The story Starr did not want to hear

A key witness charges Whitewater investigators ignored information beneficial to Clinton.

Published August 17, 1998 8:32AM (EDT)

William W. Watt, an important prosecution witness for independent counsel Kenneth Starr, has charged in a series of interviews with Salon that Starr's investigators failed to record in their official reports crucial information he provided them that casts doubt on allegations of criminal wrongdoing by President Clinton.

The information that Watt says was omitted from the Whitewater investigators' reports raises further questions about the veracity of charges made against the president by David Hale, a former Little Rock municipal court judge who has been the central witness in Starr's Whitewater probe. Watt now calls Hale "a pathological liar."

Watt, also a former Little Rock municipal judge, told Salon that the information he provided investigators that seemed to corroborate Hale's criminal charges against Clinton was recorded in great detail in official FBI reports. In contrast, he said, other information he told them that undermined Hale's allegations was not included in the reports. "I was told that they didn't like the truth the way that I told it," Watt said about Starr's investigators, some of whom he charges had an anti-Clinton bias.

The alleged omissions may also raise questions about the convictions Starr won against Whitewater defendants then-Arkansas Gov. Jim Guy Tucker and James and Susan McDougal, the Clintons' former partners in the failed Whitewater land deal. Both Hale and Watt were key witnesses for Starr during the 1996 trial of Tucker and the McDougals. The information that Watt alleges was ignored by FBI agents from Starr's office who interviewed him about Whitewater could possibly have been used by the defendants' attorneys to impeach the credibility of Hale, the independent counsel's star witness in the case. The information could also have assisted the attorneys in their questioning of Watt, had they known about it.

Prosecutors are prohibited from withholding information from defendants that casts doubt on their guilt. While saying that he could not comment specifically on Watt's allegations, John Barrett, a former federal prosecutor who now teaches criminal law at St. John's University, observes, "Under the due process clause that grows out of a 1963 Supreme Court decision, there is a constitutional requirement that as a matter of fair play a prosecutor has the duty to turn over to the defendants whatever information the prosecutor has in his possession that is exculpatory -- which means inconsistent with guilt -- or material that could be used to impeach a government witness."

In considering Watt's charges, there are serious questions regarding his own credibility. Watt was named as an unindicted co-conspirator by Whitewater prosecutors during the Tucker-McDougal trial. And testimony and evidence presented during the trial implicated him in a series of ethically questionable actions. Watt also resigned his position as a Little Rock municipal court judge in 1996 while he was in the midst of an ethics investigation of his conduct on the bench.

In addition, three federal investigators close to the Whitewater probe rebutted Watt's story, telling Salon they questioned whether the alleged omissions were important enough to have affected the jury's verdict in the Tucker-McDougal trial. They also questioned whether the information was in fact exculpatory to the defendants, and thus not required to be recorded in the first place. One official said any such omissions were unintentional. "You have to look at the character of the people who put together the case for us," said this official. "Winning the case was not more important to these people than doing the right thing."

But Watt's account that crucial information was omitted from official FBI reports has been independently corroborated by Mark Hampton, a respected Little Rock criminal defense attorney who represented Watt during the Whitewater investigation. Hampton told Salon that he was present for virtually all of the interviews his client had with FBI agents and prosecutors. The attorney confirmed that Watt did indeed provide Whitewater investigators with information exculpatory to President Clinton that was left out of their FBI reports.

Perhaps more importantly, a federal law enforcement official with firsthand knowledge of the FBI interviews with Watt has corroborated a key element of Watt's account. The source confirmed that Watt had told Whitewater investigators of two discussions with then-Gov. Clinton that appeared be exculpatory of Clinton and raised questions about Hale's credibility. The official said, however, that the information might not have been important enough to include in the FBI report.

Salon confirmed other parts of Watt's story in interviews with more than 20 other individuals with knowledge of his claims, including federal Whitewater investigators, private attorneys in contact with Starr's office, other witnesses in Starr's probe and business associates and friends of both Hale and Watt. Further verification of at least parts of Watt's account was provided by correspondence and other contemporaneous documents he provided to Salon, as well as court and federal law enforcement records.

