In Re Sofaer

This case is before us on exceptions to the report and order of the Board on Professional Responsibility (the “Board”) directing Bar Counsel to issue an informal admonition to respondent for having violated Rule 1.11(a) of the District of. Columbia Rules of Professional Conduct. The rule states in relevant part:

A lawyer shall not accept other employment in connection with a matter which is the same as, or substantially related to, a matter in which the lawyer participated personally and substantially as a public officer or employee.

A hearing committee and the Board both concluded that respondent had violated this rule by undertaking to represent the government of Libya in connection with criminal and civil disputes and litigation arising from the 1988 bombing of Pan American Flight 103 over Lockerbie, Scotland, after respondent, while serving as Legal Advisor in the United States Department of State, took part personally and substantially in the government’s investigation of the bombing and in related diplomatic and legal activities.

We sustain the Board’s order and adopt its comprehensive report, which sets forth (and in turn adopts) the hearing com *627 mittee’s findings of fact, 1 correctly explains the elements of a Rule 1.11(a) violation, and demonstrates why Bar Counsel proved by clear and convincing evidence that respondent violated the Rule. We limit ourselves to the following discussion, which presupposes familiarity with the Board’s report, annexed hereto.

1. Respondent argues that in defining the “matter” in which he took part while Legal Advisor as “the legal activities flowing from the government’s efforts to address [the Pan Am 103 bombing],” the Board bundled together activities so diverse in nature as to give him no fair warning of a potential overlap when he accepted the private representation of Libya. We are not persuaded. The activities in question, including diplomatic intervention with an unnamed country, attendance at confidential briefings on the criminal investigation, and overseeing the State Department’s response to civil third-party subpoenas, all centered about a distinct historical event involving specific parties, 2 whether or not all had been identified. As the Board recognized, “The ‘matter’ is not terrorism, or even Libyan terrorism”; rather, “[t]he core of fact at the heart of each piece of legal activity is ... why and how Pan Am 103 blew •up over Lockerbie.” The contours of the bombing and the government’s investigation and related responses to it were defined sharply enough to constitute a “matter” under the Rule.

2. Respondent contends that his work as Legal Advisor concerned the Pan Am 103 bombing in ways that were too marginal, infrequent, or passive to amount to “personal and substantial” participation in the matter. The main feature of the government’s response, he asserts, was the criminal investigation conducted by the Department of Justice, not the Department of State; State’s role (hence respondent’s) consisted largely of a routine response to a third-party subpoena issued by Pan Am 3 in furtherance of its theory that the U.S. government had advance warning of the bombing but failed to act.

Respondent’s discounting of the subpoena as routine depends partly on hindsight: the district court eventually quashed the subpoena. Until then, however, the subpoena had the potential of embroiling the government in the tort litigation, and so respondent’s role in reviewing and approving the memorandum recommending the State Department’s response to the subpoena cannot be considered perfunctory. But his participation went further. After Pan Am voiced its theory of government foreknowledge at a meeting with the Secretary of State which respondent either attended or knew of, respondent’s judgment was sought on whether, or how fully, to inform the Department’s designated witness in the subpoena matter of the meeting, in preparation for his testimony. That action, as Bar Counsel points out, did not become “insubstantial” because the legal judgment was easily arrived at or because the government subsequently concluded that Pan Am’s theory of government complicity was unsupported.

Moreover, respondent’s actions take on added significance when viewed in the context of his participation, as one of a small number of senior State Department officials, in confidential oral and written briefings which periodically included information about the progress of the criminal investigation and related diplomatic actions. The fact that respondent played no role in the investigation itself and was not shown to have recommended or taken action based on the briefings 4 is not critical. As the Board explained, *628 “Respondent was much more than the passive recipient of general agency information. As chief legal officer of the State Department, [he] was kept abreast of the progress of the investigation and the diplomatic efforts in response to the bombing precisely so that he could provide legal advice and perform legal duties concerning the bombing when called upon to do so.”

All told, respondent’s active participation in the Pan Am 103 matter bears no resemblance to the merely peripheral or formal involvement in a matter which the Rule does not encompass. See Opinion No. 84, D.C. Bar Legal Ethics Committee (1980) (interpreting former DR 9-101).

Respondent’s assertion that by emphasizing his receipt of confidential information from the briefings the Board confused Rule 1.11(a) with Rule 1.6 (restricting use of client confidences or secrets) is mistaken. While he is correct that “no one has ever suggested any improper disclosure of confidences by Respondent,” Rule 1.11(a) bars participation in overlapping government and private matters where “it is reasonable to infer counsel may have received information during the first representation that might be useful to the second”; “the ‘actual receipt of ... information,’ ” and hence disclosure of it, is immaterial. Brown v. District of Columbia Bd. of Zoning Adjustment, 486 A.2d 37, 50 (D.C.1984) (en banc) (citations omitted).

