GOP hints at hardball on 2 posts in Cabinet Clinton prepared to fight for Herman and Lake

THE BALTIMORE SUN

WASHINGTON -- In keeping with the post-election bonhomie hovering between Capitol Hill and the White House, President Clinton's Cabinet nominees have sailed through their confirmation hearings with ease and speed.

Until now. Two nominations -- Anthony Lake, tapped to direct the Central Intelligence Agency, and Alexis M. Herman, selected to head the Labor Department -- are being held up by Senate Republicans who are investigating entanglements that threaten each confirmation.

If they decide to play hardball, Republicans on the Senate Labor and Human Resources Committee could use Herman's nomination as a forum for airing the Clinton administration's campaign finance irregularities. She will be questioned about her role in Democratic fund-raising activities when she served as a White House official, a possible conflict.

Lake, Clinton's first-term national security adviser, who would be given Cabinet status as CIA director, faces even thornier issues. They relate to his stock portfolio and to the veracity of statements he made to Congress. Both issues have been referred to the Justice Department for review.

Republicans initially sought to avoid a dust-up, and thus were inclined to confirm all of Clinton's nominees without a fight. But some Clinton allies suspect there is an effort afoot to deprive the administration of a free ride on all of its new appointments.

Clinton, who has dropped some nominees in the past once they appeared headed for a showdown, is said to be prepared to fight for both Lake and Herman.

Several Democrats, including a Washington lobbyist who had been Clinton's liaison to Capitol Hill, have been brought into the White House to help shepherd these nominations through.

Yesterday, Mike McCurry, the White House spokesman, said he thought Lake would clarify the questions dogging his nomination, and, "at the end of the day, when he addresses these matters, the senators will be satisfied and he will be confirmed."

And McCurry said of Herman: "The president's convinced that she's an excellent nominee, and we would suggest that she'll be confirmed as well."

But Republicans have been flashing danger signs about both nominees. Sen. Richard C. Shelby of Alabama, chairman of the Senate Intelligence Committee, said Thursday that the Lake hearings would be postponed from Feb. 11 to Feb. 25 so the Justice Department can examine the issues.

In a statement, Shelby said, "It would be premature and shortsighted for this committee to pre-empt the Justice Department's criminal investigation into Mr. Lake's handling of his investments, as well as allegations that Mr. Lake lied to Congress."

Possible conflict

Investigators in the Justice Department's public integrity section are looking into a possible conflict of interest in Lake's ownership of energy stocks while he was national security adviser. The energy stocks posed a potential conflict for Lake because of his role in setting U.S. policy in the Middle East, home to the world's biggest oil reserves.

Late last year, Lake disclosed that he had failed to sell $300,000 worth of energy stocks for two years, even after being urged to do so by the White House counsel's office. He says he mistakenly believed the stocks had been sold by his broker.

More recently, Lake acknowledged yet another energy stock purchase: Without his knowledge, his broker bought and then sold stock in a natural-gas company.

Perhaps as important as the Senate Committee's delay is the harsh tone of Shelby's statement, indicating that Intelligence Committee Republicans have no intention of cutting Lake any slack.

This contrasts with the courtly welcome given by Republican senators to Madeleine K. Albright, who was speedily and unanimously confirmed as secretary of state, and one of their own, William S. Cohen of Maine, now secretary of defense.

Lake also faces questions about whether he deliberately failed to notify Congress about the administration's acquiescence in the supply of Iranian arms to Bosnian Muslims during the Balkan war.

Lake was among top administration officials who settled on a policy of not trying to block the arms transfers to the Bosnians, who were outgunned by the Serbs. This contradicted the administration's public stance of upholding a United Nations arms embargo.

When they learned of the Iranian shipments, several members of Congress expressed outrage that the administration was allowing the radical regime in Tehran to gain a foothold in central Europe.

American spy agencies, which operate largely in secret, have drawn quiet but intense scrutiny from congressional oversight committees in the past decade.

Lake has won support from two key Republicans. Robert Gates, a CIA director in the Bush administration whose own confirmation process was a grueling affair, published an opinion piece in the Wall Street Journal calling Lake "a capable senior official of integrity."

Sen. John McCain, an Arizona Republican who is an important voice on national security, cited Gates' column in a letter to colleagues urging support for Lake.

For her part, Herman, a longtime Democratic activist, paid a courtesy call yesterday to the Senate majority leader, Trent Lott. Early on, the Mississippi Republican said he favored her selection, though he has recently expressed reservations.

Herman's hearings before the Senate Labor and Human Resources Committee are unscheduled. The committee has said needs time to sift through documents released by the White House that pertain to Herman's political activities while she was chief White House liaison to constituent groups.

White House 'coffees'

One of Herman's problems is the series of 100-plus White House "coffees," organized by the Democratic National Committee, where Clinton mixed with party donors. At one social, in May 1996, 17 top banking executives met with DNC and White House officials as well as Eugene A. Ludwig, the comptroller of the currency, the nation's top banking regulator.

Clinton acknowledged this week that attendance by regulators at such political gatherings was inappropriate. The White House conceded that Herman's office had added Ludwig's name to the guest list. A White House spokesman said Herman mistakenly thought the coffee was an official, nonpolitical meeting. When she found out it was sponsored by the Democratic Party, she decided that her own attendance would be improper but did not notify Ludwig, the spokesman said.

But in her meeting with Lott yesterday, Herman insisted she did FTC not invite Ludwig to the coffee, the majority leader told reporters.

Republicans are also examining Herman's role as chairwoman of an "African-American Working Group" that sought to bolster support among African-Americans for Clinton's re-election. Lott has said her work comes "awfully close" to violating the Hatch Act, which bars fund-raising and restricts other political activity by federal employees.

Democrats on the labor committee are rallying to support Herman, even as they, too, sift through the White House documents. Sen. Edward M. Kennedy of Massachusetts, the senior Democrat on the panel, said the documents show that Herman's activities were "legitimate and carried out under clear guidelines."

Pub Date: 2/01/97

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