Free Memorandum of Contentions of Fact and Law - District Court of Federal Claims - federal

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No. 97-579C (Judge Williams) IN THE UNITED STATES COURT OF FEDERAL CLAIMS SGS-92-X003, Plaintiff, v. THE UNITED STATES, Defendant. DEFENDANT'S PRE-TRIAL MEMORANDUM OF CONTENTIONS OF FACT LAW AND WITNESS AND EXHIBIT LISTS PETER D. KEISLER Assistant Attorney General

JEANNE E. DAVIDSON Director

J. REID PROUTY Trial Attorney Commercial Litigation Branch Civil Division Department of Justice 1100 L Street, N.W. Washington, D.C. 20530 Tele: 202-305-7586 Fax: 202-514-7969 May 23, 2007 Attorneys for Defendant

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TABLE OF CONTENTS INTRODUCTION ......................................................................................................................... 1 STATEMENT OF FACTS ............................................................................................................ 1 ARGUMENT ................................................................................................................................. 4 I. ISSUE 1: Whether ASAC Salvemini Possessed The Implied Actual Authority To Make Contracts With The Princess ...................................... 5 A. B. Contentions Of Law Regarding Implied Actual Authority ....................... 5 Contentions Of Fact Regarding ASAC Salvemini's Implied Actual Authority .................................................................................................... 7

II.

ISSUE 2: Whether Any Promises Made By ASAC Salvemini To Princess Were Ratified By Those With The Authority To Do So ....................... 7 A. Contentions Of Law Regarding Ratification Of An Unauthorized Contract ............................................................................... 7 Contentions Of Fact Regarding Ratification Of Any Promises Made To The Princess By ASAC Salvemini ............................. 8

B.

III.

ISSUE 3: What Promises, If Any, Were Made To The Princess By ASAC Salvemini ............................................................................................................... 9 ISSUE 4: Whether The United States Is Contractually Liable For Any Kidnaping Of The Princess .......................................................... 9 A. Contentions Of Law Regarding Contractual Obligations And The Kidnaping .................................................................................... 9 Contentions Of Fact Regarding Contractual Obligations And The Kidnaping .................................................................................. 10

IV.

B.

THE GOVERNMENT'S LIST OF WITNESSES ....................................................................... 11 THE GOVERNMENT'S EXHIBIT LIST ................................................................................... 15 CONCLUSION ............................................................................................................................ 18

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TABLE OF AUTHORITIES CASES PAGE(s)

Aetna Casualty & Surety Company v. United States, 228 Ct. Cl. 655 F.2d 1047 (1981) ..................................................................................... 9 Cottrell v. United States, 42 Fed. Cl. 144 (1998) .................................................................................................... 10 Cruz-Pagan v. United States, 5 Fed. Cl. 59 [(1996)] ................................................................................................... 5, 6 Dick Tracy v. United States, 55 Fed. Cl. 679 (2003) ...................................................................................................... 6 Doe v. United States, 58 Fed. Cl. 479 (2003) ...................................................................................................... 5 Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380 (1947) .......................................................................................................... 5 Gary v. United States, 67 Fed. Cl. 202 (2005) ...................................................................................................... 8 Janowsky v. United States, 133 F.3d 888 (Fed. Cir. 1998) .......................................................................................... 8 Khairallah v. United States, 43 Fed. Cl. 57 (1999) ........................................................................................................ 6 Leonardo v. United States, 63 Fed. Cl. 552 (2005), aff'd, 424 F.3d 1253 (Fed. Cir. 2005) ..................................... 5, 6 Roy v. United States, 38 Fed. Cl. 184 (1997) ................................................................................................. 5, 6 SGS-92-X003 v. United States, 74 Fed. Cl. 637 (2007) ............................................................................................. passim Somali Development Bank v. United States, 205 Ct. Cl. 508 F.2d 817 (1974) ..................................................................................... 10

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TABLE OF AUTHORITIES (cont'd) STATUTES PAGE(s)

28 U.S.C. § 524(c)(1)(c) ............................................................................................................... 3 28 U.S.C. § 1491(a)(1) .................................................................................................................. 9

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS SGS-92-X003 Plaintiff, v. THE UNITED STATES, Defendant. ) ) ) ) ) ) ) ) )

No. 97-579C (Judge Williams)

