LAWRENCE H. CRANDON, ET AL., PETITIONERS V. UNITED STATES OF
   AMERICA

   THE BOEING COMPANY, INC., PETITIONER V. UNITED STATES OF AMERICA

   No. 88-931 and No. 88-938

   In the Supreme Court of the United States

   October Term, 1989

   On Writs Of Certiorari To The United States Court Of Appeals For
The Fourth Circuit

   Brief For The United States

                      PARTIES TO THE PROCEEDINGS

   The United States was the plaintiff in the district court and the
appellant in the court of appeals.  The defendants in the district
court and appellees in the court of appeals were petitioners Boeing
Company, Lawrence H. Crandon, Thomas K. Jones, Harold Kitson, Jr.,
Melvyn R. Paisley, and Herbert A. Reynolds.

            TABLE OF CONTENTS
   Opinions below
   Jurisdiction
   Statutory provisions involved
   Statement
   Summary of argument
   Argument:
      The court of appeals correctly held that Boeing's
      payments to the individual employees violated 18
      U.S.C. 209(a) and that the United States is entitled
      to recover the amount of the payments
      I. The payments at issue violated 18 U.S.C.
         209(a)
         A. Section 209(a) broadly prohibits outside
            compensation in order to assure
            the independence and undivided loyalty
            of government officials
         B. Boeing's payments supplemented the
            individual petitioners' federal salaries
            and constituted compensation for their
            federal services
            1. The payments were "supplementations
               of salary" within the meaning
               of Section 209(a)
            2. Section 209(a) does not exempt
               supplementations of salary made
               prior to the commencement of federal
               service
            3. The payments constituted
               "compensation for" the recipients'
               federal service within the meaning
               of Section 209(a)
     II. The United States is entitled to recover the
        amount of the payments in this action
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-15a) /1/ is
reported at 845 F.2d 476.  The opinion of the district court (Pet.
App. 16a-29a) is reported at 653 F. Supp. 1381.

                             JURISDICTION

   The court of appeals' judgment was entered on May 5, 1988, and
petitions for rehearing were denied on September 7, 1988 (Pet. App.
30a-31a).  The certiorari petitions in No. 88-931 (Individ. Pet.) and
No. 88-938 (Boeing Pet.) were filed on December 5 and 6, 1988, and
were granted on April 3, 1989.  The jurisdiction of this Court rests
on 28 U.S.C. 1254(1).

                     STATUTORY PROVISIONS INVOLVED

   18 U.S.C. 209(a) and 18 U.S.C. 1914 (1958) are reproduced at App.,
infra, 1a-2a.

                          QUESTIONS PRESENTED

   1. Whether payments made by petitioner Boeing Company to five
employees -- which were made solely because the employees planned to
accept positions with the Department of Defense, and which were
calculated to make up the difference between the recipients' salaries
and benefits with the federal government and their higher salaries and
benefits with Boeing -- violated the prohibition in 18 U.S.C. 209(a)
against the private supplementation of the salaries of federal
officials.

   2. Whether the United States is entitled to recover the amount of
the illegal payments either from the recipients or from petitioner
Boeing, to the extent recovery against Boeing is not time-barred.

                               STATEMENT

   In 1981 and 1982, petitioner Boeing Company, a large defense
contractor, paid a total of $485,000 to five of its employees,
petitioners Melvyn Paisley, T.K. Jones, Herbert Reynolds, Harold
Kitson, and Lawrence Crandon.  The payments were made solely because
the recipients planned to accept responsible positions in the
Department of Defense, and they were calculated to make up the
difference between the federal salary and benefits the recipient would
earn while in government and the higher salary and benefits he would
have earned if he had remained with Boeing, as well as to defray other
expenses incurred in accepting the positions.  The court of appeals
held that the payments violated 18 U.S.C. 209(a), which bars private
supplementation of the salaries paid by the United States for its
employees' services, and that the United States is entitled to recover
the amount of the payments in this civil action.

   1. The record establishes that the payments at issue were made by
Boeing to the five individual petitioners only because they had been
selected for high-level positions in the Department of Defense, and in
each case the payment was made immediately before or after the
recipient began federal service.  /2/ The payments were designed to
induce or facilitate the recipient's acceptance of the federal
position.  J.A. 288-289, 290-291, 304, 317-318, 329;  see also GX 122,
at 21-22 (C.A. App. 602);  GX 121, at 108 (C.A. App. 724);  J.A. 116.
/3/ During the preceding 20-year period the only persons to whom
Boeing offered such payments were those -- 16 in all -- who left the
Company to accept positions of responsibility with the United States
Government, typically in the Department of Defense or the National
Aeronautices and Space Administration (NASA).  /4/

   The circumstances of the payments also demonstrate that they were
calculated to make up the difference between the recipient's federal
salary and his higher Boeing salary and to defray other costs
associated with accepting the government position.  Each of the
individual petitioners submitted to Boeing a written calculation of
the projected reduction in his income over the expected period of his
government employment.  In monetary terms, the vast majority (and in
some cases all) of the submissions consisted of (1) the difference
between the salary and benefits he expected to realize for the
duration of his federal position (identified in each case as the time
remaining in the first Administration of President Reagan) and the
higher salary and benefits he would have realized if he had stayed
with Boeing, and (2) additional expenses he would incur in moving to
and living in the Washington, D.C., area, such as moving expenses,
house-hunting or rental costs, and higher state taxes and cost of
living as compared with Seattle.  Some of the petitioners also
included in their submissions an estimate of the cash value of unused
accrued leave, the accrued but unvested Company contributions to a
corporate savings plan, and stock options that had been granted but
were not yet exercisable.  No other departing employee was entitled to
the value of these benefits.  J.A. 369-371.  Moreover, in each case,
the amounts requested for these accrued but unvested items represented
a relatively small portion of the overall payment the individual
sought.  See generally J.A. Lodging Nos. 10 (Jones), 11 (Paisley), /5/
12 (Reynolds), 13 (Kitson);  J.A. 526-529 (Crandon).

   Boeing relied on similar considerations in its calculation of the
severance payments.  Charles P. Hagberg, Boeing's Assistant Director
for Corporate Compensation, testified that the Company calculated the
"severance" pay for each of the five individual petitioners as the sum
of four factors:  (1) the difference between his Boeing and federal
salaries over the projected term of his federal employment, (2) the
amount the Company would have contributed to two investment plans
during the expected period of government employment if petitioners had
remained at Boeing, (3) the cost of moving to Washington, D.C., and
(4) the difference in the cost of living between Seattle and
Washington.  J.A. 366-375.  See also J.A. 280-283 (June 17, 1982,
description of Boeing policy for payments "to employees who would
suffer substantial loss in salary and/or benefits by accepting
Government employment and who are approved for participation by the
Chief Executive Officer.").

   The initial application of the four-factor test to each petitioner
was made by the Industrial Relations Department in the Boeing
Aerospace Company, the division of petitioner Boeing that employed
each of them.  See J.A. Lodging Nos. 5 (Paisley), 6 (Jones), 7
(Reynolds), 8 (Kitson), 9 (Crandon).  Mr. Hagberg thereafter verified
the calculations.  J.A. 413-414.  The President of Boeing Aerospace,
Henry K. Hebeler, also reviewed the calculations.  J.A. 326-327.
Relying on the judgment of the Industrial Relations Department, Mr.
Hebeler made written recommendations to petitioner Boeing's Senior
Vice President, Clyde Skeen, and its Vice President for Industrial and
Public Relations, Stanley M. Little, that the amounts be paid as
proposed.  J.A. 274-279, 284;  J.A. Lodging Nos. 2, 15, 17, 18.  /6/

   Mr. Little, who knew how the payments were calculated (GX 121 (J.A.
310-313, 316-318;  C.A. App. 689-690, 706, 728-729);  J.A. 188),
reviewed the recommendations of Mr. Hebeler and the Industrial
Relations Department with T.A. Wilson, petitioner Boeing's chief
executive officer.  J.A. 308-309.  Mr. Wilson knew that the
calculations included the difference between each employee's Boeing
salary and prospective government salary, as well as moving expenses.
J.A. 288-290.  Mr. Wilson was not acquainted with several of the
individuals (J.A. 287-288) -- or, therefore, with their past services
to Boeing -- and he had no information presented to him other than the
Industrial Relations Department's calculations and recommendations.
Mr. Wilson made no change in the amounts recommended for Jones,
Reynolds, Kitson or Crandon.  He did conclude that the proposed
payment of $220,536 to Paisley was too high, and the Industrial
Relations Department reduced the figure to the present value in 1981
of receiving $220,536 over four years, using a discount rate of 12%.
The resulting figure of $180,064 was rounded to $180,000 and then
approved.  J.A. 382-385;  J.A. Lodging No. 5.  /7/ Each individual
petitioner also received a separate check for the amount of his vested
benefits, to which any departing Boeing employee was entitled (Pet.
App. 4a).

   2. The United States brought this civil action, alleging that the
payments violated 18 U.S.C. 209(a) and seeking disgorgement of the
payments by the individual petitioners and damages from Boeing in an
equivalent amount.  The district court granted judgment in favor of
petitioners (Pet. App. 16a-29a).  The court first held that Section
209(a) does not prohibit any supplementation of a federal salary that
is paid prior to the formal onset of the recipient's government
employment (id. at 25a, 26a).  The court further held that the
payments were not unlawful under Section 209(a) because, as the court
saw it, they were intended to "sever the relationship" between Boeing
and its employees, not to supplement their government salaries or
compensate them for their government service (id. at 20a, 26a).  The
court accepted the government's proof that the challenged payments
were made by Boeing to induce the recipients to accept federal
employment and to bridge the disparity between private and public
salaries and benefits;  that Boeing made such payments solely to
persons leaving the Company for federal employment;  and that the
payments were intended by Boeing as the equivalent of the "paid leave"
it granted to employees who work for a state or local government (id.
at 17a-18a, 26a).  But the court concluded that "the formula for
calculation of severance pay cannot make the payment something other
than severance pay" (id. at 26a).

   The district court also ruled that the United States could not in
any event recover damages in the amount of payments made in violation
of Section 209(a) without showing actual corruption on the part of
Boeing or the individual petitioners, which it had not proven (Pet.
App. 28a).  Finally, in the court's view, such payments could not be
recovered unless they were "secret," and it believed that the
individual petitioners had made sufficient disclosure of the payments
to certain employees of the Department of Defense (id. at 27a).  /8/

   3. The court of appeals reversed (Pet. App. 1a-15a).  It first
held, contrary to the district court's view, that payments made prior
to the onset of federal service are within the reach of Section 209(a)
(Pet. App. 6a-7a).  The court noted that prior to 1962, the
predecessor statute applied to "(w)hoever, being a Government official
or employee," received a supplementation of salary (18 U.S.C. 1914
(1958)), but that Congress deleted the phrase "being a Government
official or employee" when it enacted the present 18 U.S.C. 209 in
1962.  The court also found this interpretation supported by the
policies underlying Section 209 and the conflict-of-interest laws
generally, which establish "rigid rules of conduct" to prevent
activities that "'arouse suspicions of malfeasance and corruption'"
(Pet. App. 6a-7a).  The court explained that "(l)arge severance
payments by defense contractors to those going to work at high levels
in the Defense Department certainly 'arouse suspicions,' and those
suspicions are not reduced by making the payments just before
government service begins" (id. at 7a).

   The court of appeals rejected the view that Section 209(a) states
an objective standard of conduct and requires no showing of intent,
since Section 209(a) prohibits payments made "as compensation for" the
recipient's federal services (Pet. App. 7a).  However, the court found
that the record established "compensatory intent," and that the
district court's contrary finding was clearly erroneous (id. at 8a).
The court relied on four factors.  First, the recipients and Boeing
personnel officials "calculated salary, benefits and cost-of-living
differences over the expected term of government employment," and the
Chairman of Boeing, who approved the payments, "received a
recommendation and was aware of the factors used to reach that figure"
(ibid.).  Second, "Boeing's stated purpose in making the payments was
to encourage public service by lessening the financial penalties
involved in accepting government employment" (ibid.).  Third, Boeing's
parallel policy of providing paid leave for its employees who work for
a state or local government "suggests that payments to federal
employees were designed to do the same thing without technically
violating Section 209" (ibid.).  Fourth, the fact that only 21 such
payments were made over the preceding 25 years, and only to persons
entering high-level government positions, "suggests an intent to
supplement the federal salaries of a limited number of employees"
(ibid.).

   The court of appeals rejected petitioners' contention that the
government was not injured, and that the individual petitioners
therefore were entitled to retain the payments, because they did not
result in an actual conflict of interest.  The court explained that
this argument "ignores the preventive nature of the conflict of
interest laws," under which "the appearance of conflicts rather than
actual conflicts or corruption is all that is necessary" (Pet. App.
8a-9a).  In this case, the court concluded, "(t)he appearance of large
payments by a defense contractor to key Defense Department employees
is enough;  there is no need to show an actual conflict, much less
actual corruption" (id. at 9a).

