Moore v. United States

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

WILLIAM G. MOORE, JR.,

Plaintiff,

v. Civil Action No. 92-2288

Judge Beryl A. Howell

MICHAEL HARTMAN, et al.,

Defendants.

WILLIAM G. MOORE, JR.,

Plaintiff,

Civil Action No. 93-0324

v. Judge Beryl A. Howell

(Consolidated Cases)

UNITED STATES OF AMERICA,

Defendant.

TABLE OF CONTENTS

I. BACKGROUND ................................................................................................................ 5

Factual Overview ................................................................................................................ 5

Procedural History ............................................................................................................ 10

1. Plaintiff’s Initiation of Two Lawsuits ........................................................................ 11

2. Key Judicial Decisions ............................................................................................... 12

3. Pre-Trial Motions in Limine ....................................................................................... 26

4. Trial ............................................................................................................................ 27

II. LEGAL STANDARDS .................................................................................................... 29

Law Applicable to FTCA Claim ....................................................................................... 29

1. Federal Rule of Civil Procedure 52(a) Applicable to Findings and Conclusions

by the Court....................................................................................................................... 30

Federal Rule of Civil Procedure 59 Applicable to Plaintiff’s Motion for New Trial ....... 31

III. FINDINGS OF FACT FOR PLAINTIFF’S FTCA CLAIM ............................................ 34

Initiation and Progression of Investigation into Illegal Scheme ....................................... 34

1

1. Brief Overview of Pertinent Components of USPS ................................................... 34

2. USPS Automation Program ........................................................................................ 36

3. Summer of 1985 Initiation of Investigation of BOG Vice Chairman Voss ............... 39

4. Plaintiff and REI’s Dealings with USPS Through Summer 1985 .............................. 44

Investigation of Plaintiff ................................................................................................... 52

1. November 1985 Interview with AEG Officials .......................................................... 53

2. November 20, 1985 Interview of Plaintiff and Subordinates ..................................... 54

3. Postal Inspectors Learn of Relationship between REI and GAI ................................ 55

4. January 6, 1986 Firing of Postmaster General Carlin ................................................ 56

5. Postal Inspection Service Request for Initiation of Grand Jury Investigation ........... 57

6. April 1986 Confession of William Spartin About Illegal Scheme ............................. 59

7. April 8, 1986 Postal Inspector Interview with Plaintiff’s Subordinates ..................... 62

8. May 1986 Guilty Plea and Cooperation by Vice Chairman Voss .............................. 63

9. July 25–26, 1986 Follow-up Interviews of Plaintiff and Subordinates and Review

of Plaintiff’s Notebooks .................................................................................................... 68

10. Subsequent Interviews of Co-Conspirators ................................................................ 70

Consideration of Indictment by D.C. U.S. Attorney’s Office .......................................... 80

Plaintiff’s Alleged Damages ............................................................................................. 85

IV. CONCLUSIONS OF LAW ON PLAINTIFF’S FTCA CLAIM ...................................... 90

Postal Inspectors Did Not Procure Indictment Against Plaintiff ...................................... 91

1. Postal Inspectors Did Not Violate Rule 6(e) .............................................................. 93

2. Mr. Spartin’s Testimony Did Not Cause Indictment of Plaintiff ............................. 107

3. Interview Summaries Did Not Cause Mr. Spartin to Implicate Plaintiff ................. 108

4. Mr. Spartin’s Opinion Did Not Procure Indictment ................................................. 111

Plaintiff Failed to Prove Absence of Probable Cause ..................................................... 113

1. Plaintiff Has Not Rebutted Indictment’s Presumption of Probable Cause ............... 115

2. Indictment Against Plaintiff Was Supported by Probable Cause ............................. 120

Postal Inspectors Did Not Act With Malice ................................................................... 123

1. Alleged USPS Animosity Towards REI and Plaintiff .............................................. 127

2. Initiation of Investigation of REI and Plaintiff Was Warranted ............................... 131

3. Subpoenas Issued to REI .......................................................................................... 134

4. Documents Prepared by Postal Inspectors................................................................ 137

FTCA Judgment Entered in Favor of United States ....................................................... 145

V. THE FTCA JUDGMENT BAR ...................................................................................... 146

VI. MOTION FOR NEW TRIAL ......................................................................................... 149

2

Procedural Rulings Prior to Trial .................................................................................... 150

Evidentiary Rulings ........................................................................................................ 153

1. Exclusion of Indemnification Evidence ................................................................... 153

2. Exclusion of Prior Judicial Opinion ......................................................................... 160

3. Plaintiff’s Country Club Membership ...................................................................... 164

4. Admission of Hearsay Evidence............................................................................... 167

Jury Instructions .............................................................................................................. 172

1. Concert of Action Instruction ................................................................................... 172

2. Probable Cause Instruction ....................................................................................... 176

3. Inducement Instruction ............................................................................................. 178

Judicial Conduct.............................................................................................................. 186

1. Questioning of Witnesses ......................................................................................... 187

2. Instruction Concerning Deposition Questions .......................................................... 188

3. Instruction Following Summation ............................................................................ 189

VII. CONCLUSION ............................................................................................................... 194

MEMORANDUM OPINION

Over twenty years ago, the plaintiff, William G. Moore, Jr., filed these consolidated cases

after his acquittal on serious felony charges. The ensuing years of litigation generated no fewer

than sixteen judicial opinions and, more recently, a four-week concurrent jury and bench trial, in

which the plaintiff sought over $235,000,000 for lost compensation, emotional and reputational

damages. The jury returned a verdict for the defendants. The plaintiff now seeks a new jury trial

on his claim against four living and one deceased former United States Postal Inspectors for

retaliatory inducement to prosecution, under Bivens v. Six Unknown Fed. Narcotics Agents, 403

U.S. 388 (1971), Pl.’s Mot. for New Trial (“Pl.’s Mot.”), Case No. 92-2288, ECF No. 511, and

judgment in his favor on his claim against the United States for malicious prosecution, under the

Federal Tort Claims Act (“FTCA”), 28 U.S.C. §§ 2671 et seq. See generally Pl.’s Proposed

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Findings of Fact (“Pl.’s FOF”), ECF No. 126-1; Pl.’s Proposed Concl. of Law (“Pl.’s COL”),

ECF No. 127.

Other Judges on this Court previously dismissed the plaintiff’s Bivens claim against the

Postal Inspectors twice and his FTCA claim against the United States three times, but the two

claims at issue at trial and addressed in this Memorandum Opinion were revived each time on

appeal. See Moore v. Hartman, Nos. 92-CV-2288 (NHJ), 93-CV-0324 (NHJ), 1993 WL 405785

(D.D.C. Sept. 24, 1993) (1993 Decision) (granting motion to dismiss the plaintiff’s Bivens and

FTCA claims), aff’d in part, rev’d in part sub nom. Moore v. Valder, 65 F.3d 189 (D.C. Cir.

1995) (Moore I) (affirming dismissal of Bivens malicious prosecution claim, reversing dismissal

of Bivens retaliatory prosecution claim and dismissal of FTCA claim); Moore v. Valder, No. 92-

CV-2288, Mem. Op. (D.D.C. Feb. 5, 1998) (1998 Decision) (denying summary judgment on

Bivens claim against the Postal Inspector defendants, granting summary judgment on the Bivens

claim against federal prosecutor, and granting summary judgment on the FTCA claim against the

United States), aff’d in part, rev’d in part sub nom. Moore v. United States, 213 F.3d 705 (D.C.

Cir. 2000) (Moore II) (affirming dismissal of Bivens retaliatory prosecution claim against federal

prosecutor and FTCA abuse of process claim against the United States, and reversing dismissal

of FTCA malicious prosecution claim against United States); Moore v. Hartman, 569 F. Supp.

2d 133, 137 (D.D.C. 2008) (2008 Decision) (granting summary judgment on the Bivens claim

against the Postal Inspectors and the FTCA claim against the United States), rev’d, Moore v.

Hartman, 644 F.3d 415, 426 (D.C. Cir. 2011) (Moore V) vacated sub nom. Hartman v. Moore,

547 U.S. 250 (2012) (vacating Moore V and remanding); Moore v. Hartman, 704 F.3d 1003

(D.C. Cir. 2013), cert. denied, 547 U.S. 250 (2013) (Moore VI) (reinstating Moore V). This

prolonged procedural history is set out below, after a brief overview of these cases, to provide

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context, first, for the factual findings and legal conclusions reached by this Court on the

plaintiff’s FTCA malicious prosecution claim against the United States and, second, for

resolution of the plaintiff’s motion for a new trial on his Bivens retaliatory inducement to

prosecution claim against five former Postal Inspectors.

For the reasons discussed below, the Court reaches the same conclusion as the jury that

heard the plaintiff’s Bivens claim: The plaintiff has failed to prove, by a preponderance of the

evidence, his FTCA claim of malicious prosecution by the United States. Moreover, the plaintiff

is not entitled to un-do the jury verdict against him and re-do in a new trial his Bivens claim for

retaliatory prosecution against the former Postal Inspectors.

I. BACKGROUND

Set out below is a brief overview of the factual background underlying these cases as

well as a summary of the lengthy procedural history.

Factual Overview

In November 1989, another Judge on this Court granted the plaintiff’s motion for a

directed verdict of acquittal, under Rule 29 of the Federal Rules of Criminal Procedure, on

criminal charges, inter alia, that he engaged in a conspiracy to defraud the United States, in

violation of 18 U.S.C. § 371. United States v. Recognition Equip., Inc., 725 F. Supp. 587, 587-

88 (D.D.C. 1989). Rather than end the litigation between the parties, however, the plaintiff’s

acquittal triggered over twenty years of continuing litigation culminating in the concurrent bench

and jury trial before this Court.

As detailed in the factual findings set out in Part III, infra, in July 1985, the Chief Postal

Inspector opened an investigation into possible corruption at the highest level of the United

States Postal Service (“USPS”). Over the course of the next three years, Postal Inspectors

uncovered an illegal bribery and kickback scheme in which Peter Voss, the Vice Chairman of the

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USPS Board of Governors (“BOG”), took bribes from an outside consulting group to use his

influence on a key subcommittee of the BOG to award a sole source contract for up to

$400,000,000, to the consultants’ client. If the scheme were successful, the Vice Chairman

expected a percentage kickback from the sole source contract. The consultants’ client and the

source of the bribe monies paid to the BOG Vice Chairman was Recognition Equipment, Inc.

(“REI”), a Dallas, Texas company headed by the plaintiff.

When the plaintiff took over as Chief Executive Officer (“CEO”) of REI in 1982, he

initiated a multi-pronged campaign to increase the company’s business with USPS and,

specifically, to obtain a sole source contract from USPS for the purchase of REI’s mail sorting

equipment, which used a different technology than that widely deployed by USPS. As part of

what the plaintiff himself described as “aggressively pursu[ing] [the] contract,” 6/25/14 AM Tr.

at 97,1 the plaintiff (1) met with the highest management levels within USPS, including the

Postmaster General and BOG members; (2) engaged members of the Texas congressional

delegation to pressure USPS to alter its choice of mail-sorting technology and to introduce a bill

designed to make REI the sole procurement contract winner; (3) testified before congressional

committees and contributed to press reports critical of USPS’s mail-sorting technology; and (4)

hired, internally to REI, a new Vice President of Sales and Marketing, Robert W. Reedy, who

was subsequently indicted with the plaintiff, to enhance the company’s government contracting

effort, as well as outside consultants to facilitate obtaining USPS contracts. At the

recommendation of, and under pressure from, the corrupt BOG Vice Chairman, the plaintiff

hired a small, Detroit-based consulting group, called Gnau and Associates, Inc. (“GAI”), at rates

1

Citations to the transcript of the trial, held from June 23, 2014 to July 21, 2014, include the trial date,

morning or afternoon session, transcript page and the witness, where not otherwise clear from the context of the

sentence. Only portions of the trial transcripts are filed on the docket and, consequently, no ECF number is

provided for the transcripts. See generally Dkt. Case No. 92-2288.

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and terms far more expensive than comparative arrangements with REI’s other outside

consultants. The plaintiff’s aggressive efforts to obtain a sole source contract for USPS mail-

sorting equipment has been the centerpiece of his theory that he was targeted for prosecution due

to his First Amendment protected activities. The public aspect of his campaign may have also

made him an obvious target for the corrupt BOG Vice Chairman as a potential source of illegal

payments, in return for steering to REI the USPS business so publicly and aggressively sought by

the plaintiff.

In April 1986, a GAI employee, William Spartin, entered into a cooperation and non-

prosecution agreement and unveiled the illegal bribery and kickback scheme to the Postal

Inspectors. The following month, in May 1986, the BOG Vice Chairman pleaded guilty to

criminal charges arising from his receipt of illegal payments from GAI, which had served as the

conduit to funnel fees paid to GAI by REI to the BOG Vice Chairman. In the ensuing months,

two additional co-conspirators from GAI, John Gnau and Michael Marcus, pleaded guilty, in

October 1986 and January 1987, respectively, to charges relating to the illegal scheme.

Rather than rest on their laurels with the revelation of the illegal bribery and kickback

scheme and the successful convictions of three co-conspirators, the Postal Inspectors, under the

direction of the Chief Postal Inspector, continued their investigation by following the corrupt

money to its source. This led the Postal Inspectors directly to REI, which had retained the

convicted consultants under a lucrative retainer arrangement and which stood to benefit from the

sole source contract that was one of the goals of the illegal scheme. As the plaintiff himself

admitted during his testimony in this case, the connection between the conspirators and his

company, REI, “looked suspicious,” 6/25/14 AM Tr. at 24, and presented such a “lousy set of

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circumstances,” id. at 25, that even the plaintiff agreed the investigation of REI and himself

“would certainly be justified by the circumstances,” id. at 26.

Between the time of the guilty pleas of three co-conspirators in the illegal scheme and

October 1988, Postal Inspectors collected additional documentary and other evidence, which

they presented to the U.S. Attorney’s Office for the District of Columbia (“DC USAO”) in

support of an indictment of the plaintiff, REI and Mr. Reedy. The DC USAO spent over a year

considering whether to indict the company and two of its officers, holding at least seventeen

internal meetings about this issue and providing defense counsel for the plaintiff and his co-

defendants the opportunity to present, in writing and orally, reasons against an indictment.

Nevertheless, after a meeting on September 22, 1988, between the then-U.S. Attorney for the DC

USAO and defense counsel, the U.S. Attorney approved the indictment. Less than a month after

this meeting, in October 1988, the grand jury returned the indictment, charging REI, the plaintiff

and Mr. Reedy as co-conspirators in the illegal scheme.

As noted, the plaintiff and his co-defendants were acquitted at the criminal trial after the

trial court concluded that the government had presented insufficient evidence in its case-in-chief

“to establish a prima facie case that the Defendants conspired to defraud the United States.”

Recognition Equip., Inc., 725 F. Supp. at 587. Notably, in what may have been a strategic

blunder, the trial prosecutor, former Assistant U.S. Attorney (“AUSA”) Joseph Valder testified at

the trial of the instant matter that he had held back evidence regarding a substantial number of

missing pages from the notebook, labeled “Postal,” in which the plaintiff recorded notes about

the USPS contracting effort, from the government’s case-in-chief and, consequently, this

evidence was not before the trial court for consideration during resolution of the Rule 29 motion

for a judgment of acquittal. 7/17/14 AM Tr. at 30 (Valder testifying: “we had made a conscious

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judgment not to introduce in our case in chief in the criminal trial the fact of missing—Mr.

Moore’s missing pages from his ‘Postal’ notebook. It’s a litigation strategy to hold it back for

what we expected to be a vigorous cross-examination of Mr. Moore. So Judge Revercomb

didn’t have that fact before him or that set of information, but that was huge in the inspectors’

judgment, the reviewers’ judgment that Mr. Moore or someone under his direction or someone at

the corporation had intentionally torn out” pages from his notebook). These missing pages from

the plaintiff’s notebook raised significant suspicion, due to information that participants in the

illegal conspiracy had purged their files to cover-up their illegal scheme. 7/11/14 AM Tr. at 37-

38 (Hartman testimony); 7/14/14 PM Tr. at 69 (Kormann testimony).

Following his acquittal, the plaintiff has relentlessly pursued damages claims against five

Postal Inspectors, who had varying degrees of involvement in the investigation of the illegal

bribery and kickback scheme, and against the United States. From the plaintiff’s perspective, his

five years of service in the U.S. Army and six years of service as CEO of a relatively small

public company2 were poised to catapult him into a future career as CEO of a Fortune 100 or 500

company and for eligibility to be Secretary of Defense. 6/25/14 AM Tr. 62, 64. These career

aspirations were quashed, according to the plaintiff, because of his indictment and warranted the

damages he sought of over a quarter billion dollars.3 The past twenty-five years of consideration

2

At the time the plaintiff served as CEO of REI, the company was not on the “Fortune 500” list of the

largest publicly traded companies, according to the plaintiff’s own damages expert, who computed the plaintiff’s

potential compensation loss from REI based upon rankings of companies smaller than those on the Fortune 500 list.

See 6/27/14 AM Tr. at 40-41 (Dr. Fanara testifying that the damages requested for lost compensation were

reasonable because the number was within the range of what CEO’s were making at Fortune 800 companies until

1999 and then Fortune 500 companies from 2000-2004).

