United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 12, 2002 Decided April 16, 2002

No. 01-5092

James C. Wood, Jr., ex rel.
United States of America,
Appellant

v.

The American Institute in Taiwan, et al.,
Appellees

Appeal from the United States District Court
for the District of Columbia
(No. 98cv01952)

Wm. Paul Lawrence, II argued the cause for appellant.
With him on the briefs was Bradley S. Weiss.

Douglas N. Letter, Litigation Counsel, U.S. Department of
Justice, argued the cause for appellee. With him on the brief
were Roscoe C. Howard, Jr., U.S. Attorney, R. Craig Law-
rence and Lydia Kay Griggsby, Assistant U.S. Attorneys.


Before: Tatel and Garland, Circuit Judges, and Williams,
Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Tatel.

Tatel, Circuit Judge: In this case, we must determine
whether the American Institute in Taiwan, a unique entity
through which the United States performs consular services
on Taiwan and conducts commercial, cultural, and other rela-
tions with the people on Taiwan, enjoys sovereign immunity
from a qui tam suit brought by the Institute's former Manag-
ing Director. Agreeing with the district court that the Insti-
tute is immune, we affirm the dismissal of the complaint.

I.

Following the triumph of Mao Zedong's 1949 communist
revolution, Chiang Kai-Shek, leader of China's defeated Na-
tionalist party, fled to Taiwan with two million loyalists. The
United States declined to recognize the new People's Repub-
lic of China, continuing instead to recognize the Nationalists
as the official leaders of the Chinese government. This
arrangement lasted until several years after President Rich-
ard Nixon's historic visit to China when, in 1978, the United
States established diplomatic relations with the People's Re-
public.

As a condition of normalizing relations with the United
States, the People's Republic insisted on recognition as "the
sole legal government of China," stating its "firm[ ] op-
pos[ition] [to] any activities which aim at ... an[ ] 'indepen-
dent Taiwan.' " Dep't St. Bull., Mar. 20, 1972, at 435, 437
(setting forth text of Shanghai Communique). Because the
United States wished to maintain relations with Taiwan that
would not be unacceptable to the People's Republic, Congress
passed the Taiwan Relations Act of 1979, which replaced
official recognition of Taiwan with "relations between the
people of the United States and the people on Taiwan." 22
U.S.C. s 3301(b)(1). In addition to "preserv[ing] and pro-
mot[ing] commercial, cultural, and other relations" with the
people on Taiwan, id., Congress sought to protect the United
States' ongoing interest in "peace and stability in the area,"


id. s 3301(b)(2), and in the determination of Taiwan's future
by "peaceful means," id. s 3301(b)(3), (4); "to provide Taiwan
with arms of a defensive character," id. s 3301(b)(5); and to
prevent threats to "the security, or the social or economic
system, of the people on Taiwan," id. s 3301(b)(6). As Sena-
tor Church, the sponsor of the bill that became the Taiwan
Relations Act explained, Congress wanted to "make[ ] clear to
the people on Taiwan that we are not abandoning them" while
"simultaneously developing a mutually beneficial relationship
with the People's Republic of China." 125 Cong. Rec. 6709
(1979).

To facilitate this new and sensitive set of relations, the
Taiwan Relations Act created appellee, the American Insti-
tute in Taiwan. Given that the United States no longer had
an embassy on or ambassador to Taiwan, the Institute be-
came the entity through which "the people of the United
States" and "the people on Taiwan" maintain "extensive,
close, and friendly commercial, cultural, and other relations."
22 U.S.C. s 3301(a)(2), (b). The Act establishes the Institute
as "a nonprofit corporation incorporated under the laws of the
District of Columbia or ... such comparable successor non-
governmental entity as the President may designate." Id.
s 3305(a)(1)-(2). The Act "preempt[s]" any "law, rule, regu-
lation, or ordinance of the District of Columbia" "[t]o the
extent" it "impedes or otherwise interferes with the perfor-
mance of the functions of the Institute pursuant to [the Act]."
Id. s 3305(c).

