UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


IN RE: SAMUEL R. PIERCE, JR.

v.

(KISNER FEE APPLICATION)


89-0005c

D.C. Cir. 1999


*	*	*


Opinion for the Special Court filed Per Curiam.


Concurring opinion filed by Senior Circuit Judge Cudahy.


Per curiam: Gerald D. Kisner petitions this court under  Section 593(f)
of the Ethics in Government Act of 1978, as  amended, 28 U.S.C. s 591
et seq. (1994) (the "Act"), for  reimbursement of attorneys' fees in
the amount of $2,759.39  that he incurred during and as a result of
the investigation  conducted by Independent Counsels ("IC") Arlin M.
Adams 


and Larry D. Thompson. Because we conclude that Kisner  has not carried
his burden of showing that the fees would not  have been incurred but
for the requirements of the Act, we  deny the petition in its
entirety.


Background1


In 1978 Congress established the moderate rehabilitation  ("mod rehab")
program within the U.S. Department of Hous- ing and Urban Development
("HUD"). This program encour- aged developers to upgrade moderately
substandard housing  units for occupation by low income families. In
1988 HUD's  Inspector General conducted an audit of the mod rehab 
program as administered from 1984 through 1988 and found  that the
program was not being administered efficiently,  effectively, or
economically. The Inspector General's audit  report triggered
congressional investigations into abuses, fa- voritism, and
mismanagement at HUD during the 1980's  under the tenure of HUD
Secretary Samuel R. Pierce, Jr.  Gerald D. Kisner, the fee petitioner
here, was Deputy Gener- al Counsel of HUD during a portion of the time
that Pierce  was Secretary. In May of 1990 Kisner was called to
testify  before the Employment and Housing Subcommittee of the 
Committee on Government Operations of the United States  House of
Representatives (the "Lantos Committee") about his  activities as


Based on information elicited during the congressional  investigations,
the House Judiciary Committee wrote to At- torney General Richard
Thornburgh seeking the appointment  of an independent counsel to
investigate the matter. Follow- ing a preliminary investigation,
Attorney General Thornburgh  applied to this court for appointment of
an independent  counsel. On March 1, 1990, we appointed former United




__________

n 1 We have had recent occasion to review the facts of this matter  in
In re: Samuel R. Pierce, Jr. (Olivas Fee Application, No. 89-5  (D.C.
Cir., Spec. Div., June 22, 1999) (per curiam). Rather than re- plow
recently tilled ground, we have adopted much of the language  in the
background portion of this opinion, and, where applicable, a  portion
of the analysis from that decision.


States Circuit Judge Arlin Adams2 as independent counsel "to 
investigate ... whether Samuel R. Pierce, Jr., and other  [HUD]
officials may have committed the crime of conspiracy  to defraud the
United States or any other Federal crimes ...  relating to the
administration of the selection process of the  Department's Moderate
Rehabilitation Program from 1984  through 1988." Order Appointing
Independent Counsel,  March 1, 1990.


The IC conducted a comprehensive investigation ultimately  confirming a
widespread pattern of corruption at HUD dur- ing Pierce's tenure.
Although the IC announced on January  11, 1995, that he would not seek
indictment of Pierce, during  the course of the investigation
seventeen (17) other persons  were charged with and convicted of
federal crimes as a result  of the IC's investigation. That
investigation and the indict- ments ranged well beyond the core facts
of the original  application for appointment of independent counsel.
Of par- ticular reference to the petitioner before us, in November of 
1993 the IC apparently called Kisner before the grand jury to  ask
again about his activities as Deputy General Counsel.  Kisner


Subsequently, in March of 1994, Kisner received a letter  from the IC's
office which stated, in pertinent part, "that you  were not truthful
about several matters on which you testified  in the grand jury and in
front of the Lantos Committee."  March 3, 1994 Letter from Roscoe C.
Howard, Jr., Esq.,  Associate Independent Counsel. Upon receipt of the
letter  Kisner retained legal counsel. Although he states that he  was
informed by the IC's office that he would be indicted, see  Kisner
Application at 3, no charges were ever filed against  him.


The IC's investigation is now complete. Pursuant to the  statute, the
IC submitted a final report to this court on  March 30, 1998. See 28
U.S.C. s 594(h)(1)(B). We ordered  the report made public by order of
October 27, 1998. There-




__________

n 2 Independent Counsel Adams resigned in May of 1995. This  court
appointed his deputy, Mr. Larry D. Thompson of the Atlanta  bar, to
succeed him.


after, Kisner, pursuant to Section 593(f)(1) of the Act, peti- tioned
this court for reimbursement of his attorneys' fees.  As directed by
Section 593(f)(2) of the Act, we forwarded  copies of Kisner's fee
petition to the Attorney General and  the IC and requested written
evaluations of the petition. The  court expresses its appreciation to
the IC and the Attorney  General for submitting these evaluations,
which we have  given due consideration in arriving at the decision
announced  herein.


