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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

–————

Filed May 9, 2003

Division No. 94-2

IN RE: ALPHONSO MICHAEL ‘‘MIKE’’ ESPY

(DEMPSEY 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.

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 Patricia

Dempsey 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 Patricia Dempsey for attorneys’ fees she incurred
2

during the investigation by Independent Counsel Donald C.

Smaltz 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 9, 2003

Division No. 94–2

IN RE: ALPHONSO MICHAEL ‘‘MIKE’’ ESPY

(Dempsey 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: Patricia Dempsey 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 $96,863.23 that

she incurred during and as a result of the investigation

conducted by Independent Counsel (IC or OIC) Donald C.

Smaltz. Because we conclude that Dempsey has not carried

her burden of showing that the fees would not have been

incurred but for the requirements of the Act, we deny the

petition, save for a single unique item.

BACKGROUND

Donald C. Smaltz was appointed independent counsel in

September 1994 to investigate allegations of improper gratuities received by Secretary of Agriculture Mike Espy from

Tyson Foods, Inc. and other organizations and individuals

having business before the U.S. Department of Agriculture.

The investigation lasted several years and looked into, inter

alia, violations regarding the provision of gifts and gratuities
2

to USDA officials, the concealment of gratuities from federal

investigators, and election law violations. Ultimately, the

IC’s investigation resulted in the indictment of 19 individuals

and business entities, 13 of whom were convicted of criminal

misconduct. Patricia Dempsey, the fee applicant here, was

Espy’s girlfriend during the time period for which he was

under investigation. As such, according to the IC, ‘‘Dempsey

was, at a minimum, a percipient witness to many of the events

under investigation by the OIC.’’ It also appears that she

was a subject of the IC’s investigation from early on because

many of the gifts at issue in the investigation were given, in

whole or in part, to her. She was not indicted, and in July

1997 was granted use immunity. She seeks reimbursement

of $96,863.23 for fees incurred from October 1994 to April

2001.

ANALYSIS

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 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, 1077–81 (D.C. Cir., Spec.

Div., 1993) (per curiam). The petitioner ‘‘bears the burden of

establishing all elements of [her] entitlement.’’ In re North

(Reagan Fee Application), 94 F.3d 685, 690 (D.C. Cir., Spec.

Div., 1996) (per curiam). Because we find that Dempsey fails

to satisfy the third requirement, known as the ‘‘but for’’ test,
3

we need not address the remaining requirements.

* * * * * * * * * *

We have previously stated that ‘‘[a]ll requests for attorneys’ fees under the Act must satisfy the ‘but for’ requirement.’’ In re Sealed Case, 890 F.2d 451, 452 (D.C. Cir., Spec.

Div., 1989) (per curiam). And we have repeatedly observed

that ‘‘[t]he most difficult element for a fee applicant to

establish under the Act is that the fees ‘would not have been

incurred but for the requirements of [the Act].’ ’’ In re North

(Bush Fee Application), 59 F.3d 184, 188 (D.C. Cir., Spec.

Div., 1995) (per curiam) (quoting Dutton, 11 F.3d at 1079).

In order to establish eligibility for an award, the fee applicant

must show that the amounts claimed are only those fees and

expenses above and beyond those that she would have incurred as a result of an investigation by the Department of

Justice. In re Sealed Case, 890 F.2d at 452–53. As we

stated in In re Pierce (Olivas Fee Application), 178 F.3d 1350

(D.C. Cir., Spec. Div., 1999) (per curiam), ‘‘[i]f the investigative act generating the defensive costs would, in the absence

of the Act, have been pursued by other authorities–‘had the

case been handled by the Department of Justice or other

executive authorities rather than the Independent Counsel’–

then Congress did not contemplate the award of counsel

fees.’’ Id. at 1355 (quoting Dutton, 11 F.3d at 1080).

Nonetheless, we have found that petitioners qualify for an

award of fees in the face of the but-for test in at least four

circumstances:

1. When the independent counsel’s investigation substantially constituted duplication of the preliminary investigation conducted by the Department of Justice.

Dutton, 11 F.3d at 1080; In re Olson, 884 F.2d 1415,

1420 (D.C. Cir., Spec. Div., 1989) (per curiam).