The allegations by Watt place Kenneth Starr in a difficult position. If Starr ends up disputing Watt's charges, he will have the unenviable task of assailing the credibility of a witness whose testimony his own office relied on to obtain his most substantial court victory: the convictions of former Gov. Tucker and the McDougals.

It is also unclear who, if anyone, might ultimately investigate Watt's allegations. Federal law enforcement officials interviewed for this article say that Starr would clearly have a conflict of interest in leading an investigation of any conduct of his own office. When there have been allegations of misconduct by federal prosecutors and FBI agents in the past, they have traditionally been investigated by the Justice Department's Office of Professional Responsibility (OPR). But any probe of the Whitewater investigation by Attorney General Janet Reno's Justice Department might be viewed as an attempt by the Clinton administration to impede Starr's inquiry.

Two federal law enforcement sources said that Watt's allegations should be pursued by Michael E. Shaheen Jr., the former head of the OPR who is already conducting an independent investigation for Starr of charges that conservative political activists made numerous cash payments and provided other gratuities to Hale during the time that Hale was a cooperative witness in the Whitewater probe.

"For public confidence to be maintained in this particular criminal investigation -- one that concerns the conduct of the president of the United States -- it would perhaps be in everyone's interest for Mr. Shaheen to be given jurisdiction to look into this matter," said a senior federal law enforcement official.

For his part, Watt told Salon that he would fully cooperate with any federal investigation, including giving testimony under oath, if it were conducted independently of Starr's office. He also said that he would consider allowing his attorney, Hampton, to waive his attorney-client privilege and confirm Watt's account to federal investigators.

Charles Bakaly III, a spokesman for Starr, declined several requests for comment for this story. Earlier this year, he wrote a letter to the editor of Salon complaining that this reporter was making inquiries to Whitewater probers about sensitive ongoing criminal investigations and federal grand jury matters. Bakaly suggested that the reporter cease his efforts and take further questions to his office.

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These days, Kenneth Starr's prosecutorial machinery and the Washington establishment are obsessed with whether President Clinton enjoyed the sexual favors of an intern. But before Monica Lewinsky became a household name, Starr's four-year, $40 million investigation was directed at the series of Arkansas real estate and financial dealings known as Whitewater. Starr has bid farewell to his Little Rock grand jury, without an indictment of Hillary Clinton or an impeachment report on the president, and the independent counsel has let it be known that his upcoming impeachment report to Congress will contain nothing about Whitewater. But Clinton's critics still promote the idea that he and his wife were guilty of something back in Arkansas. No president in American history has been the target of such a lengthy investigation, one that has not yet produced any criminal proceedings against him.

At the core of Starr's Whitewater investigation are allegations made by Hale that, in early 1986, then-Arkansas Gov. Clinton pressured Hale, who ran a federally subsidized lending company, to make a fraudulent and illegal $300,000 loan to Susan McDougal. Hale's credibility, then, became a key factor in the Whitewater trials of Tucker and the McDougals. Their defense attorneys hoped that jurors would disbelieve charges made by a self-confessed liar, thief and felon about a popular political figure from their home state who had gone on to become president of the United States. If Hale was lying about Clinton, the lawyers argued, he could also very well be fabricating allegations of criminal misconduct by their clients.

As part of their strategy to highlight that issue, attorneys for Tucker and the McDougals called President Clinton as a witness in the case. In a historic, videotaped deposition that was played for the jury, Clinton not only adamantly denied that he had ever pressured Hale to make the fraudulent loan to Susan McDougal, but also testified that he had not even discussed the matter at all with Hale.

Clinton's sworn testimony dramatically raised the stakes for both the president and Starr: If Hale, the star Whitewater witness, was telling the truth, that meant that the president of the United States had committed perjury. If, on the other hand, Hale was shown to be lying about the president, that would suggest Starr had relied on an untrustworthy witness to build his most important cases.

