Scandal may hit U.S. foreign policy

By Carol Giacomo

WASHINGTON (Reuters): This was the week President Bill Clinton was supposed to focus on the Middle East, applying his power and prestige into unblocking the moribund peace process.

But then came the shocking charges of an alleged affair between the leader of the world's only superpower and a young former White House intern, and the prospect he may have coached her to lie about the dalliance.

Clinton, who has strongly denied any misconduct, on Thursday kept to a schedule that included two meetings with Palestinian leader Yasser Arafat.

But the scandal -- a kind of political El Nino that kept official, as well as unofficial, Washington glued to television news reports all day long -- already was having an effect.

"It's not business as usual because we're dealing with this story," White House spokesman Mike McCurry acknowledged.

Clinton has a reputation for being able to focus intently on a subject once his attention has been engaged. But after the president met Arafat, a Palestinian delegation source said the sex scandal was overshadowing the Mideast talks.

Asked if Clinton seemed distracted, the source said: "He is doing the best he can but clearly he was worried."

The Whitewater special prosecutor vowed to move quickly in probing whether Clinton told the former intern, Monica Lewinsky, to lie about the alleged affair -- a felony offense that has raised the once-unthinkable specter of possible impeachment proceedings. But such investigations take time.

A prolonged probe could have a paralyzing impact on U.S. foreign policy, distracting Clinton from critical issues, weakening his stature and maybe even enticing adversaries -- including Iraqi President Saddam Hussein and Republicans in Congress -- into even greater confrontations, U.S. officials and experts outside of government said.

While stressing it is too soon to make conclusive judgments, Moises Naim, editor of Foreign Policy Magazine, said having a scandal like this paralyze the presidency "could not happen at a worst time."

A long list of world issues "need to be taken care of and the fact that we might have diminished opportunity for U.S. leadership is going to make these issues much harder" to deal with, he said in a telephone interview.

The issues include persuading a Republican-led Congress to approve new funds so the International Monetary Fund can cope with the Asian financial crisis, to approve the expansion of NATO and to ratify the Comprehensive Test Ban Treaty.

Also facing Clinton are glimmerings of a thaw in relations with Iran, managing improving ties with China, influencing a transition in Russia if President Boris Yeltsin leaves office, dealing with the repercussions of European monetary union and helping mediate between the two Koreas.

The chief U.S. foreign policy stewards, including Secretary of State Madeleine Albright and National Security Adviser Sandy Berger, could continue working in a professional way regardless of what happens in the scandal. But they can only do so much without Clinton's involvement.

Officials who worked in the administration of Richard Nixon before he resigned in 1974 under threat of impeachment in the Watergate era say such scandals have a debilitating effect.

"It has an effect on people even if it's subtle ... The government essentially stops caring what's happening in the NSC (National Security Council) or the White House because the president is so weak," one official said.

It is possible the trauma could provoke an opposite reaction by which Clinton would involve himself more deeply in foreign affairs and foreign trips as an escape from the scandal, experts said.

Nixon reacted that way to Watergate but it did not save him from having to leave office in disgrace.

Clinton has long been faulted for not paying enough attention to foreign policy so placing greater focus on those issues could be positive, said Richard Haass, a former adviser to President George Bush.

"But all things being equal, it's hard to see how it (the scandal) helps. It has to eat up his time, detract from his authority and perhaps embolden domestic and international opponents of his policy," said Haass, now director of foreign policy studies at the Brookings Institution think tank.