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Whitewater, May 1994
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Whitewater, May 1994
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Arkansas Democrat
Gazette
May
26
1994
White House on health-care offensive
BY JANE FULLERTON
visit to Capitol
committees and in reaching out
Democral-Gazette Washington Bureau
HILL. In some-
to Republicans."
WASHINGTON The White
thing of a re-
"I think (Clinton) under-
House sought to regain the of-
connaissance
stands like we do this is really
fenalve in the health-care re-
mission, he
the high noon of the debate on
form debate Wednesday as con-
discussed the
health care," said Sen. Edward
gressional momentum builds
prospects for
Kennedy, D-Mass. He is chair-
GOP plan would put panel
and a recess nears.
health-care
man of the Senate Labor and
President Clinton and first
reform with
Human Resources Committee,
lady Hillary Rodham Clinton
House and
which is debating a modified
over Whitewater hearings
made separate appearances to
Senate Demo-
version of the president's bill.
BY TERRY LEMONS
the progress of his Whitewater
shore up support for the White
Clinion
cratic leaders
House Speaker Thomas Fo-
Democrat-Gazette Washington Bureau
investigation.
House plan. The president's
and the House
ley, D-Wash, agreed. "We're en-
WASHINGTON Republi-
Mitchell said the Fiske meet-
proposal, now being consid-
Democratic caucus.
tering an important phase of
cans introduced legislation
ing is expected to focus on a
ered by five congressional com-
Clinton also altered his
health-care legislation."
Wednesday calling for the cre-
"suitable" schedule for con-
mittees, has met with consid-
schedule to add a meeting with
Clinton sought to reassure
ation of a special Senate sub-
gressional hearings. Fiske is re-
erable opposition on Capitol
Senate Minority Leader Bob
Democratic lawmskers that he
committee to hold hearings into
portedly close to wrapping up a
HIII.
Dole, R-Kan., and other key Re-
won't back down from the
the Whitewater Development
few aspects of his Whitewater in-
Although momentum ap-
publicans.
health-care plan he promised
Corp. affair.
vestigation.
pears to be gaining for health-
Clinton said he received "very
during the presidential cam-
"We need to get the ball
He is examining a variety of
care legislation to be passed
heartening" news in his meeting
paign and outlined in Septem-
rolling." Senate Minority Leader
issues tied to Whitewater, a Mar-
this year, what form it will take
with Democratic leaders.
ber 1993.
Robert Dole, R-Kan., said.
ion County real-estate develop-
is unclear.
"I was urging the position
The president has said he
Sen. Alfonse D'Amato, R-N.Y.,
ment along the White River.
In that uncertain climate,
that I strongly feel that we must
won't sign a bill that doesn't
promised to begin attaching his
President Clinton and Hillary
Democratic lawmakers are
pass health care this year," be
guarantee all Americans health
plan to every piece of Senate leg-
Rodham Clinton once were part-
worried about reaction to the
said after that meeting. "I think
coverage that never can be tak-
islation after the Memorial Day
ners with James and Susan Mc-
president's plan in their home
we must find a way to cover all
en away.
recess ends in early June.
Dougal in Whitewater. James
districts. Several special-in-
Americans.",
The first lady highlighted
Dole described the proposal
McDougal also owned Madison
terest groups that oppose as
And, he added, "I got a very
that theme In her remarks.
to create a special subcommit-
Guaranty Savings & Loan Asso-
pects of the White House plan
heartening progress report
"There is no way this country
tee as a way "to jump-start" slow-
ciation, which failed in 1989 at a
have said they williuse the
about the efforts being made in
can stabilize its health-care sys-
moving negotiations over White-
cost to taxpayers of at least $47
weeklong Memorial Day break
the committees and the sub-
tem and contain costs without
water hearings.
million.
to lobb against the proposal.
universal coverage," she said.
But Senate Majority Leader
Allegations that money was il
heimood
Republican lawmakers have
George Mitchell, D-Maine,
legally transferred between
and Ilding in
been trying to build support for
called the plan "raw partisan
Madison and Whitewater are,
Clintons took
a more modest reform plan.
polities."
among a series of issues Fiske is
Dole and Mitchell continued
investigating.
Wednesday to try to end a two-
In March, the House and Sen-
month impasse over the timing
ate agreed to hold Whitewater
and location of the hearings.
hearings at some future point.
Negotiations are expected to
But Republicans and Democrats
resume today after special coun-
have been at odds since then
sel Robert Fiske Jr. meets with
over when and where the heard
congressional leaders to discuss
ings should be held.
securing
Americans.
ternoon the
high-profile
GOP senators
harden stand
on Whitewater
deadline pass and in effect put it
off until after recess.
"This is why an actual roll call
vote was pushed back until after
D'Amato, Dole
scheduled to begin tonight and
recess," Mr. Ueland said. He pre-
continue through June 8.
dicted that after yesterday's floor
Senate Majority Leader George
debate Republicans will get the
Mitchell responded by saying he
hearings they want and in the ways
insist on special
would "do all I can to see that Con-
they have wanted them.
gress meets its responsibilites" in
"What we saw from the Demo-
hearings panel
supporting an earlier Senate res-
crats today was the last gasp of a
olution passed 98-0 on March 17
gored donkey," Mr. Ueland said.
- calling for Whitewater-Madison
The Republican resolution calls
Al
for a 16-member subcommittee
By Jerry Seper
hearings. But he made no prom-
THE WASHINGTON TIMES
ises when they would be held or
with 10 members chosen from
under what conditions.
among the current Banking Com-
Republican senators yesterday
"The real motive behind this re-
mittee membership. In addition,
demanded creation of a 16-mem-
Mr. Mitchell and Mr. Dole would
quest today is raw partisan poli-
ber bipartisan subcommittee to in-
each select three senators from
tics," said Mr. Mitchell, Maine
vestigate the Whitewater-Madison
other committees to serve on the
Democrat. "It's a chance to take a
affair, accusing Democrats of
few more shots at the president, to
special subcommittee.
"foot-dragging" in an effort to pro-
score a few more political points.
Mr. D'Amato and Banking Com-
tect the Clinton administration
mittee Chairman Donald W. Rie-
"We will have hearings; we will
from congressional scrutiny.
gle, Michigan Democrat, would
comply," he said. "But we will do it
serve as co-chairmen. Both co-
The proposal, offered during a
in a responsible way and not in a
chairmen would schedule hear-
floor speech by Sen. Alfonse M.
political circus."
D'Amato, would establish a special
Mr. Mitchell noted that negoti-
ings, issue subpoenas and author-
ize sworn statements. There would
subcommittee of the Senate Bank-
ations were continuing between
ing Committee eight Democrats
his office and that of Senate Mi-
be no grant of immunity to any of
the potential witnesses.
and eight Republicans- to "inves-
nority Leader Bob Dole of Kansas
Under the resolution, the sub-
tigate and hold hearings" on all
on how to structure the pending
pending Whitewater-Madison is-
hearings, adding that the discus-
committee would be authorized to
sues.
sions were "moving ahead."
investigate and hold hearings in-
volving:
Mr. D'Amato, New York Repub-
He said, however, he would not
lican and ranking minority mem-
schedule hearings if there was any
Improper contacts between
ber on the Banking Committee,
possibility they could interfere
the White House and government
said in a 20-page resolution that
with the Whitewater-Madison in-
agencies investigating Madison
vestigation now being conducted
Guaranty Savings and Loan Asso-
Republicans no longer are willing
ciation, an Arkansas thrift that
to wait for the Senate Democratic
by Special Counsel Robert B.
leadership to establish jurisdic-
Fiske Jr., who is scheduled to meet
failed in 1989 at a cost to taxpayer
of $50 million.
tion for the hearings or to set a
today with the House leadership to
timetable for them to begin.
discuss the status of his inquiry.
The financial collapse of Mad
ison and the diversion of funds
"When we return [from the Me-
"We will have a better idea about
from the S&L to Whitewater De-
morial Day recess], if there is no
this when we know the special
velopment Corp., a real estate ven-
agreement, we are prepared to of-
counsel's timetable." Mr. Mitchell
ture involving Madison's owner,
fer legislation on every single bill
said.
James B. McDougal, President
that comes forward - until we
Mr. Dole, during a spirited
Clinton and their wives.
have these hearings." Mr. D'Amato
debate on the Senate floor, said he
The diversion of government-
said.
did not believe Whitewater-Madi-
guaranteed funds from Capital-
The Memorial Day recess is
son hearings would interfere with
Management Services Inc. in Lit-
the Fiske inquiry but said Con-
tle Rock, owned by former Judge
gress was shirking its oversight
David L. Hale, to the Whitewater
responsibilities by failing to get
partnership.
them under way.
Conflicts of interest by the
"I understand the unique de-
Rose Law Firm in Little Rock in its
mands of Mr. Fiske's job, but Mr.
Fiske - and those of us in the Sen-
representation of the government
ate - should also understand that
in cases involving Madison.
Congress has its own job to do as
Circumstances surrounding
well," Mr. Dole said.
first lady Hillary Rodham Clin-
"It's one thing to be deferential,
ton's commodities trading activ-
and it's something quite different
ities, during which she parlayed a
The Washington Times THURSDAY, MAY 26, 1994
when deference is used as an ex-
$1,000 investment into a $100,000
cuse to shirk our own constitution-
profit in 10 months.
ally mandated oversight obliga-
The U.S. Park Police investiga-
tions," he said.
tion into the July 20 death of White
Mr. D'Amato said the "time has
House Deputy Counsel Vincent W.
come" for the Senate to begin a
Foster Jr., a longtime friend of the
nonpartisan investigation into a
Clintons.
possible "abuse of power" in the
Whitewater-Madison controversy:
The operation and under-
"The foot-dragging has got to
writing practices of the Arkansas
stop," he said.
Development Finance Authority,
Eric Ueland, spokesman for the
which approved millions in fees
Senate Republican Policy Com-
and contracts to friends of the
mittee, said Republicans had
Clintons.
agreed last week that if Mr. Mitch-
ell and Mr. Dole did not reach an
"Virtually every member of the
agreement on a timetable for
Senate agreed more than two
hearings and on crucial jurisdic-
months ago that Whitewater hear-
tional questions by last Sunday,
ings should be conducted," Mr.
Republicans would put their own
D'Aamato said during the lively
timetable and requirements for
floor debate. "It is now time to
committee jurisdiction into an
agree on the forum and timing of
amendment.
those hearings."
He said GOP members planned
Ralph Z. Hallow contributed to
to start attaching the amendment
this report.
to each bill two days ago, but let the
88
Challenges
Fraud Rulin
Demjanjuk Case
By Joan Biskupic
Washington Post Staff Writer
The Justice Department yester-
day asked the Supreme Court to
throw out a federal appeals court
ruling that prosecutors committed
fraud by withholding evidence that
favored alleged Nazi death camp
guard John Demjanjuk.
If the petition is successful, it
could clear the way for the United
States to deport the retired Cleve-
ASSOCIATED PRESS
land auto worker. When the 6th U.S.
Alleged Nazi death camp guard John Demjanjuk smiled on receiving release
Circuit Court of Appeals found that
papers in Jerusalem last year after Israell court overturned his conviction.
fraud had occurred, it voided an ear-
lier extradition authorization.
In its filing yesterday, the Justice
of an earlier court judgment that
peals court ultimately concluded last
Department said prosecutors in-
Demjanjuk should be stripped of his
year that prosecutors had defrauded
volved in the effort to deport
U.S. citizenship and deported.
the court by withholding information
Demjanjuk acted in good faith and
Demjanjuk, who was extradited in
that Demjanjuk could have used to
that the failure to produce certain
1986, was convicted and sentenced
contest the extradition.
documents did not rise to the level of
to death for torturing and murdering
The Justice Department con-
"egregious and deliberate miscon-
Jews at the Treblinka concentration
tends that Demjanjuk still should be
duct, such as bribery of a judge or
camp in Nazi-occupied Poland during
deported because of his activities at
fabrication of evidence" that typical-
World War II. He was allegedly the
camps other than Treblinka. The
ly is found to be a fraud upon a court.
notorious "Ivan the Terrible."
6th circuit court's finding of fraud
"The standard adopted by the
But last year the Israeli Supreme
"will hinder the government's ef-
court of appeals in this case is incon-
Court overturned the conviction,
forts to remove [Demjanjuk] from
sistent with standards articulated by
saying there was insufficient proof
the overwhelming majority of the
that he was Ivan, and Demjanjuk was
the United States," Days told the
allowed to return home in Septem-
justices.
courts of appeals," said the brief
signed by Solicitor General Drew S.
ber.
Days III.
In the meantime, the 6th circuit
'The government is seeking to vin-
court had appointed a trial judge to
dicate prosecutors' actions as well as
investigate the Justice Department's
to remove a cloud over the validity
handling of the deportation. The ap-
Onassis Admirers Shower
House GOP
Her Grave With Tributes
Urges Hearings
THE WASHINGTON POST WEDNESDAY, MAY 25. 1994
By Robert O'Harrow Jr.
family spokeswoman, said the
On Whitewater
Airshington Post Staff Writer
choice of a headstone was a de-
tail the family has not had time
Reuter
They left white roses and pink
to consider. She said the family
ribbons, a potted plant and doz-
has been overwhelmed with calls
House Republicans yesterday
ens of carnations. Some visitors
of support and condolences. Lo-
stepped up pressure for congres-
to the burial site of Jacqueline
cal florists, Miller said, "are get-
sional hearings on the Whitewater
Kennedy Onassis at Arlington
ting orders from people around
affair involving President Clinton
National Cemetery yesterday
the nation."
and Hillary Rodham Clinton.
even offered business cards and
By yesterday afternoon, a
A resolution introduced by Rep.
brief notes to honor her memo-
John T. Doolittle (R-Calif.) and
mound of red roses, salmon-col-
signed by 91 other members called
ry.
ored carnations, lilies, baby's
Less than 24 hours after the
for hearings by five committees on
breath and other flowers cov-
former First Lady was buried
issues relating to the defunct Madi-
ered much of the space next to
next to her slain first husband,
son Guaranty Savings & Loan and
President Kennedy's grave. A
hundreds of people streamed by
the Whitewater Development Corp.
young couple in business clothes
the Kennedy grave site to snap
in Arkansas. The Clintons were half
gently laid down their orange
owners of the Whitewater land de-
photos, pause for a moment and
and red carnations and then
talk about what her death meant
velopment venture.
stood back quietly.
to them. Officials said traffic at
"I believe the patience of the
"It's just a demonstration of
the cemetery was heavier than
American people is nearing an end."
respect for a certain part of our
Doolittle said at a news conference.
usual yesterday, particularly in
history," said the young man,
Both the House and the Senate
the morning.
who described himself only as a
Cemetery workers spent
have passed resolutions calling for
government worker.
Whitewater hearings that do not in-
much of Monday night and yes-
Others left brief notes or
terfere with an investigation now un-
terday morning working on the
cards. Candace McNeill Stewart,
derway by special counsel Robert B.
site after a burial attended by
of Alexandria, left a business
Fiske Jr. Republicans have been
President Clinton, members of
card. Stewart, who was with her
pushing for action.
the Kennedy family and several
mother and sister, said it was
The Doolittle resolution calls for
friends. The only signs that On-
her way of letting the Kennedy
the five committees to submit writ-
assis had been buried were the
family know they were with
ten findings to the House by the
flowers and the fresh black dirt
them in spirit.
time Congress adjourns, probably in
between the flat granite blocks
"Just so the Kennedy family
early October.
that cover the graves.
knows we're here. so they know
No headstone has been select-
we mourn with them in their
ed by the Kennedy family, but of-
sadness," said Stewart, 27.
ficials said it likely will match the
Like dozens of others, Stewart
black markers above the graves
and her family lingered in the hot
34
of President Kennedy and two of
sunshine for several hours.
their children. Patrick. who died
watching the flow of people and
shortly after birth in 1963, and
taking photographs of the grave
an unnamed daughter. who was
site.
stillborn in 1956.
"It's a national sadness," she
Melody Miller, a Kennedy
said.
ALSO IN WASHINGTON
Poll: More say economy has improved
USA
GOP calls for prompt
TODAY
President Clinton ran for office promising to make improvements in the economy. A USA TODAY/CNN/Gallup Poll examines how he is doing.
CNN
hearings on Whitewater
Clinton ratings Improve
More say economy is good
More say they will
House Republicans are cranking up demands for
Percentage approving of how Clinton is handling his
Percentage rating the U.S. economy
Fair
be better off next year
GALLUP
hearings into President Clinton's Whitewater land deal.
job overall and, specifically, the economy:
good-to-excellent, only fair or poor:
52%
Percentage saying they expect
A resolution introduced Tuesday by Rep. John Doolit-
51%
60%
to be better off financially at
tle, R-Calif., calls for hearings by five committees. Rep.
this time next year:
Newt Gingrich, R-Ga., says he worries Democrats "will
60%
50%
attempt to wait until the last possible moment, reduce
Overall approval
70%
59%
50%
Good
the scope to one committee, have one or at the most two
40%
30%
60%
days of hearings and then say, 'We did our job.''
The resolution calls for the five committees to submit
40%
30%
50%
written findings before Congress adjourns in October.
50%
20%
30%
40%
FLOWERS TAPES: If you
Economy approval
10%
Poor
can't get enough information
20%
18%
30%
about allegations of sexual mis-
0
deeds by Bill Clinton, then Gen-
10%
Jan.
###
of
Dec.
FOR
June
08
April
20%
NON.
nifer Flowers has a deal for
AUG.
Jon.
sold
you. Flowers, who claimed dur-
10%
ing the 1992 presidential prima-
0
'92
'93
'94
ries that she had a long affair
0
2/14
3/31
8/19/10
1216
2/28
3/8/24
More say they are better off
with Clinton, is selling for $19.95
Percentage saying they are better off
40%
Jan.
March
May
per
Jan.
1994
financially than a year ago:
FOO.
June
08
1993
March
May
almost an hour's worth of her
secretly taped conversations
with Clinton. Portions of the
40%
'91
'92
'93
'94
Agence France-Presse
tapes released during the cam-
FLOWERS: Conver-
Clinton slips on foreign Issues
Percentage approving of how Clinton
30%
56%
paign turn out to be the best of
sation for sale
is handling foreign affairs:
Majority say Clinton policies
the meandering conversations,
20%
have 'no effect' on economy
which include a Clinton denial of having an affair with
her. But he does refer to her as "darlin" and "babe."
Jan. 17
54%
10%
Feb. 28
24%
51%
WELFARE REFORM: Conservative social scientist
16%
March 8
51%
0
Charles Murray, a leading advocate of ending welfare,
April 24
39%
Sopt
dec
Jan.
July
Doc
Jan.
May 22
Feb.
June
D8C
March
May
says some children would be better off in orphanages
than with single welfare mothers. "The dirty little secret
37%
is a very large number of them are rotten mothers,"
'90
'91
'92
'93
'94
Policies help
Policies hurt
No effect
Murray said at a Capitol forum. Meanwhile, House liber-
Source: USA TODAY/CNN/Gallup nationwide telephone poll of 1,005 adults conducted May 20-22. Margin of error: ± 3 percentage points.
By Bob Laird, USA TODAY
als plan to offer a welfare overhaul today that would al-
low recipients to receive checks, food stamps and hous-
ing assistance for two years after taking a job.
SEN. E.T.? Maybe. A number of senators confirmed,
with a wink and a nod, they are indeed "space aliens," as
USA TODAY WEDNESDAY. MAY 25, 1994
reported in Weekly World News tabloid. Says J. Bennett
Johnston, D-La., identified as a space visitor: "At last the
cat is out of the bag, although this isn't exactly the way I
intended to tell my family and friends."
SPECIAL ELECTIONS
Elections after President Clinton's 1992 victory. Seats lost by
Democrats in BOLD.
HOUSE
DATE OF
ELECTED
SPECIAL
WINNER
TO REPLACE:
ELECTION
Ron Lewis (R)
William H. Natcher (D)
May
24,
1994
Frank Lucas (R-Okla.)
Glenn English (D)
May 10. 1994
Vernon Ehlers (R-Mich.)
Paul Henry (R)
Dec. 7, 1993
Sam Fan (D-Calif.)
Leon Panetta (D)
June 8,1993
Rob Portman (R-Ohio)
Bill Gradison (R)
May 4, 1993
GOP Gains
Peter Barca (D-Wis.)
Les Aspin ID)
May 4, 1993
Bennie Thompson (D-Miss.)
Mike Espy (D)
April 13, 1993
House Seat
SENATE
Kay Balley Hutchison (R-Tex.)
Lioyd Bentsen (D)
June 5, 1993
Kent Conrad (D-N.D.)
Quentin N. Burdick (D)
Dec. 4, 1992
Natcher Held
Paul Coverdell (R-Ga.)
Wyche Fowler Jr. (D)
Nov. 24, 1992
PARTY BREAKDOWN
IN WAKE OF
Election in Kentucky
ELECTION:
DEMOCRATS
REPUBLICANS
Senate
56
44
Second Loss in Month
House
256
178
(plus 1 independent)
For Democrats, Clinton
SOURCE: Congressional Quarterly
-Compiled by Ann O'Hanion
By Thomas B. Edsall
Washington Post Suff Writer
Al
THE WASHINGTON POST
Republican Ron Lewis yesterday
GOP Captures Kentucky Seat
decisively won a special election in a
central Kentucky district that had
been in Democratic hands for more
than a century. The results revealed
Long Held by the Democrats
for the second time in three weeks
the apparent liabilities of the Clinton
ELECTION, From A1
lican primary voters were expected
administration in conservative bor-
to pick Phil Batt, a former state sen-
der state constituencies.
latration. Republicans already are
ator and lieutenant governor, to op-
With 100 percent of the vote
touting the victory of Frank Lukas in
pose EchoHawk.
counted, Lewis had 55 percent of
a once rock-solid Democratic district
Arkansas Gov. Jim Guy Tucker,
the vote to Democrat Joe Prather's
in Oklahoma in a contest earlier this
who succeeded Clinton after the
45 percent. Until Lewis, whose cam-
month to succeed Rep. Glenn Eng-
1992 presidential election, is unop-
paign was aided by $200,000 from
lish (D-Okla.), who resigned.
posed in the Democratic gubernato-
national GOP committees, began his
It is also a worry for Democrats
rial primary. He will enter the gen-
assault on Prather and President
that they could have a difficult time
eral election the favorite. One of the
Clinton, the Democrat had been the
holding on to some of the seats being
contenders for the Republican nomi-
strong favorite to win the seat that
vacated by longtime incumbents.
nation was Sheffield Nelson, an out-
had been held by Rep. William H.
The Lewis-Prather special election
spoken Clinton rival who has led the
Natcher, who died March 29. Demo-
was the only Republican-Democratic
charge on Whitewater; he was op-
crats now hold a 256-to-178 advan-
contest yesterday, although the poli-
posed by state Sen. Steve Luelf,
tage in the House, with one indepen-
des of the Clinton administration were
among others.
dent.
at issue in a number of primaries in
James McDougal, who was a part-
Rep. L. William Paxon (N.Y.),
Kentucky, Arkansas and Idaho.
ner of the Clintons in the White-
chairman of the National Republican
in the 1st District of Kentucky
water land deal, is a long-shot candi-
Campaign Committee, declared that
just to the west of the 2nd District,
date for Congress in Arkansas. His
the results are "A big defeat for the
freshman Rep. Tom Barlow battled
opponents for the Democratic nomi-
president and the Democrats in Con-
fellow Democrat and state Sen. Hen-
nation are state Sen. Jay Bradford
gress, and a warning message to
ry Lackey, whose main campaign
and state Rep. John Parkerson, as
Democrats that 1994 is going to be
theme was an attack on Barlow's
they compete for the chance to take
a Republican year."
support of the Clinton administra-
on freshman Rep. Jay Dickey (R),
Lewis charged that Democratic
tion's economic and budget plan.
who has no primary opposition.
nominee Joe Prather was cut from
In 1992, Barlow defeated nine-term
The focus of national attention,
the same mold as Clinton. His TV
Rep. Carroll Hubbard (D-Ky.), who
however, has been on the Prather-
commercials stated repeatedly that,
was one of the leading check bouncers
Lewis contest. The Lewis television
"Kentucky doesn't need Joe Prather.
in the House and who now awaits sen-
commercials have been brutal,
Send a message to Bill Clinton. Send
tencing after pleading guilty to felony
showing pictures of Clinton and
Ron Lewis to Congress. Ron Lewis,
charges involving misuse of campaign
Prather melding into each other, as
he's one of us."
money. Lackey is an ally of Hubbard's
the announcer declares:
The results in the Kentucky con-
and the hostilities between Barlow and
"In Frankfort [Kentucky's capital]
test will help determine how much
Lackey are viewed by Repubicans as
Joe Prather votes to increase taxes
Democratic House candidates in
opening up chances for a GOP victory
and fees over 40 times.
Bill Clin-
tough campaigns, especially those in
in November.
ton passes the largest tax increase in
southern districts, seek to distance
Just to the east of Natcher's old
history.
If you like Bill Clinton,
themselves from the Clinton admin-
district, both parties held contested
you'll love Joe Prather. Kentucky
See ELECTION, A4, Col. 1
primaries-11 Democrats and three
doesn't need another professional
Republicans-to select nominees to
politician."
vie to succeed retiring Rep. Romano
While the 2nd District has been
L. Mazzoli, a moderate to conserva-
represented by Democrats for more
tive Democrat first elected in 1970.
than 100 years-the last 41 by
WASHINGTON POST WEDNESDAY, May 25. 1994
In Idaho, Democratic Attorney
Natcher-it has clearly moved to-
General Larry EchoHawk is favored
ward the GOP in its presidential vot-
to win his party's nomination in his
ing patterns. In 1992, President
drive to become the nation's first
George Bush defeated Clinton there
American Indian governor. Demo-
by 45 to 41 percent, and in 1988.
cratic Gov. Cecil D. Andrus is retir-
Bush crushed Democratic presiden-
ing after four terms in office. Repub-
tial nominee Michael S. Dukakis.
24
THE
Senate inches toward
Whitewater hearings
BY TERRY LEMONS
"Allegations that money was
Democrat-Gazette Washington Bureau
date for hearings. Dole did not
transferred illegally between
offer specifics of the plan. He
WASHINGTON Senat
Madison and Whitewater are
admitted Democrats probably
leaders moved toward a con
among the issues being inves-
would be able to kift or water
promise Tuesday on } earing
tigated by special counsel
down the GOP proposal.
into the Whitewater Develop
Robert Fiske Jr., who was ap-
ment Corp. affair in the face
In recent days, some Re-
pointed in January by Attor-
Republican threats to force
publicans have hinted they
ney General Janet Reno. Fiske,
vote on the issue.
might conduct a filibuster to
whose investigation is based
By the end of the day, De
at Little Rock. will discuss his
keep the Senate from taking its
mocratic and Republican leac
progress during a Thursday
Memorial Day recess if no ac-
ers were saying they wer
meeting with House leaders.
tion takes place on the White-
nearing a deal that buld a
Congressional Democrats
water Issue. Dole said Tuesday
low Whitewater hearings t
repeatedly have said White-
he did not anticipate such a
proceed in the Senate Bankin
Committee.
water hearings should not pro-
move.
ceed until Fiske completes his
In the House, Rep. John
"We're making gos.
work. Republicans want im-
Doolittle, R-Calif., introduced
progress," said Senate Majori
mediate hearings.
legislation that would require
the Leader George Mitchell. D
The Senate stalemate
hearings to begin by Aug. 15.
Maine. "We'll reach ar. agree
showed signs of ending as
Five committees would be re-
Mitchell and Senate Minority
quired to submit written find-
But Senate Republicans
Leader Bob Dole, R-Kan., dis-
ings on Whitewater before
frustrated at the long delay
cussed their options Tuesday.
Congress adjourns for the year.
might seek a vote tod ay on
Mitchell favors hearings in the
"Delaying these hearings
proposal outlining the forma
Senate Banking Committee. He
and timetable for Whilewate
any further would be unfair to
said a few senators from oth-
hearings.
the American people," Doolit-
er committees might be al-
tie said.
Meanwhile, 92 Hot se Re
lowed to participate in those
publicans introduced a mea
He said it would be mid-
hearings.
sure calling for an array D
June before Republicans
Dole called Mitchell's offer
House hearings beginning in
might force a House vote on
mid-August. The plan calls for
a "step in the right direction."
the bill.
hearings in five committees
"We're moving in the right
House Minority Whip Newt
"There's a lot of bad stuf)
direction, slow as it might be,"
Gingrich, R-Ga., said Democ-
he said.
that went on in Arkans LS, and
rats want to continue stalling
the public has the right 1.0
Dole said it would be at
In an attempt to "reduce the
know," said Rep. Toby Roth,
least a month before any Sen-
scope" of Whitewater hear-
R-Wis.
ate hearings could begin. But
Ings.
More than two mont ago,
he held out the possibility Re-
Rep. Jim Leach, R-Iowa and
the two chambers agreed 1.0
publicans might bring the
the ranking Republican on the
hold Whitewater hear ngs at
Whitewater topic to a vote as
House Banking Committee,
an unspecified date.
early as today.
backed the August hearing
President Clinton and first
"Some of our people are get-
timetable.
lady Hillary Rodham Clinton
ting restless," Dole said.
"Hearings are in order and
were partners from 1978-92
The Republican amend-
precedent is on our side,"
with James and Susan McDou-
ment would create a select
Leach said.
gal in Whitewater. a 230-acre
Senate committee and set a
residential development along
the White River in Marion
County.
James McDougal, one of
three Democratic candidates
in the 4th Congressional Dis-
trict in Tuesday's primary, also
owned Madison Guaranty Sav-
ings & Loan Association,
which failed in 1989 at a cost
to taxpayers of at least $7 mil-
lion.
Arkansas Democrat
Gazette
Wednesday, May 25, 1994
136
CONFERENCE DES MOINES
Air National Guard units
prepare for down-sizing
The president of the National
and Sioux City, where the lowa Air
when he left his chairmanship of the
National Guard has F-16 fighter
House Armed Services Committee,
Guard Association worries
units that employ hundreds of
and National Guard supporters have
that deactivating units
full-time and part-time Guard mem-
had extensive experience working
bers.
with those people.
could hamper emergency
Matthews, an Air National Guard
In contrast, "we had very little ac-
operations in the future.
officer who is Utah's adjutant gener-
ceas" to Defense Department offi-
al, is in Des Moines for a conference
clais under President George Bush,
of the Adjutant Generals Association
Frank said. He noted that under
By WILLIAM PETROSKI
of the United States. He said he pre-
Bush, military officials proposed
REGISTER STAFF WRITER
fers to see Congress leave intact the
cutting the National Guard by
basic structures of Guard and re-
one-third, which would have meant
Entire Air National Guard units
serve units so that military officials
closing 1,000 armories nationwide.
could be scrapped under the down-
don't have to start from scratch
"The fact is that sometimes liber-
sizing of the nation's military, but It
when mobilizing large numbers of
als- in the broad definition of liber-
would be better to simply reduce the
forces in a national emergency.
als - are sometimes more support-
number of planes assigned to Indi-
"History has invariably shown
tve of the National Guard forces
vidual units, a top National Guard
that we will need to expand our
than the active duty forces," Mat-
general said Tuesday.
forces again in the future," he said.
thews said. "I think part of the rea-
Maj. Gen. John Matthews, presi-
Despite budget worries, Matthews
son for that has to do with the role
dent of the National Guard Associa-
and Robert Frank Jr., executive di-
the National Guard has to play in
tion of the United States, said in an
rector of the National Guard Associ-
hometown emergencies."
interview that with tight budgets for
ation, said they have had good rela-
President Clinton was very sup-
military spending. "some very sig-
tionships with Defense Department
portive of the National Guard as Ar-
nificant decisions will have to be
officials under the Clinton adminis-
kansas' governor "and we have
made." which could include deacti-
tration.
found significant support from the
vating entire air units.
Frank said former Defense Secre-
current administration. although
Those types of budget issues are
tary Les Aspin brought many of his
that doesn't mean we have had total
being closely watched in Des Moines
staffers to the Defense Department
support," Matthews said.
'No PROGRESS'
GOP grows
But House Minority Whip Newt
Gingrich, R-Ga., said he has seen "no
impatient on
progress" by Democrate toward as-
tablishing a schedule and a format
for hearings. Doolittle said "the
Wednesday, May 25, 1994
Whitewater
public is asking questions" about
Whitewater that should be an-
swered.
The Republicans said the five com-
House Democratic leaders
mittees should accommodate Fiske
and not grant Immunity to any wit-
are being pushed to set
nesses if he objects.
a date for hearings.
The resolution says allegations
have been reported "concerning the
possibility of unethical or illegal con-
By JANE NORMAN
duct" in connection with the
OF Tm
Whitewater real estate development
and Madison Guaranty Savings and
Washington, D.C. A group of
Loan of Little Rock, Ark., owned by
House Republicans, including Rep.
the Clintons' partner in Whitewater.
Jim Leach of Iowa, demanded Tues-
The resolution also names as a tar-
day that Democratic House leaders
get Ray E. Friedman & Co., the busi-
The Des Moines Register
set Whitewater heartngs for no later
neas through which Hillary Rodham
than mid-August.
Clinton did her commodities trading.
Under a resolution sponsored by
"This is not a terribly happy day,"
Rep. John Doolittle, R-Calif., hear-
said Leach, the senior Republican on
ings would be held by five commit-
the banking panel and one of the
tees - agriculture, banking, judicia-
president's chief crities on
ry, small business and government
Whitewater. "What's at issue here is
operations.
full disclosure."
The hearings would scrutinise not
Leach said the White House, on a
just the Whitewater real estate de-
separate issue, is now arguing the
velopment in Arkansas but also com-
president is Immune from lawsuits
modities trading engaged in by first
related to actions before taking of-
lady Hillary Rodham Clinton.
fice, in connection with a sexual ha-
Republicans said they want hear-
rassment suit filed by an Arkansas
ings beginning no later than Aug 15.
woman. "If this doctrine holds up it
Written findings would be submitted
makes the issue of disclosure even
before adjournment of this year's
more important," Leach said.
session.
Rep. Jim Nussle, R-la, is one of the
The House has approved another
92 co-sponsors of the resolution.
resolution that members set a time-
table for hearings on Whitewater,
but Democrats have said they want
to hold off until special counsel Rob-
ert Fiske concludes the first phase of
126
his investigation. Reports have said
Fiske is nearing that point.
BC-USA-MCDOUGAL
WHITEWATER FIGURE LOSES RACE IN ARKANSAS
LITTLE ROCK, Ark, May 25 (Reuter) - Jim McDougal, a key figure in the
Whitewater controversy involving President Clinton and Hillary Rodham Clinton,
lost his bid for a seat in Congress Tuesday, finishing third in a
three-candidate Arkansas Democratic primary.
Jay Bradford, a veteran member of the Arkansas State Senate, led the
Democratic ticket for the right to oppose first-term Republican incumbent Jay
Dickey in a district that encompasses the southern third of Arkansas.
McDougal portrayed himself in speeches and campaign advertising as a
staunch Democrat victimised by Republicans, including Presidents Ronald
Reagan and George Bush and their appointees in the thrift regulatory
agencies.
In the late 1980s, McDougal was removed by federal regulators as chairman
and chief executive of Madison Guaranty Savings and Loan, which eventually
failed at a cost to taxpayers of at least $47 million.
President and Mrs Clinton, who were friends of McDougal and his wife,
joined them in 1978 as investors in a real estate development called
Whitewater, which Madison Guaranty underwrote.
A special prosecutor, Robert B. Fiske, is presently investigating
allegations that depositor funds were improperly diverted from Madison to the
Whitewater account and to Clinton's 1986 Arkansas gubernatorial campaign.
The Clintons, McDougal and McDougal's former wife, Susan, have all denied
any impropriety in their Whitewater investment.
McDougal was indicted but acquitted of bank fraud in the collapse of
Madison Guaranty. McDougal's attorney has said, however, that he expects
McDougal will be indicted again.
REUTER
**** filed by:RB--(--) on 05/25/94 at 02:14EDT ****
**** printed by:WHPR (JEL) on 05/25/94 at 08:11EDT ****
1 Kentu cky, GO strategy est:
Give all opponents a face - Clinton's
By William M. Welch
Paxon, R-N.Y., head of the GOP
cal action committees.
USA TODAY
House campaign committee and ar-
Prather has spent about $180,000,
chitect of the attack. "To win, Demo-
including $50,000 from his pocket.
The stark, black-and-white image
crats feel compelled to run away
"Prather for better or worse made
on the TV depicts a wan Bill Clinton.
from the president."
a decision to run a campaign in the
In seconds, his face transforms
Political analyst Charlie Cook says
old Natcher style," says Mike Casey,
seamlessly into the face of Joe
the strategy carries a risk, too. "I
spokesman for the Democratic Con-
Prather, a Democratic House candi-
think they have to be selective," he
gressional Campaign Committee.
date in Kentucky.
says. "Clinton's (poll) numbers are
That suits Lewis just fine. He's at-
"Nowadays it seems like all pro-
not so low this kind of campaign will
tacked Clinton - and Prather - on
fessional politicians are the same,"
work across the board."
everything from higher taxes to "so-
an announcer intones.
Paxon and other GOP
cialized medicine" to homosexuals
"If you like Bill Clinton,
officials were embold-
in the military to Whitewater.
you'll love Joe Prather."
ened by success earlier
"We consider this a referendum
That bit of sophisticat-
this month in a special
on Bill Clinton," Lewis says.
ed computer trickery
election to fill an open
has been playing on tele-
House seat in Oklahoma.
vision screens across
Republican Frank Lu-
western Kentucky for
cas, attacking his oppo-
the past 10 days, part of
nent as a Washington in-
a $220,000 barrage by
sider, won despite a 2-1
national Republicans on
voter registration disad-
behalf of Ron Lewis, the
vantage.
Republican in today's
Courier-Journal
Republicans immedi-
special election.
PRATHER: Demo-
ately commissioned a
The ad, a technical
cratic candidate
poll of the next district at
advance in the science
stake, Kentucky's 2nd.
of media campaigning
They found Lewis, a
is a major test by Repub-
conservative Christian
licans of their 1994 strat-
bookstore owner, far be-
egy: pound Clinton re-
hind Prather, a veteran
lentlessly and tie
state legislator. But they
Democratic congres-
found Clinton weak -
sional candidates to him.
only 30% said they
"This is the first in-
would vote for him to-
TUESDAY, MAY 24, 1994 USA TODAY
stance of a complete
day, Paxon says - and
and direct tying of a
decided to pour money
Democratic congres-
into their anti-Clinton
sional candidate to Bill
Couner-Journal
strategy.
Clinton," says Stuart
LEWIS: GOP oppo-
The district has been
Rothenberg, publisher
nent in today's vote
won easily for 40 years
of a political newsletter.
by Natcher, who died in
"I suspect we're going to see plen-
March. It is heavily Democratic in
ty of these attempts from now until
registration, but George Bush car-
November
This is the tipoff."
ried it twice.
Win or lose in Kentucky's vote to
"I think we've caught the Demo-
replace be late Democratic Rep.
crats flat-footed," says Dan Leonard,
William Natcher, Republicans in-
who produced the ad with a col-
tend to continue linking Clinton to
league at the National Republican
Democratic congressional candi-
Campaign Committee.
dates in districts, such as this one,
Democrats, however, contend the
where pelling shows the president is
district is unique because Prather
particularly weak.
handicapped himself by refusing na-
"No Democrat is going to be able
tional Democratic help, out-of-state
to hide anymore," says Rep. Bill
money and contributions from politi-
ALSO IN WASHINGTON
53% believe in Jones 'incident'
Whitewater figures in Ark. primaries
Two Whitewater figures and a
phemed not just the Clintons but
A USA TODAY/CNN/Gallup Poll shows most of those surveyed be-
Native American are among the
all of Arkansas.'
lieve "some incident" took place between President Clinton and ex-
candidates in primaries today.
James McDougal, Clinton's
Arkansas state worker Paula Jones, but more than two out of three say
In Arkansas, where voters em-
partner in Whitewater, is among
it's irrelevant to judging Clinton's performance.
bark on their first gubernatorial
three candidates for the Derno-
The weekend poll of 1,005 adults finds most people are generally
election season without Bill Clin-
cratic House nomination in the
skeptical of Jones' accusations that Clinton tried to engage her in oral
ton in 16 years:
4th District, the only congression-
sex in May 1991 when he was governor of Arkansas:
Sheffield Nelson leads two
al primary. The winner to in-
53% say "some incident" occurred; of those, 50% say the encoun-
opponents vying for the Republi-
cumbent Republican Jay Dickey,
ter as described by Jones should not be considered sexual harassment,
can gubernatorial nomination to
who is unopposed.
while 40% say it should.
face Democratic Gov. Jim Guy
In Idaho, Attorney General
71% say questions about Clinton's character are not relevant to
Tucker, who took over from Clin-
Larry EchoHawk is expected to
judging his job performance; 29% say they are relevant.
too and who has no opposition.
coast to the Democratic guberna-
57% say Jones' charges are mostly or completely false; 27% say
Nelson still must face anger
torial nomination, the first ! to-
they are mostly or completely true. The poll has an error margin of 3
from some critics over his role in
ward becoming the nation's first
percentage points.
Richard Benedetto
supplying reporters with a steady
Indian governor. Phil Batt
a
Low of tips on Whitewater - a
huge lead over three challengers
CHILD
SAFETY: The House passed the Child Safety Protection Act,
story widely seen as having blas-
for the Republican nomination.
requiring warning labels for toys that present a choking hazard to chil-
dren and establishing a uniform safety standard for bicycle belmets.
The bill goes to the Senate. The House also approved:
Banning U.S. dumping of all radioactive waste into the oceans.
Current law prohibits only dumping of high-level radioactive waste.
The bill now goes to the Senate.
Authorizing $63 million for the Office of Minority Health in the
Public Health Service, a new center to improve the ability of health-
care providers to serve limited English-speaking groups. The bill now
goes to conference with the Senate, which passed a different version.
