Justice Department retention of private legal counsel to represent Federal employees in civil lawsuits

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Title:
Justice Department retention of private legal counsel to represent Federal employees in civil lawsuits staff report to the Subcommittee on Administrative Practice and Procedure of the Committee on the Judiciary of the United States Senate
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xiv, 1120 p. : ; 24 cm.
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English
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United States -- Congress. -- Senate. -- Committee on the Judiciary. -- Subcommittee on Administrative Practice and Procedure
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Washington
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Officials and employees -- United States   ( lcsh )
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federal government publication   ( marcgt )
non-fiction   ( marcgt )

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Includes bibliographical references.
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Reuse of record except for individual research requires license from LexisNexis Academic & Library Solutions.
General Note:
Issued May 1978.
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At head of title: Committee print. 95th Congress, 2d session. Senate.
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CIS Microfiche Accession Numbers: CIS 78 S522-9

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University of Florida
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All applicable rights reserved by the source institution and holding location.
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aleph - 024788915
oclc - 04436463
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lcc - KF49
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AA00024811:00001

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COMMITTEEE PRINT]

95TH CONGRESS' 'S
2(1 SY ,oirm SENATE






JUSTICE DEPARTMENT RETENTION OF PRIVATE LEGAL COUNSEL TO REPRESENT FEDERAL
EMPLOYEES IN CIVIL LAWSUITS





STAFF REPORT

TO Il11

S1TB(I}~IITTF ON D-M INP41ST NATIVE PRACTICE





COMMJIT'T E O"N TRlL JUDICIARY



UXILI)STiATI's SENATE











MAY 17





Printed for the use of the omiteon the Judiciary


U.S GOERNLNTPRINTING" OFFICE 21-2,21 0WSINTN17 Fu s I y h.S ~ii mI ~4 um~i ~U.S (~ ~r i w I~20402 g( tlc































COMMITTEE ON THE JUDICIARY
JAMES 0. EASTLAND, Mississippi, Chairman
EDWARD M. KENNEDY, Massachusetts STROM THURMOND, South Carolina BIRCH BAYH, Indiana CHARLES McC. MATHIAS, JR., Maryland
ROBERT C. BYRD, West Virginia WILLIAM L. SCOTT, Virginia
JAMES ABOUREZK, South Dakota PAUL LAXALT, .Nevada
JAMES B. ALLEN, Alabama ORRIN G. HATCH, Utah
JOSEPH R. BIDEN, JR., Delaware MALCOLM WALLOP, Wyoming
JOHN C. CULVER, Iowa
HOWARD M. METZENBAUM, Ohio DENNIS DECONCINI, Arizona PAUL G. HATFIELD, Montana
FRANCIS C. ROSENBERGER, Chief Counsel and Staff Director



SUBCOMMITTEE ON ADMINISTRATIVE PRACTICE AND PROCEDURE
JAMES ABOUREZK, South Dakota, Chairman JOHN C. CULVER, Iowa PAUL LAXALT, Nevada
JOSEPH R. BIDEN, JR., Delaware STROM THURMOND, South Carolina
IRENE R. EMSELLEM, Chief Counsel and Staff Director CHARLE'S LUDLAM, Counsel

(II)













CONTENTS

Page
Introduction by Senator James Abourezk------------------------- Ix
I. Overview__ -------------1---------------------------------------- 1
II. Evaluation of Justice Department Policy of Retaining Private Legal Counsel to Represent Federal Employees----------------------- 7
A. Absence of Statutory Authority___ 7
B. Independence of Private Counsel 12
1. Legal Defenses and Arguments Made on Behalf of Federal
Employees._ ---------------------------------------- 12
a. Barker/Ehrlichman Defenses -___-_12 b. Absolute and Qualified Good Faith Immunity -------- 16
2. Arguments Regarding Legality of Conduct of Federal Employees_ _------- --_--- ---_-- --17
C. Impact on Criminal Investigations and Prosecutions_ 17
D. Expense of Private Counsel__ --19
III. Recommendations_ -------------------------------------------- 23
A. No Further Appropriations or Contracts 24
B. Continued Payment of Private Counsel Under Existing Contracts- ..-- - --.......... ....... ....... ..24
C. Private Bills to Pay Costs .--------------25
D. Prosecution Decisions by the Department 25
E. Amendments to the Tort Claims Act --------- 26
F. Clarification of Department Authority to Retain Private
C ounsel- ............... .............. .........27

APPENDIX OF EXIIIBITS
ATTORNEY GENERAL'S ORmnit 683-77 JANUARYY 19, 1977)
Exhibit 1: Justice Department statement of policy regarding limitation for
representation of Federal employees, Attorney General's Order 683-77
(January 19, 1977) ... ... . .... ..29
Exhibit 2: Revised version of Attorney General's Order 683- 77 (January 19,
1977) p)resently in effect .. . . ..... . .. . .. .31

DEPARTMENT MEMORANDA ON WHiICH ATTORNEY GENERAL'S
ORDER 683-77 (JANUARY 19, 1977) IS BASED
Exhibit 3: Memorandum of Antonin Scalia, Assistant Attorney GeneralOffice of Legal Counsel, March 4, 1976, regarding "Authority for Employment of Outside Counsel" .----------------_ 38
Exhibit 4: Memorandum of Antonin Scalia, Assistant Attorney GeneralOffice of Legal Counsel, March 15, 1976, regarding "Employment of Outside Legal Counsel-Nature of Contracts, Reimbursement by Other Agencies" _-_-__-_-_---_----__ 46
Exhibit 5: Memorandum of Rex E. Lee, Assistant Attorney GeneralCivil Division to the Deputy Attorney General regarding comments on
draft regulations regarding representation, April 16, 1976 60
Exhibit 6: Memorandum of Mary E. Wagner and Bruce A. Baird to
Harold R. Tyler, Deputy Attorney General regarding representation of
Government employees, June 4, 1976_ ---_---------- 81
Exhibit 7: Memorandum of Edward H. Levi, Attorney General to Assistant Attorneys General regarding representation of Government employees, January 19, 1977 --___--------_ ----- 90

I See also exhibit 13 at p. 195; exhibit 26 at pp. 312-321 (questions 1-19); exhibit 28 at pp. 400-401 (question 1); exhibits 31-38 at pp. 413-506; and exhibits 72 to 80. NoTrE.-This report was prepared by staff and has neither been reviewed nor approved by the members of the committee.
(II)






IV

IMPLEMENTATION AND EVALUATION OF ATTORNEY GENERAL'S ORDER 683-77
Page
Exhibit 8: Sam'ple Department letter retaining private legal counsel ------ 101 Exhibit 9: Sample Department letter setting fees of private legal counsel __ 103 Exhibit 10: Memorandum of David J. Anderson, Chief, General Litigation
Section-Civil Division, to Barbara Babcock, Assistant Attorney
General-Civil Division, March 21, 1977 ---------------------------- 107
Attachments to March 21, 1977, memorandum:
Report to the Assistant Attorney General on "Representation of
Government Employees in Civil Litigation" by Representation Committee of the General Litigation Section, Civil Division,
March 21, 108
Description of Pending Cases 138
Exhibit 11: Letter From Barbara Allen Babcock, Assistant Attorney
General-Civil Division to Judge Gerhard A. Gesell regarding Jack N.
Anderson v. Richard M. Nixon, May 150
APPROPRIATIONS To PAY FOR PRIVATE LEGAL COUNSEL
Exhibit 12: Excerpts from House Appropriations Committee hearings on
supplemental appropriations for fiscal year 156
Appropriation Summary 158
Testimony of Irving Jaffe, Deputy Assistant Attorney GeneralCivil Division ----------------------------------------------- 162
Exhibit 13: Excerpts from Senate Appropriations Committee hearings on
supplemental appropriations for fiscal year 189
Testimony of Glen Pommerening, Assistant Attorney General for
Administration ---------------------------------------------- 190
Memorandum of John Harmon, Acting Assistant Attorney GeneralOffice of Legal Counsel to Irving Jaffe, Deputy Assistant Attorney General-Civil Division, regarding "Authority for Retaining Outside Legal Counsel", February 18, 1977 2_ 195
Testimony of Irving Jaffe, Deputy Assistant Attorney General-Civil
203
Pending Civil Damage Suits 3 ................................... 214
Testimony of J. Edward Day, former Postmaster General ------------ 229
Exhibit 14: Excerpts from report of the House Appropriations Committee
on Supplemental Appropriations Act for fiscal year 1977- 240
Exhibit 15: Excerpts from H.R. 4877, Supplemental Appropriations Act
for fiscal year 1977 as reported and adopted by House 242
Exhibit 16: Excerpts from report of the Senate Appropriations Committee
on Supplemental Appropriations Act for fiscal year 1977- 244
Exhibit 17: Excerpts from H. R. 4877, Supplemental Appropriations Act f or fiscal year 1977, as reported and adopted by Senate- 247
Exhibit 18: Excerpts from the conference report on the Supplemental Appropriations Act for fiscal year 250
Exhibit 19: Excerpts from the Supplemental Appropriations Act for fiscal year 1977 ------------------------------------------------------- 252
Exhibit 20: Excerpts from House hearings on Justice Department appropriations for fiscal year 253
Exhibit 21: Excerpts from Senate hearings on Justice Department appropriations for fiscal year 265
JUDICIARY COMMITTEE REVIEW
Exhibit 22: Letter from Barbara Allen Babcock, Assistant Attorney General-Civil Division, to Chairman James 0. Eastland, May 19, 1977 - 272 Exhibit 23: Letter from Chairman James 0. Eastland to Barbara Allen Babcock, Assistant Attorney General-Civil Division, June 11, 1977--- 274 Exhibit 24: Letter from Barbara Allen Babcock, Assistant Attorney General-Civil Division, to Chairman James 0. Eastland, June 21, 1977 275

See exhibit 13 at p. 214; exhibit 40 at pp. 5.35-558; and exhibits 5640 at pp. 935-950.
2 See exhibit 3 at p. 38; exhibit 26 at pp. 312-321 (questions 1-19); exhibit 28 at pp. 400-401 (question 1); exhibits 31-38 at pp. 413-506; and exhibits 72 and 80.
3 See exhibit 10 at p. 138; exhibit 40 at pp. 535-558; and exhibits 56-W at pp. 935-950.




V

Exhibit 25: Letter from Senator James Ahourezk to Barbara Allen Babcock, Page
AFFistant Attorney General-Civil Division, July 13, 277
Attachments to July 13, 1977, letter:
Documents to which committee needz access and li-: t to compile- 279
Committee 280
Authority N, for Department or(ler (cjuestion ,;, 1-19) ---------- 280
Scope of the order jiue,-tions 282
lnterpi station and administration of the Dej ,iftment order
(qti(-t ion.-: 31-134) ------ 2' 4
Legal standar(Is, (qiie. -,tinmz 135-149)--- 300
Congre-41onal proc(,(,,1ing.< 304
I III TI I 11 IA 1 7( ( 1 (' I I I I )I( IN (w if'. Octoher- 4, 1977--__ 30-,
Attaclinif rits to Octo) w I- 4 1977, lett,,r:
An n I it ed h y t h (, S ),It IT I I I I A 311
Alltbol'llv for ol-deT' (quI-tions 312
(if th(, (qiie-tion-- 20 :io, 321
Tit '0 1011 M I I i I i I i i I t i t I Ti ,f the D epa "t I n o I,
31-134)
Legal -taliia-' I- )6
Corigr'--l'In'd 372
379
a I A I )( p a -t 11 1 f T I t 11 1 f T 1 1 1 7' t I I i T I N I I I
0,-di N().
IN, 't!ld ]W
1 L 11 T" I I i I L
f I : f T I I- I I- , \ I Ii I I I
T ak iw l, i t w o I, I i p :-, t i I'[ I f I t 1, i,
i I t i I I I rf. 4:1 i I I t 10 t f t I I
3
T al, 1) I)i-par-Tiiw rit On 1 '177 i 1 n t a I i I i T
rcq"I -t 384
F xh1h1t 27 Lo f t r f r(,Tll S( TI ttf r J: t I I A i )l 1 7. 3- I r I I I I I
>taiit Ati(,Fro v 314)
Attachment to Oct(,ber 12, PJ77, 1(,tt, r
F ol 10 Nv I I I ) ari(l additi()TI'll 3()'1
Y xIiihit 2,1 1,(,ttei- fr,,ni B :ti-h k7-:t A ll'.11 t' v
Divi-10n, t J:Inlt- )t 1 7 7 391
Att:tclinw ntl< t(l 1)-cem h(,r- 1' P477, lttt,,r:
Xn 'we'- to aT I ( i f1d (I t I 1 -1 110 400

I I F 01,111111 0f Ht-, T". T, f 1 19 7 (,,x h i 1) i t 5) c 0
d r I I 1 1). N. C. % '11 r Co r (I 'A i i,, i I 11, 1 '17 2 4 G)
Exhihit 29: 1,(,tter ()f j"i1I1(- Alh-11 H:thf-( "k
A- i-t'kilt A ltorlw v ('(11A11'd -(*I,,-Il I)Ivi-k ii, 22, 1977 411
1'XIIIhit 30'. Bthc(wk-, A-i-ttn,
Civil D'vi:-1,011 to Jinit- A1mw-(-zk-, 7, 11)71
---------- 1054
STATUT01)Y -k I T I 10 R I T Y F R T T U R N I Y I _\ I E A 1, R 1) 1 it t ) S : 1 -77
Exhibit 31: Committee staff III en I Orandum on ":-;tat itory _-kiithui-lty for
Justice Department 111riji, of Pi-lvate Coii.T i 1 413
E'x1ii1)1t .32: (If Jii,,(- AhM11'(1Zk- I() ( illht,:'t Director,
CollgFf'"lonL1 el-vlce' N('vemhei- 11, 1977 34)_____ 1540
F x hib It ;i : ; L( t t I >( :i ito T J L i I i ( < .- h() u i-, z k- t ) F I 11 -1 F A ( 0 [11')
trollei- (;ener;d, -Noveiiiii(,i, 11, 1977 (
1 Se(, memorandinn frcrn AT I I0 Tlifl A assistant _ktt,)rn(-,- rt ,qar',I in g
"Atithority for Employnient ("f 0111SA" CO1111sfil", Marcil 4. E;76 exhibitt 1 of Jolin m.
lLirmori, Assist int Attm io- ()fl-wi, ()f L e-al ('ounsei, to lrvin JITT(l, Ass.,st.iiit A praey
(Yeller-11-CIVII Division, regarding -Aut iority for RetAiiimg Outsido Leg il FehruAry IS. 11j77
wxhihit 13 at i)agts Dej)artrn,it aiiswirs to co'limittef, quostv)T,, ; 1-1,1 _6 at pagis 312-321); Departill"Ilt 311";,Aers toiIllOwup quc 41('n' I exh hit 2S at pagc 4( --V'P: iid eihil,.t, 72 thrOugh ,O.





VT

Exhibit 34: Memorandum from American Law Division to Senator James
Abourezk regarding "Authority of the Department of Justice to Retain
Private Counsel to Represent the Interests of the United States," Page December 21, 197-----------------------------454
Exhibit 35: Letter of Senator James Abourezk to Barbara Allen Babcock,
Assistant Attorney General-Civil Division, January 2, 1978-------493 Exhibit 36: Letter from Barbara Allen Babcock, Assistant Attorney General-Civil Division, to Senator James Abourezk, March 14, 1978 21- 1055
Attachments to March 14, 1978, letter:
Memorandum of John M. Harmon, Assistant Attorney GeneralOffice of Legal Counsel, to Barbara Allen Babcock regarding "Authority for employment of outside counsel," March 10,
1978-------------------------------------1056
Memorandum of John M. Harmon to Irving Jaffe regarding
"Authority for Retaining Outside Counsel," February 18, 1977- 1060
Letter of Attorney General Edward H. Levi to Congressman
Peter W. Rodino, December 24, 195-----------1063
Exhibit 37: Decision of the Comptroller General on Justice Department
Authority to Retain Private Legal Counsel, April 12, 1978 (B-130441) 4- 1066 Exhibit .38: Decision of the Comptroller General on "Payment of Damages,
Costs, and Private Legal Expenses of Government Officers and Employees W~ho Are Sued Under Section 7217 of the Internal Revenue Code of
1954," May 16, 1977 (B-137762 and B137)-----------494

GENERAL DOCUMENTS ON ATTORNEY GENERAL' S ORDER 683-77
Exhibit 39: Address of Harold R. Tyler, Deputy Attorney General, on
"Proper Representation of Currently Unpopular Litigants-Present
and Former Government Officials." January 30, 1976------------------ 507
Exhibit 40: Report of the Comptroller General of the United States, "Law
Suits Against the Government Relating to a Bill to Amend the Privacy
Act of 1974," May 6, 1977 (B-130441) ------------------------------518

LEGAL COMMENTARY AND COURT CASES ON OFFICIAL IMMUNITIES
Exhibit 41: Leon Friedman, "The Good Faith Defense in Constitutional
Litigation," 5 Hofstra Law Review 601 (Spring 197---------581 Exhibit 42: Bit'ens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971 Exhibit 43: Bii'ens v. Six Unknown Named Agents of the Federal Bureau of 62
Narcotics, 456 F.2d 1339 (2d Cir. 192---------------668
Exhibit 44: Sckeuer v. Rhodes, 416 U.S. 232 (1974)------------679
Exhibit 45: United States v. Barker, 514 F.2d 208 (D. C. Cir. 1975) -- ------698
Exhibit 46: United States v. Ehrlichman, 546 F.2d 9 10 (D. C. Cir. 1976) 761 Exhibit 47: United States v. Barker, 546 F.2d 940 (D. C. Cir. 1976) -- ------792
Exhibit 48: Memorandum from American Law Division to Senate Subcommittee on Administrative Practice and Procedure on "Good Faith, Reasonable Reliance on Apparent Authority as a Defense to Criminal Prosecution and Civil Liability of Government Officials Generally,"
July 7, 17--------------------------826

AMENDMENTS TO THE FEDERAL TORT CLAIMS ACT
Exhibit 49: Legislative History of H. R. 8245, Public Law 93-253, 88 Stat.
50 (amendment of 28 U.S.C. 260h)---------------853
Exhibit 50: Senate Report 93-588 on H.R. 8245 (amendment of 28 U.S.C.
2680h))------------------------------------------855
Exhibit 51: House Debate on H.R. 8245 (amendment of 28 U.S.C.
2680h))------------------------------------------862
Exhibit 52: Jack Borger, Mark Gitenstein, Paul R. Verkuil, "The Federal
Tort Claims Act Intentional Torts Amendment: An Interpretative
Analysis," 54 North Carolina Law Review 497 (April 1976) --------------868

1See exhibits 32, 72-73, and 75-76.
2 See exhibits 35 and 72-73.
3 See exhibits 72 to 74.
4 See exhibits 33 and 75 to 80.






viiI

Exbhit .53: Recommendation 91 of the Select Committee to Studyv Govern- Page
mental Operations With Respect to Intelligence ActiviGie 916
Exhibit 54: Letter from Attorney General griffinin Bell to the Vice Prfe-i ivt,
:-ep~temlher 16, 1977______ -----------------------2 0
Exhib1)it .55: S. 21 17, Fed(Ieral Tor t Cl aimi., Act Amindmnts - 92

LISTS OF CA TSES TO \XHicH ATTORNEY GiENERAL S ORDER 6,,-3-77 HASBv: APPLIED 1
Exhibit 506: Department list of case between M-%ay 4 2 and July 14, 1977,
in wic(-h private counse-(l hal I (nrtand 35
Exhibilt 57: Cuimulative, l~~atn-, 1-t f c e in which pr-ivate ,u,
had ce re tained~l, a- of Oc(tober ( 20, 1977 -3
Exhibit 58: ()prmntl ) f ae btenMy4 2atNovemi r 11
1977, in which privtef cou1n-I had I enrtie 3
ExNhil iT .59;1) ar en I( 1't ('I ofNi~b t -Tn Ma 4 2 an 2- )crla,~
19771, In which riaeonelh 11enrtied941 ExhibitC, 60: Depjartmenit list of cases pending. 1gi4,1TIt certain namei d


JUSTICE 1)EPARTMEFNT POETONOF IDRL EMPLOYFES

Exhibit 61: Jlust icei 1)epIartmnent pres t e~ and rpr nmi pnn
1in Vet I,iIao1, January -i- 14, 19 7 7------------------- 1
Exihiit162: Ju D ie1epartme- ntprs relL 1~ on Am Kanvinctnt
April 7, 1977---------------.--------10
.Exhliit 63: New' aricl on arNev Ind: I et cl 1w, Yor Tbne Aprl~

I ( 77 - --- - - - 1 1

1977- 1(,14
Exhibit 65: ('olnnicnt ~arv en 1111- a Iivv (1d1;i~- ah igu~hil


197 1017~

(2) nfomaliun har& __ -1020 3)~~~~~r ~etn ii, Ieoadm-------------------- 02X2 1


Exhii 1111 Ne~atceonI nsc, ~1a !'1 h)t 4)'1,Nx mbr1


Exhib it 71): !CA Vmen arN, bisah~ B~t ~~enVr2
197i------------- ---05
I'uwi tni t 71: iIL NS iUIUYA ioaIY1u X uNL INiA


T~K 7
xhlit72 : Rezoaiin fslwm~iEe ejutil ~~jrNi1u er5ediiu~1 -- I.xbL Ti r-A.1 A11~~1 1 T -- I 11 tt m71
~~:1; Ie 71 TL ~
400b4 i j n a Aj r ,IrI*~ I~r; aj \VAi~ ;1 tu 12 32 e xibit page






VinI

Exhibit 73: Memorandum of the American Law Division to Senator
Abourezk regarding "Congressional Ratification of Justice Department Page Practice of Retaining Unsupervised Private Attorneys," May 18, 1978- 1074 Exhibit 74: Letter from Senator James Abourezk to Senator Ernest F.
Hollings regarding Department of Justice memorandum of March 10,
1978 (attachment to exhibit 36), March 23, 1978--------------------- 1083
Exhibit 75: Memorandum of subcommittee requesting Congressional Research Service review of decision of Comptroller General (exhibit 37),
April 12, 1978 --------------------------------------------------- 1085
Exhibit 76: Memorandum of the American Law Division to Senator James Abourezk regarding "Analysis of Comptroller 'General's Decision Concerning Retention of Private Attorneys to Represent the Interests of the United States," May 12, 1978 ----------------------------------- 1087
Exhibit 77: Letter from Senator James Abourezk to Elmer B. Staats,
Comptroller General, requesting clarification of April 12, 1978, decision
(exhibit 37), April 17, 1978--------------------------------------- 1106
Exhibit 78: Letter from Elmner B. Staats, Comptroller General, to Senator
James Abourezk regarding request for clarification of April 12, 1978,
decision (exhibit 37), April 24, 1978 --------------------------------- 1109
Exhibit 79: Letter from Senator Jamies Abourezk to Elmer B. Staats,
Comptroller General, requesting further clarification of April 12, 1978,
decision (exhibit 37), April 27, 1978 -------------------------------- 1113
Exhibit 80: Letter from Elmer B. Staats, Comptroller General, to Senator
Jamies Abourezk regarding further request for clarification of April 12,
1978, decision (exhibit 37), May 8, 1978 ----------------------------- 1118











JUSTICE DEPARTMENT RETENTION OF PRIVATE LEGAL
COUNSEL TO REPRESENT FEDERAL EMPLOYEES IN
CIVIL LAWSUITS

INTRODUCTION BY SENATOR JAMES ABOUREZK
On January 19, 1977, Attorney General Levi issued a statement of policy regarding "the limits within which the Department may provide for representation of Federal employees with respect to employment-related matters in which they are involved in their indhcidulal capacity. 42 Fed. Reg. *,Th-9f (January 31, 1977) (emphasis supplied). This statement of policy. Attorney General's ()rder ( S3-7 7, sets out the Justice l)epart went's response to the deluge of civil suits relating to X atel'rate and inntl ience om11nit abuses. I hese suits, brollght against present and foriller Federal officers 1and employees in their individual capacity, allege various deprivations of constitutional rights.
The Attorney General's order goes beyond the long-standing Department policy of representing Federal emnplovees in civil lawsuits for conduct performed within the scope of their employment. The order also defines certain circumstances in which the D)epartment will retain, at its expense. private legal counsel to represent these employees sued in their individual capacities.
The Senate Judiciary (Committee has undertaken a detailed review of the order under which the program operates. The committee's review of the Attorney General's Order 6s3-77 was undertaken as a resutilt of conference committee action on the I)epartment's Supplemental Appropriations Act for fiscal year 1977.
There the Department had requested $4.s78,0) for private counsel fees.
During the Senate hearings on the Justice Department supplemental appropriations request considerable attention was focused on the request for funds to pay for private counsel. See exhibit 13 at pages 189 to 239. Although "fully aware of the ethical conflicts which have required the Department to contract with private counsel instead of the usual direct representation by Department attorneys," the committee was
gravely concerned about the Justice Department providing private legal counsel for the benefit of government employees who have been sued in a civil action for alleged unlawful intelligence and law enforcement activities while conducting assignments related to their employment. The committee believes that, without prior court sanction, Federal employees should not have free rein to perform questionable acts that derive their justification from administrative or executive policy rather than law. The burden and expense of any subsequent litigation resulting from such acts should not be borne
by the people of this country. Exhibit 16 at page 246.
(IX)





x

The Senate Appropriations Committee specifically recommended that there be
incorporated in that order a procedure, requiring that should the employee be found guilty or liable for damages. whether the legal action be criminal or civil against a Federal employee or the defense be provided by the Department or private counsel, the legal fees will be repaid the Government by
that employee. Exhibit 16 at page 246.
In chamber action, the Senate appropriated the full $4,878,000 to the Department but provided that
none of the funds appropriated ***for payment of private counsel fees shall be obligated or expended by the IDepartment for the representation of any defendants in suits commenced after the effective date of this act, until the Committee on the .Judiciary of the Senate expresses approval of the policy statement embodied in the Attorney General's order No. 687-77 (sic) dated January 19, 1977. (Emphasis added.)
See exhibit 17 at page 248.
The House supplemental appropriations bill which went to conference (lid not approve any money for Department payment of private counsel fees although a great deal of time had been devoted to the subject during the House supplemental appropriations hearing. See exhibits 12, 14, and 15 at pages 156, 240, and 242.
In conference,, the H-ouse agreed to an appropriation of $1,860,000 for private counsel fees; the Senate agreed to delete its express provision requiring Judiciary Committee approval of the order. See exhibit 19 at page 252. However, the conference demonstrated its concern over the amounts of money being expended and the wisdom of the policy by providing in its report that:
the conferees are agreed that none of the funds available to the Department shall be obligated or expended by the Department for the representation of anv defendants in suits commenced after the effective date of this act, until the appropriate committees of the Senate and the House of Representatives have reviewed the. policy statement embodied in the Attorney General's Order No. 687-77 (sic) dated January 19, 1977. See exhibit 18 at page 251. (Emphasis supplied.)
It is the fund limitation and mandated review which led the Assistant Attorney General for the Civil Division, Barbara Babcock, to write Senator James 0. Eastland, chairman of the Senate Judiciary Committee, on May 1. 1977, requesting a meeting with representatives of the committee to "discuss" the order. See exhibit 22 at page 273.
On June 15, 1977, representatives of the Senate JTudiciary Committee and the Depa-rtment met.. In light of the detailed examination of the order contemplated by the committee. the Department exprec-sedl its need for interim authority to hire new private counsel on a case-bycase basis pending completion of the committee's review. A June, 21, 1977, letter from Assistant Attorney General Babcock, emphasized this point by sugzzesting that pending completion of the detailed review of the statement. "a Treliminary review" be completed "so, that the Government may retain private counsel in the cases which have





