Special Prosecutor Law Voided : Some Cases Left in Doubt; Appeal to High Court Certain

A federal appeals court, ruling directly on the issue for the first time, Friday struck down as unconstitutional the 10-year-old independent counsel law, concluding that the President alone possesses the power to oversee prosecution of federal crimes.

The ruling calls into question a series of major prosecutions and investigations of former high Reagan Administration officials. They were conducted by independent counsels appointed under the law, which was enacted in 1978 to guard against Watergate-type corruption.

Attorneys for former White House Deputy Chief of Staff Michael K. Deaver, convicted last month of perjury in a such a probe, immediately urged the appeals court to throw out his conviction.

Has Backup Appointment

In another highly sensitive case, Iran-Contra counsel Lawrence E. Walsh said that he did not think his inquiry would be affected because he had accepted a backup appointment from Atty. Gen. Edwin Meese III--an official of the executive branch.

The 2-1 ruling by the U.S. Circuit Court of Appeals for the District of Columbia was a victory for the Reagan Administration, which contends that the Ethics in Government Act’s provision for court-appointed outside prosecutors violates the Constitution’s separation of powers doctrine.

An appeal of the ruling is considered certain. It will set the stage for the Supreme Court to rule finally on whether the courts may have a role in investigating allegations against officials of the executive branch.

Walsh, saying that he continues to believe the Ethics in Government Act is constitutional, said he would support an appeal to the Supreme Court.

Nofziger Prosecutor

Independent counsel James C. McKay, who is prosecuting former Reagan political adviser Lyn Nofziger on conflict of interest charges, said he did not believe his case would be jeopardized because he too accepted a backup appointment from Meese after the law’s constitutionality was challenged.

The decision was issued in one of the least publicized of the independent counsel cases. It centered on former Assistant Atty. Gen. Theodore B. Olson, who was accused of misleading Congress in 1983 when he testified on alleged improprieties in the Environmental Protection Agency.

Attorney Alexia Morrison was appointed under the ethics law to investigate Olson and sought unsuccessfully to expand her inquiry to two other former Justice Department officials. Olson and the other two, former Deputy Atty. Gen. Edward C. Schmults and Assistant Atty. Gen. Carol E. Dinkins, refused to appear before a grand jury and then challenged Morrison’s constitutional authority after they were held in contempt of court.

On Friday, the appeals court majority said Morrison had no authority to pursue the case and dismissed the contempt citations.

“We . . . conclude that the act viewed as a whole . . . so deeply invades the President’s executive prerogatives and responsibilities and so jeopardizes individual liberty as to be unconstitutional,” Judge Laurence H. Silberman wrote for the majority.

‘Core Executive Function’

The Constitution gives the President the duty to see to it that laws are “faithfully executed,” with the prosecution of crime standing as a “core executive function,” Silberman said. Congress, therefore, may not delegate an aspect of this function to another branch government.

Silberman, a deputy attorney general during the Richard M. Nixon and Gerald R. Ford administrations who was appointed to the bench by President Reagan, was joined by Judge Stephen F. Williams, also a Reagan appointee.

In a dissenting opinion, Judge Ruth Bader Ginsburg, who was appointed by President Jimmy Carter, said the Constitution provides for a system of checks and balances among the three governmental branches. The independent counsel, she said, is a proper check on abuse of power in the executive branch.

The Ethics in Government Act “is a measure faithful to the 18th-Century blueprint, yet fitting for our time,” Ginsburg wrote.

Hybrid System Created

In the 1978 law, Congress created a hybrid system for the investigation of suspected offenses by high-ranking executive branch officials. It mandated that the attorney general initiate an inquiry and then, if warranted, seek appointment of an independent counsel to pursue the matter. That appointment is made by a special panel composed of three federal judges appointed by the chief justice of the United States.

This was seen as a means of assuring that corruption among Administration officials would be investigated in a thorough, nonpartisan manner without interference. During the Watergate affair--before the law was enacted--President Nixon appointed Harvard law professor Archibald Cox as a special prosecutor but then fired him when he demanded access to secret tape recordings in the Oval Office.

Although it is certain that Morrison will appeal Friday’s ruling, it is not clear whether she will first seek a review by the full appeals court or will turn immediately to the Supreme Court. If she seeks an expedited review by the high court, a decision could be rendered by July.

At the Justice Department, Terry Eastland, director of public affairs, hailed the decision but said it “in no way detracts from this Administration’s commitment to investigating impartially allegations of wrongdoing by government officials . . . .”

He said the Administration remains willing “to work with Congress to find constitutionally permissible means” for investigating executive branch officials.

Alternative Procedures

Possible alternatives outlined in the past by the Justice Department include allowing the attorney general to appoint the outside prosecutors or having the President do it, subject to Senate confirmation.

Eastland noted that the Supreme Court on Monday let stand an appeals court ruling upholding the backup appointments that several independent counsels have accepted.

He said their investigations will “continue unimpeded,” but lawyers for Iran-Contra figures under investigation are expected to raise challenges if their clients are indicted. Attorneys for Nofziger, whose trial began this week, Friday cited the new ruling and requested a halt in the proceedings, but the judge rejected the request.

Some legal experts contended that the appeals court decision will be overturned when it reaches the Supreme Court.

“Article II of the Constitution makes it very clear that Congress can appoint an inferior officer in the judicial branch,” said Harvard University law professor Laurence Tribe, who filed a friend-of-the-court brief in the case. “I think the odds are very good that this will be reversed.”

Eric Glitzenstein, a lawyer with the Public Citizen interest group, also said he believes the “checks and balances” argument will prevail.

Watergate Era Cited

“In the Watergate era, it became painfully apparent that a politicized Justice Department can’t prosecute itself,” he said. “Now you have top people in the department immersed in legal complications. If that doesn’t cry out for an independent counsel, nothing does.”

Silberman, in his opinion, said he was “mindful . . . of the distinguished array of legal talent and institutional authority asserting the constitutionality” of the act, adding that he reached the opposite conclusion “only soberly and not easily.”

“We have grappled with issues that we full well recognize divide the nation politically (using the word in the partisan sense), and federal judges--properly removed from any political considerations, partisan or policy--do not relish the task of deciding such issues.

“But great constitutional cases have often arisen out of the crucible of partisan struggle, and we have no alternative but to apply our view of the Constitution,” Silberman said.

Morrison and members of her staff did not return calls Friday, but the timing of a final decision on the issue could be crucial to her investigation. Olson, who now heads the Washington office of the Los Angeles law firm of Gibson, Dunn & Crutcher, gave his House testimony on March 10, 1983, and the five-year statute of limitations would normally run out next March 10.

But Morrison could contend the case involved a conspiracy and allege that some of the acts occurred after Olson’s testimony, keeping the matter alive, legal authorities said.