[House Report 105-792] [From the U.S. Government Publishing Office] Calendar No. 271 105th Congress Report HOUSE OF REPRESENTATIVES 2d Session 105-792 _______________________________________________________________________ CONTEMPT OF CONGRESS AGAINST FRANKLIN L. HANEY __________ R E P O R T of the COMMITTEE ON COMMERCE together with ADDITIONAL AND MINORITY VIEWS on the CONGRESSIONAL PROCEEDINGS AGAINST MR. FRANKLIN L. HANEY FOR WITHHOLDING SUBPOENAED DOCUMENTS
October 7, 1998.--Committed to the Committee of the Whole House on the State of the Union and ordered to be printed COMMITTEE ON COMMERCE TOM BLILEY, Virginia, Chairman W.J. ``BILLY'' TAUZIN, Louisiana JOHN D. DINGELL, Michigan MICHAEL G. OXLEY, Ohio HENRY A. WAXMAN, California MICHAEL BILIRAKIS, Florida EDWARD J. MARKEY, Massachusetts DAN SCHAEFER, Colorado RALPH M. HALL, Texas JOE BARTON, Texas RICK BOUCHER, Virginia J. DENNIS HASTERT, Illinois THOMAS J. MANTON, New York FRED UPTON, Michigan EDOLPHUS TOWNS, New York CLIFF STEARNS, Florida FRANK PALLONE, Jr., New Jersey BILL PAXON, New York SHERROD BROWN, Ohio PAUL E. GILLMOR, Ohio BART GORDON, Tennessee Vice Chairman ELIZABETH FURSE, Oregon JAMES C. GREENWOOD, Pennsylvania PETER DEUTSCH, Florida MICHAEL D. CRAPO, Idaho BOBBY L. RUSH, Illinois CHRISTOPHER COX, California ANNA G. ESHOO, California NATHAN DEAL, Georgia RON KLINK, Pennsylvania STEVE LARGENT, Oklahoma BART STUPAK, Michigan RICHARD BURR, North Carolina ELIOT L. ENGEL, New York BRIAN P. BILBRAY, California THOMAS C. SAWYER, Ohio ED WHITFIELD, Kentucky ALBERT R. WYNN, Maryland GREG GANSKE, Iowa GENE GREEN, Texas CHARLIE NORWOOD, Georgia KAREN McCARTHY, Missouri RICK WHITE, Washington TED STRICKLAND, Ohio TOM COBURN, Oklahoma DIANA DeGETTE, Colorado RICK LAZIO, New York BARBARA CUBIN, Wyoming JAMES E. ROGAN, California JOHN SHIMKUS, Illinois HEATHER WILSON, New Mexico James E. Derderian, Chief of Staff James D. Barnette, General Counsel Reid P.F. Stuntz, Minority Staff Director and Chief Counsel ------ Subcommittee on Oversight and Investigations JOE BARTON, Texas, Chairman CHRISTOPHER COX, California RON KLINK, Pennsylvania Vice Chairman HENRY A. WAXMAN, California JAMES C. GREENWOOD, Pennsylvania RALPH M. HALL, Texas MICHAEL D. CRAPO, Idaho BART STUPAK, Michigan RICHARD BURR, North Carolina ELIOT L. ENGEL, New York BRIAN P. BILBRAY, California GENE GREEN, Texas GREG GANSKE, Iowa JOHN D. DINGELL, Michigan TOM COBURN, Oklahoma (Ex Officio) TOM BLILEY, Virginia (Ex Officio) LETTER OF TRANSMITTAL Dear Mr. Speaker: At several points during a Committee investigation into the circumstances surrounding the planned relocation of the Federal Communications Commission to the Portals office complex, the Committee sought certain records from Mr. Franklin L. Haney, whose company is a general partner in the Portals partnership. Despite more than five months of repeated attempts to obtain Mr. Haney's cooperation, Mr. Haney refused to provide the records voluntarily, forcing the Subcommittee on Oversight and Investigations to authorize the issuance of subpoenas duces tecum to Mr. Haney and three related companies under his control. Mr. Haney did not dispute that he had possession or control over all of the subpoenaed documents, but he nonetheless failed to produce any responsive documents on the subpoena return date--even after his meritless objections concerning pertinency, attorney-client privilege, and confidentiality as to some of the documents were heard and overruled by the Subcommittee, in the presence of Mr. Haney's attorney, at an open Subcommittee meeting on June 17, 1998. Given his willful refusal to comply with the subpoenas and the Subcommittee's rulings on his objections, the Subcommittee proceeded to find Mr. Haney in contempt and reported the matter to the Full Committee for appropriate action. On June 24, 1998, the Full Committee met in open session to consider the Subcommittee contempt report, and voted to adopt and submit the enclosed report to the House of Representatives with a recommendation that the full House cite Mr. Haney for contempt and refer the matter to the designated U.S. Attorney for prosecution under the Federal criminal contempt statute. Three weeks after the Full Committee action, Mr. Haney reversed his position and agreed to produce all documents responsive to the subpoenas. Mr. Haney's subsequent production of records to the Committee appears to meet his obligation of full compliance. Accordingly, I have no present intention of bringing this privileged report and accompanying resolution before the House. I nonetheless believe it is important that this Committee report, including the additional and minority views, be filed with the House, so that it may serve as useful precedent in future disputes with private or governmental parties concerning the prerogative of the Committees of the House to require the production of information pertinent to a lawful congressional investigation. Sincerely, Tom Bliley, Chairman, Committee on Commerce, U.S. House of Representatives. C O N T E N T S ---------- Page Transmittal Letter............................................... III Introduction..................................................... 1 Facts, Background, and Chronology................................ 2 Authority and Legislative Purpose................................ 6 The Subpoenaed Documents......................................... 7 Objections to the Subpoenas by Mr. Haney......................... 8 A. Claims Regarding Pertinency of Document Requests.......... 8 B. Claims of Attorney-Client Privilege....................... 11 C. Claim of Client Confidentiality under Bar Association Rules...................................................... 15 House Rules Requirements......................................... 16 A. Committee Consideration................................... 16 B. Roll Call Votes........................................... 17 C. Other House Rules Requirements............................ 21 Conclusion....................................................... 21 Appendix A: All Correspondence Between the Committee and Franklin L. Haney....................................................... 23 Appendix B: Subpoenas Served Upon Franklin L. Haney.............. 74 Appendix C: June 16, 1998, Memorandum from the Congressional Research Service, Library of Congress, entitled ``Assessment of Committee Subpoenas for Documents''............................ 85 Appendix D: June 16, 1998, Memorandum from the Office of the General........................................................ 107 Counsel, U.S. House of Representatives, entitled ``D.C. Rule of Professional Conduct 1.6 and the Congressional Subpoena Power'' 107 Additional and Minority Views.................................... 117 Calendar No. 271 105th Congress Report HOUSE OF REPRESENTATIVES 2d Session 105-792 _______________________________________________________________________ CONTEMPT OF CONGRESS AGAINST FRANKLIN L. HANEY _______ October 7, 1998.--Committed to the Committee of the Whole House on the State of the Union and ordered to be printed _______________________________________________________________________ Mr. Bliley, from the Committee on Commerce, submitted the following R E P O R T together with ADDITIONAL AND MINORITY VIEWS Introduction After five months of attempting to gain documents and other information voluntarily, the Subcommittee on Oversight and Investigations of the Committee on Commerce voted on April 30, 1998, to authorize the issuance of subpoenas in furtherance of the Committee's investigation into the circumstances surrounding the planned relocation of the Federal Communications Commission (FCC) to the Portals--a relocation that has become embroiled in controversy over the possible use of improper or illegal influence by certain key figures in the $400 million deal. Pursuant to that authorization, Commerce Committee Chairman Tom Bliley signed and had served, on June 4, 1998, four subpoenas demanding that Franklin L. Haney--whose company Tower Associates II, Inc., is a general partner in the partnership that owns the Portals buildings--and three companies under his control produce specified documents before the Subcommittee at its business meeting on June 17, 1998. In the cover letter accompanying these subpoenas, Chairman Bliley stated that Mr. Haney would be given an opportunity to raise any legal objections he may have to the subpoenas and have them ruled upon at that time by the Subcommittee, but that he should be prepared to comply on June 17, under threat of contempt, with the rulings on those objections. Chairman Bliley also stated that Mr. Haney should provide his formal legal objections to the subpoenas, in writing, by noon on June 9, 1998, including a document-specific log of any material being withheld on grounds of attorney-client privilege. Mr. Haney failed to meet that deadline. Approximately one hour before the scheduled business meeting on June 17, the Committee received a letter from Mr. Haney's attorney setting forth his client's legal objections to each category of subpoenaed documents, but failing to include any privilege log. The objections focused on issues of pertinency, attorney-client privilege, and attorney- client confidentiality, which were similar to the general objections the Committee had received in response to its numerous voluntary attempts to secure documents from Mr. Haney since December of last year. After debate and due consideration of these objections, and based on legal counsel provided by the Congressional Research Service, the House General Counsel's Office, and Committee counsel, the Subcommittee overruled all of Mr. Haney's objections. When Mr. Haney's attorney stated that his client would not comply at that time with the Subcommittee's ruling, the Subcommittee proceeded to hold Mr. Haney in contempt of Congress, and directed the Subcommittee chairman to report and refer the matter to the full Committee. Mr. Haney's refusal to produce the subpoenaed documents is without legitimate basis and is a direct affront to the lawful investigative functions of Congress. The House of Representatives must not permit such defiance to go unchallenged or unpunished. To do so not only would undermine this particular investigation into the Portals, but also would set a damaging precedent for other ongoing or future oversight by House committees by sending a signal to would-be obstructionists that the House will not act to enforce its constitutional rights to obtain all information pertinent to its lawful investigations. Upon adoption by the Commerce Committee and the House, this report and resolution would direct the Speaker to certify and refer the matter to the U.S. Attorney for the District of Columbia for prosecution in accordance with the statutory provision for contempt of Congress, 2 U.S.C. Sec. 192. That offense carries a sentence of no less than one month and no more than one year in prison, plus fines up to $100,000. Facts, Background, and Chronology The Committee's Inquiry into the FCC's Planned Move to the Portals In October 1997, Business Week reported, in a detailed investigative account, about certain troubling circumstances surrounding the planned relocation of the FCC to the Portals-- entitled ``Did Gore Open A Door? A friend of Al, a sweet real estate deal from the feds, and a $230,000 campaign contribution.'' In particular, the article suggested that, at the request of Mr. Haney and his partners, there were significant and uncommon changes made in 1996 to the Portals lease with the General Services Administration (GSA). The article also suggested that the FCC dropped its longstanding and vigorous opposition to the move after Mr. Haney became involved in the project in the Fall of 1995. The article quoted a lawyer involved in the negotiations as stating: ``It was remarkable. They [the FCC] were adamantly opposed, and then suddenly, boom, in early 1996, they were for it.'' The article described Mr. Haney as a Tennessee real estate developer and a ``longtime friend of Vice-President Al Gore and his family,'' who--one month after closing the deal with GSA and joining the Portals partnership--``contributed $230,000 to the Democratic National Committee and five state Democratic parties.'' Several weeks after the publication of this article, and while pursuing an unrelated oversight matter involving the Department of Energy, Committee staff was told by Mr. Bernie Wunder, former managing partner of the lobbying firm Wunder, Knight, Levine, Thelen & Forscey (the Firm), that one of its top partners--lawyer/lobbyist Peter Knight, who served as campaign manager for the 1996 