usa-v-karron-07-cr-541 bj lide direct cross redirect recross trial-transcript
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862ZKAR3 Openi ng - Mr . Rubi nst ei n
1 Gover nment ' s f i r st wi t ness?
2 MR. KWOK: Government cal l s Bet t i J oyce Li de. Wi t h
3 your Honor' s permi ssi on, we woul d l i ke t o hand out j ur y
4 bi nder s.
5 THE COURT: These are exhi bi t s t hat wi l l be admi t t ed
6 i n evi dence, you bel i eve?
7 MR. KWOK: That ' s cor r ect , your Honor .
8 THE COURT: Members of t he j ury, t he government has
9 pr epar ed i ndi vi dual j ur y f ol der s whi ch cont ai n exhi bi t s t hey
10 expect t o have admi t t ed i n evi dence. I woul d al l ow t hem t o
11 di st r i but e t he i ndi vi dual books t o each of you, but you' r e not
12 t o l ook at any of t he exhi bi t s unt i l t hey' ve been admi t t ed i n
13 evi dence. So when t he t i me comes t hat I admi t somet hi ng i n
14 evi dence, t hen you ar e ent i t l ed t o l ook at t hat exhi bi t and
15 onl y t hat exhi bi t unt i l i t ' s admi t t ed, t i l l t he ot her exhi bi t s
16 are admi t t ed i n evi dence.
17 So wi t h t hat i nst r uct i on, I ' l l al l ow t he books t o be
18 di st r i but ed t o t he j ur y and t hey' l l be kept at your - - t hey' l l
19 be r eady f or you i n t he morni ng so you can check your book.
20 I don' t want t o t ake up t he t i me i n t he morni ng.
21 Whi l e t hey' r e di st r i but i ng t he book, I shoul d gi ve you
22 some i nst r uct i ons about t he t r i al day whi l e we' r e wai t i ng f or
23 t hi s wi t ness. I ' d l i ke t o begi n at 9: 30 i n t he mor ni ng and r un
24 unt i l 1: 00 o' cl ock wi t h a si ngl e br eak somet i me bet ween 11: 00
25 and 11: 30, 10 mi nut es. Then come back at 2: 00 af t er l unch and
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862ZKAR3 Li de - di r ect
1 MR. KWOK: Thank you, your Honor .
2 Q. Good af t ernoon, Ms. Li de.
3 A. Hi .
4 Q. How ar e you empl oyed?
5 A. I am wi t h t he Nat i onal I nst i t ut e of St andar ds and
6 Technol ogy, par t of the U. S. Depar t ment of Commerce.
7 Q. What i s your posi t i on now i n t hat?
8 A. I am now a physi cal sci ent i st i n t he i nf or mat i on t echnol ogy
9 l abor at or y.
10 Q. What was your posi t i on bef ore t hen?
11 A. I was wi t h t he advanced t echnol ogy pr ogr am ser vi ng as
12 program manager and t he compet i t i ons manager .
13 Q. What i s t he advance t echnol ogy program?
14 A. The advanced t echnol ogy pr ogr am i s a f undi ng agency, a
15 f undi ng par t of t he Nat i onal I nst i t ut e of St andar ds and
16 Technol ogy whi ch hel ps U. S. i ndust r y per f orm r esear ch t hat i s
17 t oo hi gh r i sk f or t he i ndust r y t o per f or m al one.
18 Q. You ment i oned you were a compet i t i ons manager ; what do you
19 do i n t hat capaci t y?
20 A. As compet i t i ons manager , I over saw t he r ecei pt of al l of
21 t he pr oposal s t o t hat pr ogr am, and t he eval uat i on of those
22 pr oposal s l eadi ng t o whi ch ones woul d r ecei ve f undi ng.
23 Q. Progr am manager , what di d you do i n t hat capaci t y?
24 A. As a pr ogr am manager , I oversaw t he t echni cal
25 commer ci al i zat i on pr ogr ess of each of t he pr oj ect s t hat I
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862ZKAR3 Li de - di r ect
1 managed.
2 THE COURT: What year ar e we t al ki ng about ?
3 THE WI TNESS: We - - I st ar t ed wi t h t he advanced
4 t echnol ogy pr ogr am when i t began i n 1990, and I l ef t i t i n
5 2005.
6 Q. Ms. Li de, who ar e t he t ypi cal r eci pi ent s of t hi s advanced
7 t echnol ogy pr ogr am or ATP gr ant ?
8 A. The r eci pi ent s are U. S. i ndust r i es, and t hey can par t ner or
9 subcont r act t o uni ver si t i es and non- pr of i t s.
10 Q. How compet i t i ve i s t he sel ect i on pr ocess?
11 A. I t i s a ver y compet i t i ve pr ocess.
12 Q. Can you gi ve us a sense of how compet i t i ve i t i s?
13 A. Cer t ai nl y. Most compet i t i ons see onl y about one i n t en
14 proposal s bei ng gi ven an award.
15 Q. And what i s t he amount of t he grant awarded t o each
16 successf ul appl i cant ?
17 A. A si ngl e appl i cant can r ecei ve a t ot al of $2 mi l l i on, and
18 t hat coul d be spread over anywhere f r om one t o t hree years.
19 Q. And where does t hat money come f r om?
20 A. The money comes f r om t he f unds t hat t he U. S. Congr ess gi ves
21 t o t he Nat i onal I nst i t ut e of St andards and Technol ogy.
22 Q. How does t hat money get i nto t he hands of t he successf ul
23 appl i cant ?
24 A. When t he appl i cant i s successf ul , t hat money i s put i nt o a
25 f und, basi cal l y, l i ke a bank account , agai nst whi ch t hat
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862ZKAR3 Li de - di r ect
1 appl i cant can draw.
2 Q. Now what , i f anyt hi ng, does t he gr ant - -
3 THE COURT: I n whose i s name i s t he bank account?
4 THE WI TNESS: I ' m sor r y?
5 THE COURT: I n whose name i s t he bank account ?
6 THE WI TNESS: The bank account i s i n t he name of t he
7 f or pr of i t company. Thank you.
8 THE COURT: The f or prof i t company.
9 THE WI TNESS: Cor r ect . The money must f l ow t o a
10 company t hat i s f or pr of i t . I t cannot f l ow, f or exampl e, t o a
11 uni ver si t y.
12 Q. And what , i f anythi ng, does t he gr ant reci pi ent have t o
13 cont r i but e t o t he cost s of t he r esear ch?
14 A. A si ngl e appl i cant must pay al l of t he i ndi r ect cost s and
15 can cont r i but e t o t he di r ect cost s.
16 Q. What ar e t hese di r ect ver sus i ndi r ect cost s?
17 A. Di r ect cost s ar e t hose f unds t hat go di r ect l y t o t he
18 r esear ch, such as i ndi vi dual sal ar i es or equi pment needed t o
19 per f or m t hat r esear ch.
20 Q. How about i ndi r ect cost s?
21 A. I ndi r ect cost s are t hi ngs t hat woul d be spr ead over al l of
22 t he act i vi t i es of that company, such as f aci l i t i es, rent ,
23 el ectr i c i t y, l egal f ees, secretar i al support , admi ni str at i ve
24 suppor t , l ooki ng f or ot her f undi ng, t hat sor t of t hi ng.
25 Q. So i f a grant has t he cost shar ed r equi r ement , where does
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862ZKAR3 Li de - di r ect
1 t he cost r eci pi ent pay t he cost s shar e amount t o?
2 A. The r eci pi ent must pay hi s or her par t of t hat cost shar e
3 di r ect l y t o t he expenses of t he pr oj ect . So i f a bi g pi ece of
4 equi pment was bought - - was pur chased, t he government woul d pay
5 i t s percent age and t he r eci pi ent woul d pay i t s percent age.
6 Q. And what i s t he t ypi cal per cent age of what t he cost shar e
7 i s?
8 A. I n addi t i on t o t he i ndi r ect cost s, ther e i s no t ypi cal
9 cost s, but what ever per cent age i s put i n t he or i gi nal pr oposal
10 must be adher ed t o f or the l i f e of t he pr oj ect .
11 Q. Now, what , i f anyt hi ng, gover ns how gr ant ees can spend
12 awar d money t hat t hey get ?
13 A. Ther e ar e many document s out l i ni ng how awar dees can spend
14 t he money begi nni ng wi t h a ki t i t t hat t he pr oposer gets when
15 he - -
16 MR. RUBI NSTEI N: Obj ect i on, your Honor . Thi s i s
17 hear say.
18 THE COURT: Do we have t he document s t hat - -
19 MR. KWOK: Yes, I do.
20 THE COURT: Obj ect i on sust ai ned. But t hi s i s
21 i nt r oduct or y, and t he j ur y i s i nst r uct ed t hat they wi l l be
22 gui ded by t he document s t hemsel ves t hat deal wi t h t hi s
23 par t i cul ar gr ant . Thi s i s mor e of a - - what ever you' ve been
24 hear i ng i s not di r ect l y r el evant t o t hi s gr ant .
25 BY MR. KWOK:
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862ZKAR3 Li de - di r ect
1 Q. Let me j ust ask a gener al i nt r oduct or y quest i on, i f I may.
2 What i s t he gener al r ul e t hat gover ns how gr ant ees can spend
3 t hei r money?
4 A. They can spend money on t he di r ect cost s of t he r esear ch.
5 Q. You ment i oned ear l i er t her e' s a budget . What obl i gat i ons
6 do t hey have under t he budget ?
7 A. They must adher e t o t he budget under whi ch t hey appl i ed.
8 Q. Ar e t here ci r cumst ances under whi ch t hey can devi at e f r om
9 t hat budget?
10 A. Yes. Ther e ar e cer t ai n ci r cumst ances. 10 per cent of t he
11 annual amount t hat t hey are goi ng t o spend can be moved wi t hi n
12 exi st i ng cat egor i es.
13 THE COURT: I s t her e any document at i on t o suppor t
14 t hi s?
15 MR. KWOK: Yes, I can i nt r oduce t hem now.
16 THE COURT: Ot her wi se, I don' t t hi nk t hat ' s admi ssi bl e
17 t est i mony.
18 MR. KWOK: Okay. May I approach?
19 THE COURT: Yes.
20 Q. Mi ss Li de, I ' m handi ng you what ' s on t op marked f or
21 i dent i f i cat i on gover nment Exhi bi t 1. And i f you coul d al so
22 l ook at act ual l y gover nment exhi bi t s t wo, t hr ee and f our as
23 wel l . Do you r ecogni ze t hese document s?
24 A. Yes, I do.
25 Q. How are you abl e t o r ecogni ze t hem?
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862ZKAR3 Li de - di r ect
1 A. I hel ped pr epare t hem, I used t hem, and t hey were gi ven t o
2 me as proj ect manager .
