78 F.3d 1313 (8th Cir. 1996), 95-3268, United States v. Tucker

Docket Nº:95-3268.
Citation:78 F.3d 1313
Party Name:UNITED STATES of America, Appellant, v. Jim Guy TUCKER; William J. Marks, Sr.; John H. Haley, Appellees. United States Department of Justice; Sun Diamond Growers of California, Amicus Curiae.
Case Date:March 15, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1313

78 F.3d 1313 (8th Cir. 1996)

UNITED STATES of America, Appellant,

v.

Jim Guy TUCKER; William J. Marks, Sr.; John H. Haley, Appellees.

United States Department of Justice; Sun Diamond Growers of

California, Amicus Curiae.

No. 95-3268.

United States Court of Appeals, Eighth Circuit

March 15, 1996

Submitted Dec. 12, 1995.

Rehearing and Rehearing En Banc

Denied May 6, 1996,

Order Granting Stay May 17, 1996.

Page 1314

Appeal from the United States District Court for the Eastern District of Arkansas; Henry Woods, Judge.

Kenneth W. Starr, Little Rock, AR, argued, for appellant.

George B. Collins, Chicago, IL, argued (William H. Sutton and James J. Lessmeister, Little Rock, AR, on the brief), for appellee Jim Guy Tucker.

Robert E. Davis, Dallas, TX, argued (D. Randall Johnson, on the brief), for appellee William Marks.

Ted Boswell, Bryant, AR, argued (Curtis L. Bowman, Little Rock, AR, on the brief), for appellee John Haley.

Page 1315

Before BOWMAN, BEAM, and LOKEN, Circuit Judges.

BOWMAN, Circuit Judge.

The United States, represented by Independent Counsel Kenneth W. Starr, appeals from an order of the District Court dismissing an indictment brought against Jim Guy Tucker, William J. Marks, Sr., and John H. Haley. The court ruled that the Office of Independent Counsel (OIC) has no jurisdiction to prosecute the case. We reverse.

On August 5, 1994, the Division for the Purpose of Appointing Independent Counsels (commonly known and herein referred to as the Special Division), pursuant to a request from United States Attorney General Janet Reno, appointed Starr as Independent Counsel

to investigate to the maximum extent authorized by the Independent Counsel Reauthorization Act of 1994 whether any individuals or entities have committed a violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, relating in any way to James B. McDougal's, President William Jefferson Clinton's, or Mrs. Hillary Rodham Clinton's relationships with Madison Guaranty Savings & Loan Association, Whitewater Development Corporation, or Capital Management Services, Inc.

In re Madison Guar. Sav. & Loan Ass'n, Div. No. 94-1, Order at 1-2 (D.C.Cir.Sp.Div. Aug. 5, 1994) (emphasis added). 1 The order further conferred upon Starr "jurisdiction and authority to investigate other allegations or evidence of violation of any federal criminal law ... by any person or entity developed during the Independent Counsel's investigation referred to above and connected with or arising out of that investigation." Id. at 2 (emphasis added). The OIC also was empowered to investigate any obstruction of justice "in connection with any investigation of the matters described above." Id. Finally, the Special Division vested in the Independent Counsel "jurisdiction and authority to seek indictments and to prosecute any persons or entities involved in any of the matters described above, who are reasonably believed to have committed a violation of any federal criminal law arising out of such matters." Id. In sum, the court ordered that the Independent Counsel "shall have prosecutorial jurisdiction to fully investigate and prosecute the subject matter with respect to which the Attorney General requested the appointment of independent counsel, as hereinbefore set forth, and all matters and individuals whose acts may be related to that subject matter," including crimes "that may arise out of the above described matter." Id. at 3 (emphasis added).

Starr succeeded Robert B. Fiske, Jr., who had been appointed by the Attorney General in January 1994 pursuant to 28 C.F.R. § 600.1 (1993) (after the 1987 statutes reauthorizing appointment of independent counsel had expired, and before the OIC was reauthorized again in June 1994), both in the position and in his scope of authority as Independent Counsel. Fiske had been appointed, in turn, to replace a team of lawyers from the fraud section of the criminal division of the Justice Department, which had taken over the Madison Guaranty Savings & Loan Association investigation in November 1993 when Paula Casey, United States Attorney for the Eastern District of Arkansas, recused herself and her staff from the investigation and prosecution of matters concerning Madison Guaranty and Capital Management Services (CMS).

