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IRS Audit of Paula Jones Is 'Harassment,' Adviser Says

By George Lardner Jr.
Washington Post Staff Writer
Monday, September 15 1997; Page A06

The Internal Revenue Service has decided to audit the income tax returns of Paula Corbin Jones, who is suing President Clinton on charges of sexual misconduct, the chairman of Jones's legal defense fund said yesterday.

Jones and her husband, Stephen, were notified Friday, just a few days after Jones rejected an out-of-court settlement urged upon her by her lawyers, according to Susan Carpenter-McMillan, Jones's spokeswoman and chairman of the Paula Jones Legal Defense Fund.

"I call it harassment," Carpenter-McMillan said on NBC's "Meet the Press," confirming a report in yesterday's Washington Times. She said the IRS is even asking for apartment rental receipts although the Joneses do not claim the rent as a deduction.

Carpenter-McMillan said she was not accusing the White House or President Clinton of using the IRS to harass his detractors. "I would never be so blunt," she said. "I just find it very coincidental."

White House spokesman Lanny J. Davis declined to comment when asked if anyone at the White House had a role in the IRS decision. He referred a reporter to the IRS.

Asked the same question, IRS spokesman Frank Keith said federal tax law prohibits him from saying anything. "Absent permission from the taxpayer in the form of a written waiver," he said, "we cannot confirm or deny that an audit is underway." In general, he said, "the IRS audits tax returns for tax purposes."

This is "the first time in their entire lives" that either Paula Jones or her husband had been picked out for an audit, Carpenter-McMillan said. She said their 1995 return was selected for scrutiny although they were asked for details about their 1994 and 1996 returns as well. Stephen Jones reportedly earns $37,000 a year; Paula Jones, a housewife and mother, is not employed.

A former Arkansas state employee, Jones filed a lawsuit against the president in 1994, charging that he asked her for oral sex in his room at Little Rock's Excelsior Hotel on May 9, 1991, when he was governor of Arkansas. Clinton has denied her allegations.

After the Supreme Court ruled in May that the case could not be postponed until Clinton left office, her lead attorneys, Gilbert K. Davis and Joseph Cammarata, recommended this month that she settle for $700,000 and a general statement of regret from Clinton that would not admit any impropriety on his part but would attest that she did not engage in any sexual misconduct either.

The two lawyers withdrew from the case last Tuesday, citing "fundamental differences" with their client. Carpenter-McMillan, a former television commentator who met Paula Jones two years ago and has become her daily adviser, urged her to reject the settlement, calling Clinton's proposed statement "vanilla language" rather than an apology.

Carpenter-McMillan said yesterday that even the word "apology" might not be necessary, "but something has to be worked out so that it's broad enough, obviously, for the president to accept it, but narrow enough for Paula to accept it and the American public to realize that she wasn't the one that did something wrong. . . . This has never been about money for Paula. . . . Paula's never even talked to me about the money."

Disclosure of the IRS audit raised frowns from Rep. Dan Burton (R-Ind.), whose House Government Reform and Oversight Committee begins hearings Wednesday on campaign financing abuses. He said it reminded him of the time he sent a subpoena to Attorney General Janet Reno for information regarding the late Commerce Secretary Ronald H. Brown.

"Two days after I sent that subpoena, an FBI agent walked into my campaign headquarters and asked for five years of my records," Burton said in a separate appearance on "Meet the Press." He said that "we in the Congress . . . ought to make absolutely sure that there's not an abuse of power by this administration."

Burton and other leading Republicans were at the same time harshly critical of Reno for not yet having requested the appointment of an independent counsel to take over the Justice Department's investigation of Democratic presidential fund-raising abuses.

Reno "should have appointed an independent counsel a long time ago," Burton said. "We've gone way beyond the pale."

Sen. Mitch McConnell (R-Ky.), on "Fox News Sunday," said that if Reno fails to seek the appointment, "she runs the risk . . . of having impeachment proceedings started against her in the House because she's refusing to do her duty."

Senate Majority Leader Trent Lott (R-Miss.) said on CBS's "Face the Nation" that talk of impeachment was "premature." But he said if Reno does not go forward with an independent counsel, especially in light of disclosures in The Washington Post that Vice President Gore raised funds that wound up in "hard money" accounts at the Democratic National Committee, "we would have to act in some responsible way."

While "preliminary steps" toward impeachment could begin in the House, Lott said, "the Senate also has options in terms of resolutions of condemnation."

House Speaker Newt Gingrich (R-Ga.), on ABC's "This Week," dodged questions about whether Reno should be impeached. But he called on Reno to seek an independent counsel. "I see no excuse for avoiding the appointment of an independent counsel because the assertions of potential violation of law are so clear and decisive," he said.

© Copyright 1997 The Washington Post Company

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