3 Q. Were al l of t hese document s prepared by someone wi t h
4 knowl edge of or made f r om i nf ormat i on t r ansmi t t ed by per sons
5 wi t h knowl edge of t he i nf ormat i on appear i ng on t hem?
6 A. Yes.
7 Q. And were t hese document s made at or near the t i me t he
8 i nf ormat i on cont ai ned i n t hem became avai l abl e?
9 A. Yes.
10 Q. I s i t t he r egul ar pr act i ce of NI ST or t he ATP pr ogr am t o
11 prepare such documents?
12 A. Yes.
13 Q. And are t hese document s kept i n t he cour se of a r egul ar l y
14 conduct ed busi ness act i vi t y?
15 A. Yes.
16 MR. KWOK: Government of f ers Exhi bi t one, t wo, t hree
17 and f our .
18 THE COURT: Any obj ect i on, Mr . Rubi nst ei n?
19 MR. RUBI NSTEI N: Yes, your Honor . These are
20 mul t i - page document s t hat t hey j ust have a coupl e of pages on.
21 MR. KWOK: No. Can we approach, your Honor ?
22 THE COURT: Let ' s t ake - - l et ' s l et t he j ur y go, and
23 we' l l deal wi t h i t because t hat wi l l t ake t i me. I t ' s af t er
24 4: 00 o' cl ock. So I ' l l excuse t he j ur y. Why don' t you go t o
25 t he j ury r oom wi t h Mr . Mont eagudo so he can gi ve you t he proper
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1 i nst r uct i ons about how t o get back her e f or 9: 30 i n t he
2 morni ng. So t he j ur y i s excused unt i l 9: 30 i n t he morni ng.
3 ( J ur y exi t s t he cour t r oom)
4 THE COURT: Wat ch your st ep.
5 ( I n open cour t ; j ur y not pr esent )
6 THE COURT: You want t he wi t ness t o st ep out or - -
7 MR. RUBI NSTEI N: I don' t have a probl em because she
8 mi ght be abl e t o hel p us.
9 THE COURT: What ?
10 MR. RUBI NSTEI N: She mi ght be hel pf ul , J udge. My
11 concern i s t hat i t was my underst andi ng t hese document s are
12 mul t i pages, and I ' m t aki ng a l ook at what t he government has
13 gi ven me, and i t seems l i ke t hey' ve ext r act ed cer t ai n port i ons.
14 MR. KWOK: No, I t hi nk t hat ' s a mi sunder st andi ng. I
15 t hi nk Mr . Rubi nst ei n' s associ at e r ecei ved t he f ul l set of t he
16 gover nment exhi bi t s. What we handed out t o t he j ur y j ust now,
17 t he j ur y bi nder s onl y cont ai n t he set t hat we i nt end t o publ i sh
18 t o t hem. So t hey do have a f ul l set of t he document s i n t hei r
19 ent i r et y.
20 THE COURT: What i s t hi s? Thi s f i r st document i s
21 cal l ed - - i t ' s t i t l ed Advanced Technol ogy pr ogr am pr oposal
22 pr epar at i on ki t .
23 MR. KWOK: That ' s cor r ect , your Honor .
24 THE COURT: I s t hat compl et e?
25 MR. RUBI NSTEI N: No, i t ' s not compl ete, your Honor .
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862ZKAR3 Li de - di r ect
1 I t mi sr epr esent s what t he document i s.
2 THE COURT: That ' s what I ' m aski ng.
3 MR. KWOK: No, t he j ur y bi nder s cont ai n - - t he j ur y
4 bi nder s cont ai n sel ect ed pages t hat we i nt ends t o publ i sh on
5 t he scr een so t hey can f ol l ow al ong, but t he exhi bi t s t hat
6 woul d act ual l y be i nt r oduced i nt o evi dence, t hat copy i s t he
7 compl ete copy. And we have al so pr oduced f ul l set s of al l t he
8 document s t hat t he gover nment i ntends t o i nt r oduce.
9 THE COURT: Thi s i s t hi s document t hat you' ve j ust
10 handed me, whi ch you sai d i s not compl et e.
11 MR. KWOK: No, t hat i s - -
12 THE WI TNESS: That i s compl ete, si r .
13 MR. KWOK: That i s a compl et e copy.
14 THE COURT: Thi s i s compl et e.
15 MR. KWOK: Exact l y.
16 THE COURT: What you handed t he j ury i s onl y sel ect ed
17 par t s of t hat ?
18 MR. KWOK: Onl y par t s t hat we i ntend t o put on t he
19 screen and publ i sh t o t hem whi l e t hey can f ol l ow al ong, t hat ' s
20 cor r ect .
21 THE COURT: So, but gover nment Exhi bi t 1 wi l l be t hi s
22 f ol der .
23 MR. KWOK: That ' s cor r ect , your Honor .
24 THE COURT: Thi s part wi l l onl y cont ai n t hose port i ons
25 of t he f ol der , of t he f ol der you bel i eve ar e r el evant t o t hei r
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1 consi der at i on.
2 MR. KWOK: That ' s cor r ect .
3 MR. RUBI NSTEI N: J udge, I obj ect t o t hat . And I t hi nk
4 t hey coul d j ust as easi l y - - t hey want t o publ i sh cer t ai n pages
5 t o t he j ury, I thi nk t hat ' s f i ne. But I t hi nk i t i s mi sl eadi ng
6 t o have i n a bi nder two pi eces of - - t wo pages of somethi ng
7 t hat i s - - has si gni f i cant l y mor e pages. And I , t hat - - so I
8 don' t have a pr obl em i f t hey gi ve t hat document t o t he j ur y and
9 say we' r e r ef er r i ng t o page so and so. But t hey' r e goi ng t o
10 of f er one i n evi dence, I assume, not , not t he ext r act ed ver si on
11 t hat t hey have i n t hei r bi nder s.
12 THE COURT: Wel l , ext r acted i s no di f f er ent i n pages,
13 as I under st and i t . I t ' s - - t hey' ve mer el y got those sect i ons
14 t hat they f eel are r el evant to - - f or t he j ur y' s consi der at i on
15 t o demonst r ate t hat t here' s cer t ai n, I suppose, agr eement s t hat
16 were made bet ween t he grant or and t he grant ee. But , so I ' m
17 i ncl i ned t o l et them i n evi dence, but wi t h i nst r uct i on t o t he
18 j ur y t hat Exhi bi t 1, what t hey have i s mer el y excer pt s, what
19 t hey have i n t hei r books i s merel y an excerpt of government
20 exhi bi t one, i f we' r e deal i ng wi t h gover nment Exhi bi t 1. I
21 pr esume t here' s a gover nment Exhi bi t 2, and t hat i s - -
22 THE WI TNESS: Woul d you l i ke - -
23 THE COURT: Gover nment Exhi bi t 2 doesn' t seem t o have
24 t he f ol der . What i s i t ?
25 THE WI TNESS: I t i s t he general t erms and condi t i ons
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1 t hat , t hat t he pr ogr am used f or al l awar dees.
2 THE COURT: And who r ecei ves a copy of t hi s?
3 THE WI TNESS: I t ' s al ways avai l abl e and i t ' s wi t h t he
4 awar d document when i t ' s gi ven t o t he company.
5 THE COURT: What ' s t he government Exhi bi t 3?
6 THE WI TNESS: I t ' s t he f i nanci al assi st ance st andar ds
7 t er ms and condi t i ons. Her e, agai n, i t ' s al ways avai l abl e.
8 I t ' s on t he websi t e, but i t ' s a par t of each awar d t hat i s
9 gi ven t o each r eci pi ent .
10 THE COURT: I t ' s del i ver ed t o each gr ant ee?
11 THE WI TNESS: Yes, si r . Yes, si r . I t ' s par t of t he
12 awar d document .
13 THE COURT: What ' s government exhi bi t 4?
14 THE WI TNESS: Those are power poi nt present at i ons t hat
15 we provi de at what we cal l a ki ck of f meet i ng. We meet wi t h
16 each awar dee r i ght af t er the pr oj ect star t s. And exhi bi t 4 ar e
17 t he sl i des t hat we used whi ch go over once agai n r ul es,
18 r egul at i ons, r epor t i ng r equi r ement s, et cet er a.
19 THE COURT: That are present ed at t hat meet i ng?
20 THE WI TNESS: Yes, si r .
21 THE COURT: Seems t o me, as l ong as t her e' s an
22 adequat e and a cl ear st at ement made as r egards each of t hese
23 matt er s t hat t hey - - each of t he mat t er s i nt r oduced i n evi dence
24 and t hei r r el at i onshi p t o t he marked document and t hei r
25 exhi bi t , t hat i t ' s admi ssi bl e.
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1 MR. RUBI NSTEI N: Your Honor , I have no obj ect i on t o
2 t he exhi bi t . I have an obj ect i on t o what t he gover nment i s
3 gi vi ng t o t he j ur y. Because I submi t that i t ' s mi sl eadi ng t o
4 t he j ur y because a pi ct ur e' s wort h a t housand words. I f
5 t hey' r e goi ng t o t ake and t hey t ake t hese bi nder s i nt o t he j ur y
6 r oom, when t hey go t o del i ber ate t hey' r e goi ng t o see t wo
7 pages, and I submi t that t hat ' s not t he evi dence. The evi dence
8 i s t he ent i re - -
9 THE COURT: Al l r i ght .
10 MR. RUBI NSTEI N: - - t he ent i r e exhi bi t .
11 THE COURT: That may be a good poi nt i n t er ms of what
12 goes i nt o t he j ur y r oom wi t h t hem. But why aren' t t hey al l owed
13 t o - - why i sn' t i t f ai r f or them t o l ook at i t , excerpt s t hat
14 t he gover nment f eel s ar e r equi r ed f r om each of t he exhi bi t s?
15 Act ual l y t he ot her s ar e not excer pt s. The ot her s ar e - - t he
16 ot her mat er i al s ar e not excer pt s. I t ' s onl y t hi s f i r st
17 exhi bi t , exhi bi t one.
18 MR. RUBI NSTEI N: J udge, i t ' s mi sl eadi ng. Somebody
19 l ooki ng at t hi s t hi ng woul d t hi nk t hat some - - someone pi cki ng
20 up t hi s exhi bi t , we t ur n t o t hi s page, wi t h t hi s i nf or mat i on i s
21 post ed and wher e - - i f a r easonabl e per son - - as a mat t er of
22 f act, i t st ar t s at page si x.
23 THE COURT: I have i t .
24 MR. RUBI NSTEI N: I mean t hat ' s t he f i r st page i s page
25 si x.
