PHIL PONCE: That investigation went through a maker shake-up yesterday when Attorney General Janet Reno replaced the top federal prosecutor and the FBI agent in charge with more experienced senior personnel. For more on this we’re joined by NewsHour regular Stuart Taylor, correspondent for Legal Times and the American Lawyer, and Dan Klaidman, Justice Department correspondent for "Newsweek." Dan Klaidman, before we get into the question of the changes that the attorney general has made in the task force, what exactly are they looking at?

DANIEL KLAIDMAN, Newsweek: Well, among the principal allegations is that the Clinton administration systematically solicited contributions, millions of dollars in contributions from foreign donors, which is illegal, and that in some instances perhaps tried to disguise the source of those contributions by laundering through–laundering them through legal donors. Among the other allegations, most serious allegations, is that in exchange for political contributions contributors got certain favors, perhaps policy changes, access.

That would be a bribe, and that’s very serious but very difficult to establish the quid pro quo. Then there are the allegations involving Vice President Gore, essentially soliciting contributions from federal offices, and under some analysis what he did is illegal. And that remains to be seen. But most serious–potentially the most incendiary of the allegations is the Chinese government had a plot to subvert the American–the 1996 presidential and past congressional elections. That remains to be seen as well.

PHIL PONCE: And what exactly prompted her to make these changes? What was the motivation there?

DANIEL KLAIDMAN: Well, for sometime now Attorney General Janet Reno has been upset about the course of this investigation and some of the–the problems with the task force. Principally, she’s been upset about the pace of the investigation and some tensions that have developed between lawyers in the Justice Department and FBI agents assigned to the campaign task force.

PHIL PONCE: But the straw that broke the camel’s back?

DANIEL KLAIDMAN: But the straw that broke the camel’s back is that the task force missed a crucial piece of evidence involving Vice President Gore that he was perhaps soliciting hard money as opposed to soft money–that is to say campaign contributions that are regulated under the campaign finance laws. Reno all along has been–her basis for not appointing an independent counsel has been that he was soliciting soft money that’s not regulated, and, as a result, he did not–that’s contributions that are not regulated by the campaign finance law.

PHIL PONCE: Stuart Taylor, you want to amplify on what the Vice President is facing?

STUART TAYLOR, The American Lawyer: Yes. Well, one irony of this is that the comparatively trivial question in some ways of whether he acted illegally by making from the White House fund-raising phone calls that he very clearly could legally have made from the Democratic National Committee or his bedroom or a Holiday Inn may be what pushes this whole campaign finance investigation toward an independent counsel, which is something that the Justice Department has been trying very hard to avoid.

But the reason why it’s suddenly on that front is there is a very specific act of Congress passed for the first time as part of the 1883 Pendleton Civil Service Act–it’s Section 607 of the criminal code–that basically says it is a federal crime, punishable by three years in prison, to solicit or receive campaign contributions in a federal office. And the question is whether when Vice President Gore made fund-raising phone calls from a federal office–whether he violated that law. And that is a question that can be argued on a number of fronts, but the attorney general, since April at least, has been hanging her hat from the idea that, well, he didn’t violate that law because the money he was seeking was not hard money, i.e., not campaign money; it was soft money for party-building purposes.

That premise was blown away recently by, among other things, an article in the "Washington Post" by Bob Woodward on September 3rd based on publicly available records. The attorney general was embarrassed in the face of Congress and the country by having her entire premise for saying why we don’t need an independent counsel for Gore completely eliminated. And now she’s scrambling to figure out what to do next.

PHIL PONCE: Why was it that in public records this information was available? Here you have a task force of lawyers and FBI agents, how did they miss it?

DANIEL KLAIDMAN: Well, that’s what a lot of people in the Justice Department are trying to find out. And that’s why Janet Reno is so angry about what happened. What some people have suggested is there’s kind of a clash between investigative styles in the Justice Department–the FBI agents, who want to move quickly, who want to aggressively interview witnesses. Justice Department lawyers, who tend to be more methodical, who don’t move quite as quickly, want to build a case, and that perhaps that contributed to the problem here.

PHIL PONCE: So you’re saying that there might be a difference in cultures between the FBI and the Department of Justice?

DANIEL KLAIDMAN: That’s right. But in a case like this, which is very politically sensitive and actually is the largest Justice Department investigation that exists right now, if the attorney general is going to premise her decision, as Stuart pointed out, not to appoint an independent counsel on this soft money/hard money distinction, if you’re the Justice Department lawyers investigating the Gore allegations, you had better be pretty sure that you know that this only involves soft money and that you investigate as thoroughly as possible the possibility that there was hard money contributions which, in turn, which apparently there were.

PHIL PONCE: Stuart Taylor, now there are going to be more experienced people running the investigation and more attorneys. Should the vice president be more worried today than he was last week?

STUART TAYLOR: I think–I’m not sure about today, but he certainly has a lot to worry about because there is a plausible legal argument that people close to him have made for why he didn’t violate this law in any event. The argument basically is it doesn’t apply when the person being solicited is not in the federal office. So a phone call from a federal office to some corporate executive somewhere isn’t covered. That argument can be made, has been made by people close to Gore in the White House. The problem for the Justice Department is that it would look a little lame for them to say six months into this, oh, we just discovered that it doesn’t apply to phone calls, so never mind all that other stuff about hard money/soft money. So that’s the choice they have to figure out.

PHIL PONCE: But do you know–again with more people sort of breathing down your neck, does it put greater pressure on the vice president?

DANIEL KLAIDMAN: Oh, absolutely. I think it does put greater pressure on the vice president. And ironically, in some sense, even though she has–Janet Reno has expanded the Justice Department task force, professional career lawyers, I think that this may actually put pressure on her to appoint an independent counsel, which is the last thing this administration wants. The reason for that is the shake-up of the task force, I think, adds to the perception that the Justice Department is in disarray, and this case is not able to investigate the case properly, and that’s going to play right into the hands of congressional Republicans, who have been clamoring for an independent counsel.

PHIL PONCE: Stuart, do you agree this makes the likelihood of the appointment of an independent prosecutor more likely?

STUART TAYLOR: It does. It puts a lot of pressure, both legally and politically on the attorney general to do that. And once you appoint one for a little piece of this whole campaign finance business it’s hard to limit it to that. It might spread out and suddenly might have an independent counsel investigating for years.

PHIL PONCE: So what’s the next step now?

STUART TAYLOR: The next step for Janet Reno is to decide whether she can find some rationale for saying, no, we don’t need an independent counsel for Vice President Gore’s phone calls, and here’s the reason. The reason she gave before doesn’t work anymore. She’d need a new reason. And it would need to be a good one, or Republicans in Congress would say, well, that’s Catch-27, you know, what will your next reason be?

PHIL PONCE: Stuart Taylor, Dan Klaidman, thank you both.

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