Paying the Price for Heightened Ethics
Scrutiny: Legal Defense Funds and Other
Ways That Government Officials Pay
Their Lawyers
Kathleen Clark*
This article takes a comprehensive look at a problem of growing significancefor government officials: how to pay the legalfees they incur when they
or their colleagues are investigatedfor wrongdoing. Since Watergate, an increasing number of government officials have had to hire attorneys when called
before grandjuries and legislative committees or subjected to internal administrative investigations. Their legalfees often outstrip their government salaries
or even their net worth. This article examines three existing mechanismsfor
government reimbursement of legal fees-Justice Department regulations, the
Independent Counsel statute, andprivate legislation-andidentifies the shortcomings of each. It then explores the legal status of legal defensefunds, which
top officials have used to raise millions of dollars to pay their legalfees. Finally, the article identifies several reforms that would treat government officials
much morefairlyandprotect against corruptinginfluences.
INTRODUCTION .......................................................................................
67
THE PROBLEM: GOVERNMENT OFFICIALS INCURRING MASSIVE
LEGAL FEES ........................................................
69
II. THE INADEQUACY OF GOVERNMENT REIMBURSEMENT PROGRAMS .....
72
A. Justice DepartmentRegulations .....................................................
72
B. Independent Counsel Statute ...........................................................
80
C. PrivateLegislation ..........................................................................
86
III. THE SELF-HELP OPTION: LEGAL DEFENSE FUNDS ................................
88
I.
Copyright © 1997 by Kathleen Clark and the Board of Trustees of the Leland Stanford Junior
University.
* Associate Professor of Law, Washington University School of Law.
[email protected]. Earlier versions of this article were presented at the Fifth International
Conference on Public Service Ethics in Brisbane, Australia, and to faculty workshops at the Emory
University, Indiana University, St. John's University, and Sydney University law schools. I am indebted to John Q. Barrett, Lester Brickman, Mark Davies, Neal Devins, Stephen Gillers, Marilyn
Glynn, Katy Harriger, Howard Harris, Richard Hasen, Arthur Jacobson, Daniel Keating, Susan
Koniak, Eric Lane, Ronald Levin, Ronald Mann, Ronald Noble, Alfred Novotne, and Gregory Walden for their comments on earlier drafts of this article, and to Kevin Cooney, Andrea House, Shelley Koren, and Lucy Yang for their help with research. Mary Clark and Reverand John O'Connell
provided invaluable assistance on this article.
HeinOnline -- 50 Stan. L. Rev. 65 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
A . Executive Branch ...........................................
90
1. The prohibitionon salarysupplementation ........................
90
2. Restrictions on gifts .......................................
94
B. Legislative Branch ..........................................
98
1. Regulations specific to legal defensefunds ................ 98
2. Donationsbased on an official's position ................ 102
IV. RECOMMENDED REFORMS ............................................
106
A. End Overreimbursement Under the Independent Counsel
Statute ..................................................
106
B. ProvideBetter Representation Optionsfor Witnesses and
Lower Level Officials.........................................
109
C. Improve the Regulation ofLegal Defense Funds........................
113
1. Promulgatean executive branch regulationspecific
to legal defensefunds ......................................
113
2. Tighten disclosure requirements ...............................
116
3. Prohibitthe solicitationof legal defensefund donations .........
118
D. Prohibitthe Use of CampaignFundsfor Noncampaign
RelatedLegal Expenses .......................................
122
CONCLUSION ............................................................
125
TABLE: AMOUNTS RECEIVED BY THE CLINTON LDF ...........................
89
TABLE I: TARGETS, DATES, AND COSTS OF INDEPENDENT
COUNSEL INVESTIGATIONS ..............................................
127
TABLE II: LEGAL EXPENSES REIMBURSED UNDER INDEPENDENT
COUNSEL STATUTE ...................................................
130
TABLE III: AMOUNTS RAISED BY CONGRESSIONAL LEGAL
DEFENSE FUNDS .................................................
135
TABLE IV: CAMPAIGN FUNDS USED FOR NONCAMPAIGN
RELATED LEGAL EXPENSES ..............................................
137
"What would you advise anyone coming into your job to do first?"
George Stephanopoulos, in his White House office, replies immediately, without a second's hesitation. "I would advise anyone who comes into my job to
make sure you have a lawyer on retainer from the day you walk in."
1. Judy Bachrach, They Who Serve and Suffer, VANITY FAIR, Dec. 1996, at 128, 141; see also
Daniel Wise, Ickes Looks to Life After the White House, N.Y. L.J., Feb. 24, 1997, at 1. Wise writes:
"It's gotten so you have to come to Washington with an accountant and a lawyer in tow,"
said [Harold M.] Ickes, [President Clinton's former deputy chief of staff,] who already numbers his appearances before congressional committees and grand juries at about a dozen. By
the time he is done, he estimates, he will be out of pocket close to a year's salary in legal expenses. As deputy chief he earned $125,000.
Wise, supra,at 1.
HeinOnline -- 50 Stan. L. Rev. 66 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
INTRODUCTION
In recent years, persons running for or holding government office have
increasingly used charges of illegal and unethical conduct against their opponents, and these charges have proven to be potent weapons in political
battles. 2 As has been discussed elsewhere, the increasing attention to government ethics has resulted in the downfall of numerous government officials
who have committed wrongdoing. 3 But another result is that an increasing
number of government officials who have done nothing illegal have been
called before grand juries and congressional committees and have been subjected to other internal administrative investigations to answer questions
about their alleged participation in or witnessing of the wrongdoing of others. 4 The government has poured significant resources into the investigation
of wrongdoing. Congress has set up special committees to conduct sometimes lengthy hearings, and independent counsels ("ICs") have been quite
expansive and expensive in conducting their investigations. 5 The political
stakes are high in these investigations, and the government officials involved
have felt the need to hire attorneys to advise them, even if they have not been
charged with any wrongdoing. 6 Officials have racked up tens of thousands
2. For an example of how ethics charges are used for political purposes, see Damon Chappie
& Juliet Eilperin, Ethics Tit-for-Tat Ensnares Gephardt & Gingrich: Sources Say Republicans
Drafted Measure Callingfor Outside Counsel in Gephardt Case, ROLL CALL, July 1, 1996, available in LEXIS, News Library, Roilcl File (describing "a pattern of attempted retaliation on ethics
matters," including a "retaliation plan by several GOP Members and staff' who "threatened House
Minority Leader Richard Gephardt (D-Mo) with a measure that would have sent ethics charges
against him to an outside counsel unless a Democratic drive to broaden the scope of an investigation of House Speaker Newt Gingrich (R-Ga) was dropped"). See generally BENJAMIN GINSBERG
& MARTIN SHEFTER, POLITICS BY OTHER MEANS: THE DECLINING IMPORTANCE OF ELECTIONS IN
AMERICA (1990) (describing the increased use of congressional investigations and judicial proceedings, rather than electoral politics, as forums for political struggles).
3. See, e.g., Howard Kurtz, The Politics of Scandal, WASH. POST MAG., Sept. 22, 1991, at
Wll, WlI.
4. See Stuart Taylor, Jr., Brother, Can You Spare Some Fees?, LEGAL TIMES, Mar. 18, 1996,
at 23. Taylor writes:
[The need for legal defense funds is] a consequence of our current culture of hair-trigger resort
to criminal investigations as the ultimate weapon in partisan warfare, and of the vast resources
available to [the] independent counsel to turn over every rock in search of evidence of crime.
Government service... now carries a significant risk of being hauled before congressional
committees and grand juries, grilled under oath, and perhaps even accused of pejury or other
crimes.
Id.
5. See Timothy S. Robinson, Legal Cost Problem Growsfor Officials, WASH. POST, Apr. 19,
1980, at A8 ("[M]embers of the Carter administration have encountered what appears to be a
growing problem for persons either accepting political jobs or visibly attaching themselves to an incumbent administration: The high cost of legal fees in a post-Watergate climate requiring intense
investigations of public figures.").
6. For example, Joseph diGenova spent three years and $2.2 million investigating whether any
Bush White House or State Department officials improperly examined Bill Clinton's passport rec-
HeinOnline -- 50 Stan. L. Rev. 67 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
of dollars-and, in some cases, hundreds of thousands of dollars-in legal
7
bills to defend against specific charges and to defend their reputations.
Theoretically, there are a number of government reimbursement options
available to these employees, but this article will show that these options are
often not available in practice. Many employees, especially elected officials,
therefore resort to setting up legal defense funds to accept donations to pay
for their legal expenses.
Until recently, no scholar has taken a comprehensive look at these government reimbursement programs and legal defense funds ("LDFs").8 Yet
the regulations in this area have produced absurd results. Here are a few examples:
(1)Under the IC statute, the government has reimbursed top government officials hundreds of thousands of dollars to pay their lawyers up to $370 per
hour-a rate much higher than the government awards in other contexts. Yet
lower level officials caught up in such probes have had no legal recourse for
ords. See Table I (listing the amounts spent by each of the ICs appointed since the passage of the
ICstatute).
7. Three of the officials investigated by diGenova-Steven Berry, Janet Mullins, and Margaret Tutweiler-together racked up more than $750,000 in legal fees. See Table II. After being
cleared by diGenova, Tutweiler stated, "No one can match the federal government's deep pockets in
these cases." Ann Devroy & Ruth Marcus, Clinton Aides Setting Up Defense Funds to Pay Lawyers'Bills, WASH. POST, Feb. 29, 1996, at A21; see also Donald Kaul, Clinton's Nominees Should
Confess up Front, ARIZ. REPUBLIC, Jan. 22, 1995, at E3 (criticizing the massive spending by ICs
and noting that "the target of the investigation [is] driven to the brink of financial ruin and beyond
defending himself').
Government officials have felt the need to defend themselves in the press, as well as in the
court. See, e.g., David Segal, Law's Entirely New Spin: Former Clinton Counsel Exemplifies an
Emphasis on PR, WASH. POST, Nov. 19, 1996, at C1 ("Some of D.C.'s best-known white-collar
litigators... say that using soundbites to fight Washington's increasingly leak-prone prosecutors
and independent counsels has become part of theirjobs."). When then White House Counsel Edwin
Meese was investigated by an IC, his lawyers spent 10-15% of their time dealing with the news
media. See Loretta Tofani, Meese Attorney Defends Feesfor Media Contacts, WASH. POST, Feb.
27, 1985, at A4. The special court that administers the reimbursement of attorneys' fees under the
IC statute refused to reimburse Meese and other officials for their lawyers' activities with the press.
See In re Meese, 907 F.2d 1192, 1203 (D.C. Cir. 1990); In re Donovan, 877 F.2d 982, 994 (D.C.
Cir. 1989).
8. Two student notes have examined parts of this issue. One of these provides a particularly
useful compilation of data on Congressional LDFs, but limits its discussion of executive branch
LDFs to those for the President or Vice President. See generally Johnny Carter, Note, To Provide
for the Legal Defense: Legal Defense Funds andFederalEthics Law, 74 TEX. L. REv. 147 (1995).
The other criticizes a decision by the special court that administers the IC statute. See generally
Mark F. Schultz, Attorneys'Fees Under the Independent CounselAct: How the Grinch Stole Lyn
Nofziger's Wallet, 60 GEO. WASH. L. REV. 1311 (1992). Another article provides an insightful but
brief analysis of the reimbursement options under the IC statute and the Justice Department regulation. See generally Sunil H. Mansukhani, Whitewater: Government Officials Paddlingin a River of
Red Ink, CRIM. L. BULL. 99 (1996). A chapter in a book by a former associate counsel to President
Bush discusses the legal issues presented by President Clinton's legal defense fund. See GREGORY
S. WALDEN, ON BEST BEHAVIOR: THE CLINTON ADMINISTRATION AND ETHICS IN GOVERNMENT
314-27 (1996).
HeinOnline -- 50 Stan. L. Rev. 68 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
reimbursement. 9
(2) Executive branch officials can easily avoid application of the solicitation
ban, gift restriction, and disclosure requirement as long as a third party, rather
than the official, sets up a legal defense fund for the official's benefit.10
(3) For members of Congress, legal defense funds have provided an end run
around the strict contribution limits set by federal election law. During a senator's six-year term, a donor may give only $2000 to the senator's campaign, but
they can give $60,000 to that senator's legal defense fund. I I
Part I of this article documents how government officials have faced
massive legal expenses that far outstrip their salary and savings. Part II ex-
amines several mechanisms through which officials may receive legal representation or reimbursement for legal expenses from the government and dis-
cusses the limitations on their availability. Part III examines the current legal
status of LDFs. Part IV makes several recommendations on the regulatory
reforms needed to address these problems.
I. THE PROBLEM: GOVERNMENT OFFICIALS INCURRING MASSIVE LEGAL
FEES
When a government official is accused of wrongdoing and investigated,
it is obvious that she needs to obtain legal advice. In addition, during the investigation, dozens of employees who work with the accused wrongdoer are
often repeatedly questioned by prosecutors and other investigators. These
employees often feel the need to retain legal counsel in responding to such
questions in order to ensure that they will not later come under suspicion for
obstruction of justice.12 The resulting legal fees that some government employees face can outstrip both their government salary 13 and their net
9. See text accompanying notes 212-223 infra.
10. See note 148 infra and accompanying text.
11. See text accompanying notes 177-178 infra.
12. Eighty Clinton administration officials have had to hire lawyers in connection with
Whitewater or related probes. See David Eisenstadt, Bill's Vow May Cost Him $4M, N.Y. DAILY
NEWS, Aug. 28, 1996, at 10.
13. In the course of the investigation of Representative Dan Rostenkowski for embezzlement,
some of Rostenkowski's aides incurred legal fees exceeding their yearly salary. See Ray Gibson,
Rostenkowski Fund Is Payingfor His Defense, CHI. TRIB., Feb. 4, 1994, at 1 (noting that Virginia
Fletcher, Rostenkowski's administrative assistant, had a salary of $90,000 and legal bills of
$141,000); Chuck Neubauer & Ray Long, Rosty Legal Bills up to $153,000: 2nd Aide's Lawyers
Paidby Campaign Fund, CHI. SuN-TIMEs, Feb. 2, 1993, at 3 (reporting that Mary A. Lesinski, a
legislative aide in Rostenkowski's congressional office, had a salary of about $29,000 and legal expenses in excess of $36,000).
White House aides have faced the same difficulty in the wake of the Whitewater investigation.
For example, Margaret Williams, Hillary Clinton's former chief of staff, earned $125,000 per year,
but has incurred almost $250,000 in legal fees. See Bob Dart, The Whitewater Case Legal Tabs
Add to Pile of Woes: Clintons, Close Aides May Be Stuck with Fees, ATLANTA CONST., Mar. 10,
1994, at A10; Devroy & Marcus, supra note 7, at A21. For an extensive discussion of this phe-
HeinOnline -- 50 Stan. L. Rev. 69 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
worth.14
There are several reasons why these legal fees are so high. First, officials often face multiple investigations regarding the same allegations: by
the Justice Department, by an IC, and by congressional committees. 15 Second, in responding to investigations that are so easily politicized, government
officials naturally want to retain white collar criminal defense lawyers who
have expertise in dealing with politics. These lawyers are generally able to
command high fees.' 6 President and Mrs. Clinton, for example, have hired
nomenon, see generally Judy Bachrach, supra note I (describing the devastating effects of legal
fees on lesser officials in the White House). See also Edward Felsenthal, Trivial Pursuit:How the
Scandal Mill Ran Chief of the GSA out of Washington, WALL ST.J., Aug. 4, 1997, at Al ("By the
time [former head of the General Services Agency Roger] Johnson was cleared this spring, he
had ... racked up $312,500 in legal bills and other professional fees connected to the investigation.").
14. See Ann Reilly Dowd, Clinton's Not-So-Excellent Adventure: He and His Family Are
Nearly Broke, MONEY, Feb. 1996, at 18, 18 (reporting that the Clintons' "net worth is approaching
zero" as their approximately $2 million in investment assets are outstripped by Whitewater-and
Paula Jones-related legal fees); Guy Gugliotta, Henry Cisneros Goes for Broke, WASH. POST
MAG., Oct. 8, 1995, at W18, W20 ("[Secretary of Housing and Urban Development Hem-y] Cisneros has gone into debt to finance his defense" of an IC probe and "says he needs at least 'one
more round of borrowing' to make it to the end of Clinton's presidential term."); John F. Harris,
Clinton Defends Ethics Record, Decries Climate of Suspicion, WASH. POST, Mar. 4, 1995, at A10
(quoting former Independent Counsel Joseph diGenova as stating, "How can we expect people to
give up lucrative private opportunities [to enter government service] ...and then basically bankrupt
them with [legal bills]?"); Robinson, supra note 5, at A8 (noting that Hamilton Jordan, a former
Carter White House aide who had to defend himself against an IC investigation for alleged drug
use, reported negative net worth in 1979 because of his legal fees). In addition to these individuals,
the Democratic National Committee has recently faced legal fees that outstrip its resources. See
Allan C. Miller, DNC Raises $19 Million but Is Still in Debt, Report Says, L.A. TIMES, Aug. 1,
1997, at Al8.
15. But see Meg Greenfield, The Packwood Stone: It's a Key to Deciphering Why We're So
Unhappy with the Folks in Charge, WASH. POST, Aug. 21, 1995, at A21 (discussing the nearly
three-year-long investigation of Sen. Bob Packwood and noting that politicians sometimes use
"strung-out, diversionary, blocking techniques... [with the] evident purpose of simply prolonging
and complicating and ultimately preventing any resolution at all"); Daniel Klaidman, Lawyers,
Funds, and Money: Clintons Closing In On Terms for Legal Payments, LEGAL TIMES, June 20,
1994, at 4 ("[Clinton lawyer Robert] Bennett is said to be mounting a scorched-earth defense of the
president in the Jones case. He has assembled a platoon of expensive Skadden litigators that includes four partners and three associates.").
16. See In re Donovan, 877 F.2d 982, 993 n.21 (D.C. Cir. 1989) ("[Labor Secretary Raymond] Donovan, due to the very serious nature of the charges against him, reasonably retained, and
paid, firms of the caliber of Pierson, Ball and Kaye, Scholer... i.e., attorneys of the highest competence in their practice area with commensurate hourly rates."); Lloyd Grove, The PartiesPolitic:
Republicans Come to the Defense of Cap Weinberger, WASH. POST, Sept. 24, 1992, at C1 (referring
to Iran-Contra defendant Casper Weinberger's "astronomically priced defense lawyers"); Klaidman,
supra note 15, at 4 (reporting that David Kendall, the lawyer representing the Clintons in the
Whitewater investigation, "reportedly charges between $300 and $400 per hour, while [Robert]
Bennett [their lawyer in the Paula Jones suit] commands $475"); Glenn R. Simpson, Many Aides
Have Pro-Bono Lawyers in Leak Probe, but Very Few Make Public Disclosure, ROLL CALL, Feb.
24, 1992, available in LEXIS, News Library, Rollel File ("[T]he Washington white-collar [law]
firms that perform [these] services are very expensive.").
HeinOnline -- 50 Stan. L. Rev. 70 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
some of the most expensive legal talent in Washington, D.C.,'17 and have incurred millions of dollars in legal fees, which far outstrip their savings and
government salary. 18 Dozens of other Clinton White House officials have
had to "scramble to pay massive legal fees stemming from Whitewater and
other investigations.' 9
A former IC has stated that "lawyers must be hired, even by the most insignificant witnesses. The dire consequences of merely misspeaking, which
could result in a false-statement charge, are high, given the [IC's] vast powers."'20 Many others have noted that IC investigations often become politically charged. In such an atmosphere, it is not surprising that even "mere
2
witnesses" feel the need for someone to look out for their best interests. '
Although these officials may want to consult their own personal attorneys
under these circumstances, the IC statute does not authorize reimbursement
of their attorneys' fees, and these officials cannot rely on the Justice Department to provide them with representation.
Some government officials who could not promptly pay their legal fees
have delayed payment for years. 22 Law firms may forbear on these officials'
debts, 23 as they do with other clients. 24 But such forbearance raises two ethi17. See John M. Broder, Aides Ready Plans to Create Clinton Legal Defense Fund, L.A.
TIMES, May 10, 1994, at A12 ("Clinton faces hundreds of thousands of dollars in bills
from two of
the nation's most expensive law firms, Williams & Connolly of Washington and Skadden, Arps,
Slate, Meagher & Flom of New York....").
18. In 1994, the Clintons' net worth was estimated at about $1 million; their 1993 combined
income was $293,000. See PresidentMight Seek Donationsfor Legal Fees, SEATTLE TIMES, May
10, 1994, at A3 [hereinafter PresidentMight Seek Donations]. Their legal expenses have greatly
exceeded this. See Michael Kranish, Legal Bills Outpacing Clinton Fund: Fees Totaling $2Million
UnpaidAs Whitewater InquiryPersists,BOSTON GLOBE, Dec. 9, 1996, at Al (discussing the ability
of a President to earn large amounts of money after leaving office through book contracts and
speaking fees).
19. Devroy & Marcus,supra note 7, at A21.
20. Joseph E. diGenova, Investigatedto Death, N.Y. TIMES, Dec. 5, 1995, at A25. DiGenova
was appointed the IC to investigate the Clinton passport controversy. See id.
21. See Daniel Klaidman, The High Cost of Turning Back Whitewater's Tide: Cash-Strapped
Officials Cope with DauntingLegal Bills, LEGAL TIMES, Mar. 14, 1994, at 1 ("[I]t is a sign of these
ethically sensitive times that even tangential players with little or no criminal exposure feel compelled to gear up fill-blown, top-dollar defenses-and turn reflexively to Washington's elite, whitecollar bar at the first sign of trouble."); Taylor, supra note 4, at 23 ("Amid the politically tinged investigations of Whitewater and other Clinton scandals, even mere witnesses cannot safely submit to
questioning without legal representation."). But see Dart,supra note 13, at A10 ("The question is
why people on the periphery of the investigation would have to have counsel anyway.... If I were
called to testify before a grand jury about what happened in a meeting that I attended, I'd just go
and tell what I knew." (quoting law professor John Banzhaf)).
22. See, e.g., Lobbyists Pay Tribute with Millions for (Legal) Defense, CHI. TRIB., June 4,
1994, at I ("Sen. Dave Durenberger... was sued in 1992 by partners of his former law firm when
he fell behind in payments.').
23. Senator Tom Harkin, who was chair of an agriculture subcommittee and very active on
agriculture issues generally, was about two years late in paying off a $162,000 debt to Akin, Gump,
Strauss, Hauer & Feld, a law firm that represents agribusiness clients, including Archer Daniels
HeinOnline -- 50 Stan. L. Rev. 71 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
cal issues for government officials: whether the official is receiving special
treatment because of her government position25 and whether such forbearance constitutes a gift and thus should be subject to the restrictions of the gift
26
statute and its implementing regulations.
Given the size of the legal fees involved, it is not surprising that these
government officials are looking beyond their own savings accounts to pay
for their lawyers' fees. The next part examines three government reimbursement programs, while the part following that examines a nongovernmental option: legal defense funds.
II. THE INADEQUACY OF GOVERNMENT REIMBURSEMENT PROGRAMS
The previous part showed that many government employees incur legal
fees greater than their government salary and personal savings. This part examines three mechanisms through which officials are sometimes able to obtain government reimbursement for their legal fees. First, in some cases, the
Justice Department provides representation for an employee who is either
charged with wrongdoing or asked to testify about employment-related conduct. Second, employees who are investigated by an IC but not indicted may
obtain reimbursement for some of their legal fees. Third, Congress occasionally passes special legislation to reimburse particular government officials for their legal expenses.
A.
JusticeDepartmentRegulations
Under certain circumstances, the Justice Department will provide legal
representation to an employee charged with civil wrongdoing. If the emMidland. See Glenn R. Simpson, Harkin,At Last, Retires Legal Debt with Help from Lobbyist Donors, ROLL CALL, Jan. 16, 1992, availablein LEXIS, News Library, Rollcl File; see also Glenn R.
Simpson, Haofield Sets Up Legal Expense TrustFund, IndicatingEthics PanelProbeIs Underway,
ROLL CALL, Dec. 19, 1991, availablein LEXIS, News Library, Rollcl File.
24. See Barbara Lyne, More Fee Disputes Going to Court, MANHATrAN LAW., June 21,
1988, at 1 ("[M]any [law firm] partners say they would probably not go after unpaid fees of
$25,000 or less.").
25. See Representation of White House Employees, 40p. Off. Legal Counsel 749, 749 (1980)
(discouraging White House employees from accepting donated or discounted legal services in part
"because of the appearance that the service has been offered because of their employment at the
White House").
26. See 5 C.F.R. § 2635.203(b) (1996) (defining "gift" to include a "forbearance"); see also
Klaidman, supra note 15, at 17 ("The lawyers could ... allow the Clintons to pay at a leisurely
pace. But that also might be interpreted as a gift and raise questions about what the firm or its clients might expect in return."); President Might Seek Donations, supra note 18, at A3 ("[Ellen
Miller of the Center for Responsive Politics] said that putting off payment of [a lawyer's] bill...
would raise ethical questions [if the] firm does some government lobbying. Being beholden to a
lobbying law firm... is as questionable as big corporate or individual donors paying the president's
legal fees.").
HeinOnline -- 50 Stan. L. Rev. 72 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
ployee is sued in her official capacity, the Justice Department will always
provide legal representation. 27 If the employee is sued in her individual capacity, the Justice Department can get involved in one of two ways. First,
the Attorney General may move to have the United States substituted as defendant and the employee dismissed as a defendant if the Attorney General
certifies that the claim arose out of acts that were within the scope of the employee's federal employment. 28 Second, the Attorney General may provide
legal representation to the employee if two criteria are met: first, that the
conduct in question was within the scope of the employee's federal employment, and second, that such representation is in the interest of the United
29
States.
When the government provides legal representation, it usually does so by
assigning a Justice Department lawyer to the case. But if a conflict of interest prevents a Justice Department lawyer from doing the job, the government
may hire a private lawyer.3 0 Such conflicts occur when each of several different government employees needs separate counsel because of the employees' different legal or factual situations 31 or when the Justice Department is
32
considering but has not made a decision regarding criminal prosecution.
For example, when the survivors of the 1992 Ruby Ridge shootout sued FBI
27. See 28 C.F.R. § 50.15(a)(8)(I) (1996) ("I]n actions where the United States... or any of-
ficer thereof in his official capacity is also named as a defendant, the Department of Justice is required by law to represent the United States and/or such.., officer ....); see also Konigsberg v.
Hunter, 308 F. Supp. 1361, 1363 (W.D. Mo. 1970) ("It is the duty of the [Justice Department] to
represent federal officials in suits arising out of their employment ....).
28. See 28 U.S.C. § 2679(d)(1) (1994) (This provision was part of the Federal Employees Liability Reform and Tort Compensation Act of 1988, Pub. L. No. 100-694, 102 Stat. 4564, commonly known as the Westfall Act.); see also Gutierrez de Martinez v. Lamagno, 115 S.Ct. 2227,
2229 (1995).
29. See 28 C.F.R. § 50.15(a)(2); see also Indemnification of Environmental Protection
Agency Employees, 13 Op. Off. Legal Counsel 54 (1989) ("[I]t has long been the policy of the federal government to defend employees who are sued in their individual capacity for actions taken
within their official responsibilities."). For more extensive treatment of government officials being
sued in their individual capacities, see, for example, George A. Bermann, IntegratingGovernmental
and Officer Tort Liability, 77 COLUM. L. REv. 1175 (1977); Ronald A. Cass, Black Robes and
Blacker Boxes: The ChangingFocus ofAdministrative Law, 1984 DuKE L.J. 422 (reviewing PETER
H. SCHUCK, SUING GOVERNMENT (1983)); William P. Kratzke, Some Recommendations Concerning Tort Liability of Government and Its Employees for Torts and Constitutional Torts, 9 ADMIN.
L.J. AM. U. 1105, 1154-77 (1996).
30. If a private lawyer is used, the Justice Department may either retain the lawyer and pay
him directly or provide reimbursement to the employee for the legal fees incurred. See 28 C.F.R.
§§ 50.15(a)(4), 50.16.
31. See id. § 50.15(a)(10); see also Representation of Government Employees in Cases Where
Their Interests Diverge from Those of the United States, 4 Op. Off. Legal Counsel 528, 531 (1980).
For example, when eight FBI snipers were called to testify at a congressional hearing about their
participation in the 1992 shootout at Ruby Ridge, the Justice Department provided each with his
own private counsel, including some of the most prominent lawyers in Washington. See Hired
Guns, LEGAL TIMES, Sept. 18, 1995, at 3.
32. See 28 C.F.R. § 50.15(a)(7).
HeinOnline -- 50 Stan. L. Rev. 73 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
officials, the Justice Department initially paid private lawyers to represent
the officials in the civil suit and at congressional hearings. 33 But when the
Justice Department initiated a criminal investigation of FBI Deputy Director
34
Larry Potts' activities, it stopped paying for his lawyer in the civil suit.
