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  •   Labor Secretary Is Probed by Justice Dept.

    By Roberto Suro and Charles R. Babcock
    Washington Post Staff Writers
    Thursday, January 15, 1998; Page A01

    The Justice Department has opened a preliminary investigation into allegations that Labor Secretary Alexis M. Herman accepted illegal funds in exchange for assisting a business associate while she served as a White House aide during President Clinton's first term, department officials said.

    The opening of the investigation is not itself a sign that there is proof of wrongdoing by Herman. Under the Independent Counsel Act, the attorney general is required to look into any specific and credible information that a Cabinet official may have committed a crime. The inquiry will determine only whether there is enough information to justify appointment of an independent counsel who would further probe the matter.

    The investigation is due to be completed in a matter of weeks, an official said. Herman's sole accuser is Laurent Yene, a 42-year-old African businessman who has told federal investigators that Herman participated in a scheme to sell the influence of her White House office on behalf of companies needing help from the federal government, officials said.

    Herman's attorney, Neil Eggleston, said: "These allegations against Secretary Herman are just not true. We have not been contacted by the Justice Department. If we are, we will provide whatever information they need to help them put this to rest."

    In an interview yesterday on ABC's "World News Tonight," Yene alleged that he delivered an envelope of cash to Herman at her home. Yene said he has given federal investigators bank documents that he says show a complex financial scheme to funnel to Herman a 10 percent cut of the consulting fees he received from a client who needed help getting a license for a satellite telephone system.

    Yene shared a business with Vanessa Weaver, who is Herman's longtime friend. Weaver bought out Herman's management consulting firm when Herman joined the Clinton White House as director of the office of public liaison. In that post Herman became an influential political figure who served as a point of contact between the administration and a wide variety of interest groups.

    Efforts to reach Yene last night were unsuccessful. His previous comments have already caused Herman trouble.

    Before Herman's confirmation hearings as secretary last spring, Yene alleged in news media interviews that Herman did favors for Weaver, although at the time he did not mention any payments.

    Weaver's lawyer, E. Lawrence Barcella, called Yene "an embittered former boyfriend." Weaver, he said, "poured money into a company she started for him, and he was personally and professionally unfaithful."

    Barcella noted that the Justice Department has no alternative but to open an investigation whenever any allegation is made against a government official covered by the independent counsel statute.

    Jeffrey Fried, another Weaver attorney, said that Weaver filed suit against Yene in July charging him with misappropriating funds, including cash withdrawals from their business, and making false charges about Weaver and her business affairs. Fried also said that Yene "approached us in April saying unless Dr. Weaver paid him $250,000 – a figure he later lowered to $125,000 – he would destroy Dr. Weaver and Alexis Herman."

    Last May after Yene made his initial allegations, Herman said: "I have never been a party to anyone's effort to exploit their relationship with me for profit or to take advantage of my position in the White House. . . . Given my position at the White House I recognize that I should have been more attentive to the fact that even social interactions might, without my knowledge, serve a commercial purpose for others."

    At the White House, press secretary Michael McCurry said the president "continues to have full faith and confidence" in Herman.

    Herman won Senate approval only after a long hazing in which her past business relationships drew intense scrutiny from skeptical Republicans.

    Yesterday morning in Phoenix, Herman helped lead a meeting of the president's advisory board on race. She missed a midday news conference, however, because she had to take an "urgent" phone call, according to an advisory board spokesman. In the afternoon, Herman moderated a discussion with business leaders before leaving for the airport.

    Herman's relationship with Weaver and Yene was the subject of several news reports last year, particularly in USA Today, which detailed how Weaver bought Herman's consulting company for $88,000 after Herman joined the White House staff in 1993. Yene, a friend of Weaver's, attended White House functions with her arranged by Herman at least twice in 1994, according to White House records.

    Staff writers John F. Harris and Susan Schmidt in Washington and Michael A. Fletcher in Phoenix contributed to this report.

    © Copyright 1998 The Washington Post Company

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