Opinion ID: 725493
Heading Depth: 2
Heading Rank: 1

Heading: Reagan's Subject Status

Text: 13 Reagan, who was not indicted, states that based on the Final Report's description of the investigation's focus on him, it is clear that he was a subject. Reagan notes that not only did IC Walsh devote a whole chapter to scrutinizing his conduct, the entire Report is filled with statements and assertions concerning the investigators' activities with respect to him. Although in a July 30, 1992, letter IC Walsh notified Reagan's attorney that he no longer regarded Reagan as a subject of the investigation, Reagan asserts that he actually remained a subject afterwards because the letter did not foreclose the possibility that new developments might cause IC Walsh to change his mind and, more importantly, subsequent events and the Final Report reveal that Reagan never ceased to be a subject. Reagan emphasizes [320 U.S.App.D.C. 354] that after July 30, 1992, IC Walsh continued to make statements suggesting that he remained under scrutiny. For example, after President Bush pardoned Secretary of Defense Weinberger and others, Walsh publicly accused Reagan of having had a deliberate intent to violate the Arms Export Control Act and of deliberately defying statutory bans on selling weapons to countries that support terrorism. 14 The Attorney General agrees that Reagan was a subject throughout the duration of IC Walsh's investigation. IC Walsh acknowledges that on July 30, 1992, he notified Reagan that he was no longer a subject. Regarding his later statements alleging that Reagan broke certain laws, Walsh maintains that the alleged violations were of civil, not criminal, laws and that he did not mean to suggest that he was reopening the investigation of Reagan. 15 As we determined in In re North (Dutton Fee Application), 11 F.3d 1075, 1079 (D.C.Cir. Spec. Div.1993) (per curiam), an individual qualifies as a subject if his conduct was being examined by the grand jury in a way that would lead a reasonably counseled person at the time of incurring the fees to believe that there was a realistic possibility that he would become a defendant. The Final Report makes it clear that Reagan had a reasonable basis to believe that there was a realistic possibility that he would become a defendant, and he therefore plainly qualifies as a subject under the Act. We must also determine, however, whether he retained his subject status for the entirety of IC Walsh's investigation. See, e.g., In re Mullins (Mullins Fee Application), 84 F.3d 459, 463-64 (D.C.Cir. Spec. Div.1996) (per curiam) (concluding that Mullins did not retain subject status after IC's letter stating that he did not intend to seek charges against her and, based on current information, he did not expect her status to change). 16 In Shultz, 8 F.3d at 850, the court considered three factors when it determined that IC Walsh's September 17, 1992, general statement that he would seek no further indictments did not end Shultz's subject status. The first factor was that the IC's statement contained the caveat that, in the absence of further developments, there would be no new indictments. Id. The second factor was that IC Walsh actually did obtain indictments after this statement, which demonstrated that the possibility of new developments was not sufficiently remote to defeat the objective reasonableness of a determination by Shultz and his counsel that there remained a realistic possibility that the scope of the investigation encompassed his conduct in such a fashion as to make him a potential defendant. Id. The third factor, which the court deemed perhaps the most compelling one, was that Shultz's attorney asked IC Walsh whether Shultz remained a subject and Walsh had, until Shultz filed his fee application, not retreated from the proposition that Shultz remained a subject. Id. 17 The instant case resembles the situation in Shultz more closely than the one in Mullins. IC Walsh obtained other indictments after he told Reagan that he was no longer a subject, demonstrating that his investigation was still active, and Walsh admits in his evaluation of Reagan's fee petition that if witnesses had changed their testimony he would have prosecuted Reagan. A potential change in a witness' testimony, which is always a theoretical possibility, might not be enough by itself to keep a prior subject under a reasonable apprehension of prosecution sufficient to retain his subject status. In re North (Gadd Fee Application), 12 F.3d 252, 256 (D.C.Cir. Spec. Div.1994) (per curiam). However, when this factor is coupled with IC Walsh's subsequent public accusations that Reagan broke the law, it indicates that the possibility of new developments was not sufficiently remote to defeat the objective reasonableness of a determination by Reagan that there was a realistic possibility that the scope of IC Walsh's investigation still encompassed his conduct and that he remained a potential defendant. Shultz, 8 F.3d at 850. Even though IC Walsh notes that the laws he mentioned contained no criminal sanctions, he had prosecuted others for a conspiracy to defraud the United States by deceitfully concealing violations of the same laws he alleged Reagan violated. Accordingly, we conclude that even after IC Walsh's July 30, 1992, letter, his investigation [320 U.S.App.D.C. 355] continued in a way that would lead Reagan at the time of incurring the fees to believe that there was a realistic possibility that he would become a defendant. Dutton, 11 F.3d at 1079. Therefore, we conclude that Reagan's subject status did not end until the close of the investigation when IC Walsh filed his Final Report.