3. Rule 1.11(a) prohibits a lawyer from accepting employment in connection with a matter “the same as, or substantially related to,” a matter in which he or she took part as a public officer or employee. The inquiry is a practical one asking whether the two matters substantially overlap. 5 Respondent insists that he stayed clear of that overlap by restricting the terms of his agreement to represent Libya so as to “assum[e] Libya’s culpability for the [Pan Am 103] bombing.” A lawyer may, of course, limit the objectives of a representation with client consent. Rule 1.2(e). But respondent’s retainer agreement exemplifies why, in our view, limiting the private representation rarely will succeed in avoiding the convergence addressed by Rule 1.11(a). While stating that “[the firm’s] efforts will not include substantial activities as litigators but rather would be limited to activities associated with agreed upon measures, including consensual dispositions,” the agreement emphasized that “[m]easures will be taken only with your [i. e., Libya’s] prior consent, and without admission of liability ” (emphasis added). The proposed activities included “investigating the facts and legal proceedings, preparing legal analyses, providing legal advice and proposing legal steps to deal with” the “ongoing civil and criminal disputes and litigation” stemming from the destruction of Pan Am 103 — all clearly features of a comprehensive attorney-client relationship. We do not question the sincerity of respondent’s belief that the representation could be insulated, factually and ethically, from the investigation and diplomatic efforts of which he had been part. The “substantially related” test by its terms, however, is meant to induce a former government lawyer considering a representation to err well on the side of caution. Respondent did not do so. 6

*629 4. Respondent points to the exact words “accept other employment” in the Rule and makes an argument which neither the Board nor the hearing committee addressed. To conclude that he had accepted employment on behalf of Libya, he maintains, the Board had to find “that [his] conditional agreement to represent Libya was capable of being legally carried out,” which required that the firm obtain the necessary OFAC authorization 7 for the representation — a critical part of which was not received before he and his film withdrew from the representation. Bar Counsel counters that the reason neither the Board nor the hearing committee considered this argument is that it was not raised until now and thus has been waived. See, e.g., In re James, 452 A.2d 163, 168 (D.C.1982). We have examined all of respondent’s arguments to the hearing committee and the Board and can, indeed, find none directed to “what constitutes ‘accepting] other employment’ ” (Br. for Resp. at 38). His arguments instead focused entirely upon the meaning and application of the terms “matter,” “substantially related,” and “participated personally and substantially.” We thus would be well within our authority to disregard the present argument.

In any event, we reject it on the merits. Respondent did not just conditionally agree to represent Libya — the representation actually began after four things took place: OFAC issued a specific license authorizing respondent’s firm to receive fees and expenses in connection with the pending criminal and civil cases affecting Libya; the firm received a letter of credit from Bank Credit Suisse for 82.5 million, ensuring payment of Libya’s legal fees; the firm issued a press release announcing the representation and its receipt of the license from OFAC; and the firm received the first $250,000 installment of the legal fees. Thereafter, respondent and the firm performed the services summarized in paragraph 52 of the Board’s report which included, but were not limited to, resolving continued differences with OFAC as to the correct license needed to carry on the representation. In these circumstances, it would be a wholly artificial reading of the Rule to say that respondent had not “accepted the] employment” before withdrawing from it two weeks later for reasons unrelated to OFAC permission. 8

5. Joined by amici curiae who are former government officials, respondent urges that finding an ethical violation in this case will deter District of Columbia lawyers from entering the government or serving for long once there, lest Rule 1.11(a) trip them up after they enter private practice. We are sensitive to the concern, already voiced in Broum, supra, that over-zealous application of the revolving-door rule would be “at the cost of creating an insular, permanent legal bureaucracy.” 486 A.2d at 47. But that concern is misplaced here. Our finding that respondent violated Rule 1.11(a) is well within the heartland of Rule l.ll(a)’s application. Further, Bar Counsel aptly states why no lawyer need find himself inadvertently in the position of risk that respondent and amicus hypothesize:

A former government lawyer in the Respondent’s position is free to solicit the views of his or her former agency concerning the proposed private legal undertaking (which the Respondent deliberately elected not to do in this case), or to consult with ethics advisers in his or her law firm (which, again, the Respondent seems not to have done concerning Rule 1.11) or with the Legal Ethics Committee of the Bar (which the Respondent never suggested he did). If, while in government service or while contemplating entry into such service, the attorney deliberates the prospect that Rule 1.11 will narrow somewhat the career choices and client selections available to the attorney following departure from the government, then the Rule will have served one of its salutary objectives.

