I think what he did could have passed had he not made it official by writing letters and sending them. I think he could have conveyed all this orally in an ambiguous enough way.

The reason is that once this becomes official enough and "on the books" this kind of stuff would happen again. The real nightmare is not him doing it and getting way is every disgruntled agency employee doing it and then pointing fingers at this case saying "but you negotiated with him!".

So I think he wasn't smart enough, he could have had a chance at this had he not stirred the waters that much.

Another, general way of putting it, is that in large bureaucratic institutions (officially!) you never put your superiors in a position to make a new rule or break an existing rule.