WASHINGTON -- Ending one of America's most famous and damaging lawsuits, President Clinton agreed yesterday to pay Paula Corbin Jones $850,000 to withdraw her sexual misconduct case. The president made no apology and admitted nothing.

By settling the case that had led to the Monica Lewinsky sex scandal, Clinton put a stop to a legal challenge that threatened to run on for months and might have gone to trial in a flood of more negative publicity.

Jones stands to receive some money -- after her lawyers take an undetermined share -- from a lawsuit that had been dismissed and whose long-term prospects were doubtful, even if it had been revived on appeal and gone to trial.

Her husband, Steven Jones, told reporters outside his Long Beach, Calif., condominium: "Paying a substantial amount of money makes a statement on its own. This is Paula's reputation that we were fighting for."

The legal considerations that drove each side to a final deal were not discussed publicly yesterday. But it appeared that each side had calculated that the cost of going on -- mounting legal bills and the risk of suffering a decisive setback -- made it worthwhile to call a halt.

No president before Clinton had ever been sued over personal conduct, and none had ever faced a lawsuit that threatened to lead to impeachment and removal from office.

"The president has decided he is not prepared to spend one more hour on this matter," said Robert S. Bennett, his attorney in the case. Bennett saidthe president "remains certain" that Jones' claim was "baseless."

"It is clear," his lawyer said, "that the American people want their president and Congress to focus on the problems they were elected to solve. This is a step in that direction."

'It's over, I'm glad'

Jones, upon learning of the settlement, cried and said, "It's over, I'm glad," according to her spokeswoman, Susan Carpenter-McMillan. The spokeswoman's husband, Bill McMillan, one of Jones' attorneys and a negotiator of the settlement, said: "Paula is tickled to death. She's ecstatic, as happy as any one individual can be."

It may be too soon to know whether the deal gives Clinton and his aides more freedom to maneuver in the House impeachment inquiry.

Case led to Lewinsky probe

Jones' lawsuit had led directly to the explosive Lewinsky sex scandal that for months had threatened to end Clinton's presidency, a scandal that still has not been resolved. An impeachment inquiry is to resume next week.

Carpenter-McMillan praised Jones' role in bringing on the scandal that has engulfed Clinton: "This nation owes Paula Jones a real thank-you. I think she exposed him for what he was. There would have been no impeachment, no Monica Lewinsky, no Kathleen Willey -- there would have been nothing without the Paula Jones case."

Jones' lawyers, with help from others, discovered Lewinsky and the sexual relationship she had with Clinton during a search for women with whom Clinton had been intimate. In January, testifying under oath in the case, the president denied having had sexual relations with Lewinsky.

Within days, independent counsel Kenneth W. Starr, using tapes that Lewinsky's friend Linda R. Tripp had made of Lewinsky's telephone calls discussing the sexual episodes, launched his investigation of the Lewinsky matter.

Settlement details

The deal accepted yesterday came in the form of a settlement signed by the lawyers, with Clinton and Jones due to sign papers later. Under the deal, Clinton promised to pay the $850,000 within 60 days.

The agreement noted that the sum is "in full satisfaction of all claims" by Jones, and stressed that there were no side deals between them. The agreement says explicitly that it does not amount to "an admission of liability or wrongdoing by any party."

There was no public statement last night about where Clinton would obtain the money to pay to Jones, though the Associated Press quoted an unnamed source involved in the negotiations as saying that about half the money would come from an insurance policy and about half from a legal defense fund that now totals more than $2 million in donations.

The settlement comes 4 1/2 years after Jones sued Clinton over what she said was a crude sexual advance he made toward her in a Little Rock, Ark., hotel room in 1991. At the time, Clinton was the Arkansas governor and Jones was a low-level state employee. She said the incident occurred after she was summoned to Clinton's hotel room by a state trooper.

Clinton steadfastly denied that the incident occurred, and Bennett denounced the lawsuit as "tabloid trash."

The out-of-court settlement will end Jones' effort to have an appeals court revive her case.

U.S. District Judge Susan Webber Wright in Little Rock dismissed the case on April 1, saying Jones had not shown that she suffered any legal wrong. Jones appealed. At an Oct. 20 hearing, the 8th U.S. Circuit Court of Appeals appeared to be leaning toward giving Jones another chance to make her case before a jury in federal court in Arkansas.

Appeal may have played role

The prospect of the case being revived may have led Clinton to agree to settle even though her case had been dismissed, and to settle at a price somewhat higher than his last offer -- $700,000. The $850,000 that he promised to pay was $100,000 below the last request made by Jones' lawyers. Originally, Jones' lawsuit sought $700,000, which was later cut to $525,000.

While the settlement gave her considerably more than the lawsuit formally demanded, she has incurred millions of dollars in debts to her lawyers. Neither she nor her husband is employed. Her husband has said in public statements that the president should be required to provide a high settlement.

Hirschfeld deal off table

Jones at one point had asked for as much as $1 million from the president, together with $1 million promised by New York real estate developer Abe Hirschfeld, who volunteered to help bring about a deal. Hirschfeld had said he would deposit the money in a bank for Jones, but he did not.

