- The Washington Times - Wednesday, June 7, 2000

President Clinton and Vice President Al Gore were key players in a 1996 Democratic fund-raising scheme designed to "raise money by whatever means and from whomever would give it, without meaningful attention to the lawfulness of the contributions."
That is one of the conclusions of a previously unreleased 94-page report by Charles G. LaBella, former chief of the Justice Department's campaign finance task force, who recommended in July 1998 that Attorney General Janet Reno seek an independent counsel to probe fund-raising abuses.
"The intentional conduct and the willful ignorance uncovered by our investigations … resulted in a situation where abuse was rampant, and indeed the norm," Mr. LaBella, a career prosecutor, said. "At some point, the campaign was so corrupted by bloated fundraising and questionable contributions that the system became a caricature of itself."
The report, which Justice refused over the past two years to release despite Senate and House subpoenas, was made public yesterday by the House Government Reform Committee.
The committee also released a November 1997 memo by FBI Director Louis J. Freeh, describing Mr. Gore as an "active participant" in questionable fund-raising efforts and calling on the attorney general to seek the appointment of an independent counsel to investigate campaign finance abuses by the vice president.
"The evidence tends to show that the vice president was an active participant in the core group fundraising efforts, that he was informed about the distinctions between 'hard' and 'soft' money, and that he generally understood there were legal restrictions against making telephone solicitations from federal property," Mr. Freeh said.
Mr. Gore, claiming "no controlling legal authority," has said he believed he was soliciting only soft-money donations. But documents show both hard and soft money were discussed at meetings he attended and at least 35 percent of the donations he sought went to hard-money accounts.
He told the FBI he might not have heard the discussions because he was drinking a lot of iced tea and may have been in the bathroom.
Soft money consists of unlimited and largely unregulated donations; hard money is made up of smaller and more restricted donations.
The Freeh memo said the FBI's campaign-finance investigation focused on accusations that a "core group" of White House and Democratic National Committee officials, including Mr. Clinton and Mr. Gore, were involved in "an all-out effort" to raise money leading to White House coffees, overnight stays and telephone solicitations by the president and vice president.
"The task force has now established that the vice president made approximately 86 fundraising calls from his West Wing office and reached at least 43 potential donors," Mr. Freeh said. "At least five of the persons solicited by the vice president gave money that was deposited, in part into DNC accounts."
Mr. Freeh described a decision by Miss Reno not to seek outside counsel based on Mr. Gore's claims he intended to solicit only soft-money donations as "seriously flawed."
"In the face of compelling evidence that the vice president was a very active, sophisticated fundraiser who knew exactly what he was doing, his own exculpatory statements must not be given undue weight," he said.
Mr. LaBella noted in his report that Mr. Gore had received a series of memos from White House Deputy Chief of Staff Harold Ickes and attended weekly meetings concerning hard and the so-called soft-money solicitations and the DNC's hard-money accounts.
He described Mr. Ickes, who now runs Mrs. Clinton's New York campaign, as a "Svengali, assuming power with the imprimatur of the president to authorize DNC and Clinton/Gore '96 expenditures.
"Curiously, though renowned as a policy wonk, the vice president claims he did not read the memos and cannot recall the meetings," Mr. LaBella said.
He said the White House, in a "desperate need to raise enormous sums of money" to offset losses to Republicans in 1994, relied on the "calculated use of access" to Mr. Clinton and first lady Hillary Rodham Clinton "as leverage to extract contributions" from donors hoping to enhance their own business positions.
"All pretense of maintaining discrete areas of responsibility and control were shattered as the need for campaign funds driven by the media campaign increased," he said. "Such blurring of lines is troubling because it triggered an intermingling of funds, resources and personnel that resulted in the circumvention and violation of campaign contribution regulations."
In releasing the documents, Committee Chairman Rep. Dan Burton, Indiana Republican, chastised the Justice Department for its failure to make the documents public. He said the department showed a lack of aggressive prosecution by officials trusted by the American people to do their job.
"Can you blame the American people or many in Congress for being cynical?" Mr. Burton said.
The panel's ranking Democrat, Rep. Tom Lantos of California, questioned the investigation and accused Mr. Burton of trying to politically damage the vice president. He said Mr. Freeh had said at an earlier hearing he did not believe Miss Reno made the decision not to seek outside counsel because of politics.
The committee also heard testimony from two top FBI officials confirming that a Justice Department official told them he was under "a lot of pressure" in the campaign finance abuse investigation because Miss Reno could lose her job.
FBI Assistant Director Neil J. Gallagher and former FBI Deputy Director William Esposito testified they had no doubt that Lee Radek, who heads the Justice Department's Office of Public Integrity, made the comments during a 1996 meeting and that the two statements were linked.
Mr. Radek told the committee he did not remember the meeting and did not recall the conversation but did not believe he would have made the statement "because it wasn't true."
In the LaBella memo, the former task force chief accused the Justice Department of "gamesmanship" and "contortions" to avoid seeking outside counsel to investigate the president, vice president and other top White House officials. He described his Justice Department superiors as "intellectually dishonest."
"If these allegations involved anyone other than the president, vice president, senior White House or DNC and Clinton/Gore '96 officials, an appropriate investigation would have commenced months ago without hesitation," he wrote.
"However, simply because the subjects of the investigation are covered persons [subject to the Independent Counsel Statute], a heated debate has raged within the department as to whether to investigate at all. The allegations remain unaddressed," he wrote.
Mr. LaBella also noted in his report that an investigation was warranted into Mr. Clinton's connection to a top Democratic fundraiser involved in the sale of missile-related expertise to China a request that also was rejected by Miss Reno.
That request involved Mr. Clinton's ties to Bernard L. Schwartz, chief executive officer at Loral Space & Communications Ltd., who gave $1.5 million to the DNC. He wanted to know if technology transfers for Loral to China were related to his donations to the DNC.
Mr. LaBella said Justice avoided the appointment of an independent counsel in the case "by constructing an investigation which ignored the president of the United States the only real target of these allegations."



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