George Terwilliger, a white-collar crime defense attorney and the second-ranking Justice official in the early 1990s, was on the White House's short list last month to replace Gonzales.
Investigators are look into allegations that Gonzales lied to lawmakers and illegally allowed politics to influence hiring and firing at the department.
Terwilliger said Gonzales, a close friend of the president's and a former Texas Supreme Court justice, maintains he did nothing wrong or illegal, and that hiring an attorney should not signal any guilt.
"It would really be unfair to individuals who are smart enough to get themselves a lawyer to draw some inference that they need a lawyer because they did something wrong," Terwilliger said in an Associated Press interview.
"Nor has he been accused of wrongdoing. Investigations are conducted to find the facts. And the facts will show that Judge Gonzales acted honorably in all circumstances while holding positions of great responsibility and importance to maintaining the safety of the country."
Gonzales resigned in September after months of criticism about his leadership and honesty. President Bush has nominated a retired federal judge, Michael Mukasey, to lead the department. The Senate Judiciary Committee has scheduled hearings on the nomination beginning Oct. 17.
Gonzales, a native Texan, still lives in the Washington area, in part because his three sons are enrolled in local schools. Gonzales' hiring of Terwilliger was first reported Wednesday by Newsweek.
The department's inspector general and Office of Professional Responsibility are investigating Gonzales and other former officials. The inquiry first focused on whether the firings last year of eight federal prosecutors were politically motivated.
The internal probe, which began in March, has expanded to include whether Gonzales inappropriately discussed the ousters in a meeting that former aide Monica Goodling later said made her feel "uncomfortable." Her account led to questions of whether Gonzales was coaching Goodling, which could amount to witness tampering.
Gonzales has said he was merely trying to comfort Goodling at an awkward time.
Investigators also are looking into allegations that Goodling, and possibly other one-time aides, let politics play a part in hiring career prosecutors, in violation of the law.
Additionally, days after Gonzales announced his resignation in August, investigators confirmed they were examining whether Gonzales lied or otherwise misled Congress in sworn testimony about the Bush administration's domestic terrorist spying program.
At a contentious hearing in July before the Senate Judiciary Committee, Gonzales denied that he tried in 2004, as White House counsel, to push the department into approving that program despite concerns it was illegal.
Gonzales said the March 2004 dispute - which played out in part at the hospital bedside of a groggy Attorney General John Ashcroft - focused on "other intelligence activities." Ashcroft was recovering from surgery at the time. Gonzales succeeded him in 2005. But Gonzales' testimony was contradicted by FBI Director Robert S. Mueller and other former department officials.
Congress also is investigating the U.S. attorney firings and concerns about the surveillance program.
Terwilliger said he expects most, if not all, questions for Gonzales to come from the department. "I'll be assisting him in connection with his continued cooperation with the Justice Department," Terwilliger said.
Terwilliger was widely believed to be among the top three contenders for the attorney general post after Gonzales resigned. He spent 15 years at the department and eventually became deputy attorney general, the No. 2 official, under the first President Bush.
Terwilliger was among the legal experts who helped George W. Bush during the Florida recount in the contested presidential election of 2000.
By Lara Jakes Jordan