Courts: She has rejected advice of her lawyers to accept $700,000 deal because it lacks apology from president. Change in legal team possible.
By DAVID G. SAVAGE, ROBERT L. JACKSON, Times Staff Writers

WASHINGTON--Paula Corbin Jones, the former Arkansas state employee who sued President Clinton for sexual harassment, has turned down a proposed $700,000 settlement because the offer does not include an apology from Clinton.
     In letters dated Aug. 19 and Aug. 28, her two Washington-based lawyers urged her to accept the offer, calling it the best deal that can be obtained.
     "This settlement is a total victory for you," they said in their most recent letter. The proposal calls for the money to be split between Jones and her lawyers.
     But Jones has balked, continuing to insist that Clinton apologize for his behavior in a Little Rock, Ark., hotel room in 1991. The proposed settlement says only that Jones did nothing wrong and is a person of good character.
     The dispute between Jones and her attorneys has grown more heated in recent days. Her two lawyers, Joseph Cammarata and Gilbert Davis, threatened to resign Friday, and Jones has said she will seek new lawyers to take the issue to trial.
     "They have tried to force Paula into a settlement that is all about money, and that's not what she cares about," said Susan Carpenter McMillan, a friend and spokeswoman for Jones, from her home in San Marino. Jones and her husband, Steve, now live in Long Beach.
     For their part, Davis and Cammarata have said they cannot afford the continued expense of pursuing Jones' lawsuit against the president, and several sources said they may petition the court as early as Monday to withdraw from the case.
     In a phone interview Friday, they refused to confirm details of their settlement talks.
     "We will neither confirm nor deny reports of any settlement discussions. That remains our policy," Davis said.
     However, sources close to Clinton's lawyer, Robert S. Bennett, confirmed Friday that members of his law firm have discussed settlement offers with Davis and Cammarata. They stressed, however, that no proposal has been agreed to by the president.
     In earlier comments, Bennett has said he could accept a deal that included money to pay Jones' legal costs. However, he also insisted the president would admit no wrongdoing. A large payment going directly to Jones would be unacceptable too, he said, because it would be "interpreted as an admission of wrongdoing" on Clinton's part.
     Despite the lawyers' efforts, Jones herself has proved to be the stumbling block in the settlement talks.
     "I admire her for it. She has stood up to them [the lawyers] and said no deal. She wants the truth to come out," said McMillan.
     In Little Rock two weeks ago, U.S. District Judge Susan Webber Wright cleared the lawsuit to go to trial in May. She rejected Bennett's motion to have the case dismissed.
     Outside the courtroom, however, Jones' lawyers were pressing her to accept the settlement offer immediately. On several occasions, they set deadlines for Jones to accept the offer, saying they would otherwise quit the case.
     "We have been interviewing other lawyers," McMillan said, an attorney who could negotiate "better language" or instead take the case to trial.
     The dispute in the Jones camp complicates matters for Clinton's lawyer as well. The president's legal team had hoped to either get the lawsuit thrown out of court or to arrange a settlement before trial. So far, the Supreme Court and Judge Wright have refused to throw out the suit, and Jones has refused to settle it.
     In May, the high court ruled unanimously that a sitting president can be sued and forced to stand trial on civil charges.
     White House advisors are reportedly divided on whether Clinton should agree to settle the case. Some oppose any settlement, saying it will be seen as an admission that Clinton did indeed make crude advances to Jones. Others, however, insist the continuing lawsuit is itself damaging and should be concluded as soon as possible.
     The recent pressure on Jones to agree to a settlement resulted in part from a deadline this weekend for her attorneys to explain why they wanted to take a sworn statement from Kathleen Willey, a former White House employee, whom they claim was once the object of a romantic approach by Clinton.
     A federal judge in Richmond, Va., had required Jones' attorneys to file their explanation under seal on Friday, which they did. But there was a possibility the judge might make it part of the public court record as soon as Monday. If that happened and if its contents led to further anger on the part of the White House, the Jones lawyers felt any settlement might be lost, according to one legal source.
     Willey has said through her lawyers that she resents the invasion of her privacy and has no information that could assist Paula Jones.