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read The Judicial Watch Interim Report covering Filegate, IRS-Gate, Commercegate/Chinagate, and Trust-Gate (Crimes and Other Offenses Relating to The Presidential Legal Expense Trust)
(Very extensive coverage of Chinagate is available in the China chapter.)
View the Clinger-Burton Travelgate report here.
``James Madison said among the grounds for the impeachment of someone would be `failure to superintend the excesses of subordinates.' Leaving aside 900 FBI files winding up in the White House, we have the experience recently of a member of the White House staff, Sidney Blumenthal, calling journalists in an attempt to smear Henry Hyde (Chairman of the House Judiciary Committee).''
-George Will, CFR, TLC, Bilderberger
from TPDX 1998-Dec-23, by Royce C. Lamberth, United States District Judge, here is his latest Memorandum Opinion on the Department of Commerce's document stonewall. Excerpts:
On February 27, 1996, Judicial Watch noticed the deposition of Secretary of Commerce Brown, to be held on March 28, 1996. On March 14, 1996, Secretary Brown, in a sworn declaration, claimed not to be in possession of any documents responsive to plaintiff's FOIA requests, and also claimed to have played no role in determining the scope of the DOC's search, assertions which were cast in doubt by subsequent testimony. The Secretary's deposition was stayed temporarily to permit discovery from other DOC personnel, in an effort to avoid interfering with the Secretary's schedule unless other avenues of discovery proved inadequate. On April 3, 1996, Secretary Brown was killed in a plane crash during the trade mission to Bosnia and Croatia. Had he lived, he may have been able to respond to questions raised by the subsequent testimony of his business partner and confidante Nolanda Hill (discussed below).
In any event, the events that transpired in his office after the news of his untimely death arrived in Washington would themselves later be a focus of Judicial Watch's discovery efforts. Subsequent depositions revealed a flurry of document shredding in the Secretary's office, as well as easy access to the office by the Secretary's family and coworkers, which lend plausibility to Judicial Watch's claims that documents were unlawfully removed and destroyed after the Secretary's death.
The highest drama in this litigation was supplied by Nolanda Hill, former business partner and confidante of Secretary Brown:
On January 28, 1998, Hill submitted under seal a sworn declaration detailing her knowledge of the Department of Commerce's handling of Judicial Watch's FOIA requests, information that she allegedly obtained through her relationship with Secretary Brown. Stating that she was concerned about retaliatory actions by the government, Hill requested that the Court provide mechanisms for her protection. Pursuant to that request, the Court ordered that the affidavit be initially kept under seal and saw to it that her attorney was made aware of the situation and was willing to represent and protect her interests in this matter. An evidentiary hearing was then scheduled for March 23, 1998.
On March 14, 1998, Hill was indicted on criminal charges. Although an investigation had been underway before Hill offered to testify in this case, Judicial Watch claims that the government had represented to Hill that charges would not be filed, and that the March 14, 1998 indictment was in retaliation for her cooperation with Judicial Watch.
On March 23, 1998, Hill appeared before this Court and gave extensive testimony as to her knowledge, gained from communications with Secretary Brown, relating to this action.(6) Upon examination by Mr. Klayman, Hill testified that the Secretary told her that White House officials had actually instructed him to delay the production of documents responsive to Judicial Watch's requests and to come up with a way to avoid compliance with this Court's orders. See Transcript of March 23, 1998 Hearing at 85. Hill vividly recalled the Secretary's comment that Leon Panetta (then White House Chief of Staff) had urged him to "slow pedal" the document search. See id. at 85-86. According to Hill, this message was conveyed to Secretary Brown by Panetta and by John Podesta (then White House Deputy Chief of Staff) on several occasions. See id. at 85-88.
Although the Court declines to end this long and extraordinary litigation today, it is now appropriate to set in motion the beginning of the end. The DOC's unprecedented motion for entry of judgment against itself will be denied, but partial summary judgment will be entered in favor of Judicial Watch and the DOC will be ordered to perform a rigorously monitored new search. In addition, further discovery under the close supervision of a Magistrate Judge will be authorized.
from TPDL 1998-Dec-29, from the Wall Street Journal:
'Disregard for the Law'
Here's a question philosophers have pondered through the ages: If someone were to fire a cannonball up Pennsylvania Avenue, would anyone hear it? Or to put it differently, Is it true that trees only talk to one another? We raise these mysteries after observing that not much of anyone in Washington beyond a few reporters seems to have noticed that on December 22 a federal district judge denounced the behavior of a group of Clintonesque former Commerce Department officials as akin to "hooligans" and "scofflaws." What's more, he said the department's handling of a lawsuit over the late Ron Brown's trade junkets has been so untrustworthy that he is appointing a special magistrate to keep an eye on them.
Judge Royce Lamberth found that the facts "strongly substantiate the claim that the agency was deliberately destroying and jettisoning documents," ending "in a flurry of document shredding" in Secretary Brown's office after his death in Bosnia in April 1996. He describes the department's four years of legal stonewalling as an "egregious . . . disregard for the law."
Again, one must ponder the Beltway's apparently eternal mysteries: Does anyone connect the dots down there anymore, or do all the capital's solons and scribes really believe the whole issue is just Bill Clinton's pattycake habits?
It's been four years since Judicial Watch, a conservative legal watchdog group, filed suit under the Freedom of Information Act requesting documents on Ron Brown's foreign trade missions and the possible linkage of seats on them to political contributions. This was the scandal that flushed Democratic fund-raiser John Huang out of hiding and into a federal deposition a week before the 1996 election.
Commerce had good reason to destroy documents. Back in 1996, even the preliminary memos that Judicial Watch had uncovered were judged by Charles Lewis of the liberal Center for Public Integrity "to support the notion that favorable treatment was given to friends of Ron Brown, Bill Clinton and the Democratic Party." "Seemingly everywhere Judicial Watch looked, there lurked some piece of Commerce dirty laundry," Judge Lamberth notes. Oh, and as to the all-purpose dismissal of Judicial Watch's lawyer Larry Klayman as a pest, the judge laconically observes, "The DOC appears to have demonstrated a disregard for the law that cannot be explained even by the idiosyncrasies of Judicial Watch's counsel."
The stench from Commerce's soiled laundry eventually became so great that the Clinton Administration capitulated in August 1997 and asked for judgment against itself, offering to pay $2 million in legal fees to Judicial Watch and to initiate a new document search. Judicial Watch took the unprecedented step of opposing the motion, claiming Commerce had proven it couldn't be trusted. And Judge Lamberth agreed:
"Almost ironically, the DOC's motion must be denied, not because the evidence fails to establish that the government's conduct was unreasonable, but because the record of misconduct in this case is so egregious and so extensive that merely granting the DOC's motion and ordering a new search would fail to hold the agency fully accountable for the serious violations that it appears to have deliberately committed. . . ."
Judge Lamberth has now ordered a new search of government records under the close supervision of a federal magistrate. He also allowed a motion to compel new testimony by Mr. Huang, the former Commerce official, because "little of his deposition testimony is particularly credible." The Justice Department was also criticized for having "repeatedly denied" requests for a legible copy of the desk diary Mr. Huang had kept at Commerce. Judge Lamberth specifically ordered Attorney General Janet Reno to provide Judicial Watch with a legible copy of Mr. Huang's diary.
In short, the Clinton Administration's common practice of misusing the good-faith patience inherent in the legal system's procedures has run up against one public official with the courage and the authority to order it stopped. Judge Lamberth's blunt and clear criticism stands in contrast with a post-modern Beltway culture more prone to merely smirking at the Clintonites' brazenness or fluttering anxiously over it.
The documents that Judicial Watch is really after probably no longer exist. Nolanda Hill, a former business partner and confidante of Secretary Brown, testified this past April that shortly before his death Mr. Brown showed her a packet of documents that he said had been retrieved from Commerce files during the search for Judicial Watch's FOIA requests. Ms. Hill reviewed the top five or six documents and saw they were copies of letters to trade mission participants specifically referencing their donations to the DNC. The documents have never been seen since, and Judge Lamberth notes that Ms. Hill, who is now under federal indictment for tax evasion, "has never been questioned by anyone" from the government about what she saw.
"On many occasions," Judge Lamberth concluded, "the DOC appears to have engaged in the illegal withholding of responsive documents, in the removal of such documents from the DOC, and in the destruction of potentially responsive documents in the office of the late Secretary Brown and elsewhere, as well as a great deal of misconduct during the litigation, which the Court leaves for another day's decision."
We'd say that a week or so from now is an ideal time to take up these matters, which are perfectly relevant to the core issue of conduct that is now before us.
from TPDL 1998-Oct-17, from Insight, By Timothy W. Maier:
Klayman Report No Bedtime Story
Judicial Watch has been compiling a document of Clinton-
administration injustice that is proving to be nearly as juicy - if not as salacious - as the Kenneth Starr report.
few months ago two FBI agents paid a visit to the Washington office of Larry Klayman, the former Justice Department prosecutor who now heads Judicial Watch, a conservative legal-ethics watchdog group. They weren't after Klayman, but rather were seeking evidence he had gathered in his lawsuits against the Clinton administration concerning illegal fund-raising. But Klayman is no patsy. He has been down this road before, with congressional investigators claiming to be interested in the volumes of documents collected by Judicial Watch about the alleged sale of seats on Commerce Department trade trips and its collection of potential blackmail materials concerning Filegate and IRS abuses.
"I was skeptical but polite to the agents," Klayman tells Insight. "They told me they were going to subpoena some of the corporate people who went on the trade trips." Klayman would like that. Hauling in such corporate giants as Bernard Schwartz, the chief executive officer of Loral Space & Communications who was the biggest Democratic donor, undoubtedly would shed more light on whether Commerce trade trips were sold for campaign donations, which Klayman suspects. Klayman already has the deposition of the late commerce secretary Ron Brown's assistant Nolanda Hill, saying this and more -- not only that first lady Hillary Rodham Clinton devised the ticket-to-ride scheme for campaign contributors, but that it was she who moved Democratic National Committee fund-raiser John Huang into a key Commerce post in charge of large Asian contracts. Recently Klayman phoned one of the FBI agents who had called on him for help and asked if the Justice Department followed through with the promised subpoenas. The former federal prosecutor says the agent told him he could not discuss it. Klayman pressed. "Can you tell me at least this," he pleaded. "Are you happy with what's happening?" The agent paused and then replied, "Let's put it this way: I am thinking of resigning. You know how politics and the justice system work." To Klayman, this hardly was news. As Insight reported earlier this year, FBI Director Louis Freeh is among those who have entertained thoughts of stepping down because of frustration about politics within the Justice Department that has prevented him from probing the campaign-finance mess. Freeh has held off while he waits to learn whether Attorney General Janet Reno's 90-day inquiry into the fund-raising roles of both Clinton and Vice President Al Gore will trigger the independent-counsel statute. Nonetheless, Klayman remains optimistic, especially since Georgia Republican Rep. Bob Barr has introduced Judicial Watch's interim report, "Crimes and Other Offenses Committed by President Bill Clinton Warranting His Impeachment and Removal From Elected Office," into the official record of the House Judiciary Committee's impeachment hearings. The 145-page Klayman document, plus some 4,000 pages of supporting evidence and documentation, deals with Chinagate, Taxgate, Filegate and Trustgate, a reference to suspected illegal use of Clinton's legal-defense fund. The evidence is based on Judicial Watch's 20 ongoing civil lawsuits involving the Clinton administration, including Huang's exclusive deposition concerning the raising of some $2 million for Democratic campaigns -- much of it returned because of its dishonest origins. "No longer can Democrats and other apologists claim that the Clinton scandals only concern sex," Klayman announced after his report was accepted by the Judiciary Committee. "A review of the Judicial Watch report, which is endorsed by the House Judiciary Committee and complements the Starr report in setting the parameters for the impeachment inquiry, establishes that Clinton must answer for his conduct concerning the invasion of privacy rights of American citizens; the sale of seats and likely breaches of national security on trade missions; the misuse of the IRS to retaliate against perceived adversaries; and the illegal solicitation and receipt of monies into his legal-defense funds, which in the case of Charlie Trie resulted in more than $600,000 in Chinese cash being laundered at a time that the White House was passing national- security information to Trie." More recently Klayman has sought criminal indictments against former White House chief of staff Leon Panetta and Deputy Chief of Staff John Podesta in connection with the Chinagate scandal. Klayman claims they tried to conceal documents suggesting that seats on Commerce Department trade missions were for sale for $50,000 contributions to the Democratic Party. Hill swore to that fact in her deposition taken by Judicial Watch. A federal judge since has granted Klayman permission to demonstrate a motion to show cause that would require Panetta and Podesta to explain their roles in the alleged trade-mission coverup scheme. While Klayman is expected to file that motion soon, friends of the White House maintain he is on a fishing expedition, contending his report is short on facts and full of innuendo and unsubstantiated allegations. They naturally fulminate with special fury at the linking of Clinton or Gore to illegal activities . During the course of Klayman's pending lawsuits on these issues he has been threatened with slander lawsuits by Clinton strategist James Carville. Klayman had deposed Carville, who derides the Judicial Watch chief as a "little twerp." Another Clinton partisan, CNBC entertainer Geraldo Rivera, characterizes Klayman as a legal wild man but one who sounds "shockingly reasonable." Name-calling aside, the question is whether Klayman's report, for all of its damning detail, will have much of an impact on the impeachment hearings. The report details alleged widespread abuse of power by the Clinton administration. Its strength, as the former prosecutor sees it, is the evidence concerning those trade-trip donations. Here the hard evidence speaks volumes -- from Hill's deposition, which fingers Hillary Clinton as the mastermind behind the plot -- to the role of Huang and the favoritism granted Schwartz and Loral Space & Communications, now under a Justice Department probe for allegedly enhancing Beijing's ballistic-missile technology. Boston University Law School Dean Ronald A. Cass, who served Presidents Reagan and Bush as vice chairman of the International Trade Commission from 1987 to 1990, characterizes parts of Klayman's report as a "collection of rumor and innuendo," with no direct proof that Clinton had knowledge of any wrongdoing. As with Reagan during Iran-Contra, no credible evidence or witness yet has been found to prove the president knew about illegal activity going on under his nose. "Judicial Watch is pretty aggressively anti- Clinton," Cass says. "It doesn't mean everything they say is not true, but I can't say it's the gospel. They blow up small evidence into conclusions such as the accusations in Filegate that the president was hands-on. They are going on surmise. If something was there, it would have come out already. I see in many areas a pretty big leap on small pieces of evidence to form large conclusions. Klayman says he has three binders with backup data, but as a lawyer you put your best evidence out front -- not in the binders as backup." The supporting documents contain references to a number of articles --including some from Insight -- as well as to books including Seymour M. Hersch's The Dark Side of Camelot. The Hersch book is highlighted to support the allegation of George Stephanopoulos, the White House aide turned political pundit, that the Clinton team is employing an Ellen Rometsch strategy. Rometsch was a girlfriend of John F. Kennedy who was an East German spy. The strategy refers to a claim by Hersch, rumored for years, that FBI Director J. Edgar Hoover and Attorney General Robert Kennedy prevented an investigation by using FBI files to blackmail GOP members of Congress. But even Cass says Klayman's report should not be totally dismissed. "The trade trips warrant further investigation," he says. "There may be something to those allegations. It looks to be pretty credible evidence. There is a tainted connection with the trade trips and government decision-making. What you have there is suggestive. It should require further investigation." That's exactly what Klayman hopes will happen when Congress begins to call witnesses in the impeachment inquiry. But will the Judiciary Committee have the courage to call Hill and Huang to testify? If they don't, it can't be because investigators don't know the sort of evidence they have to provide. Klayman has seen to that.
from PDL 1999-Mar-26, from the Arkansas Democrat-Gazette, by Seth Blomeley:
Jury convicts Hale, wants him locked up for 21 days
A jury found Whitewater figure David Hale guilty Thursday of giving false statements to insurance regulators and sentenced him to 21 days in prison.
After the sentence was pronounced, the former Pulaski County municipal judge smiled, hugged his wife and daughter and shook hands with Prosecuting Attorney Larry Jegley before happily granting interviews before television cameras. Claiming his past felony convictions prejudiced jurors, he said the short sentence wasn't a victory and planned an appeal.
During testimony Thursday, Hale admitted to jurors that on other occasions he broke the law -- a lot.
He said he committed perjury, stole from the federal government and "dummied up" records.
"It was a total scam," he said.
But Hale, rebutting the state's charge, told the jury during his trial in Pulaski County Circuit Court that everything he told them was absolutely true.
Jegley didn't argue for the maximum sentence, which was eight years, nor did he criticize the light punishment from the jury.
Hale, as a result of the conviction, will be barred from engaging in the insurance business in the United States, Jegley said.
"I think they realized the Mr. Hale was ill [but] they wanted to give him some time," he said.
Suffering from heart problems -- he's had two heart attacks and has a pacemaker -- Hale, 57, pushed for jury sympathy by speaking of his family and the ordeal he faced because of Whitewater. He said he was too preoccupied with being indicted on Whitewater-related charges to tell his side of the insurance allegations sooner.
Prosecutors asked him why he missed an Insurance Department hearing on the matter before criminal charges were filed.
"That was a time in my life ... I had a wife and two kids and the federal government had seized everything we owned," a tearful Hale testified. "We had to sell sheets from our house just to pay the bills."
The defense ended its case after Hale's three hours of testimony. Jurors began deliberating at 5:30 p.m. and finished at 8:30 p.m. They returned the sentence at 9:45 p.m., concluding the three-day trial before Circuit Judge David Bogard.
Bogard set April 5 for a hearing when he will pronounce the sentence. Hale is to remain free on bond until then.
While Hale complained that his past prejudiced jurors, Jegley insisted they must consider Hale's previous felony convictions because they show a pattern. Jegley said this case resembles the Whitewater scheme in that Hale wanted to prop up his companies financially to save face with regulators.
"This is from liar who's made this kind of nonsense his habit," Jegley said in his closing statement.
Defense attorney David Bowden, in his closing, compared the investigation into Hale's insurance company, National Savings Life, to the work of independent counsel Kenneth Starr.
"It was an investigation in search of a crime," Bowden said. "You've heard a lot of that already. And I'll leave you to determine the motive for that."
Hale's attorneys have said they blame the prosecution of their client on those who seek revenge for his 1996 testimony against former Gov. Jim Guy Tucker. A key prosecution witness, former Insurance Commissioner Lee Douglass, was appointed by Gov. Bill Clinton and re-appointed by Tucker.
"That's hogwash," Jegley said after the trial. "I've said it before and I'll say it again: Prove it."
Defense lawyers have alleged selective prosecution, but Jegley said he could recall two other people being charged with lying to state insurance regulators, including a state legislator about 20 years ago.
Prosecutors allege Hale took $150,000 from a Texas businessman, Michael Rutherford, who thought Hale was going to invest it into a company called Med-A-Corp. Rutherford later found out that company didn't exist, and Hale transferred the money back to Rutherford.
Hale contended he was merely buying stock in Rutherford's company.
Prosecutors allege Hale reported that stock as having enough value to show as an asset. Regulators had informed him he was $38,000 short of the state-required assets.
The transaction from Rutherford's company, FSA Financial Services, was filtered through several business entities. During closing statements, prosecutors used a chart to simplify the flow for jurors. Deputy Prosecuting Attorney Hugh Finkelstein, hobbled after a recent racquetball injury, used his crutch as a pointer.
"He flaunted the fact that he was a judge," Finkelstein said. "He judged other people but refused to pass judgment on himself. Today is your day to pass judgment. They want you to like him. They want you to think he's a nice guy and he's got a nice family. We don't have to prove he's totally unredeemable."
Hale served 24 months in federal prison after pleading guilty in 1994 to conspiracy and mail fraud. Bowden had said his client faced a minimum of eight years in prison if convicted of the insurance charge as a habitual offender because of his federal convictions. But Bogard told the jury the minimum sentence was one day.
In another development, Hale's attorneys face possible contempt citations. Bogard will hold a hearing April 2 on whether to find Bowden in contempt for revealing to a reporter details of pretrial plea negotiations.
Attorney Tona DeMers faces possible contempt for revealing Wednesday that witness Becky Winemiller invoked her Fifth Amendment right not to testify.
Attorney Bob Jones must answer to Bogard about questioning a witness about whether Rutherford had been bribed to testify against Hale despite having no evidence of that.
The case against Hale almost concluded in April 1998. But after a jury was picked, Hale said he was ill and didn't return to court.
In the following months, his attorneys tried to get the case dismissed through appeals, claiming his deal with the independent counsel gave him immunity to the state charges.
Bowden told the state Supreme Court of a meeting between Starr and former Pulaski County Prosecuting Attorney Mark Stodola when Starr may have pressured Stodola not to charge Hale. In a 1996 letter, Little Rock Police Chief Louie Caudell said that Starr had asked police to delay the state investigation against Hale.
The court rejected Bowden's argument.
from TPDL 1999-May-18, from Capitol Hill Blue:
Clinton buddy Jim Guy Tucker has 4 years to pay for sham bankruptcy
Former Arkansas Gov. and Bill Clinton buddy Jim Guy Tucker has four years to pay the federal government $1 million for conspiring to dodge taxes through a sham bankruptcy.
Tucker, who pleaded guilty in February 1998, also was sentenced Monday to four years of probation and 832 hours of community service. He plans to appeal the sentence.
Prosecutors said Tucker hid the value of a cable TV business he sold in 1988. If its real value had been known, Tucker and business partner William Marks would have been liable for an additional $2.9 million in taxes.
``There was no tax loss to the government that I benefited from,'' Tucker said after sentencing, arguing that the government owed him federal income tax credits.
U.S. District Judge Stephen Reasoner also ordered Tucker to pay a $6,000 fine and said the $1 million restitution must be paid before his probation ends.
Tucker's business dealings came under scrutiny as part of the federal investigation into the Whitewater land deal, a failed development in which President Clinton and Hillary Rodham Clinton were investors.
He served 18 months of home detention after being convicted of fraud and conspiracy with James and Susan McDougal, Clinton's former business partners. Tucker had lied to arrange nearly $3 million in fraudulent loans, prosecutors alleged.
