Ethics: The Revolving Door Rules

February 14, 2001

Unedited transcript prepared from a tape recording

Proceedings:

[NOTE: Microphone was not working during the first speaker's remarks.]

MR. : --an appropriate time, of course, because we are now in a period where we have large numbers of people who serve [inaudible] or some portion of it leading the government, bound by a set of rules in place [inaudible] and a new set of people coming in, many not yet chosen or formally nominated. They will be [inaudible] by what they've done in the past, what they will be able to do during and after [inaudible]. We'll examine both those coming in, those going out, and we'll take a look at some [inaudible].

Tom Mann, my Co-Director from Brookings [inaudible], so John Fortier [inaudible] our panelists [inaudible].

MR. FORTIER: Welcome to AEI here. We have a special Valentine's Day session on how not to get prosecuted when one leaves government service. What better present than that? Better than flowers or candy.

[Laughter.]

MR. FORTIER: My role here as moderator is going to be to gently prod our three lawyers, our three very distinguished lawyers, as the non-lawyer to bring it down to a level so that I can understand and also to focus on both issues that lawyers face when leaving office and other government officials, what sort of post-employment quandaries that they face.

Let me introduce our panelists. Amy Comstock, to my left, is the Director of the U.S. Office of Government Ethics. Previously, she was senior counsel at the Department of Education and Associate Counsel to the President responsible for the White House ethics program. From 1993 to 1998, she served as Assistant General Counsel for Ethics at the Department of Education, and she was an ethics assistant to the General Counsel from 1990 to 1993, and before that, attorney in the Educational Equity Division.

Steve Csontos is the Senior Legislative Counsel, the next one on the left here, and Ethics Officer at the Tax Division of the Department of Justice. He served as the liaison between the Justice Department and the ABA Ethics 2000 Commission, and you'll hear some about that both from Steve and then from Tom Morgan afterwards. He was a member of the steering committee of the D.C. Bar Tax Section and D.C. Rules of Professional Conduct Review Committee and has served as President of the Department of Justice Chapter of Senior Executives from 1997 to 2001.

And at the end, Tom Morgan is the Oppenheim Professor of Antitrust and Trade Regulation Law at George Washington University Law School. He's the author of widely used case books in all three subjects of antitrust law, professional responsibility, and economic regulation of business and a frequent lecturer on questions of professional ethics and lawyer malpractice, also the former Dean of Emory University Law School.

I'm going to start out with Amy and then work my way down the panel. Amy, I would ask to cover for two people, a lawyer leaving government service and a non-lawyer leaving government service. What are the pitfalls? What are the processes? What regulations affect your livelihood after leaving government service? Who enforces those rules? And I think all three, we'll ask to look at changes coming up to the rules and changes that maybe should be made, and we may have some disagreement on the panel here, and all of that in ten minutes, a general overview.

We'll then move on to Steve Csontos, who's going to look a little more specifically at rules affecting lawyers, and then Tom Morgan will talk about a particular set of revisions that may be coming to the rules and we'll have some discussion. There will certainly be time to get to more details, but a broader discussion at first, some discussion among the panelists, and then we'll open it up for audience questions afterwards.

Amy?

MS. COMSTOCK: Okay. Thanks, John. It's a pleasure to be here today. I hope I can do this in ten minutes. I will try not to use legalese, but I may have to speak quickly, then, to get through all the material.

The first point I want to make responds to your question about rules that apply to lawyers as well as to non-lawyers. The Office of Government Ethics rules, which apply to all Federal employees, make no distinction between whether you're a lawyer or a non-lawyer. We look to the bar rules for that. So that piece, I've done already in my allotted time.

What I do want to do this morning is briefly go over the rules, discuss a little bit their effectiveness, which is obviously a hot topic of late, and then give you some suggestions for avoiding post-employment problems.

The first thing I have to say is that in classic government fashion, you have to think about post-employment laws before you leave government service. You need to begin to think about them when you are beginning your job search.

The conflict of interest statute, which I don't want to go into a lot of detail about, views a Federal employee to have a financial interest in an entity with which they are negotiating for employment. If you're negotiating with a private sector company, it's as if you owned stock in that company once you're at the point of negotiating for employment. So the first tip for staying out of trouble is that when you begin thinking about moving on, that's the point when you need to reach out to your ethics official.

Once you get your new job, regardless of the level in the government, you will be subject to some post-employment restrictions. Everyone is. I will cover those rules. I want to go over them and then we'll talk some about their effectiveness and how to avoid problems.

All former employees are subject to what we call the switching sides rule. All former employees for a lifetime are prohibited from representing anyone else, meaning making a communication back to any agency or arm of the government, with the intention to influence in any specific party matter that they worked on while they were in government.

Classic switching sides issue, if you worked on a contract or a case as a lawyer and then you go to work for a private entity, you cannot represent someone else back to the government on that same contract or case. It is a lifetime bar, but the reality is, matters, of course, tend to have their own--they end, eventually. It doesn't apply to a similar contract or a new contract under the same authority, it's that same contract. So that prohibition does eventually wear itself out. Note that this restriction does not prohibit behind-the-scenes assistance. It's only the act of communicating back.

In addition, supervisory employees take on as if they were their own matters anything that anyone under them in their staff worked on in the last year, and they then cannot communicate back on those same specific party matters for two years. So if a member of your staff worked on something in the last year--you actually didn't have a whole lot to do with it, you trust this person, they have the authority to go off on their own--it's as if you worked on it and you can't communicate back on that specific party matter for two years. That prohibition has significant ramifications for an agency head or a deputy, for obvious reasons.

There's restrictions for those who participate in trade or treaty negotiations, and this is one of the few restrictions that also goes to aiding and advising. There's a restriction for aiding and advising behind the scenes in relation to a trade or treaty negotiation in which you participated.

Next, I want to cover the rules that apply to senior and very senior employees, and these are the rules that tend to be discussed more. These are the cooling off period rules that we hear so much about.

The first level is for senior employees, which is generally employees who are appointed by the President, confirmed by the Senate, or Senior Executive Service Level 5 and above, and certain employees who are appointed in the Executive Office of the President by the President under the appointing authority of 105(A)(2)(b), which I could explain afterwards if someone's interested. But in the prior administration, it was generally deputy assistants to the President. It also applies to admirals and generals.

This prohibits communicating back or making an appearance with the intent to influence before any employee in the department or agency in which you worked during the last year on anything. I used to say in ethics training, if you have strong views on the color of the new carpet, you can't communicate back on behalf of your new employer. Why your new employer would care about the color of carpet, I don't know, but I have always used that to explain that it's any communication. This is not as gut level, especially for lawyers. It doesn't matter whether you worked on that matter in your time there.

Notice that this restriction does not--it bars representational activity only. It does not bar self-representation, so you could still communicate back with your own opinions on matters that the agency is still dealing with. But this is an area where people need to be very careful. If they've remained in the field and have a new employer, people will look very suspiciously if you claim you're just giving your own opinion as opposed to representing your new employer.

This restriction, the one-year cooling off period, is essentially what President Clinton extended in what has been referred to as "the pledge." In 1993, by Executive Order, former President Clinton extended that one-year cooling off period to be five years total, and I'll talk a little more about that in a minute.

The final cooling off period is one that applies to very senior employees. These are mainly cabinet officers and those appointed by the President on the highest level appointing authority, which in the former administration was all assistants to the President. For those people, in addition to being prohibited from contacting your former agency, a very senior employee may not communicate, essentially, with any other employee who's appointed by the President and confirmed by the Senate.

What's interesting about that is the change of administrations does not change the time period. So even though the special access issue may have diminished, the one-year time period is not affected by a change of administration or no change of administration.

Finally, there is one other restriction that applies to senior and very senior employees who are prohibited for one year from representing, aiding, or advis ing--so this is the second place where you see behind-the-scenes issues coming up--a foreign government or foreign political party with the intent to influence a decision of an employee of the United States, and this is a permanent restriction for the United States Trade Representative and the Deputy USTR.

There are a number of exceptions to all these cooling off periods, which I'm rushing through. They're actually quite complicated, which is an issue that we could discuss. But the exceptions do apply when you are representing back to the government on behalf of a State or local government, an institution for higher education, a hospital, or a political campaign. But those exceptions only apply to the cooling off period. There are no exceptions to the lifetime switching sides on a particular issue restriction.

Now I'm going to talk a little bit about what I view as the effectiveness of the current post-employment statutes. My comments primarily will go to the one-year cooling off period. To be honest, we don't have a lot of discussion on the Office of Government Ethics Federal side switching, switching sides lifetime prohibition. That tends to be a fairly gut-level restriction that people are comfortable with, so my comments will go to the one-year cooling off period.

Up front, I have to say, I do not believe, and it is also the position of the Office of Government Ethics, I do not believe that the post-employment rules need to be tightened. In fact, while the issue of special access could not be more timely for today's panel, and it is an ongoing problem, the one-year rule, in my opinion, seems to appropriately balance the need to cool off, if you will, with the hindrance on getting people to enter government service that you would have if you had a longer cooling off period.

Our government, in fact, is designed to turn over at the highest levels every four years, and I generally think it is a good principle to hire people who have experience in the fields that they're going to regulate. The government's policies benefit from this.

