Reno Won’t Pursue Gore Investigation

WASHINGTON —  Atty. Gen. Janet Reno decided Tuesday against seeking an outside prosecutor to determine whether Vice President Al Gore lied to federal investigators in a campaign financing probe, saying that “there are no reasonable grounds” for further inquiry.

Reno cited “clear and convincing evidence” that Gore did not lie about his understanding in 1995 of how campaign funds he was raising would be spent. “I can see no reasonable basis for concluding that he had a motive to tell this story if it were not true,” she said.

Gore’s association with controversial Democratic fund-raising practices, including his much-criticized appearance at a Buddhist temple in Hacienda Heights, Calif., has threatened to disrupt his otherwise disciplined and methodical march toward the White House. The closing of the investigation into Gore’s fund-raising removes a significant obstacle to his anticipated bid for the presidency in 2000.

“Fundamentally, we knew he had done nothing wrong, and that was going to be the result sooner or later,” said a senior Gore advisor. “But, obviously, it is better to have that found out sooner [rather] than later.”

Reno’s decision, transmitted after a 90-day preliminary investigation to the special court that appoints independent counsels, drew renewed fire from Rep. Dan Burton (R-Ind.), head of a House committee investigating fund-raising abuses, and Sen. Orrin G. Hatch (R-Utah), chairman of the Senate Judiciary Committee.

Reno and key Republicans have argued for two years, sometimes bitterly, over her refusal to refer probes of Democratic fund-raising abuses to an outside prosecutor. Burton, who previously has moved to hold Reno in contempt of Congress, said Tuesday’s decision marked “a sad day for the rule of law” and accused the attorney general of being “hopelessly conflicted.”

Hatch declared: “We need to take these matters out of the hands of the attorney general, who appears to be acting politically and not in accordance with the [independent counsel] act. Personally, I think it is going to take legislation.”

But Reno defended her latest decision much as she has her earlier ones, explaining that it was based “solely on the facts and the law, not politics, pressure or polls.”

White House Press Secretary Joe Lockhart, anticipating the decision, was ready with a response when it was relayed to him in the midst of his daily briefing for reporters.

“Obviously, the president welcomes that news, as he has always believed that the vice president acted completely properly during the campaign in 1996,” Lockhart said. “He believes the vice president has always acted within the letter and the spirit of the law and that the news of today indicates that.”

Reno, in a statement issued along with her 19-page submission to the special court, said the Gore decision does not signal an end to the Justice Department’s campaign financing task force investigation, which has produced charges against 14 individuals, including major Democratic fund-raisers.

Decisions on Ickes, Clinton Due Next

She must decide by Monday whether to ask for appointment of an independent counsel to examine whether former Clinton aide Harold M. Ickes lied in testimony to a Senate committee about his involvement in a labor dispute between the Teamsters Union and Diamond Walnut Growers in California.

And a week later, she must decide whether an outside prosecutor should be named to investigate whether Clinton and aides violated federal election laws by using restricted campaign contributions to finance Democratic Party advertisements that supported his reelection.

Federal law requires the attorney general to seek appointment of an independent counsel if her preliminary inquiry is unable to resolve contradictory evidence.

Reno twice has opened 90-day reviews of fund-raising calls Gore made from his White House office, and her action Tuesday marked the second time that she has decided not to seek an independent counsel to investigate the matters further.

Last year she decided that the overwhelming weight of evidence supported Gore’s statement that his telephone calls were for so-called “soft” money contributions, which are outside the election law ban on political fund-raising conducted from the federal workplace.

Reno also noted then that established Justice Department policy barred the government from prosecuting cases involving political fund-raising done from federal facilities unless there were aggravating circumstances, such as attempts by the fund-raiser to force individuals to make contributions, which was not an issue in Gore’s case.

But on July 27, Gore’s counsel provided Justice investigators with newly discovered documents related to their earlier probe. The documents included handwritten notes by David Strauss, the vice president’s former deputy chief of staff, suggesting that at a November 1995 meeting attended by Gore, participants may have discussed diverting some of the money Gore raised into restricted “hard” money accounts.

However, Reno took pains in her court filing to stress the lack of any hard evidence that Gore lied in 1997 when he told investigators he believed he was raising only soft money.

Referring to the crucial November 1995 meeting, Reno said “no attendees recall any particular questions or comments by the vice president” that would reflect any contrary understanding on his part.

“No one who arrived at the meeting without a working knowledge of the [Democratic National Committee] financing issues left with an accurate understanding of the fact that both hard and soft money were necessary to pay for the media campaign,” she added.

In addition, only two of 15 participants “even recall the topic of a hard money component to the media fund being raised” during the session, according to her court filing.

Meeting Yields Little Evidence

Reno said her investigation could not determine that any hard money issues “were discussed in sufficient detail” that anyone could recall them. Even the author of the notes in question “had no specific recollection of the meeting” and could not remember who made various comments that he recorded.

Reno said in her court filing that her department had examined two additional allegations about Gore’s fund-raising calls but that an initial inquiry determined that they were not sufficiently specific and credible to merit a 90-day preliminary investigation.

She provided no details of the allegations, except to note that they did not involve the question of whether Gore had made false statements to investigators.

For two years, the attorney general has steadfastly rejected Republican demands that she request an independent counsel to look into an array of Democratic fund-raising abuses during the 1996 campaign, despite coming under increasing pressure from some of her own aides to do so.

Both FBI Director Louis J. Freeh and Charles G. LaBella, who stepped down last summer as head of the Justice Department’s campaign finance task force, have urged her to call for a broad independent investigation of the Democratic campaign.

In the days before the announcement, Gore’s advisors gamely had insisted that even a Reno decision to appoint a special prosecutor would not necessarily prove fatal to his presidential ambitions.

As one Gore aide pointed out, George Bush won the presidency in 1988 even while an independent counsel was investigating the Iran-Contra scandal, and Clinton triumphed in 1996 despite Kenneth W. Starr’s ongoing inquiry, which at that point focused on the Whitewater real estate transactions.

Notwithstanding Reno’s latest decision, Gore still could face exposure if the attorney general approves a broader inquiry of the administration’s 1996 fund-raising activities, as she still could do by Dec. 7.

Yet there was instant unanimity among Democrats that Reno’s decision eliminated a significant potential obstacle to Gore’s presidential ambitions.

“It’s a huge step ahead for him, because you don’t have to deal with a situation that could be time consuming and wind up [placing] you on the defensive,” said Democratic consultant Tad Devine.

Several Democrats said an inquiry into Gore’s fund-raising tactics in the last campaign might have made it more difficult and time consuming for him to raise the money he will need for the next one.

The larger political question may be whether Reno’s decision will prevent Gore’s potential rivals in the 2000 Democratic primaries from injecting questions about his ethics and the 1996 fund-raising in that campaign.

Such questions might be one of the clearest lines of attack for rivals facing a front-runner who enjoys the advantages of a lead in the polls, an unmatched national fund-raising base and the mantle of a popular president.

But after Reno has twice ruled that Gore’s behavior did not merit an independent investigation, any of the vice president’s rivals who raise those charges in 2000 could face a backlash from Democratic voters weary of the attacks on the administration’s ethics.

Times staff writer James Gerstenzang contributed to this story.