State & Local News Vol. 22, No. 1, Fall 1998 Washington's Labyrinthine Ways By Otto J. Hetzel The Impeachment Process Distraction. Even if you are not within the beltway, you simply can't avoid it if you watch TV or read a newspaper. Regardless of how one personally views Clinton's actions, at this point no one can predict how this saga will end. The House vote of 258B176 to initiate a wide-ranging inquiry could impose a form of purgatory on us all for the next two years. The inquiry votes were a major preoccupation as Congress attempted to finish its current term. The temptation with elections but weeks away to act in a partisan manner by releasing unreviewed materials and rushing to approve an open-ended inquiry was too great for the Republican controlled House, still operating with only an eleven member margin. It's too early to tell if this was a misjudgment. Congress had originally planned to adjourn on October 9. Five times Congress postponed acting on FY 99 appropriation measures, delaying the final vote until October 21. Judiciary Committee members will also need to return in November and December for hearings and votes, and, depending on events, the whole House for an indictment vote. So, campaigns were affected and vacations as well. The Impeachment Process. While certainly the issue is being debated, for those exposed to the President's videotaped grand jury testimony and based on what else has been revealed to date, it would appear that without more neither Starr's nor the Judiciary Committee's allegations are likely to meet the test of an "other high crime or misdemeanor" sufficient to justify impeachment. By requiring a vote before recess, however, congressional Republicans forced Democrats to go on record on whether an inquiry should be commenced. Only thirty-one Democrats ultimately voted for the Republican resolution exposing the partisan nature of the process due to the cover provided by a Democratic alternative. Only five members voted for no inquiry. Arguments that the House should first determine procedures and define grounds for impeachment gave way to partisan advantage. As for the voters, their take on the allegations for the large part seemed to follow their own political philosophy and how they felt about the job Clinton was doing. Criminalizing the Political Process Has Besmirched the Legal Profession. Among the damages resulting from Starr's Office of Independent Counsel (OIC) investigation, most public responses to the testimony and released evidence show little tolerance for the legal parsing involved in such issues as definitions of sexual relations and present tense application to responses. The technical distinctions that lawyers often draw in making legal arguments have been thoroughly rejected, despite the reality of the "perjury trap" nature of Starr's approach. A number of other related matters should be of considerable concern to attorneys, including the impact on the legitimacy of the criminal justice system caused by the unprecedented and dangerous example of releasing grand jury testimony without regard to the protections normally afforded that one-sided inquisitorial process. Such damage may be another legacy of this affair. While Starr obtained approval for doing so from the three-judge appointing panel, that motion was under seal and the justifications were not revealed. Moreover, based on the earlier Morrison decision upholding the OIC law, it would appear that panel was not an Article III court authorized to determine such an issue. Use of a federal grand jury as an investigative vehicle and then release of the raw data with no indictment profoundly undermines respect for the grand jury process. Questions about its use in circumstances specifically involving the President, for whom indictment while sitting is generally not considered a valid option, also have been raised. Vagueness of the House Impeachment Resolution. Attempting to provide a catch-all Resolution for anything that may arise against Clinton, House Republicans, on a party-line vote, authorized and directed the Judiciary Committee "to investigate fully and completely whether sufficient grounds exist" to impeach the President. Such a nonspecific description as whether "sufficient grounds" exist for impeachment could be the basis for a challenge on due process grounds if Congress were to attempt to sanction a witness for contempt for failing to respond to specific questions. Does Starr's Investigation Have Rotten Underpinnings? Not that it is likely to help Clinton, because Pandora's Box has been opened, but fundamental questions are now being asked about Starr's efforts to obtain jurisdiction for the Lewinsky investigation. The completeness of the grounds Starr provided the Attorney General has been questioned. Starr's exceeding his authority has already been charged in a Justice Department amicus brief supporting a district court's dismissal of tax evasion charges against Webster Hubbell. This rebuke was contained in a brief to the court of appeals opposing Starr's prosecution of Hubbell on grounds Starr exceeded his investigative authority and failed to obtain the Attorney General's prior approval. Starr's Justification for Initiating His Investigation Is Weak. His report argues under "The Scope of the Referral" (p. 6) that there was a "link" between his then existing jurisdiction and this potential