The US Justice Department is reviewing President Clinton's fund-raising activities during the 1996 election campaign, in what could be the first step toward the naming of an independent prosecutor, officials said.
"We understand that the Department of Justice is in the process of determining whether a preliminary investigation is warranted," said a White House statement issued yesterday in California, where Mr Clinton was travelling.
The Attorney General, Ms Janet Reno, ordered the 30-day review of Mr Clinton's fund-raising in the ever-widening affair that includes hearings by the Republican-led Congress into the Democratic party's practices.
If Ms Reno finds further investigation is needed, she may then order a 90-day inquiry to determine whether an independent counsel should be appointed. It would be the first time Mr Clinton has been the focus of the escalating allegations of illegal campaign finance activities.
The statement from the White House special counsel, Mr Lanny Davis, said his office was in full co-operation with the Justice Department investigation and would provide all information requested. "We are confident that no laws were broken," he said.
Prof Roy Schotland of Georgetown University, a specialist in election law, said it was "not a remote possibility" that Ms Reno would eventually name a special prosecutor to investigate Mr Clinton. "It's got reasonably good odds," he said.
Earlier this month, Ms Reno ordered a similar 30-day review into Vice President Al Gore's fundraising role. Mr Gore, who is expected to run for president in 2000, hired two private lawyers on Friday to represent him in the Justice Department investigation, an unusual step for a sitting vicepresident.
At issue is whether Mr Clinton or Mr Gore used their White House phones to solicit campaign funds. Mr Gore has also been accused of raising political money at a California Buddhist temple.
The White House contends that the president is exempt from the law aimed at protecting employees from being pressured by their bosses into raising political funds.
Besides, Mr Clinton, who attended three Democratic fundraisers in San Francisco on Saturday, has said he does not recall making any solicitations from the Oval Office. He also argues that while campaign finance reform is urgently needed to reduce the costs and irregularities in US politics he cannot "unilaterally disarm" while the Republican Party continues to raise huge sums.
Mr Gore has insisted that the 3.7 million dollars generated from phone calls he made in 1995-96 was "soft money" used for overall party-building rather than the "hard money" for specific campaigns, which would be prohibited under US law. He also says he thought the Buddhist temple function was a "community outreach" event, but memos from his office suggest he was informed of its actual purpose.
Time magazine reports that Ms Reno's order concerning Mr Clinton was prompted by an FBI-Justice Department review which examined the President's telephone logs and compared them with donations to the Democratic National Committee.