Clinton Reaffirms Support for Holbrooke

The Clinton administration on Thursday stood firmly behind career diplomat Richard C. Holbrooke and his stalled nomination as ambassador to the United Nations, despite new charges that he violated federal conflict-of-interest laws in his private business dealings.

President Clinton, calling Holbrooke “a man of tremendous intellect and character,” affirmed he “is standing behind Ambassador Holbrooke lock, stock and barrel,” said National Security Council spokesman David Leavy.

Secretary of State Madeleine Albright, meanwhile, said she is “looking forward to having Ambassador Holbrooke there . . . carrying out [the] fight” over U.N. finances and related issues.

The strong words of support came amid the disclosure that officials in the Justice Department’s public integrity section are negotiating with Holbrooke to have him pay a civil penalty for allegedly breaching conflict-of-interest laws after leaving the State Department in 1996.

During a so-called cooling-off period of one year, former government employees are banned from lobbying or having certain types of contacts with government officials to prevent them from exploiting their old contacts for private gain. Holbrooke, the Justice Department alleges, had improper contacts with U.S. Embassy personnel in South Korea after he left government service to join a New York investment banking firm.

“We are in the process of settlement negotiations, and things are not far apart,” a Justice Department official said.

The Justice Department is seeking a settlement of at least $5,000 from Holbrooke, according to a friend of the nominee who asked not to be identified. Dismissing the relatively small amount of the proposed penalty, the friend said: “It’s jaywalking. He just wants this to go forward. If he doesn’t settle this, the nomination doesn’t go forward.”

The allegations center on a business trip that Holbrooke made to Seoul, South Korea, in early 1996, paid for by his then-new employer, Credit Suisse First Boston, where he is vice chairman. He gave a speech, engaged in other business for First Boston and also asked U.S. Ambassador James Laney to arrange a visit with then-South Korean President Kim Young Sam.

The meeting never took place, the friend said, but the sequence of events nonetheless prompted the current accusations from the Justice Department of a conflict of interest because Holbrooke had left the State Department only a month earlier.

“It’s ridiculous,” Holbrooke’s friend said. A diplomat of Holbrooke’s standing “doesn’t go to a country without telling the ambassador you’re coming. It would be offensive.” The proposed meeting with the president was intended only as a courtesy visit, he added. Holbrooke “would never discuss business,” he said.

While at the State Department, Holbrooke was the point man for Clinton in the Balkans and was hailed as the broker of the 1995 Dayton, Ohio, peace accords in the Bosnia-Herzegovina conflict. Even after he left the State Department, he remained active in government as a diplomatic trouble-shooter in hot spots such as Cyprus and Kosovo.

Clinton nominated him for the prestigious U.N. post in June. The nomination was expected to gain relatively easy confirmation, but an anonymous letter to the State Department regarding Holbrooke’s business contacts prompted the investigation. That forced the White House to delay sending the nomination to the Senate for formal consideration while investigators probed Holbrooke’s financial dealings.

Officials at the Senate Foreign Relations Committee said they could not comment Thursday on how Holbrooke’s negotiations with the Justice Department might affect his nomination.

The White House said recent events in Iraq and Kosovo underscore the importance of putting Holbrooke in place at the United Nations as quickly as possible. In the meantime, diplomat A. Peter Burleigh has been filling the post on an interim basis.