Full opinion text
MEMORANDUM OPINION ELLIS, District Judge. This qui tarn False Claims Act (FCA) case involves allegations that defendants submitted tens of millions of dollars in false claims to the Coalition Provisional Authority (CPA), the agency established in Iraq in 2003 to administer and rebuild Iraq during the transition from the overthrown Hussein regime to the new democratic government of Iraq. The novel, threshold question presented is whether the FCA applies to claims submitted to the CPA. I* Relator DRC, Inc. (DRC) is an Alabama corporation with its principal place of business in Mobile, Alabama. DRC provides emergency construction, logistics, security, and life support services in disaster areas and war zones. DRC collaborated with defendant Custer Battles, LLC (Custer Battles) in Iraq, either as a subcontractor or joint venturer, in fulfillment of contracts performed for the CPA. Relator Robert Isakson is the managing director of DRC and relator William D. Baldwin was a Custer Battles employee in Iraq. Defendant Custer Battles, a Delaware Limited Liability Company, headquartered in Fairfax, Virginia, was formed in 1989 by defendants Scott Custer and Michael Battles to provide support services to the United States and other governments engaged in wars and conflicts around the globe. Defendants Secure Global Distribution, Mideast Leasing, Inc., and Custer Battles Levant are allegedly related entities of Custer Battles, either as wholly-owned subsidiaries or through common ownership. Defendants Custer Battles, Scott Custer, Michael Battles, Secure Global Distribution, Mideast Leasing, and Custer Battles Levant have filed joint motions and pleadings in this case and are hereinafter referred to as “Custer Battles Defendants.” Defendant Joseph Morris was a manager for Custer Battles in Iraq and has filed separate motions and pleadings. Defendants Laru, Ltd., Muhammed Issam Abu Darwish, a citizen of Lebanon and Iraq, and Murtaza Lakhani, a citizen of Pakistan, are also alleged to have conspired in the purported fraud, but have not yet been served. According to the complaint, Custer Battles and the other defendants conspired to overbill the CPA for tens of millions of dollars in services and facilities in the fulfillment of two CPA contracts awarded to Custer Battles, the first of which was for the provision of security, housing, and related facilities and services at the Baghdad International Airport (BIAP), including armed security at the main gate and perimeter of the airport and a team of Transportation Safety Administration — approved security screeners. The second contract was for security, construction, and operational services to support the Iraqi Currency Exchange (ICE), which was charged with the creation of a new Iraqi currency to replace the “old” Iraqi dinars (bearing the face of Saddam Hussein) with “new” Iraqi dinars. If the allegations in the complaint are true, the fraud was accomplished, in the case of the BIAP contract, by contracting for services and facilities defendants never provided to the CPA, and in the case of the ICE contract, by using “shell companies” to create the appearance of additional costs and overhead, thus inflating the price of those products and services charged on a cost-plus basis to the CPA. Because the threshold issue is whether the FCA applies to these claims presented to the CPA, only the facts relevant to this issue are recounted here, and not the details of the alleged fraud. A. Creation of the CPA The parties understandably devote much of their argument to the nature and genesis of the CPA, for if it were an American agency, then the FCA question would be largely resolved. Yet, in the end, the parties’ efforts in this regard are largely unavailing inasmuch as the essential nature of the CPA ' is shrouded with ambiguity. Even so, the effort has some value insofar as it helps cast light on the parties’ other arguments on the applicability of the FCA. To begin, the CPA’s origins are difficult to pin down, as there is no formal document — whether statute, United Nations Security Council resolution, or other organic document — 'that plainly establishes the CPA or provides for its formation. When the United States and its Coalition partners first occupied much of Iraq in late March 2003, responsibility for providing humanitarian assistance and overseeing the economic reconstruction of Iraq initially fell to the Office of Reconstruction and Humanitarian Assistance (ORHA), an-organization established by President George W. Bush and placed under the operational control of General Tommy R. Franks, who was then both the Commander of the Coalition Forces and the Commander of U.S. Central Command. Many of ORHA’s duties would eventually become the CPA’s responsibility. The earliest public reference to the CPA appears in General Franks’ April 16, 2003 Freedom Message to the Iraqi People. In that message, General Franks, in his capacity as Commander of the Coalition Forces, announced the formation of the CPA as the body that would exercise the temporary powers of government in Iraq. In his words, Our stay in Iraq will be temporary, no longer than it takes to eliminate the threat posed by Saddam Hussein’s weapons of mass destruction, and to establish stability and help the Iraqis form a functioning government that respects the rule of law and reflects the will, interests, and rights of the people of Iraq. Meanwhile, it is essential that Iraq have an authority to protect lives and property, and expedite the delivery of humanitarian assistance to those who need it. Therefore, I am creating the Coalition Provisional Authority to exercise powers of government temporarily, .and as necessary, especially to provide security, to allow the delivery of humanitarian aid and to eliminate the weapons of mass destruction. This proclamation was not followed by any formal document or order establishing the CPA or defining its legal responsibilities. The public record contains no other significant reference to the CPA until May 8, 2003, when the United States and the United Kingdom presented a joint letter to the United Nations Security Council announcing the creation of the CPA. In that letter, the United States and the United Kingdom stated that they “and Coalition partners, acting under existing command and control arrangements through the Commander of Coalition Forces have created the Coalition Provisional Authority, which includes the Office of Reconstruction and Humanitarian Assistance.”