Judges Allow Starr to Continue Inquiry

A federal court panel Wednesday authorized independent counsel Kenneth W. Starr to continue his long Whitewater investigation, even as Starr appeared eager to turn the matter over to someone else.

The panel voted, 2 to 1, for Starr to remain in office over the strong objections of a senior appellate judge who said that Starr’s inquiry has run long enough and cost too much.

“An endless investigation . . . can serve no possible goal of justice and imposes needless burdens on the taxpayers,” Judge Richard D. Cudahy, a Democratic appointee, wrote in his dissenting opinion.

Noting that President Clinton had been impeached by the House but acquitted after a Senate trial and that no prosecutions are pending against others, Cudahy said: “This is a natural and logical point for termination.”

But the other panel members--Presiding Judge David Sentelle and Judge Peter T. Fay, who are both Republican appointees--said that Starr’s five-year inquiry had been “unusually productive.” They cited 24 indictments, 16 convictions and the impeachment of Clinton.

Starr Had Not Sought Ruling

Starr’s office declined comment on the ruling, which he had not sought.

Sources at the Justice Department, which has clashed with Starr over ethics issues in his investigation, said that the department had not sought the review by the appellate court either, and had not filed any briefs with the court in advance of its ruling.

The department declined comment on the ruling.

The ruling was due to a provision in the independent counsel statute authorizing the three-judge panel that appoints special counsels to terminate them after their first two years, their second two-year period, or thereafter upon annual reviews of their work.

Starr, who reached his fifth year in office on Aug. 5, has spread word that he may want to depart soon to return to private practice or take a post at a law school. He may seek to have one of his deputies named to replace him for the last stage of the investigation, including the writing of a final report, some legal sources believe.

But some officials at the Justice Department said that such a move could pose legal problems. It is unclear, they said, whether a new independent counsel could be named, since the law creating the office was allowed to die in June.

Starr’s investigation has cost more than $40 million and has subjected him to harsh criticism from Clinton supporters who have said that his efforts have been spurred on by right-wing ideologues.

Earlier this month, Starr said at a meeting of the American Bar Assn. in Atlanta that he was moving as quickly as possible to conclude his investigation of both the president and First Lady Hillary Rodham Clinton, whose work as an Arkansas lawyer during the 1980s figured in Whitewater real estate transactions.

Starr said that he would complete his duties before the first lady’s possible run for the Senate next year. But he left unanswered questions about whether he might seek to indict the president either before or after Clinton leaves the White House in January 2001.

Hubbell Was Prime Conviction

The highest-ranking person convicted because of Starr’s investigation was Webster L. Hubbell, a longtime Clinton friend who was the Justice Department’s No. 3 official. After resigning from the department in 1994, Hubbell pleaded guilty to defrauding his former clients and partners at the Little Rock, Ark., law firm where he and Mrs. Clinton were partners.

Earlier this summer, Hubbell entered a plea bargain with Starr to dispose of further charges by pleading guilty to covering up legal work that he and Mrs. Clinton did on a bogus land deal in Arkansas.

At the same time, Starr has lost several cases, including a criminal contempt case against Susan McDougal, one of the Clintons’ partners in the Whitewater land deal, for her refusal to answer questions about her past business dealings with the president. He failed to convict two Arkansas bankers on fraud charges in connection with Clinton’s past political campaigns, and he was unable to win a perjury conviction against Julie Hiatt Steele for her insistence that a key witness for Starr, Kathleen Willey, had lied about sexual advances from Clinton.

Although the independent counsel statute expired June 30 and Congress was unwilling to extend it, legal experts said that Starr has the authority to complete his work and a judicial panel has the right to review it.

At the same time, Starr has the right to “hand off” some matters to the Justice Department for further investigation, authorities said.

But Justice Department officials have advised Starr’s staff that the department would be unable to investigate any matter relating to the Clintons because of the appearance of a conflict of interest. Such a development would require Atty. Gen. Janet Reno to appoint an outside counsel, officials said.

In authorizing Starr to continue in office, Sentelle and Fay wrote in their majority opinion that the panel “has inquired of the independent counsel and received his assurance that his work is ongoing.”

Although Starr has been criticized for the length of his inquiry, Sentelle and Fay said he has spent “a good deal less time than that occupied” by the Iran-Contra investigation during the Ronald Reagan and George Bush administrations, which lasted seven years.

Judge Cudahy, in his dissent, said that he sought to have his colleagues ask Starr “about further investigative activity that he could usefully undertake and which could not now properly be turned over to the Department of Justice.”

But Cudahy said: “My efforts along these lines have been rebuffed.” He urged Starr’s termination, aside from writing a final report, because “it is not clear how additional measures against the principal subject of the investigation could be pursued, [and] I must conclude that there is nothing further to be done.”