George Francis Bason Jr., who has been the District's federal bankruptcy judge for four years, has not been reappointed, and has suggested that he may be the victim of retribution for a ruling against the Justice Department in a controversial case last year.
Bason is being replaced as the District's federal bankruptcy judge by a Justice Department lawyer, S. Martin Teel Jr., 42, who was one of the lawyers involved in arguing the case on behalf of the Justice Department. Teel is to take over the bankruptcy court Feb. 8. Bason, who said in an interview last week that he has been provided "no rational reason" why a panel of judges recommended against his reappointment after four years on the bench, has asked for a hearing on the matter before the U.S. Court of Appeals. He declined to elaborate.
But in a strongly worded letter sent last week to U.S. Court of Appeals Chief Judge Patricia M. Wald and obtained by The Washington Post, Bason said the sole reason given him for his removal -- administrative shortcomings -- was unproven, and that ulterior motives could be at work.
"A number of lawyers and others have suggested to me that there may be a more sinister, hidden force behind what has happened," he wrote. "They suggest that somehow the Justice Department has undertaken to influence the judicial selection process as a means of retaliation against me for my recent rulings in Inslaw Inc. versus the United States Department of Justice."
Bason ruled last fall that the Justice Department had used "trickery, fraud and deceit" to attempt to force Inslaw, a Washington-based computer software developer, out of business.
"The independence of the judiciary and the separation of powers are among the glories of our form of government," Bason wrote Wald. "It is extremely important that not only should justice be done in the selection process, but that there be no appearance of impropriety. Here, that is not presently the case."
Bason, 56, who had been a local bankruptcy lawyer and professor, was appointed in 1984 to finish out the term of Judge Roger Whelan, who had resigned. Bankruptcy judges are chosen for a 14-year term by a panel composed of all the judges on the U.S. Court of Appeals for the District and six judges from the U.S. District Court. A four-member merit selection panel recommended by the chief judge of the District Court, Aubrey Robinson Jr., and appointed by Wald, screens applicants and makes recommendations in the selection process, which is open to anyone who applies.
The applicant list, which was made available by Capitol Hill sources, included several Justice Department officials, among others, but contained no attorneys in private practice.
One member of the selection panel, Wesley Williams Jr. of Covington and Burling, called the idea that the Inslaw case had a bearing on the selection process the "most preposterous question that could be posed."
Amy Brown, a spokeswoman for the Justice Department, said last week that the department had had no role in Bason's removal or Teel's selection. "Bankruptcy judges are not selected by the Justice Department," she said. "The department did not take a position on the reappointment or the appointment."
Teel declined to comment on his appointment, Bason's removal, or whether Teel would recuse himself from the Inslaw case.
Inslaw chairman William A. Hamilton and Inslaw's trial attorneys at McDermott, Will & Emery and its bankruptcy attorneys at Docter, Docter & Salus also declined comment on Bason's removal.
Capitol Hill staffers said last week that inquiries were being launched in the Senate into Bason's removal. "We will be looking into it," said a Senate Judiciary Committee source. "There seems to be an odd coincidence that the judge who was very critical of the Justice Department will not be renominated for a full term."
Bason's removal, which was formally announced last Monday, has been met with surprise among some Washington bankruptcy lawyers, several of whom said last week that he merited reappointment.
"I don't know what was the principal force," said one lawyer. "Nobody knows what happened, all we know is George is gone and there is no way George is coming back. It's the zombification of George."
Lawyers who regularly practice before Bason said that while the judge had some administrative shortcomings, he was intelligent, hard-working and that he often seemed to try to give debtors the benefit of the doubt.
However, the lawyers said, that record did not earn him the love of creditors such as banks and the District government. But lawyers who asked not to be identified said none of the shortcomings seemed to merit his removal.
"He had his defects, there's no two ways about it," said one local bankruptcy lawyer who has practiced before Bason and spoke on the condition that he not be identified. "At some times, he would be very slow to move on things and failed to push people. At other times ... he would be really right in the middle of trying to effect a settlement. There are different views as to whether that is good or not."
"It took a lot of gumption" for Bason to rule as he did on the Inslaw case, the lawyer said. "I'm frankly concerned as to whether or not there could be any relationship" between Bason's removal and the Inslaw ruling.
"Given the sensitivity of Inslaw ... the judicial council here had particular responsibility to be certain there were good and sound reasons for not reappointing him," the lawyer said. "I have not heard them."
