Dodging A Bullet

JANET RENO'S OBSERVATION, in a press conference last month, was "You're damned if you do and damned if you don't"--a cliche and a commonplace, to be sure, but one that accurately summarizes her dilemma in the Clinton follies. Reno serves a president who, if the critics are right, will soon be hamstrung by multiple allegations of illegal or improper conduct in the Whitewater and Indogate investigations. She is 58 years old and notably un-chic--an awkward figure among the thirtysomethings who populate Clinton's inner circle. She is also a career prosecutor who became the first female attorney general almost by chance, and she loves her work. So when Reno rejected another demand that she appoint a special prosecutor to investigate the Democratic Party's fund-raising practices last week, the question was immediate and obvious: did she take a dive to hang on to her job?

Reno herself wasn't talking. But Republicans were outraged, and The New York Times, from its editorial page, succinctly voiced the disparaging notion that she had ""fumbled'' her duty as the nation's chief law-enforcement officer. Sen. John McCain, the Arizona Republican who twice asked Reno to appoint an independent counsel, expressed deep disappointment at her decision. Rep. Gerald Solomon of New York, also a Republican, said Reno's refusal threw Indogate "right into the lap" of Congress, where 11 separate committees are preparing to dissect the scandal--and, they hope, get on TV.

Indogate, which involves millions of dollars in suspicious-looking campaign contributions from Asians and Asian-Americans, looks bad and smells bad to almost everyone--to the press, to the clean-politics lobby and most of all to the GOP. It has already revealed a clubby network of Little Rock lawyer-entrepreneurs who, trading on their contacts with the Clinton administration, were hustling vague business deals with Asian fat cats trying to gain access to the president. It may yet lead to the indictment of key players like John Huang, the mysterious Democratic Party fund raiser and former Commerce Department official who seems to have been the link between the administration, the Little Rock crowd and various billionaires in Indonesia, Thailand, Taiwan and Hong Kong. It has forced the Democratic National Committee to return $1.5 million in contributions and to hire a platoon of lawyers and accountants, working with the Federal Election Commission, to clean up the mess.

It has now led to large embarrassment for one of Clinton's most trusted aides, Bruce Lindsey. Before the election, Lindsey told reporters that Clinton's numerous meetings with James Riady, an Indonesian banker whose family contributed lavishly to the president's campaign, were "mostly social." That was not so: Clinton and Riady had in fact discussed U.S. trade policy--and Lindsey simply overruled two members of a White House damage-control team, Mark Fabiani and Jane Sherburne, when they urged him to tell the real story. And Clinton? He has been reduced to comparing himself to Richard Jewell, the hapless security guard wrongfully identified as the prime suspect in the bombing of the Atlanta Olympics.

But what no one can say--yet--is that Indogate involves misconduct by a ranking member of the Clinton administration. That is what the law requires, and it is precise. Essentially, the law tells Reno to trigger the statute--the special prosecutor is actually appointed by a panel of federal judges--if she gets a credible allegation of illegal conduct by the president, the vice president, a member of the cabinet or a top-level appointee like the president's chief of staff. (Huang, a midlevel official at Commerce during his time in government, would not be covered by the law.) Announcing Reno's decision, the Justice Department simply said that no one had made such a claim, which was true. McCain's letter to Reno cited the fact that Al Gore had been present at a fund-raiser in a California Buddhist temple last April, and Gore is covered by the law. But Gore, who has conceded that the fund-raiser was a "mistake," claimed he did not know the party was milking a group of Buddhists for campaign cash.

The political hubbub over Reno's decision also concealed a crucial fact: that she can still seek the appointment of a special prosecutor if allegations of wrongdoing emerge against any administration official covered by the law. That could well happen: Reno has created a special task force from the Public Integrity section of the Justice Department to investigate Indogate and the DNC--and it was the Public Integrity section that recommended there be no special prosecutor. There are turf issues here. Career prosecutors at Justice see the independent-counsel law as an affront to their professionalism. "If we can prosecute and convict Dan Rostenkowski, we can investigate John Huang," a senior department official growled. NEWSWEEK has learned that, among other issues, the Justice task force will try to determine whether Huang violated federal law by lobbying the Clinton administration on behalf of his old employer, the Riady-owned Lippo Bank.

And though Reno made her decision without sending investigators to interview potential witnesses, which is unusual, the department task force and its squad of FBI agents will do just that in the weeks ahead. If they unearth charges against Gore, Clinton or any other ranking official, the special-prosecutor law may well be triggered. The law also contains a provision designed to force the attorney general to call for a special prosecutor if she or her staff is too close to those being investigated--and Reno has invoked that language, called the conflict-of-interest clause, before.

Reno, in short, was giving no guarantees to the White House, even though her job is on the line. Furious at the fact that she has already asked for and gotten four special prosecutors--including Whitewater counsel Kenneth Starr and his ever expanding portfolio--Clinton aides have been muttering to the press for months about their hopes of seeing her go. Clinton himself has been conspicuously vague about her future, and the White House recently canceled a scheduled meeting at which Reno was to discuss her tenure with the president. That sit-down has now been rescheduled, and the vibes from the White House seem friendlier. "She's a pain in the a--, but she's built up a lot of capital with the Republicans and the press, and we need her," a Clinton aide said. But Reno has always been fiercely independent. And if Indogate leads to a cover-up, this attorney general is highly unlikely to play ball.