Reno Won’t Name Independent Counsel Decision Means Congressional Hearings Into Democratic Party Fund Raising Are Likely

For the third time Friday, Attorney General Janet Reno rejected requests that she seek an independent counsel to investigate possible criminal wrongdoing in the way national Democratic Party officials allegedly sought and received campaign money from foreign contributors.

The decision sets the stage for congressional hearings likely to begin soon after the new, Republican-controlled Congress convenes in January.

Reno and her aides based their decision on two points. They said none of the alleged wrongdoers was of sufficiently high rank - the president, vice president and Cabinet members - to require invoking the Independent Counsel Act.

And they said “general assertions” that President Clinton or Vice President Al Gore sought the donations and that foreign contributors benefited by giving money to the Democratic National Committee “fall far short of the sort of specific facts and reasonable inferences” that Clinton or Gore “may have violated federal criminal law.”

Instead, a special task force within the public integrity section of the Justice Department’s Criminal Division will review allegations of questionable fundraising practices in the 1996 election, officials said. They will consider whether federal prosecutors should bring criminal charges and whether the matter ultimately should go to an independent counsel after all.

The Justice Department revealed its decision in a letter approved by Reno and written by Deputy Assistant Attorney General Mark M. Richard to Sen. John McCain, R-Ariz., and four House committee chairmen who had requested an independent counsel.

The department earlier had rejected two similar requests, one from McCain and the four House chairmen, and one from the citizens’ lobby Common Cause. The third rejection on Friday is by far the most sweeping.

“There is no specific, credible evidence at this time that any individual covered by the provisions of the Independent Counsel Act has committed any federal crime,” the letter said. “To the extent that there are allegations of wrongdoing that may warrant criminal investigation, at this time they relate only to lower-ranking public officials, DNC employees and contributors.”

Reno said career Justice Department prosecutors had demonstrated that they could conduct “thorough and fair investigations and prosecutions even of politically powerful members of the incumbent party. You have my commitment that they will do so in this case.”

Reno, who has been criticized by White House aides for being too ready to request appointment of independent counsels to investigate alleged Clinton administration wrongdoing, has made it known that she hopes to keep her job in Clinton’s second term. But Republicans steered clear of suggesting that Reno was trying to save her job.

“I can’t accuse her of that,” McCain said in an interview Friday. “She’s been good on so many of these issues.”

The foreign fund-raising affair is the first major controversy in which she has rebuffed appeals for an outsider to look into charges of official wrongdoing. Three independent counsels are investigating charges against Clinton himself in the Whitewater affair and against former Agriculture Secretary Mike Espy and departing Housing and Urban Development Secretary Henry Cisneros.

McCain said he was disappointed by Reno’s decision Friday. Senate Republican leaders will meet here next week, he said, to decide what shape congressional hearings will take into the matter. He said a special committee could be set up to air the allegations, or the task could be left to the Commerce Committee and the Governmental Affairs Committee.

Noting that the decision on how to proceed is up to Senate Majority Leader Trent Lott, R-Miss., McCain said: “If he wants me to do it, I’ll do it in a New York minute.”

He added that he would design the hearings not only to look into alleged Democratic abuses, but also to craft new legislation governing political fund raising.

At the White House, spokesman Mike McCurry indicated that Clinton administration officials would cooperate with the in-house Justice Department review as well as any congressional investigations.

With the Justice Department’s own task force now investigating the matter, sources said FBI agents probably would be dispatched to interview both donors and DNC officials.

Of particular concern are $450,000 in contributions from an Indonesian couple and $250,000 from a South Korean company, both of which the DNC returned into response to news stories.