DEFENDANT'S PRE-TRIAL MEMORANDUM OF CONTENTIONS OF FACT AND LAW AND WITNESS AND EXHIBIT LISTS In accordance with the Court's January 25, 2007 order and pursuant to Appendix A to the Rules of the United States Court of Federal Claims, the United States respectfully submits its memorandum of contentions of fact and law and witness and exhibit lists. INTRODUCTION At the trial in this case, plaintiff, SGS-92-X003 ("the Princess"), bears the burden of establishing that the Drug Enforcement Agency ("DEA") entered into a binding contract with her to pay to her fixed percentages of assets seized as a result of her efforts as an informant and that her kidnaping was caused by a breach of a contractual duty by the United States. The evidence will demonstrate no breach of any contract with the United States because no person with proper authority ­ express or implied ­ made such a contract with the Princess and no individual with proper authority ever ratified such a contract. STATEMENT OF FACTS In December, 1991, members of a DEA task force in South Florida first approached the Princess and sought her cooperation in a continuing money-laundering investigation known as "Operation Pisces." She agreed, and, in return, she was promised compensation for her work.

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The Broward County police officers, who had been seconded to the DEA task force, will testify that promises of compensation to the Princess were limited and that she was informed that any significant payment required approval from higher DEA authorities. The Princess's role changed from providing information that she already possessed (as a result of knowledge of her former husband's past criminal activities) to acting as an undercover informant who would provide money-laundering services to drug traffickers. She provided services in this capacity for several years, and the DEA does not dispute that she proved valuable to the agency. She was ultimately paid approximately $1.8 million for her assistance by the DEA. To finance the money-laundering investigation in Operation Pisces, the DEA established a bank account under the name, "Michael Shephard." The Michael Shephard account was opened with an amount of seed money from the DEA, but proceeds from the drug laundering operation were later fed into it. Typically, when an individual launders illegal funds upon behalf of a drug trafficker, they are paid a "commission" between five and ten percent of those funds as their fee. The commissions that the Princess collected performing her services as a money launderer in Operation Pisces were deposited into the Michael Shephard account and used to finance the operation, paying for things such as undercover office space and expenses for the Princess so that she could appear to be one who enjoyed the life-style of a money-launderer. At some point in 1992, the DEA began paying the Princess a salary of $10,000 per month that was funded entirely by the Michael Shephard account. The DEA was permitted to utilize this money, not obtained through congressional appropriation, by virtue of an "Attorney General's Exemption," which permitted law enforcement to utilize funds obtained through otherwise

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illegal activities, rather than returning them to the United States Treasury. The Assistant Special Agent in Charge ("ASAC") of the DEA's Fort Lauderdale Office at the time of Operation Pisces was Mr. Joseph Salvemini. ASAC Salvemini was also the operational head of Operation Pisces. As an ASAC, Mr. Salvemini did not possess authority to enter into contractual relationships with confidential informants. Instead, like all DEA field agents (including ASACs) dealing with confidential informants, his authority was limited to recommending awards for the informant. No ASAC or DEA field agent requires the authority to make binding contracts with confidential informants because it has long been customary to limit promises to making attempts to seek "fair" compensation and there is an extensive procedure established for obtaining this compensation. Moreover, the DEA Agent's Manual provides the procedure, in conjunction with 28 U.S.C. § 524(c)(1)(c) for requesting the approval of awards from the asset forfeiture fund. As an ASAC, Mr. Salvemini did, however, possess authority to make payments of up to $25,000 quarterly out of Purchase of Evidence / Purchase of Information ("PE/PI") funds, maintained at his branch. By DEA regulation, payment to any individual of more than $25,000 per quarter required authorization by higher DEA headquarters. When the Princess was paid more than $25,000 per quarter, ASAC Salvemini was required to seek authorization from DEA Headquarters, which he did. No payment greater than $25,000 per quarter was made to the Princess without such authorization. In 1995, the DEA received reports that the Princess was kidnaped by Columbian drug dealers. Some in the DEA believed that the Princess's identity might have been compromised by virtue of information divulged by an Assistant United States Attorney in the course of a criminal