He is fighting to have that conviction overturned, saying a juror was biased against him. As part of his plea bargain in the cable case, prosecutors will not retry him if his initial conviction is thrown out.
from PDL 1999-Mar-13, from Insight, by Sean Paige:
It Pays to Be Friends of Al
Attorney General Janet Reno refused to investigate shady deals surrounding a real-estate venture -- the Portals -- that earned millions of dollars for Al Gore's close friends. With so many potential scandals to choose from, Attorney General Janet Reno seems to have grown a bit persnickety about the appointment of independent counsels. No more so, though, according to her Republican critics, than when allegations of wrongdoing concern Vice President Al Gore. Reno twice in the waning days of 1998 declined to order probes into questionable Gore fund-raising activities during the 1996 presidential race. More recently, however, she also brushed aside evidence of possible illegality, conspiracy, influence peddling and perjury involving a cadre of Gore's closest pals, resulting from a yearlong probe by the House Commerce Committee of a Washington real-estate venture called the Portals. Key players in the deal include top Washington lobbyist Peter Knight, a former Gore aide and campaign chairman for the 1996 Clinton/Gore reelection campaign, meaning he's covered by the independent-counsel statute; Ambassador to the People's Republic of China James Sasser, a former Democratic senator from Tennessee; and enigmatic Chattanooga developer and "friend of Al" Franklin Haney, whose willingness to spend millions of dollars to rescue a faltering Washington office complex gave impetus to the intrigues the committee report attempts to elucidate. Committee findings that failed to stir Reno's curiosity include: Knight and Sasser each received unlawful, $1 million contingency fees for their parts in convincing the Federal Communications Commission, or FCC, to consolidate their offices at the Portals, Haney's troubled office building in Southwest Washington -- a move the FCC doggedly had fought before their intercession. They also helped to negotiate lease changes beneficial to Haney but risky to taxpayers; Knight, Haney, Sasser and others involved in the scheme made misleading, false and possibly perjurious statements about the true nature of their collaboration; Sasser's handling of a $1 million payment from Haney (which he received several weeks after confirmation as ambassador) artfully dodged federal financial-disclosure rules; Sasser's lobbying activities on behalf of Haney (who at the time was paying the former senator a whopping $100,000-a-month retainer) during a leasing dispute with the Tennessee Valley Authority, or TVA, also may have constituted an illegal contingency-fee arrangement and almost certainly resulted in a raw deal for taxpayers and TVA rate payers; As part of their dealings, Knight also may have solicited a $50,000 contribution to the Clinton/Gore reelection campaign from Haney -- a commitment that may have led Haney to embark on an illegal campaign-finance scheme for which he has been indicted. (According to the 42-count federal indictment, the developer allegedly used straw donors to contribute more than $200,000 personally to the Democratic Party, including to the 1996 Clinton/Gore reelection campaign and to friends of Sasser.) Gore himself stands accused of nothing so much as having his name and office exploited by friends and cronies for personal profit and unseemly advantage, which critics say sometimes is indictment enough, given the old adage about birds of a feather. Those who are following the case closely say that few conclusions reached by the committee are likely to result in criminal charges, however, thanks in part to Reno's unwillingness to see anything in the detailed, well-documented, multivolume report that merits further investigation. But the gory details behind the Portals project -- as if seen through a door mistakenly left ajar -- provide a fascinating glimpse at how money, influence and connections translate into big money in the corridors of official Washington. Committee investigators had their work cut out for them in trying to untangle an admittedly complicated and largely circumstantial case but believe they provided enough "specific" and "credible" evidence of possible wrongdoing to trigger a second look by an independent counsel. Sources on the committee also say Reno seemed to have prejudged the case, basing her dismissal on a previous investigation by the department's Campaign Financing Task Force, which "concluded that the evidence does not support the [committee] report's view that Mr. Haney's payment to Mr. Knight was a contingency fee," according to the attorney general. "Except for the testimony of Knight and Haney, a preponderance of evidence in this case points in the direction that there was some wrongdoing," a source on the committee tells Insight. "The Justice Department has specific, credible evidence, at least in regard to Knight. But not only do they refuse to comply with the Independent Counsel Act, they offered no real explanation and briefing to this committee, as we requested." Committee sources also complain that attorneys for Knight and Haney were allowed to present a dog and pony show for Justice Department officials which inappropriately may have influenced Reno's decision -- an event a department spokesman would neither confirm nor deny, saying only that "it's not uncommon for us to hear the views of attorneys" for individuals who might come under investigation. But a key minority staffer on the committee claims the Republican investigators just didn't prove their case, making Reno's decision against an independent counsel a no-brainer. "What we had in the end was a fantasy in the mind of Joe Barton," the committee staffer said, referring to the Texas Republican who, as chairman of the House Commerce subcommittee on Oversight and Investigations, was a prime mover behind the Portals probe. But in addition to securing the FCC as a tenant, without which Haney's financing of the Portals project might have fallen through, investigators say that Haney also wanted Knight, Sasser and John Wagster (a former Sasser aide turned lobbyist, whom Haney paid $500,000 for his assistance on the Portals project) to help negotiate changes to the lease. One such change, to guarantee the developer's rent payments even if the FCC didn't occupy the building on a certain fixed date -- always a likely development given the FCC's long-standing resistance to relocating to a site that staff regarded as too small and off the beaten track --already has paid off for Haney. A hold put on the FCC's final relocation to the Portals while the leasing arrangements were investigated by Congress meant the taxpayers shelled out $17 million to rent vacant offices while the FCC relocation hovered in limbo. Because such changes exposed taxpayers to considerable financial risk, they initially were resisted by at least one contracting officer at the General Services Administration, or GSA, which serves as the federal property manager. He soon found himself frozen out of the process, according to the congressional report, as decisions were bucked up the chain of command to the political level. Not that Haney's team of professional persuaders had a tough time getting meetings at the FCC or GSA. FCC Chairman Reed Hundt reportedly has been a friend and political ally of Knight's since 1984. Hundt's friendship with Gore dates back to 1961, when the two were in high school together. Sasser also had an easy "in" at GSA: While in the Senate, he had chaired the committee with jurisdiction over GSA, where Wagster had served as staff director. The fact that Haney was a friend of the vice president's apparently also made an impact on FCC official Robert Peck, who told the committee, "The first time Mr. Knight called me when I was at the FCC and asked about the Portals, he asked if I would meet with a Mr. Franklin Haney, who he said was ... a friend of Al's." A series of meetings then began, starting with political appointees on top and working their way down to professional staff below, which led to a sudden reversal of FCC's stubborn refusal to relocate to the Portals. Like other recent scandals, this case seems to rise or fall on a question of lawyerly semantics -- on the question of whether Haney's $1 million payments to Knight and Sasser and $500,000 payment to Wagster were by definition "contingency fees" and as such a violation of the federal law. Were the fees paid contingent on the signing of the Portals lease, a federal contract? Or were they contingent upon the finalizing of the project's financing, a related private transaction which, though dependent upon the federal contract, somehow may not have been a violation of the law? Sasser skirted the issue by saying that he was paid the fee based on approval of the Portals' financing, rather than the signing of the lease. But Sasser also is known to have attended meetings in which the lease and lease changes were discussed and, during questioning by the committee, he didn't seem to have a clue about the intricate loan transactions he was supposed to be overseeing. The report strengthens the case for a contingency-fee theory based on suspicious timing and precedent. On the very same day that the FCC signed its lease on the Portals property, for instance, Knight instructed his assistant to bill Haney a flat fee of $1 million, a bill that Haney paid out of proceeds from the Portals' closing. And if the $1 million fee was, in fact, a payment to Knight's law firm for a variety of work done over a number of years, as both men claim it was, then why, committee investigators ask, did Knight attempt to take the check directly rather than running it through the firm's accounting and distribution system? Moreover, Haney since 1995 had been billing Knight's Washington law firm strictly on a project-by-project basis, with the final fee contingent upon the success of a project. Though a top minority staffer dismisses most of the charges made by the majority as baseless, even the Democratic staffer acknowledges that the contingency-fee case against Sasser is stronger than against Knight because "there is a document using the term 'contingency' in relation to Sasser." Efforts by Insight to reach the ambassador in China for comment were unsuccessful, and a call to the law offices of Knight was not returned. Also scrutinized by committee investigators were Sasser's successful lobbying efforts to get the TVA to renew a lucrative 10- year lease on another Haney property, Chestnut Street Towers in Chattanooga, Tenn., even though TVA barely was using the building and leasing professionals inside the agency -- some of whom "did not have a high regard for Mr. Haney personally or the way that he did business," according to the report -- were opposed to any renewal. Though Haney already enjoyed a friendship with TVA Chairman Craven Crowell, it couldn't hurt his cause having Sasser on the project, seeing as how Crowell had served as Sasser's chief of staff and enjoyed the former senator's assistance in being nominated for the job. Besides, Sasser somehow had to earn the $100,000-a-month retainer he began receiving from Haney shortly after leaving office in January 1995 -- an astounding sum that Haney said would help buy him "Washington wisdom, credentials and credibility." It also seems to have helped buy him a lease extension at Chestnut Street Towers. With Sasser's assistance and thanks to Crowell's disregard for the advice of staff, Haney not only won a 10-year lease extension on a building that was less than 40 percent occupied but into the bargain was invited at Crowell's insistence to open renegotiations on five other leasing arrangements he had with TVA. The Chestnut Street Towers deal was crucial, according to the committee's report, because Haney needed the proceeds from the sale on new tax-exempt bonds on the building to help purchase a partnership interest in the Portals. But that partnership with the Portals wouldn't go through without first locking in an iron-clad tenant -- "If there's no lease, there's no loan," Sasser testified to the committee -- making an FCC flip-flop on relocation to the long- despised building the lynchpin holding together Haney's plan. And this brings us full circle in a tale that some are saying only could be conjured during the Clinton/Gore administration in the shady sinkhole that Washington has become. "That thing was clearly dead on arrival at the Justice Department because the entire matter was politically motivated from the beginning," Haney spokesman Ken Vest says of the report. Haney has come under attack from Republicans, says Vest, "because of his friendship with prominent Democrats. This is all about tarnishing Al Gore, and this is what it's always been about." According to Vest, one of the other reasons that Haney dug in his heels with the committee and only agreed to cooperate after being threatened with contempt of Congress was to protect the confidentiality of his business methods, which no one that Insight interviewed for this story would relate on the record. "I can't really explain how he does what he does," Vest says of Haney's financial wizardry. "But one of the reasons we resisted the committee's demands is it was like they were asking Coke to give up the secret recipe." Long before he began to be introduced around Washington as a "friend of Al" and members of Congress began plotting to steal his secret formula for buying influence, Haney earned a reputation in Tennessee for being an extremely shrewd businessman carefully concealed in the husk of a country bumpkin. And although widely admired for his ability to work the angles, at least one government official familiar with Haney's methods has his reservations. "He's a brilliant numbers guy," says the official, speaking on condition of anonymity. "But my view is that he's always on the edge of legitimacy, and I don't think I'm alone in that." No trial yet has been set on the 42-count indictment against Haney for the campaign fund-raising schemes. "But if this does go to trial, he will be found innocent of all charges," says Vest. And meanwhile, over at Reno's Department of Justice? "We are aware of the allegations" made in the report, says spokesman Myron Marlin, "and the matter remains open."
from TPDL 1999-Apr-27. from the Associated Press:
Businessman pleads guilty in illegal DNC campaign contributions case
LOS ANGELES (April 27, 1999 1:33 a.m. EDT http://www.nandotimes.com) - A businessman pleaded guilty Monday to violating federal elections laws by giving $150,000 drawn from a South Korean corporation to the Democratic National Committee.
Robert Lee, 49, was the 16th person charged in a Justice Department investigation of campaign financing in the 1996 election.
Lee pleaded guilty to one count of aiding and abetting illegal campaign contributions. A judge set sentencing for July 19. Lee faces a maximum one year in prison and a $450,000 fine.
Lee was an adviser and consultant to the Los Angeles development firm K&L International Partners Inc., which generated no revenues in the United States.
Foreign corporations are prohibited from donating to federal campaigns.
A telephone message left for K&L President Jim Kim wasn't returned.
DNC spokesman Rick Hess has said that the DNC believed the funds were from U.S. sources.
from TPDL 1999-Apr-7, from Capital Hill Blue:
Democratic donor charged with laundering South Koren contributions
An adviser to a California company was charged Tuesday with violating federal election law in 1996 by giving the Democratic Party a $150,000 check drawn from an account funded by a South Korean corporation.
The Justice Department said Robert Lee, 49, a consultant to a fledgling development company, was charged in federal court in Los Angeles with a misdemeanor violation. Under the law, foreign contributions to U.S. elections are prohibited.
According to court documents, Lee was working for K&L International Partners Inc., which had bid on a project in Inglewood, California.
The company generated no revenues in the United States and received all of its operating funds from foreign sources, including the South Korean-based Il Sung Construction Co., the department said. K&L had retained Il Sung to perform the actual construction on the project.
According to the charges, Lee in May 1996 knowingly provided the Democratic National Committee with a $150,000 check drawn on a K&L bank account that had been funded entirely by transfers from Il Sung.
The Justice Department said Lee was charged in a criminal information, which typically is used in cases in which defendants have agreed to plead guilty.
The charges were brought by the U.S. Attorney's Office in Los Angeles and by the Justice Department task force that has investigated campaign finance violations in the 1996 election.
from TPDL 1999-Apr-17, from the Associated Press:
Indicted Clinton contributor faces more charges
MIAMI (April 16, 1999 9:23 p.m. EDT http://www.nandotimes.com) - A businessman indicted on 17 counts of making illegal contributions to the campaigns of President Clinton and others faces more charges as a result of an indictment announced Friday.
An indictment issued in Washington in September accused Mark B. Jimenez of illegally giving candidates nearly $40,000. Those charges were incorporated into Thursday's indictment, which also accuses him of conspiracy, tax evasion and mail fraud.
Jimenez was Florida's largest donor to the national Democratic Party in 1996.
Jimenez, a Philippine national, fled in December and is believed to be in that country. The Department of Justice said it would seek his extradition.
The businessman is accused of conspiring to defraud the Federal Elections Commission by using corporate money for campaign contributions. The indictment says Jimenez got employees of companies he owned and controlled to give money to Clinton, Vice President Al Gore and candidates for the U.S. House and Senate, then reimbursed them.
Jimenez is also accused of defrauding the IRS by taking business deductions for personal expenses and political contributions made with money from Future Tech International Inc. Jimenez was chief executive of the company.
There was no answer at the company Friday afternoon.
Jimenez promised to raise $25,000 in connection with a Clinton- Gore fundraiser in September 1995. He produced $1,000 personal checks from 25 employees, who were later reimbursed via payroll, according to the indictment.
Jimenez's companies also allegedly defrauded a business partner, computer hard-drive manufacturer Quantum Corp., by billing it for ads that were never placed in Puerto Rican and South American publications as well as PC magazine, the indictment said.
The bills were accompanied by faked copies of the ads, the document said. Quantum was cheated out of more than $600,000, according to the release.
A call seeking comment from Quantum was not returned Friday.
from TPDL 1999-Apr-21, from the New York Times, by Philip Shenon:
New Holbrooke Inquiry Begins, This Time on Lecture Fees
WASHINGTON -- The State Department inspector general has opened a new investigation of Richard Holbrooke, President Clinton's nominee as chief U.S. diplomat to the United Nations, and is examining whether he improperly accepted thousands of dollars for making speeches about the Balkans when he was a special envoy to the region.
Government officials said the new inquiry could further delay Senate confirmation hearings for Holbrooke, whose nomination was held up for nearly eight months by an ethics investigation by the Justice Department and the State Department. That inquiry ended in February, when Holbrooke agreed to pay $5,000 to settle civil charges that he had violated lobbying laws in his contacts with the U.S. Embassy in South Korea after having resigned from the State Department.
The latest inquiry was prompted by the publication in March of an Op-Ed article in The Washington Post by Philip L. Christenson, a former congressional official, according to government officials. Christenson questioned whether it was right for Holbrooke and other part-time envoys to receive money for speeches related to their government work.
After the State Department formally named Holbrooke as an unpaid special envoy for the Balkans in October, he continued to collect speaking fees.
In November, he delivered a speech at Stanford University, for which he was paid $16,000. According to an article in the university newspaper, Holbrooke used the speech to discuss his work in trying to negotiate a peace agreement in Kosovo.
He gave at least two other paid speeches after his appointment as a special envoy, to the Siemens electronics company for $24,000 in October and to Pepsico for $20,000 in December. The topics of the speeches could not be immediately determined.
The question for State Department Inspector General Jacquelyn Williams-Bridgers, is whether the acceptance of the speaking fees violates federal ethics rules that bar government employees, including special envoys, from accepting outside compensation "that relates to the employee's official duties."
A violation of the rules can result in administrative penalties like reprimands and dismissals. It is unclear how those penalties would apply to Holbrooke as an unpaid part-time government representative.
Holbrooke said through a spokeswoman that he had no comment on the inquiry.
A friend of Holbrooke who insisted on anonymity said, "We're confident that Richard Holbrooke followed the guidelines regarding speeches and we're looking forward to his confirmation."
According to recent disclosure statements filed by Holbrooke with the government Ethics Office, he received $205,000 in speaking fees last year, in addition to his $1,153,000 salary as an investment banker.
He also received $166,000 in advances for his book "To End a War," about his work at the State Department in 1995 to stop the war in Bosnia. Holbrooke resigned from the State Department in 1996 to join the investment banking firm of Credit Suisse First Boston in New York.
Another friend of Holbrooke said he was highly likely to argue that his speeches late last year were related to his book and his work in the Balkans long before his appointment in October as a special envoy. The news about the new investigation was reported as the Senate Foreign Relations Committee and the State Department appeared close to an agreement to rescue the nomination, which had most recently bogged down over an unrelated dispute over legislation to reform the United Nations.
A spokesperson for the Inspector General's office, Linda Topping, would not confirm that a new investigation was under way or offer any other comment.
But a congressional official said Ms. Williams-Bridgers notified the Foreign Relations Committee on Monday that she had opened a new inquiry and that she hoped to complete it quickly.
Sen. Jesse Helms, R-N.C., chairman of the committee, which is weighing Holbrooke's nomination, had no comment about a new investigation.
But his spokesman, Marc Thiessen, said, "The committee would be shirking its responsibility if we allowed this nomination to go forward before all the ethics questions have been answered."
Thiessen said the committee had not received a variety of documents that it had requested from the State and Justice departments about the earlier inquiry. "We haven't had what we would call full cooperation," he said.
Holbrooke, a former ambassador to Germany who was the architect of the Dayton peace agreement in 1995 that ended the war in Bosnia, has found himself as a case study for the ethical minefields faced by former officials who agree to return to work for the government temporarily.
The earlier investigation, prompted by an anonymous letter to the State Department inspector general, focused in part on allegations that Holbrooke had illegally lobbied his former government colleagues, shortly after resigning from the State Department.
In agreeing to the $5,000 settlement with the Justice Department, Holbrooke denied wrongdoing and insisted that he had agreed to the settlement only to avoid further delay in his nomination.
from PDL 1999-Mar-10, from the Washington Times, by Jerry Seper:
Judges rule Cisneros has to stand trial
A federal appeals court panel yesterday ordered former Housing and Urban Development Secretary Henry Cisneros to stand trial on a 1997 indictment accusing him of 18 counts of conspiracy, obstruction of justice, fraud and perjury involving payoffs to a former mistress.
The three-judge panel rejected arguments by Mr. Cisneros' attorneys calling for the charges to be dismissed on grounds that the power to appoint him as a Cabinet secretary rested with President Clinton and the Senate, and that allowing the case to be tried would violate the separation-of-powers doctrine involving the different branches of government.
They also argued that it was not a crime to lie to the FBI during a pre-confirmation background investigation as a Cabinet nominee.
Mr. Cisneros' attorneys said FBI agents were not acting as law enforcement officers, but as loaned agents for President-elect Clinton's transition team when they questioned Mr. Cisneros, a former San Antonio mayor, and others about hush-money payments to the ex-mistress.
The court panel did not agree.
"Nothing Cisneros argues amounts to a right not to be tried. He cannot point to anything guaranteeing him an immunity from standing trial," wrote Judge A. Raymond Randolph.
A Dec. 11, 1997, indictment against Mr. Cisneros and his former lover, Linda D. Jones, charged them and two accomplices with 21 counts of conspiring to hide payoffs to Mrs. Jones before and after he was nominated by Mr. Clinton to the Cabinet in 1992.
The 66-page indictment was obtained by independent counsel David M. Barrett, appointed in 1995 at the request of Attorney General Janet Reno to investigate Mr. Cisneros' apparent lies about the payoffs during an FBI background check on his nomination as secretary of the Department of Housing and Urban Development.
Mr. Cisneros told the FBI in 1993, before the White House sent his HUD nomination to the Senate for confirmation, that he paid his mistress, formerly Linda Medlar, no more than $60,000 after a three-year extramarital affair that ended in 1989. He also told FBI agents conducting his pre-confirmation background check that the payments had ceased and that no single payment was more than $2,500.
Mrs. Jones pleaded guilty in the case last year in a plea agreement and was sentenced to 42 months in prison. Her plea agreement doesn't commit her to testify in the government's case against Mr. Cisneros.
The 1997 indictment said Mr. Cisneros actually paid Mrs. Jones $264,500 from 1990 to 1993, including $75,500 as apparent additional hush money after he became HUD secretary in January 1993.
The appeals court panel said in its ruling that allowing the trial to proceed would not interfere with Mr. Clinton's nomination judgments or with the Senate's advise-and-consent role.
"The short of the matter is that neither the president's nor the Senate's constitutional powers would be forever lost if Cisneros could appeal only after the jury returned its verdict," Judge Randolph wrote. "Cisneros' defense does not, in short, translate into an immunity from prosecution."
U.S. District Judge Stanley Sporkin, who will preside over the trial, rejected similar arguments last year. The trial had been scheduled to begin in November 1998 but was delayed by the appeal.
from PDL 1999-Mar-29, from the Washington Times, by Jerry Seper:
Indians to question Interior lawyer about missing funds
An Interior Department lawyer who says he was ordered to destroy records sought in a lawsuit involving Indian trust fund accounts will be questioned tomorrow by attorneys for Indians who want the department to account for more than $2.4 billion in missing funds. Ralph Williams, an assistant solicitor, said in a sworn affidavit last week he was told by his boss, Deputy Solicitor Edward Cohen, to purge files being sought by the the court in a trust fund lawsuit brought by the Native American Rights Fund. The affidavit was unsealed Thursday by U.S. District Judge Royce C. Lamberth, who is overseeing the Rights Fund case. The judge released the document along with an order protecting Mr. Williams from retaliation by the department. In the affidavit, Mr. Williams said Mr. Cohen told him in December 1997 to analyze information in the trust fund accounts and other information regarding the disbursement of fund money. He said he was instructed to "reconcile any discrepancies relating to payments and disbursements made on those accounts." Mr. Williams said Mr. Cohen then told him to ensure that once the payments and disbursements had been reconciled, other information inconsistent with his findings could be purged from the files. He said he refused to do so because he thought his actions would have "constituted a violation of law and various ethical rules." "In addition, because I was informed this information would have been presented in Congress, I was extremely concerned that my actions may have resulted in the transfer of false and incomplete information to the U.S. Congress," he said. Interior Department Solicitor John Leshy has denied any wrongdoing, saying in a short statement he was "confident" those who had worked on the trust fund suit "have never instructed anyone to destroy any records relevant to this case." Sen. Ben Nighthorse Campbell, Colorado Republican and chairman of the Senate Indian Affairs Committee, which has held hearings into the trust fund's management, said if Mr. Williams' accusations are true, "it would be the worst violation of the trust responsibility in decades." Mr. Campbell, along with Sen. Frank H. Murkowski, Alaska Republican and chairman of the Energy and Natural Resources Committee, has introduced legislation that would allow Indian tribes the option of leaving their trust funds with the government for management and investment, or transferring them to private financial institutions, including Indian-owned banks. "As Congress works to fix the mistakes of the past, we can give tribes the flexibility and freedom to invest their money in the financial institutions they choose," Mr. Campbell said. "The money that is supposed to be in these accounts is not federal money; it's Indian money that has been entrusted to the United States. "We must take responsible actions to clean up this mess," he said. The Rights Fund suit, which involves thousands of Indians who were entitled to trust fund money, accused the Interior and Treasury departments of mismanaging trust fund accounts. An audit by the Arthur Andersen accounting firm said the Bureau of Indian Affairs could not account for $2.4 billion in trust funds. In November, Judge Lamberth told Interior to turn over documents showing the status of the trust fund, which involves settlements, royalties and payments to about 300,000 individual accounts and 2,000 tribal accounts. Interior has given several reasons why the records are unavailable, including that some were so tainted with rodent droppings that handling them would be hazardous. Mr. Williams, in the affidavit, also said that after learning this= year of the Rights Fund suit, he became concerned about an April 29 memo in which Mr. Cohen said he could not find "any product from my work on the trust funds issue." At that point, he called a lawyer, Phillip Thompson, who called Rights Fund attorneys, saying his client had been instructed by Mr. Cohen to make the documents "disappear." Mr. Thompson told the attorneys that Mr. Williams was concerned about retaliation and being used as a scapegoat to justify the missing documents. The Rights Fund attorneys turned over the information to the Justice Department and Judge Lamberth.
from TPDL 2000-Aug-18, from the Washington Post 2000-Aug-17 p.A27, by Neely Tucker:
Worker Alleges Retaliation
Interior Secretary Bruce Babbitt, already held in contempt of court for failing to provide a federal judge with records involving hundreds of millions of dollars in trust funds for Native Americans, is the target of another request for a contempt citation in the same lawsuit.