The $1 million offer by Hirschfeld had been taken off the table before the final deal was struck, according to Clinton attorney Bennett and Jones attorney McMillan. Bennett had maintained that the president would never agree to a "package deal" involving Hirschfeld's money. Bennett said he had a written promise from the Jones side that the Hirschfeld money was "no (( part of any settlement."

The settlement agreement, as made public, says nothing about the Hirschfeld money. As a result, one of Jones' former attorneys, Joseph Cammarata, said last night that Jones would not be barred by the Clinton deal from negotiating separately with Hirschfeld.

McMillan said yesterday that he had suggested the $850,000 settlement figure to Bennett on Thursday. It was unclear last night what part of the money would go to Jones and what part to two teams of lawyers who have handled her case over the past 4 1/2 years.

"We're all reasonable people and we can work something out," Cammarata said.

Apology demand dropped

Weeks ago, Jones had dropped her demand for an apology from the president -- an apology that Bennett had said the president would not make.

It is unclear whether an agreement could have been reached before Jones withdrew her demand for an apology, although the two sides tried repeatedly to reach a deal earlier. Jones had insisted that an apology was all she wanted, but there apparently was never any prospect of that.

Clinton and Bennett had received much unsolicited advice from lawyers and politicians to settle the case years ago. But for the first three years the case was pending, Clinton fought in court to have it postponed until after he had left office.

That challenge ultimately failed in a unanimous decision by the ,, Supreme Court last year. The court refused to delay the case and thus set the stage for Jones' lawyers to start gathering evidence about Clinton's liaisons with other women -- including Lewinsky -- to bolster her claim that she was a victim of his sexual overtures.

After the agreement yesterday, one legal issue appears to remain open: whether Wright, the judge, will carry out a threat to hold Clinton in contempt of court for having denied under oath in January that he had a sexual relationship with Lewinsky.

Jones lawsuit: A chronology

Key events in Paula Corbin Jones' case against President Clinton:

1994

May 6: Jones files a civil lawsuit against Clinton in U.S. District Court in Little Rock, Ark., seeking $700,000 in damages for "willful, outrageous and malicious conduct" at the Excelsior Hotel in Little Rock on May 8, 1991.

Aug. 10: Clinton files a motion to dismiss Jones' lawsuit on grounds of presidential immunity.

Dec. 28: U.S. District Judge Susan Webber Wright rules that a trial cannot take place until Clinton leaves office, but fact-finding procedures can go forward.

1995

Jan. 17: Jones asks the 8th U.S. Circuit Court of Appeals in St. Louis to reverse the decision postponing a trial.

Sept. 14: A three-judge appeals court panel hears Clinton's lawyers argue that allowing the Jones case to proceed while the president is in office would distract him from more important matters.

1996

Jan. 9: The appeals panel rules Jones' lawsuit can go to trial.

May 15: Clinton asks the Supreme Court to delay the case until he leaves office.

June 24: The Supreme Court agrees to consider whether Jones' lawsuit should be delayed. The move puts the lawsuit on hold

until after the November election.

1997

May 27: The Supreme Court rules the lawsuit can move ahead.

Aug. 22: Judge Wright sets a May 27, 1998, trial date.

Sept. 9: A federal judge allows Jones' lawyers to withdraw from ** the suit but directs the case stay on course for the May trial date.

Dec. 8: Jones reduces the damages sought to $525,000 and drops defamation claims against Clinton's codefendant, former bodyguard Danny Ferguson.

1998

Jan. 7: Former White House

intern Monica Lewinsky signs an affidavit for Jones' attorneys in which she says she never had a sexual relationship with

Clinton.

Jan. 16: Whitewater Independent Counsel Kenneth W. Starr gets permission from a three-judge federal panel to expand his investigation of Clinton's business dealings to include whether an effort was made to suborn a false statement from Lewinsky.

Jan. 17: Clinton is questioned by Jones' attorneys for six hours.

Feb. 17: Clinton's lawyers file a motion in Little Rock again asking Judge Wright to dismiss the lawsuit.

March 13: Arguing against the dismissal motion, Jones' attorneys file documents with the court alleging that Clinton made sexual advances against several women and took part in a "vast enterprise to suppress evidence."

March 20: Clinton's lawyers

contend Jones and her witnesses lack credibility and that former White House volunteer Kathleen Willey's allegation of an unwanted sexual advance

is irrelevant.

March 28: Jones' attorneys file court papers contending Clinton obstructed justice by withholding letters, notes and telephone messages

between the president and Willey until after she accused him on

television.

March 31: Jones' lawyers ask a federal appeals court for permission to use evidence from the Lewinsky case in her lawsuit.

April 1: In Little Rock, Judge Wright throws out Jones' suit.

Oct. 20: Three judges of the

8th U.S. Circuit Court of Appeals hear arguments in Jones' appeal for reinstatement of her lawsuit.

hTC Oct. 31: Jones accepts a

conditional $1 million offer from New York real estate tycoon

Abe Hirschfeld to settle her

lawsuit against the president,

an offer which she later rejects.

Nov. 13: Clinton and Jones settle the case for $850,000 with no apology or admission of guilt.

$ THE ASSOCIATED PRESS

Pub Date: 11/14/98