3

This damages claim was less than half the amount of up to $688,636,410 initially requested by the

plaintiff, who also sought reputational, emotional, physical distress and punitive damages on top of that amount. See

Pre-Trial Statement, Pl.’s Itemization of Damages from Defs., at 9-8, ECF 438. Plaintiff’s counsel reduced the

damages claim during consideration of the defendants’ pretrial motion to exclude evidence regarding the plaintiff’s

stock-related damages. Pl.’s Supp. Mot. in Limine, at 1, ECF 480 (stating “in an effort to streamline his damages

case, Moore is no longer seeking to recover as damages the loss in value of the shares of REI stock that he owned at

the time of his indictment”). With respect to the reduced damages claim of over a quarter billion dollars, the

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of the plaintiff’s claims by the District Courts of the Northern District of Texas and the District

of Columbia, the Court of Appeals for the D.C. Circuit on six separate appeals, and the U.S.

Supreme Court on two appeals, left two claims for trial: the plaintiff’s Bivens claim for

retaliatory inducement to prosecution against five Postal Inspectors and an FTCA action for

malicious prosecution against the United States.

Procedural History

Two years after his acquittal, the plaintiff filed, in the Northern District of Texas, a

Bivens action for retaliatory prosecution against six Postal Inspectors and the AUSA who

represented the government at trial, and an FTCA action against the United States. From the

initiation of these lawsuits through 2008, two separate Judges on this Court concluded that the

plaintiff’s claims should be summarily resolved in favor of the defendants. See 1993 Decision

(Holloway Johnson, J.); 2008 Decision (Urbina, J.). Each time, the district court’s summary

disposition rulings in favor of the defendants on the two claims at issue in the trial were reversed

by the D.C. Circuit. See Moore I; Moore II; Moore IV. After the second remand, the district

court denied the defendants’ motion for summary judgment, Moore v. Hartman, Case No. 92-

2288, Order, dated Aug. 8, 2003, ECF No. 283, and reconsideration with respect to the FTCA

claim, Moore v. Hartman, Case No. 92-2288, dated Aug. 30, 2004, ECF No. 296, which

decisions were affirmed on appeal, see Moore IV. The Supreme Court, however, vacated the

appellate decision and remanded the case to the D.C. Circuit for further consideration in light of

a decision in an unrelated case. Hartman, 132 S. Ct. 1740. Upon reconsideration, the D.C.

Circuit, in 2013, reinstated its prior 2011 holding, see Moore VI, prompting this matter to

proceed to trial on the plaintiff’s Bivens retaliatory inducement to prosecution claim against the

plaintiff elicited testimony from his proffered damages expert that this damage calculation represented a “very

conservative number.” 6/27/14 AM Tr. at 40 (Dr. Fanara testimony).

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Postal Inspectors and his FTCA malicious prosecution claim against the United States. After

hearing four weeks of evidence, the jury returned a verdict in favor of the defendant Postal

Inspectors on the plaintiff’s Bivens retaliatory prosecution claim.4 See Jury Verdict, ECF No.

507.

This procedural history is more fully discussed below.

1. Plaintiff’s Initiation of Two Lawsuits

In November 1991, the plaintiff and his wife, Blanche K. Moore, filed a civil action in

the United States District Court for the Northern District of Texas against six Postal Inspectors

and an AUSA.5 None of these defendants were senior level managers or even supervisors within

the USPS, the Postal Inspection Service or the DC USAO but, instead, were front-line agents and

the trial prosecutor, who participated in the investigation and prosecution of the perpetrators of

the illegal scheme. Although this complaint asserted five causes of action, only the Fifth Cause

of Action, under Bivens, for retaliatory prosecution due to the plaintiff’s exercise of his First

Amendment rights survived the subsequent years of litigation to reach a jury.6 This claim

4

The jury deliberations took approximately one day, with deliberations beginning late in the afternoon on

Friday, July 18, 2014 and concluding the next trial day, in the middle of the afternoon of Monday, July 21, 2014.

See 7/18/14 Tr. at 240 (noting that the jury retired to deliberate on Friday, July 18, at 3:28 p.m.); Jury Note 3 (stating

that the jury had reached a verdict, on Monday, July 21, 2014 at 3:15 p.m.), ECF No. 504.

5

This original Bivens complaint named the following seven defendants: AUSA Joseph B. Valder and six

Postal Inspectors, Michael Hartman, Frank Kormann, Robert Edwards, Pierce McIntosh, Daniel Harrington and

Norman Robbins. After the matter was transferred to this Court, Mr. Harrington was terminated as a defendant on

April 24, 1996, upon notice of his death. See Case No. 92-2288, Notice of Suggestion of Death, ECF No. 56

(defendant Harrington terminated on April 24, 1996). Although former Postal Inspector Norman Robbins is also

deceased, the plaintiff decided nevertheless to proceed against him at the jury trial with the substitution of Mr.

Robbins’ personal representative. See Pre-Trial Statement at 2 n.2, ECF No. 438. Given the duration of this

litigation, AUSA Valder and the Postal Inspectors named as defendants have been long retired from their respective

government jobs.

6

The district court in the Northern District of Texas winnowed down the plaintiffs’ Bivens claims by, inter

alia, dismissing Mrs. Moore’s claims, and then transferred the case to this Court, after concluding that personal

jurisdiction over the Postal Inspectors was lacking in Texas. See Moore v. Valder, et al., Civ. No. 3-91-cv-2491-G

(N.D. Tex. June 29, 1992), ECF No. 54; Moore, et al., Civ. No. 3:91-cv-02491-G (N.D. Tex. Sept. 21, 1992), ECF

No. 55.

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alleged that “the defendants attempted to punish Plaintiff William G. Moore, Jr., because he

directed criticism against the USPS, thereby depriving the Plaintiffs of their rights to free

expression and to petition the government for redress of grievances guaranteed by the First

Amendment of the United States Constitution.” Bivens Compl. ¶ 36 (“Fifth Cause of Action”),

Civ. No. 3:91-cv-02491-G (N.D. Tex. filed Oct. 14, 1992), ECF No. 1.

Shortly after the Bivens action was transferred to this Court, the plaintiff and his spouse

filed a second complaint in the Northern District of Texas seeking damages against the United

States under the FTCA for the same allegedly unlawful conduct with the identical causes of

action set out in the Bivens action. See FTCA Compl.; Moore, et al. v. United States, Civ. No.

3:92-cv-02129-R, at 2 n.1 (N.D. Tex.), Mem. & Order, dated September 21, 1992, ECF No. 55.

This case was also transferred to this Court and consolidated with the plaintiff’s Bivens action.

See Stipulated Order, Case No. 93-0324 (D.D.C. Mar. 3, 1993) (consolidating cases). Only the

Second Cause of Action for malicious prosecution in the FTCA complaint survived for trial.

2. Key Judicial Decisions

The plaintiff’s claims have received consideration from Judges and Justices at every level

of the federal judicial system, resulting in multiple judicial opinions. This body of case law

frames the issues for the conclusions of law on the plaintiff’s FTCA claim and evaluating the

plaintiff’s motion for a new trial on his Bivens claim, necessitating review of the key decisions in

this lengthy procedural history.

1993 District Court Dismissal of Claims

In 1993, the first Judge on this Court to consider the plaintiff’s claims dismissed both

suits. Specifically, the Court dismissed the plaintiff’s Bivens claim for malicious prosecution

against the defendant Postal Inspectors for failure to assert more than “bare allegations of

malice,” which were insufficient “to subject government officials either to the costs of trial or to

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the burdens of broad-reaching discovery.” 1993 Moore, 1993 WL 405785 at *3-4 (internal

quotations and citation omitted). As support for the plaintiff’s contention that he was prosecuted

to punish him for “aggressive lobbying” of the USPS and Congress to adopt REI’s technology

and “for suggesting qualified candidates for the position of Postmaster General,” the plaintiff

offered six sources of purported “direct evidence:” “(1) the complaint itself, (2) the indictment in

Moore’s criminal case, (3) the testimony of Frank Bray at Moore’s criminal trial, (4) Judge

Revercomb’s opinion entering a judgment of acquittal, (5) Moore’s own affidavit, and (6) an

affidavit executed by William Hittinger, a member of REI’s board of directors.” Id. at *4. The

district court found that the first five evidentiary sources amounted to indirect evidence

providing “only inferential proof of malice” insufficient to support the heightened standard

required for a Bivens action. Id. The last item of evidence, the Hittinger Affidavit, recounted a

lunch time conversation at which AUSA Valder and two of the defendant Postal Inspectors were

present. According to the affidavit, AUSA Valder allegedly stated “that the merits of the case or

whether the persons involved were guilty or not did not concern him. He explained that it was

important to him that he win the case because he wanted to get a track record or some notoriety

which would help him obtain a good position in private practice.” Id. at *5. This evidence could

not save the plaintiff’s malicious prosecution Bivens claim against the Postal Inspectors because,

although the court deemed this affidavit to be direct evidence of AUSA Valder’s alleged

improper motivation, “it provide[d] no evidence of the Inspectors’ intent.” Id. at *5 (“Nothing in

the affidavit suggests that the Inspectors shared [AUSA] Valder’s alleged motivations.”). Given

the insufficiency of the proffered evidence, the court dismissed the Bivens malicious prosecution

claim against the Postal Inspectors. Id. at *6.

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The court also dismissed the FTCA claims brought against the government, finding that

the claims of constitutional violations of the First Amendment and the Fifth Amendment were

barred by sovereign immunity since only common law tort claims were cognizable under the

FTCA, id. at *7, and the remaining common law claims for malicious prosecution, false arrest

and abuse of discretion were barred by the discretionary function exception to the FTCA, id. at

*9. In applying the discretionary function exception, the court examined the plaintiff’s

allegations of prosecutorial misconduct “relating to the presentation of evidence to the grand

jury,” “fail[ure] to disclose Brady material,” and that the “government harassed and intimidated

witnesses,” id. at 8, and concluded that the alleged misconduct was so “closely linked to the

exercise of prosecutorial discretion,” id., that “the discretionary function exception thus

exempt[ed] the United States from liability for all the common law claims alleged in both the

plaintiff[’s] lawsuits.” Id. at *9.7

Upon concluding that (1) the Bivens claims against the Postal Inspectors failed to meet

the heightened pleading standard required for malicious prosecution tort claims, (2) the claimed

constitutional violations against the United States were precluded by the FTCA, and (3) the

common law claims against the United States, under Bivens and the FTCA, were barred by the

7

The court looked behind the plaintiff’s hyperbolic characterization of the evidence noting, for example,

that the plaintiff’s allegation about the government’s “falsified” evidence, “did not involve the actual fabrication of

evidence, but instead merely refer[red] to the government’s failure to include exculpatory evidence in witnesses’

statements—the same conduct of which the plaintiff[] complain[s] elsewhere.” 1993 Decision, 1993 WL 405785, at

*8 n.4. The plaintiff argued strenuously against application of the discretionary function exception, contending that

failing to present exculpatory evidence did not fall within the discretionary function exception to liability because:

(1) “the United States Attorneys’ Manual states that a ‘prosecutor must . . . disclose such evidence to the grand

jury,’” id. at *8 n.5, and (2) even assuming the discretionary function exception applied to AUSA Valder’s conduct,

the Postal Inspectors were not shielded from liability for their independent actions, id. at *9 n.6. The court rejected

both arguments, explaining, first, that the Manual “provides only internal Department of Justice guidance” and “is

not intended to, does not, and may not be relied upon to create any rights, substantive or procedural, enforceable at

law by any party in any matter civil or criminal;” id. at *9 n.5; and, second, that “the relevant inquiry” was not

“which federal official carrie[d] out a given action, but whether the action implicates a discretionary function . . . no

matter whether the challenged decisions are made during the investigation or prosecution of offenses,” id. at * 9 n.6

(internal quotations and citations omitted).

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discretionary function exception, the court granted the defendants’ motions to dismiss the

consolidated actions brought by the plaintiff.

1995-2000 Appellate Reversal of First Dismissal of Claims,

Followed by District Court’s Second Dismissal of FTCA Claim

On appeal, the D.C. Circuit affirmed in part and reversed in part the 1993 Decision.

Moore I, 65 F.3d at 197. First, the D.C. Circuit affirmed the dismissal of the Bivens malicious

prosecution claim against (1) AUSA Valder since “absolute immunity shield[ed] Valder from

liability for the decision to prosecute Moore,” id. at 192, and (2) the Postal Inspector defendants

because “it had not been clearly established that malicious prosecution violates any constitutional

or statutory right” and, therefore, “qualified immunity defeat[ed] Moore’s malicious prosecution

claim,” id. at 195-96. While the Bivens malicious prosecution claim was dismissed as to all

defendants, the D.C. Circuit reversed the dismissal of the Bivens retaliatory prosecution claim in

Fifth Cause of Action in the Bivens complaint as to all of the defendants. Id. at 196. With

respect to AUSA Valder, the Circuit acknowledged that “a prosecutor enjoys absolute immunity

from section 1983 liability when he acts as an advocate by engaging in activities intimately

associated with the judicial phase of the criminal process.” Id. at 193 (internal quotations and

citation omitted). As a result, “Valder’s prosecutorial immunity insulate[ed] him from liability

for his unquestionably advocatory decision to prosecute Moore” as well as “from liability for

allegedly concealing exculpatory evidence from the grand jury and for allegedly manipulating

evidence before the grand jury to create a false impression of what Moore knew about the

alleged fraudulent schemes.” Id. at 194. Nevertheless, the Circuit found that AUSA Valder had

“not met his burden of establishing that absolute immunity protect[ed] him from potential

liability for the other instances of misconduct alleged,” id., including allegations that he (1)

15

“intimidated and coerced witnesses into changing their testimony to incriminate Moore,” id. at

191, and (2) “disclos[ed] grand jury testimony to unauthorized third parties,” id. at 192, 197.

The Court opined that neither of these alleged actions would be the type of advocatory conduct

that would shield a prosecutor from liability. Id. at 194-95.

Regarding the defendant Postal Inspectors, the D.C. Circuit found that the plaintiff’s

retaliatory prosecution claim “alleg[ed] the violation of clearly established law” with sufficient

factual allegations “to meet any applicable heightened pleading standard” required for a viable

Bivens claim. Id. at 196. Specifically, the Circuit pointed to the allegations in the complaint

that: (1) “[i]n publicly criticizing the USPS Moore unquestionably exercised his first amendment

rights,” and (2) “[t]wo of the postal inspectors, who reported to USPS management, heard and

did not repudiate Valder’s declaration that Moore’s innocence was irrelevant to the prosecution

he intended to pursue,” referring to the lunch conversation recounted in the Hittinger Affidavit.

Id. As a result, the Court reversed the dismissal of and remanded the Fifth Cause of Action in

the Bivens complaint for retaliatory prosecution against all of the defendants.

Finally, the Circuit affirmed in part and reversed in part the district court’s dismissal of

the plaintiff’s FTCA claim against the United States. The discretionary function exception

shielded the United States from “Moore’s claims that Valder and the postal inspectors pressured

witnesses into incriminating him, concealed and distorted exculpatory evidence to create a false

impression of what he knew about the fraud schemes and withheld material exculpatory

information from him after the grand jury returned an indictment.” Id. at 197. By contrast,

“[d]isclosing grand jury testimony to unauthorized third parties” was found not to be a

“discretionary activity nor . . . inextricably tied to matters requiring the exercise of discretion.”

Id. at 197. Thus, the D.C. Circuit concluded that the district court erred in dismissing the FTCA

16

claim in its entirety for lack of subject matter jurisdiction, since not all of the plaintiff’s

allegations of misconduct fell under the FTCA “discretionary function” exception. Id. In

reversing and remanding the FTCA claim for malicious prosecution against the United States,

the Circuit “express[ed] no view whether the allegation is otherwise cognizable under the FTCA

or whether it is supported by the evidence.” Id.

In sum, in its 1995 decision, the Circuit affirmed the dismissal of the Bivens malicious

prosecution claim against all defendants, but reversed both the dismissal of the Bivens retaliatory

prosecution claim against all defendants, and the dismissal of the FTCA malicious prosecution

claim against the United States based upon the alleged unauthorized disclosure of grand jury

testimony.

On remand, the district court for the second time dismissed the Bivens claim for

retaliatory prosecution against AUSA Valder as well as the FTCA claim for malicious

prosecution against the United States. See 1998 Decision.8 The plaintiff appealed the dismissal

of his claims and the D.C. Circuit addressed the case for a second time.

2000 – 2004 Appellate Reversal of District Court’s Second

Dismissal of FTCA Claim

8

The district court concluded that AUSA Valder was entitled to summary judgment on the plaintiff’s

Bivens retaliatory prosecution claim because the AUSA’s decision to prosecute the plaintiff was protected by

absolute immunity. See 1998 Decision at 17-24. Although acknowledging that the only allegation in the FTCA

claim for malicious prosecution that could survive the discretionary function exception was that “AUSA Valder and

the Postal Inspectors violated Federal Rule of Criminal Procedure 6(e)(2) . . . by giving Spartin and former

Postmaster General Paul Carlin access to the Grand Jury testimony of other witnesses for the purpose of influencing

Spartin’s testimony and for the apparent purpose of assisting Carlin, a private plaintiff, to pursue civil litigation . . .,”

FTCA Compl. ¶ 26, the court nevertheless determined that this allegation could not support a claim for malicious

prosecution and abuse of discretion against AUSA Valder. 1998 Decision, No. 92-CV-2288, at 32-43. The court

reasoned that malicious prosecution and abuse of discretion claims arise from conduct of “investigative or law

enforcement officers of the United States government,” and “investigative or law enforcement officer means any

officer” of the United States who is “empowered by law to execute searches, seize evidence, or make arrests for

violations of Federal Law.” Id. (citing 28 U.S.C. § 2680(h)). Since federal prosecutors do not fit within this

definition, the court dismissed the FTCA malicious prosecution and abuse of discretion claims against the United

States. Id. at 31-32, n.20-21.