XI

been or may be filed." However, it was understood that such a preliminary review "would in no way prevent the committee from examining the implementation of the Del)artment's policies with respect
to the retention of private counsel."" See exhibit 24 at page 275-276.
In response to the Department's need for interim authority, on June
ill 1-977, Chairiiian Eastland wrote to the Attorney General stating:
I un(ler4and that several cases have been filed which may
require the retention of private, counsel. Because the committee, lias yet to comi)lete its review. the Department"s existing proo--edures for tlie retention of private counsel should, in the, nicantime. contain to be followed. While the. committee is con(111(,till(r it:_ 1-(, -jOW it understaii(Is that. tlie Del)artment has a to apprise tho coii-itnittec of any decisionn to retain 1)rivate coiin- (,l ari zing under tli(,, guide] nes, and, if practicable, before such tiecision is inipleniented. See exhibit 23
at pacre 274.
B v ii-lemos (1,ife(t July 14. October 220, 'N'ovem1wr 11, and Decembe r 2,s, D774, the Jir-tlce D(,j).artnient. lia-. in fact, aj)j)rised t1w committee of eacli in.-;tan(-e when it li.i-z retaliwd private , counsel. See, exhibit" -C, ; % -P.,
1) ) a at pap-- to 943. SiTwe the Suppleiiiental
) i I ,,lid 59 ,
AJ)J)N)priatioii: Act kcianie 1,aw oil lfav 4 1977. flie, -Departinent. lia O)e J111w I I Ictler retlillwd 29 (111d 1"1w ftrm,, -, to repre- ('Ilt 3() M 12 ca-('1<. '14(.(, exhihil -) ) it 1),t(ye 9,41.
11(r ()jj ()I' the Tjl(ji
(- arv Cwiimitt(,(, I sent a coinpr(liensive I lite 1)* '. '
IVI -101! (M hlk- 1:), 1977. eXIIII)if 2.5 at pag(l to (,i(rjjt cat(,(rories of documents
ai)(t tliat t1m, Deparmwnt (*01111)11t, (I list ()f ill which outside
(101111<01 bad K'(.11 retaille(l. )TI 0(.to])(,r 4. 1977, AF!: *:- tant Attorney Gelwnd Tlah. "ck prm-i(lcd to f1w que fioiil, and a number o f
the. docujiiei&- ExIiibit at litr Ow DepartI _k f W1
iiient'ssulm il,- ?, H,
Babcock im In Deceiiiber 22 leffcr T inquired 111)0]lt ,I and t1w li,;4 of F ,,Khibit 99 at
pa(re 411. Tn reSpOTISe to tjj( Pect'lliber 2.) oll I (A)r1l, 1978.
Af 11,alwock T)rovi(jed tll(, (1(willilelit 4 "1111 li-4. e( xli*l)it 36 at, pacre 10,54 taii(l exlJbit GO at 1),I(r(, 944. rThr()u(rlj()jjt- tjj(, (qjjt( Pjj I -i -v Coniniittee s rex-iew, the cooperation of the J11-1 kv I )ep,(l I t1liellt ll(,(,Il exceuent. n(, j )(,virtiteiit has allSW01'ed a ]at-_(re mmilwr ()f 41bout it,< prix-latc, (101111 (Il prograia and prm-ided (kt tikd (4)(, -umelitation needed by the committee to evaluate, the I)rOgraill. in ex-('F N of the inN-estigation both the.
committee an(I the Deptartnient liavc taken evv,-Y precaution to avoid prejudicing tli( riglits of Fe(leral M poii(ling litigration.
Due to the. voluine a,,(I I)Iexi,, N. of ateri.il< whicli tli(, Judiciary COT)Mlitte(l geller,,I' f1le ill, I I
te(l. I Live dirc(-ted that tliiq staff report be prei)(ared for OW ISe of flic cwmiiittee. Tlii" staff report, anaYzes, tli(, challenge presented t)v lawsuits and the complications
involve(I in the Government re'taini'inZ Dri%-ate le(ral counsel to represent the defendantss in these civil lawsu-'tsL.





XH

The staff report concludes that the Department has no statutory authority to retain private legal counsel under the terms of theorder. This is very troubling to me because I believe that Federal employees should normally not have to bear the costs of defending themselves in civil suits -involving conduct within the scope of their employment. The report also raises substantial questions whether the Department's policy underlying its decision to retain private legal counsel in these cases is consistent with the public interest.
The Department policy of retaining private counsel arose out of a genuine concern for the plight of Federal employees subject to suit. There is, however, substantial doubt about whether the Department has the requisite statutory authority to retain such counsel. I question whether the Department has not, in fact, committed itself to a policy and a program of substantial public importance before, carefully reviewing its statutory authority.
The staff conclusion that the Department has no statutory authority to retain private counsel is based on an extensive legal analysis prepared by the -staff, an analysis in which the Congressional Research Service concurs. The Department's absence of statutory authority to retain private counsel raises -the clear possibility that the Department's existing contracts with private counsel may be invalid.
At the present time the Department has contracts with approximately 80 law firms to represent 107 Federal employees in 27 cases. Several million dollars have already been appropriated to pay these law firms. However, each of the contracts with these firms now may be in jeopardy. EA ven if the contracts are eventually found to be enforceable, this uncertainty itself adversely affects the interests of these Federal employees. V
Aside from the absence of statutory authority, the staff report raises serious reservations about the independence given to the private counwho are retained by the Department. I understand that the Department order is based on the premise that private counsel must be given complete independence in order to avoid the conflict which originally made it necessary to retain such counsel.
As the staff report observes, however, a direct consequence of this independence is that private counsel are free to raise any defense including a, "superior orders" type defense-or argue that activities such as mail openings or surreptitious entries are legal. Indeed, private counsel are free to assert legal argument even though the Department believes such arguments not in the interest of the United States to assert. The staff report concludes that the Government should not allocate. its resources, directly or indirectly, to support anyone advocatinz "superior orders" defenses-whieb were rejected at Nuremberg -or the legality of mail openings or surreptitious entries.
I agree, if Government employees are to 'be held accountable for their actions, private attorneys retained by the Department should not be, permitted to raise "superior orders" type defense or to raise other arguments wbich violate the public interest. There is some question whether the, authority of private counsel to raise. these defenses can be limited without infringing on the ethical relationship of such counsel with their Federal employee clients. If the independence of private





XIII

counsel to raise these arguments cannot be limited then continuation of the Department program would be inadvisable.
The staff report also expresses concern that by defending Federal employees in civil cases, the Department may inadvertently be discouraging vigorous investigations and, or even prosecutions, of these same employees by other Department officers and employees. Under the order, the Department will retain private counsel to represent a Federal employee in a civil suit even if a criminal investigation of the same employee for the same conduct is pending. Moreover, the Department will hire private counsel if the employee is being prosecuted for conduct unrelated to that involved in civil suits.
My concern about this policy is that even if there is no adverse impact upon criminal investigations, there may be substantial public skepticism about any decision not to prosecute a Federal employee for conduct which is the subject of a civil suit in which the Department has retained private counsel to defend the employee. The public may be equally skeptical if an indicted employee is allowed to plead to a lesser charge. In short, when the Department accepts a lesser plea or fails to prosecute a Federal employee while also paying for private counsel to defend that same employee in a civil action, it appears as if the departmentt is more interested in protecting the employee than in holding him accountable.
The Departni(ent argues that on balance, these problems do not outweigh the public interest in repre-nting Federal employees. As I have said, I am s llpathetic with the need to protect Federal employees from the cost of litigation in harassment suit-. I do not believe, however, that this program is the proper response. I believe that a real alternative to the I)epartmwnt' problematic pliey of hiring private legal counsel lies in the adoption of a modified s ersion of the amendment to the Federal Tort (Claint- Act (FT('A) which the D)epartment has proposed. See exhibit at page 92{ Iuder the I)epartment's proposal the United State would be suah tituted a- tthe defendant in civil cases involving Federal employees after the Attorney generall las certified that the employee was ating within the sope of hlis employment. This would substantiallV reduce the need to retain private e ounsel as the Governmwient-:and not the individual-would be held liable for any damages.
Given this alternative. I agree with the conclusion in the staff report that the Judiciarv (' committee should move in an expeditious manner to adopt appropriate anmendiients to the FTCA. I would caution though that in any amendment to twhe Tort Claims Act immunizing Federal employee from civil suit. it is particularly important that the committee insist on the inclusion of some system of strict individual accountability. It is essential to maintain an alternative way o di ipline Federal employees who violate the conlstitultional rights of Amewricans. For employees who cannot be made subject to such a disciplinary procedure, personal liability must be continued. Under no circumstances should the Department's bind in hiring private counsel lead to any net reduction in the accountability of Federal employees. Any bill amending the Tort Claims Act which does not strengthen disciplinary procedures and provide for direct suit against





XIV

employees not subject to disciplinary proceedings is totally unacceptable to me.
Pending action on Tort Claims Act amendments the committee should hold in abeyance any recommendation to the Appropriations Committee that the Justice Department phase out its program of hiring private counsel. I sincerely hope no more money will need to be appropriated for the private counsel program and that obligations under existing contracts with private counsel can be fulfilled by the 1977 fiscal year appropriations.
It is my hope that this staff report will sensitize both the Justice Department and the Judiciary Committee to the need for action to maintain and strengthen the system of accountability for Federal employees while at the same time providing a more rational system for defending Federal employees for actions taken within the scope of their employment.
JAMES ABOUREZK,
Chairman, Subcommittee on Administrative
Practice and Procedure.












I. OVERVIEW
Investigations of the Senate Select Committee on Presidential Campaign Activities (Senate Watergate Coniinittee) and the Senate Select Committee to Study Governmental Operations With Respect to Intelligence Activities (Senate Intelligence Committee) revealed and documented widespread violations of the civil liberties of American citizens by Federal officials. Illegal campaign practices, illegal electronic sIrveiIt lanIce, il legal s Irreptit oll eitries, illegal n a I l einings. misuse of Government agencies, and harassment of citizens exercising their first amendment rights had been commonplace. Approximately 200 civil suits have been filed by the victims of these abuses against the present and former Federal officers and employees allegedly responsible. See exlj ibit 60 at page 944.
With few exceptions these lawsuits have been brought against the present and former officers and employees in their individual capacity, as distinguished from being brought against them in their official capacity under the Federal Tort ( lainis Ac t, 25 I ..C. 671, et se (FTCA). This is because-with one limited exception-the Federa Tort Claims Act does not waive sovereign immunity with respect to civil suits alleging deprivation of constitutional rights.
Jurisdiction in a suit under the Tort Claims Act is based on 28 U.S.C. 1346(b) and extends only to claims for which sovereign immunity has been waived by the FTCA. The general waiver of sovereign imununity for certain common law torts conunitted by Federal employees is contained in section 2674 of title 28. Thlis waiver is, however, subject to exceptions enumerated in section 2680. For example, claims "based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty * *, whether or not the discretion involved he abused" are excluded bv ect ion 280 (a). as is "any claim arising out of assault, battery, false imprisonment, false arrest, 111aliciouS pro'secultion. at se of process, lel, slander, misrepresentation, deceit, or interference with contract rights * *" (section 2680 (h)).
In 1974 Congress amended section 2680(h) to limit this latter exclusion only to claims against a )peson who was not an "investigative or law enforcement officer." Under the amendment, therefore, Federal Tort Claims Act suits can now be brought against an "investigative or law enforcement officer" in his official capacity for assault, battery, etc. See exhibits 49. A5). and 51 at pae5 >i to 915.
Bringing suits against an investigativee or law enforcement officer" under the FTCA is, however, not-like most other FTCA cases-an exclusive remedy for an aggrieved party. An aggrieved party can bring a suit against the officer either under the FTCA or against the officer in his individual capacity.
(1)





2

In contrast, section 2679 (b) makes tort suits against Federal employees for negligent operation of a motor vehicle the "exclusive" remedy which an aggrieved plaintiff may pursue. In such a suit the Attorney General has a statutory obligation to defend such employee if he deteifmines that the employee was "acting within the scope of his employment." Section 2679 (c). Upon making a determination that an employee was acting within the scope of his employment, the Attorney General is required to certify this fact to the court in which the suit is pending, may remove the case to a Federal district court if the case was pending in a State court, and must substitute the United States as the sole defendant in the case. See section 2679 (d). If the employee is found to have been negligent, the United States-and not the employee-is liable for monetary damages, not including punitive damages. In these cases, regular Department staff attorneys represent the United States. There is no attorniey-client relationship between the Department attorneys and the Federal employee because that em.ployee-upon certification by the Attorney General-is no longer a defendant in the suit.
For most constitutional torts, however, such as invasion of privacy, there is no explicit provision of law requiring the Government to defend the employee, no basis for the Government being substituted as the sole defendant, and no basis for Government, liability. The defendant in such cases is the Federal employee, who may be held to be personally liable. Cf. Burn baum~ v. U.. 436 F. Supp. 967.
This potential individual liability of a Federal officer or employee is a recent development in the law. Beginning in 1970, the Civil Rights Act was amended to permit citizens to bring Civil actions against individuals and State officials for deprivations of constitutional rights. See. 2 8 IT.S.C. 1983. In 1,971 the Supreme Court, held in the case of Bivens v. Six ffnkn own Named Aqe'nts of the Federal Bureau of Narcotics. 403 U.S. 388 (1971) (exhibit 42 at page 625) that there, was an analogous Federal common law right for a~n aggrieved citizen to sue Federal officials for deprivations of constitutional rights. Subsequent cases have held that Federal officials have a qualified-not an absolute-immunity to protect themselves from such suits. See Biven., 456 F.2d 1339 (2nd Cii'. 1972) (exhibit 43 at page 668 and exhibit 41 at page 581).
As a result of the new availability of civil law suits against Federal officers for constitutional tort, most of the civil suits arising from Watergate and the intelligence abuses have been brought against
officers or employees in their individual capacity. The purpose of the Attorney General's January 19, 1977, order is t'o offer the services of the Department of Justice in defending or in retaining private counsel to represent employees in these cases.
This offer is entirely voluntary on the Department's part. The Department will defend employees only under the terms of the order and has absolute discretion in defining the conditions of such representation. The United States has no statutory authority, however, to pay damages which are awarded if the employee is hel-d to be liable.
The purpose of the Department providing representation is "to protect the interests of the Government by assuring adequate representation with respect to legal issues in which the United States has a concern and by freeing its employees from the fear that proper and vigorous performance of their duties may result in substantial per-





3

sonal legal expenses." See memorandum of Attorney General Levi, Janiiary 19. 197 7 (exhibit 7 at pa(re 90). While it has been a longstanding Department policy to reprec,-ellt Federal employees in civil Suits arising from official conduct, the need for a policy statement became apparent with tlie flurry of civil suits since 19.76 alleging illerral surveillance and harassment actiNI-ities. In addition to the stated purpose of sliieldill(T empb)yees from the cost of defending these 661 suits, the order addresses the complex conflict situations which arise ill Stich suits.
First. a imiiiber of the F(,dtrJ employee defendants in, t1lese civil j I ill 111111t'l. ill oil foi- th e saiiie
1) V tile foi- criminal ind* '[frient. 1-11 tlli itllatlofl w1wiv (a 1 --: a -tar(ret of la fcdI . 17
])lit -11(j (1(, 1-j)II to all ill(E ctl1wTit ()I, is- Ile oil inforlwition- 1;i- lw( n tile Ptpartillent will
retaill private counsel at it.- (-xjwii- (, to rkpre- (,tit the employee in any Civil suit,, t.,.overilicr t1le Illatter 111volved in the Crimill.11
ill I (rtit 1011. If -,I indicted for fli(,
('(41duct, t1w 1)(Tarl '11k,111 %VlH to 1"I v fol: slicli private Colin()11 Ow ()Cw l, Iland. :11w 11r:lt 1011 1 z terlillil'iteJ Avithm it llid 'jj 111(,IjI. I w ill, n%-(,I- tile. de11w 1)cp trtiiwnt will -Jl- () repic-Sent, a Federal

k)l- AvIlicli 1- 11W i ,tc -W ject of t1lat particliltar cl. -*1
1-,vell if I i Ft-(,W ral cj11p!(,.% ve 1- fe(], re crill (a r 1)(")-artillent
't t t I k '()l I I i I I I I t t k I I t t lit, (-Ill I )Vc( 111 lillrel I I t'I
I I i I s
ill "Idditioll to ]Ilrillz ],rivatc cwll ,- tl wlwit t1wre is an ongoIll (1,1111jIlal ill llzat P)11. t1it, I retm il priv tte C011117--('] w 1w it I 1w iv 1 I ( (m ilict L:Ilw i_ r AN'lien, ()it,, ()f tw o 1'(,deral 111 "t P )-itl()II 01"It i-. k-ontrary to
th'it (-)f t1w w d(A't lid.allt. t1lit, I )"p it I Tiwlit *%, .11111W lvpre- ellt both"
it is ]lot for Ille ([vto,11*111111(l lv' 10 is tellilloy the
I" ilf ._12 7. :*'NtTM..Ite private Coll, I el re thell retailled to r(Tiv-elli (' wll
k t1111A (ri-will(l fiq 1111-111-(r private coull-(11 lias (leveloped vlcal. t1lat I'lle private C01111-(1 1) v tht, j)('p li'tIllellt to replv- ('Tlt
Fv(ieral eiiijd() vtk,- wtiv 1 o lii(lepeii, lk iit of tipervj-4ion I)y
6cuci-al. Ili fact
the Attorlw v uppleiiwnt:iry information"' ', zsued
,I.; *I pirt of t1w orde r stated explicitely that --tile l)(,1)artllwl1t will not
7/ for -wliere tile po itioiis taken would oppose,
po- itl()11_ 111(lintaineil 1) v tlie T-nited States itself." See exhibit 1 at I)a (r -'),9. ( I Upplied.)
J)iiring t1w drafting ()f the initial order, there wa-: -:i il).-t anti al debate Nvitliiii the Departnient is to w1letlier should
be free to raise le(r,11 arcruinents whi(-h conflict with Department positions. Tile draft order circulated for commitment within the Department. contained a provision that "all legal arg(ruments appropriate to the employee's Cl lse should be raised (1) y I)epartiiient staff attorneys representing a Fedenal eitiployee) evon if thev conflict witli. Pel)artiiient of Justice or other croN-ernment positions." See exhibit 15 at pacre 78S.


21-221 7- -






The then Assistant Attorney General in charge, of the Civil Division, Rex Lee, argued strongly that regular staff attorneys should not be free to raise such arguments. See exhibit 5 at page 63 and exhibit 6 at page 83. He argued that it was unclear whether the Department "possesses the'legal authority to authorize its attorneys to advance legal arguments and take appeals which are contrary to the U.S. interests." See exhibit 5 at page 64. And he warned that if such independence were permitted the Department could expect that '-within the next year Justice Department attorneys will be arguing for the legality of all Cointelpro programs." See exhibit 5 at page 64.
In evaluating Mr. Lee's arguments, two attorneys in the Office of the Deputy Attorney General found this issue to present "the most difficult" problem they had to face in drafting the order. See exhibit 6 at page 83. In fact, they were unable "to reach a solution with which [they were] both comfortable." They argued that "the chief obligation of the Department of Justice is to protect the interests of the United States" and that "any diminution of [the Department's] overall Government interests for the sake of advocating any individual employee's interests is disturbing at best." Exhibit 6 at page 83. Despite these doubts, the draft order forwarded to the Deputy Attorney General still contained a provision allowing Department staff attorneys to raise arguments which conflicted with Department positions. See exhibit 6 at page 88.
When the order was finally issued by the Attorney General on January 19, 1977, this section providing for the independence of Department staff attorneys was deleted. See exhibit 7 at page 94. In fact, the order not only specifically provided-contrary to these earlier drafts that Department attorneys could not assert positions which "conflict with Government positions," but it further provided that the Government could not even "pay for representation where the positions taken would oppose positions maintained by the United States itself" a 1)(0w provision not in earlier drafts. Thus, neither staff attorneys nor private counsel were given independence to raise arguments not in the interests of the United States.
This position, however, was soon reversed in the revised version of the Attorney General' order which is now in effect. This revision makes it clear that the ethical obligation of private counsel retained at the Department expense runs solely to the Federal employee. All retention letters to private counsel make this responsibility explicit. See exhibits 8 and 9 at pages 101 and 103. Thus, private counsel are now free to argue any legal position or defense in the interests of their client even if that position is "not in the interests of the United States to assert" or conflicts with a "Government position.":, Consequently, the Department will now pay others "to do what the Department has decided it is unable to do directly. * See exhibit 10 at page 116. This position is reached in part because the contrary position "would lead in many cases to the complete termination of any form of representation * 11 Exhibit 10 at page. 116. But "more importantly
* * private counsel are retained in the first instance to protect an interest of the United States, employee morale, which could not otherwise be preserved." Exhibit 10 at page 116.
,,The Department has acknowledged that there is no difference between "Government Positions" and "Positions or defenses in the interest of the United states.,, See See. 50.15
(a) (7) (ii) and See. 50.15 (a) (10) of the revised order, exhibit 2 at page 31 and exhibit 26 at pages 358-359.




5

Moreover, the revised order now requires that the issue of the need for independent counsel be raised whenever Department staff attorneys will not or cannot raise certain arguments which an employee client wishes to assert. See section 50.15(a) (10) of the order, exhibit 2 at page 35 and exhibit 26 at page 349. (Question 93.) Indeed, the Department attorney must. "promptly inlorn the employee * that such positions will not be asserted." See section 50.15 (a) (7) of the order, exhibit 2 at page 34 and exhibit 26 at page 349. (Question 93.) U')pon such notification the employee can either consent to the Department position or request private counsel. If private counsel is retained by the Department, such counsel is free to take positions which conflict with or oppose Governmelnt positions or to assert legal positions not in the interest, of the United States to aS..ert. See exhibit 26 at page 35a. (Question 113.)
To sunniuarize these developments, in the initial version of the order there was no provision for hiring private counsel to raise arguments which the D)epartmnent would not raise, let alone any procedure which would force a D)epartnilent attorney to raise tihe issue of the need( for private counsel. 1)epartment attorneys still cannot raise arguments which conflict with tihe interests of the United States. But now private 0cousel are retained to raise these arguments.
A curious contradiction exists within the order on the point of the independence of private counsel. The department does assert that it will refuse to retain private counsel if "representation is not in the interest of the United States." See section 50.16(b) (1) (iv) of the order, exhibit 2. at page -7 andl exhibit 2G at page 3,,. (Quest ion 113.) It is not, clear how the I)e)partmiient reconciles that position with its policy of hiring private legal counsel in order to raise a "legal position or defense not in the interest of the United States to assert." The I)epartmient (alannot both give private counsel complete independence and assure that the interests of the United States are not adversely affected by tlhe legal arguments advanced by such private counsel.
Altlmugh D)eputy Attorney General Tyler recognized that conflicts may arise between these two interests (see exhibit .3 at pages 512513). in its answer to thle coninittee the )epartiennt does not acknowled(ge that the interest of the United States in representing Federal employees can be in direct conflict witli tlhe interest of the I united States in legal positions and arguments made in court. See exhibit 28 at page 403. (Question 6.) Instead thie I)epartment argues that "if, after hiring private counsel, the broader interests of the Uinited States require representation, that objective can be accoImnmodated through the vehicle of an amicus appearance." Exhibit 28 at page 403. (Question 6.)
In determining whether it is in the public interest for the Goveminent to represent an employee in a civil suit, particular problems arise when that employee is under investigation for possible criminal conduct. The Department policy is that "until it is determined a crime has been committed. [it] must assume the person acted properly and deserves representation." See exhibit 13 at page 2-08 and exhibit 39 at page 511. The Department thus operates under "a presumption" that Federal employees are "entitled to some form of representation by the





6

Department of Justice, by the Government, for acts they performed that arose out of their official duties." See exhibit 13 at7page 225.
This presumption is almost a necessity if there exists the possibility of prosecution.,In this situation the Department "cannot fret all the facts" about the case. The employee "cannot tell" the Department what it needs to know "because it might be used [by the Department] in the criminal investigation." See exhibit 13 at page 226. Once the Department terminates a criminal investigation without recommending a prosecution, the Department views it as a "necessary conclusion" that the conduct "can be defended as a permissible, not unlawful form of conduct,." See, exhibit 13 at page 210.
Apparently, the. Departments position is that it is in the public interest to defend any conduct which has not been held to be crIminal. This hardly comports with its stated policy of refusing to retain private counsel if "representation is not in the interest of the United States". The practical result is that, "however gross tl-) at conduct may seem to the layman," the Department has not once, found the public interest to be, independent grounds for refusing to represent an employee sued in his or her individual capacity when the Department has determined such employee was acting within the. scope of his or her employment. See exhibit 13 at page 210 and exhibit 26 at page 336. (Question 57.)
Once it has been determined that it is in the public interest to represent an employee and that private counsel must be retained, the Department will normally defer to the counsel selected by the defendant employee. See exhibit*12 at pages 177 and 179-180. The rate of pay for such counsel is negotiated in each case and varies between $50 and $75 an hour, which is often less than such attorney's customary fee. See exhibit 12 at page 180 and exhibit 13 at page 203. The bills submitted by such counsel are reviewed by the Department, but no limits on the niunber of hours the private counsel can work on a case are imposed by the Department in advance. See exhibit 12 at pages 180-181 and exhibit 13 at page 203. If a Federal employee is eventually held by a court to have performed acts outside the scope of his employment, the Department has no basis for recovering the attorneys fees paid to the employee's counsel. See exhibit 4 at page 54 and exhibit 26 at page 364. (Question 133.)
Pursuant to the order the Department has to date hired 79 lawyers or law firms to represent 107 defendants in 27 cases. Some of these defendants are named in more than one suit, for example Richard Helms is now represented in six different cases by the same law firm.
Approximately 175 other cases are being handled by regular Department attorneys. In cases where criminal investigations have been closed, Department staff attorneys have replaced private counsel.
The cost of the. private counsel who have been retained was $12,000 in 1974, $47,800 in 1975, and $554,306 in 1976. See exhibit 13, at page 228. Of the $1,860,000 appropriated by the Congress for fiscal year 1977, $448,520 was expended prior to October 1, 1977, and the rest has been obligated for fiscal year 1978. In the fiscal year 1978 budget, the Department has requested no additional funds, but warned of the possible need for a supplemental appropriation in fiscal 1978. See exhibits 20 and 21 at pages 253 and 265.