Clinton-Gore Re-Election Committee--billed and received in early 1996 a $1 million ``performance'' payment from an unnamed client for certain work performed in 1995. Subsequently, in a Time magazine article, Mr. Haney acknowledged that he had paid Mr. Knight a fee of $1 million for, according to the magazine, ``general legal work on the [Portals] project.'' However, Mr. Haney and Mr. Knight now both claim that the $1 million fee was for roughly a dozen different projects, including the Portals, over a three-year time period commencing in June of 1995 and ending this year. After the Time magazine article appeared, Committee staff attempted to contact Mr. Haney on several occasions to confirm whether he was the source of the $1 million payment and, if so, for what services the payment was made, but Mr. Haney did not respond to these repeated inquiries. Because of Mr. Haney's failure to respond to the Committee's informal overtures, on November 7, 1997, Commerce Committee Chairman Tom Bliley and Subcommittee Chairman Joe Barton sent the first of several letters to Mr. Haney requesting information about these allegations. In particular, the chairmen referred to and repeatedly quoted from the Business Week and Time articles, and then stated: ``If you paid Mr. Knight $1 million in one lump sum as a performance fee [on the Portals], we would have serious questions about the services for which you were paying Mr. Knight on this federal contract, which involves an agency within the Committee's oversight responsibilities.'' In a subsequent letter explaining further the Committee's interest in this matter, the chairmen told Mr. Haney's attorney that ``[t]his Committee has both the right and the duty to inquire as to whether this planned relocation is being conducted to further the efficient and effective execution of the FCC's statutory responsibilities, or whether the relocation has been influenced by other, less legitimate considerations.'' (Copies of all correspondence between the Committee and Franklin L. Haney are appended to the end of this report.) While Mr. Haney produced a limited number of documents in response to the initial request for information,1 he subsequently has refused to provide any further information, whether in the form of documents, responses to written questions, a staff interview, or even a log of those documents being withheld from the Committee and the grounds therefor. These refusals have been blanket ones, without any serious attempts by Mr. Haney at even partial compliance or compromise, and without any recognition of the rights of Congress to such information. Mr. Haney also refused to consent to Mr. Knight and other individuals employed by the Firm providing certain documents or being interviewed by Committee staff, even on non- privileged matters, by invoking broad client confidentiality restrictions.2 --------------------------------------------------------------------------- \1\ Specifically, Mr. Haney produced a copy of the $1 million check, the invoices received from the Firm, the engagement letter between Mr. Haney and the Firm, and several documents reflecting his personal communications with the FCC on the Portals matter. \2\ The Firm's documents ultimately were obtained on June 17 and June 18, 1998, following the service of a subpoena on the Firm's managing partner and the Subcommittee's overruling of the objections raised by the Firm on Mr. Haney's behalf. The fact that the Firm agreed at the Subcommittee's June 17 meeting to produce the subpoenaed documents in its possession does not, however, relieve Mr. Haney of his independent duty to produce all responsive documents in his own possession, especially given the lack of any evidence that Mr. Haney's document production would be or is co-extensive with the Firm's production. --------------------------------------------------------------------------- Because of the Subcommittee's inability to gather information voluntarily from key individuals with knowledge of the events in question, the Subcommittee voted on April 30, 1998, to authorize subpoenas for documents and testimony on this matter. Pursuant to that vote, four subpoenas were served upon Mr. Haney on June 4, 1998, requiring the production on June 17 of certain categories of documents within his possession or custody or that of the three companies under his control.3 Most of the documents covered by the subpoenas had been requested previously by the Committee, and on more than one occasion over the prior six months, without success. Furthermore, as noted earlier, Mr. Haney ignored Chairman Bliley's request for written legal objections and a privilege log by June 9, waiting until the morning of the Subcommittee meeting to produce a cursory two-page list of objections without any supporting legal memorandum, analysis, or privilege log. --------------------------------------------------------------------------- \3\ Mr. Haney previously had refused to comply with similar document subpoenas served upon him on May 13, 1998, contending that ``[b]oth the House rules and the caselaw interpreting the contempt statute require the return of the subpoena be made to a duly convened committee [as opposed to the Committee offices], which may consider the objections of the witness and rule thereon, thereby providing the due process to which he is entitled in determining whether his compliance is lawfully required.'' After consulting with the House Parliamentarian and the House General Counsel, and reviewing past practices of this and other committees of the House, the Committee determined that this procedural objection was without merit. There is no requirement, in the House rules or elsewhere, that subpoenas be returnable to a ``duly convened committee.'' Nonetheless, to expedite production of the documents and to satisfy Mr. Haney's demand for ``due process,'' on June 4, 1998, Chairman Bliley signed and had served new subpoenas returnable to a Subcommittee meeting at 10:30 a.m. on June 17, 1998. By cover letter of June 4, Chairman Bliley informed Mr. Haney that the Subcommittee would convene at that time to consider his legal objections and rule thereon, precisely as requested by Mr. Haney's counsel. Chairman Bliley also stated, as noted above, that Mr. Haney should provide his formal legal objections to the subpoenas, in writing, by noon on June 9, 1998, including a document-specific log of any material being withheld on grounds of attorney-client privilege. Mr. Haney failed to meet this deadline. Instead, on June 16, 1998, the day before the Subcommittee was to meet, Mr. Haney's counsel sent another letter to Chairman Bliley in which he suggested, for the first time, that the Subcommittee needed to convene a hearing, rather than a meeting, so that the ``rules and procedures governing committee hearings will apply.'' He did not specify which rules and procedures he was referring to, nor did he provide any explanation as to how such rules and procedures would benefit his client. Finally, he demanded that the Chairman ``provide us with the details of the procedure to be followed on June 17, 1998. Once we have the details of such procedure, we will then be able to interpose Mr. Haney's objections to the Subcommittee's subpoenas in a way that provides for their mature consideration by Subcommittee members before a quorum meets to address any issues thus raised.'' However, after consulting again with the House Parliamentarian and the House General Counsel, the Committee determined that there was nothing procedurally defective with respect to the June 4, 1998 subpoenas or the June 17, 1998 business meeting format. Indeed, Mr. Haney's interpretation would imply that all congressional information- gathering must take place in a formal hearing setting--an interpretation that would be completely inconsistent with long-standing congressional practice and would, as a practical matter, be highly disruptive to the effective performance of Congress' constitutional legislative and oversight responsibilities. The Committee also notes that, to the extent that Mr. Haney's process concern focused on the existence of a quorum of the Subcommittee, Mr. Haney's counsel was specifically advised the day before the meeting that a quorum of the Subcommittee was necessary to conduct any business and would be present to consider Mr. Haney's objections to the subpoenas--and that, in fact, the Committee's rules require a larger quorum of members for meetings than they do for hearings. Mr. Haney's counsel did not, at that time or any time thereafter, raise any further, specific procedural questions or concerns. Furthermore, Mr. Haney's attempt to dictate the format, process and sequence of a congressional investigation is utterly without foundation. Mr. Haney had no right to demand a meeting, much less a hearing, of the Subcommittee. Nonetheless, having been given an unprecedented opportunity to appear personally before the Subcommittee, as requested by his counsel's letter of May 20, Mr. Haney chose to ignore the deadline set by the Chairman and raise a new procedural objection at the last minute. As the Supreme Court has remarked with respect to similar gamesmanship, ``[s]uch a patent evasion of the duty of one summoned to produce papers before a congressional committee cannot be condoned.'' United States v. Bryan, 339 U.S. 323, 333 (1950). --------------------------------------------------------------------------- At the Subcommittee meeting on the subpoena return date, Chairman Barton explained in detail the scope of the Committee's investigation in his preliminary statement: As the Members are aware, since last November, the Committee has been conducting an investigation into the planned relocation of the Federal Communications Commission to the Portals, including the circumstances surrounding the lease arrangements for the FCC headquarters and the FCC's decision-making with regard to the move, the efforts of Franklin L. Haney and his representatives to influence those lease arrangements or the FCC's decision-making, and the circumstances surrounding a $1 million payment from Franklin L. Haney--a general partner in the Portals--to Peter Knight for services related in part or whole to the Portals. Following Chairman Barton's remarks, Mr. Haney's attorney was given the opportunity to explain his client's legal objections, and was questioned about them by Subcommittee members for more than one hour. During that questioning, Mr. Haney's attorney admitted that his client was withholding non- privileged documents relating to the Portals project and the services performed by Mr. Knight for the $1 million fee,4 and unequivocally stated that his client would not provide a privilege log for any of the allegedly privileged documents being withheld from the Subcommittee. After the members exhausted their questioning of Mr. Haney's counsel, Mr. Burr moved to overrule all of Mr. Haney's objections and order full compliance with the subpoenas. That motion was fully debated and approved by the Subcommittee on a 9-6 vote. --------------------------------------------------------------------------- \4\ Mr. Haney's counsel stated that, because of his procedural questions about the June 17 meeting, he did not believe that his client was under any compulsion to comply with the subpoenas on the return date, even for admittedly pertinent and non-privileged documents. While Mr. Haney's counsel did agree to produce, at some unspecified future time, non-privileged documents relating to the Portals project, this commitment did not and should not affect the determination of contempt, especially in light of Mr. Haney's defiant refusal to provide all other responsive records and his failure to date to provide the Committee with any of these non-privileged documents. As the Supreme Court has made clear, the act of contempt occurs when there is a willful refusal to produce the subpoenaed documents on the subpoena return date. See United States v. Bryan, 339 U.S. 323, 330 (1950) (``[W]hen the Government introduced evidence in this case that respondent had been validly served with a lawful subpoena directing her to produce records within her custody and control, and that on the day set out in the subpoena she intentionally failed to comply, it made out a prima facie case of wilful default.''); see also Quinn v. United States, 349 U.S. 155, 165-66 (1955). There is no question that Mr. Haney's actions have laid the predicate for a referral and prosecution for criminal contempt under 2 U.S.C. Sec. 192. Quinn, 349 U.S. at 166. --------------------------------------------------------------------------- Following the