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Americam Bank Note Company while he was "negotiating and had an arrangement concerning prospective employment" with the American Bank Note Company. 18 U.S.C. $208 (a) prohibits a federal employee from participating in official actions that affect a person or an organization in which the employee has a financial interest. Section 208 (b), however, clarifies that insubstantial interests are to be exempted. The court held that by using a narrow construction of 18 U.S.C. $208 (a) which is specified as the Congressional intent of the Act, the statutory term "negotiating" which Conlon was accused, required allegations of specific negotiating acts with his prospective employer. The term "arrangement between Conlon and the American Bank Note Company required specific bilateral arrangements or acts of arrangement. The accusations were dealt with in a cursory fashion in the indictment. In essence, the fact that the indictment in this case alleged the existence of an "arrangement" and that Conlon was "negotiating" was sufficient to state a violation of 18 U.S.C. $208 (a). In the prosecution of three counts of false declarations before the Grand Jury and one count of conflict of interest, the United Slates District Court entered it judgment dismissing all of the four counts and the Government appealed.

The Court of Appeals held that: (1) it was not necessary to require pleadings of "specific acts of negotiating' "specific bilateral arrangements or acts of arranging' " in order to save the federal conflict of interest statute from vagueness, and (2) the indictment, which charged that, during particular periods, the defendant, while employed in the executive branch, participated in the decision concerning the proposal of the company with which he was negotiating and with which he had an arrangement concerning prospective employment, was adequate to charge a violation of the federal conflict of interest statute.

5.

U.S. v. Hansen, Cr. No. 83-00075 (D.D.C. June 13, 1983).

This District Court decision held that 18 U.S.C. $1001 applies to false statements made on a financial disclosure report that was filed pursuant to the Ethics in Government Act of 1978. Currently, this case is pending in the Court of Appeals for the D.C. Circuit.

6.

U.S. v. Irons, 640 F.2d 872 (7th Cir. 1981).

Louis Irons, an Education Program Officer for the Department of Health, Education and Welfare was accused of personally and substantially participating in contracts between HEW and Advance Photo and Sounds, a company which he had personal financial interest. Irons was accused of instituting the delivery of equipment to be made pursuant to a contract and the receipt of money under the contract for such equipment. Such

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participation constituted a violation of the federal conflict of interest law which states that participation through ". decision, approval, disapproval, recommendation, the rendering of advice, or otherwise. . ." in contracts involves a conflict of interest. (18 U.S.C. $208 (a)). The District Court found Irons guilty. On appeal, the issue was whether the acts of "causing delivery to be made of equipment" and "receiving payment of monies for such equipment" were properly charged under the language of the statute as acts of proscribed participation in a contract involving a conflict of interest. The court determined that they were. The court refused to adopt a narrow interpretation of 18 U.S.C. $208 because it would distort Congressional intent. The court found that the "or otherwise" language of $208 included acts which execute or carry to completion a contract or matter as to which the acts of rendering advice or making recommendations are specifically proscribed. The Court of Appeals affimed the findings of the District Court.

The Court of Appeals found that the defendant's acts of causing delivery of equipment to be made pursuant to contract and of receiving payment of monies under the con

Por such equipmenti, constituted participation in the contract, for purposes of the statute proscribing participation through "decision, approval, disapproval, recommendation, the rendering of advice, or otherwise" in contracts involving conflict of interest. The case is affirmed.

7.

U.S. v. Mississippi Valley Generating Company, etc., 364 U.S. 520
(1961).

This case presents a conflict-of-interest problem that has farreaching significance in the area of public employment. It involves fundamental questions that relate to the standards of conduct that govern those who represent the Government in its business dealings. Adolphe Wenzell, Vice-President and Director of First Boston Corporation and Special Consultant to the Bureau of the Budget, undertook to advise the Government and act on its behalf in negotiations which culminated in a contract between the Government and the Mississippi Valley Generating Company. The contract called for the construction and operation by the Mississippi Generating company of a $100,000,000. steam power plant in the Memphis, Tenn. area. The plant was to supply electrical energy for the use of the Atomic Energy Commission (AEC) After the respondent had taken some steps to perform the contract, the AEC canceled the contract because the power was no longer needed. Respondent sued the Government in the Court of Claims for the amount it had expended on the contract. The Court of Claims awarded damages to the respondent. The Supreme Court granted cert. with regard to the conflict-of-interest questions. The issues were whether the activities of Wenzell violated 18 U.S.c. $434 and if so, did that fact alone preclude the respondent fram enforcing the contract. Both of these questions were answered affirmatively. The Supreme Court reversed the judgment below and remanded the case to the Court of Claims.

