In Re: Madison Guaranty Savings & Loan

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Filed May 6, 2005

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN
(MOORE 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 .

ORDER
This matter coming to be heard and being heard before the
Special Division of the Court upon the application of Matthew
L. Moore 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 Matthew L. Moore for attorneys’ fees that he
incurred during the Independent Counsel’s investigation 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 6, 2005

Division No. 94-1

IN RE: MADISON GUARANTY SAVINGS & LOAN
(MOORE 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: Matthew L. Moore 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 $74,477.04
that he claims were incurred during and as a result of the
investigation conducted by Independent Counsel. Because we
conclude that Moore has not carried his burden of establishing
all of the elements of his entitlement, we deny the petition
except for a single unique item.
 2

I. Background1

In May of 1993, William David Watkins (“Watkins”), who
was at that time Assistant to the President for Management and
Administration, fired seven employees of the White House
Travel Office. Because of allegations of wrongdoing
surrounding the firings, various entities, including the Congress
and the General Accounting Office (“GAO”), undertook
investigations of the matter. First Lady Hillary Rodham Clinton
(“Clinton”) was reportedly questioned during these
investigations concerning her role in the firings. She asserted
that she had little if any involvement in them. When questioned
by the GAO, Watkins also stated that Clinton was minimally
involved. These statements were put into doubt when drafts of
a 1993 memo, written by Watkins and arguably contradicting his
and Clinton’s testimony, were subsequently produced by the
White House. Matthew L. Moore, the fee petitioner here,
apparently had a hand in the drafting of the memo. He is self-
described as “a former junior member of the White House staff
who worked for Mr. Watkins within the White House Office of
Administration during 1993-94.”

Following these events, the GAO filed a criminal referral
with the Department of Justice (“DOJ”), suggesting that
Watkins may have made false statements when interviewed by
the GAO. Because Watkins was a covered person under the
Independent Counsel Act, see 28 U.S.C. § 591(b), the Attorney
General (“AG”) initiated a preliminary investigation pursuant to

1
We have had recent occasion to review the facts of this
matter in In re Madison Guaranty Savings & Loan (Watkins Fee
Application), 375 F.3d 1211, 1212-13 (D.C. Cir., Spec. Div., 2004)
(per curiam). Rather than re-plow recently tilled ground, we have
adopted from that opinion much of the language for the background
portion of this opinion.
 3

28 U.S.C. § 592, in order to determine whether further
investigation was warranted. Although the usual duration for a
preliminary investigation is 90 days, the AG took considerably
less time in this case, concluding rather quickly that further
investigation was indeed warranted. Consequently, she
requested that this court expand the Independent Counsel’s
(“IC” or “OIC”) jurisdiction to investigate, among other things,
whether Watkins or Clinton had made false statements to the
GAO regarding the Travel Office firings.

The IC then conducted an extensive investigation of the
matter, including Moore’s involvement. Ultimately, the IC
determined that Moore would not be charged with any offense.
Pursuant to § 593(f)(1) of the Act, Moore now petitions the
court for reimbursement of the attorneys’ fees in the amount of
$74,477.04 that he claims were incurred in defense of the IC’s
investigation.

II. Discussion

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
 4

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, 1077-82 (D.C. Cir., Spec. Div., 1993) (per curiam). The
petitioner “bears the burden of establishing all elements of his
entitlement.” In re North (Reagan Fee Application), 94 F.3d
685, 690 (D.C. Cir., Spec. Div., 1996) (per curiam).

The primary issues regarding Moore’s fee petition are
whether or not he has satisfied the “but for” requirement as well
as which time periods he was considered a “subject” of the IC’s
investigation. For the reasons stated below we find that Moore
fails the “but for” test, and on that basis alone is not entitled to
reimbursement of fees incurred during the IC’s investigation.
We therefore need not address the “subject” issue, although we
note that we are in agreement with both the IC and the DOJ that
at least for a limited period of time Moore’s status was indeed
that of a subject.

