THE WHITE HOUSE

By HILARY HYLTON

JOE HOLLEY and his family were all set to move to Washington, where the Texas journalist was to begin work on Sept. 2 as a $90,000 a year speechwriter for FIRST LADY HILLARY CLINTON. Instead, the day before the movers were to arrive, the White House said never mind. Holley says that what derailed the offer was the White House's realization that he had been named in a sexual discrimination and harassment suit in 1989, while he was the editorial-page editor at the then San Diego Tribune. He maintains that he alerted the First Lady's staff to the suit but didn't go into details. "I was more than willing and expecting to discuss it," he says, "but we never got that far." According to Holley, Clinton counsel CHARLES RUFF told him the White House didn't want to deal with the controversy. Ruff had no comment.

Holley is uncertain how much of the settlement is public, but he emphasizes that no one admitted guilt. "I was not terminated," he says. "The paper had no reason to be upset with me.

Is Holley a victim of the perpetually hypersensitive White House? "I just don't want to say," Holley told TIME. "There are no hard feelings. I just feel frustrated."

--By Hilary Hylton