Campaign finance furor sparked anew as panel releases Justice memos

By Ian Christopher McCaleb/CNN

June 6, 2000
Web posted at: 6:42 p.m. EDT (2242 GMT)

WASHINGTON (CNN) -- As soon as members of Congress returned from their week-long Memorial Day break Tuesday, the House Government Reform Committee set about its ongoing task of getting to the bottom of the alleged campaign finance improprieties of the Clinton-Gore Administration -- this time armed with the text of a memorandum penned by the FBI director that reflects poorly on the vice president.

FBI Directory Louis Freeh

The document, written by FBI Director Louis Freeh well over two years ago, accused Al Gore of acting as a shrewd, knowledgeable fund-raiser for the 1996 Clinton-Gore re-election effort, despite Gore's regular insistence to the contrary.

"In the face of compelling evidence that the vice president was a very active, sophisticated fund-raiser who knew exactly what he was doing," Freeh wrote to Attorney General Janet Reno in November of 1997, "his own exculpatory statements must not be given undue weight."

The contents of the memo were revealed during an afternoon hearing of the Government Reform Committee, which has probed a variety of campaign finance-related accusations against the 1996 Clinton campaign.

In his memo, Freeh specifically focused on the fund-raising telephone calls Gore made from his office as the 1996 campaign was underway. Gore, in statements that have come back to haunt him on a number of occasions, first said soon after the calls were revealed that "no controlling legal authority" governed his actions, and argued that he was not engaged in attempts to drum up regulated "hard funds."

Later, during the early portions of his campaign for the 2000 Democratic presidential nomination, Gore, while adopting a campaign finance reform mantle as part of his full campaign platform, described himself as an "imperfect" messenger on the issue, and acknowledged he probably should not have made any such telephone calls from his office.

Freeh, who urged the attorney general to appoint an independent counsel in the case, said in his memo that the Justice Department seemed quite content to rely "almost exclusively on the vice president's own statements to draw inferences favorable to him even where those statements are contradicted by other reliable evidence."

Freeh, echoing the earlier-revealed sentiments of former lead campaign finance investigator Charles LaBella, urged Reno to consider a top-down investigation at the White House, starting with President Bill Clinton.

"Most of the alleged campaign abuses flowed directly or indirectly from the all-out efforts by the White House and the [Democratic National Committee] to raise money," the memo said.

House Government Reform Committee Chairman Dan Burton

The committee released the full text of the Freeh memo, and the LaBella memo, whose contents have been documented extensively since the Los Angeles Times got ahold of its contents in March.

The Justice Department had not wanted the documents released. Committee Chairman Dan Burton (R-Indiana), said his panel had no choice, as it had been endeavoring for months to discover why Reno decided against a special prosecutor.

"The question is not how we can release these documents," Burton said in his opening statement. "The question is how we cannot."

"We certainly did not want these documents released," a senior Justice Department official said later in the afternoon in response. "But now that they are, we believe that they will show that the attorney general made all the right decisions."

The official did not wish to be identified.

The Justice Department launched its preliminary investigation into the allegations of system abuse in the summer of 1997.

The probe looked into a series of related and seemingly unrelated instances, including possible illegal donations made to the Democratic National Committee (DNC) by operatives for the People's Republic of China; the fund-raising calls made from the White House by Gore; Gore's appearance at an illegal fund-raiser held at a California Buddhist temple; and the transfer of sensitive communications equipment to China by U.S. firms.

Reno opted not to appoint a special prosecutor after hearing from LaBella, Freeh and others. The Watergate-era statute under which a special prosecutor may be appointed has since expired.

House committee soldiers on

During its Tuesday hearing, the Government Reform Committee cornered Lee Radek, head of the Justice Department's Public Integrity Section, and pressed him on his role during Reno's deliberations over the possible appointment of an independent counsel.

Lee Radek, head of the Justice Department's Public Integrity Section

While Reno had the findings and recommendations of Freeh and LaBella to consider, she opted not to appoint a special counsel, saying at the time that she believed such a move was not necessary, and any continuing investigation could be handled by the department's Campaign Finance Task Force.

Radek was alleged to have remarked in late 1996 that he had been pressured not to push his luck on the campaign finance issue, because the attorney general's job may hang in the balance.

Radek's alleged comments were revealed at a Senate Judiciary subcommittee hearing in mid-May.

Grilled by Burton and other Republican members of the committee, Radek said Tuesday that he did not recall making such statements -- saying they wouldn't suit his regular manner of speaking, and they wouldn't suit the way deliberations over the possible appointment of a prosecutor were handled.

Asked directly if he said any such thing, Radek replied, "I certainly did not."

"The internal debate was never about politics," Radek said. "Nobody was protecting anybody."

Radek described Reno's deliberations over the application of the independent counsel statute as difficult, but thorough, saying she compared the Clinton-Gore accusations to previous applications of the statute to test the legality of her options.

"She wanted to consider whether she was making an even application of the statute," Radek said.

Appearing with Radek were FBI Deputy Director William Esposito and Assistant FBI Director Neil Gallagher. Both expressed unwavering loyalty to Reno, though Gallagher did say he and the attorney general "did disagree" on their interpretation of the independent counsel statute.

"I found her to be a person of integrity who would do the right thing," Esposito said.

A clearly frustrated Burton, who early on in the hearing accused the department of trying to "intimidate" him by hinting that it had documents about him in its possession, told all three witnesses that he admired their loyalty, but he still thought they were trying to hide something.

"I admire your public loyalty," he said. "But when you read those memos, it sure paints a different story. Those memos speak for themselves."

Turnout among Democratic panel members was sparse. Rep. Tom Lantos (D-California), the highest ranking minority member present, said the committee had spent $8 million on its campaign finance probe, and turned up nothing.

"This hearing should be titled 'beating a dead horse,'" Lantos quipped dryly.

CNN's Terry Frieden contributed to this report.