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1 THE COURT: Wel l , I got - - t hat ' s not what I have. I
2 have t he f orward comes f i r st .
3 MR. RUBI NSTEI N: No, on Exhi bi t 1, your Honor .
4 MR. KWOK: I t hi nk your Honor has t he f ul l set of t he
5 bi nder s. Wi t h what t he j ur y - -
6 THE COURT: I don' t have t he bi nder s. Ar e t he bi nders
7 di f f er ent t han my - - t he bi nder s ar e di f f er ent t han what I
8 have? Al l r i ght .
9 ( Handi ng t o t he cour t )
10 THE COURT: I guess you bet t er get - - I guess I di dn' t
11 get one of t hose. My gover nment exhi bi t s, I see wher e you' r e
12 sayi ng, Mr . Rubi nst ei n.
13 Wel l , what about t hat , Mr . Kwok? Thi s doesn' t seem - -
14 MR. KWOK: No, your Honor .
15 THE COURT: How woul d you - -
16 MR. KWOK: The r eason we di d i t t hat way i s because of
17 t he bul ki ness of some of the document s.
18 THE COURT: That i sn' t t he i ssue, t hough. The i ssue
19 i s whether t her e can be j ur y conf usi on.
20 MR. KWOK: No, because I bel i eve when t he j ury r et urns
21 t o t he j ur y r oom, what i s i nt r oduced i nt o evi dence wi l l be, i f
22 t hey r equest i t or i f t he Cour t agr ees, wi l l be t he document s
23 t hat t hey br i ng back t o t he j ur y r oom.
24 We have no pr obl em wi t h keepi ng t he bi nder s j ust here
25 i n cour t so t hey can f ol l ow al ong whi l e t he par al egal shows t he
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1 pages on t he scr een and t hey can l ook down, wi t hout havi ng t o
2 f l i p t hr ough 100 pages of t hi s book, 99 of whi ch we do not
3 i nt end t o show.
4 Si mi l ar l y, f or t he bank r ecor ds we di d i t f or , t o
5 conser ve - - t o, f r ankl y, make i t readabl e, i nst ead of f l i ppi ng
6 t hrough 3, 000 pages of bank r ecords.
7 THE COURT: Wel l - -
8 MR. KWOK: They can - -
9 THE COURT: Then my i nst r uct i on t o t he j ur y, as I
10 unders t and i t , t he r eason f or t he Gover nment ' s pr oceedi ng i n
11 t hi s way, Mr . Rubi nst ei n, i s t hat because t he scr een i s t he
12 other si de of t he cour t r oom, and somet i mes i t ' s hard t o r ead
13 f r om t he pr oj ect or t o t he screen, t hat t hey' r e pr ovi di ng t he - -
14 want s t o pr ovi de t he j ur y wi t h t hose pages t hat wi l l be
15 pr oj ect ed on t he scr een. And i f t hat ' s t he case, t hen i f I
16 i nst r uct t hem t hat t hey ar e onl y t o l ook at t hose exhi bi t s when
17 t hey' r e pr oj ect ed on t he scr een; i n other words, l ook at t he
18 page of t he exhi bi t t hat i s i n t hei r books, whi ch i s bei ng
19 pr oj ect ed on t he scr een, and t hat ' s al l t hey' r e t o l ook at ,
20 t hat seems t o me t o be f ai r .
21 MR. RUBI NSTEI N: I suggest , your Honor , i f t hat ' s - -
22 THE COURT: They woul d not go i nto t he j ury r oom and
23 need onl y be used because of t he di st ance bet ween t he si ze of
24 t hi s cour t r oom and t he quest i on about eyesi ght of peopl e bei ng
25 abl e t o see i t , wher eas t hey can r ead r i ght al ong and check i t ,
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1 check t he wor ds i f t hey are havi ng di f f i cul t y r eadi ng what ' s up
2 on t he scr een.
3 MR. RUBI NSTEI N: Wel l , why do t hey need t he scr een?
4 Why do t hey need t he scr een i f t hey' r e gi vi ng, i f t hey - -
5 THE COURT: Wel l , some j uror s woul d see i t on t he
6 scr een and some j urors woul dn' t .
7 MR. RUBI NSTEI N: J udge, I t hi nk i t j ust as easy i f
8 t hey gi ve t hem t he whol e document , as t hey apparent l y gave your
9 Honor and t hey sai d t ur n t o page si x, and t hey publ i sh page si x
10 on t he scr een. I mean, I don' t see why - - peopl e who are used
11 t o handl i ng document s, t hey see i t i n t hei r mi nd a t wo page
12 i t em, and i t ' s a t en page or 20 page i t em, t her e i s a huge
13 di f f er ence. Al l r i ght . And I thi nk t he j ur y has - - t hat i t ' s
14 mi sl eadi ng t o t he j ur y t o pr esent i t i n t hi s f ashi on. They
15 have t he bi nder marked as gover nment exhi bi t s. They' r e not
16 government exhi bi t s. They' r e ext r act s of gover nment exhi bi t s,
17 and t hey - -
18 THE COURT: Wel l , maybe t hey shoul d be mar ked
19 ext r act s.
20 MR. KWOK: We' r e happy t o do t hat i nst ead of sayi ng
21 exhi bi t s, we can put t hat wor d ext r act on t op of ever y si ngl e
22 page. But t he r eason why we have t he scr een i s so t hat t hey
23 can see whi ch page we' r e t al ki ng about , and l ook at t he
24 appr opr i at e page i n t hei r bi nder s.
25 THE COURT: Be sure t hey have t he r i ght page.
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1 MR. KWOK: Exact l y. And t hat ' s exact l y r i ght , your
2 Honor .
3 And wi t h r espect t o Mr . Rubi nst ei n, i t ' s t he
4 government ' s case and wi t hi n r eason I t hi nk we are al l owed t o
5 t r y t he case t he way we t hi nk t hat i t woul d be most make sense
6 t o t he j ur y.
7 THE COURT: Al l I ' m t r yi ng t o do i s be sur e t hat what
8 you do i s f ai r and t hat i t ' s not - - I don' t gi ve a wr ong
9 i nst r uct i on t o t he j ur y, whi ch I al r eady have because I t hought
10 t hey wer e t he exhi bi t s, and I ' l l cl ar i f y t hat i n t he mor ni ng.
11 I ' l l make i t cl ear t hat t hey' r e ext r act s, and you bet t er have
12 some mar k t hat i t ' s an ext r act . And I ' l l make t he cl ear t hat
13 t hey' r e ent i t l ed t o f ul l exhi bi t s i n t hei r del i berat i ons, and
14 t he j ur y bi nder s won' t go back wi t h t hem. I t hi nk t hat seems
15 t o me t o be f ai r .
16 I don' t see how t hat hur t s you, Mr . Rubi nst ei n. We' l l
17 have t o make t hose changes.
18 Al l r i ght , i s t her e anyt hi ng el se t o t ake up?
19 MR. RUBI NSTEI N: No, your Honor .
20 THE COURT: At l east we cl ear ed up one t hi ng, we don' t
21 have t o do i t t omor r ow. I t pays t o go t i l l 4: 00 o' cl ock.
22 Okay.
23 MR. RUBI NSTEI N: You went past 4: 00, J udge.
24 THE COURT: What ?
25 MR. RUBI NSTEI N: We' r e on overt i me.
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1 THE COURT: Wel l , I know, but t he j ur y - - i t al ways
2 pays t o get t hese t hi ngs cl ear ed up. At l east we cl eared i t up
3 and woul dn' t have a del ay i n t he pr oceedi ngs t omor r ow.
4 Al l r i ght , I have t o go t o ot her busi ness, unl ess you
5 al l need me f or somet hi ng.
6 MR. KWOK: Thank you, your Honor . Not hi ng f ur t her
7 f r om t he government .
8 MR. EVERDELL: Thank you.
9 ( Adj our ned t o J une 3, 2008 at 9: 30 a. m. )
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1 I NDEX OF EXAMI NATI ON
2 Exami nat i on of : Page
3 BETTI J OYCE LI DE
4 Di rect By Mr . Kwok . . . . . . . . . . . . . 55
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15 MI CHAEL J . GARCI A
15 Uni t ed St ates At t orney f or t he
16 Sout hern Di st r i ct of New Yor k
16 BY: STEVEN KWOK
17 CHRI STI AN EVERDELL
17 Assi st ant Uni t ed St ates At t or neys
18
18 RUBI NSTEI N & COROZZO, LLP
19 At t orneys f or Def endant
19 BY: RONALD RUBI NSTEI N
20
20 Al so Present : Rachel Ondr i k, U. S. Dept . of Commerce
21 Ki r k Yamat ani , U. S. Dept . of Commerce
22
23
24
25
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1 ( Tr i al r esumed; j ur y not pr esent )
2 THE COURT: Al l r i ght . Thank you f or bei ng on t i me
3 t hi s mor ni ng. Let ' s make a pr act i ce of get t i ng her e at l east
4 at 9: 15 so t hat we don' t hol d t he j ur y up i f t hey' r e her e at
5 9: 30. I s t her e anythi ng t o t ake up t hi s mor ni ng?
6 MR. KWOK: Yes, your Honor . There are j ust t hr ee
7 i ssues about whi ch I want t o br i ef l y addr ess t he cour t . Fi r st ,
8 I submi t t ed a l et t er l ast ni ght . I don' t t hi nk we necessar i l y
9 need t o t ake t hat up now.
10 THE COURT: We haven' t got i t . I haven' t got i t .
11 MR. KWOK: I have an ext r a copy, act ual l y my onl y
12 copy. Do you want me t o hand i t up?
13 THE COURT: Wel l , I bet t er r ead i t .
14 I have r ead t he gover nment ' s l et t er . I s t her e any
15 comment ?
16 MR. RUBI NSTEI N: Yes, J udge. They are t r yi ng t o
17 backdoor the f act t hat t hey don' t have r ecords. They br ought a
18 case based upon r ecor ds and i nappr opr i at e spendi ng, and t hey
19 can' t back i t up wi t h any evi dence t hat i s admi ssi bl e i n cour t ,
20 so now t hey want t o get i n ot her t est i mony t o suggest what
21 r ecor ds t hey ar e t al ki ng about . They don' t speci f y a
22 par t i cul ar document , and t hey don' t have any document s, f r om
23 what I under st and, f r om t hi s submi ssi on t o suppor t i t , so I
24 t hi nk t hat i t ' s i nappr opr i at e.
25 THE COURT: Wel l , I don' t know what t he si t uat i on i s
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1 wi t h r espect t o t he document s. Thi s l et t er r eal l y onl y deal s
2 wi t h t he st atement s and act i ons of the def endant .