We affirm the Board’s conclusion that respondent violated Rule 1.11(a) and the *630 Board’s order directing Bar Counsel to issue an informal admonition.

So ordered.

APPENDIX.

DISTRICT OF COLUMBIA COURT OF APPEALS BOARD ON PROFESSIONAL RESPONSIBILITY

In the Matter of:

ABRAHAM D. SOFAER, ESQUIRE, Respondent.

Bar Docket No. 280-93

ORDER OF THE BOARD ON PROFESSIONAL RESPONSIBILITY

I. INTRODUCTION

On December 21, 1988, Pan American Flight 103 was blown up over Lockerbie, Scotland, killing everyone on board and 11 people in the town below. The United States undertook an intensive investigation to identify the perpetrators of this terrorist act, and the families of the victims sued Pan Am for damages arising from the bombing. At the time of the bombing and the beginning of the investigation, Respondent was the Legal Adviser in the United States Department of State. In June 1990, Respondent left the State Department to join the Washington office of the law firm of Hughes Hubbard & Reed (HH & R). In November 1991, two Libyans were indicted by a federal grand jury for the bombing.

In July 1993, Respondent and HH & R were retained to represent Libya in connection with criminal and civil disputes and litigation arising from the Pan Am -103 bombing. Respondent intended to seek consensual monetary settlements with the families of the victims and negotiate arrangements by which Libya would surrender the two indicted Libyans for trial by the United States and the United Kingdom in a mutually agreeable venue. In mid-July 1993, soon after Respondent’s retention by Libya became public, he and HH & R withdrew from the representation, stating that the adverse public and governmental reaction made it impossible to accomplish the purposes for which they were retained.

Shortly thereafter, Bar Counsel initiated an investigation into Respondent’s possible violation of District of Columbia Rule of Professional Conduct 1.11(a). This rule prohibits a former government lawyer from representing a party in connection with a matter that is the same as or substantially related to a matter in which the former government lawyer participated personally and substantially while working in the government. On July 25, 1995, Bar Counsel charged Respondent with violating this rule.

Hearing Committee Number One conducted an evidentiary hearing on December 5 and 6, 1995. 1 The Hearing Committee concluded, over the dissent of the public member, that Respondent’s representation of Libya constituted a violation of Rule 1.11(a). The Committee recommended that Respondent receive an informal admonition for his misconduct. The Hearing Committee found that “[m]ost of the facts in this case are not in dispute.” Hearing Committee Report at 5. What is hotly contested before the Board on Respondent’s exception to the Hearing Committee’s Report is whether these facts prove a violation of Rule 1.11(a). While our analysis does not follow precisely the same path as the Hearing Committee’s, it reaches the same conclusion. We adopt the Hearing Committee’s very thorough Findings of Fact virtually without change.

II. FINDINGS OF FACT

1. Respondent is a member of the District of Columbia Bar, having been admitted on November 22,1989.

A. The Tripoli Bombing

2. Respondent served as the State Department’s Legal Adviser from June 1985 to June 15, 1990. In this position, he was the State Department’s chief legal counselor and supervised the activities of the State Depart *631 ment’s Office of the Legal Adviser. Respondent and the other attorneys in his office provided legal advice to the Secretary of State and to other officials in the State Department and the United States government.

3. While Respondent was the Legal Adviser, the United States government was grappling with the appropriate response to certain acts of terrorism connected to the Libyan government. These acts included the December 1985 bombings and terrorist attacks of the Rome, Italy, and Vienna, Austria airports. Respondent met periodically with a high-level, interagency group of lawyers to consider legal issues related to the possible use of force against Libya in retaliation for its sponsorship of these terrorist acts. Other lawyers in this group included the Counsel to the President, the Legal Adviser to the National Security Council, the General Counsel of the Central Intelligence Agency, the General Counsel of the Department of Defense, the Legal Counsel to the Chair of the Joint Chiefs of Staff, and the Assistant Attorney General for the Office of Legal Counsel in the Department of Justice.

4. On April 5,1986, a bomb exploded in a discotheque in Berlin, Germany, killing several United States military personnel. The United States government learned that this bombing was also connected to the Libyan government. As a result, the United States decided to take retaliatory action against Libya. Respondent met with the inter-agency group of high-level government lawyers to provide legal advice to administration officials on the sufficiency of the evidence linking Libya to the Berlin discotheque bombing, the necessity for the use of force against Libya, the proportionality of the proposed response, and the applicability of the War Powers Resolution to the proposed retaliation.

