Agency Probes Top Aide’s Role in Fund-Raising

Embroiling the White House more deeply in the Democratic campaign controversy, a federal watchdog agency opened an investigation Wednesday into allegations that Harold M. Ickes--the senior White House official who oversaw President Clinton’s reelection bid--may have illegally engaged in fund-raising activities.

The Office of Special Counsel, which enforces the Hatch Act that prohibits federal officials from soliciting campaign funds, has begun an inquiry into reports that Ickes sought to steer a $500,000 donation from a Texas businessman to the Democratic National Committee in late October. The administration acknowledged this week that Ickes improperly used a White House fax machine, telephone line and possibly a computer in communicating with an intermediary about the donation.

Ickes’ actions could pose a more serious problem for a White House already buffeted by the widening fund-raising furor. It could renew calls for Atty. Gen. Janet Reno to appoint an independent counsel to investigate alleged campaign wrongdoing.

In denying previous requests to take this step, Reno said there was no credible evidence that sufficiently high-ranking administration officials had broken the law. However, Ickes until recently was deputy White House chief of staff, and some experts believe that he would be covered by the independent counsel law.

In any case, the episode further fuels suspicions that top administration officials, using the White House and its resources, were unduly involved in Democratic campaign activities. Controversy already has centered on 103 coffee klatsches put on at the White House for Democratic donors and other supporters and on the alleged use of a White House computer to track donors and the favors extended to them.

The hard-driving Ickes, a longtime Clinton loyalist, was the point man in the White House for the president’s reelection campaign at the time the exchange with an intermediary for the prospective donor occurred. Ickes left the White House after the election when he did not receive a high-level appointment. He remains a federal employee and is handling preparations for the upcoming meeting of the seven major industrial nations.

Ickes, 57, did not return phone calls this week.

Lanny J. Davis, a White House spokesman, denied that Ickes broke the law. Davis said that Ickes’ contacts did “not constitute a solicitation in violation of the Hatch Act.”

Although Ickes chaired weekly White House “money meetings” and strategy sessions with Democratic officials during the 1996 race, there were limits on his campaign role: As a federal official, he was barred from soliciting campaign funds, especially at the White House or using government resources.

According to people who were involved, Ickes followed up on an offer made to Clinton on Oct. 22 for a $5-million donation from William R. Morgan, a Richardson, Texas, businessman. The offer, made at a Florida fund-raising banquet, was relayed by an associate of Morgan’s, R. Warren Meddoff. Ickes later called Meddoff to discuss it and subsequently faxed him the names of groups to which Morgan could contribute, including the Democratic National Committee. The events were first reported by Newsweek magazine.

The committee, which was besieged by accounts of illegal or suspect contributions at the time, turned down Morgan’s offer because “we could not find sufficient information about him that would warrant us taking such a large contribution,” spokeswoman Amy Weiss Tobe said.

Democratic sources said there was concern that the sudden offer of the late money from an unfamiliar donor about whom they could learn little might be a set-up. Said one: “It seemed too good to be true.”

Meddoff, a South Florida export manager, said in interviews Wednesday that he had persuaded Morgan, a friend and frequent business partner, to pledge up to $5 million of campaign support.

At the fund-raiser in a Miami area hotel, Meddoff said, Clinton passed by his table and he handed the president a business card with the handwritten message: “My associate has $5 million he is prepared to donate to the DNC.”

Meddoff recalled: “He read the back of it, took two steps, came back to me, asked for another card to pass on to one of his staffers.”

Meddoff said that he engaged Clinton in a brief conversation, urging the president to authorize U.S. flights of relief supplies to victims of a recent hurricane in Cuba.

Four days later, Meddoff said, Ickes left a phone message at his office saying that “the president had asked me to handle this matter” and requesting that he call back.

Meddoff and Morgan both said that Morgan attached only one condition to his offer: He wanted to be able to claim most or all of the donation as a tax deduction.

Ickes sent Meddoff a three-page fax, detailing how Morgan could donate $500,000 to the DNC--along with a total of $540,000 in contributions to three nonprofit organizations. The DNC donation would not be deductible since it is a political contribution, but the rest ostensibly would be.

A copy of the Oct. 31 fax, provided to The Times by Meddoff, shows that Ickes also listed specific bank account numbers in which Morgan could deposit the checks. One of the groups was “Defeat 209,” an organization lobbying against the California anti-affirmative action ballot measure that passed in November.

Davis, a White House special counsel, confirmed that Ickes used a fax machine, phone line and perhaps a computer in the White House for the communication. Government resources cannot be used legally for partisan activities unless the government is reimbursed.

“As a result,” Davis said, “we are in the process of billing the Democratic National Committee for reimbursement.”

However, Davis said, he does not believe that Ickes’ conduct amounts to a violation of law.

“Based upon our understanding of the facts, Mr. Ickes’ identification of entities does not constitute a solicitation in violation of the Hatch Act. Rather, it is a response to Mr. Meddoff’s request for organizations to which he could make substantial contributions,” Davis said.

Meddoff said that Ickes later called and asked him to destroy the fax.

“Harold Ickes called me and said, ‘I shouldn’t have sent you that memo. Please shred it,’ ” Meddoff said.

Meddoff, 44, said that the conversations about the donation ended on Oct. 31 after Morgan insisted on a thank-you letter expressing Clinton’s appreciation.

Morgan, 58, termed “totally ridiculous” the notion that he in any way had sought to embarrass the DNC or Ickes. “Wouldn’t you, if you gave $5 million, want some thanks?” he asked.

Michael G. Lawrence, a spokesman for the Office of Special Counsel, said that the decision to open an investigation of Ickes was made internally, without a request from Congress or elsewhere. He said that the first step will be to ask for relevant documents and that the length of the inquiry “depends on the cooperation that we get.”

The office, which functions within the executive branch but apart from the Justice Department and independent prosecutors, has the authority to seek administrative sanctions, including termination of an employee who violated the Hatch Act. It has the power to subpoena documents, question parties under oath and refer cases to federal prosecutors.

Reno has assigned a Justice Department task force to investigate the fund-raising allegations concerning the Democratic Party and has vowed to reconsider her rejection of the requests to appoint an independent counsel if new evidence warrants such a move.

Rep. Dan Burton (R-Ind.), chairman of the Government Reform and Oversight Committee which is investigating Democratic fund-raising practices, asked Ickes this week to provide the panel with a broad range of documents, including “all records relating to contacts with any prospective donors to the DNC, Clinton-Gore and/or any tax-exempt organization.”

Staff writer Robert L. Jackson contributed to this story.