In Re: Madison Guaranty Savings & Loan

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed May 6, 2005

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN

(MOORE 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 Matthew

L. Moore 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 petition is

not well taken, it is hereby

ORDERED, ADJUDGED, and DECREED that the

petition of Matthew L. Moore for attorneys’ fees that he

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

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed May 6, 2005

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN

(MOORE 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 for the Special Court filed PER CURIAM.

PER CURIAM: Matthew L. Moore 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

reimbursement of attorneys' fees in the amount of $74,477.04

that he claims were incurred during and as a result of the

investigation conducted by Independent Counsel. Because we

conclude that Moore has not carried his burden of establishing

all of the elements of his entitlement, we deny the petition

except for a single unique item.

2

I. Background1

In May of 1993, William David Watkins (“Watkins”), who

was at that time Assistant to the President for Management and

Administration, fired seven employees of the White House

Travel Office. Because of allegations of wrongdoing

surrounding the firings, various entities, including the Congress

and the General Accounting Office (“GAO”), undertook

investigations of the matter. First Lady Hillary Rodham Clinton

(“Clinton”) was reportedly questioned during these

investigations concerning her role in the firings. She asserted

that she had little if any involvement in them. When questioned

by the GAO, Watkins also stated that Clinton was minimally

involved. These statements were put into doubt when drafts of

a 1993 memo, written by Watkins and arguably contradicting his

and Clinton’s testimony, were subsequently produced by the

White House. Matthew L. Moore, the fee petitioner here,

apparently had a hand in the drafting of the memo. He is self-

described as “a former junior member of the White House staff

who worked for Mr. Watkins within the White House Office of

Administration during 1993-94.”

Following these events, the GAO filed a criminal referral

with the Department of Justice (“DOJ”), suggesting that

Watkins may have made false statements when interviewed by

the GAO. Because Watkins was a covered person under the

Independent Counsel Act, see 28 U.S.C. § 591(b), the Attorney

General (“AG”) initiated a preliminary investigation pursuant to

1

We have had recent occasion to review the facts of this

matter in In re Madison Guaranty Savings & Loan (Watkins Fee

Application), 375 F.3d 1211, 1212-13 (D.C. Cir., Spec. Div., 2004)

(per curiam). Rather than re-plow recently tilled ground, we have

adopted from that opinion much of the language for the background

portion of this opinion.

3

28 U.S.C. § 592, in order to determine whether further

investigation was warranted. Although the usual duration for a

preliminary investigation is 90 days, the AG took considerably

less time in this case, concluding rather quickly that further

investigation was indeed warranted. Consequently, she

requested that this court expand the Independent Counsel’s

(“IC” or “OIC”) jurisdiction to investigate, among other things,

whether Watkins or Clinton had made false statements to the

GAO regarding the Travel Office firings.

The IC then conducted an extensive investigation of the

matter, including Moore’s involvement. Ultimately, the IC

determined that Moore would not be charged with any offense.

Pursuant to § 593(f)(1) of the Act, Moore now petitions the

court for reimbursement of the attorneys’ fees in the amount of

$74,477.04 that he claims were incurred in defense of the IC’s

investigation.

II. Discussion

The Independent Counsel statute 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 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.

28 U.S.C. § 593(f)(1). Accordingly, in order to obtain an

attorneys' fees award under the statute, a petitioner must show

that all of the following requirements are met: (1) the petitioner

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is a subject of the 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. See In re North (Dutton Fee Application), 11 F.3d

1075, 1077-82 (D.C. Cir., Spec. Div., 1993) (per curiam). The

petitioner “bears the burden of establishing all elements of his

entitlement.” In re North (Reagan Fee Application), 94 F.3d

685, 690 (D.C. Cir., Spec. Div., 1996) (per curiam).

The primary issues regarding Moore’s fee petition are

whether or not he has satisfied the “but for” requirement as well

as which time periods he was considered a “subject” of the IC’s

investigation. For the reasons stated below we find that Moore

fails the “but for” test, and on that basis alone is not entitled to

reimbursement of fees incurred during the IC’s investigation.