A whistle-blower in the Bureau of Indian Affairs' national records center in Albuquerque alleges that Babbitt and several mid-level managers retaliated against her for providing affidavits to the plaintiffs in the lawsuit. Babbitt's office oversees the Indian Affairs agency.
In court papers filed late Tuesday, Mona Infield, a senior computer specialist for the bureau, says she has been barred from her office, stripped of her supervisory duties and "exiled" to her home in retaliation for a series of affidavits that exposed problems in the bureau's Individual Indian Money trust account, which holds an estimated $450 million at any one time.
"They didn't want me to learn any more of their dirty little secrets and expose them to the courts," Infield said yesterday.
Stephanie Hanna, a spokeswoman for the Department of the Interior, said yesterday that Infield is a disgruntled employee who refused to take part in an office-wide relocation to the bureau's new records facility in Reston.
"There was no retaliation," Hanna said. "The employees [at the New Mexico facility] were given options of relocation, a buyout, or stay in Albuquerque but be transferred within their pay grade to other work. She was offered all those and more."
The allegation is part of a four-year-old lawsuit, filed by the Native American Rights Fund, seeking a U.S. District Court trial to determine how much money the federal government owes more than 300,000 Indians after more than a century of acknowledged mismanagement of the trust account.
"We would be surprised if it's less than $10 billion," said Dennis Gingold, lead attorney on the case.
The historic case has its roots in the General Allotment Act of 1887, which set aside 11 million acres of Indian tribal lands west of the Mississippi River to be broken into individual parcels. The lands could be leased for oil, grazing or mineral rights, with payments channeled through the trust fund.
But the government never kept proper records and, as generation followed generation, the ownership and lease rights of the properties became lost in a bureaucratic maze.
U.S. District Judge Royce C. Lamberth held Babbitt; Kevin Gover, the assistant secretary for Indian affairs; and then-Treasury Secretary Robert E. Rubin in contempt in February 1999 for not turning over records.
The three officials said the financial records no longer existed.
In December, Lamberth wrote in a 126-page opinion that "it would be difficult to find a more historically mismanaged federal program," and ordered the Clinton administration to overhaul it immediately.
A new computer system was put in place to organize the chaotic filing system. But Infield, a member of the Citizen Potawatomi Nation and a branch chief of the bureau's data center, gave an affidavit to the plaintiffs March 5 contending that the new system was a failure, and that outside contractors without security clearance were being given access to confidential financial records.
On March 7, that affidavit resulted in a temporary restraining order preventing the contractors from resuming their work. On March 9, Infield said, her work assignment was changed. Since March 22, she has been at home, without a work assignment, although she is still being paid.
from TPD 1999-Oct-14, from USA Today:
No indictment of Babbitt in casino case
WASHINGTON - A special prosecutor says there is insufficient evidence to indict Interior Secretary Bruce Babbitt or anyone else in connection with a federal Indian casino investigation, The Associated Press reports Wednesday. The case involves allegations that Babbitt lied to Congress in his explanation as to why the Interior Department rejected a permit in 1995 for a proposed casino by three Wisconsin Indian tribes. The tribes charged that promises of campaign contributions by other Indians opposed to the casino had influenced the decision. Babbitt denied any such influence, but at one point he provided a distorted explanation to a Senate committee looking into the case. Special Prosecutor Carol Elder Bruce is expected to issue a statement soon on her 19-month investigation into Babbitt; a report will be issued within a few weeks.
from PDL 1999-Apr-1, from the Washington Times, by Jerry Seper:
Probe widens into Interior's denial of Indian casino license
A former aide to President Clinton who warned against White House involvement in the Interior Department's denial of an Indian casino license has testified in an expanding grand jury probe.
The investigation has broadened to include records subpoenaed from several key players, including a Miami businessman who owned a dog track that Wisconsin Chippewas wanted to convert to a casino to bolster their flagging economy.
The businessman, Fred Havenick, has told independent counsel Carol Elder Bruce that Clinton-Gore Re-election Campaign officials were involved in denying the license, that a top campaign aide bragged about helping to kill the application by three Chippewa tribes, and that an Interior Department official told him "politics" was the reason.
The grand jury is probing accusations that Mr. Clinton and White House officials -- including Deputy Chief of Staff Harold Ickes and Deputy Counsel Bruce Lindsey -- ordered Interior Secretary Bruce Babbitt to deny the license in July 1995 after rival tribes, looking to protect their own gaming interests, promised $500,000 to Mr. Clinton's re-election.
The grand jury heard testimony earlier this month from Loretta Avent, a White House specialist on Indian affairs, who counseled Mr. Ickes on the "legal and political implications of our involvement." She said in an April 1995 memo that it would be "disastrous" for the White House to be involved in any decision by Mr. Babbitt on the license application.
Mrs. Avent wrote that the issue should stay within Interior, adding: "The press is just waiting for this kind of story. We don't want to give it to them."
Her testimony, along with hundreds of documents subpoenaed by Mrs. Bruce, including records from Mr. Havenick, have moved the grand jury probe into the White House, which has vigorously denied any involvement in the 1995 decision.
Mr. Babbitt has denied any White House connection, but has offered confusing accounts of how the decision was made.
He told the Senate Governmental Affairs Committee he never talked to anyone from the White House about the proposal and was not aware of the promised campaign donation. But Paul Eckstein, an attorney for the Chippewas and a longtime Babbitt friend, testified he told Mr. Babbitt in July 1995 that rival tribes were prepared to give a half-million dollars and Mr. Ickes "had directed him to issue the decision that day."
Mr. Eckstein said it was "very clear to me that political pressure was being brought to bear."
Mr. Babbitt has disputed Mr. Eckstein's version and said he never discussed the matter with Mr. Ickes.
But in a letter to Senate investigators, he conceded telling Mr. Eckstein that he was pressured by Mr. Ickes. He said he lied to his friend to cut short a conversation.
On July 14, 1995, Mr. Babbitt denied the Chippewas permission to build the casino at the Hudson site, although the regional Bureau of Indian Affairs had recommended its approval. The rival tribes -- including the St. Croix Chippewa and Oneida of Wisconsin and the Shakopee Mdewakanton Sioux of Minnesota -- later gave $270,000 to the Democratic Party.
On the same day Mr. Babbitt denied the license, Patrick J. O'Connor, a lobbyist for the rival tribes, wrote in his diary that the tribes had begun their donation strategy. He outlined plans to contact Mr. Ickes, Democratic National Committee Chairman Don Fowler and Terry McAuliffe, the chief fund-raiser for the Clinton- Gore committee.
In April 1995, Mr. O'Connor met Mr. Fowler and rival tribal leaders to discuss a "generic donation" to the DNC. The meeting occurred shortly after Mr. O'Connor had spoken to Mr. Clinton about the license at a Minnesota fund-raiser. He said Mr. Clinton told Mr. Lindsey, who was with the president, to "talk to O'Connor about his concerns." Mr. O'Connor said Mr. Lindsey assured him that someone at Interior would contact him.
Mr. O'Connor could not be reached for comment. Mr. Fowler said only that he had spoken with Mrs. Bruce's investigators.
Mr. McAuliffe's attorney, Richard Ben-Veniste, said his client had no role in the license denial and denied comments attributed to him by Mr. Havenick.
from PDL 1999-Apr-2, from the Washington Post p.A2, by William Claiborne:
Indian Trust Papers Missing, Interior Aide Says
Lawyer, a Grievant Against Department, Tells Court He Had Refused to Dispose of the Records
An Interior Department lawyer who says he refused an order to get rid of Indian trust records involved in a class action lawsuit against the government has testified that more than half the documents are now missing.
The lawyer, Ralph Williams, who had the job of reconciling discrepancies in the trust accounts, said in a deposition that he refused to dispose of the material because he believed that doing so would be illegal. But when the documents--which he said he returned to the department when he left the project in January 1998--were shown to him Wednesday as part of the deposition, Williams said, "That's not even half of it," according to a transcript made public yesterday.
The allegation by Williams, who is under a court order protecting him as a whistleblower from retaliation by the Interior Department, came just six weeks after Interior Secretary Bruce Babbitt was cited for contempt by U.S. District Judge Royce C. Lamberth for failing to produce documents sought by Indian trust account holders as evidence in their lawsuit against the government.
Lamberth is presiding over the suit against Interior for its management of 300,000 Native American land trust accounts worth more than $500 million. In addition to the $500 million in trusts owned by individual Indians, the department is responsible for $2.5 billion in tribal lease revenue, mineral royalties and court settlements that Native Americans allege have been mismanaged for decades.
Williams, who still works in the department solicitor's office, said in the deposition and in an affidavit released by Lamberth last week that Interior Deputy Solicitor Edward Cohen told him that once he had reconciled payments to and disbursements from the trust accounts, "any other information which was inconsistent from my findings could be purged from the files." Williams said he believed that complying with Cohen's directive "could have resulted in the destruction or removal of information relating to payments" to Indians and pertinent to the lawsuit.
At another point in his testimony, Williams said Cohen "did not want anything I produced . . . [that] would not support the numbers that I was supposed to pull together after spending five weeks on this project. Everything else, he said, we could get rid of it if it doesn't support this."
Cohen did not return a call requesting comment and Interior Solicitor John Leshy said he had not read the deposition transcript and had no comment. He referred to an earlier statement in which he said, "I am confident that employees of the Office of the Solicitor who have worked on this case have never instructed anyone to destroy any records relevant to this case. In my years of working closely with [Cohen], I have found him to hold the highest ethical standards and I am certain this allegation will be proved false."
Cohen's private attorney, W. Neil Eggleston, said it was "inconceivable that Mr. Cohen would have asked Mr. Williams to engage in illegal or unethical conduct, and Mr. Cohen did not do so." Eggleston said Cohen knew that Williams was a "disgruntled employee" who had filed grievances against another member of the solicitor's office and that he had asked Williams to reconcile the tribal trust accounts as a temporary task while awaiting his transfer to the U.S. Attorney's Office in the District.
In his deposition, Williams, who is black, said he filed Equal Employment Opportunity Commission and Merit Systems Protection Board discrimination complaints against the solicitor's office because of grievances against his superiors. He said when he was working on the trust funds project he believed "they were setting me up to drop my EEOC complaint off the table, fire me."
His lawyer, Phillip E. Thompson, said yesterday his client's allegations had led to "a very tense situation" in the office, where Williams currently is working on offshore minerals matters and issues relating to Year 2000 computer glitches.
Thompson said the trust documents shown to Williams Wednesday were in a file folder only one inch thick, while the stack of documents Williams returned to his project supervisor last year was at least six inches high. "The order from the judge was to turn over all of the documents my client delivered. This isn't it," Thompson said.
The Interior Department released a transcript of a voice-mail message Williams left for his project supervisor, David Moran, last April 13 in which Williams said he had not produced anything of substance in his trust fund work because he had "never really got a grip on the requirements of the project."
The department also released an affidavit by Moran stating that Williams never had any "unique source documents" whose loss would have been irretrievable and that the reconciliation project never could have placed anyone in a position to alter or destroy trust fund account data.
from TPDL 1999-Apr-14, from the Washington Post p.A2, by Bill Miller:
Appeals Court Reinstates Indians' Defamation Suit
A federal appeals court yesterday reinstated a defamation lawsuit filed by the owner of a failing greyhound track against a team of lobbyists who helped scuttle his plans to develop an Indian gambling casino in Hudson, Wis.
The ruling was a victory for Croixland Properties Inc., which contended that the lobbyists conspired to thwart its project by falsely maintaining that the track was owned by a company with Mafia connections. The lawsuit accused the lobbyists of passing along false allegations to key decision makers in Washington, who ultimately rejected the casino proposal in mid-1995.
The federal government's handling of the casino project is a focus of an independent counsel's investigation of Interior Secretary Bruce Babbitt. For more than a year, independent counsel Carol Elder Bruce has been attempting to determine whether the White House or the Democratic National Committee improperly influenced the decision. Bruce is looking into Babbitt's role in the matter. Babbitt has insisted he was "out of the loop" and did nothing improper.
The controversies stem from a plan by Croixland and three Chippewa tribes to install an off-reservation casino at the Hudson track. Regional officials of the Bureau of Indian Affairs recommended approval, but higher-ups at the Interior Department rejected the application after a push by lobbyists for tribes opposed to the casino.
The defamation suit was filed in 1997 by Croixland's owner, Fred Havenick, against lobbyists Patrick E. O'Donnell, Thomas J. Corcoran and Larry Kitto, who represented seven opposing Minnesota and Wisconsin tribes. O'Donnell and Corcoran are from Washington. Kitto is from St. Paul, Minn.
The suit accused the lobbyists of pursuing a strategy that included telling Sen. John McCain (R-Ariz.), then chairman of the Senate Indian Affairs Committee, that a company named Delaware North owned the track and that the firm had mob ties. In fact, Delaware North had nothing to do with the track, according to the Wisconsin gaming board and dog track representatives.
U.S. District Judge Harold H. Greene dismissed the suit last year, ruling that Croixland was not defamed because the remarks were about another firm.
A three-judge panel reversed Greene's decision yesterday, finding that the alleged statements still could have brought harm to Croixland. "Even if the lobbyists misidentified the owner of the facility, it did not remove the taint to the true owner," Judge Judith W. Rogers wrote in the opinion.
Robert M. Adler, a lawyer for the lobbyists, said he might ask the entire appellate court to review the case.
from PDL 1999-Mar-25, from the Washington Times, by Jerry Seper:
Interior officials accused of destroying Indian records
Interior Department officials who told a federal judge they could not find records describing the department's oversight of American Indian trust funds have been accused in sworn affidavits of destroying the documents to conceal them from the court.
U.S. District Judge Royce C. Lamberth, who held Interior Secretary Bruce Babbitt in contempt last month for not turning over the records in a lawsuit, ordered hearings on the accusations yesterday after being told Tuesday the documents had been deliberately destroyed.
The suspected destruction was outlined in the affidavits given to the judge during a status hearing in a lawsuit brought by the Native American Rights Fund. The affidavits, brought by some of the many plaintiffs, were later ordered sealed pending yesterday's hearing, although that hearing -- held in the judge's chambers -- was scheduled to resume today.
The suit by the Rights Fund, which represents several Indian tribes involved in the trust fund, accuses the Interior and Treasury departments of mismanaging trust fund monies.
In November, Judge Lamberth ordered the departments to produce canceled checks and other documents showing the status of the trust fund, which involves more than 300,000 individual accounts and 2,000 tribal accounts. The departments oversee the receipt of money from land settlements, royalties and payments by companies that use Indian land.
The judge sought the records to allow attorneys for the Rights Fund to prepare for trial. The departments have never complied, giving the judge several reasons for the delay -- including an Interior claim that some of the records were so tainted by rodent droppings in a New Mexico warehouse that to disturb them would put department officials at a health risk.
Interior officials have been unable to verify how much cash has been collected. An audit by the Arthur Andersen accounting firm said the Bureau of Indian Affairs cannot account for $2.4 billion in trust funds.
During a hearing March 3 before the Senate Indian Affairs Committee and the Senate Energy and Natural Resources Committee, Mr. Babbitt promised to correct the situation. "You'll be the judge. I will do my best," Mr. Babbitt said when asked what he intended to do about mismanagement by the BIA.
Special trustee Paul Homan, assigned to oversee the fund, resigned in January. He said Mr. Babbitt stripped him of the authority he needed to do the job and that he was blocked by Interior officials who sought to undermine congressionally ordered reforms with continual rejections of his requests for money and manpower.
Mr. Homan said the department could "no longer be trusted to keep and produce trust records." He urged the accounts be assigned to an independent agency.
Mr. Babbitt ordered a reorganization and requested more funding for next year. He also said a new accounting system was expected to be in place by the end of the year.
But acting special trustee Thomas Thompson said in a confidential memo last year that he was "grateful" he did not run the program. He outlined many concerns he had about an inability to implement the Trust Fund Management Reform Act of 1994. The act directs the department to oversee the fund and provide the necessary budget to do the job.
Mr. Thompson's memo was written before his appointment as Mr. Homan's successor. He has since told the Indian Affairs Committee that trust funds were being properly administered and that the program was sufficiently funded.
In a letter to Mr. Babbitt last week, Republican Sens. Ben Nighthorse Campbell of Colorado and Sen. Frank H. Murkowski of Alaska, chairman of the Energy and Natural Resources Committee, said they were concerned that Mr. Thompson appeared willing to endorse a process he had criticized.
"Before our committees, you vigorously testified about your commitment to clean up the trust fund fiasco," they wrote to Mr. Babbitt. "We are not encouraged, however, when only hours after the hearing, your hand-picked acting trustee seems to reverse himself on an issue critical to the success of this effort."
They said if the many problems Mr. Thompson's memo described had been corrected, Mr. Babbitt should list the improvements to the committees.
from PDL 1999-Mar-26, from the Associated Press, by Philip Brasher:
Interior lawyer alleges he was ordered to 'purge' records
WASHINGTON (AP) - An Interior Department lawyer who says he was ordered to dispose of some Indian trust records will be questioned next week in connection with a lawsuit over the government's handling of accounts worth $500 million.
In an affidavit made public Thursday, Ralph Williams said he was given the job of reconciling discrepancies in some of the accounts in late 1997. Once his work was done, he was supposed ''to ensure that ... any other information which was inconsistent from my findings could be purged from the files,'' he said.
Williams said he declined to get rid of the material because he thought it would be illegal. He said the instructions came from the department's deputy solicitor, Ed Cohen.
Interior officials denied any wrongdoing.
Last month, U.S. District Judge Royce Lamberth held Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin in contempt for the government's two-year delay in turning over checks and other documents related to five account holders who filed the lawsuit. It was not clear whether Williams handled any of those documents.
Lamberth released the affidavit Thursday along with an order protecting Williams from retaliation by the department.
Williams is scheduled to be questioned by lawyers in the case on Tuesday.
The department's chief attorney, Solicitor John Leshy, issued a brief statement defending Cohen and denying that his office would attempt to dispose of records that are relevant to the lawsuit. Department officials declined to make Cohen available for an interview.
Lawyers for the Indian plaintiffs brought Williams' allegation to the judge's attention after they were approached recently by Williams' attorney.
Williams still works in the solicitor's office. He did not respond to a request for an interview Thursday.
Interior manages $2.5 billion belonging to tribes in addition to the $500 million owned by individual Indians. The money includes lease revenue, royalties and court settlements. The funds were mismanaged for decades, and lawyers for the Indians say the government could be liable for billions of dollars in claims.
Legislation was introduced in the Senate Thursday to let tribes have their money transferred to private banks.
''This bill is the first step, but it is an indication that many in Congress have no faith in the Interior Department's ability to manage these accounts,'' said the chairman of the Senate Indian Affairs Committee, Ben Nighthorse Campbell, R-Colo. ''There seems to be an institutional rot there that does not go away.''
Campbell cosponsored the bill with Sen. Frank Murkowski, an Alaska Republican who chairs the Senate Energy and Natural Resources Committee.
from PDL 1999-Mar-12, from the Associated Press, by Philip Brasher:
Interior officials chastised for snubbing Indian leaders
WASHINGTON (AP) - Interior Department officials upset by congressional criticism have broken off talks with Indian leaders on settling claims on billions in Indian trust funds.
Senate Indian Affairs Committee Chairman Ben Nighthorse Campbell, R-Colo., said Thursday the department's action ''sends a dangerous message to witnesses that exercising their right to free speech could result in reprisals from the federal government.''
Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin were found in contempt of court last month in connection with a lawsuit over the government's handling of the funds.
On March 3, Interior officials canceled a meeting with tribal leaders a few hours after the hearing by two Senate committees, including Campbell's.
Interior's assistant secretary for Indian affairs, Kevin Gover, said he did not like the tone of the tribal representatives' testimony.
''You can't call me a liar in the morning and that afternoon ask me to trust you,'' said Gover, himself an Indian. ''We're not sure there is enough trust between the two parties to continue to negotiate without some kind of congressional involvement.''
Tribal leaders say his response was childish.
''I came 1,400 miles to give the testimony and meet with the Bureau of Indian Affairs. They told us their feelings were hurt and they didn't want to meet,'' said Charles Tillman, chief of Oklahoma's Osage Nation.
A spokeswoman for Babbitt said he had nothing to do with canceling the negotiations. ''We're hopeful that a process can be set up for productive meetings in the future,'' Stephanie Hanna said.
Interior manages $2.5 billion belonging to tribes and another $500 million owned by individual Indians. The money includes lease revenue, royalties and court settlements. The funds were mismanaged for decades, and lawyers for the Indians say the government could be liable for billions of dollars in claims.
Tillman is on the board of a group that has been negotiating with the department on a way to settle claims on the tribal accounts. The accounts belonging to individual Indians are the subject of a class-action lawsuit.
The biggest single account, worth $500 million, is the proceeds of a court judgment won by the Sioux tribes as compensation for their loss of the Black Hills.
The federal judge handling that litigation said he was tired of lies and bureaucratic foot-dragging and found Babbitt and Rubin in contempt of court over their delay in turning over account records.
Here are some articles on the widely forgotten Gamblegate (my term) and some related issues:
from TPDL 1998-Dec-28, from the Washington Times, by Jerry Seper:
Powwow links donation, casino decision
Both sides got what they were after when top White House and Democratic Party officials met with leaders for three Midwestern Indian tribes on April 28, 1995, to discuss "generic" contributions to the cash-strapped Democratic National Committee.
DNC Chairman Donald Fowler left the session confident the leaders of the St. Croix Chippewa and Oneida tribes of Wisconsin and the Shakopee Mdewakantan Sioux of Minnesota would prove loyal and generous supporters, a faith that the Indian leaders justified with some $270,000 in donations to the party.
And within three months, the tribal leaders also saw their top priority addressed when Interior Secretary Bruce Babbitt reversed a decision by his own department's regional office and denied a license application from a trio of rival Chippewa tribes proposing to open a gambling casino at a failed dog-racing track in Hudson, Wis.
But the chain of events set in motion by that meeting has badly tarnished the Clinton administration, leaving Mr. Babbitt the target of an independent counsel's probe that he bowed to political pressure in denying the application and then lied about it to Congress.
And investigators for independent counsel Carol Elder Bruce are still sifting through the memos, letters and telephone calls generated by the April meeting to see if the wrongdoing reached higher -- into the top echelons of the Democratic Party and into the White House itself.
According to lawyers and others close to the Babbitt probe, it was a letter from Mrs. Bruce that persuaded Attorney General Janet Reno earlier this month to put off for 60 days a decision on whether to begin a preliminary investigation of former White House Deputy Chief of Staff Harold Ickes on an unrelated matter.
