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Babbitt Renews Wisconsin Casino Denials

Bruce Babbitt
Bruce Babbitt speaks before the House Reform and Oversight Committee. (AP Photo/Dennis Cook)

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By Edward Walsh and George Lardner Jr.
Washington Post Staff Writers
Friday, January 30, 1998; Page A11

Denouncing attacks on his integrity as "uncalled for and unwarranted," Interior Secretary Bruce Babbitt told a House committee yesterday that he is being victimized by "a half-baked theory of improper political influence" involving his department's rejection of a proposed Indian casino in Hudson, Wis.

Testifying before the House Government Reform and Oversight Committee, Babbitt forcefully reiterated his denials that outside political influence played any role in the decision or that he had contact with White House or Democratic Party officials about the outcome of the case.

Taking the offensive, Babbitt told the committee that it has been pursuing "a conspiracy theory worthy of Oliver Stone." He said the allegations tying the casino decision to more than $350,000 in Democratic campaign contributions were "manufactured by the losers to take advantage of the corrosive political atmosphere that surrounds this city at this time."

White House involvement in the controversy began on April 24, 1995, when the chief lobbyist for the anti-casino forces buttonholed President Clinton at a Minneapolis reception. Within days, then-White House deputy chief of staff Harold Ickes and Democratic National Committee Chairman Don Fowler were being urged to help kill the casino proposal.

Babbitt said the issue had been clouded by lobbyists "floating around on both sides of the issue." With Fred Havenick, the Florida-based owner of a money-losing dog track in Hudson that he sought to convert into a casino in partnership with three Wisconsin Indian tribes, sitting in the audience, Babbitt added: "These Florida gambling guys are as big and determined and scuzzy as the guys on the other side."

Havenick told reporters he was "outraged" by Babbitt's remark and charged that Babbitt was attempting to create a "smoke screen because he knows a grievous wrong was done to the three tribes."

(Reuters/Ken Cedeno)
The hearings were part of the congressional investigation into the campaign fund-raising improprieties of the 1996 election cycle. In the Hudson case, the Interior Department, citing intense local opposition, overturned a recommendation by its Minneapolis office to approve the casino proposal.

Opponents of the casino included the Hudson City Council and other Indian tribes in Wisconsin and Minnesota that have their own casinos and did not want a nearby competitor. The tribes later contributed about $350,000 to the Democratic National Committee and other Democratic causes, leading to Republican charges that the decision was tainted by outside political influence.

The Justice Department has begun a preliminary inquiry to decide whether to appoint an independent counsel to investigate Babbitt's role in the case. Attorney General Janet Reno has until Feb. 11 to make that decision and sources have said she is likely to call for an independent counsel probe.

The House investigation, however, ended inconclusively, as did an earlier investigation by the Senate Governmental Affairs Committee, with Republicans unable to establish that the lobbyists had any impact on Interior's decision.

A clearly frustrated committee Chairman Dan Burton (R-Ind.) acknowledged yesterday that evidence suggesting improper political influence was only "circumstantial," but contended it was striking enough to justify further investigation by an independent counsel.

"Maybe there is no criminal activity, but we have enough to prove there ought to be somebody to investigate this very thoroughly," Burton said.

"All I can say," Babbitt replied, "is that if you're bound on a conspiracy and oblivious to the facts, I hardly know where to begin."

Rep. Henry A. Waxman (Calif.), the committee's ranking Democrat, said that despite all the lobbying on the casino matter, "there is no evidence whatsoever that the decision was made on anything but the merits" of the case. The appointment of an independent counsel, he added, would be "a travesty."

Babbitt has become personally embroiled in the controversy because of the testimony of an old friend and law school classmate, Paul Eckstein, a lobbyist who was working for Havenick. Eckstein has said that on July 14, 1995, the day the Interior Department formally rejected the casino plan, Babbitt told him that Ickes had ordered a decision that day and casually mentioned the large contributions the opposing tribes made to the Democratic Party.

Babbitt said yesterday that he never spoke to Ickes about the Hudson case and had invoked his name only as "an excuse" to get Eckstein out of his office.

"I regret the remark," Babbitt said. "It was a mistake, but that's all it was."

Defending Babbitt, Waxman said his dealings with Eckstein were "clumsy."

"He's embarrassed by it and appropriately," Waxman said. "But we ought not to be appointing an independent counsel for clumsy behavior."

Babbitt also insisted that letters he later wrote to Sen. John McCain (R-Ariz.) and Sen. Fred D. Thompson (R-Tenn.) were "consistent" in their denial that Ickes played a role in the decision. Babbitt's varying accounts of his conversation with Eckstein are a key part of the Justice Department investigation, because Republicans have alleged that the interior secretary may have lied when he testified before the Senate last fall

Babbitt denied in his letter to McCain that he had said Ickes called him and ordered a decision that day; Babbitt later told Thompson that he did invoke Ickes's name, but only as an excuse to end the meeting. Babbitt also repeated in his testimony yesterday that he has "no recollection" of telling Eckstein about "half a million dollars" in political contributions from Indian tribes.

Republicans on the panel said that lobbyists for wealthy tribes opposed to the casino had much greater access to the White House and DNC than the pro-casino forces. Burton emphasized what he regarded as a particularly suspicious sequence starting on May 16, 1995, when an anti-casino lobbyist and longtime friend of Clinton, Tom Schneider, spoke briefly to Clinton at a reception at the Mayflower Hotel here and then raised the dispute with Ickes.

Schneider said he told Ickes, who had already been contacted about the controversy, that it "deserved" his attention. Two days later, on May 18, Ickes got a memo from one of his assistants stating that the Interior Department staff "met last night [May 17] and came up with a preliminary decision" to reject the casino project.

Babbitt, however, said it was clear from the record that the decision, formally announced July 14, 1995, was based on the findings of career officials unaffected by the frenetic lobbying taking place outside the department. He dismissed the contacts by Ickes's office as routine "status inquiries" and added that he was never told of them.

"You can manufacture all the conspiracy theories you want," the secretary told Burton, "but the facts are the facts." He said lobbyists might claim credit for the decision, but "half the lobbyists in this town claim credit for the sunrise at least once a week."

Rep. Stephen Horn (R-Calif.) suggested that Babbitt would surely have been alerted to the White House's interest in the matter in view of the calls from Ickes's office.

"Oh come on!" Babbitt retorted. "No way! I have things to do."

© Copyright 1998 The Washington Post

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