Lawsuit Against Clinton's Brother on Failure to Repay Debts Likely to be Settled

A lawyer for the brother of Sen. Hillary Rodham Clinton said he's confident he can avoid a trial next week and settle a lawsuit that accuses Tony Rodham of failing to repay debts to a Tennessee carnival operator.

That should be a relief to Clinton's 2008 presidential campaign since the case could have revived stories about how her brothers accepted money from people pardoned by her husband, President Bill Clinton.

Rodham is accused of failing to repay $107,000 plus interest to the bankrupt estate of Edgar Allen Gregory Jr. and his wife, Vonna Jo, both of whom received a presidential pardon in 2000.

Rodham's attorney, Samuel Crocker, said he's sure a settlement will be reached before the trial begins Thursday. "May lightning strike me down if it does (go to trial)," Crocker said.

Bankruptcy trustee Michael Collins said he was glad to hear Rodham was eager to settle because negotiations have been going on for some time. "There's certainly room for a settlement," he said.

Rodham claims in court documents the money he received from the Gregorys was for consulting services, but the trustee for the Gregory estate claims it was a loan. Rodham was reached by telephone Thursday at his home in Vienna, Va., but declined to comment.

In court filings, Rodham says the Gregory estate actually owes him money. He said he was owed $130,000 for his work between June 1998 and August 2002.

Collins said in January that he had tried to get Rodham to repay the loans for almost two years.

Collins had Rodham's accounts frozen in 2005 after Rodham failed to respond to an initial complaint. A judge ruled that Rodham was in default on the loans, but later released the accounts after Rodham appealed.

The Gregorys received pardons for a bank fraud conviction from President Clinton about two years after Rodham became a paid consultant to United Shows of America, a carnival business the couple owned.

Rodham has said he talked to his brother-in-law, who was then president, about a pardon for the Gregorys, but he said Clinton made the decision to grant clemency on the merits of their case.

Ed Gregory died in 2004, but the Gregorys have said in the past that the money they gave Rodham had nothing to do with the pardon request. They loaned Rodham $107,000 between May 2000 and February 2002, the lawsuit says. Collins said Rodham also was paid for consulting services, but he did not know the amount.

After Clinton left office, the Republican-controlled House Committee on Government Reform found that United Shows paid Rodham $240,000 for undocumented consulting services and that President Clinton was interested in the pardons solely because of his contacts with Rodham.

Rodham's attorney said the present case has nothing to do with the pardons.

"I am representing Mr. Rodham in an action that was brought against him by a bankruptcy trustee to recover money he alleges Mr. Rodham owes the estate," Crocker said. "I'm defending Mr. Rodham in that action and that is all this is about."

Hillary Clinton has said her brother was not paid for his help with the Gregorys' pardon.

Another brother, Hugh Rodham, was paid more than $400,000 for his successful efforts to win pardons for a businessman under investigation for money laundering and a commutation for a convicted drug trafficker. He eventually returned the money at his sister's request.

In the closing hours of his presidency, Bill Clinton pardoned 140 people, including billionaire financier Marc Rich, who fled the United States in 1983 rather than face charges of tax evasion, fraud and making illegal oil deals with Iran.

Rich's ex-wife, songwriter Denise Rich, contributed $450,000 to the Clinton presidential library project, $1.1 million to the Democratic Party and at least $109,000 to Hillary Clinton's bid for the Senate.

Hillary Clinton, who has been critical of President Bush's decision to commute the sentence of former White House aide I. Lewis "Scooter" Libby, said her husband's pardons were simply a routine exercise in the use of the pardon power, and none was aimed at protecting the Clinton presidency or legacy.