Judge Bates on Equitable Discretion

Judge Bates also rejected the argument that he should exercise his equitable discretion to decline to hear the case.  This was a little more of a surprise.  Given the highly political nature of the controversy before him, I thought the court would be tempted to exercise his equitable discretion, at least on a temporary basis while the parties attempted to work out a compromise.  For example, I thought that the court might suggest that the Judiciary Committee could accept the White House’s offer of a private interview and production of some of the documents so long as the White House withdrew the (unreasonable) condition that the Committee agree not to seek any further information.

             The end result, however, is not terribly different from that scenario.  If the executive branch decides not to appeal immediately (a big if), the parties might now agree to a transcribed deposition of Miers.  For those questions for which the White House asserts executive privilege, the parties could return to court and present the disputed questions to Judge Bates for resolution.  Since the White House was apparently willing to let Miers answer at least some of the questions it believes to be protected by privilege, the parties might further agree that the answers to these questions will be kept sealed unless and until the judge rules that the privilege does not apply.

             This is certainly a more civilized way of resolving disputes than locking Miers up in the basement of the Capitol.  Rumors to the contrary notwithstanding, there is no jail there, although I suppose they could chain her to a vending machine.

Judge Bates on Inherent Contempt

The court rejected the Justice Department’s threshold arguments on standing and cause of action.  Based on the court’s remarks at the oral argument, this does not come as a surprise.  For reasons that I have discussed before, the court was not impressed with the Justice Department’s attempt to disavow the 1980s OLC memos which clearly stated that civil enforcement, not inherent contempt, was the appropriate and preferred method for enforcing congressional subpoenas against the executive.  

 The court’s opinion has several devastating passages on the illogic of the executive branch’s current position:

As noted above, one power that Congress has at its disposal is inherent contempt. Following a citation for congressional contempt, Congress could dispatch the Sergeant-at-Arms to detain Ms. Miers and Mr. Bolten in preparation for a trial before Congress. See Morton Rosenberg, Cong. Research Serv., Congress’s Contempt Power: Law, History, Practice, and Procedure, No. 34-097, at 15 (2008), available at http://www.au.af.mil/au/awv/awcgate/crs/rl34097.pdf. In response to such action, both sides here appear to agree (see Tr. at 85) that Ms. Miers and Mr. Bolten would likely file a writ of habeas corpus with this Court to challenge the legality of their detention, raising the central issue of the scope and nature of Congress’s subpoena power — precisely the issue presented by the instant action. By invoking the [Declaratory Judgment Act] to gain anticipatory review of that same question, the Committee can obtain judicial resolution regarding its subpoena power without the unseemly scenario of the arrest and detention of high-ranking executive branch officials, which would carry the possibility of precipitating a serious constitutional crisis. That would seem to be

just the sort of process sanctioned by the DJA.

* * *

Still, the Executive takes the Committee to task for failing to utilize its inherent contempt authority. But there are serious problems presented by the prospect of inherent contempt, not the least of which is that the Executive is attempting to have it both ways on this point. To begin with, prosecution pursuant to inherent contempt is a method of “inflicting punishment on an individual who failed” to comply with a subpoena. See Olson OLC Opinion at 137. As OLC has recognized, a civil action, by contrast, is directed towards “obtaining any unprivileged documents necessary to assist [Congress’s] lawmaking function.” Id. Put another way, the two remedies serve different purposes, although it is true that threatening prosecution under inherent contempt may lead to the production of documents. But unlike a civil action for subpoena enforcement, that is not the primary goal of inherent contempt. Second, imprisoning current (and even former) senior presidential advisors and prosecuting them before the House would only exacerbate the acrimony between the two branches and would present a grave risk of precipitating a constitutional crisis. Indeed, one can easily imagine a stand-off between the Sergeant-at-Arms and executive branch law enforcement officials concerning taking Mr. Bolten into custody and detaining him. See Cooper OLC Opinion at 86 (“[I]t seems most unlikely that Congress could dispatch the Sergeant at-Arms to arrest and imprison an Executive Branch official who claimed executive privilege.”). Such unseemly, provocative clashes should be avoided, and there is no need to run the risk of such mischief when a civil action can resolve the same issues in an orderly fashion. Third, even if the Committee did exercise inherent contempt, the disputed issue would in all likelihood end up before this Court, just by a different vehicle — a writ of habeas corpus brought by Ms. Miers and Mr. Bolten. In either event there would be judicial resolution of the underlying issue.

