- The Washington Times - Wednesday, May 3, 2000

A former Justice Department prosecutor said yesterday he recommended an investigation into President Clinton's connection to a top Democratic fund-raiser involved in the sale of missile-related expertise to China, which Attorney General Janet Reno later rejected.
Charles G. LaBella, testifying under subpoena before a Senate subcommittee, said he requested that an independent counsel be sought to investigate the relationship between Mr. Clinton and Bernard L. Schwartz, chief executive officer at Loral Space & Communications Ltd.
Questioned by the committee on a still-unreleased memo, Mr. LaBella said the task force believed if Mr. Schwartz who gave $1.5 million to the Democratic National Committee was to be probed to determine whether the technology transfers were related to his donations to the DNC, the inquiry ought to be opened to include the president.
He made that recommendation to Miss Reno in a July 1998 memo. Mr. LaBella said yesterday one of Miss Reno's top executives, Lee Radek, head of the department's public integrity section, called the recommendation "silly."
Refusing to discuss the "nuts and bolts" of his 1998 memo, Mr. LaBella said investigators believed if "someone had given contributions and as a result of the contributions had received some benefit," an investigation should be aimed at "the person who gave the contribution" and "the person who received the contribution."
In response to a question by Sen. Arlen G. Specter, Pennsylvania Republican and subcommittee chairman, Mr. LaBella confirmed he was referring to Mr. Clinton and Mr. Schwartz.
The former task force chief said he was reluctant to discuss the memo in detail for fear it would "cause a chill" among Justice Department prosecutors concerning internal debates over pending cases. He acknowledged that he and Miss Reno never had a "detailed" discussion about his memo and that his relationship with the department is "quite cool."
Mr. LaBella, during four hours of testimony before the Senate Judiciary subcommittee on administrative oversight and the courts, also confirmed that he recommended an investigation of Vice President Al Gore and former White House Deputy Chief of Staff Harold Ickes, saying their conduct during the 1996 presidential campaign "warranted" a probe by an independent counsel.
Mr. LaBella questioned Mr. Gore's veracity in denying knowing that "soft" and "hard" money donations had illegally been sought by the DNC. He said Mr. Gore was told by Mr. Ickes in 13 memos from August 1995 through July 1996 about the hard and soft money donations.
He said additional evidence including notes by Mr. Gore's chief of staff also linked the vice president to the soft and hard money donations.
Soft money consists of unlimited and largely unregulated donations; hard money is made up of smaller and more restricted donations.
"I concluded it was inconceivable to me to rule out that it was an issue he knew nothing about," Mr. LaBella said.
He said the vice president's answers on hard and soft money donations were "reminiscent of the lack of recollection" he had for a fund-raiser at a Buddhist temple in California.
Mr. LaBella described Mr. Ickes as a key player in several task force probes.
"He was someone who had cameo appearances in several investigations," he said, adding that Mr. Ickes served as the coordinator of the DNC during the campaign. "He had people report to him, and he made decisions."
Mr. Ickes urged Mr. Clinton in two 1994 memos to pressure officials at Loral to help raise $3 million in soft money donations for the Democratic Party. The memos document efforts by Mr. Ickes, who left the administration in 1997, to put Mr. Clinton and Mr. Schwartz together to discuss the party's urgent need for political donations.
In a September 1994 memo, Mr. Ickes told the president that Mr. Schwartz could play a role in generating donations "in order to raise an additional $3,000,000 to permit the Democratic National Committee to produce and air generic TV/ radio spots as soon as Congress adjourns."
He urged Mr. Clinton to invite Mr. Schwartz and others to a White House breakfast "to impress them with the need to raise $3,000,000 within the next two weeks."
An October 1994 memo by Mr. Ickes advised the president that Mr. Schwartz was "prepared to do anything he can for the administration." Mr. Ickes called on Mr. Clinton to personally solicit the longtime Democratic Party loyalist for a donation.
That memo came at a time Loral was looking for the White House to switch licensing authority for satellite exports from the State Department, which included them on a banned "munitions list," to the Commerce Department, which sought to sell U.S. goods.
Miss Reno also rejected independent counsel probes of Mr. Gore and Mr. Ickes.
Mr. Schwartz, the Democratic Party's largest single donor in the 1996 presidential election, has denied that his DNC donations were meant to influence Mr. Clinton's policies on satellite exports.
Last year, the House Select Committee on U.S. National Security and Military/Commercial Concerns With the People's Republic of China singled out Loral for supplying key missile-related expertise that damaged U.S. national security.
The committee said Loral assisted China without first obtaining U.S. licenses even though the corporation knew licenses for sensitive, militarily useful technology transfers were required.
The technology transfers allowed China to improve the reliability of its missiles, the committee said, noting that China had stolen secrets on every deployed U.S. nuclear missile warhead in recent years and had 20 long-range missiles aimed at the United States.

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