# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed January 7, 2005

Division No. 94-1

I N R E : M ADISON G

UARANTY S AVINGS & L OAN

(B ACON F EE A

PPLICATION )

Division for the Purpose of

Appointing Independent Counsels

Ethics in Government Act of 1978, As Amended

Before: S ENTELLE

, Presiding , F AY and R EAVLEY

, Senior

Circuit Judges

.

O R D E R

This matter coming to be heard and being heard before the

Special Division of the Court upon the application of Kenneth

H. Bacon for reimburs ement of attorneys’ fees and costs

pursu ant 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, tha t the petition is

not well taken, it is hereby2

ORDER ED, ADJUDGED, a nd DECREED that the

petition of Kenneth H. Bacon for atto rneys’ fees that he incurred

during the Independent Counsel’s investigation be denied.

P ER C URIAM

For the Court:

Mark J. Langer, Clerk

By:

Marilyn R. Sargent

Chief Deputy Clerk3



# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed January 7, 2005

Division No. 94-1

I N R E : M ADISON G

UARANTY S AVINGS & L OAN

(B ACON F EE A

PPLICATION )

Division for the Purpose of

Appointing Independent Counsels

Ethics in Government Act of 1978, As Amended

Before: S ENTELLE

, Presiding , F AY and R EAVLEY

, Senior

Circuit Judges

.

ON APPLICATION FOR ATTORNEYS’ FEES

Opinion for the Special Court filed P ER C URIAM

.

P ER C URIAM : Kenneth H. Bacon 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 $10,780.36

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

invest igation conducted by Independent Counsel. Because we

conclude that Bacon has not carried his burden of establishing

all of the elements of his entitlement, w e deny the petition in its

entirety.4

Background

D u ring the mid-1990's, President William Jefferson Clinton

was involved in a sexual relationship with Monica Lewinsky, a

White House in

tern and subsequent employee. In April of 1996,

following her term at the White House, Lewinsky was hired as

a confidential assi

stant to the Assistant Secretary of Defense for

Public Affairs, Kenneth H. Bacon, who is the fee petitioner

here. While working for Bacon, Lewinsky became friends with

a fellow employee in Bacon’s dep artment, Linda Tripp, and

confided to Tripp the details of her rel ationship with the

President.

Subsequently, in D e cember of 1997, Lewinsky was

subpoenaed to testify in a sexual discriminat ion case filed

against President Clinton by Paula Jones. Jones had been a state

employee in Arka n sas during the 1980's when Clinton was

governor there, and all

eged that during that time he had solicited

sex from her, that she had decl ined, and that as a result her state

employment had b een illegally affected. In subpoenaing

Lewinsky, Jones’s attorneys were apparently seek ing to discover

whether there were other government employees from whom the

President had s olicited a sexual relationship. Clinton and

Lewinsky, however, had previously agreed to deny t h eir

relationship if asked, and Lewinsky told Tripp of her intention

to lie about it in her upc oming testimony. In a number of

telephone conversations, Tripp recorded these intent-to-lie

statements made by Lewinsky.

Ongoing at

the same time was an investigation by

Independent Counsel (“IC”) K enneth W. Starr into allegations

of impropriety

concerning certain business dealings by Clinton

and others while he was governor. After recording the

telepho ne conversations, Tripp conveyed the substance of them

to IC Starr. Starr in turn presented this information to the5

Attorney General (“AG”) who then, pursuant to § 592(c) of the

Act, applied to this court to expand the IC’s jurisdiction to

include investigat

ion of the Lewinsky matter. This the court did

on January 16, 1998. Soon thereafter, the media reported that

the President was unde

r investigation for possible perjury or

obstruction of justice in connection with the Jones litigation.

Consequently, in the ensu i ng media frenzy, Linda Tripp

became the focus of intense interest. In mid-March, 1998, a

reporter for New Yorker magazine called Baco n

, explaining that

she was researching a stor y on Tripp and had uncovered

information suggesting that Tripp had been arrested in 1969.

She inquired of Bacon wheth er this arrest had been disclosed on

Tripp ’s security clearance application form. Bacon asked one

of his deputies, Clifford Bernath, to follow up on the reporter’s

inquiry. After obtaining copies of the relevant forms, Bernath,

with Bacon’s knowledge, called the reporter and told her that

Tripp had not dis closed any arrest record. The reporter then

used this information in her New Yorker article. Disclosure of

such information was prohibited by the Pri vacy Act, 5 U.S.C. §

552a(b).