Similarly, when the Justice Department started investigating alleged wrongdoing at the Environmental Protection Agency's ("EPA") Superfund program, it stopped representing EPA Administrator Anne Burford in congres35
sional hearings.
For the employee in need of legal counsel, there are several problems
with relying on government-provided representation. First, as a practical
matter, the Justice Department has often delayed making any decision on
representation in politically charged situations, leaving the employee to incur
a large debt to her lawyer pending the Justice Department's decision on reimbursement.3 6 In the last three years, twenty-three White House employees
have filed requests for representation or reimbursement of the legal fees they
have incurred in connection with the Whitewater investigation, but the Jus37
tice Department has agreed to only four of these requests thus far.
33. See Hired Guns, supra note 31, at 3.
34. See Daniel Klaidman, The Specter ofRuby Ridge Looms over Justice,LEGAL TIMES, Aug.
21, 1995, at 2.
35. See David Hoffinan & Mary Thornton, Justice Department to Assist Burford in Executive
Privilege Battle, WASH. POST, Mar. 8,1983, at A2. The government later reimbursed Burford for
her private legal fees in connection with those hearings. See Howard Kurtz, JusticeDept. "Blackmailing Me, "Burford Says: FormerEPA ChiefSays She SurrenderedRight to Sue So U.S. Would
Pay Lawyers'Bills, WASH. POST, Feb. 12, 1986, at A3. For further discussion of Burford's representation, see text accompanying notes 59-68 infra.
36. Neither the Justice Department nor the Office of Government Ethics ("OGE") has provided ethical guidance for this increasingly common situation. Although the Clintons have collected substantial sums through their legal defense fund and insurance coverage, they currently owe
over a million dollars to their law firms, two of which-Skadden, Arps, Slate, Meagher & Flom and
Williams & Connolly-perform a significant amount of work dealing with the federal government
on behalf of their other clients. For an analysis of how debt forbearance runs the risk of circumventing the protections of the campaign finance laws, see Stephanie Mencimer, Forever a Loan:
CampaignIOUs Skirt Election Law, LEGAL TIMES, July 10, 1995, at 2.
37. See Terry Lemons, Lindsey Hopes to Tap Legal-Bill Fund: Clinton CounselFaces Inquiry
Costs, ARK. DEMOCRAT-GAZETTE, Sept. 14, 1996, at 8A. Similarly, Anne Burford waited nearly
three years for the government to rule on her request for reimbursement of more than $200,000 in
legal fees, a request which became a "political hot potato." See W. John Moore, Citing Meese
Pledge, BurfordSeeks Payment of CounselFees, LEGAL TIMES, Mar. 18, 1985, at 1; see also Kurtz,
supra note 35, at A3. During that delay, Burford paid her law firm over $20,000 just in interest on
those fees. See ANNE BURFORD & JOHN GREENYA, ARE YOU TOUGH ENOUGH? 271 (1986).
In the past, the Justice Department reimbursed White House aides questioned by Iran-Contra
Independent Counsel Lawrence E. Walsh. See Ruth Marcus, Clinton Defense FundLimit May Go
to $1,000: Other White House Officials Seek Reimbursementfor Legal Expensesfrom JusticeDepartment,WASH. POST, June 24, 1994, at A17; cf Castillo v. United States, 707 F.2d 422, 422-25
(9th Cir. 1983) (affirming district court's grant of summary judgment to government when sued by
federal employee-doctor for reimbursement of private attorney fees he incurred in defending civil
suit that arose within the scope of his federal employment).
HeinOnline -- 50 Stan. L. Rev. 74 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
The second problem is that representation is available only under limited
circumstances. One of the prerequisites for government-provided legal
counsel-that the conduct at issue was within the scope of employment 38-is
not particularly controversial. Where the conduct occurred outside the scope
of employment, such as where an employee's neighbor is injured by a tree
limb falling from the employee's property, the employee clearly should not
expect the government to represent her in this purely private matter. 39 But
the other prerequisite-that the representation be in the interest of the United
States-is more problematic.
On its face, this second prerequisite is rather vague and could theoretically be met in a wide range of circumstances. For example, one could argue
that providing representation would always be in the interest of the United
States because it ensures a fair and accurate determination of the facts, pro40
tects employees' rights, and promotes good morale among federal workers.
Yet interpretation of this provision has been left to the discretion of Attorneys General, 4 1 who, for the most part, have construed it narrowly. Tradi38. See 28 C.F.R. § 50.15(a)(2) (1996).
39. In fact, it is not at all clear that the executive branch would even have the authority to provide such legal representation. Congress has authorized the Attorney General to litigate those cases
in which the United States "is interested." Exec. Order No. 12,146, reprinted as amended in 28
U.S.C. §§ 509, 516-517 (1994). In purely private litigation, where the United States does not have
an interest, providing representation would be beyond the Attorney General's statutory authorization. See 51 Comp. Gen. 701, 702 (1972) (holding that a federal agency may not pay an employee's bar fees even though such fees are necessary for the employee to perform official duties);
see also Representation of Government Employees in Cases Where Their Interests Diverge from
Those of the United States, 4Op. Off. Legal Counsel 528, 533 (1980).
40. See 55 Comp. Gen. 408, 412 (1975) ("The Government would face obvious morale problems if it failed to defend employees carrying out official policy." (quoting Letter from Justice Department, July 25, 1975)); see also 58 Comp. Gen. 613, 615-16 (1979) ("[I]f agency employees
knew that they would have to bear their own representation expenses in actions against them resulting from the performance of their jobs, they would discharge their duties and exercise their discretionary functions less vigorously.'). The Justice Department's Office of Legal Counsel also
notes that
Congress could conclude that it would serve the larger interests of the United States to finance
legal claims against the United States. Congress could, for example, establish a legal aid society for government employees for the purpose among others of supporting a legal assault on
the doctrine of sovereign immunity. But if it would be possible to make a legislative choice in
favor of these claimants, it would nonetheless be very difficult, in our view, to conclude that
that sort of choice is within the scope of the Attorney General's implied authority under the
statutes that define his office.
Representation of Government Employees in Cases Where Their Interests Diverge from Those of
the United States, 4 Op. Off. Legal Counsel at 533.
41. On the issue of whether a court may review the Attorney General's decision, compare
Falkowski v. EEOC, 764 F.2d 907, 909 (D.C. Cir. 1985) (suggesting a strong presumption of unreviewability of the Justice Department's decision not to provide counsel to an employee-defendant in
a Title VII suit), with Gutierrez de Martinez v. Lamagno, 115 S.Ct. 2227, 2229-37 (1995) (holding
that the Attorney General's determination that an employee was acting within the scope of federal
employment for purposes of substitution of parties under the Westfall Act is subject to judicial review).
HeinOnline -- 50 Stan. L. Rev. 75 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
tionally, they have concluded that the "interest of the United States" standard
is met only if the executive branch wants to establish the legality of the employee's conduct or to ensure that the threat of outside42litigation does not
deter employees from vigorously performing their duties.
The key feature of this standard is its emphasis on outside litigation.43
When employees have faced litigation initiated by the executive branch itself, such as employment-related disciplinary proceedings, the government
has refused to provide representation, 44 even when the employee charged
with wrongdoing is later exonerated. 45 The government justifies its refusal
by pointing out that, in these proceedings, the government's interest is not
aligned with that of the employee. 46 The government has an interest in the
accurate determination of facts and the proper application of law. 47 In con42. See Department of Justice Representation in Federal Criminal Proceedings, 6 Op. Off.
Legal Counsel 153, 154 (1982); 58 Comp. Gen. at 615-16; see also Letter from RF. Keller, Deputy
Comptroller General, to John D. Dingell, Chairman, House Subcomm. on Energy and Power 5
(Apr. 5, 1979), availablein 1979 WL 44407.
43. See Department of Justice Representation in Federal Criminal Proceedings, 6 Op. Off.
Legal Counsel at 154 ("[TMhe federal government does not have an interest in relieving its employees of the threat offederal prosecution, as it does in relieving them of the threat and burdens of outside litigation." (second emphasis added)); Providing Representation for Federal Employees Under
Investigation by Their Inspector General, 4 Op. Off. Legal Counsel 693, 694 (1980) ("It is one
thing for a governmental organization to aid an employee under outside legal attack for actions
taken in his official role, and another for the organization to aid an employee whom for its own part
it may suspect of wrongful conduct." (emphasis added)).
44. In fact, both the Office of Legal Counsel and the Comptroller General have not only said
that the government may refuse to provide representation, but they have also concluded that the
government lacks authority to provide representation under these circumstances. See Representation of White House Employees, 4 Op. Off. Legal Counsel 749, 753 (1980) ("[A]bsent express congressional authorization, counsel may not be provided to defend executive branch employees in an
investigation or proceeding being pursued within the executive branch."); Providing Representation
for Federal Employees Under Investigation by Their Inspector General, 4Op. Off. Legal Counsel at
693 ("Neither the Department of Justice nor any other federal agency has authority to provide legal
representation to a federal employee in disciplinary proceedings instituted by his own agency."); 58
Comp. Gen. at 615, 616; 55 Comp. Gen. 1418, 1419-20 (1976).
45. See 58 Comp. Gen. at 615 (noting that an agency may not reimburse an employee for expenses incurred in his legal defense in an agency disciplinary proceeding, even though the hearing
examiner found that the allegations of misconduct were without merit); 55 Comp. Gen. at 1419-20;
cf 8 DEL. CODE ANN. § 145 (1991) (allowing corporations to pay for corporate officers' legal expenses in shareholder derivative actions and requiring such payment when the officer successfully
defends the action); GEOFFREY C. HAZARD, JR., SUSAN P. KONIAK & ROGER C. CRAMPTON, THE
LAW AND ETHICS OF LAWYERING 773-74 (2d ed. 1994).
46. See, e.g., 58 Comp. Gen. at 613-14.
47. The Office of Legal Counsel recognized this when it noted:
[A]s a general rule [the Justice Department] has authority to provide [legal] representation only
after it has determined institutionally that the employees are being asked to answer for legally
defensible conduct in the course and scope of their federal duties and that a defense of their
conduct on the merits will therefore be tantamount to a defense of the United States itself, a legal entity that can act only through its agents. But when the Criminal Division initiates a
criminal investigation of [an] employeefl, the Department cannot have made that determination. The very purpose of the investigation is to make [that determination].
HeinOnline -- 50 Stan. L. Rev. 76 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
trast, the employee has a personal interest in vindication. 48
Consistent with this approach, the Justice Department originally placed
an absolute bar on providing legal representation in federal criminal prosecutions, 49 reasoning that the party initiating the federal prosecution is within
the executive branch, not outside of it.50 But in 1990, the Department
changed its regulation so that the Attorney General could provide representation in federal criminal investigations after considering "the relevance of
any non-prosecutorial interests of the United States. '51 When it changed its
regulation, the Department did not explain which nonprosecutorial interests
should be considered or why it was now authorized to provide representation
that it earlier viewed as prohibited.5 2 The impetus for the change may have
been the increasing number of federal criminal prosecutions that are beyond
the control of the executive branch: those handled by ICs. 53
Providing Representation for Federal Employees Under Investigation by Their Inspector General, 4
Op. Off. Legal Counsel at 696.
48. The government's policy contrasts with the broad rules allowing corporations to indemnify corporate officers and directors who are accused of wrongdoing, but who successfully defend
themselves. See JOSEPH WARREN BISHOP, JR., THE LAW OF CORPORATE OFFICERS AND
DIRECTORS: INDEMNIFICATION AND INSURANCE 5.07 (1996). Even where the corporation itself
does not indemnify the officers or directors for their legal expenses, it generally provides liability
insurance that covers the cost of their defense, even where the lawsuit is filed on behalf of the company itself and where their defense is unsuccessful. See Joseph P. Monteleone & Nicholas J.
Conca, Directorsand Officers Indemnification and Liability Insurance:An Overview of Legal and
PracticalIssues, 51 Bus. LAW. 573, 587 (1996). For a brief discussion comparing the coverage
provided under the Justice Department regulations and that provided by corporations, see Mansukhani, supra note 8, at 115-16.
49. When the Justice Department first adopted a regulation regarding representation of employees, it indicated that
[r]epresentation... is limited to state criminal proceedings, and civil and Congressional proceedings.... The Department will not represent, or pay for the representation of, any employee, if,with respect to the acts that are the subject of the representation, an indictment or information has been filed against him by the United States or a pending investigation of the Department indicates that he committed a criminal offense.
Limitation for Representation of Federal Employees, 42 Fed. Reg. 5695, 5695 (1977) (promulgating28 C.F.R. § 50.15).
50. See Department of Justice Representation in Federal Criminal Proceedings, 6 Op. Off.
Legal Counsel 153, 154 (1982).
51. Representation of Federal Officials and Employees, 55 Fed. Reg. 13129, 13130 (1990)
(promulgating 28 C.F.R. §§ 50.15, 50.15). The amended regulation directs the Attorney General to
consider the following factors in determining whether it is in the interest of the United States to
provide such representation: "the relevance of any non-prosecutorial interests of the United States,
the importance of the interests implicated, the Department's ability to protect those interests
through other means, and the likelihood of a conflict of interest between the Department's prosecutorial and representational responsibilities." See 28 C.F.R. § 50.15(a)(4) (1996).
52. See note 47 supra.
53. The text of the regulation itself provides some support for this conclusion. The amended
regulation directs the Attorney General to consider the "non-prosecutorial interests of the United
States" in deciding whether to provide representation. In all criminal cases controlled by the Justice
Department, prosecutors exercise discretion in deciding whether to bring charges and, in doing so,
HeinOnline -- 50 Stan. L. Rev. 77 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
The third problem with government-provided representation is that even
where a lawyer is made available to an employee, that lawyer's role is to represent the interests of the United States, not the interests of the employee.5 4
Sometimes the employee may need to advocate a position the government
take into account a wide range of considerations, including the government's "non-prosecutorial"
interests. If these nonprosecutorial considerations would justify providing counsel, the department
might well not bring the prosecution at all. But in criminal cases controlled by an IC, the Justice
Department may take a different view of the relative importance of the charges or the culpability of
the defendant and may therefore want to provide representation. For additional analysis of the relationship between ICs and the Justice Department, see KATY J. HARRIGER, INDEPENDENT JUSTICE:
THE FEDERAL SPECIAL PROSECUTOR INAMERICAN POLITICS 117-38 (1992), and Julie O'Sullivan,
The Independent Counsel Statute: Bad Law, Bad Policy, 33 AM. CRIM. L. REV. 463, 478-505
(1996).
One ironic result of the new regulation is that the Justice Department is now more solicitous of
employees facing federal criminal investigations than those facing other types of internal executive
branch inquiries. The Department routinely denies representation in disciplinary proceedings initiated within the executive branch. Yet it offers the option of representation in at least some criminal
proceedings.
54. For purposes of determining which kinds of arguments and legal positions can be used,
the client-i.e., the party who controls the litigation-is the United States. See 28 C.F.R. §
50.15(a)(8)(ii) (noting that the lawyer "will not assert any legal position or defense on behalf of any
employee.., which is deemed not to be in the interest of the United States"). But for the purposes
of attorney-client privilege and confidentiality, the client is the employee, not the government:
Justice Department attorneys who represent an employee under this section ...undertake a full
and traditional attorney-client relationship with the employee with respect to the... attorneyclient privilege. Any adverse information communicated by the client-employee to an attorney
...shall not be disclosed to anyone, either inside or outside the Department ...unless such
disclosure is authorized by the employee.
Id. § 50.15(a)(3). In its recent decision regarding the White House's claim of attorney-client privilege against Independent Counsel Kenneth Starr, the Eighth Circuit failed to note this distinction in
Justice Department regulations. See In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 921
n.10 (8th Cir. 1997) (claiming that, under 28 C.F.R. § 50.15(a)(3), a Justice Department lawyer
"enters into a personal attorney-client relationship with the individual defendant").
This distinction between confidentiality and control is quite striking because it differs considerably from the approach suggested by the American Bar Association in its Model Rules. Under
the Model Rules, when an organization's lawyer interacts with one of the organization's employees,
the organization controls both the representation itself and any information the lawyer learns from
the employee. See MODEL RULES OF PROFESSIONAL CONDUCT Rule 1.13(a) (1984) ("A lawyer
employed.., by an organization represents the organization ....");id. Rule 1.13 cmt. 2 ("The
lawyer may not disclose to [employees] information relating to the representation except for disclosures explicitly or implicitly authorized by the organizational client.... ."). Also, the individual client controls both the course of the representation and the information, even if someone else is paying the lawyer's fees. See id. Rule 1.8(f) ("A lawyer shall not accept compensation for representing
a client from one other than the client unless ... there is not interference with the lawyer's independence of professional judgment or with the client-lawyer relationship; and.., information relating to representation of a client is protected as required by [the confidentiality rule]."). The Justice Department's approach may provide an alternative model for situations in which an organization, such as an insurance company or union, is paying for the representation of an individual client.
For a discussion of the conflicts of interest inherent in such a situation, see Russell G. Pearce, The
Union Lawyer's Obligations to BargainingUnit Members: A Case Study of the Interdependence of
Legal Ethics and Substantive Law, 37 S.TEX. L. REv. 1095, 1113-15 (1996).
HeinOnline -- 50 Stan. L. Rev. 78 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
opposes or on which it is neutral.55 But Justice Department lawyers may not
perform such advocacy, 56 and the Department will not pay for private representation on such an issue.5 7 To the degree that the employee's position exactly corresponds with the government's, the government will provide representation.5 8 To the degree that these positions diverge, the employee will
have to pay for her own representation.
This particular problem is illustrated by the experience of former EPA
Administrator Anne Burford.5 9 In 1982, Congress subpoenaed documents
that Burford, on the instructions of President Ronald Reagan, refused to provide. When Burford was held in contempt of Congress, the Justice Department responded by seeking a declaratory judgment that Congress had no
right to the documents. 60 According to Burford, there were several other
possible defenses, including arguments that she had already substantially
complied with the subpoena by previously turning over documents and that
the subpoena was technically deficient.6 1 Rather than using these arguments,
however, the Justice Department based its defense on a broad claim of executive privilege, 62 which was consistent with the Reagan Justice Department's overall strategy of trying to limit the information it had to turn over to
Congress. 63 The court dismissed the Justice Department's lawsuit and re55. See, e.g., Representation of Government Employees in Cases Where Their Interests Diverge from Those of the United States, 4 Op. Off. Legal Counsel 528, 529 (1980) (discussing
Hampton v. Hanrahan, 600 F.2d 600 (7th Cir. 1979)). In Hampton, the Justice Department represented FBI agents who were sued for allegedly wrongful conduct. The Seventh Circuit ordered the
federal government to pay a portion of the plaintiffs' attorneys' fees. The federal government
wanted review of this order, but such a position was against the interests of the individual employees. The government would continue representing these employees only if they would consent to
the government's contesting this order.
56. See 28 C.F.R. § 50.15(a)(8)(ii).
57. See id. § 50.16(d)(1) ("Reimbursement [is] limited to fees incurred for legal work that is
determined to be in the interest of the United States. Reimbursement is not available for legal work
that advances only the individual interests of the employee.").
58. See Representation of Government Employees in Cases Where Their Interests Diverge
from Those of the United States, 4 Op. Off. Legal Counsel at 533 ("The Attorney General represents government employees, directly or indirectly, only to the extent that their interests coincide
with the interests of the United States.").
59. Anne Burford was known as Anne Gorsuch for most of her tenure as EPA Administrator,
but she changed her name in the midst of this controversy when she married. See Remember Mrs.
ihatsername,WASH. POST, Feb. 24, 1983, at A14.
60. See United States v. House of Representatives of the United States, 556 F. Supp. 150, 151
(D.D.C. 1983).
61. See BURFORD & GREENYA, supranote 37, at 163.
62. See House of Representatives of the United States, 556 F. Supp. at 152; BURFoRD &
GREENYA, supra note 37, at 163-64.
63. See Mary Thornton, Gorsuch Being Called to Tell Hill Why She Withheld Data, WASH.
POST, Oct. 27, 1982, at A17 ("Congressional sources said [the] refusal to provide the documents is
another in a series of attempts by the Reagan administration to assert 'executive privilege' and
withhold documents and enforcement files that have been readily available to House committees in
the past."); see also Letter from Attorney General William French Smith to Hon. John D. Dingell
HeinOnline -- 50 Stan. L. Rev. 79 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
fused to rule on its executive privilege claim. 64
Burford claimed that the Justice Department lawyers in her case com65
mitted malpractice by failing to assert all possible defenses on her behalf.
Apparently, she felt that she was the client and was incensed that these lawyers had not looked out for her best interests. 66 But it is unlikely that Burford
could have prevailed in her malpractice claim because Justice Department
regulations make clear that, for purposes of determining which arguments to
make, the client is the United States, not the employee. 67 (Burford later
agreed not to pursue her malpractice claim when the government agreed to
pay nearly $200,000 in attorney fees she incurred
in connection with the in68)
scandal.
Superfund
EPA
the
of
vestigation
B. Independent Counsel Statute
A second mechanism for government reimbursement of legal fees is
(Nov. 30, 1982), reprinted in H.R. REP. No. 97-968, at 37 (1982) (also available in PETER M.
SHANE & HAROLD H. BRUFF, SEPARATION OF POWERS LAW: CASES AND MATERIALS 319-22
(1996)). For more information on this dispute between the executive and legislative branches, see
generally Ronald L. Claveloux, The ConflictBetween Executive Privilegeand CongressionalOversight: The Gorsuch Controversy, 1983 DuKE L.J. 1333. For a critical analysis of the Reagan administration's approach to executive privilege, see generally Peter M. Shane, Legal Disagreement
and Negotiation in a Government of Laws: The Case of Executive Privilege Claims Against Congress, 71 MINN. L. REV. 461 (1987).
64. See House ofRepresentatives of the UnitedStates, 556 F. Supp. at 152-53.
65. See Moore, supra note 37, at 1.
66. See, e.g., BURFORD & GREENYA, supra note 37, at 158 (relating that Burford told Assistant Attorney General Theodore Olson, "I am the witness and you are my counsel .. ");
id. at 164
("[T]he Justice Department lawyers kept putting more and more pressure on me ....
By the end we
were barely speaking to one another. And these were my lawyers, so to speak.").
67. See 28 C.F.R. § 50.15(a)(8)(ii) (1996); Dale Russakoff& Mary Thornton, PowerfulAllies
Abandon Her Cause: Burford Fights to Save Job at EPA, WASH. POST, Mar. 5, 1983, at Al (explaining that, according to "a senior department official ...Justice never technically 'represented
[Burford]' in the contempt-of-Congress case. 'A more accurate explanation was that we were explaining the president's position on executive privilege,' the official said. 'We weren't acting as
Anne Burford's counsel ... ');see also Representation of White House Employees, 4 Op. Off.
Legal Counsel 749, 753 (1980) (regarding representation before Congress, "the Government may
provide counsel to represent governmental but not personal interests"); id. at 755 ("Any employee
[of] the Government serv[ing] as counsel ... must clearly understand that he is the Government's
lawyer and not private counsel for the represented employee ....
[T]he interests of the Government
control the decisions that are made.").
On rare occasions, government lawyers may be sued for malpractice, but only where special
circumstances make clear that the lawyer is representing an individual rather than the government.
See, e.g., Mossow v. United States, 987 F.2d 1365, 1368-69 (8th Cir. 1993) (permitting the handicapped child of military service parents to sue the government under the Federal Tort Claims Act
("FTCA") for legal malpractice by a base staff attorney who gave the child's father inaccurate legal
advice regarding the child's medical malpractice claim); Walker v. United States, 663 F. Supp. 258,
265 (E.D. Okla. 1987) (holding that a plaintiff may sue the government under the FTCA for the
gross negligence of a government attorney who breached his statutory duty to represent the plaintiff
regarding the alienation of plaintiff's interests in restricted Indian lands).
68. See Kurtz, supra note 35, at A3.
HeinOnline -- 50 Stan. L. Rev. 80 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
found in the IC statute. 69 In 1978, Congress passed the IC statute, which
authorized the appointment of an IC to investigate allegations that the Presior presidential campaign offident or certain other high-level government
70
cials may have committed a crime.
In the first two years after the IC statute's enactment, ICs were appointed
to investigate alleged cocaine use by Hamilton Jordan, then White House
Chief of Staff, and Timothy Kraft, formerly President Carter's appointments
secretary.7 ' Eventually, the ICs decided not to prosecute either man. 72 But
in the meantime, Jordan and Kraft had each hired lawyers and incurred
$67,000 and $25,000 in legal fees, respectively. 73
During the early 1980s, when Congress was considering reauthorization
of the IC statute, some members of Congress expressed concern about the
high legal fees incurred by Jordan and Kraft.74 Senators William Cohen and
Carl Levin introduced, and Congress later passed, an IC reauthorization bill
69. The attorney appointed to investigate government officials was originally termed a "special prosecutor." See Ethics in Government Act of 1978, Pub. L. No. 95-521, § 601, 92 Stat. 1824,
1867 (1978) (codified as amended at 28 U.S.C. § 591 (1994)). When Congress amended the statute
in 1982, that post was renamed "independent counsel." See Ethics in Government Act Amendments of 1982, Pub. L. No. 97-409, § 2, 96 Stat. 2039, 2039; see also S. REP. No. 97-496, at 19-20
(1982).
70. See Ethics in Government Act of 1978, Pub. L. No. 95-521, 92 Stat. 1824 (codified as
amended at 28 U.S.C. § 591).
The IC statute includes a provision indicating that the law automatically expires five years after its enactment, thus requiring Congress to reauthorize the statute every five years. See 28 U.S.C.
§ 599. Since the passage of the original IC statute in 1978, Congress has reauthorized it (with
amendments) three times. See Ethics in Government Act Amendments of 1982, Pub. L. No. 97409, § 2, 96 Stat. at 2039; Independent Counsel Reauthorization Act of 1987, Pub. L. No. 100-191,
101 Stat. 1293 (1987); Independent Counsel Reauthorization Act of 1994, Pub. L. No. 103-270, 108
Stat. 732 (1994).
For a thorough description and compelling critique of the IC statute, see generally O'Sullivan,
supranote 53 (describing the operation and purview of the statute).
71. See Michael Hedges, Independent Counsel'sFuture Tied to Election, WASH. TIMES, Oct.
1, 1992, atA3.
72. See Thomas O'Toole, Attorney GeneralQuestions Special ProsecutorLaw, WASH. POST,
Apr. 21, 1981, atA3.
73. See Panel OKs Bill to Let Jordan Seek to Recover Costs, L.A. TIMES, Nov. 20, 1985, at
14 [hereinafter Panel OKs Bill]; see also In re Hamilton Jordan, 745 F.2d 1574, 1575 (D.C. Cir.
1984) (denying fees to former White House official Hamilton Jordan after an attempt to retroactively invoke the reimbursement statute); Maxine Cheshire, Jacob and Marion Javits: Tension at
the Table, WASH. POST, Dec. 19, 1980, at El (reporting that, at a fundraising party that raised
S10,000 toward his legal bills, Kraft "estimated to someone that he figured he needed a total of
S25,000').
74. See In re Donovan, 877 F.2d 982, 984 (D.C. Cir. 1989); SpecialProsecutorProvisionsof
Ethics in Government Act of 1978: Hearings Before the Subcomm. on Oversight of Government
Management of the Comm. on Governmental Affairs, United States Senate, 97th Cong. 6 (1981)
[hereinafter 1981 Special ProsecutorHearings] (statement of Sen. Levin) ("Does the investigation
conducted by a special prosecutor require greater costs to the target individual than in the ordinary
criminal case? Is the investigation substantially more thorough than the ordinary investigation? If
so, should some attorney fees be awarded in those situations not resulting in an indictment?").
HeinOnline -- 50 Stan. L. Rev. 81 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
that allowed for the reimbursement of attorneys' fees. 75 Under the revised IC
statute, a person may be reimbursed for legal fees if she can show that she:
(1) was not indicted;
(2) was the "subject" of an IC investigation; and
76
(3) would not have incurred these fees "but for" the IC statute.
The first requirement-that the person not be indicted-is relatively
noncontroversial. Where a valid indictment has been issued against a person,
she will be ineligible for reimbursement, even if she is later acquitted or par77
doned or if the indictment is dismissed.
75. The Ethics in Government Act Amendments of 1982, S. 2059, were introduced on February 3, 1982, 128 CONG. REC. 755-58 (1982), passed in the Senate and House with minor amendments, and signed into law on January 3, 1983. Senators Cohen and Levin were then the chair and
a member, respectively, of the Senate subcommittee with jurisdiction over the IC statute. See 1981
SpecialProsecutorHearings,supranote 74, at ii.