17

In 2000, the D.C. Circuit affirmed the district court’s decision to dismiss the plaintiff’s

Bivens retaliatory prosecution claim against AUSA Valder and the FTCA abuse of process claim

against the United States, but reversed the dismissal of the FTCA malicious prosecution claim

against the United States.9 Moore II, 213 F.3d at 710, 713. The FTCA malicious prosecution

claim required proof of four elements under local law: “(1) the defendant’s initiation or

procurement of a criminal proceeding against the plaintiff; (2) absence of probable cause for the

proceeding; (3) malicious intent on the part of the defendant; and (4) termination of the

proceeding in favor of the plaintiff.” Id. at 710 (citations omitted). The Court first noted the

significant obstacles to satisfying the first element of the malicious prosecution claim in this case

since “none of Valder’s conduct can be the basis for a malicious prosecution claim against the

government because he is not an investigative or law enforcement officer” and, other than “the

conduct of the postal inspectors in disclosing grand jury material,” the “remainder of the postal

inspector’s conduct fell within the FTCA’s discretionary function exception.” Id. Thus, to

satisfy the first element that the defendants procured the indictment, the plaintiff must establish

“‘a chain of causation’ linking the defendant’s actions with the initiation of criminal

proceedings,” which the plaintiff tried to show by alleging that “the postal inspectors’ releasing

of grand jury testimony to Spartin . . . caused Spartin to incriminate him, which led to his

indictment and then his prosecution.” Id. Since the plaintiff did not allege that the defendant

Postal Inspectors made any misrepresentations to the grand jury, however, he needed to show

that “but for the postal inspectors’ disclosure of grand jury testimony to Spartin, he would not

9

The Circuit affirmed the dismissal of the Bivens abuse of process claim against all defendants, explaining

that an abuse of process tort requires an allegation of “grand jury [] misuse[]” and the plaintiff did not allege that the

Postal Inspectors “used the grand jury for an improper purpose.” Moore II, 213 F.3d at 713. This decision resolved

the plaintiff’s Bivens abuse of process claim against all defendants.

18

have implicated Moore before the grand jury.” Id. at 711.10 “On the other hand, if Moore would

have been indicted and prosecuted anyway, even without the postal inspectors’ alleged

misconduct and Spartin’s testimony, then the United States cannot be held liable.” Id. at 712.

Since “the case [was] still at the pleading stage” where “there is no telling how the evidence will

turn out” and the “complaint sufficiently set forth the first element of the malicious prosecution

tort,” the Circuit remanded the FTCA malicious prosecution claim. Id.

On remand, the Postal Inspectors again moved for summary judgment on the plaintiff’s

Bivens retaliatory prosecution claim, arguing that qualified immunity shielded them from suit

because the prosecution of the plaintiff was supported by probable cause. Defs.’ Mot. for Summ.

J., Moore v. Hartman, Case No. 92-2288 (D.D.C. July 30, 2001), ECF No. 254. Alternatively,

they argued that summary judgment was proper because the plaintiff had not produced sufficient

evidence of retaliatory motive. Id. The district court denied the Postal Inspectors’ motion in a

one-paragraph order, citing material disputed facts “surrounding the presentation of evidence to

the grand jury and the disclosure of grand jury testimony as to a key prosecution witness.”

Order, Moore v. Hartman, Case No. 92-2288 (D.D.C. Aug. 5, 2003), ECF No. 283.

On interlocutory appeal, the D.C. Circuit affirmed the denial of summary judgment on

the plaintiff’s Bivens retaliatory prosecution claim, rejecting both grounds posited by the

defendant Postal Inspectors. Moore v. Hartman, 388 F.3d 871, 872-3 (D.C. Cir. 2004) (Moore

III). With respect to the first ground, the Court cited an earlier decision in Haynesworth v.

Miller, 820 F.2d 1245 (D.C. Cir. 1987), stating that “[n]owhere does [that decision] suggest that

10

The Circuit disagreed with the district court’s view that “[e]ven if . . . Spartin’s testimony ‘caused’ the

indictment, this would not satisfy the first element because a grand jury indictment cannot by itself initiate a

prosecution,” Moore II, 213 F.3d at 711 (quoting 1998 Decision, No. 92-CV-2288, at 36-37), concluding instead

that a “criminal proceeding is a prerequisite to the malicious prosecution tort. If the proceeding starts with a grand

jury indictment and the defendant procured the indictment, the first element of the tort is satisfied,” id.

19

lack of probable cause is an element of the claim, nor does its silence imply such a requirement.”

Moore III, 388 F.3d at 878. Rather, “[t]he standard Haynesworth articulated is this: once a

plaintiff shows protected conduct to have been a motivating factor in the decision to press

charges, the burden shifts to the officials to show that they would have pursued the case anyway.

Given that probable cause usually represents only one factor among many in the decision to

prosecute—some others being the strength of the evidence, the resources required for the

prosecution, the relation to enforcement priorities, and the defendant’s culpability—there is no

reason to expect that the mere existence of probable cause will suffice under Haynesworth to

protect government officials from liability.” Id. Accordingly, the Circuit held that lack of

probable cause is not required to establish a Bivens retaliatory prosecution claim in this Circuit.

Id. at 879 (“several other circuits require lack of probable cause in retaliatory prosecution actions

. . . these cases, however, are not the law of this circuit—Haynesworth is”) (citations omitted).

With respect to the second ground on which the defendant Postal Inspectors sought

summary judgment, the Court explained that, while “[q]ualified immunity generally shields

public officials from civil damages insofar as their conduct does not violate clearly established

statutory or constitutional rights of which a reasonable person would have known,” id. at 872-73

(internal quotations and citations omitted), this was not the circumstance presented. Instead, “the

clearly established law of this circuit barred government officials from bringing charges they

would not have pursued absent retaliatory motive, regardless of whether they had probable cause

to do so.” Id. at 872. As applied in this case, the Court found that “what the inspectors were

doing—prosecuting a case they otherwise would have left alone—violated the First

Amendment.” Id. at 885. Thus, the Court affirmed the district court’s finding that the defendant

Postal Inspectors were not entitled to qualified immunity on the plaintiff’s Bivens retaliatory

20

prosecution claim and remanded the case “reassur[ing] both sides” that “the next step,

presumably, will be preparation for trial.” Id. at 886 (emphasis in original).

2006 Supreme Court Review Requiring Proof of No-Probable

Cause for FTCA Malicious Prosecution Claim

The next step, however, was not trial but rather consideration by the Supreme Court,

which agreed with the defendant Postal Inspectors that “want of probable cause must be alleged

and proven” to establish that a prosecution was induced in retaliation for protected speech.

Hartman v. Moore, 547 U.S. 250, 252 (2006). Moreover, the Supreme Court placed the onus on

the plaintiff to “show that the criminal action was begun without probable cause for charging the

crime in the first place.” Id. at 258. In reaching this conclusion, the Supreme Court reasoned

that “the need to prove a chain of causation from animus to injury, with details specific to

retaliatory-prosecution cases, . . . provides the strongest justification for the no-probable-cause

requirement.” Id. at 259. The Court recognized that proving this causal connection is difficult,

id. 261-265, but nevertheless specifically stated that “a plaintiff like Moore must show that the

nonprosecuting official acted in retaliation, and must also show that he induced the prosecutor to

bring charges that would not have been initiated without his urging.” Id. at 262. Accordingly,

having found absence of probable cause to be an element of the plaintiff’s claim, the Supreme

Court reversed and remanded the action.11

2007-2009 Appellate Reversal of District Court’s Dismissal of

Both Bivens and FTCA Claims

On remand to the district court, the defendants moved for summary judgment on the two

claims remaining—the Bivens claim of retaliatory prosecution against the Postal Inspectors and

the FTCA malicious prosecution claim against the United States—on the ground that “the

11

This Supreme Court decision is discussed in more detail, infra, Part VI. C.3., in connection with the

plaintiff’s motion for a new trial.

21

plaintiff cannot prove the absence of probable cause.” 2008 Decision, 569 F. Supp. 2d at 134.

While recognizing that “[o]rdinarily, when the facts are in dispute, the question of probable

cause is one for the jury,” the district court concluded that, in this case, “[a] valid indictment

conclusively determines the existence of probable cause to bring charges against a suspect.” Id.

at 137. “Because the plaintiff is unable to establish lack of probable cause,” id. at 134, the court

granted summary judgment to the defendants and dismissed both the plaintiff’s Bivens retaliatory

prosecution claim against the Postal Inspector defendants as well as the FTCA malicious

prosecutions claim against the United States. Id. at 141.

On appeal, in its fourth opinion pertaining to this action, the D.C. Circuit again disagreed

with the district court’s reasoning for dismissing the plaintiff’s claims and remanded the case.

Moore v. Hartman, 571 F.3d. 62, 65 (D.C. Cir. 2009) (Moore IV). With regards to the Bivens

claim, the Circuit explained that “[u]nder the Supreme Court’s decision, the three elements of a

retaliatory prosecution claim are that: (1) the appellant’s conduct allegedly retaliated against or

sought to be deterred was constitutionally protected; (2) the government’s bringing of the

criminal prosecution was motivated at least in part by a purpose to retaliate for or to deter that

conduct; and (3) the government lacked probable cause to bring the criminal prosecution against

the appellant.” Id. at 65 (citing Hartman, 547 U.S. at 265-66 and Moore II, 213 F.3d at 709

(describing the first two elements of a retaliatory prosecution claim)). Likewise, the Circuit

recognized that a malicious prosecution claim requires, among other elements, proof of “lack of

probable cause for the underlying prosecution.” Id. at 66 (citations omitted).

The Circuit rejected the district court’s finding that an indictment is conclusive evidence

of probable cause and held that an indictment is prima facie evidence of probable cause and

merely creates a presumption, which may then be rebutted by contrary evidence. Id. at 67-68.

22

The case was remanded with instructions to “take into account the rebuttable presumption in

favor of probable cause” and “consider whether appellant has offered enough evidence to create

a genuine issue of material fact as to the legitimacy, veracity, and sufficiency of the evidence

presented to the grand jury.” Id. at 69. Under this standard the plaintiff needed to “present

evidence that the indictment was produced by fraud, corruption, perjury, fabricated evidence, or

other wrongful conduct undertaken in bad faith” to overcome the prima facie evidence of

probable cause presented by the indictment. Id.

2010-2013 District and Circuit Courts’ Denial of Summary

Judgment on Both Bivens and FTCA Claims

Upon remand, all defendants moved again for summary judgment on both the Bivens

retaliatory prosecution and FTCA malicious prosecution claims, arguing that even under the

Circuit’s “newly articulated standard” the plaintiff could not establish lack of probable cause for

his indictment. Moore v. Hartman, 730 F. Supp. 2d 174, 177 (D.D.C. 2010) (2010 Decision).

Specifically, the defendants contended that “no evidence” shows that the alleged improper

conduct of the defendants “resulted in the grand jury indictment” and, in any event, “probable

cause existed to prosecute [the plaintiff].” Id. at 178. The court denied the defendants’ renewed

motion for summary judgment because of the existence of “a genuine issue of material fact as to

whether the government lacked probable cause to prosecute him.” Id. at 175. This conclusion

rested on the following evidentiary proffer, from which a “reasonable factfinder could conclude

the government procured the plaintiff’s indictment through wrongful conduct undertaken in bad

faith and that the government lacked probable cause to prosecute the plaintiff,” id. at 179

(internal quotation and citations omitted): (1) “’the prosecutor made statements to grand jury

witnesses to ‘not reveal’ certain portions of their testimony to the grand jury;’” (2) “’senior

attorneys in the U.S. Attorney’s Office allegedly stated in memoranda that the government’s

23

evidence against [the plaintiff] was ‘extremely thin,’ and openly questioned whether charges

should be brought against [him];’” (3) “‘the postal inspectors stated in a memorandum after the

grand jury investigation that witnesses could testify that [the plaintiff] was not aware of the

conspiracy;’” and (4) “‘the postal inspectors improperly showed GAI Officer Spartin other

witnesses’ grand jury statements, intimidated Spartin by threatening to prosecute his son and

tearing up his plea agreement, and lobbied the U.S. Attorney’s Office to prosecute [the

plaintiff].’” Id. (brackets in original; quoting Moore IV, 571 F.3d at 65).

The defendant Postal Inspectors appealed the denial of summary judgment on the Bivens

claim, on grounds that, even if probable cause were lacking, their mistaken belief that probable

cause was present – “termed ‘arguable probable cause’”– entitled them to qualified immunity.

Moore V. 644 F.3d at 422. Although in the Fourth Amendment context, arguable probable

cause “shields a defendant from a Fourth Amendment wrongful prosecution claim as well as a

Fourth Amendment arrest claim,” the D.C. Circuit concluded in its fifth opinion in this case that

“arguable probable cause does not apply to a First Amendment retaliatory inducement to

prosecution case because probable cause is not an element of the First Amendment right

allegedly violated.” Id. at 423 (“Unlike the Fourth Amendment claim, however, the First

Amendment does not itself require lack of probable case in order to establish a retaliatory

inducement to prosecution claim.”); id. at 426 (“we conclude that the doctrine of arguable

probable cause does not apply to a First Amendment retaliatory inducement to prosecution

claim.”). The Circuit stressed that, per the Supreme Court’s 2006 holding, “‘probable cause’

(not arguable probable cause) must be pleaded and proven as an element of a plaintiff’s case in

order to establish a causal link between those inducing the prosecution and the prosecutors

themselves” – and “[w]hether the Postal Inspectors had probable cause is a disputed issue of fact

24

to be decided by the jurors at trial.” Id. Accordingly, the Circuit affirmed the district court’s

conclusion that the Postal Inspectors were not entitled to qualified immunity on the grounds of

arguable probable cause. Id.

The Postal Inspectors appealed this ruling that they were not entitled to qualified

immunity to the Supreme Court, which, on June 11, 2012, vacated the 2011 D.C. Circuit opinion

in Moore V and remanded the case with instructions to give the matter further consideration in

light of the decision in Reichle v. Howards, 132 S. Ct. 2088 (2012); see Hartman, 132 S.Ct.

2740. In Reichle, the Supreme Court found that its 2006 Moore v. Hartman decision and

subsequent appellate decisions had muddied the legal waters and “injected uncertainty into the

law governing retaliatory arrests,” id. at 2096, making it unclear to a reasonable person, at the

time of the alleged First Amendment retaliatory arrest in the Reichle case, that “an arrest

supported by probable cause could [still] give rise to a First Amendment violation,” thereby

entitling the officer in Reichle to qualified immunity. Id. at 2097.

On remand, in a single page opinion, the D.C. Circuit provided its final word before trial

on this matter, reinstating the 2011 opinion in Moore V, with the following explanation:

Because retaliatory arrest and retaliatory prosecution are distinct constitutional violations

and because the precedent in this Circuit clearly established in 1988, when the challenged

conduct by the Postal Inspectors took place, the contours of the First Amendment right to

be free from retaliatory prosecution, nothing in Reichle changes our conclusion that the

absence-of-probable-cause requirement is not “an element of a First Amendment

retaliation violation.” Moore V, 644 F.3d at 424. If the Postal Inspectors believe that the

Court in Reichle meant to decide what it refused to decide in Hartman and bring to a halt

this three decades old case involving evidence that, unlike in Reichle where probable

cause was conceded, ‘comes close to the proverbial smoking gun,” Moore v. Hartman,

388 F.3d 871, 884 (D.C. Cir. 2004) (‘Moore III’), they are free to once again petition for

certiorari and ask the Supreme Court if it wishes to end this saga.

25

Moore V, 704 F.3d at 1004.12 The defendants took the Circuit up on its invitation, again

petitioning the Supreme Court for certiorari, which request was denied in October 2013. The

case then proceeded to the jury trial on the plaintiff’s remaining two Bivens and FTCA claims.13

3. Pre-Trial Motions in Limine

Prior to trial, the parties filed multiple motions in limine, regarding, inter alia, at least

eighteen separate evidentiary issues. See, e.g., Defs.’ Omnibus Motion in Limine, ECF No. 417,

419; Pl.’s Mot. Concerning Source of Payment of Any Judgment, ECF No. 422; Pl.’s Mot. to

Exclude References to “Presumption” of Probable Cause, ECF No. 420; Defs.’ Mot. to Exclude

the Testimony of Pl.’s Damages Experts, ECF No. 418; Pl.’s Mot. to Exclude Certain Testimony

by Defense Expert Witness Jerald Udinsky, ECF No. 423. These pre-trial motions were

promptly resolved in order for the trial to commence on June 23, 2014. See Minute Order, dated

June 17, 2014; Minute Order, dated June 20, 2014. The plaintiff seeks to re-litigate three of the

pretrial motions in limine as part of his motion for a new trial, which motion challenges the

rulings: (1) excluding indemnification evidence; (2) granting the defendants six rather than three

preemptory challenges; and (3) excluding a prior judicial opinion. See, infra, Part VI. A. and

B.1. & 2.

