A L S O+T O D A Y Dr. Jekyll and Mr. Starr By Gary Kamiya When the real Kenneth Starr finally stood up before the House, he turned out to have a split personality Starr Wars By Joan Walsh The Democrats strike back Nothing has changed Compiled by Lori Leibovich and Fiona Morgan The consensus of political experts is that no minds were changed by Starr's day in court Dear Ken The full text of ethics advisor Sam Dash's letter of resignation to Kenneth Starr Starr speaks The full text of independent counsel Kenneth Starr's House Judiciary Committee testimony A dozen questions Congress should ask Kenneth Starr By David Talbot, Murray Waas and Joan Walsh (11/18/98)   T A B L E+T A L K Discuss Ken Starr and his testimony in the Politics area of Table Talk   R E C E N T L Y Same Old Party By Joshua Micah Marshall New leadership can't mend the rifts among Republicans in Congress (11/19/98) Reply to C.D. Ellison By David Horowitz It's time for blacks to have a two-party system, too (11/19/98) Toppling Saddam By Frank Smyth Clinton wants a new government in Baghdad, but he and the Iraqi opposition are unlikely to be up to the task (11/18/98) Brother on brother By Murray Waas Whitewater witness David Hale attempted to suborn perjury by his own brother by asking him to falsely corroborate illegal acts by President Clinton (11/17/98) The mark of Cain: a tale of two brothers By Murray Waas Though they traveled the same path from the family dirt farm through law school, the Hale brothers turned out different as night and day (11/17/98) - - - - - - - - - - - - - - - - Browse the Newsreal Archives - - - - - - - - - - - - - - - - - - - - - - - - - - S A L O N E M P O R I U M FREE! 12-ounce bag of Salon Blend with a purchase of $30 or more. While supplies last.
		STARR SPEAKS | PAGE 1, 2,3, 4, 5, 6, 7, 8,9, 10, 11, 12,13, 14, 15, 16, 17, 18, 19, 20 , 21, 22 - - - - - - - - - - The FBI files matter; and for the Lewinsky investigation, as well as for a variety of obstruction and related matters that arose out of those five major investigations. A very brief overview of those investigations may assist the committee in its assessment of the president's conduct. First, some statistics. The chairman noted that the investigation has resulted in conviction of 14 individuals, including the former Associate Attorney General of the United States, Webster Hubbell, the then- sitting Governor of Arkansas, Jim Guy Tucker, and the Clintons' two business partners, Jim and Susan McDougal. Committee sent our office public criminal referrals on several individuals. The committee stated in its June 21, 1996, public letter that the testimony of Susan Thomas' was "particularly troubling and suggests a possible violation of law." But this office did not seek charges against her. Apart from indictments and convictions, this office has also faced an extraordinary number of legal disputes -- on issues of privilege, on jurisdiction, substantive criminal law and the like. By my count, pardon me, at least 17 of our cases have been decided by the federal courts of appeals, and we have been fortunate in prevailing in all 17. One privilege two to one decision and then to the Supreme Court where we lost by a six to three decision. We had to litigate in the courts as our investigation ran into roadblocks and hurdles that slowed us down. It is true that the administration produced a great amount of information, but unlike the prosecutors in the investigations involving Presidents Carter and Reagan, we have been forced to go to court time and time again to seek information from the executive branch and to fight a multitude of privilege claims asserted by the administration -- every single one of which we have won. In sum, the office where I serve has achieved a superb record in courts -- of law of significant and hard-fought convictions, of fair and wise decisions not to charge, of thorough and accurate reports on the Vincent Foster death and the Monica Lewinsky matters, of legal victories in various courts. We go to court and not on the talk show circuit. And our records show that there is a bright line between law and politics, between courts and polls. It leaves the polls to the politicians and the spin doctors. We are officers of the court who live in the world of law. We have presented our cases in court and, with very rare exception, we have won. The center of all this, the core of our Arkansas-based investigation, was Madison Guaranty Savings & Loan. Madison was a federally insured savings & loan in Little Rock, Arkansas, run by Jim and Susan McDougal. Like many savings & loans in the 1980s, Madison was fraudulently operated. STARR: Mrs. Clinton and other lawyers at the Rose Law Firm in Little Rock performed legal work for Madison in the 1980s. Madison first received attention in March 1992 when a New York Times report raised several issues about the relationships between the Clintons and the McDougals in connection with Madison Guaranty. Federal bank examiners examined Madison in 1992 and 1993, and the regulators sent criminal referrals to the Justice Department. And the Justice Department then launched a criminal investigation of Madison Guaranty in November 1993. In part because of the relationship of the Clintons to the McDougals, Attorney General Reno appointed Bob Fiske in January 1994. I was appointed independent counsel in August 1994 to continue the investigation. Madison exemplified the troubled practices of savings and loans in the 1980s. The failure of the institution ultimately cost federal taxpayers approximately $65 million. Congresswoman Waters put it this way in a 1995 hearing: "By any standard, Madison Guaranty was a disaster.... It gambled with investments, cooked the books and ultimately bilked the taxpayers of the United States.... Madison," she went on, "is a metaphor for the S&L crisis." The McDougals' operation of Madison raised serious questions whether bank funds had been used illegally to assist business and political figures in Arkansas, such as Jim Guy Tucker, the governor- to-be, and the then governor, Governor Clinton. As to the Clintons, the question arose primarily because they were partners with the McDougals in the Whitewater Development Company. The Whitewater Corporation initially controlled and developed approximately 230 acres of property on the White River in Northern Arkansas. Given Jim McDougal's role at the center of both institutions and given Whitewater's constant financial difficulties, there were two important questions: Were Madison funds diverted to benefit Whitewater? If so, were the Clintons either involved in or knowledgeable of that diversion of funds? Those questions were not idle speculation. In early 1994, a Little Rock judge and businessman, David Hale, pled guilty to certain unrelated federal crimes. As part of his plea, David Hale told Mr. Fiske's team that he had received money as a result of a loan from Madison in 1986. He said that his company loaned it to others as part of a scheme to help some members of the Arkansas political establishment. One loan of $300,000 went to Susan McDougal's make-believe company, which she called Master Marketing. Based on our investigation, we now know that some $50,000 of the proceeds of that loan went to benefit the Whitewater Corporation. David Hale stated that he had discussed the Susan McDougal loan with then-Governor Clinton, including at a meeting in 1986 with Jim McDougal and the governor. In August 1994 when I first arrived in Little Rock, and building on Mr. Fiske's work, we devised a plan. First, based on the testimony of David Hale and others, as well as documentary evidence, we would take steps, if appropriate, if the evidence warranted, to seek an indictment of Jim and Susan McDougal and others involved in what clearly appeared to be criminal transactions. If a Little Rock jury convicted the McDougals or others, we would then obtain their testimony and determine whether they had other relevant information -- including, of course, whether the McDougals possessed information that would either exonerate or incriminate the Clintons as to Madison and Whitewater matters. This approach was the time-honored and professional way to conduct an investigation. We garnered a number of guilty pleas in my first year. One was from Webster Hubbell, who had worked at the Rose Law Firm and was knowledgeable about its work with Madison, including that of Mrs. Clinton as a lawyer at the Rose Firm. In addition, Robert Palmer, a real estate appraiser, pled guilty to fraudulently doctoring Madison documents to deceive federal bank examiners. Three other associates of McDougal pled guilty and agreed to cooperate. In August 1995, a year after I was appointed by the Special Division, a federal grand jury in Little Rock indicted Jim and Susan McDougal and the then-sitting Governor of Arkansas, Jim Guy Tucker. The case went to trial in March 1996 amid charges by all three defendants and their allies that the case was a political witch hunt. Some predicted that an Arkansas jury would never convict the sitting governor. These expectations were heightened when Governor -- excuse me -- when President Clinton was