Indeed this administration, along with previous executive administrations, has observed that inherent contempt is not available for use against senior executive branch officials who claim executive privilege. In this very case, the Executive has questioned “whether [inherent contempt] would even countenance the arrest of the President or his closest aides for refusing to testify or provide privileged documents . . . at the President’s direction.” See Defs.’ Reply at 22. The Executive has described that possibility as a “dubious proposition.” Id. Previous administrations have gone even further. The Olson OLC Opinion explained that “the same reasoning that suggests that the [criminal contempt] statute could not constitutionally be applied against a Presidential assertion of privilege applies to Congress’ inherent contempt powers as well.” See Olson OLC Opinion at 140 n. 42. The Cooper OLC Opinion concurred: the inherent contempt alternative “may well be foreclosed by advice previously rendered by this Office.” See Cooper OLC Opinion at 83. Thus, there are strong reasons to doubt the viability of Congress’s inherent contempt authority vis-a-vis senior executive officials. To be sure, the executive branch’s opinion is not dispositive on this question, and the Court need not decide the issue. At the very least, however, the Executive cannot simultaneously question the sufficiency and availability of an alternative remedy but nevertheless insist that the Committee must attempt to “exhaust” it before a civil cause of action is available.

CREWs Double Standard

               On June 12, 2008, Citizens for Ethics and Responsibility in Washington (CREW), a prominent “watchdog” group, issued a press release stating “in light of a news report detailing favorable loan terms given to current and former public officials by Countrywide Financial, [CREW] has written to both the Senate and House Ethics Committees asking for investigations into members of Congress that may have received loans in violation of existing gift bans.”  Specifically, CREW pointed to media reports that Senators Christopher Dodd (D-CT) and Kent Conrad (D-ND) received preferential treatment under a “V.I.P.” program “that waived points, lender fees and company borrowing rules for prominent people.”  CREW explained that “[a]lthough there is no evidence that either Sen. Dodd or Sen. Conrad were aware they were receiving special treatment from Countrywide, their receipt of the unusually favorable loans creates exactly the sort of appearance of impropriety that the gift rule was designed to address.” 

            A few weeks later, on July 2, the Washington Post reported that Senator Barack Obama (D-Ill.) received a discounted loan from Northern Trust when he purchased his $1.65 million home in Chicago.  Like Senators Dodd and Conrad, Senator Obama paid no origination fees or discount points, yet received a below-market interest rate.  Like Senators Dodd and Conrad, Senator Obama evidently received better treatment from this financial institution than would have been available to a member of the general public. 

            Despite these similarities, CREW did not call for an ethics investigation of Senator Obama’s loan.  This was no mere oversight on CREW’s part.  CREW executive director Melanie Sloan claimed in an interview on CNN that there was a principled distinction between the two situations.  “Both Dodd and Conrad were getting special treatment under a program designed to give them special treatment because they were Senators,” she explained, “Senator Obama just got better treatment because he was a wealthy guy.”

This explanation, however, reflects CREW’s spin on the facts, not the facts as they have been reported to date. In the first place, it is somewhat misleading to state that Senators Dodd and Conrad were in “a program designed to give them different treatment because they were Senators.” The Senators were in a program designed to give preferential treatment to certain prominent or well-connected persons. It was not designed specifically for Senators or other members of Congress. While there is evidence that Senators Dodd and Conrad were included in the program (at least in part) because they were Senators, the program was not limited to elected or government officials. James Johnson, the former chief executive of Fannie Mae, for example, received a loan under this program.

There is no evidence to suggest that the Countrywide program was made available to people who were poor credit risks or who lacked financial assets to justify the loans that were made. Certainly Dodd, Conrad and Johnson are all, to use Sloan’s term, “wealthy guys,” and it seems likely that everyone who got a Countrywide VIP loan was a “wealthy guy” (or gal).

