Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, January 8, 1994                   TAG: 9401080178
SECTION: VIRGINIA                    PAGE: C5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: RICHMOND                                LENGTH: Medium

COURT UPHOLDS WILDER'S EFFORT TO REMOVE TERRY

"The governor's acts were not arbitrary and capricious," Justice Leroy R. Hassell wrote in the 6-1 ruling.

The court reversed Richmond Circuit Judge Robert L. Harris, who had blocked Wilder from hiring a special counsel to replace Terry as lawyer for the Virginia Retirement System.

The governor tried to remove Terry in December 1992 because she had criticized business decisions made by the Wilder-appointed VRS board of trustees and its real estate arm, RF&P Corp. She had investigated the $16 billion pension fund, but failed to find it was financially unstable.

Her office filed a lawsuit saying Wilder had no statutory or constitutional power to remove her as counsel for a state agency. Harris ruled in her favor about a month before she resigned as attorney general to pursue her unsuccessful bid for governor.

In his appeal to the Supreme Court, Wilder argued that Terry's investigation of the VRS board created a conflict of interest with her role as its counsel.

The high court declined to rule on whether a conflict existed, but said the governor may appoint special counsel for a limited time when the attorney general is unable to perform legal services.

"Even though the special counsel appointed by the governor will provide comprehensive legal services to the Virginia Retirement System, the scope of the appointment is limited in duration until such time that the purported conflict of interests abates," the ruling said.

"We recognize that the attorney general vigorously disputed the existence of any conflict of interests between her office and the Virginia Retirement System.

"However, in this instance, it is not the province of the judicial branch of government to question the motives or judgment of the head of the executive branch," Hassell wrote.

In dissent, Justice Henry H. Whiting said the power of the governor to appoint special counsel is limited to "particular legal matters or cases in which the attorney general could or should not act."

The law does not allow the governor to replace the attorney general as regular counsel for an agency, Whiting wrote.

The attorney general's office said the ruling clarified the powers of a governor and attorney general.

The court found that the governor can appoint a special counsel for a limited time, "but he cannot wholesale replace an attorney general," said Deborah Love-Bryant, chief of staff for Attorney General Stephen Rosenthal.