Special prosecutor: Clinton killed case against Cisneros

White House cover-up of tax fraud by pal found in report of 11-year investigation

The Clinton White House engaged in a successful cover-up of a tax fraud case against Henry Cisneros, the former secretary of Housing and Urban Development, concludes a special prosecutor's report expected to be released tomorrow.

Special prosecutor David Barrett's spent 11 years and $23 million on the Cisneros probe and reportedly blames the Clinton administration for stonewalling and impeding justice in the case.

Cisneros was forced to admit in 1999 that he had made secret payments to a mistress. Barrett went on to investigate tax-fraud charges stemming from those payments.

Former Internal Revenue Service Commissioner Peggy Richardson, a close friend of Sen. Hillary Clinton, D-N.Y., has been linked to the efforts to squelch the probe. But, according to one report, Richardson's role was cut from Barrett's report, which went through 26 drafts, at the behest of Democratic law firm Williams & Connolly.

The law firm represents Cisneros, Bill Clinton and Hillary Clinton.

The investigation began in 1995 with Barrett examining events surrounding Cisneros's nomination. During his FBI background check, Cisneros lied about adulterous relations, his payments to a mistress, the extent of his income and his IRS tax filings.

Cisneros, a former San Antonio mayor, eventually pleaded guilty to a misdemeanor charge of lying to the FBI. He paid a $10,000 fine and was pardoned by Clinton on his final day in office.

Barrett's 428-page report charges Cisnero's mistress delayed the first half of his investigation and top Clinton administration officials impeded the second half, according to a report in the New York Sun.

In 1994, Cisneros' mistress, Linda Medlar, revealed in a TV interview that she had received tens of thousands of dollars annually from him over a period of years.

A regional IRS office in Texas began investigating possible tax violations by the Cabinet official, as did the office of the independent counsel.

Janet Reno, then attorney general, was asked by the independent counsel's office for expanded jurisdiction and access to the findings of the ongoing IRS investigation.

That's where the cover-up began, according to the Barrett report. It says Finkelstein had the IRS investigation relocated to Washington, where it was ordered closed. Radek, meanwhile, worked on Reno to make sure she did not permit the expansion of the independent counsel's investigation.

The report suggests the White House was aware of Cisneros's possible tax violations and misstatements to FBI investigators about payments to Medlar before the appointment of an independent counsel. The report says Clinton ignored the concerns of his transition team about Cisneros's relationship with Medlar because he regarded them as minor and was determined to have him in his Cabinet because he is Latino.