The first lady's lost Whitewater billing records were supposed to be the smoking gun that would lead to her indictment. Instead, they corroborated her claims of innocence.
Almost from the outset of his presidency, the hunters of Bill Clinton were simultaneously in hot pursuit of his controversial wife, Hillary Rodham Clinton. As a former partner in the Rose Law Firm and as the steward of her family’s tangled finances, the first lady drew fire not only from the Washington press corps but from Kenneth Starr’s chief deputy in Arkansas, W. Hickman Ewing Jr., a conservative Republican whose prosecutorial energy had always included a tinge of fundamentalist zeal.
Ewing’s moral certainty about Hillary Clinton’s guilt soon seeped into the media coverage of the Clinton “scandals.” With an unseemly eagerness, Clinton critics in the press began to trumpet rumors of her impending indictment. And when a set of long-misplaced billing records from the Rose firm were found in the White House, the crescendo of accusations reached a frenzied pitch.
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After a few years in solo law practice, Hickman Ewing Jr. got a call in late August 1994 from Kenneth Starr, who had just been appointed Whitewater independent counsel. They met at a McDonald’s restaurant in Brinkley, Arkansas, and Ewing quickly accepted the position as Starr’s senior deputy, even though it meant living in Little Rock during the week and commuting home to his family in suburban Memphis on weekends. He had the right attitude for the Office of Independent Counsel, guided always by his trained ability to sense guilt, as he told the New Yorker’s Jeffrey Toobin years later.
As early as the spring of 1995, Ewing testified years later, he had drawn up a draft indictment against Hillary Rodham Clinton and circulated it to other lawyers in the OIC. He said the document was based upon a sworn statement she had given that April “about her representation of Madison Guaranty when she was at the Rose Law Firm: How the business came in, what work she performed, and how the retainer was returned.” During his testimony at Susan McDougal’s contempt trial in 1999, Ewing also admitted that he had taken to making quasi-public pronouncements about the first lady’s guilt. He recalled, “We were eating dinner one night, and somebody said, ‘How do you grade them?’ I think the President was about a ‘C’ and Mrs. Clinton was about an ‘F’.”
On December 19, 1995, the morning after the Wall Street Journal’s comprehensive news summary of the Pillsbury Report’s findings absolving the Clintons, a front-page article appeared in the New York Times indicating that the first lady was in serious trouble. Written by Stephen Labaton, the story appears likely to have relied upon Ewing or other Starr deputies as sources. It confidently laid out a case for two possible felony courts against Hillary: perjury and obstruction of justice. Labaton repeated Jim McDougal’s account of Bill Clinton jogging over to Madison Guaranty’s office in the summer of 1984 to solicit legal business for Hillary because the couple needed cash. But the real bombshell in the Times article was the supposed contradiction between Hillary’s account of how her law firm came to represent Madison Guaranty and that of a former colleague named Rick Massey.
“Mrs. Clinton said in a sworn statement this year,” wrote Labaton, “that Mr. Massey, then a first year associate at the Rose firm, had been contacted by a friend at Madison, John Latham, with a request for legal help … Mr. Massey, who is now a partner at the Rose firm, told Federal investigators he ‘does not know how or why Madison selected the Rose Law Firm,’ according to a summary of his October 1994 interview with the Federal Deposit Insurance Corporation.”
Even more damning was a “Nightline” report broadcast that same evening. The segment came very close to branding Hillary Clinton a perjurer. In his introduction, host Ted Koppel spoke pointedly about “the reluctance of the Clinton White House to be as forthcoming with documents as it promised to be.” He then turned to correspondent Jeff Greenfield, who posed a rhetorical question: “Hillary Clinton did some legal work for Madison Guaranty at the Rose Law Firm, at a time when her husband was governor of Arkansas. How much work? Not much at all, she has said.”
Up came a video clip from Hillary’s April 22, 1994, Whitewater press conference. “The young attorney, the young bank officer, did all the work,” she said. “It was not an area that I practiced in. It was not an area that I know anything, to speak of, about.” Next the screen filled with handwritten notes taken by White House aide Susan Thomases during the 1992 campaign. “She [Hillary] did all the billing,” the notes said. Greenfield quipped that it was no wonder “the White House was so worried about what was in Vince Foster’s office when he killed himself.”
