UNITED STATES OF AMERICA

dismiss flows directly from the Independent Counsel’s general jurisdiction, and not at all from the supposedly improper referral.

                The referral that defendant attacks was quite specific and limited.  It only gave the Independent Counsel

[t]he jurisdiction and authority to investigate and prosecute any violation of any federal law, other than a Class B or C misdemeanor, by any organization or individual, related to any application, appeal, request for subsidy made to or considered by the United States Department of Agriculture, for which [Secretary Espy] and/or his chief of staff Ronald Blackley intervened in the application, approval, or review process.

Order of the Special Division, dated April 1, 1996 (attached as Exhibit A).

                The threshold inquiry, therefore, is whether any count of the Indictment is dependent upon this referral.  If not, then there is nothing in the Indictment to question on the supposed ground of an improper referral, and the Court cannot even reach defendant’s argument that the Special Division of the Court of Appeals acted improperly.

                Before reviewing the Indictment, we will remind the Court of the Independent Counsel’s general jurisdiction.  The original order of the Special Division appointing the Independent Counsel specifies the following matters, among others, as within his jurisdiction:

                [T]o investigate to the maximum extent authorized by the Independent Counsel Reauthorization Act of 1994 whether Alphonso Michael (Mike) Espy, Secretary of Agriculture, has committed a violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, relating in any way to the acceptance of gifts by him from organizations or individuals with business pending before the Department of Agriculture.

                [T]o investigate other allegations or evidence of violation of any federal criminal law, other than a Class B or C misdemeanor or infraction, by any organization or individual developed during the Independent counsel's investigation referred to above and connected with or arising out of that investigation.

                [T]o investigate any violation of 28 U.S.C. § 1826, or any obstruction of the due administration of justice, or any material false testimony or statement in violation of federal criminal law, in connection with any investigation of the matters described above.

                [T]o seek indictments and to prosecute any organizations or individuals involved in any of the matters described above, who are reasonably believed to have committed a violation of any federal criminal law arising out of such matters, including organizations or individuals who have engaged in an unlawful conspiracy or who have aided or abetted any federal offense.

                [T]o fully investigate and prosecute the subject matter with respect to which the Attorney General requested the appoint­ment of independent counsel, as hereinbefore set forth, and all matters and individuals whose acts may be related to that subject matter, inclusive of authority to investigate and prosecute federal crimes (other than those classified as Class B or C misdemeanors or infractions) that may arise out of the above described matter, including perjury, obstruction of justice, destruction of evidence, and intimidation of witnesses.

Order Appointing Independent Counsel (September 9, 1994)  (attached as Exhibit B) (emphasis added).

                A quick perusal of the Indictment shows that all of the counts flow directly from the initial grant of jurisdiction, without any reference at all to the challenged referral.  All of the offenses charged relate to Secretary Espy’s acceptance of gifts or false statements in concealment of his acts:

Counts One through Seven — Wire fraud effected through electronic communications concerning defendant’s receipt of things of value.

Counts Eight through Twelve — Mail fraud effected through mailings relating to gratuities received by defendant and to a purchase for personal use made with government funds.

Counts Thirteen through Twenty-Five — Receipt of illegal gratuities.

Counts Twenty-Six through Twenty-Eight — Receipt of gifts in violation of the Meat Inspection Act.

Counts Twenty-Nine through Thirty-Three — Travel in violation of the Travel Act to receive things of value.

Count Thirty-Four — False statement regarding receipt of things of value.

Count Thirty-Five — Tampering with a witness with regard to investigation by Department of Agriculture.

                Thus, a review of the Indictment quickly confirms that none of the charges brought depends in any way upon the Special Division’s referral.  The Court can address the same question from a different angle by noting that defendant’s only criticism of the referral is that the Attorney General objected to it, and that the Attorney General’s objection was that the referral would supposedly give the Independent Counsel permission to prosecute persons only tangentially related to Secretary Espy —  i.e., that it would give the Independent Counsel a “license to prosecute any individual whose path may have crossed that of [Secretary Espy] — and all individuals in turn connected to that individual.” Opposition of the United States to Application for Referral of Related Matters (attached as Exhibit C) at pp.16-17.  Regardless of the merits of that concern, which experience has proven to be unwarranted, the one fact that defendant cannot contest on this motion is that no person other than Secretary Espy himself is being prosecuted in this action.  Hence the supposed flaw of the referral simply does not arise in this prosecution.

                Defendant’s motion therefore fails at the threshold because he does not, and cannot, assert that the Indictment depends upon the referral of which he complains.  Without this fundamental showing, the court has no occasion even to consider whether it should try to overturn the Court of Appeals’ decision to make the referral.