   Finally, the court rejected petitioners' argument, based on
common-law principles, that only "secret" profits give rise to a
conflict of interest.  The court reasoned that this suit is based on
the statutory rule prescribed by Section 209, which is not limited to
secret payments (Pet. App. 9a).  Moreover, the court noted that even
under the common law, effective disclosure must be "formal, complete,
and directed to the proper parties" (ibid.).  Here, because the
individual petitioners' financial-reporting forms revealed only their
total income from Boeing, without separately identifying severance
payments, the court concluded that any disclosures were "not
sufficiently complete to insulate the payments from the conflict of
interest laws" (ibid.).  /9/

                          SUMMARY OF ARGUMENT

   I.A. The prohibition in 18 U.S.C. 209 against private
supplementation of federal salaries was first enacted in 1917 (see 18
U.S.C. 1914 (1958)) and was revised and reenacted as part of the
comprehensive revision of the conflict-of-interest laws in 1962.  It
is "directed at the crime of bribery in its open or subtle form"
(Muschany v. United States, 324 U.S. 49, 68 (1945)) and embodies the
principle that "no Government official or employee should serve two
masters to the prejudice of his unbiased devotion to the interests of
the United States" (33 Op. A.G. 273, 275 (1922)).  Accordingly,
Section 209 is framed as an absolute prohibition against double
compensation.

   B.1. Section 209(a) bars a person from receiving any privately paid
salary or "supplementation of salary, as compensation for his services
as an officer or employee of the executive branch * * *." The
"severance" payments at issue in this case constituted
"supplementations of salary" within the meaning of this provision.
The principal component of each payment was an amount specifically
designed to compensate the recipient for the difference between his
federal salary and benefits during the anticipated period of his
government service and the higher salary and benefits he would have
received if he had remained with Boeing.  Unquestionably a payment
calculated on that basis is a "supplementation" of the federal salary
for purposes of Section 209.  The statute is not limited to
supplementations in the nature of "salary," however.  The provision
has consistently been construed, both before 1962 and after, to bar
payment of such items as travel and moving expenses and cost-of-living
allowances for federal employees.  Congress declined to disturb those
administrative rulings when it enacted specific exceptions to several
of them in 1958 and 1979, and Congress reenacted the basic prohibition
in 1962 after it had been given a broad interpretation.  Against this
background, the other principal components of the payments here --
moving expenses and a cost-of-living allowance -- also constituted
illegal salary supplementations for purposes of Section 209.

   2. Contrary to petitioners' contention, the absolute prohibition
against double compensation cannot be circumvented simply by arranging
for a lump-sum payment to be made before the recipient begins work.
The prohibition applies to "(w)hoever" receives "any" supplementation
of salary for services rendered as a federal official;  that
all-encompassing language does not require that the recipient actually
be in office at the time of payment or exclude certain
supplementations based on their timing.  The former Section 1914
applied to "(w)hoever, being a Government official or employee, "but
even with that limiting language it was understood by the Department
of Justice and commentators to apply to severance payments made prior
to the commencement of federal service.  Significantly, moreover, that
phrase was deleted from the statute in 1962, when Congress also
deleted a virtually identical phrase in a related conflict-of-interest
statute for the specific purpose of reaching payments made prior to
the commencement of federal service.  The policies of the prohibition
likewise support his interpretation, because, as in the case of a
bribe, an advance payment can be presumed to have a lingering effect
on the recipient when he performs his official duties.  Nor can an
interpretation permitting private lump-sum payments for the
recipient's federal services be justified by the need to attract
qualified personnel to government, because Congress has enacted
express exceptions when it concluded they were necessary.

   3. The payments at issue here also constituted "compensation for"
the recipients' federal services within the meaning of Section 209.
The background and legislative history of that phrase show that it is
intended to describe the requisite nexus between the payment and the
services.  In particular, Section 209 and its predecessor have been
consistently construed to bar payments that were avowedly designed as
supplementations of federal salary or that singled out federal
employees for special treatment.  The undisputed evidence and factual
findings by the district court establish that the payments at issue
here had both of those characteristics, since Boeing offered
"severance" payments only to persons entering federal service and
based them on the financial losses the recipients would experience as
a result.  For these reasons, and because the payments were intended
to induce the recipients to accept positions in a Department in which
Boeing is substantially interested, the payments, by definition,
constituted "compensation for" the recipients' federal service.  This
conclusion conforms to the consistent views of the Department of
Justice, the Office of Government Ethics, and the leading
commentators.

   Section 209 does not require a showing of specific intent to
supplement federal salaries as compensation for federal services;  it
is sufficient to show that the defendant knowingly made or received a
payment having characteristics that rendered it unlawful under this
settled construction of the statute.  In any event, the district
court's finding that petitioners did not act with "compensatory
intent" was clearly erroneous.

   II. The United States has a civil cause of action to require the
recipients to disgorge the illegal payments or to recover damages from
Boeing.  Petitioners are not excused from liability in such an action
on a waiver theory based on alleged disclosures of the payments to
government officials on the recipients' financial-reporting forms.
Section 209 does not authorize an administrative waiver, and the
regulations governing the financial-disclosure program expressly
provide that the filing of a report does not serve to exempt an
employee from any substantive restrictions.  There is no factual basis
for petitioners' waiver argument in any event, because the recipients
did not list their "severance payments" as such on their disclosure
forms.

                               ARGUMENT

   THE COURT OF APPEALS CORRECTLY HELD THAT BOEING'S PAYMENTS TO THE
INDIVIDUAL EMPLOYEES VIOLATED 18 U.S.C. 209(a) AND THAT THE UNITED
STATES IS ENTITLED TO RECOVER THE AMOUNT OF THE PAYMENTS

   Section 209(a) of Title 18 establishes a broad prohibition against
private supplementation of the salary a federal employee is paid for
his services to the United States.  The payments at issue in this case
were classic violations of that prohibition:  they were made solely
because the recipients planned to assume positions in the Department
of Defense;  they were calculated to make up the difference between
the recipients' government salaries and their higher Boeing salaries,
as well as to defray other expenses incurred in accepting government
employment;  and they were intended to encourage the recipients to
accept that employment by mitigating the resulting financial
sacrifices.  The court of appeals' holding that such payments violate
Section 209(a) is supported by the text and legislative history of the
statute and the views of the commentators who were intimately involved
in its enactment.  That holding also is consistent with the advice
given by the Department of Justice to other agencies and prospective
appointees for many years.  The court below therefore correctly held
that the individual petitioners must disgorge the illegal payments and
that, in the alternative, the United States may recover the amount of
the payments from Boeing, to the extent recovery is not time-barred.

   We do not contend that all "severance" payments made by a private
employer to an individual entering federal service are prohibited by
Section 209(a).  The typical severance payment, which is made in
consideration of past services to the employer and which does not take
account of the anticipated future employment of the recipient, is not
barred by Section 209(a) -- especially if made pursuant to a
pre-existing policy applicable to departing employees generally.
Although such a payment may have the effect of "supplementing" the
recipient's federal salary in the sense that it will be available
during the period of his federal service, the payment is not made in
consideration of -- "as compensation for" -- that federal service.
But where, as here, the "severance" payment is made only because the
recipient plans to accept a position with the federal government and
the payment is calculated to compensate for the lower federal salary
and other financial sacrifices associated with federal employment,
Section 209(a) squarely applies.  Such a payment is made, not as
compensation for the recipient's past services to the private
employer, but as compensation for his future services to the United
States.

   I. THE PAYMENTS AT ISSUE VIOLATED 18 U.S.C. 209(a)

   A. Section 209(a) Broadly Prohibits Outside Compensation In Order
To Assure The Independence and Undivided Loyalty Of Government
Officials

   The long history of the prohibition against private supplementation
of salaries paid to federal employees for the performance of their
official duties demonstrates a firm congressional purpose to assure
the independence and undivided loyalty of government employees.

   1. Section 209(a) was enacted in 1962 as part of the comprehensive
revision of the conflict-of-interest laws made by Pub. L. No. 87-849,
76 Stat. 1119, 1125.  It carries forward the basic prohibition against
outside compensation contained in 18 U.S.C. 1914 (1958), which was
enacted by Section 1 of the Act of March 3, 1917, ch. 163, 39 Stat.
1106.

   The 1917 provision was enacted in response to the practice of
substantial payments by private foundations to supplement the federal
salaries of individuals employed by the Bureau of Education at the
rate of $1 per year.  Congress was concerned that the recipients might
be induced to adhere to the views of the foundations who furnished
their financial support, and that the government would, as a result,
be deprived of their independent judgment in matters affecting the
Nation's youth.  /10/ Congress further concluded that the threat to
the independence of government officials exemplified by the practice
in the Bureau of Education was a government-wide concern, and it
accordingly gave the 1917 Act a government-wide sweep.  Nor was the
1917 Act limited to payments by persons who had business before the
agency in which the recipient was employed.  These broad features of
the basic prohibition were carried forward in the present Section
209(a), which applies to the receipt and payment of "any" salary and
"any" supplementation of or contribution to salary, "(w)hoever" may be
the payor.  /11/

   Soon after the 1917 Act was passed, the Attorney General explained
that the prohibition embodies the principle that "no Government
official or employee should serve two masters to the prejudice of his
unbiased devotion to the interests of the United States." 33 Op. A.G.
273, 275 (1922).  This Court similarly observed that Section 1914 was
"directed at the crime of bribery in its open or subtle form."
Muschany v. United States, 324 U.S. at 68.  The background of the 1962
revision of the conflict-of-interest laws demonstrates that these same
purposes animated Congress's decision to retain the prohibition
against outside compensation in the present 18 U.S.C. 209(a), albeit
with certain modifications discussed below.

   2. Congress enacted the present 18 U.S.C. 209(a) and related
conflict-of-interest laws in 1962 based upon in-depth studies of the
then-existing laws by the House Judiciary Committee, the Association
of the Bar of the City of New York, the Executive Branch, and various
commentators.  /12/ In 1957, Chairman Celler instructed the House
Judiciary Committee staff "to prepare a detailed study and analysis of
existing Federal conflict-of-interest laws to the end that they might
be revised, simplified, and coordinated" (H.R. Rep. No. 748, 87th
Cong., 1st Sess. 7 (1961) (House Report)).  The resulting report
recommended that Congress retain the prohibition against
supplementation of federal salaries, with certain revisions.  Staff of
Subcomm. No. 5 of the House Comm. on the Judiciary, 85th Cong., 2d
Sess., Federal Conflict of Interest Legislation 44-46, 61-63 (Comm.
Print 1958) (Staff Report).  Based on a review of the background of 18
U.S.C. 1914 (1958) and the precedents construing it, the Staff Report
explained (at 44) that the prohibition rests on the premise that when
a government employee receives outside compensation for his government
work, "his impartiality may become impaired, not only in direct
transactions with that employer on behalf of the Government, but also
with respect to general policies espoused by the private employer."
For this reason, the report stressed, the provision "is framed as an
absolute prohibition against double compensation" (ibid., citing
McElwain & Vorenberg, The Federal Conflict of Interest Statutes, 65
Harv. L. Rev. 955, 966-967 (1952)).  Echoing that view, the Judiciary
Committee's Report on the bill enacted in 1962 explained that the
provision "seeks to avoid divided loyalty of Government officials by
prohibiting private compensation of Government services" (House Report
6).

   Congress's revision of the governing laws in 1962 also was based on
its consideration of what the House Report described as "(a)
penetrating 2-year study of the operation of the Federal
conflict-of-interest statutes undertaken by a special committee on
conflict of interest laws of the Association of the Bar of the City of
New York." House Report 8;  see also S. Rep. No. 2213, 87th Cong., 2d
Sess. 4 (1962) (Senate Report).  The Bar Association's report
elaborated upon the purposes of the prohibition against outside
compensation (N.Y. Bar Report 211-212):

         The rule is really a special case of the general injunction
      against serving two masters.  Three basic concerns underlie this
      rule prohibiting two payrolls and two paymasters for the same
      employee on the same job.  First, the outside payor has a hold
      on the employee deriving from his ability to cut off one of the
      employee's economic lifelines.  Second, the employee may tend to
      favor his outside payor even though no direct pressure is put on
      him to do so.  And, third, because of these real risks, the
      arrangement has a generally unwholesome appearance that breeds
      suspicion and bitterness among fellow employees and other
      observers.  The public interpretation is apt to be that if an
      outside party is paying a government employee and is not paying
      him for past services, he must be paying him for some current
      services to the payor during a time when his services are
      supposed to be devoted to the government.  In part the fear is
      that the government employee will not keep his nose to the
      grindstone;  in part the fear is close to the fear of bribery;
      in part the fear is that outside forces will subvert the
      operation of regular policy-making procedures in the government
      (the historical source of Section 1914);  and in part the rule
      is grounded in consideration of personnel administration.

   In light of these broad prophylactic purposes, the Bar Association
likewise described the prohibition in absolute terms:  "In the
strictest sense, Section 1914 is a conflict of interest statute.  The
employee does not have to do anything improper in his office to
violate the statute.  His receipt of the outside salary for his
government work, coupled with his status as a government employee, is
all that is required" (N.Y. Bar Report 55).