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prosecution, although there was also evidence that the Princess's identity had already been surmised by drug traffickers. After several months, the DEA arranged the payment of moneys, through another informant, to the individuals who allegedly kidnaped the Princess and she returned to the United States. The activities of the Princess were regularly briefed up the DEA chain of command. None of Mr. Salvemini's direct supervisors were ever told of any promises he made to the Princess regarding compensation, nor was anybody in a position to ratify these promises ever informed of them. Had DEA management been aware of any alleged promises by ASAC Salvemini to the Princess to provide her a share of the proceeds from seized assets, it would have informed him that such promises were unauthorized, because the DEA was very sensitive to the notion of payment to informants based upon percentages of seizures, and this practice was looked upon with disfavor at the time. In none of ASAC Salvemini's written requests to his superiors for payment to the Princess did he ever state that he had promised her a fixed percentage of seized assets. When Mr. Salvemini was told that an Assistant United States Attorney might have divulged the Princess's name in the course of a prosecution, he vehemently objected in writing, but never stated that he had made a binding promise to her that her name would be kept secret. Instead, ASAC Salvemini stated that he recognized, from his 26 years of experience, that identities could be divulged, but was bitter about the means it was done in this particular case. ARGUMENT This Court's published opinion upon the earlier cross-motions for summary judgment sets forth the legal issues which remain to be resolved by this trial. See SGS-92-X003 v. United

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States, 74 Fed. Cl. 637 (2007). First, the Court must determine "whether ASAC Salvemini had implied actual authority to contract" on behalf of the Government with the Princess. SGS-92X003, 74 Fed. Cl. at 652. Next, the Court must determine whether ASAC Salvemini's promises were ratified by those with authority to do so. Id. at 654. Third, the Court must determine the terms of any contract allegedly made by ASAC Salvemini. Id. at 654-55. Fourth, and finally, the Court must determine whether the alleged kidnap and torture of the Princess stemmed from the violation of any contractual duty of the United States. Id. at 655. To the extent that plaintiff's pretrial filing appears to allege that ASAC Salvemini's authority to bind the agency should be analyzed under normal principles of agency/principal law, such allegations are misplaced: the Court's opinion has set forth the remaining issues for resolution and normal agency principles do not apply when considering the authority of an individual to contract for the United States. See Federal Crop Ins. Corp. v. Merrill, 332 U.S. 380, 384 (1947). I. ISSUE 1: Whether ASAC Salvemini Possessed The Implied Actual Authority To Make Contracts With The Princess A. Contentions Of Law Regarding Implied Actual Authority

The Court has correctly stated the law upon implied actual authority: A government official with implied actual authority can bind the government "when such authority is considered to be an integral part of the duties assigned to a government employee." H. Laundau & Co. [v. United States], 866 F.2d [322], 324 [(Fed. Cir. 1989)] (quoting Cibinic & Nash, Formation of Government Contracts 43 (1982); see also Leonardo v. United States, 63 Fed. Cl. 552, 557 (2005), aff'd, 424 F.3d 1253 (Fed. Cir. 2005); Roy [v. United States], 38 Fed. Cl. [184], 189 [(1997)], Cruz-Pagan v. United States, [35 Fed. Cl. 59], 63 [(1996)] (stating that contracting authority must be "necessary or essential" to carrying out those assigned duties to be "integral"); Doe v. United States, -5-

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58 Fed. Cl. 479, 485 (2003). Contracting authority is integral to an employee's duties when the employee cannot perform his assigned tasks without such authority and when the relevant agency's regulations do not grant the authority to other agency employees. See Leondardo, 63 Fed. Cl. at 557, aff'd, 424 F.3d 1254 (Fed. Cir. 2005) (citing Flexlab, LLC v. United States, 62 Fed. Cl. at 148); see also Roy, 38 Fed. Cl. at 189; at 190 n. 18 (noting that express actual authority to make and approve payments could be the predicated for the implied authority to contract). SGS-92-X003, 74 Fed. Cl. at 652. It therefore follows that, if an employee can perform his duties without personally possessing contracting authority, he need not be granted implied actual authority to contract. Thus, this Court has held, in other cases involving confidential informants, the existence of other payment mechanisms for DEA informants precludes a finding of implied actual authority in those DEA agents who deal with the informants. See Khairallah v. United States, 43 Fed. Cl. 57, 64 (1999); Cruz-Pagan, 35 Fed. Cl. at 61-62 ("because reasonably efficient alternatives appear to exist to create the desired expectation of compensation, it would not be necessary or essential for DEA to grant contracting authority to its field agents"); Dick Tracy v. United States, 55 Fed. Cl. 679, 683 (2003). Moreover, the notion of implied actual authority is at odds with circumstances where the amount of money promised (such as a percentage of seizures as allegedly contemplated here) is indeterminate. Khairallah, 43 Fed. Cl. at 64 ("The notion that DEA employees could contract in such a way [promising an unknown amount based upon seizure amounts] so as to bind the agency top honor open-ended promises . . . would thwart the orderly delegation of limited authority.").

