( \ S. Hrg. 103-^137 THE INDEPENDENT COUNSEL S. 24, REAUTHORIZATION ACT OF 1993 Y 4. G 74/9: S. HRG. 103-437 [NG S.24, The Independent Counsel Reaut. . . BEFORE THE COMMITTEE ON GOVERNMENTAL AFFAIKS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS FIRST SESSION ON S. 24 TO REAUTHORIZE THE INDEPENDENT COUNSEL LAW FOR AN ADDITIONAL 5 YEARS, AND FOR OTHER PURPOSES MAY 14, 1993 Printed for the use of the Committee on Governmental Affairs Hay l4 P<QA U.S. GOVERNMENT PRINTING OFFICE 68-271cc WASHINGTON 1994 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-043698-2 S. Hrg. 103-437 THE INDEPENDENT COUNSEL S. 24, REAUTHORIZATION ACT OF 1993 Y 4. G 74/9: S. HRG. 103-437 [NG S.24/ The Independent Counsel Reaut. . . BEFORE THE COMMITTEE ON GOVERNMENTAL AFFAIRS UNITED STATES SENATE ONE HUNDRED THIRD CONGRESS FIRST SESSION ON S. 24 TO REAUTHORIZE THE INDEPENDENT COUNSEL LAW FOR AN ADDITIONAL 5 YEARS, AND FOR OTHER PURPOSES MAY 14, 1993 Printed for the use of the Committee on Governmental Affairs May l < U.S. GOVERNMENT PRINTING OFFICE 68-271cc WASHINGTON : 1994 ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice.Washington,DC 20402 ISBN 0-16-043698-2 COMMITTEE ON GOVERNMENTAL AFFAIRS JOHN GLENN, Ohio, Chairman SAM NUNN, Georgia WILLIAM V. ROTH, Jr., Delaware CARL LEVIN, Michigan TED STEVENS, Alaska JIM SASSER, Tennessee WILLIAM S. COHEN, Maine DAVID PRYOR, Arkansas THAD COCHRAN, Mississippi JOSEPH LIEBERMAN, Connecticut JOHN McCAIN, Arizona I. DANIEL K. AKAKA, Hawaii BYRON L. DORGAN, North Dakota Leonard Weiss, StaffDirector Betty Ann Soiefer, Counsel Franklin G. Polk, Minority StaffDirector and ChiefCounsel Michal Sue Prosser, ChiefClerk (II) CONTENTS Openingstatements: Paf? SenatorLevin * SenatorCohen ° SenatorLieberman SenatorGlenn £y Prepared statements: SenatorDole °£ KateMartin °° Lloyd N. Cutler 88 WITNESSES Friday, May 14, 1993 Hon. JanetReno,Attorney General, U.S. DepartmentofJustice 11 Arthur L. Liman, Paul, Weiss, Rifkind, Wharton and Garrison, and former Chief Counsel, Senate Select Committee on Military Assistance to Iran and the Nicaraguan opposition 33 Samuel Dash, Professor of Law, Georgetown University Law Center, and former ChiefCounsel, Senate Select Committee on Presidential Campaign NiAcchtoilvaistideseB. Katzenbach, Riker,•Dan•zig, Sch•erer, H•yland and Perretti, and formerAttorney General oftheUnited States 66 Talbot D'Alemberte, onbehalfoftheAmerican BarAssociation 71 Alphabetical List of Witnesses D'Alemberte, Talbot: Testimony 71 Prepared statement 72 Dash, Samuel: Testimony 42 Prepared statement 48 Katzenbach, Nicholas deB.: Testimony 66 Prepared statement 68 Liman, Arthur L.: Testimony 33 Prepared statement 36 Reno, Hon. Janet Testimony 11 Prepared statement 26 APPENDLX S.24 91 Letter, with enclosure, dated June 14, 1993 to Senator Levin from L. Ralph Mecham 99 (III) 24—THE INDEPENDENT COUNSEL S. REAUTHORIZATION ACT OF 1993 FRIDAY, MAY 14, 1993 U.S. Senate, Committee on Governmental Affairs, Washington, DC. The Committee met, pursuant to notice, at 9:40 a.m., in room SD-342, Dirksen Senate Office Building, Hon. Carl Levin presid- ing. Present: Senators Levin, Glenn, Lieberman, Stevens, Cohen, and Cochran. OPENING STATEMENT OF SENATORLEVTN Senator Levin. Good morning, everybody. Last December, the independent counsel law, enacted in response to Watergate and an important part ofour criminal justice system for 14 years, expired. It was an unfortunate lapse and one that I hope will soon be cor- rected by the passage ofthe bill we are considering today, the Inde- pendent Counsel Reauthorization Act. This bill, S. 24, would reestablish the system for appointing inde- pendent counsel to investigate top Government officials who are close to the President when there are allegations of criminal mis- conduct. It is very similar to the bill that we introduced last year and which received the bipartisan support of this Committee, only to be held up on the Senate floor. During the 14 years that the independent counsel law was on the books, it was twice reauthorized with large bipartisan majorities in both Houses of Congress, once in 1983 and once in 1987. On both occasions, President Reagan signed the