Other parts of the Cohen-Levin bill also addressed this "even playing field" concern. For example, one provision allowed the Attorney General to abandon investigations of high-level officials
for illegal activities the Justice Department would not usually prosecute, such as minor drug offenses. See Ethics in Government Act Amendments of 1982, Pub. L. No. 97-409, 96 Stat. at 204041; see also S. REP. No. 97-496, at 14-15 (1982); 128 CONG. REC. at 756. This gave the Attorney
General more discretion than before. See Ethics in Government Act of 1978, Pub. L. No. 95-521,
92 Stat. at 1868-69 (requiring the Attorney General to seek appointment of an IC unless the allegation was "so unsubstantiated that no further investigation or prosecution is warranted"); see also
Robinson, supra note 5, at A8 (discussing the low standard for appointment of an IC). Another
provision permitted the Attorney General to consider the credibility of the source and the specificity
of the information concerning the alleged wrongdoing when deciding whether to take the initial step
under the IC statute-making a preliminary investigation of the allegations. See Ethics in Government Act Amendments of 1982, Pub. L. No. 97409, 96 Stat. at 2040; see also 128 CONG. PEC. at
757-58.
76. See 28 U.S.C. § 593(f (1994). The statute reads:
(f)Attorneys' fees.
(1) Award of fees. Upon the request of an individual who is the subject of an investigation conducted by an independent counsel pursuant to this chapter, the division of the
court may, if no indictment is brought against such individual pursuant to that investigation, award reimbursement for those reasonable attorneys' fees incurred by that individual during that investigation which would not have been incurred but for the requirements of this chapter. The division of the court shall notify the the [sic] independent
counsel who conducted the investigation and [the] [sic] Attorney General of any request
for attorneys' fees under this subsection.
(2) Evaluation of fees. The division of the court shall direct such independent counsel
and the Attorney General to file a written evaluation of any request for attorney's fees
under this subsection, addressing(A) the sufficiency of the documentation;
(B)the need or justification for the underlying item;
(C) whether the underlying item would have been incurred but for the requirements
of this chapter, and
(D) the reasonableness of the amount of money requested.
Id.
77. See In re George Fee Application, No. DIV-86-6, 1994 WI. 585681, at *I (D.C. Cir. Oct
21, 1994) (per curiam) (denying reimbursement to a defendant who received presidential pardon
after his indictment); In re North (Fernandez Fee Application), 37 F.3d 663, 663-65 (D.C. Cir.
HeinOnline -- 50 Stan. L. Rev. 82 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
The second requirement, on the other hand, has been more contentious.
The IC statute itself does not define "subject," but the court that considers
fee awards-the Special Division for Appointing Independent Counsels of
the U.S. Court of Appeals for the District of Columbia Circuit 7 8-has defined "subject" as someone "whose conduct was within the scope of the
grand jury investigation.., in a way that would lead a reasonably counseled
person ...to believe that there was a realisticpossibility that he would become a defendant."' 79 Essentially, a "subject" is someone whose activities
were investigated and who might have been indicted, but was not.80 Not surprisingly, the court has had difficulty applying this definition.
Since the enactment of the original IC statute, nineteen ICs have been
appointed to investigate government officials,81 and they have brought indictments against dozens of individuals and companies.82 In the course of
their investigations, ICs have summoned hundreds of persons to testify before grand juries and have interviewed thousands more.8 3 Many of these
witnesses have been government employees. Persons who have contact with
an IC investigation fall somewhere on the following continuum: At one ex-
1994) (denying reimbursement to defendant whose indictment was later dismissed under the Classified Information Procedures Act, 18 U.S.C. App. I & Supp. (1994), because the Attorney General
was unwilling to declassify documents); cf In re Nofziger, 925 F.2d 428, 434-35 (D.C. Cir. 1991)
(stating that an indictment later dismissed for insufficiently alleging the elements of the offense was
not a bar to an award of attorneys' fees because the indictment was never valid in the first place);
H.R. 2607, 105th Cong. § 617 (1997) (permitting a federal court to award attorney fees to a defendant who was indicted but later prevailed if the government's position was "vexatious, frivolous, or
in bad faith"); Juliet Eilperin, An Ex-Marine's Battle: Murtha Wages War for Members' Prerogatives, ROLL CALL, Sept. 29, 1997, available in LEXIS, News Library, Rollcl File.
78. The special three-judge court considers requests for the appointment of an IC and the expansion of an IC's jurisdiction and rules on fee-reimbursement applications. See 28 U.S.C. §
593(b)(1), (c), (f).
79. In re North (Dutton Fee Application), 11 F.3d 1075, 1079 (D.C. Cir. 1993) (emphasis
added).
80. See In re North (Gardner Fee Application), 30 F.3d 143, 146 (D.C. Cir. 1994) ("The term
'subject' is roughly equivalent to 'potential defendant."' (citation omitted)).
81. See Table I.
82. See S. REP. No. 103-101, at 13-14 (1993) (explaining that the Iran-Contra IC brought indictments against fourteen; that the Wedtech IC brought indictments against two; and that the HUD
IC brought twelve indictments); Serge F. Kovaleski, Brother of Agriculture Ex-Chief Indicted in
Election-FundFraud,WASH. POST, July 10, 1996, at A2 (reporting that the Espy IC has brought
twelve indictments); Susan Schmidt, Whitewater PartnersFace Fraud Charges: McDougals' Indictment Cites LandDeals,WASH. POST, Aug. 18, 1995, at Al (discussing three new indictments in
the Whitewater matter and noting that Whitewater Independent Counsel Starr "and his predecessor,
Robert B. Fiske Jr., have brought criminal charges against a dozen others to date").
83. See Independent Counsel for Iran/Contra Matters, Immunity and Prosecution: A First Interim Report 4 (1987), reprinted in 2 FINAL REPORT OF THE INDEPENDENT COUNSEL FOR
IRAN/CONTRA MATTERS 491 (1993) [hereinafter FINAL IRAN/CONTRA IC REPORT] (indicating that,
as of April 1987, the Iran-Contra IC had conducted 800 interviews); see also id. at 734 (providing a
chart indicating that the FBI had conducted 3401 interviews on the Iran-Contra matter as of September 1993).
HeinOnline -- 50 Stan. L. Rev. 83 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
treme lie those high-level officials whose allegedly illegal acts have caused
the Attorney General to seek appointment of an IC in the first place; such
persons clearly fall within the definition of "subject," 84 as do those persons
who have been notified by the IC that they are subjects. 85 At the other extreme lie government employees who may have had some contact with the
high-level official being investigated and who are questioned or called to
testify as witnesses; such "mere witness[es]" do not qualify for reimbursement of their legal fees. 86 For example, a person who was simply required to
produce documents and who was neither a principal nor an agent in the matters being investigated is not a "subject," even if she is interviewed by IC
staff and required to appear before the grand jury to testify regarding the
87
documents.
But in between these two extremes lie countless government officials
and others who have had continuing contact with the alleged wrongdoer and
may have witnessed her conduct over extended periods of time. As an IC investigation progresses and expands, the IC's focus may turn from the initial
underlying conduct of the high-level official to the issue of whether anyone
obstructed the IC's investigation. 88 For government officials who have
worked extensively with the subject of the investigation, the IC may want
84. See, e.g., In re Donovan, 877 F.2d 982, 984 (D.C. Cir. 1989) (stating in the first sentence
of the opinion-without any discussion-that such a person "was the subject of [the] independent
counsel investigation").
85. See In re North (Platt Fee Application), 31 F.3d 1188, 1189-90 (D.C. Cir. 1994); In re
North (Gardner Fee Application), 30 F.3d at 146 (D.C. Cir. 1994); In re North (Shultz Fee Application), 8 F.3d 847, 850 (D.C. Cir. 1993); cf In re North (Reagan Fee Application), 94 F.3d 685, 688
(D.C. Cir. 1996) (ruling that Ronald Reagan remained a subject even after the IC notified him that
the IC no longer considered him a subject).
Similarly, where the IC has informed the press that a particular person is a subject of the investigation, she meets the "subject" requirement for reimbursement. See In re North (Bush Fee
Application), 59 F.3d 184, 187 (D.C. Cir. 1995) (noting that the IC publicly accused President Bush
of "misconducet" and told the press that Bush was "the subject of our investigation" (quoting Dan
Morgan & David S. Broder, President to Disclose "Everything": White House Disputes Walsh's
ChargesofIran-ContraCoverup, WASH. PoST, Dec. 26, 1992, at Al)).
86. In re North (Dutton Fee Application), 11 F.3d 1075, 1078 (D.C. Cir. 1993).
87. See In re North (Garrett Fee Application), 46 F.3d 1192, 1193-94 (D.C. Cir. 1995) (denying reimbursement to H. Lawrence Garrett III, former General Counsel for the Defense Department, who was responsible for producing Defense Department documents when the Iran-Contra IC
investigated Secretary of Defense Caspar Weinberger).
88. The ICs' tendency to investigate alleged obstruction of their own investigation may result
from the nearly unlimited prosecutorial and investigative resources that are at an IC's disposal. Julie O'Sullivan makes a similar point:
IC investigators, armed with a limitless checkbook, a flexible jurisdictional mandate, no
competing case demands, and all the time they need, can investigate their case far beyond that
which would seem reasonable in the normal case .... The consequences of such diligence
may be quite onerous not only for the subjects or targets of the investigation, but also for a
wide array of witnesses caught up by, but not implicated in, the investigation.
O'Sullivan, supranote 53, at 502.
HeinOnline -- 50 Stan. L. Rev. 84 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
particularly detailed information about their interactions with the subject. If
questions are later raised about the veracity of such a "mere witness's" responses, that witness may well become the subject of an investigation for
89
false statements, perjury, or obstruction ofjustice.
Determining the meaning of the third requirement-that the applicant
would not have incurred these fees "but for" the IC statute-has proven even
more difficult. 9° Initially, the court interpreted the "but for" requirement in
light of the legislative history of the 1983 amendment to the IC statute. The
fee reimbursement provision was part of an effort to put government officials
on an "even playing field" with ordinary citizens. 91 Members of Congress
had expressed concern that high-level government officials had been investigated for minor offenses that would not have been investigated, let alone
prosecuted, in the case of ordinary citizens. 92
In a 1991 decision involving former White House aide Lyn Nofziger, the
court stated that it could reimburse fees only if the applicant had been inves-
tigated for "alleged criminal activity which is not or is rarely prosecuted by
the Department of Justice.
'93
Nofziger had been investigated for lobbying
his former colleagues at the White House in violation of the Ethics in Government Act. 94 Even without an IC statute, the Justice Department would
have investigated Nofziger's lobbying, so he therefore did not meet the statute's "but for" requirement. 95
89. See, e.g., United States v. Weinberger, Cr. No. 92-0235, Indictment June 16, 1992, at 2630, reprintedin 2 FINAL IRAN/CONTRA IC REPORT, supra note 83, at 439, 465-69 (charging Caspar
Weinberger with making false statements to the Iran-Contra Independent Counsel); 1 FINAL
IRAN/CONTRA IC REPORT, supra note 83, at xix (indicating that the Iran-Contra IC considered indicting former Secretary of State George Shultz for his "early testimony [that] was incorrect if not
false," but "declined to prosecute because there was a reasonable doubt that Shultz's testimony was
willfully false").
90. Cf In re North (Bush Fee Application), 59 F.3d at 188 ("The most difficult element for a
fee applicant to establish under the Act is that the fees 'would not have been incurred but for the requirements of [the Act]."' (quoting In re North (Dutton Fee Application), 11 F.3d at 1079)).
91. See S. REP. No. 97-496, at 18-19 (1982); 128 CONG. REc. 756 (1982) (statement of Sen.
Cohen); Schultz, supra note 8, at 1321-22.
92. See 1981 SpecialProsecutorHearings,supra note 74, at 36 (statement of Lloyd N. Cutler, former White House Counsel under President Carter); id. at 73-74 (statement of Sam Dash,
former Chief Counsel to the Senate Watergate Committee); see also Richard Cohen, Unfair Battering Taken by Hamilton Jordan, WASH. POST, Dec. 7, 1980, at Cl (reporting that Jordan and
"[o]thers in the Carter White House... have had to spend considerable time and money defending
themselves against charges that could only have been brought against them because they were high
federal officials"); cf.O'Sullivan, supra note 53, at 488 (concluding that "the targets of IC investigations [are subject] to far greater scrutiny and violat[ions of] their privacy ...than would be the
case if the targets were private citizens").
93. In re Nofziger, 938 F.2d 1397, 1401 (D.C. Cir. 1991), denying reh 'g to 925 F.2d 428
(D.C. Cir. 1991).
94. See In re Nofziger, 925 F.2d at 430.
95. See In re Nofziger, 938 F.2d at 1401-02.
HeinOnline -- 50 Stan. L. Rev. 85 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
On the other hand, an applicant meets the "but for" requirement if she
has been "subjected 'to a more rigorous application of the criminal law than
is applied to other citizens.' ' 96 "More rigorous application of the criminal
law" may consist of a more thorough investigation than the Justice Department would have conducted 97 or an investigation of activities the Justice Department would not have considered criminal. 98
C. Private Legislation
On occasion, Congress passes private legislation paying money to a particular person. 99 These persons often have contract or tort claims they either
have lost or would lose in the courts because of sovereign immunity. 00 In
some cases, Congress pays for the damages caused by executive branch action or inaction it disapproves of, even if the action was entirely legal.' 0'
96. In re Sealed Case, 890 F.2d 451,453 (D.C. Cir. 1989) (quoting S. REP. No. 97-496, at 19
(1982)) (citations omitted).
97. See id. at 453-54 (awarding legal fees where the IC examined nine years of tax returns
even though only three years were in question, which was a more searching investigation than the
Justice Department would have done).
98. See In re North (Bush Fee Application), 59 F.3d 184, 184-86 (D.C. Cir. 1995) (awarding
fees to former President Bush after Iran-Contra Independent Counsel Walsh decided to investigate
Bush's pardoning of six key figures in the Iran-Contra affair); In re North (Dutton Fee Application),
11 F.3d 1075, 1080 (D.C. Cir. 1993) ("[A] politically appointed Attorney General ...would never
have... [subjected Dutton's conduct to a] criminal prosecution."); In re North (Shultz Fee Application), 8 F.3d 847, 851 (D.C. Cir. 1993) (awarding fees to government officials investigated by
Walsh for alleged violations of the Boland Amendments because the Justice Department had previously concluded that it was not a criminal statute).
99. See Note, PrivateBills in Congress, 79 HARv. L. REv. 1684, 1684 (1966). Private bills
fall into two categories: those seeking monetary relief from the government and those seeking relief from application of particular immigration laws. See id. For a detailed analysis of the more
specific types of private bills, see id. at 1693-1701.
Private legislation has attracted very little scholarly attention. The few law review articles on
this subject in the last 50 years include Walter Gellhom & Louis Lauer, CongressionalSettlement
of Tort Claims Against the United States, 55 CoLUM. L. REv. 1 (1955) (describing the congressional practice of settling claims against the United States); Jeffrey M. Glosser, CongressionalReference Cases in the UnitedStates Court of Claims:A Historical and CurrentPerspective, 25 AM.
U. L. REV. 595 (1976) (providing a procedural and historical analysis of claims against the United
States); and Floyd D. Shimomura, The History of Claims Against the United States: The Evolution
from a Legislative Toward a JudicialModel of Payment, 45 LA. L. REv. 625 (1985) (describing the
historical development of private legislation).
100. For an example, see Gellhorn & Lauer, supra note 99, at 12 n.33. They write:
[In the c]laim of Hambleton... an agent of the Army's Criminal Investigation Division falsely
represented to the claimant that "her husband was consorting with a red-headed woman ....
"
Mrs. Hambleton ...suffered a complete mental collapse shortly afterwards. An action was
commenced against the United States under the Federal Tort Claims Act, which, however,
does not extend to "wilful" torts
....The Court of Appeals entered judgment for the United
States .... The Senate committee expressly acknowledged the propriety of this decision, but
found "that a moral obligation obtains upon the part of the Government to grant monetary relief."
Id. (quoting CLAIM OF HAMBLETON, S.REP. No. 83-1199, at 4 (1954)).
101. For example, after World War II, the Senate Judiciary Committee approved paying the
HeinOnline -- 50 Stan. L. Rev. 86 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
Thus, private bills generally address moral rather than legal claims. 0 2
A recent high-profile private bill reimbursed the former head of the
White House Travel Office, Billy Dale, for the legal fees he incurred when
he was prosecuted for embezzlement.10 3 Clinton White House officials had
fired Dale along with six other Travel Office employees. The Justice Department prosecuted Dale for embezzlement, but a jury acquitted him. In defending himself, Dale incurred over $500,000 in legal fees, but he was not
eligible for reimbursement under the Justice Department regulation or the IC
statute.10 4 Republican congressional leaders argued that Dale had been
treated unfairly and should be made whole. 05 Dale's legal fees, in fact, became something of a cause clbre for congressional Republicans. 0 6 After
some partisan wrangling, Congress passed a private bill and the President
signed
it.107
There are only a few other examples of private legislation to pay for le-
survivors of civilian picnickers who were killed in the Oregon woods by a Japanese balloon-borne
bomb. The Committee noted that the
military services "were aware of the danger from these Japanese bombs and took no steps...
toward warning the civilian population of the danger involved. It seems to the committee that
some method could have been devised by our astute intelligence officers whereby civilians
might have been warned of the possible presence of this danger."
Id. at 7-8 (quoting CLAIM OF PATZKE, S. REP. No. 81-360, at 2 (1949)).
102. See id. at 34 ("The claimant... is a petitioner for equity, as it were, rather than one asserting his due."); Shimomura, supra note 99, at 682 (stating that Congress considers moral claims
against the United States, whereas the judiciary considers legal claims).
103. See Omnibus Consolidated Appropriation Act of 1997, Pub. L. No. 104-208, § 526, 1996
U.S.C.C.A.N. 1(10 Stat.) 3009 (1996) (appropriating $500,000 for the legal fees of Billy Dale and
the other five former White House Travel Office employees); Pub. L. No. 103-122, 107 Stat. 1198
(1994) (appropriating $150,000 for the legal fees of five former White House Travel Office employees); Paul A. Gigot, Why a President Shouldn't Have to Go Begging, WALL ST. J., July 1,
1994, at A12 (advocating a bill to pay Mr. Clinton's legal fees out of public funds while he is in office); see also Ralph Jefferson, The Cost of Testimony, the Price of Justice, WASH. POST, Jan. 19,
1993, at A20 (advocating that Congress pass a private bill to pay for Iran-Contra defendant Claire
George's legal fees).
104. For a discussion of the standards for Justice Department reimbursement of legal fees, see
text accompanying notes 27-68 supra. Dale was able to cover about $80,000 of these fees through
a legal defense fund. See Dems Halt Travel Workers Reimbursement, UPI, May 7, 1996, available
in LEXIS, Nexis Library, UPI file.
105. See, e.g., 142 CONG. REC. H9907 (daily ed. Aug. 2, 1996) (statement of Rep. Wolf).
106. See Jack Anderson, ClintonPrivately Opposing Payment of Dale'sFees, STATE J.-REG.,
July 24, 1996, at 4 (quoting a White House insider as saying that Dale has "become a poster-boy for
the Republicans").
107. See Paying the Whitewater Legal Fees, S.F. CHRON., Sept. 16, 1996, at A20 ("[A] lot of
partisan politics has pervaded the dispute over whether the government should reimburse these legal
fees."); Travel ChiefFurorDelays Bill, TELEGRAPH HERALD (Dubuque, Iowa), Sept. 12, 1996, at
A2 (referring to the "[p]artisan debate" over Dale's legal expenses and reporting that "Senate Minority Leader Tom Daschle, D-S.D., accused Republicans of spending $500,000 in a 'blatant attempt to score political points in a presidential election year').
HeinOnline -- 50 Stan. L. Rev. 87 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
gal fees.10 8 Most of these bills are legislative analogues to the Justice De-
partment regulation. They authorize representation for legislative branch of-
ficials who are questioned in civil or criminal cases. 109 In another case, Congress considered a bill to pay for Hamilton Jordan's attorneys fees after the
court ruled that he was ineligible under the IC statute because the fee reimbursement provision enacted in 1983 did not apply retroactively." 0
Reimbursement through private legislation is available only to those
whose plights are politically worthwhile for members of Congress to pursue."' For most government officials with massive legal fees, private legis12
lation will offer no relief at all.
III. THE SELF-HELP OPTION: LEGAL DEFENSE FUNDS
Many government officials have turned to legal defense funds to finance
their legal representation.1 3 As Table III shows, for over a decade, powerful
members of Congress have used legal defense funds to raise hundreds of
thousands of dollars to pay for their legal expenses. Unlike Congress, the
108. See, e.g., Greg Rushford, Whistle-Blowers Look to Congressfor Legal Fees, LEGAL
TIMES, Dec. 21, 1987, at 1 ("Louis Clark, executive director of the Government Accountability
Project [stated that] '[i]t is the rare case where someone sponsors private legislation to help these
people."'); Susan Winchurch, Greg Rushford & Ann Kornhauser, Whistleblowers Find Relief in
PrivateBill, LEGAL TIMES, Oct. 31, 1988, at 5 (noting that Representative Jack Brooks, Chairman
of the House Government Operations Committee, "took the rare step... of sponsoring a private bill
to pay [the] legal fees" of David Walden, a former government employee and whistleblower).
109. See, e.g., S. Res. 269, 104th Cong. (1996) (authorizing representation of a former Senate
employee in a civil suit); S. Res. 28, 102d Cong. (1991) (enacted) (authorizing the hiring of a private attorney to represent Senator Alfonse D'Amato's chief of staff in a grand jury proceeding in
which the Senate Counsel's office was unable to provide such representation because it was assisting the Senate Ethics Committee in its own investigation of D'Amato); Robert E. Kessler, Grand
Jury Subpoenas D'Amato Aide, NEWSDAY, Feb. 5, 199 1, at 7.
110. See PanelOKs Bill, supranote 73, at 14.
111. See, e.g., Note, supra note 99, at 1703 ("[T]here exists a residuum of [private] bills
that... do not seem to fit into any of the definable categories that may be extrapolated from the
great majority of bills passed."); id. at 1693 ("[P]olitical factors may play some part in the enactment of private legislation--particularly with respect to those laws that fall outside the readily discernible categories of successful bills."); Travel ChiefFurorDelays Bill,supra note 107, at A2.
112. In addition, some might argue that justice is better promoted through forward-looking
general legislation than by ad hoc politicized solutions to specific injustices. Relief may be granted
more on the basis of its political value than its worthiness. See Stephen Barr & R. H. Melton, Senate Votes to Reimburse Fired Travel Office Chief, WASH. POST, Sept. 13, 1996, at A27 (quoting
Senator Carl Levin, sponsor of the IC statute's fee reimbursement provision, as arguing that "paying Dale's legal fees would set a precedent by passing legislation helping a person 'who has been,
from all appearances, lawfully indicted"').
113. For at least the last 17 years, members of Congress and their staffs have taken advantage
of legal defense funds. In the last few years, executive branch employees have increasingly resorted to legal defense funds to pay their legal bills. For the most part, the judiciary has generally
not been subject to this same degree of legal scrutiny, and this article does not address the thus far
generally hypothetical question of how judges would pay for their legal defense expenses.
HeinOnline -- 50 Stan. L. Rev. 88 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
executive branch has no reporting requirements specifically addressing legal
defense funds. Therefore, less information is available on the prevalence of
the use of such funds by executive branch officials. But in June 1994, when
President and Mrs. Clinton were facing more than a million dollars in unpaid
legal fees from the Whitewater investigation and the Paula Jones sexual harassment lawsuit, they set up the Presidential Legal Expense Trust to accept
donations to help to pay for their legal expenses."14 Although there is no legal limit on the amount an individual may contribute, there was political
pressure to keep individual donations small. After considering smaller donation limits," 5 the Clintons' advisors settled on a $1000 annual limit, a limit
similar to that on federal campaign donations.
cepted donations from
lobbyists, 117 but
16
Initially, the Clintons ac-
after some criticism," 8 they decided
to stop accepting such gifts for the President's legal defense fund. 19 Contributions to the Clinton LDF seem to have dropped off considerably after it
120
stopped accepting contributions from lobbyists.
114. See Presidential Legal Expense Trust Indenture (June 28, 1994) (on file with the Stanford Law Review) (obtained through the Freedom of Information Act ("FOIA")).
115. See Douglas Jehl, Clinton Planning to Solicit Money for His Legal Aid, N.Y. TIMES,
June 21, 1994, at Al ("Presidential aides said... the maximum allowable contribution would most
likely be $500 ... ").
116. Under the Federal Election Campaign Act, 2 U.S.C. §§ 431-56, individuals are permitted
to give $1000 per election (primary or general) rather than $1000 per year. See 2 U.S.C. §
441a(a)(1)(A), (a)(6) (1994).
117. In fact, both the trust's executive director and White House Counsel Abner Mikva indicated that baring contributions from lobbyists would make it very difficult to raise funds. See Ruth
Marcus, Clinton Legal Fund Bars Donations by Lobbyists: Change in Policy Follows GOP Criticism, WASH. POST, Jan. 26, 1995, at Al (quoting Mikva as saying, "If you really set up a fund
which will see to it that the people who are likely to give can't give, what's the point of having the
fund?").
118. See, e.g., Jerry Roberts, The PanhandlingPresident,S.F. CHRON., July 2, 1994, at A22
(criticizing Clinton for "panhandling" money from lobbyists).
119. See Marcus, supra note 117, at Al ("The decision [not to accept contributions from registered lobbyists] came after Republicans accused Clinton of being hypocritical during his State of
the Union address ... when he called on members of Congress to stop taking gifts from lobbyists.").
120. The Clinton LDF received donations in the following amounts:
AMOUNTS RECEIVED BY THE CLINTON LDF
DATES
AMOUNTS
June 28-Dec. 31, 1994
Jan. 1-June 30, 1995
July I-Dec. 31, 1995
Jan. 1-June 30, 1996
July 1-Dec. 31, 1996
$608,080
$258,449
$105,537
$199,279
$62,045
Sources: Presidential Legal Expense Trust, Statement of Activities (Feb. 3, 1995); Presidential Le-
HeinOnline -- 50 Stan. L. Rev. 89 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
A. Executive Branch
Given the prevalence of legal defense funds, it is surprising that the executive branch has not adopted any regulations to deal with them. Nonetheless, two statutes have particular relevance to this issue. The first deals with
the issue of salary supplementation. The second deals with the issue of federal employees' acceptance of gifts.
1.
The prohibitionon salarysupplementation.
The salary supplementation statute prohibits almost all executive branch
employees from receiving compensation from private sources for their government work. 2 1t The theory behind this prohibition is that an employee receiving compensation from an outsider might be inclined to favor that party
22
in her government work.1
Do donations to a government employee's legal defense fund violate the
salary supplementation ban? Where a legal defense fund is set up in response to an investigation of a government employee's official actions, it
may violate the ban. Although no court has directly addressed this question, 123 the Office of Government Ethics ("OGE") discussed the issue in a
gal Expense Trust, Statement of Activities (Aug. 11, 1995); Presidential Legal Expense Trust,
Statement of Activities (Feb. 22, 1996); Presidential Legal Expense Trust, Statement of Activities
(Aug. 14, 1996) (all on file with the Stanford Law Review); Hilary Stout, Millionsfor Defense: Representing Clinton Becomes Big Business, WALL ST. J., Feb. 28, 1997, at Al (noting that during the
last six months of 1996, the fund raised just $62,045 in contributions).
There may be another explanation for this pattern in the contribution amounts. Many of the
people donating to the Clinton LDF may do so in response to publicity about it, such as that which
followed its establishment in June 1994, as well as articles about the Clintons' difficult financial
position in the beginning of 1996.
121. 18 U.S.C. § 209 makes it a crime for anyone to receive
any salary, or any contribution to or supplementation of salary, as compensation for his services as an officer or employee of the executive branch of the United States Government, of any
independent agency of the United States, or of the District of Columbia, from any source other
than the Government of the United States, except as may be contributed out of the treasury of
any State, county, or municipality.
18 U.S.C. § 209(a) (1994). The President and Vice President are exempted from application of this
statute. See id. § 202(c). For an excellent discussion of the legislative history, purposes, and application of this statute, see generally Beth Nolan, Public Interest, Private Income: Conflicts and
ControlLimits on the Outside Income of Government Officials, 87 Nw. U. L. REV. 57 (1992).
122. See Nolan, supra note 121, at 89 ("[T]he danger of divided loyalty... is the raison
d'etreof the supplementation statute, but the prohibition also reflects concerns about.., other values: appearance of impropriety, buying of access, and improper 'sale' of office."). But the prohibition on salary supplementation extends far beyond those situations in which the payor might actually benefit from the employee's actions. See OGE, Priv. Adv. Ltr. 85x19, at 603-04 (Dec. 12,
1985) [hereinafter OGE, Letter of Dec. 12, 1985] (stating that donations may be illegal even though
the employee is not in a position to influence the government on behalf of the payor).
123. In Judicial Watch, Inc. v. Clinton, 880 F. Supp. 1 (D.D.C. 1995), aff'd, 76 F.3d 1232
(D.C. Cir. 1996), the court dismissed plaintiff's claim that President Clinton's legal defense trust
violates 18 U.S.C. § 209 because that statute does not provide private right of action. See id. at 5
HeinOnline -- 50 Stan. L. Rev. 90 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
1985 Advisory Letter. 124 In that situation, the lawyer who represented a government official in a grievance proceeding sought OGE's approval of a legal
defense fund set up by the employee's friends. The prospective donors did
not conduct any business with the branch of the agency where this employee
worked, and they planned to remain anonymous.12 5 According to OGE, the
central issue in the salary supplementation analysis was whether the donors
intended to compensate the employee for her government service. 26 In this
case, the donations were "related to an activity which arose directly from the
performance of Government service"; this suggested that there might be an
intention to compensate.1 27 This meant that one would need to examine all
of the circumstances to make such a determination, and OGE refused to certify that this particular arrangement was legal under the salary supplementa128
tion statute.
