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Whitewater, July 1994 [Folder 2] [2]
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Whitewater, July 1994 [Folder 2] [2]
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Clinton Often Borrowed for Causes, Ex-Aide Says
By Susan Schmidt
Maurice Smith, during the 1980s to fi-
Wright and Clinton's lawyer, David
tion improvement plan in 1983, and
nance his campaigns and at least one
Kendall. Kendall refused to comment.
and Charles R. Babcock
for reelection campaigns. Smith has
Washington Post Staff Writers
legislative program, Smith said.
In a related development yester-
said most of the money his bank leot
The previously undisclosed loans
day, Fiske told House and Senate
Clinton between 1983 and 1988 went
A longtime aide to Bill Clinton when
raise questions about the Clintons' fi-
members planning Whitewater hear-
to election campaigns-he estimated
he was governor of Arkansas said yes-
nances and whether campaign and po-
ings this month that he will likely need
$300,000 of the $400,000. Wright
terday that Clinton "frequently" took
litical spending was properly account-
until the end of August to complete
said she would not dispute his ac-
out personal bank loans to promote his
ed for.
his investigation into the handling of
count.
legislative initiatives. The White
In an interview yesterday, Wright
documents in White House deputy
She said any money that went to
House continued to refuse to com-
counsel Vincent Foster's office after
declined to say whether Clinton had
campaigns was properly reported, but
ment on the issue.
taken similar loans from other banks,
his suicide. A hearing on that subject
acknowledged that a $50,000 loan to
Betsey Wright, a former top Clin-
may be put off until the fall.
Clinton from Smith's bank in 1984
ton aide who had control over the
saying her records were incomplete.
Rep. Henry B. Gonzalez (D-Tex.),
was not identified as such in campaign
funds, said the citizens, banks and cor-
She said it would "disrespectful" to
chairman of the House Committee on
reports. "It was probably my adminis-
porations who donated to the initia-
disclose her records because they
Banking, Housing and Urban Affairs,
trative error," she said.
tives may not have known they were
have been subpoenaed by Whitewater
said yesterday he will not subpoena
Joan Watkins, Clinton's press secre-
paying off Clinton's personal loans.
special counsel Robert B. Fiske Jr.
Fiske, who has refused to testify in
tary during the promotion of two leg.
But, she said, "it wouldn't have been a
White House aides have declined to
hearings scheduled to begin July 26.
islative programs in the mid-1980s,
deep dark secret we were keeping."
answer new questions raised this
Wright said Clinton took out per-
said she was not aware they had been
BETSEY WRIGHT
Clinton borrowed up to $400,000
week about President Clinton's per-
sonal loans to use as "seed money" for
financed by personal loans to the gov.
aide to Clinton as governor
from the bank of another of aides, W,
sonal loans, referring reporters to
several initlatives, including an educa-
ernor.
THE WASHINGTON POST
RDAY, 16, 1994
/ORK
TIMES
OP-ED
SATURDAY,
JULY
16.
1994
The Death of Civility
By H. Brandt Ayers
homosexuality, abortion, illegitimacy
and R-rated movies and TV. (The
unsubstantiated allegations of sexual
Hatred threatens
ANNISTON, Ala.
misconduct by Mr. Clinton are noth-
hen
the
ing but a red herring.)
House Bank-
Clinton and the
W
Most of these concerns are beyond
ing Commit-
the pastoral powers of any President,
tee begins its
but Mr. Clinton can relieve one source
Presidency.
Whitewater
of distress: the banishment of reli-
hearings on
gion and its values from public
July 26, Congressional decorum will
schools after 1962, when the Supreme
spread a patina of civility over hatred
Court, in Engel V. Vitale, outlawed
stories about the President; Rush
of unprecedented violence being di-
Government-imposed prayer.
Limbaugh, most of whose daily three-
rected at the White House. Though
A results-oriented White House
hour radio and half-hour TV shows
the animosity toward President Clin-
conference on restoring to schools the
attack the President: Reed Irvine of
ton is a gauge of the many anxieties
study of religion as part of the Ameri-
Accuracy in Media; the American
people feel, it may damage the Presi-
can Experience and the study of con-
Spectator magazine and the Conser-
dency itself.
vative Coalition.
sensual American values could help
Richard Neustadt says in his influ-
fill the spiritual void. Such programs
Michael Novak, a neo-conservative
ential "Presidential Power" that the
would not contravene the separation
theologian, isn't troubled. "Liberals
President's chief weapon is the power
of church and state.
can't take it," he said. He rightly
to persuade. But when partisan zeal-
Tabloid TV. talk shows and televan-
points out that liberals have their own
ots turn up the volume of financial
gelists' broadcasts, which carry the
armies, from People for the Ameri-
and sexual innuendo so loud that seri-
anti-Clinton infection. are a relatively
can Way to civil rights organizations,
ous talk is hard to hear, an essential
new form of media. They are espe-
who didn't cheer Ronald Reagan and
power of the Presidency is neutered.
cially virulent because there is no
swarmed all over conservative to-
The Media Studies Journal, a schol-
longer a fairness doctrine requiring
tems such as Judge Robert Bork with
arly publication, finds that "a pattern
balance. In fact, most rules of civility
a vengeance. However, none investi-
of sensationalism and scandal-mon-
are obsolete - anything goes. The
gated the sexual and financial pasts
gering is sweeping across virtually
well-financed personal industries
of President Reagan or Judge Bork.
all the electronic media and infecting
dedicated to destroying Mr. Clinton
even traditional print outlets." The
feed the new media, which hijack
ven Mr. Novak softened
uniquely "savage nature" of this me-
legitimate networks and newspapers.
Rev. Jerry Falwell, who sells video-
E
when asked if his hero,
dia comment, it says, "could weaken
Among those out to get him are the
Ronald Reagan, could
our role and effectiveness as the
have ducked the new
world's only surviving superpower."
tapes that even accuse him of mur-
media's artillery.
If Mr. Clinton is to be a transform-
der; the Christian Coalition, run by
Imagine "Geraldo,"
ing leader, he has to find a way to use
the failed Presidential candidate Pat
"A Current Affair" and "Hard
the bully pulpit of the White House to
Robertson; Floyd Brown of Citizens
Copy," followed by CNN and The
overcome the national malaise.
United, whose talk show and newslet-
Washington Post, investigating Mr.
That distress includes the feeling
ter, Clintonwatch, attack Mr. Clinton
Reagan's adventures among starlets
many sincere Christians have that
obsessively; Randall Terry, the
before, during and after his divorce,
the nation has abandoned God and
founder of Operation Rescue; Cliff
or any conflict of interest in his rela-
embraced moral relativism - open
Jackson, the source of most sleaze
tionship with the wealthy old men
who groomed him for office.
H. Brandt Ayers is editor and publish-
"Private life should be ruled out of
er of The Anniston Star.
bounds," said Mr. Novak. "People
whose private lives, in a Christian
sense, have not been of the highest
standard have made significant con-
tributions to the common good."
Most Presidents have been intense-
ly criticized. Huey Long and radio
demagogues of yesteryear, Father
Charles Coughlin and the fundamen-
talist Gerald L.K. Smith, mixed a
poisonous stew of fascism, populism
and anti-Semitism to undermine
Franklin D. Roosevelt.
Arthur Schlesinger Jr., the histori-
an, thinks that today's media land-
scape is different. He said: "Press
coverage of the private sexual life of
the President has a salience that is
new, but every President who stands
for change is hated beginning with
Thomas Jefferson."
THE NEW YORK TIMES, SATURDAY, JULY 16, 1994
Everette Dennis, director of the
Media Center at Columbia Universi-
ty, is astounded by the casual arro-
gance among TV reporters. "There's
open contempt for the Presidency
with TV reporters saying on the air
what they like and don't like - as if
their opinion mattered," Mr. Dennis
said. And in an interview, Mr. Neus-
tadt called the White House press
"obnoxious, arrogant, pampered and
self-important baby-boomers."
Republicans may see temporary
advantage in Mr. Clinton's torment.
But everyone has an interest in satis-
fying the national yearning for values
and bringing the anti-White House
industry to heel, if only because the
monster it feeds has no brain or soul.
It can turn against anyone - includ-
ing, say, a President Bob Dole.
rrienas and Foes Testify About Breyer
By NEIL A. LEWIS
"well qualified" Robert Watkins, a
and Anthony M. Kennedy.
Special 10 The New Yerk Times
Washington lawyer and chairman of
WASHINGTON, July 15 The Sen-
the association's Standing Committee
The harshest criticism came from
ate Judiciary Committee completed
on the Judiciary, said that the 15
Ralph Nader, who called Judge
members of that panel had unani-
Breyer "extraordinarily one-sided"
its hearings on the nomination of
Judge Stephen G. Breyer to the Su-
mously accorded Judge Breyer the
in favor of big business in cases in-
preme Court after hearing from near-
top rating.
volving competition and Government
In today's testimony, Professor
regulation.
ly two dozen witnesses today, some
Kathleen Sullivan of the Stanford Uni-
Judge Breyer has written two
who praised him as a superb and
intellectually gifted choice and others
versity Law School, a former col-
books about Government regulation,
who called him an unfeeling and elit-
league of Judge Breyer's on the Har-
in which he argues that much of the
ist advocate for America's coΓpoΓa-
vard Law School faculty, called him
money spent on health and safety
tions.
"a man of great evenhandedness as
issues is misdirected because of dis-
well as openmindedness."
torted public priorities that come
In the end, the testimony by wit-
Professor Sullivan said she be-
from sensational news reports.
nesses will have little significance,
lieved that Judge Breyer's "thor-
Mr. Nader, who founded Public Cit-
because Judge Breyer is expected to
izen, a study and advocacy group
be confirmed by the committee over-
based in Washington, said that Judge
whelmingly, probably even unani-
Breyer's writings and actions as a
mously. The 18-member Judiciary
The Senate seems
judge always "just happen to please
Committee is expected to vote on the
'corporatists' who do not welcome
nomination next week under an expe-
health and safety regulation."
dited procedure that will allow the
likely to approve a
Dr. Sidney Wolfe, an associate of
full Senate to vote on the confirma-
Mr. Nader's, challenged the facts un-
tion before the end of the month.
The swift schedule is itself a kind of
judge quickly.
derlying one of the most striking ex-
amples that Judge Breyer has used to
testament to the changed atmosphere
demonstrate that Government regu-
in Supreme Court confirmation poli-
lators have misplaced priorities.
tics. The last few nominees of the
Judge Breyer wrote in one of his
Republican Administrations of Ron-
oughly pragmatic philosophy" would
books about a toxic-waste dump in
aid Reagan and George Bush gener-
put him squarely in the middle of the
New Hampshire where regulators
ated so much dispute that none joined
current Supreme Court as well as in
were trying to force chemical compa-
the court in time for its traditional
the dominant tradition of the Su-
nies to spend $9.3 million to clean up
opening day, the first Monday in Oc-
preme Court throughout this century.
the last 10 percent of the waste.
tober.
In her view, liberal interest groups
The site would be clean enough for
Judge Breyer, a Federal appeals
are mistaken in their complaint that
children playing there to eat small
court judge in Boston, will probably
President Clinton has missed an op-
amounts of dirt daily for 70 days each
be sworn in at an even earlier date in
portunity to choose a more progres-
year without harm, Judge Breyer
the summer than was Ruth Bader
sive candidate for the court. She con-
wrote. Getting rid of the last batch of
Ginsburg, President Clinton's first
tended that the current court was
waste would make the site clean
Supreme Court choice, last year.
already comfortable with liberal
enough for the children to eat dirt for
precedents in many areas and that
245 days a year. He said the foolish-
The American Bar Association,
Judge Breyer would fit right in with
ness of the final cleanup became ap-
which evaluates judicial candidates,
the centrist justices on the court,
parent when he learned that no chil-
gave Judge Brever its highest rating:
Justices Ginsburg. David H. Souter
dren would come to the area because
"the site was a swamp."
Dr. Wolfe said that the site was
actually med for residential use and
that there was a plan to build houses
there.
The hearing that ended today
showed how far the confirmation pro-
THE NEW YORK TIMES, SATURDAY, JULY 16, 1994
cess has changed over the years. Un-
til 1929 the Senate acted on almost all
nominations without questioning the
nominee. It was not until 1939, when
Felix Frankfurter was nominated by
President Franklin D. Roosevelt, that
the practice of the Judiciary Commit-
tee questioning a nominee began.
Whitewater Counsel Seeks New Limit on Hearings
pects of the Whitewater case, a set of
WASHINGTON, July 15 (AP)
A prosecutor asks
political and financial transactions
The Whitewater special counsel, Rob-
lumped together under the name of a
ert B. Fiske Jr., asked Congress to-
former real estate development in
day for further restrictions on the
hearings scheduled to begin later this
Congress to protect
Arkansas, the Whitewater Develop-
ment Company, in which President
month because he has not finished
investigating the removal of docu-
his investigation of
Clinton was a partner. Mr. Fiske is
trying to determine, in part, whether
ments from a White House office.
Representative Jim Leach, the
White House files.
Whitewater led to losses at a failed
savings and loan owned by Mr. Clin-
ranking Republican on the House
Banking Committee, met with Mr.
ton's partner in the real estate com-
Fiske and said afterward that the
pany.
counsel had not said whether new
new round of hearings soon after the
While the Arkansas transactions
discoveries had delayed his investj-
report is finished. Republicans want
will be under investigation for some
gation. Earlier, Mr. Fiske had said
to hold additional hearings close to
time, Mr. Fiske has moved more
the inquiry would be finished before
the election, but Democrats might
quickly to investigate other aspects of
the hearings.
object to that timing.
the case, like contacts between Ad-
The report will cover the removal
The chairman of the House Bank-
ministration officials and banking
of files by White House officials from
ing Committee, Representative Hen-
regulators, and Mr. Foster's suicide
the office of Vincent W. Foster Jr., the
ry B. Gonzalez of Texas, said he had
and the removal of documents from
deputy White House counsel, soon af-
"repeatedly reaffirmed" a pledge not
Mr. Foster's office.
ter Mr. Foster committed suicide last
to interfere with Mr. Fiske's investi-
July 20.
gation and needed to determine
Mr. Fiske reported on June 30 that
Mr. Leach said that Mr. Fiske did
"what we would be left with legiti-
the Administration contacts with reg.
not want the committee to investigate
mately" in the initial hearings.
ulators would not result in criminal
that topic when the panel opens its
Broad Inquiry
charges, and he concurred in law
Whitewater hearings on July 26.
enforcement officials' finding that
Election Could Affect Timing
On Thursday, Mr. Fiske's office
the death of Mr. Foster was a suicide.
would not comment on the delay, and
Mr. Foster had handled some White-
The House and Senate have agreed
it was not known whether he had
water matters for the President.
not to cover topics in the hearings
made significant new discoveries.
that Mr. Fiske is still investigating.
The counsel originally said the report
Mr. Fiske has completed an investi-
would be finished before the hearings
gation of Administration contacts
begin on July 26 in the House. The
with banking regulators, the subject
GIVE A CHILD A CHANCE:
Senate will open its hearings a day or
that is expected to dominate the hear-
two later.
GIVE TO THE FRESH AIR FUND
ings.
Mr. Leach said he would insist on a
Mr. Fiske is investigating all as-
7
-Whitewater, Ark Bjt, 650
Jan in Fiske Probe Said Help for Clintons' Whitewater Partner
By PETE YOST= Associated Press Writer=
FORT SMITH, Ark. (AP) A figure in the Whitewater investigation says he
was told that an $825,00 loan by an Arkansas savings and loan would be
helpful to the institution's owner, who also was President Clinton's
Whitewater business partner.
Dean Paul, a former lumber company operator, said a business associate,
David Hale, told him the 1986 transaction would help ``clean up'' some
financial problems involving James McDougal, the owner of Madison Guaranty
Savings & Loan. The S&L was about to be audited by federal regulators at the
time the institution made the loan. Paul says he signed for the loan at Hale's
request.
At the time, McDougal also was a partner with President Clinton and
Hillary Rodham Clinton in the Whitewater Development Co.
Paul said Hale assured him that Jim Guy Tucker, now Arkansas' governor,
and Hale had business ventures, including a planned shopping center, that
would enable the loan from Madison S&L to be paid back. Nearly $600,000 of the
loan has never been repaid.
Paul said he was aware that Hale knew Clinton, but the then-governor's
name never came up during the conversations about the loan.
Paul's comments add the first substantial public detail to allegations
made over the past 10 months by Hale, a former municipal judge convicted
recently of defrauding the government through a federally backed lending
company he ran.
Under a plea bargain, Hale is now a key witness cooperating with
Whitewater special prosecutor Robert Fiske.
Among the allegations Hale has made is that in 1986 Clinton, who was then
governor, pressured him to make a loan to McDougal's wife, Susan. The $300,000
Small Business Administration-backed loan was never paid back.
Clinton has dismissed Hale's story as ``a bunch of bull, and the White
House has suggested that Hale made up the allegations.
Paul has declined requests for news interviews for months. He agreed to an
interview with The Associated Press at his lawyer's office in Fort Smith.
Paul was assured by Hale that the loan would be paid back.
David was my lawyer, my business partner, my friend. I trusted him,
Paul said. Paul's lawyer, J. Michael Fitzhugh, said that Paul was a victim and
was used in a scheme by Hale and others.
The $825,000 loan, made Feb. 28, 1986, has emerged as a key transaction in
Fiske's investigation, according to several witnesses who have been questioned
by investigators.
The witnesses, speaking only on condition of anonymity, say that Fiske is
exploring whether McDougal directed that the loan be made to Hale, who then
would use the money to make several new loans, including the one to Susan
McDougal on April 3, 1986.
Tucker's lawyer, John Haley, said his client knows nothing about the Paul
loan. Haley said Tucker had planned to build a shopping center with Hale, but
the venture never got off the ground.
McDougal has said he didn't know about the Paul loan until he read about
it in news accounts this year.
But FBI interview summaries from 1989 refer repeatedly to a McDougal
connection with the loan.
Madison S&L executive H. Don Denton described Paul as a front man' for
David Hale on this loan. Denton recalled that McDougal and (Madison S&L
president John) Latham both told him to make this loan, according to one of
the FBI summaries.
And a 1989 memo from Latham to his private lawyer, obtained by the AP,
suggests McDougal and Tucker were involved in the Paul loan.
Denton and Latham declined comment when asked about the documents.
McDougal's lawyer, Sam Heuer, also declined comment.
Associated Press Bureau Chief Bill Simmons in Little Rock, Ark.,
contributed to this report.
**** filed by: APW (AR) on 07/18/94 at 01:13EDT ****
**** printed -by: WHPR (JEL) on 07/18/94 at 08:19EDT ****
man Testimony In
Whitewater Is Contradicted
WASHINGTON -- The Treasury's general counsel, in giving her account of the
department's handling of the Whitewater investigation to a Senate committee,
contradicted Deputy Treasury Secretary Roger Altman's version, according to
the Washington Post, The Wall Street Journal reported.
Citing "congressional sources," the newspaper said Jean Hanson told Senate
Banking Committee investigators that Mr. Altman instructed her to brief White
House officials on the Resolution Trust Corp.'s inquiry into Madison Guaranty
Savings & Loan Association, an Arkansas thrift that was owned by a partner of
Bill and Hillary Rodham Clinton in Whitewater Development Corp.
Mr. Altman has testified to Congress that he wasn't aware of Ms. Hanson's
meetings until months later. Ms. Hanson, one of the few people who could
confirm or contradict Mr. Altman, has been publicly mum. Both have testified
before a grand jury.
The Post also said that Treasury documents supplied to the committee
suggest that Treasury Secretary Lloyd Bensten was informed of developments in
the Madison case. Mr. Bentsen has said he didn't know that his subordinates
were meeting with White House officials; the Post didn't report any evidence
to the contrary. A Treasury spokesman said that the Treasury has seen no
documents that undermine Mr. Bentsen's assertion and that Mr. Bentsen stands
by his earlier statements.
The Treasury spokesman wouldn't comment on the report about Ms. Hanson's
account and said Mr. Altman wouldn't have any comment either. Ms. Hanson's
lawyer couldn't be reached.
If true, Ms. Hanson's version will complicate Mr. Bentsen's and,
particularly, Mr. Altman's testimony before the Senate and House Banking
Committees looking into the Whitewater matter. The report also raises
questions about the ability of the committees to maintain the confidentiality
of depositions and documents turned over by the Clinton administration and
kept in a secure room on Capitol Hill.
Separately, Robert Fiske, Whitewater special counsel, said he won't
complete a report into the handling of the papers in the office of the late
White House lawyer Vincent Foster before Congress leaves for its August
recess.
Mr. Fiske met Friday with Senate Banking Committee Chairman Donald Reigle
(D., Mich.) and the two Republican leaders of the Whitewater inquiry, Sen.
Alfonse D'Amato of New York and Rep. James Leach of Iowa, to ask them to avoid
this matter in their first round of Whitewater hearings, which begin late this
month. White House staffers looked through and may have removed some of the
papers in Mr. Foster's office after learning of his suicide last July.
(END) DOW JONES NEWS 07-18-94
6 00 AM
**** filed by:TAPE(--) on 07/18/94 at 06:24EDT ****
**** printed by:WHPR(JEL) on 07/18/94 at 08:17EDT ****
BC-BISHOPS national editors:WA
Catholic bishops to fight any health care bill including abortion
(EDITORS: Ricard and Alvare are cq.)
By R.A. Zaldivar
Knight-Ridder Newspapers
WASHINGTON An all-or-nothing battle over abortion is looming in Congress
and the first casualty could be health reform.
The bishops of the 60 million-member Catholic Church announced a campaign
Wednesday to defeat any health care bill that includes abortion in its
national package of medical benefits.
They vowed to fight even if that spoils chances to secure health coverage
for all Americans, a goal the church shares with President Clinton.
Hours later, liberal members of the House who also want health insurance
for all released a letter signed by 72 lawmakers saying they could not
support a health reform bill that excluded abortion coverage.
A senior House official said there was likely to be a vote on abortion
coverage when the health care bill comes to the floor in August.
The rhetoric on both sides was unwavering.
'We cannot compromise on this, said Bishop James McHugh of Camden, N.J.
Abortion must be excluded from basic benefits in the health plan.
For those who say there will be a battle if you put (abortion) in, we
say there's going to be a battle if you try to take it out, responded Rep.
Nita Lowey, D-N.Y.
The abortion war threatens to split Clinton's coalition for universal
coverage.
The president's 1,300-page health care bill included abortion as a
benefit. However, Hillary Rodham Clinton has recently hinted that the
administration may compromise. Each side claimed Wednesday that the Clintons
would ultimately go along with them.
Rep. Patricia Schroeder, D-Colo., said the president told her at a White
House meeting that abortion coverage was `non-negotiable.
But Bishop John Ricard of Baltimore said Hillary Clinton told him the
administration could accept a congressional decision to drop abortion
coverage. Mrs. Clinton indicated to us that the Clinton administration
would not die for abortion in a health care package, said Ricard.
In an interview Wednesday, White House health policy strategist Harold
Ickes refused to be pinned down. Abortion is obviously a very controversial
issue, and it will have to be decided through the legislative process, he
said.
Congressional committees working on health reform rejected attempts to
strike abortion coverage, but abortion opponents believe they can win on the
floor of the House and Senate.
Abortion opponents and abortion rights advocates agree that Clinton's bill
would greatly expand the availability of abortion services.
Currently, an estimated two-thirds of insurance plans cover abortion,
including the 9 million-member Federal Employee Health Benefits Program.
However, the government Medicaid program for low-income people only pays for
abortion in cases of rape, incest or danger to the life of the mother.
Under the bill, all health insurance plans would have to cover abortions.
Medicaid beneficiaries would be covered for elective abortions, as well as
uninsured women who must now pay for abortions with their own money.
Doctors and medical facilities could decide not to provide abortions for
moral or ethical reasons, but employers would be required to pay for the
service and insurance plans would have to guarantee its availability. The
bishops say that means Catholic hospitals and the church itself would be
forced to pay for abortion.
Independent polls show increasing public acceptance of elective abortions,
but most Americans say they do not think abortion should be in a national
health benefits package. If abortion coverage is dropped, insurance plans
could still pay for it as a supplemental benefit.
BC-HEALTH-ANALYSIS national editors:GL
Health reform still up for grabs as Clinton plan discarded
(HAS TRIM)
By Peter G. Gosselin
Boston Globe
WASHINGTON The simple fact is that two years of public debate, nine
months of congressional agonizing and millions of dollars of lobbying have
left the health issue precisely where it was to begin with up for grabs.
Senior White House officials conceded as much Wednesday when one said the
original, 1,346-page plan had become `irrelevant. The White House announced
that President Clinton and Hillary Rodham Clinton would make campaign swings
to Boston, Pittsburgh and other cities to defend the principles behind the
proposal.
A new poll released Wednesday showed a majority of Americans now oppose
the Clinton plan as too sweeping, but, in a seeming contradiction, almost
two-thirds warned they would still punish lawmakers who block `major'''
reform.
We're in a completely open-ended situation, said Andrew Kohut,
director of the Times Mirror Center for The People & The Press, a
Washington-based think tank funded by the Los Angeles Times. The public
still wants health care reform and they continue to say, in their conflicted
way, they want universal coverage. They just can't agree on a means to pay
for it.
For Clinton, such open-endedness offers a second chance to redeem his
promise of major health legislation, and senior aides said Wednesday he would
seize the opportunity with a political blitzkrieg of speeches, rallies and
town meetings. Democratic leaders expect to push health bills through the
House and Senate later this summer.
But for the thousands of policymakers and lobbyists who have toiled over
the issue in long night meetings and painfully wrought memos, it is a reminder
that in the United States policy gets made fitfully.
It's frustrating for us to work two years and not get anything. I mean,
this issue has been around 60 years, and we thought this time would be
different, said Michael Bromberg, chief lobbyist for the Federation of
American Health Systems, which represents the for-profit hospital industry.
The White House has come almost full circle. After taking to the campaign
trail in buses in 1992, assembling a 500-member task force to devise a plan in
early 1993 and coming up with what is widely regarded as the most complicated
piece of legislation ever offered to Congress, the White House is returning to
the buses.
A coalition of unions and activist groups are sponsoring four bus caravans
to drum up support for health reform, including one that sets off from Boston
on July 31. Clinton, Hillary Clinton and senior administration officials are
expected to join the cavalcade.
The president will concentrate on themes he has repeated endlessly since
running for office the need for universal insurance coverage, medical cost
controls and a requirement that American employers help pay for workers'
health benefits. But, according to aides, he will barely mention his own plan
for meeting those goals.
We're not any longer talking about the original plan, Harold Ickes,
the deputy White House chief of staff, said Wednesday. We think that we're
in a completely different phase now; that the original plan ... is
really
irrelevant to this process.
Behind Ickes' casual dismissal of the White House's own handiwork is a
cold political calculation: that the specifics of the Clinton plan have been
so tainted by opponents it is virtually unsalvageable. But also behind it is a
White House conviction the proposal has made health such a important issue
that the president can win by returning to his first principles, and forcing
lawmakers to work out the details. The White House seems to believe its plan
has won it the right to begin the battle again.
(EDITORS: STORY CAN TRIM HERE)
The damage to Clinton's plan and the fact the issue is still up for grabs
were apparent Wednesday in the poll results of the Times-Mirror Center.
The poll of 1,021 people in late June found that 49 percent of those
questioned now oppose the Clinton plan while 32 percent favor it, an exact
reversal of results from December.
Nevertheless, when asked whether Washington should assure that all
Americans get health coverage immediately, 52 percent of respondents favored
such action. In addition, 60 percent said they would vote against any member
of Congress who opposed ``major health reform.
A tandem survey of 495 doctors found even stiffer opposition, with 75
percent opposed and only 18 percent in favor of reform. As recently as last
fall, a majority of doctors said they supported some kind of sweeping reform.
Doctors ``are just incredibly depressed about their futures, " said Robert
Blendon, chairman of the health policy department at the Harvard School Public
of Health, who helped supervised the poll.
**** filed by:KR-F(--) on 07/13/94 at 20:54EDT ****
**** printed by:WHPR (JEL) on 07/14/94 at 08:19EDT ****
14 individual bacteria in a hamburger. No current
detection method could spot such micro-contamination.
The Food and Drug Administration is considering a
Universal Care Is Vital to Health Bill
meat-industry request to be allowed to sell hamburger that
Gephardt, D-Mo., is majority leader of the House of
has been subjected to gamma irradiation, emitted by a
Representatives.
cobalt or other radioactive source. James Marsden, of the
By Richard Gephardt= Special to Newsday=
American Meat Institute, told the panel that his
As Congress begins its final push for health-care reform,
organization had surveyed Americans and found that if
pressure is mounting in both the House and Senate to abandon
properly educated, they readily chose to purchase
President Clinton's bottom line: guaranteed health coverage for
irradiated beef.
every American. The president and the Democratic leaders in
But public acceptance is expected to be a major
both houses of Congress have made it clear that such a
obstacle because of general fears about radiation and
compromise is wholly unacceptable. That it is even discussed
concerns that the process would affect the taste,
feeds a dangerous misperception about health-care reform, one
officials said.
that demands clarification.
Dr. Michael Jacobson of the Center for Science in the
Guaranteed or universal coverage is not just another
Public Interest charged that irradiation decreases the
variable element of health-care reform. Without it, there
nutritional quality of meat and that the treatment centers
can be no meaningful reform. If we fail to guarantee
would pose a radiation hazard to the environment.
coverage for all Americans, we will only make our
And panel chair Dr. Martin Brotman of the California
health-care system worse for those who have coverage today
Pacific Medical Center in San Francisco said cost could
driving up premium costs and leaving millions of
become an issue since there are not nearly enough such
middle-income families at risk of losing their coverage.
facilities in the country, and several would have to be
Uninsured Americans showing up at the emergency room
constructed at a cost of $10 million each.
aren't turned away, even if they can't pay. That's what a
The panel, convened by the American Gastroenterological
compassionate society does. But who pays for the
Association, focused for three days on outbreaks of E.
uninsured? Those who have insurance. In 1991, the
coli 0157:H7 food poisoning and questions about how and
privately-insured paid about 130 percent of the cost of
why the extremely toxic organism has gotten into the U.S.
their care to subsidize the uninsured.
food supply.
A March study by the U.S. Department of Health and
Between 1982, when the apparently new mutant bacteria
Human Services says the consequences of continuing this
was first noticed, and 1992, there were an average of two
cost-shifting scheme would be severe for New York. Unless
small outbreaks of E. coli 0157:H7 food poisonings every
we guarantee coverage, businesses that offer insurance
year. Most involved contaminated beef, but a Massachusetts
will pay an extra $549 per worker, and New York's workers
outbreak occurred among apple cider consumers. It turned
will lose $439 in wages, to foot the annual bill for the
out the apples had fallen into contaminated cow manure
uninsured.
before being pressed into cider.
That's not health care it's stealth care. It's a
Last year witnessed a dramatic surge in E. coli 0157:H7
hidden tax that drives the cost of insurance through the
cases, the most striking of which involved 700
roof. Guaranteed coverage is the only reasonable way to
Jack-in-the-Box hamburger consumers in California,
end this status quo and make the system fairer and
Washington, Idaho and Nevada: 178 were hospitalized, 56
cheaper.
suffered severe illnesses that led to lasting ailments and
By bringing everybody into the system, we can ensure
four children died. It was one of 16 outbreaks in 1993.
that costs are spread fairly, with all businesses and
In the end, the consensus panel ``concluded that there
individuals participating to the extent that they are able
is no other way except a shared responsibility all along
with no more free rides and no more hidden taxes.
the food chain, from farm to table," Brotman said. "It
The Congressional Budget Office has estimated that
takes only 100 organisms to produce an infection risk. In
businesses would save $90 billion in the first year of
the Seattle (Jack-in-the-Box) outbreak, an average of 69
guaranteed coverage with even greater savings in the
organisms produce disease in those individuals.
years to follow. What about the alternative? Why can't we
So no matter how intense efforts are, there are no
accépt the modest insurance reforms that Senate Minority
methods of detection that can guarantee a sterile product
Leader Bob Dole, R-Kan., and other Republicans have been
to the consumer."
urging? Isn't a weak bill better than no bill?
Actually, it's not. Consider what would happen if we
(Optional add end)
simply end all restrictions based on ``pre-existing
conditions." If we could buy insurance at the moment we
E. coli 0157:H7 acquired such startling capacities to
become sick, few would buy it a minute sooner. This would
sicken and kill by mutating probably some time in the
defeat the purpose of insurance: to spread the risks and
1970s to contain two genes for manufacture of powerful
the benefits across a large pool of people. How can we
toxins. Antibiotics are useless against the organism. The
spread the risks if the only people in the system are
drugs kill the bacteria, but upon death the organisms
those who need expensive care? Insurance companies are
release all their toxins, flooding the victim's body with
businesses. They are not going to take a loss just because
deadly poison.
a large proportion of their customers are very sick. That
The consensus panel called for large-scale mandatory
is why they often bar those people from buying insurance
surveillance of nationwide E. coli 0157:H7 cases; research
today; and that is why they'd jack up the rates if we
into its origins, spread and treatment; and routine
adopt insurance reform alone. The result would be enormous
laboratory screenings of all suspect diarrhea cases in the
premium hikes. In fact, that is exactly what happened when
United States for possible E. coli 0157:H7 infection.
New York State adopted this kind of insurance reform.
Since the panel's recommendations fall under the
I believe we must bring all Americans into the system
jurisdictions of several different government agencies it
paying what they can, instead of paying what other people
was impossible to assess the likelihood that some or all
cannot Then we can stop the arbitrary rate hikes and
of them will be implemented.
unfair cancellations. We can stop the limits on
pre-existing conditions and the disqualifications based on
Distributed by the Los Angeles Times-Washington Post
age or experience.
News Service
145
The president will concentrate on themes he has
dropping his slow, professorial tones and falling into a
repeated endlessly since running for office the need for
more natural, fast-paced delivery. But with few
universal insurance coverage, medical cost controls and a
exceptions, Breyer limited his responses to polite,
requirement that American employers help pay for workers'
innocuous generalizations. He frequently begged off
health benefits. But, according to aides, he will barely
answering queries by noting that an issue is likely to
mention his own plan for meeting those goals.
come before the Supreme Court. In order to keep an open
"We're not any longer talking about the original
mind, Breyer repeated often, he would not express an
plan," Harold Ickes, the deputy White House chief of
opinion, even on whether he had watched the O.J. Simpson
staff, said Wednesday. "We think that we're in a
court proceedings.
completely different phase now; that the original plan
(EDITORS: NEXT 2 GRAFS OPTIONAL TRIM)
is really irrelevant to this process."
One exception was the $218 million price tag on the
Behind Ickes' casual dismissal of the White House's own
planned Boston courthouse on Fan Pier. Breyer, who helped
handiwork is a cold political calculation: that the
plan the project, defended the courthouse as "right in
specifics of the Clinton plan have been so tainted by
the middle of the price of federal courthouses."
opponents it is virtually unsalvageable. But also behind
The cost of the courthouse's artwork, $789,000, was
it is a White House conviction the proposal has made
mandated by federal law as a percentage of the total cost,
health such a important issue that the president can win
Breyer said. And a dock that was already on the land had
by returning to his first principles, and forcing
to be restored under federal regulations, at a cost of
lawmakers to work out the details. The White House seems to
$1.5 million, he added.
believe its plan has won it the right to begin the battle
(END OPTIONAL TRIM)
again.
One of the few tense moments in the generally tranquil
(EDITORS: STORY CAN TRIM HERE)
session came when Sen. William Cohen, a Democrat of Maine,
The damage to Clinton's plan and the fact the issue is
pressed Breyer to reveal his personal view of the death
still up for grabs were apparent Wednesday in the poll
penalty. As Breyer dodged by repeating the Supreme Court's
results of the Times-Mirror Center.
stance that under certain circumstances the death penalty
The poll of 1,021 people in late June found that 49
is unconstitutional, Cohen interrupted: "No, no, That's
percent of those questioned now oppose the Clinton plan
not what I am asking."
while 32 percent favor it, an exact reversal of results
"You want my personal view?" Breyer said.
from December.
"I want your personal judgment," Cohen said.
Nevertheless, when asked whether Washington should
"Yeah," Breyer said. "The reason that I'd hesitate
assure that all Americans get health coverage immediately,
to say what I think as a person, as opposed to as a judge,
52 percent of respondents favored such action. In
is because down that road are a whole host of subjective
addition, 60 percent said they would vote against any
beliefs, many of which I would try to abstract from.
member of Congress who opposed "major health reform."
Several minutes later, Cohen gave up and moved on to
A tandem survey of 495 doctors found even stiffer
another line of questioning.
opposition, with 75 percent opposed and only 18 percent in
And so it went with senators probing his views on
favor of reform. As recently as last fall, a majority of
religious education, voting rights, television violence,
doctors said they supported some kind of sweeping reform.
the assault weapons ban, even his favorite books.
Doctors ``are just incredibly depressed about their
Asked to name his 10 favorite books, Breyer named two
futures," said Robert Blendon, chairman of the health
authors, William Shakespeare and Joseph Conrad, then
policy department at the Harvard School Public of Health,
digressed to explain how literature can help readers learn
who helped supervised the poll.
about people.
Breyer seemed at a loss when Sen. Herb Kohl, a Democrat
of Wisconsin, asked him to expound upon social ills, such
as the growing disparity between rich and poor in America.
"I don't claim any special thought or any deeper
Breyer indicates he's not activist judge, avoids
thought or any special privilege for thought in this area
most questions By Ana Puga Boston Globe
more than any other American in this country," said
WASHINGTON Supreme Court nominee Stephen G.
Breyer, whose personal wealth totals about $8 million.
Breyer Wednesday maneuvered his way around a wide range
Breyer did stress, however, that he feels an obligation
of questions from his personal view on the death penalty to
to "give something back to other people."
whether he has watched the O.J. Simpson pretrial hearing
(EDITORS: NEXT 5 GRAFS OPTIONAL TRIM)
and offered a glimpse of his pragmatic, non-activist
Kohl also raised the subject of O.J. Simpson's
judicial philosophy.
televised pretrial hearing in order to probe Breyer's
"Judges should not legislate That's your job,"
views on whether televised hearings contribute to the
the Boston federal appeals court judge told members of the
problem of finding impartial jury members for the trial.