11. EVALUATTO'N OF R STICE DEPARTMENT POLICY OF
RETAI__N-TNG PRIVATE LEGAL COUNSEL TO REPRESENT
FEDERAL E-MPLOYEES
The Attornev General's order arose f roma, sincere desire on the Department"s part to n-zolve the conflicts, whicli Nvotild othenvise prevent the Department from rel)re criticisnt z: (J) 'I'll(, DeptIrtment li& jio statiitory tluthorit-V to retain priv,,tte le mimi-el who-imlike "ll. I)epartnient staff attorIh, A' not 1111(l(,r the suptrvision.iii(I control of the Attorney General; (0) priv'It" 1(' _(r',11 col-ln<( 11 ivtiiiw(I I)Y the Department are free to
1(,cral arylII)pI)f: which tl'w h('I1*(1'V('1"-" 1IIT 110t 111 the
pliblic, lllterc -l to nli -o: (3) f ]I(, j (,taillillcr 1(,(rj I ,01111v I-nill(r the
to rVpr(':-('Ilt III CI 11 slllt- ('.()lI('c
a(1-ts which aro sub rin -11 -(., 'I .
ject ()f a I )ill, 111% 11(r" tion li is the effect of dis,jf'rljILr vjcrorolj,
coil 1" (4 tll(. Fckl(,ral employees by the
Dej)'Irtnwnt: (4) private I(,(-r:d ('0111IS(Il is prollibitively exjwli"- Ive. Fw-ll of tlw
A. kB,4FN(T OF STVIVTORY kl_'I'11( RTTY
The staff study cwwbides thit the Jii-tick, Pcpm-tment lias no statiitory authoritY to ivfmn private b, gr;il cmm-(I who ai-e.-mider the terms of f1w oi der-indepnkknt of DepartnwiJ ,111d COI It I-01. I f t III ('(-)I I C I I I:-M I I I 'Ill W 1. t I w va I i d it v () f (' I k' I I of tl w ,ipproxiiimt(d 79 cmitrzictl- whWh t1w has awarded to law
to vee" N ()tild Ix., illiclear, lio flirther conti-'wl< for prlv"It( ('wlI1>(11 (,()Illd ly, it,,vm-Jed wldcr the order, and im fill-ther 1'1111J- cmild he appi-opriated to pay for private cminsel fees witholit ]I(,\,. stalutol'v allthorltv. _Mon'()"-cl- the j-1-lit, of such laNv firms to denifind fiu1Iwrv(1Y11Wl1tS 11TIki(']'(,x*l:---t'l,,I, r( ()Iltl',I(-tSIVOIll(I beeqiially 1111cle"I I-.
Nmvhcl (' In tll, ilifern.ll llleiiim-anda prm-loled to the committee does, the D('pm-t I] IcIA any doul)f :0)mit it.i statutory y authority to reScalitt and J01111 T1,11-11mil, the fornwr .1ml pr(- ('Ilt _kssi4 lnf 'Attorne-vs ('elj( ,ralOffice of Cojln, (,I. their judgment that the
J)epal-tllwn did have legal withority to retain private, counsel. See exhibit 1"') :It p"I1_('-" 10) "11IJ exhibit, 3 :Lit I)al-(r(, In the mo.st- recent of tl)(,<(, I("-()-,d 11)(111101'(111(lum (1,tt( d Febi-iiarv 1S, 1074. _ttm .lley Gener'll Ifarmoll n"whed thl.-- coil ion., relvingon iinplied authority ill 98 T-T.S.( 509, 11-1d "(110 tI'.l(IIti0TI al pi ce of the Depai
111011t ill defending civil snits; Exhibit V1 at, pagre 196. A third opinion re'whillcr the same, conclusion was i-- -md on _.Nfarcli 10 1978. Exhibit at, page 1056. Diii-ing oil t1w supplemental appropriations bill, Department, Nvitncs- (,s eniplia (7)







U.S.C. 509, which provides that "all functions of the officers of the Department of Justice and all functions of agencies and employees of the Department of Justice are vested in the Attorney General * *" Exhibit 12 at page 185.
During the course of the Judiciary Committee review, the Department was twice requested to explain in greater detail its authority for retaining private legal counsel. See exhibit 25 at page 280 and exhibit 27 at page 393. On both occasions the Department reiterated its reliance on 28 U.S.C. 516 and 517 which reserve the conduct of litigation in which the United States is interested to "officers of the Department of Justice" and authorize the Attorney General to send the "Solicitor General or any officer of the Department of Justice" to attend to any "interest of the United States." See exhibit -6 at page 313 and exhibit 28 at page 400. In neither answer did the Department mention section 509.
In the committee's first inquiry the Department was asked whether the legislative history of 28 U.S.C. 515 and 543 didn't indicate that "the Department may only retain private legal counsel pursuant to one of these two sections." Exhibit 25 at page 280. These two sections define how private attorneys, under the supervision and control of the Department, may be retained. The Department also was asked to consider two cases, Croswaite and 1960 Acres of Land. The Department answered these inquiries by saying it believed it did not have to retain private counsel under sections 515 and 543. Indeed, it could not retain T)rivate, counsel under sections 515 and 543 to resolve its conflict of interest because such counsel are under its supervision and control. See exhibit 26 at page 315. (Question 6.)
In the committee's second inquiry the Department was specifically asked to explain its reliance on sections 516 and 517 given the fact that. neither section 516 or 517 makes any mention of Department authority to retain private legal counsel. The Department was again asked to "refer to the legislative history" of sections 515 (a) and 543. Exhibit 27 at page 393. The Denartment responded that it was "unaware of either the legislative history or court precedent which the committee is relying upon to indicate that the cited sections fail to support the retention of private counsel." See exhibit 28 at page 400.
As a part of the committee's review of the Department's statutory authority, a detailed, 37-page legal memorandum (hereinafter "Committee Staff Memorandum") was prepared which concluded unequivocally that the Department has no statutory authority to retain private counsel under the order. See exhib;t 31 at pafe 413. This -memorandum relies on an exhaustive legislative history of 28 U.S.C. 515 (a) and 543 and of the related Proviqions of 5 U.S.C. 3106.
On November 11, 1977, the committee staff memorandum was forwarded to the Congressional Research Service of the Library of Congress and to the Comptroller General for review. See exhibits 32 and 33 at pages 450 and 452. On December 21 1977, the Library of Congress responded to this reonest with n 39-name lpoal memorandum (C.R.S. Memo). See exhibit 34 at page 454. The C.R.S. memorandum adopted each of the arguments in the committee staff memorandum and concluded that "substantial doubt" existed as to whether the Department has the statutory authority to retain private attorneys who are not subject, to the supervision, control and direction of the Attor-




9

nev Genend. On April 12. 19-718. tit(, Genen.11 Accomitino), Office i-siled its opillioll oil the issile of the Department's -,tatutoi y authority. Exhil)it i37 at pure 1066. Although the opinion is rather confusing, ill subsequent. clarification of the opinion at the rcyi( -l of tit(, committee ( -( c exhibits 77 thrmio-h '-o (It 1106 to the Comptroller
Genert-11 held that tit(, United Stzif e luts, all -winterest AvIthin tit(, meanin(r (-J .28 U.S.C. 7 in dcf(,ii([PiO- Federal employees and that it is
proper for the 1)(q)artment to 1vtAill private counsel under tit(, termS (jf t he order to protect that llltero4.
The conlinittee -Z114, eqllelltlv requested tit(, ('oil Re- etirch
1'.Z(1?1VIce to 1,( vjew t1w GA0 ;)p1mon. ExIii1)1t 1.7) It page 10, 5. Ill a May 12, 197,*.. itienjorandum Memo") tile
M a v 12, 19 DIell1M*(I 11411111 ( Iwiv' 11:1 ft cr **S(, .mld C.R.S. Nl('Illo**) tit(' '1114 1)'Is("(1, on -tollllou- '4"Itiltor-N, mithority" (IIId reitecated its colichtStoll thal tit(, I )( partilwlit Iltis It() authority. E'xhihif 7G at pa_(r 10,, 7The col11111itt('e -4afl* :111(l tile two legal l1willorall(LI -tart froill tit(' prelm.-e timl cN'(1111 if .516 and ;517 support the Department statutoryy iii liti,vation involvin(r Federal employees, they
alT 11()f (Ilsp() -itive of w1wilwr tit(, Departnwnt ha ; st(1tutorv authority to Ivl(aill prjvaf( jecrIal coull-d to Ivplv -ellt thal interest. In fwt the
Ive history of .5 1 t )15, "Alid I -S.C.
.4.", cilc(l exteii-lv(1v III that
tile Depal-111wilt 11.1- -I,,Itlltorv tulhorltv to retalli priv,'Itt, coull'1_411 0111v if Stich coull"d is Illik1cl. tile conll,(-)l alld supervision (d, tile Attorney
( It c ra 1.
Specific,111y, section 3106 cwittiii a, (reiwi-ril pn)hibition zw-;iinst any tit(, D(,p:Irt11I(,1It (4 J114ice-olllploym(r ",all ,IttorII(,v or cwlil-(l for T1w cwidiwl (4 liti(ration ill which flie T-nited
111 01, thelv(4 i -; a J)"trty. or is inter(,:-,ted ('Xcept a w1wi-wi-O 'fllth "I'lZild I)v 1,1 w
Neither sections .510 or A7 (-:m be coii -triwoi to pi-m-ide thi ('1110106zation to ivt:tin privit(. c(-)mi:-,(,I -I- neitlwr nu-Ik(-, any ref(,iviic-( to private colill<(1 illvolv( Ilwnt In III III -whicIl tit(, United ".4ate's
('d. 1ll(j(T(I -('('Iion ;-)I(; refer- only to --idlicirs of tit(, Depart111clit ()f J11-ti(v. 1111der tit(, directimi ()f the Atforney G(,iwral" and
imi I- jvfcr- wily to tile ('eller,.11 or ally (Alicer of tile
Department of Justice * *.** 1,11ollermore, .519 makes it
cle.-Ir that "flie Attornev Gellenll Shall ,upervisv 111 litioration to AvIlich the Filited IIII 11"(111cV, Ol officer then'(4 i- .1 paltl
The two -(,ction,,-; in tifle 2,' NN-lil ch do stiti -fv tit(, requirement ill I (lilt P ) \N g,
31(W botli explicitIN I tit( AttorilOY General to retain
special appoinhd" cwm -(,L They mv -(,ct'ons .51.5(b) aiid 5 4 3. S, e c I
tion ")1.50)) provld(- that a privIate attorney may ]w --pecially retained by Department of justice but miust be commi --:1one(I either as a special zw- -i--t:tnt to the Attorney Generld oi- as (-I "special attornev." and mu then. when specifically diivo(A by tit(, Attoiiiey Geren.1, conduct ;IlIv killd of locnil I)rOccedillo. which a roo,111.11. T :I- .0 toT.Iley is (111thol.ized by 1aw to conduct. 'Fit(, -seconol provision. 2S V.S.C. .543. authorizes the ttorncy General to cippoint private attorne.vs to J-.S.
attorneys.





10

Attorneys appointed under these two sections are subject to removal by the Attorney General and are under his supervision and control to the same extent as a regular staff attorney. The Attorney General's supervisory authority is made clear in 28 "U.S.C. 519 which mandates the Attorney General to "supervise" all litigation to which the United States, an agency or officer thereof is a party to and "direct" all U.S. attorneys, assistant U.S. attorneys and "special attorneys" appointed under 28 U.S.C. 543 in the discharge of their duties.
The committee staff and two C.R.S. memoranda then focus on the question of whether the legislative history of sections 515 (b) or 543 indicates that the Attorney General's explicit authority under these two sections to hire private counsel is meant to preclude any other statutory authority for the Department retaining private counsel. If So, it is unnecessary to determine whether-in satisfaction of the requirement of .5 U.S.C. 3106--sections 516 and 517 can provide any implied authority for the Department to retain private counsel.
In fact, all three of these memoranda conclude that the legislative history of sections 515 (b) and 543 demonstrates that these two sections provide the exclusive terms under which private counsel can be retained by the Department and that private counsel can only be retained if they are under the control and supervision of the Attorney General.
The legislative history of sections .515 and 543 and the relationship of these two sections to 5 U.S.C. 3106 is somewhat confusing. Until 1966, the United States Code, and prior to 1926 the Revised Statutes, contained an express provision stating that~ "no compensation shall .hereafter be allowed to any person, besides the respective district attorneys ** except in cases specially authorized by law" and "every attorney ***specially retained *shall receive, a commission as a special assistant to the Attorney General **and shall take the oath required by law .See 16 stat. 162, sections 189, 361, 362-363, 365, and 366 of the. Revised Statutes, 34 stat. 816, sections 49, 310, 312, 314, and 315 of title 5 of the 19-26 United States Code and section 503 of the 1948 United States Code.
In 1966, these provisions-which prohibited compensation from being given to any private counsel not commissioned as a "special assistant to the Attorney General"-were codified in section 3106. In the process of this codification, however, the express prohibition against compensation to private attorneys other than "special assistants" was not~ carried forward in section 3106. The committee notes on the codification, however, make it clear that the language in section 3106-"except as provided by law"-is meant to preclude the hiring of private counsel except under the authority of sections 515 or 543. In any event it is clear that the 1966 codification did. -not changesany substantive prohibitions contained in the United States Code prior to the codification.
The restrictive nature of sections 3106 and 515 and 543 has been consistently reflected in the decisions of the courts, both prior to and subsequent to the 1966 codification.
The committee forwarded the committee staff and CRS memorandum to the Justice Department for comment. Exhibit 35 at, page 493. In a memorandum of March 10, 11978, Assistant Attorney General H-armon, reiterated the conclusion reached in his February 18, 1977, meioramidum that the Department has authority to retain private counsel under the terms of the order. See exhibit. 36 at page 1056.





11

Tn part, the March 10, 19718, memorandum argues that by acquiescing ill the Department's private comisel prograin and in appropriating funds which it knew the Department would expei-ld for private counsel, Congress has ",ratified*' the DepartmenCs authority. The coilltilittee proniptly notified the appropriate subcoiiimittee chairman of the Senate Appi-opriatioi-is Committee about the Department's ratification argwitoiit (exhibit 74 at page 10S3) and requested that the Coiig(rr(--:s1oiia1 Re The Justice Deparillient's Afarcli 10, 19-8. memoraiidutil does ackiiowled,-re that sectimis )L-) aiid ;-4" pi-m-ide "the wily nwaiis ('1xj,)Tvss1k
for carl-Nilig out t1w oil the Dej),'Irtmelit bY sectioll ; .516 .111d .517. 4(,e (,Xllll)lt ")() at p'.1ge 1061. The 111emoiaiidmil. Ilowever. faib to addjv t1le coliti-al coilclll- ioll of t1w Committ(,c -tafr '(111d CRIS 111('11101-atida that i-ead sectioii,-; 51,5 Iii-id 54' Its Oxj)l.(-- "I dv IvIentimi ()f private cmmsel except iii-ider the
terll)! -: pl-( )vloled ill (Actiw ls m d -)4.*').
1 1w GAO oi)li)ioii il,- lianfly 111on, respom iv(, to tlil.s Issue. Despite Ole f;l(.t fliat Hie P 70 D( pai-fiiwiit Act coiitalii, laii(ruacre
quoted abox-t-NN-Im-li exI)n, --lY yw( )Iilhits reteiiticm ()f iiidepemlent
jwlvate colill.-41, G'Ao flult ll(,)tlllll(r ill '*tll(, cxI)l-(,s,-; I,- of
[, -'wct i oils )11-) alid Hit I Wates flitat tlw -( -( ctiwl an, t1le :- ()Ie alld exclusive autil(wit v f(w Ilw Attolliev 6('11el(11 to rt't'lill private legral
cmtll: el." 11"Allibit, '"7 ;it DW),,,- As t1w .cmid CRS uiemoi-midum Imilits out, 11( )Nvevel.. -t1w dwilill('111T i-11('11w 111at plailliv rull" t1ii-011(rh tho e Iwovisiolis is flitat. t1w Attovl'wy Gc1lenll Is to) 11ave alld 111"i I lit aill 111tiItiate talid S111)(11*N il- H)11 11m v fitDratlM i illN*()]N-lll(.r t1le
1-111ted shltv- alld lt 111terk-AS I)e eomllwte(l all(I over tll( )se NN-110 Coli(IlIct it." ,it 1),lore 10.9.- I fie qw( )Ild CI ')S 11wilim-alidum
t1w1l tallalvzk, CT"W ".; 111 11 t1w 1)(11)111-tillellf illildled
.11011(witY to retaill 1)1.i\ ('11c cwm.,-( I. The ilwm( )nmdiml fill(IS tk lt t1w j)(),-::.-1bIe of lm j)11(,d aut-Iii)rit v to Im ilit to tll(., OpI)oSite P'Sillt n'(1clied by tile GAO." ExIiihit 10 at j) il-(,(, 1104. Ilie uiemoralldmil cmiclud(-, t1lat ()IIIN- Cmlcrlv --, call dele(rate Ole :11101(witv to t1lv Depal-tillelit alld t1lat a to fol- sjj( Ij allt1l(wity
Would apiwal. to be all appr(-)Iwitate metimd ()f resollitioll ()f t1w Contr()N-(q-SN*.- 14'NIIII)it io,-It I)a(rO I
of flle e fliree s(,(fions of the T.'7ii*i ed Stnt(,.-; Code oii]N- partially explaiiis t1w reluctnnee of the De.partmeid aii(I GAO to ackll(-)1vIed(r0 t1w (d)-elicc of -f.ltutorv alithorltv for
with private counsel. Dej)artmeiit Iias a st miig commitment to re.j)i-e-wiitim-Y Fedend eiiiployce,,. lit additimi, at tlw tlitie the Office of Le(ral Coullsel prepal"(1d its tNvo memorandums oil the DepartmeiWs statutory autliority. t1le order cxpre- -]v limited the indepei-idence of private comisel. ()iilv the rvvl.- (,d order provides for Colnplete indepelldellce of private comisel. GAO ill turn f(witc,,es oil its perceptioll of the importallce of repreSelltill(r Federal employees.
As the legislative Itistory mall-les clear, how(wer, private c0imsel can be retailled only NA-11ell t1ley are mider the supervisio-ti ai-ld control of the Del)al-tillelAt. I I t is tfie Uidelwi-t(lei-ice of private comisel which violates the 1-04rictiolls colitailled ]it sectioi-ts 3106, '15, aild .543. Utifortunate].N it is also this illdel)('11dellce upoll w1lich the Department private couns(A procri-am is now premised.





12

B. INDEPENDENCE OF PRIVATE COUNSEL
In order to avoid the conflict in the Department itself representing a Federal employee in a civil suit who is simultaneously under investigation for criminal activity. any private counsel retained by the Departmen~t must of necessity, be completely independent of Department supervision and control. Independent private counsel are therefore free to raise defenses and make arguments on behalf of their Feder al employee clients which-although in the interests of the ci: ct'-conflict with or even oppose a position maintained by the United States. The Department has specifically stated that it will not terminate a retainer of a private counsel who proceeds to raise such defenses or makes such arguments. See exhibit 26 at page 357. (Question 111.)
The independence of Government sponsored private counsel. has potentially serious consequences for the public interest depending on:
(1) the types of defenses and arguments which private counsel will raise on behalf of his client and (2) the types of conduct which private counsel will argue is legal.

1. LEGAL DEFENSES AND ARGUMENTS MADE ON BEHALF OF FEDERAL EMPLOYEES
There is substantial confusion 'in the law defining defenses available to an officer or employee of the Federal Government in a civil suit alleging deprivation of constitutional rights.
There are basically three lines of cases describing those kinds of defenses: (1) in criminal cases a defense of a good faith reliance upon apparent authority (United States v. Barker, 546 F. 2d 940) or of a good faith belief in the legality of the acts committed (United Staites v. Ehrlick man 546 F. 2d 910); (2) in civil cases against Government officials, 'Other than law enforcement. officials, a defense, of absolute immunity (Barr v. lfatteo, 360 U.S. 564) ; and (3) in civil cases alleging constitutional violations or against law enforcement officers, a defense of good faith (Rivens v. Six Unknown Named Agents of the FBI, 456 F. 2d 1339 and Zwveibon v. Mitchell, 516 F. 2d 594).
The applicability of the Barker/Ehrlichman, absolute immunity, and good faith defenses in any given case is often the crucial issue in determining account ability and whet her aggrieved parties will receive any judgment to compensate them for violations of their constitutional rights. To the extent that these defenses are recognized or extended, executive branch officials are less accountable-at least in court-for their actions. The delicate balance between the Government's responsibility to defend employees and insuring individual, accountability is directly affected by the kinds of defenses which are recognized in the courts.
Substantial movement has occurred in court precedent on the availability of these three kinds of defenses. The current state of the case law demonstrates that while there is a substantial threat to the public interest in recognit ion of the Barker/Ehli ch inan defenses, absolute and qualified good faith immunity have become well established. a. Barker/Ehtrlich man Defenses
In the Elirlicliman case (exhibit 46 at pages 761-791) five persons were indicted for conspiring to break in to the office of Dr. Fielding-





13

without a Avarrant-to obtain the doctor'S medical reconls oil D,.Aillel Ellsber ,I matter of law the district court ruled th"It defelld"llits
Could not rai-, e ,I th"It the-v hacked the s1w,,,ifi( Intent necessary
to violate a cl-IJ11111,11 Statute thev had i fitith. re-isonabh,
belict that t1w hivtk-in was mid justified 11,1 t1w 11mlonal lilt erell -1-.
376 F. Supp. :2!) 11)74). The district court the
defell- (, :t- one of -.111istake of, Culd held that --It Nvell timt a l11j-t,1ke of law Ilo deft'lisc 111 (11 Colispinacy -i.- to the knowill(T pci-fol,111.111ce of :wf which. fikv the 1111:111thorized 'Jilry here, are 111,11wo ;// 8c." Id. at p,i1_,,(,
The jiillit (d I 111* -- t,11\(- of law c,11'efully Iwcifivd by the dlstrw ( ourt as follmv :
of haw ma v ;I I -.ioj cxc,, -e an act if it re.- Illted frolli 0'()()(I falth refimwe ul"M a CWI, t onlcr or (lec"'.: I 'n (I
2 (1 9 C 1943' S
I t 7 lm t I--)" VAV. 454 P I or ulmli the I 'IdN We
()t, Chal, ("(, I with Interpivt ill()* ()I' (A If orcIII- t 1w ht w ill yw -t toll. See v. Loti 179
Ct. -17C. 1:') L. E'(I. 2d 4,1 7 1!)6.-)) : fltlle !/ v. Oh;o. 'oj 17. S.
4" princilAe
-12'), 79 S. Ct. 12-Wi. :1) L. Ed. 2d 1344 ( 19,7)9). Thi, 1
Ilowever. calmot 1w t IvI(.11ed to elwolllpa a Ini-4"Ike ba ;ed III)oI1 the a Jlralwcs (d, ill 111e,-e(l co-cmi-- pll-,Itor with re(rard to the (.1-1111111:11it v of acts th,11 (11'e ill se. see Vwtc(l
202 F. 2d 721, 7:,()-7:'l (7th Cir. o'-)"') (obc(jitlw( 1() t1w owners of a Iljwrior (hw, Ilot lwcc arily Tw(r.Ite the pecltic (111 et Screws).
Intent 1.( 1 1v I I lel
1 d.
This rulir cr ,:mw on (I(4ejjd,jIjts w)tiolls to &1 (*OVOI* (1vl(1(,I1(-e to Subtmltl;lfc
T-pml t1wil. Cwtvictioll for t1w the (1('f('ndaIwz "IPI)c('11ed,
j;j t I I I (, j,()l 11,1 11:1 (1 I Iv (Ic l:ic(l t1w il. "Ittt'litp t to m tro (11W(l OVI(fi'llce w', t1w.
nn(l had 11111wopel y IllStruct (,(I I )w jilrY th lt -1wh ;I- not available. 'Fhe court, of
(Ol' rille(I the cull D-1-Olls ill all 01mlion wi-itten by
Jud(,(, AN'llkev: a coIlc1lrr*lj(r ol)*Ili()Il wi:, filctl hy Jud(res Leventhal 1111d Merli'(,e. Sce exhibit 46.
opinion fncll. ; Oil holler the Illells rea require(t to collmlit the crinle of NN-111(.11 "I.< clllr(re(l Avas a "sj)ecific
intent" which does not 111volv(, kllowled(r(l of ill(,_(r,11ltv oi. whether. Ill n(Mition, the Specific intent h;i(l to Involve On intention to violate
111e, law or all l1r-(111(v (4 1 1)(,Ii(,f th"'It the action Nva la-wfill.
Tn the latter type of ca -k, it court ilm-t 1)()th that there existed
a clearly and plainly apj)]R abh, cm)- titutioll,11 rio-lit and
that the*dcfind.mt purlmsefully deprived a citizell of fiIs enjoyment of that, riglit. Judtre jj'ijj eV held ib(-it the particular statute. under which tlu defen(Imits had lwen jlIdi(.t(,(j, 1 U.S.C. -241, required tile I"Itter tATe of Jw(-Iflc illt(11t. that is olj( ill\-oJ\-*IItr (-Ill illtellt to I commit zwt -,
which delwive a citizen of clearly (1017w(l constitutional rights. but ]I(,
1 4
flSO held flitJ this. does not nillomit to (I requinnient that -I defendailt directly "recognize tile
773. N\- fulness of his acts." Exhibit 46 at page
APPI-VillrV thi. tv,4 to the facts of Ehrlichiwmis apj)val. Judge W11key found that the prvI)()<(,d defense (.1-ould be rai ,(,d only ill a ca ;e ill-





