Removal for Hefty Award Check from Outside Organization Hits A Snag

By on November 16, 2011 in Court Cases, Current Events with 15 Comments

Readers may recall the case of the Interior Department economist who was bestowed with a $383,600 monetary award by a group that the employee had assisted in bringing a successful false claims action involving underpayment by oil companies of royalties owed to the Mineral Management Service. (See my write-up on the appeals court’s handling of the government’s civil fraud case brought against the employee.)

Robert A. Berman, a GS-15 Economist at Department of the Interior, helped the Project on Government Oversight behind the scenes as POGO pursued “qui tam” false claims actions in Texas. In those actions POGO argued that various major oil companies had defrauded the U.S. government by undervaluing oil extracted from federal lands and therefore underreporting and underpaying the royalties they owed to MMS. This turned out to be a very lucrative situation for POGO when the government intervened in their suits and settled with the companies for around $440 million. (United States v. Project on Government Oversight, 525 F.Supp.2d, 161, 164 (D.D.C. 2007)

In gratitude to Berman for his help, POGO sent him a hefty award check ($383,600) for his “public-spirited work.”

Now, we have the most recent appeals court decision (Berman v. Department of the Interior, C.A.F.C. No. 2010-3052 (nonprecedential), 11/7/11) that deals with the agency’s efforts to fire Mr. Berman for his actions involving POGO.

Because Berman was so helpful to their cause, POGO had invited Berman to join in the qui tam suits. He declined but reached an agreement with the group that Berman would receive 1/3 of any money recovered in POGO’s suits against the oil companies. (Opinion p. 3)

True to its word, POGO sent Berman the $383,600 check indicating it represented a “Public Service Award” based on his “decade-long public-spirited work to expose and stop the oil companies’ underpayment of royalties for the production of crude oil on federal lands.” (pp. 3-4)

None too pleased, the U.S. Government sued POGO and Berman charging a civil violation of 18 U.S.C. 209(a), which provides:

“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.” (i.e. imprisonment for one to five years as well as a possible civil penalty.)

Once the civil action for violation of section 209 resulted in a jury verdict finding a violation, Interior removed Berman from his job, charging him with “misconduct” in that he used his “public office for private gain in accepting $383,600 from a private organization in violation of 18 U.S.C. 209(a) for performing [his] official duties.” (p. 6)

In reaching the final decision to fire Berman, the deciding official explained the several-year delay in bringing administrative action as due to the pending civil case brought by the government for the 209 violations. Once the jury verdict had been reached it was deemed to be a “determination made…that you improperly received money based on your government work and because of your status as a federal employee.” (p. 6) Although there were mitigating factors (26 years of service with no disciplinary record, superior ratings, etc.), the agency concluded that removal was appropriate because of the “egregiousness” of the violation. (p. 7)

On appeal to the Merit Systems Protection Board, the Administrative Judge upheld the removal, concluding Berman intended to use his public office for private gain and that the penalty was reasonable under the circumstances. The AJ held that the MSPB was estopped from reviewing the finding by the district court that Berman had violated 209, in spite of the fact that the verdict was at that time on appeal. (p. 7)

Berman took his case to the appeals court where the parties agreed to hold off until the appeal from the civil verdict had been decided. That other appeal resulted in a mixed bag, but the important aspect was that the court vacated the jury verdict and told the district court to try again. (For more details see the write up on this previous decision.) To date, there has been no new judgment at the trial level.

Meanwhile, back to Berman’s appeal of his removal….

The appeals court now rules that because the agency’s charge was supported by the finding that Berman had violated 209(a) and the MSPB relied on the jury verdict that has now been thrown out rather than making an independent determination whether he had in fact violated 209,the court “must vacate” the MSPB’s decision and remand for more “proceedings.” (p. 12) Specifically, the court has ordered MSPB to reopen discovery and hold a new evidentiary hearing. (p. 18)

About now the agency may be regretting that it did not follow the DOJ’s advice to “proceed slowly” on the removal action because the jury verdict could be appealed and potentially overturned. (See note 4 on p. 18)

Berman v. Interior by FedSmith, Inc.

© 2016 Susan McGuire Smith. All rights reserved. This article may not be reproduced without express written consent from Susan McGuire Smith.

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About the Author

Susan McGuire Smith spent most of her federal legal career with NASA, serving as Chief Counsel at Marshall Space Flight Center for 14 years. Her expertise is in government contracts, ethics, and personnel law.

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