The Taiwan Relations Act gives the Institute two primary
functions, both of which are to be carried out "in the manner
and to the extent directed by the President." 22 U.S.C.
s 3305(a), (b). First, the Institute "conduct[s] [and] carrie[s]
out" "[p]rograms, transactions, and other relations conducted
or carried out by the President or any agency of the United
States Government with respect to Taiwan." Id. s 3305(a).
Second, the Institute "enter[s] into, perform[s], [and] en-
force[s]" any "agreement or transaction" of the President or
any federal agency "relative to Taiwan." Id. s 3305(b). The
Institute also provides services to federal agencies, id.
s 3308, and performs "acts such as are authorized to be


performed outside the United States for consular purposes,"
id. s 3306(a)(3); acts performed in this latter connection
"shall be valid, and of like force and effect within the United
States, as if performed by any other person authorized under
the laws of the United States to perform such acts," id.
s 3306(b). The United States Comptroller General may audit
the Institute's books with respect to any funds made available
to the Institute by federal agencies. Id. s 3308(c).

The President delegated the lion's share of his authority
over the Institute to the Secretary of State. See Exec. Order
No. 12,143, 44 Fed. Reg. 37,191 (June 22, 1979), superseded
by Exec. Order No. 13,014, 61 Fed. Reg. 42,963 (Aug. 15,
1996). Under the Institute's bylaws, the Secretary appoints
and "may ... remove[ ] [the Trustees] at any time, with or
without cause." James Wood ex rel. United States of Amer-
ica v. Am. Inst. in Taiwan, No. 98-1952, slip op. at 13
(D.D.C. Feb. 28, 2001) (quoting United States' Mem. Supp.
Mot. to Dismiss at 6 n.3 (quoting Institute bylaws)) (internal
quotation marks omitted). The Board of Trustees appoints
both a Chairperson and a Managing Director, see id., and
" 'manage[s] and conduct[s]' " the Institute's " 'business and
affairs ... in accordance with the bylaws,' " Appellant's Br. at
8 (quoting Institute Articles of Incorporation).

The Institute carries out its statutory responsibilities pur-
suant to a contract with the State Department. Under that
contract, the Institute performs "consular and other functions
in Taiwan .... normally performed by the ... [State Depart-
ment] and other U.S. agencies at United States foreign
diplomatic posts." Compl. p 14. Among other things, the
Institute processes visa applications from foreign nationals
and provides travel-related services for Americans. The In-
stitute contracts with other government agencies to provide
"services ... similar to those ... provided by federal [embas-
sy] employees prior to the time the United States terminated
diplomatic relations with Taiwan." Id. p 13. For example,
the Institute conducts trade shows on behalf of the Depart-
ment of Commerce. The Institute has also entered into a
number of agreements with the Taipei Economic and Cultural
Representative Office in the United States, "the instrumental-


ity established by the people on Taiwan having the necessary
authority ... to ... take ... actions on behalf of Taiwan in
accordance with the [Taiwan Relations] Act," Exec. Order No.
13,014, 61 Fed. Reg. at 42,964, concerning such matters as
customs, energy, intellectual property rights, taxation, and
trade, see Agreements in Force as of December 31, 1997
Between the American Institute in Taiwan and the Taipei
Economic and Cultural Representative Office in the United
States, 63 Fed. Reg. 71,507 (Dec. 28, 1998).

Over half of the Institute's approximately $36 million in
annual revenue derives from the State Department contract.
Most of the remainder comes from either visa processing fees
or contracts with other federal agencies. Between $1.4 and
$1.5 million comes from trade shows.