overruling of his objections, Chairman Barton ordered Mr. Haney to comply with the Subcommittee's ruling, but Mr. Haney, through his counsel, refused to commit to a course of compliance--even though he was specifically advised that such refusal could lead to his being held in contempt of Congress by the Subcommittee at that time (consistent with Chairman Bliley's June 4 letter to Mr. Haney).5 Mr. Haney's counsel then was dismissed from the witness table, and the Subcommittee proceeded to consideration of a resolution to hold Mr. Haney in contempt. After full debate by the members, the resolution was approved on a 9-7 vote. --------------------------------------------------------------------------- \5\ Chairman Bliley's June 4 letter to Mr. Haney contained the following explicit warning: Finally, please be advised that, should the Subcommittee overrule your objections to the subpoenas at its meeting, you will be ordered to comply with them immediately. If you do not do so, the Subcommittee--with my full backing--will proceed immediately, at that same meeting, to consideration of a resolution to hold you in contempt and to refer the matter to the full Committee with a recommendation for similar action. Once such a contempt finding is made by the Subcommittee, it cannot be cured by subsequent compliance. Thus, to avoid being held in contempt of Congress and ultimately prosecuted therefor, you must bring all the subpoenaed documents to the Subcommittee on June 17, and be prepared to comply at that time with any adverse ruling on your objections. Authority and Legislative Purpose Mr. Haney did not contest the authority and valid legislative purpose of the investigation either at the Subcommittee meeting or in his written objections filed on June 17--in fact, his counsel conceded during questioning that this Committee had the right to inquire into the stated subject matter of the investigation. Nonetheless, in earlier correspondence relating to the Committee's voluntary requests for information, Mr. Haney's attorney did raise questions about the jurisdiction of this Committee to investigate the circumstances surrounding the Commission's planned relocation to the Portals. Accordingly, a brief discussion of the Committee's authority to investigate this matter is in order, even though jurisdictional objections were not raised in response to the subpoenas themselves. As the Subcommittee chairman stated during his preliminary statement at the June 17 business meeting, and in the presence of Mr. Haney's counsel: ``Our jurisdiction to investigate [these] matters is clear, since it is concurrent with the jurisdiction of the full Committee, which is the authorizing committee for the FCC and is charged with oversight of the agency's `organization and operations' '' (quoting Rule X, Clause 2(b)(1) of the U.S. House of Representatives). While this Committee does not have primary jurisdiction over GSA, it certainly does have the right to inquire into GSA actions that affect the ``organization and operations'' of the Commission. Indeed, this Committee has in the past held hearings on GSA actions involving the Commission and other agencies within the Committee's jurisdiction. 6 Accordingly, the jurisdiction of the Committee to investigate this matter is not subject to credible challenge. --------------------------------------------------------------------------- \6\ The Committee's views on the jurisdictional question also were explained fully to Mr. Haney's counsel in a November 21, 1997 letter from Chairman Bliley. --------------------------------------------------------------------------- With respect to a valid legislative purpose, the Subcommittee chairman addressed that issue at the June 17 meeting as well, stating: [W]e are not here to make allegations of wrongdoing against any party. Rather, we are here to reaffirm the Subcommittee's right to obtain all information relevant to our inquiry, so that we can answer these outstanding questions, make informed judgments about whether misconduct has occurred, and if so, what legislative actions may be necessary to correct it or prevent its reoccurrence. For example, we may need to make or recommend statutory changes in the [FCC]'s administrative structure or the powers and duties of the Chairman and the Managing Director, or [take] more specific Portals-related actions. Given Chairman Barton's remarks and the lack of any objection on this ground by Mr. Haney, there is no basis upon which to challenge the Committee's legislative purpose in conducting this oversight project. The Subpoenaed Documents The subpoenas to Mr. Haney and his three companies--Tower Associates II, Inc., the Franklin L. Haney Company, and Building Finance Company of Tennessee--seek identical categories of documents, as follows: (1) All records that relate to Franklin L. Haney's or the Franklin L. Haney Companies' retention or hiring of, or the decision to retain or hire, Peter Knight, WKLTF, or James Sasser for counsel or services regarding the Portals or the relocation of the FCC. (2) All records that relate to any payments or fees made to James Sasser for services, efforts, lobbying, or other work undertaken or provided regarding the Portals or the relocation of the FCC, from January 1, 1994, through the present, including but not limited to all bills or invoices submitted by any of the foregoing. (3) All records that relate to the services, efforts, lobbying, or other work undertaken or provided, or to be undertaken or provided, by Peter Knight, WKLTF, or James Sasser regarding the Portals or the relocation of the FCC. (4) All records that relate to the services, efforts, lobbying, or other work undertaken or provided, or to be undertaken or provided, by Peter Knight, WKLTF, or any other person or entity for the $1 million fee billed to the Franklin L. Haney Company in January 1996. (5) All records that relate to the $1 million fee billed by Peter Knight and/or WKLTF to the Franklin L. Haney Company in January 1996, not produced in response to the above request. (6) All records that relate to any fee arrangement with Peter Knight, WKLTF, or James Sasser for work undertaken or provided, or to be undertaken or provided, by any of the foregoing regarding the Portals or the relocation of the FCC, including but not limited to all records that relate to the nature, negotiation, agreement, billing, payment, structure, purpose, or allocation of such fee arrangement. (7) All records that relate to any contact, communication, understanding, or agreement (whether written, electronic, or oral) between any two or more of the following individuals or entities regarding the Portals or the relocation of the FCC: (i) Peter Knight; (ii) WKLTF; (iii) James Sasser; (iv) former FCC Chairman Reed Hundt, or any other official or employee at the FCC; (v) the Office of the Commissioner, Public Building Service, General Services Administration (GSA), or any official or employee thereof; (vi) the Office of the GSA Administrator, or any official or employee thereof; (vii) the Office of the GSA Regional Administrator for the National Capital Region, or any official or employee thereof; (viii) the Office of General Counsel, GSA, or any official or employee thereof; (ix) Robert Peck; (x) the Executive Office of the President (including but not limited to the Office of the Vice President), or any official or employee thereof; (xi) Franklin L. Haney; (xii) John Wagster; (xiii) T.J. Mancuso; or (xiv) any one or more of the Franklin L. Haney Companies. (8) All warranties and certifications that relate to the Portals and that are executed, signed, or co-signed under the provisions of 41 U.S.C. Sec. 254(a) (or any other similar statute or regulation governing contingent fee representations) by Franklin L. Haney, any one or more of the Franklin L. Haney Companies, Parcel 49C Limited Partnership, or any other company or partnership in which Franklin L. Haney or any one or more of the Franklin L. Haney Companies have a financial interest, and all records that relate to any such warranty or certification. (9) All records that relate to the negotiation of the supplemental lease agreements signed by Parcel 49C Limited Partnership and GSA in January and March of 1996. (A copy of each subpoena is appended to the end of this report.) As is evident from those descriptions, all of the requests relate directly to the involvement of Mr. Haney or his representatives in the Portals matter, or to the $1 million fee from Mr. Haney to Mr. Knight. Objections to the Subpoenas by Mr. Haney A. claims regarding pertinency of document requests Mr. Haney has made several pertinency objections to the subpoenas, which will be addressed in turn below, following a brief discussion of the scope and nature of the pertinency requirement with respect to congressional investigations. The federal contempt statute, 2 U.S.C. Sec. 192, provides that a committee's questions or subpoena requests must be ``pertinent to the subject under inquiry.'' In determining matters of pertinency, the courts have required only that the specific inquiries or document requests be reasonably related to the subject matter under investigation. Sinclair v. United States, 279 U.S. 263, 279 (1929); Ashland Oil, Inc. v. FTC, 409 F.Supp. 297, 305 (D.D.C. 1976). As the American Law Division of the Congressional Research Service stated in its recent memorandum to the Committee on the validity of the Haney subpoenas: Because of the breadth of congressional investigations, the courts have long recognized that pertinency in the legislative context is broader than that of relevance under the law of evidence. ``A judicial inquiry relates to a case, and the evidence to be admissible must be measured by the narrow limits of the pleadings. A legislative inquiry anticipates all possible cases which may arise thereunder and the evidence must be responsive to the scope of the inquiry which generally is very broad.'' Townsend v. United States, 95 F.2d 252, 261 (D.C.Cir.), cert. denied, 303 U.S. 664 (1938) (emphasis in original). Memorandum from Morton Rosenberg, Specialist in American Public Law, the American Law Division, Congressional Research Service, to the Honorable Tom Bliley, Chairman of the House Committee on Commerce, and the Honorable Joe Barton, Chairman of the Subcommittee on Oversight and Investigations, dated June 16, 1998, at 10 [hereinafter referred to as ``the CRS Memorandum'']. (A copy of this memorandum is appended to the end of this report.) As the above makes clear, pertinency is not a rigid concept, but rather is one that is flexible enough to permit an investigation to pursue all related leads. See Eastland v. United States Servicemen's Fund, 421 U.S. 491, 509 (1975); see also Senate Select Committee on Ethics v. Packwood, 845 F.Supp. 17, 21 (D.D.C. 1994) (``Yet where, as here, an investigative subpoena is challenged on relevancy grounds, the Supreme Court has stated that the subpoena is to be enforced `unless the district court determines that there is no reasonable possibility that the category of materials the Government seeks will produce information relevant to the general subject of the . . . investigation.' ''). Turning to Mr. Haney's specific pertinency objections, he has objected to providing all of the records relating to the $1 million fee, claiming that the fee also covered projects other than the Portals and that such other information is not pertinent to our investigation. On several occasions, the Committee has attempted to explain to Mr. Haney and his counsel the pertinency of this and similar voluntary requests made during this investigation. For example, in an April 16, 1998 document request to Mr. Haney, Chairman Bliley stated: [A]ny objection to producing documents relating to the details of the $1 million fee, and the work performed by Mr. Knight for that fee, would be equally baseless. Despite the stunning coincidence between the date of the invoice and the signing of a key Portals lease agreement, you claim--without providing any supporting information--that the $1 million fee was not solely for Mr. Knight's work on the Portals, but for a variety of projects. While the Committee's jurisdiction is founded on the Portals matter, it is incumbent upon the Committee, and within the legitimate scope of our investigation, to test your claim by reviewing all documents that will shed light on the nature and purpose of the $1 million payment. Similarly, at the June 17 Subcommittee meeting, Chairman Barton stated the following in the presence of Mr. Haney's counsel: The juxtaposition of the questions under inquiry with the list of subpoenaed documents, I