Following is the full text of two letters to Paula Jones from her first two lawyers, Joseph Cammarata and Gilbert K. Davis, in which the lawyers advise Jones to settle her sexual harassment suit with President Clinton. The letters were unsealed June 11, 1998. For more information, see the Post story.

6. There is a substantial possibility you may lose this case. This risk exists in most sexual harassment cases. It will be your word against his as to what happened in the room. If the jury, or the judge trying the case without a jury, is uncertain whom to believe then you lose because you have the burden of proof. Bear in mind defendant Clinton has persuaded millions of voters he is credible.

7. Them are pending motions to dismiss which could eliminate one or all of the four counts. Even if we win these motions, punitive damages, which represent $400,000 of your claim, are unlikely to be awarded. Compensatory damages for the President exposing himself on the one occasion would probably be very small and it will be difficult to show retribution by causing you to lose job benefits. If we do prove such loss of benefits, the sum necessary to compensate you will not be large.

8. Even if you win at trial there will likely be lengthy and expensive appeals.

9. We do not see the likelihood of very much money from outside sources to pursue everything we would like to do in developing the evidence and preparing for trial. Even if there was sufficient money available, it is foolish to pursue this case in the face of a full victory which this settlement provides.

10. Moreover, there will likely never be sufficient legal fees awarded by the court to fully discharge your obligation to us. This means it is very unlikely for you, without this settlement, to achieve any financial award directly from the case. You have received our bill for services rendered in this case through July 31, 1997, plus unreimbursed expenses through that date which totals, net after some payments, $759,870.40. This does not include any time and expenses for August. Further, you received detail on third-party payables which is now $28,747.61. Although our fees exceed the amount of the proposed payment of $700,000, we would be willing after payment of the expenses and third-party payables to divide, the settlement payment remaining by three (one third to you and one third to each of us) and we would take an assignment of any proceeds from any other ventures you pursue related to this case and the underlying allegations to discharge the remaining obligation. Under this arrangement, instead of receiving nothing from the $700,000, you would likely receive approximately $220,000. Given that the payment is in part for physical injuries, a portion of the payment may be nontaxable. You will have to check with your accountant to determine if your proceeds are taxable.

11. The financial situation is greatly worsened by refusing settlement, because of your contract obligation to pay fees and expenses on a current basis.

You told us this proposed settlement agreement is unacceptable for 2 reasons: 1) the agreement does not include an explicit admission by Bill Clinton that he was in the room with you at the Excelsior Hotel; and 2) the agreement does not include an explicit admission that he engaged in wrongful conduct which you allege. We believe this is an incorrect view of the inferences from Stipulation language. The settlement provides that you committed no sexual or improper conduct, that the allegations about you being a compliant sexual partner of Bill Clinton which are drawn from the American Spectator article are false (including Danny Ferguson's concession of its falsity and the President's strong implication that he has personal knowledge, i.e., that he was present in the room, to confirm that falsity). The settlement also provides that the defendants admit you suffered damage to your character (i.e., moral excellence) and reputation (your good name, which includes your truthfulness) and that such damage is regrettable. For the defendants to find regrettable the damage resulting from a false story serves to credit your truthfulness, your character and reputation, and to strongly suggest that they personally regret it (the closest one can expect them to give as an apology). And finally no money judgment could ever include such strong language which redeems your good character and reputation as does this language in the Stipulation.

We told you that the language is the very best that we could obtain, but that we would try for additional language and would make certain suggestions to opposing counsel. One suggestion was to have the defendants explicitly state their personal regret for the damage caused by the false allegations, another was to try to get the paragraph concerning "no admission of liability or wrongdoing" omitted despite this being a standard provision in such agreements, and also to put in language we asked to have admitted, in which the President, while not recalling, does not deny that he met you in the hotel on May 8, 1991. You said that none of these changes would be acceptable, separately, or even together.

Joe also called you on the evening of August 16 and left a message asking you to tell us whether adding the language "Whereas the plaintiff has alleged conduct by both defendants, with which she is upset, and each defendant regrets her feelings in this regard" to the stipulation would make the stipulation acceptable to you. In the message, Joe noted that we tried to get this language into the agreement, but it was specifically rejected by our opponents. We would be willing to try again, however it is unlikely we will be successful. Even if we are unsuccessful this does not change our view that the present proposal is a complete victory for you.

We again spoke to you and Steve, at great length Sunday night to be sure we knew your precise and complete view on settlement, and to once again answer your questions to persuade you to accept a resolution which benefits you, and is a full victory which the public will also perceive as a tremendous win by you.