* * * * * * * * *

We have in the past held that "[a]ll requests for attorneys'
fees under the Act must satisfy the 'but for' requirement of" the
Act. In re Sealed Case, 890 F.2d 451, 452 (D.C. Cir., Spec.
Div., 1989) (per curiam). On numerous occasions we have also
held that “the contemplation of the legislation is not that
subjects of independent counsel investigations will be
reimbursed for all legal fees, but only . . . for those legal fees
that would not have been incurred by a similarly-situated subject
investigated in the absence of the Act.” See In re Madison
Guaranty Savings & Loan (Clinton Fee Application), 334 F.3d
1119, 1123 (D.C. Cir., Spec. Div., 2003) (per curiam).
 5

Moore’s position. Moore contends that there are several
“independent grounds . . . for why he would not have been
forced to incur the legal fees he did in this investigation were it
not for the requirements of the Act.” His first argument is that
“there would not have been an investigation at all because who
ordered the Travel Office firings was inconsequential from a
criminal standpoint.” In support of this statement, Moore first
notes that the IC in his Final Report acknowledged that the
firings were lawful. He then goes on to claim that the “principal
controversy” in the matter was whether anyone should be held
publicly accountable for the firings. And he sums up this
argument by asserting that “it is highly improbable that a
professional prosecutor would have initiated an investigation
into the motivation for the lawful Travel Office firings almost
three years after the fact.”

Moore next asserts that no “prosecutor’s office other than
the OIC would have spent three to four years investigating [him]
in light of his low rank and largely incidental knowledge of the
underlining facts prior to determining not to prosecute. The
OIC’s initial classification of Moore as a witness normally
would have ended his risk of prosecution . . . .”

Moore’s third argument for passing the “but for” test
contends that the AG, instead of “conduct[ing] a comprehensive
preliminary investigation of the matter, . . . simply requested
that the Independent Counsel’s jurisdiction be expanded to
include an investigation of those allegations,” and that if the IC
had not already been investigating related matters, then no
investigation of the matter by the AG would have been
undertaken. Moore’s reasoning behind this argument is
somewhat convoluted: both the IC and the GAO referred the
matter of the alleged false statements to the AG, who requested
that this court expand the IC’s jurisdiction to investigate the
matter; if the IC had not been investigating the matter then the
 6

only referral would have been from the GAO; false statements
made to the government are prosecuted under 18 U.S.C. § 1001;
prosecutions can only be brought under § 1001 if the false
statements were made to departments or agencies of the
executive branch, see Hubbard v. United States, 514 U.S. 695
(1995); consequently, since GAO is an arm of the Congress, and
not the executive branch, then “the Attorney General would not
have had any reason to initiate a criminal investigation into Mr.
Watkins’s statements;” if there had been no ongoing
independent counsel investigation then there would never have
been an investigation of the alleged false statements; therefore,
“but for” the IC’s investigation there would have been no
investigation of the matter, and Moore would not have incurred
any legal fees.

For his fourth argument, Moore contends that in the past the
court has awarded fees to applicants “where an independent
counsel’s investigation constituted a substantial duplication of
prior investigations.” He claims that in his case “the
Independent Counsel’s investigation was duplicative of seven
other preceding investigations” and that the IC’s investigation
“primarily replicated these earlier investigations, covered little
new ground, and arrived at substantially the same conclusions.”
According to Moore, the seven prior investigations of the Travel
Office firings replicated by the IC were conducted by: the White
House; the FBI; the Office of Professional Responsibility; the
GAO; the Treasury Department; the Senate Banking Committee;
and the House Committee on Government Reform and
Oversight.

Moore bases his fifth argument for passing the “but for” test
on “the Independent Counsel’s reversal on Moore’s ‘subject’
status following his substantial cooperation.” In particular,
Moore asserts that when the IC first began its investigation of
this matter, he cooperated by producing documents to, and
 7