think, makes clear the pertinency of our requests. To date, the Subcommittee has received conflicting evidence about the nature and purpose of the $1 million fee, as well as the degree of involvement of Mr. Haney and his representatives in securing certain lease terms or the FCC's agreement at the time to move. The demanded documents will help us get to the truth. Moreover, Committee counsel and Mr. Haney's attorney discussed the pertinency of these particular records at considerable length in telephone conversations on June 16, 1998. Despite all of these explanations, Mr. Haney continued to interpose this pertinency objection at the June 17 meeting, and made clear his refusal to comply with the Subcommittee's ruling on his claim of pertinency. The Subcommittee, in making that determination, relied upon its own analysis of the need for such materials, as well as the CRS Memorandum, which concluded in relevant part (at page 10): It has been claimed, without tangible verification, that the payment was for a number of assignments that have been or would be undertaken by Mr. Knight over the three year period of the retainer agreement. The coincidence of the payment and the signing of the supplemental lease agreement between GSA and the Portals partnership has raised what appears to be legitimate concerns about the nature and purpose of the payment, which the conflicting evidence thus far gathered by the Subcommittee has not allayed. In response, Mr. Haney has supplied unconfirmable denials of pertinency. In this posture, the current record would appear to provide a strong foundation for a court to find that Mr. Haney has been informed of the pertinence of the subpoena requests. The Committee need not take Mr. Haney's ``unconfirmable denials'' at face value. The most direct way for the Committee to test the assertions by Mr. Knight and Mr. Haney with respect to the $1 million fee is to see what the other alleged projects were, what level of services were provided, when they were provided in relation to the payment, and whether these other projects were ever completed. The subpoenaed documents certainly are pertinent to that legitimate investigative task.\7\ --------------------------------------------------------------------------- \7\ During discussion on the pertinency of the non-Portals projects allegedly performed for the $1 million fee, Mr. Haney's counsel also argued that these records were business sensitive in nature and that disclosure to the Subcommittee would be harmful to Mr. Haney's business interests. Mr. Haney did not, however, raise this issue in his written legal objections filed on June 17, presumably because it is clear that the sensitive nature of records is not a legal basis upon which private parties can withhold documents from Congress. This Committee routinely requests and receives business sensitive (and attorney-client privileged) records from private parties, and takes all appropriate steps to ensure their confidentiality. --------------------------------------------------------------------------- Mr. Haney's other pertinency objection relates to any and all records concerning his relationship with, and representation by, Mr. Sasser on the Portals matter. Mr. Haney has not articulated to any degree why he believes such records are not pertinent to the Committee's investigation into whether improper influences were brought to bear on GSA and FCC by Mr. Haney or his representatives--one of whom was Mr. Sasser, the former United States Senator and current U.S. Ambassador to China. Prior to the issuance of the subpoenas, Chairman Bliley explained to Mr. Haney the pertinency of these requests in an April 16, 1998 letter, stating: On a separate but related matter, the Committee has received information that, in addition to Mr. Knight, you also retained former Senator James Sasser to represent you on the Portals, and that Mr. Sasser met with GSA and FCC officials, including then-FCC Chairman Reed Hundt, to discuss this matter. In light of the questions surrounding your fee arrangement with Mr. Knight, I am interested in learning the nature of your fee arrangement with Mr. Sasser, and the details of Mr. Sasser's efforts to influence the GSA lease and the FCC's relocation. In light of this notice, and the lack of any detailed rebuttal by Mr. Haney or his counsel, the claim that these records are not pertinent to this investigation is without merit.\8\ --------------------------------------------------------------------------- \8\ Mr. Haney's attorney also has intimated in past correspondence with the Committee on this matter--although not in response to the subpoenas--that documents relating to communications with GSA, as opposed to the FCC, are not pertinent to the Committee's investigation. However, as stated above, actions taken by GSA that affect the FCC fall within the Committee's jurisdiction and the scope of this investigation. --------------------------------------------------------------------------- B. claims of attorney-client privilege Mr. Haney has made a sweeping claim of entitlement to withhold whole categories of documents on grounds of attorney- client privilege. For various reasons described in more detail below, the Subcommittee decided to overrule this claim and demand production of all requested records. With respect to Mr. Haney's claim of privilege, we start with the jurisdictional proposition that there is no constitutional, statutory or common law bar to the Subcommittee demanding even explicitly privileged materials. The historic position of the House of Representatives is that committees of Congress are not bound to recognize any non-Constitutional privilege, such as the attorney-client privilege. Rather, as the CRS Memorandum makes plain (at page 11): The precedents of the House of Representatives and the Senate, which are founded on Congress' inherent constitutional prerogative to investigate, establish that acceptance of a claim of attorney-client or work product privilege rests in the sound discretion of a committee, regardless of whether a court would uphold the claim in the context of litigation * * * \9\ \9\ This Committee, in particular, has been a strong proponent of this view. As then-Chairman Dingell stated in a June 1983 Committee document on this very subject: ``[T]he position of the Subcommittee has consistently been that the availability of the attorney-client privilege to witnesses before it is a matter subject to the discretion of the Chair.'' Committee on Commerce Print 98-I (98th Congress, 1st Session). See also the Opinion of the Senate Subcommittee on Nuclear Regulation, July 19, 1989, at 12-13 (``As an independent branch of government with such constitutional authority, the Congress must necessarily have the independent authority to determine the validity of non-constitutional evidentiary privileges that are asserted before the Congress.''). --------------------------------------------------------------------------- An earlier CRS memorandum elaborates on the rationale for such a conclusion, emphasizing the problematic consequences of any contrary view: Indeed the suggestions that the investigatory authority of the legislative branch of government is subject to non-constitutional, common law rules, developed by the judicial branch to govern its proceedings arguably is contrary to the concept of separation of powers. It would, in effect, permit the judiciary to determine congressional procedure and is therefore difficult to reconcile with the congressional authority granted each House of Congress to determine its own rules. Memorandum of Morton Rosenberg, Specialist in American Law, the American Law Division, CRS, dated September 3, 1982, at 21-22 (published in Committee on Commerce Print 98-I, at 23-24 (98th Congress, 1st Session). That said, most congressional committees have looked to analogous judicial authority in determining whether to recognize a particular claim of privilege--a practice from which there is no need to deviate in this particular instance, for it appears to be without question that Mr. Haney's claim of privilege would not be sustained by any court of law. Mr. Haney's blanket claim of privilege is unacceptable and prevents any balancing of interests The attorney-client privilege, while long established in the law, has never been particularly favored. As Dean Wigmore, the father of the law of evidence, has aptly pointed out: ``[The privilege] is nonetheless an obstacle to the investigation of truth. It ought to be strictly confined within the narrowest possible limits consistent with the logic of its principle.'' 8 Wigmore, Evidence, Sec. 2291, at 554 (McNaughton rev. 1961). Accordingly, for the privilege to apply, the claimant affirmatively must establish (1) a communication, (2) made in confidence, (3) to an attorney, acting in such capacity, (4) by a client, and (5) for the purpose of seeking or obtaining legal advice (ibid.)--subject to a strict standard of waiver, as well as numerous other exceptions that have been carved out by the courts in an effort to reduce the truth- frustrating impact of the privilege in certain situations. See the CRS Memorandum, at 12-18. Accordingly, the burden of establishing the existence of each element of the attorney-client privilege rests with the party asserting the privilege--not the party seeking to gain the information. FTC v. Lukens Steel Co., 444 F. Supp. 803, 806 (D.D.C. 1977) (``The party seeking the benefit of the privilege has the burden of demonstrating its applicability.''); see also E. Epstein, The Attorney-Client Privilege and the Work-Product Doctrine, at 29-30 (American Bar Association, 3d ed. 1997). While the fact that Mr. Knight, Mr. Sasser and other individuals hired by Mr. Haney are licensed attorneys raises questions about the potential applicability of the attorney- client privilege, the key words here are ``potential applicability.'' The federal courts have been quite clear that ``the attorney-client relationship does not create an automatic `cloak' of protection . . . draped around all occurrences and conversations which have any bearing, direct or indirect, upon the relationship of the attorney with his client.'' United States v. Goldfarb, 328 F.2d 280, 281-82 (6th Cir.), cert. denied, 377 U.S. 976 (1964); see also The Attorney-Client Privilege, supra, at 24. Rather, the privilege must be asserted against giving particular testimony or producing particular documents. Blanket assertions of privilege are not countenanced. Thus, the privilege may not be raised against testifying generally or engaging in any discovery at all. It must be raised communication by communication or document by document. The Attorney-Client Privilege, supra, at 24 (citing cases).10 --------------------------------------------------------------------------- \10\ See also the CRS Memorandum, at 13-14 and n.8 (``Blanket assertions of the privilege have been deemed `unacceptable,' and are strongly disfavored.'') (internal citations omitted). --------------------------------------------------------------------------- Thus, in order to facilitate this determination, ``courts have required the parties asserting the privilege to create a privilege log or index, document by document, identifying each document for which the privilege is claimed and the basis for the claim of privilege.'' The Attorney-Client Privilege, supra, at 33. Congressional committees also follow this common practice when faced with refusals to produce responsive documents.11 --------------------------------------------------------------------------- \11\ This Committee routinely requires logs from both governmental and private parties who claim some entitlement to withhold requested information from the Committee--whether the claim is one of attorney- client privilege, executive privilege, enforcement sensitive, or otherwise. Even the White House routinely provides such logs to the Committee when dealing with Presidential decision-making records or sensitive foreign policy documents. The Committee should neither expect nor require any less from Mr. Haney. --------------------------------------------------------------------------- The record in this case can leave little doubt that Mr. Haney utterly failed to carry his burden on this issue. The Committee made repeated requests that Mr. Haney provide a log or index of those documents over which he claimed a privilege, but he refused to do so.12 This failure left the Subcommittee without any information to test the assertions of privilege and no record upon which to find a valid claim of privilege in Mr. Haney's favor. Mr. Haney's actions also prevented the