. According to the letter, the purpose of the CPA was “to exercise powers of government temporarily” and “to provide security, to allow the delivery of humanitarian aid, and to eliminate weapons of mass destruction.” Id. While the United Nations considered its response to this letter, President Bush, on May 9, 2003, appointed Ambassador L. Paul Bremer to serve as the Presidential Envoy to Iraq, reporting through the Secretary of Defense. The President neither sought nor obtained Senate confirmation for this appointment. Four days later, on May 13, 2003, Secretary of Defense Donald Rumsfeld designated Ambassador Bremer to head the CPA, assigning him the title of “Administrator.” The Administrator was given responsibility for “the temporary governance of Iraq” and to “oversee, direct and coordinate all executive, legislative and judicial functions necessary to carry out this responsibility, including humanitarian relief and reconstruction and assisting in the formation of an Iraqi interim authority.” Shortly after he was installed as Administrator, Ambassador Bremer promulgated the CPA’s first regulation to define the powers of the CPA and to provide for the continued application of existing Iraqi law. CPA Regulation No. 1 provided that, [T]he CPA shall exercise powers of government temporarily in order to provide for the effective administration of Iraq .... The CPA is vested with all executive, legislative, and judicial authority necessary to achieve its objectives, to be exercised under relevant U.N. Security Council resolutions, including Resolution 1483 (2003), and the laws and usages of war. Less than one week later, the Security Council adopted Security Council Resolution 1483 formally recognizing the CPA. See S.C. Res. 1483, U.N. SCOR, U.N. Doc. S/RES/1483 (May 22, 2003) (hereinafter “UNSCR 1483” or “Resolution 1483”). Although Resolution 1483 did not establish or create the CPA, it reaffirmed “Iraq’s sovereignty and territorial integrity,” recognized the “specific authorities, responsibilities, and obligations under applicable international law of these states as occupying powers under unified command (‘the Authority’),” and called upon the CPA, “to promote the welfare of the Iraqi people through the effective administration of the territory.” Id. Among other things, Resolution 1483 also welcomed member states “to contribute to stability and security in Iraq by contributing personnel, equipment, and other resources under the Authority” and noted the establishment of the Development Fund for Iraq (DFI), to be administered by the CPA for Iraq’s (i) humanitarian needs, (ii) economic reconstruction and infrastructure, (iii) disarmament, and (iv) civilian administration. Id. ¶ 12. The resolution further requested that member states freeze all financial assets of the former Government of Iraq located outside of Iraq and transfer them to the DFI. Id. ¶ 23. The parties agree that the CPA was neither created, nor explicitly authorized, by Congress. Nonetheless, a substantial majority of the CPA’s operating budget was appropriated by Congress. More specifically, the CPA’s daily operating budget was initially funded from the Iraq Freedom Fund (IFF), established by Congress as a part of the Emergency Wartime Supplemental Appropriations Act. Of the total amount allocated for this fund, approximately $698 million was appropriated for the operating expenses of the CPA. The IFF provided the CPA’s operating expenses for six months until the passage of a second Emergency Supplemental in November 2003, when Congress appropriated an additional $983 million for CPA operations. Given this amount of Congressional funding, it is not surprising that Congress in November 2003 (which is after the time period relevant here), also began to exercise financial oversight of the CPA through the appointment of an Inspector General for the CPA (IG-CPA). See id. References to the CPA in Congress’ November 2003 Emergency Supplemental reflect a somewhat mixed understanding of the CPA’s legal status. Thus, the CPA is first referred to as an entity established “pursuant to United Nations Security Council resolútions including Resolution 1483;” later, the Supplemental notes that certain money appropriated in the Act would be earmarked for the “Coalition Provisional Authority in Iraq (in its capacity as an entity of the United States Government).” See 117 Stat. at 1225. The parties dispute whether these legislative references indicate that the CPA is a U.S. entity, but they do not argue, nor does the record suggest, that Congress had a hand in the creation of the CPA. Although the circumstances of its creation are unclear, the CPA under Ambassador Bremer’s direction had begun by May 2003 to exercise civil governing authority in Iraq. Significantly, the CPA was staffed with an assortment of civilians and military personnel from (i) various Coalition countries, (ii) Iraqi expatriates from the Iraq Reconstruction and Development Council, and (iii) temporary civilian hires or contractors. While the substantial majority of the positions in the CPA were filled by United States citizens, many of whom-were also United States government employees, an average of 13% of CPA personnel came from other Coalition partners, including Australia, the Czech Republic, Denmark, Italy, Japan, Poland, Romania, Spain, the United Kingdom, Ukraine, and others. Also significant is that high level CPA positions were not filled solely with U.S. personnel; British, Australian, and Polish officials also served in high level CPA positions. Following its creation in May 2003, the CPA governed Iraq for the next thirteen months. On June 28, 2004, the CPA was dissolved and authority was handed over to the Interim Government of Iraq, which governed Iraq until an elected Transitional Government of Iraq assumed this responsibility. - B. Sources of Funding . In contrast with the CPA’s nature and genesis, which are shrouded in ambiguity, the CPA’s funding sources provide disposi-five clues to the FCA question presented and hence the parties’ arguments also appropriately focus substantial attention on this subject. ■ - The CPA conducted its operations and awarded contracts for projects intended to promote Iraq’s reconstruction from four primary funding sources: (i) funds appropriated by Congress from the general revenues of the United States (hereinafter “Appropriated Funds”); (ii) Iraqi funds confiscated by the President and vested in the Department of the Treasury (hereinafter “Vested Funds”); (iii) Iraqi state assets, primarily in the form of currency and negotiable instruments, seized by the Coalition Forces occupying Iraqi territory (hereinafter “Seized Funds”), and .(iv) funds from the Development Fund for Iraq (DFI). Significantly, it is undisputed that the contracts awarded to Custer Battles did not obligate U.S. Appropriated Funds. Each of the three other funding sources, however, was used to pay invoices submitted by Custer Battles for payment on the two contracts at issue. The CPA distinguished these three categories of funds from Appropriated Funds, describing them collectively as “Iraqi Funds.” According to the CPA, Iraqi Funds “belonged] to the Iraqi people,” and were to be stewarded and managed for their benefit. Although eye-catching, the CPA’s labeling of these funds is not definitive; it is the ownership of each of these funds that is ultimately relevant to the FCA analysis, not the use to which the owner put the funds. Hence, it is necessary to describe each category of funds in some detail. 