Analysis


Unique in the criminal law structure of the United States,  the Ethics
in Government Act provides for reimbursement of  attorneys' fees
expended by subjects in defense against an  investigation under the
Act. Specifically, 28 U.S.C.  s 593(f)(1) states:


Upon the request of an individual who is the subject of  an
investigation conducted by an independent counsel  pursuant to this
chapter, the division of the court may, if  no indictment is brought
against such individual pursuant  to that investigation, award
reimbursement for those  reasonable attorneys' fees incurred by that
individual  during that investigation which would not have been 
incurred but for the requirements of this chapter.


Because the Act "constitutes a waiver of sovereign immuni- ty it is to
be strictly construed." In re Nofziger, 925 F.2d  428, 438 (D.C. Cir.,
Spec. Div., 1991) (per curiam). Therefore,  the Act provides only
reimbursement for attorneys' fees that  survive an elemental analysis
determining whether the peti- tioner is the "subject" of the
independent counsel's investiga- tion, incurred the fees "during" that
investigation, and would  not have incurred them "but for" the
requirements of the Act.  The petitioner "bears the burden of
establishing all elements  of his entitlement." In re North (Reagan
Fee Application),  94 F.3d 685, 690 (D.C. Cir., Spec. Div., 1996) (per
curiam).  We conclude that Kisner has met the "subject" and "during" 
requirements. However, we agree with the evaluations of the 
Independent Counsel and the Attorney General that Kisner 


has not carried his burden of establishing that he would not  have
incurred the fees "but for" the requirements of the  Ethics in
Government Act.


As we have held, "[a]ll requests for attorneys' fees under  the Act
must satisfy the 'but for' requirement of" the Act. In  re Sealed
Case, 890 F.2d 451, 452 (D.C. Cir., Spec. Div., 1989)  (per curiam).
The purpose of awarding only fees that would  not have been incurred
"but for" the Act is to ensure that  "officials [and here derivative
'subjects'] who are investigated  by independent counsels will be
subject only to paying those  attorneys' fees that would normally be
paid by private citi- zens being investigated for the same offense by"
federal  executive officials such as the United States Attorney. Id.
at  452-53 (citing S. Rep. No. 97-496, 97th Cong., 2d Sess. 18 
(1982), reprinted in 1982 U.S.C.C.A.N. 3537, 3554 (referring  to "fees
[that] would not have been incurred in the absence of  the special
prosecutor [independent counsel] law")).


As we have stated "the most difficult element for a fee  applicant to
establish under the act is that the fees 'would not  have been
incurred but for the requirements of [the Act].' "  In re North (Bush
Fee Application), 59 F.3d 184, 188 (D.C.  Cir., Spec. Div., 1995)
(quoting In re North (Dutton Fee  Application), 11 F.3d 1075, 1079
(D.C. Cir., Spec. Div., 1993)  (per curiam)). In part this is so
because the element requires  a petitioner to prove a negative and one
with a high compo- nent of speculation. In part, though, it is
difficult because the  law contemplates that it should be difficult,
that such fees will  not be a common thing. As we stated above, the
contempla- tion of the legislation is not that subjects of independent
 counsel investigations will be reimbursed for all legal fees,  but
only that they will be reimbursed for those legal fees that  would not
have been incurred by a similarly-situated subject  investigated in


Nonetheless, we have found that petitioners qualify for an  award of
fees in the face of the but-for test in at least four (4) 
circumstances:


1. When the independent counsel's investigation sub- stantially
constituted duplication of the preliminary in-


vestigation conducted by the Department of Justice. In  re Olson, 884
F.2d 1415, 1420 (D.C. Cir., Spec. Div., 1989)  (per curiam); In re
North (Dutton Fee Application) 11  F.3d at 1080.


2. When the petitioning subject has been "prejudiced  by the Department
of Justice's failure to comply with the  substantial protective
features of the Act." In re Nofzig- er, 925 F.2d at 438 (citing In re
Meese, 907 F.2d 1192  (D.C. Cir., Spec. Div., 1990)).


