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Janet Reno (AP)

From The Post
Witness: Huang Sought Money at White House (Sept. 17)
Burton Postpones Hearings After Three Seek Immunity (Sept. 17)

Reno Moves to Expand Fund-Raising Inquiry

By Roberto Suro
Washington Post Staff Writer
Wednesday, Sept. 17, 1997; Page A01

Attorney General Janet Reno has ordered a major shake-up and expansion of the task force investigating allegations of illegal fund-raising during last year's election campaign, the Justice Department announced yesterday.

A veteran prosecutor and a senior FBI supervisor will be brought in to take command of the investigation, and attorneys and investigators will be added to the current staff of 90 to accelerate and intensify the wide-ranging inquiry, officials said.

The personnel changes marked an unusual mid-course correction in the management of what is widely considered the most complex and sensitive investigation handled by the Justice Department in recent years. The new assignments come after increasingly harsh criticism of Reno's leadership by Republicans in Congress.

Reno repeatedly has rejected demands that she seek an independent counsel to investigate the Clinton-Gore reelection campaign, saying that the Justice Department professionals on the task force had not found the evidence necessary to trigger such an action. In the absence of an independent counsel investigation, Reno said, the Justice Department task force could examine allegations of fund-raising improprieties.

Reno has grown increasingly concerned about what officials called the slow pace of the investigation and an apparent lack of cohesion between prosecutors and investigators, senior officials said. FBI Director Louis J. Freeh shared similar concerns, officials said. Yesterday's shake-up was set in motion following two recent incidents that highlighted these problems, the officials added.

Reno acknowledged Sept. 5 that the task force first learned from The Washington Post that publicly available records showed that largely unregulated political contributions solicited by Vice President Gore from the White House had been deposited into strictly regulated "hard money" accounts.

Reno sought an explanation, and task force officials advised her that prosecutors had sought and obtained the documents but that no one had examined them because of an apparent misunderstanding between prosecutors and FBI agents, officials said.

Then, last week, Reno, accompanied by Freeh and CIA Director George J. Tenet, went before the Senate Governmental Affairs and intelligence committees to deliver secret briefings on the task force's investigation into allegations that the Chinese government attempted to influence the 1996 elections with illegal campaign contributions.

Reno found herself facing questions she could not answer and that again pointed to a number of investigative lapses by the task force, according to sources familiar with the encounter. Sen. Arlen Specter (R-Pa.) said in a statement yesterday that the briefings revealed the Justice Department had critical information regarding China in its files "apparently without knowing it had the information or acting on it."

The two events alone might not have moved Reno to act, officials said, but combined with her underlying concerns about the task force, they convinced her she had to make changes in its leadership. Last Thursday, Reno canceled a weekend trip to Florida and called a series of top-level meetings in her muraled conference room with Freeh and top aides to plan the overhaul of the task force. By Monday afternoon, the basic plan was in place, and the final details were worked out yesterday, officials said.

Charles G. LaBella, a veteran of several large public corruption investigations, will become chief prosecutor on the task force. LaBella now heads the criminal division of the U.S. Attorney's Office in San Diego. James V. DeSarno Jr., a deputy assistant director of the FBI who is considered an expert in managing cases that involve large quantities of documents and records, will become special agent-in-charge of the investigation.

Rather than indicating Reno is moving one way or another on the independent counsel issue, Justice Department officials said, yesterday's announcement illustrated her concern over the past missteps by the task force and signs of friction among its investigators and prosecutors. The shake-up comes almost two weeks after Reno initiated a procedure under the Independent Counsel Act that gives her 30 days to review the evidence and allegations uncovered thus far to determine whether to take further steps toward appointment of an outside investigator.

The review will conclude Oct. 3. In addition to The Post report on Gore's fund-raising calls from his White House office, it was prompted by a formal request from 20 Republican members of the House Judiciary Committee for Reno to seek appointment of an independent counsel.

If Reno's review results in the discovery of "specific and credible" information that a top administration official may have committed a crime, she must then order a 90-day preliminary investigation, a more formal and extensive probe that would be undertaken by the Justice Department task force. Following that investigation, which can be extended for 60 days for one time only, Reno would have to declare whether she will seek an independent counsel.

If Reno does not move further toward an independent counsel at any of these junctures, the task force would continue investigating the allegations to determine whether criminal charges need to be pursued against any individuals.

In either case, Justice Department officials emphasized yesterday, Reno would need a robust and effective team of investigators and prosecutors.

"There is a widespread awareness that we are entering into a very sensitive period of this investigation," a senior official said. "With the 30-day clock running and possibly the 90-day investigation after that, there is a great deal of concern to make sure that everything that can be done, is done."

© Copyright 1997 The Washington Post Company

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