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In re Search Warrant

United States District Court, D. Columbia.

November 26, 2013

In re: Search Warrant


For UNITED STATES OF AMERICA, Plaintiff: Barak Cohen, LEAD ATTORNEY, U.S. DEPARTMENT OF JUSTICE, Criminal Division, Public Integrity Section, Washington, DC.




Pending before the Court is petitioner Robert A. Berman's Motion to Unseal Search Warrant Affidavit(s) [#21], which relates to a search and seizure warrant issued by this Court on March 25, 2000. The government opposes this Motion only insofar as it would reveal grand jury material. See Response to Motion to Unseal Search Warrant Affidavit(s) and Motion for Clarification [#24]. For more than thirteen years, Berman has been attempting to gain access to all of the records pertaining to the search and seizure of his property and the grand jury that investigated him. For the reasons stated below, this Court will grant Berman's Motion with respect to the materials related to the search warrant and will also order other additional relief.


A. Berman's Role in the Qui Tam Actions that Recovered $440 Million

The underlying facts involving the investigation and litigation against Berman by the government are well documented. See United States v. Project on Gov't Oversight, 839 F.Supp.2d 330, 333 (D.D.C. 2012) (" POGO 3" ) (citing cases). Berman was a senior economist in the Department of Interior when he became concerned that oil companies were underpaying royalties to the federal government when they extracted oil from federal or Native American lands. Id. Beginning in 1986, Berman advocated

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" the use of the New York Mercantile Exchange crude oil price-as opposed to the allegedly less accurate spot industry posted prices-for royalty valuations," but his efforts were opposed by the Mineral Management Services and he was ultimately told by a supervisor to cease his work on the " royalty issues." United States v. Project on Gov't Oversight, 525 F.Supp.2d 161, 163 (D.D.D. 2007) (" POGO 2" ).

In June 1994, an internal memorandum written by Berman was leaked to the nonprofit watchdog Project on Government Oversight (" POGO" ). POGO 3, 839 F.Supp.2d at 333. That group then contacted Berman, who provided it with guidance on how the industry worked and what kind of requests it should make under the Freedom of Information Act (" FOIA" ) in order to reveal illegal practices carried out by the oil companies. Id. Based in part on information obtained through FOIA with Berman's help, POGO filed two qui tam actions to recover unpaid royalties, under the False Claims Act, in the United States District Court for the Eastern District of Texas.

The United States intervened in the suits and ultimately recovered $440 million from multiple oil companies. See United States v. Project on Gov't Oversight, 454 F.3d 306, 307, 372 U.S.App. D.C. 110 (D.C. Cir. 2006) (" POGO 1" ). According to the Department of Justice, this included, as of 2001: $110 million from Shell Oil Company; $45 million from Mobil Oil; $7.3 million from Oxy USA, Inc.; $95 million from Chevron; $26 million from Conoco; $32 million from BP Amoco; $43 million from Texaco; $11.9 million from Pennzoil; $2.7 million UPRC; $200,000 from Sun Oil Company; $13 million from Kerr-McGee; and $7 million from Exxon. See Press Release, United States Department of Justice, " Shell Oil to Pay United States $110 Million for Underpayment of Oil Royalties" (Jan. 23, 2001).[1]

Before filing suit, POGO asked Berman if he wished to join as a co-relator for the qui tam actions, but he declined. POGO 1, 454 F.3d at 307. Instead, he entered into an agreement with POGO whereby he would receive one third of whatever POGO recovered through the litigation; POGO also agreed to give a one-third share to Robert Speir, who was an economist at the Department of Energy who had helped POGO understand the issue of oil royalties. Id. In October 1998, POGO received a $1.2 million share of the first settlement from Mobil Oil, in the qui tam action, and it issued a check to Berman in November 1998 for $383,600. POGO 3, 839 F.Supp.2d at 333. That check stated that it was a " Public Service Award," and an accompanying letter described it as an award for Berman's " decade-long public-spirited work to expose and stop the companies' underpayment of royalties for the production of crude oil on federal and Indian lands." Id.

B. The Government's Criminal Investigation Against Berman and Subsequent Civil Proceedings

Despite having obtained settlements worth $440 million in part due to the actions of Berman, the government responded to Berman's whistleblowing and discovery of massive fraud by attempting to criminally prosecute him for violations of " Title 18 U.S.C. § § 201 (bribery), 371 (conspiracy), 1001 (false statements), 1341, 1343 and 1346 (honest services mail fraud and wire fraud), and federal conflict of

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interest statute Title 18 U.S.C. § 209 (salary of government employees payable only by the United States)." Affidavit of Special Agent Joseph D. Crook, Jr. [#3-1] at 1-2 (" Crook Affidavit" ).[2] The government's theory appears to have been the claim that Berman and Speir gave " proprietary information" to POGO, which enabled it to file the qui tam suit for which Berman received the $383,600 payment. Id. at 3.

The government's focus was--and remains--on the payment from POGO to Berman. According to the Crook Affidavit, " referring to Berman's payments as an award does not insulate the payment from the application of Section 209," which prohibits a government employee from receiving any " compensation for his services as an officer or employee of the executive branch of the United States government . . . from any source other ...

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