Mrs. Bruce's letter, first reported in the Los Angeles Times, suggested that Mr. Ickes' central role in the casino denial and other Clinton administration fund-raising scandals indicated that Miss Reno should wait. An expansion by Mrs. Bruce into Mr. Ickes' involvement with those other scandals -- including campaign money-laundering charges involving the Clinton-Gore campaign and the Teamsters union -- could prove damaging to the former White House aide and lead investigators to a wider circle of campaign corruption within the White House, the sources said.
The tribal leaders in attendance that April 1995 day desperately wanted to block the Hudson, Wis., casino, fearing it would cut into their own gaming enterprises. They were buoyed at the prospect of meeting with Mr. Fowler and several "influential" Democrats.
"The people we are meeting with are very close to President Clinton and can get the job done," a lobbyist for the anti-casino tribes told them in advance.
Mr. Fowler assured the Indian leaders and their lobbyists that he would plead their case to the White House, promising to take their concerns to Mr. Ickes. He personally called Mr. Ickes at the White House soon after the meeting.
The Chippewa tribes' application had been pending before the Interior Department for two years, having already been approved by the department's regional Bureau of Indian Affairs. Mr. Babbitt's reversal, handed down in July 1995, set into motion a "campaign strategy" by anti-casino tribal leaders, who eventually gave $270,000 to the Democratic Party for the 1996 campaign.
Within 10 days of the meeting, Washington lobbyist Patrick O'Connor urged Mr. Ickes to deny the casino license. In a May 8 letter, he noted that his clients were important Democratic Party donors, while the three Chippewa tribes seeking the license backed Republicans.
Six days later, Thomas J. Schneider, a Washington lawyer who also represented the anti-casino tribes, met with Mr. Ickes and sought assurances he would "follow through" on the application. During the next month, several memos were exchanged between Mr. O'Connor, Mr. Ickes and Heather Sibbison, an Interior Department official and aide to Mr. Babbitt.
It was Mr. Schneider who hosted Mr. Clinton at a July 1995 fund- raiser that amassed $350,000 -- the night before Mr. Babbitt denied the license.
The Chippewa tribes, in a lawsuit filed after their license was denied, argued that the contacts and access their rivals enjoyed swayed Mr. Babbitt's decision, in particular because of promised campaign donations. Mr. O'Connor's letter not only specifies the political ramifications of the casino application, but confirms that Mr. Fowler had discussed the issue with Mr. Ickes.
"I have been advised that Chairman Fowler has talked to you about this matter and sent you a memo outlining the basis for the opposition to creating another gaming casino in this area," he wrote.
Records show Mr. O'Connor also spoke personally to Mr. Clinton about the license at an April 24, 1995, fund-raiser in Minnesota. He said in his diary that the president told White House Deputy Counsel Bruce Lindsey to "talk to O'Connor about his concerns." Mr. O'Connor said he was assured by Mr. Lindsey that someone at the Interior Department would contact him.
Mr. Lindsey called Loretta Avent, presidential aide and specialist on Indian affairs, from Air Force One and asked her to look into the matter. She later prepared a memo for Mr. Ickes saying the "legal and political implications of our involvement would be disastrous." She urged that the matter be handled within the Interior Department.
"The press is just waiting for this kind of story," she warned. "We don't want to give it to them."
But on June 26, 1995, Jennifer O'Connor, an official in the White House Office of Political Affairs, faxed a letter to Mrs. Sibbison asking about the pending casino application. The next day, Mrs. Sibbison faxed back two letters -- one saying the department had decided to deny the application, the other that the department was reviewing the matter with "great care."
The Sibbison letters suggest a decision about the license application had been made before Mrs. O'Connor's letter and that the Interior Department and the White House recognized the need for subterfuge to disguise the political nature of the decision, investigators believe.
In fact, the diary of Mr. O'Connor, the lobbyist for the anti-casino tribes, shows his clients began giving money the very day Mr. Babbitt denied the license. In a July 14, 1995, entry, Mr. O'Connor details his plans to "follow up" with Mr. Ickes, Mr. Fowler and Terry McAuliffe, chief fund raiser for the Clinton- Gore '96 campaign.
U.S. District Judge Barbara B. Crabb in Madison, Wis., who is hearing the Chippewas' lawsuit, said the Sibbison letters "seem almost to allow Ickes to choose which direction he wanted the department to take."
Arizona lawyer Paul Eckstein, who represented the losing tribes, took a similar view. He told a Senate Governmental Affairs Committee hearing dealing with campaign-finance abuses that Mr. Babbitt told him during a July 14, 1995, meeting that the anti- casino tribes were prepared to give $500,000 to Democrats and Mr. Ickes had ordered him to issue the denial.
Mr. Eckstein, a former law school classmate and campaign manager for Mr. Babbitt when he was governor of Arizona, testified that Mr. Babbitt said Mr. Ickes "had directed him to issue the decision that day."
It was "very clear to me that political pressure was being brought to bear," Mr. Eckstein concluded.
The Arizona lawyer told the same story to political consultant Mark Goff shortly after his meeting with Mr. Babbitt, during a taxi ride to Ronald Reagan Washington National Airport.
Mr. Babbitt, in an August 1996 letter to Sen. John McCain, Arizona Republican and a member of the Committee on Indian Affairs, denied Mr. Eckstein's assertion, saying he "never discussed the matter with Mr. Ickes." But in October 1997, Mr. Babbitt admitted to the Senate Governmental Affairs Committee that he had told Mr. Eckstein of pressure from Mr. Ickes, but said it was a lie offered in an "awkward" attempt to cut short a conversation.
Mr. Babbitt's "direct statement concerning pressure asserted on him by the White House, even if the pressure was directed to the specific release date of the decision, is reason to suspect political foul play," wrote Judge Crabb.
Records obtained during the Chippewas' lawsuit raise questions about what Judge Crabb described as a "complete turnabout" between a June 8, 1995, recommendation by the department's Indian-gaming staff to approve the casino license and the department's final decision -- made as early as 19 days later --to deny it.
Interior Deputy Secretary Michael J. Anderson has said the denial was based on strong local opposition to the casino in Wisconsin and from fears of the impact of the new casino on an existing one run by rival tribes, including the St. Croix of Wisconsin, in Turtle Lake, Wis.
But the department's official explanations have not addressed why two separate offices recommended approval of the license, or why the department approved a similar application by the Mashantucket Pequot Indian tribe of Connecticut despite strong local opposition.
Judge Crabb's March 1997 order found "considerable evidence" that political pressure had influenced the denial, including Mr. Fowler's contacts with the administration and the fact that Interior Department officials met with the anti-casino tribes, but did not notify the Chippewas until six weeks later.
The judge also cited the two letters faxed by Mrs. Sibbison to Mr. Ickes, "allowing him to determine whether to announce the department's decision or to keep it secret until a later date," and the fact that the department's "regular decision-maker" recused herself after the application was denied.
"I do not intend to imply that all contacts between agency officials and White House staff are improper," she wrote. But she proceeded to cite "considerable evidence that suggests that improper political pressure may have influenced agency decision- making."
Mr. Fowler, who owns a South Carolina communications firm, confirmed he had spoken with investigators from Mrs. Bruce's office but said it would "not be appropriate for me to comment on what we discussed or where the investigation was headed."
Mr. O'Connor and Mr. Schneider did not return numerous calls to their offices in Washington and Minnesota for comment.
Mr. Ickes, the focus of a separate Justice Department probe into accusations he lied to a Senate committee investigating campaign- finance abuses, also did not return calls for comment. He is now in private law practice in Washington.
Named in March by an appeals court panel to head the probe, Mrs. Bruce and her investigators have targeted campaign-finance abuses by White House and Democratic Party officials. She has issued dozens of grand-jury subpoenas, interviewed numerous witnesses and examined hundreds of documents, including Interior Department e-mail messages on the license denial.
Mr. Babbitt has denied that the White House ordered him to reject the license and has predicted he would be cleared in the probe. He called the dispute "a high-stakes quarrel among different gambling interests," adding that he was "caught in the cross fire."
from PDL 1999-Mar-22, from the Washington Times, by Jerry Seper:
Interior official flip-flops on Indian funds
An Interior Department official who told a Senate committee this month the department's oversight of Indian trust funds was being properly administered and sufficiently funded took a contrary position in a confidential memo last year.
The official, Thomas Thompson, apparently changed his mind after being named to replace Special Trustee Paul Homan, his former boss, who oversaw the fund. Mr. Homan resigned amid accusations that Interior Secretary Bruce Babbitt stripped him of the independence, authority and funding he needed to do the job.
Mr. Thompson, in a July 1998 memo he wrote as deputy special trustee for operations, said he was "grateful" he did not run the program and outlined numerous concerns he had about the department's ability to implement the Trust Fund Management Reform Act of 1994. The act directs the department to oversee "effectively and efficiently" the fund and to provide the necessary budget to get the job done.
"The process to date has been inordinately difficult, has taken far longer than necessary, and has resulted in some ... project plans that are well short of what I expected and hoped for," he wrote, adding that the Bureau of Indian Affairs had been "consistently late in organizing and mobilizing the project and responding to established milestones."
"BIA project plans, after 11 months, are sketchy, even for this high-level plan," he wrote. "I am grateful that I'm not responsible for implementing the BIA plans."
Mr. Thompson did not return calls to his office for comment.
The memo, however, has since come to the attention of Sen. Ben Nighthorse Campbell, the Colorado Republican who chairs the Senate Committee on Indian Affairs, and Sen. Frank H. Murkowski, Alaska Republican and chairman of the Energy and Natural Resources Committee.
Mr. Babbitt testified March 3 before the two committees, promising to fix the $2.4 billion management mess involving the trust funds his department is supposed to protect. "You'll be the judge. I will do my best," Mr. Babbitt said when asked what he would do about mismanagement of trust fund accounts by the BIA.
The secretary said he had ordered a reorganization and requested more funding for next year, and that work was under way to reconcile the accounts. He also said a new accounting system was expected to be in place by the end of the year.
Mr. Homan, a former federal bank regulator, testified that he was blocked by Interior officials who sought to undermine reforms at the agency with continual rejections of his requests for money and manpower "in favor of higher departmental priorities." He said the Interior Department could "no longer be trusted to keep and produce trust records" and urged that the accounts be assigned to a separate and independent agency.
In a letter Friday to Mr. Babbitt, the two senators said they were concerned that Mr. Thompson, in his new role as acting trustee, appeared willing to endorse a process he previously criticized.
They wrote: "Before our committees, you vigorously testified about your commitment to clean up the trust fund fiasco. We are not encouraged, however, when only hours after the hearing your hand-picked acting trustee seems to reverse himself on an issue critical to the success of this effort."
They said if the "numerous, very serious problems" Mr. Thompson identified in the memo had been corrected "in the eight months since," Mr. Babbitt should list the improvements to the committees.
Shortly after the March 3 hearing, Mr. Thompson signed a letter of certification vouching for the adequacy of the trust fund oversight effort and its funding.
The Interior Department was named in a class-action lawsuit in 1996 filed by the Native American Rights Fund -- representing various Indian tribes -- that accused the BIA of mismanaging the trust funds. Mr. Babbitt and Treasury Secretary Robert E. Rubin were identified as defendants in the suit.
Department officials have been unable to produce accounting records or statements to verify how much cash has been collected. An audit by the Arthur Andersen accounting firm said the BIA could not account for $2.4 billion in transactions involving the funds.
from PDL 1999-Mar-4, from the Wall Street Journal, by John J. Fialka:
Senate Panel Attacks Babbitt For Handling of Indian Trusts
WASHINGTON -- Interior Secretary Bruce Babbitt, cited for contempt of court for his department's alleged mishandling of Indian trust funds, struggled to convince two irate Senate committee chairmen that he will correct the problem.
Republican Sen. Ben Nighthorse Campbell of Colorado warned Mr. Babbitt that some members of his Senate Indian Affairs Committee may fight the department over its $100 million budget request to conduct an accounting of the funds, because the department appears to have violated a 1994 law requiring a special trustee to oversee the accounts.
"There seems to be an institutional rut that doesn't go away," Sen. Campbell told Mr. Babbitt at a congressional hearing. In January, Mr. Babbitt reorganized the office of the special trustee, Paul Homan, prompting his resignation.
"I've been on this committee for 18 years, and I'm hearing pretty much the same thing," said Sen. Frank Murkowski, chairman of the Senate Energy and Natural Resources Committee. "There's no excuse for that," the Alaska Republican told Mr. Babbitt, pointing to a set of enlarged photos showing trust-fund files stacked along with rubbish and paint cans in Interior Department warehouses.
The case involves disorganized and incomplete records of more than 500,000 bank accounts holding billions of dollars for individual Indians, many of whom claim they are being shortchanged by the government.
Some members of the two panels worried that given its history with the Indian trust funds, the department would waste the $100 million it wants to address the problem. Others, including Sen. Murkowski, suggested that reforms would come more quickly if the trust funds were handled by private banks.
After taking a verbal beating from several members of the two panels, Mr. Babbitt blamed prior administrations for the problem, which he explained stems from faulty and sometimes nonexistent accounting systems. Despite these accounting gaps, the secretary insisted that there is no evidence of large-scale fraud.
"This problem began on March 3, 1849," said Mr. Babbitt, referring to when the Interior Department was created.
He said Interior will begin a pilot project this summer in Billings, Mont., featuring a new accounting system it is developing for individual Indian accounts. He also said the department will ask Congress for new legislation to halt what it calls the "fractionation" of Indian-owned lands, which have been carved into tiny slivers by an inheritance process that complicates the accounting of rents and oil royalties owed to individuals.
Last month, U.S. Judge Royce Lamberth cited Mr. Babbitt in civil contempt for repeated failures to produce documents on the trust funds. Interior is paying for a special court-appointed magistrate to find the documents.
from TPDL 1999-Jan-28, from the Wall Street Journal, by John J. Fialka, Staff Reporter:
Babbitt and Rubin Face Fiery Judge On Native American Trust-Fund Case
WASHINGTON -- Chief Justice William Rehnquist isn't the only jurist presiding here over a case of a top government official in hot water. As the U.S. Senate considers President Clinton's impeachment, Federal Judge Royce Lamberth is mulling how to bring his stern brand of justice to two cabinet members.
Judge Lamberth is weighing whether to hold Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin in contempt of court in a dispute over an American Indian trust fund their two agencies jointly run. The case is a tangled mess of missing records and bureaucratic finger-pointing over alleged losses involving more than 500,000 savings accounts containing $300 million kept each year for Indians. During closing arguments this week, Judge Lamberth called this the most mishandled federal case he has seen in more than 29 years as a judge and a lawyer.
Federal lawyers admit they have missed two court-ordered deadlines to provide records. Judge Lamberth has spent the past two weeks hearing evidence that Interior Department officials may have intentionally slowed the record-gathering process.
Justice Department lawyers defending the two departments have been treading gingerly. The judge has become the legal equivalent of volcanic Mount Pinatubo when it comes to erupting over the Clinton administration's sometimes wayward handling of legal matters. "This is a man who takes no prisoners," says Elizabeth Rindskopf, a former general counsel for the Central Intelligence Agency.
In 1997 Judge Lamberth accused White House lawyers and President Clinton's former adviser, Ira Magaziner, of "dishonest" and "reprehensible" conduct involving the use of advisory panels in preparing the administration's ill-fated health-care reform in 1993. Just this month, hearing a lawsuit brought by a conservative group, Judicial Watch, he likened the actions of former Commerce Department officials to "con artists" and "hooligans."
In the latter case, Judge Lamberth shows no sign of flagging in his four-year crusade to piece together what he recently termed an "unsightly puzzle" of shredded and missing documents allegedly describing political payoffs to late Commerce Secretary Ron Brown. In one of the law's stranger maneuvers, lawyers for the department recently attempted to close the matter by asking the judge to decide against them in the case, which involves requests for the information under the Freedom of Information Act. But Judge Lamberth decreed that the case will continue, giving more time for Judicial Watch to hunt for records.
'No Words' for 'Incredulity'
It did not help the Commerce Department's position when the judge discovered that agency officials in 1997 had awarded some of the accused document-shredders medals for showing "unusual commitment" in the effort to respond to his court's orders. "Finding no words to adequately express its incredulity, the Court simply disagrees," wrote Judge Lamberth in a recent decision that hints contempt proceedings may follow, both against Commerce Department and White House officials.
Recent high-profile cases before Judge Royce Lamberth:
Association of American Physicians and Surgeons Inc. vs. Hillary Rodham Clinton, et al. Judicial Watch Inc. vs. United States Department of Commerce. Elouise Pepion Cobell, et al. vs. Bruce Babbitt, et al. Michele E. Shepherd, et al. vs. American Broadcasting Cos., et al.
The judge's tough actions draw mixed verdicts. "He's a hard taskmaster with a healthy dose of suspicion of government activities," says Ms. Rindskopf. "You come to realize that you're dealing with a judge who won't take your positions without challenge... . I think that's probably quite healthy."
"I think he abuses the way a judge should act," says Mr. Magaziner, now a business consultant in Rhode Island. "He should not be able to just spout off at the mouth and hurt people's reputations." After an investigation by the U.S. attorney's office here, Mr. Magaziner was later cleared of making intentionally misleading statements in the health-reform matter. He is appealing Mr. Lamberth's decision, hoping to get words such as "dishonest" stricken from the record.
Whatever he may be, Mr. Lamberth is a man who is thoroughly at home in the middle of paper-strewn, bureaucratic foulups. During the Reagan administration, he was an assistant U.S. attorney for the District of Columbia. As head of the civil division, his job was often to defend government agencies when they found themselves in a legal mess.
"When you represent the government, you learn that it sometimes does funny things," explains Joseph diGenova, who was Mr. Lamberth's boss. Mr. diGenova talked up Mr. Lamberth to the Reagan administration, which appointed him to the District Court bench in 1987. It was a rare career move for a lifelong civil servant with no major political backers on Capitol Hill. "He's a damned good trial judge," says Mr. diGenova.
Stickler on Behavior
In an era where judges are sometimes subjected to arm-waving, table-pounding harangues by lawyers, Mr. Lamberth, 54, is a throwback. He is the author of the Federal Bar Association's "Model Rules of Professional Conduct for Federal Lawyers" and is a stickler for proper courtroom demeanor.
"You are civil in his court; he insists on it," says Mark Lane, 71, a liberal lawyer who specializes in civil-rights cases. In 1993 he found himself in an uphill battle against American Broadcasting Cos. and its lawyers from Wilmer, Cutler & Pickering, one of Washington's white-shoe law firms. He was trying to prove a civil-
rights violation on behalf of two ABC employees, but their names didn't appear on company documents the court ordered until Mr. Lane found a witness who testified that one document was doctored.
Judge Lamberth erupted, granting a default judgment against ABC. He declared: "ABC and its attorneys engaged in a pattern of misconduct ranging from document alteration to witness harassment." His ruling was later overturned, and the case was settled out of court. William Perlstein, chairman of the management committee of Wilmer, Cutler & Pickering, says the higher-court ruling "reflected a just rejection of plaintiff's unfounded allegations."
Mr. Lane, who has also lost a decision before Judge Lamberth, still feels awed by the judge. "He's one of those judges who hark back to the time when it was honorable to be a lawyer. He's one of the few left."
Meantime, the Interior Department, facing the probability of sanctions from Judge Lamberth for not producing the documents in the Indian trust-fund case, appears to have compounded its troubles by telling the judge that it had solved the problem with a reorganization. Judge Lamberth found out later that the reorganization downgraded the two officials in the department who were trying to fix the trust fund's faulty record-keeping.
Dictating the Future
"The secretary [Mr. Babbitt] has forfeited any right to dictate the future of this case," the judge said last week. "This court is going to dictate the future." Dennis Gingold, representing the Indians, asked for a contempt finding, fines and a court-appointed master to force the producing of documents.
To put its case in the best light, the Justice Department selected Phillip Brooks, a scrupulously polite, mild-mannered attorney who speaks in a soft voice. Mr. Brooks even apologized to the judge for his actions as well of those of the departments of Interior and Treasury, but it may not help.
"You got yourself behind the eight ball," said the judge, flashing a wolfish grin as the lawyer launched into his defense.
from TPDL 1999-Feb-23, from Scripps Howard, by Michael Hedges and Rachel Smolkin:
Babbitt, Rubin in contempt for handling of Indian lawsuit
WASHINGTON -- Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin were held in contempt of court Monday for "egregious conduct" in defending a lawsuit involving American Indian trust funds.
In blistering language, U.S. District Judge Royce Lamberth said that by failing to deliver ordered documents to Indian attorneys, "The federal government here did not just stub its toe ... it engaged in a shocking pattern of deception of the court."
"I have never seen more egregious misconduct by the federal government," he said.
The judge's 76-page contempt order faults Babbitt, Rubin and Assistant Secretary of the Interior Kevin Gover for failing to turn over documents related to the trust funds.
Lamberth's order forces the government to pay lawyers' fees and other expenses -- which plaintiffs' attorneys said could run $500,000 to $1 million -- from delays in producing the documents.
"I've never felt better in my life," said Elouise Pepion Cobell, the lead plaintiff in the lawsuit brought by the Native American Rights Fund in Boulder, Colo. "Now they'll have to sit up and take notice that this is an enormous problem, that they can't ignore it, and there's no more of this stall, stall, delay."
Cobell said the government's mismanagement has affected some of the nation's poorest residents.
The government has offered a series of explanations for failing to produce the papers, ranging from inability to reach records in high stack areas to fears that some documents stored in an Albuquerque, N.M., warehouse were so tainted with rodent droppings that disturbing them would subject workers to the deadly hantavirus.
But on Monday, a joint Interior, Treasury and Justice statement sounded a more contrite tone.
"We deeply regret the mistakes that we made in the case," the unsigned statement said. "We are committed to meeting the judge's concerns in today's order."
The contempt citation grew from a class-action lawsuit filed by five Indians in 1996 that charged that the federal government had mismanaged Indian trust funds dating to the early 1800s.
Each year the federal government funnels about $250 million into at least 300,000 trust accounts held by individual Indians to pay for oil, gas and timber royalties.
In 1996, Lamberth ordered the Interior and Treasury departments to turn over thousands of pages of documents pertaining to the trusts to allow for trial preparation.
But over the next 28 months, the government failed to produce the documents.
Lamberth's Monday ruling bluntly accused the federal government of stalling and a lack of candor.
"Justice has not been done to these Indian beneficiaries," he said. "Moreover, justice delayed is justice denied. The court cannot tolerate more empty promises."
The judge singled out Babbitt for possible future sanctions.
"This opinion should cause Secretary Babbitt to now understand ... that his own inattention to detail and wholesale delegation of authority to individuals who have not served his -- or the government's -- interest may cause him future problems with this court if the government misconduct continues," Lamberth wrote.
It was "unfortunate" that Rubin was "tarnished" with the contempt citation, Lamberth said.
"What personal role he has had in this fiasco is unknown to the court," Lamberth said. "What is clear is that he has totally delegated his responsibility to others, and they have miserably failed to comply with this court's orders."
Keith Harper, an attorney for the Native American Rights Fund, described the contempt ruling as "sort of a scarlet letter within the judicial system."
He said government attorneys repeatedly misinformed the court about their ability to produce documents for the five named plaintiffs.
"Their strategy has been one of obfuscation," he said. "This will pave the road to getting those obstacles out of the way."
Legal experts said it was rare, and possibly unprecedented, for two Cabinet officials to be held in contempt of court on the same day.
"It is a stigma for anyone, especially a secretary-level official to be held in contempt of court," said Paul Rothstein, a law professor at Georgetown University. "This stings," he said. "It should cause the wheels to turn."