2. When the petitioning subject has been ‘‘prejudiced

by the Department of Justice’s failure to comply with the

substantial protective features of the Act.’’ In re Nofziger, 925 F.2d 428, 438 (D.C. Cir., Spec. Div., 1991) (per

curiam).

3. When in the absence of the requirements of the Act

‘‘ ‘the case could have been disposed of at an early stage
4

of the investigation,’ ’’ without subjecting the petitioner

to the conditions that led to his incurring the fees sought.

In re Segal (Sagawa Fee Application), 151 F.3d 1085,

1089 (D.C. Cir., Spec. Div., 1998) (per curiam) (quoting

In re Nofziger, 925 F.2d at 438).

4. Not wholly distinct from category (3), supra, when

‘‘high public officials [or derivative subjects] were investigated under the Act in circumstances where private

citizens would not [have been] investigated.’’ In re Nofziger, 925 F.2d at 442; accord Dutton, 11 F.3d at 1080.

Dempsey argues in effect that her case falls into categories

(3) and (4), i.e., that she would not have been investigated in

the absence of the Act, and that she was subjected to a more

rigorous application of the criminal law than she would have

been in the absence of the Act.

First, Dempsey claims that she satisfies the ‘‘but for’’

requirement in that she would not have been investigated in

the absence of the Act because DOJ’s Public Integrity Section

had concluded that no investigation was necessary. She

notes that Public Integrity began an initial investigation after

receiving information about alleged gratuities given to Espy,

and that at the time of Public Integrity’s investigation the

independent counsel statute had lapsed and was not in effect.

Dempsey claims that Public Integrity ‘‘according to published

reports, had determined that the matter was not worthy of

further investigation under normal Department of Justice

standards,’’ but that shortly before this determination could

be finalized by the DOJ, the independent counsel statute was

reauthorized, leading to a determination by DOJ ‘‘that it had

to apply the very strict standards of the Independent Counsel

Act instead of normal Department of Justice standards.’’

Dempsey further claims that ‘‘the main issue in dispute in the

allegations against Secretary Espy was his intent,’’ that the

preliminary investigation had revealed no evidence of illegal

intent by Espy, and that therefore ‘‘in the absence of the Act,

it appears clear that the Department of Justice was ready to

close this matter without further investigation.’’
5

Dempsey consequently rests her argument for passing the

‘‘but for’’ test ‘‘on the established precedent of this Court that

where an independent counsel is appointed to investigate a

subject despite the Public Integrity Section’s recommendation

to the contrary, the ‘but for’ requirement is, a fortiori,

satisfied.’’ For authority, she cites to In re Olson (Perry Fee

Application), 892 F.2d 1073, 1074 (D.C. Cir., Spec. Div., 1990)

(per curiam), in which the court found the ‘‘but for’’ requirement satisfied because Public Integrity had recommended

that the case not be prosecuted and therefore ‘‘Perry was

being subjected to expenses that he would not have been

subjected to in the absence of the [Act].’’ Dempsey also

relies on In re Segal (Sagawa Fee Application), 151 F.3d at

1089, where the ‘‘but for’’ requirement was satisfied because

the AG had stated in her application requesting appointment

of an IC that ‘‘the Department of Justice would in all likelihood exercise its discretion to decline to prosecute this case

as a criminal matter.’’ Dempsey concludes that in her case

‘‘[it] was only because of the operation of the strictures of the

Act, in particular the restriction exercising prosecutorial discretion and evaluating intent, that further investigation had to

be sought.’’

Dempsey further argues that she satisfies the ‘‘but for’’

requirement because the IC’s investigation went far beyond

the originally intended scope, lasting for almost seven years,

and ‘‘examined in detail Ms. Dempsey’s business and personal

relations.’’ She analogizes her case to both In re Meese, 907

F.2d 1192, 1201 (D.C. Cir., Spec. Div., 1990) (per curiam), in

which the court held the ‘‘but for’’ test satisfied, stating that

‘‘[t]he investigation continued for 14 months and was broadened far beyond any investigation contemplated by the initial

referral,’’ and In re Sealed Case, 890 F.2d at 453–54, where

the ‘‘but for’’ element was also satisfied because the applicant’s tax returns were examined for a period of nine years

thus subjecting him to a more rigorous application of the

criminal law than is applied to other citizens. Dempsey

concludes that in her case ‘‘[i]t is improbable that an investigation of such breadth and scope would have been undertaken

