WASHINGTON -- Citing a lengthy list of conflicts of interest, President Clinton's attorney has demanded that independent counsel Kenneth Starr hand back to the Justice Department an investigation into allegations that Starr's key witness in the Whitewater affair, David Hale, had received payments from a conservative group.
"I believe you would be well advised to refer this matter immediately back to the Department so that its career prosecutors and investigators may fully and thoroughly investigate these very serious allegations," attorney David Kendall wrote to Starr in an April 10 letter that the White House released Monday.
Last Thursday, Deputy Attorney General Eric Holder asked Starr to investigate allegations that Hale received payments and other assistance from conservative activists working for a foundation that publishes the American Spectator magazine and has close ties to billionaire publisher Richard Mellon Scaife, one of President Clinton's fiercest critics.
The Justice Department's request arose from a series of stories published last month by Salon, in which an Arkansas woman, Caryn Mann, and her teenage son, Joshua Rand, alleged that Hale had received the payments while he was cooperating with Starr's investigation. The two also alleged that Hale passed on information about Starr's investigation to the American Spectator magazine and to other journalists.
Hale and others allegedly involved in the payments have denied the charges.
Debbie Gershman, a spokeswoman for the independent counsel's office, declined to comment on Kendall's letter. Over the weekend, Starr told reporters outside his home that he already has begun the investigation into the allegations against Hale. "We have begun to assess it," he said. "I don't think it should take long."
Salon has learned that there was intense debate last week between Attorney General Janet Reno, Holder and their senior political advisors over whether to detail the extent of Starr's possible conflicts in the matter. Two letters were drawn up, a short version that only alluded in general to the conflicts and a longer one that spelled them out. In the end, Justice Department sources told Salon, the officials opted for the shorter version, fearing a more detailed treatment could be construed as a recommendation that the independent counsel refer the matter back to the Justice Department.
Some of those details are outlined in Kendall's letter. For example, it notes that Starr has described Hale as "a model witness" and used his testimony in the fraud trial of the Clintons' Whitewater partners, James and Susan McDougal and former Arkansas Gov. Jim Guy Tucker. "A thorough examination of the Hale allegations could jeopardize convictions your office has obtained," Kendall wrote.
Kendall also noted that Starr himself and others in the independent counsel's office would be important witnesses in any investigation into the allegations against Hale. In its original story, Salon quoted Mann and her son as saying that FBI agents from Starr's office frequently accompanied Hale to the Hot Springs, Ark., fishing complex of Parker Dozhier, an outdoorsman who allegedly passed money to Hale between 1994 and 1996 from Steven Boynton, a conservative activist connected to the American Spectator magazine and to Scaife. Mann was Dozhier's live-in girlfriend at the time.
"What various agents and prosecutors knew, should have known, or had the opportunity to know, about, inter alia, contacts between and among David Hale, Parker Dozhier, Steven Boynton, and others connected with the American Spectator and its Educational Foundation, will be critically important," Kendall wrote.
Kendall also accused Starr's office of prejudging the investigation into Hale, citing a widely publicized comment by Starr's deputy, W. Hickman Ewing Jr., who said, "We're convinced that none of our people had any knowledge of any such payments."
"If your office is already 'convinced' of what an investigation would demonstrate, before the investigation even begins, it is hardly open-minded and neutral," Kendall wrote.
The president's lawyer cited Starr's connections to Scaife, whose charitable foundations donated money for a new school of public affairs at Pepperdine University in Malibu, Calif. The school has said it will hold the dean's position for Starr until he finishes his investigation. Starr's connections with Scaife are the subject of a conflict-of-interest complaint now pending before a federal appeals court.
Kendall also notes that any investigation of the allegations involving David Hale "inevitably" will involve the close scrutiny of some of Starr's closest associates. These include Theodore Olson, Starr's former law partner, now an attorney for both Hale and the American Spectator magazine, and Terry Eastland, the new publisher of the American Spectator, who, together with Olson, is conducting an internal investigation into the magazine's involvement with the Arkansas Project, which spent $2.7 million of Scaife's money to try to investigate and discredit Clinton.
Two former American Spectator executives, who spoke to Salon under condition of anonymity, said the Arkansas Project included a "mechanism" under which Hale and his family were "taken care of." Eastland has said no money ever went to Hale. Olson, who did not return calls for comment, has previously said he is not aware of any payments to Hale.