CHINA TRADE: Agriculture Secretary Mike Espy became the latest
Cabinet member calling for renewal of most-favored-nation trade sta-
tus to China, calling China "one of our most important agriculture mar-
kets." Secretary of State Warren Christopher is taking Congress' pulse
91
on the issue before making a recommendation to President Clinton.
Cowboys owner profits from Madison deal
FORT WORTH, Texas, May 23 (UPI) Dallas Cowboys owner Jerry Jones made a
profit on an investment involving the thrift at the center of the Whitewater
affair after the institution failed, a newspaper reported Monday.
The Canadian land deal was not directly involved in Whitewater, but the
Fort Worth Star-Telegram reported that the investment is under scrutiny
because it involved a venture by Madison Guaranty Savings and Loan of Little
Rock.
In 1984, Jones and longtime Arkansas partner Sheffield Nelson invested
$450,000 in the venture on Campobello Island, off the coast of Maine between
the Canadian Provinces of New Brunswick and Nova Scotia.
Jones and Nelson, with a 25 percent stake, were limited parters and a
Madison Guaranty subsidiary was the general partner and had a 75 percent
stake.
The duo got out of the deal in 1988 when then-insolvent Madison wrote
Jones and Nelson a check for $725,000, according to the Star-Telegram.
Jones said he is a supporter and admirer of President Clinton but knows of
no connection between the chief executive and the Campobello project, the
newspaper reported.
The Campobello venture caught the interest of Fiske and congressional
investigators because it was the single largest investment by Madison and the
project's losses forced the thrift into insolvency, the newspaper reported.
All of Madison owner James McDougal's ventures are under investigation,
including his Whitewater Development Corp. partnership with the president and
first lady Hillary Rodham Clinton.
Questions have arisen over how Madison an insolvent thrift under the
direction of federal managers since 1986 justified the payment.
William Seidman, who headed the Federal Deposit Insurance Corp. and the
Resolution Trust Corp. from 1985 to 1991, was shocked to learn of the payout.
``I can't believe it, Seidman said. '`It's an extraordinary event. It
smells. It could be legit, but I doubt it. Seidman did not oversee thrifts
at the time of the Madison payout.
**** filed by:UPI-(us) on 05/23/94 at 13:41EDT ****
**** printed by: WHPR (JEL) on 05/24/94 at 08:14EDT ****
BC-CLINTON HILLARY-MAGAZINE
HILLARY RESISTED WHITEWATER INVESTIGATION-MAGAZINE
NEW YORK, May 22 (Reuter) - Hillary Rodham Clinton was behind what has
been described as one of the most ill-advised moves by President Clinton --
resisting the appointment of an independent counsel for the controversial
Whitewater land deal, the New Yorker magazine reported Sunday.
It was Hillary who made the decision, Bev Lindsey, who worked with
Mrs Clinton on the presidential campaign, was quoted as saying in a
wide-ranging profile of the first lady.
I think they both felt that they could tell people there was nothing
there and people would believe it.''
The independent counsel into the failed real estate deal was eventually
appointed and is now addressing questions of whether funds were improperly
channelled from a failed government-backed savings and loan institution to
Whitewater or to Clinton's campaign for governor of Arkansas.
The core issue behind the controversial investment that has dogged
Clinton's presidency is whether the couple made money with the help of people
who stood to gain from favourable treatment by the state while Clinton was
governor.
The Clintons have denied any impropriety.
Of the couple, the article says, Mrs Clinton was the one more actively
involved in the Whitewater deal, taking out a $30,000 loan to build a house on
the property.
Whitewater, plus questions over a venture by Hillary Clinton into the
risky commodities futures market that earned her almost $100,000 on a $1,000
investment have diverted attention from key policy initiatives, including the
health care reform in which the first lady has taken a leading role.
In a wide-ranging piece based on extensive interviews, staff writer
Connie Bruck paints a portrait of a woman who while sincerely idealistic and
strikingly capable, is more driven and calculatingly ambitious than her
populist husband.
In the article, she describes the seeming autonomy with which Mrs Clinton
has made decisions on health care policy that could affect criticial White
House initiatives.
Although Clinton says he doubts whether his wife would ever run for the
presidency, the article quotes White House insiders who say plans are being
made for her to run if Bill Clinton's two-term constitutional limit runs out.
There are a great many people talking very seriously about her
succeeding him, said Betsey Wright, once President Clinton's most important
political adviser.
Their staff will say, 'We have to do it this way and that way, and then
we'll be here at least 12 years.' And it's not just the staff. Friends,
Democrats, people out across the country think it's a very viable plan of
action, Wright said.
While Bruck was given almost two hours with President Clinton, the first
lady herself was not available.
Bruck quotes classmates at Yale Law School saying that Hillary, who
became a widely respected lawyer, was clear even then in her desire to be an
important political figure. One friend described her as having a religious
zeal.
When one talks to her friends and her husband, one hears it described
in varying ways but they are all facets of the same intensely insular and
unbending characteristic, Bruck wrote.
She quoted the president as saying of his wife: ``Once in a while she'll
come in and say, 'I want to talk about such-and-such. And you know, Clinton
said gesturing toward the massive oak desk in the oval office, ``I might as
well try to lift that desk up and throw it through the window as to change her
mind.
It's been really hard for her, Clinton said, referring to the media
scrutiny and public pressure on his wife over the past few months.
While Hillary Clinton has exhibited many of the character and
professional traits admired in her male colleagues, she has been criticised
by some politicians and ordinary Americans who feel she should play a less
powerful role as first lady.
A virtual parade of women and witnesses over the past few years claiming
to have been involved in Bill Clinton's alleged philandering have also put his
wife in a difficult position and have dogged his political career.
He always had a weakness for bleached blondes with big jewelry, in
short skirts, their figures shown off to best advantage, the New Yorker
quotes an unnamed friend as saying.
It also quotes an Arkansas insider as saying Clinton backed out of his
first bid for the presidency in 1987 because he feared it would be haunted by
reports of extra-marital affairs.
Clearly he was saying he had done things and he didn't know at what
point it would be safe to run, said Max Brantley, editor of the weekly
Arkansas Times, recalling a conversation with Clinton shortly before he
announced he was dropping out.
By that time there was long-rumoured trouble on the woman issue
it
was clear to me -- hearing his voice, seeing how he looked -- that it was the
major reason for his choosing not to run, Brantley said.
Asked by Bruck how he deals with the pain the constant allegations of
philandering must cause his wife, Clinton said: Well we deal with it
....
Someday I may even talk about it.
Just, well there is a story there and not the one that's been told and
maybe someday it will be, but I
I'm
president,
I have to do my job, I have to deal with America's business now
...
and that's
what I'm doing.
REUTER
****
filed by:RB--(--) on 05/22/94 at 10:58EDT ****
**** printed by:WHPR(JEL) on 05/23/94 at 08:57EDT ****
launch costs are greater than NASA's pro-
jected cost for the entire station. The 16
launches required to put it in orbit will cost
$21.3 billion. Additionally. along the way.
NASA plans to make 10 visits to the Russian
Mir space station: this adds another $13.3
billion.
The Washington Post
SUNDAY, MAY 22, 1994
The worst is yet to come. Should the sta-
tion ever get into orbit. the United States
will be saddled with using and maintaining it
for 20 years or more. A 1990 NASA study
projecting maintenance costs for space sta-
tion Freedom estimated that 3,700 hours of
spacewalks would be required annually.
Since U.S. astronauts have accumulated less
than 500 hours of spacewalking in their first
33 years of flight, the burden of maintenance
on the station looms large. And of course the
shuttle flights to and from the station will
continue to rise in cost as the 20-year-oid
shuttle technology ages.
A 1991 projection of the Mars rover/re-
turn mission pegged the cost of the most
elaborate version at $7.7 billion. Adding the
historic 77 percent for cost overruns and 30
percent for overhead. the mission comes in
at $17.7 billion. or $18.7 billion in 1993 dol-
lars. This is a tidy sum. but just a fraction of
the $500 billion estimated for a manned mis-
sion to Mars. It is also a fraction of the real
price of a space station-probably in excess
nautics. is least $82.3 billion. Subtract the
the shuttle has made it less accessible. At
of $100 billion. And that is just to get the
$10.2 billion that NASA claims to have spent
$26.600 just to get a pound of material into
station up there. Then the real costs of main-
on the space station so far and you get $72.1
orbit. nothing is going to be sufactured
taining this project settle upon the NASA
billion. Divide that by the 54 shuttle flights in
economically in space. Nothing is going to be
budget as an entitlement for the next two or
this period and the result is $1.33 billion per
routine about spaceflight. No touris n will ap-
three decades.
flight.
pear. No opportunities will present them-
Even that does not include all the costs of
selves for the United States to reenter the
e have been at manned spaceflight
the shuttle. In fact. development costs
commercial market for heavy launch servic-
W
for 33 years now. and the truth is
should be added to operational costs. just as
es.
that the pot of gold we expected hu-
you would include the purchase price of your
car as part of your transportation costs. The
t is against this background that we must
mans to find in space has returned to lead.
$19 billion to develop the shuttle through
I
consider the space station numbers.
There is nothing there worth the risk and
When President Reagan proposed the
the cost. It is time to call a halt.
1982 would convert to $34 billion in 1993
dollars. Amortized over 54 flights. that adds
station in 1984, the price tag was $8 billion
As a general rule, scientific satellites in
another $630 million per flight. In round
(that is $10.7 billion in 1993 dollars). The
Earth orbit cost hundreds of millions. Com-
numbers, this comes to about $2 billion per
station was to be fully manned by 1994. Ten
plex space probes cost billions. The most sig-
shuttle flight.
years, seven redesigns and $10.2 billion lat-
nificant and ambitious unmanned missions
Looked at another way-and counting just
er. not a single element is in orbit. Indeed.
can cost $10 to $20 billion. And the real in-
the operational costs-Americans must pay
barely a piece of metal has been bent. NASA
novations in spaceflight. the true exploration
$26,600 a pound to put a payload into low
now guarantees that the latest version of the
of the unknown. are being conducted by the
Earth orbit. Compare this with the $333 a
station will be in orbit in 2002 at a total cost
cheaper, unmanned missions.
pound (in 1993 dollars) that NASA promised
of $17.9 billion-not counting launch costs.
Should a useful role ever be found for as-
when selling the shuttle in 1972. As it turned
There are two reasons to be suspicious.
tronauts, we will have the technology to ex-
out. they were off by almost two orders of
First, NASA's average cost overrun on pro-
ploit it. For now, however. we need to direct
magnitude-not a comforting margin of er-
jects historically has been 77 percent. There
our resources to new and more promising
ror for a technical agency.
is little reason to believe that it will do better
endeavors. That, after all, was the original
Far from opening up the space frontier.
on this complicated undertaking. Second. the
promise of space.
2/2
75
cret meetings
This litany of stonewalling
An
abuse
of
D'Amato is the capital's reigning champion of the politics of
power Interfering with an independent investigation." But
expediency, a time-honored philosophy in which public life is
Kinsley is determined to force D'Amato to address his own his-
seen less as an intellectual or moral debate over the role of gov-
tory of ethical problems, a long and tangled list of allegations
ernment than as a sweaty street brawl. In the arena of expe-
that once led a Democratic opponent to label him a "walking
diency, the politician's goal is not so much reducing crime or
quid pro quo." If you are so big on full disclosure, Kinsley tells
improving health care as scoring rhetorical points and slam-
D'Amato, "why don't you allow the release of your testimony
dunking the opponent. In other words, doing whatever it takes
before the ethics committee a couple of years ago, when they
to win.
were investigating your brother's use of your office for influ-
Thus, when Al D'Amato is accused of improprieties, he
ence peddling?"
lashes out at his accusers. When charged with doing favors for
D'Amato's gaze is steady. He's been through this before.
campaign contributors, he boasts that every constituent is en-
"Let me say this, Mike, and you know very well, that we co-
titled to representation. When running for reelection, he assails
operated 1,010 percent. That we made available 250 boxes of
his opponents as ethical pygmies. He does all this with an in-
documents, a million pages. That I was cleared of wrongdoing-"
your-face Long Island bravado, betraying not the slightest trace
"You were not," Kinsley says.
of embarrassment.
"I absolutely was, Michael," D'Amato
And it works. It works because the
says, lips tightening.
press, which has the attention span of an
"You were charged," Kinsley says
infant, gives him a platform. It works
with a slight smirk, "and your brother
When AI D'Amato
because television loves conflict, which
was convicted."
D'Amato provides in spades. It works
The senator's tone turns to barely
because the 56-year-old senator knows
suppressed outrage. "Michael, Michael,
is accused of
how to beat journalists, even those who
don't you dare distort the record as it re-
hold him in low regard, at their own
lates to what the committee found. They
improprieties, he
shortsighted game. It works because
did find as it related to the operation of
D'Amato's political peers don't hold him
the office, we were negligent with re-
lashes out at his
to a higher standard. It works because
spect to allowing my brother access.
the voters buy-or at least tolerate-
We've taken care of that."
his act.
Having backed off from his "cleared of
accusers. When
Washington is the ideal venue for
wrongdoing" assertion, D'Amato slows
D'Amato's pugilistic approach, for it is a
his cadence slightly: "I took my hit. I
charged with
city built upon the politics of expediency.
went before the voters. The voters
Yesterday's campaign promise is today's
elected me. Now the fact of the mat-
doing favors
lily-livered compromise. Positions shift
ter is-"
with the ebb and flow of punditry and
"Why don't you release the docu-
for campaign
polls. Quick-fix solutions are hyped as
ments?" Kinsley interrupts again, shak-
panaceas. Partisan sniping is cloaked in
ing a blue pen at the camera.
the rhetorical garb of high principle. And
D'Amato suddenly turns patronizing:
contributors,
everyone, including the media, has an
"Michael, you asked me a question, give
interest in pretending that routine mud
me a chance to answer. Don't be rude
he boasts that
fights are really grand constitutional
and embarrass yourself by interrupting
struggles.
me." The senator allows himself a small
smile. He bounces slightly in his seat.
every constituent
On the Beltway battlefield, tactical
advantage is everything: intellectual
He's enjoying this.
"Now! The fact of the matter is, this
is entitled to
consistency means nothing. Eighteen
months ago, the Republicans managed
is merely an attempt to divert atten-
to block Congress from extending the
tion from what is my constitutional
representation.
Watergate-era special prosecutor law.
job as ranking member of the Banking
After watching Reagan and Bush aides
Committee."
dragged through lengthy investigations
Drowning out two more attempts by
on everything from Iran-contra to pass-
Kinsley to regain the floor, D'Amato de-
port-file abuse, they had amassed lofty
clares: "No! Yours is nothing more than an attempt to divert
legal arguments as to why the executive branch should be
attention from the real issue. And the issue is"-his voice is
placed beyond the reach of court-appointed prosecutors.
booming now-"has there been an abuse of power by the White
Once the Clintons were knee-deep in Whitewater, however,
House in attempting to keep a legitimate investigation from
these lawyerly objections quickly evaporated. The Republicans
going forward?"
clamored for a special prosecutor as the only way to assure an
Pat Buchanan steps in like a referee separating two fighters,
independent probe-the very argument they had dismissed
and soon it's time for a commercial break. D'Amate may be
when their party controlied the white House. And the press,
scratched, scarred, even bloodied in places, but he has clearly
caught up in the political drama, did not make much of this bra-
won the round.
zen flip-flop.
As for Kinsley, he got letters from nuns accusing him of be-
Democrats play the same game, of course. The president re-
ing unfair to Al D'Amato.
sisted the notion of a Whitewater prosecutor for weeks. insist-
ing that there was no wrongdoing to investigate. Once he
IN POLITICAL WASHINGTON, where past lives are shed like so
bowed to political pressure and the administration hired Robert
much excess skin, anything is possible. Even Alfonse D'Amato,
Fiske, however. Clinton began citing that very appointment as
crusader for ethics in government.
evidence of his desire for a full investigation-and as justi-
12
THE WASHINGTON POST MAGAZINE
2/8
77
It was a sound bite designed to make the news, and it did.
Some Republicans cringed. "I think they're acutely embar-
Next D'Amato made sure that Roger Altman, the acting RTC
rassed by Al D'Amato," Rockefeller says. Sure enough, when
chief, was asked whether he had discussed the Madison probe with
D'Amato met with Fiske to discuss whether congressional hear-
anyone at the White House. When Texas Republican Phil Gramm
ings would hurt the Whitewater probe, he took along the exqui-
popped the question, he struck paydirt.
sitely moderate senator William Cohen as cover. Soon the Re-
"I've had one substantive contact with White House staff,"
publicans were talking of creating a select committee for White-
Altman replied. D'Amato followed up with a series of questions
water hearings, rather than keeping them in the Banking Com-
about who else was in the meeting. The Washington Post later
mittee, where D'Amato would be the lead attack dog.
reported two other such meetings involving Altman. White-
"I don't think anyone has said, 'D'Amato's been hauled
water, which had been fueled by earlier press disclosures, was
through the ethics committee, why do we want to have him out
now launched into the media stratosphere. And AI D'Amato was
front?' a knowledgeable Republican said. "Obviously that's
along for the ride.
going to be an issue. But he's not the kind of guy where you say,
By this time D'Amato had established himself as one of the
'Hey, you're being too tough.' Alfonse would just take that and
Republican Party's two leading Whitewater critics. The other
be tougher."
was Jim Leach, the sweater-wearing Iowa congressman, who
"A lot of weaker souls would have anticipated what would
projects an image of soft-spoken, bipartisan high-mindedness.
come down and would've stayed away from Whitewater," says
D'Amato, by contrast, comes across as a Long Island loudmouth,
Susan Molinari, the GOP congresswoman from Staten Island,
who portrays the controversy as a
test of D'Amato's character. "That is
just so typical of Alfonse's persona.
He saw an issue and would not be put
off by potential threats of bringing up
his past."
"That matter's over; it's a specious
issue," D'Amato says of the ethics
probe. "What I did or didn't do, et
cetera, becomes irrelevant." The
Democrats, he says, are trying to
"attack the messenger" to neutralize
his assaults. "I'm not going to hang
my head
and say that for all times
as a senator I can never raise any
questions. That's preposterous."
He certainly wasn't put off by a
little ridicule in "Doonesbury." Last
month, D'Amato's crusade simply
became too much for Garry Trudeau.
The cartoonist had his patrician con-
gresswoman, Lacey Davenport, tut-
tut to the senator that his "little
lapses
on the ethics front are
rather a problem for us. Lest we ap-
pear merely vindictive, it might be
best if you kept a low profile during
a "charming rogue," in the words of Newsday columnist Sydney
the actual hearings." Say, in Cleveland or Seattle.
Schanberg, whose own view of the senator is far dimmer than
A man of lesser chutzpah might have succumbed to embar-
that.
rassment. Not D'Amato. Cartoons in hand, he strode onto the
As Whitewater gathered steam, D'Amato missed no oppor-
Senate floor and read Lacey Davenport's lines.
tunity to exploit his new-found prominence. When Associate At-
- 'But if there is no real scandal at the center of White-
torney General Webster Hubbell, another Rose Law Firm alum-
water,' he said, affecting a falsetto voice,
we should ask
nus, resigned over disputed billings at the firm, D'Amato called
ourselves honestly: Why are we doing this?' In his own deep
him "a political hack" and said "good riddance
The
stench
that
voice, he delivered the punch line Trudeau had scripted for him:
started in Little Rock has made its presence felt here."
Because it's payback time, baby!' -
Soon D'Amato was all over the media map: "Nightline." "Good
Then came the counterpunch.
Morning America." "CBS This Morning." "Meet the Press." On
"Mr. President," D'Amato bellowed, addressing his Senate
"Donahue," he fenced with Phil over his past ethics problems, at
colleagues and the C-SPAN cameras, "the only payback I have
one point accusing Donahue of a "cheap shot."
seen is to watch President Clinton pay his back taxes."
As the program was ending, Jay Rockefeller, the Democratic
Democrat David Pryor of Arkansas quickly took the floor to
senator from West Virginia, could no longer contain himself. "I
note that Richard Nixon Ronald Reagan and George Buch all
think that Al D'Amato's having more fun than he's ever had in his
had to pay back taxes while in office. "Where was the senator
entire life," Rockefeller said. "He's making a spectacle of this."
from New York when these back taxes were paid? Where was
"Oh, you're out of line!" D'Amato snapped. "You're out of
his outcry?" Pryor asked.
line, Jack. You really are
You'd-you'd be pressing for
Next came George Mitchell, the Senate majority leader, as-
hearings if George Bush were there. Believe me, you would."
sailing D'Amato for making "false" statements, for endeavoring
"No, I would not," Rockefeller replied.
"to embarrass the president, apparently to cause political dam-
"Oh, of course you would."
age to the president."
14
THE WASHINGTON POST MAGAZINE
Photograph by Reuter
4/8
79
D'AMATO
continued from page 15
No mystery here: Puerto Rico was un-
der the jurisdiction of HUD's New York
regional office. The head of the office,
Joseph Monticciolo, was appointed on
D'Amato's recommendation. Monticciolo
had a speed-dial button on his phone with
D'Amato's number and, according to an
aide, generally "cleared" his decisions
with the senator. An internal HUD memo
discovered by the Wall Street Journal said
that D'Amato had personally pushed for
several Puerto Rican housing projects.
A major beneficiary of these HUD
grants was Eduardo Lopez Ballori, a
Puerto Rican advertising executive. Dur-
ing the same period, as it happens, Lopez
Ballori made $75,000 in illegal political
contributions, mostly to D'Amato's cam-
paign. Lopez Ballori circumvented the
federal limit on individual contributions by
donating the money in the names of 27
friends, relatives and associates and later
reimbursing them. He made a $700,000
profit on public relations work for the
HUD projects.
D'Amato said he had indeed lobbied for
more HUD grants for Puerto Rico-on
behalf of the more than 1 million Puerto
Rican New Yorkers, naturally-but in-
sisted he had not pushed for any partic-
ular project. He said Joe Monticciolo, his
protege, had "misplaced the confidence
which I gave to him" and "probably used
my name" in connection with the Puerto
Rican projects. "And he shouldn't have. It
was wrong."
New evidence emerged when the HUD
scandal erupted in 1989. A department
official had written to Pierce's aide Deb-
orah Gore Dean-who was later con-
victed in the scandal-that Monticciolo
was "putting me in contact with a group in
Old San Juan that is working on units
through Joe and D'Amato." When Lopez
Ballori went on trial, he testified that
D'Amato had him write a "white paper"
on the problems that he and other Puerto
Rican developers were facing and how the
senator could help. A judge acquitted Bal-
lori of filing false campaign reports after
an earlier trial ended with a hung jury.
The list of murky activities goes on and
on: D'Amato received more than $30,000
in secret contributions from the scandal-
plagued Wedtech Corp. while helping the
Bronx company win contracts, according
to a former Wedtech executive. (D'Amato
denied any knowledge of the donations.)
D'Amato dropped a junk-bond amend-
ment opposed by Drexel Burnham Lam-
bert during a period when he received
more than $88,000 in donations from
Drexel executives. D'Amato received
$8,500 in contributions from sugar refin-
ers and supported legislation to help the
6/8
81
mean, this is a joke!" he barks. He whips
to me." Luther Parks, the owner of an
more biographical data. He orders his
out a copy of his standard letter passing
Arkansas security firm that was hired to
press secretary to get an aide on the
on constituent complaints. "You think I
guard the Clinton campaign in 1992, was
phone.
saw this thing?"
shot to death in Little Rock last Septem-
"You know that thing we asked for on
(This was not the first time D'Amato
ber. His death remains unexplained, but
Patsy Thomasson?
You stay on top of
had intervened for persons of less than
there is no evidence linking the murder
that! You hear me? All right, baby!"
pristine character. New York Mayor
with the Whitewater case.
Rudy Giuliani has said that when he was
D'Amato doesn't stop there. He rips into
WHAT. IN THE END. are we to make of Al
the federal prosecutor in Manhattan,
a White House official named Patsy Thom-
D'Amato, born-again ethicist?
D'Amato called him on behalf of two mob-
asson. "I have to know how it is that a for-
The easy answer is supplied by
sters, in one case asking him to review
mer drug dealer's executive assistant-
D'Amato's Democratic detractors, who
murder charges against Paul Castellano.
who ran his business when he was in prison
have been vying to come up with the best
D'Amato said he was acting at a friend's
for two years-can come out and be the
jokes about the senator's new role.
behest and did not know the particulars of
head of administration for the White House
"Being attacked on ethics by Al
the case.)
What was she doing in that place? She
D'Amato is like being called ugly by a
Listening to D'Amato's they're-out-to-
didn't know he was a coke dealer?"
frog," says Democratic Chairman David
get-me spiel, one would assume he knows
Thomasson, an old pal of the Clintons,
Wilhelm.
how damaging an unsubstantiated charge
worked for an Arkansas bond trader
"I guess Bob Packwood was busy," says
can be. And yet, despite repeated com-
named Dan Lasater, another Friend of
Sen. John Kerry of Massachusetts.
plaints that he is the subject of unfair in-
Bill who drew media scrutiny after his
"Every single time Senator D'Amato
nuendo (that he should not be blamed, for
drug conviction in 1986.
attacks the president on ethics, the press
example, just because his office sent out
"The normal rules of decency seem not
should bring up the senator's own sorry
lobbying letters for a client that paid his
to apply to Senator D'Amato," a White
record," says Clinton political adviser Paul
brother $120,000), D'Amato is remark-
House official says. "Even when he hurls
Begala, who appeared with D'Amato on
ably quick to toss out reckless allegations
obviously false charges designed to hurt
"Crossfire." The networks "should almost
about others.
people, the press will let him get away
have a chyron under his name: 'Sen.
Especially when he is beating the
with just about anything, and it only en-
D'Amato. Republican. Spent his life under
Whitewater drums.
courages him."
an ethical cloud.' Like they do on daytime
"At least one person
may
have
lost
D'Amato, for his part, brushes off sug-
talk shows: 'Son dated father's gay lover.'
his life in this situation, and I'm not talk-
gestions that he is tarring Thomasson
"Why the Republicans would put him
ing about Vince Foster," he says ominous-
with a guilt-by-association brush.
out there is beyond me," Begala adds. "If
ly. "T'm talking about the former security
He suddenly remembers that Thomas-
this were a court of law, he'd be laughed
guard. His death sounds like an execution
son has not responded to his request for
out."
But Whitewater is being tried in the
for, among other things, larding his
he apologizes and checks into an alcohol
court of public opinion, and D'Amato may
House payroll with Chicago friends and
treatment clinic.
yet have the last laugh. For much of the
neighbors who say they did little or no
What tends to get lost here is that cor-
public has come to believe that all poli-
government work. Minnesota senator
ruption and dishonesty remain only part
ticians live under an ethical cloud, that
David Durenberger was indicted for fal-
of our political culture. There are still
"read my lips" and "I didn't inhale" define
sifying his Senate expense accounts.
plenty of folks trying to do good work,
the standard of public discourse, that in-
Under the American political system,
plenty of politicians who haven't suc-
fluence-peddling and Willie Horton-style
politicians are required to raise vast sums
cumbed completely to "the system." And
sleaze have become business as usual.
to get elected, yet must pretend that this
it's here that the news media-with their
The public is on to something here.
palm-greasing makes absolutely no dif-
love of colorful copy and incendiary sound
Al D'Amato's career, rooted in the pay-
ference when the fixers and favor-seekers
bites, their historical amnesia and their
to-play atmosphere of Nassau County,
come around. D'Amato may be less sen-
notorious difficulty in keeping ethical
may feature an extraordinary number of
sitive to appearances than his more re-
questions in proportion-must share the
transactions that push the edge of the
fined colleagues, but at bottom they are
blame for the public cynicism.
ethics envelope, but D'Amato is hardly
playing the same game.
Because the politics of expediency
the only lawmaker to give off an unsavory
Meanwhile, slash-and-burn attacks and
can't exist without the journalism of ex-
aroma.
bizarre contortions of the truth have be-
pediency. And the kind of journalism
The Keating Five-Aian Cranston,
come so commonplace that they have lost
that's obsessed with mudsiinging and
Donald Riegle, John Glenn, Dennis De-
the power to shock and offend. Oliver
name-calling has been very, very good to
Concini and John McCain-became na-
North lies to Congress, gets off on a tech-
A] D'Amato.
tional symbols of influence-peddling when
nicality and uses his resulting fame to
"We had him on once before," says
they pressed federal regulators on behalf
launch a Senate candidacy. Republican
"Crossfire's" Michael Kinsley, who sees
of savings-and-loan kingpin Charles Kea-
rival Jim Miller dares North to release
D'Amato as a master of manufactured
ting. who had contributed to their cam-
records of his post-Vietnam psychiatric
outrage. "He was screaming and yelling.
paigns and causes (and whose bankrupt
treatment, only to be forced to admit that
Then during the break he turns to me and
thrift wound up costing the taxpayers
he himself once consulted a psychiatrist.
says, 'So, is this what you want?'
$2.6 billion). Arkansas senators David
Chuck Robb says he didn't lie when he
Michael, Michael, let's not distort the
Pryor and Dale Bumpers complained to
insisted he "hadn't slept with anyone" but
record here. The answer to the senator's
top Clinton administration officials last
refuses to deny reports that he had oral
question is yes.
year about the RTC's treatment of Seth
sex with half a dozen women. Bob Pack-
Ward, a Madison Guaranty employee and
wood denies making sexual advances to
Howard Kurtz, who covers the media for
the father-in-law of Webb Hubbell. Dan
numerous women and tries to discredit
The Post, is a frequent contributor to the
Rostenkowski came under investigation
some of them. but once safely reelected
Magazine.
5/88
Long Island Newsday Sunday, May 22 1994
NATION,
Those Bennett Brothers of D.C.
Potent forces, often
The Bennett Brothers
in opposite directions
Robert Stephen Bennett
William John Bennett
Bort: Aug. 2 1939. in Brook-
Bern: July 3:. 1943 in Brook-
By Susan Page
lyn.
tyn
WASHINGTON BURGAL
Education: Bachelor's de.
Education: Bachelor's de-
Washington - When be heard that a clussmate at
gree. Georgetown Universi-
gree. Williams College.
Holy Cross yr School in Brooklyn had his his your
ty, 1961: law degree.
1965 PhD. philosophy Uni-
zer brocher Bobby Bennett got neatly drussed. went
Georgetown University,
versity of Texas 1970. law
over to the Dry's house. knocked on the door, politely
1964: master's law degree,
degree. Harvard University,
asked his mother tc send him out - and ther
Hand University, 1965.
1971.
punched him.
Career: Law clerk, Judge
Career: Assistant to the prosi-
"Don't ever Louch TDV brother ugain" he warned.
Howard F. Corcoran, U.S.
dent. Boston University,
Four decades later, Robert $. Bennett. 54. has per-
District Court. 1985-67 assistant U.S. attorney
1972-76: executive director
feetud the verbal version of that comhative left book
1967-70: associate Hogan & Hartson 1970-75:
National Humanities Center in North Carolina
in the courtroom That's one reason be was hired this
partner, Dunnels Duval, Bennett & Porter, 1975-
1976-79 president and director. 1979-8: assoch
month by President Bill Clinton LO defend him in the
1990: partner, Skadden, Arps. State Meagher &
ate proicssor. North Carolina State University and
harassment lawsuit filed by Paula Junes and to
Flom. 1990-present
the University of North Carolina 1979-81 chair-
advise him if Congress holds hearings on the first
Clients: President Bill Clinton, Rep. Dan Rosten-
man, National Endowment for the Humanities.
family's Whitewater investments.
kowaki (D-III). Cincinnati Reds owner Marge
1981.85 secretary of education, 1985-1988, White
Which is of more than passing interest to that
Schott. former Delense Secretary Clark Cittlord
house drug CZP: 1969-90.
younger brother. William J. Bennett, 50. a former
former Defense Secretary Caspar Weinberger,
Becks: "The Book of Virtues: A Treasury of Great
cabinet member in Republican administrations who
Chief counset, Senate Ethics Committee. Keating
Moral Stories." "Counting by Race: Equality from
is now deciding whether to seek the Republicate nomi-
5
the Founding Fathers to Bakke" (with Terry Eas:-
nation against Clinion in 1996
Family: Wife, Elien, und three children: Catherine,
land). Our Children and Our Country: improving
If Beb Bennett is trying to surve Clinton's bacon,
Peggy and Sarah
America's Schools and Aftirming the Common
brother BDI is more interested in frying A.
Mobbies: Fishing at his second home on the Yet-
Culture "The De-Valuing of America: The Figh:
They are a big. blueserv pair - two boys from
lowsione River noar Livingston. Mont
for Our Culture and Our Children."
Brunklyn whose bunds "were forged in fire and
Family: Wife. Elayne: two children: John and Jo-
blowd during a difficult childhood, Bill Bennett says.
segn.
And they depy that there 18 northing awkward about
Nobbies: Touch footbail rock and roll.
Bue Bennet: representing Clinton a: $450 an hour in
the court CLSE while Bill Rennett blasts the president
"D $30,00K-e-pcp specibes on the lecture circuit After
"We're engaged in the politics of puralysis and the
Bill Bennet: aud. Sbc also had a series of failed mar-
all. Bob - the capital's pre-eminent defense attorney
politics of political destruction," Bennett raged IST the
riages - five in all. "Severe! of the people she was
for white-collar defendants Bill is one of the Repubit-
news conforence. Gatiy denying the charges. When
married to were not the most pleasant people to us."
can Party's lending intellectuals and author of n cur-
reporters failed to ask about Jones' promise to donare
he went on. "There was tension and there was fight:-
rent beat-selier, The Book of Virtues: A Treasury of
any damages awarded to clarity. he answered the
ing and there was argument, and these were unstedy
Creat Moral Stores
question anyway. "It's not LOO much to give away
relationships."
or I was a doctor would you ask me, do 1 treat
what you don't ever expect to get." be said. urging
That may be why Bob become Bill's protection
Democrate?" Bob Bennett said in an interview at the
reporters to axk what she would do with profits from
When their mother was dying. Bob handled her of-
prush Washington officer of his law firm, Skaddup.
TV appearance book contracts and movie rights.
fairs no Bill could concentrate Oh completing Harvard
Area State Meagher & Flom. with its stunning view
From the PLANT, Bob www the fighter and Bill the
Law School: Bob alroady land gotten a law dagree
at Funnavivania Avenue of the White House and Ln-
bookworm. "If anybody touched Bill, Bob was right
from Georgelown University and 8 matter's law de-
fuyette Park. "Dons that make it difficult for Bill if]
there," remembered Laix Bost Bcanett, their step.
gree from Harvard. When Bill considered joining the
do" I E a kind of enctor for legal problems.'
mother. now in her 80s and recuvering from a stroke
radical Students for a Democratic Society at Williams
am Bennell certainly ham't begun to pull his
College Bub wilked him out of it.
punches for bis beuther furnows elient. think
Even now. Bob Bennett remains very inuch the
he's girt & serious products with the truth,' Bill said of
older brother.
Clinton later in tor day SA be sat in the downlown
Big Names, High Stakes
"I would think that we should regurd currives as
offices of Empower America. a Republican think cook
equals but for him, it just doesn': change Bill Ben.
he neiped found.
Some of Robert S. Bennett's prominent clients:
net: said "HE's the older brother, and at. still inucl:
Bot Bearett was the name White House Counsel
in need of instruction. He culled me when I with !
Lioyd Cutler and other accior aides brought Clinton
Name
Ovicane
would say, around $5 years old, and and 'I don
when it was clear he would face a lawsuit from Jonce.
President Bill Clinton
Lawsuit pending by former
remember us krowing up if over talked to you about
who alleges that - hise she was AL Arkansan state em-
Arkansas employee Paula Jones
the facts of life.' I auid. You dids'L He suid. 'Did
player in 1091. Clintro cruduly propositioned but.
alluging sex harassment
someone? Is it covered" I said, 'Bob. I'm 35. I've fig-
Bennett already was and remains the lawyer in Wash-
ured this out
inyton's aecond-must-cilebrated political case. repre-
Dan Rostenkowski
Awaiting decision by Justice
At 6-foot-2. Bill Heunett is periuips fire inches tal.
senting House Ways and Means Committee Chair
(D-Ai.). Chairman
Dept. whether k indict on
= than his older brother, but they chare the beciy
man Dan Rostonkowsk: (D.II) against a possible
House Ways and Means
corruption charges
build rumpled suits und boisternus laughs of men
indictment on corruption charges Bennett also nad
Caspar Weinberger,
Indicted in the tran-contra
who enjoy good food and loud music Both families
*** hired 23 Depury White House Chief of Staff Har-
Defense secretary for
attair out pardoned by President
will vacation together in August
old Ickes and White House Staff Secretary Juhn Pode-
President Reagan
Pish before trial
"Watching the two of them at the Palm is restal
PM to represent town her the were subpossed by
rant known for its substantial cortions - really
Whitewater special counsel Robert Fiske
Marge Schott
Suspended for one season for
something elar," said William Kristol, a Republicar
in the Whitewoter case, too jawyer representing the
owns. Circinnali Reds
making racially insensitive
strategies who worked ns Bill Bennett's chief of staff
president and Hillary Rodham Clinton was David
remarks
when Bennett was secretary of education in the Res.
will a highly respected but intensely private attorney.
Clark Clifford
:- the Jones chas. mides BAJO Bill Clinton wanted a
Prosecutors dropped charges
gun administration "My main thought about B.il and
Truman's White House
Bob together is that they could make cow. into at.
rwyer was could handle the politics as well as the law.
in BCC Dank traud
counsel LBJ's defense
endansered special
e-chestruting an aggressive public response airped at
case citing his age 87
unimizing the politions damage. After a White House
secretary
But while But Bennet: is passionately printical
arguing conservative principles and policies in jobs
meeting with both Clintons Bennett was bired.
that have included besding the National Endowment
"The is 90 percent polities and 10 percent a law-
for the Humanities and service as Premient George
su.t," Bob Bennett sonffed OVER lunch at his office.
at ber Munhattan apartment. "And Bill. he absolute.
Bush's drug ezar Bob Benactt is almost apolitical
devouring a tabs and potato-chip sandwich and
ty never took his eves off a bank H. read. hard read
ID his news H. dari 2nd to give his party
drinking a Diet Coke. "I think what happened IS
all the time.'
uffiliation or say whom be had supported for presi-
iwo interests have joined up here a financial inter-
- an interest in outrity
and
They WETE born in Flatbush, to Naney Bennett and
BUTTLE
partisan
dept in 1992. describing people on himself both ridue of the aials. be
F. Robert Bennett who worked form
political interests of Chinten-haters
said. "My only politics is getting the best results for
Bank, then 17ust Co. and, after the
On the day the towellt = ORE Sennez traid 8
my clients Indeed, his cliants have crusted the po-
marger. for Manufacturers Hanover Trust Co. But
mubbed nows conference at bis firm's cultion and
utical spectrum - from LB:, defense accretary.
dublind the silestions "tabloid trash with a legal cap-
their parents were divorced when Bob was 9 and Bill
Clark Clifford, to Rengan defense secretary. Caspar
tion H= already had released an affidavit from a
was 5. When the Loys were teenagers. they moved to
Weinberger. The Senair Ethics Committee hired him
Little Rock busincasman who said Jones' former law.
subarban Washington, D.C., with their mother sad
as chief countried in the hearing Five cuse.
yer pad told bits "his case was wask" but would em.
grandmother, Irone Stalay
like to take a person was has a problem
and
*661 's AVE AVONTS AMERICAN
DATAIN Clinton unless be paid her money or helped
"It was tough in that my mother had to support
By to Genero out how 14 solve Le Said "The bigger
her THE job.
us." often working two jobs as a medical receptionist
the problem. the happier Ise."
101
GOP says Democrats
stalling RTC hearing
BY TERRY LEMONS
and Madison Guaranty
Democrat-Gazation Washington Bureau
and Loan Association,
WASHINGTON - Republi-
said.
eans on Thursday accused De-
The RTC is charged
moerats of illegally delaying a
posing of the assets
House Banking Committee
savings and loans, such
hearing where questions in-
son.
volving the Whitewater Devel-
President Clinton
opment Corp. affair are ex-
Hillary Rodham Childon
pected.
were partners with
For the third time in a year,
Susan McDougal in White
committee Chairman Henry
a Marion County
Gonzalez, D-Texas, plans to is
velopment
nore the deadline for holding a
also owned
congressionally mandated over-
failed in 1989
sight hearing into the Resoln-
payers of at least
Bon Trust Corp., Republicans
Allegations that
said.
illegally transferred
Clearly there is a lack of ac-
Madison and White
countability to the taxpayers,"
among the issues being
the committee's 20 Republicans
gated by Robert Finks
said in a letter to Gonzalez.
special counsel.
Gonzalez has opposed hold-
House Republicans
Ing the RTC hearing because
raise Whitewater-related
Arkansas Democrat Gazette
Republicans plan a political
tions during the Banking
"witch hunt" into Whitewater
mittee's RTC hearing
Any crop insurance
must key on regions,
Marianna farmer says
BY JANE FULLERTON
AND TERRY LEMONS
Washington -
Washington
WASHINGTON A Marian-
notebook
B2 farmer raised questions at a
Senate hearing Thursday about
reforming the nation's crop in-
discovered their rate hike was
surance program.
based on erroneous cost figures.
Robert McGinnis urged Sen.
David Pryor, D-Ark, and other
members of a Senate Agriculture
Sen. Dale Bumpers, D-Ark.,
subcommittee to avoid a "one-
contends a new government plan
size-fits-all" policy on crop in-
for handling the nation's vac-
surance.
cines is so flawed be may intro-
The Clinton administration
duce legislation to stop it from
has proposed a plan that would
being implemented.
save $750 million in the next five
Bumpers made his comments
years.
to officials of the Centers for Dis-
The proposal includes elimi-
ease Control during a Senate Ap-
nating some federal disaster
propriations subcommittee hear-
funding for crops. In return,
ing Wednesday.
farmers participating in federal
According to Bumpers, the
commodity programs or Farm-
ers Home Administration loan
plan would require the CDC to
programs would be required to
purchase large quantities of vac-
take out eatastrophe insurance.
cines from manufacturers. More
McGinnis said commodity
than 75 percent of the vaccines
groups support President Clin-
then would be stored in a single
ton's general crop plan. but they
facility before being shipped na-
"are skeptical that a workable
tionwide.
crop insurance program can be
Bumpers questioned whether
developed."
the CDC has the personnel and
equipment to complete the plan
by its Oct. 1 deadline.
