North (Bush Fee Application), In re

• Decision Date: 09 June 1995
• Docket Number: No. 86-6,86-6
• Parties: In re Oliver L. NORTH, et al. (BUSH FEE APPLICATION) . (Division for the Purpose of Appointing Independent Counsels Ethics in Government Act of 1978, as Amended)
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 184

59 F.3d 184

313 U.S.App.D.C. 188

In re Oliver L. NORTH, et al. (BUSH FEE APPLICATION)

Division No. 86-6.

United States Court of Appeals,

District of Columbia Circuit.

(Division for the Purpose of Appointing Independent Counsels

Ethics in Government Act of 1978, as Amended).

June 9, 1995.

Before: SENTELLE, Presiding, BUTZNER and FAY, Senior Circuit Judges.

ORDER

PER CURIAM.

This matter coming to be heard and being heard before the Special Division of the Court, upon the application of former President George H.W. Bush for reimbursement of attorneys' fees pursuant to section 593(f) of the Ethics in Government Act of 1978, as Amended, 28 U.S.C. Sec. 591 et seq. (1988 & Supp. V 1993), and it appearing to the Court for the reasons set forth more fully in the opinion filed contemporaneously herewith, that the motion is well taken, it is hereby

ORDERED, ADJUDGED, AND DECREED that the United States reimburse former President George H.W. Bush for attorneys' fees he incurred during the investigation by Independent Counsel Lawrence E. Walsh in the amount of $272,352.51, this 9th day of June, 1995.

Opinion for the Special Court filed PER CURIAM.

PER CURIAM:

Former President and Vice President George Herbert Walker Bush seeks reimbursement under section 593(f) of the Ethics in Government Act of 1978, as Amended, 28 U.S.C. Sec. 591 et seq. (1988 & Supp. V 1993) ("the Act") for attorneys' fees incurred by him between December 27, 1992, and November 30, 1993, as a result of the Iran/Contra Investigation conducted by Independent Counsel Lawrence E. Walsh. Under the applicable statute, former President Bush is entitled to reimbursement if he satisfies the provisions of 28 U.S.C. Sec. 593(f)(1) which allow reimbursement to one "who is the subject of an investigation conducted by an independent counsel pursuant to [the Act] ... if no indictment is brought against such individual pursuant to that investigation" for "reasonable attorneys' fees incurred by that individual during that investigation which would not have been incurred but for the requirements of [the Act]." Upon examination of the former President's petition and supporting exhibits, review of relevant precedent, and with the benefit of the comments from the Department of Justice, we conclude that President Bush is entitled to an award of reasonable attorneys' fees incurred. For various reasons, which we will discuss in detail below, we conclude that he has not carried his burden with respect to the full amount for which he seeks reimbursement and therefore our award is only partial.

I. BACKGROUND

On December 4, 1986, then Attorney General Edwin Meese filed an application with this Division requesting that we appoint an independent counsel "to investigate and if warranted to prosecute alleged violation of criminal laws by Lt. Col. Oliver North, and other United States government officials, or other individuals acting in concert with [them] in connection with the sale of shipments of military arms to Iran and the transfer or diversion of funds realized in connection with such sale or shipment." That investigation concluded with the filing of Independent Counsel Walsh's two volume Report on August 4, 1993, followed by the filing of his compilation of the responses to the Report on December 3, 1993. ¹

On December 24, 1992, as Walsh's undertaking began its seventh year, then President Bush pardoned former Secretary of Defense Caspar Weinberger, former Assistant Secretary of State Elliott Abrams; CIA Officers Duane Clarridge, Alan Fiers and Clair George; and former National Security Advisor Robert McFarlane. Independent Counsel Walsh, publicly declaring himself "gravely concerned" by Bush's decision to pardon those Iran/Contra figures, vowed to continue his investigation to "see where the facts lead." ABC News Nightline, December 24, 1992, Transcript No. 3024 at 6. On December 27, 1992, President Bush, believing himself to be a subject of the investigation, contacted and retained former Attorney General Griffin Bell and his law firm, King & Spalding ("K & S") to defend him in the investigation. When the investigation terminated without indictment against Bush having been returned, K & S filed a comment to the Report with exhibits. The comment and its exhibits were published along with the other comments to the Report on December 3, 1993. On March 9, 1994, Bell filed the present petition on behalf of former President Bush. On March 15, 1994, we forwarded a copy of the application to Attorney General Janet Reno pursuant to 28 U.S.C. Sec. 593(f) and requested a written evaluation of the request for attorneys' fees as provided for in that statute. On October 4, 1994, Bell filed inquiry with the Division as to the status of the fee petition. On October 11, we made inquiry to the Department of Justice as to the status of the Department's evaluation. On February 3, 1995, Attorney General Reno filed her evaluation. On February 16, 1995, Bush filed a response to the Attorney General's evaluation. Upon review of the application and its accompanying exhibits, the pleadings and the authorities offered in support thereof, and the Act, we have reached the conclusions set forth herein.

