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Counsel: Clinton Admin. Blocked Probe

The independent counsel who investigated former Housing Secretary Henry Cisneros charged in his final report Thursday that the Clinton administration thwarted his work, drawing the curtain on the longest-ever probe under a post-Watergate era reform law.

Officials who worked in the Clinton administration flatly deny the allegations by prosecutor David M. Barrett, who closed a decade-long probe with a report detailing a behind-the-scenes battle inside the government as he tried to look into possible tax violations by Cisneros.

Cisneros, who was housing secretary during the Clinton administration, pleaded guilty in 1999 to a misdemeanor of lying to the FBI about payments to a former mistress when he was answering questions during his confirmation for the Cabinet-level post. President Clinton eventually pardoned him.

When Barrett went to the Department of Justice seeking to broaden the probe, Attorney General Janet Reno allowed the prosecutor to look into only a single tax year, the report maintains.

"Beginning in the summer of 1997, the OIC developed, to the extent it could, evidence concerning efforts by officials of DOJ and the IRS to contain and limit the investigation of Cisneros's actions," the report stated.

"In the end enough high-ranking officials with enough power were able to blunt any effort to bring about a full and independent examination of Cisneros' possible tax offenses in the face of what seemed to many to be obvious grounds for such an inquiry," the report added.

"There seems to be no question that Cisneros was given extra consideration and more limited scrutiny because of who he was, an important political appointee," said the report. "This office received little in the way of cooperation from DOJ, whose purpose should be to protect the public interest and not to circle the wagons in protection of government personnel."

In strongly worded rebuttals, officials from the Justice Department and IRS rejected Barrett's allegations.

Allegations about Cisneros's 1991 and 1992 tax returns were based on his failure to include amounts of speaking engagement income. Allegations relating to his 1993 return were based primarily on claimed specific deductions.

According to the former assistant chief counsel for criminal tax matters, the certified public accountant who prepared Cisneros's tax returns had access to records of all the omitted income. In addition, the IRS lawyer wrote in rebuttal, Cisneros's CPA signed an affidavit taking responsibility for providing faulty advice regarding the improper deductions. Finally, the IRS lawyer wrote, the CPA had previously been an informant against Cisneros and had made amateurish mistakes on Cisneros's tax returns "that almost invited an audit."

"The inaccurate statements and unfair insinuations contained in this final report are too numerous to catalogue," said Jo Ann Farrington, former deputy chief of the Justice Department's Public Integrity Section.

Robert S. Litt, one of the Justice Department officials involved, called Barrett's suggestions of obstruction "a scurrilous falsehood," adding that the report was "a fitting conclusion to one of the most embarrassingly incompetent and wasteful episodes in the history of American law enforcement."

Barrett's report is the last chapter in the controversial history of the independent counsel law, which Congress refused to renew. The investigations caused serious political damage to both Republican and Democratic administrations.