Reno Won’t Seek Special Counsel on White House Calls

Atty. Gen. Janet Reno decided Tuesday against asking that an outside prosecutor investigate campaign fund-raising calls made by President Clinton and Vice President Al Gore, saying she acted on “the facts and the law--not pressure, politics or any other factor.”

Reno’s decision came after she met with FBI Director Louis J. Freeh, who had disagreed with her--recommending that an independent counsel examine all the fund-raising allegations, not simply the phone calls, and avoid any possibility of conflict of interest.

The decision is especially important for Gore, freeing him from a potentially lengthy and exhaustive investigation that could stretch into his expected presidential bid in 2000.

But Reno stressed that her decision does not exonerate anyone and that the department will “vigorously” pursue its ongoing investigation of possible campaign finance violations. Those being investigated include several fund-raisers and donors with ties to Clinton and Gore.

Although it was widely anticipated, Reno’s decision touched off a striking range of reactions--even within the White House. While the president released only a one-sentence statement, Gore spoke with reporters and warned of future partisan attacks.

“The attorney general made her decision based on a careful review of the law and the facts, and that’s as it should be,” said Clinton’s statement.

But Republicans in Congress assailed the decision, with some complaining that Reno viewed her mandate too narrowly. Sen. Fred Thompson (R-Tenn.), who led a Senate committee investigation into a range of fund-raising activities, said information uncovered by his probe made clear the need for an independent counsel. Given the broad array of allegations and misdeeds, Reno’s focus on the phone-call issue was like paying too much attention “to the tail of the horse” while ignoring the horse.

Senate Judiciary Committee Chairman Orrin G. Hatch (R-Utah) put his response in stronger, more direct terms. Calling “absurd” the notion that Reno had handled the matter as required by law, Hatch said: “The bottom line is that the appearance of a conflict exists here--highlighted by the conflict between the attorney general and the director of the FBI.” Several GOP leaders seized on that dispute. Rep. Dan Burton (R-Ind.), chairman of the House Government Reform and Oversight Committee, said he will ask Reno and Freeh to explain their disagreement in a public session on Tuesday, and House Judiciary Committee Chairman Henry J. Hyde (R-Ill.) said he may invite the pair to a closed session.

Reno also decided against seeking an independent counsel to investigate a lobbyist’s allegation that former Energy Secretary Hazel O’Leary solicited a $25,000 contribution for a charitable organization in return for meeting with a delegation of Chinese petrochemical officials.

After reviewing documents and conducting more than 40 interviews, including the lobbyist, Johnnie Chung, investigators “developed no evidence that she (O’Leary) had anything to do with the solicitation of the charitable donation,” Reno said in her statement.

O’Leary, in a statement, said she was “pleased that the system worked and that (she was) no longer under investigation,” adding that she was “nevertheless distressed” by the impact of the allegations on her “integrity and professional reputation.”

But Reno, without providing specifics, said the Justice Department will continue to investigate whether anyone else may have broken the law in connection with soliciting and paying the $25,000 donation to Africare.

The allegations against Clinton and Gore questioned whether phone calls they made to campaign donors from the White House violated the 114-year-old federal law against soliciting campaign funds while on federal property.

Clinton had said he did not recall making any such calls, but did not rule them out. An aide said the president made several calls from the White House’s private quarters. Gore acknowledged making more than 40 calls from his White House office, but denied any wrongdoing.

In Clinton’s case, Reno said, investigators uncovered three occasions when the president made fund-raising calls from the White House. In two of them, Clinton was not soliciting contributions, but thanking a contributor or fund-raisers, Reno said.

On the third occasion--Oct. 18, 1994--Clinton placed a number of fund-raising calls to potential contributors, but all were made from the White House residence, not the Oval Office or any other official White House space, according to telephone records, interviews and the president’s schedule.

Citing a Justice Department opinion dating back to the Carter administration in 1979, Reno said the law against soliciting on federal property does not include fund-raising from residential areas of the White House.

Reno, in her statement, added that all the donations sought by Clinton from the White House residence went into so-called “soft money” accounts at the Democratic National Committee. Soft money contributions for party-building and not a specific federal campaign are not covered by the law.

Reno later amended her statement to note that one of the contributions actually was hard money--funds for the reelection of Clinton and Gore--but that there was no evidence the president knew this. That did not affect the exemption from the law because the call was made from the residential quarters. she said.

In Gore’s case, the Justice Department campaign finance task force found evidence suggesting that he called about 45 people from his office between the fall of 1995 and the spring of 1996 to raise funds for the Democratic National Committee.

However, investigators cited evidence that Gore solicited only soft money in these calls.

“No donor said the vice president solicited hard money, donors were given follow-up instructions on donating to DNC soft money accounts, and the amounts solicited exceeded hard money limits,” Reno said.

But the matter became complicated because, after the 1994 elections, the DNC began to split large checks into soft and hard money accounts, without the donor’s intent, including several donations solicited by Gore, according to the preliminary inquiry’s findings.

“However, investigators uncovered no evidence that the vice president was aware of the DNC’s practice, or in any way knew that donations he solicited would make their way into hard money accounts,” Reno said. “We are, however, continuing to investigate whether the DNC’s practices violate any criminal laws.”

Even without the soft money-hard money distinction, Reno noted, the Justice Department’s “clear, long-standing policy” is not to prosecute for campaign soliciting from federal offices without “aggravating factors”--including coercion, knowing disregard of the law, a substantial number of violations or significant disruption of government functions. There was no evidence of any of these factors, she said.

In lambasting Reno’s decision, Republicans relied heavily on Freeh’s recommendation that an independent counsel should be named to look into the entire series of campaign fund-raising allegations.

Reno took oblique note of Freeh’s views, noting that she regularly sought his advice and valued it highly.

Times staff writers Marc Lacey and Robert L. Jackson contributed to this story.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Reno’s Reasons

Atty. Gen. Janet Reno refused Tuesday to seek an independent counsel to investigate fund-raising telephone calls by the president and vice president.

FINDINGS ON CLINTON

* He did not place fund-raising phone calls from government offices. Clinton’s calls were from the White House residential quarters, Reno said.

* The donations went to “soft” money accounts, while the law “plainly prohibits only the solicitation of hard money.” Soft money is for political parties generally; hard money is directed to candidates.

****

FINDINGS ON GORE

* There is no evidence he knew a portion of the soft money he was soliciting from his office was being converted by the Democratic National Committee into hard money.

* Even if Gore had known the money was being converted, Reno said, law prohibits her from seeking an independent counsel for allegations that would subject an official “to a different application of the law than [private] citizens,” unless there are aggravating factors.