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no conflict; in a few instances where there is conflict, we advise the government employee of his right to obtain private counsel at his own expense to raise other issues or take appeals. (The recent Zwiebon litigation in the Supreme Court is the only exception to this practice of which I am aware.)

The change now proposed not only raises serious legal questions but would have enormous practical implications for the operation of this Division. I am not at all sure that the Justice Department possesses the legal authority to authorize its attorneys to advance legal arguments and take appeals which are contrary to the United States' interests. (Should we undertake this policy, we can expect, for example, that within the next year Justice Department attorneys will be arguing for the legality of all COINTELPRO programs.) There may also be legal questions concerning the authority of Justice Department attorneys to seek appeals and Supreme Court review for governmental defendants absent the approval of the Solicitor General. (I suggest we seek Bob Bork's comments regarding this question.)

Finally, there is a practical concern which militates against this change. If we become a kind of private counsel raising arguments which may be adverse to the interests of the United States, the attorneys in the Department of Justice may be considered by the courts not to be under the shield of the somewhat eroded Barr v. Matteo exemption from civil monetary liability for any malpractice claims of disgruntled clients. The Department of Justice may have to provide and pay for malpractice insurance policies for Department of Justice attorneys to cover potential liability claims. On balance, I conclude that while we should seek to represent as many government employees as possible and to avoid the retention of privat counsel, we should not alter our traditional representational practices to include permitting departmental lawyers for individual defendants to take legal positions which are opposed to the interests of the United States.

I recognize that the thrust of my comments at our last meeting favored a system under which the responsibility of the individual Department of Justice lawyer ran solely to his individual client. The most important aspect of such a system is that it frees the individual lawyer from the responsibility of delivering to the Criminal Division incriminating

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information received by the lawyer during the course of his representation; as to that aspect of the lawyer's responsibility, I have not changed my view. Further reflection on the other aspect of the individual lawyer's relationship with the Department and his individual client whether the lawyer should be free to take a legal position inconsistent with the Department's position leads me to conclude that in this respect the lawyer should continue to be subject to traditional Department of Justice control and supervision.

7.

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We would not favor the paragraphs numbered 15.4(i) and 15.5 (d), which preclude employees from asserting the invalidity of representation regulations. We doubt the necessity of such an agreement, and we see in it the infirmities of any waiver requirement. Specifically, I do not think we should ask a person to waive the possible invalidity of governmental action, particularly where it involves legal ethics and professional responsibility.

Conclusion

In general, we deal with the problem of the extent to which we should separate and insulate the Civil representation .function from the overall Justice Department setting in which the individual Department lawyer operates. The ultimate in separateness and insulation would exist if (a) the individual lawyer were freed from his obligation to inform the Criminal Division of incriminating evidence acquired during the course of his investigation; (b) all Civil representation cases were assigned to the Civil Division; (c) all supervisory authority over this aspect of Civil Division lawyers' work were vested finally in the Assistant Attorney General in charge of the Civil Division, and (d) lawyers representing individual civil defendants were free to advance legal arguments, notwithstanding their impact on the total interests of the United States.

On reflection, and on balance, however, I feel that it is not in our interest to go that far. The most important problem is to ensure the sanctity of information that comes to the lawyer in the lawyer/client relationship. This, plus

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the allocation of all civil representation cases in the Civil Division can be accomplished with relatively little adverse I do not recommend that we take

impact to the Department.

the other two steps.

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[Attachment "A" to Rex Lee memo of April 16, 1976 (exhibit 5): Business Week, Feb. 23, 1976.]

LEGAL AFFAIRS

The ethics squeeze on ex-government lawyers

Lawyers hold a high proportion of the top jobs in the federal government. And when those lawyers leave government service, a lot of them naturally gravitate to the Washington law firms that specialize in representing clients before their former agencies. The result is a chronic ethical dilemma that has bedeviled generations of Washington attorneys.

Now the new concern for professional ethics may transfer the problem to the law firms themselves, forcing a major change in the relationship be tween large corporations and their blue-chip counsel. A stringent reading by the District of Columbia Bar of its ethical code could compel law firms to sever relationships with corporate clients-some of long standing-right in the middle of a case. On a complicated matter, such as a major antitrust case, it could take a new firm at least a year to work into the litigation.

The problem arises out of the complicated skein of law, executive orders, and individual agency rules that define just how far former civil servants can go in representing private interests before their former agencies.

The general rule prohibits former federal employees from ever appearing before their former agency in a matter in which they "personally and substantially" participated and requires them to wait one year before appearing in connection with any other matter under their general supervision pending while they were in office. Several federal agencies are even tougher. The Consumer Product Safety Commission, for example, has a flat ban on any former employee going to work in any capacity for any maker of consumer goods for one year. Beyond government rules, courts and agencies usually require lawyers to follow the American Bar Assn.'s code of ethics.