12

Although the Circuit noted that “the absence-of-probable-cause requirement is not ‘an element of a First

Amendment retaliation violation,’” Moore VI, 704 F.3d at 1004, the lack of probable cause must still be pled and

proven as an element of a Bivens action for retaliatory inducement to prosecution. In Moore V, the Circuit addressed

whether the probable cause requirement was inherent in the “First Amendment right allegedly violated.” Moore V,

644 F.3d at 423. Although probable cause does not inhere in an individual’s First Amendment right, as opposed to

an individual’s Fourth Amendment right, the lack of probable cause must nevertheless “be pleaded and proven, as an

element of a plaintiff’s case” for retaliatory inducement to prosecution because of its relation to the causation

inquiry. Moore V, 644 F.3d at 424 (citing Hartman, 547 U.S. at 265–66)).

13

This case was reassigned to the presiding Judge on June 2, 2014, see ECF No. 108, due to recusal of the

prior Judge and shortly before the scheduled trial date. That recusal prompted the plaintiff to move to vacate several

prior adverse pre-trial rulings, which motion was granted. See Minute Order, Case No. 92-2288 (D.D.C. June 6,

2014), ECF No. 453.

26

4. Trial

At the concurrent four week FTCA bench and Bivens jury trial the plaintiff presented a

total of twenty-three witnesses, only eleven of whom provided live testimony, and over 200 trial

exhibits.14 For the majority of his witnesses, the plaintiff presented lengthy portions of

depositions by screening videotapes of the depositions or reading aloud from the deposition

transcripts.15 The plaintiff presented the testimony of: (1) the plaintiff; (2) the five Postal

Inspector defendants, via pretrial depositions; (3) two former colleagues of the plaintiff at REI;16

(4) Peter Voss, the former Vice Chairman of USPS BOG, who was convicted for his

participation in the illegal scheme, via de bene esse deposition;17 (5) the former Chairman of the

USPS BOG, the former Postmaster General and other senior managers at USPS;18 (6) former

AUSA Valder, via pretrial deposition, and one of his supervisors from the DC USAO;19 (7)

Charles Stillman, the plaintiff’s defense counsel at his criminal trial; (8) Helene Goldberg, a

14

The list of exhibits admitted into evidence by the plaintiff and by the defendants are docketed at Case

No. 93-324, ECF Nos. 121, 122, respectively.

15

The plaintiff chose to present deposition testimony from seven witnesses -- the five defendant Postal

Inspectors, former AUSA Valder and former Chief Postal Inspector Charles Clauson-- even though these witnesses

were available to testify live and, in fact, testified live on the defense case. The plaintiff initially indicated in the

Joint Pretrial Statement that the deposition testimony would only be offered if the witness were “not available for

live testimony,” JPTS, Annex A at 3-5, ECF No. 438-1, but then designated significant portions of the depositions

to use instead of the live testimony. The defendants objected to the plaintiff’s designation of these witnesses’

depositions, since the plaintiff had made no showing of the witnesses’ unavailability. JPTS, Annex E, generally,

ECF No. 438-5. Nevertheless, the Court permitted the plaintiff to present these witnesses’ deposition testimony, see

Fed. R. Civ. P. 32(a) (1) and (a) (2); Fed. R. Evid. 611(a), 803(d) (2), despite the fact that this litigation strategy

prolonged the trial by necessitating the presentation of these witnesses twice to the jury – first, on the plaintiff’s

case, by deposition, and then again on the defense case, by live testimony – and despite the well-recognized fact that

live testimony is usually preferable to the tediousness of presentation of lengthy depositions.

16

These witnesses were William C. Hittinger, the plaintiff’s friend and member of the REI Board of

Directors, who testified via pretrial deposition, and Frank Bray, the vice president and manager of Postal Programs

at REI, who testified live.

17

Over the defendants’ objection, the plaintiff’s motion to take the de bene esse deposition of Peter Voss

shortly before trial was granted. Minute Order, June 6, 2015.

18

These witnesses were Paul Carlin, former Postmaster General; James Jellison, former Senior Assistant

Postmaster General; Charles R. Clauson, former Chief Postal Inspector; and John R. McKean, former Chairman of

the BOG, all of whom testified via pretrial deposition.

19

Charles Leeper, former Deputy Chief of Special Prosecutions at the DC USAO, testified live.

27

former Director of the Constitutional and Specialized Torts Branch at the Department of Justice,

who testified via deposition as the government’s witness under Federal Rule of Civil Procedure

30(b)(6);20 and (9) five witnesses on the alleged damages sustained by the plaintiff, including

three persons proferred as experts under Federal Rule of Evidence 702, as well as the plaintiff’s

son and a long-time friend.21

The defendants presented over 100 trial exhibits and the testimony of nine witnesses,

including the live testimony of the four living defendant Postal Inspectors, former AUSA Valder,

two former supervisors from the DC USAO,22 and a witness proffered as a damages expert.23

Following presentation of the twenty-six unique witnesses and admission of 305 trial

exhibits, the jury returned a verdict for the Postal Inspectors, finding that the plaintiff had failed

to prove by a preponderance of the evidence that he was criminally prosecuted in retaliation for

his First Amendment protected activities. Thereafter, the parties filed approximately 400 pages

of proposed findings of fact as well as their respective proposed conclusions of law on the FTCA

claim, and the plaintiff moved for a new jury trial. See Pl.’s Mot., ECF No. 511; Pl.’s COLs,

ECF No. 125; Defs.’ Proposed Concls. of Law (“Defs.’ COLs”), ECF No. 127; Defs.’ Errata on

its Proposed Concls. of Law (Defs.’ Errata COLs”), ECF No. 128; Pl.’s Reply in Supp. of COLs

(“Pl.’s Reply COLs”), ECF No.131.

The plaintiff’s FTCA claim for malicious prosecution is addressed first before turning to

the plaintiff’s motion for a new jury trial on the Bivens claim for retaliatory prosecution.

20

At the time of her video-taped deposition, Ms. Goldberg was retired but under contract with the

Department of Justice to provide testimony in this matter.

21

As discussed more fully, infra, in Part III.D., the witnesses proffered by the plaintiff as his damages

experts were Dan Cruse, who has worked as an executive recruiter, and two economists, Dr. Charles Betsey and Dr.

Philip Fanara.

22

The two former DC USAO supervisors called to testify in the defense case were H. Marshall Jarrett,

former Chief of the Criminal Division, and Paul L. Knight, former Chief of Special Prosecutions.

23

The defendants’ damages expert was Dr. Jerald Udinsky, a financial and rehabilitation economist.

28

II. LEGAL STANDARDS

Law Applicable to FTCA Claim

The United States, as a sovereign, is absolutely immune from suit and, unless Congress

has unequivocally consented to permit a cause of action, no court has jurisdiction to entertain a

claim against the United States. United States v. Sherwood, 312 U.S. 584, 586-87 (1941); United

States v. Testan, 424 U.S. 392, 399 (1976). Congress created a limited waiver of sovereign

immunity of the United States by enacting the FTCA, the provisions of which must be strictly

construed in favor of the United States. See Dep’t of Army v. Blue Fox, Inc., 525 U.S. 255, 261

(1999); United States v. Mitchell, 445 U.S. 535, 538 (1980); United States v. Kubrick, 444 U.S.

111, 117-18 (1979); Tri-State Hosp. Supply Corp. v. United States, 341 F.3d 571, 575 (D.C. Cir.

2003); Girdler v. United States, 923 F. Supp. 2d 168, 186 (D.D.C. 2013).

The FTCA creates liability for certain torts committed by agencies of the United States or

their employees “in the same manner and to the same extent as a private individual under like

circumstances . . . .” 28 U.S.C. § 2674; see Ali v. Fed. Bureau of Prisons, 552 U.S. 214, 217-18

(2008) (“In the FTCA, Congress waived the United States’ sovereign immunity for claims

arising out of torts committed by federal employees.”). The Supreme Court has explained that

“the effect of the Tort Claims Act is to waive immunity from recognized causes of action, not to

visit the Government with novel and unprecedented liabilities.” United States v. Brown, 348

U.S. 110, 112-13 (1954) (internal quotation marks and citation omitted).

Generally, the FTCA does not allow for malicious prosecution claims against the United

States. 28 U.S.C. § 2680(h) (“The provisions of this chapter and section 1346(b) of this title

shall not apply to . . . [a]ny claim arising out of . . . malicious prosecution . . .”). An exception

exists, however, “with regard to acts or omissions of investigative or law enforcement officers.”

Id. The D.C. Circuit has concluded that the Postal Inspectors involved in the investigation of the

29

plaintiff are “investigative or law enforcement officers,” within the meaning of the FTCA.

Moore II, 213 F.3d at 710-11, n.4.

When the exception does apply, the liability of the United States for the negligent or

wrongful acts or omissions of its employees, acting within the scope of their employment, is

determined “in accordance with the law of the place where the act or omission occurred.” 28

U.S.C. § 1346(b)(1); see also FDIC v. Meyer, 510 U.S. 471, 478 (1994) (noting that Supreme

Court has “consistently held that § 1346(b)’s reference to the ‘law of the place’ means law of the

State – the source of substantive liability under the FTCA” ) (collecting cases). In this case, the

D.C. Circuit has already concluded that “[w]ith respect to Moore’s FTCA action against the

United States for malicious prosecution and abuse of process, ‘the law of the place where the act

or omission occurred’ is controlling,’” and that “District of Columbia law must be consulted.”

Moore II, 213 F.3d at 710.24

1. Federal Rule of Civil Procedure 52(a) Applicable to Findings and

Conclusions by the Court

Pursuant to Federal Rule of Civil Procedure 52(a), “[i]n an action tried upon the facts

without a jury,” the Court must “find the facts specially and state its conclusions of law

separately.” FED. R. CIV. P. 52(a)(1); see Ascom Hasler Mailing Sys., Inc. v. U.S. Postal Serv.,

885 F. Supp. 2d 156, 164 (D.D.C. 2012); Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636, 638–39

n.1 (D.C. Cir. 1982); FTC v. Beatrice Foods, Inc., 587 F.2d 1225, 1230 n.1 (D.C. Cir. 1978);

D.C. Fed’n of Civic Ass’ns v. Volpe, 459 F.2d 1231, 1259 n.19 (D.C. Cir. 1971). The “[f]indings

and conclusions may be incorporated in any opinion or memorandum of decision the court may

24

The FTCA requires as a jurisdictional predicate that the plaintiff exhaust his administrative remedies.

See 28 U.S.C. § 2675(a); McNeil, 508 U.S. at 107; GAF Corp., 818 F.2d at 904. In this case, the defendants do not

dispute that the plaintiff has exhausted his administrative remedies. See FTCA Compl. ¶ 48 (“On October 24, 1991,

plaintiffs submitted claims to the United States Department of Justice and the United States Postal Service for the

damages alleged in this Complaint. On April 27, 1992, the Department of Justice, acting on its own behalf and on

behalf of the United States Postal Service, rejected the plaintiffs’ claims.”); Answer ¶ 48 (“Admitted”).

30

file.” Defenders of Wildlife, Inc. v. Endangered Species Scientific Auth., 659 F.2d 168, 176

(D.C. Cir. 1981).

In setting forth the findings of fact, the court need not “address every factual contention

and argumentative detail raised by the parties,” Mayaguez v. Corporacion Para El Desarrollo

Del Oeste, 824 F. Supp. 2d 289, 295 (D.P.R. 2011), or “discuss all evidence presented at trial,”

Wachovia Bank N.A., Nat. Ass’n v. Tien, No. 13-11971, 2014 WL 7399064, at *4 (11th Cir. Dec.

31, 2014). Instead, according to the Advisory Committee Notes for Federal Rule 52, “a judge

need only make brief, definite, pertinent findings and conclusions upon the contested matters;

there is no necessity for over-elaboration of detail or particularization of facts.” Caffey v. Togo,

159 F.3d 635 (D.C. Cir. 1998) (internal quotation marks omitted); see Fasolino Foods Co. v.

Banca Nazionale del Lavoro, 961 F.2d 1052, 1058 (2d Cir. 1992) (“[a]ll that is required by Rule

52(a) is that the trial court provide findings that are adequate to allow a clear understanding of its

ruling”).

Moreover, the court “[f]indings of fact, whether based on oral or other evidence, must not

be set aside unless clearly erroneous . . .” FED. R. CIV. P. 52(a)(6); see Anderson v. City of

Bessemer City, N.C., 470 U.S. 564, 573 (1985) (“Findings of fact shall not be set aside unless

clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of

the credibility of the witnesses.”) (internal quotations and citation omitted); Occidental

Petroleum Corp. v. SEC, 873 F.2d 325, 340 (D.C. Cir. 1989) (the “clear error” standard applies

at least with regards to “the particularized factual findings that underlay the district court’s

determination”).

Federal Rule of Civil Procedure 59 Applicable to Plaintiff’s Motion for New

Trial

31

Under Federal Rule of Civil Procedure 59, following a jury trial, the court may grant a

motion for a new trial “for any reason for which a new trial has heretofore been granted in an

action at law in federal court.” FED. R. CIV. P. 59(a)(1)(A). Rather than define the precise

circumstances justifying a new trial, Rule 59 turns to case law and permits a new trial in those

circumstances traditionally viewed as permitting a new trial. ABM Marking, Inc. v. Zanasi

Fratelli, SRL, 353 F.3d 541, 543 (7th Cir. 2003) (“Rule 59(a), in a bit of a circular way, allows

new trials in cases where new trials have been traditionally allowed at law.”). “The court has the

power and duty to order a new trial whenever, in its judgment, this action is required in order to

prevent injustice.” 11 Charles Alan Wright & Arthur R. Miller, et al., FED. PRAC. & PROC. CIV.

§ 2805 (3d ed. 2012). Accordingly, motions for a new trial are granted only when “the court is

convinced that the jury verdict was a ‘seriously erroneous result’ and where denial of the motion

will result in a ‘clear miscarriage of justice.’” In re Lorazepam & Clorazepate Antitrust Litig.,

467 F. Supp. 2d 74, 87 (D.D.C. 2006) (citation omitted); see also Rice v. Dist. of Columbia, 818

F. Supp. 2d 47, 60 (D.D.C. 2011) (“The standard for granting a new trial is not whether minor

evidentiary errors were made but rather whether there was a clear miscarriage of justice.”);

Nyman v. FDIC, 967 F. Supp. 1562, 1569 (D.D.C. 1997) (same).

The high threshold for a new trial reflects the “well-settled” principle that “Rule 59 is not

a vehicle for relitigating old issues, presenting the case under new theories, securing a rehearing

on the merits, or otherwise taking a ‘second bite at the apple.’” Sequa Corp. v. GBJ Corp., 156

F.3d 136, 144 (2d Cir. 1998); see also Aero Int’l, Inc. v. U.S. Fire Ins. Co., 713 F.2d 1106, 1113

(5th Cir. 1983). “Although parties may certainly request a new trial or amended findings where

clear errors or manifest injustice threaten, in the absence of such corruption of the judicial

processes, where litigants have once battled for the court’s decision, they should neither be

32

required, nor without good reason permitted, to battle for it again.” Int’l Ore & Fertilizer Corp.

v. SGS Control Servs., Inc., 38 F.3d 1279, 1287 (2d Cir. 1994) (internal quotations and citation

omitted). Moreover, a Rule 59 motion is not the appropriate vehicle to revisit the strategic

litigation decisions of counsel at trial.

“The authority to grant a new trial . . . is confided almost entirely to the exercise of

discretion on the part of the trial court.” Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36,

(1980); McNeal v. Hi-Lo Powered Scaffolding, Inc., 836 F.2d 637, 646 (D.C. Cir. 1988) (“The

decision whether to grant a motion for a new trial is ordinarily ‘entrusted to the sound discretion

of the trial court.’” (quoting Grogan v. Gen. Maint. Serv. Co., 763 F.2d 444, 447 (D.C. Cir.

1985)). In exercising this discretion, the court must “be mindful of the jury’s special function in

our legal system and hesitate to disturb its finding.” Long v. Howard Univ., 512 F. Supp. 2d 1, 6

(D.D.C. 2007) (internal quotation marks and citations omitted).

The Supreme Court has made clear that “‘[a litigant] is entitled to a fair trial but not a

perfect one,’ for there are no perfect trials.” McDonough Power Equip. v. Greenwood, 464 U.S.

548, 553 (1984) (quoting Brown v. United States, 411 U.S. 223, 231-232 (1973)). This principle

is predicated on the sound pragmatic reasons that “[t]rials are costly, not only for the parties, but

also for the jurors performing their civic duty and for society which pays the judges and support

personnel who manage the trials. It seems doubtful that our judicial system would have the

resources to provide litigants with perfect trials, were they possible, and still keep abreast of its

constantly increasing caseload.” Id. Thus, a “district court in passing on a motion for a new trial

. . . must be guided by what substantial justice requires and must disregard errors that were

harmless.” FED. PRAC. & PROC. CIV., supra, § 2882.

33

III. FINDINGS OF FACT FOR PLAINTIFF’S FTCA CLAIM

The parties presented evidence on the plaintiff’s FTCA claim over four weeks of trial.

To facilitate review of this voluminous record, the findings of fact are divided into four sections:

(1) the initiation and progression of the criminal investigation into the bribery and kickback

scheme involving the Vice Chairman of USPS’ BOG and others; (2) the investigation of the

plaintiff and his co-defendants; (3) the consideration given within the DC USAO to bringing

criminal charges against the plaintiff and his co-defendants; and (4) the plaintiff’s alleged

damages that he claims to have sustained as a result of being indicted.

