Freeh looks for compromise to end dispute

WASHINGTON - FBI Director Louis Freeh told lawmakers Wednesday he'd like to avert a dispute with Congress over a memo he wrote urging appointment of a fund-raising independent counsel. The Justice Department has refused to turn over the subpoenaed memo.

Freeh told the House Government Reform and Oversight Committee that Attorney General Janet Reno had asked him to relay word "that her lawyers would be pleased" to discuss the issue with the panel's chief counsel, Richard Bennett.

"I think for the good of the process and because I wrote the memo, it's much more preferable for us to work that out," Freeh said of the dispute over the document, which the panel has subpoenaed from the Justice Department.

Reno, who went against Freeh's recommendation that she seek an independent counsel to investigate fund-raising calls by President Clinton and Vice President Al Gore, testily defended her decision at hearings Tuesday.

Rep. John Mica, R-Fla., who Wednesday repeated his threat to seek contempt citations against Reno and Freeh for disobeying the subpoena, told Freeh, "I was glad to hear your statement this morning" signaling a willingness to work out the dispute.

Freeh did not give details of how the Justice Department might seek to resolve the issue. But the FBI director said the agency hoped to avoid circumstances that "impact adversely on what you expect to get from us" while allowing the Justice Department "to protect some critical parts of an ongoing case."

Rep. Dan Burton, R-Ind., the panel's chairman, said a contempt citation was moot at because of "the negotiations that will be taking place."

He declined to give details saying "members of the committee will be informed before we contemplate taking any action."

Despite their disagreements over an independent counsel, Reno and Freeh agreed that the FBI director's memo explaining his recommendation should remain under wraps as they pursue investigative leads in high places.

Freeh said his agents had never been turned down in requesting to interview top Clinton administration officials, but he complained there have been many delays in getting documents from the White House. "I'm not confident we have all the documents yet," he said.

Information in Freeh's memo could be helpful to potential targets, said the attorney general and the FBI director.

The committee is focusing attention on the Justice Department in another probe as well, that of a former Agriculture Department chief of staff who was convicted in a case brought by independent counsel Donald Smaltz.

Smaltz - who will testify after Freeh completes his appearance - complained that the Justice Department decided not to prosecute Ronald Blackley, who was staff chief for former Agriculture Secretary Mike Espy. Smaltz also said the Justice Department opposed Smaltz' court application to prosecute Blackley, who was convicted of three counts of lying to hide $22,000 he received from agribusinesses in Mississippi that got $400,000 in federal subsidies.

"There was never any effort to obstruct his investigation. And I regret that he even has concerns that there were," Reno told the panel. Besides, she added, Smaltz's subsequent prosecution of Blackley was on different charges than those that the Justice Department declined to pursue, she said.

Regarding the fund-raising probe, Burton tried to get Freeh to say that he based his recommendation on the belief that Reno had a conflict of interest in investigating top administration officials.

Instead, Freeh repeated several times: "There were several bases for my decision."

He tried to assure skeptical Republicans that "no area of this investigation is closed," including telephone fund raising by Clinton and Gore. He said those calls, like many other transactions, continue to be looked at under laws other than the 114-year-old statute that Reno concluded they did not violate. That statute prohibits soliciting contributions in federal offices.

"The FBI is not being impeded in any way in conducting this investigation," Freeh said.

Freeh acknowledged that some of his agents had expressed frustration over the pace of interviews in the case, but he said, "That's a regular part of any complex investigation." He said those disputes between agents and prosecutors had been "resolved without the investigation being harmed or impeded."

Burton castigated Reno's investigation and concluded, "This has all the appearances of an attorney general protecting the president."

When he suggested she was hiding behind legal technicalities, Reno bristled, "I'm not hiding. ... I'm trying to do my duty."

By The Associated Press

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