Babbitt Is Cleared in Casino Probe

Interior Secretary Bruce Babbitt was cleared by an independent counsel Wednesday of allegations that he lied to a Senate committee about his role in rejecting an Indian casino in Wisconsin four years ago.

Babbitt’s clearance of any criminal wrongdoing after an 18-month investigation makes him the third Clinton Cabinet officer to suffer few or no criminal consequences from an outside counsel’s review.

Last December, former Agriculture Secretary Mike Espy was acquitted by a jury of charges that he had received $35,000 in illegal gifts from companies regulated by his department.

Former Housing Secretary Henry G. Cisneros resolved 18 felony charges on the eve of his trial last month by pleading guilty to a single misdemeanor count of lying to the FBI.

In Babbitt’s case, independent counsel Carol E. Bruce said in a brief statement that she was “declining prosecution and will not seek an indictment of Secretary Babbitt or anyone else.”

Bruce did not spell out why her examination of 450 witnesses and 630,000 records did not find sufficient evidence for prosecution, saving the details of the investigation for the formal report she must submit to a special court panel in coming weeks.

Babbitt, who has denied all wrongdoing, said he was “gratified that the grand jury and independent counsel have determined . . . that no charges are justified in this matter.”

President Clinton said he was “very pleased” by the outcome, calling Babbitt, a former governor of Arizona, “a man of the highest integrity” who has a record of “superb stewardship of our nation’s lands.”

Although Congress, unhappy with the length and conduct of most outside investigations, allowed the independent counsel law to expire in June, it permitted ongoing inquiries to continue. Bruce’s investigation was one of the shortest in recent years.

In the broadest investigation of its kind, Whitewater independent counsel Kenneth W. Starr is on the verge of resigning as his office prepares to wrap up his five-year investigation of the Clintons with a lengthy report to the federal court here.

An outside counsel was appointed last year to look into allegations against another Clinton Cabinet official. The inquiry by independent counsel Ralph I. Lancaster, which seeks to determine whether Labor Secretary Alexis M. Herman illegally accepted pay to help business interests while serving in an earlier post at the White House, is still in progress.

Another independent counsel, Daniel Pearson, resigned in 1996 after the target of his inquiry, Commerce Secretary Ronald H. Brown, was killed in a plane crash in Bosnia.

Bruce was appointed by a three-judge panel early last year to determine whether Babbitt made false statements when he appeared before a Senate committee in October 1997.

At that time, Babbitt swore that his decision to turn down a casino application in 1995 by three Chippewa tribes had nothing to do with Democratic campaign contributions promised by opponents of the gaming proposal.

The Interior Department, which includes the Bureau of Indian Affairs, has jurisdiction over many Native American gaming issues.

Babbitt said that the casino decision followed departmental guidelines, and he noted that the proposed casino at Hudson, Wis., was opposed by the community.

At the core of the probe were differing accounts of a July 1995 meeting in the secretary’s office between Babbitt and an old friend, Paul Eckstein, who represented interests favoring the casino.

Eckstein testified that Babbitt told him at the meeting that Harold M. Ickes, who was then White House deputy chief of staff, had wanted Babbitt to expedite his casino decision. Eckstein said that Babbitt made reference to Democratic campaign contributions from tribes opposed to the casino.

When Babbitt was asked about this by Sen. John McCain (R-Ariz.), he disputed Eckstein’s testimony and insisted that he never had discussed the matter with Ickes.

Months later, however, Babbitt wrote Sen. Fred Thompson (R-Tenn.)--and later testified before Thompson’s Governmental Affairs Committee--that indeed he had told Eckstein that Ickes wanted a decision on the casino case.

He said he did so “simply as a way to terminate the discussion” and that he had never spoken with Ickes, who has backed Babbitt’s account.

Thompson said he found unconvincing Babbitt’s denial that he had been pressured by the White House to turn down the casino license because “various facts uncovered by this committee call . . . that assertion into question.”

Tribes opposing the casino had contributed more than $350,000 to Democratic Party committees during the 1996 campaign after the casino license was rejected. They had argued that a new casino would cut into their own gambling profits.

At House hearings last year, when the casino matter came up again, Babbitt insisted that he had given truthful testimony to the Senate in both instances.

“Both letters state that I never discussed the matter with Harold Ickes,” he said. “In the McCain letter, I disputed Mr. Eckstein’s version of our conversation. In the Thompson letter, I provided my own recollection of that conversation.

“I never spoke to Mr. Ickes about the Hudson [casino] matter, and I shouldn’t have given Mr. Eckstein any reason to suppose that I had.”

He added: “I regret the remarks. It was a mistake. But that’s all that it was.”

Pledging from the start to cooperate with Bruce’s investigation, Babbitt testified voluntarily before a federal grand jury for two days this summer.

Bruce said in her statement that she could find no evidence “of a criminal quid pro quo” and that perjury allegations against Babbitt could not be proved.