   The responsible congressional committees conducted extensive
hearings in 1960, 1961 and 1962 on bills that incorporated the
recommendations of the Judiciary Committee staff and the New York City
Bar Association.  See 1960 Hearings;  Federal Conflict of Interest
Legislation:  Hearings on H.R. 302, H.R. 3050, H.R. 3411, H.R. 3412
and H.R. 7139 Before the Antitrust Subcomm. (Subcomm. No. 5) of the
House Comm. on the Judiciary, 87th Cong., 1st Sess. (1961) (1961
Hearings);  Conflicts of Interest:  Hearing on H.R. 8140 Before the
Senate Comm. on the Judiciary, 87th Cong., 2d Sess. (1962) (1962
Hearing).  /13/ The 1962 revision of the conflict-of-interest laws,
including 18 U.S.C. 209, largely incorporated those recommendations,
taking into account as well the views of the Executive Branch and
commentators (see note 13, supra).  /14/

   Thus, in enacting 18 U.S.C. 209, Congress reaffirmed the
fundamental importance of what the court of appeals termed the "rigid
rules" against private supplementation of the salaries paid to
government officials for their services to the United States.  Those
rules serve to preserve both the actual independence and undivided
loyalty of government officials and the public's faith in those
virtues, which are essential to "'the very fabric of a democratic
society'" (Pet. App. 6a-7a, quoting United States v. Mississippi
Valley Generating Co., 364 U.S. 520, 562 (1961)).  /15/ These concerns
are directly implicated in this case, because, as the court of appeals
observed, "(l)arge severance payments by defense contractors to those
going to work at high levels in the Defense Department certainly
'arouse suspicions'" (Pet. App. 7a) -- just as private supplementation
of salaries in the Bureau of Education aroused suspicion in 1917 and
led to enactment of the prohibition now contained in Section 209(a).
As we now show, the text and legislative history of Section 209
demonstrate that petitioners violated that statute.

   B. Boeing's Payments Supplemented The Individual Petitioners'
Federal Salaries And Constituted Compensation For Their Federal
Services

   1. The Payments Were "Supplementations Of Salary" Within The
Meaning Of Section 209(a)

   Section 209(a) bars the receipt of "any salary, or any contribution
to or supplementation of salary, as compensation for (the recipient's)
services as an officer or employee of the executive branch * * * from
any source other than the Government of the United States * * *." /16/
The payments at issue in this case violated the explicit terms of this
provision.

   a. The principal purpose and effect of the severance payments in
this case was to make up some or all of the difference between the
recipient's federal salary and benefits and the higher salary and
benefits he would have earned if he had remained with Boeing.  This
much is evident from the fact that a salary and benefit differential
was the principal component of the calculations prepared by both the
individual petitioners and Boeing.  See pages 4-7, supra.  There can
be no doubt that a payment resting on that rationale constitutes a
"supplementation" of the recipient's federal salary for purposes of 18
U.S.C. 209(a).  The New York City Bar Association, for example, stated
in its 1960 report with respect to the prior Section 1914:  "Clearly
the appointee's former employer cannot under this section make up the
difference between his former salary and his government salary." N.Y.
Bar Report 65.  There is no indication that Congress departed from
that central principle when it enacted Section 209 in 1962.  To the
contrary, Roswell Perkins, Chairman of the Bar Association's special
committee and the leading contemporary commentator on the
conflict-of-interest laws, /17/ explained immediately thereafter that
"(t)he most important application of the outside compensation
prohibition is the typical case where a corporate executive is asked
to go to Washington, and his corporation offers to pay all or part of
the difference between his present salary and his future government
salary." Perkins, 76 Harv. L. Rev. at 1137-1138;  Petrowitz, Conflict
of Interest in Federal Procurement, 29 Law & Contemp. Probs. 196, 209
n.48 (1964) (same).

   b. The other components of the payments at issue here also are
"supplementation(s) of salary" within the meaning of Section 209(a).
The quoted phrase has not been construed to limit the prohibition to
payments in the nature of "salary," narrowly defined -- i.e., a "fixed
annual or periodical payment for services" (Benedict v. United States,
176 U.S. 357, 360 (1900)).  It has been applied to virtually all
transfers of economic value that are made because of the recipient's
federal service.  This construction was firmly established prior to
the enactment of Section 209(a) and was carried forward in that
provision.

   The language of 18 U.S.C. 1914 (1958) was somewhat unclear with
respect to the type of payments that a federal employee could not
receive.  This ambiguity resulted from the fact that although the
second paragraph of Section 1914, which stated the payor's offense,
applied to any person who "makes any contribution to, or in any way
supplements the salary of," a government official, the first
paragraph, which stated the payee's offense, applied to any government
official who "receives any salary in connection with his services."
Because the first paragraph applied only to the receipt of "salary,"
it might have been argued that a federal employee would not violate
the law if he received items of monetary value that were not in the
form of "salary" in the narrow sense.  See Davis, 54 Colum. L. Rev. at
904 n.56.  Nonetheless, in 1956, the Comptroller General had construed
the first paragraph of Section 1914 to bar a federal employee from
accepting tuition, travel, and living expenses for a training program
he attended in his official capacity.  36 Comp. Gen. 156 (1956).  The
Comptroller General also had construed the second paragraph of Section
1914 to bar a broad range of payments to a federal employee, such as
travel and living expenses and special allowances to compensate for
the higher cost of living in his place of employment.  /18/ See N.Y.
Bar Report 64 ("salary" in Section 1914 "has been, and probably will
be, construed to include almost any kind of a transfer of value to the
employee that smacks of compensation").

   In response to the Comptroller General's opinions construing
Section 209(a) to bar outside payment of expenses incident to a
federal employee's participation in a training program, Congress
enacted an exception in the Government Employees Training Act of 1958
permitting such expenses to be paid by private parties, but only in
carefully limited circumstances -- namely, where the payor is a
non-profit organization exempt from taxation under 26 U.S.C.
501(c)(3).  See Section 19, 72 Stat. 336;  H.R. Rep. No. 1951, 85th
Cong., 2d Sess. 6, 12-13 (1958).  Congress did not disturb the general
prohibition in 18 U.S.C. 1914 (1958), as construed by the Comptroller
General, against the private payment of such expenses in all other
circumstances.  Compare Public Employees Retirement System v. Betts,
109 S. Ct. 2854, 2861 (1989).  An identical exception was included in
Section 209 itself when Congress revised the conflict-of-interest laws
in 1962, thereby reaffirming that any payment of expenses incurred by
a federal employee incident to his employment is barred, even if it
does not take the form of a periodic "salary." 18 U.S.C. 209(d);  5
U.S.C. 4111(a).

   Moreover, when Congress enacted Section 209(a) in 1962, it revised
the language of both paragraphs of the former Section 1914 in order
expressly to prohibit the receipt as well as the payment not only of
"salary," but also any "supplementation of" or "contribution to"
salary.  This change was based on a recommendation in the Staff Report
(at 62), which explained that it would make "clear that the receipt of
lump-sum payments, which supplement salary although they may not
themselves constitute salary, are also forbidden." Id. at 61;  see
also House Report 13, 24;  1960 Hearings 182, 207.  Thus, Section
209(a) carried forward the broad scope of the prior Section 1914 with
respect to the types of cash payments and other transfers of value
that are barred.  Manning, at 162-163;  /19/ Perkins, 76 Harv. L. Rev.
at 1138-1139, 1141 & n.93.  Compare Merrill Lynch, Pierce, Fenner &
Smith v. Curran, 456 U.S. 353, 379-382 (1982);  Lorillard v. Pons, 434
U.S. 575, 580-581 (1978).

   c. The foregoing interpretation is confirmed by subsequent events
with respect to one of the components of the severance payments at
issue in this case -- moving expenses.  In 1979, Congress amended
Section 209 to permit a private employer to pay relocation expenses in
only one narrow situation:  where the recipient is a participant in a
special interchange or fellowship program established by statute or
Executive Order that offers appointments for a period of not to exceed
one year.  See 18 U.S.C. 209(e), as amended by Pub. L. No. 96-174, 93
Stat. 1288.  The legislative history shows that this amendment was
enacted in response to an opinion of the Office of Legal Counsel that
payment of an individual's moving expenses because he is entering
federal service violates Section 209(a).  H.R. Rep. No. 674, 96th
Cong., 1st Sess. 2, 5, 6, 8 (1979);  see 2 Op. O.L.C. 267 (1978) (App.
, infra, 3a-8a).  /20/ In carving out the special exception in 18
U.S.C. 209(e), Congress left undisturbed the general prohibition in
Section 209(a), as construed by OLC, against reimbursement of the
moving expenses of a person entering government service.  See 5 Op.
O.L.C. 150, 150-151 (1981) (App., infra, 9a-11a) (payment of moving
expenses violates Section 209(a) if made because of recipient's
federal service, rather than past service to payor).  Compare Betts,
109 S. Ct. at 2861.  It therefore is especially clear that the portion
of each payment here that is attributable to the recipient's expenses
in moving to Washington, D.C., violated Section 209(a).

   Furthermore, the legislative history of the 1979 amendment makes
clear that, even in the special context of a short-term Presidential
interchange program, the exception permitting payment of relocation
expenses does not overcome the general prohibition Congress perceived
in Section 209(a) against private payment of a federal employee's
"personal living expenses" (H.R. Rep. No. 674, at 2-3).  This
legislative history confirms that the payments here also violated
Section 209(a) to the extent they were designed to reimburse the
recipients for a portion of their personal living expenses --
specifically, the portion that compensated for the higher cost of
living in Washington, D.C.  In sum, all of the principal components of
the severance payments at issue in this case were illegal
"supplementations" of the recipients' federal salaries.  /21/

   2. Section 209(a) Does Not Exempt Supplementations Of Salary Made
Prior To The Commencement Of Federal Service

   In light of the text and legislative history of Section 209(a),
petitioners do not seriously dispute that the various types of
payments just discussed are prohibited as a general matter.  The
individual petitioners do argue (Br. 18-32), however, that Section
209(a) can be avoided simply by combining those payments,
characterizing the total as a "severance payment," and arranging for
it to be made before the recipient begins his federal employment.  See
also Boeing Br. 19 n.9.  The text, legislative history, and purposes
of Section 209(a) foreclose this effort to circumvent the absolute
statutory bar against the private supplementation of federal salaries.

   a. Section 209(a) 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, whether an individual, partnership, association,
      corporation, or other organization pays, or 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 fined not more than $5,000 or imprisoned not more
      than one year, or both.

   This statutory language is written in all-embracing terms.  The
first paragraph broadly applies to "(w)hoever" receives such payments;
 it is not limited to persons who happen to be federal officials at
the time the payments are made.  Accordingly, payments received by an
individual before or after his federal service are within the
statutory ban.  Moreover, the first paragraph applies to the receipt
of "any" supplementation of salary from "any" source other than the
United States.  The term "any" underscores the comprehensive thrust of
the prohibition (United States v. Monsanto, 109 S. Ct. 2657, 2663
(1989)), for "Congress could not have chosen broader words to define
(its) scope" (id. at 2662).  See also Betts, 109 S. Ct. at 2864.  The
language of the first paragraph of Section 209(a) therefore clearly
covers lump-sum payments (including those characterized as "severance
payments"), as long as they are "compensation for" the employee's
federal service.  See pages 34-45, infra.

   The individual petitioners argue, however, that the second
paragraph of Section 209(a) does not bar payment of a salary
supplementation prior to the time the recipient assumes his federal
position.  Petitioners rest this argument on the premise that the
second paragraph is limited to payments made "to . . . any such
officer or employee." See Br. 19, 20, 23.  This assertion is refuted
by the operative language of the second paragraph taken as a whole,
which petitioners "regrettably submerge() in ellipsis" (Bowen v.
Georgetown Univ. Hosp., 109 S. Ct. 468, 476 (1988) (Scalia, J.,
concurring)).  The second paragraph of Section 209(a) imposes
liability on any person who "pays, or makes any contribution to, or in
any way supplements the salary of, any such officer or employee." The
use of the disjunctive "or" in two places, and the location of the
commas, demonstrates that the quoted language states three separate
prohibitions.  The third prohibition, which applies here, imposes
liability on a person who "in any way supplements the salary of" "any
such officer of employee." This language is not limited to
supplementations paid "to" the recipient at the time he is an officer
or employee;  all the statutory text requires is that the payment
"supplement() the salary of" a federal officer or employee -- a
consequence that can result from a payment made prior to the formal
onset of federal service as well as after.  It also is significant
that the relevant language broadly refers to all payments that "in any
way" supplement the salary of a federal employee, thereby manifesting
a congressional purpose to preclude the sort of circumvention that
would be encouraged by petitioners' proposed loophole for all
pre-appointment payments.

   b. The background and legislative history of the 1962 Act confirm
this straightforward reading of the statute in several ways.  First,
as we have explained (see pages 21, 22, supra), Congress revised the
first paragraph of the prohibition to make clear that it (like the
second paragraph) would apply to "lump sum" payments that supplement
the recipient's federal salary (Staff Report 61) -- the most obvious
of which would be lump-sum severance payments made in consideration of
the recipient's federal service.  Second, one of Congress's purposes
in thus revising the first paragraph was to "conform" the prohibitions
applicable to the payor and payee.  House Report 24;  Staff Report 45,
61.  This purpose strongly suggests that the second paragraph bars the
making of all payments the receipt of which is barred by the first
paragraph;  since the first paragraph clearly applies to payments made
prior to formal commencement of federal service, the second paragraph
therefore does as well.

