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  •   Investigators Likely to Urge Babbitt Probe

    By Roberto Suro
    Washington Post Staff Writer
    Saturday, January 17, 1998; Page A06

    Justice Department investigators have not been able to resolve allegations that Interior Secretary Bruce Babbitt lied to Congress about a campaign fund-raising controversy, and expect to recommend that Attorney General Janet Reno seek an independent counsel in the matter, department officials said.

    So far investigators have not turned up solid evidence that Babbitt intentionally perjured himself or that he had anything to lie about. But officials said the inquiry thus far has produced unanswered questions, and that is enough to trigger an independent counsel investigation.

    A recommendation to Reno could be drafted by the end of the month, and then she will have until Feb. 11 to make a final decision. That date marks the end of a 90-day preliminary investigation into the allegations against Babbitt. Under the Independent Counsel Act, Reno is obliged to seek an outside prosecutor at the end of that period unless she can show there are no reasonable grounds for further investigation.

    Babbitt has offered several contradictory accounts of his role in a 1995 Interior Department decision to kill an Indian casino project. The casino was opposed by rival tribes that contributed nearly $300,000 to the Democratic Party.

    Although the recommendation to seek an independent counsel would only concern the truthfulness of Babbitt's statements, once such an outside investigation is launched it could encompass much of the multifaceted campaign finance scandal that has developed from the 1996 Clinton-Gore reelection effort.

    "This could start as something very limited, but once it goes to an independent counsel it will be very hard to restrict," said a senior federal official.

    As they enter the final phase of the Babbitt probe, top investigators are close to concluding that there is no clear proof of criminal wrongdoing in the handling of the Indian casino license. This makes Babbitt's admitted "lapses" in his accounts of the matter all the more puzzling, investigators said.

    At issue is the Interior Department's decision in July 1995 to reject an application from three Chippewa tribes to convert a failing dog track in Hudson, Wis., into a tribal casino. The move was opposed by five Indian tribes in Minnesota that operated their own casino nearby. The opposing tribes hired influential lobbyists to make their case directly to President Clinton and top White House officials and then later made the campaign contributions.

    While the episode might appear scandalous, that does not mean it is criminal, officials said.

    "Lobbyists lobbying, politicians hearing the concerns of their supporters, even White House staffers inquiring suggestively about this kind of decision, all that happens all the time and it is legal," said an official familiar with the probe. "Making a criminal case out of something like this requires evidence of an explicit quid pro quo."

    Even without proof that government officials demanded the campaign contributions in exchange for denying the Chippewa casino license, an independent counsel might be called for if there were strong indications that Babbitt had been directly involved in a potential exchange of money for favors, but no such evidence has developed thus far, the officials said.

    The recommendation to seek an independent counsel would rest entirely on what Babbitt has had to say about the matter, the officials said.

    Paul Eckstein, a former law partner of Babbitt's and a lobbyist hired by the Chippewa to press their case, has consistently asserted that Babbitt told him at the time the Chippewa's application was rejected that Harold Ickes, then White House deputy chief of staff, had demanded a quick resolution of the case. Eckstein repeated that account in sworn testimony before the Senate Governmental Affairs Committee during its hearings on the campaign finance scandal last year.

    In a letter to Sen. John McCain (R-Ariz.), Babbitt denied he had ever made the comment about Ickes. Then in testimony before the Senate committee, he said he had invoked Ickes's name as a ruse to get Eckstein out of his office.

    The Independent Counsel Act strictly limits the extent to which an individual's motives and intent can be explored during a preliminary investigation, and the law requires the appointment of an outside prosecutor if there are any doubts.

    "If this was being handled in a U.S. attorney's office and he was a county commissioner, you might be able to sit down with this guy and satisfy yourself that this did not add up to perjury. But the independent counsel process was expressly designed to keep an attorney general from making those kind of judgments when it comes to senior people in the executive branch," a department official said.

    Even if Reno seeks an independent counsel only on the perjury issue, the investigation would almost certainly broaden, because Ickes and other major figures in the overall campaign finance scandal are involved.

    "Once you start looking at whether Babbitt told the truth about whether campaign contributions influenced the casino issue, you could easily end up looking at the whole spectrum of allegations concerning the way money was raised in 1996," said a senior official.

    © Copyright 1998 The Washington Post Company

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