Friday, September 26, 2014

Sen. Paul Laxalt - New York Times,

March 21, 1982, New York Times, Reagan's First Friend,
September 8, 1983, AP - New York Times, Laxalt Planning Committee For Reagan Re-Election Bid
August 23, 1984, New York Times, Convention In Dallas - The Republicans - Excerpts From the Nominating Speech by Laxalt,
September 28, 1984, New York Times, Laxalt and Coast Editor in Libel Fight, by Wallace Turner,
October 21, 1984, New York Times, Laxalts Power - Suits Focus Attention on Senator, by Wallace Turner,
August 20, 1985, AP - New York Times, Laxalt Won't Run For Senate Seat in '86, by Wallace Turner,
October 15, 1985, New York Times, U.S. Sends Laxalt To Talk To Marcos, by Bernard Weinraub,
October 17, 1985, New York Times, Marcos Reassures Laxalt On Rebels, by Seth Mydans,
December 21, 1985, New York Times, Laxalt's Affairs in Nevada Coming Under Close Scrutiny in His Libel Suit, by Wallace Turner,
March 30, 1986, New York Times, Laxalt Leaving Senate; Tests Political Muscle, by Wallace Turner,
May 28, 1986, New York Times, Politics - Laxalt Looks at Geography and Money, by Phil Gailey,
June 16, 1986, New York Times, Jailed U.S. Judge Resists Resigning, by Wallace Turner,
July 18, 1986, New York Times, Laxalt Says CIA Chief Suggested Marcos Call Early Vote, by Charles Mohr,
September 9, 1986, New York Times, A Poor Gift for Senator Laxalt,
September 24, 1986, New York Times, Newspaper Chain Switching Lawyers in Laxalt Libel Case,
December 4, 1986, AP - New York Times, Deal on Hughes Casino Purchase is Linked to 1970 Plea by Laxalt,
August 27, 1987, New York Times, Laxalt Rejects Bid for the Presidency, by Richard L. Berke,
April 29, 1987, New York Times, Laxalt Joins G.O.P. Race For President, by Warren Weaver Jr.,
May 20, 1987, New York Times, Laxalt Loses Libel Suit Ruling, by Wallace Turner,
June 5, 1987, New York Times, Laxalt Drops Suit Over News Article, by Wallace Turner,
April 7, 1988, New York Times, Laxalt Wins on Fees in Long Legal Dispute,
November 11, 1987, New York Times, Finley, Kumble, Major Law Firm, Facing Revamping or Dissolution, by E. R. Shipp,


March 21, 1982, New York Times, Reagan's First Friend,

Steven V. Roberts is a reporter in The Times's Washington bureau who specializes in covering Congress. By Steven V. Roberts The scene was familiar: The White House driveway. Banks of cameras and microphones. Three Republican leaders, grim-faced, emerging from a meeting with the President. Shouted questions, careful answers. And the next day, big headlines: Congressional leaders tell the President they need ''running room'' to revise his budget.

But there was something unusual about this particular tableau. Two of the characters' positions entitled them to top billing: Senator Howard H. Baker Jr. of Tennessee, Senate majority leader, and Representative Robert H. Michel of Illinois, House minority leader. But the third man in the front-page photographs held no official rank above that of junior Senator from Nevada. Yet there he was, joining the party's top chieftains for a critical meeting with the President. And he was the one who made the headlines with his comment about ''running room.''

The third man was Paul Laxalt, and that scene in front of the White House last month illustrates the important and unprecedented role this 59-year-old lawmaker has carved out for himself in Ronald Reagan's Washington. He is the truthteller, the man who whispers in the ear of the leader, ''Hey, Ron, you've messed up, this one isn't working.''

Later, when asked why he had been at that particular meeting, Laxalt replied: ''I went along because I was asked to go by the President.'' What message had he delivered? ''Interest rates are the name of the game. The deficits present a huge problem. He has to give his whole budget a second look.'' That was not what President Reagan wanted to hear, but telling him was Laxalt's job.

This is only a most recent example of Laxalt's role as court truthteller. Last fall, for instance, he sensed that the President's additional $13 billion in budget cuts directed against cities and states would not win approval from officials at a National League of Cities meeting in Detroit. And he said so - to a group of reporters.

The next day, the President read Laxalt's statement and irritably told an aide, "Hey, I see that even Paul is critical of us. We've got to look at this again.'' Soon after, the President agreed to accept only $4 billion in additional trims.

Laxalt continues to be the man who delivers the bad news when other messengers might fear to do so. "Because of my relationship with the President,'' Laxalt explains, ''I can say things in a manner that others can't."

Lyn Nofziger, Assistant to the President for Political Affairs until recently, when he left to return to private political consulting in Washington, admits that, ''to a certain extent, people who are on the President's staff are always reluctant to bring him bad news. In addition, it's a little difficult to find out what's going on outside. So it's very helpful to the President to have someone he trusts, someone who's not grinding his own ax.''

Laxalt has been called the President's ''best friend'' so many times that the phrase is now practically part of his name. The two men share a deep, trusting friendship that goes back 18 years to when they both campaigned for Barry Goldwater during his Presidential bid. The Senator recently told Martin Tolchin of The New York Times, ''We're like brothers. ... If it's one thing the President needs, it's a good brother.'' The Senator's real-life brother, John, a Washington public-relations consultant, describes the relationship more pungently: ''Paul's been riding shotgun for him for quite a while.''

If Ronald Reagan needs a ''brother,'' Nancy Reagan needs a ''brother-in-law,'' someone to help her coddle and care for her husband, and one of Laxalt's strongest links to the First Family comes through the President's wife. In the Senator's Capitol Hill office, a photograph of him and the President is inscribed: ''A favorite picture of my two favorite fellas. Fondly, Nancy.''

''Nancy came to trust Paul like no one else outside the family,'' notes John Laxalt, who worked for the Citizens for the Republic, Mr. Reagan's political vehicle between his 1976 and 1980 campaigns. ''She knew Paul would never turn Ron around. Paul was protective of him.'' After the President's election, Laxalt probably could have had any job in the Administration, from White House aide to Cabinet secretary. But he sensed from the outset that he would be most valuable as an independent agent, outside the power structure and the power plays.

His personal relationship with the President became the basis for a political role that is both vital and unusual. Laxalt himself calls his function ''rather unique and probably unprecedented'' in Senate history, and it is hard to think of a good parallel. He holds no official position in the Senate leadership, not even a committee chairmanship. He has no power base in a large state or influential interest group. He avoids the Senate floor and the television studios. Yet the First Friend participates in most important strategy sessions on Capitol Hill, and few pictures of Ronald Reagan meeting with a delegation of lawmakers do not include the silvery head and crinkly smile of Nevada's junior Senator.

From the beginning, many Washington experts said that Laxalt's role could never work, that no one rides shotgun for the President without an official title or position. Laxalt was aware of the problem. ''Maybe what haunts me,'' he said a little over a year aso, ''is the admonition Richard Nixon gave me on this role. No one, he said, is more jealous of prerogatives than the Senate and House leadership.''

But the widespread, and somewhat surprised, judgment on Capitol Hill is that Laxalt has pulled it off, and one reason is his personality, a warm mixture of soft words and quick smiles, pats on the back and looks in the eye.

Like the Roman god Janus, Laxalt looks in two directions at the same time, and the budget issue demonstrates that facility. As a man of the Senate, he tells the President that his colleagues are upset, that they have to worry about re-election, that the Administration's budget will be ''very difficult for our candidates'' to run on next November. As a man of the White House, he tells the lawmakers that the President believes in his budget, that he must stand firmly behind it or risk spreading an infection of doubt that would doom his program. If both sides understand each other, Laxalt hopes, compromise will become possible.

''He plays a very important offstage role,'' says Senator William S. Cohen, a Maine Republican. ''He helps modulate Administration policy and keeps them in tune with the Senate, so they understand when to push and when not to push.''

Most lobbying in Washington actually has little to do with crude arm twisting. Usually it is a subtle process of answering questions, offering information, providing assurances. How Laxalt performs this function for the Administration was aptly demonstrated by the Senate vote to sell Awacs airplanes to Saudi Arabia.

Cohen's was a key vote. A moderate Republican with a Jewish father and considerable expertise in military matters, Cohen believed that the Administration should guarantee the security of Israel if it sold weapons to its enemy. He expressed his concerns to James Baker, a top Reagan aide, but was disturbed by the meeting. So he sought out the President's friend.

''I said to Paul Laxalt, 'I'm not satisfied that they know what I'm talking about,' '' Cohen recalls. ''And Paul said, 'I'll see that you have access.' '' Cohen saw the President three times, and he eventually voted for the arms deal.

By mutual effort, Laxalt and Howard Baker, the Senate majority leader, have developed a smooth working partnership. Instead of seeing the First Friend as a rival, Baker regards him as an ally who strengthens the leadership's hand. Many right-wing Republicans scorn Baker for following the ''moderate heresy,'' and Laxalt serves as a bridge to the party's conservative wing.

Lately, though, he has come under fire from the far right. A typical broadside comes from John D. Lofton Jr., editor of The Conservative Digest, who says, ''I don't think Paul Laxalt would ever go to Ronald Reagan and press him on conservative issues. And that's very, very sad, because he could be a very important person in helping to hold the President's feet to the fire.''