3 MR. RUBI NSTEI N: Wel l , hi s st at ement s are admi ss i ons
4 t hat he made i f t hey' r e r el evant . Thei r al l eged obser vat i ons
5 of hi m, t hat ' s what they' r e l ooki ng t o - -
6 THE COURT: Act i ons are admi ss i bl e.
7 MR. RUBI NSTEI N: Yes, as l ong as t hey don' t t al k about
8 t he document . I mean t her e i s no document t hat I know of t hat
9 t hey' r e r ef er r i ng t o, so we don' t r eal l y know. Act ual l y I
10 t hi nk i t shoul d be kept out on t he pr obat i ve val ue on 403, your
11 Honor , because i t i s so conf usi ng t o t he j ur y. Unf or t unat el y
12 i t won' t be conf usi ng t o t he j ur y, i t wi l l be mi sl eadi ng t o t he
13 j ur y f or t hese wi t nesses t o t al k about unknown document s t hat
14 we don' t know i f t her e were proper changes t hat he was maki ng,
15 i mpr oper changes. Thi s i s al l specul at i on on t hei r par t . Can
16 t hey i dent i f y what speci f i c document t hey ar e t al ki ng about ?
17 THE COURT: Wel l , aren' t t hey goi ng t o have ent r i es
18 t hat t hey are t al ki ng about ?
19 MR. RUBI NSTEI N: That ' s t he pr obl em, I don' t bel i eve
20 t hey do. I f t hey do, l et t he gover nment t el l you.
21 THE COURT: I t may not be a document , but i t may be
22 ent r i es.
23 MR. RUBI NSTEI N: That ' s f i ne. That ' s f i ne. Let t hem
24 addr ess and l et us know what ent r i es t hey are t al ki ng about .
25 THE COURT: Wel l , I don' t t hi nk t hey have t o t el l you
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1 what ent r i es i n advance t hat t hey are t al ki ng about , but t he
2 t est i mony wi l l have t o r el ate t o ent r i es and showi ng
3 expendi t ur es of some sor t i n order t o pr ove t hat t hey were
4 i mproper expendi t ures. There has t o be a document somepl ace, I
5 don' t mean t hat i t i sn' t on comput er as opposed t o a l edger,
6 but i f t hat ' s t he way t he def ense kept i t s books.
7 Mr . Kwok? Ar e you not goi ng t o of f er any evi dence
8 f r om comput er r ecor ds or - -
9 MR. KWOK: Act ual l y, t o gi ve your Honor backgr ound t o
10 why t hi s i ssue even arose, we do have a snapshot of t hi s Qui ck
11 Books l edger t hat we have been t al ki ng about , but i t ' s j ust
12 t hat , a snapshot .
13 THE COURT: What do you mean by a snapshot ?
14 MR. KWOK: I t i s what t he l edger l ooks l i ke at a
15 par t i cul ar poi nt i n t i me, j ust l i ke i f you wer e wor ki ng on a
16 document , you save i t , you pr i nt i t out , t hat ' s what we have,
17 what we bel i eve t o be t he f i nal or cl ose t o f i nal ver si on t hat
18 one of t he audi t ors l ooked at .
19 THE COURT: But don' t you have anyt hi ng t o prove
20 expendi t ur es?
21 MR. KWOK: On t hat l edger i t shows a number of
22 expenses t hat were pai d f or usi ng grant money t hat shoul d not
23 have. But what we are r eal l y t al ki ng about - -
24 THE COURT: Ar en' t you goi ng t o go beyond t hat at some
25 poi nt i n t he t r i al and show t hat X, Y and Z suppl i er r ecei ved
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1 payment of t hat ?
2 MR. KWOK: Yes, your Honor . And t he pr i mar y way we
3 ar e goi ng t o pr ove t hat i s not act ual l y t hr ough t he l edger s, as
4 I ' ve t ol d Mr . Rubi nst ei n numer ous t i mes. The way we are t r yi ng
5 t o pr ove t hat i s t hr ough t he bank r ecords, t hr ough i ndependent
6 r ecor ds t hat we got f r om t hi r d par t i es. So t her e can be no
7 di sput e t hat ther e i s some conf usi on about t he books and i t ' s
8 uncl ear what ' s goi ng on, we are l ooki ng out si de t he company, t o
9 l ook at vendor s, t o l ook at cr edi t car d st at ement s, t o l ook at
10 bank r ecor ds. That ' s how we' r e goi ng t o est abl i sh t hat f unds
11 were mi sappl i ed.
12 Now, I have been t r yi ng t o work wi t h Mr . Rubi nst ei n t o
13 get what he consi der s t he accur at e set of l edgers. We haven' t
14 been abl e t o come t o any agreement , because he consi der s my
15 l edger t hat I provi ded t o hi m t o be i ncompl et e or i naccur ate or
16 coul d possi bl y be t ampered wi t h.
17 So, now t hat we are unl i kel y t o come t o an agr eement
18 on what t hat l edger i s goi ng t o l ook l i ke, I submi t t ed t he
19 l et t er t o t hi s cour t because I bel i eve t hat our wi t nesses can
20 t est i f y j ust l i ke any per ci pi ent wi t ness can as t o what t hey
21 observed. Si mpl y because t he t opi c of t hei r t est i mony r el at es
22 t o a document doesn' t make t hei r t est i mony hear say.
23 THE COURT: That ' s r i ght .
24 Mr . Rubi nst ei n?
25 MR. RUBI NSTEI N: Your Honor , I t hi nk you have t o l ay a
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1 f oundat i on. Let ' s assume t hat what t he wi t ness i s r ef er r i ng t o
2 i s an expense f or l unch at a r est aur ant and t hi s i s what t he
3 wi t ness put i n or suggest s i s a non- NI ST expense. Ri ght ? I f
4 t hey i dent i f y t hi s expense, t hen I i nt end on cross- exami nat i on
5 t o show t hem t he backup t o show t hat i t was a NI ST expense.
6 THE COURT: That i t was a?
7 MR. RUBI NSTEI N: That i t was an appropr i at e expense.
8 J ust because t hey say i t wasn' t appr opr i at e, l et ' s see t he
9 expense. And t hen you wi l l know whet her he i s changi ng
10 somethi ng because he i s t r yi ng t o cook t he books.
11 THE COURT: Wel l , whi ch way i s t he government t o
12 pr oceed? I s i t goi ng t o st ar t wi t h t he snapshot s of t he
13 l edger , or i s i t goi ng t o st ar t wi t h t he expendi t ur es t hat wer e
14 made and t hen el i ci t t he t est i mony about t he l edger ?
15 MR. KWOK: I t hi nk i t ' s t he l at t er . We ar e goi ng t o
16 i nt r oduce t he government audi t or very soon who i s goi ng t o t al k
17 about t he bank r ecor ds, basi cal l y t he r ecor ds I r ef er r ed t o
18 out si de of t he company, t o show t hat f unds were mi sappl i ed.
19 Then we are goi ng t o have anot her set of wi t nesses who
20 worked wi t h t he def endant i n hi s company, who are goi ng t o t el l
21 us t hat when t hey worked wi t h hi m t hey woul d make cer t ai n
22 bookkeepi ng ent r i es onl y t o have t hem changed back t i me and
23 agai n i nto a gr ant expense when t hey have t ol d hi m r epeat edl y
24 t o st op doi ng t hat . We ar e not goi ng t o el i ci t any - -
25 THE COURT: But aren' t you goi ng t o el i ci t t he
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1 r el at e t o expendi t ur es - -
2 MR. KWOK: They wi l l .
3 THE COURT: - - whi ch were act ual l y made.
4 MR. KWOK: They wi l l . By t hat poi nt i n t i me when t hey
5 wi l l t est i f y, a r ecor d wi l l al r eady I bel i eve have been made by
6 t he government audi t or that t hose wer e t he t ypes of t hi ngs t hat
7 gr ant f unds wer e mi sspent on, such as ut i l i t i es, meal s and so
8 f or t h, and t hey ar e goi ng t o r el at e back t o t hose t opi cs wi t h
9 quest i ons and answers.
10 THE COURT: You say t he t ypes of t hi ngs. Don' t t hey
11 have t o be t he exact t hi ngs?
12 MR. KWOK: I don' t bel i eve t hey do, because t he way we
13 est abl i sh t hat t hose exact thi ngs wer e mi sspent usi ng gr ant
14 money i s t hrough our government audi t or .
15 The ot her wi t nesses are goi ng t o show not so much t hat
16 t hose moni es were i n f act spent - - because we wi l l have al r eady
17 est abl i shed t hat - - but t o show t he def endant ' s cr i mi nal i nt ent
18 i n maki ng t hose t ypes of expenses, t hat he knew t hat he wasn' t
19 supposed t o spend money t hat way, and because he t r i ed t o hi de
20 i t , that ' s how we' r e t r yi ng t o est abl i sh cri mi nal i nt ent . We
21 don' t have t o est abl i sh l i ne by l i ne.
22 THE COURT: I know how you' r e t r yi ng t o est abl i sh
23 cr i mi nal i nt ent , but what I ' m concer ned about i s whet her i t ' s
24 possi bl e under t he r ul es of evi dence t o pr esent t o t he j ur y i n
25 a manner i n whi ch t hey can under st and t he si gni f i cance of t he
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1 t est i mony of t hese i nsi de empl oyees at the t i me t hat thi s was
2 pr esent ed t o t hem. I t ' s j ust a mat t er of sequence.
3 MR. KWOK: I under st and t hat , and i t wi l l be t he
4 gover nment ' s burden at summat i on t o t i e al l t he l oose ends
5 t ogether .
6 THE COURT: Wel l , I under st and t he summat i on, but
7 t her e i s some benef i t somet i mes t o havi ng t he j ur y not be
8 compl etel y surpr i sed i n summat i on as t o t he way everyt hi ng f i t s
9 t ogether .
10 MR. KWOK: I under st and, and I appr eci at e your Honor ' s
11 poi nt , but we wi l l do our best . I t hi nk when t he t est i mony
12 comes out , i t wi l l be cl ear why we ar e el i ci t i ng t hat t ype of
13 t est i mony.
14 THE COURT: Wel l , I ' m not goi ng t o i nt er f er e wi t h your
15 manner of pr esent at i on. That ' s your manner of pr esent at i on.
16 But I am goi ng t o make r ul i ngs on evi dence as t he quest i ons are
17 asked, and whet her t her e i s a f oundat i on. Foundat i on, I have
18 f ound t hat f or some r eason at t or neys i n t he U. S. at t or ney' s
19 of f i ce don' t al ways r ecogni ze t he si gni f i cance of , and I of t en
20 have t o sust ai n f or l ack of proper f oundat i on, and t hen you
21 have a pr obl em. I t ' s an obj ect i on t hat appar ent l y has f al l en
22 out of f avor i n some cour t r ooms, but i t ' s one whi ch i s
23 per f ect l y val i d.