5. While participating in these discussions, Respondent learned details of communication intercepts linking the Berlin discotheque bombing to Libya. He also learned about passports seized from the Abu-Nidal terrorists who had committed the Rome and Vienna airport bombings, which also connected the terrorists to the Libyan government. Respondent was informed of other possible acts of terrorism that Libya was planning. Finally, Respondent was informed about potential Libyan targets that the United States was considering bombing.

6. On April 15, 1986, the United States government bombed Tripoli, the capital of Libya.

7. Much of the classified information that Respondent learned before the Tripoli bombing about Libyan terrorism was publicly disclosed by the United States government after the bombing. Respondent was not sure in his testimony at the hearing in this matter if all the information he learned was disclosed. He testified that he thought that all of the significant information, but not the way the intelligence was gathered, was made public. II Tr. 18-19, 40-41; RX6; RX 74. Respondent himself published an article, cleared by United States government authorities, concerning Libya’s terrorist activities. RX 7.

B. The Pan Am 103 Bombing

8. On December 21,1988, Pan Am Flight 103, en route from London, England to New York, New York, was blown apart over Lock-erbie, Scotland by a plastic explosive hidden in a radio cassette player placed inside a suitcase on the flight. All 289 persons on board and 11 persons in Lockerbie were killed.

1. The Investigation

9. The Pan Am 103 bombing sparked a massive hunt by the United States and the United Kingdom for the perpetrators of this heinous act. As the State Department’s Legal Adviser, Respondent received the State Department’s daily written briefing report about sensitive or important matters. This classified report was provided to approximately 25 top officials in the State Department. The report periodically contained information about the progress of the United States government’s investigation concerning the bombing, which was ongoing during the remainder of Respondent’s State Department service. I Tr. 191, 206-07; II Tr. 95-96,115-16; BX 40; BX 42. Respondent also received oral briefings about matters of in *632 terest in the State Department. These briefings were provided by State Department Bureau of Intelligence and Research officials to top State Department officials, including the Secretary of State, the Deputy Secretary, Under-Secretaries, a number of Assistant Secretaries, and the Legal Adviser. Respondent testified that these oral briefings “from time to time” included information about the progress of the Pan Am 103 investigation. II Tr. 42-44, 87-88; BX 40 at 2; BX 42. Between the time of the Pan Am 103 bombing and his departure from the State Department, Respondent also had access to classified communications and cables relating to the progress of the investigation and diplomatic efforts concerning the bombing. BX 25; BX 37; BX 39 at 4. The documents to which he had access remain classified, and Respondent did not have a specific recollection of their exact content beyond information that was published in newspapers at the time of the investigation.

10. While Respondent was the Legal Adviser, the United States government’s investigation into the Pan Am 103 bombing focused not on Libya but on two other countries. The United States initially believed the chief suspects in the bombing were the Iranian Revolutionary Guard Corps in Iran or the Popular Front for the Liberation of Palestine in Syria, or both. Iran and Syria were also suspected of supporting these terrorist groups in committing the bombing. Iran was suspected partly because a United States Navy ship had shot down an Iran civilian aircraft over the Gulf of Iran in 1988. I Tr. 207-08; II Tr. 32-33; RX 12. In the classified briefings Respondent received as the Legal Adviser, he was informed of the evidentiary basis for suspecting that one or both of these two entities, and Iran or Syria, had sponsored the Pan Am 103 bombing. II Tr. 46-48, 54-55; II Tr. 205-07; BX 37; BX 39 at 4; RX 61.

11. Sometime after the Pan Am 103 bombing, Respondent participated in a diplomatic exchange with a country other than Libya, “occasioned by the Pan Am 103 bombing,” relating to that country’s responsibility for terrorist activity generally. BX 39 at 4. Respondent communicated directly with that country to persuade it to stop its terrorist activities. The details of that exchange, including the country involved, remain classified and were not disclosed at the hearing.

2. The Pan Am 1.08 Civil Litigation and Non-Party Subpoenas

12. In 1989, families of the victims of the Pan Am 103 bombing filed wrongful death lawsuits against Pan Am and other defendants in several federal courts. In April 1989, the federal Judicial Panel on Multidistrict Litigation consolidated for pretrial purposes the federal lawsuits into one proceeding, In re Air Disaster at Lockerbie, Scotland, before the United States District Court for the Eastern District of New York (Platt, J.) (hereafter “the Civil Case”).

13. On September 27, 1989, Pan Am served non-party subpoenas on the State Department and five other government agencies, seeking documents and the identification of knowledgeable witnesses relating to a theory by Pan Am that the United States government had advance warning of the Pan Am 103 bombing but failed to take adequate steps to prevent it. BX 1; BX 2; BX 3; RX Í3.