Of course, the reality is that there are people who have special access to high-level decision makers, and this has, as I said, certainly been a hot topic since the Mark Rich pardon. But I believe that more restrictive post-employment rules is not the way to address that. In fact, regardless of how we like it, the list of people who might try to use special influence for improper or unfair advantage is longer than former employees. Special access is often, fortunate or not, accorded to friends, family, celebrities, donors, and former employees.

While I think that those who might try to take advantage of their special influence have a responsibility to be sensitive to the issue of not benefitting or appearing to benefit from their special access, current employees at all levels have a greater responsibility to ensure that their own decision making is based on the merits and not outside relationships. I am fearful that if the reaction to the Jack Quinn-Mark Rich pardon issue is an attempt to tighten the post-employment rules, that it will distract attention from the greater issue of avoiding special access regardless of the basis of the relationship.

OGE standards of conduct that apply to current employees do address, to some measure, the issue of impartiality in decision making, and I am hopeful that these rules will be discussed at this afternoon's panel. But for this morning's panel, I want to reemphasize that I do not believe that the post-employment rules is the best way to approach the larger issue of benefitting from special access. It is the responsibility of all Federal decision makers to not allow those with special access to benefit.

As you all know, we have just left an eight-year period where Presidential appointees did have stricter post-employment restrictions. Clinton's pledge effectively, as I said, extended the one-year cooling off period for five years. While we have no clinical evidence or surveys to back up our assertion, it is my belief and the belief of others that the five-year pledge did have the effect of deterring some people from entering government service.

The one-year waiting period is basically viewed by many people as just that, a cooling off period but that you don't have to change careers. Five years was viewed by many as a commitment to essentially change careers for a certain period of time.

In an article I read once, Stephen Gillers of NYU is quoted as saying, "If you prevented a government employee from appearing before an agency forever, you're going to deprive them of their livelihood and scare people away from going into government work." I think five years essentially does the same thing.

I'm trying to stick to my ten minutes, but there's one other issue I want to raise and then I'll go over some tips quickly. When people talk about the revolving door in a negative way, they also often refer to not the access, the actually communicating back, which is what our rules cover, but they also talk about people financially benefitting from having been in the government.

I have to say, I don't really see what is wrong with that. Entering the government is not entering the priesthood. It is not a lifetime vow of poverty. This came up when Secretary Powell was up for confirmation, as well as when Secretary Rumsfeld. They both made a fair amount of money after they left their first round of government service and some people referred to that as using public office for private gain.

I do not see it that way as long as they vigilantly honored the conflict of interest rules while they were in government, and I have absolutely no reason to believe that either of them did not. I do not believe it is inappropriate for people to actually benefit from that experience and growth that they gained in government, and if we prohibited people from doing that, we are going to have a hard time getting people into government.

Now, tips for avoiding problems. First off, I have to say there are relatively few post-employment prosecutions. I'd like to think that's because people get good help from their ethics officials. I hope that's why it is. But if there are problems, the most common problem is understanding what a communication back to the agency is. People don't often realize how minor an action can be a communication. Setting up an appointment or just introducing someone to someone else, if it's on behalf of your new employer, can be viewed as a communication.

The important point, always ask. Former employees are still the clients of government ethics officials. You get a lifetime service in that one point only, and Justice has been very clear that if you sought advice, you gave all the necessary facts when you sought advice, and you followed that advice, that they will not prosecute. Remember that, actually, post-employment prohibitions do not generally go to behind-the-scenes advice, except for the two areas that I mentioned.

Common scenarios, letterhead. Your name on letterhead is okay, but be careful about use of new firm letterhead. This is one of the issues that became a big issue when Richard Holbrooke had his problems, post-employment problems. When you go into the private sector, the rules about personal and official distinctions just are not as strict and it's not that odd to take a piece of office stationery and jot a note to someone. But for post-employment purposes, the very, very bright lines that the government uses between what is official and what is personal carry with you, and that's viewed as a representation on behalf of your new employer, even if the note just said, "Want to have lunch?" Because it's on office stationery, it's viewed as on behalf of your new employer.

Writing an op-ed piece for the Post on the issue in which you're employed with the new employer is fine. Speaking at a widely attended conference is fine. But if your new employer is sponsoring the conference and you're the director of the new organization and you're going to write a cover letter promoting the conference, you have to be very careful. Chances are, you will not be able to send those materials with your cover letter to your former agency, encouraging them to attend the conference.

This is an important one. Well, they're all important, I hope, or I wouldn't have added them. But get your post-employment briefing, or get another one, if you think you already got one, when you actually know where you're going to work for your new job. Your ethics official, government ethics officials can do a much better job for you when they understand whether you're going to a university, whether you're going to a law firm, whether you're going into the oil industry. They really can give you specifics. And make this person work for you. That's what they get paid for. You are still their client.

There is no exception for communications initiated by the government. If you leave your former agency and someone calls and says to me, "Amy, you used to work on this matter. What do you think of this? This is what we're thinking of doing," I can probably answer that because I'd be representing my own opinion, especially this matter I used to work on. But if I stayed in the field and they're asking possibly for the industry view on something, that could be a serious post-employment problem. It doesn't matter if the government initiatives the contact. I can't communicate back on behalf of my new employer.

The last--I'm using up way too much of my time, but the last thing I want to mention, and people do get tripped up on this, too, is there is an exception when you're communicating back to your former agency on behalf of the government, but that's very narrow. If you are called and asked to be on a special commission or board that the President is pulling together on a part-time status, you can only make use of that exception if they make you a special government employee. If you are being asked to serve on that basically as a representative of your new industry, it would still be a post-employment problem if it's within the one year. Similarly, it's not considered a communication on behalf of the government if your new employer is fully funded by that agency, 100 percent of your new salary comes from that agency. It's still not considered a communication on behalf of the government.

I will stop there.

MR. FORTIER: All right. Let's move to Steve and then we'll have time to come back to some more things.

MR. CSONTOS: Okay. I'll try to keep it brief. Actually, Amy stole one of the quotes, or at least one of the sources that I was going to use here. Many of you may have seen an article in the Washington Post on February 1 talking about Joel Klein and saying that his new job with Bertelsman, which will involve regulatory issues, raises perceptions that he's capitalizing on expertise that he gained in government service. It seems that while at the Justice Department, he learned quite a bit about technology and the Internet and technology-driven businesses. The author of this article was smart enough to go to Stephen Gillers for a quote. It seems he is ready to quote on ethics issues, and frequently his name is in the press, and his quote was that, "even former government lawyers have to be able to work."

So this was something that came to the attention of ethics officers in the Department right after it was published and we said, sort of, give us a break. I mean, this fellow has gone out and is just working in the industry. It's probably less of a conflict for him to go with a specific company than there would be if he were to go to a law firm and people would be coming and trying to draw him into representation with respect to a number of particular clients.

The so-called side switching rule that applies to lawyers leaving government service actually started as a rule that was labeled with the intent of avoiding appearance of impropriety. In 1969, the ABA Code of Professional Responsibility included a provision that said that lawyers shall not accept private employment in a matter in which he had substantial responsibility while he was a government or a public employee.

A few years later, the ABA amended its code to provide that if a lawyer, this is government or private lawyer, is disqualified in a matter, then everyone who is associated with that lawyer in a law firm is also disqualified, this imputed or vicarious disqualification of lawyers in the law firm. And so people got a bit exercised about what would happen to a former government lawyer who went to a law firm and that sort of thing. Who would hire this person?

In 1975, the ABA issued a fairly lengthy Opinion 342 that discussed this issue and defined the terms, and, in fact, it is still cited with some regularity in court opinions, and among other things, what this opinion said was that the term "matter" as used in the ethics rule is confined to issues involving transactions or a set of transactions involving identifiable parties. It's very similar to the specific parties test that is in 207 of Title 18, which is what Amy described a little while ago.

Secondly, another important point that was addressed by the ABA opinion was that as long as the former government lawyer is screened from participation in the case and will not share in any fees and the government agency consents, the law firm can undertake the representation and the law firm itself will not be entirely disqualified from undertaking the case.

In the late 1970s, the D.C. Bar had a great debate about the scope of the post-employment rules that ought to apply to lawyers, and in 1982 adopted a variation of the ABA rule using terms that appeared in the Federal statute, personally and substantially participate, as opposed to the idea of substantial responsibility. The idea is that a lawyer has to not just have something under their responsibility but have to actually get into the matter and do something that is of value to the government with respect to the case.

The D.C. rule also did not require consent of the government for a law firm to participate in a case where the lawyer, a particular lawyer, would have been disqualified by reason of government service. Instead, it required that notice be given to the government that this person had been screened and would not share in the fees, and it was then up to the government agency to protect its interests, to go to court and try to get that person disqualified or to bring an injunction suit to prevent that person from proceeding.

The differences between the Federal statute and the rule that governs lawyers, basically, one broad issue is that the rule that governs lawyers applies also to behind-the-scenes representation of a client. It does not apply only to lawyers who come back to government in a representational capacity. It applies to consulting, advising behind the scenes.

The D.C. rule, although the ABA does not include the term, applies not only to the same matter but to substantially related matters, and there's some debate about the degree to which the reference to substantially related matters expands the D.C. rule beyond the scope of the ABA rule.

