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U.S. Probes Whether Political Retaliation Is Behind IRS Audit of Paula Jones

By Peter Baker
Washington Post Staff Writer
Thursday, January 8, 1998; Page A08

Federal authorities are investigating whether an IRS audit of Paula Jones resulted from political retaliation on behalf of President Clinton, who is scheduled to be confronted by his accuser next week as she watches her attorneys question him under oath.

Treasury Department investigators interviewed Jones and her husband Tuesday night about the audit, which was launched last fall just after she refused to settle her sexual harassment case. The department confirmed yesterday that it asked its inspector general to review the matter after congressional Republicans charged the administration used the IRS to harass a Clinton enemy.

The new probe comes at a pivotal moment in the long-running legal battle as Jones's attorneys prepare to grill Clinton during a deposition slated for Jan. 17 at the White House. The interview would be the first time Clinton has given his account of the disputed events in person, a moment that promises to be all the more dramatic because Jones plans to attend to face the man she maintains propositioned her in a Little Rock hotel room in May 1991.

The deposition will cap an extraordinary five months in which attorneys for all sides have explored the most private details of the lives of both the president and his accuser, even as they waged furious side battles over issues from the tax status of the foundation funding Jones's fight to how she paid to put her dog in a kennel.

In one of the most important strategic developments of this period, Jones dropped her claim that her character was defamed, even though she said from the beginning that her only goal was to restore her good name. The move was intended to prevent her past sex life from being used against her. With the help of Clinton's lawyer, his co-defendant, Arkansas state trooper Danny Ferguson, had hoped to show that her reputation could not have been sullied because she was already known as promiscuous.

Under a deadline set by U.S. District Judge Susan Webber Wright, the lawyers must wrap up their evidence gathering, known as discovery, by the end of January, moving the case into a new phase as it proceeds toward a trial in May.

Because Wright imposed a gag order on most of the principals, details have been scarce, but several things appear clear as discovery comes to an end. Perhaps most significantly, the Clinton camp seems increasingly resigned to the prospect that the case will not be settled and will go to trial, despite the certainty of a media spectacle that would deeply embarrass the president. The discovery process turned up no testimony that has motivated Clinton, who has denied Jones's claim, to relent and offer the apology she insists she wants.

The calculation rests in part on the assumption that the most humiliating allegations that could come up in a trial have already been sufficiently aired in public. Therefore, the theory is, the president is better off seeking vindication in court, where some legal analysts believe Jones may have a tough time winning even if she is telling the truth.

"The odds are better that there'd be a trial today than they were eight weeks ago," said James Carville, a political consultant who is close to Clinton. "A verdict is going to be the thing that history by and large is going to recall."

As the evidence phase draws to a close, it also appears that a key element of Jones's claim may be dropped or played down. After she filed suit in 1994, Jones said she could identify "distinguishing characteristics" on Clinton's genitals.

But after she finally turned over an affidavit last October identifying what she meant, Clinton's chief lawyer, Robert S. Bennett, collected medical evidence to dispute it and Jones attorneys began saying they did not view the detail as central to their case. Moreover, Jones's lawyers reportedly have not sought an independent medical examination of Clinton, as her previous attorneys once wanted, suggesting to legal analysts that they may not use the "distinguishing characteristics" argument in court.

The president's deposition would mark a historic point. While Clinton testified by videotape in Whitewater proceedings, he apparently would be the first chief executive interviewed under oath as a defendant in a court case.

The deposition was secretly scheduled for Jan. 17, a Saturday when few reporters would be around. However, after the Washington Times disclosed the date yesterday, some close to the case said the White House may try to move it to try to avoid a media circus.

Whenever it is, Jones plans to be there. "She definitely wants to sit across the table from the man who either has to admit what he did to her or perjure himself," said her adviser, Susan Carpenter-McMillan. "She wants to look him in the eye."

Few believe, however, that her presence would rattle a politician well accustomed to hostile questioning. "This fellow's been before Ted Koppel, `Meet the Press,' " said Frank Morris, a Washington attorney who specializes in defending sexual harassment claims. "He's been in presidential debates. He's hosted the leaders of the Western powers. Is the fact that Paula Jones is sitting there going to put a scare into the president? It seems inconceivable to me."

But that does not mean it will not be an unpleasant scene. Joseph Cammarata, an attorney for Jones until last fall, said his successors presumably want to nail down Clinton's version of events so that it can be challenged later – and perhaps to send a message to the president about how ugly a trial might really be for him in hopes of persuading him to settle.

"There may be a strategy now to catch him, to test his credibility now, shake him up a bit to provide more opportunity to settle the case, give them a taste of what's in store," said Cammarata. "The first one's a cap gun," he said of the questioning at the pretrial deposition. "The next one's a bazooka."

Jones received notice of the IRS audit of her tax returns just days after she turned down a tentative settlement offer negotiated by Cammarata. Treasury officials said their interest was prompted by a letter sent by 21 members of Congress, including GOP Reps. Dan Burton (Ind.), Robert L. Barr Jr. (Ga.) and Jennifer Dunn (Wash.).

In the letter, they noted that the IRS also audited Billy Dale, the White House travel office director fired by the Clintons: "Either lightning really did strike twice – coincidentally hitting two of the President's most vocal opponents – or individuals within this government have grossly misused their authority to attack those they perceive as enemies of the President."

© Copyright 1998 The Washington Post Company

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