Clintons’ Defense Fund Quits as Contributions Lag

With contributions dwindling far below the amounts needed, trustees of the 3-year-old legal defense fund established for President Clinton and the first lady said Tuesday that they are closing the operation.

The fund took in only $79,702 during the first 11 months of this year, leaving the Clintons with an estimated $2.9 million in unpaid legal bills resulting primarily from the lengthy Whitewater investigation, officials said.

Clinton had said he would pay off any remaining legal debts after he leaves office in 2001. However, he asked White House lawyers Tuesday for other options to pay off mounting legal bills.

Known officially as the Presidential Legal Expense Trust Fund, the operation generated more trouble and criticism than some Clinton supporters felt it was worth. Embarrassed trustees decided to refund more than $600,000 in contributions collected last year by Yah Lin “Charlie” Trie, a central figure in investigations of Democratic fund-raising activities, after they became suspicious of Trie’s motivation and concerned that some of the $1,000 donations from members of a Buddhist sect may have been coerced.

“The notoriety associated with that incident had a chilling effect on contributions to the trust fund,” acknowledged Michael H. Cardozo, the fund’s executive director.

The Justice Department and congressional committees began investigating the fund late last year, leading to associated legal expenses of nearly $90,000, Cardozo said.

The fund had taken in $1.3 million since its establishment in June 1994 and paid legal bills of $766,134 for the Clintons after paying its own legal expenses and taxes. It was structured as a grantor trust to protect the Clintons from having to pay gift taxes.

Cardozo said the Clintons accepted the trustees’ recommendation to close down the fund effective today, after which no further contributions will be accepted. Rules adopted by the trustees--co-chaired by the Rev. Theodore M. Hesburgh, president emeritus of Notre Dame University, and former Atty. Gen. Nicholas deB. Katzenbach--barred registered lobbyists, federal employees, political action committees and labor unions from providing support.

No contributions greater than $1,000 were accepted from the 9,293 persons who gave to the trust, officials said. The fund released names and addresses of all donors; contributors’ occupations included business, law, medicine, consulting and law enforcement.

Cardozo said the Clintons will have to come up with another way to raise money to pay their legal bills, including fees associated with the sexual harassment suit filed against the president by Paula Corbin Jones. That case is scheduled to go to trial in May.

“The president has many friends and supporters who would like to be helpful to him,” he said.

The fund was a lightning rod for controversy, largely because it was the first for a sitting president. Former President Richard Nixon had accepted donations to help cover some Watergate-related legal bills after he resigned from office, but he paid the bulk of his legal fees himself.

Congressional Republicans objected to Clinton’s fund, saying it violated a ban on a president’s receipt of gifts other than those of “protocol and etiquette,” and they tried without success to obtain an opinion on it from Atty. Gen. Janet Reno.

Cardozo said all questions of law and ethics “were carefully considered by the legal advisors” who worked to set up the fund.

As he began a winter vacation on Hilton Head, S.C., Clinton said he wished to thank “the thousands of people who contributed so generously” to the fund.

He said he has asked the White House counsel’s office “to advise us concerning the ethical and legal requirements that would govern any future efforts” to pay past legal bills as well as “those that will be generated by the need for ongoing representation.”

Clinton told a press conference last year he owed his lawyers more than his $200,000-a-year salary and legal fund could cover. But he said that “if I stay healthy” after leaving office, “I’ll be able to pay my bills and earn a pretty good living.”