1. Vested Funds Vested Funds consist of Iraqi funds confiscated pursuant to Executive Order from United States bank accounts held in the name of the Government of Iraq and its various agencies and instrumen-talities. The authority for such an order derives from the International Emergency Economic Powers Act (IEEPA), which provides that when the United States is engaged in armed conflict or has been attacked by a foreign country or foreign nationals, the President has the authority to confiscate property within the jurisdiction of the United States belonging to any foreign entity that he determines has planned, authorized, aided or engaged in those hostilities. See 50 U.S.C. § 1702(a)(1)(C). Importantly, the IEEPA further provides that “all right, title, and interest” in the seized property shall vest in any agency or person the President designates. Id. In 2003, the President twice exercised this authority, issuing Executive Orders directing that certain Iraqi assets should vest in the United States Treasury. The first Vesting Order, issued on March 20, 2003 the day after armed hostilities began, served to confiscate funds that had been frozen since the first Gulf War in 1990 when President George H.W. Bush directed that these assets be blocked. Specifically, the first Vesting Order “confiscated and vested in the Department of the Treasury” all “blocked funds held in the United States” in various accounts held by the Government of Iraq and associated agencies or instrumentalities. See Confiscating and Vesting Certain Iraqi Property, Exec. Order No. 13290, 68 Fed.Reg. 14307 (Mar. 24, 2003). It also stated that the vested property “should be used to assist the Iraqi people and to assist in the reconstruction of Iraq,” and authorized Treasury Secretary John Snow to take additional steps as necessary to carry out the Order. 68 Fed.Reg. at 14307. ■ In 'turn, Secretary Snow directed the Federal Reserve Bank of New York (FRBNY) to establish a new Treasury Special Purpose Account to hold and manage these Vested Funds. Of the approximately $2.1 billion in frozen Iraqi assets that vested in the United States Treasury pursuant to the first Vesting Order, approximately $192 million was transferred from the Special Purpose Account directly to the DFI, where it was made available for expenditure at the direction of the CPA. See IG-CPA, Quarterly Report at 58-59. But the substantial majority of the Vested Funds, approximately $1.7 billion, was converted into cash and shipped to Iraq over the course of seven months. See id. The funds were used to make payments to Iraqi civil servants and pensioners, as well as to fund both Iraqi ministry operations and repair and reconstruction contracts. When additional funds were needed by the CPA, a shipment of Vested Funds was withdrawn as U.S. currency from the FRBNY Treasury Special Purpose Account at the direction of the Treasury Department and at the request of the Office of the Secretary of Defense. Cash shipments were made to Camp Arifjan, Kuwait under military supervision in the form of shrink-wrapped pallets of U.S. bills. Different denominations were sent depending on the needs of the CPA. Once the shipment arrived, the Army’s 336th Finance Command (FINCOM) took control of the cash assets and responsibility for their security and recorded their receipt in an account designated for cash deposits and disbursements of Vested Funds. On August 28, 2003, the President issued a second Vesting Order to confiscate certain additional property of the former Iraqi regime and property of its senior officials and their family members. Unlike the first Vesting Order, this second Order directed that, after vesting in the Treasury, all newly .vested property should be promptly transferred to the Development Fund for Iraq. Id. § 2. In all, approximately $16 million was vested in the Treasury and promptly transferred to the DFI pursuant to this second Vesting Order. See IG-CPA Quarterly Report at 59. Thus, counting the funds already transferred to the DFI pursuant to the first Vesting Order,, this brought the total of Vested Funds transferred to the DFI to approximately $210 million. 2. Seized Funds A second category of funds, Seized Funds, consists of Iraqi state- or regime-owned cash, funds, or realizable securities that were found and seized by Coalition Forces in Iraq as an occupying force in accordance with the laws and usages of war, including the well-publicized funds hidden in or near Hussein’s presidential palaces. When the President delegated the authority to seize these assets, he directed that Seized Funds should be used “only to assist the Iraqi people and support the reconstruction of Iraq, consistent with the laws and usages of war.” In total, $927 million in currency was seized by United States and Coalition Forces, primarily in the form of U.S. dollars, but also in euros, Iraqi bonds, and Iraqi dinars. Coalition Forces also seized non-financial assets, including real estate, motor vehicles, and jewelry, which were turned over to the Iraqi Ministry of Culture on June 18, 2004, shortly before the termination of the CPA. See IG-CPA Quarterly Report at 58. Seized Funds never physically left the war zone in Iraq and Kuwait. Following seizure of these assets by Coalition Forces, they were transported to U.S. Army Camp Arifjan, Kuwait, where they were placed in the custody of the 336th FINCOM. Once the authenticity of the funds was verified and the public property status of the assets was confirmed, the deposit was recorded under a Treasury account number reserved for “Collection of Seized Funds.” Like Vested Funds, the Army was responsible for maintaining the security of and managing the accounting for Seized Funds until they were disbursed. In contrast with Vested Funds, which were reported on the general fund financial statements of the Army and distinguished from Army assets only in the footnotes, Seized Funds were separately reported on Department of Defense (DoD) and Department of the Army financial statements in a “Statement of Custodial Activity.” More specifically, Seized Funds were reported on balance sheets as “Non-entity Seized Iraqi Cash” separate from “entity assets.” S. Development Fund for Iraq The DFI was established through the coordinated effort of the United Nations and the CPA to fund relief and reconstruction efforts in Iraq. It was established to hold various funds for Iraq’s reconstruction needs, including (i) deposits from surplus funds in the U.N. “Oil for Food” program, (ii) revenues from export sales of Iraqi petroleum and natural gas, (iii) international donations, and (iv) repatriated Iraqi assets seized by the United States and other nations. While the DFI was administered by the CPA and the corpus of the account was held at the Federal Reserve Bank of New York (FRBNY), it was recorded on the books of the Central Bank of Iraq. Significantly, as the government conceded in its brief, “[t]he funds in the DFI have always been Iraqi funds.” Gov’t Br. at 35. On May 17, 2003, at Ambassador Bremer’s request, the DFI bank account, entitled “Central Bank of Iraq/Development Fund for Iraq,” was established at the FRBNY as a foreign central bank account, owned by and subject to the instructions of the Central Bank of Iraq (CBI). Shortly thereafter, on May 22, 2003, the United Nations Security Council formally recognized the creation of the DFI in Resolution 1483. See UNSCR 1483 ¶ 12. It further provided that the fund should be held by the Central Bank of Iraq and “disbursed at the direction of the Authority,” and stated that the assets should be used in a transparent manner for purposes that would benefit the Iraqi people. See UNSCR 1483 ¶¶ 13, 14. Resolution'1483 also established the principal sources of funding for the DFI and directed that it be subject to oversight by an International Advisory and Monitoring Board of the Development Fund for Iraq and to audits by independent public accountants approved by the Board. See id. ¶ 12. Because the CPA was the temporary governing authority in Iraq, and thereby controlled the Central Bank of Iraq, Ambassador Bremer and those he authorized controlled the DFI. Disbursements from the DFI Account in New York were made in one of two ways, either by lump sum shipments of currency to the CBI via U.S. military transport in amounts and at times as directed by the CPA Comptroller’s Office, or by electronic funds transfers (EFT) directly to the parties. When the CPA transferred sovereignty to the Iraqi Interim Government on June 28, 2004, it also transferred administration of the DFI. See IG-CPA Quarterly Report at 59. At the time, the DFI had a liquid asset balance of $6.641 billion. Id. C. Management, Accounting, and Expenditure of Funds The management, accounting, and expenditure of these funds is also relevant to the FCA question presented. This process was substantially similar for Vested and Seized Funds, which required more significant involvement and oversight of the DoD and the U.S. Army. The process differed somewhat for DFI funds, however, which during 'the relevant period were solely controlled, expended, and accounted for by the CPA. ■ 1.