Other archconservatives deride Laxalt for remaining friendly with moderate senators, like Lowell Weicker - a Connecticut Republican and old tennis-playing buddy - but, in fact, the Senator from Nevada is particularly valuable to the White House because his contacts cross ideological as well as party lines.

To his liberal adversaries, however, Laxalt remains in the grip of conservative orthodoxy. ''I feel he displays a very dangerous kind of hypocrisy toward certain groups,'' says Mary Gojack, the Nevada Democrat whom Laxalt trounced in the 1980 Senate race. ''The elderly is one. He meets with them, and he's very affable and charming. Then he votes against them with amazing regularity.''

When Mr. Reagan came to town after the 1980 election, however, one of the first people he saw was Senator Edward M. Kennedy, who had set up the meeting through Laxalt. Later, according to an aide of the Massachusetts Senator, Kennedy used the Laxalt connection to send a warning to the White House that Raymond J. Donovan, its nominee for Secretary of Labor, might have embarrassing links to organized crime - connections which, despite Donovan's eventual confirmation, are currently under investigation.

"Kennedy really likes Laxalt," says the Kennedy aide. "They don't agree on very much, but Kennedy thinks he is an honorable person."

Officially, Laxalt is just a Republican backbencher, but when the score is tied and the clock is running, his teammates often throw him the ball for the last shot. Often he makes it, but not always.

In December, for example, a House-Senate conference struggled to forge a compromise resolution that would set stopgap spending levels for the Federal Government. When an agreement was finally reached, Laxalt, who, as a senior member of the Appropriations Committee, was part of the conference, signed it. His signature was a ''signal'' to other Republicans, he says, that the White House approved, and even the most conservative lawmakers went along.

But the President ended up vetoing the bill, demonstrating that politics can divide even the closest of friends when their priorities differ. As a legislator, Laxalt is a man of compromise. As an executive, Ronald Reagan wanted to make a dramatic gesture, a symbolic statement against spending. Early in the Reagan Administration, Laxalt's Senate office looked like an old-fashioned political clubhouse, with job seekers lined up in the hallways. But those job hunters who came off best were Laxalt's own family and friends. His daughter Michelle became head of Congressional relations for the Agency for International Development; his son John hooked on with the finance arm of the Republican National Committee; his adopted daughter Denise landed in the White House speech-writing office. At least seven aides and cronies also slid into top slots with the new Administration. When asked about this remarkable record, Laxalt responded bluntly, citing the devout politicians' creed: ''If you don't take care of your own, who will?''

The Senator was equally frank about taking care of his own during the MX missile controversy. President Carter had proposed concealing the precise location of the new missiles by continually moving them around on giant racetracks embedded in the deserts of Nevada and Utah. Laxalt and his Republican Utah colleague, Senator Jake Garn, were fiercely opposed to the plan, and when Mr. Reagan took office, they mounted an intense lobbying campaign that included personal appeals to the President.

When Mr. Reagan finally scrapped the racetrack plan, Laxalt insisted that his side had won ''because we came up with the facts.'' But when asked if their friendship had proved useful, he admitted, ''The access was important, of course.''

There are those who complain that Laxalt does not take sufficient advantage of his access and his acumen. Probably the most common criticism of Laxalt is that he does not quite live up to his potential. ''I just wish he'd use all that positive energy and channel it into one area of activity,'' says a friend and tennis partner. ''There's a lot of talent going wasted.''

Laxalt has never been an active legislator. Though pressed by many conservatives to challenge Senator Baker for the majority leadership, he declined. The fact is that he hates fine details and long hours, the staples of a leadership job.

''His attitude is not to be involved,'' says a Senate aide who has observed Laxalt closely for years. ''He's antsy. He comes in to vote and gets the hell off the floor.'' After seven years in the Senate, it is hard to find a bill of Laxalt's that ever became law.

His work for the President takes up most of Laxalt's time these days, but he is pursuing a few select items on his own agenda, most of them relating to streamlining the Federal bureaucracy. He is the co-author, for instance, of a comprehensive bill on regulatory reform whose main purpose is to make sure that new rules justify on a costeffectiveness basis the burdens they impose. However, in typical fashion, Laxalt has taken the hard-edged dogma of Reaganism and beveled it down a bit. His bill represents a compromise with Senate liberals, and its main co-sponsor is Senator Patrick J. Leahy of Vermont, a progressive Democrat. The compromise has been so artfully drafted that 81 other Senators have signed up as co-sponsors.

Laxalt is also one of the Senate's experts on "New Federalism," the Reagan effort to return more programs and power to state and local officials. He heads a Presidential commission that is studying the issue and serves as an Administration emissary to various meetings and conferences on the subject. But, here again, he rejects rigid ideology. He sympathizes with governors who worry that they will be assuming more responsibilities without more resources.

Laxalt has long been concerned with freeing the Western states from the domination of the Federal Government, which owns great chunks of land throughout the region. As the son of a shepherd who lived off the land, Laxalt is a born-again devotee of the "sagebrush rebellion," the Western movement for expanding the development and exploitation of public lands. One of his more important contributions to the Reagan Administration was to find a little-known but likeminded Denver lawyer named James Watt and urge the President to make him Secretary of the Interior.

Laxalt's arrival in Washington seven years ago foreshadowed the rise to power of Western conservatives. In analyzing the impact of this new breed, he stresses their relations with the press. The older conservatives, he says, "had a terrible distrust of the press, a real paranoia, and felt it was best to stay away from them." The new Westerners are accessible to journalists. As Laxalt notes, ''we're all here in great part because of the media. We're all comfortable with it and appreciate its importance.''

Moreover, the Western conservatives emerged from a different culture from that of the crusty old Southerners and Middle Westerners who had carried the right-wing banner in the past. They, too, believe fervently in states' rights, but their battles with Washington center on land and water, not on the race issue that pervaded Southern politics.

While the Middle Westerners might not have had a race problem, they often shared with Southerners a moralistic view of the world, but, outside the Mormon realm of Utah, the Western experience has been far different. The frontier made possible - and necessary - an individualism other regions only talked about. ''If there is a live and-let-live state in the country, it's probably here,'' says Laxalt of Nevada.

How rigidly conservative, after all, can a Senator who represents Las Vegas be? This helps explain Laxalt's views on the ''social issues'' simmering in the Senate. As a member of the Judiciary Committee, Laxalt consistently votes in favor of efforts to curb abortion and school busing, but he does not take a leading position.

Four of the Senator's seven children are adopted, and families facing the problem of unwanted pregnancy went to him for legal advice. In addition, one of the Senator's five daughters has, by her own admission, borne a child out of wedlock. ''I learned firsthand,'' Laxalt says, ''that abortion is an excruciatingly difficult question on a personal basis.'' As a result, he scorns lawmakers, such as Jesse Helms, who try to enshrine their own views in legislation that would ban virtually all abortions. ''I'm not going to sit and moralize and tell other people what they should do,'' Laxalt says. ''Jesse must have had very limited personal experience with abortion. I've had a lot.''

Yet Laxalt enjoys the adulation and support of the organized rightwing movement, which cares deeply about abortion, and he refuses to make a clean break. Lately, he has come to favor a bill proposed by Republican Senator Orrin G. Hatch of Utah which would overturn the Supreme Court decision legalizing abortion and allow Congress and the states to pass their own guidelines.

This same sort of waffling has marked Laxalt's uncertain sponsorship of the Family Protection Act, a hodgepodge of measures directed against birth control, unions, homosexuals and other betes noires of the right. Even his colleagues knew that the legislation was not his style, and as he began to speak on the subject one day, another Senator sidled up to him on the floor and said, ''I want to see what this divorced Nevada gambler has to say about family protection.''

Laxalt says that he agrees with the ''basic thrust'' of the bill - Government policy should promote, not erode, family life - but he now believes that proposals such as denying Federal funds to advocates of homosexuality are ''above and beyond'' the proper scope of legislation. And he notes that ''there is a conflict'' between conservative rhetoric calling for less government and suggestions that Washington police the nation's bedrooms and classrooms to enforce right-wing doctrine. Accordingly, he let the legislation ''simmer'' for two years, and then withdrew from its sponsorship. There is nothing inconsistent, however, about Laxalt's devotion to his land and his upbringing. His parents, both natives of the French Basque country, met in Nevada and settled in Carson City, a village of 3,000 people and few paved streets when Paul was growing up. Dominique Laxalt roamed the hills with his flock most of the year, and that left Paul, the oldest of six children, with a special role.

''At a very tender age, he had a great deal of responsibility thrust on him,'' says John Laxalt. ''He learned to be a peacemaker, and he was our conduit to Mom.'' ''Conduit,'' ''peacemaker'' - the same words are used to describe him today.

Mama Laxalt, as she was widely known, ran a small boardinghouse and restaurant near the state capitol that become a favorite gathering spot for politicians. Paul would wait on tables and listen to the talk, a scene his brother Robert described in ''Sweet Promised Land,'' a book about the Laxalt family: ''Invariably, their attention would fix on Paul, quietly weighing them as equals even then, and one or the other would shake his maned head and waggle his jowls and say, 'That boy will be Governor someday.' ''

The Laxalts lived a frontier life, scratching out a living out from the mountains and their small business, and that experience shaped Paul's outlook. ''I come from a self-help family,'' he says simply. ''That's the essence of my conservatism.''

