have any retroactive effect on existing cases in which private counsel already have been retained. To the extent that retention of private counsel will continue to be necessary, the Department should be given specific authority to retain private counsel. This authority should apply only when there is a conflict among defendants and not when the conduct of a Federal employee in question in a civil suit is simultaneously the subject of criminal investigation. Any legislation giving the Department authority to retain private counsel should limit the independence of private counsel to assert arguments or positions which are not in the interest of the United States to assert. If a Federal employee is denied representation because of the pendency of a criminal investigation, the employee later should be reimbursed for the cost of retaining private counsel in his civil suit if the Department fails to indict or if the employee is found innocent after a trial on the merits.

A. NO FURTHER APPROPRIATIONS OR CONTRACTS

Section 665 of title 31 provides that no officer or employee shall "involve the Government in any contract or other obligation *** unless such contract or obligation is authorized by law." This provision states the obvious.

Until the Department is properly authorized to retain private counsel, no further funds may be appropriated for that purpose, and no new contracts may be awarded by the Department.

B. CONTINUED PAYMENT OF PRIVATE COUNSEL UNDER EXISTING CONTRACTS

The absence of statutory authority of the Department to retain private counsel has not as yet been formally adjudicated. The staff is aware that issuance of this staff report may well precipitate efforts formally to adjudicate this question. It is not possible to speculate how long it will take before any such adjudication is resolved. There must, however, be a decision now on whether or not the Department can continue to make payments to existing private counsel pending resolution of the statutory authority issue.

In making this decision the staff recognizes that sudden termination of payments to private counsel already under retainer would result in chaos. Serious damage to the morale of the Federal service and to individual defendants may result. The Department recognizes that if such contracts were suddenly terminated it—and perhaps also its officers who were responsible for issuing the retention contracts-would immediately be subject to suit by the law firms which have been retained. See exhibit 10 at page 132.

The dilemma faced by the Department is one of its own making and one compounded by its giving incorrect information on its statutory authority to the Appropriations Committees. The staff, however, concludes that until the validity of the Department contracts is formally adjudicated by the appropriate authorities, the only responsible course is for the Department to continue to pav private counsel who have already been retained. These private counsel and their Federal employee clients have relied on the Department's representative that it had statutory authority to issue its contracts. As it continues to make

payments, however, the Department should notify these private counsel that their retention contracts are in jeopardy. The Department should take every step to avoid exhausting its existing appropriations to pay private counsel. Existing private counsel should be encouraged to pare their claims for repayment. Contracts with private counsel should be phased out whenever possible.

This course of action should present no risks to private counsel who receive further payments. At such time as the retention contracts are held to be invalid, private attorneys can be assured that it is likely that any payments they have already received will not need to be refunded. On a quantum meruit basis, private attorneys should be able to resist any such claim for reimbursement.

Also of immediate concern are officers in the Department who certify payments to private counsel, who may be in personal jeopardy for payments made without statutory authority. See 311 U.S.C. 82(c). At present certifying officers are relying on two legal opinions of the Office of Legal Counsel that retention of private counsel is lawful. Although these opinions appear to be erroneous, these determinations alone should be enough to immunize certifying officers from liability.

C. PRIVATE BILLS TO PAY COSTS

It is likely that at some point in the near future the Department contracts with private counsel will be held to be invalid or that the Department will simply exhaust the limited funds appropriated to it for private counsel. If either of these events occurs, private counsel cannot be paid from funds specially appropriated to pay such counsel or from other funds available to the Department. However, private counsel are free to seek introduction and passage of private bills to reimburse them for their legal fees and costs.

Any private bills requested by private counsel must, of course, be processed in the same manner as are other private bills which come before the Judiciary Committee. The extraordinary events which may lead to the need for private bills should be given special weight when such bills are considered.

D. PROSECUTION DECISIONS BY THE DEPARTMENT

Private counsel are presently retained when an employee is a target in a criminal investigation, when there is a conflict among defendants, and when an employee wishes to raise a legal argument not in the interest of the United States. Of these three situations, only the first is within the control of the Department. With respect to pending criminal investigations, the present dilemma over private counsel makes it important for the Department expeditiously to determine whether or not it will prosecute employees presently being represented by private counsel. If the Department decides not to prosecute such employees, the Department can tender the services of regular Department counsel in lieu of private counsel. If the Department determines that it will prosecute, the order provides that payments to private counsel are automatically terminated. Of course, the staff recommendation does not imply that the Department should expedite any criminal investigation if that would have any adverse impact on the administration of justice.

E. AMENDMENTS TO THE TORT CLAIMS ACT

The Federal Tort Claims Act provides authority for the Attorney General to substitute the United States as the sole defendant in certain limited types of civil actions brought against Federal employees acting within the scope of their employment. The unavailability of Tort Claims Act jurisdiction for civil suits involving most constitutional torts has led directly to the Department's policy of retaining private legal counsel. By adopting appropriate amendments to the Tort Claims Act, the number of circumstances in which the Department must retain private counsel can be substantially reduced.