bill into law. In 1988, by a vote of 7 to 1, the Supreme Court ofthe United States found the law to be constitutional. During each reauthorization of the law, based on the experience of the preceding years, we have seen fit to amend and improve the statute. No one has ever claimed it is the perfect answer to a dif- ficult problem, the problem being the conflict ofinterest, or the ap- pearance of a conflict, in the Justice Department's prosecuting a person who is close to the Attorney General's boss, the President ofthe United States. There is no perfect answer, but what we have tried to do is to improve the law over time and I think we have been pretty successful at doing that. As in the past, the bill that we have introduced this year offers a number of improvements based upon 6 years of experience since the last reauthorization in 1987. The basis for the law is the need for public trust in our criminal justice system. Twenty years ago, (l) the public's trust was shattered when the President of the United States, President Nixon, ordered his Attorney General, Elliott Rich- ardson, to fire the Watergate special prosecutor, Archibald Cox, be- cause he had subpoenaed key White House tapes. Attorney General Richardson resigned instead, and so did Dep- uty Attorney General William Ruckelshaus. Although Solicitor General Robert Bork obeyed the President's directive and fired spe- cial prosecutor Archibald Cox, this interference with the Watergate criminal prosecutions left the country reeling. The result was a constitutional crisis, the resignation of a President, the appoint- ment of a new special prosecutor, and years of criminal investiga- tions, prosecutions and convictions. Another result was the creation of the independent counsel law as part of the Ethics in Government Act of 1978. Since its enact- ment, 13 independent counsels have been appointed. Most closed their investigations without indictments, but with the public's con- fidence that the individuals being investigated were not given any special treatment. Four independent counsels have issued indictments. All four have obtained convictions either throughjury trials or guilty pleas, although some convictions have been reversed on appeal on legal grounds. One independent counsel appointed in December to inves- tigate the Clinton passport matter has yet to reach a decision on indictments. The longest and most complex independent counsel matter has been the Iran-Contra investigation. In December of 1986, then At- torney General Edwin Meese asked the Special Court to appoint an independent counsel to investigate all alleged crimes arising out of the Iranian arms sales and diversion of profits to the Nicaraguan Contras. Interestingly enough, that case was not one where use of an independent counsel was mandatory. Attorney General Meese, sup- ported by President Reagan, chose to invoke the independent coun- sel process. In response, the Special Court appointed Lawrence Walsh, a respected lawyer who is a lifelong Republican, former prosecutor and Federal judge, and former head of the American Bar Association. Mr. Walsh has filed 14 indictments of top Government officials in the Defense Department, State and Department and CIA; 11 have resulted in criminal convictions either from guilty pleas or jury verdicts. One indictment was dismissed due to the Govern- ment's refusal to release relevant classified information. Two in- dictments never went to trial because President Bush issued par- dons for the defendants, Caspar Weinberger and Duane Clarridge. Today, most of the criticism of the independent counsel law con- sists ofcriticisms ofthe Iran-Contra independent counsel investiga- tion. It would be surprising ifthere were no criticism ofthis inves- tigation, given its focus on powerful people, complex facts and cov- ert actions involving the sale of arms to a terrorist nation, trading arms for hostages, and supporting a civil war despite a Congres- sional ban. As the bipartisan Iran-Contra Joint Committee Report ofNovem- ber 1987 stated, "The common ingredients of the Iran and Contra policies were secrecy, deception, and disdain for the law." And these ingredients, and