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To Gadfly of the Right, Clinton Administration Is Unsafe at Any Speed

By Paul Blustein and Toni Locy
Washington Post Staff Writers
Sunday, November 17 1996; Page A17

Larry Klayman points proudly to a red swivel chair in his law office conference room where, just a few days ago, one of the central figures in the Democratic Party's fund-raising controversy underwent questioning for more than five hours.

"That's where John Huang sat," Klayman said, savoring the memory of the media hordes who showed up outside his Southwest Washington office to cover his interrogation of Huang, a former Commerce Department official and Democratic National Committee fund-raiser. "We're going to call that the `John Huang chair.' "

This is what Klayman has long yearned for, a day when he could use his legal prowess to embarrass the Clinton administration, and people would really start paying attention.

Klayman is the "chairman and general counsel" of Judicial Watch, an organization he runs out of his law office that has filed three lawsuits alleging a variety of wrongdoing by leading members of the Clinton administration. For the most part, his crusade has been lonely and obscure.

Obscure, that is, until last month, when headlines began blaring allegations about foreign donations, fund-raising irregularities and influence peddling involving Huang and other Clinton loyalists at the Commerce Department, the DNC and the White House.

Suddenly Klayman was riding the political whirlwind, thanks to a suit he had been pursuing seeking documents about the department's alleged special treatment of fat-cat Democratic donors on overseas trade missions. Klayman persuaded a federal judge to let him depose Huang in the case, and enjoyed a proverbial 15 minutes of fame when Huang reluctantly came out of seclusion to answer questions.

A bespectacled, intense, 45-year-old, Klayman is a quintessential Washington gadfly who, depending on your point of view, either delights or infuriates. He sees himself as a Ralph Nader of the right, a free-market conservative who uses the law to expose abuses of government power. Critics see him as a self-promoter with a penchant for leveling unsubstantiated allegations; in cases involving his private clients, Klayman has been severely sanctioned by several judges, including one who permanently barred the attorney from his courtroom. Whichever perception is correct, what's clear is that Klayman is making some powerful people pretty uncomfortable.

"My brother said to me the other day, `Larry, you're no longer just a nuisance,' " Klayman said.

Now that he has risen above the nuisance level, Klayman is reveling in the swirl of questions about who he is, whose ax he's grinding, who his backers are. He is driven by his ideological beliefs, he said, not money. He claims to have received less than $10,000 in donations last year, and no single check bigger than $1,500. He says that his international trade law practice provides enough of a living for him to devote most of his spare time to Judicial Watch and to his other organization, the International Center for Economic Justice, which preaches the virtue of free trade.

"Other people play golf," Klayman said. "I do this." His crusade did not slacken after his chief target, Commerce Secretary Ronald H. Brown, was killed in an airplane crash in April. Klayman said he remains as offended as ever by what he calls the administration's distortion of trade policy on behalf of moneyed interests. "This case is not about Ron Brown," he said. "It's about the Clinton administration and the Commerce Department."

The story of how Klayman became a prominent thorn in the administration's side began in the autumn of 1994, when Brown, who was taking U.S. business delegations abroad on trade missions to promote American exports, was accused in the news media of having selected a disproportionate number of Democratic contributors for the often-lucrative trips.

To Klayman -- and to a number of reporters who examined the evidence -- the coincidences seemed too striking to ignore: Among the business executives who accompanied Brown to China, for example, was Bernard Schwartz of Loral Corp., who was quoted as saying he hoped Brown's clout would help his firm win as much as $1 billion in Chinese contracts. Schwartz had contributed $100,000 to the DNC, which Brown previously headed, a couple of months before the trip.

About one-third of the executives on Brown's four trade trips had donated substantial sums to the Democrats, either individually or through their companies, according to a September 1994 article in the Wall Street Journal. Although the Commerce Department maintained that the participants were chosen on merit -- many of them, after all, had contributed to the Republicans as well -- some of the circumstances suggested politics played a role. For instance, Melissa Moss, the department official with chief responsibility for selecting the companies, had served as the DNC's finance director when Brown was party chairman.

Klayman, who formed Judicial Watch in the summer of 1994, swung into action that September with a demand under the Freedom of Information Act that the Commerce Department furnish all documents relating to the trade missions. The department's lawyers, protesting that such information would take months to produce, asked him to narrow his request. Ever suspicious of coverups, Klayman insisted on getting everything, and after a mutual barrage of recriminations he filed suit in U.S. District Court. In May 1995, Judge Royce C. Lamberth ordered the department to hand over 27,000 pages of documents.

