Preliminary Inquiry of Brown Is Opened

The Justice Department announced Thursday that it has opened a preliminary inquiry to decide whether Commerce Secretary Ronald H. Brown’s financial practices should be investigated by an independent counsel.

Atty. Gen. Janet Reno, who ordered the 90-day inquiry opened Wednesday, did not specify publicly what the investigation would cover but noted that the allegations have been “widely reported by the news media.”

In question are Brown’s business activities, chiefly in communications and investments, before he joined the Cabinet in early 1993. In a letter to Reno last month, 14 Republican senators asked specifically for an inquiry into Brown’s financial ties with Washington businesswoman Nolanda Hill, his former partner in a company called First International.

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Opening the inquiry means that the Clinton Administration has set a record for the number of Cabinet officers facing possible scrutiny by special prosecutors at the same time.

Former Agriculture Secretary Mike Espy stepped down after an independent counsel was named to investigate his relationships with firms involved with the Agriculture Department. A preliminary inquiry into whether Housing and Urban Development Secretary Henry G. Cisneros lied to the FBI in a background investigation has been extended into next month.

And independent counsel Kenneth W. Starr is widening his examination of Administration figures, led by President Clinton, in the investigation of events related to Clinton’s partnership in the Whitewater real estate venture in Arkansas before he became President.

Noting that the independent counsel law requires the opening of a preliminary inquiry if the information is specific and comes from a credible source, Reid Weingarten, Brown’s lawyer, said that the Justice Department had no choice but to open the inquiry.

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“This is the stage at which for the first time they evaluate the allegation,” Weingarten said. Saying that he and Brown are “eager to cooperate,” Weingarten expressed confidence “that at the end of their investigation, Justice will conclude there has been no violation of the law and that there’s no reason to seek appointment of an independent counsel.”

Reacting to the announcement of the latest preliminary inquiry, White House spokesman Mike McCurry said: “The attorney general is doing what attorneys general are supposed to do.”

McCurry said that Clinton has full confidence in Brown and that there has “been no discussion whatever of anything like” asking him to take leave until the inquiry is completed.

As for setting a record, McCurry said: “It’s a sign of the times in which we live.”

The letter from the senators raised concerns about whether Brown had misled Congress during his confirmation hearings and had properly disclosed his transactions on financial disclosure statements that are required by law.

For example, Brown reported that on Dec. 15, 1993, he sold his stake in First International to Hill for $250,000 to $500,000. However, other documents later showed that the transaction was not completed until last summer, when Hill paid off $190,000 of Brown’s personal debts.

The letter, drafted by Sen. Lauch Faircloth (R-N.C.) and Senate Commerce Committee Chairman Larry Pressler (R-S.D.) and signed by a dozen other lawmakers, stopped short of asking Reno to seek appointment of a special counsel. It called for her to detail “what steps, if any, you are planning to take to determine if Mr. Brown has fully complied with the law.”

The senators charged that Brown “may have filed inaccurate financial disclosure statements or engaged in tax avoidance,” but they did not elaborate on any tax issues.

At the time, Weingarten called the letter “partisan politics at its worst” and insisted that Brown paid all taxes due when Hill bought out his interest in First International.