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Clinton Plans New Fund to Pay Legal Fees

By Thomas B. Edsall
Washington Post Staff Writer
Wednesday, February 4, 1998; Page A01

President Clinton is planning to set up a new legal defense fund with a goal of raising at least $3 million to $4 million to cover his exploding attorney fees, according to sources.

Confronted with millions of dollars of legal expenses stemming from the Whitewater investigation, the Paula Jones sexual harassment suit and the allegations over Monica S. Lewinsky, the Clintons are eager for help to pay the bills.

White House officials are considering placing Democratic money man Terence R. "Terry" McAuliffe at the helm of the new effort. Unlike a previous legal defense fund that was folded at the end of 1997, there would be no prohibitions governing the new one against accepting donations from corporations, unions or lobbyists.

In addition, current plans call for a limit of $10,000 on the maximum size of contributions, compared to a $1,000 limit per donor called for by the original defense fund.

Sources said White House officials had planned to announce the new fund at the end of last month. But the furor prompted by the disclosure of allegations that Clinton had sexual relations with a White House intern and then urged her to lie about it led to postponement of the announcement.

White House officials and McAuliffe declined to discuss the legal defense fund yesterday. "All answers about it have to come out of the White House," McAuliffe's assistant said. White House legal counsel Charles F.C. Ruff's office referred inquiries to the press office. Joe Lockhart, press spokesman, said he had heard peripheral discussions of McAuliffe and a new fund, but could not confirm any specific plans.

At the time the original fund was disbanded, Clinton said he asked the White House legal counsel to explore "the ethical and legal requirements that would govern any future efforts" to raise defense money.

The earlier legal defense fund suffered damaging publicity when it was disclosed that Yah Lin "Charlie" Trie brought $460,000 worth of sequentially numbered money orders in a paper bag to the fund headquarters. The money, along with $180,000 more Trie had helped raise, was returned.

Trie, who was indicted last week on charges of funneling illegal campaign contributions to the Democratic National Committee, turned himself in to FBI agents yesterday at Dulles International Airport.

At the time the fund was closed on Dec. 31, the Clintons' outstanding legal bills totaled $2,993,396. They have been mounting daily since then.

McAuliffe served as finance chairman of the Clinton-Gore '96 campaign and raised the legal maximum in record time. In the aftermath of the campaign, he has appeared before a grand jury investigating the reelection of Ron Carey as president of the Teamsters union. In addition, the Labor Department is investigating the International Brotherhood of Electrical Workers' pension fund, which was involved in Florida real estate transactions with McAuliffe.

In light of these legal issues, it remained undecided whether McAuliffe would officially be named chairman of the defense fund, but sources said McAuliffe has been selected by Clinton to be the lead fund-raiser, not only for the fund but also for a drive to raise more than $10 million for a Clinton presidential library.

Some campaign finance reformers who had been critical of the original legal defense fund voiced ambivalence about the new plans. "They [the Clintons] have a serious problem here. The bottom line is this president is in a jam," said Charles Lewis, executive director of the Center for Public Integrity.

Lewis said the money will come in large part from people and corporations with a strong interest in government decisions, or the president's defense will be conducted without fee by lawyers from three influential firms. However Clinton gets his support, Lewis said, "this is money he will remember, this is blood money."

The defunct defense fund was set up in 1994 with such prominent board members as three former university presidents, John Brademas of New York University, Michael I. Sovern of Columbia and Theodore M. Hesburgh of Notre Dame, and two former attorneys general, Elliot L. Richardson and Nicholas deB. Katzenbach. The fund raised substantial sums at first, $608,080 during the second half of 1994, for example. But by 1997, administrative costs of $92,000 exceeded the $80,000 the fund collected.

Staff researcher Ben White contributed to this report.

© Copyright 1998 The Washington Post Company

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