Wheeler v. United States ( 2008 )

United States Court of Appeals
For the First Circuit
Nos. 07-1663, 07-1664
EMILY MCINTYRE, AS ADMINISTRATOR OF THE ESTATE OF JOHN L.
MCINTYRE; CHRISTOPHER MCINTYRE, IN HIS CAPACITY AS CO-
ADMINISTRATOR OF THE ESTATE OF JOHN L. MCINTRYE,
Plaintiffs, Appellees/Cross-Appellants,
v.
UNITED STATES OF AMERICA,
Defendant, Appellant/Cross-Appellee,
H. PAUL RICO; JOHN MORRIS; JOHN J. CONNOLLY, JR.; RODERICK
KENNEDY; ROBERT R. FITZPATRICK; JAMES RING; JAMES W. GREENLEAF;
JAMES AHEARN; KEVIN J. WEEKS; JAMES J. BULGER; STEPHEN J. FLEMMI;
JOHN DOE Number 1-50; FEDERAL BUREAU OF INVESTIGATION; LAWRENCE
SARHATT; JOHN V. MARTORANO; RICHARD F. BATES; JOSEPH YABLONSKY;
JAMES F. SCANLON; DENNIS F. CREEDON; THOMAS J. DALY,
Defendants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Reginald C. Lindsay, U.S. District Judge]
Before
Lipez and Howard, Circuit Judges,
and Besosa,** District Judge
*
Of the District of Puerto Rico, sitting by designation
Thomas M. Bondy, Attorney, Appellate Staff, Civil Division,
U.S. Department of Justice, with whom Peter D. Keisler, Assistant
Attorney General, Jeffrey S. Bucholtz, Acting Assistant Attorney
General, Jonathan F. Cohn, Deputy Assistant Attorney General,
Steven I. Frank and Jonathan H. Levy, Attorneys, Appellate Staff,
Civil Division, U.S. Department of Justice, were on brief, for
appellant/cross-appellee.
William E. Christie, with whom Steven M. Gordon and Shaheen &
Gordon, P.A. were on brief, for appellees/cross-appellants.
October 16, 2008
LIPEZ, Circuit Judge. This case is another chapter in
the saga of the relationship between the FBI's Boston Office and
two organized crime figures, James "Whitey" Bulger and Stephen
Flemmi, whose unlawful, violent conduct in that city spanned three
decades. Following an eighteen-day bench trial featuring nine
witnesses and thousands of pages of exhibits, the district court
concluded that former FBI agent John Connolly was acting within the
scope of his employment when he leaked the identity of an
informant, John McIntyre, resulting in McIntyre's brutal murder by
Bulger, Flemmi and their associates in the notorious Winter Hill
Gang. The court consequently awarded McIntyre's estate
approximately $3.1 million in damages against the government under
the Federal Tort Claims Act (FTCA), 28 U.S.C. § 1346.
The government has appealed, arguing that Connolly was a
rogue agent whose disclosure of McIntyre's identity violated
fundamental FBI policies and was beyond any rational view of
conduct falling within the scope of his employment. We reject the
government's position. We affirm the judgment of the district
court.
I.
The district court meticulously set out the factual
background of this case, detailing the decades of history
concerning Bulger's and Flemmi's involvement with the FBI in Boston
and, in particular, the pair's relationship with Connolly. See
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McIntyre v. United States, 447 F. Supp. 2d 54, 62-104 (D. Mass.
2006). Parts of that more than 40-page history also have been
reported in other opinions that we have issued, including our
decision affirming Connolly's conviction on charges stemming from
his efforts to facilitate Bulger's and Flemmi's criminal activities
and to protect them and their associates from arrest and
prosecution. See United States v. Connolly, 504 F.3d 206 (1st Cir.
2007); McIntyre v. United States, 367 F.3d 38 (1st Cir. 2004);
United States v. Connolly, 341 F.3d 16 (1st Cir. 2003). Unable to
improve on the district court's exhaustive review of the record, we
provide here only a summary of the facts essential to an
understanding of the scope of employment issue at the heart of this
case. However, we assume the reader's familiarity with all of the
district court's factual findings, which have not been challenged
by the government on appeal. Our precis borrows liberally from the
district court's well stated recitation, as well as from our own
prior opinions.
A. Connolly's Official Role with Bulger and Flemmi
Bulger and Flemmi were informants for the FBI's Boston
office at various times during a period of more than twenty-five
years. Flemmi was first recruited in 1964 and Bulger in 1971, and
both men provided information off and on until 1990. McIntyre, 447
F. Supp. 2d at 73. They were considered particularly valuable
sources for the office's high-priority investigation of the Boston
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branch of La Cosa Nostra ("LCN").1 Although they were members of
the competing Winter Hill Gang, Bulger and Flemmi frequently
consorted with LCN members "and purported to transmit inside
information to the FBI concerning organized crime activities in New
England." Connolly, 504 F.3d at 210. The Boston LCN investigation
proved fruitful, leading to the 1983 arrests and 1986 convictions
of the leading figures of the Boston branch, Gennaro Angiulo and
Illario Zannino, as well as other LCN members. McIntyre, 447 F.
Supp. 2d at 63.
Connolly, who joined the FBI in 1968, served as Bulger
and Flemmi's "handler" during most of their tenure as FBI
informants, beginning in 1975. Connolly, 341 F.3d at 20; McIntyre,
447 F. Supp. 2d at 73-74.2 In that capacity, he met with them
1
As the district court related, "[d]uring the late 1970s and
early 1980s, the stated national priority of the FBI's Organized
Crime Program was the takedown of Cosa Nostra." 447 F. Supp. 2d at62 (citing Ex. 69, April 1980 Memo from Director, FBI to Attorney
General, at 17) ("The majority of resources, both investigative and
prosecutorial, should continue to be expended and directed against
LCN, the most powerful of the organized crime groups, as it
represents a greater threat to this nation than all other organized
crime groups combined."). The Boston LCN branch was likewise "the
number one priority of the Organized Crime Program in the Boston
Division of the FBI . . . in the 1970s and early 1980s." Id. at
62-63 (citing, inter alia, Ex. 110, April 1981, Addendum of
Supervisor Morris) ("Consistent with the national priority, the
LCN is the primary target of the Organized Crime Program in the
Boston Division."); see also Tr. Day 6, at 55 (Testimony of Robert
Fitzpatrick, Assistant Special Agent in Charge ("ASAC") of the
Boston Office, acknowledging that LCN "was the number one priority"
in the office).
2
Connolly was assigned to the Boston Office's C-3 Squad,
which worked solely on organized crime, from October 1973 until
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regularly and controlled other agents' access to them. Rarely did
other FBI agents talk with the two men outside of Connolly's
presence. See, e.g., id. at 87 (stating that Connolly served as an
intermediary with Bulger and Flemmi for other agents investigating
several murders); id. at 90 (noting that the Boston office rejected
a request that Bulger and Flemmi be interviewed in connection with
two murders "upon instructions from FBI Headquarters that no one
other than Connolly" should interview them); id. at 91 (noting
Agent Montanari's belief that "Bulger and Flemmi, 'as informants of
an agent' would refuse to meet with him absent Connolly's
intervention"); id. at 98 ("Bulger and Flemmi communicated almost
exclusively with Connolly, and they refused to work with any other
handler."). When Connolly retired suddenly in 1990, Bulger and
Flemmi were immediately closed as informants. Id.B. Connolly's Collaboration with Bulger and Flemmi
At some point, the relationship between Connolly and his
two informants turned illicit. A grand jury indicted Connolly in
2000 on charges of racketeering, obstruction of justice, conspiracy
and making a false statement, alleging that he had provided
protection, the identities of informants, and other assistance to
Bulger and Flemmi in exchange for bribes and favors.3 He was
March 1988. Id. at 64-65.
