Taking care of David Hale

A Salon investigative report reveals how Kenneth Starr's key Whitewater witness secretly hooked up with a prominent anti-Clinton attorney.

Published August 13, 1998 7:36PM (EDT)

David Hale, the most important witness in independent counsel Kenneth Starr's Whitewater investigation, gave false and misleading testimony to a federal jury in an effort to conceal his relationship with conservative political activists who ran a secret anti-Clinton operation, according to three individuals with firsthand knowledge of the events in question.

Hale gave the disputed testimony during the April 1996 criminal trial of then-Arkansas Gov. Jim Guy Tucker and Jim and Susan McDougal, the former partners of Bill and Hillary Clinton in their failed Whitewater land deal. Hale was the Whitewater independent counsel's chief prosecution witness in the case.

The disputed testimony centered around the circumstances as to how Hale came to retain Theodore Olson as one of his attorneys. Olson, a partner with the prestigious Washington, D.C., law firm of Gibson, Dunn & Crutcher, is a former Reagan administration official and a conservative partisan, who provided legal counsel to Hale when he was called to testify before a congressional committee.

Two sources say that they believe Hale misled the federal jury to conceal his involvement with the Arkansas Project, a $2.4 million effort to investigate and discredit President Clinton, which was financed by conservative billionaire Richard Mellon Scaife. To finance the Arkansas Project, Scaife funneled money for the effort through the American Spectator magazine, via the tax-exempt foundation that operates the conservative periodical.

At the Tucker-McDougal trial, Hale testified he had found Olson through Randy Coleman, a Little Rock criminal defense attorney who represented Hale at the time. Hale also testified that he was assisted in the effort to find Washington, D.C., counsel by an individual he identified as "Senator Hollingsworth."

But the sources interviewed by Salon stated that Hale found Olson through two conservative political activists who directed the Arkansas Project: Stephen S. Boynton and Dave Henderson. Boynton, Henderson and Hale had all been friends for more than a decade prior to the formation of the Arkansas Project.

Had Hale told the federal jury in the Tucker-McDougal case about the role of Boynton and Henderson in helping him find Olson to serve as his counsel, it would almost certainly have led to public revelation of the existence of the then-secret Arkansas Project, including Hale's role in the endeavor.

Deputy Whitewater independent counsel W. Hickman Ewing Jr., who has directed the Arkansas portion of Starr's investigation, has stated that no FBI agents or prosecutors working for his office knew anything about Hale's involvement with the Arkansas Project or the alleged payments to Hale until they were revealed by Salon in March of this year.

If it is determined that Hale misled the federal jury, the ramifications to Starr's investigation would go far beyond the Tucker-McDougal case, casting further doubt on the truthfulness of Hale's charges of illegal conduct by President Clinton.

Central to Starr's Whitewater investigation have been allegations made by Hale that in early 1986, then-Arkansas Gov. Clinton had pressured Hale, who was running a federally subsidized lending company, to make a fraudulent and illegal $300,000 loan to Susan McDougal. Those allegations were cited by Attorney General Janet Reno in early 1994 when she appointed the first Whitewater independent counsel.

But the four-year investigation by the independent counsel has uncovered scant evidence to corroborate Hale's claims. President Clinton adamantly denied Hale's charges when questioned under oath as a witness during the Tucker-McDougal trial.

There would be consequences for Hale as well if it were determined that he misled the federal jury. A March 19, 1994, plea-bargain agreement between Hale and the Whitewater independent counsel states: "Should David L. Hale commit any further crimes or should it be determined he has given false, incomplete, or misleading testimony or information ... David L. Hale shall thereafter be subject to prosecution for any federal criminal violation of which this Office has knowledge."

Under the agreement, according to federal law enforcement officials, if there should be a finding that Hale lied, he could now be prosecuted for dozens of crimes he admitted to during the course of the Whitewater investigation. He had previously been granted immunity from prosecution for those crimes in exchange for his testimony against others and his pledge that he would never lie to Starr's investigators.

