Justice Department: Reno did not engage in favoritism in campaign funding probe

By Pierre Thomas and Terry Frieden/CNN

March 10, 2000
Web posted at: 6:18 p.m. EST (2318 GMT)

WASHINGTON (CNN) -- The Justice Department's chief spokesman has rejected charges published Friday that political favoritism led Attorney General Janet Reno to decline to appoint a special prosecutor to look into Democratic fund-raising efforts during the 1996 campaign.

Spokesman Myron Marlin said Reno had "received differing points of view, and based her decision on the facts and the law, without regard to politics."

Charles LaBella testified in front of the House Government Reform and Oversight Committee in August 1998.

The White House said the allegations in the so-called LaBella report are not new, and that the administration "responded very openly several years ago when these first came [out]," said Joe Lockhart, President Bill Clinton's spokesman.

The report is named after Charles LaBella, former chief Campaign Finance Task Force prosecutor.

"The only thing I'll say is that the attorney general made her decision based on the facts, the evidence and the law," Lockhart added.

They were responding to a Los Angeles Times story that cited an internal document written by LaBella that accused senior Justice Department officials of involvement in "gamesmanship" and legal "contortions" to avoid an inquiry into the fund-raising efforts of Clinton and Vice President Al Gore.

The newspaper cited excerpts from an edited version of a 94-page document written by LaBella.

On Friday, Rep. Dan Burton, (R-Indiana), whose House committee's efforts to obtain a copy of the LaBella report were rebuffed by Reno, issued a subpoena to the Justice Department for both the LaBella documents and another internal report by FBI director Louis Freeh.

LaBella concluded Reno aides made "intellectually dishonest" decisions that protected Clinton, Gore and First Lady Hillary Rodham Clinton.

The report said that in seeking independent counsels to investigate other cabinet members, Reno appeared to apply "lower" standards in deciding whether to investigate behavior by top White House officials.

It had been widely reported that LaBella and FBI Director Louis Freeh strongly disagreed with some Reno advisers on whether to seek an independent counsel to investigate allegations of campaign finance abuses. LaBella's report held that "political operatives" and White House officials may have engaged in a broad systematic attempt to "circumvent" election laws.

In addition, Labella and Freeh strongly believed Reno and the Justice Department had a conflict of interest in investigating the White House.

In a telephone interview with CNN, LaBella said Friday he stands by his report's conclusions. "I thought it was the only way to conduct an investigation in such a way that the American public would accept the results," LaBella said. "At the end of the day, you needed someone independent to do a responsible, ethical, thorough investigation so you could put this to rest."

Justice Department officials have flatly rejected LaBella's suggestion that they were protecting the Clinton White House.

LaBella's July 1998 report called for an investigation into "the entire landscape" of campaign finance allegations. It referred to the possibility of plans "conjured up by sophisticated political operatives to circumvent" election laws during the 1996 campaign.

A December 1997 internal memo by another former task force prosecutor, Steve Clark of San Diego, said that his attempts to look into charges of corruption by Republicans and Democrats was fended off by "behind-the-scenes maneuvering, personal animosity, distortions of fact and contortions of law."

"The campaign finance allegations ... present the earmarks of a loose enterprise employing different actors at different levels who share a common goal: Bring in the money," said the LaBella report.

The report said Clinton knew, or should have known, that some of his fundraisers were bringing in money from sources outside the United States. Evidence suggested "a conscious avoidance of the truth..." the report said.

Task force documents also questioned Gore's "failure of recollection" in his story. Gore "may have provided false testimony," the report said.

That charge refers to a 1995 fund-raising effort in which White House telephones purportedly used to raise "soft money" were, in fact, used to raise "hard money," in violation of election law. "Soft money" refers to contributions to political parties that are not regulated by federal election law. "Hard money" refers to donations spent on behalf of individual candidates. Such donations are regulated by law and the use of White House funds to raise them is illegal.

The Democratic National Committee acknowledged that some of the funds were funneled to "hard-money" accounts, but without Gore's knowledge. Gore has said he did not recall specifics regarding the fund-raising.

In a statement, Texas Gov. George W. Bush -- the presumed Republican nominee for president -- said the story raises "troubling questions about whether the vice president misled federal investigators by testifying he did not recall fund-raising meetings, even though new evidence now shows he actively participated in those meetings.

"The vice president needs to clear up what role he played in raising money from the White House," the statement continued.

"Gov. Bush has some explaining of his own to do," said Gore campaign spokesman Chris Lehane on Friday, in a statement. "Such as how did $2.5 million in negative advertising paid for by a special interest very close to him suddenly appear in the waning days of Super Tuesday? How did the governor allow contributors, the Pioneers, to sleep over in his mansion in Texas? Why did he solicit contributions from a three-year-old? The difference between Al Gore and George Bush is that Al Gore wants to reform the system."

The $2.5 million refers to an ad campaign funded by wealthy Texas contributors to Bush that attacked onetime Bush rival Arizona Sen. John McCain's record on the environment. It was not immediately clear what the reference to the three-year-old was about.

"The fact is that the so-called enforcement system is nothing more than a bad joke," the LaBella report said. It blamed "loopholes ..., opportunists and the elected officials in desperate need of funds to fuel media campaigns."

The report said the Republican and the Democratic National Committees "pay lip service ... but nothing more" to federal fund-raising laws.