Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, September 16, 1994                   TAG: 9409160069
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-2   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

WHITE HOUSE PULLS OUT OF CHURCH CASE

The department had filed legal papers in the bankruptcy case this spring, contending that financially troubled parishioners had no right to make donations to their church a year before filing for bankruptcy.

But the White House said Clinton told Attorney General Janet Reno on Wednesday to pull out of the case. The department withdrew shortly before the 8th U.S. Circuit Court of Appeals started oral arguments on the matter Thursday morning in St. Louis.

``This is consistent with his personal interest and his record in support of religious freedom,'' said Phil Lader, Clinton's deputy chief of staff.

The case is a major test of the Religious Freedom Restoration Act, passed last year, and religious freedom groups were outraged when the Justice Department intervened.

At issue is $13,500 that Bruce and Nancy Young gave to the Crystal Evangelical Free Church of New Hope, Minn., in the year before they filed for bankruptcy.

A judge ruled that because the Youngs got nothing of value for the donations, the offerings amounted to a fraudulent transfer of their assets.

Lawyers for the church, however, say that contributing money to a church is an act of worship protected by the new law, which says government must have a ``compelling interest'' to interfere with religious practices.

``President Clinton has proven that he is sincerely committed to meaningful legal protection for religious exercise,'' said Steve McFarland, director of the Christian Legal Society's Center for Law and Religious Freedom.

The Justice Department issued a statement saying that Clinton thought it had interpreted the religious freedom law too narrowly.