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A report and discussion on the developments in the Starr investigation and the Paula Jones case.

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KWAME HOLMAN: Independent Counsel Kenneth Starr had two announcements for reporters on the steps of a federal courthouse in Washington this afternoon.

KENNETH STARR, Independent Counsel: Just awhile ago I sent a letter to Attorney General Reno that responds to the letter that I received last week from the deputy attorney general of the United States. In that letter, which I will only briefly describe, we suggest that we seek mechanisms that will ensure a full and investigation of the facts in a fair way, in a comprehensive way that will promote public confidence in the administration of justice, and that we explore that in a careful and thoughtful way with the Justice Department.

KWAME HOLMAN: Starr's second letter was to the president of Pepperdine University telling him Starr would not serve as dean of the law school and School of Public Policy next year.

KENNETH STARR: As you know, I had eagerly looked forward to spending many happy years at Pepperdine after completing my duties as independent counsel. The work of that office, however, has expanded considerably, and the end is not yet in sight.

KWAME HOLMAN: Starr's plan to serve on Pepperdine's faculty had come under criticism from President Clinton's legal team. They said Pepperdine's new school of public policy got startup money from conservative publisher Richard Melon Scafe, an outspoken critic of the Clinton administration. Scafe and other conservative activists also allegedly gave money to one of Starr's witnesses in the Whitewater investigation, Judge David Hale. The Justice Department has questioned whether Hale's testimony was tainted because of the alleged payments. The president's supporters said as long as Starr has a connection to Pepperdine, he can't fairly investigate Hale. Pressed by reporters today, Starr said his decision not to go to Pepperdine had nothing to do with conservative philanthropist Richard Melon Scafe.

KENNETH STARR: First of all, let me say that with respect to the individual who you have named, I have never met him, I have never talked to him, I had no arrangement, implicit, explicit, direct, or indirect with him. I am aware of the commentary with respect to the relationship and individuals will come to their own conclusions about that. But I had to make an assessment in light of my commitment to the university. And I felt that I had a stewardship, fiduciary duty to the university. And this is not of new standing, that it was my view and has been my view that I owe it to the university to either be there, or if I can't be there, to say that, and for them to come to their conclusion collaboratively with me. And as a result of those--I'm sorry about the noise--but as a result of those collaborative discussions, I came to a decision and actually two decisions. And I've sent those with the letter--and the letter, by the way, will be publicly available, as well.

KWAME HOLMAN: In his letter to Attorney General Janet Reno Starr said he wants to handle the investigation of the alleged payment to Hale, as well as the investigations into Whitewater and the Monica Lewinsky matter.

REPORTER: Could you give us some sense of the progress that has been made in the Lewinsky investigation?

KENNETH STARR: It's very difficult to put a percentage, but our level of activity has been extremely high. I would say it's been extraordinarily high. And the grand jury here in this jurisdiction has been asked to set additional days, and I would simply say that we are very satisfied with the progress that we have made, which is substantial.

KWAME HOLMAN: Starr also was asked about the Paula Jones announcement that she will appeal the dismissal of her case against the president.

KENNETH STARR: Well, as I said from the outset, and I think as the judge has made clear in Arkansas, Judge Wright has made clear, this matter is separate and independent of anything that happens in the civil litigation. We are charged by the attorney general of the United States with investigating whether criminal offenses occurred in civil litigation. Those offenses--and there is the presumption of innocence that those offenses identified by the attorney general of the United States are serious offenses. And you know what they are. And we're moving quickly to assess that.

JIM LEHRER: For some differing commentary on all of this now Lanny Davis, a former special counsel to the President--but he's not speaking officially for the White House tonight--and George Terwilliger, who was the deputy attorney general during the Bush administration. Both are now in private practice. Let's take these things one at a time. The end is not in sight. Some are suggesting that's the most important thing Kenneth Starr said today. Would you agree?

GEORGE TERWILLIGER, Former Bush Deputy Attorney General: Well, I guess because of some of the reports, Jim, that have come out over the last few days that has taken on great significance, but really when you think about it that should come as no great surprise. We have several witnesses for whom the White House has asserted executive privilege. They're now creating a new privilege concerning the testimony of Secret Service officers. This is wrapped up in litigation, litigation which, in my judgment, could be avoided through some creative needs but, nonetheless, is in litigation now. Litigation takes time, so the fact that Starr expects this to go on for a while I don't think should come as a great surprise.

JIM LEHRER: There had been reports, Mr. Davis, that maybe Mr. Starr was preparing to deliver a report to Congress, possibly even by the first of June. But that clearly is not in the case, at least that you could read that that way, is that right?

