By Peter Baker
President Clinton rejected a $2 million settlement proposal by Paula Jones yesterday, leaving her lawyers scrambling to put together another offer in hopes of heading off a courtroom clash between the two sides Tuesday, according to sources close to the talks.
Jones had offered to drop her sexual harassment lawsuit if she received $1 million from the president and another $1 million from New York real estate magnate Abe Hirschfeld, who already had promised to give her that much if it would end what he considers an embarrassing national spectacle.
But in a telephone call yesterday afternoon, Clinton's chief attorney, Robert S. Bennett, told Jones lawyer James A. Fisher that such a plan was unacceptable, both because it required the president to pay too much and because it would leave him indebted to Hirschfeld, a quirky millionaire who parachuted into the case uninvited and faces a 123-count indictment for tax evasion, a source familiar with the situation said.
Bennett made no counter-offer and suggested that Jones should not assume that his last $700,000 proposal would remain on the table, the source said. The Jones camp last night hoped to make another bid this morning. "There's still a chance," said one person monitoring the talks.
Yet few involved were optimistic that a compromise could be found before Tuesday's oral arguments before the 8th U.S. Circuit Court of Appeals in St. Paul, Minn., where both sides are to debate whether Jones's lawsuit, dismissed in April, should be reinstated. The Jones team is so badly fractured among various lawyers that it took weeks to agree on the plan it presented Saturday, even though it included no concession by the former Arkansas state worker who accused Clinton of propositioning her in 1991, when he was governor.
Jones started this round of talks by asking for $1 million and abandoning her long-standing demand that Clinton apologize for dropping his pants and requesting oral sex, which he denies doing. Even though her case had been thrown out by a federal judge, the Clinton camp calculated that it was worth pursuing a settlement to spare the president appeals and to make it easier to cut a deal with Congress to avoid impeachment in the Monica S. Lewinsky matter. So Bennett countered with a $500,000 offer, then raised it to $700,000.
But several players entered the scene, including Bill McMillan, the lawyer husband of Jones's friend, Susan Carpenter-McMillan; Jones's previous attorneys, Joseph Cammarata and Gilbert K. Davis, who have filed an $800,000 lien to recover their legal bills; and Hirschfeld, the unpredictable businessman who decided out of the blue to offer a portion of his fortune to end the case.
Jones prodded by her husband, Stephen, and McMillan decided to insist on both the $1 million from Hirschfeld and the $1 million she demanded of Clinton. The president's advisers scoffed at that and have all but given up hope of settling the case.
The weeks of on-and-off talks were the most recent of a series of attempts to resolve the case out of court since it was filed in 1994 and underscored the complicated emotional and financial dynamics that have plagued would-be negotiators from the beginning. Bennett had reached a tentative $700,000 agreement with Cammarata and Davis last year, only to have Jones reject it and then part company with her lawyers. As recently as February the two sides quietly moved to within $150,000, only to have talks collapse again.
The case will take center stage again this week. In Little Rock today, U.S. District Judge Susan Webber Wright plans to begin releasing sealed files from the case, possibly including testimony that could prove uncomfortable for both plaintiff and defendant.
Then in St. Paul, the two sides will have a half-hour each to tell a three-judge panel why the case should or should not be revived. Fisher will present arguments for Jones; Bennett for Clinton. Bennett will allot five minutes of his time to Bill Bristow, attorney for the president's co-defendant Danny Ferguson, the Arkansas state trooper who escorted Jones to the hotel suite on the day in question.
The Jones team maintains that Wright abused her discretion in throwing out the case and that in addition, independent counsel Kenneth W. Starr's report to Congress demonstrates that Clinton committed perjury and obstruction of justice in the case, warranting a reversal. The Clinton side says Wright properly assessed the facts and the law and insists that the Starr report was irrelevant.
Even so, the president's advisers appear resigned to the prospect that the dismissal will be overturned and a trial ordered. In recent days, Bennett has told other White House advisers he is confident he can win the case at trial.
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