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  •   Outside Prosecutor Requested for Herman

    Labor Secretary Alexis M. Herman
    Secretary of Labor Alexis M. Herman speaks to reporters Monday. (AP)
    By Roberto Suro
    Washington Post Staff Writer
    Tuesday, May 12, 1998; Page A01

    Attorney General Janet Reno yesterday requested the appointment of an independent counsel to investigate allegations that Labor Secretary Alexis M. Herman took part in an influence-peddling scheme while she served as a White House aide during President Clinton's first term.

    The decision followed what senior officials characterized as an agonized week-long debate within the Justice Department about whether to recommend an outside prosecutor. A preliminary inquiry found some corroboration for the allegations but, as Reno put it yesterday, "no evidence clearly demonstrating Secretary Herman's involvement."

    Yesterday's move by Reno, which came only minutes before the attorney general's deadline to make her recommendation to the special three-judge panel that oversees independent counsels, marks the seventh time Reno has sought an outside counsel to investigate alleged wrongdoing by Clinton or a senior administration official.

    Laurent Yene, an African businessman, set the inquiry in motion by claiming that Herman accepted cash and consulting fees in exchange for arranging access to the White House and doing other favors for businessmen needing help from the federal government. Yene also alleged that Herman sought illegal campaign contributions from those businessmen to assure favorable treatment. Herman called the allegations "false from the very beginning" and told reporters outside the Labor Department, "I am very disappointed and extremely baffled by this decision today." In a statement, Clinton said, "I am confident that in the end, investigators will also conclude that Ms. Herman did nothing wrong."

    During a probe lasting 150 days, the maximum permitted by law, Justice officials were unable to resolve the credibility of Yene's allegations but Reno decided that she was obliged to seek an outside investigation and noted that certain aspects of Yene's story have been corroborated. Reno's doubts about how to proceed resound throughout the eight-page document she sent yesterday to the three-judge panel that will now choose an independent counsel.

    "In the course of this investigation, we have spent significant time exploring the issue of Yene's credibility," Reno wrote. "While I cannot conclusively determine at this time that Yene's allegations are credible, much of the detail of the story he has told has been corroborated, though none of it clearly inculpates Herman."

    The independent counsel process was created after the Watergate scandal to prevent an attorney general from investigating senior officials of the same administration. Unless a preliminary investigation can show conclusively that allegations are false, an attorney general must seek an independent counsel.

    "This one really had people agonizing, and the doubts went from top to bottom," said a Justice Department official.

    The memorandum on the case to Reno from the department's public integrity section recommended requesting an independent counsel, but in a sign of the unusual internal debate, it also included a section arguing the opposite view, according to a department official.

    According to Reno's court filing, Yene went to the Justice Department last November with the allegation that Herman, while serving as director of the White House Office of Public Liaison during Clinton's first term, entered into a secret business arrangement with a consulting company. The firm, called International Investments and Business Development (IIBD), was co-owned by Yene and Vanessa Weaver, Herman's close friend and former business partner.

    Yene, who has since had a falling-out with Weaver, alleged that under the agreement Herman would get 10 percent of any business she facilitated for the company, and he claimed that Herman instructed Weaver to obtain contributions for the Democratic National Committee from the company's clients, including at least one foreign businessman barred by federal law from giving to U.S. campaigns.

    In a statement yesterday, Weaver's attorney, E. Lawrence Barcella Jr., said, "Dr. Weaver has steadfastly maintained that the allegations were false and that her long friendship with Alexis Herman has always been an open and honest one." Barcella depicted Yene as "a vengeful former business partner."

    Justice Department investigators concluded Herman met with IIBD clients and entertained at least one client at the White House. While no evidence was found that Herman attempted to influence any government decisions, Reno's report concluded that the company "did benefit from its access to Herman, and through her, the White House in impressing its clients." However, the Justice Department investigation was inconclusive on the question of whether Herman received any money in return.

    Reno's findings were more pointed on Yene's allegation that Herman directed Weaver to solicit campaign contributions. Yene stated that a foreign businessman had been instructed to make a $250,000 contribution to Democratic coffers in 1996 to get help obtaining a license from the Federal Communications Commission.

    The investigation found that the businessmen, who was not named, had paid another Weaver company, Alignment Strategies Inc, $250,000 during that period and that Weaver, who had not made political donations before, then gave the Democrats roughly the same amount.

    Reno concluded that on the campaign contributions, "the investigation developed no evidence disproving Yene's allegation, and the evidence is in conflict at this point." Reno stated, "It is not plausible that Weaver would have set out in late 1996 to make substantial campaign contributions to benefit the Democratic Party for the first time in her life without consulting with her close friend, a politically active Democrat."

    As for Yene's allegation that in spring 1996, he gave Herman an envelope filled with $10,000 in cash, Reno said the investigation found no evidence pointing one way or another and that this allegation on its own would not merit further inquiry.

    © Copyright 1998 The Washington Post Company

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