By letter dated September 2, 1994, the Acting Assistant Attorney General, Criminal Division, responding to Starr's August 31 request, referred to the OIC "investigative and prosecutorial jurisdiction over ... [w]hether any person committed any federal crime relating to the bankruptcy action entitled In Re: Landowners Management System, Inc., Tax Identification No 75-2001914, Debtor, United States Bankruptcy Court, Northern District of Texas, Case No. 787-70392 (Chapter 11)." The letter noted that the Attorney General had agreed that this matter, and another that was redacted from the record that is before us in this

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case, are related to the OIC's investigation. Letter from John C. Keeney, Acting Assistant Attorney General, Criminal Division, to Kenneth W. Starr (Sept. 2, 1994). The Independent Counsel sought referral, and the Attorney General granted it, pursuant to 28 U.S.C. § 594(e) (1994), which provides, as relevant here: "An independent counsel may ask the Attorney General or the division of the court to refer to the independent counsel matters related to the independent counsel's prosecutorial jurisdiction, and the Attorney General or the division of the court, as the case may be, may refer such matters." Out of what the Independent Counsel referred to during oral argument of this appeal as "an abundance of caution," the Independent Counsel in December 1994 also sought referral jurisdiction over the investigation and prosecution of federal criminal matters relating to the Landowners Management System (LMS) bankruptcy (among other matters) from the Special Division. On December 19, the Special Division issued an Order of Referral, a paragraph of which precisely tracks the Attorney General's September 2, 1994, referral to the OIC of all investigative and prosecutorial jurisdiction over federal criminal matters relating to the LMS bankruptcy.

The OIC's criminal investigation of matters relating to the LMS bankruptcy culminated on June 7, 1995, when a grand jury for the Eastern District of Arkansas issued the indictment that is the subject of this appeal. Governor of Arkansas Jim Guy Tucker, his Little Rock lawyer John H. Haley, and his San Francisco business partner William J. Marks, Sr., were variously charged with tax fraud; bankruptcy fraud; making false material statements for the purpose of influencing CMS, a federally licensed management company in Arkansas; and conspiracy to commit various of these acts. The specifics of the indictment are discussed in further detail as necessary to the discussion in Part II of this opinion.

The case was assigned to Judge Henry Woods, 2 who on September 5, 1995, held a hearing on the defendants' motions to dismiss. Within a few hours, the court issued a twenty-one-page order and opinion dismissing the indictment on the ground that the OIC lacked prosecutorial jurisdiction over this case.

I.

The Independent Counsel's first issue on appeal was addressed by the District Court somewhat summarily and with little legal analysis: whether the courts have the authority to review the Attorney General's decision under 28 U.S.C. § 594(e) to refer jurisdiction to the OIC. We review this question of law de novo and hold that the Attorney General's exercise of her discretion to refer matters to the OIC for investigation and prosecution is not reviewable.

An independent counsel, of course, is not an ordinary United States attorney. The counsel is appointed by the judiciary (the Special Division) at the behest of the Attorney General. 28 U.S.C. §§ 593(b)(1), 592(c)(1) (1994). The scope of counsel's prosecutorial jurisdiction is delineated by the Special Division. Id. § 593(b)(1). Counsel may be removed only by impeachment and conviction, or "by the personal action of the Attorney General and only for good cause, physical or mental disability ..., or any other condition that substantially impairs the performance of such independent counsel's duties." Id. § 596(a)(1) (1994). The independent counsel law specifically provides that the United States District Court for the District of Columbia has jurisdiction to review a removal decision of the Attorney General upon petition by the ousted independent counsel. Id. § 596(a)(3) (1994). The Special Division, or the independent counsel, may terminate an OIC when an investigation and any resulting prosecutions are substantially completed. Id. § 596(b) (1994). The independent counsel is subject to congressional oversight, id. § 595 (1994), and must make periodic reports to the Special Division, id. § 594(h) (1994). 3

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The unusual nature of the office notwithstanding, a duly appointed independent counsel is a prosecutor for the United States, and prosecutorial decisions of the nature here in question--who should be prosecuted and for what alleged crimes--have long been committed to the discretion of the prosecutor. 4 "In our criminal justice system, the Government retains 'broad discretion' as to whom to prosecute.... This broad discretion rests largely on the recognition that the decision to prosecute is particularly ill-suited to judicial review." Wayte v. United States, 470 U.S. 598, 607, 105 S.Ct. 1524, 1530, 84 L.Ed.2d 547 (1985) (quoting United States v. Goodwin, 457 U.S. 368, 380 n. 11, 102 S.Ct. 2485, 2492, 73 L.Ed.2d 74 (1982)); see also Massey v. Smith, 555 F.2d 1355, 1356 (8th Cir.1977) (per curiam) ("The authority to decide against whom federal indictments shall...

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