The Justice Department announced Thursday it has opened a preliminary criminal investigation into Commerce Secretary Ron Brown’s business dealings and personal finances to determine whether an independent counsel should be appointed in the case.
The decision is the second step along a procedural path dictated by the independent-counsel law. It follows a 30-day initial review in which the Justice Department was required to determine whether accusations against Brown are clear-cut and come from a credible source.
The decision Thursday, finding that both conditions had been met, is a blow to Brown, who now will face a deeper review of his conduct by criminal prosecutors. But the action does not mean the government has reached any conclusions about whether he violated any law.
Fourteen Republican senators asked Attorney General Janet Reno last month to determine whether Brown had evaded taxes, avoided financial disclosure requirements or misled Congress in the course of his highly complicated business dealings with a Washington business executive, Nolanda Hill.
The federal court that oversees the independentcounsel process said Thursday that the preliminary investigation “concerns allegations that have been widely reported by the news media.”
Brown’s lawyer, Reid Weingarten, said his client has not broken any laws. “The independentcounsel law left Justice (Department) with no choice but to move to a preliminary investigation,” he said Thursday.
But federal law-enforcement officials who have followed the case said Brown’s dealings are so convoluted that the inquiry is bound to be prolonged and difficult as they wade through a welter of serious ethical questions.
Chief among them, they said, is the question of why Brown was paid about $400,000 for his stake in an apparently worthless company in which he had invested no money.
Officials said the issues they will be examining include whether Brown violated tax or financial disclosure laws and whether he was paid money by people seeking to influence the Commerce Department.
This is the second Justice Department investigation into Brown. He was cleared last year after a review of accusations that he had accepted bribes from the Vietnamese government to work for normalization of relations with the United States.
Michael McCurry, White House press secretary, said Thursday before the Justice Department’s announcement that the White House is watching Brown’s legal issues closely but that the commerce secretary has President Clinton’s full confidence.
McCurry’s deputy, Ginny Terzano, said Thursday evening that the White House position has not changed and that “the attorney general took an action today that was proper under the statute.”