24 MR. KWOK: Cer t ai nl y, your Honor .
25 THE COURT: And t hat ' s what Mr . Rubi nst ei n i s
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1 basi cal l y sayi ng, t hat t he way you ar e appr oachi ng i t , you need
2 t o est abl i sh t he pr oper f oundat i on wi t h t est i mony.
3 MR. KWOK: We wi l l cer t ai nl y t r y t o est abl i sh t he
4 proper f oundat i on, but I want t o make t he argument t hat t o t he
5 ext ent - -
6 THE COURT: Foundat i on shows r el evance, and t hat ' s why
7 I have proceeded t he ot her way mysel f . But you do what ever you
8 want . I want t hi s case t o go f orward pr ompt l y and ef f i ci ent l y,
9 and you deal wi t h t he expendi t ur es f i r st and t hen you have a
10 f oundat i on f or t hose quest i ons. When you don' t , I don' t know
11 how you' r e goi ng t o est abl i sh t he f oundat i on. You may be abl e
12 t o.
13 MR. KWOK: Thank you, your Honor .
14 I f I may j ust r ai se one qui ck ot her poi nt . Wi t h
15 r espect t o t he f i r st wi t ness, bef or e we paused yest er day I
16 bel i eve def ense counsel obj ect ed on hearsay gr ounds. I j ust
17 want t o make cl ear t he scope of your Honor ' s r ul i ng.
18 I mi ght have negl ect ed t o ask a wi t ness cer t ai n
19 f oundat i onal quest i ons about whether she was personal l y
20 f ami l i ar wi t h t he r ul es and r egul at i ons of t he pr ogr am. I f I
21 have asked t hat , I don' t bel i eve I ' m bound by si mpl y
22 i nt r oduci ng document s and have her r ead f r om t hose document s,
23 i f she i s goi ng t o expl ai n t he r ul es of t he pr ogr am t hat she
24 per sonal l y knows about .
25 THE COURT: Wel l , t he bet t er t hi ng t o do i s t o l ay t he
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1 f oundat i on by havi ng t he r ul es of t he pr ogr am of f er ed i n
2 evi dence, and t hen she can t est i f y about them.
3 MR. KWOK: Very wel l , your Honor .
4 MR. RUBI NSTEI N: Your Honor , we l ef t actual l y wi t h t he
5 i ssue of what t he bi nders cont ai n, and t hat your Honor was
6 goi ng t o gi ve an i nst r uct i on t o t he j ur y.
7 THE COURT: I ' m goi ng t o gi ve t hem t he i nst r uct i on.
8 MR. RUBI NSTEI N: Coul d I st ep out f or a personal
9 mat t er , your Honor?
10 THE COURT: Sure. Maybe we al l ought t o. The j ury - -
11 apparent l y t her e i s a hol d- up on one of t he subway l i nes. Si x
12 j ur ors wer e not here at 9: 30.
13 ( Recess)
14 THE COURT: Counsel , J uror 8 i s mi ss i ng, Mr . Naveen.
15 I t hi nk we have t o go ahead wi t hout hi m i f he i sn' t her e by 10
16 o' cl ock. I have about t wo mi nut es t o t en. Or Naveen J ohn I
17 guess hi s name i s.
18 DEPUTY COURT CLERK: He' s her e.
19 THE COURT: OK.
20 ( Cont i nued on next page)
21
22
23
24
25
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1 ( J ur y pr esent )
2 THE COURT: Pl ease be seat ed. Good morni ng, l adi es
3 and gent l emen. I ' m sorr y. I under st and t he subway, one of t he
4 subway l i nes had a pr obl em t hi s mor ni ng. I f i t woul d do any
5 good, I woul d speak t o t he mayor about i t , but I r ecogni ze i t
6 wasn' t your f aul t , but l et ' s pl ease be on t i me. I get t he
7 l awyers her e 15 mi nut es ear l y so we can t ake up any mat t ers
8 t hat need t o be t aken up bef ore you get i nt o t he j ur y box.
9 Yest er day, I gave you some i nst r uct i on, and I wi l l
10 have t o r evi se t hose i nst r uct i ons because I di d not f ul l y
11 comprehend how t he government was goi ng t o proceed here.
12 The books you have i n f r ont of you cont ai n excerpts of
13 t he exhi bi t s t hat t hey i nt end t o of f er at t he t i me of t r i al ,
14 and t he excer pt s are what t hey are goi ng t o show on t he board
15 up her e. However , f or your conveni ence, because some peopl e
16 may have di f f i cul t y i n r eadi ng what ' s up on t he scr een, t her e
17 i s an ext r a copy i n t he books. So, i f you don' t have any
18 di f f i cul t y r eadi ng what ' s up on t he board, you don' t have t o
19 use t he books. I f on t he ot her hand you f i nd i t di f f i cul t
20 r eadi ng what ' s up on t he boar d because of t he di st ance, t hen
21 you have f r eedom t o l ook at t he books and wi t h r espect t o t hat
22 par t i cul ar exhi bi t . So, don' t l ook at ot her exhi bi t s or
23 excer pt s of exhi bi t s unl ess t hey have been admi t t ed i nt o
24 evi dence al r eady.
25 Al l r i ght . Wi t h t hat i nst r ucti on, I t hi nk we' r e r eady
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1 t erms and condi t i ons, Advanced Technol ogy Progr am.
2 THE COURT: Al l r i ght . That i s admi t t ed i n evi dence
3 wi t hout obj ect i on.
4 ( Gover nment ' s Exhi bi t 2 r ecei ved i n evi dence)
5 MR. RUBI NSTEI N: That ' s corr ect .
6 MR. KWOK: Government Exhi bi t 3 i s Depar t ment of
7 Commer ce, f i nanci al assi st ance, st andard t er ms and condi t i ons.
8 THE COURT: That ' s admi t t ed i n evi dence wi t hout
9 obj ect i on.
10 ( Gover nment ' s Exhi bi t 3 r ecei ved i n evi dence)
11 MR. KWOK: Gover nment Exhi bi t 4 i s a sl i de
12 pr esent at i on. The f i r st page i s gr ant s and agr eement s,
13 management di vi si on.
14 THE COURT: Of t he Advanced Technol ogy Pr ogr am.
15 MR. KWOK: That ' s cor r ect .
16 THE COURT: Exhi bi t 4 i s admi t t ed wi t hout obj ect i on.
17 ( Gover nment ' s Exhi bi t 4 r ecei ved i n evi dence)
18 THE COURT: Go r i ght ahead.
19 DI RECT EXAMI NATI ON ( Cont i nued)
20 BY MR. KWOK:
21 Q. Ms. Li de, are you per sonal l y f ami l i ar wi t h t he r ul es and
22 r egul at i ons of t he Advanced Technol ogy Progr am?
23 A. Yes, I am.
24 Q. How i s i t t hat you ar e f ami l i ar wi t h t he r ul es and
25 r egul at i ons of t hat pr ogr am?
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1 A. I hel ped devel op some of the r ul es and r egul at i ons, and I
2 have f ol l owed t hem i n al l of t he pr oj ect s t hat I manage.
3 Q. What ar e a gr ant ee' s obl i gat i on under t hat pr ogr am wi t h
4 r espect t o t hei r budget ?
5 A. Thei r obl i gat i on i s t hat t hey adher e t o t he budget and al l
6 of t he r ul es and r egul at i ons i n t hese document s.
7 Q. Ar e t here ci r cumst ances under whi ch t hey can devi at e f r om
8 t he budget ?
9 A. Yes, t her e are. For any gi ven budget year , f or t he amount
10 of money al l ocat ed t o t hat year, t hey can move up t o 10 per cent
11 f r om one cat egory t o anot her as l ong as t hose cat egor i es exi st
12 i n t he budget .
13 Q. What i f t hey want t o move money t hat exceeds t he 10 per cent
14 annual budget amount ?
15 A. They must ask f or per mi ssi on and get wr i t t en pr i or appr oval
16 bef ore t he new budget i s aut hor i zed.
17 Q. What i f t hey want t o add a new cat egory al t ogether?
18 A. They must ask f or per mi ssi on and get wr i t t en pr i or appr oval
19 bef ore t hey add t hat cat egory.
20 Q. Ms. Li de, ar e or al appr oval s ever gi ven?
21 A. No.
22 Q. Ar e t her e si t uat i ons wher e grant ees can spend t he money
23 f i r st and seek appr oval af t er t he f act ?
24 A. I t i s t he except i on t o t he r ul e. That happens
25 occasi onal l y, but when t hat happens, any of t he money spent
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1 bef or e t he wr i t t en appr oval i s gi ven i s at t he gr ant ee' s r i sk.
2 Q. Now, ar e t her e cer t ai n pr i nci pl es t hat di ct at e whet her ATP
3 wi l l pay f or cer t ai n expenses or not ?
4 A. Yes, t her e are, and t hose are al l i n t hese document s.
5 Q. What are some of t hose basi c r ul es?
6 A. Basi cal l y ATP wi l l not pay i ndi r ect cost s f or si ngl e
7 appl i cant s, such as r ent , f aci l i t y r enovat i ons, l egal f ees,
8 admi ni st r at i ve cost s f or secretari es and t hat sor t of t hi ng,
9 whi ch i s spread over t he whol e company' s act i vi t i es.
10 Q. And do you pay f or expenses i ncurr ed bef ore t he st ar t of
11 t he grant progr am?
12 A. No, we cal l t hem sunk cost s, and nothi ng i ncur r ed bef ore
13 t he act ual st ar t dat e of t he pr oj ect can be charged t o t he U. S.
14 gover nment .
15 Q. How do gr ant ees know about al l of t hese r ul es t hat you j ust
16 descr i bed t o us?
17 A. They know about t hese r ul es i n t hese document s t hat ar e
18 exhi bi t s 1 t hr ough 4 t hr ough conf er ences t hat we gi ve, t hr ough
19 t el ephone advi ce t hat we al ways have avai l abl e, and t hrough a
20 ki ck- of f meet i ng whi ch i s what i s pr esent ed i n Exhi bi t 4.
21 Q. What i s a ki ck- of f meet i ng?
22 A. A ki ck- of f meet i ng i s a meet i ng bet ween t he grant ee and t he
23 proj ect management t eam at NI ST wher e we go t hrough al l of t he
24 r ul es and r egul at i ons, ask i f t her e are any quest i ons, and make
25 sur e t hat t he gr ant ee under st ands t he r esponsi bi l i t i es of bei ng
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1 good st ewar ds of t he government ' s money.