As the child of immigrants, young Paul, who did not speak English until he went to school, was an outsider and an underdog. But Basques maintain a fierce pride in their heritage, a pride Robert Laxalt calls their "flaming shield." His brother Paul refers repeatedly to the family's ethnic heritage, always in a warm and loving way.

Although his brother Robert feels that Paul was ''cheated of his youth'' by all his responsibilities, the future Senator became a star athlete in high school: football, basketball, even a bit of Golden Gloves boxing. But his real love was always tennis, and even when the local cowboys called him a ''sissy'' for wearing shorts and swatting a little white ball, he stayed at it, and won the state junior championship.

Mama Laxalt packed Paul off to Santa Clara, a Jesuit college in California. Before he could get his degree, the military packed him off in 1943 to the South Pacific. ''When he came back,'' Robert wrote, ''he seemed to have lost the decisiveness and confidence that had always been part of his makeup. Like a wounded animal, he went to the mountains and lived with my father until he was healed again.''

His decisiveness returned after he met Jackie Ross, the daughter of a Republican politician who later became a prominent judge. After marriage and law school at the University of Denver, the newly minted attorney joined his father-in-law's firm in Carson City, and served as Ormsby County District Attorney.

His first big break came in 1962, just as he was turning 40. Rex Bell, a former cowboy movie star, was a candidate for Governor and needed a running mate from northern Nevada in the Lieutenant Governor's slot. Bell looked up his old friend Judge Ross, and eventally decided on his son-in-law. Before the election, however, Bell died, and Laxalt was urged to run in his place. But the Democrats had a popular incumbent and Laxalt's well-tuned political antennae told him that running for Governor then might snuff out his career at the starting gate. So he stayed in the race for the second spot and won, handily.

Old Carson City friends say that the young Paul Laxalt could sometimes be prideful and thin-skinned. And several reporters recall the time when, as Lieutenant Governor, he strenuously objected to the construction of a Federal Job Corps camp because it might attract unruly blacks. In the view of a veteran Nevada State House reporter, Laxalt has ''broadened considerably'' since then. As Senator, he seldom shows the testy side of his nature.

Laxalt set out on the road to the Senate in 1964 but was waylaid by Nevada's incumbent Democratic Senator, Howard Cannon. One reason for his defeat was his decision to ignore his advisers' warnings and campaign with Barry Goldwater, then a doomed candidate for President. But Goldwater was a friend, and Laxalt takes friendship seriously. (When Richard Allen was under fire recently and on his way out as national security adviser, Laxalt appeared at a luncheon in his honor and shook Allen's hand in front of a battery of photographers.)

Laxalt finally won the Nevada governorship in 1966, but his political success led to personal disaster. The rugged campaign was a ''complete grind'' for the family, according to his daughter Michelle, now 27.

Things got worse when the family moved into the Governor's mansion. Carson City was a tiny town, a goldfish bowl, and his teen-age children were rebellious and resentful. Meanwhile, the Governor's wife was becoming an alcoholic. (The family talks openly about her problem now, and Jackie Laxalt, after seven years of sobriety, has recently returned to Nevada to help counsel other alcoholics.) The town oozed with rumors, and Michele remembers her mother's life in those years with considerable pain: ''People would call in the middle of the night and ask her, 'Is it true that you and Paul are getting divorced? Is it true he's sleeping with his secretary?' It was so distasteful to her that she withdrew completely.''

Most analysts in Carson City do not give Laxalt very high marks as Governor, and he now admits that he was not temperamentally suited to the pressures and details of the job. But he does take pride in one accomplishment: rescuing the gambling industry, the backbone of the state's economy. It was during Laxalt's tenure that Howard Hughes moved to Las Vegas and started buying up casinos, and the Governor became an ardent supporter of the secretive millionaire. He treated Hughes as a special case, never requiring him to appear publicly before the state agency that grants gaming licenses.

Laxalt does not apologize for bending the rules for Hughes. ''I was acting in crisis circumstances,'' he explains. ''The Las Vegas economy was crumbling, and Hughes confided in me that his physical condition was terrible. He looked like a damn cadaver.''

Laxalt has accepted campaign contributions from Las Vegas interests, some of whom contribute to both candidates in an election. One contributor, Morris B. (Moe) Dalitz, has often been accused by various criminal investigators of racketeering connections. When asked why he has not returned Dalitz's money, Laxalt answers: ''Moe Dalitz is a friend of mine. I'm not going to say to him now, 'Get lost, you're too hot.' I don't play it that way.''

The same year that Paul Laxalt became Governor of Nevada, Ronald Reagan became Governor of California. The two men knew each other from the Goldwater campaign, and now they had to deal regularly on problems relating to Lake Tahoe, which spans their common border. They soon found they liked each other, and the Reagans visited Laxalt's retreat at Marlette Lake, a remote spot high in the Sierra Nevada where Laxalt's father used to run sheep. The wooden table at the old sheep camp bears a souvenir of one visit, a heart surrounding two sets of initials: ''R.R.'' and ''N.R.''

"Our greatest bond is love of the outdoors,'' Laxalt says of Mr. Reagan. ''We also come from comparable small-town backgrounds, and we're both jocks.''

The Nevada Governor was almost 12 years younger than his California counterpart, but he was a more seasoned politician. Laxalt recalled a year ago that their times together at governors' conferences and other political meetings: ''Ron was never quite comfortable with other political figures. He relied quite a bit on me to get a reading on the other guys, or what the situation was. He knew, for instance, that I got along well with Nelson Rockefeller, and I was a bridge there a few times.''

That is the basic Laxalt: making contacts, reading moods, building bridges. Above all, he is a politician, not a legislator or an executive.

After two years in the Governor's mansion, Laxalt became ''disillusioned'' with the job, according to Bill Sinnott, his longtime aide, and started spending more time on the tennis court and less in the Capitol.

"I decided I'd be better off in private life,'' Laxalt later told a reporter. ''My marriage was deteriorating and my family disintegrating. When my little ones called me 'Governor,' I decided I wanted out.''

So, although a second term was virtually assured, Laxalt declined to run, but his departure from the public eye did not help his marriage, and in a year, the Laxalts were divorced. (He did not marry his secretary of many years, Carol Wilson, until 1976.) The Roman Catholic faith in which he was brought up tottered a bit during the course of his divorce and remarriage, but it remains a strong element in his identity.

Professionally, his new private life gave Laxalt a chance to fulfill an old dream: building a hotel and casino in Carson City called the Ormsby House. Laxalt has always displayed an admiration for businessmen and a fascination with wealth. (During the first year of the Reagan Administration, one of his proudest accomplishments was bringing a group of high-powered money managers to the White House to brief the President. Later he boasted that the managers controlled about $400 billion in total assets.) But his high regard for the free-enterprise system did not make him a good businessman, and soon the project was in trouble.

Eventually, he and his chief partner, his brother Mickey, needed more cash, and they used connections in Las Vegas to obtain a loan from a Chicago bank while putting up very little collateral. Ever since, his opponents have tried to use this loan against Laxalt, but the tactic has never worked.

Still, the project faltered, and before long, the brothers sold out. And in 1974, when Senator Alan Bible announced his retirement, Paul Laxalt jumped into the race. It was the year of Watergate, and the first Basque-American ever elected to the Senate squeaked in by only 600 votes, the only Republican in the country to capture a Senate seat held by a Democrat. When Paul Laxalt first arrived in Washington a bit more than seven years ago, the Republicans were still reeling from Watergate. He became involved with a group of conservative Senators who called themselves the Steering Committee. The group offered a congenial base for the newcomer, who had never served in a legislative body before.

Laxalt's first opportunity to demonstrate his political skills before a national audience came about by accident. As the only member of the Labor and Public Welfare Committee to vote against a bill on common-situs picketing allowing labor unions to close down an entire job site over a single grievance, Senate custom called for him to become the floor leader of the opposition. During that battle, the freshman legislator developed what he now calls the ''inside-outside strategy'' -using conservative activists and paid advertisements to generate pressure from outside groups that could then be used to influence Washington insiders.

The Laxalt forces lost the battle on the Senate floor but won the war. Adroitly orchestrated public pressure led President Gerald R. Ford to veto the bill, and his veto was upheld. Since then, Laxalt's ''inside-outside strategy'' has been elevated to a high art, with thousands of conservative activists' and contributors' names stashed away on computer tapes, ready to be energized at the push of a button. Last year, President Reagan pushed that button to help generate support for his economic program.

The Reagan-Laxalt friendship, which had lapsed somewhat when the Nevadan left state office, revived when Laxalt came to Washington. Looking around the political landscape, the new Senator was not overly impressed with the field of Republican Presidential candidates. ''I didn't find anyone in town who could communicate as well as Ron,'' he recalled soon after the election.

So the freshman Senator became Ronald Reagan's campaign manager in 1976 and traveled to 41 states, boosting the Californian's bid for the Republican nomination. It was a grueling and, ultimately, fruitless, mission, but the exposure he received marked the coming of age of Paul Laxalt as a national figure.

