Washington Post Staff Writer
Wed., Dec. 03, 1997; Page A01
Attorney General Janet Reno announced yesterday that she had decided against seeking an independent counsel to investigate telephone fund-raising by President Clinton and Vice President Gore, declaring that the final determination was hers alone and that she was not influenced by politics or any outside pressure.
After thousands of hours of investigation, Reno said, there was no reasonable basis to believe Clinton or Gore violated a century-old law against campaign fund-raising on federal property. Although both officials made calls from the White House, Reno said the law did not apply because the calls either were made from residential areas, did not involve specific solicitations or did not raise actual campaign money.
Reno also said there was no evidence to support allegations that former energy secretary Hazel R. O'Leary had solicited contributions for a private charity in return for meeting with a Chinese businessman. Reno said that although the case did not implicate O'Leary, the Justice Department will continue to investigate the $25,000 contribution that was ultimately made by Johnny Chung, a California businessman and prolific Democratic fund-raiser.
Reno's decision gives Clinton and particularly Gore a temporary reprieve from a potential political disaster, observers from both parties agreed. But the narrow review of the facts that led Reno to reject an outside counsel also leaves open the other aspects of the campaign finance investigation, which will continue to hang over both men.
Reno emphasized that her finding was limited to the question of telephone solicitations.
"Any decision not to ask for an independent counsel does not mean that a person has been exonerated or that the work of the campaign finance task force has ended," Reno said at an afternoon news conference where she vowed, "We will continue to vigorously investigate all allegations of illegal activity."
Republicans responded with a barrage of criticism that questioned Reno's competence and objectivity and that attacked her for disregarding advice from FBI Director Louis J. Freeh that the broad range of allegations of wrongdoing by the 1996 Clinton-Gore reelection effort can be resolved only by an independent counsel.
In an unusual statement last night, Freeh acknowledged his differences with Reno but deferred to her authority. "Lawyers and investigators can and often do disagree," Freeh's statement said. "I and all of my colleagues in the FBI respect her decision and understand fully that it is the Attorney General's by law to make."
Rep. Dan Burton (R-Ind.) said he would call Freeh and Reno before the House Government Reform and Oversight Committee for a hearing next week, ensuring that the partisan controversy will continue. "The question is: Will the American people have confidence that no coverup is going on?" said the committee chairman, who has been conducting a campaign finance investigation. "As a result of today's announcement, the answer remains, `no.' "
Senate Governmental Affairs Committee Chairman Fred D. Thompson (R-Tenn.) said that "I don't think any of us were surprised" at Reno's decision on the phone calls, an issue he called "a dead-end street." But he said there is plenty of room to appoint an independent counsel to investigate "other areas," including questions or allegations about presidential "control and coordination" of "soft money" campaign spending, conduit contributions, money laundering and conspiracies involving people surrounding the president.
Sen. Carl M. Levin (D-Mich.), a senior member of the Governmental Affairs Committee, noted that Judiciary Committee Republicans early this year had demanded an investigation of the phone calls, and now that it has been completed "they want to change to a different issue they're shifting the goal posts just to keep the pot boiling."
Calmly anticipating the firestorm of criticism, Reno said at her news conference, "This decision was mine, and it was based on the facts and the law not pressure, politics or any other factor."
The attorney general's findings yesterday followed a methodology she has consistently applied for the past year to allegations of wrongdoing by the 1996 Clinton-Gore reelection effort. Whether examining White House coffees, a media blitz by the Democratic National Committee or White House phone calls, Reno has insisted on dissecting individual acts, one at a time, on the basis of specific laws. In each case, she has found no criminal violations.
Freeh, by contrast, has argued since last spring and most recently in a lengthy memo he sent to Reno last week that each of those acts can be understood only in a broader context and that taken together they suggest the possibility that Clinton, Gore and their top aides engaged in a conspiracy to evade limits on campaign spending, according to law enforcement officials. Moreover, Freeh has argued that establishing the truth of that allegation would require judgments that would draw Reno into the kind of conflict of interest that the Independent Counsel Act was meant to avoid.
Gore, whose political future once appeared to hang in the balance as he faced allegations of ethical lapses for the first time in a long career, told reporters: "I am pleased by the decision. Now that there has been a full and independent review, the issue of the phone calls can be put behind us."
In a statement, Clinton said simply, "The attorney general made her decision based on a careful review of the law and the facts and that's as it should be."
The Independent Counsel Act prohibits the attorney general from conducting full-scale investigations of other top executive branch officials because of the presumed conflict of interest. Before seeking appointment of an independent counsel, however, the attorney general is obliged to determine that there is "specific" and "credible" information indicating that such officials may have broken the law and should be subject to further investigation.
Just hours before a legal deadline yesterday, Reno formally advised the panel of three federal appellate judges who oversee implementation of the act that "there are no reasonable grounds" for further investigation.
Another preliminary investigation under the act is still underway, examining allegations that Interior Secretary Bruce Babbitt was swayed by campaign donations in the handling of an Indian casino license dispute. In addition, investigators are examining allegations that several Democratic fund-raisers solicited and laundered illegal campaign donations by foreigners.
Depicting yesterday's decisions as "a snapshot, not an ending" in the work of the task force now numbering 120 prosecutors, FBI agents and analysts, Reno said: "I am not imposing any constraints on the task force ability to pursue the matters that they are investigating. I have repeatedly told them to pursue every lead, explore every avenue, interview witnesses and ask any question."
Both in court documents and at her news conference, Reno took pains to depict the extensive investigative and analytical work that went into the conclusion announced yesterday. "We have taken every reasonable step to investigate these allegations," Reno said.
Investigators determined that Clinton had made calls to contributors on three occasions. Interviews with Clinton and the donors, as well as a variety of documents, showed that on two of those occasions Clinton called contributors or fund-raisers to thank them rather than to ask for money. On the third occasion, Oct. 18, 1994, Clinton made several fund-raising calls to donors, but investigators determined that the president placed the calls from the residential areas of the White House that are not subject to the prohibition on fund-raising from federal property.
Gore's case involved a more extensive probe, with more than 250 witnesses, because he had acknowledged making numerous fund-raising calls from his White House office in the early stages of the 1996 campaign. Reno said yesterday the calls did not violate the law because Gore solicited funds only for relatively unregulated "soft money" accounts for political party support. The law on fund-raising from federal property applies only to strictly regulated "hard money" used to support campaigns by individual candidates, she said.
Gore was unaware that some of the funds he solicited were deposited in hard money accounts by Democratic Party officials, Reno said. Moreover, she said that under Justice Department standards, Gore would have been prosecuted for fund-raising on federal property only if there were "aggravating factors" such as coercion or knowing disregard for the law, and no evidence of such factors was uncovered.
Staff writers Guy Gugliotta and Helen Dewar contributed to this report.
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