- Vested and Seized Funds In the case of Vested and Seized Funds, the process may be broken down into two parts: allocation of funding authority (i.e. budgeting), and contract awards and disbursement. The first step in the process for expending Vested and Seized Funds was the allocation of funding authority, which required the approval not only of the CPA, but also of the Office of the Secretary of Defense. This step was initiated when Iraqi Ministries submitted funding requests for review to the CPA Program Review Board (PRB), a committee comprised of high-level CPA officials as well as authorized representatives of the Commander of Coalition Forces, the Iraqi Ministry of Finance, the United Kingdom, Australia, and the Council for International Coordination. The PRB was responsible for reviewing these funding requests, prioritizing them, and integrating them into a “spending plan” for the CPA Administrator’s approval. Id. The CPA Administrator then reviewed and, if appropriate, approved the spending plan. But the approval process did not end there; final approval was still required from the United States government. Specifically, both the Office of Management and Budget (OMB) and the Under Secretary of Defense (Comptroller) were required to approve each funding request from Vested or Seized Funds before the money could be allocated for use by the CPA. Once the allocation of funds was approved, this budget commitment was reported to the 3rd Army Comptroller and the CPA Comptroller and entered on the CPA’s ledger as well as in the Army’s STANFINS system. Importantly, this first step in the process merely distributed funding authority to the CPA. In other words, it confirmed that Seized or Vested Funds were available to meet the Ministry’s funding requests and assured that the funds could be obligated. It did not result in the transfer of the money to the CPA. Rather, the money remained within the dominion, control, and possession of the DoD and the U.S. Army. The next step in the process was the awarding of contracts and the disbursement of funds pursuant to those contracts. In the normal course of events, after the DoD confirmed the CPA’s authority to obligate Seized or Vested Funds, CPA Contracting Officers solicited contract bids and awarded contracts through a competitive bidding process. Once the contract was awarded, the contract award amount was recorded both in STANFINS and the CPA ledger, to document that a certain sum of Seized or Vested Funds had been obligated to pay for a specific contract. Thereafter, the contracts were performed and contractors submitted invoices to the CPA for payment. - In reliance on these invoices, CPA Contracting Officers certified the disbursement of these funds to the United States Army. Importantly, the Army in turn made disbursements from Seized and Vested Funds in reliance on these CPA certifications. Payments were made by electronic fund transfer, check, or cash. CPA payments via check were made with U.S. Treasury checks. And cash payments in dollars were coordinated by the Army’s 336th Finance Command (FIN.COM), which maintained physical control of the currency. Finally, the disbursement of the funds was recorded in the Army’s STANFINS system as well as on the CPA ledger. Vested and Seized Funds weré managed by the processes described here until the CPA’s termination. At that time, virtually the entire balance of these assets was transferred to the Iraq Ministry of Finance. 2. Development Fund for Iraq The initial steps in the funding process were the same for the DFI as for Seized and Vested Funds. Specifically, as with Seized and Vested Funds, before a contract could be awarded, funding requests from Iraqi Ministries had to be approved by the PRB, which recommended an allocation of funds to the CPA Administrator. Unlike Seized and Vested Funds, however, once the CPA Administrator approved the allocation, no approval was needed from the DoD or from the OMB. Id. Also, the management and accounting for the DFI Account did not involve the Army or its STANFINS system. Instead, the CPA’s DFI Manager, appointed by Ambassador Bremer, was responsible for maintaining and updating the DFI Account records. Contracts were awarded by CPA Contracting Officers in accordance with the allocations approved by the CPA Administrator. Then, invoices were submitted to the DFI Manager for approval. The DFI Manager determined the form of payment, whether wire transfer, check, or cash, and executed the disbursement. In the case of wire transfers, the DFI Manager sent instructions to the FRBNY, and transfers were made directly from that account. Cash or check payments were made from the CBI, where funds had been transported from the FRBNY in lump sum shipments of currency via U.S. military transport. In all, throughout the CPA Control Period, the FRBNY made twelve shipments of currency to the CBI totaling approximately $10.3 billion, and approximately. 1,100 electronic fund transfers were executed totaling approximately $6 billion. . D. CPA Contracting Authority Given the exigencies and difficulties attendant to awarding contracts in a war zone, it is not surprising that aspects of U.S. government contracting procedures were integrated into the CPA’s contracting procedures, including the use of U.S. government standard forms and contracting officers who were also employed by the United States and other Coalition countries. Nonetheless, early on, the CPA set out its own very explicit contracting procedures in the form of a Memorandum that were followed and incorporated into CPA contracts. See CPA Memo. No. 4. Unless otherwise exempt, all contracts obligating Vested, Seized, or DFI Funds, were required to be awarded through a competitive bidding process and authorized by a person appointed as a CPA “Contracting Officer.” See CPA Memo. No. 4 (detailing CPA contracting procedures). To the extent practicable, the CPA was to confer the title and authority of a CPA Contracting Officer on officers already holding Coalition government contracting warrants. See CPA Memo. No. 4 § 4. Yet,'the holder of a Coalition government contracting warrant could not award a CPA contract unless the CPA Head of Contracting Authority or his or her designate explicitly conferred this authority on