appearing before, two federal grand juries, and also at that time
producing documents and being deposed by a Congressional
committee. He claims that soon thereafter the “OIC again
informed him that he remained a witness and not a subject of the
investigation.” However, after the passage of a year, during
which Moore asserts that he “was not contacted by the OIC and
no new evidence against him was developed,” he was
“inexplicably advised” that his status was changed to that of
subject. In arguing that under these circumstances he passes the
“but for” test, Moore relies on two fee opinions issued by this
court following an investigation of the Iran/Contra matter by
independent counsel, i.e., In re North (Shultz Fee Application),
8 F.3d 847, 849 (D.C. Cir., Spec. Div., 1993) (per curiam); In re
North (Cave Fee Application), 57 F.3d 1117, 1119 (D.C. Cir.,
Spec. Div., 1995) (per curiam). In both of those cases,
according to Moore, the fee applicants, like him, had cooperated
with the independent counsel and were considered to be only
witnesses until some time (i.e., four and one-half years) later
when their statuses were changed to subjects. Moore notes that,
consequently, the court held that the applicants fulfilled the “but
for” requirement, and he quotes from the court’s opinions:

[I]t is not reasonable to expect that a professional
prosecutor, as opposed to an independent counsel under the
Act, would have been making subjects out of persons
theretofore treated as witnesses four and one-half years
after the commencement of an investigation, absent some
circumstance far more extraordinary than any displayed to
us here.

Shultz, 8 F.3d at 851; Cave, 57 F.3d at 1121.

Returning to his own situation, Moore claims that “[a]s in
Shultz and Cave, the Court should conclude that [his] attorneys’
fees prior to being immunized would not have been incurred
 8

‘but for’ the requirements of the Act.”

IC’s position. The IC puts forth two separate arguments for
why she believes that Moore has not satisfied the “but for”
requirement. As she did concerning the fee application of
Watkins, the IC argues that the serious allegations involved in
this matter, i.e., “whether Watkins or Hillary Clinton had
obstructed justice, committed perjury, or made false
statements,” would have been investigated in the absence of the
Act. Consequently, in the view of the IC, because Moore was
a drafter of the Watkins memo and therefore a critical witness
regarding its origin, “no matter who investigated Mrs. Clinton’s
and Watkins’ conduct, necessarily Moore would have been
questioned about the drafting of that memo.”

Second, the IC argues that Moore’s claim of passing the
“but for” test because the IC’s investigation duplicated
numerous other investigations is without merit. All of the
former investigations, according to the IC, which were
conducted before the Watkins memo was produced, concerned
the Travel Office firings. In contrast, states the IC, “the OIC did
not investigate the firings, except to the extent necessary to
determine whether Watkins or the First Lady had made false
statements.” As such, “[t]here is no evidence that the OIC’s
investigation was duplicative.”

In sum, the IC states that in order for Moore to pass the “but
for” test, he “must distinguish his attorney fees from those
incurred in a regular grand jury investigation, and this he has
failed to do.”

DOJ’s position. The DOJ also argues that Moore has not
passed the “but for” test, and states four reasons why it believes
this is so. Initially, the DOJ contends that, “as a general matter,
the record indicates that the allegations here - concerning
 9

alleged lies to Congress, the GAO, and other investigative
bodies - are clearly the sort of matters that would be investigated
in the normal course by the Department of Justice.” In support
of this contention, the DOJ notes that before the investigation by
the IC, the Travel Office matter was being looked into by
regulatory independent counsel Fiske.

Next, the DOJ addresses Moore’s third argument that the
AG, instead of conducting a lengthier preliminary investigation,
simply referred the matter to the IC, and that if no IC had been
in existence investigating related matters, then no investigation
by the AG would have been undertaken. The DOJ argues that
Moore’s implication that the preliminary investigation here was
particularly short is without merit, in that it lasted over one
month. Furthermore, the DOJ contends that Moore “does not
challenge the underlying premise for seeking appointment of an
Independent Counsel - that various known statements made
concerning the travel office matter appeared to contain material
inconsistencies,” and that “[u]nder these circumstances, a more
extensive preliminary investigation was unnecessary.” The DOJ
concludes its argument here by asserting that Moore, whatever
the merits of his legal theory concerning § 1001, “has not shown
. . . that this issue was in any way relevant to the Attorney
General’s preliminary investigation.” According to the DOJ,
Moore also does not “address the fact that the travel office
investigation also involved other statements, made to parts of the
Executive Branch, as to which there is no doubt that section
1001 applied.”