14

volving national security and, even then, only "if there has been a specific authorization by the President, or by the Attorney General as his chief legal adviser, for the particular case." Exhibit 46 at page 776. Finding no such authorization and finding that the defendant purposefully -violated rights which -were clearly defined, Judge Wlilkey affirmed the district court's rulings and the defendant's convictions.
The concurring opinion of Judges Leventhal and Merhige adopted the reasoning in Judge Wilkey's opinion but went on to cliastize the Department of Justice for filing a brief arguing that no warrant was required for surreptitious entries -related to foreign espionage or intelligence if the President or Attorney General personally authorized the entry. In his concurring opinion in the Ekrlichm an case, Judge Leventhal concluded that the mere assertion by "the Justice Department, the law department of the executive branch," of a defense such as that advanced by Ehrlichman. which is "an exception to settled doctrine, may lead to an assumption by highly placed officials that the settled doctrine is now 'eroded' and that "the very assertion of the exception by the Justice Department accomplishes some diminution of the sense of privacy of all." Exhibit 46 at page 786. See exhibit 26 at page 367 and exhibit 28 at page 406.
On the same day, the same panel of judges handed down a separate opinion reversing the conviction of Ehirlichman's codefendants, Bernard Barker and Eugenio Martinez. One year earlier these same defendants had been before the same court sitting en banc to appeal their convictions for the 'Watergate burglary. Although the earlier case arose then the defendants attempted to withdraw their guilty pleas, both that appeal and thie appeal in the Fielding break-in case raised similar quest ions regarding avail able defenses.
In the appeal of the earlier Watergrate break-in convictions (exhibit 15 at pages 698-760). Barker and hi's codefendants argued that they should be allowed to withdraw their guilty pleas and raise a defense that they "believed the aff air to be a 'national security' operation authorized by a 'government intelligence agency'." Td. at page 706. Because the appeal arose in the context of a motion to withdraw their guilty pleas, the five judge majority did not reach the question of the availability of these defenses. Id. at page 712. However in a concurring opinion Judge Bazelon argued that such defenses had legal merit. Id. at page 718. Similarly in separate dissenting opinions Judge MacKinnon argued that the defenses "may well have" legal merit~ (Id. at page 734) and Judge Wilkey directly concluded that the defenses were valid. lId, at page 754. Thus three of the seven judges endorsed the defenses.
Judge Bazelon's concurring opinion focuses on "fundamental questions about the nature of criminal responsibility." Id. at page 718. Although not willing to concede Judges MacKinnon and Wilkey's argument that the defense could be characterized as a mistake of fact rather than a mistake of law, Judge Bazelon argued that allowing the assertion of the defense to the jury would constitute a "perissible escape value" for the criminal justice system. Both Judge MacKinnon and Judge Wilkey directly argued that the defense could be characterizedi as a mistake of fact by the defendants as to whether Hunt had all11 necessary authorization for the Watergate break-in. Td. at 731 and 754. Even assuming that the mistake was of law rather than fact, both





























TT



Nv












IT,


































I'C





16

that context, the orders were military orders given in war time. The staff concludes that there is even less reason to sanction the superior orders defense in a law enforcement or administrative context.
The committee staff made a persistent-and wholly unsuccessfuleffort to determine whether the Department would ever raise the Barker/Fhrlichman type defense on behalf of Federal employees. The Department has consistently refused to rule out the possibility that regular staff attorneys would doso and has said only that the existence of the Scheuer good faith defense, discussed below, should be sufficient. See exhibit 26 at pages 365 to 366 and exhibit 28 at pages 402 and 404405. As a policy matter, it is quite unlikely that the Department would ever raise a superior order defense. However, private counsel are not under the same constraints and are likely to raise the Barker/Ekriichmvzn defenses, at least in an effort to preserve such defenses for any appeals they may file.
The Department is not unaware of this likelihood but apparently has no qualms about it. See exhibit 11 at page 154.
Many seriously question whether the Department should give any sanction or support-however indirect-to private counsel who are willing to raise superior orders defenses. Such governmental support for superior orders defenses is likely to have an adverse impact on the accountability of Government offl5'ials, even if the courts reject the validity of such defenses. The undesirability of establishing superior orders defenses far outweighs the public interest in retaining private counsel to represent Federal employees.
Here again, as with the. issue of statutory authority, the issue is the degree of independence accorded private legal counsel. Circumscribing their independence by restricting the defenses they are permitted to raise on behalf of a client may conflict with the Department's purpose in hiring private counsel in the first instance.
What is clear from the problems raised by the independence of private. counsel is that there are substantial policy reasons behind the refusal of Congress to give the Department the statutory authority to retain private counsel who are not under the supervision and control of the Attorney General. Only through supervision and control can the Congress be assured that the public interest will be protected. b. Absolute and Qualified Good Faith Irnmunity
In contrast to the state of the case law involving Barker,/Ehrlieh?ma~n type defenses, courts have shown substantial agreement in considering absolute or qualified good faith immunity. The trend has been away from absolute immunity, which the Supreme Court initially recognized in Barr v. Matteo."in more recent cases the courts have recognized only a qualified good faith immunity. See Bivens, 456 F.2d 1339 (2d. Cir. 1972) (exhibit 43) ; Sceuer v. Rhodes. 416 U.S. 232 (1974) (exhibit 44) ; and Wood v. St-ickland, 420 U.S. 308 (1975).
Although there has been criticism of extending a qualified good faith immunity to Federal employees, it does not approximate the controversy over establishing the new Ba'rler/ElirieA man defenses. See exhibits 41 and 48. On balance, the staff concludes that there is not sufficient adverse effect on the public interest to preclude the Department or retained private counsel from raising absolute or qualified good, faith defenses on behalf of Federal employees.





17

2. ARGUMENTS REGARDING LEGALITY OF CONDUCT OF FEDERAL EMPLOYEES
In the course of defending Federal employees in constitutional tort cases, one major line of defense is that the conduct involved was legal. Raising this defense becomes a matter of intense public interest when the employee was engaged in activities such as mail openings, surreptitious entries, or warrantless wiretapping.
The D)epartment's policy is clear that when regular staff attorneys represent a Federal employee. arguments which conflict with tihe broader interests of the United States will not be raised. Recognizing the inherent conflict with its statutory authority if staff attorneys are permitted to raise arguments which are not in the public interest, the Department has determined that only absolute or good faith qualified immunity defenses would be raised. In these types of cases, the Department- will not argue that the underlying conduct is legal. See exhibit 10 at page 12(). In the words of fornimer Assistant Attorniey General Rex Lee. this would require Department attorneys to argue for "the legality of all Cointelpro programs." See exhibit 5 at page 64.
Yet. while satisfying the )eparItment's duty to protect the interests of the IUnited State a ilnted (efense 'aises (uestius albollt whether the I)epartment attorney is fulfilling his ethical responsibility to defend vigorously hii i Cell it. See exh ibit 10 at Ipage 121. This ethical questi(on is somewhat mitigated when private legal counsel is hired whenever the I)epartinent is unwilling to make any legal argument on behalf of a Federal employee.
The D)epartmient concluded that it would hire private counsel in this situation only after carefully considering the question of the propriety of allowing regular taff attorneys to argue that the underlying conduet is legal.
The I)elpartment should express similar hesitation in allowing private counsel to raise arguments that the Department will not raise. A;s with raisinI ir'' 'r :7Th'rl;ci lhmat de fenses, the statf concludes th at the Government should have no parit-direct or indirect-in uhsidizin leal argun ents that mail openings, surreptitious entries. and other similar conduct is legal. The impropriety of this ubsidy is heightened by the fact that the Attorney General has concluded that mail openings woudl h illegal if done today. See exhibit 61 at pae 1004. Although the Attorney General d(leclined to prosecute those CIA employees involved in the mail opening progran, the Departmnent is still investigating or has prosecuted other Federal employees for surreptitious entries and other conduct. See exhibit 10 at page 115. The Department should have no 1)art in any effort to make arguments which contradlict the findings of the Attorney General or the positions which the Department may be taking in pending or future prosecutions.
C. IMPACT ON CRIMINAL IN VESTIGATION.S AND PROSECUTIONS
The Attorney General's order provides for the appointment of private counsel to represent, a Federal employee in a civil suit if that employee is simultaneously a target of an investigation for possible criminal activity relatingr to the same subject matter for which rep-







resentation [in the civil suit] is sought "See exhibit 1 at page 29 and exhibit 2 at page 34. If the subject matter of the civil suit is unrelated to the subject matter of a criminal investigation of the same employee, the Department will represent the employee using regular staff attorneys.
In either situation, but particularly when a civil suit and a criminal investigation involve the same subject matter, the staff finds that Department involvement in the representation of a Federal employee in civil suits Ihas the potential to interfere with or to discourage criminal investigations. In fact, it would not be hard for Department investigators to conclude that the Department may be more determined to defend Federal employees than to hold them. accountable.
The Department's policy of defending Federal employees is clearer than its policy of prosecuting the same employees. To date the Department has represented every Federal employee requesting representation who the Department found to have been acting within the scope of his or her employment. See exhibit 26 at page 336. The, Department has issued a formal policy statement and has already expended over $1 million to defend Federal employees in civil suits. In contrast, the Department has only prosecuted one Federal employee and accepted a plea from one other in its pending intelligence agency investigations. See exhibits 61-71. Federal criminal investigations have been dropped for whole groups of Federal employees. See exhibit 61 at page 951.
Beyond the impact on the morale of Department investigators and prosecutors, this policy of retaining private counsel may directly interfere in criminal investigations and prosecutions. Private counsel defending a Federal employee- are much more likely than regular staff attorneys to make'discovery requests for Department documents. These discovery requests may complicate related criminal investigati ons, indeed the requests may have that purpose.
The problem posed by private counsel discovery requests is not a theoretical one. The Department's experience has already been that private counsel it has retained have "urg[ed] strenuously and persistently the public release of numerous classified materials which may serve to support their client's good faith defenses." Exhibit 10 at page 122. In contrast, the Department finds it "difficult to imagine Department attorneys exercising this same zealous ardor in the face of their ever present responsibility to protect the Government's privileged information wherever appropriate." Exhibit 10 at page, 122. A report prepared in the Civil Division notes that regular staff attorneys tenden] to consider only the Government's interest in protecting its privileged materials whatever their exculpatory character may be [in establishing a good faith defense] from the point of view of the individual defendant." Exhibit 10 at page 122. Nevertheless, the De 'partment insists that in retaining private counsel, it should not consider the propensity of such counsel to make expansive discovery requests. Exhibit 27 at page 362.
The problem with the Department's policy is dscussed in Demw~cratic Natonal Com,?nittee v. James MlcCorcl, civil action No. 1233-72, (August 9, 1972). There the court granted a plaintiff's motion to dis-





19

qualify Department of Justice counsel from representing a witness in the case because. the. Departnient. had pending a, crimina,11 investioration of "sonie of the gained defendants" in the case. S-.e exhibit 28 at, page 409. AV, ithin the Departnient, it Nvas recognized that the MWwd decision could "be read to liold broad1v that civil representation is improper w1lere the Departinent is otherwise en(ra(ye(l, through other elyqllovees., in a cruninal invc ,tigafion the subject of which is akill to the giavanien of the civil action. Exhibit 5 at pagre. 61. 71"WO (IlVerX 7
gent positions sill-f(aced ill re q)Onse to th" Jeci ioli: One c.,nitioned that "the Civil Divi- ion AN-0111d proceed (at soille Pei-it to rel')I-e- ent CroverllInent who (while not t,1l-(-rcts) laiv under lnve -tl(ration by
the Crij)ilnal Dlvi-:ion oil f1w -ainv s:idject Inattel. (1;Z; tl)(, civil stilt," exhibit .5 (at page (;I : the ()tll(,r did not lind that the )1(,(otV decision raised "ll1s1ll*lllO11l1t(Ib4, Exllil)it (; at i)a(re '-2. Thc latter
position -Nv,ls bta ed on factoi s. Fir-, "the decision Ivas not appvtle(l and t1m,, lia,-z no bindill(r cf1p(--t oil ()tll(,I- 1)'i_ tl-ict of disti-ict jiidg(,, ." Secon(IlY. it i : Tl )r well the Opinion
is 1111111%(d v 0) lmve evell 1wi-11,1-ive for,-('.- And, f111,111y. "the vall(lity of flle -(, retail ],mm I- IN-ill 111-el.v 1w in (till, ONTIA." Exhibit i.) at

Ili ,idilition to the (Iliv(-t (w iiidiivct inipwt of t1ii, onler On CriTYI;nal 'n th(, Oepartiiieiit ( riniinal, inve-4ithe il)( p ii tiiient &w not a
()r a PkIii i(, lo, ;er chaicre in ,i (,a,:(, reI'lted 1() ()11(, Ill \N111ch cmlli ,( l likas lwen retiiiik-cl by the Departinent, t(-) ITPIV -(,111 I 11: t :-(tille enlplovee In ) civil ,ilit.
'I'lle (-()llchldc- th"It til'' not sll1)Si(1iz(, 1)1'ivtatv cw ll) -(] w host, :Iil,1*101'1 111:tY (H' f1w 0 1,()I.t ()f
1)(A)M I1111"I)t Inve-ti -,r;t I i()Ils. 1,() 111 1 1 lt t1w tv 11- a conflict lwlwk en (lcf(,1t-(, M ci% 11 !-Zilits.the
-Iioiild take
1,11c Dt-pal-tillent lla: that at Imint there 1 :Ill inSeParabic conflict. AN'llell ;I to cek il 1)1'0 (,Clttioll i-.: Illade, fliv
Departnient cetascs to ]);I v foi' colinsel to rel)l ('<('Ilt th(' employ(,c. 1f(-) NN-cv r. 11,(ratiolls JIAY WC11 be tvix-cl-wly tlfft,(,ted
. 1)y Ivi ov:-('11tat ]wl Ili ally re 1 1 ted clvi I Nvell befw, t he Imilit of I I I d I c t I I lc I I t.
A AN-,. I v t () a I I t I Iv e I I (1,_ I I or I I t S 1 )0 1 i t. N- -I I I (I .I X- ( ) i (I t I I voliflict 1q, to ;)111ll()1.lzv th(I of ('01111sel
fee ; ill civil Nvlwii tlieDcl),,trtinent (1(,tvrnmw:-z.on the nieritsthatta Fcdei-al eiiipl() vc(, .Loidd not Le Pl*():-('k,'llt0d or when the elliploy(le is folind inno(vilt ()f chIry(,,,.

D. EXPlN__Sf OF I'RIVATE COU-,SYL
The cost. of ret,1111111(r Private lethal coinisel to represent Federal en-iplovees 1111der the Order i iinzw( eptablv high, far ex(.-eedinor the Depal:tznent's expe(-tatioli-s, NN*J1(qI it the pro,(ri-ain. Still. it is difficlilti if not inip) The cost of the, Departnient progrant, has iniishroomed front 1,412,000 in 1974, to the most recent -ippropriation of $1,860,000 for 'fiscal 1977.



21-22 1 () 7,4 .3






20

The Department had originally requested $4,878,000 for fiscal 1977, an amount equal to 23 percent of the Civil Division's entire estimated appropriation of $16,792,000 -for that year. Given the number of cases involved in the private counsel program in comparison to the 43,844 cases the Division handled in fiscal 1976, the cost is staggering.
When asked by the Appropriations Committees to estimate the total cost of the private counsel program, the Department wa.s unable even to offer a dollar estimate given the unanticipated growth in the program up to that point. The Department did not know how to predict costs. Exhibit 12 at page 180. That costs "will be very expensive" and that those costs "will last for several years, although -perhaps not at this high level," was conceded by the Department. Exhibit 12 at page 178. It is anticipated, however, that "disclosures that have been made in the aftermath of the Watergate matter will not be **a recurring matter." Exhibit 12 at page 178.
One suggested means by which the Department can control costs is by a "postexamination" of claims. Exhibit 12 at page 180. The Department's 'position is that it cannot "be too exacting" about what it asks a private counsel in this regard. "For example, [asking] whether the time he spent was necessary, why he spent that time, why he made that notionn,** would be interfering with the attorney-client relationship." Exhibit 12 at page 180. Consequently the Department knows of no way "to predict with any degree of accuracy how much the bill of a private counsel it retains will be. See exhibit 12 at page 181.
Moreover, the cost of the program is increased because the ]Department has adopted a policy of hiring private counsel in certain situations although no conflict exists to prevent regular staff attorneys from providing the representation.
Both the January 19 order and the revised order provided that ,where there is a conflict among defendants "some situations may make it advisable that private representation be provided to all conflicting groups and that Justice Department attorneys be withheld so as not to prejudice particular defendants." See exhibit 1 at page 29 and exhibit 2 at page 31. Similarly, where only one Federal employee in a group of defendants in a civil case is a "target," of a criminal investigation private counsel will be provided not only to the target, but to all of the other defendants to avoid identifying the target.
During the drafting of the initial order this policy of representing nontargets with private counsel generated some criticism within the Department. The Civil Division approved of this policy. Exhibit 5 at page 61. Attorneys in the Deputy Attorney General's Office concluded, however, that "the practice must change" if the De-nartment's "attempt to represent as manv employees as possible within the Department" was to succeed. Exhibit 6 at page 82. The Dreiudit-e to the tnrrret was thought to be, "minimal" and "not legally cognizable ** Exhibit 6 at page 82. Despite this criticism, the provision w~s adonted and the Department operates under a "strong prfrec, to retaining private counsel for nontar"ets "'to avoid any prejudice" to a target. Exhibit 10 at paae 123. No way has been found ,to give private representation "only to those defendants whose activities, in relation to the suit, are rnost intimately related, to normal operations." Exhibit 10 at page 123. The result is that the Department retains private coun-





21

sel to represent many defendants who are i-lot targets, who have no conflict with other defendants, and who do not. wisli to nIise arcruMellts whiell conflict with Government pocitions.
The., Department now recoornizes that the expense of private, counsel "',has tx come the single. largest problem fac.*ng the Departinent with respect. to its program of retaining private counsel." Exhibit 10 at page 125. The Departmenfs experience, is that "it I-.,, not at. all ullusual for one couii elrctaiiied to represent a sincrIe defendant (whero groiiping was not possible), to submit a niontlilv bill rangincr froni 121000 to $30,000 for work not inN-oIN-ingr exteiislNe discovery or brief preparation."' Exhibit 10 at pam- 1225.
'I'lle, Iii(rll costs emit.racts- tlietiiseh(, vlilch eN-Idently little 6eell read to place lio linlits oil the of at toriieys wbli. (-Ji cmild be 1) the retaiiied
counsel to pei-forpi the neces,-:,,ir y repn- (,ntitioiial 14 X111hit
10 at pacre 125. Tn one case now pendiii(r -iipwanl of ei(rllt ttOjjj(,, ,S and fom- 1( ,rjj as the Departinent for over 480 liours
sistaiits bil]F( (I]
of work in 1 inonth for one (4,fen(lant."' Exhibit 10 at pflre 12G. Pie Dej)cirttiient is coiisiderimr -ariolils W.IV z to 11M]f expellses ill(111(t,11(r periilittiiiur the defewlant ("111ployee to a(Mitional
ei-vices from Iiis private attorney y -It lii_ ONVII expen-- e, alkit at a co! Ily rate. Exlilhit 10 it pag( 1-27, 'I'lle 1)( J),11111wnt is
also coii -i( I tY*jj(r fol, 1)1-'
4,.on the of the *ndlvidlial defcll(lallt,.,- rutlwr Otan acrol-_, :, t1w board." Exhibit. 10 at

'Fhe stnff coTichi(les that tliere is im effe(-five way to limit. tlie cost of private coiiii-el witlimit Iiiiiititicr the aiiHiOrON- of a. counsel
vigoi-ously to represcia lil, : client, "Flie proliihlti -P, cost of retaiiiinor Plli -ate comic:ej it (- initial tliat all altvrIlatiN-e to the. Department he adopted.














III. RECOMMENDATIONS
The absence of statutory authority for the Department's current program of hiring private legal counsel make it imperative for the Justice Department and the Judiciary Committee to take expeditious action to reform the program in order to protect both the interests of Federal employees who are presently being represented by private legal counsel and the public interest. To accomplish these two aims, the staff makes six recommendations which are here briefly summarized.
A. Congress should appropriate no more funds to pay for private counsel in the absence of specific statutory authority for the Department to retain such counsel. Until appropriate amendments to the Federal Tort Claims Act are adopted and the Department's statutory authority to hire private counsel is clarified, no new contracts for private counsel should be awarded. Te House and Senate Appropriations Committees should be informed that the Judiciary Committee believes no further appropriation of funds for private counsel should be made.
B. Until the Departinents authority to retain private counsel is formally adjudicated. the D)epartment should continue to make paymronZ from availt)ble finds to private counsel it has already retained. The Department should take every step possible to avoid exhausting its remaining funds.
C. In the event that existing Department contracts with private counsel already retained are held invalid or appropriated funds are exhausted, private bills should be considered to reimburse private counsel on an interim basis.
D. As soon as the interest of justice permits the Department should determine whether to seek indictments of Federal employees for conduct which is currently the subject of civil suits against such employees. Once these prosecution decisions are made, it will no longer be necessary for the Department to retain private counsel to represent Federal employees who were targets in these investigations.
E. The committee should adopt legislation amending the Federal Tort Claims Act to alleviate the need for the Department to retain private legal counsel. The general purpose of such amendments would be to substitute the United States as the defendant in civil cases involving conduct within the scope of an employees' employment. Because the effect of such an amendment would be to relieve an employee from personal tort liability, an adequate alternative administrative disciplinary procedure must be included for Federal employees who violate constitutional rights. Such amendments must also provide an election of remedies for plaintiffs when the Federal employee cannot be made subject to administrative disciplinary proceedings.
F. Amendments to the Federal Tort Claims Act which provide for an election of remedies in certain cases will not completely eliminate the need for the Department to retain private counsel in the future. In addition, it is doubtful any amendments to the Tort Claims Act will
(23)





24
have any retroactive effect on existing cases in which private counsel already have been retained. To the extent that retention of private counsel will continue to be necessary, the Department should be riven specific authority to retain private counsel. This authority should apply only when there is a conflict among defendants and not when the conduct of a Federal employee in question in a civil suit is simultaneously the subject of criminal investigation. Any legislation giving the Department -authority to retain private counsel should limit the independence of private counsel to assert arguments or positions which are not in the interest of the United States to assert. If a Federal employee is denied representation because of the pendency of a criminal investigation, the employee later should be reimbursed for the cost'of retaining private counsel in his civil suit if the Department fails to indict or if the employee is found innocent after a trial on the merits.

A. No F u imRArpRoPRIATIONS OR CONTIUCTS
Section 665 of title 31 provides that no officer or employee shall "involve the Government in any contract or other obligation'* * unless such contract or obligation is authorized by law'."71 This provision states the obvious.
Until the Department is properly authorized to retain private counsel, no further funds may be appropriated for that purpose, and no new contracts may be awarded by the Department.
B. CONTINUED PAYMENT OF PRIVATE COUNSEL UNDERExisum CONTRACTS
The absence of statutory authority of the Department to retain private counsel has not as yet been formally adjudicated. The staff is aware that issuance of this staff report may well precipitate efforts formally to adjudicate this question. It is not possible to speculate how ]on,& it will take before any such adjudication is resolved. There must, however, be a decision now on whether or not the Department can continue to make payments to existing private counsel pending resolution of the statutory authority issue.
In making this decision the staff recognizes that sudden termination of payments to private counsel already under retainer would result in chaos. Serious damage to the morale of the Federal service and to individual defendants may result. The Department recognizes that if such contracts were suddenly terminated it-and perhaps also its officers who were responsible for issuing the retention contracts-would immediately be subject to suit by the law firms which have been retained. See exhibit'10 at page 132.
The dilemma faced by the Department is one of its own making and one compounded by* its giving incorrect information on its statutory authority to the Appropriations Committees. The staff. however, concludes that until the -validity of the Department contracts is formally adjudicated by the appropriate authorities, the only responsible course is for the Department to continue to pav private counsel who have already been retained. These private counsel and their Federal employee clients have relied on the Department's representative that it had statutory authority to issue its contracts. As it continues to make





25

payments, however, the Department should notify these private counsel that their retention contracts are in jeopardy. The Department should take every step to avoid exhausting its existing appropriations to pay private counsel. Existing private counsel should be encouraged to pare their claims for repayment. Contracts with private counsel should be phased out whenever possible.
This course of action should present no risks to private counsel who receive further payments. At such time as the retention contracts are held to be invalid, private attorneys can be assured that it is likely that any payments they have already received will not need to be refunded. On a quantum meruit basis, private attorneys should be able to resist any such claim for reimbursement.
Also of immediate concern are officers in the Department who certify payments to private counsel, who may be in personal jeopardy for payments made without statutory authority. See 311 U.S.C. 82(c). At present certifying officers are relying on two legal opinions of the Office of Legal Counsel that retention of private counsel is lawful. Although these opinions appear to be erroneous. these determinations alone should be enough to immunize certifying officers from liability.

C. PRIVm TE BILLS TO PAY COSTS
It is likely that at some point in the near future the Department contracts with private counsel will be held to be invalid or that the Department will simnplyv exhaust the limited funds appropriated to it for private counsel. If either of these events occurs, private counsel cannot be paid from funds specially appropriate( to pay such counsel or from other funds available to the I)epartment. IHowever. private counsel are free to seek introduction and passage of private bills to reimburse them for their legal fees and costs.
Any private bills requested by private counsel must, of course, be processed in the same manner as aire other private bills which come before the Judiciary Comminttee. The extraordinary events which may lead to the need for private hills should be given special weight when such bills are considered.

