Global Policy Forum

While still at the State Department, Richard Holbrooke, President Clinton's nominee for chief delegate to the United Nations, opened job negotiations with a large investment bank only a few months after intervening to help the bank win a multimillion-dollar consulting contract in Hungary, according to a State Department report.

Department investigators found no evidence, however, that Holbrooke was offered a job by the bank, Credit Suisse First Boston, as a result of the intervention with the American ambassador to Hungary in 1995. The investigators also found no evidence that he saw the firm as a potential employer at the time.

Still, the details of that incident and others involving Credit Suisse are now being closely studied by the Senate Foreign Relations Committee, which is weighing Holbrooke's nomination.

While congressional officials from both parties agree that Holbrooke is almost certain to be confirmed by the Senate, the committee's Republican leadership has vowed to investigate a variety of conflict-of-interest allegations made against the veteran diplomat, who was the architect of the 1995 agreement that ended the war in Bosnia.

Republicans say they want to know whether he was treated too leniently by the State Department and the Justice Department during ethics investigations that delayed his nomination by eight months.

Earlier this month, Justice Department prosecutors dropped their investigation after Holbrooke agreed to pay $5,000 to the government to settle civil charges that he had violated federal lobbying laws in contacts with the U.S. Embassy in South Korea after leaving the State Department in 1996 to join Credit Suisse.

Holbrooke has denied any wrongdoing and has insisted that he agreed to the settlement only to end the ethics investigation and to allow his nomination to go forward.

He referred questions Thursday to his lawyer, Richard I. Beattie, who said that the investigators seemed insensitive to the predicament created for Holbrooke when, while working at Credit Suisse, he was named a senior foreign-policy adviser to the Clinton administration.

"This whole business suggests to me that under the current rules, it's almost impossible to try to help the government if you're in the business sector," Beattie said.

A report by the State Department's inspector general, obtained under a Federal Freedom of Information Act request, identified a series of incidents that could raise questions about possible violations of federal lobbying laws. The laws bar former senior government officials from lobbying their former colleagues for a year.

The report said that on six occasions within a year after leaving the State Department, Holbrooke was reimbursed by Credit Suisse for dinners and luncheons he bought for senior department officials, even though Holbrooke and his guests insisted that Credit Suisse business was never discussed at the meals.

The State Department investigators also determined that during that year, Holbrooke made three trips -- to the Czech Republic, Sweden and South Korea -- on behalf of Credit Suisse in which he requested that American ambassadors take some kind of official action, usually by helping him arrange appointments in foreign capitals.

The report was referred to the Justice Department for possible prosecution. Prosecutors there found only one incident -- the one involving the U.S. ambassador in South Korea -- in which there was sufficient evidence to seek civil charges.

But members of the Foreign Relations Committee are expected to use all the incidents in the report as a road map in determining whether Holbrooke created at least the appearance of a conflict of interest.

After leaving the State Department, Holbrooke served as an unpaid envoy to the Balkans and Cyprus.

Friends of Holbrooke's, and even some of his adversaries, say that the charges made against him are unfair, and that it would have been impossible for him to separate completely his work as an investment banker and as an envoy.

"The investigators totally ignored the fact that Holbrooke wore two hats during this period," said Beattie. "He was an investment banker, but he was also an unpaid but official consultant to the State Department and the president."

He said that Holbrooke inadvertently billed the meals with State Department officials to Credit Suisse, and that he had recently reimbursed the firm.

The investigation of Holbrooke began last summer with an anonymous letter involving Holbrooke's intervention in a Credit Suisse campaign to win a consulting contract on privatization with the government of Hungary.