One of the issues that's on the table in these cases--Amy didn't get to it in her presentation, but one issue is, what is the same matter? For example, if it involves the same parties and the same issues, it's clearly the same matter. If, for example, and there was a case on this, if you were a lawyer in the Antitrust Division of the Justice Department and you participated in an investigation of General Motors with respect to monopolistic activity and then came out of government, you could not represent the City of New York in connection with that same antitrust matter. I mean, that's clearly the same matter. But it also may be the same matter if you were in the Criminal Division of the Justice Department and participated in approval of a search warrant of one particular person but that some confederates of that person were also implicated in the search warrant, information about those persons was derived from the search warrant.

And so it isn't just the same parties. It isn't just the same issues. It can be the same general factual background, and so the question--and I think the Department takes a very, very broad view of what the same matter is. There is some question in my mind about the degree to which adding these words about substantially related pushes the envelope out from where the Department comes out.

One issue that came up fairly recently in my work as an ethics officer in the Tax Division involved a person who had left the Tax Division, had had some involvement with us on a tax issue that arose in the campaign finance investigation. The campaign finance investigation is a huge departmental investigation involving lots and lots of people and the question was whether, as a result of his involvement with this one person in the campaign finance case, he was going to now be on the outside disqualified from representing someone else who had absolutely nothing to do with that person, probably never knew that person or had any business or other dealings with them, and the Department's position was, yes, it's a campaign finance investigation and you are disqualified, and we took a very, very aggressive position and the position was not challenged. At least with the cases in court, people have an opportunity to challenge that position and ask for a judicial determination.

So one issue that's on the table in these cases is whether something is the same matter, and it's highly factual. You can get people coming to different conclusions based upon the same sets of facts. There is, indeed, a matter that was referred to in the Legal Times about a year ago where two government agencies had reached opposite results on what appeared to be very similar situations involving review of very old anti-dumping rulings that the government had issued, and one agency said that its obligation was to review those old orders to see if they were accurate and correct at the time and also to look forward. The other agency said its function was to look forward, and they came to different results with respect to former lawyers who had participated at those at their respective agencies.

So that is a problem when it comes to counseling. It's a problem when it comes to trying to figure out what the right answer is. And what we tell our lawyers in the Tax Division is that if you have any question about whether it's the same matter or not, come back to us and we will give you a comfort letter. Your law firm often will require a comfort letter because the law firm knows that if a lawyer comes back and is disqualified and if the law firm did not follow the screening procedures and give notice and follow the rules with respect to avoidance of the imputed or vicarious disqualification, then the law firm may be disqualified in the case and lose the client and lose the fee and be subject to malpractice for having wasted the client's money and not having taken protective steps.

Another issue that is out there with respect to the bar rules that is not on the table with the Federal statute involves confidences and secrets that a government attorney has obtained. One reason for having a side switching rule is to protect confidences of a client, and in many respects, the side switching rule is sort of a--how should I say it--it's a substitute for looking at whether there were actually confidences that were transferred or whether the attorney had access to confidence. There's a presumption, in other words, if you were involved, you had confidences you could use then.

There's a separate issue out there as to whether, even if you were not participating on behalf of the government, representing the government in a matter, but you had confidences, can you use those confidences when you leave government or do the bar rules restrict you from doing that?

The example that we use is back before they started the renovation of the Justice Department and moved two-thirds of the folks out, many of the junior attorneys were sharing offices, and so one attorney would be assigned a tax case or an antitrust case of some sort and the other attorney would be privy to all the phone conversations and there would be very easy communication back and forth, but the second attorney was not assigned to the case. You would never find any hours billed to that client or on that case or that sort of thing.

The question is, do the bar rules prohibit that and should they, and I think that the answer is yes. There are some questions about the way that the rules have been constructed and I think it's open to debate. It does raise other questions about the marketability of people and the ability to prove whether someone did or did not have a secret or confidence, but it seems to me that that's a separate issue from whether there ought to be a rule that says that you can't do it.

Let's see. Okay. Let me hit a couple more points, and then I'm going to leave to Tom to talk about the Ethics Commission rather than for me to get into that, and then I can critique him as opposed to his critiquing me.

A couple of other points. A big issue that's on the table, it was briefly flirted with by the ABA's Ethics 2000 Commission, had to do with whether a matter for side switching purposes includes rulemakings and policy involvement in regulatory matters and that sort of thing. At least since 1975, when the ABA issued its Opinion 342, the view had been that former government lawyers could work on rulemakings and policy matters and things like that when they went back out in the private sector and that the side switching rules did not apply in that context.

One draft that the Ethics 2000 Commission issued did not define matter that narrowly. I know that the ABA Tax Section sent some comments in on it. I had talked with the folks at Office of Government Ethics and one of Amy's predecessors or staffers sent comments in on it. The IRS sent comments in on it. And those of us at Justice who worked at the staff level on this complained about it, and the Commission did back off on the issue of rulemakings, and so it has retained in its draft the narrow definition of matter as applied to former government lawyers.

In terms of my practice, usually what happens is someone calls or writes and they ask whether something is or is not the same matter. Some of the folks in the Department get numerous calls on supervisors who left government and they want to find out whether the matter was pending within the last year of their government service because that's an issue that is in the Federal statute, as Amy described earlier, and they have no way on leaving the Department to know that something has been under their supervision because they may not have even heard of it. It could have been filed the day before they left, but they are still subject to the statute and they have an obligation to find out whether they are disqualified or not.

MR. FORTIER: Why don't we leave it there and we'll--

MR. CSONTOS: Sure.

MR. FORTIER: Tom Morgan?

MR. MORGAN: Okay. What I'm going to be talking about this morning is an issue that has been something of a stealth issue in terms of public attention, not because people have been keeping it a secret but because it simply has not gotten much public visibility, but I think it may be useful for us to see what's going on and to be in a position to consider it and think about whether it makes sense.

This is a proposed amendment to Rule 1.11, the same rule that Steve was talking about, and I think Steve did an excellent job of introducing that rule, but it may be helpful to the non-lawyers here to understand that there's a difference between what Amy was talking about, which is Federal legislation and regulation dealing with all government officials, essentially, lawyers or non-lawyers, and what Steve and I are talking about, which is the set of rules adopted by State or D.C. Supreme Courts that regulate the practice of law and regulate what it is a lawyer may do and the circumstances under which a lawyer can be disciplined, up to and including disbarment. So we're talking about the rules that regulate a lawyer throughout his or her career.

The present rule, as Steve said, provides that a lawyer may not represent a private client on any matter on which the lawyer worked personally and substantially, which is not a very high test, but worked while in government, and that is slightly tougher than the Federal criminal statute that Amy described because it says that you cannot only not appear before the government, you may not work on the matter at all, even back in the office. But the analogy of 1.11 to the current Federal statute is clear. The matter defined in 1.11 is exactly the same kind of matter that's defined in the Federal statute.

In the ABA opinions on the subject, which are included in this telephone book full of materials for today's program, both opinions appear and both of them say that Rule 1.11 means, essentially, the same thing as the Federal statute.

When we did something called the restatement of the law governing lawyers, which was something done by the American Law Institute--I was one of the reporters for that project and we worked 14 years on all the law governing lawyers--we restated the law exactly the same way, so that this has been a longstanding understanding of the parallels between the present Federal regulatory framework and the regulatory framework governing lawyers who return to private practice.

The proposed change by the American Bar Association, and this is a commission called the Ethics 2000 Commission, which has done wonderful work on many or most of the rules of professional conduct, but on this one, what they've proposed doing is saying that the obligations of a former government lawyer are going to be exactly the same as those of a former private lawyer, at least where the lawyer would oppose the government or be aligned against the government in a particular matter.

That is, if you go out and work--if you're an EPA lawyer and have worked for the EPA in enforcement matters and you go out and represent private clients in enforcement matters, then you would be prohibited from representing the private client against the government every time you would be barred from representing a private client against a former private client for whom you worked.

And the problem with that is that the language used, as Steve said, is the same or substantially related matter. Substantially related in this context meaning a situation in which you could use confidential information, of the government, in this case, against the government. But you need to understand--that doesn't sound so bad until you understand that confidential information for a lawyer means anything you learned in the course of representing that former client, anything relating to the representation.

Therefore, in a number of cases under Rule 1.9, which is the analogy that the commission is proposing, if you learned in the course of your--what Mr. Klein learned, to follow up on this example, information about the industries, information about technology, whatever, all of that would be potentially disqualifying information in his subsequent representation. I'm not meaning to give an opinion on his case, it's just that we've talked about him enough that I think it's useful to follow up.

If he went to work for a technology company and had previously worked for another technology company, I guarantee you that that former private client would have tried and would probably have succeeded in preventing him from giving advice to his new client based on what he learned at the old client. And the question is whether the same principle ought to apply to former government lawyers.

Let me suggest that there are a couple of reasons why it shouldn't, and I think part of this just follows from what's been said before. One of the groups that should be concerned about this change are government lawyers and their potential private clients. That is to say, it's the same point we made before, that former government lawyers have to make a living somehow and if you've worked at the SEC all your life, that tends to be what you know. And if you are barred from working on matters substantially related, as distinct from the same matters, then you are facing a very real possibility you're going to have to learn something about tax or something other than securities when you leave your agency.