Initiation and Progression of Investigation into Illegal Scheme

The plaintiff chose over twenty years ago to sue not only the United States under the

FTCA but also the lowest level government employees involved in the investigation and

prosecution of the criminal charges against him, despite the fact that virtually every significant

step of this investigation leading to the indictment was approved by supervisory personnel. To

provide context for the actions taken by the Postal Inspectors and their supervisors, the Court

first describes the structure of the USPS, including the allocation of responsibilities within USPS

for the award of contracts, and the USPS procurements that were underway when this

investigation began, before turning to the criminal investigation at issue in this lawsuit.

1. Brief Overview of Pertinent Components of USPS

The USPS is structured with an eleven-person BOG, comprised of nine governors

appointed by the President, the Postmaster General (“PMG”) and the Deputy Postmaster General

(“DPMG”). 7/8/14 AM Tr. at 72-73 (Carlin testimony). The PMG is appointed by the nine

governors and then the nine governors and the PMG select the DPMG. Id. The PMG is the head

of the USPS executive committee and the top manager within USPS. Once named, the PMG is a

34

member of the BOG for all matters except rate-setting and classifications. 7/1/14 AM Tr. at 31

(Jellison Dep. testimony); 7/8/14 AM Tr. at 73 (Carlin testimony).

Two USPS committees figured in the investigation of the bribery and kickback scheme at

issue in this case: BOG’s Technology and Development Committee (“Technology Committee”)

and USPS management’s Capital Investment Committee (“CIC”). During the relevant time

period of the conspiracy, the Technology Committee had four members: Vice Chairman Peter

Voss, Ruth Peters, George Camp, and DPMG Jackie Strange. 7/8/14 AM Tr. at 24 (Carlin

testimony); 7/10/14 AM Tr. at 99 (Clauson testimony). The Technology Committee was tasked

at the Board level with providing guidance on technology procurement issues within the USPS.

7/8/14 AM Tr. at 40 (Carlin testimony); 7/1/14 PM Tr. at 34 (Jellison Dep. testimony). By

contrast, the CIC drew its members from senior USPS management and had the responsibility of

deciding on all major capital investments. 7/1/14 PM Tr. at 34 (Jellison Dep. testimony). While

“smaller procurements were approved and handled on lower levels,” significant contracts for

over approximately $10 million dollars, required CIC’s approval. 7/10/14 AM Tr. at 99-100

(Clauson testimony); see also 7/1/14 PM Tr. at 58 (Jellison Dep. testimony that: “if it were over

$5 million, it had to go to the board for approval.”).

The Postal Inspection Service is a USPS component with the mission of investigating

waste, fraud and abuse within this government agency. Clauson Dep. at 16, Sept. 3, 1999 (“[t]he

Postal Inspector is charged with responsibilities of carrying out the audit and criminal

investigative and security missions of the United States Postal Service”); 7/8/14 AM Tr. at 58

(Carlin testimony). As such, Postal Inspectors are federal law enforcement officers and

authorized to carry firearms and make arrests. 7/10/14 AM Tr. at 84 (Clauson testimony). With

respect to criminal matters, the Postal Inspection Service operates highly independently of USPS

35

management. 7/8/14 AM Tr. at 58-59 (Carlin testimony); 7/10/2014 AM Tr. at 135-36 (Clauson

testimony).

2. USPS Automation Program

From the 1970s to the early 1980s, the USPS began an automation program to transition

from sorting mail by hand to use of automated mail sorting machines. As part of this process, in

1980, the USPS decided to use optical character reading (“OCR”) equipment that could identify

key information in addresses to facilitate mail routing and delivery. Pl.’s Ex. 538 ¶ 1 (Stipulated

Facts). Machines capable of reading a single line of the zip code at the bottom of an address

were known as single-line optical readers (“SLOCR”). Id. ¶ 2. In “Phase I” of the USPS’ mail

automation process, which began in 1980, SLOCR machines were purchased from Pitney Bowes

and Burroughs Corporation. Id. To implement Phase I most effectively, in the early 1980s, the

USPS urged customers to use nine-digit ZIP codes (“ZIP+4”), which would provide sufficient

routing information on the last line of an address to allow SLOCR machines to sort mail more

granularly. See 7/7/14 AM Tr. at 36 (Jellison Dep. testimony); Robert Edwards Dep. 72, Feb.

15, 2000. As the plaintiff recognized, the USPS urged adoption of the nine-digit Zip codes

because “it simplified the automation strategy, and the problem [USPS was] having is they had

tremendous amount of mail and . . . all these employees who had to sort it.” 6/24/14 AM Tr. at

117 (Plaintiff testimony).

At the time that USPS deployed the SLOCR machines, the technology for multi-line

OCR machines (“MLOCR”), which could “read” more than the single, bottom line in an address,

was still in the developmental stages. Indeed, USPS had invested almost $70,000,000 in REI for

research and development of MLOCR machines. 6/24/14 AM Tr. at 104-05 (Plaintiff testimony:

"I think we had received up to that point somewhere between 50 to 70 million dollars over a

number of years in development funds . . .."); 6/25/14 AM Tr. at 70 (Plaintiff testimony: “And

36

the postal service had given us, prior to my arrival, close to $70 million to build machines.”). In

addition, by 1983, the USPS had deployed five of the REI prototype MLOCR machines in

various field offices for testing. Pl.’s Ex 25 at 32 (U.S. Office of Technology Assessment report,

dated June 1984 (“OTA Report”)). In the view of USPS, these field tests confirmed continuing

operational concerns with the REI machines and, consequently, the USPS did not believe that

REI’s MLOCR machines were a viable option for mass deployment. 7/1/14 PM Tr. at 6 (Jellison

Dep. testimony: “Q: You were opposed to going with REI, weren’t you, Mr. Jellison? A: Not

with REI. With the read machine they were offering as a multi-line machine”). At the same

time, however, customers were not adopting the use of Zip+4 as projected by USPS, which

reduced the performance of, and efficiency savings from, SLOCR machines. 7/15/14 PM Tr. at

101 (Edwards testimony); 6/24/14 AM Tr. at 117 (Plaintiff testimony).

Despite the slow adoption of Zip+4, in January 1984, the BOG approved funding for

“Phase II” of its automation strategy, which included the purchase of additional SLOCR

machines. Pl.’s Ex. 538 ¶ 7 (Stipulated Facts).

Six months later, in June 1984, the United States Office of Technology Assessment

issued a report entitled, “Review of Postal Automation Strategy, A Technical and Decision

Analysis, A Technical Memorandum,” in response to congressional requests “to conduct a

comparative technical and economic analysis” of SLOCRs and MLOCR machines. Pl.’s Ex. 25

at 1 (OTA Report). The OTA Report acknowledged that “multi-line OCR may not have been a

technically viable alternative 3 or 4 years ago when USPS made its initial decision to go with

single-line OCRs,” id. at 3, and that “[i]n the 1976-1980 period, when the basic USPS

automation program was developed, the single-line optical character reader was, in the opinion

of USPS, the only proven equipment,” id. at 16. The OTA Report noted that “[i]n the late

37

1970’s, USPS procured one multi-line OCR from REI” that “did not satisfy USPS performance

requirements, but the single-line OCRS of five foreign manufacturers did.” Id. at 32. The OTA

Report found that, with USPS research and development support, “REI has developed one of the

leading multi-line OCRs on the world market,” id. at 8, and that “USPS test data indicate that the

multi-line OCR performance is now [as of June 1984] fully competitive with single-line OCR

performances,” id. at 32. Given that MLOCRs “offer[] a significant technical performance

advantage over [SLOCRs] in processing 5-digit ZIP mail to the 9-digit level,” id. at 33, the OTA

Report recommended a “strategy offering the greatest economic return to USPS,” namely: that

“USPS proceed with the Phase II single-line OCR procurement, but simultaneously initiate

release-loan testing…on single- to multi-line conversion, and then convert all single-line OCRs

to multi-line as soon as possible, regardless of the level of Zip+4 use,” id. at 3.

Consistent with the recommendation in the OTA Report to “proceed with the Phase II

[SL]OCR procurement,” on July 9, 1984, the BOG referred the matter of the Phase II automation

procurement to the BOG’s Technology Committee. Pl.’s Ex. 538 at ¶ 10 (Stipulated Facts). The

contract for Phase II of the automation program to supply 403 SLOCR machines, at a cost of

$200,000 each, was awarded, on July 10, 1984, to Electrocom Automation, Inc. (“ECA”), a

domestic company that licensed the OCR technology from a German company, AEG-Telefunken

(“AEG”). Id. at ¶ 11.

One year later, however, under the direction of PMG Paul Carlin, the USPS made a “mid-

course” correction in the procurement process. This mid-course correction provided for two

additional phases of the automation program: Phase IIA would involve “the development and

testing of a retrofit kit to enable the Phase II single-line OCRs to read multi-line, that is four lines

of the address rather than just the last line of the address . . . In addition, a Phase III plan was

38

instituted which involved development and testing of a completely new multi-line machine to

replace existing Phase I OCRs.” Pl.’s Ex. 229 at 58 (ZIP+4/Automation Investigative Report to

Congress, dated Jan. 1987, by Postal Inspection Service (“ZIP+4 Report”)).

3. Summer of 1985 Initiation of Investigation of BOG Vice Chairman Voss

In January 1985, USPS came under new leadership when Paul Carlin succeeded William

Bolger as Postmaster General. Pl.’s Ex. 538 ¶ 12 (Stipulated Facts). Under pressure to reduce

operational losses and increase mail sorting automation in the face of low adoption of Zip+4

codes, PMG Carlin announced a mid-course correction on July 12, 1985 and, consistent with the

OTA Report recommendation, further announced, on August 5, 1985, “that the next automation

procurements would be decided by competitive testing, in two phases: Phase IIA would involve

retrofitting ECA’s existing SLOCRs with MLOCR capabilities, and Phase III would involve the

purchase of new MLOCRs.” Pl.’s Ex. 538 ¶¶ 15, 16 (Stipulated Facts). The contract for the

Phase III purchase of new MLOCRs was estimated to be up to $400 million dollars. 7/10/14 AM

Tr. at 93 (Clauson Testimony). Set against this backdrop of procurement decisions, certain

events occurred in the early summer of 1985 that raised the concern of PMG Carlin and the

Chief Postal Inspector (“CPI”) Charles Clauson about possible corrupt dealings on the BOG.

June 1985 CIC Meeting

At a June 1985 meeting of the CIC attended by CPI Clauson, who was a CIC member,

DPMG Jackie Strange, who served as a member of BOG’s Technology Committee, made an

announcement that made “people in the room . . . aghast . . . and shocked” and “thirty years later

[it was] still edged in [their] mind[s].” 7/10/14 AM Tr. at 100-01 (Clauson testimony).25 Ms.

Strange advised that the CIC “would not be asked for a decision on [the OCR] procurement,” id.

25

CPI Clauson recalls that this was the first CIC meeting attended by Ms. Strange. 7/10/14 AM Tr. at 101 (Clauson

testimony).

39

at 100, because the Technology Committee had decided to give a sole source procurement

contract, without competition, to REI, id. at 101. CPI Clauson testified that Ms. Strange’s

announcement was particularly disturbing because “the technology committee of the board

specifically, is telling us [referring to the CIC] they want approval of this. They’re telling us, not

asking us to give them approval [for] . . . sole source procurement.” Id. at 109.

After this meeting, CPI Clauson instructed Postal Inspector Dan Harrington to investigate

what was going on within the Technology Committee. 7/10/14 AM Tr. at 102-03 (Clauson

Testimony). CPI Clauson told Postal Inspector Harrington “that [he] wanted to really start

checking out with greater intensity what was going on here, what the . . . technology committee

of the Board of Governors was up to, who they were in contact with . . .[j]ust an inquiry to check

out to see what was going on here.” Id. at 102-03.26 CPI Clauson testified that his “suspicions

were directed directly at Voss.” Id. at 103. His “suspicion” grew because he “saw Voss get

himself assigned to the . . . technology committee . . . saw him place a person as the head of [the]

technology committee who was generally considered incompetent, a person he could easily

manipulate. Id. at 108.

A few days after the CIC meeting, Ms. Strange “called [CPI] Clauson to her office for

another reason . . . [a]nd at the conclusion of a brief discussion . . .she got up, closed the door and

began talking about [the OCR] procurement.” Id. at 111. Ms. Strange “indicated that Voss had

threatened her regarding complying with his preference to give a sole source procurement

contract to REI and that “he had misrepresented himself as speaking for the [BOG] in attempting

to maneuver these preferences to actual commitment of a contract.” Id. at 115; see Defs.’ Ex. 19

(Memorandum of Interview of Jackie Strange, dated July 18, 1985, by CPI Clauson (“Strange

26

As noted, supra, at n. 5, the plaintiff originally named Postal Inspector Harrington as a defendant in the Bivens

action, but he was subsequently dismissed after his death.

40

Interview”)). While “she had no evidence whatsoever of personal gain on the part of any

persons involved in the [OCR Procurement] process” Ms. Strange expressed “her belief that no

person would go to the extremes that Voss had gone to in an attempt to influence the

procurement without some personal gain.” Id. at 115; see Defs.’ Ex. 19 (Strange Interview).

That same day, CPI Clauson arranged for Ms. Strange to speak to Postal Inspector Harrington

about Vice Chairman Voss’ involvement in the OCR procurement process. Id. at 116.

Ms. Strange’s information that “she was being personally threatened” by Vice Chairman

Voss to award REI a sole source contract, highlighted for CPI Clauson the need to investigate

Vice Chairman Voss and he subsequently assigned additional inspectors. Id. at 117.27 At this

time, the focus of the investigation was Vice Chairman Voss, not the plaintiff. Id. at 118;

7/15/14 PM Tr. at 79-80 (Edwards testimony).

PMG Carlin’s Suspicions Aroused

Just as CPI Clauson’s suspicions had been heightened by Ms. Strange’s announcement of

the BOG Technology Committee’s direction to the CIC about awarding a sole source contract to

REI, PMG Carlin was concerned about the Technology Committee’s focus on a single vendor,

REI, in the procurement process. 7/8/14 AM Tr. at 40-41 (Carlin testifying: “And I have to say

that in no other instance was the board so insistent on providing a contract to a specific

individual as this one.”); id. at 119-20 (Carlin testifying: Peter Voss and Ruth Peters “in effect

became spokesmen for that organization”); id. at 120 (Carlin testifying: “you had one member of

the board who was in effect acting as if he was a surrogate for a single vendor and doing unusual

27

The ZIP+4 Report to Congress describes the “quickly assembled” task force as consisting of “Regional

Chief Inspector Joseph M. Kelly, along with Inspector Edwards and Inspector Bruce Chambers.” Pl.’s Ex. 229 at

294. In addition to DPMG Strange, the inspectors interviewed H. Currie Boswell, another USPS manager, who

corroborated information about pressure applied by Vice Chairman Voss to award a sole source contract to REI and

who “advised the Inspectors that Governor Voss had made comments to others that their careers in postal

management could be adversely affected if they did not support him on the MLOCR issue.” Id. at 294.

41

things”). Indeed, soon after Paul Carlin succeeded PMG William Bolger as USPS’ PMG, Vice

Chairman Voss pressured PMG Carlin to meet with GAI as representatives of REI in January

1985. 7/8/14 AM Tr. at 121 (Carlin testifying that he agreed to meet with GAI because Vice

Chairman Voss “insisted”). Also at Vice Chairman Voss’ request, PMG Carlin inspected REI’s

MLOCR prototype equipment in Chicago. Id. at 23 (Carlin testifying that at request of “Peter

Voss, a member of the board,” he looked at prototype of REI machine “located in Chicago post

office” and “the day-to-day operating officials . . . said it’s a nice machine. It just doesn’t help

us. We don’t use it at all.”); id. at 44 (Carlin testifying “at the request of Peter Voss I did look at

. . . one of five that had been provided by REI. What I found was that it was a nice machine. It

just didn’t work at that time in an operating environment. And the operating people told me we

have too much mail coming through. We just can’t keep trying to mother this thing along.”).

PMG Carlin described the depth of involvement in the procurement process of BOG

members as “highly unusual” and “out of the ordinary.” 7/8/14 AM Tr. at 118. This left the

distinct impression on him that “particularly one member . . . seemed to me had a vested interest

in the outcome.” Id. at 56. When PMG Carlin announced the mid-course correction in July,

1985, Vice Chairman Voss pushed for a sole source contract to be awarded to REI. 7/8/14 AM

Tr. at 23-24, 40-41 (Carlin testimony). After he began cooperating, Vice Chairman Voss

confirmed that “he responded to the pressures of Gnau and Associates, Inc. and Recognition

Equipment, Inc. by pressuring Postmaster General Carlin and management to either award a sole

source contract to Recognition Equipment, Inc. or test the competing machines within the next

60 days” because he “believed that a tightened test schedule would favor Recognition

Equipment, Inc.” Defs.’ Ex. 65 at 11 (Interview Summary of Peter E. Voss presented to grand

jury on August 28, 1986 (“Voss G.J. Interview Summary”)); see also Pl.’s Ex. 165 at Bates

42

SMFC3 11402 (“Factual Foundation Supporting Guilty Pleas” of Peter Voss, dated May 30,

1986, stating: “During May, June and July 1985, Peter Voss encouraged, recommended and

instructed the Deputy Postmaster General that USPS purchase the MLOCR system from the

Dallas corporation” and “to bypass the established review/approval process”). PMG Carlin

testified that he “had been a member of the senior management since postal reorganization for 15

years at that point. Never once do I recall any single procurement, a company that was trying to

get a contract, approaching and trying to manipulate the Board of Governors. This was the sole

exception.” 7/8/14 AM Tr. at 118.

PMG Carlin was apparently not alone in observing suspicious conduct by BOG members.

