Independent counsel Kenneth Starr has devised an unusual approach to investigate allegations that Whitewater witness David Hale received payments from conservative activists, officials in the Justice Department report.
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He would use a staff drawn from the FBI and the Justice Department, said the officials, who requested anonymity because it was not their decision to make or announce.
Former federal judges Charles Renfrew, who also served as deputy attorney general in the Carter administration, and Arlin Adams, who was the independent counsel investigating the Reagan administration's housing scandal, would serve on the panel, the officials said, adding that Renfrew was seeking a third judge for the panel.
Legal scholars say that if evidence of payments turns up, it could damage the credibility of Starr's investigation, making it hard for the prosecutor to conduct the review himself.
"There is a taint here that is going to make this entire ball of wax one of history's continually debated cases," said Paul Rothstein, a law professor at Georgetown University.
The allegations of payments were made by an Arkansas woman and her son, who say that Hale received money and other benefits from conservative activists when he was cooperating with prosecutors. Hale has denied receiving any money.
The allegations have become a rallying point for President Clinton's supporters, who herald the story as evidence of a right-wing conspiracy to hurt the president.
Starr's supporters call the allegations flimsy.
"The evidence is so shallow and worthy of so little value," said former U.S. Attorney Henry Hudson, a Republican and friend of Starr's.
Bruce Yannett, former associate independent counsel in the Iran-Contra investigation, said Starr has every reason to get to the bottom of the allegations because so much rides on Hale's testimony.
"The worst case scenario is for him to give someone like Hale a clean bill of health and then have a defense investigation or the media prove him wrong," said Yannett.
Hale's 1996 testimony helped convict Arkansas' governor Jim Guy Tucker, a Democrat, and James and Susan McDougal, Mr. Clinton's Whitewater business partners. Hale's testimony also implicated the president in Whitewater. He said Mr. Clinton pressured him to make an illegal loan. Mr. Clinton denied that under oath.
Lawyers say it's unlikely that any Witewater convictions would be overturned if Hale, an ex-judge who pleaded guilty to Whitewater crimes and served 24 months in jail, was found to have received payments. But the allegations raise questions that need to be answered about whether Starr is running an impartial investigation, lawyers say.
Mark Geragos, Susan McDougal's lawyer, has threatened to call Starr and his top deputy, Hickman Ewing, as witnesses to question them about the alleged Hale payments during McDougal's upcoming criminal trial.
The payments were alleged by Caryn Mann, a Bentonville, Ark., funeral home worker. She contends that from 1994 to 1996, her former live-in boyfriend, Parker Dozhier, and others gave cash to Hale out of money they received from a foundation that publishes the conservative American Spectator magazine.
Mann said she never saw money change hands; her teen-age son said he did. No evidence has yet turned up to substantiate the claims.
She alleged that Hale shared secret information about the Whitewater investigation with Dozhier and officials working for the magazine, which they in turn used to try to bolster the probe and damage President Clinton.
Dozhier, who owns a bait shop in Hot Springs, Ark., acknowledged receiving $l,000 a month to gather information about Whitewater for the American Spectator and letting Hale, an old friend, occasionally stay rent-free in a fishing cabin he owned. But he denied giving Hale any cash.
American Spectator officials said Dozhier and others were paid to unearth information about Whitewater for a journalistic effort called "The Arkansas Project." The magazine received money from two foundations controlled by Richard Mellon Scaife, a Pittsburgh philanthropist who has underwritten several anti-Clinton projects.
Written by Michael J. Sniffen