The morning after the 1976 election, Laxalt met with Ron and Nancy in Los Angeles. ''We all assumed Carter would have eight years,'' Laxalt says. ''But I suggested that Ron never close the door. Things were politically volatile.'' When, two years later, he whiffed what he said a year ago was a ''a smell of death about the Carter Presidency,'' it was like a dose of smelling salts for Ronald Reagan's Presidential hopes.

The revived candidate moved around the country, making speeches and gathering chits. In Washington, the Senator served as Mr. Reagan's ''John the Baptist,'' as John Laxalt puts it, spreading the good news of Ronald Reagan's message and guiding him through the strange world of the nation's capital.

Meanwhile, back in the Senate, Laxalt was thrust into the biggest fight of his career - leading the opposition to the Panama Canal treaties. He lost the treaty fight by one vote, but in the process gained the respect of his adversaries and the press. In 1980, Laxalt had his own re-election campaign to worry about. Though he did not hit the trail for Mr. Reagan as often as he had in 1976, he remained in constant touch with the candidate. Often, on Sunday afternoons, they would talk for hours on the telephone, and during the campaign, the charmer from Nevada showed that he could play political hardball with the pros.

Take the case of John Sears, Mr. Reagan's campaign manager. Laxalt deeply disagreed with the Sears strategy of isolating Mr. Reagan from the public and the press; he also seemed to resent Sears's intimacy with the Reagans, one of the few relationships that rivaled his own. ''From the outset,'' Laxalt recalls, ''I raised warnings with Ron and Nancy about Sears. But until Iowa, they were entranced with him.'' After Mr. Reagan's defeat by George Bush in the Iowa caucuses, Laxalt saw his opening. He went to New Hampshire, the next stop on the primary circuit, and intensified his anti-Sears campaign. On primary day, Mr. Reagan announced that Sears was out.

Paul Laxalt's toughest moment in his relationship with Ronald Reagan came during the Republican nominating convention in Detroit. Both men knew that naming Laxalt as the Vice-Presidential candidate made no political sense; another conservative Westerner, from a small state, would add nothing to the ticket. Moreover, Laxalt did not want the job, at least at first. ''I always felt,'' he says, ''given my penchant for independence and privacy, that it would be a bad position for me and for Ron.'' But Mr. Reagan refused to take Laxalt's name off the list of candidates, and Laxalt agreed to keep his name on, though he kept himself out of the last-minute deliberations. When reporters told him on the convention floor that George Bush had been chosen, he was clearly rattled. Paul Laxalt takes pride in being an insider, but the Reagan forces had not given him the word on Bush and, as a result, he looked like an outsider. Also, he looked like a loser.

He was obviously upset, but he also knew that Bush would help the ticket in just those areas where Ronald Reagan was weak. Since the election, Laxalt and Bush have taken to socializing and to playing tennis together. For now, they are on the same side of the net politically. But that could change if Bush someday becomes the candidate of the moderate wing of the party to succeed President Reagan, and Laxalt is handed the standard for the conservative faction.

''Laxalt's real test,'' says one knowledgeable Senate aide, ''will come when the Republicans start to fall apart. He's the one guy capable of holding the whole thing together.'' Laxalt tends to agree that ''things are going to be much more difficult in the year ahead,'' And, he says, the President ''can't be on bended knee all the time.''

This conversation took place in a hotel in Reno, and Laxalt's suite provided a magnificent view of the snow-dusted mountains of the Sierra Nevada. The Senator's gaze kept straying to that view as he talked, and at one point he said, ''It's a curious thing, when I first went back to Washington, I didn't realize, in terms of orientation, what those mountains do. You can look out and immediately know what is north, east, south and west. When I first arrived in Washington, if I would lose sight of the monuments, I would start to panic.''

Laxalt's unconscious metaphor was telling. The man had found his bearings in Washington and had helped elect a President. Someday, he might have to face the choice of running for the Presidency himself, but these mountains will always remain the compass in his life.

Illustrations: photo of Laxalt on phone in his Capitol Hill office p.27 photo of Laxalt and Baker reporting to President Reagan p.26

September 8, 1983, AP - New York Times, Laxalt Planning Committee For Reagan Re-Election Bid
Senator Paul Laxalt says he will file papers to form a re-election committee for President Reagan next month unless Mr. Reagan ''has some ...

August 23, 1984, New York Times, Convention In Dallas - The Republicans - Excerpts From the Nominating Speech by Laxalt,
Following are excerpts from the speech of Senator Paul Laxalt of Nevada at the Republican National Convention last night, placing the name of ____________________________________________________________________________

September 28, 1984, New York Times, Laxalt and Coast Editor in Libel Fight, by Wallace Turner,

SAN FRANCISCO, Sept. 27— Senator Paul Laxalt has filed a $250 million libel suit against McClatchy Newspapers, leading the Sacramento publisher C. K. McClatchy to charge today that the Senator was trying to intimidate the news media.

Mr. Laxalt, a Nevada Republican, filed the suit last Friday in state court in Carson City, seeking actual and punitive damages from Mr. McClatchy, various employees and his company.

Today Mr. McClatchy, in a column in The Sacramento Bee, The Fresno Bee and The Modesto Bee, said the suit, based on an article printed Nov. 1, 1983, was an attempt to intimidate news organizations from reporting allegations linking the lawmaker to organized crime. Mr. McClatchy also accused the news divisions of CBS and ABC as well as Katharine Graham, president of the Washington Post Company, of knuckling under to the intimidation.

Intimidation Is Denied

Mrs. Graham, spokesmen for the two networks and a source close to Senator Laxalt confirmed that the Senator had contacted the news organizations about reports concerning him. But the news organizations denied that they had been intimidated.

The suit was based on an investigative report published in the three Bee newspapers concerning the Ormsby House Casino in Carson City. Mr. Laxalt promoted the casino's construction and controlled its operation between his service as Governor of Nevada from 1967 to 1971 and his election to the United States Senate in 1974.

The report, which Mr. Laxalt's complaint said was ''wholly false, misleading and libelous,'' said that Federal investigators had evidence that in the years of Mr. Laxalt's control, substantial sums of money were ''skimmed'' from the casino's profits without the payment of taxes.

The account said that Mr. Laxalt's strong political ties in Nevada caused state officials charged with controlling gambling to ignore the information that Federal officials passed to them about the Ormsby House Casino.

The article also said that Bernard Nemerov, who it identified as manager of the Ormsby House Casino during the Laxalt ownership, was a part-owner and key employee of the Riviera Hotel in Las Vegas at a time when skimming was proved there and that Mr. Nemerov was a longtime associate of people identified by Federal officials as belonging to organized crime groups.

Laxalt Denies Charges

In a demand for retraction on Nov. 18, 1983, which was included in the libel complaint, Senator Laxalt denied that any skimming occurred or that his influence blocked an investigation of allegations, and said that Mr. Nemerov was an investor in Ormsby House, not its manager. The letter denied the inference that Mr. Nemerov was brought into Ormsby House to run skimming operations.

''Being sued for $250 million inspires a lot of questions,'' Mr. McClatchy said in his ''Editor's Notebook'' printed today in the same papers that carried the investigative report. ''The public is entitled to some answers simply because this case represents a dangerous threat to the free flow of information.''

He characterized the Laxalt suit as ''so devoid of merit that we believe the only reason it was filed was to intimidate other newspapers magazines and broadcast organizations and deter them from pursuing the story.'' Mr. McClatchy said that he was confident the investigative report could be shown in court to be accurate.

Mr. McClatchy said the ''serious question'' is whether ''absurdly large damage'' demands would inhibit reporting. He cited a corrective item in the current issue of Newsweek to illustrate his point. He said that in the Sept. 24 issue, the magazine in commenting on the ferocity of press attention to Geraldine A. Ferraro's finances had mentioned that no other major newspaper had followed up on The Bee's allegations about Senator Laxalt.

Senator Did Complain

Mr. McClatchy said Senator Laxalt immediately called Mrs. Graham, whose Washington Post Company owns Newsweek, and that the magazine this week carried a boxed item that said it did not intend in its previous reference to adopt The Sacramento Bee's investigative report as factual.

The Sacramento publisher also said that Mike Wallace of CBS News had said the ''60 Minutes'' program planned to do a pre-election story on allegations of links between Mr. Laxalt and the underworld. Mr. McClatchy said the Senator's suit seemed to have caused CBS to have second thoughts and that he understood ABC News had backed away from a similar report.

Senator Laxalt was not available for comment, but a source close to him who asked not to be identified said the Senator had called Mrs. Graham and complained about the Newsweek mention in the article about Representative Ferraro. According to this source, the Senator's New York lawyer, Seymour Shainswit, then sent a letter to CBS putting the network on notice that one of its sources was, in Mr. Shainswit's view, unreliable.

Mrs. Graham, reached in Philadelphia, acknowledged that Senator Laxalt called her to complain about Newsweek's mention of the Bee story. Maynard Parker, editor of Newsweek, said he and the Senator discussed the matter, and that lawyers for the Senator and Newsweek worked out the language of the boxed clarification.