In a 1993 Advisory Letter, OGE faced a similar inquiry and reasoned
that donors would be violating the statute only if they paid the "employee for
doing his Government work."' 29 But in the case at issue, "[t]he work involved [was] the employee's defense of charges brought against him by his
department [and] time spent on an employee's own defense does not appear
to be part of the employee's Government work."' 130 OGE therefore concluded that donations to this legal defense fund did not violate the salary
131
supplementation ban.
There are several problems with the analysis in the 1993 Advisory Letter. First, it mischaracterizes the nature of the donations when it asserts that
they compensate the employee for his own efforts in defending himself. Donations are intended to pay the employee's lawyer for the lawyer's time, as
OGE's opinion itself noted. 32 Second, OGE makes the mistake of focusing
on the employee's planned use of the donated money rather than on the donor's intent in giving the money. The government's previous interpretations
of the statute had emphasized that a central consideration was the donor's
n.3.
124. See OGE, Letter ofDec. 12, 1985, supranote 122.
125. See id. at 601.
126. See id. at 603 ("[T]he question whether a payment is 'compensation for services as an
employee of the United States' is often the focus of a section 209 inquiry.").
127. Id. at 603-04.
128. See id.
129. OGE Inf. Adv. Ltr. 93x21 (Aug. 30, 1993), availablein 1993 WL 721241, at *3 [hereinafter OGE, Letter of Aug. 30, 1993].
130. Id.
131. See id. at *6.
132. Initially, OGE observed that the employee described the fund as a way to pay the legal
expenses he incurred during an administrative disciplinary proceeding: "The money in the fund
would not be in the employee's possession, but would go directly to payment of the employee's legal fees." Id. at *1.
HeinOnline -- 50 Stan. L. Rev. 91 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
subjective intent. 133
OGE has attempted to justify its analysis by pointing to the Supreme
Court's decision in Crandon v. United States.134 But Crandon does not provide any guidance on the use of legal defense funds by current government
employees. It simply holds that the salary supplementation statute does not
apply to payments received prior to the start of federal employment. 135 OGE
has placed particular emphasis on a passage in Crandon in which the Supreme Court implies that the salary supplementation statute must not be construed beyond what is clearly warranted by the text. 3 6 But the Court's direction to construe the statute narrowly does not justify changing one of the
elements of the offense from an examination of the donor's intent to an examination of the employee's planned use of the funds.
As it has become more common for executive branch employees to hire
lawyers to defend their actions, the pressure has increased to find some
funding mechanism that permits employees to pay for their legal representation. As a policy matter, one might argue that the ability of employees to
raise money through legal defense funds is so important that a broad, prophylactic statute, enacted long ago in response to unrelated phenomena,
ought not stand in the way.137 Such an argument might justify amending the
133. For example, an earlier OGE opinion stated:
[The focus of a section 209 inquiry usually is ... whether the compensation in question is "for
services as an employee of the United States." In many cases the answer depends largely upon
the subjective intent of the parties and, in turn, upon the inferences that can reasonably be
drawn from all the circumstances surrounding a proposed arrangement.
OGE Inf. Adv. Ltr. 89x8 (June 30, 1989), available in 1989 WL 253561, at *1; see also Memorandum of Office of Legal Counsel (Apr. 7, 1977) (on file with the StanfordLaw Review) ("18 U.S.C.
§ 209(a) prohibits only those payments made or received with the intent that they reward past government services or compensate for future ones."). Nolan offers an illustration of how the donor's
subjective intent could come into play:
[Il]magine a State Department employee, Steinhardt, who is invited to go on a lavish trip to
Provence and is asked to file three or four short reports with his benefactor regarding his observations of Provence. Imagine also that his benefactor does business with Steinhardt's office, believes Steinhardt is entitled to a long, expensive vacation because he works so hard for
the State Department, knows Steinhardt cannot afford such a vacation on his meager government salary, and clearly intends this trip to supplement Steinhardt's government salary. It
would be an insufficient answer to a claimed violation of section 209 that Steinhardt was providing "another service" to the payor unrelated to his State Department duties, that Steinhardt
was providing no government service to the payor, or that he was on annual leave when he
took the trip. Intent to compensate for government services would be present, and it would be
sufficient to make out a violation of section 209.
Nolan, supranote 121, at 96.
134. 494 U.S. 152 (1990). OGE, Letter of Aug. 30, 1993, supra note 129, refers extensively
to this case.
135. See Crandon,494 U.S. at 159.
136. See id. at 160.
137. The predecessor to the section 209 salary supplementation ban was enacted in 1917 in
response to congressional concern that private philanthropic foundations were exercising undue influence on the Interior Department's Education Bureau by funding the salaries of Bureau employ-
HeinOnline -- 50 Stan. L. Rev. 92 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
funds, 38 but it does not jusstatute to provide an exception for legal defense
139
tify OGE's strained construction of the statute.
In its 1993 Advisory Letter, OGE suggested that donor anonymity is crucial to the legality of a defense fund. 14° Anonymity may indicate that no actual harm will occur to the government,' 4 1 but the broad, prophylactic salary
42
supplementation statute prohibits more than just conduct that causes harm.
As OGE correctly explained in its 1985 Advisory Letter, even an anonymous
donor may intend to compensate a government employee for her government
service.143 More recently, OGE revisited the issue of anonymous LDF condonor anonymity is an essential
tributions and "no longer believe[s] 1that
44
characteristic of a legal defense fund."'
Numerous times throughout the 1993 Advisory Letter, OGE emphasizes
ees. See Nolan, supra note 121, at 68-69.
138. See id. at 102 (arguing that revision of this statute "is long overdue"); see also Crandon,
494 U.S. at 178 (Scalia, J., concurring) ("The administrative history of § 209(a) is a record of
poignant attempts by the Attorney General and the OLC to derive reasonable results from the rigid
and undiscriminating criminal statute they have invented.").
139. See Crandon, 494 U.S. at 177-83 (Scalia, J., concurring) (criticizing the executive
branch's inconsistent interpretations of the statute).
140. OGE, Letter of Aug. 30, 1993, supra note 129, cautions that "[t]o reduce the likelihood
of individual donors informing the employee of their donation, legal defense fund administrators
should make efforts to discourage such notification and stress the importance of donor anonymity."
Id. at *4.
141. See id. ("Anonymous private paymasters do not have an economic hold on an employee
because the employee does not know who the paymasters are. Moreover, the employee has no way
to favor these outside anonymous donors.").
142. See OGE Inf. Adv. Ltr. 85xl 1, at 559 (Aug. 23, 1985) ("Violations of section 209(a) do
not depend on the existence of a conflict of interest ....It is sufficient that the parties intend the
payment as a supplementation of Federal salary, whatever the underlying motivation may be."); see
also Nolan, supra note 121, at 91-92 ("Salary supplementation .... does not require corrupt
it requires no relationship between the supplementation and an official act, and therefore
intent ....
no intent to influence the carrying out of an official act.").
143. See OGE, Letter ofDec. 12, 1985, supra note 122, at 603-04.
144. Letter from Marilyn Glynn, General Counsel, OGE, to Kathleen Clark, Associate Professor of Law, Washington University School of Law 2 (Apr. 30, 1997) (on file with the Stanford Law
Review). The issue of donor anonymity also arose in connection with the Clintons' legal defense
fund. White House officials initially considered requiring that donors be anonymous. See Hearing
Before the Subcomm. on Admin. Law and Governmental Relations of the House Comm. on the Judiciary on H.R. 2289, Office of Gov't Ethics Authorization Act of 1994, 103d Cong. 21 (1994)
[hereinafter OGE Authorization Hearing] (statement of Stephen J. Potts, Director, Office of Government Ethics). In the end, the White House decided to require that all donors be identified, see
Letter from Michael H. Cardozo, Executive Director, Presidential Legal Expense Trust, to Stephen
D. Potts, Director, OGE 2 (July 20, 1994) (on file with the Stanford Law Review), and the OGE approved that plan, see Letter from Stephen D. Potts, Director, OGE, to Michael H. Cardozo, Executive Director, Presidential Legal Expense Trust 1 (July 22, 1994) (on file with the Stanford Law Review) (obtained through the FOIA) ("I believe that the existence and proposed operation of this trust
does not or will not violate any of the conflict of interest... statutes .... ."). For a discussion of the
relative merits of anonymous and nonanonymous donations to legal defense funds, see OGE
Authorization Hearing,supra,at 21-22.
HeinOnline -- 50 Stan. L. Rev. 93 1997-1998
STANFORD LA W REVIEW
[Vol. 50:65
that its conclusion about the legality of thus specific legal defense fund is
limited to the circumstances presented in that case.145 One wonders whether
OGE was actually trying to establish guidelines for future legal defense
funds through the precedent of an Advisory Letter rather than through regulation. 4 6 The problems with the 1993 Advisory Letter, however, suggest
that OGE should promulgate specific regulations on how to set up legal defense funds to comply with the salary supplementation ban rather than depending on the highly fact-dependent, ad hoc system that is evident in the
letter. The next section shows that these regulations should also address how
the federal gift statute applies to legal defense funds.
2.
Restrictions on gifts.
Although the executive branch lacks any regulation specifically addressing legal defense funds, it has extensive regulations restricting gifts. 147
But before discussing the details of these gift rules, it is necessary to determine whether donations to legal defense funds are even categorized as gifts.
According to OGE's General Counsel, if a legal defense fund is set up by a
third party on behalf of an employee (rather than by the employee herself),
the donations are not considered gifts at all.' 48 Many of the Clinton White
145. "[U]nder the circumstancesyou described... the donations to a legal defense fund...
are not prohibited by 18 U.S.C. [§] 209(a)," OGE, Letter of Aug. 30, 1993, supra note 129, at *1
(emphasis added), so that "we do not believe that the statute covers the proposedpayments from the
defense fund," id. at *2 (emphasis added), making "the arrangement proposedhere... permissible
under section 209," id. at *3 (emphasis added), and meaning that "we do not believe that the legal
defense fund at issue here would pay a Government employee for doing his Government work," id.
(emphasis added).
146. Consider the following passage from OGE, Letter of Aug. 30, 1993:
It is difficult to see how any of these ... policies would be violated where there is donor
anonymity, where the fund would be administered by persons having no connection with the
employee's official duties and no discretion about whether to pay, [and] where the employee
would not have possession of the money ....
Id. at *4.
For an examination of whether an executive branch agency should go through the notice and
comment period and issue regulations rather than setting policy through an advisory letter, see generally Robert A. Anthony, Interpretive Rules, Policy Statements, Guidances Manuals, and the
Like-Should FederalAgencies Use Them to Bind the Public?, 41 DUKE L.J. 1311 (1992) (arguing
that permitting nonlegislative rulemaking to bind the public violates our system of limited government); Michael Asimow, Nonlegislative Rulemaking and Regulatory Reform, 1985 DUKE L.J. 381
(suggesting that agencies' use of interpretive rules and policy statements serves the public interest).
147. See 5 C.F.R. §§ 2635.201-.304 (1996) (outlining the rules governing gifts to executive
branch employees).
148. The OGE further elaborated on this position as recently as last year:
OGE general counsel Gary Davis said as long as [legal defense] funds are set up by third
parties on the employee's behalf, there are no limits--except those imposed voluntarily by the
recipient-on the size of contributions, on how the money is solicited or on publicly disclosing
individuals who contribute.
Devroy & Marcus, supra note 7, at A21; cf. A.B.A CODE OF JUDICIAL CONDUCT § 5C(2) (1990)
("A candidate shall not personally solicit or accept campaign contributions... [blut may... estab-
HeinOnline -- 50 Stan. L. Rev. 94 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
House officials facing large legal bills have avoided the gift regulations entirely because others have set up legal defense funds on their behalf. 149 The
Clintons, on the other hand, set up their legal defense fund themselves and
50
are thus subject to the gift regulations.
There are three major types of gift restrictions that are particularly relevant in this context: those limiting the receipt of gifts from particular donors,
those requiring disclosure, and those prohibiting the solicitation of gifts.
Federal law bars all executive branch employees (except the President and
Vice President 51) from accepting any gifts from four sets of prohibited
sources: (1) anyone "whose interests may be substantially affected by the
performance or nonperformance of the individual's official duties"; 152 (2)
anyone "seeking official action from [or] doing business with ... the individual's employing entity"; 153 (3) anyone "conducting activities regulated by
..the individual's employing entity"; 154 and (4) any federal employee who
is that individual's subordinate. 155 An employee may accept a gift from an
otherwise prohibited source if that gift is based on a family relationship or
56
personal friendship rather than on the employee's government position.
Employees may accept cash gifts of any size from anyone who is not a "prolish committees of responsible persons to conduct campaigns... [and s]uch committees may solicit
and accept reasonable campaign contributions ... ").
Employees subject to the financial disclosure obligations must indicate on their disclosure
forms the amounts paid by the fund to their lawyers, but they are not required to disclose the names
of those who contribute to the fund or the amounts contributed. See Letter from Marilyn Glynn to
Kathleen Clark, supranote 144, at 2.
149. See Devroy & Marcus, supranote 7, at A21.
150. Unlike the legal defense funds of their aides, the Clinton LDF may not solicit donations.
See text accompanying notes 272-276 infra. One wonders whether the Clintons fully understood
the consequences of their decision to set up the fund on their own behalf, especially given the difficulties caused by their inability to solicit donations. The Clinton LDF
raised more than $600,000 during its first six months [in the second half of 1994] and more
than $250,000 in the first half of 1995, [but] donations dropped to just over $100,000 for the
second half [of 1995] .... The fund is hobbled in raising money because the Office of Govemnment Ethics has ruled that it cannot solicit funds in any way.
Ruth Marcus, ClintonsOwe $1 Million in Legal Bills, WASH. POST, Feb. 23, 1996, at A6.
151. See text accompanying notes 164-169 infra.
152. 5 U.S.C. § 7353(a)(2) (1994). In 1994, for example, a senior Interior Department official
was fired after having accepted legal defense fund donations from the representatives of oil companies he regulated. See Tom Kenworthy, InteriorAide Put on Leave After Legal Difficulties, WASH.
POST, Nov. 30, 1994, at A18.
153. 5 U.S.C. § 7353(a)(1).
154. Id.
155. See id. § 7351(a)(3); 5 C.F.R. § 2635.302(b) (1996).
156. See 5 C.F.R. §§ 2635.204(b)-.302(b). This kind of regulatory exception to the statutory
restriction is explicitly authorized by the Ethics Reform Act of 1989. See 5 U.S.C. § 7353(b). The
Act permits implementing regulations and exceptions to be promulgated by OGE for the executive
branch, by the House Committee on Standards of Official Conduct for the House of Representatives, and by the Senate Select Committee on Ethics for the Senate. See id. § 7353(d)(1).
HeinOnline -- 50 Stan. L. Rev. 95 1997-1998
[Vol. 50:65
STANFORD LAW REVIEW
hibited source."
They may also accept noncash gifts from "prohibited
157
sources" as long as such gifts are less than $20 in value.
In addition, executive branch employees are prohibited by regulation
from accepting any gift that is "[g]iven because of the employee's official
position."'158 In the context of legal defense funds, OGE has interpreted this
regulation to prohibit the acceptance of legal defense fund donations only if
it has become clear, through oral or written communication, that the donation
is being given because of the employee's position. 159 This approach may encourage a "see no evil, hear no evil" attitude on the part of the employee. As
long as the employee is not aware of the donor's motivation for the donation,
she avoids this regulation's restriction. 60
OGE's interpretation might be appropriate if it were dealing with a
regulation prohibiting an employee from knowingly accepting a gift given
because of the employee's position. But this regulation does not contain a
mens rea element for the employee. The regulation refers to the motivation
of the giver, not to the knowledge of the recipient. 161 A more appropriate
interpretation would place the burden on the employee to ensure that she
does not accept any gift given with this improper motivation.
62
Properly
understood, this regulatory prohibition on accepting gifts based on government employment would prohibit cash donations to legal defense funds from
persons who are not family members or personal friends of the employee. 163
157. See 5 C.F.R. § 2635.204(a).
158. Id. § 2635.202(a)(2).
159. See Letter from F. Gary Davis, General Counsel, OGE 2 (May 2, 1996); Letter from Stephen D. Potts, Director, OGE 2 (July 14, 1995) (both on file with the Stanford Law Review) (both
obtained through the FOIA). The recipients' names on both letters were deleted.
160. Therefore, the employee has an incentive to remain ignorant of the source:
Under federal gift rules, White House officials cannot accept contributions to legal defense funds from ... companies and other parties with business before the White House or
those who give because of the employee's official position. But [OGE General Counsel Gary]
Davis said that as a practical matter, unless one of the contributors to the fund volunteered that
information, there would be no restrictions on who could give.
Devroy & Marcus, supra note 7, at A21.
161. Cf United States v. Nofziger, 878 F.2d 442, 454 (D.C. Cir. 1989) (construing the
postemployment restriction of 18 U.S.C. § 207(c) as applying only where the former government
employee has knowledge of all the "facts that make his conduct criminal").
162. This may be particularly true if donations are intended to ensure that the employee will
not be distracted from her official duties. For example, the Reverand Theodore M. Hesburgh and
Nicholas deB. Katzenbach, trustees of the Clinton LDF, stated, "[W]e believe it is in the public interest to assist the president in meeting a financial burden that could otherwise distract him from
performing his public responsibilities." Ruth Marcus, Clintons Establish Fund to Meet Legal Expenses, WASH. POST, June 29, 1994, at Al.
163. In the case of such donations from persons who are not family members or close friends,
the following questions arise: Why is such a donation being given? If the donation is not based on
kinship or friendship, what is it based on? In the case of the Clinton LDF, in particular, it seems
clear that some of the donations are being given on the basis of Clinton's position as President. In
the first place, the Clintons chose to name their trust fund the "PresidentialLegal Expense Trust"
HeinOnline -- 50 Stan. L. Rev. 96 1997-1998
November 1997]
HEIGHTENEDETHICS SCR UT-NY
Current regulations exempt the President and Vice President from the restrictions on the receipt of gifts from "prohibited sources" and gifts given because of their official positions. 164 They may accept cash gifts, including legal defense fund donations, from anyone, even if the donor's "interests may
be substantially affected"' 165 by the exercise of their official responsibilities. 166 There are no limits on the size of such cash gifts to the President and
167
Vice President.
OGE identifies three reasons for exempting the President and Vice
President from the executive branch gift rules: First, these two officials undergo exceptionally intense scrutiny by the public and the press; second, they
are already required to disclose gifts of more than $250; and third, if the
public is not satisfied with their behavior, they will not be reelected. 68 It is
this regulatory exception that has allowed President Clinton to set up his
Presidential Legal Expense Trust to accept donations for his legal expenses
169
related to the Whitewater IC investigation and the Paula Jones lawsuit.
(emphasis added). Second, some of the persons involved with the trust have stated that donations
are necessary so that President Clinton is not distracted from his presidential duties. See, e.g., Marcus, supra note 162, at Al.
164. See 5 C.F.R. §§ 2635.204(j), .303(d). The regulation does not exempt the President and
Vice President from the restriction on accepting gifts "in return for being influenced in the performance of an official act," id. § 2635.202(c)(1), or from the prohibition on "solicit[ing and] coerc[ing]
the offering of a gift," id. § 2635.202(c)(2).
165. Id. § 2635.204(d).
166. See id. § 2635.2040). This section exempts the President and Vice President from the
restrictions on prohibited sources. They are still bound by criminal bribery laws, however. See id.;
see also 18 U.S.C. §§ 201(b), (c)(3) (1994).
167. See 5 C.F.R. § 2635.2040) (exempting the President and Vice President from most of the
regulations on gifts). Other restrictions on the amounts of gifts, campaign contributions, and legal
defense fund donations do limit the amounts of such gifts, contributions, and donations. See Buckley v.Valeo, 424 U.S. 1,26-29 (1976) (noting that limits on the size of campaign contributions help
combat the corrupting influence of particularly large contributions); 5 C.F.R. § 2635.204(a); see
also text accompanying note 178 infra.
168. See, e.g., Standards of Ethical Conduct for Employees of the Executive Branch, 56 Fed.
Reg. 33783 (1991) (to be codified at 5 C.F.R pt. 2635) ("In the case of an elected official of the
stature of the President or Vice President whose personal conduct is closely scrutinized by the public and the press, this requirement for public disclosure provides sufficient restraint on their acceptance of gifts."); WALDEN, supra note 8, at 322 ("As an elected official, the President is subject to
political remedies for accepting gifts that pose an appearance of impropriety."). But see DENNIS F.
THOMPSON, ETHICS IN CONGRESS: FROM INDIVIDUAL TO INSTITUTIONAL CORRUPTION 137-43
(1995) (arguing that public disclosure does not sufficiently check "ethical improprieties").
169. For a brief explanation of the underlying facts of the Whitewater controversy, see The
Unfolding of Whitewater,WASH. POST, Jan. 21, 1994, at A20. Paula Jones, a former Arkansas state
employee, has sued President Clinton for sexual harassment that allegedly took place while he was
Governor of Arkansas. See Jones v. Clinton, 117 S.Ct. 1636, 1639-40 (1997).
Regarding the applicability of this exception to the Clinton LDF, see Sharon LaFraniere, GOP
Leaders in House Ask Reno for Ruling on Clinton Legal Fund, WASH. POST, July 23, 1994, at A4
("OGE Director Stephen D. Potts ...told the White House orally that the fund was legal based
upon an ethics regulation that allows the president and vice president to accept gifts."). A similar
legal defense fund was set up to help former President Richard Nixon pay his legal expenses after
HeinOnline -- 50 Stan. L. Rev. 97 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
B. Legislative Branch
1. Regulations specific to legal defense funds.
The Senate first recognized its members' need to raise funds for their legal expenses in 1980 in response to the Abscam prosecution of Senator
Harrison Williams. 70 The House of Representatives later set up its own
rules. 171 Congressional restrictions on legal defense funds fall into the following four categories: the purposes for which legal defense funds may be
used; the maximum amount of individual donations; disclosure requirements;
and restrictions on who may make donations.
Both the House and the Senate have certain restrictions on the purposes
for which members and staffers may set up legal defense funds. A senator or
Senate staffer may set up an LDF to pay for legal expenses that arise "by
virtue of his or her service in or to the Senate."' 7 2 The House of Representatives, on the other hand, permits its members and staffers to set up LDFs to
pay for legal expenses that arise in other circumstances as well, including an
official's candidacy for federal office, a civil matter bearing on her reputa-
he left office, but it apparently did not cover a "significant portion" of his fees. See Paul Bedard,
Whitewater,Jones Suit May Spur Legal Defense Fundfor Clintons, WASH. TIMES, May 10, 1994,
at Al (quoting former Nixon attorney R. Stan Mortenson); see also Robert L. Jackson, GOP Questions Legality of Clinton'sDefense Fund, L.A. TIMES, July 23, 1994, at A16; PresidentMight Seek
Donations,supra note 18, at A3 ("Nixon accepted about $190,000 to offset the costs he incurred
trying to keep his tapes and papers out of the hands of Congress and the public during Watergate.").
170. On September 4, 1980, the Senate authorized its Select Committee on Ethics to adopt
special regulations for legal defense funds. See S. Res. 508, 96th Cong. (1980). The Committee
adopted such regulations on September 30, 1980. See generally SELECT COMM. ON ETHICS,
UNITED STATES SENATE, REGULATION GOVERNING TRUST FUNDS TO DEFRAY LEGAL EXPENSES
INCURRED BY MEMBERS, OFFICERS AND EMPLOYEES OF THE UNITED STATES SENATE (on file with
the Stanford Law Review) [hereinafter SENATE REGULATION]; see also Irwin B. Arieff, Senate to
Let Members Seek Fundsfor Legal Defenses, CONG. Q. WKLY. REP., Sept. 13, 1980, at 2701. The
Senate regulations are summarized in SENATE ETHICS MANUAL, S. PUB. No. 104-44, at 41 (1996).
171. The House originally authorized legal defense funds in the wake of the Abscam scandal
to help those caught in the FBI sting operation to defend against the bribery charges. See Clifford
Krauss, Lawmakers'LegalAid Society: Rich Donors, N.Y. TIMES, Aug. 13, 1993, at B7. In 1996,
the House Ethics Committee adopted a specific regulation tightening restrictions on legal defense
funds. See generally U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON STANDARDS OF OFFICIAL
CONDUCT MEMORANDUM TO ALL MEMBERS, OFFICERS, AND EMPLOYEES (June 10, 1996) (on file
with the StanfordLaw Review) [hereinafter HOUSE REGULATION]. The House Regulations are also
available on the House web page at http://www.house.gov./ethicsIldf.htm.
172. SENATE REGULATION, supra note 170, at ch. 1, § B. The Senate Regulation also indicates that such funds may not be used "for purely personal matters, [including] ...divorces" Id.
Recently, however, the Senate Ethics Committee authorized a Senate staffer to set up a fund to pay
for her legal expenses in appealing an adverse child custody decision because "the judicial decision
appears to implicate service in the Senate as a significant factor" in denying her request for custody.
Glenn R. Simpson, Ethics PanelApproves Legal Fundfor Staffer Whose Long Hours Denied Her
Custody of Kids, ROLL CALL, Sept. 5, 1994, available in LEXIS, News Library, RolIcl File (quoting the Ethics Committee decision).
HeinOnline -- 50 Stan. L. Rev. 98 1997-1998
November 1997]
HEIGHTENED ETHICS SCR UT1NY
tion or fitness for office, or any criminal prosecution. 173
One of the justifications for a special regulation concerning legal defense
funds is that a federal official, by reason of her position, is subject to legal
fees she would not encounter "but for" her federal position. 174 Especially in
light of the increasing political use of ethics and other charges against public
officials, this justification may be persuasive in most situations. But the
House's decision to allow LDFs to be used in any criminal prosecution, regardless of its connection to the official's duties, appears to be overly
175
broad.
The Senate sets the maximum LDF donation at $10,000 per year, 176 and
the House at $5000 per year. 177 Under these rules, a person may contribute
$60,000 to a senator's legal defense fund over the senator's six-year term.
This is in stark contrast to the maximum $2000 in campaign contributions
allowed during that same period. 78 The justification for limiting donations
at all-both in the context of campaign finance and in the context of legal
defense funds-is the belief that donations over a certain amount may unduly
influence a politician.
The limits on campaign contributions were enacted after the disclosure
that millions of dollars in cash had been secretly donated to President
Nixon's reelection effort. 179 As a matter of law, the Supreme Court resolved
173. See HOUSE REGULATION, supra note 171, § 2.
174. See SENATE REGULATION, supra note 170, at Foreward [sic] (explaining that the Senate
rules on gifts and unofficial office accounts "may place Members, officers, and employees at a disadvantage... relative to their fellow citizens, should the latter choose to raise funds to defray legal
expenses which they incur... To eliminate any doubt as to the permissibility... of... accepting
funds to defray... legal expenses, the Senate" authorized its legal defense fund regulation.). Compareid. with 1981 Special ProsecutorHearing,supra note 74, at 6 (justifying the reimbursement of
legal fees under the IC statute).
175. Since members first used LDFs in response to the Abscam bribery prosecutions, the
House may not have wanted to suggest that allegations of bribery arise out of a member's congressional duties. But members have also used LDFs in connection with charges completely unrelated
to their congressional duties. Senator Kay Bailey Hutchison, for example, raised over $880,000 to
defend herself against charges that she misused state resources when she was Texas State Treasurer.
See Carter, supra note 8, at 152 n.51; Sue Anne Pressley, Judge OrdersAcquittal of Sen. Hutchison: T-ras ProsecutorRefuses to Present Case Without EvidentiaryRuling, WASH. POST, Feb. 12,
1994, at Al. Representative Floyd H. Flake raised over $100,000 to defend himself against charges
that he embezzled church funds. See How They Pay Their Legal Bills, 25 NAT'L J. 2522 (1993);
see also Michael Specter, CaseAgainst Rep. Flake Dropped: Ruling Weakened Prospectsfor Conviction on Fraud,Tax Charges,WASH. POST, Apr. 4, 1991, at A10.
176. See SENATE REGULATION, supra note 170, at ch. 3, § B.
177. See HOUSE REGULATION, supra note 171, § 8.
178. Under the Federal Election Campaign Act Amendments of 1974, Pub. L. No. 93-443, 88
Stat. 1263 (1974) (codified as amended in scattered sections of 2 U.S.C. §§ 431-455 (1994)), individuals are permitted to give $1000 for the primary election and another $1000 for the general election. See 2 U.S.C. § 441a(a)(1)(A), (a)(6).