14. On November 21, 1989, the Justice Department, which represented government agencies on subpoena matters such as this, moved to quash the subpoenas because of its on-going criminal investigation into the bombing. On December 29,1989, the Justice Department wrote to all six agencies asking for their positions on the disclosure of their documents responsive to the subpoenas. BX 1. The letter pointed out that the Justice Department would respond to the subpoenas on behalf of all six agencies. The letter stated that the Justice Department wanted the agencies’ position on disclosure under their “administrative or housekeeping regulations.” The letter also noted that all the agencies believed that Pan Am’s allegations were unfounded. Id.

15. On January 31, 1990, the Justice Department again wrote to the six agencies, providing a report on the status of its motion to quash the subpoenas and describing in *633 detail Pan Am’s theory of United States government liability for the bombing. The substance of Pan Am’s theory, as described in this letter, was that the United States government, through the CIA, received several specific warnings in the days just before the Pan Am 103 bombing about plans for an explosive to be placed on a Pan Am flight. Allegedly, some of the warnings and tips identified as the target of the attack the specific Pan Am 103 flight that was bombed. BX 2.

16. An attorney in the State Department’s Office of the Legal Adviser drafted a memorandum recommending the State Department’s response to the subpoena. The draft memorandum was to be transmitted from Respondent, as the Legal Adviser, and Mr. Busby, as the head of the State Department’s Office on Counterterrorism, to Edward Perkins, the State Department’s Director General, who responds to such subpoenas on behalf of the State Department. The memorandum noted that a search of State Department files revealed approximately 400 documents responsive to Pan Am’s request, but many of these documents originated with other agencies and would have to be referred to these agencies for their position on release. The memorandum stated that approximately half of the documents were classified and therefore could not be released under the “state secrets” privilege. -The memorandum also reported that the Justice Department would ask for the documents to be withheld if it determined that their production would prejudice the criminal investigation. Finally, the memorandum recommended that Frank Moss, an official in the State Department’s Office on Counterterrorism, should be designated as the appropriate State Department witness to testify on the events described in the responsive documents. Attached to the memorandum were the Pan Am subpoena and the letters from the Justice Department concerning the subpoena, but the responsive documents were not attached.

17. Respondent read the memorandum, dated January 31, 1990, and its attachments. He did not believe that he saw any of the documents that were responsive to the subpoena. After reviewing the memorandum and attachments, Respondent approved the memorandum by initialing it. The memorandum was also signed by Mr. Busby’s deputy on his behalf and sent to Mr. Perkins. I Tr. 33-34, 39^0, 194-95; II Tr. 49; BX 3; BX 41 at ¶ 5.

18. Both Bar Counsel and Respondent advanced much testimony at the hearing relating to whether Respondent’s review and approval of this memorandum was, as Respondent claimed, routine and unimportant or, as Bar Counsel argued, substantial and significant. Respondent testified that because he believed Pan Am’s allegations were meritless, he did not give much consideration to the contents of the memorandum. He testified that he considered the memorandum to be a routine response to a subpoena request for documents. II Tr. 124-25. He also testified that, as Legal Adviser, he approved “a couple of dozen” memoranda per year dealing with State Department responses to subpoenas, and he perfunctorily approved this one as well. Id.; II Tr. 106.

19. Bar Counsel provided evidence, however, that Respondent had instituted a policy that all documents from his office going to an Assistant Secretary or higher official in the State Department had to be reviewed by him, and this memorandum fit into that category. I Tr. 197-98; II Tr. 105-06; BX 41 at 115; RX 64 at ¶ 12. Respondent enforced this policy because he wanted to be aware of and involved in advice given by his office to higher-level officials in the State Department. II Tr. 176-80. Respondent also admitted that on rare occasions, he returned a memorandum to his staff when he disagreed with its contents. II Tr. 106. Moreover, while Respondent may have approved dozens of documents dealing with the State Department’s responses to subpoenas, this response was lengthier, related to a more complicated third party case, involved more documents than normal, concerned sensitive intelligence matters, and related to a criminal investigation being pursued by the Department of Justice. II Tr. 157, 173-76. Therefore, the Hearing Committee concluded that “Respon *634 dent’s review and signing of this memorandum constituted the exercise of his discretion to approve the legal advice in the memorandum and was not an insignificant or ministerial act.” Hearing Committee Report at 13.