''Far from being intimidated,'' Mr. Parker said, ''I think that the Laxalt story is a live one and we are continuing to follow it up. We're not intimidated by anyone.''

Ramona Dunn, spokesman for CBS News, said: ''Judgments about broadcasting stories at CBS News are based on the thoroughness of the research, the validity of the material and the merit of the story. Letters from lawyers are a weekly or sometimes a daily occurrence. They are read carefully. But if we believe our story is accurate, complete and responsible it will be broadcast.''

She acknowledged that her statement implied that Senator Laxalt had contacted CBS and that a story on him was in progress at the network.

Tom Goodman, spokesman for ABC's ''World News Tonight,'' said: ''Our story is ongoing. It's still under investigation. We haven't dropped it.''

October 21, 1984, New York Times, Laxalts Power - Suits Focus Attention on Senator, by Wallace Turner,Paul Laxalt, as the senior Senator from Nevada, general chairman of the Republican Party and one of President Reagan's closest advisers, ...

August 20, 1985, AP - New York Times, Laxalt Won't Run For Senate Seat in '86, by Wallace Turner, Senator Paul Laxalt, a key supporter of President Reagan in the Senate and one of the President's closest personal friends, announced today ...

October 15, 1985, New York Times, U.S. Sends Laxalt To Talk To Marcos, by Bernard Weinraub,
President Reagan has sent Senator Paul Laxalt to the Philippines to discuss the worsening military, political and economic situation there, ...

October 17, 1985, New York Times, Marcos Reassures Laxalt On Rebels, by Seth Mydans, President Ferdinand E. Marcos met for an hour today with Senator Paul Laxalt, a personal envoy from President Reagan, and assured him that ...

December 21, 1985, New York Times, Laxalt's Affairs in Nevada Coming Under Close Scrutiny in His Libel Suit, by Wallace Turner,

Senator Paul Laxalt's affairs are coming under close scrutiny as part of the pretrial process in a $250 million libel suit the Nevada Senator has brought against McClatchy Newspapers.

The suit was prompted by an article about Ormsby House Casino, a casino-hotel that Mr. Laxalt built in his home town of Carson City after his 1967-71 term as Governor.

The date of the trial has not been set. But the Senator has given a deposition that provides an early glimpse of the issues that will be raised in a case involving one of the nation's most prominent Republican politicians.

The main new element to emerge in the deposition deals with Mr. Laxalt's relationship with Delbert W. Coleman, a onetime casino owner in Las Vegas.

Through much of the deposition, the Senator maintained that Mr. Coleman's only role in the Ormsby House project was to introduce Mr. Laxalt to a lender. Toward the end of the four-day session, after being presented with documents, he acknowledged for the first time that until the final days of negotiation on the project he had expected Mr. Coleman to invest with him.

Denial of Tampering

In the deposition, the newspaper chain's lawyers also suggested that someone on the Laxalt side of the case had altered a document in photocopying it. Senator Laxalt and his counsel denied that there had been any tampering with evidence. A request by McClatchy lawyers for a hearing on the matter was denied Tuesday by a Federal magistrate, a ruling McClatchy lawyers said they would appeal.

Mr. Laxalt was also questioned about his relationship with the teamsters' union and a letter he wrote in 1971 asking President Nixon to exercise executive clemency to shorten the prison sentence of James R. Hoffa, the teamster union figure. Mr. Laxalt testified that he wrote the letter at the suggestion of Allen M. Dorfman, a close Hoffa associate.

Mr. Dorfman, who was convicted in 1972 of taking a kickback to arrange a loan from the union's Central States Pension Fund, was shot to death a few weeks after his conviction in December 1982 of conspiracy to bribe Howard W. Cannon of Nevada, then a United States Senator, in 1979.

The lawsuit is of more than narrow interest because Mr. Laxalt is the general chairman of the Republican Party and a close friend of Ronald Reagan, whose Presidential campaigns he headed in 1976, 1980 and 1984. In an interview after announcing last summer that he would not seek re-election next year to a third term, Senator Laxalt said one reason he was suing was to remove a possible roadblock to a Presidential campaign in 1988.

As a public figure, Mr. Laxalt's task in the trial will be to convince the jury that the article libeled him, was false and was published with reckless disregard for its truth or falsity.

Allegations of Skimming

In the deposition of Mr. Laxalt, which took place in Washington in October, McClatchy lawyers presented some of the evidence, including a report by a Nevada gaming investigator, that is likely to be used at trial to defend the article.

The article said Nevada gaming control officials did not follow up on Internal Revenue Service tips that profits were being ''skimmed'' from the casino tables without payment of taxes, while Ormsby House was under Mr. Laxalt's ownership. The article, which said the tips pointed to organized crime figures as the eventual recipients of the money purportedly being skimmed, went on to say there was no evidence that Mr. Laxalt knew of any skimming.

The account, by Denny Walsh, was published Nov. 1, 1983, in McClatchy's Bee newspapers in Sacramento, Fresno and Modesto, Calif.

The Senator, who in his suit described the article as ''wholly false, misleading and libelous,'' testified that he was aggrieved because he said the article implied that the Laxalt family was involved with organized crime.

''I wasn't about to let this pass,'' he testified, ''because that presented a cloud that historically is going to be on the books in the mind of many people, and we're going to remove that cloud.''

Financing of Ormsby House

In questioning Mr. Laxalt about his relationship with Delbert Coleman, McClatchy lawyers delved into the casino-hotel's financing, a key topic in the Walsh article. Mr. Laxalt sold Ormsby House on Jan. 6, 1976, when, according to documents presented in the deposition, debts of $7.3 million were owed to the First National Bank of Chicago.

The Senator at first described Mr. Coleman as a social friend whose only role in the project was to introduce him to Robert Heymann, vice president of the bank.

The lawyers subsequently showed Mr. Laxalt documents that included handwritten notes by his brother Peter, taken at a meeting in which the Laxalts discussed their own and Mr. Coleman's financial and tax considerations as principal investors. The documents elicited the Senator's acknowledgment that the Laxalt brothers had been counting on Mr. Coleman to join them in the project.

James Brosnahan, a McClatchy attorney, asked the Senator, ''Have you, before this deposition, made any public statement anywhere that said that at one time Mr. Coleman was being considered as a principal?''

''Not that I am aware of,'' the Senator replied.

Differing Copies of a Letter

Mr. Laxalt also testified that Mr. Coleman was a contributor to a fund the Senator established to help pay the cost of the suit.

In a particularly dramatic moment in the deposition, McClatchy lawyers suggested that a letter had been altered in making a photocopy in a way that concealed Mr. Coleman's role in one loan the Laxalts received. The letter, dated Sept. 7, 1971, was from Mr. Heymann to Mr. Laxalt, and stated that the First National Bank of Chicago was ready to lend $950,000 to Mr. Laxalt for five years without security.

McClatchy lawyers presented a photocopy of the letter identified as coming from Mr. Laxalt's files, provided to them under Federal court rules requiring pretrial disclosure of evidence. There was a line across the bottom of the photocopy, as if a paper had blocked out something.

Mr. Brosnahan, attorney for the newspaper group, produced a different photocopy of the same letter. On this copy, which was obtained from the First National Bank of Nevada, the words ''L/C Dependent on Coleman'' were scrawled across the part that appeared covered over in the copy provided by the Laxalt side.

Question About Loan

Mr. Brosnahan interpreted ''L/C'' to mean ''line of credit.'' The effect was to raise the question of whether someone had tampered with evidence to hide Mr. Coleman's possible role as a guarantor of loans by the Chicago bank for Ormsby House.

The Senator has said many times that no secret guarantors backed his loans. When questioned about the difference between the two copies, he said he had no idea how to explain it. His lawyer, James E. Beasley of Philadelphia, denied that there had been any tampering of evidence.

Senator Laxalt, in the deposition, volunteered the observation that Mr. Coleman's history in Nevada gambling would have made it difficult for him to be licensed as an investor in the Ormsby House project.

In the late 1960's Mr. Coleman acquired 30 percent ownership and operating control of the Parvin-Dohrmann Company, which owned the Fremont, Stardust and Aladdin hotel-casinos. Mr. Coleman lost his Nevada gaming license after the Securities and Exchange Commission forced him to resign as an officer and director of Parvin-Dohrmann in settlement of 1969 charges of stock-price manipulation.

Control of the casinos then passed to a company organized by Allen R. Glick, who has testified in a trial under way in Federal District Court in Kansas City that his life was threatened by organized crime leaders who said they had secret holdings in those casinos.

Informers' Tips on Skimming

The documents presented by the McClatchy lawyers concerning allegations of skimming at Ormsby House included a report written in 1975 by Sidney Farber, an investigator for the Nevada Gaming Control Board. His report said an agent of the Internal Revenue Service had given him an informer's statement that there was a skimming operation at Ormsby House.

Mr. Farber wrote that he was not able to substantiate this and that he passed along the information to the Gaming Control Board's enforcement division. The McClatchy article described Mr. Farber's actions and went on to say that the Nevada authorities had not followed up on his report.

McClatchy lawyers also produced another report, which outlined fragmentary evidence of skimming at Ormsby House. But Mr. Beasley, Mr. Laxalt's lawyer, advised him not to answer questions about it because the name of its author had been blanked out in copying and the McClatchy lawyers refused to provide it.

