Finding Cisneros Lied, Reno Seeks Outside Inquiry

Atty. Gen. Janet Reno asked for the appointment of an independent counsel to determine whether “false statements” to the FBI by Housing and Urban Development Secretary Henry G. Cisneros violated federal law, it was announced Tuesday.

Reno, in asking a panel of federal judges to name an independent counsel, concluded that Cisneros had knowingly provided the FBI with false information about thousands of dollars that he paid to his former mistress, Linda Medlar.

Cisneros, appearing before reporters after the announcement, vowed to remain at his post in order to continue protecting housing programs against congressional budget cutters, but he refused to take questions. Senior HUD officials cheered and applauded, drowning out reporters who shouted questions as Cisneros left.

Cisneros said Reno’s conclusion “is not a finding of criminal wrongdoing. It is only a decision that more information needs to be examined.” He said he regrets “any mistakes that I have made” but insisted he had “at no point violated the public’s trust.”

While describing himself as disappointed by the decision to seek an outside prosecutor, Cisneros said he hopes that the probe will be completed “expeditiously.” He is “confident” the independent counsel will find he “did not engage in criminal wrongdoing,” he said.

President Clinton, in a statement, praised Cisneros as “a good man and an effective public servant.” While he joined in regretting any mistakes the secretary had made, Clinton said he looks forward “to his continued valuable service.”

In a telephone conversation with Cisneros, the President turned down his offer to resign, White House Press Secretary Mike McCurry said.

Describing the preliminary inquiry by the Justice Department that led to her decision, Reno noted that it began with press reports quoting Medlar as alleging that Cisneros had lied to the FBI about the payments during the background investigation for his nomination to the Cabinet.

The allegations appeared to be supported by transcripts of telephone conversations between Medlar and Cisneros, which she had secretly taped for almost four years. Comparing the transcripts and the FBI’s background interview of the nominee established that Cisneros had provided false information, Reno said.

During his FBI interview, Cisneros confirmed his relationship with Medlar, which had been reported years ago by the press, and told agents he had been giving financial support to her for some time. “However, he also stated to the FBI that he had paid her no more than $2,500 at a time and no more than $10,000 a year,” Reno’s application to the court said.

“In fact, he paid her more than $2,500 at various times, and his total annual payments to her were between $42,000 and $60,000,” Reno said. “Secretary Cisneros’ statement was made to the FBI soon after he made a payment to Medlar that was substantially larger than $2,500.”

The independent counsel in the Cisneros case will be the third to investigate high Clinton Administration officials. One is examining the actions of Clinton and others in connection with his Whitewater real estate investment before he became President. Another is investigating former Agriculture Secretary Mike Espy, who resigned after allegations that he had accepted favors from companies regulated by his department.

Reno, in her application to the court, noted that “not all false statements are material as a matter of law.” But she added that “the materiality of Secretary Cisneros’ false statements to the FBI is a close and difficult factual and legal issue that must be resolved by an independent counsel.”

Cisneros’ lawyer, Cono Namorato, called Reno’s action “inexplicable.” In a statement, the attorney said the facts had been fully developed during the preliminary investigation, “particularly with regard to the materiality issue.”

But Reno noted that the independent counsel also must evaluate whether Cisneros and Medlar had agreed to hide information about his payments to her during his Senate confirmation process “in violation of the (federal) conspiracy statute.”

On the question of whether Cisneros’ false statements were “material” in a legal sense, Reno noted that they “were potentially a factor” in three related inquiries: the FBI’s background investigation, the Clinton transition team’s gathering of information on nominations, and the preparation of nominees for the confirmation process.

The Justice Department’s investigation also disclosed that Cisneros, after being in his Cabinet post for several months, “was seeking ways to provide for Medlar, without having to continue making regular payments himself.”

Reno’s application cited one transcript in which Cisneros told Medlar that he had asked a businessman friend who had been a political supporter--identified by government sources as Morris Jaffe of San Antonio--whether he could arrange for a job or other aid for Medlar.

Medlar later told Cisneros that Jaffe had sent her $5,000. “In addition, we obtained evidence that the businessman later arranged for the provision of approximately $11,000 more to Medlar,” Reno said. Solicitation or acceptance of a gratuity by a public official can be a crime if it is “for or because of any official act,” Reno said. But a review of public records on Jaffe’s financial holdings “has not disclosed even a hypothetical potential for Secretary Cisneros to take action as the head of HUD which would affect” the San Antonio businessman, Reno said.