Subcommittee from balancing whatever valid claims of privilege he may have had against the Subcommittee's investigative need. In short, the privilege was Mr. Haney's to assert, prove, and protect, yet he took no concrete steps to do so. The Subcommittee's decision to overrule his blanket claims of privilege was therefore proper, and consistent with the practice of courts throughout the country. See, e.g., International Paper Co. v. Fiberboard Corp., 63 F.R.D. 88, 94 (D.Del. 1974) (denying claim of privilege due to lack of specificity, and stating: ``An improperly asserted claim of privilege is no claim of privilege at all. . . .''); The Attorney-Client Privilege, supra, at 23-34.13 --------------------------------------------------------------------------- \12\ When pressed on this matter at the Subcommittee meeting, Mr. Haney's counsel simply stated that he was aware of case law supporting his client's refusal to produce a log. However, he did not supply such case law to the Committee, either at the Subcommittee meeting or in his June 17 letter listing Mr. Haney's formal objections to the subpoenas, and the Committee--despite its own research--is not aware of any such court decisions. \13\ Relatedly, Mr. Haney has claimed the work-product doctrine as an additional basis upon which to withhold some of the same categories of documents. The reasons discussed above for overruling Mr. Haney's claim of attorney-client privilege apply equally to his claim of work- protection, and thus need not be separately discussed. The Committee notes, however, that Mr. Haney's claim of work product protection raises the additional question of whether the services he received from Mr. Knight and his other lawyers were ``in anticipation of litigation,'' as required under federal rules and case law in order to invoke this doctrine. --------------------------------------------------------------------------- Mr. Haney failed to demonstrate any privileged relationship with Mr. Knight Even if Mr. Haney had produced a privilege log of communications between him and Mr. Knight, there is substantial reason to believe that such communications would not berecognized as privileged by the federal courts for one simple reason: the communications do not appear to have been made in furtherance of obtaining predominantly legal advice from Mr. Knight. As the CRS Memorandum explains (at page 15): the case law has consistently emphasized that one of the essential elements of the attorney-client privilege is that the attorney be acting as an attorney and that the communication be made for the purpose of securing legal services. The privilege therefore does not attach to incidental legal advice given by an attorney acting outside the scope of his role as attorney. `` `Acting as a lawyer' encompasses the whole orbit of legal functions. When he acts as an advisor, the attorney must give predominantly legal advice to retain his client's privilege of non-disclosure, not solely, or even largely, business advice'' (quoting Zenith Radio Corp. v. Radio Corp. of America, 121 F. Supp. 792, 794 (D.Del. 1954) (emphasis supplied)). In order to ascertain the capacity in which an attorney is acting on behalf of a client, the courts routinely permit the party seeking the documents to question the party withholding the documents (or his attorney) on such issues as ``the general nature of the attorney's services to his client, the scope of [the attorney's] authority as agent and the substance of matters which the attorney, as agent, is authorized to pass along to third parties.'' CRS Memorandum at 15-16. Consistent with that authority, Subcommittee members attempted to question Mr. Haney's attorney about the nature of the services provided by Mr. Knight, but he refused to answer certain questions. Instead, he simply stated that Mr. Knight was hired to perform the full range of legal services that a person usually hires an attorney to perform, and would not elaborate further. Thus, again, when given the opportunity to establish a privileged relationship with Mr. Knight, Mr. Haney balked. This failure alone warrants a finding against the validity of his privilege claims.14 --------------------------------------------------------------------------- \14\ As the Committee on Foreign Affairs stated in its contempt report involving the refusal of the Bernsteins to answer questions about their representation of Ferdinand Marcos: ``Having been given numerous opportunities to raise their objections and to make their case, including providing written submissions as well as oral statements, the Bernsteins made no effort to establish that their services were legal rather than business in nature.'' H. Rep. No. 99- 462, reprinted at 132 Cong. Rec. 3031 (February 27, 1986). --------------------------------------------------------------------------- Furthermore, the other evidence gathered by the Committee-- including the records of Mr. Knight's firm--raises serious questions as to whether Mr. Knight was hired to provide predominantly legal advice. While the retainer letter between Mr. Knight and Mr. Haney discusses both ``legal'' and ``strategic'' counsel, there is little, if any, evidence of Mr. Knight providing legal advice to Mr. Haney, or Mr. Haney seeking legal advice from Mr. Knight. Thus, the Subcommittee agrees with the legal conclusion contained in the CRS Memorandum (at page 18): In short, based on the record now before the Subcommittee, the claims of attorney-client [privilege] would not likely be sustained by a reviewing court. In particular, Mr. Haney has failed to supply the essential elements necessary to support a privilege assertion, including evidence that the relationship with Mr. Knight was predominantly for legal, rather than business, advice, or that the ``strategic'' advice was not meant to be communicated to third parties. In the absence of a detailed and descriptive privilege log that could set forth specific facts that, if credited, would be sufficient to establish each element of the privilege claimed, it is unlikely that a reviewing court would [accept] the claims. C. Claim of Client Confidentiality under Bar Association Rules Mr. Haney also has claimed, as a basis for refusing to provide certain subpoenaed documents, a local bar rule (Rule 1.6 of the D.C. Rules of Professional Conduct) that prohibits attorneys from disclosing any confidences or secrets of their clients without the client's consent, a court order, or otherwise as required by law. But as the nature of the rule should make clear, it imposes an ethical duty on the attorney, not the client--the latter of whom is free to divulge whatever information he or she chooses. Because Mr. Haney is the client in this case, he is not under any ethical duty to withhold these documents from the Committee, and he can face no adverse consequences by doing so since he would not be revealing any confidences of a client.15 --------------------------------------------------------------------------- \15\ Although he repeatedly raised this rule as a basis for his client's withholding of certain categories of documents, Mr. Haney's counsel also apparently conceded under questioning that Mr. Haney could not legitimately claim the protection of this rule for documents in his own possession. Thus, it is still unclear upon what basis Mr. Haney is refusing to produce the non-privileged documents in his possession, such as information relating to his retention of Mr. Sasser, their fee arrangement and billing history on the Portals, and the non-Portals project records allegedly detailing work performed for the $1 million fee. --------------------------------------------------------------------------- Even if Mr. Haney could claim the protection of this rule in some other context, the rule itself does not explicitly address requests from Congress. While there does not appear to be any judicial precedent for the rule's application in the legislative arena, federal courts consistently have found, in analogous contexts, that general confidentiality provisions-- even if mandated as a matter of federal law--cannot be used to shield information from Congress, unless these statutes expressly bring Congress within their ambit. See, e.g., F.T.C. v. Owens-Corning Fiberglass Corp., 626 F.2d 966, 970 (D.C. Cir. 1980) (citing other cases for same proposition). Furthermore, it is important to stress that this rule is not a common law privilege that shields client information from all disclosures--just voluntary ones. See Memorandum of Geraldine R. Gennet, House General Counsel, to the Honorable Tom Bliley, Chairman of the House Committee on Commerce, and the Honorable Joe Barton, Chairman of the Subcommittee on Oversight and Investigations, dated June 16, 1998, at 2-3 [hereinafter referred to as ``the General Counsel Memorandum'']. (A copy of this memorandum is appended to the end of thisreport.) Thus, the rule expressly permits disclosure upon court order or as required by law. In the civil or criminal litigation context, an attorney therefore must challenge information requests, including subpoenas, by making a motion to quash the discovery to the appropriate judicial official. If that fails and the court orders compliance, the attorney can provide the information without concern of disbarment or other professional sanctions. Similarly, [o]nce the Chair in a congressional proceeding overrules the objection, the period when disclosure would be ``voluntary'' is past. Once the subcommittee overruled [his] objection, [Mr. Haney] was bound to obey its direction, and follow its ruling as a commandment of disclosure, in the words of the [Bar] Code, ``required by law.'' [His] resistance to doing so was contempt of Congress. Contempt Report of Committee on Foreign Affairs, H. Rep. No. 99-462, reprinted at 132 Cong. Rec. 3033 (Feb. 27, 1986) (citing Quinn v. United States, 349 U.S. 155, 165-66 (1955)).16 --------------------------------------------------------------------------- \16\ See also the General Counsel Memorandum, at 5-9 (concluding that bar association rule is satisfied by issuance of subpoena and overruling of objections to production). --------------------------------------------------------------------------- Finally, the notion that a state or local ethics rule established by a professional organization can impede a congressional investigation has been rejected in the past by both Houses of Congress. As the Committee on Foreign Affairs stated in its contempt report involving the Bernstein brothers, who also claimed this bar rule as a basis for withholding information from its respective subcommittee, it is ``well- established that no professional or bar association rule can override Federal law, such as the Congress' inherent constitutional investigatory power.'' H. Rep. No. 99-462, reprinted at 132 Cong. Rec. 3033 (Feb. 27, 1986).17 This Committee agrees, as should the entire Congress. --------------------------------------------------------------------------- \17\ See also the Opinion of the Senate Subcommittee on Nuclear Regulation, July 19, 1989, at 13 n.5 (rejecting claim by attorney of ethical duty to withhold requested information, and stating: ``We believe this Subcommittee's determination [regarding the validity of privileges] would qualify under the Model Code as `required by law.' '') --------------------------------------------------------------------------- House Rules Requirements A. Committee Consideration On Thursday, April 30, 1998, the Subcommittee on Oversight and Investigations met in open session and, by a roll call vote of 9 yeas to 6 nays, authorized the issuance of subpoenas ad testificandum and subpoenas duces tecum in connection with the Subcommittee's ongoing Portals investigation, including subpoenas duces tecum for the records of Franklin L. Haney and three companies under his control. On Wednesday, June 17, 1998, the Subcommittee on Oversight and Investigations held an open business meeting to receive subpoenaed documents in connection with the Subcommittee's ongoing Portals investigation. The Subcommittee, by a roll call vote of 9 yeas to 7 nays, adopted a resolution finding Franklin L. Haney in contempt for failure to comply with the subpoenas duces tecum served on him, and directing the Chairman of the Subcommittee to report such finding to the Committee on Commerce for such action as the Committee deems appropriate. On Wednesday, June 24, 1998, the Full Committee on Commerce met in open session to consider a Report finding Franklin L. Haney in Contempt of Congress and directing the Speaker of the House of Representatives to certify the Report of the Committee on Commerce with respect to Franklin L. Haney to the U.S. Attorney for the District of Columbia and, by a roll call vote of 26 yeas to 18 nays, adopted and reported the Report to the House. B. RollCall Votes Clause 2(l)(2)(B) of Rule XI of the Rules of the House requires the Committee to list the recorded votes on the motion to report a measure to the House and amendments thereto. The following are the recorded vote on the motion to adopt and report the Report to the House, including the names of those Members voting for and against, and the recorded votes on the motions considered in connection with the Report.
