By Michael Grunwald

Washington Post Staff Writer

Thursday, July 16, 1998

Sen. Orrin G. Hatch (R-Utah) read an angry editorial about Democratic fund-raising follies. Attorney General Janet Reno replied that she doesn't care about editorials. Sen. Fred D. Thompson (R-Tenn.) also criticized Reno for her refusal to seek an independent counsel. Reno said she doesn't mind criticism. Sen. Arlen Specter (R-Pa.) even trotted out charts to make a point. Reno said she isn't swayed by charts.

It was a familiar scene at the Senate Judiciary Committee yesterday, as Reno deflected pointed questions from frustrated Republicans about the inquiry into 1996 campaign finance abuses. The result was familiar, too: verbal stalemate, legal status quo.

"This ain't our first rodeo," Thompson said later in an interview. "We've been back and forth on this issue so many times, but nothing ever changes."

The committee's Justice Department oversight hearing had its moments of drama, but none of them resolved the impasse between Reno and her GOP critics over her refusal last year to recommend the appointment of an independent counsel for the campaign finance probe.

Thompson disclosed new details from FBI Director Louis J. Freeh's confidential 1997 memo urging Reno to appoint a special prosecutor. Specter accused Reno of a double standard, complaining that she backed an independent counsel to investigate Labor Secretary Alexis M. Herman on evidence even she acknowledged was inconclusive while ignoring obvious evidence of abuses by President Clinton and Vice President Gore. Hatch, the committee chairman, warned Reno that the campaign controversy would be her most memorable legacy.

But Reno refused to budge from the decision she made in December. She said she reviews the situation "every day," and is "absolutely convinced" that the evidence compiled so far should not trigger the independent counsel statute, regardless of headlines about White House coffees, allegations of Chinese money going into U.S. campaigns and the sleepovers for big contributors in the Lincoln Bedroom.

She said she had full confidence in the Justice Department's own two-year investigation, which after a series of early mishaps has now secured charges against 11 Democratic fund-raisers, including a flurry of four indictments in the past week. The probe, she said, will continue.

"I don't do things based on editorials," she said. "I don't do things based on pressure. I do things based on the law."

The problem with the Justice probe, according to the Republican critics, is that while a few prominent fund-raisers have been indicted, notably Johnny Chung, Yah Lin "Charlie" Trie, Maria Hsia and Pauline Kanchanalak, no one on the receiving end of the campaign contributions has been charged.

They argue that the Justice Department has both the appearance of a conflict of interest and an actual conflict in investigating evidence of White House involvement in the fund-raising abuses.

Some senators did ask Reno about Justice Department policies on issues such as immigration, drugs and handguns, and several Democrats on the committee used the forum to air complaints about independent counsel Kenneth W. Starr.

But the hearing was dominated by campaign finance, with weary-sounding Republicans warning that Reno's handling of the issue may doom the independent counsel statute when it comes up for reauthorization next year.

"You're going to kill this statute," Hatch said. "I don't know, maybe that's not such a bad thing. . . . But I really think you need to revisit this issue."

Charles G. LaBella, the outgoing head of the Justice Department's campaign finance task force, is writing a final report that may address the independent counsel issue once more. LaBella once recommended that Reno appoint a special prosecutor to investigate fund-raising calls made from the White House by Clinton and Gore, and some Republicans predict that he will now recommend an independent counsel with a much wider mandate.

Of course, the final call lies with Reno. But one telling exchange yesterday served as a reminder: Her critics can't change her decision, but they can always complain about it.

"I'll stay here for you until hell freezes over," Reno said after Specter requested more time to explain his complicated charts.

"That just may happen," Specter replied. "That just may happen."

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