The timing of the contempt citation could prove embarrassing for the Clinton administration.
A federal judge in Arkansas signaled last week that she is considering ordering a hearing into whether President Clinton should be held in contempt for allegedly making misleading statements during his Paula Corbin Jones deposition at which the judge presided.
from TPDL 1999-Jan-26, from USA Today:
Babbitt role in Indian funds to be probed
WASHINGTON - Lawmakers are looking into Interior Secretary Bruce Babbitt's recent overhaul of the office in charge of straightening out $3 billion in Indian trust funds. Sen. Ben Nighthorse Campbell, R-Colo., chairman of the Senate Indian Affairs Committee, had given Babbitt until Sunday to explain his action and plans to hold a hearing on the matter'' sooner rather than later,'' committee spokesperson Chris Chagery said Monday.
from TPDL 1998-Dec-24, from the Associated Press 1998-Dec-23:
Babbitt, Rubin threatened with contempt over Indian trust records
WASHINGTON (AP) - A federal judge is threatening to hold Interior Secretary Bruce Babbitt and Treasury Secretary Robert Rubin in contempt for the government's delay in producing records of Indian trust funds.
The Interior and Treasury departments are being sued over the mishandling of 300,000 Indian accounts worth an estimated $500 million. Interior's Bureau of Indian Affairs was ordered two years ago to turn over statements, checks and other documents on accounts held by five Indians who are the lead plaintiffs in the class-action lawsuit. So far, only a small amount of the documents have been produced.
U.S. District Judge Royce Lamberth, who has frequently clashed with the Clinton administration, last week set a contempt hearing for Babbitt and Rubin for Jan. 11.
``They've meddled with the wrong person here as far as stonewalling and ignoring his orders,'' an attorney for the Indians, Robert Peregoy, said Wednesday.
In a separate case, Lamberth on Tuesday accused Commerce Department officials of illegally destroying evidence in connection with charges that the agency sold slots on trade missions for donations to Democratic candidates. He's the same judge who earlier fined the administration $286,000 for making inaccurate statements about the makeup of its health care task force.
At a Dec. 15 hearing in the Indian case, government lawyers gave him a variety of reasons for failing to turn over the records, including possible viral contamination of two storage facilities in Albuquerque, N.M., and rodent infestation at another site.
The government hopes to have the material by the hearing next month, said Ed Cohen, an Interior Department lawyer.
``The plaintiffs have been aggressive in seeking records. We're doing the best we can in producing them. We're doing this all at the same time that we're trying to fix the system,'' he said.
The records that have been turned over have raised more questions about the accounts. Of 67 checks issued by the government, only 11 had been endorsed by the account holder, Peregoy said.
The records also indicate one of the plaintiffs, Elouise Cobell, was not awarded her portion of her deceased father's land until more than 15 years after he died, according to auditors hired by the plaintiffs.
``Finally, finally, a court and a judge has realized the magnitude of this mismanagement, and he is not going to let them get away with it,'' said Ms. Cobell, who lives on Montana's Blackfeet reservation.
The 300,000 accounts belong to individual Indians who receive royalties and other income from their land. As much as $1 million has flowed through some of the accounts in a single year, while others receive only a few dollars.
from TPDL 1999-Jan-8, by Philip Brasher, Associated Press Writer:
Indian Trust Fund Dispute Grows
WASHINGTON (AP) -- The long and embarrassing effort to clean up $2.5 billion in Indian trust funds got messier with the sudden resignation of the presidential appointee in charge of reconciling the accounts and improving the bookkeeping.
In quitting Thursday, Special Trustee Paul Homan accused Interior Secretary Bruce Babbitt of stripping him of the authority he needed to do his job.
Babbitt's department is being sued over its decades-long mismanagement of the money. Babbitt faces a contempt hearing Monday over the government's failure to turn over canceled checks and other records for accounts held by the lawsuit's lead plaintiffs.
Earlier this week, Babbitt ordered a reorganization of Homan's office ``to enable us to make progress where it is now flagging.''
Homan, a former banker appointed to his post in 1995 under a set of congressionally ordered reforms, fired back in his resignation letter that Babbitt ``usurped the powers, duties and responsibilities'' of his office.
Members of Homan's advisory board accused Babbitt of making him a scapegoat for the department's problems.
``It's like me telling you to drive a car but not giving you the keys of the car, and then turning around and chastising you for not driving the car,'' said Gregg Bourland, a board member and chairman of South Dakota's Cheyenne River Sioux.
An Interior Department spokeswoman, Stephanie Hanna, declined comment on the resignation but denied that Babbitt sought to undermine Homan. He ``has done a good job of moving the ball as far as he has moved it,'' Hanna said.
The funds include 300,000 accounts held by individual Indians worth $500 million and another 2,000 tribal accounts worth $2 billion. The money includes lease revenue, royalties and court settlements.
Some of the accounts are worth only a few dollars. The largest one, valued at $400 million, is a court's award to the Sioux nation for its loss of the Black Hills.
Among a series of embarrassing revelations, the Bureau of Indian Affairs was unable to document $2 billion of transactions in the tribal accounts over a 20-year period. It is not known how much of that is actually missing, but it has been estimated the government could be liable for up to $575 million just in the tribal accounts.
The special trustee's office is responsible for handling the money and improving the accounting system. But leases and other records necessary for reconciling the accounts are scattered around the country in various BIA offices.
In 1997, Homan proposed creating a quasi-governmental bank to handle the money. Babbitt rejected the idea and promised that the department would develop a state-of-the-art accounting system instead.
Babbitt's reorganization order put one of Homan's assistants in charge of developing the new accounting system and placed the record keeping under a new official with extensive experience in government records management.
In his resignation letter, Homan said he was not informed of the actions before Babbitt took them, and he complained that the new official had no experience with the trust fund records.
from TPDL 1999-Jan-12, from the Associated Press via Nando Media, by Philip Brasher:
Judge checking Babbitt's handling of trust office
WASHINGTON (January 11, 1999 5:26 p.m. EST http://www.nandotimes.com) - A judge threatening to hold Interior Secretary Bruce Babbitt in contempt for his department's failure to submit Indian trust records for a lawsuit is looking into Babbitt's recent moves against the officials in charge of the accounts.
As a contempt hearing opened Monday, U.S. District Judge Royce Lamberth announced he would subpoena former Special Trustee Paul Homan to testify about Babbitt's actions.
Homan, a presidential appointee, quit last week after Babbitt ordered a reorganization of the trust office, which is in charge of cleaning up nearly $3 billion in funds held for tribes and individual Indians. Homan, a former bank executive and federal bank regulator, wasn't consulted about the overhaul and accused Babbitt of undermining his authority.
"Don't you think Mr. Homan's resignation flies in the face of the secretary's contention that he's acting in good faith?" the judge asked government lawyers.
The Interior Department is being sued over its admitted decades- long mismanagement of the Indian trust funds, and the government lawyers said Babbitt's reorganization of the trust office showed he was dealing with the problem. His actions included reassigning the top recordkeeping official.
"If you've got a football team that isn't winning, sometimes the coach has got to go," said Justice Department lawyer Phillip Brooks. "The secretary is entitled to pick his coach, because he's in trouble here and he's entitled to try and fix it."
Lamberth last month lost patience with delays in producing canceled checks and other account records for the lawsuit's five lead plaintiffs and he ordered the contempt hearing for Babbitt and Treasury Secretary Robert Rubin.
The hearing is expected to take a week. It isn't clear whether Babbitt, who appears to be the judge's main concern, will be forced to testify.
The funds include 300,000 accounts held by individual Indians worth $500 million and another 2,000 tribal accounts. The lawsuit focuses on the individual accounts.
The special trustee's office is responsible for handling the money and improving the accounting system. Leases and other records necessary for reconciling the accounts are scattered around the country in various Bureau of Indian Affairs offices.
Homan was appointed to his post in 1995 under a set of congressionally ordered reforms.
In a letter to the judge, the trust office's advisory board said Homan's departure would "undoubtedly curtail progress on the reforms."
from TPDL 1998-Nov-16, from "Inside Politics: News and political dispatches from around the nation," from the Washington Times, By Greg Pierce:
Not many tears are being shed over the departure of the Secret Service chief, says U.S. News & World Report magazine. "Pardon us if we're skeptical of the congratulations being accorded Secret Service Director Lewis Merletti, who's quitting the 4,400-person force to run the rent-a-cop operation for the new NFL team in Cleveland," the magazine said. "Our sources say plainclothes agents and uniformed Secret Service police are happy about the sudden departure because their chief was a less-than-venerated boss. They claim morale has plummeted and that many are fleeing the organization. They blame the Lewinsky affair and Merletti's efforts to block Secret Service testimony in the sex case and the top brass's management style, especially efforts to stifle dissent. "Under Merletti, the Uniformed Division has complained the loudest, especially about leadership changes and the failure of President Clinton to make good on promises to let it unionize. The problems got so bad that the division's labor backers published their complaints on the Internet."
The New York Times editorial page, which until recent times took the sex-and-lies scandal seriously, is now urging Rep. Robert L. Livingston to push the Judiciary Committee to end its probe of President Clinton. Mr. Livingston, the Louisiana Republican who is in line to be the next speaker of the House, should lean on Rep. Henry J. Hyde, the Illinois Republican who is leading the impeachment investigation, the newspaper said in an editorial yesterday. "This will be a trend-setting test of Mr. Livingston's abilities. He gained support for the speaker's job by tapping resentment over Mr. Gingrich's penchant for trampling on the autonomy of House committees and their chairmen. He therefore cannot run over Mr. Hyde, who is looking grumpier by the day. But effective speakers learn to guide without dictating," the newspaper said.
Et tu, Ralph?
Democrats aren't the only ones trying to end the impeachment effort, it seems. In its latest edition, on newsstands today, Time magazine reports that former Christian Coalition Executive Director Ralph Reed wants to let President Clinton off the hook. According to Time, Mr. Reed "sent a memo to House Speaker-in- waiting Bob Livingston and other Republican leaders that urged them, as part of a program for GOP renewal, to drop impeachment in favor of a bipartisan resolution of censure." Time also said three Republicans on the House Judiciary Committee -- including California Reps. James E. Rogan and Mary Bono, and Rep. Lindsey Graham of South Carolina -- might vote with Democrats against impeachment.
from TPDL 1998-Nov-1:
Prepared Text of L.D. Brown Speech at "March for Justice" in D.C.
October 31, 1998
I am a former Arkansas State Trooper and Clinton bodyguard whose name has rarely surfaced. That's because my close friendship with Bill Clinton caused me such grief I've struggled to stay in the background all these years. I wanted to put the memories of all the abuses of power I'd witnessed behind me; to make a new life for my family.
So why speak now? Just when I've got a Ph.D. and am thinking of moving my family out of this country to Scotland? Yes, that's how much I want to put memories of Clinton behind me. Why speak now, indeed. Because for this moment my family and I still live in Little Rock. We are already outcasts in our own home town just because I once dared stand up and say the emperor has no clothes - he can't even keep them on. Because I promise you after what I'm about to tell you, my family's treatment in Little Rock is going to plunge from bad to worse than you can imagine.
So why make myself a marked man? Because I started lying awake last week, asking myself `what will I say when my children one day ask, "But daddy you knew so much, you could have spoken out why didn't you?"' So it has come to this moment, on this Halloween day, to reveal skeletons - just a few, we only have hours here! And I will not be telling you about abuses of power I've read about, but about crimes I've witnessed with my own two eyes.
You see I wasn't just Bill's bodyguard, I was his close friend, and he mine. My future wife was Chelsea Clinton's nanny and a frequent babysitter for Vince and Lisa Foster. I see now that Bill and my close friendship was probably pre-destined. We were constantly together, we both came from similar traumatic childhoods, and we both tried to womanize away that pain and confusion. But if it were just about sex, I would not be risking my family's welfare to speak up now. I step forward because I was an eyewitness to the far darker path Bill turned down. It is a path so dark, so twisted that it is almost impossible for the average American to comprehend. The full horror of Bill Clinton's assault on truth and justice staggers the imagination. There is no precedent, no point of reference for understanding the corruption of this man. That's why we are now a nation paralyzed by disbelief. Indeed if I had not witnessed his crimes with my own eyes I could not fathom their magnitude either. But now is the moment we must find the steeliness to confront the terrible truth.
America has allowed itself to be duped into placing a dangerously sick and immoral boy/man in the most powerful position in the free world. He is pitiable, yes. But he is also the sad case with his finger on the button. He is the shadow figure with dirty hands choking the future of our children, our country - indeed life as we know it. Because make no mistake -- there is no tooth fairy, we may be on the brink of a world meltdown, this may be our last chance to save ourselves. That is why I will now publicly go on the record with what I can. There is more I can say in time when current investigations I am involved in go public. For now let me make clear that I do not know how Bill Clinton's White House Counsel Vince Foster died. But I do know, for a fact, that both investigations, Robert Fiske's and Kenneth Starr's, were cover-ups. As a law enforcement agent for over 24 years, I will tell you that there has been no investigation capable of ruling Foster's death a suicide in Fort Marcy Park. Because there has been no investigation built around the most relevant fact about Vince Foster: the fact that he and Hillary Clinton were in the middle of a long torrid affair. I ought to know, I was there, I saw it. And Hillary and I talked about it often during late-night chats in the Governor's mansion. This affair started in Little Rock and drew Vince Foster to Washington - and to his death. Without putting the affair between these two people at its center, without interviewing Hillary, any investigation into the death of Vince Foster will be totally compromised. I speak of this now NOT to speak of sex, but to speak of the Clintons' frightening influence over the Park Police and the FBI. Since when in America do we not fully and impartially investigate the death of a citizen? Any citizen. But surely there should be no whisper of compromise when it is the investigation into one of the highest-ranking government officials in history to meet a violent end while in office.
I gaze now on the White House and think of Vince walking its halls. And that leads me to a memory from the days when Bill was governor. Hillary and Chelsea and my wife and I were up in Washington together and driving in a cab past the White House. Little Chelsea, upon seeing this big white house, began begging her mother and nanny - my wife - to take her on a tour. The supposedly sweet, motherly Hillary launched into her usual sharp scolding of her daughter. Chelsea was quiet and Hillary looked out the window at the White House, then home to President Ronald and Nancy Reagan and told her child "Chelsea, I'll take you on a White House tour when someone decent lives there!" Boy, I wonder how many people are telling their children that same thing as they drive past the White House today. When I first worked for the Clintons I naively saw myself as a sort of patriot in my own small way, helping Bill to do great things for my beloved Arkansas. It wasn't all the procurement of girls I was obliged to do for him that brought on my moment of truth. It was finally the combined weight all those moments I witnessed him sell his soul in a heartbeat. Take just one time when he gave a law enforcement position to a man who everyone knew would be a disaster. I confronted him and asked, "Why, Bill?" He said "L.D. I know you're right, but he's contributing $5,000, and that's a lot of money right now. Sometimes we need to do bad things for the greater good." So it doesn't surprise me to hear the Clinton administration has allowed nuclear targeting technology to be given to Communist China in return for contributions to the Democratic Party. Bill Clinton has no principles. Everything he does is geared toward winning. In his mind it's all about how Bill Clinton must win -- whatever the cost to the country and the world.
Of Bill, of Hillary, of the whole stinking sordid Billorygate, I say this: Betray us once and shame on you. Betray us twice and shame on us. Betray us three times, four times, five times, as you have, and I say, Lord, what is the matter with us? Please rouse us from our denial. This is the darkest of hours for our country and our constitution. I pray that we survive this most corrupt presidency in history. I pray that this country finds a way to go on. I pray that there is a tomorrow in which the history books will record this as the crisis that rocked us to our foundations. But as the crisis from which we learned, once and for all: Character Does Count - I end with a personal plea to me former buddy. Bill: The Truth Shall Set You Free.
from PDL 1999-Mar-26, from Capital Hill Blue, by Doug Thompson:
McDougal protecting her former lover
Whitewater figure Susan McDougal is a former lover of Bill Clinton and is protecting him out of love, say two people who knew her in Arkansas.
"She's was head over heels in love with him while they were having an affair," says a former employee of Madison Guaranty, the failed Savings & Loan that McDougal and her husband owned. "She still is. That's why she's protecting him."
Jim McDougal, Susan's husband who died in prison, also told 60 Minutes before his death that his wife had been Clinton's lover.
"She was more than just another of the governor's one-night stands," said the former S&L employee, who asked not to be identified. "It was an ongoing thing. She bragged about it. Everybody who worked at Madison knew about it"
The employee's story was corroborated by Arlene Reese, a bookkeeper who did some work for McDougal's husband.
"Jim McDougal knew about the affair and it was tearing him apart," said the former Miss Reese, who has since married and left Arkansas. "He was caught between a rock and a hard place. Clinton was supposed to be his friend and he was sleeping with his wife."
Mrs. McDougal has steadfastly refused to talk to Independent Counsel Kenneth Starr's prosecutors, saying they are trying to get her to lie about a loan her S&L made to Clinton. She was jailed for contempt before a judge ordered a release for "medical reasons."
But those who knew Mrs. McDougal in Arkansas say her protection of the President is driven by love, not fear of the Whitewater prosecutors.
"She was a star-struck woman sleeping with the most powerful man in Arkansas," says the former Miss Reese. "Now she's a star-
struck woman protecting the most powerful man in the the country. That's pretty heady stuff don't you think?"
Calls for comment to Mrs. McDougal's attorneys and the White House were not returned Thursday.
from PDL 1999-Apr-1, from the Arkansas Democrat-Gazette, by Erica Warner:
Friend affirms McDougal's portrait of relentless prosecution
One of Susan McDougal's closest friends, testifying in Little Rock federal court Wednesday, essentially corroborated McDougal's picture of the past and critiqued the manners of independent counsel Kenneth Starr's investigators.
Claudia Riley's portrait of McDougal as "the epitome of all that is good and noble" was followed by less glowing words from two handwriting experts who testified for Starr's side. They said McDougal almost certainly tried to disguise her handwriting when asked to give samples four years ago.
Meanwhile, behind the scenes, Starr's deputies were thwarted in a last-ditch effort to keep Julie Hiatt Steele from taking the stand Friday for McDougal, who is in the fourth week of trial on charges of criminal contempt of court and obstruction of justice.
Prosecutors filed a sealed motion around noon asking U.S. District Judge George Howard Jr. to reconsider the decision he made Tuesday to admit Steele's testimony, but Howard rejected their argument in a bench conference at the end of the day.
Steele is set for trial May 3 in Virginia on charges that she made a false statement and obstructed justice. She testified Tuesday outside the jury's presence that she will say Starr's team got her indicted even though she told the truth. That's the same scenario McDougal says she foresaw for herself if she testified truthfully before a grand jury investigating President Clinton and Hillary Rodham Clinton.
McDougal is on trial because she didn't testify when she went before the grand jury in Little Rock in September 1996 and April 1998. She says she wouldn't talk because she knew Starr's office would charge her with perjury unless her answers incriminated the Clintons. Starr's prosecutors say she had to cooperate with the grand jury because a federal judge had given her immunity and told her to.
Riley, the widow of former Lt. Gov. Bob Riley, testified that she was present for a summer 1996 telephone conference of Susan McDougal, her attorney and some of Starr's prosecutors.
Corroborating the account of the phone call that McDougal gave under oath, Riley said she heard Starr's prosecutors say, "We know what this investigation is about, we know who it's about and we want something from her."
McDougal's contention has been that after her May 1996 convictions on four felonies, Starr's team offered to keep her out of jail and do her other favors in exchange for information about the Clintons. Riley also said she heard prosecutors offer to "get [McDougal] out of" legal problems.
Riley was a close friend as well to Susan McDougal's ex-husband, James McDougal, who died in prison a year ago.
In the last years of his life, James McDougal was manic-depressive and physically ill. When he showed up on Riley's doorstep one day holding a cat and a PigglyWiggly bag with his shaving supplies, she let him stay, Riley said.
Riley failed to back up Susan McDougal on one point. Susan McDougal testified that after James McDougal, too, was convicted of multiple felonies in 1996 and decided to cooperate with the the independent counsel, he sometimes practiced aloud the lies he would tell Starr's investigators.
James McDougal was living on Riley's property at the time, but under cross-examination, Riley said she couldn't recall hearing him rehearse lies. However, Riley noted that James McDougal was so far gone at that point that she didn't attach much significance to anything he said.
"Jim weaved lots of webs," Riley said.
Riley also said that neither James nor Susan McDougal ever told her that he wanted his ex-wife to tell Starr's prosecutors she'd had an affair with the president.
Susan McDougal testified last week that James McDougal told her that Starr's top Little Rock deputy, W. Hickman Ewing Jr., thought he could get Clinton on a "sex charge." Ewing has denied that. Tuesday outside court McDougal denied, as she has in the past, having an affair with Clinton.
Backing up McDougal's allegations about the mean-spiritedness of Starr's investigators, Riley, 71, testified Wednesday that FBI agents working for Starr came to her house in Arkadelphia "with some degree of frequency" to question her.
"There were times it was pretty intense and rather frightening to me," she said.
Riley told of one incident where agents -- whom she said she sometimes invited in for coffee -- grew furious when she denied burning documents in her fireplace.
Susan McDougal has depicted her husband's decision to cooperate with Starr's office as the act of a broken, desperate man who craved approval and attention.
Riley described overhearing an irrational James McDougal wildly haranguing his ex-wife and demand she also cooperate with Starr.
Susan McDougal ultimately spent 31/2 months in prison for those felonies on top of 18 months behind bars for the first time she refused to answer questions before a grand jury. If convicted, she faces an undetermined prison sentence and a fine.
It was in June 1995, before she stood trial the first time, that Susan McDougal went to FBI headquarters in Little Rock to provide handwriting samples to Starr's office. According to two experts who testified Wednesday and during her 1996 trial, McDougal almost certainly tried to disguise her handwriting during that two- hour session.
Gregaros tried to get William Heilman, an FBI expert who was at McDougal's side when she gave the samples, to admit he couldn't know for sure if McDougal was faking.
"We're certainly not talking beyond a reasonable doubt," Geragos said.
"Close," Heilman answered.
from PDL 1999-Mar-26, from the Arkansas Democrat-Gazette, by Erica Werner:
McDougal tale different now, prosecutor says
Five days before she first refused to answer questions in front of a Whitewater grand jury, Susan McDougal told a story prosecutors say casts doubt on testimony she gave in Little Rock federal court this week.
Prosecutors wanted jurors to spend Thursday afternoon watching a videotaped interview from August 1996 of McDougal telling that story. The PrimeTime Live interview -- complete with outtakes -- puts into question McDougal's testimony this week about her frame of mind about testifying then, said W. Hickman Ewing Jr., independent counsel Kenneth Starr's chief Little Rock deputy.
But prosecutors couldn't get the videocassette recorder to work Thursday.
Court recessed shortly after lunch until Monday, to the evident pleasure of some jurors.
They will watch the tape then, and Ewing said in a telephone interview that he hopes it will correct "misimpressions" that he thinks McDougal created with testimony she gave on Tuesday and Wednesday.
The 44-year-old Camden native just finished week three of her criminal contempt and obstruction of justice trial. She's in court because she refused in September 1996 and again in April 1998 to testify before a grand jury investigating President Clinton and Hillary Rodham Clinton, partners with her and her late ex-husband in the failed Marion County land development called Whitewater.
Starr's prosecutors say McDougal had to answer the grand jury questions because a federal judge gave her immunity and ordered her to cooperate.
