President Clinton agreed Friday to pay $850,000 to Paula Corbin Jones to end her sexual harassment lawsuit, finally settling a case that began as an embarrassing nuisance for the former Arkansas governor but later sparked a criminal investigation that threatened to topple him from office.

In settling the case, Clinton did not apologize to the former Arkansas state clerk or admit wrongdoing.

Fifteen months ago, well before the name Monica S. Lewinsky became public, lawyers for the president and Jones nearly reached a settlement. But the deal fell apart when Jones insisted on an apology.

And although the president now will pay more in damages than the $700,000 Jones originally sought in her 1994 complaint, the amount is less than the $1 million she had demanded in recent settlement talks.


Rarely does a defendant in a civil suit offer to pay more than the amount initially requested, particularly when the lawsuit already has been thrown out of court.

But the case of Paula Jones vs. William Jefferson Clinton always has been unique because of the special status of the defendant.

With an impeachment inquiry still looming in the House, the president moved on his own this week to settle the Jones case, sources said.

“The president has decided he is not prepared to spend one more hour on this matter,” Clinton attorney Robert S. Bennett said in a statement. “The president remains certain that the plaintiff’s claims are baseless.”


Jones had alleged that in 1991 she was escorted to a Little Rock, Ark., hotel room, where then-Gov. Clinton crudely propositioned her.

The settlement was signed Friday on Jones’ behalf by Pasadena attorney William N. McMillan, whose wife, Susan Carpenter-McMillan, has been her public spokeswoman, and by her lead Dallas attorney Donovan Campbell Jr.

By ending the Jones case, the president undercuts--at least to a degree--the impeachment case against him.

In September, independent counsel Kenneth W. Starr reported to Congress that Clinton had lied about his affair with Lewinsky in sworn testimony, first when questioned in the Jones case and later before a federal grand jury. Starr also charged that Clinton had obstructed justice by concealing from Jones’ lawyers his gifts to Lewinsky and interfering with Starr’s investigation.


Starr to Make Impeachment Case

On Thursday, Starr is scheduled to go before the House Judiciary Committee to make his case that Clinton’s conduct constitutes grounds for impeachment.

For weeks, the president’s defenders have argued that Starr’s charges, even if true, are not impeachable offenses because they grew out of private misbehavior and a civil lawsuit that had been dismissed.

In April, U.S. District Judge Susan Webber Wright threw out Jones’ lawsuit on grounds that, even if what Jones said was true, she had not suffered sexual harassment. The judge concluded that Jones had no evidence she was demoted or otherwise punished for rebuffing Clinton’s alleged advances.


But in June, the Supreme Court, ruling in a Chicago case, said that a female worker does not need evidence she suffered a demotion to bring a claim of sexual harassment against a male supervisor. “Severe or pervasive” sexual harassment from a supervisor is enough, the high court said.

Jones’ lawyers appealed Wright’s dismissal of the suit and on Oct. 20 the U.S. 8th Circuit Court of Appeals heard arguments in the case.

Most courtroom observers and many lawyers, including some attorneys close to the president, considered it likely that the three-judge appellate panel would vote to revive Jones’ case.

Such a ruling also could have subjected the president to a possible trial on sexual harassment charges during his final years in office.


“This is good news. We want to get this thing behind us,” said a White House political aide.

The settlement agreement calls for the president to pay the $850,000 within 60 days. Clinton’s lawyers said the president’s insurers would pay a large part of the settlement and that his legal defense fund would pay the rest. A fund established in February had collected $2.2 million for his legal defense by the end of June.

A previous offer of $1 million by New York real estate magnate Abe Hirshfeld--rejected by Jones’ attorneys earlier this week--was not part of the settlement, said Clinton attorney Bennett.

White House staff members viewed the Jones case and the Starr investigation as a depressing distraction, one that diverted them and the president from their public duties.


“With a limited number of days in his presidency, I think every minute that he’s able to devote to the job of his presidency is a good thing,” said a senior White House official.

The aide conceded that the large payment might look like an admission of guilt by the president, but he insisted that Clinton was determined to get the case behind him. “There’s one reality here: It’s over. Another minute saved, another minute he can be on the job.”

From the beginning, the president’s lawyers insisted that it was unfair to subject a chief executive to civil suits while in office. They argued that by law a president should be immune while in office from civil suits, and they took that claim all the way to the Supreme Court. They lost on a 9-0 vote in May 1997.

It remains unclear how the settlement money will be split among Jones and her two teams of lawyers.


Joseph Cammarata and Gilbert Davis, her first team of lawyers, quit the case in August 1997, after Jones refused to accept the $700,000 settlement offer. Since then, they have filed papers seeking at least $800,000 in fees.

Meanwhile, the Dallas lawyers also are seeking substantial reimbursement for their costs. Cammarata said that he did not know how much money he would recover.

“It is good for Paula. It is good for President Clinton. It remains to be seen whether it will be good for Joe Cammarata,” he said on CNN’s “Crossfire” program.

Critic Threatens to Block Deal


A perennial Clinton critic, attorney Larry Klayman, said he would try to block the settlement if it is paid for with money from Clinton’s legal defense fund.

“The president can neither solicit nor accept nor benefit from money provided by outside sources,” Klayman said in a statement, citing rules which prohibit the chief executive from supplementing his salary.

Klayman also questioned whether State Farm and Chubb insurance companies, which sold Clinton liability policies, are authorized to pay damages for intentional wrongdoing such as sexual harassment.

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Times staff writers Robert L. Jackson and Elizabeth Shogren contributed to this story.

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* ACCUSED


Kenneth W. Starr lodged new charges against Webster L. Hubbell. A19