Agreements Describing Liability in Undercover Operations Should Limit the Government's Liability

GAO recently completed a review of the costs associated with the Federal Bureau of Investigation's (FBI) undercover operations. During that review, GAO examined several agreements between FBI and certain third parties which specified the conditions under which each would be liable for actions taken during an undercover operation.

GAO found that these agreements usually stated that the Federal Government was liable only for the negligent acts of FBI employees, which it would normally be liable for under existing law. However, three of the eight agreements reviewed expanded the scope of the Government's liability beyond FBI negligence. Supreme Court and Comptroller General decisions require that such agreements limit the amount of the Government's liability to available appropriations; one of these agreements did not contain such a limit. GAO stated that determining the reason that this agreement did not contain the required liability limit could help avoid future recurrences of this situation.