Third, the DOJ addresses Moore’s claim that he satisfies the
“but for” element because the IC’s investigation duplicated prior
investigations. The DOJ notes that for reimbursement of
attorneys’ fees purposes, the court has made clear that the only
relevant duplication by the IC’s investigation is that of the AG’s
preliminary investigation, and Moore makes no claim that any
 10

such duplication occurred.

Lastly, the DOJ rejects Moore’s assertion that he fulfills the
“but for” requirement because his status was changed from
witness to subject after the passage of a year. In particular, the
DOJ takes issue with Moore’s reliance on certain of the court’s
fee opinions in the North investigation, in which it was noted
that a professional prosecutor would not have changed a
witness’s status to that of subject four and one-half years after
the investigation had begun. The DOJ argues “that not nearly so
much time passed in the case of Mr. Moore, and that any ‘delay’
here might have been warranted by any number of
circumstances.”

* * * * * * * * *

In his first three arguments for passing the “but for” test,
Moore in effect contends that if the IC had not already been
investigating related matters, then, because the matter here was
not serious and his role was minor, no other prosecutor would
have bothered looking into the allegations. In Watkins the fee
applicant made a somewhat similar contention, arguing that an
ordinary citizen would never have been subjected to an
investigation such as he was. In rejecting that argument, we
noted that “the allegations here of false statements to federal
entities and the failure to produce subpoenaed documents would
have been investigated with or without the Independent Counsel
statute.” Watkins, 375 F.3d at 1216. Applying the same
reasoning here, we find that in all likelihood Moore’s
involvement in the matter would have been investigated
regardless of who conducted the investigation.

Moore’s fourth argument, concerning duplication of
investigations, is without merit. As the DOJ correctly notes, we
have consistently held that the “but for” requirement will be
 11

satisfied if the IC duplicates the AG’s preliminary investigation
but that duplication of other investigations, including those of
other government agencies or the Congress, will not suffice.
See, e.g., Watkins, 375 F.3d at 1215-16. Here, Moore claims
that the IC duplicated seven other investigations, none of which
involved the preliminary investigation. Therefore, this argument
must fail.

Concerning Moore’s fifth argument, that after one year of
being a witness his status was inexplicably changed to subject
and therefore his situation falls within the precedential orbit of
Shultz and Cave, the facts would not appear to support his
contention. First, the court in Cave and Shultz stated that “in the
experience of the court,” it would not be “reasonable” to expect
a professional prosecutor to change the status of the fee
applicants after the lengthy period of four and one-half years.
Here, the period of time in question is substantially less, only
one year, and any change in status after this relatively short
period of time would not appear to be unreasonable.
Furthermore, in Cave and Shultz it was not just the length of
time that the independent counsel took to change the status of
the fee applicants from witness to subject that led to the court’s
holding that he satisfied the “but for” requirement, but also that
the IC treated as criminal conduct which had never before been
considered as such, i.e., circumvention of the Boland
Amendments. Cave, 57 F.3d at 1121; Shultz, 8 F.3d at 851. In
contrast, the main allegations in this matter concerned perjury
and obstruction of justice. As both the DOJ and the IC point
out, such crimes are routinely investigated by the DOJ.

In sum, we find that Moore has not passed the “but for” test,
and is therefore not eligible for reimbursement of fees incurred
during the IC’s investigation.

* * * * * * * * *
 12

Moore argues that in any event he should be reimbursed for
attorneys’ fees incurred in reviewing and responding to the IC’s
Final Report. He contends that in the Report the IC made an
“unjustified public attack on his professional reputation” by
“unfairly impl[ying] that [he] acted improperly by initially
refusing to disclose documents subject to a claim of attorney
client privilege.” For these tasks he seeks $14,597.50 in fees
and $849.02 in costs.

