BRIEF STATEMENT OF INDEPENDENT COUNSEL DONALD C. SMALTZ
I am pleased to have this opportunity to discuss with the committee the circumstances behind our recent successful prosecution of Ronald H. Blackley and Five-M Farming Enterprises, and my concerns about the delays that resulted from the department of justice's decision not to prosecute blackley and its opposition to our prosecution.
I believe this case illustrates some of the impediments to effective law enforcement that can result from efforts by DOJ to rein in the most fundamental attribute that congress has conferred on the independent counsels namely, their independence.
Last week, a federal jury in the District of Columbia convicted former Secretary of Agriculture Espy's chief of staff, Ronald H. Blackley, of three counts of lying to hide $22,000 he received in 1993 from Mississippi agri-businesses.
These businesses sought and received in excess of $400,000 in usda subsidies in the one year that blackley served as espy's chief of staff, and blackley attempted to influence and reverse a usda decision not to provide one of those businesses with the amount of subsidies it requested.
In an earlier related prosecution, United States v. Five M farming enterprises, also brought in the District of Columbia, we indicted Brook K. Mitchell Sr. and 5m Farming Enterprises in may of 1996. they later pleaded guilty to one count of conspiracy to illegally obtain $770,000 in usda subsidy payments, two counts of false statements to USDA, and one count of false entries on usda forms to illegally benefit from the subsidy program.
Both of these results came in the face of strong opposition from DOJ, opposition that, i believe, did not have a principled basis grounded in effective law enforcement, and that served to make our efforts more difficult and time-consuming.
As of late december 1994, DOJ was aware of at least some of these facts concerning blackley, but did not prosecute or otherwise pursue them. my office became aware of these facts as a natural outgrowth of our investigation of Secretary Espy, which caused us to investigate the activities of those close to him in matters related to the department of agriculture.
While we believed our jurisdictional mandate gave us jurisdiction over blackley's and five-m's violations, after informal discussions, DOJ would not refer them to us as related matters under the independent counsel statute.
Section 594(e) provides that an independent counsel may ask either the attorney general or the special division to refer to him matters related to the independent counsel's jurisdiction.
So, we elected to pursue the alternative course outlined in the statute (28 u.s.c. ¤ 594(e) i.e., we applied in JAanuary 1996 directly to the special division for referral of a related matter. DOJ vigorously opposed our application, and litigation ensued.
DOJ argued that the requested referral was not truly related to our jurisdictional mandate and would not concede - despite the clear wording of the statute - that the special division had the legal power to make such a referral without DOJ's blessing.
However, i am firmly of the view that the only real motivation behind DOJ's opposition was attempting to keep the special division, and hence the independent counsel, from exercising too much independence from DOJ. in other words, DOJ wants to control the scope and direction of the independent counsel's investigation.
I draw this conclusion because the connection between the requested referral and my original jurisdiction, which was quite broad, should be obvious to an objective observer.
The special division, in a published opinion on april 1, 1996, stated that in referring a related matter the court "makes explicit the independent counsel's jurisdiction over a matter that was implicitly included in the original grant of prosecutorial jurisdiction." it concluded that:
"Ic Smaltz has shown that the new matter is demonstrably related to the factual circumstances that gave rise to the Attorney General's initial investigation and request for appointment of an independent counsel."
Likewise, in the five m prosecution, the trial judge Judge Jackson went so far as to review for himself the record put before the special division on the referral application, and concluded anew that the referral was indeed proper.
Another reason why i do not believe that DOJ's opposition to the referral had anything to do with how closely the matters were related was the contrasting position it took in United States v. Tucker. the only real distinction between the two is that DOJ made the tucker referral but was bypassed in the decision-making process for our referral.
Thus, the real reason for DOJ's strident opposition to this referral appears to have been a turf war it simply would not concede that the special division could make a referral of which it did not approve. DOJ's opposition thus was just an attempt to convince the special division not to exercise the power that congress had affirmatively given it.
As i have already indicated, the special division was unpersuaded, and it granted the referral. this was, i submit, in keeping with the whole philosophy of the independent counsel act, which after all is designed to minimize DOJ's control over the independent counsels' investigations.
As Chief Judge Edwards of the D.C. Circuit Court of Appeals perceptively noted, "the 'entire purpose' of the independent counsel statute was to provide independence from the executive branch . . . ."
Defendant blackley's motion to dismiss on jurisdictional grounds gave the district court occasion to reflect on the need for the independence of the independent counsel. in denying the motion to dismiss, judge lamberth, the trial judge, stated:
"For the independent counsel to play a meaningful role, he or she is necessarily expected to act in a manner different from, and sometimes at odds with, the department of justice . . . ."
Although it lost the referral fight more than a year and a half ago, DOJ itself has been other than totally passive in this matter.
Recent articles in the new york times and another in the new yorker magazine have cited high DOJ officials as criticizing my office for pursuing these matters, in the larger context of disparaging statements that describe the current independent counsels as "overzealous amateurs who have tried repeatedly to expand jurisdiction."
These articles, then, attempt to fix the blame on present independent counsels for ms. reno's apparent reluctance to appoint an independent counsel in current matters.
Such statements, coming as they do from DOJ personnel, and apparently sanctioned at the highest level, are shocking. they threaten to undermine not only the efforts of the independent counsels in the already difficult job of prosecuting public corruption, but also the fair administration of justice.
The courts have held that the blackley prosecution was four-square within my original jurisdictional mandate, the statute (section 594(e)) clearly authorized the procedure we followed, and DOJ's unwarranted efforts to curtail the scope and direction of my investigation significantly delayed our investigation.
I will answer any follow-up questions from the committee, and i have prepared a detailed statement i would like entered in the record.