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02/12/98- Updated 01:42 AM ET

Reno seeks special prosecutor for Babbitt

WASHINGTON - Attorney General Janet Reno asked Wednesday for an independent prosecutor to investigate whether Interior Secretary Bruce Babbitt misled Congress in connection with an Indian casino controversy.

If a special court complies with Reno's request, it would be the first such prosecutor to be named in connection with the wide-ranging inquiries in Congress over campaign fund raising and political influence during the 1996 election. Republicans say contributions to the Democrats may have played a role in Babbitt's casino decision.

Reno's request calls for the investigation to be limited to the relatively narrow issues of Babbitt's sworn testimony to a Senate committee last October and any possible violations of federal law in the decision on the casino.

Justice Department aides had said an outside counsel was needed to resolve inconsistencies in Babbitt's explanations to Congress about the 1995 casino decision, which has been the focus of congressional hearings as part of a broader inquiry into campaign financing.

Reno previously had rejected appeals by Republicans to name an outside prosecutor to examine the broader issues.

Three other independent counsel investigations are under way involving the Clinton administration: Kenneth Starr's concerning the president and separate investigations of allegations of misconduct by former Agriculture Secretary Mike Espy and former Housing Secretary Henry Cisneros.

There was no immediate comment by Babbitt.

Babbitt, who has said his career of 23 years in public service is on the line, has repeatedly and strongly denied any misconduct involving the casino decision - or in his explanations of it.

The inquiry involves a decision by the Interior Department in 1995 to reject a request by three Indian tribes in Hudson, Wis., and a dog track owner to open a casino on the site of a money-losing dog track.

Republicans have asserted that promises of campaign contributions to the Democratic Party by other Indian tribes opposed to the casino may have played a part in the decision. Those tribes contributed $286,000 to the Democratic National Committee in 1996.

Babbitt and other Interior Department employees have denied political influence played any role in denial of the casino, which had been opposed by the local community.

Justice Department investigators also have concluded the decision was not influenced by promises of campaign contributions, but they have not been able to resolve whether Babbitt was fully truthful in sworn testimony to Congress in his explanation of the decision-making.

At the core of the investigation is a July 1995 meeting Babbitt had with Paul Eckstein, a longtime friend who at the time represented pro-casino interests.

Eckstein last fall testified at congressional hearings that Babbitt told him that Harold Ickes, then White House deputy chief of staff, had wanted the casino decision expedited. Eckstein also contended Babbitt made reference to campaign contributions by tribes opposed to the casino.

When Babbitt was questioned by Sen. John McCain, R-Ariz., in 1996, he disputed Eckstein's assertion. He also said he had never discussed the matter with Ickes.

But last October, Babbitt wrote Sen. Fred Thompson, R-Tenn., and later testified before Thompson's investigative committee that he, indeed, had told Eckstein that Ickes wanted a decision on the casino issue. He said he had done so "simply as a way to terminate the discussion" with the lobbyist and that, in fact, he never talked to Ickes.

At recent House hearings, Babbitt insisted that he had told the truth to Congress in each instance.

"Both letters state that I never discussed the (casino) matter with Harold Ickes. In the McCain letter, I disputed Mr. Eckstein's version of our conversation. In the Thompson letter I provided my own recollection of that conversation," said Babbitt.

"I never spoke to Mr. Ickes about the Hudson matter and I shouldn't have given Mr. Eckstein any reason to suppose that I had," Babbitt said. "I regret the remarks. It was a mistake, but that's all that it was."

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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