Supreme Court Allows Independent Counsels : Ruling Covers Iran-Contra, Other Cases

By DAVID G. SAVAGE

June 30, 1988 12 AM PT

Times Staff Writer

WASHINGTON — In a sharp setback for the Reagan White House, the Supreme Court Wednesday upheld the power of Congress to establish a system of independent counsels to investigate and prosecute corruption in the executive branch.

In a 7-1 opinion written by Chief Justice William H. Rehnquist, the high court flatly rejected the Administration’s argument that these independent prosecutors infringe on the constitutional powers of the President.

Does Not Undermine Powers

The independent counsel law does not “impermissibly undermine the powers of the executive branch” nor does it “disrupt the proper balance” of power between Congress and the White House, Rehnquist said.

The decision clears away a legal cloud over the prosecution of Lt. Col. Oliver L. North and former National Security Adviser John M. Poindexter in the Iran-Contra case and the convictions of former Reagan aides Michael K. Deaver and Lyn Nofziger. Lawyers for all four men had said that their clients’ cases should be dismissed because their prosecution by an independent counsel was unconstitutional.

A Justice Department spokesman said that the department was disappointed with the independent counsel ruling. The White House also issued a statement saying that the decision changes nothing because, despite its “doubts about the constitutionality of the Independent Counsel Act, the Administration has faithfully and consistently complied with all of the act’s requirements.”

Walsh Applauds Ruling

Iran-Contra prosecutor Lawrence E. Walsh applauded the ruling. The independent counsel law “provides a workable solution to a difficult problem. We are gratified that the Supreme Court has upheld (its) constitutionality,” Walsh said.

The independent counsel provision, part of the Ethics in Government Act of 1978, grew out of the Watergate scandal. Five years earlier, President Richard M. Nixon had suddenly fired special prosecutor Archibald Cox because Cox had sought tapes of White House conversations incriminating Nixon.

To prevent future presidents from interfering in criminal investigations of top executive branch officials, Congress set up a system whereby a special three-judge panel could appoint an independent counsel to investigate and prosecute alleged crimes by Administration officials. The attorney general retains the power to trigger these independent investigations, but he and the President can fire the counsel only for “good cause.”

Critics of the law, including President Reagan and Atty. Gen. Edwin Meese III, attacked the law on two main grounds. First, they said that it violated the clear language of the Constitution which gives the President authority to appoint “all other officers of the United States.” This includes all federal prosecutors, they said. Second, they argued, it violates the general principle of the separation of powers because it takes away from the President a core executive power, the authority to prosecute crimes.

Chief Justice Rehnquist rejected both contentions. Article II of the Constitution does say that the President must appoint all U.S. officers but its very next line states: “But Congress may by law vest the appointment of such inferior Officers, as they think proper, in the President, in the Courts of Law, or in the Head of Departments.” Congress may not be able to give itself the power to appoint Cabinet officers or other high level officials, Rehnquist said, but the independent counsels “perform only certain, limited duties.” Therefore, they can be considered “inferior officers” and Congress may by law vest their appointment in the three-judge court, he said.

Turning to the separation-of-powers argument, Rehnquist agreed that one branch of government may not steal away a crucial power from another branch. But that is not the case here, he said. The independent counsel law pertains to only “a certain class of criminal activity.” Moreover, the attorney general retains the authority to trigger the investigations and to remove an independent counsel for misconduct.

The independent counsel law does not “prevent the executive branch from accomplishing its constitutionally assigned functions,” he said. “Notwithstanding the fact that the counsel is to some degree ‘independent’ and free from executive branch supervision . . . , in our view these features of the act give the executive branch sufficient control over the independent counsel to ensure that the President is able to perform his constitutionally assigned duties,” Rehnquist said.

Reverses Recent Trend

The high court’s decision reverses its recent trend to insist on a rigid separation of powers between Congress and the executive branch. In 1983, the court struck down Congress’ use of a one-house veto to block federal agencies’ regulations, and in 1986 it invalidated a part of the Gramm-Rudman budget balancing law because the comptroller general, a congressional employee, was permitted to implement across-the-board budget cuts. These laws were judged unconstitutional because Congress was infringing on the powers of the executive branch.

Based on those opinions, Justice Department conservatives believed that the high court also would strike down the independent counsel statute.

But only Justice Antonin Scalia, a former Justice Department official and a Reagan appointee, voted to invalidate the law. In a 38-page dissent, part of which he read from the bench, Scalia said that the law unwisely takes away a part of the President’s power to prosecute crime. “All purely executive power must be under the control of the President,” he said. Justice Anthony M. Kennedy did not vote in the case.

Though the independent counsel law was passed during the Administration of former President Jimmy Carter, it has proven to be a particular thorn for the Reagan Administration. After independent counsel investigations, former White House deputy chief of staff Deaver was convicted of perjury, while former Reagan political adviser Nofziger was convicted of illegal lobbying.

North and Poindexter have been indicted on 23 counts of fraud and conspiracy in the Iran-Contra case, while Meese is under investigation by still another independent counsel for allegedly aiding friends in gaining government contracts.

If the high court ruling had gone the other way, some and perhaps all of these investigations and convictions could have been jeopardized.

Decides Olson Case

The actual case that came before the high court arose over one of the most obscure independent counsel investigations. In 1983, Theodore B. Olson, then an assistant attorney general in the Justice Department, was accused by a congressional committee of having lied about the Administration’s handling of the clean up of toxic wastes. The attorney general agreed to have an independent counsel investigate these allegations, and Washington lawyer Alexia Morrison was eventually chosen.

But when Morrison subpoenaed Olson to appear before a grand jury, he refused, contending that the independent counsel statute was unconstitutional. A federal judge dismissed his challenge but in January a federal appeals court on a 2-1 vote struck down the law. The opinion, with two Reagan appointees in the majority, said that the law unconstitutionally took away the President’s power to appoint prosecutors and that it gave Congress too much power to hound the Administration.

The ruling (Morrison vs. Olson, 86-1279) reverses that conclusion and allows Morrison to proceed with her investigation.