What the audience didn’t know was that the ABC videotape had been edited so as to create an inaccurate impression. At that press conference, Mrs. Clinton had been asked not how much work she had done for Madison Guaranty, but how her signature came to be on a letter dealing with Madison Guaranty’s 1985 proposal to issue preferred stock. ABC News had seamlessly omitted thirty-nine words from her actual answer, as well as the cut, by interposing a cutaway shot of reporters taking notes. The press conference transcript shows that she actually answered as follows: “The young attorney [and] the young bank officer did all the work and the letter was sent. But because I was what we called the billing attorney — in other words, I had to send the bill to get the payment sent — my name was put on the bottom of the letter. It was not an area that I practiced in. It was not an area that I know anything, to speak of, about.”
ABC News had taken a video clip out of context, and then accused the first lady of prevaricating about the very material it had removed. Within days, the doctored quotation popped up elsewhere. ABC used the identical clip on its evening news broadcast; so did CNN. The New York Times editorial page used it to scold Mrs. Clinton, as did columnist Maureen Dowd. Her colleague William Safire weighed in with an accusatory column of his own: “When you’re a lawyer who needs a cover story to conceal close connections to a crooked client,” he began, “you find some kid in your office willing to say he brought in the business and handled the client all by himself.” Safire predicted the first lady’s imminent indictment.
What really made the story take off, however, was White House aide Carolyn Huber’s belated discovery of missing Rose Law Firm billing records that had been under subpoena by the OIC. The time sheets had been used by the 1992 Clinton campaign to respond to reporters’ questions, and then disappeared. For weeks, Republicans on the Senate Whitewater committee had spoken darkly of obstruction of justice. On January 4, 1996, Huber found the missing documents in a box in her office at the Old Executive Office Building. She called the Clintons’ lawyer, David Kendall, who immediately made copies and sent the originals to Kenneth Starr. Actually, the documents Huber found weren’t themselves originals, but photocopies of computer printouts made in 1992. Nobody who wanted to hide them could have any way of knowing how many additional copies might be floating around. Nor was Mrs. Huber, an Arkansas loyalist who supervised the Clintons’ personal correspondence, certain where she had found the documents, at least according to Kendall.
In her subsequent Senate testimony, however, the former office manager at the Rose Law Firm was unequivocal. Huber recalled coming upon the time sheets in August 1995 in the “book room” on the third floor of the White House, inside the Clintons’ private quarters. Without looking to see what they were, she had stuck them in a box and taken them to her office for later filing. Then in January 1996, she had opened the box and gotten scared.
How she could be sure they were the same papers without having examined them in the first place was never clear. Putting the 1992 campaign records in order and storing them was one of Huber’s secondary tasks at the White House. Kendall later testified that when Huber first contacted him, “She said a number of different things that were inconsistent. She was flustered. She was upset. Her hands were shaking. She said that she had brought the documents over from the residence at some earlier point. She said she thought it was maybe three months ago. A little while later in the conversation, she referred to bringing them over ten months ago. She was very confused about the timing … She was unclear about where she had found them … Her stories were extremely vague.” Kendall’s co-counsel Jane Sherburne remembered the same thing. But the lawyers hadn’t pressed Huber on the issue because they didn’t want to be accused of trying to influence her testimony.
Here at last was a dramatic Whitewater event that even the dullest voter could grasp. Kenneth Starr lost no time hauling the first lady before a Washington grand jury in the most public manner possible, prompting press commentary about a “smoking gun.” The irrepressible Safire predictably saw Nixonian skullduggery: “Can you imagine the sinking feeling in the ‘Someone,’ when he or she came back to the Book Room and found the records gone?” Newsweek’s Michael Isikoff went further. “The printouts were covered with the late Vince Foster’s handwriting,” he wrote, continuing, “it is Foster’s suicide that lends Whitewater its aura of menace.”