Defense attorneys in the Tucker-McDougal case also said it was potentially significant to their clients if Hale lied during the trial to conceal his relationship with the Arkansas Project. "That would have been central to the defense of our case," says Darrell F. Brown, an attorney for Tucker. "To have known that Hale was working that closely with the American Spectator, or that he received funds from them, would very likely have had tremendous impact on the jury's decision."

Recently, of course, Starr's stalled Whitewater probe has been overshadowed by allegations that Clinton had a sexual affair with White House intern Monica Lewinsky, lied about it under oath, and encouraged Lewinsky to lie as well. Clinton's critics have repeatedly said that a pattern of deception defines Clinton's role in these various cases, but much of the evidence of such a pattern has hinged on the credibility of Hale. Recent media reports suggesting that Whitewater will not even be included in any impeachment report Starr files with Congress raises anew the questions surrounding the origins of Hale's charges.

A federal criminal investigation is currently underway to examine allegations that an employee of the Arkansas Project named Parker Dozhier made numerous cash payments to Hale during the time that Hale was a cooperating witness in Starr's Whitewater probe. Salon first disclosed allegations that Dozhier, a Hot Springs, Ark., fishing resort proprietor, made the payments to Hale over a two-year period.

Dozhier has denied making any such payments. But he has admitted that he provided Hale with the free use of a fishing cabin and car while he stayed at Dozhier's resort. Dozhier has also acknowledged that he received $48,000 from the American Spectator to be the magazine's "eyes and ears" in Arkansas.

Hale's lawyer Olson has his own long-standing ties to the American Spectator, the Arkansas Project and Scaife. At various times, Olson has served on the American Spectator's board of directors as its secretary-treasurer and as its attorney. He is currently reported to be one of several individuals overseeing an internal "analysis" and financial audit of the Arkansas Project for the magazine's board.

While an assistant attorney general in the Reagan administration, Olson himself was the target of an independent prosecutor's investigation, which examined whether he had misled Congress in a dispute over toxic waste cleanup. Ultimately, no charges were brought against Olson.

Olson was retained by Hale to resist a demand for his testimony before the Senate Whitewater Committee. Assisting Olson in that effort was John A. Mintz, a former general counsel for the FBI, who was at the time "of counsel" to Gibson, Dunn & Crutcher. Mintz has since left the law firm. (Since 1993, Hale has employed seven separate attorneys to represent him in the various criminal investigations of his activities by the Small Business Administration, the U.S. Department of Justice, three congressional committees and the Whitewater independent counsel.)

Two sources with detailed knowledge of the events in question told Salon that both Olson and Mintz also provided advice to the Arkansas Project, dating back to its inception in late 1993 or early 1994. Indeed, one of the initial meetings to set up the Arkansas Project was held at Olson's downtown Washington, D.C., office at Gibson, Dunn & Crutcher. Mintz also was at the meeting. Among others in attendance were Ronald Burr, then the publisher of the American Spectator; Michael Horowitz, a fellow at the Manhattan Institute, a conservative think tank funded by Scaife; and Boynton and Henderson, who came to direct the day-to-day activities of the Arkansas Project.

"Olson is somebody who Scaife would trust to see that nothing went wrong and that his money would not be wasted," said one source familiar with the meeting.

In addition to his involvement with the American Spectator, Olson has served on the advisory boards of four separate Washington, D.C., conservative organizations that have received substantial funding from Scaife, according to a Gibson, Dunn & Crutcher biography of Olson and financial disclosure statements of the four political groups.

Olson's wife, Barbara, is also a founder and member of the national advisory board of the Independent Women's Forum, a conservative activist group that has received at least $350,000 in funding from Scaife over the last several years. She recently took a leave of absence from her job as general counsel to Senate Assistant Majority Leader Don Nickles, R-Okla., to spend more time making television appearances on behalf of the group as a vocal critic of President Clinton and supporter of Starr.