2 Q. When does t hi s ki ck- of f meet i ng t ypi cal l y happen?
3 A. Shor t l y af t er t he st ar t of t he pr oj ect , as soon as
4 possi bl e, dependi ng on ci r cumst ances. And bef ore i t occur s, we
5 are al ways avai l abl e by t el ephone.
6 Q. How do you know t hat t hat ' s what happened at t hese
7 meet i ngs?
8 A. I was t here, I was par t of t he pr oj ect management t eam, and
9 I par t i ci pat ed i n t hese meet i ngs.
10 Q. Now, l et ' s t ake a l ook at t he exhi bi t s I have i nt r oduced
11 i nt o evi dence j ust a moment ago one at a t i me. Let ' s t ake a
12 l ook at Government Exhi bi t 1.
13 Your Honor , may we publ i sh t hat t o t he j ur y?
14 THE COURT: The excer pt s?
15 MR. KWOK: Yes, t o page 6.
16 THE COURT: Al l r i ght . Government Exhi bi t 1 can be
17 publ i shed t o t he j ur y on t he scr een, and i f you have di f f i cul t y
18 i n r eadi ng t hat - - and I can under st and why you woul d - - I
19 t hi nk you bet t er t ake out your books and l ook at t he excer pt s.
20 Can i t be bl own up anymore, counsel ? The par al egal
21 can' t bl ow t hat up more?
22 MR. KWOK: I t hi nk we need t he bot t om par t of t he
23 page. I ' m j ust di r ect i ng Ms. Moussa t o t he bot t om par t of t he
24 page.
25 THE COURT: The whol e t hi ng can' t be bl own up so t hey
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1 can r ead t he whol e t hi ng on t he boar d? You are usi ng l ess t han
2 hal f of t he screen. You' r e st i l l usi ng l ess t han one hal f of
3 t he scr een. You bet t er get someone t her e who knows how t o use
4 i t .
5 Can' t you do t he whol e t hi ng?
6 MR. EVERDELL: Your Honor, I t hi nk t hi s i s as bi g as
7 i t get s on t he screen. I t hi nk t hi s i s as bi g as i t get s on
8 t he scr een.
9 THE COURT: Why not show t he whol e page?
10 MR. EVERDELL: I t hi nk when you show t he whol e page,
11 i t shr i nks on t he page. We can' t show i t any bi gger t han t hat .
12 THE COURT: You can do mor e.
13 MR. EVERDELL: I don' t t hi nk so. That i s why we have
14 t he j ur y bi nder s as wel l .
15 THE COURT: You need t he j ur y bi nders. I have f ai r
16 eyesi ght , but t he j ur y - - can al l t he j ur y r ead t hat , or does
17 everyone have my probl em? I can' t r ead i t .
18 Al l r i ght . I see some shaki ng t hei r head sayi ng t hey
19 can' t read i t . Al l r i ght .
20 MR. EVERDELL: I bel i eve Mr . Kwok was aski ng f or a
21 speci f i c par t of t he document , whi ch can be bl own up.
22 THE COURT: Somet i mes we have smal l er boxes f or t he
23 j ury t o wat ch. Ar e we goi ng t o have much more of t hese
24 document s i n t hi s case?
25 MR. EVERDELL: Yes, your Honor , we wi l l .
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1 THE COURT: Why don' t we cal l t he peopl e downst ai r s,
2 J oel , and he can set up i ndi vi dual scr eens - - not i ndi vi dual ,
3 but one f or ever y t hr ee or f our j ur or s.
4 MR. EVERDELL: We can t r y t hat , your Honor , but we
5 al so have t he j ur y bi nder s t here so t hey can l ook at t he paper
6 copy i f t hey can' t see t he copy on t he scr een. The document s
7 are i n t he bi nder s.
8 THE COURT: But t he ot her di f f i cul t y i s t hat usual l y
9 when you show t hese t hi ngs on t he boar d you have a l aser or
10 somethi ng l i ke t hat to poi nt t o t he exact l anguage t hat you are
11 t ry i ng t o i sol at e. But , al l r i ght , al l r i ght . Proceed.
12 MR. KWOK: Thank you, your Honor .
13 BY MR. KWOK:
14 Q. Ms. Li de, di r ect i ng your at t ent i on t o page 6, par agr aph 5,
15 can you j ust descr i be t o us what t hat says?
16 A. Yes. That i s descr i bi ng some of t he cost s t hat ar e
17 unal l owabl e under t he Advanced Technol ogy Pr ogr am.
18 Q. What ar e some of t hose exampl es?
19 A. Some of t hemare t he const r uct i on of new bui l di ngs or
20 r enovat i ons of exi st i ng l abor at or i es, i ndi r ect cost s, as we
21 have al r eady di scussed, pr of i t management f ees, i nt er est ,
22 f aci l i t i es capi t al cost , i f money, and t hat goes on t o page 7
23 i f you want mor e exampl es.
24 Q. What ar e t hose?
25 A. Such as bi d and pr oposal cost s - - whi ch are exampl es of
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1 sunk cost s whi ch we di scussed - - t ui t i on, sur veys,
2 commer ci al i zat i on st udi es and t he l i ke.
3 Q. I am showi ng you t he next page. I t ' s marked as - -
4 THE COURT: Page 7?
5 THE WI TNESS: 7, sor r y.
6 MR. KWOK: Ms. Moussa, can we have t he next page up?
7 THE COURT: Page 7 i s up.
8 MR. KWOK: The next page i n t he j ury bi nder .
9 THE COURT: Page 7 i s t he next page, I bel i eve af t er
10 page 6.
11 MR. KWOK: I am r ef er r i ng t o t he next page i n t he j ur y
12 bi nder , your Honor . I t ' s t he i nst r uct i ons f or f or m NI ST 1262,
13 i t em K.
14 THE COURT: Sorr y. I ' m unabl e t o f ol l ow you.
15 Page 6, and t hen t here i s page 7. You use t he t erm
16 page 6, I pr esume you mean page 7 when you say t he next page.
17 Thi s does not seem t o have a number ed page.
18 MR. KWOK: I t does not have a number ed page, but i t i s
19 t he next page i n t he j ur y bi nder s.
20 MR. RUBI NSTEI N: The ext r act , your Honor .
21 THE COURT: Af t er 7?
22 MR. RUBI NSTEI N: I t ' s not t he next page i n Exhi bi t 1,
23 your Honor. I t ' s t he next page i n what has been gi ven t o t he
24 j ur y, t he ext r acts of Exhi bi t 1.
25 MR. KWOK: I f we coul d zoom i n t o i t em K.
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1 THE COURT: These are t he i nst r uct i ons f or f orm NI ST.
2 MR. KWOK: 1262.
3 THE COURT: I see. Al l r i ght .
4 Q. Mi ss Li de, can you t el l us what t hat says.
5 A. Yes. I t em K says t hat al l of t he i ndi r ect cost s must be
6 absor bed by t he proposer .
7 Q. And once agai n, what are i ndi r ect cost s?
8 A. I ndi r ect cost s ar e t hose t hat you cannot cl ear l y i dent i f y
9 wi t h onl y t hi s ATP pr oj ect but r at her ar e i ncur r ed by al l of
10 t he act i vi t i es of t hat company.
11 Q. And when do you t ypi cal l y hand out t hi s bookl et t hat we are
12 j ust l ooki ng at ?
13 A. Thi s bookl et i s avai l abl e t he mi nut e we announce a
14 compet i t i on. I t i s sent t o t housands of peopl e on our mai l i ng
15 l i st . We hol d conf er ences and we gi ve i t out t her e, and i t i s
16 el ect r oni cal l y avai l abl e on our websi t e.
17 Q. Let ' s go t o t he next Government Exhi bi t , Government Exhi bi t
18 2.
19 THE COURT: J ust so I unders t and, ever yt hi ng i n
20 Exhi bi t 1 i s sent t o a pr oposed gr ant ee, i s t hat cor r ect ?
21 THE WI TNESS: That i s cor r ect , si r , yes.
22 Q. Mi ss Li de, what i s Government Exhi bi t 2?
23 A. Thi s i s t he general t er ms and condi t i ons of t he Advanced
24 Technol ogy Pr ogram.
25 Q. And when i s t hi s document gi ven out ?
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1 A. Once agai n i t ' s avai l abl e on t he web. I t ' s avai l abl e by
2 anyone who r equest s i t . I t ' s di scussed at t he pr oposer' s
3 conf er ence, and i t i s part of t he award t hat i s made when t he
4 company r ecei ves an awar d.
5 Q. Di r ect i ng your at t ent i on t o page 3 of t hat document - -
6 THE COURT: When t he company get s t he awar d?
7 THE WI TNESS: When t he company get s t he awar d, when
8 t hey get t he document t hat says you are now a r eci pi ent , t hi s
9 goes al ong wi t h t hat .
10 THE COURT: Thank you.
11 Q. Zoomi ng i n on par agr aph 9, up t o t he end of A.
12 Di r ect i ng your at t ent i on t o t hat paragr aph - -
13 MR. RUBI NSTEI N: Excuse me. What page ar e you on?
14 MR. KWOK: Page 3 of Gover nment Exhi bi t 2.
15 MR. RUBI NSTEI N: Thank you.
16 Q. What does t hat paragraph say?
17 A. Thi s paragr aph i s r epeat i ng what we sai d earl i er , t hat we
18 need pr i or wr i t t en appr oval f or any change i n t he budget over
19 10 per cent of t he annual amount .
20 Q. And what does i t say your obl i gat i ons are i f you cr eat e new
21 budget cat egor i es i n t he budget?
22 A. One must al so get pr i or wr i t t en appr oval t o cr eat e a new
23 cat egory.
24 Q. Let ' s go t o sect i on 12 of t he same page t i t l ed equi pment .
25 I t al so goes on t o t he next page, on page 4 of Gover nment
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1 Exhi bi t 2. Can you j ust summar i ze f or us what t hat paragr aph
2 says?
3 MR. RUBI NSTEI N: J udge, I ' m goi ng t o obj ect t o t he
4 summar i zi ng. Thi s i s i n evi dence, and I submi t t hat
5 summar i zi ng i s not adequat e.
6 THE COURT: Wel l , coul d you r ead what t hat par agr aph
7 says, Ms. Li de.
