In Re Oliver L. North (Clair E. George Fee Application) , 62 F.3d 1434 ( 1994 )

ORDER

PER CURIAM.

This matter coming to be heard and being heard before the Special Division of the Court, upon the application of Clair E. George for reimbursement of attorneys’ fees pursuant to section 593(f) of the Ethics in Government Act of 1978, as amended, 28 U.S.C. § 591 et seq. (1988), and it appearing to the Court for the reasons more fully set forth in the opinion filed contemporaneously herewith, that the motion is not well taken, it is hereby

ORDERED, ADJUDGED and DECREED that the petition of Clair E. George for attorneys’ fees he incurred during the investigation by Independent Counsel Lawrence E. Walsh be denied in its entirety this 21st day of October, 1994.

Separate dissenting opinion filed by Senior Circuit Judge SNEED.

PER CURIAM.

Pursuant to section 593(f)(1) of the Ethics in Government Act of 1978, as amended, 28 U.S.C. §§ 591-599, Clair E. George, former CIA Deputy Director for Operations, requests reimbursement for $1,297,950.18 in attorneys’ fees incurred as a result of the Iran/Contra investigation conducted by Independent Counsel Lawrence E. Walsh. The Act authorizes this court to award the “subject” of an independent counsel investigation certain attorneys’ fees incurred during that investigation, but only if no indictment is brought against that person. 28 U.S.C. § 593(f)(1). Although George was indicted, he claims that a pardon he received from President Bush entitles him to attorneys’ fees. We conclude that the pardon does not authorize the court to waive the restrictions set forth in § 593(f)(1). Nor does the pardon remove from George the disability caused by the indictment. Consequently, we deny his petition for the allowance of fees.

I

On December 19, 1986, this court appointed Independent Counsel Walsh “to investigate ... alleged violations of federal criminal laws ... in connection with the sale or shipment of military arms to Iran and the transfer or diversion of funds realized in connection with such sale or shipment.” In re North (Shultz Fee Application), 8 F.3d 847, 849 (D.C.Cir.1993) (per curiam).

George served as Deputy Director of Operations of the CIA during the time that the events constituting the substantive basis of the Iran/Contra matter took place. By virtue of his position, George testified before Congress on approximately seven occasions from October 1986 through December 1987. In early 1991, George voluntarily appeared for an interview in the Office of Independent Counsel. On April 5, 1991, George appeared before a grand jury.

On July 8, the Independent Counsel notified George that he was a target for criminal prosecution. Shortly thereafter, George retained counsel. On September 6, 1991, George was indicted on ten counts of false statements, perjury, and obstruction of justice. One count was dismissed before trial.

George’s first trial ended in a mistrial. The independent counsel dismissed two additional counts, and'George was retried on the remaining seven. The jury found George guilty on two counts — one of making a false statement and one of perjury — and acquitted George on the remaining counts.

On December 24, 1992, after the jury verdict but before judgment of conviction was entered, George received a “full, complete, and unconditional pardon” from President George Bush. This fee petition followed.

II

We start with the Constitution’s command: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law_” U.S. Const. art. 1 § 9 cl.7. This provision is a restriction on the power of the President to grant pardons. Knote v. United States, 95 U.S. (5 Otto) 149, 154, 24 L.Ed. 442 (1877). To comply with this constitutional provision and yet permit a qualified individual who has been investigated pursuant to the Ethics in Government Act to obtain counsel fees payable from the United States Treasury, Congress enacted 28 U.S.C. § 593(f)(1). This section authorizes this court to award to a subject of the independent counsel’s investigation “if no indictment is brought against this individual” reasonable attorneys’ fees incurred during the investigation which would not have been incurred but for the requirements of the Act. Had no pardon occurred, George would not be .entitled to reimbursement for attorneys’ fees. The issue before us is, therefore, whether the Presidential pardon of George authorizes this court to award him attorneys’ fees.

The litigant in Knote was a pardoned Confederate supporter who had lost his property through confiscation. He contended that the pardon not only wiped out the criminal consequences of his acts but also entitled him to restoration of his confiscated estate. The Supreme Court rejected his claim. The principles explained in Knote apply so clearly to George’s application for an award of attorney fees that they bear quotation at length:

A pardon is an act of grace by which an offender is released from the consequences of his offence, so far as such release is practicable and within control of the pardoning power, or of officers under its direction. It releases the offender from all disabilities imposed by the offence, and restores to him all of his civil rights. In contemplation of law, it so far blots out the offence, that afterwards it cannot be imputed to him to prevent the assertion of his legal rights. It gives to him a new credit and capacity, and rehabilitates him to that extent in his former position. But it does not make amends for the past. It affords no relief for what has been suffered by the offender in his person by imprisonment, forced labor, or otherwise; it does not give compensation for what has been done or suffered, nor does it impose upon the government any obligation to give it. The offence being established by judicial proceedings, that which has been done or suffered while they were in force is presumed to have been rightfully done and justly suffered, and no satisfaction for it can be required.

