WASHINGTON — WASHINGTON -- On direct orders from President Clinton, the Justice Department yesterday backed out of a hot religious and political controversy over a Minnesota church's right to keep money put in its offering plate by a couple.
The couple went bankrupt after making those offerings, and a federal trustee -- a court official overseeing their case -- is demanding that the church hand over a year's worth of the couple's weekly tithes so that the money could be used to help pay other creditors.
The Justice Department has been supporting that demand, helping stir up a dispute that reached President Clinton. The controversy led him to tell Attorney General Janet Reno to abandon the position, and the department did so yesterday -- a half-hour before the legal battle was heard in a federal appeals court in Minneapolis.
The court fight will go on, because the trustee still wants the offerings, although that position may be weakened significantly by the Justice Department's withdrawal.
Mr. Clinton's action marked an unusual intervention by the chief executive in a pending legal case, apparently reflecting White House sensitivity over the Justice Department's taking what religious groups and politicians had denounced as a stingy view of religious freedom.
For months, some of the country's more conservative religious groups have been criticizing the president for verbal assaults on the Christian Right by top Democratic politicians. Fundamentalists had accused Mr. Clinton of encouraging those assaults in retaliation for attacks on his character.
Recently, the president has made gestures to demonstrate support for "family values." Yesterday's switch appeared to fit into that pattern.
Although a Justice Department official insisted that the switch was "a legal exercise, not a political one," some conservative religious groups immediately rewarded Mr. Clinton with praise for acting as he did.
"President Clinton has proven that he is sincerely committed to meaningful legal protection for religious exercise," said Steven McFarland, legal director of the Christian Legal Society.
The case involves Bruce and Nancy Young, who live in the Minneapolis suburb of North Park and are tithing members of the Crystal Evangelical Free Church in New Hope. For years, their lawyers said, they gave 10 percent of their income to the church in offerings.
After Mr. Young had a heart attack, the couple's electrical contracting business began to fail. But they continued to tithe. In the year before they filed for bankruptcy in 1992, they gave $13,450.
Under a federal law designed to keep people from giving away or hiding their money and then filing for bankruptcy to escape their debts, money transferred in the year before the filing of bankruptcy can be reclaimed by the trustee handling a bankruptcy case.
Trustee Julia A. Christians of Minneapolis demanded that the Crystal Evangelical Free Church hand over the $13,450, which it had put aside in escrow. A bankruptcy judge and a U.S. District Court judge upheld the trustee's demand, finding no violation of the constitutional rights of the couple or the church.
After the District Court ruling, Congress passed -- with strong support from Mr. Clinton, and his signature last November -- a law to provide added protection for religious freedom. The 8th U.S. Circuit Court of Appeals, handling an appeal by the Crystal church, has been deluged by arguments from religious groups that the trustee's demand violates the 1993 law and the Constitution.
The appeals court asked the Justice Department for its views, and the department said in April that it found no violation of the Constitution or of the 1993 religious freedom law. It said the money the Youngs gave to their church was not theirs to give but should have been used to pay debts. It also argued that, even if the trustee's demand put a burden on the Youngs' religious rights, that was outweighed by the government's interest in "protecting the property of creditors."
Yesterday, the department abandoned those arguments, saying that this was "a narrower view" of the 1993 law than the president held.