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

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

   No. 88-931

   No. 88-938

   In The Supreme Court Of The United States

   October Term, 1988

   On Petitions For A Writ Of Certiorari To The United States Court Of
Appeals For The Fourth Circuit

   Brief For The United States In Opposition

            TABLE OF CONTENTS
   Questions Presented
   Opinions below
   Jurisdiction
   Statutory provision involved
   Statement
   Argument
   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 judgment of the court of appeals (Pet. App. 1a-15a) was entered
on May 5, 1988, and timely petitions for rehearing were denied on
September 7, 1988 (Pet. App. 30a-31a).  The petition for a writ of
certiorari in No. 88-931 (Individuals' Pet.) was filed on December 5,
1988, and the petition for a writ of certiorari in No. 88-938 (Boeing
Pet.) was filed on December 6, 1988.  The jurisdiction of this Court
is invoked under 28 U.S.C. 1254(1).

                     STATUTORY PROVISION INVOLVED

   Section 209(a) of Title 18 of the United States Code provides in
pertinent part:

         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 * * * 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.

                          QUESTIONS PRESENTED

   1. Whether severance payments made by petitioner Boeing Company to
five of its employees -- which were made solely because the employees
were to assume positions with the Department of Defense, and which
were calculated to make up the difference between the departing
employees' salaries and benefits with the federal government and their
higher salaries and benefits with Boeing -- violated the prohibition
in 18 U.S.C. 209 against the supplementation of the salaries of
federal employees.

   2. Whether the court of appeals correctly required the recipients
of those payments to forfeit them to the United States in this civil
action.

                               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, who were about to accept high-level
positions in the Department of Defense.  Pet. App. 2a, 4a.  The court
of appeals held that these payments violated 18 U.S.C. 209(a), which
bars the supplementation of the salary paid for services as a federal
employee, and that the recipients therefore must forfeit those
payments to the United States.

   1. The amounts Boeing paid to the five individual petitioners were
called "severance payments," but they were neither rewards based on
the recipients' past services to Boeing nor hardship payments to
provide a financial cushion for employees between jobs.  Rather, the
payments were made only because the individual petitioners were to
assume positions with the Department of Defense, and the amount of the
payments was tied directly to their future government employment.  /2/
In fact, the evidence showed that during the preceding 20 years,
Boeing had made only 21 similar payments, and in every case, the
recipient left Boeing to accept a high-level position with the United
States Government -- typically in the Department of Defense or the
National Aeronautics and Space Administration (NASA) and typically
involving research and development or long-range defense planning.
The payments were made to these recipients, including the five
individual petitioners in this case, in order to encourage them to
accept federal employment.  No such payments were offered to Boeing
employees who retired, left Boeing for other nonfederal employment, or
accepted lower-level government positions or positions at agencies
other than those of special interest to Boeing.  Pet. App. 4a, 8a,
17a-18a.  /3/

   The principal factor used to calculate the amount of the payment to
each of the five individual petitioners was the anticipated difference
between his salary and benefits with Boeing and the lower salary and
benefits he would receive during the period of between three and four
years that he expected to work for the Department of Defense.  Each
employee-petitioner calculated that differential over the projected
three- or four-year period, which corresponded to the time remaining
in the first Administration of President Reagan, and each submitted
his calculation to Boeing.  /4/ Boeing's personnel officials then
calculated the same differential and used the resulting figure as the
principal component of the proposed payment, which also included an
amount to cover expenses of moving to Washington, D.C., and an
estimated cost-of-living differential between Seattle and Washington,
D.C.  See C.A. App. 9-60.  The payments as so calculated were then
approved, virtually without change, by the Chairman of the Board of
Boeing, T.A. Wilson.  Wilson testified that he knew the payments were
designed to alleviate the financial "hardship" that Boeing employees
might experience in leaving to work for the federal government,
including the lower salary and the moving expenses, and that one of
the considerations in calculating the amount of the payment was the
difference between the person's Boeing salary and his federal salary.
Pet. App. 4a, 8a;  see C.A. App. 645-646.  /5/

   2. The United States filed this civil action against petitioner
Boeing and the five individual petitioners, seeking disgorgement of
the payments by the individual petitioners and damages from petitioner
Boeing in the amount of the payments.  The United States contended
that the payments constituted unlawful supplementations of the
recipients' federal salaries, in violation of 18 U.S.C. 209(a).

