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Yes, Unless A Partisan Political Decision Intervenes


Friday, Aug. 02, 2002

ABC News has reported that former President Clinton and Senator Hillary Clinton are together asking the government to reimburse them for some $3.5 million of their legal fees resulting from Ken Starr's independent counsel investigation. The story says they "racked up" about $11 million in legal bills for Whitewater and other investigations while in the White House. Their defense fund, reportedly, paid about $7 million - leaving a hefty sum yet unpaid.

The former First Family's lawyer, David Kendall, issued a statement to accompany the fees request: "As explicitly authorized by [the Independent Counsel] statute, and following the precedent set by Presidents Reagan and Bush, the Clintons have applied for reimbursement of their legal fees incurred in connection with the independent counsel's Whitewater investigation."

The timing of this announcement, I suspect, was not happenstance. With the House of Representatives in recess, nary a scream was heard from Capitol Hill. However, this doesn't mean that that the U.S. Treasury Department is going to be issuing a check anytime soon - if ever.

Nevertheless, the Clintons should - and may - get at least partial reimbursement of their fees. They have fulfilled the statutory criteria for reimbursement, and thus only a partisan political decision will lead to the failure of the reimbursement request.

The Whitewater Investigation: A Brief History

Now that the Whitewater scandal is over ten years old, it may bear recapping. It began in March 1992, during the presidential campaign. The New York Times published an article linking the Clintons with the Whitewater Development Corporation and the failed Madison Guaranty Savings and Loan - and the story transformed a local Arkansas question into a national issue.

By January 1994, after a year in office, President Clinton became so exasperated with the Congressional and media attention to what he and his wife had, or had not, done that he initiated action. He directed Attorney General Janet Reno to appoint a special prosecutor in an effort to silence the criticism. (At the time, the independent counsel statute had expired, as it was designed to do, automatically, every five years.)

Reno appointed a highly respected Republican attorney, Robert Fiske, from New York City, to serve as a special prosecutor to investigate (and prosecute) any criminal wrongdoing. Six months later, after Fiske was well into his investigation, Congress passed the Independent Counsel Reauthorization Act of 1994.

Reno could have followed the precedent of her predecessor, and declined to file an application with the Special Division to appoint an independent counsel. However, she decided to do otherwise, and suggested the Special Division appoint Fiske. The Special Division, however, selected Kenneth Starr, a former colleague and judge from the District of Columbia Circuit. The rest-as they say--is history.

Ken Starr spent countless millions investigating Whitewater with one goal in mind: the criminal prosecution of the President of the United States (and possibly of the First Lady as well).

In truth, just as President Clinton had said in calling for the investigation, neither he nor Mrs. Clinton had engaged in any criminal conduct - only a bad investment. As a result, the final IC report on Whitewater - issued years later by Robert Ray (Starr's handpicked successor) - did not recommend prosecution of the Clintons.

Presumably, the Clintons' request for reimbursement is being evaluated by the Independent Counsel Julie Thomas (Robert Ray's handpicked successor) and Attorney General John Ashcroft at this time. Needless to say, these are not exactly friendly evaluators.

The ultimate decision whether, and for how much, to reimburse the Clintons will be made by the same court that selected the Independent Counsels to investigate the Clintons. This hybrid court, which has both judicial and administrative responsibilities, is known as the Special Division for Appointing Independent Counsels of the U.S. Court of Appeals for the District of Columbia.

The Special Division is composed of a panel of judges selected by Chief Justice Rehnquist for a term of two years. Rehnquist has made sure that this court has solid conservative credentials. The current appointees, Judges David B. Sentelle, Peter T. Fay and Richard D. Cudahy, are not known for their sympathy toward the Clintons.

The Special Division has tremendous discretion. The Independent Counsel law says legal fees "may" be awarded, and the legislative history makes clear that the Congress did not contemplate legal fee reimbursement as a matter of course. Rather, such reimbursement is to be made only in rare instances, and certainly not as a matter of standard procedure.

Probably in excess of three to four hundred people (maybe more) have had to hire an attorney because they became caught up in an Independent Counsel investigation, since the law was first enacted in 1978. Yet fewer than 60 have been reimbursed for these legal expenses under the provision of the Independent Counsel law that allows it. On the other hand, however, every former President to have applied for reimbursement has, so far, been repaid.

In reviewing the pattern of which claims are, and are not, reimbursed, I was struck by what seemed to me to be a rightward tilt. Granted, many with solid conservative credentials have been denied reimbursement, and I am not familiar with the politics of all those who've applied, but there does seem to be a pattern in favor of reimbursement of conservatives.

For instance, it would have been very easy to have denied the reimbursement claims of President Ronald Reagan and his Vice President, George Bush. Yet both were reimbursed - for their legal fees resulting from the Independent Counsel investigation by Lawrence Walsh of Iran-Contra.

If the Clintons are not similarly reimbursed, it will be one more reason why the Independent Counsel law should never be revived, or if it is, significantly amended. Envisioned as a tool for ensuring good government, the Independent Counsel law has sadly proved itself to be more of a political tool instead. The apparent political skew of reimbursements may be simply another aspect of that general failing.

