In Re: Madison Guaranty Savings & Loan

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed September 30, 2003

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN

(JORDAN FEE APPLICATION)

Division for the Purpose of

Appointing Independent Counsels

Ethics in Government Act of 1978, As Amended

–————

Before: SENTELLE, Presiding, FAY and REAVLEY, Senior

Circuit Judges.

ORDER

This matter coming to be heard and being heard before the

Special Division of the Court upon the application of Vernon

A. Jordan, Jr. for reimbursement of attorneys’ fees and costs

pursuant to section 593(f) of the Ethics in Government Act of

1978, as amended, 28 U.S.C. § 591 et seq. (2000), and it

appearing to the court for the reasons set forth more fully in

the opinion filed contemporaneously herewith, that the peti-

tion is not well taken, it is hereby

ORDERED, ADJUDGED, and DECREED that the peti-

tion of Vernon A. Jordan, Jr. for attorneys’ fees that he

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incurred during the Independent Counsel’s investigation be

denied, save for a single unique item.

PER CURIAM

For the Court:

Mark J. Langer, Clerk

By:

Marilyn R. Sargent

Chief Deputy Clerk

Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed September 30, 2003

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN

(JORDAN FEE APPLICATION)

Division for the Purpose of

Appointing Independent Counsels

Ethics in Government Act of 1978, As Amended

–————

Before: SENTELLE, Presiding, FAY and REAVLEY, Senior

Circuit Judges.

ON APPLICATION FOR ATTORNEYS’ FEES

Opinion of the Special Court filed Per Curiam.

Separate opinion specially concurring in the judgment filed

by Senior Circuit Judge REAVLEY.

Per Curiam: Vernon A. Jordan, Jr., petitions this Court

under section 593(f) of the Ethics in Government Act of 1978,

as amended, 28 U.S.C. §§ 591–599 (2000) (the Act), for reim-

bursement of attorneys’ fees in the amount of $302,719.82,

inclusive of $16,111.30 in expenses allegedly incurred by him

in connection with the investigation conducted by the Inde-

pendent Counsel of Jordan’s alleged involvement in perjury

and subornation of perjury. Because we conclude that Jor-

dan has not carried his burden of showing that the fees would

2

not have been incurred but for the requirements of the Act,

we deny the petition, save for a single unique item.

I. BACKGROUND

In August 1994, upon the petition of then-Attorney General

Janet Reno, this Court appointed an Independent Counsel to

continue the investigation of the Madison Guaranty Savings

and Loan Association theretofore conducted by Reno appoin-

tee regulatory Independent Counsel Robert B. Fisk, Jr. On

January 16, 1998, again upon the application of Attorney

General Reno, this Court ordered the Independent Counsel’s

jurisdiction expanded to include an investigation as to wheth-

er Monica Lewinsky or others had suborned perjury, ob-

structed justice, intimidated witnesses or otherwise violated

federal laws in dealing with witnesses or potential witnesses

in connection with the civil law suit filed by Paula Jones

against William Jefferson Clinton. In the early stages of that

investigation, Lewinsky declined to cooperate with the Office

of Independent Counsel (OIC) although she subsequently

provided substantial evidence of the involvement of then-

President Clinton in the alleged violations of law. Because

the allegations of perjury and obstruction proceeded from

evidence that Clinton had presented false testimony under

oath concerning his relationship with Lewinsky, and because

the OIC had evidence that Clinton may have attempted to

influence Lewinsky and others to perjure themselves in sup-

port of his own perjury, the OIC conducted extensive investi-

gation into the relationship between the President and Lewin-

sky prior to obtaining her cooperation.

In the course of that investigation, the OIC obtained evi-

dence that Jordan, a prominent attorney in Washington, DC,

and friend of President Clinton, who was well connected with

many private corporations, assisted Lewinsky in her efforts to

find a job outside the Clinton administration. Jordan also

arranged for Lewinsky to be represented by another promi-

nent Washington attorney in connection with her subpoena in

the Jones case. The OIC also uncovered evidence that in

January of 1998, Lewinsky accepted a job offer from Revlon;

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that Jordan assisted her in obtaining that job offer; and that

Jordan may have assisted Lewinsky in obtaining the job as a

result of Lewinsky’s willingness to perjure herself regarding

the true nature of her relationship with President Clinton and

in support of Clinton’s own perjured testimony. The OIC

therefore deemed it critical to determine if Jordan had of-

fered Lewinsky assistance in exchange for her perjured testi-

mony.