Senate Judiciary Committee on the second day of hearings
Breyer laughed, then declared the question "a
on his confirmation.
problem," then simply restated the issue without offering
Breyer appeared to have satisfied the Senate panel's
an opinion.
concerns, raised primarily on Tuesday, about any potential
'You're worried about the fairness of the trial.
conflicts of interests presented by his investments in
You're worried about the maintenance of a free press," he
Lloyd's of London, which insures some companies accused of
said. "Somehow the balancing of those things is terribly
polluting, and his court rulings on environmental cases.
important."
On Tuesday, Breyer promised the panel he would divest
The judge looked most at ease when describing the
himself of his Lloyd's holdings even though he saw no
mechanics of his work routine and his judicial philosophy.
conflicts.
"Law requires both a heart and a head," he said. "If
Wednesday, Breyer again tried hard to accommodate his
you don't have a heart, it becomes a sterile set of rules
Senate questioners as they roamed the universe of
removed from human problems, and it won't help. If you
constitutional and social issues.
don't have a head, there's the risk that in trying to
With his confirmation by the 18-member committee all
decide 8 particular person's problem in that case that may
but certain, Breyer seemed to relax a bit, at times
look fine for that person, but you cause trouble for a lot
of other people."
13
PASCOE
barometer of floor passage is the
replaced him in the Congress -
defeats in special elections, Pres-
I
n the most stunning - though
unremarked upon develop-
ment in the legislative skir-
Health
House Energy and Commerce Com-
holds the distinction of being the
ident Clinton's sagging popularity
mittee. Composed of 27 Democrats
first congressman to introduce leg-
and electoral fears on the part of
mishing over health care
and 17 Republicans, it is a micro-
islation mandating national health
Democrats facing tough re-elec-
reform, the two most important con-
cosm of the House as a whole, mir-
insurance, having done so in 1943.
tion fights.
gressional committees have refused
reform's
roring the partisan, ideological, geo-
To honor his father, Mr. Dingell has
As Congress moves forward on
to approve universal coverage or
graphical and demographic
introduced in every session of Con-
the legislation, it is well to remem-
employer mandates, the heart of
breakdown of the entire House of
gress since he first became a mem-
ber a significant decision made by
the Clinton approach. But is anyone
Representatives. Even more than
ber a national health insurance bill.
Senate Majority Leader George
paying attention?
Commerce Committee Chairman
declining
the Senate Finance Committee rep-
He even has used his influence as
Mitchell- not to resign his position
Last month, House Energy and
resents the Senate as a whole, the
Energy and Commerce Committee
as leader immediately upon
House Energy and Commerce Com-
chairman to arrange to have the bill
announcing his retirement at the
John Dingell, Michigan Democrat,
mittee is a true indicator of what
labeled H.R. 16- after Michigan's
end of this Congress. By not turning
declared defeat, informing House
leaders that despite months of nego-
barometer
will pass on the House floor.
16th congressional district, which
over the reins of power earlier this
Only Mr. Dingell knows why he
both men have represented.
year, he set himself up as a lame
tiating, he simply could not get a
failed to come up with a compro-
Unless the leadership bucks
duck and drastically reduced his
Clinton-like bill through his com-
mise acceptable to 23 of his Demo-
House custom, Mr. Dingell's admis-
ability to reward or threaten recal-
mittee. Rather than pass a watered
cratic members. But for him to fail
sion of defeat means more than just
citrant Senate Democrats.
down bill, he said, he would pass
something that fails in the Finance
to do so, and to bow out of the health
bowing out of this stage of the
Republicans have watched the
nothing, and count on other House
Committee faces grim prospects on
care debate, is a stunning personal
debate. It means that he will not be
the Senate floor.
Democrats' dilemma with glee.
committees to produce legislation to
admission of defeat. Mr. Dingell's
a member of the House-Senate con-
Having produced their own bill
bring to the floor.
Yet even more important than the
father- who represented Mr. Din-
ference committee commissioned
Senate Finance Committee as a
with 40 Senate co-sponsors making
Over in the Senate, the Finance
gell's district before Mr. Dingell
to reconcile the different House and
it the most strongly supported bill in
Committee chaired by New York
Senate versions
either house they now have
Democrat Pat Moynihan also voted
of the legisla-
turned the tables on Democrats who
down universal coverage and
HEY, WHATEVER
tion, and it
have labelled them mere obstruc-
employer mandates, opting instead
HAPPENED TO
means that he
tionists. No longer is the fight one
for a bill based on market reforms
"WHAT YOU WANT
has given up
and the hope that changes in insur-
IS WHAT YOU GET?"
that pits reform VS. no reform; it is
jurisdiction in
now the Democratic plan VS. the
ance regulations would expand cov-
erage and control costs.
McCongress
the future over
Republican plan - and the public
any
other
clearly sides with the Republican
Virtually no one has commented
health care leg-
plan.
on the significance of these two com-
islation arising
Eventually, Democratic leaders
mittee actions, choosing instead to
out of this ses-
THURSDAY. JULY 14. 1994 The Washington Times
will recognize this, and will face a
focus on other committees' passage
sion of Con-
decision: To go for broke and try to
of bills as victories for the president.
gress.
get legislation passed with no
But the impact on the legislative
Keeping
Republican votes, or to back off and
debate of the actions in these two
wavering
try again with a new version relying
key committees - and their por-
Democrats in
less on big government.
tents for the future - are clear to
line
now
Now is the time for Republicans
seasoned Congress watchers.
becomes the
to hold firm in order to defeat gov-
Everyone paid attention to the
challenge for
ernment-run health care. If they
Senate Finance Committee deliber-
the Democrat-
can hold their numbers as they did
ations, and with good reason. With
ic leadership in
in last year's budget fight, the bet-
a partisan breakdown of 11 Democ-
both houses. To
ting here is the Democrats will fail
rats to 9 Republicans, and with the
get to 218 votes
to reach a majority in at least one
majority and minority leaders as
in the House
house. And that wouldn't be a bad
members, this committee is clearly
and 51 in the
thing at all.
the more important of the two Sen-
Senate will
ate committees dealing with the leg-
require deal-
islation. Given the committee's
making worthy
makeup, legislation approved by the
of Monte Hall
Bill Pascoe is the legislative
committee likely will pass on the
director of the American Conserva-
floor of the Senate; conversely,
SKIN
- especially
given recent
tive Union, and a contributing
writer for the Washington Times.
Abortion tug of war
threatens health bill
By J. Jennings Moss
and Larry Witham
AI
"I don't know what the final bill
is going to look like and how that
issue is handled," said Rep. Paul E.
THE WASHINGTON TIMES
Kanjorski, Pennsylvania Demo-
The always-touchy political is-
crat. He said his chief goal was to
sue of abortion threatens to hold
get a straight vote on the abortion
health care reform hostage this
question.
Of the four congressional com-
year.
More than 70 pro-choice House
mittees that passed health bills,
members yesterday sent a letter
three included full reproductive
proclaiming their "strong com-
services as part of the basic bene-
mitment" to include abortion COV-
fits package for all Americans.
erage, and several said that meant
The Senate Finance Committee
they could not vote for a health bill
voted to include abortion coverage
without it. Last week, 35 Demo-
but approved a broad "conscience
crats signed a letter saying they
clause" to allow insurance compa-
could not support a bill with such
nies and businesses to avoid offer-
coverage.
ing abortion as a benefit if they
The outside lobbying campaign
morally objected to it. The clauses
also heated up yesterday as the na-
in the other bills would apply to
tion's Roman Catholic bishops be-
doctors who object to performing
abortions.
gan the second phase of their pub-
While President Clinton has en-
lic campaign against abortion
dorsed covering all reproductive
coverage through a grass-roots ef-
services, he and first lady Hillary
fort targeted at the nation's 58 mil-
Rodham Clinton have laid down
lion Catholics.
only one point that is not negotia-
If both the pro-choice and pro-
ble - that all Americans have
life forces on Capitol Hill are
health coverage.
firmly committed to their posi-
At a news conference yesterday,
tions on abortion coverage, then
Catholic bishops announced their
the chances of passing any health
intention to lobby on Capitol Hill
legislation this year would be slim.
and to get pro-life citizens to write
"Some of our colleagues are
letters to their representatives.
threatening a fight if abortion re-
"If Congress substitutes abor-
mains in the health care plan. Well,
tion mandates for universal cover-
I can guarantee a fight if they try
age, we will fight," said Baltimore
and take it out," said Rep. Peter A.
Auxiliary Bishop John H Ricard
DeFazio, Oregon Democrat and
one of the authors of the letter sent
Their strategy, the Catholic offi-
to House Speaker Thomas S. Foley
cials said, is to convince law-
of Washington.
makers that abortion will derail
The letter, co-authored by Rep.
health care reform, so the legisla-
Patricia Schroeder, Colorado
tion may as well exclude it.
Democrat, was intended to convey
To back that up, they released a
"our strong commitment that any
poll that showed most Americans
health care reform package that
don't want or care about abortion
comes before the House must con-
coverage in basic health care
tain coverage for contraceptive
plans.
THURSDAY. JULY 14. 1994 The Washington Times
and abortion services if it is to gain
"The notion that Americans
our support."
care passionately about a cover-
Some among the 72 Democrats
age [for abortion] they don't know
who had signed the letter by mid-
they have is ridiculous," said Helen
day went further.
Alvare, information director for
"We will not vote for any health
the bishops' pro-life work.
coverage bill that does not include
The poll, conducted by the Tar-
rance Group with 1,000 Amer-
full services for abortion. What-
icans, showed that 49 percent
ever else it says, if it does not cover
opposed mandatory insurance
abortion services, I for one won't
coverage for abortion and 58 per-
be reading it," said Rep. Jerrold
cent rejected mandatory family
Nadler, New York Democrat.
abortion coverage in health plans.
The letter was in response to
"If we had to defeat a health plan
one taking the opposite position,
wrapped in abortion mandates, we
which was sent last week to Mr.
would do it in hopes that the bill
Foley. That correspondence, au-
would come back" without abor-
thored by Rep. Harold L. Volkmer,
tion, Mrs. Alvare said.
Missouri Democrat, said "we are
The bishops' new initiative is
unable to support any reform leg-
trying "to impose their religious
islation that does not explicitly ex-
views about contraception and
clude elective abortion" from a
abortion on the rest of us," said
health benefits pacakge.
James Wagoner, vice president of
At least one lawmaker who
the National Abortion and Repro-
signed the Volkmer letter said yes-
ductive Rights League.
terday his signature should not be
seen as a final position.
Patrice Hill and Karen Riley
contributed to this report.
WASHINGTON AND THE WORLD
Abortion: Health debate divider
Bishops put
Doctors' support dwindles
Congress
A new survey finds that a
the Clinton plan to use 1
on notice
majority of practicing physi-
ket forces to help drive
cians in the USA don't like
down costs and make cover-
President Clinton's health-
age affordable.
By Judi Hasson
reform proposals.
The Times survey found
USA TODAY
A survey by the Times
both doctors and their pe-
Mirror Center found that
tients are worried about
Roman Catholic bishops put
49% of doctors opposed
how the changes now being
Congress on notice Wednesday
Clinton's plan and only 18%
debated in Washington
they will fight any health-re-
favored IL a sharp drop
would affect them.
form plan that includes abor-
from last year.
Two out of three doctors
tion coverage.
A survey by the same
expect their incomes to de-
The bishops, at a Washington
group in April 1993 found
cline in the next five years.
news conference, said they
that 58% of the doctors had
One in four said their in-
have collected 5 million cards
By
Mark
a favorable opinion of man-
comes already have
in a church drive from people
CHURCH DRIVE: Bishop James McHugh, flanked by Bishop
aged competition, part of
dropped.
who say they have contacted
John Ricard and Sister Carol Keehan, share survey results.
their lawmakers to support
knocking abortion out of a ba-
reform debate when It hits the
And they also object to plans
"Abortion mandates are op-
crats and Republicans,
by
sic package of benefits.
House and Senate floors in late
to include a "conscience
posed by the American people.
Reps. Jim Cooper, D-Tenn,
But 72 House members, who
July and early August
clause" allowing doctors and
They will force millions of em-
and Fred Grandy, R-Jowa,
support abortion in a basic
President Clinton "plans on
hospitals to opt out of perform-
ployers, churches and individ-
agreed to send a letter to House
benefits package, signaled they
fighting" for abortion cover-
ing abortions.
uals to subsidize abortion in vi-
leaders demanding a biparti-
would fight back and possibly
age, said White House spokes-
"We cannot compromise on
olation of their consciences."
san health-reform plan that did
withhold their votes for health
woman Lorrie McHugh.
this Abortion must be exclud-
the bishops said in a letter to
not include a requirement that
reform if abortion is left out.
Although bills from four con-
ed," said Bishop James Mc.
members of Congress.
employers provide insurance
"To those who say there will
gressional committees provide
Hugh, a member of the bish-
Senate Majority Leader
to their workers.
be a battle if you put it in. we
abortion coverage, 35 Demo-
ops anti-abortion committee.
George Mitchell, D-Maine,
"I'm still looking for a Re-
just say there will be a battle if
cratic members warned lead-
The bishops said their poll
meeting with Sens. Daniel Pat-
publican who supports man-
you take it out" said Rep. Nita
ers last month they would not
finds most people support
rick Moynihan, D-N.Y., and
dates," said Cooper, who is
Lowey. D-N.Y., among mem-
vote for a health bill that re-
health insurance coverage for
Edward Kennedy, D-Mass., to
backing a proposal that
bers who signed a letter to
quires abortion coverage.
all but would oppose bills that
shape a compromise bill, said
competition in the market-
House Speaker Thomas Foley,
The bishops, the church's
include abortion.
be recognized the depth of
place to drive down prices.
D-Wash., staking out support
top leaders, said they object to
A separate poll Wednesday,
Catholics feeling on abortion,
"People need to look at the
for abortion coverage.
being forced to buy insurance
from the Times Mirror Center,
but said their view was one of
handwriting on the wall We
The issue is expected to be
that includes abortions and to
found people against including
many that would be weighed.
can pass a historic health re-
one of the most hotly contested
have taxpayer money being
abortions in a basic benefit
Also Wednesday, about two
form bill without employer
parts of the upcoming health
used to subsidize it.
package by a 68-26 margin.
dozen moderate House Demo-
mandates."
'Big Brother' warning sounds again
Critics fear 'evil'
in national ID cards
California governor hopes to close the door to illegals
There are about 3.38 million
By Maria Puente
illegal immigrants in the USA.
USA TODAY
Most are from Mexico, followed
by El Salvador, Guatemala,
Identity cards are under consider-
Canada, Poland and the
ation again as an answer to illegal immi-
Philippines. Most illegal
gration problems, but critics say they
immigrants settle in one of
would be an Orwellian nightmare.
seven states, with more than
The Commission on Immigration Re-
40% living in California. States
form. a bipartisan group created by Con-
with the most illegal immigrants:
gress, is expected to propose that every
citizen and legal immigrant get a Social
State
Number
Security-type identity card so that em-
California
1,441,000
ployers can verify work eligibility
New York
449,000
through a national database.
Texas
357,000
"The implications of this are stagger-
Florida
322,000
ing." says Marc Rotenberg director of
Minois
176,000
the Electronic Privacy Information Cen-
New Jersey
116,000
ter. "It becomes a way to monitor peo-
Arizona
57,000
pie, like an internal passport"
Other states
461,000
By
Grace
Saenz
"It's the consensus view at this point,"
ID ADVOCATE: California Gov. Pete Wilson is a national ID card supporter. 'If (iliega'
says Dan Stein, head of the Federation
Source Immigration and Naturalization
Service estimates of 1992 data. the most
immigrants) have to produce proof of their legal presence and cannot do so, they wi
for Immigration Reform, which favors
recent available
be denied employment, and if they know that they won't come (here).
reducing immigration.
"Down the line it could turn out to be
benign or it could be Orwellian, but we
Republican who's made immigration an
omist at the libertarian Cato Institute
people who look or sound foreign will be
just can't tell and no one is monitoring
issue in his re-election bid, wants his
think tank "This is a fundamental inva-
forced to carry the cards at all time-
implications," says Lance Hoffman, a
state to be the testing ground.
sion of privacy rights."
"The Social Security and immigrati
George Washington University professor
"If (illegal immigrants) have to pro-
"It won't work, it will cost billions, it
databases are notoriously flawed an
who studies privacy and security issues.
duce proof of their legal presence and
won't solve the problems. and it will
filled with inaccuracies." says Cella
The concept has been around for
cannot do so, they will be denied em-
cause new forms of discrimination."
noz, a La Raza analyst.
years, but more in Congress are embrac-
ployment, and if they know that, they
says Lucas Guttentag of the American
A similar outcry greeted Social See.
ing it in the face of public resentment of
won't come (bere)," Wilson says.
Civil Liberties Union.
rity cards in the 1930s. though the
illegal immigrants and the failure of
Critics include immigrant, civil-rights
Wilson says he's not worried:
bers weren't to be used for other P.
aws against hiring illegal workers.
and privacy advocates, plus liberals,
"We have already given up a certain
poses Today. SSNs are used on drive
Last year a national poll showed that
conservatives and libertarians worried
amount of privacy, but I don't see this as
licenses and employee IDs
53% of the public opposes ID cards for
about government knowing too much.
a further intrusion."
"Look at history and see the abuse
immigration. while 39% support them.
"People aren't thinking about the po-
The National Conference of La Raza,
they used SSNs to round up the Japane
Still, California Gov. Pete Wilson, a
tential for evil," says Steve Moore, econ-
a Hispanic civil rights group. fears that
during World War II." Moore says
THURSDAY, JULY 14. 1994 USA TODAY
Costs
stive director of the Business
Ith
Care
Action Group, a coalition of major em-
Are ncreasing
ployers, said a lower cost trend is ina-
ble only if health plans truly reduce of
health-care services. "Premiums alone
At a Low Rate
don't tell the whole story," he said. If plans
are bidding aggressively to win market
share, but fail, for instance, to reduce
excess hospital capacity, costs will inevita-
Studies Show Slowest Pace
bly rise again, he maintained.
Peter Reilly, an actuary at Milliman &
In 20 Years; Some Say
Robertson, maintained that increased
market penetration of health maintenance
Trend May Not Last
organizations and other similar market
forces have done little to stem the tide of
By RON WINSLOW
health costs. Aneconomic model he and his
Staff Reporter of THE WALL STREET JOURNAL
colleague John Cookson developed shows
Medical costs in the U.S. are rising at
that a decline in real national income
the lowest rate in two decades, new
during the recession in the early 1990s is
reports indicate, another sign that the
the major driver in moderating health
health-care industry is managing to bring
costs. They maintain that there is a
expenses under control.
three-to-four-year lag between changes in
Milliman & Robertson Inc., a consult-
income levels and similar changes in
ant and actuarial firm based in Radnor,
health-care spending. If that's the case,
Pa., said health costs for the 12 months
Mr. Reilly says a renewed dose of health-
ending last March rose just 2.5%, the
care inflation looms, since incomes have
lowest level in the 20 years it has tracked
improved since the recession.
such expenditures.
Many employers maintain that the
ABR Information Services Inc., Clear-
growing power of purchasers is driving
water. Fla., said group health-insurance
both a sharp drop in health-cost growth
trates and a restructuring of the system.
Cancer-Care Accord
"There's incredible competition out there
Salick Health Care, in an unprecedented
in most markets," said Helen Darling,
arrangement, agreed to provide compre-
manager of health-care strategy and pro-
bensive cancer care at a fixed price for
grams at Xerox Corp., Stamford, Conn.,
nearly 100,000 members of a Miami-
which offers a total of 204 health plans to its
based HMO. Article on page B3.
employees in the U.S.
. Baxter International forges a series of
Employer demands for quality im-
novel hospital-supply contracts, B3.
provement and cost reductions have,
premiums it tracks in administering cer-
among other things. helped prompt a con-
tain benefits for 12,000 employers have
solidation and reorganization of the
been essentially flat since the beginning of
health-care system. But SO much excess
the year and have risen less than 3.5%
capacity remains, she said, that continued
since January 1993.
consolidation holds the possibility "that
The findings are bolstered by several
the rate of increase in health costs will stay
large employers that say they are winning
low if not absolutely flat for several
significant reductions in premiums from
years."
some health plans as they negotiate rates
In any event, Xerox itself is reaping
for 1995.
the benefits of its purchasing power in
But some benefits consultants predict
markets across the U.S. Ms. Darling said
that health costs at most companies will
recent negotiations will mean an average
still be above the general annual inflation
increase in HMO premiums for Xerox
rate, currently about 3%. "We're seeing
of 1.2% in 1995 over current rates. In many
increases for next year of about 6% to
individual cases, in Florida and Washing-
10%," said Robert Eicher, principal at
ton, D.C., for instance, premiums will drop
Foster Higgins, a benefits consultant in
more than 10%.
New York.
Elsewhere. GTE Corp., expects 1995
Moreover, whether market forces or
rates for its managed health-care plans to
other factors are chiefly responsible for the
increase 2% after a 3.5% rise this year,
moderation in health costs is a matter of
said Dwight McNeil, manager of health-
fierce debate, as is whether the trend will
care information. And the Medica health
last. "It's a matter of some speculation as
plan in Minnesota reduced its family rates
to what happens next," said Richard Os-
for Minnesota government employees for
tuw, a principal in the Cleveland office of
1995 by 25% after a competitive bidding
benefits consultant Towers Perrin and the
process.
firm's chief actuary.
A recent Towers Perrin report said
growth in employer health-care costs this
year was about 6%, well below the 20-year
average. Mr. Ostuw believes that fear
of cost pressures from health-care reform
legislation is a major reason for the trend.
If Washington fails to act on health reform
and "that fear is removed. he argued, "it
will result in an uptick in health-care
inflation."
THE WALL STREET JOURNAL THURSDAY, JULY 14, 1994
At Fixed Price to Florida HMO Patients
By RHONDA L. RUNDLE
Staff Reporter of THE WALL STREET JOURNAL
Democratic Leaders Mull Compromises
Salick Health Care Inc., in an unprece-
dented arrangement, agreed to provide
comprehensive cancer care at a fixed price
On Health Plan to Ease Burden on Firms
for nearly 100,000 members of Physicians
voked
behind-the-scenes
skirmishes
Corp. of America, a Miami-based health
By DAVID ROGERS
among Democrats over how much ground
maintenance organization.
staff Reporter of THE WALL STREET JOURNAL
to give to a"bipartisan centrist faction that
"This is the first contract of its kind in
WASHINGTON Democratic congres-
is strong on the Senate Finance Commit-
the cancer field," said Bernard Salick,
sional leaders, scrambling to save health-
tee. The same bloc helped to kill any
chairman and chief executive officer. Sa-
care reform legislation this summer, are
employer mandate in the Finance Commit-
lick will receive a monthly fee per member
pursuing new compromises that would
tee bill. Mr.Mitchell plans to meet with
in exchange for providing the HMO's South
ease the burden on business.
those centrists today, but he also is aggres-
Florida patients with a full range of hospi-
The Senate leadership yesterday sig-
sively guarding the option of reintroducing
tal, outpatient, and home-care services.
naled a willingness to back away from
an employer mandate without their sup-
This fixed-price approach has so far
President Clinton's plan. It is discussing
port.
been used mainly in mental-health care,
an alternative that would require em-
When moderate Democrats drafted a
but medical experts believe it may be
ployers to pay only 50% of the cost of
letter to rally support for the centrist
expanded to other diseases. Some HMOs
insuring individual workers. Mr. Clinton's
position, Mr. Mitchell moved this week to
believe the method will help shift financial
plan would require employers to pay 80% of
discourage the effort. The majority leader
risk to other specialty medical organiza-
the cost of coverage for both workers and
made his feelings clear in a face-to-face
tions that try to deliver high-quality care at
their families.
exchange with Sen. Bob Kerrey (D., Neb.).
a low cost.
"Time for Adjustment'
one of the moderates. And prodded by the
Salick said it expects the contract to
Under the alternative, large subsidies
White House, AFL-CIO President Lane
increase its revenue by between $7 million
would be needed to fill the gap and make
Kirkland weighed in yesterday with his
and $10 million in the fiscal year ending
insurance affordable in the near term for
own letter urging senators not to "prema-
Aug. 31, 1995. The Los Angeles-based
poor and working-class families with chil-
turely form alliances."
company reported revenue of $116 million
dren. Over time, the employer share
One of the immense problems for the
in fiscal year 1993. The three-year con-
could be expanded. But the hybrid plan.
administration is that its most powerful
tract, initially covering the HMO's pa-
one of several options under consideration,
adversaries on health-care reform can't
tients in South Florida, could be expanded
is an effort to reach out to moderates in
agree themselves on what direction to
in later years to cover all of its 319,000
both parties who want a more voluntary,
take, making it very difficult to reach
patients in the state.
albeit heavily subsidized, approach to ex-
any compromise.
Neil Berman, a PCA vice president,
panding coverage.
By beginning so aggressively last year,
said the HMO's motivation was to improve
Senate Majority Leader George Mitch-
the White House made even the most
patient care, rather than to reduce costs.
ell (D., Maine) raised the alternative with
influential lobbies feel threatened. They in
"When we look at the specialized care and
Senate Finance Committee Democrats at a
turn have felt free to lash out at the
expertise that Salick can bring, that's why
meeting yesterday. Senate Labor and Hu-
president-and one another-with a "do-
we doing it." The HMO's adult members
man Resources Committee Chairman Ed-
or-die" fervor that has left lawmakers
in the South Florida area, as well as its
ward Kennedy (D., Mass.), who supports
nervous about going too far.
primary-care doctors, will be notified of
Mr. Clinton's plan, was instrumental in
Two prominent examples are the insur-
the new arrangement this week, Mr.
developing the new approach. signaling
ance and small-business lobbies, which
Berman said. PCA has a total of 482,000
that Democratic liberals may be willing to
have proven a devastating combination.
members in Florida, Texas, and Georgia.
accept it.
but have conflicting interests on very basic
About 260 of the HMO's South Florida
Within the House, Majority Leader
questions such as the employer mandate or
THE WALL STREET JOURNAL THURSDAY, JULY 14, 1994
members are currently receiving cancer
Richard Gephardt (D., Mo.) remains com-
cost-containment.
treatment. The transition of their care to
mitted to the concept of the so-called
High-profile television ads by the
Salick will be handled on a case-by-case
employer mandate. But to win support, be
Health Insurance Association of America
basis. Mr. Berman said. Some patients are
is discussing a more phased-in approach
already receiving care through oncologists
that would give business more time to
have raised that group's visibility while
affiliated with Salick's network. which will
bloodying the White House's initial reform
be expanded in coming months. Starting
adjust than the president's plan.
plan. Moving in for the kill, the National
next week. patients diagnosed with cancer
A bill reported last month by the House
Federation for Independent Business has
will be referred to Salick, Mr. Berman
Ways and Means Committee would impose
waged a fierce grass-roots campaign re-
said.
an employer mandate in two steps, first for
flecting its own ideological - and eco-
large companies in 1996 and then for those
nomic-opposition to any requirement that
Other HMOs, upon learning of the
with 100 or fewer workers in 1998. Mr.
businesses help pay for their employees'
contract yesterday. were intrigued that it
Gephardt is open to delaying these dates
involved cancer treatment, a field in which
coverage.
further. He said be also would consider
practitioners have a tradition of trying
phasing in the basic benefit package to
The leaderships of both groups share a
experimental therapies. The Salick-PCA
ease the transition for business.
strong Republican coloring. But the insur-
agreement will accelerate discussions
Mr. Gephardt made his remarks in an
ance group supports the very employer
"about what treatments are proven and
interview earlier this week.
mandate opposed by NFIB. "We consider
which aren't," said Lee N. Newcomer,
HIAA to be part of the problem. What
national medical director at United
Tuesday night, the majority leader
the insurance industry has done to the
HealthCare Corp., Minneapolis.
joined former colleagues from the Ways
small-business community has led to this
and Means Committee - including Chair-
debate," said John Motley, a senior lobby-
Dr. Salick said his company has spent
man Sam Gibbons (D., Fla.) for dinner at
ist for the NFIB.
two years preparing detailed oncology
the home of Rep. Fortney "Pete" Stark
practice guidelines that would specify. for
Still, the opposition from the two groups
(D., Cal.). Mr. Stark, chairman of the
instance, when a breast-cancer patient is a
has worked to drive the debate toward the
Ways and Means health subcommittee, is
candidate for a bone-marrow transplant.
lowest common denominator of what will
These guidelines are intended, in part, to
reluctant to scale back the benefits pack-
pass as "reform." This could be a package
age. But Senate moderates already have
assuage critics who charge that providers
of moderate insurance reforms and some
moved in that direction, proposing a
are induced to withhold needed care when
plan that would begin with only cata-
subsidies to expand coverage for the poor
their payment is fixed in advance.
or finance popular initiatives such as com-
strophic-type coverage and then phase in
munity health centers or aid to pregnant
In addition, Salick's financial risk in
more protection over five years.
women.
the PCA contract is limited. Some of the
Strong Grip on GOP
costliest procedures. including bone-mar-
Rep. Jim Cooper (D., Tenn.). an early
The scramble now comes in the face of
row transplants. would be paid by PCA on
sponsor of a more ambitious business-
an individual basis and not included in the
still severe opposition to any mandate.
backed health-reform plan, has stepped
fixed-cost contract, Dr. Salick said.
"The votes aren't there, employer man-
back into the debate. moving right in
dates are dead," said Rep. Charles Sten-
alliance with conservative Democrats and
The executive hopes the PCA contract
will be the first of many like it that Salick
holm (D., Texas), following a meeting of
Republicans who favor this approach.
will sign soon. "We would hope over the
House conservatives. And no less than
After a meeting yesterday, he began circu-
Senate Budget Committee Chairman
next year to cover into the range of one
lating a letter to put pressure on the
million lives. That projected out would
James Sasser (D., Tenn.). himself a candi-
leadership to allow an up-or-down vote
double the revenue of our company" over
date to replace Mr. Mitchell next year.
next month on a bipartisan alternative
current levels. Dr. Salick said.
said, "It will be very difficult to support an
that would include neither mandates nor
employer mandate."
price controls.
While dependent on moderate Republi-
"He has to move right to get the votes,"
cans, the White House fears that busi-
said Mr. Motley of Mr. Cooper's renewed
ness's strong grip on the GOP will under-
role. "He has to go right or he can't go
cut any effort to reach a compromise on the
anywhere."
issue. In recent days, this fear has pro-
Please Turn to Page A4, Column 3
REP.
VID E.
OR
LUCIAN PERKINS-THE WASHINGTON PO:
bishops' stance could have impact From left, Democratic Sens. Moynihan, Mitchell and Kennedy confer on health care reform legislation in the Capitol.
Abortion Issue Divides Health Care Support
Both Sides Threaten to Withhold Backing Unless Benefits Provisions Meet Their Demands
By David S. Broder
equal treatment with the version of
ton's goal of universal coverage.
(D-Ga.) and Michael Bilarakis (R-
and Kevin Merida
the Clinton plan the House Demo-
House Democratic Whip David E.
Fla.).
cratic leaders are writing and one
Bonior (D-Mich.), who is antiabor-
Washington Post Staff Writers
Cooper said the caucus agreed to
sponsored by advocates of a single-
tion himself. said the bishops' oppo-
"send a letter to the leadership in-
Backers of the Clinton administra-
payer, Canadian-style plan.
sition could have an impact on 35 to
sisting that a bipartisan alternative
tion health plan confronted threats
If the moderates are able to come
40 House Democrats.
(to the Clinton-backed bill) be con-
yesterday from both sides of the abor-
up with a compromise it could com-
The bishops plan to back their po-
sidered on the floor" and formed a
-tion issue that they may withhold
plicate the already chancy prospect
sition with exhortations to church-
smaller group, including the four
Otheir votes unless the benefits pack-
of holding 218 Democratic votes to
goers in their 25,000 parishes to
lead sponsors, to attempt to draft
age in the bill meets their demands.
pass a Clinton-like bill on the House
flood Congress with antiabortion
that alternative.
The abortion battle escalated dra-
floor next month.
messages, and they also plan an ad-
They heard two of the members of
Imatically as the nation's Roman Cath-
Three congressional committees
vertising campaign on the issue.
the bipartisan "gang of seven," which
Lolic bishops announced a national
have approved health bills in which
But abortion-rights supporters
steered the Senate Finance Commit-
.campaign to pressure Congress to
abortion is included in the standard
fought back at their own news con-
tee away from universal coverage and
Labandon abortion coverage. House
benefit package that insurers would
ference. "I resent that certain reli-
employer mandates, tell them they
:Democratic leaders said 35 or 40
be required to sell and that employ-
gious groups are entering this politi-
had to "set your own bottom line and
members otherwise supportive of the
ers would be compelled to purchase
cal fight in Congress," said Rep. Don
stick to it." Sens. John B. Breaux (D-
measure might vote no because of the
Edwards (D-Calif.). adding: "We
La.) and John Danforth (R-Mo.) were
for their workers. A fourth panel,
abortion question. But abortion rights
ought to fight on a different field."
quoted as saying that it was the ada-
the Senate Finance Committee, pro-
slawmakers countered with a list of 72
At the news conference, a letter,
mant position taken by their group
duced a bill that includes no employ-
House members who say the final bill
drafted by Reps. Peter DeFazio (D-
that overcame pressure from George
er-financed insurance requirement
Ore.) and Patricia Schroeder (D-
J. Mitchell (D-Maine) and other ad-
"must contain" such coverage.
and contains a provision allowing
Colo.) and signed by 70 other mem-
ministration allies on the committee.
Meantime, a group of moderate
businesses to exclude abortion cov-
bers, was released. Addressed to
Forging bipartisan legislation may
House Democrats and Republicans
erage from insurance they buy vol-
House Speaker Thomas S. Foley (D-
be much harder in the House, sever-
emerged from a caucus saying they
untarily for their employees.
Wash.), it said that "we feel com-
al of those who organized yester-
will insist on a floor vote for the
The line in the sand drawn by the
pelled to convey to you our strong
day's meeting acknowledged. "It's
-scaled-back alternative to the admin-
National Conference of Catholic
commitment that any health care re-
one thing to get seven senators to
astration's universal-coverage plan
Bishops was considered significant,
form package that comes before the
stick together," said Grandy. "It's
that they hope to craft. They want
given that the bishops support Clin-
House must contain coverage for
something else to get 218 House
contraceptive and abortion services
members in line."
if it is to gain our support."
The Cooper-Grandy bill relies on
TODAY IN CONGRESS
It was unclear how many of the 72
taxing health plans with rich benefits
signatories to the DeFazio-Schroe-
and a somewhat similar proposal is
SENATE
up Unlisted Trading Privileges Act of 1994,
der letter were willing to kill health
part of the Senate Finance Commit-
Meets at 8 a.m.
& Federal Communications Commission
reform over the abortion issue, but
tee bill. The House Republican lead-
Committees
Auth. Act of 1994. 2218 RHOB
DeFazio esimated that number at
ership has adamantly opposed any
Appropriations- a.m. VA, HUD &
Foreign Affairs-) a m. Asia & Pacific
more than 50.
broad-based taxes to finance health
indepoent agencies subc. mark up veterans
subc. & international security, international
affairs & housing approp. bill. 138 Dirksen
organizations & human rights subc. on
"That (issue) is not negotiable, it
care and none are included in the
Office Bidg
Tarwan. 2172 RHOB
is not discussionable, it is not com-
Rowland-Bilirakis measure, which
Appropriations-1: p.m. Mark up
pending legislation. S-128 Capitol
Foreign Affairs-1 p.m. Western
promisable," said Rep. Jerrold Nad-
offers a more limited benefit pack-
Energy & Natural Resources-9: a E
Hemisphere affairs subc. mark up. 2200
ler (D-N.Y.). "We're saying there's a
age and no clear timetable for insur-
Scientific & technological basis for radon
RHOB
hard line here. There will not be a
ing all the uninsured.
policy. 366 DOB
House Administration- P m.
health care bill without abortion cov-
Grandy said he planned to meet
Governmental Affairs-10 a.m. Mark up
Occupational Safety & Health Administration
pending legislation. 342 DOB
compliance H-328 Capitol
erage in it, period."
today with House Republican lead-
Indian Affairs-9.30 a.m. Native American
Judiciary-10 a m. Crime & criminal justice
Democratic congressional leaders
ers. but a senior GOP member who
Cultural Protection & Free Exercise of
SUDC. 226 RHOB
Religion Act of 1994 G-50
are anxiously seeking a compro-
attended yesterday's meeting pre-
Natural Resources-10 a E Insular &
Judiciary-9.30 a m. Closed Nomination
mise-but going about it gingerly.
dicted that it would be "hard to ge:
of Stephen G. Brever to be an associate
international aftairs subc. 1324 LHOB
The issue was broached in "carefully
bipartisan agreement in the House
justice of Supreme Court. 216 Hart Office
Natural Resources-10 a m. National
parks. forests & public lands subc 340
measured tones" at a House-Senate
Bidg
because so many Republicans feel
Rules & Administration-9 30 a m. Library
Cannon House Office Bidg
leadership meeting yesterday, ac-
their hands are tied on anything that
of Congress operations. 301 Russell Office
Post Office & Civil Service-10 a m.
cording to one source, indicating the
smacks of taxes."
Bidg
Postal operations & services subc. to amend
sensitive nature of the discussions.
Veterans Affairs-2 p.m. Mark up veterans
Whether a bipartisan alternative
U.S. Code. 311 CHOB
health care reform legislation 418 ROB
House Majority Leader Richard A.
would be given a shot on the House
Select Intelligence-2.30 p.m. Closed
Public Works & Transportation-9
Pending intelligence matters. 216 HOE
a.m. Water resources & environment subc.
Gephardt (D-Mo.) and Bonior have
floor is unclear. A spokeswoman for
HOUSE
2167 RHOB
been testing the abortion issue on
Gephardt was noncommittal, saying.
at 10
Science, Space & Technology-
about 100 moderate and conservative
"We'll have several alternatives on
Committees
mark up Risk Assessment Improvement Act
House members, who have expressed
the floor and we'll take a look a:
Agriculture-10.30 m. General farm
of 1994. 2318 RHOB.
a variety of concerns about the health
what they are proposing."
commodities subc. 1302 Longworth House
Science, Space & Technology-1:30 p.m.