   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 in this case were in
any event not unlawful under 18 U.S.C. 209(a), because, as the court
saw it, they were intended to "sever the relationship" between Boeing
and its employees, not to supplement the latters' government salaries
or to compensate them for their government services (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;  that the payments were made solely to those leaving
for federal employment;  and that the payments were intended by
petitioner Boeing to be the equivalent of the "paid leave" it had
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 expressed the view that damages could not
be recovered by the United States under Section 209(a) without a
showing of actual corruption on the part of Boeing or the individual
petitioners, which it had not shown in this case (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 disclosures concerning the amount of
the payments to certain employees of the Department of Defense (id. at
27a).  /6/

   4. The court of appeals reversed, holding that the payments
violated Section 209(a) (Pet. App. 1a-15a).  The court 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," receives a supplementation of salary (see 18 U.S.C. 1914
(1958)), but that the limiting phrase "being a Government official or
employee" was deleted when Congress enacted the present 18 U.S.C. 209
as part of the comprehensive revision of the conflict-of-interest laws
in 1962.  See Act of Oct. 23, 1962, Pub. L. No. 87-849, Section 1(a),
76 Stat. 1125.  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" and
which thereby ensure that the government retains the faith of the
people that is critical to "the very fabric of a democratic society"
(id. at 6a-7a, quoting United States v. Mississippi Valley Generating
Co., 364 U.S. 520, 562 (1961)).  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" (Pet. App. 7a).

   The court of appeals did not accept the government's contention
that Section 209(a) sets forth an objective standard of conduct that
does not include an element of intent, since Section 209(a) prohibits
payments that are made "as compensation for" the recipient's federal
services (Pet. App. 7a).  However, the court found that the record
established the requisite compensatory intent, and that the district
court's contrary finding was clearly erroneous.  The court relied on
four factors.  First, the individual 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 decided the ultimate amount, "received a recommendation
and was aware of the factors used to reach that figure" (id. at 8a).
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 had been
made over the preceding 25 years, and those were made only to persons
entering high-level government positions, "similarly 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' reliance on a common law
doctrine that only "secret" profits give rise to a conflict of
interest.  The court reasoned that this suit is based not on the
common law, but on the statutory rule prescribed by Section 209, which
is not limited to secret payments (Pet. App. 9a).  Moreover, even
under the common law, effective disclosure must be "formal, complete,
and directed to the proper parties" (ibid.).  Here the recipients'
financial reporting forms revealed only their total income from
Boeing, without separately identifying severance payments, and the
court therefore found that any disclosures were "not sufficiently
complete to insulate the payments from the conflict of interest laws"
(ibid.).  /7/

                               ARGUMENT

   The payments made by petitioner Boeing and received by the
individual petitioners in this case were classic violations of 18
U.S.C. 209(a):  they were made solely because the individual
petitioners planned to assume positions with the Department of
Defense;  they were intended to encourage the recipients to accept
those positions;  and they were calculated to supplement the
recipients' federal salaries by making up the difference between their
government pay and their higher pay with Boeing (as well as to defray
other expenses incurred in accepting the government positions).  The
decision of the court of appeals, which simply requires disgorgement
of those illegal payments, is correct and does not conflict with any
decision of this Court or of another court of appeals.  Moreover, the
decision below is consistent with advice given by the Department of
Justice to other agencies and prospective appointees for fifteen
years.  The petitions for a writ of certiorari therefore should be
denied.

   1. The court of appeals correctly held that the United States has a
civil cause of action to recover payments made in violation of the
standards of conduct established by a criminal conflict-of-interest
statute.  Such a statute is "evidence of the precise nature of th(e)
fiduciary duty" owed to the United States by its agents (United States
v. Kenealy, 646 F.2d 699, 703 (1st Cir.), cert. denied, 454 U.S. 941
(1981)), and breach of the statutory standards "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 United States v.
Mississippi Valley Generating Co., 364 U.S. 520 (1961).

