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02/09/98- Updated 10:37 PM ET

Aides urge Reno to expand Babbitt probe

WASHINGTON - Top aides are advising Attorney General Janet Reno to seek an independent counsel to investigate Interior Secretary Bruce Babbitt, officials said Monday.

If Reno agrees, it would be the first independent counsel she has sought in any matter arising from an investigation of campaign fund raising before the 1996 elections.

She has rejected numerous appeals by Republicans for a counsel to probe other campaign finance matters that remain under investigation by a department task force. Reno, who must decide on Babbitt by Wednesday, has followed her top aides' advice so far.

The task force was unable to resolve allegations that Babbitt perjured himself in Senate testimony, according to Justice officials, who requested anonymity. Babbitt's sworn Senate testimony was directly contradicted by a lawyer, who had been a partner and close friend of his.

Babbitt has denied any impropriety.

The department's preliminary inquiry found no evidence that Babbitt or other Interior officials rejected a license for an Indian casino in return for campaign contributions from other tribes that opposed it, these officials said.

Nevertheless, Reno was urged to allow the independent counsel to review the casino matter to the extent necessary to fully investigate the perjury allegation, officials said.

The independent counsel law requires Justice to turn over to an independent counsel not only unresolved credible allegations but also any jurisdiction necessary to fully investigate those allegations.

The aides rejected the idea of forwarding to the counsel major portions of their campaign finance investigation, merely because some witnesses, including White House aides, are involved in both the Babbitt and other campaign finance matters. FBI Director Louis Freeh, among others in the department, had urged in December that the whole campaign finance investigation be sent to an independent counsel to avoid an appearance of a conflict of interest.

The recommendation to have an outside counsel, named by a special court, investigate the perjury allegation against Babbitt has been anticipated since last fall, and Reno, who meets weekly with the task force, undoubtedly was aware of members' thinking long before any document reached her desk.

In July 1995, Interior denied three Wisconsin Chippewa tribes a casino license that had been recommended by the Bureau of Indian Affairs. Republicans accused the Clinton administration of engineering the turnaround because tribes opposing the casino donated $300,000 to the Democratic National Committee and other Democrats.

In December, Reno concluded there was no credible evidence Clinton himself acted improperly in the casino matter.

In the casino case, Paul Eckstein, an old Babbitt friend and a lobbyist for the Chippewas, testified Babbitt told him that then-deputy White House chief of staff Harold Ickes had contacted him, pressing for a quick decision.

Babbitt at first denied being contacted directly by Ickes and said later he had made up the Ickes story to get Eckstein out of his office.

One Justice official said the task force was unable to find evidence undermining the credibility of either man. But the independent counsel law bars them during this preliminary investigation from calling witnesses before a grand jury, subpoenaing documents or granting immunity to witnesses.

Such investigative tools are reserved for independent counsels in cases involving high-level executive branch officials.

By The Associated Press

Copyright 1998 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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