¶1*730Mark H. Gallant, Atty., Dept, of Justice, Washington, D. C., with whom Earl J. Silbert, U. S. Atty., Barbara Allen Babcock, Asst. Atty. Gen., Leonard Schaitman, Atty., Dept, of Justice, Washington, D. C., were on brief, for appellant.
¶2*731A. Raymond Randolph, Jr., Washington, D. C., with whom James E. Sharp and N. Richard Janis, Washington, D. C., were on the brief, for appellee, Kearns.
¶3Brian P. Gettings, Arlington, Va., with whom Harvey B. Cohen, Arlington, Va., was on the brief, for appellee, Bostwick.
¶4Before WRIGHT, Chief Judge, and BAZELON and MacKINNON, Circuit Judges.
¶5Opinion for the Court filed by BAZELON, Circuit Judge.
¶7The Government brought this action for breach of fiduciary duty against Henry J. Kearns and Donald Bostwick, formerly president and executive vice president, respectively, of the Export-Import Bank of the United States (Eximbank),1 to recover any profits from the sale of personal stock holdings to a company having extensive dealings with Eximbank. Because the Government did not allege that it had suffered a direct injury, the district court dismissed the complaint for failure to state a claim on which relief could be granted.2 We reverse.
¶8I.
¶9On this appeal, we are bound to view the facts alleged in the complaint most favorably to the plaintiff.3 When Kearns was appointed president of Eximbank in 1969, he was engaged in international trading ventures through Kearns International. One of his ventures was Siam Kraft Paper Co., Ltd., (Siam Kraft), a pulp and paper firm in Thailand. Siam Kraft borrowed $14 million from Eximbank before Kearns’s appointment, and this obligation remained outstanding throughout his tenure at the bank. During Senate hearings on his confirmation, Kearns agreed to resign his directorship of Siam Kraft and to place in a “blind trust” 100,000 shares in the firm, which he had been unable to sell. Kearns took office at Eximbank on March 20, 1969, and served as president and chairman of the board until October, 1973.
¶10In December, 1972, Kearns’s trustee sold the Siam Kraft stock for $5 a share to Mitsui & Co. (USA) (Mitsui-USA), a subsidiary of Mitsui & Co., (Japan) Ltd., (MitsuiJapan), which has extensive dealings with Eximbank. The complaint alleges that Kearns personally solicited Mitsui-USA as a buyer, and that the sale price was greatly inflated, since at the time of sale the stock was traded on the Bangkok Stock Exchange for $1.75 a share.4 The result, the Government. charges, was a serious breach of Kearns’s fiduciary duty to Eximbank.5 Bostwick, previously employed at Siam Kraft, served at Eximbank from May 1969 through September 1973. The Government alleges that Bostwick knowingly permitted Kearns to include Bostwick’s 8,000 Siam Kraft shares in the Mitsui-USA deal, and similarly violated his fiduciary duty to the bank.
¶11II.
¶12Noting that the Government has not proceeded against them on criminal charges, Kearns and Bostwick insist that *732the Government’s case fails because there is no statute authorizing this civil action. They emphasize the limitations on the development of the common law in federal courts as epitomized by Erie R. Co. v. Tompkins.6 Should this court permit the Government to seek a common law remedy for breach of fiduciary duty, appellees argue, it would herald a return to the “freewheeling” days before Erie7
¶13We find this contention without merit. Despite misreadings of Justice Brandeis’s position in Erie, it is by now accepted that federal common law provides remedies in many situations.8 Two general classes of cases can be identified where federal common law remedies are available. The first involves implementation of federal constitutional or statutory policies, as in labor law9 or regulation of interstate waters.10 The second concerns the Government as a legal entity, for example in cases involving trespass on government property,11 handling of the Government’s commercial paper.12 Government contracts,13 and tort claims.14 The instant case falls into this second category. As Justice Grier observed in Cotton v. United States, 52 U.S. (11 How.) 229, 231, 13 L.Ed. 675 (1850), “It would present a strange anomaly, indeed, if, having the power to make contracts and hold property as other persons, natural or artificial, [public agencies] were not entitled to the same remedies for their protection.” We hold that common law protections against breach of fiduciary duty extend to the principal-agent relationship presented here.15
¶14We also reject appellee’s argument that since Congress enacted criminal statutes covering bribery and conflicts of interest without creating a civil remedy, we must infer that Congress chose not to allow civil actions like this one. There is a paucity of evidence to support the view that Congress intended to strip the Government of its civil remedy in this situation. We agree with the Court of Claims that “[t]he mere existence of statutes establishing brib-
¶15*733ery and fraud penalties . . . detracts in no way from the Government’s right to a civil remedy of the kind available to private employers.”16 Thus we find the district court properly heard the present case under 28 U.S.C. § 1345 (1976).17
¶16III
¶17The court below ruled that the facts alleged did not satisfy the common law standards for breach of fiduciary duty, because there was no demonstration that the Government suffered direct financial loss. We find that holding in error.18
¶18Federal courts have often provided relief for the Government in civil actions charging its agents with abuse of office. The basic statement came in United States v. Carter, 217 U.S. 286, 306, 30 S.Ct. 515, 520, 54 L.Ed. 769 (1909):
The larger interests of public justice will not tolerate, under any circumstances, that a public official shall retain any profit or advantage which he may realize through the acquirement of an interest in conflict with his fidelity as an agent. If he takes any gift, gratuity or benefit in violation of his duty, or acquires any interest adverse to his principal, without a full disclosure, it is a betrayal of his trust and a breach of confidence, and he must account to his principal for all he has received.
