Probe of Babbitt Turns Focus to Ickes

The independent counsel investigating Interior Secretary Bruce Babbitt secretly sought authority recently to look into dealings of former White House Deputy Chief of Staff Harold M. Ickes, government officials said Friday.

This is what led Atty. Gen. Janet Reno to delay her decision this week on whether to seek appointment of an outside prosecutor to determine if Ickes lied in Senate testimony about a labor dispute.

Until now, it was believed that Reno had decided to continue her review for up to 60 more days because of new information on Ickes’ actions in the lengthy strike of the Teamsters Union against Diamond Walnut Growers in Stockton.

But Justice Department sources said it appeared that Reno had been leaning against asking for an outside prosecutor and toward closing the Ickes review when the letter seeking “referral of a related matter” came from Carol E. Bruce, the independent counsel investigating allegations that Babbitt lied in Senate testimony about his department’s rejection of an Indian casino license.

The related matter, said to involve “a series of transactions” by Ickes and others, including government and non-government officials, could produce information relevant to Reno’s decision on whether to seek an outside prosecutor in the Ickes matter, the sources said.

The latest turn could be bad news for Ickes, who before Monday thought the Justice Department examination of his testimony before a Senate committee was coming to an end.

More important, Bruce’s effort to investigate “transactions” involving Ickes and others, whose identities could not be learned, could lead to an outside look at Democratic fund-raising matters, which Reno has repeatedly declined to recommend.

Disclosure of Bruce’s request seemed to touch a raw nerve in Robert S. Bennett, Ickes’ lawyer.

“Harold Ickes has been interviewed or testified about 26 times,” Bennett said. “All these matters have been thoroughly inquired into. It is a time to call an end to this. We don’t need another independent counsel searching for wrongdoing where none exists.

“All of these independent counsels identify their prey and then look for crimes,” he said. “Professional law enforcers do it the other way.”

News of the Ickes development came as Justice officials said that department attorneys have recommended to Reno that she not seek appointment of an independent counsel to review allegations that President Clinton and others violated campaign financing laws during the 1996 election.

The deadline on her 90-day preliminary inquiry on that matter is Monday.

Myron Marlin, Reno’s chief spokesman, declined to discuss the recommendations but said that Reno had made no decision.

Sources who declined to be identified said that the recommendations to Reno were not as divided as those she received in an investigation of Vice President Al Gore, in which she decided against an outside prosecutor.

On the Ickes matter, Cary Feldman, deputy independent counsel in Bruce’s office, would not confirm or deny Bruce’s letter to Reno.

“We don’t have any comment on what the attorney general is doing with the Diamond Walnut Growers’ preliminary investigation,” he said.

Bruce was named by a special court on March 19 to investigate whether Babbitt lied to the Senate about his role in rejecting an Indian casino in Wisconsin.

The judges said that independent counsel Bruce should determine whether Babbitt made false statements when he swore to senators last year that his 1996 decision to turn down a casino application by three Indian tribes had nothing to do with Democratic campaign contributions made by opponents of the gaming proposal.

The judges said that the independent counsel could venture beyond a simple perjury investigation to determine “whether any violation of federal criminal law occurred” in the department’s consideration of the tribes’ off-reservation casino request.

Ickes already figures in the allegations against Babbitt through the congressional testimony of Paul Eckstein, an old friend of Babbitt who was hired as a lobbyist by the Chippewa tribes that wanted to build the casino.

Eckstein said that Babbitt told him he had been pressed by Ickes to reject the casino and that Ickes had ordered a quick decision.

The information that Bruce wants referred to her is separate from the allegation that Babbitt lied about the casino issue but is sufficiently related that Bruce wants to handle the inquiry, a government source said.