Laxalt Drops Suit Against McClatchy

Republican presidential hopeful Paul Laxalt said today he has agreed to drop his $250-million libel suit against the McClatchy Newspapers after “extensive discovery” found no evidence of skimming at a Laxalt family-owned casino.

The parties agreed that a panel of three retired judges will determine whether Laxalt’s attorneys’ fees will be paid by the newspapers.

“No other amounts are at issue,” a joint statement said.

The settlement, to be filed in U.S. District Court in Reno, clears the major roadblock to a formal campaign by the former Nevada senator for the 1988 Republican presidential nomination.

“Today marks the end of a very trying experience. . . . At long last, the Bee has accepted my demands,” Laxalt said at a news conference at his Washington law office.

McClatchy Sees Victory

But C.K. McClatchy, president and editor of the newspaper group, said in San Francisco that he considers the settlement a victory.

“We have not retracted, we have not apologized and we have not paid any damages,” McClatchy told a news conference. “Regardless of what the senator may say to further his efforts in his campaign, we are not backing away from anything we said in the news story.”

Laxalt had sued McClatchy over a story that appeared in the Bee newspapers in Sacramento, Modesto and Fresno, Calif., saying the Internal Revenue Service had evidence of skimming at the Ormsby House hotel-casino when it was owned by the Laxalt family.

Laxalt read from a joint statement issued today by himself and McClatchy Newspapers:

“Extensive discovery taken in this libel action has not shown that there was in fact a skim at the Ormsby House and has produced no evidence that Sen. Laxalt or any other persons acting on his behalf granted anyone the right to skim the casino in exchange for improper or illegal financing. Nor has extensive discovery taken in this libel action produced any evidence that Laxalt acted to hinder or defeat any government investigation.”

Since the suit was filed Sept. 21, 1984, the two parties engaged in complicated legal maneuvering in preparation for the trial, which had been scheduled to begin later this month in Reno.

Laxalt has denied knowledge of any skimming at the Ormsby House hotel-casino while his family operated it in the early 1970s. Skimming is the illegal diversion of money from a business before taxes are collected.

The settlement came one day after a federal judge in Reno issued various pretrial orders, including one to mail out questionnaires to prospective jurors.

Laxalt retired from the Senate last year at the end of his second term. He also served a term as Nevada governor. The close ally of President Reagan announced last month that he had formed an exploratory committee to assess his potential as a 1988 presidential candidate.