now these are my words, involved the high- est officers, or some ofthem, ofthe Executive Branch. The bipartisan Committee Report went on to state the following. "The President himself told the public that early reports of arms sales for hostages had 'no foundation.' He. .to.ld the public that the United States had not traded arms for hostages. He told the public that the United States had not condoned the arms sales by Israel to Iran, when, in fact, he had approved them and signed a finding, later destroyed by Poindexter, recording his approval." Ac- cording to the Iran-Contra Committee, "All of these statements by the President were wrong." The preface to the Committee Report stated, "Few principles of U.S. policy are stated more forcefully by the Reagan administration than refusing to traffic with terrorists or sell arms to the govern- ment of the Ayatollah Khomeini of Iran. Although the administra- tion initially denied the reports, by mid-November [1986] it was clear that the United States had sold arms to Iran and had . . . hoped thereby to gain the release of American hostages in Leb- anon." So the issues, the positions of the individuals involved, and the allegations in the Iran-Contra investigation far exceed in impor- tance and political volatility those ofany other independent counsel proceeding, or probably any other criminal investigation in recent history in the United States. Our witnesses today include the Attorney General, Janet Reno, with the Clinton administration's position on the law, the proposed reauthorization of this law, as well as panels of legal experts with a variety of experience and views in this area. We invited former Secretary ofDefense Caspar Weinberger, one ofthe most vocal crit- ics ofthe Iran-Contra prosecution and the subject of an indictment when he was issued a pardon by President Bush, but Mr. Wein- berger declined our invitation to testify. The independent counsel law is the product ofWatergate's bitter lesson that no administration can, with public confidence, inves- tigate and prosecute its own top officials. This is true. This lesson of Watergate applies in a Democratic administration or a Repub- lican administration. Public confidence is critical in a democracy. It has been undermined in recent decades by a number ofthings. We are still paying the price of Watergate, but we can help to restore a measure of public confidence if we will renew this independent counsel law. Prepared StatementofSenator Levin Last December the independent counsel law, enacted in response to Watergate and an important part ofour criminaljustice system for 14 years, expired. It's been an unfortunate lapse and one I hope will be soon corrected with passage of S. 24, the Independent Counsel Reauthorization Act, which is the subject oftoday's hear- ing. S. 24 would reestablish the system for appointing independent counsel to inves- tigate top government officials who are close to the President when there are allega- tions of criminal misconduct. It is very similar to the bill we introduced last year and which received the bipartisan support ofthis committee, only to be held up on the Senate floor. During the 14 years the independent counsel law was on the books, it w—as twice reauthorized with large, bipartisan majorities in both houses of Congress once in 1983 and again in 1987. On both occasions, President Reagan signed the bill into law. In 1988, by a vote of 7 to 1, the Supreme Court found the law constitutional. During each reauthorization ofthe law, based on the experience ofthe preceding years, we have seen fit to amend and improv—e the statute. No one has ever claimed it is theperfect answerto a difficult problem the conflict ofinterest or appearance of a conflict in the Justice Department's prosecuting a person who is close to the Attorney General's boss, the President oftrie United States. There is no perfect an- swer. What we have tried to do, however, is to improve the law over tune, and I think we've been pretty successful atdoingthat. As in the past, the bill we've introduced this year offers a number of improve- ments based upon sixyears ofexperience since the reauthorization in 