   Section 209(a), like its predecessor, 18 U.S.C. 1914 (1958), is
"framed as an absolute prohibition against double compensation for
Government services." Staff of Subcomm. No. 5 of House Comm. on the
Judiciary, 85th Cong., 2d Sess., Federal Conflict of Interest
Legislation 44 (Comm. Print 1958).  At its core, this prohibition
applies to payments that have either of two characteristics.  First,
the statute bars payments, however denominated, that are specifically
intended to induce acceptance of federal employment.  As former
Assistant Attorney General Scalia explained in an opinion addressing
the precise question of the application of Section 209 to severance
payments, such payments may "not (be) used to induce or influence
Government employment." Op. Off. Legal Counsel at 3 (Oct. 21, 1974);
see also 5 Op. Off. Legal Counsel 150, 151 (1981);  Op. Off. Legal
Counsel at 6 (May 10, 1976).  /8/ Second, "the appointee's former
employer cannot under this section make up the difference between his
former salary and his government salary." Ass'n of the Bar of the City
of New York, Conflict of Interest and Federal Service 65 (1960).
Thus, a payment "based directly on the difference between (a private)
salary and (an employee's) governmental salary * * * would be a clear
violation of 209(a)." Op. Off. Legal Counsel 3 (Aug. 7, 1974);  /9/
see also R. Perkins, The New Federal Conflict-of-Interest Law, 76
Harv. L. Rev. 1113, 1136-1138 91963) ("The 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.").  /10/

   The payments at issue in this case had both of these prohibited
features.  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
Individuals' Pet. 15-16).  Similarly, it is undisputed that the
payments in this case were calculated in large part on the basis of
the difference between the recipient's Boeing salary and his lower
salary with the federal government.  See Pet. App. 4a, 8a, 18a, 26a.
These conclusions of course are reinforced by the fact that Boeing did
not have a policy of general applicability providing for severance
payments to employees who left Boeing to take any of a broad range of
jobs;  rather, the uncontradicted evidence showed that Boeing
consistently made such payments only to persons who were to assume
high-level positions with the federal government -- a factor that has
uniformly been regarded as a ground for finding a payment barred by
Section 209.  5 Op. Off. Legal Counsel 150, 151 (1981);  Op. Off.
Legal Counsel at 3, 5 (Sept. 15, 1977);  Op. Off. Legal Coounsel at 6,
7-8 (May 10, 1987);  Op. Off. Legal Counsel at 3, 4-5 (Oct. 21, 1974);
 Perkins, 76 Harv. L. Rev. at 1139.

   The other principal components of the payments in this case -- for
moving expenses and a cost-of-living differential -- were also clearly
barred by Section 209(a).  In fact, Congress amended 18 U.S.C. 209 in
1979 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 the Act of Dec. 29,
1979, 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 moving expenses is generally
prohibited by Section 209(a).  See H.R. Rep. No. 674, 96th Cong., 1st
Sess. 2, 5, 6, 8 (1979);  2 Op. Off. Legal Counsel 267 (1978).
Although Congress carved out a special exception, it left undisturbed
the general prohibition against reimbursement of moving expenses.
Moreover, the legislative history makes clear that the special
exception does not overcome the bar in Section 209(a) against a
private employer's payment of a federal employee's "personal living
expenses" (id. at 2-3).  It necessarily follows in this case that
Boeing was barred by Section 209(a) from paying a portion of the
individual petitioners' personal living expenses -- namely, the
portion representing the cost-of-living differential.  In sum, all of
the principal components of the severance payments at issue in this
case were clearly barred by 18 U.S.C. 209(a).

   2. Notwithstanding the broad purposes of the prohibition against
supplementation of a federal salary, petitioners contend (Individuals'
Pet. 10-17) that any payments made prior to the time the recipient
actually commences his federal employment are wholly outside the scope
of Section 209(a).  The court of appeals correctly rejected that
contention (Pet. App. 6a-7a).

   Section 209(a) provides that "(w)hoever receives any * * *
supplementation of salary, as compensation for his services as an
officer or employee of the executive branch," commits a criminal
offense.  This language requires only that the services to which the
payments are tied be performed by the recipient in his capacity as a
federal officer or employee.  This prerequisite was amply established
here.  Section 209(a) is not further limited to situations in which
the recipient is actually a federal officer or employee at the time
the payments are made.  Nor should such a limitation be read into the
statutory text absent compelling indications of congressinal intent,
because the result would be to facilitate circumvention of the
statutory bar.  In any event, the legislative history establishes that
Section 209(a) should not be given the self-defeating construction
petitioners urge.