The report was written in 1973 by an investigator for the California Department of Justice. It said the investigator had information from a confidential informer that employees of Ormsby House believed that 15 to 25 percent of winnings were being skimmed. The investigator said the man purportedly picking up the skimmed money was an agent for Frank Balistrieri of Milwaukee. Mr. Balistrieri is among defendants in the Kansas City trial.

Meeting With Union Officials

In connection with the International Brotherhood of Teamsters, Mr. Laxalt testified that the Central States Pension Fund, whose loans figure in the Kansas City trial, was a vital source for financing Nevada casinos when he was Governor. He said that in the 1960's banks were reluctant to make such loans. He testified that he was once host at a meeting of Nevada officials with teamsters' officials at the Governor's mansion in Carson City, aimed at furthering state cooperation with the union.

The Senator said this was the atmosphere that led to his relationship with Allen Dorfman, who played a role in Senator Laxalt's letter to President Nixon in behalf of Mr. Hoffa. The Senator testified he had known Mr. Dorfman well and had attended a birthday party for him in Chicago. He said he did not know of Mr. Dorfman's criminal problems at that time.

At one point, Mr. Laxalt was asked about a briefing by J. Edgar Hoover, then director of the Federal Bureau of Investigation, after Mr. Laxalt's election as Governor in 1966. The Senator said ''I don't have any recollection'' that Mr. Hoover warned him of skimming at casinos and of organized crime concealed ownerships.

He was then shown an F.B.I. memorandum prepared by an agent who was at the briefing that said, ''The Director advised he would be very happy to work with Governor Laxalt in trying to clear up the outrageous skimming situation in Las Vegas.''

The Senator said he could not reconcile his failure to recall with the evidence handed him.

At another point, Mr. Laxalt answered a question from Mr. Brosnahan by saying: "Well, I don't have any recollection then, but don't blindside me with purported statements. If you have them, show me them."

"Let me clue you in," Mr. Brosnahan replied. "I get to blindside you when I want."

"You can try," the Senator said.

Photo of Senator Paul Laxalt (UPI)

March 30, 1986, New York Times, Laxalt Leaving Senate; Tests Political Muscle, by Wallace Turner, In the year before he leaves public office, Senator Paul Laxalt has risked his prestige in an attempt to persuade Nevada voters to accept his ...

May 28, 1986, New York Times, Politics - Laxalt Looks at Geography and Money, by Phil Gailey,
When faced with a major personal decision, Senator Paul Laxalt likes to retreat to the splendid isolation of what was once his father's sheep ...

June 16, 1986, New York Times, Jailed U.S. Judge Resists Resigning, by Wallace Turner,
Senator Paul Laxalt and other Nevadans are suggesting that Federal District Judge Harry E. Claiborne, now in Federal prison, resign rather ...

July 18, 1986, New York Times, Laxalt Says CIA Chief Suggested Marcos Call Early Vote, by Charles Mohr, ... he call the early presidential election that ultimately led to Mr. Marco's exile, according to an article by Senator Paul Laxalt. Mr. Laxalt, a close ...

September 9, 1986, New York Times, A Poor Gift for Senator Laxalt,
As a matter of courtesy, United States senators routinely accept legislation that affects only one or two states, and Senator Paul Laxalt of ...

September 24, 1986, New York Times, Newspaper Chain Switching Lawyers in Laxalt Libel Case,

SEATTLE, Sept. 23— McClatchy Newspapers, the Sacramento-based chain that faces a $250 million libel action by Senator Paul Laxalt of Nevada, has retained Robert Warren of Los Angeles as chief counsel in place of James Brosnahan of San Francisco.

Mr. Warren is a partner in the law firm of Gibson, Dunn & Crutcher, where one of the senior partners is William French Smith, who was Attorney General in the first term of the Reagan Administration. Mr. Smith is a political associate of Senator Laxalt, who has said that his exploration of a possible Presidential campaign in 1988 is based on the urging of many of President Reagan's supporters.

"Mr. Smith is not working on the case,'' said Gary Pruitt, in-house counsel for McClatchy Newspapers, who disclosed the change in defense lawyers in a telephone interview Monday. ''The fact that some of the partners in Gibson, Dunn & Crutcher are closely associated with the Reagan White House or Reagan himself has nothing to do with the transfer."

McClatchy Standing Firm

C. K. McClatchy, chairman of the newspaper chain, said in a telephone interview from Washington, D.C.: ''We've had two meetings with Laxalt. One was with lawyers before he filed his suit, and the other was with just the two of us after he filed it. We said we weren't going to give him a retraction, nor would we apologize, nor would we give him any money.''

The political significance of the Laxalt-McClatchy litigation has grown in the past year as the Nevada Senator moves nearer to running for President in 1988. Senator Laxalt announced a year ago that he would not run for a third Senate term this year. He has established a special fund to which many political figures have contributed to help pay his costs in pushing the libel suit.

Mr. Pruitt said that the switch in counsel was not a prelude to a negotiated settlement with Senator Laxalt. But he said that possibility was readily available to the Senator under certain conditions. ''We changed lawyers, not our defense posture,'' Mr. Pruitt said. ''In other words, this does not reflect any change in strategy or attitude or tactics.''

The suit concerns a Nov. 1, 1983, article that appeared in the chain's Sacramento, Modesto and Fresno newspapers. It reviewed Mr. Laxalt's ownership of the Ormsby House Hotel and Casino in Carson City, Nev., which he and relatives built almost entirely with borrowed money. Plans for the hotel were made in the closing months of Mr. Laxalt's service as Governor of Nevada from 1967 to 71. It was built and opened while he was out of office and was sold in 1975 after he had been a United States Senator for a few months. Casino Skimming Was Described

Senator Laxalt has frequently said he sees the article as soiling his family name by associating the hotel with Mafia figures from the Middle West whose agents were described in the article as suspects in an alleged operation to skim casino profits.

On Monday, Mr. Pruitt said: ''We've always been willing to publish a clarification statement that said something along the lines as follows:

"'McClatchy Newspapers never meant to state or imply that Laxalt participated in or had any knowledge of any alleged skimming operation.' We've been willing to say that from the very beginning, but that has been unacceptable to Laxalt."

The Senator filed his libel suit in September 1984. No trial date has been set.

December 4, 1986, AP - New York Times, Deal on Hughes Casino Purchase is Linked to 1970 Plea by Laxalt,

SAN JOSE, Calif., Dec. 3— John N. Mitchell, a former Attorney General of the United States, says one reason he approved Howard R. Hughes's purchase of a Las Vegas hotel in 1970 was that Paul Laxalt, then Governor of Nevada, personally intervened in Mr. Hughes's behalf, according to The San Jose Mercury News.

The newspaper quoted Mr. Mitchell as saying that Mr. Laxalt, who now is ending his second term in the United States Senate, played a role in persuading him to overrule Justice Department antitrust specialists who opposed Mr. Hughes's purchase of the Dunes Hotel.

Senator Laxalt has denied speaking with Mr. Mitchell about the Dunes, The Mercury News said.

The newspaper said that Senator Laxalt, who was interviewed in August for its three-part series of articles on his affairs, declined its requests for a follow-up interview on Mr. Mitchell's comments. Nor would the Senator respond to written questions. Advised Not to Respond

Mr. Laxalt's attorney, James E. Beasley of Philadelphia, said he had advised the Senator not to respond because some of the Mercury News questions touched on issues in a $250 million libel lawsuit Mr. Laxalt is pressing against McClatchy Newspapers.

The libel suit involves an article in The Sacramento Bee in 1983 that linked Mr. Laxalt with alleged underworld figures and reported allegations of possible skimming of gambling profits from a Carson City casino the Laxalt family owned in the early 1970's. Senator Laxalt has denied those allegations and contends in his suit that there are 118 ''false and libelous'' statements or inferences in that article.

A Laxalt spokesman, Tom Loranger, after speaking with the Senator, declined comment Tuesday, citing the McClatchy suit.

Mr. Laxalt's suit, filed in September 1984, is still in the pretrial stage after several delays.

Mr. Laxalt did not seek re-election to the Senate. He has said he is considering candidacy for the Republican Presidential nomination in 1988.

Washington Visit Alleged

The Mercury News quoted Mr. Mitchell as saying in a telephone interview that Mr. Laxalt visited him in Washington on Feb. 18, 1970, and urged him to allow Mr. Hughes to buy the Dunes.

Mr. Mitchell said Mr. Laxalt had argued that Mr. Hughes's acquisition of the Dunes would help Nevada because the hotel was owned by organized crime interests at that time, according to The Mercury News.

"That statement was made to me by Paul Laxalt, who was then Governor," Mr. Mitchell is quoted as saying. "He met with me in the Department of Justice." Mr. Mitchell added that he took Mr. Laxalt's remarks "into consideration" when he decided in March 1970 to give Mr. Hughes permission to buy the Dunes, it continues.

Mr. Laxalt's meeting with Mr. Mitchell was also noted in an Oct. 16, 1975, memorandum prepared for the Watergate special prosecutor.

