Harvard, Shleifer and Hay each have their own lawyers and defense strategies.

In their motion for summary judgment, Shleifer’s lawyers argue the economics professor was a consultant to, not an employee of, HIID. As a result, they argue, Shleifer was not covered by language in the USAID policy that banned investments by employees in their host countries.

Woodlock said yesterday that he was not inclined to allow Shleifer to make the distinction between being an employee of Harvard and being an employee of its subunit HIID. “That’s all really inside baseball for Harvard,” Woodlock said at one point and called the argument “a shell game” at another.

Woodlock proceeded to go through the undisputed evidence involving Shleifer and Hay’s investments, questioning why each did not constitute a breach of contract.

On several of these he indicated Hay and Shleifer’s arguments were unlikely to pass muster.

Harvard meanwhile continued to maintain yesterday that it had fulfilled its end of the contract with USAID. HIID provided assistance that USAID lauded at its time as historic, and Harvard had provided the oversight that it was responsible for, the University argued.

Woodlock seemed close to agreeing with the government that Harvard had indeed broken its contract.

He was far more skeptical, however, of Bloom’s argument that the transgressions amounted to the more serious and potentially costly violation of FCA.

According to Woodlock, to establish that a FCA violation had occurred, Bloom would have to show Harvard knowingly submitted false information to the government.

Woodlock strenuously questioned both whether Bloom could establish this knowledge and whether billing stubs Harvard submitted to USAID could constitute false claims.

Woodlock said he will study further case law on the former question, but indicated his initial feeling was that it warranted presentation to a jury.

The FCA complaint is crucial to the government’s attempts to inflict substantial monetary punishments on Harvard.

A FCA violation carries a penalty of triple damages. Bloom is asking the court to force Harvard to repay three times the $34 million of which it says it was defrauded.

At the end of the hearing, Woodlock asked both the government and Harvard to prepare additional briefs over the course of the next two months so the case will not get bogged down while he decides on the motions.

Woodlock was animated throughout the hearing, mixing references to a cartoon character and a locally famous Boston School Committee member with quotes from opinions authored by Felix Frankfurter.