THIS COURT HAS ALREADY REVIEWED, AND UPHELD, THE QUESTIONED REFERRAL

                While the present prosecution does not depend in any way upon the questioned referral, defendant carefully glosses over the fact that this Court has previously reviewed the referral and found it proper.  Specifically, the earlier prosecution of U.S. v. Five M Farming Enterprises, Cr. No. 96-0175 (TPJ)(D.D.C. 1996), was concededly brought under the questioned referral, and defendants predictably moved to dismiss on the ground that the Independent Counsel lacked jurisdiction because the referral was supposedly defective.  In that instance, Judge Jackson went so far as to review the record before the Special Division on the referral,^[1] and concluded that the referral was entirely proper:

[T]he court agrees that the Special Division acted within its authority, primarily because the Five M Farming case is “demonstrably related” to the Espy investigation [Independent Counsel] Smaltz was appointed to oversee.  Morrison, 487 U.S. at 679 (establishing “demonstrably related” standard.  The Court has reviewed in camera the evidence of relatedness before the Special Division, and has no doubt that referral of this case did not impermissibly expand the Special Division’s original grant of jurisdiction.

 U.S. v. Five M Farming Enterprises, Order entered 10/28/96 (attached as Exhibit D).^[2]

                Defendant suggests no reason why, if the Court were to review the referral in this instance (which it has no occasion to do, for the reasons stated above), it would come to any different conclusion.

                More recently, this Court has had occasion to review the challenged referral in United States v. Blackley, Cr. No. 97-166 (RCL)(D.D.C. 1997), a prosecution brought against Espy’s Chief of Staff directly under the referral.  Judge Lamberth carefully considered defendant’s argument that the referral was improper and denied defendant’s motion to dismiss stating that the issues raised in defendant’s motion were issues previously addressed by the Department of Justice, and resolved by the Court designated as having the authority to review such matters, i.e. the Special Division of the United States Court of Appeals for the District of Columbia.  United States v. Blackley, Order entered 11/12/97 (attached as Exhibit E).

                Defendant suggests no reason why, if the Court were to review the referral in this instance (which it has no occasion to do, for the reasons stated above), it would come to any different conclusion.

1.            

THE SPECIAL DIVISION HAD THE STATUTORY

 POWER TO MAKE THE REFERRAL

                Defendant’s motion argues that the Special Division misread the statute when it concluded that it had the power to refer a related matter without the acquiescence of the Attorney General. Since the Special Division expressly held to the contrary in thorough and well-reasoned published decision, In re Espy, 80 F.3d at 505 (D.C. Cir. Special Division for the Purpose of Appointing Independent Counsels 1996), defendant thus is asking this court to put itself into the somewhat unseemly position of educating a Division of the Court of Appeals as to the meaning and effect of its own precedents.

                Defendant’s first line of attack is to argue that most determinations made by the Attorney General under Independent Counsel Act are not subject to judicial review.  (Mem. of Points and Auth. in Supp. of Def.'s Mot. to Dismiss Indict. for Defects In Instit. of Prosecution ("Def.'s Mem.") at pp. 5-10).  It then concludes that the Special Division’s decision to refer a related matter to the Independent Counsel over the Attorney General’s objection somehow amounted to improper judicial review of an Attorney General determination.

                There are two flaws in this argument.  The first is that the Attorney General did not make a “determination” for the Special Division to review.  The second is that the actions of the Special Division are not under the Independent Counsel Act are not, by definition, “judicial review.”

                The first problem with defendant’s argument — that the Attorney General did not make a “determination” for the Special Division to overrule when it made its referral to the Independent Counsel — was explicitly recognized by the Attorney General herself in opposing the referral.  What did happen was that the Independent Counsel informally consulted with the Attorney General before going to the Special Division, but did not ask for or receive any determination on the merits of the referral; the Attorney General then appeared before the Special Division to oppose the referral.  The Attorney General conceded that this scenario did not invoke what it saw as the restriction stated in In re Olson, 818 F.2d 34 (D.C. Cir. Special Division for the Purpose of Appointing Special Counsels 1987), that the Special Division could not make a referral that ran counter to an earlier Attorney General determination:

                The Department does not take the position that the informal consultation that occurred between the Independent Counsel’s Office and the Department of Justice in this case by itself brings this matter within the scope of the holding in Olson that a previous rejection by the Attorney General bars the Court from referring a matter.  To conclude that the Olson  bar is triggered by informal consultation such as occurred here would be destructive to the necessary working relationship between the Department and independent counsels . . . .

Opposition of the United States to Application for Referral of Related Matters (attached as Exhibit C), p. 26, n.16.

