Hamilton Jordan, the controversial White House chief of staff, is facing an FBI investigation into an allegation that he used cocaine in a visit to New York's Studio 54 discotheque last year.
The Department of Justice ordered the investigation after an attorney for the defendants in a federal criminal tax prosecution said one of the defendants saw Jordan use the drug at Studio 54 in early 1978, according to Terrence Adamson, chief spokesman for the department.
Because possession of cocaine is a misdemeanor under the U.S. Code, Adamson said, and "pursuant to the special prosecutor requirements of the Ethics in Government Act," Attorney General Benjamin R. Civiletti has ordered that the FBI conduct a preliminary investigation of the allegation.
The White House said last night that Jordan flatly denies the allegation.
"This allegation comes from persons indicted and awaiting trial for criminal tax evasion." White House spokesman Rex Granum said. "These criminal defendants have a clear interest in making false and sensational charges in an effort to bargain for leniency."
The allegation was made by an attorney for Steve Rubell and Ian Schrager, owners of Studio 54, who were indicted in June on charges of tax evasion, obstruction of justice and conspiracy.
The attorney also said that one of his clients told him presidential press secretary Jody Powell witnessed the incident. But Powell said he had never been to Sudio 54, according to Granum.
The new allegations come just a year after Dr. Peter Bourne, then the president's chief adviser on health and drug abuse, resigned under fire when Prince William County, Va., authorities said they'd apprehended a White House aide with a prescription, signed by Bourne, for the drug Quaalude, a widely abused depressant.
Reports later circulated that some White House staffers had used drugs, particularly marijuana and cocaine. The reports were denied.
Jordan was named chief of staff July 17 in the now-famous shakeup involving Cabinet members and top executive office aides.
He has been involved in one controversy after another from his separation from his wife, Nancy, early in 1978, to an incident in a Washington bar where it was alleged that he spit a drink at a young woman. He denied having done that.
In late 1977, at a dinner party attended by the ambassadors of Egype and Israel, Jordan allegedly made a salacious remark to the wife of a Egyptian ambassador. Jordan denied having done anything of the sort.