II. ANALYSIS

A. The Substantive Elements

As we noted above, the Act permits the reimbursement of fees only to "an individual who is the subject of an investigation conducted by an independent counsel...." 28 U.S.C. Sec. 593(f)(1). Thus, there are four elements which an applicant must demonstrate in order to establish his entitlement to a fee award:

(1) he is a "subject" of such an investigation;

(2) the fees were incurred "during" the investigation;

(3) to be reimbursable, the fees must be such as "would not have been incurred but for the requirements of the Act;" and

(4) the fees are "reasonable."

See In re North (Dutton Fee Application), 11 F.3d 1075 (D.C.Cir.1993) (per curiam) (internal brackets omitted). For the reasons set forth below, we conclude that the former President has met the first three, or "substantive" requirements, but has fallen short of establishing the reasonableness of a portion of the fees prayed.

1. Subject Status

As we have noted before, the Act awards fees only to "an individual who is the subject of an investigation conducted by an independent counsel," 28 U.S.C. Sec. 593(f)(1) (emphasis added), but does not define "subject." See Dutton, 11 F.3d at 1077. Because the intent of Congress was that fees were only to be awarded where the applicant had expended funds "reasonably related to a defense to such investigation," In re Donovan, 877 F.2d 982, 993 (D.C.Cir.1989) (per curiam), it was plain to us that the applicant had to be more than a mere witness. See, e.g., In re Olson, 884 F.2d 1415, 1427 (D.C.Cir.1989) (holding that the Act provides recovery only for those fees "rendered in asserting the merits of the subject's defense against the criminal charges being investigated."). On the other hand, the requirement that the successful applicant not have been indicted made it plain that the status of "subject" is something short of defendant. In Dutton, 11 F.3d at 1077, we found informative the definition of "subject" from the United States Attorneys' manual, Title 9, Chapter 11, section 9-11.150: "a 'subject' of an investigation is a person whose conduct is within the scope of the grand jury's investigation." In application to the fee award provision of the Act we narrowed that definition slightly, holding that a "subject" under the Act is

an individual ... whose conduct was within the scope of the grand jury investigation, in the sense that the grand jury was examining conduct of his in a way that would lead a reasonably counseled person at the time of incurring the fees to believe that there was a realistic possibility that he would become a defendant.

Id. at 1079. Here, it is beyond serious question--and the Department of Justice does not dispute--that the former President meets this definition.

Immediately following the former President's pardon of the six Iran/Contra figures, Independent Counsel Walsh publicly accused him of "misconduct" which he predicted would lead to "appropriate action." See ABC News Nightline, supra. More specifically, at the time President Bush acted to retain the law firm for his defense, media accounts reported that Walsh had said that "Bush ... is now 'the subject of our investigation.' " See, e.g., President to Disclose Everything, White House Disputes Walsh's Charges of Iran Coverup, THE WASHINGTON POST, Dec. 26, 1992, at A.1. The documentation to the former President's application supports a conclusion that K & S specifically asked Walsh to declare that President Bush was not a subject of the investigation and that Walsh declined to do so until the end of his investigation.

It is thus abundantly clear that the former President is "one who, at the time of incurring the fees involved in the application, knew that his conduct was within that scope [of the investigation] in such a fashion that the independent counsel might reasonably be expected to point the finger of accusation at him." Shultz, 8 F.3d at 850 (internal quotation marks and citations omitted). Accordingly, former President Bush has met his burden of proving that he was a subject of the investigation.

2. Fees Incurred During the Investigation

Former President Bush has fully carried his burden with respect to the element that to be reimbursable under section 593(f) his fees must be incurred during the investigation. Although a relatively small portion of the professional services were rendered after the filing of Walsh's two volume Report on August 4, 1993, we have repeatedly held that "since the Act provides that subjects of investigations may file 'comments and factual information [for inclusion in] ... an appendix to such final report,' " professional fees incurred in preparation of such comments are reimbursable under the Act. Donovan, 877 F.2d at 994 (q...