McDougal has long said publicly, and testified Wednesday, that she believed Starr's prosecutors were out to get the Clintons and would charge her with perjury if she didn't say what they wanted to hear.
McDougal knows of no wrongdoing by the Clintons, she testified. And though prosecutors held out a tantalizing deal in the late summer of 1996 -- including no jail time for her four felony fraud convictions -- after much soul-searching she realized she could not play their game, McDougal said.
But what McDougal says now that she felt then and how she described her feelings at the time are two different things, Ewing said Thursday.
"From her testimony [Wednesday], she said here's the various reasons why I refused to answer their questions on Sept. 4, and goes into some of them," Ewing said. "Well, some of the reasons she stated in her direct examination, some of those are not articulated Aug. 30.
"So it gives one pause to wonder if some of the reasons she articulated on the stand now were actually in her mind at that time, or whether they have been created after the fact."
Ewing would not give details about what's on the tape.
McDougal's lawyer, Mark Geragos, said he doesn't think the prosecution will get much mileage out of playing the interview.
"I guess that's what they think. I, on the other hand, happen to think that she states her case pretty persuasively," he said.
The few minutes of tape the jury saw before the technical failure contained an outtake where McDougal, shoulders and neckline exposed by a white tank top, responds to a question about the most important message she wants to impart to viewers.
"That I hate the independent counsel and want them dead and their children dead," she says, obviously flippant.
The real-life McDougal sat watching, seemingly impassive, as her younger self made the remark. Geragos said later that the remark appears to be out of context and that McDougal will explain it.
On portions of the tape not yet shown, McDougal refuses to respond when ABC's Diane Sawyer asks her whether Clinton knew about the illegal $300,000 loan that resulted in her 1996 fraud convictions. And she's shown deflecting a question about whether she had an affair with Clinton by saying something to the effect that it's too personal to discuss, Geragos said.
When McDougal gave the interview, she hadn't decided whether to testify before the grand jury, Geragos said.
She didn't testify, and one of the questions she refused to answer in the September 1996 appearance was about whether Clinton knew about the loan. She finally answered the question Tuesday, saying she "never" discussed the loan with the president.
How the alleged affair will play out in the trial remains an open question.
McDougal's ex-husband James, who died in prison last year, claimed in the last years of his life that Susan McDougal had an affair with Clinton. In the past, Susan McDougal has denied any affair, but she did not repeat the denial Wednesday. She was not asked about the issue on the stand, and she ignored a reporter's shouted question outside court.
The issue came up because Susan McDougal testified that James McDougal wanted her to tell Starr's prosecutors she was having an affair with Clinton. James McDougal began cooperating with Starr's team after his conviction in 1996 on multiple felonies.
Susan McDougal served 31/2 months of her two-year sentence from that trial. She was freed early by U.S. District Judge George Howard Jr., the same judge presiding over this trial. She also served 18 months in prison for civil contempt of court after the 1996 grand jury appearance.
Ewing would not comment Thursday on whether prosecutors plan to broach the topic of the alleged affair. But he said, "That's not the purpose of playing this. That wasn't asked by us, that was asked by Diane Sawyer."
Geragos said Thursday that he expects McDougal to address the affair question before the trial ends.
"My prediction is that someone named Mark will ask that question," he said. Geragos' first name is Mark, and the associate independent counsel leading the prosecution is Mark Barrett.
During lunch, Geragos accused prosecutors of trying to make the trial about sex because they realized testimony about business deals was "a lead balloon."
Indeed, jurors did not scribble furiously Wednesday afternoon and Thursday morning, as Barrett walked McDougal through a report that accountants prepared in 1986 about the fraudulent land deals at the heart of the Whitewater investigation.
Repeatedly, McDougal said "I don't recall" and "I don't remember" as she gazed at a fuzzy copy of the 13-year-old report on an overhead projector. She stuck to the story she gave during her testimony earlier in the week, when she presented herself as a financial numbskull who just went along with James McDougal's decisions.
"I wasn't someone who studied business ... but certainly I agreed with Jim," she said.
Ewing said the detailed information about land transactions was necessary to show Susan McDougal had more information to give than she claimed, and thus that she obstructed the government's investigation by not answering questions.
"That's more like normal trials than the juicier parts," he noted to reporters questioning him about the possibility of bored jurors.
The rhythm of Thursday morning's testimony was broken at one point when a slight, tattered man stood up from the spectator section of the courtroom and walked right through the gate dividing it from the area restricted to trial personnel.
As the court marshal stood up in alarm, the man walked up to the defense table and handed two worn business cards to Geragos, apparently to give to McDougal. The marshal escorted the interloper from the courtroom.
The business cards identified him as Jim Mathis, with C&D Welding -- "We fix flats" -- in England in Lonoke County. On the back of the cards the man had written: "Hey good to see you. I got to go. Thank for the birthday card. I'm out and got my welding shop back. Please call anytime."
McDougal said she'd never seen the man before.
from PDL 1999-Mar-28, from the Arkansas Democrat-Gazette, by Michael Leahy:
PERSPECTIVE: A trial short on purpose, but heavy on theatrics
As a piece of symbolism, no place could be more fitting for Susan McDougal's criminal contempt and obstruction of justice trial than the Little Rock courtroom of United States District George Howard Jr., a tiny, spartan, overly warm, low-ceiling chamber that, with its scant seating and modest lawyer tables right out of Office Furniture Inc., is so devoid of an august air that it reminds one of an imitation courtroom--something suited, say, for the Moot Court competition of the local law school.
It is the perfect mock setting for what feels like, in McDougal's case, the perfect mock exercise. Nearly everyone present at this trial senses the real outcome here, regardless of the verdict. Nothing meaningful will be learned from the evasive defendant. Little else will happen to McDougal. The Clintons will be, in any event, unaffected. The questioning of McDougal is going nowhere. It will be going nowhere for a few more days. There are now empty seats in the rear of the courtroom. To be here is to feel consigned to bad dinner theater. Yawns are infectious. National reporters sardonically joke about wishing for the Kosovo beat. "Pointless" seems to understate what is going on here.
That is not to say that there seems to be any doubt of Susan McDougal's guilt on the charges against her. On two separate occasions, she was asked questions before a federal grand jury under a grant of immunity, and on both occasions she refused to answer ("Take me to jail," she theatrically muttered once), in defiance of her obligation under the law, as made unmistakably clear to her by a judge who ordered her to cooperate and whom she ignored.
There is no getting around that defiance. Grand juries exist to uncover evidence relevant to criminal prosecutions and, if a witness finds himself or herself with immunity, he or she has an obligation to testify truthfully: the justice system hinges on it. Imagine how few prosecutions could be mounted against mob bosses and crooked politicians if not for testimony provided by quivering minnows who, bitter toward prosecutors but given immunity, have no choice but to testify truthfully to grand juries-- or face contempt charges and be imprisoned indefinitely.
McDougal contends that she did not answer questions before the grand juries because Ken Starr and his associates were out to hit her with a perjury rap if she did not implicate Bill Clinton of wrongdoing in Whitewater. But there is nothing either new or legitimate in that defense. Mob figures, insider traders, crooked politicians taking bribes and kickbacks: they routinely protest against "overzealous" prosecutors and "out-of-control" grand juries "bent" on getting "higher-ups." Never has such a claim relieved anyone of a duty to testify before the grand jury if immunized. As clumsy and heavy-handed as Ken Starr and his pitbulls may be, McDougal had a duty to honor her legal obligation not to Starr but to a United States grand jury. She refused, stubbornly. It is why she finds herself in this drab little courtroom.
But few observers expect that anything severe will happen to McDougal, even if the jury finds her guilty. The speculation is that Howard--who has a well-deserved reputation for Solomonic leniency (remember that he allowed the ailing felon Jim Guy Tucker to walk without serving a minute and cut McDougal loose for health reasons after she served only 31/2 months of her two- year prison term ollowing her 1996 Whitewater conviction on bank fraud charges)--will take into account the 18 months she served on the civil contempt charges (he freed her from that stint as well, reasoning she wasn't about to testify against her will) and wisely say, What's the point? She did her time.
So this all has the feeling of a show trial, heavy on theatrics, short on purpose. Where can the prosecutors next go with Whitewater or anything else? The grand jury meant to investigate the Clintons and other Whitewater figures has been disbanded. And, even on the remotest chance that Susan McDougal were to reverse course and figuratively roll over on Bill Clinton, could anyone at this point believe her?
All that's clear is this: Things feel tired in the little room. McDougal herself increasingly looks less like a "victim" or "opportunist" (the popular press words used to describe the choice of portraits) than merely a petulant woman who, in her smirks at the prosecutors and her rolled eyes and murmured asides ("scared," she mumbled contemptuously under her breath of one prosecution witness), appears young despite her 44 years, unflatteringly so, as if bitten by a case of arrested adolescence.
She always has been cast as young and full of sex and vigor--the one who, in the TV commercials for the McDougal's real estate ventures, played the beauty on the horse riding through the idyll that could be yours with a down payment. She always looks young--too many smirks, too many sighs and closed eyes, too many tears, too much half-hearted apologies for her outbursts ("I'm sorry for the speeches, your Honor, but I've waited so long to get here"), to be followed too soon by another speech in disobedience of Howard's orders and still another apology. A vanity seeps through her revolts sometimes, never more so than on Wednesday when, in the midst of another of her long tirades against Ken Starr and "lying" witnesses, she was asked by a dour argumentative prosecutor Mark Barrett if she was claiming that she had been "railroaded" in her conviction on the fraud charges.
Isn't it true, asked Barrett, that she had been convicted not by Starr but by a jury of 12 people?
It seemed a banal but simple enough question, one which required McDougal only to say yes to the obvious and move on at no real loss. But the question seemed to enrage her, at which point she became utterly defiant--one could imagine the very same posture before the grand jury--at which point she made everything a contest of wills; she would say only what she wished to say; nevermind that the law compelled her to answer. She smirked at Barrett. "I know what you want to me to say, but I won't," she began.
She looked less like a criminal than a 44-year-old brat.
Three of the jurors noticeably leaned forward in their seats, including an elderly man who had spent most of the day with his head cocked and had spent much of the day blinking hard.
Turning to Judge Howard, McDougal declared, "Your honor, I don't think I can answer that with a yes or no. I think that's why I'm here today."
Howard looked alternately puzzled and livid. "Mrs. McDougal, I'm not about to let anybody manipulate this system. I . . . ."
She dared to cut him off.
He raised a finger toward her. "Let me finish," he snapped, thoroughly exasperated now, and ordered her to answer Barrett's question.
She came halfway: "The simple answer to that question is yes."
A junior pitbull, Barrett wouldn't let go. "And it is the true answer, isn't it?"
"It is not the whole truth. . .," McDougal fumed.
It was that kind of day; it's been that kind of trial--illustrative of little but McDougal's childlike contumacy; nothing that will much further our understanding of Whitewater or the McDougals but that, in its potential for the lurid nugged, might fill our notebooks for another few days. It is a vulgar little epilogue.
from PDL 1999-Mar-24, from NewsMax:
Is Whitewater Sex Behind Susan's Silence?
Newsweek's Michael Isikoff reports a juicy little tidbit that should be of interest to those following Susan McDougal's current criminal contempt trial, according to the advance word on his upcoming book, "Uncovering Clinton: A Reporter's Story".
It seems St. Susan's persistent silence before Ken Starr's grand jury had to do with sex, at least in part. She feared that Whitewater prosecutors would question her about her suspected liaison with then-Governor Clinton; one that would have coincided with his alleged efforts to steer an illegal SBA loan her way.
Before McDougal's Sept. 1996 grand jury appearance, legal gadfly Alan Dershowitz reportedly advised that she'd have to answer the sex question if prosecutors posed it.
This January, onetime White House campaign-guru Dick Morris told FOX News Channel's "Hannity & Colmes" that Clinton himself was worried that the Whitewater-sex connection would be exposed. Morris revealed that the President asked him how he should respond if prosecutors raised the issue during his April 1996 Whitewater trial testimony.
When ABC's Diane Sawyer first asked McDougal about the allegation just days before her grand jury testimony, she didn't exactly deny it:
"That is such a personal question and I really don't think I want to talk about things like that. It's too personal for me right now. It's so hurtful to so many people and it's just not a question I want to answer." ("Prime Time Live" - Sept. 4, 1996)
McDougal's response wound up on ABC's cutting room floor but Starr subpoenaed the outtakes of the Sawyer interview.
Earlier this week, Susan's lawyer Mark Geragos seemed not to remember his client's non-denial of the affair, telling "Rivera Live" guest host Marcia Clark that Isikoff had made the whole thing up:
"This is nothing more than fanciful imaginings by Isikoff perfectly timed and released -- or leaked, if you will -- in time for Susan's testimony tomorrow ... (Why would anyone) do 18 months in jail =91cause you don't want to answer whether or not you had an affair?"
That seems like a logical question now, after America's senses have been dulled by a torrent of revelations about Clinton with Monica, Kathleen and Juanita. But 1996 was a presidential election year; a time when a still naive public disbelieved Paula and thought there were no other Gennifers in Clinton's closet.
Three weeks after Susan stiffed Starr's grand jury, Clinton told PBS's Jim Lerher that he would not rule out pardoning her. How would that have looked if Susan had just fingered Clinton as her onetime lover?
from PDL 1999-Mar-17, from the Arkansas Democrat-Gazette, by Erica Werner:
Jurors hear taped replies by first lady
In videotaped testimony played in public Tuesday for the first time, Hillary Rodham Clinton responded to some of the same questions that Susan McDougal is on trial for ducking.
But most of the time the first lady's answer was some variation of "I don't know."
Jurors in McDougal's Little Rock trial on federal charges of criminal contempt and obstruction of justice watched Hillary Clinton say 10 times in 35 minutes that she couldn't answer questions put to her.
She was asked if she knew anything about a 1983 check McDougal signed and marked "Payoff Clinton" in a question put by independent counsel Kenneth Starr's chief Little Rock deputy, W. Hickman Ewing Jr., who led the questioning last April 25.
"No, I do not, Mr. Ewing," responded the first lady, shown testifying in the same White House room where President Clinton gave grand jury testimony about Monica Lewinsky, which was broadcast nationwide in September. "I've never seen these documents before and I have no information about them."
Did she know why McDougal wrote "Payoff Clinton"?
"I have no information whatsoever," said Hillary Clinton, who wore a yellow suit and a twist of pearls and appeared calm, if on occasion slightly exasperated.
But though she hardly enlightened Starr's prosecutors, the first lady replied politely to every question during the segments of the deposition shown Tuesday. She therefore provided a telling counterexample to McDougal's willful obstinacy, Ewing said during the lunch break.
"I don't know what Mrs. McDougal would say. She might say she doesn't know. But the fact is the grand jury has the right to ask," Ewing said.
Later, asked if he would have been satisfied to get the same kinds of answers from McDougal that Hillary Clinton gave, Ewing emphasized the point.
"The grand jury was entitled to her testimony," he said. "Some people have knowledge about certain things and some people don't."
McDougal is midway through the second week of her trial before U.S. District Judge George Howard Jr. over refusing in September 1996 and April 1998 to answer questions about the Clintons before a Whitewater grand jury in Little Rock.
The Camden native and one-time Clinton business partner contends she wouldn't answer because Starr's prosecutors were out to get Clinton and wanted her to play along -- even if it meant perjury. The prosecution's position is that McDougal was granted immunity, was ordered by a federal judge to cooperate and therefore had to testify.
Associate independent counsels Mark Barrett and Julie Myers hope to rest their case as early as today. They've called six witnesses and plan to question four or five more today.
McDougal's lawyer, Mark Geragos, has not said whom he plans to put on the stand other than McDougal. He said Tuesday that he anticipates about five "substantial" witnesses, and said McDougal probably won't take the stand until next week. Court will not be in session Friday.
McDougal's refused to answer questions last April 23, two days before Hillary Clinton gave the five-hour deposition and six days before the grand jury watched it. The grand jury indicted McDougal just days later.
Geragos said during the lunch break that the tape "enhances" his client's case because it demonstrates that Starr's prosecutors are "stalking" the Clintons.
"You can see from this desperate attempt to ask incomprehensible questions of the first lady, that there's nothing there at all," Geragos said. "This whole investigation is for naught."
He noted that Hillary Clinton wasn't asked to address all of the issues that FBI special agent Michael T. Patkus, who spent years detailed to the Office of the Independent Counsel, had testified he'd like to discuss with McDougal.
During testimony last week, Patkus said the illegal loan that led to McDougal's 1996 fraud convictions and the "Payoff Clinton" check for $5,081.82 ultimately helped retire a $27,600 loan in Bill Clinton's name.
Cross-examining Patkus last Thursday, Geragos wanted to know why he was singling out McDougal to answer questions never posed to Hillary Clinton.
The prosecution said they played the tape Tuesday to clear up the misimpression Patkus' testimony left.
The tape shows Hillary Clinton getting questions on issues McDougal dodged and failing to shed much light on them. Besides the "Payoff Clinton" check, both McDougal and the first lady were quizzed about notes a 1992 campaign staff member took about Hillary Clinton's work as an attorney representing Madison Guaranty Savings and Loan.
The first lady did provide some description of her and the president's business partnership with McDougal and her late ex- husband, James McDougal, during the 1980s in the failed land venture called Whitewater. The McDougals had owned Madison.
Asked whether she and the president were social friends with the McDougals, Hillary Clinton said, "No, we were not."
Cross-examining Patkus after the tape was played, Geragos brought out that the session with Hillary Clinton did not address every issue Patkus would've liked to explore with her.
The questioning at the White House was the sixth time since June 1994 that Hillary Clinton was questioned by prosecutors in the wide-ranging Whitewater investigation.
Tuesday afternoon, jurors heard from Henry O. Floyd, the former Madison Guaranty Savings and Loan employee who was transporting old company records in the trunk of his '79 Mercury Marquis when he abandoned it at a transmission shop after a fee dispute.
The records -- including a $27,600 cashier's check made out to Bill Clinton -- came to light after tornadoes ripped the car's trunk open in 1997. Clinton has denied knowledge of the check.
Floyd testified about his courier work for Madison and how he came to abandon his car. His testimony led indirectly to a courtroom spat. When he was asked why he sought an assurance of immunity before his appearance Tuesday, McDougal was heard to murmur "scared."
"She is communicating with this jury without being under oath and subject to cross-examination," Barrett complained to Howard later, without the jury present. Pointing at McDougal, he added, "And I would ask that she would stop making faces showing disrespect, not just to me but to the court."
Barrett sat down, and Geragos stood up.
Barrett, he said, was "in my face as if..."
Barrett interrupted, "I object. I was not in his face."
Geragos went on to observe that emotions were running high and that he can tell when Barrett's angry because "he turns red and gets that look on his face."
Howard settled the matter by telling everyone involved to behave.
from PDL 1999-Mar-21, from the Arkansas Democrat-Gazette, by Michael Leahy:
PERSPECTIVE: Hillary live: Pets she knows all about
Facing lagging sales, the celebrity author of Dear Socks, Dear Buddy went out to hawk her pet book on Tuesday night, venturing into cyberspace for what was billed as a "live, on-line chat with Hillary Clinton."
As an adjective, "live" never has captured the remoteness one feels in a "chat" with Mrs. Clinton. She chats; her audience merely listens--sprinkled around her like lush flora. Her speeches and appearances at events and fundraisers come with strict rules and restraints: no audience questions about politics or public policy; no questions about administration ethics; no questions about her husband; no questions about the future; she does not do "questions."
You are there simply to observe. There is little sense of shared space; there is no interchange. She is there but not there somehow, sitting up higher than all others and, by her body language, exquisitely removed, as if there exists an invisible pane of glass between the two of you, the better to protect her from plebes. It matters not at all that she may have stepped out of the White House Map Room and into the "public": she is always in that cloister.
Whether smiling radiantly on a New York City dais or in front of an America Online computer terminal at the White House, she has simply moved from one gilded hermitage to another; never so much conversing as passing down her "remarks," like papal encyclicals distributed to the acolytes. The other night merely served to remind us: The juxtaposition of what she will talk about, and what she won't, has an amusingly surreal quality, calling to mind Hollywood actors who won't speak about their films or scandals but only their love for their pet parakeets and horses.
So it was that during the same week when prosecutors in the Susan McDougal criminal contempt trial played a tape of Mrs. Clinton repeatedly saying from the Map Room that she could not remember details of her conversations with McDougal during the Whitewater land dealings, or explain why McDougal in the midst of her Whitewater messes would write "Payoff Clinton" on a $5,081 check made out to Bill Clinton, Hillary Clinton had nothing to add about investigations but much to share on-line about her detailed recollections of the moods, passions, habits and hobbies of Socks the First Cat and Buddy the First Dog. No First Lady's remove has ever been so perfected since Imelda Marcos, in the last year of her husband's rule, lectured the Philippine people on the benefits of hair bows.
One logged on to America Online Tuesday night to catch the First Lady's show, such as it was. "Mrs. Clinton has entered the room," the screen breathlessly read at 9 p.m. Central time, the words provided by a typist supplied by the retail book company Barnes and Noble, who took dictation. Millions probably found it comforting to discover that a First Lady's on-line words are just as likely to be transmitted with typographical errors as their own. "This book was inspied (sic) by the thousands of children who began to write to Socks before we moved to the White House," Mrs. Clinton said in the opening minutes. "Proceeds from the book will go to the National Park Fund, [which] helps to raise money to suplament (sic) the public funds that go to the national parks. . . ."
On-line spectators began to comment. "Riveting," said someone from Connecticut.
"I have been impressed with the spontaneous outpouring of affection for Socks and Buddy from admirers all over the world," Mrs. Clinton went on. "Together, Socks and Buddy have received more than 300,000 letters since we moved into the White House. Our pets captivate people of every age. The kids who write to Socks and Buddy want to know all about life in the White House for the First Cat and First Dog. Some fascinating questions that children frequently ask [Socks and Buddy] include: 'How does it feel to have all the food you want? Do you have a Secret Service agent, too? Do you ever annoy the president?' "
"These are the questions in the national discourse that most grip me," said an on-line spectator with the handle HUGGIE3.
The audience came away with intimate details of Mrs. Clinton's family life, including the revelation that, as a child, Chelsea liked to write daily letters about her life with Socks. We learned as well that, glancing out a window from the Clinton family quarters, Mrs. Clinton sometimes sees Buddy riding on a tractor driven by a White House groundskeeper or notices a kind employee bending to pet Socks.
"Wow. This is so interesting about the cat," another spectator commented.
"I heard Buddy spends his time outside on a leash," someone else jumped in.
"Kind of like Bill," responded a participant from New York.
"None of that," a loyalist chastised.
Naturally, the audience had questions, both serious and whimsical, though 99.999 percent of them went ignored, in compliance with Mrs. Clinton's rules. The comments and queries never stopped running down the screen, too fast for the eye to process all of them: "Does Buddy want you to run for the Senate in New York? Why won't you answer questions about anything except pets? Roaming the crannies of the White House during the last year must have been a stunning and traumatic experience for Socks. What is the state of Socks' psyche?"
"LOL (Laugh out loud)," wrote somebody named Hawker.
Blissfully unaware, Mrs. Clinton continued: "There is a fabulous untold story about the retired military men and women at the Soldiers' and Airmen's Home in Washington D.C., who volunteer to answer all the letters for our cat and dog."
She revealed, as she has on occasions before, an extraordinary memory for details. She recalled the letter of the little girl who wrote to say that she thought Socks was a better name than Fluffy or Whiskers, and the sadness of children confessing to having no dog or cat. This was no surprise. She's the same woman, after all, who has lectured for an hour about the nuances of early childhood education and the ornaments at Teddy Roosevelt's White House Christmas parties.