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B.

Contentions Of Fact Regarding ASAC Salvemini's Implied Actual Authority

ASAC Salvemini was like any other DEA ASAC: his authority with confidential informants included the ability to promise to seek a fair payment for them; to seek such compensation for them; and to direct them, but it did not include the authority to make binding payment contracts upon behalf of the DEA. The uncontroverted testimony in this case will be that no field agents possessed the authority to make binding contractual obligations to confidential informants, and even an ASAC, like Mr. Salvemini needed no such authority to perform his duties.1 There will be further testimony that agents commonly performed their duties relating to confidential informants with the understanding and recognition that they could not enter into binding contracts for such services ­ even agents who hold the rank of ASAC and lead investigations such as Operation Pisces. Indeed, the evidence will demonstrate that contractual promises to provide a portion of seized funds to an informant are precluded by statute and DEA regulation. II. ISSUE 2: Whether Any Promises Made By ASAC Salvemini To Princess Were Ratified By Those With The Authority To Do So A. Contentions Of Law Regarding Ratification Of An Unauthorized Contract

In order for an unauthorized contract to be given effect through ratification, a superior who fully knows the material facts surrounding the unauthorized actions of the subordinate must knowingly confirm, adopt, or acquiesce to the unauthorized action of that subordinate. See SGS

The Court's earlier opinion explained that, as a result of ASAC Salvemini's greater duties than those of the usual DEA agent, and his access to funds through the Attorney General's Exemption, he might have greater implied actual authority than that in those cases where such authority has been summarily denied by the courts. SGS-92-X003, 74 Fed. Cl. at 652-53. The facts brought out at trial will demonstrate this not to be the case. -7-

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92-X003, 74 Fed. Cl. 653-54 (citing cases). Institutional ratification occurs when the Government ratifies an unauthorized contract by continuing to receive benefits from it after becoming aware of its unauthorized nature. Janowsky v. United States, 133 F.3d 888, 892 (Fed. Cir. 1998). Importantly, institutional ratifications requires that "an official with the power to ratify must know the material facts relating to the acceptance of the benefits and must acquiesce in their acceptance." Gary v. United States, 67 Fed. Cl. 202, 217 (2005) (synthesizing cases). B. Contentions Of Fact Regarding Ratification Of Any Promises Made To The Princess By ASAC Salvemini

The only individuals with the authority to ratify any of the alleged promises made by ASAC Salvemini to the Princess would have been Thomas Constantine, the DEA's Administrator; James Whetstone, the DEA Deputy Assistant Administrator for the Office of Acquisition Management; and, perhaps, Attorney General Janet Reno and the head of the procurement activity at the Department of Justice. Mr. Whetstone and Administrator Constantine will testify that they were never informed of any promises made by ASAC Salvemini to the Princess until this lawsuit was filed. SAC Cash, who supervised Mr. Salvemini, will testify that he was never told of any promise by ASAC Salvemini to bind the DEA to pay the Princess any percentage of funds laundered or seized. Similarly, no other DEA agents above ASAC Salvemini's chain of command will testify to knowing of any promises regarding compensation allegedly made to the Princess. Deputy Assistant Attorney General Mary Lee Warren, who attended oversight meetings upon behalf of the Attorney General, will testify that she was unaware of any promises that ASAC Salvemini allegedly made to the Princess and that, if she had heard of such promises, she would have objected because it could potentially compromise criminal prosecutions. Other individuals who attended the Sensitive Activities -8-

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Review Committee ("the SARC"), where senior DEA and Department of Justice officials were briefed upon investigations, such as Operation Pisces, will testify not recollecting being informed of any contracts formed by ASAC Salvemini and that, had such information been brought to their attention, the SARC would have likely disapproved of such a promise because it was contrary to policy. III. ISSUE 3: What Promises, If Any, Were Made To The Princess By ASAC Salvemini This matter is simply a question of fact. We anticipate that ASAC Salvemini will testify that, at most, any promises he made to the Princess were limited to a percentage of laundered funds seized and placed into the Asset Forfeiture Fund. He will also explain that any such promises to the Princess were made with caveats, relating to its authorization. ASAC Salvemini will further testify that he made no promise to pay the Princess any fixed percentage of the commissions that were "earned" in the money laundering. The Princess, by contrast, has provided at least three different percentages that she alleges were promised to her from the commissions. These figures, ASAC Salvemini will testify, would have been impossible to pay out of the Michael Shephard account, because that account was utilized to pay all of the other expenses associated with Operation Pisces and the Princess's $10,000 monthly salary. IV. ISSUE 4: Whether The United States Is Contractually Liable For Any Kidnaping Of The Princess A. Contentions Of Law Regarding Contractual Obligations And The Kidnaping