   Third, and of particular significance here, the first paragraph of
the prohibition against outside compensation, as set forth in 18
U.S.C. 1914 (1958), provided:  "Whoever, being a Government official
or employee, receives any salary in connection with his services as
such an official or employee" (emphasis added).  The individual
petitioners argue (Br. 20-21) that the emphasized language limited the
application of Section 1914 to payments made to incumbent federal
officials.  Even if that proposition is correct, however, petitioners'
effort to use it to exempt the "severance" payments at issue here from
the coverage of Section 209(a) is doomed by the fact that Congress
deleted that phrase when it revised the prohibition in 1962.

   Petitioners argue (Br. 20-22) that the Court should not give effect
to Congress's deletion of the phrase on which they rely because the
legislative history does not expressly refer to payments made prior to
the commencement of federal service and does not state that the
coverage of the prohibition was changed in this respect.  As this
Court recently held, however, there is no requirement that Congress
recite in legislative history its intention to depart from what may
have been the previous rule in order for the courts to give effect to
its new enactment.  United States v. Ron Pair Enterprises, Inc., 109
S. Ct. 1026 (1989);  see also Monsanto, 109 S. Ct. at 2662-2663;
Jefferson County Pharmaceutical Ass'n v. Abbott Laboratories, 460 U.S.
150, 159 n.18 (1983).

   Indeed, the premise of petitioners' argument -- that former Section
1914 would not have barred the payments here -- is of dubious
validity.  Roswell Perkins observed that prior to enactment of Section
209(a), "(t)he Justice Department's attitude toward severance payments
ha(d) been stern." 76 Harv. L. Rev. at 1138-1139.  He relied on a
Justice Department memorandum stating with respect to Section 1914
that "'a special severance payment of more than nominal amount made to
an employee in anticipation of his working for the Government, and
whether paid at once or spread, would in all likelihood be
objectionable.'" /22/ Several commentators cited in the legislative
history of the 1962 Act also understood Section 1914 to bar severance
payments made in consideration of the recipient's anticipated services
to the federal government.  /23/ See also 1962 Hearing 40 (statement
of Rep. Lindsay).

   Moreover, the report on the bill proposed by the New York City Bar
Association recognized that "occasionally an outside source may try to
make a payment to a government employee before he becomes an employee
or after he terminates his government employment, with the intention
and purpose of compensating the employee for the work done while in
Washington." N.Y. Bar Report 213.  The report then stated that
although Section 1914 was ambiguous on this point (id. at 64-65,
212-213), the Association's bill explicitly barred such payments
"(w)henever received" (id. at 213).  See id. at 286-287 (Section 5(b)
of Association's proposed bill);  1961 Hearings 47 (Justice Department
comments on Section 5(b)).

   Against this background, whatever uncertainty there may have been
regarding the validity of pre-employment payments under the former
Section 1914, Congress's omission of the phrase "being a Government
official or employee" from the first paragraph of Section 209(a)
removed any limitation on its reach in this regard.  /24/ This
conclusion is reinforced by Congress's deletion of a similar phrase
("being * * * (an) officer or employee of the United States") from the
related prohibition in 18 U.S.C. 281 (1958) when it revised and
reenacted that provision as 18 U.S.C. 203 in 1962.  Section 281, like
the present Section 203, barred a person from receiving compensation
for services rendered on behalf of a private party before a government
agency while the recipient was a government employee.  The House
Report explained the deletion of the phrase just quoted by observing
that although "Section 281 fails to prohibit preemployment receipt or
agreement to receive, or postemployment receipt of, compensation with
respect to services to be rendered or actually rendered during the
period of Government employment," the new Section 203 "would correct
this omission." House Report 20;  see also Staff Report 8, 22, 25, 49,
51.

   The legislative history thus shows that Congress was aware, and
specifically intended, that deletion of the phrase "being * * * (an)
officer or employee of the United States" from the prohibition in 18
U.S.C. 281 (1958) would have the effect of prohibiting receipt of "all
compensation" for services rendered on behalf of private parties while
in office, "irrespective of the time of its payment." House Report 9.
Congress therefore must also have been aware that its deletion of the
parallel phrase "being a Government official or employee" in 18 U.S.C.
1914 (1958) would remove any doubt that the new Section 209(a)
prohibits the receipt of all compensation for services to be rendered
on behalf of the United States while in office, irrespective of the
time of payment.  Sections 281 and 1914 were viewed as interrelated,
and they overlapped in coverage where the services for which the
private party paid compensation could be said to have been performed
for both the government and the private party.  Staff Report 24, 61.
See, e.g., 40 Op. A.G. 168 (1942);  31 Op. A.G. 470 (1919);  2 Comp.
Gen. 775 (1923);  see also 41 Op. A.G. 217, 220 (1955);  40 Op. A.G.
187, 190 (1942).  /25/

   It also is significant that the prohibition against receipt of
outside compensation for government services has consistently been
regarded as closely related to the prohibition against bribery (House
Report 6, quoting Muschany, 324 U.S. at 68) and "buttresses the
bribery sections * * * by eliminating donations to salary, even where
it is impossible to prove intent that official action should be
influenced by the payment." Staff Report 45;  see also id. at 61;
N.Y. Bar Report 211.  As petitioners concede (Individ. Br. 23), the
bribery statute, 18 U.S.C. 201, expressly applies to payments made
prior to the formal commencement of federal service, because it covers
payments made (with intent to influence official action) to a "person
who has been selected to be a public official." /26/

   c. Accordingly, the text and legislative history of Section 209(a)
establish that "(t)he time of receipt of the outside compensation is
clearly irrelevant under the (1962) act, if the compensation is for
government services." Perkins, 76 Harv. L. Rev. at 1137.  Petitioners
suggest (Individ. Br. 18) that the Department of Justice only recently
came to that view, because this is the first time it has brought a
civil or criminal case against anyone for receiving a severance
payment.  However, for more than 15 years, the Office of Legal Counsel
has consistently taken the position in its advice to other agencies
and prospective appointees that Section 209(a) bars "severance"
payments made in consideration of the recipient's entering federal
service, rather than for past services to the payor, and calculated to
compensate the recipient for his lower federal salary and benefits and
other expenses incident to his acceptance of the appointment.  See
App., infra, 3a-50a.  /27/ The Office of Government Ethics, which has
statutory authority to render advisory opinions on ethics matters (5
U.S.C. App. 402(b)(8)), has also made clear that a severance payment
is lawful only if the recipient is being compensated for past services
to the company, not future services for the government, and if persons
entering federal service are not singled out for special treatment.
See Ops. O.G.E. 81 X 16 (1981), 85 X 11 (1985) (App., infra, 51a-55a).
 /28/

   d. Nor are petitioners correct in contending that the purpose of
Section 209(a) -- to assure the independence and undivided loyalty of
federal officials -- does not support its application to lump-sum
"severance" payments made prior to formal commencement of federal
service.  As in the case of a bribe, Congress obviously concluded that
an advance payment can be presumed to have a lingering effect on the
recipient when he performs his official duties.  Furthermore, the
compelling interest in preserving public confidence in the integrity
of government officials would be undermined if the parties could so
easily circumvent the statutory prohibition against private
supplementations of salary.  /29/

   Petitioners also argue (Individ. Br. 25-28) that Section 209(a)
should be construed not to apply here in order to facilitate
government recruitment of qualified personnel.  Congress, however,
carefully weighed the competing needs for qualified personnel and to
assure integrity, and it struck what it believed to be the appropriate
balance.  It chose not to carve out a blanket exception for all
"severance" payments, including those made as compensation for the
recipient's federal service.  The absence of such an exception is
especially significant in view of other express exceptions Congress
included in Section 209.  /30/ Most importantly, at the urging of the
New York City Bar Association (N.Y. Bar Report 217-218), Congress
sought to mitigate financial hardship by allowing persons entering the
government to continue to participate in "bona fide" employee welfare
or benefit plans maintained by their former employers.  18 U.S.C.
209(b).  But Congress made no further exception permitting
supplementations of federal salaries by lump-sum "severance" payments
from former employers that are not based on benefit plans of general
applicability.  Moreover, recognizing that a particular need for
highly qualified personnel for defense purposes might warrant
exemption from the prohibition against outside compensation, Congress
enacted special authority for the President to grant exemptions in
certain circumstances.  See 50 U.S.C. App. 2160(b)(4).  /31/ This
narrow provision further contradicts petitioners' efforts to fashion a
broad exemption for defense (and other) personnel who do not qualify
under it.

   Nor are the individual petitioners persuasive in relying (Br.
28-32) on common-law principles of agency.  The short answer is that
Congress did not incorporate common-law principles in Section 209.  In
any event, Section 209 does not impose an all-inclusive duty of
undivided loyalty on a person who has not yet begun federal
employment.  He is free, for example, to work for a private employer
whose interests directly conflict with those of the United States.
Section 209 imposes a duty on him only with respect to his prospective
federal employment, by barring the receipt of private compensation for
that employment.  This limited prohibition is directly related to (and
serves to maintain the integrity of) the prospective federal
employment (cf. United States v. Hood, 343 U.S. 148, 150-151 (1952)),
and it affects only payments that would not have been made but for
that employment.  Even the common law imposes some fiduciary duties on
a person who has not yet become an agent.  For example, "(a) person
who, in view of a prospective agency, invites a confidence from or
permits the prospective principal to reveal confidential information
to him, is subject to the same duties with respect to such information
as if, at the time the confidence was given, he were in fact an
agent." Restatement (Second) of the Law of Agency Section 395, comment
d (1958).  The comparably limited duty of loyalty to the prospective
employer under Section 209 scarcely "stretch(es) beyond recognition
the fundamental principles of agency law," as petitioners argue
(Individ. Br. 28).

   3. The Payments Constituted "Compensation For" The Recipients'
Federal Service Within The Meaning of Section 209(a)

   Petitioners' contention (Individ. Br. 43-49;  Boeing Br. 17-26)
that the payments were not made as "compensation for" the recipients'
federal services is premised on an erroneous legal view of Section
209(a) and ignores the overwhelming evidence that the statute was
violated.

   a. Section 209(a) refers to supplementations of salary made "as
compensation for" the recipient's services to the United States in
order to identify the payments to be barred.  Absent some such
limitation, any cash payment or other transfer of economic value to a
federal employee might fall within the reach of the statute, because
it would "supplement" the recipient's federal salary in the sense of
being available for him to spend during the period of his federal
service.  Such a rule could forbid a federal employee from receiving
gifts from family members or friends, income from investments, or
salary earned in an outside job.  That result would not only be unfair
to federal employees and inhibit recruitment (see Manning, at 164), it
would also extend far beyond the statutory purpose of assuring the
independence and undivided loyalty of federal employees in performing
their duties.  Accordingly, Section 209(a) prevents only those private
supplementations of salary that are "directly linked" to the
recipient's federal employment (Manning, at 171).  As we shall now
show, the history of Section 209 establishes that the role of the "as
compensation for" language is to interpose that limiting principle.
Contrary to the apparent view of petitioners and the district court
(Pet. App. 20a), that phrase does not have the further effect of
rendering Section 209 one of those rare criminal statutes requiring
proof of specific intent.

   b. The former Section 1914 used different language of limitation,
but its purpose was the same.  Section 1914 made it unlawful for a
government official to receive any salary "in connection with" his
services to the government.  The Attorney General interpreted this
language in a 1942 opinion (40 Op. A.G. at 190):

         The statute clearly covers a salary received from a private
      person or source if it is paid or received as compensation or
      part compensation for the services rendered to the Government.
      It has also been held to apply if the officer or employee
      renders the same or similar services to both the Government and
      a private person (33 Op. A.G. 273 (1922)).  It does not,
      however, prohibit payment for services rendered exclusively to
      private persons or organizations and which have no connection
      with the services rendered to the Government.

   See also 42 Op. A.G. 111, 126 (1962);  Manning, at 166-168.

   The "in connection with" language was, however, imprecise and
capable of unduly broad interpretation.  N.Y. Bar Report 212-213.  For
example, it seemed to encompass payments for services performed
outside the scope of the recipient's government employment but related
to its subject matter, such as compensation received by a government
tax auditor who, on his own time, helped a third party with his taxes.
 See United States v. Gerdel, 103 F. Supp. 635, 638-639 (E.D. Mo.
1952).  As the New York City Bar Association pointed out:  "Clearly an
outside source may not, consistently with Section 1914, pay the
government official 'to' take the government job or 'for' his
government work.  But may a former employer make any payment to the
employee that will not raise the inference that it was made 'in
connection with' his governmental duties?" N.Y. Bar Report 65
(emphasis in original).  At the same time, the prohibition was
"peculiarly susceptible of evasion," because the basis for a payment
might not be objectively ascertainable (Staff Report 44) and because
almost any payment could be characterized as being "in connection
with" past services rather than government employment (N.Y. Bar Report
65-66).

   After canvassing the Attorney General opinions construing Section
1914, the House Judiciary Committee's Staff Report concluded in 1958
that "(s)alary payments avowedly designed to supplement Government
salary or as donations to the Government have been held unlawful." Id.
at 44, citing 31 Op. A.G. 470 (1919);  33 Op. A.G. 273 (1922);  40 Op.
A.G. 265 (1943).  /32/ By contrast, "payments in connection with leave
with pay from the faculty of a privately endowed engineering school
were held to have been made, not in consideration of the performance
of Government services in the period of leave, but in consideration of
past service to the private employer." Staff Report 44, citing 39 Op.
A.G. 501 (1940).

