Special Prosecutors Upheld in a Blow to Reagan, Aides : Justices Won’t Bar North Trial, Deaver Sentencing

The Supreme Court, in a momentous constitutional ruling which is a setback to the Reagan Administration and some of its key former officials, today upheld a law that allows independent prosecutors to investigate alleged crimes by high-ranking government officials.

The 7-1 decision dispels crucial doubts about the convictions of former Reagan aides Michael K. Deaver and Lyn C. Nofziger and clears away a major stumbling block in the prosecution of ex-White House aides Oliver L. North, John M. Poindexter and two others indicted in the Iran-Contra affair.

The decision also allows an investigation to continue into the activities of Atty. Gen. Edwin Meese III, accused of financial improprieties and conflicts of interest.

The court said the special prosecutor law does not violate the separation of powers between the executive, legislative and judicial branches of government guaranteed by the Constitution.

Not Power Grab by Congress

Chief Justice William H. Rehnquist, in his opinion for the court, said: “We observe first that this case does not involve an attempt by Congress to increase its own powers at the expense of the executive branch.

“Similarly, we do not think that the act works any judicial usurpation of properly executive functions.”

Rehnquist continued, “Finally, we do not think that the act impermissibly undermines the powers of the executive branch or disrupts the proper balance between the coordinate branches.”

Lawrence E. Walsh, the independent counsel investigating the Iran-Contra affair, said in a statement moments after the decision was announced:

“The independent counsel statute provides a workable solution to a difficult problem. We are gratified that the Supreme Court has upheld the constitutionality of that statute.”

‘Nothing’s Changed’

President Reagan, queried about the court’s decision as he arrived in Miami for a speech, said: “Nothing’s changed. I can’t comment.”

White House spokesman Marlin Fitzwater said the decision “will have no practical effect on the Administration’s implementation of the independent counsel act or on the ongoing investigations.”

A White House statement said that despite “doubts about the constitutionality of the Independent Counsel Act, the Administration has faithfully and consistently complied with all of the act’s requirements.”

The chief justice acknowledged that the law limits presidential power to investigate and prosecute some alleged crimes.

Adequate Safeguards

But he said there are adequate safeguards to protect against abuses.

For example, Rehnquist said, the law permits the attorney general to decide when a special prosecutor is warranted and allows the attorney general to fire a special prosecutor for “good cause.”

“Notwithstanding the fact that the counsel is to some degree ‘independent’ and free from executive supervision to a greater extent than other federal prosecutors, in our view . . . the act gives the executive branch sufficient control over the independent counsel to ensure that the President is able to perform his constitutionally assigned duties,” Rehnquist said.

The chief justice read parts of his 38-page opinion from the bench, speaking for five minutes.

Scalia Sharply Dissents

Justice Antonin Scalia, in a sharp dissent, attacked the court’s ruling as an “ad hoc judgment” and said it was plain to see the law violated the constitutional separation of powers doctrine.

In a rare move, Scalia read aloud from his dissent as his colleagues sat at the bench in the ornate courtroom.

“Frequently, an issue of this sort will come before the court clad, so to speak, in sheep’s clothing; the potential of the asserted principle to effect important change in the equilibrium of powers is not immediately evident, and must be discerned by a careful and perceptive analysis,” he wrote. “But this wolf comes as a wolf.”

Justice Anthony M. Kennedy, the newest member of the court and one of three justices appointed by Reagan, did not take part in the independent prosecutor decision. Kennedy disqualified himself without giving an explanation.

Other Decisions

The decision was the last to be handed down by the high court on its last day of the 1987-88 term.

In other action, the court:

--Severely limited state efforts to shield young sex abuse victims when they testify at criminal trials. The justices, voting 6 to 2, overturned the conviction of an Iowa man sentenced to 10 years in prison for sexually molesting two 13-year-old girls.

--Barred states from placing sweeping, strict regulations on professional, for-profit organizations that solicit contributions for charities. The justices, by a 7-2 vote, ruled that a North Carolina law that imposed such regulations violated free-speech rights.

Goes Back to Watergate

In its independent prosecutor decision, the high court overturned a 2-1 federal appeals court ruling last Jan. 22 that declared the Watergate-era special prosecutor law unconstitutional.

The power to appoint the special prosecutor was put in the hands of the judiciary because of the belief by Congress, bolstered by President Richard M. Nixon’s appointment and later firing of special prosecutor Archibald Cox, that the executive branch could not be trusted to investigate its own officials.

The law’s advocates said it was essential to assure the nation that crimes in high places would not be covered up.

But opponents pointed out that Nixon was forced out of office because of public opinion and the threat of impeachment, without any need for an independent investigation.

Sparked by EPA Case

The law was challenged by Theodore B. Olson, a former assistant attorney general accused of lying to Congress in 1983 during a dispute over the Environmental Protection Agency’s cleanup program for toxic waste sites.

Alexia Morrison, a Washington lawyer, is the special prosecutor investigating the case.

The Reagan Administration supported Olson’s challenge, arguing that the independent counsels violate constitutionally mandated separation of powers between the three branches of government.

Among the defenders of the law are the Senate and the Democratic leadership in the House.

Prominent Figures Involved

The immediate stakes in the case involved some of the most prominent figures of the Reagan presidency.

Deaver, convicted of lying to a grand jury and a House subcommittee that investigated his lobbying activities, is awaiting sentencing. Whitney North Seymour was the independent counsel who prosecuted him.

Nofziger, prosecuted by independent counsel James C. McKay, was sentenced to 90 days in prison and fined $30,000 for illegal lobbying. McKay also is conducting the investigation into the charges involving Meese.

North, a former aide to the National Security Council, is expected to go on trial in the fall in the Iran-Contra case on charges he conspired to divert profits from the sale of arms to Iran to the Contra rebels fighting the government in Nicaragua.

His co-defendants--Poindexter, businessman Albert A. Hakim and retired Air Force Maj. Gen. Richard V. Secord--are to be tried separately.