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FEC Audit May Lead to the Mother of All Probes

By Elaine Shannon/Washington

The Federal Election Commission is probably the least-feared watchdog agency in Washington, which is why inside the Beltway its nickname is the "Failure to Enforce Commission." That explains why the hottest guessing game in town is figuring out how this nearly toothless body managed to do what volumes of editorial screeds, congressional bombast and urgent pleas from top FBI and Justice officials could not--specifically, push Attorney General JANET RENO to the verge of naming a new independent counsel to investigate the financial maneuverings of the 1996 Clinton-Gore campaign. The explanation, says an insider, is that an FEC audit of the campaign, which landed at Justice about three weeks ago, concluded that White House and campaign officials may have intentionally attempted to evade federal election laws by manipulating "issue advocacy" ads funded by the national Democratic Party or state parties into hard-sell vote-for-Clinton-Gore messages. Why is this significant? Because throughout the year, Reno has been able to ignore the entreaties of FBI Director LOUIS FREEH, Justice campaign task-force chief CHARLES LABELLA, Common Cause and Republican leaders because, she has said, the case did not meet the independent-counsel law's test that there be "specific and credible charges" about the President or some other high official. While the FEC audit contains "no smoking guns, no great revelations," says a a lawyer familiar with the case, "the Justice Department bases its interpretation of the law on what the FEC says, and once they say something's improper, bingo. It's specific and credible." The issues seem plain. "These ads were produced and designed by the campaign media consultants," says Common Cause president ANN MCBRIDE, pointing out that "it's on the public record that Clinton was very much involved in them." Reno watchers believe she will soon launch a formal 90-day inquiry into the Democrats' use of issue-advocacy ads to promote the ticket, and the betting inside Justice is that she will ultimately seek an independent counsel. If that happens, officials say, the mother of all IC probes could result, enveloping Clinton and Gore and even Republican standard-bearer BOB DOLE, whose campaign also benefited from issue ads like the ones in question. "In the real world," says a senior Administration hand, "it comes down to the whole ball of wax. No self-respecting independent counsel is going to stop at some artificial line."

--By Elaine Shannon/Washington

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Cover Date: September 14, 1998

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