We therefore need not address the “subject” issue, although we

note that we are in agreement with both the IC and the DOJ that

at least for a limited period of time Moore’s status was indeed

that of a subject.

* * * * * * * * *

We have in the past held that "[a]ll requests for attorneys'

fees under the Act must satisfy the 'but for' requirement of" the

Act. In re Sealed Case, 890 F.2d 451, 452 (D.C. Cir., Spec.

Div., 1989) (per curiam). On numerous occasions we have also

held that “the contemplation of the legislation is not that

subjects of independent counsel investigations will be

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

that would not have been incurred by a similarly-situated subject

investigated in the absence of the Act.” See In re Madison

Guaranty Savings & Loan (Clinton Fee Application), 334 F.3d

1119, 1123 (D.C. Cir., Spec. Div., 2003) (per curiam).

5

Moore’s position. Moore contends that there are several

“independent grounds . . . for why he would not have been

forced to incur the legal fees he did in this investigation were it

not for the requirements of the Act.” His first argument is that

“there would not have been an investigation at all because who

ordered the Travel Office firings was inconsequential from a

criminal standpoint.” In support of this statement, Moore first

notes that the IC in his Final Report acknowledged that the

firings were lawful. He then goes on to claim that the “principal

controversy” in the matter was whether anyone should be held

publicly accountable for the firings. And he sums up this

argument by asserting that “it is highly improbable that a

professional prosecutor would have initiated an investigation

into the motivation for the lawful Travel Office firings almost

three years after the fact.”

Moore next asserts that no “prosecutor’s office other than

the OIC would have spent three to four years investigating [him]

in light of his low rank and largely incidental knowledge of the

underlining facts prior to determining not to prosecute. The

OIC’s initial classification of Moore as a witness normally

would have ended his risk of prosecution . . . .”

Moore’s third argument for passing the “but for” test

contends that the AG, instead of “conduct[ing] a comprehensive

preliminary investigation of the matter, . . . simply requested

that the Independent Counsel’s jurisdiction be expanded to

include an investigation of those allegations,” and that if the IC

had not already been investigating related matters, then no

investigation of the matter by the AG would have been

undertaken. Moore’s reasoning behind this argument is

somewhat convoluted: both the IC and the GAO referred the

matter of the alleged false statements to the AG, who requested

that this court expand the IC’s jurisdiction to investigate the

matter; if the IC had not been investigating the matter then the

6

only referral would have been from the GAO; false statements

made to the government are prosecuted under 18 U.S.C. § 1001;

prosecutions can only be brought under § 1001 if the false

statements were made to departments or agencies of the

executive branch, see Hubbard v. United States, 514 U.S. 695

(1995); consequently, since GAO is an arm of the Congress, and

not the executive branch, then “the Attorney General would not

have had any reason to initiate a criminal investigation into Mr.

Watkins’s statements;” if there had been no ongoing

independent counsel investigation then there would never have

been an investigation of the alleged false statements; therefore,

“but for” the IC’s investigation there would have been no

investigation of the matter, and Moore would not have incurred

any legal fees.

For his fourth argument, Moore contends that in the past the

court has awarded fees to applicants “where an independent

counsel’s investigation constituted a substantial duplication of

prior investigations.” He claims that in his case “the

Independent Counsel’s investigation was duplicative of seven

other preceding investigations” and that the IC’s investigation

“primarily replicated these earlier investigations, covered little

new ground, and arrived at substantially the same conclusions.”

According to Moore, the seven prior investigations of the Travel

Office firings replicated by the IC were conducted by: the White

House; the FBI; the Office of Professional Responsibility; the

GAO; the Treasury Department; the Senate Banking Committee;

and the House Committee on Government Reform and

Oversight.