Committee on Commerce--105th Congress Voice Votes Measure: Report finding Franklin L. Haney in Contempt of Congress and directing the Speaker of the House of Representatives to certify the Report of the Committee on Commerce with respect to Franklin L. Haney to the U.S. Attorney for the District of Columbia. Unanimous consent request: A Unanimous Consent Request by Mr. Bliley provided that, among other things, the nine technical and conforming amendments agreed to by staff are hereby made to the Report, and the Committee will be permitted to include in the Report all sections required to be in committee reports pursuant to the Rules of the House. Disposition: Agreed to, without objection C. Other House Rules Requirements Pursuant to clause 2(l)(3)(A) of Rule XI of the Rules of the House of Representatives, the Subcommittee on Oversight and Investigations and the Full Committee on Commerce met and made findings that are reflected in this report. Pursuant to clause 2(l)(3)(D) of Rule XI of the Rules of the House of Representatives, no oversight findings have been submitted to the Committee by the Committee on Government Reform and Oversight. The Committee finds that the provisions of clause 2(l)(3)(B) of Rule XI (pertaining to new budget authority, entitlement authority, and tax expenditures) and clause 2(l)(3)(C) of Rule XI (pertaining to a Congressional Budget Office cost estimate) are not applicable to this report. Pursuant to clause 2(l)(4) of Rule XI of the Rules of the House of Representatives, the Committee finds that the Constitutional authority for this report is provided in Article I, section 8, clause 3, which grants Congress the power to regulate commerce with foreign nations, among the several States, and with the Indian tribes. Finally, the Committee finds that: (1) the provisions of section 5(b) of the Federal Advisory Committee Act (pertaining to the creation of advisory committees) are not applicable to this report; and (2) the report does not relate to the terms and conditions of employment or access to public services or accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. Conclusion To date, and in large part due to the uncooperativeness of Mr. Haney, the Subcommittee has been unable to resolve the truth of the allegations first raised last year in the Business Week and Time magazine articles. The evidence gathered so far paints an incomplete and conflicting picture with respect to the nature and purpose of the $1 million fee and the involvement of Mr. Haney and his representatives in securing certain changes to the Portals lease or the FCC's relocation to that site. At this point, the Committee is not prepared to say that Mr. Haney or any other party has engaged in illegalities, wrongdoing or misconduct. In fact, the very point of this contempt report is that Mr. Haney's recalcitrance has denied the Committee key information regarding whether those allegations may be true. As former Representative Solarz said with respect to his recommendation that the House hold the Bernstein brothers in contempt for their refusal to provide information on their representation of Ferdinand Marcos: At the time we began the hearings, we had no hard evidence that the allegations were accurate . . . . We have pursued this matter simply because we are interested in establishing the right of our committee and the Congress as a whole to obtain this kind of information. If the House does not turn over such witnesses to the Department of Justice, we could be creating a precedent that could potentially cripple the capacity of the Congress to fulfill its constitutional and legislative responsibilities . . . . 132 Cong. Rec. 3048 (Feb. 27, 1986). The Subcommittee lawfully authorized and issued subpoenas for Mr. Haney's records--records that were pertinent to a valid congressional investigation within the scope of the Subcommittee's jurisdiction. In response to those subpoenas, Mr. Haney failed to provide any responsive records, including by his counsel's own admission clearly non-privileged documents relating to his negotiations with GSA over the Portals lease amendments. Mr. Haney's claims of privilege, confidentiality, and pertinence were properly overruled by the Subcommittee, as Mr. Haney failed to carry his burden of establishing any lawful right to withhold these documents from Congress. His refusal to comply with the subpoenas and the Subcommittee's rulings on his objections was willful and contemptible. Accordingly, the Committee recommends to the House the following resolution: Resolved, That pursuant to sections 102 and 104 of the Revised Statutes of the United States (2 U.S.C. Sec. Sec. 192, 194), the Speaker of the House of Representatives certify the report issued by the Subcommittee on Oversight and Investigations and adopted by the full Committee on Commerce, detailing the failure of Mr. Franklin L. Haney to produce papers to the Committee on Commerce, to the United States Attorney for the District of Columbia, to the end that Mr. Franklin L. Haney be proceeded against in the manner and form provided by law.
Additional Views During the Subcommittee and full Committee meetings to consider holding Franklin L. Haney in contempt of Congress for his failure to produce subpoenaed records, several Members of the Minority made pointed criticisms of the Majority's handling of this investigation and these contempt proceedings. We believe that a rebuttal is required for the record. Some in the Minority claim that we have proceeded too quickly and without attempts at compromise with Mr. Haney. But as the detailed correspondence between the Committee and Mr. Haney (attached as an appendix to the Contempt Report) reflects, the Committee made numerous, good faith attempts to secure relevant records and other information from Mr. Haney voluntarily, over a five month period of time, before even authorizing these document subpoenas--and even then we waited several more weeks before issuing them. Mr. Haney was given repeated opportunities to comply or seek a compromise with the Committee in order to avoid these compulsory requests, but he chose instead to attack our investigation publicly and stonewall our attempts to gather information in their entirety. Even after we issued subpoenas, Mr. Haney proceeded in bad faith, refusing to turn over any responsive documents and raising meritless procedural claims at the last minute in an attempt to justify this contemptible behavior. It was not until the day before the Subcommittee contempt meeting that Mr. Haney made any attempt at compromise, but even then he insisted on dictating to this Committee what records were relevant to our inquiry and what records were ``privileged'' or ``confidential,'' without providing the Committee with one piece of evidence to support these claims. And it was not until the middle of the full Committee contempt meeting that Mr. Haney finally produced some of the non-privileged materials and a privilege log--even though the Subcommittee already had overruled all of his objections to the subpoenas, including his unsupported claims of privilege, and had ordered full compliance. Thus, we now know that Mr. Haney has been withholding from this Committee for more than half a year information that even he conceded he had no right to withhold-- documents relating to his contacts with government officials on the Portals project. Simply put, that is not the way the process works. Mr. Haney, and apparently some in the Minority, seem to believe that the time for negotiation and compromise is after subpoenas have been issued and after the subpoena return dates have come and gone. We strongly disagree. Under Chairman Bliley's leadership, the Committee has issued subpoenas sparingly and only after voluntary attempts to secure information or compromise have proven unsuccessful. But once the Committee takes the extraordinary step of issuing subpoenas, we expect compliance with them to be timely and full. Failure to do so after the Committee has considered and rejected all potential objections to the subpoenas is contempt, pure and simple, and subpoenaed parties must know that their refusals to cooperate carry a price. The dissenters also have criticized our failure to permit Mr. Haney to testify at a public hearing prior to holding him in contempt. In fact, we offered Mr. Haney an opportunity to appear before the Subcommittee to raise objections to the subpoenas, but he chose to send his attorney instead (who was questioned at length by Subcommittee members). This process of hearing and considering objections to subpoenas in a public meeting, with full opportunity for debate, is virtually unprecedented in the Committee's history, and is a sign of the extraordinary due process afforded to Mr. Haney. Furthermore, enforcement of subpoenas for documents is not, and should not be, conditioned upon when or to what Mr. Haney testifies at a public hearing. As former Chairman John Dingell has said, permitting individuals to testify at a hearing prior to receiving all their relevant documents or conducting interviews with them is contrary to long-standing Committee investigative practices and would prevent full and fair questioning of the witnesses. Mr. Haney's testimony has been delayed precisely because of his refusal to produce the requested documents and be interviewed by Committee staff on this matter. Apparently in a partisan attempt to undermine this investigation, certain Members of the Minority have attempted to re-write the history of congressional investigations to support their view that we are on a ``fishing expedition'' and a ``partisan witch hunt.'' They have alleged on various occasions that we lacked ``probable cause'' to issues these subpoenas, that the subpoenas were overbroad, and that our investigation has uncovered no ``evidence of wrongdoing'' to justify enforcing them against Mr. Haney. With respect to the first two claims, we would urge all Members to review the legal analysis performed by the experts at the Congressional Research Service's American Law Division, which solidly refutes these claims and is appended to the Contempt Report. As for the claim that we lack ``evidence of wrongdoing,'' let us make three related points. First, regardless of what the evidence gathered to date shows or does not show, we do not understand its legal relevance to the question that was before the Committee--Did Mr. Haney have any lawful basis upon which to withhold the subpoenaed documents? Surely, the dissenters do not believe that lawful subpoenas can be ignored by subpoena recipients simply because those recipients (or certain Members) think that an investigation to date has not produced evidence of the recipients' wrongdoing. We have been seeking these records from Mr. Haney since the very beginning of our investigation, and we should not allow evidence gathered from others during the period of his recalcitrance to eliminate or reduce his independent obligation to provide all requested materials. To do so would reward delay and obstruction, and likely would encourage others to not provide prompt and complete cooperation with congressional investigations. Second, the assumption underlying the dissenters' view-- that evidence of wrongdoing is a condition precedent to the issuance and enforcement of congressional subpoenas--is demonstrably false. As past practices of this and other committees of Congress show, the oversight jurisdiction and responsibilities of Congress are not confined to criminal violations. For example, this Committee's 1982 contempt report on Interior Secretary James Watt--which was not even prepared until six months after the full Committee voted to hold him in contempt--does not contain a single allegation of wrongdoing by Mr. Watt, nor any evidence of wrongdoing by him. Even in the contempt report held up by some in the Minority as a model-- that involving the Bernstein brothers' failure to testify about their dealings with Ferdinand Marcos--there is absolutely no evidence of wrongdoing of any kind. In