Hard hit. Two years ago the ABA forbade all members of a law firm to handle a matter that any of their colleagues at the firm was ethically prohibited from working on. The bar association had private conflicts of interest in mind. and did not give much thought to the impact on former government lawyers.

For a firm such as Covington & Burling in Washington, with a roster that includes former antitrust chief Edwin M. Zimmerman, former Treasury Under Secretary Edwin S. Cohen, and former Food & Drug Administration general counsel Peter B. Hutt, the rule had the potential for disaster. "I guess it's a problem all the time in Washington,"

82 BUSINESS WEEK: February 23, 1976

Ethics committee Chairman Freedman: The D. C. code will have national impact.

says Lewis Van Dusen, chairman of the ABA ethics committee.

But other firms were also worried. In firms such as New York labor law specialists Vedder, Price, Kaufman, Kammholz & Day, the rule might have jeopardized 200 to 300 matters.

The issue came to a head last year when the Defense Dept. asked Van Dusen's committee whether a firm includ

The D. C. bar's current draft opinion takes the tough position the ABA rejected

ing a former Navy Dept. official could handle a contract dispute with that service. Interpreting the rule literally at first, the committee said no. But another prominent Washington firm, Wilmer, Cutler & Pickering, joined in protest with Covington & Burling and such government allies as the Internal Revenue Service, the Securities & Exchange Commission, and particularly Antonin Scalia, head of the Justice Dept.'s Office of Legal Counsel. "We, with the support of Mr. Scalia, were able to persuade the committee," says Lloyd N. Cutler coolly.

Their argument is that since a party to a lawsuit may always waive other disqualifications of an opposing attorney, the law firm itself ought to be per

Lee Baker

mitted to take a case that it would otherwise be barred from taking as long as the government does not object. Although it has yet to publish its formal opinion on the question, the ABA is going along with this consent concept. However, the individual lawyer must not discuss it with other partners or share in the profits generated.

Just last month the U. S. Court of Appeals in San Francisco went even further than Cutler when opposing attorneys tried to disqualify a lawyer because of his former private law firm work. The lawyer now works for a Salt Lake City firm representing gasoline dealers in a broad-based antitrust class action against major oil companies. Exxon Corp. and Shell Oil Co., two of the defendants, tried to remove the entire firm from the case, arguing that the lawyer had previously performed legal work for each of them. The appeals judges agreed that the individual lawyer could be kept off the case but refused to disqualify the firm.

Another try. The ABA's apparent change of heart does not end the lawyers' problem, however, because the District of Columbia bar is about to publish its own ethical ruling on the same question. In its current draft, it takes the tough position that the ABA rejected. Advocates of a softer position are lobbying the local committee, which will consider the question later this month.

"I don't know how we will come out," says committee chairman Monroe H. Freedman, formerly a law professor at George Washington University and now dean of the Hofstra Law School. But unlike the ABA's original ruling, the current D. C. bar opinion was made intentionally, with the plight of former government lawyers firmly in mind. If the Washington bar does maintain its ground, the rule would have national impact because it might cover appearances by out-of-town lawyers.

Settling the law firms' problems will not help to clarify the currently haphazard federal conflict-of-interest rules. But clearer guidelines may be on the way. The Ford White House may use a Congressional committee's data to revise rules last promulgated by President Johnson. The investigations subcommittee of the House Commerce Committee has asked nine regulatory agencies where their commissioners worked before and after their government jobs and is now compiling results of a survey sent to 590 former high officials. The goal: to pinpoint the extent of the "revolving door" problem.

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LEGAL AFFAIRS

21-221 O-78-6

[Attachment "B" to Rex Lee memo of April 16, 1976 (exhibit 5): Excerpt from Kesselhaut v. United States (March 16, 1976).]

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Mr. Prothro gave his subordinates policy guidance and read their correspondence nightly. He personally signed one letter on the subject.

When he was scheduled to meet one of the Kesselhauts at a conference in Washington--the only time, so far as we know that either of the Kesselhauts were to come to Washington--the meeting had to be cancelled because he, Mr. Prothro, was to be out of the city. The indispensability of his presence at the meeting was recognition that he was the responsible officer, perhaps to do the work through subordinates, but to be, himself, responsible at

the agency.

Conclusion as to DR 9-101 (B). All the conditions are thus met for the application of DR 9-101 (E) to disqualify Mr. Prothro. He was a "public employee." He has accepted "private employment" in

a "matter" in which he had as a public employee a "substantial

responsibility."

A

Imputation of the Disqualification to the Partnership. question preliminary to any imputation to the firm representing the plaintiffs'of the personal disqualification of Mr. Prothro is, necessarily, whether Mr. Prothro is a partner in the firm.

It is

held that he is. He is listed as such in Martindale-Hubbell, the standard law directory, and he states in his affidavit that he has the power to act for and bind the firm. His private and internal agreement that he is not to share in the firm's income but is to be paid an agreed rate for such hours of work as he

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