Heritage of Watergate

A special prosecutor may have to probe the Jordan affair

Did Hamilton Jordan really snort cocaine on that 1978 visit to Manhattan's far-out Studio 54? The possibility is growing stronger that a special prosecutor will have to be appointed to investigate the evening's entertainment enjoyed by the White House chief of staff. Under the stringent provisions of the 1978 Ethics in Government Act, there may be no other way to determine whether it is Jordan or his accusers who are telling the truth.

Two new witnesses turned up last week. One, a show business public relations agent named Barry Landau, provided the first corroboration of part of the story -- though not the crucial part -- told by lawyers for Steve Rubell and Ian Schrager, two own ers of the celebrated disco. They are under indictment for tax evasion, and Schrager has also been charged with possession of cocaine. The White House has accused them of concocting false charges against Jordan in order to bargain for leniency. Landau, who said he had met Jordan at various receptions and dinners, has no such obvious ax to grind, though he is a crony of Rubell's. Said he, in a sworn statement given to the FBI:

"I was at Studio 54 when I ran into Hamilton Jordan ... He said he wanted to see where all the action was, where the famous basement caves were and if he could obtain some cocaine ... Shortly thereafter Steve Rubell appeared, whom I proceeded to introduce to Ham and his lady friends. A young man who is referred to as Johnny C and whom I know by sight and reputation as the man who always seems to put his fingers on such items as Ham had requested, suddenly appeared.

They [Jordan, Rubell and Johnny C] disappeared for a while." Rubell had earlier said that during the disappearance Johnny C slipped Jordan some coke and Rubell watched him snort some.

Last week, however, the FBI found Johnny C. TIME learned two details of his statement: he said his name is John Conaghan--and he denied ever giving Jordan any cocaine. That contradicted a statement he allegedly made on tape to Studio 54's owners. The FBI interviewed four other people who had been with Jordan at Studio 54; none had observed any use of cocaine.

However the Studio 54 incident turns out, Administration supporters fear that new accusations of White House aides using drugs may come from other sources.

Since early in the Carter Administration, in fact, there has been talk in Washington of such practices. Indeed, the matter came up explicitly in July 1978, when Dr.

Peter Bourne, health policy adviser to the White House, had to quit his post after he had improperly prescribed a drug for a friend. At the time, sources charged that Bourne himself had used cocaine. He told a New York Times reporter that there was "a high incidence" of marijuana and occasional cocaine use among members of the White House staff.

Jordan has denied all the Studio 54 charges, and the case is hardly the kind Congress had in mind when it drafted the Ethics in Government Act. The law began to take shape after President Nixon fired Watergate Special Prosecutor Archibald Cox. Congress set out to specify in detail the powers and tenure of a special prosecutor.

As finally passed, the law compels the Attorney General to begin a preliminary investigation whenever he "receives specific information" that a high federal official (the President, Cabinet Secretaries, senior White House staffers, the director of the CIA" and others) "has committed a violation of any federal criminal law."

The only exception is for "a petty offense," punishable by less than six months in jail. Simple possession of cocaine can draw a one-year sentence. The Attorney General must --not may--ask a panel of three federal judges to appoint a special prosecutor within 90 days unless the preliminary investigation determines the charges to be so flimsy that they do not warrant a deeper probe.

Trouble is, say Justice Department officials, there is almost no way for a preliminary investigation to establish that. Under the department's interpretation, it cannot subpoena witnesses, for example, or enter into plea bargaining. Both powers are granted to the special prosecutor. In consequence, top Justice officials fear, they may be forced to appoint a special prosecutor in the Jordan case.

Critics charge that the law practically invites opponents to smear high officials by making charges that, although false, cannot be disproved during a preliminary investigation. Defenders of the law argue that in some cases only exoneration by a special prosecutor can free a Government leader of the suspicion that allegations against him were covered up. But Justice officials last week were admitting that the very appointment of a special prosecutor would convince many Americans that Jordan had done something wrong.

Another case involving Jordan last week showed why a special prosecutor is sometimes needed. The Justice Department has impaneled a grand jury to investigate charges by a Georgia businessman that fugitive Financier Robert Vesco attempted to get Jordan and Charles Kirbo, a Carter adviser, to block his extradition from the Bahamas to the U.S., where Vesco faces trial for fraud. Since the probe began before the Ethics Act was passed, the Justice Department decided that the law did not apply. Last week Ralph E. Ulmer submitted to Federal Judge William B. Bryant his resignation as foreman of the grand jury and accused the Administration of "duplicity." Among other things, he said, "information was withheld from the grand jury" and "a witness was encouraged to be less than candid with the FBI." Whatever the truth of these charges, they are exactly the kind of ugly accusations that appointment of a special prosecutor is supposed to dispel. sb

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