The U.S. Postal Service has
* * *
canceled plans to seek a rate in-
crease for some small newspa-
A Little Rock teacher was
pers and will propose a slight re-
honored this week in Washing-
duction instead.
ton for her work in environmen-
Pryor said Thursday the
tal education.
Postal Service will propose a 15
Katherine Snyder of Booker
percent cut in mail rates for "in-
T. Washington Math/Science
county" newspapers that circu-
Magnet'School was among 12
late in one county. Earlier, a 34.1
teachers recognized nationally
percent increase had been pro-
by Project Learning Tree. Sny-
posed.
der is an intermediate science
Pryor, a former newspaper
specialist at the elementary
publisher. said postal officials
school
133
002/002
Unexampled Scrutiny of Clinton Will Echo Down the Years
To the Editor:
* * *
Your call for a special prosecutor
If the smash-and-destroy cam-
to investigate President Clinton (edi-
paign succeeds, the Republican who
torial, Jan. 4) might be better re-
takes Mr. Clinton's place had better
ceived if you at least acknowledged
have a record that withstands a very
that the rules are being changed. No
intense scrutiny and possibly even a
sitting President has ever been so
few malevolent lies.
steadily attacked for what he alleg-
If that is the way the game is to be
edly did before holding office.
played, is there any doubt that both
No one examined Lyndon B. John-
sides can play it? And will that be an
son's finances or how the coterie pro-
improvement? WILLIAM A. BAKER
moting Ronald Reagan provided sup-
Bloomfield, N.J., Jan. 7, 1994
port. Even Richard M. Nixon was
granted a clean slate upon assuming
office. These men were then judged
b
by what they did as President. But the
smash-and-destroy campaign against
President Clinton will use anything
01/18/94 14:55
that works.
Oregon outcome
Quota origins
one hand, wanting the deepest
and Mr. Nelson believed to be the
Former Rep. Denny Smith, a
With some dismay ("incredible
prurient interest in every public
author of some of the state's
conservative, won the GOP gu-
but true"), David Seligman in his
person's private life and, on the
Whitewater publicity, the race
bernatorial nomination in Or-
"Keeping Up" column in Fortune
other hand, tolerating levels of
has become highly uncertain
1
egon's primary, defeating moder-
magazine traces employment
behavior that are grotesque," he
Mr. Tucker, once considered a
ate Craig Berkman, former state
quotas in American business to
said in a breakfast interview with
shoo-in, is running scared.
party chairman, by 50 percent to
the presidency of Richard M.
reporters.
40 percent in a bitter contest.
Nixon.
"We have become a very weird
Dr. John Kitzhaber easily won
"It was Nixon's Department of
No fault
and, in some ways, sick culture,"
the Democratic nomination. The
Labor, then run by George Shultz,
Mr. Gingrich said. "I think this is
Talking to Larry King on CNN,
physician, author of the state's
that in 1970 issued Order No. 4,
a society that is destroying the
White House Counsel Lloyd Cut-
health-rationing plan, defeated
making things all too clear:
institution of the presidency as
ler said of the Vince Foster in-
Paul Wells, who did not campaign
"Affirmative action required
an important symbol binding us
quiry: "It's impossible to fault
and described himself in election
companies to create goals and
documents as a housewife.
timetables for the increased hir-
together."
anyone for what you do when a
In other races, anti-
Despite his political differ-
person as high in government as
ing of minority-group members,
ences with the president, Mr.
Vincent
Foster
commits sui-
homosexual-rights measures
who they were presumed to be
were approved in at least four of
Gingrich said he was particularly
cide. There's no book of how you
discriminatorily 'underutilizing.'
the five cities where they were on
offended by a recent skit on
handle that kind of a suicide."
"A Revised Order No. 4 in 1971
the ballot Roseburg, Cottage
extended this deal to women."
NBC's "Saturday Night Live" de-
Grove, Veneta and Oakridge.
Why would Mr. Nixon do this?
picting Arkansas state troopers
Welfare reform
The contest was too close to
Mr. Seligman asks rhetorically.
accompanying a womanizing Mr.
Clinton. "I thought it was sick,"
Two-thirds of longtime welfare
call in the Portland suburb of
He then provides his own answer:
recipients quit their first job in
Gresham. None of the initiatives
"For rather idealistic reasons."
he said.
three to six months, according to
is enforceable because of a 1993
"Nixon certainly had nothing
Mr. Gingrich also said Repub-
one study cited by the Boston
state law banning such measures.
to gain politically by installing ra-
licans who did not come to the
Globe in its report on the diffi-
Dr. Kitzhaber's path to the
cial preferences in labor mar-
support of Anita Hill in her sex-
culties of welfare reform.
nomination was cleared when
kets. Quotas were never popular
ual harassment allegations
"All reform plans hinge on get-
Gov. Barbara Roberts dropped
and during the 1972 campaign,
against Clarence Thomas have no
ting people off the rolls and into
her re-election bid, in large part
even George McGovern dis-
right rallying behind Mr. Clin-
jobs. But that critical transition
because of the former legislator's
avowed them."
ton's accuser.
from welfare to work is a
popularity. He is the clear front-
Mr. Seligman says he satisfied
"Republicans who were
time-consuming, difficult and
runner for the governorship.
himself at the time that the
screaming about Anita Hill are
costly process," wrote the Globe's
In congressional races, Jack-
Nixon administration genuinely
hardly in a position to turn now
Anthony Flint and Gloria Negri.
son County Commissioner Sue
wished to combat job discrimina-
and run around brandishing
"This issue of jobs has created
Kupillas won the Democratic
tion, although by 1972 much of its
Paula Jones," he said.
a fundamental rift in the welfare
nomination in Eastern Oregon's
leadership was convinced they
reform debate, a rift that
rural 2nd District, where Repub-
had made a ghastly mistake.
been brought into sharper relief
lican Bob Smith is retiring after
Whitewater at home
as President Clinton prepares to
six terms. The GOP race was too
Airport parking
This fall's gubernatorial elec-
unveil his reform plan this
close to call.
tion in Arkansas may hinge on
month."
In the 5th District, sandwiched
The fact that senators voted to
the local reverberations from the
There are two camps: 1
between Portland and Eugene,
keep their free airport parking
does not mean they operate with
Whitewater-Madison affair. re-
who emphasize training, CC
Democratic state Sen. Catherine
callous disr+ gard of public senti-
port Viveca Novak and Ellen
ing and placement and those
Webber will face Republican
ment, wrote USA Today colum-
Joan Pollock of the Wall Street
who say that getting work for 5
state Sen. Jim Bunn in the fall.
Journal.
million single mothers with no
Democrat Mike Kopetski is leav-
nist Joe Urschel.
Gov. Jim Guy Tucker is "hip
skills and little education is
ing the House after two terms.
"They understand how upset
deep in the affair," linked through
costly to be worth huge effort.
their constituents get when they
a series of deals to Clinton co-
"Getting off welfare and into a
The leaks
see a sign that says that con-
investor James McDougal and to
job-isn't an event," said one ex-
In an interview, George Steph-
gressmen, Supreme Court jus-
David Hale, a former municipal
pert. "It's a process."
tices and diplomats are entitled
anopoulos, senior White House
judge under suspicion in
to the best parking places at the
Whitewater-related matters.
adviser, lamented the internal
Laundering charges
airport." So the sign now reads:
speculation that leads to stories
Unless he is upset in Tuesday's
"Restricted Parking Author-
primary by state Sen. Steve
An indictment against former
about President Clinton's "per-
ized Users Only."
ceived indecisiveness":
Luelf, the GOP candidate will be
Missouri Treasurer Wendell Bai-
"What do you suppose they call
"What is really discouraging to
Sheffield Nelson, a longtime op-
ley was dismissed after the U.S.
the House bank now?" Mr. Ur-
a lot of us is the fact that
ponent of President Clinton and
Attorney's Office requested the
schel wondered.
move for procedural reasons.
these articles could not be writ-
an important early press source
on Whitewater.
Mr. Bailey, a former Missouri
ten if people here in the White
Reversal
With Mr. Tucker under a cloud
congressman who was treasurer
House, using the cover of being
from 1985 to 1993, was charged
anonymous sources, were not
In reacting to an increase in
with misusing the services of
helping them along, and some-
how make themselves look good
short-term interest rates by the
state workers and equipment
Federal Reserve, President Clin-
worth at least $5,000 in his u
Y
at the expense of the president."
ton seemed to some to change his
cessful 1992 gubernatorial bid.
mind and agree that controlling
In addition, the government
Justice
inflation is more important than
alleged he engaged in money
rapid growth.
laundering in 1992 by converting
At a conference at the Ronald
Reagan Presidential Library on
Economist David Jones: "The
political campaign funds to his
"Do Conservatives Have a Sense
view of the White House is 'the
personal use. Officials said the
of Humor?" Lyn Nofziger re-
sooner the better - if we can
investigation continues.
called that Herbert Hoover said
shave a little bit of growth off
of reporters, "Every president
maybe it will keep this recovery
The only choice
should be allowed to shoot two a
going until 1996' And with the
year, without explanation."
White House, 1996 rings a bell."
It wasn't easy, but Montana
Gov. Marc Racicot delivered his
Kennedy overture
commencement address as DI
'Sick culture'
ised. And the graduating
The health care proposal Sen.
President Clinton got support
appreciated all he went through
Edward M. Kennedy unveiled last
from an unusual source yester-
to get there - all one of
week seemed to signal to Repub-
day in his defense against a sex-
"I just wanted someone special
licans and moderate Democrats
ual harassment lawsuit: the
to come to my graduation," 14-
that "the old war horse of the
normally combative and partisan
year-old Cory Rieber, an eighth-
left" is willing to negotiate, the
House minority leader, Newt
grader at the Reichle School in
Los Angeles Times reported.
Gingrich of Georgia.
Glen, told the Associated Press.
Few takers, though. "I thought
Although the harassment
"He was pretty much my
it would have come closer to the
charges by former Arkansas
choice."
bipartisan middle. It's got an aw-
ful lot of regulation in it," said
state employee Paula Jones are
Bad weather forced Mr.
Sen. Dave Durenberger, Minne-
"serious and should be litigated,"
Racicot to make the 100-mile trip
from Helena by car instead of
sota Republican and moderate
Mr. Gingrich said that the Amer-
GOP bellwether.
ican public and media pay too
plane. The last stretch
him
much attention to such matters,
over a muddy country
to the
Mr. Kennedy told the Times'
Scott Shepard of Cox News Ser-
tiny ranching community in
Karen Tumulty that he is not con-
cerned: "There's always a tight-
vice reports.
southwestern Montana.
ening up of emotion and feeling
"I think we have gone way
About 60 people and all 17
as you come closer to the time of
overboard as a society in, on the
students at the two-room school
- turned out. The school
decision-making. But eventually
children in kindergarten through
the process moves forward."
eighth grade. The message?
He cautioned against reading
"We're all in this together," the
too much into what happens in
governor told the 14-year-old.
committee: "This has been a long
process toward the ultimate
resolution, which I think will be
on the Senate floor sometime in
the date spring or early summer.
120
te the defining
Whitewater counsel:
Delay staff interviews
By Judy Keen
USA TODAY
Independent counsel
Whitewater special counsel Robert
Fiske has asked the White House not to
bill before Congress
begin staff interviews to prepare for con-
gressional hearings on the probe until he
House-Senate negotiators have
gives permission.
agreed on legislation to revive the
Fiske wouldn't comment Wednesday
law permitting Independent counsels
THURSDAY, MAY 19, 1994 USA TODAY
on why be wants the interviews delayed.
to Investigate top public officials.
However, Fiske is allowing the admin-
A provision was added to make
istration to review Treasury Department
Whitewater special counsel Robert
papers related to contacts between
Fishe, now a Justice Department em-
White House and Treasury aides about
playee, a court-appoiated Indepen-
the Whitewater affair.
dent counsel if it's determined that's
Since issuing a broad new subpoena
necessary when the law takes effect.
May 5 for papers found in Vincent Fos-
Both houses of Congress must still
enforcement investigations and the
ter's office after his suicide, Fiske has
approve the bill.
Treasury-White House contacts. Clinton
been interviewing White House officials
The ЫЙ imposes new controls on
aides believe the "contacts" report will
about events in the late deputy counsel's
the counsels, such as restrictions on
be finished in perhaps a month.
office after his death.
staff, travel and office expenses. And
Once Fiske's reports are released,
White House deputy counsel Joel
It allows independent counsels to in-
Democratic congressional leaders say
Klein says transfer of the Foster papers
vestigate members of Congress, If the
they'll schedule hearings.
sought by Fiske in the May 5 subpoena
attorney general decides It would be
"We're starting to prepare," says
was completed Wednesday.
in the public interest.
Klein.
On May 12, counsel Lloyd Cutler's of-
The White House is assembling a
fice sent a memo to White House staff
chronology, reviewing documents and
seeking documents that were in Foster's
yers to ensure they're not destroyed.
hoping Congress - and the public -
office and papers "received from or sent
Foster's pager, also sought in the sub-
will be distracted by health-care reform
to Foster relating to Whitewater" and
poena, had already been assigned to an-
or other issues when hearings begin.
Madison Guaranty Savings & Loan.
other White House worker.
Meanwhile, Clinton aides say internal
Several inches of documents were
Aldes to President Clinton believe
worries over Whitewater, which built to
found and sent to Fiske.
Fiske's probe of Foster's death is fin-
a frenzy in March when eight testified
Fiske's subpoena also requested com-
ished and concludes It was suicide. That
before a grand jury, have eased.
puter disks from Foster's office, but the
report is expected in two or three weeks.
White House aides now believe no
special counsel has told the White House
The current focus of Fiske's work: the
will be indicted and public Interest in the
he doesn't need them at this time.
handling of Foster's papers, whether
Clintons' financial past and Foster's
He has instructed White House law-
White House aides tried to impede law
death has peaked and won't erupt again.
ELSEWHERE IN THE WORLD
IN WASHINGTON
A military vote of loyalty
Next stop for Haitians
from S. African whites
may be British islands
South Africa's white military chiefs offered an effec-
President Clinton has asked Britain for help in estab-
tive "no coup" pledge on Wednesday to their new black
lishing a center in the Caribbean to process Haitian refu-
political masters, the African National Congress, in a
gees trying to reach the USA, U.S. officials say.
public declaration of loyalty. It was the most striking sign
Clinton has his eye on a center in the Turks and Caicos
yet that the old apartheid state's war machine is under
islands, a British colony. The Turks and Caicos are a
the command of its former black enemies.
chain of about 30 islands near the southeast end of the
Gen. Georg Meiring, who made the pledge, heads the
Bahamas. Only six of the larger islands are inhabited.
renamed South African National Defense Force, which
The processing center would allow U.S. authorities to
is integrating ex-guerrillas into its 70,000-strong force.
interview Haitian refugees to determine whether they
Meanwhile, an ambitious ANC health plan released
qualified for political asylum.
Wednesday would allow abortion on demand and pro-
vide free medical care to children. The plan addresses
NUCLEAR FEARS: Nuclear
campaign promises made by President Nelson Mandela
fuel dumped in rusting Russian
during the nation's first all-race election.
submarines could spell trouble
for the far north, Norwegian
RWANDA STANDOFF: Rwandan rebels dismissed
Prime Minister Harlem Gro
the United Nations as incompetent and said they would
Brundtland said in a speech
capture the capital Kigali before the world body can
during a visit to Washington.
send 5,500 troops to provide relief and stop mass killings.
She said the Kola peninsula,
Russian territory just east of
EX-GI KILLED: A decorated U.S. Army veteran who
Norway, is the base for the
settled in Germany was shot dead on an overnight train
world's largest nuclear-
in a robbery - a grim mirror image of the gunshot
powered fleet, including about
Reuters
death earlier this week of a German woman in Califor-
100 operational and 60 retired
BRUNDTLAND:
nia's San Jacinto Mountains. Police in Bremen, Germa-
submarines. She sees a big eco-
Rusting subs trouble
ny, say William Bledsoe, 46, a former Army chief war-
logical threat. "Russian naval
rant officer, who worked for the U.S. military hospital
commanders have voiced fears that decommissioned
system, was shot aboard the Stuttgart-Hamburg train.
subs which are in poor condition and manned by unmoti-
BOSNIA IMPATIENCE: Serbs ended a six-week
vated crews may sink at dockside and cause an ecologi-
cal
disaster.
The situation is alarming."
standoff with France by freeing 11 French relief work-
ers, as major powers showing increasing impatience
JONES
SUIT:
The White House asked the Justice De-
with the slow progress toward peace in Bosnia-Herzego-
partment to do research whether a president can be
vina, now entering its third year of civil war.
sued for acts committed before taking office, a move
ALSO
that could bear on the sexual harassment lawsuit filed
Canadian officials seized 26.5 tons of hash-
against President Clinton by former Arkansas state em-
ish street value $261 million - aboard a freighter ar-
ployee Paula Corbin Jones. The White House paints it as
riving in Montreal from South Africa. No arrests were
a move to protect any chief executive. "There are insti-
made. Independent election monitors cast doubt on
tutional implications for this," says press secretary Dee
the legitimacy of President Joaquin Balaguer's election
Dee Myers. "Certainly this will affect not just this presi-
victory in the Dominican Republic because of wide-
dent but future presidents."
spread problems distributing ballots and counting votes.
Italian Premier Silvio Berlusconi's conservative co-
EXCUSED: Hillary Rodham Clinton has been excused
alition overcame concern about neo-fascist influences to
from jury duty in Pulaski County, Ark. She told Judge
squeak through a Senate vote of confidence.
John Langston she was living out of state.
83
Letters to the Editor
The New War on Drugs
As a former police officer who walked
zone to source countries.
the beat and ran three major police de-
Clearly, the effectiveness of drug pol-
partments, I have witnessed firsthand the
icy is enhanced by greater expenditures.
pain. despair and lawlessness surround-
More important, it is enhanced by link-
ing the drug trade. It is in sadness rather
ing it to other domestic policies. For
than in anger that I elaborate on the re-
years, national leaders have character-
cent criticism in editorials and editorial-
ized drug use as a serious problem that
page articles.
requires long-term, dedicated efforts to
You have observed that drugs are the
overcome. The Clinton administration is
source of many of our nation's crime,
the first to address it in this manner. Ef-
health and welfare problems, and that the
fective, continuing control of substance
degree to which drugs fuel these social ills
abuse will be possible only if homeless-
is a matter of moral import. As the na-
ness, joblessness and other sources of so-
tion's drug director, I couldn't agree
cial distress are addressed.
more. That is why the 1994 National Drug
Your continuing criticism of adminis-
Control Strategy builds its foundation on
tration policies is not unexpected. What
four elements: 1) we must reduce de-
was unexpected was the gratuitous and er-
mand, especially chronic, hardcore drug
roneous partisan statement (Review &
use; 2) we must reduce drug-related vio-
Outlook, May 3) regarding drug use by our
lence; 3) we must support community-
young people. You told your readers that
based programs; and 4) we must provide
drug use by 8th, 10th, and 12th graders had
international leadership. In the past, our
been in a steady, 10-year decline until 1993,
efforts failed to address adequately
and then risen. The obvious inference is
THE WALL STREET JOURNAL THURSDAY. MAY 19, 1994
chronic, hardcore drug use-the major
that the previous administrations had ef-
source of the crime, health and welfare
fectively reduced drug use and that this
problems. Unfortunately, while the "Just
administration was failing to do so from
Say No" and "Zero Tolerance" cam-
the beginning. The truth, of course, is that
paigns affected casual drug use, they did
use of some drugs by this group was rising
nothing about hard-core drug use.
in the 1991-92 school year and continued to
The president's 1994 National Drug
do so in the 1992-93 school year. This was
Control Strategy incorporates the largest
well before when we took office.
budget commitment to drug policy in the
As someone who has dedicated his life
history of this office-$12.2 billion, at a
to public safety, I have never sought po-
time of austere budgets with many agen-
litical gain from the crime and drug is-
cies experiencing cuts. In fact, the drug
sue. This administration has taken the
budget requests $1 billion more in fiscal
same tact, and the reason is simple: our
1995, mostly for demand reduction pro-
children are using drugs. This is not a
grams. Consider the facts. For the first
partisan matter. But it is one that calls
time:
for bipartisan action.
The drug office is accorded cabinet-
LEE P. BROWN
level status and as such plays a more ac-
Director
tive and substantive role in formulating
Office of National Drug Control Policy
drug policy and coordinating antidrug ef-
Washington
forts than in previous administrations.
The drug office is not staffed with
scores of political appointees, being so
The Silent Minority
honored for political services rendered.
The drug control budget is in line with
To develop Whitewater or for that
in Kuwait and later by covering up her
real drug control program needs, with re-
matter any other issue, Republicans
employment at a disreputable PR firm.
sources devoted to demand reduction ex-
will have to start showing more
ceeding 40% of the total federal drug con-
But when committee Chairman
trol budget.
spunk than they did on the Senate
Fritz Hollings asked if anyone ob-
The problems of hard-core drug use
Commerce Committee Tuesday. The
jected to her nomination, there was
are recognized and a major treatment ef-
committee was considering the nom-
only silence. Committee Republicans
fort is proposed to address the needs of an
ination of Lauri Fitz-Pegado as di-
who stood silent included Trent Lott
additional 140,000 chronic, hard-core drug
rector general of the U.S. Foreign
(the GOP's designated point man on
users.
and Commercial Service. Far from a
nominations), Jack Danforth, Bob
Drug policy is viewed as an integral
trivial post, the job of directing
Packwood, Slade Gorton, Kay Bailey
part of domestic policy. linked to health
American commercial efforts abroad
care, welfare reform and economic re-
Hutchison, Ted Stevens. Senators
form.
has the potential to turn the Com-
Conrad Burns, John McCain and
Efforts to secure permanent success
merce and State Departments into a
Larry Pressler didn't even show up.
against casual use are under way through
big ADFA, the business develop-
Whether because the nomination was
a coordinated, nationwide prevention ef-
ment/political fund-raising operation
"too sensitive" or Republicans feared
fort.
Mr. Clinton used SO successfully in
wheeler/dealer issues of their own or
Action supplants rhetoric in how we
Arkansas.
whatever, Mrs. Fitz-Pegado's nomina-
work with communities in the drug-control
efforts-community policing, the Empow-
As we've previously noted, Mrs.
tion sailed through on an unrecorded
erment Program and National Service are
Fitz-Pegado has stonewalled inquiries
voice vote.
just a few of the major efforts underway to
about potential conflicts of interest
So Senate Republicans have made
enable and empower neighborhoods to
with her husband's business dealings
themselves silent partners in the
deal with the multifaceted nature of the
("Who Is Lauri Fitz-Pegado?" May
ethics of the Ron Brown no-disclosure
drug problem.
13). She also has a long record of de-
crew at Commerce. To avoid that, Re-
The strategy promotes programs
ceiving Congress, first by engineering
publicans need at least to ask enough
that work and rejects those that don't-
phony testimony about Iraqi atrocities
questions to make a public record.
consider for example the controlled shift
of supply reduction program emphasis
from the random patrols in the transit
SL
Coverup Henry is aided and abet-
A14
ted on the Senate side by Majority
Leader George Mitchell. Two months
ago, the Senate piously voted 98-0 to
REVIEW & OUTLOOK
hold hearings on Whitewater, but
none have been scheduled. Sen.
Mitchell is the master of stalling tac-
The Congressional Coverup
tics, and negotiations for a hearings
mechanism have bogged down. In par-
In U.S. v. Nixon, the landmark Wa-
Clinton friend, ultimately recused her-
ticular, he has insisted that any in-
tergate case, a unanimous Supreme
self from Whitewater matters, why
quiry focus narrowly on banking com-
Court ruled that the President does not
didn't she do so initially before she
mittee matters, though the list above
participated in refusing the referral?
shows that the most serious questions
have blanket power to withhold perti-
nent information from the courts and
(6) Who in Justice made the un-
concern the Department of Justice.
precedented decision to fire all sitting
The issue here is whether the Con-
Congress. Brushing aside the argu-
ment that this was purely a political
U.S. Attorneys, which facilitated Ms.
gressional majority can simply disen-
dispute, Chief Justice Burger cited
Casey's appointment, and why?
franchise the minority. If the majority
Marbury v. Madison in writing, "We
(7) Why was Ms. Lewis removed
fails to raise pertinent questions about
therefore reaffirm that it is 'emphati-
from the case 10 days after her letter
an administration led by its own
cally the province and the duty' of this
to Ms. Casey? Who made this deci-
party, can the minority be prevented
court 'to say what the law is' with re-
sion?
from raising them in an informed and
spect to the claim of privilege pre-
effective way? It will also be the issue
(8) What instructions was FDIC at-
sented in this case."
before Judge Richey and eventually,
torney April Breslaw given before her
The courts will have another op-
we assume, appellate judges. They
Feb. 2 interview with Ms. Lewis, and
will have to decide about whether to
portunity to revisit the coverup issue
by whom? How was Ms. Breslaw cho-
intervene, as the Burger Court did in
in Leach v. RTC, now before Judge
sen for this task?
Charles Richey in Federal District
Watergate, or simply say the minor-
(9) Is it true that Ms. Breslaw was
Court in Washington. Rep. Jim Leach,
ity's redress is with the voters.
instrumental in hiring the Rose Law
ranking minority member of the
Rep. Leach himself said after re-
Firm for the Madison case in 1989, de-
House Banking Committee, has sued
turn from recess that Whitewater de-
spite objections by other government
the Resolution Trust Corp. and Office
serves a respite. And Republicans
attorneys, and how does she presently
of Thrift Supervision for release of
have been largely silent as the news
regard that decision?
documents on the handling of Madison
columns were filled with Paula Jones
(9) Ms. Breslaw has "categorically
Guaranty, the Whitewater S&L. Regu-
and $100,000 commodity trading prof-
denied" she said anyone in Washing-
lators at those agencies have denied
its from 1979. The commodity trades
ton favored any particular findings,
him these docu-
deserve their own investigation, since
and dismissed Ms. Lewis's account as
ments, at the be-
unexamined records still exist at the
a "complete fabrication." Rep. Leach
hest, presumably
Chicago Merc. But the Madison refer-
says Ms. Lewis's account is supported
ral is not about sexual titillation or
among others, of
by tape recordings. What is the truth?
House Banking
decades-old records; it is about the ad-
(10) What instructions were given
Chairman Henry
ministration of justice by the Clinton
to RTC Kansas City investigators
Gonzalez.
Presidency in the
about interviews with Robert Fiske's
here and now. It is
To get some idea
investigators? What are the implica-
entirely appropri-
of what the thrift
tions of Ms. Lewis seeking the protec-
ate that Rep. Leach
regulators and the
tions of whistleblower status?
asks for the help of
Clinton Adminis-
With all this on the table, the RTC
the courts in the re-
tration have to
Henry Gonzalez
stonewall can only be described as
sponsibilities he
hide, study the ac-
companying documents, first released
outrageous. Requests for similar doc-
was elected to dis-
uments by the Congressional minority
charge.
back in the midst of the torrent of pub-
were honored in the investigations of
At least as im-
licity over Rep. Leach's pre-recess
floor speech and President Clinton's
Columbia Savings & Loan, Lincoln
portant, though,
press conference. The handling of the
Savings & Loan, Silverado Savings &
the time is rapidly
Loan and Centrust Savings & Loan.
George Mitchell
Madison referral has political finger-
coming when the
prints all over it; the only question is
Criminal investigations proceeded
Republicans have a responsibility to
precisely whose. The documents con-
concurrently in all these cases. A pres-
make Madison and Whitewater an
stitute a prima facie case demanding
idential directive instructs depart-
election issue, asking whether the vot-
a serious Congressional inquiry into
ments and agencies to provide infor-
ers want to return a majority that has
such questions as:
mation to Congress upon request un-
had complicity in a coverup. Senator
less the President himself invokes ex-
(1) Was Charles Banks, U.S. Attor-
Malcolm Wallop took to the floor Tues-
ecutive privilege, which in
day to issue the first complaint, quot-
ney in Little Rock under the Bush Ad-
Whitewater would be a burlesque. Yet
ing New York Times Executive Editor
ministration, correct in referring
in the Madison case the regulators
Max Frankel about "a massive block-
Case #C0004 to main Justice in Wash-
plead the need for privacy and trade
ade" of the facts.
ington?
secrets.
(2) Who reviewed the case there?
Rep. Gonzalez and Senator
And of course, Congress is not
Mitchell are making themselves part
(3) Is it accurate, as Justice's
fighting the coverup but leading it.
of the Whitewater scandal by promot-
Donna Henneman told the RTC's Jean
The point man is Chairman Gonzalez.
ing a Congressional coverup. This is
Lewis, that all referrals with "political
He canceled the Whitewater hearings
the same Congress that huffed and
ramifications" go to the Attorney Gen-
he once promised. He's also canceled
puffed over other failed thrifts, not to
eral? What kind of justice is this?
oversight hearings on RTC reports,
mention the fiction of the "October
(4) Is Paula Casey, current U.S.
which are required by law. And he has
Surprise." The Democratic adminis-
Attorney in Little Rock, correct in
written the RTC and the OTS explic-
tration, its appointees at the RTC and
suggesting that someone else made
itly instructing these executive branch
its Congressional allies are circling
the decision to decline the referral? If
agencies not to cooperate with other
the wagons to prevent embarrassing
so, who takes responsibility for the
members of Congress.
disclosures. Now that the Congres-
decision?
sional Democrats have a Democratic
(5) Since Ms. Casey, a longtime
President, they don't want oversight,
they want a stonewall.
THE WALL STREET JOURNAL THURSDAY. MAY 19. 1994
74
Republicans turn up the heat
to speed Whitewater hearings
By Jerry Seper
THE WASHINGTON TIMES
Al
House Minority Leader Rob-
ert H. Michel, noting that con-
siderable amount of time" had
Republicans yesterday
passed since a March 22 res-
sought to ensure that congres-
olution calling for the hearings
sional hearings on Whitewater-
to begin, asked House Speaker
Madison begin soon, as special
Thomas S. Foley to call for plan-
counsel Robert B. Fiske Jr.
ning sessions to get under way.
neared the end of the first phase
"According to the resolution,
of his investigation into the af-
fair linked to President Clinton.
see HEARINGS, page A13
HEARINGS
crat, told reporters Tuesday that
sponse to requests by the White
Whitewater-Madison hearings will
House for permission to review
be "considered" once Mr. Fiske in-
Treasury Department documents
From page Al
dicates that the first phase of his
relating to some aspects of the
we are to meet to determine the
investigation has been fully com-
Whitewater-Madison probe.
appropriate timetable, proce-
pleted and will begin "when we are
Those documents, which the
dures and forum for appropriate
ready."
White House said it wants so it can
congressional oversight, including
"We have a resolution that calls
prepare for the hearings, describe
hearings," Mr. Michel said in a let-
for [hearings] when it is also con-
meetings between Treasury De-
ter. "As you know, no such meeting
sistent with Mr. Fiske's investiga-
partment officers, including Dep-
has taken place, despite my re-
tion," he said. "That is the condi-
uty Treasury Secretary Roger C.
quests that one be held as soon as
tion that the House resolution
Altman, and Clinton administra-
possible."
imposed upon the hearings, so
tion officials over the Resolution
The Illinois Republican said
when Mr. Fiske indicates that his
Trust Corp. (RTC) investigation of
several House committees have
investigation is over, or that phase,
Madison Guaranty Savings and
the "jurisdictional basis" to con-
we will consider the scheduling of
Loan Association.
duct Whitewater-Madison hear-
hearings."
The RTC, a Treasury Depart-
ings and "can clearly begin work-
The speaker said no decisions
ment agency, had forwarded to the
ing on compiling the relevant
had been made about the focus of
Justice Department nine criminal
background material" to conduct
the hearings, "but I assume we
referrals in the Madison case, sug-
them.
would look into the matters that
gesting possible financial impro-
"This work has not been done,
relate to that portion of Mr. Fiske's
prieties involving Madison, its
nor have you given me any sign
investigation that had to do with"
owner, James B. McDougal, Mr.
when or if appropriate investiga-
possible improper contacts be-
Clinton and first lady Hillary Rod-
tions and public hearings are to be
tween the Treasury Department
ham Clinton.
held," Mr. Michel said. "I'm com-
and the White House over the
The RTC-White House contacts
pelled to renew my request to
Whitewater-Madison probe.
were described by Mr. Altman as
know when, if ever, the majority
Mr. Foley said scheduling for
a "heads-up."
plans to investigate and report to
any hearings would be the respon-
Madison failed in 1989 at a cost
the American people exactly what
sibility of the committees in-
to taxpayers of $50 million. Mr.
took place during the Whitewater
volved.
McDougal, his wife, Susan, and the
affair."
Clintons were partners in White-
Senate Minority Leader Bob
Whitewater-Madison hearings
water Development Corp., a north-
Dole also has begun a push for
have been approved by both the
ern Arkansas real estate venture
hearings, saying he does not in-
House and the Senate. They were
that also eventually failed.
tend to wait indefinitely for them
to begin after the leadership deter-
to begin. But the Kansas Repub-
mined they would not jeopardize
Madison and Mr. McDougal are
lican, after a meeting this week
the ongoing Fiske inquiry.
the major focus of the Fiske in-
with Senate Majority Leader
On Monday, Mr. Fiske said he
quiry.
George Mitchell of Maine, said he
was nearing the end of the first
Mr. Fiske said the release to the
was hopeful hearing details could
phase of his investigation, al-
White House of the Treasury De-
be worked out soon.
though it had not yet been com-
partment documents at this point
Mr. Foley, Washington Demo-
pleted. His comments were in re-
of the first phase of his investiga-
tion - which includes a look into
the RTC-White House contacts -
would not interfere with his in-
quiry.
It was not certain yesterday
whether Republicans, also looking
to prepare for the hearings, would
have access to the same doc-
uments. A Treasury Department
spokeswoman said the depart-
ment had not received any re-
quests from Republicans in the
House or the Senate for the rec-
ords. She said if one is made, it will
be reviewed by department law-
yers.
Mr. Michel's office said the con-
gressman was not sure which
Treasury Department records
would be available or who would
get them. "It's something we're
looking at now," a spokeswoman
said.
The documents are separate
from those being sought by Rep.
The Mashington TimesTHURSDAY, MAY 19, 1994
Jim Leach, ranking GOP member
of the House Banking Committee.
The Iowa Republican, a leading
proponent of Whitewater-Madison
hearings, has sued the RTC and
the Office of Thrift Supervison,
which oversees the RTC, for the
release of records in the govern-
ment's Whitewater-Madison inves-
tigation.
"We will request them," Mr.
Leach said yesterday. "We think
the case would appear to be com-
pelling that we should be provided
the same documents for the same
reasons. Do I expect to get them?
That will be up to the government."
107
Case #C0004: Nothing to InvestigateV
added that the referral had been submitted
that are relative to the conclusion of this
In an editorial nearby, we discuss the
to that office "because of the political ram-
matter, I would appreciate receiving the
lawsuit by Rep. Jim Leach (R., Iowa) to ob-
ifications and political motivations", and
appropriate copies.
tain documents from regulators on Madison
then told me that referrals were not prose-
Very truly yours,
Guaranty, the Arkansas savings and loan
cuted out of that office. She then stated
L. JEAN LEWIS
with connections to the Clinton Whitewater
that the referral had been declined. I ad-
Senior Criminal Investigator
affair.
vised her that the referral had not been de-
cc: Debra Westbrook /Office of Legal
The following are documentary materials
clined, and read her the letter sent to this
Counsel
released by Rep. Leach on March 24. in con-
office by U.S. Attorney Richard Pence. She
L. Richard Iorio /Field Investigations
junction with his speech on the House floor.
acknowledged that she was confused. and
Officer/KCO
Under Chairman Henry Gonzalez, the House
told me she would speak with her supervi-
Lee Ausen /Supervisory Investigator-
Banking Committee has refused to investi-
sor, Deborah Westbrook. and have her call
/KCO
gate the matter; Chairman Gonzalez has
me back tomorrow. I then asked for Ms.
* * *
also written the regulators advising them to
Henneman's title. and she informed me
An RTC e-mail message by Ms. Lewis,
deny Rep. Leach the information and fur-
that she was the Ethics Program Manager.
Nov. 10, 1993:
ther documents he has requested.
I thanked her and ended the conversation.
According to the chronology prepared by
I'll keep you posted if and when I hear
Hey you! Just a heads up to let you know
investigators in the Kansas City office of the
from Ms. Westbrook.
that Mike Caron, Senior Criminal Investi-
Resolution Trust Corp., Criminal Referral
gator, is now the lead investigator on Madi-
Number C0004, concerning Madison Guar-
son
so anymore faxes you send
anty Savings & Loan, was forwarded to
A letter from Paula J. Casey, U.S. At-
should come to Mike's attention,
Charles A. Banks, U.S. attorney in Little
torney in Little Rock, to Ms. Lewis, Oct. 27,
and any further communication
Rock, and Steve Irons, head of the local FBI
1993:
about Madison should go to him,
office, on Sept. 2, 1992.
Re: #7236 Madison Guaranty Savings
too. The Powers That Be have de-
No acknowledgment had been received
and Loan
cided that I'm better off out of the
by November of that year, so RTC Kansas
Criminal Referral Number C0004
line of fire (and I ain't arguing), but please
City investigators began a series of verbal
let me assure you, that we are leaving you
inquiries. On Jan. 4. 1993, a letter from Don
Dear Ms. Lewis:
in very capable hands! Got any questions
K. Pettus of the FBI said the referral had-
I am writing at the request of the Office
beyond that, ask Lee or Richard.
been received, and directed inquiries to As-
of Legal Counsel, Executive Office for U.S.
THE WALL STREET JOURNAL THURSDAY, MAY 19, 1994
sistant U.S. Attorney Floyd Mac Dodson. On
Attorneys of the U.S. Department of Jus-
tice to let you know the status of this re-
A Nov. 15, 1993, RTC e-mail
May 4, investigators sent a letter to Acting
ferral.
message by L. Richard Iorio of
U.S. Attorney Richard Pence, who re-
sponded that the referral had been sent in
As you know, this referral was re-
Kansas City investigations:
September to the Office of Legal Counsel at
viewed by the Criminal Division of the
On Thursday, November 11,
Justice in Washington.
U.S. Department of Justice at the request
1993, there was an article that ap-
of the previous United States Attorney for
the Eastern District of Arkansas. The mat-
peared in the Washington Post con-
An RTC e-mail message by L. Jean
cerning declination of prosecution
ter was concluded before I began working
on the first Madison referral that
Lewis, senior criminal investigator in the
in this office, and I was unaware that you
RTC Kansas City office, May 19, 1993:
had not been told until I was contacted by
was transmitted to the Department
In following up on the suggestion that
the Office of Legal Counsel. After receiv-
of Justice (DOJ) on August 31, 1992.
Contained in the article was informa-
Mr. Daniel Koffsky, Acting Assistant At-
ing the call from Legal Counsel I reviewed
tion that the referral had been reviewed by
torney General, be sent a copy of Madison
the referral, and I concur with the opinion
DOJ and that a decision had been made
referral #C0004, I contacted the Office of
of the Department attorneys that there is
insufficient information in the referral to
early on to decline on this referral and that
Legal Counsel to verify the correct address.
when Paula Casey US Attorney, Little
In speaking with Dyone Mitchell of that of-
sustain many of the allegations made by
Rock, Arkansas, in fact issued the decli-
fice, I reiterated the address provided by
the investigators or to warrant the initia-
tion of a criminal investigation.
nation in October 1993, she was simply
US Atty Richard Pence which reads:
bringing this matter to a close.
Office of Legal Counsel
Although I am declining to take further
Executive Office for the U.S. Attorneys
substantive action on this referral, my de-
The document attached clearly refutes
cision does not foreclose future prosecu-
this train of thought. In fact, it appears that
U.S. Justice Department
no thorough review of the document had
Washington, D.C. 20530
tions about the matters covered by the re-
ferral or related matters in the event that
been conducted as late as June 23, 1993,
The letter provided the phone number
some ten months after the referral had
(202) 514-2041.
my office and the FBI are given access to
been initially transmitted. It was not until
Ms. Mitchell advised that the Office of
records or information indicating that
September 29, 1993 that this office was ad-
Legal Counsel and the Executive Office
prosecutable cases can be made.
vised that the referral would be reviewed.
for the U.S. Attorney's were two separate
Sincerely,
PAULA J. CASEY
The whole issue might not be impor-
sections, and that the referral may have
United States Attorney
tant, however, for purposes of credibility
been forwarded to the Executive Office in-
stead of Legal Counsel. She then con-
cc: Debra [sic] Westbrook, Office of Le-
with regard to the RTC's efforts in this
area. this memo and attachment are sub-
gal Counsel
nected me with the operator, who put me
mitted for factual clarity.
through to the Executive Office where I
[The attachment is a chronology of the
spoke with Stephanie Kennedy. I ex-
A letter from Ms. Lewis to Ms. Casey,
RTC investigation and contacts with Jus-
plained to Ms. Kennedy what I was look-
Nov. 1. 1993:
tice, partially summarized above. It also
ing for. and she said she would get back
to me this afternoon.
I have received your October 27, 1993
summarizes the documents printed above
letter regarding the above captioned thrift
and concludes:]
She called me back at 3:30, and advised
and referral. On the basis of comments
On November 11, 1993, RTC Investiga-
that she had forwarded the matter on to
contained within your letter. I am inter-
tions learned through an article in the
Donna Henneman in "Legal Counsel",
preting that correspondence as a formal
Washington Post that Paula Casey had re-
who would check it out and call me back to-
declination to prosecute referral #C0004.
cused herself and her staff from any fur-
morrow. I then contacted Ms. Henneman
You stipulated in your letter that this mat-
ther dealing with the Madison referrals.
to offer background information on what I
was looking for. When I explained that it
ter was concluded prior to the beginning of
your tenure as the United States Attorney
was a referral out of Madison Guaranty.