   Before 1962, the predecessor to Section 209 (18 U.S.C. 1914 (1958))
and the predecessor to 18 U.S.C. 203 (18 U.S.C. 281 (1958)) stated
that those prohibitions applied only to persons who accepted payments
while "being a Government official or employee" or "being * * * (an)
officer or employee of the United States." However, this limiting
language was dropped from both provisions in 1962, thereby eliminating
a loophole that failed to prohibit "pre-Government-employment
agreements to receive compensation." Federal Conflict of Interest
Legislation at 8, 25 (referring to Section 203);  H.R. Rep. No. 748,
87th Cong., 1st Sess. 20 (1961);  Hearings Before the Antitrust
Subcomm. of the House Comm. on the Judiciary, 87th Cong., 1st Sess. 37
(1961).  The change was "designed to provide that violation shall turn
on the recipient's status at the time of * * * rendition of services,
rather than on his status at the time of agreement for or receipt of
compensation." Federal Conflict of Interest Legislation at 51;  see
id. at 22, 25 (predecessor to Section 203);  id. at 62 (new Section
209 is to be applied "coextensively with" new Section 203).  Thus, as
the leading commentator on the 1962 revision observed, by virtue of
this change, "(t)he time of receipt of the outside compensation is
clearly irrelevant under (18 U.S.C. 209(a)), if the compensation is
for the government services." Perkins, 76 Harv. L. Rev. at 1137.

   Petitioners contend (Individuals' Pet. 13-14), 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), that "(o)ther circuits have
recognized that Congress intended Section 209 to be limited to
incumbent federal officials." Neither decision stands for that
proposition.  In Muntain, the court held that Section 209 was
inapplicable not because the defendant was not a government employee
at the time that he accepted the payments, but because the payments
were for services that the recipient performed while he was on annual
leave and that had no relation to his official duties.  610 F.2d at
969-960.  The fact that the employee was on annual leave when he
accepted the payments was cited by the court of appeals not, as
petitioners state (Individuals' Pet. 14), in order to establish that
the recipient must have "employee status" at the time a payment is
received, but to establish that the defendant was not being paid twice
for services to the government at all.

   Raborn likewise did not address the issue of the timing of
prohibited payments.  That case involved persons who concededly were
government employees (575 F.2d at 689), and the Ninth Circuit, in
describing the elements of the offense in that context, simply
observed that Section 209 "prohibits * * * an officer or employee of
the executive branch" from receiving any supplementation of salary.
575 F.2d at 691-692.  The court in no way suggested that a lump-sum
payment designed to supplement an individual's federal salary, but
paid immediately before he assumed his position, would be permissible
under Section 209.

   Petitioners suggest (Individuals' Pet. 12, 15-17), however, that
the decision below is novel and warrants review because it will
adversely affect the government's ability to attract individuals for
top government positions.  Petitioners ignore the fact that the court
of appeals' holding in this case is fully consistent with the position
taken by the Office of Legal Counsel over the past fifteen years in
opinions rendered for various agencies and prospective appointees.
See opinions cited at pages 11-12, supra.  Those opinions make clear
that severance payments such as those at issue here are clearly barred
by Section 209.  See also Perkins, 76 Harv. L. Rev. at 1139 n. 89.
Petitioners rely (Individuals' Pet. 15) on the testimony of the former
Secretary of the Navy that recruitment is made difficult by the
financial disincentives involved in the acceptance of high-level
government positions.  Whatever the accuracy of that view as a general
matter, private employers and their employees who wish to enter
government service are not free to respond to that supposed problem by
making payments that violate a criminal conflict-of-interest statute.
Moreover, the interpretation of 18 U.S.C. 209 is the responsibility of
the Attorney General, not officials of other departments and agencies.

