The New York Daily News reports that the long-awaited Barrett report on the investigation into Henry Cisneros will claim that the Clinton administration actively covered up a tax-fraud case against the former HUD Secretary, and that the Hillary crony in charge of the IRS at that time played a key role in killing the investigation:

A special prosecutor's long-delayed report charges that a coverup at senior levels of the Clinton administration killed a tax fraud case against ex-cabinet member Henry Cisneros, the Daily News has learned.

David Barrett's 11-year, $23 million probe, which will be released tomorrow, states in stinging terms that this Clinton coverup succeeded.

Cisneros was forced to admit in 1999 that he had made secret payments to a mistress before serving as Clinton's secretary of Housing and Urban Development.

Barrett investigated tax fraud charges stemming from those under-the-table payments.

Then-IRS Commissioner Peggy Richardson, a close friend of Sen. Hillary Clinton (D-N.Y.), was involved in efforts to quash the probe, a source close to the case alleged.

But Richardson's role was cut from Barrett's report, which went through 26 drafts, because Democratic law firm Williams & Connolly successfully pressured Barrett to remove a section of the report naming her, a source said.

In a strange twist to the case, Cisneros' defense attorney now works at the IRS as chief of internal affairs. Cono Namorato refused to comment on the allegations in the Barrett report. Barrett alleges that Richardson and Barry Finkelstein, an attorney with the IRS, fixed the probe by assigning it to two low-level, inexperienced attorneys. A whistleblower, IRS criminal investigatgor James Filan, tried to blow the cover-up out of the water, but in the end did not succeed.

The report, if the Daily News has its facts straight, will prove explosive to the 2006 re-election effort of Hillary Clinton, but even more damaging to her expected run at the Presidency in 2008. For instance, Williams and Connolly not only represents Cisneros in this probe, but also has as clients a couple named Bill and Hillary Clinton. It seems as though burying this report and getting a series of redactions helps a number of their clients out, a kind of anti-conflict of interest in this case. And it seems more than passingly strange that Cono Namorato winds up running the IRS division that would have been tasked with discovering a cover-up and malfeasance involving a former client after he gets done representing him.

Someone has a lot of explaining to do. And while she tries to come up with an explanation, this will remind everyone what a "culture of corruption" really looks like, as this will bring up the ethical morass of the Clinton years all over again. The Democrats may well have to rethink their electoral theme for 2006 -- again.

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