95 U.S. (5 Otto) at 153-54.

The Court noted that funds from the confiscated property had been deposited in the Treasury. The opinion continues:

Moneys once in the treasury can only be withdrawn by an appropriation by law. However large, therefore, may be the power of pardon possessed by the President, and however extended may be its application, there is this limit to it, as there is- to all his powers, — it cannot touch moneys in the treasury of the United States, except expressly authorized by act of Congress. The Constitution places this restriction upon the pardoning power.

95 U.S. (5 Otto) at 154.

Knote must be read along with United States v. Klein, 80 U.S. (13 Wall.) 128, 20 L.Ed. 519 (1871), in which the Court held that legislation diminishing the scope of the President’s pardoning power was unconstitutional. The Court relied on the doctrine of the separation of powers, saying: “Now it is clear that the legislature cannot change the effect of such a pardon any more than the executive can change a law.” 80 U.S. (13 Wall) at 148.

George asks this court to do precisely what the Constitution, Knote, and Klein forbid. He seeks to have the court authorize payment from the Treasury despite the lack of congressional authorization. To broadly interpret the statute to allow an award of attorney fees despite its text runs counter to the concept of sovereign immunity. The right to recover attorneys’ fees from the United States depends on whether Congress has waived sovereign immunity. We have previously held that we must strictly construe the waiver found in § 593(f)(1). See In re Donovan, 877 F.2d 982, 994 (D.C.Cir.1989). In determining fee awards, “care must be taken not to enlarge [a statute’s] waiver of immunity beyond what a fair reading of the language of the section requires.” Ruckelshaus v. Sierra Club, 463 U.S. 680, 686, 103 S.Ct. 3274, 3278, 77 L.Ed.2d 938 (1983) (internal quotation omitted). The language of § 593(f)(1) waives sovereign immunity for attorneys’ fees only if no indictment has been brought. We cannot expand this waiver to allow an award to a person who has been indicted.

Ill

It seems quite apparent that this court cannot pay money from the Treasury without an act of Congress authorizing the payment. Nor may the President change § 593(f)(1) by exercising his power to pardon. The question then arises: Can the pardon annul, expunge, or otherwise nullify George’s indictment so he can receive the fees pursuant to the statute? The answer is no; the pardon does not remove his disability.

Knote addresses this question. The pardon “does not make amends for the past.” 95 U.S. (5 Otto) at 153. It gives no compensation for what has been suffered. “The offence being established by judicial proceedings, that which has been done or suffered while they were in force is presumed to have been rightfully done and justly suffered, and no satisfaction for it can be required.” 95 U.S. (5 Otto) at 154.

George relies in large part on an earlier case, Ex Parte Garland, 71 U.S. (4 Wall.) 333, 18 L.Ed. 366 (1866), in which the Court said:

A pardon reaches both the punishment prescribed for the offence and the guilt of the offender; and when the pardon is full, it releases the punishment and blots out of existence the guilt, so that in the eye of the law the offender is as innocent as if he had never committed the offence. If granted before conviction, it prevents any of the penalties and disabilities consequent upon conviction from attaching; if granted after conviction, it removes the penalties and disabilities, and restores him to all his civil rights; it makes him, as it were, a new man, and gives him a new credit and capacity.

71 U.S. (4 Wall) at 380-81. Four Justices dissented from the majority’s views on the scope of the pardon. 71 U.S. (4 Wall) at 396.

Garland was a lawyer who had served as an official in the Confederacy. At the end of the war, the President pardoned him, but an Act of Congress excluded him from practicing before the Supreme' Court. Nevertheless, the Court admitted him. It did not rest its judgment on the theory that the pardon blotted out Garland’s guilt. This expansive view of the effect of a pardon turned out to be dictum. The Court held that Garland’s exclusion was punishment, which the pardon barred. 71 U.S. (4 Wall) at 381.

Chief Justice Marshall defined a Presidential pardon as follows: “A pardon is an act of grace, proceeding from the power intrusted with the execution of the laws, which exempts the individual, on whom it is bestowed, from the punishment the law inflicts for a crime he has committed.” United States v. Wilson, 32 U.S. (7 Pet.) 150, 160, 8 L.Ed. 640 (1833). Garland’s rationale is consistent with Wilson; its dictum about blotting out guilt is inconsistent with Wilson.

Garland’s dictum was implicitly rejected in Burdick v. United States, 236 U.S. 79, 35 S.Ct. 267, 59 L.Ed. 476 (1915), which recognized that the acceptance of a pardon implies a confession of guilt. 236 U.S. at 91, 94, 35 S.Ct. at 269, 271. Citing Burdick, the Seventh Circuit observed: “A pardon does not ‘blot out guilt’ nor does it restore the offender to a state of innocence in the eye of the law as was suggested in Ex Parte Garland.” Bjerkan v. United States, 529 F.2d 125, 128 n. 2 (7th Cir.1975); accord State v. Skinner, Del.Supr., 632 A.2d 82, 85 (1993) (citing state cases).