Office Bidg
Energy subc. Dept. of Energy's Hydrogen
measure. Bonior has been floating the
Under House procedures, a bipar-
District of Columbia-10.3 . m. to
amend District of Columbia Government
Research & Development Program. 2318
idea of universal coverage that would
tisan alternative would have to be
& Governmental Reorganization Act. 1310
RHOB
provide employees with the option of
"made in order" as a floor amend-
LHOB
Science, Space & Technology-3 P E
choosing a plan with abortion services
ment by the leadership-controllec
Education & Labor-1) a Elementar,
Energy subc. Propane Education & Research
or one that excludes them.
Rules Committee. or it could not be
secondary & vocational education sub:
Act of 1993. 2318 RHOB
2175 Rayburn House Office Biog
Small Business-9 a m. mark up
Meantime, about three dozen rep-
considered. Cooper warned that The
Education & Labor-2 D E Labor
legislation. 2359 RHOB
resentatives and an equal number of
have blocking power if we need to
standards. occupational safety & health
Ways & Means-1 a m. Work &
staff members standing in for other
use it. but we hope to avoid it."
subc. to amend Fair Labor Standards Act
1938 2261 RHOB
Responsibility Act of 1994. Health & Human
members met at mid-afternoon to
The threat would be to unite Re-
Services Sec. Donna E. Shalaia 1100 LHOE
Energy & Commerce-10 a m. Health &
launch an effort to get a less ambi-
publicans and enough moderate and
environment subc. 2322 RHOE
Ways & Means-3 P m. walk-through to
tious plan than Clinton's to a House
conservative Democrats to "over-
Energy & Commerce- 10 a E Energ. &
consider draft legislation implementing
power subc. on Energy Policy Act of 1992
GATT agreement. 1100 LHOB
floor vote. The meeting included co-
turn the rule." forcing the leadership
2123 RHOE
Permanent Select Intelligence-1 D m
sponsors of two major bipartisan bills,
to allow other floor amendments if
Energy & Commerce-9 a E
physical searches within U.S. for Foreign
one drafted by Reps. Jim Cooper (D-
they wanted to get a vote on the
1
munications & finance SUDC. ma.
Intelligence Purposes. 2118 RHOB
Tenn.) and Fred Grandy (R-lowa) and
version of the Clinton plan now be
the other by Reps. J. Roy Rowland
ing crafted in Gepnardt's office.
THURSDAY. JULY 14. 1994 THE WASHINGTON POST
31
HOUSE DEMOCRATS
Administration would not allow a dis-
pute over abortion to kill chances for
SUPPORT ABORTION
passage of health care legislation,
Lorrie McHugh, spokeswoman for
the White House on health, said to-
care, a group of conservative and
IN HEALTH PLANS
night that the Administration stood
moderate Democrats in the House
by its original position that abortion
met to try to exert some influence on
should be covered "where a doctor
the coming floor fight over health
deemed it medically necessary or ap-
care legislation.
Among the organizers of the meet-
WARNING TO LEADERSHIP
propriate."
ing was Representative Jim Cooper,
"And there would also be a con-
the Tennessee Democrat who has
science clause to insure that doctors
long pushed a health care bill that
and health care institutions could
would seek to expand coverage and
Counter to Catholic Bishops
choose not to perform abortion for
reorganize the health marketplace
moral or religious reasons," Ms. Mc-
without putting new requirements on
as Both Sides Flex Muscles
Hugh said, adding, 'We'll fight for it."
businesses to pay for insurance.
A strategist for the House leader-
A Bipartisan Alternative
on a Crucial Issue
ship, speaking on condition of ano-
nymity, expressed optimism that a
Mr. Cooper, flanked by his bill's
solution could be found that might not
chief Republican co-sponsor, Repre-
satisfy either side but could at least
sentative Fred Grandy of Iowa, de-
By ROBIN TONER
prevent the health care bill from be-
clared that his group hoped to come
Specialio The New York Times
ing jettisoned over a single issue.
up with a bipartisan health care alter-
native that could be considered and
WASHINGTON, July 13 Escalat-
Separate Coverage Considered
debated on the floor. Mr. Cooper said
ing a long-simmering struggle, more
Among the possibilities discussed
that more than 100 members of the
than a fourth of the Democrats in the
on Capitol Hill is separating abortion
House had signed on to bipartisan,
House served notice on their leader-
coverage from the basic benefits
more incremental approaches to
ship today of their "strong commit-
package, making it optional but avail-
overhauling the health care system,
ment" to covering abortion services
able for a separate premium.
and maintained that they could be the
in any national health plan.
The four committees that produced
basis for an emerging center.
Their signal came in a letter to
versions of health care bills resisted
Mr. Grandy acknowledged that
attempts to eliminate abortion cover-
time was short for developing a new
Representative Thomas S. Foley of
age, but the Senate Finance Commit-
consensus on an alternative plan. but
Washington, the Speaker of the
tee expanded the conscience clause to
argued that since the Democratic
House. It was signed by about 70
allow employers, insurers or other
leadership had promised a floor vote
Democrats - the number was still
health plans to refuse to buy or pro-
to liberal lawmakers supporting a
inching up at the end of the day and
vide abortion coverage "if it is objec-
Canadian-style single-payer system,
it strongly suggested that their sup-
tionable on the basis of a moral belief
the leaders ought to give a hearing
port for a health care bill would de-
or religious conviction."
and a vote to a more incremental,
pend on whether it covers abortion.
At the moment, both sides are flex-
bipartisan approach.
The letter was a clear attempt to
ing their muscles. Several Democrats
who organized the abortion rights let-
In their closed meeting today, the
signal that the abortion rights camp,
House members were briefed by Sen-
which includes much of the party's
ter said at the news conference today
that they would vote against any
ator John C. Danforth, Republican of
liberal base, will not be taken for
health plan if it did not provide full
Missouri, and Senator John B.
granted in the coming struggle over
coverage of abortion. Among them
Breaux, Democrat of Louisiana, both
health care legislation.
was Representative Peter A. DeFa-
of whom played a key role on forging
The letter was circulated for sev-
zio, Democrat of Oregon, who assert-
a bipartisan approach in the Senate
eral days, but its release was timed to
ed: "Some of my colleagues threaten
Finance Committee.
coincide with a news conference to-
a fight if abortion remains in a final
After the meeting, which Mr. Coo-
day by the nation's Roman Catholic
health care plan. Iguarantee a fight if
bishops, at which they formally re-
it is taken out."
per said was -attended by about 40
members, the Tennessee Democrat
iterated their intention to fight the
But the letter itself, which was also
said the members had decided to
inclusion of abortion in the basic ben-
signed by at least five Republicans,
form a working group to try to come
was more carefully worded: "We feel
efit package guaranteed in any health
up with a bipartisan alternative, and
compelled to convey to you our strong
care law.
commitment that any health care re-
had to send a letter to the leadership
This struggle was always expected
form package that comes before the
seeking a vote on it.
to be an important part of the end
House must contain coverage for con-
"There's a remarkably strong and
game of health care legislation, and
traceptive and abortion services if it
widely held feeling that a bipartisan
today's dueling ultimatums came as
is to gain our support."
alternative needs to be considered on
no surprise to Democratic strategists
Second-Class Citizenship
the floor," Mr. Cooper said. "I think
trying to piece together a majority
the center is beginning to form in this
Representative Patricia Schroe-
for a health care bill.
debate."
der, a Colorado Democrat, was one of
He suggested that the Senate Fi-
"We've been working with and lis-
several members who argued today
nance Committee's bill was a useful
tening to members on both sides of
that dropping abortion coverage from
starting point. Critics of that bill con-
this issue to find an acceptable solu-
the basic package would relegate
tend that it fails to pay for its promise
tion for months now," said Laura
women to second-class citizenship.
of expanded coverage.
Nichols, press secretary for Repre-
"Universal means universal," she
The bill also falls short of President
sentative Richard A. Gephardt of
said. "Doesn't universal include
Clinton's goal of universal coverage,
Missouri. the House majority leader.
women?"
and seeks to contain costs and expand
Supporters of abortion rights also
"This IS an issue that clearly has to
coverage by such measures as new
argued that most private plans al-
be dealt with before we can get a bill
regulations of the insurance industry,
ready provide abortion coverage. But
passed."
subsidies for low-income people and
Medicaid, which provides health care
the creation of new market mecha-
Although Hillary Rodham Clinton
for the poor and is financed by the
nisms, such as insurance purchasing
hinted in a speech last month that the
states and the Federal Government,
cooperatives.
has long had restrictions on abortion
Continued on Page A16. Column 4
coverage despite efforts by abortion
rights groups to eliminate them.
In other developments on health
THE NEW YORK TIMES, THURSDAY, JULY 14, 1994
3
Drive Is Opened to Fight Cuts in Medicare
By ROBERT PEAR
patients admitted to hospitals, down
Special 10 The New York Times
"In its quest for univer-
sharply from 95 cents at present.
WASHINGTON, July 13 - Hospital
"Losses of this size cannot be made
lobbyists began today what they de-
sal coverage, Congress
up through increased efficiency,"
scribed as an all-out fight to prevent
looks to Medicare as a
said Mr. Davidson of the hospital
Congress from making the kind of
association
large cuts in the growth of Medicare
huge source of money, a
Clinton Administration officials
that several committees have pro-
bottomless well."
and many Democrats in Congress-
posed as a way to finance health
say hospitals should be able to absorb
coverage for people who are unin-
RICHARD J. DAVIDSON
cutbacks in Medicare because people
sured.
AMerican Hospital Association
who are now uninsured will have cov-
Hospitals have generally supported
erage in the future and can therefore
President Clinton's effort to guaran-
pay their hospital bills.
tee health insurance for all Ameri-
Carmela S. Dyer, a vice president
cans, and they have endorsed many
of the American Hospital Association,
of his specific proposals to redesign
in their own self-interest. This bill is a
acknowledged that universal cover-
the health care system.
good deal for hospitals that are well-
age would generate new revenue for
But leaders of the American Hospi-
managed. It's not too good a deal for
hospitals. But, she said, the care pro-
tal Association, the main lobby for the
hospitals that want to make a huge
vided free to people who are unin-
industry, said today that several Con-
profit off sick people."
sured is much less significant than
gressional panels, particularly the
the proposed cutbacks in the Medi-
Looking for $110 Billion
House Ways and Means Committee,
care program, which accounts for 40
had gone too far in tapping Medicare
"The Ways and Means Committee
percent of hospital revenue.
as a source of money to pay for new
would slice $110 billion, or 10 percent,
Moreover, she said, in the future, it
benefits and new coverage.
from projected Medicare spending
will be difficult for hospitals to offset
Medicare finances health care for
over five years. Nearly two-thirds of
Medicare's underpayments by in-
36 million elderly and disabled peo-
the savings would come from Medi-
creasing charges to private patients,
ple. The cost to the Government is
care payments to hospitals. Presi-
as they have done in the past.
$160 billion this year.
dent Clinton proposed Medicare sav-
"Market forces are already reduc-
ings of $103 billion, including $70 bil-
ing our ability to shift costs," she
Mobilizing Hospital Workers
lion from hospitals. The Senate Fi-
said, and the Ways and Means Com-
The lobbyists said they would mo-
nance Committee bill would cut about
mittee bill would virtually eliminate
bilize hospital employees and trus-
half that amount.
such cost-shifting because it would
tees across the country, urging mem-
The House bill would set annual
impose stringent new constraints on
bers of Congress to spare Medicare
limits on Medicare spending. and it
private health spending.
and find other sources of revenue. In
would gradually slow the growth of
In the debate over health costs,
many Congressional districts, hospi-
the program, so that after four or five
hospitals have generally avoided the
tals are among the largest employ-
years Medicare would not be allowed
wrath of White House officials and
ers.
to grow any faster than the economy
members of Congress, who were
Richard J. Davidson, president of
as a whole.
more likely to criticize insurance
the American Hospital Association,
Despite strenuous efforts by Con-
companies and drug manufacturers.
said: "In its quest for universal COV-
gress to rein in medical costs, limit-
But if hospital lobbyists continue to
erage, Congress looks to Medicare as
ing doctors' fees and payments to
mobilize their forces at the local lev-
a huge source of money, a bottomless
hospitals for specific procedures,
el, they will immensely complicate
well. The Medicare cuts in the Ways
Medicare now grows more than twice
the work of President Clinton and his
and Committee bill are a farce. If
as fast as the economy. Part of the
allies in Congress, who want to
Congress is serious enough to make a
reason is that medical prices have
squeeze large sums of money from
commitment to assure universal COV-
been rising rapidly, and the type of
Medicare.
erage, it should be serious enough to
care provided to elderly patients is
make the tough choices to pay for it.
more complex than it was just a few
"Members of Congress ought to
years ago.
quit kidding themselves. You cannot
The Ways and Means Committee
Blockbuster's Park
finance health care reform on the
bill sets Medicare spending limits for
backs of hospitals and doctors who
10 separate categories of services.
Clears a Hurdle
serve the elderly, or else you will
Thomas P. Nickels, a lobbyist for the
harm the quality of care."
hospital association, said these limits
Representative Pete Stark, the
would perpetuate recent trends.
MIAMI, July 13 (Reuters) - De-
chief architect of the Ways and
Services that have been growing
spite protests from environmental-
Means Committee bill, rejected these
fast in recent years, like home health
ists, H. Wayne Huizenga, chairman of
complaints. "Hospitals," he said,
care and nursing home care, would
Blockbuster Entertainment, won per-
"have always looked at Medicare as
get a bigger and bigger share of
mission today from two Florida coun-
a bottomless pit to pay them.
Medicare spending, he said, while
ties to levy taxes and use other quasi-
"I'm dumbfounded by the hospi-
services like hospital care, which has
governmental powers to build a giant
tals' terribly narrow and parochial
been growing slowly, would get a
theme park in South Florida.
attitude," said Mr. Stark, a California
dwindling share of the total.
Mr. Huizenga plans a $1.4 billion
Democrat who 15 chairman of the
Hospital lobbyists are telling mem-
complex northwest of Miami with wa-
Ways and Means Subcommittee on
bers of Congress that under the Ways
ter sports, amusements, a movie stu-
Health "One would think they might
and Means Committee bill, Medicare
dio, a golf course, a hockey arena for
have some interest in the health of
would pay only 67 cents for every
the Florida Panthers and a baseball
the community at large and not just
dollar of costs incurred in caring for
stadium for the Florida Marlins.
DIARY
Health Care Developments
-
YESTERDAY
Leaders of the House and Senate continued their efforts to combine
bills passed by committees into single measures for action on the
House and Senate floor, while lobbyists stepped forward to press
their views on two disputed issues: cuts in Medicare growth and
abortion.
CONGRESS
House Abortion gained new prominence as a divisive issue as scores
of Democrats signed a letter to Speaker Thomas S. Foley declaring
their "strong commitment" to covering abortion in health legislation
Their letter was timed to coincide with the announcement today by
the nation's Roman Catholic bishops that they would mobilize church
members to fight any health legislation that required benefits
packages that included abortion coverage. Still, strategists for the
House leadership said they believed a solution could be found to
prevent legislation from stalling over the issue
Senate The majority leader. George J Mitchell, discussed the
THE NEW YORK TIMES, THURSDAY, JULY 14, 1994
legislation with the chairmen of two Senate committees that
approved versions of a health care bill. Senator Edward M. Kennedy,
chairman of the Labor and Human Resources Committee. and Daniel
Patrick Moyninan. chairman of the Finance Committee
12
The Washington Times
NATIO
Hill Democrats anti Stephens, too
By Steve Langdon
Kennedy demands investigation
people like Stephens (working for
CONGRESSIONAL QUARTERLY
the RTC] to provide some bal-
ance." he said.
White House aide George
down failed savings and loans. sell
conduct by House Ways and
Mr. Stephens is prohibited from
Stephanopoulos isn't the only one
off their assets and pay off deposi-
Means Chairman Dan Rostenkow-
commenting on RTC work but said
to "blow off steam" because of the
tors.
ski. Illinois Democrat Some saw
in an interview, "Whatever legal
decision of the Resolution Trust
The RTC this year retained Mr.
the Stephens protest as a thinly
matters I am working on would be
Corp. to hire former federal pros-
Stephens' law firm - Pillsbury:
veiled allegation that Mr Clinton
done with integrity and indepen-
ecutor Jay Stephens to work on
Madison & Sutro to work on civil
was trying to protect a crucial ad-
dence in a highly professional
Whitewater-Madison related in-
claims against the failed Madison
ministration ally from indictment.
manner."
vestigations.
Guaranty Savings and Loan Asso-
Rep. Stephen Neal. North Caro-
The RTC would only say, "We
Congressional Democrats are
ciation Madison was owned by
lina Democrat and a senior mem-
are not aware of any conflict in
crying foul. too. But like Mr. Steph-
James B McDougal. Bill and Hil-
ber of the House Banking Com-
what he is working on for the
anopoulos. they can't do anything
lary Rodham Clinton's partner in
mittee. said the RTC's decision to
RTC"
about it.
Whitewater Development Corp.
hire someone with Mr. Stephens'
Despite their ire over Mr. Ste.
Mr. Stephanopoulos, one of
Investigators are examining
background is "outrageous, al-
phens Whitewater-Madison role,
President Clinton's closet advis-
whether Madison funds were im-
most unbelievable."
most Democrats aren't about to
ers. got in hot water after he tele-
properly funneled into White-
Rep. Bruce Vento. Minnesota
call for his ouster.
phoned Joshua Steiner. chief of
water. thus contributing to the
Democrat and another Banking
But at least one Democrat
staff to Treasury Secretary Lloyd
S&L's collapse.
Committee member, said it is "a
wants an investigation into Mr. Ste-
Bentsen. on Feb. 25 to complain
Mr. Stephens served as U.S. at-
political conflict - a pretty obvi-
phens hiring. "It reeks of Repub-
about the RTC's hiring of Mr. Ste-
torney for the District of Columbia
ous one. It's a real blunder by the
lican cronyism. I think the com-
phens.
until Mr. Clinton essentially fired
firm and the RTC.
mittee should investigate how Jay
Both Mr. Steiner and Mr. Steph-
him. along with the 93 other
Several Democrats believe Mr.
Stephens got the job." said Rep.
anopoulos were summoned before
Republican-appointed U.S. attor-
Stephens has "a political ax to
Joseph Kennedy, Massachusetts
a federal grand jury investigating
neys. early last year Most went
grind" with Mr. Clinton. according
Democrat and Banking Commit-
the Whitewater-Madison affair to
quietly: but Mr Stephens com-
to Mr. Vento. 'He was the only one
tee member.
testify about the conversation
plained loudly. charging the "un-
that actually resisted" Mr. Clin-
The bright side for Democrats
There is no evidence that either
precedented" move could. "by de-
ton's request for the U.S. attorneys
Mr. Stephens hiring helps "punc-
Mr Steiner or his boss took any
sign or default." disrupt sensitive
resignations. he said.
ture the argument that we try-
action in response to the Stephan-
investigations.
But Rep. Toby Roth. Wisconsin
ing to cover something up." said
opoulos call.
At the time. Mr Stephens was
Republican and ranking minority
Rep Barney Frank. Massachu-
The RTC is an independent fed-
heading a very sensitive investiga-
member on the Banking Commit
setts Democrat. who also serves
eral agency formed in 1989 to shut
tion into reported financial mis-
tee. disagreed. "We need more
on the Banking Committee.
"Now all of a sudden in 1994
Arkansas capitalism
we are seeing an unprecedented
A Justice Department official
INSIDENTHE
outbreak of journalistic soul
recently took it upon himself to
searching and self-flagellation in
read Labor Secretary Robert
Reich's 1991 book. "The Work of
NAY
response to the reporting of the
Whitewater story. Why is this?"
Nations Preparing Ourselves for
21st Century Capitalism."
Era or error?
"There is one passage." the of.
By Icha MoC
At noon today on the Univer-
ficial writes Inside the Beltway:
sity of Maryland campus, a panel
"that I am having some difficulty
discussion will examine the cur-
with in the chapter 'The Problem
was issued to forest supervisors
rent and controversial "Political
Restated on page 244:
throughout the country: "requir-
Correctness (PC) Phenomenon."
And leaders of Eastern
ing a review of the RSNOD cod-
The agenda includes: What ex-
Europe. China. and Arkansas.
ing of all permanent employees."
actly is this thing we call PC?
among many other places. are
to be completed no later than
Does it represent a new epoch of
adapting to the ineluctable fact
April 2.
tolerance or does it pose a threat
that capitalists will come to their
"If an employee is coded as be-
to freedom of speech and expres-
jurisdictions not on an eleemosy-
ing of one particular race. yet
sion? Is PC a passing fad or does
nary impulse but only out of
you believe them to be of differ-
it represent a fundamental long-
greed: thus are officials in all
ent race. the Forest Civil Rights
term change in our society and
such locations seeking to make
Officer
is to personally con-
culture?
their environs as hospitably re-
tact the employee and inform
The panel discussion. we're
munerative as possible.
them. confidentially. that there
told. is sponsored by the univer-
"At first." says the official. "I
appears to be an error in the cod.
sity's Diversity Initiative. a year-
was taken aback by the combina-
ing of their race." directs the or-
long series of activities "explor-
tion of half a continent. and a
der signed by Leon Bennett. di-
ing and celebrating diversity and
country with what seems like
rector of personnel management.
multiculturalism" at Maryland.
half the people in the world. and
and Anne M Boeder. director of
Sounds to us like a PC initia-
an American state that IS none of
civil rights
tive
those
Did Reich perhaps con-
"The same procedure is to be
fuse some of the local greedy
used for questionable disability
Too much to count
capitalists in Arkansas with the
and sex codes," the order states
So you thought the national
outsiders'
adding that "since compliance
debt totaled only $4.9 trillion'
Frankly I'm left at the doct
with any reques: to change the
Think again. says National Tax-
out curious how Reich knew
Labor Secretary Robert Reichs
RSNOD data IS strictly voluntary
payers Union Foundation director
19917
1991 book offers a futuristic view
on the part of the employee. we
Sid Taylor
of Arkansas-style greed
can never be assured of 100 per-
Today hardly in Wash
accuracy
What's the rush:
The unusual order warns each
the Treasury knows our real total
Was that Webster Hubbell
dreds of thousands of dollars and
supervisor that the written re-
national debt." Mr Taylor tells us
resigned his pos: as associate
use firm money to pay personal
port they submit for this project
Mr Taylor's own research. or:
turney general in mid-March
expenses
15 to be shredded as soon as the
the other hand. uncovers nearly
climbing out of a chauffeur-
review IS completed
$17 trillion in the debt ceiling.
driven sedan Friday afternoon
Color-blind society?
long-term commitments fiscal
outside the Metropolitan Club
Don't ask us
liabilities and contingencies of
Yes. says our source. who
During à recent review of em-
the federal government
added. "I thought that fellow had
ployee files Inside the Beltway
Dear Inside the Beltway
gone
has learned the U.S Forest Ser-
writes Ken Bashited of Spring-
Not on your life
It's doubtful the 46-year-old
vice office of personnel man-
field
Hubbell IS in a hurry to go
agement and office of rights
Spiro Agnew Richard Nixon
Asked whether she favors plac
where especially back to Little
questioned accuracy the
Richard Allen Anne Burford
ing a so-called "Twinkie tax on
Rock where investigators are
race sex and dis-
Earl Butz James Watt. Ed Meese
junk food to help pay for univer-
over Rose Law
RSNOD
the
North Rinald Reagan
sai health care Health and Hu-
Nancy Reagan Proert Bork
man Services Secretary Donna
Firm to determine the
Rose
John Tower George Bush. Neil
Shalaia quipped. No: with this
partner
Bush Clarence Tromas
president
The Washington
bc-whitewater-stephens - a2138
(ATTN: National editors)
Clash Over RTC Attorney Spawns Serious Whitewater Question (Washn)
By James Risen and Ronald J. Ostrow= (c) 1994, Los Angeles Times=
WASHINGTON At the time, career civil servants at the Resolution Trust
Corp. wanted most to avoid being second-guessed in their probe of a failed
Arkansas thrift with links to President Clinton and the Whitewater affair. So
it seemed natural to hire a former federal prosecutor, a Republican, who would
never be accused of taking a dive for the White House.
But what senior White House aides wanted most was to protect the president
from more of what they considered unfair attacks by blood-thirsty Republicans
and over-zealous journalists. So it seemed natural to react with anger when
they learned they were to be investigated by one of the most openly critical,
partisan lawyers in the capital.
From the collision of those two points of view has come one of the
potentially most serious elements in the tangle of questions and accusations
surrounding Bill and Hillary Clinton's Arkansas land deal.
The reaction of two senior White House aides to the appointment of former
U.S. Attorney Jay B. Stephens to handle the RTC investigation of Madison
Guaranty Savings and Loan is now part of special counsel Robert B. Fiske Jr. 's
expanding probe into the Clintons' Arkansas real estate investment and related
matters.
Fiske now is trying to determine whether Clinton adviser George
Stephanopoulos improperly attempted to reverse Stephens' hiring by putting
pressure on Treasury Department officials, who were temporarily overseeing
the RTC. In theory, that could ammount to obstruction of a federal agency
proceedinga felony under federal law.
Whatever the legal outcome of this phase of Fiske's investigation, the
story of the Stephens appointment and the Clinton administration's reaction to
it is a quintessential tale of the way politics and Washington's career
bureaucracy interact a story of the defensive fears and anxieties that
sometimes do more to drive events than aggressive plans or tactics.
RTC officials say they never anticipated that their decision to hire
Stephens would horrify senior White House aides and ultimately add another
layer of intrigue and controversy to the ongoing Whitewater affair.
The regulatory agency will not acknowledge publicly that it has reopened
its long-closed probe of Madison, the defunct Arkansas thrift at the center of
the Whitewater affair, or that Stephens has been retained to head the
investigation. But the sequence of events that led to the hiring, and the
reasoning on which it was based, were revealed in interviews with agency
sources who spoke on condition of anonymity.
Under pressure from Congress to move quickly on the Whitewater-related
investigation early this year, the RTC's legal services committee rapidly
approved a contract hiring Stephens and his San Franscisco-based law firm in
early February.
RTC officials saw in Stephens an experienced and zealous prosecutor with
strong credentials in S&L cases; he was already handling another case for the
RTC involving a failed thrift in Virginia. The White House, however, saw only
a political enemy.
While it may have been news to some RTC officials, the enmity between
Stephens and the Clinton White House was hardly a well-kept secret.
Stephens had been fired last year by Attorney General Janet Reno, along
with other Republican holdovers from the Bush administration, just as he was
trying to assemble a prosecution against a close Clinton ally, House Ways and
Means Committee Chairman Dan Rostenkowski, D.-Ill. After his firing, Stephens
made an abortive run for the Republican nomination for Senate in Virginia, and
made surprisingly detailed comments about the Rostenkowski probe, which is
still continuing.
Stephens suggested at the time that politics played a role in easing him
out. He was only 30 days away, he said, from making a critical decision with
Re
U.S.NEWS
note that he's a "regular guy"
who is very approachable.
key questions regarding Whitewater
Still, when they tipped their
will be whether Fiske is the right man
hat to Fiske at a gathering of
to sort through these questions or
his attorneys some years back
whether the White House and the
they gently teased him about
country-now finds much of its politi-
his Connecticut WASPishness
cal life being driven by someone who
with a takeoff on Edgar Allan
isn't up to the job. So far. Fiske has
Poe's "The Raven":
been criticized for everything from in-
terviewing witnesses too quickly-and
As my friends are all Aryan
without taking enough time to pre-
And settled into Darien
pare to being too vocal in insisting
/ know only finest peerage
that Congress abandon or at least de-
And no peasants out of steerage.
lay Whitewater hearings. (Lawmakers
will probably start thumping the gavel
If there is an organizing
at Whitewater hearings sometime next
principle that defines Fiske as
month.) Still, an examination of Fiske's
an attorney it is an almost
legal career and style suggest that he's
passionate calm. Former fed-
likely to do a commendable job, albeit
eral Judge Harold Tyler calls
one that could go on for some time be-
him "a judge's lawyer" be-
cause of his penchant for thoroughness
cause Fiske's style is short on
and running cases himself.
flamboyant gestures like
Fiske harks back to a more genteel
preachy sermons or fancy le-
age in American law. At 63, he has-
gal maneuvers that can annoy
with time off for stints in the Justice
judges. Instead, he relies on a
Department-been associated with just
steady onslaught of facts. It's
one law firm: New York's Davis, Polk &
a substance-over-style philos-
Wardwell. It is among the most blue-
ophy that Fiske learned from
blooded of the city's firms, and Fiske's
his mentor, Hazard Gillespie,
expertise is in one of the firm's special-
a major litigator at Davis, Polk when
real estate fraud. Fiske and his team of
ties-white-collar crime. Fiske himself
Fiske was an up-and-coming lawyer.
lawyers holed up in their hotel for nine
has a decidedly preppy pedigree- the
Straight arrow. That ethos was on
months, doing their own laundry down
private Pomfret School, Yale, a pen-
display in 1991 and 1992, when Fiske
the hall, and poring over details. Dur-
chant for sailing. Lawyers who have
defended David Brown, a land devel-
ing that time, Fiske became an author-
worked with him, though, are quick to
oper in Miami tried on accusations of
ity on the trial's growing transcript,
TRADING PLACES
Accounting for a $100K score
he morning after Hillary
scandals surrounding Bill and
Still, the White House says it
Rodham Clinton disclosed
Hillary Clinton.
was not a sweetheart deal be-
that she made $100,000 in less
That conclusion may be overly
cause Mrs. Clinton conducted
than a year on a $1,000 commod-
optimistic because questions re-
her own trades and was exposed
ities investment, her aides were
main about Mrs. Clinton's 16-
to considerable risk of losses if
worried about public outrage.
year-old commodities transac-
her investments bombed.
But no one called the White
tions. Among them:
. Was Mrs. Clinton aware that her
House switchboard to complain.
Were the Investments a form of
main broker, Robert "Red" Bone
Instead, there was a surge of
cronyism not available to everyday
of Refco Inc., had been penalized
phone calls expressing concern
folks? White House officials ad-
for his business practices? Bone
about an entirely different mat-
mit that Arkansas lawyer James
and Tyson Foods (where Bone
ter: People noticed that Mrs.
Blair, who represented Tyson
was vice president) had been ac-
Clinton had failed to wear a
Foods, advised Mrs. Clinton in
cused in 1970 of trying to rig the
safety helmet while bicycling
1978 on the transactions. At the
price of eggs. Under a legal set-
during her family's California
time, Bill Clinton was attorney
tlement reached in August
vacation last week. The first lady
general and the favorite in that
1977 a year before Mrs. Clin-
got the word and began wearing
fall's gubernatorial election.
ton's commodities venture be-
a multicolored hard hat while
hich he won. Tyson subse-
gan Bone was barred from fu-
pedaling around San Diego. But
quently benefited from deci-
sides NJ4 a larger point The
sions by Clinton's state govern.
Catching up. The Clintons seek
public cares very little about
ment. and Blair and the
R&R and start planning
hites ater and other quasi
Clintons remain close friends.
to dig ou: of their mess
"Bob had to become a nuclear engineer
for all practical purposes," says Henry
King, managing partner of Davis, Polk.
One interesting thing to watch in
coming months is Fiske's demand for
secrecy. Back in the 1970s, he made the
lawyers in the U.S. attorney's office
dealing with one sensitive case sign affi-
davits that they had not leaked informa-
tion. And when news reports recently
suggested that leaks were coming out of
his Little Rock operation, Fiske gave an
angry defense of his team, and most
doubted that the disclosures were com-
ing from anyone working for him.
More important will be clues about
when and where Fiske pursues indict-
ments. He is not likely to do so unless
he thinks he can win. As U.S. attorney
in New York, Fiske often displayed a
Clearing up. Deputy Treasury Secretary Roger Altman (far left) says he was not
good intuitive sense of which convic-
subject to improper interference by departing White House counsel Bernard
tions would hold up and which
Nussbaum (upper left) and top aides George Stephanopoulos and Harold Ickes.
wouldn't. He was also fearless about go-
ing after tough cases that other prose-
which eventually swelled to 26,000
night until 3 a.m. Brown was exonerat-
cutors had found hard to crack.
pages.
ed on 39 of the 40 counts against him,
Years from now, will Fiske's
Carey Dunne, who worked on the
and the remaining charge is being
Whitewater staff gather for reunions to
case, recalls that toward the end of the
appealed.
talk about the convictions of White
trial, disputes about long-ago testimony
In other cases as well, Fiske had an
House staffers in obstructing justice?
would arise in court: "Inevitably, Bob
uncanny capacity to immerse himself in
With Roger Altman lifting the pall over
would stand up in April and say, 'Most
technical detail. Among his biggest tri-
his colleagues, that seems increasingly
respectably, your honor, witness so and
umphs was successfully defending the
doubtful.
so said X back in October.' If Bob re-
manufacturing giant of Babcock & Wil-
membered it, it was accurate." While
cox, the company whose machinery was
BY MATTHEW COOPER AND DAVID
Fiske and his young associates waited
blamed for having caused the Three
BOWERMASTER WITH GLORIA BORGER
for the verdict, they shot pool one
Mile Island nuclear disaster in 1979.
AND GREG FERGUSON
DARRYL
tures trading for 30 days. Later,
sas's Rose Law Firm, where she
Administration sources say
Bone was accused by regulators
was a partner while her husband
she was pleased when White
of mingling his accounts and al-
was governor. For example, U.S.
House Chief of Staff Mack
locating profits to favored cli-
News has learned that the Rose
McLarty put Whitewater strate-
ents and was subsequently fined
firm was paid $101,630 by the
gy under the talented White
for "serious and repeated viola-
Washington-based National
House staff secretary, John Po-
tions of record-keeping func-
Center on Education and the
desta. Mrs. Clinton also wanted
tions, order entry procedures,
Economy in 1991 for an eight-
Cutler, a widely respected figure
margin requirements, and
month stint by Mrs. Clinton dur-
in Washington, to take a high-vis-
hedge procedures." But the
ing which she helped direct an
ibility role in defending the Clin-
White House says Mrs. Clinton
education-reform program. Mrs.
tons, which he has done.
knew nothing of the problems
Clinton was also a member of the
Perhaps the biggest lesson
and informed industry sources
center's board of trustees, which
Mrs. Clinton has learned from
say there is little chance there is
endorsed the contract. She re-
Whitewater, aides say, is that she
a paper trail that could tie her to
signed the day before Bill Clin-
must be more open about the is-
any questionable trading.
ton announced his presidential
sue. President Clinton's recent
Were the Clintons political hyp-
candidacy. A spokesman for the
press conference on Whitewater
ocrites? During the presidential
center had high praise for Mrs.
increased his job-approval rating
campaign, they attacked the
Clinton's work. Acting White
by 10 percentage points. "What
"greed" of the 1980s and por-
House legal counsel Lloyd Cut-
we've learned, and what Mrs.
trayed themselves as public
ler told U.S. News it was a "quite
Clinton has learned. is that dis-
servants ho were not interest-
conventional" arrangement for
closure isn't the worst thing in
in money Yet Mrs. Clinton
any law firm.
the world." says a senior admin-
hat might be seen
To counteract her image prob-
istration official.
scheme.
lems. Mrs. Clinton has been tak-
Clinton also brought
ing more interest in damage con-
BY KENNETH TW ALSH WITH
business to Arkan-
trol on her behalf.
GREG FERTURES
VERY
Leach Whitewater
hearings too narrow
Leach said he will respond to Gon-
By JANE NORMAN
zalez with a letter suggesting addi-
Or THE REGISTER'S WASHINGTON BUREAU
tional witnesses "as well as a modest
broadening of the probe" to at least
Washington, D.C. - Beginning
include contacts between Washing-
July 26, the House Banking Commit-
ton officials of the Resolution Trust
tee finally will hold hearings on
Corp. and RTC officials in Kansas
Whitewater - a development Rep.
City who investigated Madison.
Jim Leach of Iowa has been advocat-
ing for months.
Leach has alleged that improper
But Leach. the senior Republican
pressure was placed by Washington
on the committee, said in an inter-
RTC officials upon the Kansas City
view Tuesday that the hearings will
investigators to quash their Madison
be very narrow in scope, and likely
inquiry.
will touch on few of the questions he
"Clearly there is a very considered
has raised about the controversy.
intent to limit the scope" of the hear-
Leach said he does not know yet
ings, Leach said. "I have argued
whether he will be able to call any
from the very beginning this is not
witnesses for the hearings. Ques-
the world's largest issue. But you
tions he or other Republicans ask
have to put it behind, and the way
may be ruled out of order by the
you put it behind is have a
Democratic chairman of the commit-
full-blown public review through the
tee, who has been bitterly opposed to
Jim Leach
hearing process."
hearings.
Seeks more disclosure
"There is a decision by the leader-
Democrats "just pique curiosity"
ship of the House to hold a hearing
by resisting broader hearings, he
said.
on about 5 percent of the White-
tors. Both of these aspects of
water circumstance,' Leach said.
Whitewater are known as the
Leach and Gonzalez have been at
"The hearing that is now tenta-
"Washington phase" of an investige-
odds, with Leach fighting for greater
tively scheduled for July should not
tion by special counsel Robert Fiske.
disclosure of Whitewater informa-
be considered a benchmark kind of
Flake, who is expected to issue a
tion on the House floor and in the
hearing," he said. "It is basically a
report soon on that phase of his in-
federal courts. Gonzalez recently
quiry, also has been invited by Gon-
filed a complaint with the ethics
very preliminary side issue probe."
zalez to testify at the July hearings.
committee about Leach's ties to an
Banking Committee Chairman
Leach said this means the hearings
endowed chair at an Iowa college;
Henry Gonzalez. D-Texas, an-
will not examine "the heart of
the panel said Leach violated no
nounced Monday that the hearings
Whitewater and analogous circum-
House rules.
will focus on the removal of files
stances, which is everything that oc-
But Leach said he will not carry
from the office of Vince Foster, a
curred in Arkansas." Leach and his
any animosity into the hearings.
White House lawyer, soon after his
minority staff have been investigat-
death. Foster handled Whitewater
"I will proceed exactly on the
ing the failure of an Arkansas
facts. exactly with the greatest comi-
matters for President Clinton.
savings and loan, Madison Guaranty,
ty I can possibly muster." he said. "If
Also, Gonzalez said hearings will
and the ties between its owners and
the chairman wishes to respond in
examine contacts between adminis-
the president and his wife, Hillary
any way he wants, that's his right as
tration officials and banking regula-
Rodham Clinton.
a member of Congress."