fact, virtually theentire factual section of that report consists of allegations contained in newspaper articles, without any discussion of the subcommittee's investigative efforts or findings as to whether those allegations were accurate (other than the issuance of subpoenas to the Bernstein brothers). In all of these examples, the question was not ``What wrongdoing has been proven so far?,'' but instead was ``On what basis is information being withheld from Congress?'' That is what we have been asking throughout these contempt proceedings, and Mr. Haney's answers have been far from satisfactory. Third, we take strong issue with the dissenters' one-sided characterization of the facts developed during the course of this investigation. Not surprisingly, the individuals involved in the events at issue, who have a strong interest in defending the Portals deal and their own involvement in it, have denied in Committee staff interviews or carefully worded testimonial proffers any improper or illegal conduct. But as we have gathered more documentation and begun the process of re- interviewing these individuals, it has become clear that there are many unresolved questions about the efforts of Mr. Haney and his representatives to influence government officials, and what impact those efforts may have had on agency decision making. For example, we now know that the FCC's Managing Director, the top administrative officer who was ostensibly in charge of the relocation issue, was never advised of private meetings between FCC political officials and Mr. Haney and his representatives, including Mr. Knight and Mr. Sasser. We also now know that FCC political officials overruled a January 1996 recommendation by the Managing Director that the Commission withdraw its conditional acceptance and instead reject the Portals space assignment. And each new set of documents we receive about the $1 million fee and the work performed for it raises more questions than it answers. (An earlier, more detailed rebuttal of some of the Minority's misleading and inaccurate statements with respect to this investigation is appended to these Additional Views as Attachment A.) Do the conflicting evidence and unanswered questions prove that anyone did anything improper or illegal? No. But do they warrant further investigation? Absolutely yes. On the question of attorney-client privilege, we believe the Contempt Report makes clear that the Subcommittee's decision to overrule Mr. Haney's claims of privilege was based on a sound legal analogy to the judicial context, rather than on Congress' inherent right to reject even valid claims of privilege if necessary for the performance of its constitutional functions. Thus, the Subcommittee did what virtually every court in the country would have done--we rejected blanket assertions of privilege devoid of any affirmative showing by Mr. Haney that the elements of the privilege were satisfied as to any particular document or that his relationship with Mr. Knight was based predominantly upon the solicitation or receipt of legal advice. We believe this determination is supported by the subsequent review of other materials over which Mr. Haney had vigorously claimed privilege--those that were recently produced to the Committee by Mr. Knight's law firm. We asked Mr. Morton Rosenberg--a Congressional Research Service expert on attorney-client issues whom the Minority often relied upon for legal advice when it ran this Committee--to review and analyze 35 of these claimed privileged documents. He found that 34 of the 35 claims of privilege likely would not be sustained by a reviewing court. Mr. Rosenberg's analysis, appropriately redacted, is appended to these Additional Views as Attachment B. We also note that, as compared to our Minority predecessors on this Committee, we handled Mr. Haney's claims of privilege in a far more open, fair, and considered fashion. We have appended to these Additional Views, as Attachment C, an affidavit from the former chief counsel and staff director for then-Chairman Dingell, who explains the ``process'' by which the then-Chairman unilaterally ruled against all 30 claims of privilege raised by subpoenaed parties over a 10-year period. Finally, in an attempt to paint the current investigation as part of a political smear campaign against a close confidant of the Vice President, Mr. Peter Knight, some in the Minority have taken to reciting or attaching to their correspondence one-sided and generally inaccurate commentary by one or two journalists who had criticized the Subcommittee's recent investigation into the Department of Energy's funding of Molten Metal Technology (another client of Mr. Knight's). They have ignored, however, the favorable reporting by the Washington Post, Time magazine, and other news organizations on this same matter. We also want to emphasize that the Subcommittee initiated the Molten Metal investigation at the urging of the Minority staff, and as an outgrowth of the Committee's overall programmatic review of the Office of Science and Technology. That review has led to numerous changes in the Office's management and operations, which we believe will improve the effectiveness of its technology development efforts. The issue here is Mr. Franklin Haney's illegitimate refusal to provide subpoenaed documents. That is what the Contempt Report is about. For all of the above reasons, we strongly urge the adoption of the Contempt Report by the House of Representatives, followed by a speedy referral of this matter to the U.S. Attorney for the District of Columbia for prosecution under the criminal contempt statute. Tom Bliley. W.J.``Billy'' Tauzin. Michael G. Oxley. Michael Bilirakis. Dan Schaefer. Joe Barton. Cliff Stearns. James C. Greenwood. Michael D. Crapo. Steve Largent. Richard Burr. Brian P. Bilbray. Charlie Norwood. Rick White. John Shimkus. J. Dennis Hastert. Bill Paxon. Christopher Cox. Rick Lazio. Barbara Cubin.
Minority Views of Representative Ron Klink I am joined in my views by Representatives Dingell, Waxman, Markey, Boucher, Manton, Towns, Pallone, Brown, Gordon, Furse, Deutsch, Rush, Stupak, Engel, Sawyer, Wynn, Green, McCarthy, Strickland, and DeGette. Although the subpoena to Mr. Haney was issued on a party line vote, one does not take lightly the decision by Mr. Haney not to comply with a Congressional subpoena. But we should also not take lightly the move to hold a private person in criminal contempt of Congress. Fundamental fairness to our citizens requires that this body demonstrates that all efforts have been made to provide the person with a full opportunity to provide personally his or her defense to the nation's elected representatives. In this case there are three overwhelming reasons that forced our negative vote that we wish to lay before the Speaker: (1) There has not been a shred of credible evidence of wrongdoing in the Portals matter. To the contrary, all of the information gathered by the Committee so far has suggested the opposite. (2) The Committee has refused repeated requests by Mr. Haney, Mr. Knight and Steven Grigg, the primary developer of the Portals, to provide testimony at a Committee hearing prior to proceeding with the drastic step of a contempt proceeding. (3) We cannot ignore the partisan political agenda of the majority in the development of this issue. My statement made at the June 24 Committee meeting to consider the matter of contempt provides the details of this matter and is attached at the end of these views, but I want to summarize each of these three important points. (1) There has not been a shred of credible evidence of wrongdoing in the Portals matter. To the contrary, all of the information gathered by the committee so far has suggested the opposite. Although never clearly stated by the Subcommittee or Committee chairmen, the allegation before the Committee appears to be that Mr. Haney was involved in an improper or illegal attempt to influence government agencies to obtain a favorable supplemental lease for the Portals partnership and paid an improper contingency fee to his attorney. Members of the House who read the Majority report might wonder why the only evidence of impropriety cited in the report are two magazine articles that appeared in October 1997. (This is particularly curious in light of the FCC's attached October 6, 1997, rebuttal to the Business Week article that described the article as ``materially and demonstrably inaccurate in several critical respects.'') One might reasonably conclude that the Committee has not followed up on this matter over the past eight months. To the contrary, the Committee has received thousands of pages of requested documents from the General Services Administration (GSA), the Federal Communications Commission (FCC), the White House, Mr. Haney, Mr. Knight and others concerning the Portals lease and the relocation of the FCC, and Committee staff has interviewed numerous government officials and private persons who negotiated the lease or were otherwise involved with the Portals. The reason the investigation is not mentioned is simple: none of the documents, nor any of the staff interviews revealed any impropriety in the negotiation of the lease, the hiring of Mr. Knight by Mr. Haney or in the actions of any of Mr. Haney's representatives. Subcommittee Chairman Barton admitted this in the June 24, 1998, Committee contempt meeting. At that Committee meeting to consider the Majority report, Representative Stupak offered an amendment to include important material, outlining the scope of the investigation, which was missing in the Majority report. The text of the amendment is included at the conclusion of these views. One part of the amendment read as follows: Between the initial letter to Mr. Haney on November 7, 1997, and the present, Subcommittee staff has interviewed numerous officials of the Federal Communications Commission and the General Accounting Office. These include Reed Hundt, former FCC Chairman; Andrew Fishel, FCC managing director in charge of the FCC move since 1989; Jeff Ryan, operations management and services chief, who works with Mr. Fishel; Robert Peck, formerly an assistant to Mr. Hundt and a member of the legislative staff and currently the Public Buildings Commissioner at GSA; Paul Chistolini, deputy commissioner; Blair Levin, a former special assistant to Mr. Hundt; Jackie Chorney, a former legal advisor to Mr. Hundt; Sharon Roach and Barry Siegal, attorneys at the General Services Administration who negotiated the lease; Tom Pagonis, the contract officer for the Portals project; Bob Goodman, director of property acquisition and realty services; Bill Lawson, GSA's assistant administrator for public buildings; Douglas Benton, Mr. Goodman's successor; Thurman Davis, the former GSA administrator for the National Capital Region; and Barbara Silbey, a former special assistant to the GSA administrator. All of these officials have stated in their interviews that they had no knowledge of or any evidence of improper political influence by Mr. Haney or other misconduct by Mr. Haney or his representatives or of an illegal contingency fee. Although the amendment was defeated on a party line vote, the Chairman of the Oversight and Investigations Subcommittee stipulated that the above statement concerning the interviews of government officials that Mr. Haney was alleged to have improperly influenced was true. He stated that a reason for withholding these facts from the House was the refusal of Representative Stupak to vote in favor of contempt, even if his amendment were adopted. In addition to a lack of evidence of impropriety in the negotiation of the Portals lease, the Committee has actually received affirmative evidence of the propriety of the lease. The impartial General Accounting Office reviewed the lease at Senator John McCain's request, and in a letter dated February 27, 1998, GAO concluded, ``The lease is in the best financial interest of the government and is preferable to FCC's staying in its current location.'' GAO also stated, ``No evidence came to our attention that GSA's solicitation of space for FCC was not in compliance with applicable laws and its own agency regulations governing the procurement of leased space, except for its cancellation of the SFO in February 1992.'' GAO concluded that after the courts reinstated the improperly canceled solicitation, ``It appears that GSA followed the Court's decision and thereafter complied with applicable laws and regulations we reviewed in resuming the procurement process, and it subsequently awarded the lease to Portals II. Furthermore, the award to Portals II was consistent with