Widened Probe of 1983 EPA Scandal Denied

In a decision limiting the powers of an independent counsel, a panel of appellate court judges Thursday denied the request of counsel Alexia Morrison to widen her probe of the 1983 Environmental Protection Agency scandal to include the conduct of two former high-ranking Justice Department officials.

The judges ruled that Morrison must restrict her investigation to the sole target she was appointed to investigate, former Assistant Atty. Gen. Theodore Olson. They said that she could examine the conduct of former Deputy Atty. Gen. Edward C. Schmults and former Assistant Atty. Gen. Carol E. Dinkins only if there is evidence that they conspired with Olson to illegally withhold key EPA documents from congressional committees.

The judicial panel, chaired by Senior Circuit Judge George E. MacKinnon, said it could not authorize an expansion of Morrison’s inquiry to include Schmults and Dinkins as criminal targets because Atty. Gen. Edwin Meese III had determined through a preliminary investigation, before Morrison was appointed last year, that there were “no reasonable grounds to believe” that Schmults and Dinkins were criminally liable for any misconduct.

Limited Jurisdiction

Independent counsels, although appointed by the court, generally are limited to a specific criminal jurisdiction determined by the attorney general, the judges said.

At the same time, the judges issued a ringing defense of the constitutional authority of Congress to create such independent prosecutors and of the courts to appoint them. The opinion came at a time when the legal authority of two other special counsels, Whitney North Seymour Jr. and Lawrence E. Walsh, has been challenged by individuals they have investigated.

Seymour last month obtained a perjury indictment against former White House aide Michael K. Deaver, and Walsh has been investigating former National Security Council aide Oliver L. North and other current and former government officials for their roles in the Iranian arms affair.

The controversy over Olson began more than four years ago when the Justice Department, citing executive privilege, refused to give Congress internal EPA documents on its Superfund cleanup program for toxic waste dumps. Congress was attempting to investigate charges that top Reagan appointees at the EPA were awarding or withholding grants of money to various states based on political considerations, instead of environmental concerns.

Forced to Resign

President Reagan later intervened to grant Congress most of the documents it sought, and EPA Administrator Anne McGill Burford was forced to resign. Subsequently, Rita M. Lavelle, a top aide whom Burford had fired, was convicted of lying to Congress about conflicts of interest in her management of the Superfund program.

Two years later, in 1985, the House Judiciary Committee charged in a report that Justice Department officials, including Olson, Schmults and Dinkins, may have misled congressional investigators and obstructed legislative inquiries into the EPA scandal. Based on that report, Meese, following procedures in the 1978 Ethics in Government Act, ordered a preliminary inquiry, which concluded that Olson’s conduct should be examined by an independent counsel.

But court papers released Thursday showed that Meese, in clearing Schmults and Dinkins, rejected recommendations from some of his aides. For example, William Weld, chief of the department’s criminal division, said in a memo last year that Schmults’ failure to inform Congress that certain handwritten notes had been withheld “is, frankly, a more arresting matter than the garden-variety document dispute.”

Weld wrote that “the elements of an offense seem to be present.”

Can Only Prosecute Olson

The court, in its ruling, said that Morrison may investigate the possibility of a criminal conspiracy but that “the current order grants the independent counsel jurisdiction to prosecute only Olson.”

In endorsing establishment of the special counsel’s office by Congress, the judges said: “The statute is designed to ensure that violations of federal criminal law by high-ranking government officials . . . will be fairly and impartially investigated and prosecuted.”

The need for independent counsels, the court said, “has been demonstrated several times this century.”