Paula Jones at her home in August. (AP) From Clinton's Aug. 17 Testimony: They knew they had a lousy case on the facts. And so their strategy, since they were being funded by my political opponents, was to have this dragnet of discovery... What they wanted to do, and what they did do, and what they had done by the time I showed up here, was to find any negative information they could on me, whether it was true or not; get it in a deposition; and then leak it, even though it was illegal to do so. Read more. Related Links • Full Coverage: Clinton Accused • Jones Case Judge May Cite Clinton (September 2, 1998) • Text of Jones's Appeal • Judge Dismisses Jones v. Clinton Lawsuit (April 2) • Clinton Lawyer Suggests Way to Settle Jones Case (June 2, 1997) • Key Player Profiles: Robert Bennett, Donovan Campbell

By Peter Baker and Susan Schmidt
Washington Post Staff Writer
Friday, September 25, 1998; Page A01

President Clinton's lawyers are quietly exploring a financial settlement with Paula Jones so that she would withdraw her pending appeal and finally end the long-running legal battle that led to the crisis now threatening his presidency, according to sources familiar with the situation.

Attorneys for Clinton and Jones have conferred in recent weeks about whether a deal can be reached before an appeals court hears oral arguments next month on her bid to reinstate the sexual harassment lawsuit that was dismissed by a Little Rock federal judge in April, the sources said.

"There's some talk going on," said a source who did not want to be named.

The tentative discussions in the case that helped generate the impeachment report sent to Congress by independent counsel Kenneth W. Starr involve a possible payment by Clinton in the range that the two sides contemplated during past failed negotiations. Jones rejected a proposed $700,000 settlement from Clinton a year ago because it did not include an admission and apology from the president, but her camp suggested last February, just weeks before the case was thrown out, that she would accept $900,000.

The renewed contact comes at a time when Clinton allies also are trying to cut a deal with Congress to head off impeachment by agreeing to a censure or some other punishment for his actions regarding Monica S. Lewinsky. While Republican leaders have rebuffed the idea for now, White House advisers are cautiously optimistic about reaching an accord after the November congressional elections. Getting rid of the Jones suit as well would help clear the deck for the final two years of Clinton's term.

Details remained sketchy yesterday and it was unclear how serious the talks are. Sources said the Jones team initiated the new discussions about two weeks ago with a letter proposing a specific payment but dropping Jones's long-standing demand for a written statement of contrition by the president. Clinton's side rejected the proposal, and the matter was dropped until Clinton attorney Robert S. Bennett called Jones's Dallas-based lawyers and floated a counter-proposal, a source said.

Neither side would discuss that yesterday. "I'm not going to comment on that," Bennett said. "And I don't know who on Earth would be saying that because they don't know what they're talking about."

Both sides have some motivation to find a resolution now. In notifying Congress of 11 possible counts for impeachment, Starr accused Clinton of committing perjury, tampering with witnesses and obstructing justice during the Jones lawsuit.

Clinton has maintained that, while misleading, his answers were "legally accurate" during a Jan. 17 deposition in the Jones case when he denied having a sexual relationship with Lewinsky. His Aug. 17 admission before Starr's grand jury and in a televised speech that he had an "inappropriate intimate" relationship with Lewinsky gave ammunition to Jones's lawyers as they try to revive her suit.

The Jones lawyers, who plan to cite the developments in their final appeal brief to be filed next Tuesday, have been preparing a separate motion asking U.S. District Judge Susan Webber Wright to hold Clinton in contempt for his actions in the case.

Wright, who came to Washington to oversee the president's deposition, was the first one to raise the possibility of a contempt citation against Clinton. In a footnote in an unrelated ruling earlier this month, she wrote, "Although the Court has concerns about the nature of the President's January 17th, 1998 deposition testimony given his recent public statements, the Court makes no findings at this time regarding whether the President may be in contempt."

Legal experts remain uncertain that the president's admission would necessarily help Jones revive her lawsuit, though, because Clinton's attorneys argue that Lewinsky was not central to the case. Wright had excluded any evidence about Lewinsky months before throwing the lawsuit out altogether. In dismissing the case, Wright ruled that Jones had not proved she suffered seriously even if Clinton did proposition her in a Little Rock hotel room in 1991, which he denies. A panel of three Republican-appointed judges from the 8th U.S. Circuit Court of Appeals has scheduled oral arguments for Oct. 20 in St. Paul, Minn., to hear the Jones appeal of that dismissal.

It was unclear how Clinton might pay for any settlement. When the two sides came close last year, his attorneys believed insurance companies covering the cost of his legal defense would fund the settlement. But they have since dropped out of the case and are arguing with Bennett over whether they are obligated to pay for the appeal. Even if they do accept responsibility, they might be reluctant to fork over a large payment in a dismissed suit.

Jones has her own reasons for seeking a settlement now. In addition to the fact that her case was thrown out and may not be resurrected by the appeals court, she and her husband, Stephen, have financial problems since he was fired from his job at Northwest Airlines earlier this year and both remain out of work. A financial payment from Clinton might look especially appealing now and would spare her months, if not years, of uphill litigation.

Yet by dropping her demand for a formal apology in the latest discussions, Jones abandoned a position she had taken since filing the suit in 1994 that she wanted vindication, not money. A dispute over that insistence led to a bitter breakup with her previous legal team last year.

Lewinsky came to the attention of the Jones team as it sought other women allegedly linked to Clinton to try to prove a pattern of sexual misconduct. The night before Clinton's deposition, the Jones lawyers were briefed on Lewinsky's story by her onetime friend, Linda R. Tripp, allowing them to focus much of their questioning on the former White House intern. Unknown to the White House, Tripp had also gone to Starr with tape recordings suggesting she was being encouraged to lie, triggering the investigation that has consumed the nation for the last eight months.