Reno Rejects Outside Probe of ’96 Campaign

WASHINGTON —  Again rejecting an outside investigation of Democratic fund-raising practices, Atty. Gen. Janet Reno told a federal court Monday that there are no grounds for an independent counsel to examine the roles of President Clinton or Vice President Al Gore in the 1996 election campaign.

Reno’s decision concluded a 90-day preliminary investigation of whether Clinton or Gore violated federal campaign law by using unregulated contributions to the Democratic Party to buy television ads that backed their reelection bid. Such funding ordinarily would be subject to strict contribution limits for individual campaigns.

The ruling removes the last major threat that Democratic fund-raising practices could add to Clinton’s impeachment troubles or could pose legal problems for Gore in his anticipated campaign for the White House in 2000.

For Gore, it was the second time in recent weeks that Reno has decided against seeking an outside prosecutor for actions tied to campaign financing activities. On Nov. 24, the attorney general declined to ask for an independent counsel to determine whether Gore had lied to federal investigators probing his understanding of the nature of campaign contributions that he had solicited by phone.

Congressional Republicans, who have criticized Reno’s refusal to refer investigations of Democratic fund-raising to outside prosecutors, expressed unhappiness with Reno’s latest decision.

“Janet Reno has sliced this broad scandal into narrower issues so that common threads, patterns and facts are not considered when weighing each decision on whether to seek an independent counsel,” said Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Judiciary Committee.

“I intend to renew my efforts to examine her handling of this and to compel the appointment of someone who is independent and objective to investigate this matter.”

Noting the vague provisions of campaign finance law, Reno cited evidence that Clinton and Gore were advised by legal counsel that the advertising campaign complied with the law.

“I find by clear and convincing evidence a lack of knowing and willful criminal intent required for criminal prosecution,” the attorney general said in court papers filed Monday.

Reno’s Decision Provokes Anger

But Sen. Fred Thompson (R-Tenn.), chairman of the Senate Governmental Affairs Committee, called the decision “another banner day for the lawyers.”

“Lawyers advised the president that what he was doing was OK,” Thompson said. “Lawyers at the Justice Department advised Reno that the independent counsel law didn’t apply. She apparently relied upon every lawyer around except the ones with the responsibility for the investigation--FBI Director Louis [J.] Freeh and the head of the Justice Department’s campaign finance task force, Charles [G.] LaBella.”

Reno repeatedly has turned down Republican demands for an outside counsel to examine Democratic campaign practices, choosing to allow her department’s campaign finance task force to examine potential criminality with career prosecutors and FBI agents.

The task force has obtained 14 indictments or guilty pleas from Democratic fund-raisers or contributors. Reno still must decide whether to seek an independent counsel to determine whether former deputy White House Chief of Staff Harold M. Ickes lied in Senate testimony about the administration’s role in a Teamsters Union strike. Reno must decide by Jan. 29.

Before Monday’s announcement, senior Justice Department officials had advised Reno that it was highly unlikely any case could be made that the president or vice president knowingly and willfully breached the law, a standard necessary for a criminal prosecution. This was especially true, they said, because campaign lawyers had recommended the course of action followed by the White House.

The focus of Reno’s current inquiry was the Democratic National Committee’s use of so-called issue advertisements, financed largely with unregulated “soft money” contributions. Under campaign law, such ads were supposed to promote Clinton’s views but not his actual candidacy.

Television Ads Subject of Debate

Senate hearings last year into Democratic campaign finance abuses showed that, for both parties, the line between issue advertising and television spots promoting the candidacies of Clinton and GOP hopeful Bob Dole often was blurred. That area of law is particularly hard to delineate, experts said.

However, Reno agreed to launch her preliminary review after Federal Election Commission auditors concluded last August that the issue ads contained messages designed to promote Clinton’s reelection. These ads were so closely coordinated with his campaign that they should have been paid for with “hard money,” the strictly regulated funds donated to support individual campaigns, the auditors said.

“Since August, the task force has interviewed virtually every participant in the DNC issue advertisement effort and reviewed hundreds of campaign documents,” Reno said Monday.

“As our court filing demonstrates, I have found there are no reasonable grounds for further criminal investigation.”

Interviewed last month by Justice Department investigators, Clinton said that attorneys for both his reelection campaign and the Democratic National Committee advised him that the ads were legal. Because of the inexact nature of campaign statutes, this view is shared by many political candidates and their lawyers.

Clinton’s defenders argued that every reasonable effort was made to ensure that the 1996 reelection effort did not overstep the law.

Joseph E. Sandler, the Democrats’ general counsel, acknowledged that the president “was certainly aware of and involved in the DNC advertising that promoted his legislative agenda.” But Sandler added: “We’ve told the Justice Department that we perceived this as a gray area of the law in 1996 and that it is still a gray area.”

Sandler said he and other attorneys reviewed every ad before it was broadcast “to apply the law as best we could.” Some Justice Department officials said such a review, if true, would make it difficult to prove there was any willful intent to break the law.

Last week, a bipartisan majority of FEC members expressed doubts over whether civil violations--not to mention criminal violations--had occurred in the use of issue ads by both political parties.

Under discussion at a commission meeting were FEC staff audits that concluded that both Clinton and Dole committed civil violations of federal spending limits. The audits recommended that the Clinton campaign repay the government $7 million and that Dole’s campaign repay $17.7 million.

However, Republican commissioner David Mason said the FEC audit was based on a fuzzy legal standard of when an ad amounted to influencing a viewer to vote for a particular candidate.

And Scott Thomas, a Democratic appointee who is acting chairman of the panel, said that election law on this point is far from clear because of confusing advice from the commission in previous years.