3
Through the years, Connolly received more than $200,000 in
cash and gifts from Bulger and Flemmi. 447 F. Supp. 2d at 110
(citing Flemmi's testimony, Tr. Day 2, at 98; Day 3, at 82-83).
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convicted in 2002 and sentenced to 121 months in prison.4 We twice
rejected his appeals. See Connolly, 504 F.3d 206; Connolly, 341
F.3d 16.
Among Connolly's misdeeds was disclosure of the names of
at least two informants, before the McIntyre episode, both of whom
were murdered by Flemmi, Bulger or their associates shortly after
the leaks. Flemmi stated that, in December 1976, Connolly told
Bulger that a bookmaker who did business with the Winter Hill gang,
Richard Castucci, had been cooperating with the FBI. Tr. Day 1,
at 90-91; Ex. 3 at 7 (Agreed Statement of Facts in United States v.
Flemmi, No. 99-10371 (D. Mass. May 23, 2001)). Castucci was shot
to death by members of the group later that month.5 A second
informant, Edward "Brian" Halloran, approached the FBI in early
1982 with information about the Winter Hill Gang and their possible
involvement the previous year in the murder in Tulsa, Oklahoma, of
a businessman named Roger Wheeler.6 Among other information,
4
At the conclusion of a three-week trial, a federal jury
found him guilty of one count of racketeering, two counts of
obstruction of justice, and one count of making false statements.
Connolly, 341 F.3d at 19.
5
Flemmi testified that John Martorano shot Castucci in the
head, and that Flemmi and Bulger disposed of the body. Tr. Day 1,
at 93-94.
6
The Winter Hill associates were, in fact, responsible for
Wheeler's murder. Flemmi and Bulger provided weapons for the
killing, and Martorano shot him outside his country club in Tulsa,
Oklahoma on May 27, 1981. Tr. Day 2, at 21-22 (Flemmi testimony);
Ex. 3, at 10. Wheeler was the owner of World Jai Alai ("WJA"), a
business that operated in Florida and Connecticut. He had drawn
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Halloran told Agent Leo Brunnick that Bulger and Flemmi met with
Connolly on a weekly basis and that the two men "had a 'pipeline
into the Boston Office.'"7 447 F. Supp. 2d at 83 (citing Ex. 84,
Memo from Brunnick). Sometime before May 11, 1982, Connolly told
Bulger of Halloran's cooperation. Tr. Day 2, at 34-35 (Flemmi
testimony). Bulger shot and killed Halloran and an associate,
Michael Donahue, on May 11, as they were leaving a restaurant in
Boston. 447 F. Supp. 2d at 86.8
Agents at the FBI's Boston Office and at FBI Headquarters
suspected that Bulger and Flemmi were involved in the Wheeler,
Halloran and Donahue murders. 447 F. Supp. 2d at 84-86. Indeed,
Halloran had told Agent Brunnick and his partner, Agent Gerald
Montanari, that Bulger, Flemmi and Callahan9 were responsible for
plotting Wheeler's murder and that he, Halloran, had been paid
$20,000 to keep quiet about it. Id. at 82-83 (citing Ex. 27, Memo
the wrath of the Winter Hill gang by refusing to sell the business
to John Callahan, who was the former president of WJA and had lost
his license to operate a parimutual betting business in Connecticut
because of his relationship with "his gangster friends," including
members of the Winter Hill gang. McIntyre, 447 F. Supp. 2d at 81
(citing Ex. 3); see also Tr. Day 2, at 20 (Flemmi testimony).
7
Brunnick's memo further states that the "pipeline" was "not
necessarily Connolly" and that Halloran had "no information or
indication that Connolly is furnishing any information to Stevie or
Whitey."
8
As the district court observed, Donahue's killing appears to
be a classic case of being "in the wrong place at the wrong time."
447 F. Supp. 2d at 86.
9
See supra note 6.
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from McWeeney); Tr. Day 15, at 18 (Montanari testimony). He also
told the agents that Martorano – the gunman – might be using
Callahan's Fort Lauderdale condominium as a safe-house. Id. at 83.
All of Halloran's information was passed along to FBI Headquarters.
Id. at 84. Although some details of Halloran's story were
investigated, "inexplicably, the Boston Office never followed up on
Halloran's claim that Martorano, the reported shooter in the
Wheeler murder and a federal fugitive, was hiding out at Callahan's
condominium in Florida." Id. at 85.
In the last week of May 1982, meetings to discuss the
Wheeler and Halloran killings took place in Washington and Boston.
At the Washington meeting, agents from Boston, Miami and Oklahoma
City, as well as officials from FBI Headquarters, acknowledged that
Bulger and Flemmi were suspects in the cases, but a decision was
made to retain them as "open" informants because the allegations
against them were unsubstantiated and they were extremely valuable
assets in the LCN investigation. Id. at 87 (citing Ex. 30, May 25,
1982 Memo from ASAC Fitzpatrick to Special Agent in Charge ("SAC")
Lawrence Sarhatt); Tr. Day 9, at 59-60 (Fitzpatrick testimony).10
If the suspicions had been confirmed, agency policy would have
10
Fitzpatrick testified that, despite his view that Bulger,
at least, should be closed as an informant, "everyone at
headquarters thought he should remain open" because "he was too
valuable."
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prevented their retention as informants without authorization from
the highest levels of the FBI and Justice Department.11
At a follow-up meeting two days later in Boston, Connolly
– who had not been at the meeting in Washington – was informed that
Bulger and Flemmi were the focus of the investigation into the
Wheeler and Halloran murders. He argued that they were not
involved. It was agreed that the agents investigating the murders
would not directly interview Bulger and Flemmi, and would rely
instead on Connolly acting as an intermediary. 447 F. Supp. 2d at
87.
Two months later, Callahan also was dead. Connolly had
told Bulger in July that the FBI was looking for Callahan to
question him in connection with the Wheeler murder. Tr. Day 2, at
11
The FBI's rules regarding the handling of informants,
contained in Section 137 of the agency's Manual of Investigative
Operations and Guidelines ("MIOG"), required supervisors to make
written findings on the "suitability" of an individual to serve as
an informant. Ex. 6, § 137-17(1) (Attorney General's Guidelines on
FBI Use of Informants and Confidential Sources, Part D(1)(1981)).
Although the Guidelines allow use of informants who are involved in
criminal activity, the crimes must not be "of a serious nature."
447 F. Supp. 2d at 68 (citing Guidelines at Part G(2)). If a field
office learned that an informant had participated in a "serious act
of violence," it was required to notify FBI Headquarters and only
the Director or a "senior Headquarters official" could approve the
continued use of such an informant – after consultation with the
Assistant Attorney General in charge of the Criminal Division. Id.at 69-70 (citing Guidelines at Part G(3)). Throughout their tenure
as informants, Flemmi and Bulger were "closed" – i.e., terminated
as informants – and re-opened multiple times. Id. at 74 n.35
(giving a chronology of Bulger's and Flemmi's openings and closings
as informants between 1964 and 1990). At least with respect to
Flemmi, a closing had little effect; he was treated as an informant
regardless of his official status. Id. at 74.
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37 (Flemmi testimony). According to Flemmi, Connolly also told
Bulger that "Callahan was a weak link who would not be able to
withstand the pressure of an FBI interrogation." 447 F. Supp. 2d
at 88. Bulger and Flemmi concluded that Callahan needed to be
killed. Their usual hit man, Martorano, assisted by another Winter
Hill member, Joseph McDonald, killed Callahan at Fort Lauderdale
International Airport on August 1, 1982. Id. at 87 (citing Tr. Day
2, at 40-41, Flemmi testimony).12
The FBI's recognition of the apparent link between the
Winter Hill gang and three murders – Wheeler's, Halloran's and
Callahan's – was reported in a November 1982 memo sent by the Chief
of the FBI's Organized Crime Section, Sean McWeeney, to Associate
Deputy Director Oliver Revell. The memo stated that "there is
evidence [the murders] were committed by an organized crime group
in Boston, Massachusetts, the Winter Hill gang." Id. at 88 (citing
Ex. 121, at 1). James Greenleaf, who became the SAC of the Boston
Office on November 29, 1982, was among those copied on the memo,
which was generated at FBI Headquarters in Washington.
