09/04/97 - 01:11 AM ET - Click reload often for latest version

Reno's decision could greatly affect Gore

WASHINGTON - After months of fighting off demands for a special prosecutor in the campaign fund-raising scandal, Attorney General Janet Reno on Wednesday took what might be the first step down that road. And when the dust finally settles, Vice President Gore might become the target of such an inquiry.

The Justice Department, in a brief statement that carried possibly potent legal and political ramifications, announced that Reno has decided to initiate a review of allegations that Gore violated federal law by soliciting campaign contributions from the White House.

Republicans reacted with confidence that a special prosecutor was inevitable. Sen. Arlen Specter, R-Pa., who has pressed for appointment of a special prosecutor, said: "It's pretty certain where it's going. I don't think the Justice Department would start this without knowing where it's headed."

Reno's decision also seems likely to revive interest in a Senate committee's investigation of campaign fund-raising. Hearings are set to resume Thursday.

The review will be conducted by investigators under the 1978 Ethics in Government Act. That law provides for appointment of a special prosecutor, formally known as an independent counsel, in matters involving serious allegations against high executive branch officials.

This does not mean for certain that Reno will seek a special prosecutor. However, if the attorney general concludes there are grounds for further investigation or prosecution, she will be required to request a special prosecutor from a three-judge panel in Washington, D.C.

Beyond the legal questions, the political ramifications for Gore are sobering. No vice president has ever been singled out as target for a special prosecutor's inquiry. That development would likely sap Gore's time and damage his expected run for the Democratic presidential nomination in 2000.

Ironically, the news broke as Gore was on another fund-raising quest, helping Virginia Democrats raise $500,000. He attended a $10,000-a-ticket dinner at the suburban Washington home of Sen. Charles Robb, D-Va. It benefited the gubernatorial campaign of Virginia Lt. Gov. Don Beyer.

The Justice Department declined to say what prompted Reno to direct her campaign task force to begin the review. However, it appears the distinction in federal election regulations between "hard" and "soft" money is at the heart of her decision.

Federal candidates are restricted in how much they can raise in hard money - funds solicited from individuals and political action committees for specific federal election campaigns.

In the case of soft money, however, political parties can raise vast sums of money for party building and other general campaign activities. There are no restrictions on the amounts of soft money that can be raised, and the Democrats and Republicans raised a total of more than $260 million in soft money in the 1995-1996 election cycle.

Indeed, the Democratic Party's use of the White House to raise soft money has been a central focus of the fund-raising scandal.

Federal law prohibits soliciting campaign funds on federal property. However, while holding off demands for a special prosecutor from Republicans and election law reformers, Reno has maintained that soft money is not regulated by the Federal Election Campaign Act. Over the years, the Justice Department has concluded that the law does not apply to soft money donations.

In telephone calls from his office, Gore solicited funds from at least 46 donors in 1995 and 1996. According to the White House, the funds were solicited for the soft money account at the Democratic National Committee (DNC). But The Washington Post reported Wednesday that more than $120,000, from eight donors, was deposited in a hard money account subject to federal campaign limits.

Both the White House and the DNC said Gore did not ask for any hard money contributions and was not aware that any of the funds he solicited had ended up in the hard money account. The DNC said it had shifted the funds into its hard money account without informing the vice president or the donors.

In announcing the review, the Justice Department said it was considering "whether allegations that the vice president illegally solicited campaign contributions on federal property should warrant a preliminary investigation under the independent counsel act."

Bert Brandenburg, the Justice Department's top spokesman, said that it was far from certain that the review would lead to the naming of a special prosecutor. He said that the law governing special prosecutor appointments gives Reno 30 days to review whether the allegations against Gore are "specific" and from "a credible" source. Then, he said, the Justice Department has up to 150 additional days to decide whether a special prosecutor should be sought.

When special prosecutors have been named, their investigations typically have lasted for years - meaning this one would almost certainly be continuing as the 2000 presidential race moves into high gear.

"It's very damaging," says Larry Sabato, a University of Virginia political scientist who has studied the impact of scandals. If there is an independent counsel appointed, he says, "the counsel's report and decisions may come to a head in the year 2000. The timing potentially could not be worse for Gore."

By Edward T. Pound and Susan Page, USA TODAY

Contributing: Tom Squitieri and Judi Hasson