Cisneros Accused Of Lying To Fbi Reno Calls For Independent Investigation Of Hud Secretary

Attorney General Janet Reno has concluded that Housing Secretary Henry Cisneros misled federal agents about payments he made to a former mistress and has asked a judicial panel to appoint an independent counsel to investigate the matter, according to court papers unsealed Tuesday.

In effect, Reno said that Cisneros lied to investigators before his appointment in 1993, significantly understating how much money he had given to Linda Medlar, his former mistress.

While Cisneros earlier had acknowledged making such payments, he told FBI agents that he never had paid her more than $10,000 a year when, in fact, Reno said he paid her between $42,000 and $60,000 a year.

Cisneros, who has denied any wrongdoing, said Tuesday that he would remain in office while he fights the charges against him. “I am disappointed by the decision,” he said at a news conference at the Department of Housing and Urban Development headquarters.

“But I am hopeful that the investigation will be completed expeditiously, and I am confident the independent counsel will conclude that I did not engage in any criminal wrongdoing.”

Depending on Cisneros’ intent, his statements could be considered a felony, making false statement to a federal agent, which could be punished by a fine or imprisonment.

Reno filed her application for an independent prosecutor Monday to a special three-judge panel of federal appeals court judges. Under the independent counsel law, the panel must now select a prosecutor from outside the government to investigate Cisneros.

The inquiry is very likely to be expensive, embarrassing and fraught with the risk that he might be charged with a crime.

More broadly, Reno’s action means the Clinton administration faces the increasing political vulnerability from three separate independent prosecutors digging into top administration officials.

One prosecutor, Kenneth W. Starr, is examining Clinton’s activities in Arkansas and a second, Donald C. Smaltz, is reviewing former Agriculture Secretary Mike Espy’s relationships with large agricultural interests like Tyson Foods.

Reno has yet to decide whether a fourth independent prosecutor is needed. That one would investigate the tangled personal finances of another Clinton Cabinet member, Commerce Secretary Ronald Brown. She has told the judicial panel that she has opened a preliminary inquiry into Brown’s business activities, and has two months under the law to decide whether an outside prosecutor is needed in that case.

In her application to the panel Monday, the attorney general said that Cisneros told agents each of his payments had been under $2,500, shortly after he had made a payment that was considerably more.

In the harshly worded request, Reno said that by misstating the facts to the FBI, Cisneros had also potentially misled two other inquiries that relied on the bureau’s findings: the Clinton transition team’s review of his qualifications and a Senate investigation conducted in preparation for his confirmation hearings.

President Clinton issued a state ment supporting Cisneros. “He says he regrets any mistakes he has made,” Clinton said, “So do I. But that does not outweigh the excellent work he has been doing and will do as secretary of housing and urban development.”

At a briefing, White House spokesman Michael McCurry said Clinton had spoken with Cisneros by telephone earlier in the day.

“The secretary, during the course of that conversation, said, ‘I don’t want to do anything that would hurt you,’ and clearly said he would be willing to exercise his options,” McCurry said, suggesting Cisneros had been prepared to resign. “The president said that would not be necessary and that they should stick together.”