the officer. See id. Although the two contracts at issue here were both signed on standard U.S. contracting forms, the government concedes that in contrast with typical U.S. military contracts, contracts obligating Vested, Seized, or DFI Funds were not subject to U.S. contracting procedures, whether statutory or regulatory, including, for example, the Federal Acquisition Regulations (FAR) or the Truth in Negotiations Act (TINA), 10 U.S.C. § 2306a. Even so, many contracting requirements essentially similar to the competition, transparency, and accountability standards applicable to federally funded U.S. contracts were also set forth in Appendix B to CPA Memorandum No. 4, which provided the “Standard Terms and Conditions” for contracts in excess of $5,000. Memorandum No. 4 further required that these standard terms be incorporated into each CPA contract, including the BIAP and ICE contracts. E. Contracts with the CPA 1. The BIAP Contract On June 19, 2003, the CPA, through the Iraqi Ministry of Transportation, solicited proposals to provide security services at the BIAP. Custer Battles submitted a proposal for the contract and was awarded a one-month letter contract first for the month of July 2003, and later extended for the month of August. On August 6, 2003, the PRB recommended approval of the BIAP contract to Ambassador Bremer, to be paid with $14.8 million from Vested Funds and $2 million in Seized Funds. The funding authority was approved and on August 31, 2003, the BIAP contract was finalized at a firm fixed-price in the amount of $16.84 million. The period of performance was one year, ending June 30, 2004, with a one-year renewal option. Pursuant to the contract, Custer Battles was entitled to the contract price, paid in monthly installments, less three advance payments of $2 million each. While there is some confusion in the record regarding the exact source of each payment, it is undisputed that the large majority of the payments was from Vested Funds and that at least $2 million was paid with Seized Funds. Defendants contend they were repeatedly assured by CPA officials that these were not United States government contracts. For instance, on one occasion, Scott Custer claims he was instructed that his company could not file a request under the Freedom of Information Act, 5 U.S.C. § 552, because the CPA was not an agency of the United States and.thus, U.S. laws and regulations did not apply. See Custer I Tr. at 153, 204-05. Indeed, consistent with this representation, CPA regulations provided that Coalition member laws did not apply to contracts obligating Seized, Vested, and DFI Funds. See CPA Memo. No. 4 at 1-2 (“Iraqi Funds are not subject to the same laws and regulations that apply to funds provided to the [CPA] directly from coalitions [sic] governments.”). Similarly, Michael Battles claims he was assured that a U.N. Resolution required that the CPA be a “separate and distinct entity from any of the warring powers” and that “under no circumstances was it the U.S. government.” Battles Tr. at 67. Relators, on the other hand, point to various facts in the contracting process they contend indicated that Custer Battles was entering into a contract with the United States government. More specifically, the BIAP Contract, and the ICE contract as well, were completed on a United States government form — United States Standard Form (SF) 33. Indeed, the signature block (Block 27) on that form was clearly labeled “United States of America.” Of course, standing in opposition to the simple conclusion that these contracts were with the United States is'that Block 7 of the form also stated that the contract was issued by “CPA — Contracting Authority; Republican Presidential Compound; Baghdad, Iraq, APO AE 09335.” And, moreover, the “Standard Contract Terms and Conditions” incorporated into all CPA contracts for amounts in excess of $5,000 stated that CPA contracts awarding Iraqi Funds — defined as Seized, Vested, and DFI Funds — did not obligate appropriated funds of member governments. Relators also observe that the contracting officer who signed the BIAP Contract on behalf of the CPA, Patricia Logsdon, was a civilian contracting officer employed by the U.S. Department of the Army. Yet, at the time the BIAP contract was signed, Logs-don, certified as a CPA Contracting Officer, also was assigned to the CPA and performed her duties, on the second floor of an Iraqi presidential palace in the CPA headquarters in Baghdad. 2. The ICE Contract On August 27, 2003, Custer Battles signed a second contract with the CPA. to construct camps and provide security and operational support for the ICE project to replace old Iraqi dinars bearing Saddam Hussein’s picture with a new Iraqi currency. In contrast with the BIAP contract, which was awarded to Custer Battles shortly after the creation of the CPA, this contract was awarded by a competitive bidding process, as required by CPA regulations. See CPA Memo. No. 4 § 6. Three bids were submitted in response to the Iraqi Ministry of Finance request for proposals, and Custer Battles won the' contract with the lowest bid of $9,801,550.00. Like the BIAP contract, the ICE contract was drafted using an SF-33 form. And similar to the BIAP contract, it was signed by a U.S. Army officer assigned to the CPA as a Contracting Officer. Yet, unlike the BIAP contract, the ICE contract was not a firm fixed-price contract because the CPA determined that such a contract was not appropriate. Instead, a time and materials contract was awarded, requiring Custer Battles to track its labor hours and material costs, as well as those of its subcontractors, and then allowing payment on a cost-plus basis. The ICE contract underwent a number of modifications, each of which resulted in an increase to the contract price. Each modification was also reflected on a U.S. government SF-30 form, but “Issued by” the CPA and signed by a CPA Contracting Officer. The contract itself identified two sources of funding for the ICE contract: Seized Funds and DFI. A payment of $3,000,000 was paid with Seized Funds by U.S. Treasury check on the day the contract was signed. Then, the remainder of the contract price, approximately $12 million, was paid with DFI funds. F. Procedural History On February 24, 2004, relators filed the complaint under seal, as required by 31 U.S.C. § 3730(b)(2), initiating this civil FCA action and alleging claims under §§ 3729(a)(1), (a)(2), and (a)(3), and as well as § 3730(h). Seven months later, the government elected not to intervene. Thereafter, the complaint was unsealed and served upon the defendants. The Custer Battles Defendants filed a joint motion to dismiss for lack of subject matter jurisdiction pursuant to Rule 12(b)(1), Fed.R.Civ.P., and for failure to state a claim, pursuant to Rule 12(b)(6), Fed. R.Civ.P. Defendant Joseph Morris filed a separate motion to dismiss on the same grounds. In their motions, Morris and the Custer Battles Defendants argued that claims presented to the CPA for Vested, Seized, and DFI Funds did not fall within the False Claims Act because these requests for payment (i) did not represent a “claim for payment or approval” that would, if paid, result in an economic loss to the U.S. government and (ii) were not presented to an officer of the United States. Relators countered, arguing that (i) a “claim” requires only a