By the time of that memo, Flemmi – but not Bulger – had
been closed as an informant. Officially, the reason for the
12
Martorano picked up Callahan at the airport and shot him in
the back of the head after he entered Martorano's car. Martorano
and McDonald transferred the body to the trunk of Callahan's car,
where it was discovered after a parking attendant noticed blood
dripping from the vehicle. 447 F. Supp. 2d at 87 (citing Tr. Day
2, at 40-41, Flemmi testimony).
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closing was his possible implication in criminal activity unrelated
to the murders. However, internal communications in the Boston
Office indicated that the murder investigation prompted his change
in status. 447 F. Supp. 2d at 88 n.59. Despite his closing,
Flemmi continued to provide significant information to the FBI
throughout the period until he was re-opened in early July 1986.
Meanwhile, Bulger remained open and, in February 1983, while the
murder investigations were ongoing, he was designated a "Top
Echelon" informant, meaning that he was expected to provide
information about management-level activity of an organized crime
group. Id. at 66. Eventually, the murder investigation wound down
without a contemporaneous resolution, despite the forty or so
volumes of files that had been produced on the crimes. Tr. Day 13,
at 96, 108 (Montanari testimony).13
C. FBI Knowledge of Connolly's Conduct
In its closing argument before the district court, the
government asserted that Bulger and Flemmi were not indicted in
connection with the murders and other criminal activity until 1995
because they were "very, very smart, and very, very cognizant of
13
Following an indictment in 1995, Flemmi pled guilty in 2003
to racketeering acts that included the Castucci, Wheeler, Callahan
and McIntyre murders. Another Winter Hill member, Kevin Weeks,
pled guilty to racketeering acts that included aiding and abetting
the Halloran, Donahue and McIntyre murders. 447 F. Supp. 2d at 59-
60 nn.5 & 6. Bulger, who was charged with similar crimes, has been
a fugitive since the indictment was issued. See Connolly, 504 F.3d
at 210.
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everything that was going on around them." Tr. Day 18, at 121.
However, considerable evidence supports the district court's view
that their awareness was not solely attributable to their own
skills and acuity. Other law enforcement representatives had
expressed concern about the Boston Office's "too-close association"
with members of Winter Hill. 447 F. Supp. 2d at 89. In a meeting
with FBI Headquarters representatives in November 1982, Florida
state and local law enforcement members who were responsible for
investigating the Callahan murder reported that they were reluctant
to provide information to the Boston Office because they believed
the Winter Hill connection had been hindering that office's
investigation into the murders. Id.14 The concerns from Florida
were relayed in a memo from Organized Crime Chief McWeeney to
Associate Deputy Director Revell:
Inferences could be drawn from conversations
indicating that these state and local
officials were of the opinion that the FBI had
confidential informants within the Winter Hill
organization and because of this their efforts
against this group were curtailed. In fact,
FBI Boston has previously utilized two
suspects in this matter as organized crime
sources in the Boston Division.
14
The Florida representatives also were troubled by the
association between personnel in the FBI's Miami Office and a
former Boston Office agent, H. Paul Rico, who at the time of the
murders was working as head of security at World Jai Alai. 447 F.
Supp. 2d at 89. In 1969, Rico had warned Flemmi that he was about
to be indicted, enabling Flemmi to become a fugitive for five
years. Flemmi testified that he returned to Boston in 1974 after
Rico told him he would be protected from prosecution. Id. at 78-
79; see Tr. Day 2, at 71-75 (Flemmi testimony).
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Ex. 121, at 6; see also id. at 3 (noting the belief of law
enforcement agencies in Miami that "some Agents in the Boston FBI
would not pursue allegations against the Winter Hill gang
vigorously").
In addition to these hints that the Boston Office was
protecting Bulger and Flemmi from murder charges, the FBI had been
told explicitly by Halloran that someone in the office was leaking
information to them. In his testimony, Flemmi confirmed that
Connolly reported to him and Bulger on the progress of the murder
investigation, Tr. Day 3, at 71-72, as well as on a 1984
investigation by the Drug Enforcement Administration into suspected
drug activity by Bulger and Flemmi, id. at 23.15 The district court
also found that "there had long been allegations of leaks by
Connolly from the Massachusetts State Police." 447 F. Supp. 2d at95 n.71.
Despite the concerns from various sources that Connolly
was improperly disclosing information to Bulger and Flemmi, he
consistently received one of the FBI's top two ratings for his
overall performance and his handling of informants throughout the
period from 1978 to 1987. Id. at 96. On one occasion, Connolly's
then-supervisor, Agent James Ring, was chastised by an inspector
15
The DEA investigation did not produce results even though
Bulger and Flemmi were involved in drug trafficking from
approximately 1981 to 1990. 447 F. Supp. 2d at 94 (citing Tr. Day
2, at 62-63 (Flemmi testimony)). They eventually were indicted for
their drug activity in 1995.
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from FBI Headquarters for rating Connolly "superior" rather than
"exceptional." Id. at 97. In a memo to the Special Agent in
Charge of the Boston Office, Inspector Bob Reutter stated that he
considered "'the contributions made by SA [Special Agent] Connolly
as crucial to the overall OC [Organized Crime] program and
substantial in terms of the results achieved.'" Id. (quoting Ex.
55w, Memo of July 8, 1987). Connolly was repeatedly recommended
for salary increases and monetary awards on the basis of his
performance,16 and he was asked by FBI Headquarters to instruct
other federal agents on the development and handling of informants.
Id. In 1988, he became the Organized Crime Drug Enforcement Task
Force Coordinator in the Boston Office. Id.D. McIntyre's FBI Involvement and Murder
McIntyre's relationship with the FBI's Boston Office
began in the fall of 1984, shortly after the United States Customs
Service seized a ship, the Valhalla, on which he was serving as a
16
In a Performance Appraisal Report covering the period from
November 15, 1981 through November 12, 1982 – during which Halloran
and Callahan were killed – Connolly was praised for "develop[ing],
maintain[ing], and operat[ing] a corps of extremely high level and
productive informants." Ex. 55e. The Report continued: "His
direction and their resultant information has brought about results
exceeded by none in the Boston Division's Organized Crime Program.
. . . His performance has been at the level to which all should
aspire to attain but few will realistically reach." A memo from
the Boston Office to the Director of the FBI in August 1981 stated
that Connolly "currently operates . . . high-placed informants
furnishing information on Organized Crime in the New England area
and has significantly contributed toward the achievement of the OC
Squad goals and objectives especially through his skillful
direction of high-quality informants." Ex. 55h.
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crew member. The Valhalla had just returned from Ireland, where it
had delivered an illegal cargo of weapons and ammunition for the
Irish Republican Army ("IRA"). McIntyre, one of two crew members
on board, had already been cooperating with agents of the Drug
Enforcement Agency ("DEA"),17 and the next day, October 17, 1984,
he met with a Customs agent, Philip Brady, and two FBI officers,
Roderick Kennedy and George Bertram. Brady and Kennedy were
members of the Drug Task Force, which consisted of representatives
from Customs, the IRS and the FBI. Bertram was present at the
meeting because he covered the IRA for the FBI. 447 F. Supp. 2d at
99.
During the meeting, McIntyre discussed an upcoming drug
shipment that was expected by Murray, whom customs already knew
paid "tribute" – a fee – to Bulger so that he could safely operate
his drug smuggling operation in South Boston.18 Id. McIntyre
confirmed the Murray-Bulger connection, reporting that "'an
individual named Whitey [a Bulger nickname] who operates a liquor
store in South Boston became partners with Joe Murray.'" Id. at
100. McIntyre was released after he agreed to cooperate with
Customs and the FBI in the ongoing investigation into Murray's drug
17
McIntyre was working at the time for Joe Murray, another
Boston crime figure who was involved in drug and weapons smuggling.