Second, and more important, I think, for our purposes as citizens, the government suffers from this kind of problem that potential employees will face. I'm not suggesting that you'll never get anybody to apply for a government job, but I am saying that if the government is in the market for recruiting top-quality people, as it should be, to staff its many departments and agencies, that it has to be concerned about how any reasonable lawyer, in this case, is going to view the impact on his or her job prospects of taking that job with the government. And the higher you are, the more you know, the more you are potentially going to be prevented from using the information when you get out of government.

Furthermore, the rule draws an important distinction that isn't in the present rule. The present rule says that if you worked on a matter, you may not counsel or work on the matter for the government, against the government. You can't take, if you leave the Justice Department Antitrust Division, for example, and worked on the Microsoft case, you can't take private actions against Microsoft, either. It draws no distinction. But it limits the definition to particular matters and that's how it avoids being--just blocking you from doing everything today.

What this rule would do is force us to draw what I suggest is an artificial distinction between private practice that is opposed to the government and that which is favorable to it. Suppose a client comes in to our former EPA official or our former SEC official, or you name the agency, and proposes a course of action. If it is the same matter today, the lawyer says, you've got to get out of the office. I can't talk to you. My partner can. I've got to be screened. But if you can talk to them, then you may well say to them, that is a very dangerous, that is an illegal course of action. You may not--you shouldn't do it and I recommend you not do it.

The question's going to come, is that opposed to the government. The alignment of the individual inquirer and the government is going to be that of regulated and regulator, and there is a very real question whether the lawyer could even give the kind of advice that I've heard government officials say routinely is the most important advice that private lawyers give, namely compliance advice. And if we set up a rule that bars former government officials from giving compliance advice, the government is going to be forced to pay a price that is just, in my judgment, totally unjustified.

Let me simply suggest the arguments on the other side, although Steve and others may choose to do that later. First is that there is genuinely confidential information of the government that lawyers should be required to protect, and I don't question that there is some such information and some particular agencies have more of it than others and can establish rules protecting it. If you're the former CIA lawyer, there's probably a lot of stuff that you know that--

[Break between sides of recorded tape.]

MR. MORGAN: --and I don't question that there's some information like that. Indeed, when you hear about the Sofaer case at lunch, at least part of that case, for many people reading about it, has been whether or not such information might have been involved.

But most information that lawyers learn when they work for the government, I'd suggest to you, is not that kind. Learning how the agency works, learning what the problems are, learning when they're likely to prosecute, when they're not, these are kinds of information that the public is entitled to know. The public should know. It is public information in any real policy sense. And I'd suggest to you that the amount of information that we appropriately treat as private for the government as distinct from private clients is much, much less.

Second, the argument is that the D.C. rule now has the substantially related language. Steve has made that point and that's been an important point before the Ethics 2000 Commission. I'd suggest to you that it's D.C. that's probably got it wrong. Now, D.C.'s rule is as it is because there are some cases in the District of Columbia, primarily involving the District of Columbia Government, or a case, really, involving the District of Columbia Government, in which the term substantially related was used in what lawyers call dictum. That is, the court said, we'll assume the substantially related test applies, and even so, the lawyers aren't disqualified. There just was no relation between these cases.

The D.C. Bar felt it necessary, however, because the court had said that, to put that language in the D.C. rule. And I would suggest to you that, again, the Sofaer case that you're going to hear about at lunch is an interesting illustration of the fact that when you put in this area of ambiguity, what is substantially related as opposed to the particular matter on which you worked, that you open the door to misjudgment, criticism that you wouldn't have opened the door to if you had made the matter more specific.

Steve suggested that even the present rule is not without ambiguity, but this one, the substantially related test, is an unbelievably open-ended invitation to mischief, mischief that can ruin a lawyer's reputation and ultimately do great damage to his or her career, and because of that, I predict, will ultimately do significant damage to the government and the nation that it serves.

MR. FORTIER: Okay. Let's take a few minutes to just have some comments back and forth, and then we'll turn it to audience questions. If there are reactions to the others?

MS. COMSTOCK: I just want to make sure that I was clear and we're all clear on one point in terms of the interplay for lawyers between the Federal rules and the bar rules. The lifetime bar that we're talking about, even though particular matter is the term used in the Federal rules, the lifetime bar that we have applies only to specific party matters.

One of these opinions is a little unclear on the point, but it's a situation where an attorney worked on a rulemaking, leaves the government, and then wants to take on as a client someone to represent back on that particular rulemaking. Under the Federal rules, we would not prohibit that because the rulemaking is not considered a specific party matter. But, for one thing, the opinion kind of doesn't interpret our rules the way we do, so you need to be very careful about that.

Now, the bar rules will raise a different issue, which we honor and respect, but it's not the Federal rules.

MR. MORGAN: And the ABA rule, as proposed, would honor that regulation exception. That is to say--this may be more technical than we need to get into, but if all you do in government is policy, if all you do is--if the most specific thing you do is write regulations, then you do not face the bar under 1.11 as today or as proposed. But assuming we're talking about lawyers who are involved in enforcement matters, and I'd suggest to you that that's an awful lot of lawyers, then all the issues that I brought up apply.

MR. FORTIER: Actually, before I do this, can we get a mike out here for audience questions, just to get it ready? Is Paula around? Okay, go ahead.

MR. CSONTOS: Okay, Tom, I don't disagree with you that government as the client has lots of information that the public is entitled to know. I think that the department or an agency's enforcement policy, I think even its settlement policy and its usual practices and procedures and who has to do what in terms of approval processes and that sort of thing, that's all public information as far as I'm concerned.

I think that where we may disagree is on the degree to which the confidentiality applies to that sort of information or not, and in terms of the substantial relationship test, it's been a part of the D.C. rules at least, I guess, since--I think it came in in 1990 when the D.C. rules were revised. So much of whether something is the same matter or a substantially related matter is going to ultimately depend on context and on the person who's making the decision in terms of if it's a litigated case. Most of these issues, I submit, never get to litigation because it's like much of law and ethics and even the tax code. It's a question of knowing what the rules are or knowing when you get into a problem area and people backing off from them and never getting into a situation.

Beyond that, the next stage is if they get into a case and are told that we think it's a violation of either 207 or 1.11, and truthfully, if we get into a disqualification motion, the Department's practice is to cite both 207 and 1.11 to the extent that both would be applicable in a situation, and the words that are the same we treat similarly. We don't think that there's any real distinction between the words that are used in the same fashion in both provisions.

But in a disqualification context, you know, it seems to me that that's where the rubber hits the road and we push on it. But for the most part, people are not getting into trouble because they have a general idea of what the rules are and they don't go there, and there are not legions of cases. I mean, there are a number of cases, but if you go into electronic legal research, you don't find dozens and dozens of recent Federal cases. They're just not there. People are not getting into this kind of trouble.

MR. MORGAN: Just a quick response. I think it may be important to understand that the D.C. rule uses substantially related in Rule 1.11, but the proposal from the ABA is to incorporate into Rule 1.11 all of what's now Rule 1.9. Now, this is, again, probably more technical than you want to know. But it brings in all of the doctrine and all of the case law relating to former private representation. That is, the government lawyer is treated as if he or she worked for a private client, and all of the case law, and there are thousands of cases on this one, that deal with former private clients and what would be disqualifying would enter in.

Second, Steve says that there are not a lot of disqualification motions filed by the Justice Department, and that may be. But the important thing to understand is that disqualification is not the only remedy. I don't want to argue the Sofaer case, but Mr. Sofaer was charged as a disciplinary matter. Other lawyers could be charged with a breach of fiduciary duty. They could be charged with malpractice for their private client because they were accused of somehow violating their obligations to the government, if that were later to do damage to the private client. There are all sorts of remedies besides disqualification.

I think we don't have the cases now and don't have the problem now, in part because the D.C. Bar officials have not pressed Rule 1.11 in D.C. the way that it would be pressed nationally if we change this rule more broadly.

MR. FORTIER: Okay. Questions, and wade to the microphone and identify yourself. In the back here?

MR. DELANEY: Yes, Jim Delaney from the Institute for Defense Analysis. As the new economy becomes increasingly globalized, my question is specifically to Amy about the extent to which there has been any outreach from your office or the ABA to counterparts in the advanced industrialized countries in order to harmonize our approach to some of the issues here.

For example, I was contacted over the weekend by a commission that has been created by the Prime Minister of Japan to look into a more narrowly focused issue, which is the government officials' use of discretionary funds. There has been a scandal in the foreign ministry that is about to bring down the Prime Minister there.

I remember Steve Potts, my tennis accomplice, telling me a few years ago that your office was getting involved with counterpart organizations in other countries. I haven't kept track of that, but--

MS. COMSTOCK: We do. We have played a fairly strong role in the last number of years on working with a number of international organizations through the Department of State to aid in anti-corruption efforts around the world. We, for example, have an MOU with Argentina to assist them in setting up the kind of sunshine disclosure system that our government has now.

To be entirely frank with you, on the post-employment issue, I do not believe that that's been a big topic internationally. I would have to check on that, but I think that has not been the prime topic. It's much more on public disclosure kind of issues. But we are active in that effort and will continue to be so.

MR. DELANEY: [Inaudible.]

MS. COMSTOCK: We actually deal with a number of them. If you want specific people you can follow up with, I could talk to you afterwards. But depending on the topic at issue and the country, that affects who we're working with.