D. PROSECUTIONN DECISIONS BY TI E DEPARTMENT
Private counsel are presently retained when an employee is a target in a criminal investigation, when there is a conflict among defendants, and when an employee wishes to raise a legal argument not in the interest of the United States. Of these three situations, only the first is within the control of the Department. With respect to pending criminal investigations, the present dilemma over private counsel makes it important for the Department expeditiously to determine whether or not it will prosecute employees presently being represented by private counsel. If the Department decides not to prosecute such employees, the Department can tender the services of regular Department counsel in lieu of private counsel. If the Department determines that it will prosecute, the order provides that payments to private counsel are automatically terminated. Of course, the staff recommendation does not imply that the Department should expedite any criminal. investigation if that would have any adverse impact on the adrnmmistationof justice.







E. AMEPNDMEN"TS o THE TowR CrAixs AcT
The Federal Tort Claims Act provides authority for the Attorney General to substitute the United States as the sole defendant in certain limited types of civil actions brought against Federal employees acting within the scope of their employment. The unavailability of
TotClaims Act jurisdiction for civil suits involving most constitutional torts has led directly to the Department's poflcy of retaining private legal counsel. By adopting appropriate amendments to the Tort Claims Act, the number of circumstances in which the Departmnent must retain private counsel can be substantially reduced.
Presently pending before the Judiciary Committee is a bill proposed by the Justice Department, S. 2117, which would substitute the United States as the sole defendant in all constitutional tort cases involving official duties. See exhibit 55 at page 926. This bill would eliminate the need for the Department ever to retain private counsel in tort claims suits. In fact, that goal is one of the reasons the Department has proposed the bill. See exhibit 54 at page 920.
The Department has anticipated that criticism will -be leveled at the bill on the grounds that it will immunize Federal employees from a very direct mechanism which holds them personally accountable for their actions. In the place of this accountability mechanism, the Department relies on existing civil service disciplinary procedures, the possibility of criminal prosecution, and impeachment to hold Federal employees accountable. See exhibit 54 at page 921.
Unfortunately the existing civil service disciplinary procedures have not proven effective and must be strengthened if the bill is to be adopted. Otherwise, the bill will effectuate a net reduction in the accountability of Federal employees. In strengthening existing disciplinary proceedings, it would, at a minimum, be essential to permit aggrieved parties to initiate and participate in the disciplinary proceeding, to seek judicial review of any proceeding which did not result in the imposition of sanctions against the employee and that such proceedings be instituted for any conduct which could form the basis for a tort suit against the individual.
Even strengthened disciplinary proceedings are not, however, effective in the case of individuals who are no longer employed by the Government and are similarly not appropriate for high ranking Presidential appointees. To immunize these individuals from civil tort suits, therefore, would have the effect of immunizing them from any system of accountability other than removal by the President, criminal prosecution, or impeachment. For individuals such as these, the likelihood of removal, prosecution, or impeachment, depends in large part on political and other factors which may be unrelated to the need for accountability. At the same time, these individuals possess awesome potential power to violate the constitutional rights of individuals. Tt is, therefore, necessary to continue--at the election of the plaintiffthe amenability of such high ranking officials to suit in their- individual capacity. See exhibit .53 at paoe 91,6. In practice". few phi intiffs are likely to eleet to sue such officials in their individivpl cispacity beewlise of the difficulty in securing any monetary recovery. In contrast, under' the administration's Tort Claims amendments, a plaintiff, could recov-





27

er liquidated damages even if a defendant could raise a good faith defense.
If provisions strengthening existing disciplinary proceedings and providing for an election of remedies in litigation against high government officials, are not included in S. 2117, it is not in the public interest to amend the Tort Claims Act to immunize all Federal officials. At a time when public confidence in Federal officials is so low, immunity should not be given to Federal employees in the absence of effective accountability procedures.

F. CLARIFICATION OF DEPARTMENT AUTHORITY To RETAIN PRIVATE COUNSEL
By permitting aggrieved parties to elect whether to sue hilb-level Federal officials under the Tort Claims Act or in their individual capacity, situations may well arise in the future when the Department faces a conflict which would call for retention of private counsel to represent the official. This fact makes it necessary to clarify the Department's statutory authority to retain private counsel.
At present private counsel is retained by the Department if a Federal official is a target of a Federal criminal investigation, if there is a conflict among defendants, or if the official wishes to assert defenses not in the interest of the United States to assert. As this staff report has indicated, representation of targets has substantial potential to interfere with or have the appearance of interfering with pending criminal investigatioiis. Similarly, retaining private counsel for the purpose of raising defenses not in the interest of the United States may involve the raising of Barker/, rlbchmn defenses or arguments that conduct which violates constitutional rights is legal. The Department should not be given the authority to retain private counsel in those situiiations. The I)ep lartnet shll()Iul( only e V iven thori v to hire private counsel when a conflict among dtefenl lantsl ises.
To mitigate the effects such a I imitation will have on Federal officials, the department should be given authority to reimburse Federal officials who must themselves retain private counsel in a civil case, if the )epartmnent is unable to represent the employee because he was under criminal investigation. It would not be appropriate to pay for private counsel while an investigation is pending, therefore, any reimbursement should be restricted to situations in which the investigation has been closed or the individual has been found innocent. Such reimbursement should not be allowed if the Department fails to prosecute for reasons unrelated to the individual's innocence, such as granting the employee immunity for prosecution in return for testimony. This policy would not have any adverse impact on a criminal investigation.

There is no simple solution to the problems created by the civil suits being brought against Federal employees in the wake of revelations about Government lawlessness. It would, however, be ironic if the failure of existing accountability mechanisms to deter this lawlessness were to lead Congress to amendments to the Federal Tort Claims Act in a way which further reduces the effectiveness of these mechanisms.





28

In a very real sense, the Government is responsible for the dilemma in which it now finds itself and at least some of the defendants in pending civil suits undoubtedly did abuse the constitutional rights of individuals. The adverse impact of these lawsuits on Federal -employees who were not responsible for these abuses is tragic. But the plight of these employees-as painful as it may be-cannot justify diluting the future ability of the Government to hold all Federal employees accountable. Only by strengthening safeguards to prevent further abuses can the Government break o ut of the spiral in which the Government presently finds itself trapped.







29




APPENDIX OF EXHIBITS





Exhibit 1: Justice Department Statement of Policy Regarding
Limitation for Representation of Federal Employees, Attorney
General's Order 683-77 (January 19, 1977)

RULES AND REGULATIOiS 5695

tiors taken ,vould oppose positions maintained by the United States itself.
By virtue of the authority invested tn
me by 28 U SC. 509. Part 50 of Chapter
I of Title 28 of the Code of Federal Regulations is hereby amended by addition
of the following 4 50.15 and 50.16:
50.15 Representation of Federal Employees by Department of Justi
Attorneys or by Private Counsel Furnished by the Department in State
Criminal Proceedings and in Civil
Title 28-Judical Administration Proceedings and Congressional Proceedings in Which Federal EmployCHAPTER DEPARTMENT OF JUSTICE ces Are Sued or Subpoenaed in Their
IOrder No. 683--771 Individual Capacities.
PART 50-STATEMENTS OF POLICY (a) Under the procedures set forth beLimitation for Representation of Federal low, a federal employee (herein defined Employees to include former employees) may be
represented by Justice Department
AGENCY: Department of Justice. attorneys in state criminal proceedings
ACTION: Statement of policy, and In civil and Congressional proceedEFFECTIVE DATE: January 31 ,1977. wings In which he is sued or subpoenaed in
his individual capacities, not covered by
SUMMARY: The attached statement of 1 15.1 of this chapter.
policy describes the limits within which (1) When an employee believes he is the Department may provide for repre- entitled to representation by the Departsentation of Federal employees with re- rent of Justice in a proceeding, he must spect to employment-related matters in submit a request for that representation, which they are involved in their Individ- together with 411 process and pleadings ual capacity. Representation in these served upon him, to his immediate superm$tters is limited to state criminal pro- visor or whomever is designated by the ceedings. and civil and Congressional head of his department or agency, forthproceedings. with. The employee's employing federal
SUPPLEMENTARY INFMRMATION: It agency shall subrrt to the Civil Division may be helpful to set forth briefly the in a timely manner a statement, with all manner in which the representation au- supporting Aata., as to whether the emthority set forth In the statement of ployee was acting within the scope of policy is currently being applied. Bearing his employment, together with Its recomin mind that extraordinary situations mendation as to whether representation may justify going to the outer limits of should be provided. The communication the guidelines, the present practice of the between the employee and any individual Department is as follows: acting as an attorney at his employing
1. The Department will represent an agency, with regard to the request for
employee who is sued or subpoenaed in representation. shall be treated as subhis Individual capacity, if the acts which ject to the attorney-client privilege. In constitute the subject of the proceeding emergency situations the Civil Division reasonably appear to have been per- may initiate conditional representation formed within the scope of his employ- after communication by telephone with meant and if he is nbt the target of a the employing agency. In such CASe, Federal criminal investigation with re- appropriate written data must be subspect to such actions. sequently provided.
2. Where, although the employee rea- (2) Upon receipt of the agecy's noti-'
sonably appears to have acted within the fication of request for counsel, the Civil scope of his employment, a pending in- Division will determine whether the em-vestigatton has disclosed some evidence ployee's actions reasonably appear to of his specific participation in a crime, have been performed within the scope of the Departmient will pay for representa- his employment, and whether providing tion by a private attorney. representation is in the interest of the
-3. The Department will likewise pay United States. If a negative determinafor representation by a private attorney -tion is made. Civil Division will Inform when several employees, otherwise en- the agency and/or the employee that no
titled to representation by the Depart- representation will be provided.
ment, have sufficiently conflicting inter- (3) Where there appears to exist the ests which in the Department's view pre- (3) Whereer appea to estth clude represertatlon of each of them by gassibilty of a federal criminal tnvestthe Department. gatlon or indictment relating to the same
4. The Department will not represent, subject matter for which repersentaton
or pay for the representation of. any em- i sought the Civil Division will contact ployee, if. with respect to the acts that a designated official inathe Criminal Dare the subject of the representation. an vision or a determination whether the indictment or information has been filed employee is either a target of a federal against him by the United States. or a criminal Investigation or a defendant in pending investigation of the Department a federal crminal case. .An employee is indicates that he committed a criminal the target of an investigation If, in addlofnd s tion to being circumstantially implicated
S. The Department will not provide or by having the appropriate rTORPSIMpay for representation where the posi- ties at the appropriate tln t, M m

MUNAL 0019MUS VOL 142. NO. 20--MONCAY, JANUARY 31, 1"7






30



596 RULES AND REGULATIONS

evidence of his spefic prticpatla in client privilege. All legal arguments apa crime. In appropriate Instances, Civil propriate to the employee's case will be Rights and Tax Divisions and any other made unless they conflict with governprosecutive authority within the Depart- mental positions. Where adequate repment should be contacted for a similar resentation requires the making of a determination. legal argument which conflicts with a
(4) If the Criminal, Civil Rights or governmental position, the Department Tax Division or other prosecutive author- attorney shall so advise the employee. ity within the Department (herelnafter (b) Representation by Department of 'prosecuting divisionn) Indicates that the Justice attorneys is not available to a employee is not the target of a criminal federal employee whenever: investigation concerning the act or acts (1) The representation requested Is for which he seeks representation., then in connection with a federal criminal representation may be provided. Simi- proceeding in which the employee is a larly, If the prosecuting division indicates defendant; that there is an ongoing Investigation, (2) The employee is i target of a but into a matter other than that for federal criminal investigation on' the which representation ha been requested, same subject matter; then representation may be provided. (3) The act or acts with regard to
(5) If the prosecuting division Indi- which the employee desires representacates that the employee is the target of a tion do not reasonably appear to have criminal investigation concerning the act been performed within the scope of his or acts for which he seeks representation, employment with the federal governCivil Division will Inform the.Amployee ment; or that no representation by Justice De- (4) It is otherwise determined by the
partment attorneys will be provided. If Department that it is not in the interest the prosecuting division indicates that of the United States to represent the the employee is a.target of an Investt- employee. -stion concerning the act or acts for
which he seeks rees taton, but no 50.16 Representatlon of Fededa Em.
decislon-to seek an Indictment or Ise Ployees by Ptivaic CAunmel aFedeumi
an Information has been made, a private Expene.
attorney may. be provided to the e.a (a) Representation by private counsel
ployee at federal expense under the pro- at federal expense may be provided to a ceduresof 1 50.16. federal employee only in the instances
(6) .It conflicts exist between the legal described in 1 50.15 (a) (5) and (a) (6). or factual Positions of various employees (b) Where private counsel is provided, in the same case which make it Inap- the following procedures will apply: propriate for a single attorney to rep- (1) The Department of Justice must resent thein all, the employees may be approve in advance any private counsel Separated Ilnto as -many groups as is to be retained under this section. Where necessary to resolve the conflict problem national security interests may be inand each mp. may be provided with volved, the Department of Justice will
separate representation. Same situations consult with the employing agency. may make it advisable that private rep- -- (2) FPeeral payments to private counresentation be provided to all conflIcting sel for an employee will cease if the Degroups and that Justice Department at- partment of Justice (1) decides to seek an torneys be withhel1d-so as not to prejudice indictment of or to issue an Information particular' defendants. In such situations, against that employee on a federal crimthe procedures of I 50.16' will apply. final charge relating to the. act or acts
(7) Once undertaken, representation concerning which. representation was, under this subsectln will continue until undertaken; (I determines- that the either all -aproprate proceedings. in- employee's actions donot reasonably apeluding applicable appellate procedure pear to have been performed within the haveended, or untlanmy of the foregoing 0cope of his employment; (iM) resolves. baees for della ing or withdrawing from the conflict described h I mi.15(a) (6) representation is found to xist. includ- and tenders representation by Departing without limitatfon the basis that rep- ment of Justice attorneys;- fiv) deterresentatlon is not in the interest of the mines that representation iX not in the United States. In -any of the tatter interest of the United States; (v) termi-.events, the representing Department at- nates the retainer with the. concurrence torney on the case wi seek to withdraw of the emploee-ellent, for any reason.. but winll ensure to the maximum extent c..)., In anyl case in which the employee .
- possible that the employee is not preju- is not represented by a Departmet of diced thereby. Justice attorney, the -Department of
(8) Justice Departmet attorneys who Justice may seek leave to intervene or represent employees under this section appear as amicus curiae oxi behalf of the undertake a full and traditional attor- United States to assure adequate conney-client relationship with the employ"- sideration of issues of governmental ees with respect to the attorney-client concern. privilege. If representation is discontinued for any reason, any imnat Dated: January 19, 1977.
Information gained by the attorney in EDWARD H. LrVE,
the eaourse o representing the employee Attorney General.
continues-.to be subject to the attorney- IR Doc -291s Fled 1-2-77;:4: am)


SAhRAL EISITR VOL 42. NO. 20--AMONAY. JANUARY 3. 1977






31



Exhibit 2: Revised Version of Attorney General's Order 683-77
(January 19, 1977) Presently in Effect!

Title 28--Judicial Administration

CHAPTER 1--DEPARTMENT OF JUSTICE [Order No. 683-77]

PART 50--STATEMENTS OF POLICY

Limitation for Representation of Federal Employees

AGENCY: Department of Justice. ACTION: Statement of policy. EFFECTIVE DATE: January 31, 1977. SUMMARY: The attached statement describes the policy of the Department on representation of Federal employees when they are sued individually for actions performed within the scope of their employment. Representation in these matters is limited to state criminal proceedings, and civil and Congressional proceedings. Representation will not be provided in connection wth federal criminal proceedings.

By virtue of the authority vested in me by 28 U.S.C. 509, Part 50 of Chapter I of Title 28 of the Code of Federal Regulations is hereby amended by amending S550.15 and 50.16 thereof to read as follows:

550.15 Representation of Federal Employees by Department of Justice Attorneys or by Private Counsel Furnished by

the Department in State Criminal Proceedings and in Civil

Proceedings and Congressional Proceedings in Which Federal

Employees Are Sued or Subpoenaed in Their Individual

Capacities.

(a) Under the procedures set forth below, a federal

employee (herein defined to include former employees) may be represented by Justice Department attorneys in state criminal proceedings and in civil and Congressional proceedings in which he is sued or subpoenaed in his individual capacity, not covered by S 15.1 of this chapter. Reive at June i5. 1977. m .tng tween Justice Department and commit repreentatives. See Introuctlonatp. X






32


(1) When an employee believes he is entitled to re'presentation by the Department of Justice in a proceeding, he must submit a written request for that representation, together with all process and pleadings served upon him, to his immediate supervisor or whomever is designated by the head of his department or agency, forthwith. The employee's employing federal agency shall submit to the Civil Division,, the Civil Rights Division, the Criminal Division, the Lands and Natural Resources-Division or the Tax Division, (hereinafter referred to as "the litigating division"), as appropriate, in a timely manner a statement, with all available supporting data, as to whether the employee was acting within the scope of his employment together with its recommendation as to whether representation should be provided. The communication between the employee and any individual acting as an attorney at his employing agency, with regard to the request for representation, shall be treated as subject to the attorneyclient privilege. In emergency situations the litigating division may initiate conditional representation after communication by telephone with the employing agency. In such cases, appropriate written data must be subsequently provided.

(2) Upon 'receipt of the agency's notification of request for counsel, the litigating division will determine whether the employeels.actions reasonably appear to have been performed within the scope of his employment and whether providing representation is in the interest of the United States. In. circumstances where considerations of professional ethics prohibit direct review of the facts by attorneys of the litigating division (e.g. because of the possible existence of inter-defendant conflicts) the litigating division will


2






33



delegate the fact-finding aspects'of this function to other components of the Department or to a private-attorney at federal expense.

(3) Attorneys employed by any component of the Department of Justice who either represent employees under this section or who participate in any process utilized for the purpose of determining whether the Department should provide representation to a federal employee, undertake a full and traditional attorney-client relationship with the employee including application of the attorney-client privilege. An~y adverse information gained by Department attorney during the course of such attorney-client relationship shall not be disclosed to anyone, either inside or outside the Department, other than attorneys(from the litigating division) responsible for(the defense of the subject actio unless such disclosure is authorized by the employee. Adverse information shall continue to be fully protected whether or not representation is provided, and even though representation may be discontinued.

(4) Where there appears to exist the possibility of a

federal criminal investigation or indictment relating to the same subject matter for which representation is sought, the litigating division will contact a designated official in the Criminal, Civil Rights or Tax Division or other prosecutive authority within the Department (hereinafter "prosecuting division") to determine whether the employee is either a target of a federal criminal investigation or a defendant in a federal criminal case. An employee is the target of an investigation if, in addition to being circumstantially implicated by having the appropriate responsibilities at the appropriate time, an ongoing investigation indicates that there is some evidence of his specific participation in a crime.



-3-






34


(5) If a prosecuting division of the Department indicates

that the employee is not the target of a criminal investigation concerning-the act or acts for which he seeks representation, then representation may be provided. Similarly, if the prosecuting division indicates that there is an ongoing investigation,,but into a matter other than that-for which representation has been requested, then representation may be provided.

(6) If the prosecuting division indicates that the

employee is the target of a federal criminal investigation concerning the act or acts for which he seeks representation, the litigating division will inform the employee that no representation by Justice Department attorneys will be provided. But, if in such a case no decision to seek an indictment or issue an information has been madej private attorney may be provided to the employee at federal expense under the procedures of S 50.16.

(7) In any case where it'is determined that Department

of Justice attorneys will represent a federal employee, the litigating division will promptly inform the employee and the agency which employs him (i) that in actions where the United States, any agency, or any officer in his official capacity thereof is also named as a defendant, the Department of Justice is required by law to represent the United States and/or such agency-or officer and will assert all appropriate legal positions and defenses to establish the non-liability of such agency, officer and/or the United States; (ii) that






4






35



the Department of Justice will not assert any legal position or defense deemed not to be in the interest of the United States to assert; and -(iii) where appropriate, that neither the Department of Justice nor any agency of the United States Government has authority to pay or to indemnify the defendant employee for any judgment for money damages which may be rendered against such employee.

(8) If a determination not to provide representation

is made, the litigating division will inform the agency and/or the employee that no representation will be provided.

(9) If conflicts exist between the legal or factual

positions of various employees in the same case which make it inappropriate for a single attorney to represent them all, the employees may be separated into as many groups as is necessary to resolve the conflict problem and each group may be provided with separate representation. Some situations may make it advisable that private representation be provided to all conflicting groups and that Justice Department attorneys be withheld so as not to prejudice particular defendants. In such situations, the procedures of S 50.16 will apply.

(10) If p oviding representation to the employee is otherwise determined to be appropriate but the adequate representation of the employee requires the making of an argument which conflicts with a governmental position, a private attorney may be provided to the employee at federal expense under the procedures of section 50.16.

(11) Once undertaken, representation of a federal employee under this subsection will continue until either all appropriate proceedings, including applicable appellate procedures, have ended, or until any of the bases for declining or withdrawing from representation set forth in this section is





5



21-221 0 78 4






36


found to exist, including without limitation the basis that representation is not in the interest of the United States. If representation is discontinued for any reason, the representing Department attorney on the case will seek to 'withdraw but will ensure to the maximum extent possible that the employee is not prejudiced thereby.

(b) Representation by Department of Justice attorneys is not available to a federal employee whenever:

(1) The act or acts with regard to which the employee

desires representation do not reasonably appear to have been performed within the scope of his employment with the federal

government;

(2) The representation requested is in connection with a federal criminal proceeding in which the employee is a defendant; or is in connection with a proceeding which concerns the same subject matter as a federal criminal investigation in which the employee is a target; or

(3) It is otherwise determined by theDepartment that

it is not in the interest of the United States to represent the employee.

S 50.16 Representation of Federal Employees by Private

Counsel at Federal Expense.

(a) Representation by private counsel at federal expense is subject to theavailability of funds and may be provided to a federal employee only in the instances described in S 50.15(6), (9) and (10). Such private counsel may, in a22ropriate circumstances, also be utilized for the purposes

set forth in S 50.15(a),(2).




6






37


(b) Where private counsel is provided, the following procedures will apply:

(1) The Department of Justice must approve in advance any private counsel to be retained under this section. Where national security interests may be involved, the Department of Justice will consult with the agency employing the federal defendant seeking representation.

(2) Federal payments to private counsel for an employee will cease if the Department of Justice (1) decides to seek an indictment of or to issue an information against that employee on a federal criminal charge relating to the act or acts concerning which representation was undertaken; (ii) determines that the employee's actions do not reasonably appear to have been performed within the scope of his employment; (iii) resolves the conflict described in and tenders representation by Department of Justice attorneys; (iv) terminates the retainer with the concurrence of the employeeclient, for any reason.

(c) In any case in which the employee is not represented by a Department of Justice attorney, the Department of Justice may seek leave to intervene or appear as amicus curiae on behalf of the United States to assure adequate consideration of issues of governmental concern.

Dated:


















7






138



Exhibit 3: Memorandum of Antonin Scalia Regarding Authority
for Employment of Outside Counsel, March 4, 1976 1

TsS: DM

(-len ~.Prnn
Assistant A!tto-_rney CGeneral
f7or Xadinistration

Antonin Scalia
Assistant Attorneyr general
0Ofifice of Legal Colunsel

Authority for Em-oloyment of Ou%'_tside Legal Connsel.


.;.is is in res-conse to the fir-st cniestion:: raised in vour rmerorandur of January 22, 1976. The remaaining' three issues will be dealt wdith in a separate memnorandum.

As indicated in your meiaorandum, the Depart=--nt has
re-tained Private aCtorneys to represent certain Present and 1Efor-mer employees of the CI'A, the FBI and the Post-al Service, in connection with congressional hearings and civil .iti.uat-Lion. The activities which are- the subject of the hearings and the lawsuits occurred while the ind-.v4 duals were enT31ored by the Federal Goverin~ent. The Crii-inal Division has iii at~ed investigations to detex-mine w~hether t9-hose activities involved violation of Federal law. The first issue raised in your mem.orandi is whether thIe Departmen-t has authority t.-o provide- representation thr-ough contracts With Private attorneys. We will address this matter in a. gene-ral. way, wdithout- reference to any peculiar factors which may hbe Introduced bvi the particular ter-ms of the various contracts .whci have been entered into or bV the m.'anner of -their im-ole.mentat~ion.

Our conclusions Mayr be siomarized as follows: TNhe deternmination that it is in the interest of7- the Unit,-d Staesto Provide private legal counsel to -the individuals in question is proper. Because of the related investigations5 conducted by thle Crimnzinal Division, representation oli the individuals by -Departxrient att-orneys would present an unacceptable appearance of conflict of interest, and create a substantial pot.-ntial of: prejudicing elFfecti-ve defense of th.-;e civil cases hv required withdrawal of rprsent-attion in the fu1turs. In such circumstances, authoriLty t2-o retain 7:_i .at-e attorneys may reasonably beinfe.red from~ the- functiOns of the -Attorney General set forth in 23 UIXS.'C. 515-517 0?- tfrom t-he general author-itv of the Attorney General, -13 U.S.C. 509,

I Received by subcommittee on January 26, 1978. See exhibit 27 at p. 391, exhibit 28 at p. 398, exhibit 29 at p. 411, and exhibit 30 at p. 1054.






39


.n-e aprp-raton 1- r Sa aresand E .nses Gaieral. Legal .2 tivities" or pnerha-.s thtfor GnraAiaLsrtioa" could- be utilized. A mat,-ter waicti should be COn-3i1 ered by you~r Office is the proper means of allocating Jfund_:s for contracts which extend beyo-nd t-he current fiscal year.

IVarious practical CULficulties rule out the use off
5 U.S.C. 3109, whIch deals witi enpmloyirent of e~xerts3 and C=13ultantS.

1. Use of 5 UL'.S.C. 3109 (b) This subsection Provides in part tt authorized b1y an appropriation or other
statute,ls an agency head mnay procure, the "~temporary (not in e.-cess of 1 year) or int-armittant services of ezmertz or consultants "In theory, this Provision conl1d be
usead i the present situation.l/ iowever, a difficulty wh2-ich seems insurmountable-- is thiat the last sentence of' .3109(b) provides in eff41ect that payment fOr services under
5 3109 znay exceed 4^145 per day ;only when s-pecificall.y authorizad by the appropriation or other statute authorizing the procurement of tha services.*m R.iarding this Departmient,. there is no such n~ecific authorization. Therefore, ia view of the fact that the agreeents with the nrivatle attorflys providee for compensation (..,$50~ "Der hour) greatly in excess o f that ner=L*It te by 0 19 (b) the ora-s en t a g;!araents may not be -based upon that 3statute.2/ However, .n our view, the unavailabil-4Ity of 9 3109 authority ha3 no bearing u-p.On the abilit'l of the Die-partment to use an alternative source of auth-ority. Cf. 42 Ccoso. Gen. 355 (1963) (contracts for -Dervices of la:3or arbitrators) .