179. See HERBERT E. ALEXANDER, FINANCING POLITICS: MONEY, ELECTIONS, & POLITICAL
REFORM 29-33 (1992).
HeinOnline -- 50 Stan. L. Rev. 99 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
the constitutionality of these limits in Buckley v. Valeo.180 But as a matter of
policy, it is not obvious that these dollar limits are the panacea they were
once thought to be. Instead, the influence of a few large donors may well
have been replaced by the influence of a few productive fundraisers-persons who are often lobbyists and can call upon a network of contacts to donate to a campaign or legal defense fund. 811
Senate employees who set up LDFs must file quarterly reports disclosing
82
any donations from persons who contribute more than $25 in a year.
House employees with LDFs also must file quarterly reports, but they must
disclose all donations from corporations and labor unions as well as any donations over $250.183 Although some scholars have pointed out that there is
such a thing as too much disclosure, 8 4 disclosure serves a prophylactic purpose in the case of legal defense funds. An employee who needs to pay for
her legal representation may be particularly vulnerable to manipulation or
undue influence by those donating to her legal defense fund.
Senate rules prohibit the acceptance of contributions from seven types of
donors: other Senate employees, corporations, unions, foreign nationals,
campaign committees, 8 5 registered lobbyists, and registered agents of for180. 424 U.S. 1, 20-35 (1976).
181. See Alison Mitchell, Building a Bulging War Chest: How Clinton Financed His Run,
N.Y. TIMEs, Dec. 27, 1996, at Al (describing Clinton's fundraising methods, including the Democratic National Committee's 170-member "Financial Advisory Board" for persons who pledged to
raise at least $350,000); see also Klaidman, supra note 15, at 4 (arguing that limiting contributions
to $100 would "make[] it harder and more time-consuming to raise money for the fund. And if the
president relies on volunteers to spend their time beating the bushes for donations, what kinds of favors might they expect in return for their time and hard work?").
182. See SENATE REGULATION, supra note 170, at ch. 4, § B. This disclosure provision is
considerably more exacting than the standards for disclosing other types of gifts, which must be
disclosed only if they exceed $250 per year from a single source. See 5 U.S.C. app. § 102(a)(2)(A)
(1994); SENATE RULE XXXV § l(a).
183. See HOUSE REGULATION, supra note 171, § 13. The requirement for disclosure of legal
defense fund contributions is more exacting than the disclosure rule for other gifts in two ways.
First, it requires disclosure by all House employees with legal defense funds rather than only by
those employees who are highly paid. Compare id. with 5 U.S.C. app. §§ 101(f)(9)-(10), 109(13),
and HOUSE RULE XLIV § 2. Second, it requires disclosure of all contributions from corporations
and unions, no matter how small, rather than only of those corporate and union gifts that exceed
$250 in a year. Compare HOUSE REGULATION, supra note 171, § 13(a), with 5 U.S.C. app. §
102(a)(2)(A) and HOUSE RULE XLIV § 2.
184. For further discussion of the justifications for public financial disclosure obligations and
their excesses, see generally Joel L. Fleishman, The Disclosure Model and Its Limitations, 11
HASTINGS CENTER REP. 15 (1981), and John A. Robr, FinancialDisclosure:Power in Search of
Policy, 10 PUB. PERSONNEL MGMT. J. 29 (1981). For a much earlier discussion of these issues, see
generally James M. Grant, Analysis of FinancialDisclosureLaws ofPublic Officials, 18 ST. LoUIS
U. L.J. 641 (1974).
185. See SENATE REGULATION, supra note 170, at ch. 3, § A. Four of these five prohibited
categories parallel statutory prohibitions in related contexts. The prohibition on accepting a donation from a Senate employee is similar to, but broader than, the prohibition on a government official's acceptance of gifts from any federal employee who has a salary lower than the recipient. See
HeinOnline -- 50 Stan. L. Rev. 100 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
eign governments and political parties. 186 House rules prohibit the acceptance of donations from four types of donors: registered lobbyists, registered
agents of foreign governments 87 and political parties, anyone "whose interests may be substantially affected by the performance or nonperformance of
the individual's official duties,"' 188 and anyone "seeking official action from.
. the individual's employing entity." 189 With respect to these last two cate-
gories, a House employee may accept an otherwise prohibited gift if it is
from a member of her family or a personal friend. 190
The prohibitions on LDF donations from lobbyists were adopted by the
House and the Senate in 1995.191 These particular restrictions may make it
much more difficult for members to raise money for legal defense funds because it appears that lobbyists have been a major source of contributions in
the past. 92 On the other hand, neither the House nor the Senate restricts a
lobbyist's ability to act as a fundraiser for a member's LDF.
These congressional regulations are effective in several respects. They
have enabled members of Congress-although not staff-to raise the substantial amounts of money needed for legal representation. 193 They have
provided some protection for the public by requiring regular disclosure of
5 U.S.C. § 7351(a)(3). The prohibitions on gifts from foreign nationals, corporations, and unions
parallel the federal election law's prohibition on the acceptance of political contributions from such
persons or entities. See 2 U.S.C. §§ 441b, 441e (1994). For a discussion of the historical origins of
the ban on political contributions by corporations and unions, see ROBERT E. MUTCH, CAMPAIGNS,
CONGRESS, AND COURTS: THE MAKING OF FEDERAL CAMPAIGN FINANCE LAW 152-57, 165-66
(1988).
186. See SENATE RULE XXXV §§ l(c)(5), 3(c).
187. See HOUSE REGULATION, supra note 171, § 9.
188. 5 U.S.C. § 7353(a)(2); see also HOUSE REGULATION, supra note 171, § 10 ("Otherthan
as specifically barredby law or regulation,a Legal Expense Fund may accept contributions from
any individual or organization .. ")(emphasis added).
189. 5 U.S.C. § 7353(a)(1).
190. See HOUSE RULE LII §§ 1(c)(3), (4). Gifts that are more than $250 in value may be accepted from personal friends only after being cleared by the House Committee on Standards of Official Conduct. See id. § 1(e).
191. See HOUSE RULE LH; SENATE RULE XXXV.
192. See Tony Snow, Clintons' Legal Expense Fund Breaks the Rules, If Not the Law, CHI.
TRIB., Aug. 15, 1994, at 13 (noting the fear of the executive director of the Clinton Presidential Legal Expense Trust that any restriction on gifts from lobbyists would make it "very, very difficult to
accomplish the missions for which the trust was created").
193. See Klaidman, supra note 15, at 4 ("[L]egal defense funds are most effective for highprofile defendants ....[For someone.., who enjoys little name recognition and is unlikely to stir
any political faction, raising any significant sums would be tough."); see also Table mI (listing the
amounts donated to congressional members' legal defense funds). One of the only Senate staffers
to raise a significant amount of money for her legal defense fund is Sharon Prost, Senate Judiciary
Committee aide to Senator Orrin Hatch. Prost's LDF was to support her custody battle against her
ex-husband. The Senate Ethics Committee decided that, in this particular case, the custody battle
was related to her government employment because the judge had denied her request for custody
based in part on the hours she worked at the Senate. See Simpson, supra note 172.
HeinOnline -- 50 Stan. L. Rev. 101 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
major donors, 194 and journalists often take advantage of this disclosure and
write stories about who has given how much money to which legal defense
95
funds.
Apart from the new prohibition on donations from lobbyists, however,
there are very few restrictions on who can give money to legal defense funds.
Even in the House, where legal defense fund contributions are also subject to
the gift statute's "prohibited source" rule, a committee chair may accept
contributions of $5000 per year from persons who have a stake in the legislation that is before her committee. 96 While the House Ways and Means
Committee was considering comprehensive healthcare reform, its chairman,
Dan Rostenkowski, accepted $5000 contributions from insurance companies, 197 hospitals, doctors' associations, pharmaceutical companies, and others who had a substantial stake in the work of that committee. 198 Because the
portfolio of members of Congress is so broad, it may be impossible to have
legal defense funds if gifts are prohibited from anyone "whose interests may
be substantially affected by the performance or nonperformance of the
[member's] official duties," as the gift statute suggests. 99
2.
Donations based on an official'sposition.
A government official may not accept a gift that has been given because
of her governmental position. If one were to apply this principle to legal de194. In June 1996, the House significantly strengthened its disclosure provisions by requiring
quarterly rather than annual disclosure of contributions. See note 183 supra and accompanying
text.
195. See, e.g., Harvey Berkman, Legal Defense Funds Are Pols' Latest Perks, NAT'L L.J.,
Dec. 11, 1995, at Al; Krauss, supra note 171, atB7; Who Raised How Much, NAT'LL.J., Dec. 11,
1995, at A22; Pete Yost, Lawmakers in Legal Woes Raise Big Bucks to Pay Bills: From Michael
Jackson to Lobbying Groups,Donors Come Through with Funds, AUSTIN-AM. STATESMAN, June
16, 1995, at A6.
196. Under the gift statute, the definition of "prohibited sources" is narrower for the legislative branch than for the executive branch. Executive branch employees may not accept gifts from
anyone who "conduct[s] activities regulated by [the employee's] employing entity." 5 U.S.C. §
7353(a)(1) (1994). Members of Congress and congressional staffers are permitted to accept gifts
from those who are regulated by Congress or the committees on which they serve. For a discussion
of the merits of this different treatment of the legislative and executive branches, see Kathleen
Clark, Do We Have Enough Ethics in Government Yet? An Answerfrom FiduciaryTheory, 1996 U.
ILL. L. REv. 57, 82-83.
197. See CLERK OF THE HOUSE OF REPRESENTATIVES, FINANCIAL DISCLOSURE REPORTS OF
MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES OF THE 103D CONGRESS FOR THE PERIOD
JAN. 1, 1993 TO DEC. 31, 1993, H.R. DOC. 103-286, at 4114-24 (1994) (noting that Rostenkowski
received $5000 each from CNA Financial Corp. and Metropolitan Life Insurance Co.).
198. See, e.g., Jeff Gerth, Rostenkowski Donors Had Stakes in Bills, N.Y. TIMES, June 11,
1994, at 10 (reporting on the list of donors to Rostenkowski's legal defense fund); see also
Greenfield, supra note 15, at A21 ("No one thinks these men and others like them should be without funds for a legal defense. But can anyone think it is a good idea for them to get those funds
from people with pressing business before the government?").
199. 5 U.S.C. § 7353(a)(2).
HeinOnline -- 50 Stan. L. Rev. 102 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
fense funds, it could cause particular problems. This illustrates why it is
necessary to provide a distinct regulatory regime for legal defense funds. On
the one hand, in a general sense, this restriction on receiving gifts because of
position is entirely appropriate. A government official occupies a fiduciary
position. Therefore, the gifts she receives by reason of that position rightly
belong to the government, not to herself.2°° On the other hand, applying this
otherwise appropriate restriction in the context of legal defense funds may
make it nearly impossible for employees to raise funds for their sometimes
extraordinarily large legal expenses. Fiduciary theory supports a more flexicircumstances, an exble approach and suggests that, under the particular
20 1
ception for legal defense funds is appropriate.
A problem related to the fiduciary dilemma is that legal defense funds
enable members to benefit personally from their positions within Congress.
Of the thirteen members who have been able to raise more than $100,000 for
their legal defense funds, eleven have been the chair or ranking minority
member of at least one committee or subcommittee. 20 2 Less powerful mem200. See Reading v. Attorney-General, 1 All E.R. 617, 619 (H.L.) (1951).
201. See Clark, supra note 196, at 78.
202. Senator Alan Cranston raised more than $300,000 for his legal defense fund while he
was chair of the Veterans' Affairs Committee and the Subcommittee on Housing and Urban Affairs
of the Banking Housing and Urban Affairs Committee. See Glenn R. Simpson, Glenn Digs Into
Own Pocket to Pay $528,000 in Legal Feesfor Defense in Keating 5 Case, ROLL CALL, Apr. 2,
1992, availablein LEXIS, News Library, RolIlcI File.
For information on Cranston and other politicians' committee memberships, see generally
CONGRESSIONAL QUARTERLY'S POLITICS IN AMERICA (Phillip Duncan ed.) for the years 1989,
1991, 1993, and 1995, which detail the positions of members of Congress.
Senator Alfonse D'Amato raised $417,000 while he was the ranking member of the Subcommittee on Housing and Urban Affairs. See Viveca Novak, Passingthe Hat, 25 NAT'L J. 2520, 2521
(1993); see also Krauss, supra note 171, at B7 ("With large donations from executives of Bear
Steams, First Boston, Goldman Sachs and the Starrett Housing Corporation, Mr. D'Amato amassed
$366,000 for his legal expense trust fund in just over four months ... ").
Senator David Durenberger, ranking member of the Medicare and Long Term Care Subcommittee of the Finance Committee, raised more than $500,000 in recent years. See Glenn R. Simpson, Hatch Legal Fund Has Lucrative Quarter,Including S100,000 from Ten Individuals, ROLL
CALL, Oct. 21, 1993, availablein LEXIS, News Library, Rollcl File.
Representative Harold E. Ford, the senior member of the majority party on the Human Resources Subcommittee of the Ways and Means Committee, raised more than $400,000 for his legal
defense fund by 1994. Ford would have been chair, but he had to step aside after he was indicted
on bank fraud charges. See How They Pay Their Legal Bills, supra note 175, at 2522.
Senator Tom Harkin raised $162,000 while he was chair of three subcommittees. See Glenn
R. Simpson, Harkin,At Last, Retires Legal Debt with Helpfrom Lobbyist Donors,ROLL CALL, Jan.
16, 1992, availablein LEXIS, News Library, Rollcl File.
Senator Orrin Hatch raised $219,000 while he was the ranking member of two subcommittees
and the Judiciary Committee. See Carter, supra note 8, at 152 n.43.
Senator Mark 0. Hatfield raised $139,815 while he was ranking member of the Appropriations
Committee and its Subcommittee on Energy & Water Development. See How They Pay Their Legal Bills, supra note 175, at 2522.
Representative Joseph McDade raised more than $470,000 while he was ranking minority
HeinOnline -- 50 Stan. L. Rev. 103 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
bers appear to have more difficulty raising significant sums for their legal defense funds.20 3 Congressional staffers have had even less success in raising
significant sums of money. 204 This finding is consistent with the political
science literature showing that members of Congress who occupy leadership
positions on committees receive significantly more in political contributions
from political action committees than do other members who do not have
such positions. 205 Thus, there is strong evidence that a member's ability to
member and later senior member of the majority party of the Appropriations Subcommittee on Defense. See Susan Schmidt, For Indicted Members of Congress, Clout Keeps the Cash Coming,
WASH. POST, Nov. 6, 1994, at A33.
Senator Bob Packwood raised $637,000 while he was ranking minority member and later chair
of the Finance Committee and the Joint Committee on Taxation. See Mary Jacoby, Lobbyists Contributed to PackwoodAs EthicsPanel Voted to Expel Him, ROLL CALL, Oct. 23, 1995, availablein
LEXIS, News Library, Rollcl File; see also Jonathan D. Salant, Packwood Defense Fund Grows
with His FinancePanel Power, CONG. Q. WKLY. REP., June 3, 1995, at 1561 ("Health care interests increased their contributions to Sen. Bob Packwood's legal defense fund once the Oregon Republican was assured the chairmanship of the Finance Committee, which has jurisdiction over the
issue.").
Representative Dan Rostenkowski raised $758,350 in just five months while he was chair of
the Ways and Means Committee and the Joint Committee on Taxation. See Charles R. Babcock,
Defense FundSwells by $758,350: Lobbyists Give to Rostenkowski, WASH. POST, June 11, 1994, at
A12.
Representative Don Young raised $110,350 while he was ranking member of the Natural Resources Committee and two subcommittees. See Carter, supra note 8, at 167 n.66.
Two members of Congress managed to raise more than $100,000 even though they lack the
traditional measure of power. Representative Floyd Flake raised $199,000. See id. at 160 n.55.
Senator Kay Bailey Hutchison raised more than $880,000 in her first short term in office. See id. at
152 n.51. For an empirical analysis of using the status of committee chair or ranking minority
member as a proxy for power within Congress, see Janet Grenzke, CandidateAttributes and PAC
Contributions, 42 WESTERN POL. Q. 245, 249 (1989) ("[T]hose who exercise agenda power are
high ranking majority and minority members of committees and subcommittees working with relevant legislation.")
203. Susan Schmidt describes the link between cash and power as follows:
[Ploliticians without clout cannot count on much help from special interests... when they get
into legal trouble.
Freshman Democratic Rep. Mel Reynolds has not raised a dime from his Chicago constituents since he was indicted in August on a string of charges including sexual assault ....
All he has collected since the indictment are two PAC contributions ....
Another freshman Democrat, California Rep. Walter R. Tucker III, is in much the same
situation.
Schmidt, supra note 202, at A33.
204. See Eva M. Rodriguez & Nafiali Bendavid, Clinton LDF Faces DelicateFund-Raising
Job, LEGAL TIMES, July 4, 1994, at I ("Those who have it tough [raising money], says Benjamin
Ginsberg, former general counsel of the Republican National Committee, are the relatively unknown people who are caught up in politically motivated legal tangles and have few resources to
pay their legal bills.").
205. See JOHN THEILMANN & AL WILHITE, DISCRIMINATION AND CONGRESSIONAL
CAMPAIGN CONTRIBUTIONS 95 (1991) (providing a chart showing a positive correlation between
committee chairmanships or congressional leadership positions and PAC contributions); Grenzke,
supra note 202, at 255 (explaining that the most powerful members of Congress receive more con-
HeinOnline -- 50 Stan. L. Rev. 104 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
raise legal defense and campaign funds is related to her power within Congress. This conclusion, although not surprising, is nonetheless troubling because it indicates that members are reaping personal benefits from their positions within Congress. It was concern about this same type of phenomenon-members "cashing in" on their government service-that led to the ban
on members being able to convert campaign contributions to their personal
use.
20 6
For several reasons, the correlation between congressional position and
the ability to raise legal defense funds is even more troubling than the parallel correlation between congressional position and the ability to garner campaign funds. The personal benefit that accrues to a politician from campaign
contributions-more time in public office-is merely incidental to the contribution's primary purpose: enabling the contributor to express her electoral
and political preferences. But contributions to legal defense funds do not
have this same expressive component.20 7 In addition, legal defense fund
contributions financially benefit government officials in ways that campaign
contributions do not because these officials are personally liable for their legal expenses, but not for their campaign expenses.208 Congressmembers' acceptance of personal benefits derived from their government position is inconsistent with their fiduciary position.
In light of the personal financial benefit to the member, legal defense
funds may be the successor to honoraria as a way for special interests to line
members' pockets. 20 9 As one critic put it, legal defense funds are "yet antributions than the least powerful members of comparable rating, party affiliation, and electoral
competitiveness); see also KENNETH A. SHEPSLE, THE GIANT JIGSAW PUZZLE: DEMOCRATIC
COMMITTEE ASSIGNMENTS INTHE MODERN HOUSE 149-150 (1978) (describing the power derived
from membership on the House Ways and Means Committee); cf.Thomas Romer and James M.
Snyder, Jr., An EmpiricalInvestigation of the Dynamics of PAC Contributions, 38 AM. J. POL. SCI.
745, 762 (1994) (describing how shifts in committee membership can result in more PAC contributions, especially with moves to the House Ways and Means Committee because of its importance to
trade).
206. See 2 U.S.C. § 439(a) (1994) ("Amounts received by a candidate as contributions...
[may not] be converted... to any personal use.")
207. See Rodriguez & Bendavid, supra note 204, at I (quoting Larry Sabato as saying, "In a
campaign, there is a clear public purpose involved. This is almost a personal endorsement of [the
donee] at a time of great personal stress and difficulty, and much more than in a campaign, contributions to this fund would create a [political] debt.").
208. See Lobbyists Pay Tribute with Millionsfor (Legal) Defense, CHI. TRiB., June 4, 1994, at
I ("Contributions to help pay lawyers are more personally beneficial to members of Congress than
donations to their campaign committees. Members are indebted personally to their lawyers.").
209. See Peter Carlson, Dan Rostenkowski Goes Down in History, WASH. POST MAG., Oct.
17, 1993, at Wl0, W36. Carlson notes that
[w]hen you're the chairman of the Ways and Means Committee, people just love to give you
money and other nice things.... Although (Rostenkowski] is not an orator to rival Churchill,
he regularly led his congressional colleagues in the collection of honoraria ....He was, in
fact, the undisputed King of Honoraria.
HeinOnline -- 50 Stan. L. Rev. 105 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
other way ...for special interests to do a favor for" members. 210
IV. RECOMMENDED REFORMS
There may be no simple solution to the problem of how to deal with
government officials' legal expenses. Political reformers, editorial writers,
and other observers have all commented on the difficulty of dealing with this
issue. 21 1 Nevertheless, one can identify several legal reforms that would
provide greater fairness for these government officials.
A. End OverreimbursementUnder the Independent Counsel Statute
Most government employees who get caught up in IC investigations do
not qualify for any reimbursement under the IC statute. 2 12 Yet in the fifteen
years since the enactment of the fee provision, twenty-nine individuals have
been awarded more than four million dollars in legal fees, some more than a
half million dollars apiece. 213 The court's interpretation of the IC statute's
fee provision has resulted in a pattern of overreimbursing those applicants
who qualify for reimbursement at all, transforming the IC statute into a small
but thriving entitlement program for the elite white collar crime bar.
The primary cause of this overreimbursement is the court's failure to require that applicants be held personally liable for their attorneys' fees. The
court has awarded hundreds of thousands of dollars in legal fees even when
the applicant's retainer agreement with her lawyers is structured in such a
way that she will not be responsible for all of her lawyers' claimed
charges. 21 4 The court's approach is contrary to the IC statute's own lanId.; PresidentMight Seek Donations,supra note 18, at A3 ("Ellen Miller of the Center for Responsive Politics said that a legal defense fund is 'just another envelope for [special interests] to put cash
into. Just because it is legal does not make it right."').
210. Carlson, supra note 209, at W40.
211. See, e.g., WALDEN, supra note 8, at 317 ("President Clinton, facing the prospect of
enormous legal bills that would eclipse his income, was presented with several alternatives, none of
them very attractive."); Editorial, Mr. Clinton'sLegal Bills, WASH. POST, May 11, 1994, at A20
("There really is no good solution to the problem of how to pay the legal bills President Clinton will
face as a result of Paula Jones's lawsuit and the assorted difficulties created by the Whitewater controversy."); Jehl, supra note 115, at A15 (quoting Ellen Miller, then executive director of the Center
for Responsive Politics, an electoral reform organization, who described the situation facing President Clinton this way: "This is one of the stickiest wickets I have seen in a long time.... There
isn't any good answer to it. I am just immensely wary of all the potential that funds like this offer
for people to gain access or influence by raising money."); Burt Solomon, A Question with No
Good Answers: Who'll Pay Clinton'sLegal Bills?, 25 NAT'L J. 1202 (1994).
212. See Mansukhani, supra note 8, at 105-06 ("[T]he restrictive interpretation of the statute
has made the supposed protection against financial harm more a fiction than a reality.").
213. The court has awarded over $4 million. See Table n.
214. For example, while Edwin Meese was investigated by Independent Counsel Jacob Stein,
Meese's retainer agreement with his law firm "provided that the firm would accept the amount the
court awarded unless the three-judge panel 'were to substantially deny payment."' Ronald J.
HeinOnline -- 50 Stan. L. Rev. 106 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
guage, which authorizes the reimbursement of legal fees incurredby the applicant. 215 The phrase "fees incurred" means those fees for which the applicant is personally liable.21 6 Other federal statutes, by contrast, authorize the
award of legal fees to compensate the applicant's lawyer,2 1 7 regardless of
whether the applicant intended to pay her lawyer. The court has failed to
21 8
take note of this difference in the statutory language.
As a result of the court's approach, an applicant has no incentive to scrutinize her lawyer's bills for unreasonable charges. The applicant, as client, is
in the best position to provide such scrutiny. Under the current system, the
lawyer submits the unexpurgated bills to the court, which then examines
them for inappropriate charges. If the court excludes particular charges as
"unreasonable," the lawyer apparently does not require the client to pay these
charges either. So rather than employing the reimbursement system established by the language of the IC statute, the court has operated the fee awards
as a third-party payment system. Not surprisingly, the inefficiencies inherent
in such a payment system 219 infect the process.
Ostrow, Meese Awarded $472,000 for Fees in Inquiry, L.A. TIMES, June 8, 1985, at 1. The firm
claimed $533,327 in legal fees, but accepted the court's award of $357,515 as full payment See id.
Another Meese lawyer, E. Robert Wallach, said he "considered his $76,870 portion of the award
'full compensation for my legal services,"' even though he had submitted a bill for $142,562. Id.
In a few cases, the court paid close attention to the statutory language and refused to award
any fees where the lawyer had agreed not to charge the client. See In re North (Langton and Mason
Fee Application), 32 F.3d 609, 609-10 (D.C. Cir. 1994) (denying request for $74,431.71 because
applicants were not legally liable for legal fees, which were being paid by their employer); In re
North (Watson Fee Application), 32 F.3d 607, 607-09 (D.C. Cir. 1994) (denying request for
$18,100 in legal fees because applicant's obligation to pay his lawyer was so vague that he was not
legally liable for the fees).
215. See 28 U.S.C. § 593(f)(1) (1994) ("Upon the request of an individual . . . the court
may... award reimbursementfor those reasonable attorneys' fees incurred by that individual ...
(emphasis added)).
216. See MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 590 (10th ed. 1993) (defining "incur" as "to become liable or subject to"); see also In re North (Watson Fee Application), 32 F.2d at
609 (explaining that a client who is not obligated to pay his lawyer has not "incurred fees")
217. See, e.g., 5 U.S.C. § 552(a)(4)(E) (1994) ("The court may assess against the United
States reasonable attorney fees ... in any case under [the Freedom of Information Act] in which the
complainant has substantially prevailed."); 16 U.S.C. § 1540(g)(4) (1994) (noting that, in suits under the Endangered Species Act, "[tihe court... may award costs of litigation (including reasonable
attorney.., fees) to any party... ."); 42 U.S.C. § 1988(b) (1994) (noting that, in civil rights lawsuits, "the court... may allow the prevailing party... a reasonable attorney's fee as part of the
costs"). For a review of federal statutes that authorize the award of attorneys' fees, see 1 ROBERT
L. Rossi, ATrORNEYS' FEES § 10 (2d ed. 1995).
218. See Fred Strasser & David Lauter, $720,000 Bill Raises Host of Issues: Does Meese
Have to Pay Lawyers?, NAT'L L.J., Feb. 11, 1985, at 5. Jacob Stein, the IC who investigated Edwin
Meese, noted in his response to Meese's fee request that the IC statute "used the words 'reimbursement' and 'incurred' in describing the attorney fees covered by the Act. 'Arguably, a determination
is required to determine what fees, if any, Meese has actually obligated himself to pay counsel in
connection with this investigation."' Id.
219. See Beverly J. Fox, Lori L. Taylor & Mine K. Yucel, America's Health Care Problem:
HeinOnline -- 50 Stan. L. Rev. 107 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
A client also has no incentive to negotiate reasonable hourly rates for her
lawyer's time. Many of the government officials investigated by ICs have
not hesitated to hire some of Washington's most expensive white collar
criminal defense lawyers, who have charged, and been paid, up to $370 per
hour.22 0 The court has not balked at these billing rates, but has scrutinized
the bills for duplication or other inappropriate charges in order to reduce the
amount awarded. The court should not be forced into this exercise where
applicants themselves have little incentive to negotiate for a discounted rate.
Congress complained about the court's practice of paying high hourly
rates when it most recently reauthorized the IC statute,221 but the court has
continued to award top dollar to lawyers because Congress expressed its disapproval only in the conference report, not in the statute itself22m Given the
court's solicitude toward the high-priced lawyers of IC fee applicants, Congress will need to amend the language of the IC statute itself rather than rely
3
on legislative history.22
An Economic Perspective, ECON. REV., Third Quarter 1993, at 21 ("By its nature, health insurance
makes consumers less sensitive to health care prices, thereby generating more expenditures on
health care than would otherwise occur."); Lawrence Kudlow & Stephen Moore, PhysiciansHeal
Themselves: The Good News for Consumers-DecliningHealth-CareInflation-Is Bad News for
the White House, 46 NAT'L. REV. 52, 54 (1994) ("The major culprit in the seemingly endless rise in
health-care costs is the removal of the patient as a major participant in the financial and medical
choices that are currently being made by others." (quoting a Cato Institute study by Stan Liebowitz)); William V. Roth, Jr., Legislative Commentary. MedicalSavings Accounts, 11 J. CONTEMP.
HEALTH L. & POL'Y 149, 152-53 (1994).
220. See, e.g., In re North (Shultz Fee Application), 8 F.3d 847, 851-53 (D.C. Cir. 1993) (allowing $370 per hour and awarding more than $280,000 in fees and expenses); In re Meese, 907
F.2d 1192, 1202, 1204 (D.C. Cir. 1990) (allowing $300 per hour and awarding over $460,000 in
fees); In re Donovan, 877 F.2d 982, 983, 993 (D.C. Cir. 1989) (allowing $350 per hour and awarding $72,875 in fees).