He testified about being “alerted by counsel to the Board of Governors that there was

skullduggery going on and that somebody could go to jail.” 7/8/14 AM Tr. at 50 (Carlin

testimony). Due to his concerns, PMG Carlin asked CPI Clauson to take the “highly unusual”

step of assigning a Postal Inspector to monitor the new procurement phases instituted with the

July 1985 mid-course correction, 7/8/14 PM Tr. at 57 (Carlin testimony), and ensure the process

“was as fair and straightforward as it should be,” id. at 117. PMG Carlin publicly announced this

measure in a July 14, 1985 memorandum to the BOG. Id. at 56; Pl.’s Ex. 73 (PMG Carlin

Memorandum to BOG, dated July 14, 1985).

To carry out PMG Carlin’s instruction for a dedicated Postal Inspector to monitor the

next procurement phases in the USPS automation program, CPI Clauson assigned Postal

Inspector Edwards “to monitor the procurement of multi-line equipment.” 7/15/2014 AM Tr. at

79 (Edwards testimony); Edwards Dep. at 25-26, Feb. 15, 2000. Postal Inspector Edwards

testified that, when given this assignment, CPI Clauson did not ask him to look into REI, and he

43

“did not care which vendor won the [OCR Procurement] competition, [he] simply wanted the

most reliable, accurate, lowest cost vendor to win legitimately,” 7/15/14 AM Tr. at 79-80.

In sum, by July of 1985, after being informed by Ms. Strange that Vice Chairman Voss

used threats to persuade her to comply with his desire to award a sole source multi-million dollar

OCR procurement contract to REI, CPI Clauson had decided to open an investigation into the

conduct of members of the BOG Technology Committee, particularly Vice Chairman Voss. The

concerns of PMG Carlin about the need to protect the procurement process only compounded

CPI Clauson’s suspicions.

4. Plaintiff and REI’s Dealings with USPS Through Summer 1985

By July 1985, when CPI Clauson assigned Postal Inspectors to begin an investigation into

BOG’s Technology Committee and Vice Chairman Voss, the plaintiff had been REI’s CEO for

slightly over three years. In that time, he had undertaken a multi-pronged effort to increase

USPS’s purchases of REI’s MLOCR machines. The critical underpinning of the plaintiff’s claim

of malicious prosecution is that he was targeted for criminal investigation and prosecution due to

those efforts and, in particular, the plaintiff’s public criticism of USPS management for choosing

to deploy SLOCR technology in the early 1980’s. In the plaintiff’s view, his aggressive pursuit

of USPS business for REI generated animosity towards him and his company by USPS

management and resulted in his indictment. In evaluating the merits of this claim, a brief review

of the historical business dealings between REI, the plaintiff and the USPS is helpful.

Significantly undercutting the plaintiff’s view that USPS animosity towards the plaintiff

was due to his public criticism of the USPS automation program is the evidence presented by the

plaintiff at trial showing that before the plaintiff had engaged in any First Amendment protected

activity, REI already had a “strained” relationship with USPS. 6/24/14 AM Tr. at 112 (Plaintiff

44

testimony). Indeed, he testified that upon becoming CEO of REI in 1982, he set out to fix the

company’s relationship with USPS, since REI was on the brink of bankruptcy and increasing the

postal business was one way to help turn the company around. 6/24/14 AM Tr. at 100-10. The

plaintiff testified that his strategy to stabilize REI financially was “[n]ot at all” dependent on

getting USPS business and that his decision “was whether we are going to pull the plug on postal

or we were going to double down.” 6/24/14 AM Tr. at 110; id. 6/25/14 PM Tr. at 66 (Plaintiff

testifying that: “I was trying to . . . decide whether to fish or cut bait with the postal service.”).

Shortly after he joined REI, the plaintiff reached out to then PMG William Bolger to

“kind of try to smooth things out.” 6/24/14 AM Tr. at 114 (Plaintiff testimony). PMG Bolger

agreed to meet with the plaintiff about the state of REI’s technology, id. at 115, and even

suggested that REI might benefit from using a consulting firm, id. at 120. As reported in a Postal

Inspector memorandum summarizing a November 20, 1985 meeting with the plaintiff, the

plaintiff advised that PMG Bolger had “cited the past arrogance of REI management, but

indicated there was no reason they could not do business in the future.” Pl.’s Ex. 105 at 2.

At the time of the plaintiff’s meeting with PMG Bolger in early 1982, USPS had already

made a multi-year, multi-million dollar research and development investment in REI and had

purchased about five REI prototype machines that were installed in various USPS field locations.

Id. at 117-18; Pl.’s Ex. 25 at 32 (OTA Report noting that “USPS has provided enough support

over the last 14 years to [REI] (of Dallas, Texas) such that REI has developed one of the leading

multi-line OCRs on the world market”). The plaintiff admitted that “there were some criticism”

of the performance of REI’s MLOCR machines but attributed that to deficient air-conditioning at

some locations. 6/24/14 AM Tr. at 118, 133. While the plaintiff did not believe the criticisms to

be “a show-stopper to us,” this was apparently not a view shared by USPS, which had

45

experienced scheduling delays and other issues with REI’s performance. See, e.g., 7/1/14 PM

Tr. at 20 (Jellison testifying: “we did not want to buy the machine that [REI] had. The machine

was not up to date technologically, and we did not want to buy more of those machines.”); 7/8/14

AM Tr. at 116 (Carlin testifying that he inspected an REI prototype machine in Chicago and “[i]t

was not operating”); Pl.’s Ex. 291 at Bates SMFC4 00006 (“Details of Offense” prepared by

Postal Inspectors, reporting that “[t]he USPS experience with REI was marred by cost overruns,

delays in delivery of contracted services and unsatisfactory performance of machines after

installation.”); Defs.’ Ex. 55 at 4 (Postal Inspectors’ Preliminary Report, dated February 1986,

noting that “[t]he REI-USPS relationship, however, had been unsatisfactory and prone to cost

overruns, missed delivery schedules and equipment that was not state of the art.”).

Rather than focus on fixing the problems perceived by USPS with REI’s MLOCR

machines, the plaintiff pushed forward with finding ways to secure more business. See, e.g.,

Pl.’s Ex. 196 at 10 (Interview Summary of Michael Marcus presented to grand jury on Oct. 23,

1986 (“Marcus G.J. Interview Summary”) reporting Marcus statement that, at GAI’s first

meeting at REI Headquarters, “it was apparent that REI wished to continue a political approach .

. . based on Robert Reedy’s instruction to stay away from the technical details and statistics when

discussing the REI multi-line machine with USPS management”). Indeed, the plaintiff did not

testify about doing anything to address any perceived problems with the operations of REI’s

MLOCR machines. Instead, REI hired a Washington, D.C.-based consulting firm, Hill &

Knowlton, to “go after a lot of government business, including postal” and to “understand better

the various procurement strategies of government agencies. 6/24/14 AM Tr. at 119 (Plaintiff’s

testimony).

46

In addition, the plaintiff testified that he lobbied Congress “fifty” times on this issue. Id.

at 123-24. The plaintiff wanted members of Congress to “understand that [REI] had the only

machine–I know it was American built–that could satisfy the long-term needs of the postal

service to process mail” and that was the “theme that [the plaintiff] kept hitting.” Id. at 124. He

also testified critically before Congressional committees about USPS’ commitment to SLOCR

machines because he “didn’t think the ZIP +4 projections were anywhere near reasonable and

[that the USPS] had to fall back and go to the multi-line approach.” Id. at 127.

In both August and November 1983, the plaintiff wrote to PMG Bolger urging the USPS

to reconsider deployment of SLOCR technology. Pl.’s Ex. 11 (Letter, dated August 24, 1983,

from plaintiff to Bolger); Pl.'s Ex. 16 (Letter, dated November 14, 1983, from plaintiff to

Bolger). In response to the latter letter, the plaintiff recalled that PMG Bolger indicated that a

study by the Congressional Office of Technology Assessment (“OTA”) “was coming” to

evaluate the automation project and that the plaintiff “should kind of hold off [his] criticisms.”

6/24/14 AM Tr. at 127-28. In fact, the plaintiff testified that he was aware of the OTA study and

had communicated his critical views about USPS’ choice of SLOCR technology with the

members of Congress who had requested the study, or their staffs. Id. at 131. Indeed, according

to another witness, OTA staff preparing the OTA Report “had been very well briefed by REI,”

which “had a heavy influence on the perception that these guys got.” 7/1/14 PM Tr. at 45

(Jellison Dep. testimony). When the OTA Report was issued in June, 1984, the plaintiff “felt

vindicated” and “because [REI] had the only multi-line machine that was deployable,” he

thought REI was “in a position to get some business.” 6/24/2014 AM Tr. at 132- 134.

As noted, supra, in Part III. A.2., the OTA Report, had recommended continued purchase

of SLOCR machines, but with a plan to convert such machines to MLOCR. Consistent with part

47

of this recommendation, USPS moved forward in purchasing additional SLOCR machines by

awarding a contract in July 1984 to ECA. See Pl.’s Ex. 538 ¶ 11 (Stipulated Facts). Nonetheless,

in the plaintiff’s view, USPS management was “ignoring our technology,” 6/24/14 PM Tr. at 14,

and he and his REI team then began to “double down” on their pursuit of USPS business. In

fact, faced with the USPS decision to purchase additional SLOCR machines, the plaintiff advised

PMG Bolger that REI was going to lobby Congress and “go directly to his Board of Governors.”

6/25/14 AM Tr. at 94-95 (Plaintiff’s testimony).

The plaintiff did “go directly” to the BOG. In a July 1984 letter to Vice Chairman Voss,

the plaintiff complained about “USPS management… dig[ging] in its collective heals” to

purchase SLOCR machines incorporating “foreign developed technology which is substantially

inferior to proven technology available in this country.” Pl.’s Ex. 31 (Letter, dated July 2, 1984,

from plaintiff to Vice Chairman Voss).28 The plaintiff further recommended that the “current

Phase II procurement” be “split . . . along 90-10 lines,” which “would mean that my company

would receive funds to build an additional 30-40 multi-line readers similar to the five (5)

machines currently installed and operating in various post office locations today.” Id. The

plaintiff also spoke directly to Vice Chairman Voss in July 1984 and, during that conversation,

Vice Chairman Voss told the plaintiff to “[s]tay in the game” because “[c]onditions have been

changing” and “[t]hey are favorable to you guys.” 6/25/14 AM Tr. at 83-87 (Plaintiff

testimony). Vice Chairman Voss also told the plaintiff that he was “making points, taking heat,

28

The plaintiff’s perspective that USPS management, including most prominently, James Jellison, who

served at this time as Senior Assistant Postmaster General in charge of the automation program, staunchly advocated

only SLOCR technology is belied by other evidence presented at trial. Contrary to the plaintiff’s view, Mr. Jellison

testified, via deposition, that he wanted to adopt MLOCR technology but, at the time the original purchase of

SLOCR equipment was made, no company had operational MLOCR equipment, see 7/1/14 PM Tr. at 5-6, 25-26,

31, 38-39, 61-62, 64-65, and REI’s machines were “not up to date technologically, and we did not want to buy more

of those machines,” id. at 20.

48

and working for you,” id., which comments were documented by Vice Chairman Voss’s

administrative assistant in her handwriting on the top of that the plaintiff’s July 1984 letter.

7/10/14 PM Tr. at 92 (Hartman testimony); Pl.’s Ex. 31 (Letter, dated July 2, 1984, from Plaintiff

to Voss).29

September 3, 1984 Meeting of Vice Chairman Voss with REI Vice

President Robert Reedy

As part of REI’s effort to pursue a USPS contract aggressively, Mr. Reedy met with Vice

Chairman Voss on September 3, 1984 at a restaurant in Dallas, Texas.30 At the meeting, Vice

Chairman Voss recommended that REI hire GAI to help “improve our business with the Postal

Service.” 6/24/14 PM Tr. at 16 (Plaintiff testimony). By this time, John Gnau from GAI had

arranged with Vice Chairman Voss that “Voss would receive a commission equal to 30% of the

fees generated by Voss’ referrals.” Defs.’ Ex. 65 at 2 (Peter Voss Interview Summary presented

to grand jury on August 28, 1986 (“Voss G.J. Interview Summary”)). Afterwards, Frank Bray

discussed the dinner meeting with Mr. Reedy, and told the Postal Inspectors that Mr. Reedy

described Vice-Chairman Voss as wanting a private place out of public view and appearing

nervous about being seen with Mr. Reedy. Pl.’s Ex. 262 at 262 (Tr. of Frank Bray Grand Jury

testimony, dated July 16, 1987 (“Tr. Bray G.J. testimony”), stating “Mr. Reedy reported to Frank

29

Sharon Peterson, Vice Chairman Voss’ administrative assistant, reported to the Postal Inspectors during

the course of the criminal investigation that Peter Voss only became an advocate on the MLOCR issue after he made

a kickback arrangement with GAI and had targeted REI as a potential source of the bribery funds. Pl.’s Ex. 535 at 4

(Sharon Peterson Interview Summary presented to the grand jury on September 19, 1986 (“Peterson G.J. Interview

Summary”), stating “Peter Voss targeted [REI] as a client of GAI,” sometime after he arranged with John Gnau to

receive a 30% share of all fees Gnau received as result of clients referred by Voss); id. at 11 (“Peter Voss’ targeting

of REI as a potential client of GAI preceded Voss’ active advocacy of multi-line as later demonstrated when he

directed management to make a sole source award to REI.”).

30

The facts are murky about how this meeting was arranged. Mr. Voss testified that Mr. Reedy called him

to invite him to dinner, Pl.’s Ex. 160 at 4 (Memorandum of Interview of Peter Voss, dated May 9, 1986); Pl.’s Ex.

214 at 14 (Tr. of Peter Voss Grand Jury testimony, dated Aug. 28, 1986) (“Tr. Voss G.J. testimony”)), while Frank

Bray testified that Vice Chairman Voss initiated the contact with REI and the dinner meeting, Pl.’s Ex. 262 at 35

(Tr. of Frank Bray Grand Jury testimony, dated July 16, 1987 (“Tr. Bray G.J. testimony”), stating that the dinner

meeting in September 1984 was arranged when “Voss had telephoned Reedy at Reedy’s residence to schedule the

meeting).

49

Bray that Voss appeared a little uncomfortable during the meeting and Voss sought a table

outside the hearing distance of other patrons”). When Mr. Reedy reported to the plaintiff about

the dinner meeting, the plaintiff instructed Mr. Reedy “don’t drop the ball on this one,” referring

to the hiring of GAI, since he did not want to “make Peter Voss mad at us.” 6/24/14 Tr. PM Tr.

at 17 (Plaintiff testimony). Indeed, after the dinner meeting, Vice Chairman Voss contacted the

plaintiff and Mr. Reedy on several occasions to ask about the status of hiring GAI. 6/24/14 PM

Tr. at 23 (Plaintiff testifying that Voss may have contacted him by telephone indicating “[h]e

was interested in not hanging this guy Gnau out to dry, let’s get something done one way or the

other.”).

Early 1985 Retention by REI of GAI

Following a meeting at REI headquarters in January 1985 with John Gnau, REI retained

GAI in February 1985, with a written agreement back-dated to January 15, 1985, on the

following terms: GAI would be paid one percent of any revenue generated from the USPS, and

$30,000 in three installments of $10,000 each, which amount would be deducted from the “one

percent override on the revenue associated with the contract.” 6/24/14 PM Tr. at 20-21 (Plaintiff

testimony); 6/25/14 AM Tr. at 23 (Plaintiff testimony); Pl.’s Ex. 51 (REI’s contract with GAI).

The GAI retainer agreement was subsequently increased to $22,000 per month. 6/25/14 AM Tr.

at 23-24 (Plaintiff testimony). In comparison, REI was paying its other “prestigious” consultant,

Hill & Knowlton, $5,000 per month. 6/25/14 AM Tr. at 24, 66 (Plaintiff testimony). The

plaintiff explained that the increased monthly retainer to GAI was due to an “expanded set of

responsibilities and actions that we required of them, yes.” 6/25/14 AM Tr. at 24. During the

Postal Inspectors’ investigation, subpoenas were issued to ascertain the nature of these expanded

responsibilities assigned by REI that warranted the doubling of GAI’s monthly retainer to an

50

amount that was quadruple the amount paid to REI’s other, well-established Washington, D.C.-

based consultant.

July 1985 Lobbying by Plaintiff for “Buy American” Amendment

In July 1985, the plaintiff traveled to Washington, D.C. to meet with members of

Congress about the so-called “Buy American” amendment sponsored by the Congressman from

the plaintiff’s home district. 6/24/14 PM Tr. at 38 (Plaintiff testimony). This amendment

essentially required USPS to spend at least $200,000,000, by October 1, 1985, “for the

acquisition of American-designed technology for automation of mail processing.” Pl.’s Ex. 78

(Amendment to H.R. 3036 sponsored by Rep. Frost, dated July 25, 1985). REI was the only

American firm at the time of the proposed amendment that made “American-designed

technology” for OCR machines and, consequently, if the Frost “Buy American” amendment

passed, the USPS would have had a single source to meet the requirements of the amendment

and would have been required to buy REI machines. See 6/25/14 PM Tr. at 99-101 (Plaintiff

testimony). Indeed, the plaintiff testified that he wanted enactment of the amendment “to make

sure we got some postal business.” Id. at 37. This amendment was never acted on by the House

of Representatives. Id. at 101 (Plaintiff’s testimony).