18
Bulger and Flemmi collected "rent" or tribute from other
criminals as payment for the privilege of conducting activity
within territory controlled by them. Id. at 94 n.69.
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activities. On the basis of information he provided, the combined
law enforcement agencies seized Murray's next drug load on a ship,
the Ramsland, as it entered Boston Harbor in mid-November 1984.
McIntyre was on board as a member of the "substitute crew" that had
replaced the ship's English crew at the mouth of the harbor. The
ship was carrying thirty tons of marijuana, and Flemmi testified
that he expected to receive $1 million from the shipment's sales
proceeds. Kevin Weeks, another Winter Hill member, testified that
he, Bulger and Flemmi each were to receive $3 million.
After the Ramsland was seized, McIntyre reported to Brady
that Murray suspected someone in the substitute crew of cooperating
with law enforcement. McIntyre did not feel that he was in danger,
and Brady also assumed McIntyre was not at risk because there had
been no apparent change in his relationship with Murray. Id. at
101. On November 22, a few days after the Ramsland's seizure,
McIntyre reported to Brady that Pat Nee, a Bulger associate, had
offered him the opportunity to invest $20,000 in a drug smuggling
venture. Id. In reality, the "offer" was a ruse designed to lure
McIntyre to meet with Bulger and Flemmi. Id. at 102. Customs
provided McIntyre with the money, and McIntyre delivered it to Nee
on November 29. The next day, Nee brought McIntyre to a house in
South Boston, where McIntyre had expected a social gathering.
Instead, Flemmi and Bulger confronted him with their suspicion that
he had been cooperating with Customs. After securing McIntyre's
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confession of his complicity with law enforcement, Bulger made an
unsuccessful attempt to strangle him, and then shot and killed him.
Id. at 102-104. Fifteen years later, on January 14, 2000, Weeks
led authorities to McIntyre's makeshift grave.19
Bulger and Flemmi learned that McIntyre was an informant
from Connolly, who had disclosed that one of the two individuals
taken off the Valhalla was cooperating with law enforcement.
Although Connolly did not identify McIntyre by name, the
information he conveyed was sufficient to reveal his identity to
Bulger and Flemmi, who knew that McIntyre had been one of the two
people on the ship.
E. The FTCA Litigation
The relationship between the Winter Hill gang and the
Boston Office of the FBI was publicly exposed in 1999 in a lengthy
opinion issued by Judge Mark Wolf of the Massachusetts District
Court in United States v. Salemme, 91 F. Supp. 2d 141 (D. Mass.
1999), rev'd in part, 225 F.3d 78 (1st Cir. 2000).20 In his
19
McIntyre originally was buried in the basement of the house
where he was killed, next to another Bulger-Flemmi murder victim,
Arthur Barrett. See Barrett v. United States, 462 F.3d 28, 30 (1st
Cir. 2006). A third victim, Deborah Hussey, was murdered and
buried in the house in early 1985. The remains of all three were
removed on Halloween night in 1985, when it appeared that the house
was about to be sold, and they were re-buried in Dorchester. 447
F. Supp. 2d at 104 n.88.
20
Francis Salemme was an associate of Bulger and Flemmi, and
he was indicted with them and others in January 1995 for varied
organized crime activities. Judge Wolf presided over the complex
proceedings in that case. The opinion cited above reviewed the
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decision, Judge Wolf outlined a possible pattern of corruption
involving Bulger, Flemmi, Connolly and at least one of Connolly's
FBI supervisors, John Morris. Judge Wolf speculated in his
opinion that Connolly may have disclosed McIntyre's identity to
Bulger and Flemmi. Id. at 213; see also McIntyre v. United States,
367 F.3d 38, 40 (1st Cir. 2004).
Five months later, in January 2000, McIntyre's body was
recovered. On May 25, 2000, McIntyre's estate, through its
administrator (McIntyre's mother, Emily McIntyre) and co-
administrator (his brother, Christopher McIntyre),21 filed this
action against the United States under the Federal Tort Claims
Act.22 The statute provides that the United States may be sued for
money damages for personal injury or death caused by the negligent
or otherwise wrongful acts or omissions of its employees while
acting within the scope of their office or employment. 28 U.S.C.
background of Flemmi's and Bulger's relationship with the FBI,
describing many of the same incidents detailed in the district
court's opinion in this case. Much of the analysis in Judge Wolf's
opinion was devoted to Flemmi's motions to dismiss the charges
against him and to suppress statements he had made to the FBI based
on FBI promises of immunity.
21
For convenience, we at times will refer to the plaintiffs
in this case as McIntyre.
22
McIntyre also asserted claims against Bulger, Flemmi, Weeks
and eight former agents of the Boston Office of the FBI, including
Connolly. The district court bifurcated the trial of the claims
against the United States from the trial of the individual claims,
and only the case against the government is before us.
-19-
§ 1346.23 The McIntyre claim was premised on multiple theories: (1)
that the FBI directly caused McIntyre's death when Connolly
informed Bulger and Flemmi that McIntyre was cooperating with
authorities, foreseeably leading to his murder, (2) that the agency
indirectly caused his death through the protection its agents
afforded Bulger and Flemmi, which encouraged and enabled them to
commit murders, including McIntyre's, and (3) that other agents
negligently supervised Connolly, failing to take corrective action
even though they knew or should have known that Connolly was
leaking information to Bulger and Flemmi and protecting them from
investigation, arrest and prosecution. McIntyre, 367 F.3d at 41;
McIntyre, 447 F. Supp. 2d at 59. The claims proceeded to trial on
June 5, 2006.24
23
The FTCA is a limited waiver of the federal government's
sovereign immunity, granting federal courts jurisdiction over
claims that fall within its scope. These include claims
for injury or loss of property, or personal injury or
death caused by the negligent or wrongful act or omission
of any employee of the Government while acting within the
scope of his office or employment, under circumstances
where the United States, if a private person, would be
liable to the claimant in accordance with the law of the
place where the act or omission occurred.
28 U.S.C. § 1346(b)(1).
24
The district court had granted the government's motion to
dismiss McIntyre's action as untimely on the ground that the
prerequisite administrative claim was not filed within two years of
accrual, as required by the FTCA, 28 U.S.C. § 2401(b). We reversed
the dismissal and remanded after concluding that the factual
predicate for McIntyre's claims could not reasonably have been
known earlier. See McIntyre, 367 F.3d at 56-57.
-20-
On September 5, 2006, the district court issued its
comprehensive decision in favor of the plaintiffs, reaching only
the first of McIntyre's theories of liability. The court found the
United States responsible for McIntyre's death "because Connolly,
acting within the scope of his employment, disclosed information to
Bulger and Flemmi sufficient for them to identify McIntyre as a
government informant, and McIntyre's death was a foreseeable
consequence of that disclosure." 447 F. Supp. 2d at 60. As noted
above, the court awarded McIntyre's estate approximately $3.1
million in damages.25
II.
An FTCA suit may be brought only if the conduct on which
the action is based would support a cause of action against a
private person under "the law of the place where the act or
omission occurred." 28 U.S.C. § 1346(b)(1); McCloskey v. Mueller,
446 F.3d 262, 266 (1st Cir. 2006). In this instance, the
applicable state law is the Massachusetts wrongful death statute,
which allows recovery for deaths caused by negligence. Mass. Gen.
Laws. ch. 229, § 2; see also Mitchell v. United States, 141 F.3d 8,
13 (1st Cir. 1998).
25
The damages consisted of $3 million for McIntyre's conscious
suffering during the few minutes that Bulger attempted to strangle
and then shot him, $100,000 for his mother's loss of consortium,
and $1,876 in funeral and burial expenses.