request for payment that “might result in financial loss to the Government,” (ii) and that the undisputed facts establish that defendants presented or caused to be presented false claims to an officer of the United States. Because it was clear that the issues could not be resolved on the face of the complaint, the motions were converted to motions for summary judgment and a schedule for briefing and limited discovery was set. Additionally, the government was invited, but not required, to submit a brief “setting forth the government’s position with respect to whether the FCA applies to false claims made or presented to the CPA.” United States ex rel. DRC, Inc. v. Custer Battles, LLC, Case No, 1:04cv199 (E.D.Va. Dec. 21, 2004) (Order). The government accepted the invitation to file a brief, taking the position that the FCA applies to claims presented to the CPA (i) because a “claim” includes any request for payment from the United States, whether the government has title to or is merely a custodian of the money paid, and (ii) while not conceding that presentment is required, that the claims were presented to a U.S. government officer. The government declined to answer the question whether the CPA is a U.S. entity, agency, or instrumentality, finding that this determination was unnecessary to its analysis. Yet, because the parties disputed the status of the CPA and because its status seemed relevant to many of the questions raised by this case, the government was directed to answer the question whether the CPA was an entity, agency, or instrumentality of the United States government. See United States ex rel. DRC, Inc. v. Custer Battles, LLC, Case No. 1:04cv199 (E.D.Va. Apr. 12, 2005) (Order). Thereafter, the government, somewhat reluctantly, responded that the CPA was indeed a U.S. instrumentality solely for the limited purposes of the False Claims Act. The parties were then given an opportunity to respond to the government’s briefs. As the issues have now been fully briefed and argued, the matter is now ripe for disposition. II. At the threshold, it is important to identify the proper procedural posture of this case. Defendants have moved for summary judgment pursuant to Rule 56, Fed. R.Civ.P. Summary judgment is appropriate only when, viewing the evidence in a light most favorable to the non-moving party, there is no issue of material fact and the movant is entitled to judgment as a matter of law. Rule 56(c), Fed.R.Civ.P.; see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Matsushita Elec. Indus. Corp. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). It is also true that “the mere existence of some disputed facts does not require that a case go to trial,” rather, “[t]he disputed facts must be material to an issue necessary for the proper resolution of the case, and the quality and quantity of the evidence offered to create a question of fact must be adequate to support a jury verdict.” Thompson Everett, Inc. v. Nat’l Cable Adver., L.P., 57 F.3d 1317, 1323 (4th Cir.1995) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In this ease, to the extent that the facts are known, they are largely undisputed. Thus, the issue to be resolved is whether, on the undisputed facts in the record, defendants are entitled to judgment as a matter of law. III. The qui tam provision of the False Claims Act authorizes “private persons” to bring a civil action for a violation of the FCA in the government’s stead. See 31 U.S.C. § 3730(b). And the FCA provides, in pertinent part, for civil penalties of up to $10,000 per false claim and treble damages against any person who: (1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; and (3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid .... 31 U.S.C. § 3729(a). Although relators seek to prove liability under all three subsections, the parties focused chiefly on § 3729(a)(1). And significantly, resolution of the issues raised by defendants’ challenge to the § 3729(a)(1) claim serves also to dispose of the challenges defendants have raised at this stage to the claims asserted under §§ 3729(a)(2) and (a)(3). Accordingly, the analysis here focuses first on § 3729(a)(1) and defendants’ challenges to the claim based on this provision. In its simplest terms, to establish a pri-ma facie case under § 3729(a)(1) of the FCA, a plaintiff must establish the following elements: (i) a “claim” (ii) that is “knowingly ... false or fraudulent,” and (iii) “presented to an officer or employee of the United States” for payment or approval. 31 U.S.C. § 3729(a)(1). Whether the claims presented to the CPA were knowingly false is vigorously disputed by the parties, but is assumed at this stage and hence not material to the FCA question now at bar. Instead, the central issues for resolution are (i) whether the requests for payment submitted by Custer Battles to the CPA in furtherance of the BIAP and ICE contracts were false or fraudulent “claim[s]” within the meaning of the FCA, and (ii) whether they were presented to an officer of the United States government. Defendants argue they are entitled to summary judgment on both issues. Each of these issues is separately addressed. A. Claim for Payment or Approval The FCA requirement of a “claim” to establish liability under §§ 3729(a)(1), (2), and (3) reflects that the FCA was “not designed to punish every type of fraud practiced on the Government.” United States v. McNinch, 356 U.S. 595, 599, 78 S.Ct. 950, 2 L.Ed.2d 1001 (1958). The statute does not attach liability “to the underlying fraudulent activity or to the government’s wrongful conduct.” Harrison, 176 F.3d at 785 (quoting United States v. Rivera, 55 F.3d 703, 709 (1st Cir.1995)). Only false “claims ” are covered. Thus, a “central question in False Claims Act cases is whether the defendant ever presented a ‘false or fraudulent claim’ to the government.” Id. Although the FCA has long required a “claim” before liability will attach, the term was not statutorily defined until recently. In 1986, Congress amended the FCA to add § 3729(c), which provides that for the purposes of the FCA, a “claim” includes the following: any request or demand ... for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse, such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded. 31 U.S.C. § 3729(c) (emphasis added). Thus, a claim includes any request for payment when the government “provides ... [or] will reimburse” any portion of the money requested or demanded. Id. Relying on this language, relators and the government argue that the term “provides” in subsection (c) must be read broadly to include any demand that causes the government to disburse resources within its legal possession, control, or administration, without respect to whether it is the government’s money that is paid out. Put differently, relators and the government contend that even if the government is merely a custodian of the property, a request for that property triggers the FCA. From this premise, relators and the government conclude that even if Seized Funds, Vested Funds, and DFI Funds were “Iraqi Funds” — so long as the United States administered these funds — then defendants may be held liable for any payments the United States made from these assets in response to a false or fraudulent request for payment. In response, defendants argue that for the government to “provide[] ” or “reimburse ” the