   In an "effort to provide for a clearer and more predictable
standard linking the payments and the employee's job" (N.Y. Bar Report
212), the New York City Bar Association recommended two changes in the
prohibition then contained in Section 1914.  First, it recommended an
exception, ultimately enacted in 18 U.S.C. 209(b), permitting a
federal official to continue to participate in an employee welfare or
benefit plan maintained by a former employer, provided that the plan
is "bona fide." This exception categorically resolved uncertainties
under prior law in applying the "in connection with" standard to
benefits received under such plans.  Moreover, the requirement under
Section 209(b) that the payments be made pursuant to a pre-existing
plan in which the departing employee is already participating served
to minimize the possibility that persons entering federal employment
might be singled out for favorable treatment.  N.Y. Bar Report 65,
217-218;  Perkins, 76 Harv. L. Rev. at 1139-1140;  Manning, at 171;
1960 Hearings 821;  1961 Hearings 62;  1962 Hearing 22, 46-47.

   Second, the Bar Association recommended that the "in connection
with" language in Section 1914 be replaced with language barring
payments "for or in consideration of" federal government service.
N.Y. Bar Report 286.  The Justice Department recommended the same
change, in order "to emphasize the intent that the prohibition is
against private payment made expressly for services rendered to the
Government." 1961 Hearings 42.  Congress accepted these
recommendations, but used different language to achieve the same
result.  Section 209(a), as reported by the House Judiciary Committee
and finally enacted, bars supplementations of salary "as compensation
for" the recipient's services to the government;  but, echoing the
Justice Department's explanation of the phrase "in consideration of,"
the House Report stated (at 24-25) that the change emphasized that
"the prohibition is against private payment made expressly for
services rendered to the Government."

   At bottom, Congress's substitution of the phrase "as compensation
for" did not change the scope of the prohibition in the former Section
1914;  instead, as the Senate Report explained (at 14), it
"reenact(ed) (that) prohibition in substance," albeit using language
that "is more precise in expressing what is clearly intended by the
present broad phrase." That also was the considered judgment of the
Attorney General, who opined immediately after Section 209 was enacted
that it "does not vary from (Section 1914) in substance." 1963
Memorandum, 18 U.S.C. 201 note;  accord, Perkins, 76 Harv. L. Rev. at
1138 & n.87.  Section 209 therefore should be understood to have
codified the Attorney General's interpretations of former Section
1914, under which payments that are "avowedly designed to supplement
Government salary" are barred.  Staff Report 44.  And by making clear
that the requisite "connection" between the payment and the public
employment is that the former is made "as compensation for" the
latter, the revised language establishes that the prohibition includes
all arrangements where the anticipated public employment is the
consideration for the payment in the classic contract sense.
Similarly, the fact that the legislative history equates "as
compensation for" with "in consideration of" indicates that Section
209 is also implicated where public employment is the "but for" cause
of the payment.

   c. Several important principles informing the interpretation of
Section 209 emerge from the derivation of the phrase "as compensation
for" -- principles establishing that the payments here violated the
statute.  Of course, the usual severance payment -- made solely on the
basis of past services rendered to the employer, without reference to
the anticipated future status or activities of the departing employee
-- is lawful under Section 209.  Perkins, 76 Harv. L. Rev. at
1138-1139.  But here, the payments were "directly linked" to the
anticipated federal employment of the recipients (Manning, at 171),
not their past services to Boeing.  Section 209(a) does not permit
such an arrangement.

   i. Although the payments here were labeled "severance payments,"
they had little to do with the recipients' services to Boeing.
Instead, as the calculations made by both Boeing and the recipients
show, the payments were "avowedly designed to supplement Government
salary" (Staff Report 44).  Such a payment is by its nature
"compensation for" the recipient's services to the federal government,
and the requisite connection between the payment and those services is
established as a matter of law.  Indeed, a major element of
petitioners' calculations was the difference between th individual's
federal salary and benefits and the higher salary and benefits he
would have been paid by Boeing.  Such differentials are unquestionably
"supplementations of salary" within the meaning of Section 209(a).  It
also is firmly established that moving expenses and cost-of-living
allowances paid solely because of the recipient's federal service are
prohibited "supplementations of salary" for purposes of Section
209(a).  See pages 20-23, supra.  Because the payments at issue here
were avowedly designed for these purposes, they were, by definition,
"compensation for" the recipient's services as a federal official.
/33/

   ii. Boeing did not have an established policy of general
applicability that rewarded past services to the Company by providing
severance payments to all employees leaving to take any of a broad
range of jobs.  The uncontradicted evidence, accepted by both courts
below (Pet. App. 8a, 17a-18a), showed that over a 20-year period,
Boeing consistently made such payments only to persons who were to
assume positions of responsibility with the federal government.
Singling out persons entering federal service for special treatment --
and making payments to them only because of their federal service --
is a sufficient basis for finding the payments to be unlawful.  2 Op.
O.L.C. 267, 268 (1978);  5 Op. O.L.C. 150, 151 (1981);  Op. O.G.E. 81
X 16 (1981) (App., infra, 51a-52a);  45 Comp. Gen. 308, 312 (1965).
/34/ Indeed, Boeing did not have a uniform policy of making
"severance" payments even to all persons who left to work for the
federal government.  Instead, Boeing decided on a case-by-case basis
whether the particular position warranted a payment and what its
amount should be.  J.A. 280-283.

   The statutory relevance of the payor's singling out federal
employees and retaining discretion is shown by the exception in
Section 209(b) permitting continued participation in a bona fide
pension, retirement or other benefit plan.  That exception's
requirement that the plan be one of general applicability in which the
departing employee is already enrolled serves to guard against favored
treatment for federal employees as a class and against discretionary
payments that have an inherent propensity to be made and accepted as
special rewards to individual federal officials.  See page 36, supra.

   iii. Also significant is whether the payor has an interest in the
recipient's governmental duties or a sensitive relationship with his
employing agency.  See 41 Op. A.G. 217, 221 (1955);  31 Op. A.G. 470
(1919);  45 Comp. Gen. 308, 312 (1965);  Staff Report 44-45;  Manning,
at 164-165;  McElwain & Vorenberg, 65 Harv. L. Rev. at 967;  Davis, 54
Colum. L. Rev. at 904-905;  Dembling & Forrest, 20 Geo. Wash. L. Rev.
at 191-192.  Although Section 209(a) applies to all payors who make a
prohibited payment, even those who are unaffected by the agency's
work, the existence of a sensitive relationship between the payor and
the agency creates a distinct likelihood that the recipient's federal
services are (or would be perceived to be) consideration for the
payment, and it triggers the concern about divided loyalty (or the
appearance thereof) that gave rise to enactment of the prophylactic
prohibition against outside compensation.

   This factor has particular relevance here.  Boeing is a large
defense contractor, and it therefore has a significant interest in the
affairs of the Defense Department generally.  Furthermore, although
the individual petitioners did not have procurement or contracting
responsibilities in the Defense Department, they were involved in
crucial areas of research and development and long-range defense
planning that were of obvious interest to Boeing because of their
impact on future weapons policies and systems.  The record
demonstrates that those considerations in fact played a role in
Boeing's decision to subsidize the government positions at issue here.
 The President of Boeing Aerospace stated in recommending the payment
to Crandon that Crandon would "be an asset to Boeing in the NATO
arena" (J.A. 284).  A Boeing document supporting the payment to Kitson
stated that his "job with the DOD is viewed as bigger than Crandon's
-- & has greater influence relative to (Boeing Aerospace)" (J.A.
Lodging No. 18).  The President of Boeing Aerospace recommended
Reynold's payment because he would "hold a key job" (J.A. Lodging No.
17).  And he recommended Jones' payment because, inter alia, "having
someone with his views will be helpful to us while he is in
Washington" (J.A. 277).

   iv. Finally, the district court found that the payments were made
to encourage Boeing employees to accept government positions (Pet.
App. 17a);  the court of appeals agreed, noting that "Boeing's stated
purpose in making the payments was to encourage public service by
lessening the financial penalties involved in accepting government
employment" (id. at 8a);  and petitioners concede in this Court that
the purpose of the payments was "to encourage public service by
decreasing the financial penalties incurred by employees who left the
employ of Boeing to enter public service" (Boeing Pet. 5;  see also
Boeing Br. 24;  Individ. Br. 25-26).  Because Boeing effectively paid
the individual petitioners to accept their positions in the Department
of Defense, those payments were, under Section 209(a), "compensation
for" the services that they would perform in those positions:
"Clearly an outside source may not, consistently with Section 1914,
pay the government official 'to' take the government job" (N.Y. Bar
Report 65).

   In sum, on the basis of the undisputed evidence and the district
court's factual findings, all of the factors that render a payment a
prohibited "supplementation of salary" as "compensation for" the
recipient's government services within the meaning of Section 209(a)
are present in this case.  Contrary to the individual petitioners'
contention (Br. 18), this is not a novel application of the statute.
This result and supporting analysis are fully consistent with
principles that the Department of Justice has applied for many years
in considering the legality of severance payments (see App., infra,
3a-50a) and that have been widely recognized in the literature.

   d. Petitioners nevertheless seek to avoid liability by arguing that
they did not "intend" to make and receive the payments as
supplementations of federal salaries or as compensation for the
recipients' government services.  In petitioners' view, the phrase "as
compensation for" in Section 209(a) requires a showing of "specific
intent" -- a showing that the payment were made and received for the
purpose of compensating the recipients for their federal service.  We
disagree.  As we have explained, the phrase "as compensation for" is
designed to identify the nexus that must exist between the payment and
the federal services, not to state an elevated standard of mens rea.
The quoted phrase does not use language of intent, and Section 209(a)
as a whole is silent on that question.  We do not suggest that Section
209(a) thereby prescribes no element of intent.  Cf. Liparota v.
United States, 471 U.S. 419, 425 (1985).  But, in light of the silence
in the statutory text, Section 209(a) should not be interpreted as one
of those rare criminal statutes that requires a showing that the
defendant acted with the purpose -- the "conscious object" -- of
producing the particular effect that the statute proscribes.  United
States v. Bailey, 444 U.S. 394, 404 (1980).  In accordance with
ordinary rules of construction, it is sufficient to prove that the
defendant acted with knowledge of the probable consequences of his
actions.  Compare Bailey, 444 U.S. at 402-409;  United States v.
United States Gypsum Co., 438 U.S. 422, 438-446 (1978).  Such a rule
comports with the purpose of Section 209 of preventing not only actual
corruption, for which a showing of specific intent might be required
(see 18 U.S.C. 201), but also real or apparent conflicts of interest
that undermine public faith in the integrity of government.  See
Mississippi Valley, 364 U.S. at 560-561.  Accordingly, criminal
liability is established under Section 209 upon proof that the
defendant knowingly made or received payments having the
characteristics that render them "supplementations of salary" and
"compensation for" services performed as a federal official within the
meaning of Section 209(a).  See Muntain, 610 F.2d at 969.  A fortiori,
a showing of specific intent is not required in a civil case, in which
a party ordinarily is presumed to have intended the natural
consequences of his acts.  Clarion Bank v. Jones, 88 U.S. (21 Wall.)
325, 337 (1875).

   As we have explained, under the undisputed evidence and findings in
this case, the payments at issue here were, as a matter of law,
"supplementations of salary" made "as compensation for" federal
services within the meaning of Section 209(a), because they were
specifically designed to augment the recipients' income and mitigate
financial sacrifices associated with federal employment;  the
recipients' anticipated federal employment was the reason for the
payments;  the payments were regarded as inducements to accept the
federal positions;  and Boeing had an interest in those positions.
Regardless of whether each was aware of all the details of the
payments' calculation, there is little doubt that the recipients and
responsible Boeing officials were aware of the essential nature of the
payments that rendered them unlawful under Section 209.  /35/ That is
all that is required to establish liability.

   Hence, petitioners err in relying (Individ. Br. 46;  Boeing Br.
17-18) on the district court's conclusory findings regarding intent
(Pet. App. 20a).  The essential nature of the payments as
supplementations of federal salary and compensation for federal
services under Section 209(a) was established as a matter of law, and
petitioners were aware of the nature of the payments.  It is
irrelevant whether petitioner Boeing "intended" and the individual
petitioners "understood" the payments to be a "supplementation" or
"compensation" in whatever different sense either petitioners or the
district court might have used those terms.  In short, the factual
"finding" on which petitioners rely rested on significant legal errors
regarding the interpretation of Section 209(a) and the elements of a
cause of action under it.  /36/ Appellate review of a factual finding
for possible error in the legal premises on which it rests is not
governed by the "clearly erroneous" test in Fed. R. Civ. P. 52(a).
Icicle Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986).  /37/
For similar reasons, petitioners err in relying (Individ. Br. 47-48;
Boeing Br. 22-23) on the testimony by the recipients and Boeing
officials that might have been the basis for the district court's
finding with respect to their intentions and understandings.

   In any event, the court of appeals found the record overwhelmingly
inconsistent with the witnesses' self-serving testimony and the
district court's conclusory findings on these points.  /38/ This is
not a case where a witness "has told a coherent and facially plausible
story that is not contradicted by extrinsic evidence." Anderson v.
Bessemer City, 470 U.S. 564, 575 (1985).  Rather, as this Court has
stated (ibid.):

         Documents or objective evidence may contradict the witness'
      story;  or the story itself may be so internally inconsistent or
      implausible on its face that a reasonable factfinder would not
      credit it.  Where such factors are present, the court of appeals
      may well find clear error even in a finding purportedly based on
      a credibility determination.

