United States v. Project on Government Oversight

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 18, 2005 Decided July 14, 2006

No. 05-5008

UNITED STATES OF AMERICA,
APPELLEE

v.

PROJECT ON GOVERNMENT OVERSIGHT,
APPELLANT

Appeal from the United States District Court
for the District of Columbia
(No. 03cv00096)

Andrew D. Herman argued the cause for appellant. With
him on the briefs were Stanley M. Brand and Ross A. Nabatoff.

Robert M. Loeb, Attorney, U.S. Department of Justice,
argued the cause for appellee United States of America. With
him on the brief were Peter D. Keisler, Assistant Attorney
General, Kenneth L. Wainstein, U.S. Attorney, and Douglas N.
Letter, Litigation Counsel.

Before: GINSBURG, Chief Judge, and GARLAND and
BROWN, Circuit Judges.

Opinion for the Court filed by Circuit Judge GARLAND.
 2

GARLAND, Circuit Judge: The Project on Government
Oversight (POGO), a non-profit organization, appeals from the
district court’s grant of summary judgment holding it liable for
violating 18 U.S.C. § 209(a). That statute prohibits a private
party from making a contribution to the salary of an executive
branch official “as compensation for his services” as a
government employee. The district court found there was no
genuine dispute that POGO violated § 209(a) by issuing a check
to a Department of Interior economist. We conclude, however,
that there was a genuine dispute as to whether POGO issued the
check as compensation for the economist’s government service.
Accordingly, we reverse the judgment of the district court and
remand the case for further proceedings.

I

POGO is an organization that “investigates, exposes and
seeks to remedy systematic abuses of power, mismanagement,
and subservience of the federal Government to special
interests.” Appellant’s Br. 5. In December 1993, POGO began
investigating whether oil companies were committing fraud by
undervaluing the amount of oil that they extracted from federal
and Indian lands, resulting in the underpayment of royalties
owed to the United States. Over the next three years, POGO
undertook numerous efforts to focus public attention on the
issue. On June 9, 1997, after concluding that the government
was unlikely to pursue the matter, POGO filed two qui tam
actions in the United States District Court for the Eastern
District of Texas. The actions alleged that major oil companies
had violated the False Claims Act, 31 U.S.C. § 3729, by
undervaluing the oil they extracted and then underreporting and
underpaying the oil royalties they owed.1 After POGO filed the

1
The False Claims Act imposes a civil penalty and treble damages
on any person who, inter alia, “knowingly presents, or causes to be
 3

suit, the United States intervened and entered into settlement
agreements that eventually totaled $440 million.

During the course of its investigation, POGO 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. In 1996, Brian asked Berman
whether he wanted to join POGO as a co-relator in the qui tam
actions that the organization intended to file. See supra note 1.
Although Berman declined POGO’s offer to be a co-relator, he
subsequently entered into an agreement with POGO providing
that he would receive one-third of any money that POGO
recovered through the litigation. See J.A. 67. POGO also
agreed to give a one-third share to Robert Speir, an economist
at the Department of Energy, with whom it also had discussed
the issue of oil royalties. See id.

After POGO received its $1.2 million share of the first
settlement in the qui tam actions, POGO attorney Lon Packard
informed Kenneth Dodd, the Assistant United States Attorney

presented, to an officer or employee of the United States
Government[,] . . . a false or fraudulent claim for payment or
approval.” 31 U.S.C. § 3729(a). Section 3730(b) 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 take over the action, 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 31 U.S.C. § 3730(d)(1)-(2); see generally United States ex
rel. Yesudian v. Howard Univ., 153 F.3d 731, 736 (D.C. Cir. 1998).
 4

working on the qui tam litigation, that POGO intended to give
Berman a portion of its recovery. See Def. POGO’s Statement
of Material Facts ¶ 36. Although Dodd informed other officials
at the Justice Department of POGO’s intention, no one told
POGO to abandon its plan to remunerate Berman. See id. at ¶
42. In addition, Berman consulted his government ethics officer
to determine whether he could legally accept the proposed
payment. See Brian Dep. 256 (July 23, 1999). Berman reported
to Brian that the ethics officer advised that he could accept it.
See id. On November 2, 1998, POGO issued a check to Berman
in the amount of $383,600. The face of the check indicated that
it was a “Public Service Award,” and the accompanying letter
from POGO explained that it was given 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.” J.A. 73-74.

