US won't retry watchdog whistle-blower case

The department told U.S. District Judge John D. Bates of its decision at a hearing on Thursday. In December, a judge filling in for Bates declared a mistrial when the eight jurors in the civil case failed to reach a unanimous verdict.

In 1998, the Project on Government Oversight paid Richard A. Berman, then a government economist, nearly $400,000 from a $1.2 million settlement for exposing oil companies' underpayment of royalties to the government. The Justice Department argued the payment violated a federal ban on supplementing the salary of an executive branch employee. POGO and Berman had faced fines, but no jail time.

The jurors had split 7-1 in favor of the government against both POGO and Berman.

On Thursday, after Justice Department lawyer David Finkelstein said the government would not retry the case, Bates asked POGO's lawyer, Ross Nabatoff, if he wanted to say anything. Nabatoff declined, prompting Bates to quip, "You're happy to escape by the skin of one juror?"

"It only takes one," Nabatoff replied.

The case had dragged on for a decade, with two previous government victories reversed on appeal. POGO's executive director, Danielle Brian, said after the hearing she was surprised by the government's decision not to pursue the case.

"We were prepared for a third trial," Brian said. "We're thrilled it's finally over."

But that's not the case for Berman. In March, Bates agreed with the Justice Department that Berman had breached his fiduciary duty to the government by working on royalty issues that could help POGO win its lawsuit, and said he had to cough up the money POGO paid him. Berman appealed, but the appeals court said it was premature. Berman, who is representing himself, said Thursday he will now pursue that appeal.

The Justice Department had no immediate comment.

In 1996, POGO asked Berman to join its false claims lawsuit against major oil companies for underpaying royalties to the government. He declined, but the group agreed to pay him a one-third share of its take from the lawsuit.