or (2) “not more than the amount
of compensation.” However, neither “not more than $50,000”
nor “not more than the amount of compensation” refers to a
discernable “amount.” Indeed, each range includes the
possibility of zero. Furthermore, under the District Court’s
construction, when a violation is $50,000 or less, “amount of
compensation” is irrelevant, since the trial court always retains
3
discretion to impose a penalty from $0 up to $50,000. When the
violation is over $50,000,“not more than $50,000” is irrelevant,
since the trial court always retains discretion to impose a penalty
from $0 to the amount of the violation. In other words, the
possible penalty range for a violation is determined by whether
the compensation is above or below $50,000, not by reference
to a comparison of two discernable amounts. In every case,
there is really only one penalty range in play. Given this reality,
the Government is not wrong in suggesting that the District
Court’s approach renders the clause “whichever amount is
greater” largely superfluous.
Obviously, the Government’s position is appealing. If
nothing else, it highlights the fact that § 216(b) is not a model of
legislative drafting. Nonetheless, as the majority correctly
notes, the Government’s view of the disputed language is not the
only plausible reading of the statute. Under the Government’s
construction of § 216(b), a penalty must be (1) “not more than
$50,000 ” or (2) “the amount of compensation,” “whichever is
greater.” Under this view, a trial judge would be required to
compare a range to a fixed value (the amount of compensation).
If compensation is below $50,000, then the penalty may fall
between the amount of the violation and $50,000. If the
compensation is above $50,000, then the penalty is the amount
of the compensation. The penalty can never be zero. This is a
plausible construction of the statute, but not more compelling
than the competing interpretation adopted by the majority
opinion.
The Government’s construction is problematic for at least
two reasons. First, it is unusual for a statute to compare a range
and a fixed number, as the Government would have it. Second,
the rigid penalty formulation to which the Government
subscribes affords the trial judge no discretion, which seems odd
with respect to a statute that includes the words “not more than.”
And the Government is simply incorrect in suggesting that our
4
construction of the statute fails to give any effect to the phrase
“whichever amount is greater.” Our interpretation is not
airtight, but this is because the statute is poorly worded.
This is a case in which judges are required to do the best
they can in construing a statutory provision that does not admit
of a straightforward interpretation. Because I am satisfied that
the construction that we endorse is marginally better than the
interpretation offered by the Government, I join the result
reached by the majority. In a case such as this, marginally better
is enough to carry the day.