Notes by Ms. Lewis on her conversation
for the Eastern District of Arkansas. Prior
forwarded to that office by Chuck Banks,
with FDIC attorney April Breslaw, Feb. 2.
to the receipt of your letter, RTC Investi-
she had immediate knowledge, stating
1994:
gations was not advised that the matter
"oh, the one involving the President and
had been formally concluded.
April stated that "the people at the
his wife." She then stated that the referral
Between September 1. 1992 and today's
top" keep getting asked about Whitewater,
had been sent to that office (exactly which
date. this office has received a total of three
which seems to have become a catch all
office is still unclear to me) as a special re-
letters with regard to the aforementioned
phrase for Madison and it's [sic] related
port for the attention of the Attorney Gen-
referral. including your letter of declina-
investigations. She said that eventually
eral, and not as a referral for prosecution.
tion. The other two letters were from
"this group" is going to have to make a
She then stated that "anytime a referral
FBI/SAC Don Pettus, 12/15/92, Richard
statement about whether or not Whitewa-
comes in that would make the department
Pence, 5/10/93. advising this office that he
ter caused a loss to Madison, but the fact
look bad, or has political ramifications, it
was unaware of the referral status as it had
that Whitewater had no loan at Madison
goes to the Attorney General." She further
been forwarded to the Executive Office for
provided less potential for a loss. April
United States Attorney's by former United
stated very clearly that Ryan and Kulka
112
States Attorney Chuck Banks.
[Jack Ryan, deputy chief executive of the
If there were other documents produced
RTC and head of the agency on this mat-
ter following the recusal of Roger Altman:
70
and Ellen Kulka, the agency's general
counsel], the "head people", would like to
I stated that if she wanted me to tell
be able to say that Whitewater did not
her, unequivocally, that Whitewater
cause a loss at Madison. but the problem is
didn't cause a loss, I could not do that. I
that so far no one has been able to say that
could only reiterate the allegations con-
to them. She felt like they wanted to be
tained in the referral, which are based
able to provide an "honest answer". but
on fact, and that it is my opinion and be-
that there were certain answers that they
lief that Whitewater did, in fact, cause a
would be "happier about, because it would
loss to Madison because of the amount of
get them off the hook."
the unauthorized loans that McDougal
April felt that it would have been dif-
made, through the check kite, to entities
ficult to determine exactly what happened
in which he was a primary party and
with the Whitewater account, because so
beneficiary. I also pointed out that this
many checks had gone in and out of the ac-
ultimately benefited his business part-
count, and made a reference to the end re-
ners-the same business partners that
sulting [sic] netting itself out. She asked
knew they had real estate ventures that
about Greg Young's work papers on the
were not cash flowing, but that also
Maple Creek Farms reserve for develop-
knew their mortgages and/or notes were
ment analysis, and how it didn't seem to
somehow being paid. I pointed out that
have any apparent tie to Whitewater. I
these business partners are intelligent
concurred that it didn't have any legiti-
mately defined tie, which is precisely why
I would not facilitate pro-
it was included in the referral.
She inquired about the $30,000 check
viding "the people at the
to Jim McDougal from Whitewater in 5/85,
top" with the "politically
and about the disposition of the funds, I ex-
plained the transaction as I know it: the
correct answers just to get
$30,000 had been converted to a MGS&L
cashier's check, which was subsequently
them off the hook."
endorsed by [blacked out in document]
THE WALL STREET JOURNAL THURSDAY, MAY 19, 1994
and deposited to Riggs National Bank. I
individuals, the majority of them being
explained that when the check was force
attorneys, who must have concluded that
paid, the Whitewater account was over-
McDougal was making the payments for
drawn by over $28,000 which was then sub-
their benefit. I posed the question to her,
sequently covered by the payment of a
if you know that your mortgages are be-
$30,000 bonus from MFC to Jim McDougal.
ing paid, but you aren't putting money
deposited directly to Whitewater on Mc-
into the venture, and you also know the
Dougal's orders.
venture isn't cash flowing, wouldn't you
She asked how we could get to a clear
question the source of the funds being
used to your benefit? Would you just as-
cut answer as to whether or not Whitewa-
ter caused a loss to Madison. I stated that,
sume that your partner was making
as far as I am concerned, there is a clear
these multi-thousand dollar payments out
cut loss. I also stated that any attempt to
of the goodness of his heart? Wouldn't
extract Whitewater as one entity from the
you wonder even more if you knew that
rest of the McDougal controlled entities in-
your business partner's main source of
volved in the alleged check kite will distort
income, an s&l, was in serious financial
the entire picture. I further pointed out
difficulty, which by 1985 was fairly com-
that I would produce the answers that were
mon knowledge?
We discussed the initiation of the MGSL
available, but that I would not facilitate
providing "the people at the top" with the
investigation, and how evidence of the
"politically correct answers just to get
check kite came to light. I explained that
them off the hook".
after reviewing a series of checks, all of
which noted "loan" in the memo field, I
She asked questions about the
discerned a pattern that looked like a
specifics of the checks going through the
check kite, and proceeded to trace funds
Whitewater account. I stated that it ap-
through the various accounts, which is a
peared that the majority of the checks
standard investigations procedures [sic].
written out of the Whitewater account dur-
The end result was the referral alleging a
ing the window time frame were going to
massive check kite. I also advised April
other financial institutions to make loan
that I had been told by both the U.S. At-
payments. I also said that the referral fo-
torney's office (Mac Dodson) and the FBI
cused only on a short time frame. but that
(Steve Irons) that this was a highly prose-
if that same research were conducted for a
cutable case of check kiting. I also told her
two year period, it was my belief that the
that I disputed the declination of that re-
losses to Madison from the Whitewater ac-
ferral on the basis of "insufficient infor-
count alone would easily exceed $100,000,
mation". She commented that "that's
given that $70,000 had gone out of the ac-
what Grand Juries are for", and I pointed
count during the six month window time
out that it generally seemed to be the pol-
frame. I further added that the end loss re-
icy of the U.S. Attorney to agree to open a
sult from the entire scam, using all 12 com-
case before they would start Grand Jury
panies/entities, would be hundreds of
proceedings. I also noted that I found the
thousands of dollars in what were essen-
treatment of that particular referral by the
tially unauthorized loans.
Justice Department to be highly unusual.
This concluded our discussion.
71
Wednesday, May 18, 1994
Six Balias Marning Netus
SA
Republicans plan to turn up heat on Whitewater affair
DALLAS MORNING NEWS
By Richard Whittle
Washington Bureeu of The Dallas Morning News
They allege Democrats are making no progress on plans to hold hearings
1984 campaign for governor of Ar
kansas
WASHINGTON - Republicans in
Mr. Clinton has denied )
Congress are working on a new
little bit more at making some notse
they are getting ready for hearings.
that the Senate would bold hear-
campaign to force the Democrats to
date is to investigate the failure of
edge of any such improprieties.
and reminding the American peo-
But Republicans in both cham-
hold hearings on the Whitewater
ings "in the near inture," so long as
Madison Guaranty Savings and
The Washington, Als of Mr
ple that there're a fair number of
bera complain that the Democrats
affair.
they did not interfere with Mr.
Loan Association of Arkansas,
Fiske's Investigation centers on the
unanswered questions out there."
who run Congress have shown no
Flake's investigation.
"Nothing is happening on the
which went under in 1989 at a cost
propriety of meetings last fall
Democrats in both chambers
inclination proceed with hear-
Democratic side, so Republicans are
But Rep. Jim Leach of lowa. the
of as much as $60 million to taxpay-
winter between officials at the
adopted resolutions earlier this
ings
senior Repablican on the House
era. Madison's owner was partners
White House and the Treasury De
planning to turn up the heat this
year binding them to negotiate with
The Democratic leadership in
with President and Mrs. Clinton in
parment, which overseas the RTC.
week a little bit In the Senate
Republicans to hold hearings on
the Senate) hoping for a Fiske
Banking Committee. expressed sim-
through a series of floor speeches
report that would be exculpatory
ilar doubts Tuesday.
Whitewater, a real estate deal that
Whitewater Development Corp., a
Mr. Leach said be wanted
and requests for hearings." Eric
went sour.
real estate venture to which Bill,
and shut the whole issue down."
lage so the public could bear th
Ueland, the Senate Republican Poli-
On Capital HIII, however, House
and Hillary Rodham Clinton invest-
Mr. Ueland said,
Speaker Tom Foley, D-Wash., said
An investigation of Madison by
witnesses such as the investigators,
cy Committee press secretary, said
ed In the 1980a.
Mr Fiske has promised an Inter-
who work in Kansas City, Mo.
that "when Mr. Fiske indicates that
Tuesday.
the federal Resolution Trust Corp.
In addition, White House offi-,
im report (on whether Whitewater-
his investigation is over, or that
an agency created to liquidate
"Let others tell their tales,". Mr.
"We've given about six weeks'
cials have asked special counsel
related meetings at the White
(initial) phase (is over), we will
failed thrift institutions, has led to
Leach seld, "And I, think the tale
worth of quiet a chance and noth-
Robert Fiske Jr.'s permission to col-
House were proper.
consider the scheduling of hear-
allegations that funds from the S&L
that would nawind would be a
ing's happened on the Democratic
lect certain documents from the
(Senate Majority Leader George
side, so now we're going to work a
ings."
flowed improperly to the White-
nating one. And not the and of the
DALLAS MORNING NEWS.49778019
Treasury Department, indicating
Mitchells and Tuesday
The special counsel's proad man-
water venture and to Mr. Clinton's
world
for
the
Advocates for home hail $1.7
billion aidgplan
By Kendall Anderson
homeless advocacy group runs the
horneless problem.
broader definition of homelessness
hand-in-hand with welfare and
like plan calls for
Staff Writer of The Dallas Morning News
nation's largest homeless shelter,
scale
of
to Include, patty evicted people
health care reform to "give every
"coutinum
would
The federal government's an-
"Finally we've got an, adminis
end others on of down
American the opportunity to break
from:
nonncement Tuesday of a massive
tration looking at the figures realis
and
the cycle of dependence."
cy
$1.7 billion plan to eliminate home-
tically, looking at the problem real.
FThe reportly linvelled Tues-
This is the first time the govern-
counsel
lessness means more than In-
latically," Mr. Mitchell said. "The
Ground:
housing
day Secretary
ment has addressed the homeless
only negative I can say about It La
the
creased funds and decreased red
neros, Health and/Human Services
problem In its entirety. said Jacquie
The
Dailey,
codired
past
Shelter
to
tape, say advocates for the home-
that It took so long to happen
figure
Secretary Vererans
Lawing, deputy assistant HUD sec-
of
less.
Besides committing an unproce
of
the
prob-
Affairs and
retary for homeless services.
dented level of money to help the
Tipper,Gore of Prest
"Homelessness is not just a hous
proo
The proposal to double funding
homeless, the plan would stream.
out
dent Al Gors
ing problem," Mr. Cisneros hald
on
for the Housing and Urban Develop-
line the HUD grant application PT&
which will be submit-
Tuesday, "but a condition that can
ment Department's homeless assis-
cess and the federal funding to
tedito the
result from poverty, sybstance
tance budget in 1995 signals a long.
cooperation.
government
abuse, a lack of affordable housing
awaited change in national priori-
Supporters of the Interagency
and nonproful agencies.
or the collapse of institutions that
ties, said Keith Mitchell, spokesman
Task Force on Homelessness
Clinton the plan
once cared for persons with mental
49778019
for Community for Creative Non-Vi-
said it also breaks new ground
Maination"
and physical disabilities."
contribut
olence. The Washington, D.C.,
the federal government's
work
address the root causes of
Leach continues to be outspoken
on the Whitewater investigation
there, the facts have not been ac-
By JANE NORMAN
knowledged, political responsibility
Or THE REGISTER'S WASHINGTON BUREAU
has not been accepted - therefore
how can I fold up the tent?"
Washington, D.C. - Remember
Leach said the press ought to be
Whitewater? Remember the hue and
"extremely cautious" in dealing with
cry just two months ago for congres-
allegations raised about critics of the
sional hearings to delve into Presi-
president. The May 23 edition of
dent Clinton's Arkansas finances?
Newsweek magazine includes an an
Rep. Jim Leach of Iowa, the presi-
ticle about Jean Lewis, an investiga-
dent's premier critic on the convolut-
tor for the Resolution Trust Corp. in
ed issue, certainly does. Leach last
Kansas City, Mo., upon whom Leach
week filed suit seeking related docu-
has relied as a source for his charges
ments from two government regula-
that Resolution Trust investigators
tory agencies and has pursued his
have been "gagged and coerced" as
own investigation, even as press and
they tried to probe Whitewater.
public interest in Whitewater ap-
Newsweek reported that Lewis,
peared to lessen in recent weeks.
40, is not a lawyer or accountant and
But at the same time, the moder-
"she has little experience in law en-
ate, low-key ranking Republican on
forcement of any sort." The maga-
the House Banking Committee ap-
zine quoted unnamed sources as say-
peared as uncomfortable as ever
ing Lewis "tended to be
with his leading role in the
Jim Leach
conspiracy-minded a zealous am-
Whitewater drama, as was illustrat-
Public "tired" of Whitewater
steur sleuth who sometimes made
ed at a breakfast here with reporters
'grand leaps' even when others felt
Tuesday
the evidence was thin."
hearings until at least the first por-
Leach defended Lewis. "The mo-
"Not The Largest Scandal"
tion of that investigation is over.
dus operandi of this particular
He said Whitewater "is not the
That may be nearing. The Wash-
White House is to attack and under-
largest scandal," particularly in
ington Post said Tuesday that Fiske
cut those who raise charges rather
comparison to those in other coun-
has told White House officials he is
than respond to those charges," he
tries.
close to the end of the first phase of
said.
But moments later he told report-
his investigation, opening the way
Leach said that "what's at issue
ers that a "multithousand-dollar
for the White House to prepare for
are the facts," and those facts are in-
conflict of interest" resulted in mil-
congressional hearings this summer.
cluded in documents Lewis has pro-
lions of dollars in losses for taxpay-
The public, Leach acknowledged,
vided Leach on the movement of
ers. Leach has said money from a
"is a little tired of the issue; enough
money between the failed thrift and
failed Arkansas thrift was trans-
is enough." But he said the problem
Whitewater, as well as notes on a
ferred to the Whitewater real-estate
lies with the White House. "The
taped conversation with a top Reso-
development, in which then-Gov
awkwardness is the candor isn't
lution Trust lawyer.
Clinton and his wife were partners.
Leach said there is unanimity
within the Republican Party that
congressional hearings on
Leach discloses finances
Whitewater are needed. But he
pointed out that he called a month
From THE REGISTER'S ASSIGNMENT HI
value be placed on members' assets.
ago for a "respite" on the debate
Washington, D.C. - Rep. Jim
Personal residences and spouses' in-
over hearings until special counsel
Leach of Iowa, his wife and children
comes are excluded. This report re-
Robert Fiske concludes his own
have assets ranging in value from
flects 1993 activities.
Whitewater investigation.
$4.9 million to more than $6 million,
Leach is the wealthie. Iowa con-
Close to the End
according to a financial disclosure
gressman, although he is not the only
report filed this week by Leach.
millionaire. He reported be and his
Leach said he has tried to show
The Davenport Republican also re-
family have more than $1 million in
deference to Fiske and not push for
ported that he took nine trips paid
assets in four entities: Adel Whole-
for by private organizations or insti-
salers, a family corporation; Foxley
tutions, including the Iowa Indepen-
Cattle; the Lois Hill Leac Trust and
dent Bankers and the Ohio Bankers
the James A. Leach Trus
Association. Leach in 1993 became
Paid travel accepted by Leach in-
the senior Republican on the House
cluded:
Banking Committee.
Perkamentarians for Global AC on train travel
Financial disclosure reports are
from Washington to New York ar 'avel from New
York to Washington. food prov 3-c. Jan. 9. U.S.
filed annually by members of Con-
Commission on improving the Che Inveness of the
grass, and require an estimated
United Nations travel from Len Angeles to Sar.
Francisco. food and lodging pro ided. Jan 30-
Feb. 2. Princeion Republican Cor evence found.
trip travel Washington to Princetc N.J., food and
lodging provided for Leach and Hative, Feb 25-
27 Twentieth Century Fund. " and Irap travel
Washington to Wilkermsburg Va. 100 and lodging
provided for Leach and relative April 24-25. lows
independent Bankers meeting. to rvel Cedar Rap-
ids to Lake Okoboji to Davenpor 1000 and kag.
The Des Moines Register
mg provided. July 16-17 Ohio Binkers Associa
tion. Columbus. Oneo. roundtrip 1 avel Devenport
to Cleveland food and lodging Dr. vided. Aug 24.
Rotary Club of Des Momes travel Cedar Rapids to
Des Momes to Washington, food and lodging pro-
vided. Sept. 1 2. Twentieth Century Fund. round.
trip travel Washington to New Yor food and lodge
ing provided. Oct 28-29 Ketter 8 Foundation,
roundtrip travel Washington to Da 100 Othe, lood
provided. Dec. 3
127
Taxpayers could foot Clinton's Whitewater-Madison bills
By Michael Hedges
THE WASHINGTON TIMES
Resurrected Independent Counsel Act has provision for legal expenses
of Whitewater-Madison required
an independent counsel. Again,
those following the law said that is
Taxpayers may pick up the tab
the tab may run hundreds of thou-
investigation."
counsel investigator if the Justice
curred except in defense of an in-
highly probable.
for President Clinton's White-
sands of dollars.
White House Counsel Lloyd Cut-
Department requested it and a
dependent counsel's probe.
At that point, a three-judge fed-
water-Madison legal bills under a
"It definitely raises the chance
ler said last night, "We have not
three-judge panel deemed that ap-
There is a difference of opinion
eral panel could choose anyone to
provision approved yesterday by
that down the road the president
been involved in that, it has been
propriate.
among legal experts as to whether
be the independent counsel. But
House-Senate conferees in the fi-
will petition to have his legal bills
handled by the Justice Depart-
The measure passed a House-
the change in the law would cover
experts said they would likely ap-
nal version of the resurrected In-
paid, which wouldn't happen oth-
ment, so I have to say no com-
Senate conference committee last
legal bills accrued from the time
point Mr. Fiske to avoid a lengthy
dependent Counsel Act.
erwise," said one congressional
ment."
night after being offered by the
of Mr. Fiske's appointment to the
disruption of a complicated probe.
The change, requested by the
staff member.
Carl Stern, spokesman for the
Senate conferees and accepted by
time the bill becomes law.
If that happened, and Mr. Fiske's
Justice Department, is designed to
Several White House staff mem-
Justice Department, said that as
the House members on a 4-3 vote.
Some people investigated by in-
probe did not ultimately lead to the
allow Whitewater-Madison special
bers also have hired lawyers to
far back as January Attorney Gen-
Mr. Fiske, who is probing Presi-
dependent counsels, including for-
indictment of Mr. Clinton, con-
counsel Robert B. Fiske Jr. to con-
represent them in Whitewater-
eral Janet Reno was concerned
dent Clinton and Hillary Rodham
mer Attorney General Edwin
gressional experts said the pres-
tinue his investigation but as a
related matters.
that her appointment of Mr. Fiske
Clinton's involvement in financial
Meese III, have had substantial le-
ident could then petition the court
judicially appointed independent
At least one member of Con-
as a regulatory special counsel
dealings between a failed Arkan-
gal bills reimbursed.
panel overseeing the provisions of
counsel.
gress, Rep. Henry J. Hyde, Illinois
would create problems if and
sas thrift and a real estate venture,
There is no such provision cov-
the independent counsel law to re-
Congressional staff members
Republican, is concerned about
when the independent counsel law
was appointed special counsel by
ering the legal expenses of those
imburse his legal fees.
familiar with the independent
the provision.
was passed.
Miss Reno on Jan. 20. The salaries
investigated by a special counsel
Mr. Clinton also has legal bills
counsel provision - which was
"If you carry it out to its logical
"[The Justice Department] felt
and expenses of Mr. Fiske and his
appointed by the attorney general.
defending himself against a sexual
not in either the Senate or House
consequences, you'd have to say
there needed to be a mechanism in
staff are paid by the Justice De-
For the president to benefit,
misconduct suit brought by for-
bills originally passed - said it
this is a proposal that hands a huge
place to allow for stability in Mr.
partment - and are expected to
congressional experts said, sev-
mer Arkansas state employee
could also end up benefiting all of
bill for Mr. Clinton's legal fees to
Fiske's investigation," he said.
cost taxpayers $2 million through
eral things would have to happen.
Paula Corbin Jones. These ex-
those in the White House now un-
the taxpayer," Mr. Hyde said. "I
That mechanism, designed by
September and the probe is ex-
First, the law would have to pass
penses would not be covered un-
der scrutiny, including aides.
can't believe an administration
staff members of Sen. Carl Levin,
pected to continue through 1995.
both houses of Congress with the
der the new law.
It would allow Mr. Clinton, if not
with concern for the taxpayer
Michigan Democrat, and Justice
The independent counsel law
added provision. Congressional
The independent counsel reau-
indicted, to use taxpayer funds to
would want them to pick up a big
Department legislative affairs
has a provision that allows those
experts called that likely yester-
thorization bill expired in De-
defend himself against charges
bill because Mr. Clinton's activ-
staff members, would permit Mr.
investigated but not indicted
day.
cember 1992. Under the law, the
arising from Whitewater-Madi-
ities in Arkansas and perhaps
Fiske to transition from a reg-
to seek reimbursement of legal
Then, Miss Reno would have to
independent counsel office has to
son. Some experts have suggested
afterward are now subject of an
ulatory to a statutory independent
bills that would not have been in-
determine that the circumstances
be reauthorized every five years.
The Washington MAY 18, 1994
Cardinal
pressures
Leach:
Clinton
on Elders
RTC
By Larry Witham
may fire
THE WASHINGTON TIMES
A Roman Catholic cardinal has
written President Clinton a second
letter to ask that he "disavow" Sur-
prober
geon General Joycelyn Elders'
public support of homosexual sex
and her criticism of certain reli-
By Ann McFeatters
gious groups.
SCRIPPS HOWARD NEWS SERVICE
"Once again I respectfully urge
you to disavow publicly the views
Rep. Jim Leach, Republican
and legally is a "pretty powerful
expressed by your Surgeon Gen-
point man on the Whitewater-
case."
eral," Cardinal James A. Hickey,
Madison affair, says he fears the
But he stressed that that does
archbishop of Washington, wrote
government's chief investigator is
not necessarily mean there is any
Monday to Mr. Clinton.
about to lose her job.
evidence that the Clintons had im-
"Dr. Elders, as a federal official,
Mr. Leach, ranking GOP mem-
proper dealings with Madison.
continues to advocate a re-defin-
ber on the House Banking Com-
The Clintons say they lost money;
ition of the family," Cardinal
mittee, said yesterday he is con-
Mr. Leach thinks they benefited
Hickey wrote. "All Americans
cerned that the contract of Jean
from the investment.
have a right to know whether or
Lewis may not be renewed when it
Despite Mr. Fiske's probe, Mr.
not Dr. Elders is speaking for your
comes up in June.
Leach wants hearings in Con-
administration."
Mrs. Lewis works for the Res-
gress. Whether they are held and
The president was sent the first
olution Trust Corp. (RTC) in Kan-
when, he said, is up to Democrats,
letter in late March, but in his re-
sas City, Mo., and has been investi-
who control both the House and
ply, 1½ months later, he did not
gating the failed Madison
Senate.
address Dr. Elders' specific re-
Guaranty Savings and Loan Asso-
Mr. Leach agreed the public is
marks or his views about them,
ciation in Little Rock and its con-
losing interest in Whitewater but
according to a copy of the letter.
nection to the Clintons' White-
insists taxpayers should know if
In a March interview with the
water real estate venture.
there were any ethical or criminal
Advocate, a magazine for homo-
Whitewater-Madison special
violations. But he said there is no
sexuals, Dr. Elders said sex is a
counsel Robert B. Fiske Jr. also is
reason to think anything new will
"wonderful" and "healthy part of
conducting a federal grand jury
emerge about Whitewater-Mad-
our being, whether it is homosex-
investigation into the financial
ison that would seriously damage
ual or heterosexual."
links between Madison and White-
the administration.
She also endorsed homosexual
water Development Corp. Presi-
He said a public airing about
adoptions and called the Boy
dent Clinton and Hillary Rodham
Whitewater and Madison in 1992
Scouts' ban on homosexual Scouts
Clinton were partners in White-
might have kept Mr. Clinton off the
and Scout leaders "unfair."
water with Madison owner James
Democratic ticket.
Mr. Clinton, in his April 4th re-
B. McDougal and his former wife,
Mr. Leach blames President
ply to Cardinal Hickey, empha-
Susan.
Bush's campaign in part for know-
sized that the president's job is to
Mrs. Lewis' belief that White-
ing about Madison but not wanting
build a society that promotes tol-
water took $1.5 million out of Mad-
to raise savings and loan issues.
erance and acceptance of diver-
ison in a check-kiting scheme has
Mr. Bush's son, Neil, was involved
sity.
helped to convince Mr. Leach
in the failed Silverado Savings and
"Recognition of differing opin-
crimes may have been committed.
Loan in Colorado. Mr. Leach also
ions on difficult social issues does
"The modus operandi of this
charges the press was more inter-
not, and should not, imply endorse-
White House is to attack those who
ested in Mr. Clinton's personal life
ment of any particular response to
raise charges," Mr. Leach told re-
in 1992 than in pursuing compli-
a matter of such complexity," Mr.
porters. "But she's not a maverick
cated financial dealings.
Clinton said.
working alone.
You'll find her
The Iowa Republican, who has
He added that the federal gov-
to be an extremely credible wit-
filed a lawsuit seeking RTC doc-
ernment does not have a say in "do-
ness."
uments about Whitewater and
mestic relations, including adop-
Mr. Leach, a nine-term Iowa
Madison, said he has gotten to
tion," because they are state and
congressman, said Mrs. Lewis
know Mrs. Lewis. "Jean would like
local issues.
started as a "quasi-whistleblower"
to keep her job," he said.
"I believe that our common good
for the government in the S&L in-
Asked if he believes her job is in
is better served when we encour-
dustry and has won acclaim and a
jeopardy, he said, "Yes, I do."
age creative and innovative solu-
merit bonus as a "dedicated pro-
tions to questions that have the po-
fessional" whose work has led to
tential to divide us," Mr. Clinton
indictments and convictions. But
wrote.
she is zealous without having for-
In his second letter, released by
mal training as a lawyer or ac-
the archdiocese yesterday, Cardi-
countant, for which she has been
nal Hickey said he "remained
criticized.
disturbed" at Dr. Elders' public
He said the evidence Mrs. Lewis
criticism of Catholics and the "re-
has accumulated about Madison is
ligious right" who disagree with
a "black-and-white paper trail"
her on moral and health issues.
"I hope you will agree that in our
system of government it is highly
inappropriate for civil officials
to attack any specific religion or to
single out for ridicule the views of
any religious group," the cardinal
wrote.
The Washington MAY 18, 1994
108
Californians may
WASHINGTON
try to 'save state'
from illegal entries
Extend China status,
say 106 in Congress
By Sally Ann Stewart
standing in San Diego near
President Clinton should extend China's most favored na-
USA TODAY
the Mexico border.
tion trade benefits and create a joint commission to monitor
Democrats immediately
human rights in China, 106 Congress members wrote Tues-
LOS ANGELES Ezola
began faxing statements ac-
day to Clinton. The letter said a bilateral U.S.-Chinese hu-
Foster is fed up with the
cusing Wilson of race-baiting.
man rights commission would be a "constructive and effec-
steady stream of illegal immi-
"Pete Wilson is using immi-
tive alternative" to an annual confrontation over renewal of
grants who've been pouring
gration the same way George
the trade privileges. Clinton must decide by June 3 whether
into the Golden State.
Bush used Willie Horton,"
to give China another year of lowered tariffs.
"Illegal immigration will
says state Democratic Party
Under an order Clinton signed last year, the tariff break
destroy us if it continues,"
Chairman Bill Press. "Every
is contingent on China making significant progress on hu-
says Foster, 55, president of
time he wants his poll num-
man rights. Critics say Beijing has fallen short.
Black Americans for Family
bers to go up, he starts immi-
Values.
grant-bashing."
COURT NOMINEE:
A teacher for 30 years, Fos-
Wilson has joined Florida
Senators rolled out the
ter is among the supporters of
Gov. Lawton Chiles and Ari-
praise for Supreme
"Save Our State," a likely No-
zona Gov. Fife Symington in
Court nominee Judge
vember ballot initiative
filing lawsuits to force the
Stephen Breyer during a
aimed at denying state ser-
federal government to reim-
Capitol Hill tour in prep-
vices - including prenatal
burse states for costs of illegal
aration for an expected
care and education - to un-
immigrants.
easy confirmation to the
documented immigrants.
There are an estimated 3.2
Supreme Court. Breyer,
Initiative sponsors this
million illegal immigrants na-
55, said he was delighted
week turned in petition signa-
tionwide, according to the
at the widespread, bipar-
tures to county registrars
federal government, and
tisan support that has
throughout the state. They
nearly half are in California.
greeted his nomination.
need 384,974 signatures to put
The S.O.S. initiative - co-
Senate Majority Leader
the measure before voters.
written by former Immigra-
George Mitchell, D-
"We submitted close to
tion and Naturalization Ser-
Maine, predicted the
By John Duricka, AP
600,000" signatures, says po-
vice officials Alan Nelson and
Senate would give
BREYER: Meets with Sen. Jo-
litical strategist Robert Kiley,
Harold Ezell - would ex-
Breyer "an overwhelm-
seph Biden, right.
who's heading the initiative
clude illegal immigrants
ing vote of confidence."
campaign. He'll know within
from collecting welfare bene-
Senate Minority Leader Robert Dole, R-Kan., said, "The
a month if the measure earns
fits or receiving medical care
president's made a good choice." Sen. Joseph Biden Jr., D-
a spot on the ballot.
- except for emergency aid.
Del., head of the Judiciary Committee, which will vote first
A Los Angeles Times poll
Illegal immigrants can't
on Breyer, joked: "Judge Breyer has announced his with-
in March showed 62% favor
get welfare now, but the state
drawal. He doesn't want us to be denied a difficult fight."
the initiative, including a ma-
does provide emergency
jority of Democrats.
medical assistance. And preg-
WHITEWATER HEARINGS: Rep. Jim Leach, R-Iowa,
But that doesn't guarantee
nant illegal immigrants get
who's been demanding congressional hearings on the Clin-
the initiative will pass.
prenatal care.
tons' Whitewater land deal, says there's "a slightly stronger
"A vote for the status quo,
But the initiative also
chance" of hearings in the Senate than in the House. Leach
the 'No' side, has the upper
would require schools to
told reporters that despite Republican unanimity on the
hand," says pollster Mark Di-
check students' citizenship
need for hearings, "That does not mean that there will be
Camillo. "It's such a broad
status and exclude illegal im-
hearings. Hearings are called by the majority party." Sen-
and complex initiative that
migrant children. Police and
ate leaders are negotiating a timetable for hearings. Leach
the 'No' campaign can focus
schools also would be re-
has been stymied by House Democratic leaders.
in on the weakest link."
quired to report children and
Already, Hispanic and
parents suspected of being
REFUGEE LINERS: The government is chartering two
Asian groups are jointly rais-
here illegally.
Ukrainian-registered cruise ships for possible use in screen-
ing money for anti-S.O.S. ads.
The initiative is likely to
ing Haitian boat people seeking political asylum. One ship
Kiley is confident anyway.
end up in the courts. The U.S.
has 700 beds. The other has 750 beds. Estimated daily cost
"We got signatures from ev-
Supreme Court has said that
of the ships, not including fuel or food: $63,000. The final
ery one of the 58 counties,"
illegal immigrant children
cost is not set. A contract is yet to be signed. No U.S. firms
he says. "I think the people
cannot be denied education.
bid, White House press secretary Dee Dee Myers says. She
have spoken."
And civil rights lawyer Leo
says the administration is looking for a third country to es-
Indeed, just about every-
Terrell says the initiative
tablish processing centers or host the ships in its port.
body here is talking about im-
could violate the constitution-
"We're still working out the details as to exactly how Hai-
migration, one of the hottest
al right to be free from unrea-
tian refugees interdicted at sea would be processed, where,
political issues in the state.
sonable searches.
and where the refugees would go if they qualified for asy-
Last weekend, Gov. Pete
"In California, the tradition
lum," says Myers. The Coast Guard repatriated all 586 Hai-
Wilson, a Republican who has
is that an initiative will be vot-
tians picked up since last Thursday because the offshore
hinted he'll likely campaign
ed on, and then, if there's a
screening promised by Clinton on May 8 is not in force.
for the initiative, unveiled a
court challenge, it'll be decid-
new election-year TV spot, in
ed afterward," says Daniel
which he talks tough about il-
Rabovsky, of the state's Legis-
Educating illegal immigrants
legal immigration while
lative Analyst Office.
About 392,260 of California's 5.3 million children in public
schools in the 1994-95 school year will be illegal
immigrants. The cost of educating the children of illegal
Immigrants and the number of such children in California:
State/local school costs
Illegal-Immigrant puplis
$1.8
400
$1.6
$1.4
300
392,260
$1.2
$1.65 billion
288,028
$1.0
200
$.8
(Billions)
$.6
$1.1 billion
$.4
100
$.2
USA
TODAY WEDNESDAY, MAY 18, 1994
0
0
'88
"90
'92
94
'88
'90
'92
'94
78
Source: California Department of Finance By Stephen Conley, USA TODAY
Whitewater Goes Back to Its Source, Threatening
To Tip Boats in Race for Governor of Arkansasv
By VIVECA NOVAK
just when it should be riding high.
Mr. Nelson considered a promise not to run
And ELLEN JOAN POLLOCK
Mr. Tucker, a former congressman.
again in 1990, Mr. Nelson switched parties,
Staff Reporters of THE WALL STREET JOURNAL
was lieutenant governor when Mr. Clinton
won the Republican gubernatorial nomina-
CHIDESTER, Ark. - "I think péople
won the presidency. "I understand the
tion and waged a bitter campaign against
around here are tired of that word 'White-
reason I ended up being governor is be-
him.
water,' says David Butler, a part-time
cause Bill Clinton carried California and
His anti-Clinton crusade continued into
local prosecutor, as he listens to political
New York and George Bush threw up on
the presidential campaign. It was he who
stump speeches in front of Barbara's Super
the prime minister of Japan," he tells his
put a New York Times reporter in touch
Suds Washeteria and Bolt's Mercantile.
audience here. "But that's OK. I'll take it
with Mr. McDougal. leading to the first
Mr. Butler may be right, but Arkansans
any way I can get it."
Whitewater story: a transcript of a tete a
aren't likely to rid themselves of Whitewa-
The governor had been considered a
tete between Messrs. Nelson and McDou-
ter any time soon.
shoo-in to win election in November: many
gal about alleged improprieties in Mr.
In fact, this fall's
Arkansans seem to prefer his straightfor-
Tucker's business has been circulated
gubernatorial elec-
ward style to Mr. Clinton's efforts to please
widely.
tion may well hinge
everyone. But since Whitewater blos-
Mr. Nelson turned off the spigot of
on the reverbera-
somed, he has been running scared. At the
Whitewater information after polls showed
tions of the unsuc-
heart of his worries are roughly $300,000 in
his own negative rating creeping upward.
cessful real-estate
federally backed loans that Mr. Hale's
"People would like to blame someone for
venture
that
company made to Tucker-owned compa-
all the information that has come out,"
counted among its
nies. The loans were supposed to go to
says campaign aide Betsy Pilgrim. "Shef-
investors Bill and
disadvantaged businesses, although the
field is taking the heat.' Mr. Nelson says
Hillary Clinton.
governor says he didn't know that, and
he wants to conduct a positive campaign.
On the one side
they have attracted Mr. Fiske's attention.
but he can't help noting that Whitewater
is incumbent Demo-
Meanwhile, the Kansas City Star re-
"will be of interest" to voters.
cratic Gov. Jim Guy
ported Sunday that the RTC has asked the
His worry is that voters may also still be
Tucker. He is hip-
Jim Guy Tucker
Justice Department to look into allegations
interested in questions about him, includ-
deep in the affair,
that Mr. Tucker illegally diverted part of a
ing a controversy
having been linked through a series of
$260,000 loan from Mr. McDougal's Madi-
that dogged him
THE WALL STREET JOURNAL WEDNESDAY, MAY 18, 1994
complex deals to Clinton co-investor James
son Guaranty Savings & Loan in 1985.
throughout the 1990
McDougal and to David Hale, a former
John Haley, Mr. Tucker's lawyer. says
campaign concern-
municipal judge who recently pleaded
that the governor "had a pretty complex
ing a decade-old
guilty to two unrelated felonies and is
life." He concedes that although nothing
natural-gas deal be-
cooperating with Robert Fiske, the White-
has been proved, the dealings may look
tween Arkla and
water special prosecutor. Newspapers re-
suspicious to voters. "There are some
Jerry Jones, now
ported this week that Mr. Tucker was
people who feel if it's simple, it's OK; if it's
the owner of the
named in a criminal referral by the Resolu-
complex, it's sinister," he says.
Dallas Cowboys.
tion Trust Corp. in the fall.
To discourage potential gubernatorial
Mr. Nelson says he
On the other side, barring an upset in
challengers, Mr. Tucker amassed a $1
was
"totally
Tuesday's Republican primary, is Shef-
million war chest for this year's campaign.
cleared" and that
field Nelson, the business executive and
But seven days before the filing deadline,
the controversy was
onetime Clinton booster turned virulent
Mr. Nelson jumped in. Once, Mr. Nelson,
enemy. A conduit of Whitewater scoops to
the former chairman of Arkla Inc., now
Sheffield Nelson
"very political."
But some voters still
the press ever since the 1992 presidential
Noram Energy Corp., was a Democrat who
remember. At an Optimists Club luncheon
campaign, Mr. Nelson has his own political
backed Mr. Tucker's run for a U.S. Senate
in Little Rock, where Mr. Nelson is the
baggage, including the fact that many
seat in 1978 and supported Gov. Clinton.
guest speaker, member Norman Mooney
Arkansans feel he has shamed their state
But when Mr. Clinton went back on what
conspiratorially confides, "You know,
Sheffield has his own Whitewater."
HMO Quality
Attempting to cash in on Mr. Nelson's
tion, or HCFA, to allow Medicare benefi-
vulnerabilities in Tuesday's primary is
ciaries to enroll in managed care plans,
Is Rated Similar
Steve Luelf, a GOP state senator who's
and to encourage HMOs to enroll such
been dubbed "an ethics beacon" by the
members. HCFA is the administrator of
local press. With little money or name
the federal Medicare program.
recognition, Mr. Luelf is at best a long
To Other Care
The findings are based on a random
shot. But earlier this week he was endorsed
telephone survey done in 1990 of Medicare
by former Rep. John Paul Hammer-
beneficiaries who reported joint pain or
schmidt, a popular Republican who served
By RON WINSLOW
chest pain during the previous 12 months.
in Washington for 26 years.
Staff Reporter of THE WALL STREET JOURNAL
Mr. Luelf thinks voters will have trou-
The analysis included 2,243 HMO members
A new study suggests that elderly pa-
ble buying Mr. Nelson's promise about
and 2,009 nonmembers with joint pain and
tients get roughly the same quality of care
positive campaigning. He argues that the
556 HMO members and 524 nonmembers
from health maintenance organizations as
"public perception. particularly among
from traditional fee-for-service settings
with chest pain.
Democrats" who make up most of the
despite differences in treatment strate-
Researchers said those enrolled in
state's voters, is that Mr. Nelson has
gies.
HMOs got fewer referrals to specialists
simply gone too far. Wrongdoing needs to
The study. which compared treatment
and were less likely to have follow-up care
be uncovered. but there are "all kinds of
of two chronic medical conditions among
recommended than non-HMO patients. Pa-
ways" to do it, Mr. Luelf says. "You can
Medicare beneficiaries, found one area
tients with joint pain were more likely to
uncover it with concern or you can uncover
where arthritis patients at HMOs reported
get drug prescriptions and referrals to
it with glee. There's a line somewhere
worse results than their counterparts who
there."
physical therapy if they were HMO mem-
weren't HMO members. But for three other
bers.
measures. one also involving arthritis suf-
ferers, and two relating to chest pain
Despite such differences. similar num-
patients, patient outcomes were essen-
bers of both chest pain and joint pain
tially equivalent, the study said.
patients in each setting reported complete
"It's a mixed message." said Dolores
elimination of symptoms. Chest pain pa-
G. Clement, an assistant professor at
tients whose pain wasn't fully relieved
Virginia Commonwealth University, Rich-
reported similar improvement in symp-
mond, and lead author of the study. "In
toms in both HMOs and traditional set-
one respect. care under these managed
tings. But patients with joint pain, whose
care organizations seems to be of a quality
pain wasn't fully relieved, were less likely
equal" to traditional care. But Dr. Clement
and her colleagues speculated that less
to report improvement in their symptoms
intensive care in the HMO could explain
if they were in an HMO.
the "less satisfactory outcomes" among
She suggested the failure of some ar-
Jon Gabel, director of research at
some joint pain patients. She added that
thritis patients in HMOs to report the same
Group Health Association of America, a
there wasn't any clear explanation for the
symptom improvement as non-HMO mem-
Washington trade group for HMOs, said
result.
bers may reflect an overall lack of knowl-
the overall results supported several stud-
The study appears in today's Journal of
edge about the management of chronic
ies that indicate prepaid HMO care is
the American Medical Association. The
illnesses in the elderly.
generally as good as care delivered under
findings are part of a larger evaluation of
fee-for-service payment arrangements.
the Medicare Risk program. a project of
the Health Care Financing Administra-
Whitewater Threatens To Tip Boats In Arkansas Governor Race
By Viveca Novak and Ellen Joan Pollock
Staff Reporters of The Wall Street Journal
CHIDESTER, Ark. -- "I think people around here are tired of that word
`Whitewater, says David Butler, a part-time local prosecutor, as he listens
to political stump speeches in front of Barbara's Super Suds Washeteria and
Bolt's Mercantile.
