Appendix B, at 241. As noted earlier, several documents reflecting the purpose and discussion of this June 19 meeting confirm Mr. Mancuso's recollection that the Haney team, including Mr. Sasser, sought GSA's agreement to particular lease changes that would facilitate Mr. Haney's financing plan. Appendix A, at 18, 120-122. Although Mr. Haney claimed that the $1 million agreement covered only Mr. Sasser's services on the financing for the Portals, other portions of Mr. Haney's testimony confirm Mr. Mancuso's understanding, namely that Mr. Haney believed this contingency agreement superseded the earlier written retainer between him and Mr. Sasser, which covered Mr. Sasser's work on all Haney-related matters. Appendix A, at 11-12, 220; Appendix C, at 312. Further, while there is evidence that Mr. Sasser met with government officials to discuss lease changes and the reasons for the FCC opposition, there is no evidence that Mr. Sasser ever worked on the actual loan transaction between Mr. Haney's company and the Portals partnership -which is the triggering condition stated in the $1 million agreement.63 Indeed, Mr. Sasser could not even identify the loan transaction upon which his agreement with Mr. Haney was expressly conditioned: 63 As noted earlier, Mr. Sasser did meet with the bond underwriters on several occasions, but their role was to sell bonds backed by the GSA lease. The proceeds from those bond sales were then used by Mr. Haney to make the construction loan to Parcel 49C, in a separate transaction that triggered the $1 million payment. But, notably, Mr. Sasser was not paid upon the sale of the bonds by the underwriters. It appears clear from the above colloquy, and the other evidence discussed above, that Mr. Sasser knew very little about the "financing" except that it would be secured by GSA lease payments on the Portals. Thus, the particular triggering condition for the $1 million payment -- the closing of the $100 million loan -- was relevant to the agreement between Mr. Haney and Mr. Sasser because Mr. Sasser was being compensated for his efforts, and those of others, in obtaining GSA's agreement to certain lease changes." 64 Whether the $1 million payment was a contingency fee, conditioned upon GSA's agreement to Mr. Haney's desired lease amendments, can be determined by asking whether Mr. Sasser would have received the $1 million payment if GSA had not agreed to the lease changes sought by Mr. Haney. The evidence conclusively points to only one answer: he would not have received the $1 million. As Mr. Sasser himself admitted, "if there's no [GSA] lease, there's no loan," and if there were no loan, there would not have been any $1 million payment. Appendix C, at 240, 275.65 Indeed, it was the GSA lease payments, under the conditions and terms negotiated in the supplemental lease amendments agreed to by GSA in January and March of 1996, that were the collateral and security backing the bond sales and the eventual loan to Parcel 49C -- a loan that was conditioned expressly upon these GSA lease changes. Appendix A, at 38-39, 64-92, 485-510. Thus, the attempts by Mr. Haney and Mr. Sasser to draw an artificial line between the financing and 64 65 The contingency fee statute does not require that the fee be compensation only for efforts to secure a Federal contract; rather, so long as the fee is at least in part for such prohibited services, the statute comes into play. See, e.g., Browne v. R&R Engineering Co., Inc., 264 F.2d 219 (3d Cir. 1959) (contingent payment for multiple services held to violate statute in part because it included assistance with gaining invitation to bid) (citing cases). Mr. Sasser also testified that he believed the deal would not have gone forward without securing the necessary Standard and Poor's rating, which was conditioned upon GSA's agreement to these supplemental lease amendments. Appendix C, at 259. leasing aspects of the deal are not only misleading, but apparently designed to defend themselves against a charge that their arrangement violated Federal law.66 The other apparent defense asserted by Mr. Haney and Mr. Sasser -- that their agreement did not violate the bar against contingency fees on Federal contracts because Mr. Sasser was not paid upon the signing of the final lease amendments, but rather was paid upon the closing of the loan transaction -- is an overly technical and legalistic interpretation of 41 U.S.C. § 254(a) that is not supported by the statutory language and violates the clear intent of the statute. Putting aside the fact that the signing of the lease amendments and the loan closing occurred on the very same day -March 26, 1996 -- the plain language of the statute simply does not require that the final triggering event be the signing of the Federal contract per se. Rather, the only reasonable reading of the statute, consistent with its clear intent, is that some favorable government contractual action must be a