As a prosecution witness in the Tucker-McDougal case, Watt not only gave important testimony about the business relationships between Hale and former Gov. Tucker and the McDougals, he also provided evidence that appeared -- to a degree, at least -- to corroborate Hale's allegation that Clinton had pressured Hale to make the illegal loan to Susan McDougal.

Watt specifically testified that Hale had told him in early l986 -- contemporaneous to the actual events in question -- that Clinton was pressuring Hale to make the fraudulent loan. Watt's testimony was cited during the trial by deputy Whitewater independent counsel Jackie Bennett Jr. as corroboration of Hale's charges.

In several interviews with Salon, however, Watt seriously questioned whether Hale had told him the truth in l986 when he alleged that Clinton was pressuring him to make the fraudulent loan. Watt also said that he felt pressed by Whitewater investigators to corroborate Hale's story beyond what he personally knew about the matter. And, most important of all, Watt alleged that he provided investigators with information favorable to Bill Clinton that was left out of FBI reports of the interviews.

Watt made his allegations of misconduct by Whitewater investigators in a series of interviews with Salon over the last several months. But he was reluctant until recently to go on the record with his story, saying he feared retaliation from Whitewater prosecutors and attacks by conservative media outlets.

Though Watt is a former friend of Clinton, it does not appear that his story is motivated by allegiance to the president. "He expresses as much bitterness towards the Clintonites as he does towards Whitewater prosecutors," says a Little Rock attorney who has known Watt for many years and had appeared before him while Watt was still on the bench.

Watt himself says that he has felt not only persecuted by Starr's office but also mistreated by Clinton loyalists who attacked him politically and professionally for cooperating with prosecutors. "This has kind of been like the Queen Elizabeth and Lusitania passing each other in the middle of the ocean, and you're between them in a rowboat," Watt says. "It's been a dilemma that so many people have found themselves in since this thing has begun."

He adds, "I resent the fact that the Clinton people take the attitude that if you become a target, they abandon you. They didn't show any loyalty on the front end."

Watt today maintains a small law practice and manages real estate properties in North Little Rock. He says that he is contemplating a return to politics and says that he was motivated to publicly tell his story by a desire to clear his name. Ironically, by speaking out for the first time, he may be focusing attention on the allegations of misconduct in his own past.

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Watt's involvement with Whitewater stems from a period in the mid-1980s when he was an occasional business partner and attorney for Hale. The two men were partners in real estate deals and at one time contemplated purchasing a life insurance company together, according to federal law enforcement records. Watt also saw transacting business with Hale as a way to make political allies who could do him favors some day.

Ironically, it was Watt who, of the two men, was closer to Clinton. "David Hale boasted of his ties to Clinton, but they were never very real," says a former friend of both men. "Watt had a personal tie, if not a political tie."

Three individuals who knew both Watt and Clinton say that the two men shared a mutual interest at the time in chasing women. One longtime Arkansas friend of Clinton recalled, "Watt was one of those Arkansas people who Hillary never wanted around Bill. She had this great hostility towards Watt. He was one of those people who were perceived to be a bad influence on Bill. That's because he really was a bad influence." One Clinton acquaintance recalled an evening when Hillary ordered the staff to have Watt thrown out of the governor's mansion.

In his interviews with Salon, Watt said nothing to dispel such notions of his colorful past, but emphasized that he is now a married man with children, and that he has put these times behind him.

During the time that Watt and Hale were engaged in business together, Hale was the president of Capital Management Services (CMS), a Little Rock-based lending company that was licensed and partially funded by the federal Small Business Administration (SBA). CMS's mandate was to distribute federal funds and private capital to small businesses owned by minorities and the disadvantaged.
But Hale instead largely used his federally subsidized loan institution as a private piggy bank, making fraudulent and illegal loans that benefited himself and powerful Arkansas political and business figures, such as former Gov. Tucker and the McDougals.

In early 1993, the SBA discovered the massive fraud at CMS and referred the matter to the U.S. attorney in Little Rock for a criminal investigation. Facing federal criminal charges in the summer of 1993, Hale first publicly made allegations that Clinton had pressured him in early l986 to make an illegal $300,000 loan to Susan McDougal. He then made a deal with Starr's Whitewater investigators. Hale pled guilty in March 1994 to two felonies, admitting that he had defrauded the SBA of more than $3.4 million. In exchange for providing information to prosecutors about the president, Tucker, the McDougals and numerous others, he received a reduced sentence.

