Official Washington Abuzz Over Mystery of Leaked Budget Memo

It’s the question all of political Washington has been asking this week: Who leaked Alice Rivlin’s top secret memo to the Republicans?

The inside-the-Beltway mystery has not been solved but some clues are now surfacing and they have left red faces at the Treasury Department.

The draft of the memo by Rivlin, director of the White House Office of Management and Budget, was leaked to Republican operative William Kristol--who in turn leaked it to the Washington Post, which ran a story about the memo Sunday. (The Times ran the Post story in its Sunday editions.) The leaked copy had been sent to Treasury Secretary Lloyd Bentsen.

In the memo, Rivlin summarized a wide range of potential budget options, including broad-based tax increases and politically unpopular cuts in Social Security and Medicare. President Clinton quickly disavowed that the Administration was considering such politically dangerous steps.

Kristol, chairman of the Project for the Republican Future, now insists that he does not know who sent the document to him.

Originally, he told the Washington Post that it was a “public-spirited senior Administration official.” But he said in an interview Tuesday that “it came in over the transom and I really don’t know who did it.”

The copy of the 11-page memo leaked to Kristol bears the handwritten initials, “ESK.” Edward S. Knight is general counsel of the Treasury Department and presumably a man smart enough not to leak a memo bearing his initials. At the time the Oct. 3 memo was circulated, Knight was also serving as Treasury’s executive secretary and was in charge of all paperwork flowing to Bentsen.

Treasury officials confirmed that Knight’s initials are on that copy because it had been sent to Bentsen. Knight denied in an interview that he leaked the document and other Treasury officials supported him.

Treasury officials said that Bentsen was traveling when he received the memo by fax over “secure channels.” They said they did not believe the copy was given to Kristol until after Bentsen returned. They said that they do not know who was responsible.