-21-
To succeed with such a claim under the FTCA, the
plaintiff must satisfy the state's standard for tort liability.
Mitchell, 141 F.3d at 13. Under Massachusetts law, "a tort
plaintiff must show that (1) the defendant owed him a duty, (2) the
defendant breached that duty, (3) the breach constituted a
proximate cause of the ensuing harm, and (4) the breach caused
actual injury." Fithian v. Reed, 204 F.3d 306, 308 (1st Cir.
2000); see also McCloskey, 446 F.3d at 267; Jupin v. Kask, 849
N.E.2d 829, 834-35 (Mass. 2006).
In its appeal of the district court's ruling, the United
States presents a narrow challenge:26 it claims that the court erred
only in concluding that Connolly's leak of McIntyre's identity fell
within the scope of his employment for the FBI, the prerequisite to
liability against the United States under the FTCA. See 28 U.S.C.
§ 1346(b)(1) (providing recovery "for personal injury or death
caused by the negligent or wrongful act or omission of any employee
of the Government while acting within the scope of his office or
employment"). The government does not take issue with the court's
findings on the state-law elements of the FTCA claim: that Connolly
had a duty to protect McIntyre from harm at the hands of Bulger and
Flemmi because of his informant status, id. at 106-108, that
26
Both parties also have appealed, on different grounds, the
calculation of post-judgment interest on the damages award.
Neither party disputes the assertion of the other, and we therefore
touch on that issue only briefly in Section III below.
-22-
disclosure of McIntyre's identity as an informant breached that
duty, id. at 108, and that McIntyre's murder was a foreseeable risk
of that disclosure, id. at 111. Accordingly, we confine our
discussion to the scope of employment question.
A. Legal Principles
Whether an employee is acting within the scope of his
employment for purposes of the FTCA is determined by the law of the
state in which the relevant conduct occurred. Aversa v. United
States, 99 F.3d 1200, 1209 (1st Cir. 1996). Under Massachusetts
law, an employee's conduct is within the scope of his or her
employment if (1) it is of the kind the employee was hired to
perform, (2) it occurs within "authorized time and space limits,"
and (3) "'it is motivated, at least in part, by a purpose to serve
the employer.'" Pinshaw v. Metro. Dist. Comm'n, 524 N.E.2d 1351,
1356 (Mass. 1988) (quoting Wang Labs., Inc. v. Business Incentives,
Inc., 501 N.E.2d 1163, 1163 (Mass. 1986)); see also Clickner v.
City of Lowell, 663 N.E.2d 852, 855 (Mass. 1996).
The scope of employment "is not construed restrictively,"
Howard v. Town of Burlington, 506 N.E.2d 102, 105 (Mass. 1987); see
also Commonwealth v. Jerez, 457 N.E.2d 1105, 1108 (Mass. 1983),27
27
In Jerez, the court observed:
We long have recognized that acts not strictly necessary
for fulfilment of an agent's duties nonetheless may fall
within the agent's scope of employment. The scope of an
agent's authority is not construed restrictively in this
Commonwealth, and on several occasions we have considered
-23-
and it may extend beyond the employee's explicit authority, Howard,
506 N.E.2d at 105. "[I]t is ordinarily the actual and customary,
rather than formally described, duties which determine scope of
employment." Id. at 105-106. In elaborating on the employer's
responsibility for unauthorized acts, the Massachusetts Supreme
Judicial Court observed:
"If the act complained of was within the scope
of the servant's authority, the master will be
liable, although it constituted an abuse or
excess of the authority conferred. The master
. . . is justly held responsible when the
servant, through lack of judgment or
discretion, or from infirmity of temper, or
under the influence of passion aroused by the
circumstances and the occasion, goes beyond
the strict line of his duty or authority and
inflicts an unjustifiable injury on a third
person."
Pinshaw, 524 N.E.2d at 1356 (quoting Kent v. Bradley, 480 S.W.2d
55, 57 (Tex. Civ. App. 1972)). We also have recognized that a
principal may be responsible for conduct customarily within its
agent's scope of employment "'even though it is established fact
that the act was forbidden by the principal.'" United States v.
Potter, 463 F.3d 9, 26 (1st Cir. 2006) (quoting Harold Reuschlein
& William Gregory, The Law of Agency and Partnership 167 (1990));
see also Restatement (Second) of Agency § 230 ("An act, although
whether an intentional tort committed by an agent was
performed within the scope of his employment.
457 N.E.2d at 1108 (citations omitted).
-24-
forbidden, or done in a forbidden manner, may be within the scope
of employment.").28
The Restatement lists a number of factors to consider in
determining whether unauthorized conduct is sufficiently similar or
incidental to authorized conduct to be within the scope of
employment, including whether the employer "has reason to expect
that such an act will be done," "the similarity in quality of the
act done to the act authorized," "the extent of departure from the
normal method of accomplishing an authorized result," and "whether
or not the act is seriously criminal." Restatement (Second) of
Agency, § 229 (2)(f), (g), (i), (j).29 As with forbidden acts,
criminal acts are not automatically outside the scope of
employment. See Restatement (Second) of Agency § 231.
28
The Restatement illustrates the "forbidden act" principle
by giving the example of a gun salesman who has been directed never
to insert a cartridge while exhibiting a gun. A salesman who
violated the directive would nonetheless be acting within the scope
of his employment. Restatement (Second) of Agency § 230, illus. 1
(1958); see also Potter, 463 F.3d at 26 n.10 (describing
Restatement illustration). We note that Massachusetts courts
routinely rely on the Restatement in examining scope-of-employment
questions. See, e.g., Clickner, 663 N.E.2d at 855; Pinshaw, 524
N.E.2d at 1356; Howard, 506 N.E.2d at 106; Wang,501 N.E.2d at 1166-
67.
29
The other relevant factors listed in § 229(2) are: whether
the act is commonly done by such employees; the time, place and
purpose of the act; the previous relations between the employer and
employee; the extent to which the employer's work is apportioned
among different employees; whether the act is outside the
employer's business or has not been entrusted to any employee; and
whether the instrumentality by which the harm is done has been
furnished by the employer.
-25-
B. The District Court Decision and the Standard of Review
The district court concluded that Connolly's leak of
McIntyre's identity to Bulger and Flemmi was within the scope of
his employment as an FBI agent because "[t]he management of
informants was both a formal job requirement and an actual and
customary duty of FBI agents," 447 F. Supp. 2d at 108, and
communicating with informants was the "'kind of conduct [Connolly]
was employed to perform,'" 447 F. Supp. 2d at 109 (quoting Wang,
501 N.E.2d at 1166). In explaining its conclusion, the court
cited, inter alia, Connolly's long relationship with Bulger and
Flemmi and his responsibility to obtain information from them,
which required Connolly to "maintain his relationship with them and
cultivate their goodwill." Id. The court also noted the decades
of protection afforded to Bulger and Flemmi by the FBI, reflecting
their high value to the agency, and it pointed as well to the
agency's repeated endorsement of Connolly's handling of informants.
Id.
In discussing the third prong of the Massachusetts test
– motivation – the court began by explicitly crediting Flemmi's
testimony that he and Bulger gave Connolly in excess of $200,000
between 1981 and 1990. Id. at 110. The court acknowledged
Connolly's personal interest in keeping Bulger and Flemmi happy,
and found that the leak about McIntyre's identity was partially
motivated by greed and the desire to maintain his friendship with
-26-
the two men. Id. at 111. However, the court also found that he
was "motivated, at least in part, by a desire to promote the FBI's
goal of taking down Cosa Nostra through the use of Bulger and
Flemmi as informants." Id.
We review the scope of employment determination de novo.