topic, stating it was "complex but direct." The entire basis for his "preliminary investigation" undertaken prior to the January 15 request to the Attorney General for authority to investigate new allegations is based on the thin reed of "similarities" of Vernon Jordan helping Hubbell and then Lewinsky find a job. The prior taping of Tripp's lunch conversation with Lewinsky in Virginia, which Starr appears to refer to as "the OIC undertook a preliminary investigation," was wholly outside of Starr's then jurisdiction. If one carries Starr's theory to a logical conclusion, almost any tangential "similarity" justifying a request for additional authority would totally frustrate the specifically limited jurisdiction Starr was given as independent counsel. It is hard not to surmise that Starr was driven by his desire to "get" the President to such a degree that, without prior authorization, he acted unilaterally "to conduct a preliminary investigation" involving taping of conversations, in order to develop some "juicy" grounds unrelated to his then current authority. Disturbing questions about Starr's role with Paula Jones' attorneys have also surfaced. Starr's Prior Involvement with Linda Tripp. Questions also have been raised about the degree that Ms. Tripp may have already been cooperating with the OIC before January 12, apparently the date Starr is referring to, especially given Starr's identification of her as "a witness in three ongoing OIC investigations." The New York Times reported prior contacts through several attorneys on her behalf earlier in 1997. It is curious that Starr's Referral makes only a vague "January 1998" reference to Linda Tripp's "coming forward with allegations," rather than documenting the exact date as he does for other matters. Nor is it apparent why those contacts were not set forth in full detail. More specific details about all her contacts with that Office, direct or indirect, their timing, and the involvement of the OIC in her actions and with Paula Jones' lawyers are likely to be a subject explored in the impeachment hearings to be held after elections. None of the above would appear likely to have a direct effect upon the "express train" of an impeachment inquiry in the House. It does, however, raise questions regarding the legitimacy of Starr's actions. It should be noted that Starr is holding over Tripp his investigation of her altered tapes and threats of a perjury prosecution. Who Should Review Independent Counsel Actions? In the end, the question arises as to who should investigate alleged improprieties on the part of an independent counsel. In this instance, as contrasted to other OIC investigations, a long list of questioned conduct starts with leaking grand jury matters, a matter for which reports indicate presiding Judge Johnson has appointed a "special master" to investigate. As to reviewing prosecutorial tactics used, including disregarding an investigative target's right to counsel where that representation was known to the prosecutor, the Attorney General appears to have authority to investigate whether Starr's actions are consistent with Department of Justice Guidelines for prosecutors, since she is authorized to discharge an Independent Counsel. Her involvement is not realistic, however, another defect in the independent counsel law. She immediately would be accused of interfering for political reasons. In that matters occurred in Washington, D.C.'s courts, it would appear that the D.C. Bar might have jurisdiction to investigate this "prosecutor's" handling of his obligations. Starr has already been identified as a witness to be subpoenaed in the House inquiry. How Starr will fare in the end when he becomes a target is a yet unexamined chapter in the current morality play that has engaged us these last months. Stay tuned, not that you can avoid it even if you wanted to. Challenge to Independent Counsel's Authority in Cisneros Prosecution. Another attack on independent counsels' acting in excess of their authority has arisen in a prosecution involving former HUD Secretary Cisneros. The federal D.C. Court of Appeals has accepted an interlocutory appeal of a district court decision rejecting a challenge to the prosecution based on separation of powers arguments that lying in the confirmation process was not an indictable offense. Planned Republican Policy Showdowns, Using Appropriations Measures, Again Fizzles. By inserting riders to appropriation bills, Republican House members again attempted to impose their policies on a President perceived as weak by using the threat of a government funding shutdown unless he signed their legislation. A similar attempt resulting in a government shutdown three years ago, the occasion for Ms. Lewinsky's initial introduction to the President, resulted in an embarrassment for Republicans who were blamed for closing down government operations. This time, not only did Republicans back off, but they even provided more than the President had requested. Items compromised also provided grist for the upcoming elections. A $486 Billion Omnibus Appropriations Act. Rather than voting separately on all thirteen normal appropriations measures, Congress managed to pass only six individual bills, including one for Agriculture that was vetoed for insufficient funds for farmers, before running out of time to campaign. Since Congress did not pass a