At the time of

the release of this information, Tripp was a

cooper ating witness in the IC’s investigation. Upon learning

that information protected by the Privacy Act had been released,

the IC cond ucted grand jury proceedings to determine if the

release by Bacon an

d Bernath was part of an effort to intimidate

Tripp in her capacity as a cooperating witness or part of an effort

to obstruct justice. Ultimately the IC decided that there was

insufficient evidence to bring any indictments in the matter.

Purs uant to § 593(f)(1) of the Act, Bacon now petitions the

court for attorneys’ fees in the amount of $10,78 0.36 that he

incurred in his defense of the IC’s investigation. As directed by

§ 593(f)(2) of the Act, we forwarded copies of Bacon’s fee6

petition to the AG and the IC and requested written evalua t ions

of the petition. The court expresses its appreciation to the IC

and the AG for submitting these evaluations, to which we have

give n due consideration in arriving at the decision announced

herein.

Discussion

The Independent Counsel statute provides:

Upon the reques t of an individual who is the subject of

an investigation con

ducted 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, awar d reimbursement for

those reasonable attorneys’ fees i ncurred by that

individu al during that investigation which would not

have been incurred but for the requiremen ts of this

chapter.

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

atto rneys’ fees award under the statute, a petitioner must show

t hat all of the following requirements are met: 1) the petiti oner

is a subject of the investigation; 2) the fees were incu rred during

the investigation; 3) the fees would not have been incurred but

for the requirements of the Act; and, 4) the fees a re 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 h i s

entitlemen t.” I n re North (Reagan Fee Application)

, 94 F.3d

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

The IC and the DOJ agree that Bacon was an unindicted

subject of the IC’s investigation, that the fees were incurred

during the investigation, and that t h e fees requested are7

reasonable. The only matter in contention therefore is whether

Bacon has fulfilled the “but for” requirement of the Act.

Bacon appear s to argue that he passes the “but for” test for

three reasons. First, he asserts that regarding the IC’s

investigation of the Lewinsky ma tter, “[it] seems clear that a

politically appoi

nted Attorney General would not have

investigated the President for allegedly lying in a civil

deposition about his sexual relations with a nonparty witness.”

For auth ority, Bacon references this court’s decisions

concerning several fee petitions from the Iran/Contra

investigation, in which it was held that the “but for” element was

fulfilled because a politically appointed Attorney General would

not have investigated an alleged criminal cons piracy to violate

the Boland Amendments. S ee, e.g., In re North (Regan Fee

Application) , 72 F.3d 891, 895-96 (D.C. Cir., Spec. Div., 1995);

In re North (Dutton Fee Application)

, 11 F.3d 1075, 1080-81

(D.C. Cir., Spec. Div., 1993). Bacon argues that his is a similar

situation because “if the Attorney General would not have

investigated the Lewinsky matter , then the attorney’s fees

sought by [him]

. . . clearly would not have bee n incurred ‘but

for’ the requirements of the Act.”

S econd, Bacon argues that the particular con duct

concerning him that was investigated, i.e., a public affairs

officer’s response to a reporter’s question about Tripp’s answer

on a security clearance form, was looked into “only because Ms.

Tripp was a critical witness in an ongoing OIC investigation ,”

(original emphasis), and that “[a] fortiori, [he] would not have

incurred fees but for the requirements of the Act.”

Finally, Bacon claims that the IC’s investigation of him for

a potential violation of the Privacy Act “was highly unusual” in

that such violations are “comparable to a minor traffic ticket”

and that “[n]o prosecutor with an ordi n ary docket and a sense of8

p roportion would have spent much time investigating this m atter

as a potential Privacy Act violation.”