We respectfully renew our objection to this claim because it sounds in tort. See 28 U.S.C. § 1491(a)(1); Aetna Casualty & Surety Company v. United States, 228 Ct. Cl. 146, 164, 655 F.2d 1047, 1059 (1981). In considering whether a claim falls within its jurisdiction, this -9-

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Court looks to the gravamen of the claim rather than the style of the pleading. Somali Development Bank v. United States, 205 Ct. Cl. 741, 748, 508 F.2d 817, 820 (1974) (plaintiffs' allegation of breach of contract held to be tort claim). "Even where the claim is framed under non-tort law, the court lacks jurisdiction if the essence of the claim lies in tort." Cottrell v. United States, 42 Fed. Cl. 144, 149 (1998) (dismissing claims for intentional infliction of emotional distress, negligent infliction of emotional distress and other tort claims for lack of jurisdiction). Nevertheless, we recognize that the Court has considered this matter to potentially sound in contract and has allowed that this claim by plaintiff should survive for the time being. SGS92-X003, 74 Fed. Cl. at 655. To that extent, any alleged contract made by ASAC Salvemini to maintain the secrecy of her identity, aid her when in danger, and to protect her from harm or injury, would be subject to the same analysis applied to the payment contracts discussed above: ASAC Salvemini, or whoever allegedly made any such contracts must have: 1) actually made a bargain with the Princess in accordance with the terms alleged; and 2) possessed the authority (whether actual or implied-actual) to make such a contract unless some individual with proper authority later ratified such contract. B. Contentions Of Fact Regarding Contractual Obligations And The Kidnaping

Neither ASAC Salvemini, nor any other Government agent, ever promised the Princess that her name would remain secret forever. Moreover, neither ASAC Salvemini, nor any individual with whom the Princess dealt, possessed the authority to dictate under what terms or circumstances members of the Department of Justice might divulge the Princess's name in the course of conducting their prosecutorial duties. Indeed, like all law enforcement officers, ASAC

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Salvemini recognized that circumstances could occur which would prevent him from keeping any such promise. Likewise, no individual with whom the Princess dealt possessed the authority to promise the means by which she would be rescued or her safety guaranteed should she ever be kidnaped, nor did any such individual possess the authority to promise that the United States Government would go back upon its long-standing policy of not paying ransom to kidnapers. Although there is evidence that an Assistant United States Attorney divulged the identity of the Princess to a defendant during a plea discussion, plaintiff possesses no evidence that this action is what led to her alleged kidnaping, as there were other means by which those who allegedly kidnaped the Princess may have determined her identity. Similarly, the evidence to be adduced at trial will demonstrate that, upon the Princess's alleged kidnaping, the United States Government took all appropriate steps to secure her freedom, including facilitating a payment by an informant to the alleged kidnapers. THE GOVERNMENT'S LIST OF WITNESSES At trial, the Government expects to call the following witnesses, to testify as follows: 1. Mr. Al Coward. Mr. Coward was an ASAC in Miami during the time of Operation

Pisces. He was the ASAC over the Exemption Management Group ("EMG"), which was created to coordinate the undercover operations pursuant to the Operation Pisces Attorney General's Exemption . Mr. Coward will testify that it is against DEA policy to pay commissions to informants and that he had explained as much to ASAC Salvemini. We anticipate his testimony upon direct examination to be less than two hours.

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2.

