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  •   Reno Is Now Probing Clinton's Fund-Raising

    By Roberto Suro and John F. Harris
    Washington Post Staff Writers
    Sunday, September 21, 1997; Page A01

    The Justice Department announced yesterday that it has taken the first step in a process that could lead to the appointment of an independent counsel to investigate whether President Clinton made illegal fund-raising telephone calls from the White House in 1996.

    The decision by Attorney General Janet Reno was based on new information suggesting that Clinton may have solicited campaign contributions in violation of federal law, sources said.

    The president's lawyers were notified of the review by the Justice Department on Friday and informed Clinton, who was traveling in California, yesterday. White House officials said they would cooperate with the probe. "We are confident no laws were broken," said Lanny Davis, a spokesman for the White House counsel's office.

    Clinton has said he does not remember whether he made any fund-raising calls, and White House attorneys have said there is no clear legal precedent to show that such calls would violate federal election law.

    The review marks the first time the Justice Department has determined that actions by the president while in office must be examined to determine whether he may have committed a crime.

    Reno's order comes two weeks after she initiated a similar review into phone solicitations from the White House by Vice President Gore and during the same week she replaced the top officials in the Justice Department campaign finance task force. The attorney general, officials said, is determined that her investigators move quicker and more effectively with the inquiry into allegations of fund-raising abuses by the 1996 Clinton-Gore reelection campaign.

    "The Justice Department is reviewing whether allegations that the president illegally solicited campaign contributions on federal property would warrant a preliminary investigation under the Independent Counsel Act," said department spokesman Myron Marlin, officially acknowledging the review yesterday in response to reporters' questions.

    The reviews, which can take no more than 30 days, are to determine whether there is "specific and credible" information that Clinton or Gore may have violated the prohibition against campaign fund-raising on federal property. If the review uncovers such information, Reno must order a 90-day preliminary investigation to determine whether she should seek an independent counsel.

    Clinton's fund-raising activities came under renewed scrutiny after federal investigators examined records that indicated the president made telephone solicitations from the White House and that some of the contributions went into "hard money" accounts, sources said. Hard money contributions are strictly regulated and are on behalf of individual candidates.

    Justice Department officials said Reno ordered the review last week but refused to say precisely when she did so or why she delayed public notice of the review. The attorney general is under no obligation to reveal such orders, but the Justice Department publicly acknowledged the Gore review the same day it was initiated, as it has in other cases.

    Since the start of September when the Senate Governmental Affairs Committee resumed hearings into a wide range of alleged fund-raising abuses by the 1996 Clinton-Gore campaign, as well as allegations that the Chinese government attempted to influence the election, Republican congressional leaders have stepped up demands that Reno appoint an independent counsel. At the same time Reno found herself embarrassed by missteps on the part of the Justice Department investigative task force.

    Gore has said he solicited campaign contributions by telephone from the White House, but he has insisted that "no controlling legal authority" showed that they violated any laws. In Clinton's case there are both questions as to what he did as well as the complex issues involving the interpretation of the law in what experts agree is an unprecedented set of circumstances.

    Several documents that have become public during the investigation of alleged campaign fund-raising abuses indicate that Clinton was asked by his staff to solicit contributions by phone.

    At a March 7 news conference, Clinton was asked about comments by White House press secretary Michael McCurry in which McCurry allowed for the possibility that Clinton made fund-raising calls from the White House. Clinton said, "I told him to leave that possibility open because I'm not sure frankly."

    Elaborating on that, Clinton said that he preferred to raise money face-to-face, "but I can't say, over all the hundreds and hundreds and maybe thousands of phone calls I've made in the last four years, that I never said to anybody while I was talking to them, `Well, we need your help,' or `I hope you'll help us.' "

    Davis, of the White House counsel's office, said yesterday that the White House is doing nothing more to determine whether Clinton actually made such fund-raising calls: "We have no plans to further review the issue of the telephone calls. We don't believe he made calls, but he might have."

    In a deposition to congressional investigators looking into campaign fund-raising practices, Harold Ickes, former White House deputy chief of staff, said that during the 1996 campaign Clinton would sometimes agree to make phone calls but then fail to do so even when call sheets were left on his desk. Ickes, however, also indicated that Clinton did make some calls to donors, but White House officials insist that none of those calls involved a request for a donation or an agreement that "closed the deal."

    David Kendall, Clinton's criminal defense lawyer, said yesterday, "No laws were broken, and any kind of enforcement action would be absolutely unprecedented. We intend to cooperate with the Department of Justice, and this matter should be resolved speedily."

    Aside from the factual question of whether Clinton made phone calls that involved solicitations, White House officials and others who defend the actions of the president and the vice president have raised a series of legal arguments to show that the calls did not violate any laws even if they were made.

    While not commenting on the specific points raised by White House defenders, Reno and other senior Justice Department officials acknowledge that several important areas of federal election law are unclear and some of the questions raised by the phone calls have never been tested in court.

    One line of defense is that such telephone calls would not violate the prohibition on campaign fund-raising on federal property because the people being solicited were not on that property but far away in their homes or offices. Another argument is that the law was never meant to bar the solicitation of willing donors but was meant to protect federal workers who might be intimidated by supervisors seeking political contributions.

    If Clinton made any phone calls from the residential areas of the White House, lawyers could raise a traditional distinction that such areas are not considered a federal place of business and therefore fund-raising would not be inappropriate.

    Yet another defense raised by White House lawyers is that the money was solicited for unregulated "soft money" accounts that the political parties can use for activities such voter registration, but not to support individual campaigns. In Gore's case the White House has argued that funds he solicited were diverted to hard money accounts without his knowledge.

    When news of Gore's solicitations became public last march, Reno ordered a 30-day review in response to a formal request by members of the Senate Judiciary Committee as required under the Independent Counsel Act. At the conclusion of that review, Reno declined to conduct a 90-day preliminary investigation based on the argument that the solicitation of soft money did not fall under the prohibition against fund-raising on federal property.

    However, when The Washington Post reported on Sept. 3 that more than $100,000 of the money raised by Gore went into hard money accounts, Reno immediately ordered a new 30-day review of Gore's actions. The vice president on Friday hired two private attorneys to make his case to the Justice Department.

    Reno had conducted several 30-day reviews of allegations against Clinton, Gore and their aides, in response to formal congressional requests but in each case had concluded there was insufficient evidence to continue the independent counsel process.

    The Clinton and Gore reviews ordered this month differ because Reno ordered them on her own initiative rather than in response to congressional requests.

    While it is clear that Gore made calls that resulted in controversial contributions, less is known about the president's fund-raising activities.

    For example, call sheets filled out for Clinton show that he was asked in February 1996 to solicit a contribution from Gail Zappa, widow of musician Frank Zappa. That summer she made a $30,000 contribution to the Democratic National Committee, $20,000 of which was deposited in a hard money account. But whether Clinton ever called Zappa or whether she made the contribution in response to some other solicitation is unknown.

    In another case the White House acknowledges that Clinton called Robert Meyerhoff, a Maryland businessman who made a $100,000 donation to the DNC, and that the call may have been made from the Oval Office. However, White House officials say that Clinton called Meyerhoff to thank him for agreeing to make the contribution – something Clinton did for many donors who had been solicited by others and had committed to make donations.

    In an unhappy coincidence for the White House, news of Reno's review broke on a day Clinton was in San Francisco for three separate DNC fund-raisers that raised just shy of $1 million.

    Harris reported from California, Suro from Washington.

    © Copyright 1997 The Washington Post Company

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