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Task Force Pressing For Cooperative Testimony (Oct. 31)

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Fund-Raising Hearings Suspended (Oct. 31)

Old Friends Diverge Over Casino Ruling

By Edward Walsh
Washington Post Staff Writer
Friday, October 31, 1997; Page A01

Two old friends, classmates at Harvard Law School and longtime political allies, painfully recounted yesterday their sharply different versions of the circumstances surrounding a government decision involving Indian gambling interests that Senate Republicans charge was tainted by the influence of major contributions to the Democratic Party.

Interior Secretary Bruce Babbitt, the highest ranking government official to testify in the Senate Governmental Affairs Committee's investigation of campaign financing abuses in the 1996 election, told the panel that the decision to deny the application of three Indian tribes to open a gambling casino in Hudson, Wis., was not influenced by White House or Democratic National Committee officials. This contradicted the testimony of Babbitt's former colleague, Paul F. Eckstein, who said the Cabinet secretary had told him of being pressured by a top White House official.

Babbitt said that he did not make the decision but agreed with it and that the denial was consistent with the Interior Department's policy that "off-reservation gaming will not be imposed on communities that do not want it." He said the opponents included business and political leaders from Hudson and the surrounding area.

The Hudson casino is one of the few cases uncovered during the investigation that inv olves a government decision that directly benefited major Democratic contributors. According to committee Chairman Fred D. Thompson (R-Tenn.), other Indian tribes opposing the casino contributed a total of about $330,000 to the DNC and other national and state Democratic committees in 1996.

With the hearings apparently winding to a conclusion, Republicans on the committee saw the casino decision as perhaps their best opportunity to show that the Democrat's massive presidential fund-raising efforts influenced government policy. But as with the other examples the committee has examined since it began hearings this summer, by day's end they had presented a largely circumstantial case with no verifiable link between a contribution and a policy outcome.

Still, the casino story makes clear the way contributors received special access to the president and White House officials and how the White House and DNC officials were willing to make entreaties for them. For instance, Senate investigators established that, despite the warnings of the White House official who dealt with Indian affairs to steer clear of the controversy, members of then-Deputy Chief of Staff Harold Ickes staff contacted lower-level Interior Department officials about the Hudson decision.

Babbitt's actions are also being looked at by Justice Department attorneys who must decide whether to refer the case to a special prosecutor.

Lurking in the background of the case is also the role of Patrick J. O'Connor, a former DNC treasurer and one of Washington's most active lobbyists. Representing the Minnesota tribes, he reminded Ickes in a May 1995 letter that the tribes had contributed to the party and President Clinton's 1992 campaign. O'Connor pitched his case directly to Clinton at a fund-raiser, subsequently spoke to several administration officials, and later told the Indians that Clinton had done their bidding.

The Wisconsin tribes wanted to open the casino at a failing dog track in Hudson, which is just across the border from Minnesota and about 25 miles east of Minneapolis and St. Paul. But the application was strongly opposed by Minnesota Indian tribes that operate their own lucrative gambling casinos and feared the nearby competition.

During the hearing, Babbitt acknowledged that he "muddied the waters somewhat" when he first denied and later confirmed that during a meeting with his old friend,. Eckstein, he suggested that Ickes was interested in the casino decision.

Earlier yesterday Eckstein, who was hired as a lobbyist by the three Wisconsin tribes seeking to open the casino because of his own access to Babbitt, was emphatic in his recollection of his meeting with Babbitt on July 14, 1995, the day the Interior Department issued a final rejection of the casino proposal.

He said that early in his meeting with Babbitt, as he pressed for a delay in the decision, Babbitt told him that "Harold Ickes had directed him to issue the decision that day." Later in the meeting, according to Eckstein, Babbitt asked a "rhetorical question" about how much Indian tribes had contributed to the Democrats and said that it amounted to "half a million dollars."

"I was disappointed in him," Eckstein said of his reaction at the time.

Babbitt said that he had "no recollection" of mentioning campaign contributions to Eckstein. He also insisted that he had no discussions with Ickes or other White House officials about the Hudson casino, but that in an "awkward effort to terminate an uncomfortable meeting" that he probably told Eckstein that "Mr. Ickes wanted the department to decide the matter promptly."

Committee Republicans treated Babbitt politely, but they were clearly skeptical of his version of the meeting with Eckstein. "Either you discussed Mr. Ickes or you did not. Either Mr. Eckstein lied or you are not telling the truth," said Sen. Don Nickles (R-Okla.).

Much of yesterday's hearing centered on two letters Babbitt wrote to Sen. John McCain (R-Ariz.) last year and to Thompson earlier this month. Babbitt told McCain that he "must regretfully dispute Mr. Eckstein's assertion that I told him that Mr. Ickes instructed me to issue a decision in this matter without delay.

More than a year later, he told Thompson that "I do believe that Mr. Eckstein's recollection that I said something to the effect that Mr. Ickes wanted a decision is correct."

Yesterday Babbitt insisted that the two letters were "consistent" — that it was true that he never told Eckstein that Ickes instructed him to make a decision that day but that in effort to get Eckstein "out the door" he did tell him that Ickes wanted a decision. Eckstein has been involved in every one of Babbitt's political campaigns, from his first race for Arizona attorney general in the 1970s to his quixotic quest for the 1988 Democratic presidential nomination, and yesterday's hearing was clearly an uncomfortable experience for him. He said that "at some point it became very clear that political pressure was being brought to bear" in the Hudson case.

But under questioning by Democrats, Eckstein said Babbitt's reference to Ickes dealt only with the timing of the Interior Department decision, not its substance, and that he had "no basis to believe" that the White House dictated the denial of the casino application.

Asked about Babbitt's letter to McCain, Eckstein said: "I knew what was said to me. I know that statement was not true. When someone tells your senator that you have misrepresented the facts, that's painful."

Babbitt described the process the Interior Department followed in the case as "professional" and "unaffected by political considerations," with the key decision-maker being an 18-year career civil servant who made the recommendation of a denial. But he, too, seemed ill at ease in this public dispute.

He said that Eckstein was "a good man" and "a forceful advocate" for his clients. "The hardest person to turn down is someone from your home town who you went to school with and practiced law with," Babbitt said.

© Copyright 1997 The Washington Post

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