LANNY DAVIS, Former Clinton White House Counsel: Well, it's possible that he would still deliver a report, which I think most people have seen as a political context to that report. The Republican leadership in Congress has certainly already declared that the report could damage President Clinton so it's likely to be possible to do that and still continue his investigation. It's not a surprise that after all of this time--three or four years now--and over $40 million--that Mr. Starr is still continuing an investigation. To me it suggests that after all this time and money he still doesn't have anything to prosecute.

JIM LEHRER: But what about the delay points that Mr. Terwilliger pointed out?

LANNY DAVIS: Well, I think when a prosecutor seeks an investigation to ask attorneys to violate a privilege, as he did with Mr. Carter in his advice to Ms. Lewinsky, when he seeks in other instances to have Mr. Blumenthal describe what he said to the press about Mr. Starr and his prosecutors and suggest the possibility of overriding First Amendment privileges, Mr. Starr makes a judgment. But it's worth doing that, and that judgment then leads to a possible response, I think a responsible response, to resist overriding those privileges. The Secret Service matter that George rightfully says has never been established as a privilege, nevertheless, establishes a very important principle of protecting this and all future business. Mr. Starr's insistence on asking Secret Service agents questions regarding private conduct of a president will affect this administration and administrations for all ages. It should be resisted. That's Mr. Starr's judgment. It may take longer in order to sort that out in the courts.

GEORGE TERWILLIGER: The American people aren't stupid, Jim. I think they are going to recognize, as this unfolds over the next few months, and we hear more about what is actually going on in the court, is there is some contrast to the White House saying this should be over, let's get this done, the president needs to get on with the people's business, and the White House lawyers taking positions such as we just heard from Lanny that these privileges are important matters of principle, they need to be resolved. Why not resolve these privileges? Let's take the Secret Service as an example. By getting a couple of prominent American lawyers, perhaps former jurists, people with a law enforcement background, former attorneys general, submit the question to them. Let both parties agree that they'll work something out that secures the Secret Service protective function and the future of that, and at the same time gets the grand jury the information it's entitled to have.

JIM LEHRER: Let's move on to another issue that was raised today, and that's the David Hale case. Do you believe that Ken Starr can investigate those charges impartially, the charges that Hale took money from Mr. Scafe while he was a witness for Mr. Starr?

GEORGE TERWILLIGER: I believe that Ken Starr is a person of integrity who could do that. I don't believe he should do that because there is an appearance at this point of conflict. I also think that the Justice Department is between a rock and a hard place because I don't think they can do it either, given the independence of the independent counsel. Again, I think this is something that calls for a creative solution along the lines of what Starr has at least suggested in his letter to the Justice Department today. Let's get together, and I think what he's suggesting is let's find a person or a mechanism by which we can both agree that this can be looked in to.

JIM LEHRER: What do you think ought to be done?

LANNY DAVIS: Well, I agree with what George just said, but I really asked the question, are we talking about delaying an investigation? Why does Mr. Starr want to hold on to this Hale investigation apparently so much? What is motivating him when there is this appearance problem? The American people isn't stupid, as George said. Mr. Starr is saying about his only witness against President Clinton, who he recommended leniency, that he can objectively investigate that witness. He has a prosecutor, Mr. Yewing, who has already declared that there's no evidence. This is obviously a conflict. Why is he so motivated to hold onto this investigation? It makes me wonder.

JIM LEHRER: Just for the record, let's say--let's let everybody understand. Judge Hale is not involved in the Monica Lewinsky part of this investigation.

LANNY DAVIS: Correct.

JIM LEHRER: He's involved in the Little Rock investigation, involved in the original Whitewater thing, very complicated, and we're not going to go into it. Okay. The other thing that came up today, of course, is the Pepperdine decision. How do you feel about that? Does that remove any kind of conflict of interest, that these two things that have been raised because they're the connection, in both--in both cases was Mr. Scafe?

GEORGE TERWILLIGER: I don't think we have time to debate whether there was conflict or not, but clearly an appearance of one had been raised, if nothing else, and I think it does remove that. But I think we can take Ken Starr at his word about this. I hope we've not become so cynical that every public pronouncement by someone involved in this has some ulterior motive. I think he realizes that because of the litigation, because of witnesses who were reluctant to testify, because of expanded jurisdiction, this is going to go on for a while, and he owes it to Pepperdine to let them get on with their business.

JIM LEHRER: Do you see anything more than that?