ATTEMPT TO STRIP U.N. FUNDING
Lightfoot amendment on Haiti defeated
More Haltians are being picked up
by the Coast Guard as they flee their
By JANE NORMAN
homeland. The boat people have
Or THERECHETER'S WASHINGTON BUREAU
overwhelmed American officials and
the situation has led to speculation
Washington, D.C. - The House
that military intervention in Haiti
early Tuesday turned down.
may be used soon by the Clinton ad-
214-185, a move by Rep. Jim Ross
ministration to restore Aristide.
Lightfoot, R-Ia.,
Lightfoot asked that the House
to strip a $26 mil-
send back to committee a bill doling
lion U.S. contri-
out funds for operations of the Com-
bution to United
merce, State and Justice depart-
Nations oper-
ments. The bill included $25 million
ations in Halti.
budgeted as the U.S. share of U.N.
Lightfoot, $
peacekeeping operations in Haiti.
member of the
"Let's remove funds from this bill
foreign oper-
for Haitian peacekeeping now, and
ations subcom.
mittee of the
once the president shows us a plan
Lightlect
House Appropri-
and demonstrates the national inter-
ations Commit-
est, consider adding the money back
Opposes policy
tee, is opposed to
in," said Lightfoot.
U.S. involvement in Haiti
But Rep. Alan Mollohan, D-W.Va,
"The Clinton administration has
said the amendment was "patently
learned nothing from its nation-
unwise" because it would telegraph
building venture in Somalia, which
U.S. intentions to Haiti's military rul-
cost some of my constituents their
an "We should not
take options
lives," Lightfoot said on the floor.
away from the president as he deals
He said the stated goals of Presi-
with this matter, Mollohan said.
dent Clinton's policy on Haiti "do not
All of the Republicans in the Iowa
include any American exit strategy.'
delegation Jim Nussle, Jim Leach
The New York Times recently re-
and Fred Grandy - voted with
ported that the administration is
Lightfoot. Rep. Neal Smith, D-la.,
preparing creation of an internation-
voted against the amendment.
al peacekeeping force that would in-
volve several thousand American
troops, police and civilian contrac-
tors. The force would be authorized
if and W military leaders leave
Haiti and ousted president
Ber-
The Bes Moines Register
tr
Aristide is returned to office.
12'
The Washington Times
SUNDAY, JULY 10, 1994 *
CLAUDIA WINKLER
T
the most glaring defect of
the Whitewater hearings
Whitewater inquiry's political blinders
from Washington, deserves to be
heard, as does Miss Breslaw's con-
scheduled for later this
trary version.
month is that Democrats
Their meeting fell neatly within
have carefully tailored them to rule
the period of the improper White
out any serious airing of possible
named the Clintons as possible ben-
House-Treasury contacts, Septem-
White House pressure on bank
eficiaries of Madison funds.
ber 1993 through February 1994.
investigators.
Independent counsel Robert
The facts should be
It is safe to predict that all
Whether what was going on here
administration officials interrogat-
was illegal or merely unethical, the
Fiske did not pretend to lay this
exposed.
ed publicly about these exchanges
facts should be exposed.
matter to rest a week and a half ago
will say that only innocent inquiries
Sad to say, they won't be. The
when he pronounced the evidence
into the investigation's status
Democrats who control the House
"insufficient to establish" crimes.
occurred, however flagrant the
and Senate Banking committees
Mr. Fiske merely declined to try to
astonishing "more than 20" face to
appearances. That is why hearings
have insisted on the narrowest of
prove in court that White House
face meetings and telephone calls
should allow questioning of, for
hearings, over Republican objec-
and Treasury officials, conferring
between White House and Trea-
example, L. Jean Lewis and April
tions. Pitbulls for propriety when
on an investigation that touched
sury officials on the subject of the
Breslaw.
the subject was Neil Bush, they are
President and Mrs. Clinton, acted
Resolution Trust Corp.'s investiga-
A senior criminal investigator in
all patience and understanding
with corrupt intent.
tion of Madison Guaranty Savings
the RTC's Kansas City office, Mrs.
But Mr. Fiske also pointedly
& Loan. Madison was owned by the
Lewis says she was quite specifi-
refused to endorse the meetings as
Clintons' friend and business part-
cally pressured to come up with
(DEMOC
when it comes to questionable
actions by the Clinton administra-
tion. So much for congressional
proper and said he understood the
ner, Jim McDougal, and its failure
findings about Madison acceptable
oversight of friends.
Treasury's internal ethics inquiry
cost taxpayers an estimated $70
to the White House. Her account of
would go forward.
million. RTC investigators referred
her Feb. 2, 1994, meeting with Miss
As well it should. In all, the inde-
Madison to the Justice Department
Breslaw, a lawyer with the Federal
ONGRESSIONAL
Claudia Winkler is chief editori-
al writer for Scripps Howard News-
pendent counsel examined an
for criminal investigation and
Deposit Insurance Corp. sent out
papers.
Fiske
says no
O House
hearings
By Jerry Seper
THE WASHINGTON TIMES
Special counsel Robert B. Fiske
Jr., declaring that the major part
of his Whitewater-Madison inves-
tigation "is still in progress," yes-
terday declined an invitation to
testify before the House Banking
Committee at hearings on the first
FISKE
as potential witnesses, including
phase of his inquiry.
U.S. Park Police officials, former
The hearings are scheduled to
From pass Al
FBI Director William S. Sessions,
begin July 26.
and Clinton campaign advisers
"It would be inappropriate and
and the handling of Mr. Foster's
Betsey Wright, James Lyons and
would compromise my ability to
White House papers following his
Jack Palladino.
function effectively as an indepen-
death last July 20.
But he said his investigation
dent counsel if I were to appear
Mr. Fiske, who has concluded
could be compromised if several
before Congress to answer ques-
that Mr. Foster killed himself, has
other potential witnesses were
tions about my investigation while
completed most of the Washington
called, including regional RTC in-
the major part of it is still on-
phase and expects to end it shortly.
vestigators who first looked into
going," Mr. Fiske said in a letter to
Mr. Gonzalez, Texas Democrat,
the Whitewater-Madison affair
Banking Committee Chairman
said he was "deeply disappointed"
and several Justice Department
Rep. Henry B. Gonzalez.
by the Fiske decision. He said Mr.
officials who also were involved.
"Accordingly, I most respectful-
Fiske has a duty to assist the com-
These include L. Jean Lewis, the
ly decline your invitation to testify
mittee in its oversight responsibil-
senior RTC investigator in Kansas
at your hearing."
Ities and suggested Mr. Fiske re-
City who has emerged as a key
The hearings are limited to the
consider.
witness in the Whitewater-Madi-
so-called "Washington phase" of
"To the extent your work is com-
son affair; April Breslaw, an RTC
the Fiske investigation.
bleted and not subject to the
attorney suspected of trying to
This includes the death of White
(grand jury secrecy rule], I see no
block the Lewis probe; U.S. At-
House Deputy Counsel Vincent W.
reason why you should not be re-
torney Paula J. Casey in Little
Foster Jr., contacts between the
quired to discuss your findings,"
Rock, who first declined an RTC
White House and Treasury De-
Mr Gonzalez wrote in a return let-
criminal referral in the matter and
partment officials about an inves-
ter. "The committee is not asking
then recused herself; and Assis-
tigation of Madison Guaranty Sav-
you to discuss your ongoing probe,
tant U.S. Attorney Fletcher Jack-
ings and Loan Association and
but simply seeks an accounting for
son, who investigated the referral.
Whitewater Development Corp.,
the completed phase of your inves-
Also among those Mr. Fiske
tigation."
wishes not to testify at the initial
see FISKE, page A14
Mr. Gonzalez rejected an offer
hearings are former Associate At-
by Mr. Fiske for a "private meet-
torney General Webster L Hub-
ing" involving the chairman and
bell, who once represented the
the committee's ranking Republi-
government in a Madison-related
can, Rep. Jim Leach of Iowa, to
lawsuit; former Deputy Attorney
discuss the hearing topics.
General Philip C. Heymann, who
"I believe Mr. Fiske's thoughts
oversaw the initial phases of a Jus-
on the scope of the so-called
tice Department investigation of
"Washington phase,' which are crit-
Whitewater-Madi-son; and Justice
ical to the conduct of the hearings,
Department prosecutor Donald B.
should be presented in an open fo-
Mackay, who looked into accusa-
rum to the entire committee and
tions of financial fraud before the
the public," he said. "After all, I am
Fiske appointment.
only the chairman, I am not the
Mr. Fiske objected to the calling
committee."
of a confidential witness, who was
Mr. Gonzalez said Mr. Fiske
listed only as "CW" in the special
wants it "both ways."
counsel's June 30 report on the
"He wants to limit the scope and
Foster death, saying he had
then sidestep explaining his ac-
"agreed to keep his name confi-
tions," Mr. Gonzalez said. "I hope
dential." He said he did not object
Mr. Fiske will reconsider his de-
to most of the potential witnesses
cision and will appear before the
listed by Mr. Gonzalez, as long as
committee on July 26."
questions were limited to the
Mr. Fiske, in a separate letter to
Washington phase of his probe.
Mr. Gonzalez, outlined his views
White House officials who were
on a list of 45 potential witnesses
approved by Mr. Fiske include
who might be called by the chair-
Counsel Lloyd Cutler, outgoing
man to testify.
Chief of Staff Thomas F. "Mack"
He said he had no objection to
McLarty, former Counsel Bernard
the calling of 15 White House offi-
Nussbaum, Special Assistant
cials and a dozen others from the
Patsy Thomasson and Margaret A.
Treasury Department and the
"Maggie" Williams, first lady Hil,
Resolution Trust Corp (RTC),
lary Rodham Clinton's chief of
which initiated the inquiry into
staff.
suspected financial irregularities
Others approved to testify at the
involving Madison, which failed in
hearings include Treasury Secre-
1989 at a cost to taxpayers of $50
tary Lloyd Bentsen, Deputy Trea
million, and Whitewater, an Arkan-
sury Secretary Roger C. Altman
sas real estate venture involving
White House Communications Di
SATURDAY, JULY 9. 1994 The Washington Times
President Clinton, Madison's
rector Mark Gearan, Deputy
owner James B. McDougal, and
Chief of Staff Harold Ickes, senior
their wives.
adviser George Stephanopoulos
Mr. Fiske approved of calling
ior adviser Bruce Lindsay and
several regional RTC superv rs
Associate Counsel William Hi
and others listed by Mr. Gonzalez
K
edy III.
66
Fiske Refocuses Whitewater Probe
On Justice Dept. and S&L Case
Special Counsel Says 2 Clinton Appointees Are 'Potentially Involved'
By Susan Schmidt
close the Washington phase of Fiske's
ranking Republican, has released
Washington Post Staff Writer
investigation, but the letter yesterday
memos written by the lead Madison
indicated that be is interested in other
investigator, L. Jean Lewis, showing
Special counsel Robert B. Fiske
aspects of how Clinton administration
she believed officials in Washington
Jr. indicated yesterday that he is in-
officials handled the probe.
wanted to derail the Madison probe.
vestigating the way Justice Depart-
In the fall of 1992, RTC investiga-
Whitewater hearings are now slat-
ment officials handled a request for a
tors sent a criminal referral on Madi-
ed to begin July 26 in the House and
criminal investigation of Madison
son that mentioned the Clintons to the
by July 29 in the Senate. Both par-
Guaranty, an Arkansas savings and
U.S. attorney in Little Rock, at the
loan with ties to President Clinton
ties are hiring high-powered lawyers
time, a Republican appointee. No ac-
and Hillary Rodham Clinton.
to interview witnesses and pore over
tion was taken until Oct. 27, 1993,
thousands of documents turned over
Among those he said were "poten-
when Casey, the new U.S. attorney in
tially involved" in his investigation
Little Rock appointed by Clinton, re-
this week by the White House and
are Little Rock U.S. Attorney Paula
jected the request.
Treasury Department.
Casey, who said no to the Resolution
At the time, there was a second,
Gonzalez, who was reluctantly
Trust Corp.'s first request for a
more detailed RTC request for a crim-
drawn into hearings, this week indi-
criminal investigation of Madison,
inal investigation of Madison on Ca-
cated be intends to find out whether
and former associate attorney gen-
sey's desk. But Casey recused herself
the Bush White House had any role
eral Webster L. Hubbell, a Clinton
from considering the second request
in the early stages of the White-
confidant and Hillary Clinton's for-
after her action on the first request
water probe.
mer law partner.
was disclosed in the press.
Gonzalez invited former White
Fiske's disclosure was made in a
Madison was owned by James B.
House counsel C. Boyden Gray and
letter to House Banking and Urban
McDougal, the Clintons' partner in
two savings and loan regulators to
Affairs Committee Chairman Henry
the Whitewater real estate venture,
testify about what they knew about
B. Gonzalez (D-Tex.) in which Fiske
and Whitewater had an account there.
Madison and Whitewater. Gonzalez
said he is unwilling to appear at con-
Hubbell recused himself from the
wants to look into reports that the
gressional hearings on Whitewater
Madison investigation last November.
Office of Thrift Supervision initiated
and said the appearance of some wit-
His father-in-law was a Madison bor-
an investigation of the failed thrift in
nesses the committee planned to call
rower and insider, and his former law
1992. The OTS has the power to
would interfere with his investigation.
partner at the Rose Law Firm, Hillary
fine former S&L officials, but no ad-
Last week, Fiske announced he had
Clinton, represented the S&L for a
ministrative action resulted from its
completed a three-month grand jury
time before state regulators. He re-
probe.
probe of more than 20 contacts last
signed this spring amid allegations by
Fiske said he had no objection to
fall and winter-including meetings
former law partners that be had over-
those witnesses, nor to the Republi-
and phone calls-between White
billed clients, including the RTC.
cans' plans to call former Clinton
House and Treasury Department offi-
Fiske and the RTC inspector gen-
aide Betsey Wright or Jack Palladi-
cials on the subject of Whitewater.
eral are separately investigating
no, a private investigator employed
That inquiry did not involve the Jus-
Hubbell's billing and whether be had
tice Department. He said be found in-
by the campaign. Wright and Palladi-
a conflict of interest in representing
sufficient evidence to establish that
the RTC when it sued Madison's ac-
no have been involved in investigat-
"anyone in the White House or the
countants for malpractice.
ing potentially embarrassing epi-
Department of the Treasury acted
In a letter to Gonzalez yesterday,
sodes in Clinton's past.
with intent to corruptly influence an
Fiske said it would be "inappropriate
At the White House, a team of
RTC investigation."
and would compromise my ability to
lawyers under the direction of coun-
After months of debate and delay,
function effectively as an indepen-
sel Lloyd Cutler has been preparing
the two parties in Congress agreed
dent counsel if I were to appear be-
for the hearings by interviewing ev-
to hold hearings this summer that
fore Congress to answer questions
eryone Fiske took before the grand
would be limited to areas Fiske had
about my investigation while the ma-
jury to try to assemble the full story
finished investigating, including the
jor part of it is still going on."
of the contacts. Two former law firm
White House-Treasury contacts and
Gonzalez wrote back telling Fiske
associates of Cutler were brought in
events surrounding the death last
his views are "indispensable" on
to help.
summer of White House deputy
what the hearings can safely cover
Officials there insist that the pro-
counsel Vincent Foster. In his letter,
without impeding the rest of Fiske's
cess will not be disruptive and will
Fiske said he had no objection to the
probe. On areas where Fiske has
be contained within the counsel's
vast majority of witnesses, most of
completed his work, Gonzalez said:
and congressional affairs offices, but
them high-ranking White House and
"I see no reasons why you should not
privately they acknowledge that ev-
Treasury Department appointees.
be required to discuss your find-
eryone facing potential congression-
Fiske has said he will report next
ings." He urged Fiske to reconsider.
al testimony is anxious, and, as one
week on whether White House offi-
Fiske's request that the commit-
official said, "stressed
some are
cials obstructed justice by removing
tee not call RTC investigators who
more stressed than others."
Whitewater-related papers from Fos-
conducted the Madison probe is a
ter's office on the night of his death.
potential blow to Republicans. Rep.
Staff writer Ann Devroy contributed
should
Iim Leach (lowa), the committee's
to this report.
32
SATURDAY. 1994
THE VASHINGTON POST
bc-rosefirm - a1731
(ndy) (ATTN: National editors) (Includes optional trims)
Records: Rose Firm Was Dumped Over Conflict in Foreclosure Case
By Kevin McCoy and John Riley= (c) 1994, Newsday=
A conflict of interest by the former law firm of first lady Hillary
Rodham Clinton prompted a federal banking agency to end the firm's work on an
$11 million Arkansas foreclosure proceeding, newly released records show.
The records, which confirm a recent Newsday investigation, also show that
former Associate Attorney General Webster Hubbell, a longtime Clinton friend
and former law partner, was more involved in the foreclosure action than was
previously known.
Records released by the Resolution Trust Corp., an agency formed to manage
the bailout of the savings and loan industry, relate to a 3,200-acre Utopian
City'' community development project proposed in Maumelle, Ark. The Rose Law
Firm, based in nearby Little Rock, initially represented the RTC's legal
interest as lead agency on an $11 million mortgage on the project, which they
assumed from a failed Texas savings and loan.
Newsday reported in March that the RTC dropped the Rose firm in 1992 after
concluding the agency's financial stake conflicted with the interests of
Stephens Inc., a major Arkansas-based investment banking firm and leading Rose
client. Stephens Inc. underwrote and owned a portion of the
multimillion-dollar bond issues intended to develop the Maumelle project,
which was started but never completed.
RTC officials dropped the law firm because Arkansas law gave priority to
the financial rights of one Rose client, Stephens, at the expense of another
client, the RTC, Newsday reported.
Both in March and on Wednesday, an RTC spokesman declined to discuss the
Rose firm's termination. But the previously undisclosed records, released
under the federal Freedom of Information Act, show that an RTC attorney
specifically cited a legal conflict as the reason for dropping the Rose firm.
In a March 26, 1992, letter to Shelley Greene, an RTC monitoring attorney,
Hubbell acknowledged that Greene specifically cited an existing conflict''
when she discussed the termination in a telephone conversation with Rose firm
partner Allen Bird II.
Obviously, we take such an allegation very seriously, Hubbell wrote,
and if that is the basis upon which we are being discharged, we would ask
that you give us the particulars so that we may discuss them with you (Greene)
or other RTC officials.
In a telephone interview this week, Greene, now an outside counsel for the
RTC office in Dallas, would say only that ``I really prefer not to comment
about that matter right now.'
Hubbell, who resigned his Justice Department job in March amid allegations
with Rose partners that he may have overbilled clients in cases unrelated to
the Maumelle project, could not be reached for comment. Hubbell's lawyer, John
Nields, was unavailable this week, a secretary at his Washington, D.C., office
said Wednesday.
Nonetheless, Hubbell's letter to Greene undercuts statements that the
former senior Rose partner had only a limited role in the Maumelle case.
Although Hubbell and Bird co-signed most of the federal court pleadings, Bird
had told Newsday that Hubbell handled only a small percentage of the legal
work on the foreclosure action.
But Hubbell's letter to Greene shows he tried to arrange a telephone
conference so he could discuss the termination personally. Greene declined to
say whether she spoke about the issue with Hubbell.
Hillary Clinton was not involved in the foreclosure proceedings.
The Maumelle case represents the third time the Rose firm was at the
center of an apparent conflict of interest in its representation of federal
agencies.
(Optional add end)
The RTC and Federal Deposit Insurance Corp. are investigating the firm's
work for the federal government on a lawsuit involving Madison Guaranty
Savings & Loan, the failed Arkansas thrift at the heart of the Whitewater
investigation.
In that case, the Rose firm from 1989 to 1991 allegedly did not tell
banking regulators that Hillary Clinton was a partner with former Madison
owner James McDougal in the Whitewater land development project funded by
Madison.
Hillary Clinton also has been criticized for representing the federal
government in a banking lawsuit against Dan Lasater, a longtime family friend.
The case is still under investigation.
Distributed by the Los Angeles Times-Washington Post News Service=
**** filed by:LAWP(--) on 07/07/94 at 02:56EDT ****
**** printed by:WHPR(JEL) on 07/07/94 at 08:45EDT ****
Fulbrigh i k Wth Whi ewa er
For Many Years, Senator Put Trust in Land Developer McDougal
By Susan Schmidt
"Fulbright was the star about
Washington Post Staff Writer
which all these young planets orbit-
Anxious to extricate himself from
dd in the '60s and '70s," said Little
Of all the curiosities in the White-
Madison deals, Fulbright turned to
Rock lawyer Sandy McMath, who in
water affair, one of the most puz-
an old friend, the late Witt Stephens
the "70s was a social friend of Tuck-
zling is the relationship between for-
of Little Rock's billion-dollar invest-
&, Clinton, McDougal and Hale.
mer senator J. W. Fulbright
ment banking empire that bears his
"It was a political kinship, an intel-
(D-Ark.), a statesman revered
name. Stephens lent Fulbright
lectual kinship," said Arkansas colum-
around the globe, and developer
rist John Brummett. "It makes sense
$240,000 to pay off the Castle
James B. McDougal, a country bank-
that they would all be friends."
Grande loan. Copies of checks pro-
or who prowled for "dirt deals" along
Williams, Fulbright's longtime top
vided by Capes show that Fulbright
Ozark Mountain byways.
assistant, remembers McDougal as an
repaid the Stephens loan with inter-
Fulbright, long the powerful chair-
invaluable aide in the home office who
est the following year.
finan of the Senate Foreign Relations
Mnew everybody in politics around the
Fulbright's correspondence shows
Committee, was the patriarch of the
state and squired the senator to fish
that he believed he was short-
Democratic "political family" that
fries and political events when be re-
changed by McDougal on the Castle
dominates Arkansas politics. His op-
turned to Arkansas. McDougal was a
Grande transaction. "It is a sad tale
position to the Vietnam War during
walked mimic and entertaining com-
of misplaced trust, but I expect you
the 1960s was a beacon that drew to
person, able to talk about politics, his-
have encountered it before," Ful-
his office some of the state's bright-
tery and literature.
bright wrote his accountant in late
est young people, including McDou-
"On a 60-mile stretch of back-
1987.
gal and Bill Clinton.
country road, he could be a very en-
McDougal later was tried and ac-
Fulbright helped McDougal branch
gaging fellow," said Williams.
quitted on fraud charges arising
from politics into banking and real es-
Fulbright seemed to develop a
from Castle Grande.
tate. He was one of the original inves-
real affection for McDougal. "I fi-
Harriet Fulbright, in an interview
fors in McDougal's first bank, the tiny
Bank of Kingston, and participated in
nanced McDougal in the real estate
last fall, said that in the end her hus-
business beginning in 1975 shortly
band felt his trusted friend and busi-
a half-dozen land deals he put togeth-
after I was defeated in the 1974
ness partner McDougal "just got in
èr. Some of these have come under
election," Fulbright wrote to one of
over his head."
scrutiny by special counsel Robert B.
his advisers in 1987. "He had
Fiske Jr., who is investigating
worked for me in the Little Rock of-
McDougal's business relationship
fice and was in need of something to
with President Clinton and the Clin-,
One area of Fiske's investigation
do after my defeat."
tons' ties to the now-defunct Madison
concerns whether Madison funds
McDougal wanted to buy up agri-
Guaranty Savings & Loan, which
were diverted to pay off Clinton cam-
cultural land, subdivide it and sell lots
McDougal owned in the mid-1980s.
paign debts, and in one instance Ful-
at residential prices. He found a will-
Fulbright's name also appears on
bright's name appears an April.
ing investor in Fulbright, whose fa-
1985 Madison cashier's check in the
$3,000 Madison cashier's check
ther started as a bank owner and land
made out to Clinton in 1985, a mat-
amount of $3,000 made -out to Bill
speculator. Jay Fulbright parlayed
ter Fiske is examining as part of an
Clinton. Capes said be has told Fiske's
those investments into the beginnings
investigation into whether Madison
staff that Fulbright does not appear to
of a fortune that would make the Ful-
funds improperly went into Clinton's
have provided such a check.
brights one of the wealthiest families
S&L records on a second transac-
gubernatorial campaign. There is no
in Northwest Arkansas.
public evidence thus far. that Ful-
tion involving Fulbright show be re-
"McDougal was a finder and a fi-
ceived $50,000 from a company
Bright did anything improper or
nancier," said McMath, himself son
called Earth Movers, which had re-
knew about the cashier's check.
of an Arkansas governor. "He was
ceived the funds in transfers from
Much has been written about the
thought of as a hail fellow well met,
the Whitewater account at Madison.
involvement of various political fig-
with the good deal and the easy fi-
Capes said McDougal sold à piece of
ares with Madison-the Clintons,
nance." Sometimes McDougal
Fulbright's land for him to Earth
Arkansas Gov. Jim Guy Tucker, for-
seemed uncertain he had the respect
Movers, and for reasons the senator
her municipal judge David Hale,
of friends, McMath said. His atti-
knows nothing about, appeared to
qnetime Little Rock mayor and asso-
tude seemed to be "he'd show them
transfer money through Whitewater.
diate U.S. attorney general Webster
by crackie-he'd make it big and
Capes said Fulbright placed a high
L. Hubbell. But what of Fulbright,
help them too."
degree of trust in McDougal and of-
slow 89 years old?
Fulbright invested 50-50 with
ten gave him the go-ahead to make
Fulbright's integrity has been con-
McDougal in a venture called Rolling
land investments on his behalf over
sidered above reproach throughout
Manor, in which Clinton briefly held a
the phone or by mail.
his long career, from his days as a
small investment as well. Rolling
Fulbright has lived in Washington
Rhodes scholar and gentleman farmer
Manor bought several parcels of land
for decades, and traveled back to his
to his later life as a Senate power and
around the state and subdivided it.
home state only three or four times
authority on international affairs.
Federal S&L investigators sus-
a year since leaving Congress.
Now living in Washington but inca-
pect that Rolling Manor was one of
Capes and former Madison em-
gacitated as a result of several
about a dozen "shell corporations"
ployees say Fulbright was taken
strokes, Fulbright is unable to explain
created by McDougal that owned
aback to learn in mid-1986 that
How be landed in what now appears
land but had little true business pur-
McDougal was being forced out of
such strange company.
pose. Fiske is investigating allega-,
the S&L amid allegations by bank
Attorney David Capes and long-
tions from the Resolution Trust
examiners that "sham" loans, insider
time Fulbright aide Lee Williams are
Corp. that those McDougal compa-
dealing and reckless real estate pro-
landling the ex-senator's affairs with
nies-including the Clinton-McDou-
jects had run Madison into the
regard to Fiske's inquiry. Capes said
gal Whitewater Development
ground. That year, McDougal had
they have complied fully with subpoe-
Corp.-were used in check kiting
convinced him to invest in Castle
nas for Fulbright's records of land
schemes in the mid '80s that drained
Grande, a planned industrial park
deals with McDougal.
money from Madison deposits.
and mobile home community near
It was during the late 1960s and
Capes, Fulbright's lawyer, said he
Little Rock. Fulbright took out a
early "70s that Clinton, Tucker, Hale
has been told by Fiske's staff that Ful-
$700,000 loan from Madison to fi-
and McDougal all got to know each
bright is not a target of the investiga-
nance the venture.
dther, and some of those early ties
tion. The RTC referred Fulbright for
Began with Fulbright. Clinton
criminal investigation last fall based
worked in Fulbright's 1968 reelec-
on S&L records in two transactions,
tion campaign with McDougal and as
but investigators appear to be pro-
an intern on the senator's Washing-
ceeding on the assumption that if any
ton staff. Tucker, who would be-
wrongdoing occurred, Fulbright may
come a partner in various Madison-
have been unaware of it.
financed investments, was McDou-
dal's housemate for a time.
W
hen I remarked to my brother
that I needed to get to a book-
An unexpected trend
store to buy Bob Woodward's
USA-Today, quoting the Justice Dir
book about the inner workings of the Bill
partment, reports that the husban 1 is the
Clinton White House. he said. "Don't
bother to buy it. I'll lend you mine. It's
John R.
assailant in about two-thirds of & poused
murders.
not something you'd want to keep."
Starr
Black women are doing betts r than
I bought "The Agenda: Inside the Clin-
whites in this particular statistic While
ton White House" anyhow, but at Sam's,
62 percent of the victims in white poustil
not at a bookstore, so I didn't pay the $24
rels so inept that he was defeated in 1980.
slaying were women. only 53 cent of
cover price. At $14.96, it came pretty close
A lot of Clinton's presidential prob-
black victims were female.
to being worth the money. I will keep it.
lems have stemmed from his insistence
Researchers said the finding thit
As has been reported in news stories
on keeping members of his campaign
black husbands and wives kill me at
about "The Agenda." the book describes
team as free-lance White House advis-
other at about the same rate was 'one)x
Clinton's indecisiveness, his temper
ers. Often. Woodward reports, he has
the unexpected trends found in the e
tantrums and his willingness to depart
been torn between conflicting advice
study."
from: principle to effect compromises that
from the campaign folks and the White
will enable him to claim victory on the is
House staff
A liberal flip-flop
sue of the day in ways that surely delight
Clinton's enemies will delight in read-
What does it take to make a libera
Republicans.
ing about the times when Clinton and his
face reality? Just show him a pc II inci
Eowever, I think that, overall, the
campaign advisers cold-bloodedly de-
eating that he may lose the next e ection
book should leave anyone able to read
vised promises that he had no intention
New York Gov. Mario Cuomo, weeking
between the lines with an impression of
of keeping whenever he appeared to be
a fourth four-year term. now & ys be
Tlinton more favorable than the one gen-
slipping in the polls.
willing for the people of New Yo: k totde
trated by day-to-day news coverage.
Sauce for the goose
cide whether the state will imp the
But this is not a book that Friends of
death penalty.
haven't written much about the Haiti
Bill who see him as a paradigm of
Cuomo, who has vetoed a deat perid
trength and integrity will enjoy, because
crisis because Clinton's policy on Haiti
ty bill in each of his 12 years it office
it reveals that election to the nation's
changes so rapidly that any comments
did his flip-flop after a poll shop ed him
highest office did not change him. He
might be outdated before they could be
trailing Republican state Sen. George
published.
took to the White House all the person-
Pataki by 40-35. Pataki supports # e dead
ality faults that kept him from being a
However, let me note that anyone who
penalty.
good governor.
knows Clinton must have been amused
Could New Yorkers be singing
Clinton critics will see in "The Agen-
by his criticism of Haiti's military lead-
rivederci, Mario" in November
da" many parallels between the way be
ers for breaking their promise to leave
Maybe Cuomo should have ta ten tha
peacefully.
operated during his first nine months in
Supreme Court position Clinton wants
the White House and the way the
Clinton, who has broken more promis-
to offer him.
Arkansas statehouse was run during his
es than any politician in recent memory.
first year as governor. when he sur-
seemed genuinely offended that the
John R Starris the former manager 1 editoric
rounded himself with a squad of squir-
Haitians had broken their promise to
the Arkansas Democrat-Gazette H column
him.
appears every day.
Fiske declines 2nd time to testify
its early stages.
He said last week the special
mittee that investigated the
BY TERRY LEMONS
Democral-Gazette Washington Burseu
The Washington phase, which
counsel's decision not to testify
Iran-Contra affair in 1987. Leon
WASHINGTON Special
will be the focus of this month's
was an attempt to "sidestep ex-
also worked as a special assis-
counsel Robert Fiske Jr. de-
congressional hearings, In-
plaining his actions" to Con-
tant U.S. attorney in New York's
clined again Tuesday to testify
cludes the death of Deputy
gress.
Southern District under Fiske,
during this month's congres-
White House Counsel Vincent
Although Gonzalez and oth-
who was the district's U.S. at.
sional hearings Into the White-
Foster and meetings between
er committee members could try
torney from 1976-80.
water Development Corp. affair.
Clinton administration officials
to subpoena Fiske, it is unlike-
Leon will fill a vacancy on the
Fiske objected last week to
and federal officials investigat-
ly such an effort would bear
committee staff. Unlike the
appearing at House Banking
ing the failure of Madison Guar-
fruit.
House, Senate Democrats and
Committee hearings that are
anty Savings & Loan Associa-
Several experts, including
Republicans added staff posi-
scheduled to begin July 26.
tion.
former independent counsel
tions for Whitewater hearings.
Banking Committee Chairman
Fiske concluded last month
Lawrence Walsh and former
Sen. Alfonse D'Amato. R.
Heary Gonzalez, D-Texas, asked
that Foster. a Hope native and
Iran-Contra committee counsel
N.Y., said the Senate Banking
Fiske to reconsider his decision.
former partner in Little Rock's
Arthur Liman, said Fiske is fol-
Committee's Whitewater hear.
"I continue to believe that It
Rose Law Firm. committed sui-
lowing federal law by declining
ings likely will begin July 29
is inappropriate and could im-
cide on July 20, 1993. Fiske also
to testify. They said it is unlike-
the deadline set by a Senate
pair my effectiveness as Inde-
said no criminal wrongdoing oc.
ly a court would uphold a sub-
vote last month.
pendent counsel to be ques-
curred in the meetings between
poena.
D'Amato, the committee's
tioned before Congress while
White House aides and Depart-
In other Whitewater devel-
ranking Republican, said the
the major part of my investiga-
ment of the Treasury officials.
opments Tuesday:
Senate hearings could last up to
tion is ongoing." Fiske wrote to
The third element of Fiske's
Rep. Jim Leach, R-Iowa,
two weeks.
Gonzalez in a letter released
Washington Investigation In-
said Richard Leon, a veteran
Tuesday.
volves the removal of documents
Capitol Hill lawyer, will be the
The Scripps Howard News Ser-
Fiske, who was appointed in
from Foster's White House of.
GOP's special counsel during
vice contributed to this aricie:
January by Attorney General
fice after his death. Fiske is ex-
the House hearings. Leach is the
Janet Reno. is nearing the com-
pected to wrap up work on that
Banking Committee's ranking
pletion of the Washington phase
issue this month.
Republican member.
of his investigation. The more
Gonzaler wanted Fiske to be
Leon was the deputy chief
extensive Arkansas phase is in
the first witness at the hearings.
Republican counsel for the com-
Arkansas Democrat
Gazette
7/13/94
147
Politics & Policy: Leon Is Counsel for GOP In Whitewater Hearings
WASHINGTON -- Iowa Rep. James Leach, the top-ranking Republican on the House
Banking Committee, named Richard Leon to be the GOP's special counsel for the
panel's Whitewater hearings that begin July 26.
Mr. Leon, a partner in the Washington office of Baker & Hostetler, once
worked for Robert Fiske, the special counsel who has been investigating Bill
and Hillary Rodham Clinton's Whitewater Development Corp. real-estate
investment and related issues since January. Mr. Leon was a special assistant
U.S. attorney in New York when Mr. Fiske was the U.S. attorney there.
Mr. Leon was deputy chief minority counsel to the House select Iran-Contra
committee in 1987, and in 1992 worked for the GOP side on the House Foreign
Affairs Committee's "October Surprise" task force.
Mr. Fiske yesterday declined for the second time to testify at the House
hearings, saying he thought an appearance could hurt his effectiveness while
most of his inquiry is in progress.
The designation of Mr. Leon follows similar actions by the majority and
minority sides of the Senate Banking Committee, which will begin its
Whitewater hearings by July 29.
**** filed by:WSJ-(--) on 07/13/94 at 02:14EDT ****
**** printed by:WHPR(JEL) on 07/13/94 at 08:27EDT ****
Congress to Shie d Whitewa er Pape
White House Counsel, Banking Committees Negotiate Secrecy Terms
By Susan Schmidt
of hearings in both houses later this
terday she would have no comment on
Washington Post Staff Writer
month.
any aspect of the committee's investi-
"What's classified about White-
gation, including whether confidential-
White House counsel Lloyd Cutier
water?" said Joseph E. diGenova, a Re-
ity agreements will be required of
has reached an extraordinary secrecy
publican who formerly served as chief
staff viewing the documents.
agreement with the Senate Banking.
counsel to the Senate Rules Commit-
Rep. Jim Leach of lowa. the ranking
Housing and Urban Affairs Committee
tee. "I give the White House credit for
Republican on the committee. said his
to treat documents related to the
seeking that kind of protection," he
aides "quite possibly" will sign such
Whitewater affair as classified materi-
said. "It's highly untisual. Congress
agreements. Senate stafi members al-
als until hearings begin later this
doesn't agree to these sorts of limita-
ready have done so.
month.
tions such requests absent classi-
In a letter to Gonzalez yesterday,
The House Banking, Finance and
fied information are taken as an af-
special counsel Robert B. Fiske Jr. de-
Urban Affairs Committee also has
front."
clined for a second time the commit-
agreed to give the documents unusual
In a July 1 letter, Cutler said the
tee's request that he testify on the
protection. Cutler said yesterday the
documents were rned over "with
portion of his investigation that will be
arrangements were negotiated with
the understanding that, until the time
concluded when the hearings begin.
THE WASHINGTON POST WEDNESDAY. JULY 13. 1994
committee lawyers and intended to
of the Senate Banking Committee
Fiske said he believes appearing be-
prevent "random leaking of docu-
hearing, the documents will be treated
fore Congress could impede the major
ments out of context."
as if they are classifi ed material."
portion of his investigation still ahead.
The documents, which detail con-
Cutler's letter laid out detailed re-
Congressional leaders have agreed
tacts between the White House and
quirements about staff access to the
the committee hearings will be limited
the Treasury Department about the
materials. Staff meinbers are not al-
to the narrow issues Fiske already has
early stages of the Whitewater inves-
lowed to remove anything from the
concluded.
tigation, are being kept in safes in se-
rooms, even their cown notes.
Fiske recently issued a report on
cure rooms under guard. The limited
The House Banking Committee has
the death of White House deputy
number of Republican and Democratic
agreed to most of the security ar-
counsel Vincent W. Foster Jr., agree-
banking committee staff members al-
rangements agreed to by the Senate
ing with authorities' original assess-
lowed to see them are being asked to
committee but refused to go along
ment that it was a suicide unrelated to
sign confidentiality agreements.
with language treating the documents
Whitewater. He conducted a grand ju-
Republicans, who had waged a long
as if they were "classified material."
ry investigation of the White House-
struggle with Democratic leaders to
Cutler said House Banking staff
Treasury contacts, concluding there
schedule Whitewater hearings in both
members will sign confidentiality
was no criminal intent to influence the
houses, agreed to the unusual terms
agreements before reviewing the ma-
Resolution Trust Corp.'s investigation
because they were concerned that
terials. Banking Committee Chairman
of an Arkansas savings and loan
they might otherwise be denied ac-
Henry B. Gonzalez (D-Tex.) in the
owned by President and Hillary Rod-
cess to the documents altogether,
past has refused to have his staff sub-
ham Clinton's partner in the White-
GOP sources said.
mit to confidentiality agreements.
water real estate investment.
