See some evil, hear some evil ...

A reporter who has been following the Whitewater investigation from the start finds Kenneth Starr giving a free pass to people who have lied and broken the law, so long as they testify against President Clinton.

Published March 30, 1998 8:00PM (EST)

LITTLE ROCK, Ark. --The impeachment drums heard along the Potomac have fallen quiet since Paula Jones' lawsuit against President Clinton was tossed out by a Republican judge last week. Still, independent counsel Kenneth Starr soldiers bravely on, wrapping himself in the mantle of Sgt. Joe Friday, vowing to get to the "facts" as they pertain to Whitewater, travelgate, filegate and Monica Lewinsky.

And if there are doubts aplenty, even among Republicans, that Starr, after nearly four years of trying, will ever get there, there are no doubts among his supporters about the man's rectitude. The lead editorial in Sunday's New York Times, titled "Fairness for Ken Starr" again reminded us that Starr, for all his public relations mistakes, is the man to be trusted to get to the bottom of the Clinton scandals. His acolytes in the Washington press corps -- like Nina Totenberg of National Public Radio, who regards the independent counsel as her "friend and colleague" -- can scarcely enumerate his virtues: modest, studious, temperate, judicious, fair-minded and devout, a man of spotless integrity and matchless dedication to the rule of law.

But to others, who have followed his $30 million march from the land tracts of Arkansas to the bookstores of Washington, D.C., Starr smacks more of Oliver Cromwell than Oliver Wendell Holmes. Not only have his moves had a distinctly political tinge, they may even be in violation of the rule of law.

Let us look, for example, at the independent counsel's handling of four witnesses -- banking investigator L. Jean Lewis, Arkansas troopers Roger Perry and Larry Patterson and chief Whitewater witness David Hale. Thanks in large part to the assiduous efforts of Starr's pet reporters at the New York Times and the Washington Post, Starr's efforts to protect this odd quartet have escaped critical scrutiny. Yet persuasive evidence exists, on the public record, that all four have lied under oath for political or other self-serving motives. To expose them would be to expose Starr's clear indifference to the truth.

David Hale. The "scandal" Starr was originally appointed to investigate essentially began in response to Hale's media-amplified charges that Clinton, when governor of Arkansas, "pressured" Hale to make a fraudulent $300,000 loan to James McDougal's wife, Susan, ostensibly for the benefit of the failing Whitewater land development.

At the bank fraud trial of Jim and Susan McDougal and Arkansas Gov. Jim Guy Tucker in 1996, the president testified that he'd never had a substantive conversation with David Hale, anywhere, any time. Clinton's testimony stands unrefuted to this day.

Assuming that Starr's prosecutors at that trial believed any of Hale's own testimony, they appear to be the only courtroom observers who did -- contrary to how the national press has assessed Hale's contribution to the case. Jurors unanimously told reporters they hadn't believed a word Hale said against the president, and believed he'd fabricated his claims against Clinton as part of a strategy to protect himself.

To understand why they came to that conclusion, it helps to know how Hale got into trouble in the first place.

As the owner-proprietor of a federally sponsored Small Business Investment
Corporation, Hale embezzled some $2.02 million from the government
essentially by making phony loans to non-existent companies set up by him
and his accountant, Robert Boyce. Those loans would then go into default,
and the cash would go into Hale's pocket. Altogether, 13 of 57 companies
lent money
by Hale's Capital Management Services were dummy corporations with the same
address as the lending company itself. Hale and several co-conspirators
also ran a number of complex real estate scams in order to generate paper
profits that the Small Business Administration matched on a 3-to-1
basis. It was an elaborate confidence game, pure but not so simple.