3. The Meeting with Pan Am and the Busby Consultation

20. In the fall of 1989 a meeting was held among Secretary of State James Baker, Mr. Busby, and Thomas Plaskett, the Chief Executive Officer of Pan Am. Respondent testified that he did not know whether he attended the meeting, although he knew he was informed about the meeting by Mr. Busby. I Tr. 202-04. But see II Tr. Ill (“I did recall the Pan Am theory and I did recall being in a meeting”); BX 39 at 5 (“I do recall, and may have attended [the Baker/Plaskett meeting]”); BX 41 at ¶ 2 (“I did recollect having attended a meeting with representatives of Pari Am”). The purpose of the meeting was for Mr. Plaskett to apprise the Secretary of State about the allegation, discussed above, that the United States government may have had advance warning of the Pan Am 103 bombing and therefore shared some culpability for it. Respondent was also informed after the meeting that the United States government investigated the allegations raised by Pan Am and believed them to be meritless.

21. When the State Department received Pan Am’s non-party subpoena, Mr. Busby asked Respondent if Frank Moss, the State Department official who was designated as the State Department’s knowledgeable witness in response to the subpoena, should also be informed about the information in the State Department’s possession concerning Pan Am’s theories and the Baker/Plaskett meeting. Mr. Busby had told only a limited number of government officials about the substance of the Baker/Plaskett meeting because of the sensitivity of the subject and the on-going investigation into the bombing. But by January 1990, Pan Am’s theory had been discounted by the United States government. Respondent learned that the State Department and other government agencies had investigated Pan Am’s contentions and believed them to be baseless. Respondent testified that he did not think it would do any harm to notify Mr. Moss about the substance of the Baker/Plaskett meeting. Respondent therefore advised Mr. Busby that Mr. Moss should be informed of the discussions at the meeting.

Jf.. Subsequent Events in the Pan Am 103 Investigation and Litigation

a. Attention Focuses on Libya

22. Sometime during June 1990, the United States government uncovered information linking Libya to the Pan Am 103 bombing. Investigators determined that the bomb that destroyed Pan Am 103 was activated by a sophisticated electronic timer that had been delivered to Libyan intelligence officials. This timer was identical to other timers used by Libyan terrorists who had been captured in 1988. Therefore, in June 1990, the United States government began to focus its investigation on Libya.

23. The evidence at the hearing indicates that Respondent did not learn of the new information linking Libya to the Pan Am 103 bombing while he was the Legal Adviser. He left the State Department to join HH & R on June 15, 1990. Although it is unclear exactly when in June 1990 the United States learned of the new evidence pointing to Libya, the Hearing Committee found that “Respondent testified forcefully and credibly that he did not know about it while at the State Department. He said he learned about the evidence in November 1991, after he had left the State Department, when the indictment of two Libyans for the bombing was announced.” Hearing Committee Report at 16. Respondent’s testimony was supported by an article he wrote for The Washington Post in July 1990, which suggested that Iran was responsible for the Pan Am 103 bombing. RX 9.

b. The Civil Case

24. On December 12, 1990, the United Stated District Court overseeing the Pan Am 103 Civil Case granted the Justice Department’s motion to quash Pan Am’s non-party subpoenas, including the subpoena to the *635 State Department that was the subject of Respondent’s January 31, 1990, memorandum. Pan Am then filed a motion for leave to implead the United States as a third-party defendant. On December 17,1990, the United States opposed Pan Am’s motion, and on April 24, 1992, the court rejected Pan Am’s attempt to implead the United States and refused to permit an action to proceed against the United States. On July 10,1992, after an eleven-week jury trial, the plaintiffs in the Civil Case won a judgment holding that Pan Am had engaged in willful misconduct that was a substantial factor in causing the bombing. The amount of the damages was not decided. See In re Air Disaster at Lockerbie, Scotland, 811 F.Supp. 89, 90 (E.D.N.Y.1993). Subsequently, damages were decided for three passenger plaintiffs. Id.

c. The Criminal Case

25. As noted above, on November 13, 1991, the United States indicted two Libyans for planting the bomb that destroyed Pan Am 103. The indictments were returned in the United States District Court for the District of Columbia (United States v. Ali Al Megrahi) (hereafter, the “Criminal Case”).

26. On November 24, 1991, the United States and the United Kingdom proposed a joint declaration for United Nations approval, calling for the Libyan government to surrender the two indicted Libyans for trial, to disclose all it knew about the bombing, and to pay appropriate compensation for the bombing. On January 21, 1992, the United Nations Security Council adopted a resolution condemning the bombing and urging Libya to cooperate fully in establishing responsibility for the bombing. On March 31, 1992, because Libya did not respond to the United Nations demand, the United Nations called for the imposition of sanctions on Libya.