Moore bases his fifth argument for passing the “but for” test

on “the Independent Counsel’s reversal on Moore’s ‘subject’

status following his substantial cooperation.” In particular,

Moore asserts that when the IC first began its investigation of

this matter, he cooperated by producing documents to, and

7

appearing before, two federal grand juries, and also at that time

producing documents and being deposed by a Congressional

committee. He claims that soon thereafter the “OIC again

informed him that he remained a witness and not a subject of the

investigation.” However, after the passage of a year, during

which Moore asserts that he “was not contacted by the OIC and

no new evidence against him was developed,” he was

“inexplicably advised” that his status was changed to that of

subject. In arguing that under these circumstances he passes the

“but for” test, Moore relies on two fee opinions issued by this

court following an investigation of the Iran/Contra matter by

independent counsel, i.e., In re North (Shultz Fee Application),

8 F.3d 847, 849 (D.C. Cir., Spec. Div., 1993) (per curiam); In re

North (Cave Fee Application), 57 F.3d 1117, 1119 (D.C. Cir.,

Spec. Div., 1995) (per curiam). In both of those cases,

according to Moore, the fee applicants, like him, had cooperated

with the independent counsel and were considered to be only

witnesses until some time (i.e., four and one-half years) later

when their statuses were changed to subjects. Moore notes that,

consequently, the court held that the applicants fulfilled the “but

for” requirement, and he quotes from the court’s opinions:

[I]t is not reasonable to expect that a professional

prosecutor, as opposed to an independent counsel under the

Act, would have been making subjects out of persons

theretofore treated as witnesses four and one-half years

after the commencement of an investigation, absent some

circumstance far more extraordinary than any displayed to

us here.

Shultz, 8 F.3d at 851; Cave, 57 F.3d at 1121.

Returning to his own situation, Moore claims that “[a]s in

Shultz and Cave, the Court should conclude that [his] attorneys’

fees prior to being immunized would not have been incurred

8

‘but for’ the requirements of the Act.”

IC’s position. The IC puts forth two separate arguments for

why she believes that Moore has not satisfied the “but for”

requirement. As she did concerning the fee application of

Watkins, the IC argues that the serious allegations involved in

this matter, i.e., “whether Watkins or Hillary Clinton had

obstructed justice, committed perjury, or made false

statements,” would have been investigated in the absence of the

Act. Consequently, in the view of the IC, because Moore was

a drafter of the Watkins memo and therefore a critical witness

regarding its origin, “no matter who investigated Mrs. Clinton’s

and Watkins’ conduct, necessarily Moore would have been

questioned about the drafting of that memo.”

Second, the IC argues that Moore’s claim of passing the

“but for” test because the IC’s investigation duplicated

numerous other investigations is without merit. All of the

former investigations, according to the IC, which were

conducted before the Watkins memo was produced, concerned

the Travel Office firings. In contrast, states the IC, “the OIC did

not investigate the firings, except to the extent necessary to

determine whether Watkins or the First Lady had made false

statements.” As such, “[t]here is no evidence that the OIC’s

investigation was duplicative.”

In sum, the IC states that in order for Moore to pass the “but

for” test, he “must distinguish his attorney fees from those

incurred in a regular grand jury investigation, and this he has

failed to do.”

DOJ’s position. The DOJ also argues that Moore has not

passed the “but for” test, and states four reasons why it believes

this is so. Initially, the DOJ contends that, “as a general matter,

the record indicates that the allegations here - concerning

9

alleged lies to Congress, the GAO, and other investigative

bodies - are clearly the sort of matters that would be investigated

in the normal course by the Department of Justice.” In support

of this contention, the DOJ notes that before the investigation by

the IC, the Travel Office matter was being looked into by

regulatory independent counsel Fiske.

Next, the DOJ addresses Moore’s third argument that the

AG, instead of conducting a lengthier preliminary investigation,

simply referred the matter to the IC, and that if no IC had been

in existence investigating related matters, then no investigation

by the AG would have been undertaken. The DOJ argues that

Moore’s implication that the preliminary investigation here was

particularly short is without merit, in that it lasted over one

month. Furthermore, the DOJ contends that Moore “does not

challenge the underlying premise for seeking appointment of an

Independent Counsel - that various known statements made

concerning the travel office matter appeared to contain material

inconsistencies,” and that “[u]nder these circumstances, a more

extensive preliminary investigation was unnecessary.” The DOJ

concludes its argument here by asserting that Moore, whatever

the merits of his legal theory concerning § 1001, “has not shown

. . . that this issue was in any way relevant to the Attorney

General’s preliminary investigation.” According to the DOJ,

Moore also does not “address the fact that the travel office

investigation also involved other statements, made to parts of the

Executive Branch, as to which there is no doubt that section

1001 applied.”