Another recent decision on the effect of a presidential pardon rejects Garland’s dictum. The recipient of a presidential pardon sought expunction of court records relating to his conviction. The district court granted his motion, relying on Garland’s theory that a pardon “blots out of existence the guilt.” 71 U.S. (4 Wall) at 380. The government appealed, and the court of appeals reversed. In United States v. Noonan, 906 F.2d 952 (3d Cir.1990), Judge Aldisert canvassed American and English precedent, courts in the British Commonwealth, and scholarly commentary. Judge Aldisert concluded:

Thus, on the basis of long-held traditional views on the effect of a pardon, covering-diverse periods and sources from Bracton and Blackstone to Professor Williston, from seventeenth century English cases to those in contemporary courts of Great Britain and the British Commonwealth, from 1915 teachings of the Supreme Court, and the 1975 analysis of the Court of Appeals of the Seventh Circuit, we conclude that the Presidential pardon of 1977 does not eliminate Noonan’s 1968 conviction and does not “create any factual fiction” that Noonan’s conviction had not occurred to justify expunction of his criminal court record.

906 F.2d at 960. United States v. Noonan is pertinent because the recipient of the presidential pardon in that case unsuccessfully requested a court order that he “may, as well as all others must, consider the criminal indictment expunged as if it had never occurred.” 906 F.2d at 954. George seeks no less.

To reiterate, § 593(f)(1) provides that the court may award attorneys’fees to a subject of the independent counsel’s investigation if no indictment is brought against him. An indictment establishes probable cause that the accused has committed a crime. Guilt can be established only by a much higher standard, proof beyond a reasonable doubt. Because a pardon does not blot out guilt or expunge a judgment of conviction, one can conclude that a pardon does not blot out probable cause of guilt or expunge an indictment. George’s disability remains.

IV

United States v. Padelford, 76 U.S. (9 Wall.) 531, 19 L.Ed. 788 (1869), also does not support George’s application for attorneys’ fees. Padelford sued in the Court of Claims under the Act of March 12,1863, to claim the proceeds of his cotton, which federal troops seized in Savannah, Georgia, and sold. The proceeds had been deposited in the United States Treasury. The Act required Padel-ford to prove ownership of the cotton and that he had never given any aid or comfort to the Confederacy. Padelford, however, had given assistance to officers of the Confederate Army. Another Act of Congress authorized the President to pardon persons who had participated in the Confederacy upon such conditions as he determined. The President extended a pardon to all persons who took a certain oath and abided by it. The Court stated that by virtue of the pardon, Padelford “was purged of whatever offence against the laws of the United States he had committed ... and relieved from any penalty which he might have incurred.” Most importantly from Padelford’s perspective, the pardon expressly granted “restoration of all rights of property, except as to slaves and [intervening rights of third parties].” 76 U.S. (9 Wall) at 533, 542.

Padelford proved that he took the oath, which the pardon required, before Ms cotton was seized. The Court held that because Padelford took the oath before the troops seized his property, his right to the property “at the time of the seizure, was perfect, and ... it remains perfect, notwithstanding the seizure.” 76 U.S. (9 Wall) at 543. The Court concluded:

Under the proclamation [the pardon] and the act, the government is a trustee, holding the proceeds of the petitioner’s property for his benefit; and having been fully reimbursed for all expenses incurred in that character, loses nothing by the judgment, which simply awards to the petitioner what is his own.

76 U.S. (9 Wall) at 543.

Two years later, in United States v. Klein, the Court, whose personnel had not changed, described its ruling in Padelford by emphasizing the importance of the congressional enactment:

In the case of Padelford we held that the right to the possession of private property was not changed until actual seizure by proper military authority, and that actual seizure by such authority did not divest the title under the provisions of the Abandoned and Captured Property Act. The reasons assigned seem fully to warrant the conclusion. The government constituted itself the trustee for those who were by that act declared entitled to the proceeds of captured and abandoned property, and for those whom it should thereafter recognize as entitled.

80 U.S. (13 Wall) at 138-39.

The distinction between Padelford’s and George’s applications for fees is quite obvious. Padelford qualified under the terms of a statute and a pardon that promised restoration of his property if he took a prescribed oath. In contrast, neither § 593(f)(1) nor George’s pardon provides for the payment of attorneys’ fees to a person who has been indicted. The government held the proceeds of the sale of Padelford’s property in trust for him. As the Court pointed out, the government lost nothing, for it simply awarded to Padelford “what is his own.” 76 U.S. (9 Wall) at 543. In contrast, the government holds nothing belonging to George in trust for him. Rather, George asks for funds from the Treasury.

V

In sum, the constitutional requirement that funds from the Treasury may be disbursed only by authorization of Congress is a restriction on the President’s power to pardon. George, having been indicted, is not entitled to an award of attorneys’ fees under the provisions of § 593(f)(1). We cannot waive these provisions, and the pardon cannot change them. The pardon does not blot out guilt or expunge the indictment. Though pardoned, George’s disability — the fact of his indictment — remains, preventing the court from awarding him attorneys’ fees.

George’s fee petition is denied. Judgment accordingly.