The story Hale told in return for Starr's leniency was this: He claimed that in February 1986 he had met with then-Gov. Clinton and Jim McDougal at McDougal's office in a housing development just outside Little Rock, known as Castle Grande, to discuss the loan. According to Hale, Clinton specifically asked him to "help Jim and me out" by making the loan to Susan McDougal. During the discussion, Hale claimed, Clinton even offered to put up land he owned in Marion County -- which later turned out to be his Whitewater parcel -- as collateral for the loan. According to Hale's account, Clinton also warned him, "Be sure -- my name cannot show up on this." Hale said he believed that Clinton pressed him to make the loan because Jim McDougal was a political ally of the governor.

President Clinton has always adamantly denied the allegations. Partisans of the president have maintained that Hale fabricated the story to win a reduced sentence from prosecutors.

Whatever did or did not transpire between Hale and Clinton, Hale ultimately made a $300,000 loan to Susan McDougal. On the loan application, the recipient was designated to be an advertising company called Master Marketing. In reality, there was no such company, and Jim and Susan McDougal misappropriated the money for their own personal use.

Some federal law enforcement officials who have worked on the Whitewater investigation have always been privately skeptical of Hale's account regarding Clinton, and they point to much more important motives for Hale to make the loan to Susan McDougal than doing a favor for Clinton.
At the time Hale provided the "Master Marketing" loan to Susan McDougal, federal investigators would later discover, Jim McDougal and Hale were swapping fraudulent loans with each other, in the process defrauding the federal government of millions of dollars. In exchange for the fraudulent loan to Susan McDougal's mythical marketing firm, Jim McDougal's Madison Guaranty Savings & Loan agreed to finance the purchase of a Hale property for $825,000, vastly more than it was actually worth, according to court and law enforcement records.

To obtain his loan from Madison Guaranty, Hale needed to get an inflated appraisal for his land. Hale approached Watt and inquired if a real estate appraiser named Robert Palmer, a longtime friend of Watt's, could do the job. Palmer had previously done a number of appraisals for Madison Guaranty and had a reputation for cutting corners on occasion. According to Watt, his own involvement in the deal resulted from a good-natured desire to do favors for two friends, Hale and Palmer.

In a plea-bargain agreement with Whitewater prosecutors, Palmer later pled guilty to a single felony charge for having performed an inflated appraisal for McDougal's Madison Guaranty and assisting McDougal in deceiving federal banking regulators. Palmer testified at the Tucker-McDougal trial that he had inflated the appraisals for Hale at Watt's urging. All together, Palmer testified, he had made three inflated appraisals for the benefit of Hale and McDougal.

Hale similarly claimed, during his debriefings with the FBI, that Watt had been a willing participant in the scheme to obtain the inflated appraisals.
A confidential FBI report states: "Hale related a story about a signal that McDougal, Watt and Palmer would use between them concerning appraisals. Hale believes that a password was used by Palmer, McDougal and Watt, which was a signal for Palmer to know that this appraisal needed to be a certain amount of money. Hale recalls that the password was 'This one's for Jim.'"

Watt adamantly denies that he ordered Palmer to do anything illegal: "Did I ask Robert to break the law? No. Did I do the appraisal? No. But in the eyes of the government, I'm in the loop. And I didn't make any money off the transaction. I didn't have any future gain. I didn't have any reason to tell Robert to do something wrong.

"If I had done something wrong, the prosecutors would have charged me," he continues. "But what they found was that I didn't take any money
from Hale or Madison in arranging for Robert to do the appraisals. I didn't have any future profits."

Watt believes that Hale wanted him involved him in the deal because he needed some deniability if the fraudulent appraisals ever became known: "David put me in the middle. He knew that I did [real estate] work. So I was the logical one. He knew that I knew Palmer. He figured that I would [be] the cushion because there would be someone to blame everyone on if something went wrong."

