It Pays to Be Friends of Al

0 Comments | Insight on the News, April 5, 1999 | by Sean Paige

Attorney General Janet Reno refused to investigate shady deals surrounding a real-estate venture--the Portals--that earned millions of dollars for Al Gore's close friends.

With so many potential scandals to choose from, Attorney General Janet Reno seems to have grown a bit persnickety about the appointment of independent counsels. No more so, though, according to her Republican critics, than when allegations of wrongdoing concern Vice President Al Gore.

Reno twice in the waning days of 1998 declined to order probes into questionable Gore fund-raising activities during the 1996 presidential race. More recently, however, she also brushed aside evidence of possible illegality, conspiracy, influence peddling and perjury involving a cadre of Gore's closest pals, resulting from a yearlong probe by the House Commerce Committee of a Washington real-estate venture called the Portals.

Key players in the deal include top Washington lobbyist Peter Knight, a former Gore aide and campaign chair man for the 1996 Clinton/Gore reelection campaign, meaning he's covered by the independent-counsel statute; Ambassador to the People's Republic of China James Sasser, a former Democratic senator from Tennessee; and enigmatic Chattanooga developer and "friend of Al" Franklin Haney, whose willingness to spend millions of dollars to rescue a faltering Washington office complex gave impetus to the intrigues the committee report attempts to elucidate.

Committee findings that failed to stir Reno's curiosity include:

* Knight and Sasser each received unlawful, $1 million contingency fees for their parts in convincing the Federal Communications Commission, or FCC, to consolidate their offices at the Portals, Haney's troubled office building in Southwest Washington--a move the FCC doggedly had fought before their intercession. They also helped to negotiate lease changes beneficial to Haney but risky to taxpayers;

* Knight, Haney, Sasser and others involved in the scheme made misleading, false and possibly perjurious statements about the true nature of their collaboration;

* Sasser's handling of a $1 million payment from Haney (which he received several weeks after confirmation as ambassador) artfully dodged federal financial-disclosure rules;

* Sasser's lobbying activities on behalf of Haney (who at the time was paying the former senator a whopping $100,000-a-month retainer) during a leasing dispute with the Tennessee Valley Authority, or TVA, also may have constituted an illegal contingency-fee arrangement and almost certainly resulted in a raw deal for taxpayers and TVA rate payers;

* As part of their dealings, Knight also may have solicited a $50,000 contribution to the Clinton/Gore reelection campaign from Haney--a commitment that may have led Haney to embark on an illegal campaign-finance scheme for which he has been indicted. (According to the 42-count federal indictment, the developer allegedly used straw donors to contribute more than $200,000 personally to the Democratic Party, including to the 1996 Clinton/Gore reelection campaign and to friends of Sasser.)

Gore himself stands accused of nothing so much as having his name and office exploited by friends and cronies for personal profit and unseemly advantage, which critics say sometimes is indictment enough, given the old adage about birds of a feather.

Those who are following the case closely say that few conclusions reached by the committee are likely to result in criminal charges, however, thanks in part to Reno's unwillingness to see anything in the detailed, well-documented, multivolume report that merits further investigation. But the gory details behind the Portals project --as if seen through a door mistakenly left ajar--provide a fascinating glimpse at how money, influence and connections translate into big money in the corridors of official Washington.

Committee investigators had their work cut out for them in trying to untangle an admittedly complicated and largely circumstantial case but believe they provided enough "specific" and "credible" evidence of possible wrongdoing to trigger a second look by an independent counsel. Sources on the committee also say Reno seemed to have prejudged the case, basing her dismissal on a previous investigation by the department's Campaign Financing Task Force, which "concluded that the evidence does not support the [committee] report's view that Mr. Haney's payment to Mr. Knight was a contingency fee," according to the attorney general.

"Except for the testimony of Knight and Haney, a preponderance of evidence in this case points in the direction that there was some wrongdoing," a source on the committee tells Insight. "The Justice Department has specific, credible evidence, at least in regard to Knight. But not only do they refuse to comply with the Independent Counsel Act, they offered no real explanation and briefing to this committee, as we requested."

Committee sources also complain that attorneys for Knight and Haney were allowed to present a dog and pony show for Justice Department officials which inappropriately may have influenced Reno's decision--an event a department spokesman would neither confirm nor deny, saying only that "it's not uncommon for us to hear the views of attorneys" for individuals who might come under investigation.