Given the disposition of the Special Division, and the evaluators, the Clintons clearly have everything going against them. Yet they still may prevail and get their fees.

Although the Independent Counsel law has now lapsed, windup of the previous Independent Counsel work by Ken Starr has continued. First, Robert Ray was appointed to finish the work, and now Julie Thomas has taken over. Included among Thomas's tasks is the processing of claims for legal fees by those investigated but not indicted by her predecessors.

Congress added the provisions for reimbursement in 1982. It noted that it was only fair to level the playing field - given that the law pits the target (who may be the president, his vice president, and or a high level presidential appointee) against a federal prosecutor with unlimited resources and unlimited time to investigate.

Congress made a wise decision. The target not only faces a powerful adversary, but also finds his or her reputation - and freedom - directly at stake. Thus, he or she will have no choice but to defend, even if the federal prosecution's allegations are inaccurate or excessive.

The Clintons Were Unindicted Subjects Under The Law

The law provides for reimbursement of legal fees if a person can make three showings.

First, the claimant must show that he or she was the "subject" of an IC investigation. Second, the claimant must show that he or she was not indicted. Third, the target must show that he or she would not have incurred the legal fees "but for" the investigation prompted by the IC law.

Of course, these first two showings will not be a problem for the Clintons. Neither Mr. or Mrs. Clinton was indicted for anything in connection to this investigation, and both were clearly "subject to" the Independent Counsel's investigation of these matters. Indeed, one need only read the final Whitewater report to establish these facts.

The Potential "But For" Requirement Problem

What does the "but for" requirement mean? In 1991, the Special Division added this limiting feature to the law.

The Clintons' counsel should have no difficulty arguing, and persuasively showing, that they were subjected to a "more rigorous application" of the criminal law than other citizens. But he may have some difficultly persuading the Special Division that Whitewater/ Madison Guaranty involved matters "rarely prosecuted by the Department of Justice."

In fact, Whitewater/ Madison Guaranty was a scandal much like many others being investigated by the Department of Justice during the late 1980s and early 1990s. Literally hundreds of potentially corrupt Savings and Loan deals were being investigated and prosecuted by the FBI and U.S. Attorneys throughout the country at that time. Arguably, only the fact that the Clintons were the targets distinguishes the investigation from any normal Justice Department investigation.

The scope of the investigation, however, swept much more broadly - going far beyond what a normal investigation of Whitewater/Madison Guaranty would have looked like with defendants who were ordinary citizens. And thus the fees incurred by the Clintons far exceeded those that would have been incurred had the subjects not been the President and First Lady.

Moreover, given the ultimate lack of evidence against the Clintons - as Ray's Whitewater report showed - an investigation on the same facts but against ordinary citizens would likely have been quickly dropped, even assuming it would have been initiated in the first place. Again, had the Clintons been ordinary citizens, and the evidence assessed accordingly, their legal fees would likely have been far more modest.

Why The Clintons Should Win the "But For" Argument

Because the Clintons were not ordinary citizens when they were pursued by the IC, they have a strong argument that they fulfill the "but for" requirement almost by definition. This argument is based, in turn, on two incontrovertible facts: First, in the final Whitewater IC report, Robert Ray, accepted the legal conclusion that a President cannot be indicted while in office. Second, as a matter of Justice Department policy and practice that the IC must follow unless he states his exception, presidents are not investigated nor prosecuted.

These two facts together suggest that the Clintons' fees would never have been incurred absent an IC investigation - for the alternative, a Justice Department indictment, would never have been filed. It would have been both impossible in theory and unthinkable in practice. Even Kenneth Starr, who was not opposed to pushing the envelope, did not go so far as to indict the Clintons.

Ray may have outfoxed himself. As he boasted to The Washington Times, he had sought to get President Clinton to plea bargain over the Monica Lewinsky phase of the case while he was still President and thus "[a] maximum amount of pressure was applied to make sure that it happened before he left."

One form of pressure was Ray's request for formal opinions from the Justice Department's Office of Legal Counsel on two matters:

Second, could an Independent Counsel indict a sitting president, while still in office? Moss said no: there was a constitutional prohibition on doing so.

Robert Ray accepted these rulings. And Deputy Attorney General Eric Holder "picked up the phone and informed the White House," as Ray had hoped he would. Ray wanted Clinton to figure he had best crack at a deal before leaving office, while still protected by the bar against indicting a sitting President. He also wanted Clinton to know that after he left office, there would be no double jeopardy bar to an indictment.

Moss's opinions served both these purposes. But they may also have spoiled Ray's own efforts to foil the Clintons' fee reimbursement. (As early as December 21, 1999, William Safire reported in a New York Times column that Ray's offices would challenge the Clintons' claim for fees when it came.)

Here's the rub: If the opinion Moss gave Ray, and that Ray accepted, is correct, then a president is by definition a person who cannot be investigated by the Department of Justice. And if this is true, it is hardly debatable that President Clinton could not have had legal fees "but for" the Independent Counsel investigation - and that the "but for" component of his Whitewater fee request has been fulfilled as a matter of law.