Mr. Butler may be right, but Arkansans aren't likely to rid themselves of
Whitewater any time soon. In fact, this fall's gubernatorial election may well
hinge on the reverberations of the unsuccessful real-estate venture that
counted among its investors Bill and Hillary Clinton.
On the one side is incumbent Democratic Gov. Jim Guy Tucker. He is hipdeep
in the affair, having been linked through a series of complex deals to Clinton
co-investor James McDougal and to David Hale, a former municipal judge who
recently pleaded guilty to two unrelated felonies and is cooperating with
Robert Fiske, the Whitewater special prosecutor. Newspapers reported this week
that Mr. Tucker was named in a criminal referral by the Resolution Trust Corp.
in the fall.
On the other side, barring an upset in Tuesday's Republican primary, is
Sheffield Nelson, the business executive and onetime Clinton booster turned
virulent enemy. A conduit of Whitewater scoops to the press ever since the
1992 presidential campaign, Mr. Nelson has his own political baggage,
including the fact that many Arkansans feel he has shamed their state just
when it should be riding high.
Mr. Tucker, a former congressman, was lieutenant governor when Mr. Clinton
won the presidency. "I understand the reason I ended up being governor is
because Bill Clinton carried California and New York and George Bush threw up
on the prime minister of Japan," he tells his audience here. "But that's OK.
I'll take it any way I can jet it."
The governor had been considered a shoo-in to win election in November;
many Arkansans seem to prefer his straightforward style to Mr. Clinton's
efforts to please everyone. But since Whitewater blossomed, he has been
running scared. At the heart of his worries are roughly $300, in federally
backed loans that Mr. Hale's company made to Tucker-owned companies. The loans
were supposed to go to disadvantaged businesses, although the governor says he
didn't know that, and they have attracted Mr. Fiske's attention.
Meanwhile, the Kansas City Star reported Sunday that the RTC has asked the
Justice Department to look into allegations that Mr. Tucker illegally diverted
part of a $260,000 loan from Mr. McDougal's Madison Guaranty Savings & Loan in
1985.
John Haley, Mr. Tucker's lawyer, says that the governor "had a pretty
complex life." He concedes that although nothing has been proved, the dealings
may look suspicious to voters. "There are some people who feel if it's simple,
it's OK; if it's complex, it's sinister,' he says.
To discourage potential gubernatorial challengers, Mr. Tucker amassed a $1
million war chest for this year's campaign. 'But seven days before the filing
deadline, Mr. Nelson jumped in. Once, Mr. Nelson, the former chairman of Arkla
Inc., now Noram Energy Corp., was a Democrat who backed Mr. Tucker's run for a
U.S. Senate seat in 1978 and supported Gov. Clinton. But when Mr. Clinton went
back on what Mr. Nelson considered a promise not to run again in 1990, Mr.
Nelson switched parties, won the Republican gubernatorial nomination and waged
a bitter campaign against him.
His anti-Clinton crusade continued into the presidential campaign. It was
he who put a New York Times reporter in touch with Mr. McDougal, leading to
the first Whitewater story; a transcript of a tete a tete between Messrs.
Nelson and McDougal about alleged improprieties in Mr. Tucker's business has
been circulated widely.
5/18/94
Clir 0 0 get u da e
on health legislation
By J. Jennings Moss
THE WASHING TIMES
With only one congressional committee
set to finish its work on health care reform
Whitewater-papers suit
by Memorial Day, President Clinton is ten-
tatively scheduled to meet with Demo-
cratic leaders and committee chairmen to-
morrow to get an update on Congress'
to get earlier court dates
work.
Administration and congressional offi-
cials said the meeting does not reflect a
By Jerry Seper
THE WASHINGT TIMES
change in the strategy of letting the com-
Fiske OKs review
mittees do their work without interference
Rep. Jim Leach, who has unsuccessfully
from the White House.
sought Whitewater-Madison documents for
White House Press Secretary Dee Dee
five months, and lawyers for two federal
of Treasury papers
Myers acknowledged the difficulty of get-
agencies he sued for the records yesterday
ting a health bill passed this year.
agreed to accelerated court dates for legal
ASSOCIATED PRESS
"It's hard, but that doesn't mean it's im-
arguments in the case.
Special counsel Robert B. Fiske Jr.
possible. The budget was hard. NAFTA was
The Iowa Republican, ranking GOP
said yesterday he has given the White
hard. The assault weapons ban was hard.
member of the House Banking Committee,
House permission to review Treasury
We win those close fights," she said.
sued the Resolution Trust Corp. (RTC) and
Department documents detailing con-
Mr. Clinton said earlier that he hoped
the Office of Thrift Supervision (OTS) last
tacts with regulators over the White-
that the key committees would act by the
week for documents on Madison Guaranty
water-Madison affair.
Memorial Day congressional recess. Now
Savings and Loan Association and White-
Mr. Fiske described the action as a
it appears that of the five committees, only
water Development Corp.
"limited step" to allow the White House
the Senate Labor and Human Resources
Mr. Leach, the leading proponent in Con-
to prepare for congressional hearings
Committee - which begins formally writ-
gress for hearings in the Whitewater-
on the financial ties between Madison
ing a bill tomorrow - will meet that goal.
Madison affair, said in a lawsuit filed last
Guaranty Savings and Loan Associ-
"It sounds to me as though the president
Wednesday in U.S. District Court in Wash-
ation and Whitewater Development
wants to put a little pressure on the com-
ington that efforts by his office to get the
Corp. President Clinton and Hillary
mittees by staging a high-profile event,
records had been rebuffed since December
Rodham Clinton were partners in
which is probably a good idea. I mean, noth-
because of their potentially "embarrass-
Whitewater with Madison owner
ing has really publicly put a high profile on
ing" content.
James B. McDougal and his former
these committees yet," said a Senate Demo-
Madison, an Arkansas thrift owned by
wife, Susan.
cratic source.
James B. McDougal that failed in 1989 at a
But Mr. Fiske said allowing the
Before an interview with health care re-
cost to taxpayers of $50 million, and White-
White House to review the documents
porters last week, Mr. Clinton said the
water, a northern Arkansas real estate ven-
should not be interpreted as a sign that
ture involving President Clinton, Mr.
his review of the contacts is finished.
White House's role at this point is to provide
information to the committees and draw
McDougal and their wives, are the focus of
"We have told them that at this point
attention to key issues.
an ongoing investigation by special counsel
of the investigation that won't interfere
"I can't start really lobbying people until
Robert B. Fiske Jr.
with it. But the investigation is not over.
Mr. McDougal is suspected of diverting
There's still more to do," he said in
I know that we have an alternative out there
that can be lobbied, but I expect that even
funds from Madison to several prominent
a telephone interview from Little
Arkansas politicians, including Mr. Clinton,
Rock, Ark.
once we get one, I think there will be a lot
of heavy lifting to do," he said.
and of using Madison monies for the White-
Mr. Fiske subpoenaed a dozen Clin-
water project. Most of the accusations are
ton administration officials after it was
Yesterday, Mr. Clinton participated in a
outlined in RTC investigative reports
revealed that Treasury Department
video conference call from the White
turned over to the Justice Department in
regulators had briefed the White
House with employees at PictureT in Pea-
nine criminal referrals.
House on the status of an investigation
body, Mass. The company's president en-
The accelerated court dates, agreed to
into Mr. McDougal's failed Arkansas
dorsed the Clinton plan to require all busi-
yesterday, are no guarantee the govern-
thrift.
nesses to pay part of the cost of their
ment intends to back down on its denials to
Mr. Fiske said the White House
workers' health insurance.
Mr. Leach's requests for the documents.
agreed to take no actions that might
"I want to again urge all of you, just do
The RTC, which oversees failed S&Ls,
jeopardize his investigation without
what you can to personally contact the
has argued that Mr. Leach "failed to per-
first checking with him.
members of Congress- and again without
suade" the agency he had the necessary
He said administration officials re-
regard to party. Say this is an American
authority to receive the documents.
cently asked for permission to review
problem; we need an American solution.
"We are prohibited by statute from dis-
the Treasury documents detailing the
We need to do it in 1994, not later," Mr.
closing to an individual member of Con-
contacts and that he determined his
Clinton told PictureTel's workers.
gress information which may be protected
investigation was far enough along to
Two key committees in the House -
by the Privacy Act," James Barker, RTC
allow for such action.
Ways and Means, and Energy and Com-
general counsel for field operations, said in
White House Deputy Counsel Joel
merce have been unable to get a consen-
a letter to Mr. Leach.
Klein said yesterday the White House
sus among Democratic members on em-
"Case law refutes your staff's arguments
was just beginning to prepare for con-
ployer mandates and how to pay for reform.
that you, as an individual member of Con-
gressional hearings, expected this
An Energy and Commerce Committee
gress, are to be afforded any special status
summer, and had taken only a prelimi-
source said prospects of agreeing on a for-
under the [Freedom of Information Act]
nary view of documents.
mula that would win 23 Democratic votes
not afforded the general public," he wrote.
Mr. Fiske declined to discuss the sta-
- the number needed to get a bill through
Jonathan L Fiechter, acting director of
tus of the other part of his wide-
without Republican help are "dismal."
OTS, also has taken issue with claims by
ranging investigation.
Ways and Means Chairman Dan Rosten-
Mr. Leach that his agency had handled the
The revelation that the White House
kowski will begin work on a bill in the full
congressman's requests for information
and Treasury Department had discus-
committee tomorrow. But instead of using
differently than others' particularly to
sions concerning the status of the Mad-
his own legislative package, as he had
records on Lincoln Savings and Loan Asso-
ison investigation touched off a politi-
hoped, as a base, he will be using a bill that
ciation, in the so-called "Keating Five"
cal firestorm.
passed the health subcommittee. That bill
case.
does not have majority support in the full
"In each of those instances, the requests
committee.
were initiated by the House Banking Com-
Congressional hearings in the White-
Mr. Rostenkowski is awaiting financial
mittee or the chairman, not an individual
water-Madison affair are tentatively sched-
estimates from the Congressional Budget
congressman," Mr. Fiechter said in a letter
uled to begin this summer. It is up to the
Office for several health care options and
to Mr. Leach. "As we have said, we are pre-
leadership of both houses to specifically
could try to incorporate those alternatives
pared to provide the requested documents
call for the hearings to begin.
into the final bill.
once the Banking Committee or the chair-
Mr. Leach had sought an accelerated
"Rostenkowksi is saying to the Clintons
man endorses your request."
court timetable in his suit, saying it was
that by all means, keep the pressure up on
Mr. Fiechter said it was a "long-standing
"imperative" that legal arguments be set-
Congress to get the job done
But
if
you
position of the federal banking agencies"
tied "well in advance" of pending White-
say you don't like what we doing in the
not to provide confidential records to in-
water-Madison hearings in Congress in or-
Ways and Means Committee, that slows
dividual members of Congress outside of a
der to allow the release of the requested
down the process," a committee source
formal request by a committee or its chair-
documents.
said, arguing for Mr. Clinton to continue
man.
U.S. District Judge Charles Richey has
with his strategy.
Democrats on Capitol Hill said even
"It is necessary to protect candid com-
told attorneys for Mr. Leach and the govern-
munications between examiners and their
ment that a motion for summary judgment
though most of the committees will miss
supervisors and between the agency and
and all legal briefs in the case are due by
the Memorial Day deadline, the situation
savings associations, because they are in-
June 27, and that oral arguments would
has not yet reached a crisis point.
"The chairs have said all along that they
tegral to effective regulation," he said.
follow.
want to report it as quickly as possibly. But
really. in the grand scheme of things, it's
not terribly important. because the only
important consideration is whether or not
there will be a bill in October." said Energy
The
Bashington
Phase of Whi ewa er nves iga on
Is Near End, Fiske Tells White House
stances that do not interfere with
By Ann Devroy and Susan Schmidt
Fiske's investigation. Senate Majori-
Washington Post Suff Writers
ty Leader George J. Mitchell (D-
White House officials say White-
Maine) said Sunday of hearings, "We
water special counsel Robert B.
are going to do it as promptly as we
Fiske Jr. has told them he is nearing
can, do it right after the conclusion
the end of the first phase of his in-
of the first phase."
vestigation, prompting their own in-
Mitchell and Senate Minority
ternal investigation in preparation
Leader Robert J. Dole (R-Kan.) have
for summer congressional hearings.
been engaged in periodic negotia-
White House Counsel Lloyd N.
tions over the timing and scope of
Cutler said yesterday that he has ob-
any congressional hearings.
tained an agreement from the Trea-
Fiske said he planned to promptly
sury Department for access to its
issue a forensic report on Foster,
documents related to contacts White
putting to rest questions about
House officials had with Treasury of-
whether there was foul play or if he
ficials about Whitewater.
committed suicide, as a Virginia
Fiske yesterday declined to say
medical examiner has ruled.
ROBERT B. FISKE JR.
how close he is to determining
Some sources close to the White
whether those contacts were im-
probe likely to go into 1995
House say they expect the report to
proper or illegal, but said, "It cer-
be issued soon and believe it will
tainly isn't over."
conclude Foster's death was a sui-
Fiske said White House officials re-
cide. However, Fiske issued a broad
cently asked him whether they would
subpoena two weeks ago that seeks
be interfering with his investigation if
to track documents that were in
they reviewed the Treasury docu-
Foster's office at the time of his
ments. Fiske said he told them his in-
death. It could not be learned wheth-
vestigation was at a point where such
er that information will be pursued
a review would not interfere.
separately or become part of the re-
"That's all we told them," said
port on his death.
Fiske, adding that White House offi-
Fiske's investigation now seems
cials were not asking whether they
likely to stretch well into 1995.
should take such a step.
Fiske is still adding to his staff of
Political appointees at Treasury
more than 30 lawyers and investiga-
have been running the federal Reso-
tors: Two more lawyers were hired
lution Trust Corp. and had access to
a week ago, and a message to FBI
information about the criminal and
bureaus around the country last
civil cases arising out of the failure
month said Fiske is seeking agents
of Madison Guaranty Savings &
with backgrounds in financial and
Loan in Arkansas. Madison was
LLOYD N. CUTLER
white-collar crime.
owned by James B. McDougal, joint
White House probe to begin
In addition to the Washington end
owner with the Clintons of the
of the probe, the special counsel's of-
Whitewater real estate venture in
fice has been investigating the af-
the Ozark Mountains.
fairs of Madison Guaranty and the
Senior Treasury and White House
Rose Law Firm. Former municipal
officials had a series of meetings
judge David Hale, who pleaded
about the Madison-Whitewater in-
guilty to fraud charges and is coop-
vestigation beginning last fall.
erating with Fiske, has appeared re-
Twelve officials in all have testified
peatedly before the grand jury in Lit-
before a grand jury, and Fiske has
tle Rock, sources said.
subpoenaed all related documents.
Hale, who owned a venture capital
Cutler said yesterday that Fiske
company backed by the Small Busi-
had "withdrawn any objection" to the
ness Administration, has alleged that
White House obtaining from Trea-
he was pressured in the mid-1980s by
sury copies of documents, memos
then-Gov. Bill Clinton, McDougal and
TUESDAY, MAY 17, 1994 THE WASHINGTON POST
and other written material related to
Jim Guy Tucker (D). current Arkansas
those contacts. Fiske originally had
governor, to make fraudulent loans.
asked officials at the White House
One loan, in the amount of $300.000,
and at Treasury not to conduct in-
was issued to an advertising company
ternal investigations of the contacts
owned by Susan McDougal, and at
because they could lead to coordinat-
VINCENT FOSTER
least some of that money ended up
ing statements and other actions
report on his death promised
buying land in Whitewater's name.
that would not be conducive to a full
Clinton and McDougal both say
investigation by Fiske.
Cutler said the White House's pri-
the Clintons did not know the SBA-
Cutler and Treasury Secretary
mary need for the documents was to
backed loan was used for White-
Lloyd Bentsen and top assistants
prepare for congressional hearings
water land.
worked out what Cutler said were
where White House and Treasury
Hale, who made his allegations
procedures to keep from the White
officials might have to appear. The
public last fall, has largely disap-
House any documents that involve
peared from view. Court officials in
the substance of the Whitewater fed-
status of those hearings has been in
Little Rock said he has at times been
eral investigation but include docu-
limbo, awaiting word from Fiske that
placed under FBI protection.
ments that relate to White House-
he would no longer object to at least
a phase dealing with the White
In addition to pressing forward on
Treasury discussions of it.
the Hale allegations, Fiske's staff
An administration official said
House-Treasury contacts.
has been poring over records at the
Treasury "had qualms" about the
While Fiske's overall investigation
Rose Law Firm, where Foster, Hilla-
White House request because of
into Whitewater is expected to take
ry Rodham Clinton and former asso-
fears that any discussion with the
a year or more, he has told congres-
ciate attorney general Webster L.
White House would be seen as collu-
sional leaders that he was prepared
Hubbell were all partners before
sion. The qualms prompted what
to conclude the phase dealing with
coming to Washington.
amounted to a legal negotiation be-
the contacts and with the death of
Fiske recently delivered a 3½-
tween the White House and Trea-
White House deputy counsel Vincent
page list of clients and case files,
sury over the scope of the docu-
Foster this spring or summer. Com-
most related to Hubbell's activities
ments that would be made available.
pleting the investigation in phases
at the firm, sources said. Among
Cutler said the procedures were
would allow Congress to hold hear-
other things, the special counsel's
"worked out agreeably" and pro-
ings. if it decided to proceed, in simi-
office is investigating Hubbell's han-
duced "a full understanding that will
lar phases.
dling of a Madison-related lawsuit
keep us from seeing documents that
The Senate has voted to conduct
for the government and the legal
we should not be seeing."
hearings at a time and under circum-
bills he submitted
PM-Whitewater-Fiske,440
White House To Review Treasury Documents Related to Whitewater
By JOHN SOLOMON= Associated Press Writer=
WASHINGTON (AP) Whitewater special prosecutor Robert Fiske is allowing
the White House to review Treasury Department documents detailing contacts
with regulators over the politically sensitive savings and loan case.
The White House requested the documents to prepare for congressional
hearings into the Whitewater affair.
Fiske said Monday he was giving the White House access to the documents
but said his action should not be interpreted as a sign that his review of the
contacts was finished.
`We have told them that at this point of the investigation that won't
interfere with it. But the investigation is not over. ... There's still more
to do,'' he said in a telephone interview from Little Rock, Ark.
Fiske subpoenaed a dozen Clinton administration officials after it was
revealed Treasury Department regulators had briefed the White House on the
status of an investigation into a failed Arkansas thrift owned by the
Whitewater business partner of President Clinton and Hillary Rodham Clinton.
Fiske said the White House agreed to take no actions that might jeopardize
his investigation without first checking with him.
He said administration officials recently asked for permission to review
the Treasury documents detailing the contacts and that he determined his
investigation was far enough along to allow for such action.
Deputy White House counsel Joel Klein said Monday the administration was
just beginning to prepare for congressional hearings, expected this summer,
and had taken only a preliminary view of documents.
Fiske declined to discuss the status of other part of his wide-ranging
investigation.
The revelation about the White House-Treasury discussions touched off a
political furor, leading to allegations the administration was trying to
meddle in the probe.
They first were revealed during congressional testimony by Deputy Treasury
Secretary Roger Altman in February. A dozen White House officials subsequently
were subpoenaed to testify before a federal grand jury and White House counsel
Bernard Nussbaum was fired.
Altman told a Senate committee he gave a ``heads up'' briefing to White
House officials on the status of a regulatory investigation into the failure
of Madison Guaranty Savings & Loan.
The S&L, which failed in 1989 at a cost of $47 million, was owned by James
McDougal, the Clintons' business partner in the Whitewater land venture.
Regulators have alleged that depositor funds from Madison may have been
improperly diverted in the mid-1980s to Whitewater and the Clinton
gubernatorial campaign.
McDougal and the Clintons repeatedly have denied any wrongdoing.
**** filed by:APE-(--) on 05/17/94 at 00:20EDT ****
**** printed by:WHPR(JEL) on 05/17/94 at 09:06EDT ****
A8 THURSDAY. MAY 12. 1994
THE WASHINGTON POST
Leach Sues to Force Release of Whitewater Files
House Republican Asserts Thrift Regulators' Secrecy Shields Administration Officials
By Susan Schmidt
have the lawsuit placed on a judicial
Washington Post Staff Writer
fast track. Their early efforts met
with success yesterday when U.S.
Rep. Jim Leach (R-Iowa) yester-
District Judge Charles R. Richey
day sued federal regulators for re-
asked Justice Department lawyers
lease of documents relating to the
representing the RTC and OTS to
Whitewater investigation, saying
appear in court Monday to discuss
they cannot choose to withhold the
whether the case should be put on
material just because it might be
an expedited schedule.
embarrassing to the president.
Several lawyers from Covington
Leach, the ranking Republican on
& Burling are handling the lawsuit
the House Banking Committee, for
on a pro bono basis, including former
six months has been seeking docu-
Bush campaign general COU
Bob-
ments relating to Whitewater and a
by R. Burchfield.
failed Arkansas savings and loan,
Madison Guaranty. Most of his re-
Leach has asked for a wide range
quests have been denied on privacy
of Madison documents, including in-
or other grounds by the Office of
vestigatory files, memos on suspect-
Thrift Supervision, the agency that
ed criminal activity, loan files, com-
regulates S&Ls, and the Resolution
plete minutes of board meetings and
Trust Corp., the agency created to
many other documents. Regulators
dispose of hundreds of failed thrifts.
have denied his requests, citing pos-
Leach said that in the past regula-
sible interference with the ongoing
tors routinely provided materials to
criminal probe by special counsel
the banking committee minority on
Robert B. Fiske Jr. They also have
many other S&Ls, including some
said many of the documents are pro-
that were the subjects of sensitive
tected by privacy rules.
BY RAY LUSTIG- THE WASHINGTON POST
criminal investigations. Among them
Rep. Jim Leach (R-lowa) announces lawsuit at Capitol news conference. With
By law, the banking committee is
were Lincoln Savings and Loan, run
him are lawyers Bobby R. Burchfield, left, and Jackson R. Sharman III.
required to hold an oversight hear-
by Charles H. Keating Jr., and Sil-
ing on the RTC by the end of this
verado Savings and Loan, where
any differently from those of other
filling his oversight duties as the
month, but there is no indication
President George Bush's son Neil
failed thrifts," Leach wrote in a let-
banking panel's ranking minority
that Gonzalez plans to schedule one.
was a director.
ter to RTC officials. He told report-
member.
Republicans had planned to
such
"Apart from the involvement with
ers that regulators appear to want to
OTS and RTC have said they
a hearing as a forum to ask questions
Madison Guaranty of certain present
"reduce executive branch embar-
would only provide Madison records
about Madison and Whitewater.
and former high-ranking members of
rassment."
if they are requested by the Banking
President Clinton and Hillary Rod-
this administration. there would ap-
The lawsuit, filed in U.S. District
Committee chairman, Rep. Henry B.
ham Clinton were half owners of the
pear to be no justification for treat-
Court here, maintains that regula-
Gonzalez (D-Tex.). Gonzalez has
Whitewater real estate venture in
ing Madison Guaranty documents
tors are preventing Leach from ful-
tried to block congressional investi-
Arkansas along with Madison owner
gation of Madison, going so far as
James B. McDougal and his wife.
writing to RTC and OTS officials to
Leach wants to find out if Madison
urge them not to provide materials
depositor funds were diverted to
to Leach.
Whitewater, a question that is also
Lawyers for Leach are seeking to
being explored by Fiske.
THURSDAY, MAY 12, 1994 THE WASHINGTON POST
31
Longtime friend
probed as source
edge" that companies headed by
political supporters of Mr. Clinton
received favored status for gov-
ernment awards, including busi-
ness loans through ADFA bond is-
of Clinton funds
sues.
The former official, who asked
not to be identified, alleged in a
singer Glen Campbell for a ski
were approved by Mr. Clinton. The
letter to the FBI that Clinton
trip to New Mexico sponsored by
Lasater firm was paid $1.6 million
appointees engaged in "power
By Jerry Seper
THE WASHINGTON TIMES
Al
the Lasater firm. The governor did
in brokerage fees from two dozen
brokering" to guarantee "single
not go on the ski trip.
separate tax-exempt state bonds.
source bids for services that en-
Special counsel Robert B. Fiske
The week's activities, according
In 1987, when Mr. Lasater sur-
sure repeat business to the same
to the letters, included confer-
rendered to federal authorities to
Jr. has expanded his Whitewater-
people."
ences on investment techniques
begin his prison sentence, he relin-
The letter said many ADFA
Madison investigation into New
and how to take tax deductions, in
quished control of Lasater and Co.
bond sales were intended "as po-
Mexico, where FBI agents are
addition to skiing and other enter-
to Miss Thomasson. As late as
litical favors or repayments for
looking into a bankrupt $20 million
tainment.
1991, she was listed as president of
ski resort once owned by Dan R.
campaign support." FBI officials
Lasater, a convicted cocaine
The Fiske inquiry into Angel
the Phoenix Group.
have declined comment on the let-
Fire was first reported on Sunday
Now an aide to the president,
dealer and longtime friend and
ter.
by the Albuquerque Journal. The
she was one of three persons who
Mr. Lasater acknowledged at his
supporter of President Clinton.
The inquiry, according to fed-
newspaper reported that Sen. Pete
searched the office of White
cocaine-conspiracy trial that he
eral law enforcement sources, is
V. Domenici, New Mexico Repub-
House Deputy Counsel Vincent W.
lent Roger Clinton $8,000 to pay a
Foster Jr. less than three hours
part of an overall look by the Fiske
lican, had confirmed that the spe-
drug debt. Investigators said later
task force to see whether Mr.
after his body was found in Fort
cial counsel was investigating the
that the debt actually was only
Lasater was a second source of
resort including "all aspects of
Marcy Park, off the George Wash-
$4,000 and Roger Clinton had
money routed illegally to Mr. Clin-
Dan Lasater's affairs," but he did
ington Memorial Parkway The
pocketed half the cash.
ton's 1984 campaign for re-election
not elaborate.
death was ruled a suicide.
Roger Clinton, who worked as
as Arkansas governor.
Mr. Domenici did not return
Mr. Lasater's driver, pleaded
In addition to the Angel Fire
Investigators, the sources said,
telephone calls for comment on
connection, Mr. Fiske's investiga-
guilty in January 1985 to separate
want to know whether Mr. Lasater,
the Journal article.
cocaine-distribution charges and
tors are looking into several other
who contributed thousands of dol-
Mr. Lasater, 50, also declined
served one year of a two-year sen-
matters involving Mr. Lasater, in-
lars to Mr. Clinton's campaigns,
comment. A receptionist at Phoe-
tence in federal prison in Texas.
cluding:
used a New Mexico resort called
He was an unindicted co-
nix Mortgage Co. in Little Rock,
Mr. Clinton's personal lobby-
Angel Fire, or a Little Rock invest-
where Mr. Lasater is now chair-
conspirator a year later in the
ing of Arkansas legislators in 1985
ment firm he owned, to funnel
man, said he does not talk to re-
Lasater case.
to give Mr. Lasater a contract to
money to the candidate through
Miss Thomasson, whom Mr.
porters.
sell $30.2 million in bonds for a
accounts at Madison Guaranty
Mr. Fiske's office has declined to
Clinton appointed chairman of the
state police radio system. The con-
Savings and Loan Association.
comment on the investigation.
Arkansas Highway Commission,
tract, ultimately approved, earned
"Madison and Lasater both had
Angel Fire currently is in bank-
was not implicated in the cocaine
Mr. Lasater's firm $750,000.
access to tremendous amounts of
ruptcy, with about $40 million in
Mrs. Clinton's conflict of inter-
investigation. She has not returned
calls to her office for comment.
money, and there is concern
outstanding claims.
est in representing the govern-
among federal authorities that the
The Lasater-Madison connec-
ment in a $3.3 million Federal De-
The late-night search of Mr. Fos-
Clinton campaign may have been a
tion has been of interest to federal
ter's office was conducted by
posit Insurance Corp. lawsuit
direct beneficiary," says another
investigators for several weeks. A
White House Counsel Bernard
against Mr. Lasater, which was set-
law enforcement official close to
confidential securities agreement
tled out of court for $200,000. Mrs.
Nussbaum, who was Mr. Foster's
the investigation.
signed by the two firms on June
Clinton, then a partner at the Rose
supervisor.
Madison, owned by James B.
21, 1984, included the establish-
Law Firm in Little Rock, rep-
McDougal, another longtime Clin-
ment of a Madison account within
resented the government, which
NEW FOCUS
ton friend and business partner,
the Lasater organization to buy
had accused Mr. Lasater of fraud
earlier became the focus of suspi-
and sell securities.
in the failure of First American
OF INQUIRY
cion in the Fiske inquiry. Investiga-
The single-page agreement,
Savings and Loan in Oak Brook, Ill.
Special counsel Robert B. Fiske
tors are looking into suspicions
signed by Madison board member
By the time the suit was filed,
Jr. is looking into Angel Fire, a
that Mr. McDougal illegally ma-
Susan H. McDougal, then Mr.
Mr. Lasater had contributed thou-
bankrupt 22,000-acre ski resort
nipulated loans, using overdrawn
McDougal's wife, was among doc-
sands of dollars to Mr. Clinton's
once owned by convicted cocaine
Madison accounts, and diverted
uments seized in December by
dealer Dan R. Lasater, a longtime
campaigns, sponsored campaign
S&L funds to the Clinton cam-
federal and congressional investi-
friend and supporter of President
fund-raisers, and let both Mr. and
Clinton
paign.
gators looking into the White-
Mrs. Clinton use his private air-
The Resolution Trust Corp.,
water-Madison affair.
plane.
which oversees failed S&Ls, has
In a Jan. 31 letter to the Securi-
The role of the Arkansas De-
COLORADO
questioned the diversion of other
ties and Exchange Commission,
velopment Finance Authority
NEW MEXICO
Madison deposits to Whitewater
Rep. Jim Leach, Iowa Republican
(ADFA) in the award of state tax-
522
Development Corp., a failed real
and ranking GOP member of the
exempt bonds, underwriting con-
House Banking Committee, also
84
64
estate venture jointly owned by
tracts, and bond counsel fees for
Mr. Clinton, Mr. McDougal and
suggested a Lasater connection. In
the Lasater firm and other invest-
25
their wives.
the letter to Arthur Levitt, chair-
ment groups, brokerage houses
State records show Mr. Lasater
man of the Securities and Ex-
and law firms. ADFA was created
Angel Fire
bought Angel Fire in 1984 from
change Commission, Mr. Leach
in 1985 by Mr. Clinton to expand
Tosco Corp. of Santa Monica,
asked for all related records in-
the state's authority to issue tax-
Grode
Sante Fe
Calif., for $19.5 million. The resort
firm.
exempt bonds to develop property
Rio
Las Vegas
later was taken over by the Phoe-
"Madison and its institution-
in Arkansas.
nix Group Inc., a company also
affiliated parties had significant
Investment bankers in Arkan-
owned by Mr. Lasater. He sold the
dealings with Lasater & Co., a
sas, and a former ADFA official
Albuquerque
84
22,000-acre development, 150
now-defunct Arkansas securities
involved in government bond con-
miles north of Albuquerque, in
40
firm," Mr. Leach wrote. "It has
tracts, said it was "common knowl-
1987 to the Sangre de Cristo Part-
been reported that Lasater & Co.
nership of Dallas. The sale price
was connected with significant
UTAH
COLORADO
was not revealed.
abuses in the municipal securities
Patsy L. Thomasson, who was
market."
the executive vice president of a
Mr. Lasater was sentenced in
Little Rock investment firm
December 1986 to 30 months in
Santa Fe
known as Lasater and Co. Inc. and
prison on the cocaine conviction.
who now is the director of the
ARIZONA
He served four months at a half-
Albuquerque
White House office of administra-
way house and two months under
tion, handled the sale. At the time,
Mr. Lasater was serving a prison
house arrest. He was pardoned in
November 1990 by Gov. Clinton
Enlarged
tence for conspiring to distrib-
NEW
and returned to live in Little Rock,
area
ute cocaine.
MEXICO
In 1986, Mr. Clinton's name was
where he eventually took over as
used by Angel Fire in letters to the
chairman at Phoenix Mortgage.
Arkansas Bar Association mem-
While he was under investiga-
tion by Arkansas State Police in a
bers and others as an inducement
MEXICO
TEXAS
- along with Arkansas-born
cocaine-distribution operation in-
volving Mr. Clinton's brother,
The Washington Times
Roger, Mr. Lasater received more
than $664 million in Arkansas
bond-sales contracts, all of which
The Washington Times THURSDAY, MAY 12, 1994
117
ENT BY:
5-11-94 :10:16PM :
REG. NEWSROOM-
4566485:# 6/ 6
The Des Hoines Register
"SUN SHOULD BE ALLOWED To SMINE'
White House
Leach lawsuit
News Summary
Page
5
demands S&L
Leach's lawsuit was no surprise,
since be had to sue If the
documents were not produced. But
his appearance internated . renewal of
documents
his visibility as the president's chief
critic on Whitewater.
Leach said in I letter to the RTC
dated Wednesday that be is obligat-
ed, as a member of Congress, to over-
see the actions of the RTC and OTS
The Iowa Republican wants
and track the progress of the SAL
two federal agencies to
Real Estate Venture
ballout. "Clearly encorupased with
hand over all the paperwork
James McDongal, the owner of
in this oversight responsibility is a
Madison Guaranty Sevings and Loan
duty to investigate allegations of
on the thrift linked to the
in Little Rock, Ark, and his forrer
wrongdoting at failed thrift institu-
Whitewater controversy.
wife, Busan, were partners in the
Lions, such as Madison Guaranty,"
Whitewater real estate venture with
wrote Leach.
By JANE NORMAN
then-Gov. BiD Clinton and his wife,
Hillary. Leach has said documents
Violations Charged
Or THE Receiver's
show funds from Madison were di-
Leach in his Iswsuit claims the
verted to Whitewater.
RTC and the OTS have violated the
Washington, D.C. in a lawsuk
A spokeswoman for the RTC said
Freedom of Information Act, the Ad-
filed Wednesday, Rep. Jim Leach, R-
the agency does not comment on
ministrative Procedure Act and the
la, sought to force two federal met
pending is walts. A spokesman for
Federal Nome Loan Bank Act. He
latory agencies to turn over all docu-
the OTS also declined to comment.
said a judge has been assigned to the
8 related to the failure of an Ar-
In past correspondence with
case but no hearing date has Deen
kansas savings and loan embroiled in
Leach, RTC officials have said It
set.
the Whitewater controversy.
would be "inappropriate" to hand
Leach is represented by Bobby
Leach, the senior Republican on
over documents before a congres-
Burchfield and Jackson Sharman m,
the House Banking Committee, has
sional hearing is acheduled. The
both members of the Washington
repeatedly requested the documents
House and Senate have ooth passed
firm of Covingion and Burling. The
from the Resolution Trust Corp. and
resolutions calling for heartrups on
lawyers are providing their services
the Office of Thrift Supervision, be-
Whitewater, but the dates and for-
for free, although the inweuit also
ginning late last year.
mats have not been mt.
asks the court to award Leach his
Officials with the agencies turned
CORA and "Teconable" morney's
down Leach, citing concerns over
fees.
Identiality. In addition, ReD.
Burchfield worked for former
ry Gonzalez, D-Texas. chairman
President George Bush's campaign.
of the committee, has instructed the
Leach said he is a "distinguished at-
RTC and OTS to resist Leach's re
tomey with a distinguished law
quests.
firm," and his time with Bush should
At question is whether members
be viewed as "a point of credit, not
of the minority party in Congress. in
of demerit."
oversight capacity, are entitled
to obtain documents related to a
"particularly embarrassing dream-
stance" from an executive branch
rolled by the majority party,
said.
"What this is all about is full die
closure, nothing more, nothing less,"
Leach. "The sun should be at
lowed to shine in. Otherwise, abu
sive actions that cannot be reviewed
W invite repetition."
lames Lasch
Chief Whitewater critic
142
05-11-1994 10:31PM
FROM
TO
12024562362
P.04
I
hurts to watch Bill Clinton make de-
ident's mind, but Clinton hasn't finis ned
cisions, especially from the world's
writing, much less editing and proof-
largest fish bowl and with aides run-
reading.
ning out to make leaks to reporters.
At this moment, Richard Arnold is not
You see, Clinton never decides until
John
anywhere near out of the running based
he decides. What he says is not always
on a leaked report that 95 percent of lin-
what he means; signals of his leanings
Brummett
ton's mind is made up.
can be misread. In his body language, a
Even if the report. is accurate, then 5
nod can mean "no." And until a decision
percent of Clinton's mind is still or en.
is advanced to the point of being beyond
Stephanopoulos, the junior president
That's a veritable Grand Canyon of op-
retrieval. it can always be rethought or
who sat with us, remarked earnestly, "He
portunity for another decision to eme rge
even undone.
never made a decision; these leakers
as the one that feels right in the pit of his
Who can forget the state trooper's late-
didn't know."
stomach.
night retrieval of a vetoed bill from be-
At this writing, Wednesday morning.
neath the door of the House clerk's of-
The New York Times, a rather credible
Quality television
fice? I certainly can't. as I bring it up with
newspaper, has reported a 95 percent
You might remember the column
certainty that Clinton will nominate Bab-
three weeks ago generally lamenting the
a rather tiresome frequency.
Clinton finally makes a decision when
bitt to fill the second Supreme Court va-
backwater culture of Arkansas televis ion
an instinct feels right for an extended
cancy to arise in his term. Reports are
and specifically lamenting the decision
period of time, which might be no more
that Clinton might announce a decision
by the Arkansas Educational Television
Network to cancel the "Charlie R ose
than 24 hours.
today.
"See, when I feel it here, I do fine," he
Babbitt may indeed be the nominee,
Show," a tasteful and topical interv ew
said to Mack McLarty. his chief of staff. af-
and indeed it might come later this very
show out of New York City.
ter deciding on Ruth Bader Ginsburg as
day.
Now I am happy to report that tha also
nis nominee for the Supreme Court last
Actually, Clinton probably would have
to viewer outery of a decibel level no of-
year. He pointed to his gut.
nominated Babbitt last year except that
ten heard in regard to public affairs TO-
I had occasion last June to interview
there were complications with his job as
gramming in these parts, the Rose st ow
the president briefly for a special pro-
interior secretary. As I reported last
will return July 4 at its regular hour, 11
ject. This was three days after he for-
week, Clinton wants to name a non-judge,
o'clock, every weeknight except Wednes-
mally nominated Ginsburg, then blew a
a savvy politician, to the court. He thinks
day.
fuse when Brit Hume of ABC asked him
there are too many judges and not
Next on our agenda is to shame
about the "zigs and zags" of his decision-
enough smooth facilitators and consen-
KTHV, Channel 11, into showing "Sun-
making process.
sus builders on the court. He believes
day Morning" instead of bad movies, and
By prior arrangement, his comments
there is room, in fact a need, for a politi-
KATV, Channel 7, into moving "Night-
to me that day were to be saved for use in
cian who just so happens to have a law li-
line" to its appropriate slot, at 10:30 W sek
the special project. But I think I can say
cense.
nights, just in time to switch over to
this much: He lamented the leaking -
But these leaked signals about per-
"Charlie Rose."
:hat he was about to appoint Bruce Bab-
centages of presidential certainty do not
bitt or Stephen Breyer by people ap-
carry a great deal of weight with me
parantly in physical proximity to him,
when the president in question is Clin-
John Brummett's column appears every un-
out not inside his head. George
ton Someone is trying to read the pres-
day, Tuesday and Thursday.
President Clinton and first
Association and Whitewater.
son Guaranty Savings & Loan
The documents involve Madi-
federal provisions.
of Information Act and other
documents under the Freedom
The lawsuit seeks the release of
District Court in Washington.
He filed the lawsuit in U.S.
Leach said.
lowed access to federal records,
minority party have been al-
Previously, members of the
dence." odds with hustorical prece-
He said the situation is "at
documents.
down his requests to release
vision have epeatedly turned
and the Office of Thrift Super-
with the Reslution Trust Corp.
Whitewater tritic, said officials
shine in."
Leach, the House's leading
Leach said "The sun should
closure -no more, no less,"
"What this is about is full dis-
water Development Corp. affair.
documents related to the White-
agencies or refusing to release
Wednesdly against two federal
Leach, Riowa, filed a lawsuit
WAIHINGTON - Rep. Jim
Demeral:3azone Washington Bureeu
BY BYTERRY LEMONS
son.
Leach
ber to obtain the documents.
mittee, has tried since Decem-
nance and Urban Affairs Com-
can on the House Banking, Fi-
Leach, the ranking Republi-
between Whitewater and Madi-:
dence of financial transactions
OTS would provide further evi-
ing sought from the RTC and
Leach said the documents be-
cial counsel Robert Fiske Jr.
sues being investigated by spe-
counts are among a series of is-
Madison and Whitewater ac.
gally was transferred between
Allegations that money ille
Congress in the 4th District.
three Democrats running for
Arkadelphia resident, is one 0
least $47 million. McDougal, at
1989 at a cost to taxpayers of a
owned Madison, which failed in
Whitewater papers
Leach sues to obtain
a
Dougal also
James Me
opment.
County devel
Mario
in Whitewate
san McDoug:
James and St
wit 1878-92
ners fro)
ton were par
Rodham Cli
lady Hillar
151
Whitewater, Jones suit may spur
legal defense fund for Clintons
By Paul Bedard
said to be facing a $250,000 bill for
stretches out his investigation, like
THE WASHINGTON TIMES
Al
lawyer David Kendall's handling
it looks like he will," a Washington-
of Whitewater Madison issues and
based lawyer said yesterday.
The White House is considering
his work on questions arising from
While the Clintons have assets
establishing a defense fund to
Mrs. Clinton's commodities trad-
valued at about $1 million, to-
cover President Clinton's and first
ing.
gether they earned an adjusted
lady Hillary Rodham Clinton's le-
In addition, Mr. Clinton could
gross income of $293,757 last year
gal bills, which are soaring to $1
face another almost $240,000 tab
and paid $62,670 of that in taxes,
million as they fight Whitewater-
in just a month as Washington
leaving $231,087.
