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Full Coverage: Clinton Accused

Legal Questions Buffet Both Sides in Jones Settlement Deal

By Peter Baker
Washington Post Staff Writer
Wednesday, November 18, 1998; Page A10

The ink has barely dried on the $850,000 settlement agreement between President Clinton and accuser Paula Jones, but already sticky financial and legal disputes are threatening the deal before any money can change hands.

The issues boil down to where Clinton will get the cash and how Jones will disburse it. As the president's advisers try to put together a package that will not cost him anything personally, they are facing a new court challenge. And a fee dispute among past and present Jones lawyers has led to the prospect of even more litigation.

The hitches are unlikely to unravel the settlement, according to lawyers involved, but could make for a trying few weeks as they try to iron them out. Even the pro-forma filing of a motion asking a federal appeals court to dismiss the case in accordance with the settlement agreement was briefly held up yesterday amid a last-minute disagreement over whose names would be on the check.

In the end, the motion was filed with the 8th U.S. Circuit Court of Appeals at 4:19 p.m. yesterday. The three-judge panel that has been considering whether to reinstate Jones's case may act as early as today to formally and finally dispose of the sexual harassment lawsuit that has plagued the president for 4 1/2 years and set in motion events that led to the impeachment hearings that open on Capitol Hill Thursday.

Before they decide, though, the judges will have to consider a petition filed yesterday by Judicial Watch, a conservative watchdog group that has filed numerous lawsuits against the Clinton administration. Yesterday's brief asked the court to block the settlement because it may be financed by the president's legal defense fund or his insurance companies, arguing that either would be improper.

"We're not against the settlement," said Larry Klayman, chairman of Judicial Watch. "That's your right. But use your own money. Why open yourself to influence-peddlers?"

The Clinton camp has not decided how to come up with the $850,000. Although advisers have considered Clinton's defense fund, which has more than $1.5 million, sources said yesterday that option may be ruled out because the fund's bylaws do not envision contributing to any settlement.

The president's advisers instead hope to come up with most of the money from the same insurance companies that have paid some of his legal bills. Clinton lawyers have a tentative agreement with Chubb Group Insurance to buy out his policy for about half of the settlement cost and sources said yesterday that the lawyers are still negotiating with State Farm Mutual Automobile Insurance Co., hoping to recoup the rest.

If they fail to come up with the full amount from the insurance companies, White House advisers are looking at setting up a new, separate organization to solicit donations with the help of Clinton fund-raiser Terence R. McAuliffe, sources said.

Once the money is in hand, the question becomes who to give it to. The settlement agreement signed Friday said the money would "be paid to the plaintiff" within 60 days, but Clinton's attorney, Robert S. Bennett, may also list the names of her former lawyers on the check because they have an $800,000 lien against any proceeds from the suit.

If he did not put their names on the check, several lawyers said, Clinton could be exposed to a lawsuit by those ex-Jones lawyers, Joseph Cammarata and Gilbert K. Davis. But putting the former lawyers on the check drew an objection from Jones's current lawyers, who are slated to receive one-third of the $850,000. Attorney Donovan Campbell Jr. wrote Bennett yesterday withholding permission to file the motion to dismiss the case unless he got a written commitment that the check would not include any name other than Jones's. But Bennett then called another Jones lawyer, William N. McMillan, and persuaded him to intervene. McMillan stepped in and allowed the motion to be filed.

Cammarata said it was "unfortunate" that Jones, through Campbell, appeared to be "reneging" on her agreement to pay the lawyers who took her case all the way to the Supreme Court and won the right to proceed. "Her plan is doomed," he said. "We're not going away without a fight."

The current Jones team could argue that the lien filed by Cammarata and Davis was not valid and that other lawyers did much of the work for them. But McMillan said yesterday that he was optimistic about negotiations with Cammarata and Davis that will begin today. "I've got two months to take care of it," he said, "and I'm confident I'll be able to do that."

© Copyright 1998 The Washington Post Company

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