Judicial Watch, a public-interest legal group says it will re-institute its lawsuit against State Farm Insurance in an attempt to stop the company from handing out funds to President Clinton for use in paying the Paula Jones settlement.

State Farm had been paying for Clinton’s legal fees in the Paula Jones matter since November 1995, even though Clinton wasn’t covered for sexual harassment suits. However, after a class-action lawsuit filed by Judicial Watch. was filed, State Farm was forced to discontinue making payments for Clinton’s legal fees on Sept. 8, 1997.

However, State Farm is once again considering handing out funds for the president’s defense according to published reports, and Judicial Watch is set on making sure the president doesn’t benefit.

“Judicial Watch, through its client Tom Flocco (a State Farm policy holder), will seek to prevent any settlement involving monies provided by State Farm,” said Judicial Watch Chairman Larry Klayman.

Dan Michaelis, a spokesperson for Judicial Watch, wanted to make it clear that although the lawsuit is attempting to block funds to the president, it in no way is trying to interfere with Jones’ settlement. It is only trying to make the president responsible for his own actions.

“The president should take out a bank loan,” said Michaelis.

Another issue pertaining to the State Farm funds, though, concerns alleged abuse of power in the Clinton White House. In a letter to Rep. Henry Hyde, R-IL, chairman of the House Judiciary Committee, Flocco wrote that there was an “alleged abuse of power and extortion, in that Mr. Clinton’s agents advertised widely in the press that they had hired Covington and Burling to prepare a lawsuit against my insurance company, State Farm, and also Chubb Insurance in order to force them to resume paying his (Clinton’s) legal bills in the Paula Jones matter.”

Interestingly enough, not only is State Farm contemplating giving the president his legal funds at this time, but shortly after the president threatened to file suit at the end last May, Chubb Insurance Corporation had already agreed to continue payment for the president’s legal bills.

“President Clinton is not entitled to any special advantages in paying his legal debts,” said Klayman. “And he certainly is not entitled to bilk State Farm policy holders in order to cover up his bad conduct.”

Klayman went on to say that his organization was determined to see to it that the State Farm policy holders were paid back for any funds used by the insurance company for the president’s settlement with Paula Jones. “For once in his life, Clinton must accept responsibility and pay the settlement himself, rather than relying on entities which want to buy his favor — like the insurance industry,” Klayman said.

A key issue in Flocco’s complaint is that, as president, Clinton is in a position to influence insurance industry regulations. Therefore, Judicial Watch considers it a conflict of interest and abuse of power for the president to apply legal and political pressure on individual insurance companies to give him what some regard as preferential treatment.

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