Palmer initially was reluctant to do the inflated appraisals, according to his testimony at the Tucker-McDougal trial. But Hale began invoking Clinton's name with Watt in an effort to motivate Watt to press Palmer to do the job.
"[Hale] said, 'I've gotta have this done,'" Watt testified at the Tucker-McDougal trial. He said Hale told him that he had been to a meeting at either the state capitol building or governor's mansion and that "Governor Clinton is interested. He wants me to try to get it to him to try and help his friends."

This was not the only time Hale would use Clinton's name to enrich himself. Four years later, in 1990, Hale falsely invoked the governor's name to persuade executives for an Alabama health care company he could secure them a lucrative Arkansas state contract. This time, whether it was true or not, Hale's reference to Clinton's involvement in the deal helped convince Watt to intensify his pressure on Palmer to do the appraisals. Palmer finally agreed, providing Hale with the desired appraisal at the inflated price.

Whitewater prosecutors cited Watt's testimony, and Palmer's subsequent actions, as evidence that Hale was telling the truth about Clinton's involvement in the illegal loan. Deputy Whitewater counsel Bennett explained to the presiding judge at the Tucker-McDougal trial, Federal District Court Judge George Howard Jr., why he considered Watt's testimony so critical to the prosecution's case. Attorneys for Tucker and the McDougals, Bennett pointed out, had asserted in their opening arguments "that it was not until Bill Clinton was elected president that [Hale's] story ever came out and that statement was a lie at the inception." Hale had fabricated the allegations about Clinton, the defense attorneys argued, so he would have something to trade prosecutors in exchange for a greatly reduced sentence.

But Bennett contended that Watt's testimony rebutted the "charge of recent fabrication, which is at the core of their defense."
Watt's account, Bennett pointed out, included "a couple of contemporaneous statements made in 1986, which was long before Mr. Clinton was elected president."

However, in interviews with Salon, Watt said he had no way to be sure that Hale was telling the truth about the alleged meeting with Clinton, and he raised the possibility that Hale had falsely invoked Clinton's name to motivate him to press Palmer to do the appraisal.

"Hale had a habit of using names and dropping names," Watt said. "David in fact used the governor's name a lot, but he used other names a lot. So you never really knew one way or another which was which. You never knew when he was telling the truth."

As to whether or not he believed Hale was telling the truth about Clinton, Watt says, "I didn't have any independent knowledge of whether or not he was ever telling the truth."

But, as Jim McDougal's attorney would point out during his trial, by invoking Clinton's name with Watt, Hale, the consummate con man, had pressed exactly the right buttons to get the appraisal he wanted done. "David got you involved in this ... transaction basically by pushing the political buttons, didn't he," McDougal's attorney asked Watt during cross-examination, "and by letting you know there were connections and opportunities? And that was the carrot he put in front of you, wasn't it?"

"I had carrots ... hung out that there were future business deals," answered Watt. "I was currently involved in an elective process at that time, and my main concern was simply not to alienate any people or create any undue problems for that elective process."

Indeed, Hale perceived that Watt owed his political career to him, and had boasted as much to Whitewater investigators, according to federal law enforcement officials who have spoken to Hale at length. An FBI report of an interview with Hale details the extent to which Hale believed that Watt was politically indebted to him. "Watt ran for a Little Rock Municipal Judge position in 1984 but lost," stated the report. "Hale [then] helped Watt put together a campaign for a special election that was being held in 1986 ... Hale said he helped Watt by probably giving money to his campaign and also putting Watt in touch with other people who could contribute. Watt won the 1986 special election for Little Rock Municipal Judge."

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The jury for the Tucker-McDougal trial never heard about Watt's doubts and reservations about Hale, according to Watt and his attorney, because the Whitewater investigators never recorded that information in their FBI reports. Such FBI reports of interviews with witnesses in criminal cases are routinely turned over to defendants so that they will have access to relevant information.