In her evaluation, the IC as serts that Bacon has failed to

demonstrate that the requirements of the Act caused him to incur

legal expenses that he otherwise would not have. Addressing

Bacon’s argument that a regular pr osecutor would not have

investi g ated the Lewinsky affair, the IC notes that this court

gave IC Starr the jurisdiction to investigate the matter because

“t he Attorney General felt that further investigation of the

serious crimes of perjury and obstruction of justice were

warranted,” and that these are “precise l y the type of crimes

federal prosecutors routinely investigate and prosecute.” As for

Bacon’s own conduct in the matter, the IC states that such

actions “would have cau s ed any prosecutor to investigate what

appeared to be an attempt to use confidential information

ill egally to intimidate witnesses in an ongoing criminal

investigation,” and that Bacon the refore fails the “but for” test

because “[i]nvestigation and potenti al prosecution of witness

intimidation is not the type of activi ty that is uniquely related to

the Act.”

The DOJ, for basically the same reasons, al s o argues that

B acon has not passed the “but for” test. First, the DOJ notes

that the investigation of the Lewinsky matter “concerned

primarily and explicitly allegations o f perjury and obstruction of

justi ce,” that these allegations “were serious and credible,” and

that “[s]uch allegations can be, and are, investigated and

prosecuted by the Depart ment of Justice.” Second, the DOJ

takes issu e with Bacon’s Privacy Act argument, stating that,

although rare, the DOJ does indeed investigate such matters, and

points out that in any event the investigation was much broader

than that as it conc e rned a possible conspiracy to obstruct justice

by intimidating or smearing a government witness, Li n da Tripp.9

After car efully reviewing each of the three “but for” reasons

put forth by Bacon, we conclude that he ha s not carried his

burden of establishing this element. What he apparently is

arguing for his first reason i s that in the absence of the Act the

Attorney General would never have inve s tigated the Lewinsky

matter because the allegations surrounding it, i n particular

concern ing the President, were not serious enough. However,

when the court considered the fee reimburse ment request of

Lewinsky herself, it had an opportunity to detail the seriousness

of the charges involved:

the underlying allegati

ons were that Lewinsky lied under

oath in a pendi

ng lawsuit against the President of the United

State s; that she was planning to lie again and had

encouraged others to lie; that she had spoken to the

President and an associate of the President about the matter;

and, at least implicitly, that the President and his associate

may themselves have been involved in the wrongdoing.

In re Madison Guar. Sav. & Loan (Lewinsky Fee Application)

, 352 F.3d 43 7, 445 (D.C. Cir., Spec. Div., 2003) (per curiam).

The court then went on to ask whether “evidence of criminal

w rongdoing by an incumbent President and accomplices of that

President [would] have escap ed an investigation of similar scope

in the absence of the Ethics in Government Act,” and citing to

the pre-Act investigation of the Watergate matter, answered in

the negative. I

d. at 445-46. Applying the same logic here,

Bacon’s claim that a “politically appointed Attorney General”

would not have investigated the Lewinsky matter is groundless.

Bacon’s second reason for fulfilling the “but for”

requirement boils down to claiming that he was investigated by

an independent counsel only because an independent counsel

was appointed to investi

gate the Lewinsky matter. A similar

argument was put forth by one of the f ee applicants caught up in10

t he investigation of former HUD Secretary Samuel Pierce. In re

Pierce (Kisner Fee Application)

, 178 F.3d 1356, 1 360 (D.C.

Cir., Spec. Div., 1999) (per curiam). There, the applicant argued

that the “but for” requirement was me t in his case because if the

Act ha d not authorized the appointment of an independent

counsel, then the grand jury which he wa s called before would

never have been in existence. The court rejected this argument,

notin g that it “ha[d] repeatedly held . . . that subjects . . . do not

automatically meet the ‘but for’ test simply because the

investigatio n was conducted by an independent counsel under

the Act. ” Id. Rather, the court stated, the test is whether in the

absence of the Act an investigation of the matter would

nevertheless have been undertaken by the appropriate

authorities, e.g., the DOJ. Id. As there, the answer here appears

to be yes.

Bacon’s final claim, th

at no ordinary prosecutor would have

bothered to investiga t e him for an offense as minor as a

violation of the Privacy Act, skews the facts. As the DOJ in its

evaluation points out, the investigation of Bacon concerned

much more than just the Privacy Act. It also involved the

possibility of a conspiracy to obstruct jus tice by intimidating a

government witness, which the DOJ n otes is a crime that it “of

course investigates and prosecutes.”

Conclusion

For t h e reasons set forth above, we hold that Bacon is not

eligible for reimbursement o f his attorneys’ fees as he has failed

to pass the “but for” test.