                Second, the Special Division was not, and could not have been, performing an act of judicial review when it disagreed with the Attorney General and referred the related matter to the Independent Counsel.  Indeed, one of the central holdings of Morrison v. Olson, 108 S.Ct. 2597 (1988), the decision upholding the independent counsel scheme, was that the Special Division, in fulfilling its role under the Act, is properly exercising powers not granted to the courts by Article III.  The power to appoint the independent counsel and define his jurisdiction is an Article II power.  Id. at 2612-2613. (The Supreme Court specifically described the power to refer related matters, and other ancillary powers, as “passive” or “ministerial” powers of the Special Division.  Id. at 2613-2614.  Thus, even though members of the Special Division are Article III judges when they sit outside the Special Division, it does not follow that every time they disagree with the Attorney General they are “judicially reviewing” her acts, any more than the Attorney General would be “judicially reviewing” the acts of the Special Division if she were to refer a related matter that the Special Division declined to refer.

                Nevertheless, defendant insists that Congress could not have intended for the Special Division to exercise the power expressly granted it in section 594(e) absent the prerequisite, appearing nowhere in the statute, of Attorney General concurrence.  Of course, as the Special Division noted in In re Espy, 80 F.3d at 505, the starting point for any analysis of the statute is the language of the statute itself.  Park ‘N Fly, Inc. v. Dollar Park and Fly, 105 S.Ct. 658, 661 (1985) (“Statutory construction must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.”)  Here the statutory language could scarcely be plainer:

                An independent counsel may ask the Attorney General or the division of the court to refer to the independent counsel matters related to the independent counsel’s prosecutorial jurisdiction, and the Attorney General or the division of the court, as the case may be, may refer such matters.

28 U.S.C. §594(e) (emphasis added).  The Special Division’s reading of this provision can scarcely be gainsaid:  “The plain language of section 594(e) in no way suggests that the concurrence of the Attorney General is required; rather, it plainly contemplates the opposite.”  In re Espy, 80 F.3d at 505.

                While defendant accuses the Special Division of misreading its own precedent In re Olson in so holding, there is in fact no conflict between Olson and In re Espy in this regard.  In Olson, the Special Division held that it could not make a referral “when the Attorney General has specifically determined, under [28 U.S.C.] §592(b)(1) that those allegations should not be pursued.”  818 F.2d at 37.  Putting aside the fact that the Attorney General did not make such a determination regarding the subject referral, the crucial point in applying Olson is that the referral statute, §594(e), was rewritten after Olson was decided specifically to negate any implication that Olson required Attorney General acquiescence for the Special Division to make a referral.

                The Special Division summarized this legislative history in In re Espy:

                The previous version of section 594(e) stated that the independent counsel “may ask the Attorney General or the division of the court to refer matters related to the independent counsel’s prosecutorial jurisdiction.”  28 U.S.C. 594(e) (1982).  Congress amended this sentence by adding “and the Attorney General or the division of the court, as the case may be, may refer such matters.”  28 U.S.C. §594(e) (1994).  In short, by its plain meaning, the amendment to section 594(e) after this court’s decision in Olson clarified that the section permits the court to refer a related matter to an independent counsel without the concurrence of the Attorney General.  See, H.R.Conf.Rep. No. 452, reprinted in 1987 U.S.C.C.A.N. at 2194-95 . . . .

80 F.3d at 506.

                Defendant insists that the Special Division of the court of Appeals read this legislative history wrong, however, and demands that this court set it straight.  Defendant argues that, since Congress believed that it was “clarifying” the statute after Olson, it could not have intended to change the law as interpreted in Olson.  (Def.'s Mem. at pp. 9-10).  To the contrary, the legislative history is quite clear that both the intent and the effect of the 1987 amendments was to make certain that Olson would not be read to require Attorney General approval for Special Division referrals.

                Legislative proposals to remove the authority of the Attorney General over an independent counsel’s requests for referral or expansion were introduced in 1987, on the heels of the Olson decision  By the time the 1987 amendments went to conference, the Senate version required Attorney General approval of both a § 594(e) referral and a § 593(b)(3) expansion of jurisdiction, while the House version required Attorney General approval for neither.  The resulting statute was a compromise, adopting the Senate version of the expansion power (Attorney General request required) and the House version of the referral power (Attorney General participation not required).  The Conference Report makes this point crystal clear:

*   *   *

SECTION (C):  JURISDICTION OF INDEPENDENT COUNSELS

Current law

                                Current law permits the special court to expand the prosecutorial jurisdiction of an independent counsel upon the request of the Attorney General.  In a separate provision, upon the request of either the Attorney General or the independent counsel, the special court is permitted to refer to an independent counsel matters which are related to his or her original jurisdiction.  Under current law, it is unclear whether, in the case of a referral requested by an independent counsel, the special court must solicit the Attorney General's views on the request.  It is also unclear whether the special court may refer a matter to the independent counsel who asked for it, if such referral is opposed by the Attorney General.

House bill