Aversa, 99 F.3d at 1210. The underlying factual findings,
including the court's determination of Connolly's motive, are
reviewed for clear error. See Reyelt v. Danzell, 533 F.3d 28, 31
(1st Cir. 2008) ("[T]he [district] court's factual findings are
reviewed only for clear error . . . ."); Aversa, 99 F.3d at 1212-13(noting that district court "justifiably could find" that employee
intended, "at least in part and although misguidedly, to serve an
objective of his employer").
C. Discussion
The government argues that the United States may not be
held responsible for McIntyre's death because Connolly "departed in
[] an extreme fashion from any recognized boundary of the
employment concept . . . , committ[ing] the most fundamental and
heinous betrayal of his job." In the government's view, Connolly's
action was "the opposite of the scope of employment." In the terms
of the multi-prong framework of Massachusetts law, the United
States maintains that leaking McIntire's identity was neither the
-27-
kind of conduct Connolly was hired to perform (prong one) nor
motivated by a purpose to serve the FBI (prong three).30
In support of its view, the government cites numerous
ways in which Connolly's action was at odds with the FBI's
interests. It emphasizes that the leak of an informant's identity
is contrary to explicit FBI policy,31 it violated Connolly's
Employment Agreement with the FBI,32 and such a disclosure would
jeopardize the agency's continuing ability to recruit informants –
who are a crucial tool in the FBI's investigatory efforts. The
government additionally characterizes Connolly's leak of McIntyre's
identity as a form of theft or embezzlement that he committed in
exchange for the money and other gifts provided by Bulger and
30
Prong two – requiring that the conduct occur "within
authorized time and space limits" – warrants little discussion.
There is no dispute that Connolly was the handler for Bulger and
Flemmi when he disclosed McIntyre's identity, and his job was not
confined to specific hours or locations. Consequently, prong two
is easily satisfied.
31
The FBI's Manual of Investigative Operations and Guidelines
cautioned that agents must take care in handling informants "to
insure that they are not provided any information other than that
necessary to carry out their assignments." See Ex. 6, Guidelines,
§ 137-3(8) (1978).
32
The agreement that Connolly signed acknowledges his
understanding that "unauthorized disclosure of information in the
files of the FBI or information I may acquire as an employee of the
FBI could . . . prevent the FBI from effectively discharging its
responsibilities," and he agreed never to "divulge, publish, or
reveal either by word or conduct . . . to any unauthorized
recipient without official written authorization by the Director of
the FBI or his delegate, any information from the investigatory
files of the FBI . . . or disclose any information . . . acquired
as a part of the performance of my official duties."
-28-
Flemmi, and it argues that taking bribes to steal from an employer
can never constitute conduct within the scope of employment.
As to motivation, the government highlights Connolly's
conviction for collaborating with Bulger and Flemmi, and argues
that the McIntyre leak was motivated solely by his desire to
further their joint criminal enterprise and to protect them from
prosecution. The government argues that there is no evidence that
Connolly's revelation of McIntyre's identity was in any way
intended to further the interests of the FBI; rather, it was in
keeping with other acts of betrayal that he committed to advance
his personal interests at the expense of the FBI and its mission.
Connolly's role as Bulger's and Flemmi's handler cannot,
the government insists, place all of his interactions with them
within the scope of his employment. Protecting them at any cost –
and facilitating McIntyre's murder – was not the sort of conduct he
was hired to perform. The government's view is perhaps best
summarized by its statement at oral argument that, by the time of
the McIntyre leak, "this guy [had] crossed to the other side; he
was a criminal who had a day job as an FBI agent."
We understand the government's perspective. Connolly
took advantage of his law enforcement status to form a corrupt
relationship with Bulger and Flemmi. As a general matter,
disclosing an informant's identity to violent criminals who have a
penchant for murdering people whom they consider a threat seems far
-29-
outside the range of conduct Connolly was employed to perform. The
McIntyre leak violated a bright-line law enforcement rule that
informant identity never be revealed, and put at risk the life of
an individual who was helping the FBI. There is some appeal in the
government's position that such conduct is categorically outside
the scope of an FBI agent's employment and that, consequently, it
could only be motivated by Connolly's desire to advance his
lucrative, unlawful second "career."
The government's depiction of the case, however, fails to
acknowledge its extraordinary context. The factors it lists in
arguing that Connolly's disclosure of McIntyre's identity fell
outside the scope of his employment – including the contractual and
policy prohibitions on leaks, the "'seriously criminal'" nature of
his action, and its "extreme 'departure from the normal method of
[handling informants],'" Reply Brief at 8 (quoting Restatement
(Second) of Agency, § 229(2)(j),(i)) – paint Connolly as a lone
renegade whose outrageous, unprecedented behavior could not have
been anticipated by his superiors. This assessment of Connolly's
conduct is unduly narrow.
Although it is undisputed that Connolly had no explicit
authority to disclose McIntyre's identity, we must look to his
"actual and customary" duties to determine if the leak may be
considered within the scope of his employment. Howard, 506 N.E.2d
at 105-106; see also Potter, 463 F.3d at 26;. As we shall explain,
-30-
we agree with the district court that Connolly's disclosure was
within the boundaries of the FBI's longstanding method of handling
Bulger and Flemmi through Connolly, and that it consequently is
"'just'" to treat the harm caused by the disclosure "'as one of the
normal risks to be borne by the business in which the servant is
employed,'" Croes v. United States, 726 F.2d 31, 32-33 (1st Cir.
1984) (quoting Restatement (Second) of Agency, § 229 (cmt. a)).
1. Prong One: Kind of Employment
The FBI as an institution had selected La Cosa Nostra as
its highest priority, and it correctly viewed Bulger and Flemmi as
uniquely effective tools in dismantling Winter Hill's organized
crime competitor. As a result, the two men received kid-glove
treatment from all levels of the FBI for decades. The district
court recounts in great detail that suspicions about Bulger's and
Flemmi's involvement in serious crimes were repeatedly left
unexplored or were pursued minimally, and the FBI routinely
departed from the agency's regulations when working with them –
presumably to assure that they would remain available to provide
critical LCN intelligence.
Examples of this deferential handling of Bulger and
Flemmi abound in the record. They include judgments made by
Headquarters personnel as well as by supervisors in the Boston
Office. Among them are the following, some of which we previously
have described in more detail:
-31-
(1) Bulger and Flemmi were removed from a 1979 indictment
charging a scheme to fix horse races, and listed only as unindicted
co-conspirators, after a request by Connolly and his then-
supervisor, John Morris, because of their value to the LCN
investigation. 447 F. Supp. 2d at 80;33
(2) At the Washington and Boston meetings in May 1982,
high level FBI officials decided to retain Bulger and Flemmi as
open informants despite suspicions about their roles in the Wheeler
and Halloran murders. Id. at 87;
(3) In response to a 1983 request from the Oklahoma City
Office of the FBI that Bulger and Flemmi's informant files be
examined for reports of activity around the time of the Wheeler and
Callahan murders, Connolly wrote a report – two years after the
Wheeler murder and a year after Callahan's – establishing alibis
for Bulger for both dates. Connolly's supervisors apparently
accepted the report without questioning its delay, despite
Connolly's conspicuous violation of FBI guidelines requiring a much
prompter report under the circumstances. Id. at 90-91;34
33
At the time, neither Bulger nor Flemmi was officially open
as an informant. 447 F. Supp. 2d at 80.
