By William Neikirk, Washington Bureau.

September 3, 1998

Atty. Gen. Janet Reno's congressional critics began to back away from a threatened contempt of Congress citation Wednesday but still insisted that she recommend appointing an independent counsel to investigate fundraising abuses in the 1996 presidential campaign.

Reno came to an extraordinary three-hour meeting with leaders of investigative committees in the House and Senate, allowed them to read edited internal memos from Justice Department officials who had urged her to name an independent counsel, and answered questions on why she didn't.

Reno in early August refused to produce the memos under a subpoena from the House Government Reform and Oversight Committee, prompting the panel to recommend to the House that she be held in contempt. The fact that she brought the documents to Wednesday's session, and allowed invited members to read them, appeared to give Republicans the chance to pull back from a contempt citation that might not have passed anyway.

Those who attended said the memos were so heavily edited, in part because some involved grand jury materials, that they wondered whether some of the contents had been stricken needlessly.

Even so, one Republican source who read the memos said they were "devastating" and suggested the attorney general should have named an independent counsel last year.

Rep. Henry Hyde (R-Ill.), chairman of the House Judiciary Committee, confirmed that the contempt citation was discussed. "We all are making an effort to reach an accommodation," he said. Asked if a contempt citation could be avoided, Hyde added, "I think it can be, but we're not there yet."

Sen. Orrin Hatch (R-Utah), chairman of the Senate Judiciary Committee who summoned Reno to the meeting in his office, said it was a "solid first step toward resolution of this dispute." But with the extensive editing, he said, Reno was not "completely forthcoming with the Congress."

Rep. Dan Burton (R-Ind.), chairman of the government reform panel, said he would talk to his staff and committee about whether the contempt citation should be dropped in view of Reno's decision to produce the memos.

He, too, made clear that he thought Reno made the wrong decision in refusing to name an independent counsel, based on his reading of the memos.

"I think the parts we read were very interesting and very helpful and reinforced my view that the attorney general was trying to protect the president and vice president" in refusing to recommend appointment of an independent counsel last year, Burton said.

After the session, both Burton and Hatch said that Reno should name an independent counsel to investigate all aspects of the fundraising scandal, not just elements of it.

On the Senate floor, Hatch said the memos by FBI Director Louis Freeh and Charles LaBella, who had headed Reno's task force looking into the fundraising allegations, provided "strong, convincing arguments" in favor of an independent counsel. LaBella attended the meeting, but not Freeh.

Hatch said that when he asked Reno why she had rejected recommendations, "the answers I received were vague, insufficient or unconvincing."

Reno has triggered two 90-day investigations to determine whether she should recommend appointment of independent counsels to look into the roles played by Vice President Al Gore and former Clinton deputy chief of staff Harold Ickes in the 1996 fundraising controversy.

Reno refused to turn over the documents subpoenaed by Burton's committee on the ground that they would endanger the Justice Department's campaign finance investigation by revealing prosecutors' strategy. The committee approved the contempt citation by a party-line vote last month.

Rep. Henry Waxman (D-Calif.), ranking Democrat on the Burton committee, called Wednesday's session a "very constructive meeting" and added, "I don't think the contempt resolution will pass the House."

There had been some doubt it would pass anyway, as many Republicans did not want to be put in the position of citing the attorney general. By appearing at the closed-door meeting, Reno may have enabled some Republicans to get off the hook.

Also attending the meeting were Justice Department officials who had made recommendations to Reno on appointing an independent counsel -- LaBella; Lee Radek, head of the public integrity section; and James DeSarno, an FBI official who worked on the task force.

Much of the time was taken up with members reading the memos. They asked LaBella, DeSarno and Radek questions, but Reno interrupted them several times and said they shouldn't answer, on grounds of confidentiality or the fact it was her decision, not theirs, according to Burton.

Hyde called it a cordial meeting, and Burton said it was productive--but not as productive as he would have liked. "I don't believe everything we wanted was given to us today," Burton said.

Burton, meantime, said a report that Vanity Fair magazine was about to publish a story on his private life is "another manifestation of trying to intimidate me or back me off my job as chairman of the committee" by friends of President Clinton.

Vanity Fair officials said no Burton story is planned for its next issue and said it was "ridiculous" to suggest that it could be influenced by the White House.

Copyright 1998, The Tribune Company.