Cloud Over Coehlo

On October 4, 1999, the White House weighed in on a controversy involving Vice President Gore's top campaign adviser. CBS News White House Correspondent Peter Maer got the details.

President Clinton asked Chief Of Staff John Podesta to check into allegations of financial misconduct by Gore campaign manager Tony Coelho (pronounced "quello"). A State Department report questioned Coehlo's dealings when he headed the U.S. presence at the 1998 World's Fair in Portugal. The president said he wouldn't comment on the matter until the White House receives a full report. However, he said Podesta's "first read" is that the auditors are more critical of the Agency for International Development.

A report by the State Department's inspector general, made public Saturday, found potential improprieties in Coelho's work as U.S. commissioner general for the world's fair in Lisbon, a post to which he was appointed in June 1996. The job, with the U.S. Information Agency, included fund-raising, design, fabrication and operation of the U.S. pavilion at the fair.

The report alleged that Coelho, a former House member from California, improperly used $210,000 in donated airline tickets, unnecessarily kept an expensive chauffeur-driven Mercedes and hired his niece for a $2,500-a-month job.

It said Coelho also obtained a personal loan of $300,000 from a Portuguese bank for a private foundation to use for a memorial sculpture, listing it as a liability on the USIA's records. The U.S. government could be responsible if the loan is not paid, the inspector general said.