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Counsel Probe in Babbitt Case Likely, Aides Say

By Roberto Suro
and George Lardner Jr.

Washington Post Staff Writers
Monday, November 17, 1997; Page A01

The investigation of Interior Secretary Bruce Babbitt's handling of an Indian casino license appears likely to result in the appointment of an independent counsel because of difficulties in establishing the truthfulness of his sworn statements to Congress, senior Justice Department officials said.

"Given the facts and the statutes involved, it is hard to see how this case is going to wash out in time," said an official close to the investigation, which was formally opened last Thursday. The investigation began after an initial review determined that there was "specific and credible" information that Babbitt may have committed a crime.

Once such an inquiry under the Independent Counsel Act has been initiated, an attorney general has up to 90 days to effectively clear the subject of any serious allegations — finding there are no "reasonable grounds" for further investigation — or to turn the case over to an independent counsel.

If an independent counsel is named to look into Babbitt's role in the casino affair, officials assume that such an investigation would also include actions by the White House staff and members of the Democratic National Committee. Previous testimony has indicated that several top Democrats were interested in the outcome of the casino issue, including President Clinton, adviser Bruce Lindsey, then-deputy chief of staff Harold Ickes and DNC Chairman Donald L. Fowler.

However, the Justice Department officials pointed out that a decision to go to an independent counsel would not necessarily indicate that they were any further in resolving the underlying questions in the case. Apart from the immediate question of whether Babbitt mislead members of a Senate committee, the casino case also has been viewed by those looking into campaign finance abuses as one of the strongest possibilities of campaign contributions influencing a government policy decision.

In their just-concluded hearings, members of the Senate Governmental Affairs Committee reached no conclusion on questions of whether there was a quid pro quo, whether it was illegal and who was responsible.

In Babbitt's case investigators must sort out several contradictory statements by the Interior secretary as well as evidence from others that contradicts his assertions. Some of these matters have been the subject of legal action for more than a year and remain unresolved, and some officials involved in the investigation believe it is unlikely they will be able to clear them up in the next three months.

Senior Justice Department officials note that allegations of making a false statement are particularly difficult to disprove when witnesses dispute not only what was said but also the events in question.

"Once you are dealing with statements that contradict each other and statements that seem to contradict facts, these kinds of investigations can take on a life of their own," said one investigator.

In some ways, Babbitt's situation mirrors that of Henry Cisneros, the former secretary of Housing and Urban Development. An independent counsel inquiry has been underway since 1993 to determine whether Cisneros lied to an FBI agent about financial arrangements with a former mistress and the investigation remains unresolved.

In an appearance before the Senate committee on Oct. 30, Babbitt flatly denied allegations that improper political influences played a role in a 1995 Interior Department decision to deny a casino license to three impoverished Wisconsin Indian tribes. The Chippewa tribes wanted to build a gambling establishment on the site of a failing dog track in Hudson, Wis., 26 miles east of Minneapolis.

The Chippewa have alleged in a lawsuit that they were turned down because seven other tribes that operated casinos contributed generously to Democratic campaign coffers.

The lawsuit and congressional investigations have produced evidence that a recommendation by the Bureau of Indian Affairs to approve the Chippewa's plan was rejected by Interior Department higher-ups after lobbyists for the casino-rich tribes contacted top Democratic officials. Interior officials have said the decision was based solely on the merits.

Justice Department officials noted the Babbitt investigation primarily involves factual questions as opposed to legal issues. It stands in contrast to the investigations underway to determine whether an independent counsel should look into telephone fund-raising solicitations by President Clinton and Vice President Gore. The calls for the most part have been documented and the investigations turn on complex questions regarding the application of a 19th century law against campaign fund-raising on federal property.

By contrast, a senior law enforcement official said, "the legal questions in a perjury charge are clear-cut; it's establishing the facts — for example, did the subject know what he was saying was false — that makes these cases hard to clear up."

A key area of the investigation involves contradictory statements by Babbitt regarding whether he ever acknowledged that Ickes played a role in the casino decision.

A close friend of Babbitt's, Paul F. Eckstein, who was lobbying on behalf of the Chippewa tribes, testified before the Senate that Babbitt had told him of pressure by Ickes and substantial donations by the tribes.

In a 1996 letter to Sen. John McCain (R-Ariz.), Babbitt denied that he ever invoked Ickes's name with Eckstein. In his testimony last month, Babbitt continued to insist that Ickes played no role but said that he may have mentioned Ickes as a way of persuading Eckstein to leave his office.

Meanwhile, Republicans on the House Judiciary Committee have also petitioned Attorney General Janet Reno to seek appointment of an independent counsel. Invoking a provision of the independent counsel law, they said that the Justice Department had a conflict of interest that made an outside investigator essential. Reno has 30 days to respond to their request.

"[T]he evidence indicates that at least two covered persons, President Clinton and Secretary Babbitt, may have committed a crime" in the handling of the Chippewa application, the committee said in a 24-page letter to Reno.

To bolster their request, the Republicans pulled together various documents that had been made public. They noted that Clinton became involved in the controversy on April 24, 1995, when the chief lobbyist for the opposition tribes, Patrick O'Connor, approached him at a fund-raiser in Minneapolis and told him that the tribes he represented were "concerned about a possible casino going in near Hudson, Wis."

At that point, O'Connor has said in a deposition, the president called Lindsey over and said, "Bruce, talk to O'Connor... ." O'Connor said he had been having difficulty with the White House aide in charge of such matters, Loretta Avent, and Lindsey told him, "I will have someone call you."

Lindsey, the Republicans noted, then enlisted Ickes to look into the matter. Avent protested in a memo to Ickes that same day that the issue was "such a hot potato" that the "legal and political implications of our involvement would be disastrous." Members of Ickes's staff, however, kept in touch with officials at Interior about the status of the Chippewa application.

After the application was rejected, the Chippewa filed suit in federal court against Babbitt and other Interior officials. The U.S. Attorney's Office in Madison, Wis., and Justice Department civil lawyers from Washington have been defending the secretary and his aides, the Republicans complained, even while the Justice Department's criminal division has been investigating Babbitt to determine if he might have committed a crime.

"You are currently acting as a criminal prosecutor and a civil defense attorney to the same people, for the same conduct, at the same time," the letter to Reno said.

The Republicans also said that government lawyers in the Wisconsin case, a case "managed from Washington," have been fighting persistently to suppress the discovery of documents from high-ranking White House and Interior Department officials.

© Copyright 1997 The Washington Post Company

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