condition precedent to receipt of the fee, which is clearly the case here. Accordingly, GSA and/or the Department of Justice should take immediate steps to recover the $1 million fee from Mr. Haney or Parcel 49C or deduct that amount from its contractual obligations to the partnership, as authorized by statute and regulation. GSA also should suspend Mr. Haney from contracting with the government in the future, as permitted by regulation. For the reasons discussed earlier with respect to the contingent fee arrangement between Mr. Haney and Mr. Knight (Report Section IV, supra), it appears that Mr. Haney may have violated the False Statements Act, 18 U.S.C. § 1001, and/or the False Claims Act, 31 U.S.C. § 3729, by causing a false statement to be filed with the government with respect to his partnership's contingent fee relationships. Accordingly, there is sufficient evidence to warrant investigation by the Department of Justice. In enacting 18 U.S.C. § 203, Congress sought to prevent conflicts of interest in government decision making by prohibiting all government officers and employees from receiving compensation in connection with proceedings involving the government. Specifically, the statute provides, in relevant part, as follows: Whoever... demands, seeks, receives, accepts, or agrees to receive - 66 Several witnesses testified that similar deals had been closed by Mr. Haney without obtaining these particular lease changes, that the GSA lease changes were not absolutely necessary to the deal, and that Mr. Haney may have gone forward with the bond sale and loan even without GSA's agreement to these changes -- if, of course, the investment community would be willing to take the greater risk and Mr. Haney could still make a profit. See, e.g., Appendix B, at 12-13. These hypothetical opinions, however, are contradicted by other testimony and documents that clearly show that these lease changes were necessary for this particular deal to move forward. See Report Section II, supra. They also do not alter what actually occurred on this deal. Further, the Portals project was definitely unique -- given that the government already had once defaulted on the lease -- and thus the requested lease changes likely were more important to investors in this case than they would be in other situations. See Appendix B, at 244-246. at a time when such person is an officer or employee or Federal judge of the United States... in relation to any proceeding... contract, controversy... or other particular 18 U.S.C. § 203(a). Section 216(a) of Title 18, in turn, provides that willful violations carry five years imprisonment and/or fines, while non-willful violations carry a one year prison term and/or fines. Moreover, the Department of Justice has authority to pursue civil prosecution resulting in a fine equal to the unlawful compensation received. 18 U.S.C. § 216 (b). The evidence gathered by the Committee and the language and intent of Section 203 strongly suggest that Mr. Sasser violated this provision by agreeing to receive and actually receiving compensation as a result of the successful closing of the Portals project, while he was an official and employee of the U.S. government. First, there is no dispute that Mr. Sasser received the $1 million payment from Mr. Haney at a time when he was a government official, in April 1996. Second, at the time he and Mr. Haney made this contingency contract in writing (January 1996), Mr. Sasser was a government official. While all of Mr. Sasser's own efforts to influence GSA agreement to the Portals lease changes had been completed by that time (Appendix C, at 237, 248, 262, 269-271), it was clear at the time that others would have to continue to make efforts to close the Portals deal after Mr. Sasser joined the government, including efforts directed at a Federal agency, GSA." Thus, Mr. Sasser was, quite explicitly, agreeing to receive compensation for services "to be rendered," "by another," at a time when he was an officer of the United States. In fact, Mr. Wagster, and possibly others, did continue to render such services by writing to, meeting with, and negotiating with the GSA contracting officer during early 1996 in order to obtain GSA's agreement to lease changes that were critical to closing the loan, which in turn triggered and funded Mr. Sasser's $1 million fee." 68 or other Third, the phrase "in relation to any proceeding... contract, controversy . particular matter in which the United States is a party or has a direct and substantial interest" clearly describes the Portals project. It was to be financed by selling bonds guaranteed by a Federal lease. Its closing depended on GSA signing a lease acceptable to the bond underwriters and rating agencies. The Federal government also had to sign a subordination agreement that was a condition precedent to the closing of the loan. Finally, the GSA lease payments were the collateral and security backing the Portals bonds and the partnership's loan from Mr. Haney. Fourth, the statutory requirement that the representation occur "before any department or agency" of the Federal government is satisfied by the necessary representations made by Mr. Wagster and others to GSA in order to close the Portals deal. See, e.g., Appendix B, at 210-212. 