Special Agent in Charge ("SAC") Tom Cash. SAC Cash was the SAC of the DEA's

Miami Field Division, which oversaw the DEA's Fort Lauderdale Office, during the time that the Princess was an informant. SAC Cash will explain that ASAC Salvemini never told him that he had made any promises to the Princess to provide any firm award or reward, and that, if he had been aware that ASAC Salvemini had made such promises, he would have told ASAC Salvemini that he could not do so. SAC Cash will explain that contracting authority with confidential informants is not a necessary part of an ASAC's duties and that ASAC Salvemini did not need contracting authority to perform his duties. upon direct examination will take approximately two hours. 3. Mr. Dale Schuitema. Mr. Schuitema was an Associate SAC in Miami during the time of We anticipate that his testimony

the Princess investigation. Mr. Schuitema will testify that ASAC Salvemini, who he directly supervised, never informed him of any promises made to the Princess, nor did ASAC Salvemini ever request that such promises as he made ever be ratified. We anticipate that his testimony upon direct examination will be less than an hour. 4. James Devaney. Mr. Devaney was the Group Supervisor for the Exemption Management

Group ("EMG") in the DEA Miami Field Division during the time of the Princess operation. He will testify that there were obligations upon the Michael Shephard account such that it would have been impossible for the DEA to have complied with any obligation to pay the Princess the three to five percent commission that plaintiff alleges was promised to her. Mr. Devaney will further testify that ASAC Salvemini was well aware of such limitations upon the Michael Shephard account. We anticipate the his testimony upon direct examination will be less than an hour.

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5.

James Whetstone. Mr. Whetstone was the Deputy Assistant Administrator for the Office

of Acquisition Management at the DEA. He will testify that only he and Administrator Constantine possessed authority to ratify unauthorized commitments made by DEA agents, such as the one allegedly made with the Princess. He will testify that he did not ratify this contract. We anticipate that his testimony upon direct examination will be less than an hour. In addition to the Government's witnesses, we reserve the right to call those who are upon plaintiff's witness list. We anticipate the following testimony from individuals upon plaintiff's witness list: 1. Tom Tiderington. Mr. Tiderington will testify that he made no promises to plaintiff and

that she was aware that her $10,000 monthly "salary" was paid by the commissions from her money-laundering activities. Mr. Tiderington attended several SARC meetings where the Princess was discussed, but at none of those meetings was there any discussion involving any obligation to pay the Princess a percentage of commissions or forfeited funds. 2. Robert Michelotti. Mr. Michelotti worked for the DEA headquarters and acted as an

administrative aide to the SARC. He will testify that the notion of the Princess being promised a particular percentage or commission upon seized funds was never raised at any SARC meeting that he attended and that he would expect to remember such because it would be counter to Department of Justice direction at the time of the operation. 3. Douglas Wankel. Mr. Wankel was the Director of Operations for the DEA at the time of

the Princess operations. He will explain that he was never made aware of any promises by ASAC Salvemini to the Princess and never ratified them. He will further explain a DEA agent's role in developing confidential informants and that an agent ­ including an ASAC does not

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possess or need the authority to make binding promises to pay a percentage of seized moneys to an informant in order to perform his duties. 4. Thomas Constantine. Mr. Constantine was the DEA Administrator from early 1993 until

the end of the Princess's involvement with the DEA. He will testify that he was never informed of any promises made by ASAC Salvemini to the Princess and the he did not and would not have ratified such promises. 5. Donnie Marshall. Mr. Marshall was DEA Director of Operations during part of the

Princess Operation and later DEA Administrator. Mr. Marshall will testify that issues of the Princess's compensation were not discussed at SARC meetings that he attended. He will also testify, as an individual who served at every level of the DEA and its predecessor agency (the Bureau of Narcotics and Dangerous Drugs) that an agent did not need the authority to make binding promises to confidential informants in order to perform their duties. 6. Robert Nieves. Mr. Nieves was acting chief of the DEA's Domestic Operations Section.

He will testify that no DEA agent required contracting authority to manage his confidential informants. He will also testify that ASAC Salvemini never made him aware of any commitments that he may have made to the Princess to pay her fixed percentages of funds recovered in the money laundering operation. 7. Mary Lee Warren. Ms. Warren is the Deputy Assistant Attorney General ("DAAG") for

Narcotics and Dangerous Drugs. DAAG Warren will testify that, at the time of the Princess operation, promising percentages of a confidential informant's seizures to that informant was looked upon with great displeasure by the Department of Justice and that, had she heard of such a promise in the Princess case during her attendance at SARC meetings, she would have