221. Congress attempted to clarify its intent:
Congress did not intend that properly recoverable attorney fees under this statute be construed
to be what the market will bear in the private sector. Rather, Congress intends that the reasonableness of attorney fee requests ... be judged, not solely with reference to the rates commanded by expensive legal counsel, but also with reference to what cost is reasonable for the
taxpayers to bear.
H.R. CONF. REP. No. 103-511, at 14 (1994).
222. See In re North (Bush Fee Application), 55 F.3d 184, 195 (D.C. Cir. 1995) (allowing up
to $375 per hour and awarding more than $270,000 in fees); In re North (Shields and Gruner Fee
Applications), 53 F.3d 1305, 1307-09 (D.C. Cir. 1995) (allowing $300 per hour and awarding more
than $70,000 in fees); see also Independent Counsel Reauthorization Act of 1994, Pub. L. No. 103270, § 7(a), 108 Stat. 732, 737 (1994).
223. See In re North (Richard L. Armitage Fee Application), 50 F.3d 42, 45 (D.C. Cir. 1995)
("It is settled law that when a statute has an authoritative interpretation, and Congress reenacts it
without change, 'Congress is presumed to be aware of [the] interpretation ... and to adopt that interpretation .... ').
HeinOnline -- 50 Stan. L. Rev. 108 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
B. Provide Better Representation Optionsfor Witnesses and Lower Level
Officials
Part II, Section A of this article showed how the Justice Department has
been unwilling to reimburse government officials who hire lawyers in response to criminal investigations. In light of this unwillingness, some have
called for the Justice Department to broaden the availability of reimbursement for government officials cleared of wrongdoing. 224 At least two states
provide much broader reimbursement to their employees. New York and
New Jersey reimburse employees for the legal expenses they incur when
called to testify before a grand jury and when acquitted of criminal
2
charges. 25
The Justice Department's unwillingness to reimburse employees may be
due to legitimate concerns about cost. To a significant degree, the increased
costs of a more expansive reimbursement program could be offset by ending
overreimbursement under the IC statute. But it seems unlikely in these times
of budget woes that either a departmentally initiated policy change or legislation forcing such a change would be politically palatable.
Nonetheless, there are still several structural flaws that can and should be
addressed. First, the Justice Department should articulate with more specificity the standard it applies in making these reimbursement decisions. The
current articulation-whether representation is "in the interest of the United
States"--does not provide adequate guidance. Second, the Justice Department could make public its reimbursement decisions, the bases for these decisions, and the cost of its reimbursement program. Currently, none of this
information is made public. Under these circumstances, there is a legitimate
concern that the decisions may be arbitrary or politically driven.
Even if the Justice Department implements these procedural reforms, it
224. In 1990, Senator Orrin Hatch sponsored a bill to ensure that junior Justice Department
employees will be reimbursed for legal fees if they are cleared of wrongdoing. See Scott Turow,
When Law Imitates Art, N.Y. TIMES, Oct. 19, 1991, at 23. Turow incurred nearly $50,000 in legal
fees in defending his actions as an Assistant U.S. Attorney. See id.
225. See N.Y. PUB. OFF. LAW § 19(2)(a) (McKinney 1988). State employees are reimbursed
for their legal representation before a grand jury as long as they are not indicted. See id.; Joel
Cohen, Can a CriminalDefendant or Subject Recover the Costs of a Successful Defense?, N.Y.
L.J., Jan. 14, 1992, at I.
New Jersey's program is authorized under N.J. STAT. ANN. § 18A:16-6.1 (West 1994). See
Jennifer P. Heimmel, Teacher Is Entitled to Costs for Defense of Charges That Arise out of His
Status As a Teacher, N.J. LAW., Feb. 12, 1996, at 23 (describing Bower v. Board of Educ., 670
A.2d 106 (N.J. Super. Ct. App. Div. 1996), aff'd 694 A.2d 543 (N.J. 1997)).
For examples of foreign governments paying their government officials' legal fees, see The
Parliament of the Commonwealth of Australia, Payment of a Minister's Legal Costs, Report by the
Senate Legal and Constitutional References Committee (Sept. 1995); House of Commons, Comm.
of Public Accounts, 25th Rpt.: Payment of Legal Expenses Incurred by the Chancellor of the Excheqaer (Feb. 15, 1993).
HeinOnline -- 50 Stan. L. Rev. 109 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
may refuse to expand its reimbursement of fees incurred by "mere witnesses." For this reason, it is necessary to develop other private-sector responses to the problem faced by government officials in such circumstances.
The remainder of this section explores two such private-sector options: legal
defense insurance coverage and a pro bono legal services program.
The legal expenses incurred by government officials are something like
an unlucky lottery: Relative to the large number of federal employees, only
a few will encounter the kind of massive legal fees discussed in this article.
But for those few officials, the problem they face is large. This is precisely
the type of situation in which it is particularly appropriate to spread the risk
through insurance. What employees need is insurance for legal defense costs
rather than the more common insurance for tort liability. 22 6 Fortunately, at
least one insurance company provides partial coverage for federal employees' legal defense expenses. Under its insurance plan, the company will pay
up to $100,000 in defending an employee who has been accused of wrongdoing in a criminal or disciplinary proceeding.22 7 Unfortunately, this plan
denies coverage to "mere witnesses," the same group excluded from reim226. Other commentators have advocated this solution:
Howard Teicher, a National Security Council staffer in the Reagan administration who was investigated by Iran-Contra Independent Counsel Lawrence Walsh ... proposes a novel way to
combat the problem: "I truly believe that somebody should offer legal liability insurance for
political appointees and civil servants who find themselves faced with this quandary."
Klaidman, supra note 21, at 1. An added benefit of legal defense insurance is that the insurance
company that pays for the representation of many employees is in a better position to negotiate a
reasonable fee than any individual employee.
Two insurance companies that sold President Clinton umbrella liability policies have paid
about $1.5 million to Clinton's lawyers, at rates of up to $475 per hour. See Harvey Berkman,
Bennett Wins a Battle but Loses Clinton's Insurance, NAT'L L.L, Sept. 22, 1997, at A13. But it is
by no means clear that such umbrella insurance policies would come to the aid of lower ranking
government employees. See Harvey Berkman, President Sued (Again): Target: Bennett Fees,
NAT'L L.J., June 16, 1997, at A4 ("[A] State Farm spokesperson... says the president isn't just any
policyholder, so his hiring [a] $475-an-hour [lawyer] was reasonable."); see also David Rubenstein,
Bill Clinton's Bizarre Coverage Dispute: State Farm Policyholder Sues Company for Paying
President'sLiability Claim, 2 U.S. Bus. LITIG. 1 (1997) (describing claim that State Farm paid
Clinton's legal bills in order to influence the policy debate over whether banks could compete with
insurance companies).
227. The text of the policy reads as follows:
The Company shall select counsel and pay the costs of defense... arising out of any disciplinary proceedings.., or criminal proceedings instituted against the Insured from any act, error
or omission in professional services rendered ... in the Insured's professional capacity committed or arising during the period that the Insured is a full time employee of the United States
Government. The Company shall be liable for costs of defense except in criminal proceedings
to the extent that a finding, verdict or other final disposition unfavorable to the Insured shall
establish that the act, error or omission was criminal.
ACCEPTANCE INSURANCE COMPANY, PROFESSIONAL FEDERAL LIABILITY POLICY ENDORSEMENT:
ADDITIONAL EXPENSE COVERAGE (1996) (on file with the Stanford Law Review). Nearly 17,000
federal employees have bought this insurance coverage, which costs $266 per year. See Harvey
Berkman, Legal Insurance:Fringe Benefit?, NAT'L L.J., July 22, 1996, at A10.
HeinOnline -- 50 Stan. L. Rev. 110 1997-1998
November 1997]
HEIGHTENEDETHICS SCR UTNY
bursement under the IC statute. 228 Although the insurance policy currently
available does not adequately address the problem faced by an increasing
number of government officials, it does provide a model for the type of coverage that could be developed.
In the past, this insurance company has consulted closely with the Justice
Department to develop coverage that fills in the gaps created by the representation and indemnification policies of the Justice Department. This and
other insurance companies may well have an opportunity to develop a market
in insurance for the legal representation of employees who are witnesses in
proceedings against other officials. Congress could encourage the development of this market by authorizing partial reimbursement for employees who
229
enroll in an insurance plan that meets these requirements.
A second approach would be to encourage the bar to donate or discount
legal services for government officials in need of representation in criminal
or ethical investigations. The Senate has set up a structure permitting employees to accept donated legal services as long as certain safeguards are
231
met.230 Senate employees have been able to take advantage of this option.
Employees are required to disclose any such arrangements, and if they expect the value of those legal services to exceed $10,000, they may only use
those law firms or lawyers approved by the Senate Select Committee on
Ethics.2 2 When a law firm donates legal services in excess of $10,000 to a
228. See text accompanying notes 83-89 supra.
229. Last year, at the urging of two federal employee associations, Congress authorized certain agencies to reimburse managers and law enforcement employees for half of the premiums for
this insurance plan. See REPORT ON THE OMNIBUS CIVIL SERVICE REFORM ACT, H.R. REP. No.
104-831, at 29 (1996) (noting that the Senior Executives Association recommended that agencies be
authorized to purchase insurance for their employees); H.R. CONF. REP. NO. 104-863, § 636(a)
(1996); Mike Causey, FinancialSelf-Defense, WASH. POST, Oct. 20, 1996, at B2 (noting that the
Senior Executives Association urged the introduction of the bill). Ironically, White House employees were excluded from this reimbursement benefit. See H.R. CONF. REP. No. 104-863, §§ 636(b),
(c) (permitting payment by agencies that meet the requirements of 5 U.S.C. § 105); see also Haddon
v. Walters, 43 F.3d 1488, 1489-90 (D.C. Cir. 1995) (holding that the White House does not meet
the requirements of 5 U.S.C. § 105).
230. See SENATE REGULATION, supra note 170, at ch. 3, § B. Under the House Regulation,
most donations of legal services are subject to the same $5000 per year cap as cash donations.
HOUSE REGULATION, supra note 171, at §§ 4, 8. When an employee brings a civil challenge to the
validity of a federal law, or when she files an amicus brief in her official capacity, however, she is
not subject to this cap. See id. § 4.
231. For example, two aides of Senator Tom Harkin received $325,000 in pro bono help when
they were named in a libel suit filed by an aide to one of Harkin's opponents. See Novak, supra
note 202, at 2524. Also, several Senate Judiciary Committee aides received pro bono services in
the investigation of the Anita Hill leak. See Simpson, supra note 16.
232. See SENATE REGULATION, supra note 170, at ch. 3, § B. When an employee is not a defendant in a legal proceeding, she may accept donated legal services whose value exceeds the
$10,000 annual limit only if the Senate Select Committee on Ethics approves. See id.; see also S.
Res. 321, 104th Cong. (1996) (permitting senators to accept pro bono legal services for litigation
challenging validity of federal statute without law firm encountering the lobbying prohibition).
HeinOnline -- 50 Stan. L. Rev. 111 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
Senate employee, none of the firm's employees may lobby the client during
the representation and for six months afterward.2 3 3 Employees who accept
donated legal services are required to disclose both the relationship with the
234
law firm and an estimate of the value of the services received.
The Senate rule provides a good model of disclosure combined with a
lobbying ban that could be followed by the House of Representatives and the
executive branch. Unfortunately, neither has followed the Senate's lead.
The House rule on legal defense funds is silent on the issue of accepting donated legal services, and the executive branch has actively discouraged such
donations. In 1980, the Justice Department indicated that Carter White
House officials should not accept any donated or discounted legal services
because doing so could create the appearance that such services were offered
235
because of the employee's government position.
The Justice Department's position has some merit. Law firms and lawyers may well be motivated to donate or discount their services because of
the official's government employment. But there are several reasons why
the Justice Department's approach is not persuasive. First, these donating
lawyers may be motivated by a desire to work on interesting, high-profile
cases that may garner them publicity. 236 Second, they may see such work as
within their pro bono mission-an obligation to do work in the public interest regardless of a client's ability to pay. 237 Third, a law firm's decision to
provide discounted legal services may be no different from the decision of a
233. See SENATE REGULATION, supranote 170, at ch. 3, § B. In the cases of such legal services being donated to a senator, the firm is prohibited from lobbying not just the senator herself, but
also anyone supervised by the senator. See id.
234. Although the disclosure requirement is clear, in the past it has been ignored by many
Senate aides. See, e.g., Simpson, supra note 16 (noting that many aides involved in the Anita Hill
leak did not disclose that they had received pro bono legal services).
235. See Representation of White House Employees, 4 Op. Off. Legal Counsel 749, 749
(1980).
236. Beyond the immediate economic benefits, some lawyers see political controversy as a
surefire way to make their name in the highly competitive Washington legal market:
[S]ome firms cut their politically prominent clients sweet deals. After all, giving away a little
revenue on the front end is worthwhile if it helps to attract other prominent corporate and political clients down the road. [White House c]lients ...can be seen as "loss leaders," says one
lawyer who is representing a Whitewater client and asks not to be identified.
Daniel Klaidman, The High Cost of Turning Back Whitewater's Tide: Cash-Strapped Officials
Cope with DauntingLegal Bills, LEGAL TIMES, Mar. 14, 1994, at 1.
237. The following letter argues that, in assessing fees, lawyers should consider the client's
ability to pay:
[Washington, D.C.] has a long tradition of public service by law firms under which services
are provided at rates substantially below those charged for routine commercial work where the
public interest makes that appropriate.... Providing services on this basis would not constitute
an improper gift.., but rather a recognition that legal services ...need not be priced like consumer goods. They can and should take into account the ability of the client to pay.
Ridgway M. Hall, Jr., Letter to the Editor, WASH. POST, May 21, 1994, at A21.
HeinOnline -- 50 Stan. L. Rev. 112 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
rental car agency or an airline to provide government employees with a discount on their regular rates.
Finally, it may be appropriate to provide an exception to this prohibition
on gifts motivated by government position. The options available to these
government officials are limited and imperfect. As between donated legal
services and cash donated to pay a legal bill, there may be policy reasons to
prefer the donated legal services. 23 8 Given the difficulty that lower level officials face in raising legal defense funds, the donation of legal services may
be the lesser of two evils. The executive branch and the House of Representatives should develop regulatory structures that would permit employees to
accept donated or discounted legal services. These structures should include
appropriate safeguards, such as the kind of disclosure provisions and lobbying prohibition that the Senate has already adopted. 239
C. Improve the Regulation ofLegal Defense Funds
1. Promulgatean executive branch regulationspecific to legal defense
funds.
Under the position staked out by OGE, if an executive branch official
sets up a legal defense fund on her own behalf, donations to that fund are
subject to the restrictions of the gift statute and regulation. Some of the pro-
visions of the gift statute, such as the prohibition on accepting gifts from
anyone "conducting activities regulated by ... the individual's employing
entity," are extremely broad in scope, 240 thus making it difficult or impossible for executive branch officials to accept donations from anyone except
238. The campaign finance laws make a similar distinction. See 2 U.S.C. § 431(8)(B)(ix)
(1994). A lawyer may donate her legal services without any limit. On the other hand, someone
making a cash donation to pay for legal services is subject to the $1000 limit per election. See Federal Election Commission ("FEC") Adv. Op. 1990-17, Fed. Election Camp. Fin. Guide (CCH)
5993, at 11,640 (Sept. 21, 1990) (donation of legal services is exempt from contribution limits, but
donation of money to defray costs of legal services is not); FEC Adv. Op. 1977-5, Fed. Election
Camp. Fin. Guide (CCH) 5238, at 10,178 (Feb. 22, 1977) (explaining that funds donated to defray
legal expenses are subject to contribution limits, but an employer may donate an employee's legal
services without being subject to the contribution limits).
239. Another option would be for the employee to agree to pay the legal fees over time. It is
common for lawyers to allow clients to extend their payments beyond the time of representation.
See Ruth Marcus, Legal Fund Raises $608,000: Clintons Still Owe $981,000, WASH. PosT, Feb. 4,
1995, at Al ("[lit is not uncommon for law firms to carry . . . debts on their books for long
periods .... "). OGE has taken a dim view of such an arrangement. In fact, some employees have
in effect taken this approach when they incur more legal fees than their legal defense funds can pay.
Others wait to pay their lawyers until government reimbursement comes through. One problem
with this approach is that some may view the law firm's forbearance on the debt as a no-interest
loan, which would constitute a gift and therefore be subject to the gift restrictions discussed in Part
H. Cf Representation of White House Employees, 4 Op. Off. Legal. Counsel at 749 (1980) (discouraging white House employees from accepting discounted or donated legal services because of
the appearance that such services were offered because of their position).
240. 5 U.S.C. § 7353(a)(1) (1994); see also text accompanying notes 152-158 supra.
HeinOnline -- 50 Stan. L. Rev. 113 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
family members and friends. 24'
The President and Vice President are exempted from most of these restrictions on the receipt of gifts, and this exception has allowed President
Clinton to set up his Presidential Legal Expense Trust.242 There are several
problems with this exception. First, the regulation itself indicates that such
an exception was needed "[b]ecause of considerations relating to the conduct
of [these] offices, including those of protocol and etiquette. '243 Apparently,
it "was designed to allow the president to accept the homemade presents that
constantly flow into the White House, as well as gifts from foreign leaders.''244 But the exception is far broader than what is justified by this rationale. In dealing with similar issues, other regulatory exceptions have been
much more closely tailored to their purposes. For example, government employees are prohibited from accepting gifts of more than minimal value from
foreign governments. 245 But where the refusal of such a gift "would likely
cause offense or embarrassment or otherwise adversely affect the foreign relations of the United States," 246 the employee may accept the gift and then
promptly turn it over to the government. 247 A similar mechanism could be
adopted for the President and Vice President.
Second, the exception allows the President and Vice President to accept
cash gifts-and not just those cash gifts intended for a legal defense fund. It
seems highly unlikely that "protocol and etiquette" 248 require the acceptance
of greenbacks. 249 Cash gifts may pose particular dangers of corrupting influence, as implicitly recognized elsewhere in the executive branch regula0
tions.25
241. See 5 C.F.R. §§ 2635.204(b), .302(b) (1996); see also text accompanying note 156 supra. Given the difficulty of accepting contributions to this kind of legal defense fund, it is not surprising that several Clinton White House officials have used the "third-party legal defense fund"
technique. See text accompanying note 253 infra.
242. See text accompanying notes 164-169 supra.
243. 5 C.F.R. § 2635.2040).
244. Carter, supra note 8, at 163.
245. See 5 U.S.C. § 7342(b)(2), (c)(1)(A).
246. See id. § 7342(c)(1)(B).
247. See id. § 7342(c)(2).
248. 5 C.F.R. § 2635.204G).
249. There is a tradition of the government accepting substantial gifts to make improvements
in the White House, from a $30,000 jogging track for President Clinton to new White House china.
See PresidentMight Seek Donations,supra note 18, at A3; Solomon, supra note 211, at 1202 (discussing President Clinton's acceptance of donations to build a jogging track at the White House and
President Reagan's acceptance of donations for new White House china).
250. Cf.5 C.F.R. § 2635.204(a) (mandating that employees refuse gifts worth more than
twenty dollars). Some might argue that this regulatory exception for the President and Vice President is appropriate because they are the only elected officials in the executive branch and are required to report such gifts on their annual financial disclosure filings. See Standards of Ethical
Conduct for Employees of the Executive Branch, 56 Fed. Reg. 33778, 33783 (1991) ("In the case of
HeinOnline -- 50 Stan. L. Rev. 114 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
A third problem is that this regulatory exception places no limits on the
size of the cash gifts that the President and Vice President can accept. History has demonstrated that, when large amounts of cash are given to public
officials or their campaigns, there are particular dangers that these gifts are
accompanied by corrupt intent.251 Therefore, it is appropriate to place some
25 2
limit on the amount of these cash gifts and legal defense fund donations.
According to OGE's analysis, a legal defense fund that has been set up
and administered by a third party (rather than by the executive branch employee herself) is not subject to the federal gift statute, the gift regulation, or
other federal ethics regulations. Several Clinton White House officials have
an elected official of the stature of the President or Vice President whose personal conduct is
closely scrutinized by the public and the press, [the] requirement for public disclosure provides sufficient restraint on their acceptance of gifts."). But see THOMPSON, supra note 168, at 139 ("By itself, disclosure may merely further undermine confidence in government, causing citizens to suspect the motives of [elected officials] but providing no constructive ways to restore trust. Disclosing a possible conflict of interest merely reveals a problem without providing any guidance for resolving it.").
251. The Supreme Court addressed these dangers in Buckley v. Valeo:
To the extent that large contributions are given to secure a political quidpro quo from current
and potential office holders, the integrity of our system of representative democracy is undermined. Although the scope of such pernicious practices can never be reliably ascertained, the
deeply disturbing examples surfacing after the 1972 election demonstrates that the problem is
not an illusory one.
Buckley v. Valeo, 424 U.S. 1, 26-27 (1976). The circuit court's opinion in Buckley noted several
blatant examples of political quid pro quos in the Nixon administration:
Looming large in the perception of the public and Congressmen was the revelation concerning
the extensive contributions by dairy organizations to Nixon fund raisers, in order to gain a
meeting with White House officials on price supports.... The industry pledged $2,000,000 to
the 1972 campaign ....
[A]fter a meeting with dairy organization representatives, President Nixon decided to
overrule the decision of the Secretary of Agriculture and to increase price supports.... Mhe
dairymen were informed of the likelihood of an imminent increase and of the desire that they
reaffirm their $2 million pledge....
The record before Congress was replete with specific examples of improper attempts to
obtain governmental favor in return for large campaign contributions....
. . [O]ver
[
$1.8 million in Presidential campaign contributions [were] ascribable, in
whole or in part, to 31 persons holding ambassadorial appointments from President Nixon, and
...six other large contributors, accounting for $3 million, appear to have been actively seeking such appointment at the time of their contributions.
Buckley v. Valeo, 519 F.2d 821, 839-40 nn.36-38 (D.C. Cir. 1975) (citations omitted).
252. Another issue that has arisen in connection with the Presidential Legal Expense Trust has
been whether the Clintons will have to pay taxes on the donations. Apparently, the trust has been
structured in a way to prevent the Clintons from having to pay gift taxes. See Robert L. Jackson,
GOPQuestions Legality of Clinton'sDefense Fund,L.A. TIMEs, July 23, 1994, at A16. For a more
detailed discussion of the tax issue, see generally Kip Dellinger, Gift, Bonus or Yet Another Bombshell?, 137 N.J. L.J. 1668 (1994); Lee A. Sheppard, The Tax Treatment of the Clintons'LegalDefense Fund, 64 TAX NOTES 12 (1994); and Lee A. Sheppard, The Tax Treatment of Clinton'sLegal
Defense Fund, Continued,67 TAX NOTES 1008 (1995).
HeinOnline -- 50 Stan. L. Rev. 115 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
taken advantage of this regulation-free zone,253 and the Clintons have recently considered it as well.25 4 Since these third-party defense funds are not
subject to disclosure, it is impossible to know just how many executive
branch officials have used this technique.
Rather than relying on legalistic distinctions and a strained interpretation
of the gift regulation, OGE needs to promulgate its own legal defense fund
regulation. It is authorized by the gift statute to promulgate regulations that
create exceptions to the gift rule, 255 and such an exception for legal defense
funds is not only appropriate, it is long overdue. OGE will need to determine
whether employees' legal defense funds should be allowed to accept gifts
from persons who would otherwise be "prohibited sources" under the gift
statute;256 whether legal defense funds need to be excepted from the regulation barring gifts based on official position; 257 and what kind of disclosure
258
would be appropriate.
2.
Tighten disclosurerequirements.
Both the House of Representatives and the Senate require employees to
make quarterly disclosures of the contributions to their legal defense
funds. 259 The executive branch, on the other hand, lacks any specific legal
defense fund regulation and thus has no systematic disclosure requirement
for legal defense fund contributions. Most executive branch employees are
not required to reveal any information about the gifts they receive, the dona253. See Devroy & Marcus, supra note 7 at A21; see also Jack Nelson, Whitewater, Other
Probes Piling Up Legal Bill for Clintons' Circle, L.A. TIMES, June 20, 1996, at A20 (stating that
White House aides George Stephanopoulos, Craig Livingstone, Margaret Williams, and Lisa
Caputo have established legal defense funds).
254. See John F. Harris, Clinton Defense Fund Returns More Than It Raises: Trust's Income
over Six Months Is $62,045 As Couple's Legal Bills Approach $4 Million, WASH. POST, Feb. 28,
1997, at A7.
255. See 5 U.S.C. § 7353(b)(1), (d)(1)(D) (1994). For an example of such a regulatory exception, see note 156 supra.
256. See 5 U.S.C. §§ 7351, 7353; see also text accompanying notes 152-157 supra.
257. See 5 C.F.R. § 2635.202(a)(2) (1996); see also text accompanying notes 158-163 supra.
258. According to OGE, an executive branch official who is the beneficiary of an LDF set up
by a third party is required to disclose the identity of the trustee who disburses the funds, but not the
identity of those who donated to the LDF. Thus, although in theory the Clinton LDF has voluntarily agreed to disclose donor names twice a year, as of mid-November 1997, the LDF had still not
disclosed the names of donors who gave in the first half of 1997. See Glenn Bunting, Clinton Knew
of Trust Fund's Ills, Sources Say, L.A. TIMES, Aug. 31, 1997, at Al (describing how the Clinton
LDF changed the format of its semiannual disclosure in August 1996 in order to conceal the fact
that $388,000 in contributions were rejected as ineligible); David E. Rosenbaum, Senate Inquiry
Takes Up Trie Offer to Defense Fund, N.Y. TIMES, July 31, 1997, at A16 (Clinton LDF executive
director explaining the LDF's failure to disclose questionable payments gathered by Yah Lin Trie
by saying that the "trust was under no obligation ever to make the matter public").
259. See HOUSE REGULATION, supra note 171, § 13; SENATE REGULATION, supra note 170,
at ch. 4, § A.
HeinOnline -- 50 Stan. L. Rev. 116 1997-1998
November 1997]
HEIGHTENED ETHICS SCRUTINY
tions to their legal defense funds, or any other personal financial data.260 But
thousands of higher-level officials are required to file annual disclosure re261
ports that identify anyone who gave them $250 or more in a single year.
Most of these officials file "confidential financial disclosures," which are reviewed by agency ethics officials, but are not available to the public. 262 Over
20,000 officials file "public financial disclosures," but even these are avail263
able to the public only on request.
There are several problems with the executive branch's disclosure
scheme as it applies to legal defense funds. First, even lower-level officials
not otherwise subject to financial disclosure may find themselves in need of
money to pay large legal fees. The government and public should be informed of donations made to lower-level officials by persons who may have
an interest in influencing the actions of those officials. Second, even those
higher-level officials who are required to file financial disclosures do so only
once a year. Given the kind of pressure these officials may be under, more
frequent disclosure is appropriate. 264
A distinct set of problems may arise when one official's legal defense
fund pays for another employee's legal expenses. When a high-level official-whether a member of Congress or an employee of the executive
branch-is investigated by an ethics committee or a prosecutor, her subordinates are often interviewed or called to testify about that official's alleged
wrongdoing and their possible participation in that wrongdoing. These
lower-level employees need to seek legal advice. Although a few Senate
employees have been able to take advantage of the special Senate rule permitting donated legal services, 265 the House has no such rule and the Justice
260. Officials subject to this public financial disclosure include the President and Vice President, all presidential nominees requiring Senate confirmation, many political appointees, and other
highly paid employees. See 5 U.S.C. app. § 101; see also Mark A. Adams, Jeremy W. Barber &
Hildy Herrerra, Note, Ethicsin Government, 30 AM. CRIM. L. REV. 617, 620-28 (1993) (discussing
the financial disclosure obligations imposed by federal statute).
261. See 5 U.S.C. app. § 102(a)(2)(A). Only gifts greater than $100 need to be counted toward the $250 threshold. See id. Gifts of any size from family members need not be disclosed. See
id. In a recent year, public disclosures were required of over 21,000 federal employees. OFF. OF
GOvT. ETHICS, SECOND BIENNIAL REP. TO CONG. 52 (1992).
262. See OFF. OF GOVT. ETHICS, supra note 261, at 55.
263. "Public financial disclosure" reports are made public only upon the specific request of a
journalist or other member of the public, who must fill out a special request form identifying her
need for the information. See 5 U.S.C. app. § 105(b). In 1991, 21,343 government officials filed
"Public Financial Disclosure Reports," but only 751 of these reports were requested for public release. See OFF. OF GOVT. ETHICS, supranote 261, at 52.
264. The loose regulations in the executive branch contrast with the quarterly disclosure requirement of the House and Senate legal defense fund regulations. See SENATE REGULATION, supra note 170, at ch. 4, § A.
