FBI chief faced independent counsel inquiry; Reno declined

Friday, May 26th 2000, 12:00 am

By: News On 6

WASHINGTON (AP) -- The Justice Department considered but decided against an independent counsel to investigate FBI Director Louis Freeh for inaccurate congressional testimony, The Associated Press
has learned.

Freeh was the subject of a 30-day preliminary independent counsel inquiry in 1997 after the department's internal watchdog accused him of giving false testimony during a hearing about the FBI laboratory's mishandling of cases, government officials said Friday.

Attorney General Janet Reno concluded that while Freeh's testimony was inaccurate, there was no evidence of criminal intent that would warrant the appointment of an independent prosecutor.

In a written statement, Reno said she agreed with the Justice Department investigators, who concluded that Freeh had simply made a mistake.

"I have worked with Director Freeh for nearly seven years and have the utmost respect for his integrity," Reno's statement said.

At the time of the Freeh inquiry, the director and Reno were beginning what became a lengthy disagreement over whether an
independent prosecutor should be named to investigate the fund-raising activities of President Clinton and Vice President Al Gore.

The no-criminal-intent rationale for declining an independent counsel in the Freeh matter was similar to the one Reno used to decline appointment of a counsel for Gore. Reno used other standards for declining such an appointment for Clinton.

In the Freeh matter, Reno also concluded there was no evidence the director knew that his testimony was inaccurate, the officials
said. As soon as he did, Freeh sent a letter to a House Appropriations subcommittee to correct the testimony.

The internal debate is detailed in documents recently turned over to House and Senate investigators reviewing why Reno refused a
special prosecutor to investigate fund-raising.

In a two-page statement Friday, Freeh said he cooperated with the preliminary inquiry and was exonerated.

"I cooperated fully with this preliminary investigation even though I was confident that the subcommittee record was, in fact, made complete by my letter and this simple matter had been appropriately resolved," said Freeh, who has been FBI director since 1993.

The preliminary inquiry by the Justice Department public integrity section was closed "after concluding without question that I had done nothing wrong," he added.

The disclosure comes as Republicans and Democrats intensify their review of Justice's fund-raising investigation.

Last week, the FBI belatedly turned over a memo Freeh wrote in 1996 suggesting that the head of the Justice Department public
integrity section felt pressure not to proceed with the fund-raising probe because he feared Reno's job hung in the balance.

The prosecutor, Lee Radek, has testified he cannot recall making the remark. Two FBI officials witnessed the comments, according to
testimony and documents.

Freeh has openly disagreed with Reno's decision against naming an independent counsel for fund-raising, as did the former chief
prosecutor in the case, Charles LaBella.

Congress is reviewing their memos arguing for appointment of the outside prosecutor.

Democrats on Capitol Hill intend to use the revelation about the Freeh matter to argue that the FBI director benefited from the same
Reno analysis of the law that led to the decision not to appoint a special prosecutor for Gore.

Reno concluded there were no grounds to name a special prosecutor for Gore's fund-raising in part because there was no evidence of a "knowing disregard of the law." She used a similar standard for declining Freeh's case.

Freeh's case had the added element that the evidence showed the FBI chief was unaware his testimony was wrong and that he corrected
it as soon as he found out, officials said.

Republicans were surprised when Justice turned over documents in the unrelated Freeh case to their fund-raising probe.

Democrats are pressing for the release of all documents gathered by Congress in the review.

"I believe that only a complete release will put an end to the gamesmanship we see here today," Rep. John Conyers, D-Mich., the
senior Democrat on the House Judiciary Committee, said earlier this week after a hearing on the Radek matter.

In the Freeh matter, the Justice Department public integrity section began a 30-day preliminary independent counsel inquiry
after Inspector General Michael R. Bromwich made his allegations.

Freeh testified March 5, 1997, before the House subcommittee that FBI lab whistleblower Frederic Whitehurst was suspended with pay "solely and directly on the basis of the recommendation by the inspector general and their findings with respect to Mr.
Whitehurst."

Bromwich objected in writing, saying his report never formally recommended that Whitehurst be suspended and that the FBI also made the suspension because Whitehurst refused to be interviewed during a separate Justice investigation into a press leak of his
allegations.

After Bromwich demanded a correction, the FBI director sent a letter to the subcommittee that his testimony "was incomplete."

He wrote that Whitehurst's refusal to cooperate with the leak investigation was a basis for the suspension.

In his statement Friday, Freeh said he didn't know about the second basis for Whitehurst's suspension because he had been recused from the FBI lab matter earlier to avoid the appearance of a conflict of interest.

"Immediately after learning that my answer was not factually complete, I drafted a letter and sent it to both the subcommittee
chairman and the DOJ inspector general," he said.