On January 21, 2003, the Justice Department filed a civil
complaint against Berman and POGO charging, inter alia, that
the payment and receipt of the $383,600 violated 18 U.S.C. §
209(a). The government moved for summary judgment on the
§ 209(a) count on April 28, 2003, and POGO cross-moved on
June 24, 2003. A year later, on June 22, 2004, the district court
convened the parties and told them that the case appeared ill-
suited for summary judgment: “Counsel, I have looked over this
file and I’ll tell you what my inclination at this point is. I do not
think that I could grant either [m]otion for [s]ummary
judgment.” Hr’g Tr. 2 (June 22, 2004). Noting that the case
was “fact depend[e]nt,” id. at 6, the court told the parties: “I’m
going to ask you to come back here in two weeks and tell me
when you could try the case.” Id. at 7.

When the parties reconvened two weeks later, however, the
district court reversed course. This time, the court told the
parties: “I don’t like the implications of what it was that Mr.
 5

Berman did, and I think that this reaches it. I may be wrong.”
Hr’g Tr. 19 (July 9, 2004). On August 31, 2004, the court
granted the government’s motion for summary judgment on the
charge that POGO and Berman violated § 209(a). The court’s
order contained no explanation, other than that the motion was
granted “for substantially the reasons set forth in Plaintiff’s
memorandum in support.” See United States v. Project on Gov’t
Oversight, No. 03-0096, Order at 1 (D.D.C. Aug. 31, 2004). At
the same time, the court certified its order for immediate appeal
pursuant to 28 U.S.C. § 1292(b). See id. POGO’s appeal is now
before us.2

II

We review the district court’s grant of summary judgment
de novo. See Waterhouse v. District of Columbia, 298 F.3d 989,
991 (D.C. Cir. 2002). Summary judgment is appropriate only if
“‘there is no genuine issue as to any material fact and . . . the
moving party is entitled to a judgment as a matter of law.’”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986)
(quoting FED. R. CIV. P. 56(c)). A dispute about a material fact
is genuine “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id. at 248. We must
view the evidence in the light most favorable to the nonmoving
party, draw all reasonable inferences in its favor, and eschew
making credibility determinations or weighing the evidence.
See Lathram v. Snow, 336 F.3d 1085, 1088 (D.C. Cir. 2003)
(citing Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150
(2000)).

2
No appeal has been filed by defendant Berman, and the parties
have made no representations regarding his status.
 6

A

Section 209(a) provides, 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). The referenced section, § 216(a), provides
that whoever “engages in the conduct constituting the offense”
shall be imprisoned for not more than one year, 18 U.S.C. §
216(a)(1), and that whoever “willfully engages in the conduct
constituting the offense” shall be imprisoned for not more than
five years, 18 U.S.C. § 216(a)(2). Section 216(b) 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.” 18 U.S.C. § 216(b).

In light of the statutory language, both parties agree that one
element of the offense that the government must prove by a
preponderance of the evidence is that POGO made a
contribution to or supplementation of Berman’s salary “as
 7

compensation for his services as an officer or employee” of the
United States. 18 U.S.C. § 209(a); see Appellee’s Br. 14, 15;
Appellant’s Br. 20, 29-32. As we held in United States v.
Muntain, “[f]or there to be a violation of § 209, . . . the
contribution must have been 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); accord United States
v. Raborn, 575 F.2d 688, 691-92 (9th Cir. 1978).

Services that a government employee provides other than as
part of his official responsibilities do not satisfy this
requirement. In Muntain, for example, we found that the
Assistant to the Secretary for Labor Relations at the Department
of Housing and Urban Development (HUD), who functioned as
HUD’s chief liaison with organized labor and chief spokesman
on labor relations matters, did not violate § 209(a) by receiving
compensation for promoting a private insurance scheme to labor
unions. See 610 F.2d at 966, 969-70. In reaching that
conclusion, we indicated that the statute is violated if the
compensation is “‘for the [s]ervices rendered to the
Government,’” or if the “‘employee renders the same or similar
services to both the Government and a private person.’” 610
F.2d at 970 n.5 (quoting 41 Op. Att’y Gen. 217, 220 (1955)).
The statute “‘does not, however, prohibit payment for services
rendered exclusively to private persons or organizations and
which have no connection with the services rendered to the
Government.’” Id. (quoting 41 Op. Att’y Gen. at 220); see
Crandon v. United States, 494 U.S. 152, 165 (1990) (“‘[T]his
rule prohibit[s] two payrolls and two paymasters for the same
employee on the same job.’” (quoting with approval Association
of the Bar of the City of New York, Conflict of Interest and
Federal Service 211 (1960)) (emphasis added)).
 8