8 THE WI TNESS: Cert ai nl y. "Upon expi r at i on of t he
9 pr oj ect per i od, t he r eci pi ent shal l submi t t o t he NI ST gr ant s
10 of f i cer an i nvent ory of equi pment acqui r ed wi t h f eder al f unds,
11 as prescr i bed i n 15 CFR 14. 34, al ong wi t h an equi pment
12 di spos i t i on cert i f i cat i on. "
13 Q. I t goes on t o t he next page.
14 A. Ri ght . "Consi st ent wi t h t he r equi r ement s of t he gover nment
15 per f ormance" - -
16 Q. Sorr y, t hat ' s not t he next page.
17 A. No. Cont i nui ng t hen, "The cer t i f i cat i on pr ovi des t he
18 r eci pi ent an oppor t uni t y t o r equest aut hor i zat i on t o cont i nue
19 t o ut i l i ze t he equi pment f or t he pur poses of t he
20 commer ci al i zat i on i ni t i at i ve. I f appr oved by t he NI ST gr ant s
21 of f i cer , t he r eci pi ent shal l r epor t t o NI ST ever y t wo year s t he
22 condi t i on of t he equi pment as l ong as t he cur r ent market val ue
23 i s more t han $5, 000. "
24 Q. What does t hat mean i n pl ai n Engl i sh?
25 A. I t basi cal l y means t hat the equi pment i s pr oper t y of t he
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1 U. S. gover nment , and i f appr oval i s gi ven i n wr i t i ng, t he
2 r eci pi ent can cont i nue t o use i t f or t he pur poses of t hat
3 pr oj ect as l ong as t hey cont i nue t o r epor t ever y t wo years t hat
4 i t ' s wor t h over $5, 000.
5 Q. What happens t o t he equi pment i f i t f al l s bel ow market
6 val ue of $5, 000?
7 A. I t bel ongs t o t he company.
8 Q. That means t hey can keep i t .
9 A. Ri ght .
10 Q. Let ' s t ur n t o t he next exhi bi t , Gover nment Exhi bi t 3.
11 THE COURT: Government Exhi bi t 3 i s?
12 MR. KWOK: Depart ment of Commer ce, f i nanci al
13 assi st ance st andard, t erms and condi t i ons.
14 Q. Ms. Li de, what i s t hat document ?
15 A. I t i s a Depar t ment of Commerce document wi t h r ul es and
16 r egul at i ons f or f i nanci al assi st ance, and agai n i t i s gi ven t o
17 ever y award t hat i s made.
18 Q. Di r ect i ng your at t ent i on t o page 2, par agr aph 4A and B, can
19 you expl ai n t o t he j ur y what t hat means?
20 MR. RUBI NSTEI N: I obj ect agai n, your Honor t o
21 expl ai ni ng somethi ng wher e i t hasn' t been addr essed f i r st .
22 MR. KWOK: Your Honor , i t ' s i n evi dence. The wi t ness
23 has t est i f i ed t hat she has per sonal knowl edge of t hese r ul es
24 and r egul at i ons, and she r egul ar l y conduct s t hese meet i ngs as
25 par t of her j ob and r esponsi bi l i t y.
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1 THE COURT: Wel l , gi ve t he j ur y a chance t o r ead t he
2 document f i r st . Then I wi l l al l ow her t o expl ai n what i t
3 means. But f i r st the j ur y i s i nst r uct ed t o r ead t he document .
4 MR. KWOK: Thank you, your Honor .
5 May I proceed, your Honor?
6 THE COURT: Al l r i ght .
7 Q. Now, Ms. Li de, now t el l us what t hat means.
8 A. Par t A i s t he i nst r uct i on on how t o suggest a change one
9 want s t o make, and t hat i s put i n wr i t i ng t o t he pr ogr am
10 of f i cer , t he change i n budget one want s. The pr ogr am of f i cer
11 r evi ews i t and sends a r ecommendat i on t o t he gr ant s of f i ce.
12 The second part , par t B, i s r epeat i ng t hat thi s must be done
13 f or any percent age over 10 percent .
14 Q. Now, asi de f r om handi ng out these document s t hat we j ust
15 l ooked at , what el se do you do t o make sure t hat grant
16 r eci pi ent s unders t and t he t er ms and condi t i ons of t he gr ant ?
17 A. Once agai n, we do go over t hem at any pr oposer ' s
18 conf erence, whi ch i s an open meet i ng f or anybody who want s t o
19 appl y, and we are ver y cl ear at that . But agai n once t he gr ant
20 i s made, t hese document s become par t of t he awar d package, and
21 we have t hi s ki ck- of f meet i ng I r ef er r ed t o, and we go over
22 t hese r ul es and r egul at i ons yet agai n.
23 Q. Let ' s now t ur n t o Gover nment Exhi bi t 4. What i s t hat
24 document ?
25 A. Thi s i s t he Power Poi nt pr esent at i on t hat was used f or the
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1 Regul at i ons ( CFR) part 14? I s t hat r el evant her e?
2 MR. KWOK: I t may be at some poi nt , your Honor , but
3 not r i ght now.
4 THE COURT: And t hen t he cost pr i nci pl es f ound i n t he
5 f eder al acqui si t i on r egul at i on par t 31, i s t hat - -
6 MR. KWOK: Agai n, i t ' s not r el evant di r ect l y at t hi s
7 poi nt . I wi l l ask t he wi t ness t o expl ai n t he l ast i t em, ATP
8 audi t gui del i nes.
9 Q. Ms. Li de, what i s t hat ?
10 A. Each pr oj ect must under go audi t s at speci f i c i nt er val s, and
11 f or a t hr ee- year si ngl e company t her e i s an audi t af t er year
12 one and an audi t af t er t he pr oj ect ends, and t hese are t he
13 gui del i nes f or t he audi t or t o f ol l ow t o make sur e t hat t he
14 pr oj ect has f ol l owed t he above f eder al r ul es and r egul at i ons.
15 THE COURT: Ar e t hose i ncl uded i n t hi s Exhi bi t 4, t he
16 audi t gui del i nes, or does someone get t hem at t he t i me of t he
17 awar d?
18 MR. KWOK: I t i s part of Gover nment Exhi bi t 4, t he
19 whol e set .
20 THE COURT: Par t of Government Exhi bi t 4.
21 MR. RUBI NSTEI N: What i s t hat ? I mi ssed t hat , your
22 Honor .
23 THE COURT: I asked about t he ATP audi t gui del i nes,
24 and I don' t want Mr . Kwok t o t est i f y, I want Ms. Li de t o
25 t est i f y. You are not a wi t ness, Mr . Kwok.
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1 MR. KWOK: I under st and.
2 THE WI TNESS: These audi t gui del i nes are avai l abl e on
3 t he websi t e. They' r e gi ven t o each pr oj ect , and we al so have
4 a - -
5 THE COURT: I under st and on t he websi t e, but f orget
6 t he websi t e f or a second. They go t o t hem.
7 Ar e t hey gi ven t o t hem at t he t i me of t he meet i ng?
8 THE WI TNESS: No. I ' m not sur e i f t hey ar e par t of
9 t he or i gi nal award package. I woul d have t o l ook t hat up.
10 THE COURT: Ar e t hey par t of t he ATP r eci pi ent
11 r egul at i ons package, r esponsi bi l i t i es?
12 THE WI TNESS: I woul d have t o l ook up t he cover page
13 of our awar d. I am not sur e of t hat , si r .
14 MR. KWOK: We wi l l come back t o t hat .
15 THE COURT: I want t o know whether i t ' s cl ear at t he
16 out set that t hey have t o adher e t o t he audi t gui del i nes.
17 MR. KWOK: Your Honor , I t hi nk we wi l l go i n sequence.
18 Ri ght now I j ust want t o est abl i sh t he t er ms and condi t i ons
19 t hat t hey have t o abi de by.
20 THE COURT: Wel l , t hat ' s one of t he t erms and
21 condi t i ons. I t says r i ght up above. That ' s why I ' m aski ng
22 about i t .
23 THE WI TNESS: Yes, si r , t hey are part of t he or i gi nal
24 awar d package.
25 Q. And where are you l ooki ng, Ms. Li de?
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1 A. I am l ooki ng at t he cover page of t he awar d t hat ' s gi ven t o
2 t he r eci pi ent .
3 Q. Let ' s go t o t he next page of t hi s sl i de show pr esent at i on.
4 What message are you t r yi ng t o convey by t hat sl i de?
5 A. The sl i de i s t r yi ng t o convey t he message t hat any change
6 of any si gni f i cance t o t he r esear ch pr oj ect must r ecei ve pr i or
7 wr i t t en appr oval bef or e i t can be i n ef f ect .
8 ( Cont i nued on next page)
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15
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1 Q. What ar e some of the basi c r ul es governi ng whet her f r i nge
2 benef i t s - -
3 A. Wel l - -
4 Q. - - can be pai d f or usi ng ATP gr ant money?
5 MR. RUBI NSTEI N: I obj ect , your Honor, unl ess t hey
6 coul d poi nt t o some r ul es.
7 THE COURT: That ' s what we' r e aski ng, I t hi nk t hat ' s
8 what he' s aski ng f or .
9 Q. Ms. Li de, coul d you - - ar e t her e r ul es and r egul at i ons i n
10 t he ATP program governi ng whet her gr ant money can be spent
11 usi ng on f r i nge benef i t s, yes or no?
12 A. Yes t her e are. A company - -
13 Q. What are t hose r ul es?
14 A. A company must - -
15 MR. RUBI NSTEI N: I obj ect t o hear say. I f t her e are
16 r ul es, what exhi bi t ar e t hey i n?
17 MR. KWOK: Your Honor , t he wi t ness has j ust t est i f i ed
18 t hat she has personal knowl edge about t hese r ul es and
19 r egul at i ons gover ni ng f r i nge benef i t s.
20 THE COURT: I sust ai n t he obj ect i on.
21 Wher e are t he r ul es and r egul at i ons, Ms. Li de?
22 THE WI TNESS: I n t he f eder al acqui si t i on and
23 assi st ance t erms and condi t i ons.
24 THE COURT: And t hey' r e exhi bi t what ?
25 THE WI TNESS: Thr ee.
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1 THE COURT: Thr ee?
2 THE WI TNESS: Yes, si r .
3 THE COURT: Okay.
4 Q. So can you now t el l us what t hose r ul es are?
5 MR. RUBI NSTEI N: J udge, I ' m goi ng t o obj ect . Can we
6 go t o Exhi bi t 3?
7 MR. KWOK: Exhi bi t 3 i s i n evi dence.
8 MR. RUBI NSTEI N: What page?
9 THE COURT: I t ' s not , i t ' s not i n t hi s excer pt s, i s
10 i t ? I s i t i n t he excer pt s, Mr . Kwok?
11 MR. KWOK: I do not bel i eve so.
12 THE COURT: You' l l have t o r ef er t o t he actual
13 exhi bi t , Ms. Li de.