1987. The basis for the law is the need for public trust in our criminal justice system. Twenty years ago, the public's trust was shattered when then President Nixon or- dered his Attorney General, Elliott Richardson, to fire the Watergate special pros- ecutor, Archibold Cox, because he had subpoenaed keyWhite House tapes. Attorney General Richardson resigned instead, and so did Deputy Attorney General William Ruckelshaus. Although Solicitor General Robert Bork obeyed the President's direc- tive and fired Special Prosecutor Archibald Cox, this interference with the Water- gate criminal prosecutions left the country reeling. The result was a constitutional crisis, the resignation ofa President, the appointment ofa new special prosecutor, andyears ofcriminal investigations, prosecutions and convictions. Anotherresultwasthe creation ofthe independent counsel law as part ofthe Eth- ics in Government Act of 1978. Since its enactment, 13 independent—counsels have been appointed. Most closed their investigations without indictments but with the public's confidence that the individuals being investigated were not given any spe- cialtreatment. Four independentcounsels have issued indictments. Allfourhaveobtained convic- tions either throughjury trials or guilty pleas, although some convictions have been reversed on appeal on legal grounds. One independent counsel, appointed in Decem- berto investigate the Clinton passportmatter, has yetto reach a decision on indict- ments. The longest and most complex independent counsel matter has been the Iran- Contra investigation. In December 1986, then Attorney General Edwin Meese asked the Special Court to appoint an independent counsel to investigate all alleged crimes arising out ofthe Iranian arms sales and diversion of profits to the Nica- raguan contras. Interestingly enough, this case was not one where use ofan inde- pendent counsel was mandatory; Attorney General Meese, supported by President Reagan, chose to invoke the inde—pendent counsel process. In response, the Special Court appointed Lawrence Walsh a respected lawyerwho is a life-longRepublican, former prosecutor and Federaljudge, and former head oftheAmerican barAssocia- tion. Mr. Walsh has filed 14 indictments oftop government officials in the Defense De- partment, State Department and CIA Eleven have resulted in criminal convictions, either from guilty pleas orjury verdicts. One indictment was dismissed due to the government's refusal to release relevant classified information. Two indictments never went to trial, because President Bush issued pardons for the defendants, CasparWeinbergerand DuaneClarridge. Today, most ofthe criticism ofthe independent counsel law consists ofcriticism ofthe lran-Contra investigation. It would be surprising, ofcourse, ifthere were no criticism ofthis investigation, given its focus on powerful people, complex facts, and covert actions involvingthe sale ofarms to a terrorist nation, trading arms for hos- tages and supportinga civilwardespite aCongressionalban. As the bipartisan, lran-Contra Joint Committee Report ofNovember 1987 states: "The common ingredients ofthe Iran and Contra policies were secrecy, de- ception, and disdainforthelaw." And these ingredients involved the highestofficers ofthe Executive Branch. The Bi- partisan CommitteeReportstates,forexample: "The President himself told the public that the U.S. Government had no connection to the Hasenfus airplane [an airplane shot down attempting to aid Nicaraguan rebels]. He tola the public that early reports ofarms sales for hostages had 'no foundation'. He told the public that the United States had nottraded arms for hostages. He told the publicthatthe United States had not condoned the arms sales by Israel to Iran, when in fact he had ap- proved them and signed a Finding, later destroyed by Poindexter, recording his approval. All ofthese statements bythePresidentwere wrong." The preface tothe CommitteeReportstates: "Few principles ofU.S. policy are stated more forcefully by the Reagan Ad- ministration than refusingto traffic with terrorists or sell arms to the Gov- ernment of the Ayatollah Khomeini of Iran. Although the Administration