10/03/97 - 02:06 AM ET - Click reload often for latest version

Justice probes DNC fund transfers

WASHINGTON - A Justice Department task force investigating campaign fund-raising is looking at whether the Democratic National Committee transferred millions of dollars to state Democratic parties last year, Attorney General Janet Reno said Thursday.

Such a transfer could be seen as an effort to bypass spending limits established in the federal campaign law.

Reno said she had "referred it some time ago" to the task force of FBI and Justice Department investigators.

The question of spending limits first was raised last October by the political watchdog group Common Cause. The group called for Reno to appoint an independent counsel to investigate whether both parties had broken the law by exceeding the $37 million campaign spending limit set for the presidential election.

Common Cause complained that both campaigns raised money for their national parties and then diverted millions of dollars to key state party offices for TV advertisements that ran under the guise of being state committee advertising.

Federal law requires such state party efforts to be generic party ads, not in support of specific candidates.

Although Reno would not confirm whether the investigation includes the Republican National Committee, her acknowledgement of the DNC portion of the probe is more evidence of how wide-ranging the investigation of campaign fund-raising during the 1996 election has become.

In addition to looking at whether the DNC transferred money to circumvent campaign spending limits, the task force is:

In the second week of a 90-day review of how former Energy secretary Hazel O'Leary may have improperly raised $25,000 for a favorite charity.

Entering the final day of a 30-day review of Vice President Gore's campaign fund-raising efforts. The task force has recommended that Reno take the next step toward appointing an independent counsel by extending the probe for another 90-days. She is expected to accept the recommendation today.

In the second week of a 30-day inquiry into whether President Clinton may have violated the law by soliciting campaign contributions over Oval Office telephones. The deadline for a decision by Reno on that review is Oct. 15.

Gore, who is being represented free of charge by former Watergate prosecutor James Neal, has acknowledged making dozens of fund-raising calls from his office. The vice president has maintained that he did not violate federal prohibitions against fund-raising in public buildings because the calls were charged to the Democratic Party.

By Gary Fields, USA TODAY

Copyright 1997 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.