Appellate Court Asked to Review Starr Appointment : Whitewater: Sen. Levin urges judicial panel to rule whether new independent counsel’s past political activities make him an inappropriate choice.

The chairman of the Senate subcommittee that oversees the independent counsel law called Friday for the appellate court panel that appointed new Whitewater counsel Kenneth W. Starr to rule on whether Starr’s past Republican activities are grounds for his withdrawal.

With Democratic anger over Starr’s appointment continuing to rise, Sen. Carl Levin (D-Mich.) wrote Judge David B. Sentelle, presiding judge of the independent counsel division of the U.S. Court of Appeals here, to complain that Starr’s appointment “puts at risk the historical public acceptance of the independent counsel process.” Starr “lacks the necessary appearance of independence essential for public confidence,” the letter said.

Levin, chairman of the Senate Governmental Affairs subcommittee that handled the newly enacted independent counsel law, said “the same standard should apply to Mr. Starr” that Republicans applied to former special counsel Robert B. Fiske Jr. when they expressed concerns that he was not independent.

Starr was named by Sentelle’s panel Aug. 5 under a new independent counsel law signed by President Clinton on June 30. Fiske, who had been in charge of a six-month Whitewater investigation, was named by Atty. Gen. Janet Reno under pressure from Republicans, after the previous law expired.

White House officials have been careful not to join in public attacks on Starr and even distanced the President from critical statements about Starr made by Clinton’s personal attorney, Robert S. Bennett.

As independent counsel, Starr will investigate whether Clinton benefited from money funneled to Whitewater Development Corp. from a now-defunct Arkansas savings and loan owned by James B. McDougal, his investment partner in the Whitewater real estate venture.

Congressional Democrats and other Clinton supporters have charged that Starr cannot be impartial and objective in his investigation because of his interest in a Republican political career and his earlier interest in intervening in a sexual harassment suit filed by Paula Corbin Jones, a former Arkansas state employee, against President Clinton.

Before his appointment, Starr reportedly considered filing a brief in the sexual harassment suit to argue against the President’s claim of immunity. He also reportedly considered a run for the Republican nomination for U.S. Senate from Virginia.

“We have finally uncovered a real case of political interference in the Whitewater investigation: the actions by partisan Republicans who successfully demanded that Robert B. Fiske Jr. be removed as independent prosecutor,” complained a statement released Friday by the “Back to Business Committee,” an ad hoc group of Democratic politicians with close ties to the White House.

Sentelle, a conservative North Carolinian and an appointee of President Ronald Reagan, confirmed Friday that he had met with conservative Republican senators in July, during the time that his panel was selecting a new Whitewater special prosecutor.

Sen. Lauch Faircloth (R-N.C.) also confirmed that he and Sen. Jesse Helms (R-N.C.) had lunch with Sentelle on July 14, but both Sentelle and Faircloth denied that they discussed any issues related to the selection of a new independent counsel.

Faircloth added in a statement released Friday that the mounting criticism of Starr’s selection “shows how very worried (the Democrats) are, now that they have lost control over the investigation since their hand-picked special counsel was rejected.”

Meanwhile, key Senate Democrats have privately told top Administration officials that Deputy Treasury Secretary Roger Altman should resign over his role in the Whitewater matter, and his departure now appears all but certain, sources said.

The negative verdict on Altman--conveyed by Senate Banking, Housing and Urban Affairs Committee Chairman Donald W. Riegle Jr. (D-Mich.) and Sen. Paul S. Sarbanes (D-Md.), who is in line to assume the chairmanship next year--effectively sealed the Treasury official’s fate, the sources said. Altman has been severely criticized by lawmakers for an alleged lack of candor during testimony about meetings between Treasury and White House officials concerning the status of a federal regulatory investigation linked to Whitewater.

Altman declined to comment Friday, but Administration sources have said he recognizes that it is becoming increasingly difficult for him to survive the controversy in his current post.