Appellant James Wood served as the Institute's Managing
Director and chaired its Board of Trustees from 1995 to 1997.
Wood alleges that during his tenure, he discovered that the
Institute had defrauded the United States by making false
claims for payment under the State Department contract to
the tune of some $5.3 million. According to Wood, Institute
personnel accomplished this fraud by embezzling visa pro-
cessing fees and submitting false reports to the State Depart-
ment. In order to cover operating expenses, he alleges, the
Institute offset the embezzled amount by drawing additional
funds from the State Department contract. Wood claims that
when he reported the alleged fraud to the State Department,
the Trustees and State Department officials embarked on a
"campaign of retaliation, discrimination and intimidation"
against him, ultimately forcing him to resign. Compl. p 87.

Wood then filed a qui tam suit under the False Claims Act,
31 U.S.C. s 3730, in the United States District Court for the
District of Columbia. The False Claims Act permits a pri-
vate person, known as the "relator," to bring "a civil action
... for the person and for the United States Government ...
in the name of the Government," id. s 3730(b), against any
"person who ... knowingly presents, or causes to be present-
ed, to [the federal government] ... a false or fraudulent claim
for payment or approval," id. s 3729(a)(1). The relator


shares in any financial recovery. Id. s 3730(d). In addition
to the qui tam claim, Wood's complaint asserts retaliatory
discharge "because of lawful acts done ... in furtherance of
... [the qui tam] action." Id. s 3730(h).

Declining to intervene in Wood's suit, the United States, on
behalf of the Institute, moved to dismiss on the grounds of
sovereign immunity. The district court denied Wood's mo-
tion for discovery and an evidentiary hearing on the issue,
concluded that the Institute "is an arm of the sovereign ...
for purposes of [the Institute's] claim of sovereign immunity
under the [False Claims Act]," Wood, No. 98-1952, slip op. at
17, and dismissed the complaint. Wood now appeals, chal-
lenging the district court's sovereign immunity determination
as well as its denial of discovery.

II.

The Institute describes itself as an "agency or instrumen-
tality" of the United States not subject to suit under the
False Claims Act. Disagreeing, Wood argues that Congress's
decision to create the Institute as a "nonprofit corporation
incorporated under the laws of the District of Columbia, or
... comparable successor nongovernmental entity," 22 U.S.C.
s 3305(a)(1)-(2), demonstrates that the Institute is not a
governmental entity enjoying sovereign immunity, but rather
a private corporation providing services to the government.
Wood likens the Institute to Radio Free Europe/Radio Liber-
ty, the American National Red Cross, and Amtrak, three
corporations created by the federal government and char-
tered under state or District of Columbia law that courts have
held (or observed in dicta) are not part of the government for
some purposes. See Ralis v. RFE/RL, Inc., 770 F.2d 1121,
1124-25 (D.C. Cir. 1985) (holding that Radio Free Europe/Ra-
dio Liberty is not a "government controlled corporation"
within the meaning of the Age Discrimination Employment
Act); Marcella v. Brandywine Hosp., 47 F.3d 618, 622-24 (3d
Cir. 1995) (holding that Red Cross is not part of government
for purpose of immunity from jury trials in personal injury
suits, although Red Cross is "virtually ... an arm of the


[federal] government" entitled to immunity for some pur-
poses, including state taxation (internal quotation marks and
citation omitted)); Lebron v. Nat'l R.R. Passenger Corp., 513
U.S. 374, 391-92, 400 (1995) (noting in dictum that the
statutory provision that Amtrak "will not be an agency or
establishment of the United States government" "no doubt
... deprives Amtrak of sovereign immunity from suit," but
holding that Amtrak is "part of the Government" for First
Amendment purposes (internal quotation marks and citation
omitted)).

Although certainly relevant to the issue of sovereign immu-
nity, the Institute's nonprofit corporate status is hardly dis-
positive. Relying on the Institute's status alone would ignore
the governmental nature of its responsibilities and the exten-
sive control the government exerts over Institute operations.
Cf. Lebron, 513 U.S. at 400 (holding that Amtrak is "part of
the Government for purposes of the First Amendment" be-
cause the government created Amtrak "by special law" to
further "governmental objectives" and retained authority to
appoint a majority of Amtrak's corporate directors). Indeed,
the Institute has no role other than promoting and conducting
relations "between the people of the United States and the
people on Taiwan," a role it performs through governmental-
type activities such as processing visa applications, providing
consular services, and entering into agreements regarding
customs and trade. Wood himself describes the Institute as
performing activities that are not only "normally performed"
by the State Department "at ... foreign diplomatic posts,"
Compl. p 14, but are also similar to those "provided by federal
[embassy] employees prior to the time the United States
terminated diplomatic relations with Taiwan," id. p 13.