   3. Contrary to petitioner Boeing's contention (Boeing Pet. 15-17),
the court of appeals correctly ruled that the amount of the illegal
payments is the appropriate measure of monetary relief in this case.
In a civil conflict-of-interest case, it may often be difficult to
prove loss or damages in the usual sense.  Significant aspects of the
harm resulting from acceptance of improper payments -- the injury to
the reputation of public officials in the public's estimation and
injury to the morale of other public employees -- are unquantifiable,
but nonetheless real.  In such cases, therefore, this Court has not
required a showing of actual loss or damage.  United States v. Carter,
217 U.S. 286, 305 (1910).  Instead, the value of the illegal payment
is uniformly considered to be the appropriate measure of recovery.
United States v. Pezzello, 474 F. Supp. 462, 463 (N.D. Tex. 1979);
Continental Management, Inc. v. United States, 208 Ct. Cl. 501, 527
F.2d 613, 619 (1975).  Compare Snepp v. United States, 444 U.S. 507,
514 (1980) (while damages accruing by virtue of breach of public trust
are unquantifiable, nominal damages will "deter no one" and the most
appropriate measure of recovery is profits accruing to the defendants
by virtue of the breach).  Such a sanction is appropriate because it
promotes the congressional goals of "enforcing the loyalty of (the
government's) agents" and of deterring future breaches of the
standards established by the conflict-of-interest laws.  United States
v. Kearns, 595 F.2d 729, 734 (D.C. Cir. 1978).

   This rule is especially appropriate under 18 U.S.C. 209, in which
Congress prohibited payments designed to supplement the recipient's
federal salary, without regard to whether any actual injury is shown,
and did so precisely in order to prevent even an appearance of a
conflict-of-interest, a subtle form of bribery (see Muschany v. United
States, 324 U.S. 49, 68 (1945)), and the possibility that the
recipient might be insufficiently attentive to his federal duties.
See Conflict of Interest and Federal Service at 211-212.  Moreover,
the only thing that is required of the individual petitioners in this
case is to disgorge the payments that Congress proscribed, plus
interest.  Petitioners should not be permitted to retain those illegal
windfalls on the theory that no quantifiable harm was demonstrated.
Nor is there any requirement that the government establish actual
corruption, such as preferential treatment of Boeing in return for the
payments -- although documents indicate that Boeing did anticipate
some type of benefit from the placement of its employees in the
government positions.  /11/ In any event, there is no conflict among
the circuits on the issue of damages in a case such as this, and
further review therefore is unwarranted.

   4. The court of appeals also correctly rejected the individuals
petitioners' contention (Individuals' Pet. 17-21), based on common law
principles, that they should not be required to disgorge the illegal
payments because they "disclosed" the payments received.  This
contention is without merit for two reasons.  First, as the court of
appeals held (Pet. App. 9a), the common law rule is inapplicable here,
because this suit is based on a statute that bars all payments made
for the purpose of supplementing the salary of a federal employee,
without regard to whether those payments are secret or "disclosed."

   Second, even where the common law rule applies, improper payments
made to an agent are recoverable by an employer if they have been
retained by the agent without full disclosure.  United States v.
Carter, 217 U.S. at 305.  The court of appeals correctly defined a
full disclosure as one that is "formal, complete, and directed to the
proper parties" (Pet. App. 9a, citing United States v. Kenealy, 646
F.2d at 705).  The alleged "disclosures" by petitioners in this case
did not meet those standards.  Petitioners did not separately report
the severance payments on their financial disclosure forms, /12/ and
they have not alleged that anyone in the Department of Defense was
ever apprised that Boeing's "severance" payments were made solely to
those offered federal employment for the purpose of encouraging them
to accept high-level government jobs of key importance to Boeing, and
that the payments were based primarily on the difference between the
recipient's Boeing and federal salaries.

   Moreover, even if the individual petitioners' supervisors had been
made fully aware of the circumstances surrounding the payments and had
approved them, that action would not absolve the petitioners of
liability.  Section 209, unlike some other conflict-of-interest
statutes, does not authorize any government official to waive its
prohibitions.  Compare 18 U.S.C. 208(b).  As this Court stated in
Mississippi Valley Generating, knowledge (or even approval) by a
superior of a government employee's violation does not establish a
waiver of a statutory standard of conduct.  This is so because

         an agent's superiors may not appreciate the nature of the
      agent's conflict, or * * * might, in fact, share the agent's
      conflict of interest.  The prohibition (against such waivers)
      was therefore designed to protect the United States, as a
      Government, from the mistakes, as well as the connivance, of its
      own officers and agents.  It is not surprising therefore that
      (the Court has) consistently held that no government agent can
      properly claim exemption from a conflict-of-interest statute
      simply because his superiors did not discern the conflict.

364 U.S. at 561.  The court of appeals' conclusion that the common law
"disclosure" defense was not established here also is consistent with
other appellate decisions.  See, e.g., United States, v. Kenealy,
supra;  United States v. Medico Indus., Inc., 784 F.2d 840, 845 (7th
Cir. 1986) ("generals are not authorized to waive the application" of
conflict of interest laws).  This fact-bound issue does not warrant
further review.

