Probe of Cisneros Payments to Former Mistress Starts

WASHINGTON —  Atty. Gen. Janet Reno on Friday opened a “preliminary inquiry” into whether Housing and Urban Development Secretary Henry G. Cisneros misled the FBI about the amounts and timing of payments he made to a former mistress, who now is suing him for breach of contract.

Cono R. Namorato, Cisneros’ attorney, announced the step, which gives the government 90 days to investigate and decide whether to seek appointment of an independent counsel to pursue a full investigation.

Namorato attempted to minimize the significance of Reno’s action by noting that, under the law, the government is required to move to a preliminary inquiry if it found during its initial 30-day examination that accusations against a high-ranking official specifically alleged a violation of federal law and come from a credible source.

“We remain confident that, after the department completes its preliminary investigation, it will conclude that the appointment of an independent counsel is unnecessary,” said Namorato, a former Justice Department tax prosecutor.

Cisneros, in Oakland on Friday for a community development symposium, said in a statement issued by Namorato: “While I had hoped that this matter would end during the first stage of the inquiry, given the limited scope of that stage I understand why it has moved into the next phase. I have made mistakes in my personal life but I have always adhered to the law.”

The FBI is examining whether Cisneros misled its agents during questioning before his Senate confirmation when asked how much he had paid the former mistress, Linda Medlar, and how long the payments continued.

“The issue now is not whether assistance was provided to Ms. Medlar, the propriety of such assistance, or the secretary’s disclosures about those matters,” Namorato said. “The focus of the investigation appears to be the details of the timing and amounts of the assistance.”

The three-month span of the inquiry, which can be extended two months, virtually assures that it will not be resolved before congressional elections next month.

The White House Friday gave full support to Cisneros in his decision to remain on the job. Cisneros, who is scheduled to be questioned Monday in Dallas by Medlar’s attorney in the civil suit she has brought, said that he has not allowed “this matter to distract me from my duties at HUD, and, in the coming days, my lawyers will deal with this matter while I continue to focus on the housing problems of our nation’s communities.”

White House Chief of Staff Leon E. Panetta said that the decision to move to the preliminary inquiry represents “no conclusion. So obviously, we’ll await the results of this 90-day investigation by the Justice Department. Until then, obviously we continue to have great confidence in him and the way he has performed his job.”

Cisneros becomes the second Clinton Administration Cabinet officer to face possible scrutiny by an outside prosecutor. On Oct. 3, Mike Espy announced that he would step down as secretary of agriculture in the midst of an independent counsel’s examination of whether he broke the law by accepting gifts and services from companies regulated by his department.

The Cisneros inquiry is based on 40 hours of tapes that Medlar secretly made of conversations she had with him in which he allegedly expressed concern over FBI agents’ efforts to determine how much he had paid her.

A non-governmental source familiar with the case said there is a potential conflict over whether Cisneros told the FBI that he paid Medlar about $60,000 in all or whether he was paying that much annually. In a Sept. 12 interview on the tabloid television show “Inside Edition,” Medlar charged that Cisneros had “lied” to the FBI about the payments.

On the basis of the preliminary inquiry, Reno must decide “whether reasonable grounds exist to warrant further investigation” by an independent counsel appointed by a special court.

In her suit against Cisneros, filed in July in Lubbock, Tex., Medlar contends that he failed to fulfill a verbal contract to pay her $4,000 a month until her teen-age daughter graduates from college in 1999. Alleging that the payments began in 1990 and were cut off last January, Medlar is seeking $256,000, plus lawyers’ fees and an unspecified amount of punitive damages.

“Secretary Cisneros was forthright at every stage of the vetting and background process about this difficult personal matter,” Namorato said in his statement.