LANNY DAVIS: I do, Jim. First of all, he resigned from Pepperdine last March 19th. This is the first time we've learned about that resignation. Obviously, back then he saw a serious problem with Mr. Scafe that he didn't share with us. Secondly, there's a continuing--

JIM LEHRER: You mean, because his failure to make it public, you mean?

LANNY DAVIS: Yes, and because there's apparently an ongoing conflict with FBI agents after Mr. Starr became special prosecutor, not just before, who accompanied Mr. Hale to an individual named Crocker Doshier, who received money sourced by Mr. Scafe. The continuing conflict is here, and, again, I raise this question: Why doesn't Mr. Starr save the time, save the press conferences that he held today, simply hand this back to the Justice Department, refer it to them, and let the Office of Professional Responsibility investigate why is he intent on holding on and controlling this investigation of the only witness that he has against President Clinton? It makes me wonder.

GEORGE TERWILLIGER: The answer to that is really quite simple. The law requires the Justice Department not to take the lead on this because it's a matter that concerns the jurisdiction of the independent counsel. And frankly, it's one of the other weaknesses of the whole independent counsel structure.

JIM LEHRER: All right. The other development of the day was Paula Jones' decision to appeal the dismissal of her suit against the president. As a legal matter, how would you assess her chances of winning?

LANNY DAVIS: Well, the judge's decision was very factual and was based upon case law.

JIM LEHRER: The original--

LANNY DAVIS: Judge Wright, who is an appointee by President Bush and a conservative jurist, found as a matter of fact that according to Paula Jones's own testimony, there is no harm that she could state resulting from the alleged incident and according to Arkansas law, no case could be made even enough to resist a summary judgment. Now that decision was written very meticulously, I think comprehensively in its analysis of the law, and appellate court I think will have difficulty based upon the analysis that I've read in overturning that decision.

JIM LEHRER: How do you read it?

GEORGE TERWILLIGER: Always more difficult to carry the burden on appeal than not. In this particular instance there's two things that I think ought to be kept in mind as this goes forward and we assess the likelihood of some change. One is that this is what's known as a de novo review, that is, three judges on an appellate panel take the same broad look at the trial judge did, basically a second bite of the apple for the appellant. Secondly, on the issue of whether or not there was emotional distress as a result of the alleged behavior by then Governor Clinton, it seems to me--and I'm not an expert in this field, Jim--but it seems to me that the facts that have been adduced on that would lead one to the conclusion that if you believe some of the testimony, there was emotional distress. If you believe other of the testimony or disbelieve some, then there wasn't. That sounds like a jury question to me, and I think that may be something the court of appeals will take a very close look at.

JIM LEHRER: Let's assume for discussion purposes that somebody's going to win or lose before the court of appeals and that loser is going to take it to the Supreme Court or whatever. How long are we talking here before this thing could be resolved before a decision is even made whether there's, in fact, going to be a trial?

LANNY DAVIS: At least a couple of years, I believe.

JIM LEHRER: Why does it have to take a couple of years?

LANNY DAVIS: The court of appeals will require a schedule for briefing, as George mentioned, a de novo review of the entire record takes time. There's a docket that is extensive, and then once the appeals are decided at the court of appeals level. The Supreme Court has its own time periods for submission of briefs, hearing of oral arguments, and at least a couple of years. And may I just say one other thing about this appellate process: the de novo review that George describes does go into the record; but there has to be an abuse of discretion by the district court judge. The appellate courts are usually--not always--but usually deferring to the judgment of the district court, who has reviewed the record in great detail. And in this case the law on the subject of emotional distress does require more than a single isolated incident. Not all incidents are necessarily compensable in a courtroom, and in this case Arkansas law is pretty clear that even alleged incident, as described by Ms. Jones, is not actionable under Arkansas law. And I think Judge Wright was right on that subject.

JIM LEHRER: You see it differently?

GEORGE TERWILLIGER: Well, I--let me just address the timing issue, Jim. I think that one thing that we need to keep in mind, we're talking about both of these stories in the same segment of a report. These are separate issues, and it may not be a bad thing for the country, albeit as difficult as it might be for the litigants if this does take a while and gets pushed to the side a little bit, while some of the other, more, perhaps more important and more pressing issues in terms of the Starr investigation are resolved.

JIM LEHRER: So two years wouldn't be too bad a thing for the country, is that what you're suggesting?

GEORGE TERWILLIGER: I think--I'm trying to find the silver lining.

JIM LEHRER: All right. Gentlemen, thank you very much.

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