Additionally, in preparing his response to the Report,
Moore hired a second law firm to produce an “expert” affidavit
addressing Moore’s attorney-client privilege claim. This
affidavit was submitted along with Moore’s own comments to
the Report. According to Moore, the affidavit stated that he had
“acted correctly and in accordance with his ethical obligations
as an attorney,” and was necessary because of the IC’s
“unreasonable and unwarranted insistence on attacking [his]
professional credibility without rationally evaluating the issues.”
The fee for this affidavit, for which Moore seeks reimbursement,
was $17,892.41.

In sum, for responding to the IC’s Final Report Moore seeks
reimbursement in the amount of $33,338.93. This is
approximately 45% of the total fees sought.

In her evaluation, the IC argues that this amount “seems
excessive.” She notes that in contrast to Moore, Watkins spent
only $7,517.75 in responding to the Final Report. Furthermore,
she points out that Moore’s primary contention in his comments
to the Final Report was that it was reasonable for him to assert
the attorney-client privilege concerning the Watkins memo. In
the opinion of the IC, the amount spent by Moore on this
contention is unreasonable.
 13

The DOJ also takes issue with the considerable amount
requested by Moore for reviewing and responding to the IC’s
Report. Noting that this amount is a substantial percentage of
the total requested, the DOJ cites In re North (Gardner Fee
Application), 30 F.3d 143, 147 (D.C. Cir., Spec. Div., 1994), and
states that the amount “cannot, consistent with this Court’s
precedent, be reimbursed in full,” as it is “disproportionately
large in light of the overall sum sought.”

Section 594 of the Act imposes the requirement that the IC
“file a final report with the division of the court, setting forth
fully and completely the description of the work of the
independent counsel . . . .” 28 U.S.C. § 594(h)(1)(B). The Act
further allows that the court make the Report available to those
named in it for their review and comment. 28 U.S.C. §
594(h)(2). Consequently, in In re Olson, 884 F.2d 1415, 1421
(D.C. Cir., Spec. Div., 1989) (per curiam), we observed that
“attorneys’ fees incurred by the subject of an investigation in the
preparation of comments to the Report are reimbursable where
they are reasonably related to the substantive defense.”

We have further noted that, outside of the requirements of
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 . . . the filing of reports by Independent Counsels is a
complete departure from the authority of a United States
Attorney and is contrary to the practice in federal Grand Jury
investigations.” In re Madison Guaranty Savings & Loan
(Clinton Fee Application), 334 F.3d at 1128 (internal quotation
marks and citations omitted). Moore is therefore eligible for
reimbursement of attorneys’ fees incurred for the task of
responding to the Final Report, as such fees would not have
been incurred but for the requirements of the Act.
 14

As noted previously, Moore’s request for reimbursement in
this area is approximately 45% of the total amount sought.
Other cases, in which the fees sought for Final Report review
and comment also amounted to a significant portion of the total,
led us to make substantial reductions. In In re North (Gardner
Fee Application), 30 F.3d at 147-48, the fee applicant requested
reimbursement for responding to an independent counsel’s Final
Report in an amount that was more than one-fourth of the total
fees incurred. Although we noted that the final report
concerning the investigation “was lengthy and complex and cast
a number of aspersions on [the fee applicant],” we nevertheless
reduced the amount sought for this task by one-half, to 13% of
the total incurred. Likewise, in In re North (Shields and Gruner
Fee Applications), 53 F.3d 1305 (D.C. Cir., Spec. Div., 1995)
(per curiam), for responding to the Final Report the fee
applicants sought an amount that was close to 20% of the total
requested. Noting that this was “a significant part” of the total
requested, we reduced the amount by one-half, to 10%. 53 F.3d
at 1308. See also In re North (Regan Fee Application), 72 F.3d
891, 896 (D.C. Cir., Spec. Div., 1995) (per curiam) (request for
responding to Final Report reduced by one-half, to 15% of total
request). Therefore, in conformance with this line of cases, we
find that a more reasonable figure here would be reimbursement
of 10% of the total requested, or $7,447.70. Cf. Watkins, 375
F.3d at 1216 (awarding a similar amount, $7,517.75, to Watkins
for the same task).

Conclusion

For the reasons set forth above, we allow the petition for
fees of Matthew L. Moore only to the extent of $7,447.70.
Except as herein specifically allowed, the petition is denied.