C. Respondent and HH & R Seek to Represent Libya

27. On June 15,1990, Respondent left the State Department to become a partner in the Washington office of HH & R.

1. Negotiations with Libya

28. In late 1992, Graham Wisner, a Washington, D.C. lawyer who knew Respondent, asked Respondent if he was interested in assisting Wisner in representing Libya in connection with legal proceedings in the United States arising from the Pan Am 103 bombing. Respondent replied that he would not defend Libya for anything it had done, but if Libya was looking for a way to satisfy its obligations under the United Nations resolutions, he would be interested in representing Libya for that purpose. I Tr. 210-13.

29. ’ Wisner told Respondent that the Libyans were interested in having Respondent write a proposal concerning his potential representation of Libya. I Tr. 218. Respondent drafted a letter, dated January 7, 1993, proposing a representation of Libya “in connection with on-going civil and criminal disputes and litigation relating to the destruction of Pan Am 103.” BX 7 at 1; I Tr. 218. The letter, addressed “To Whom it May Concern,” stated that HH & R was prepared to assist “in resolving by consensual negotiations all pending and potential civil and criminal litigations and other legal proceedings” relating to the Pan Am 103 bombing. BX 7 at 1. HH & R proposed to commence work on this representation when Libya placed a retainer of $3 million into HH & R’s escrow account in a Swiss bank, payable to HH & R for its work at the rate of $250,000 a month. Id.

30. Respondent delivered this proposal to Wisner, who gave it to “intermediaries” of the Libyan government. I Tr. 218. Respondent also met twice with representatives of the Libyan government in Geneva to discuss the proposed representation. I Tr. 219, 250-51; II Tr. 97-98.

2. The Representation Agreement

31. On April 14, 1993, Respondent and a representative of the Libyan government signed two letters, similar in terms to the January 7 letter, that established the agreement by which Respondent and HH & R would represent Libya in connection with civil and criminal litigation relating to the Pan Am 103 bombing. The letters were *636 addressed to “The Committee for the Case of Lockerbie.” This committee acted on behalf of the Libyan government and consisted of the Libyan Ambassador to Morocco, the Libyan Ambassador to Tunisia, the Libyan Minister of Foreign Affairs, and the Libyan Chief of Foreign Security. RX 4; BX 10; II Tr. 78-81.

32. The terms of the April 14 representation agreement specified that HH & R:

would represent you [sic] committee in connection with on-going civil and criminal disputes and litigation relating to the destruction of Pan Am 103_ We are prepared to assist the relevant parties regarding the above incident by investigating the facts and legal proceedings, preparing legal analyses, providing legal advice and proposing legal steps to deal with this matter. Our efforts will not include substantial activities as litigators but rather would be limited to activities associated with agreed upon measures, including consensual dispositions. Measures will be taken only with your prior consent, and without admission of liability.

BX 10 at 1. The letter went on to point out that “[o]ur firm has excellent litigators, including former prosecutors, former State officials, and lawyers familiar with aircraft litigation, upon all of whose talents we would draw as necessary.” Id. at 2. The agreement also stated that HH & R was unwilling to engage in any activities that would require it to register under the Foreign Agents Registration Act (FARA). Id. at 1. This meant that HH & R would limit its activities to legal work rather than any lobbying on behalf of Libya.

33. The financial terms of the agreement specified that Libya would deposit a $3 million retainer into a mutually agreeable Swiss bank account for one year’s work by HH & R. The retainer would be disbursed to HH & R at the rate of $250,000 a month. The representation would begin when the Libyans provided a letter of credit to HH & R’s Swiss bank account ensuring payment of the agreed-upon fees and when HH & R confirmed that it had obtained a license from the Treasury Department’s Office of Foreign Assets Control (OFAC) permitting HH & R to receive payments from Libya legally. Id.; I Tr. 219-20.

34. Respondent testified that the two specific objectives of the representation were: 1) to attempt to resolve the extradition request for the two indicted Libyans in a manner acceptable to the United States, the United Kingdom, and the Libyan government; and 2) to seek consensual settlements of the civil litigation arising from the Pan Am 103 bombing in a manner satisfactory to the plaintiffs, their counsel, the court, and the Libyans. I Tr. 213-19; BX 12A; BX 27. Another lawyer at HH & R, Mr. Gerson, described Respondent’s contemplated role as “Kissingeri-an” — achieving a “grand scale” settlement providing compensation to families of the victims in fulfillment of the United Nations resolutions.

35. Respondent testified that “acting as Libya’s lawyer” he intended to work out an arrangement with the Department of Justice to have the two indicted Libyans produced to an acceptable venue for trial. I Tr. 217; II Tr. 62-63. Respondent thought that the Libyans, the United States, and the United Kingdom might agree that the trial of the Libyans could proceed in a forum other than the United States, such as Scotland. II Tr. 62-63; II Tr. 261. Respondent stated that he specifically declined to represent the two indicted Libyans in the defense of their criminal case or to represent Libya in defending itself in connection with the bombing. I Tr. 93-95,217-18; BX27.

