Fiscal Probe Delays Holbrooke’s U.N. Posting

The appointment of highly regarded diplomat Richard C. Holbrooke as U.S. ambassador to the United Nations has been stalled by an investigation of his financial affairs, White House officials said Friday.

The investigation, underway since July, is being conducted by the Justice and State departments and is said to focus on Holbrooke’s actions after he resigned his last full-time government job, as assistant secretary of State for European and Canadian affairs, in 1996 and joined the investment banking arm of Credit Suisse First Boston in New York.

Holbrooke, as combative and controversial as he is respected, is widely known for putting together the Dayton, Ohio, peace accords that ended 3 1/2 years of ethnic conflict in Bosnia-Herzegovina. Although greeted with skepticism initially, the agreement has so far held and is considered one of the Clinton administration’s major foreign policy successes.

The delay in Holbrooke’s confirmation is one more piece of bad news for a president under siege.

The inquiry into the nominee’s finances, which was sparked by an anonymous letter to the State Department’s inspector general, is believed to be looking at allegations that Holbrooke furthered his business career by using U.S. Embassy contacts before the end of a mandatory one-year so-called cooling-off period. The rule requiring such a period for former government employees was instituted to prevent them from exploiting old contacts for private gain.

After returning to the private sector, Holbrooke served briefly as an unpaid special presidential envoy to Cyprus last year, and it is no secret that he met frequently with diplomats at U.S. embassies during that time.

Although Holbrooke was unavailable for comment Friday, Reuters news agency quoted an unnamed Holbrooke advisor who claimed that those meetings were limited strictly to government business.

White House officials said that because the investigation will probably not be completed for another month, it would be January before Holbrooke’s nomination could go to the Senate for confirmation, a development that would leave the United States without a U.N. ambassador until then.

Despite the delay, both President Clinton and Secretary of State Madeleine Albright said they will continue to back Holbrooke for the job.

“Ambassador Holbrooke has made clear that he is cooperating with the departments of State and Justice as they look into certain of his prior activities,” Albright said. “[He] has made extraordinary contributions to our nation’s foreign policy, and I look forward to a prompt resolution of this matter.”