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Fund-Raising Inquiry Trains an Eye on Clinton

Justice Department takes a first step toward a special prosecutor to probe the president's election finances.

Until now, President Clinton has managed, almost magically, to sail above the fray while investigators looked into possible Democratic Party misdeeds in fund-raising for the 1996 election.

As Vice President Al Gore's popularity ratings have plummeted, Mr. Clinton's have stayed at historic highs for his presidency.

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But Clinton's smooth sailing may face its most serious buffeting yet. The Justice Department is now doing unto Clinton what it has done unto Mr. Gore: exploring the possibility of appointing an independent counsel to investigate whether he made any illegal fund-raising phones calls from the White House last year.

For Gore, the mere mention of a possible independent counsel was enough to shake his Boy Scout image and send his public-approval ratings to just 38 percent, down from 49 percent in July, according to Democratic pollster Peter Hart.

But Clinton is no stranger to scandal, although he has not been seriously harmed politically by Whitewater or the Paula Jones lawsuit, for example. Still, the possible appointment of a second independent counsel - another one, Kenneth Starr, is already looking into Clinton's involvement in Whitewater - would test the president's political survival skills and encumber his efforts to deal with the Republican Congress and establish a legacy.

For now, the White House is bracing for the likelihood of an expanded investigation. Gore has hired two former Watergate prosecutors in his defense - either to deflect the appointment of an independent counsel altogether or, if one is named, to mount his legal defense. The Justice Department will announce Oct. 3 whether it is launching a full 90-day investigation that will determine if an independent counsel is needed to look into Gore's fund-raising activities.

So, is reform any closer?

The Justice Department's announcement about Clinton may raise interest in the other focus of the campaign-finance hearings: how the system might be reformed. This week, the Senate spotlight shifts abruptly in that direction, looking at how fund-raising practices - even legal ones - have evolved beyond any common notion of propriety. It also appears that the Senate's best-known bill proposing changes to the campaign-finance system may finally go to the Senate floor for a vote. Part of the bargain, however, is that Sens. John McCain (R) of Arizona and Russell Feingold (D) of Wisconsin have pared back their reform legislation.

The hearings' three-week detour into how the system works was a last-minute change of direction in a process that has done little to capture public attention. The new direction may also not rivet citizens, who are generally content with the economy and who perceive the reports of fund-raising shenanigans as "business as usual."

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GOP may feel a need to act

But longtime observers of the campaign-finance system still see a bit of public relations in the Senate Governmental Affairs Committee's decision to switch gears and in the decision to consider a vote on the McCain-Feingold bill.

For the Democrats, the change of direction allows them to move away from last week's damaging testimony on how big-money contributors gained access into the White House. For Republicans, the shift allows them to avoid accusations that they're blocking possible reform.

"The Republicans had a terrific week," says Larry Sabato, an expert on campaign finance at the University of Virginia in Charlottesville. "It's gotten to the point where Republicans would end up taking the black hats off the Democrats and putting them squarely on their own heads, if they stopped all reform."

An eventual vote on McCain-Feingold, he adds, would give a substantial number of senators from both parties a way to tell voters that they tried to "do something."

But Professor Sabato and other experts view the watered-down version of McCain-Feingold as a weak reform that would hardly change the role of big money in American political campaigns.

The new McCain-Feingold would still ban "soft money" contributions to the national parties. This is money, donated in unlimited amounts, used for general party activities but not for individual candidates. Instead, such contributions would face the same limits as other contributions.

The bill would also require quicker disclosure of contributions to and expenditures by campaigns.

But the new version drops a provision that would have put tougher restrictions on fund-raising by political-action committees. It also drops incentives for free television time for candidates.

The explosion of soft-money contributions in the 1996 campaign has captured a lot of attention. But campaign-reform advocate Ellen Miller notes that soft money accounts for a tiny percentage of all money spent in campaigns. Of the $2.2 billion in private money spent in the last election, only $230 million was soft, says Ms. Miller.

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