The thousands of pages of material,
Even past banking investigations that
He has said he will report in the
already heavily redacted, may contain
touched on national security issues or
coming days on whether there were
politically embarrassing material, but
those involving sensitive internal in-
improprieties in the way White House
nothing in the realm of national secu-
formation on open banks have not
aides handled Foster's papers, includ-
rity. The secrecy arrangements are
been so closely he:ld.
ing a file on Whitewater, in the days
intended to prevent leaks in advance
Gonzalez's spokeswoman said yes-
after his death.
June Prices
On Wall Street yesterday, the good
news helped bond prices rise slightly
producer prices, "the evidence doesn't
as the yield on the benchmark 30-year
support that very well."
At Producer
Treasury bond, which falls as prices
The weakening dollar. which also
rise, dropped to 7.68 percent from
will make imported goods more expen-
sive in the United States. did not have
7.73 percent.
Stock prices rallied on the price re-
an impact on producer prices. said Da-
Level Steady
vid Wyss, research director at
port, but fell later in the day as the dol-
lar continued its decline. The Dow
DRI/McGraw-Hill Inc. in Lexington,
Mass. If it had, it would have shown up
Jones industrial average closed at
3702.66, down 0.33. And in New York
in higher apparel prices-which actu-
By Jonathan D. Glater
trading, the dollar shd to a new post-
ally fell-because a large proportion of
Washington Post Staff Writer
war low against the Japanese yen for a
U.S. apparel is imported.
Prices producers charged for fin-
third session in a row, finishing at
ished goods remained unchanged last
97.50 yen. off from 97.75 yen Mon-
PRODUCER PRICES
month, the Labor Department report-
day. [Details, Page D2.]
ed yesterday, providing fresh evidence
The producer price index measures
PERCENT CHANGE IN INDEX.
that inflation remains at bay.
finished goods prices charged by com-
SEASONALLY ADJUSTED
The producer price index, a gauge
panies when the items they make-a
0.4%
of inflationary pressures before they
new car, a loaf of bread, a light bulb or
reach the consumer, rose at an annual
a head of lettuce-are first sold in com-
0.2
rate of 1.6 percent for the first half of
pleted form. While they are in many
Unchanged
Unchanged
the year. compared with a 1.9 percent
cases the same as wholesale prices,
0
rise for the same period of 1993. Pro-
they often are not. particularly with
ducer prices for all of 1993 rose 0.2
more and more goods moving directly
percent.
from manufacturers to retail stores.
-0.2
"There hasn't been any wholesale
The favorable inflation news puts the
inflation for a year." said Bruce Stein-
Federal Reserve in "an interesting
-0.4
berg. an economist at Merrill Lynch &
bind," balancing exchange rate con-
Co. in New York. "That's pretty dam
cerns with domestic economic worries,
-0.6
good."
Steinberg said. The Fed could try to
The government reports on infla-
halt the dollar's plunge by raising inter-
-0.8
tion at the consumer level for June to-
est rates, he said. But in the absence of
JJASONDJFMAMJ
day.
inflationary pressures, the rate increase
1993
1994
The stable index for June is largely
could slow economic growth.
SOURCE Bureau of Labor State:
the result of a fall in prices of tobacco.
"There's really no need for them to
apparel. natural gas and residential
do much of anything" before August,
electricity. The core index, which ex-
he said, "but from the point of view of
cludes more volatile energy and food
the currency market there's al-
prices, fell 0.1 percent. its first de-
most a demand for the Fed to tighten."
crease since October.
Currency markets, like bond mar-
Most analysts had predicted a slight
kets, are "fixated on the belief that in-
rise in the overall index for June.
flation's about to accelerate," he said.
After three months of falling or stable
37
AMERICAN SURVEY
Guaranty Savings & Loan and the Clintons.
life and had. perhaps coincidentally. tens of
It has not been hard. In a series of small-
On September 26th 1993 Jerry Parks was
millions of dollars he did not own traded
er disputes since the big 1992 strike the ac-
killed when several bullets were pumped
through his account at Lasater & Co. a Little
tions of some hot-headed Caterpillar man-
into him on a street corner in Little Rock.
Rock-based broking firm controlled by Dan
agers may. the union reckons. have
Arkansas. Parks had been the chief of secu-
Lasater, a big Clinton campaign contribu-
delivered the company into its hands. It is
rity for Mr Clinton's national campaign
tor. Mr Patrick has recently been in Wash-
alleged. for instance. that the company took
headquarters in Little Rock during the 1992
ington. relating his strange tale to congress-
unwarranted action against union mem-
presidental campaign. No autopsy report
men: FBI agents assigned to Mr Fiske's
bers for wearing buttons saying "Member
has yet been released. nor has anybody been
taskforce also want to talk to him. Mean-
in Good Standing" or a T-shirt with the
charged for what looked like a professional
while. Mr Lasater has also become part of
legend "Permanently Replace Fites" (Don-
hit. Mr Parks's son. Gary. savs his father car-
Mr Fiske's investigation.
ald Fites is the company's chief executive).
ried out private investigations on Bill Clin-
All this may be a pack of cards piled up
The National Labour Relations Board has
ton during the 1980s. He also says that the
by over-eager conspiracy theorists and ideo-
issued 92 complaints against Caterpillar. an
material gathered was stolen from the fam-
logical opponents of the president. But it re-
unprecedented number. The company can
ily home in July 1993.
mains strange. The latest oddity occurred
appeal but. usually. nine out of ten of the
On June 26th 1992 Gary Johnson. a law-
on June 23rd when Stanley Huggins. a 46-
board's complaints are upheld.
ver. was beaten up so badly that he had to
year-old principal in a Memphis law firm,
Given the UAW'S promising line of at-
have a ruptured spleen removed. Mr John-
Huggins & Associates. was found dead in
tack. is there any need for Congress to pass
son lived in Quapaw Towers. in Little Rock.
Delaware. The cause of death, according to a
legislation outlawing the replacement of
in the flat next door to Gennifer Flowers.
report in the Memphis Commercial Ap-
strikers in pay and contract disputes? Yes,
Miss Flowers claimed during the campaign
peal. was said to be viral pneumonia. Mr
say sponsors of the Workplace Fairness Act.
to have had a 12-vear affair with Bill Clin-
Huggins headed a 1987 examination into
who maintain that companies have become
ton. which Mr Clinton denied.
the loan practices of Madison Guaranty
over-fond of threatening "the economic
Then there is the bizarre story of Dennis
Savings & Loan and produced a report said
death penalty." Congress appears to agree.
Patrick. already reported in The Economist
to be 300-400 pages long-copies of which
The House passed the bill last year by 239
Mr Patrick survived three attempts on his
have never been made public.
votes to 190: in the Senate it is only a few
votes short of beating an opposition filibus-
ter. President Clinton has said he will sign
Strikes
the bill if it makes it to his desk.
If the bill does become law this month-
Got you this time
it may be coming up for a vote on July 12th-
it would give the labour movement a hand-
some centenary present. A hundred years
AURORA ILLINOIS
ago to the month. federal troops were sent to
B
ECAUSE it is not forbidden by federal
It took one whiff of the idea that the strikers
Chicago to break up a famous strike by the
labour law. American companies have
might be replaced before the United Auto
American Railway Union. The government
a powerful weapon in labour disputes: they
Workers union found its members rushing
argued that its action was justified by the
can threaten to replace striking workers
to get back to work. What will happen now
constitution's interstate commerce clause. It
with new ones. and that's that. A lot of peo-
the UAW has again called out its 14,000 Cat-
seemed to have borrowed that approach
ple in Congress. who want to outlaw the
erpillar workers?
from a railroad baron. Jay Gould. who is re-
practice. say the threat is being used 100
Both sides think the outcome this time
membered for arguing that labour prob-
much-nowadays. in one strike in three.
will be different. Caterpillar. for its part.
lems were best solved by daring "one half of
Back in 1992 Caterpillar. a machinery
points out that it has never actually replaced
the working class to kill the other half." The
company. used it to end a 5½0nth strike.
a striking worker. and claims it will pa-
Workplace Fairness Act. say its backers.
tiently wait for its present crew to come back
would nicely confirm how much things
when they are ready. Meanwhile. it says.
have changed since then.
about a fifth of the union's workers are
crossing the picket line and these. together
with salaried people. can keep its 11 strike-
Aerospace jobs
hit plants in production. Strikers may raise
their evebrows when they hear Caterpillar
Gold-plated?
advertising permanent jobs by radio in Peo-
ria (the site of one plant) and in the newspa-
per in Aurora (the site of another). with hefty
LOSANGE.15
union-level starting rates of $17 an hour. But
C
RITICS call it the "flying Fort Knox".
no existing employee will be replaced. says
Ounce for ounce. America's B-2 stealth
the company reassuringly.
bomber is more valuable than gold. Ameri-
The UAW feels confident because it reck-
can taxpayers are having to fork out $2.2 bil-
ons that. this time. it has the company
lion aplece for the 20 batwing bombers be-
where it wants it. In saving this. it is relying
ing built by Northrop Grumman near Los
on an important distinction in labour law.
Angeies. Although the last B-2 will not roll
Whereas employers can replace workers
oft the assembly line until 1998. production
who strike over contracts and pay (which
will begin to wind down as earlv as next
led to the UAW'S 1992 debacle). they cannot
year. That will throw many of the 12.500
replace workers who strike over unfair la-
Californians who help to build the stealth
bour practices. So the union has listed as
bomber on to the region's depressed job
many complaints as possible against the
marke:.
company on this score.
In the nick of time. the Senate voted on
THE CONOMIST 9TH 1442
AMERICAN SURVEY
Death in Florida
AND TALLAHASSEE
WHEN Florida legislators came
lower rates.
to the state capitol in Tallahassee
That programme. though
eariier this month for a special
oniv just implemented. shows
session. they had before them a
promise already. Whereas na-
health-care reform plan that any
tional health-care costs rose by ai-
Republican should love. Among
most 10% last year. in Florida they
its ingredients were no new taxes:
rose by only 2%. And. by putting
voluntary participation by em-
Medicaid recipients into the alli-
ployers: no new bureaucracy: in-
ances. the state estimates that it
dividual contributions matched by gov-
will save about $1 billion a year. It was
ernment subsidies: and the chance to
this money that Mr Chiles wanted to use.
insure half of Florida's 2.5m "working
in his new plan. to provide health-care
poor" who cannot afford today's premi-
subsidies to the working poor on the ba-
ums. So what did the Republicans do?
sis of income. Such subsidies. he esti-
They killed it.
mated. would allow a family of four to
Why did they do so? Because. they
buy health insurance for about $700 a
said. the bill had a deep flaw: it provided
vear-down from a typical rate of about
help to working families with earnings
$3.000 todav.
It's up to Hillary now
as high as $37.000 a year. or more than
The Florida Chamber of Commerce.
twice the federal poverty level. This. the
which speaks for 30.000 businesses and
five health bills being bandied around. the
Republicans said. was "welfare for the
for the chains of HMOS. supported the
finance committee's is the only one that
middle class".
plan. But Republicans noticed that Mr
could garner enough votes today to succeed.
Democrats think the real objection
Chiles was up for re-election. and did
When debate moves to the full House
lies elsewhere. The author of the Florida
not want to give him the boost of a legis-
and Senate. the centrepiece of the Clinton
Health Security Act happens to be Law-
lative victory. According to Mr Chiles.
health-care reforms-mandatory insurance
ton Chiles. the Democratic governor of
the order to smother his plan came
contributions by employers and cost con-
Florida. Mr Chiles, a close friend of Bill
straight from Washington. allegedly
trols to guarantee coverage for everyone-
Clinton and a fellow-founder of the cen-
from Senator Bob Dole himself.
are certain to be tossed out. The administra-
trist Democratic Leadership Council. is
The governor has promised not to
tion must soon make the agonising decision
a pioneer at devising programmes to cut
give up: he hints he may even call the leg-
over whether simply to declare victory and
the cost of health care. In 1993 he per-
islators back for a special session. just as
walk away with the promise of health cover-
suaded the legislature to create a state-
Tallahassee's summer heat is reaching its
age for 95% of all Americans by 2002. or risk
wide network of insurance-purchasing
blast-furnace worst. If that happens. Re-
everything by holding out for the universal
pools which would include state em-
publicans in Florida will have to make
coverage it has pledged to deliver.
ployees. Medicaid recipients the poor)
the same calculation as their party col-
The wild card. as ever. is Hillary
and any small businesses that wished to
leagues in Washington: whether. by kill-
Rodham Clinton. No one is quite sure what
join. By combining their numbers. each
ing a Democratic bill. they will do them-
the First Lady might do. White House insid-
alliance could negotiate more effectively
selves a favour. or whether instead they
ers say guardedly that. come the crunch: Mrs
with health-maintenance organisations
will incur the wrath of uninsured or re-
Clinton will not willingly jeopardise the
(HMOS) for health-care coverage and
form-minded voters in November.
chance of extending health coverage to an-
other 20m of the 37m Americans who are
now without medical insurance. Nor is she
rest for now. the Whitewater cottage indus-
Arkansas state trooper. was named as a co-
prepared to consign her husband's admin-
try clatters on. Jerry Falwell. a leader of the
defendant in Paula Jones's sexual-harass-
istration to a single term. But berween now
religious right. has lately been peddling vid-
ment suit against Bill Clinton.
and then the fireworks will flv.
eos continuing veiled accusations of mur-
On June 12th Bill Shelton. an Arkansas po-
der against the president. The film is crude
lice officer. was found dead-again in Sher-
and sensationalist: most people have dis-
wood. Arkansas-lying sprawled on the
Whitewater
missed it as nonsense.
grave of Mrs Ferguson. who was his
It is true. nevertheless. that a peculiar
girlfriend at the time of her death. Again. a
Curiouser
pattern of suicides and violence surrounds
suicide note was found next to the body. The
people connected to the Clintons or their as-
police report. which again describes the
sociates. It may be no more than coin-
death as suicide. states that the bullet en-
cidence: but it prompts questions. Consider
tered behind the right ear and came out be-
T
HE first report by the Whitewater spe-
the following cases:
hind the left ear.
cial prosecutor. Robert Fiske. was re-
On May 11th this vear Kathy Ferguson. a
On August 15th 1993 Jon Walker fell to his
leased on June 30th. The main topic covered
38-year-old hospital worker. was found
death from the top of the Lincoln Towers
was the mysterious death last summer of
dead in Sherwood. Arkansas. A gunshot
building in Arlington. Virginia. In March
Vincent Foster. deputy counsel in the White
had pierced her right temple in what a local
1992 Walker. an investigator for the Resolu-
House. Mr Fiske concluded that Foster died
police report labelled a suicide. A note was
tion Trust Corporation (RTC), had con-
by his own hand in a northern Virginia
found next to the body suggesting as much.
tacted the Kansas City RTC regional office
park. with no suspicious circumstances.
Mrs Ferguson's death came only five davs
for information concerning possible ties be-
Yet. if the Foster matter has been laid to
after her ex-husband. Danny Ferguson. an
tween Whitewater Development. Madison
THE ECONOMIST JULY 9TH 1994
29
40
Henry Gonzalez has a fit
H
enry Gonzalez's odd reign on the House Bank-
1992 criminal referral sent by the Kansas City RTC
ing Committee got odder yet this last week-
office to the U.S. Attorney in Little Rock. Ms. Casey
end when the chairman turned on White-
first turned the request down cold, and then recused
water special prosecutor Robert Fiske. Until then, the
herself from deciding a second request only after
Texas Democrat had been happy to hide behind Mr.
press reports had revealed her initial action.
Fiske, claiming that he could not possibly allow his
The immediate conventional wisdom over the
committee to undertake Whitewater hearings that
weekend was that Mr. Fiske's desire to build a bar-
might in any way jeopardize Mr. Fiske's probe. All
rier around the investigation of the criminal refer-
was going along amicably until Mr. Gonzalez invit-
ral was a blow to Republicans on the Banking Com-
ed Mr. Fiske to appear at truncated Whitewater
mittee. Led by ranking member Jim Leach,
hearings scheduled for the end of the month. Mr.
Republicans have sought a forum to explore whether
Fiske refused, citing the risk that his ongoing inves-
high ranking Washington officials in the Justice
tigation might be compromised. This did not sit well
Department tried to pressure the Kansas City RTC
with the chairman: "To the extent your work is com-
office to drop its investigation into the Whitewater-
pleted," wrote Mr. Gonzalez in a blistering letter to
enmeshed Madison Guaranty Savings and Loan.
Mr. Fiske, "I see no reasons why you should not be
And it's true enough that Republicans are frustrat-
required to discuss your findings."
ed that they won't be allowed to call witnesses whose
Why all the gnashing of teeth? Is it that Mr. Gon-
testimony they believe is crucial. But they are also
zalez is unhappy that the Washington portion of the
buoyed by the fact that Mr. Fiske has not backed
prosecutor's inquiry marches on? It seems that the
down from what they consider to be the most impor-
chairman, who has been an assiduous apologist for
tant allegations of Washington wrongdoing in the
the president on Whitewater, would have liked Mr.
Whitewater affair.
Fiske to have come to the Hill to tell the representa-
Perhaps for the same reason that the Republicans
tives, the assembled press and television audience
are buoyant, Mr. Gonzalez is dismayed. The chair-
that the Washington phase of his investigation was
man seems to have hoped that he could have count-
complete and had found no evidence of criminal
ed on Mr. Fiske to provide blanket cover for Democ-
wrongdoing.
rats trying to avoid embarrassing the president. All
But Mr. Fiske will not be doing that. He has
Mr. Fiske had to do was come to the Hill and testify
instead indicated that the potentially explosive part
that the hearings should be narrow, narrow, narrow
of his Washington inquiry is still in the works. The
in scope and that he had closed out his Washington
prosecutor asked the committee not to interview a
probe with nothing to report. Then the majority could
variety of players who figure in the question of
have smiled and said, "See, we were right all along
whether the Clinton Justice Department participat-
to balk at this Whitewater nonsense." But now Mr.
ed in a Whitewater coverup and perhaps a full-
Fiske is leaving it to the Democrats to make the tele-
blown conspiracy to obstruct justice. Among those
vised case for why the hearings are truncated, and
Mr. Fiske would prefer to have all to himself are for-
at the same time has suggested that his probe of
mer deputy attorneys general Webster L Hubbell
administration actions is just getting under way.
and Philip Heymann, Little Rock U.S. attorney Paula
All of which will make for a most uncomfortable
Casey and Resolution Trust Corporation investiga-
display for Democrats when the hearings begin.
tor Laura Jean Lewis.
Henry Gonzalez, leaping in to rule out-of-order any
"The major part of my work is still in progress,"
Republican question that is even remotely interest-
Mr. Fiske wrote to Mr. Gonzalez, explaining that they
ing, is a sight that not even Mr. Gonzalez himself rel-
"are all potentially involved in the investigation
ishes. Mr. Fiske could have saved him that embar-
which includes issues relating to the handling" of an
rassment but chose not to. No wonder Mr. Gonzalez
RTC referral. The referral in question is no doubt the
is having a fit.
Robb VS. Right to Work
A
early as this afternoon, Virginia Sen. Charles
the labor supply at certain job sites. Sure, companies
S. Robb may cast a key vote on his state's long
would still be allowed to hire temporary replace-
Right to Work tradition. Senators such as
ments during strikes, but how many workers want
Majority Leader George Mitchell and Howard
to run the gantlet of union picket lines at risk to life
Metzenbaum would have him undermine that tra-
and limb - as was the case of those who crossed
dition by voting to cut off debate on the so-called
picket lines during the United Mine Workers strike
striker-replacement bill. Virginia residents, who
in Southwestern Virginia a few years ago for tem-
have come to take their Right to Work for granted,
porary work? Not many.
undoubtedly oppose the idea. Whose side will Mr.
If you aren't part of the union, following the dic-
Robb take?
tates of union officials, there isn't much point to tak-
In the past, unfortunately, he has sided with the
ing the job. But the state's Right to Work law specif-
Metzenbaums by voting to cut off debate, and all
ically prohibits requiring union membership as a
signs are he is prepared to do it again. He has col-
condition of employment.
lected the endorsement of the state AFL-CIO and
The legislation has additional drawbacks. By elim-
may feel obliged to reward the organization for its
inating the possibility that workers who go on strike
support. But this year, unlike past years, Mr. Robb
could be replaced, the law would encourage union
is also in the middle of what appears to be a long, hot
members to resort to strikes to resolve labor disputes.
Senate race. And even his fellow Democrat-turned-
It would make the workplace much more con-
independent-Senate-candidate L Douglas Wilder,
frontational and make Virginia a less attractive place
not to mention the other candidates in the race, has
to do business.
come out strongly against the legislation at hand. In
For his part, Mr. Robb says he has "deliberately
other words, past Robb supporters who like the
not taken a position on this litmus test issue in order
Right to Work just the way it is have plenty of other
to facilitate working with both management and
places to go come election time.
labor on other issues where cooperation is essential."
Mr. Metzenbaum's striker-replacement legisla-
Nobody elected Mr. Robb labor mediator. They elect-
tion would in effect prohibit companies from hiring
ed him senator, and in case he hasn't noticed, part of
permanent replacements for union workers who go
the job requirements include taking positions on lit-
on strike seeking certain economic benefits such as
mus test issues of concern to Virginia voters.
higher pay. The idea is to "level the playing field" for
They should understand this much. As mentioned
Big Labor, which argues that strike threats are
here previously, the litmus test is not just how Mr.
diminished if companies can just go out and hire
Robb votes on the bill itself. It is also a question of
someone else.
how he votes on the issue of whether to cut off a
But this legislation has less to do with level play-
Republican filibuster against it. If he votes with the
ing fields than with expanding organized labor's
Metzenbaums to end the filibuster, then he is voting
power in the workplace. What the striker-replace-
to undermine state Right to Work laws. And he is giv-
ment bill would do is give unions a monopoly over
ing his campaign foes more ammunition.
TUESDAY. JULY 12. 1994 The Washington Times
12C
House Panel
Is Rebuffed
By Prosecutor
Whitewater Counsel
Declines to Testify
By DAVID JOHNSTON
Special to The New York Times
In a letter replying to Mr. Fiske on
WASHINGTON, July 9 - Robert B.
Friday, Mr. Gonzalez said he was
Fiske Jr., the Whitewater independ-
deeply disappointed by the prosecu-
ent prosecutor, has rebuffed a Con-
tor's unwillingness to appear. "I see
gressional committee that asked him
no reasons why you should not be
to testify later this month about some
required to discuss your findings,"
of the issues he is investigating.
Mr. Gonzalez wrote. The banking
In a letter dated July 7, Mr. Fiske
chairman also repeated his intention
declined an invitation to testify be-
to limit questions of Mr. Fiske to
fore the House Banking Committee.
areas that had already been investi-
The committee's chairman, Henry B.
gated by the special prosecutor, like
Gonzalez, Democrat of Texas, re-
the circumstances surrounding the
leased his correspondence with the
death of Vincent W. Foster Jr., the
prosecutor.
deputy White House counsel who
In his letter, Mr. Fiske wrote, "I
committed suicide in July 1993.
believe it would inappropriate and
Mr. Gonzalez gave no indication
would compromise my ability to func-
that he would try to force Mr. Fiske
tion effectively as an independent
or any other witness to appear. And
counsel if I were to appear before
Mr. Gonzalez's past resistance to
Congress to answer questions about
holding any hearings on Whitewater
my investigation while a major part
left some Republicans voicing suspi-
of it is still going on."
cions this week that he was using Mr.
In a separate letter to Mr. Gonza-
Fiske's reluctance to limit the scope
lez, Mr. Fiske discouraged Congres-
of the banking committee's inquiry.
sional testimony by some Clinton Ad-
After months of partisan bickering,
ministration officials on the grounds,
Republicans in both the House and
that their appearance could compro-
Senate finally succeeded in forcing
mise his criminal inquiry. Among the
Democrats to hold hearings later this
officials that Mr. Fiske said could be
month. But the scope of inquiry will
involved in his inquiry were two for-
be limited, avoiding issues related to
mer senior officials at the Justice
Mr. Clinton's Arkansas real estate
Department, Philip B. Heymann, the
dealings.
former Deputy Attorney General,
The hearings at which Mr. Fiske
and Webster L. Hubbell, the former
declined to appear are scheduled to
Associate Attorney General.
begin on July 26. Last week Mr. Fiske
Mr. Fiske did not explain why he
made public a report on the initial
wanted to talk to Mr. Heymann or Mr.
phase of his investigation, which en-
Hubbell, but law-enforcement offi-
dorsed a United States Park Police
cials have said for months that Mr.
finding that Mr. Foster's death had
Fiske was likely to ask top Justice
been a suicide.
Department officials how they had
The report also concluded that no
dealt with requests from Treasury
one broke the law during a series of
officials in both 1992 and 1993 to in-
contacts earlier this year between
vestigate Madison Guaranty Savings
White House officials and Treasury
and Loan, the failed financial institu-
Department aides concerning an in-
tion owned by a former business part-
quiry into Madison Guaranty.
ner of President Clinton and his wife,
Hillary.
The first Treasury request was re-
jected in the spring of 1993; the sec-
ond led to the criminal investigation
by the Justice Department that Mr.
Fiske took over when he was appoint-
ed special prosecutor in January by
Attorney General Janet Reno.
Mr. Fiske offered to allow his staff
to meet privately with Mr. Gonzalez
and other lawmakers to discuss the
completed phase of the inquiry, but
Mr. Gonzalez declined, saying much
of the information should be dis-
cussed publicly.
9
THE
NEW
YORK
TIMES
10
8A
SATURDAY, JULY 9, 1994
Washington
12024562362 P.06
Fiske refuses to testify at hearings
BY TERRY LEMONS
investigation," Gonzalez said.
Fiske offered to meet pri-
ment along the White River in
Democrat-Gazeite Washington Bureau
The Banking Committee will
vately with committee leaders.
Marion County. James McDou-
WASHINGTON Special
hold hearings into the Wash-
Gonzalez said that would not be
gal also owned Madison, which
counsel Robert Fiske Jr. has re-
ington phase of Fiske's Investi-
the appropriate forum.
failed in 1989 at a cost to tax-
fused to appear before the
gation. That phase includes:
"Mr. Fiske's thoughts
payers of at least $47 million.
House Banking Committee for
The death of former
should be presented in an open
Allegations that money was
hearings into the Whitewater
Deputy White House Counsel
forum to the entire committee
transferred Illegally between
Development Corp. affair, say-
Vincent Foster, a Hope native
and the public," the Texas con-
Madison and Whitewater ac-
TO
ing it would "compromise" his
and partner in Little Rock's
gressman said.
counts are being investigated
investigation.
Rose Law Firm.
Gonzalez asked Fiske to re-
by Fiske, whose investigation
In documents released Fri-
Meetings between Clinton
consider his decision. Fiske
is based at Little Rock.
day, Fiske also objected to
administration officials and De-
also should explain why wit-
All but one of the witnesses
Webb Hubbell, a former asso-
partment of the Treasury offi-
nesses should or shouldn't tes-
Fiske objects to have been
ciate attorney general from Lit-
cials investigating the failure
tity, he said.
linked to either a review of
the Rock, and 12 others testify-
of Madison Guaranty Savings &
Fiske had no objection to
Madison by federal regulators
ing at the hearings, which are
Loan Association.
more than 30 administration of-
or the subsequent meetings
scheduled to begin July 26.
Fiske concluded last week
ficials and others appearing be-
with administration officials.
Besides Hubbell, Fiske op-
that Foster's July 20, 1993,
fore the committee. But he
The other person Fiske
poses appearances by two oth-
death was a suicide. Fiske also
asked the committee not to
didn't want to appear before
er Arkansans- Paula Casey of
said no criminal wrongdoing
hear testimony from 13 people
the committee is identified only
Little Rock, a U.S. attorney, and
occurred in the meetings be-
on its list of potential witness-
as "C.W." for "confidential wit-
Little Rock lawyer Chuck
tween White House aides and
es.
ness." The unnamed person re-
Banks, Casey's predecessor as
Treasury Department officials,
Gonzalez said Fiske's re-
U.S. attorney.
Gonzalez had invited Fiske
portedly saw Foster's body af-
quest amounts to an attempt to
ter his suicide.
Fiske, who was appointed in
to explain his findings to the
limit the scope of the Banking
January by Attorney General
committee. Fiske would have
Committee's work.
Janet Remo, said testimony
been the first witness to testi-
"He wants it both ways,"
from those people might dam-
fy.
Gonzalez said. "He wants to
age his investigation.
The special counsel balked
limit the scope and then side-
Banking Committee Chair-
at the request because most of
step explaining his actions. Mr.
The Crown Bed
man Henry Gonzalez, D-Texas,
his Whitewater work remains
Fiske has to be prepared to ex
blasted Fiske's nonbinding rec-
to be done. He said there was
plain and defend his request.
ommendations. Gonzalez also
"little, if anything" he could
Republicans and Democrats
said the special counsel's de-
add to his initial reports.
alike will require a fuller ex-
cision not to testify was an at-
"It would be inappropriate
planation."
tempt to "sidestep explaining
and would compromise my abil-
Bill and Hillary Rodham
his actions" to Congress.
ity to function effectively
(if)
Clinton were partners with
"The committee simply
I were to appear before Congress
James and Susan McDougal
seeks an accounting for the
to answer questions," Fiske said
from 1978-92 in Whitewater, a
completed phase of Mr. Fiske's
in a letter to Gonzalez
230-acre residential develop-
Whitewater
rises at home
BY TERRY LEMONS
Democral-Gazeite Washington
WASHINGTON The legal
advisers have been hired.
Documents from the Clinfon
administration are flowing in.
Witness lists are being writ-
ten.
Preparations have begun on
Capitol Hill for congressional
hearings into the Whitewater
TO
12024562362
Development Corp. affair.
P.02
In just more than two weeks,
House and Senate Whitewater
hearings are scheduled to con-
House committee's regular bud-
may be finalized.
vene. But the hearings will fo.
get.
The House invited Fiske as
cus only on a few threads of the
Additional hearing details
the first witness. The special
tangled Whitewater web. Ques-
are expected to be finalized this
counsel, who was appointed in
week as Congress resumes work
January by Attorney General
tions will be limited to the
following last week's Fourth of
Janet Reno, declined that invi-
Washington phase of special
July recess.
tation in a letter to Gonzalez last
counsel Robert Fiske Jr.'s in-
A flurry of Whitewater de-
week.
vestigation. The broader
velopments is expected this
Forty-five other witnesses
Arkansas elements of Whitewa-
week.
could appear before the House
ter won't be scrutinized until
Fiske may release his find-
Banking Committee. Gonzalez
later.
ings on the handling of docu-
asked Fiske last week to review
Democrats are expected to al-
ments inside deputy White
the list of witnesses to deter-
low little deviation from the
House counsel Vincent Foster's
mine whether their testimony
Washington aspects of the case.
office. There are questions
might endanger the special
"I do not look for a swash-
about how Whitewater-related
counsel's investigation.
buckling hearing," admitted
documents in Foster's office
The potential witness list in-
Rep. Jim Leach, R-Iowa. "Any
were handled after his death
cludes several prominent
questions of terrific interest will
July 20, 1993.
Arkansans in the Clinton ad-
be out of order."
ministration. Among those who
Leach will play an important
I do not look for a
might testify are outgoing White
role in the hearings as the
swashbuckling hearing.
House Chief of Staff Thomas F.
Arkansas Democrat
House Banking Committee's
"Mack" McLarty, senior presi-
ranking Republican member.
Any questions of terrific
dential adviser Bruce Lindsey
Leach and Banking Committee
interest will be out of
and White House Administra-
Chairman Henry Gonzalez, D-
tion Director Patsy Thomasson.
Texas, have argued for months
order.
Arkansans outside the ad-
over the scope and format of
- Rep. Jim Leach,
ministration also are on the list,
hearings.
including Webb Hubbell. a for-
House hearings will begin
R-Iowa
mer associate attorney general.
July 26.
Several White House officials
Hearings in the Senate Bank-
In a report released June 30,
are expected to appear at the
ing Committee are expected to
Fiske ruled that Foster, a Hope
hearings, administration aides
start the same week under the
native and former partner in
said.
direction of Chairman Donald
Little Rock's Rose Law Firm,
$ The Senate's potential wit
Riegle, D-Mich, and ranking Re-
committed suicide.
ness list has not been released
publican member Alfonse
Fiske also said last month
Whitewater was a 230-acre
D'Amato, R-N.Y. The Senate vot-
that no criminal wrongdoing oc-
residential development along
ed last month for hearings to be-
curred in meetings between
the White River in Marion Coun
Gazet
gin no later than July 29.
White House aides and Depart-
ty. Bill and Hillary Rodhan
Congressional aides have
ment of the Treasury officials
Clinton were partners from
started their preparations for
investigating the failure of
1978-92 with James and Susar
hearings. The two committees
Madison Guaranty Savings &
McDougal in Whitewater. Jame
already are receiving numerous
Loan Association.
McDougal also owned Madison,
documents requested from the
Three Foster's death,
which failed in 1989 at a cost to
Clinton administration
the handling of documents in
taxpayers of at least $47 millior.
In the Senate, both Democ-
Foster's office and the meetings
Allegations that money wa;
rats and Republicans have
between administration and
transferred illegally between
hired special counsels to rep-
Treasury Department officials
Madison and Whitewater ac-
resent them at the hearings.
- will be the thrust of this
counts are being examined b7
Democrats will turn to
month's congressional hearings.
Fiske, whose investigation is
William Codinha, a Capitol Hill
Also this week, witness lists
based at Little Rock
veteran who served as chief
counsel to a Senate select com-
mittee on POW-MIA affairs. Re-
publicans have hired Michael
Chertoff, a New York lawyer
and former U.S. attorney in New
Jersey.
Their salaries will be part of
a special $400,000 budget the
Senate allocated for Whitewa-
ter hearings.
The House will rely on com-
mittee staff lawyers rather than
special counsels. Hearing ex-
penses will come from the
129
Fiske Declines to Appear Before Panel,
But Letter Gives Clues to Investigation
By VIVECA NOVAK
House aide Vincent Foster and a series of
Staff Reporter of THE WALL STREET JOURNAL
contacts between the White House and
WASHINGTON Whitewater Special
Treasury Department officials concerning
Counsel Robert Fiske refused to testify
Madison. combined with a report expected
before the House Banking Committee July
this week regarding the handling of Mr.
26. but he indicated that the Washington
Foster's office immediately after his
portion of his inquiry is broader than
death, would close the "Washington
previously disclosed.
phase" of his probe. In the first report. he
In a letter sent last week to committee
found that no laws were broken. and that is
Chairman Henry Gonzalez (D., Texas),
likely to be his conclusion in the coming
Mr. Fiske said it would be inappropriate
report as well.
for him to appear while the bulk of his
Both the House and Senate Banking
investigation is still in progress. Mr.
panels will hold hearings on those issues.
Gonzalez asked him to reconsider his deci-
with the Senate's also slated to start by the
sion.
end of the month. In both chambers,
In his letter, which included a review of
Democrats have said they won't tread
potential witnesses listed by Rep. Gonza-
into areas that Mr. Fiske is still investigat-
lez, Mr. Fiske gave some clues to pre-
ing, and Mr. Gonzalez had submitted the
viously undisclosed aspects of his wide-
potential witness list to Mr. Fiske SO he
ranging probe into the real estate invest-
could say if their testimony could compro-
ments of President Clinton and Hillary
mise his work.
Rodham Clinton and related matters.
The potential witnesses whose appear-
ances were nixed by Mr. Fiske came from
Mr. Fiske asked the panel not to call as
a group suggested by the banking panel's
witnesses current and former Justice De-
GOP members. Rep. Gonzalez had added
partment officials, including U.S. Attorney
other names to that list.
Paula Casey and an assistant in her Little
Laura Jean Lewis, an RTC investiga-
Rock office; Webster Hubbell, a former
tor, and some of her colleagues in the
associate attorney general and longtime
Kansas City office are also among those
Clinton friend: former Deputy Attorney
THE WALL STREET JOURNAL MONDAY, JULY 11, 1994
whose appearance Mr. Fiske disapproved.
General Philip Heymann; a trial attorney
It was Ms. Lewis who generated the
from the department's fraud section and a
criminal referral to the Justice Depart-
Federal Bureau of Investigation agent.
ment regarding irregularities in Madison's
RTC Referral
activities. Earlier this year, Iowa Rep.
Those individuals, Mr. Fiske wrote,
James Leach, the ranking Republican on
"are all potentially involved in the investi-
the committee, released memos written by
gation
which includes issues relating
Ms. Lewis that indicated she believed
to the handling of (a Resolution Trust
there may have been efforts to cover up the
Corp.) referral."
inquiry.
The reference is almost certainly to a
Approves Most Witnesses
1992 criminal referral regarding now-de-
But the bulk of the witness list got the
funct Madison Guaranty Savings & Loan
go-ahead from Mr. Fiske, including the
from the RTC's Kansas City office to the
requested appearances of former Clinton
U.S. attorney in Little Rock. Madison had
aide Betsey Wright and Jack Palladino, a
been owned by James McDougal, who,
private investigator. Both individuals were
with his wife, invested with the Clintons in
involved in dealing with sensitive issues in
a north Arkansas real-estate venture
Mr. Clinton's past during the 1992 presi-
named Whitewater Development Corp.
dential campaign.
The referral mentioned the Clintons and
Meanwhile Mr. Gonzalez, who had long
discussed possibly suspicious transfers of
resisted holding hearings at all, declined
funds among Madison, Whitewater's ac-
an offer from Mr. Fiske to meet privately
count there, and the accounts of other
with him and Rep. Leach. In a letter to Mr.
McDougal-controlled companies. It was
Fiske, he said he was "deeply disap-
rejected more than a year later by Ms.
pointed" in Mr. Fiske's refusal to testify
Casey, but a second referral was taken up
and that he saw "no reasons" why the
and became the basis of Mr. Fiske's inves-
special prosecutor "should not be required
tigation.
to discuss" in an open forum his findings
It had been thought that Mr. Fiske's
from the parts of the probe on which he has
June 30 report on the death of former White
issued reports.
