PIPELINE TO THE PRESIDENT

By NANCY GIBBS

Roger Tamraz wanted to build a pipeline from the Caspian Sea to Turkey, but he needed to build one to the White House first. He tunneled under the U.S. intelligence community, dodged the doorkeepers who were trying to keep him out, shoveled at least $150,000 into Democratic Party coffers and finally broke through into the West Wing, where he joined the President for coffee and a screening of Independence Day.

The pattern has become familiar: every week now, it seems, we meet another businessman who wanted a favor from the White House and was willing to pay for it. And every week we learn more about a White House willing to place politics before policy. Just when it began to look as if the scandal was mainly about Chinese influence peddling, it turns out that all kinds of hustlers could descend on the White House like gamblers to Vegas, feeling lucky. It didn't matter if the player was a global wheeler-dealer like Tamraz, whom Interpol wanted to question in connection with $200 million that vanished from a bank in Lebanon where he once was chairman. The Clinton casino never closed. And for his failure to function as a more effective bouncer, National Security Adviser Tony Lake became the scandal's latest casualty, withdrawing last week as Clinton's nominee to head the CIA.

Each new case, and particularly the Tamraz tale, makes it harder for anyone in Washington to sustain the Big Lie on which the whole campaign-finance racket rests. The Big Lie works like this: over and over, despite each piece of evidence to the contrary, politicians insist there's no quid pro quo. People can give money to campaigns or parties, the pols say, but the donors get nothing from the government in return. Repeating this fiction obscures the obvious point: why would hardheaded businessmen give hundreds of millions of dollars--$262 million, the Federal Election Commission reported last week--without the prospect of getting something in exchange? But so long as no one shatters the myth, the laws won't be changed.

During the 1996 campaign, Democratic fund raisers recruited some donors who wanted something so badly that both donor and recipient agreed it might be better to keep the whole thing quiet. But "soft money" is easy to trace: the large unregulated contributions show up in FEC reports. So the Democratic National Committee buried the money trail, handing out lists of needy state parties so donors could funnel their money where it would be harder to find. In return, D.N.C. chairman Don Fowler and his staff made sure that assorted Chinese businessmen and now oil financiers got a hearing from the NSC, a photo with the First Lady, or a spot on the President's schedule.

The story of Roger Tamraz, a U.S. citizen of Lebanese descent born in Cairo, as told in the Wall Street Journal last week, suggests just how far Democratic officials were willing to go to hide a quid and deliver a quo. Tamraz wanted to build his billion-dollar oil pipeline through the warring nations of Armenia and Azerbaijan. He sought U.S. blessing for the project to help secure financing, and with the aid of some State Department officials, arranged a meeting in June 1995 with NSC Central Asia specialist Sheila Heslin. She was not impressed with his pitch and didn't think the pipeline would ever be built. She told Tamraz that no U.S. approval would be granted, and was alarmed to hear later that he had portrayed himself to potential investors as having some sort of official U.S. backing. Later that fall, after Tamraz sent the D.N.C. a check for $50,000, he asked for a meeting with Vice President Gore. Heslin argued that it would not serve U.S. foreign policy interests for Tamraz to meet with the President or Vice President; White House officials said last week that no meeting took place.

Such objections were becoming a nuisance to fund raisers. Lake had built a wall around the NSC to prevent political concerns from compromising policy judgments. During the campaign, some White House officials believed, as one put it, that Lake wasn't concerned about politics at all. "Tony's incredibly obstinate," the official said at the time. "It's like he doesn't care if the President's re-elected."

Tamraz didn't give up, though. In August and October, at chairman Fowler's suggestion, he sent a total of $100,000 to the Virginia State Democratic Party. In return, says a campaign official, he wanted Fowler to help get him in to see the President. So in December, Fowler called Heslin and asked her to back down on her objections to letting Tamraz in the White House. According to the Journal, he offered to send her a CIA report that would demonstrate that Tamraz had provided the agency with helpful information in the past. And several weeks later, a new CIA report landed on Heslin's desk, which Heslin claims she never requested.