265. See id. at ch. 3, § B. For additional discussion of donated legal services, see text accompanying notes 230-239 supra. See also Glenn R_ Simpson, Leahy Aides Set Up Legal Expense
Funds in Senate Leak Probe,ROLL CALL, Feb. 6, 1992, available in LEXIS, News Library, Rollcl
HeinOnline -- 50 Stan. L. Rev. 117 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
Department has actively discouraged executive branch employees from using
266
such services.
Certain House members have raised enough money for their legal defense funds that they have been able to pay not just for their own legal expenses, but also for those of their employees and others who are interviewed
about the alleged wrongdoing. 267 While Representative Dan Rostenkowski
was being investigated for embezzlement, for example, his legal defense
fund paid for the legal expenses of twenty-four others who were interviewed
268
as part of that investigation.
Employees who are dependent on members to pay for their legal representation may be more susceptible to pressure not to cooperate with the investigation. 269 Nevertheless, prohibiting high-level officials from paying for
their subordinates' legal representation may be too draconian a measure, especially considering the limited options available to these lower-level employees. On the other hand, both the executive and the legislative branches
should require more stringent disclosure from employees who receive this
kind of help from their supervisors or others who are under investigation.270
3. Prohibitthe solicitationof legal defense fund donations.
27
The gift statute prohibits all federal employees from soliciting gifts.
In the executive branch, the solicitation ban applies to the President and Vice
File (discussing the legal defense funds of two Senate aides with regard to the Anita Hill leak).
266. See Representation of White House Employees, 4 Op. Off. Legal Counsel 749, 749
(1980); see text accompanying note 235 supra.
267. A similar practice has occurred on at least one occasion in the executive branch. See
Jehl, supra note 115, at Al ("Supporters of President Richard M. Nixon used leftover campaign
money as the basis for a fund that began paying legal expenses for some of his aides even when he
was still in office."). In addition, President Clinton has considered reimbursing White House employees for their legal expenses, even if the Justice Department refuses. See id.
268. See Gibson, supra,note 13, at 1. According to his indictment, Rostenkowski pressured
one potential witness, whose legal fees he was covering out of his legal defense fund, not to tell the
grand jury about the work the witness did for Rostenkowski. See Gerth, supranote 198, at 10.
269. See, e.g., FRED EMERY, WATERGATE: THE CORRUPTION AND FALL OF RICHARD NIXON
182, 326 (1994); Charles R. Babcock, Role of Flood, Attorney for Elko Probed: Ex-Aide's Fees
Paid,WASH. POST, Feb. 9, 1978, at Al (describing how two friends of Representative Daniel J.
Flood provided $25,000 for Flood's former aide after the aide was indicted for lying to a grand jury
regarding activities that involved Flood); Diaries:Rebozo More Than Just a Nixon Pal: Haldeman
DetailKey Biscayne Fixation, CHI. TRIB., May 19, 1994, at 24 ("When Nixon was forced to jettison
Haldeman and other aides as the Watergate scandal deepened in 1973, Nixon promised that [his
friend Bebe] Rebozo would be the conduit for up to $250,000 each in diverted political 'gift funds'
to cover their legal expenses.")
270. Disclosure of this type would not violate the attorney-client privilege. The privilege
generally does not protect information about the existence of the attorney-client relationship, the
amount of legal fees, or the identity of the person paying the fees. See CHARLES W. WOLFRAM,
MODERN LEGAL ETHICS 259-60 (1986).
271. See 5 U.S.C. § 7353(a) (1994).
HeinOnline -- 50 Stan. L. Rev. 118 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
President as well as every other employee. 272 Accordingly, if an official sets
up a legal defense fund, she (as well as anyone else connected to the fund) is
prohibited from actively raising money for that fund. 273 On the other hand, if
the legal defense fund is set up by someone other than the official on her behalf, OGE takes the position that the solicitation ban does not apply and that
those associated with the fund may solicit donations. 274
The executive branch's selective application of the solicitation ban to legal defense funds does not provide adequate protection of the public trust. It
encourages unregulated and unaccountable "friends" of a government official to raise money on her behalf, without any requirement that such fundraising activities be reported.275 The dangers inherent in such a setup are illustrated by the Clinton LDF's return of over $600,000 in questionable donations raised by a friend of the President. 276
The gift statute authorizes the implementing agencies to promulgate
regulations that create exceptions to the statutory rule on the acceptance of
gifts. 2 77 The House and the Senate issued their regulations on legal defense
funds as exceptions to the gift statute. Both the House and the Senate permit
the solicitation of legal defense fund donations. 278 The executive branch's
OGE, on the other hand, takes the position that the gift statute does not
authorize exceptions to the solicitation ban. 279 Based on the language of the
272. See id.; 5 C.F.R § 2635.202(c)(2) (1996). Executive branch employees are prohibited
from making any solicitation of gifts, whether from a "prohibited source" or otherwise. Cf. 5
C.F.R. § 2635.202(a) (prohibiting the acceptance of gifts from prohibited sources or given because
of the employee's official position).
273. See Letter from Stephen D. Potts to Michael H. Cardozo, supra note 144, at 2 (explaining that, although no one involved with the LDF may solicit donations, persons not connected with
it may engage in fundraising).
In its earliest days, the managers of the Trust apparently were not aware that the solicitation
ban applied to them. See Presidential Legal Expense Trust Indenture, supra note 114, at 4 (authorizing trustees to "solicit donations to the trust from the general public"); see also Rodriguez & Bendavid, supra note 204, at 1 (quoting a former chairman of the Democratic National Committee as
saying that someone connected with the Trust had already contacted him regarding fundraising).
274. See Devroy & Marcus, supranote 7, at A21.
275. For an example of how such unregulated agents can cause harm, see Peter Baker, Clinton
Defense Fund Gave Back $640,000: DNC-Linked Businessman Raised Donations, WASH. POST,
Dec. 17, 1996, at Al (describing the activities of Clinton friend Charles Yah Lin Trie, who raised
over $600,000 in LDF donations that were later returned because of concerns about their origins).
276. See Peter Baker & Ruth Marcus, Clinton Kept Ties to Key Supporter DespiteDoubts: InvestigatorsHiredby FundSuspected Phony Donations,WASH. POST, Dec. 18, 1996, at Al.
277. See 5 U.S.C. § 7353(b)(1).
278. See HOUSE REGULATION, supranote 171, § 1; SENATE REGULATION, supra note 170.
279. Stephen D. Potts, Director of the Office of Government Ethics stated:
Frankly, we are concerned about the anomalous consequences of these differing interpretations
of 5 U.S.C. § 7353. Thus, while the legislative branch has interpreted the [gift] statute to permit Members of Congress to personally solicit sizable donations to legal defense funds, under
our interpretation an executive branch employee may not solicit a dinner invitation from a personal friend who happens to be employed by a prohibited source. In light of the legislative
HeinOnline -- 50 Stan. L. Rev. 119 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
gift statute, the executive branch seems to have the better of this argument. 280
But in light of the separation of powers doctrine, the House and Senate
probably cannot be forced into changing their legal defense fund regula28 1
tions.
Nevertheless, Congress should reconsider the strong policy reasons that
favor prohibiting the solicitation of legal defense fund contributions. In particular, there is the danger that the solicitation of a contribution could turn
into, or be interpreted as, an invitation for an illegal quid pro quo. Senator
Packwood's diary includes passages that illustrate this danger:
Breakfast with some of the Oregon home builders.... We chatted for a while
about some of the things we wanted, and then I got into my complaints with the
National Home Builders. The Oregon home builders all said they were mad.
They felt they'd been double-crossed, and I said the home builders could make
282
it up with me with a contribution of $10,000 for my legal defense trust fund.
Packwood's diary also reveals that shortly after the Senator became
Chairman of the Senate Finance Committee, he made similar demands of an
branch's more liberal interpretation of the statute, it may be appropriate for us to revisit our
own interpretation.
Letter from Stephen D. Potts, Director, OGE, to Rep. Deborah Pryce and Rep. Christopher Cox 8
n.22 (Sept. 9, 1994) (on file with the Stanford Law Review) (obtained through the FOIA).
280. 5 U.S.C. § 7353 provides:
(a) Except as permitted by subsection (b), no Member of Congress or officer or employee of
the executive, legislative, or judicial branch shall solicit or accept anything of value from a
person....
(b)(1) Each supervising ethics office is authorized to issues rules or regulations implementing
the provisions of this section and providing for such reasonable exceptions as may be appro-
priate.
(2)(A)... [A] Member, officer, or employee may accept a gift pursuant to rules or regulations established by such individual's supervising ethics office pursuant to paragraph
(1).
(d)For purposes of this section(1) the term "supervising ethics office" means(A) the Committee on Standards of Official Conduct of the House of Representatives or the House of Representatives as a whole, for Members, officers, and employees ofthe House of Representatives;
(B) the Select Committee on Ethics of the Senate, or the Senate as a whole, for
Senators, officers, and employees of the Senate;
(D) the Office of Government Ethics for all executive branch officers and employees ....
5 U.S.C. § 7353 (emphasis added). Note that the statute does not provide exceptions to the solicitation ban.
281. Cf.United States v. Rostenkowski, 59 F.3d 1291, 1308-09 (D.C. Cir. 1995) (discussing
difficulties faced by the court in distinguishing "official work" from "personal services" without
interpreting "ambiguous House Rules").
282. DOCUMENTS RELATED TO THE INVESTIGATION OF SENATOR ROBERT PACKWOOD, S.
REP. No. 104-30, at 173 (1995) (quoting Packwood's diary entry).
HeinOnline -- 50 Stan. L. Rev. 120 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
official of the Seafarers Union, which had supported Packwood's opponent
in 1992.283 The official "said 'S'nator, what can we do to make it up to
' 284
you?' I said, 'Y'u could give $10,000 to my legal defense fund."'
Another problem related to solicitation is that members of Congress have
consistently relied on lobbyists to be key fundraisers for legal defense funds,
and even with the new restrictions, they are still able to do so. In 1987, for
example, the head of an association of religious colleges gave $10,000 to
Senator Mark Hatfield's legal defense fund and served as the fund's trustee.
At the very same time, he lobbied Haffield on an amendment to the Civil
Rights Restoration Act that would have exempted certain religious schools
from antibias laws. 285 Similarly, the president of a top Washington lobbying
firm helped to raise money for Senator Durenberger's legal defense fund
while lobbying the Senator on behalf of corporate clients. 28 6 Although current rules concerning congressional legal defense funds prohibit members of
Congress from accepting monetary donations from lobbyists, nothing prevents legislators from accepting lobbyists' services as trustees and fundraisers.
28 7
Despite the many problems associated with solicitation, a complete ban
on the practice may be undesirable. Prohibiting solicitation makes it much
more difficult to raise the funds necessary for an official's legal defense. 288
For this reason, it may be appropriate to consider the alternative of restricting
rather than prohibiting the solicitation of donations. A requirement that all
solicitation must be in writing would have several advantages over the current system. A person receiving a written solicitation may feel less coerced
than they would otherwise, 28 9 and there would be a written record of solici283. See Andre Mollison, Packwood Diaries:Playing Campaign-Money Game, DES MoINES
REG., Sept. 14, 1995, at 11.
284. Id. (quoting Packwood's diary).
285. See Glenn R. Simpson, Filings Show Association Executive Administered Haorield's
EarlierFund, ROLL CALL, Dec. 19, 1991, available in LEXIS, News Library, Rollcl File. Two
other lobbyists, including former Senator Howard Baker, helped to raise funds for the Durenberger
legal defense fund. See Glenn R. Simpson, FormerSenators Baker, Long Solicit Donations to Pay
Durenberger'sLegal Fees, ROLL CALL, Mar. 28, 1991, availablein LEXIS, News Library, Rolll
File.
286. See Novak, supra note 202, at 2521. A lobbyist who was formerly a top aide to Representative Rostenkowski coordinated the fund raising for Rostenkowski's legal defense fund. The
kickoff party for the fund was held at the offices of a Washington law and lobbying firm. See id.
287. See SENATE RULE XXXV § 3(c).
288. See Harris, supra note 254, at A7 (noting that the Clinton legal defense fund has been
hobbled by the solicitation ban).
289. The A.B.A. Model Rules recognize the particular problems that in-person solicitation
poses:
There is a potential for abuse inherent in direct in-person or live telephone contact by a
lawyer with a prospective client known to need legal services. These forms of contact between
a lawyer and a prospective client subject the layperson to the private importuning of the trained
advocate in a direct interpersonal encounter... The situation is fraught with the possibility of
HeinOnline -- 50 Stan. L. Rev. 121 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
tations in case questions arose later about the propriety of particular requests.2 90 Also, the government could require that all written solicitations be
disclosed. Such disclosure could both reassure the public that no explicit
29
quid pro quo had occurred and deter overaggressive solicitation. '
C. Prohibitthe Use of Campaign Fundsfor Noncampaign RelatedLegal
Expenses
Members of the House and the Senate have routinely dipped into their
campaign funds in order to pay their own and their staffers' legal expenses,
even when such expenses were unrelated to the campaign.2 92 For example,
when Representative Dan Rostenkowski was under investigation for embezzlement in connection with the House Post Office scandal, he spent more
than $1.1 million of his campaign funds to cover legal expenses for himself
and several of his staffers.2 93 In fact, Rostenkowski spent almost all of his
campaign funds on his lawyers' fees rather than on campaigning. He lost his
reelection bid after spending only $78,000 on the campaign while keeping
294
another $353,824 to use for legal bills.
Rostenkowski's actions are in no way aberrational. Senator Packwood
used hundreds of thousands of dollars of campaign funds left over from his
1992 election campaign to defend himself against charges of sexual harass-
undue influence, intimidation, and over-reaching.
This potential for abuse inherent in direct in-person or live telephone solicitation of prospective clients justifies its prohibition, particularly since [there are] ... alternative means of
conveying necessary information ....
MODEL RULES OF PROFESSIONAL CONDUCT Rule 7.3. cmt (1996).
290. Cf id. Rule 7.2(b) (requiring lawyers to keep a copy of their written solicitations and
other advertisements for two years); id. Rule 7.3 cmt. ("The contents of advertisements and communications permitted under Rule 7.2 are permanently recorded so that they cannot be
disputed ....
The contents of direct in-person or live telephone conversations between a lawyer and
a prospective client can be disputed and to [sic] not subject to third-party scrutiny.").
291. Cf id. Rule 7.3 cmt. ("This potential for informal review is itself likely to help guard
against statements and claims that might constitute false and misleading communications . . ').
292. See Table IV. But see Glenn R. Simpson, CranstonDonors Get Money Back- Senator
Returns Funds With Interest,ROLL CALL, Aug. 12, 1991, availablein LEXIS, News Library, Rollcl
File ("Sen. Alan Cranston (D-Calif), who abandoned a planned 1992 re-election bid.., in the midst
of a Senate Ethics Committee investigation, has returned with interest some $274,000 in campaign
contributions, asking the contributors to send the donations to his legal defense fund instead if they
wish.').
293. See Schmidt, supra note 202, at A33.
294. See Judy Hevrdejs & Mike Conklin, Despite Air Turmoil, Daley Is Proceeding with
Midway Event, CHI. TRIB., Dec. 15, 1994, at 32; Robert L. Jackson, Unemployed Rostenkowski Is
Facinga Huge Dilemma: The Once-Powerful Lawmaker Must Find a Way to Handle SoaringLegal Bills or Take the Unpleasant Quick Fix: A Plea Bargain,L.A. TIMES, Feb. 7, 1995, at A5; see
also Schmidt, supra note 203, at A33 ("Rostenkowsld's... latest campaign report for the first 19
days of October shows no spending on TV, radio or print advertising or direct mail-nothing but
about $6,000 on rent, utilities and fund-raising costs.").
HeinOnline -- 50 Stan. L. Rev. 122 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
ment, abuse of office, and obstruction of justice.295 Other members have also
used a third or more of their campaign funds for their personal legal exfunds to pay for their
penses, 296 and still others have used leftover campaign
297
legal expenses even after they left public office.
This is all perfectly legal under the Federal Election Commission's
298
("FEC") current interpretation of the federal campaign finance statutes.
By statute, campaign funds should be spent on campaign or other political
expenses and must not be spent for personal use299 or official government
activities. 3°° Certain types of legal fees clearly qualify as campaign expenses, such as fees for drawing up campaign-related legal documents, ensuring compliance with the federal election laws,30 1 and defending lawsuits
that arise directly out of campaign activities. 302 Using campaign funds for
such expenses appears to be perfectly consistent with one of the purposes of
campaign finance law: ensuring that donations to a political campaign are
295. See Harvey Berkman, With a Little Help from His Supporters, NAT'L L.J., June 12,
1995, at A6.
296. In the 1989-1990 election cycle, Representative McDade used one-third of his campaign
funds to defend himself against ethics charges. See Novak, supra note 202, at 2522. From 1987
until June 1993, Representative Ford used more than one-half of his campaign funds to defend himself against charges of bank fraud. See id. at 2523. During the 1990 electoral cycle, Representative
Don Young used nearly one-fifth of his campaign funds to pay legal and accounting fees in connection with a libel suit filed by his 1988 opponent. See SARA FRITZ & DWIGHT MORRIS,
HANDBOOK OF CAMPAIGN SPENDING: MONEY IN THE 1990 CONGRESSIONAL RACES 130 (1992).
In the first half of 1995, Speaker of the House Newt Gingrich used nearly one-seventh of his campaign funds for legal fees related to ethics inquiries. See Mary Jacoby, Ethics Case Costs Gingrich
$120,000 in Attorney's Fees,ROLL CALL, Aug. 10, 1995, availablein LEXIS, News Library, Rollcl
File. During the 1990 electoral cycle, Representative Gingrich used nearly one-tenth of his campaign funds to defend against other ethics allegations. See Novak, supranote 202, at 2523.
297. After leaving office, Representative Biaggi spent almost $400,000 in campaign funds on
his legal expenses, and Representative Garcia spent $147,000. See Novak, supra note 202, at 2523.
298. Although the FEC permits the use of campaign funds for legal expenses, senators are
prohibited from donating campaign funds to their own or another's legal defense fund. See SENATE
REGULATION, supra note 170, at ch. 3, § A.3. The House regulation, by contrast, permits such donations, and members often take money that was donated to their campaign and, in turn, donate it to
a colleague's legal defense fund. See HOUSE REGULATION, supranote 171.
299. See 2 U.S.C. § 439a (1994) ("Amounts received by a candidate as contributions that are
in excess of any amount necessary to defray his expenditures... may ... [not] be converted by any
person to any personal use .... ").
300. See 2 U.S.C. § 59e(d) ("No Senator or Member of the House of Representatives may
maintain or use, directly or indirectly, an unofficial office account or defray official expenses
from... funds received from a political committee or derived from a [political] contribution or expenditure .... ").
301. See FEC Adv. Op. 1990-17, Fed. Election Camp. Fin. Guide (CCH) 5993, at 11,640
(Sept. 21, 1990); FEC Adv. Op. 1981-16, Fed. Election Camp. Fin. Guide (CCH) 5604, at 10,75354 (Apr. 15, 1981); FEC Adv. Op. 1977-5, Fed. Election Camp. Fin. Guide (CCH) 5238, at
10,178 (Feb. 22, 1977).
302. See FEC Adv. Op. 1995-23, Fed. Election Camp. Fin Guide 6159, at 12,103-04 (July
20, 1995) (advising that a campaign could pay legal expenses in a civil suit in which the candidate
was alleged to have tom down an opponent's political yard signs).
HeinOnline -- 50 Stan. L. Rev. 123 1997-1998
STANFORD LAWREVIEW
[Vol. 50:65
spent on the campaign. But the FEC has permitted campaign funds to be
used for a much broader range of purposes, including the payment of legal
fees arising out of an officeholder's conduct in office, as opposed to her con30 3
duct in the campaign.
This practice of allowing campaign funds to be used for legal expenses
unrelated to the campaign is controversial, 30 4 and there is increasing criticism
of the FEC's policy regarding this practice. 305 There are several problems
with using campaign funds to underwrite legal expenses. First, the practice
helps only elected officials and close staff members, and provides no assistance for the vast majority of civil servants and political appointees in the ex-
ecutive branch. Second, a significant number of those who contribute to political campaigns may not wish to see their contributions used for noncampaign purposes. In particular, donors may object to their contributions being
converted for the office holder's attorneys' fees. 306 For example, Senator
Packwood himself acknowledged that his many women supporters would
probably object to his using campaign funds to defend against charges of
303. See FEC Adv. Op. 1997-12 (Aug. 15, 1997) (permitting member of Congress who was
an unindicted co-conspirator to use campaign funds to pay for legal advice on how to respond to
allegations in media and at a friend's criminal trial); FEC Adv. Op. 1986-9, Fed. Election Camp.
Fin. Guide (CCH) 5851, at 11,268 (Apr. 22, 1986) (describing how a congressman investigated by
the House Committee on Standards of Official Conduct for certain expense claims could obtain
reimbursement for legal fees from campaign funds because, at that time, members could convert
campaign funds to personal use); FEC Adv. Op. 1977-39, Fed. Election Camp. Fin. Guide (CCH)
5264, at 10,211 (Aug. 26, 1977) (noting that a member of Congress could use excess campaign
funds to pay legal expenses incurred during a grand jury investigation of his conduct in office).
Presidents are also permitted to use excess campaign funds for their own legal expenses, and
although President Clinton has so far chosen not to go that route, President Nixon did so. See Jehl,
supra note 115, at Al ("Supporters of President Richard M. Nixon used leftover campaign money
as the basis for a fund that began paying legal expenses .... "). The rules on financing presidential
campaigns are somewhat different in light of federal financing of the general election campaign.
But money raised for the primary campaign can be used for the President's personal legal costs.
See Klaidman, supranote 15, at 4.
304. See Glenn R. Simpson, Packwood Pays Ex-Lawyers $600,000 in Campaign Cash, ROLL
CALL, Feb. 7, 1994, availablein LEXIS, News Library, Rollel File (noting the controversy over use
of campaign funds for noncampaign related legal bills and increasing calls to prohibit this practice).
305. See, e.g., PersonalLawyers, ROLL CALL, Feb. 10, 1994, available in LEXIS, News Library, Rollcl File.
306. See id. (describing the discomfort many have with giving to legal defense funds and
noting that some PACs and corporations forbid such donations). Organizations that disapprove of
donations to legal defense funds would likely object to their campaign donations being turned over
to a legal defense fund or used for these kinds of legal expenses:
Charles Lewis, executive director of the Center for Public Integrity, objects to lawmakers
...using campaign funds to pay their legal expenses. "It's a dubious permutation of what
campaign money is intended to be," he said. "It isn't generally understood that people are going to use that money to keep themselves out ofjail. This is not what people intend with contributions."
Schmidt, supra note 202, at A33.
HeinOnline -- 50 Stan. L. Rev. 124 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
30 7
sexual assault on twenty-eight women.
The FEC should reexamine its regulations and rulings permitting the extensive use of campaign funds for noncampaign purposes. Government offinot be able to convert funds intended
cials, including elected officials, should
30 8
for one purpose to a different purpose.
CONCLUSION
Part I of this article identified a problem of increasing significance for
government officials: how they can pay for the legal expenses they incur
during investigations of their own or their colleagues' alleged misconduct.
This problem has been caused, at least in part, by the cynical use of allegations of unethical conduct for political gain. If allegations of wrongdoing
continue to impose heavy costs on the accused and her colleagues while
posing no risk to the accuser, we can expect the number of allegations and
investigations to increase. Parts II and III critically examined the limited options currently available to government officials, and Part IV recommended
several reforms to increase the fairness of the system.
This article has focused on the costs these investigations impose on government officials. But there are other perhaps less quantifiable but more significant costs as well. This issue of government officials' legal expenses is
but a barometer of a much more fundamental problem in our political system.
These investigations have increased public cynicism about the integrity
30 9 Cyniof government officials and the integrity of the government itself.
307. See Novak, supra note 202, at 2522. Others have remarked on this as well:
At least $639,937 of [Packwood's campaign flunds] went to pay legal bills associated with the
Ethics Comm. Investigation. And not even Packwood, whose support for women's rights had
always produced a large number of campaign contributions from women, missed the irony. At
a January 1993 press conference, he had noted "there would be a tremendous political criticism
if I took the money that I've raised from women to use for my defense against women."
Months later he was defending that very thing to his diary.
Vicki Kemper, Perfectly Ethicaland Legal, COMMON CAUSE MAG., Fall 1995, at 23, 23.
308. See FRITZ & MORRIS, supra note 296. Fritz and Morris quote Senator John McCain as
saying:
Campaign funds should be used for campaign purposes.... I do not go out and ask people to
provide me with campaign funds so I might attend a funeral or send flowers or take a constituent to dinner or any other form of recreation that has sometimes been indulged in with campaign funds.
Id.
309. Robert J. Samuelson has stated:
The threshold for scandal has moved so low that Washington is almost never without one....
What we're seeing is the attack culture.... What defines the attack culture is that its animating
spirit--unexpressed, but obvious-is to destroy and bring down.... The attack culture ... is
increasingly undemocratic and breeds disrespect for the law [and] politics ....
HeinOnline -- 50 Stan. L. Rev. 125 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
cism of this type may be understandable or even well-founded. But it disempowers the public. If Watergate resulted in public outrage, the proliferation of "-gates" has resulted in public disgust. Outrage can be harnessed for
reform. Disgust can't be harnessed at all, and it only results in decreased
public participation in such basic democratic institutions as elections.
The reforms identified in this article would significantly improve the
situation of government officials, most of whom are treated rather shabbily
under the current legal system. In the long-run, what is needed is a reform of
the poisonous atmosphere of scandal that pervades politics on the national
level. That is a problem not of legal reform, but of cultural reformation. But
that is a problem that must wait for another day.
Robert J. Samuelson, The Attack Culture,WASH. POST, Mar. 12, 1997, at A19.
HeinOnline -- 50 Stan. L. Rev. 126 1997-1998
HEIGHTENED ETHICS SCRUTINY
November 1997]
TABLE I
TARGETS, DATES, AND COSTS OF INDEPENDENT COUNSEL INVESTIGATIONS
TARGET
(ALLEGATION)
Hamilton Jordan
(cocaine use)
Timothy Kraft
INDEPENDENT
COUNSEL
Arthur Hill Christy
_________
DATE OF
INVESTIGATION
COST OF
INVESTIGATIONa
Nov. 1979b-May 1980
__________
Gerald J.
$182,000
________
$3000V
Gallinghouse
Sept. 1980d-Mar. 1981
Lean Silverman
Nov. 1981--Sept. 1982
June 1985--Oct 1987
$326,000
Edwin Meese III
(financial improprieties)
Jacob Stein
Apr. 1984h-Sept. 1984
$312,000'
Theodore B. Olson
(misleading Congress)
James C. McKay
Alexia Morrison
Apr.1986-May 1986 i
May 1986'-Mar. 1989
May 1986-June 1989
(cocaine use)
Raymond
Donovan
(kickbacks)
(perury)
Michael Deaver
Whitney North
(improper lobbying)
Seymour, Jr.
Oliver North
Lawrence Walsh
Dec. 1986"--Mar. 1994 P
Franklyn Nofziger &
Edwin Meese III
(Wedtech)
James McKay
Feb. 1987---Jan. 1990
$2,600,000s
W. Lawrence Wallace
(income tax)
Carl Rauh!
James Harper'
Dec. 1986-Mar. 1987'
Aug. 1987Y-Dec. 1987"
$19,000"
Samuel Pierce
(fraud at H.U.D.)
Arlin Adams
Larry D. Thompson"
Mar. 1990'--July 1995
July 1995-Present"
James Cicconi
(questionable loan)
Sealed
Dan Webb'
May 1989'--Aug. 1989
$15,000-
Sealed
Apr. 1991"--Apr. 1992"
$66,000 i
Janet Mullins
(Clinton passport)
Joseph diGenova
Michael F. Zeldin'
May_1986_----__ne 1989
_
$1,552,000
n
$47,400,000 q
(Iran-Contra)
Dec. 1992---Jan. 1996
Jan. 1996-June 1996"
Bill Clinton
(Whitewater)
Kenneth Starr
Aug. 1994-Present
Mike Espy
Donald Smaltz
Sept. 1994-Present""
$2,67000"
$25,636,000
$11,858,000"
(illegal gifts)
Henry Cisneros
(false statements)
Ron Brown
(financial improprieties)
Daniel S. Pearson
July 1995-Apr. 1996""
Eli Segal "
(improper fundraising)
Curtis Emery
von Kann
Nov. 1996-Aug. 1997"'
David M.Barrett
May 1995-Present
TOTAL COST OF INVESTIGATIONS:
HeinOnline -- 50 Stan. L. Rev. 127 1997-1998
$3,822,000"
$3,248,000"
$49,0 00 yy
$129,121,000
STANFORD LA WREVIEW
[Vol. 50:65
NOTES TO TABLE I
a. Cost figures are rounded to the nearest $1000.
b. See S. RPT.No. 103-101,at9(1993).
c. See id. at 13.
d. See Sharon LaFraniere, Independent Counsel Law Increasingly Beset, WASH. POST, June
22, 1992, at A4; see also S. RPT. No. 103-101, at 9.
e. See S.RPT.NO. 103-101, at 13.
f. See id. at 9.
g. See Kirk Victor, Not So Special, 29 NAT.'L J. 215 (1997). But see S. RPT. NO. 103-101,
at 13 (indicating $7200 figure).
h. See S. RPT.NO. 103-101,at9.
i. See id.at 14.
j. See KATY J. HARRIGER, INDEPENDENT JUSTICE: THE FEDERAL SPECIAL PROSECUTOR IN
AMERICAN POLITICS 96 (1992) ("The special court panel originally appointed James C. McKay to
investigate the allegations. McKay resigned a month later after determining that he had a conflict
of interest. His chief deputy, Alexia Morrison, was appointed in his place on May 29, 1986.").
k. See Investigation by Independent Counsels, CQ RESEARCHER, Feb. 21, 1997, at 156. But
see S. RPT. No. 103-101, at 149 (indicating $1.5 million figure).
