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
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).
During the course of the investigation that led POGO to file the qui tam suits, the organization spoke with many people, including Robert A. Berman, a senior economist at the Interior Department. Beginning in 1994, POGO's executive director, Danielle Brian, had between twenty and thirty telephone conversations with Berman in which they discussed oil royalty issues. Berman helped Brian understand the underpayment question and draft Freedom of Information Act (FOIA) requests for government documents. In 1996, Brian asked Berman whether he wanted to join as a co-relator in the qui tam actions that POGO intended to file. See supra note 1. Although Berman declined POGO's offer, he subsequently entered into an agreement with POGO providing that he would receive one-third of any money POGO recovered through the litigation. See United States v. Project on Gov't Oversight, 454 F.3d 306, 307 (D.C.Cir.2006) (POGO I).
On November 2, 1998, POGO sent Berman a letter enclosing a $383,600 check. The face of the check indicated that it was a "Public Service Award," and the accompanying letter explained that POGO was awarding it to Berman for his "decade-long public-spirited work to expose and stop the oil companies' underpayment of royalties for the production of crude oil on federal and Indian lands." Id. (quoting Letter from Danielle Brian to Robert Berman (Nov. 2, 1998)).
On January 21, 2003, the Justice Department filed a civil complaint charging, inter alia, that POGO and Berman had
18 U.S.C. § 209(a). Section 216, referenced in the last line above, provides that whoever "engages in the conduct constituting the offense" may be imprisoned for not more than one year, and that whoever does so "willfully" may be imprisoned for not more than five years. Id. § 216(a)(1), (2). The section also authorizes the Attorney General to bring a civil action, as he did in this case, against any person who "engages in conduct constituting an offense under section ... 209," and provides that "upon proof of such conduct by a preponderance of the evidence, such person shall be subject to a civil penalty." Id. § 216(b).
On April 28, 2003, the government moved for summary judgment on the § 209(a) count. Thereafter, the district court granted the government's motion and certified its order for immediate appeal pursuant to 28 U.S.C. § 1292(b). Upon review, this court reversed the district court's order, finding "a genuine dispute as to whether POGO issued the check as compensation for [Berman's] government service." POGO I, 454 F.3d at 306.
After the case returned to the district court for trial, the defendants asked the court to instruct the jury that intent to compensate Berman for his services as a government employee was an essential element of a § 209(a) violation. At the government's urging, the court denied the request. The court also denied Berman's motion for summary judgment on the basis of his contention that § 209(a) does not, as a matter of law, apply to lump-sum (as opposed to periodic) payments.
Trial commenced on February 5, 2008. On February 11, the jury found POGO and Berman liable for violating § 209(a). Thereafter, the district court denied the defendants' post-trial motions for judgment as a matter of law or, in the alternative, for a new trial.
The district court also considered the appropriate penalties under 18 U.S.C. § 216(b), which provides for "a civil penalty of not more than $50,000 for each violation or the amount of compensation which the person received or offered for the prohibited conduct, whichever amount is greater." 18 U.S.C. § 216(b). POGO argued that this section gave the court discretion to impose any penalty up to the value of the $383,600 check that POGO had given Berman; and it asked the court to exercise that discretion to impose no penalty. The government countered that § 216(b) gave the court no discretion at all, but rather required it to impose a penalty of $383,600 on each of the defendants. The court agreed with POGO that it had discretion and, while it assessed a penalty of $383,600 against Berman, it imposed a penalty of only $120,000 against POGO because it found that the organization had given Berman the check in good faith. United States v. Project on Gov't Oversight, 543 F.Supp.2d 55, 69 (D.D.C.2008) (POGO VII).
In light of the plain language of § 209(a), the parties agree that a government employee who receives a payment is not liable unless the payment was received "as compensation for his services as an officer or employee of the executive branch of the United States Government." 18 U.S.C. § 209(a); see POGO I, 454 F.3d at 309. "Despite the awkward drafting" of § 209(a)'s two paragraphs, the same is true for a defendant who is a payor: it must make the payment as compensation for government services by the recipient. Crandon v. United States, 494 U.S. 152, 159, 110 S.Ct. 997, 108 L.Ed.2d 132 (1990). Accordingly, the district court instructed the jury that the government must prove that "the payment was as compensation for Mr. Berman's services as an officer or employee of the executive branch of the United States government." Trial Tr. 97 (Feb. 11, 2008).
The defendants, however, asked the court to further instruct the jury that the government had to prove they "intended [the payment] as compensation for [Berman's] services as an officer or employee of the United States." Def. [POGO's] Requested Instructions at 27 (Jan. 29, 2008) (emphasis added); see also Def. Berman's Special Instruction at 2 (Jan. 30, 2008). This the district court declined 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 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).
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
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 U.S.C. § 216(a)(1).
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, 114 S.Ct. 1793 ("[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, 105 S.Ct. 2084, 85 L.Ed.2d 434 (1985) (concluding that a statute requires a mens rea element "[a]bsent indication of contrary purpose in
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 was made as compensation "for" something, one must determine what the intended object was.
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, 119 S.Ct. 1402, 143 L.Ed.2d 576 (1999), namely, a "connection between respondent's intent and a specific official act," id. at 405, 119 S.Ct. 1402. 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, 119 S.Ct. 1402, 143 L.Ed.2d 576 (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, 120 S.Ct. 2159, 147 L.Ed.2d 203 (2000) (quoting X-Citement Video, 513 U.S. at 72, 115 S.Ct. 464); see also Sun-Diamond, 526 U.S. at 406-07, 119 S.Ct. 1402 (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
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 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).
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)
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 that require "specific intent."
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
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, 110 S.Ct. 997. 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, 110 S.Ct. 997. In the context of the Court's prior statement, this again appears to be a reference to the fact that § 209 proscribes payments made 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
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, 119 S.Ct. 1402. 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, 119 S.Ct. 1402, or rather "because of some particular official act," id. at 406, 119 S.Ct. 1402. 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, 119 S.Ct. 1402 (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.
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, 119 S.Ct. 1402; 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, 119 S.Ct. 1402.
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 that the trial judge had required the government to prove the defendant "knew the facts that made the conduct criminal." Id. at 652.
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). 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, 120 S.Ct. 2159 (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).
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).
In accord with this two-part analysis, the court gave the following instruction:
Trial Tr. 98-99 (Feb. 11, 2008) (emphases added). There are two errors in this instruction.
First, even if the instruction were otherwise correct, it was error to tell the jury
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, 115 S.Ct. 464 (emphasis added) (citing Morissette and Staples).
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, 114 S.Ct. 1793. 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,"
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, 114 S.Ct. 1793. 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 nongovernmental 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, 120 S.Ct. 2159 (internal quotation marks omitted).
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 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, 110 S.Ct. 997). 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, 110 S.Ct. 997 (emphasis added). But as we explained above, this means only that the statute
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:
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 "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.
In addition to his challenge to the intent instruction, Berman raises two further challenges that we address below.
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
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, 114 S.Ct. 655, 126 L.Ed.2d 615 (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 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, 110 S.Ct. 997 (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
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.
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 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).
For the foregoing reasons, we deny Berman's challenges to the jury instructions.
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.
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).
Section 216(b) states that a defendant who has violated § 209(a) shall be subject to a civil penalty of:
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 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.
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, `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
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 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.
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.
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
The judgment of the district court is reversed in part and affirmed in part. The case is remanded to the district court with 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
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
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
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 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 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.
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, 114 S.Ct. 1793. 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).