What intrigued one most was the contrast between her flawless memory of her pets' lives and the foggy recollection of her own. On the very day that she sat for Pet Talk, the Whitewater prosecutors had played the tape of her White House deposition, during which she'd said 10 times, "I have no idea" (or, in the alternative, "I have no information whatsoever" or "I do not believe I am familiar with this") when asked about conversations with McDougal or certain details of the Whitewater loan or what the inscription "Payoff Clinton" may or may not have meant.
For the time being, she doesn't answer these or any other questions, even the most benign. She is impenetrable in her rarefied refuges and cyberspace idylls, and nine points up in the New York Senate polls on Rudy Giuliani, who is plagued this month by a scandal of police brutality in his New York City police department and must now wade into thickets of microphones to take questions, insults, skepticism, ridicule, poundings--the things most politicians endure, like it or not.
Hillary Clinton is running as Ross Perot tried to--by her own rules, above us, beyond us, from the firmament, in a kind of isolated splendor that Howard Hughes would have admired. But, as Perot discovered, every candidate's feet must inevitably come down and touch the ground, which is when one no longer can take refuge in her pets.
from the Associated Press, 1999-Apr-14:
Hubbell Loses Round to Starr
A federal judge gave independent counsel Kenneth W. Starr a pretrial victory yesterday, dismissing a defense challenge to the fraud indictment of presidential friend Webster L. Hubbell. The judge also signaled a likely delay in the June trial date of Hubbell, once an associate attorney general in the Justice Department. The case results from law work Hubbell and his former law partner, Hillary Rodham Clinton, did on an Arkansas land deal. U.S. District Judge James Robertson ruled that the indictment did not result from documents produced by Hubbell under an immunity agreement with Starr.
Starr's office also won a halt to much of the pretrial work while the prosecutors pursue an appeal to the judge's dismissal in March of a count accusing Hubbell of scheming to conceal work done by him and Hillary Clinton on the land deal. Robertson agreed that the allegations were too vague.
from TPDL 1999-Jan-27, from the New York Times, by Neil A. Lewis:
Ruling Allows Starr to Press Case Against Clinton Friend
WASHINGTON -- In a significant victory for Kenneth Starr, a divided Federal appeals panel on Tuesday reinstated a tax fraud case he had brought against Webster Hubbell, a longtime Arkansas friend of President and Mrs. Clinton. The court majority said that a lower-court judge was wrong when he threw out the case on grounds that the independent counsel had overreached, essentially conducting "a fishing expedition."
The 2-1 ruling provides new leverage for Starr to press Hubbell for information damaging to the Clintons, even though he has insisted he has no such information. Starr has asserted in court filings that Hubbell accepted hundreds of thousands of dollars in bogus consulting fees from Clinton's political supporters on which he paid no taxes. Starr contended the payments were "hush money" meant to discourage him from disclosing what he knows about the Clintons' financial dealings in Arkansas.
In upholding Starr's right to bring the tax fraud case, the United States Court of Appeals for the District of Columbia Circuit even affirmed the idea that the fees paid to Hubbell appeared, in fact, to be hush money. "The timing, sources and extent of the payments make the belief that they were hush money reasonable," said the majority opinion written by Judge Stephen F. Williams, an appointee of President Reagan, and joined by Judge Patricia M. Wald, named to the bench by President Carter. Judge David S. Tatel, appointed by President Clinton, dissented from that portion of the ruling.
But the appeals court also raised a possible obstacle to Starr in prosecuting the tax case. In a separate 2-1 ruling with Wald and Tatel in the majority, the panel raised questions about whether Starr may build his tax case on documents he collected from Hubbell under a grant of immunity.
The court said the independent counsel must establish that it did not rely on Hubbell's testimony to obtain the financial documents that are a major part of the case.
Nonetheless, the ruling affords Starr some measure of legitimacy in an area in which he had been widely criticized, that is whether his investigation had improperly strayed far beyond his original mandate of investigating Whitewater, the Arkansas land deal involving the Clintons.
Hubbell's case, in fact, had other repercussions. Some of the fees he received that Starr said amounted to hush money were arranged by Vernon Jordan, a close friend of the president. It was Jordan's help in trying to find a job for Monica Lewinsky that Starr cited in seeking permission to expand his investigation into Clinton's relationship with the former intern.
In dismissing the tax fraud case against Hubbell last July, U.S. District Court Judge James Robertson reflected the criticism that Starr had reached well beyond his mandate, calling the subpoena in the tax fraud prosecution "a quintessential fishing expedition."
But the majority on Tuesday said that it was reasonable to relate the possibility that Hubbell accepted hush money to the original scope of the investigation.
"If payments Hubbell received beginning in 1994 were indeed hush money to secure Hubbell's silence vis-a-vis Whitewater, the possible obstruction of justice therein would certainly be a crime 'relating to' Whitewater for it would be an attempt to cover up wrongdoing afterward," the majority opinion said. The judges then went on to criticize Robertson, saying that the Supreme Court has upheld the constitutionality of the independent counsel law and that "it is not for lower court judges to undercut that decision by constructions of the act that prevent this prosecutor from performing his duty in a manner reasonably approximating that of an ordinary prosecutor."
Hubbell was once the chief justice of the state of Arkansas, a position to which he had been appointed by Clinton when he was that state's governor. Later, Hubbell was the No. 3 official in the Justice Department, but he was forced to resign in 1994 over a messy billing dispute at his Arkansas law firm. The payments in question came after Starr began investigating him.
Tuesday's ruling also means that Hubbell, who has already served a prison sentence on charges brought by the independent counsel, now faces two additional trials on separate charges brought by Starr.
Hubbell spent nearly 17 months in prison after pleading guilty to bilking his partners in the Little Rock, Ark., law firm at which he once worked with Mrs. Clinton. But Starr failed to get from Hubbell what he was really after: incriminating evidence about the Clintons.
Starr then brought the indictment for tax fraud that was reinstated on Tuesday. Last November, Starr brought yet another indictment against Hubbell, charging that he had concealed information about the role he and Mrs. Clinton played in a complicated land transaction in Arkansas that helped lead to the collapse of a savings and loan association.
Hubbell has said that he does not know of wrongdoing on the part of the Clintons and that "nothing the independent counsel can do to me is going to make me lie about that."
The tax fraud indictment that was reinstated on Tuesday accused Hubbell; his wife, Suzanna; and two advisers, Michael Schaufele, an accountant, and Charles C. Owen, a lawyer, of scheming over four years to evade taxes and penalties on more than $850,000 in income.
The indictment also charges that Hubbell made premature withdrawals from an individual retirement account without paying withholding taxes. In all, the indictment alleges that the Hubbells owed nearly $900,000 in taxes to the federal government, the state of Arkansas and the district of Columbia.
Appearing outside his Washington-area home Tuesday afternoon, Hubbell said, "We're innocent, not only myself but my wife and my friends, of any of the underlying charges."
It was unclear how much of an obstacle the second part of Tuesday's ruling would prove for Starr. The appeals court said that to use the financial documents to make his case, Starr must show "reasonably particular knowledge" of their existence before Hubbell turned over more than 13,000 pages under a grant of immunity.
"Should the independent counsel prove unable to meet the requisite evidentiary burden, the contents of those documents will be inadmissible," the court ruled. Charles Bakaly, a spokesman for Starr, said on Tuesday that the office of independent counsel was prepared to demonstrate it was entitled to use the financial documents.
Starr has said he knew about consulting payments Hubbell received from the Riady family of Indonesia and the city of Los Angeles. But the appeals panel said that "these snippets of information do not come close to establishing the existence of the myriad of documents sought through the subpoena."
John W. Nields, Hubbell's lawyer, declined to say Tuesday night whether he would appeal the latest ruling.
from TPDL 1998-Dec-2, from the Wall Street Journal, by Micah Morrison, "a Journal editorial page writer":
Hubbell Indictiment: Back to Whitewater
Arriving in the midst of the sex-and-perjury impeachment hearings last month, Independent Counsel Kenneth Starr's indictment of Webster Hubbell on fraud and coverup charges has been treated as almost an exoneration of the president. The indictment did not name Bill Clinton, the thought runs, so therefore Mr. Starr has "cleared" him.
Once upon a time, though, presidents were considered at least morally responsible for the actions of their appointees. Mr. Hubbell, too, was no ordinary appointee, but the personal emissary Mr. Clinton sent to the Justice Department to see that laws were faithfully executed. Mr. Hubbell has already served time for two felonies, and Mr. Starr's new indictment charges him with 15 more. They include fraud in Arkansas, involving the Rose Law Firm, Madison Guaranty savings-and-loan and the Castle Grande land deal. They also include actions while associate attorney general, including perjury before a congressional committee, and corruptly impeding the work of two federal agencies, the Resolution Trust Corp. and the Federal Deposit Insurance Corp.
Hillary Clinton was intimately involved in these events. While not using her name, the indictment repeatedly mentions her as "the 1985-1986 billing partner" from the Rose Law Firm. In his Judiciary Committee testimony, Mr. Starr revealed that his office had drafted, but decided not to submit, an impeachment referral charging that the president committed perjury during the 1996 trial of Madison owners Jim and Susan McDougal, when he denied knowledge of an illegal $300,000 loan--a portion of which went to benefit the Whitewater Corp., a Clinton-McDougal partnership. But Ms. McDougal stayed silent and the impeachment report foundered. Now the Clintons are again the apparent beneficiaries of a coverup, this one orchestrated by Mr. Hubbell.
Indeed, the charges against Mr. Hubbell echo the charges against Mr. Clinton in the Lewinsky case now before the House Judiciary Committee. In his testimony before the committee on Nov. 19, Mr. Starr suggested that all aspects of his probe be considered as parts of a whole, raising the issue of a broad pattern of abuse of power. "Our task over the past several years has involved far more than simply the Lewinsky matter," Mr. Starr told the committee. "The pattern of obstruction of justice, false statements and misuse of executive authority in the Lewinsky investigation did not occur in a vacuum."
The indictment outlines a long-running pattern of fraud, obstruction and deceit. Mrs. Clinton's Rose Law Firm billing records, under subpoena for nearly two years before suddenly appearing in the White House, play a key role in the charges. The indictment covers a period from 1989 to Dec. 27, 1995--nine days before the White House announcement of the discovery of the billing records.
The indictment notes that "from in or about February 1992 and thereafter, during then-Governor William Jefferson Clinton's campaign for the Presidency," Mr. Hubbell and "other individuals collected and reviewed the Rose records, including billing records." Later, Mr. Hubbell allegedly "concealed from the FDIC and the RTC the information contained in the records."
In January 1994, while associate attorney general, Mr. Hubbell met with FDIC officials at his office in the Department of Justice and allegedly made "false, evasive and misleading statements" concerning Madison and Castle Grande. In February, Mr. Hubbell personally reviewed the FDIC report containing the falsehoods, "did not correct the report, and caused a copy of the report to be forwarded to the White House," the indictment says.
In 1995, the RTC returned with more questions. Mr. Hubbell again allegedly made "false, evasive and misleading statements" and "concealed material information" about his and the "1985- 1986 billing partner's prior legal work." Mr. Hubbell's representations "caused the RTC's August 3, 1995 report to contain incomplete and inaccurate information concerning the true facts" about the Castle Grande affair. A week later, the indictment charges, Mr. Hubbell committed perjury in sworn testimony before the House Banking Committee, when he said he was "not aware of the nature of the matters" that Rose had handled for Madison Guaranty.
Mr. Hubbell's Washington activities, of course, did not occur in a vacuum. Mr. Starr notes that his indictment stemmed from "two separate criminal referrals received from the FDIC Office of Inspector General and the RTC's Office of Inspector General." The RTC probe of Madison was a source of great concern to the White House in late 1993, and lead RTC investigator Jean Lewis was taken off the case. In February 1994, Ms. Lewis's supervisor, April Breslaw, flew to Kansas City to interview Ms. Lewis, telling her that "head people" would like to be able to say that "Whitewater did not cause a loss to Madison." In early 1994, efforts to manage the probe led to the departure of several senior administration figures, including Deputy Treasury Secretary Roger Altman and White House Counsel Bernard Nussbaum. Ms. Lewis was pilloried by Democrats at 1995 congressional hearings for pointing to a "concerted effort to obstruct, hamper and manipulate" the Madison investigation.
Castle Grande was one of the honey pots in the Madison Guaranty banking corruption story. In 1985, Madison Financial--the real- estate arm of the McDougal S&L--bought 1,000 acres south of Little Rock for $1.75 million. Jim McDougal named it Castle Grande. But since Madison had an investment limitation of $600,000, it extended an illegal, insider loan of $1.15 million to one of its employees, Webster Hubbell's father-in-law, Seth Ward.
The indictment charges that to cover their tracks and pay off Mr. Ward for his role as a nominee purchaser in the Castle Grande deal, Madison officials and Rose attorneys arranged a series of bogus "cross loans," concealing the true nature of the transactions from Federal Home Loan Bank Board regulators. In May 1986, Mrs. Clinton drafted an option agreement in the transaction, billing Madison for the work, as well as for meetings with senior Madison officials and Mr. Ward.
The FHLBB was sharply critical of the Castle Grande scheme, which it described as rife with "insider dealing, fictitious sales and land flips" that eventually cost taxpayers about $4 million. The FDIC later reported that the Rose option agreement had been used by Madison "to deceive federal bank examiners." An RTC inquiry determined that Madison's Castle Grande dealings were a "sham transaction."
The indictment also charges that Mr. Hubbell defrauded the RTC and the FDIC by concealing from them the true nature of his relationship with Madison. Mr. Hubbell was the lead attorney when the two agencies , working on behalf of Madison after taking over the failed bank, sued a Little Rock accounting firm, alleging malpractice. If Mr. Hubbell had disclosed the full extent of his relationship with Madison, as required by law, the Rose Firm likely would have lost lucrative government contracts.
Last April, Mr. Starr indicted Mr. Hubbell on tax-evasion charges in connection with the receipt of suspected hush-money funds in 1994--a cascade of cash at a time the Clinton insider was emerging as a key witness in the Madison probe. Mr. Hubbell was paid $550,000 by various friends of the Clintons, including $100,000 from Indonesian businessman James Riady, for what Mr. Starr has described as "little or no work." U.S. District Judge James Robertson threw out the tax case in July, saying Mr. Starr had exceeded his jurisdiction and built the case on improperly obtained evidence; Mr. Starr has appealed the dismissal.
The new indictment is a sign that Mr. Starr believes Mr. Hubbell is central to getting to the truth about the Clintons. It is as well a brilliant stroke of jurisprudence, carving out a single case that promises to tell much of the Whitewater saga, from Little Rock to the White House, in a Washington courtroom.
One of the biggest issues there will be Mr. Clinton's attitude toward Mr. Hubbell. Did the president of the United States send his close friend to the Department of Justice because he did not know Mr. Hubbell was capable of felonies--or because he did know?
from TPDL 1998-Oct-31, from Insight, by Kelly Patricia O'Meara and Jennifer G. Hickey:
Dirty DNC Money
The cooperation of three Teamster felons with federal investigators finally may expose intricacies of Clinton/DNC campaign fund-raising. Look for big trouble. Throughout 1997 and most of 1998, Capitol Hill has suffered a continuing series of rhetorical fistfights between Republicans and Democrats about campaign finance. Republicans slug away at stonewalling by the Democratic National Committee, or DNC, and the Clinton White House, which they claim have obstructed their fund-raising investigations. Democrats and White House operatives counterpunch with allegations that the Republican congressional majority is engaged in unjustified and purely partisan attacks. Neither combatant seems aware of the faint rumble of yet another fund-raising scandal already at ringside. Overlooked in the various probes of the DNC and the Clinton/Gore campaign are records at the Federal Election Commission, or FEC, that show a pattern of behavior among confessed felons associated with the International Brotherhood of Teamsters union that may relate to other money scams already under investigation by the Department of Justice. The first hint of a connection followed confessions to U.S. Attorney Mary Jo White of the Southern District of New York by three consultants to Ron Carey's 1996 campaign for Teamster president. Carey's campaign manager Jere Nash, telemarketer Michael Ansara and campaign consultant Martin Davis all pleaded guilty this year to felonies, including embezzlement, conspiracy and mail fraud. Insight has learned that under court order they recently paid nearly $1 million into a restitution fund to help defray the cost of the new Teamsters election made necessary by the corrupt Carey campaign they helped to run. Based on dozens of interviews and a painstaking search of election documents during many months, Insight has developed a snapshot of this arcane world of campaign financing and, in turn, new clues concerning the fund-raising scandal now under scrutiny by committees of Congress, U.S. attorneys in several jurisdictions, the Justice Department and federal grand juries. The story of the three Teamsters consultants, two of them partners, is one of political idealism, corruption and greed. It is a scenario in which otherwise law-abiding citizens were pushed into criminal enterprises that led to nullification of Carey's election to the top Teamsters job. It also is a story of dark links between one of the country's most powerful labor unions and the inner circles of the DNC and the 1996 Clinton/Gore campaign. The first glimpse into the tangled webs of Teamster- associated deceit now spinning around the various 1996 fund- raising debacles came as a result of the Nov. 17, 1997, decision to disqualify Carey as a candidate in new court-ordered union elections. Court-appointed election officer Kenneth Conboy detailed six illegal-money schemes conceived by Nash, Davis and Ansara that were designed to funnel money back to the Carey campaign. In total, these six schemes improperly raised $538,100 for the Carey campaign. But questions remain. Were the DNC and the Teamsters fund-raising scandals related in ways yet unreported? Equally important, were they unique or part of a broad pattern involving still others? According to federal law-enforcement sources who spoke to Insight on the condition of anonymity, symbiotic schemes such as those engineered by Nash, Ansara and Davis may have been created throughout the 1996 presidential campaign illegally to assist both the Democratic Party and the Carey campaign. Although White has not directly linked the illegal schemes of Nash, Ansara and Davis to the larger Clinton/Gore fund- raising scandals -- including foreign money and the possible compromise of national security -- she is continuing to investigate. Clues abound, and the closeness of the felonious Teamsters consultants and the DNC continues. While awaiting sentencing, Ansara still is raising money for the DNC and providing high- priced advice. According to FEC records his company, the Share Group, received approximately $300,000 from the DNC for consulting services during a three-month period ending Sept. 30, 1998. Asked why the DNC continues to conduct business with Ansara, DNC spokesman Rick Hess says, "We still use the firm because they do good work." Moreover, Hess says of Ansara's involvement in the day-to-day business of the Share Group, "The person [Ansara] who was involved in the Teamsters scandal has no control of the company." But sources familiar with the Share Group tell Insight that Ansara still actively is engaged in the day-to-day operations of the company and this year alone has received about $1 million from the DNC. During the last election cycle, between September 1995 and January 1996, records show $1 million in such consulting fees paid to the Share Group by the DNC. Also, FEC records and documents reveal a cozy relationship between the Share Group and a firm called Mass Envelope Plus, which is owned by Steven Grossman, the general chairman of the DNC. Although FEC records show how much money the Share Group has been paid by the DNC, the public documents do not reflect details of third-party expenditures, such as those made by the Share Group to Grossman's Mass Envelope Plus. Grossman did not respond to Insight's calls seeking details. Beyond Ansara's business dealings, FEC records for the 1996 election cycle also show that the DNC paid about $150,000 to the November Group, a consulting firm co- owned by Davis, another of the confessed felons in the Teamsters scandal, and Hal Malchow, a prominent Democrat. While Malchow's business with Davis reportedly ended with the December 1997 bankruptcy of the November Group, Malchow continues to conduct business with Ansara's Share Group. He has served on the board of the Share Group in the past, but Malchow says he is "unsure" whether he currently serves on that board. Further checking of public records shows other curious relationships. For example, in addition to that $150,000 paid to the November Group by the DNC during the 1996 election cycle, the FEC records disclose several payments totaling $10,000 from the Clinton/Gore reelection committee. It's not the amount that raises questions, but rather how the payments were recorded. FEC documents show that Malchow and Davis' November Group listed its address as Suite 650, 1400 Eye Street N.W., Washington, DC -- the same address listed by three other little- known Democratic consulting firms: Malchow Adams and Hussey, Direct Mail Investors and Predicted Lists. In all, these three companies took in nearly $11 million from the DNC and $2 million from Clinton/Gore during the '96 election cycle. Corporate records show Malchow is listed as an officer of Malchow Adams and Hussey, and he discloses to Insight that he benefits financially from Direct Mail and Predicted Lists. A detailed examination of the FEC records involving Malchow's bankrupt November Group also showed an anomaly involving both the DNC and the Clinton/Gore reelection committee and a wholly different consulting firm called the November 5 Group. This latter firm, which handled most of the Clinton/Gore '96 media buys and advertisements, is owned by Bob Squier, another prominent Democrat and director of the November 5 Group. Although Insight knows of no direct link between Nash, Ansara, Davis and Squier other than Democratic politics, records for the '96 election have raised questions at the FEC concerning what has been dubbed an "accounting error." Specifically, the DNC and Clinton/ Gore '96 paid nearly $58 million to Squier, Knapp, Ochs and the November 5 Group for media buys between June 1995 and October 1996, according to FEC records. These public documents also show that between July and August 1996, more than $8 million of the $58 million was sent to the November 5 Group by Clinton/Gore '96 and the DNC. What's perplexing is that several entries list the November 5 Group at 1400 Eye Street N.W., Washington, DC, which happens to be the address for Malchow's supposedly unrelated November Group. The correct address for Squier's November 5 Group is 511 2nd Street N.E. The DNC entries detail payments intended for Squier's November 5 Group recorded as paid to the address of Malchow's November Group. Asked about this, Malchow, co- owner of the November Group, tells Insight he is unaware of any such Clinton/Gore and DNC accounting error. He confirms he received the correct amounts for work his firm had performed. "I can guarantee you we [the November Group] didn't do $9 million. It was more like $9,000. I would remember if it were $9 million," Malchow says. Insight called the DNC and the Clinton/Gore '96 campaign to determine why monies for Squier's November 5 Group were recorded as sent to the wrong address for several months in a row. Bob Newman, spokesman for the Clinton/Gore reelection committee, and Rick Hess, spokesman for the DNC, both say that the nearly $9 million paid to Squier's November 5 Group "was sent by wire" and, therefore, "what the FEC records show makes no difference." Both Newman and Hess used the same phrase to speculate that the misaddressed payments were "accounting errors." Asked whether the DNC has amended its filings with the FEC concerning the November Group and November 5 Group, Hess says: "We haven't filed an amended report. If the FEC has any questions they can raise them with us. It's an insubstantial mistake." While the official DNC and Clinton/ Gore '96 statements seek to explain away the erroneous reporting, at least one current federal investigator is confounded as to how the DNC and the Clinton/Gore reelection committee could manage to send several million dollars to both the correct and incorrect addresses of unrelated but similarly named companies. While the alleged "accounting errors" committed by the DNC and Clinton/Gore are not evidence of wrongdoing, they prompt scrutiny, say congressional investigators. For instance, did the DNC and Clinton/Gore use the same paymasters or the same accounting group, or even the same official to file the formal FEC filings? This would be odd in that these two groups have no direct business connection. The confusion over such payments led to further checks of public records to determine whether other unusual payments were recorded to these companies during the '96 election. The search uncovered a surprising number of payments not only to Ansara and Davis' companies but also to Squier's media firm. . . . . For example, during the '96 election, Squier was paid at least $58 million by the DNC and Clinton/Gore '96 to produce and place television advertising for the reelection campaign, according to FEC records. In addition to the $58 million, Squier was paid an additional $34 million to produce and place issue ads, bringing his business from Clinton/Gore and the DNC to $92 million. It is the $34 million for the alleged issue ads that has drawn the attention of federal prosecutors. Of particular interest is what Clinton's role may have been in crafting those DNC issue ads. While candidates are to have no role in the editing, producing and/or writing of issue ads paid for by the DNC with so-called "soft money," some have alleged that Clinton was orchestrating the issue-ad campaign, which would make it illegal. In his book Behind the Oval Office, Clinton campaign intimate Dick Morris writes, "The president became the day-to- day operational director of our TV ad campaign. He was as involved as any of his media consultants were. The ads became not the slick creations of admen, but the work of the president himself. Every line of every ad came under his informed, critical and often meddlesome gaze. Every ad was his ad." This allegation is very important. According to FEC regulations, issue-advocacy advertisements are communications designed to promote a set of ideas or public policies. They may not directly advocate the election or defeat of a federal candidate. Yet an example of one of those DNC-sponsored noncandidate ads contains the following phrase: "The president says give every child a chance for college with a tax cut that gives $1,500 a year for two years -- making most community colleges free, all colleges more affordable ... and for adults, a chance to learn, find a better job. The president's tuition tax-cut plan." Even though there's a fine line between directly and indirectly advocating reelection of the Clinton/Gore ticket and issue advocacy, the FEC expressed the view in a preliminary audit that Clinton may have crossed that line into "electioneering," say recent press reports. It was the FEC preliminary audit that served as the basis for the Sept. 8 decision by Attorney General Janet Reno to launch a 90-day investigation into whether an independent counsel should be appointed to investigate presidential fund- raising. The primary focus of the Justice Department's probe is whether Clinton illegally benefited from and/or controlled Democratic issue ads during the 1996 election. Also raising concern about the president's alleged participation in the $34 million DNC issue-ad campaign are documents provided to the Senate Governmental Affairs Committee by Harold Ickes, the president's former deputy chief of staff, which outlined White House control over the DNC. "It was agreed that all matters dealing with allocation and expenditure of monies involving the DNC are subject to the prior approval of the White House," say the Ickes documents. Reno's decision to launch a preliminary investigation into the 1996 DNC issue ads brings the total number of such probes under way at the Justice Department to three. The attorney general also is investigating charges that Vice President Al Gore lied to federal investigators about fund-raising phone calls he made from the White House complex and possible perjury charges against former Clinton adviser Ickes stemming from the aide's 1997 testimony before the Senate Governmental Affairs Committee. As the Justice Department decides whether to appoint three new independent counsels, up in New York U.S. Attorney White is continuing her probe of the Teamsters scandal. She also is preparing for the impending sentencing of Nash, Ansara and Davis. If Insight sources are correct, the probe White is conducting may bump into the much larger Democratic fund- raising scandals already the focus of so much attention. Undoubtedly the reported cooperation of Nash, Ansara and Davis will be a key to doors at the Teamsters and their ties to the DNC, the Clinton/Gore reelection campaign and, more importantly, issue-advocacy groups that play significant roles in the nation's electoral process. Congress thus far has paid little attention to connecting possible illegal schemes at the Teamsters that may overlap with schemes involving the DNC and/or the Clinton-Gore reelection committee, but according to bipartisan sources on Capitol Hill that soon may change. Catalysts for such change will be Reno's decisions, White's probe and coordination between the lead committees in the House now investigating allegations of wrongdoing.
