The Dark Side Of The Money Trail

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By Michael Isikoff

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THE PROPOSAL, MARKED ""PRIVILEGED AND CONFIDENTIAL,'' was a model of bluntness. Entitled ""Background Research: Senator Don Nickles,'' the May 16, 1997, document, obtained by NEWSWEEK, outlined an extensive plan to scour the Oklahoma Republican's life for embarrassing or incriminating details: searching courthouses for ""civil, criminal, divorce and bankruptcy litigation''; hunting for ""fictitious name filings''; reviewing his and his wife's ""personal business activities.'' The goal was to show that Nickles was ""linked to the oil industry.'' The memo's author: Terry Lenzner, a former Watergate counsel who now runs a private investigative firm with close ties to the White House. The Democratic National Committee is one of his top clients. This week, Lenzner may appear as an expert witness at the Senate campaign-finance hearings - where he'll sit across from his proposed quarry, committee member Nickles.

How did Lenzner come to target Nickles? The answer goes back to an effort by Oklahoma's Cheyenne-Arapaho Indians to win return of their homelands, snatched by the government a century ago. During the '96 campaign, Democratic Party officials offered to help them - in exchange for a $107,000 campaign contribution. Embarrassed when the incident came to light, the DNC returned the money. Then last spring, a business associate of the tribe's urged them to meet with Cody Shearer, described to them as a Washington ""insider'' and longtime friend of President Clinton.

In May, Shearer advised the tribe the best way to advance their cause was to dig up dirt on Nickles. Like most Oklahoma legislators, Nickles opposes returning the land, which sits beneath a Department of Agriculture research station popular with local farmers and businessmen. Shearer said he knew just the man for the job: his old pal Lenzner, who asked for up to $17,000. But when Indian leaders saw Lenzner's memo, they balked, suspecting Lenzner had other political motives. Lenzner said he was just giving the Indians what he thought they wanted. ""We're not a bunch of dummies,'' said James Pedro, a member of the tribe. ""We know when we're being used.''

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