The Attorney General: Janet Reno Despite a year of hard work, the task force's inquiry foundered publicly this month, embarrassing Reno and intensifying the political pressure on her to seek appointment of an independent counsel. "I have confidence that the career professionals in the department will investigate this matter in a fashion that will satisfy the American people that justice has been done." -- April 14 letter declining request that she seek an independent counsel "The investigation by the task force is ongoing. I am personally monitoring it closely and regularly. I regularly ask: Do you have enough staff, both in terms of agents and lawyers? At any time I find that the requirements of the Independent Counsel Act have been met, I will not hesitate to invoke it, as I have in the past." -- April 30 Senate Judiciary Committee testimony "I don't think it's a fair criticism to say that the task force has been behind the curve, because, as you conduct a criminal investigation, the best way to do it is in a very ordered, careful way. . . . The task force has done a very professional, very fine job of this. If it were another investigation someplace else, there wouldn't be so many drummers beating different tunes, if you will. And I think with all of that, they have done a very good job." -- Sept. 26 interview

Continued from Part One

The task force, Reno said, would thus remain in charge of the investigation. "I have confidence that the career professionals in the department will investigate this matter in a fashion that will satisfy the American people that justice has been done," Reno wrote the Senate Judiciary Committee on April 14.

Five months after that, The Washington Post reported that some money Gore solicited had, in fact, gone into DNC hard money accounts. The report was based on an examination of campaign documents that had long been in task force files. But once Reno had decided in April that allegations about Gore's activities broke no law, investigators made no further inquiries to determine whom he had called and learn what had happened to the money.

"Even if it looks like a duck," a Justice Department source said recently, explaining the task force approach, "we can't poke it to make it quack."

The pattern – waiting until an allegation had been made, usually in the press, and then essentially re-reporting the story but taking it no further – characterized virtually all of the task force's work on people covered by the Independent Counsel Act for most of this year.

The strategy left investigators looking as if they were constantly playing catch-up with the media and congressional investigations rather than generating their own leads, even as they appeared consciously to be turning their heads away from suggestions the most senior officials may have been involved in illegal fund-raising.

Thus, in February, six days after The Washington Post reported on a businessman who said he had been asked to launder a DNC donation by Democratic fund-raiser John Huang, the businessman was summoned before the grand jury to which the task force had begun presenting evidence.

When a lobbyist alleged in The Post that he was shaken down for contributions by Rep. Dan Burton (R-Ind.), the lobbyist was called before the grand jury two weeks after the newspaper report appeared.

Yet neither strand of the investigation has led to indictments, and the allegations appear to have languished.

To some who have closely observed the process, the difficulties posed by the narrow interpretation of what the Independent Counsel Act allows were compounded by the basic conservatism of the Justice Department attorneys in charge of the probe within the Public Integrity Section.

"Their way of doing things is to go tiny step by tiny step, building a case from the bottom up, reviewing and re-reviewing everything they do along the way," said an investigator who worked with the section on other cases.

But others defended their methods. "Public Integrity is widely regarded as one of the most bureaucratic outfits at Justice," said a department official, "but they work that way for a reason." A major justification for their style, this official and others said, is that it protects the department from accusations of partisanship. Every public integrity case is handled the same way, whether it involves Republicans or Democrats, county commissioners, or the president.

It was arguably the strong desire of all involved not to be seen as political or partisan that led to disputes between the Justice Department and the FBI. As far as task force prosecutors were concerned, as their investigation proceeded through the winter and spring the FBI's job was to digest the massive amount of documents that had been collected and to proceed methodically from one witness to the next.

To the bureau, the best way to show it wasn't covering up for the White House was to move straight to an examination of its highest officials, quickly triggering an independent counsel investigation free of the restrictions they were operating under. Agents wanted to interview as many witnesses as they could, as quickly as possible, before memories faded, and to get records under subpoena before they vanished, FBI officials said.