   In this case, the court of appeals was properly "'left with the
definite and firm conviction that a mistake ha(d) been committed.'"
Id. at 573 (citation omitted).

   II. THE UNITED STATES IS ENTITLED TO RECOVER THE AMOUNT OF THE
PAYMENTS IN THIS ACTION

   The court of appeals correctly held that the United States has a
civil cause of action to require the individual petitioners to
disgorge the payments they received in violation of 18 U.S.C. 209 or,
in the alternative, to recover the amount of the payments from Boeing
(to the extent recovery is not time-barred).  Pet. App. 5a-6a, 8a-9a,
10a-11a.  A conflict-of-interest statute such as Section 209 is
"evidence of the precise nature of th(e) fiduciary duty" owed to the
United States (United States v. Kenealy, 646 F.2d 699, 703 (1st Cir.),
cert. denied, 454 U.S. 941 (1981)), and breach of the statutory
standard "will establish, as a matter of law, (the agent's) breach of
fiduciary duty owed the United States." United States v. Podell, 436
F. Supp. 1039, 1042 (S.D.N.Y. 1977), aff'd, 572 F.2d 31 (2d Cir.
1978).  See Mississippi Valley, 364 U.S. at 560-561.  Where an
employee has received payments relating to his official duties in
violation of a fiduciary obligation owed to the United States, he must
account for the proceeds to the United States.  See Snepp v. United
States, 444 U.S. 507, 514 (1980);  United States v. Carter, 217 U.S.
286, 305 (1910);  United States v. Kearns, 595 F.2d 729 (D.C. Cir.
1978);  United States v. Drumm, 329 F.2d 109, 113 (1st Cir. 1964);
Restatement of Restitution Section 197 comment c (1937).  /39/ And
where a third party, such as Boeing, has interfered with an
individual's fiduciary duty to the United States by making an illegal
payment, the United States has a cause of action for damages against
that party -- especially where, as here, the payor's conduct
separately contravenes the standards in a conflict-of-interest
statute.  Continental Management, Inc. v. United States, 527 F.2d 613
(Ct. Cl. 1975).

   Petitioners do not dispute that the United States has a civil cause
of action to recover illegal payments made to its employees.  /40/ But
the individual petitioners argue (Br. 32-43) that "disclosures" of the
payments they claim to have made on their financial-disclosure forms
(SF-278s) excuse them from any duty to account to the United States
for the payments.  This waiver argument was correctly rejected by the
court of appeals.  Pet. App. 9a-10a.  /41/

   Unlike other conflict-of-interest laws, Section 209 includes no
general provision for a waiver.  Compare 18 U.S.C. 207(f), 208(b).
When the revision of the conflict-of-interest laws was before
Congress, the Department of Defense recommended that the proposed
Section 209 include a general provision permitting an agency head to
grant exemptions by written order, but Congress declined to adopt that
proposal.  1960 Hearings, at insert following p. 583.  And although
Congress authorized the President to grant waivers to certain highly
qualified personnel needed for the defense effort (see 50 U.S.C. App.
2160(b)(4)), petitioners have not been granted a waiver under that
provision.

   In light of the absence of any statutory authority for exempting
petitioners from Section 209, petitioners' contention that their
alleged disclosures on their SF-278s exempt them from liability is
flatly inconsistent with Mississippi Valley.  There the Court held
that a government official's alleged knowledge of his subordinate's
conflict of interest did not excuse the subordinate from the
disqualification requirements of 18 U.S.C. 434 (1958).  Noting that
neither Section 434 nor any other statute granted the superior
official the authority to exempt the subordinate, the Court concluded
that it would be contrary to the statutory purposes for the Court to
fashion an exempting power that Congress had withheld.  364 U.S. at
561.  In the Court's view, Congress "recognized that an agent's
superiors may not appreciate the nature of the agent's conflict, or
that the superiors might, in fact, share the agent's conflict of
interest," and the prohibition therefore was "designed to protect the
United States, as a Government, from the mistakes, as well as the
connivance, of its own officers and agents." Ibid.; see also id. at
566;  United States v. Medico Indus., Inc., 784 F.2d 840, 845 (7th
Cir. 1986).  As in Mississippi Valley, it would be contrary to the
purposes of Section 209 for the Court to fashion an exempting
authority that Congress withheld.  That result would permit
petitioners to retain the proceeds of conduct that violated a criminal
statute and would unjustly enrich petitioners by excusing them from
their duty to account to the United States for payments that they
received for their government service and that therefore belong to the
United States.  Cf. Caplin & Drysdale v. United States, 109 S. Ct.
2646, 2652-2655 (1989).

   There is another legal defect in petitioners' reliance on their
SF-278s in claiming an exemption from liability under 18 U.S.C. 209.
The regulations governing the financial disclosure program, which were
issued by the Director of the Office of Government Ethics pursuant to
statutory authority, 5 U.S.C. App. 402(b)(1), expressly provide that
the filing of a financial disclosure report does not exempt a
government official from applicable statutory prohibitions.  5 C.F.R.
734.104(a)(6).  /42/ Accordingly, to exempt the individual petitioners
from liability based on financial disclosure reports filed under the
Ethics in Government Act would be contrary to that Act and
implementing regulations, as well as Section 209 itself.

   In any event, the factual predicate for petitioners' waiver
argument based on the filing of SF-278 forms is wholly lacking,
because none of the SF-278s filed by petitioners mentioned a severance
payment.  Petitioner Crandon did not even file an SF 278 because he
did not occupy a position covered by the filing requirement.
Reynolds' SF-278 listed no income from Boeing (J.A. Lodging No. 24).
Kitson's SF-278 contained two entries for income from Boeing:
$159,530 listed as "salary," and $1100 per month listed as "retire.
pay" (J.A. Lodging No. 25);  his $50,000 "severance" payment was not
separately disclosed, although it might have been included in the
aggregate amount listed as "salary." Paisley's SF-278 listed the
$180,000 he received from Boeing as "compensation for services," not
as a severance payment (J.A. Lodging No. 23).  Jones' SF-278 listed
three items from Boeing:  $68,200 in "salary";  $2,501-$5,000 from the
Boeing "Financial Security Plan";  and a further $200,300, which was
listed under the heading "Other (Specify)," with no accompanying
explanation (J.A. Lodging No. 21).

   Petitioners seek to overcome this defect by arguing (Individ. Br.
36-38) that regulations governing the completion of disclosure forms
did not require them to list the severance payments separately, and
that several of the individual petitioners were so informed by Defense
Department personnel.  That argument misses the point.  Petitioners
have not been penalized for violating the Ethics in Government Act's
disclosure requirements.  This suit was brought to require petitioners
to disgorge illegal payments.  Petitioners contend they do not have to
do so because they disclosed the payments on their SF-278s.  The
simple fact is that those forms do not identify any severance payments
as such.  As a result, the government officials who reviewed those
forms had no occasion to pass on whether those payments were lawful.
For this reason, the certification by the reviewing official on each
form that "(t)he information contained in this report discloses no
conflict of interest under applicable laws and regulations" does not
constitute a considered opinion that the severance payments were
lawful, as petitioners urge.  See Individ. Br. 36.  /43/

   Petitioners rest their waiver argument on common-law principles
that an agent must account to his principal for "secret" payments
received in connection with his employment.  See United States v.
Carter, supra.  The standards that petitioners violated here, however,
are prescribed by an Act of Congress, not the common law.  Section
209(a) prohibits all supplementations of salary as compensation for
federal services, not merely those that are "secret." Although a court
might apply common-law principles in a cause of action by the United
States in the absence of statutory guidance, Congress may displace or
expand upon the common law, and it has done so here.  Compare
Milwaukee v. Illinois, 451 U.S. 304, 313-314 (1981).  In any event,
even under common-law principles, an agent is not excused from
liability in the absence of "full disclosure." As the court of appeals
recognized (Pet. App. 9a), "full disclosure" entails a "complete"
account of all relevant facts to the government official given "clear
actual authority" by statute or regulation to waive the statutory
requirement, and an "official response" from that official explicitly
waiving the conflict.  United States v. Kenealy, 646 F.2d at 705.  Cf.
Johnson v. Zerbst, 304 U.S. 458, 464 (1938) ("intentional
relinquishment of a known right").  Petitioners satisfied none of
those requirements.  In sum, there was no waiver, or basis for waiver,
here.

                              CONCLUSION

   The judgment of the court of appeals should be affirmed.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   STUART E. SCHIFFER

      Acting Assistant Attorney General

   LAWRENCE G. WALLACE

      Deputy Solicitor General

   EDWIN S. KNEEDLER

      Assistant to the Solicitor General

   MICHAEL F. HERTZ

   DOUGLAS LETTER

   JOAN E. HARTMAN

      Attorneys

   AUGUST 1989

   /1/ "Pet. App." refers to the appendix to the certiorari petition
in No. 88-938.

   /2/ Melvyn R. Paisley.  On or about May 1981, petitioner Paisley
was offered and agreed to accept the position of Assistant Secretary
of the Navy for Research, Engineering and Systems.  Boeing Exh. (BX)
50 (C.A. App. 253);  J.A. 239-240.  In July 1981, Paisley was retained
as a consultant in the Department of Defense.  DX 58, 67;  J.A.
238-239.  On September 30, 1981, Paisley accepted a $183,000 payment
from Boeing.  BX 50 (C.A. App. 255).  After Senate confirmation,
Paisley took the oath of office on December 2, 1981.  DX 59 (C.A. App.
101);  J.A. 236, 239.

   Lawrence Crandon.  In 1981, petitioner Crandon agreed to Boeing's
submission of his name to be a United States member of the NATO Air
Command and Control Systems team.  BX 50 (C.A. App. 291).  On November
25, 1981, Crandon was notified that he had been selected, subject to
security clearances and physical examinations.  Crandon Exh. 4 (C.A.
App. 115);  J.A. 239.  He accepted a $40,000 payment from Boeing on
March 5, 1982, and commenced service three days later.  BX 50 (C.A.
App. 295, 299).

   Thomas K. Jones.  Petitioner Jones was urged by Defense Department
officials in early 1981 to consider accepting the position of Deputy
Under Secretary of Defense, and he notified them in March 1981 that he
was willing to do so.  BX 50 (C.A. App. 240).  Jones accepted a
payment of $132,000 from Boeing on May 15, 1981 (C.A. App. 243), and
he was appointed on June 1, 1981, to the position of Deputy Under
Secretary of Defense, Strategic & Space Systems.  DX 19 (C.A. 99);
J.A. 236, 237, 239.

   Herbert K. Reynolds.  In May 1981, petitioner Reynolds was asked by
the Under Secretary of Defense to consider accepting the position of
Deputy Director of Space and Intelligence Policy in the Office of the
Under Secretary of Defense.  On June 1, 1981, he notified Department
officials that he was willing to do so.  Reynolds accepted a payment
of $80,000 from Boeing by check dated July 22, 1981.  BX 50 (C.A. App.
267, 270).  Four days later, on July 26, 1981, Reynolds was appointed
as a consultant to the Department of Defense (DX 115 (C.A. App. 143);
J.A. 236, 238), and he was formally appointed by the President in
October 1981.  BX 50 (C.A. App. 267).

   Harold Kitson, Jr.  In March 1982, petitioner Kitson was asked by
the then-Assistant Secretary of the Navy, petitioner Paisley, if he
was interested in the position of Deputy Assistant Secretary of the
Navy for Command, Control, Communications and Intelligence.  In April
or May of that year, Kitson requested that his name be submitted.  GX
127, at 19-22 (C.A. App. 898-899);  J.A. 188.  On July 6, 1982, Kitson
was appointed as a consultant in the Department of the Navy, pending
his formal appointment to office.  DX 135 (C.A. App. 108);  J.A.
238-239.  On July 27, 1982, Kitson accepted a $50,000 payment from
Boeing.  BX 50 (C.A. App. 282).  On September 1, 1982, he was
appointed Deputy Assistant Secretary.  DX 143 (J.A. Lodging No. 25).

   /3/ A document signed by the Executive Vice President of Boeing
Aerospace Company stated that the payment to petitioner Jones was
"conditional on" Jones' "acceptance of the job" (J.A. Lodging No. 14).
 An internal Boeing document expressed doubts that the Senate would
give its consent to Paisley's appointment and suggested that a "memo
of understanding" be executed to cover a situation in which Paisley
would take the payment but then retire rather than go into government
service (J.A. Lodging No. 16).  Similarly, a Senior Vice President of
Boeing recommended a payment to Paisley only "if Paisley ends up as a
govt official or as consultant" (J.A. Lodging No. 15).