¶19Federal precedent in this area, however, centers on arguably more obvious abuses of office than that alleged here. Carter involved a bid-rigging scheme, Continental Management, Inc. v. United States was a civil action following several criminal convictions for bribery,19 and United States v. Drumm20 concerned an agricultural inspector’s employment as a consultant to one of the businesses he was supposed to police. Nevertheless, in appropriate circumstances we may look to State and other common law sources for guidance.21 Based upon our examination of the sources, we believe that this complaint presents sufficient grounds for proceeding to the merits.
¶20The Restatement on Restitution (1937), § 197 provides:
Where a fiduciary in violation of his duty to the beneficiary receives or retains a bonus or commission or other profit, he holds what he receives upon a constructive trust for the beneficiary.
¶21The application of this standard in Fuchs v. Bidwill,22an action for an accounting by state legislators, is instructive. The complaint alleged that the lawmakers purchased stock in a harness racing corporation for one dollar per share, and that the corporation’s principal arranged to have the shares repurchased four years later for three dollars to seven dollars a share. Plaintiffs contended that the stock arrangements created a conflict of interest for the lawmakers, who influenced legislation concerning the racing industry. The court found that the allegations of the complaint were sufficient even though, as in the case of Kearns and Bostwick, there was no direct charge that defendants did anything in their official duties “which was contrary to *734the public interest, that there are, or were, wrongful acts.”23 Such charges were not necessary, the court stated, because “the rule defining the responsibilities of public officials is not based upon harm necessarily done but upon equitable principles of preventing a conflict of opposing interests in the minds of officials.”24
¶22Carter still provides the standard for breach of fiduciary duty by public officials:
It is immaterial . . . whether the complainant was able to show any specific abuse of discretion, or whether it was able to show that it had suffered any actual loss by fraud or otherwise.25
¶23State and federal courts have adopted this position in subsequent cases,26 and we see no basis for the district court’s attempt to restrict this standard to the facts of the cases. Valid policy concerns underlie the insistence that a plaintiff in an action for breach of fiduciary duty need not demonstrate actual damage or abuse of office. As noted in Carter:
It is not enough for one occupying a confidential relation to another, who is shown to have secretly received a benefit from the opposite party, to say, “You cannot show any fraud, or you cannot show that you have sustained any loss by my conduct.” Such an agent has the power to conceal his fraud and hide the injury done his principal.27
¶24The purpose of the civil remedy is not to restore particular funds to the Government, but to provide a means of enforcing the loyalty of its agents. The action pursued here is a proper tool, based on common law notions of principal-agent relations, for controlling the possible loss of impartial public administration.
¶25IV
¶26The Government need not prove actual damage if it can prove that Kearns and Bostwick received such an inflated price for their Siam Kraft stock that their performance of public duties might well have been infected by a conflict of loyalties. Appellees insist that the complaint must fail because it does not claim that the sale of Siam Kraft shares was “secret.” It is true that conflict of interest must be undisclosed to constitute a breach of duty to the principal.28 However, we find it a reasonable inference from the complaint that since Kearns’s stock was in a blind trust, presumably insulated from his control, the transaction was secret. Similarly, the complaint states that Bostwick sold his stock “directly or through others,” leaving the possibility that sale through third parties would satisfy the secrecy requirement. Of course, our view of the pleadings is subject to proof at trial.
¶27Consequently, the judgment of the district court is reversed and the case is remanded for further proceedings in accordance with this opinion.
¶28Reversed.