Reno Evaluates Need for Probe of Calls by Gore

Following news that more than $100,000 in donations raised from the White House by Vice President Al Gore was improperly diverted, Atty. Gen. Janet Reno on Wednesday acknowledged that she is formally evaluating whether to seek appointment of an independent counsel to investigate the matter.

Earlier in the day, Democratic Party officials said that campaign donations not restricted by election law were shifted--without Gore’s knowledge--to a separate party account subject to federal limits. They pledged to reimburse that sum to the appropriate account.

For months, Reno has declined to seek appointment of an independent counsel to probe aspects of the overall fund-raising controversy. On Wednesday she announced that she had approved what could be a first step toward naming an outside prosecutor.

“The [Justice] Department is reviewing whether allegations that the vice president illegally solicited campaign contributions on federal property should warrant a preliminary investigation under the Independent Counsel Act,” said a statement issued by Reno’s office.

Under law, Reno has 30 days to determine whether those allegations are specific and come from credible sources. If Reno concludes that the matter is that serious, she would have an additional 90 days to decide whether to ask a special panel of appellate justices in Washington to appoint an independent counsel.

In a statement issued late Wednesday, Charles Burson, Gore’s counsel, said: “We’ve cooperated fully with the Department of Justice and, of course, we will continue to do so. We remain confident that no law or regulation was violated.”

At the heart of the just-begun evaluation are a sequence of fund-raising calls Gore placed from the White House in 1995 and 1996. Two aspects of the fund-raising activity are now in question:

Whether Gore could lawfully make the solicitations from the White House, and whether the Democratic National Committee’s improper diversion of some of the proceeds, pose a legal problem for Gore.

On the first point, then-White House Counsel Abner J. Mikva warned in 1995 that “no fund-raising calls or mail may emanate from the White House or any other federal building.” However, Gore insisted at a news conference in March that there was no “controlling legal authority” prohibiting the telephone soliciting he conducted.

As for the diversion of the proceeds, party officials on Wednesday attributed this to “a clerical staff person in the accounting department” of the Democratic National Committee. Party officials declined to identify the staff person, who they said is no longer with the DNC.

At issue is whether the funds solicited by Gore from the White House were so-called “soft money,” the unrestricted sums that can be used for “party building” activities, or “hard dollars” that can be spent to directly promote the election of federal candidates.

The distinction is important because Reno had said previously that Gore’s fund-raising calls did not appear to violate laws barring fund-raising in government workplaces because “soft money” contributions are not covered by federal election law.

Republicans renewed their calls for an independent counsel to examine the fund-raising controversy. Sen. Arlen Specter (R-Pa.) told reporters he believes it now is “pretty hard” for Reno “to say there’s no basis for an independent counsel.”

A majority of the Republican members of the House Judiciary Committee also urged Reno Wednesday to ask that an outside prosecutor be named to probe a range of alleged Democratic campaign abuses.

The Senate Governmental Affairs Committee is to resume its hearings today into the campaign fund-raising--and Gore’s efforts are to be a central focus.

Gore made scores of fund-raising calls from his office to large Democratic donors in 1995 and 1996. In at least five separate instances, $20,000 of donations exceeding $25,000 were designated as “hard dollars” within the DNC, and diverted for spending that would directly benefit a candidate. According to statements by party officials, representatives of Gore and others, the diversions occurred without the consent of the donors, contrary to Federal Election Commission regulations.

“It was clearly the vice president’s understanding that he was raising soft money,” a senior Gore aide said Wednesday. “The people who were making the contributions felt they were making soft money contributions.”

The aide said that, even if Gore did solicit “hard” dollars from his office, this would not have violated federal law because the donors that the vice president called were not on federal property. He maintained that the law was intended to prevent the solicitation of federal employees in their offices or individuals visiting government work places.

Other campaign finance experts, however, have disagreed with this interpretation.

Peter J. Kadzik, a lawyer representing the DNC, said that the party’s policy was to seek the permission of major donors to use the first $20,000 of a large contribution as hard money, which is more difficult to raise because of federal limits. Only then, he said, would this sum be tapped for the hard money account.

Following the disclosure on Tuesday by the Washington Post that this did not happen in specific instances, Kadzik said the DNC planned to transfer $100,000 back to the soft money account. He also said the party was examining its records to see whether this happened in any other instances.

Since the fund-raising task force was created last November, Reno has said she regularly consults with the attorneys and has not received information that would cause her to seek appointment of an independent counsel.

Although the statement issued Wednesday marked the first time Reno or her department has publicly stated it had begun a formal 30-day inquiry, department officials would not rule out that there have been earlier 30-day inquiries that were not disclosed.

In a separate action, the American Civil Liberties Union on Wednesday filed protests with the Senate Governmental Affairs Committee over the scope of subpoenas seeking thousands of internal records from seven conservative and liberal groups in connection with fund-raising hearings.

The protesting organizations include the Christian Coalition, the AFL-CIO, the National Council for Senior Citizens and the National Right to Life Committee.

Group representatives told a Capitol Hill news briefing they will not comply fully with the subpoenas unless the committee modifies them. They accused the panel of trying to “rummage through the files” of their public advocacy groups for confidential data on political and legislative activities.

“We believe that these subpoenas are a thinly disguised attack on the right of all private organizations, of whatever viewpoint, to participate actively and effectively in the political life of this nation,” said the letter to the committee.

Times staff writer Robert L. Jackson contributed to this story.