1. State the rule of law applicable to third persons dealing with representatives of the U.S. government. Does an apparent authority rule bind the government? May the government “disavow” the promises made by their agents beyond their authority?

2. Was it “okay” for the government agents to explain away the terms of the written agreement as being “couched” for discovery purposes, and to assure Humlen that he would get the anticipated remuneration promised?

In 1993, the U.S. Customs Service contacted Peder Humlen on numerous occasions regarding an ongoing investigation of Colombian cartel leader John Jairo Montoya’s drug trafficking activities. In early 1994, FBI Special Agents Craig Howland and Ralph Hope sought Humlen’s assistance in an FBI attempt to secure Montoya’s conviction. Humlen was formally “opened” as an FBI cooperative witness and agreed to wear equipment to record conversations with the subjects of an FBI criminal investigation known as Steelwind. He alleges that Special Agents Hope and Howland promised to reimburse him for his reasonable expenses and compensate him up to $2,000 per month. In addition, Humlen claims that the FBI, through Special Agents Hope and Howland, promised to pay him 25 percent of any monies recovered from property or money forfeiture, $500 for every kilogram of cocaine seized, and a lump-sum award of up to $250,000 at the conclusion of the investigation.

On January 20, 1994, Humlen executed a “Non- Personal Services Agreement” with the FBI to formalize his status as a confidential informant. This agreement was reviewed by the FBI Contracts Unit at FBI Headquarters and signed by the FBI Supervisory Special Agent James Dietz. Under the terms of the agreement, Humlen would provide the FBI with information regarding Montoya’s drug trafficking activities in exchange for a monthly compensation of, at most, $2,000. In addition, The FBI may, at its sole option and choice, elect to furnish Humlen with an award of money upon the completion of the investigation. The amount of any award is at the complete and total discretion of the FBI and/or the Attorney General of the United States and, as stated in 28 U.S.C. § 524 [(1994)], any award for information or assistance leading to a civil or criminal forfeiture is at the complete and full discretion of the Attorney General and shall not exceed the lesser of $250,000 or one fourth of the amount realized by the United States from the property forfeited. In addressing the scope of the agreement, the document expressly stated:

This document constitutes the full and complete agreement between Humlen and the FBI. Modifications to this agreement will have no force and effect unless and until such modifications are reduced to writing and signed by all parties thereto. The agreement also provided that Special Agent Hope is the “designated representative for the FBI Contracting Officer.”

Humlen asserts that when FBI Special Agents Howland and/or Hope presented the agreement for his signature, he asked the agents why the written contract differed from the oral promises they had made to him regarding the 25 percent reward, the $500 per kilogram of cocaine seized, and the “up to $250,000 lump-sum.” In response, the agents allegedly explained that the agreement had to be “couched” in that way because it was a discoverable document in any future criminal prosecution and thus could be used to discredit the plaintiff’s reliability and credibility. The plaintiff maintains that the agents assured him that despite the wording of the contract, he would receive 25 percent of all forfeited money and property, as well as $500 per kilogram of cocaine seized. Based in part on information provided by the plaintiff, Montoya was arrested and pleaded guilty on November 27, 1995, to Interstate Travel and Transportation in Aid of a Racketeering Enterprise, among other charges. In addition, Humlen claims his information led to the arrest of three of ………………..