According to PMG Carlin, this amendment, if enacted, would not have affected the

procurement process since USPS used non-appropriated funds for procurement and the

amendment only imposed conditions on appropriated funds used to support mailing for non-

profit organizations and the blind. 7/8/14 at 70 (PMG Carlin testifying: “[o]ur Appropriations

Act was a limited amount of money, approximately a billion dollars, and it was for the purpose

of providing free mailing to the blind, free mailings to the Congress and to some other non-profit

organizations. That’s all that it applied to.”).

51

Investigation of Plaintiff

PMG Carlin testified that as part of the July 1985 mid-course correction to the USPS

automation program, he envisioned competitive testing of the available technology for the next

procurement phases. Rather than disregard REI’s machines out of any animosity, he “wanted a

competitive process so that we would have two machines going side by side and we get the best,

pick the best of them. Now, I was not clear at the beginning whether it would be one or we

choose both of them. I had no position on that. I just wanted to make sure that the Postal Service

received equipment that worked all of the time. And worked as intended and at the best price.”

7/8/14 AM Tr. at 119. He also wanted to ensure that the process was above-board and, to this

end, requested from CPI Clauson the dedicated monitoring by a Postal Inspector. CPI Clauson

has assigned Postal Inspector Edwards to this task. In the Fall of 1985, Postal Inspector Edwards

was “still focused largely on the procurement and the need to have it go according to the

procurement regulations.” Edwards Dep. at 292, Feb. 15, 2000. Postal Inspectors Hartman,

Kormann, and McIntosh were subsequently assigned to the investigation.31 When Postal

Inspector Hartman joined the investigation, Postal Inspector Edwards told him that “[u]p until

that point, there was an investigation or review of potentially improper activity by a particular

Board of Governor member, Peter Voss. And also suspect activity by another governor, Ruth

Peters.” 7/10/14 PM Tr. at 40-41 (Hartman testimony).

The Postal Inspectors then became aware of an allegation made by AEG that “William

Moore, the CEO of Recognition Equipment, Incorporated had proposed a deal to split two

31

While Postal Inspector Edwards was the first Postal Inspector assigned to the investigation, 7/15/14 PM

Tr. at 79 (Edwards testimony), Postal Inspector Hartman was assigned to assist in the investigation in October 1985.

Id. at 91-92; Edwards Dep. at 26, Feb. 15, 2000. A month later, when the investigation expanded to focus on the

plaintiff, Mr. Reedy, and REI, Messrs. Kormann and McIntosh were assigned to the investigation. Edwards Dep. at

26-27, Feb. 15, 2000. The parties agree that the only role Mr. Robbins played in the investigation was administering

a polygraph examination to William Spartin in December of 1986.

52

contracts, one for REI and one for AEG Telefunken.” See 7/10/14 PM Tr. at 41 (Hartman

testimony). AEG officials had filed a similar complaint with the German Embassy. 7/14/14 PM

Tr. at 23 (Hartman testimony). This allegation posed an obvious risk of undermining the

competitive testing of equipment envisioned by the mid-course correction and, as part of PMG

Carlin’s direction to monitor closely the procurement process for the automation program, the

Postal Inspectors turned their attention to this allegation about the plaintiff.

1. November 1985 Interview with AEG Officials

In early November 1985, the Postal Inspectors interviewed AEG officials regarding their

allegation that the plaintiff had proposed a deal to split the OCR procurement contracts. 7/10/14

PM Tr. at 43-44 (Hartman testifying: “the general topic of the interview with the officials from

AEG” was “[the plaintiff’s] offer of a compromise or deal where REI would get the phase three

multi line stand-alone agreement. And AEG Telefunken would receive the phase [II]A

conversion agreement to split the two contracts between the two companies.”). According to

AEG, the plaintiff threatened that if AEG did not agree to the deal, the plaintiff “could kill the

phase [II]A conversion program.” 7/10/2014 PM Tr. at 45 (Hartman testimony).

Following the meeting with AEG representatives, the Postal Inspectors sought guidance

from two supervising attorneys at the United States Department of Justice (“DOJ”)’s Public

Integrity and Fraud sections. Postal Inspector Hartman testified that they met with the DOJ

attorneys for “advice, guidance, [to] determine whether or not we could possibly start a grand

jury investigation” because “[a]t that time, we had limited experience in antitrust matters” and

whether the plaintiff’s offer was “an antitrust violation.” 7/10/14 PM Tr. at 44-45. According to

the Postal Inspectors’ memorandum to their supervisor, CPI Clauson, summarizing the DOJ

meeting, the attorneys did not believe “that a federal criminal act had occurred on the basis of

direct evidence we have at this time,” but “were positive and supportive of our efforts to date.”

53

Defs.’ Ex. 51 at 1. One of the DOJ attorneys even presciently opined that “[g]ratuities…will be

forthcoming.” Id. The DOJ attorneys recommended that the inspectors continue the

investigation and suggested certain investigatory steps, including “investigating vendor’s (REI)

intention and capability of actually competing on Phase II conversion” and analyzing documents

“to detect and establish a pattern of irregular, possibly unethical behavior and possible perjury . .

..” Id.

In accordance with the DOJ attorneys’ instructions, the Postal Inspectors continued their

investigation by conducting interviews with persons within USPS and REI involved in the

automation program and gathering documentary evidence based on the leads they garnered

through these interviews.

2. November 20, 1985 Interview of Plaintiff and Subordinates

On November 20, 1985, Postal Inspectors Hartman and Edwards interviewed the plaintiff

at REI headquarters in Dallas, Texas regarding AEG’s allegations. 7/10/14 PM Tr. at 51

(Hartman testimony). REI’s Vice President of Sales and Marketing, Robert Reedy and REI’s

Vice President of Distributors Sales and Manager of Postal Programs, Frank Bray, were also

present at this interview. Id. Postal Inspector Hartman asked “Mr. Moore, Mr. Reedy and Mr.

Bray if any of them had ever met with or spoken to a Board of Governors member on an

individual basis. In other words, one on one.” Id. at 56. This question was prompted by

suspicions about whether Vice Chairman Voss “had some sort of financial relationship or reason

that he was pushing so hard for a sole source contract with REI.” Id. “[I]f Voss does have an

improper financial relationship with REI, then it would follow that he likely had spoke[n] with

them or met with them. So that is why I asked the question to see whether or not any of these

gentlemen had met with or even spoke to a governor.” Id. at 57. When he asked the question,

Postal Inspector Hartman “was looking at [the plaintiff]” but “Mr. Reedy answered that question

54

. . . [h]is answer was no, that they had not met with any governor individually.” Id. Postal

Inspector Hartman made a record of this answer in his notes that: “Reedy never talked to board

members individually.” Defs.’ Ex. 52 at USA-010-0529 (Hartman handwritten notes on Nov. 20,

1985). After hearing Mr. Reedy’s answer, Postal Inspector Hartman “looked in the direction of

the plaintiff . . . [who] nodded affirmation of Mr. Reedy’s answer.” 7/10/14 PM Tr. at 57; see

also 7/11/14 PM Tr. at 7 (Hartman testifying: “Reedy answered and Mr. Moore affirmed.

Nodded.”). In a follow-up question, Postal Inspector Hartman asked “when you did meet with

the Board of Governors were all three of you always present[?]” 7/10/14 PM Tr. at 58. The

plaintiff said “yes, with the exception when one of them stepped in and out of the room for some

reason.” Id.32 The Postal Inspector’s notes of this meeting and their testimony reflect that at no

point did the plaintiff and his subordinates indicate that Mr. Reedy had met over dinner with

Vice Chairman Voss in September 1984.

The plaintiff denied any recollection of this question being asked or Mr. Reedy’s answer,

and testified that if he had thought that Mr. Reedy had lied to the Postal Inspectors, he “would

have said, Reedy, tell them the truth.” 6/24/14 AM Tr. at 122-23 (Plaintiff testimony).

3. Postal Inspectors Learn of Relationship between REI and GAI

In December 1985, the Postal Inspectors learned that REI had retained two consultants:

GAI and Hill & Knowlton. 7/10/14 PM Tr. at 62-63 (Hartman testimony). They also learned

32

The Postal Inspectors summarized the November 20, 1985 interview with the plaintiff and his

subordinates at REI in a memorandum, which reports that the plaintiff indicated attending meetings with USPS

BOG’s Technology Committee on three occasions, prior to the November 4, 1985 meeting: in March 1985 at USPS

headquarters; in April 1985 at REI Headquarters; and in May 1985 at REI Headquarters. Pl.’s Ex. 105 at 3. The

memorandum then reports: “Mr. Moore stated that Bray, Reedy and himself were all present at meetings with USPS

Board of Governors, with the exception when one of them stepped in and out during the course of the meeting. Mr.

Reedy added that they [REI’s Bray, Reedy and Moore] never talked to individual Board members, but rather they

spoke to Technology Committee members as a group [the Technology Committee]. Messrs. Moore and Bray

nodded affirmatively to Mr. Reedy’s statement. Mr. Moore related that it was clear to Messrs. Voss and Camp and

Ms. Peters that REI had a working product and that these meetings resulted in REI’s May 1985 proposal to the

USPS.” Id. (emphasis in original).

55

through a Dun and Bradstreet report that GAI was a three-person firm based in Detroit,

Michigan, with John Gnau as chairman, William Spartin as president, and Michael Marcus as

vice president and treasurer. Id. at 63-64. Postal Inspector Hartman placed a telephone call to

GAI’s office and “the receptionist or the individual answering the phone said ‘MSL,’” which the

Postal Inspectors found out was an executive recruitment firm with the same president as GAI:

William Spartin. Id. at 64. At the time, this fact “did not mean much,” but it became significant

later in the investigation. Id. at 64, 69 (Hartman testimony).

4. January 6, 1986 Firing of Postmaster General Carlin

On January 6, 1986, PMG Carlin was fired after just one year of service as PMG, and

replaced by Albert Casey. 7/10/14 PM Tr. at 71-74 (Hartman testimony). Shortly thereafter, the

Postal inspectors learned of two events that heightened their suspicions about REI’s involvement

with possible corruption within USPS.

First, in what can only be called a strange coincidence, a Postal Inspector struck up a

conversation with a female passenger sitting next to him on a train, on December 13, 1985.

When the woman found out that “he worked for the post office,” the woman told the inspector

that Paul Carlin’s firing was “imminent.” 7/10/14 PM Tr. at 73 (Hartman testimony). This

occurred three weeks before PMG Carlin was actually fired “[a]nd the passenger indicated to the

postal inspector that one of the reasons he was going to be fired was the delay in awarding a

multi-line contract to REI.” Id. The Postal Inspectors later identified the “female passenger” as

Midge Gnau, the daughter of the GAI chairman, John Gnau. Id. 33 Postal Inspector Hartman

33

When Midge Gnau was subsequently interviewed by the Postal Inspectors, she confirmed her

conversation with Postal Inspector David Smith on an AMTRAK train from New York City to Philadelphia and that

she had been told by both William Spartin and her father, John Gnau, prior to December 13, 1985, “that Carlin

would be fired.” Defs.’ Ex. 73 at 2 (Memorandum of Interview of Midge Gnau, dated May 28, 1986).

56

testified that when he learned the identity of the female passenger his reaction was “[g]reater

suspicion of Gnau & Associates, MSL, and now REI is tied into the firing of Paul Carlin.” Id.

Second, on February 5, 1986, a Congressional hearing on the topic of the firing of PMG

Carlin revealed that USPS had hired MSL, which was headed by William Spartin, to find a

replacement for PMG Carlin. Id. at 74. Ironically, PMG Carlin had initially hired William

Spartin from MSL to do executive searches for USPS “[a]t the strong urging and insistence of

Peter Voss,” but PMG Carlin was unaware of Mr. Spartin’s association with GAI or REI. 7/8/14

AM Tr. at 109-10 (Carlin testimony). Postal Inspector Hartman testified that when he heard this

information, “[a] large puzzle piece was now turned over and [the Postal Inspectors] . . . had an

idea of what [they] were investigating and what kind of activity [they] should be focusing on”

because “[n]ow [they] had confirmation that a consultant to REI that had a relationship with

MSL, the head hunter to replace Paul Carlin, had an association with REI.” Id. at 74.

5. Postal Inspection Service Request for Initiation of Grand Jury Investigation

In February, 1986, the Postal Inspectors prepared a written report for the DC USAO

charting the information they had gathered so far during the investigation and to request that a

grand jury investigation be opened. See Defs.’ Ex. 55 (Postal Inspectors’ Preliminary Report,

dated February 1986); see also 7/10/14 PM Tr. at 75, 80 (Hartman testimony). The DC USAO

opened a grand jury investigation and authorized “the issuance of grand jury subpoenas for

telephone toll records, bank account records and credit card records for some of the suspects.”

7/10/14 PM Tr. at 87 (Hartman testimony).34 Postal Inspector Hartman testified that at this stage

34

The first of multiple grand jury subpoenas to REI was issued on April 17, 1986, and requested production

of, inter alia, personnel, employment, travel and telephone records for the plaintiff and Messrs, Reedy and Bray, as

well as records related to REI’s relationship with GAI and GAI’s employees, including records and invoices with or

regarding USPS management and BOG and U.S. Congressmen. Defs.’ Ex. 68 (G.J. Subpoena to REI, dated April

17, 1986).

57

he would have characterized the investigation as a “joint investigation with the United States

Attorney’s office and it . . . became a grand jury investigation.” Id.

From responses to the grand jury subpoenas, the Postal Inspectors learned about check

payments from GAI to Vice Chairman Voss’ company, as well as telephone calls between Voss

and GAI and MSL. Id. at 87-88. Moreover, the Postal Inspectors discovered telephone calls,

from July through December 1984, between Vice Chairman Voss’ office and the REI extension

assigned to the plaintiff. Id. at 89. This telephone contact with REI stopped in December 1984.

Id. at 90. This information was “significant” “[b]ecause after December 1984, REI agreed to

hire GAI and after REI hired GAI, the telephone contract between Voss and REI appeared to

cease.” Id. at 90. The contact between REI and Vice Chairman Voss between July and

December of 1984 was also significant to Postal Inspector Hartman because he believed it

“contradicted [the plaintiff’s] statement to [him] on November 20, 1985” regarding the fact that

REI had not had one-on-one contact with any USPS governor. Id. at 89. This information made

the plaintiff, Mr. Reedy, and REI’s possible involvement in the conspiracy “more suspect than it

was before.” Id. Moreover, the Postal Inspectors reviewed a letter, dated July 2, 1984, from the

plaintiff to Vice Chairman Voss on which someone had handwritten the phrase “making point,

taking heat, working for you.” Id. at 92. Postal Inspector Hartman testified that the handwriting

was that of Voss’ secretary, Sharon Peterson, who was “writing down Peter Voss’ comments

during Peter Voss’ conversation with William Moore.” Id. Postal Inspector Hartman found “it

was suspicious that a Board of Governors member was stating to William Moore that he was

working for you.” 7/10/2014 PM Tr. at 92 (Hartman testimony).

58

6. April 1986 Confession of William Spartin About Illegal Scheme

In April 1986, William Spartin sought and obtained a non-prosecution agreement with

the DC USAO in exchange for his cooperation.35 Pl.’s Ex. 269 at 4-5 (Tr. of William Spartin

Grand Jury testimony, dated September 1, 1987) (“Tr. Spartin G.J. testimony”); 7/10/2014 PM

Tr. at 93 (Hartman testimony). During this and many subsequent interviews, 36 Mr. Spartin

revealed the “large conspiracy, kickback arrangement between John Gnau and Peter Voss. And

he mentioned the relative role of John Gnau and Michael Marcus and the possible participation

of Robert Reedy and William Moore in that kickback arrangement.” 7/10/14 PM Tr. at 95

(Hartman testimony). Mr. Spartin described Vice Chairman Voss as the “mastermind of the

whole deal,” id. at 94, including arranging for REI to hire John Gnau, id. at 95-96; Defs.’ Ex. 56

at 2 (Hartman handwritten notes of April 7, 1986 Interview of William Spartin, stating “Gnau

said he got contract with REI through Voss”). The interview with Mr. Spartin provided “further

evidence of Voss’ individual contact with people at REI and more significantly, that Voss had

something to do with REI hiring [GAI].” 7/10/14 PM Tr. at 96. The Postal Inspectors were

suspicious of Vice Chairman Voss’ recommendation of GAI because GAI was a small Michigan

consulting firm with only three employees and “REI already had a large Washington, D.C.

consulting firm, an international firm named Hill and Knowleton[sic]” working for them. Id.

Vice Chairman Voss also arranged, in early December 1985, for Mr. Spartin to be hired

by USPS BOG Chairman John McKean to conduct the search for the replacement for PMG

35

The non-prosecution and cooperation agreement contained standard terms that obliged the witness to

cooperate with the United States in exchange for immunity from prosecution for his conduct in relation to the illegal

conspiracy. See Pl.’s Ex. 269 at 4-5 (Tr. of William Spartin Grand Jury testimony, dated September 1, 1987) (“Tr.

Spartin G.J. testimony”).

36

Due to the number of people involved in, and duration of, the conduct under investigation, the Postal

Inspectors interviewed some witnesses multiple times to garner, confirm and re-check details. See 7/10/2014 PM

Tr. at 113 (Hartman testimony). Postal Inspector Hartman testified that “it was very typical to interview an

individual in a case like this more than once.” Id.