The Department of Justice has itself concluded that § 209
does not “prohibit all non-government payments to an individual
where there is any nexus between the payment and the
individual’s employment by the government.” Application of
18 U.S.C. § 209 to Employee-Inventors Who Receive Outside
Royalty Payments, Op. Off. Legal Counsel, U.S. Dep’t Justice,
2000 WL 33952879 (Sept. 5, 2000) (internal quotation marks
omitted). Rather, the statute requires “an intentional, direct link
between the outside compensation and the employee’s
government service.” Id.3 The Department’s conclusion was
based on a 1962 amendment that substituted the “as
compensation for” requirement for the previous requirement that
the payments be “in connection with” an employee’s services to
the government. Id. As the House Report explained, the
amendment was made “in order to emphasize the intent that the
prohibition is against private payment made expressly for
services rendered to the Government”; Congress regarded the
former “in connection with” phrase as too “vague and capable
of an indefinitely broad interpretation.” H.R. REP. NO. 87-748,
at 24-25 (1961).4

The district court’s grant of summary judgment against
POGO can thus be upheld only if there is no genuine dispute
that POGO paid Berman as compensation for his services as an
Interior Department economist. The government contends that

3
See also Summary of the Restriction on Supplementation of
Salary, Off. Gov’t Ethics 3-4 (2002) (“To make out an offense under
section 209, there must be a direct linkage between the thing of value
paid to the employee and the official services rendered by the
employee.”).
4
The Senate Report stated: “Section 209 is similar to . . . [the
former 18 U.S.C. §] 1914. . . . The new language is more precise in
expressing what is clearly intended by the present broad phrase.” S.
REP. NO. 87- 2213, at 14 (1962).
 9

is precisely the case: “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,
insists that there is a genuine dispute regarding this point. It
gave the award, POGO explains, not as compensation for
Berman’s government work, but in recognition of
whistleblowing that assertedly was outside the scope of that
work. See Brian Dep. 112 (July 23, 1999).

B

The government offers an array of evidence supporting its
contention that POGO paid Berman as compensation for his
government service. First, the government proffers evidence
regarding the nature of Berman’s job at the Interior Department.
It cites affidavits, filed by Berman’s supervisors at Interior’s
Office of Policy Analysis, which state that “[d]uring the period
from 1993-96, and possibly before, [Berman] was the lead
analyst in the office on oil royalty valuation issues,” Bettenberg
Aff. 2; that his responsibilities included the “policies and
procedures used for the collection of royalties on oil and gas
leases issued by the Department,” Heintz Aff. 1; and that he was
“part of an interagency task force dealing with oil valuation
issues,” id. at 2. The government also contends that, when
Berman testified before a congressional committee in 1996, he
made many of the same allegations that POGO would later make
in its qui tam complaint.

Second, the government cites testimony by POGO’s
Danielle Brian which, it argues, shows that the services that led
POGO to compensate Berman were the same as those he
provided the government. In depositions taken during the qui
tam litigation, Brian testified that she “considered Mr. Berman
an ally and an asset in [the] effort . . . on the oil royalty
question.” Brian Dep. 71 (July 23, 1999). She conceded that,
 10

before filing the qui tam suit, she had roughly twenty to thirty
conversations with Berman. See id. at 81. Brian said that
Berman helped her understand issues relating to the
underpayment question, see id. at 69, and that he helped her
draft a Freedom of Information Act (FOIA) suit for documents
in the possession of the government, see id. at 72. She also
testified that she sought out Berman because he had been one of
the “people who had . . . for a decade” tried “to get the
government to do something about the underpayment of
royalties,” id. at 112; because he “was known as the only person
in the [D]epartment who was really caring about this issue,” id.
at 64; and because he was “a great advocate on this issue
internally” within the Department, id. at 69. Indeed, she
testified that a memorandum written by Berman (apparently in
1986), which was leaked to her by an anonymous source, proved
critical to her understanding of the oil royalties scheme. See id.
at 106-07.