67 68 Mr. Sasser testified to as much, stating that, at the time he made the agreement with Mr. Haney, he never thought the deal would close. Appendix C, at 260. While the 1962 revision to this statutory prohibition was enacted, in part, to make clear that it did not apply to compensation received for services that had been wholly completed prior to the official's entry into government service, the legislative history also makes clear that the revision was not designed to exempt compensation that an employee would receive only by virtue of services performed (by him or another) after he entered the government. See H.R. Rep. No. 87-748, at 9, 20 (1961); Staff of Subcomm. No. 5 of the House Comm. on the Judiciary, 85th Cong., Federal Conflict of Interest Legislation, pts. I and II, at 49 (Comm. Print 1958) (the proposed revision "would continue to affect officials who enter the Government as owners of, or who subsequently acquire, unliquidated or contingent interests in matters and proceedings in which the United States is interested"). Thus, each of the statutory elements constituting a violation of this section clearly appears to be met in this situation. Finally, it is the clear intent of the statute that an agreement such as that between Mr. Haney and Mr. Sasser should be unlawful. Congress enacted the original criminal conflict of interest statute in 1864 -- over 100 years ago -- and its basic prohibitions have remained unchanged since that time. The goal then was, as it remains today, to ensure that government officials would not have any financial motive or incentive to influence the outcome of a government proceeding, that government decisionmaking would not be affected by the fact or knowledge that some government official possesses an interest in the proceeding's outcome, and that the integrity of the government would not be undermined by even the appearance of unethical conduct on the part of its officials." Clearly, with $1 million at stake, Mr. Sasser had an enormous personal financial interest in GSA agreeing to the lease changes being demanded by his client, Mr. Haney. Similarly, officials at GSA already knew that Mr. Sasser had represented Mr. Haney, creating the very real danger that this knowledge could have affected the government's decisionmaking on the Portals or in some way biased the proceeding. In short, both the language and intent of 18 U.S.C. § 203 are meant to prohibit the very type of compensation agreement agreed to by Mr. Sasser in this case, and thus the evidence certainly warrants further investigation by the Department of Justice.70 At several points in his testimony, Mr. Sasser made certain statements concerning his lack of involvement with respect to the supplemental lease amendments agreed to by GSA. In particular, he testified that he "didn't do any work on the lease" (Appendix C, at 248), and that he "never did anything on the lease." Appendix C, at 262; see also Appendix C, at 275. When confronted with documentation showing that he attended meetings with GSA officials at which lease changes were discussed, Mr. Sasser testified that he merely "sat and listened to what was being said, here again in an effort to determine if this was a viable business opportunity on which we could secure financing." Appendix C, at 263. Later in his testimony, he attempted to clarify his testimony in this regard by acknowledging that he was in meetings where the lease was discussed, but that he "never attended a meeting where I discussed the lease and where the lease was sort of the primary focus of the meeting." Appendix C, at 281-282. There is substantial reason to believe these statements were false, and knowingly so. The documentation and/or testimony relating to the meeting Mr. Sasser attended in the Office of the GSA Regional Administrator on June 19, 1995, confirms two facts -- first, that the "primary focus" of this meeting was, without any doubt, whether GSA would agree to specific lease changes to facilitate the financing of this project, and second, that Mr. Sasser at least led off the discussion at this meeting by explaining the reason the Haney team was there namely, to discuss lease changes. See Appendix A, at 18, 120-122; Appendix B, at 241-242. - Thus, Mr. Sasser's assertions that he sat quietly through this meeting and personally did not discuss the lease appear to have been false, as well as his related assertions that he did not attend any 69 70 For a discussion of the statute's legislative history and purpose, see generally When questioned about the application of this statute during his testimony, Mr. |