reconciliation resolution, for the first time since 1974, to allocate budget percentages by subject area, government funding was provided by a $486 billion Omnibus Act combining the remaining measures, about one-third of the $1.6 trillion federal budget. As one might suspect, the single up and down vote encouraged many riders and inclusion of various measures helpful to incumbents in their districts. So, while matters opposed by the President were discarded or negotiated, individual members "brought home the bacon" so to speak. Changing the Subject. In the appropriations measures, Congress and the President found a fertile basis for differentiating their policy positions in the forthcoming elections. The President had an opportunity to take positions of principle on these measures to demonstrate the importance of his role and his policies that continue to garner substantial public support even if not personal approval. He liked nothing better than to change the focus from the sexual scandal to his policies, such as education, getting an initial $1.1 billion for 100,000 grade school teachers. The $486 billion omnibus measure was passed until October 21, and little information about specifics was even then available. Originally, Republican objectives were to: force tax cuts, reduce funding for education, eliminate the national service program, cut legal services to the poor, attack environmental regulations, impose parental consent requirements on use of family planning funds, override the President's executive order preventing workplace discrimination against gay persons, reduce federal funds for toxic waste cleanup, permit highway construction in wilderness areas, delay imposition of toxic air emissions limitations, limit Federal Election Commission terms for staff, and ease mining regulations, workplace safety requirements, and other worker protections. The White House had earlier identified unacceptable provisions in ten funding bills for: Labor, Health and Human Services, Education, HUD and independent agencies, Interior, Justice, State, Defense, and Commerce, most of which were subsequently dropped to gain the President's approval. Funding for the Commerce Department was particularly contentious since it included funding for the Census Bureau to carry out the 2000 census and included costs to implement statistical sampling to augment the actual count. The constitutionality of sampling is now before the Supreme Court, having been rejected by two courts of appeal interpreting legislative language on use of sampling. The case will be heard early this Term, but plans to implement sampling continue, subject to the Supreme Court's final decision. What to Do with the Budget Surplus: Tax Cuts or Save Social Security. Among the issues driving resolution of the 1999 budget that came into effect on October 1, 1998, was how to handle the budget surplus of $70 billion for 1998 resulting from the current economic prosperity. Congress now has a ten-year forecast for a surplus of over $1.6 trillion from the Congressional Budget Office (more than double its earlier estimate). Although these forecasts are far from certain unless current successful economic policies continue, House Republicans passed an $80 billion, five-year tax cut, but it failed in the Senate. An earlier position for a ten-year, $1 trillion cut, was abandoned in the face of the President's position that dealing with social security solvency must come first, a potentially powerful political position in the upcoming elections. Democrats want to use the surplus first to stabilize and fund social security, and, only then, to consider its use for tax reductions and other expenditures. Republican tax cuts would be directed toward two-income families, further reductions in capital gains and estate taxes, and to shield some social security recipients from taxes. All but the latter would primarily benefit higher income families. While the House conservatives were eager for the confrontation, congressional budget rules now require a sixty vote margin in the Senate for any changes, which is currently difficult to achieve. Property Rights Protections Blocked in Senate. While the House's legislation is likely to be revived next year, the Senate's inability to meet cloture requirements of sixty votes resulted in abandonment for this Congress of legislation that would have imposed federal court jurisdiction for federal constitutional challenges to local planning, environmental, and zoning decisions. Either federal district courts or the Court of Federal Claims would have been given authority in such property rights cases. Existing legal doctrines that allow federal courts to defer to state judges would have been overturned as would doctrines requiring exhaustion of state remedies before obtaining review in federal court. Opposition to the bill pointed out that it was an interesting repudiation of current policies favoring turning federal power over to state and local governments and that it would empower activist federal judges often criticized by Republicans for expanding the federal role into local matters. The bill also faced a certain presidential veto in its current form. Restrictions on Tort Damages Also Fails. Tort legislation that would have imposed federal limits on consumer lawsuits for makers of defective products also failed to cut off debate in the Senate, but