MR. FORTIER: Brad Patterson?

MR. PATTERSON: Brad Patterson, formerly of Brookings. I have a question, and if I'm not close enough to the subject, then rule me out of order. What about men and women in government who become authors after they leave government? I wonder, Amy, if there are any rules to Kissinger, Stephanopolous, Sidney Blumenthal, who obviously have been involved in particular matters up to their ears and come out of government and gain very large amounts of money. Are there any rules relating to either publishers or the authors in that matter, or that's simply a matter of judgment and proprieties?

MS. COMSTOCK: Yes. I mean, there's kind of the initial question, are there rules governing what we all should do regardless of criminal statutes, which are minimal standards of behavior, obviously, for a society.

No. Obviously, current employees, there are restrictions on what current employees can do in terms of writing a book or signing contracts. But once you leave, our rules do not apply. It has been my personal opinion for years that the conversion of public property criminal statute should be interpreted a little more broadly to cover revealing confidential information, but I seem to be somewhat alone or at least--no, there's one other person who agrees with me. But I read the statute again this morning anticipating an issue like this and it really--it's not on point. I wish there was something on point.

On the other hand, clearly, history needs material. My personal belief, absolutely personal belief--my General Counsel is sitting there, so it's my personal belief--is that I would not write a book until an administration was over. I think that immediately and during an administration, it may not be a criminal matter, there are no rules that govern it, but I think it hampers the ability of the current administration to function. But there are no specific rules is the answer.

MR. MORGAN: There are bar rules that apply to lawyers. I think that often people act as if they didn't apply to a lawyer once they left government service, but the confidentiality rules are no less applicable once you leave a client than when you're with a client. There are times, especially when former United States Attorneys go out and talk about their differences with current and former Attorneys General and that sort of thing, and I think that's terribly unbecoming and unprofessional, and I think at some point, a bar counsel is going to get a complaint on something like that and going to run with it. But the rules are there. It's a question of is somebody going to enforce them.

MR. FORTIER: Richard Painter?

MR. PAYNOR: I want to say that I agree very strongly with the view that the criminal statutes do apply. I wrote an op-ed in the Wall Street Journal and a book review in the Michigan Law Review about a former Supreme Court clerk who either removed documents from the courthouse or had another clerk remove them from the courthouse to write a book, got a large advance on that book, and he was a U.S. Attorney when he did it at the time. It took the U.S. Attorney's Office a considerable amount of time to get him out the door. He now works for Talk magazine, appropriately named.

The question I wanted to ask is directly to Tom Morgan. How much effort was made to solicit the views of former government lawyers by the Ethics 2000 Commission in drafting these rules, and if there was not a sufficient effort in that direction, what can be done now to get the input from former government lawyers?

MR. MORGAN: Well, I think, in general, the ABA Commission ought to be commended for its efforts to be transparent in its processes. They have a website up and they are inviting comments. But the reality is that issues don't tend to get the attention of people until quite a ways down the road, and that's where we are now.

They have not made any effort to systematically canvas the opinions of any group that may be affected by the rules. We are now at a point where they have published a set of tentative proposals, and tomorrow in San Diego at the ABA mid-year meeting, they're going to have a public hearing and some of us are going to be urging them to canvas much more vigorously. The ABA Administrative Law and Regulatory Practice Section is likely to oppose these rules.

I don't want to turn this into a recruiting session necessarily, but those of you who are interested and concerned, I would be delighted to talk with you and communicate with you and encourage you to communicate with the commission directly or otherwise to try to get the opinions of informed and interested people brought before them, because like any ABA commission, they've ultimately got to convince the ABA House of Delegates that this is a good idea, and the reality is that no serious attention has been paid to the matter by a group much larger than the commission itself and a few academics and others who are aware of it.

I should say, to his credit, Steve Csontos has been at virtually every meeting of the commission, and I won't try to characterize your remarks, but basically, they have been approving of the proposed change. That's why I thought we might get a little debate here today. So in that sense, they have sought the views of at least one current government official.

MR. CSONTOS: Well, look, I guess I need to explain how I got to where I got. The commission was out for about a year and it was my understanding that there had not been a Department representative attending any of the meetings and so I volunteered to represent the Department and that was approved. So I have gone to the meetings. They have listened to me.

I tend to think that Tom's statements about the substantially related issue are a bit off the mark, but it's something that we need to take a look at and that the Department institutionally has to comment on it. With the train that was running as this one was, it would have been very difficult for us to create some sort of a formalized task force because the way that the commission was issuing its drafts, generally it was a couple of days before a meeting and things were--and you had to be on the inside and know what was going on and that sort of thing.

But, I mean, Tom's point is that someone ought to take a look at this very closely and this is something that the new folks at the Department are going to be briefed on as soon as we get people in place and the Department will take appropriate action with respect to whether the substantially related issue is a major problem or not. The problem that I had seen earlier on had to do with the rulemaking issue, and I did stir the pot on that and I got OGE and IRS and the ABA Tax Section and others involved in that.

But as Tom says, the commission's meetings are very poorly attended. I mean, there are perhaps a dozen people who have been frequent attenders. There are a number of malpractice lawyers. There are a number of representatives of malpractice insurance carriers, a few academics, people from a few bars, and that sort of thing. On the other hand, they've had a website that's been out there and so their drafts have been on it and they have taken comments from many people. Anyway, I guess that's enough.

MR. FORTIER: Ed Cowan?

MR. COWAN: I'm Edward Cowan with AEI. Let me outline a hypothetical that I think is not far removed in a general way from reality and then I'd like the panel to tell me whether it's go or no go, how it fits with the law and the ABA rules.

You're an IRS lawyer. You work for the IRS issuing rulings on tax shelters as the application requests come in from various investor groups that want to set up shelters, and you do that for several years and you work on some finite number of cases. Then you leave the government and you go either with a new group of investors that wants to have someone with that kind of expertise to advise them, or you go to a law firm which will counsel investment groups generally on the tax status and legality and so forth of shelters.

How would either of those post-government employments comport with Federal law and with the ABA rules?

MS. COMSTOCK: I'll start with the Federal law, I guess. In your hypothetical, if the IRS lawyer is working on tax shelter inquiries for particular investor groups, that--obviously, these are all very fact specific, but based on your hypothetical, that would be viewed as the specific party matter and as long as the new employment was not for that investor group or on behalf of their investor group--it doesn't matter if it goes to the group itself or to the law firm, but as long as it's not on that request, they could communicate back under the lifetime ban. Depending on whether they were senior, they still might have the one-year cooling off period. But briefly, superficially, that's how we'd view it.

MR. MORGAN: And I think it would not be any different under the bar rules. I think that that lawyer could go out and use his or her government expertise to counsel people who are involved in new tax shelter deals or promotions. There is at least one Tax Court case where a lawyer who had been a tax shelter coordinator for the Internal Revenue Service went out and wound up representing someone who had been an investor in that tax shelter and that person was disqualified on motion in the Tax Court case. But as long as it's an entirely separate transaction, that's an appropriate post-governmental use of your experience.

MS. COMSTOCK: I do want to add, the IRS is one of the few agencies that does have a few of its own post-employment rules. So if I said nothing else here in the introductory comments, it would have been, check with your ethics official. That person, you should always, always, always check with.

MR. MORGAN: I think that clearly is the way it should come out. I'd simply suggest to you that if the rules are changed as proposed, the question, the analysis is going to be, suppose you imagine the IRS to be a private issuer of benefits and you had worked for that issuer and now move over to represent people who are trying to get the benefits. I think there's a very substantial question, a very substantial likelihood that the former private employer could prevent you from doing that, could prohibit your doing that, and, therefore, that the IRS could--or the Justice Department or whoever was bringing the action to enjoin you--could enjoin your conduct or report you to the bar association or whatever.

None of us knows for sure how those cases would come out, but what I'm suggesting is the risk goes up substantially, and as the risk goes up, it makes it that much harder to get people to go into those positions in the first place because the costs of being wrong are so high.

MR. FORTIER: Yes, sir?

MR. ORNSTEIN: Norm Ornstein. I'm interested in the larger issue of the chilling effort or potential chilling effect that rules can have on getting people to serve, and that's at a lot of different levels. It's at the top levels that are most directly affected by things like the five-year post-employment restrictions.

But I would also be concerned about entry-level positions where it's in the society's interest to have top-flight lawyers, for example, going into the SEC or the IRS--

MR. : Or the Justice Department.

MR. ORNSTEIN: --or the Justice Department when you've got top-flight people outside trying to get around all of these rules.

And the question I would have, I guess it would fit for Amy and Steve in particular, but for any of you, is Amy mentioned that anecdotal evidence that the five-year restrictions seem to be having a chilling effect out there. Do we have any sense that the repeal of that restriction will make it a little bit easier, but also, given now that we're talking $150,000 or $160,000 entry-level salary for people coming out of law school going into top firms, maybe a third of that for people going into government, are the additional restrictions that we're talking about here, in your judgment, even if it's only impressionistic or anecdotal, having an impact on people coming in? Do we get people coming in? Do you get people coming into the IRS thinking ahead about their careers and what they'll do if they want to leave later on? What sense do we have of this?