Ultimately, although the Independent Counsel obtained no

indictments arising out of the Jones v. Clinton obstruction of

justice and perjury investigation, the President was im-

peached, as well as held in contempt by the judge in the

Jones litigation. Further, the Independent Counsel entered

into a bargain with the President whereunder the President

admitted wrongdoing; accepted other non-criminal sanctions;

and the Independent Counsel filed a final report. That final

report expressed the conclusion ‘‘that sufficient evidence ex-

isted to prosecute [President Clinton] and that such evidence

would ‘probably be sufficient to obtain and sustain a convic-

tion TTT by an unbiased trier of fact.’ ’’ Final Report at 41

(quoting United States Attorneys Manual Title 9–27.001–

9–27.050).

In response to the investigation of his alleged connection

with the perjury and obstruction of justice, Jordan retained

legal counsel. He now petitions for the fees incurred in that

representation.

II. ANALYSIS

As we have had frequent occasion to note before, the

Ethics in Government Act, unique in the criminal law struc-

ture of the United States, provides for reimbursement of

attorneys’ fees expended by subjects in defense against an

investigation under the Act. Specifically, 28 U.S.C. § 593(1)

provides:

Upon the request of an individual who is the subject of

an investigation conducted by an independent counsel

pursuant to this chapter, the division of the court may, if

no indictment is brought against such individual pursuant

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to that investigation, award reimbursement for those

reasonable attorneys’ fees incurred by that individual

during that investigation which would not have been

incurred but for the requirements of this chapter.

As we have in the past, we note that because this attorneys’

fee provision ‘‘constitutes a waiver of sovereign immunity it is

to be strictly construed.’’ In Re: Nofziger, 925 F.2d 428, 438

(D.C. Cir., Spec. Div., 1991) (per curiam). Therefore, we are

authorized to award attorney fees only where petitioner has

established the following elements:

(1) he is a ‘‘subject’’ of such investigation;

(2) the fees were incurred ‘‘during’’ the investigation;

(3) the fees would not have been incurred ‘‘but for’’ the

requirements of the Act; and

(4) the fees are ‘‘reasonable.’’

In Re: North (Reagan Fee Application), 94 F.3d 685, 687

(D.C. Cir., Spec. Div., 1996) (citing In Re: North (Cave Fee

Application), 57 F.3d 1117, 1119 (D.C. Cir., Spec. Div., 1995)).

Jordan easily meets the first two requirements of the Act.

Although the Act does not define ‘‘subject’’ we have held

repeatedly that a ‘‘subject is one who, at the time of incurring

the fees involved in the application knew that his conduct was

within the scope [of the investigation] in such a fashion that

the independent counsel might reasonably be expected to

point the finger of accusation at him.’’ In Re: North (Schultz

Fee Application), 8 F.3d 847, 850 (D.C. Cir., Spec. Div., 1993)

(per curiam). Jordan knew early in the investigation that the

Independent Counsel was in possession of audio tapes of

conversations between Lewinsky and another witness in

which Lewinsky attempted to suborn the perjury of the other

witness. Jordan also was aware that the independent counsel

had obtained evidence that Lewinsky had discussed her sub-

poena in Jones v. Clinton with President Clinton and Jordan

and that Jordan was helping Lewinsky find employment.

Furthermore, the Office of the Independent Counsel itself

confirmed Jordan’s status as a subject of the investigation

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with Jordan’s counsel before Jordan appeared at the Grand

Jury convened for the Lewinsky investigation.

As to the ‘‘during’’ element, there is no contention that

Jordan seeks fees incurred outside the period of investigation.

However, like most fee applicants under the Act, petitioner

has not been able to establish that the fees ‘‘would not have

been incurred but for the requirements of [the Ethics in

Government Act].’’ See, e.g., In re: Pierce (Kisner Fee

Application), 178 F.3d 1356, 1358–62 (D.C. Cir., Spec. Div.,

1999). As we have frequently stated, ‘‘the most difficult

element for a fee applicant to establish under the Act is that

the fees ‘would not have been incurred but for the require-

ments of [the Act].’ ’’ In Re: North (Bush Fee Application),

59 F.3d 184, 188 (D.C. Cir., Spec. Div., 1995) (per curiam)

(quoting In Re: North (Dutton Fee Application), 11 F.3d

1075, 1079 (D.C. Cir., Spec. Div., 1996) (per curiam)). This is

true in part because the ‘‘but for’’ test requires a petitioner to

prove a negative and a negative is fraught with speculation.