3. When in the absence of the requirements of the Act  "'the case could
have been disposed of at an early stage  of the investigation,"'
without subjecting the petitioning  subject to the conditions that led
to his incurring the fees  sought. In re Segal (Sagawa Fee
Application), 151 F.3d  1085, 1089 (D.C. Cir., Spec. Div., 1998)
(quoting In re  Nofziger, 925 F.2d at 438.


4. Not wholly distinct from No. 3, supra, when "high  public officials
[or derivative subjects] were investigated  under the Act in
circumstances where private citizens  would not [have been]
investigated." In re Nofziger, 925  F.2d at 442; In re North (Dutton
Fee Application), 11  F.3d at 1080.


Kisner fits none of the four categories. Granted, these  categories are
not exhaustive, and probably could not be,  given the "fact-specific
nature of each independent counsel's  undertakings." In re North
(Dutton Fee Application), 11  F.3d at 1080. Nonetheless, if Kisner is
to establish his  entitlement under the Act he must establish some
sort of  "unique special factual features that but for the requirement
 of the Act would have permitted a quick termination" of the 
investigation or otherwise not have subjected him to the fees  for
which he petitions. In re Nofziger, 925 F.2d at 439.


There can be no serious argument that Kisner's claim fits  in either of
the first two categories previously identified by  the court. As to
the first, the Independent Counsel's investi- gation ranged far beyond
the preliminary investigation not  only in depth but breadth. The
matters investigated as to  Kisner are far beyond anything in the
preliminary investiga-


tion. He cannot fit category one. As to category two there  is neither
allegation nor evidence of the Department's failure  to comply with
substantial protective features and thereby  pretermit the
investigation that cost Kisner his counsel fees.  He cannot fit this
category either. Therefore, in order to  establish eligibility for
counsel fees under the "but for" test,  Kisner must either put his
facts within category three or four  or otherwise establish the
necessary unique special features.  This he has not done.


Kisner argues that he satisfies the "but for" requirement  because "if
the statute had not authorized the appointment of  the Independent
Counsel, then the grand jury before whom  Rev. Kisner testified would
not be in existence." Kisner  Response at 3. We have repeatedly held,
however, that  subjects of an independent counsel investigation do not
auto- matically meet the "but for" test simply because the investi-
gation was conducted by an independent counsel under the  Act. As we
stated in Olivas, "If the investigative act generat- ing the defensive
costs would, in the absence of the Act, have  been pursued by other
authorities--'had the case been han- dled by the Department of Justice
or other executive authori- ties rather than the Independent
Counsel,'--then Congress  did not contemplate the award of counsel
fees." In re Pierce,  (Olivas Fee Application), slip op. at 7 (quoting
In re North  (Dutton Fee Application), 11 F.3d at 1080). We have found
 this requirement to be met where, as in Dutton, among other  cases,
the independent counsel has treated as criminal acts  that would not
have been investigated by a political or  professional attorney in the
Department of Justice. Similar- ly, in In re Segal (Sagawa Fee
Application), 151 F.3d 1085  (D.C. Cir., Spec. Div., 1998) (per
curiam), we awarded fees  where the investigation would have been
terminated by a  political or professional Department of Justice
attorney with- out the incurrence of the fees sought. Here, in
contrast, it is  the case that if the grand jury that Kisner testified
before  had not been in existence then some other would have been 
employed to investigate the HUD matter, i.e., the Attorney  General or
other investigative authority would have pursued 


allegations of corruption as deep and widespread as those  occasioning
the Independent Counsel's investigation.


In a similar vein, Kisner makes the argument that the Act  "prohibits
the Attorney General from actually calling a grand  jury to make his
or her preliminary determination of whether  an investigation is
warranted.... Thus, the Attorney Gener- al could not have investigated
whether or not Rev. Kisner had  committed perjury before the Lantos
Committee, and the  DOJ was not empowered to call Rev. Kisner before a
grand  jury." Kisner Response at 3. But as we noted above, if the 
Independent Counsel had not called a grand jury to investi- gate the
HUD matter, then the Attorney General or some  other government entity
would likely have done so. Conse- quently, if Kisner's argument has
any force at all it would  seem to work against him, i.e., but for the
Act the grand jury  would have been in use sooner and his attorneys'
fees would  have been incurred at an earlier date.