MS. COMSTOCK: Again, the information that we have on the pledge is only anecdotal, because, of course, there's no survey of the people who asked not to be considered for a Presidential appointment who would have been subject to the pledge. But I personally have talked to a number of people in my position at the White House and at Education, as well. It did deter them and, ultimately, they did not go into government service. I also had the pleasure of talking to a number of people after years of being in the government and reminding them they signed the pledge. That was the hardest conversation to have, actually.

Of course, the one-year cooling off period only applies--it doesn't apply at the entry level, and the current switching sides provision that we have does not deter entry level. And my personal experience at OGE as well as at the Department of Education is that for government attorney jobs, salary aside, we still get a good deal of very good applications. I find it encouraging to see the numbers and quality of people who still want to go into government service, in spite of the one-third salary, as you mentioned.

But I find the discussion about the revisions to--they make me nervous. They would have a chilling effect, especially for young people who don't know what they want to do. They aren't ready--I'm not ready--nobody in this room is ready to say, this is what I want to do for the rest of my life, and I think it would be foolish to have a rule that would either limit them to a lifetime of government service or never go into government service. It will have a huge effect.

MR. FORTIER: One last question. Edwin?

MR. WILLIAMSON: Edwin Williamson. I'm going to raise this question a little bit rhetorically and I'm going to address it from a slightly different angle in the luncheon discussion in the Sofaer case. But following up on the hypothetical of the IRS case, I suppose the government employee was totally immersed in these tax shelter ruling requests or whatever they were before the IRS, but solely for the purpose of rulemaking, is there a problem when that person goes out into the private sector and then actually represents a party in one of those transactions, and again, let's exclude any special IRS rules here. We're just under 207 or 1.11.

MS. COMSTOCK: In general, the principle is, no, that a rulemaking is considered at a level above a specific party matter. Now, you and I can pretty easily come up with a hypothetical where there was a rulemaking where there's one affected industry. That industry was highly vocal and active in lobbying that agency, so it sure looked like a specific party matter. In general, though, the rulings are not considered to be specific party matters.

From a program perspective, when I'm advising clients, however, this is always where I would quickly chime in with, these rules are minimal compliance, and I have, on occasion--and this is contrary to OGE's view that rulemakings are policy matters--I have counseled people that in unique situations like that, they should not represent the new entity back.

MR. : It comes at different levels, though. On one level, it's a question of what does the rule mean as applied to particular facts, which I think most of us would think is not a problem. At another level is the question of coming back and asking for an agency to withdraw something that the lawyer had worked on or challenging it or that sort of thing.

The Treasury actually has in its standards of practice before the IRS a specific provision that says it's generally okay to come back with respect to a rule of general application that you worked on, except that for one year, you cannot come back on behalf of a client and ask that it be withdrawn or challenge its efficacy and that sort of thing. So in other words, interpretation is okay within a year, but when you go beyond that, it's not.

Now, when the D.C. Court of Appeals was looking at the D.C. Bar rules back in the late 1970s, this was an issue that was on the table. Should there be a one-year or multiple-year cooling off period, a five-year cooling off period on coming back to an agency on rules, and the court decided that that was not a good idea. But debate was joined and it was very, very vigorous and I think there was a significant split in the bar on that issue. But at the moment, there is not any prohibition on that with respect to the bar rule or with respect to 207.

MR. FORTIER: We're going to end the panel right there. We want to thank our panelists. I think you'll find that many of you may be reassured by what has been told to you here and may be submitting applications to the personnel office.

[Laughter.]

MR. FORTIER: And for those who have not, maybe you'll be chiming in with your opinions on some of the proposed rule changes that have been brought up and at least be made aware of it.

A couple of directions here. We have a long day. This is just the first of a three-part series. The next part will be in the next room here, a luncheon discussion of the Abraham Sofaer case with Edwin Williamson and Richard Painter. And then the third session will be back in here after the lunch.

Quickly, the two books Norm mentioned from our project, books that deal with going into governing, Preparing to Be President, a series of memos by Richard Neustadt over the years, and The Permanent Campaign and Its Future, how governing and campaigning, the distinction has been blurred, and how our political world has very much changed. They're available out in the front, and we look forward to seeing you all at lunch.

[Luncheon recess.]

A CASE STUDY -- IN RE ABRAHAM D. SOFAER

MR. PAINTER: --is conflicts, and that's conflicts both in the private sector and for former government lawyers, and the reason for this is that conflicts rules have a severe impact on the right to counsel. You ought to be able to choose a lawyer and know that that lawyer can represent you, and the lawyer ought to be able to know up front that they can represent a client and not have standards being imposed by a fact finder ex post who says that the representation creates an appearance of impropriety and, therefore, you no longer have a right to your lawyer.

So given the impact on the right to counsel and other issues, I think, clearly weigh in favor of using rules in the client conflicts area as opposed to broad standards.

When conduct of government lawyers is involved and former government lawyers, that also is an area that I feel strongly rules ought to be applied. We live in a world where the meaning of the word "is" depends on one's political--

[Laughter.]

MR. PAINTER: Let's face it, we do, and, therefore, standards such as appearance of impropriety, I'm not sure are appropriate for evaluating the conduct of government lawyers and former government lawyers, at least in many contexts. You're asking for the process of applying those standards to be heavily politicized.

So when you put these two areas together, conflicts and former government lawyers, I think there's a compelling case for using rules as opposed to standards.

Now, the Sofaer case, I believe, is a case where standards run amok, and as Edwin describes this case, I would like people to focus on three issues that are going to be critical issues in this case. The first is, what is the matter that Abe Sofaer handled or dealt with while he was at the State Department?

The second is, what is the personal and substantial participation? How do we evaluate that? Did he personally and substantially participate in that matter? Is that a standard or a clear rule that's being applied?

And then third, we have the D.C. Bar bringing in the standard which, as Tom Morgan mentioned, the ABA is considering bringing in a model Rule 1.11, which is what is substantially related to that matter. The current ABA rule would only reach the matter itself. But now we have the third standard of what is substantially related.

How clear are these standards, I would ask? Are they easy to comply with ex ante? And if not, what are the costs of imposing broad standards in this area instead of clearly definable rules?

So I want to turn this over to Edwin and we can focus on some of the facts of this case and, hopefully, have some answers to those questions.

MR. WILLIAMSON: Thank you, Richard. I'm not sure I'll provide many answers, but I think I can raise some more questions for you that maybe you all can answer.

Well, Abe Sofaer was a sitting U.S. Federal District judge in the Southern District of New York when he was appointed the legal advisor of the State Department in 1985. He served until June 15, 1990, and I succeeded him in September of 1990.

The case, as we discussed, rose out of a very brief, roughly two weeks, representation by him of the Libyan government in July of 1993. Representation was limited. He was to seek a consensual resolution of the ongoing dispute between the U.S. and Libya arising out of the bombing of Pan Am 103 over Lockerbie, Scotland, in December 1988. All 289 persons on board, most of them Americans, and 11 people on the ground perished in that bombing. Sofaer's hope was to at least settle the claims for compensation by the victims' families by getting the Libyan government to make an ex gratia, that is without admission of liability, payment to the victims' families.

Sofaer was specific and he was not to represent the Libyan government in litigation. There was a class action suit brought by the victims' families against Pan Am, and I'll refer to that as the civil case that gets relevant later on. Pan Am in that case counter-claimed, or cross-claimed, I guess, brought in the United States Government as a third party defendant party on the grounds that the U.S. had advance warning of the bombing and should have warned about it.

Sofaer was also not going to get involved in the criminal case that was brought against the two Libyan individuals. As you probably noticed week before last, one of those individuals was finally convicted by a Scottish court sitting in the Hague.

News of Sofaer's representation was reported in the Washington Post in early July 1993. The Post foreign affairs columnist, Jim Hoagland, wrote a very critical article about Sofaer, asserting that the Libyans had sought Sofaer out because of his service as legal advisor and the resulting influence that that would give him in this Clinton administration, despite what I consider to be sort of the assertion that Sofaer was not popular in some quarters in his own party, much less in the Clinton administration.

Anyway, a groundswell of ferocious intensity was kindled by all of this. Senator Levin called for an investigation by the Justice Department as to whether or not Sofaer had violated the Federal Rule Section 207 that we discussed this morning.

OFAC, which had granted--the Office of Foreign Assets Controls had granted Sofaer's firm a license to receive fees from the Libyans, took the position that his limited activities on behalf of the Libyans did not come within the general license provided in its regulations for lawyering activity because there was no way that he could participate in a settlement if he was not representing the defendant in the ongoing litigation.

Leonard Becker, who was then the D.C. Bar Counsel, joined in the fray, not on the basis of any complaint by anyone but purely as a result of the reports of the representation in the Washington Post. We asked Mr. Becker to join us on this panel, but he declined. After an investigation, he issued an informal admonition in January of 1994. An informal admonition is the sort of lowest, lightest form of discipline. It is literally a slap on the wrist. But if you have to fill out a form that says, have you ever committed an ethical violation, you would have to check the "yes" box. A former Assistant U.S. Attorney, former law school professor, former Federal judge, former legal advisor would not like to have to check the "yes" box.