August 27, 1987, New York Times, Laxalt Rejects Bid for the Presidency, by Richard L. Berke,

Former Senator Paul Laxalt of Nevada took himself out of the 1988 Presidential contest today, saying he was unable to raise enough money to wage a strong campaign.

The announcement late today by Mr. Laxalt, one of President Reagan's closest friends for more than two decades, caught many of his campaign workers by surprise.

In a statement issued by his campaign committee, Mr. Laxalt said that ''while the political response'' to his potential candidacy ''was encouraging,'' the ''financial outlook was not as bright.''

"We are a family of very modest economic means, and I wasn't about to embark on a campaign that would have led us into a financial black hole," the statement added.

Lagging in Opinion Polls

Mr. Laxalt had said in May that he would need to raise $2 million by Oct. 1 to run an adequate campaign. He later backed away from that figure, calling it a "minor condition," and said he was running a "lean and mean" campaign.

But as of June 30, his campaign had collected only $814,563. His aides said today that the amount had risen to slightly over $1 million.

Despite his 12 years in the Senate and close relationship with Mr. Reagan, Mr. Laxalt had been unable to gain much ground on his rivals, according to public opinion polls.

A New York Times/CBS News Poll conducted July 21-22, showed that only 1 percent of Republican primary voters favored him, putting him well behind the six other major Republican contenders.

Mr. Laxalt was at Lake Marlette, near Lake Tahoe, Nev., today. He met there with his financial advisers and, after consulting by phone with other senior aides, decided to withdraw, according to Doc Bodensteiner, the campaign's deputy political director.

Mr. Bodensteiner said some senior staff members had discussed the possibility of pulling out of the race in recent days, but that others, who earlier today gave reporters no indication of the withdrawal, were surprised.

Gerald P. Carmen, the national campaign chairman, announced the decision to workers at the campaign headquarters here this afternoon. ''It was pretty emotional because there's a strong feeling about Senator Laxalt,'' Mr. Bodensteiner said. ''But he had to make a cold, realistic assessment of the finances.''

Mr. Laxalt, 65 years old, said on April 28 that he was forming a committee to explore a Presidential bid. He said his decision to run was ''as close to final as one can get'' with financing the only question.

In his statement today, Mr. Laxalt, cited only financial reasons for his withdrawal.

"We have thoroughly tested the political and financial waters for the past four months," he said.

"Even if our projections for fund-raising had not been met, the money, in my opinion, would have been inadequate to conduct a viable Presidential campaign."

A 'Second-Tier' Candidate

Advisers to Mr. Laxalt said he was discouraged that Vice President Bush had raised nearly $11 million.

"My feeling is that Laxalt felt he could raise maybe a couple million or so by the time the primaries come around but that this is simply not enough to mount a challenge against Bush," said one Republican leader who is close to Mr. Laxalt. He said some advisers felt Mr. Laxalt did not fare better because he was not aggressive enough on the issues.

Republican political analysts said they did not expect Mr. Laxalt's absence from the race to have much effect on the Republican field. They noted that he, along with former Gov. Pierre S. du Pont 4th of Delaware, former Secretary of State Alexander M. Haig Jr. and Representative Jack F. Kemp of Buffalo was a "second-tier" candidate behind Mr. Bush and Bob Dole, the Senate Republican leader. The Rev. Pat Robertson, the television evangelist, is also expected to run.

"The question was, which of the four could make themselves into a full-blown third candidate," said Doug Bailey, a Republican consultant who is neutral in the Presidential race. "I think all of the others had significant advantages in terms of organization and structure in the early states. Lots of people were wondering why he was running.'' Decision Is Praised

Patrick J. Buchanan, the former White House communications director whose sister, Angela, is a top adviser to Mr. Laxalt, said the former senator made a "wise decision."

"I think he saw the mountain was too high to climb,'' said Mr. Buchanan, who has not endorsed a candidate."He would have been a good candidate but I don't think he could have gotten here to there with everybody else farther down the track.''

Mr. Buchanan said Mr. Kemp could benefit from the withdrawal. ''Kemp has lost a competitor for the conservative vote,'' he said. ''In that sense this is of marginal help to Kemp."

Several of Mr. Laxalt's former opponents praised him in statements tonight. Mr. Kemp said he was ''in a way saddened'' because his opponent "was promoting the same conservative principles I promote."

Lee Atwater, Mr. Bush's campaign manager, commended Mr. Laxalt for running a "positive campaign."

No Comment From Laxalt

Mr. Laxalt was not available for comment, his aides said.

Born in Reno on Aug. 2, 1922, Mr. Laxalt practiced law and then served as Lieutenant Governor of Nevada from 1963 to 1967 and as Governor from 1967 to 1971, just as Mr. Reagan was serving his first term as Governor of neighboring California.

He was narrowly elected to the United States Senate in 1974 but was re-elected by a large margin in 1980. Rather than seek re-election last year to what was considered a safe seat, he said he wanted to return to private life.

In June, Mr. Laxalt dropped his $250 million libel lawsuit against the McClatchy newspaper chain and the chain dismissed a countersuit against Mr. Laxalt. That action was seen as removing a major obstacle to his concentration on a Presidential campaign.

Photo of Paul Laxalt (AP)

April 29, 1987, New York Times, Laxalt Joins G.O.P. Race For President, by Warren Weaver Jr.,

Former Senator Paul Laxalt of Nevada, who built a reputation as President Reagan's closest friend in Congress, announced today that he was a candidate for the 1988 Republican Presidential nomination.

Without using the word ''conservative,'' Mr. Laxalt, a former general chairman of the Republican Party, made it clear that he would try to stake a claim as the heir to Mr. Reagan's philosophy and agenda.

Mr. Laxalt made public the names of 147 members of a Presidential exploratory committee that included a number of former officials of the Reagan Administration. $2 Million Fund Sought He told reporters and more than 200 supporters at the National Press Club that he was ''about as close as you can get'' to an all-out commitment to run. The only thing that could interfere, he said, would be an inability of his committee to raise a $2 million campaign fund by Oct. 1. A $3 million fund, the candidate said, would put his campaign ''in the tall cotton.''

With his announcement, Mr. Laxalt entered a crowded Republican field. The announced candidates are Representative Jack F. Kemp of upstate New York, former Gov. Pierre S. DuPont 4th of Delaware and former Secretary of State Alexander M. Haig Jr. Unannounced contenders are Vice President Bush, Senator Bob Dole of Kansas and the Rev. Pat Robertson.

Some Republican leaders said they believed that if Mr. Laxalt's campaign gathered momentum it might threaten the competitive position of Mr. Kemp, who is now running well behind Mr. Bush and Mr. Dole in public opinion polls.

But John Buckley, a Kemp spokesman, said it seemed likely that Mr. Laxalt would ''cause some difficulties for the Vice President'' by implicitly challenging Mr. Bush's position as the rightful heir to Mr. Reagan. Bush Aide Sees No Impact

Ed Rogers, deputy to Lee Atwater, Mr. Bush's campaign manager, said: ''We have a lot of respect for Senator Laxalt and his candidacy, but his announcement doesn't really impact on us. We'll continue to organize in the states and raise money. It's too early to tell how Laxalt is likely to affect the other candidates.''

Among the members of the Laxalt committee are Fred F. Fielding, former White House counsel; Lyn Nofziger, former assistant to the President for political affairs; Richard S. Williamson, former assistant to the President for intergovernmental affairs; Richard Wirthlin, the White House pollster; Mary Jane Wick, wife of Charles Z. Wick, director of the United States Information Agency, and Angela M. Buchanan, former Treasurer of the United States and sister of Patrick J. Buchanan, the former White House communications director.

In his formal announcement speech, Mr. Laxalt emphasized his experience close to the Presidency. ''My last term in the Senate was devoted in great part in helping the President bridge the gap between the White House and the Congress,'' the candidate said. ''This has given me an invaluable insight into the chemistry between the executive and legislative branches.

''I know what working in the White House is all about. Sometimes I felt like a near full-time resident there.''

In response to questions, Mr. Laxalt said Mr. Reagan had wished him luck with his candidacy but had warned that, as President, he would not take a position for or against any Republican candidates in the race for the nomination.

The former Senator said he did not believe his $250 million libel suit against the McClatchy Newspapers would affect his campaign. Trial to Start June 23

The suit involves a news article published in The Sacramento (Calif.) Bee in 1983, alleging that casino proceeds were skimmed at the Ormsby House Hotel in Carson City, Nev., while the Laxalt family owned it. The article did not say Mr. Laxalt was responsible for the skimming or knew about it. The candidate predicted that the suit, scheduled to go to trial June 23, would be over by Labor Day.

Senator Jake Garn of Utah, chairman of the Laxalt committee, said after the news conference that raising $2 million ''is not a piece of cake, but I believe the support is there - I think the money will be there.''

Mr. Laxalt has apparently trimmed his political budget. Last July he told reporters he would ''need a handle on $8 or $10 million up front'' to become a viable Presidential candidate. He said today that $2 million could finance a ''lean and mean'' campaign, concentrating early on Iowa, New Hampshire and South Dakota, moving to the South, where at least 13 states will hold primaries on March 8, and then returning to his base of strength in the West.

