Starr Says He Won’t Take Jobs at Pepperdine

Independent counsel Kenneth W. Starr said Thursday that, because his investigation “has expanded considerably and the end is not yet in sight,” he is withdrawing from positions promised him at Pepperdine University.

Complaining that legal maneuvering by reluctant witnesses is slowing his investigation of President Clinton, Starr said that he gave up dual deanships at Pepperdine in Malibu because he could not be there by the end of the spring term. Withdrawing will give the university time to find a replacement before the next academic year begins with the fall term.

While the decision is a blow to Pepperdine, which had hoped to enhance its prestige and curriculum by employing the highly visible prosecutor and former federal judge, the reasons behind it were not welcomed at the White House, for they indicate that Starr will not wrap up his investigation swiftly, as Clinton supporters have demanded.

The announcement also could serve to repair Starr’s reputation to some degree, because it suggests such intense dedication to his prosecutorial mission that he is willing to give up the Pepperdine jobs. Public opinion polls show that Starr is held in low esteem by most Americans, who regard his inquiry as politically motivated.

Also Thursday, Starr told the Justice Department that his office would have no conflict of interest in investigating allegations that a Whitewater witness was paid by Clinton foes while aiding prosecutors.

Pepperdine President David Davenport said Thursday that university officials “were delighted when Judge Starr agreed to accept the deanships, and we are disappointed that he will not be able to undertake these roles.”

Davenport said that he and Starr “agree that the university’s needs have to be met. Unfortunately, events beyond his control have prevented him from joining us.”

Starr, in response to questions from reporters, dismissed suggestions that his decision was influenced by criticism that Richard Mellon Scaife, a conservative Pittsburgh billionaire and an aggressive critic of Clinton, had made substantial contributions to Pepperdine.

Starr told reporters on the stairs of the federal courthouse here that he had never met or spoken with Scaife. “I have had no arrangement--implicit, explicit, direct or indirect--with him.”

But White House spokesman James Kennedy said that, by “withdrawing from the deanship of the Scaife-funded Public Policy Institute at Pepperdine University, Mr. Starr acknowledged one of his conflicts of interest in this matter.” Richard Larry, president and trustee of the Sarah Scaife Foundation, said that Scaife or the foundation have given $12.7 million to Pepperdine since 1961, including $1.1 million to the new public policy school. The last of four installments of the $1.1 million will be made in May.

Larry said that Scaife had nothing to do with Starr’s appointments, which also included deanship of the law school at the Malibu campus. Such involvement would have been “entirely improper,” he said.

Scaife received a fax from Pepperdine on Thursday making the announcement that Starr would not be coming, Larry said. Pepperdine faxed the statement the moment Starr began speaking, he said. “It was sent to us because Mr. Scaife is a regent. We had no prior word and no prior discussions. This was a decision of Starr and the university.”

Student Reaction in Malibu Is Mixed

Starr originally announced in February 1997 that he planned to leave the next summer to take the Pepperdine posts. But the decision touched off a wave of criticism, especially from conservatives who wanted Starr to remain on the job until he was finished. The prosecutor then reversed field, saying that he had made a mistake and would remain as independent counsel until the work was “substantially completed.”

Reaction from students in Malibu was mixed, with many students emphasizing the fame Starr would have brought to Pepperdine.

“I think he could really have contributed positively in enhancing the ranking of the school nationwide,” said Joe Farzam, 25, a first-year law student. “Definitely, we regret the fact that he’s not going to be the dean here. . . . The ranking of the school affects everyone’s career. If the school ranks high, we’ll get better jobs.”

“I think he’s in a no-win situation,” said Max Tawari, 31, a student from College Park, Md. “For him to effectively do his job, he’s going to have to go against public opinion.”

But Tawari said that, even if the public continues to regard Starr as politically motivated, he would have augmented the school’s reputation. “I think we could have done well with the exposure,” Tawari said.

Kenji Kato, 26, of Oxnard, said that his initial enthusiasm about Starr’s appointments at the school diminished over time. “I was excited because of the national recognition he would bring but . . . with every little twist and turn of his investigation it seemed less and less likely he would be here.”

Others, like Danna Mashhadian, a 24-year-old second-year law student from Palo Alto, expressed relief that Starr will not fill the post.

“I’m not proud of what he’s done and I don’t want my tuition paying his salary,” she said Thursday outside the law school’s cafeteria. “As he’s meddled more in Clinton’s affairs, my distaste for him has grown. I don’t want him representing us.”