   5. Finally, petitioners argue (Individuals' Pet. 22-26;  Boeing
Pet. 12-15) that the court of appeals misapplied the "clearly
erroneous" standard under Fed. R. Civ. P. 52(a) in reversing the
district court's finding that petitioners did not intend to violate
the prohibition in Section 209(a) against supplementing the
recipients' salaries "as compensation for" their federal services.  To
the contrary, the court of appeals faithfully followed this Court's
precedents, examining the entire record and concluding that the
district court's factual findings were unsupported, and indeed were
contradicted, by undisputed evidence in the record -- including the
fact that the payments were made solely to Boeing employees who were
planning to accept high-level government positions, were made for the
purpose of encouraging the recipients to accept such positions, and
were calculated to make up the salary differential (Pet. App. 8a).
This evidence conclusively establishes that the recipients'
prospective federal services were the consideration for the payments,
and that the payments therefore were intended "as compensation for"
their federal services within the meaning of Section 209(a).  See Op.
Off. Legal Counsel at 4-7 (May 10, 1976).

   The district court's findings, on the other hand, were based in
part on a misunderstanding of the statute, since the court apparently
believed that it was insufficient for the government to establish that
the payments were made solely because of (and were calculated on the
basis of the salary for) the recipient's government services.  As a
result, the district court's findings either were legally irrelevant
or affirmatively demonstrated the requisite intent under the statute.
See, e.g., Pet. App. 17a (finding that Boeing made payments "to
encourage its employees to serve their government");  id. at 18a
(severance payments were calculated on basis of differential in
financial benefits);  id. at 26a (method of calculating payments
irrelevant).

   In any event, petitioners' objections to the court of appeals'
review of the evidence are without merit.  For example, petitioner
Boeing contends (Boeing Pet. 14) that the court of appeals
"selectively disregarded other factual circumstances that specifically
negate the inferences that it drew from" the method of calculation and
the limitation of eligibility to those entering federal employment.
Boeing relies on the district court's finding that "'(t)he severance
payments made to the individual defendants were not contingent upon
the individuals entering into federal government,'" and that the
payments were given "'unconditionally, no matter what (the employee)
did in the future'" (Boeing Pet. 14, quoting Pet. App. 19a;  see also
Individuals' Pet. 5).  The objective evidence of record contradicted
these findings.  The President of Boeing Aerospace testified that
there had never been an occasion when a departing employee accepted a
payment and then failed to take the government position, and he stated
that he did not know what the Company would do under such
circumstances (C.A. App. 635).  Moreover, Boeing documents showed that
it sought to make sure that the offers of federal employment would be
accepted before the payment checks were issued.  One document from the
Executive Vice President of Boeing Aerospace states that the payment
to Jones is "conditional on" Jones' "acceptance of the job" (Gov. Exh.
110, No. 570/100056).  Similarly, an internal Boeing document states
that company officials were concerned that Paisley's appointment would
not be confirmed by the Senate and suggested that a "memo of
understanding" be executed to cover a situation in which Paisley would
take the payment and then simply retire (Gov. Exh. 111, No.
699-100167).  /13/

   Petitioners also point to their own self-serving statements that
they did not think that they were making or receiving payments that
amounted to supplementations of salary as compensation for services to
the government (Boeing Pet. 13-14;  Individuals' Pet. 23-25).  Viewing
the record as a whole, however, the court of appeals found the record
overwhelmingly inconsistent with those statements.  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.

Moreover, this Court has repeatedly 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).  Here, the court of appeals reasonably concluded that
petitioners' statements were legally insufficient and should not have
been accepted as conclusive by the district court, in the face of the
objective evidence in the record.  /14/

   Petitioners appear to believe that any determination by a court of
appeals that a district court's factual findings are "clearly
erroneous" necessarily "constitutes a reweighing of evidence contrary
to the requirements of Rule 52(a)" (Boeing Pet. 13).  Rule 52(a),
however, does not insulate factual findings from all review.  On the
entire record that existed in this case, the court could not help but
conclude that "a mistake had been committed." Anderson v. Bessemer
City, 470 U.S. at 575.  In any event, the court of appeals'
application of the clearly erroneous standard in the particular
circumstances of this case does not warrant further review, especially
since the district court's findings were infected by errors of law.