2. General procurement authoritv off the Attrney.General
-41 U.S.C. 11(a) provides in part th-at: "No contractC o-- ourchase on bA~half of thetited States shall be made, unless the sare is auth1-orized by law or is under an anpropriation




1/ Express aubhiorizatiori 44o utilize 5 U.S.C. 3109 is contain~ed in. the Deoart~n&.t of Justr-ice --i~propri nation Tict for Piscal Year 197r3, 5 204 of 2; bli-:Law 9 --121.

2/ .7zithier p.robL~rm, whih ee-_ not- decis~aussed, is th.-at 3! G 30(b) li-nit3 !Z he fizatlon o-zf -Lh otrc


-2-





40


aaequate to its fulfilllment Y T n di3 Une r thi 1'.s -Prosion,
alternative bases f1or the vja~king of contracts are set forth; i.e., such action may either be Iauthorized by law" or be "under a.-n approprition aleguate to its fulfillment."4/W find it nec essarv to deal only -tith the former bas is, though we will discuss the issue of required appropriations in another context later on.

Apart from 41 U.S.. 11(a), the general principle governins' athoriy of xec utive officers does'not- reie pci
enufleration of powers conferred, but rather asses tne grant of those Powers reasonably needed to Perfor-m the statutorv duties assigned.

A practical knowledge of the action of any one
of the careat denartnients of the goverrrnent, naust convince e-tery person, that the head of a idepartnent, in the distribution of its duties and r-.9
snonsibilitiese is often compelled to exercise his
discretion. HIe is limited in the exercise of his
powers by the law, but it does nbt follow,. that he
muast show statutory provision for Ieverythingr be
does. No government could be administered on s,=ch
principles. To atte- pt to regulate, -by lav, the
minute ziovetents of eve9rY Part OE the complicated



3/ This subsection, 41 U.S.C. 11(a), is based upon Rev1. Stat.3 3732 (1875). The deriv~tiofl for the latter i3 S 10 Of the Act of M-arch 2t 1861t 12 Stat. 220, WahIch reenacted, with a change not pertinent here, S 3 of the Act Of June 23t 1860t 12 Stat. 103.

The legislative history Of the provisions enacted in 1850 and 1361 is limited and she-Lds no real light upon the present issues. see 53 Cong. Globe 2933 (18'50) (Senator Davis); 55 Cong. GlIobe 14.21 (1861) (Congressnian Davis). See also 55 Cong. Globe 1142 .(1361) (Senator Douglas).

A i~ilrpOvisio 4 r I I'ted *C0 the Departments of State, ~r. asury,. War and "'avy, vias enacted in 1820t 5 6 of the c of y 1, 1832 0, 3 istat.5s.

d/ vz arding teraiolh'betveenf the taio basest seat I-g. 0-s Ino-C 26,21- 17)

-3-






41


imAchhery of government, would evince a roost uinpardonable ignorance on the Subject. United States
v. Macdaniel, 32 U.S. 1, 13-14 (1933).

41 U.S.C. 11(a) could be regarded as rely an explicit application ofL this general principle to the specifEic area of contracting authority; or, on the other hand, as the exn ressjon of a congressional intent that a higher standard apply to this particular field. The leciislative history is laiinform,ative as to which interpretation is correct, except that the -former i3 suggested by the citation in the margin of Rev. Stat., Section 3732, the predecessor of 41 U.S.C. 11 (a), ot The Floyd Acceptances, 74 U.S. 656 (1963) a case which discussed the contracting power of government officers under general princinles.5/ A case involving the predecessor
statute of 41 U.S.C. 11(a)Y which might be thought to support the position that the statute establishes a higher thanusual standard is Chase v. United States, 155 U.S. 4539 (13904). There the Court held that the contracting authority must be
contained "by necessary im~plication"' in the federal ofLficer's explicit aulthori-zation; and a, plie-d thcond~ition. so strictly that it held th.%e authority to "establiSh post Offices" did not authoriz-e the leasing of a !,uilding for that purpose. See also 4 Ops. A.G. 600 (1347), which suqge-'sts9 that a statute sihDilar to 41 U.z-S.C. 11(a) requires e:nress contracting authority. (T-hat,- r-igid view sees to have, been later abandoned by its author, sub) silentio-, .7Whein Writing fA.or the S=)reine Court in Zradlay v. United Statzs, 98 U.S. 1041 113-14 (1373).) ..

It seems to us, hoee-wehr41 U.S.C. 11(a) i3
ieant to establish a special standard or whether (as seems MO-re lik-elv) it is .merely an earlyr statutory expres3ion of the general princiole governing of-ficial authorization-that
tha rnora restrictive views which a-*Pear In some of the earlier cases dealinq within this subject wonld no longer be
- Followed. It is vir-tually unthinkable in modern tin~es that




i/In Tne Flovci -Azceataz-ices, the Court- discu3ad the !3owker ozl Covern nto--e o'su one type ouf contract, bills
Oiexchanq,?, and said that. -Pch a-Ithority, not being x reS33lY cji7n by sit at~ut3n, could "ari:;e a.3 an inci-,4ent t,--o
ex~ cercise of some othePr power."t The majority XC4C1^, 'how'E Lat due to an e:tp:ress statutoryr hi-~bition against
~ ~2vnc0-o ~inz oey th e3cretarv o-! i Uar lacl-ed 17eAzoritv -to aicceot cert;-ain tin~e dr-aftn.





42


the extensive business of the Federal Government could be conducted on the basis of a principle which requires either eplicit contracting authority or contracting authority
;by necessary implication" as narrowly as that phrase is interpreted in the Chase case. A prime case in point is the Department of Justice itself. Unlike certain other Federal agencies 6/, the Department does not have any gen- \ eral contracting authority expressly conferred by statute. Still, it is clear that, as a general matter, the Attorney General has the power to make contracts for goods and ser- \ vices reasonably needed for the conduct of the Department's business. The question here is whether !this general power extends to the present contracts for the retention of private attorneys.

A basic responsibility of the Attorney General is to
represent Federal agencies and their employees in connection with civil litigation. See 28 U.S.C. 516-517. Under 28 U.S.C. 517, the Attorney General is authorized to send officers of the Department to attend to the interests of the United States in pending suits "or to attend to any other interest of the
United States."

Two obvious interests of the United States are involved in the present litigation: First, since the conduct at issue was performed in connection with Federal employment, it may be important for the Government to establish its legality if properly authorized. Second, the failure of the Government to undertake the expense of defending apparently lawful actions taken in good faith in the performance of governmental duties could have a serious and detrimental effect
upon the current morale of Federal employees, and upon the vigor with which they pursue their assignments in the future.7/

The authority to defendjis in our view clearly established by the statutes ci-ted above; and the traditional practice of the Department in defending civil suits supports the same conclusion. The only issue remaining, then, is whether in the present situation rh. Department can do by J I

6/ See, e.g., 39 U.S.C. 401(3), concerning th powers of the Postal Service.

7/ In a matter before the Comptroller General, similar points were raised by the Civil Division/and apparently were accepted as valid by the Comptroller General. See Decision of the Comptroller General, No. B-182816 (Oct. 29, 1975).
I 1
I
I






43


contract what it would be --ernitted to do d4 -ectiv. In our vie_-w it can, because of 'the obstacles which Dreventth achievement of the necessary governmental ends by the usual TICeas of di -c oresentation. The pendenicy of criminal investiqati on concerning the very conduct which is the subject of civil suits creates a serious !potential conflict
of interest with respect to repreSentation bv De'nartm'ent ct*torne,,s,. 14t could subject thes Department's, s-t.'rn officers to0 conflicting loyalties and create an inappropriate public imnage for the De-oartm~ent itself. If the pending investigation should lead to actual indict-ent of one of the individuals who is represented, representation by Justice Department attorneys would%,--in accord with the Department's past pract-ice and with what -we consider clear principles of propriety--have to be tCerminated.8/ This could seriously impair th1-e employee's defense of the civil case--oerhaps -to suchn an extenit that t-he Court would enjoin termaination. It is clearly not reaponsible to proceed in a mann~rer wh-Iich creates a substantial possibility of such a result when these consequences ca-n be eliminated or substantially minimized by providing Departmental assistance through the hiring of private attorneys rather than use of Denartmien-tal personrnel.

In sum: At the present stags of the nroceeelinas, interests of the United States, as well as interests of the Thdiv 'dual Federal empvloyees, are at stake. Because or rossiblAe conflic-ts of interest,. representation by TD'epartinent e-*-_loyees is not feasible. In these circum-stances, it is our view tL-at the Attorney General can use hiis general authority as the headl of the Department, see 23 U.S.C. 509, to further the above-nnentioned interests of the Vnite,- States byr retaining Private attorneys.2/ That course is the only resoonsiblom9/ In his letter of Decemnber 24, 1975 to Con.- -ssu'an Rodino, .,,.torey General Levi stated that, if one of the individuals is indicted or otherwise found cuilnabler the nepartn~ent may
r~ealutethe vroor e ty of continuing 0o -pay couinsel...
ilowever, evetn if the Department ceases such vaymrentr the indiv ial -would be 'roce to retain, at -his own -exp~ense, the same 4-torV-v114. s possibility ,,iould not exist if the initial ro-resentation haid been by a Deoartrlent attorney.

9/ Cf. 31 Couip. Cen. 561 (13052) tC".O contract f6or f-he services 0J. a tasao)





44


rMeans of accomplishing an end which is fully consistent with the statutes prescribing the functions of the Department of Justice.
3. Availability of appropriated funds A separate question is the existence of appropriations which may be used to pay the private attorneys. Of course it is necessary to comply .with 31 U.S.C. 628, which provides as follows:
1
Except as otherwise provided by law, sums
appropriated for the various branches of expenditure in the public service shall'be applied
solely to the objects for which they are respectively made, and for no others.

Since it seems likely that some of the contracts relating to the defense of civil actions w-ill entail work extending beyond the present fiscal year, it will also be necessary to take account of 31 U.S.C. 665(a) and 712a, which read as follows:

S 665. Appropriations.

(a) Expenditures or contract obligations in excess
of funds prohibited.

No officer or employee of the United States
shall make or authorize an expenditure from or
create or authorize an obligation under any
appropriation or fund in excess of the amount
available therein; nor shall any such officer or
employee involve the Government in any contract
or other obligation, for the payment of money for
any purpose, in advance of appropriations made
for such purpose, unless such contract or obligation is authorized by law.

S 712a. Balances of appropriations; expenditures.

Except as otherwise provided by law, all balances of appropriations contained in the annual
appropriation bills and made specifically for the
service of any fiscal year shall only be applied
to the payment of expenses properly incurred during that year, or to the fulfillment of contracts properly made within that year.

-7-






45


in cases involving multi-year contracts, tie courts saem to have given a strict interpretation t;_o the phrase n authorized by law' in 5 665(a), requiring ex-Aicit, statutory sanction rather than the general authorization which would sulffice under 41 U.S.C. 11(a).I/ See, e.g., Leiter v. Unite.--d Statesr 271 U.S. 204, 206 (1926) (liases fox, tern of four years) .11/ Some decisions ofl the Comnptroller General ~Iod seem to suggest that.. If the present contracts are not supported by multi-year appropriations, 'they w,,ould not be binding as to work performed in subsequent fiscal years, e~.,42 Como. Gen. 272 (1962). On the other hand, a recent decision, which should be analogous, held that the contract1ual obligation for payment of court-aopointad attorneys arises at the tire of appointm-ent, and thIat, even though part of the performance m~ay occur in later fiscal years, the entire payment is chargeable to the fiscal year in which the appointment was made. 50 Camp. CGen. 539 (1.971).

Ile have not attempted to resolver the issues relating
to 31 U.S.C. 665(a) and 712a, but bring them to your attention for whatever action you think necessary. T,1his will depend, of course, upon such factors as the expecte#Id cost of the contracts, the a~lecuacy of current anpropriations, the feasibilityi of rnodif"yinq the contracts (e.q., by :)roviding for a fiscal year limit, subject to renew-oal), and the feasibility of obtaining a supplsewntal appropriation.










11/ T1he phrase authorized by law" is used in r-any statutes, and it does Dot necessarily have th.,e same meaning in each context.

11/ The Leiter z-ase is an examnle off the tenfaenc- to lurm 4t-gther the rredeces-ors of 41 U.S.C. 1" (a) and 31 rU.S.C. '?35(a) and 712a. See also 42 Comp~. Cen. 272, 274-5 (19621). in our orninion, however, the issues raised by 41 ThW.S). C. 11 (a) and by thie tw~o latter statutes are entirely separate.


-3





46


Exhibit 4: Memorandum of Antonin Scalia Regarding Employment of Outside Counsel, March 15, 1977 1

AS;et


Glen E. Pommerening .,AR i97S
Assistant Attorney General
for Administration

Antonin Scalia
Assistant Attorney General
Office of Legal Counsel


employment of Outside Legal Counsel Nature of
Contracts; Reimbursement by Other Agencies


Part I of this memorandui responds to the second and
third questions raised in your memorandum of January 22, 1976; part II responds to the fourth question. The matter of the Department's authority to enter into the present contracts with private attorneys is dealt with in my memorandu of March 4, 1976.


I. Requirements concerning form and contents
of contracts

Your second and third questions relate to the requirements of Federal procurement law concerning the form and contents of the contracts involved here and the ability of the Department to waive such requirements.

Our views may be sum-arized as follows; The pertinent statute, 41 U.S.C. 254(a)-, leaves to the discretion of the agency head the form of negotiated contracts. Regarding contracts for personal or professional services, it does not appear that GSA's Federal Procurement Regulations require the use of particular forms of. contract.
*%onetheless, because of the unilateral nature of the written
contracts with the private attorneys (i.e., a letter frora the Civil Division) and because of the omissiorr of certain
necessary provisions, consideration should be given to preparing modified contracts and having them executed by the respective private attorneys, as well as by the Department.
One subject which should be dealt with explicitly is conditions for termination of the contracts by the Department.
The GSA procurement regulations require, with regard to negotiated contracts, that consideration be given to the maximnum number of qualified sources. This requirement

1 Received by subcommittee on January 26, 1978. See exhibit 27 at p. 391, exhibit 28 at p. 398, exhibit 29 at p. 411, and exhibit 30 at p. 1054.






47





to be ao olicable in the t)-:asent. ci-c=stance3, and
;oU.Ld -seem advisable -o GSA of the action:; ta'Aen
, ,v the De-aart=ent.

The existing contracl:s fail to contain several proVA. 3ions which are required by statute.', Of. tlese, tlha most i=ortant is the clause required! by 41 U.S.C. 254 (c) concerning e:ca.-;-iation 1by Ithte Ccrm troller General of: c"!r-4_-ain record.9 of t1he contractor. 'Ihara -loes not a-ppear to bba anv hasilis for waiver of -this anti related statutory Ment5.

A. Form of contracts

41 1 U 33 C A 5 2 ( c ) S e t s A' o r t h c f--x+- -a ka c i rc =s 4-6. a.-ces
in. wilich Pede.--Al procurement may be accC:a-.-)1ish-3
through negotiation, without advextisinq. On.-e ciZcum3tance iz when t4l,Ae con4.--act is "fror personal or
Pro':--ssional servicess" 1 41 U.S.C.
Another is when the conti act is 'for . 0 services
for which it is i=racticable to, secure conmetition.' 4 1 u. -S. C. 25 2 (c) (1 D) W-h i 1 c "t Ah _- 't --, I-V o -f 'Do i_-11 t IZ a 9 a
e.-Zcentions seen Ito anpiv here, the I?QA r,-_<7UIatJCnS
in-3U.-ate that relianc--- sLicul-2 ',_,e ur-On the
latt;?r. 2/



f6le z),irase -,";ersoaal Or .-,roZ _-ssicnal is not d---A4 =*ned ir Ithe 3%:altuto. n egu41: 1 on s state that services t-ust r)erforrela*
by oan individual contractor in nez-oon (not N *P 1 conceZ".n) an thatt nzofejaional stirviccs 'nay he ,- er;for-mec e _ier a.i indivic"lual contractor in person oz a concarn..7
1- 3. -0 '(a)

The ragulattions state th--t th2 proll-'sion rt2gar !inq
or -,-)_-ofessional s-c--i-vices -Ices not avUt-nOrize t e V ttrro P .7
_,-:It '--*y negotiation 04-7 a..., .5 Of
-17 the 0-1-hc!r -provision- concerning -i_-C=--_S-an-eS
-1, nezmit ation. 41 '-'r 2 0 -1* D) 3,orm e o f
fall --indar -3.,M. --hich r-latz:3
-on' liare might L 1. 1
the R ry'-r--craACe a;-,io ;nt of -Pnic--i -o-k e_-Iceed
11 i f -f -; C !-U It -o-MaI.I.." the
t tl_, a nrc-,-twardl
C', a U; n a

it initially cost %,C)ul-1-2 -_xCe(-.t4
3)






48


-3


41 UO S.C. 254 (a) provic.;es t1lat, with except-ions
P.Qt zz)e_-tinent- 1NAere,, "contrac-Cs negotiated p ur suant
to section 2:521 (c) . may be o1.2 any type which
in the opinion of! the aqancy will promote the
belat interests of. the Govern-ment." 12hia %GS.7% reaula
tions set forth several tYAeOS O npgotiat'
-F -d contracts; the dilffferences a-m-ong the t,-,pes r,3!aA%-- e
lazge]y to co-TiTpensation or res?,onsE.-Ality M-r-Or costz.
S ae 41 Cr-R 5 1-3.400. None of tl e ty,:7-as corresponds
1--o thee existing agreements with he-n(i.e., tllie Civil Division 'letters). 3 At sho
b-e -no-ted, howaverl, that generally speak._Jn the FedOrz%l T 'roc=e=emt Regulations do not vartain to 'Orocuramnt o-F -e-rsonal or -rofassionawl services. 41/ It should be proper to. conclude, therefore, thaz,
hcre the onlv requirement concerzi-ng contract- form
is t-h-at the "agency head' dete_- -'nn tilzat t1he --ff-arm
_d _A361 -nromota the, best- -terestz of the Vern
ic 11-4 M, 41 U.S. C. 2514 (a).



2/ (Cont'd. from Page 2)

above, anot1ter provision which pllcable -is 5 which authorizes neg9tia-4contracts for serviCes "for which. it is imDracticable to scare competition.." See Page _;, inF r -a Mh U S i a V.L s: # a
1-3. *04M,, reiiaz Aa %-qce should '-a nfacc:H u-,. n 4-1he nro, is-on concerning 71i=practicabililtyl' rather. t1han. that.- regardi._g Professional services. -11he rtain dififference between -,,h,- t-wo provisions is that the section concerning J' i -zi-Ality
I -eo I f findings
---qu,t res the making o.iff a rm-al dete=dnattion and AA justif-ving use of 4Che au-Ehority. St,_e 41 10 v3 5

3/ sizAlar is the labor-hoi= contract, desc._ -ed im.
5 Dlut see 5 .3-3.4,31-1(b) Concerr. Irlq the de-7vee
o:E supervisio.-a of cont=act per-rr-_'o=a nce.

A 41 CrR 0 1-1.002 t..?-j,4Ch states Cnat it'he Fedcr-l Procurement Recu 11.0. s apply to the -.roczzreraert 4L A. personal property a-ad 'nonpezzonai sez"i-4ces" and "che lease of raal estate. '-he un6arlying statuette, Vhe 7---der-al -Pro,_o-rty aad Administrative Ser-ficces Act of 19-129, defines to nv:!an "such conICractral services..
-rsonal services a
oth.4 than personal and pro-ffessional sex-vices, as ithe ; ,inistr_.tcr [of %Gen era'Al. Gcr7.iCe_-_111 s, a!! Idles4snatG.",
4, 7 2






49


-A


circunstanc-23 wonl,! st-em to r-_-,-raire tflat t::- attorneys ,,e _retain;?d at an I-onriv ra+:e aldl tlnai: Ijis 2epart-ment h"a-ve -no Cont'Yn-I ov-nr t4he
LUI-1- of de 0- t:11.9, -, Umez in w'n-;c*h, t'-a
are Tierformed. _',ne a-narC."I L__ .Y is not d-aalt Witl-A i:I tne CiVii DJA. 7 3' 3 1. 0 n IC e r S I
to 1:ho- prJ,--,7ate atI.--orneys is termination of t1-1e arr !mg-mt-_n t Tn hi-, D-2cemher 214, 1375 letter to Concrf--ssman
aozaino rc. ga rdinq
Lxa vi :, t -a t ed
'71t<% attc=eys ___ A. .1
-1-0 t'-a Citril
acticins Ilave been advised' t iat if Panay of their
is indi-t-,_d or oz-hazAse r- o z
4. Im,
by Cri-,i4nal Division for an7 role h-t rlic-'11t,
haw in tAa rzail cn _-nin_ the
,epari=ent nay r- oF com
tinuing to pay compel tlnat nF!xAsc-_% in t1he,
civil actions.

in o-,,,r ot>lnion, the r -_ f -termLnation 91-Lould
11-2! cover, !d explicitly it". a
C;3urse MtV reDrCsentaltdon an attornlkt Y
--nalAO aat will .V t'-- -1 ;- t. See '%me-caft
is 4- r-_ r, -I 7-1-Irl
It.s3ociationp Co le of e !3 0 n s ty
iCCiDIJ..,Iarv iiiale 2-11 7' ti e a C t 0 w
r,--tained by z1%e
,_;overnnnent to serve fov.4r_-.*ntai inte=,nsts, are simultaneou:31v servinq tl'ie inbarea'k--s *-n ':_i--7i '! za I
rc-..Cqr,- ;t in or= -7i aw to
t:abliGIA a Iror-nal record of that
zc-tention by t,.-- Govern"-ent :n-i,,,r !.i3. for

i4-!*--o7e a mzmb.; r of additic-a.L Co.-ditions ui on t'he lu of negoti--tion (as
to ldvertis-ing). 7or -ur-_ oses o- 'I'llis discu_, 3icn, it- ,.7ill 4"_ assirnad t-at con-4i 4- -4. o S
are an izablv -vei th Of




-a-P
-ion li;
AC?
A






50


-5

1711 -511-3.101 (a) T.r-vides that: '2o Procurement.. in ex-cess of *111000 shall be made by negotiation if the use of fox-mal advertising is feasible and practicable . iert at_ the Dro--award stage, the cost of the contracts was uncertain.
-7ven assuming that some of"' the contract-s could remasonably have been expected to involve payi-ients exceeding $10,000, it seems difficult to riaint11ain that use of formal advertising was feasible. The diffi culty of evaluating prof erred services of this sort, the need for expedition,. and perhaps even the restriations of legal ethics would appear to have made advertising L-apracticable

If it is correct that use of advertising was not practicable, then, as discussed above, it should follow t,"hat use of negotiation must 'be based myor. that ground, i.e. based upon the authority set forth in S 1-3nlO. The latter section, as noted previously, requires the making of a for-mal determination and findings concerning authority to negotiate. Such determinations and f-indings should be rnade now. 6/

Another requirement for negotiation is that
.proposals shall be solicited fromar the maxi-nm nimber of qualified sources, ...consisten--tqwit:-j -the nature of and requirements for the -serviCas
.to the end that the procreen wil e m
to the best advantage of the Gover-nzent, price and' other factors considered." 41 CER 3' 1-3.101(c). We nave not attempted to determine the -,anner ia which the particular attorneys were selected or whether Proposals' i-re sought fro.n~ a large number of attorneys. It would seem, htowe-_ver hat the DeoartPmznt's records should describe the procedures Which were followed and the justification for those procedures.

The above discussion suggests the likelihood
that, in various ways, the procedures which were $1 lowed deviat-ed from (presayaplcl)rquirerments oil the Federal Proci-a'-me t _Ragulabionsin' these circumstances, an ef12fort should be made to coiuply after the fact. See 4lC'ER 5 1-1.009. At least, appropriate notice should be given to GSA regarding the Department' s actions.






51





rt -act -lauses

Lite :3 t--m ara o o p ar t::-- e -n t o- a ti ce r cur
contract- inclvtdes rx l-f-nqt'.-4v -,nt of '_-_'-o7400nd 4-0 You- "7-S
sions. In Order to res %_ A.
have examined +---he General Pro-ii5ions and related laws .Md rzag,_aa -40nS. 17'-is rmemoran4mz discusses
(1) certain clauses whose inclusion appear to be nta_-dated hv statute and equal ;-_mnlo'.ment
opportunity clause p described by
A246. It zmay h( that other ofthe s-tandard clauses should be included, Lut tie 'el-r to Y,.-tur C!"ce with
regard to the remaining provi-sions.

1. 41 v. S,.C. 254 (C) provides as f 011OW3

All coatrac-s -e< otiated without advarlti3i.q nurseruant to authorit-r contained
in fhis chaptf=, o . shall include a clause
to the ef"'ect that the Co-Ptzoller General
of the CnJ4,ad States or any of "hiS dr
authorized representatives shall =nICil the emigration of thrie vea,3 a-AE'ter f Inal paya r.lt have access to . "my directly
rle-t4nent 1 ooks, '--3ocrunentsr paper, and
r- cords olff th.e contr-4 tor

Ther-_ eo*_-3 -riot a---)!:;ear to b;_4 a-av for Waiver of
-this requirimer4Z.,

Access by thp. omptroller General to Certaim records of the pri---ate att-ornevs raiso-3 issues of
tor e -clien* 'l t'-e Otha- harld, this
-'4"-)U1d not _'.-e true of other r _-cords, those r-aIaltiz-m sol--_l y to financial or accoun E_*Hc matters.
An apropriat-9 clause should he included in the contract!s. 7/



need Inot b a the clatwe t1he : Ppartmentl's
7Z *1 -11 0
-,_asnd -unon 41 C,-:,-> 1-2% 00 ied version ref to t1le 4-ter
torm ey c I -n '6 prJ',,,r4l,:-0 -. iould setnm r-.or,3
















21-221 0 713 -5






52


-7


2. 41 U.S.C. 254(a) contains t1-he folI owingt

E~verv contrant- negotiated Dursuant to:
section 252 (C) of this title shall con,tain a suitable -rarranty, as determined
by the agency head, by t~he contractor
'$-.-at no person .. has been comployed
to Solicit or s-ecure sdch contract upon.
an agr--:eeent A.. ora coMrndsSIOnt perCentagep brokerage, or contingent frie, excepting bona fida em1oyees or bona
fide established commercial or shelling
a~aancies maintained by the contractor for
theG nurrpOse Of securing ;.-miness

Dais3 provision seem~ to have no practical significance with -respect. to the present con tracts. N;onetheless, the requirement thatl each negotiated contract contain a "suitable warranty" conCerning contingent feesz seems to be -absejLute.