BCCI's Former Chief Pleads Guilty
To Fraud, Conspiracy in Plea Accord
By KENNETH H. BACON
Robert Morgenthau. have played a major
Staff Reporter of THE WALL STREET JOURNAL
role in untangling the case, partly because
WASHINGTON - A key figure in the
BCCI allegedly duped the Federal Reserve
rise and collapse of Bank of Credit &
Board by failing to reveal its interest in
Commerce International pleaded guilty to
First American.
federal fraud and conspiracy charges and
Federal prosecutors also hope that tes-
agreed to provide evidence in future
timony by Mr. Naqvi, backed by informa-
cases.
tion in thousands of documents he has
Under a plea agreement reached with
brought to the U.S., will shed new light on
the Justice Department, Swaleh Naqvi,
BCCI's operations and aid the completion
BCCI's former chief executive, could go to
of criminal and civil charges pending as 2
jail for a maximum of about eight years.
result of the bank's collapse. Depositors
But he is likely to serve far less time. if he
claims of about S12 billion have been
provides detailed information on how BCCI
filed against the defunct bank.
covertly bought and managed the former
The plea was approved by Federal
First American Bankshares and three
District Judge Joyce Hens Green after &
other banks in the U.S. and bilked money
lengthy hearing Friday. In a letter. Mr.
from more than 250.000 depositors in 70
Morgenthau opposed the settlement as too
countries.
lenient for Mr. Naqvi's "long-term. calcu-
BCCI. a unit of BCCI Holdings (Luxem-
lated crime of treachery."
bourg) SA, was seized by regulators in the
Mr. Morgenthau's office intends to pro-
U.S. and elsewhere on July 5. 1991, amid
ceed with a case it has brought against Mr.
signs that billions of dollars in deposits had
Naqvi, but the defendant's lawyers. Joseph
fraudulently disappeared. No U.S. deposi-
diGenova and Victoria Toensing. will ar-
tors lost money, but American prosecu-
gue that the case should be dropped follow.
tors, led by Manhattan District Attorney
ing his plea.
55
The tax treatment of the
Clintons' legal defense fundV
By Lee A. Sheppard
Duberstein requires an objective
employee's income taxes, estab-
assessment of the donor's intent,
lished that the payment of another's
he Clintons, their personal
'that is, the dominant reason for the
obligation is income to the person
T
legal problems, and their
donor having made the transfer.
on whose behalf the payment was
The question is factual, the Court
made. The IRS noted that the
income taxes are back in the
news again- the difference being
'stated, given that the drafters of
source of the funds to pay the offi-
that this time the president and first
the section 102 exclusion meant
cial's legal expenses was the same
"gift" in a colloquial sense. No spe-
as that of his salary - the organi-
lady are getting better tax advice.
Lawyers from Sullivan & Cromwell,
cific set of factors can be pre-
zation members.
'scribed; whether a transfer is a gift
Although Rev. Rul. 60-14 does
led by M. Bernard Aidinoff, a pre-
requires the use of all of the fact-
not classify the official's income
vious candidate for assistant trea-
finder's practical human experi-
from legal expenses paid on his
sury secretary, structured the Pres-
ence. The Court saw itself as dis-
behalf as compensatory, that is
idential Legal Expense Trust and
advised on tax issues. So while the
tilling and applying existing law to
clear from the official's relation-
the facts at issue, rather than as
ship to the organization and does
fact that President Clinton is the
first sitting president to have to set
announcing a new standard. Why
not appear to be necessary to the
up a legal defense fund is mighty
do people give money and time to
holding of the ruling. Otherwise,
the Clinton situation is comparable.
embarrassing, the president hopes
politicians? They may have any of a
Although the president's long-term
not to be embarrassed by tax ques-
variety of motives ranging from the
interest is to resolve his legal prob-
tions raised by the arrangement.
expectation of a financially benefi-
lems, his short-term interests to
Started with $2,000 from the
cial political favor to simply sharing
ameliorate the bad publicity and
Clintons, the Presidential Legal
the politician's beliefs. (In U.S. V.
attendant damage to his credibility
Expense Trust is a grantor trust, as
Pisani, 773 F.2d 397 (2nd Cir. 1985),
that these problems cause. The
other politicians' legal defense
the Second Circuit held that when
president is legally obligated to pay
funds have been. The trust's income
a politician diverts campaign con-
his lawyers the sums they have
is taxable to the president under
tributions to personal use, it is a
billed him for services already ren-
code section 671. To avoid a Crum-
question of fact under Duberstein
dered, and other people will be pay-
mey problem, any remainder- the
whether the contributors intended
ing these bills on his behalf. Old
first couple's legal expenses are
to make a gift.)
Colony Trust would deem the con-
estimated to be $1 million annual-
Rev. Rul. 60-14, 1960-1 C.B. 16,
tributions to the trust to be income
ly- will revert to the first couple,
dealt with donative intent regard-
to the president.
who have promised to donate it to
ing, a legal defense fund. An official
Official Duties
charity without taking an income
of an organization was involved in
According to IRS rulings, when
tax deduction. White House Coun-
litigation of a personal nature. A
the transferee is a public official,
sel Lloyd Cutler told the Wall Street
committee composed of other offi-
the operative inquiries are whether
Journal that the trust provided that
cials of the organization was formed
the transfer helped the official
the corpus could be spent on items
to raise funds from members of the
carry out official duties and
other than legal fees because
organization to pay the litigant's
whether the transferor had dona-
should the president lose in his
legal expenses. The committee was
tive intent. A transfer made to
immunity claims, a hundred other
formed for the express purpose of
enable a public official to carry out
lawsuits could be filed. Mr. Cutler
stated that people who have already
counteracting the national, nega-
official duties and without donative
contributed to the president's legal
intent is income, not a gift. Sullivan
defense will have their contribu-
& Cromwell takes the position that
tions returned and will be told to
Transferors need not
because the president's legal prob-
resubmit them to the trust. (The
Wall Street Journal, June 29, 1994,
be looking for strictly
lems arise out of events the
occurred before he took office, the
p. B2.)
Donations to the trust are not
economic gain to lack
expenses of their resolution cannot
be seen as helping him carry out his
deductible; the trust has not been
donative intent; in
duties as president.
qualified as a charitable organiza-
tion. And to the extent that the
President Clinton's
Or can they? The president's real
power is the power to persuade the
The Washington Times FRIDAY, JULY 8, 1994
donations could be considered
political contributions, they are
case, they could be
voters and the legislature. The
president cannot just order Con-
clearly not deductible. The trustees
seeking a successful
gress to produce legislation chang-
will publish the names of the donors
ing the delivery of medical insur-
and report on the trust's expendi-
term or the enactment
ance, for example. To the extent
tures. Sullivan & Cromwell believes
that the donations to the trust,
of his legislative
that the president loses credibility,
his power to get things done suf-
should be considered gifts, so that
the president would be able to
agenda.
fers. Polls have shown that the
president's credibility has suffered
exclude them from income, but has
from the appearance of question-
not furnished a written opinion to
able financial dealings in White-
that effect. It is not just for public
tive publicity that the official's per-
water. Few prominent members of
relations reasons that individual
donations to the trust have been
sonal legal problems had inflicted
Congress have defended the pres-
limited to $1,000 per donor, the
on the organization. The committee
ident's personal financial dealings,
used the organization's offices for its
and some are acutely worried
presidential election campaign con-
business, and reported its fund-
about the effect of these problems
tribution limit; it is also to ensure
raising to the organization's board.
on the president's legislative agen-
that they qualify for the gift tax
exclusion.
Over a period of several years, the
da. Put another way, a president
committee collected a substantial
who was not worried about the
Donative Intent
sum from organization members
effect of Paula Corbin Jones's accu-
Can President Clinton or any
and spent nearly all of it on the offi-
sations on his ability to persuade
other politician with a similar prob-
lem sustain an argument that con-
cial's legal expenses. The funds not
voters might be able to brush them
spent for the official's legal defense
off, rather than scrambling to hire
tributions to a legal defense fund
are gifts and not income? Commis-
were returned to the organization.
an expensive lawyer. (this is not to
The IRS held that the amounts
imply that hiring a lawyer connotes
sioner V. Duberstein, 363 U.S. 278
(1960), stands for the rule differ-
spent by the committee for the offi-
guilt.)
cial's personal legal defense were
In Rev. Rul. 73-356, 1973-2 C.B.
entiating gifts from income. A gift,
gross income to him and not gifts.
31, two members of Congress
Justice Brennan wrote, must be
The IRS made an inquiry into dona-
received subscription fees and
made out of the donor's "detached
and disinterested generosity," and
tive intent, similar to that of Duber-
solicited contributions that were
not with an expectation of an eco-
stein. The committee's express pur-
used solely to defray the costs of
pose to spare the organization
publishing and distributing
nomic benefit in return. In Duber-
stein, the taxpayer received a new
from the bad publicity occasioned
newsletters, reports, and question-
by an official's problems- was not
naires sent to constituents. One con-
Cadillac from a business associate
indicative of donative intent. The
gressman sold subscriptions to his
to whom he had provided success-
ful sales leads. Both parties testified
IRS also relied on the rule of Old
newsletters, and covered the dif-
that the sales leads were the justi-
Colony Trust Co. V. Commissioner,
ference between subscription
279 U.S. 716-(1929). Old Colony
receipts and the cost of the newslet-
fication for the taxpayer getting a
Trust. in which an employer paid an
ters from his own pocket. The other
new car.
congressman sent reports and
questionnaires to constituents; with
mary beneficiary and had effec-
tive control of the distribution of
the correspondence, he solicited
the trust funds. The IRS further
of defending himself against
contributions that be held in a sep-
arate bank account and used specif-
held that the travel expenses were
charges of misconduct while in
ically to cover the costs of the
deductible by the congressman
office under Gilmore, because the
under section 162(a), and that the
charges arose out of his conduct in
reports and questionnaires. The
return of unused trust funds to con-
office. Similarly in Rev. Rul 71-470,
congressman covered any shortfall
tributors was a deductible loss
1971-2 C.B. 121, a public official
in contributions from his own pock-
under section 165 as a reversal of
was permitted to deduct the cost of
et. Noncontributing constituents as
an income item.
defending himself against a recall.
well as contributors received the
These rulings make it clear that
The IRS differentiated McDonald V.
publications.
transferors need not be looking for
Commissioner, 323 U.S. 57 (1944),
The IRS ruled that the funds
strictly economic gain to lack dona-
in which the Supreme Court denied
received by the congressmen were
tive intent; in President Clinton's
a deduction for campaign expenses
income in both cases. Regarding
case, they could be seeking a suc-
incurred by a sitting judge without
the congressman who sold sub-
cessful term or the enactment of his
ruling that the expenses were per-
scriptions, subscription receipts
legislative agenda. Some observers
sonal.
obviously are income to a publish-
er. As for the congressman who
might argue, of course, that the pro-
A politician cannot deduct
asked for contributions, the IRS
motion of good government, in gen-
expenses arising out of personal
eral, is sufficiently detached and dis-
matters even if the expenditures
conducted a Duberstein inquiry.
The contributions were not gifts
interested to be a gift. "We believe it
might help him in his office. In
is in the public interest to assist the
Wells V. Commissioner, 36 T.C.M.
because they were made for the
president in meeting a financial bur-
1698 (1977), the Sacramento coun-
specific purpose of assuring the
den that could otherwise distract
ty Public Defender attempted to
continued publication of the con-
him from performing his public
deduct the costs of meals he bought
gressman's newsletters. Informing
responsibilities," the trustees stated
for staff members, during which
constituents of his doings and seek-
in the White House press release.
office business was discussed. He
ing their opinions is part of con-
The IRS rulings also show that the
had not asked the county to reim-
gressman's trade or business-that
interposition of the trust between
burse him for these meals, and the
is his official duties, so that any
the contributors and the Clinton
court assumed that the county
amounts that offset the cost of per-
creditors in immaterial to the Clin-
would not have done so. The court
forming those official duties pro-
ton's control of the corpus.
held that even though the meals
vide a substantial benefit to him.
Whether the Clinton situation is
may have had some benefit for the
The IRS further held that the costs
otherwise comparable to that of
public defender's office, they were
of the publications were deductible
the legislators in these three rev-
not ordinary and necessary as to
by both congressmen as trade or
the public defender individually.
business expenses under section
enue rulings depends on the
The court also appeared to believe
162(a).
breadth of the definition of the
that the cost of the meals was
Another congressman solicited
president's official duties. Certain-
unreasonable.
funds to defray the expenses of
ly the payment of the president's
Likewise, in LTR 8505003, the
employing interns in his office, as
personal legal expenses is not com-
IRS ruled that a public official could
described in Rev. Rul. 75-146, 1975-
parable to the payment of the
not deduct the cost of an unsuc-
1 C.B. 23. Although the intern pro-
expenses described in the rulings
cessful criminal defense because
gram was billed as educational, the
in a nuts-and-bolts sense. The pres-
there were no facts to indicate that
interns performed the same duties
ident is not asking for money to buy
his crimes were committed in his
as the congressman's compensated
new White House china so that
capacity as a public official,
staff. The congressman solicited
more dinner guests could be
although his crimes had a political
contributions specifically to cover
served, as Nancy Reagan had done.
flavor. Obviously, as the trustees of
the costs of interns who could not
The president can certainly phys-
the Presidential Legal Expense
pay their own way, and the receipts
ically do his official job without
Trust noted, the payment of the
were kept in a segregated account.
having private contributions cover
president's legal fee might margin-
The IRS held in Rev. Rul. 75-146
his personal legal fees.
ally improve his performance in
that the contributions were income
But the presidency is a bully pul-
office. But under Gilmore, the ori-
to the congressman, who could
pit, and the president's use of that
gin of the claims out of which these
deduct the cost of employing interns
pulpit, and his accomplishment of
expenses arise is personal, making
under section 162(a), and that the
his legislative agenda, can be seri-
them non-deductible. On the other
interns must include in income any
ously compromised by the appear-
hand, if any of the proceedings
funds they receive. Citing Duber-
ance of ethical problems. This
were shown to be pursued as a pre-
stein, the IRS found that the sup-
expansive view of the role of the
sen: political concoction to prevent
porters of the congressman's intern
president is consistent with the
the president's effective execution
program hoped to obtain a more
trustees' stated reasons for forming
of his office, the expenses might
efficient public servant, so that they
the Presidential Legal Expense
not he subject to Gilmore.
did not give out of detached and dis-
Trust. Clinton cannot be an effective
interested generosity. Nor was the
president if he is distracted by legal
Lee A. Sheppard is a tax lawyer
congressman merely a conduit for
problems. It would also be consis-
in New York. Her piece, which orig-
monies paid to interns, since the lat-
tent with the president's argument
inally appeared in the July 4 issue of
ter performed the same valuable
that he cannot be sued while in
Tax Notes, is reprinted with permis-
office.
sion. Copyright 1994 Tax Analysts.
services as his staff.
A Business Expense?
The congressman described in
If the president must include con-
Rev. Rul. 76-276, 1976-2 C.B. 14, set
tributions to the Presidential Legal
up a trust fund for his travel
Expense Trust in income, can he
expenses to the extent that they
then deduct the legal expenses
exceeded his congressional
attendant to shielding his reputa-
allowance for travel expenses. The
tion? Under section 162, it could be
trustees solicited contributions to
argued that the Clintons' legal
the trust for this purpose, had the
expenses are not deductible
power to approve the expenditure
because their origin is clearly per-
of the funds, and were to return
sonal, even though the conse-
unused contributions to the con-
quences could affect the presiden-
tributors when the trust terminat-
t's job, under U.S. V. Gilmore, 372
ed. Relying on Duberstein, the IRS
U.S. 39 (1963). In Gilmore, the tax-
found in Rev. Rul 76-276 a lack of
payer unsuccessfully argued that
donative intent in that the contri-
legal fees paid in divorce litigation
bution enabled the congressman
were attributable to the conserva-
to be more accessible to con-
tion of the taxpayer's income-pro-
stituents, giving them the opportu-
ducing property, that is, to keeping
nity to obtain more effective rep-
it away from-his ex-wife. The
resentation in Congress. The IRS
Gilmore origin-of-the-claim test
ignored the interposition of the
applies to attempts by politicians to
trust between the congressman
deduct legal fees paid while in
and the contributors on the ground
office.
that the congressman was the pri-
A politician can deduct the cost
of protecting his office. In Rev. Rul.
The Washington Times FRIDAY, JULY 1994
74-394, 1974-2 C.B. 40, the IRS held
that a judge could deduct the costs
PAUL GREENBERG
that audible sigh of relief you
T
heard out of Washington last
week was from Clintonoids
Whew!
minus ethics
that mean they were advisable
doesn't show quite the same con-
beforehand? Or would have been
sideration to all those it is asked to
advisable if nobody had found out
investigate.
celebrating their nonindict-
about them afterward? Or can Mr.
Inappropriate? Inadvisable in
L "After a review of all the evi-
Cutler's comment just be sloughed
hindsight? The euphemisms are
dence," said the report from Robert
Lloyd Bentsen, says the way is now
- and repeatedly confer about a
soon. The post-Watergate morality
off as more of the legalese that cov-
getting mighty deep. After all, Mr.
Fiske's team of Whitewater rafters,
clear for the Office of Government
supposedly confidential investiga-
clearly has faded into something
ers political questions today like a
Cutler's predecessor - Bernard
.
have concluded that the evi-
Ethics to determine "whether any
tion of their chief by a supposedly
else - the clintonized culture?
slimy gray patina?
Nussbaum didn't resign as White
dence is insufficient to establish
ethics issues or conflicts" were
independent agency?
When morality must be specified as
The president himself said these
House counsel for nothing. But then
anyone within the White House or
raised by the numerous meetings
All of which demonstrates, again,
"post-Watergate," it should tell us
meetings were, uh, inappropriate.
again, all the other top officials who
the Department of Treasury acted
between White House and Treasury
the difference between ethics and
something about the relativity of
"Inappropriate" used to mean
participated in these unseemly con-
with the intent to corruptly influ-
officials to discuss the progress of
Government Ethics. Maybe the
values in America circa 1994.
not using the right salad fork. Now
versations seem securely in place.
€
e"
official investigation.
the federal inquiry into the White-
relation is something like that of
Not that this administration's
it's leaking word to the president,
The president says he was told
W
water affair and its links to the Clin-
music and military music -over-
leaders claim all these meetings
his lawheads and top advisers that
back in October that he was under
The relief approached jubilation
tons. Is there really any question
lapping here and there, but scarce-
were perfectly proper. Counsel Cut-
he's the subject of a confidential
investigation, but that he can't
in some quarters. "I would charac-
that it was unethical for top officials
ly synonymous.
ler says the confabs were, ahem,
criminal referral. Something tells
remember who told him. A citizen of
tel
this as much more than mod-
of an administration to know about
Richard Nixon was just born too
"inadvisable in hindsight." Does
us that the Justice Department
only average mettle might not be
erately good news," said Lloyd Cut-
able to forget exactly when, where,
ler, the White House (defense)
counsel. "I would characterize it as
PRESIDENT CLINTON ANNOLINCED
THE DOG 'MILTON'
REPUBLICANS,
how and by whom he was told about
..HOW TO MOUNT A
WILL BE ALLOWED TO
being the subject of a criminal refer-
very good news." Bring out the
TODAY THAT CRUCIAL WHITEWATER
THOUGH SUSPICIOUS,
COUNTERATTACK
champagne.
DOCUMENTS..
RESIGN LATER
ral to the Justice Department, but
WERE UNSURE..
AGAINST ADOG..
our president can be remarkably
The administration that promised
WERE
TODAY..
casual about these details. If his
to bring a new ethical standard to
ACCIDENTLY
BRILLIANT,
ethical sensitivity is less than keen,
government now indeed has brought
EATEN BY A
ABSOLUTELY
Mr. Clinton's general cool is phe-
forth: not getting indicted.
HOMELESS
BRILLIANT.
nomenal. An event that might
Robert Fiske, grand inquisitor,
DOG RESIDING
HEY!
engrave itselfindelibly on the mem-
revealed that his investigators had
IN THE WHITE
ory or conscience of ordinary mor-
ed into "more than 20 different
HOUSE
tals puts no dent in the calm of this
contacts, either face-to-face meet-
Will
sax player. Not since he couldn't
ings or telephone meetings," about
remember whether he was drafted
the Whitewater case between offi-
has Bill Clinton's forgettery seemed
at Treasury and White House
so formidable.
staffers. That's more meetings than
the administration has yet told the
country about. Maybe the number
Paul Greenberg is editorial page
be nailed down in the congres-
editor of the Arkansas Democrat
ai al hearings to come.
Gazette in Little Rock and a nation-
The secretary of the Treasury,
Cartoon from "Ramparts"/Russell Lay-Steven Miller
ally syndicated columnist.
The Washington Times FRIDAY, JULY 8, 1994
BC-ND--Editorial Rdp, ADV08, 1300
$Adv08
Advance for Friday, July 8, and thereafter
By The Associated Press=
Here is a roundup of recent editorial comment from North Dakota daily
newspapers.
The Bismarck Tribune
That Bill and Hillary Clinton need a legal defense fund should disturb all
of us. But what's a sitting president to do when he gets sued?
The White House was smart enough to restrict donations to individuals and
to $1,000 each, but that doesn't restrict people who represent special
interests and want something in return from writing the Clintons a check.
The public would be better served if professional lobbyists were also not
allowed to donate to the cash pool for the Clintons' defense.
The fund expects to foot the bills for the sexual harassment suit filed
against the president and to take care of defending the president and first
lady in the Whitewater scandal.
Legal costs, estimated at $2 million, will be deeper than the Clintons can
reasonably afford. The president earned $293,000 last year and was worth less
than $1.6 million in 1993. If it were citizen Bill Clinton being sued, it's
unlikely he would be spending $2 million in his defense. So politics has upped
the ante and a legal defense fund makes more sense than having our president
go into debt to defend himself.
The United States doesn't need the job of running the country to become
anymore of a rich man's game than it already is. And the taxpayer shouldn't
have to foot the bill for Clinton's alleged indiscretions.
We haven't had a really squeaky clean president for a long time, if we
ever had one.
The Clintons can have their legal defense fund; it appears to be
a necessary evil. But Bill and Hillary had best make sure the fund's
bookkeeping is above reproach; the American people are forgiving only up to a
point.
The Forum
After a brief respite during the July 4th weekend, the O.J. Simpson murder
story is back on television: daytime, prime time, all the time.
And the backlash against media `overkill'' is well on its predictable
way.
The story is not driven by the media. It's driven by a public with an
insatiable appetite for celebrity sagas, no matter how macabre indeed, the
more macabre, the better.
It's driven by the popularity of pseudo-news tabloid programs (Hard Copy,
A Current Affair) and the perversions showcased on talk shows (Donahue, Sally
Jessie Rafael, et al.) It's a ratings game, the results of which depend on
Americans' viewing habits, not on the merits of the story.
Americans by the millions are watching, even as they complain that the
media'' are overdoing the Simpson story. The broadcast networks are responding
to clear signals sent by viewers: Give us more. Disgust us, but give us more.
Outrage us, but give us more. Titillate us, but give us more.
The public is getting what it demands, regardless of the quality of the
information.
And credit clumsy prosecutors and manipulative defense lawyers with
feeding the misinformation mill in order to advance their cases.
Outrageous? Certainly. But no tabloid publisher or TV talk show producer
would pay a dime unless they knew that millions of readers and viewers that
public feigning indignance with media coverage would be consuming with gusto
every juicy morsel of bad information, every factoid, every speculative
interview and every sordid detail of Simpson's less-than-heroic life story.
So let's get real. Let's get honest. Don't wag an accusing figure at the
media in all its forms for reporting the Simpson story. In the American
marketplace, the stuff sells. And guess who's buying?
The Minot Daily News
Colombia is a country out of control. Drug-running terrorists, inspired by
insatiable demand from the United States, have created
a national culture of violence for the 35 million people in this predominantly
Catholic nation in northwest South America.
The ridiculous slaying soccer being what it is in Colombia, let's call it
an assassination of soccer star Andres Escobar only reinforces that
out-of-whack perception. The 27-year-old Escobar (no relation to murderous
Colombian drug king Pablo Escobar) was gunned down in a Medellin parking lot
early Saturday. Before riddling him with bullets, his killers had confronted
him over his role in Colombia's loss to the United States in the World Cup
soccer tournament.
Escobar, considered the gentleman of the Colombian team, wrote a newspaper
column a few days before he died. ``Please, let's maintain respect, he
wrote, signing off with, ``Until later, because life doesn't end here.
He was speaking figuratively, but was, as it turned out, literally
mistaken.
Though Colombia is both literally and figuratively a long way from North
Dakota, his message has applications here at home.
The great majority of people involved with small-time athletics are decent
and have things in the proper perspective. Still, every sports season we hear
tales of coaches whose selfish and idiotic ravings at umpires and referees set
an out-of-whack example for the kids they coach. Every season, we hear about
cursing fans who can't for the life of them see the game as a game, or about
know-everything parents whose abuse of a coach imbues their children with
shame and vindictiveness. Every season, we hear tales of athletes who are
poorly schooled in sportsmanship and personal responsibility.
Each time this happens, the sport, and the people involved, are the poorer
for it.
Grand Forks Herald
Big change broke over Indian country soon after Congress allowed tribes to
go after big bucks by opening Las Vegas-style casinos on reservations. Today,
there are at least 85 high-stakes casinos in 20 states, including five in
North Dakota and 19 in Minnesota.
Not everyone is happy about the boom and it's no surprise that some
members of Congress have proposed undoing what the Congress itself allowed.
Before amendments to the Indian Gaming Regulatory Act get too far down the
congressional pipeline, however, it would be wise to review both the legal
principles that gave birth to Indian gaming and the accomplishments of the act
itself.
The Indian gaming act represents a kind of reluctant concession on the
part of white lawmakers. It is that American Indian tribes are sovereign and
that they can govern their own affairs. Thus, activities that state
governments don't allow otherwise might be appropriate on Indian reservations.
It's up to Indian people to decide.
Congress will have a legal battle on its hands if it attacks this
principle of sovereignty, however unpopular Indian gaming might be in white
America.
A far better approach would be the one outlined in the act in the first
place. It provides for compacts between state governments and Indian tribes.
These compacts set out what types of gambling will be allowed in each state.
-END-OF-AUTOBREAK(1) -
-AUTOBREAK(2)-FOLLOWS
**** filed by:APW-(ND) on 07/06/94 at 16:34EDT ****
**** printed by:WHPR(JEL) on 07/07/94 at 08:47EDT ****
Analys
C
O
egal fund may be taxed
Although a written opinion is
By Frank J. Murray
not required, tax experts inter-
THE WASHINGTON TIMES
viewed were divided on whether it
Clinton deadline in suit extended
A prominent tax law analyst
is abnormal to proceed without
yesterday challenged the claim of
one.
LITTLE ROCK, Ark. (AP)
other issues, including the nor-
attorneys for President and Mrs.
A Washington tax expert who
A federal judge yesterday ex-
mally required response to the
Clinton that they need not pay in-
asked not to be identified said
tended the deadline for Presi-
suit's allegations, until the im-
come taxes on millions of dollars
withholding written assurances
dent Clinton to respond to a sex-
munity question is settled.
sought by their legal defense fund.
might be an attempt to limit intru-
ual harassment lawsuit.
Last month, Judge Wright
New York lawyer Lee A. Shep-
sive public scrutiny.
U.S. District Judge Susan
gave Mr. Clinton until Aug. 5 to
pard, writing in Tax Notes, also
"The absence of a written opin-
Webber Wright moved the dead-
file a detailed response to the
questioned the absence of a writ-
ion in my mind is not sinister. But
line back five days, to Aug. 10,
charges but said she planned to
ten ruling from the Internal Rev-
I agree with Lee Sheppard that it
after also moving back a dead-
decide before that date whether
enue Service or a formal opinion
would be helpful," he said. "The
line for the plaintiff, Paula Cor-
to permit the president to deal
from the Washington law firm of
Clintons must have a letter. Did the
bin Jones.
solely with the immunity ques-
Sullivan & Cromwell, which pre-
Clintons receive a letter that
Attorneys for Mrs. Jones had
tion.
pared the trust fund.
stated their tax consequences and
asked for an extension of their
Mrs. Jones charged in her suit
Michael Cardozo, executive di-
that didn't rise to the level of an
Friday deadline for responding
filed May 6 that Mr. Clintor
rector of the trust, said yesterday
opinion?"
to a motion that Mr. Clinton's at-
asked her for sex in 1991, while
there is no formal opinion "in the
Like others, however, he said an
torneys filed on June 27. Judge
she was an employee of the Ar-
classical
sense
with
footnotes
IRS opinion should be sought in
Wright yesterday extended that
kansas Industrial Development
and citations." He said he does not
such a prominent case.
deadline by five days, until
Commission, a state agency. She
know of a request for an IRS rul-
Rick J. Taylor, national director
Wednesday, because of a death
claimed she suffered retaliation
ing. He said trustees have raised
of the estate and gift tax unit at the
in the family of one of Mrs.
on the job after refusing the ad-
no such questions.
accounting firm of KPMG Peat
Jones' attorneys.
vances of Mr. Clinton, who was
A new CNN-USA Today-Gallup
Marwick, which the Clinton White
The June 27 motion by Mr.
governor of Arkansas at the
poll found that 80 percent of those
House has used, said Mr. Clinton
Clinton's attorneys asked the
time.
interviewed think the defense
could protect himself with such an
judge to allow Mr. Clinton to file
The Supreme Court has ruled
fund is inappropriate and that 92
ruling.
only papers related to the ques-
that presidents cannot be sued
percent would not donate.
"I don't think IRS would give
tion of whether the president
for official actions taken while in
Sixteen percent said raising
them a favorable ruling," Mr.
has to respond to civil lawsuits
office. But it has not been deter-
money to defend Mr. Clinton
Taylor said, seeming to agree with
while in office.
mined whether they can be sued
against Paula Corbin Jones'
Miss Sheppard, who listed several
Mr. Clinton's attorneys are
for actions taken before assum-
charges of sexual misconduct or
factors that could exclude the do-
asking to be allowed to put aside
ing the presidency.
Whitewater-Madison allegations
nations from the definition of tax-
is appropriate. Of the 7 percent
free gifts.
who said they would contribute,
Mr. Taylor said a formal opinion
become taxable if the IRS deter-
might not be allowed to deduct le-
most were willing to give more
from the law firm would cushion
mined the gifts were given in
gal bills as business spending,
than $750 rather than limit their
the Clintons from penalties if the
hopes of reaping personal benefit
Miss Sheppard wrote.
gift to under $10.
IRS demanded taxes on the fund.
or if they were intended to help Mr.
In an interview yesterday, Miss
If the donations were ruled tax-
IRS spokesman Frank Keith
Clinton do his job by increasing his
Sheppard said her article strad-
able income, the Clintons would
said the agency would respond
credibility with Congress or his
dled the questions in the absence
have to pay $396,000 for each $1
and be bound by its opinion if such
chances for re-election.
of a formal legal opinion.
million donated and would be sure
a written ruling were requested,
"Put another way, a president
"It's not a flat contradiction, but
to face arguments on whether the
but he declined yesterday to say if
who was not worried about the ef-
I can't make a flat contradiction
donations could be used to pay the
it had been requested, citing pri-
fect of Paula Corbin Jones' accusa-
because they didn't give an opin-
taxes.
vacy.
tions on his ability to persuade vot-
ion," she said.
M. Bernard Aidinoff of Sullivan
Several factors could lead the
ers might be able to brush them
Thomas Field, founding pub-
& Cromwell insisted last week the
IRS to rule donations are not gifts,
off, rather than scrambling to hire
lisher of Tax Notes and a lawyer
donations would be considered
Miss Sheppard said in Tax Notes,
an expensive lawyer," Miss Shep-
who worked in the Justice Depart-
gifts and would not be counted as
a publication circulated nationally
pard said.
ment's tax division, said he ex-
income. He is in France this week
among accountants and lawyers
If the money becomes taxable
pects significant response to the
and unreachable for comment on
specializing in tax matters.
on grounds the donations are
article, which he called solely
Miss Sheppard's article.
Basically, the donations would
business-related, the Clintons
Miss Sheppard's view.
NEA takes even harder line
against standardized testing
Union wants exams to be 'diagnostic' not 'high-stakes'
federal standardized tests, in-
By Carol Innerst
that other ways of testing eval-
THE WASHINGTON TIMES
cluded local tests among their con-
uation, for example proved so
cerns.
unreliable," he added.
The National Education Associ-
"It seems like a race out there to
The NEA's position on high-
ation (NEA), responding to a push
establish some kind of test or mea-
stakes testing is poles apart
to hold educators responsible for
surement to justify accounta-
from the stance taken by Albert
low student test scores, yesterday
bility," Mr. Cecil said. "So you have
Shanker, president of the rival
stiffened its long-held opposition
three levels of people out there
American Federation of Teachers
to standardized testing of stu-
trying to respond to public expec-
(AFT), who has backed rigorous
dents.
tations."
academic standards and assess-
The 2.2-million-member teach-
"The purpose of testing should
ments to measure what young-
ers union, concluding its annual
be to improve student learning,
sters learn in school.
convention in New Orleans, voted
gauge where a student is and help
"Standards, assessments, and
to battle "high-stakes testing," and
teachers figure out instructional
stakes if it doesn't count, no-
the use of test scores to compare
strategies," said NEA spokeswo-
body will take it seriously," Mr.
students, schools and districts.
man Nancy Kochuk. "Testing
Shanker said yesterday.
THURSDAY, JULY 7, 1994 The Washington Times
"High-stakes" means tests with
should be a diagnostic tool."
At a recent education confer-
consequences, such as promotion
The NEA favors "more authen-
ence at Brookings Institution, he
to the next grade, qualifying for a
tic ways of gauging and measuring
predicted that the lack of stakes
high school diploma, getting into a
what students have learned," in-
will doom education-reform ef-
gifted-and-talented program, or
cluding portfolios that showcase
forts.
getting into college. Some schools
a child's best work and other
Because anybody can get into a
use test scores as a measure of a
performance-based assessments,
college regardless of grades or
teacher's ability and to make de-
currently in vogue.
test scores, "none of this is going
terminations about programs and
Myron Lieberman, senior re-
to work unless we put stakes [con-
resources.
search scholar with the Social Phi-
sequences] in the picture," Mr.
"We think high-stakes testing is
losophy and Policy Center in Bowl-
Shanker said. "Without stakes, you
wrong, and we want to see it elim-
ing Green, Ohio, said: "They [the
can throw out [national] Goals
inated," said Michael Cecil, who
NEA] don't want to be held ac-
2000 standards."
teaches language arts at a middle
countable and don't want any form
Mr. Shanker, a former teacher,
school in Kirkwood, Mo.
of competition to be involved here.
does not think portfolios are any
Mr. Cecil was chairman of the
substitute for standardized tests.
subcommittee on testing and as-
"Even for them, it's an extreme
He prefers essay tests that require
sessment of the NEA's Resolutions
statement," said Mr. Lieberman,
students to write.
Committee, which drafted the lan-
co-author with Charlene K. Haar
Testing philosophy aside, the
guage of a resolution on testing
and Leo Troy of the newly-
NEA and AFT are in the midst of
adopted yesterday without floor
released book "The NEA and the
merger discussions.
debate by the 10,000-member Rep-
AFT: Teachers Unions in Power
The AFT, which meets bienni-
resentative Assembly.
and Politics."
ally, will open its convention in
The union, which has tradition-
"It's interesting that standard-
Anaheim, Calif., a week from to-
ally opposed mandated state and
ized testing grew out of the fact
morrow.