Under the Taiwan Relations Act, moreover, the Institute
carries out its core statutory functions--"programs," "trans-
actions," and "agreements"--as well as "services" to federal
agencies, "in the manner and to the extent directed by the
President," 22 U.S.C. s 3305(a), (b), or "upon such terms and
conditions as the President may direct," id. s 3308(b). Al-
though the Trustees " 'manage[ ] and conduct[ ]' " the Insti-
tute's " 'business and affairs,' " Appellant's Br. at 8 (quoting


Institute Articles of Incorporation), the Secretary of State
retains ultimate control over the Trustees through the power
of appointment and removal at will. As Wood conceded at
oral argument, the Institute may undertake no "activities ...
inconsistent with U.S. government policy." Tr. of Oral Arg.
at 13. Were this not the case, we cannot imagine how acts of
Institute employees could ever have the same "force and
effect" as "acts ... for consular purposes.... performed by
any other [authorized] person." 22 U.S.C. s 3306(a)(3), (b).

Put simply, though not an embassy, the Institute functions
like one. In Wood's words, the Institute "carr[ies] out U.S.
foreign policy." Appellant's Br. at 9. The Institute thus
differs quite significantly from Radio Free Europe/Radio
Liberty and the Red Cross. Finding Radio Free Europe/Ra-
dio Liberty not a governmental entity for ADEA purposes,
we emphasized that the corporation, though required to carry
programming "consistent with" U.S. foreign policy, operates
under an express statutory mandate to remain "an indepen-
dent broadcast media"; it thus retains "independence in
programming and broadcasting decisions" and "day-to-day
... operational control." RFE/RL, 770 F.2d at 1125-26
(internal quotation marks and citation omitted). Likewise, in
concluding that the Red Cross is not the government for
purposes of immunity from jury trials, the Third Circuit
thought it important that the Red Cross, in order "to proper-
ly fulfill its role ... in international ... activities[,] ... must
be independent of the United States government," and that
the government "does not manage the [Red Cross's] day-to-
day activities." Marcella, 47 F.3d at 624. "Independence" is
not a word one associates with the Institute. Indeed, the
Institute's foreign policy mission requires a fundamental lack
of independence from U.S. government control.

Lebron also differs from this case. There, the Supreme
Court held that Amtrak is "part of the Government" for First
Amendment purposes. 513 U.S. at 400. To be sure, the
court stated that Amtrak enjoys no sovereign immunity, id. at
392, but that observation, in addition to being dictum, rested
on a provision in the "authorizing statute ... that ... [Am-
trak] 'will not be an agency or establishment of the United


States Government,' " id. at 391 (quoting the Rail Passenger
Service Act of 1970, 84 Stat. 1330). In contrast, when Con-
gress used the words "nongovernmental entity" in the Taiwan
Relations Act, it did not create an independent corporation
like Amtrak. Instead, Congress established a vehicle
through which the United States could accomplish two seem-
ingly inconsistent objectives: fulfill its commitment to the
People's Republic to end official ties with Taiwan, yet main-
tain relations with the "people on Taiwan" through consular,
commercial, and cultural activities--even arms sales. To
hold, as Wood urges, that the Institute is not part of the
government would ignore this central foreign policy mission.