In large part, however, the establishment of this element is

difficult because the law contemplates that it should be diffi-

cult; that is, that such fees will not be a common thing. See,

e.g., In Re: Olson, 884 F.2d 1415, 1420 (D.C. Cir., Spec. Div.,

1989) (per curiam) (‘‘The Court is admonished to award

reimbursement for attorneys’ fees ‘in only rare instances’ for

‘extraordinary expenses,’ ‘sparingly’ ’’) (quoting S. Rep. No.

97–496, 97th Cong., 2nd Sess. 19 (1982)). Thus we have held

repeatedly that ‘‘the contemplation of the legislation is not

that subjects of independent counsel investigation will be

reimbursed for all legal fees, but only TTT for those legal fees

that would not have been incurred by a similarly situated

subject investigated in the actions of the Act.’’ In re: Madi-

son Guaranty Savings & Loan (Clinton Fee Application),

334 F.3d 1119 (D.C. Cir., Spec. Div., 2003) (per curiam).

We have in the past listed four nonexhaustive circum-

stances sufficient to qualify for attorney fees award in the

face of the ‘‘but for’’ requirement:

1. When the independent counsel’s investigation sub-

stantially constituted duplication of the preliminary in-

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vestigation conducted by the Department of Justice. In

re Olson, 884 F.3d 1415, 1420 (D.C. Cir., Spec. Div., 1989)

(per curiam); In re North (Dutton Fee Application), 11

F.3d at 1080.

2. When the petitioning subject has been ‘‘prejudiced

by the Department of Justice’s failure to comply with the

substantial protective features of the Act.’’ In re Nofzig-

er, 925 F.3d at 438 (citing In re Meese, 907 F.3d 1192

(D.C. Cir., Spec. Div., 1990) (per curiam)).

3. When in the absence of the requirements of the Act

‘‘the case could have been disposed of at an early stage of

the investigation,’’ without subjecting the petitioning sub-

ject to the conditions that led to his incurring the fees

sought. In re Segal (Sagawa Fee Application), 151 F.3d

1085, 1089 (D.C. Cir., Spec. Div., 1998) (per curiam)

(quoting In re Nofziger, 925 F.2d at 438).

4. Not wholly distinct from no. 3, supra, when ‘‘high

public officials [or derivative subjects] were investigated

under the Act in circumstances where private citizens

would not [have been] investigated.’’ In re Nofziger, 935

F.2d at 442; In re North (Dutton Fee Application), 11

F.3d at 1080.

In re Pierce, 190 F.3d 586, 592 (D.C. Cir., Spec. Div., 1999)

(per curiam) (citations omitted).

Jordan’s application does not satisfy any of the four exist-

ing categories nor suggests any new or unique reason why his

case constitutes one of those rare instances in which we

should award counsel fees. Jordan contends that his case

falls within the related exceptions numbered 3 and 4 above

arguing that ‘‘the investigation into the allegations concerning

Mr. Jordan would have been quickly disposed of but for the

requirements of the Act and had Mr. Jordan not been a

prominent Washington attorney and a personal friend of

President Clinton.’’ Jordan then cites and relies on Dutton,

supra, and In re Donovan (Donovan Fee Application), 877

F.2d 982, 990 (D.C. Cir., Spec. Div., 1989) (per curiam).

However, what Jordan neglects is that in both Donovan and

Dutton we were dealing with the question of the status of the

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subject and the intensity and length of the investigation in

terms of whether or not that status influenced an independent

counsel to conduct an investigation that would not have been

conducted but for the Act and whether the requirements of

the Act caused an increase in the length or intensity of the

investigation. Jordan’s argument not only does not fit within

those precedents, it distinguishes those on its face.

Jordan cites his no doubt accurate claim to be a prominent

Washington attorney and a friend of the President as the

reason for the intensity of the investigation, but other than a

conclusory statement, he offers no fashion in which the Act

was a ‘‘but for’’ cause of all or part of the investigation

generating the attorney fees for which he now seeks reim-

bursement. In the Donovan case, the Deputy Attorney

General, by his own testimony, had ‘‘found himself unable to

comply ‘with the written or other established policies of the

Department of Justice with respect to [regular] enforcement

of criminal laws’ against citizens who were not high level

government officials.’’ 877 F.2d at 990. With one finite

exception which will be discussed infra, nothing in Jordan’s

application or the supporting documentation supports the

proposition that the investigation of Jordan was any longer or

more intense than it would have been in the absence of the

requirements of the Act.

