Investigation Into Investments Delays Vote on Alexander

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Washington--An investigation of Lamar Alexander's financial background has held up his nomination to be Secretary of Education for nearly a month, although Congressional aides from both parties said last week that they knew of no solid evidence of any wrongdoing.

Some Senate aides said late last week that they thought the investigation was nearly completed, and that the Labor and Human Resources Committee could vote on the nomination this week. Bush Administration sources said that was also what they had been told.

As of late last week, however, no action had been scheduled.

Mr. Alexander said in an interview that he was not concerned about the probe, which he termed "entirely appropriate and reasonable."

He confirmed that he had been questioned about his financial dealings.

Several committee aides acknowledged that they did not know what the investigators were looking for or whether they had found it.

Staff members conducting the probe for Senator Edward M. Kennedy, the Massachusetts Democrat who chairs the committee, are under orders to keep their work confidential. Aides said Mr. Kennedy's office had not provided any information about the financial probe to either Republicans or Democrats on the panel.

"They're keeping this close to the vest, that's for sure," a top Republican aide said. "I'm sure they feel they're being very thorough.''

To express his displeasure, Senator Orrin G. Hatch of Utah, the committee's ranking Republican, sent a three-page letter to Mr. Kennedy last week criticizing the investigation's length and asking him to allow a vote on Mr. Alexander's nomination.

"I am quite concerned, Ted, that this investigation has gone beyond what was necessary to answer any legitimate questions that may have been raised in the nominee's disclosure statement," Mr. Hatch wrote. "It appears that this inquiry has dedicated itself to finding something even when it is not there."

"After weeks of review," the letter continued, "no evidence whatsoever has turned up to justify a continuance of this exercise or to warrant any caveats or reservations placed on [Mr. Alexander's] nomination."

At a hearing on proposals for a national test system for education, Mr. Hatch expressed those sentiments in a stronger fashion, saying that investigators were doing "the syncopated smear shuffle."

In an interview, Mr. Alexander, a former Tennessee Governor now serving as president of the University of Tennessee, confirmed that he had been questioned about his investments, about seats he has held on numerous corporate boards, and about his relationship with Whittle Communications, the firm behind the controversial "Channel One" news program for schools. He helped the company launch a regional magazine that ultimately failed.

"I've led an interesting life," Mr. Alexander said. "I may be a little different in that sense."

He added: "I've played piano concerts with symphonies, written a book, launched a magazine, helped create a child-care company and other companies, been an adviser to a venture-capital company. That's more interesting for me than being a lawyer or a lobbyist."

"I guess that when a person leads a more interesting life," he said, "it raises questions in some people's minds."

Mr. Alexander acknowledged that the probe could probably be traced, at least in part, to the fact that he has made a substantial amount of money in his diverse pursuits. He told the committee that he and his wife, Honey, have a net worth, depending on how assets are valued, of between $1.8 million and $3 million.

In a March 5 article, The Wall Street Journal detailed the history of some of Mr. Alexander's lucrative investments, noting that "his political standing in Tennessee" enabled him to take part in them.

However, the article also said "there's no indication of wrongdoing on his part."

And, as a Kennedy aide noted, the story does not claim that the committee investigation was focused on precisely the investments discussed in it.

Mr. Alexander said he did not recall being asked about a deferred-compensation plan for top employees at ut, although some committee aides said they thought it was one subject of the investigation.

The plan, which was ruled illegal by the state attorney general in 1989, was supported by Mr. Alexander as Governor, and he later participated in it as president of the state university system.

He would not say whether White House officials had discussed with him the possibility that his financial dealings could be questioned during the confirmation process, saying only that they "are aware about everything about my background."

Senate aides said they did not know how the investigation got started.

According to Mr. Hatch's letter, the g.o.p. Senator first learned on Jan. 31 that Mr. Alexander's finances were being questioned, and the nominee spent an hour and a half that evening discussing his disclosure forms--filled out as part of the confirmation process--with committee aides.

At a Feb. 6 confirmation hearing, Senator Howard M. Metzenbaum told Mr. Alexander that "stories have surfaced about your financial background," but the Ohio Democrat refused requests from the nominee and other panel members to elaborate.

Mr. Metzenbaum said he wanted to investigate the matter further before discussing it publicly.

The Senator also questioned Mr. Alexander about Whittle Communications and Channel One.

During the week following the hearing, committee aides from both parties, including aides to Mr. Kennedy, said they had no idea what Mr. Metzenbaum was talking about. (See Education Week, Feb. 20, 1991.)

Most aides said last week that they assumed it was Mr. Metzenbaum who persuaded Mr. Kennedy to pursue the investigation.

"The fact that I've been asked to inquire into Mr. Alexander's finances should not be interpreted as a reflection on the Governor," Mr. Metzenbaum said in a statement released the week after the hearing.

A spokesman for Mr. Metzenbaum said that "just because he raised the issue at the hearing doesn't mean he was the one that originally raised the question."

The spokesman also said Mr. Metzenbaum had been referring to articles about Mr. Alexander's financial dealings in Tennessee newspapers.

During his comments last week,Mr. Hatch implied that it was inquiries from Democrats in Tennessee that had prompted the investigation.

"We could always have politicians in Tennessee raising little problems for the rest of our lives if we let them," he said.

Some committee aides speculated that Mr. Metzenbaum may have threatened to block the nomination if his concerns were not investigated, or that Mr. Kennedy wanted to ensure that embarrassing questions were not raised after Mr. Alexander had been confirmed.

"I would certainly doubt Kennedy wants to hurt Alexander's chances,'' a Democratic aide said. "We're not going to get anybody better."

Over the past few weeks, Mr. Alexander received two sets of questions from committee members, a standard step in the confirmation process. Only two questions, which related to Whittle Communications, touched on financial issues.

But committee aides and Mr. Alexander said he also received a third set of questions dealing solely with financial issues. The nominee said he had submitted the answers March 4, but committee aides said Mr. Kennedy's staff had not shared the questions or answers with them as of late last week. A Kennedy aide said those questions may never be made public.

Mr. Hatch's letter said the committee had also submitted additional questions to White House counsel, "which resulted in a supplementary f.b.i. report," and asked Mr. Alexander for a net-worth statement and tax returns from several years.

Mr. Alexander said he does not see any reason to be concerned.

"One has to keep in mind that, while the President sent up the nomination Jan. 22, since then there's been a [Congressional] recess and a war," he said. "Senator Kennedy has assured me that it's moving right along."

But committee aides agreed that the extended probe was unusual.

Some also noted that Lynn Martin's nomination to be Secretary of Labor was sent to the Senate at the same time and that she was confirmed on Feb. 7.

Vol. 10, Issue 25, Page 1, 37

Published in Print: March 13, 1991, as Investigation Into Investments Delays Vote on Alexander
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