Madison and sexual misconduct
superlawyer Robert S. Bennett
At that rate, it would take four
charges.
and his associates prepare the
years of net income to cover the
"There is simply an attempt to
Clinton defense to sexual miscon-
estimated legal bills the Clintons
try to outline what the various op-
duct charges made by former Ar-
may face this year alone.
tions are that are available to a
kansas state employee Paula Cor-
A senior Clinton administration
president for the payment of his
bin Jones.
official said Mr. Clinton is already
legal fees," Clinton aide Bruce
It could go even higher if
on the "installment plan" with Mr.
Lindsey told reporters before Mr.
Whitewater-Madison special coun-
Kendall's 129-lawyer firm, Wil-
Clinton left the White House for a
sel Robert B. Fiske Jr. prolongs
liams & Connolly, based in Wash-
two-city swing to promote health
and extends his probe.
ington. A source with the firm said
care yesterday.
"It could add up to $1 million in
Mr. Kendall is charging the White
Mr. Clinton, who is not involved
a short time, especially if the
in planning for the defense fund, is
Jones case goes to court or Fiske
see FUND, page A6
FROM PAGE ONE
FUND
miss the Jones case, prepare the
basic response to Mrs. Jones' suit,
"Clearly, if we were
try to put the case off until Mr.
From page Al
asked to be helpful,
Clinton leaves office and try to seal
House his regular hourly rate of
all papers.
$350 to $400.
we would be helpful
Mr. Kendall's expenses to de-
"No discounts," the source said.
fend the Clintons against White-
Mr. Bennett's 45-lawyer firm,
in any way they
water-Madison accusations would
Skadden, Arps, Slate, Meagher &
want."
push the Clintons' legal tab even
Flom, is charging the White House
higher.
his regular rate of $450 an hour, a
"I don't know how you do it for
White House official said.
less. They've got to be working it
Mr. Lindsey said the president's
asked to be helpful, we would be
to get it ready, and when your cli-
legal bills were not huge yet "but
helpful in any way they want," the
ent is the president, you don't cut
they have the potential to be."
adviser said.
corners," said a Washington law-
Asked if a legal defense fund
Another official suggested that
yer.
will be established, Mr. Lindsey
the Democrats may not be pressed
Leonard Garment, who rep-
said, "It hasn't been decided or se-
into service because the adminis-
resented former Attorney General
riously discussed."
tration does not want to make the
Edwin Meese III in an ethics inves-
But other administration offi-
fund-raising efforts appear to be
tigation, told the Associated Press
cials said the White House is try-
partisan. The official said Repub-
yesterday he rejected the idea of
ing to figure a way for the fund to
licans might even support a legal
setting up a legal defense fund for
be established "so it doesn't look
defense fund.
Mr. Meese.
like anyone is going to get a favor"
Mr. Bennett - and his $450 an
"Nobody would believe that
from Mr. Clinton.
hour will probably be teamed
there would be such a thing as a
"We're looking into whether it
with another partner making $300
blind trust," said Mr. Garment, a
can be set up without revealing
an hour and two associates making
former White House counsel for
contributors to you guys [the
up to $200 an hour each, according
President Nixon, adding that it
press] or the president. We don't
to other Washington lawyers. That
would have been too cumbersome
know if it can," said one official,
would cost the Clintons $1,150 an
to set up a fund with a low limit on
speaking on the condition of ano-
hour.
contributions.
nymity.
"He probably has 30 days to an-
The investigation of Mr. Meese
"I'm not sure if legally you have
swer Corbin's charges, so the legal
did not lead to an indictment, and
to do that, but clearly that would
team will probably work eight
the government paid his legal fees
be an option. They would not know
hours a day, six days a week as a
under the independent counsel
who was contributing, so there's
minimum," said a former Bush ad-
law. That law has expired, and now
no way people could give in return
ministration lawyer now in private
there is no provision for the gov-
for
a favor," Mr. Lindsey said.
practice.
ernment to pay legal fees of fed-
Mr. Lindsey said a legal defense
That adds up to $239,200 and
eral officials investigated but not
fund can be established for a pres-
that is just for Mr. Bennett's work
indicted.
ident but the White House cannot
in the initial stages of the Jones
Mr. Nixon's attorney, R. Stan
be involved.
lawsuit.
Mortenson, said an independent
He said White House lawyers
Legal observers said yesterday
legal defense fund was set up for
are working on a memo about the
that Mr. Bennett would have to
the late president, but he believed
legal defense fund for Mr. Clinton.
spend hours with reporters ex-
it was not started until after Mr.
One option would be to set a legal
plaining his case. But his team
Nixon left office in August 1974.
fee in lieu of paying hourly rates.
must also interview all witnesses,
Mr. Mortenson told the Associated
"It's in the very early stages.
including Mr. Clinton, research ap-
Press the fund operated for a few
The process is very early on," said
propriate laws and map out a strat-
years, and he did not recall how
a Democratic Party adviser to the
White House.
egy.
much money was raised. "It wasn't
Once that is done, Mr. Bennett
a significant portion" of Mr. Nix-
"Clearly, if we [the party] were
must then prepare motions to dis-
on's legal fees, he said.
The Washington MAY 10, 1994
all
Clinton Aides Consider Fund
THE NEW YORK TIMES. TUESDAY. MAY 10, 1994
To Pay His Private Legal Fees
By DAVID JOHNSTON
yers had concluded that there was
Special 10 The New York Times
nothing to prevent a sitting President
WASHINGTON, May 9 - White
from setting up a defense fund or to
House aides are considering a legal
stop him from negotiating a flat fee
Clinton Nears a Court Choice
defense fund and other ways to help
instead of paying an hourly rate. "He
President Clinton pay for lawyers he
has the same rights a citizen would or
has hired to deal with both a sexual
a member of Congress," Mr. Lindsey
As Lobbying Becomes Intense
harassment suit and a special prose-
said.
cutor's inquiry into his Arkansas land
Government ethics lawyers said
dealings.
they had been discussing with the
Bruce Lindsey, a top aide to Mr.
White House for weeks how Mr. Clin-
Clinton, told reporters today that
ton might set up a legal defense fund.
By NEIL A. LEWIS
But the strongest opposition to
White House lawyers would advise
Mr. Clinton would probably transfer
Special to The New York Times
Judge Arnold's appointment has
Mr. Clinton on how to pay bills that
control to a trustee, someone outside
WASHINGTON, May 9 - From the
come from women's groups who have
are likely to reach hundreds of thou-
the White House, who would collect
moment that Justice Harry A. Black-
criticized some of his judicial opin-
sands of dollars.
contributions and make payments di-
mun announced his intention to retire
ions. Marcy Wilder, the legal director
"There is simply an attempt to try
rectly to the President's lawyers,
at the end of the current Supreme
of the National Abortion Rights Ac-
to outline what the various options
said Donald E. Campbell, deputy di-
Court term, several groups have
tion League, said that her group had
are that are available to a President
rector of the Office of Government
rushed to press the White House on
told the White House that the judge
for the payment of his legal fees," Mr.
Ethics.
behalf of, and sometimes against, the
would be a poor choice to succeed
Lindsey said.
candidates believed to be on a list of
Justice Blackmun, who wrote the ma-
Re suggested that the legal analy.
Sums to Be Disclosed
finalists.
jority opinion in Roe V. Wade, the 1973
sis was being prepared without or-
He said Mr. Clinton would be re-
White House officials said today
case in which the Court first held that
ders from the President. "I don't
quired to list the amount of money
that President Clinton was close to
women have a constitutional right to
paid to his lawyers as a gift report-
making his selection for the Supreme
choose abortion.
able on his annual financial disclo-
Court, and that he was scheduled to
"We need a nominee who brings
sure statement. Mr. Clinton would not
meet with his advisers again on Tues-
the wisdom, compassion and commit-
ment to protecting women's rights
Contributions may
be obligated to disclose the identities
day for what was to be a final discus-
of individual contributors to the fund,
sion on the matter.
that we saw in Justice Blackmun, and
Mr. Campbell said.
Modern nominations to the Su-
we have serious concerns about
be sought for bills
Mr. Lindsey said the White House
preme Court come with lots of be-
Judge Arnold's record in this area,"
would not be directly involved in rais-
hind-the-scenes lobbying of the Presi-
she said.
dent. Hispanic advocacy groups, for
reaching hundreds of
ing funds, and he, too, suggested that
the identities of contributors would be
example, have pushed for Mr. Clinton
Ms. Wilder cited Judge Arnold's
thousands of dollars.
hidden from Mr. Clinton and from the
to nominate Federal District Judge
opinion in a 1983 case in which he said
José A. Cabranes of Connecticut, who
the Jaycees had a First Amendment
public.
would be the first person of Hispanic
right to prevent women from joining
But other lawyers said it might
heritage on the Court.
the organization, and a 1988 ruling in
prove difficult for Mr. Clinton to
At the same time, several civil
which he joined six other judges up-
avoid disclosing the names of donors,
rights groups have urged the White
holding a Minnesota law that re-
think there's been any discussion
simply because he might have diffi-
House to nominate a second black to
quired a woman under 18 years of age
with him about whether he'd have
culty convincing the public that he
and all his aides could be insulated
the Court, arguing that Justice Clar-
to notify both parents before obtain-
any interest," he said.
ing an abortion.
from knowledge about who was pay-
ence Thomas, a conservative named
Details to Be Worked Out
In a 7-10-3 ruling in which Judge
ing his legal bills. Moreover, these
Arnold was with the majority, the
But another aide said it was nearly
lawyers said Mr. Clinton would prob-
Eighth Circuit ruled that the law was
certain that Mr. Clinton would set up
ably be required to pay taxes on any
judge from Little
consistent with Supreme Court rul-
a defense fund if important details
payments as income.
ings as long as it had a provision
can be worked out, like who would be
"I'm not sure if legally you have to
Rock comes under
allowing the young woman to bypass
its trustee and whether the names of
do that, but clearly that would be an
notifying her parents by appealing to
contributors would be disclosed or
option," Mr. Lindsey said, referring
a judge.
kept secret from the President.
to the nondisclosure of contributors
criticism from some
The ruling was upheld by the Su-
Mr. Clinton has hired Robert S.
"They would not know who was con-
preme Court. The Court reversed his
Bennett, a lawyer who charges $475
tributing, so there's no way people
women's groups.
opinion in the Jaycees case.
an hour, to defend him against
could give in return for a favor."
charges by an Arkansas woman who
House and Senate rules allow law-
has said that Mr. Clinton made an
makers to raise money for defense
Support From Yale Classmate
unwanted sexual advance in 1991.
funds, and more than half a dozen of
to the bench by President George
Steven M. Umin, a Washington law-
Mr. Clinton had earlier hired David
them have established such funds,
Bush, is not an appropriate successor
yer who went to Yale with Judge
E. Kendall, whose firm charges in the
including Representative Dan Ros-
to the late Justice Thurgood Mar-
Arnold and who has advocated his
$400-an-hour range, to handle ques-
tenkowski, an Illinois Democrat, who
shall, the man he replaced.
nomination, said of the concerns of
tions about the tangled investments
is under investigation for improper
women's groups: "I think that's trag-
of Mr. Clinton and his wife, Hillary
use of his House expense account, and
But the most sustained lobbying so
ic. His opinions do not reflect any-
Rodham Clinton.
Senator Robert Packwood, Republi-
far centered on Judge Richard S.
thing but a lawyer-like approach to a
Although the couple reported that
can of Oregon, who has been accused
Arnold of Little Rock, Ark., chief
First Amendment problem."
their annual income was $293,000 in
of sexual misconduct.
judge of the United States Court of
Mr. Umin said that if one were fair
1993, the cumulative legal bills could
Appeals for the Eighth Circuit.
about Judge Arnold's jurisprudence,
prove daunting.
Judge Arnold has aroused the oppo-
"you would never come out thinking
At the same time, Gilbert K. Davis,
sition of some women's advocacy
this man is unfair to women in any
a lawyer for Mr. Clinton's accuser in
Court Bars Tax on Tribes
groups, especially those that promote
way." To demonstrate that point, Mr.
the harassment case, Paula C. Jones,
abortion rights, because of some deci-
Umin distributed a legal analysis of
said that she would be starting her
sions in which he has participated.
the judge's opinions that he termed
own fund to receive contributions to
SAN FRANCISCO, May 9 (AP)
At the same time, he has received
"of special concern to women."
help her proceed with the case. "Un-
The state cannot tax Indian tribes for
rich praise from several lawyers and
Judge Arnold's principal supporter
less there are substantial contribu-
off-track betting on reservations, a
judges for his intellectual prowess.
is Senator Dale Bumpers, an Arkan-
tions from outside, this case won't be
Federal appeals court ruled today.
The White House is especially sensi-
sas Democrat who has reminded the
able to be prosecuted as it should be,"
The law prohibits California from
tive to how Judge Arnold's nomina-
White House that the judge graduated
Mr. Davis said.
imposing a license fee, the equivalent
tion would be received. Officials say
first in his class both at Yale College
of a tax, on two Southern California
they are aware of potential problems
A $50 Contribution
and Harvard Law School.
tribes that sponsored betting on horse
in selecting an acquaintance of the
Judge Arnold's admirers include
Mr. Davis said he had already re-
races televised from outside tracks
President's from Arkansas to such a
William J. Brennan Jr., the retired
ceived an unsolicited $50 contribution
said the United States Court of Ap
highly visible post.
Supreme Court Justice for whom the
for Ms. Jones. "I hope there are oth-
peals for the Ninth Circuit.
One Administration official said
judge clerked, and Judge A. Leon
ers without who would come forward
George Foreman, a lawyer for the
the reluctance to name Judge Arnold
Higginbotham Jr. of the United States
to help her," he said.
Sycuan Band of Mission Indians, said
because of his ties to Arkansas is not
Court of Appeals for the Third Cir-
Some lawyers interviewed today
the ruling would substantially in
so much because of the appearance of
cuit, who is also retired.
said they could not think of a previous
crease the tribes' revenue from off
cronyism that has been suggested in
Both paid tribute to Judge Arnold
instance in which a President had set
track betting. He said the state has
published reports. Rather, the official
in a special issue of the Minnesota
up a fund to accept contributions to
collected $750,000 in license fees in Si:
said, it is because Mr. Clinton would
Law Review in which Judge Patricia
pay for nonofficial personal expenses,
months of off-track betting at th
not welcome the additional attention
M. Wald of the United States Court of
although some Presidents have lent
Sycuan reservation in San Dieg
on Arkansas by news organizations
Appeals for the District of Columbia
their names to charitable efforts and
County and in a year of betting at
that would inevitably follow the nomi-
Circuit told feminists that Judge Ar-
some former Presidents have accept-
facility run by the Cabazon Band (
nation as reporters*4ook into Judge
neld's positions were more favorable
ed fees from private organizations.
Mission Indians near Indio.
Arnold's history.
to them than the current Court's.
Money left in Richard M. Nixon's 1972
Presidential campaign fund, for in-
stance, was used to pay the legal bills
GIVE A CITY CHILD A VACATION
of Watergate defendants.
Mr. Lindsey said White House law.
SUPPORT THE FRESH AIR FUN
9
at court Friday, ensuring a lengthy
White House
legal proceeding on that front. Law-
yers in Washington say the custom-
ary fees for both Kendall and Ben-
Ponders Legal
nett are at least $400 an hour, and a
senior White House official said yes-
terday that the Clintons "are looking
Defense Fund
at a million dollars easy" in legal fees
if the legal work takes a year or
more, which is likely.
By Ann Devroy
A)
The Clintons' net worth is esti-
mated at between $700,000 and $1
Washington Post Staff Writer
million; their combined income in
After rejecting the idea earlier
1993 was about $293,000.
this year, President Clinton's advis-
Massive legal fees paid by public
ers are now researching how private
officials defending themselves in
"This is simply
donations could be solicited to help
special counsel and other probes
pay the president's legal fees, which
have become the norm in Washing-
a process for
aides say could easily top $1 million.
ton. Former attorney general Edwin
Bruce Lindsey, senior adviser to
Meese III got public reimbursement
setting forth
Clinton, said yesterday that lawyers
of nearly a half-million in legal fees
in the White House counsel's office
after a special counsel's probe ended
what various
with no charges being filed against
are researching "options" for obtain-
him. Former secretary of state
options [for
ing private donations to pay the
George P. Shults was reimbursed
team of lawyers retained to defend
$280,000 in legal fees during the
paying the bills]
the president in both the White-
Iran-contra special counsel probe.
water special counsel's probe and
Legal defense funds for politicians
might be."
the sexual harassment case filed
are common. In the Reagan adminis-
Bruce Lindsey
against him last Friday by Paula Cor-
tration, Labor Secretary Raymond
bin Jones.
Donovan had one, as did National
A presidential legal defense
Security Council staffer Oliver L.
fund-at least one that is publicly
North. Several House and Senate
acknowledged as such-seems to be
members also have such funds, in-
without precedent and even the pos-
cluding Sen. Bob Packwood (R-Ore.)
sibility has raised concern among
and Rep. Dan Rostenkowski (D-III.).
public interest groups that monitor
Congress has rules requiring report-
worked in a senior post in a prior ad-
how politicians raise and spend mon-
ing and disclosure of these funds,
ministration said yesterday that if
ey.
and members can-and do-use
Clinton's fund was established and
Ellen Miller of the Center for Re-
leftover campaign funds to pay per-
run by persons outside the White
sponsive Politics called the idea a
sonal legal costs.
House, made public disclosures, lim-
terrible one. "The economic inter-
Lindsey and others at the White
ited the size of the donation to
ests that fund campaigns will turn
House said yesterday that Clinton
$1,000 or $2,000 and banned large
around in a blink of an eye and fund
has made no decisions on whether to
corporate donations, the ethics prob-
this campaign, too," she said. "It's
have such a fund or how it should be
lems could be solved. "Obviously, it
just another envelope for them to
structured. Another senior official
is not very tasteful to have the presi-
put casi, into. Just because it is legal
said the president has authorized the
dent of the United States needing
does not make it right."
counsel's office to prepare a memo
expensive legal advice for a case like
to answer how such a fund could be
But others say this president has
this. It is tawdry. But I don't see
set up but that a debate over wheth-
already raised private funds for spe-
what's wrong with it if it is fully dis-
er it should be set up has not taken
cial personal needs-to build a jog-
closed."
place among senior advisers and the
ging track at the White House-and
Officials at various ethics groups
president.
the last two Republican presidents
and presidential history buffs could
Miller, of the Center for Respon-
solicited private donations for redec-
find no example of a presidential le-
sive Politics, said Clinton has really
no good ethical options if he seeks
gal defense fund, suggesting that is
FUND, From A1
help in paying the bills. Putting off
the case because no president before
orating the White House, buying
Clinton has been sued for acts that
payment of Bennett's bill until Clin-
new White House china and the like.
ton leaves office, for example, she
were alleged to have occurred be
Asking private donors for money
said, would raise ethical questions
fore he took office.
to help the president out, they sug-
since Bennett's firm does some lob-
But they suggest that just because
gest, is becoming an American tradi-
bying. Being beholden to a lobbying
there was no fund set up does not
tion. Unlike legal advice, the things
law firm, she and others said, is as
mean lawyers have not routinely
presidents have recently sought pri-
questionable as having big corporate
contributed to presidential legal is-
vate donors for have been left be-
or individual donors paying the pres-
sues by offering advice without fees
hind at the White House for future
ident's legal fees.
or with lower fees, or that before
occupants.
"It's a difficult dilemma and one
more stringent reporting require-
"This is simply a process for set-
without historic precedent," she
ments, party organizations or cam-
ting forth what various options [for
said.
paign organizations did not pay pres-
paying the bills] might be," Lindsey
Lindsey said that one option was a
idential legal fees.
said, "It is something that now needs
fund run by outside friends whose
Former president Richard M. Nix-
to be explored.'
donors were kept secret 30 Clinton
on, for example, paid thousands of
Lindsey salu las Fubruary that the
did not know who they are. But Clin-
dollars of Watergate and other relat-
White House would not consider a
ton's close associates would know
ed legal fees from leftover funds
legal defense fund and that the Clin-
and some of them, campaign funding
from his 1972 reelection campaign.
tons would be footing their OWD legal
officials say, would be in as good a
Courts have ruled such personal use
bills. But that was when Clinton's le-
position to provide access and other
is legal. But there was no Nixon le-
gal bills were from primarily one
"chits" at the president.
gal defense fund operating while he
lawyer, David Kendali, who is han-
One Republican lawyer who
was in office.
dling the president's interests in
connection with special counsel Rob-
ert B. Finke Jr.'s probe of White-
water, and related personal presi-
dential legal business.
When Jones began threatening to
sue Clinton on a civil claim of sexual
harassment, Clinton retained Wash-
TUESDAY. MAY 10, 1994 THE WASHINGTON POST
ington lawyer Robert S. Bennett and
also hired Little Rock lawyer Ste-
phen Engstrom. Jones sued in feder-
30
The Washington Times
NA I(
Hillary's keynote: It's all in the family
GW grads told
life's biggest duty
By J. Jennings Moss
THE WASHINGTON TIMES
Hillary Rodham Clinton yester-
day told George Washington Uni-
versity's class of 1994 that the big-
gest responsibility its members
face in life is building solid fam-
ilies.
In an address to the university's
4,800 graduates, Mrs. Clinton
linked family values to nearly ev-
ery aspect of the graduates' lives,
and said they served as the main
motivation for the administra-
tion's health care reform plan. The
commencent took place on the El-
lipse.
"Remember as you go forth, no
matter what a family unit looks
like today, the family remains the
essential ingredient in shaping our
later lives, and you have no greater
responsibility ahead of you," Mrs.
Clinton said.
Quoting Winston Churchill's re-
marks at a commencement ad-
dress, she said, "Never, never,
never give up."
The combination of graduation
Photo by Tracy A. Woodward The Washington Times
day and Mother's Day led the first
Hillary Rodham Clinton greets graduates at George Washington University yesterday on her way to the stage.
lady to reflect on the importance
of the family as she told the grad-
uates to think about how their
tions and of our individual and col-
have so many more choices to
ary doctor of public science de-
mothers never gave up on them.
lective roles in society.
It
[1968]
craft your own life than any gen-
gree from the university.
Even though she did not attend
was a time of great passion and
eration had," Mrs. Clinton said.
Others receiving honorary de-
hope and also a time of great social
George Washington as a student,
The only political element to her
grees yesterday were Roderic Hol-
dislocation," she said.
she said she lived on the Foggy
speech was a pitch for the health
lett Davison, a George Washington
Graduates today, she said, may
Bottom campus during the sum-
care reform plan that she crafted
professor emeritus of European
face a more uncertain world but
mer of 1968, when she was an in-
as head of President Clinton's
history; Elizabeth Drew, a political
also one with greater opportuni-
health care task force. She said
writer; John Hope Franklin, a pro-
tern in Washington.
ties.
America's families need the secu-
fessor at Duke University and
"Perhaps the most striking dif-
"What is marvelous and won-
rity of having health insurance
scholar of black history; and Thad-
ference between this time and 26
derful about coming of age in
and knowing it can not be taken
deus Alphonse Lindner, a G.W.
years ago is that we had very dif-
America today, despite all of the
away.
graduate and longtime university
ferent views of our social institu-
problems that we face, is you do
Mrs. Clinton received an honor-
supporter.
Whitewater shadows
Arkansas campaign
LITTLE ROCK, Ark. (AP) -
ing the Democratic nomination for
tional Whitewater story.
company. In March, Hale pleaded
Sheffield Nelson joked about go-
a seat in the Congress in which his
Mr. Nelson disputes talk of a
guilty in connection with fraud
ing "head-to-head with Hillary"
testimony has been sought.
backlash against him. "The only
against the Small Business Ad-
when he found his recent news
Whitewater a long list of ethi-
ones saying that are some of the
ministration and agreed to cooper-
conference competing with Hil-
cal and legal questions growing
Democrats who are really fearful
ate with investigators.
lary Rodham Clinton's nationally
from President and Mrs. Clinton's
of the Whitewater situation," he
Mr. Tucker has no primary oppo-
televised meeting with reporters
northern Arkansas real estate in-
said.
sition, has built a $1 million cam-
to discuss Whitewater.
vestment with Mr. McDougal -
However, Mr. Nelson's main pri-
paign fund already and remains a
"So does that mean you're going
has been a dominant topic in Ar-
mary opponent, state Sen. Steve
heavy favorite for November.
to talk about Whitewater?" a re-
kansas for months. It not only in-
Luelf, suggested that he'll have a
"It's kind of let's wait and
porter asked the Republican gu-
volves the first Arkansan elected
better chance than Mr. Nelson of
said Republican Party state Ex-
bernatorial primary candidate,
to the White House, but also many
attracting Democratic votes
ecutive Director Marty Ryall.
who lost to Bill Clinton in Arkan-
of his friends and political allies.
against Mr. Tucker.
GOP candidates use a theme that
sas' 1990 election.
It also sometimes has led to de-
Mr. Tucker, who was elected
Arkansas has been dominated too
"No! No!" Mr. Nelson replied
rogatory comments in Congress
lieutenant governor in 1990 and
long by a Democratic inner circle.
emphatically. His news confer-
and the national media about Ar-
succeeded Mr. Clinton after the
Tucker spokeswoman Max
ence was to unveil TV commer-
kansas ethics.
1992 presidential election, has de-
Parker said the governor expects
cials for his new campaign for gov-
"I will not make it an issue," said
nied wrongdoing while generally
to face Whitewater questions dur-
ernor and talk about crime and his
Mr. Nelson, a Republican National
keeping a low profile on White-
ing the campaign. "I think Nel-
millionaire business background.
Committee member. While claim-
water. There's been no Whitewater
son's record speaks for itself. He'll
There was no mention of White-
ing a "high-road campaign," he
news conference, and he's resisted
do whatever he thinks is neces-
water - the great unknown in Ar-
knows Whitewater will be kept
releasing tax and financial rec-
sary," she said.
kansas politics as the May 24 pri-
alive because of continued investi-
ords.
Meanwhile, former wheeler-
mary nears.
gations by federal officials, includ-
"All the focus has been on the
dealer McDougal wages a long-
Some think Mr. Nelson, dubbed
ing special prosecutor Robert B.
Clintons, and Gov. Tucker has been
shot campaign in the Democratic
the "Pied Piper of Whitewater" by
Fiske Jr.
astute and adept at keeping it off
primary for the congressional
critics, will suffer from a backlash
Mr. Nelson says his role in the
him," said Susan Power, an Arkan-
held by Republican freshman F
by voters who see the whole affair
Whitewater saga consisted of a
sas State University political sci-
Jay Dickey. Mr. McDougal suf
as partisan politics and Arkansas-
McDougal-requested, tape-re-
ence professor.
fered a stroke in 1986 and was di
bashing.
corded meeting in Little Rock in
Mr. Tucker didn't invest in
agnosed as manic-depressive.
Others predict incumbent Gov.
1992 in which Mr. McDougal
Whitewater but made other real
But he appears rejuvenated by
Jim Guy Tucker will be haunted by
railed about his dealings with Mr.
estate deals with Mr. McDougal
all the Whitewater attention, ever
his own dealings with Clinton part-
Tucker and the Clintons and subse-
and invested in a development fi-
though he remains under federal
ner James B. McDougal and con-
quently putting a New York Times
nanced through Mr. McDougal's
investigation for his running of the
fessed defrauder David L. Hale.
reporter in touch with Mr.
savings and loan. Mr. Tucker and
S&L, whose failure cost taxpayers
Mr. McDougal himself is seek-
McDougal. That led to the first na-
his wife also had loans from Hale's
$47 million.
108
The Washington Times MONDAY, MAY 9. 1994
iske expects to spend $2.6 million
Probe's cost will rise if it goes beyond September, results in any trials
SCRIPPS HOWARD NEWS SERVICE
$23,000 for supplies and materials.
The FBI also will pay for $34,000
nificantly less because their ap-
The cost for special counsel
The Whitewater-Madison probe
in equipment costs.
pointments are for less than the
Robert B. Fiske Jr's investigation
includes examinations of possible
According to the projected bud-
full period.
of the Whitewater-Madison affair
interference by several Clinton ad-
get, the probe's Washington office
Past special prosecutions have
will reach more than $2.6 million
ministration officials in reg.
will be the most expensive, with
proved expensive. In 1986 a probe
through September, according to a
ulatory investigations; the death of
$176,000 for rent, communica-
of Assistant Attorney General
projected budget prepared by Mr.
White House Deputy Counsel Vin-
tions, utilities and equipment. The
Theodore Olsen for possibly giv-
Fiske's office.
cent W. Foster Jr.: and complicated
Little Rock office is expected to
ing false testimony to Congress
The total could go substantially
real estate and other financial
cost $153,000, and the New York
cost $1.5 million and resulted in no
higher because Mr. Fiske has said
deals involving the Clintons and
City office is projected to cost
indictment.
the investigation may last 18
dozens of others in Arkansas.
$121,000.
That same year it cost about the
months. If any Whitewater-Madi-
Although taxpayers ultimately
Working in those offices will be
same amount to prosecute Mi-
son trails lead to court, the costs
will foot the entire bill, part will
Mr. Fiske and 10 other lawyers, an
chael Deaver, a former White
will grow even more.
come from FBI money rather than
administrative officer, a budget
House aide convicted of conflict-
The budget shows that nearly $1
a special Justice Department fund
analyst, an office manager, four
of-interest violations. And an in-
million will be spent on salaries
set aside for independent counsel
paralegals, and three staff assis-
Vestigation of the Reagan adminis-
and benefits for Mr. Fiske and his
investigations, according to the
tants. Earlier, Mr. Fiske said 25
tration's Housing and Urban De-
20 employees in the wide-ranging
budget breakdown, which was re-
FBI agents and financial analysts
velopment Department, which be-
probe that began Jan. 20.
quested by Scripps Howard News
would aid the investigation.
gan in 1990 and continues, has cost
Another $840,000 is earmarked
Service under the Freedom of In-
Personnel costs are expected to
nearly $14 million.
for computer costs and office ren-
formation Act.
total $983,000 for the eight months,
The price of the seven-year
ovations. The budget also includes
The FBI will pick up half of the
with Mr. Fiske getting an annual
Iran-Contra probe, which involved
$333,000 for travel. $277,000 for
rental costs and half of the esti-
salary of $107,300. Salaries for the
foreign travel and elaborate secu-
rent and related costs for three of-
mated $619,000 for computer
other lawyers range from $70,740
rity measures to protect classified
fices, $173,000 for equipment. and
hardware and software support.
to $103,000. Two will receive sig-
material, was about $40 million.
Ames' spying could hurt
for years, CIA chief says
By Bill Gertz
"We're always looking, and we always
THE WASHINGTON TIMES
will be looking, and it would be foolhardy
for the head of any intelligence service, or
CIA Director R. James Woolsey said yes-
for that matter any investigative agency, or
terday that Aldrich Hazen Ames' spying
the State Department, Defense Depart-
was "shocking" to the CIA and it could take
ment, to say there are no more moles," he
years to restore agency recruitment efforts
said.
in the former Soviet Union.
Deputy Attorney General Jamie
Mr. Woolsey, in a breakfast meeting with
Gorelick said yesterday that other spy
reporters and editors of The Washington
cases are under investigation.
Times, said that once the assessment of the
damage caused by Ames is complete, the
"We are following concrete leads and will
case "may be the most damaging in terms
continue to do so," Mrs. Gorelick said at a
of human agent operations vs. the Soviet
news conference.
Union or Russia."
Ames pleaded guilty to spying April 28
At least 12 agents working secretly for
and received a life prison term in a deal that
the CIA in Eastern Europe were compro-
calls for his cooperation in the damage as-
mised by Ames, who pleaded guilty to spy-
sessment. His wife, Maria del Rosario
ing for Moscow last week. Four were ex-
Casas Ames, pleaded guilty to lesser spy
ecuted. Others disappeared.
charges and will be sentenced in August,
Asked if it will take years for the CIA to
probably to five years in prison.
recover its ability to recruit secret agents,
Mr. Woolsey rejected Ames' court state-
Mr. Woolsey said, "In some senses, because
ment April 28 that CIA spying operations
it has been a shock."
are a "sham" and that the agency espionage
is a shocking matter that a CIA officer
branch is staffed with self-serving bureau-
would betray his country," Mr. Woolsey
crats.
said.
Ames blamed conservative U.S. policies
Sen. Malcolm Wallop, Wyoming Repub-
during the 1980s for driving him to spy as
lican and member of the Senate Intelli-
an expression of dissent.
gence Committee, said it will be at least 10
Mr. Woolsey said Ames' statement was
years before the CIA has its full ability to
an attempt to deflect attention from his
recruit foreign agents.
prime motivation for spying: the more than
"For a decade nobody is going to be will-
$2.5 million Moscow paid him.
ing to work for us without working for the
"I think he did whatever he could to try
other guy at the same time," Mr. Wallop said
to damage the CIA and American intelli-
recently.
gence in what he said," Mr. Woolsey said. "I
But Mr. Woolsey said the people who will
think it was a very contrived and self-
have to "think twice" about spying are "any
serving statement."
Americans or citizens of allied countries
Mr. Woolsey said CIA Inspector General
FRIDAY, MAY 6. 1994 The Bachington Times
who are employed in positions with secu-
Frederick Hitz is investigating whether
rity clearances who think they can pick up
CIA friends of Ames' late father, Carleton,
some extra money by being employed on
who worked for the agency in the 1960s and
the side of a foreign or hostile intelligence
70s, protected the spy.
service."
"I hope that doesn't turn out to be the
"One major lesson of the Ames case is
case," he said. "If it does turn out to be the
even if it takes a long time, and even with
case
that's something I will take strong
an intelligence service that uses very good
action on."
trade craft such as the Russians do, even-
Mr. Woolsey declined to comment on spe-
tually we are going to catch the moles," Mr.
cific cases of agents who were executed by
Woolsey said.
the Russians because of Ames' spying. In-
The CIA director would not rule out the
formation about the lost spies may be made
possibility that other moles burrowed into
public when the damage assessment is
the U.S. or foreign governments.
complete, he said.
Fiske Subpoenas White House for Data
On Foster, With Focus on Nussbaum Role
By JEFFREY H. BIRNBAUM
emphasized, "I don't think there's any
Staff Reporter of THE WALL STREET JOURNAL
suggestion that Bernie [Nussbaum] de-
WASHINGTON - Whitewater Special
stroyed anything."
Counsel Robert Fiske has subpoenaed the
Mr. Nussbaum has steadfastly de-
White House for documents concerning
fended his actions after Mr. Foster's
Vincent Foster, the deputy counsel who
death. He has said that he removed noth-
committed suicide last summer.
ing from Mr. Foster's office the night of the
The subpoena appeared to focus largely
suicide and distributed his files properly,
on the activities of then-White House Coun-
some to the Clintons' personal attorney,
sel Bernard Nussbaum, who entered Mr.
some to federal investigators, and some to
Foster's office the night of his death and
the Foster family.
later divided up and distributed the files
Mr. Fiske is expected to report that Mr.
from the office.
Foster's death July 20, 1993, was a suicide.
The White House said It will comply
Mr. Klein said the subpoena appeared to
with the subpoena fully.
concentrate on activities in the White
The subpoena, which the White House
House after that death. Mr. Fiske is known
received yesterday morning, seeks all doc-
to be trying to wrap up the part of his
uments or communications written to or
investigation that relates to the Foster
relating to Mr. Foster. But Joel Klein, the
suicide.
current deputy counsel, said the special
In particular, the subpoena seeks infor-
counsel's office was zeroing in on docu-
mation about documents taken from and
ments that were removed from Mr. Fos-
kept in Mr. Foster's office, documents in
ter's office and Foster-related documents
the counsel's office and safe related to Mr.
that were kept in a safe in the White House
Foster, and data on Mr. Foster's computer.
counsel's suite of offices.
It also seeks information about any beeper
Specifically, Mr. Klein said, the special
or paging device that Mr. Foster used:
prosecutor wants to know "where the
Mr. Klein said the documents would be
documents were. where they went to, and
turned over promptly, as early as next
what happened to them." But Mr. Klein
week.
70
THE WALL STREET JOURNAL FRIDAY. MAY 6, 1994
Panel: Extend
school year
First step in school reform
is 'more learning time'
By Dennis Kelly
USA TODAY
Al
Sins of emission
A federal commission today
will call for nearly doubling the
1 hour's
Equals driving
time students spend in "core
use of:
academic courses" - and
Leaf blower
Whitewater
even changing the length of the
school year if that's what it
34
tab $300,000
takes to help kids learn.
Lawn mower
That likely means a school
11½
year longer than the traditional
per month
180 days, says Milton Goldberg,
Weed trimmer
executive director of the Na-
21
By Dennis Cauchon
Al
tional Education Commission
Chain saw
USA TODAY
on Time and Learning
B
"If reform is to take hold, the
Scandal isn't cheap.
6-hour, 180-day school year
Source: EPA
USA TODAY
Whitewater special counsel
should be relegated to muse-
Robert Fiske Jr. is spending
ums," he says.
more than $300,000 a month to
Congress created the com-
Clean up air,
get to the bottom of the White-
mission partly out of concern
water controversy.
over the longer school years of
That's more than the 232-
lawn mower
economic competitors like
acre real estate development
Germany, with 200 to 225 days,
cost in 1978 when President
and Japan, with 230 days.
makers told
Clinton and Hillary Rodham
The report found the time
Clinton became 50% owners.
kids devote to core academic
By Rae Tyson
Fiske will spend $2.7 million
courses such as English, math,
USA TODAY
Al
in his first eight months, says a
science and history averages
budget released by his office.
three hours a day less than
The quest for clean air is
Critics complain that special
half their international peers.
headed for the yards, gardens
prosecutors are too expensive.
"If we want excellence for
and golf courses of suburbia.
Iran-contra special prosecu-
our children, we need more
The EPA announced rules
tor Lawrence Walsh spent $37
learning time in school, at
Wednesday that will require
million in 6½ years - or an
home and in the community,"
cleaner-burning lawn mowers,
average of $475,000 a month -
says Education Secretary Rich-
chain saws, golf carts, leaf
including money on first-class
ard Riley.
blowers, generators and a host
air travel and luxury lodging
The commission recom-
of other small engines.
"Fiske is spending a lot of
mends students spend 5 1/2
That's because the USA's 89
money, but he sounds like a
hours a day in core subjects.
million off-road engines cause
paragon of fiscal responsibility
But how? "Reclaim the aca-
10% of ozone and carbon mon-
compared to Walsh," says Da-
demic day," says Goldberg,
oxide pollution, says the Envi-
vid Keating of the National
noting it's filled with nonaca-
ronmental Protection Agency.
Taxpayers Union.
demic requirements: "personal
EPA says the average 1990
Fiske's biggest expense: sala-
safety, consumer affairs, AIDS,
model car would have to be on
ries for his 21-person staff.
family life, driver's training."
the road 11½ hours to produce
Five attorneys will earn
Many are worthwhile topics,
as much pollution as a lawn
more than $100,000 a year.
but communities should offer
mower in one hour.
Two will make $52,000 for
them after the "academic
"The small gasoline engines
working a half-year.
day," he says. The report also:
that all of us use in our yard
Highest paid: Fiske himself.
Calls for more time for
and garden work are a signifi-
He'll earn $107,300 a year
teacher training.
cant source of air pollution,"
the same as a U.S. attorney.
Attacks the premise that
says EPA chief Carol Browner.
Budget breakdown, 4A
all kids need the same amount
Although some engine mak-
of time to learn: Some need
ers are concerned about meet-
more than 180 days, some less.
ing the new emission stan-
The report concedes the rec-
dards, one company is ready.
ommendations will cost mon-
"It isn't going to cost us one
ey, but doesn't say how much.
red cent," says Jim Hewitt of
The commission has no pow-
American Lawn Mower Co. in
er to change education, which
Shelbyville, Ind., maker of
THURSDAY, MAY 5, 1994 USA TODAY
is still largely under state and
push lawn mowers since 1895.
local control.
The EPA plan will be imple-
But Goldberg led research
mented in two phases, begin-
on the landmark 1983 report, A
ning in 1996. Estimated cost in-
Nation at Risk, which helped
crease: $5 per mower.
the push for tougher academic
Motorcycles, boats and
requirements. Risk also called
snowmobiles may be targeted
for longer school years, and lit-
later. The new rules won't af-
tle happened.
fect equipment already in use.
"It's the hardest nut to
"We're not making you turn
crack," says Goldberg "It's
in your lawn mower if it
more tied up with tradition
doesn't meet the standard,"
than anything else."
says EPA's Mary Nichols.
14A
THURSDAY, MAY 5. 1994
Fiske
during the four-month investi-
Fiske's
poenas issued by Fiske show he
gation.
is including more than 200 peo-
Budget documents offer no
1994 budget
ple and entities involved in land
Continued from Page 1A
new hints of the scope or
deals and loans shepherded by
timetable of the Whitewater in-
Fiscal year
McDougal's Madison Guaranty
the Rock. Washington D.C., and
vestigation.
813,000
333,000
Personnel
Travel
Savings & Loan.
New York.
"I have a one-year lease on
277,000
Fiske has confirmed he is in-
compensation
"There's always the problem
my apartment in west Little
Rent,
vestigating other ventures fi-
of finding the right mix of hav-
Rock. When I took it out, I knew
communications
nanced by Capital Management
it could be extended," Fiske
&utilities
ing enough people to do every-
Services Inc., which was oper-
thing that has to be done with-
said.
ated by former Pulaski County
out having too many so they get
To get a better deal, Fiske
Municipal Judge David L Hale.
in each other's way," Fiske said.
signed a three-year lease for a
Hale was indicted along with
"I think we just add lawyers as
first-floor office complex at 2 Fi-
Eugene Fitzhugh and Charles
we see the demands of the in-
nancial Centre. The FBI runs its
Matthews and reportedly was
vestigation."
local headquarters from the sec-
172,000
linked to defrauding the Small
Responding to Freedom of
ond floor of the west Little Rock
Equipment
Business Administration by fun-
Information Act requests filed
office tower and has split the
170,000
neling $800,000 to Capital Man-
by the Arkansas Democrat.
$90,795 Fiske has spent thus far
840 ,000
Benefits
agement through a series of
Gazette and two other news or-
on rent, communications, and
Computer-
transactions. Hale has pleaded
ganizations, Fiske reported he
utilities.