To summarize the highlights of this second conversation:

A. We again explained the rationale for accepting settlement. and the grim consequences for refusal. We told you again that the money and language is the best you can get and more than if you are successful at trial and on appeal. Since you had a day to think, we asked you if you changed your mind and your answer was "No."

B. We asked if the following language would change your mind: "Whereas the plaintiff has alleged conduct by both defendants with which she is upset, and each defendant regrets her feelings in this regard." You indicated again this is insufficient.

C. What if they dropped the word "wrongdoing?" You said that is insufficient and that you need an affirmative explicit apology (presumably "I'm sorry for my bad acts") and an admission of wrongdoing. You conceded you know the President will never strictly apologize for his conduct.

D. The mention or omission of the amount of money spent, and adding the words "time and distress" of litigation to financial concern are "meaningless" changes, and therefore the present language is not a deal killer, you told us.

E. You again said you want better apology words to settle, but your desire, told to us on Saturday, to carry out the litigation for the purpose of punishing the defendants for their misconduct is no longer true, since you were upset at the time of our Saturday talk.

F. You understand that your present need for an apology was not sought for more than three years after the event and does nothing to enhance your reputation if you have already achieved an acknowledgment by the defendants that you did nothing wrong (contrary to the American Spectator's account). Your focus has thus changed from proving that you are a good person, to proving Clinton is a bad person. That was never before your objective in filing suit.

G. You said you understand that by not agreeing to this settlement, which your lawyers believe to be a win, you are asking your attorneys to carry on litigation at great hardship in time and expense (which could be used for other paying legal work), so as to try to obtain a lesser victory than what is now on the table, and which you understand you cannot achieve by carrying on the litigation.

H. You understand our view that you will get little or no money in your pocket later, compared to over $200,000, with some portion possibly tax free, now.

I. You understand that a very large potential obligation will be yours for future fees and expenses which remain unpaid by you or the legal fund.

J. You said you understand that the shelf-life of any value to the Affidavit is very limited, because it will soon have to be disclosed.

K. We told you to expect an "Offer for Judgment" from our opponents. This offer is permitted under the federal court rules (and would likely be exclusive of attorneys' fees which could be awarded to your attorneys by the Court). The concept is that the defendants would offer to take judgment against them for a specific amount. If you refuse the offer, and you obtain a lower amount in judgment at trial, all of the defendants’ costs from the date of the offer, including depositions, travel expenses, and the like, will be assessed against you and in favor of defendants Clinton and Ferguson (if Ferguson joins in the offer). This would operate as a judgment against you, and would be subject to all forms of collection, including garnishments and attachments.

L. We told you there am serious ethical problems for lawyers who continue litigation after all the client's interests can be reached by settlement. The effect is to "run-up" the defendants' expenses to achieve a result other than what the litigation is designed to obtain. We do have to examine our professional duties in this situation.

M. You said (through Steve) you would consider seeking independent counsel who has sexual harassment and litigation experience, and preferably also some political savvy, to predict what this proposed settlement means and how your reputation will likely be affected. We have told you that all is positive, in our view, but since you question our judgment on this, we urge you to get confidential advice from another attorney with whom we would be pleased to provide, with your authority, the necessary information to consider. Steve said he would call Gil by 12:00 noon yesterday to give him the decision on getting outside advice. We did not hear either way from you by that time or after.

We again very strongly recommended to you the acceptance of this resolution of the litigation. In addition to what we have already said above, our continuing recommendation is based on the following:

Although Section 1983 civil rights actions, such as those alleged in your Counts I and II, permit the recovery of attorneys' fees and costs, the amounts awarded are never the full amount expended, and are usually tied to the amount of recovery. In addition, the Court will automatically reduce the attorneys’ fees and costs for any time expended toward the defamation and intentional infliction of emotional distress causes of action, since attorneys’ fees and costs are not permitted to be recovered under those causes of action. It is possible the Court will reduce by 1/2 or 2/3 the full amount on that justification alone. For example, if $1.5 million in fees are incurred by you by the time of trial and you receive a verdict of $25,000, the Court may reduce the attorneys' fees and costs by 1/2 to 2/3 of the $1.5 million (a $750,000 to $1 million reduction) for the state torts, then another large amount because the $25,000 recovery may be considered by the judge as relatively small, given the ad damnum (the amount sued for). Notwithstanding what the Court awards in attorneys' fees and costs, that does not change your obligation for the full amount charged by us, less anything paid from the fund. This means that even if the Court did not up front reduce the fees by 1/2 or 2/3, but only reduced the total attorneys' fees by $25,000, you would end up with no money if you received a verdict of $25,000 or less. The Court is likely to reduce the award by at least several hundred thousand dollars, if not substantially more. Even if you were to receive the full amount of the ad damnum , and you were permitted to hold on to it through post-trial motions and appeals, it is very possible the Court will reduce the attorneys' fees award by an amount greater than $700,000 because of the state torts, which would still leave you with no money.