subpoenaed as a defense witness in Governor Tucker's trial. The president testified for the defense from the Map Room of the White House. During his sworn testimony, the president testified, as a defense witness, that did not know about the Susan McDougal loan nor had he ever been in a meeting with Hale and McDougal about the loan. He also testified that he had never received a loan from Madison. This was important testimony. Its truth or falsity went to the core issue of our investigation. On May 28, 1996, all three defendants were convicted -- Jim McDougal of 18 felonies, Susan McDougal of four felonies, and Governor Tucker of two felonies. Governor Tucker announced his resignation that day. After his conviction, Jim McDougal began cooperating with our investigation. We spent many hours with him gaining additional insights and facts. He informed our career investigators and prosecutors that David Hale was accurate. According to Jim McDougal, President Clinton had testified falsely at the McDougal-Tucker trial. Jim McDougal testified he had been at a meeting with David Hale and Governor Clinton about the Master Marketing loan. And Jim McDougal testified that Governor Clinton had received a loan from Madison. Jim McDougal said on one of his first sessions with our office following his conviction that the president's trial testimony was, in his words, "at variance with the truth." In late 1997... JACKSON-LEE: Mr. Chairman, I have a point of order. HYDE: The gentlelady -- I would appreciate it if she wouldn't interrupt, but go ahead and state your point. JACKSON-LEE: Thank you very much, Mr. Chairman, and I appreciate the need for us to proceed, and I want to proceed fairly. That's all I'm asking for. HYDE: I'm sure you do. JACKSON-LEE: Mr. Chairman, I have stated earlier my objections to, one, hearsay, but frankly, the direction of the testimony. Frankly, I raise again the question of germaneness with respect to representations on Whitewater and Madison Guaranty and due process, Mr. Chairman. I think this testimony is inappropriate. There is no attempt to cover up, but I do not have before me a referral from Mr. Starr or any of this deputies on the question of Whitewater, Filegate or Travelgate. Mr. Chairman, this testimony is not germane, and it is a denial of due process. HYDE: I thank the gentlelady. This committee hearing is being conducted pursuant to notice -- pursuant to House resolution 581. That resolution directs the committee to -- and I quote -- "investigate fully and completely whether sufficient grounds exist for the House of Representatives to exercise its constitutional power to impeach William Jefferson Clinton, president of the United States of America" -- close quote. That is the wide-open range that we have given ourselves in this resolution in contradistinction to the Democratic resolution which wanted a narrow inquiry. That very issue was -- was debated and voted on. And so the gentleman -- the witness testimony is perfectly germane and consonant with House resolution 581, and therefore, the gentlelady's point of order is overruled and the witness will continue. JACKSON-LEE: Mr. Chairman, I would like to appeal the ruling of the chair. on the question of Whitewater, Filegate or Travelgate. Mr. Chairman, this testimony is not germane, and it is a denial of due process. HYDE: I thank the gentlelady. This committee hearing is being conducted pursuant to notice -- pursuant to House resolution 581. That resolution directs the committee to -- and I quote -- "investigate fully and completely whether sufficient grounds exist for the House of Representatives to exercise its constitutional power to impeach William Jefferson Clinton, president of the United States of America" -- close quote. That is the wide-open range that we have given ourselves in this resolution in contradistinction to the Democratic resolution which wanted a narrow inquiry. That very issue was -- was debated and voted on. And so the gentleman -- the witness testimony is perfectly germane and consonant with House resolution 581, and therefore, the gentlelady's point of order is overruled and the witness will continue. JACKSON-LEE: Mr. Chairman, I would like to appeal the ruling of the chair. BRYANT: Mr. Chairman. Mr. Chairman. HYDE: Would you consult with your ranking member and see if... BRYANT: Mr. Chairman, I'd like to vote on that ruling. JACKSON-LEE: I will withdraw that, but I state made my objection. HYDE: The gentlelady has renounced... BRYANT: (OFF-MIKE)... HYDE: Please, we're trying to move along. And I appreciate the... JACKSON-LEE: In the sense of comity, Mr. Chairman, I withdraw my desire for a vote. BRYANT: Mr. Chairman, I just asked for a vote, that's all. HYDE: Well, I'm going to deny my friend, Mr. Bryant's request, and then you and I can struggle over the noon hour. But I would like to move ahead. Thank you. JACKSON-LEE: Mr. Chairman, is my objection registered? HYDE: Oh indeed, it's registered -- twice. (LAUGHTER) JACKSON-LEE: Thank you, Mr. Chairman. HYDE: And we'll register it every half hour, if you would like. (LAUGHTER) JACKSON-LEE: Thank you, Mr. Chairman. Thank you. HYDE: The witness will continue please. STARR: Thank you, Mr. Chairman. In late 1997, we -- in our office -- considered whether this evidence that I just described justified a referral to Congress. We drafted a report. But we concluded that it would be inconsistent with the statutory standard because of the difficulty of establishing the truth with a sufficient degree of confidence. We also weighed a prudential factor in reaching that decision. There were still two outstanding witnesses who might later corroborate or contradict the McDougal and Hale accounts: Jim Guy Tucker and Susan McDougal. In 1998, we were finally able to obtain information from Governor Tucker. It had taken four long years to hear from the governor. He pled guilty in a tax conspiracy case, and he ultimately testified before the Little Rock grand jury in March and April of this year. But he had little knowledge of the loan to Susan McDougal's fictitious company and the president's possible involvement in it. He did shed light on the overall transactions involving Castle Grande and Madison. Importantly, as to one subject, Governor Tucker exonerated the president, regarding longstanding questions whether the president and Governor Tucker had a conversation about the Madison referrals in the White House in October 1993. The governor exonerated the president. The remaining witness who perhaps could shed light on the issue was Susan McDougal, and therein lies a story that has caused literally years of delay and added expense to the investigation. Because the proceeds from the fraudulent loan that Susan McDougal received had benefited the Clintons -- the proceeds were to use to pay off obligations of the Whitewater development company for which the Clintons were potentially personally liable. Susan McDougal was subpoenaed to testify before the grand jury in August 1996. She was asked several questions going to the very heart of the investigation, including these: "Did you ever discuss your loan from David Hale with William Jefferson Clinton? To your knowledge, did William Jefferson Clinton testify truthfully during the course of your trial?" Susan McDougal refused to answer any of the questions. "To your knowledge, did William Jefferson Clinton testify truthfully during the course of your trial?" Susan McDougal refused to answer any questions. District Judge Susan Webber Wright in Little Rock then held her in civil contempt, a decision later upheld unanimously by the United States Court of Appeals in St. Louis. The month of September 1996 thus was a crucial time for our office in its attempt to obtain Susan McDougal's lawful testimony. On September 23, 1996, just two weeks after Ms. McDougal had been found in contempt by Judge Wright, President Clinton was interviewed on PBS. The president said, "There's a lot of evidence to support," his words, "various charges that Susan McDougal had made against our office." But the president cited no evidence. The president's comments can reasonably be described as supportive of Ms. McDougal's decision to disobey the court order. So far as we are aware, no sitting president ever has publicly indicated his agreement with a convicted felon's stated reason for refusing to obey a federal court order to testify. Essentially, the president of the United States, the chief executive, sided with a convicted felon against the United States, as represented by United States District Judge, now Chief Judge Susan Webber Wright, the United States Court of Appeals for the Eighth Circuit and our office. The president was also asked in the interview whether he would consider pardoning Ms. McDougal. The president refused to rule out a pardon. The president's answers to these questions were roundly criticized. A New York Times editorial captured the point well, stating that the president's remarks "undercut a legal process that is going forward in an orderly way." N E X T+P A G E+| Webster Hubbell and Vincent Foster - - - - - - - - - - - - - - - - - Become a Salon member. Click here.