PUNCTURING AN AIDS INITIATIVE AT LAST MINUTE, WHITE HOUSE POLITICAL FEARS
KILLED NEEDLE FUNDING

At 8:30 a.m. on Monday, Health and Human Services Secretary Donna E.
Shalala was huddled with her top scientific advisers, preparing for a news
conference later that morning in which she planned to announce that federal
funds could be used for needle-exchange programs.

A news release announcing the long-debated decision was ready. So were
talking points for the secretary's case: Federal funding could start
flowing because there was now conclusive research that needle exchanges
slowed the spread of AIDS without encouraging drug use.

"The evidence is airtight," Shalala planned to say, according to a copy of
the talking points.

But the decision was not as airtight as Shalala and her staff believed.
Shortly before 9 a.m., she was called out of the meeting for a phone call
from White House Chief of Staff Erskine B. Bowles. The needle-exchange
decision, he told Shalala, was proving too politically risky. President
Clinton had changed his mind.

So the secretary quickly changed hers. When Shalala, joined by her visibly
uncomfortable advisers, faced reporters at midday, it was to announce that
federal funds would not be used to support needle-exchange programs.

The last-minute reversal over paying for clean needles for addicts offers a
vivid view into decision-making in Clinton's second term, according to
several administration officials in the White House and other agencies.

In one sense, the decision reflects lessons learned after five years.
Unlike the early days of his tenure, when Clinton became ensnared in
controversies over gun control and gays in the military, he is determined
to avoid giving his opponents any openings against him on lightning-rod
issues. If Clinton had approved needle funding, White House aides contend,
Congress would have overturned the decision, scorching the administration
while doing nothing to combat AIDS.

But the needle decision also shows that Clinton, even with a more seasoned
staff and organizational structure beneath him, is still prone to
last-minute agonizing that leaves Cabinet members unsure what to expect of
him.

In the debate over how to fight AIDS, needle-exchange programs have been
particularly divisive. The idea is to slow the spread of HIV among
intravenous drug users -- and to their sex partners and children -- by
giving them clean syringes, thus lessening the number of addicts who
contract the virus by sharing dirty needles. But the programs have many
critics, largely conservative, who contend they essentially condone illegal
drug use by handing free needles to addicts.

While avoiding a showdown with Republicans on Capitol Hill, the
administration's retreat on funding the programs enraged many AIDS
activists and researchers who felt betrayed on the brink of a long-sought
victory.

"The politics of this issue . . . overshadowed the fact that lives can be
saved," said Winnie Stachelberg, political director of the Human Rights
Campaign.

Yesterday, a few dozen patients and activists brought their anger directly
to HHS, picketing the agency's headquarters on Independence Avenue SW.

Within the White House, advisers said they were resigned to the criticism
on what they considered a no-win issue. "This was a case of pick your
poison," said one senior official who worked closely on the needle issue.

Clinton also had to pick between two members of his Cabinet. Shalala, like
most of the administration's senior health officials, argued that
needle-exchange programs are sensible. Barry R. McCaffrey, the retired
general who heads the Office of National Drug Control Policy, warned that
funding needles would send a devastating message about the administration's
commitment to fighting drugs. Both made their cases vociferously in memos
and in person to Clinton.

Vice President Gore, according to officials in the White House and other
agencies, had sided with Shalala in favor of the programs, believing that
the inevitable political flak the decision would incite was worth
absorbing. But Rahm Emanuel, a senior Clinton adviser, warned that the
political risks were foolhardy.

Domestic policy adviser Bruce Reed was left to arbitrate the conflict and
divine the president's true wishes.

When Clinton left a week ago for a summit in Chile, Clinton had given
subordinates the clear sense that he was ready to move forward with some
kind of federal funding for needle exchanges -- though exactly what was
still open to question. In a meeting in Bowles's office last Thursday,
according to several officials, the chief of staff told Reed and Shalala to
proceed on the assumption there would be some federal funding and to
continue working on the details. Bowles cautioned that Clinton had not yet
made a final decision.

Meanwhile, bureaucratic warfare continued. Officials at the drug control
policy office suspected they were being deliberately kept out of the loop.
The drug agency had not been invited to a Roosevelt Room meeting Friday to
discuss how to announce the decision. James McDonough, a deputy of
McCaffrey, found out about the meeting anyway and walked in halfway
through, according to several officials.

HHS officials, meanwhile, were livid at McCaffrey. They were convinced his
office was leaking information about administration deliberations to
subvert Clinton's anticipated decision. In addition, White House and agency
officials were certain that he was urging congressional Republicans to
speak out early against paying for needles.

One of the offices to get a call was that of Rep. J. Dennis Hastert
(R-Ill.), chairman of the House speaker's task force for a drug-free
America. "We heard from a number of administration sources that, if you at
least want to delay the announcement and perhaps affect the final outcome,
get the word out," Hastert's spokesman said yesterday.

Friday, while Hastert was traveling with Clinton in Chile, the
congressman's office issued a statement denouncing the prospect of lifting
the funding ban. McDonough said the drug control agency is by its charter
supposed to work with both parties. While McCaffrey made his views known,
he said, the director did not try to undermine Clinton.

"General McCaffrey constantly keeps the Congress informed of where he
stands on the drug issue," McDonough said. "He is not reticent in defining
his concerns."

HHS officials continued on the belief that they had triumphed over
McCaffrey. HHS and the White House told AIDS activists to expect good news
at the Monday news conference. All last weekend, officials faxed Reed
documents at his home laying out various ideas to explain the decision. At
one stage, the idea was to allow federal funds on a demonstration basis in
eight cities.

Shalala knew that reporters would ask if politics affected the decision.
"Absolutely not," she planned to say, according to the talking points.
"From the beginning of this effort, it has been about science, science,
science."

She and her aides did not know that Clinton's mind was turning. On the
plane ride to Chile, officials said, the strong-willed McCaffrey had
further pressed his case. In addition, Clinton told aides he had read a
persuasive letter against needle exchanges from former health, education
and welfare secretary Joseph A. Califano Jr.

Flying back to Washington late Sunday night, Clinton made his decision.
Caught by surprise, HHS canceled the full-scale news conference it had
planned and replaced it with a small briefing at which no cameras were
allowed.

With the new federal imprimatur that needle exchanges are scientifically
sound, Shalala announced, state and local governments and community groups
should feel free to move ahead with them. Today, the George Soros
Foundation plans to announce that it will give $1 million in matching
grants to needle exchanges across the United States. But the ban on federal
funds, Shalala said, would remain in place.

Staff writer Maria Elena Fernandez contributed to this report.

) Copyright 1998 The Washington Post Company