from TPDL 1998-Oct-17, from the New York Observer, by Philip Weiss:
Now for Some Really Dirty Clinton Stuff
Speaking at the New York Institute for the Humanities a couple of years ago, Sidney Blumenthal, who was then still a reporter for The New Yorker, said that Whitewater was a "hoax," and as I was a guest at the luncheon, I called him later to say I wanted to quote the line. He asked me as a courtesy not to, and I agreed (sort of like doctors' courtesy), then we had a friendly discussion about Whitewater. He said I really shouldn't write about the Clinton scandals without reading the Resolution Trust Corporation report that cleared the Clintons, and I told him banking issues bored me and I'd thrown my copy away. He said he'd send me a new one (and did; I didn't read that one, either).
I told Mr. Blumenthal that something I'd seen with my eyes was more important to me than any report. I was at the Senate Whitewater hearings in summer 1995 when the committee was asking Clinton lawyers about the search of Vincent Foster's office following his death. Justice Department investigators wanted to search the office freely, White House lawyers stopped them. Congress had a bunch of records showing calls between the lawyers and Hillary Clinton, but the lawyers testified Hillary had nothing to do with it.
"Sidney," I said. "I don't care about the search of Foster's office. As far as I know, the Administration had a right to rifle his papers before the F.B.I. came. But it was a legitimate question, and I'm telling you, I watched them lie. I sat there for two weeks and I made my own judgment. One after another, they came in and lied, and it shocked me precisely because it was such a trivial matter. I thought, These people will lie about everything."
"Well, I don't know about that," Mr. Blumenthal said.
Many times I've cited this incident to friends as something that seeded doubt in me about an Administration I'd voted for, and the response is always Mr. Blumenthal's. Who knows? And now the Impeachment Follies are upon us, with similar imponderables. Yes, there are hundreds of phone calls between principals. Maybe they were innocent. Who cares?
Buried in the 4,600 pages of supplemental material to the Starr report lately released by the House is an episode involving phone calls and denial that makes my point. A high political official flat-out lied to the grand jury about a small matter touching on the Clintons. No one has picked up on this episode, but Ken Starr knows about it and, I wager, will one day indict the official for perjury.
First, a warning to readers: The subject at hand has nothing to do with sex. No one will talk about cigars, breasts, genitals, masturbation or Monica Lewinsky's underwear. Those who wish to read about such matters should stop reading now!
Back in March of this year, I hunted the papers for pictures of the striking stylish Marsha Scott, deputy assistant to the President, going into the courthouse to testify before the grand jury.
A 50-ish blonde, Ms. Scott represents a lot of what I'm most proud of in my generation. Raised in country-club Little Rock, she rebelled big time, moving to California and growing her hair out. Over the years, she worked as a Head Start teacher and interior designer. She went to college late, a marriage came apart. She's known Bill Clinton forever and is the side of him I most enjoy. Not the Rhodesy, impress-the-wonks side, but the hanging-out side, the twinkling devil of his grand jury tape. I can imagine sitting outside in the dark with Marsha Scott in Santa Cruz, doing a doobie and listening to the crickets. Ten years ago, maybe.
Alas, like the rest of us, Marsha Scott grew up. These days she's a power babe, a key White House operative, one of the only survivors of the Arkansas gang. Bill Clinton handed off the Monica Lewinsky job mess to Marsha Scott first. And, famously, Ms. Scott met with Vince Foster in a long closed-door meeting the day before his death, a meeting she's described in only vague terms, saying she blocked the substance because it was such a painful time.
Typically, Marsha Scott played the California blonde before the grand jury last spring. When the prosecutors asked her whether she'd ever talked to her old friend Webster Hubbell about his work for Revlon Inc., she said she wished she'd known about it because she wore that makeup. When they asked whether she'd discussed Mr. Hubbell's financial situation with the President, she said she'd talked about him only "in the holistic sense."
Her chief opponent that day was the studious Starr deputy from Texas, Solomon Wisenberg, who bored in on an obscure matter surrounding Mr. Hubbell. The former associate attorney general had gone to prison for overbilling clients at the Rose Law Firm, and Rose had sued Hubbell for about $450,000. Mr. Hubbell was talking about suing Rose back. And, as Ms. Scott readily conceded, she regularly spoke with the prisoner and his wife by phone.
"Did you convey that to Webb Hubbell or his wife, that people in the White House circle were concerned about him countersuing the Rose Law Firm because it might drag in-somehow implicate the First Lady?" Mr. Wisenberg asked.
"I don't know what you're talking about," Ms. Scott said. "I have absolutely no memory of anyone in the White House ever mentioning to me anything about this countersuit notion."
Mr. Wisenberg came at the matter again and again. His questioning went on for several pages. Ms. Scott virtually mocked him. She called it a "funny" line of questioning. She told a second questioner she never talked about finances with the Hubbells.
"I do not see how this mythical thing that I'm supposed to know is anything that I could comment on," she said. "Maybe I'm not coming up with the right words because you and I are talking at each other, not with each other "
Barely a month after Ms. Scott left the grand jury, Representative Dan Burton, Republican of Indiana, publicized something that Ms. Scott was apparently not aware of, that Mr. Hubbell's phone conversations from prison had been recorded. Amid considerable controversy, Representative Burton released tapes of conversations that involved Mr.Hubbell's continuing cooperation with the White House. Whatever you think of the privacy violation (Mr. Hubbell, at least, was aware that the conversations were being recorded, and sometimes reminded interlocutors of this), the tapes are now public record, and offer a different view of the mythical matter.
March 25, 1996, was a night of crisis for the Hubbells. The Rose firm had announced that it was suing Mr. Hubbell, and Mr. Hubbell was determined to countersue. He spent over an hour on a prison phone with his weeping wife that night as the sounds of raucous prisoners echoed behind him.
Suzy Hubbell was upset because she had spoken that day with Marsha Scott. Ms. Scott had warned her that the White House would be displeased if Mr. Hubbell countersued.
Mrs. Hubbell said, "I get all this back from Marsha, who's ratcheting it up and making it sound like, you know, if Webb goes ahead and sues the firm back, then any support I have at the White House is gone. That's what I'm hearing. I'm hearing the squeeze play."
And Webb sighed his great line: "So I have to roll over one more time."
The Hubbells spoke of Marsha Scott as their "link" to the Clintons.
"See, but they're scared, rightfully so," Mr. Hubbell said. "That I'm going to answer the [Rose] complaint and I'm going to fight, and-"
"And it's going to draw her in," Mrs. Hubbell said, referring to Hillary.
Mrs. Hubbell was frightened because she felt that her own Government job in the Interior Department was at stake if her husband sued. She needed the job.
"You know Marsha. And it's a little ghoulish. It sounds like she takes pleasure in telling me all this," Mrs. Hubbell said. "She said you're not going to get any public support if you open up Hillary. Well, by public support I know exactly what she means. I'm not stupid."
Mr. Hubbell said he wouldn't do that. "I won't raise those allegations that might open it up to Hillary, and you know that."
An hour or so later, Mr. Hubbell called his old friend Marsha Scott at home in Washington. It was Oscar night. She was watching television by herself.
The two of them spoke at length about the Rose suit and a possible countersuit.
Ms. Scott apologized for upsetting Mrs. Hubbell.
"I was just in a bad mood and just being blunt," she explained.
"You still have really good friends, but there are people-I mean no one, no one looks forward to a public spectacle on this And so I can't lie to her and say people are overjoyed at the thought of all this coming to trial."
Mr. Hubbell responded that Rose had been dishonest, he had to establish that in court.
"At the same time," he said, "I have got Suzy to realize, there are issues I have to stay away from. To protect others. And I will. I always have. I mean that's the other thing. Have I ever been disloyal?"
"Oh, God, no," Ms. Scott said.
"And I'm not going to be here. The other thing is, Suzy has realized how important her job is, and she worries that she's at risk."
"How does she feel at risk?"
"I don't know, something you said to her did make you feel that way, that she was at risk, that she would lose her support in the White House-"
"We weren't even talking about that!"
"Maybe somebody else said that to her."
"What I said was that no one's going to support a public trial on this. You know that. No one wants that."
"Neither do I."
"Exactly," Ms. Scott went on. "When she asked me about people being supportive in the White House, I just said, Suzy, they're not going to be. No one is supportive of anything that's public. You know that. It's not being unsupportive of you or not caring about you or her It's just that no one's going to stand up for you, either."
I don't believe Marsha Scott forgot those conversations two years after the fact. She spent more than 15 minutes on the phone with Hubbell that night and said she was going to call Suzy back to smooth things over. Do you forget emotional apologies?
Ken Starr's office declined comment on whether it plans to indict Ms. Scott. "You can draw whatever conclusions you want from that section," spokesman Charles Bakaly III said. When I called Ms. Scott's attorney, Stuart Pierson, to discuss the contradiction between her testimony and the tapes, he said he did not know of the matter. Ms. Scott herself did not return calls I placed to her office.
When people attack Ken Starr for spending however many years and millions on the Clinton scandals, what they do not understand is that at every turn Mr. Starr has been lied to about the most trivial matters in just the way that Marsha Scott lied to him last March. I have no doubt that he has gotten similar lies about the Clintons' involvement in everything from Travelgate to Filegate to Foster's office-matters that he was appointed to investigate. The only difference in the Marsha Scott situation (and, for that matter, the sex capers) is that by a Nixonish fluke, there are tapes.
I believe these lies hide illegal conduct that is just as pervasive as Watergate, and probably more sinister. Which is why, in one of the great civil liberties battles of all time, when every liberal from here to the Czech Republic is denouncing Mr. Starr's invasions of Mr. Clinton's privacy, I continue to have more concern about Mr. Clinton's abuses, indeed, why I'm souring Upper West Side parties by getting in spluttering fights with the likes of Victor Navasky (who was a friend to me when my own liberties were once under attack). My belief in the sinister stuff is part hunch (shared by Dick Morris and rising Congressional star Lindsey Graham; go, boys) and, if I'm shown to be wrong, will be a black mark against my judgment.
Passionate people stake out positions and by doing so risk their futures, consciously or not. In Philip Roth's new novel on the destructive 50's, I Married a Communist, he speaks with surprising compassion of his characters, red and redbaiter. Just to act is to err, he says. These were people "impaled on their moment," caught in "the traps set for them by their era."
Trapped in our era! Impaled! Two years ago, the stakes seemed so small. I remember how Mr. Blumenthal ended our phone conversation. Whitewater's a "rabbit hole," he said, so be careful if you go down it, you may never get out. At the time, I chuckled.
from TPDL 1998-Nov-15, from the Associated Press:
Policy on Legal Fees Changes in Light of Lewinsky Inquiry
WASHINGTON -- The Justice Department, which is paying the legal bills for witnesses in the Monica Lewinsky investigation, says lawyers whose clients want reimbursement must notify the White House of testimony that might be covered under executive privilege.
The department says the new policy insures that privileged information is not disclosed. But legal and political experts worry that it could give notice of unfriendly testimony to Presidents under investigation, and Presidents could then try to keep the testimony from prosecutors by invoking the privilege.
"Could this be sort of a tip-off?" said Peter Shane, a University of Pittsburgh Law School professor and former Justice Department lawyer. "The answer is yes."
Federal employees who need lawyers for work-related investigations can have the Government provide lawyers, who would know the privilege doctrine, or they can hire their own. The Justice Department changed the policy to make sure that outside lawyers learned the doctrine and abided by it, officials said.
"If you are going to reimburse people during the investigation, then you want to make sure that their representation is not creating snarls for the Government," said a department spokesman, Bert Brandenburg.
President Clinton invoked executive privilege and other privileges to try to keep prosecutors from hearing certain testimony in the Lewinsky matter.
Even before the new policy, some people had raised concerns about witnesses' telling the White House about their testimony under an aggressive joint defense agreement that the President's lawyer arranged with other lawyers.
Federal regulations allow the Justice Department to approve reimbursements for Federal employees who hire lawyers. The rules give the department broad discretion to approve or decline such requests based on whether the testimony stemmed from the witnesses' official duties and the reimbursement is "in the interest of the United States."
The reimbursement policy has been in effect for years. Traditionally, however, witnesses and their lawyers in criminal and independent counsel inquiries had to wait until the investigations were over to get paid. Now reimbursement is allowed while investigations are active.
In an another change, the department added the new requirement regarding executive privilege.
"The proper handling of privileged information is of vital historic importance to the Government and is more important than its effect on the person who is President," Brandenburg said. "Without any mechanism, the Government might never know about a claim that could be of great importance to the Presidency."
But others fear that witnesses who might otherwise not disclose damaging testimony to the White House will now be driven to do so, even before prosecutors know about it.
from TPDL 1998-Oct-12:
House Government Reform and Oversight Committee
M E D I A A D V I S O R Y
For Immediate Release
Sunday, October 11, 1998
House Government Reform and Oversight Committee Chairman Dan Burton (R-Ind.) revealed today that the Democratic National Committee delivered ten boxes of subpoenaed fund-raising documents on Friday (October 9), the day after the Committee adopted its interim report on campaign fund-raising. Chairman Burton, appearing as a guest on CNN's "Late Edition," said the documents were subpoenaed 19 months ago in March 1997, and a timely response would have seen them produced on March 24, 1997. "They're more than a day late - in fact, they were 564 days late - but, not a dollar short," he said. "Because, as our report details, the Democrats have kept some $1.8 million in clearly illegal or highly questionable contributions." He added his view that the "delayed delivery is more than slightly suspicious, yet typical of the stonewalling" the Committee encountered. Chairman Burton noted that 120 witnesses, including DNC fund-raising officials, have refused to cooperate with the Committee's fact-finding either by taking the Fifth Amendment or fleeing the country.
from TPDL 1998-Sep-11, by Deborah Orin, from the New York Post:
Clinton Rips Unforgiving Aide
WASHINGTON - A supposedly contrite President Clinton ripped into Health Secretary Donna Shalala at a Cabinet meeting when she said she was appalled by his behavior, it was reported last night.
The report is sure to raise questions about the sincerity of Clinton's public professions of contrition over Sexgate.
Clinton's outburst came when Shalala balked at granting him the forgiveness he sought at a closed-door meeting with Cabinet members to whom he lied about Sexgate, the Washington Post reported.
Clinton was arguing that his policies matter more than morality, but Shalala sharply disagreed, the report said.
I can't believe that is what you're telling us, that is what you believe - that you don't have an obligation to provide moral leadership, Shalala was quoted as saying.
She said something like, "I don't care about the lying but I'm appalled at the behavior' and frankly Clinton whacked her, let her have it, a source told the paper.
Clinton argued that by Shalala's logic, it would have been better for the nation to elect Richard Nixon than his own idol, John F. Kennedy, in 1960, the report said.
Shalala, who didn't speak to reporters after the meeting - the latest in Clinton's apology-a-thon - couldn't be reached for comment last night.
Shalala, Secretary of State Madeleine Albright and Education Secretary Richard Riley led the way when Clinton sent his Cabinet out to back up his Sexgate lies last January.
None of those who defended Clinton spoke to reporters after yesterday's ostensible apology session, although Albright had her spokesman, Jamie Rubin, express her support for the president.
Clinton has had only two Cabinet meetings this year, both aimed at rallying public support on Sexgate - the January session where he lied about Sexgate and yesterday's meeting to seek forgiveness.
Sources reported other female Cabinet members also were more critical than the men in Clinton's Cabinet when he sought forgiveness.
He was hurting, said a near-tears Energy Secretary Bill Richardson as he pledged loyalty to Clinton.
Treasury Secretary Robert Rubin told NBC that Clinton admitted making terrible mistakes and Rubin said he didn't feel betrayed - I don't think anybody feels more badly about it than Clinton does.
Nor was that the only meeting where Clinton had trouble on the second day of his apology strategy.
He got a skeptical response when he promised 10 Democratic senators that they won't be rocked by any new shock when prober Kenneth Starr's Sexgate report is made public.
His answer was that there were no surprises, said Senate Democratic leader Tom Daschle.
But Sen. Bob Kerrey (D-Neb.), who was at the meeting, sounded skeptical, saying that on the question of new shockers, when Clinton says, "Do you trust me?' No, I don't.
Kerrey added: Every person that was there said directly to Clinton that this is extremely serious and we don't know where this is going to end.
Sen. Harry Reid (D-Nev.), whose re-election is in serious doubt in the wake of Sexgate, told Clinton he had betrayed his own party, sources said.
Clinton asked the senators to pray for him - but some were taken aback because he said nothing about praying for the country in the wake of the Sexgate crisis created by his own behavior, sources told The Post.
Some analysts wondered aloud if Clinton is weakening his authority as president by begging for forgivenesness over and over.
But Sen. Wendell Ford (D-Ky.), also at the meeting, said: There's a lot of forgiveness in the hearts of the American people.
Ford, who's leaving the Senate, then added emphatically: I'm glad I'm retiring.
Clinton will likely apologize again today, when he speaks at the annual White House prayer breakfast, which the National Association of Evangelicals is boycotting for fear that participation might be seen as backing Clinton.
The NAE, representing 23,000 churches and 10 million Americans, said it was staying away because joining Clinton could easily be misconstrued.
But the NAE urges prayer for the president and the nation at this time, the group said in a statement.
an item from the 1998-Aug-14 TPDL, from "Inside Politics: News and political dispatches from around the nation," by Greg Pierce, the Washington Times:
While President Clinton and his spinners search for an angle to use after he testifies before a grand jury Monday, "the Clinton defense team will return to business as usual -- trying to blacken, threaten and intimidate critics, witnesses and anyone else who stands in their way," the Wall Street Journal warns. Noting attacks on the characters of various women and anyone else who threatened Mr. Clinton's image, the newspaper pointed to reports in Salon magazine, which is financed by fat-cat supporters of the president. The Internet magazine is talking about a "scorched-earth" plan by the Clinton camp to dig up and dispense dirt on prominent congressional Republicans. "This is not the way we want the presidency run," the newspaper said in an editorial. "Despite [the] adage that politics ain't beanbag, there have to be conventions and limits somewhere. What Mr. Starr's inquiry is ultimately about is whether the Clinton administration will set the standards by which our politics are conducted in the future. The independent counsel will be derelict in his duty if he fails to make this issue clear in Monday's questioning, and even more so in his eventual report to the Congress."
from TPDL 1998-Oct-3, from the Associated Press:
Excerpts of Dick Morris Testimony
Excerpts from testimony by Dick Morris, former Clinton political consultant, before the grand jury on Aug. 18, 1998:
Q: ... When was the first time you ever heard the name Monica Lewinsky?
A: Jan. 21, 1998.
Q: ... How ... did you hear the name Lewinsky ...?
A: In the media, just like everybody else. ...
When I woke up, I heard about the Lewinsky scandal and at about 11 in the morning, I received a page from the president.
... Q: How long did that conversation last?
A: ... My guess would be 10 to 15 minutes. ...
He got on the phone and I said, "You poor son of a ..." ... And he said, "Oh, God. This is just awful." ...
Then he said, "... With this girl, I didn't do what they said ... but I did do something." ...
And then he said, "And I may have done enough so that I don't know if I can prove my innocence."
And I said, "There's a vast capacity for forgiveness in this country."
... He said, "You know, ever since the election, I've tried to shut myself down. I've tried to shut my body down, sexually, I mean. ... But sometimes I slipped up and with this girl I just slipped up."
... And I said, "Why don't we poll it?"
... And he said, "When could you do it?"
And I said, "Tonight."
And he said, "Call me late tonight with the numbers."
... Q: ... Approximately how long was this conversation?
A: About 15 to 20 minutes. ... I said, "Well, I'm wrong. You can't tell them about it, they'll kill you. ... They're just not ready for it," meaning the voters.
And he said, "Well, we just have to win, then." ...
(The next night Morris talked to Clinton again, by phone.)
And I said, "The country's never going to impeach a president over the word of a 21-year-old girl on some kind of fantasy trip." And we talked in that vein for a moment.
Then ... I said, "I'm going to really just rip her tomorrow" (at a planned news conference he later canceled).
And he said, "You'd better be careful. Don't be too hard on her because there's some slight chance that she may not be cooperating with Starr and we don't want to alienate her by anything we're going to put out."