‘but for’ the Act.’’
6

As for Dempsey’s first ‘‘but for’’ argument that she would

not have been investigated in the absence of the Act, the

Independent Counsel contends that the present case differs

from both Perry and Sagawa, the two cases Dempsey relies

on, in that in those cases the Attorney General, in the

application for the appointment of an independent counsel,

specifically mentioned misgivings about requesting the appointment. Here, notes the IC, ‘‘unlike in Perry, the Attorney General did not state in her application that the Public

Integrity Section had fully investigated the matter and decided not to recommend prosecution.’’ Instead, the Assistant

Attorney General for the Criminal Division rejected Public

Integrity’s initial recommendation, and directed that the investigation be handled pursuant to the Act, after which the

AG applied to the Court for the appointment of an independent counsel. The IC also notes that in Sagawa the Attorney

General specifically stated in her application to the Court that

‘‘the Department of Justice would in all likelihood exercise its

discretion to decline to prosecute this case,’’ 151 F.3d at 1089,

whereas here the Attorney General specifically noted in her

application that the investigation had uncovered ‘‘potential

violations by Secretary Espy.’’

In further contrast to Perry and Sagawa, the IC points out

that those independent counsel investigations ‘‘involved instances where the independent counsel ultimately joined in

the DOJ’s conclusion and declined the matter,’’ but in this

case the independent counsel ultimately obtained a number of

indictments and convictions.

The IC goes on to note that the Public Integrity Section’s

recommendation not to pursue the matter was in part based

upon false information that Dempsey herself had given to

federal investigators. The IC avers that ‘‘[t]he purpose of the

Act’s fee provision is to buffer innocent individuals from

extraordinary expense attributable to the Act’s arcane mechanism, not to reward parties involved in the matters under

investigation for misleading law enforcement officials.’’

As for Dempsey’s claim that she was subjected to a more

rigorous application of the law, the IC argues that Dempsey
7

offers no proof of this claim but only the conclusory, and

inadequate, assertion that the length of the investigation

demonstrated its unreasonableness. The IC contends that

Dempsey’s receipt of substantial gifts from persons attempting to influence the Secretary of Agriculture’s decisionmaking fully warranted investigation, and that moreover the

IC’s investigation of her ‘‘did not arise solely from her

relationship with Espy, but also directly from her false statements to the FBI in an effort to conceal Espy’s wrongdoing,’’

and that such a crime ‘‘is not uniquely related to the Act.’’

The Department of Justice also questions whether Dempsey satisfies the ‘‘but for’’ requirement. Concerning the

initial recommendation by Public Integrity not to pursue the

matter, the DOJ states that ‘‘only a portion of the facts that

were ultimately uncovered was known at the time,’’ and that

fuller disclosure ‘‘revealed a more substantial pattern of giftgiving than was initially apparent.’’ The DOJ points out (as

did the IC) that Public Integrity investigators could not make

a full assessment of the facts because of false and misleading

statements made to them.

The DOJ is also in agreement with the IC that Dempsey

cannot favorably compare her case to Sagawa, because in that

case the AG had stated that if left to the DOJ that agency

would have declined prosecution, and that ‘‘[h]ere, in contrast,

there was no such representation by the Attorney General,

and the investigation ultimately resulted in a number of

indictments and criminal convictions.’’ Given that the IC’s

investigation ultimately uncovered significant criminal misconduct, the DOJ argues that this case is more like the

investigation of former HUD Secretary Samuel R. Pierce, in

which some of the attorneys’ fees applicants also argued that

the Public Integrity Section had initially recommended

against prosecution. The DOJ notes that in rejecting that

argument the Court explained that the suggestion that Public

Integrity’s view would have prevailed was speculative in that

in the end the Independent Counsel uncovered pervasive and

high level corruption. See, e.g., In re Pierce (Pierce Fee

Application), 213 F.3d 713, 718 (D.C. Cir. Spec. Div., 2000)

(per curiam).
8

After consideration of Dempsey’s fee application and the

IC’s and DOJ’s evaluations, we find that Dempsey does not

fulfill the ‘‘but for’’ requirement. In claiming that she satisfies the ‘‘but for’’ test, Dempsey first argues in effect that

there was no substance to the initial allegations of gratuities

being given to Espy, that this is supported by Public Integrity’s initial determination of no further investigation, and that

it was only because of the independent counsel statute that

further investigation was undertaken. Taking the last point

first, in In re Pierce (Olivas Fee Application), 178 F.3d at

1355, this Court noted that ‘‘[w]e have repeatedly held that

subjects of an independent counsel investigation do not automatically meet the but for test simply because the investigation was conducted by an independent counsel under the Act.