But Watt freely shared these doubts with Salon. During the same period Hale was pressing him to get the property appraisals done and was invoking Clinton's name, Watt himself had two encounters with Clinton. But on these occasions, Clinton gave no indication that he knew anything about Hale's intention to make the $300,000 loan to Susan McDougal.

"Clinton used to jog up and down Broadway [in Little Rock]," Watt recalls. "A couple of times, right after night court, I picked him up at the north end of Broadway and drove him back to the mansion." Neither time, Watt says, did Clinton "intimate in any way" that he had dealings with Hale.

"He asked about my legal work," recalls Watt. "He asked about my real estate business. He asked, 'Are you still rehabbing houses? Are you still buying and selling houses?' He mentioned friends we had in common. That was the conversation."

David Hale's name did come up during one of the conversations, Watt says, but only in a very vague way. "Clinton asked if I was still doing legal work for David. And I said that we were. But that was the full extent of any discussion we had about David."

Watt says he told FBI agent David Reign and other Whitewater investigators about these two conversations with Clinton. But the FBI reports of the interviews with Watt, copies of which were obtained by Salon, make no reference to Watt's two encounters with Clinton.

A federal law enforcement official with firsthand knowledge of Watt's interviews confirmed his account, but contended that the information Watt provided about his meetings with Clinton was arguably not important enough to be included in an FBI report. "The conversations did not prove or disprove anything," said the official. "They didn't indicate that Clinton had in fact pressured Hale, and didn't show that wasn't the case."

Watt also says the investigators were never satisfied with his claims that he did not know of any additional evidence against Clinton, apart from what Hale had told him. Watt says he perceived there was an anti-Clinton bias among some of the investigators, an eagerness to believe the worst about Clinton and to put too much trust in Hale. When Watt insisted that Clinton had only mentioned Hale in passing, some of the investigators said they disbelieved him.

"You're not telling us all of it, there has to be more to this," the investigators told Watt. But he insists, "There wasn't more to it."

Watt says that while the investigators never told him to lie, he felt pressured to tell a story about Clinton that went beyond the facts as he knew them. "I was told that they didn't like the truth the way that I told it," he says. "I had my truth and they had their truth and I was told that they liked their truth better."

Despite the pressure, Watt says, he stuck by his story. "My answer consistently to the OIC [Office of Independent Counsel] and to anyone else has been I didn't know [about Clinton's alleged participation in the loan scheme]. David would drop names. He would lie and manipulate people. He was a pathological liar. He was trying to convince me to do something. He was trying to push a spark plug. And in my mind I knew that I've been with Clinton on at least those two occasions where nothing was said specifically about Hale. Nothing was said about the deal. Nothing was said about the people involved. And in fact, [Clinton] did ask about my own property deals and how I was doing and if I was doing good, and nothing was brought up at all about something he was supposed to be involved with. And in my own mind David Hale didn't have any real credibility with me at all."

A federal law enforcement official told Salon that Watt's allegations of anti-Clinton bias among Whitewater investigators are unfounded. "Our office was pressing him for more information," said the official. "That's what we do. That's what goes on during the course of an investigation. Were we skeptical that Watt was telling the truth? Of course we were, and we pressed him."

Is Watt a credible witness? Several factors must be considered in weighing his account. In June 1996, Watt resigned as a Little Rock municipal judge in the wake of the Whitewater charges against him and another complaint by an
Arkansas state representative who alleged that Watt gave him a $1,500 check during a legislative session, which he perceived to be a bribe. Watt has denied any impropriety, saying that the check was to compensate the legislator for legal services for the Arkansas Municipal Judges Association.

And Watt was hardly an innocent when it came to his dealings with Hale, according to testimony and evidence presented during the Tucker-McDougal trial, federal law enforcement documents and several individuals who have known both Watt and Hale. A longtime acquaintance of Watt recalled in an interview that Watt, Hale and James McDougal were among a circle of people in Arkansas "who made and lost fortunes and then made them and lost them again, who cut corners along the way and were at one time or another drawn to each other."