Finally, the government points to further statements by
Brian that it regards as express admissions that POGO paid
Berman as compensation for his government work. These
include minutes of a POGO Board of Directors’ meeting that
discussed the agreement to pay Berman a portion of the qui tam
recovery. The minutes stated: “Ms. Brian mentioned that an
agreement has been worked out that if there is some reward, . .
. the individuals that have been doing this work for years would
be compensated.” J.A. 53 (emphasis added). The government
also cites the letter Brian sent to Berman accompanying the
$383,600 check, which said: “We are giving you this check as
an award for your decade-long public-spirited work to expose
and stop the oil companies’ underpayment of royalties.” J.A.
73. In addition, a press release that POGO drafted to announce
the payments to Berman and Speir described the two as “loyal
public servants [who] have played a central role in fixing many
serious problems within government,” and noted that “it seemed
 11

only fair that the two unsung heros be compensated in keeping
with the spirit of the False Claims Act.” J.A. 111 (emphasis
added).

C

Although the government’s evidence is impressive, there is
also evidence that contradicts it. First, Berman has stated that
his supervisors’ depiction of his Interior Department
responsibilities is “false.” Def. Berman’s Mem. in Opp’n to
Pl.’s Mot. For Summ. J. & in Supp. of Def. POGO’s Cross Mot.
for Summ. J., Ex. 9, Berman Decl. ¶ 9. “At no time during [my]
tenure,” he declared, “did I have any programmatic authority or
responsibility over oil pricing policies or royalty collection
policies at [Interior].” Id. at ¶ 1. Supervisor Theodore Heintz’s
affidavit was “particularly deceptive,” Berman said, in
describing his “area of responsibility” as “policies and
procedures with respect to the collection of royalties for oil and
gas leases issued by the Department.” Def. Berman’s
Counterstatement of Material Facts ¶ 70. Moreover, “[c]ontrary
to the assertion contained in [Heintz’s] affidavit,” he “never
served on the Interagency Taskforce . . . on oil prices and oil
royalty collection.” Berman Decl. ¶ 7.5

5
Providing some support for Berman’s position is Brian’s
testimony that Berman “checked with his ethics officer” and was told
that he “was allowed to accept the money.” Brian Dep. 256 (July 23,
1999). Although “[n]either good faith, nor full disclosure” is a
defense to a § 209(a) civil action, see Crandon, 494 U.S. at 165, the
advice of the Interior Department ethics officer may be evidence that
the Department did not view Berman’s official work as the same as or
similar to that for which he was being rewarded by POGO. And
Berman’s report to Brian regarding that advice may be seen as
evidence confirming POGO’s understanding, see discussion infra, that
the work was different.
 12

According to Berman, although he did study oil pricing and
royalties collection policies from 1986 to 1987, he did so on his
own initiative and, impliedly, not as part of his government
responsibilities. See id. at ¶ 4. It was during this period that
Berman wrote the internal memorandum later obtained by
POGO. See Def. Berman’s Counterstatement of Material Facts
¶¶ 9-10. Thereafter, however, Interior officials told him to stop
making suggestions because it “create[d] unnecessary
problems,” and he “complied with this instruction.” Berman
Decl. ¶ 5. Following the “rejection of his suggestion[s] in
1987,” Berman said, he “ceased his analysis of the oil
companies’ underpayment of royalties.” Def. Berman’s
Counterstatement of Material Facts ¶ 21. Although Berman’s
statements are somewhat ambiguous, they suggest that
continuing efforts he made to alert his supervisors “about the
fraudulent practices” of the oil companies represented an
independent undertaking that was not part of his official
responsibilities. Berman Decl. ¶ 8.

Second, POGO denies that it compensated Berman for
services that it thought were part of his government
responsibilities. Supporting this denial is Brian’s qui tam
testimony that she believed “it wasn’t [Berman’s] job to look
into whether . . . royalties had been underpaid by these
companies,” Brian Dep. 353 (Sept. 13, 1999), and that at the
time she discussed a proceeds-sharing agreement with Berman,
his government work did not involve the oil royalty issue at all,
id. at 395. Brian also testified that it was she who suggested that
congressional staff call Berman as a witness on the royalty issue,
and that he testified against the Interior Department’s wishes
and position. See Brian Dep. 90-91 (July 23, 1999). That,
POGO insists, is the meaning of Brian’s statement that Berman
was one of the “people who had . . . for a decade [tried] to get
the government to do something about the underpayment of
royalties,” id. at 112, and that he “was known as the only person
 13

in the [D]epartment who was really caring about this issue,” id.
at 64.