14 THE WI TNESS: I ' m sor r y, I don' t t hi nk i t ' s i n t hi s
15 one. I t hi nk i t ' s i n t hat CFR number ed one. I t ' s not i n
16 Exhi bi t 3. I t ' s i n CFR - -
17 Q. Let ' s t ur n t o gover nment Exhi bi t 4.
18 THE COURT: Whi ch one?
19 MR. KWOK: Government Exhi bi t 4, page si x.
20 THE COURT: I s t hat i n t he ext r act s or i s i t not?
21 MR. KWOK: I t i s i n t he ext r act . I t ' s t he bul l et
22 poi nt f i ve.
23 Q. Ms. Li de - -
24 THE COURT: I ' m sor r y.
25 MR. RUBI NSTEI N: Excuse me.
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1 THE COURT: Gi ve me a chance t o check t hi s.
2 MR. RUBI NSTEI N: My pages ar en' t numbered.
3 ( Pause)
4 THE COURT: She says i t ' s i n t he CFR, Mr . Kwok.
5 THE WI TNESS: Yes. I t ' s i n i t em one, t wo, t hr ee, f our
6 and f i ve on t hat chart .
7 MR. RUBI NSTEI N: I f Mr . Kwok woul d - -
8 THE COURT: What about - - wher e i n t hose i t ems i s i t ?
9 BY MR. KWOK:
10 Q. Wel l , Ms. Li de, do you - -
11 THE COURT: I ' m sor r y, I ' m aski ng t he quest i on, Mr .
12 Kwok. I want i t answer ed, al l ri ght .
13 THE WI TNESS: I ' m - -
14 THE COURT: Fr om t he wi t ness .
15 THE WI TNESS: Yes, si r . I am t he t echni cal per son on
16 t hi s pr oj ect , and I bel i eve my col l eague, who wi l l be her e
17 l at er , wi l l be abl e t o poi nt t o t he exact par t of t hat . She' s
18 f r om our gr ant s of f i ce and she knows t hose document s par t by
19 par t . So i f you woul d al l ow me t o def er to her , I bel i eve I
20 woul d appr eci ate t hat .
21 THE COURT: Then I don' t want t o hear any t est i mony
22 about t he r egul at i ons on benef i t pl ans, at t hi s t i me.
23 MR. KWOK: That ' s f i ne. We' l l move on.
24 Q. Ms. Li de, di d t her e come a t i me when you became i nvol ved i n
25 a gr ant i nvol vi ng Dr . Dani el B. Kar r on?
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1 A. Yes.
2 Q. Do you see Dr . Karr on i n t he cour t r oom her e t oday?
3 A. Yes.
4 Q. Coul d you poi nt hi m out and descr i be an ar t i cl e of cl ot hi ng
5 he' s wear i ng?
6 A. He' s at t he second t abl e wi t h t he dar k sui t and gl asses
7 and, l et ' s see, l ong - - l onger hai r .
8 MR. KWOK: Your Honor - -
9 MR. RUBI NSTEI N: J udge, t hat ' s not f ai r .
10 A. Okay, behi nd a bl ue box.
11 THE COURT: Al l r i ght .
12 MR. KWOK: Your Honor , may t he r ecor d r ef l ect t hat t he
13 wi t ness has i dent i f i ed t he def endant ?
14 THE COURT: The r ecor d wi l l so i ndi cat e.
15 Q. Ms. Li de, how di d you f i r st meet t he def endant ?
16 A. I met t he def endant at a ki ckof f meet i ng f or a pr oj ect t hat
17 was awar ded t o hi s company by t he Advanced Technol ogy Pr ogram.
18 Q. And what was t he name of t hi s company?
19 A. CASI , Computer Ai ded Surgery I ncor por at ed.
20 Q. And, appr oxi mat el y, when di d t hi s meet i ng t ake pl ace?
21 A. Ear l y November of 2001.
22 Q. Wher e di d t hi s meet i ng t ake pl ace?
23 A. At t he Nat i onal I nst i t ut e of St andards and Technol ogy.
24 Q. And wher e i s t hat ?
25 A. I n Gai t hersbur g, Maryl and.
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1 Q. Who at t ended t hi s meet i ng on behal f of CASI ?
2 A. Dr . Kar r on, Mr . Lee Gur f ei n, and Dr . Ri ck Sat ava.
3 Q. Now, what was your underst andi ng as t o t he def endant ' s r ol e
4 i n Comput er Ai ded Sur gery, I nc. ?
5 THE COURT: How do you spel l t hat l ast name?
6 THE WI TNESS: S- a- t - a- v- a.
7 THE COURT: Thank you.
8 THE WI TNESS: Cer t ai nl y.
9 A. The def endant ' s posi t i on i n t he company was bot h chi ef
10 t echni cal of f i cer and pr esi dent .
11 Q. And you ment i oned Lee Gurf ei n. Who i s Lee Gur f ei n?
12 A. Lee Gur f ei n was par t i ci pat i ng as a busi ness cont act .
13 Q. How about Ri ck Sat ava, who was he?
14 A. Ri ck Satava was a cl i ni cal and t echni cal consul t ant .
15 Q. And who at t ended t he meet i ng on behal f of t he ATP program,
16 on behal f of NI ST?
17 A. Mysel f and t wo col l eagues, Mi ss J ane Or t hwei n and Mi ss hope
18 Snowden.
19 Q. And who was Hope Snowden?
20 A. Hope Snowden r epr esent ed t he NI ST grant s of f i ce and was t he
21 gr ant s speci al i st f or t hi s awar d.
22 Q. How about J ane Or t hwei n?
23 A. J ane Or t hwei n was my par t ner i n managi ng t hi s f r om a
24 t echni cal per spect i ve. She was al so part of t he Advanced
25 Technol ogy Pr ogram.
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1 Q. What happened at t hi s meet i ng?
2 A. As i n - - we used Exhi bi t 4 t hat pr esent at i on, t he sl i de
3 show. And as i n al l of our ki ckof f meet i ngs, we al l ow t he
4 r eci pi ent of t he award t i me t o gi ve us any updat es on t he award
5 t hat happened si nce i t was awarded. And t hen we go over t hose
6 sl i des aski ng i f t her e ar e any quest i ons on r epor t i ng
7 r equi r ement s, r ul es and r egul at i ons and ot her gover nment
8 response.
9 Q. What i f , any r ul es, about the pr ogr am di d you f ocus on i n
10 your pr esent at i on?
11 A. Wel l , as you saw i n t he pr esent at i on, we f ocus on maki ng i t
12 ver y cl ear t hat t he pr oposal i s - -
13 MR. RUBI NSTEI N: Obj ect i on, your Honor .
14 THE COURT: Obj ect i on sust ai ned. I t ' s a concl usory
15 st at ement .
16 What was sai d at t he meet i ng wi t h r egard t o t he r ul es
17 and r egul at i ons, not - - don' t char act er i ze i t . J ust say what
18 was sai d.
19 A. We r ei t erat ed t he need t o adhere t o government r ul es and
20 regul at i ons.
21 Q. And what are t hose r ul es t hat you ment i oned?
22 A. The r ul es t hat we ment i oned are par t of t he award document ,
23 some of t hem i n t he exhi bi t s, t he need f or pr i or appr oval among
24 t hem.
25 Q. And - -
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1 THE COURT: Pr i or approval .
2 THE WI TNESS: For any maj or change.
3 THE COURT: Over 10 per cent .
4 THE WI TNESS: Over 10 per cent of t he budget or i n key
5 per sonnel , and anythi ng t hat woul d af f ect the t echni cal aspect
6 of t he pr oj ect .
7 Q. What , i f anythi ng, di d you di scuss about di r ect ver sus
8 i ndi r ect cost s?
9 THE COURT: About what , si r ?
10 Q. Di r ect ver sus i ndi r ect cost s?
11 A. We went over the f act t hat di r ect cost s are pai d by t he
12 U. S. government , and any cost shar e t hat the pr oposer, pr oposed
13 i ndi r ect cost s must be pai d f or by t he pr oposer .
14 Q. What , i f anyt hi ng, was di scussed about how gr ant ee woul d
15 f i nd out whet her a r equest f or more occasi on, t he budget woul d
16 be grant ed or deni ed?
17 A. The onl y way t he r equest can be submi t t ed t o, whether i t
18 was deni ed or appr oved i s submi t t ed i n wr i t i ng t o t he gr ant
19 r eci pi ent , f r om t he gr ant s of f i cer at NI ST.
20 THE COURT: What woul d be gi ven - - t he approval i n
21 wr i t i ng woul d be gi ven t o?
22 A. That i s cor r ect , t he appr oval i n wr i t i ng i s gi ven t o t he
23 awards r eci pi ent i n t he f orm of an amendment t o t he award. The
24 or i gi nal award i s an award document , and t hen t he f i r st
25 approved change i s amendment one, et cet era. And t hat ' s an
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1 of f i ci al document si gned by t he gr ant s of f i cer at NI ST.
2 THE COURT: That woul d be Mi ss Snowden?
3 THE WI TNESS: No. Act ual l y i t ' s Mi ss Snowden' s boss
4 at t he t i me, i t was Mi ss Mar i l yn Gol dst ei n.
5 Q. At t he t i me t he pr oj ect was approved at CASI , di d you have
6 an under st andi ng as t o wher e Dr . Kar r on woul d be car r yi ng out
7 hi s r esear ch?
8 A. I t was our under st andi ng t hat of f i ce space was bei ng l ooked
9 f or i n l ower Manhat t an, and t hat t her e was a possi bi l i t y of
10 of f i ce space or l ab space at CUNY or at t he New Yor k Medi cal
11 Cent er .
12 Q. And how di d you l ear n t hi s?
13 A. I t was i n t he or i gi nal proposal and i t was di scussed.
14 Q. Ms. Li de, I ' m showi ng you what has been marked f or
15 i dent i f i cat i on gover nment exhi bi t exhi bi t s 10, 10A, 10B, 11,
16 12, 13 and 14. Can you t ake a moment t o l ook at t hese?
17 THE COURT: These are not i n evi dence yet .
18 MR. KWOK: No t hey' r e not . I t ' s j ust f or
19 i dent i f i cat i on.
20 THE COURT: The j ur y shoul dn' t l ook at t hemunt i l such
21 t i me as t hey' ve been admi t t ed i n evi dence. J ust hol d on. Al l
22 r i ght . So we st ar t wi t h one document at a t i me Mr . Kwok.
23 THE WI TNESS: Okay.
24 MR. KWOK: Sur e, l et ' s l ook at government exhi bi t 10.
25 THE COURT: Do you know what t hat i s, Ms. Li de?
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1 THE WI TNESS: Yes, I do.
2 THE COURT: And what i s i t ?
3 THE WI TNESS: I t i s t he f i r st par t of t he pr oposal
4 submi t t ed t o t he Advanced Technol ogy by CASI .
5 MR. KWOK: Government of f er s government exhi bi t 10?
6 THE