Presently pending before the Judiciary Committee is a bill proposed by the Justice Department, S. 2117, which would substitute the United States as the sole defendant in all constitutional tort cases involving official duties. See exhibit 55 at page 926. This bill would eliminate the need for the Department ever to retain private counsel in tort claims suits. In fact, that goal is one of the reasons the Department has proposed the bill. See exhibit 54 at page 920.

The Department has anticipated that criticism will be leveled at the bill on the grounds that it will immunize Federal employees from a very direct mechanism which holds them personally accountable for their actions. In the place of this accountability mechanism, the Department relies on existing civil service disciplinary procedures, the possibility of criminal prosecution, and impeachment to hold Federal employees accountable. See exhibit 54 at page 921.

Unfortunately the existing civil service disciplinary procedures have not proven effective and must be strengthened if the bill is to be adopted. Otherwise, the bill will effectuate a net reduction in the accountability of Federal employees. In strengthening existing disciplinary proceedings, it would, at a minimum, be essential to permit aggrieved parties to initiate and participate in the disciplinary proceeding, to seek judicial review of any proceeding which did not result in the imposition of sanctions against the employee and that such proceedings be instituted for any conduct which could form the basis for a tort suit against the individual.

Even strengthened disciplinary proceedings are not, however, effective in the case of individuals who are no longer employed by the Government and are similarly not appropriate for high ranking Presidential appointees. To immunize these individuals from civil tort suits, therefore, would have the effect of immunizing them from any system of accountability other than removal by the President, criminal prosecution, or impeachment. For individuals such as these, the likelihood of removal, prosecution, or impeachment, depends in large part on political and other factors which may be unrelated to the need for accountability. At the same time, these individuals possess awesome potential power to violate the constitutional rights of individuals. It is, therefore, necessary to continue at the election of the plaintiff the amenability of such high ranking officials to suit in their individual capacity. See exhibit 53 at page 916. In practice, few plaintiffs are likely to elect to sue such officials in their individual capacity because of the difficulty in securing any monetary recovery. In contrast, under the administration's Tort Claims amendments, a plaintiff could recov

er liquidated damages even if a defendant could raise a good faith defense.

If provisions strengthening existing disciplinary proceedings and providing for an election of remedies in litigation against high government officials, are not included in S. 2117, it is not in the public interest to amend the Tort Claims Act to immunize all Federal officials. At a time when public confidence in Federal officials is so low, immunity should not be given to Federal employees in the absence of effective accountability procedures.

F. CLARIFICATION OF DEPARTMENT AUTHORITY TO RETAIN PRIVATE

COUNSEL

By permitting aggrieved parties to elect whether to sue high-level Federal officials under the Tort Claims Act or in their individual capacity, situations may well arise in the future when the Department faces a conflict which would call for retention of private counsel to represent the official. This fact makes it necessary to clarify the Department's statutory authority to retain private counsel.

At present private counsel is retained by the Department if a Federal official is a target of a Federal criminal investigation, if there is a conflict among defendants, or if the official wishes to assert defenses not in the interest of the United States to assert. As this staff report has indicated, representation of targets has substantial potential to interfere with or have the appearance of interfering with pending criminal investigations. Similarly, retaining private counsel for the purpose of raising defenses not in the interest of the United States may involve the raising of Barker/Ehrlichman defenses or arguments that conduct which violates constitutional rights is legal. The Department should not be given the authority to retain private counsel in those situations. The Department should only be given authority to hire private counsel when a conflict among defendants arises. To mitigate the effects such a limitation will have on Federal officials, the Department should be given authority to reimburse Federal officials who must themselves retain private counsel in a civil case, if the Department is unable to represent the employee because he was under criminal investigation. It would not be appropriate to pay for private counsel while an investigation is pending, therefore, any reimbursement should be restricted to situations in which the investigation has been closed or the individual has been found innocent. Such reimbursement should not be allowed if the Department fails to prosecute for reasons unrelated to the individual's innocence, such as granting the employee immunity for prosecution in return for testimony. This policy would not have any adverse impact on a criminal investigation.

There is no simple solution to the problems created by the civil suits being brought against Federal employees in the wake of revelations about Government lawlessness. It would, however, be ironic if the failure of existing accountability mechanisms to deter this lawlessness were to lead Congress to amendments to the Federal Tort Claims Act in a way which further reduces the effectiveness of these mechanisms.

In a very real sense, the Government is responsible for the dilemma in which it now finds itself and at least some of the defendants in pending civil suits undoubtedly did abuse the constitutional rights of individuals. The adverse impact of these lawsuits on Federal employees who were not responsible for these abuses is tragic. But the plight of these employees as painful as it may be cannot justify diluting the future ability of the Government to hold all Federal employees accountable. Only by strengthening safeguards to prevent further abuses can the Government break out of the spiral in which the Government presently finds itself trapped.