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Wednesday, June 12, 2024 | Back issues
Courthouse News Service Courthouse News Service

Covert Whistle-Blower Gets Sealed Docs Exposed

(CN) - An economist who helped force oil companies to turn over $440 million in unpaid royalties can access the search warrant against him, a federal magistrate ruled.

The case stems from advice Robert Berman gave to the nonprofit watchdog Project on Government Oversight (POGO) in June 1994 on how to use the Freedom of Information Act to reveal that oil companies were underpaying royalties to the federal government when they extracted oil from federal or American Indian lands.

Berman, who had been working in the Interior Department's Office of Policy Analysis at the time, declined to join POGO as a co-relator in two subsequent False Claims Act actions but agreed to receive one-third of the group's share from any recovery.

The feds later intervened in the group's two whistle-blower actions, netting a total recovery of $440 million from multiple oil giants.

That included, as of 2001, $7 million from Exxon, $11.9 million from Pennzoil, $26 million from Conoco, $32 million from BP Amoco, $43 million from Texaco, $45 million from Mobil, $95 million from Chevron, and $110 million from Shell, the Department of Justice said.

After POGO received $1.2 million from the first Mobil settlement in 1998, it issued Berman a $383,600 "Public Service Award" check for his "decade-long public-spirited work."

The government then sued Berman for bribery, conspiracy, false statements, honest services mail fraud and wire fraud, and a federal conflict of interest violation.

A jury found in 2008 that Berman and POGO had violated the law, and the court assessed a civil penalty of $383,000 against the economist and $120,000 against the nonprofit.

The case was remanded, however, when the D.C. Circuit found on appeal that the jury had been improperly instructed on the issue of intent.

U.S. District Judge John Bates agreed with the government in March 2012 that federal employees cannot be compensated for public work, and that "Berman breached his fiduciary duty to the government by accepting an investment interest in POGO's litigation without any disclosure at all, and eventually accepting a payment from POGO without 'full disclosure.'"

About a year later, Berman moved to unseal all jury materials, including those "used to obtain financial and tax records," and the affidavit Special Agent Joseph Crook Jr. filed in support of a search warrant.

Although U.S. Magistrate Judge Deborah Robinson granted the government's motion to unseal the search warrant application and affidavit in February 2008, the docket remained sealed.

This past July, the Washington, D.C.-based court ordered the government to submit redacted and unredacted versions of the affidavit, but not the grand jury materials, for in camera review.

Before the Thanksgiving holiday, U.S. Magistrate Judge John Facciola granted Berman's motion to unseal.

"Although the government is now arguing that neither its motion nor Judge Robinson's order intended to allow Berman access to grand jury information in the Crook affidavit, this position has no basis in the record," Facciola wrote. "The government unequivocally asked for the Crook affidavit to be unsealed and, five years later, this court intends to make sure that it actually is."

The court agreed to keep Berman's private financial information off the public docket.

"In light of Judge Robinson's order, this court will order that the docket on this matter be unsealed in full," Facciola wrote. "The only document that is sealed in this matter is the application for the search warrant and the incorporated Crook affidavit; once it is unsealed, there is no reason to have the remainder of the docket sealed. Unsealing the docket will also have the ancillary effect of giving Berman a more accurate picture of what has happened in this matter in the past 13 years."

The judge said additional grand jury materials may "no longer exist" at this point, however, and ordered the government to clear up the matter by Dec. 17.

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