34
The district court found that Connolly discussed the alibi
for the Wheeler death with Bulger shortly after the murder, telling
Bulger that if he were implicated in the killing, Connolly would
say that he and Bulger had spoken by telephone the night of the
murder and that Bulger was in Boston, not in Oklahoma City, at that
time. The memo Connolly prepared two years later provided just
such an alibi. 447 F. Supp. 2d at 82 (citing Ex. 111, Memo from
Connolly to SAC). The Manual of Investigative Operations and
-32-
(4) When Bulger and Flemmi eventually were interviewed
about the murders following an inquiry from the Tulsa Police
Department, they were interviewed together at the pair's
insistence, contrary to standard procedures. Id. at 91;
(5) The Boston Office files contained many references to
Bulger's and Flemmi's involvement between 1965 and 1987 in
loansharking and bookmaking, crimes that should have triggered
investigations into their suitability to remain informants. Id. at
76-78 & n.41. Even during periods when Flemmi was closed as an
informant, he was treated as an informant, and during one closed
stretch in 1983, an agent who wanted to interview him approached
him through Connolly. Id. at 74 (citing Tr. Day 13, at 105-107,
Montanari testimony);35
(6) James Greenleaf, the SAC of the Boston Office from
November 1982 through October 1986, testified that investigations
of Bulger and Flemmi by other law enforcement agencies "just didn't
register" with him. This lack of attention to the growing evidence
Guidelines requires that contacts with informants be recorded in
the informant's file at or near the time they occurred. Ex. 6,
Guidelines § 137-8(1) (1981) ("All information pertinent to our
investigative responsibilities furnished by informants must be
promptly reviewed, recorded, indexed, evaluated, channelized, and
all other necessary action taken.").
35
The continuity of the relationship violated FBI guidelines.
The MIOG requires that, when an informant is closed because he is
"no longer suitable to provide information or operational
assistance, his relationship with the Bureau shall be promptly
terminated." Ex. 6, § 137-17, Guidelines Part D(7).
-33-
of the pair's involvement in serious criminal activity allowed him
to avoid meaningful suitability reviews of their status. See Tr.
Day 14, at 104.36
Although the United States asserts that Bulger and Flemmi
escaped prosecution and retained their informant status, sometimes
unofficially, because none of the FBI's suspicions were validated
by concrete evidence, the record supports the district court's
observation that "the FBI was not pounding the pavement looking for
evidence that could 'stick.' Instead, the FBI stuck its head in
the sand when it came to the criminal activities of Bulger and
Flemmi." 447 F. Supp. 2d at 93.37 Indeed, the deference paid to
Bulger and Flemmi did not go unnoticed by the two men. Flemmi
36
Greenleaf testified that a suitability review should be
conducted in response to reports of serious criminal activity, but
no suitability review was conducted for Bulger and Flemmi during
his tenure as SAC of the Boston Office. Tr. Day 14, at 53-54. He
stated that he had received no report that they were involved in
such activity. Id.37
Soon after Fitzpatrick arrived in the Boston Office in 1981,
he met with Bulger and subsequently recommended to Lawrence
Sarhatt, the SAC of the Boston Office from 1980 until November
1982, that he be closed as an informant. Fitzpatrick thought
Sarhatt agreed with him:
I felt . . . that he went along with it. But whatever
happened thereafter, there were other intervening cases,
LCN, and so forth that intruded, and we went on with
other stuff.
Tr. Day 8, at 17. However, when Fitzpatrick made the same
recommendation to McWeeney, the FBI's Organized Crime Chief,
McWeeney "started telling me how valuable Mr. Bulger was." Id. at
21. Fitzpatrick understood that it was a Headquarters decision to
keep Bulger open. Id. at 25.
-34-
testified that the agents in the Boston Office treated him and
Bulger like colleagues, "'like we were FBI agents.'" Id. at 91
n.65 (quoting Tr. June 6, 2006, at 93-94).
Moreover, Connolly's disclosure of McIntyre's identity
was neither his first nor only leak of sensitive information, and
the FBI repeatedly was told of concerns that Connolly was a source
of leaked information. In December 1976, Connolly learned that
Castucci had provided information to the FBI about the whereabouts
of two Winter Hill members. He told Bulger, who promptly arranged
Castucci's murder. Id. at 79. The Boston Office received
information from more than one source that Bulger and Flemmi had
killed Castucci, id., but apparently never asked Connolly if he
knew anything about the circumstances of the murder, id. at 80
n.44.
We previously have described the concerns expressed by
local law enforcement authorities in Massachusetts and Florida
concerning leaks from the Boston Office and from Connolly in
particular. Although this knowledge of local concerns went to the
highest levels of the FBI, the record shows no meaningful follow-
up, even after Halloran's explicit report that someone in the
Boston Office was leaking information to Bulger and Flemmi. Id. at
83 & n.49;38 see also id. at 95 n.71 (noting the concerns "as early
38
At trial, Agent Montanari testified that, despite Halloran's
report about a leak in the Boston Office during the time he was
investigating the murders, he did not believe anyone in the office
-35-
as 1982 that Bulger and Flemmi might be obtaining information
concerning investigations of their criminal activities from the
Boston Office itself"); Tr. Day 9, at 39-40 (Fitzpatrick
testimony). Fitzpatrick testified that he was informed by SAC
Sarhatt upon Fitzpatrick's arrival in Boston in 1981 that Connolly
and his supervisor, Morris, might have leaked information to Bulger
and Flemmi that compromised an investigation by state law
enforcement authorities. Tr. Day 7, at 61. Fitzpatrick also had
been told by FBI Assistant Director McKinnon, who was based at FBI
Headquarters, that there were problems in the Boston Office. Asked
at trial if he investigated whether Connolly was "the pipeline" for
Bulger and Flemmi, Fitzpatrick responded that "[i]t wasn't part of
the purview at that time. That was not part of the investigation
at that time." Tr. Day 9, at 40.
Greenleaf, the SAC beginning in November 1982, testified
that he was not focused on the reports that Bulger and Flemmi had
sources within law enforcement generally or within the FBI,
although he was concerned that they were receiving information
about investigations into their activities. Tr. Day 14, at 119.
He knew of no investigation being conducted in response to those
reports. Id.
was improperly disclosing information. Tr. Day 13, at 110. He
said he did not give "any credence" to rumors from other police
agencies expressing distrust of Connolly. Id.
-36-
Instead, as the other law enforcement departments
expressed their concerns about Connolly's relationship with Bulger
and Flemmi, Connolly was being highly praised by his superiors for
his handling of informants. As described supra, he consistently
was given the highest possible ratings for his overall performance
and his work with informants, even after questions arose about
whether he might be Bulger's and Flemmi's "pipeline."
We recognize that not every agent in the FBI's Boston
Office condoned Connolly's tactics or ignored every allegation of
serious criminal behavior by Bulger and Flemmi. To the contrary,
SAC Sarhatt looked into allegations of leaks related to a wiretap
in the late 1970s and, in a personal interview of Bulger, asked if
he had received any information from a member of the FBI. Bulger
responded negatively. Id. at 83 n.49. Fitzpatrick, who was in
charge of the C-3 Squad through the mid-1980s, testified that he
locked up investigative files on the Wheeler murder after Agents
Montanari and Brunnick expressed concerns that Connolly had been
rifling through the material and passing information along to
Bulger. Tr. Day 7, at 21-24.39 Brunnick and Montanari amassed
substantial files on the Wheeler-Halloran-Donahue-Callahan murders
in what appears to have been, on their part, a good-faith
investigation that was frustrated by the Boston Office's collegial
39
Montanari testified that he never told Fitzpatrick about
Connolly rifling through his files and did not remember Brunnick
expressing such a concern. Tr. Day 13, at 89.
-37-
relationship with Bulger and Flemmi.40 Supervisor Ring chastised
Connolly for being overly friendly with Bulger and Flemmi and
instructed him to stop meeting with informants at his own home.
Id. at 98; Tr. Day 16, at 76, 80 (Ring testimony). But such
discrete expressions of concern about Connolly's interactions with
the pair and their possible involvement in serious criminal
activity do not dispel the dominant impression created by the
record that the FBI, both within the Boston Office and at
Headquarters in Washington, engaged for years in a strategy that
gave Connolly wide berth in his interactions with Bulger and
Flemmi.
