RENO REBUFFS GOP CALL FOR PRIVATE INQUIRY.

Byline: David Johnston The New York Times

Attorney General Janet Reno rejected on Monday angry Republican demands for an independent prosecutor to investigate the financing of President Clinton's re-election campaign, telling Congress that career prosecutors at the Justice Department are capable of carrying out the inquiry.

Reno's decision, although expected, inflamed Republican lawmakers who have said in recent days that Reno herself should be summoned to Congress to testify about her unwillingness to refer the tangle of fund-raising allegations to an outside prosecutor.

Reno announced her decision in a letter to Sen. Orrin Hatch, R-Utah, the chairman of the Senate Judiciary Committee, who last month wrote to Reno seeking an independent prosecutor. ``I am unable to agree, based on the facts and the law, that an independent counsel should be appointed to handle this investigation,'' Reno said.

Reno's decision plunged the attorney general more deeply into the furor surrounding how President Clinton and his campaign aides raised money for his 1996 re-election. Republicans have accused her of attempting to shield potential subjects from a rigorous investigation by keeping the inquiry under the purview of the Justice Department instead of seeking an independent counsel.

In her refusal letter, Reno relied on a provision of the independent counsel law that requires her to move toward the appointment only if an internal review finds specific evidence of a federal crime committed by any one of about two dozen senior administration officials, including the president, vice president and Cabinet officers.

Reno said Justice Department lawyers had decided that none of the issues raised by Hatch necessitated the appointment of an independent prosecutor. Among the matters that he said warranted further investigation were fund raising on federal property, misuse of government phones and credit cards, foreign efforts to influence policy and coordination of expenditures between the White House and the Democratic National Committee.

She said ``we have no specific, credible evidence that any covered White House official may have committed a federal crime in respect of any of these issues.''

Republican leaders reacted with fury. The Senate majority leader, Trent Lott, called her decision ``inexcusable.'' House Speaker Newt Gingrich, speaking at a fund-raising event in York, Pa., said: ``As a historian, I do not see any possible way for the attorney general to defend the decision not to have an independent counsel,'' He said her reluctance raised questions about ``whether she is the protector of the president or the enforcer of the law.''

Rep. Henry Hyde, R-Ill., who is chairman of the House Judiciary Committee, said Reno had erred. ``An investigation of this magnitude, with its obvious political ramifications, requires that the political appointees of the Justice Department turn the investigation over to an independent counsel,'' he said.

Reno chose not to invoke a discretionary section of the law that permits her to go forward with the appointment of an independent prosecutor to avoid a conflict of interest for the Justice Department.

Before she could do so, she said, she must conclude that ``there is a potential for an actual conflict of interest, rather than merely an appearance of a conflict of interest. The Congress expressly adopted this high standard to ensure that the provision would not be invoked unnecessarily.''

Some Republicans sharply disputed Reno's reading of the law. ``There is a clear conflict of interest when the attorney general appointed by the president is called upon to investigate possible illegal acts by the vice president or other high-ranking administration officials,'' Lott said.

Reno's decision marked the fourth time that the Justice Department has spurned a request for the appointment of an independent prosecutor. The earlier rejections followed the same line of reasoning that Reno invoked Monday, saying there was no specific evidence a federal crime had been committed.

The attorney general has been dogged by criticism over appointments of independent counsels since she took over at the Justice Department in 1993. She barely survived into Clinton's second term, in part, because of complaints by White House aides that she had been too quick to refer politically touchy matters to independent prosecutors.

But in the campaign fund-raising case, Reno has seemed determined to avoid such an appointment and to keep the inquiry in the hands of prosecutors who report to her. Reno's reluctance has brought bruising criticism from Republicans who have accused her of paying back the White House for keeping her in the Cabinet, an allegation that her aides have repeatedly denied.

On Monday, White House officials reacted quietly to Reno's action. ``Our views on this are well known,'' said a White House spokesman, Barry Toiv. ``We believe that the decisions on this ought to be based on the law.''