Issue Raises Hackles in Congress : President Can Fire Walsh, Justice Dept. Official Says

WASHINGTON —  A Justice Department official told Congress on Thursday that President Reagan could order independent counsel Lawrence E. Walsh to grant immunity from prosecution to Lt. Col. Oliver L. North and that the President could fire Walsh if he refused to do so.

The statement, by Assistant Atty. Gen. John Bolton, immediately raised the hackles of some members of Congress, who said they believe that the Reagan Administration is threatening another “Saturday Night Massacre,” the label given to the October, 1973, firing of Watergate special prosecutor Archibald Cox by a Justice Department official acting under orders from former President Richard M. Nixon.

But Bolton’s statement was immediately played down by other department officials, who expressed particular anger at Sen. Carl Levin (D-Mich.) for asking Bolton what they called “loaded hypothetical questions.” They said that Reagan had no intention of forcing Walsh to grant immunity to North or of seeking Walsh’s dismissal.

Challenges to Counsels

Bolton’s response to questions from Levin assumed added weight because the constitutional authority of Walsh and another court-appointed counsel, Whitney North Seymour Jr., is being challenged anew by North and by former White House aide Michael K. Deaver, who has been indicted on perjury charges growing out of his post-government lobbying activities.

Those challenges are based on the charge that Congress, in creating the post of independent counsel as part of the 1978 Ethics in Government Act, illegally usurped executive branch powers by providing that independent counsels be appointed by a panel of three Court of Appeals judges.

North’s Position

Attorneys for North and Deaver have argued that only the Justice Department--an executive branch agency governed by the President--has the power to prosecute.

Bolton’s position puts the department at odds with North and Deaver because the department regards the independent counsel as indeed being subject to the executive branch. Because the 1978 law is to expire early next year, Levin has reintroduced it and is attempting to test the strength of its provisions.

Removal Terms Spelled Out

The current law, which was intended by Congress to ensure that special counsels like Walsh have political independence from the President and his aides, nonetheless says that the counsel may be removed from office “by the personal action of the attorney general and only for good cause, physical disability, mental incapacity or any other condition” that impairs his ability to perform his duty.

Bolton was asked in writing by Levin, a member of the Senate Governmental Affairs Committee: “If the President ordered independent counsel Lawrence E. Walsh to grant immunity from criminal prosecution to Lt. Col. Oliver North and Mr. Walsh refused to do so, is it the opinion of the Department of Justice that the President would be able to meet the good-cause requirement for removal in the independent counsel statute were he subsequently to fire Mr. Walsh?”

Bolton, speaking for the department, told the committee: “We believe that the answer to this question is affirmative: An independent counsel must follow the lawful direction of the President.”

Spokesman Patrick Korten said that the Justice Department stands behind Bolton’s answer: that the failure to obey a presidential order would constitute “good cause” for dismissal.

“But nobody is giving such orders,” Korten quickly added. “That’s ridiculous, and Sen. Levin knows it.”

‘Hypothetical Answer’

Although Bolton might have refused to answer a question that he deemed inflammatory, he felt obliged to give “a hypothetical answer” because the committee is studying the precise language of the statute, other department officials said.

Earlier this year, to ensure that North’s challenge of Walsh’s authority would not delay or impair the prosecutor’s work, the Justice Department granted Walsh a “backup” appointment as an executive branch special prosecutor in case a court decision found that Walsh was an appointee of the judiciary branch.

Bolton told the committee also: “We might point out, as a purely technical matter, that the sort of immunity you seem to be describing . . . --immunity from prosecution as opposed to testimonial or use immunity--could be effectively conferred by the President himself through the exercise of his pardon power” without relying on Walsh.

But Levin criticized Bolton’s position, saying: “It’s one thing if the President were directly to pardon the subject of an independent counsel investigation through the exercise of his constitutional authority to pardon. It’s altogether different for the President to fire an independent counsel for refusing to grant a person immunity from prosecution.

‘That’s Not Good Cause’

“That’s not good cause for removal under the statute by any stretch of the imagination,” Levin said.

The White House has said previously that Reagan has no plans to pardon either North or his superior, former National Security Adviser John M. Poindexter, who resigned in the scandal. However, Reagan did urge Congress to grant them limited immunity from prosecution for their testimony.