8.

U.S. V. Muntain, 610 F.2d 964, (D.C. Cir. 1979).

Charles Muntain, Assistant to the Secretary for Labor Relations for HUD, was convicted in District Court on eight counts of a 13count indictment. He was charged with various counts of improper conduct as a public official. While employed by the Government, Muntain was brought into contact with various contractor associations, trade associations and unions regarding labor relations and policies. He used these contacts to assist his partners with their sale of automobile insurance. The Court of Appeals found that there was sufficient evidence to support Muntain's conviction that he knowingly concealed his involvement in a group automobile insurance venture when he completed annual HUD confidential statements made by employees of their financial interests. The remaining convictions were remanded with instructions to enter a judgment of acquittal.

9.

U.S. v. Nasser; U.S. v. Hauff, 476 F.2d illl (7th Cir. 1973).

Former I.R.S. employee Nasser was convicted of violating the federal conflict of interest statute in the United States District Court. In addition, both Nasser and Hauff, Nasser's client, were convicted of conspiring to violate the conflict of interest statute. On appeal, Nasser and Hauff argue that $207 (a) of the federal conflict of interest statute violated the due process clause of the Fifth Amendment based on vagueness.

The defendants state that government employee Nasser had to decide (1) whether he participated "substantially" in a matter while he was employed; and (2) whether his mode of participation was encompassed by the words "or otherwise." Nasser claims that he could not fairly assess these questions because of the vagueness of the statute. The court found that the statute was sufficiently definite to permit a fact finder to decide whether the defendant's participation fell within the proscribed conduct. Nasser and Hauff also argued that $207(a) was a bill of attainder that violated Article I, $9 of the Constitution because it is a legislative act that imposes "punishment" on a group without a judicial trial. In other words, Nasser was forced to suffer as a result of his former employment by the Government. The court again disagreed. The statute accomplishes a legitimate legislative purpose; to protect the government from the use of governmental information by former government employees. Nasser and Hauff argued that $207(a) as applied to Nasser was an ex post facto law that violated Article I, 59 of the Constitution because the new law more closely restricted post-employment activity than the law in effect during most of Nasser's employment with the government. The court found that where there is a sufficiently rational relationship between the past activity and the public interest in excluding unworthy people, the disqualification is not a punishment and a law newly imposing it is not an ex post facto law. The remaining findings did not address the conflict of interest statute. The case was reversed and remanded to the U.S. District Court.

10. Woods v. Covington County Bank et al.; Hoglund v. Covington County

Bank et al., 537 F.2d 804 (5th Cir. 1976).

These actions seek damages from a number of defendants alleged to have been aiders and abettors of a fraudulent scheme concocted by Alexander & Allen, Inc. The prior litigation was prompted by an SEC injunction proceeding against Alexander & Allen, Inc. for violations of the anti-fraud provisions of the securities acts. The SEC alleged that Alexander & Allen began a solicitation to obtain money from Vietnam POWS who had accumulated sums in back pay during their years of imprisonment that amounted to approximately $316,260. The company was found to be perpetrating a "horrible fraud" on the former POWS and civilian investors. Several of the former POWS, including Commander Woods, met and decided to institute a private suit to recover their investments. The Navy decided to explore methods to aid the servicemen in their recovery of lost investments. Naval Captain Fink sought the advise of Roger Nichols, an attorney who was completing his tour of duty as reserve officer with the Judge Advocate General's Corp. Nichols supervised the suit until his duty was com pleted and then he returned to private practice. The Navy did not have the resources to further assist the servicemen, so Captain Fink referred the POWS to Nichols. Nichols agreed to return to active duty for five days to conduct an investigation and evaluate the chance of recovery. Nichols conducted his investigation and was released from active services. He returned, once again, to his private practice. Nichols was then contacted by Woods and the POWS to serve in the capacity of their personal counsel. Nichols accepted the case on a contingency basis. The U.S. Court of Appeals found that Nichols' participation in the class actions did not impugn his conduct while on active duty with the Navy or improperly disadvantage the appellees. The District Court's disqualification order cannot stand because it would inflict substantial harm on the military legal assistance programs and prejudice the appellants' cases below. Canon 9, which is frequently invoked because of the appearance that a public official's action may have been influenced by the prospect of private employment, cannot be manipulated in the case at bar for strategic advantages or on the impropriety which exists only in the minds of imaginative lawyers. The Court of Appeals reversed the disqualification of the U.S. District Court.

MEMORANDUM OPINION

U. S. v. GEORGE VERNON HANSEN

CRIMINAL NO. 83-00075, June 13,

1983

TAB XI

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