Special Counsel Probe of Aid to Iraq Denied : Inquiry: Atty. Gen. Barr rejects congressional request, cites lack of evidence of White House wrongdoing.

Atty. Gen. William P. Barr on Monday rejected a congressional request for an independent counsel to investigate whether high-level Bush Administration officials violated the law in carrying out and defending their prewar policy toward Iraq.

In tough language, Barr said there was no specific evidence warranting an inquiry by an outside prosecutor into allegations that White House aides and other Administration officials acted illegally in providing prewar aid to Iraq or later tried to conceal the extent of the aid.

The Justice Department is already investigating the only two specific allegations of criminal conduct, and these involve low-level officials, said the attorney general.

Barr’s decision cannot be appealed under the post-Watergate law on independent counsels, according to legal experts. Yet in closing the door on the month-old request by the House Judiciary Committee for a criminal inquiry, Barr sparked a new round of political accusations.

Democratic presidential nominee Bill Clinton, who has said little about the issue in the past, said he was “troubled” by Barr’s decision and urged the attorney general to conduct a full evaluation of the charges.

“There are plainly enough allegations of illegal conduct that the Justice Department itself should look into it,” Clinton said while campaigning in Philadelphia. “The burden’s on his back.”

President Bush, while acknowledging that his policy had failed, has defended his Administration’s economic assistance and other prewar aid toward Iraq as an effort to bring it into “the family of nations.” The Administration had hoped the economic incentives would foster stability in the Persian Gulf region by taming Iraqi leader Saddam Hussein. Administration officials also maintained that any military assistance to Iraq was an inadvertent consequence of the financial aid.

Bush has denied that there was any criminal misconduct in prewar aid to Iraq or later in defending the policy before Congress.

Democrats in Congress accused the attorney general of “stonewalling” to protect the politically ailing Bush. They vowed to press ahead, into the fall presidential election, with their investigations of the Administration’s assistance to Iraq.

“Mr. Barr is playing a dangerous political game in a desperate attempt to protect the Bush Administration,” said House Banking Committee Chairman Henry B. Gonzalez (D-Tex.), one of the Administration’s harshest critics on Iraq policy.

Rep. Charles E. Schumer (D-N.Y.), a senior member of the Judiciary Committee, accused Barr of trying to “sweep the whole issue under the rug” and challenged Barr’s ability to be fair while “the President’s political life is hanging by a hair.”

Judiciary Committee staffers indicated this was the first time an attorney general has rejected a congressional request for an independent counsel since the law was passed in 1978. However, a Justice Department official said one earlier request was also denied. He said he could not discuss its details because they had never been made public and the request was made years ago.

John F. Banzhaff III, a law professor at George Washington University, said there is no appeal of the attorney general’s rejection of the request, a view supported by members of the Judiciary Committee and the Justice Department official.

On July 9, 20 of the 21 Democrats on the Judiciary Committee sent Barr a letter formally requesting an independent counsel. The letter described several areas of potential criminal conduct by unnamed current and former Administration officials in the execution and defense of the prewar policy.

Among other things, the letter alleged that military designations had been removed from a list of Commerce Department export licenses to Iraq that was sent to Congress. The law requires that Congress be notified when military equipment is exported. The letter also said officials had provided misleading testimony to Congress and cited alleged interference by the Administration with the criminal prosecution of the Atlanta branch of an Italian bank, which provided Iraq with $5 billion in concealed loans.

The statute makes appointment of an independent counsel mandatory if specific, very senior Administration officials, known as “covered” individuals, are suspected of criminal conduct. An outside counsel also can be appointed if the attorney general determines the Justice Department has a conflict of interest in investigating allegations against someone not covered by the statute.

Barr rejected the request on both grounds, saying: “The letter contains no specific information concerning crimes by any person, let alone any ‘covered’ person.”

The committee request also sought an investigation into actions by Administration officials in November, 1989, when they pushed through $1 billion in food-loan guarantees for Iraq in the face of evidence of irregularities in the program and possible diversion of food aid to buy weapons.