Mr. Laxalt, a 64-year-old lawyer and Reno-born son of a Basque sheepherder, served as Lieutenant Governor of Nevada from 1963 to 1967 and as Governor from 1967 to 1971.

He narrowly won a seat in the United States Senate in 1974 but was overwhelmingly re-elected in 1980. He decided not to seek almost certain re-election last year, saying he wanted to return to private life. REPUBLICAN PRESIDENTIAL CONTENDER PAUL DOMINIQUE LAXALT CURRENT JOB: Lawyer in Washington office of New York firm of Finley, Kumble, Wagner, Heine, Underberg, Manley, Myerson and Casey. BORN: Aug. 2, 1922, Reno. EDUCATION: University of Santa Clara (Calif.), 1940-43; Denver University School of Law, B.S., LL.B., 1949. RELIGION: Roman Catholic. MILITARY SERVICE: Medical Corps, Army, 1942-46. MARRIED: To Carol Bernardini, Jan. 2, 1976. (First marriage, to Jackalyn Ross, ended in divorce in 1970.) CHILDREN: Gail, 36; Sheila, 35; John Paul, 34; Michelle, 32; Kevin, 31; Kathleen, 29, and Denise, 27. PREVIOUS GOVERNMENT POSITIONS: District Attorney, Ormsby County, Nevada, 1951-54; Lieutenant Governor, Nevada, 1963-67; Governor 1967-71; United States Senator, Nevada, elected in 1974, retired in 1986. OTHER MAJOR POSITIONS: Chairman, Ronald Reagan Presidential campaign committee, 1976, 1980 and 1984. POLL STANDING: Strength among Republicans in most recent New York Times/CBS News Poll: 3 percent, tied for fifth among eight.

May 20, 1987, New York Times, Laxalt Loses Libel Suit Ruling, by Wallace Turner,

A reporter's information from confidential sources may be introduced as evidence in the trial of former Senator Paul Laxalt's $250 million libel suit against McClatchy Newspapers, a Federal judge has ruled.

The reporter made misstatements to one of his sources in an interview and failed to include them in a transcript given the court, Mr. Laxalt's attorneys argued in trying to bar information from confidential sources as evidence.

The trial is scheduled to start June 23 on Mr. Laxalt's contention that he was libeled by a 1983 article saying the Internal Revenue Service had evidence of a skimming operation at a casino in Carson City, Nev., while under Laxalt family control in the early 1970's. Skimming is the illegal diversion of money from a business before taxes.

Mr. Laxalt, a candidate for the Republican Presidential nomination, has denied the charge.

In his ruling Friday, Federal District Judge Edward Reed characterized actions by the reporter as ''a fairly serious misuse of the source privilege,'' but added that barring the information ''on this basis alone'' was inappropriate.

Laxalt attorneys contended that Denny Walsh, a McClatchy reporter, acknowledged in a deposition last month that he told a source ''absolutely not'' when asked if he was tape-recording their conversation about the mechanics of skimming. Mr. Walsh said he did so to put the source at ease.


June 5, 1987, New York Times, Laxalt Drops Suit Over News Article, by Wallace Turner,
Former Senator Paul Laxalt of Nevada and the McClatchy newspaper chain announced an agreement yesterday to dismiss competing ...

April 7, 1988, New York Times, Laxalt Wins on Fees in Long Legal Dispute,

Attorneys for Paul Laxalt will receive nearly $650,000 for their part in a $250 million libel suit the former Republican Senator from Nevada filed against McClatchy Newspapers and later dropped, attorneys have announced.

The award, announced Monday, will be paid by the newspaper group's insurance company.

Mr. Laxalt said the award made him the victor in his long legal dispute with the newspapers. McClatchy Newspapers said it would have preferred that its insurance company not pay any of the fees but called the award ''fair to all parties.''

The dispute began in November 1983 when The Bee newspapers in Sacramento, Modesto and Fresno published an article about Mr. Laxalt's family.

The article alleged that the Internal Revenue Service had evidence of skimming at the Ormsby House hotel-casino in Carson City, Nev., while the Laxalt family owned it in the early 1970's.

The action was dropped in June 1987, leaving the payment of Mr. Laxalt's legal fees as the only unresolved issue. The two sides then entered arbitration, and a three-member panel entered its award last Thursday for $647,454. The award also provides that $130,363 in fees and expenses for the arbitrators be shared by both parties.

November 11, 1987, New York Times, Finley, Kumble, Major Law Firm, Facing Revamping or Dissolution, by E. R. Shipp,

The nation's fourth-largest law firm, Finley, Kumble, Wagner, Underberg, Manley, Myerson & Casey, long rocked by internal rivalries and increasingly concerned about mounting debts, is about to undergo a dramatic reorganization, if not a total dissolution, according to lawyers in the firm.

The turmoil threatens to splinter an organization that grew from eight lawyers in 1968 to become one of the first national law firms. Just as dramatic as its growth was the controversial way it achieved its size. It raided top partners from established law firms and acquired smaller firms around the country. Such tactics were unheard of in what had been a rather staid profession and angered many of its leaders.

Meetings are currently under way in New York, Beverly Hills, Calif., Miami and Washington to try to salvage something of the 680-lawyer firm.

Comment by Carey

:It's safe to say that the going forward of Finley, Kumble will in no way resemble the old Finley, Kumble," Hugh L. Carey, a partner and the former Governor of New York, said yesterday during a break from a meeting of partners in Manhattan.

In addition, the Florida offices, with 130 lawyers in Miami, Tallahassee, Fort Lauderdale and Palm Beach, will formally "dissociate" from Finley, Kumble by Dec. 1 and reorganize as the firm of Tew, Schulte & Jorden, according to a well-placed source in Miami. Thomas Tew, John H. Schulte and James F. Jorden are the leading partners of the five-year-old Florida operation of Finley, Kumble. "It's because of the debt," the source said.

Two months ago, members of the executive committee of Finley, Kumble predicted that the firm would end its fiscal year on Jan. 31 with $60 million in profits, $18 million in operating debt and $7.75 million in long-term debt.

But the Florida source said the firm now had $60 million in debts related to its rapid expansion and that there was little chance of significantly reducing it by the end of the fiscal year. Finley, Kumble has declined to discuss its financial condition publicly.

The firm lured big-name lawyers to join it by promising exorbitant salaries. At the start of the year two former Senators, Paul Laxalt and Russell B. Long, joined Finley, Kumble after being wooed by a number of major law firms.

16 Lawyers Lured

At the same time, Finley, Kumble lured 16 lawyers - including a name partner, Peter M. Fass - from the Manhattan firm of Carro, Spanbock, Fass, Geller, Kaster & Cuiffo. Mr. Long, Mr. Laxalt and the Fass group were to beef up the firm's taxation and real estate departments, areas in which the firm had expected major growth.

Mr. Carey, in a brief interview yesterday, said the firm now realized that bringing in "high-powered, affluent lawyers may be the worst mistake ever made."

"A firm is in no position to lay out this kind of money," he added.

About 50 of the firm's 250 or so partners were to have earned at least $300,000 in the current fiscal year, according to the firm's financial records. Members of the executive committee were to have earned from $530,000 to $1.3 million. In addition, Marshall Manley, a former co-managing partner who has been fairly inactive in the firm in the last two years, was to have earned $1.5 million. Mr. Long and Mr. Laxalt were each to have earned $800,000 this year and Mr. Fass, $875,000.

But it appears that, because of the firm's financial difficulties, the partners were actually drawing less than they had been promised.

'We Will Continue'

Mr. Carey, though not very specific, insisted yesterday that ''the name Finley, Kumble, Wagner will go on; we will continue.'' He indicated that, while the details were still being worked out, there could be regional spinoffs of the old firm. ''There will be responsible actions to take care of all our clients and all of our employees,'' Mr. Carey said.

According to one member of the firm's executive committee, who requested anonymity, at least three law firms are likely to emerge. One would be made up of the Florida partners. A second might be formed by Harvey D. Myerson, a litigator who heads the New York office and is one of the firm's three co-managing partners; Mr. Manley, and Robert B. Washington Jr., another co-managing partner who heads the Washington office. The third firm might be led by Finley, Kumble's founding partners and those who joined it in its earliest years, including Leon Finley; Steven J. Kumble; Robert F. Wagner, a former Mayor of New York City, and Mr. Carey.

It is uncertain which partners in the various offices - it has 14 offices in the United States and one in London -would go with which of the new firms or, indeed, how many of the old offices would remain open. It is also uncertain what relationship the new firms will have to each other.

Vote of Confidence

Just last summer, amid growing reports that some key partners would be ousted or that the firm would dissolve, the 30-member management committee met to work out some differences. After that meeting, it was announced that the management committee had given a vote of confidence to its three co-managing partners, Mr. Kumble, Mr. Myerson and Mr. Washington. But at the same time it was announced that a five-member executive committee had been formed to oversee the day-to-day operations of the firm, to control its growth and to manage its debt.

Its rapid growth made it the fourth-largest law firm in the country. The three top law firms, in order of the number of lawyers they have, are: Banker & McKenzie, in Chicago; Jones, Day, Reavis & Pogue, in Cleveland, and Skadden Arps, Slate, Meagher & Flom, in New York.

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