Galvan v. Federal Prison Industries reinforces our belief
that the Institute, notwithstanding its nonprofit corporate
status, remains very much part of the federal government.
199 F.3d 461 (D.C. Cir. 1999). Galvan involved a qui tam
suit against the Federal Prison Industries, an entity created
by Congress to provide work opportunities for federal in-
mates. Id. at 462. Pointing out that FPI is a "wholly owned
government corporation," and that its revenues are deposited
in the United States Treasury, we held that the suit was
"against the sovereign" because "any judgment in [the qui
tam relator's] favor would require FPI to pay damages
directly from the public treasury." Id. Although Institute
funds are not held in the United States Treasury, "[d]iversion
of resources from a private entity created to advance federal
interests has effects similar to those of diversion of resources
directly from the Treasury." Id. (internal quotation marks
and citation omitted). A False Claims Act judgment against
the Institute would have one of two consequences for the
government: either the government would have to make up
the loss (as Wood says it did with respect to the $5.3 million
in allegedly embezzled funds), or it would have to adjust its
relations with the "people on Taiwan," as the Act makes the
Institute the sole entity through which the United States
conducts such relations. Wood's suit is "against the sover-
eign," in other words, because the " 'judgment sought would
expend itself on the public treasury or domain, or interfere
with the public administration.' " Dugan v. Rank, 372 U.S.


609, 620 (1963) (quoting Land v. Dollar, 330 U.S. 731, 738
(1947)).

Insisting that a False Claims Act judgment against the
Institute would have no effect on the Treasury, Wood claims
that some Institute revenues--visa fees and funds generated
from trade shows, for example--come from what he calls
"independent sources" and could be used to pay the judg-
ment. Appellant's Br. at 29. We disagree. The Institute
issues visas and conducts trade shows pursuant to State and
Commerce Department contracts through which it fulfills its
statutory responsibility to "promote ... commercial, cultural,
and other relations between the people of the United States
and the people on Taiwan." 22 U.S.C. s 3301(b)(1). Reve-
nues generated by these activities, moreover, offset funds the
federal government would otherwise have to provide for the
Institute to fulfill its statutory and contractual obligations.
And at oral argument, Wood conceded that, were the Insti-
tute to close its doors and liquidate its assets, any remaining
funds would go to the federal government. Put another way,
it makes little difference from the government's perspective
whether a False Claims Act damages award is paid out of visa
and trade show revenues or from funds received from the
State Department or other federal agency--the effect on the
Treasury is essentially the same.

Wood next argues that even if the Institute is part of the
government, Congress waived sovereign immunity because
under D.C. law a nonprofit corporation "shall have power ...
to sue and be sued, complain, and defend, in its corporate
name." D.C. Code s 29-301.05 (West 2001). "A waiver of
the federal government's sovereign immunity must be un-
equivocally expressed in statutory text, and will not be im-
plied." Lane v. PeNa, 518 U.S. 187, 192 (1996) (internal
citations omitted). We construe statutory ambiguity in favor
of immunity: "So long as a statute supposedly waiving immu-
nity has a 'plausible' non-waiver reading, a finding of waiver
must be rejected." Galvan, 199 F.3d at 464 (quoting United
States v. Nordic Village, Inc., 503 U.S. 30, 37 (1992)).


Although FDIC v. Meyer holds that a sue-and-be-sued
clause represents a "broad waiver" of sovereign immunity,
510 U.S. 471, 475 (1994) (internal quotation marks and cita-
tion omitted), this case differs from Meyer in a significant
respect: In Meyer, the federal statute creating the FDIC
contained the sue-and-be-sued clause, while the clause in this
case appears not in the Taiwan Relations Act, but in the D.C.
Code. Given the presumption against waiver, we must there-
fore determine whether the Taiwan Relations Act has a
"plausible non-waiver reading"--that is, can we plausibly read
the Act to exempt the Institute from the sue-and-be-sued
clause? See Galvan, 199 F.3d at 464-66 (analyzing organic
statute to determine whether it could plausibly be read as
rendering D.C. Code's "sue and be sued" clause inapplicable).

