The US Justice Department has accused Mr Richard Holbrooke, President Clinton's choice as principal diplomat at the UN, of a civil violation of federal ethics laws, the New York Times has reported. The alleged violation involved Mr Holbrooke's business contacts three years ago with the US embassy in South Korea.
Friends told the paper he balked at paying a fine of several thousand dollars demanded by the Justice Department because he believed he had done nothing wrong. Mr Holbrooke, as US special envoy to former Yugoslavia, is credited with bringing about the Dayton agreement that ended the war in Bosnia and, more recently, he played a key part in bringing about a ceasefire of sorts between Belgrade and the Kosovan Liberation Army rebels.
The Justice Department said it would consider filing a civil lawsuit against Mr Holbrooke, delaying his nomination to the UN post indefinitely, if he refused to pay the fine, the paper said.
A Justice Department official would say only that "the case is in the process of negotiation, and the negotiations hinge on a civil penalty".