By George Lardner Jr.
Washington Post Staff Writer
Friday, April 17, 1998; Page A18

The Justice Department is still attempting to strike a compromise with independent counsel Kenneth W. Starr over Secret Service testimony concerning President Clinton's relationship with former White House intern Monica S. Lewinsky.

Deputy Attorney General Eric H. Holder Jr. said yesterday that he believes a valid legal privilege could be invoked to shield Secret Service officers from testifying about what they have seen and heard while protecting the president. However, he made clear that Justice officials hope to avoid a court fight over the issue.

"It's our hope to resolve this matter short of litigation, to try to work out something with the independent counsel's office that will be satisfactory both to them and to us," Holder told reporters.

Signaling the apparent breakdown of weeks of negotiations, Starr last Friday filed a sealed motion in federal court to compel testimony from Secret Service personnel. But Holder said yesterday the two sides are still talking and he was "really confident" that a solution could be found. He said possible compromises were "only restricted to the creative abilities of the people who are in the process of negotiating."

According to Justice Department officials, several agents and officers have already made claims of privilege when questioned by Starr's prosecutors. Justice officials and the independent counsel's office had been negotiating whether questions could be worded narrowly enough to give Starr the information he wants without violating the privilege that the Treasury Department wanted to assert as the Secret Service's parent agency.

From close to the start of his investigation of whether Clinton had a sexual relationship with Lewinsky and tried to cover it up, Starr has been trying to find out whether Secret Service officers saw the president with her or heard about their encounters from others at the White House.

Lawyers at Justice have drafted papers asserting the privilege, which Holder said is grounded in "vital national security interests." By that, he said he was referring to "the question of the protection of the president."

Holder declined to spell out "the parameters" of the new and untested privilege "other than to say we think there's a good-faith basis for it." He agreed that it would take a court case to establish such a privilege as a clear matter of law but indicated that officials at Justice would be satisfied if they could reach "a general consensus" with Starr's office that the privilege exists. He said it was not being raised "in an attempt to impede any investigation."

Starr did not appear mollified, telling Attorney General Janet Reno yesterday in a letter primarily dealing with another dispute that Justice's assertion of "various testimonial privileges . . . [is] hindering our investigation."