                              CONCLUSION

   The petitions for a writ of certiorari should be denied.

   Respectfully submitted.

   WILLIAM C. BRYSON

      Acting Solicitor General

   JOHN R. BOLTON

      Assistant Attorney General

   MICHAEL F. HERTZ

   DOUGLAS LETTER

   JOAN E. HARTMAN

      Attorneys

   MARCH 1989

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

   /2/ The amount of Boeing's payments to and the government positions
accepted by the individual petitioners were:  Paisley ($183,000),
Assistant Secretary of the Navy for Research, Engineering and Systems;
 Jones ($132,000), Under Secretary of Defense for Strategic and
Theater Nuclear Forces;  Reynolds ($80,000), Deputy Director of Space
and Intelligence Policy;  Kitson ($50,000), Deputy Assistant Secretary
of the Navy for Command, Communications and Control Intelligence;  and
Crandon ($40,000), computer scientist for NATO Air Command and Control
Systems Team.

   /3/ See C.A. App. 61-65, 441, 547-549, 595, 638-639, 645-647,
682-683, 691, 777.  Of the 20 Boeing employees who received such
payments between 1962 to 1982 (petitioner Jones left twice and
received a payment each time), 15 went to the Department of Defense
and two went to NASA.  The average payment made to those individuals
was approximately $40,000.  The average payment to the remaining three
individuals was $6500.  Those three accepted positions as (1) as a
staff member of a congressional aeronautical and space science
committee, (2) Assistant Secretary of Commerce for Science and
Technology, and (3) Staff Leader of Aeronautical Research at the
National Aeronautics and Space Council, Office of the President.  At
least 15 other individuals left Boeing for jobs with the federal
government during the same period without receiving a severance
payment.  Only two of those individuals accepted positions with the
Department of Defense, neither in a research-and-development position.
 C.A. App. 61-64.

   /4/ Some of the individuals also submitted a calculation of the
value of vested benefits that they would lose upon leaving Boeing.
However, each individual ultimately received separate checks from
Boeing for the amounts to which all employees are entitled when they
resign or retire, including vested salary and benefits earned and
accrued (Pet. App. 4a).  The government did not challenge those
payments because they were made pursuant to a policy of general
applicability and because they were based on past services the
recipient actually performed for Boeing, not on his future employment
with the federal government.

   /5/ The individual petitioners contend (Individuals' Pet. 5 n.3)
that Wilson "determined the actual amounts to be paid on the basis of
what he decided was the proper reflection of the employees' years of
contribution to Boeing." Wilson testified, however, that he was not
acquainted with several of the recipients (C.A. App. 644), and he
therefore would not have been in a position to make an independent
assessment of their past contributions to the company.  Nor was Wilson
given any information concerning the employees' past services.  Wilson
made no changes in the amounts proposed to him, except to order that
petitioner Paisley's payment be reduced by a "present value"
calculation, reflecting the current value to Paisley of four years'
worth of supplements paid in advance.  C.A. App. 19, 529-531, 536,
649, 661.  Thereafter, Wilson approved a payment of $3,000 in addition
to the $180,000 previously approved for Paisley (who became a
government consultant pending the Senate's advice and consent to his
appointment), and the additional amount was explicitly "for salary
differential (difference between Govt't consulting and Boe(ing)
salary)" (Gov. Exh. 111, No. 697/100165).

   /6/ 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 the
district court's rulings on the statute of limitations issue, but made
clear that the government could not recover from both Boeing and the
individual petitioner in the case of the one payment for which
recovery from Boeing was not time-barred (Pet. App. 10a-12a).

   /7/ 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 suggestions for rehearing en
banc were denied by a 6-5 vote (id. at 30a-31a).

   /8/ Copies of the opinions of the Office of Legal Counsel cited in
the text were included in an addendum to the government's brief in the
court of appeals.  The opinions of the Office of Legal Counsel have
traditionally been an important source of guidance on matters of
government ethics.

   /9/ Accord, Op. Off. Legal Counsel 4 (Dec. 17, 1976) ("Payment of
the salary differential" between a government salary "and a higher
corporate salary" would "clearly constitute a 'supplementation of
salary' prohibited by 18 U.S.C. Section 209(a).")