Hillary Clinton emerged from Starr’s grand jury to say that she had no idea where the billing records had come from, but was glad they had turned up — perhaps because they provided only exculpatory evidence. Along with Vince Foster’s handwriting, FBI fingerprint analysts found his fingerprints, as well as those of the first lady. Hers were found only on those pages dealing with issues discussed during the 1992 campaign — but not on topics of more recent interest, such as the ill-fated McDougal real estate development and shopping center known as “Castle Grande.” All the forensic evidence suggested that the billing records had in fact been misplaced ever since the 1992 election.
The records’ contents also supported Hillary’s testimony and public statements in detail. In her sworn statements to RTC investigators, she had recalled only a single phone conversation with Securities Commissioner Beverly Bassett Schaffer regarding the Madison Guaranty preferred stock issue. The records showed exactly one, on April 29, 1985.
Asked whether she had done any work on McDougal’s “Castle Grande” development, she had replied no. Republicans charged that an unused 1985 real estate document she had prepared for Webb Hubbell’s father-in-law contradicted her. But the billing records, like all internal Rose Law Firm documents, referred to that transaction not as Castle Grande but as “the IDC matter.”
A small part of a large parcel of land Madison Guaranty bought from a company called the Industrial Development Corporation later became known as “Castle Grande” — but not the part described in the document Hillary Clinton had prepared. Her answer was accurate. After studying the newly found billing records, the investigators at Pillsbury, Madison & Sutro came back with an even stronger conclusion that nobody at the Rose Law Firm had done anything unethical or illegal in their representation of McDougal’s savings and loan. Regarding the unused real estate contract, the report stipulated that “while Mrs. Clinton drafted the May 1, 1986, option, nothing proves she did so knowing it to be wrong, the circumstances of the work point strongly toward innocent explanations, and the theories that tie this option to wrongdoing … are strained at best.”
Starr’s investigators would spend years seeking evidence to the contrary, with no success.
In January 1996, however, such exculpatory facts received no attention in the press. To hype their excerpt from James B. Stewart’s forthcoming Whitewater book “Blood Sport,” the editors of Time magazine ran a cover photo of the first lady that looked like a post office “Wanted” poster. Time columnist Richard Stengel opined that “Hillary Rodham Clinton now faces a crisis that even the most artful public relations may not be able to fix.” Stengel predicted that the stage was set for high drama at the Whitewater hearings. “Mrs. Clinton has stated that the lion’s share of the work on Madison was done by a ‘bright young associate’ named Richard Massey. Mrs. Clinton also implied in a sworn statement to the RTC in May 1995 that Massey brought Madison’s business to the firm. Committee sources tell Time that Massey will testify this week that he did not bring Madison in as a client, and that he assumed Mrs. Clinton was involved.”
And in the New York Times, William Safire advised the president that the time had come to hire himself a separate criminal defense lawyer, because his wife was going to jail.
All such expectations were dashed when the first lady’s soft-spoken, balding former partner Rick Massey appeared before the D’Amato committee on January 11. Not only did Massey fail to contradict Hillary’s testimony; any tighter fit between their recollections would have been suspect. As a twenty-six-year-old associate at the Rose Law Firm, Massey said, he had taught a night course in securities law at the University of Arkansas in Little Rock. Among those enrolled was a Madison Guaranty officer named John Latham, whom Massey had known in college. During the semester, Latham began staying after class to ask Massey’s advice about raising new capital for the thrift.
“I should say for the record,” Massey testified, “that I asked him to lunch one day and I pitched the business, asked for their work. They were a growing S&L. We liked working for companies like that, so I pitched the work … I think the pitch was basically, ‘Gee, you’re asking me all these questions. Why don’t you hire us and put us to work on these things?’”
The only problem had been Jim McDougal’s tardiness in paying the bills for legal work that the Rose firm had done for him several years earlier. Certain partners objected to taking him on as a client again without a prepaid retainer. So the firm had sent Hillary Clinton to meet with McDougal on April 23, 1985, to see whether such an arrangement could be made. Madison Guaranty agreed to a $2,000 per month advance against billings, and the work arrived on Rick Massey’s desk the next day. What Massey had been unable to remember, eleven years after the fact, was whether he had first approached Hillary about taking up the payment issue with McDougal, or whether she had approached him — a question of no consequence. Such was the pretext upon which deputy independent counsel Ewing proposed to indict the first lady of the United States for perjury.