At the direction of Olson and Mintz, Hale declined to testify before the Senate Whitewater Committee in l995 and l996, asserting his Fifth Amendment rights, absent a grant of immunity of prosecution for any information he might provide the committee.

Mintz informed the Senate committee in a June 6, l996 letter:
"I have advised the Committee ... that Mr. Hale will claim the protection of his Constitutional privilege under the Fifth Amendment to the Constitution of the United States and respectfully decline to testify ... if he is compelled to appear in response to the subpoenas."

Sen. John Kerry, D-Mass., a member of the Senate committee and a former prosecutor, angrily declared at the time that his fellow Senators should "not be bamboozled and bullied by a legal scheme into giving an immunity that we don't need to give." Kerry pointed out that if the committee accepted Mintz's proposal, Hale could disclose his involvement in any number of serious crimes for the very first time, and never be prosecuted.

Ultimately, the Senate Whitewater Committee declined to grant immunity to Hale as a condition for him to testify. The committee completed its investigation and issued a final report without ever hearing his testimony.

- - - - - - - - - -

During his April 1996 testimony at the Tucker-McDougal trial, Hale was asked during cross-examination by an attorney for Jim McDougal, "Who referred you to Mr. Olson?"

Hale responded, "Randy Coleman [Hale's Arkansas attorney] found out that there was a fellow down there who worked in Democratic Senator Hollingsworth's office that knew him and recommended him."

That claim, according to an individual with intimate, firsthand knowledge of Hale's defense in the case, was not true. In fact, according to the source, Coleman played no role whatsoever in finding Olson to serve as counsel to Hale.

This individual further said that it was the Arkansas Project's Henderson and Boynton who made the original contact with Olson. Only long after the fact, the source said, did Coleman then learn about and approve of the decision by Hale to retain Olson. After that, the source said, Coleman and Olson consulted with one another and coordinated some of their activities.

Coleman declined to comment, citing "attorney-client privilege." Olson and Mintz did not return numerous phone calls seeking comment.

The source with firsthand knowledge of Hale's legal defense further said that Coleman had never consulted with any "Senator Hollingsworth" or anyone with a similar sounding name in seeking Washington, D.C., legal counsel for Hale.

Indeed, there was not then nor is there now any "Senator Hollingsworth" in the United States Senate. The only member of the U.S. Senate with a similar name is Sen. Ernest F. Hollings, D.-S.C., the ranking Democrat on the Senate Commerce Committee. Hollings says that neither he or anyone on his staff ever assisted Hale in finding legal counsel.

"To the best of my knowledge, I have no idea what David Hale is talking about," Hollings said through his director of communications, Maury Lane.

A review of records of the Arkansas State Senate over the course of the last decade found no one has served in that body with the last name Hollingsworth or any name even remotely similar.

The only prominent political figure in Arkansas in recent years with such a name has been Perlesta Hollingsworth, who has never served in the state Senate. In the course of a three-decade-long political career, however, Hollingsworth has served on the Little Rock city council, as a deputy prosecutor for the state's sixth judicial district and as an advisor to the late-Arkansas Gov. Winthrop Rockefeller. Hollingsworth also served as a justice on the Arkansas Supreme Court in the mid-1980s, after being appointed by then-Arkansas Gov. Bill Clinton.

"I know nothing about any Ted Olson," a slightly bemused Hollingsworth said in a telephone interview. "This is the first time I have heard that was [Hale's] testimony. I don't know what he's talking about."

A second source, who has worked for the American Spectator, confirmed that Hale found Olson as his attorney through the Arkansas Project's Boynton and Henderson. The source said that Henderson brought Hale and Dozhier to Washington, D.C., to meet Olson and Mintz. According to the same source, both Olson and Mintz represented Hale on a pro bono basis.