How did a political operative like Fowler allegedly know how to reach into the CIA and order a secret report to pressure the NSC to change a security position? That's what the CIA would like to know. Agency communications records and documents state that Fowler telephoned a mid-level CIA officer who was Tamraz's contact in the clandestine Operations Directorate in December 1995, though Fowler denies making any calls. Meanwhile, intelligence officials told TIME that CIA Inspector General Frederick Hitz is investigating whether the officer, at Tamraz's urging, telephoned Fowler in October to confirm that the businessman had helped the agency in the past with information on the Middle East. If that was the case, it would represent a major breach in CIA security regulations, which bar officers from revealing to any outsiders that someone is helping the agency. Intelligence officials also say Tamraz had hired former CIA officers to work in some of his companies, so officials are investigating whether any veterans might have helped Fowler arrange his contacts with the Operations Directorate.

Heslin alerted the NSC to the lobbying by Fowler, and council deputy director Nancy Soderberg called Fowler and told him, in essence, to lay off. She didn't mention the encounter to Lake, thinking the problem was taken care of. So how to account for the fact that in the months that followed, Tamraz visited the White House not once but four more times? It turns out that the fire wall Lake constructed to keep politics out of foreign policy seems to have surrounded only him. His apparent inability to monitor the doings of 151 security-council staff members led even some Lake supporters on Capitol Hill to wonder whether he was cut out to run the nation's 80,000-person intelligence community.

The Tamraz scandal was only the last nail. Republicans on the Senate Intelligence committee, and especially chairman Richard Shelby, had been gunning for Lake ever since Clinton nominated him to take over the CIA in December. Early on, Shelby decided to hold Lake's nomination hostage to pry more documents out of the White House on everything from Haiti to Lake's stock holdings to the campaign-finance scandal. Administration officials tell TIME that a Shelby aide even drove the 35 miles to the supersecret National Security Agency at Fort Meade, Maryland, to ask if the NSA had any information on the nominee. The NSA shooed the aide away but alerted the CIA and the White House about the approach.

Ironically, Lake might have been better suited to the CIA post than he was to the NSC. He is secretive by nature and never sought the limelight; a bulletin board used to hang in the White House situation room with all the press photos that described him as an "unidentified staffer." While at the White House, he preferred shooting pool with Secret Service agents to hitting the Georgetown cocktail circuit. But Lake has not been shy about asking the CIA to undertake covert operations. During the first four years of the Administration he backed sensitive CIA operations to spy on and help bring down kingpins of Colombia's Cali drug cartel.

While Lake did have supporters on the committee, it was clear that he lacked the stomach for a long fight. During 35 years of public service Lake had been obsessed with his integrity. He had resigned from the Nixon Administration as a point of honor. He had never faced Senate confirmation for any position and wasn't used to the rough and tumble of congressional questioning. He had reached the job of his dreams at the NSC, only to see it be his undoing. "I consider this a personal tragedy," says Richard Holbrooke, who entered the foreign service with Lake and served with him in Saigon. "Tony was the most brilliant of the young group that came up together in Vietnam."

The Tamraz story broke Monday morning, guaranteeing another round of charges of lax management and another delay in the hearings. At 4:30 p.m., Lake went to the Oval Office to tell Clinton he wanted to pull his nomination. It was an emotional meeting. Clinton was frustrated and angry. He hugged Lake twice and tried to talk him out of his decision. When Clinton vowed to mount a yearlong fight, Lake politely cut him off. His mind was made up, and he didn't want to debate the President on it. That night Lake released his resignation letter, complaining about a capital "gone haywire." By week's end Lake had booked a flight to Florida to watch his beloved Boston Red Sox wind down their spring training.

--Reported by James Carney, Douglas Waller and Michael Weisskopf/Washington

With reporting by JAMES CARNEY, DOUGLAS WALLER AND MICHAEL WEISSKOPF/WASHINGTON