Sofaer rejected the informal admonition and it took about another year and a half and the Bar Counsel issued a formal specification of charges. A hearing ensued before a hearing committee of the Board on Professional Responsibility in the fall of 1995. The hearing committee, in a two-to-one decision--quite interestingly, the hearing committees consist of two lawyers and a lay person and the idea is that you're supposed to bring in the common sense of the lay person and so forth to the proceedings. The lay member, Jean Warnke [ph.], dissented from the hearing committee decision.

Anyway, the hearing committee issued its reporting recommendation in October of 1996, recommending an informal admonition. Appeal was heard by the Board on Professional Responsibility in February of 1997 and it issued its order in a six-to-one decision, one member recused and one of the two lay members not participating. There was one dissent.

Sofaer appealed the order to the D.C. Court of Appeals, which heard oral arguments in April 1998 and issued its decision upholding and adopting the Board's order in June of 1999. I mention these dates simply to point out what a long and drawn out process this was. I mean, it took a year and a quarter for the D.C. Court of Appeals to issue its opinion after oral arguments.

Sofaer petitioned for a rehearing before that court. It was denied. He then petitioned the U.S. Supreme Court for a writ of certiorari on the grounds that he'd been denied due process, but that was denied.

I first heard about the Bar Counsel's case pursuant to Sofaer in the summer of 1995. Given the very little involvement that I had had in the Pan Am 103 matter prior to the fall of 1991, which was when the proposed indictments were announced and so forth, about three or four weeks before that, we were brought in. We did things like draft U.N. resolutions. But prior to that time, I really had no clue as to what was going on, so I was quite surprised that Sofaer could have personally and substantially participated in this matter.

My suspicions that he had not been so involved were borne out by what the Bar Counsel based its allegations on. So I testified at his hearing, and then when the hearing committee's report and recommendation came out, I was astonished at the legal and factual conclusions, so I formed a group and we submitted amicus briefs in support of Sofaer's appeal to the board as well as his appeal to the Court of Appeals and his petition for rehearing. On the briefs with me were 16 other former government officials, including two former Attorneys General, four former White House counsel, and four former Assistant Attorneys General for the Office of Legal Counsel.

Well, the case obviously at issue was whether Sofaer, while serving as the legal advisor, one, participated personally and substantially in, two, a matter as defined in the D.C. Bar rule, and that was substantially related to his limited private sector representation of Libya. In my view, these proceedings consisted of one attempt after another to fashion a matter, which I'll refer to as a Rule 1.11 matter, that would meet these other two criteria, that Sofaer had participated personally and substantially in it while serving as the legal advisor, and it was substantially related to his two-week engagement with the Libyan government.

The record clearly established that after the United States responded to Libyan terrorism by bombing Tripoli in 1986, Sofaer had very little to do with Libya, particularly in its role in the bombing of Pan Am 103 during his tenure as legal advisor. In fact, I think it sort of added a little irony, and again, this isn't a key factor in terms of the application of these rules, but until June of 1990, the primary suspects in Pan Am 103 were a Palestinian terrorist organization believed to be working under the auspices of the Syrian government and probably with some Iranian involvement and Libya was not the primary suspect. And so about the time, just coincidently, about the time Sofaer left the legal advisor's office, the focus turned to Libya.

Basically, what I saw was that the Bar Counsel, the hearing committee, and the Board really resorted to an extremely broad formulation of the Rule 1.11 matter in this case so that every conceivable connection that Sofaer had as a legal advisor with the Pan Am 103 bombing could be aggregated and characterized as personal and substantial participation.

Well, what were these activities? They were a small, a broad, but numerically small collection of activities. First, there were briefings. These consisted of Sofaer's receipt of what was described as the State Department's daily written briefing report about sensitive or important matters. These briefings are provided--I was told at one point that the even existence of these briefings is supposedly classified, and it's something that comes across your desk and it can cover anything from what happened in Russia that day or Japan or what have you and it covers a very broad--it's not a specific.

Then, in addition, he got oral briefings about matters of interest in the Department and the people from the intelligence bureau will come by and say, "We're briefing people on XYZ situation. Would you like to sit in?" As the legal advisor, you generally do because you basically want to be prepared for issues that may come up.

He also had access to classified communications and cables relating to the progress of the investigation and diplomatic efforts concerning the bombing. I think the stack of cables that I gained access to every day was probably somewhere between one and two inches and I very seldom went through them and I relied on people raising those to my attention. But no question about it, Sofaer would have had access to basically anything that would have been in the cable traffic.

The second activities involved his initialing of a memorandum issued in January of 1990 to the Director General of the Foreign Service which sought approval to turn over unclassified documents and to designate a medium-level State Department official as a witness in the third-party claim brought against the U.S. Government by Pan Am. This was something that was managed by the Justice Department and Sofaer was just one of the departmental general counsels who was called upon to respond for it.

He was informed about the meeting between Secretary Baker and the CEO of Pan Am in which Pan Am described its theory that the U.S. Government had advance notice. Sofaer couldn't remember whether or not he'd been in the meeting or not. Sofaer was told that Pan Am's theory was baseless and Sofaer advised that the designated documents witness should be informed of the contents of this meeting, all pretty meaningless stuff, in my view.

The January 1990 memorandum had been prepared in response to, as I said, to this Justice Department request. In initialing the memorandum, Sofaer did not review or otherwise delve into the contents of the underlying documents or the need to assert a state secret privilege or the substance of the testimony. He basically relied on the recommendation of a very sound assistant legal advisor and signed the memorandum.

Interestingly, the hearing committee found that Sofaer learned about the issues related to the subpoena response but not the issues of the basic litigation.

Then there was an element that everybody kept referring to that I must say I could not understand the significance of, but Sofaer was very, very close to Secretary Schultz and he undertook a diplomatic exchange with a country other than Libya in an attempt to convince that country to stop supporting terrorist activities.

Anyway, so those are Sofaer's activities. That's his personal and substantial participation. Participation in what? Let's now turn to what was this matter.

It's important to go through this, and I realize it's a lot of detail, but it's important, I think, to go through this to see what can happen in a particular case. The formulation of the matter changed during the proceeding, and I think that in and of itself made it extremely difficult for Sofaer to refute the charges brought against him in the hearing.

Second, I think these formulations ended up being very, very broad and I think this is one of the real criticisms I have of the ultimate conclusions.

The Bar Counsel started out with an initial formulation, saying that they issued an informal admonition, and interestingly, in that letter--this was the January 1994 letter--he first raised the possibility of whether Sofaer had violated the Rule 1.9, which was discussed briefly this morning, which is the basic switching sides conflict rule in the D.C. Code of Professional Responsibility. There was no real clear formulation of the matter in this and so forth, but basically, Bar Counsel concluded that he could not prove by clear and convincing evidence that--and under 1.9, the former client can give consent.

Under 1.11, under the D.C. version of 1.11, unlike the ABA version, there is no provision for consent. So Bar Counsel thought that the issuance by OFAC of a license to Sofaer's firm, his communications with the then-incumbent legal advisor and the legal advisor's apparent lack of objection basically precluded his ability to prove that no consent had been given.

So then the Bar Counsel proceeded to charge Sofaer with violating Rule 1.11 because, "for the reasons cited above," which are pretty vague, his representation of the Libyan government was substantially related "to the matters that had come before you while you were legal advisor." No specification of what these were.

After Sofaer rejected that letter and a year and a half later, Bar Counsel came up with a slightly more refined and a specification of matters, or specification of charges in which he defined the matter as the interests of the Government of the United States in connection with: A) Acts of Libyan terrorism directed against the United States citizens; B) the civil case that I referred to earlier; and/or--I'm not sure what that meant--C) the criminal case, which was the case brought against the two Libyan individuals.

This is the formulation on the base of which, basically, Sofaer went to trial. It's the formulation that existed at the time of the hearing.

During the hearing, Bar Counsel conceded that he did not believe that Sofaer was personally and substantially involved in the criminal matter. So then in the following evidentiary hearing, Bar Counsel submitted his proposed findings of fact to the hearing committee and he reformulated his matters so that what had been acts of Libyan terrorism directed against the United States became the topic of Libyan terrorism as a pattern or practice of recurrent acts or violence directed against United States citizens abroad, and the civil case. He dropped the criminal case.

So then the hearing committee issued its report and recommendation and it reformulated the topic of Libyan terrorism to be the United States Government's decision to bomb Tripoli in retaliation for Libyan terrorism, and then they found that there was no substantial relationship between that and Sofaer's representation of the Libyan government.

Then he broadened the civil case matter into at least, and there are various formulations of this within it, but it's, quote, "the establishment of culpability for the 1988 Pan Am 103 bombing, including the government's investigation and the ensuing litigation concerning the bombing."

Now, it seems to me that that broad reformulation sort of revives the criminal case as a part of this matter and it also obviously includes a civil case, despite the fact that the hearing committee found that his signing the January 1990 memorandum was not substantial participation in the civil case.

Basically, the case went to the Board on Professional Responsibility, which essentially adopted the hearing committee's formulation, but it used some different words, as well. It talked about that Sofaer had been representing the interests of the Department of State in the matter of the investigation of and establishing culpability for the bombing of Pan Am 103.

Now, bear in mind that all of this activity, the criminal investigation and so forth, was being done at the Justice Department. In my view, in my case, the legal advisor's office was not consulted, and even if we had inquired, we would have been told to go mind our own business.