After FBI agents, tipped off by SBA investigators, raided his office
on July 21, 1993, Hale found himself in deep trouble. In an attempt to
extricate himself, he hired the law partner of Clinton's longtime
political enemy in Arkansas, Sheffield Nelson, and began to make the claim
that Clinton and Jim Guy Tucker made him do it.
Faced with a Clinton-appointed U.S. attorney who insisted that he
plead guilty to at least one felony before she'd agree to hear his
allegations against the president, Hale came up with a preposterous
dog-ate-my-homework tale to the effect that he'd once had documentary
evidence of Clinton's participation in the illegal $300,000 loan, but
that FBI agents or career federal prosecutors stripped the file.
narrated this fiction to anybody who would listen back in November 1993.

Republicans on the Senate Whitewater committee bought into this
story sufficiently to summon two assistant U.S. attorneys to Washington to
take their depositions. A career prosecutor named Fletcher Jackson
categorically denied ever seeing any such documents as Hale described, and
very much doubts they ever existed. Republicans decided
against calling him and his colleague Brent Bumpers, son of U.S. Sen.
Dale Bumpers, D-Ark., before the Whitewater committee.

Starr managed somehow to prevent Hale from mentioning his
absurd allegation in front of the Whitewater grand jury. Had Hale's
allegations been aired, jurors at the Tucker-McDougal trial would have
heard federal law enforcement officials taking the witness stand to call
Hale a liar. And somehow Starr appears to have
persuaded the official Whitewater media to ignore the story, although Hale
recently repeated the purloined
documents tale to Associated Press reporter Pete Yost.

"The file on the $300,000 loan was three to four inches thick when
the FBI took it," Hale told Yost. "But when my attorney and I asked to see
it a month or so later, the U.S. attorney's office gave us maybe an inch of
stuff." So why no New York Times or Washington Post headlines reading, "Key
Witness Claims FBI, Clinton-appointed Federal Prosecutors Hid Evidence in
Whitewater Probe"? Good question.

Courtesy of Salon's
Murray Waas and Jonathan Broder
, we now learn that, accompanied by FBI
agents under Starr's control, Hale made regular visits during 1995 and 1996
to a Hot Springs, Ark., fishing camp owned by one Parker Dozhier. There
met with, and was debriefed by, operatives of right-wing billionaire
Richard Mellon Scaife's so-called Arkansas Project, affiliated with the
American Spectator magazine. Dozhier's former girlfriend Caryn Mann, her
17-year old son and two sources at the magazine charge that he made surreptitious cash
payments to Hale, Starr's ace witness.

Meanwhile, Starr has stubbornly clung to Hale, portraying him as a
born-again, repentant truth teller. Starr not only arranged for
a reduction in Hale's prison term but also recommended that
he be relieved of the burden of repaying the millions he stole.

Last week, Starr's office did not respond to this reporter's inquiry as to
whether Starr had initiated a witness tampering investigation concerning
Salon's revelations about the Hale payments. If an investigation ever is
conducted, not by Starr but by the Justice Department, two immediate
questions come to mind: What did Kenneth Starr know, and when did he know

L. Jean Lewis. Lewis was supposed to
be Whitewater's Joan of Arc. A low-level investigator for the Resolution
Trust Corporation in Kansas City, Mo., Lewis took it upon herself during the
1992 election campaign to file "criminal
referrals" with the FBI and the U.S. attorney in Little Rock listing both
Bill and Hillary Clinton as potential suspects in the collapse of Madison
Guaranty Savings & Loan. Thanks to reporter Mollie
Dickinson's recent story in Salon
, we now know that sworn depositions
from the Senate Whitewater committee prove that the Bush White House was
actively involved in attempts to force the Justice Department to take
action on those referrals in time to affect the November election.

So was Lewis herself. FBI agents and federal prosecutors
who testified before Sen. Alfonse D'Amato's committee said that Lewis had
made dramatic pronouncements to them about altering the course of history,
prompting them to suspect her motives. The form and content of Lewis'
criminal referrals, moreover, struck every Justice Department official who
examined them as factually deficient and legally incompetent. Then-Attorney
General William Barr got nowhere in his attempts to push them through the
federal bureaucracy. Little Rock U.S. Attorney Chuck Banks, a Reagan
appointee, wrote a blunt letter refusing to be a party to what he viewed as
a politically inspired smear.