Relying on In re Donovan, 877 F.2d 982 (D.C. Cir., Spec.  Div., 1989)
(per curiam), Kisner further claims that the extent  of the IC's
investigation "added to the complexity of the  investigation ... and
exceeded anything the DOJ would have  undertaken merely to review his
actions." Kisner Response  at 4. In Donovan we held that the "but for"
requirement was  satisfied where the alleged wrongdoing was based upon
a  single allegation by a single witness of extremely questionable 
credibility, and the Attorney General, because of the stric- tures of
the Act, could not convene a grand jury, plea bargain,  or issue
subpoenas, and therefore could not evaluate the  credibility of the
witness, and consequently was required to  refer the matter to an
independent counsel. In re Donovan,  877 F.2d at 990. In that case if
the charges had been made  against an ordinary citizen then the
Attorney General could  have disposed of the case much sooner and at
much less cost.  Here, as we have noted, the allegations concerning
fraud at  HUD would in all probability have been extensively investi-
gated by the Executive Branch in the absence of the indepen- dent


The most that Kisner can argue under this theory is that  the
complexity of the investigation lengthened his need for 
representation and increased the attorneys' fees involved.  The
difficulty for Kisner is that the complexity and length of  the
investigation was not caused by the requirements of the  Independent
Counsel Act. The convoluted nature of the  corruption involved and the
high profile identity of the sus- pects and defendants would no doubt
have resulted in a  complex and lengthy investigation with or without
the ap- pointment of an independent counsel. Kisner's difficulties 
were occasioned by his being suspected of having done mis- chief in
high company, not by the identity of the authority  investigating the


Further, as we pointed out in Nofziger, Congress when it  was first
considering reimbursement of attorneys' fees in  1982 was aware that
the inherently different nature of the  independent counsel process
could result in added legal ex- penses to subjects of independent
counsel investigations, but  "[n]evertheless ... refused to authorize
reimbursement for  such alleged 'inherent' costs of subjects." In re
Nofziger, 925  F.2d at 445. If Congress had wanted to so provide, it
could  have authorized reimbursement for those fees incurred for no 
other reason than the triggering of the Act itself. Instead,  Congress
provided only for reimbursement of those attor- neys' fees that "would
not have been incurred but for the  requirements of [the Act]." Id.
And requirements "refers to  the special limitations and procedures
established by the  Act," e.g., the two-step investigatory procedure
by the Attor- ney General and the restrictions on the Attorney General
in  complying with that procedure, id., which we discern as  having no
bearing on Kisner's situation here. Investigation  and potential
prosecution of Kisner by the IC for perjury  "does not satisfy the
'but for' requirement since it is a type of  prosecution that is not
uniquely related to the Act." In re  North (Corr Fee Application), 56
F.3d 261, 264 (D.C. Cir.,  Spec. Div., 1995) (per curiam).


Finally, Kisner attempts to bring his situation within the 
precedential sphere of In re North (Shultz Fee Application),  8 F.3d
847 (D.C. Cir., Spec. Div., 1993) (per curiam). In 


Shultz, we awarded counsel fees to a petitioner who had been  converted
from witness to subject status far along in a  lengthy investigation,
stating that "it is not reasonable to  expect that a professional
prosecutor, as opposed to an inde- pendent counsel under the Act,
would have been making  subjects out of persons theretofore treated as
witnesses four  and one-half years after the commencement of an
investiga- tion." Id. at 851. Kisner contends that that same reasoning
 should benefit him, pointing out that the investigation by the  IC
began on March 1, 1990, that the IC called Kisner as a  witness in
November of 1993, and that "[i]t was not until  March, 1994, that Rev.
Kisner was notified by the IC that he  was, at that point, a subject
of their investigation." Kisner  Response at 4. These facts are not by
any means governed  by the Shultz reasoning.


We entered the opinion in Shultz in the context of a witness  who had
actually been interviewed five times at broad inter- vals as a regular
part of the investigation, and then informed  that his status was
being changed to subject. Kisner, on the  other hand, was simply an
existing potential witness or  potential subject for the first three
and one half years of the  investigation. He had no status as witness.
From the time  of his testimony in November of 1993, until he was
notified of  his status as subject was a period of only four months. 
Kisner has shown nothing to establish that a professional  prosecutor
would have handled his case any differently than  did the IC.
Therefore, absent some showing not made by  Kisner, we cannot say that
the fees would pass the "but for"  test.


CONCLUSION


The petition of Gerald D. Kisner for reimbursement of  attorneys' fees
is denied for failure to comply with the "but  for" requirement of 28
U.S.C. s 593(f)(1).


Cudahy, Senior Circuit Judge, concurring in the judgment:  The result
here is dictated by the extensive Special Division  precedent
establishing an extraordinarily demanding test for  eligibility for
attorneys' fees. Whether Congress originally  intended that the bar
for eligibility be set this high is to me  unclear. But we are not
writing on a clean slate.