In interviews with Whitewater investigators, Hale painted a picture of Watt as a willing participant in many of his various schemes. A confidential FBI report detailing a debriefing of Hale stated, "Hale described Watt as someone who wanted to be part of their group. Watt frequently was at Hale's office and it was not unusual for Watt to go through Hale's files."

Whitewater prosecutors named Watt as an unindicted co-conspirator in the Tucker-McDougal case. During the trial, prosecutors presented testimony and evidence that not only implicated Watt in the inflated real estate appraisal but also indicated that he had forged a document he submitted to the SBA and misled FBI agents during an interview. But prosecutors granted Watt immunity in exchange for his testimony in the case.

In assessing Watt's allegations, it is also important to point out that Watt bears some animosity to some of the Whitewater investigators he is now accusing of misdeeds. "By classifying me as an unindicted co-conspirator, they damaged me politically and also as a sitting judge," Watt says. Sources close to Starr's investigation pointed out that Watt has reasons to hold grudges particularly against former Whitewater prosecutor Ray Jahn and two FBI agents assigned to the Whitewater probe, David Reign and Steven Irons. The three men vigorously recommended that Watt be criminally charged in the case, but their recommendation was overruled.

Finally, it should be noted that Watt once before made charges regarding improper conduct by Whitewater prosecutors, only to later withdraw them. In a July 1995 chance encounter at the Little Rock airport with another cooperating Whitewater witness, H. Don Denton, a former Madison Guaranty vice president, Watt alleged that prosecutors told him to lie. But later, on the witness stand at the Tucker-McDougal trial, he changed his story, testifying under questioning from the prosecution, "No one asked me to tell a lie."

Watt's allegations about the Whitewater investigators might easily be dismissed because of his obvious credibility problems and his admitted animus toward Starr's office. But Hampton, the highly respected Little Rock criminal defense attorney who represented Watt, was present for virtually all of Watt's meetings with FBI agents and prosecutors from Starr's office.
In a series of interviews, Hampton corroborated Watt's account that Whitewater investigators left out of FBI reports the information about Watt's two meetings with Clinton.

"I have a very distinct memory of Watt recounting the two discussions with Clinton when Watt drove him back to the governor's mansion after night court," Hampton recalled. "He told them about it in some detail. There is no doubt about that."

Hampton said he was allowed to share his recollections of the meetings with Salon because his client, Watt, had given him permission to talk to do so. Ordinarily, he pointed out, he could not have spoken about the matter because of attorney-client privilege: "It's important for my other clients to know that I am not telling tales out of school," he said.

Among those who have vouched for Hampton's credibility is a federal Whitewater investigator. "I don't know that I would credit Bill Watt's story on its own. But Mark Hampton is a conscientious guy, and what he has to say should be looked at," said the investigator.

And, more important than Hampton's account is the fact that Watt's story is verified by a federal law enforcement official with direct knowledge of the official interviews.

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If Watt's account is true, why did the Whitewater investigators who interviewed Watt omit information from their reports that would have put Bill Clinton in a better light? Reign, the FBI agent responsible for writing up the interviews with Watt, declined to comment, telling Salon the matter was part of an ongoing investigation.

Other legal experts, while not familiar with the specifics of the Watt investigation, commented that there could be a variety of explanations for why the information was left out. "If something exculpatory does not show up in a '302' [FBI report], there can be any number of reasons for that to be the case," said John Barrett, the former prosecutor who now teaches criminal law at St. John's law school. "It might be an honest mistake by an agent. It might be an honest mistake of recollection by the witness. It could be that there was something more sinister that happened."

He added, "My own personal experience with FBI agents is that they are very by the book. A 302 is meant to be a memorandum of the interview. Agents write them as straight as they can to the best of their ability."

Another former federal prosecutor agreed there could be a variety of explanations. "To conceal exculpatory information is a crime if that was done purposely," he said. "If that is the case, someone should investigate and formally take evidence. But there are also a full range of possibilities of what could have occurred. You could have a dumb bunny, an agent without a lot on the ball. In any occupation, there is a spectrum of abilities. Independent counsels do not always get first-round draft picks."

By Murray Waas

Murray Waas is a frequent contributor to Salon.

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