Leaked report on fund raising prompts jabs between Bush, Gore

1998 document contends allegations justified an independent counsel

March 11, 2000|By Jonathan Weisman | Jonathan Weisman,SUN NATIONAL STAFF

WASHINGTON -- The leak of a scathing confidential report on the Justice Department's campaign finance investigation touched off an angry exchange yesterday between George W. Bush and Al Gore over fund-raising improprieties and both candidates' fitness for office.

The 94-page report, leaked in an edited version to the Los Angeles Times, accused senior Justice Department officials of engaging in legal "contortions" to avoid naming an independent counsel to look into fund-raising excesses in the 1996 election.

Bush contended that the revelations had brought up fresh questions about Gore's "values and integrity." Gore fired back that he had learned from his fund-raising mistakes and embraced campaign finance reform and that Bush has cynically exploited loopholes in campaign funding laws.

The July 1998 report, drafted by Charles G. LaBella, then the head of the department's campaign finance task force, concluded that there was "a pattern of conduct" by President Clinton, Vice President Gore and Hillary Rodham Clinton "worthy of investigation" by an independent counsel.

The "contortions that the Department has gone through to avoid investigating these allegations are apparent," LaBella wrote.

Specifically, the report said, Gore "may have provided false testimony" when he claimed not to recall whether fund-raising phone calls he made from the White House were to solicit unregulated "soft money" as well as strictly regulated "hard money" that can be used directly for candidates' campaigns.

Attorney General Janet Reno concluded in 1997 that Gore's fund-raising calls from the White House would be illegal if he was knowingly soliciting hard money, not "soft money."

Documents released to the Los Angeles Times included a previously undisclosed FBI interview in which Leon E. Panetta, the White House chief of staff at the time, said he remembered Gore "attentively listening" to discussions about the hard money fund raising. The documents also indicated the existence of photographs that show Gore examining papers he said he did not recall seeing, though LaBella said yesterday that he had not seen any such photos before drafting his memo.

Bush pounced on the disclosure, calling on Gore to authorize the release of the photos, the relevant portions of the LaBella report, and a full explanation of "why his testimony conflicts with the statements of the former White House chief of staff."

"After all our nation has been through in the last eight years, America deserves a president whose values and integrity we can trust," Bush said.

Gore has always denied any wrongdoing, and the Justice Department concluded in 1998 that he had not lied to investigators.

The vice president's campaign spokesman, Chris Lehane, would not comment on the substance of LaBella's allegations. But he questioned how Bush could point fingers, noting that the Texas governor opposes fundamental changes to the campaign finance system, has opted out of the existing fund-raising limits and regulations, has invited top fund-raising allies, known as Pioneers, to sleep at the governor's mansion, and has benefited from campaign attack ads funded secretly by his allies.

"George Bush has a lot of explaining to do," Lehane said.

Administration officials insisted that the LaBella memo contained very little new evidence and that what it did contain had already been "refuted."

Panetta's statement indicated that Gore was listening to a discussion of hard money and soft money fund raising, but it did not indicate whether he knew some of the soft money he was raising would be diverted to hard money accounts, an official familiar with the investigation said.

That specific diversion was the issue he denied knowing about and the one the Justice Department investigated. Panetta's recollection did not prove that Gore was lying. Indeed, in November 1998, the Justice Department's public integrity section told a federal court that it found "clear and convincing" evidence that Gore did not lie about the matter.

A former Justice Department official who worked with LaBella denied that Reno used what LaBella called a double standard for appointing independent counsels -- a low standard for Cabinet officials and a higher standard for the president or vice president.

"It was exactly the opposite of a double standard," said the official, Robert S. Litt. "The attorney general was unbelievably insistent on knowing how things were handled in the past and trying to be consistent."

Myron Marlin, a department spokesman, said Reno "makes her decision based on the facts and the law. She ignores the politics, the pundits and the pressure."

LaBella, now with the private investigation firm Decision Strategies Fairfax International, said yesterday that he stands by the report's conclusions.

"I thought I was right then," he said. "I think I was right now."

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