36. Respondent also testified that he contemplated Libya making an ex gratia payment to the families of the victims of the bombing, that is, a payment by Libya without any admission of fault. I Tr. 214-18; II Tr. 63-64. While Respondent was Legal Adviser, he had successfully obtained ex gratia payments from Iraq for the families of the servicemen killed or injured on the USS Stark, a United States Navy ship that had been attacked by an Iraqi aircraft. I Tr. 183-85; RX 74 at ¶ 5. Respondent described the ex gratia payment by Iraq in the Stark ease:

You accept the responsibility to pay for the damage without saying that you were lía- *637 ble in a tech — you know, like Iraq did in Stark. Iraq said this was a mistake, we didn’t — we wouldn’t be — we wouldn’t be responsible, if you had a trial, you wouldn’t be able to find us responsible, but we’re paying you anyway; accept responsibility in that sense at least, yes.

I Tr. 214 (emphasis added).

37. Respondent had in mind a figure of $1 billion as an appropriate ex gratia payment from Libya for the Pan Am 103 bombing. II Tr. 63-64. Although Libya was not a party to the Civil Case, Respondent thought that the Civil Case could be a “possible vehicle” for making payments to the families of the victims. II Tr. 64-66. Respondent also knew that Pan Am would seek damages from Libya from the proposed ex gratia payment, but Respondent was not contemplating that Libya would agree to make any such payment to Pan Am. II Tr. 64.

D. Preparations to Represent Libya

1. The OFAC License

38. In preparation for their representation of Libya, Respondent and HH & R took several steps. First, they attempted to obtain the required OFAC license. OFAC administers the economic sanctions imposed on foreign countries by the United States, including 1986 sanctions on Libya. Under those sanctions, any economic transaction with Libya was prohibited unless OFAC granted a specific license to engage in the transaction or the transaction was authorized by a general license because it fit within a general category of acceptable transactions. Providing legal advice to Libya on the United States legal system was covered by a general license. Receiving payments from Libya for legal services required a specific license.

39. On March 11, 1993, an attorney at HH & R spoke to Richard Newcomb, the director of OFAC, regarding HH & R’s possible representation of Libya. Newcomb stated that “lobbying” to settle the Civil Case would not fall within OFAC’s general exception for legal services. Because the exact scope of HH & R’s Libyan representation was not clear at the time, Newcomb suggested that HH & R provide a written description of what it intended to do for Libya. BX 8.

40. On April 19, 1993, after Respondent and the Libyan representative signed the representation agreements described in paragraphs 31-33 above, an HH & R attorney advised OFAC in writing that HH & R would be providing “[Ilegal representation to the Government of Libya in connection with [the Criminal Case and the Civil Case].” BX 11. Respondent and HH & R believed that it could provide such legal services under a general license, but that they needed a specific license to be paid by Libya for their services. HH & R’s letter therefore requested a specific license for receipt of payments from Libya for legal services. BX 11.

41. On May 10, 1993, OFAC issued a specific license to HH & R to receive payments of fees and expenses in connection with the Criminal Case, the Civil Case, and any other United States court cases relevant to the Pan Am 103 litigation. OFAC also required HH & R to file a copy of the specific license with “the court.” BX 12.

2. Ethical Issues Facing HH & R

a. Mr. Gerson Withdraws From HH & R

42. Respondent and HH & R were aware of an ethical issue related to their proposed representation of Libya because another attorney at HH & R, Allan Gerson, represented a plaintiff who was seeking compensation from Libya for the Pan Am 103 bombing. I Tr. 237-39. Mr. Gerson, a law professor on leave from his university, had been working at HH & R in an “of counsel” capacity since January 1991. On July 1, 1992, Mr. Gerson had written an article in The New York Times proposing adoption of a United Nations resolution establishing an international claims commission to administer compensation by Libya for the families of the Pan Am 103 victims. As a result of his article, two men whose relatives were killed in the bombing, Bruce Smith and Paul Hudson, retained Mr. Gerson and HH & R to seek compensation from Libya through the establishment of the United Nations commission. By early *638 1993, Mr. Gerson began contemplating suing Libya in the United Kingdom on behalf of his clients.

43. On January 4, 1993, Respondent told Mr. Gerson that Respondent and HH & R were considering representing Libya in connection with the Pan Am 103 bombing. Respondent informed Mr. Gerson that they should not discuss Mr. Gerson’s representation of the Pan Am 103 plaintiffs because Mr. Gerson “might be on the other side” if Responde