Third, the DOJ addresses Moore’s claim that he satisfies the

“but for” element because the IC’s investigation duplicated prior

investigations. The DOJ notes that for reimbursement of

attorneys’ fees purposes, the court has made clear that the only

relevant duplication by the IC’s investigation is that of the AG’s

preliminary investigation, and Moore makes no claim that any

10

such duplication occurred.

Lastly, the DOJ rejects Moore’s assertion that he fulfills the

“but for” requirement because his status was changed from

witness to subject after the passage of a year. In particular, the

DOJ takes issue with Moore’s reliance on certain of the court’s

fee opinions in the North investigation, in which it was noted

that a professional prosecutor would not have changed a

witness’s status to that of subject four and one-half years after

the investigation had begun. The DOJ argues “that not nearly so

much time passed in the case of Mr. Moore, and that any ‘delay’

here might have been warranted by any number of

circumstances.”

* * * * * * * * *

In his first three arguments for passing the “but for” test,

Moore in effect contends that if the IC had not already been

investigating related matters, then, because the matter here was

not serious and his role was minor, no other prosecutor would

have bothered looking into the allegations. In Watkins the fee

applicant made a somewhat similar contention, arguing that an

ordinary citizen would never have been subjected to an

investigation such as he was. In rejecting that argument, we

noted that “the allegations here of false statements to federal

entities and the failure to produce subpoenaed documents would

have been investigated with or without the Independent Counsel

statute.” Watkins, 375 F.3d at 1216. Applying the same

reasoning here, we find that in all likelihood Moore’s

involvement in the matter would have been investigated

regardless of who conducted the investigation.

Moore’s fourth argument, concerning duplication of

investigations, is without merit. As the DOJ correctly notes, we

have consistently held that the “but for” requirement will be

11

satisfied if the IC duplicates the AG’s preliminary investigation

but that duplication of other investigations, including those of

other government agencies or the Congress, will not suffice.

See, e.g., Watkins, 375 F.3d at 1215-16. Here, Moore claims

that the IC duplicated seven other investigations, none of which

involved the preliminary investigation. Therefore, this argument

must fail.

Concerning Moore’s fifth argument, that after one year of

being a witness his status was inexplicably changed to subject

and therefore his situation falls within the precedential orbit of

Shultz and Cave, the facts would not appear to support his

contention. First, the court in Cave and Shultz stated that “in the

experience of the court,” it would not be “reasonable” to expect

a professional prosecutor to change the status of the fee

applicants after the lengthy period of four and one-half years.

Here, the period of time in question is substantially less, only

one year, and any change in status after this relatively short

period of time would not appear to be unreasonable.

Furthermore, in Cave and Shultz it was not just the length of

time that the independent counsel took to change the status of

the fee applicants from witness to subject that led to the court’s

holding that he satisfied the “but for” requirement, but also that

the IC treated as criminal conduct which had never before been

considered as such, i.e., circumvention of the Boland

Amendments. Cave, 57 F.3d at 1121; Shultz, 8 F.3d at 851. In

contrast, the main allegations in this matter concerned perjury

and obstruction of justice. As both the DOJ and the IC point

out, such crimes are routinely investigated by the DOJ.

In sum, we find that Moore has not passed the “but for” test,

and is therefore not eligible for reimbursement of fees incurred

during the IC’s investigation.

* * * * * * * * *

12

Moore argues that in any event he should be reimbursed for

attorneys’ fees incurred in reviewing and responding to the IC’s

Final Report. He contends that in the Report the IC made an

“unjustified public attack on his professional reputation” by

“unfairly impl[ying] that [he] acted improperly by initially

refusing to disclose documents subject to a claim of attorney

client privilege.” For these tasks he seeks $14,597.50 in fees

and $849.02 in costs.