it is likely to be back next year. It differed from prior versions in that it had bi-partisan sponsorship and even White House backing. Prior restrictions on tort damages were passed over a presidential veto. The current measure would have preempted state laws and set a generally applicable two-year statute of limitations from the "discovery" of the cause of the harm, rather than from the date of the injury-causing event. A national restriction on punitive damages also would have been established, requiring clear evidence of a manufacturer's conscious and flagrant indifference to safety. The measure would have limited punitive damages to twice the lost wages and medical expenses and cap them at $250,000 for small businesses, those with less than twenty-five employee ands under $5 million in revenues. It would not have created punitive damage liability, however, in states without such provisions. Retailers' liability would have been limited unless they were also negligent or the manufacturer had gone out of business. Construction workers would have been denied damages in excess of worker's compensation for injuries from older defective machinery, although their employers could have sued to recover business losses that resulted from the injury. Don't expect this issue to go away, however, as it is a convenient target for small business lobbyists actually aimed at trial lawyers. Bankruptcy Changes Fail. Congress failed to pass a bankruptcy bill that would have limited the more than 1.4 million debtors' ability to write off debts fully. A presidential veto was also likely. Banks, consumer finance companies, credit card issuers, and retailers had pushed to obtain partial recovery of outstanding debts. The process was complex and was attacked as a windfall for credit card companies that push credit indiscriminately The State of the Cities 1998 Report. HUD released its State of the Cities Report reflecting the best municipal fiscal conditions in decades as a result of the robust economy. While a 10.4 percent increase in employment occurred over the last five years, continued poverty, shrinking populations, and middle-class flight are still chronic problems, now continuing into a third decade for cities. Cities also still suffer from high unemployment, have far weaker educational systems, and lack lower cost housing, all of which impede efforts to draw middle-income families back into cities. HUD's "worst case" housing needs analysis is that economic prosperity has failed to ease the affordable housing shortage. "Crisis level" rents, in excess of 50 percent of income or for those living in substandard dwellings, grew 400,000 from 1991B93 to reach 5.3 million. Through 1995, the last year for which numbers were available, that total has not been reduced. This represents 17 percent of all renters. The low-rent housing supply decreased by 900,000 from 1993B95. The number of working poor families needing housing assistance, however, jumped by 24 percent, or 265,000, from 1991B95. The lack of affordable housing is also spreading to the suburbs, with 9 percent of suburban households needing assistance (146,000). Crisis rents could grow even more widespread once more families lose welfare assistance and fail to obtain jobs paying enough to meet housing costs. The private market has also displaced low-rent dwellings available to poorer families. Those units available now total only 9.2 million. The total families eligible for assistance were 12.5 million, including 4.5 million children, 1.5 million seniors, and 1 million disabled. Households with less than 30 percent of area median income remain at the greatest risk. The 70 percent of those with lower incomes who do not receive HUD assistance pay more than 50 percent of their income for rent or live in inadequate housing. Agreement on New Public Housing Act. After more than three years of intense debate, Congress gave final approval to over 400 pages of landmark legislation reorienting the U.S. Low Rent Public Housing program originally enacted in 1937. This new legislation affects roughly 3 million units for poorer families administered by local government and includes the section 8 voucher program. It fundamentally changes the federal-local government roles with regard to administration of public housing, potentially providing far more independence and discretion to local public housing authorities (PHAs) in the management and operation of their programs. PHAs will be given the discretion to serve higher income tenants and broaden the base of the tenants they serve. Up to 100 local governments will also be given an opportunity to take over poorly performing PHAs and carry out administration in their stead. Public housing will become available again to the working poor rather than reserving it almost exclusively for the lowest income persons and families. It is hoped this may reverse the stigma attached to public housing, currently perceived as the dumping ground for poor, predominately African-American families. In conjunction with this devolution to local administration and a mixed income service population, Congress provided the first financial allocations of new rental authority in over five years, reflecting the political realities when federal housing funds were restricted solely to the poorest in society. Additional vouchers to assist families including those in