You know we have worked very hard under great, financial and time constraints to get to this point. Although carrying this case to trial would mean much more money down the line for us, we take our professional responsibilities to you very seriously and they are of utmost importance to us. You come out way ahead in this scenario of settlement. We would welcome you to suggest another, other than this settlement, where you would come out as well.

Time is of the essence primarily because of the need to send the "Willey Response" to her notion to quash on Tuesday, September 2 for filing by the Wednesday deadline. This response, because of what must be said in it, once filed, will kill all deal prospects, according to our opponents. We believe them.

We have previously discussed all the reasons why the proposed settlement is great for you and is a complete victory. There is no need here to again fully restate the these reasons (please reread our letter of August 19), although some highlights may help you as you think things over this weekend.

First, you are wrong that the language is bad for you. This language is absolutely necessary to include in the settlement because it satisfies your publicly stated concerns when you filed suit, and it fully redeems your reputation by the defendants' confirmation of the false allegations about you in the American Spectator. Remember, this case is about you and your reputation and not about the conduct or reputation of Bill Clinton or Danny Ferguson. You brought this case to clear your name, not to prove that they are "bad people." Your reputation and conduct have always been the focus of this case and that is why you are the focus of the language in the settlement. You have admitted correctly that our opponents will never confess to wrongdoing. We have no need for them to do so to re-establish your reputation.

Second, there is, in our opinion, virtually no hope for such favorable settlement terms later in the litigation, after the President has sustained his damage from pretrial proceedings and discovery; when additional defense expenses have been incurred; and after the defense realizes that $175,000 of the amount sued for is out of the case.

Third, chasing after a longer victory is folly in light of the fees and expenses you personally will have to pay pursuant to your legal services contract with us, especially since Legal Fund receipts have not met expectations. You are fortunate that you do not have to incur future fees and expenses if you settle now. You are able now to declare a complete victory as against an expensive, minor victory or possible loss, during the course of which your reputation will suffer grievously from your opponents’ contentions about you during pretrial discovery. In that regard we have learned that a former boyfriend, whom you know well, and several others, will testify about the supposed event about which we have previously told you. These matters will be brought out by Mr. Ferguson to show that you allegedly did not enjoy a good reputation, an essential element of your defamation claim against Mr. Ferguson. You put your reputation at great risk when you reject this settlement proposal.

Fourth, the Court dismissed your claims for defamation against Mr. Clinton, and for due process violations against both defendants, including false imprisonment and reputation loss. These claims are the only ones for which there is insurance. However, we determined last week that our opponents are still willing to hold open the offer temporarily, contingent upon your willingness to accept the terms as previously stated and thereafter their final review and decision. The proposal still includes a $700,000 payment.

Fifth, payment to you of the $700,000 under this scenario is now more than the largest amount you could possibly obtain from Mr. Clinton at trial. The largest possible recovery at trial is now $525,000. We believe, as we have often told you, the most likely verdict would be much less than that amount. We estimated a maximum verdict of $50,000 and now likely it will be much less, it the jury gives you any judgment at all.

Sixth, another significant benefit of the settlement is that you will not be subjected to Mr. Ferguson's efforts to show that you could not be defamed, because of an alleged scandalous sexual past that he claims is known by others. Instead, Mr. Ferguson appears willing to agree to settlement language which strongly implies that he lied to the American Spectator regarding the "girlfriend" statement.

Seventh, your reputation for truthfulness is no longer at issue in the case against Mr. Clinton because the claim has been dismissed in which you were called a "liar," and also because the court dismissed your claim for liberty interest in reputation. A trial therefor cannot redeem your good name and reputation for truthfulness. Your reputation was the reason for filing this lawsuit! Since your damages against Mr. Clinton cannot include loss of that reputation, you now may only recover for emotional distress arising out of the incident itself (and any effect on your job), and for lost wages or benefits. Please note we may not be able to prove lost wages or benefits, and thus our expectation of a damage award is further reduced.