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Carlin, an opportunity that “excited” “Voss, Gnau and Spartin . . . that they were in a position to

name their candidate as Postmaster General.” Pl.’s Ex. 137 at 18-19 (Interview Summary of

William Spartin presented to the Grand Jury on Sept. 1, 1987) (“Spartin G.J. Interview

Summary”). This information was subsequently confirmed by Vice Chairman Peter Voss. Pl.’s

Ex. 160 at 16-17 (Interview Summary of Peter Voss, dated May 9, 1986 (“Voss Interview on

May 9, 1986”), in which Voss reported that he recommended William Spartin to USPS BOG

Chairman John McKean to conduct the search for a replacement for PMG Carlin); Defs.’ Ex. 65

at 14-15 (Voss G.J. Interview Summary, stating “he introduced William Spartin to John

McKean” and “suggested William Spartin” to McKean “to identify a replacement Postmaster

General”). Mr. Spartin describes how he obtained the name of PMG Carlin’s replacement as

follows: while having lunch with Mr. Gnau at the Maison-Blanche Restaurant in Washington,

D.C., Mr. Gnau received a telephone call from Mr. Reedy, who informed him that the plaintiff

had three names to suggest as Postmaster General candidates, and Mr. Gnau told Mr. Spartin to

call REI to obtain the names. Pl.’s Ex. 226 at 23 (Spartin Polygraph Tr., stating that, during a

lunch, Gnau received a telephone call from someone at REI and Gnau “says talk to Bill Moore,

he’s got some suggestions for you. So I said okay.”); Pl.’s Ex. 137 at 19 (Spartin G.J. Interview

Summary); Pl.’s Ex. 206 at 17 (John Gnau Interview Summary presented to Grand Jury on

October 16, 1986) (“Gnau G.J. Interview Summary”). Upon his return to the office, Mr. Spartin

called the plaintiff, who “seemed to be expecting his call” and “gave me three names,” including

Albert Casey, who “was obviously Moore’s first choice.” Pl.’s Ex. 137 at 19 (Spartin G.J.

Interview Summary); Pl.’s Ex. 226 at 23 (Spartin Polygraph Tr.).

After Albert Casey was successfully installed as the new PMG in early January, 1986,

“Gnau suggested they have a dinner meeting with REI officers to discuss new strategy for

60

obtaining a sole source contract for REI from the USPS,” and this “victory” dinner was arranged

for January 9, 1986 at the Madison Hotel. Pl.’s Ex. 137 at 21 (Spartin G.J. Interview Summary);

Pl.’s Ex. 269 at 41-42 (Tr. Spartin G.J. testimony, referring to dinner “as a victory celebration”).

Vice Chairman Voss subsequently confirmed information garnered from Messrs. Gnau and

Spartin that the plaintiff “recommended Al Casey for the position” to Mr. Spartin and further

indicated his “impression from Spartin’s comments and actions that the multi-line optical

character reader contract would be wired to Recognition Equipment, Incorporated with the

appointment of Al Casey as Postmaster General.” Defs.’ Ex. 65 at 15 (Voss G.J. Interview

Summary); see also Pl.’s Ex. 160 at 20 (Voss Interview on May 9, 1988, in which Voss “said

there was a definite indication Spartin believed that Casey was acquainted with the MLOCR and

would help REI get the contract”).

Mr. Spartin eventually testified, under oath, before the grand jury about his own

involvement and the role of others in the illegal scheme. He testified that, in his opinion, the

plaintiff and Mr. Reedy knew that Vice Chairman Voss was receiving money from Mr. Gnau

relative to the MLOCR procurement. Pl.’s Ex. 269 at 10 (Tr. Spartin G.J. testimony). He

explained the basis for this opinion as follows:

with the many conversations between Mr. Reedy and myself and the many

conversations between Reedy and Mr. Gnau, and my conversations with Gnau

and Voss, that it became – at least in my opinion, I felt that Mr. Reedy knew

that we were somehow taking care of Mr. Voss, because I rationalize that why

would Mr. Voss be so adamant to help us and all the things he was doing,

which we relayed back to Mr. Reedy, just led me to believe that they had to

come to the conclusion that somehow we were doing something to take care of

Mr. Voss . . . they had to know way down deep if they asked themselves or

looked at the issue, that we were – GAI was handling Mr. Voss.

Id. at 11.

61

In particular, Mr. Spartin highlighted Mr. Reedy’s inquiries about, “Why don’t you get

Peter Voss to do this [referring “to order a sole-source contract”]?,” indicating that he knew they

had some sort of control over Vice Chairman Voss. Id. at 12. In addition, Mr. Spartin described

“the agitation on the part of both Moore and Reedy as to why things weren’t progressing faster,

and they kept saying, ‘Geez, we lose any more time, we’re going to lose our competitive

position. We need the contract now. Why don’t you get Voss to do this, or why don’t you get

Voss to do that.’ I mean, they felt all along that we were controlling Voss and they let their

wishes known . . . to both John and myself in terms of what they wanted us to do, and they

wanted the whole thing expedited, they wanted the competitive tests stopped. They just felt that

we should do that.” Id. at 12-13.37

7. April 8, 1986 Postal Inspector Interview with Plaintiff’s Subordinates

On April 8, 1986, the Postal Inspectors interviewed Mr. Bray and Mr. Reedy at REI

headquarters in Dallas. 7/10/14 PM Tr. at 97-98 (Hartman testimony). When Mr. Reedy was

asked how REI came to hire GAI, he told the Postal Inspectors that he was introduced to GAI

from someone at Hill and Knowlton. Id. at 98.38 The Postal Inspectors later learned that this

response was false and that Vice Chairman Voss had recommended GAI to Mr. Reedy at the

dinner meeting in Dallas on September 3, 1984. Id. at 98; Defs.’ Ex. 65 at 4-5 (Voss G.J.

Interview Summary).

37

The plaintiff corroborates Mr. Spartin’s testimony to a certain extent about his conversations with GAI to

get things done within high levels of the USPS. The plaintiff testified that GAI was “always trying to show us that

they were wired in, if you will, that they really knew what was going on,” but that he “discounted that entirely.”

6/25/14 PM Tr. at 161. The plaintiff’s actions, however, belie his testimony that he deemed GAI’s promises to be

mere puffery. His actions reflect that he monitored Mr. Reedy’s progress in retaining GAI, agreed to retain GAI,

increased that retainer to $22,000 per month along with a promise to pay GAI one-percent of any USPS contract

awarded to REI – far more than the amounts paid to what the plaintiff himself described as a “prestigious”

consulting firm—and that he kept close tabs on GAI’s efforts to obtain for REI the award of a USPS sole source

contract. The Court finds the plaintiff’s testimony about not believing GAI was “wired in” not credible.

38

Postal Inspector Hartman testified that he was not in attendance during the interview of Mr. Bray and Mr.

Reedy on April 8, 1986 but was advised of statements made at the interview. Id. at 97-98.

62

At this interview, the Postal Inspectors also asked Mr. Bray whether he knew who

recommended GAI to REI, and he responded, “no.” 6/30/14 PM Tr. at 42 (Bray testimony). Mr.

Bray admitted during his trial testimony that this response was a lie. Id. The Postal Inspectors

also asked Mr. Bray at the April 1986 interview about whether he knew who had recommended

Mr. Casey to be Postmaster General and again he responded “no.” Id. at 43. Mr. Bray admitted

during his trial testimony that this response was also a lie. Id.

8. May 1986 Guilty Plea and Cooperation by Vice Chairman Voss

On May 9, 1986, Vice Chairman Voss was interviewed by the Postal Inspectors and

“spilled his guts” about the kickback conspiracy. Edwards Dep. at 516-17, dated Feb. 15, 2000.

He subsequently entered into a plea and cooperation agreement with the DC USAO. Pl.’s Ex.

165 (Voss Plea Agreement). Over multiple interviews with Vice Chairman Voss, the Postal

Inspectors learned significant information about the operations of the illegal scheme, which they

summarized into a single statement that was reviewed and adopted as true and correct by Vice

Chairman Voss before the grand jury. Pl.’s Ex. 214 at 7 (Tr. Voss G.J. testimony confirming

that he “met many, many days and spent many, many hours . . . being debriefed by various

members of the Postal Inspection Service since May 30th of 1986”); id. at 9 (Voss confirming

that summary of interviews presented to grand jury was true and accurate “to the best of my

memories”); Defs.’ Ex. 65 (Voss G.J. Interview Summary); 7/7/14 AM Tr. at 48 (Hartman

testimony); 7/11/14 AM Tr. at 6 (Hartman testimony); Voss Dep. at 42, Jun. 6, 2014.

Vice Chairman Voss confirmed that, in 1984, he and Mr. Gnau entered into “a business

arrangement wherein Voss would refer potential clients to John R. Gnau and Gnau’s public

relations firm, [GAI]. Mr. Voss and Mr. Gnau agreed that [] Voss would receive a commission

equal to 30% of the fees generated by Voss’ referrals.” Defs.’ Ex. 65 at 1-2 (Voss G.J. Interview

Summary). In August or September, 1984, REI’s Vice President of Marketing, Mr. Reedy,

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contacted Voss and invited him to dinner “to discuss the REI point of view on the multi-line

issue.” Pl.’s Ex. 160 at 4 (Voss Interview on May 9, 1986); Pl.’s Ex. 214 at 14 (Tr. Voss G.J.

testimony). At the dinner meeting, Vice Chairman Voss told Mr. Reedy that REI “was

mistakenly presenting an emotional plea to the [USPS] for the sale of multi-line optical character

readers” when “it should be a more businesslike or intelligent presentation.” Defs.’ Ex. 65 at 4

(Voss G.J. Interview Summary). When Mr. Reedy advised Vice Chairman Voss that REI’s

public relations were being taken care of by Hill & Knowlton, Vice Chairman Voss

recommended that REI retain Detroit-based GAI in the company’s dealings with USPS. Id. at 4-

5. Vice Chairman Voss said that he realized he would receive 30% of all fees that REI paid

GAI. Id. at 5.

Vice Chairman Voss’ purpose in pushing REI to retain GAI was corroborated by his

then-administrative assistant, Sharon Peterson, who entered into a non-prosecution agreement

with the government and testified before the grand jury within a few weeks of Vice Chairman

Voss. Vice Chairman Voss and Ms. Peterson told the Postal Inspectors that, after the dinner

meeting with Mr. Reedy, they alerted Messrs. Marcus and Gnau about USPS MLOCR and

automation issues, arranged for them to meet with PMG Carlin in January, 1985, and urged REI

to consummate the hiring of GAI. Pl.’s 535 at 5-6 (Peterson G.J. Interview Summary, noting her

belief that arranging meeting between PMG Carlin and GAI “aided GAI’s efforts to finally

obtain a contract with REI”); Defs.’ Ex. 65 at 5 (Voss G.J. Interview Summary).

When REI later hired GAI, Vice Chairman Voss “stated that on several occasions during

1985, he discussed with Michael Marcus, John Gnau and William Spartin, both individually and

collectively, the fact that they would all share equally in the proceeds of the 1% commission in

the event Recognition Equipment, Inc. was awarded a contract by U.S. Postal Service.” Id. at 6.

64

Vice Chairman Voss opposed the USPS plan to retrofit with multi-line read capability the

SLOCR machines purchased in Phase I and II of the automation program from REI’s competitor

since this would delay by several years a contract to REI for MLOCRs equipment. Id. at 7-8.

He admitted that his interest in the kickback he would receive from GAI if REI obtained the

MLOCR contract influenced “his decision to press for an order to Deputy Postmaster General

Jackie Strange to freeze the retrofit program.” Id. at 8. Indeed, “his potential receipt of one

quarter of the 1% REI contingency fee were motives for his continued actions to cause an

immediate contract award to Recognition Equipment, Inc.” Id. at 10.

Both Vice Chairman Voss and Ms. Peterson told the grand jury that as part of the effort

to obtain a USPS procurement contract for REI, Mr. Marcus prepared position papers,

memoranda, and letters expressing the views of REI and that were signed by BOG Governor

Ruth Peters, who mistakenly believed they were written by Vice Chairman Voss. Id. at 8; Pl.’s

Ex. 535 at 7 (Peterson G.J. Interview Summary, stating that “Michael Marcus prepared position

papers, letters and memorandums on behalf of the Technology and Development Committee of

the Board of Governors,” which documents were furnished “to Ruth Peters as the independent

and objective work product of Mr. Voss and Mrs. Peterson.”). This information was

corroborated by Mr. Marcus, who admitted to Postal Inspectors that he “routinely and actively

authored Technology and Development Committee letters and memoranda which were furnished

USPS management . . . as the independent and objective work product of either Peter Voss or the

Technology and Development Committee.” Pl.’s Ex. 196 at 14 (Memorandum of Interview of

Michael Marcus on August 5 and 6, 1986).

Vice Chairman Voss also gave GAI “internal [USPS] briefing documents” to assist GAI

and REI in refuting the USPS OCR technology plans. Defs.’ Ex. 65 at 8 (Voss G.J. Interview

65

Summary). Mr. Marcus confirmed that “during the course of the REI/GAI relationship, []

Peterson and [] Voss routinely furnished [him] with the content of USPS policy deliberations,

internal memorandums related to the single-line/multi-line controversy and proposals furnished

the USPS by ElectroCom Automation (ECA), REI’s competitor.” Pl.’s Ex. 196 at 13

(Memorandum of Interview of Michael Marcus on August 5 and 6, 1986); see also Pl.’s Ex. 535

at 7 (Peterson G.J. Interview Summary, stating that she furnished to “GAI, and Mr. Marcus in

particular, copies of internal [USPS] documents concerning the automation issue . . . so he could

rebut [USPS] policy.”).

The assistance to REI went even deeper than preparation of position papers, which

appeared to be authored by the key BOG Technology Committee when they were actually

written by REI’s consultants. Vice Chairman Voss confirmed the involvement of the co-

conspirators, Messrs. Gnau and Spartin, in the removal of PMG Carlin, whom they believed

“was the stumbling block to [REI’s] receipt of a [USPS] production award.” Defs.’ Ex. 65 at 13

(Voss G.J. Interview Summary). Ms. Peterson stated that the three GAI employees, Messrs.

Gnau, Marcu and Spartin “recommended to Voss that Carlin be fired due to his nonsupport of

REI and failure to follow Voss’ instructions to make a sole source award to REI” and that “Peter

Voss actively pursued the removal of Paul Carlin as [PMG] because Carlin was generally

unresponsive to Peter Voss’ desires.” Pl.’s Ex. 535 at 9 (Peterson G.J. Interview Summary).

After new PMG Albert Casey was in place, BOG Chairman John McKean discovered

that William Spartin had been retained to find the new PMG while also serving as the president

of REI’s consulting company. Vice Chairman Voss contacted Mr. Spartin “and advised him of

McKean’s knowledge of the Gnau/Spartin relationship.” Id. at 16. Mr. Spartin responded that

he would contact the plaintiff and discuss the circumstances surrounding the Casey

66

recommendation, and later informed Vice Chairman Voss that, having discussed the matter with

the plaintiff, Mr. Spartin was going to state that Carla Hills, not the plaintiff, recommended

Albert Casey to be the next PMG. Id.

Vice Chairman Voss told the Postal Inspectors that “he did not know if REI knew that he

[Voss] was getting money from John Gnau.” Pl.’s Ex. 160 at 12 (Voss Interview Memorandum,

dated May 9, 1986); see also 7/15/14 PM Tr. 118-20 (Edwards testimony); Voss Dep. at 41, 52,

Jun. 12, 2014. Consequently, his testimony before the grand jury made no reference to his

personal knowledge or opinion about whether the plaintiff or other REI employees were aware

that REI’s payments to GAI were paid, in part, to Voss in an illegal bribery and kickback

scheme. See generally Defs.’ Ex. 65 (Voss G.J. Interview Summary); Pl.’s Ex. 214 (Tr. Voss

G.J. testimony). Vice Chairman Voss testified that “I think if – if implicating [the plaintiff]

would have helped me and it had been true, I would have done it. I told the truth.” Voss Dep. at

52.

Shortly after Vice Chairman Voss pleaded guilty, on May 30, 1986, to accepting a

gratuity and embezzlement and misappropriation of government property, Pl.’s Ex. 538 at ¶ 20

(Stipulated Facts), AUSA Joseph Valder was newly assigned to the case. Id. at 101. AUSA

Valder remained the prosecutor on the case for the rest of the investigation and the Postal

Inspectors communicated with him regularly about the progress of the investigation. Id. Shortly

after this guilty plea, the USPS suspended the competitive testing underway for the next phase of

the automation program, 7/16/ 14 AM Tr. at 37-38 (McIntosh testimony), “pending the outcome

of the investigation relative to Voss’ corrupt influence on the automation program,” Pl.’s Ex. 291

at 108 (Details of Offense); Pl.’s Ex. 229 at 71, 77 (ZIP+4 Report) (noting that both ECA and

REI were selected as vendors to participate in the Phase IIA competitive test, which began in late

67

May 1986, “to design a conversion kit to retrofit the Electrocom Automation Phase II machines

to multi-line” but the test was suspended on about June 6, 1986).39

9. July 25–26, 1986 Follow-up Interviews of Plaintiff and Subordinates and

Review of Plaintiff’s Notebooks

With the revelations of Messrs. Spartin and Voss, the Postal Inspectors arranged another

meeting with REI officials for July 25-26, 1986. 7/11/14 AM Tr. at 106-08. This turned out to

be the last interview with the plaintiff prior to his indictment. 7/14/14 PM Tr. at 82 (Hartman

testifying: “we were not able to interview Mr. Moore after July of 1986”). Postal Inspector

Hartman testified that the most significant take away f

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