So the D.C. Court of Appeals basically adopted the Board's opinion and order and it includes the formulation--they approve the Board's statement that the core or fact at the heart of each piece of legal activity is why and how Pan Am 103 blew up over Lockerbie.

Now, remember two things. One, the definition of matter here that we're talking about is any judicial or other proceeding, application, request for ruling, contract, claim, controversy, investigation, charge, accusation, or other particular matter involving a specific party or parties, and that becomes defined as the why and how Pan Am 103 blew up over Lockerbie. And then remember the things that Sofaer had done to personally and substantially participate in this matter--passive receipt of briefings, initialing the January 1990 memorandum, and this diplomatic exchange.

The things that sort of disturbed me that neither the Board nor the court paid any attention to was Bar Counsel's concession that he didn't think that Sofaer was involved in the criminal matter, and they also ignored my testimony and that of the Assistant Legal Advisor Jim Hergen [ph.] that the initialing of the January 1990 memorandum was a very insignificant, routine matter.

The hearing committee found, I'm not sure on what basis, that the signing, "was not an insignificant or ministerial act." As I mentioned earlier, the hearing committee did find that the signing of the memorandum didn't tell Sofaer much about the underlying case.

One of the big problems with this late formulation is that Sofaer was not given the opportunity to bring out at the hearing what all these briefings covered, and I think he probably would have had some pretty significant differences, problems with getting the State Department to let him talk about that.

So I basically disagree. There are three aspects of this decision that I disagree with. One is the definition of matter. The second is the definition of personal and substantial participation. Quite frankly, I think the substantially related issue is such a bog that once one walks through that door, I think it's impossible to reach a satisfactory conclusion. We in our amicus briefs argued matter, persons of substantial participation, and, by the way, the process for determining substantially related is unfair, et cetera.

Sofaer's counsel, which he changed between the Board appeal and the Court of Appeals, but both of those really focused on substantially related as well as the limited nature of his--and I think there was just a very hard thing to convince the court of.

Let me just see if I can sort of quickly summarize the--as I indicated, this is a very specific definition of matter. It is narrower than the definition of particular matter that's found in the ongoing conflict side statute that you'll hear about this afternoon, which does not include the reference to specific party or parties.

To understand what even a Section 208 particular matter is, during the Gulf War, then-Assistant Attorney General Michael Ledig [ph.], who is now a circuit jud ge down on the Fourth Circuit, Federal Court of Appeals, issued an opinion in which he discussed this whole question of what is a particular matter, and it was in the context of the Gulf War. He explained how the response by the U.S. Government to a threat to national security, such as the invasion of Kuwait, and I would say such as to Libyan terrorism, would not even constitute a particular matter under Section 208, which doesn't have the modifying involving a specific party or parties.

He said the formulation and implementation of a comprehensive American response requires consideration of and decisions with respect to the full panoply of U.S. political, military, diplomatic, and economic interests. These far-reaching issues bear no resemblance whatever to the consideration of actions focused on the interests of specific individuals or entities or discrete and identifiable class of individual entities which is characteristic of the particular matters covered by Section 208.

He did go on to say that a matter, such as the Gulf War, could involve within it particular matters, so that if you were talking about closing a particular company's pumping station or pipeline by force or what have you, that might be one of these particular matters, at least in the context of 208.

So I think that opinion was codified in the regulations under Section 208 in an example that says that general deliberations, decisions, and actions concerning response are based on a consideration of political, military, diplomatic, and economic interests of every sector of society and are too diffuse to be focused on the interests of specific individuals or entities. So again, I think on that line of reasoning, not only would the response to Libyan terrorism in response to the Pan Am 103 bombing not be a particular matter under 208, it would not be a particular matter, it certainly wouldn't be under 207, and, therefore, it should not be under Rule 1.11

What one ended up with after that is that there clearly was something out there that the Board and the court thought was a particular matter. Now, I agree that within this matter, i.e., Libyan terrorism, Pan Am 103 investigation, what have you, within that, you clearly have particular matters as defined in the Rule 1.11 or 207, the civil case and the criminal case. But as I said, the Bar Counsel had basically conceded that Sofaer was not personally and substantially involved in the criminal case and the hearing committee seemed to take the position that he wasn't personally or substantially involved in the civil case, so I'm not sure what that left and I think that's a very vague area out there.

The questions, and it was interesting that at no point in these proceedings, neither at the hearing committee level, the board level, nor the Court of Appeals, was there a member of the panel who had held a government position at the same level as Sofaer's, and I think that the hearers did not understand sort of what goes on and why one would receive information, receive briefings, and so forth.

I think that he received briefings on the status of Pan Am 103--they were included in things that he would have been informed about--as part of an overall response to terrorism. For example, he would have had to, you know, come up with sanctions against Libya and so it was important, I think, that he was kept abreast of what was going on in that area. I think if that's what he was doing, then I don't think that when he went into the private sector he would not be barred from advising an oil company on compliance with the sanctions that he assisted in drafting.

I do think under Rule 1.9, the true switching sides rule, that he would be barred from representing one of the target countries of those sanctions unless the U.S. Government consented to that.

The other thing that I thought was right interesting, the substantially related question is formulated in the case that was referred to earlier in a 1984 D.C. Court of Appeals Case called Brown v. Board of Zoning Appeals, which lays out the mechanism for getting to the definition, you know, how you determine whether matters are substantially related. In that case, though, the court defined the matter in which the--there were some lawyers who worked for the Zoning Appeals Board and had left them and gone to work for the Carr Real Estate Group, despite the fact that the court in this Brown case refused, over the vigorous dissent and the urging of the D.C. Bar's Legal Ethics Committee, to treat three different zoning proceedings related to the same building, the same property, and the single owner as a single Rule 1.11 matter, which is quite different from this wide, broad-ranging definition that was applied in the Sofaer case.

As I said, the second thing that I have a big problem with in this case is the personal and substantial participation. Substantial is actually defined in the D.C. Bar rules. It says that substantial, when used in reference to degree or extent, denotes a material matter of clear and weighty importance. In other words, to participate substantially means you've got to really play the role. You've got to have been involved in an important material way, and this is consistent with the old regulations under Section 207.

I was actually kind of astounded to find the following statement in the Court of Appeals decision. "The fact that Sofaer played no role in the criminal investigation itself and was not shown to have recommended or taken action based on the briefings is not critical," and I just don't know what personal and substantial participation could consist of if that is the standard.

The other thing that I think was really quite--I really disagree strongly with the approach of the court and the Board was that pursuant to their--the broad, passive briefings somehow breathe significance into otherwise insignificant actions. This is the way the court articulates its alchemy. "Moreover, Sofaer's actions take on added significance when viewed in the context of his participation as one of a small number of senior Department officials in confidential oral and written briefings, which periodically included information about the progress of criminal investigation and related diplomatic actions."

I mean, somehow, the mere receipt of these briefings without doing any more constitutes personal and substantial participation in a matter referred to in those briefings, notwithstanding the lack of any other significant involvement in the matter. I think that means that everything included in daily intelligence reports, cable traffic, and so forth has the potential of being identified as a Rule 1.11 matter and the receipt of such items may constitute substantial participation.

As I say, it was a shame that the process did not permit the submission of evidence on the contents of those briefings. And again, bear in mind that the contents of those briefings did not focus on Libya at the time. They focused on Syria and the Palestinian organizations.

I think that, again, as I say, I think the reason that you sit in these briefings is so that you're in a position to do the foreign policy equivalent of rulemaking. I also think that participated includes action, just threw out the regulations under Section 208 and Section 207. It talks in terms of action and action and action is required for participation.

Basically, treating the passive receipt of information as participation is particularly troubling to anyone who has had to drink from the fire hose of this easily forgotten information that on a daily basis crosses one's desk. In the absence of specifically identified briefings or communications on specific matters bearing clearly and materially on facts that are relevant to a subsequent private practice engagement, characterizing these passive generic briefings as substantial participation exposes the reviewer to an unfathomable and undetectable array of potential violations of Rule 1.11.

It's kind of interesting to note that the Federal criminal counterpart does not, and I don't think Rule 1.11 was intended to cover everything that comes across one's desk. You do have the two-year ban in Section 207 that Amy Comstock referred to this morning that requires a two-year ban on representation involving a matter that basically came under your auspices during your last year, and that is a much more easily, much more workable rule.

I'm not going to spend any time on it. For those of you who are interested, I did include in the materials two cases decided by the Court of Veterans' Appeals, Kelly v. Brown and Violet v. Brown, which discuss the difference in the level of participation that's required for a Rule 1.11 problem as opposed to a Rule 1.9 problem.

Now, I really was not going to get into the substantially related issue simply because I think it is such a minefield that is really fact intensive and so forth. The problem, and I think this points out one of the--the court very much relied on the Brown case, which basically said that all Bar Counsel has to do is to prove a prima facie case that the defendant/respondent had access to information that would be helpful in the private representation. Well, I think that is easy. It's that he could have access is key, and I think anybody at the level that the legal advisor, for example, has access to everything, basically.

Then once the Bar Counsel establishes that, the burden shifts to the respondent to prove that he or she did not have such information. Now, this is fine in a disqualification case. As a prophylactic measure, that's fine. But in a disciplinary proceeding, it really is--I don't think it complies with the requirement that the Bar Counsel prove the violation of the rules by clear and convincing evidence.

Steve Csontos thi