So how is the Obama loan situation any different? Unlike Countrywide, Northern Trust did not have a formal VIP program. But according to a Northern Trust executive interviewed in the Post story, it was the bank’s practice to “pursue successful individuals, families and institutions.” As part of this practice, Northern Trust would offer preferential rates and terms to certain borrowers, including Senator Obama, taking into consideration the “person’s occupation and income.” So it sounds very much like Senator Obama received a preferential loan from Northern Trust because of a discretionary decision by that bank that was based, in part, on the fact that he was a Senator. In other words, pretty much the same thing that happened with the Dodd/Conrad loans.

From the standpoint of the Senate ethics rules, the Dodd/Conrad and Obama loan situations are also the same. The Senate rules permit Senators to accept “loans from banks or other financial institutions on terms generally available to the public.” In neither case were the terms “generally available to the public.” Senators are also allowed to accept benefits offered to members of a group or class “in which membership is unrelated to congressional employment.” Presumably, therefore, a Senator may obtain a loan on terms extended to all persons of a certain income or asset level. However, if qualification for the loan terms depends on subjective judgments that may include consideration of the applicant’s congressional employment, which was evidently the case with regard to both the Dodd/Conrad and Obama loans, the loan probably violates the gift rule.

In short, CREW’s attempt to distinguish the Dodd/Conrad and Obama loans does not hold water. If the former warrant an ethics investigation, the latter does as well.

My attempts to get a response from CREW have been unsuccessful.

Inherent Contempt for Rove?

           House Judiciary Committee Chairman John Conyers is threatening Karl Rove with contempt for the latter’s refusal to appear at a congressional hearing in response to a subpoena.   Rove is evidently asserting that, as a former senior adviser to the President, he is absolutely immune from compelled testimony relating to his service in that capacity.  This is the same position that former WH Counsel Harriet Miers is taking in the case pending before Judge Bates. 

            As he did about a year ago with respect to WH Chief of Staff Josh Bolten, Conyers has explicitly invoked the possibility of using inherent contempt to enforce the committee’s subpoenas.  I have previously suggested that even mentioning this possibility was an extraordinary step to take, particularly with regard to an executive branch official.  There are now several factors that could lead to the actual use (or at least attempted use) of the inherent contempt procedure.

First, the Department of Justice has itself endorsed the inherent contempt procedure as the appropriate means for testing the validity of a congressional subpoena to an executive branch official. This would give the House considerable political cover if it were to proceed with inherent contempt.

Second, Judge Bates is currently considering whether the House can enforce a subpoena against executive officials in court. If the judge rules that this is not an option, the House could argue that inherent contempt is the only viable means for enforcing its subpoenas.

Third, if the House were ever going to use inherent contempt, Rove would make a pretty inviting test case. He is not exactly a sympathetic character, being generally portrayed (most recently in Scott McClellan’s book) as a ruthless political operator. The political nature of his duties, as well as the fact that he is not even a current WH employee, make the argument that he is absolutely immune from congressional subpoenas look particularly weak.

It should be noted that Judge Bates seemed fairly skeptical of the absolute immunity argument during the June 23 oral argument. In questioning DOJ lawyer Carl Nichols, the judge noted that the administration’s absolute immunity position was not supported in the caselaw, and he suggested that Harlow v. Fitzgerald, 457 U.S. 800 (1982) (rejecting the notion that presidential aides have an absolute immunity from civil suits for damages), cut against that position. Bates also expressed the concern that absolute immunity for senior presidential advisers would have the effect of converting the qualified executive privilege into an absolute privilege.

I assume that the House will not move on an inherent contempt proceeding until Judge Bates issues his ruling on the motions before him. If Bates allows the civil contempt proceeding to go forward, or if he reaches the merits and rules in favor of the executive branch on the absolute immunity argument, the House would presumably not proceed with inherent contempt. If, on the other hand, the court were to dismiss the case without reaching the merits of the absolute immunity defense, the stage would be set for extraordinary spectacle of an inherent contempt proceeding against Rove.