Reno faces Republican ire

Reno also rejected a special prosecutor to investigate former Energy Secretary Hazel O8217;Leary, concluding that O8217;Leary was unaware that a contribution to one of her favorite charities may have been solicited in return for her meeting Chinese businessmen.

Reno said the only fund-raising calls investigators found by Clinton came in October 1994 and were made from the White House private quarters, not the President8217;s offices. This places the calls outside the scope 8230; of Federal Election Law which applies only to solicitations for hard-money contributions occurring within the federal work place,8221; she wrote.

Reno told a news conference that her campaign finance task force continues to investigate democratic fund-raising practices that without Gore8217;s knowledge diverted some of the money he raised into questionable accounts. She also said the Department would continue investigating others involved in the O8217;Leary incident.Any decision not to ask for an independent counsel does not mean that a person has been exonerated or that the work of the campaign finance task force has ended,8221; Reno said. Reaction from the three officials was muted. In a single-sentence statement, Clinton said, the Attorney General made her decision based on a careful review of the law and the facts and 8220;that8217;s as it should be8221;. Gore, traveling in Connecticut, said, 8220;Now that there8217;s been a full and independent review, we can put this issue of the phone calls behind us once and for all.8221;

8220;I am relieved but not surprised,8221; O8217;Leary said.

But Senator Fred Thompson, the Republican chairman of the Senate Committee Investigating Campaign Finance, accused Reno of 8220;misinterpreting the law8221; and said that her focus on telephone solicitations was too narrow.

At the same time, he said, 8220;I don8217;t think any of us are surprised8221; by her conclusion. Thompson said Reno8217;s interpretation of the law had 8220;hamstrung8221; the FBI in its investigation.

Reno denied that, 8220;I want to make clear to everyone I am not imposing any constraint on the task force.8221; she and Freeh acknowledged their split, but traded compliments late in the day.

Freeh pushed for an independent counsel on grounds Reno has a conflict of interest with investigating top administration officials.

Freeh said he appreciated the opportunity to fully express the FBI8217;s views, noted that 8220;lawyers and investigators can and often do disagree8221; and said he still has a 8220;strong and amicable relationship8221; with Reno.

Dan Burton, a Republican who chairs a House Committee investigating campaign funding, said he would call Reno and Freeh to a hearing on Tuesday.

The telephone fund-raising inquiry was pushed into the spotlight by demands from Republicans on Capitol Hill, newspaper disclosures and the timetables set by the independent counsel law. It led to questioning of Clinton and Gore by Justice Department lawyers and FBI agents.

But it was always just part of a broader investigation by 120 lawyers and FBI agents into numerous campaign fund-raising transactions and figures, including possible Chinese and other foreign donations and use of the White House as a fund-raising tool. Some Republicans, including Burton, also are under scrutiny.

Indictments of at least two Democratic fund-raisers for concealing the identities of real donors are expected later this month.