   /10/ Roswell Perkins, the author of the article cited in the text,
was the chairman of the special committee of the Association of the
Bar of the City of New York that conducted a comprehensive study of
the federal conflict-of-interest laws, which in turn formed an
important part of the basis for Congress's revision of those laws in
1962.  See Conflict of Interest and Federal Service, at xii.  Mr.
Perkins was recognized by Congress as an important contributor to the
legislative process (see H.R. Rep. No. 748, 87th Cong., 1st Sess. 8
(1961)), and the article quoted in the text is often cited as a
contemporaneous and authoritative explanation of the 1962 revision.

   /11/ A Boeing document accompanying the recommendation that
petitioner Kitson receive a payment notes that his "job with the DOD
is viewed as bigger than Crandon's -- (and) has greater influence
relative to BAC (Boeing Aerospace Company)" (C.A. App. 58).  The
President of Boeing Aerospace recommended a payment to petitioner
Reynolds based on the fact that he "will hold a key job" (C.A. App. 50
(emphasis in original)).  The President recommended a payment to
petitioner Jones based on his view that "having someone with (Jones')
views will be helpful to us while he is in Washington, D.C." (C.A.
App. 18 (emphasis in original)), and he stated that he would support a
payment to petitioner Crandon if there was any finding that Crandon's
"assignment would benefit BAC (Boeing Aerospace Company)" (Gov. Exh.
114, No. 002750/100405).  Finally, Boeing documents reveal some
internal doubt about whether petitioner Paisley's government
appointment would be approved, and a Boeing Senior Vice President
therefore recommended a payment to Paisley only "if Paisley ends up as
a govt official or as consultant" (C.A. App. 40).

   Contrary to Boeing's contention (Boeing Pet. 7), the government did
not "stipulate" that "no actual conflict of interest occurred."
Although petitioners sought to have the government stipulate that it
would not contest the "fact" that the individual petitioners did not
provide any preferential treatment to Boeing in return for the
payments, the government refused to do so.  Nevertheless, this "fact"
was included in a document, not signed by the government, that was
entitled "Joint Stipulations of Uncontested Facts," filed by
petitioners with the district court, and included in the joint
appendix on appeal (C.A. App. 330-345).

   /12/ Four of the five individuals were required to file SF-278
financial disclosure forms, which are reviewed by ethics officers.
The court of appeals found that none of those forms separately
disclosed the severance payments (Pet. App. 9a).  Petitioners argue
that because the instructions for the forms did not direct them to
list such payments separately from their salary and other income,
their duty of full disclosure was satisfied by their aggregating the
payments with other income from Boeing.  Petitioners also claim that
because ethics officers reviewed the completed forms, and certified
that the disclosed information showed no potential conflict of
interest, they were absolved of any liability.  See Individuals' Pet.
20-21.  The court of appeals correctly rejected these
rationalizations.  The fact that the individual petitiornes complied
with instructins for reporting total income on the financial
disclosure forms does not mean that they brought the nature of the
severance payments to the attention of appropraite government
officials in an way that would enable the latter to pass on their
legality.

   /13/ Petitioners also point to the testimony that the payments were
designed to "avoid a conflict of interest" by "sever(ing) all * * *
financial ties" with the Company (Boeing Pet. 5).  The payments were
not, however, necessary to sever any ties with Boeing.  The individual
petitoners received the value of vested and accrued benefits in
separate checks that were not challenged in this case.  By contrast,
the individual petitioners had no pre-existing entitlement to the
payments at issue here, and it therefore was not necessary for Boeing
to make them, or for the individual petitioers to receive them, in
order to sever ties with Boeing.

   /14/ Petitioners assert (Individuals' Pet. 23) that the court of
appeals did not address the trial court's finding that they had no
compensatory intent in receiving the payments (Pet. App. 8a).  In
fact, however, the court of appeals did separately address the issue
of the individuals' intent.  The court specifically stated that the
individual petitioners had "calculated salary, benefits and
cost-of-living differences over the expected term of government
employment" and submitted those calculations to Boeing (ibid.),
thereby showing that they understood that the payments were to be made
because of their federal service and on the basis of their federal
salaries.  The court of appeals also noted that the employees had
received a separate payment for their vested benefits (id. at 4a),
thereby refuting the individual petitioners' contention that they
believed that the challenged payments were intended to compensate them
for vested benefits.