   /4/ The positions were:  Office of Director of Defense Research &
Engineering (1962);  Director of Advance Systems Studies, NASA (1963);
 Scientific Advisor, DCS/Research & Development, U.S. Air Force
(1966);  Deputy Associate Administrator for Engineering, Office of
Space, Sciences & Applications, NASA (1967);  Assistant Director,
Strategic Systems, Office of the Director of Defense Research &
Engineering (1968);  Staff Leader of Aeronautical Research, National
Aeronautics & Space Council, Office of the President (1970);
Technical Assistant, Strategic & Space System Department, Research &
Engineering, Department of Defense (DoD) (1971);  Director of Army
Aviation Research Laboratories, Lewis Directorate, U.S. Army (1971);
Technical Director, Naval Air Development Center (1972);  Aeronautical
& Space Science Committee, U.S. Senate (1973);  Assistant Secretary of
Commerce for Science & Technology (1973);  Air Force Systems Command,
DoD (1973);  Assistant Secretary of the Air Force (1973);  Staff
Specialist, DoD SALT Task Force (1975);  Deputy Director, Office of
Director of Defense Research & Engineering (1975);  Director, Cruise
Missile Program, DoD (1978) (moved aborted).  J.A. Lodging No. 20.

   /5/ Petitioner Paisley's calculation was based on the assumption
that he would terminate his employment with Boeing.  Ultimately,
however, Paisley retired, and like retiring employees generally, he
received the nonvested portion of the Company's contributions to the
investment plan.  J.A. 418-419.

   /6/ Petitioners Kitson and Crandon received payments in 1982, after
Boeing charged the payments to Paisley, Jones and Reynolds to the
government as "overhead" expenses on Boeing's defense contracts and
the Defense Contract Audit Agency questioned the legality of those
charges.  For Crandon and Kitson, the Industrial Relations Department
calculated the proposed payment under both the four-factor approach
and an alternative approach, which multiplied 5% of the individual's
years of service with Boeing (1) by his current salary, and then (2)
by a fraction consisting of the number of years the employee expected
to remain in the government over four.  See J.A. 282-283.  The most
significant factor in the alternative calculation was the number of
years that the employee expected to remain in the government.  The
four-factor approach for Kitson yielded a figure of $59,310, and the
alternative approach yielded a figure of $34,912.  He was paid
$50,000.  The four-factor approach for Crandon yielded a figure of
$52,260, and the alternative approach yielded a figure of $19,311.  He
was paid $40,000.  J.A. Lodging Nos. 8, 9.

   /7/ Subsequently, an additional $3000 was approved for petitioner
Paisley, based on the difference between the Boeing salary he would
have earned and the pay that he received as a government consultant
while awaiting Senate confirmation.  GX 111, Nos. 100165, 100429;
J.A. 190, 194-195.

   /8/ The district court held that the government's claims against
Boeing based on four of the five payments were barred by the
three-year statute of limitations in 28 U.S.C. 2415(b) for actions
founded upon a tort (Pet. App. 29a).  The claims against the
individual petitioners are governed by the six-year statute of
limitations in 28 U.S.C. 2415(a) for actions founded upon a contract,
and therefore were not time-barred.  The court of appeals affirmed
these rulings by the district court, but held that the United States
may not recover the full amount of the payment to Kitson, for which
recovery from Boeing is not time-barred, from both Boeing and Kitson
(Pet. App. 10a-12a).  Petitioners do not challenge the court of
appeals' holding that the United States' claims are not time-barred to
this extent.

   /9/ Judge Hall dissented from the panel's holding that the payments
were made and received with "compensatory intent" (Pet. App. 13a-15a).
 Petitioners' petitions for rehearing with suggestion for rehearing en
banc were denied by a 6-5 vote (id. at 30a-31a).

   /10/ See 54 Cong. Rec. 2039-2047, 4004-4006, 4010-4013, 4017,
4057-4059, 4859, 4920-4922, 4925 (1917);  Memorandum for the Attorney
General from Frederick W. Ford, Acting Ass't A.G., Off. Legal Counsel
(OLC), Re:  "Conflict of Interest Statutes," at 118-120 (Dec. 10,
1956) (1956 A.G. Mem.), reprinted in Federal Conflict of Interest
Legislation:  Hearings on H.R. 1900, H.R. 2156, H.R. 2157, H.R. 7556
and H.R. 10575 Before the Antitrust Subcomm. (Subcomm. No 5) of the
House Comm. on the Judiciary, 86th Cong., 2d Sess. 619, 738-740 (1960)
(1960 Hearings);  Association of the Bar of the City of New York,
Conflict of Interest and Federal Service 54-55 (1960) (N.Y. Bar
Report);  B. Manning, Federal Conflict of Interest Law 148-149 (1964).

   /11/ See Manning, at 156-157 ("It must be emphasized that the
statute forbids outside compensation even if the payor has no dealings
or relations whatever with the government and no special interest in
its policies.  It is not limited in its application to compensation
paid by a source in a sensitive relationship with the government
employee's agency -- a supply contractor dealing with the agency, for
example.");  Accord, Perkins, The New Federal Conflict-of-Interest
Law, 76 Harv. L. Rev. 1113, 1137 (1963).

   /12/ Congress extensively relied on the congressional staff and Bar
Association studies and the views of leading commentators when it
revised the conflict-of-interest laws in 1962, and those materials
therefore are a reliable source of guidance in construing Section 209.
 Because petitioners contend that this case involves a novel
application of the statutory prohibition that they could not have
anticipated, the statutory background and publications of
authoritative commentators have special relevance here.  This Court
has examined studies and commentary submitted to Congress over a
period of years to inform its interpretation of Congress's enactments.
 See, e.g., Western Air Lines, Inc. v. Criswell, 472 U.S. 400, 409-412
(1985);  Lowe v. SEC, 472 U.S. 181, 190-202 (1985);  EEOC v. Wyoming,
460 U.S. 226, 229-233 (1983);  ICC v. New York, N.H. & H. R.R., 372
U.S. 744, 753-758 (1963).

   /13/ President Kennedy appointed a special committee to study the
conflict-of-interest laws in the spring of 1961, and he sent a message
to Congress on the subject on April 27, 1961.  H.R. Doc. No. 145, 87th
Cong., 1st Sess. (1981).  The President also transmitted a proposed
bill to implement that message, which was introduced as H.R. 7139,
87th Cong., 1st Sess. (1961).  House Report 8;  1961 Hearings 21-25,
30-32, 57-63.  Congress also had before it an extensive study of the
conflict of interest laws (including 18 U.S.C. 1914 (1958)) undertaken
by OLC in 1956 (see 1956 A.G. Mem., note 10, supra), as well as
studies of Section 1914 and other conflict-of-interest laws by a
number of commentators.  See Staff Report 44 nn. 254 & 256, citing
McElwain & Vorenberg, 65 Harv. L. Rev. at 966-967, and Dembling &
Forrest, Government Service and Private Compensation, 20 Geo. Wash. L.
Rev. 174, 193 (1952);  1956 A.G. Mem. (1960 Hearings 747-749), quoting
Davis, The Federal Conflict of Interest Laws, 54 Colum. L. Rev. 893,
905-907 (1954).

   /14/ On May 19, 1958, "based upon the() recommendations" in the
Staff Report, Representative Celler introduced H.R. 12547, 88th Cong.,
2d Sess.  That bill was reintroduced in the next Congress as H.R.
2156, 86th Cong. 1st Sess. (1959), and the Subcommittee's 1960
Hearings focused in large part on the latter bill.  The
recommendations of the New York City Bar Association were embodied in
H.R. 10575, 86th Cong., 2d Sess. (1960), which was introduced by
Representative Lindsay.  The Subcommittee received extensive testimony
from Roswell Perkins, the Chairman of the Bar Association's special
committee.  House Report 7-8;  1960 Hearings 383-483;  1961 Hearings
100-132;  see also 1962 Hearing 42-52.  H.R. 10575 was reintroduced in
1961 as H.R. 3050, 87th Cong., 1st Sess.  In that same year,
Representative Celler introduced H.R. 3411, 87th Cong., 1st Sess.,
which was based on both the Staff Report and the Bar Association's
proposals.  The bill enacted into law in 1962 (H.R. 8140, 87th Cong.,
2d Sess.) was a composite that included provisions of both those
proposals.  1962 Hearing 36 (remarks of Rep. Lindsay).

   /15/ Compare Buckley v. Valeo, 424 U.S. 1, 27 (1976):

         Of almost equal concern as the danger of actual quid pro quo
      arrangements is the impact of the appearance of corruption
      stemming from public awareness of the opportunities for abuse
      inherent in a regime of large individual financial
      contributions.

   See United States Civil Service Comm'n v. National Ass'n of Letter
Carriers, 413 U.S. 548, 565 (1973).

   /16/ Section 209(a) exempts amounts "contributed out of the
treasury of any State, county, or municipality." This exception was
included to preserve agricultural extension and similar programs.
Manning, at 172.

   /17/ Roswell Perkins was regarded by Members of Congress as a
leading expert on the conflict-of-interest laws.  Senator Keating
stated that "(t)here is probably no one better informed person on this
subject" (1962 Hearing 37), and Representative Lindsay described him
as the "author of 80 percent of the House bill" and stated that his
committee's report was "probably the leading work on the subject of
conflicts of interest in the Federal branch that has been written to
date" (id. at 35).

   /18/ See 2 Comp. Gen. 775 (1923) ("salary and expenses");  18 Comp.
Gen. 460 (1938) (travel expenses incident to employee's detail to
foreign country);  26 Comp. Gen. 15 (1946) (cost-of-living allowance);
 35 Comp. Gen. 639 (1956) (cost-of-living allowance);  see generally
Manning, at 161.

   /19/ Professor Manning, of the Yale Law School, was the Staff
Director of the New York City Bar Association's study of the
conflict-of-interest laws (N.Y. Bar Report viii) and served on the
special committee appointed by President Kennedy in 1961 to study
those laws (H.R. Doc. No. 145, at 2).

   /20/ Section 1914 was understood to prohibit payment of moving
expenses as well.  See 1961 Hearings 63.

   /21/ The calculation of the proposed severance payment by both
Boeing and the recipients also took into account the value of unvested
portions of past contributions by Boeing to the individual
petitioner's accounts under the Company's Voluntary Investment Plan.
The unvested portion ordinarily is forfeited when an employee leaves
the Company.  See pages 4-5, supra.  Accordingly, the inclusion in the
severance payments of an amount attributable to that unvested portion
was indistinguishable for present purposes from any other transfer of
economic value made solely to reduce the financial hardship of
accepting a federal position, rather than to compensate for past
services to the payor.  It therefore constituted a "supplementation"
of the recipient's federal salary within the meaning of Section
209(a).

   /22/ See DOJ Mem., Conflicts of Interest Questions Arising From
Stock Options, Pension Rights and Other Executive Benefits of
Individuals Entering Government Employment From Private Business, at 5
(emphasis added), quoted in Perkins, 76 Harv. L. Rev. at 1139 n.89;
see also id. at 1141 n.93 ("'an ad hominem grant of (a stock) option
upon the employee's leaving his company to enter the Government might
contravene the statute'").

   /23/ See McElwain & Vorenberg, 65 Harv. L. Rev. at 967 ("It is
perfectly plain that Section 1914 outlaws double compensation for
Government service, but it is sometimes difficult to determine when a
particular payment is 'in connection with his services' as a
Government employee.  For example, it is sometimes hard to tell
whether a bonus paid just before an entry into Government service
constitutes in fact a payment for past services rendered the employer
or whether it is a prospective sweetening of the employee's Government
salary.");  Davis, 54 Colum. L. Rev. at 905 (footnote omitted) ("(T)he
retirement bonus given to a departing company official is permissible
when it is said to be paid in gratitude for past services rendered or
as an inducement to return after the termination of the Government
job, but the same bonus is not acceptable when its purpose is to
enable the company official to carry on financially in a low-paying
Government position.").

   /24/ Petitioners contend that the Kennedy Administration could not
have intended to criminalize pre-employment severance payments because
the Secretary of Defense in that Administration, Robert S. McNamara,
received payments totalling $618,750 from his former employer.  See
Br. 22 n.14, citing McNamara To Get $618,750 As Bonus, N.Y. Times,
Jan. 22, 1961, at 49, col. 6.  However, as the newspaper article
explains, those payments were made pursuant to an established company
policy and were compensation for his past services.  See also
Nomination of Robert S. McNamara:  Hearing Before the Senate Comm. on
Armed Services, 87th Cong., 1st Sess. 33-35 (1961).

   /25/ Petitioners also rely (Individ. Br. 20) on a passage in the
Senate Report stating (at 14) that Section 209 forbids payments "to a
Government employee," without expressly referring to a person who has
not yet formally commenced his federal service.  The Senate Report
described the statutory ban in general terms;  it did not purport to
explain all the details of its application.  The Senate Report
similarly explained (at 9) the new 18 U.S.C. 203 in general terms as
prohibiting "officers or employees of the Government from receiving
compensation for services rendered for others," without expressly
referring to payments received before the formal commencement of
federal service;  yet it is clear that Section 203 reaches such
payments.

