$2-Million Settlement Pitch From Jones’ Side Is Weighed

With both sides rushing to find a favorable resolution before Tuesday’s appellate court arguments, Paula Corbin Jones was pinning her hopes Saturday on a new $2-million proposal for settling her sexual harassment lawsuit against President Clinton.

That amount is double the sum Jones and her lawyers demanded a few weeks ago to drop their case. Under the new plan, which has not yet drawn a response from the president’s lawyers, a New York real estate tycoon would put up $1 million and Clinton or his financial backers would fund a like amount.

While a $2-million package is more likely than earlier offers and counteroffers to satisfy Jones and two sets of her lawyers, there was no indication it would be acceptable to Clinton.

One source close to Clinton said it seemed to be “an act of desperation” on the part of Jones’ lawyers, who so far have been unable to agree on how to divide any settlement.

Competing claims to legal fees by two sets of Jones’ lawyers have complicated efforts to settle the 4-year-old case. Their demands are so huge that a tentative $700,000 settlement offer from Clinton’s lawyers--the only one on the table--would leave nothing for Jones herself.

Manhattan developer Abe Hirschfeld deposited $1 million in a special bank account last week toward settling the case. But the eccentric Democratic activist, who has no connection to the case, has said he won’t hand over the money if Jones’ lawyers are going to seize a large portion of it.

The $2-million formula was devised by Pasadena attorney Bill McMillan, the husband of Jones’ friend and sometime representative, Susan Carpenter-McMillan. Jones and her husband, Steve, live in Long Beach. The McMillans did not respond to requests for comment.

Jones’ current Dallas-based lawyers, who are working on a 40% contingency basis, have amassed $1.5 million in unpaid bills even though the conservative Rutherford Institute of Charlottesville, Va., has already paid $400,000 of their expenses.

Jones’ original lawyers, Joseph Cammarata and Gilbert K. Davis, have filed court papers demanding $800,000 from any settlement as compensation for their three years of work.

Jones fired Cammarata and Davis last year for advocating a $700,000 settlement combined with an apology from Clinton. She wanted more money and a more specific apology from the president, who has denied Jones’ central allegations.

In her 1994 lawsuit, Jones said that in May 1991, the then-Arkansas governor summoned her to his conference hotel room, dropped his trousers and asked her for oral sex.

The new settlement plan seeks to guarantee sufficient funds for Jones by allocating to her most, if not all, of Hirschfeld’s $1-million contribution. A similar amount put up by Clinton’s side would go to Jones’ current and former lawyers, assuming they could agree on its division.

It was unclear Saturday if the two sets of lawyers could agree on division of any payment or if Clinton could raise $1 million for his part.

In addition, an attorney sympathetic to Clinton said Hirschfeld’s $1 million could have adverse consequences for the president.

“It might be seen as a gift for which the president would have to pay taxes,” said the lawyer, who asked that his name not be used.

Clinton’s lawyers have said that while Jones has abandoned her insistence on an apology, a million-dollar settlement could be seen as a tacit admission of wrongdoing. On the other hand, settling the Jones case could strengthen Clinton’s hand in impeachment proceedings.

Although Jones’ case was dismissed in April by a federal judge, both sides are scheduled to present arguments Tuesday to the U.S. 8th Circuit Court of Appeals in St. Paul, Minn., which is considering whether to reinstate the case on grounds that Clinton gave misleading or perjurious testimony about his relationship with Monica S. Lewinsky.