Jones v. Clinton Special Report
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Paula Jones at her home in August. (AP)

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Full Coverage: Clinton Accused

N.Y. Developer Offers Jones $1 Million to Settle (Oct. 9, 1998)

President Increases Offer in Jones Suit (Oct. 2, 1998)

Jones Lawyers Propose $2 Million Settlement

By Peter Baker
Washington Post Staff Writer
Sunday, October 18, 1998; Page A04

Lawyers for Paula Jones formally presented a $2 million settlement proposal to President Clinton's legal team yesterday, but White House advisers are strongly opposed to the deal and believe Clinton likely will reject it today, according to sources close to the situation.

In exchange for Jones dropping her four-year-old sexual harassment claim, the president would have to pay $1 million and accept the unsolicited intervention of New York real estate developer Abe Hirschfeld, who has offered to pay Jones another $1 million to finally end the politically charged legal battle, the sources said.

Jones attorney James A. Fisher made the proposal in a late-afternoon telephone call to Clinton's chief attorney, Robert S. Bennett, who gave no formal reply and said he would call back today, sources said. The weekend talks represent the last chance to head off a courtroom confrontation in St. Paul, Minn., on Tuesday, when both sides are scheduled to present oral arguments to the 8th U.S. Circuit Court of Appeals about whether the lawsuit should be reinstated after being dismissed in April.

The Clinton camp appears almost certain to reject the proposal. Not only has Jones not come down from the $1 million she initially demanded from Clinton when the latest round of negotiations opened several weeks ago, but adding Hirschfeld to the mix makes the situation more problematic for the president.

Clinton, who has offered up to $700,000 through Bennett, is not acquainted with Hirschfeld, and the president's advisers believe it would look unseemly to accept such largess from the eccentric millionaire who made his fortune in the parking lot business.

Moreover, Clinton would open himself up to further political trouble. Hirschfeld has been indicted on 123 counts of tax evasion, and any subsequent actions taken in his tax case by the government could be subject to suspicion of influence by a president in his debt. A $1 million payment by a third party might also expose Clinton to tax liability himself.

Jones, who has said she was not in it for the money, decided to hold out for so much at the urging of her husband, Stephen, and Bill McMillan, an attorney who has stepped in to handle negotiations for her. Both Joneses are unemployed and they face huge legal bills, including an $800,000 lien filed by a previous legal team.

The strategy, though, has sown deep dissension within her camp. The lawyers are fighting among themselves over how much they will be paid, and some advisers despair that the unyielding approach Jones has adopted will doom any chance of an out-of-court resolution. Donovan Campbell Jr., Jones's chief attorney in the Dallas firm that has represented her for the last year, has effectively withdrawn from the talks, leaving it to his partner, Fisher, who has acted only after receiving authorization from McMillan, the husband of Jones's friend and adviser, Susan Carpenter-McMillan.

"The bottom line is there's no chance this will settle," said one person close to the talks.

Even if Hirschfeld were not involved, the president's advisers have made clear that he would not agree to make a $1 million payment. Although Jones has dropped her longstanding demand that any settlement include an apology for allegedly soliciting sex from her when he was Arkansas governor in 1991, Clinton does not want to pay so much that it would be seen as an admission that he did what he steadfastly denies doing.

On Clinton's behalf, Bennett responded to the first $1 million offer with a $500,000 counteroffer and later bumped that up to $700,000. People on both sides at one point believed they could narrow the difference and strike a reasonable deal if Hirschfeld were not involved, but Jones has shown no willingness to compromise.

Jones's suit was thrown out in April by a federal judge who ruled that even if Clinton did what he was accused of, his proposition was not severe enough to merit a sexual harassment claim. Since then, Jones has received new ammunition from independent counsel Kenneth W. Starr, who has charged that Clinton lied under oath and obstructed justice in the case by trying to prevent Jones's lawyers from learning of his affair with Monica S. Lewinsky.

© Copyright 1998 The Washington Post Company

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