Asked for the most damning evidence that he found after sifting through that mountain of paper, Klayman turns to his wife, Stephanie, who manages his office. "Could you ask Mark to bring the `smoking gun' file?" he says.

The smoking gun reference suggests a politicized atmosphere at Commerce, though department officials dismiss this as inconsequential. Among the documents is a memo by an executive of Entergy Corp., one of the firms included on Brown's China trip, in which the executive recounts a meeting with a department official, Jude Kearney, about the competition for seats on Brown's plane. Kearney, according to the memo, "indicated that politics of the situation were important and he as a political appointee would push those that were politically connected."

There are also letters to the Commerce Department containing implicit promises of contributions from companies and their representatives seeking to be selected for the trips. One is addressed to Brown from a lawyer representing E. Glenn Biggs, a director of the multinational chemical company Diamond Shamrock, who went on Brown's Latin America trip. "Glenn Biggs was not only a long-time supporter of [Treasury] Secretary [Lloyd] Bentsen when he was in the Senate, but the Democratic Party in Texas," the letter said.

Klayman says he would be able to show more conclusively what sort of skulduggery has been going on at Commerce, if only the department were forced to turn over more documents that he has asked to see.

"This has been a stonewall from day one," he says. "We think there's a whole treasure trove out there that's going to tell the whole story."

So far, however, Klayman's repeated claims of a cover-up have not come to much. Last month, for example, he requested an "emergency hearing" at which he momentously asserted that Commerce Department employees had shredded documents after Brown's death, and that Brown's family had taken official agency records from the late secretary's office. The shredded documents turned out to have been duplicates of Brown's personal financial records, the originals still held by his widow. As for the papers taken by Brown's family, Judge Lamberth privately reviewed them, ruled them irrelevant to the case and returned them to the Browns.

The department issued an exasperated statement this month calling Klayman's charges "reckless and unsubstantiated." It was hardly the first in which Klayman's adversaries have taken umbrage at his tactics.

In a 1989 case involving a dispute with lawyers for a bank, Klayman was ordered by Lamberth to pay his opponents' legal fees for mischaracterizing the law and filing a "frivolous" motion. Lamberth later vacated the sanctions when a settlement was reached.

In a New York case early this year involving a wire importer, a federal judge imposed $25,000 in sanctions on Klayman for making unsubstantiated claims. An appeals court overturned the penalty earlier this year but lambasted Klayman for "inaccurate characterizations of the record and comments that we consider entirely inappropriate."

And in a 1992 case, a federal judge in California ordered Klayman to pay some of his opponent's legal fees and decreed that Klayman never return to his courtroom. Klayman, who is Jewish, asserts that the judge is antisemitic and biased against his Taiwanese client. But an appeals court slapped Klayman down, declaring that he had "taken considerable liberties with the record and mischaracterized statements therein."

"I am not embarrassed by this. I'm proud of it," Klayman said. "It was a significant moment in my life, when I confirmed that not everyone is equal in front of the law, and there are people who harbor biases." The episode was crucial in his decision to found Judicial Watch, he says.

Where Klayman hit pay dirt, in a public relations sense, was when he demanded last month to depose Huang only 11 days after the first news article questioned Huang's fund-raising tactics in the midst of the presidential campaign.

The move outraged Commerce Department officials, who said Huang had played virtually no role in setting policy during his 18 months as a deputy assistant secretary and that his relevance to Klayman's Freedom of Information Act case was negligible. Nevertheless, Huang was acting like a man who had something to hide; his lawyer claimed he would not be available until Nov. 6, one day after the presidential election. Only after Lamberth took the extraordinary step of ordering U.S. marshals to help find Huang did he finally agree to appear for questioning.

All of which turned Klayman's case into a national media event, replete with scenes on network TV of the mysterious Huang muttering "No comment" as he entered Klayman's office. Huang's responses under oath were virtually devoid of news. "Mr. Huang is very, very sophisticated," Klayman said ruefully.

Nonetheless, Klayman remains undaunted, ever hopeful he will find truly explosive evidence in the next deposition, or the next box of files, and Washington will be agog.

"We are," Klayman declared, "the mouse that roared."

© Copyright 1996 The Washington Post Company

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