In sworn testimony before both House and Senate Whitewater
committees, Lewis denied making any pre-election attempts to pressure the
FBI and U.S. attorney, claiming she'd had no conversations with anybody
about her criminal referrals until December 1992. But FBI agents testified
otherwise, and had contemporaneous records to support them. In fact, the
records show, Lewis had hounded them repeatedly. Within a week of her
initial September 1992 referral, for example, Lewis left a taunting message
for FBI Special Agent Steve Irons at his Little Rock office. "Have I turned
into a local pariah," Lewis asked, "just because I wrote one referral with
high-profile names, or do you intend on calling me back before Christmas,
Steven?" A few days later,
she showed up in Irons' office in person to urge him onward. The agent
testified that her partisanship had the opposite effect.

Lewis had also made a secret, and potentially illegal, tape
recording of a meeting with an RTC colleague named April Breslaw, then testified
inaccurately as to the import of their conversations. She blamed the
inadvertent recording on a worn-out cassette recorder that had spontaneously
activated itself without her intervention. Confronted with inconsistencies
in her testimony by Democratic counsel Richard Ben-Veniste, Lewis appeared
to faint and had to be assisted from Senate chambers, never to return (a
startling development not reported by either the New York Times or the
Washington Post). Investigators subsequently found evidence that Lewis had,
in fact, bought a spanking new tape recorder only days before her meeting
with Breslaw. They passed it and a copy of her "accidental" tape
recording along to Starr's office for analysis.

At the time Starr took over the independent counsel's job in August
1994, Lewis was also being investigated by the RTC's
inspector general for the above infractions as well as several
others -- including illegal leaks of confidential financial records to the
press and using her government office to market a line of "Presidential
BITCH" T-Shirts and coffee mugs mocking the first lady. One of Starr's
first actions as independent counsel was to assume control of that
investigation. Nothing has been heard from the independent counsel's office
regarding L. Jean Lewis since that day. Perhaps it is time for the bulldog
scandal hunters in the press corps to ask Starr why that is.

Roger Perry and Larry Patterson. Arkansas troopers Perry and Patterson were David Brock's key sources for his since-repudiated
"Troopergate" story in the American Spectator, which alleged bizarre sexual
hanky-panky on the part of then-Gov. Clinton and Hillary Rodham Clinton. Both
have testified about Clinton's sex life before Starr's Whitewater grand
jury, given sworn depositions in the Paula Jones sexual harassment case
and were expected to be key witnesses on Jones' behalf had the trial gone

Both troopers also appear to have filed false affidavits in Starr's
investigation of the Vincent Foster suicide. In March 1995, according to
documents and admissions by both
troopers to Salon's
Murray Waas (with reporting help from yours truly)
, Perry and Patterson
signed a contract with Citizens for Honest Government, the Jerry
Falwell-connected organization that produced the infamous "Clinton
Chronicles," an almost insanely scurrilous video since repudiated with less
than complete frankness by Falwell himself.

In exchange for an agreed-upon royalty of $1 per video sold ("The
Clinton Chronicles" is reported to have sold more than 300,000 copies),
Perry and Patterson told the following tale: that a White House aide named
Helen Dickey had made a tearful phone call to the Arkansas governor's
mansion late on the afternoon of July 20, 1993, and told Perry that
Foster had committed suicide in a White House parking lot. Supposedly, the
call came in at 6 p.m. CST, hours before the Secret Service notified
President Clinton that Foster's body had been discovered across town at Fort
Marcy Park. First reported by Ambrose Evans-Pritchard in the London Sunday
Telegraph, the troopers' accusation has become the linchpin of the theory
advanced by Evans-Pritchard, Christopher Ruddy and other conspiracists that
Foster was murdered as part of a Whitewater cover-up and his body
transported to Fort Marcy Park.