3.41- U.S.C. 22 _nrovdes in tart as ZEolrA every contract or agreement to be
made .. [y] l the UnitedStts
there shall be im~erted an exziress condition. 'that no Memher of Congress shall
be at2mitted to. ary -hr rpr F such
contract or -agrearnent, or Ito any baaerffit
-to arise thereupon.* *

This is another -orovision vmhich Ihas no practical significance here, but11- tha requ-ir:_Qent appears to be absolute (aside fxom certain sections set forth in the statute) .

4. Part 11 of Bxcutiva Order 11246 deals
with nondiscrimination in 'Zild eJnDuoyrent practices of Government contractors. (It should Be noted that, unless -the tDe-,.ajrtzznent of Labor grants a speci fic
ox-mptonthe noncliscrimaination rcruire-ments an-aly generally to trhe contractor's "-p1ov 1eunt Praictices and axr.1 not 1.46Jited to ernplovrent: r;Aatead to arformancc U, Ah piiicular -ntr-zc--. !2re 5 Z)M of






53







an ec;ual
-o bc- 1--ludcd contAact.." un1--ss an nnt.-3
Lal= P=Szlant "t0

-prov -;.a --oo t-yr s c-,xC!'Intions
-Ir L an" 5"
eC4 ere a crz'!.n ara C= 171 n. t
lp. ..+=aC-1- 3 fr-r 4 J
cm,
t:,.at tbe azmznt to lziE orderi3d ir. ilny
Un,_: e SUCh CoC2 -7 '3 OG 1 S (a) (2 should lx prOpor e*
xc' Tard the co-titzacts 1-a=o as contracts ':-or 1: 't;; a n" 0-r --emntio- vii'll

is-, 'Cne annzal cosIC --rea3aAnah17 e7qpect-ed.

lif an-.p of tl-n contracts i3 li'Z-elly to involve .-orm an zl-10,1100, th.en thn nondlsc-m4r.a4----'n cla"Ase
wn.tl an. 1-'r to i S S -a r"' c a 0 n a
t at 0E,
whic]-. at, 1
ia-sic t' ly n acmncy
f=orl including t]7.1--, 'ciausc. -n a p a -t --ul a-,r c c 7 I: -, -. c t
-1 a4. sr n'ci .3.1
f-)r groun. cf
a:L=l=ztanc*is In the nzc.-AloTtal iatareast no '!-xemn.t4-.3n -7iav rzra 7--o- conr 0 -2
to rjar-forn.-Ance- of- t ie can?--ract. 41

The of Ta"_'-Or r Cvalatic.s
tl-a- -di-ss ol its n*--isic-1 inco-ty-noratica,
t"a :--;ual *nnlovm-ent clause Li -onsidto OE non*x ,.)tcontract.


u
-ntc t-hr.:ae : a
-A. t <- OZ- i C? s
ch
of n. rformanc,- C*n.tracts






54





which win be entered into in una
ing --Lqe last categov-, we r,,agqes4.-- tha'C ca-re me
taken, before any awards, to coz4rly a-p-Ilicable
statlates and ---2gulatioas.

lRegar-ing contracts w.icii -ave ir-eer. r -formed,
it see.-A advisable to add ta the
record documents elescribina and: the
Procedures whi-h -dere followed. -T-lis sh.ouldl al-no 6e done with respect to contracts wihiclh -"ra still in vro;Tress. In addition, we suggest revIsion 044 !
the form and content of the actiVe cozth-a,_'-.S to
r-O-mly with.the requirements di3cussse. above.


from the Postal Sex7ice,
and

The fourth issue raised in your nemorandun of Jan-aary 122, 1916 is whether the De,a--t--.en,%. oJE Justice may seek partial or co=lete reimbursement of thess* [---Attorneys'] services" .Pr thle Postal.. Sz4er-7ice, CIA and 731,

Because t.4A matter depends -ainlv upon the
dealing with the authorit7j of the respective agencies, i-;&is necessary to deal wit.1i tham se-paratraly. Our concl1UC.2*_onS a-..-- aa folla4s; It seemq claar .611hat the properly request reimbursement Aftam the Posta"' Service and that, i-I a mutual agree-ment. is reached, such. could be provided. 39 U.S.C. A09(-2), 41.1. 1-me statute es concerning the authority of the cl."%., elsq., 50 U.S.C. 403411, are Unclear in t-his regard. ;!-.n atter.-15t -to oi)bain reimburzeMen".C from the CIR could be -nade, but,, -A-*.n vlow of .213 U.S.C. 516 and the Devarltment's traditional position the exclusi--dit of its representation aut: .crity, :; it- is ae--visable not to seek*such reizfau=-ement, with respect to rnpre3entation in civil actions. Because the 1731 dce3 not appear -%--o have zathority to retain defense counsel for court- ii-L-..,-ga+--.Ion invol-zina its emuioyees whten counsel is provided by the .'.'Ieparltnruen there-c'lloe3 -A 0 -%- -.Jee- to '1-e anv oasis for obtaining re:Lmbursentent for such. represen-Itation Ercam that agency. 'ItA4th res-ect to bOoth CIA and Fil =azreient-ation in connection 'with ';--efore congres3ional co-m-mittees occupies a different st&%Lusp and relm,'13urseiment co-Od be sought a-d re-eived.






55





-A. 1-:o.Ftal Service

I he 9 ect i o n o- t.! -1ozA-al Ieo--ani-at on- Alct
"I ir ---7 -,L C e
Xea&. g -ai*-Ii suit-s bv or azaii.3-1- %..L 39 U.S.1C. r:----t as

Deoartmer,4- o-, Oustica S'-all 4urnish, under 5ectiom 411 of thi3 title,
Postal Service -uch 1 ,al r*presentaticm as
it -may require, !.)ut -vi ,-.h the ;)rio--r- co-nsemt
t:ia Nttornev G-eneral the Postal -Service =av
e:n1p.l.oy attorneys v contract or to
-onduct 14-tigation, bro=qht by or against
Postal Service or its off ice--s or emr-lo-0-ces in
r- -4-0ec-inq t-- -ostal

Thu3i ti- .n 2 ttorn4 rr Gane,-al. could ha7e c-i,7e n is co-,-sont to an a xrang- e-m,-,.-nt imdar the Po3tal Ser-7ice its-e-I f provided r-prnseztation fo-L its i -,--Tplcyees .4, t4h.e civil :--uits and of course ev-?.i without Nt%:ozney -,eneral apn ro7al the 'ave u3eci
its ow-n attorneys to n-IvIce --lith rcsnec-t to
congressional k-.-_ar.nqs. -trste tJ,
is "ft=-nishing *.-I oth of
"-,;cli In- su to 3,)
V
4:
411 ..,,ch pro


fur:-d3;h oro7ce=-tv and -: --Uonal z-#,-.1 nonpc--sonal ,--ervic--s to
furnisiling Of n-ro- --rt-r and
t iis sect-ion shalill ani2 cona i n.- c ln d i n q Tr e ilnlo b -1 1A t -,,r :! E -- h;:
-e and thx- ead of t'-e ag-anc,,,
% L.
corned Ccc--a a-- zronriat.--.

it clear cr-,;oted
abc-7e a basiz; for
ce o f t-Ae co:it of or-avidi.n<1 bot- o- legal
to t;-e -r-:-!Samt and former e-z 02
the Po ital Service. ;r rdAnazily, of
r t JY 1-, 3 ;_. i C t2 -F U -?-I i I C s c 0 11 n ,] t I'l -- aZ: t -) r
are C----,)loveeS CA, t h. e .%-'--a t,

c- levant: s ----7iccs arbv t.le 0'a 1,
for tli an






56





B C4'ntral lntelli- :ence A -'.CrY

!;8 TI.S.C. 403f (a) authorizes t1te, C1.A to trAnsfe- to other Cover.-meait agonCie3 '3Uah. -SualS aS MaV
approved by t7tje 0.=f 4 -e o f Marsacremen-4: a nn uI t
-I,e nre-4:orimance o-F th.:- functions or ac1 i.: ur 50 i.-;. S. C. 403 and. '0 51
'ities authox, "ad ,d-e.L ft
-T'1-3e functions and activit-Les include correlating
-and evaluating intelligence reiaEinq 11:o nationala l
SeCUr4tv, per4F rring "adl'tional.*servicns of cowmamo.
concern't for other intelligence agencies, and narfor-miLig zudh other f unctions relating to intc-Iligence
as tl!% -3 National Securilty gColmcil may directAl/

., anotherr pertinent sectim is 50 VI.S.'C. 403jp
Which SICa-14-es t'haf%:7

(a) a" Other prmrisions
of law. ..hs kqency by
., sim made available to
a pTropriation. or otherwise may 11.e e>--mended for purposes necessary to carxV out- it:S functions,
includi'nq

(1) personal services

(2) supplies, equJ-;xnnnt_-, and' and contractual Gervices oi -hexwiae Ftuthorized by law and regulations. w-heen ar rove.-I
by t1he Director.

(T*) The sv=3 madea available tto Pgency rky be expended vrithout ringard *-,-o the -rovisians
of law and requlation3 re'Lating to tche sxnenditure oif Government funds.

witli regard to the -present crues,".-zon, them-,, the ,04ncr sections
issue urider the f oreq is -.xether
the orovision of counsel i,--i the prascmht Cir C*-wt:sqtzmce9 is one oAf! the C*ZA Is functions, or a purpose -Mcessa,_-7
-for the ner-fo=uance of its functions. Absent anv statuton provision r-smairing greate.6 epecii:11zit-Or
of reference to services, it could consider-- 1 inter-agen
ed to cc,.;..f- t-tithin the genaxa 1.0 AM
ment statute r 31 S C. 61-3 G (a) -%Ahich roacs a,3 Alollows


50; uv..S%.C. 403(1-21of advisory co-mitte.ma. and %-,.as no possib.1- rr lewi;-,Ce







57










C e
an t i 5 -r-,,i -z", )v t, 1
1= !E-n t

ovc_= ent io to 2o, -ay I a o t
ZUC."l
"or
s z c 1 1
:)e in a t -,*,--,n --c



1 'A lt-n r" I L
Z-Orvic!E. for Coat O-E -rot1--cItinc t..--e I t: Z r



or z 0 cr .3 n



has
the Ii t!

of ccr.tr.-Ict
-I s Ow r.



of litigati->r i,- t 1 T C. Sa3l u*:,I.**2_ Icv I -__.2 9a/





t i. td t--:,:t an




ft:3 o n c x:-s i -,_:I
cn
.0 V 1 .0 0 ,3 r
-1 7) 73 i Z i v -I

9a/ 28 U.S.C. 516






58





or E!nnAo 'Fee "Oreo' is a
re-1:.e= the -mat-ter to tie rt-r:wartmcbn. o,-It-is on 't1he I-asis o-a. vasse statutes i--',Iat t?,-a 'ncInart. rlemt hzis traditionally aZsertsd th-e aenera 'axclusivene-39 of its authlor44ty 4--o retnresent redorai empiqvr-es in CiVil a-f-jonS related -1- 4-' '

certain'-.1nus-aal sit-ctatioiis in Auaparitzment- of- Jusltice has failed. oa' refused to defend C vil actions against ?edleral of-icers relatincr to theIr of f icial duties Vlm Cc "DtAoller Gemeral has Arnled* that agency appropriations c.=n 'Ibe Used. to nay t-he cost of n.rivate attorna-vs. !I/ In our view those
4: 0 %lb 4- -CU
uecls,=5 as is d _1,%
even 11- tJI_ I t'hey C.
"Y app-Licable -- have no b-ar:Lng considered generall- -.0tl pon the present case, Vetere thte Denartrzt.-nt is providing represent ion --- albeit by means Of attorneys.

it to us that tl,.--! OS1--atutes qoverring
ICIA are not diff-a-rent 3noug1%. fro7m those re.Lat-ing to other de-vaxtments ar-d- agencies, nor are the present circu-stances sufficientiv ot-h-er cases, to support a-it iz: .,Captian from th e .*eaeral rule. Sin,^ tL* e CT 'has no
to conduct or contract foir repre senate ion. In tion,, it ca--mat reiz:h"-1-se Der)artment A!43 r -tl- -at a._+-'Vjtv. vicved con-7arsely 4. t'
CZI t,.0 luty --'a de
defense coun3el JE:Or tb.e crnntlovees aT--.d oi- the CIA belongs exclusivelIT to t1t44.3 and mm5t ba- suppoop tad 4. ricM I. tes f-;mrJS

A distinction can hpi mma4e Obiatv-en the C' civil actionS, inst dlscl 'Ssed' zmd
-'C O-e Con-r- -.53ion--l COr'_--d'ttee*. 51.nCe" lu-111ab las IC
quoted statutes do nol: a-mly 1--in Guch activity, the CIPOS g-ftneral R-Jthorizationz On-port 4.1.Z. -t.%_coraipq1ye to t h ---- oAent fimme_3 appro'V -'S3I
4-al.t.eed to -CIA ara avaA-ax b a i t ould
to sse!c and receive for thot5e .4:!:-_e5 04!
rkvat_^ attorneys b-,7 tiAs nepart-n-4al- wllicll
:>I_: -- S
--A



U t

.5 3 3".1 (IIt- k' i-'
1975,






59


-14


C. Pedt~ral 3ureau of Tnvcst1-irqatio

i'e$-site the fact that t-he FD1 is part of the
Lepart~ent of Justice, t' e question of ezbre
M~ent turns upon the statutory rovis3io7is relating
sp~ecifically to FB'I authority and a- r-Orito.s
54 Co.n Gen. 624 (1975).

As discussed above, 31 6.C ~36 (a) rovi ces
A.or the inter- or in tra- depart-m -9n1t purchase of goods
and services. A-- also discussed, howeveLr, .-hen this -orovision 13 to be us~ed 'or the purc 7ase of legal services in connection with litigation it
rxcj~ires ar. authorization or an an-pro priation w~hich.
i*s seiically and explici tly directed to that
point-. Our examination of the authorization and
appropriations statutes o-E the! A. eels x
press reference to the retention or compensation o' counsel. Accordingly, we find no basis, for obtaining reim~bursement of defense attorneys' fees from
the Bureau. 12/

For the rn'asons discuzsed. in thie portion of
this section dealing~ with tlle C16-, we blvedifferen~t treatment can be giwvn to attorneys' ECees
attributable to services fIi-rn-i-4-2 in connection
with congressional inquirieS. 7-imbursenent of
tlie De-artr'ent for such costs inciredc on behalf
OA. present or former nmp ~iloy ees ::a lbs obtained
front~ the Bureau.













;- 1US..68,,hich deals .th ac co u:- r -q -a 0 stU
iEfnt:3 -f-or !-,+rvic.?s ch;arqtza*&-le to -4'-- t>~ l-- cr.(- a1+-ionl
d I~parti-ieflt (3qteco of Jlctir n,-~ e
es ;sio ofe hi oc'1






60



Exhibit 5: Memorandum of Rex E. Lee of April 16, 1976 with
three attachments'

OPTIONAL FORM NO. to
JU Ly 1973 EDITION
GsA rPMR t41 CFRJ 101.6
UNITED STATES GOVERNMENT

Memorandum

TO THE DEPUTY ATTORNEY GENERAL DAE April 16, 1976


Assistant Attorney General LTSrtny
Civil Division
SUBJECT: Comments on Draft Regulations Regarding Representation.



As you are aware, we are in fundamental agreement
with the proposal to standardize the civil representation
of federal employees by moving all civil cases to the Civil Division and by publishing appropriate regulations. I have
been informed orally that the Criminal Division has some
areas of civil representation which it wishes to retain. I
assume that Criminal will proceed to identify those areas and
justify their retention so that we can bring the matter to a
final resolution.

As to the creation of uniform regulations, I think
your staff has made a good start. We have a number of
relatively minor suggestions on-language and organization
which are indicated on the attached amended draft. My staff
wfill make themselves available to discuss the -merits of
those suggestions. I would Like to li-mit my own comments to
some ,major areas where we should appreciate the nature and
scope of the changes which have been suggested.

1. The proposed regulations would permit the Civil
Division to represent an employee who is under investigation by the Criminal Division as Long as he does not have "target"
status. This standard presents a number of questions, some practical and others more theoretical. The first practical
question relates to the usability of the term "target."
"Target" is nowhere defined i.n the regulations and Previous
discussions with the Criminal Division revealed difficulties
in defining the term. There also appear to have been problems in identifying "targets" in the civil representation cases now
underway. I suggest that we seek guidance from the Criminal
Division on an appropriate definition of "target" and its
usability in separating investigated defendants for- repre-sentation purposes. Perhaps we can test its utility by








Buy U.S. Savings B-:z)ds Regular4; on rbc Payro!l Savings~z


I Received by the subcommittee as attachment to Babcock letter of December 16, 1977 (exhibit 28).







61



-2



having the Criminal Division apply it to the representation cases now underway in order to determine how many employees would require private counsel under this proposal.

2. A second practical issue is the real efficacy of this standard in limiting the need for private counsel. By restricting the use of private counsel to targeted employees, the draft proposal attempts to limit the financial burden of the Department. However, this admirable goal will be frustrated unless we alter another of our past representation decisions. Typically, defendants in civil cases are divided into three groups: (1) employees under investigation,
(2) employees cleared of any wrongdoing, and (3) a possible third group of "targets." Afiter discussions between the Civil and Criminal Divisions, we concluded some time ago that providing private representation to the employees under investigation while representing the cleared employees with Justice Department attor-neys would publicly identify the "good guys" and the "bad."

There was substantial agreement that this identificatio would not only prejudice the civil litigation biit possibly undermine any subsequent c-iininal indictment. Unless we change this policy, the presence of only one "target" within any group of defendants will trigger the necessity to provide private counsel for all. Thus, the concept of "target," like the concept of "employees u-nder investigation" (which we presently use), may not result in any actual lessening of our private counsel fee burdens.

3. The theoretical problem with the "target" standard comes out of the decision in the Democratic National Committee, et al. v. James McCord, et al., Civil Action No. 1233-72 August 9, 1972).i That decision may be read to hold broadly that civil representation is improper where "the Department of Justice is otherwise engaged, through other employees, in a criminal investigation the subject matter of which is akin to the gravamen of the civil action." Without supporting the merits of this opinion, it seems to me that because of its existence, the Civil Division would proceed at some peril to represent government employees who (while not targets) are under investigation by the Criminal Division on the same subject matter as the civil suit. In this posture, I would support submission of the representation guidelines to the American Bar Association for their prior approval. (AlternativE we could proceed as we do now to retain private counsel for all~ those under investigation irrespective of whether or not they are targets.)


~See attachment to exhibit 28 at p. 409.






62


3


4. If we are to avoid censure when we represent employees under criminal investigation, we must take all practical steps to limit the possibility of actual conflicts of interest. A first step might be to define target in terms of "probability of indictment" so as to cull out all 6ases where the employee is likely to face criminal charges.
-Secondly, we should do all that we can to separate the Justice Department's civil and criminal functions with respect to these defendants. A necessary step reflected in the draft is the imposition of a clear-attorney-client privilege protecting any incriminating information received by the Justice Department attorney.

However, avoidance of the fact and appearance of conflict may require further effort's to insulate the representing attorney from the Justice Department's criminal functions. Many of our representation cases are handled by Assistant United States Attorneys who are engaged in both criminal prosecution and civil litigation. I would think it improper for such an Assistant United States Attorney to handle a civil case where the defendant is under criminal investigation, and I would recommend that all such cases be handled directly out of the Civil Division. 4

In the great bulk of civil representation cases where there is no pending investigation, civil representation can continue to be provided through Assistant United States Attorney., We should realize that should a later criminal investigation arise on the same subject matter, any prosecution might have to proceed through a special prosecutor to avoid the appearance of impropriety. We would expect such instances to be extremely few in number.

At the other end of the scale, conflict charges could be based upon the ultimate supervision of Civil Division .attorneys by the Attorney General and the Deputy Attorney General. Arguably, avoidance of any hint of conflict would require that supervision of these cases and attorneys be contained completely within the Civil Division without any formal or informal supervision by higher Justice Department officials who may be otherwise involved in the criminal prosecution process. However, in my view, the imposition of the






63


4



attorney-client privilege and the use of a properly defined "target" standard will so reduce the potential for actual conflict of interest as to make this step unnecessary. _/

5. Section 15.4(f) of the draft provides that
where there are conflicts between defendants, the employees can be separated into groups and each group provided with separate representation by a Civil Division attorney. Subsection (f) thus seems to anticipate that different attorneys in the same division will represent conflicting interests. This seems quite analogous to separate members of a law firm representing conflicting parties in the same lawsuit -- a situation which we would all agree to be contrary to the canons of ethics. Thus, I would conclude that if the government employees have factual or legal conflicts, the employees would by necessity require representation by outside counsel.

6. The proposed guidelines also anticipate that the Civil Division attorney will undertake the full range of litigation responsibilities that would'be expected from a private lawyer. As articulated, this would include raising arguments regardless of their sy=etry with the interests of the United States. Consistent with this theory, we Aight expect these attorneys to take appeals and seek Supreme Court review independently of United States' interests.

We represent individual government employees in
hundreds of civil cases at any one time. Our representation in these cases has, since the institution of this Division, been limited by the interests of the United States, both as to legal arguments and appeals. In most cases, we make a determination to consider whether particular defenses, arguments or positions will conflict with the general position of the United States. In the great majority of instances there is




The extent to which the disqualification of one member of
a lawyering institution may disqualify the entire body has generated enormous controversy. Thus far the conflict controversy has focused on private law firms, but the principles involved arguably may be applicable to government institutions as well. See, "The Ethics Squeeze on Ex-Government Lawyers," Business Week, February 23, 1976 (Attachment A) and an excerpt from Kesselhauk-- v. United States, Ct.Cl. Tr. Div., March 26, 1976 (Attachment






64


5



no conflict; in a few instances where there is conflict, we advise the government employee of his right to obtain private counsel at his own expense to raise other issues or take appeals. (The recent Zwiebon litigation in the Supreme Court is the only exception to this practice of which I am aware.)

The change now proposed not only raises serious legal questions but would have enormous practical implications !or the operation of this Division. I am not at all sure that the Justice Department possesses the legal authority to authorize its attorneys to advance legal arguments and take appeals which are contrary to the United States' interests. (Should we undertake this policy, we can expect, for example, that within the next year Justice'Department attorneys will be arguing-for the legality of all COINTELPRO programs.) There may also be legal questions concerning the authority of Justice Department attorneys to seek appeals and Supreme Court review for governmental defendants absent the approval of the Solicitor General. (I suggest we seek Bob Bork's comments regarding this question.)

Finally, there is a practical concern which militates Pjainst this change. If we become a kind of private counsel raising arguments which may be adverse to the interests of the United States, the attorneys in the Department of Justice may be considered by the courts not to be under the shield of the ,somewhat eroded Barr v. Matter exemption from civil monetary liability for any malpraH ie claims of disgruntled clients. The Department of Justice may have to provide and pay for malpractice insurance policies for Department of Justice attorneys to cover potential liability claims. On balance, I conclude that while we should seek to represent as many government employees as possible and to avoid the retention of private counsel, we should not alter our traditional representational practices to include permitting departmental lawyers for Individual defendants to take legal positions which are oppose to the interests of the United States.

I recognize that the thrust of my comments at-our
last meeting favored a system under which the responsibility of the individual Department of Justice lawyer ran solely to his individual client. The most important aspect of such a system is that it frees the individual lawyer from the responsibility of deli.verinq"Vo the Criminal Division incriminating






65


6



information received by the lawyer during the course of his representation; as to that aspect of the lawyer's responsibility, I have not changed my view. Further reflection on the other aspect of the individual lawyer's relationship with
the Department and his individual client -- whether the lawyer should be free to take a legal position inconsistent with the Department's position -- leads me to conclude that in this respect the lawyer should continue to be subject to traditional Department of Justice control and supervision.

7. We would not favor the paragraphs numbered
15.4(i) and 15.5(d), which preclude employees from asserting the invalidity of representation regulations. We doubt the necessity of such an agreement, and we see in it the infirmities of any waiver requirement. Specifically, I do not think we should ask a person to waive the possible invalidity of governmental action, particularly where it involves legal ethics and professional responsibility.


Conclusion


In general, we deal with the problem of the extent
to which we should separate and insulate the Civil representation.function from the overall Justice Department setting in which the individual Department lawyer operates. The ultimate in separateness and insulation would exist if (a) the individual lawyer were freed from his obligation to inform the Criminal Division of incriminating evidence acquired during the course of his investigation; (b) all Civil representation cases were assigned to the Civil Division; (c) all supervisory authority over this aspect of Civil Division lawyers' work were vested finally in the Assistant Attorney General in charge of the Civil Division, and (d) lawyers representing individual civil defendants were free to advance legal arguments, notwithstanding their impact on the total interests of the United States.

On reflection, and on balance, however, I feel that it is not in our interest to go that far. The most important problem is to ensure the sanctity of information that comes to the lawyer in the lawyer/client relation-ship. This, plus






66



-7



the allocation of all civil representation cases in the Civil Division can be accomplished with relatively little adverse
impact to the Department. I do not recommend that we take the other two steps.






Attachmnents

cc: Mr. Togoc D. West, Jr.
Ms. Mary E. Wagner Mr. Bruce A. Baird
Mr. Richard L. ThornburghMr. Robert Keuch







67




[Attachment "A" to Rex Lee memo of April 16, 1976 (exhibit 5):

Business Week, Feb. 23, 1976.]