The complicated Inslaw case began when Inslaw filed for bankruptcy protection three years ago. It then alleged that Department of Justice officials drove it into filing for Chapter 11 protection by unfairly stopping payment on a contract Inslaw had to develop a computer software program called Promis that was used to track cases in U.S. attorney's offices. It also alleged that the department attempted to stop the company from selling the software to other customers by claiming that the program belonged to the government, rather than Inslaw.
The company contended that it was the victim of a vendetta by Justice officials led by C. Madison Brewer III, who oversaw the Inslaw contract for the department's executive office for U.S. attorneys. Brewer was a former general counsel for Inslaw who had been fired by the company.
Inslaw also contended that shortly after the company filed for bankruptcy, Thomas Stanton, director of the executive office of bankruptcy trustees at the Justice Department, unsuccessfully tried to force then-U.S. bankruptcy trustee William C. White to convert Inslaw's case from Chapter 11 of the bankruptcy code, which allows a corporate reorganization, into one under Chapter 7, under which a company is liquidated.
Brewer and Stanton denied the charges, and Justice contended that it had stopped doing business with Inslaw because the company had not lived up to its contract.
But Bason issued a series of decisions against the Justice Department in the case, finally ruling last October that Brewer was biased against the company and had influenced Stanton and other Justice officials against Inslaw. The judge ruled that the department used "trickery, fraud and deceit" to appropriate the software developed by Inslaw and then tried to drive the firm out of business.
In the ruling, Bason expressed dismay at the department's failure to investigate Inslaw's charges internally. "The failure even to begin to investigate is outrageous and indefensible and constitutes an institutional decision by the Department of Justice at the highest level simply to ignore charges of impropriety," Bason wrote.
Although many of those involved in the bankruptcy judge selection declined to comment on the decision to choose Teel over Bason, others said Bason's handling of the Inslaw case had nothing to do with the decision.
The members of the four-person merit selection panel other than Williams -- District Judge Norma Holloway Johnson, George Washington University Law School Dean Jerome Barron and Thomas Papson of McKenna, Conner and Cuneo, either did not return calls or declined to discuss the panel's deliberations.
Wald declined to discuss the selection process, but in response to a question about whether the Justice Department had input into the deliberations through the merit selection panel, Wald said in a statement, "The only Justice Department officials interviewed were superiors and colleagues of Justice Department applicants and only as to those candidates' qualifications."
In his appeal to Wald, Bason said his qualifications, which include more than 30 years of legal experience, six years as a professor of law at American University, and the representation of major corporate clients such as Procter & Gamble Co. and Twentieth Century Film Fox Corp. "far exceed" those of Teel.
Teel served as law clerk to the late Judge Roger Robb of the U.S. Court of Appeals for D.C., and was hired as a trial attorney by Justice in 1971. "In that capacity he handled an extensive docket of civil cases, including representation of the U.S. as a tax creditor in bankruptcy cases," the Justice Department said in a statement. In 1980 he was appointed to the tax division's bankruptcy policy committee, and he became a section chief in the tax division in February 1982.
In the Inslaw case, Teel asked that the case be dismissed or the company be liquidated because it had failed to pay certain quarterly employee withholding taxes, he said.
In his request for a hearing on the reappointment decision, Bason wrote, "In more than 60 published opinions and in thousands of unpublished decisions over the past four years, I have exercised my mind to its fullest capacity and worked 70- to 80-hour weeks in the effort to render fair decisions in accordance with and under the law. That the overwhelming majority of these decisions have been correct is demonstrated by the fact that only about 50 appeals have been taken, and in only five of those appeals have my rulings been reversed by either the District Court or the Court of Appeals."
Bason's removal from the bankruptcy court could put into limbo Inslaw's attempt to collect damages from the Justice Department -- the company is seeking $7 million -- and to reorganize.
Bason had planned to hold a trial to set damages beginning Jan. 26, but last week, Justice Department lawyers filed a motion to postpone the trial until Feb. 23, after Teel is to take over.
In a hearing Friday, Bason told lawyers for Inslaw and Justice that granting the motion would mean leaving "one huge loose end for somebody else to pick up."
Justice Department lawyer Dean S. Cooper argued that the motion to postpone was prompted by "a blizzard of motions," depositions that needed to be taken, and other trial preparations that could not be accomplished quickly. "The fact is, we aren't ready for trial," he said.
Bason refused the motion and reset the trial date for Jan. 27.
At the same hearing, Bason asked Cooper whether his replacement, Teel, would be involved with the Inslaw case. "I am not expecting that he could hear any aspect of this case," Cooper responded. It is not clear who would handle the case if the new bankruptcy judge recuses himself.