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Casino Investigation Would Reach Beyond Babbitt, Officials Say

By George Lardner Jr. and Roberto Suro
Washington Post Staff Writers
Wednesday, February 11, 1998; Page A12

With Attorney General Janet Reno poised to recommend an independent counsel investigation of Interior Secretary Bruce Babbitt's role in an Indian casino controversy, Justice Department officials acknowledged yesterday that such an inquiry would likely reach into the White House and the Democratic National Committee.

Today is the deadline for Reno to report to a special three-judge panel on the results of a preliminary investigation into whether Babbitt lied to Congress about his role in rejecting a Wisconsin casino application.

Rep. Dan Burton (R-Ind.) urged Reno yesterday to seek a broad investigation. He said an inquiry by the House Government Reform and Oversight Committee, which he chairs, underscored the need for an independent counsel to probe "all allegations" stemming from the Interior Department's 1995 decision to kill the Wisconsin casino project, including questions about the involvement of President Clinton, Vice President Gore and their advisers.

Justice Department officials said Reno is expected to seek an independent counsel investigation focused on perjury allegations against Babbitt, but his disputed statements involve a top White House political operative and Democratic Party fund-raising and so those matters seem likely to come under scrutiny as well.

"Once you start looking at the relationships between people at high levels of government, you end up examining a whole range of conduct beyond what you originally anticipated," said Stephen A. Saltzburg, a law professor at George Washington University.

The immediate question, Justice Department officials said, is not whether an independent counsel will be appointed, but how broad the counsel's jurisdiction will be. The three-judge court with the final say in such matters has gone beyond the Justice Department's recommendations in the past -- enlarging, for example, the mandate in independent counsel Lawrence E. Walsh's Iran-contra investigation.

Reno could delay a decision under the independent counsel law for another 60 days, but if she proceeds, it will produce the first outside investigation of fund-raising for the 1996 Clinton-Gore reelection effort. Reno has resisted taking that step for some 16 months.

In the Wisconsin casino case, lobbyists hired by wealthy tribes opposed to the application began a concerted drive against the project in early 1995, shortly after its approval was recommended by Bureau of Indian Affairs officials in Minneapolis.

The chief lobbyist for the anti-casino forces buttonholed the president on a visit to Minneapolis, met with Donald Fowler, then chairman of the Democratic National Committee, and sought the help of other top Democratic campaign strategists, such as then-White House Deputy Chief of Staff Harold Ickes.

Babbitt has denied that outside political influences played any role in the July 14, 1995, decision to reject the off-reservation casino application and said it was turned down on the advice of career officials unaffected by the frenetic lobbying.

On the day the decision was made, however, Babbitt agreed to meet with Paul Eckstein, a lobbyist hired by the casino's chief promoter. Eckstein -- an old friend, law school classmate and former campaign manager for Babbitt -- has testified that Babbitt promised him and his clients a last-chance meeting if the application was going to be denied.

Instead, Eckstein said in Senate testimony, Babbitt told him that "Harold Ickes had directed him to issue a decision that day." Eckstein said Babbitt asked him if he knew how much "these Indians, Indians with gaming contracts" had given to Democrats. When Eckstein said he had no idea, Babbitt allegedly responded: "half a million dollars."

Babbitt at first denied Eckstein's account that he had mentioned Ickes, then acknowledged using Ickes' name "simply as a means of terminating the discussion" and getting Eckstein "out the door." The interior secretary has said he does not recall saying anything about campaign contributions.

Justice Department officials concede that they have no choice but to seek an outside inquiry since Babbitt as a Cabinet officer is explicitly covered by the independent counsel law and since they are barred by the same law from making subjective judgments about what Babbitt said and what he meant by it.

But the question of how broad a mandate the independent counsel should be given has been a subject of quiet debate at Justice since November, when it became apparent to top prosecutors that Babbitt's seemingly contradictory statements were likely to lead to an independent counsel.

The key issue all along has been whether an outside investigation starting with the narrow question of whether Babbitt perjured himself in congressional testimony would lead to a wide-ranging probe of the entire campaign finance issue, department officials said.

Reno last year rejected recommendations -- from both Republicans in Congress and her own FBI director -- for a broad independent counsel investigation of 1996 campaign fund-raising.

In the Babbitt case, officials at Justice said they have been trying to fashion a mandate that does not blossom into an open-ended investigation. However, they realize it will be difficult to limit the inquiry, especially when the final wording of the mandate will be up to the three-judge panel.

"There is no way to assess the veracity of what Babbitt said without getting into the underlying facts and those facts take you straight to Harold Ickes," said a senior Justice Department official.

Similar difficulties faced the Justice Department in 1986 when the Republicans were in charge and Attorney General Edwin Meese III sought a mandate that would have kept independent counsel Walsh from investigating U.S. support for rebel forces in Nicaragua in addition to the proceeds derived from secret arm sales to Iran.

Democrats in Congress asked the court to bring all aid for the contras under the special counsel's jurisdiction and the judges adopted their proposals almost verbatim.

© Copyright 1998 The Washington Post Company

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