the fiscal year 1988 lease prospectus for approximately 260,000 occupiable square feet.'' GAO has looked at this project several times in the last five years and never found anything amiss. The allegation of an improper contingency fee paid to Peter Knight in return for obtaining a supplemental lease has also found no support in the subsequent investigation of the matter. The only source cited in the Majority report for the proposition that the fee was a contingency fee is one of Mr. Knight's law partners, Bernard Wunder, a former Republican staffer on this Committee. Mr. Wunder had stated last year in a staff interview that Mr. Knight had received a ``lump sum payment'' or a ``performance fee.'' In a subsequent staff interview in May, Mr. Wunder told committee staff that he did not intend the term ``performance fee'' to mean an illegal contingency fee, but rather to mean it was for work that was not covered by a monthly retainer or an hourly fee, an important fact also missing from the Majority's report. Mr. Wunder also stated that he knew that Mr. Knight had worked on other projects for Mr. Haney. Mr. Haney and Mr. Knight have also denied the existence of a contingency fee in letters to the Committee and in proffers of testimony made to the Subcommittee. Both have contended that the fee covered multiple projects over a period of three years. Documents provided by Mr. Knight confirmed that work subsequent to the signing of the Portals lease was performed, and additional documents received recently pursuant to a subpoena to Mr. Knight's law firm again confirmed the existence of other projects. In an interview of Mr. Knight's executive assistant, who prepared the bill, she confirmed that Mr. Haney had been a client of Mr. Knight's for almost three years, that she frequently communicated with Mr. Haney, that she had set up separate files for his various projects, and that she billed him every month for expenses relating to work done on his projects, but had never billed him another fee after 1996. In a proffer of testimony, Steve Grigg, the managing partner of the Portals project, stated that he asked for and negotiated the provisions in the supplemental lease that the Majority apparently believes to be the provisions demanded before a contingency fee was paid to Mr. Knight. Mr. Haney did not become a partner in the Portals development until March 26, 1996, over three months after the lease provisions in question were signed. During the course of the meeting to consider the contempt matter, members of the Majority continually stated that these facts were irrelevant, and that all that mattered was a subpoena had been issued, and Mr. Haney had refused to comply. I do not agree. Mr. Haney has asserted that some materials were covered by an attorney-client privilege, and that other documents were not pertinent to the Portals investigation. In overcoming such claims of legal privilege that protect all American citizens, the Committee should show at least some need for the information. The lack of any coherent allegation of impropriety backed by credible evidence, and the existence of considerable exculpatory evidence, provide no reason to proceed to contempt. (2) The Committee has refused to take the reasonable step of hearings before proceeding with the drastic step of a contempt proceeding. From the early days of this investigation, the parties and the Minority members have been asking for public hearings under oath, and the Committee repeatedly has refused to hold them. At the November 5, 1997, hearing on Molten Metal Technology, at which Chairman Barton first raised the issue of the $1 million payment to Mr. Knight, I asked for, and received, a promise from Chairman Barton--a public hearing at which Mr. Wunder, the apparent source of the allegation that some kind of illegal or improper fee was involved would testify. In that same hearing, under oath, Mr. Knight denied that he had received any type of contingency fee (p. 195), and Chairman Barton admitted that he was making no allegations of illegalities (p. 198). The hearing with Mr. Wunder has not been held. As early as December 22, Mr. Haney's lawyer stated in a letter to the Committee that he would prefer a public hearing ``accompanied by an on-the-record transcript, and the rules of procedure applicable to such hearings, as preferable to the campaign of unsubstantiated accusation and innuendo which we have experienced to date.'' This was in response to a letter threatening to subpoena Mr. Haney for testimony if he continued to refuse to submit to ``voluntary'' interview. Mr. Knight, also requested a public hearing. On March 30, 1998, in a letter from his attorney Mr. Grigg requested a public hearing ``so that we could put these matters to rest. For a variety of reasons, we believe it is most appropriate to discuss these matters at a public hearing and not in an informal staff interview.'' At the June 24 meeting on the contempt matter, I offered a motion to postpone consideration of the contempt citation until the Committee had held a hearing to receive testimony from Mr. Haney, Mr. Knight, Mr. Grigg, Reed Hundt, formerly chair of the FCC, and Emily Hewitt, general counsel for the GSA. It was rejected on a party line vote. Throughout the course of this investigation, Mr. Haney has never refused to testify at a hearing. To the contrary, in letters and statements from his attorney, he has welcomed anopportunity to testify. Yet the Majority refuses to hold a hearing so that Members could determine whether the documents sought by the Committee were necessary or the underlying allegations were sustainable. In early May, it appeared that the Committee was about to hold a hearing at which Mr. Wunder and William Diefenderfer, a former law partner of Mr. Knight's, would testify about the fee Mr. Knight received from Mr. Haney. However, after Mr. Wunder informed Committee staff that he would not testify that the fee was an illegal contingency fee, the proposed hearing was cancelled. Similarly, the Committee has refused to call Mr. Knight or Mr. Knight's secretary Jewelle Hazel, who prepared the bills, both of whom have information about the fee arrangement. After an offer by Ms. Hazel's attorney to Committee staff, Minority staff set up an interview with Ms. Hazel. But the Majority staff refused to attend. With respect to the negotiation of the Portals lease, none of the government officials involved in negotiation of the lease has been called to testify. Nor has the private sector individual, Mr. Grigg, who negotiated the lease, been called, despite his expressed willingness to testify. The General Accounting Office auditors, who have examined the entire leasing chronology, have also not been called. It is unprecedented to our knowledge that an individual, particularly a private businessman being required to provide documents about on-going activities unrelated to the project under investigation, cited for contempt of Congress would not be first given an opportunity to testify before the Committee. For example, in this Committee, former Secretary James Watt appeared at two public hearings prior to his contempt citation. Whether or not such an opportunity is legally required, the refusal of the Subcommittee to hold a single hearing on this matter suggests that the Majority has little interest in obtaining the facts, and, more likely, is afraid that the testimony may rebut allegations of impropriety. (3) We cannot ignore the partisan political agenda of the Majority in the development of this issue. It is an unfortunate fact that this investigation is part of an overall program within this Congress of Republican-led investigations of high level administration officials and Democratic supporters. This pattern of politically motivated investigations is documented in a June 18, 1998, report by the U.S. House Democratic Policy Committee entitled ``Politically- Motivated Investigations by House Committees.'' The investigation of Mr. Haney has its roots in a previous investigation by the subcommittee of Mr. Knight's representation of the Molten Metal Technology company and its obtaining a contract with the Department of Energy. The interest in Molten Metal appeared to result from the involvement of Mr. Knight, a former longtime aide to Vice President Al Gore and the Clinton-Gore `96 campaign manager. Mr. Knight was one of two Washington lobbyist--the other was a Republican--hired by Molten Metal for strategic advice in obtaining government business. Molten Metal had a unique process for the treatment of mixed waste, and theDepartment of Energy was under great pressure to begin disposing of the wastes it had been generating. In that investigation, a memorandum from counsels Mark Paoletta and Tom DiLenge to Chairman Joe Barton dated October 20, 1997, which stated that they had no real evidence of wrongdoing, nonetheless set out the reasons for holding hearings: ``(ii) it forces the key players to deny allegations of misconduct under oath'' * * * * * * * ``(v) will likely generate enormous press coverage, in light of the recent, high-profile news coverage of MMT's contracts with DOE.'' The counsels urged holding the hearing despite this warning: ``The cons of holding such a hearing are (I) there is no smoking gun, which opens us up to partisan criticism for engaging in a witch-hunt or smear of Democrat officials, lobbyists, and fund-raising practices (the ``everyone does it'' defense).'' Although the hearings, as predicted, found no evidence of impropriety, the results for Molten Metal were catastrophic. The publicity from the hearings made it impossible to obtain $20 million in bond financing and drove the company into bankruptcy. After the hearings, 221 Molten Metal employees lost their jobs, including 45 in Chairman Barton's state of Texas. A planned $70 million plant in Bay City, Texas was put on hold. The press soon caught on to the partisan nature of the investigation. Thomas Oliphant wrote in the Boston Globe on September 23, 1997: ``This sordid story could never have flown without the feeding frenzy that surrounds the vice president, but as an attempt at guilt by the associations of his associates it is as cheap as any of the shots that will in time come back to hit those who connived in launching it.'' A similar conclusion was drawn by Jonathan Broder in Boston Magazine in February, 1998: ``Despite all the insinuations, Republican investigators have presented no evidence that Molten Metal's contributions to the DNC resulted in its winning government contracts.'' After a final hearing on Molten Metal, George Lobsenz writing in The Energy Daily on February 18, 1998, concluded (``Facts Play Second Fiddle In Barton's Campaign Against Gore, MMT''): ``Barton has labored to sketch a conspiracy in which MMT hired a lobbyist, Peter Knight, a major Gore backer; cozied up to Grumbly, a Gore protegee; funneled campaign contributions to the Clinton-Gore campaign and qthen saw Grumbly boost its DOE funding from $1 million to $33 million despite uncertain results from the initial grants provided the company. ``A pretty sexy story, if you can prove the political connection. The problem is, Barton can't.'' Lobsenz also noted: ``Last Thursday, Barton finally got around to giving Molten Metal Technology officials an opportunity to appear in person before his panel to answer the charges. But the uncomfortable truth for all concerned is that the facts of the case have long since ceased to matter because the damage has been done. ``The company, which was struggling commercially even before Barton's attacks, has laid off hundreds of employees and is scrambling to find new financing--and clean the mud off its reputation.'' During the course of the disastrous Molten Metal investigation, the investigators were told of a payment made to Mr. Knight by Mr. Haney, whose name is similar to that of William Haney, the former president of Molten Metal. We cannot ignore the political motivation of the subcommittee to focus upon Mr. Knight and Franklin Haney, who has been a long-time contributor to the Democratic Party and a one-time Democratic candidate for governor of Tennessee. Given the finding of GAO that the Portals lease was in the taxpayers' interest, and the utter lack of evidence of impropriety in the entire affair, we are led to believe that partisan politics is at the root of this investigation. The following are my statements at the meetings of the Committee and Subcommittee to consider contempt, the amendment offered by Representative Stupak to the Report, and the October 6, 1997, response of the FCC to the Business Week article cited by the Majority. Ron Klink.