Lawyers for two New York disco owners who charged that White House chief of staff Hamilton Jordan used cocaine at Studio 54 last year said yesterday they will allow the FBI to question their clients only as part of a deal to settle a pending tax evasion indictment.
Mitchell Rogovin, attorney for Ira Schrager, said government prosectors had agreed they would not force Schrager and Steve Rubell to cooperate in investigating the Jordan allegation unless there was a plea bargaining agreement on the tax counts.
"We don't want the government to get for nothing what we're trying to negotiate," Rogovin said. He added he and Robert Kasanow, Rubell's attorney, would not even cooperate with a special prosecutor until the tax case is resolved.
Rubell and Schrager were indicted in June on charges of skimming money from the operation of their popular night stop. Their attorneys were trying to get their multicount felony charge reduced to a misdemeanor, sources said.
Justice Department spokesman Terrence Adamson said last night that the department is not considering dropping the felony prosecution.
He also said there is no way the department can ignore the provisions of the Ethics in Government Act. "We cannot receive an allegation and leave it in a vacuum, dependent on the outcome of any deal. If we receive an allegation, it must be investigated."
The FBI investigation of Jordan started automatically last week when the allegation was made. This is because Jordan is covered by the act, which says a special prosecutor may be appointed when specific allegations are made against any of a number of high-ranking government officials.
Possession of cocaine is a misdemeanor charge that is rarely prosecuted on the federal level because prosecutors focus their limited resources on dealers who sell and distribute large quantities of drugs.
Attorney General Benjamin R. Civiletti ordered the investigation and has 90 days in which to investigate. He then must ask for appointment of a special prosecutor unless he concludes the charge was frivolous.
Rogovin declined to comment when asked whether he was trying to force Civiletti to ask for a special prosecutor by refusing to let his client testify during the preliminary investigation.
A Justice official last night disputed Rogovin's claim that prosecutors in the case listened to the allegation about Jordan contingent on a deal in the unrelated tax case. Rubell and Schrager were offered immunity from prosecution only for any part they played in the alleged cocaine incident, he said.
The original allegation said that White House press secretary Jody Powell witnessed Jordan's cocaine use in the secluded basement of Studio 54. Powell denied ever visiting the club. Rogovin said yesterday it is possible someone else was mistaken for Powell.
Powell said in a phone interview that he was concerned that "each time we have provided accurate information to refute inaccurate allegations, the same people immediately put out new versions incorporating our accurate information. At that rate we could end up with a story accurate in every degree except that it still says Hamilton Jordan took cocaine."