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Robert S. Bennett
Robert S. Bennett, the president's personal attorney in the Paula Jones lawsuit, after its dismissal Wednesday. (AP)

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_ Full Coverage: Clinton Accused Special Report

_ Key Players: Robert Bennett, Donovan Campbell Jr., John Whitehead

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Lawyers' Bills Come Due

By Peter Baker
Washington Post Staff Writer
Saturday, April 4, 1998; Page A12

Facing at least $1.5 million in unpaid bills from the Paula Jones case, President Clinton's legal team is preparing to file suit against two insurance companies that stopped financing the president's defense last year to force them to reverse their decision.

Clinton's lawyers have hired another prominent Washington law firm, Covington & Burling, to handle the dispute with the insurers, and they plan to devote more attention to the issue now that the Jones case has been dismissed, a source familiar with the situation said yesterday.

The president's attorneys at the high-priced law firm Skadden Arps Slate Meagher & Flom have tried unsuccessfully for months to persuade the companies to continue footing their bill and now appear to be using the threat of a lawsuit to increase the pressure. But industry officials said the two firms -- State Farm Mutual Automobile Insurance Co. and Pacific Indemnity, a subsidiary of Chubb Group Insurance -- have no intention of volunteering any more money because they believe they have fulfilled the terms of the policies taken out by Clinton years ago in Arkansas.

"Just because we have deep pockets doesn't mean we're responsible for paying President Clinton's legal bills," said Steven Goldstein, vice president of the Insurance Information Institute, a trade group that has followed the dispute closely.

On the other side of the Jones suit, the Dallas law firm representing her, Rader, Campbell, Fisher & Pyke, was operating on a contingency contract and so finds itself out $900,000 in hourly fees that will go unpaid unless an appeal reinstates the case. In addition, the Rutherford Institute, the Virginia group sponsoring her legal battle, has paid more than $270,000 in related litigation expenses, for such costs as travel and private investigators, but collected only $100,000 through fund-raising. Jones separately has received at least $100,000 through her own direct-mail appeal but it has not gone to pay her lawyers.

At the same time, her previous lawyers, who quit in September, now cannot recover the $800,000 lien they placed against any winnings she reaped from the lawsuit. One of them, Joseph Cammarata, said yesterday that they are considering their own suit to collect -- not against their former client, but against Clinton on the grounds that they defeated his bid for delay in a successful Supreme Court appeal last year.

The maneuvering over money was probably inevitable after Wednesday's decision by U.S. District Judge Susan Webber Wright to dismiss the Jones lawsuit, which Jones may still appeal. For all of the high-octane news media exposure of the case, much of the extensive legal work on both sides has gone uncompensated.

Clinton is not nearly as wealthy as his presidential predecessors and has had so much trouble raising money for a legal defense fund that he dissolved his first one and recently opened a new trust with fewer restrictions. Jones does not work outside the home and lives in a one-bedroom apartment in Long Beach, Calif., with her husband, Steve, who works for an airline. Neither plaintiff nor defendant has personally forked over even a fraction of their massive legal bills.

Until September, State Farm and Chubb picked up the cost of Clinton's defense, paying an estimated $1.5 million to Robert S. Bennett and Skadden, Arps. Clinton was covered by personal liability umbrella policies commonly offered on a standard homeowner's policy, but critics contended the companies were not obligated to pay and were extending the president special treatment.

The insurers dropped out of the case after Bennett succeeded in persuading Wright to throw out part of the Jones suit, including the claims that the firms said they covered. Chubb executives could not be reached late yesterday, but State Farm spokesman Steve Vogel said the firm's commitment to Clinton is over. "We performed our obligation to the policy," he said.

Conservative attorney Larry Klayman argues that State Farm did more than that and his group, Judicial Watch, has filed a complaint with State Farm on behalf of a policyholder, seeking to compel the firm to take back its money. The company has launched an internal review of the matter, but Klayman said yesterday he would file suit in Illinois immediately if Bennett seeks more money from State Farm.

How much the president owes his attorneys is uncertain. A source knowledgeable about his defense said it surely matched the $1.5 million paid by the insurers because the seven months since then involved intense pretrial discovery in which lawyers flew around the country interviewing dozens of witnesses. If the Jones team incurred nearly $1.2 million in expenses since October, with its lawyers making no more than $200 an hour, the Clinton team certainly far outpaced that, with Bennett's fee approaching $500 an hour.

© Copyright 1998 The Washington Post Company

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