10
Illegal defense fund - Part Two
A
least we are getting some answers to the ques-
ual's official duties." The term "officer or employee"
tions posed in an editorial here last week in
is defined to include among others "an individual
response to the announcement of the
holding an
elective position in the executive
unprecedented creation of a "Presidential Legal
branch," and is thus applicable to the president. The
Expense Trust." The answers are lousy, but they are
crux of the matter, however, comes from that "sub-
answers.
section (b)," which authorizes the appropriate ethics
The most important series of questions is this: Did
office - the Office of Government Ethics, in the case
anyone in the executive branch set anything to paper
of the president - "to issue rules and regulations
purporting to assert that President Clinton can do
implementing this section and providing for such
what he has done - namely, set up a legal defense
reasonable exceptions as may be appropriate."
fund in which any person can contribute as much as
That takes us to 204(j), the exception on gifts to the
$1,000 a year to help out with Mr. Clinton's sky-high
president and vice president, which says: "Because
legal bills? How about the Office of Legal Counsel at
of considerations relating to the conduct of their
the Justice Department, which serves as the execu-
offices, including those of protocol and etiquette, the
tive branch's principal legal adviser and whose opin-
President or the Vice President may accept any gift
ions, published and unpublished, are accepted as
on his own behalf or on behalf of any family mem-
binding within the executive branch? How about the
ber, provided that such acceptance does not violate
Office of Government Ethics, which has the respon-
2635.202(c) (1) or (2), 18 U.S.C. 201(b) or 201 (c)(3),
sibility to police ethics regulations throughout the
or the Constitution of the United States."
executive branch? How about the Treasury Depart-
The argument emanating from the Office of Gov-
ment and the Internal Revenue Service, which rou-
ernment Ethics seems to be this: The presidential
tinely issue advisories and opinions on the applica-
legal defense fund is related to the conduct of the
tion of tax law in novel situations?
office in that its establishment allows the president
The issue of written opinions, memoranda and
to fulfill his official duties without worries about pay-
advisories is important because, quite simply, that
ing lawyers representing him while he is president;
is how the executive branch does business. Such
therefore, the establishment of the fund is exempt
opinions first of all demonstrate that the law as it
from the prohibition on gifts.
applies to the subject in question has been thoroughly
If this is the depth of the analysis the president has
researched. Second, they contribute to a body of law
relied on, he's in trouble. For one thing, as last week's
that in turn serves as precedent for future legal deci-
editorial noted, it is not obvious that an exception
sions by the executive branch. Third, they provide
written to cover the gift of a tribal mask from a vis-
accountability, in that they are signed by an appro-
iting African head of state would extend far enough
priate official of the government, whether it's the
to cover a multimillion-dollar gift fund. And are the
assistant attorney general who heads the Office of
president's private legal difficulties, ranging from
Legal Counsel or the director of the Office of Gov-
questionable financial transactions to allegations of
ernment Ethics.
the crudest sort of sexual harassment, really any-
And the answer, in the case of the president's legal
thing other than private?
defense fund, is no: There is nothing in writing. Not
More important, however, is the fact that the
even the president's own private attorneys have pro-
exception in 204(j) to the rule on gifts refers only to
duced a written opinion attesting to the propriety of
accepting gifts. It does not create an exception for
this arrangement.
soliciting gifts. It's the difference between a president
This is extraordinary. There would seem to be
who is allowed to accept a gold pen and a president
three possible explanations, and none is reassuring.
who is allowed to use the full resources of his office,
Either it did not occur to the president's lawyers, both
including his press and communications aides, in
those in government starting with White House
addition to private direct-mail consultants, to ask
Counsel Lloyd Cutler and those who represent the
Americans to send him gold pens. There is no excep-
president in private matters, that thorough research
tion for the latter in 204(j).
culminating in a written opinion was important -
This is apparent not only from the omission of
in which case the president has been ill-served by
"soliciting" from 204(j), but also by its very terms,
his lawyers and has been placed in a position of con-
which specifically state that acceptance must not vio-
siderable risk by them. Or the president's lawyers
late 202(c)(1) or (2), provisions detailing the "Limi-
concluded that they need not ask and could rely
tations on use of exceptions," which say: "Notwith-
instead on the verbal assurances they have appar-
standing any exception provided in this subpart,
ently obtained in the course of meetings with officials
other than 2635.204(j), an employee shall not: (1)
at the Office of Government Ethics (the only appar-
Accept a gift in return for being influenced in the per-
ent attempt to assess the propriety of this adventure)
formance of an official act; (2) Solicit or coerce the
- in which case, once again, the president has been
offering of a gift." In short, no soliciting gifts.
ill-served. Or the president and all his men decided
(It's odd that there appear to be cross-exceptions:
it would be better not to ask, because of concerns that
201 (c) says "notwithstanding any exception
other
they wouldn't like the answer, and instead to bull-dog
than
204(j)," whereas 204(j) says gifts may not vio-
their way forward in hopes of getting away with it
late 202(c)(1) or (2). The explanation may lie in the
in which case we have a president who thinks, or
fact that there is also a 202(c)(3) that goes unmen-
whose lawyers are advising him to act as if, he is
tioned as an exception to 204(j). It prohibits accep-
above the law.
tance of "gifts from the same or different sources on
Both the director and the deputy director of the
a basis so frequent that a reasonable person would
Office of Government Ethics have stated that the
be led to believe the employee is using his public
president's legal defense fund is hunky-dory, based
office for private gain" a test regulators might have
on their reading of a regulation C.F.R. 2635.204(j))
deemed inappropriate to apply to the president and
written to implement the law governing gifts to gov-
vice president. It's also quite clear that the cross-ref-
ernment employees (5 U.S.C. 7353). The statute
erences do not somehow permit a president to
says, "Except as permitted by subsection (b), no
"accept a gift in return for being influenced in the
Member of Congress or officer or employee of the
performance of an official act," since that is absurd
executive, legislative, or judicial branch shall solic-
on its face.)
it or accept anything of value from a person
The bottom line here is that the president, direct-
(2) whose interests may be substantially affected by
ly and indirectly, is soliciting gifts. He can't do that,
the performance or nonperformance of the individ-
and there is nothing in the law to suggest otherwise.
THURSDAY, JULY 7, 1994 The Washington Times
122
7/7/94
according to Jones, who spoke in a telephone interview.
Records: Rose Firm Was Dumped Over Conflict in
Tuesday, 2,862 were picked up, and Monday the number was
Foreclosure Case By Kevin McCoy and John Riley= (c)
3,245 the most for any single day.
1994, Newsday=
"It sounds low to me," said Embassy spokesman Stanley
Schrager, when he heard Wednesday afternoon's figure of
A conflict of interest by the former law firm of first
665 boat people. "I'd love to believe it's the new
lady Hillary Rodham Clinton prompted a federal banking
policy."
agency to end the firm's work on an $11 million Arkansas
He was referring to Clinton's policy, announced
foreclosure proceeding, newly released records show.
Tuesday, of sending rescued Haitians to an island off
The records, which confirm a recent Newsday
Panama instead of allowing some into the United States.
investigation, also show that former Associate Attorney
Making sure Haitians get the word about the policy
General Webster Hubbell, a longtime Clinton friend and
change, the U.S. Embassy bought radio time Wednesday and
former law partner, was more involved in the foreclosure
told listeners in the native language, Creole, ``If you
action than was previously known.
take a new boat one thing is certain: You won't get to the
Records released by the Resolution Trust Corp., an
United States."
agency formed to manage the bailout of the savings and
The latest boat people crisis began almost two weeks
loan industry, relate to a 3,200-acre "Utopian City"
ago, when Haitians began leaving en masse in small
community development project proposed in Maumelle, Ark.
vessels. Clinton's special adviser on Haiti, William Gray,
The Rose Law Firm, based in nearby Little Rock, initially
said the huge outflow was due to increased repression in
represented the RTC's legal interest as lead agency on an
the country.
$11 million mortgage on the project, which they assumed
But others, including Coast Guard officials, said it
from a failed Texas savings and loan.
was clearly related to the refugee program begun by
Newsday reported in March that the RTC dropped the Rose
Clinton June 16, when the United States began interviewing
firm in 1992 after concluding the agency's financial stake
boat people at sea and granting asylum to roughly a third
conflicted with the interests of Stephens Inc., a major
of them. Those with asylum were eligible to enter the
Arkansas-based investment banking firm and leading Rose
United States.
client. Stephens Inc. underwrote and owned a portion of the
Hopeful for the chance to get to the United States,
multimillion-dollar bond issues intended to develop the
poor, desperate Haitians began streaming out of the
Maumelle project, which was started but never completed.
country. Often the boats were so flimsy the passengers
RTC officials dropped the law firm because Arkansas law
could not have harbored any intentions of reaching Miami,
gave priority to the financial rights of one Rose client,
Coast Guard officials said. Rather, they only wanted to
Stephens, at the expense of another client, the RTC,
reach Coast Guard cutters that would take them to the
Newsday reported.
special U.S. immigration processing ship off Kingston,
Both in March and on Wednesday, an RTC spokesman
Jamaica, or to a special center set up last week on the
declined to discuss the Rose firm's termination. But the
U.S. naval base at Guantanamo, Cuba.
previously undisclosed records, released under the federal
Between June 16 and Tuesday, more than 13,800 boat
Freedom of Information Act, show that an RTC attorney
people were picked up.
specifically cited a legal conflict as the reason for
dropping the Rose firm.
(Optional add end)
In a March 26, 1992, letter to Shelley Greene, an RTC
monitoring attorney, Hubbell acknowledged that Greene
U.S. Embassy spokesman Schrager cautioned late
specifically cited an ``existing conflict" when she
Wednesday that more Haitians might be picked up. He said
discussed the termination in a telephone conversation with
he would like to see consistent daily reductions in the
Rose firm partner Allen Bird II.
number of rescues before he is ready to declare the
"Obviously, we take such an allegation very
massive exodus is coming to an end.
seriously," Hubbell wrote, "and if that is the basis
Trying to discourage Haitians from fleeing in boats,
upon which we are being discharged, we would ask that you
the United States has been encouraging them to apply for
give us the particulars so that we may discuss them with
asylum at U.S.-sponsored in-country processing centers for
you (Greene) or other RTC officials."
refugees. But the acceptance rate at the centers is only
In a telephone interview this week, Greene, now an
about 6 percent. What's more, those lining up to request
outside counsel for the RTC office in Dallas, would say
refugee status risk being seen by spies for the army or
only that "I really prefer not to comment about that
for the attaches, who have a reputation for frightful
matter right now."
brutality.
Hubbell, who resigned his Justice Department job in
Citing poverty made worse by economic sanctions and
March amid allegations with Rose partners that he may have
widespread repression against supporters of Aristide, poor
overbilled clients in cases unrelated to the Maumelle
Haitians around the country say they do not want to remain
project, could not be reached for comment. Hubbell's
there.
lawyer, John Nields, was unavailable this week, a secretary
More than 40,000 boat people left Haiti after the 1991
at his Washington, D.C., office said Wednesday.
army coup against democratically elected President
Nonetheless, Hubbell's letter to Greene undercuts
Jean-Bertrand Aristide. That exodus effectively came to a
statements that the former senior Rose partner had only a
halt in May 1992, when then-President Bush issued an order
limited role in the Maumelle case. Although Hubbell and
to return all Haitian boat people. Clinton, as a Democratic
Bird co-signed most of the federal court pleadings, Bird
presidential candidate, condemned the automatic
had told Newsday that Hubbell handled only a small
repatriations as inhumane. But then he decided to retain
percentage of the legal work on the foreclosure action.
the policy.
But Hubbell's letter to Greene shows he tried to
arrange a telephone conference so he could discuss the
Distributed by the Los Angeles Times-Washington Post
termination personally. Greene declined to say whether she
News Service
spoke about the issue with Hubbell.
Hillary Clinton was not involved in the foreclosure
proceedings.
The Maumelle case represents the third time the Rose
firm was at the center of an apparent conflict of interest
129
7/7/94
in its representation of federal agencies.
Ginsburg voted the liberal side of several key issues
decided this term. In perhaps the court's most important
(Optional add end)
ruling, she voted with Blackmun, John Paul Stevens and
David Souter against a majority decision granting broad
The RTC and Federal Deposit Insurance Corp. are
new rights to property owners against zoning or
investigating the firm's work for the federal government
environmental regulations that require them to give up
on a lawsuit involving Madison Guaranty Savings & Loan,
land or money.
the failed Arkansas thrift at the heart of the Whitewater
The court said property rights will be accorded the
investigation.
same deference as any other fundamental liberty protected
In that case, the Rose firm from 1989 to 1991 allegedly
in the constitution, a pronouncement that the dissenters
did not tell banking regulators that Hillary Clinton was a
said could lead to a wholesale redefinition of
partner with former Madison owner James McDougal in the
government's right to regulate the economy.
Whitewater land development project funded by Madison.
She took a strong stand against mixing church and
Hillary Clinton also has been criticized for
state, joining
representing the federal government in a banking lawsuit
a concurring opinion by Stevens likening New York's
against Dan Lasater, a longtime family friend. The case is
creation of a special school district allowing Hasidic
still under investigation.
Jews to run their own public school in Kiryas Joel, N.Y.,
to government-backed "segregation." The court ruled 6-3
Distributed by the Los Angeles Times-Washington Post
that the special district was unconstitutional.
News Service=
But in other areas, conservatives were more likely to
be pleased with Ginsburg's record. "I think she made
solid contributions to the court," said Alan Slobodin of
the Washington Legal Foundation,
a pro-business group.
Justice Ginsburg Steers Middle Course in 1st Year (Washn)
She voted against organized labor in two important
By Timothy M. Phelps= (c) 1994, Newsday=
decisions, one saying that government employers can under
some circumstances fire employees simply for expressing
WASHINGTON Justice Ruth Bader Ginsburg did
opinions, and another reversing a 50-year-old Department
something
of Labor rule that gave longshoremen and mineworkers the
in her first year at the Supreme Court that no other
benefit of doubt in disability cases. But she voted on the
justice in history has ever done.
other side in two other labor cases, dissenting from
She moved upstairs.
decisions that staff nurses are supervisors under the
Ginsburg, who has sometimes been accused of being
labor laws and that railroad employees could not collect
intellectually and personally aloof, turned up her nose at
damages for negligent infliction of emotional distress.
the small chambers being vacated by Justice Clarence
In civil rights, Ginsburg's voting was also mixed,
Thomas on the marble-lined first-floor hallway,
despite her history of crusading for the legal rights of
traditionally occupied by the junior justice.
women. She voted with the majority against a requirement
Instead, Ginsburg moved into modest but more spacious
that Florida maximize the number of seats for Latinos in
chambers for retired justices upstairs, a flight away from
the state Legislature, but dissented when the court ruled
her eight colleagues.
that a Georgia county's single (and always white)
The 61-year-old, New York-born jurist displayed the
commissioner form of government was legal.
same kind of independence in her rulings, which were
She signed the court's unanimous decision making it
neither as liberal as White House officials expected nor
easier for women to sue their employers for sexual
as conservative as many liberals had feared.
harassment (whenever a reasonable person would perceive
Shortly after Ginsburg was confirmed, 96-3, by the
the conduct as hostile or abusive), but she agreed with
Senate, a White House official bragged of having put one
the majority that the 1991 Civil Rights Act protecting
over on conservatives. He predicted Ginsburg would be more
women and minorities should not be applied retroactively.
liberal than Justice Harry Blackmun.
She was in the majority that ruled that people could not
But in the term that ended last week, Ginsburg was
be kept off a jury just because of their gender.
almost as likely to vote to the right of Blackmun as to
vote with him on cases that had a discernible
(Begin optional trim)
liberal-conservative divide.
In fact, in 54 of the 84 cases decided during the term,
Ginsburg disappointed those liberals who had predicted
some of which had no clear ideological bent, she voted
she would oppose capital punishment, voting to uphold the
with the court's most conservative member, Thomas.
California death penalty and to affirm the death sentences
Although Ginsburg's place in the dead center on a
of two prisoners even though the judge had given their
generally conservative court may have surprised some in
juries an incorrect definition of the ``reasonable doubt"
the White House, liberals concerned that she would ally
needed to convict. But she joined in a broad ruling by the
herself more with conservatives are so far breathing a
court that said condemned prisoners have a right to a stay
sigh of relief.
of execution and a lawyer while they appeal their state
She has been somewhat more liberal than some of us
convictions in federal court.
feared," said Herman Schwartz, a law professor at
In other criminal cases Ginsburg was very difficult to
American University in Washington. But Schwartz said
predict, voting as often with the prosecution as with
Ginsburg has yet to be tested on some key issues, such as
defendants.
state regulation of abortion rights.
In several major cases this term, liberals and
The court in the term just past managed to please civil
conservatives united to produce unanimous decisions. All
libertarians as well as pro-business conservatives while
the justices agreed that
deciding fewer cases than any court in 40 years. But the
a suburb of St. Louis had violated the First Amendment
expected replacement of Blackmun with a somewhat more
right of free speech when it prohibited signs in
conservative Stephen Breyer could mean different results in
residential neighborhoods. They also united to hold that
the term that begins in October. Breyer's confirmation
abortion clinics could sue Operation Rescue and other
hearings begin Tuesday.
antiabortion groups using obstructionist tactics for
130
GOP picks tough Whitewater counse
BY TERRY LEMONS
prosecuted a couple accused of
cus on the Washington aspects of
former partner in Little Rock'
Democrat-Gazette Washington Bureau
kidnapping and killing an Exxon
Fiske's Whitewater investigation,
Rose Law Firm, committed sui-
WASHINGTON Senate Re-
Corp. executive.
which encompasses the death of
cide on July 20, 1993. Fiske also
publicans have hired a former
Chertoff was a U.S. attorney
deputy White House counse! Vin-
said no criminal wrongdoing be
U.S. attorney to spearhead their
from 1990-94. Previously, he was
cent Foster and meetings be.
curred in meetings between
efforts during hearings into the
an assistant U.S. attorney in New
tween White House and Depart-
White House aides and federal
Whitewater Development Corp.
Jersey and in the Southern Dis-
ment of the Treasury officials.
regulators investigating the fail
affair.
trict of New York.
Fiske concluded last week
ure of Madison Guaranty Savirigs
Michael Chertoff, a New York
The Whitewater special coun-
that Foster, a Hope native and
& Loan Association.
lawyer, will serve as special
sel, Robert Fiske Jr., was the U.S.
counsel for GOP members of the
attorney in New York's Southern
Senate Banking Committee, Sen.
District from 1976-80, several few
Alfonse D'Amato, R-N.Y., said
years before Chertoff joined the
Wednesday.
office.
The committee will begin
Like Fiske, Chertoff comes to
Whitewater hearings no later
the Whitewater case after work-
than July 29.
ing for a New York law firm.
D'Amato, the committee's
Chertoff left his U.S. attorney's
ranking Republican, said
post to join the firm of Latham &
Chertoft will be a "great asset."
Watkins in May. He headed the
Chertoff, who was a federal
firm's white-collar crime division.
prosecutor in New Jersey, han-
Senate Democrats have hired
died cases Involving officials
William Codinha to be their spe-
with the state's largest savings
cial counsel during the commit-
and loan institutions. He also
tee hearings. Codinha once was
handled cases involving white-
chief counsel to the Senate Se-
collar crime.
lect Committee on POW-MIA Af-
In 1991, Chertoff won a con-
fairs.
viction against the mayor of Jer-
Separate House hearings Into
City for bank fraud and tax
Whitewater will begin July 26.
evasion. In 1992, he successfully
Both sets of hearings willfo
Clinton, accuser granted more
Gazette
time to file responses
Proes Services
The June 27 motion by Clin-
federá fudge Wednesday
ton's lawyers asked the judge to
xtend deadlines for
allow Clinton to file only papers
reside Clinton and Paula
related to the
ones 110 responses
whether the president has to
accusing Clin-
spond to civil lawsuits whilein
on of making unwanted sexual
office.
Clinton's lawyers are asking
CATES District Judge Susan
to be allowed to put aside oth-
Webber Wright gave Jones un-
er issues, including the nor
7/7/94
at July 13 to respond to Clin-
mally required response to the
ton's request that her suit be put
suit's allegations, until the im
on hold until after he leaves the
munity question is settled the
White House The original dead-
Last month, the judge gave
line was Friday
Clinton until Aug. 5 to file a de-
Arkansas Democrat
motion filed last week,
tailed response to the allega-
Chrison said be willinvoke pres-
tions but said she planned to de-
idential immunity to delay ac-
cide before then whether to let
tion in the suit. Clinton said the
the president deal solely with
Constitution gives presidents
the immunity question.
this immunity so they can con-
Jones alleged in her suit filed
centrate on their duties without
May 6 that Clinton asked her for
the distraction of private litiga-
sex in 1991 while she was an em-
tion.
ployee of the Arkansas Indus-
Wright on Wednesday also
trial Development Commission,
changed the deadline for Clin-
a state agency.
ton to respond to the allegations
She claimed she suffered re-
in Jones' lawsuit, from Aug. 5 to
taliation on the job after refus-
Aug. 10.
ing the advances of then-Gov.
Wright extended the dead-
Clinton. Clinton has denied her
lines after one of Jones' attor-
allegations.
neys asked for more time to pre-
The Supreme Court has ruled
pare a response. The attorney,
that presidents cannot be suied
Gilbert K. Davis of Fairfax, Va.,
for official actions taken while
said he needed an extension be-
in office.
cause of a death in his family.
But it has not been deter-
mined whether they can be sued
for actions taken before assum-
ing the presidency.
133
ATLANTA TONRNACICONSTITUTION 7/7/94
WE'LL HAVE TO GUESS WHO GAVE: The Paula Jo
legal
fund, for her sex harassment suit against Presi-
GEBBIE ON WAY OUT? Just barely a
after she was
dent Clinton, reportedly has brought in "some-
named national AIDS policy director, the search
thing under" $100,000 so far since it was set up
reportedly is on for Kristine Gebbie's replace-
June 1. The average contribution has been S18,
ment. The Washington Post says she will stay
and the biggest chunk of the money is $25,000 from
around only until a successor is found. Gebbie,
Guess jeans. But other donors will not be dis-
who was health secretary of Washington state, has
closed, unlike the disclosure list Clinton has prom-
maintained a low profile as AIDS czar, and her ten-
ised for his defense fund. Cindy Hays, the former
ure has been marked by little apparent accom-
Republican fund-raiser who is managing Jones's
plishment. Word is that the administration is look-
fund, says that keeping mum protects donors' ano-
mg for someone of stature who can command re-
nymity and prevents retaliation against those who
spect from all interests: the administration,
Paula Jones
Congress, AIDS workers and activists, the Nation-
Kristine
might have business with the government. Mean-
while in Arkansas, U.S. District Judge Susan Webber Wright ex-
2l Institutes of Health, the Centers for Disease
Gebbie
tended the deadline five days, to Aug. 10, for Clinton to respond to
Control and Prevention and the Food and Drug Administration. One
Jones's lawsuit.
possibility is Oregon Gov. Barbara Roberts, a Democrat, who is not
seeking re-election.
ELSEWHERE
Winners of last year's House travel derby, according to Roll Call
LEON LEAVES 'EM LAUGHIN': He's baaack, and then some!
Report Syndicate, were Rep. Floyd Spence (R-S.C.). who took five
New White House Chief of Staff Leon Panetta says he hasn't read
trips over 37 days to 19 countries, and Eni Faleo-
H.R. "Bob" Haldeman's recently published diary from his days as
mavaega, 2 Democratic delegate from American
President Richard Nixon's chief of staff But he does, however,
Samoa, who took five trips over 41 days to 14 coun-
speak gleefully about being fired by Nixon. Panetta told a senior staff
tries. Republican National Committee Chair
meeting Wednesday that he was camed as civil rights director for the
man Haley Barbour said conflict between tradi-
old Department of-Health, Education and Welfare because he re-
tional party activists and the Christian right "is not
fused to stop pushing for swift racial integration of public schools.
a problem" for the GOP and charged that the con-
This was in Haldeman's diary for Feb. 4, 1970: "Parettà had success-
troversy has been manufactured by Democrats.
fully resisted earlier efforts to remove him, so P [president] took the
Sixteen members of the FBI crime lab who
route at this time of simply announcing Panetta's resignation at a
searched Fort Marcy Park didn't find the suicide
meeting." Three weeks later, Haldeman wrote that Nixon "feels the
bullet that killed White House aide Vince Foster,
mly good thing we've done in this area is to fire Panetta."
Floyd Spence
but they did come up with a collection of likely Civ-
Il War artifacts, including the lip of a canteen, horseshoes, uails, &
military button and eight lead minie balls New Republic journal
editor Michael Kinsley, fascinated by the transfixion of editors and
reporters throughout the media with Jackie Onassis's televised fu-
neral, says be got the idea for a new cable funeral channel, in which
'the network would broadcast all funerais, all the time."
IT'S A FACT
Bill Clinton wears two kinds of shoes for running: New Balance
model 1500 athietic shoes, size 12EE, made in Maine with the words
"Mr. President" stitched in them, retailing for about S160; and Asics
GT-2 sneakers, which are made in Asia and retail for about S50. He
gets both as gifts from the manufacturers.
Special wrongs' in the workplace
While most Americans oppose legal recogni-
also exempts small businesses with fewer than
tion of homosexual marriages, poll after pell
15 workers. It would not requiro employers to
shows the great majority believe gays and les-
provide benefits for same-sex partners. It
bians have the right to work. In fact, most peo-
would not apply to uniformed members of the
ple assume it's against the law to fire a good
armed forces. The bill exempts religious orga-
employee just for being gay.
nizations, including church-run schools. It
Unfortunately, that is not true. Except in a
won't take effect retroactively. The remedies
few states and communities with anti-
for job discrimination would be the same as.
discrimination laws, It is legal to dismiss an
those permitted under Title VII and the Ameri-
employee for no reason other than sexual ori-
cans with Disabilities Act.
entation. It has happened numerous times in
Let's recap that: No, this bill would not put
Georgia in recent years. The most celebrated
gays into the military or force churches to hire
case involved the Cracker Barrel restaurant
gay ministers. No, employers would not have to
chain. In 1991; the chairman ordered his man-
rècruit gays. The only thing that would change
agers to fire any worker suspected of being
is that hard-working Americans could not be
gay. About a dozen people, including several in
fired on a homophobic whim, as happened to
Georgia, lost their jobs.
cooks and waiters at Cracker Barrel.
To stop such unfairness, a bill has been
Coretta Scott King endorsed the bill, saying
introduced in Congress. The Employment Non-
it would be a "logical extension" of the Bill of
Discrimination Act of 1994 would extend many
Rights. "For too long, our nation has tolerated
protections of Title VII of the 1964 Civil Rights
discrimination against this group of Ameri-
Act on the basis of sexual orientation.
cans who have worked as hard as any other
vAntl-gay hysterics will try to make the tired
group, paid their taxes like everyone else and
"special rights" argument again, claiming that
yet have been denied equal protection under
this bill would somehow put gays ahead of oth-
the law."
ers and force employers to hire gays. Such
She is exactly right and helps make it clear
arguments are lies.
that this bill is not about "special rights." It's
8 The bill explicitly prohibits gay quotas. It
about ending special wrongs.
WASHINGTON
Report: McLarty ready to
push closer to president
Outgoing White House chief of staff Thomas "Mack"
McLarty may push other staffers out of his way in order to
get closer to the president, Newsweek magazine reports. It
says McClarty, who becomes a senior counselor after being
replaced by Leon Panetta, may oust advisers George Ste-
phanopoulos or Bruce Lindsey from their current offices;
A clothes call
or McLarty could take over the president's private dining
room, eliminating Stephanopoulos' short cut to the Oval Of-
fice; or McLarty could take David Gergen's old office.
for Paula Jones
CAREER
MOVE:
Sen.
Nancy
Kassebaum, R-Kan, may be leav-
My
two
cents
Boy, Paula Jones becoming a No Ex-
ing the political arena to pursue
cuses jeans model was some surprise, wasn't it?
Jim
chancellorship of the University of
Bouton and Eliot Asniof's new novel Strike Zone (Viking,
Kansas. Kassebaum reluctantly
ran for re-election in 1990. She has
$21.95)
is
a
terrific
read.
I hope everybody looks in on
ABC's In a New Light AIDS special Saturday night.
said she did not intend to stay in
The Larry Sanders Show is
the Senate for an extended period.
one of television's all-time great
"There is truly a life after the Sen-
treats.
I don't love it yet, but I
ate," Kassebaum said. "I've always
must admit the more I watch
said I'm looking forward to going
back to Kansas."
By Doug Mills. AP
the World Cup, the more I like
soccer.
If I were on the Sen-
She has not been offered the po-
KASSEBAUM: May
sition, which is currently held by
ate Judiciary Committee, I'd
leave politics
have voted to remove baseball's
Gene Budig. He leaves the univer-
sity Aug 1 to become president of major league baseball's
screwy exemption from anti-
American League.
trust laws.
There has never, repeat nev-
NUKE
MILESTONE: An Air Force nuclear missile wing
er, been a funnier or wackier
cartoonist than The Far Side's
in South Dakota is going out of business, the first to deacti-
vate since the end of the Cold War. Three years ago, the
Gary Larson. Anybody no-
tice that in all three of the
LARRY KING'S
44th Missile Wing at Ellsworth Air Force Base, the "Black
Hills Bandits," had 150 multiple-warhead rockets aimed at
Knicks' wins in the NBA cham-
PEOPLE
the former Soviet Union. The last was removed April 7.
pionship, they scored 91 points
each time? I know I'm get-
News & Views
Written by Charmagne Helton
ting old because I can remem-
ber changing television chan-
nels by actually turning the knob on the set.
Jeff Bagwell of the Houston Astros is the least-known
superstar in sports.
I have yet to meet anyone of either
ELSEWHERE IN THE WORLD
gender who intellectually chose his or her sexual prefer-
ence.
I never thought I'd see the day when a $20,000
car would be described as "low-priced."
U.S. opens new embassy
Boy, I'm glad we added that extra second last week,
making my year longer.
The religious right, being very
in Bosnia with garden party
religious, loves their enemies, right? Would you be-
lieve there are actually some people who believe home-
The United States opened its new embassy in Bosnia-Her-
zegovina on the Fourth of July with a garden party that dou-
less people want to be homeless?
The trouble with Time's O.J. Simpson cover is that it
bled as an Independence Day celebration, minus fireworks
didn't look like an artist's work at all. When it's winter,
that might have been interpreted as shelling amid a three-
I complain about missing summer and now vice versa.
year-long civil war in the former Yugoslav republic.
"We agonized over having a party but finally decided do
Greats in all fields
something like this in a modest way with taste and bring a
bit of Americana to Sarajevo, said U.S. Ambassador Victor
How would you like to show up to an audition for a
voice-over commercial and find James Earl Jones wait-
Jackovich. The fare for 700 guests: grilled hot dogs and
ing to go in the room?
To me, the definitive big league
hamburgers with potato salad, cold sodas and beer.
ballplayer is Roberto Alomar of the Toronto Blue Jays.
Despite the holiday spirit, fighting persisted in Bosnia. In-
I'm looking forward to flying in the new Boeing 777
ternational mediators geared up for meetings that could de-
termine whether there is peace or more war in Bosnia,
If Tommy Lee Jones is on the screen, so are my eyes.
Taking nothing away from Tabasco Cat, I still think a
where majority Muslims declared independence from
healthy Brocco is the best 3-year-old thoroughbred in the
Serb-dominated Yugoslavia. (Fourth of July poll, 2A)
USA.
Lawrence Block's The Burglar Who Traded Ted
VIETNAM MIAS: U.S. officials trying to resolve the fate
Williams (Dutton, $19.95) is one fine summer read.
When you make up your list of great final scenes in mov-
of U.S. servicemen missing in action in the Vietnam War
ies, don't forget Edward G. Robinson and Fred MacMur-
have discussed the issue with officials from neighboring
ray in Double Indemnity Wow, it's almost Labor Day.
Laos. The delegation, led by U.S. Assistant Secretary of
State Winston Lord and Deputy Secretary for Veterans Af-
Larry King Live is seen nightly on CNN and simulcast
fairs Hershel Gober, met Lao Foreign Minister Somsavat
on the Westwood One radio network.
Lengsavat in Ho Chi Minh City then flew to Laos, where
investigators believe more than 500 U.S. troops may have
died. The officials are on a four-day visit to press Hanoi for
more cooperation on the MIA issue, the biggest remaining
hurdle to normalization of U.S.-Vietnamese relations.
MEXICAN QUAKE: Two people were reported killed
Monday when an earthquake measuring 5.9 on the Richter
scale struck the Pacific coast of the southern Mexican state
TUESDAY, JULY 1994 USA TODAY
of Oaxaca, Mexico's National Seismological Service said.
YEMEN FIGHTING:
Northern Yemeni forces said they
captured the eastern port of Mukalla, a key base for their
southern civil war enemies. Southern officials denied this.
BC-WHITEWATER-WITNESSES
CONGRESS PANEL SEEKS FISKE ADVICE ON WHITEWATER
WASHINGTON, July 5 (Reuter) - The powerful chairman of a House committee
has asked the Whitewater special counsel if calling top administration
officials before Congress would compromise his investigation.
House Banking Committee Chairman Henry Gonzalez wrote Robert Fiske and
attached a list of 44 current and former administration officials he said were
potential witnesses before the committee when it begins hearings late this
month.
Among potential witnesses were outgoing White House chief of Staff Thomas
McLarty, senior advisor George Stephanopoulos, Treasury Secretary Lloyd
Bentsen and Deputy Treasury Secretary Roger Altman.
Please review the list to determine if testimony from any of the
individuals potentially would compromise your ongoing probe, Gonzalez, a
Texas Democrat, wrote Fiske. The letter, written Friday, was made public
Tuesday.
Gonzalez has scheduled Whitewater hearings to start July 26, but told
Fiske that he would ``do everything in my power to ensure that the committee's
proceedings to not jeopardise your investigation.
Gonzalez's first session will cover the removal of Whitewater files by
aides to Clinton from the office of deceased White House aide Vincent Foster.
Ranking Republican Jim Leach of Iowa and other Republicans want to
expand the investigation beyond the narrow limits set by Gonzalez.
Fiske finished looking into matters involving Foster without finding
anything politically damaging to Clinton.
Fiske is still investigating the ties of Clinton and Hillary Rodham
Clinton to James McDougal, who owned a failed savings and loan in Arkansas.
Leach wants to investigate if Washington officials of the Resolution
Trust Corp interfered with an investigation of the savings bank, Madison
Guaranty Savings and Loan, by the regulatory agency's officials in Kansas
city, Missouri.
REUTER
**** filed by:RB--(--) on 07/05/94 at 15:14EDT ****
**** printed by: WHPR (JEL) on 07/06/94 at 08:12EDT ****
Summit ocus
WASHINGTON
for Clinton
Jobs at home
Clintons' legal defense fund
inappropriate, taxpayers say
From wire reports
One step, he said, would be
implementation of the General
President Clinton's legal
President Clinton has a one-
Agreement on Trade and Tar-
USA
defense fund is a dud with
word focus for the upcoming
ins - a gentle nudge to c
TODAY
CNN
taxpayers: 80% say it's inap-
economic summit: jobs.
gress to approve the interna-
propriate, 52% say lobby-
In a speech Tuesday before
tional trade rules.
GALLUP
ists' donations should be
embarking on an eight-day for-
Congress also has a
banned and 92% say they
eign trip including the Group of
merlock on Clinton's other do-
wouldn't contribute, accord-
Seven summit in Naples, Clin-
mestic initiatives - health
ing to a USA TODAY/CNN/Gallup telephone poll of 942
ton said he would press allies to
care and welfare reform and a
adults last weekend. The fund, accepting maximum individ-
do more to encourage global
crime bill.
ual donations of $1,000, has been established to help pay
economic growth.
So he insisted his trip would
legal costs for Clinton and Hillary Rodham Clinton regard-
The goal, he said, would be
carry domestic benefits. "If
ing their Whitewater land deals and a sexual harassment
to "create jobs in a world of
global markets grow, our ex-
suit against the president.
prosperity."
ports boom, and that means
Of potential contributors, most, 21%, would give between
"For a decade, our out-of-
high-paying jobs in America."
$11 and $25, with $50 as the median donation. The poll, with
control budget deficit robbed
He also will stop in Latvia to-
a 3 percentage point margin of error, records Clinton's low-
us of the standing to press our
day, Poland and Germany -
est approval rating since last July, 43%, down from June's
partners to act," Clinton told
with a speech in the former
previous 44%.
business leaders. "Well, now in-
East Berlin - in an effort to
Meanwhile, House Banking Committee Chairman Henry
stead of having the biggest defi-
bind former communist bloc
Gonzalez, D-Texas, said Tuesday he may call administra-
cit in the G-7, we have among
nations closer to the West at a
twn officials to Whitewater hearings July 26.
the
smallest.
We now have
time of economic and political
the standing and the credibility
insecurity.
ESPY
PROBE:
An independent counsel may investigate
to speak and to be heard.
Clinton will meet Russian
Agricultural Secretary Mike Espy's dealings with Tyson
"And we will say to our part-
President Boris Yeltsin at the
Foods Inc., the largest U.S. poultry processor, Justice De-
ners: We have done our part;
economic summit, where he'll
partment officials say. They've been probing whether Espy
you must do yours."
again be an observer.
illegally accepted free travel, tickets to sporting events, in-
cluding football playoff games, and other gifts from Tyson,
which has longstanding ties to President Clinton.
Clinton off to Economic Summit
Meanwhile, the Agriculture Department announced new
President Clinton is in Latvia today to start eight-day trip with
standards for inspecting poultry to reduce bacteria.
stops in four countries around the Group of Seven Economic
Summit in Naples, Italy. He's accompanied by first lady
Written by Charmagne Helton
Hillary Rodham Clinton. The schedule:
Today Riga, 'Latvia: Meets presidents of Latvia, Estonia,
Lithuania; speaks to Latvians.
Thursday Warsaw: Meets President Lech Walesa, visits
ELSEWHERE IN THE WORLD
World War II historic sites.
Friday-Sunday Naples: Group of Seven Economic
Craxi corruption trial opens
Summit; also meets Russian President Boris Yeltsin,
attending as observer.
July 11 - Bonn: Meets Chancellor Helmut Kohl.
- with Craxi in absentia
July 12 Berlin: Speaks at Brandenburg Gate.
Italy's biggest corruption case started Tuesday, putting on
trial a political clique that ruled for more than a decade.
A parade of witnesses are expected to testify about an era
of cozy relationships among Italian political parties, public
Riga, Latvia
administration and business through the 1980s.
Former Premier Bettino Craxi, the best-known of the 32
Warsaw, Poland
defendants, refused to budge from his villa in Tunisia. The
court, saying he would be tried in absentia, rejected defense
Berlin, Germany
Boon
arguments the former socialist leader was ill with diabetes.
Germany
Prosecutors accuse Craxi of taking $7 million in kick-
backs. Craxi says he is a victim of political vendettas.
Maples, Raly
U.S.-KOREA TALKS:
A North Korean delegation left
for high-level talks, beginning Friday in Geneva, with U.S.
Source: USA TODAY research
USA TODAY
officials that could prove crucial to resolving the long-run-
ning dispute over the North's nuclear program. North Ko-
rea's Communist government told former President Jimmy
USA SNAPSHOTS®
Carter last month that it was willing to take steps to resolve
Al
the nuclear dispute. After that pledge, North and South Ko-
A look at statistics that shape the nation
rea agreed to hold their first-ever presidential summit, set
July 25-27 in the North's capital of Pyongyang
Summit inflation deflated
S. AFRICA POLITICS
One problem President Clinton and other leaders won't have
:
President
Nelson
Mandela
to worry about at the July 8-10 Group of Seven.economic
moved quickly to appoint white banker Chris Liebenberg,
summit in Italy is inflation:
59, to replace Derek Keys, 62, the respected finance minis-
4.2%
ter who shocked the nation by announcing his resignation.
Keys was a holdover from the former apartheid govern-
3.2%
ment who helped make African National Congress rule pal-
Italy
atable to business. He cited personal reasons for stepping
Germany
3.1%
down but said he would stay in his post until October.
U.K.
2.7%
USA
2.0%
Projected
France
1994
Canada
1.6%
Inflation
Japan
1.2%
rate
USA TODAY WEDNESDAY, JULY 6, 1994
Source: Blue Chip Economic Indicators
By Marcia Staimer, USA TODAY
Whitewater probe
When an agent
attempted to look into
the room he was
by Hill bank panel
ordered back.
to call top officials
and FBI agents from looking
through Mr. Foster's papers or
belongings when they went to the
White House on July 22. FBI
agents were ordered to sit on
By Jerry Seper
AI
said the investigation of his death
chairs in a hallway while Mr. Clin-
THE WASHINGTON TIMES
was "compromised from the be-
ton's aides went through the doc-
ginning" by White House interfer-
uments, and when one agent at-
Rep. Henry B. Gonzalez plans to
ence.
tempted to look into the room he
call as many as 45 witnesses
Former Clinton campaign ad-
was ordered back to his chair.
including 15 White House officials
viser Betsy Wright and private in-
As the Clintons' personal law-
- for Whitewater-Madison hear-
vestigator Jack Palladino, who
yer, Mr. Foster handled the sale of
ings, scheduled to begin July 26
were actively involved in heading
their half-ownership of White-
before the House Banking Com-
off reporters looking into the
water, a real estate development
mittee.