30,000
related,
spent $1,170,008 between Jan.
He will spend about $983,000
other
Transportation
guilty and is cooperating with
services
of things
Fiske.
24, when he arrived. and April
for salaries by the end of Sep
23,000
Fitzhugh and Matthews are
21. He estimated he will spend
tember. Fiske's annual salary of
Supplies
scheduled to be tried on con-
$2,655,000 by the end of the fed-
6,000
$107.300 tops the office list. He
& materials
Printing &
spiracy and document falsifica-
eral budget year in September.
and other out-of-town staff mem-
reproductions
tion charges June 20, unless a
Wednesday's announcement
bers receive a partial rent sub-
federal judge grants Fitzhugh's
expands Fiske's staff to 11
sidy under his nine-month,
Arkansas Democrat Garofts
request to return his case to U.S.
lawyers and 11 researchers and
$333,000 travel budget.
Attorney Paula Casey in Little
assistants. The confirmed news
Fiske also said he stopped re-
said. "People who came from
Rock.
reports that he added an un-
ceiving regular income from the
private firms are making quite a
Fiske named James R.
specified number of agents and
private law firm Davis, Polk &
bit less than they made."
Reeves, 67, Wednesday as spe-
financial analysts to the 25 as-
Wardwell when he took a leave
Fiske was appointed by At-
cial trial counsel on the case.
signed him by the FBL
of absence in January. But he
torney General Janet Reno this
He is a former acting federal
In all, Fiske's tab will run
said the firm may pay him from
year without time or budget lim
prosecutor and a member of the
about $296,100 a month a
a division of partnership prof.
its to investigate the controver
Caruthersville, Mo., law firm of
third less than the monthly av-
its earned last year.
sy surrounding Whitewater De-
Ward & Reeves.
èrage of Lawrence Walsh, who
Associate counsels in the spe-
velopment Corp., the ill-fated
He also appointed Gabrielle
concluded his investigation of
cial prosecutor's office receive
Arkansas land development
R. Wolohojian, 33. a member of
the Iran-Contra affair in Janu-
salaries ranging from $70,740 to
formed by President Clinton,
the Boston law firm of Hale &
ary after spending more than
the $103,000 paid to William S.
first lady Hillary Rodham Clin-
Dorr. to work on general legal
seven years and $37 million.
Duffey and Carl J. Stich Jr. Staff
ton. and James and Susan Mc-
matters for the independent
Fiske said he studied Walsh's
salaries range from $5,353 for a
Dougal in the early 1980s. Sub-
counsel.
investigation and that of other
New York part-time worker to
special prosecutors and decided
the $61,600 paid Gregory
to start small.
Lefever, chief budget analyst.
By far the biggest single ex-
"1 think the rule is nobody
pense so far has been more than
else can get more than that,
$540,000 in computers and soft
Fiske said of his salary.
ware used by Fiske's investiga-
"I basically tried to take pco-
tors to sort and match electron-
ple who came from government.
le copies of land records and fi-
and I just kept them at what they
nancial documents acquired
were making before," Fiske
NATIONAL NEWS
Senate wraps up debate
Records of late Clinton lawyer
on bill to limit gifts
sought in Whitewater probe
By ANGIE CANNON
under the direction of fo. ner White
Hera'd Washington PLACEL
House counsel Bernard
May mean end to free lunches, junkets
WASHINGTON Whitewater
Numberm was forced 10 res 2n a early
special prosecutor Robert Fisk: 183-
March over chical a isstops arking
poessed more While House records
BYDAVID HESS
tion, has "Dorsoned" the air
from the Whitewater DC-0 overy.
Herald Washington Bureau
between voters and their clected
The siday in his investigation of events
Klein said he does not believe this
WASHINGTON - A bill that
surrounding the Licide of ceputy
officials.
subpoant relates 0 the question of
White House counsel Vixeal Foster.
would impose strict limits on free
"When we and our families are
whether Foster actua is 30m ni lied sai-
The White House received a "com-
meals. Cree tickets, free trips and
beneficiaries of the largoss of the
** an area that F she has explo e1
prehensive" subpoena Thurs more-
other gifts to members of Con-
lobbirs and CO' porstions, WC
through forensic CV darce. Foster's
contribute to a lack n: confidence
ing for "any and all documents and/or
gress was inching Thursday night
body was Found in a Virginia park Inst
in this institution." ne said.
communications written by, sent to or
toward passage in the Senate.
July 20.
All gifts from lobbyists and
Defore voting On the stricter
referring or reating to Vincent W. Fcs-
ter Jr."
Kleir. saic the While House will
those worth more than $20 from
sift bans, the Senate rejected 2
everynne else would be banned.
Joel Kein. who replaced Foster as
copperate fully with the subpocns He
hid by three senior members tol
except gifts from family 01 close
depert counsel. said he believes Fiske
said he experts to two over some
righten existing limits on gifts but
is using the su poers in a search for
records by next Teladay
friends.
:flow lobbies 10 continue paying
The proposal also would put a
for recreational junkets. enter-
information or the disposition of files
Also Thursday, Fiske said he expects
tainnent and expensive meals.
in Foster's office. A nem XI of White
nalt to most privately paid jun-
to spend $2.6 m flion on his nvestige.
kets for members to vacating
That propossi would have low-
water related files are known to have
lion rough Sep: 3C. So far. he his
resorts. including charity golf,
cred the existing gift limit to 575
been removed from the office.
speat million on the invest galion
connis or ski outings.
from $150 per gift and to $100
Files were removed Trom Foster's which began or Jan. 24. Fisce's annual.
A similar bill has already
from $230 from: the same vource
office immediately after his suicide 12 are is listed as $107.300
passed the House. along with
per year.
new legislation to require lobby-
" also would have required
lots to disclose whom they con-
disclosure of lubby-paid trips
act. what They talk about and
before they occurred. And it
how much they spend to intlu-
would have directed the Ethics
ence members
Committee in recommend expul-
The House and the Senale will
sion of any meinbar found in vio-
resolve their differences 10 one
lation of Senate rules on three
ference before sending the legis-
occasions - similar to the
lation to President Clinton, who
three-time-loser rule in criminal
Pas promised to sign it.
law that requires life imprison-
One of the bill's sponsors, Sen
ment for repeat felons
Miami Herald
Fish Lautenberg, D N.I., said
Backed by Sens. Mitch
the stakes are high.
McConnell, R.Ky., J. Benness
"It fundamentally changes the
Johnston. D-La., and Minority
5-6-94
relationship between lohbying
Leader Rob Dole. R-Kan., that
and members." be said of the
amendment WDE thrned down by
ban. "It fundamentally alters the
2 59-39 vote. Florida's senator-
"*2) we do business to the culture
split on the less-tringent pro-
in which we live."
priso:, with Republican Connie
Sen. William Concn. R-Maine,
Mack voting for it Deninerat
another spunsor, said: "The pub-
Bob Orsham voting against.
the believes, rightly or wrongly.
What the McC ownell sinend-
that they are not being well-
ment does is adopt a double stan
served by their elected officials.
dard. Levin said. "I ne issue is.
that their basi interests are Jub-
whether we are going to vote to
verted by the giving of gift, to
continue to accept mrais and
members of Congress. The feel-
tickets and recreational trips
ing is that the inability of Con-
from lobbyists. when the execu-
Sless to address the most entiod
live branch has already said no
problems that the parion faces is
more
4 direct result of who recembers
McCunnell, vice chairruan of
go to lunch with."
the ethics panel, said enforcing
The chief sponsor, Sen. Carl
the gift ban on senstors would
Levia D-Mich., said this percep-
swared the committee in minu
Liae.
Close vote left Florida members split
should assa all weapons bc cas-
By PAUL ANDERSON
Horald Washingt 8 wear)
FLORIDA VOTE
ily ava 12b e to CTIN imals?"
WASHINGTON Mem-
Miami Rep oblicen licans
bers of the Florida delegation
Here 8 how the Florida
Ros-Lehumen also voted in
were deeply diviced rs the
delegation voted us the
favor of 11 e ban, just as the had
assault wapcrs bas, and two
House approved a DER on
support ed the Brady bill. "Tm
late decisions by wavering
19 types of and weap-
in laves of as hing that will
Republican compressmen
cns
set weapo IS out of the hands of
reflected the cliffhanger malure
DEMOCRATS FOR:
criminals," ste sa d.
Bacc' us, Brown, Deutsch,
Democrat c Rep. Peter
of Le voc
Uncommitted 10 the lest day,
Gibb ns. tasiings, John-
Deatsch or Landerhill was
Miski Republican Lincoln
stor, /sek.
more enthusias c. He said the
Diaz-Balart vated agains. the
DEMOCRATS
ban "is good for America. The
xa. disappointing spensors
AGAINST:Hullo, Peter-
people won Everyone 1 have
such as Altorney General Janet
scn, Thurmas
spoken 10 in law cafor:ament
Reno who had lubbied him.
REPUBLICANS FOR:
has told me tha. there is Γo
They had hoped hc would
Mier, Res-Lant-nen,
legitionate pm pose for (ssaul!
repeat his vote al last fall in
Shan, Young
weapons - 10 tunting par-
favor of the Brady bill wh ch
REPUBLICANS
pose. no el sporting purpose.
established & five-day waiting
AGAINST: Bliraids Can-
"The only thing surpr sing to
period for handg purchases.
aty, Diaz-Befert. Fewler,
me, quite didly, WES the
But Diaz-Balart said the
Goss. Lewis McColl.m.
closeness of Inc vote [215-214]
assault weapons ban "is not
Mica, Steems.
With crime like if is, in x that
serious crime-fighting legisls.
amozing
tion worthy of support. he
Miramar Democrat Alcee
called it "press release
To: the boa, even though he
Hastings, who so voied yes,
window dressing It is ficti-
said it represents "a false
said the b.v does no w far
ticus control legisls-
promise.' 1 don't thir this is
enough.
For the people pro-
tier
0 do INNC good, but the
testing the be 4 such as ant-
Fort Lauderdale Republican
problem is one 0: perception.
jers, my recollection is that you
E. Clay St an reluctes y voted
The bate has teen framed as,
do no: assa #: a duck
152
bc-whitewater times - a1746
(ATTN: National editors)
White House Agrees to Turn Over Foster Documents to Fiske (Washn)
By James Risen= (c) 1994, Los Angeles Times=
WASHINGTON The White House agreed Thursday to turn over to Whitewater
special counsel Robert Fiske all of its documents connected to Vincent Foster,
the deputy White House counsel whose death last July was ruled a suicide.
Deputy White House counsel Joel Klein said he believes Fiske now appears
to be investigating the actions of White House officials, including then-White
House counsel Bernard Nussbaum, in the aftermath of Foster's death of a
gunshot wound.
Klein told reporters he believes that Fiske, who has a broad mandate to
investigate the Whitewater scandal and other related incidents, has completed
his investigation into Foster's death, and has concluded that it was a
suicide.
If Fiske does conclude in an upcoming report that Foster killed himself
with a gunshot wound to the head, he will confirm the verdict reached by the
U.S. Park Police, which conducted the initial investigation after Foster's
body was found in a park in Virginia outside Washington.
Fiske's comprehensive subpoena received by the White House Thursday covers
all documents, memos, computer disks, and even any paging device or beeper
used by Foster or related materials held by his assistant, Deborah Gorham. It
also asks for documents relating to Foster that may have been kept in the safe
of Nussbaum.
Klein made it clear that he believes Fiske wants the documents as part of
a review that deals with the distribution of Mr. Foster's files by
Nussbaum.'
Controversy has swirled around the actions of Nussbaum and other White
House officials ever since it was revealed that White House officials had
removed files from Foster's office soon after his death.
Investigators have raised questions about a search of Foster's office on
the night of his death that was conducted by Nussbaum and White House
officials Margaret A. William, the first lady's chief of staff, and Patsy
Thomasson, a longtime Clinton associate. Secret Service officials secured
Foster's office the next day.
A 2&1/2-hour session that took place two days after the death raised
concerns as well. At that time, Nussbaum sorted through his deputy's papers in
the presence of officials from the U.S. Park Police, the Federal Bureau of
Investigation and the Justice Department. Nussbaum sorted the documents into
three piles files related to official government business, Foster's private
papers and the Clinton's personal documents.
The White House later turned over Foster's personal materials to his
family attorney, Jim Hamilton, and the Clinton's papers, including documents
related to Whitewater, to the Clinton's attorney, David Kendall.
Kendall has since turned over Whitewater-related documents to Fiske's
office, but has not yet received a broader order covering all the Clinton
personal papers given to him after Foster's death. Hamilton refused to comment
Thursday when asked if he had received
a new subpoena.
Nussbaum's actions during the investigation of Foster's death raised
allegations that the White House was trying to hold back relevant information
from law enforcement investigators, charges the White House denied.
Nussbaum resigned under fire in March as the Whitewater controversy
intensified. Klein said all of Nussbaum's files were still at the White Hou e
and relevant materials from them would be turned over to Fiske. It was not
known, however, if Nussbaum will receive a separate subpoena.
Klein said he has not heard directly from Fiske about the status of his
investigation of Foster's death. But he noted that there is nothing in the
subpoena suggesting that he is looking at the question of Foster's suicide.
He added that I believe the forensic evidence on Foster's suicide has been
dealt with separately.
**** filed by:LAWP(-- on 05/06/94 at 02:16EDT ****
**** printed by:WHPR(162) on 05/06/94 at 03:06EDT ****
Shallow Reading of the Cuban Democracy Act
Evidently, Myra MacPherson did
forms of communication with the is-
It is worth giving Castro the money if
not read the Cuban Democracy Act of
land.
we can successfully expose the Cuban
1992 before assaulting it in a one-
For example, looser prohibitions on
population to the ideas of the free
sided Outlook piece on April 17.
humanitarian donations led to a nine-
world.
Her article failed to reflect both the
fold increase in the distribution of food
It calls for expanded direct mail con-
intent of the act and its substance.
and medicines to the poorest of the
tacts provided that Castro reciprocates
Contrary to what Ms. MacPherson
poor in Cuba in the first year since the
(which he has not).
writes, the Cuban Democracy Act of
law was enacted. In fact, almost $33
It eases U.S. travel restrictions to
1992 did not just tighten the economic
million worth of humanitarian aid for
allow human rights activists, journal-
embargo on Cuba. In fact, the act
the Cuban people has been licensed by
ists, family members and academics to
contains a two-track approach. First, it
the U.S. government in the past 18
visit Cuba, provided they demonstrate
months.
does tighten the 30-year-old embargo
they are going for legitimate activities
by extending it to affiliates of American
The Cuban Democracy Act's licens-
and not to spend tourist dollars on the
corporations. The intent was to deny
ing requirements prevent American
island. More than 15,000 American
food and medicine deliveries from
citizens and residents traveled legally
Fidel Castro the foreign exchange that
showing up in tourist hotels for sale or
to Cuba last year. Furthermore, more
he needs to compensate for the loss of
re-export. But legitimate humanitarian
than 27,000 Cubans visited the United
Soviet aid. Castro would use such fund-
relief organizations, including the arch-
States in 1993, including large num-
ing to stave off long overdue economic
dioceses of New York and Boston and
bers of athletes, academics, scientists
and political reform.
Catholic Relief Services, have made
and religious leaders.
But Ms. MacPherson's claim that
significant contributions within the re-
Ms. MacPherson should recognize
the Cuban Democracy Act restricts
quirements of the law.
that suffering in Cuba is not a result of
travel, food and medicines is false. On
The law also promotes liberalized
U.S. policy, but the result of a totalitar-
the contrary, the law contains positive
communications in a variety of ways:
ian regime that continues to cling to a
measures for the restoration of many
It calls for telephone linkages with
system of government that cannot
forms of humanitarian assistance to
Cuba. While we realized that this would
work. Indeed, if Mr. Castro wants the
Cuba and seeks to reopen several
mean increased foreign exchange for
embargo to end. he need only call for
Cuba, we decided to take the gamble.
free and tair elections to take place in
Cuba.
ROBERT G. TORRICELLI
THURSDAY,
MAY
5,
1994
THE WASHINGTON POST
U.S. Representative (D-NJ)
Washington
JACK ANDERSON and MICHAEL BINSTEIN
Lott's Glass House Fronts on Whitewater
T
he silence of Sen. Trent Lott (R-Miss.) on
been hovering over" him. And when Janet Reno was
the Whitewater scandal is a case of the
nominated to be attorney general, Lott aides
Republican attack dog that didn't bark.
complained that they didn't have enough resources
What Lott hasn't said speaks volumes. In this
to investigate all of the dirt they had collected on
case, Lott is the lone member of the GOP leadership
Reno.
to be tongue-tied on Whitewater. The senator who
During the presidential campaign, Lott lashed
once served as designated dirt-digger on the Clinton
away at Clinton over his draft status: "Bill Clinton
administration told us he "understands" the
will not come clean with what's really involved here.
president's predicament.
Did he try to avoid it? What is this reserve thing?
Lott's transformation from pit bull to pussycat, at
What was the word he used about the draft in
least in terms of Whitewater, seems related to some
that letter? The most unbelievable thing I've ever
skeletons rattling around in his own closet.
seen, that letter he wrote."
As we reported recently, in 1984 Lott pressured
Lott told us he now empathizes with President
NASA officials to award a government contract to a
Clinton's plight-and compared the attacks on the
company owned by a political friend named Isadore
First Family to the aspersions made about his
Hyde. Then Hyde put Lott's 71-year-old mother on
mother.
the company's payroll with a company car and
"She's 80 years old [now] and I really feel like
lenient hours. According to grand jury testimony,
there have been a lot of efforts to try to get at me
Hyde said he had put Iona Lott on the payroll
through my 80-year-old mother and I don't think
because "she could open doors that would not be
opened otherwise, and that she was his connection
that's very good," said Lott. In addition, Lott likened
to Washington as she could talk to [then]
his own situation to Bill Clinton's defense of Hillary
Rodham Clinton.
Congressman Lott when [Hyde] could not reach the
Congressman."
"You know, he did that during the campaign when
NASA investigators also uncovered that Hyde
Jerry Brown raised allegations about Whitewater,"
and his wife billed NASA for $186,000 worth of
he said. "I remember that President Clinton got
unallowable expenses they diverted for personal
pretty aroused about it, and I think he pretty well
use. Last year, the Hydes were sentenced to prison
defanged the issue. You can understand why
for conspiracy to defraud the government.
somebody would get aroused about that."
NASA investigator John Batson told our associate
This hardly sounds like the same Lott who once
Ed Henry that when he started pursuing allegations
said this about President-elect Clinton: "When
that the Hydes also used NASA resources to do
Clinton does right, you commend him. When he
political work for Lott, NASA Inspector General Bill
does bad, you bash his brains out-and nobody can
D. Colvin abruptly pulled the plug. Whether Colvin
charge disloyalty." Then just days after Clinton's
protected Lott is one of the questions now under
inauguration, Lott added: "I think the honeymoon is
investigation by a special unit of the General
over. I think a week is long enough, anyway."
Accounting Office.
When we pressed Lott on specific details about
"It's not by design because of [the Hyde
his relationship with Hyde, he invoked Clinton to
allegations]" that he's been quiet, Lott insisted. "It's
explain memory lapses. "Again, it's like Clinton,"
just that I haven't had a role to play or a knowledge
Lott said. "All of this was 15 years ago. A lot of the
from which to comment [about Whitewater]."
questions that are involved with [Clinton] date back
That has never dissuaded Lott from
to 1978 or 1979. You're asking me about things
scandal-mongering in the past. He hounded Ronald
that happened 11, 12 or 13 years ago. I don't even
H. Brown when he was appointed to be secretary of
know how long ago it was."
commerce, saying that Brown's past lobbying
Lott's low-key approach to Whitewater, however,
activities "perhaps send the wrong message." After
may be part facade. GOP sources told us Lott is
Lott decided that Brown had finally resolved some
cheerleading the Whitewater investigation from
potential conflicts of interest, he declared that
inside the cloakroom. "Lott's been encouraging us,"
Brown had "helped remove a cloud that might have
explains one Republican lawmaker.
BC-AR--McDougal, 0410
McDougal Challenges Republicans to Whitewater Debate
Eds: First moved for Sunday AMs
AP Photo LR101
jsdbstffls
By JULIE STEWART= Associated Press Writer=
LITTLE ROCK, Ark. (AP) President Clinton's partner in the Whitewater land
development deal ha S challenged three Republican congressmen to a nationally
televised debate.
James McDougal of Arkadelphia, a Democratic candidate for Congress, said
Saturday he wanted to debate Clinton's leading Whitewater critics: Rep. Jim
Leach of Iowa and Sens. Robert Dole of Kansas and Alfonse D'Amato of New
York.
will show the American people what bums and phonies these Republicans
are, McDougal said at a news conference at his lawyer's office.
He should debate his congressional opponent, said D'Amato spokesman
Frank Coleman. Mr. McDougal will be able to tell his story at Senate
Whitewater hearings.
D'Amato said Friday that Senate Republicans will demand a vote this week
on a resolution to specify a starting date for Whitewater hearings.
McDougal also said he would sue Leach for libel and defamation of
character. Leach spokesman Joe Pinder declined comment. A spokesman for Dole
could not be immediately reached for comment Saturday.
Special counsel Robert Fiske Jr. is investigating Whitewater Development
Corp., which Bill and Hillary Rodham Clinton co-owned with McDougal and his
former wife, Susan. Fiske's probe includes allegations that money from the
McDougal-owned Madison Guaranty Savings and Loan of Little Rock was improperly
funneled into Whitewater or into a Clinton gubernatorial campaign fund. Grand
juries in Little Rock and Washington have heard testimony in the probe.
Madison failed in 1989 at a cost to taxpayers of at least $47 million.
McDougal and the Clintons say they did nothing improper.
In April, McDougal had asked Leach to apologize to him, Clinton and the
people of Arkansas after Leach said Whitewater cost taxpayers money by
contributing to the failure of Madison Guaranty.
Leach refused, saying he is obligated to ensure accountability for
taxpayer losses at failed thrifts.
McDougal said his suit against Leach would be filed May 12. He said he
would seek legal fees and $1 for each of Arkansas' more than 2 million
residents, with the money going into the state treasury.
McDougal, state Sen. Jay Bradford of Pine Bluff and state Rep. John
Parkerson of Hot Spring are running for the Democratic nomination in Arkansas'
4th Congressional District. Incumbent Jay Dickey of Pine Bluff is unopposed in
the May 24 Republican primary.
**** filed by:APE-(AR) on 05/02/94 at 00:37EDT ****
**** printed by:WHPR(JEL) on 05/02/94 at 09:07EDT ****
PM-Rose Under Siege, 1016
Inside a Staid Firm Shaken by Whitewater Barrage
Eds: Also in Monday AMs report; moved in advance April 27 as b0318
AP Photo NY381 of April 28
By DAN SEWELL= Associated Press Writer=
LITTLE ROCK, Ark. (AP) Past the conservative brick exterior into a
contemporary style lobby. Through corridors peppered with Arkansan paintings.
Down to a swimming pool built when the building was a YWCA. Then, out for a
view of Hillary Rodham Clinton's former law office.
A pause to point out the former office of the late Vince Foster.
Then, a tight smile.
These are the steps the people were praying on last weekend, said
Ronald M. Clark, managing partner of the Rose Law Firm, recalling a recent
demonstration by anti-Clinton protesters. ``I think they chose us because they
thought they would get TV coverage.
Which they did.'
These days, the attacks come from many directions at the staid law firm,
which calls itself the nation's oldest west of the Mississippi. It traces its
roots to 1820 territorial days and its name to a former American Bar
Association president, Uriah M. Rose.
Proud of its long history and tradition, as the Rose firm says in a
brochure, it is shaken by the Whitewater barrage.
Virtually all the work done here by Mrs. Clinton and former partner Webb
Hubbell, who last month resigned as the Justice Department's No. 3 official,
now is under scrutiny. Questions also linger about the apparent suicide of
Foster, a Rose partner who was deputy White House counsel until his death last
July.
The firm has been defending legal work going back a decade and trying to
disprove allegations that it shredded sensitive documents. It also grasps for
normalcy as several employees leave to testify before a grand jury and federal
investigators arrive to work in some 10 rooms filled with relevant documents.
Clark, 39, a tax attorney, said Rose is cooperating fully with regulators
and special prosecutor Robert Fiske, who are probing the broad sweep of
allegations that grew from President and Mrs. Clinton's Whitewater land
venture with the head of a failed savings and loan.
Some of the exposure has been painful.
The ones that upset more than anything concern the reputation of the
firm, where they're attacking our credibility and our truthfulness, Clark
said. ``Our reputation was the opposite.'
Clark answered questions for two hours in a rare interview in his
first-floor corner office, from which he often spots camera crews approaching
through the parking lot. His computer beeps frequently with telephone
messages from reporters, at times numbering 60 a day.
Lean and bespectacled, Clark was unruffled, although he did grin
sheepishly at a suspicious mispronunciation. He referred to Rep. James Leach,
the Iowa Republican who is Congress' most vocal Whitewater critic, as
Representative Lynch.
Oh I see Leach. I'm sorry, he replied when asked if that was
intentional. ``No, not at all. A Freudian slip, maybe.
There has been speculation that the Whitewater affair will wear away at
this bedrock of Arkansas' legal community.
I don't think the publicity has been good for them, said Alston
Jennings Sr., of the rival Wright, Lindsey, Jennings firm. ``I don't know
whether it's hurt their reputation good people and good lawyers.
The president of the Arkansas Bar Association, attorney Lamar Pettus of
Fayetteville, said Rose's reputation for high ethics and professionalism
remains strong.
As for losing clients, `about the only way that you can judge that is
just wait and see, Pettus said.
``We haven't noticed any difference,' Clark said. ``You never know about
the call you didn't get, obviously, so I can't quantify that. But our clients
have been extremely supportive.
There may be anxiety and frustration inside the firm, Clark said, but no
internal battles are raging. However, he and the nearly 60 other attorneys are
upset about apparent leaks that have occurred despite a strict policy
prohibiting interviews on Whitewater.
There's no `wasted effort'' tracing the leaks, he said, although culprits
face unspecified punishment. Two couriers who told of shredding recently left
the firm. One said he felt uncomfortable remaining at Rose, but said they both
quit voluntarily.
A year ago, the Clinton presidency seemed to offer a bright new era for
Rose, with four partners Mrs. Clinton, Hubbell, Foster and White House lawyer
William Kennedy heading to Washington for key administration roles.
The firm even opened a Washington office, but Clark said Rose has never
been a politically minded firm.
``I think we knew in our heart that we have always been and always will be
an Arkansas law firm, he said. ``We didn't anticipate any big boon. We
didn't go out and recruit a bunch of new people to handle all this new work
that would be coming in the door.'
Even in Arkansas, Clark insisted, having the governor's wife as
a partner brought mixed results. The firm turned away some business because of
ethical conflicts and probably both lost and gained business depending upon
clients' opinions about the Clintons, he said.
Most Rose employees lamented losing four major producers to Washington,
Clark said.
And beginning with Foster's death, much of the impact from Washington has
been bad.
`Vince is a very difficult subject, only because of the circumstances
surrounding his death, said Clark, recruited by Foster out of the University
of Arkansas law school. ``It was the biggest tragedy for all of us to come out
of this.
...
We miss him.
By now, the Rose firm is braced. It has hired its own counsel, the
Houston-based firm of Vinson & Elkins, for the long months of questions and
examination ahead.
At some point, this will come to an end,'' Clark said. ``When this ends,
I think the firm will still be here, and still be healthy.'
EDITOR'S NOTE Dan Sewell is the AP's Southeast regional reporter, based
in Atlanta.
**** filed by:APE-(--) on 05/02/94 at 00:27EDT ****
**** printed by:WHPR(JEL) on 05/02/94 at 09:07EDT ****
GOP welfare b' cuts off
unwed mothers under 21
By Cheryl Wetzstein
Welfare Reform Act of 1994, proposes a 3.5
THE WASHINGTON TIMES
percent cap on the growth of welfare
spending, excluding Medicaid.
Under the name of "real" welfare re-
The cap is estimated to "save American
form, Senate and House Republicans yes-
taxpayers $80 billion over five years," said
terday introduced a bill that would over-
Sen. Lauch Faircloth, North Carolina Re-
haul the welfare system by transferring
publican and one of 17 sponsors in the Sen-
money and programs to state control, re-
ate.
quiring able-bodied recipients to work and
Mr. Faircloth said the bill challenges
capping annual welfare spending.
President Clinton. "If he is serious about
The bill carries a controversial measure
reforming welfare and doing something
to discourage illegitimate births: Begin-
about it, he should reduce the spending on
ning one year after the bill is enacted, wel-
welfare."
fare checks, food stamps and public hous-
Mr. Clinton is expected to propose a $9.5
ing would no longer be available to women
billion plan to provide welfare recipients
under age 21 with children born out of wed-
with training, education and child care to
lock.
get jobs in two years.
"We must remove the enormous eco-
The Republican bill calls for money
nomic subsidy for people to form families
saved by excluding mothers under 21 to be
that are dysfunctional," said Rep. James M.
given to the states as block grants. States
Talent, Missouri Republican, at a news con-
could design their own programs to help
ference attended by numerous members of
young mothers and children.
Congress.
The bill also would:
Ending the welfare subsidy for young,
Deny an increase in Aid to Families
unwed mothers, he said, would make mar-
With Dependent Children (AFDC) benefits
riage the only economically viable way to
to welfare mothers who have additional
live.
children.
"We want to change the conversation be-
Require any unwed mother 21 or older
tween young men and young women so
to identify the father of her child in order
young women will say, 'Oh, no, you don't,'
to receive AFDC funds.
said former Education Secretary William
Require single parents on AFDC to
Bennett, co-founder of Empower America.
work at least 30 hours per week.
Require fathers who are not in the
Critics said the bill wrongly presumes
home or paying child support to work, do
that welfare causes illegitimate births.
community service or go to jail.
"It ignores the fact that out-of-wedlock
Establishes a $1,000 pro-marriage tax
births are not unique to young American
credit to help poor, two-parent families.
women who are poor," said Jodie Levin-
The bill also would radically change the
Epstein, senior state policy analyst of the
welfare bureaucracy by terminating fund-
Center for Law and Social Policy. "In fact,
ing to 67 federal programs and redirecting
the rate of increase is greater among older
that money to the states.
American women," she said.
"Each state would be given extremely
"The data and research do not support
wide flexibility in determining what ser-
the hypothesis that welfare is the cause of
vices were provided and who would receive
benefits," an outline of the bill said.
out-of-wedlock births," the Center for Bud-
A spokeswoman for the American Public
get and Policy Priorities said in a state-
Welfare Association, which represents the
ment.
welfare industry, said the group had no
The new Republican bill, called the Real
comment on the proposal.
McDougal, Leach
wage war by mail
LITTLE ROCK, Ark. (AP) -
House critic of the Clinton admin-
The territory between "Dear" and
istration's handling of the White-
"Sincerely gets chilly in the let-
water investigation.
ters Whitewater investor James
Mr. McDougal and the Clintons
The Washington Times FRIDAY, APRIL 29. 1994
McDougal and Rep. Jim Leach,
say they did nothing improper.
Iowa Republican, have written to
Mr. McDougal's letter blasts Mr.
each other.
Leach for allegations the con-
Mr. McDougal's letter, dated
gressman has made about White-
April 16, threatens to sue Mr.
water in the House, in the press
Leach for libel if he doesn't
and in "bogus documents" his of-
"apologize to the people of Arkan-
fice has distributed to the press.
sas" and "withdraw
slanderous
"I had expected to confront you
remarks against the president and
concerning these matters at the
me" within 10 days.
congressional hearings you have
Mr. Leach's letter, dated April
been demanding for months." Mr.
19, accuses Mr. McDougal, a
McDougal wrote. "I especially
Democratic candidate for Con-
wanted to face you and answer
gress, of playing politics in
your slanderous attacks against
criticizing him.
the people of Arkansas. I am dis-
The congressman attached a
appointed to learn that since my
stack of documents that he says
public exposure of you as a liar
support the view that Mr. Mc-
and a forger of evidence that you
Dougal's real estate venture with
have lost your appetite for public
President Clinton and Hillary Rod-
hearings."
ham Clinton ended up costing tax-
There's no apology in the letter
payers money by contributing to
from Mr. Leach, the senior Repub-
the failure of Madison Guaranty
lican on the House Banking Com-
Savings and Loan Association.
mittee.
which Mr. McDougal owned.
Mr. McDougal said Wednesday
Madison failed in 1989 at a cost
he was consulting with a lawyer
of $50 million.
about a libel suit. He has threat-
Mr. Leach has been the leading
ened to sue other people
126
Whitewater Inquiry Lengthening, Officials Say
By STEPHEN LABATON
tended primarily for show, a step
mately yield little new information.
taken to keep Congress from interfer-
But some advisers also acknowledge
Special to The New York Times
WASHINGTON, April 26 The call
ing with the investigation by granting
that Mr. Fiske's examination, which
immunity to potential targets in ex-
is largely behind closed doors, has at
came through this morning on Fed-
eral Bureau of Investigation tele-
change for their testimony.
the least delayed public hearings and
types around the nation: Wanted -
Few, if any, of the subpoenaed offi-
could wind up keeping Whitewater off
agents with accounting and white-
cials have been interviewed by inves-
the front pages for many months.
tigators before going into the grand
The White House said today that it
collar experience for the Little Rock,
jury room in Washington, which has
was not troubled that Mr. Fiske's
Ark., office.
rankled some who had hoped that an
investigation appears to be taking
The request is the latest sign that
interview could have averted the
more time than expected.
as Robert B. Fiske Jr. enters his
spectacle of an appearance before the
Investigators still expect that Mr.
fourth month as the independent
grand jury.
Fiske's office will complete its inves-
counsel investigating the finances of
Witnesses are often interviewed be-
tigation this summer of the discus-
President Clinton and his wife, Hilla-
fore such appearances for several
sions between White House and
ry, he is concluding that the inquiry
reasons. They are often more forth-
Treasury officials about Madison.
will take more time and be more
coming in the less formal setting of
Mr. Fiske has already said that Con-
complex than he originally thought.
an interview. They can be turned into
gress could hold hearings this sum-
Mr. Fiske never gave a specific
a witness for the prosecution far
mer without affecting the investiga-
deadline, but the initial view among
more easily outside the grand jury
tion, a sign taken by some Washing-
his staff was that the work could be
room. And prosecutors can discover
ton lawyers to mean that no one will
wrapped up this year. But investiga-
the strengths and weaknesses of a
be charged with criminal wrongdeing
tors said this week' that they now
witness before the proceeding, and be
concerning the contacts. No prosecu-
think the examination will stretch
thoroughly familiar with the wit-
tor, they assert, would want a Con-
well into 1995.
ness's account.
The events covered by the inquiry
Associated Press
gressional hearing to interfere with a
But there are also reasons not to
started in the late 1970's and stretch
Robert B. Fiske Jr.
pending trial.
interview witnesses but simply usher
More immediately, Mr. Fiske's
through this year. It begins when the
them directly into the grand jury
Washington office is expected soon to
Clintons became involved with James
room. The most common rationale
Fiske's office could be operating in
make public a report about what is
and Susan McDougal in the White-
for such a move is that it gives them
phases and that the omission might
considered a relatively straightfor-
water Development Company, con-
less time to try to change their ac-
not be significant if it ultimately ob-
ward issue, the cause of the death of
tinues through the 1980's when Mr
count or concoct a false one with
tains the documents.
Mr. Foster, whose body was found in
McDougal's savings and loan, Madi-
other witnesses
Asked about these complaints, Mr.
a park in Virginia.
son Guaranty, teetered and failed,
Witnesses and their lawyers have
Fiske said today that he could not
But the length of time it has taken
and extends into the circumstances
cited what they see as another short-
comment on any matter before a
to reach conclusions about that case,
surrounding investigations by the
coming in Mr. Fiske's procedures.
grand jury.
indicates how far Mr. Fiske is from
Government into Madison last year.
Several said that their subpoenas did
The White House has a public and a
concluding his review of the vastly
Investigators are also examining
not asked for any relevant docu-
private view of Mr. Fiske's investiga-
more complicated story of a failed
what the 1992 Clinton campaign knew
ments, even though they have them
tion. Mr. Clinton has said several
savings and loan and whether it pro-
of links between Whitewater and
and such requests are routine. But an
times that he views the investigations
vided any money to Mr. Clinton for
Madison.
experienced prosecutor said that Mr.
as a costly exercise that will ulti-
election campaigns.
Already, more than 25 F.B.I. agents
are working on the case in Little
Rock, assisted by a bevy of other
officials who have been transferring
legal documents into a computer da-
tabase.
Coast Guard Bans Bias Against Gay Workers
A second group of investigators in
Washington has been exploring the
By MARTIN TOLCHIN
ability is the policy of the Coast
policy has been that sexual orienta-
circumstances surrounding the sui-
Special to The New York Times
Guard," the memo said.
tion has no effect on career opportuni-
cide last year of the deputy White
WASHINGTON, April 26 - The
Early this evening, the Coast
ties."
Ho counsel, Vincent W. Foster Jr.
Coast Guard has banned discrimina-
Guard issued a clarification that the
Commander Del Bueno added that
Washington investigators have also
tion against civilian employees on the
directive applied only to its 6,000 civil-
"for active duty uniformed person-
been studying the Administration's
ian workers.
handling of a inquiry into Madison.
basis of "sexual orientation," the
nel, the homosexual policy is entirely
As the Waterwater investigation
first military service to adopt such a
different." He noted that the 1993 law
Limited to Civilians
has grown, some defense lawyers and
policy.
and Pentagon regulations allow ho-
witnesses have complained about
"No one will be denied opportuni-
The Coast Guard action, reported
mosexuals to serve in the military as
some of Mr. Fiske's actions, especial-
ties because of their sexual orienta-
today in The Washington Times, does
long as they do not engage in homo-
ly the decision last month to subpoena
tion," the Coast Guard's Comman-
not affect its 38,000 uniformed offi-
sexual conduct.
several White House and Treasury
dant, Thomas F. Fisher, said in a
cers and sailors, who remain subject
Because it enforces Federal laws
officials to appear before a grand
memorandum dated March 15. As a
to the law and Pentagon regulations,
on United States waters at sea and
jury.
reason for issuing the memo, he cited
which ban openly homosexual behav-
inland, the Coast Guard is under the
the declared policies of Transporta-
ior by uniformed military personnel.
jurisdiction of the Department of
Several witnesses and their law-
tion Secretary Federico F. Peña, who
Coast Guard officials said the di-
Transportation in time of peace, even
yers said that in an effort to send a
oversees the service and has long
rective merely codified a longstand-
though its officers and enlisted mem-
loud and quick message about its
opposed discrimination against ho-
ing policy. "We have never denied
bers have similar ranks, receive the
determination, Mr. Fiske's staff has
mosexuals.
anybody career opportunities be-
same pay and come under the same
taken some shortcuts in its pursuit of
"Equality of treatment and oppor-
cause of sexual orientation," said
regulations as their counterparts in
the investigation. Speaking on condi-
tunity for all Coast Guard members
Commdr. Ernest L. Del Bueno, the
the Navy. In time of war or under a
tion of anonymity, they assert that
without regard to race, color, religion,
Coast Guard's director of media rela-
Presidential order, the Coast Guard
the grand jury proceeding was in-
gender, national origin, age and dis-
tions. "For civilian personnel, our
becomes an active part of the Navy.
A Defense Department spokes-
woman said today that its policy of
"Don't Ask, Don't Tell. Don't Pursue"
Clinton Proposes Revising Pesticide Regulations
applied only to uniformed personnel
and that there was no policy on the
sexual orientation of civilian employ-
By JOHN H. CUSHMAN Jr.
approach would provide enforceable,
and Rodenticide Act and the Federal
ees.
Special to The New York Times
uniform standards for all foods while
But critics said the Coast Guard
Food, Drug and Cosmetic Act.
WASHINGTON, April 26 - The
still protecting the public's health.
action undermined the military poli-
Clinton Administration today offered
"The E.P.A. has put forward legis-
The plan adopts reconfmendations
cy, which was a compromise between
lation that is not science-based and
a proposal for rewriting two laws that
from the National Academy of Sci-
President Clinton, who had promised
falls far short of what is needed to
control pesticides in food. But its
to end the military ban on homosex-
ences. Under the proposal, restric-
prospects in Congress are uncertain
reform the nation's regulations of
uals, and Congress, which had resist-
tions on the amounts of pesticides in
because neither industry nor environ-
pesticides," said Juanita Duggan, the
ed such a move.
food would for the first time be based
mental groups support the Adminis-
senior vice president of government
Mr. Peña spoke of his commitment
on the anticipated effects on children
affairs for the National Food Proces-
tration's approach.
rather than on adults. In setting toler-
to diversity in May, 1993. in a memo
sors Association.
The Administration's proposal
ances for exposure to pesticides, the
to all agency employees. He wrote:
The industry group favors the bill
would allow pesticide residues in food
bill would have the Environmental
"We embrace the richer, broader
introduced by Representatives Rich-
Protection Agency take into account
perspective that diverse individuals
only if "a reasonable certainty of no
ard H. Lehman, a California Demo-
harm" could be demonstrated. The
that people could be exposed to a
bring to the workplace, and respect
crat, and Thomas J. Bliley Jr., a
same standard would govern raw and
single type of pesticide from many
the dignity of ourselves and our cus-
Virginia Republican. That bill, like
tomers."
processed foods alike.
kinds of food.
the Administration's would elimi-
That approach would abandon a
Last January, Commandant Fisher
Although the basic outlines of the
nate the ban on cancer-causing sub-
sent members of the Coast Guard a
largely unenforced 1958 provision,
Administration's proposal have been
stances in processed food, but unlike
memo that expressed Mr. Pena's pol-
governing only processed foods, that
known since last September, some of
the Clinton proposal, the E.P.A. would
prohibited any residue of cancer-
icies, but omitted reference to "sexu-
the details have been changed since
consider the economic benefits of pes-
al orientations." The March 15th
causing substances, no matter how
then. The proposal would amend both
ticides to farmers and consumers
small. The Administration says its
memo was intended to remedy the
the Federal Insecticide, Fungicide
when establishing limits on exposure.
omission.