   /26/ Petitioners point out (Individ. Br. 23) that the bribery
section specifically mentions payments made to persons who have not
yet assumed office while Section 209 does not.  However, Section 209
broadly applies to "(w)hoever" receives "any" supplementation of
salary for his government services;  this all-encompassing language
clearly includes recipients who have not yet formally assumed office.
Compare Monsanto, 109 S. Ct. at 2663.  The fact that Section 209 does
not specifically identify that (or any other) subcategory of
recipients "'does not demonstrate ambiguity' in the statute:  'It
demonstrates breadth.'" Ibid., quoting Sedima, S.P.R.L. v. Imrex Co.,
473 U.S. 479, 499 (1985).  The difference in the wording of Sections
201 and 209 is attributable to the fact that the bribery provisions
were the subject of a somewhat distinct study and revision (see Staff
Report (Pt. II)), and Congress therefore did not use the same
terminology in revising Section 201 as it used in revising the
conflict-of-interest laws.  Accordingly, the appropriate place to look
for parallels to the precise text of Section 209 is the related
conflict-of-interest provision in 18 U.S.C. 203, which unquestionably
covers pre-employment payments even though its text does not
specifically refer to them.

   Petitioners also argue (Individ. Br. 23-24) that they were beyond
the reach of the bribery statute at the time they accepted the
severance payments because they had not been officially informed that
they would be nominated or appointed (see 18 U.S.C. 201(a), para. 2),
and that it therefore would be anomalous to apply Section 209 to them.
 This argument is without merit.  Each of the individual petitioners
had already either started federal employment as a consultant or been
sufficiently assured of his nomination or appointment at the time the
payments were made.  See note 2, supra.  In any event, the fact that
the reach of Sections 209 and 201 might not precisely coincide at the
margins (due to their different drafting histories) does not warrant a
construction of Section 209 that altogether excludes payments made
prior to the formal commencement of federal service.

   /27/ Because most of the relevant OLC opinions are unpublished,
they were appended to the government's brief in the court of appeals
and are appended to this brief as well.  The OLC opinions are cited
principally to rebut petitioners' suggestion that the government
adopted its position recently and to ensure that the Court has all
relevant materials (and may give them whatever weight they warrant),
rather than in an attempt to bind petitioners to the holdings in the
opinions.  The individual petitioners contended in their reply brief
at the petition stage (at 5) that under 5 U.S.C. 552(a)(2), no
reliance can be placed on these OLC opinions because they were not
indexed and made available to the public for inspection and copying.
However, OLC opinions are exempt from that requirement by virtue of 5
U.S.C. 552(b)(5).  Courts frequently refer to such agency counsel
opinions where relevant to the issues before them.  See, e.g.,
Greentree v. U.S. Customs Service, 674 F.2d 74, 84-85 (D.C. Cir.
1982);  Symons v. Chrysler Corp. Loan Guarantee Bd., 670 F.2d 238, 243
n.7 (D.C. Cir. 1981);  NTEU v. Reagan, 663 F.2d 239, 251 n.19 (D.C.
Cir. 1981).

   Petitioners rely (Individ. Br. 24-25) on the statement in the
Attorney General's 1963 interpretative memorandum that Section 209
"uses much of the language of the former 18 U.S.C. 1914 and does not
vary from that statute in substance." Memorandum Regarding Conflict of
Interest Provisions of P.L. 87-849 (Feb. 1, 1963), 18 U.S.C. 201 note.
 That general statement appears to address the nature of the payments
that are barred (see page 37, infra), not the distinct issue presented
here.  Moreover, because Section 1914 apparently was understood by
this Department to apply to pre-employment payments, the language
quoted from the Attorney General's 1963 memorandum is consistent with
a similar reading of Section 209(a).  The longstanding position of OLC
also demonstrates that this general language in the Attorney General's
1963 memorandum was not understood to exempt such payments.

   /28/ Petitioners refer to annual payments to be made to Deputy
Secretary of Labor Roderick DeArment by his former law firm and a
$200,000 severance payment made to Deputy Secretary of State Lawrence
Eagleburger.  See Individ. Br. 22-23 n.16, citing U.S. Allows
Long-Term Severance Pact, Wash. Post, May 20, 1989, at A11, col. 1.
The public account of the former arrangement makes clear that the
payments are made pursuant to an existing plan, based on past services
to the firm.  We have been informed by the Office of Government Ethics
that it approved the payment to Deputy Secretary Eagleburger because
it was satisfied that the payment was made as compensation for his
past services to Kissinger Associates, not in consideration of his
accepting a government position.

   /29/ Petitioners err in citing United States v. Muntain, 610 F.2d
964 (D.C. Cir. 1979), and United States v. Raborn, 575 F.2d 688 (9th
Cir. 1978), for the proposition that "Congress intended Section 209 to
be limited to incumbent federal officials" (Individ. Br. 25 n.18).
Muntain merely held Section 209 inapplicable because the payments were
made for an outside job that the defendant performed while on annual
leave and that had no connection to his official duties.  Raborn
involved defendants who concededly were government employees, and the
Ninth Circuit, in that context, observed that the statute "prohibits *
* * an officer or employee of the executive branch" from receiving any
supplementation of salary.  575 F.2d at 691-692.

   /30/ The statute contains exceptions for special Government
employees, who serve less than 130 days annually, 18 U.S.C. 202 (18
U.S.C. 209(c));  employees serving without compensation (18 U.S.C.
209(c));  payments made by state and local governments (18 U.S.C.
209(a));  certain travel and moving expenses (18 U.S.C. 209(d) and
(e));  and certain payments to employees injured while protecting the
President (18 U.S.C. 209(f)).

   /31/ For other special exemptions from 18 U.S.C. 209, see 5 U.S.C.
3343(e) (expenses of employees detailed to international
organizations);  45 U.S.C. 362(h) (employers and employees assisting
the Railroad Retirement Board);  7 U.S.C. 2220 (employees engaged in
agricultural or Forest Service cooperative extension programs);  8
U.S.C. 1353c (reimbursement for services of immigration officers
inspecting aliens in foreign countries).

   /32/ Accord, International Ry. v. Davidson, 257 U.S. 506, 515
(1922);  2 Comp. Gen. 775 (1923);  18 Comp. Gen. 460 (1938);  26 Comp.
Gen. 15, 17-18 (1946);  29 Comp. Gen. 163, 167 (1949);  36 Comp. Gen.
135 (1956).

   /33/ The word "compensation" connotes not only payment for services
rendered, but also "recompense" and "something that makes up for a
loss" (Webster's Third New International Dictionary 463 (1986)).  By
making up for the recipient's financial losses resulting from his
performance of services for the federal government, payment of moving
expenses and cost-of-living allowances serves as "compensation" for
federal services in this sense as well.

   /34/ See Perkins, 76 Harv. L. Rev. at 1139:

         The sole test should be, we submit, the factual one of
      whether the payment is made in consideration of past services.
      To test its own intent, the board of directors of the
      corporation from which the executive is departing should ask
      itself:  would we make the same severance payment if the
      corporate executive were leaving, with no idea of returning, to
      accept the presidency of a college or of a charitable
      foundation, or to enter the ministry?

   /35/ The individual petitioners cite (Br. 48) testimony that they
did not know how the responsible Boeing officials computed the final
amount of their payments.  They do not dispute, however, that they
submitted worksheets computing the financial loss that would result
from entering government service.  Because, from the individual
petitioners' perspective, the payments clearly constituted a mechanism
for making up some or all of that loss, the payments were received as
"supplementation of salary" and "as compensation for" their federal
services.  Similarly, although Boeing cites (Br. 24) the district
court's finding that its chief executive officer (Mr. Wilson), who
gave final approval to the payments, did not know the "specific
calculation method" (Pet. App. 20a), Boeing surely cannot avoid
liability on that basis.  Mr. Wilson knew that the payments were to be
made only because of the recipients' anticipated federal service, and
he approved the recommendation of responsible Boeing officials who
concededly utilized a method of calculation that, in itself, rendered
the payments unlawful under Section 209.  In any event, Mr. Wilson was
aware that the calculations were based in part on the salary
differential and moving expenses, which sufficiently informed him that
the payments had characteristics that rendered them unlawful.  See
pages 5-7, supra.

   /36/ For example, the district court was of the view that all
"severance" payments are per se lawful under the statute and that "the
formula for calculation of severance pay cannot make the payment
something other than severance pay" (Pet. App. 26a).

   /37/ Petitioners also assert that the district court "found" that
the payments were made "to sever the relationship with these employees
based on past performance and accumulated benefits" (Individ. Br. 46,
quoting Individ. Pet. App. 25a (emphasis added by petitioners)).  The
quoted statement, however, appears in the district court's
"Conclusions of Law," not its "Findings of Fact." Moreover, although
the recipients' past services to Boeing obviously furnished an
occasion for making the payments -- Boeing presumably would not make
such payments to persons having no affiliation with the Company -- the
triggering event for the payments and the basis of their calculation
was the recipients' anticipated federal employment.

   In any event, petitioners' ties with Boeing were severed through
their receipt of separate checks reflecting the value of accrued
benefits to which every other terminating employee would be entitled.
By contrast, the overwhelming percentage of each individual's payment
request to Boeing consisted of future financial losses.  The
submissions also included the amounts of Boeing contributions to
benefit plans that were accrued but unvested at the time of
termination, and the value of stock options that were granted in the
year before termination.  But because these benefits otherwise would
have been lost when they left the Company, it was not necessary for
the individuals to receive cash payments for them in order to "sever"
their ties.  The value of those two items also was relatively small in
relation to the total payments.  See pages 4-5, supra.

   /38/ This Court has held in civil cases that self-serving
declarations by a party as to his intent, unsupported by any extrinsic
evidence and contradicted by objective facts, may be found to be
insufficient as a matter of law to justify a verdict on behalf of that
party.  See, e.g., United States v. Generes, 405 U.S. 93, 106-107
(1972);  United States v. Union Pac. R.R., 226 U.S. 61, 92-93 (1912);
District of Columbia v. Murphy, 314 U.S. 441, 449, 456 (1941).

   /39/ This remedy was ordered in the one other civil action based on
Section 209.  United States v. Pezzello, 474 F. Supp. 462, 463 (N.D.
Tex. 1979).  See also N.Y. Bar Report 56 (discussing Comptroller
General decisions stating that payments received in violation of
former Section 1914 may be collected by deduction from employee's
pay);  see, e.g., 30 Comp. Gen. 246, 250 (1950).

   /40/ Boeing argues (Br. 26-32) that it is not liable because there
was no "actual conflict of interest," but only an "appearance" of
improper activity.  This argument reflects a fundamental
misconception:  the statute is not addressed solely to appearances.
Section 209 is a conflict of interest statute "(i)n the strictest
sense" (N.Y. Bar Report 55), as was 18 U.S.C. 434 (1958), at issue in
Mississippi Valley.  "The employee does not have to do anything
improper in his office to violate the statute" (N.Y. Bar Report
55-56), and specific corruption likewise is not an element of the
payor's offense under 18 U.S.C. 209(a).  Because the harm caused by
payments made in violation of Section 209(a) is "uncertain in its
mathematical calculation," and nominal damages will deter no one, the
amount of the payment is the proper measure of damages.  Continental
Management, 527 F.2d at 619;  see also Snepp, 444 U.S. at 514-515.
Finally, contrary to petitioners' contention (Individ. Br. 26-27), the
government did not "concede" or "stipulate" that no conflict of
interest or breach of fiduciary duty occurred.  See Br. in Opp. 18
n.11.

   /41/ To support their claim of waiver and certain other arguments,
petitioners rely on affidavits attached to their motions for summary
judgment.  See J.A. 44-82.  The affidavits are hearsay, Fed. R. Evid.
801(c), could not have been admitted into evidence, Fed. R. Evid. 802,
and do not constitute a part of the trial record that forms the basis
for the district court's opinion.

   /42/ The cited regulation states:  "Nothing in the (Ethics in
Government) Act or this part requiring reporting of information or the
filing of any report shall be deemed to authorize the receipt of
income, gifts, or reimbursements, the holding of assets, liabilities,
or positions, or involvement in transactions that are prohibited by
law, Executive order or regulation."

   /43/ The individual petitioners also rely (Br. 40) on the district
court's finding that Jones and Paisley disclosed the fact and amount
of the severance payments to certain Defense Department officials.
Pet. App. 21a.  However, not all payments labeled as "severance"
payments are either lawful or unlawful under Section 209.  Petitioners
do not allege that Paisley and Jones disclosed to Defense Department
personnel the essential characteristics that rendered the payments at
issue here unlawful.  Moreover, although petitioners argue that
Paisley and Jones received informal assurances that they could accept
the payments, they neither requested nor received a formal written
opinion to that effect from the Designated Agency Ethics Officer for
the Department of Defense, the only Department official authorized to
decide that question.  See 32 C.F.R. 40.5(b).  See also 5 U.S.C. App.
402(b)(8) (OGE advisory opinions).  Inexplicably, the individual
petitioners also rely (Br. 42) on disclosures made by Boeing in 1981
to the Defense Contract Audit Agency (DCAA) about the nature of its
severance-pay practice.  Those disclosures were made only after Boeing
charged the first three of the payments at issue here to the
government and after the DCAA questioned the basis for the payments.

   Boeing also argues (Br. 35) that "disclosures" insulate it from
liability.  Although the record contains some correspondence on the
subject (J.A. 541-583), the payments for the most part are not
described in much detail.  Moreover, a 1973 letter from a Boeing
official to the General Counsel of the Air Force states that a Boeing
employee had been told by a Defense Department official that a
severance payment might violate Section 209 if it was based on the
difference between the employee's Boeing and federal salaries (J.A.
542).  The record contains no response to that letter or any other
document stating that Defense Department officials formally approved
payments having the characteristics that render those at issue here
unlawful.

   APPENDIX