As to who had done all the work on the preferred stock matter, Massey was unequivocal. Based upon his review of the billing records, he told Senator Connie Mack of Florida that “these were primarily one-man jobs, and I did primarily all of the research, writing, drafting, and so forth. Mrs. Clinton had a role in these matters. I view it as a supervisory role. In terms of who was in the trenches and doing the work, Senator, it was me.”
Concerning the preferred stock deal itself, the allegedly illicit transaction the New York Times had placed at the center of the “scandal,” Massey’s explanation was simple. As Arkansas state officials had tried to show reporter Jeff Gerth four years earlier, the idea of selling stock in thrift institutions was first proposed by the Federal Home Loan Bank Board. “Sir, there is no better form of capital than cash,” said Massey, “and we were trying to raise cash for the institution.”
Not much of this was conveyed by the same journalists who had failed to notice L. Jean Lewis’s fainting spell. “AT WHITEWATER SESSION, A STRUGGLE TO RECALL,” read the headline in the New York Times. “In five hours of testimony before the Senate Whitewater committee,” wrote Stephen Labaton, “a lawyer for Hillary Rodham Clinton’s law firm said today that he could not remember events of 11 years ago clearly enough to support the First Lady’s account of how the firm came to represent a troubled Arkansas savings and loan association.” The Times account did mention Massey’s luncheon pitch to his college friend, but concluded by pointing the finger of suspicion back at an implicitly corrupt bargain between Jim McDougal and Bill Clinton to funnel cash into Hillary’s pocket.
A similar account appeared in the Washington Post under the byline of Susan Schmidt. Massey, she wrote, testified “that he does not believe that he was responsible for signing up Madison as a client, as [Mrs. Clinton] has asserted … .She has said Massey came to her with a proposal for a stock plan to help Madison raise capital after meeting with Madison president John Latham. She said he asked her to work as the firm’s billing partner and work with James B. McDougal, the S&L’s owner, to resolve a past billing dispute Rose had with him. “I don’t believe it happened that way,” Massey said.
When investigators for Pillsbury, Madison & Sutro issued their final report on February 25, they concluded that the minor discrepancies between the recollections of Rick Massey and Hillary Clinton weren’t worth quibbling over. Moreover, “the purported recollections of Jim McDougal are inconsistent with those of the others and upon analysis make little sense.” Contrary to McDougal’s story, the retainer agreement didn’t begin until work on the preferred stock issue started — almost a year after the purported “jogging” incident. “Most significantly,” the report concluded, “the alleged economic motivation makes no sense … There is no evidence that the Clintons ever received anything like $2,000 a month from this engagement, and every reason to believe that they never received more than a trivial sum of money … Even if all the retainer had been earned in fees, Mrs. Clinton’s share would have been less than $20 a month.”
On the evening of Massey’s testimony, “Nightline” aired key portions that made its real import clear. This time Ted Koppel made a point of emphasizing that few, if any, of Senator D’Amato’s dire predictions had turned out to be accurate. On Saturday, January 13, the New York Times ran an “Editor’s Note” stipulating that Stephen Labaton’s story on Massey’s appearance “should have included testimony that seemed to support” Hillary Clinton — a halting clarification, but a clarification all the same.
The manifest failure of the monthlong assault on Hillary Clinton to yield evidence of wrongdoing was not ignored everywhere. New York Times columnist Anthony Lewis became the first important voice at his newspaper to break ranks. “Three years and innumerable investigations later,” he wrote on January 15, “Mrs. Clinton has not been shown to have done anything wrong in Whitewater. One charge after another has evaporated.”
Lewis compared D’Amato’s performance to that of Senator Joseph R. McCarthy during the anti-Communist witch-hunts of the fifties. But Lewis noted one major difference. “On Whitewater, the press too often seems an eager accomplice of the accusers … Some of the coverage of Whitewater reads as if the reporters or editors were committed to finding something wrong — as if they had an investment in the story.”
Arkansas Times columnist Gene Lyons is a National Magazine Award winner and co-author of "The Hunting of the President" (St. Martin's Press, 2000). You can e-mail Lyons at firstname.lastname@example.org. More Gene Lyons.
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