transition from welfare to work, $10.2 billion for current section 8 rental assistance, and $625 million for public housing improvements through the HOPE VI construction program, were provided in HUD's appropriations bill to which the housing legislation was attached. Rep. Rick Lazio (R-N.Y.), the House committee chair, was the primary stimulant for the changes. PHAs are dependent, often entirely, upon federal funds, and they have been subject to a large complex body of federal rules and guidelines that require adherence to federal standards of management and after-the-fact, federal second-guessing on the acceptable use of the federal funds, and other local administrative decisions. Fair Housing Thirty Years After Enactment. Coming during the thirty year anniversary of the 1968 Fair Housing Act, a Dallas mortgage lender agreed to provide over $2.1 billion in loans to minorities and low-income families in settlement of charges of violating fair housing laws. The company, AccuBanc Mortgage, has also committed to paying $24 million toward the closing costs. HUD estimates that about 15,000 low- and moderate-income families will receive assistance. The case was developed using testers as loan applicants. The evidence revealed differential loan determinations where the only variation was the race of the applicant. HUD gave an example of a minority applicant who was limited to an $85,000 loan, while a white tester with a less favorable financial record was approved for a $110,000 to $150,000 loan. In making its settlement, AccuBanc conceded the testing revealed its lending agents were not even meeting the lender's own standards and that the conduct may have violated fair housing laws. To make filing of discrimination charges more user friendly, HUD is encouraging filing of fair housing complaints through HUD's Internet site, http://www.hud.gov/hdiscrim.html. Of course, complaints will still be accepted on HUD's 800 hot line, by mail, or at local HUD offices. The Kerner Commission's 1968 Prediction of Two Societies, One Black, One White, Found to Exist Thirty Years Later. A report from the Milton S. Eisenhower Foundation, created to carry on the work of the Kerner Commission (appointed by President Johnson in 1968) to probe the causes of urban riots, while noting substantial racial progress, found that inequalities with troubling racial dimensions are becoming more deeply rooted in American society. On the positive side, the black middle class has grown significantly, black-owned business has expanded, and greater numbers of blacks are elected to public offices. But, the report concludes: "the rich are getting richer, the poor are getting poorer and minorities are suffering disproportionately." Examples of disparities cited in the report are that, despite our booming economy, many inner-city adults are not employed; the top 1 percent of our population have more wealth than the bottom 90 percent combined; the United States incarcerates 1.5 million prisoners, more than any other country; and one in three young African-American men are in prison, on parole, or probation. The report found that the private market has failed the inner city and that the prison system has become a symbol of discrimination. The Aftermath of Invalidation of Line-Item Veto Powers. By the time the Supreme Court invalidated the President's line-item veto powers in June 1998, he had exercised it on eighty-two items, thirty-eight of which (mostly regarding military construction) were overridden by Congress and one veto of an open enrollment season for federal employees for selecting their retirement plan was found invalid by the Justice Department as not within the ambit of the line-item veto law. The amount involved for the forty-three remaining items was $869 million. Obtaining access to these funds held in a budgetary reserve account, however, involved working through the complex and byzantine federal budget laws in order for the Office of Management and Budget (OMB) to release them for the congressionally approved purposes. At last check, the OMB had released $197 million for forty spending items, while requesting Congress to rescind a $5 million federal transfer of mineral rights to Montana because it would set a bad precedent. The difference in amounts apparently comes from the value of tax breaks and other measures not directly involving additional federal outlays. Justices Agree to Give Consideration to EU Decisions. Three justices, O'Connor, Ginsburg, and Breyer, used part of the summer to exchange views on common legal interests and judicial cooperation with the European Union. The result, as stated by Justice O'Connor, was that we "are going to be more inclined to look at decisions of [EU] courts on substantive issues . . . and perhaps use them and cite them in future decisions." "Lawyers in America may cite an EU ruling to our court to further a point, and this increases the cross-fertilization of U.S.BEU legal ideas," Justice Breyer added. O'Connor noted that globalization of economies makes it important for American judges and lawyers to learn more about European law and the decisions of the European Court in EU matters. So, back to the books, the world is shrinking even further. Otto J. Hetzel is a professor of law emeritus at Wayne State University and practices law in Washington, D.C. State & Local Law News home page | Table of Contents