If the investigative act generating the defensive costs would,

in the absence of the Act, have been pursued by other

authorities—had the case been handled by the Department of

Justice or other executive authorities rather than the Independent Counsel—then Congress did not contemplate the

award of counsel fees. In Re North (Dutton Fee Application), 11 F.3d at 1080.’’

Citing to Perry, Dempsey nevertheless argues that Public

Integrity’s initial recommendation shows that this investigation would not have been handled by the DOJ or other

executive authority. In Perry, the Court noted that Public

Integrity’s ‘‘no prosecution’’ decision was sufficient evidence

to show that the fee applicant was being subjected to an

investigation that would not have occurred in the absence of

the independent counsel act. 892 F.2d at 1074. But here, as

both the IC and the DOJ point out, Public Integrity’s determination was based in part on false information given by

Dempsey, and it is highly probable, given the seriousness of

the allegations, that once these falsehoods were uncovered, a

full investigation would have been undertaken by the DOJ

absent the independent counsel statute.

Regarding Dempsey’s second ‘‘but for’’ argument that the

IC’s investigation was lengthy, went far beyond its original

scope, and examined her life in detail, this Court was faced

with a similar argument in In re Herman (Weaver Fee
9

Application), 301 F.3d 648 (D.C. Cir., Spec. Div., 2002) (per

curiam). In that case the fee petitioner also relied on Meese

and In re Sealed Case in arguing that she passed the ‘‘but

for’’ test because the independent counsel’s investigation was

lengthy and probing. We noted there that Meese was not

germane because in that case the fee petitioner was subjected

to a rigorous investigation as the original investigation had

been expanded in the extreme and no preliminary investigation had been conducted prior to referral of the Meese matter

to the independent counsel, whereas in Weaver neither of

these conditions were present. Id. at 653. And they are not

present here either.

We further noted in Weaver that In re Sealed Case was

also not germane because in that case the Court stated that

the ‘‘but for’’ element was satisfied because an ordinary

investigation would have been less probing, whereas in Weaver the seriousness of the allegations would have been just as

thoroughly investigated by the DOJ absent the Act. Id. at

654. We are confronted with the same situation here. As we

noted in a fee petition case involving this same investigation,

see In re Espy (Kearney Fee Application), 319 F.3d 526 (D.C.

Cir., Spec. Div., 2003) (per curiam), and as we reemphasize

now, Independent Counsel Smaltz ‘‘produced evidence, and

indeed probable cause, to believe that a cabinet secretary had

received, and a businessman had paid, illegal gratuities. In

the absence of the Act, the DOJ would in all probability have

investigated Espy for allegedly receiving gratuities and [the

businessman] for allegedly giving them.’’ Id. at 531.

But although Dempsey was not investigated by the IC

differently than she would have been otherwise, in the absence of the Act she would not have incurred fees for review

and response to the IC’s final report. Section 594 of the Act

requires that the independent counsel ‘‘file a final report with

the division of the court, setting forth fully and completely a

description of the work of the independent counselTTTT’’ 28

U.S.C. § 594(h)(1)(B). Absent 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, as we have

observed before, ‘‘[t]he filing of reports by Independent
10

Counsels is ‘a complete departure from the authority of a

United States Attorney’ and is ‘contrary to the practice in

federal grand jury investigations.’ ’’ Id. (quoting In re Sealed

Motion, 880 F.2d 1367, 1369–70 (D.C. Cir., Spec. Div., 1989)

(per curiam)). Therefore, we hold that the amount of

$3,371.25 in reasonable attorneys’ fees that Dempsey incurred

for reviewing and responding to the IC’s final report is

reimbursable.

CONCLUSION

For the reasons set forth above, we allow in part the

petition of Patricia Dempsey to the extent of ordering reimbursement for attorneys’ fees in the amount of $3,371.25. We

deny the balance of the petition as not meeting the ‘‘but for’’

requirement of the Act, 28 U.S.C. § 593(f)(1).