Letter to Reno Suggests Conflict

Starr sent a letter to Atty. Gen. Janet Reno responding to a pointed Justice Department suggestion that he may have a conflict of interest in investigating allegations that David Hale, an important cooperating witness in the Whitewater case, had been paid by Clinton foes while he was aiding prosecutors.

Starr contended that his office “at most” may have the appearance of conflict of interest in the matter, presumably a reference to the central role Hale has played in Whitewater convictions Starr has obtained.

On the other hand, he said, the Justice Department may suffer from “multiple actual conflicts of interest” in investigating the matter.

These conflicts, he said, include laws barring the Justice Department from investigating matters under examination by an independent counsel. Also, he said, Hale’s information is damaging to the president, whose alleged wrongdoing must by law be investigated by an independent counsel.

Finally, Starr noted, Hale’s questionable contacts largely took place before Starr was appointed in August 1994 during a period when the Whitewater investigation was being conducted by a prosecutor appointed by Reno and not under the law providing for independent counsels. At the time, that law had temporarily lapsed.

Starr’s letter said that he was “deeply concerned” about the Justice Department’s conflicts, especially because he believes the department is taking positions that hinder his investigation. For example, the department is resisting the prosecutor’s demand that Secret Service agents testify in his investigation of whether the president engaged in sex acts with former White House intern Monica S. Lewinsky, then asked her to give false testimony about the matter.

Starr said that he had developed alternative means to investigate the Hale allegations, which he and Justice should try to agree upon. A source familiar with the matter said that Starr’s proposals include asking former Justice Department internal watchdog Michael E. Shaheen Jr. to conduct the inquiry. Shaheen, however, has not agreed to do the job.

Money Said Channeled Through Magazine

Hale allegedly received cash and other gratuities from individuals seeking to discredit Clinton while Hale was cooperating with Starr’s investigation.

Those who allegedly contributed include Scaife, who critics say channeled the money through the American Spectator magazine, which has been highly critical of Clinton.

Scaife had given the magazine $2.4 million through last fall, according to a preliminary audit by the magazine. About $1.8 million of that amount was earmarked for obtaining information about the activities of Clinton and First Lady Hillary Rodham Clinton during their years in Arkansas, according to the audit.

Terry H. Eastland, recently named publisher of the magazine, said his investigation had produced no evidence that any money or other benefits went to Hale.

At the courthouse meeting with reporters, Starr refused to say when he might submit a report of his investigation of Clinton to Congress, an act that possibly could lead to impeachment hearings. Congressional sources have said that they expect such a report by late May or early June.

“I’m not going to comment on the specifics of the report” or on its timing, Starr said. He acknowledged that there is “a duty on any independent counsel to report to the Congress under certain circumstances.”

The independent counsel law requires that evidence which may provide grounds for impeachment must be reported to Congress.

As two grand juries continued working inside the courthouse behind him, Starr said that “our level of activity has been extremely high . . . extraordinarily high.” One grand jury is investigating the Lewinsky matter and the other possible tax violations involving former Clinton administration figure Webster L. Hubbell.

On a related issue Thursday, the lawyer for Clinton’s Whitewater business partner Susan McDougal said that Starr’s office again has summoned her to testify before the Whitewater grand jury in Little Rock, Ark., next week.

McDougal, who spent 18 months in jail for refusing to answer Starr’s questions after her 1996 conviction, recently started serving a two-year term for fraud.

Her appearance next week could set up a further showdown if she refuses again to testify, sources said. While maintaining that she does not know of any illegal or improper financial conduct by the Clintons, McDougal has refused to cooperate on grounds that she does not trust Starr.

Court Refuses to Block Hale Trial

Also Thursday, a federal appeals court refused to block Hale’s trial on state charges. He is accused of lying to regulators about an insurance company the state says he owned.

The U.S. 8th Circuit Court of Appeals in St. Louis denied Hale’s request to overturn a lower court’s dismissal of his lawsuit seeking a federal shield against the charges.

Hale claimed that a plea agreement and immunity granted him by federal Whitewater prosecutors should protect him in a state case. Hale also argued that the state charge was political payback for his cooperation with Starr.

He is set for trial Wednesday in Pulaski County Circuit Court.

Times staff writers Kenneth Reich and Susan McAllister in Los Angeles and Jonathan Peterson in Santiago, Chile, contributed to this story.

* JONES TO PRESS CASE: Paula Corbin Jones said she will pursue her appeal. A16