Jones Team Makes New Offer; Clinton Cools to Talks
Washington Post Staff Writer
Friday, November 6, 1998; Page A16
Paula Jones's lawyers made a new settlement proposal to President Clinton yesterday, offering to drop her long-running sexual harassment case for $950,000 without any outside payments by an eccentric New York millionaire who has inserted himself in the negotiations, according to sources close to the talks.
But bolstered by his party's wins in the midterm election, Clinton signaled that he was not in the mood to bargain. His attorney, Robert S. Bennett, told Jones's chief counsel, Donovan Campbell Jr., in a telephone call that the president's previous $700,000 offer was now off the table and that he would not respond any time soon to the new Jones proposal, the sources said.
"Basically, there's not a lot of interest in settling right now," said one person familiar with the situation. "Everybody's spirits are buoyed [at the White House] by Tuesday's election, so the prevailing view is: 'Let's wait and see what happens.' "
The latest entreaty came against the backdrop of new intrigue within the Jones camp as the lawyers who have represented her for the past year announced that they will quit once an appeals court decides whether to reinstate her dismissed lawsuit. The lawyers grew increasingly aggravated in recent weeks as Jones and her husband, Steve, disregarded their advice about how to settle the case and instead relied on the counsel of her friend, Susan Carpenter-McMillan, and her husband, attorney Bill McMillan.
Throughout the latest round of talks, Jones has held out for a hefty payment, even though she said when she filed the case in 1994 that she was not in it for money and would contribute any after-expenses proceeds to charity. This fall, she opened the bidding with a $1 million proposal and refused to come down after Clinton countered with $700,000. She then became entranced by a separate, unsolicited $1 million offer from real estate magnate Abe Hirschfeld and decided to insist on both for a combined $2 million.
But Hirschfeld, who said he wanted to help end a national spectacle, only managed to sour the talks. Clinton advisers were adamantly opposed to any settlement that appeared contingent on Hirschfeld's money, given that he is under indictment for state tax evasion. They were particularly infuriated by a weekend news conference in which Jones and Hirschfeld mugged for the cameras with a dummy check.
Even Jones's lawyers concluded that Hirschfeld had become a deal-killer, especially when he set new conditions this week after the news conference. The lawyers convinced Jones to drop her involvement with Hirschfeld to make yesterday's $950,000 proposal. "There's no linkage to Hirschfeld," one source said. "It assumes there will be no Hirschfeld money."
Nothing would prevent Jones from resuming her deal with Hirschfeld after Clinton agreed to a settlement, however, leaving the president's advisers skittish. Bennett told Campbell he would take the new offer to Clinton but said he would not respond for many days, sources said.
Clinton advisers, according to one source, are not anxious to respond at a time when the Jones camp appears to be imploding and would rather put more time between Hirschfeld's involvement and their reply. Moreover, with this week's electoral successes and the fading impeachment threat, the Jones case no longer seems as dangerous to the Clinton camp.
"I do not believe it is productive or appropriate to discuss in public these matters at this time," Bennett said in a statement.
The impending withdrawal of Jones's lawyers, first reported in yesterday's New York Times, echoed the situation a year ago when her previous legal team quit after she refused to accept a tentative $700,000 settlement proposal they had negotiated with Bennett.
The Dallas law firm that took over, Rader, Fisher, Campbell & Pyke, and the Rutherford Institute, the Virginia foundation that provided financial backing, sent Jones a letter Tuesday informing her that they would leave the case after the 8th U.S. Circuit Court of Appeals issues its ruling. The Jones lawyers presented oral arguments Oct. 20, asking the court to overturn the ruling by U.S. District Judge Susan Webber Wright, who threw out the case in April.
"We strongly believe that Mrs. Jones's case is meritorious," the lawyers said in a statement confirming their decision to quit. "We are optimistic that the 8th Circuit will reverse . . . [and] on final trial, we believe that a jury will find Bill Clinton . . . violated Paula Jones's civil rights."
While denying any dispute over fees, sources said the lawyers were exhausted and dispirited after devoting countless hours to the case without payment, only to find their client seemingly resistant to a reasonable settlement. The law firm invested more than $1.5 million in legal work, while the Rutherford Institute spent about $400,000 in litigation expenses.
"It's a sad situation, sad all the way around," said John W. Whitehead, the institute's president. "We put a long, hard year into this case."
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