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critically questioned it. DAAG Warren will testify that this issue never arose during the times that she attended SARC meetings. THE GOVERNMENT'S EXHIBIT LIST 1. 2. 3. 4. Joseph Salvemini ASAC evaluation 1994-95. Joseph Salvemini ASAC evaluation 1995-96. Miami Division Order, "CI Management Program." Operation Pisces Authorization Memorandum dated November 26, 1986 from Tom Cash to John Lawn. 5. 6. 7. 8. Personal History Report, Pilar Concha, dated December 21, 1991. Cooperating Individual Agreement, Pilar Concha, dated December 21,1991. Statement of Understanding Pilar Concha, dated April 8,1994. Memorandum from James L. Devaney to Robert Michelotti; "Operation PiscesReasonable Necessary Expenses," dated November 19,1993. 9. Memorandum from Tom Cash to Stephen Greene, "Operation Pisces," dated November 22, 1993. 10. Memorandum-"Request for AG Exemption-Operation Princess," from Joseph Salvemini, dated November 10, 1994. 11. Memorandum "Award Requests" from Joseph Salvemini to Robert Michelotti, dated February 22, 1995. 12. Memorandum, "Operation Princess" from John Costanzo to Douglas Wankel, dated January 28, 1996. 13. "Memorandum for the Administrator" from Mary Lee Warren, dated November15, 1995.

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14.

Memorandum "Request for Award Payment" from Donnie Marshall to Douglas Wankel, dated (apparently) June 4, 1996.

15.

Memorandum "Award Payment to SGS" from Douglas Wankel to James Milford, dated July 8, 1996.

16.

Memorandum "Operation Princess Closing Report" from Greg Lees, dated April 17, 1997.

17. 18. 19. 20. 21.

Operation Princess Balance Sheet, dated July 5, 1998. Operation Pisces Financial Statement "Ft. Lauderdale-Mejia," dated September 30, 1995. Operation Pisces Manual authored by Al Coward, ASAC. Excerpts from the DEA Agents Manual. Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated April 1, 1992.

22.

Telex from Douglas Wankel granting permission to exceed $25,000 quarterly limit, dated April 24, 1992.

23.

Telex from Joseph Salvemini confirming permission to exceed $25,000 quarterly limit, dated December 14, 1992.

24.

Telex from Joseph Salvemini confirming permission to exceed $25,000 quarterly limit, dated September 16, 1993 with note: to be paid from Pisces account.

25.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated December 15, 1993

26.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated March 15, 1994.

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27.

Telex from Douglas Wankel granting permission to exceed $25,000 quarterly limit, dated May 11, 1994.

28.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated May 13, 1994.

29.

Telex from Douglas Wankel granting permission to exceed $25,000 quarterly limit, dated June 15, 1994.

30.

Telex from Joseph Salvemini confirming permission to exceed $25,000 quarterly limit, dated August 3, 1994.

31.

Telex from Joseph Salvemini confirming permission to exceed $25,000 quarterly limit, dated September 19, 1994.

32.

Telex from Joseph Salvemini confirming permission to exceed $25,000 quarterly limit, dated November 14, 1994.

33.

Telex from Joseph Salvemini confirming permission to exceed $25,000 quarterly limit, dated December 7,1994.

34.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated March 6, 1995.

35.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated March 24, 1995.

36.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated July 19, 1995.

37.

Telex from Robert Baker granting permission to exceed $25,000 quarterly limit, dated July 25, 1995.

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38.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated February 7, 1996.

39.

Telex from Donnie Marshall granting permission to exceed $25,000 quarterly limit, dated February 13, 1996.

40.

Telex from Donnie Marshall granting permission to exceed $25,000 quarterly limit, dated March 15, 1996.

41.

Telex from Donnie Marshall granting permission to exceed $25,000 quarterly limit, dated May 10, 1996.

42.

Telex from Joseph Salvemini requesting permission to exceed $25,000 quarterly limit, dated June 11, 1996.

43.

Telex from Donnie Marshall granting permission to exceed $25,000 quarterly limit, dated June 14, 1996.

44.

Any and all exhibits produced by plaintiff and not objected to. CONCLUSION For all of the above reasons, the Government respectfully requests that the Court find that

the United States is not responsible for any breach of contract with plaintiff. Respectfully submitted, PETER D. KEISLER Assistant Attorney General s/ Jeanne E. Davidson JEANNE E. DAVIDSON Director

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May 23, 2007

s/ J. Reid Prouty J. REID PROUTY Trial Attorney Commercial Litigation Branch Civil Division Department of Justice Attn: Classification Unit 8th Floor 1100 L Street, N.W. Washington, D.C. 20005 Tel (202) 305-7586 Fax (202) 514-7969 Attorneys for Defendant

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