It always seemed odd that the troopers "remembered" this
startling fact close to two years after the fact, and had not mentioned it
to Brock or any of the other reporters, including William Rempel of
the Los Angeles Times, who took dictation from them about the Clintons'
alleged sexual improprieties only months after Foster's death. In his
otherwise detailed report refuting the various conspiracy theories of
Foster's death, Starr somehow neglected to mention Perry and Patterson by
name. After pointing to the mass of evidence, including contemporaneous
White House telephone records, that Clinton aide
Dickey called the Arkansas governor's mansion a full three hours
later than Perry and Patterson contended in sworn affidavits, the
independent counsel's report makes the following bland observation in a
"Precise recollections of time, if not tied to a specific event that can be
documented as having occurred at an exact time, can, of course, be imprecise
or inaccurate." No hint from the independent counsel that troopers Perry
and Patterson may well have perjured themselves for money. And no hint, to
this day, that such a possibility bothers the wise and judicious
independent counsel.

That Starr's rather selective turning of a blind eye might have something
to do with partisan politics has been vigorously pooh-poohed by the
Whitewater media as so much White House spin. But to those of us who have
been following the Arkansas end of the affair, the charge is not so
Several prominent Arkansas Republicans, for example, had far more extensive
business dealings with the late James McDougal than the Clintons. Other
local Republicans were engaged in
suspect transactions with David Hale, who, apart from being an embezzler,
was a municipal traffic judge appointed by GOP Gov. Frank White. Not one of these
Republicans have been charged by Starr, nor, so far as is known, called to
testify before the Whitewater grand jury.

Two examples: Former Democratic state chairman and
longtime Clinton ally Herby Branscum, a banker, was indicted by Starr on
four felony counts for what a jury ultimately decided was a teller's error.
The Bank of Perry County, which Branscum owns, failed to report to the
Treasury Department the
disbursement of $28,500 in perfectly legal cash withdrawals by Clinton's
1990 gubernatorial campaign. The Clinton campaign itself
had reported the transaction to the state election commission.

Acquitted in the only jury trial ever lost by an independent
counsel, Branscum nevertheless had his life turned inside-out for months
and spent a small fortune defending himself. Starr's team even dispatched
FBI agents on a futile quest to interview Branscum's 16-year-old son at his
high school -- futile because, as the prosecutors surely should have known,
Arkansas law forbids interviewing a minor child outside the presence of his
parents or an attorney. The episode struck many observers as pure

By contrast, former Arkansas Republican state Chairman Bob Leslie has
admitted accepting an unsolicited $275,000 loan from Hale's Capital Management Services. Having no need for the money,
according to a story in the Miami Herald by veteran Little Rock reporter
Ernest Dumas, Leslie agreed to sign the cashier's check over to Hale
himself, a clearly improper transaction. At the 1996 Tucker-McDougal trial,
Hale admitted that he made a second $20,000 non-recourse loan to Leslie as
a kickback. Hale's fellow
municipal traffic judge and business partner, Bill Watt, also testified
that, under Hale's instructions, he diverted $2,000 of a fraudulent $10,000
loan to the campaign fund of
Clinton's 1986 gubernatorial opponent, former Gov. White, who had
made Hale a judge. Starr apparently saw nothing wrong with this

Starr's office seemed more concerned with a former Clinton aide and
University of Arkansas professor named Stephen Smith, who was threatened
with felony indictments and ultimately pleaded guilty to a misdemeanor for
making a false statement on a loan application. In contrast, Hale's
accountant, one-time GOP legislative candidate Robert Boyce, has admitted
that he
knowingly accepted a $300,000 loan for a non-existent corporation for the
purpose of helping Hale to embezzle $2 million in SBA
funds. No charges have been filed against Boyce.

When the national press corps and the television talk show hosts next pore over
the latest blizzard of subpoenas issued by Starr to bookstores,
secretaries, mothers and old college classmates of a former White House
intern, they might pause to ask whether Starr has any plans to draw up
papers against people who appear to have committed actual crimes. And if
not, why not.

By Gene Lyons

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

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