money requested or demanded, it must be the government’s money. In other words, a “claim” requires a “call upon the government fisc.” Harrison, 176 F.3d at 785. Despite the recent amendment defining “claim,” the statutory language, by itself, does not definitively exclude either argument. This is so because the plain meaning of the term “provide” is capacious enough to accommodate both arguments. Both interpretations of “provide” advanced by the parties are plausible; neither is obviously correct. Importantly, however, there is a long history of Supreme Court precedent defining the contours of an FCA “claim.” The term was judicially well-defined prior to 1986 and thus the amendment defining the term must be understood in light of that precedent. Courts have often liberally construed the FCA to reach a wide range of fraud committed upon instrumentalities of the United States, but they have always done so consistent with Congress’ purpose in promulgating the Act, namely to protect government funds and property from fraudulent claims for payment. Significantly, no case has held, as relators and the government argue here, that the FCA is so broad as to reach not only false claims presented for government property, but to claims for any property in the government’s possession, even if the government is only a custodian, bailee, or administrator of the property. To the contrary, the Supreme Court, in one of its earliest cases interpreting an earlier version of the FCA, rejected the argument that a “claim” includes a demand for money or property that does not belong to the government, but is merely in the government’s possession. See United States v. Cohn, 270 U.S. 339, 345-46, 46 S.Ct. 251, 70 L.Ed. 616 (1926). In Cohn, the Supreme Court held that a knowingly false and fraudulent request to obtain the release of cigars held in the possession of U.S. customs officials, but owned by a third party in the Philippines, did not constitute a “claim upon or against the Government” because that provision “relates solely to the payment or approval of a claim for money or property to which a right is asserted against the Government, based upon the Government’s liability to the claimant.” Id. Thus, a “claim” does not include property as to which “the Government makes no claim, and which is merely in the temporary possession of an agent of the Government for delivery to the person who may be entitled to its possession.” Id. at 346, 46 S.Ct. 251. Thus, the Supreme Court’s holding in Cohn may be summarized this way: a request for resources from the government does not constitute a claim when the government acts only as custodian or bailee of a third-party’s property. Instead, a “claim” must be a request for government funds or property, i.e. a “call on the government fisc.” Harrison, 176 F.3d at 785. In later elucidations of “claim,” the Supreme Court has not overruled Cohn but instead has implicitly affirmed it. Thus, in United States v. McNinch, 356 U.S. 595, 78 S.Ct. 950, 2 L.Ed.2d 1001 (1958), the Supreme Court ruled that a “claim” is a “demand for money or for some transfer of public property” that requires the government to disburse public funds or to “otherwise suffer immediate financial detriment.” Id. at 599, 78 S.Ct. 950 (citation and internal quotations omitted); see also United States v. Rivera, 55 F.3d 703, 709 (1st Cir.1995). Accordingly, the Supreme Court held that a fraudulent application for credit insurance did not amount to a claim because there was no potential that the government would “suffer immediate financial detriment.” Id. Also in accord with this principle is United States v. Neifert-White, 390 U.S. 228, 88 S.Ct. 959, 19 L.Ed.2d 1061 (1968), where the Supreme Court held that a “claim” for the purposes of the FCA includes not only legally enforceable “claims,” but also a fraudulent application for a loan, emphasizing that the key distinction is whether a false statement is made “with the purpose and effect of inducing the Government immediately to part with money.” Id. at 232, 88 S.Ct. 959 (emphasis added). Or, put differently, a “claim” includes “all fraudulent attempts to cause the Government to ‘pay out’ sums of money.” Id. at 233, 88 S.Ct. 959. Relying on this statement of the rule, relators and the government argue that a “claim” includes any fraudulent request to the U.S. government to “pay out” money, whether the money belongs to the government or whether it was merely in its possession, control or administration. Yet, the Supreme Court in Neifert-White explicitly distinguished the facts presented there from the facts presented in Cohn, emphasizing that Cohn did not involve a fraudulent attempt “to cause the Government to part with its [oim ] money or property,” but that the government acted there only as a “bailee” of goods that did not belong to the United States. Id. at 231, 88 S.Ct. 959 (emphasis added). In contrast, the submission of false loan applications did involve a false claim for government property, even if the grantee had no legal right or “claim” to the loan. Thus, Neifert-White does not stand for the proposition that any request that induces the government to write a check or to hand over money is a “claim.” Instead, consistent with Cohn, it holds that a “claim” is any fraudulent attempt to cause the government to part with its own money. Although Congress added § 3729(c) in 1986 to expand the definition of “claim,” there is no indication that in doing so Congress intended to supplant the well-established principle that a “claim” requires a request or demand for payment from government funds. Put differently, it is true, as relators and the government contend, that the definition in § 3729(c) is not exclusive; it defines what a “claim includes” and hence serves to expand the then-existing judicially-established definition of “claim.” 31 U.S.C. § 3729(c). But importantly, it is a settled principle that judicial precedent not directly inconsistent with that definition survives the amendment. See CoStar Group, 373 F.3d at 553. And, in expanding the definition of “claim,” § 3729(c) did not explicitly overturn the rule that a claim requires a request or demand for payment from government funds. That section still provides for FCA liability when the “United States Government provides” or “if the Government will reimburse” a grantee for the money or property requested, which requirements are not inconsistent with the prior established principle that in doing so the government must do so with its own money, not that of a third party. The government and relators argue that § 3729(c) did overrule this principle as the plain meaning of “provides” in § 3729(c) is “to make ready; prepare,” “to make available,” or “to make arrangements for supplying the means of support, money, etc.” and does not require that the government make such a payment with its own funds. Yet at best, the government and relators identify some degree of ambiguity in the term which is resolved by noting that if Congress intended to announce such a new rule, or to overrule Cohn, it should have been more explicit; it could have stated that the FCA applies whenever the United States processes, rather than provides, the money requested or demanded. But Congress did not do so. And as the Fourth Circuit recently reiterated, “without explicit statutory instructions, the cases drawn upon by Congress in writing legislation are not supplanted by the legislation, and courts may — indeed should — continue to look to these cases for guidance.” See CoStar Group, 373 F.3d at 553; see also Midlantic Nat’l Bank v. New Jersey Dep’t of Envtl. Prot., 474 U.S. 494, 501, 106 S.Ct. 755, 88 L.Ed.2d 859 (1986) (“[T]he normal rule of statutory construction is that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific.”). Thus, the rule that a “claim” requires a request or payment for government property plainly survives the 1986 FCA amendment. Indeed, this conclusion is consistent with every post-1986 decision to consider the definition of a “claim” within the meaning of the FCA. Thus, the Third Circuit in Hutchins v. Wilentz, Goldman & Spitzer held that, [Th]e submission of false claims to the United States for approval which do not or would not cause financial loss to the government are not within the purview of the False Claims Act. Unless these claims would result in economic loss to the United States government, liability under the False Claims Act does not attach. 