Additionally, in preparing his response to the Report,

Moore hired a second law firm to produce an “expert” affidavit

addressing Moore’s attorney-client privilege claim. This

affidavit was submitted along with Moore’s own comments to

the Report. According to Moore, the affidavit stated that he had

“acted correctly and in accordance with his ethical obligations

as an attorney,” and was necessary because of the IC’s

“unreasonable and unwarranted insistence on attacking [his]

professional credibility without rationally evaluating the issues.”

The fee for this affidavit, for which Moore seeks reimbursement,

was $17,892.41.

In sum, for responding to the IC’s Final Report Moore seeks

reimbursement in the amount of $33,338.93. This is

approximately 45% of the total fees sought.

In her evaluation, the IC argues that this amount “seems

excessive.” She notes that in contrast to Moore, Watkins spent

only $7,517.75 in responding to the Final Report. Furthermore,

she points out that Moore’s primary contention in his comments

to the Final Report was that it was reasonable for him to assert

the attorney-client privilege concerning the Watkins memo. In

the opinion of the IC, the amount spent by Moore on this

contention is unreasonable.

13

The DOJ also takes issue with the considerable amount

requested by Moore for reviewing and responding to the IC’s

Report. Noting that this amount is a substantial percentage of

the total requested, the DOJ cites In re North (Gardner Fee

Application), 30 F.3d 143, 147 (D.C. Cir., Spec. Div., 1994), and

states that the amount “cannot, consistent with this Court’s

precedent, be reimbursed in full,” as it is “disproportionately

large in light of the overall sum sought.”

Section 594 of the Act imposes the requirement that the IC

“file a final report with the division of the court, setting forth

fully and completely the description of the work of the

independent counsel . . . .” 28 U.S.C. § 594(h)(1)(B). The Act

further allows that the court make the Report available to those

named in it for their review and comment. 28 U.S.C. §

594(h)(2). Consequently, in In re Olson, 884 F.2d 1415, 1421

(D.C. Cir., Spec. Div., 1989) (per curiam), we observed that

“attorneys’ fees incurred by the subject of an investigation in the

preparation of comments to the Report are reimbursable where

they are reasonably related to the substantive defense.”

We have further noted that, outside of the requirements of

the Act, federal “prosecutors do not issue reports.” In re North,

16 F.3d 1234, 1238 (D.C. Cir., Spec. Div., 1994) (per curiam).

“Indeed . . . 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 at 1128 (internal quotation

marks and citations omitted). Moore is therefore eligible for

reimbursement of attorneys’ fees incurred for the task of

responding to the Final Report, as such fees would not have

been incurred but for the requirements of the Act.

14

As noted previously, Moore’s request for reimbursement in

this area is approximately 45% of the total amount sought.

Other cases, in which the fees sought for Final Report review

and comment also amounted to a significant portion of the total,

led us to make substantial reductions. In In re North (Gardner

Fee Application), 30 F.3d at 147-48, the fee applicant requested

reimbursement for responding to an independent counsel’s Final

Report in an amount that was more than one-fourth of the total

fees incurred. Although we noted that the final report

concerning the investigation “was lengthy and complex and cast

a number of aspersions on [the fee applicant],” we nevertheless

reduced the amount sought for this task by one-half, to 13% of

the total incurred. Likewise, in In re North (Shields and Gruner

Fee Applications), 53 F.3d 1305 (D.C. Cir., Spec. Div., 1995)

(per curiam), for responding to the Final Report the fee

applicants sought an amount that was close to 20% of the total

requested. Noting that this was “a significant part” of the total

requested, we reduced the amount by one-half, to 10%. 53 F.3d

at 1308. See also In re North (Regan Fee Application), 72 F.3d

891, 896 (D.C. Cir., Spec. Div., 1995) (per curiam) (request for

responding to Final Report reduced by one-half, to 15% of total

request). Therefore, in conformance with this line of cases, we

find that a more reasonable figure here would be reimbursement

of 10% of the total requested, or $7,447.70. Cf. Watkins, 375

F.3d at 1216 (awarding a similar amount, $7,517.75, to Watkins

for the same task).

Conclusion

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

fees of Matthew L. Moore only to the extent of $7,447.70.

Except as herein specifically allowed, the petition is denied.