The United States argues that, even conceding that the
FBI took some steps to preserve the flow of information from Bulger
and Flemmi, Connolly's disclosure of McIntyre's identity – leading
foreseeably to his death – was "dramatically different from all of
the other acts cited by the plaintiffs" and directly contrary to
the FBI's interests. That assertion does not fairly reflect the
record. As we have described, Connolly had revealed sensitive
information in the past, including the identity of informants. FBI
Headquarters knew that other law enforcement agencies suspected
Connolly of being the leak in the Boston Office, but it made no
40
The district court commented that "the investigation is more
notable for what was not done than for what was done," including
the absence of "serious interrogation of the prime suspects, Bulger
and Flemmi." Id. at 93.
-38-
effort to seriously investigate the allegations or to terminate
Connolly's relationship with Bulger and Flemmi. Unquestionably,
the disclosure at issue in this case was officially unauthorized
and forbidden. However, it was not outside Connolly's customary
range of activity. Even if we accept that the FBI's failure to
seriously investigate the allegations against Connolly, and to
instead praise his abilities, does not constitute tacit approval of
his methods, the agency's attitude at least reflects a judgment
that Connolly's at-the-edge conduct could be tolerated for the
greater good of bringing down La Cosa Nostra. McIntyre's death was
one of the consequences of that attitude.
The United States argues that deeming Connolly's leak to
be within the scope of his employment leads inevitably to the
conclusion that Connolly also would have been acting within the
scope of his employment if he had shot McIntyre himself. That
dramatic argument ignores the claim actually before us. Nothing in
this record suggests that Connolly committed acts of violence
himself that were condoned by the FBI. By contrast, the leak of
McIntyre's identity fell within the range of activity that had
become customary for Connolly without reprisal from his superiors
-- despite their awareness that he may be engaging in such conduct.
At some point, unauthorized conduct will cross the line between
acts that fall within the employee's scope of employment and those
that are so far removed from the employer's methods and purposes
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that they fall outside it. The question here was where on the
spectrum to place Connolly's leak of McIntyre's identity. For the
reasons we have discussed, we hold that the scope of Connolly's
employment was broad enough to encompass this kind of conduct.
2. Prong Three: Motivation
The district court did not commit clear error in
concluding that Connolly's favors to Bulger and Flemmi – including
his unauthorized disclosure of confidential information – were
motivated at least in part by a desire to advance the FBI's agenda.
See 447 F. Supp. 2d at 111.41 Through his connection with Bulger
and Flemmi, Connolly was able to simultaneously help the FBI
succeed in its efforts against LCN and help Bulger and Flemmi in
their quest to control organized crime in Boston, thereby
solidifying his status in both realms. Connolly received both
salary increases and monetary awards from the FBI on the basis of
his performance, which, as we have explained, was highly praised
41
After noting that he credited Flemmi's testimony that
Connolly received more than $200,000 in cash and gifts from Bulger
and Flemmi, the district court explicitly found that "Connolly was
motivated in part by greed and his friendship with Flemmi and
especially Bulger." 447 F. Supp. 2d at 111. The court then
rejected the notion that Connolly's motivations were "purely
personal." Id. (emphasis omitted). Relying on its extensive
review of the decades-long history of Connolly's relationship with
the two men, the court stated: "For reasons already discussed, I
find that Connolly was motivated, at least in part, by a desire to
promote the FBI's goal of taking down Cosa Nostra through the use
of Bulger and Flemmi as informants." Id.-40-
because of his success in working with Bulger and Flemmi. Id. at
97.
The government points out that the record contains no
direct evidence that Connolly intended to benefit the FBI by
revealing McIntyre's identity, and it emphasizes that every law
enforcement officer who testified stated that leaking informant
identity is always harmful to investigating agencies. However, the
district court did not have to find that identifying McIntyre was
itself in the FBI's interest. Providing Bulger and Flemmi with any
confidential information of use to them would reinforce the
relationship between Connolly and his informants and invite their
continued reciprocity with information about LCN. Thus, even if
Connolly understood that revealing an informant's identity might in
the abstract harm the FBI's future ability to recruit other
informants, that does not diminish the immediate benefit Connolly
would perceive for the FBI from his efforts to get useful
information about LCN from these individuals. Such a cost-benefit
analysis seems particularly rational in the context of the FBI's
national priority to eliminate LCN. See id. at 62 (citing April
23, 1980 memo from FBI Director to Attorney General).
Hence, the facts of this case are unlike those in the
cases cited by the government as examples of employee conduct that
is not fairly attributed to the employer. The circumstances here
are easily distinguishable, for example, from a simple
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embezzlement, see In re American Biomaterials Corp., 954 F.2d 919,
924-25 (3d Cir. 1992), from a day care center employee's sexual
assault of children, Worcester Ins. Co. v. Fells Acres Day Sch.,
558 N.E.2d 958, 967 (Mass. 1990), and from the robbery and murder
of a courier by customs agents, Attallah v. United States, 955 F.2d
776, 781 (1st Cir. 1992). In none of these cases is there a
plausible theory that the employee's action could have been
motivated in part by the employer's interests. See 447 F. Supp.2d
at 111 n.96 (distinguishing Atallah and similar cases because
"there is no obvious way in which the employees' motivations would
overlap" with those of the employers). Nor does the $200,000 in
money and gifts that Connolly received from Bulger and Flemmi
require a finding that the McIntyre leak was solely a personal
endeavor. The record does not suggest that Connolly received
payments for particular tips, but rather that he received periodic
rewards as part of the ongoing relationship that the FBI expected
him to nurture.42 The district court therefore permissibly found
that the McIntyre disclosure was partially motivated by Connolly's
desire to maintain his relationship with Bulger and Flemmi in order
to further the FBI's effort to dismantle La Cosa Nostra.
42
Flemmi testified that he exchanged money and gifts with
multiple members of the C-3 Squad to maintain "goodwill and
protection." Tr. Day 2, at 93-104.
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3. Conclusion on Scope of Employment
In agreeing with the district court that the FBI is
responsible for McIntyre's death as the foreseeable consequence of
Connolly's leak, we do not suggest that such an outcome was desired
or even contemplated by Connolly's superiors. Moreover, contrary
to the government's suggestion, this outcome is not a judgment
that the government's interests were in fact advanced by McIntyre's
murder. Our conclusion, like the district court's, is only that
disclosure of McIntyre's identity was in keeping with both the
deferential treatment Bulger and Flemmi regularly received from all
levels of the FBI and the kind of conduct Connolly undertook on
other occasions with seeming acquiescence from his superiors. As
such, it fell within the scope of his employment.
III.
The district court initially entered judgment in this
case without addressing post-judgment interest. The plaintiffs
subsequently filed a motion under Federal Rule of Civil Procedure
59(e) seeking an amended judgment that included interest. The
court granted the motion on March 14, 2007, stating that post-
judgment interest would run "only from the date a party seeking
recovery of interest files the judgment with the Secretary of the
Treasury until the judgment is paid." The next day, the court
entered an amended judgment that did not include the timing
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language, but which provided for post-judgment interest to accrue
at a rate of 5.05%.
The United States then filed its own Rule 59 motion,
arguing that, under 31 U.S.C. § 1304(b)(1), it may be liable for
post-judgment interest "only from the date of filing of the
transcript of the judgment with the Secretary of the Treasury
through the day before the date of the mandate of affirmance." The
court denied the government's motion, and the government asks on
appeal that we explicitly hold that the statutory time period
applies to the accrual of interest.
In a cross-appeal, the plaintiffs contend that the proper
post-judgment interest rate is 5.10% rather than the 5.05% rate
specified by the district court. The government concedes that the
higher rate is correct, and the plaintiffs do not dispute that the
statutory time period applies. Consequently, on remand, the
district court should revise its order with respect to post-
judgment interest accordingly.
The judgment of the district court in favor of plaintiffs
is affirmed. The case is remanded for entry of a corrected order
on post-judgment interest. No costs are awarded.
So ordered.
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