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Revelations, Lawsuit Fuel Dem Fund-Raising Flap (09/20/97)

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Reno Launches Clinton Fund-raising Probe

Bill Clinton

White House 'confident no laws were broken'

WASHINGTON (AllPolitics, Sep. 20) -- U.S. Attorney General Janet Reno has opened a preliminary inquiry to determine whether a special prosecutor should be named to probe President Bill Clinton's 1996 fund-raising activities.

Sources tell CNN the investigation centers around whether Clinton made fund-raising calls from the White House, whether they resulted in contributions, and, if there were contributions, how the Democratic National Committee used the money.

White House officials confirmed that the president was notified Saturday morning that Reno ordered a 30-day review. At the end of that time, depending on the results of that inquiry, she could order a more extensive 90-day FBI investigation. Reno could then appoint an independent counsel to investigate Clinton.

vxtreme CNN's John King reports.

During the 30-day review, Clinton's attorneys are expected to try to convince the Justice Department that an additional investigation is not warranted.

"We understand the Department of Justice is in the process of determining whether a preliminary investigation is warranted," said White House attorney Lanny Davis in a statement. "We are cooperating and will continue to cooperate with the Department of Justice to ensure that it has all the information it needs.

"We are confident that no laws were broken," he said.

Clinton Raising Money In California

Janet Reno

As news of Reno's decision broke Saturday, the president was in San Francisco, attending three fund-raisers the generated nearly $1 million for the Democratic Party.

During his public appearances, Clinton did not mention Reno's probe. But in her remarks at one stop, the first lady pointedly defended the practice of raising political money.

"I know in many circles it is not popular to talk about raising money for political purposes, but I believe it is an honor to support the political process of the United States and to stand up for democracy," Mrs. Clinton said.

If an independent counsel were to be named, it would mark the second active investigation of Clinton.

Kenneth Starr is already conducting a wide-ranging investigation into Whitewater, a catchall phrase covering actions springing out of a failed land deal in Arkansas before Clinton became president. The first lady and other White House officials are also believed to be subjects of that probe.

In addition, the president is also embroiled in a sexual harassment lawsuit brought by Paula Jones, a former Arkansas state employee.

The new probe of Clinton comes as a similar 30-day review of Vice President Al Gore's 1996 fund-raising activities is already under way. Reno must decide in early October whether to continue that investigation into the 90-day phase.

Reno Under GOP Pressure

Al Gore

Clinton has said he does not remember making any fund-raising calls from the White House. But former White House official Harold Ickes has told Senate investigators that Clinton made several fund-raising calls at his request.

Gore admits making 46 fund-raising calls. But White House officials maintain that Clinton and Gore are exempt from a federal law prohibiting fund raising in government buildings.

The attorney general has been under intense pressure to go forward with an independent counsel to investigate Gore's activities. Some Republican members of Congress have even threatened her with impeachment if she opts not to appoint a prosecutor.

Sen Arlen Specter, R-Pa., said that with the decision to launch a preliminary probe of Clinton, on top of Reno's previous decision to look into Gore's fund-raising activities, "it certainly looks as if independent counsel will ultimately be appointed."

This past week, Reno announced a shake-up in the Justice Department team looking into the allegations of fund-raising irregularities. On Friday, it was reported that Gore has retained two private outside lawyers to represent him in the investigation.

"The vice president wanted private counsel so he can get his position presented directly and personally to the Department of Justice," said Gore spokeswoman Lorraine Voles.

Reno's decision prompted by Gore revelations

Congress and the FBI have been conducting inquiries into methods used by the 1996 Clinton-Gore campaign and the Democratic National Committee to raise money. Committees in both the Senate and House are currently holding hearings into allegations of fund-raising irregularities.

Among the most serious of the allegations is that contributions from outside of the United States were funneled into campaigns, in violation of federal law.

In its current edition, Time magazine reports that Reno decision to launch the preliminary inquiry into Clinton had its roots in recent revelations that some of the money raised by Gore's phone calls landed directly in accounts used for specific campaigns -- so called "hard money" -- instead of going into more generic "soft money" accounts used by Democrats for party activities.

Reno had previously determined that "soft money" solicitations from federal facilities were not precluded by federal law but that "hard money" solicitations were.

The revelations about Gore led Justice Department investigators to take another look at Clinton's calls, which triggered the preliminary inquiry, according to Time.

CNN Justice Correspondent Pierre Thomas and White House Correspondent John King contributed to this report.

In Other News:

Weekend Sept. 20 & 21, 1997

Clinton To Address Trade, NATO In U.N. Speech Monday
Republicans Demand Independent Probe Of Clinton Fund-raising
Fund-raising Flap Hinges On 1883 Law
Justice Department To Search White House Phone Logs
Reno Launches Clinton Fund-raising Probe
Clinton Threatens to Veto Education Bills

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