Whitewater-Madison affair after it
on the White River in northern Ar-
The proposed witness list is out-
surfaced as a campaign issue in
kansas, and filed tax forms when
lined in a letter to Whitewater-
1992.
Madison special counsel Robert B.
Mr. Gonzalez also listed former
he discovered the partnership did
Fiske Jr. in an effort by Mr. Gon-
Associate Attorney General Web-
not file corporate tax returns over
zalez, the committee chairman, to
ster L. Hubbell, a former law part-
a three-year period when the Clin-
"determine if testimony from any
ner of first lady Hillary Rodham
tons were half-owners.
of the individuals potentially
Clinton's at the Rose Law Firm in
Other potential White House
would compromise your ongoing
Little Rock whose involvement in
witnesses are Mr. McLarty; White
probe."
a federal lawsuit involving a failed
House Counsel Lloyd N. Cutler;
"The Banking Committee is
Arkansas thrift has been chal-
Betsy Pond, Mr. Nussbaum's for-
committed to holding hearings
lenged, and Donald B. Mackay, a
mer secretary; Stephen R. Neu-
based on the bipartisan House
Justice Department prosecutor
wirth, associate counsel to the
leadership agreement," wrote the
who took over the Whitewater-
president; Mark Gearan, White
Texas Democrat. "Rest assured, I
Madison case after Mrs. Casey
House communications director;
will do everything in my power to
recused herself and later relin-
and Lisa Caputo, press secretary
ensure that the committee's pro-
quished it to Mr. Fiske after his
to Mrs. Clinton.
ceedings do not jeopardize your
Jan. 20 appointment.
Also listed are Harold Ickes,
investigation."
The House leadership, with bi-
deputy White House chief of staff;
The potential witness list has
partisan support, agreed June 15
some surprises, including:
to hold Whitewater-Madison hear-
senior adviser Bruce R. Lindsay;
U.S. Attorney Paula J. Casey in
ings but to limit them initially to
assistant John D. Podesta; senior
Little Rock, a friend of President
the "Washington phase" of the
adviser George Stephanopoulos;
Clinton's who declined to investi-
Fiske investigation. That would in-
associate William H. Kennedy III;
gate an initial criminal referral by
clude a review of the Foster death,
and former assistant David Wat-
government regulators in the
the handling of his papers, and
kins, who resigned last month over
Whitewater-Madison case and
meetings between White House of-
the use of a White House helicop-
then recused herself.
ficials and regulators looking into
ter on a golf trip.
Former FBI Director William
a failed Arkansas thrift owned by
Others on the Gonzalez list in-
S. Sessions, who was fired last
a former business partner of Mr.
clude Treasury Department and
July 19, the day before White
Clinton's.
Resolution Trust Corp. (RTC) offi-
House Deputy Counsel Vincent W.
Mr. Fiske, who also has been in-
cials connected to the Whitewater-
Foster Jr. killed himself, and has
vited to testify before the commit-
Madison probe or involved in con-
tee, has asked the House and Sen-
troversial meetings with the White
ate not to proceed with hearings
House, which Mr. Fiske has num-
until his investigators have com-
bered at 20 separate incidents.
pleted their inquiry and had an op-
They are, among others, Trea-
portunity to interview witnesses
sury Secretary Lloyd Bentsen;
and review documents.
Deputy Secretary Roger C. Alt-
The potential witness list in-
man; General Counsel Jean Han-
cludes former White House Coun-
son; Chief of Staff Joshua Steiner;
sel Bernard W. Nussbaum; Patsy
and senior RTC investigator L.
L. Thomasson, special assistant to
Jean Lewis, whose inquiry into the
the president; and Margaret A.
Whitewater-Madison case re-
Williams, Mrs. Clinton's chief of
sulted in the RTC criminal refer-
staff.
ral to the Justice Department.
They entered Mrs. Foster's of-
Mr. Fiske heads an investigation
fice less than three hours after his
into suspected illegal financial ties
The Bachington Times WEDNESDAY. JULY 1994
body was found at Fort Marcy
between Madison and Whitewater
Park in Virginia and took doc-
The former federal prosecutor is
uments on Whitewater Develop-
trying to determine if Madison
ment Corp., a partnership involv-
funds were improperly diverted to
ing the Clintons and James B.
Whitewater and to Mr. Clinton's
McDougal, owner of Madison
1984 gubernatorial campaign.
Guaranty Savings and Loan Asso-
Madison was seized by federal
ciation.
regulators in 1989 at a cost to tax-
Mr. Nussbaum has said that he,
payers of $50 million.
Miss Thomasson and Ms. Williams
The Senate voted 56-44 last
were in the office for about 10 min-
month, along party lines, to begin
utes. Park Police investigators,
Whitewater-Madison hearings by
who looked into the death and
July 29, but only after limiting the
ruled it a suicide, said the visit
scope of the inquiry and assigning
lasted at least two hours.
it to the Democratic-controlled
It is not known what the Clinton
Senate Banking Committee.
aides expected to find. Thomas F.
The Senate panel of 11 Demo-
"Mack" McLarty, who was White
crats and eight Republicans will
House chief of staff, had ordered
focus on meetings between White
the office sealed after learning Mr.
House officials and federal bank-
Foster was dead, telling Park Po-
ing regulators, the handling of the
lice he wanted to make sure no pa-
Foster papers, and the Foster
pers were removed. The office,
death.
however, remained unlocked over-
Senators, under terms set out in
night and was sealed only the next
the resolution offered by Senate
morning.
Majority Leader George J. Mitch-
Citing executive privilege, Mr.
ell of Maine, will be precluded
Nussbaum prevented Park Police
from asking questions about
Whitewater or Madison.
9
harassed in physical situations
Ship adrift
(physically assaulted), have had
We told you last week how
INSIDE THE
requests for sex, and promises of
more than 80 Republican con-
jobs and awards/career advance-
gressman had written to Presi-
dent Clinton asking for the resig-
BELTWA
ment. Women have been stalked.
Supervisors have had sexual rela
nation of Surgeon General
tionships with their permanent
Joycelyn Elders.
and temporary subordinates with
Dr. Elders, the lawmakers re-
no accountablity for their ac-
minded the president, "has re-
tions."
peatedly made remarks and
The complaint concludes that
taken stands outside the main-
us their latest T-shirt listing the
"women have been made to sit in
stream of American thought" on
top 10 reasons government-run
miserable silence in hostile work
such issues as drugs, condoms
health care is a bad idea.
environments because they
e
and homosexuality.
Reason No. 3: "Post office ser-
observed others being retaliated
Now the congressmen have
vice at Pentagon prices."
against, transferred out, or
heard from the White House, in a
forced to quit, and they fear it
letter sent to each dated June 29
may happen to them."
and signed by Susan Brophy,
Women In the woods
We phoned Forest Service
deputy assistant to the president
headquarters in Washington yes-
for legislative affairs.
Inside the Beltway has ob-
terday, which had no immediate
Ms. Brophy explained to the
tained a copy of a U.S. Forest Ser-
comment. But the women say, "If
lawmakers that Dr. Elders is "at-
vice Region 5 (Pacific Southwest
we fail to get a resolution through
tempting to accentuate issues,
Region) class-action complaint,
the agency process, we will let
central to the health and welfare
filed by more than 60 foresters,
the court decide the resolution."
of many Americans, that have
all women, who claim to be vic-
been often overlooked or ignored
tims of "sexual harassment, sex-
Death and liberals
by the mainstream."
based harassment (also known as
The Clinton aide closed her
gender harassment), hostile work
We were sent a copy of a letter
one-paragraph White House let-
environment and reprisal."
written by Thomas N. Edmonds,
ter with a rare admission:
The complaint, which numbers
president of Edmonds Associates
"Moreover, while the opinions
several pages, charges that the
Inc., a Washington political con-
expressed by the surgeon gen-
Forest Service region "has cre-
sulting firm, to Richard B.
eral do not necessarily reflect
Dr. Joycelyn Elders' job is
ated a class of women who have
McKenzie, an adjunct fellow at
those of the president or his ad-
apparently safe, even though her
suffered backlash and retali-
the Center for the Study of Amer-
ministration as a whole, the pres-
boss disavows her remarks.
ation."
ican Business.
ident remains confident in Dr. El-
"Over 60 Region 5 women have
Mr. Edmonds was writing in
ders and her ability to perform
Bill and Hillary" from him, his
identified themselves as
response to the June 1994 study
the tasks of the surgeon general."
wife and 10-year-old son.
qualifying under the above-stated
Mr. McKenzie wrote for the busi-
Ernest Lefever of Chevy Chase
complaint issues and bases. The
ness center, titled "The U.S. Sen-
Asking for It
was more charitable, enclosing a
problems are rampant, pervasive
ate and the Media: Is There a Po-
contribution of $5 for the fund.
and endemic," the complaint
litical Bias?"
Thanks to President Clinton
He added the P.S.: "Is this contri-
states, listing numerous "doc-
Mr. McKenzie's study con-
(and his newly created Pres-
bution tax deductible?"
umented incidents" that have
cluded there is no liberal bias in
idential Legal Expense Trust
Rick and Christyanne Dickson
been perpetuated against women.
newspaper coverage of the Sen-
Fund), our mailbox after the
of Nacogdoches, Texas, actually
Women, according to the com-
ate.
Fourth of July holiday was
wrote the Clintons a check for the
plaint, have been called sexually
"In one sense, you're correct-
crammed with letters sent by or-
amount of $00.00, writing on the
derogatory names and have been
it's tough to objectively define
dinary folks from all over the
dollars line beneath, "Not one
subjected to sexually derogatory
liberal bias. But, like pornogra-
country offering to help the him
damn dime & zero cents."
written comments - "with [writ-
phy, most people know it when
and his wife pay their legal fees.
ten] statements regarding 'PMS'
they see it," notes Mr. Edmonds in
Steve Tremper, an analyst in
Uh-oh
'Whore,' etc. Women have been in-
the letter, adding "there are three
Woodbridge, sent a check to the
correctly labeled 'lesbian' as a
things in life you can count on-
Clintons made out in the amount
Thanks, we think, to Citizens
derogatory term.
death, taxes, and liberal bias in
of 6 cents — "one cent each for
for a Sound Economy for sending
"Women have been sexually
the media."
UPDATE/PEROT
the GOP's efforts to unseat Mr.
Clinton in 1996.
to Vice President Dan Quayle,
Offer helps
The Republican candidate
is "to what degree do we as a
stands a much better chance
party want to formally work
in 1996 if Mr. Perot doesn't run
with him" because of a poten-
Republican
again because the Texan's
tial backlash caused by Mr.
supporters in 1992 were peo-
Perot's "cult of personality."
ple who had mostly voted for
But Mr. Luntz said that
campaigns
GOP presidential candidates
didn't affect the importance of
in the 1980s.
the Perot voters.
Frank Luntz, a GOP pollster
He said these voters agree
who worked for Mr. Perot in
with GOP criticism of the fed-
By Peter A. Brown
'992, said the Perot support-
eral government as inefficient
SCRIPPS HOWARD NEWS SERVICE
"S tend to agree with Repub-
and wasteful. With Demo-
ans on economic issues, but
crats controlling the White
There was never much
so on social matters like
House and Congress, the
question Republicans would
abortion.
Perot voters' anti-incumbent
eventually try to enlist Ross
Perot in their fight against
Support for Mr. Perot per-
bias could be a powerful tool
sonally is ebbing. An April
for GOP candidates this No-
President Clinton. The sur-
prise is that he volunteered.
1994 Gallup poll found that 37
vember.
By accepting Mr. Perot's of-
percent of Americans view
Although some may have
fer of $1 million to put on a
him favorably, 54 percent un-
become disillusioned with Mr.
favorably Just over a year be-
Perot, their sentiments about
network TV program to rebut
fore, in March 1993, the same
the federal government
the president on health care,
poll showed 66 percent viewed
haven't changed. and he re-
the GOP hopes to win over the
nation's biggest bloc of swing
him favorably, 28 percent un-
mains a powerful figure.
voters: The 20 million who
favorably. In November 1992,
Mr. Luntz added, "If Ross
Gallup found the country
Perot got on TV the night be-
voted for the Texas billionaire
for president in 1992.
split, with 46 percent viewing
fore the election and said vote
him favorably and 46 percent
out every incumbent, I believe
The decision comes as Mr.
The Washington Times WEDNESDAY, JULY 6, 1994
unfavorably.
that could lead to a dozen seats
Perot's personal popularity
has dropped sharply from
Membership of his organi-
changing hands by itself."
1992, when he won 19 percent
zation, "United We Stand
of the presidential vote.
America," is declining, Mr.
If he were to appear on such
Luntz said.
a show - that detail has yet to
Given that drop, the ques-
be worked out the symbol-
tion for the GOP, said Bill
ism and potential bridge-
Kristol, former chief of staff
building ramifications could
be a major development for
The Stephanopoulites
OI' B B revisited
Clinton's dandy
Ruth Shalit's article in the New
In the Wall Street Journal, Tim
Contemplating the
K just
Republic suggests at
st
some
W. Ferguson tells of his re-
past, the Boston Globe reported
of the Clinton youth are "the
searches into the "speculative
that it "looked particularly sweet
backbone" of the administration,
hayride" taken by that Yale tyro,
when Clinton's aides pondered
cooling the clash of personalities,
Hillary Rodham Clinton, with
the bullets they had dodged."
muffling the clash of ideas.
Robert Lee "Red" Bone, "one of
"The mood of the capital would
Kevin Thurm, for instance, is
the gamiest futures players out-
be strikingly different
if
credited with helping to end the
side of Chicago."
the new chief of staff had been
war between his boss, Health and
Regretting that Mrs. Clinton's
jeered, if health care reform had
Human Services Secretary
"cattle jackpot" will not feature
sagged to a halt, or if [special
Donna Shalala, and Hillary Rod-
in this year's Whitewater-Madison
prosecutor Robert] Fiske had
Kemp's big tent
ham Clinton over cutting the for-
hearings, Mr. Ferguson quoted
sought indictments of Clinton's
mer out of health care reform.
Mr. Bone's attorney, James Blair,
staff or found skullduggery in the
Jack Kemp told a Charleston
Speaking of Mr. Thurm at
as remarking to Commodity Fu-
death of lawyer Vincent Foster.
Republican fund-raiser last week
HHS, Joshua Steiner at Treasury
"Clinton critics, however, were
that the GOP's "emergence as the
tures Trading Commission inter-
and Ronald A. Klain at Justice,
rogators, "You might observe
not chastened. 'This is very good
country's dominant political
Ms. Shalit says, "The nature of
there's a difference between the
news for a president who believes
force hinges on whether it can
the Stephanopoulites' success is
Ozark hills and the big urban
the standard by which his presi-
open its doors wide enough to at-
more revealing than their age.
cities as to how people do busi-
dency should be judged is that he
tract black, Hispanic and Asian
"For these are the new breed
ness."
is never found guilty of a crimi-
voters."
of professional meritocratic poli-
"So true," said Mr. Ferguson.
nal act,' said a sarcastic Rep.
The Charleston Post & Courier
ticians, obsessed with process
"Which is why, in fathoming the
Richard Armey, the Republican
quoted him: "George Bush lost
and bureaucratic agility. They
thought of today's first lady
from Texas who chairs the House
the race, in my opinion, because
are politically partisan, but they
mixed up with this crowd, it
GOP caucus."
he got only 10 percent of the mi-
are unencumbered by philosophy.
might have been useful to see
nority vote. I think it's possible to
some of these folks appear before
Mum Jones
get close to 40 or 50 percent
"Under their watch, things get
a bank of congressmen and their
given the fact that the Demo-
done. Because of them, the
aides. How useful, we are left to
Don't expect Paula Corbin
cratic Party has become so
administration is more effective,
speculate."
Jones to follow the president's
elitist. It takes the black vote for
less incoherent.
They are the
lead and disclose the names of
granted."
president's perfect children."
All aboard — sort of
donors to the fund set up to help
Mr. Kemp said such issues as
pay legal costs in her sexual mis-
"self-sufficiency and being tough
Today's prediction
Better duck, Bill, Jay, Bob &
conduct suit against President
on crime are key promotional ele-
Al: The new Senate subway sys-
Clinton, says Scripps Howard
ments as an appeal to attract mi-
The Chicago Tribune's Cla-
tem that is supposed to open this
News Service.
norities eager for a piece of the
rence Page: "Jesse Jackson will
week, coming in at a cool $18 mil-
Cindy Hays, the former GOP
American Dream."
run against Bill Clinton in '96."
lion, isn't for everyone, discov-
fund-raiser who is managing
ered the Boston Globe's Jill Zuck-
Mrs. Jones' fund, says keeping
Double your pleasure
Gebbie ready?
man.
mum protects donors who prefer
The high-tech trains were de-
anonymity and prevents retali-
In Obetz, Ohio, Mayor Mark
The administration is "taking
signed for standard-size folk.
ation against those who might
Froehlich isn't just another two-
the first steps toward ousting"
That means riders who are over 6
have business with the govern-
faced politician, says Associated
AIDS czar Kristine Gebbie by
feet 4 inches tall will have to
ment.
Press. He has a matching body to
creating a short list of possible
scrunch down: Sens. Bill Bradley,
Since it was set up June 1, the
go with his second face.
replacements, says Newsday.
John D. Rockefeller IV, Robert F.
Jones fund has brought in "some-
Mr. Froehlich, mayor of this
But sources warn there is ten-
Bennett and Alan K. Simpson.
thing under" $100,000, Ms. Hays
Columbus suburb and a candi-
sion over whether the next AIDS
Mr. Bradley said merely, "I'm
said. The average contribution
date for Franklin County commis-
czar should be a charismatic
used to ducking." At 4-foot-11,
has been $18; the biggest was a
sioner, tapped his identical twin,
voice who can better sell the pro-
however, Sen. Barbara A. Mikul-
$25,000 check from Guess jeans.
Michael, to help him get recog-
gram to the public, someone bet-
ski, who is on Capitol Architect
nized on the campaign trail.
ter able to work with Congress on
George M. White's case, was out-
The obliging brother traveled
policy, or whether the post
raged. "The architect of the Capi-
Ridge seeks unity
from his Georgia home to stand
should be abandoned in favor of a
in for Mark at one of three Inde-
tol strikes again. He continues to
special staff position at Health
Pro-choice Rep. Tom Ridge,
miss the mark."
pendence Day parades running
and Human Services.
GOP gubernatorial candidate, de-
simultaneously around the
Until that is settled, no official
nies pro-life activist Marguerite
county. "That way, we can be on
announcement about her fate will
Now, the blitz
"Peg" Luksik's claims that his
both sides of the street," Mark
be forthcoming. One official was
With health care battle lines
people made "promises" and
said.
quoted as saying, "The White
"threats" in an effort to get her to
clearly drawn between Demo-
House is determined to get
give up a bid for governor of
crats and Republicans, the voice
it right this time."
Pennsylvania.
of the people may prove para-
Mrs. Luksik had contended
mount, says USA Today. That's
that she had been offered the
Today's quote
why both sides plan a blitz:
Administration officials hit the
post of state secretary of educa-
On "The McLaughlin Group,"
road this week with a new mes-
tion if Mr. Ridge were elected
Jack Germond said, "You don't
and that her day care center
sage, focusing on the medical
change Bill Clinton by putting
would be scrutinized if she per-
insecurities of the middle class.
Leon Panetta in as chief of staff."
TV ads and a bus excursion for
sisted in running as an indepen-
dent.
reformers will also be created.
Futures
Meanwhile, Mr. Ridge's pri-
Opponents of comprehensive
reforms plan heavy advertising.
mary opponents told the Repub-
Formally ending rumors that
lican State Committee that they
he too would run, Rep. Ernest
They will be led by the health in-
are endorsing him for governor.
Jim Istook, Oklahoma Republi-
surance industry's reinvigorated
Attorney General Ernie Preate,
can, endorsed another Oklahoma
"Harry and Louise" campaign,
now at $10 million and counting,
runner-up in the primary, said he
Republican, Rep. James M. In-
had "bonded" with Mr. Ridge.
hofe, for the seat of retiring Sen.
said USA Today.
There were also reports of sup-
David L. Boren, a Democrat.
port from pro-life forces. Rick
Hillary's choice
Schenker, executive director of
Emotional opposition
Health care reform legislation
the Christian Coalition, said,
At least a quarter of the pop-
has become a contest of politics
"Most of our people are unifying
ulation tells pollsters they
and principle and "it is a mark"
behind the entire ticket."
"strongly disapprove" of Presi-
of Hillary Rodham Clinton that
dent Clinton — a measure of
"principle remains a contender,"
Looking for Pat
presidential opposition almost
says Michael Wines in the New
The Manchester Union-Leader
unheard of during a period of
York Times.
peace and moderate prosperity,
Mr. Wines adds, "It is also why
reports that commentator Pat
Buchanan's "organization is alive
said the Los Angeles Times.
some suggest that Mrs. Clinton,
and well and in Iowa, of all
"Within this group, pollsters
whose tenacity many credit with
estimate that perhaps half
pushing health care to the House
places, where he barely cam-
about 30 million Americans-
and Senate doorsteps, is less
paigned" in 1992.
While Mr. Buchanan "did
nurture a dislike of Clinton that
suited for the double-jointed bar-
The Times WEDNESDAY, JULY 1994
burns with the pure flame of ha-
gaining that is probably needed if
poorly" in the recent Iowa GOP
an insurance plan is to become
straw poll, his organization im-
tred," the Times' David Lauter
law."
pressed some top Republicans,
added.
the Union-Leader said. At the
He said Mr. Clinton's back-
same time his New Hampshire
ground of draft avoidance and al-
supporters hunger to be in touch.
leged marital infidelity make him
They understood campaign-
an inviting target. But both con-
style Buchanan appearances
servative and liberal analysts say
were forbidden by his CNN con-
the intensity and extent of
tract. What was he doing in Iowa?
attacks signal something more.
they ask. And if the contract in
Democratic pollster Mark
fact allows political activity,
Mellman told Mr. Lauter, "We've
when's he coming their way?
entered an era in which people
are more shrill, more negative.
Clinton is just an example of that.
There is, today, a new-found in-
stitutionalization of hate of
antipolitician hatred."
bc-sun-editorial a1210
(bal) (ATTN: Editorial page editors)
Fiske on Whitewater
(c) 1994, The Baltimore Sun= The following editorial appeared in Sunday's
Baltimore Sun=
Legally speaking, Bill and Hillary Clinton are surely pleased with Special
Prosecutor Robert B. Fiske Jr. 's first report on his investigation into their
Whitewater real estate interests and Whitewater-related matters. On a personal
level, it was surely not pleasant to read the investigator's detailed report
on Vincent W. Foster Jr. 's depressed state and attendant miseries prior to his
suicide.
Foster, the deputy White House counsel, old friend of the president and
law partner of Mrs. Clinton, killed himself, Fiske concludes. That will surely
cause distress among the most perfervid of the Clintons' attackers, who have
been suggesting Foster may have been murdered to cover up some Whitewater
crime. Not only was there no foul play, says Fiske's report, but there is no
evidence that the suicide was related to Whitewater in any way. That undercuts
another widespread rumor: Foster killed himself out of guilty knowledge of the
Clintons' illegalities involving Whitewater and its links with the failed
Madison Guaranty S&L in Arkansas.
The Clintons should be pleased with a third aspect of this report. Fiske
and his staff looked into reports that administration officials had improperly
pressured Resolution Trust Corporation officials who were investigating a
possible Whitewater-Madison link. There is `insufficient'' evidence of
corrupt intent or criminal violation by anyone at the Treasury Department or
at the White House, the special prosecutor concluded.
This report is not going to end the Whitewater story certainly not the
so-called Arkansas phase of it, to which Fiske will turn his full attention
now, nor even the Washington phase with which his Thursday report dealt. The
Senate and House both have plans to look into the Washington phase this month.
These hearings will almost certainly be highly politicized.
That was evident in the way the Senate arrived at its decision to
authorize its banking committee to look into the matter. So partisan was the
debate that usually mild-mannered, moderate Maine Republican Sen. William
Cohen charged that the Democrats were `hardening the hearts and the spirits
of some of us who have dedicated their careers toward seeking compromise.
The Senate had rejected on a straight party-line vote a Republican
resolution calling for a probe of any Whitewater-related administration
activities. Then it passed a resolution, also on a straight party-line vote,
to limit its probe to the specifics Fiske had already investigated.
Division in the House, where a similar committee investigation will be
held, is equally partisan, and likely to be even more contentious. The
principal congressional critic of Whitewater matters is the ranking Republican
on the House Banking Committee, and the most dogged protector of the president
is the Democratic chairman.
Expect more heat than light. That is a pity, but it has ever been thus.
Politics is politics.
Distributed by the Los Angeles Times-Washington Post News Service=
**** filed by:LAWP(--) on 07/04/94 at 02:19EDT ****
**** printed by:WHPR(JEL) on 07/05/94 at 08:28EDT ****
Analyst Charles E. Cook:
"Watch Ohio. That's going to be a
Inside Politics
key state. Michigan and Ohio are
the two states that really count in
presidential campaigns."
Don Sweitzer, Democratic Na-
tional Committee political direc-
tor, said: "Pay attention to what
happens in Ohio this year. Mich-
igan and Ohio always are key bat-
tleground states for us."
Mr. Cook sajd he "initially was
skeptical" of Mr. DeWine, whom
he described as "a very nice,
very capable guy - maybe a lit-
tle on the boring side. But in this
kind of year, beige may be beau-
tiful."
Compiled by Alan McConagha
"I think I'd rather be boring
than controversial in this race,"
the outcome approaches univer-
Mr. Cook said, adding that Mr.
Hillary's 'cheap shot'
sal coverage, he will have tri-
Hyatt is "controversial both in-
Roll Call was moved to editori-
umphed against the odds and his
side and outside his party."
alize: "Taking a leaf from Rush
zigging and zagging will be for-
Limbaugh's Congress-bashing
gotten.
book, first lady Hillary Rodham
But critics wonder whether he
Lure of camp
Clinton has enraged members of
has ceded too much to Republi-
both parties by suggesting that
cans, ponder the meaning of his
In noting President Clinton's
Congress is giving itself a perk
first proposal and question the
newly found interest in Camp Da-
with its own health coverage."
level of energy being expended to
vid, the New York Times says it
"Dishonest on two counts," de-
hold Democrats to a reformers'
was Hillary Rodham Clinton who
clared the Capitol Hill newspa-
concept of the legislation.
lured him back to the Cotoctin
per. The members' plan is avail-
In talking to skeptics of Mr.
complex he once avoided.
able to 2.4 million other federal
Moynihan, Ms. Toner made a use-
"Like each of his predecessors
employees, including Mrs. Clin-
ful discovery: "It is a measure of
since Franklin D. Roosevelt, Mr.
ton. It requires higher employee
power in Washington that people
Clinton seems at last to have dis-
costs than workers face in
are far more willing to criticize a
covered the compound that was
many large corporations. It also
president than a man who con-
founded as a wartime retreat
offers more options than the Clin-
trols tax legislation."
to be an antidote as well to Wash-
ton plan.
ington and all its swampiness,"
"But perhaps more important,
Corruption scoring
wrote the Times' Douglas Jehl.
and more outrageous, is Mrs.
This was the third weekend in
Clinton's cheap shot at the institu-
GOP pollster Frank Luntz says
a row he went to Camp David
tion.
It's not very smart ei-
the name of former House Ways
with only Mrs. Clinton and their
ther," the Capitol Hill newspaper
and Means Chairman Dan Ros-
daughter, Chelsea. What he likes
said.
tenkowski is beginning to
about it most, one official told Mr.
come up unsolicited in his con-
Jehl, is that "he doesn't have to
Sasser gains
versations with voters. Mr. Luntz
bother with you and he doesn't
sees this as a signal that the GOP
have to bother with us."
Gannett News Service says
message that Democrats are re-
Sen. Jim Sasser's bid for Senate
sponsible for corruption in Wash-
majority leader undercut notions
ington is getting through.
of a regional contest with the an-
More to come
nouncement of public support
The legal fund
The first stage of the
from two Western Democrats
Whitewater-Madison official
Sen. Patty Murray of Washington
"In purely political terms,
probe cleared President Clinton,
and Sen. Max Baucus of Mon-
President Clinton's decision to ac-
but he still "has to endure a long
tana.
cept private contributions to pay
summer of public inquiries and
Earlier, Sen. Russ Feingold,
his legal bills is awkward at
revelations about his past,"
Wisconsin Democrat, and Sen.
best and potentially damaging at
says the Wall Street Journal.
Barbara Boxer, California Demo-
worst," write columnists Jack
Additional hurdles, such as de-
crat,also backed the Tennessee
Germond and Jules Witcover.
velopments in the Paula Corbin
Democrat. This also dispelled
They added in the Baltimore
Jones case, will produce a "drum-
predictions that his support
Sun, "It is hard to challenge the
beat of bad publicity
and it
would be confined to senior mem-
White House contention that, in
couldn't come at a worse time.
bers.
the words of Press Secretary Dee
This autumn, Mr. Clinton will
Both Mr. Sasser and his rival,
Dee Myers, it is 'in the best inter-
face a pivotal point in his presi-
Sen. Tom Daschle, South Dakota
est of the country to have these
dency.
Democrat, claim more than 20
bills paid.'
"Indeed, just as he faces re-
votes. The Tennessean said the
"A president has too much to
newed scrutiny on Whitewater,
race is considered very close,
do to be worrying about scraping
Congress will be deciding the
with Mr. Sasser slightly ahead.
up the money for his legal bills.
fate of his chief domestic prior-
"But the picture of Bill and
ity, a health care overhaul."
The Moynihan mystery
Hillary Clinton being protected
The Journal said the
by the fat cats who can afford
Robin Toner of the New York
$1,000 is not one that his cam-
White House is worried enough
Times writes that a fundamental
paign managers would prefer to
about that prospect to assign for-
question arises among the weary
mer Chief of Staff Thomas F.
offer to the electorate."
troops of the health care strug-
McLarty to lead its effort to bol-
gle: Did it have to be this hard?
ster the president's public image.
How much of "the confusion
Ohio
and brinksmanship" of the past
The Dayton Daily News re-
month was due to the idiosyncra-
ports that national analysts are
Today's quote
sies of the Senate Finance Com-
developing a consensus on the
Outgoing White House Chief of
mittee and how much to those of
Ohio Senate race between GOP
Staff Thomas F. McLarty says of
its chairman, Daniel Patrick
Lt. Gov. Mike DeWine and legal
successor Leon E. Panetta: "What
Moynihan?
entrepreneur Joel Hyatt, a
this White House really needs is
Mr. Moynihan's defenders ar-
Democrat: "It's important, and
a chief of staff who can read Ma-
gue he held a bad hand. And if
it's close."
chiavelli in the original Italian."
The Bashington Times MONDAY, JULY 4, 1994
Korean
bridges
OP-ED
NEA's
Alexander, the chairman of the
gaps
National Endowment of the Arts, with
elitist understatement, told The Wash-
ington Post. "I appreciate that some
with risks
people would find this art difficult.
theater of
Americans are certainly not used to
seeing bloodletting except in films."
She's right, but artistic indulgence
By Michael Breen
hardly justifies creating a public-
THE WASHINGTON TIMES
the sick
health hazard. Lady MacBeth can
SEOUL When ae strolled
cry "Out, out damn spot," but the
through the Panmunjon truce vil-
bloody hands of the actress need
lage last month to workout details
not hover over us to feel the terror
of this month's Korea summit,
of the murderous act. (Shakespeare
the North's chief delegite raised
I magine that Mimi, the tragic
did it with suggestion.)
his arms in the air and waved vig-
consumptive heroine in the Puc-
This is the first controversy on
orously to a crowd of foregn press
cini Opera "La Boheme," played
Miss Alexander's NEA watch and
photographers.
by an actress who really did have
she gave less than an award win-
The gesture from 1 man
tuberculosis, spits blood into a
ning performance on behalf of her
whose country
handkerchief and then throws the
agency. When Sen. Robert C. Byrd,
is in the interna-
handkerchief into the audience.
West Virginia Democrat, and Sen.
NEWS
tional doghouse
Imagine a medieval play about
Don Nickles, Republican of Okla-
ANALYSIS
over its mclear
the Black Plague that sends highly
homa, who are responsible for over-
progran -
contagious victims of the disease
seeing NEA funding, asked her to
showed unexpected confidence,
into the audience to sneeze and
ensure that government money
especially compared with the
cough on the spectators.
would not be used to pay for such
scholarly demeanor of his Souh-
Or conceive of Father Damien,
performances in the future, she
ern counterpart, Deputy Prine
the 19th-century
Minister Lee Hong-koo.
missionary priest
Meet Kim Young-sun, a key fig-
who treated lep-
Instead of spending
ure in North Korean policy-
ers and who actu-
making circles and a man with a
ally got leprosy
himself, in a
money on the theater
great deal to be confident about.
As secretary for South Korean
drama leading
of AIDS, why not
affairs of the (North) Korean
actors with limbs
spend it on the horrific
Workers' Party and chairman of
decaying from
the Reunification Policy Commit-
the disease down
the aisle of a the-
reality of AIDS?
tee of the Supreme People's As-
sembly, he is point man for the
ater, forcing an
all-consuming national goal of uni-
Suzanne
audience to expe-
fication.
rience their ter-
defended the play's artistic merit as
For experts trying to read the
Fields
ror, live.
a modern day exploration of mar-
tea leaves on North Korea, Mr.
If your imagi-
tyrdom through AIDS, and insisted
Kim is an important man to watch
nation is large enough to encom-
that it's impossible to micromanage
simply because Pyongyang's de-
pass such grotesque fantasies you'd
government grants.
gree of moderation on the nuclear
probably say that the playwright
Alexander, a novice in
issue has in the past three years
had gone a tad too far to break down
the-Beltway politics, unwit-
risen and fallen with him.
the barriers of reality between
tingly goes to the heart of the mat-
His recent ascendancy is being
actors and audience. You'd probably
ter. The NEA risks wearing out its
taken as a key sign that President
The Baohington MONDAY, JULY 4, 1994
also say you'd never buy a ticket to
welcome this time, it's not Jesse
Kim Il-sung has, for now at least,
the play, even if it won a Tony. And
Helms who's the villain. Nobody any
decided to scale down the confron-
playwrights depend on audiences to
longer pretends that money isn't
tation with the United States.
pay for their performances.
tight, and if she can't micromanage
On the surface, Mr. Kim ap-
At least, that's how it used to be.
the money there's growing senti-
pears as hard line as any other of-
Now such imaginative playwrights
ment in Congress to take it away and
ficial in North Korea.
can be supported by a grant from
be done with it. Instead of spending
"If anybody tries to violate our
the National Endowment for the
money on the theater of AIDS, why
sovereignty or infringe upon our
Arts and don't have to please any-
not spend it on the horrific reality of
supreme national interests, we are
body but themselves and the
AIDS? Miss Alexander's politically
ready to cope with it," he told a
bureaucrats who sign over the
correct but politically out-of-date
delegation visiting Pyongyang in
money. That's how Ron Athey's play
response moved the Senate Appro-
April. The warning came in a two-
called "Four Scenes in a Harsh
priations Committee to recommend
hour monologue peppered with
Life," was produced at the Walker
cutting $7 million (5 percent of its
praise of the "Great Leader" and
Art Center in Minneapolis.
budget) out of NEA funding.
his "self-reliance" version of com-
Instead of an imaginary scenario
Cutting appropriations, it seems
munism.
with victims of consumption, Black
to me, is punitive and not to the
At the same time, Mr. Kim takes
Plague or leprosy, the playwright
point. Art, like beauty, is in the eye
risks in the cause of progress, un-
and leading man in the play who is
of the beholder, and individual
usual in a totalitarian society
HIV positive, uses a scalpel to carve
artists worth their salt will always be
where most officials keep their
a bloody pattern into the back of a
too controversial for management
heads down and tread with ex-
"supporting actor," and blots the
by any government authority, micro
treme caution.
wounds with paper towels. (The
or otherwise. Picasso never sought
He accompanied Kim Il-sung to
blood donor was not HIV-positive,
Franco's approval of Guernica. We
China and on other trips in the late
but the audience didn't know that.)
forgot the iconoclastic nature of the
1980s. South Korean experts be-
Then be places the paper towels
artist when we established the NEA,
lieve he advised the president and
which have absorbed the blood
and the NEA forgot how absurd the
his son and heir, Kim Jong-il, that
we're not talking ketchup on a
non-sequitur of a "government-
they should pursue an open-door
revolving clothesline that circles
financed avant-garde" would be.
policy after a tour of Europe in
over the heads of the audience. Pity
Ron Athey has taken another play
March 1990.
and fear are evoked, literally, as
to a private homosexual stage in
In 1991, as party secretary for
spectators worry that a blood-
New York. In this one he dresses up,
international affairs, he argued in
stained towel might fall on them.
in woman's clothes, as the evangelist
favor of diplomatic ties with the
In another scene of dramatic
and faith healer Aimee Semple
United States and lost his position
masochism, Mr. Athey pierces his
McPherson. He grabs and folds
the following year when he failed
tatooed arm with hypodermic nee-
huge pieces of skin from the back,
to produce any results.
dies and assistants draw HIV-posi-
neck and waist of another man and
He is believed to have opposed
tive blood piercing his scalp with
inserts eight long needles with feath-
Pyongyang's threat to pull out of
acupuncture needles.
ers through the folds of skin,
the nuclear Non-Proliferation
Not all art is for everybody," Jane
attempting to portray St. Sebastian.
Treaty, the move in March 1993
So far as we know he hasn't
that raised the confrontation to
sought government money for this
such a level that Washington is now
Suzanne Fields, a columnist for
dramatic masterpiece. But if he did,
offering diplomatic ties to resolve
The Washington Times, is nationally
could anyone be sure the NEA
it.
syndicated. Her column appears
wouldn't fund it as a demonstration
Mr. Kim is a close adviser to
here Monday and Thursday.
of modern day martyrdom?
Kim Il-sung and Kim Jong-il. As
such, he stands in a position to
communicate between the two
camps: the older generation of
58
Communist hard-liners around
Kim Il-sung and the younger tech-
nocrats around Kim Jong-il.