Arguing that Congress intended the clause to apply to the
Institute, Wood points to Sloan Shipyards v. United States
Shipping Board Emergency Fleet Corp., 258 U.S. 549 (1922).
There, the Supreme Court found that a corporation formed
by the United States Shipping Board enjoyed no sovereign
immunity, id. at 566-68, because, as a D.C. corporation, it had
"the capacity to sue and be sued," id. at 565. Although like
the corporation in Sloan Shipyards, the Institute is incorpo-
rated under D.C. law, the Taiwan Relations Act adds an
additional wrinkle by way of the preemption clause, which
bars application of any provision of D.C. law that "impedes or
otherwise interferes with the [Institute's] performance." 22
U.S.C. s 3305(c). "Impede" the Institute's performance or
"otherwise interfere" with it is exactly what a False Claims
Act judgment would do. As we explained, the United States
would either have to make up any losses resulting from such
an award or live with any negative foreign policy conse-
quences that might flow from having to modify or reduce the
Institute's exclusive role. Because we can thus plausibly read
the Act to preempt the D.C. Code's sue-and-be-sued clause,
Congress has not waived the Institute's sovereign immunity.

Contrary to Wood's claim, our conclusion does not leave the
Institute free to operate in a "basically unregulated" "no-
man's land." Tr. of Oral Arg. at 14. The Comptroller


General may audit the Institute's books. 22 U.S.C. s 3308(c).
The State Department's Inspector General has jurisdiction to
investigate the Institute's operations and finances, as does the
Inspector General of every federal agency with which it
contracts. See 5 U.S.C. App. 3 ss 1-12 (Inspector General
Act). Even with sovereign immunity, therefore, the Institute
is hardly free from government oversight. That oversight
may not be what Wood prefers, but the fact remains that
some of the government's most powerful watchdog agencies
may investigate the Institute and its affairs.

III.

Wood contends that the district court erred in denying his
motion for discovery and an evidentiary hearing with respect
to two issues relating to the Institute's claim of sovereign
immunity: the sources of Institute funding and the precise
extent of government control over Institute operations. De-
nying Wood's motion, the district court explained that sover-
eign immunity turns "primarily" on legal rather than factual
conclusions. Wood, No. 98-1952, slip op. at 22. In the
context of foreign sovereign immunity claims, we have recog-
nized that district courts must afford plaintiffs " 'ample op-
portunity to secure and present evidence relevant to the
existence of jurisdiction.' " Phoenix Consulting, Inc. v. Re-
public of Angola, 216 F.3d 36, 40 (D.C. Cir. 2000) (quoting
Prakash v. Am. Univ., 727 F.2d 1174, 1179-80 (D.C. Cir.
1984)). "In order to avoid burdening a sovereign that proves
to be immune from suit, however, ... [such] discovery should
be carefully controlled and limited." Id. The same princi-
ples apply here.

Reviewing for abuse of discretion, see Goodman Holdings
v. Rafidain Bank, 26 F.3d 1143, 1147 (D.C. Cir. 1994), we find
no fault with the denial of discovery on the issue of control.
The district court had no need to resolve disputed factual
issues, relying (as have we) on the Act, bylaws, and Articles
of Incorporation, which themselves ensure virtually total ex-
ecutive branch control. Thus, even if, as Wood sought to
demonstrate through discovery, the Institute exercises "day-


to-day control over [its own] business and financial affairs,"
Appellant's Br. at 29, the Institute would remain part of the
United States government.

The district court did make several factual findings regard-
ing Institute funding, including some findings based on asser-
tions in the Government's brief. Statements by counsel, of
course, are not evidence. See, e.g., Brown v. INS, 775 F.2d
383, 388 (D.C. Cir. 1985). As Wood conceded at oral argu-
ment, however, in order to resolve this appeal we need not
rely on district court findings concerning disputed details of
the Institute's finances. As we have explained, undisputed
evidence regarding the nature of Institute funding, together
with the Institute's exclusive foreign relations role and the
government's extensive control over it, leave no doubt that
the Institute enjoys sovereign immunity.

The decision of the district court is affirmed.

So ordered.