Accounting records of the Arkansas Project obtained by Salon show that Gibson, Dunn & Crutcher was paid at least $18,000 over one two-year period for work that Olson and Mintz performed during that period of time. But sources claim that work was unrelated to any representation of Hale.

Another individual with detailed knowledge as to how Olson came to represent Hale is Caryn Mann, a Bentonville, Ark., assistant funeral home director, who between early 1994 and the early summer of 1996 was Parker Dozhier's live-in girlfriend. During that time, Hale, often accompanied by FBI agents detailed to the office of the Whitewater independent counsel, stayed at Dozhier's resort.

Mann and her son Joshua Rand have provided detailed information about the activities of Dozhier, Hale and the Arkansas Project to law enforcement agencies. Mann told Salon that Dozhier and Hale told her that Boynton and Henderson directed the effort to find legal counsel in Washington, D.C., for Hale. "David needed a separate attorney in Washington, D.C.," Mann recalled. "Parker was talking a lot to Henderson and Boynton about the problem. Henderson said that he would look for an attorney for Hale.

"Dave Henderson came up with Ted Olson. At first, P.D. [Parker Dozhier] said he had never heard of him. He said, 'I don't like it. I don't know who this guy is.' Henderson was very excited and positive about Olson, but they [Dozhier and Hale] weren't so sure."

According to Mann, Hale and Dozhier then went to Washington, D.C., to meet Olson themselves. Mann said that Dozhier told her that the American Spectator would reimburse him for his trip expenses. Accounting records of the Arkansas Project and American Spectator obtained by Salon show that Dozhier was routinely reimbursed by them for various travel expenses. But it could not be determined from the records whether Dozhier was reimbursed for the trip he took with Hale to Washington, D.C., to meet Olson, because while the records show the disbursement of funds for travel, they do not specify where the travel took place.

"When they came back, they weren't concerned about anything anymore," said Mann. "It was all taken care of. Olson was going to be taken care of and paid. He wasn't to be charging David that much. It was going to run through the Spectator."

During his testimony in the Tucker-McDougal trial, Hale testified that he had first retained Olson in December 1993: "I talked to Mr. Olson in December of 1993 when we got notified that they might subpoena me before Congress ... And then again last year I got word again that they might subpoena me before Congress so I retained Mr. Olson. Simply, I do not know anything about how they do that up there; just to advise me on what do you do, where do you go."

Just before he retained Olson, Hale was in frequent contact with Henderson and Boynton, according to Hale's long-distance telephone records. In fact, the records indicate that Hale's first call to Henderson occurred on Nov. 22, 1993, just prior to when Olson began representing him.

Henderson, Boynton and Dozhier did not return several phone calls seeking their comment for this article.

David Bowden, Hale's current attorney, said he could not comment because Hale's testimony during the Tucker-McDougal trial occurred before Hale retained him. Hale did not respond to requests for an interview left with Bowden or at a home where he stays while in Little Rock.

The question of whether Hale did in fact mislead the Whitewater jury about how he came to retain Olson will likely be examined by federal investigator Michael Shaheen, the former Justice Department official appointed by Starr to probe the alleged payments to his key Whitewater witness. "His [Shaheen's] mandate is to investigate whether or not there were any payments to Hale and whether they colored his testimony," observed a federal law enforcement official. "If Hale lied to cover up a relationship with those who might have paid him, that's something that surely should be looked at."

The same official said that if the Arkansas Project was instrumental in providing legal counsel to Hale, that such free legal assistance could be considered a gratuity: "Anything of value -- just not cash payments -- might be a gratuity. That could be free rent. That could be the use of a car. That could be free legal assistance."

Shaheen, the former counsel to the Justice Department's Office of Professional Responsibility, was named to lead an investigation of the alleged payments to Hale last May after Starr and Attorney General Janet Reno clashed as to how such an inquiry would be handled. To assure the independence of his investigation, Shaheen will report to a panel of retired federal judges instead of Starr or Reno.

By Murray Waas

Murray Waas is a frequent contributor to Salon.

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