Special-Prosecutor Law Is Hot Potato for 1993

Law behind Iran-contra investigation is dead and question of what kind of statute might replace it will pit GOP, Democrats in Congress

THE independent-counsel law - a flash point in conflicts between the executive branch and Congress during the 1980s - died earlier this week. But it may come back to life before the cherry blossoms bloom anew in Washington.

First passed in 1978 and renewed in 1987, the law required the attorney general to appoint an independent counsel if there were "reasonable grounds" to believe that the president or another high-ranking member of the administration had violated the law. The special prosecutor then worked without any oversight from the Justice Department to investigate the wrongdoing and, if needed, to prosecute officials.

Although Bush administration officials have opposed renewing the independent-counsel law, President-elect Clinton last week pledged to sign a statute if Congress passes it. As a result, says Rep. Barney Frank (D) of Massachusetts, chairman of a House Judiciary subcommittee, there is an "overwhelming chance" that the independent- counsel bill will be renewed, possibly as early as April.

But he acknowledges that "there has been some ambivalence among House Democratic leaders" about the law - in part, because an independent counsel might look into scandals swirling around the now-defunct House bank and post office.

Malcolm Wilkey, a Justice Department investigator, concluded Wednesday that, in the bank case, "actual criminal conduct by some members appears to have taken place."

Some observers wonder whether Democrats' ambivalence about the law may intensify now that Mr. Clinton has captured the White House.

"The question is whether some Democrats will think it's a bad idea now that there's a Democratic president and whether some Republicans who formerly opposed the law will think it's a good idea," says Terry Eastland, a former Justice Department official who is a fellow at the Ethics and Public Policy Center in Washington, D.C. "There could be shifting allegiances."

Representative Frank counters that congressional Democrats cannot afford to oppose an independent-counsel law. "It would look terrible for the Democrats if we allow [the law] to lapse now that we control the White House," he says.

Since 1978, 11 independent counsels have investigated a variety of charges - ranging from allegations of cocaine use by Carter chief of staff Hamilton Jordan to alleged financial improprieties by Reagan's attorney general, Edwin Meese III. Only three of those investigations have led to standing convictions, according to the Congressional Quarterly.

There are two independent-counsel investigations still in progress - one looking into alleged corruption at the Department of Housing and Urban Development, another investigating the Iran-contra affair. These independent counsels will not be affected by the law's expiration Tuesday, but no new investigations - for example, into the Iraqgate affair - could be launched unless a new statute is passed.

Whether a new law is approved could hinge on how Congress views the Iran-contra investigation - by far the most controversial use of the independent counsel.

During the past six years, independent prosecutor Lawrence Walsh has spent more than $33 million to investigate this scandal of the Reagan administration. He has won 11 guilty verdicts - most recently in the case of ex-spy chief Clair George. However, his most important convictions - of ex-White House aide Oliver North and former national security adviser John Poindexter - have been overturned on appeal.

Mary Belcher, a spokeswoman for Mr. Walsh, denies any partisan motivation, but Republicans are hopping mad about the investigation. They are especially incensed that, just four days before last month's presidential election, Walsh issued a new indictment of former Defense Secretary Caspar Weinberger. The charge, which was dismissed last week by a federal judge (four other counts will go to trial Jan. 5), was blamed by many in the White House for derailing President Bush's last-minute surge in the polls.

"Walsh has been leading a totally partisan, taxpayer-funded persecution of Republicans. It's an outrage," says Walt Riker, a spokesman for Senate minority leader Bob Dole (R) of Kansas. He vows that Senator Dole will use the "excesses and outrages of the Walsh operation as exhibit A of why the special-counsel law" should not be renewed.

Both Republican and Democratic lawmakers have said they will introduce independent-counsel legislation in January. But the two parties are far apart on what the statute should contain.

Frank says he favors a law similar to the one that expired Tuesday. Under that law, the attorney general had the option of appointing an independent prosecutor to investigate members of Congress - but was required to set up a special prosecution only when malfeasance by top executive-branch officials was alleged.

Rep. George Gekas (R) of Pennsylvania, on the other hand, says he plans to introduce a significantly modified statute. He proposes making congressmen subject to the same mandatory-investigation provision as administration officials. He also wants to limit the amount of time a special counsel may spend investigating a case (two years, subject to renewal), and to force prosecutors to regularly report to Congress about their expenses.

No matter which independent-counsel law is passed - if any - many observers expect the Clinton administration to appoint a prosecutor to look into allegations of bank fraud involving loans made to Iraq before the Gulf war of 1991.