For all those who thought that Kenneth Starr would soon be wrapping up his Whitewater investigation, think again.
The independent counsel has told Pepperdine University in Malibu that he won't be arriving this spring, as he had planned, to become dean of both the law school and a new school of public policy.
Moreover, Starr threw down the gauntlet to the Justice Department, insisting that he should be left to conduct an internal probe into allegations, first reported by Salon, that key Whitewater witness David Hale was supported by funds provided by a billionaire conservative activist with whom Starr has long been associated.
"I had eagerly looked forward to spending many happy years at Pepperdine after completing my duties as independent counsel," Starr said in a news conference, quoting from a letter he wrote to Pepperdine President David Davenport. "The work of that office, however, has expanded considerably and the end is not in sight."
For the White House, Democratic supporters of President Clinton, Justice Department officials and even Republican members of Congress, Starr's words are unsettling indeed. They suggest the independent counsel's investigation will extend well beyond May, when it was assumed Starr would present his report on Clinton to Congress.
For GOP lawmakers, it likely means that campaigning for the midterm election in November will get under way with the issues of Whitewater, the Monica Lewinsky affair and Clinton's possible impeachment continuing to irritate a voting public that, according to all the polls, regards Starr's investigation as partisan -- a sentiment that is working to the benefit of Democrats.
"This is not how we want to kick off the campaign," said one disgruntled staffer for a Republican congressman.
Senior federal law enforcement officials are also angry at Starr's perceived delay over the Hale payments probe. They point out that Starr's office has known about the charges for at least a month, when Salon first reported them. The conflict between Starr's office and the Justice Department, they say, has now brought the probe to a standstill.
"The question is, how long is this going to go on before this is settled," a Justice Department source told Salon. "A delay in any criminal investigation always has a negative impact. But in a case of this magnitude" -- involving allegations of tampering with a witness who has leveled charges of criminal wrongdoing against the president -- "this is unforgivable."
Last week, the Justice Department asked Starr to determine whether he should investigate allegations that former Arkansas judge and businessman Hale had received payments from operatives working for an anti-Clinton project funded by billionaire Richard Mellon Scaife. In a letter, Deputy Attorney General Eric Holder pointedly noted that Starr might "have a conflict of interest, or the appearance of a conflict, in looking into this matter."
Holder was alluding to Starr's connections to Scaife, who funded a the $2.4 million Arkansas Project between 1993 and 1997 to dig up damaging details about President Clinton for the conservative American Spectator magazine. Salon reported allegations that between 1994 and 1996, part of that money was funneled to Hale by Parker Dozhier, an Arkansas sportsman who worked as one of Scaife's investigators. At the time, Hale, convicted of fraud, was cooperating with Starr's Whitewater investigation in return for a reduced sentence. As a witness, Hale is crucial to Starr because he claims Clinton pressured him into making an illegal $300,000 loan to Susan McDougal, one of Clinton's partners in the Whitewater land deal. Clinton denies the allegation.
Justice Department lawyers believe Starr has a financial and political conflict of interest because the positions he accepted at Pepperdine were funded largely by money from Scaife. Two years ago, Scaife provided the university with more than $1 million to launch its public policy school. Officials at Pepperdine insist Scaife had no role in Starr's selection for the dean's position.
But in a letter sent Thursday to Holder's boss, Attorney General Janet Reno, Starr left no doubt about who should be in charge of the Hale probe. First rejecting Holder's suggestion that the independent counsel had a conflict of interest regarding Hale, Starr noted that the Justice Department itself had a conflict of interest because Hale has provided information damaging to Reno's boss, President Clinton.
"We are deeply concerned that the above considerations would create actual conflict of interest problems in any investigation of these allegations by the Department of Justice," Starr wrote. He went on to suggest that his concerns had been heightened by the Justice Department's support of several White House aides who have claimed executive privilege before Starr's grand jury, causing delays to his investigation.
Responding to Starr's statements, Democrats are insisting Starr still had a conflict of interest, despite removing himself from the Pepperdine job. It noted that Starr still sits on the board of the conservative Washington Legal Foundation, an organization that received nearly $3 million from Scaife between 1988 and 1996; that he is a member of the Federalist Society, another conservative legal organization that received $920,000 from Scaife during the same period; that he has worked with the conservative Landmark Legal Foundation, another Scaife-funded group; and he worked on a brief for the Paula Jones lawsuit on behalf of the Independent Women's Forum, a conservative group that received $450,000 from Scaife over the past three years.
At his news conference, Starr said he has never met or talked to Scaife. "I have had no arrangement -- implicit, explicit, direct or indirect -- with him," he said.