09/16/97 - 07:54 PM ET - Click reload often for latest version

House hearings postponed; shakeup in Justice probe

WASHINGTON - In a day of upheaval in the campaign fund-raising investigations, Attorney General Janet Reno named a new lead prosecutor Tuesday while the House was forced to postpone its first hearings over witness demands for immunity.

The Senate's separate hearings pushed ahead with a former Bush administration official testifying that Democratic fund-raiser John Huang had made a pitch for campaign donations within earshot of President Clinton at the White House.

Another witnesses said she didn't recall hearing Huang solicit donations at that June 18, 1996, coffee in the White House Map Room.

With pressure mounting at the Justice Department to turn over its work to an independent counsel, Reno announced she was bringing in a new lead prosecutor for the department's investigation. He is Charles La Bella, the top assistant U.S. attorney in San Diego and a specialist in white collar crime.

Reno must decide by the first week in October whether to open a full-scale investigation into whether an independent counsel should be appointed to review Vice President Al Gore's fund-raising calls from the White House.

La Bella will replace Justice Department lawyer Laura Ingersoll as the lead prosecutor for the fund-raising task force.

One Justice official, speaking on condition of anonymity, said Reno made the move after being upset that she had to read about key facts concerning the Gore fund-raising calls in the newspapers. That official said Reno also was not pleased about the pace of the probe.

Asked whether Reno's move amounted to a shakeup, Ingersoll said: "I think you are on the right track."

"I think it's a better way, it's another way to do what was already being done well," Ingersoll said, saying the move would add resources for the probe.

Reno said her department and the FBI also would be assigning additional prosecutors, investigators and analysts to the task force.

In addition to La Bella, Reno named James V. DeSarno Jr., deputy assistant director of operations for the FBI Criminal Justice Information Services Division, to be the special agent in charge of the task force.

Separately, the abrupt turn of events in the House threw the plans of the investigative panel's chairman, Rep. Dan Burton, R-Ind., into disarray and also gave Democrats new ammunition to attack Burton's investigation and the way witnesses are being treated.

Democrats noted that the three prospective witnesses, including the sister of Democratic fund-raiser Yah Lin "Charlie" Trie, were interviewed by Burton's investigators without lawyers present.

And the lawyer for Trie's sister, Manlin Foung, and her friend, Joseph Landon, charged that Burton's investigators told them "they did not need lawyers."

"To that extent, I am very concerned," said the attorney, Charles J. Stevens.

The witnesses' immunity requests came after Burton's announcement last week that they would be called to testify on Thursday, Richard Bennett, the panel's chief counsel, said.

The panel issued a terse statement announcing postponement of Wednesday's hearing and adding that Burton and Henry Waxman of California, the panel's ranking Democrat were "engaging in constructive discussions on granting immunity to witnesses."

But Waxman said, "I don't see any great rush to have these people testify."

Burton supports granting the three immunity because the Justice Department would not under its guidelines to prosecute them anyway for being "conduits" for a campaign donation, Bennett said.

A two-thirds vote of the committee is required to grant immunity. With one Republican absent, Burton needs to pick up the votes of seven of the Democrats, who have angrily accused him of running a partisan investigation.

Committee spokesman Will Dwyer II defended the investigators' pre-hearing dealings with the witnesses, saying "I am assured by the chief counsel that they have done the normal, consistent and regular kind of questioning of witnesses."

But Waxman said, "It appears they should have been more cognizant of the fact that people have constitutional rights and one of them is not to have to come before Congress and testify and incriminate themselves."

In Senate hearings, meanwhile, former Republican White House aide Karl Jackson said he overheard Huang make a pitch for donations to the Democratic National Committee in a coffee attended by 14 people, including Clinton and two Thai businessmen.

Jackson, president of the U.S.-Thai Business Council and a former national security adviser to Vice President Dan Quayle, said he went to the White House event expecting to discuss foreign policy.

He entered the White House gates with Huang and Pauline Kanchanalak, a fund-raiser who advised the U.S.-Thai business group and gave it free office space.

"As I was going through the turnstiles I heard the magic words 'DNC' for the first time," Jackson said. "This raised certain questions in my mind, but I was already inside the White House gate, and I was sure that I couldn't get hurt going to a meeting with the president of the United States."

Jackson said his recollection was "absolutely firm" that Huang made the pitch. He quoted Huang as saying "elections cost lots of money. I'm sure every person in the room will want to support the re-election of President Clinton."

But Beth Dozoretz, who raised some $2 million for the Democrats, told investigators she never heard such a fund-raising pitch from Huang.

"If he made some remarks, they were insignificant," Dozoretz said. "My opinion is he did not say that," she said. "I would remember if he said that."

By The Associated Press