By Roberto Suro and Michael Grunwald
The inquiry, which could lead to the appointment of an independent counsel, represents a new and potentially more damaging round of legal problems for Gore. The vice president was cleared by Reno last December after an investigation of highly technical fund-raising matters but now faces additional questions about his truthfulness.
The new investigation will focus on whether Gore misled Justice Department prosecutors and FBI agents during an interview last Nov. 12, when he said he had believed that a massive Democratic media effort during the 1996 campaign was going to be financed entirely by "soft money" funds, which are not fully regulated under federal law. Reno cited that interview when she decided there was no reason for further review of Gore's fund-raising telephone calls.
The current inquiry began a month ago, after Gore's office turned over a Democratic National Committee memo bearing handwritten notations from a top aide. The notes, scribbled by Gore's former deputy chief of staff, David Strauss, suggested that a decision to finance the media campaign with both soft money and fully regulated "hard money" may have been discussed at a White House meeting attended by Gore on Nov. 21, 1995, sources said.
Gore was interviewed by Justice Department officials about the newly uncovered document before he left on vacation in Hawaii two weeks ago. Reno's decision to seek a preliminary investigation reflected a conclusion by Justice officials that this interview and other inquiries had failed to clear up questions about Gore's earlier statements, sources said.
Gore has denied any wrongdoing. His attorney, James F. Neal, issued a statement last night: "I am totally satisfied that Vice President Gore has fully, completely and honestly answered every question asked of him, and I am confident that when this investigation is completed, the Department of Justice will reach the same conclusion."
The department is conducting a separate review of fund-raising activities by former White House deputy chief of staff Harold M. Ickes, and sources said an independent counsel remains a possibility in that case as well. Reno is under tremendous pressure from congressional Republicans and some of her own underlings to use the Ickes case to seek a wide-ranging independent counsel probe of President Clinton's 1996 reelection campaign. In the Gore case, though, she appears to be limiting her preliminary investigation to narrower questions.
The vice president has been dogged by questions about his aggressive 1996 fund-raising role ever since he appeared at a controversial campaign event at a Buddhist temple outside Los Angeles. The questions became more pointed after he held a news conference on March 3, 1997, readily admitting that he had solicited political money from his White House office, but repeatedly insisting that there was "no controlling legal authority" to warrant an investigation.
Reno began the first investigation of Gore on Sept. 3, 1997, after The Washington Post reported that some of the funds he had raised from the White House had been placed in "hard money" accounts, in apparent violation of a 19th century law prohibiting campaign fund-raising on federal property. At the time, much of the debate centered on Reno's decision that the prohibition applies to hard money, which can be used to support individual campaigns, but not to soft money, which can only be used for general party activities such as issue advertising or voter registration drives.
In his interviews with investigators, Gore insisted that he only asked for soft money during more than 45 fund-raising calls from the White House and said he had no idea that some of the donations he solicited ended up in hard money accounts. Reno found that the evidence supported his claims and decided last December that no independent counsel was necessary to investigate his calls. "The allegation that the vice president may have been soliciting hard money is insubstantial and depends so heavily on conjecture and speculation that I conclude it does not provide reasonable grounds for further investigation," she said in court papers.
At the time, Reno noted that even if Gore had solicited hard money, she would not have sought an independent counsel, because the Justice Department never prosecutes that particular law without evidence of "aggravating circumstances." Still, she emphasized in her brief that Gore's statements in his own defense were an important aspect of her finding.
"The vice president provided a reasonable explanation for his conduct," Reno wrote. "He stated that he understood the media campaign to be funded entirely by soft money, and that he was soliciting large soft money contributions specifically for that campaign. While his understanding of how the media campaign was funded was not correct, nothing developed in the course of the preliminary investigation contradicts that this was his understanding."
The new inquiry, department sources said, could present more of a problem for Gore, because it raises a more serious allegation: making false statements to investigators.
During last year's investigation, Gore and other participants in the Nov. 21, 1995, DNC finance meeting, which also was attended by Clinton, Ickes and several DNC officials, said they had no recollection of any discussion about whether they would pay for it with hard or soft money. But the notes Strauss took at the meeting could cast doubt on those statements, particularly his inscription below an agenda item about the financing of the DNC media campaign: "65% soft/35% hard." Those figures refer to a formula, sanctioned by federal guidelines, for the financing of advertising with both forms of campaign contributions. Gore had insisted he knew nothing about the use of hard money when he was interviewed last year.
Yesterday, Reno took the first step of the complex process that could lead to an independent counsel, informing a special panel of three federal judges that an initial 30-day inquiry had failed to resolve questions raised by the new information regarding Gore.
Reno now has 90 days to conduct an investigation and can request a 60-day extension. If those deadlines expire, she will have to seek an independent counsel unless she can determine "that there are no reasonable grounds to believe that further investigation is warranted."
The campaign finance saga has dragged on for two years now, but the pressure on Reno to seek an independent counsel has increased in recent months. She has received forceful memos urging an outside probe from FBI Director Louis J. Freeh and Charles G. LaBella, the former head of her campaign finance task force. The House Government Reform and Oversight Committee voted Aug. 6 to hold her in contempt for refusing to turn over those memos.
Last night, the committee chairman, Rep. Dan Burton (R-Ind.), complained that a 90-day preliminary investigation is an unnecessary "delaying tactic" and repeated his call for an independent counsel to investigate the entire Clinton-Gore fund-raising operation.
"A 90-day pause is what the White House and DNC desperately need to get a distressful decision conveniently past this fall's election, and that's what the attorney general rewarded them with today," Burton said in a statement.
Sen. Orrin G. Hatch (R-Utah), the chairman of the Senate Judiciary Committee, agreed that Reno's action "could be perceived as a delaying tactic," but added, "I feel it would be prudent . . . to defer any conclusive comments on this matter."
Gore spokesman Christopher S. Lehane predicted that the evidence will vindicate his boss. "At whatever stage this review process ends, we are confident it will once again conclude that everything the vice president did was legal and proper."
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