1. SeeS.RPT.NO. 103-10l,at9.
m. See id.
n. See Jennifer S. Thomas, Independent Counsel Law Likely to Be Reinstated, ST.
PETERSBURG TIMES, June 8, 1995, at 5A; see also S. RPT. No. 103-101, at 14 (indicating $1.5 million figure).
o. See S. RPT. No. 103-101, at 9.
p. See Scott Shephard, Focus on Independent Counsel, ATL. J. & CONST., Apr. 13, 1996, at
Al.
q. See Tony Locy, $44 Million in Probesof Clinton Era;StarrLeads in LatestSpecial Counsel Costs, WASH. POST, Oct 1, 1997, at A23.
r. SeeS.RPT.NO. 103-101,at9.
s. See Special ProsecutorsDown, but Not Out, U.S. NEWS & WORLD RPT., Dec. 21, 1992, at
26. But see S. RPT. No. 103-101, at 14 (indicating $2.5 million figure).
t See Ruth Marcus, Justice Official Won't Be Chargedin Tax Case, WASH. POST, Dec. 19,
1987, at A3 (indicating that the court originally appointed Carl Rauh, who resigned in March 1987);
see also In Re Sealed Case, 890 F.2d 451, 455 (D.C. Cir. 1989) ("There are not too many lawyers
with adequate criminal law and tax qualifications, as the special division found when it was seeking
an independent counsel to appoint in this case.")
u. See In Re Sealed Case, 890 F.2d at 454 (indicating that an IC was appointed on December
1996 to investigate an official accused of failure to file income tax returns); Marcus, supra note t, at
A3 (identifying Wallace as the target of an IC investigation for failure to file tax returns).
v. See Marcus, supra note t, at A3.
w. See S. RPT. No. 103-101, at 13. But see Investigations by Independent Counsels, supra
note k, at 156 (indicating $50,000 figure).
x. See Marcus, supra note t, at A3 (identifying the Atlanta tax lawyer as the IC who investigated Wallace).
y. See S. RPT. NO. 103-101, at 9; Marcus, supra note t,
at A3.
z. See Marcus, supra note t, at A3.
aa. See S. RPT. NO. 103-101, at 9; U.S. GENERAL ACCOUNTING OFFICE, FINANCIAL AUDIT:
HeinOnline -- 50 Stan. L. Rev. 128 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
INDEPENDENT COUNSEL EXPENDITURES FOR THE SIX MONTHS ENDED MARCH 31, 1997, at 11
(Sept. 1997) (GAO!AIMD-97-164) [hereinafter GAO].
bb. See Locy, supra note q, at A23.
cc. See GAO, supra note aa, at 11 (indicating that Adams resigned as IC in July 1995, at
which time Thompson was appointed as IC).
dd. See GAO, supra note aa, at 10 (indicating that the Adams/Thompson investigation continued to have expenses in the six months prior to March 1997).
ee. See George Lardner, Jr., Bush Aide Is Cleared of Ethics Allegations: $5,000 Borrowed
from Fraud-RiddenBank, WASH. POST, Sept. 6, 1989, at A8.
ff. See S. RPT. No. 103-101, at 10.
gg. See id. at 13; see also Victor, supra note g, at 215 (indicating that the sealed 1989 investigation cost $15,000).
hh. See S. RPT. NO. 103-101, at 10.
ii. See Investigationsby Independent Counsels, supranote k, at 156.
jJ. See S. RPT. No. 103-101, at 13. But see Investigations by Independent Counsels, supra
note k, at 156 (indicating $93,000 figure).
kk. See S. RPT. No. 103-101, at 10.
11. See Locy, supra note q, at A23.
mm. See GAO, supra note aa, at 17 (noting that, in January 1996, diGenova resigned and was
succeeded by Zeldin).
nn. See id.
oo. Attorney General Reno appointed Robert Fiske, Jr., to investigate Whitewater in January
1994, after the IC statute had expired. See Robert Jackson, GOP Lawyer Picked to Probe Whitewater, L.A. TIMES, Jan. 21, 1994, at A30. After Congress reauthorized the IC statute, Reno asked
the special court to appoint Fiske as IC, but the special court chose Kenneth Starr instead. See
Kenneth Jost, Navigating the Shoals: Whitewater CounselDenies Conflicts, Admits Job a Liability,
82 A.B.A. J. 20 (1996).
pp. See Locy, supra note q, at A23.
qq. See GAO, supra note aa,at 23.
rr. See Locy, supra note q, at A23.
ss. See Independent Counsel Named for Cisneros Investigations, AUSTIN AM.-STATESMAN,
May 25, 1995, at A27.
tt. See Locy, supra note q, at A23.
uu. The IC's investigation of Ron Brown ended before its completion after Brown died in a
plane crash. See GAO, supra note aa, at 20.
vv. See Locy, supra note q, at A23.
ww. Susan Page, Clinton Ally Clearedin Independent Counsel Probe, USA TODAY, Oct. 30,
1997, at 10A (indicating that Eli Segal, a "longtime friend and political ally of President Clinton,"
was investigated and cleared of wrongdoing "apparently related to his previous job as the first head
of Americorps").
xx. Independent Counsel ClearsEx-Clinton Aide in Funds Probe, CHI. TRIB., Dec. 20, 1997,
at 6.
yy. See GAO, supranote aa, at 28.
HeinOnline -- 50 Stan. L. Rev. 129 1997-1998
[Vol. 50:65
STANFORD LAWREVIEW
TABLE II
INDEPENDENT COUNSEL STATUTE
UNDER
LEGAL EXPENSES REIMBURSED
TARGET oFIC
CITATION
AMOUNT
(ALL CrrEsTo D.C. Cm.)
SOUGHT
APLICANT
INVESTIGATION
a
AMOUNT
AWARDED
Hamilton Jordan
Hamilton Jordan
re 1574
Jordan,
(1984)
F.2d
745 In
$67,553.20
$0.00b
Raymond
Donovan
Edwin Meese III
Raymond
Donovan
Edwin Meese III
In re Donovan,
877 F.2d 982 (1989)
unpublished
$112,281.56
$72,875.06
$720,824.00
$472,190.00
Theodore B.
Olson
Robert Perry
$861,589.28
$8421.74
$5631.54
W. Lawrence
Wallaced
W. Lawrence
Wallace
In re Olson,
884 F.2d 1415 (1989)
In re Olson,
892 F.2d 1073 (1990)
In re Sealed Case,
890 F.2d 451 (1989)
In re Nofziger,
$1,259,072.69
Theodore B.
Olson
$69,316.24
$58,005.25
956 F.2d 287 (1992);
In re Nofziger,
969 F.2d 1138 (1992)
$136,189.56
$0.00,
In re Meese,
In re Nofziger,
$575,598.01
$460,509.07
Mark Bragg
Franklyn Nofziger
&
i n Meee
Edw
Edwin Meese III
907 F.2d 1192 (1990)
Franklyn Nofziger
$000
925 F.2d 428 (1991);
In re Nofziger,
938 F.2d 1397 (1991)
In re North
(Adkins Fee
Application),
33 F.3d 76 (1994)
In re North
(Gadd Fee Application),
842 F.2d 340 (1988)
In re North
(Gadd Fee Application),
12 F.3d 252 (1994)
In re North
James Adkins
Airmach, Inc.
et al.1
Richard Armitage
Oliver North
George Bush
George Cave
Edwin Corr
John Cupp &
Cindy Dondlinger
Robert Dutton
~
______________
________7--
~
~
(Armitage Fee
Application),
50 F.3d 42 (1995)
In re North
(Bush Fee Application),
59 F.3d 184 (1995)
In re North
(Cave Fee Application),
57 F.3d 1117 (1995)
In re North
(Corr Fee Application),
56 F.3d 261 (1995)
In re North
(Gadd Fee Application),
12 F.3d 252 (1994)
In re North
(Dutton Fee Application),
11 F.3d 1075 (1993
11
3d
$5307.85
$4754.72
$0.00
$0.0
$51,195.08
$51,195.08
$461,346.51
$272,352.51
$19,912.50
$19,912.50
$20,000.00
$18,155.37
$0.00'
$105,219.80
-- 5_____
(__993)
--
HeinOnline -- 50 Stan. L. Rev. 130 1997-1998
$39,946.14
November 1997]
TARGETOFIC
HEIGHTENEDETHICS SCRUTINY
APPLICNT
INVESTIGATION
William Dwyer
CITATION
AMOUNT
(ALL CnTS TO D.C. CIR)
SOUGHTa
In re North
(Dwyer Fee Application),
120 F.3d 293 (1997)
AMOUNT
AWARDED
$65,577.48
$8400.00
In re North
Joseph Fernandez
(Fernandez Fee
Application),
37 F.3d 663 (1994)
In re North
(Gadd Fee Application),
340 (1988)
Richard GaddInrNot842 F.2d
In re North
(Gadd Fee Application),
12 F.3d 143 (1994)
In re North
Norman
(Gardner Fee
Gardner, Jr.
Application),
30 F.3d 143 (1994)
In re North
H. Lawrence
(Garrett Fee Application),
Garrett
46 F.3d 1192 (1995)
In re North
(George Fee Application),
Clair George
62 F.3d 1434 (1994)
In re North
Donald Gregg
(Gregg Fee Application),
57 F.3d I 115 (1995)
In re North
Oliver North
(cont'd)
Jerry Gruner
William Haskell
William Langton
& Robert Mason
Nicholas Platt
Ronald Reagan
Donald Regan
Vincent Shields
George Shultz
IHoward TeicherI
(Fee Applications of
Shields and Gruner),
53 F.3d 1305 (1995)
In re North
(Haskell Fee Application),
74 F.3d 277 (1996)
In re North
(Langton and Mason Fee
Application),
32 F.3d 609 (1994)
In re North
(Platt Fee Application),
31 F.3d 1188 (1994)
In re North
(Reagan Fee Application),
94 F.3d 685 (1996)
In re North
(Regan Fee Application),
72 F.3d 891 (1995)
In re North
(Fee Applications of
Shields and Gruner),
53 F.3d 1305 (1995)
In re North
(Shultz Fee Application),
8 F.3d 847 (1993)
In re North
(Teicher Fee Application),
11F.3d 1082 (1993)
$0.00W
$163,321.60-
$0.000
$124,297.42
$58,410.74
$84,386.77
$53,120.74
$O.OO
$0.00
$1,297,950.18
p
q
$8741.67
$7541.67
$18,360.00
$13,100.00
$8895.80
$8676.68
$74,431.71
$0.00 r
$22,384.81
$22,384.81
$777,651.79
$562,111.08
$64,202.89
$41,883.79
$79,786.98
$63,481.98
$286,795.51
$281,397.69
i
I
$0.00'
-
HeinOnline -- 50 Stan. L. Rev. 131 1997-1998
1
0-10'
[Vol. 50:65
STANFORD LA WREVIEW
TARGET OF IC
INVESTIGATION
Oliver North
(cont'd)
AMOUNT
AWARDED
AMOUNT
SOUGHT'
APPLICANT
CITATION
(ALL CrrEsTO D.C. Cm)
Howard Teicher
(cont'd)
In re North
(Teicher Fee Application),
$6810.00
$2600.00
William Walker
In re North
(Walker Fee Application),
$11,923.05
$I 1,914.05
Samuel Watson
In re North
(Watson Fee Application),
$18,100.00
$0.00 t
48 F.3d 1267 (1995)
74 F.3d 283 (1996)
32 F.3d 607 (1994)
Samuel Pierce
Ernest Olivas, Jr.
Steven Berry
Janet Mullins
In re Pierce
(Olivas Fee Application),
102 F.3d 1264 (1996)
In re Mullins
(Berry Fee Application),
91 F.3d 1516 (1996)
In re Mullins
(Mullins Fee Application),
$0-00P
$262,215.14
$216,377.54
$348,149.69
$223,186.66
$16,552.11
$16,525.86
$140,023.51
$136,219.23
84 F.3d 459 (1996)
Janet Mullins
Elizabeth
Tamposi
Margaret
Tutwiler
In re Mullins
(Tamposi Fee
Application),
84 F.3d 1439 (1996)
In re Mullins
(Tutwiler Fee
Application),
87 F.3d 1372 (1996)
Ron Brown
[7
__
_
Nolanda S. Hill
In re Brown
(Hill Fee Application),
Kenneth C. White
(White Fee Application),
(Brannock Fee
Application),
114 F.3d 288 (1997)
Lisa M. Brannock
TOTAL AWARDED:
HeinOnline -- 50 Stan. L. Rev. 132 1997-1998
MO.00W
$4,064,449.04
November 1997]
HEIGHTENED ETHICS SCRUTINY
NOTES TO TABLE II
a. The figures listed include lawyers' fees and related expenses.
b. The court denied Jordan's request for fees because the 1983 amendment to the IC statute
did not apply retroactively. See In re Jordan, 745 F.2d 1574, 1576 (D.C. Cir. 1984).
c. But see Ronald J. Ostrow, Meese Awarded $472,000for Fees in Inquiry, L.A. TIMES, June
8, 1985, at 1.
d. See In re Sealed Case, 890 F.2d 451 (D.C. Cir. 1989); Ruth Marcus, Justice Official Won't
Be Chargedin Tax Case, WASH. POST, Dec. 19, 1987, at A3; see also S. RPT. No. 103-101, at 10
(1993).
e. Bragg was Nofziger's business partner and was acquitted of charges that he aided and
abetted Nofziger's violation of postemployment restrictions. The court denied Bragg's petition because he did not meet the IC statute's "but for" requirement. See In re Nofziger, 956 F.2d 287, 288,
293-94 (D.C. Cir. 1992).
f. Nofziger, former Assistant to President Reagan for Political Affairs, was convicted of
violating postemployment restrictions on lobbying. His conviction was overturned on appeal. See
In re Nofziger, 925 F.2d 428, 430 (D.C. Cir. 1991). The court denied Nofziger's fee request because he could not meet the IC statute's "but for" requirement. The court concluded that, even
without the IC statute, Nofziger would have incurred similar fees in response to a Justice Department investigation of his activities. See id. at 439.
g. The D.C. Circuit characterized Airmach, Inc., American National Management Corp., and
Eagle Aviation Services and Technology as "[Richard] Gadd's companies." See In re North (Gadd
Fee Application), 12 F.3d 252, 254 (D.C. Cir. 1994).
h. These companies' petition for reimbursement was made in conjunction with Richard
Gadd's petition. The court decision does not separate out the fees for the companies and for Gadd.
i. In this decision, the court ruled that the companies' (and Gadd's) petition was not ripe and
denied it without prejudice. See In re North (Gadd Fee Application), 842 F.2d 340, 342 (D.C. Cir.
1988).
j. These companies' petition for reimbursement was made in conjunction with Richard
Gadd's petition. See id. at 254.
k. The court denied the companies' petition for fees because the IC statute authorizes fee
reimbursements to individuals, not to companies. See In re North (Gadd Fee Application), 12 F.3d
at 255.
I. Cupp and Dondlinger were employees of one of Richard Gadd's companies, and the company had paid for these employees' legal fees. The court ruled that Cupp and Dondlinger were ineligible for reimbursement because they were not personally liable for the fees. See id. at 254-55.
m. Although Fernandez's indictment was dismissed under the Classified Information Procedures Act, he was ineligible for fee reimbursement because the indictment itself was valid. See In
re North (Fernandez Fee Application), 37 F.3d 663, 663-65 (D.C. Cir. 1994).
n. Gadd's petition for reimbursement was made in conjunction with his companies' (Airmach, Inc. et al.) petition. The court decision does not separate out the fees for Gadd and the companies. See In re North (Gadd Fee Application), 842 F.2d at 340.
o. In this decision, the court ruled that Gadd's (and his companies') petition was not ripe and
denied it without prejudice. See id. at 342.
p. Garrett was the General Counsel for the Department of Defense during the Iran-Contra investigation. He had been interviewed as part of the investigation and was asked to produce documents. The court denied his fee petition because he was a "mere witness." See In re North (Garrett
Fee Application), 46 F.3d 1192, 1193-94 (D.C. Cir. 1995).
q. George was a Deputy Director of the CIA during the Iran-Contra events. George was
found guilty of pejury and false statements, but was later pardoned by President Bush. The court
denied his fee petition because the pardon did not expunge his indictment. See In re North (George
HeinOnline -- 50 Stan. L. Rev. 133 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
Fee Application), 62 F.3d 1434, 1434 (D.C. Cir. 1994).
r. Langton and Mason submitted their petition jointly. Their employer, Southern Air Transport, paid their legal fees. The court denied their request because they were not personally liable for
the fees. See In re North (Langton and Mason Fee Application), 32 F.3d 609, 610 (D.C. Cir. 1994).
s. Teicher was a member of the National Security Council. See In re North (Teucher Fee
Application), 48 F.3d 1267, 1268 (D.C. Cir. 1995). The court denied (without prejudice) Teicher's
first petition for reimbursement, but gave him the opportunity to submit a revised petition in light of
its most recent fee rulings. See In re North (Teicher Fee Application), 11 F.3d 1082, 1082-83 (D.C.
Cir. 1993). When Teicher submitted a revised petition, the court authorized reimbursement of
$2600, representing that portion of the legal expenses incurred "while he was a subject [of investigation], and not merely a witness." In re North (Teicher Fee Application), 48 F.3d at 1267-68.
t. Watson was deputy national security advisor to Vice President George Bush. The court
denied the fee petition for two reasons: (1) Watson's obligation to pay his lawyer was so vague that
he was not legally liable for the fees, and (2) his lawyer's fee records were not contemporaneous
and therefore not reliable. See In re North (Watson Fee Application), 32 F.3d 607, 608-09 (D.C.
Cir. 1994).
u. The court denied (without prejudice) Olivas' petition as premature because the IC had not
yet submitted his final report. See In re Pierce (Olivas Fee Application), 102 F.2d 1264, 1265-66
(D.C. Cir. 1996).
v. The court denied (without prejudice) these petitions as premature because the Justice Department was continuing the IC's criminal investigation, which had been transferred to Justice after
Ron Brown was killed in a plane crash.
HeinOnline -- 50 Stan. L. Rev. 134 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
135
TABLE III
AMOUNTS RAISED BY CONGRESSIONAL LEGAL DEFENSE FUNDS
MEMBER OF
ALLEGATION
DATES
Sen. Brock Adams
Sexual misconduct
1992
Sen. Alan Cranston
Keating 5
1990-1991
Sen. Alfonse D'Amato
Performed favors in
1991-1993
AMOUNTa
CONGRESS
$3775
b
$300,000'
exchange for contributions
Sen. David Durenberger
Financial fraud
1990-1994
$500,000'
Rep. Floyd H. Flake
Tax evasion
1990-1997'
$209,000
Rep. Harold E. Ford
Bank fraud
1987-1993
$403,000
Sen. Tom Harkin
Libel
1990-1991
$162,000'
Sen. Orrin G. Hatch
BCCI
1992-1993
$219,000i
Ties to oil developer
Basil Tsakos
1984-1985
Illegal gifts
1991-1993
$140,000"
Sen. Kay Bailey
Hutchison
Misuse of state office
1993-1994
$880,000'
Rep. Henry Hyde
S & L directorship
1997
$60,000 m
Rep. Joseph M. McDade
Illegal gratuities from
defense contractors
1992-1997
$900,000"
Sen. Bob Packwood
Sexual misconduct
1992-1995
$637,000'
Rep. Dan Rostenkowski
House Post Office scandal
1993-1995
$758,000 P
Rep. Bob Torricelli
Disclosure of CIA
information
1995
$66,000q
Rep. Walter R. Tucker III
Extortion and tax evasion
1994-1995
$26,000
Rep. Jim Wright
Book deal
1989
$282,000
Rep. Don Young
Libel
1988-1992'
$124,000 t
Sen. Mark Hatfield
HeinOnline -- 50 Stan. L. Rev. 135 1997-1998
STANFORD LA WREVIEW
[Vol. 50:65
NOTES TO TABLE III
a. Rounded to the nearest $1000.
b. See Glenn R. Simpson, Brock Adams Raised Legal Defense Funds Before Ethics Panel
Decided to Drop Case,ROLL CALL, July 20, 1992, availablein LEXIS, News Library, Rollcl File.
c. See Glenn R. Simpson, Glenn Digs into Own Pocket to Pay $528,000 in Legal Feesfor
Defense in Keating 5 Case, ROLL CALL, Apr. 2, 1992, available in LEXIS, News Library, Rollcl
File.
d. See Vivica Novak, Passingthe Hat, 25 NAT'L J. 2520,2524 (1993).
e. See Glenn R. Simpson, Hatch Legal Fund Has Lucrative Quarter, Including $100,000
from Ten Individuals,ROLL CALL, Oct 21, 1993, availablein LEXIS, News Library, Rollcl File.
f. See Novak, supranote d, at 2523.
g. See Johnny Carter, Note, To Providefor the Legal Defense: Legal Defense Funds and
FederalEthics Law, 74 TEx. L. REV. 147, 153 n.55 (1995) (citing Steven Thomma, Legal Defense
DonationsMay Leave Lawmakers in Debt, DETROIT FREE PRESS, June 5, 1994, at IF); Amy Keller
& Rachel Van Dungen, Hyde Opts to Start Legal Defense Fund, ROLL CALL, May 8, 1997, available in LEXIS, News Library, Rollcl File.
h. See Novak, supra note d, at 2523.
i. See Glenn R. Simpson, Harkin, at Last, Retires Legal Debt with Help from Lobbyist Donors, ROLL CALL, Jan. 16, 1992, availablein LEXIS, News Library, Rollcl File.
j. See Carter, supra note g, at 152 n.43 (citing Thomma, supra note g, at IF).
k. See Novak, supra note d, at 2525; How They Pay Their Legal Bills, 25 NAT'L J. 2522
(1993).
1. See Carter, supra note g, at 152 n.51 (citing FRIENDS OF KAY BAILEY HUTCHISON LEGAL
DEFENSE FUND, TRuSTEE'S FINAL AND QUARTERLY REPORT at v (July 15, 1994)).
m. See Below the Beltway, THE POLITICAL FINANCE & LOBBY REPORTER, Aug. 13, 1997, at
8.
n. See Kenneth J. Cooper & Kevin Merida, Many Hill Freshman Are Millionaires,Disclosure Indicate, WASH. POST, June 15, 1995, at Al; Keller & Van Dungen, supra note g ; John E.
Yang & Helen Dewar, Lawmakers Report Receiving Fewer Gifts, Trips; Gingrich Got $1.2 Million
in Book Royalties While Others Borrowedfor Children's Colleges, WASH. POST, June 15, 1996, at
A8.
o. See Mary Jacoby, Lobbyists Contributed to Packwood As Ethics Panel Voted to Expel
Him, ROLL CALL, Oct. 23, 1995, availablein LEXIS, News Library, Rollcl File.
p. See Charles R. Babcock, Defense Swells by $758,350: Lobbyists Give to Rostenkowski,
WASH. POST, June 11, 1994, at A12.
q. See Timothy J. Burger & Jennifer Bradley, It's Dday on Hill (As in Disclosure): Gingrich
Book Nets Less Than $500K, ROLL CALL, June 17, 1996, availablein LEXIS, News Library, Rollcl
File.
r. See Cooper & Merida, supra note n, atAl.
s. See Novak, supra note d, at 2522.
t. See Carter, supra note g, at 153 n.68; Babcock, supra note p, at A12.
HeinOnline -- 50 Stan. L. Rev. 136 1997-1998
November 1997]
HEIGHTENEDETHICS SCRUTINY
TABLE IV
CAMPAIGN FUNDS USED FOR NONCAMPAIGN RELATED LEGAL EXPENSES
MEMBER OF
CONGRESS
Rep. Jim Bates
ALLEGATION
DATES
Sexual harassment
1988-1989
$20,006 b
1987-1988
$400,0O0e
Rep. Bill Boner
Illegal gratuities; Extortion
(Wedtech)
Personal use of campaign
funds
1986-1988
$2 9 2 ,0 0 0 '
Rep. Mario M. Biaggi
AMOUNTa
Rep. Tony Coelho
Junk bond deal
1989
$30,000'
Sen. David Durenberger
Financial fraud
1989-1990
$15,000
Rep. Floyd H. Flake
Tax evasion
1992
$19,000 g
Rep. Harold E. Ford
Bank fraud
1987-1993
$459,000 h
Rep. Barney Frank
Fixing parking tickets
1990
$118,000 i
Rep. Robert Garcia
Extortion (Wedtech)
1989
$147,000 i
Book deal and other
charges
1989-1990
$ 273 , 0 0 0 k
Book deal, GOPAC etc.
1993-Present
$923,000
Misuse of state office
1993
Rep. Newt Gingrich
Sen. Kay Bailey
Hutchison
Illegal gratuities from
Rep. Joseph M. McDade
defense contractors
1989-1996
$315,000'
$637,0000
Sen. Bob Packwood
Sexual misconduct
1992-1995
Rep. Mel Reynolds
Sex with minor
1994
$3000 P
Sen. Donald Riegle
Keating 5
1991
$118,00 0q
Rep. Dan Rostenkowski
House Post Office scandal
1993-1995
$2,000,00 r
Rep. Jim Wright
Book deal
1989
$392,OOs
Rep. Don Young
Libel
1990
HeinOnline -- 50 Stan. L. Rev. 137 1997-1998
$11,000t
STANFORD L4WREVIEW
[Vol. 50:65
Notes to Table IV
a. These figures are rounded to the nearest $1000.
b. See Craig Winneker, Members in Ethics Fumble Use Thousandsfrom Campaign War
Chests in Legal Fees, ROLL CALL, Feb. 19, 1990, availablein LEXIS, News Library, Rollcl File.
c. See Viveca Novak, Passingthe Hat, 25 NAT'L J. 2520, 2523 (1993).
d. See Peter Bragdon, Campaign FundsforLegal Fees:It's Legal, but Is It Proper?, CONG.
Q. WKLY. REP., Nov. 18, 1989, at 3190, 3192.
e. See Winneker, supranote b.
f. Seeid.at2521.
g. See How they Pay Their Legal Bills, 25 NAT'L J. 2522 (1993).
h. See Novak, supranote c, at 2523. This amount constituted more than half of all the campaign funds Ford raised from January 1987 through June 1993. See id.
i. See id. at 2524-25.
j. See id. at 2523.
k. See Timothy J. Burger, Aftershocks, ROLL CALL, May 6, 1996, availablein LEXIS, News
Library, Rollcl File. Gingrich "used about 10 per cent ofhis campaign contributions in the 1989-90
cycle to defend himself" of ethics charges of an allegedly improper book deal and other charges.
Novak, supra note c, at 2523.
I. See John E. Yang, Peter Baker & Terry M. Neal, GingrichProves a Winner in MoneyRaisingStakes, WASH. POST, Aug. 2, 1997, at A10.
m. See Novak, supra note c, at 2523.
n. See How They Pay Their Legal Bills, supranote g, at 2522. "McDade used a third of the
funds he raised in the 1989-90 election cycle to defend himself.. . ." Novak, supra note c, at 252223.
o. See Vicki Kemper, Perfectly Ethicaland Legal, COMMON CAUSE MAG., Winter 1995, at
23, 23; see also Mary Jacoby, Lobbyists Contributedto PackwoodAs EthicsPanel Voted to Expel
Him, ROLL CALL, Oct. 23, 1995, availablein LEXIS, News Library, Rollel File.
p. Representative Mel Reynolds received between $3000 and $6000 from campaign funds to
defray legal expenses. See Glenn R. Simpson, Packwood,Others Rake It in (Again)forLegal Defense, ROLL CALL, Oct. 20, 1994, availablein LEXIS, News Library, Rollcl File.
q. See Glenn R. Simpson, CranstonDonors Get Money Back Senator Returns Funds with
Interest,ROLL CALL, Aug. 12, 1991, availablein LEXIS, News Library, Rollcl File.
r. See Robert L. Jackson, Unemployed Rostenkowski Is Facinga Huge Dilemma; The OncePowerfulLawmaker Must Finda Way to HandleSoaringLegal Bills or Take the UnpleasantQuick
Fix: A PleaBargain,L.A. TIMES, Feb. 7, 1995, at A5.
s. See Winneker, supra note b.
t. See Novak, supra note c, at 2523.
HeinOnline -- 50 Stan. L. Rev. 138 1997-1998