Eighth, the Court, in its Memorandum and Order of December 28, 1994, noted this "lawsuit came about in an effort to clear [your] name or allegations of sexual activity involving then Governor Clinton." As we have told you, the proposed settlement clears your good name!

Ninth, this settlement will put money into your pocket as we explained in our August 19 letter. In our opinion, you will never again be able to obtain money for yourself and your family directly from the lawsuit itself. You will also lose all possible money from the sale of the Affidavit.

In sum, we have obtained for you a proposed settlement package which is a complete victory for you, not only financially, but also with respect to your interest in redeeming your reputation and character. You could not get such a victory at trial. As lawyers, we have obtained all that we could ever obtain for you even with the most favorable trial result possible. You have rejected the settlement offer against our very strong recommendation on to accept it. We cannot ethically pursue expensive, time-consuming litigation where a settlement now would achieve every legitimate goal, and where continued litigation would be perceived (rightly or wrongly) as primarily a matter of political hatred or spite.

You have had, to date, no immediate personal financial stake in the financing of this litigation, and you may therefor have no sense or the financial risks of the litigation. We cannot continue to advance fees and expenses to achieve, at your urging, what will be a lesser victory for you, or perhaps a loss. Stephen asked, on August 22, if our recommendation to accept the settlement would be different if we were being paid on a current basis. As we told him then and previously told you in our August 19 letter, our recommendation would be the same because this settlement is an absolute victory for you.

There is no prejudice to you and your case by our withdrawal because the case is just commencing at the trial level and you can obtain other counsel to pursue it. You must notify, as will we, any other counsel, and the Legal Fund, of our lien for attorneys' fees and costs on any money received until our fees and costs are fully paid. You should begin immediately to obtain other counsel. We will fully cooperate to provide a smooth transition.

We deeply regret the necessity of seeking withdrawal. We will prepare and file a motion to withdraw with the Court on Wednesday, September 3, 1997. In the motion we will cite irreconcilable differences as the reason for withdrawal and inform the Court that if further amplification is necessary we want to provide it in chambers, and not in open court. The court could refuse this request. Our only public statement concerning our withdrawal, if we are not required to speak in open court, will be that it was for reasons that we will not disclose which have nothing to do with the legal merits of your case, in which we continue to have full confidence.

We must, however, caution you that the press has an intense interest in this case, and somehow confidential matters often become public. For example, our opponents could possibly, perhaps probably, allege your attorneys’ withdrawal as motivated by your refusal to settle for terms which both satisfy your professed reputation interest and spare national agony of a protracted trial of the President on whom millions depend. Regardless of the facts, our opponents may portray your refusal as a money-grubbing attempt to further develop this story for profitable book rights, and portray you as inspired and under the influence of right-wing Clinton-haters. A perception of greed and hatred on your part will lose the public relations battle for your good name for which your lawyers have worked long and hard to build up.

Beyond our own frustration and disappointment about the likely consequences of refusing to settle for the great victory we have made possible, we are truly sad to be unable to persuade you to take action which would put you "on top." We fear your refusal will likely irretrievably lose for you the very reputation and good name for which we have successfully fought. We strongly recommend that you reconsider the course you are taking and agree to accept this terrific suggested settlement.

Paula, the decision whether or not to settle your claims is always your decision and your decision alone. Our withdrawal as your counsel, so many months before trial, cannot and should not pressure you to accept a settlement with which you am not satisfied, even though we believe you should be completely satisfied with the settlement term now "on the table." If however, you do decide to accept the proposed settlement please let us know by 12:00 noon, Eastern Daylight Time, Tuesday, September 2, 1997 or earlier. If you decide to accept the settlement and we hear from you by then, we will continue to represent you through the settlement process and bring the matter to closure. If we do not hear from you by that time, we will send out the withdrawal notice to counsel for all parties and the court together with our motion to withdraw. You will be advised of the hearing date, an soon as we know it, so that you may attend the hearing to state your consent or opposition to the withdrawal. If you consent, please advise us and we will prepare a pleading which you may sign confirming your consent to our withdrawal. This may eliminate your need to attend the hearing.

If you persist in refusing the proposed settlement - which is your absolute right - we again urge you to immediately obtain the services of replacement counsel and to advise us of the identity, address and phone number of your new counsel.

Very truly yours,

Gilbert K. Davis
Joseph Cammarata

P.S. Paula, despite this action which we believe to be necessary we want you to know that we have enjoyed representing you and appreciate the confidence you have shown in us. It has been an honor to represent someone we believed embodied the American spirit. We wish you the best of luck as you move forward with your case.