The Attorney General when she made the referral, and the

Independent Counsel when he conducted the investigation,

had credible, indeed compelling, evidence that Monica Lewin-

sky had committed perjury and was attempting to suborn

perjury of others. This was accompanied by other evidence

that the President of the United States had committed perju-

ry and had suborned or attempted to suborn others. Evi-

dence developed from this evidence established that Jordan, a

friend of the President, had undertaken extensive efforts to

benefit Lewinsky, the apparent perjurer and suborner of

others. Jordan offers no reason why any prosecutor in the

absence of the Act would not have investigated these serious

allegations of criminal wrongdoing as thoroughly as did the

Independent Counsel. Rather than fall within the precedent

of Donovan, Jordan’s claim parallels those rejected in such

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prior decisions as In re Pierce (Olivas Fee Application), 178

F.3d 1350 (D.C. Cir., Spec. Div., 1999) (per curiam). In

Olivas, and numerous similar cases, we rejected claims paral-

leling those of Jordan stating that ‘‘we cannot hold that the

Attorney General and other investigative authorities would

not have pursued allegations of corruption as deep and wide

spread as those revealed by the Independent Counsel’s inves-

tigation had there been no such Act.’’ Id. at 1355. Similarly

here, we cannot hold that the Attorney General, U.S. Attor-

neys, and other investigative authorities would not have pur-

sued the credible allegations of perjury and subornation in

absence of the Act. Nor can we say that a professional or

politically appointed prosecutor would not have investigated

the implications of an extensive effort by a friend of President

Clinton’s to secure employment for the person who had

perjured herself on his behalf and sought to suborn others to

do so. The Dutton precedent is even further removed. In

that case, the conduct under investigation by the Independent

Counsel was so marginally criminal that we held, as we did in

several parallel cases, that ‘‘but for’’ the requirements of the

Act, no criminal investigation would have been conducted at

all. See also In re Segal (Segal Fee Application), 145 F.3d

1348, 1350 (D.C. Cir., Spec. Div., 1998).

We note that Jordan petitions for $1,215.00 or 2.7 hours for

review of the Independent Counsel’s final report. As we have

noted in many other cases, § 594 of the Act imposes the

requirement that the Independent Counsel ‘‘file a final report

with the Division of the Court, setting forth fully and com-

pletely the description of the work of the Independent Coun-

selTTTT’’ 28 U.S.C. § 594(h)(1)(B). Outside the require-

ments of the Act, federal ‘‘prosecutors do not issue reports.’’

In re North, 16 F.3d 1234, 1238 (D.C. Cir., Spec. Div., 1994).

‘‘Indeed TTT the filing of reports by Independent Counsels is

a complete departure from the authority of a United States

Attorney and is contrary to the practice in federal Grand

Jury investigations.’’ In re Madison Guaranty Savings &

Loan (Clinton Fee Application), 334 F.3d 1119, 1127 (D.C.

Cir., Spec. Div., 2003) (per curiam) (internal quotation marks

and citations omitted). Therefore, we do hold that this is a

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fee which would not have been incurred but for the require-

ment of the Act. Because it appears reasonable, we will

award recovery in the amount of $1,215.00.

CONCLUSION

For the reasons set forth above, we allow the petition for

fees of Vernon A. Jordan, Jr., only to the extent of $1,215.00.

Except as herein specifically allowed, the petition is denied.

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REAVLEY, Senior Circuit Judge, specially concurring:

Because of Ms. Lewinsky’s statements and conduct, an

investigation of Mr. Jordan was warranted. The extensive-

ness of that investigation (five grand jury appearances, for

example) may well have necessitated more legal expense than

would have been required had there been no Independent

Counsel conducting the investigation. The problem, as the

court explains, is that Mr. Jordan is required to distinguish

his costs due solely to the extensiveness of the Independent

Counsel’s investigation. This is his burden and he makes no

attempt to carry it — most likely an impossibility. There

being no reasonable basis for ruling other than the court

does, I concur.