“While the wisdom of that decision can be debated, the fact that it was not criminal cannot,” concluded Barr.

Gonzalez has accused a group of senior White House officials of thwarting congressional investigators by conspiring to withhold information and sensitive documents to cover up the extent of U.S. aid to Iraq. But Barr defended the handling of the congressional requests as routine and legal.

In apparent anticipation of the Democratic accusation that politics played a role in his decision, Barr said the department’s review was conducted by career prosecutors, who concurred with the decision.

“Without exception, every prosecutor reviewing this matter at every level of the department is of the view that the criteria for invoking the statute are not present here,” said Barr.

The attorney general said two matters in the Judiciary request are under criminal investigation. He identified them as the alteration of the list of Iraqi export licenses and allegedly contradictory testimony by officials to congressional committees.

“The allegations have been and are being properly investigated, and it is clear that the criteria for invoking the statute are not present,” wrote Barr.

At a press conference, Judiciary Committee Chairman Jack Brooks (D-Tex.) disputed Barr’s contention that the request had to set forth specific evidence of criminal conduct by identified individuals.

“The attorney general has misconstrued--whether purposely or not--what is required under the independent counsel statute,” said Brooks. “The statute does not require Congress to present a signed and sealed indictment of criminal wrongdoing for the U.S. prosecutor to simply execute the next day.”

As an example, Brooks cited a 1986 request by the Senate Judiciary Committee for appointment of an independent counsel to investigate the Iran-Contra scandal. The request was approved by then Atty. Gen. Edwin Meese III. A copy of the letter showed that the request was very general.

Barr’s letter, however, contended that independent counsel Lawrence E. Walsh was appointed in the Iran-Contra case only after Congress provided additional details of specific possible violations.

While Brooks said the Judiciary Committee does not plan its own investigation into the Administration’s Iraq policy, Barr’s decision apparently will not stop other congressional investigations.

Past Probes

Here is a list of independent counsel investigations:

PROBE LED TO PROSECUTION

Former Reagan White House aide Michael K. Deaver, investigated by Whitney North Seymour, for violation of conflict-of-interest laws. Convicted. Cost $1,469,650.

Numerous Iran-Contra figures investigated by Lawrence E. Walsh, including Reagan White House aides Oliver L. North and John M. Poindexter and former Defense Secretary Caspar W. Weinberger. Seven guilty pleas, one conviction that stood, three convictions overturned and three pending cases. Cost $31.4 million as of May 31.

Former top Housing and Urban Development officials accused of a conspiracy to defraud the government, investigated by Arlin M. Adams. Six indictments. Cost $46,000 so far.

Former Atty. Gen. Edwin Meese III, investigated by James C. McKay for alleged improper connections to a defense contractor, Wedtech Corp. No prosecution. Former Reagan Administration White House aide, also investigated by McKay for Wedtech connections. Conviction overturned. Cost $2,569,777.

NOT PROSECUTED

Hamilton Jordan, former President Carter’s chief of staff, investigated by Arthur H. Christy for alleged drug use. Cost $181,938.

Tim Kraft, Carter’s national campaign manager, investigated by Gerald Gallinghouse for alleged illegal drug use. Cost $3,348.

Former Labor Secretary Raymond J. Donovan, investigated twice by Leon Silverman for alleged links to organized crime. No prosecution either time. Costs $326,444 and $7,025.

Former Atty. Gen. Edwin Meese III, investigated by Jacob Stein for alleged improprieties in financial transactions and appointment of business associates to federal jobs. Cost $311,848.

An unidentified individual, investigated by a counsel whose last name is Harper, for alleged willful failure to file an income tax return. No details were released. Cost $44,498.

Former Assistant Atty. Gen. Theodore B. Olson, investigated by Alexia Morrison for allegedly testifying falsely to Congress. Cost $1,514,465.

Source: Times wire reports