In her depositions, Brian did not dispute that she considered
Berman “an ally and an asset” on the royalty issue, Brian Dep.
71 (July 23, 1999), and that he helped her in understanding an
issue relating to royalty underpayments, see Brian Dep. 342
(Sept. 13, 1999). But she did dispute that Berman’s assistance
stemmed from his government employment. She testified that
about half the calls she made to Berman were to his home,
because “this wasn’t really a part of what he was working on.”
Brian Dep. 67 (July 23, 1999). And while Brian acknowledged
that Berman helped her draft a FOIA request for government
documents, see id. at 72, she denied that he leaked inside
information to her or that he helped prepare the qui tam case, see
id. at 72-73, 287. Indeed, even if the agreement to divide the qui
tam proceeds suggests the contrary, not even the government
argues that leaking confidential information or helping a
plaintiff prepare a FOIA request or qui tam complaint were part
of Berman’s job description.6

Finally, POGO argues that the government has taken its
statements about compensating Berman out of context. It does
not deny that it intended to “compensate” him, but insists that it

6
Cf. Def. POGO’s Statement of Material Facts 11 (statement by
Dodd, the government’s lead attorney on the qui tam litigation, that
Berman “played absolutely no role in my office’s, and as I understand
it, Commercial Litigation’s decision to intervene in these [qui tam]
cases, an evaluation of the merit of the cases against the oil companies,
any settlement or settlement discussions with any of the oil companies
or any of the computations of damage analysis that were done”). The
civil complaint filed by the government does include other counts
against Berman, including “Breach of Fiduciary Duty.” Compl. ¶¶ 48-
51. Berman is not a party to this appeal, however, and those counts
are not at issue here.
 14

neither said nor meant that it compensated him for his
government work. Rather, POGO asserts that the “work” for
which it compensated Berman, as referenced in the Board
minutes, transmittal letter, and draft press release, was work as
an internal “whistleblower who went well beyond his official
duties to defend the taxpayers’ interests.” Appellant’s Br. 36-
37; see Brian Dep. 112 (July 23, 1999); Brian Dep. 353 (Sept.
13, 1999).

D

There is no doubt that the government has made out a
strong case against POGO, that Berman’s declarations lack
clarity and contain some internal contradictions, and that Brian’s
statements provide fodder for potentially damaging cross-
examination. POGO may well have an uphill battle in showing
that Berman’s Interior Department duties did not include the
same internal “whistleblowing” for which POGO rewarded him
or that POGO did not understand that to be his responsibility
when it decided to “compensate” him. But the question before
the court is not whether the government has a strong case, or
even whether it has established that case by a preponderance of
the evidence. At “the summary judgment stage[,] the judge’s
function is not himself to weigh the evidence and determine the
truth of the matter but to determine whether there is a genuine
issue for trial.” Anderson, 477 U.S. at 249. The only question
before us is whether there is a genuine dispute that POGO paid
Berman as compensation for his services as a government
employee.

In light of the evidence reviewed above, we cannot say that
no “reasonable jury could return a verdict” for POGO. Id. at
248. This is particularly so because much of POGO’s defense
hinges on the credibility of Berman and Brian. To be sure, that
credibility may have been undermined by prior statements and
 15

other evidence. On summary judgment, however, “the court
must view the evidence in the light most favorable to the
nonmoving party and must not assess witness credibility.”
Borgo v. Goldin, 204 F.3d 251, 254 (D.C. Cir. 2000).
Evaluation of the credibility of witnesses must be left to the
factfinder, see Mendes-Silva v. United States, 980 F.2d 1482,
1488 (D.C. Cir. 1993), and “the need to assess the credibility of
witnesses is precisely what places this dispute outside the proper
realm of summary judgment.” Washington Post Co. v. United
States Dep’t of Health & Human Servs., 865 F.2d 320, 326 n.8
(D.C. Cir. 1989).

III

Although the parties raise a host of additional issues, we
have no reason to reach them. Because there is a genuine issue
of material fact as to whether POGO paid Berman “as
compensation for his services as an . . . employee of the
executive branch,” 18 U.S.C. § 209(a), the district court erred in
granting summary judgment in favor of the government. We
therefore reverse the court’s judgment and remand the matter for
further proceedings.

So ordered.