THE NEW YORK TIMES, WEDNESDAY, APRIL 27, 1994
8
Mandate for Human Dignity
AI
By BILL KELLER
Special to The New York Times
MANDELA PARK, South Africa,
against awaiting dramatic improve-
April 26 - The question that most
ments too soon.
Honor and status
worries the lame-duck whites whose
Although their close experience of
monopoly began seeping into history
inflated white wealth invites them to
want more, the people of Mandela
are ranked higher
today, and privately worries the next
Park, at least, make sophisticated
Government, too, is couched in cau-
distinctions between equal life styles
than houses and
tionary phrases about "unrealistic
and equal opportunity.
expectations."
"Let them have it, said Jane Mo-
jobs.
But it amounts to this: what do
disakeng, a 29-year-old houseless
South African blacks want?
housewife here, speaking of what
They are often accused of aspiring
whites have accumulated in their
too high, of threatening to overwhelm
centuries of advantage. "No one will
tamper with it. But that should come
impoverished that may help a new
the new government with a greedy
to an end, where they have it so easy.
government make the most of limited
tide of demands, of expecting to occu-
Now we must all start off with an
resources.
py suburban estates overnight and be
equal chance."
Like many of South Africa's euphe-
served poolside cocktails by their for-
mistically named informal settle-
mer oppressors.
That means, first and foremost,
ments, Mandela Park is inhabited by
The answer from this field of squat-
equal education, said Solly Shai, a
the house-proud poor who have sculp-
ter shacks, one of many such South
high-school teacher consigned to
tured their squalor into regimental
Mandela Park by the high cost of real
order.
African settlements named in honor
housing. Mr. Shai said he acquired "a
The shacks are painted, numbered
of the next President, is: the expecta-
hatred for the white man" when, as a
and customized one even rises
tions are as modest as a flush toilet,
college student, his living allowance
three stories on log pylons - and they
as elementary as human dignity.
was a fifth that given white students.
are surrounded by flower beds, orna-
"What big mansion?" hooted Jack
With so many citizens living so low,
mental rock gardens, and lawns the
Mokoape, an out-of-work bank teller,
the task of raising their standards
size of throw rugs.
THE NEW YORK TIMES. WEDNESDAY. APRIL 27. 1994
grinning at the dreams ascribed to
will be daunting and costly.
"I have a kitchen, a room for enter-
him by fearful whites. "What big
'A Better Life for All'
taining visitors, a living room and a
mansion, if you can't pay for it? I'm
Mandela Park is a museum of this
bedroom," said Cecilia Mokone,
living with people who can think.
need, a place without electricity or
showing off her meticulous shed of
sewers, where malnutrition is rife. An
scrap lumber. "It is just they are all
They know the election doesn't mean
in one room."
then you are going to have a man-
There is an unsinkable quality in
sion."
their self-confidence, as Mr. Shai, the
A job would be nice, he mused. Or,
schoolteacher, observed when re-
waving at the communal water tap he
To some extent,
flecting on the ambitions of his high-
school seniors.
shares with a few hundred others, an
"Do the youth have unrealistic ex-
indoor faucet. But even such modest
miracles "will not happen over-
the voting
pectations?" he said. "Yes. All of
them think they are going to be doc-
night."
experience is its
tors."
"The main thing, 1 just hope we will
The residents of Mandela Park say
be equal," he concluded.
The realism of Mandela Park is
own reward.
the new Government can expect a
lengthy honeymoon period before it
reflected too in opinion polls and in-
will be vulnerable to economic popu-
terviews at other have-not settle-
lists.
ments, and it suggests that the voting
"You press people, don't just write
after two years, 'Eh, they are fail-
exercise this week is, to some extent,
estimated 8 million of the 30 million
ing,' warned Jack Mokoape, al-
its own reward.
black South Africans live in such
ready proprietary about his right to
"We have done more polling on this
communities or in backyard shacks.
decide when Mr. Mandela's govern-
than on any other issue," said Law-
Even the much-diluted plan for
ment has exhausted public patience.
low-cost housing, public jobs and free
rence Schlemmer, who has surveyed
"No. Some of these people have been
education laid out in the African Na-
black expectations as head of a non-
out of the country for many years in
tional Congress campaign manifesto
partisan polling project for the Insti-
exile. After two years, things will just
seems to some economists overly
tute of Multiparty Democracy.
start settling."
ambitious. President F. W. de Klerk
"They expect to be treated with
contends it would require at least
The Beginning of Hope
dignity," he said. "Their status as a
doubling the income tax 80 percent
John Mona, 65, who lives on $100 a
human being, as a South African, is
of which is paid by whites.
month from distributing Government
nonnegotiable. Quite frankly, I feel
Against this, pollsters say, is the
food but still manages to keep his
fact that for those at the bottom it
loafers spit-shined, agreed. "Within
that this election is more about honor
does not take much to fulfill the Afri-
two or three years we'll have some
and status than it is about houses and
can National Congress campaign slo-
jobs, we'll have a few houses, and it
jobs."
gan of "a better life for all."
will look like the beginning of hope,"
There are, no doubt, have-nots
One survey in a Natal squatter
he said.
poised to seize whatever opportunity
camp, for example, asked the home-
Of course, he added. if Mr. Mandela
less what they wanted. Overwhelm-
lets them down, they will be quick to
presents as white power recedes.
ingly the modest answers were clean
let him know it.
This squatter village, in fact, was
drinking water and toilets.
"You come here and you promise
born in an earlier surge of opportun-
us and we really believe and we all
ism, unwittingly loosed by Mr. Man-
A Bootstrap Ethic
support you and vote you in," Mr.
dela.
A pollster employed by the A.N.C.,
Mona said. "But if you don't do it, the
It was Mr. Mandela's release from
who refused to be identified by name,
beauty of it is in five years you'll be
prison in 1990 that emboldened blacks
added, "Even among youth, the wild-
heard no more."
from the overcrowded Pretoria town-
est card in terms of expectations, we
The new homes will take a while,
ships to invade this vacant land east
have found a very real readiness to
but the dignity of citizenship was an
settle for the menial jobs that might
instant dividend of election week that
of the capital and erect a subdivision
be provided in a state public service
already straightened the shoulders of
out of scrap.
scheme at low wages."
Mandela Park residents as they
"Before that, you'd be in prison,"
recalled Cecilia Mokone, who was
This encampment is also a monu-
headed for the polls.
among the first invaders of a commu-
ment to a bootstrap ethic among the
It was plain in the unflinching pride
with which Cecilia Mokone looked a
nity that now numbers 30,000 people.
"Mandela, when he was released, he
visiting white authority figure in the
face, when asked how she would cast
said the land is nobody else's but
her vote, and smiled possessively,
God's, and people should be free."
"That is my secret."
Within the last few months, impa-
tient, homeless blacks in Cape Town
and Durban have expropriated new
tract houses built for others, evacuat-
ing only when the state agreed to
house them.
Mandela Reassures Whites
The fear of such invasions, or even
gunpoint redistribution of white
wealth, has led Mr. Mandela to devote
much of his time in the closing days
of the campaign to reassuring whites
and cautioning his own followers
7
Republicans turn up the heat
to speed Whitewater hearings
By Jerry Seper
THE WASHINGTON TIMES
AI
House Minority Leader Rob-
ert H. Michel, noting that con-
siderable amount of time" had
Republicans yesterday
passed since a March 22 res-
sought to ensure that congres-
olution calling for the hearings
sional hearings on Whitewater-
to begin, asked House Speaker
Madison begin soon, as special
Thomas S. Foley to call for plan-
counsel Robert B. Fiske Jr.
ning sessions to get under way.
neared the end of the first phase
"According to the resolution,
of his investigation into the af-
fair linked to President Clinton.
see HEARINGS, page A13
HEARINGS
crat, told reporters Tuesday that
sponse to requests by the White
Whitewater-Madison hearings will
House for permission to review
be "considered" once Mr. Fiske in-
Treasury Department documents
From page Al
dicates that the first phase of his
relating to some aspects of the
we are to meet to determine the
investigation has been fully com-
Whitewater-Madison probe.
appropriate timetable, proce-
pleted and will begin "when we are
Those documents, which the
dures and forum for appropriate
ready."
White House said it wants so it can
congressional oversight, including
"We have a resolution that calls
prepare for the hearings, describe
hearings," Mr. Michel said in a let-
for [hearings] when it is also con-
meetings between Treasury De-
ter. "As you know, no such meeting
sistent with Mr. Fiske's investiga-
partment officers, including Dep-
has taken place, despite my re-
tion," he said. "That is the condi-
uty Treasury Secretary Roger C.
quests that one be held as soon as
tion that the House resolution
Altman, and Clinton administra-
possible."
imposed upon the hearings, so
tion officials over the Resolution
The Illinois Republican said
when Mr. Fiske indicates that his
Trust Corp. (RTC) investigation of
several House committees have
investigation is over, or that phase,
Madison Guaranty Savings and
the "jurisdictional basis" to con-
we will consider the scheduling of
Loan Association.
duct Whitewater-Madison hear-
hearings."
The RTC, a Treasury Depart-
ings and "can clearly begin work-
The speaker said no decisions
ment agency, had forwarded to the
ing on compiling the relevant
had been made about the focus of
Justice Department nine criminal
background material" to conduct
the hearings, "but I assume we
referrals in the Madison case, sug-
them.
would look into the matters that
gesting possible financial impro-
"This work has not been done,
relate to that portion of Mr. Fiske's
prieties involving Madison, its
nor have you given me any sign
investigation that had to do with"
owner, James B. McDougal, Mr.
when or if appropriate investiga-
possible improper contacts be-
Clinton and first lady Hillary Rod-
tions and public hearings are to be
tween the Treasury Department
ham Clinton.
held," Mr. Michel said. "I'm com-
and the White House over the
The RTC-White House contacts
pelled to renew my request to
Whitewater-Madison probe.
were described by Mr. Altman as
know when, if ever, the majority
Mr. Foley said scheduling for
a "heads-up."
plans to investigate and report to
any hearings would be the respon-
Madison failed in 1989 at a cost
the American people exactly what
sibility of the committees in-
to taxpayers of $50 million. Mr.
took place during the Whitewater
volved.
McDougal, his wife, Susan, and the
affair."
Senate Minority Leader Bob
Whitewater-Madison hearings
Clintons were partners in White-
have been approved by both the
water Development Corp., a north-
Dole also has begun a push for
ern Arkansas real estate venture
hearings, saying he does not in-
House and the Senate. They were
to begin after the leadership deter-
that also eventually failed.
tend to wait indefinitely for them
to begin. But the Kansas Repub-
mined they would not jeopardize
Madison and Mr. McDougal are
lican, after a meeting this week
the ongoing Fiske inquiry.
the major focus of the Fiske in-
with Senate Majority Leader
On Monday, Mr. Fiske said he
quiry.
George Mitchell of Maine, said he
was nearing the end of the first
Mr. Fiske said the release to the
was hopeful hearing details could
phase of his investigation, al-
White House of the Treasury De-
be worked out soon.
though it had not yet been com-
partment documents at this point
Mr. Foley, Washington Demo-
pleted. His comments were in re-
of the first phase of his investiga-
tion which includes a look into
the RTC-White House contacts -
would not interfere with his in-
quiry.
It was not certain yesterday
whether Republicans, also looking
to prepare for the hearings, would
have access to the same doc-
uments. A Treasury Department
spokeswoman said the depart-
ment had not received any re-
quests from Republicans in the
House or the Senate for the rec-
ords. She said if one is made, it will
be reviewed by department law-
yers.
Mr. Michel's office said the con-
gressman was not sure which
Treasury Department records
would be available or who would
get them. "It's something we're
looking at now," a spokeswoman
said.
The documents are separate
from those being sought by Rep.
The Bashington THURSDAY, MAY 19, 1994
Jim Leach, ranking GOP member
of the House Banking Committee.
The Iowa Republican, a leading
proponent of Whitewater-Madison
hearings, has sued the RTC and
the Office of Thrift Supervison,
which oversees the RTC, for the
release of records in the govern-
ment's Whitewater-Madison inves-
tigation.
"We will request them," Mr.
Leach said yesterday. "We think
the case would appear to be com-
pelling that we should be provided
the same documents for the same
reasons. Do I expect to get them?
That will be up to the government."
107
Cardinal
pressures
Leach:
Clinton
on Elders
RTC
By Larry Witham
may fire
THE WASHINGTON TIMES
A Roman Catholic cardinal has
written President Clinton a second
letter to ask that he "disavow" Sur-
prober
geon General Joycelyn Elders'
public support of homosexual sex
and her criticism of certain reli-
By Ann McFeatters
gious groups.
SCRIPPS HOWARD NEWS SERVICE
"Once again I respectfully urge
you to disavow publicly the views
Rep. Jim Leach, Republican
and legally is a "pretty powerful
expressed by your Surgeon Gen-
point man on the Whitewater-
case."
eral." Cardinal James A. Hickey,
Madison affair, says he fears the
But he stressed that that does
archbishop of Washington, wrote
government's chief investigator is
not necessarily mean there is any
Monday to Mr. Clinton.
about to lose her job.
evidence that the Clintons had im-
"Dr. Elders, as a federal official,
Mr. Leach, ranking GOP mem-
proper dealings with Madison.
continues to advocate a re-defin-
ber on the House Banking Com-
The Clintons say they lost money;
ition of the family," Cardinal
mittee, said yesterday he is con-
Mr. Leach thinks they benefited
Hickey wrote. "All Americans
cerned that the contract of Jean
from the investment.
have a right to know whether or
Lewis may not be renewed when it
Despite Mr. Fiske's probe, Mr.
not Dr. Elders is speaking for your
comes up in June.
Leach wants hearings in Con-
administration."
Mrs. Lewis works for the Res-
gress. Whether they are held and
The president was sent the first
olution Trust Corp. (RTC) in Kan-
when, he said, is up to Democrats,
letter in late March, but in his re-
sas City, Mo., and has been investi-
who control both the House and
ply, 1½ months later, he did not
gating the failed Madison
Senate.
address Dr. Elders' specific re-
Guaranty Savings and Loan Asso-
Mr. Leach agreed the public is
marks or his views about them,
ciation in Little Rock and its con-
losing interest in Whitewater but
according to a copy of the letter.
nection to the Clintons' White-
insists taxpayers should know if
In a March interview with the
water real estate venture.
there were any ethical or criminal
Advocate, a magazine for homo-
Whitewater-Madison special
violations. But he said there is no
sexuals, Dr. Elders said sex is a
counsel Robert B. Fiske Jr. also is
reason to think anything new will
"wonderful" and "healthy part of
conducting a federal grand jury
emerge about Whitewater-Mad-
our being, whether it is homosex-
investigation into the financial
ison that would seriously damage
ual or heterosexual."
links between Madison and White-
the administration.
She also endorsed homosexual
water Development Corp. Presi-
He said a public airing about
adoptions and called the Boy
dent Clinton and Hillary Rodham
Whitewater and Madison in 1992
Scouts' ban on homosexual Scouts
Clinton were partners in White-
might have kept Mr. Clinton off the
and Scout leaders "unfair."
water with Madison owner James
Democratic ticket.
Mr. Clinton, in his April 4th re-
B. McDougal and his former wife,
Mr. Leach blames President
ply to Cardinal Hickey, empha-
Susan.
Bush's campaign in part for know-
sized that the president's job is to
Mrs. Lewis' belief that White-
ing about Madison but not wanting
build a society that promotes tol-
water took $1.5 million out of Mad-
to raise savings and loan issues.
erance and acceptance of diver-
ison in a check-kiting scheme has
Mr. Bush's son, Neil, was involved
sity.
helped to convince Mr. Leach
in the failed Silverado Savings and
"Recognition of differing opin-
crimes may have been committed.
Loan in Colorado. Mr. Leach also
ions on difficult social issues does
"The modus operandi of this
charges the press was more inter-
not, and should not, imply endorse-
White House is to attack those who
ested in Mr. Clinton's personal life
ment of any particular response to
raise charges," Mr. Leach told re-
in 1992 than in pursuing compli-
a matter of such complexity," Mr.
porters. "But she's not a maverick
cated financial dealings.
Clinton said.
working alone. You'll find her
The Iowa Republican, who has
He added that the federal gov-
to be an extremely credible wit-
filed a lawsuit seeking RTC doc-
ernment does not have a say in "do-
ness."
uments about Whitewater and
mestic relations, including adop-
Mr. Leach, a nine-term Iowa
Madison, said he has gotten to
tion," because they are state and
congressman, said Mrs. Lewis
know Mrs. Lewis. "Jean would like
local issues.
started as a "quasi-whistleblower"
to keep her job," he said.
"I believe that our common good
for the government in the S&L in-
Asked if he believes her job is in
is better served when we encour-
dustry and has won acclaim and a
jeopardy, he said, "Yes, I do."
age creative and innovative solu-
merit bonus as a "dedicated pro-
tions to questions that have the po-
fessional" whose work has led to
tential to divide us," Mr. Clinton
indictments and convictions. But
wrote.
she is zealous without having for-
In his second letter, released by
mal training as a lawyer or ac-
the archdiocese yesterday, Cardi-
countant, for which she has been
nal Hickey said he "remained
criticized.
disturbed" at Dr. Elders' public
He said the evidence Mrs. Lewis
criticism of Catholics and the "re-
has accumulated about Madison is
ligious right" who disagree with
a "black-and-white paper trail"
her on moral and health issues.
"I hope you will agree that in our
system of government it is highly
inappropriate for civil officials
to attack any specific religion or to
single out for ridicule the views of
any religious group," the cardinal
wrote.
The
Washington
WEDNESDAY.
MAY
18.
1994
108
bc-whitewater
JUDGE ORDERS FAST HEARING
IN SUIT FOR WHITEWATER PAPERS
By JOHN HANCHETTE=
Gannett News Service=
WASHINGTON Squadrons of lawyers clashed Monday in the first federal court
skirmish over a congressman's suit to liberate Whitewater documents, but the
confrontation was pretty tame stuff.
When it was over, two things became clear:
The suppression-of-documents complaint by Rep. Jim Leach, R-Iowa, against
the Resolution Trust Corp. and the Office of Thrift Supervision likely will
drag on through the summer.
The House Banking Committee, where Leach is ranking Republican, has no
immediate plans to hold any hearings that even remotely would have anything to
do with Whitewater Development Corp., the soured property venture in northern
Arkansas that has enveloped Bill Clinton's White House.
The frustrated Leach last week sued the RTC and OTS, asking that the two
agencies the federal offices assigned the task of cleaning up the S&L mess of
the 1980s be ordered to produce quickly all documents on file relating to
Whitewater and Madison Guaranty Savings
& Loan, a thrift owned by business partners of Bill and Hillary Clinton.
The thrift was seized and restructured by federal regulators in 1989 at a
bailout cost of more than $60 million to taxpayers. Leach, in his suit, says
that figure now has risen to $67 million.
Leach previously has claimed from records already scooped up in Arkansas
that several banking documents show a frequent flow of checks between Madison
and Whitewater, and that the Clintons have enjoyed financial gain from such
transactions.
Leach wants the documents as quickly as the court can compel, but lawyers
for the two agencies argued they should not be held to the break-neck pace
proposed by plaintiff.
Monday's courtroom had few spectators but plenty of lawyers four for
Leach, four for the RTC, and two for OTS. The main arguments were made by two
private attorneys: Kirk K. Van Tine, from the Houston law firm Baker & Botts,
representing the RTC; and Bobby R. Burchfield, of Covington & Burling,
representing Leach.
Federal judge Charles R. Richey chastised the agency lawyers for
last-minute motions and ordered all attorneys to ``sit down and come to some
agreement on this.
The schedule agreed upon:
June 6 OTS and RTC lawyers will file their opposition to Leach's motion
for summary judgment (a decision by the judge to release the documents without
going into all the lengthy court arguments), and their own motion for summary
judgment against Leach.
June 20 Leach's lawyers file their replies to the above.
June 27 Defendants file a reply brief in support of their arguments for
summary judgment.
Leach said last week in announcing the suit that about 75 percent of the
federal documents he has requested have been denied him, but `more like 99
percent of anything with any interest has been withheld.
The Iowa Republican has tried several times to persuade House Banking
Committee Chairman Henry B. Gonzalez, D-Texas, to schedule a legally required
oversight hearing on RTC business; so far, Gonzalez has refused.
Gonzalez, fearful Leach will turn the oversight hearing into a
Whitewater-only inquisition, has instructed RTC and other federal banking
officials not to cough up Madison documents that Leach wants, even if
requested.
Van Tine based much of his argument on the premise Leach would not need
the documents in question for an oversight hearing because none is scheduled.
He submitted an affidavit from OTS congressional affairs director John Von
Seggern that quoted the House Banking Committee's staff director to that
effect.
That news irritated Leach's attorneys, who noted to reporters that no RTC
oversight hearings even though required by law have been authorized by the
House Banking Committee since Clinton took office.
``This is their third violation of the law, " said Burchfield, noting
three such oversight hearings should have been held by now.
**** filed by:GN-F(--) on 05/16/94 at 17:06EDT ****
**** printed by:WHPR(JEL) on 05/17/94 at 09:07EDT ****
THE WALL STREET JOURNAL THURSDAY, MAY 12, 1994
Arkla, Whose Ex-Chief Is Clinton Aide,
Approaches Legal Showdown With RTC
By LEE BERTON
And KENNETH H. BACON
Staff Reporters of THE WALL STREET JOURNAL
The government charges that Univer-
Arkla Inc., whose former chairman is
sity understated the thrift's probable
President Clinton's chief of staff, is mov-
losses from bad loans by at least $600
ing toward a legal showdown with the
million in late 1986 and early 1987. If
Resolution Trust Corp. over a business
University had accurately recognized
transaction the RTC calls a "sham."
these potential losses, Entex would have
The RTC says the deal eventually left
been required to pump an additional $600
U.S. taxpayers holding the bag for $2.4
million into the thrift, the government
billion in a Houston thrift's bad debts.
says. When Entex acquired University in
Far more importantly, a federal agency
1977 from Robert Lanier, currently Hous-
had approved the University sale and a
The RTC has sued Arkla and others in
Federal District Court in Houston, and
ton's mayor, the gas company promised
prestigious accounting firm had signed off
the suit is scheduled to go to trial in
regulators that it would maintain Univer-
on the accounting that made it possible. In
October.
sity's capital at legally required levels.
May 1987, the Federal Home Loan Bank of
Mr. Clinton's chief of staff, Thomas F.
Rather than request more capital from
Dallas asked Entex and University to
McLarty III, is expected next month to be
Entex, the purchasers of University con-
obtain an independent accountant's opin-
deposed by the RTC in the matter; he
verted $600 million of potential loan losses
ion that converting University's potential
hasn't been named in the suit, though the
into "good will" and capitalized the losses
loan losses into good will conformed to
RTC will be interested in what he and
as an asset on the thrift's balance sheet,
generally accepted accounting principles.
Arkla knew, if anything, about the transac-
RTC officials say.
Without this opinion, the regulators
tion. At a hearing in Houston today, Arkla
Officials at the RTC say that their suit
wouldn't have approved the sale. In a Sept.
and other defendants are expected to seek
names Arkla only because it is a "succes-
15 letter to University's board. H. William
dismissal of the suit, arguing that the RTC
sor in interest" as the purchaser of Entex.
Hardy, a partner in Houston of Arthur
hasn't given them access to necessary
The officials say they never considered
Andersen, University's auditor, provided
documents.
naming Mr. McLarty in the suit.
that opinion. Now in Mexico City for
Though the basic allegations in the case
According to prospectuses Entex and
Andersen, Mr. Hardy didn't return a phone
have been reported. significant new de-
Arkla issued in late 1987 about the deal,
call.
tails have since emerged. The transaction
Mr. McLarty first met with Gale L. Gallo-
In talks last year, Andersen and the
that concerns the RTC occurred in 1987,
way, then Entex's chairman, on Sept. 18,
RTC settled RTC charges that the account-
when Entex Inc., a natural-gas distributor
based in Houston, effectively transferred
1987, "to explore the feasibility and gen-
ing firm's work for University was profes-
to the U.S. government the financial bur-
eral outline of the structure of a possible
sionally negligent. While denying the
business combination." Regulators had
charges, Andersen agreed to pay the RTC
den of a failing Houston thrift that it
owned, University Savings Association.
granted preliminary approval to the Entex
$24.5 million and to cooperate with the
agency in its current suit.
Entex urgently needed to get rid of the
plan to sell University in May, and final
thrift to make itself more attractive to a
approval came in September.
suitor.
A Cloud Over Entex
Soon after Entex shed University,
University was clearly a cloud over
Arkla agreed to purchase the gas distribu-
Entex. Clinton Small, a former outside
tor. Mr. McLarty was then chairman of
director of University, says that Entex's
Arkla, a Shreveport, La., gas producer and
problem with the thrift was well-known.
pipeline concern that is changing its name
The RTC's suit contends it clearly had
to NorAm Energy Corp. University failed
been an issue for an earlier Entex suitor:
in 1989, and the government was left
Enserch Corp., an energy company based
to pick up the bill.
in Dallas. Though Enserch considered
The RTC filed its suit in federal court
purchasing Entex in early 1986, it ended
in Houston in 1992, seeking to recover at
the talks because of worries about "En-
least $520 million of that loss from Univer-
tex's potential obligation to University
sity's former directors and officers. and
under [Entex's] capital-maintenance
from Entex and Arkla. Mr. McLarty isn't
agreement," the suit alleges.
mentioned at all in the government's
William McCord, retired chief execu-
filings. He has asserted that he had no
tive officer of Enserch, says in an inter-
knowledge of or involvement with the
view that his company declined to pursue
Entex transaction the RTC is attacking.
the acquisition because it found the prob-
'Political Pressure' Cited
lem with University "insurmountable"
and concluded that Entex, or any company
Mr. McLarty has said that the govern-
acquiring it, couldn't escape any potential
ment is suing Arkla unfairly, just because
burden merely by selling University.
it has money. This is "another case where
Others also saw problems. In late 1986,
the Resolution Trust Corp. is chasing 'deep
Entex retained Merrill Lynch & Co. to
pockets' in response to political pressure,"
he complained in a letter to Arkla stock-
study ways to dispose of University. Mer-
rill Lynch found that University faced at
holders while he was still chairman. Mr.
McLarty declined to answer questions
least $680 million of probable losses, from
troubled joint ventures and loans.
from this newspaper before giving his
deposition.
In a letter to Entex, Lawrence Uhl, a
The suit charges that Entex obtained
Merrill Lynch managing director, said
regulatory approval to sell University to its
that "the likelihood of a sale of University
to a legitimate purchaser, on terms mutu-
own management without disclosing "the
material fact" that "Arkla was waiting in
ally acceptable to both parties, is currently
low." Mr. Uhl declines to comment fur-
the wings to buy Entex stock for over $500
ther.
million if Entex could get rid of its capital-
maintenance obligations to University."
By the time Arkla bought Entex, it had
According to the RTC suit, Entex made
shed University and others approved the
a $30 million loan to a group of University
acquisition. According to legal documents
executives and directors, enabling them to
filed with the Securities and Exchange
buy the thrift. Only a month later, Entex
Commission in 1987, Arkia paid Kidder,
wrote off the loan, raising questions about
Peabody & Co. $500,000 to review the
how seriously it expected to be repaid in
proposed Entex acquisition. The firm
the first place.
called Arkla's $577 million offer for Entex
"fair
from a financial point of view."
Leach files own suit to
By Jerry Seper
THE WASHINGTON TIMES
Al
Rep. Jim Leach of Iowa yester-
get RTC records
day sued two federal agencies for
documents in the Whitewater-
Madison affair, saying efforts by
his office to get the records had
been rebuffed for five months be-
cause of their potentially "embar-
rassing" content.
Mr. Leach filed the lawsuit in
U.S. District Court in Washington
LEACH
in his name only, but he note his
position as ranking Republi
on
From page Al
the House Banking Committee
business partner of President and
He asked the court to pel
Mrs. Clinton, is the focus of an on-
the Resolution Trust Corp. (RTC)
going investigation by special
and the Office of Thrift Supervi-
counsel Robert B. Fiske Jr.
sion (OTS) to release all records
Mr. McDougal is, suspected of
involving Madison Guaranty Sav-
diverting funds from the S&L to
ings and Loan Association and
several prominent Arkansas poli-
Whitewater Development Corp.
ticians, including Mr. Clinton, and
The suit, which is not unprec-
of using Madison monies for the
edented but highly unusual, also
Whitewater project, which was
asks that RTC and OTS officials
jointly owned by Mr. Clinton, Mr.
admit they "violated their legal ob-
McDougal and their wives.
ligation to turn over the doc-
Most of the accusations are out-
uments" under the Freedom of In-
lined in RTC investigative reports
formation Act (FOIA).
that were turned over to the Jus-
"The Constitution did not envis-
tice Department in nine criminal
age that a member would be re-
referrals.
quired to default on his or her in-
Madison was shut down by fed-
dividual responsibilities simply
eral regulators in 1989 at a cost to
because a political determination
taxpayers of $50 million.
may be made by an executive
Mr. Leach noted that the RTC
branch agency to withhold doc-
and OTS had turned over similar
uments pertaining to a par-
records during an investigation
ticularly embarrassing circum-
sought by Democrats into Lincoln
stance," Mr. Leach said during a
Savings and Loan Association in
Capitol Hill news conference.
California and the so-called "Keat-
"Shielding information to pro-
ing Five."
tect public officials from public
He said the withheld documents
accountability is not the American
that he has requested will show
way," said the congressman, the
that funds were improperly trans-
leading proponent for congres-
ferred among Madison, White-
sional hearings on Whitewater-
water and other entities.
Madison.
The suit alleges that decisions to
Mr. Leach, whose staff has ex-
withhold the Whitewater-Madison
tensively investigated accusations
records were made after the agen-
of wrongdoing, said he formally
cies received "instructions" from
had asked for the RTC and OTS
Rep. Henry B. Gonzalez, Texas
records on eight separate occa-
Democrat and House Banking
sions, beginning in December.
Committee chairman, to "sup-
He said 75 percent of the re-
press" the documents.
quests were denied, "including
The lawsuit describes the ac-
about 99 percent of those records
tions as "arbitrary, capricious and
that would contain anything of in-
contrary to law."
terest."
Mr. Gonzalez refused to call for
James Barker, RTC general
committee hearings on White-
counsel for field operations, said
water-Madison, but in March 10
Mr. Leach had "failed to persaude"
letters to John E. Ryan, RTC
the agency that he had the neces-
deputy chief executive officer, and
sary authority to receive the doc-
Jonathan Fiechter, OTS acting di-
uments.
rector, he asked the agencies to CO-
"We are prohibited by statute
operate with Mr. Leach.
from disclosing to an individual
"I trust you will give Congress-
member of Congress information
man Leach's requests the consid-
which may be protected by the Pri-
eration they merit and extend to
vacy Act," Mr. Barker said in a let-
him the same courtesies you would
ter to Mr. Leach.
extend to any member of Con-
"Case law refutes your staff's
gress," the Texas Democrat wrote.
arguments that you, as an individ-
Congressional hearings in the
ual member of Congress, are to be
Whitewater-Madison affair are
afforded any special status under
tentatively scheduled to begin this
the FOIA not afforded the general
summer. It is up to the leadership
public," he wrote.
of both houses to specifically call
OTS spokesman Paul H. Lock-
for the hearings to begin.
wood said that agency had not yet
been served with the suit and had
no comment.
Madison, owned by James B.
McDougal, a longtime friend and
see LEACH, page All
The Bashington Times THURSDAY, MAY 12, 1994
116
Leach files own suit to
By Jerry Seper
THE WASHINGTON TIMES
AI
Rep. Jim Leach of Iowa yester-
get RTC records
day sued two federal agencies for
documents in the Whitewater-
Madison affair, saying efforts by
his office to get the records had
been rebuffed for five months be-
cause of their potentially "embar-
rassing" content.
Mr. Leach filed the lawsuit in
U.S. District Court in Washington
LEACH
May 12-19
in his name only, but he note his
position as ranking Republi
on
From page Al
1994
the House Banking Committee
business partner of President and
He asked the court to compel
Mrs. Clinton, is the focus of an on-
the Resolution Trust Corp. (RTC)
going investigation by special
and the Office of Thrift Supervi-
counsel Robert B. Fiske Jr.
sion (OTS) to release all records
Mr. McDougal is. suspected of
involving Madison Guaranty Sav-
diverting funds from the S&L to
ings and Loan Association and
several prominent Arkansas poli-
Whitewater Development Corp.
ticians, including Mr. Clinton, and
The suit, which is not unprec-
of using Madison monies for the
edented but highly unusual, also
Whitewater project, which was
asks that RTC and OTS officials
jointly owned by Mr. Clinton, Mr.
admit they "violated their legal ob-
McDougal and their wives.
ligation to turn over the doc-
Most of the accusations are out-
uments" under the Freedom of In-
lined in RTC investigative reports
formation Act (FOIA).
that were turned over to the Jus-
"The Constitution did not envis-
tice Department in nine criminal
age that a member would be re-
referrals.
quired to default on his or her in-
Madison was shut down by fed-
dividual responsibilities simply
eral regulators in 1989 at a cost to
because a political determination
taxpayers of $50 million.
may be made by an executive
Mr. Leach noted that the RTC
branch agency to withhold doc-
and OTS had turned over similar
uments pertaining to a par-
records during an investigation
ticularly embarrassing circum-
sought by Democrats into Lincoln
stance," Mr. Leach said during a
Savings and Loan Association in
Capitol Hill news conference.
California and the so-called "Keat-
"Shielding information to pro-
ing Five."
tect public officials from public
He said the withheld documents
accountability is not the American
that he has requested will show
way," said the congressman, the
that funds were improperly trans-
leading proponent for congres-
ferred among Madison, White-
sional hearings on Whitewater-
water and other entities.
Madison.
The suit alleges that decisions to
Mr. Leach, whose staff has ex-
withhold the Whitewater-Madison
tensively investigated accusations
records were made after the agen-
of wrongdoing, said he formally
cies received "instructions" from
had asked for the RTC and OTS
Rep. Henry B. Gonzalez, Texas
records on eight separate occa-
Democrat and House Banking
sions, beginning in December.
Committee chairman, to "sup-
He said 75 percent of the re-
press" the documents.
quests were denied, "including
The lawsuit describes the ac-
about 99 percent of those records
tions as "arbitrary, capricious and
that would contain anything of in-
contrary to law."
terest."
Mr. Gonzalez refused to call for
James Barker, RTC general
committee hearings on White-
counsel for field operations, said
water-Madison, but in March 10
Mr. Leach had "failed to persaude"
letters to John E. Ryan, RTC
the agency that he had the neces-
deputy chief executive officer, and
sary authority 10 receive the doc-
Jonathan Fiechter, OTS acting di-
uments.
rector, he asked the agencies to co-
"We are prohibited by statute
operate with Mr. Leach.
from disclosing to an individual
"I trust you will give Congress-
member of Congress information
man Leach's requests the consid-
which may be protected by the Pri-
eration they merit and extend to
vacy Act," Mr. Barker said in a let-
him the same courtesies you would
ter to Mr. Leach.
extend to any member of Con-
"Case law refutes your staff's
gress," the Texas Democrat wrote.
arguments that you, as an individ-
Congressional hearings in the
ual member of Congress, are to be
Whitewater-Madison affair are
afforded any special status under
tentatively scheduled to begin this
the FOIA not afforded the general
summer. It is up to the leadership
public," he wrote.
of both houses to specifically call
OTS spokesman Paul H. Lock-
for the hearings to begin.
wood said that agency had not yet
been served with the suit and had
no comment.
Madison, owned by James B.
McDougal, a longtime friend and
see LEACH, page All
The Washington Times THURSDAY, MAY 12, 1994
116
THE WALL STREET JOURNAL THURSDAY, MAY 12, 1994
Arkla, Whose Ex-Chief Is Clinton Aide,
Approaches Legal Showdown With RTC
By LEE BERTON
And KENNETH H. BACON
Staff Reporters of THE WALL STREET JOURNAL
The government charges that Univer-
Arkia Inc., whose former chairman is
sity understated the thrift's probable
President Clinton's chief of staff, is mov-
losses from bad loans by at least $600
ing toward a legal showdown with the
million in late 1986 and early 1987. If
Resolution Trust Corp. over a business
University had accurately recognized
transaction the RTC calls a "sham."
these potential losses, Entex would have
The RTC says the deal eventually left
been required to pump an additional $600
U.S. taxpayers holding the bag for $2.4
million into the thrift, the government
billion in a Houston thrift's bad debts.
says. When Entex acquired University in
Far more importantly, a federal agency
The RTC has sued Arkla and others in
1977 from Robert Lanier, currently Hous-
had approved the University sale and a
Federal District Court in Houston, and
ton's mayor, the gas company promised
prestigious accounting firm had signed off
the suit is scheduled to go to trial in
regulators that it would maintain Univer-
on the accounting that made it possible. In
October.
sity's capital at legally required levels.
May 1987, the Federal Home Loan Bank of
Mr. Clinton's chief of staff, Thomas F.
Rather than request more capital from
Dallas asked Entex and University to
McLarty III, is expected next month to be
Entex, the purchasers of University con-
obtain an independent accountant's opin-
deposed by the RTC in the matter; he
verted $600 million of potential loan losses
ion that converting University's potential
hasn't been named in the suit, though the
into "good will" and capitalized the losses
loan losses into good will conformed to
RTC will be interested in what he and
as an asset on the thrift's balance sheet,
generally accepted accounting principles.
Arkla knew, if anything, about the transac-
RTC officials say.
Without this opinion, the regulators
tion. At a hearing in Houston today. Arkla
Officials at the RTC say that their suit
wouldn't have approved the sale. In a Sept.
and other defendants are expected to seek
names Arkla only because it is a "succes-
15 letter to University's board, H. William
dismissal of the suit, arguing that the RTC
sor in interest" as the purchaser of Entex.
Hardy, a partner in Houston of Arthur
hasn't given them access to necessary
The officials say they never considered
Andersen, University's auditor, provided
documents.
naming Mr. McLarty in the suit.
that opinion. Now in Mexico City for
Though the basic allegations in the case
According to prospectuses Entex and
Andersen, Mr. Hardy didn't return a phone
have been reported, significant new de-
Arkla issued in late 1987 about the deal,
call.
tails have since emerged. The transaction
that concerns the RTC occurred in 1987,
Mr. McLarty first met with Gale L. Gallo-
In talks last year. Andersen and the
when Entex Inc., a natural-gas distributor
way, then Entex's chairman, on Sept. 18,
RTC settled RTC charges that the account-
based in Houston, effectively transferred
1987, "to explore the feasibility and gen-
ing firm's work for University was profes-
to the U.S. government the financial bur-
eral outline of the structure of a possible
sionally negligent. While denying the
den of a failing Houston thrift that it
business combination." Regulators had
charges, Andersen agreed to pay the RTC
owned, University Savings Association.
granted preliminary approval to the Entex
$24.5 million and to cooperate with the
Entex urgently needed to get rid of the
plan to sell University in May, and final
agency in its current suit.
thrift to make itself more attractive to a
approval came in September.
suitor.
A Cloud Over Entex
Soon after Entex shed University,
University was clearly a cloud over
Arkla agreed to purchase the gas distribu-
Entex. Clinton Small, a former outside
tor. Mr. McLarty was then chairman of
director of University, says that Entex's
Arkla, a Shreveport, La., gas producer and
problem with the thrift was well-known.
pipeline concern that is changing its name
The RTC's suit contends it clearly had
to NorAm Energy Corp. University failed
been an issue for an earlier Entex suitor:
in 1989. and the government was left
Enserch Corp., an energy company based
to pick up the bill.
in Dallas. Though Enserch considered
The RTC filed its suit in federal court
purchasing Entex in early 1986, it ended
in Houston in 1992, seeking to recover at
the talks because of worries about "En-
least $520 million of that loss from Univer-
tex's potential obligation to University
sity's former directors and officers, and
under [Entex's] capital-maintenance
from Entex and Arkla. Mr. McLarty isn't
agreement," the suit alleges.
mentioned at all in the government's
William McCord, retired chief execu-
filings. He has asserted that he had no
tive officer of Enserch, says in an inter-
knowledge of or involvement with the
view that his company declined to pursue
Entex transaction the RTC is attacking.
the acquisition because it found the prob-
'Political Pressure' Cited
lem with University "insurmountable"
Mr. McLarty has said that the govern-
and concluded that Entex, or any company
ment is suing Arkla unfairly, just because
acquiring it, couldn't escape any potential
it has money. This is "another case where
burden merely by selling University.
the Resolution Trust Corp. is chasing 'deep
Others also saw problems. In late 1986,
pockets' in response to political pressure,"
Entex retained Merrill Lynch & Co. to
he complained in a letter to Arkla stock-
study ways to dispose of University. Mer-
holders while he was still chairman. Mr.
rill Lynch found that University faced at
McLarty declined to answer questions
least $680 million of probable losses from
from this newspaper before giving his
troubled joint ventures and loans.
deposition.
In a letter to Entex, Lawrence Uhl, a
The suit charges that Entex obtained
Merrill Lynch managing director, said
regulatory approval to sell University to its
that "the likelihood of a sale of University
own management without disclosing "the
to a legitimate purchaser, on terms mutu-
material fact" that "Arkla was waiting in
ally acceptable to both parties, is currently
the wings to buy Entex stock for over $500
low." Mr. Uhl declines to comment fur-
ther.
million if Entex could get rid of its capital-
maintenance obligations to University."
By the time Arkla bought Entex, it had
According to the RTC suit, Entex made
shed University and others approved the
a $30 million loan to a group of University
acquisition. According to legal documents
executives and directors, enabling them to
filed with the Securities and Exchange
buy the thrift. Only a month later, Entex
Commission in 1987, Arkla paid Kidder,
wrote off the loan, raising questions about
Peabody & Co. $500,000 to review the
how seriously it expected to be repaid in
proposed Entex acquisition. The firm
the first place.
called Arkla's $577 million offer for Entex
"fair
from a financial point of view."
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