Time and again, the disputes led to arguments. Many were referred to senior Justice Department officials, who urged prosecutors to stay cool. "From the beginning, the tenor was `don't fight with the bureau,' " a Justice Department attorney said.

In virtually all cases, the prosecutors prevailed. Justice was responsible for looking at the big picture prosecutors methodically were constructing from small pieces. The FBI, prosecutors said among themselves, tends to look at the pieces, eager to home in on the one that seems likely to bear the best or most immediate results.

At its own headquarters down Pennsylvania Avenue from Justice, the FBI was bristling. But the FBI was not in charge.

Counterintelligence

One of the most intractable debates that ran through the task force's efforts was the relationship between its criminal investigation into campaign fund-raising and a separate but related counterintelligence probe.

Late last year, an intensive review of FBI intelligence intercepts had revealed that in early 1995 senior Chinese government officials had approved a plan to attempt to influence U.S. political campaigns with illegal contributions, and had allocated more than $2 million for that effort. Chinese officials emphatically denied the allegation.

As the task force was getting started, the FBI's Division 5, which conducts espionage investigations, already was examining the activities of several of the same DNC fund-raisers that Justice Department prosecutors wanted to look at, including figures such as John Huang, Yah Lin "Charlie" Trie, Pauline Kanchanalak and Johnny Chung, all of whom had ties to Asian businesses that in some cases had ties with China. The counterintelligence investigators wanted to know whether any of them had received money from the Chinese government. The task force investigators wanted to know whether the money had been funneled into political campaigns by illegal means.

Despite the apparent overlap in the two inquiries, they actually had different goals: prosecuting possible violations of campaign finance laws versus uncovering a national security threat and neutralizing it. Moreover, such inquiries typically use very different methods. National security investigations operate under more permissive guidelines than criminal cases when it comes to the use of informants, wiretaps and other intrusive investigative techniques.

Elaborate procedures have been developed to prevent information gathered for counterintelligence purposes from being used against a defendant in a criminal trial, so senior managers at the Justice Department and the FBI were constantly trying to determine what information could be conveyed from Division 5 to the task force.

To ensure that the two efforts remained separate, counterintelligence agents were technically assigned to the task force, but they did not report to the Public Integrity Section lawyers running it. Instead, their bosses were back in the FBI's Division 5.

It was this problem, largely hidden from the view of congressional investigators, the media and the public, that ultimately led Reno to replace the leaders of the task force.

On Sept. 11, Reno, Freeh and CIA Director George J. Tenet briefed senators in closed session on the China investigation, including information from government intelligence files indicating that Ted Sioeng, an Indonesian businessman in Los Angeles, might be implicated. The senators asked Reno about intelligence information the task force had about Sioeng's ties to China, and about other information pertaining to contributions his family made to the DNC. Reno said she had been unaware of the intelligence information and that the task force investigation had not taken it into account. The best she could do was promise the senators an explanation of whether the information might have been mishandled.

In fact, sources said, Reno had seen the intelligence information on Sioeng as long ago as March and had assented to an FBI request that it not be shared with task force attorneys. Still, the questions about the intelligence information caused Reno to act, and on Sept. 16, she and Freeh appointed new leaders to the task force.

Clarification (Oct. 5, 1997): An article Friday on the Justice Department's campaign finance investigation stated that Attorney General Janet Reno had agreed to an FBI request to deny a piece of highly classified intelligence information to members of the investigative team. Reno indicated through a department spokesman that she expected the information would eventually be shared with investigators after it had been cleared through normal procedures for the handling of intelligence material during a criminal investigation.

But despite the problems that have plagued the task force from the beginning, said a senior Justice Department official, there is no wholesale rethinking of how to run the investigation. "The overall strategy has not changed," this official said. "The idea is to investigate a criminal case, piece by piece, and be alert at all times for any evidence that triggers the [independent counsel] statute."