LEGAL AFFAIRS


The ethics squeeze on ex-government lawyers



Lawyers hold a high proportion of the attedto take a e that it would o:htop jobs in the federal government. erws be barred froe taking as long
And when those lawyers leave govern- as the government does not object Alment service, a lot of them naturally though it has yet to publish its formal
gravitate to the Wash'ngton law firms opinion on the question, the ABA is gothat specialize in representing cherts ing along with this consent concept.
before their former agencies The re- However, the individual lawyer must
suit is a chronic ethical dilemma that not dsus it with other partners or
has bedeviled generations of Washin share in th profits generated.
ton attorneys. Jut last month the U. S Court o
Now the new concern for profes- App als in San Francisco we: ei
sional ethics may transfer the pr- Im further than Cutler when opposing .tto the law firms themselve, forcing a toimeys tried to disqually a lawyer
major change in the relatinvhp be- cau: : hi former private law firm
teen large corporation, and t: r wor The .liawr now works for a Sa!!
blue-chip counsel A stnng nt r ading Lak City frn. representing gasoline
b the District of Colmbia liar of it d -r in a broad-based ant itru t I:s
at I gzrS., 0)jo o C opn'2
cients-some of lng starndrng-right th defendants tried to remove the n
in the middle of a ase On a compi- tire firm front the case, arguing that
cated matter, such a. a major antitru t Ithe la ver had previously performed c!e. it could ake a new firr a, leat a lega w rk for each of them. The ap*ear to work into th htigai n pul judgea agreed that the individ .
The problem arises out of the Iomph- lawyer co2d kept off the ce but yecatad skeir, of cc::-c ori fused t disluali the firm
and individual agency rules that define Another try Th t.'s appan t cha,
just how far former civil servants can of hear:. Le end the lawyers
go in representing private interests he- Ethics comme ree Craian Freedmar The problem, however, because the District fore their former agencies D C code ,il have nationa mpact of Cotumbar is about to publish
The general rule prohibits former own ethical ruling on the same quesfederal employees from ever appearing says Lewis Van Dusen. chairman of tion In its current draft, it takes the before their former agency in a matter the ABA ethics committee tough position that the AB. rejectedin which they "personally and substan- But other firms were also worked In Advates of a softer position are lobtially" participated and requires them firms such as New York labor iaw spe- bying the oial committee, which will to wait one year before appearing in clists Vedder, Pr.e, Kaufman, consid r the question later this month.
connection with any other matter un- Kammhoiz & Dai, the rule might have I don't know how w. ill come out, der their general supervision pending jeopardized 30Q matters says cm-mittei chairman Monroe H
while they were in office Several fed- The Issue 0:6 to a head la cr Freedan f .rnerly a law professor at
eral agencies are even tougher The when the t: for example, has a fIat ban on any for- But unlike the AA's original ruling,
mer employee going to work in any ca- The D. C. bar's current dratt the current D. C bar opinion was made
pacity for any maker of consumer opinion takes the tough intentional.% with the plight of former
goods for one year. Beyond govern- position the ABA rejected government lawyers firmly in mind. If
ment rules, courts and agencies usually the Washington bar does maintain its
require lawyers to follow the American ing a former Navy Dept official could ground, the rule would have national Bar Assn.'s code of ethics handle a contract di-pute ith that ser- impact because it might cover appearHard hit. Two years ago the .AB forbade ice Interpreting the rule iterally at ances by out-of-town lawyers. all members of a law firm to hande a firt the co1n.tte; ad no. ut an- Settling the law firms' problems will matter that any of their colleagues at other pronn: Washington firm, not help to clarify the currently hapthe firm was ethically prohibited from Wilmer, Cutler & P .-rng joined in hazard federal conflict-of-interest working on. The bar association had protest ith Coington & Burling and rues. But clearer guidelines may be on private conflicts of interest in mind s.ch government al.ac as the Intern.l the wa, The Ford White House may and did not give much thought to the Revenue Sernce. the Secuntes & Ex- use a Congressional committee's data impact on former government lawyers. change Commission, and particularly to revise rules last promulgated by For a firm such as Covington & Bur- AntInin Sca!ia. head of the Jusice President Johnson. The investigations ling in Washington, with a roster that Dept.'s Oice of Legal Counsel "We, subcommittee of the House Commerce includes former antitrust chief Edwin with the support of Mr Scalia, were Committee has asked nine regulatory M. Zimmermpn, former Treasury Ln- able to pn7's.:ub the committee," sayS agencies where their commissioners der Secretary Edwin S. Cohen, and for- Lloyd N Cutler mslly worked before and after their governmer Food & Drug Administration gen- Their argument is that since a party ment jobs and is now compiling results eral counsel Peter B. Hutt, the rule had ta a la suit may always waive other of a survey sent to 590 former high ofthe potential for disaster. "I guess it's disy4Jqual1at-!.nu of an ppning attor- fcils. The goal- to pinpoint the extent a problem all the time in Washington," ney, the law firm itself ought to be per- of the "revolving door" problem.

82 BUSINESS WEEK: February 23, 1976 LEGAL AFFAIRS












21-221 0 78 6






68



[Attachment "B" to Rex Lee memo of April 16, 1976 (exhibit 5):
Excerpt from Kesselhaut v. United States (March 16, 1976).]

1-30

Mr. Prothro gave his subordinates policy guidance and rea

their correspondence nightly. He personally signed one letter on the subject. When he was scheduled to meet one of the Kesselhauts at a conference in Washington--the only time, so far as we know that either of the Kesselhauts were to come to Washington--the meeting had to be cancelled because he, Mr. Prothro, was to be out of the city. The indispensability of-his presence at the meeting was recognition that he was the responsible officer, perhaps to do the work through subordinates,.but to be, himself, responsible at the agency.

Conclusion as to DR 9-1.01(B). All the conditions-are thus

met for the application of DR 9-101() todisqualifyMr. Prothro. Ie was a "public employee." He has accepted "private 'employment" in a "matter" in which he had as a .public employee a "substantial responsibility." ..

'Imputation of the Disqualification to the Partnershio. A

question preliminary to any imputation to the firm representing the plaintiffs 'of the personal disqualification of Mr. Prothro is, necessarily, whether Mr. Prothro is a partner in the firm. It is
: I
held that he is. He is listed as such in Mlartindale-Hubbell, the standard law directory, and he states in his affidavit that he has the power to act for and bind the firm. His private and internal agreement that he is not to share in the firm's income but is to be paid an agreed rate for such hours of work as he






69



-31

chooses to devote to the firm's business does not undo his status of a partner.

The principle that the disqualification of one partner dis-qualifies the entire firm from any employment was followed under former Canon 36. Formal Opinions No. 33 (1931), 49 (1931), ABA, Opinions on Professional Ethics (1967) 277, 290. The courts, too, have uniformly held the disqualification of one partner to dis- qualify his partners: "All authorities agree that all mei bers of a partnership are barred from participating in a case from which one partner is disqualified." Laskey Bros. of West Virginia v. Warner Bros. Pictures, Inc., 224 F.2d 824, 826-27 (2d Cir. 1955). S( also: .morican Can Co. v. C itru. Fee? Co., 436 F.2d 1125, 1128-29 (5th Cir. 1971); W. E. Bassett Cy. v. H. C. Coo: Co., 201 F. Supp. 821 (D. Conn.), aff'd. per curiam 302 F.2d 268 (2d Cir. 1962); Richardson v. Hamilton Int'l Corn., suDora, 469 F.2d at 1385-86; H. S. Drinker, Legal Ethics, suora, 105.

The principle was incorporated into the Code of Professional

Responsibility, as adopted in 1970, in DR 5-105(D), which disqualific partners of a lawyer disqualified by the conflicting interests of

another client. In 1974, however, DR 5-105(D) was amended to provide for disqualification of partners and associates in the firm

whenever a lawyer was disqualified under a Disciplinary Rule:






70


-32

DR 5-105(D) If a lawyer is required to decline employment or to withdraw from employment under a Disciplinary Rule, no partner, or associate, or any other
lawyer affiliated with him or his firm, may accept or continue such
-employment.

DR 5-105(D) on its face rakes no exceptions, and thus codifies the rule of the opinions and cases earlier described.

SFormal Opinion 342 of November 24, 1975, supra, however takes another view. An unqualified application of DR 9-101(B) in every case, the opinion holds, would not serve, and in some cases might even thwart, the purposes of the introduction of the concept of disqualification for "substantial responsibility," designed "to

inhibit government recruitment as little as possible and enhance the opportunity for all.litigantr- to obtain competent counsel of their own choosing, particularly in specialized areas." For instance, the opinion points but, a disqualified lawyer may join a firm in which a good deal of work had already been done on a matter handled by the disqualified partner in his government practice, ot the client may have relied on the. firm to represent him in a matter new to the firm, but "previous"'to the disqualified

lawyer.

The policies served by DR 9-101(B)--preventing Government lawyers from dealing with gove-:nment matters so as to encourage post-government private employment on those same matters, and the policy of avoiding the appearance of impropriety can be accomplish






71


-33

it is said, by a less stringent application of DR 5-105(D) to exempt from disqualification the firm of the partner, himself disqualified, who has been "screened to the satisfaction of the government agency concerned, from participation in the work and compensation of the firm" on the matter giving rise to the disqualification.

-Formal Opinion 342 concludes on this subject as follows:

Accordingly, it is our opinion that whenever
the government agency is satisfied that the
screening measures will effectively isolate the
individual lawyer from participating in the
particular matter and sharing in the fees attributable to it, and that there is no appearance of significant impropriety affecting the interests of the government, the government m.ay waive the disqualification of the firm under DR 5-105(D).

The Committee on Legal Ethics of The District of Columbia Bar, in a draft opinion on a particular case recently published with a request for comment, proposes to rule, without mention of exceptions or waivers, that the amended DR 5-105(D) is applicable to cases of ex-Government lawyers disqualified under DR 9-101(B). The case was not unlike the present case; it involved a partner of a former federal la%4yer who was held disqualified from representing a contractor with his former agency in the renewal of a contract in connection with whose making the federal lawyer had had substantial .13/
responsibility. Bar Report,.vol, 3, no. 1) Fall 1975.



13/ The draft opinion states, on this subject, as follows:

"That broader wording [of DR 5-105(D) disqualifying partners, associates and affiliated






72


-34

There is no need in the present case to choose between the

two views--disqualification of the firm on application of DR 5-105(D

according to its terms or the exemption from disqualification of

the firm on the screening of the partner and with the waiver by

the Government. The Government in its papers filed on the motion

explicitly declines to waive the disqualification of the firm.



13(cant 'd) 'o

lawyers, as compared with the disqualification of
partners in Formal Opinion 33] has not been
incorporated in the District of Columbia's version of DR 5-105(D), and it might constitute too sweeping a generalization as applied to every provision of the Code of Professional Responsibility. However, the principal does appear to be a sotnd one
as applied to DR 9-101(B), "because the primary
interest of that rule is to prevent impropriety or the appearance of impropriety on the part of
lawyers who are public. officials. A second stated
purpose of DR 9-101(B) (e.g. Formal Opinion 134)
is. to prevent the abuse of the lawyer/client
privilege as applied to public agencies and their
attorneys.

"Those purposes would be poorly served if. a
public lawyer, while forbidden to take on the same legal matter once he has left-public employment, was nonetheless free (or appeared to
be free) to throw the matter to his partner
and tell his partner how to handle it. While
the inquiry from the firm of L&M indicates (
extreme caution and circumspection, the disciplinary rule is as much intended to avoid inferences
of impropriety as genuine impropriety. Thus, the heading of Canon 9 of the Code states, 'A
Lawyer Should Avoid Even the Appearance of
Professional Impropriety.'"






73


The Government's papers state that "the Government is definitely not satisfied that there is no appearance of significant impropriety affecting its interests--just the contrary situation exists here."

This statement by the Department of Justice may end the

matter, but it being the duty of the court to enforce the Code in cases in the court, I must add that I would not accept a waiver Were it offered. In my opinion, continued representation of the plaintiffs by the firm would in the circumstances of the case damage the public confidence in the integrity of government legal service and the judicial process, and particularly in the judicial process by which claims against the United States are adjudicated. The public--citizens, press and bar--N-ould understandably find a significant impropriety in the sight of a general counsel of a government agency joining a law firm which thereafter brought suit on a contract with that agency allegedly implied from facts and circumstances over Which the ex-general counsel presided during his tenure in office. One of the primary purposes of Canon 9 is to avoid giving the appearance that a Government employee is taking advantage of information previously obtained. General Motors Corp.

V. City of New York, supra, 501 F.2d at 648-52; Handelman v. Weise, 368 F. Supp. 258, 264 (S.D.N.Y. 1973). It would surely seem, without regard to any lack of truth, that the ex-general counsel had

switched sides and was taking advantage of information gained -n the government's service; that his firm. had been retained because






74


-36

of his wide knowledge of agency secrets or at least private matters,

or, worse, that he may have.allowed or influenced his subordinates

to deal with the present suitors in such a manner as to ground a

future' lawsuit in which he might be employed. It will be surmised .cynically perhaps but inevitably that when the present plaintiffs, the Kesselhauts, sought out Mr. Prothro to represent them, and

when he arranged for his firm to accept the retainer, it was with the motive of taking advantage of Mr. Prothro's knowledge of the

ins and outs of FHA ways and affairs generally and specifically the background of the facts of this new lawsuit. No amount of screenin(

of Mr. Prothro from the case or refusal of compensation could be

expected to overcome the appearance of such evil. Cf. Hull v.

Celanese Corp., supra, 513 F.2d at 571-72; W. E. Bassett Co. v. SH. C. Cook Co., supra, 201 F. Supp.*at 825.

The Claim of Hardship and Laches. The plaintiffs claim that

their counsel has worked on the case since early 1973 and much of the value of the work, it is implied, will be lost if the firm is disqualified. In a letter attached to papers filed on the motion

the Messrs. Kesselhaut emphasize the hardship which will be visited

on them by disqualification of their counsel at this late date.

It is also claimed that the Government. having delayed the

making of this motion should be barred by laches.

There is authority that neither hardship nor laches may overCome application of the Canons. Consolidated Theatres, Inc. V.










[Attachment to Rex Lee memo of April 16, 1976 (exhibit 5): Draft
of Attorney General's order.]

DRAFT

sued in t he4 indi-vidual capacities 115.4 Representation of Federal Employees By Department

of Justice Attorneys in Civil, Congressional, and State

Criminal Proceedings

B. Representation by Department of Justice Attorneys is not

available to a Federal employee whenever:

1. the representation is in connection with a Federal

criminal proceed ng in which the employee is a

defendant;

2. the employee is a target of a Federal criminal
on the same subject matter
invcstigatieraa the time representation is requested;

3. the act or acts with regard to which the employee

desires representation do not reasonably appear to
outer cer:-.eter of his official duties
have been per or> : within thea,.rii:.x .xx

xc\pdoycs with the Federal government.

A. Under the procedures set forth beiow, a Federal employee

(herein defined to include former employees) may be repreose:n by Justice Department attorneys in civil, congressional, and
4(B) below.
state criminal proceedings not covered by 15.4 X:&
1
(a) WThen an employee believes he is entitled to represent

tion by the Department of Justice in a proceeding, he must submit a request for that representation, togeth

with all process and pleadings served upon him, to

his iTmnediate supervisor or whoever is designated by the head of his department or agency, forthwith. The






76



subsequently
employee's employing Federal agency shall submit
in a timely manner statement of position
to the Civil Divisiowla report containing its4findings,

with all supporting data, at to whether the employee was acting within the scope of his office or employAIn emergency situations ti
ment with the Federal Government.lCivil Division can initiat
2 representation after cacmunication by telephone with the employing*
(N) Upon receipt of the agency's notification of request for counsel, the Civil Division will determine whether

the employee's actions reasonably appear to have been
I outer perimeter of his official duties.performed within the,$tqe o& bd= ocfd am amp)cam

If a negative determination is made, Civil Division

shall inform the employee that no representation will

be provided.
.3
h() Were there appears to exist the possibility of a relating to the'same subject matter for which representation
federal criminal investigation or indictment4,the .ugE

Civil Division will contact a designated official in

the Criminal Division for a determination whether the

employee is either a target of a Federal criminal

investigation or a defendant in a federal criminal ..case. Inappropriate instances, Civil Rights and
Tax Divisions should be contacted for a similar determination.
4
(9) If the Criminal, Civil Rights or Tax Divisions (hereinafter "Prosecuting Divisions") indicate that the

employee is not the target of a criminal investigatior concerning the act or acts for which he seeks represer station, then representation can be provided. Similar]










if the prosecuting division indicates that there is

an ongoing investigation or an indictment of the

employee, but on a matter other than that for which representation has been requested, then representation can be provided.
5
(6) If the prosecuting division indicates that the employe
and a decision to indict has been made
is the target of a criminal investigationA,Civil

Division will inform the employee that no representation can be provided. If the prosecuting division

indicates that the employee is a target of an investigation, but no decision to indict has been made, a

private attorney can be provided to the employee at

Federal expense under the procedures of 15.5.
or factual
) If conflicts exist between the legalpositions of in the same case
-various employeesA4;:hich =ake it inappropriate for a single attorney to represent them all, the employees

must be separated into as many groups as is necessary

to resolve the confflict problem and each group must be provided with separate representation. Some instances may require that private representation be

,provided to all conflicting grcups and Justice Department attorneys be withdrawn so as not to prejudice

particular defendants. In such situations, the

procedures of 15.5 will apply.






78


7
(g) Once undertaken, representation under this subsection will continue, at the employee's option,

until either all the proceedings, including'appeals, have ended, or the representing Department attorney

is notified by a prosecuting division that a decision has been made to indict the employee for the same act

or acts which resulted in representation. In the

latter case, the representing Department attorney on
withdraw but will
the case willAinsure to the maximum extent possible

that the employee is not prejudiced by the necessary

* change in counsel.
-8
fH9 Justice Department attorneys who represent employees
der this section undertake a full and traditional

attorney-client relationship with the employees, and their responsibility runs to the clients alone. All

legal arguments appropriate to the employee's case

should be raised even if they conflict with Department of Justice or other governmental positions. If representation must be stopped because the Justice DepartmE has decided to indict the employee, any incriminating

information gained by the attorney in the course of representing the employee continues to be subject to

the attorney client privilege. .9
(X) An acceptance of these procedures by the employee and

an agreement not to later assert their invalidity is a pre-condition to representation at government

expense.






79


15.5 Representation of Federal Employees by Private

Counsel at Federal Expense


A. Representation by private counsel at Feder~al expense is not available to a Federal employee:

1. if the representation is in connection with a Federal

criminal proceeding in which it has been decided to seek an indictment of the employee, or in which the

employee is a defendant;

2. if the act or acts with regard to which the employee

desires representation do not reasonably appear to

have been performed within the scope of his office or

employment with the Federal government; or

B.a. uder circumstances x txsec contemplated by

15.4 (e) and (f), the Justice Department will retain
private counsel at federal expense.
(J.) The Departm-ent of Justice will select any private

counsel hired under this regulation. Where
security interests
national/jsecrets may be involved, the Department of Justice will consult with the employing agency as to appropriate and responsible counsel. Asidc from such concerns, due consideration can proper]

be given to requests of the employee that

2 particular counsel be retained.
(bs) Whenever private counsel is selected under'this

regulation, the Department of Justice will enter into a written contract with such counsel, which

will provide that the attorney-client relationship runs between such counsel and the Federal






80


employee, and not to the Department of Justice.

The contract must comply'with all applicable Federal procurement regulations, and contain
references to (3) and (4). below.
(iFederal payments to private counsel for an

employee must cease if that employee is indicted on a federal criminal c harge relating to the act

or acts concerning which representation was

undertaken.

* (~I)An acceptance of these procedures by the employee

* and an agreement by him and his private counsel

not to later assert their invalidity is a precondition to representation at Federal expense.







81



Exhibit 6: Memorandum of Mary E. Wagner and Bruce A. Baird

of June 4, 1976.1



OFFiCE OF T.HZ DEPUTY ATTORNEY GENERAL WASHINGTCN, D.C. 2353a

June 4, 1976


MEMORANDUM FOR: Harold R. Tylor, Jr.
Deputy Attorney General

FROM: Mary E. Wagner and
Bruce A. Baird

SUBJECT: Representation of Government
Employees


Attached are draft regulations to deal with the
captioned area. The Civil Division's memorandum to you
of April 16, 1976, attached, suggested some minor
language changes in our earlier draft regulations arn
discusses soe major areas of concern that must be resolved. We have met with Tom Martin of Civil and
Bob Kcuch of Criminal and believe we have satisfactorily
resolved most of the problems. The issues Civil
raises are listed below, keved to Civil's numbered
paragraphs and accompaned by our proposed resolution
of them. If you approve, we think the ne:t step is
to disseminate the draft for final comments.

There are two areas, in particular, :hich we thin%
you will probably want to focus on. The first is :hecher
all civil representation of federal eploxo hid be
consolidated in the Civil Division. Our :ez
tes; -his, but, as you know, Criminfl Divso :.
The second is ::hther a Decrtment attone.
a federal er'ployee should undertake the resps i to
raise argume.ts that conflict wit! the genr a positin
of the United States. Civil Division belav a
not (see 6 of Civil's memo). We are le sure 5h:: Civil,
as you will see from the discussion at 56 of or :::orandm.

1. The Civil Divisicn cuestions the usefulness of the
word "target" to characterize the degree of suzpirion which
would bar representation :r an emply- by a Depa:::ent
attorney in the first inst ce. The Criminal ri,s:on co:
whose job it will be to apply the standard, hen no proclem in providinC a w:orkable dfinition that can be incror:tee
in the guidelines. Under the definition, an emple;a is thh target of an investigation if there is an eviCance
specifically tying him to a crime. Circ umst2nt al cidnce
is not sufficient. We have incorporated this definition
into the regulation.







1 Received by the subcommittee as part of tab A to Babcock letter of October 4, 1977 (exhibit 26).






82



-22.' The Civil Division points out that our attempt
to limit the need for private counsel by use of the "target" standard will be frustrated unless we change our present practice of-forcing all employees in a group to obtain outside counsel if any of them is a target. The current pradtice is used in order not to prejudicially identify the target.

We think the practice must change and that all
non-targets should be represented. -There may be some minimal prejudice, but it is not legally cognizable prejudice, and our attempt to represent as many employees as possible within the Department would-~fail if we took account of it. While this conclusion is not stated in the regulations, it is a necessary implication of them.

3. The Civil Division wonders how to deal with the
apparent holding in Democratic National Committee v. McCord, Civ. No. 1233-72 (August 9, 1972) (Richey, J.) thatt the Justice Department may not represent someone civilly while it is investigating himcriminally.. The Civil Division
-suggests that we submit our regulations -to the ABA for approval in light of this decision.

We'do.not believe the McCord decision raises insurmountableobstacles. The decision was not appealed and thus has no binding effect even on other D. C. district judges. Since it is not well reasoned, the opinion is unlikely to have even persuasive force. We are thus free to take a contrary position. Additionally, the validi-ty of these regulations will-surely be litigated in any event, and the imprimatur of the ABA, we are afraid, will not be persuasive to a court. ABA approval would also undoubtedly-cause delay.

4. -The Civil Division raises the issue of conflict which arises from the fact that U. ,S. Attorneys presently handle many employee representation cases.. The Civil Division also questions the appropriateness of having the Attorney General and Deputy Attprney General, with their criminal as well as civil oversight functions, at the top of the chain of command in employee representation cases.

As to the U. S. Attorney problem, the regulations
/give-all initial representation authority to the Civil Division. 11 they wish to assign some uncontroversial cases to the U. S. Attorneys' offices,m*e think that is within their administrative discretion as is a resolution of any conflicts which arise therefrom.,


1See attachment to exhibit 28 at p. 409.







83



3



As to the Attorney General and Deputy Attorhey
General oversight problem, we think that in the rare case of an actual conflict, one or the other or both could recuse themselves in favor of a designated delegate. In any other case, the problem is an artificial one which need not be addressed by the regulations.

5. The Civil Division suggests a change in wording which we have agreed to.

6. The Civil Division suggests --in line with traditional practice -- that Justice Department Attorneys should not be allowed to raise argument or take appeals on behalf of government employees when'to do so would contravene the interests of the United States. Further, Civil questions the legal authority to effect a change in that practice, and raises the practical concern that to raise arguments contrary to the interests of the United States may mean an end to the Department's present partial iln-nnity from malpractice claims.

This area presentsothe most difficult problems we have
had to face in drawing up the guidelines. The two of us have not been able to reach a solution with which tie are both comnfortable. The draft guidelines attached include (as paragraphs
(a) (8) and -(a) (9)) provisions which, would allow a raising arguments on behalf of a client even whnthose arguments conflict with the interests of the United States. NWe disagree as to whether this is a desirable policy to implement, even if it should prove feasible -- and current budgetary constraints indicate that it may not be.

The chief obligation of the Department of Justice is to
protect the interests of the United States. To the extent that an individual employee's interests are consistent with those of the United States, the Department has traditionally undertaken to represent such individuals. Under our new, interim policy, and the policy set forth in the draft guidelines, we implicitly recognize that one of the United States' many "interests" -that of providing legal services free of co!7t to those sued because of their ernoioyrnent with the Govern..nent -- justifies the undertaking of a particular legal position even when it may run contrary to the broader "interests" of the United States.



























21-221 U 78 7








4






The problem becomes most acute in a situation where both the United States as well as the individual sued has interests at-stake. The. extent to which the United States has an
-interest in all litigation in which its employees are parties
*is a matter subject to different interpretations. Under the new and (proposed) policy, some interests of the United-States would- not be as well protected as under our longstanding policy. Our ability, for example, to decide which arguments a court should hear and which cases should be appealed would be cut back in consideration of pursual of the best interests of the individual sued. The questions is one of proper balance: whether we ought to provide counsel to protect the interests of Executive Branch employees (to the exclusion of "government interests") when they conflict with these "government interests". While the proposed guidelines come out on the side of the employee's interest, we disagree as to whether this is the better road to-take. Any diminution of our overall-government interests for the sake of advocating any Individual employee's interests is disturbing at best.

*Another problem raised by the proposed guidelines is that a large number of cases would be removed from the Department's usual supervisory and appeals process. Under current practice, the g6vernment puts its full weight behind any case, with one team of lawyers for trial, a second for appeal, and still a third, from the Solicitor General's office, for argument in the Supreme Court. Under the proposed regulations this chain of review and composite of .talents would be nullified. This would have the possible result of seriously eroding Departmental control of issues effecting-broad governmental programs, and entire Department Policy. Again, the varying interests must' be weighed, and we cannot agree on a proper balance. One of us (Mary) believes this to be a fatal flaw in the proposal and must be remedied.

In partial answer to this arimnent, Bruce had drafted a provision (Section 15.4(a) (9)) that no "personal" (i.e., individual) representation is provided in civil suits against employees when money damages are not sought. This would preserve the government's interest in suits seeking only equitable relief and those (like the recent B,,:-,UIn Democratic GrouD case) in which defendants are included for purposes of injunctive r, lief. In such a case,' we would provide personal representatibn to some defendants and "official representation" to others.