253 F.3d at 184 (citing United States v. Bornstein, 423 U.S. 303, 309 n. 4, 96 S.Ct. 523, 46 L.Ed.2d 514 (1976) (“The conception of a claim against the government normally connotes a demand for money or for some transfer of public property.”)). In reaching this result, the Third Circuit noted that the purpose of the FCA was “to provide for restitution to the government of money taken from it by fraud.” Significantly, the court rejected and found no case support for the argument that “a false statement to the government which would not cause the government economic loss gives rise to the False Claims Act.” Id. at 183. Similarly, the D.C. Circuit in Totten II, in both its majority and dissenting opinions, agreed that the False Claims Act is limited to false claims “where the Government directly or indirectly provides the funds and suffers the loss.” See Totten II, 380 F.3d at 499 n. 6 (Roberts, J.); id. at 507 n. 8 (Garland, J., dissenting). Moreover, consistent with these rulings, the Fourth Circuit has stated that a “claim” requires a “call upon the government fisc.” Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 785 (4th Cir.1999); see also United States ex rel. Bustamante v. United Way/Crusade of Mercy, Inc., 2000 WL 690250, **4-5, 2000 U.S. Dist. LEXIS 7326, *13-14 (N.D.Ill.2000) (finding no “claim” where payments made by federal entity to United Way because voluntary charitable contributions deducted from employee paychecks were not “federal” funds but personal funds). Thus, a “claim” requires moi'e than' a request or demand for payment from the United States; it must be a request for government money or property, a call on the federal fisc. Although relators and the government cite a number of cases in an attempt to overcome the conclusion that a “claim” requires a call on the federal fisc, these cases are easily distinguished. First, they point to cases that have upheld FCA liability for military contractors that submitted false contract bids to the United States under the Foreign Military Sales (“FMS”) program. See, e.g., United States ex rel. Campbell v. Lockheed Martin Corp., 282 F.Supp.2d 1324, 1338 (M.D.Fla.2003); United States ex rel. Hayes v. CMC Electronics, Inc., 297 F.Supp.2d 734 (D.N.J.2003). . Under the FMS program, the United States acts as the “middle-man” to facilitate the sale of military equipment from military contractors to foreign governments. Yet, in fact the government acts as more than a mere “conduit” in these cases. Rather, the process is comprised of two separate transactions — a transaction between the military contractors and the United States and a transaction between the United States and the foreign governments. See Campbell, 282 F.Supp.2d at 1341 (“Lockheed was obligated to deliver [the military equipment] to the United States and the United States was obligated to pay Lockheed .. .the United States actually takes title to the [equipment] upon delivery from Lockheed, and title then passes from, the United States to the foreign government.”); Hayes, 297 F.Supp.2d at 736 (defendant subcontractor for prime contract caused claims to be submitted to U.S. government for radios that were to be re-sold by the United States to the Saudi Arabian government). Importantly, the Campbell and Hayes courts rejected the argument that the FMS cases involved no claim upon the federal treasury, distinguishing Cohn, Hutchins, and Bustamante. Instead, entirely consistent with the holdings in Cohn, Hutchins, and Bustamante, both courts held that the military contractors presented false claims to the United States for payment, not from money belonging to the foreign government, but from money that had “vest[ed]” in the United States Treasury. Thus, the military contractors in each of those cases presented a “claim” to the United States for payment from “the government fisc.” Harrison, 176 F.3d at 785. Nor are cases interpreting the “distinctly different” FCA liability provision found in 31 U.S.C. § 3729(a)(7) either controlling or persuasive. .Significantly, the Tenth Circuit in Kennard v. Comstock Resources, Inc. noted that the analysis is quite different where, as here, liability is alleged under § 3729(a)(1) because the text of § 3729(a)(7) does not require the presence of a “claim,” but merely that a false record be used to reduce an obligation to “transmit ” money to the Government. See 363 F.3d at 1047 (“The transmission of funds to the Government is enough; there is no requirement in the text that the Government have an ongoing interest in the funds or that the Government itself suffer a loss.”); Koch, 1995 WL 812134, at *16, 1995 U.S. Dist. LEXIS '20832, at *56-57. Relators have alleged a violation not of § 3729(a)(7), but of § 3729(a)(1), and that subsection does require a “claim” for liability to attach. In sum, therefore, § 3729(a)(1) requires a “claim,” or a request or demand for payment that if paid would result in economic loss to the government físc, ie. a request for payment from government funds; it does not extend to cases where the government acts solely as a custodian, bailee, or administrator, merely holding or managing property for the benefit of a third party. The significance of this conclusion for this case is that if the funds used to pay the Custer Battles contracts were “Iraqi funds,” even if administered or held in the possession of the United States, then the presentment of a fraudulent request for payment from these funds does not constitute a “claim” within the meaning of the FCA. On the other hand, if the funds used to pay for the contracts belonged to the United States, then FCA liability may attach if Custer Battles knowingly presented a false or fraudulent claim to a United States government officer for payment from these funds. Thus, it is necessary to consider each source of funds separately to determine whether a request for payment therefrom constitutes a “claim.” 1. Vested Funds Although Vested Funds were at one time property belonging to the Government of Iraq and its various agencies and instrumentalities, they ceased to be so, becoming property of the United States, as of the date of the first Vesting Order directing that they be confiscated and vested in the United States Treasury. By its own terms, the IEEPA provides that “all rig