Presidents Are Never Prosecuted By The Justice Department

Moss's formal opinion on behalf of the Justice Department that a sitting president cannot be indicted or, indeed, investigated reflects not only a view of the law, but a longstanding policy of the Department.

Back during my era at the White House, the question of investigating a sitting president came up during Watergate. When I first raised the issue in 1972 with Henry Petersen, the Assistant Attorney General in charge of the Criminal Division, he was quick to assure me that the Justice Department had a longstanding policy on this matter. Indeed, Petersen advised me that while Lyndon Johnson was president, the Justice Department had curtailed not fewer than two investigations that would have taken them right into the Oval Office where President Johnson was sitting.

The Department believed impeachment was the only Constitutional method to charge a president with criminal misconduct while in office. And the Attorney General works for the president - serving at his pleasure. So unless the president authorizes such a criminal investigation of himself, the Attorney General has a built-in conflict of interest undertaking such an investigation.

As Writ columnist and Yale Law professor Akhil Amar has testified and written, this position of the Justice Department was articulated before the U.S. Supreme Court as early as 1867 by Attorney General Stanbery. In 1973, it was formally restated in an opinion by Solicitor General Robert Bork in the "in response to Vice President Spiro Agnew's argument that both he and the President were immune from criminal prosecution. The Justice Department argued that the President was immune, but the Vice President was not."

The Independent Counsel must, pursuant to the statute creating the office, "comply with the written or other established policies of the Department of Justice respecting enforcement of the criminal laws" - except when "to do so would be inconsistent with the purpose" of the statute.

But the IC statute's very purpose is to address Nixonian situations in which indictment of the President by the Department of Justice is unlikely, against policy, or legally impossible. Accordingly, it is entirely consistent with the purpose of IC statute to recognize Justice Department policy against indicting the President. Indeed, to ignore this policy would put the statute's very purpose in question.

Put more simply, the need for an IC arises precisely because the President cannot be effectively indicted. Thus, it would be hypocritical and inconsistent to deny the President IC fees based on the unrealistic claim that he can.

Thus, former President Clinton is entitled to his attorneys' fees - and IC Ray as much as conceded the point when he accepted Moss's opinion that a sitting president cannot be indicted - and thus cannot be targeted "but for" an IC investigation.

The First Lady Should Be Treated the Same As The President

The President's unique legal situation, obviously, does not apply to a sitting First Lady, who has no formal government position, only informal responsibilities. But no First Lady has ever been indicted and whether or not that would be legally impossible, it would certainly be extremely bad Department of Justice policy - unless she murdered her husband! Accordingly, the analysis of the "but for" argument for now-Senator Clinton's claim should, for equitable and common sense reasons be much the same as for her husband's: Both should be held to have passed the "but for" test.

Holding otherwise would allow Presidents to be made vulnerable by attacks on their spouses - certainly not something the Department of Justice, or anyone else, should want to encourage. Moreover, in cases like the Clintons', it is reasonable for the President and First Lady to seek joint representation, and if that is the case, it may be difficult to separate much of the billing because of their interrelationship and the fact that, being married, they are in some senses a single financial entity.

Reasonableness of the Clintons' Fees

In addition to applying the "but for" requirement, when the Special Division evaluates a reimbursement request, it also is to evaluate the supporting documentation, the justification, and the reasonableness of the amount requested.

Will the Clintons' attorneys' fees be deemed reasonable? It is likely. In assessing the reasonableness of fees, the court will look at specific fact questions. They will ask: Are the hourly rates in line with the practice standards of the community? In previous rulings, the Special Division's three-judge panel has not balked at fees as high as $370 per hour.

Nor should they: Top Washington lawyers often bill at rates as high as $450 or $500 per hour, and the target of an IC investigation should be entitled to retain a top Washington lawyer, especially when he or she is the President or First Lady. David Kendall - a prudent and able practitioner - is just such a lawyer.

They will also ask: Are the fees reasonable in light of the work or actions undertaken - without excessive time spent on minor matters, duplicative research, and so on? The answer to this question can come only from a careful examination of the narrative explanations and time calculations accompanying the bills. At most, it will likely result in a modest reduction of the fee claim to account for work the Special Division thinks should have been done more quickly, or not at all.

If the Special Division is prudent, it will reimburse all or virtually all fees claimed; it is not good practice for courts to second-guess a lawyer's in-the-moment strategic and research decisions with the benefit of 20-20 hindsight.

The Special Division Should Order A Full Reimbursement

Given the fact that Presidents Reagan and Bush were reimbursed, it strikes me that the Special Division must treat the Clintons similarly. Only another political decision by the Special Division can deny the Clintons their legal fees.

Such a decision would be unfair and misguided. Justice Scalia pointed out presciently in his Morrison v. Olson dissent that the IC statute would inevitably be used in a partisan political manner. That has proven brutally true. Hopefully the Special Division will be the exception with this politically charged request for reimbursement.

John Dean, a FindLaw columnist, is a former Counsel to the President of the United States.

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